SUPREME COURT OF QUEENSLAND
CITATION:
Hung & Anor v Hung & Anor [2018] QCA 87
PARTIES:
TIEN TSAI HUNG
(first appellant)
SU YEN WANG
(second appellant)
v
TIEN CHUAN HUNG
(first respondent)
FENG HUA WU
(second respondent)FILE NO/S:
Appeal No 11152 of 2017
SC No 63 of 2017DIVISION:
Court of Appeal
PROCEEDING:
General Civil Appeal
ORIGINATING COURT:
Supreme Court at Brisbane – [2017] QSC 200DELIVERED ON:
9 May 2018
DELIVERED AT:
Brisbane
HEARING DATE:
4 April 2018
JUDGES:
Fraser and Morrison JJA and Bond J
ORDERS:
1. Allow the appeal, with costs.
2. Vary order 1 made in the Trial Division on 10 October 2017 so that the order 1, as varied, provides:
“In relation to Paragraph N of the Amended Statement of Claim:
a. the Defendants pay the Plaintiffs the sum of $1,403,500.00.
b. the sum in (a) is calculated as follows:
“Interest Calculation – Simple interest (calculated on an annual basis)
Loan 1: 15 December 1993 – 14 December 2016 (the period the basis of which judgment sum was sought)
Principal: $170,000
Interest: 11% calculated on an annual basis = $430,100
Principal + Interest = $600,100
Loan 2: 2 December 1994 – 1 December 2016 (the period the basis of which judgment sum was sought)
Principal: $260,000
Interest: 9.5% calculated on an annual basis = $543,400
Principal + Interest = $803,400
Total sum: $1,403,500.”3. Vary order 3 made in the Trial Division by adding to that order:
“In particular, Order 1(a) does not preclude the plaintiffs from claiming, in relation to Paragraph N of the Amended Statement of Claim, that the Defendants should be ordered to pay to the Plaintiffs an additional sum representing the difference between simple interest and compound interest upon each of the principal sums of $170,000 and $260,000 mentioned in Order 1(b).”
CATCHWORDS:
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SETTING ASIDE – where the appellant applied for summary judgment of principal plus interest on two loans of $170,000 and $260,000 that were outstanding for many years – where the appellants acknowledge they are liable for principal and simple interest – where the respondents claimed compound interest – where there was a dispute about whether the loan was made on the basis of a verbal agreement or a written loan acknowledgement – where the primary judge granted the summary judgment order for an amount incorporating compound interest – whether the primary judge erred in concluding that the appellants have no real prospect of successfully defending the respondents’ claim for compound interest and that there is no need for a trial of that part of the claim
Uniform Civil Procedures Rules 1999 (Qld), r 292(2)
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; [1983] HCA 25, applied
Morton v Elgin-Stuczynski (2008) 19 VR 294; [2008] VSCA 25, cited
Nemeth v Bayswater Road Pty Ltd [1988] 2 Qd R 406, applied
State Rail Authority of New South…
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- AGLC
- Hung v Hung [2018] QCA 87
- Case
- [2018] QCA 87
- Decision Date
CaseChat Overview and Summary
The legal issues in this case revolved around the nature of the loan agreements and whether the interest on the loans was simple or compound. The primary judge had concluded that the loan agreements were written agreements that governed the loans and that the appellants were liable for compound interest. The appellants argued that the loans were made on the basis of a verbal agreement that did not provide for compound interest. The Court of Appeal found that the primary judge's interpretation of the loan agreements was correct and that the appellants had no real prospect of successfully defending the respondents' claim for compound interest.
The Court of Appeal held that the primary judge's conclusion that the appellants had no real prospect of successfully defending the respondents' claim for compound interest was correct. The Court found that the written agreements that governed the loans provided for compound interest and that the appellants had implicitly conceded this in their affidavits. The Court also found that the application of the parol evidence rule and the principle that there is no presumption upon the question whether interest is to be simple interest or compound interest required the dispute to be resolved by the process of contractual interpretation adopted by the primary judge. The Court of Appeal concluded that the primary judge's interpretation of the loan agreements was correct and that the appellants had no real prospect of successfully defending the respondents' claim for compound interest.
The Court of Appeal allowed the appeal and varied the orders of the primary judge. The Court ordered that the appellants pay the respondents the sum of $1,403,500.00, calculated as simple interest on the principal amounts of the loans. The Court also noted that the primary judge's orders did not preclude the respondents from claiming an additional sum representing the difference between simple interest and compound interest upon each of the principal sums of $170,000 and $260,000 mentioned in the orders. The Court of Appeal dismissed the appeal, with costs.
Orders
Orders of the court
1. Allow the appeal, with costs.
2. Vary order 1 made in the Trial Division on 10 October 2017 so that the order 1, as varied, provides:
“In relation to Paragraph N of the Amended Statement of Claim:
a. the Defendants pay the Plaintiffs the sum of $1,403,500.00.
b. the sum in (a) is calculated as follows:
“Interest Calculation – Simple interest (calculated on an annual basis)
Loan 1: 15 December 1993 – 14 December 2016 (the period the basis of which judgment sum was sought)
Principal: $170,000
Interest: 11% calculated on an annual basis = $430,100
Principal + Interest = $600,100
Loan 2: 2 December 1994 – 1 December 2016 (the period the basis of which judgment sum was sought)
Principal: $260,000
Interest: 9.5% calculated on an annual basis = $543,400
Principal + Interest = $803,400
Total sum: $1,403,500.”
3. Vary order 3 made in the Trial Division by adding to that order:
“In particular, Order 1(a) does not preclude the plaintiffs from claiming, in relation to Paragraph N of the Amended Statement of Claim, that the Defendants should be ordered to pay to the Plaintiffs an additional sum representing the difference between simple interest and compound interest upon each of the principal sums of $170,000 and $260,000 mentioned in Order 1(b).”
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The respondents submitted that the order granting summary judgment was correct for the reasons given by the primary judge. The sections of the statement of claim specifically concerning the Clark Road loan and the Green Road loan pleaded written agreements for loan which contained the material terms of the agreements, including as to the appellants’ liability for interest as claimed by the respondents. In each case that written agreement was adduced in evidence in the summary judgment application. (The respondents here referred to each Acknowledgement of Loan.) The claim for compound interest was sufficiently pleaded in the statement of claim. Although the claim did not make a claim for the repayment of the loans, with or without interest, the respondents subsequently filed an amended claim by leave which did make the necessary claims. The affidavit of the first respondent verified the material elements of the claim, including the claims for compound interest. The affidavit of the first appellant did not challenge any relevant part of the first respondent’s affidavit. By the time of the summary judgment hearing it was not contentious that the Clark Road loan and the Green Road loan were governed by written agreements. That was clear from the affidavits. To the extent that there was any inconsistency between that view and paragraphs 10 and 11 of the statement of claim the inconsistency should be ignored. The application for summary judgment was concerned only with paragraphs 24 to 33 of the statement of claim. In any event the earlier paragraphs were not inconsistent with the later paragraphs. The affidavit of the first appellant implicitly conceded that the written agreements, signed by him and his wife, regulated the loan. Assertions by the first appellant that the loans did not provide for compound interest were not relevant in the exercise of construing the loan documents. At the summary judgment hearing the appellants did not identify any evidence which might assist in the construction of the agreements and the first respondents’ affidavit appeared positively to assert that all of the financial arrangements were set out in the written agreements. The concessions identified by the primary judge were made by the appellants’ counsel. Application of the parol evidence rule, and the principle that there is no presumption upon the question whether interest is to be simple interest or compound interest, required the dispute to be resolved by the process of contractual interpretation adopted by the primary judge. There is no ambiguity in the meaning of the written agreements as the primary judge concluded.Consideration The first respondent verified the respondents’ statement of claim by the statement in his affidavit that it was filed on his instructions and set out his honest and true recollection of the history of property acquisition with his brother since they made their agreement in mid-1990. The allegation in paragraph 10 of the statement of claim that the loan was made on the basis of a verbal agreement which included a term that interest attracted to the principal describes an obligation by the appellants to pay only simple interest. The terms of the alleged verbal agreement do not express an obligation to pay the interest on the principal at any time before the sale of the property, out of which the principal and interest was intended be recouped, much less an obligation to pay interest upon any interest that remained unpaid after it was due for payment. In that context, the alleged term providing for interest to be “calculated annually” conveys no more than it says. There is also no allegation in the later section of the pleading, including paragraph 24, that an obligation to pay interest on interest is implicit in the express terms or implied in the contract. In short, the statement of claim alleges that the loans were made on the basis of a verbal agreement under which the appellants are obliged to pay simple interest rather than compound interest.