| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : KINDALE CONSULTING GROUP PTY LTD -v- HARRISON [2005] WADC 7 CORAM : FENBURY DCJ HEARD : 12 NOVEMBER 2004 DELIVERED : 28 JANUARY 2005 FILE NO/S : CIV 1691 of 2002 BETWEEN : KINDALE CONSULTING GROUP PTY LTD (ACN 088 861 303) Plaintiff
AND
RAYMOND FRANCIS HARRISON
Defendant
Catchwords: Action for moneys due pursuant to a deed - Turns on own facts - Whether plaintiff acted as finance broker - Whether plaintiff was a licensed finance broker
Legislation: Finance Brokers Conferral Act 1975,s 43
Result: Judgment for the plaintiff
(Page 2)
Representation:
Counsel:
Plaintiff : Mr M Seaman
Defendant : No appearance
Solicitors:
Plaintiff : Wojtowicz Kelly
Defendant : No appearance
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Simto Resources Ltd v Normandy Capital Ltd & Anor (1993) 115 ALR 609
(Page 3)
1 FENBURY DCJ: The hearing in this matter was listed for one day on Friday 12 November 2004.
2 The defendant did not appear, either personally or by counsel. However, he wrote a letter to my Associate dated 11 November 2004 indicating that he would not be attending at trial. There is no doubt that he was aware of the trial. 3 Order 34 of the Supreme Court Rules, subrule 2 states: "If, when a trial is called on, one party does not appear the Judge may proceed with the trial of the action or of any counterclaim in the absence of that party." 4 This trial proceeded in the absence of the defendant. 5 The plaintiff sues on a deed stamped 9 January 2001 entered into between the plaintiff and the defendant whereby the defendant would pay to the plaintiff the sum of $65,000 together with interest calculated as described. 6 The plaintiff demanded payment of the sued for sum, together with interest, by letter dated 3 April 2002. The plaintiff made a further demand for the sum together with interest by letter dated 27 May 2002. The defendant did not pay any sum to the plaintiff and consequently the plaintiff brought this action. In his defence, the defendant admits having executed the deed upon which the plaintiff sues but argues that the payment claimed is for services provided by the plaintiff being the services of a finance broker and further asserts the plaintiff was not licensed as such, as required by s 43 of the Finance Brokers Control Act 1975. 7 Consequently, by reason of s 43 of the Act, the defendant asserts "the deed was and is illegal and unenforceable against the defendant". 8 Alternatively the defendant asserts that by reason of the fact that the plaintiff performed the services of a finance broker and was unlicensed: "The defendant was and is not obliged to pay any commission, reward or other valuable consideration to the plaintiff." 9 On the face of it, the undated but stamped deed has been duly executed by the parties to it. The defendant's signature was witnessed. Although the common seal of the plaintiff corporation is not affixed, the deed purports to be executed pursuant to the provisions of s 127 of the
(Page 4)
Corporations Law. There is no suggestion that either of the parties lacked capacity. There is no suggestion that the deed is a sham. 10 There is no reason why the deed should not be given its full effect as a written instrument. No point was taken about s 9 of the Property Law Act but arguably the document complies. In my view it is an enforceable contract and, giving it full effect, it must entitle the plaintiff to the judgment and interest that it seeks. 11 The only issue raised on behalf of the defendant is to the effect that the plaintiff was acting unlawfully, somehow, in seeking the monies claimed from the defendant. 12 This response seems to me to miss the point of the matter. The plaintiff sues on a deed, not as a provider of financial broking services, licensed or otherwise. In the absence of any flaw in the deed, as a deed, I cannot see how the plaintiff should be deprived of its judgment. In my view there should be judgment for the plaintiff with interest and costs. 13 The issue having been raised, and given the absence of the defendant, I will make one or two remarks about the other aspects of the matter. The sole director of the plaintiff company is a man named Mr Pedlar. When the plaintiff company was formed it searched for business opportunities, in engaging in business, naturally, and the matter that forms the background of this case was the first "deal" in which it became involved. According to counsel for the plaintiff the matter involved a sub-underwriting agreement to raise shares in a company. The plaintiff says that this business was not the business of a finance broker. 14 In Mr Pedlar's words, T 5: "The business that Kindale Consulting proposed to perform?---At that stage it was financial consulting. Did it involve the raising of any loan finance?---Well, once we got into the business, it was apparent that in the course of assisting companies or individuals with their financial structuring etc etc it was probable that we were going to be required to arrange loans for them, which was covered by the Finance Brokers Act. So we then determined that it was appropriate to apply for a licence. What was the purpose…what did Mr Harrison want you to do?---Mr Harrison wanted me to arrange some funds to enable him
(Page 5)
15 In the evidence, it further transpired that this arrangement with the defendant was the first of its kind conducted by the plaintiff. It is submitted the plaintiff was not "in the business" of finance broking in any event. It was a "one off" or ad hoc transaction at the time it occurred. (refer to Simto Resources Ltd v Normandy Capital & Anor). 16 Furthermore, after this arrangement had been concluded, the plaintiff came to the realisation that some of the services it may be required to provide in the business it was pursuing were likely to fall within the definition of financial broking services. Consequently the plaintiff decided to obtain a licence which it did. This occurred after the above described arrangement had been concluded, but before the above mentioned deed was executed by the parties. 17 I do not think that this solitary transaction can or even should result in a finding that the plaintiff was conducting the business of finance broking at the relevant time. Furthermore, there seems to me to be considerable doubt that the arrangement facilitated by the plaintiff was in the nature of a loan, given the absence of any provision for interest. 18 There should be judgment for the plaintiff in this matter as I have already concluded and I shall hear from the plaintiff as to the appropriate orders.
|