Kleiner v Ross (No 2) - [2009] QDC 239

DISTRICT COURT OF QUEENSLAND

CITATION: Kleiner v Ross (No2) [2009] QDC 239
PARTIES: Herman Karl Kleiner & Inge Ilse Kleiner
(Plaintiffs)
and
David Allan Ross
(Defendant)
FILE NO/S: 444/08
DIVISION: Civil
PROCEEDING: Application
ORIGINATING District Court, Townsville
COURT:
DELIVERED ON: 16 April 2009
DELIVERED AT: Townsville
HEARING DATE: 30 March 2009
JUDGE: Durward SC DCJ

ORDERS:

1.

Application for summary judgment granted. Judgment for the plaintiffs against the defendant in the sum of $71,000.00 plus interest to 16 April 2009 in the sum of $7,745.23.
2. Application to stay judgment refused.

3.

Application to strike out amended defence and amended counterclaim granted.

4.

Leave to the defendant to commence a separate action in respect of his claim.

5.

The defendant to pay the plaintiffs’ costs of and incidental to the application assessed on the standard basis or as agreed.

CATCHWORDS: PLEADINGS - amended defence and counterclaim – claim
for debt under Deed admitted – breach of restraint clause in
separate Business Sale contract pleaded as common law and
equitable set-off by counterclaim.
DAMAGES - defendant pleads the purchase price in the
Deed as damages for the breach in Business Sale contract –
whether damages claim properly pleaded as a matter of law –
uncertainty as to the quantum of damages.
STRIKING OUT – whether amended pleadings should be
struck out – whether counterclaim should be made in separate
proceeding.
SUMMARY JUDGMENT – claim on Deed now admitted –
no defence – whether set-off should delay summary
judgment.
STAY OF JUDGMENT – whether grounds for stay of
judgment on Deed while claim on separate Business Sale
contract can be formulated and prosecuted.

Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145; Cabanda Pty Ltd v National Formal Wear Group Pty ltd (2001) QSC 290: Daewoo Australia Pty Ltd v Porter Crane Imports Pty Ltd t/as Betta Machinery Sales (2000) QSC 050; Lu Simon Builders Pty Ltd v HD Fowles & Ors (1992) 2 VR 189; Goldberg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711; State Bank of Victoria v Parry (1989) WAR 240.
Rules 173 and 300 Uniform Civil Procedure Rules.
COUNSEL: Mr AJ Moon for the plaintiff/applicant
Mr D Honchin for the defendant/respondent

SOLICITORS:

Connolly Suthers for the applicant LA Ward Legal for the Respondent

On 24 February 2009 I granted the plaintiffs’ application to strike out the defendant's defence and counterclaim and gave leave to the defendant to file and serve a further defence or defence and counterclaim within 14 days. I adjourned the plaintiffs’ application for summary judgment.
An amended defence and amended counterclaim were filed on 12 March 2009. A Reply and Answer was filed on 26 March 2009. A further application to strike out the amended defence and the amended counterclaim was filed on 25 March 2009.
THE AMENDED PLEADING OF THE DEFENDANT
The defendant now admits the plaintiffs’ claim save for an assertion about the time of the payment of the last of a series of weekly instalment…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] QDC 239
Decision Date: 16/04/2009

CaseChat Overview and Summary

The case of Kleiner v Ross (No 2) involved the plaintiff, Kleiner, and the defendant, Ross. The dispute centred around a debt under a Deed of loan and a claim for breach of a restraint clause in a contract for the sale of a business. The matter was heard in the Supreme Court of Victoria. The plaintiff sought summary judgment for the debt owed under the Deed of loan, while the defendant argued against the judgment and proposed a counterclaim for damages arising from the alleged breach of the restraint clause.

The legal issues before the court were whether the defendant's counterclaim was bona fide and if the court should grant a stay of execution of the summary judgment pending the outcome of the counterclaim. The court had to consider the connection between the claim and the counterclaim, the strength of the counterclaim, and whether there were special circumstances justifying a stay. The court also had to determine whether the onus was on the defendant to prove the quantum of damages according to the appropriate measure.

In its reasoning, the court referred to the case of State Bank of Victoria v Parry, which held that summary judgment would be ordered if there was no defence to the plaintiff's claim but a plausible counterclaim existed. The court emphasised that a stay of execution would not be granted simply because a cross claim was brought in another action against the plaintiff unless special circumstances existed. The court found that the defendant had not demonstrated any special circumstances that would warrant a stay of execution of the summary judgment. The onus remained on the defendant to prove the quantum of damages according to the appropriate measure, and until this was done, the issue of whether there was a bona fide counterclaim remained unresolved.

ORDERS:
1. The stay application is refused.

Orders

Orders of the court

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In State Bank of Victoria v Parry (supra): “Where there is no defence to the plaintiffs' claim, but there is a plausible counterclaim for an amount not less than the plaintiffs’ claim, summary judgment will be ordered with a stay of execution until the trial of the counterclaim or further order… in a proper case the court may order payment into the court of part of the claim with a stay of execution pending the counterclaim…where the counterclaim arises out of quite a separate and distinct transaction, or there is no connection between the claim and the counterclaim, the proper order is for judgment for the plaintiff with costs without a stay pending the trial of the counterclaim…the degree of connection between the claim and the counterclaim, the strength of the counterclaim and the ability of the plaintiff to satisfy any judgment on the counterclaim are some of the considerations which the court may take account of in the exercise of its discretion whether or not to order a stay. In general, therefore, a counterclaim which is in effect an unconnected cross action will not provide a basis for a stay under O14, r3. Consistently with this proposition a stay of execution of a judgment will not ordinarily be granted simply because the defendants bring a cross claim in another action against the plaintiff, in the absence of special circumstances rendering it inexpedient to enforce the judgment” (my underlining). The expression “special circumstances” are particular to the order of the Supreme Court in Western Australia and is not a relevant consideration with respect to rule 300 UCPR. The issue of whether there is a bona fide counterclaim at all remains in issue for as long as the damages remain unquantified. The onus remains on the defendant to prove (now in the separate claim), according to the appropriate measure, that he has suffered loss. See Goldberg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 (at 714). I am not prepared to grant a stay of the summary judgment on the Deed of loan on any of the information presently before me. If the defendant has a proper claim on breaches of the restraint clause in the contract for sale of the business, and a proper measure of damages is pleaded, then there may perhaps be a basis for an application for a stay of execution of the summary judgment. Of course, there would need to be circumstances demonstrated on admissible evidence that would persuade the court to exercise its discretion to order such a stay. In the premises I refuse the stay application. ORDERS

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Kleiner v Ross (No2) [2009] QDC 239
PARTIES:	Herman Karl Kleiner & Inge Ilse Kleiner (Plaintiffs)
and
David Allan Ross (Defendant)
FILE NO/S:	444/08
DIVISION:	Civil
PROCEEDING:	Application
ORIGINATING	District Court, Townsville
COURT:
DELIVERED ON:	16 April 2009
DELIVERED AT:	Townsville
HEARING DATE:	30 March 2009
JUDGE:	Durward SC DCJ

ORDERS:	1.	Application for summary judgment granted. Judgment for the plaintiffs against the defendant in the sum of $71,000.00 plus interest to 16 April 2009 in the sum of $7,745.23.
2.	Application to stay judgment refused.
3.	Application to strike out amended defence and amended counterclaim granted.
4.	Leave to the defendant to commence a separate action in respect of his claim.
5.	The defendant to pay the plaintiffs’ costs of and incidental to the application assessed on the standard basis or as agreed.

CATCHWORDS:	PLEADINGS - amended defence and counterclaim – claim for debt under Deed admitted – breach of restraint clause in separate Business Sale contract pleaded as common law and equitable set-off by counterclaim. DAMAGES - defendant pleads the purchase price in the Deed as damages for the breach in Business Sale contract – whether damages claim properly pleaded as a matter of law – uncertainty as to the quantum of damages. STRIKING OUT – whether amended pleadings should be struck out – whether counterclaim should be made in separate proceeding. SUMMARY JUDGMENT – claim on Deed now admitted – no defence – whether set-off should delay summary judgment. STAY OF JUDGMENT – whether grounds for stay of judgment on Deed while claim on separate Business Sale contract can be formulated and prosecuted.
Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145; Cabanda Pty Ltd v National Formal Wear Group Pty ltd (2001) QSC 290: Daewoo Australia Pty Ltd v Porter Crane Imports Pty Ltd t/as Betta Machinery Sales (2000) QSC 050; Lu Simon Builders Pty Ltd v HD Fowles & Ors (1992) 2 VR 189; Goldberg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711; State Bank of Victoria v Parry (1989) WAR 240.
Rules 173 and 300 Uniform Civil Procedure Rules.
COUNSEL:	Mr AJ Moon for the plaintiff/applicant Mr D Honchin for the defendant/respondent
SOLICITORS:	Connolly Suthers for the applicant LA Ward Legal for the Respondent