Knowles v Wyatt
[2012] QDC 248
•5 September 2012
DISTRICT COURT OF QUEENSLAND
CITATION:
Knowles v Wyatt [2012] QDC 248
PARTIES:
JOHN LEONARD KNOWLES
(Plaintiff)
v
PETER ALBION WYATT
(Defendant)FILE NO/S:
385/2009
DIVISION:
Trial
PROCEEDING:
Claim
ORIGINATING COURT:
District Court of Queensland
DELIVERED ON:
5 September 2012
DELIVERED AT:
Cairns
HEARING DATE:
10 August 2012
JUDGE:
Everson DCJ
ORDER:
The claim is dismissed.
CATCHWORDS:
CLAIM- AGREEMENT – claim for a debt owed - whether debt is under a deed or agreement- whether claim is statute barred
Limitation of Actions Act 1974. s 10, s 35, s 36
Property Law Act 1974, pt 6 div 1400 George Street (Qld) Pty Limited & Ors v BG International Limited [2010] QCA 245
COUNSEL:
Ryall for the Plaintiff
Thompson S.C. for the DefendantSOLICITORS:
Lee Williams and Associates for the Plaintiff
HopgoodGanim Lawyers for the Defendant
Introduction
In this proceeding the plaintiff claims $226,000.00 together with interest allegedly owed to him by the defendant. The claim has its genesis a loan made by the plaintiff to a partnership which the plaintiff and the defendant created to acquire and develop a shopping centre, however the claim is pleaded as being made pursuant to a deed. The pleading of the plaintiff’s claim in this way is significant as if it was in fact pursuant to a deed, the claim would arguably be an action upon a specialty and attract a longer limitation period of 12 years by virtue of s 10(3) of the Limitation of Actions Act 1974 (“LAA”).
The defendant denies that he owes any monies to the plaintiff. The defendant disputes the existence of a deed and asserts that any claim of the plaintiff is a claim for a debt founded in contract and statute barred pursuant to s 10(1) of the LAA in any event.
At the conclusion of the plaintiff’s case the defendant elected not to call evidence[1] and submitted that he had no case to answer.
[1] Subject to Ex 1 being an agreed bundle of documents but tendered by the plaintiff.
The dealings between the parties
The plaintiff gave evidence that in December 1990 a partnership with the defendant came into being when he paid $250,000.00 to purchase a 40% share in the Strathpine Shopping Centre owned by the defendant. There was no formal partnership agreement but thereafter contributions were made to the partnership by him and profit and loss statements for the partnership recorded the plaintiff’s interest as being 40% and the defendant’s interest as being 60%.[2]
[2] T1–17 and Ex 1, pp 42 -50.
The plaintiff and the defendant had a long standing business relationship conducting insurance loss adjusting in Australasia and the Pacific region through various companies within what the plaintiff described as the Wyatt Group. It was decided between the parties that the plaintiff would terminate his relationship with the Wyatt Group and also that the Strathpine Shopping Centre would be sold. To effect this it was agreed that the corporate trustee controlled by the plaintiff Telbury Pty Ltd would sell the shares it held in Wyatt Group Pty Ltd to the corporate trustee controlled by the defendant, McGill Holdings Pty Ltd.
The plaintiff, Telbury Pty Ltd, the defendant and McGill Holdings Pty Ltd entered into an Agreement for Sale of Shares dated 27 May 1995 which was executed by each of the parties as an “Agreement”[3] (“the agreement”). This document provided for the purchase of the shares in question for the sum of $700,000.00 by ten instalments of $70,000.00. It also addressed the sale of the Strathpine Shopping Centre. Relevantly it stated:
“1.19“the Strathpine Shopping Centre Partnership” means an oral partnership agreement entered into between Wyatt and Knowles for the purposes of the acquisition and development of the Strathpine Shopping Centre;
1.20“the Strathpine Shopping Centre Partnership Loan Account” means the sum of $225,000.00 less $29,000.00 (leaving a total of $226,000.00), payable by the Strathpine Shopping Centre Partnership to Knowles;
…
5.1Wyatt and Knowles hereby acknowledge and agree to both undertake their best endeavours to ensure that the Strathpine Shopping Centre is sold by the Strathpine Shopping Centre Partnership on or before 31 December 1995. When the Strathpine Shopping Centre is sold, it is hereby agreed that after payment of all costs associated with the sale of the Strathpine Shopping Centre (including, but without limitation, repayment of the amount owing by the Strathpine Shopping Centre Partnership to the Commonwealth Bank) the Strathpine Shopping Centre Partnership Loan Account shall be forthwith repaid and the balance moneys (if any) shall then be paid to the Company.
5.2Upon completion of the payments referred to in clause 5.1 hereof, the Strathpine Shopping Centre Partnership shall thereupon be dissolved and Wyatt and Knowles will thereafter be under no further obligation to the other in respect of that Partnership.”
[3] Ex 1 pp 7-21.
The task of selling the Strathpine Shopping Centre was undertaken by the defendant and it proved difficult. It was eventually sold on 28 October 1996. The contract of sale is not in evidence. According to the plaintiff the ultimate consideration was “cash, six units on the Gold Coast…and Contrabart dollars.”[4] The precise nature and legal status of Contrabart dollars was never explained, however the plaintiff maintained they were worthless in any event.[5]
[4] T 1-22 lines 20-25.
[5] T 1-22 lines 35-40.
The defendant was having difficulty in making the payments contemplated by the agreement. Ultimately the parties to the agreement executed a further document dated 30 May 2001 in respect of outstanding payments. This document is described as a “variation to share sale agreement.”[6] The recitals in the document recorded that the parties agreed to vary the terms of the discount of the purchase price set out in the agreement as “reduced to writing in the terms and conditions of this formal document.”[7] Thereafter the parties acknowledged that only one instalment of $216,310.00 remained payable. The document then stated:
“2.3The parties acknowledge that the remaining instalment comprises the balance of the Purchase Price payable under the Agreement, and no further amounts are due and owing.
…
3.1Save and except for the variations contained in this agreement, the parties hereto acknowledge and confirm that the terms and conditions of the Agreement remain in full force and effect and are binding upon the parties in accordance with its terms.”
[6] Ex 1 pp 81-85.
[7] Ibid; Recital C.
Thereafter Part 4 of the document appears. There are four subparagraphs in general terms dealing with “Counterparts,” “Costs,” “Severance” and “Governing Law”. In each subparagraph the document is described as “this deed.” These are the only references to the document being a deed. At the conclusion of the document it is stated to be executed as an agreement. There is no reference to it being sealed and delivered by any party.
[10] It is uncontroversial that the plaintiff ultimately received both instalments of $216,310.00 referred to in the document dated 30 May 2001. What is controversial is whether an offer by the defendant to transfer a unit on the Gold Coast was to be in settlement of the amount of $226,000.00 payable pursuant to the agreement or the second instalment of $216,310.00 referred to above. The plaintiff gave evidence that he verbally agreed to take the unit “in settlement of the $226,000.00.”[8] Under cross examination he expressly denied that the transfer of the unit was proposed to offset the final instalment of $216,310.00.[9] The correspondence relating to the proposed transfer of the unit which is in evidence is ambiguous in this regard.
[8] T 1-26, lines 50-55.
[9] T 1-42, lines 30-35.
[11] Under cover of a facsimile transmission dated 18 December 2001 a contract for the sale of Unit 219, Pacific Place Bilinga naming the defendant as seller and the plaintiff as buyer was forwarded by the defendant’s solicitors to the plaintiff’s solicitors.[10] It contained the following special condition:
“3.3The parties to this Contract acknowledge and agree that the purchase price payable under this contract will be offset against the moneys due and owing by McGill to Telbury under the Share Sale Agreement and the Buyer will procure Telbury to issue an acknowledgement that the debt under the Share Sale Agreement has been reduced on the date of settlement of this Contract by the amount of the purchase price.”
[10] Ex 1 pp 93-101.
[12] In a subsequent email dated 22 January 2002 from Ms Snow of the defendant’s solicitors she sated to Mr Timmins of the plaintiff’s solicitors:
“I have been informed by my client that contrary to my initial understanding of this transaction the transfer of the unit to your client is not linked in any way to the sale of shares between our client’s respective companies. Accordingly special condition 3 of the draft contract submitted to you on 18 December is not relevant and should be deleted.”[11]
[11] Ex 1 p 107.
[13] The plaintiff gave evidence that he never received a unit on the Gold Coast from the defendant.[12] I accept his evidence in this regard and find that the contract did not proceed to completion. The second instalment of $216,310.00 was paid to the plaintiff under cover of a letter from the defendant’s solicitors dated 8 February 2002.[13]
[12] T 1-28, 45-50.
[13] Ex 1 p 104.
[14] I am left with the impression that the whole story surrounding the relevant dealings between the parties has not been told. It became apparent in the course of the trial that the plaintiff had not fully complied with his disclosure obligations in circumstances where he was aware that relevant records of the defendant were likely to have been destroyed or taken by the purchaser of his business. The incomplete picture of the long ago dealings of the parties makes findings of fact difficult. During the relevant period there were also numerous payments from the defendant to the plaintiff in respect of unrelated business dealings which exceeded 1.1 million dollars.[14]
[14] T 1-35 lines 50-55; Ex 2.
[15] The plaintiff concedes that there is no evidence of him personally making demand for the $226,000.00 which is the subject of this proceeding.[15] The only demand in evidence is contained in a letter from the plaintiff’s solicitors to the defendant’s solicitors dated 5 November 2008,[16] although two letters were sent in 2003 from the plaintiff’s solicitors to the defendant’s solicitors chasing the transfer of the unit.[17]
[15] T 1-43, lines 1-5.
[16] Ex 1, p 108.
[17] Ex 1 pp 105 and 106.
[16] The plaintiff is adamant, however that he never received the $226,000.00 stated to be owing to him in clause 1.20 of the agreement. There is nothing in the document dated 30 May 2001 to suggest otherwise and clause 3.1 of this document makes this clear. The position of the plaintiff is consistent with the email from Ms Snow dated 22 January 2002 and the letters from his solicitors in 2003 still seeking transfer of the unit in satisfaction of his claim long after the second instalment of $216,310.00 had been paid at the beginning of 2002. I accept the plaintiff’s evidence and find that he never received the $226,000.00 owing to him pursuant to the agreement.
Was the Document Dated 30 may 2001 a Deed?
[17] The circumstances in which a document is a deed were considered recently by the Court of Appeal in 400 George Street (Qld) Pty Limited & Ors v BG International Limited.[18] Matters to be considered include the language adopted such as “covenant, signed, sealed and delivered and the like”[19] and “what reasonable persons in the position of the parties would have understood the document to mean.”[20] The formalities for creating a deed have been modified by the Property Law Act 1974.[21] Essentially a deed is immediately binding on a party once executed by him and delivered by him or in circumstances where it is deemed to be delivered by him.
[18] [2010] QCA 245.
[19] Ibid [29].
[20] Ibid [30].
[21] Pt 6 div 1.
[18] The document dated 30 May 2001 was intended by the parties to it to be a variation of the agreement.[22] It was expressed to be a “Variation to Share Sale Agreement.”[23] It began with the words. “THIS AGREEMENT is made”[24] and at its conclusion was stated to be executed “as an Agreement”[25] rather than “signed, sealed and delivered.” Only general provisions in clause 4 use the term “deed”. The term “deed” is also used to describe the document in correspondence from the defendant’s solicitors to the plaintiff dated 8 February 2002 enclosing the final instalment of $216,310.00.[26]
[22] Ex 1 p 82 Recitals.
[23] Ex 1 p 81.
[24] Ex 1 p 82.
[25] Ex 1 p 84.
[26] Ex 1 p 104.
[19] Having regard to the clear intention of the parties, the description of the document itself, with the exception of the anomalous provisions in clause 4 and the absence of any language suggesting it is executed as a deed, I conclude that it is correctly described as an agreement and not a deed despite the language used in the letter dated 8 February 2002. It merely varied payment obligations of the defendant to the plaintiff which are irrelevant to the cause of action before me and acknowledged the continued existence of the plaintiff’s rights in respect of other aspects of the agreement in general terms.
The Plaintiff’s Claim is Statute Barred
[20] The plaintiff’s claim is properly described as an action “founded on simple contract” to adopt the language of s 10 of the LAA. Such an action cannot be brought after the expiration of six years from the date on which the cause of action arose.[27] The date on which the cause of action arose was on the sale of the Strathpine Shopping Centre on 28 October 1996.
[27] LAA s 10(1)(a).
[21] Relevantly s 35(3) of the LAA provides:
“Where a right of action has accrued to recover a debt or other liquidated pecuniary claim…and the person liable…therefor acknowledges the claim…. the right shall be deemed to have accrued on and not before the date of the acknowledgement. …”
S 36(1) of the LAA provides that every acknowledgement referred to in s 35 “shall be in writing and signed by the person making the acknowledgement.”
[22] The document dated 30 May 2001 satisfies these requirements when regard is had to clause 3.1 and the circumstances of its execution. To the extent the plaintiff contends that the email form Ms Snow dated 22 January 2002 also satisfies these requirements, this is clearly incorrect as it was not signed by the person making the acknowledgement. Even if it were, this would not assist the plaintiff.
[23] The plaintiff’s claim against the defendant became statute barred 6 years after 30 May 2001, on 31 May 2007.
Conclusion
[24] The claim was filed on 14 December 2009 by which time it was statute barred pursuant to s 10(1) of the LAA.
[25] The claim is therefore dismissed.
0
0
2