Llewellyn v Bustfree Pty Ltd - [2012] QCA 354

[2012] QCA 354

COURT OF APPEAL

MUIR JA

Appeal No 11355 of 2012
DC No 307 of 2012

PETER ELFYD LLEWELLYN &
RODERICK WICKHAM JAMES Applicants

BUSTFREE PTY LTD Respondent

BRISBANE

DATE 14/12/2012

JUDGMENT

MUIR JA: The applicants were defendants in proceedings commenced by the respondent in the District Court in Southport. The respondent claimed $200,000 damages for shares which were issued or transferred to the applicants in 2003 and damages of $550,000 for misappropriation of its funds and mismanagement of its affairs. This description of the respondent's claims is taken from the applicant's outline of argument. A copy of the claim and statement of claim were not before me.

The applicants and the respondent each made application for summary judgment. On 9 November 2011, the primary judge, after a hearing that day, made orders which were also not before me although, a copy of an order made by the primary judge on 24 August 2012 was exhibited to the affidavit relied on by the applicants.

On 24 August 2012, the primary judge ordered that the respondent file and serve on the applicants' solicitors further and better particulars of its allegations that a deed of settlement note on 29 March 2004 was "void and liable to be set aside for fraud and/or unconscionable conduct and/or unfair dealing". It was further ordered that, on or before 21 September 2012, the respondent file and serve on the applicants' solicitors all affidavits evidencing the allegations of such fraud, unconscionable conduct or unfair dealing.

In his reasons, the primary judge referred to the particulars and affidavit evidence provided in response to the orders. He noted that the documents upon which the respondent relied to support the particulars all pre-dated the deed. His Honour observed that, before entering into the deed, the controller of the respondent, Ms Westall, was represented by solicitors and that in an email of 15 March 2004, to the applicants' solicitors, the respondent's solicitors had expressed approval of the content of the proposed deed.

The primary judge referred to an assertion by Ms Westall that she did not see a copy of the deed before signing it, but found that Ms Westall "with legal advice knew what she was signing, and agreed to sign it". He found also that had Ms Westall been concerned about matters raised by her on the hearing before him with a view to resisting summary judgment, she ought to have raised them with her solicitor before signing the deed.

The primary judge concluded that the respondent had no real prospect of succeeding on all or any part of the claims set out in the deed.

The respondent appealed against the primary judge's order. Some of the grounds of appeal in the notice of appeal appear to be merely part of the narrative. It is unnecessary to make any further reference to them. The other grounds are that:

1.the primary judge erred by refusing to hear all closing submissions from the respondent;
2.the respondent received the…

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.

Continue reading Llewellyn v Bustfree Pty Ltd

Details

AGLC: Llewellyn v Bustfree Pty Ltd [2012] QCA 354
Case: [2012] QCA 354
Decision Date: 14/12/2012

CaseChat Overview and Summary

In Llewellyn v Bustfree Pty Ltd, the applicants, Peter Elfy Llewellyn and Roderick Wickham James, were defendants in proceedings brought by the respondent, Bustfree Pty Ltd, in the District Court in Southport. The respondent sought $200,000 for shares issued or transferred to the applicants in 2003, and $550,000 for misappropriation of funds and mismanagement. Both parties applied for summary judgment, and the primary judge made orders on 9 November 2011, which were not before the Court of Appeal. On 24 August 2012, the primary judge ordered the respondent to provide further particulars and affidavit evidence in relation to claims that a deed of settlement was void due to fraud or unconscionable conduct. The primary judge concluded that the respondent had no real prospect of succeeding on the claims, and the respondent appealed this decision.

The Court of Appeal considered the grounds of appeal, which included the primary judge's refusal to hear all closing submissions, the respondent receiving the applicants' outline of argument the evening before the hearing, the refusal of the applicants' strike-out arguments on prior occasions, and the primary judge not considering further evidence offered by the respondent. The Court discussed the principles for granting security for costs, and whether the respondent had an arguable case and the potential for the respondent to be unable to meet a costs order if the appeal was unsuccessful. The Court found that the evidence showed the respondent would be unable to meet such costs, but it was not clear that the respondent did not have an arguable case. The Court also considered the possibility that the respondent's impecuniosity was caused by the applicants, and that the primary judge may have taken an unduly simplistic approach in determining whether a triable issue existed.

In light of these considerations, the Court declined to order security for costs and dismissed the application. The Court noted that the consequences of this order for Ms Westall, the controlling mind of the respondent, would be that if she loses the appeal, she will have to pay the costs of the application and the appeal. The Court also suggested that the respondent seek legal assistance, as some of the arguments being made were not straightforward, and the submissions made in the matter did not give much confidence in the respondent's capacity to appreciate the real issues and focus on them.

Orders