Mango Boulevard P/L v Spencer

Case [2009] QSC 389


SUPREME COURT OF QUEENSLAND

CITATION:

Mango Boulevard P/L v Spencer & Ors [2009] QSC 389

PARTIES:

MANGO BOULEVARD PTY LTD ACN 101 544 601
(plaintiff)
v
RICHARD WILLIAM SPENCER
(first defendant)
SILVANA PEROVICH
(second defendant)
KINSELLA HEIGHTS DEVELOPMENTS PTY LTD
ACN 100 373 368
(third defendant)
MIO ART PTY LTD
ACN 010 101 875
(fourth defendant)
PAUL DESMOND SWEENEY AND TERRY GRANT VAN DER VELDE AS TRUSTEES OF THE ESTATE OF RICHARD WILLIAM SPENCER
(fifth defendant)
PAUL DESMOND SWEENEY AND TERRY GRANT VAN DER VELDE AS TRUSTEES OF THE ESTATE OF SILVANA PEROVICH
(sixth defendant)

FILE NO/S:

BS 1999 of 2006

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

3 December 2009

DELIVERED AT:

Brisbane

HEARING DATE:

30 October 2009

JUDGE:

McMurdo J

ORDER:

It is ordered that:

1.   It be declared that as at 22 February 2006, each of the first and second defendants was, in terms of cl 10.1(d) of the Shareholders Deed dated 4 July 2003, unable to pay his or her debts.

2.   The plaintiff’s application for summary judgment be otherwise dismissed.

3.   The application by the first, second and fourth defendants for summary judgment be dismissed.

4.   The order of 3 April 2007 be varied by deleting:

(a)   sub-paragraph (d); and

(b)  the word “and” at the end of sub-paragraph (c);

from paragraph 7 of that order.

CATCHWORDS:

ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – RES JUDICATA – GENERAL MATTERS – where a Judge made a guillotine order that “there shall be judgment for the plaintiff … on the counterclaim” unless the first and second defendants complied with certain orders by a certain time – where the first and second defendants defaulted – where no judgment was filed or entered – whether the guillotine order required a determination on the merits – whether the guillotine order gave rise to a res judicata

ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – RES JUDICATA – WHETHER CAUSE OF ACTION THE SAME – where a Judge gave judgment on the counterclaim on the basis that it would otherwise constitute an abuse of process – where the Judge stated obiter dicta that the judgment said to result from the guillotine order gave rise to a res judicata – where the Court of Appeal upheld the abuse of process argument and expressed support in obiter dicta for the res judicata argument – whether the res judicata argument was an essential step in the reasoning of the Judge or the Court of Appeal

ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – ISSUE ESTOPPEL – RESPECTING WHAT MATTERS DECISION CONCLUSIVE – MATTERS NECESSARY TO THE DECISION – where it is assumed that the guillotine order gives rise to a final judgment – whether that necessarily decided the fact now in…

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AGLC
Mango Boulevard P/L v Spencer [2009] QSC 389
Case
[2009] QSC 389
Decision Date

CaseChat Overview and Summary

Mango Boulevard P/L was the plaintiff in a case against several defendants, including the first and second defendants, regarding a dispute over a shareholders' agreement. The case was heard in the Supreme Court of Queensland, with the Court of Appeal also involved in the decision-making process. The primary dispute centred on whether a previous adjudication, which resulted in a guillotine order, gave rise to a res judicata, and whether the first and second defendants could be estopped from arguing against the plaintiff's claims. The court was required to determine whether the previous adjudication was a final judgment that conclusively decided the issues at hand and if the defendants were precluded from advancing their case due to the previous order.

The court found that the guillotine order made by the Judge was not a final judgment and did not give rise to a res judicata. The court emphasised that the previous order did not require a determination on the merits, and the Judge's decision to grant judgment on the counterclaim was based on the argument that allowing the defendants to proceed with their case would constitute an abuse of process. The court of appeal upheld the abuse of process argument and expressed support for the res judicata argument in obiter dicta. However, the court held that the res judicata argument was not an essential step in the reasoning of the Judge or the Court of Appeal. Furthermore, the court found that the defendants were not estopped from advancing their case as the documents subject to the guillotine order were no longer relevant due to concessions made by the first and second defendants.

The court concluded that it would not be prejudicial to the fair trial of the proceeding if the defendants were allowed to advance their case. The court also found that the "Non-Defaulting Party" could not itself be in default under the deed, as each party had purported to issue a notice of default to the other. The court ordered that it be declared that as at 22 February 2006, each of the first and second defendants was unable to pay their debts. The plaintiff's application for summary judgment was dismissed, and the application by the first, second and fourth defendants for summary judgment was also dismissed. The order of 3 April 2007 was varied by deleting specific sub-paragraphs.

Orders

Orders of the court

It is ordered that:

1. It be declared that as at 22 February 2006, each of the first and second defendants was, in terms of cl 10.1(d) of the Shareholders Deed dated 4 July 2003, unable to pay his or her debts.

2. The plaintiff’s application for summary judgment be otherwise dismissed.

3. The application by the first, second and fourth defendants for summary judgment be dismissed.

4. The order of 3 April 2007 be varied by deleting:

(a) sub-paragraph (d); and

(b) the word “and” at the end of sub-paragraph (c);

from paragraph 7 of that order.

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

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