Mayo v Gepp
[2015] WASC 270
•27 JULY 2015
MAYO -v- GEPP [2015] WASC 270
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 270 | |
| Case No: | CIV:1547/2015 | ON THE PAPERS | |
| Coram: | ALLANSON J | 27/07/15 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | JILL ELIZABETH MAYO LARRY BERNARD MAYO PETER GEPP ROSS SYDNEY CALNAN DIANE CALNAN PETRE CRISTEA DOROTHY ALICE CRISTEA |
Catchwords: | Practice and procedure Application for default judgment Whether claim is for a liquidated demand only Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 22 r 2 |
Case References: | Cornelius v Barewa Oil & Mining (NL) (in liq) [1982] WAR 311 Spain v Union Steamship Co of NZ Limited [1923] HCA 21; (1923) 32 CLR 138 Woolworths Ltd v Wills [2013] NSWSC 1417 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- LARRY BERNARD MAYO
Plaintiffs
AND
PETER GEPP
First Defendant
ROSS SYDNEY CALNAN
Second Defendant
DIANE CALNAN
Third Defendant
PETRE CRISTEA
Fourth Defendant
DOROTHY ALICE CRISTEA
Fifth Defendant
Catchwords:
Practice and procedure - Application for default judgment - Whether claim is for a liquidated demand only - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 22 r 2
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiffs : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Solicitors:
Plaintiffs : Williams & Hughes
First Defendant : No appearance
Second Defendant : Hammond Legal
Third Defendant : Hammond Legal
Fourth Defendant : Petherick Cottrell Lawyers
Fifth Defendant : Petherick Cottrell Lawyers
Case(s) referred to in judgment(s):
Cornelius v Barewa Oil & Mining (NL) (in liq) [1982] WAR 311
Spain v Union Steamship Co of NZ Limited [1923] HCA 21; (1923) 32 CLR 138
Woolworths Ltd v Wills [2013] NSWSC 1417
1 ALLANSON J: The plaintiffs originally commenced these proceedings by writ of summons in the District Court.
2 By an amended writ of summons, dated 3 March 2015, the plaintiffs bring claims against five defendants: Peter Gepp (first defendant), Ross Sydney Calnan and Diane Calnan (second and third defendants), and Petre Cristea and Dorothy Alice Cristea (fourth and fifth defendants).
3 The plaintiffs claim, in summary, that:
(1) They entered into a loan agreement with Mr and Mrs Calnan under which, on or about 28 August 2008, they advanced $375,000 (the loan monies) by depositing them into a bank account of settlement agents instructed by Mr and Mrs Calnan: [8] - [9].
(2) The loan monies were applied by Mr and Mrs Calnan to the purchase of a property in Attadale, in the name of Mrs Calnan: [10].
(3) On or about 9 April 2013, the plaintiffs made demand for the repayment of the loan monies together with accrued interest. Despite the demand, Mr and Mrs Calnan failed or refused to repay the loan monies and accrued unpaid interest: [13].
4 In the alternative, the plaintiffs plead that Mr and Mrs Calnan did not give any value or consideration for the loan monies, and that Mr and Mrs Calnan have been unjustly enriched at the expense of the plaintiffs: [15] - [16].
5 As a further alternative, the plaintiffs claim that Mr and Mrs Calnan received the loan monies with knowledge of a breach of fiduciary duty by Mr Gepp, the accountant and financial adviser of the plaintiffs: [28].
6 The plaintiffs claim against Mr and Mrs Cristea:
(1) After the receipt of the loan monies, Mr and Mrs Calnan acquired the Attadale property and held it until they caused it to be sold in or about February or March 2013: [29.1].
(2) On or around 29 April 2013, Mr and Mrs Calnan directed 'around $295,000' of the sale proceeds of the Attadale property be used to discharge a mortgage over a property in O'Connor registered in the name of Mrs Calnan 'held on bare trust for Mr and Mrs Cristea': [29.2].
(3) On or about 2 May 2013, Mr and Mrs Calnan caused the O'Connor property to be sold and settled: [29.3].
(4) Mr and Mrs Calnan caused a property at Erskine to be acquired by Mr and Mrs Cristea in a simultaneous settlement 'by directing the sale proceeds of the O'Connor Property to be applied towards the purchase price of the Erskine Property': [29.4].
7 The plaintiffs plead that, in the premises, the O'Connor property represented, and the Erskine property now represents, part of the traceable proceeds of the loan monies [30]; further or alternatively, they have a security interest over the O'Connor property 'which interest now subsists over the Erskine property' [31].
8 The plaintiffs claim that they are entitled to restitution of the traceable proceeds from Mr and Mrs Cristea to prevent them from being unjustly enriched at the expense of the plaintiffs [32]; further or alternatively, Mr and Mrs Cristea took their interest in the Erskine property subject to the security interest of the plaintiffs [33].
9 The prayer for relief claims against Mr and Mrs Cristea:
K A declaration that the Plaintiffs have a security interest in the Erskine Property by way of subrogation to the position of Permanent Custodians Limited;
L Further or alternatively, orders that the Fourth Defendant and the Fifth Defendant hold the Erskine Property on constructive trust for the Plaintiffs to the extent of the Traceable Proceeds;
M Further or alternatively, orders that the Fourth Defendant and the Fifth Defendant disgorge the Traceable Proceeds for the benefit of the Plaintiffs so as to prevent unjust enrichment of the Fourth Defendant and the Fifth Defendant.
10 Based upon that plea, the plaintiffs seek to enter judgment in default under the Rules of the Supreme Court 1971 (WA) O 22 r 2(1) in these terms:
The Fourth and Fifth Defendant do pay the Plaintiffs $295,236.94 plus interest thereon from 2 May 2013 to 24 April 2015 [the date of the proposed judgment in default] pursuant to section 32 of the Supreme Court Act 1935 at the rate of 6% per annum, being $38,088.69 and accruing at a daily rate of $48.53, and costs to be taxed.
11 The rule provides:
Where the plaintiff's claim is against a defendant for a liquidated demand only, then, if that defendant fails to serve a defence on the plaintiff, the plaintiff may, after the expiration of the period fixed by or under these rules for service of the defence, enter final judgment against that defendant for a sum not exceeding that claimed by the writ in respect of the demand, and for costs, and proceed with the action against the other defendants, if any.
12 The plaintiffs submit that a claim is for a liquidated demand whenever the amount to which the plaintiff is entitled can be ascertained by calculation or fixed by any scale of charges, or other positive data: Spain v Union Steamship Co of NZ Limited [1923] HCA 21; (1923) 32 CLR 138, 142. The plaintiffs claim in their application that the amount of $295,236.94 can be ascertained by positive data. They rely on an affidavit of John Andrew Robertson, the solicitor for the plaintiffs, sworn 29 April 2015. Mr Robertson deposes:
(1) The action against Mr and Mrs Cristea is based upon tracing and subrogation and unjust enrichment of a liquidated amount of $375,000: [3].
(2) Proceeds of the plaintiffs' money in the amount of $375,000 can be traced:
(a) from the payment towards the deposit for the purchase of the Attadale property;
(b) to the payout of Permanent Custodians Limited mortgage that Mrs Calnan had granted over the property at O'Connor; and
(c) 'then allowing the net sale proceeds of the O'Connor property to be available to Mr and Mrs Cristea to acquire the Erskine property free of encumbrances: [4].
14 In my opinion, a claim based upon tracing amounts received by Mr and Mrs Calnan into a property held by Mr and Mrs Cristea is not properly characterised as a claim against Mr and Mrs Cristea for a liquidated demand only. The plaintiffs must establish the liability of Mr and Mrs Calnan and a proper basis on which to trace the money to the other defendants. Establishing a factual trail is not enough. The court will be required to determine which of the plaintiffs or the Cristeas, none of whom are alleged to have committed a legal wrong, bears the loss if the plaintiffs establish a claim against Mr and Mrs Calnan and seek to recover by tracing proceeds of that wrong. Recent authority on unjust enrichment makes me doubt that it can be applied in the manner contended in this application as a direct ground for imposing liability on a third party to the dealings between the plaintiffs and the Calnans. It is unnecessary to consider that question further. For present purposes, I am not satisfied that a claim formulated in this manner is a claim for a liquidated demand only.
15 I am not satisfied that the claim against Mr and Mrs Cristea can properly be characterised as coming within O 22 r 2. In my opinion, a judgment entered under that rule would be irregular. It is not necessary to consider the second issue in the application: whether the Registrar was required to enter default judgment as at the date that the document was filed.
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