Meyfield Developments Pty Ltd v Altus Development Pty Ltd (No. 2) - [2018] VSC 25

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2016 02366

MEYFIELD DEVELOPMENTS PTY LTD (ACN 168 772 656)	Plaintiff
v
ALTUS DEVELOPMENT PTY LTD (ACN 163 362 990) AND ORS (according to the attached Schedule)	Defendants

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JUDGE:	Kennedy J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 February 2018
DATE OF RULING:	8 February 2018
CASE MAY BE CITED AS:	Meyfield Developments Pty Ltd v Altus Development Pty Ltd (No. 2)
MEDIUM NEUTRAL CITATION:	[2018] VSC 25

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LEGAL PRACTITIONERS — Solicitors —Application to restrain solicitor from acting where solicitor allegedly exposed to suit — Application refused where suit hypothetical and conduct unlikely to come under attack in this proceeding — Relief also refused having regard to the timing of the application.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Mitchell	Mills Oakley
For the Defendants	Mr A Herskope	Kalus Kenny Intelex

HER HONOUR:

The plaintiff applicant seeks an order that Kalus Kenny Intelex (KKI) be restrained from acting in this proceeding for the defendants.

Nature of Dispute

The proceeding was first issued in June 2016. It has had an unfortunate protracted history by reason of the making of various amendments to the pleadings, as well as other interlocutory disputes. More recently, this has included a contempt summons issued by the defendants on 16 November 2017 (which has been referred to Judicial Registrar Clayton for reference to a common law judge).

In its Statement of Claim, the plaintiff, Meyfield Developments Pty Ltd (Meyfield), claims amounts due under a services agreement by which Meyfield agreed to provide project development services in respect of land at 256-266 City Road, Southbank. Pursuant to the agreement, the first defendant, Altus Development Pty Ltd (Altus), agreed to pay a services fee of $900,000 within three days after Altus or an associate entered into a contract to purchase the land, as well as a completion fee of $8,100,000 upon settlement of the purchase of the land.

In circumstances where a relevant contract of sale was entered into and settled, the plaintiff claims that the amounts owing have not been paid and seeks an amount of $9,000,000 as a debt, or alternatively, damages. The claim is made against Altus as the primary debtor, and the second and third defendants as guarantors (Mr Anthony Gilbert and Mr Kwong Yip, respectively).

In their Fourth Further Amended Defence, the defendants raise a number of defences:

· that, by reason of defects in execution, the plaintiff is not a party to the agreement as alleged;

· that the services agreement was part of a scheme entered into to give effect to an unlawful purpose of avoiding relevant stamp duty;

· that the services agreement was procured by fraud, which was constituted by multiple representations allegedly made by a Mr Anthony Ferraro, as agent of the plaintiff; and

· that there was a total failure of consideration.

One of the representations pleaded is that Mr Ferraro allegedly said that…

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: [2018] VSC 25
Decision Date: 8 February 2018

CaseChat Overview and Summary

Meyfield Developments Pty Ltd sought to restrain Altus Development Pty Ltd's solicitor from acting in a pending matter. The applicant alleged that the solicitor was exposed to a suit due to potential professional negligence. The case was heard in the Supreme Court of New South Wales. The central legal issues were whether the alleged exposure to a suit was real and whether the relief sought was appropriate given the circumstances.

The court examined whether the suit against the solicitor was more than hypothetical and if it was likely to come under attack in the pending proceedings. The applicant argued that the solicitor had been involved in actions that could lead to a negligence claim. However, the court found that the suit was speculative and the conduct was unlikely to be challenged in the current proceedings. The timing of the application was also a significant factor, with the court considering it inappropriate given the stage of the proceedings. Consequently, the court refused the application for relief.

The court held that the application was premature and speculative. The court found that the suit against the solicitor was not real and therefore, the application was not justified. The timing of the application, coming after the proceedings were well underway, further supported the decision to refuse relief. The court concluded that the application was not appropriate under the circumstances presented.

Orders