Michael Van Thanh Quach Appellant v Suncoast Cafes Pty Ltd Respondent

[2024] QCA 143

[2024] QCA 143

COURT OF APPEAL

BOND JA
DALTON JA
BODDICE JA

Appeal No 5300 of 2024
SC No 3768 of 2024

MICHAEL VAN THANH QUACH  Appellant

v

SUNCOAST CAFES PTY LTD  Respondent

BRISBANE

WEDNESDAY, 7 AUGUST 2024

JUDGMENT

BOND JA:  The appellant commenced a proceeding in the trial division by originating application.

When the matter came on before the primary judge in the applications list and the respondent objected to the matter proceeding on the basis that, because there were substantial disputes of fact, the proceeding should have been commenced by claim and pleadings were required, the primary judge agreed with the respondent and made appropriate orders requiring the proceeding to continue as if commenced by claim.

The appellant now appeals on the sole ground that “[t]here was no application before her Honour for the orders.”  That argument has no merit.  For the following reasons, the appeal should be dismissed, with costs.

In the proceeding below, the appellant complains that, on 5 May 2023, he and the respondent entered into a contract pursuant to which the appellant agreed to purchase certain assets owed by the respondent.  He contends that the contract was recorded in a document entitled “Special Conditions for the Purchase of business”.  Amongst other things, that document provided for:

(a)“Exchange of contracts by 31 May 2023, with 30 days of due diligence and payment of $85,000 by 1 July 2023”; and

(b)“Settlement on or before 1 November 2023, with option to extend to 30 November 2023 (without penalty) if required.”

The total purchase price recorded in the document was $1,700,000.  The appellant deposed to having paid a deposit in the amount of $85,000 on 28 June 2023 and complains that the respondent has neither taken the assets the subject of the contract off the market, nor completed the sale of the assets in the timeframe required.

For its part, the respondent disputed that it was bound by the document of 5 May 2023.  The respondent’s solicitor’s email of 6 September 2023 explained the respondent’s position:

“My client is not bound by the terms of the document signed on 5 May. Quite simply, that document is not binding.

That document fails to deal with critical issues surrounding the business transfer (such as, inter alia, GST and the assignment of the lease).

That document was never intended to be binding on the parties and was executed with a view to formal and more comprehensive contracts being entered into. It was an "intent to purchase " document at best and no court will consider it binding as it fails to address many critical commercial points, such as those listed above. Does your client really wish to buy the business from my client without the benefit of the premises leases?

What is your client hoping to achieve by insisting that this document of 5 May is to be binding on the parties?

My client, the agent and myself are all perplexed by your client's position . My client remains willing to sell the business to your client under the terms of the Contract that we submitted to your client (that we are referring to as the "REIQ Contract").

My client has instructed that if the REIQ Contract is not executed today, my client will market the business for sale to other parties as my client is legally entitled to do given that your client has refused to enter into contract with my client.”

Later communications from the respondent sought to reach some form of agreement as to the sale, without making any admission that the existing document was binding.  Ultimately, by letter dated 4 December 2023, the respondent’s solicitor contended that the appellant’s dealings with their client were inconsistent with any contractual promises which might have been binding, contended that the appellant was “now in breach of any contract alleged to be in existence”, and advised that the respondent elected “to terminate any contract which remains in existence”.

It was obvious that there were substantial disputed questions of fact between the appellant and the respondent affecting whether the appellant could vindicate any contention that he should be entitled to enforce the contract which he contended was in existence.

That was significant because:

(a) UCPR r 11 provides:

“A proceeding may be started by application if—

(a)the only or main issue in the proceeding is an issue of law and a substantial dispute of fact is unlikely; or

(b)there is no opposing party to the proceeding or it is not intended to serve any person with the originating process; or

(c)there is insufficient time to prepare a claim because of the urgent nature of the relief sought.”

(b) UCPR r 14 provides:

“(1)This rule applies if the court considers a proceeding started by application should have been started by claim or may more conveniently continue as if started by claim.

(2)         The court may—

(a)order that the proceeding continue as if started by claim; and

(b)give the directions the court considers appropriate for the conduct of the proceeding; and

(c)if the court considers it appropriate—order that any affidavits filed in the proceeding be treated as pleadings, alone or supplemented by particulars; and

(d)      make any other order the court considers appropriate.”

The appellant, who acts for himself, determined to commence a proceeding by originating application, which he filed in the Supreme Court of Queensland on 25 March 2024, returnable on 10 April 2024.  By his originating application, the appellant sought the following orders:

“1.Order advertisements to be taken off the market for any assets of Suncoast Cafes Pty Ltd trustee for Arnold Thoms Family Trust.

2.If required, Order the annulment of any sale or contract(s) of sale, since 5 May 2023. of any assets of Suncoast Cafes Pty Ltd trustee for Arnold Thoms Family Trust to any other party(ies).

3.Order the defendant to complete the contract of sale, signed and dated 5 May 2023. allowing preparation for settlement and transfer of ownership of ‘all assets of Suncoast Cafes Pty Ltd trustee for Arnold Thoms Family Trust.’

4.Pursuant to the principle of restitutio in integum (sic) the Plaintiff claims compensatory damages, to be calculated by Court.

5.The respondent pay the applicant’s costs of the application.”

The appellant also issued a subpoena directed to the respondent’s accountant, requiring production on 10 April 2024 of various documents relevant to the identification of the respondent’s assets and various financial documents relevant to the respondent and its business earnings.

By email sent to the appellant on 5 April 2024, the respondent’s solicitors explained to the appellant their reasons for contending that the proceedings should have been commenced by claim, indicated that they would object to the appellant’s affidavit exhibiting privileged communications, and advised they had instructions to oppose any reliance on the subpoena to the respondent’s accountants, including by applying to strike it out.  The letter advised that the respondent had entered into a contract of sale with another party and that if the appellant sought injunctive relief, the respondent would require an undertaking as to damages.

The proceeding came before the presiding judge in the applications list.  The appellant’s written submissions contended, wrongly, that both parties agreed that the 5 May 2023 document was binding, and then suggested that the court was at liberty to grant the first three orders sought in the originating application “in the interim”.  The appellant had neither formulated an application for interlocutory orders nor offered the usual undertaking as to damages.

The respondent opposed the application when it came on before the primary judge.  Its written submissions contended that there was a substantial dispute of fact and contended, accordingly, that the proceeding should not have been commenced by originating application, and developed its argument that pleadings were required.  As had been flagged, the respondent also sought to have the subpoena to the respondent’s accountants set aside on the grounds that it was oppressive and that if the appellants sought documents from a non-party, that should occur by way of non-party disclosure in an orthodox way.  The respondent submitted that the court should order:

“(a)the proceeding is to continue as if by commenced by claim;

(b)the Applicant file a statement of claim in support of the relief sought in originating application within 28 days;

(c)the subpoena is set aside; and

(d)the Applicant pay the Respondent’s costs of this application.”

After reading the material and hearing oral arguments from both sides, the primary judge formed the view that the matter should continue as if it had been commenced by a claim and the applicant should file a statement of claim in support of the relief sought in the originating application.  Her Honour ordered:

“1.Pursuant to rule 14(2)(a) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR), the proceeding is to continue as if commenced by claim.

2.Pursuant to rule 14(2)(b) of the UCPR, the Applicant must file a statement of claim in the proceeding within 28 days of the date of this order.

3.Pursuant to rule 416 of the UCPR, the subpoena to produce documents filed on 27 March 2024 issued to Louise Ann McNeich is set aside.

4.The Applicant pay the Respondent's costs of this application.”

As already mentioned, the sole ground of appeal was that those orders should be set aside on the ground that “there was no application before her Honour for the orders”.

There is no merit in that contention on either of two views of the UCPR.

First, the appellant commenced a proceeding and caused it to be brought on for consideration before the primary judge on 10 April 2024. The respondent opposed the matter proceeding on that day, in the manner in which I have explained. When dealing with the appellant’s application, UCPR r 14 empowered the primary judge to make orders of a nature referred to in r 14(2), in the event that the primary judge formed the opinion referred to in r 14(1). That plainly occurred. There is no challenge to the manner by which the primary judge proceeded to form that opinion. Having formed that opinion, the primary judge had jurisdiction to make orders of the nature of those referred to in r 14(2), without the need for an application in writing by the respondent. There is no challenge to the exercise of discretion reflected in the orders made by the primary judge.

In oral submissions before this court, the appellant submitted that that was contrary to his experience in at least two previous cases involving Justice Brown and Justice Burns. That submission does not persuade me to the contrary of the proper construction of r 14 that I have just explained.

The second view of the UCPR confronting the appellant is that even if, on its proper construction, r 14(2) should be taken to contemplate a written application by the respondent, UCPR r 32 contemplates that the court may entertain an oral application by a party in a proceeding for an order the court may make on a written application of a party to a proceeding. Entertaining such an application would thereby empower the primary judge to make orders of the nature referred to in UCPR r 14(2) or pursuant to UCPR r 658, "to make any order, including a judgment, that the nature of the case requires.”

At the hearing, the respondent applied for the orders it obtained.  On that basis, the only complaint that the appellant could have would be if proceeding in that way treated him in a procedurally unfair way.  But that is not his complaint before this court, nor could it be, in light of the fact that the respondent had flagged its position by email on 5 April 2024, the matter was not argued until 10 April 2024, and, having heard the respondent’s oral argument, the appellant told the primary judge that he “came ready to meet the submission that [counsel for the respondents] made.”

During the course of oral argument before this court, the respondent advanced an argument, not raised in his grounds of appeal, that there were no reasons given by the primary judge for the orders that she made.  I reject that submission.  It is obvious, from the reasons of the primary judge, that she considered the question whether there was any substantial dispute of fact and formed the view that she was not persuaded that there was no substantial dispute of fact.  She also plainly formed the view that the urgency of the matter was something that would not preclude this matter being started by claim, and she plainly expressed the view, on page 5 of the transcript:

“So, in my view, this matter should be – the proceeding is to continue as commenced by a claim, and the applicant should file a statement of claim in support of the relief sought in originating application within 28 days.”

The submission that there was an error of law based on an inadequacy of reasons is rejected.

There is no merit in the sole ground of appeal raised.  There is no merit in the argument raised orally for the first time with which I have just dealt.  I would order the appeal be dismissed, with costs.

DALTON JA:  I agree.

BODDICE JA:  I agree.

BOND JA:  The order of the court is that the appeal is dismissed, with costs.