Murphy Lending Co P/L & Ors v DGM Enterprises (No 2) P/L

[2004] QCA 208

[2004] QCA 208

COURT OF APPEAL

WILLIAMS JA
JERRARD JA
PHILIPPIDES J

Appeal No 1668 of 2004

MURPHY LENDING COMPANY PTY LTD
ACN 086 468 920

First Plaintiff/
First Respondent

and

MICHAEL ALVIN PROBERTS

and

DGM ENTERPRISES (NO 2) PTY LTD
ACN 097 725 758

and

DGM ENTERPRISES (NO 3) PTY LTD
ACN 097 725 785

and

DAVID WALLACE HAYMAN

and

OTTO PAUL WURTH

and

MELANIE-JANE MADDOX

Second Plaintiff/
Second Respondent

First Defendant/
Not a Party to this Appeal

Second Defendant/
Not a Party to this Appeal

Third Defendant/Appellant

Fourth Defendant/
Not a Party to this Appeal

Fifth Defendant/
Not a Party to this Appeal

BRISBANE

..DATE 16/06/2004

JUDGMENT

MR M MARTIN (instructed by Crowther Lawyers) for the appellant

MR P W HACKETT (instructed by Tucker & Cowen Solicitors) for the respondents

WILLIAMS JA:  The respondents sued the appellant and others  in the District Court on a guarantee with respect to an asserted loan by the respondents to two of the defendants in the action supported by guarantees from the three other defendants. 

In the statement of claim it was alleged that the appellant and the others guaranteed repayment of that loan.  In his defence the appellant admitted that he guaranteed the respondents, the plaintiffs in the action, repayment of the sum of $100,000.  Based on that, the respondents sought summary judgment. 

In an affidavit filed by the appellant in response to that application he again admitted that he guaranteed repayment of the loan in question.  In those circumstances the respondents, in their material on the application for summary judgment, included a document entitled 'Deed of Loan', made 18 October 2001. 

In that document, the appellant and others were described as  guarantors.  Clause 7 thereof was in these terms:

"As security for the repayment of the Principal Sum by the Principal in accordance with this deed, the Principal shall cause the Guarantors to personally guarantee in favour of the Mortgagees the performance by the Principal of its obligations pursuant to this deed."

There was no other provision in writing in the material before the Judge hearing the summary judgment application which would constitute a guarantee.  That is understandable because of the admission made in the pleadings. 

Summary judgment was given, the primary Judge concluding that in the circumstances the appellant had not demonstrated that it had any real prospect of successfully defending the claim on the grounds of defence relied on.  From that decision the appellant appealed to this Court on a number of grounds, which in summary assert that the material before the Judge at first instance did provide a basis for successfully defending the claim. 

At the outset of the hearing today, counsel for the appellant for the first time raised the question whether or not there was in law a guarantee given by the appellant which was enforceable at the instance of the respondents.  Counsel for the respondents conceded that something more than paragraph 7 of the deed previously quoted would need to be shown; but he pointed out that the respondents were entitled to rely on the admission and therefore there was no requirement that they place all relevant documentation before the Judge at first instance. 

Counsel for the appellant foreshadowed an application for leave to withdraw the admission with respect to the guarantee, and also an application to amend the grounds of appeal to allege that there was no enforceable guarantee between the parties.  The question arose as to what was the appropriate course to follow in those circumstances.  It was debated as to whether or not the summary judgment should be set aside and the matter remitted to the primary Judge, or whether the matter should remain in this Court for determination. 

Counsel for the respondents strenuously argued that the summary judgment ought not be set aside until a proper basis had been established for doing so, and that would necessitate, first of all, the applicant putting proper material before the Court demonstrating a basis for the Court making an order giving him leave to withdraw the admission. 

Counsel for the respondents also indicated that if, in the light of material placed before the Court, it was obvious there was a deficiency with respect to material supporting the summary judgment, then his clients would consent to the appeal being allowed.  

There are, it is recognised, some difficulties with keeping the matter in this Court and having this Court deal with the application for leave to withdraw the admission, but in the long run it does seem that that is the most appropriate course to be followed. 

The appeal today should be adjourned, the appellant should be directed to file any application seeking leave to withdraw the admission, and leave to amend the grounds of appeal within 14 days.  If such an application is not made within 14 days, or the appeal otherwise disposed of, the respondent should be entitled to have the appeal restored to the list for determination on the material. 

If there is an application seeking leave to withdraw the admission, then that can be heard with the further hearing of the appeal.  There is of course no need for the matter to come back before the Court as presently constituted. 

It is also clear that in the circumstances the respondents should have an order that the appellant pay their costs of today's hearing to be assessed. 

The orders of the Court should therefore be:  Adjourn the hearing of the appeal.  Direct that the appellant file any application for leave to withdraw the admission with respect to the guarantee and for leave to amend grounds of appeal within 14 days.

If no such application is made, the respondent may have the appeal relisted for hearing.  Further order that the appellant pay the respondents' costs of today's hearing to be assessed. 

PHILIPPIDES J:  I agree.

JERRARD JA:  I agree.

WILLIAMS JA:  Well, they are the orders gentlemen, and take it up with the registrar in due course for the future conduct of the matter.

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