Pomitix Pty Ltd v Rees Law - [2017] QSC 44

SUPREME COURT OF QUEENSLAND

CITATION:

Pomitix Pty Ltd v Rees Law [2017] QSC 44

PARTIES:

POMITIX PTY LTD (ACN 008 108 441)

(plaintiff)

v
REES LAW

(defendant)

FILE NO/S:

No BS 4300 of 2015

DIVISION:

Trial Division

PROCEEDING:

Application for summary judgment

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

28 March 2017

DELIVERED AT:

Brisbane

HEARING DATE:

6 February 2017

JUDGE:

Boddice J

ORDER:

The application is dismissed.

The applicant is to pay the respondent’s costs of and incidental to the application, to be agreed, or otherwise on the standard basis.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SUMMARY JUDGMENT – where the plaintiff contracted for the sale of land – where advice pertaining to that contracting and the related matters of mortgage and security interest was provided by the defendant – where the plaintiff contends that the defendant was negligent in providing this advice – where the defendant applies for summary judgement under the UCPR on the grounds that the plaintiff is out of time – where the plaintiff refutes this – where the plaintiff contends the matter constitutes a ‘security case’ – where the defendant contends the matter constitutes a ‘transaction case’ – whether the plaintiff has no reasonable prospects of success

PROCEDURE — SUPREME COURT PROCEDURE — QUEENSLAND — PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS — SUMMARY JUDGMENT — Factual issues requiring exploration as to when limitation period accrued — Legal issues — Summary judgment inappropriate — Uniform Civil Procedure Rules 1999 (Qld) r 293 — Limitation of Actions Act 1974 (Qld) s 10(1)(a)

Limitation of Actions Act 1974 (Qld) s 10(1)a
Uniform Civil Procedure Rules 1999 (Qld) r 293

Commonwealth v Cornwell (2007) 229 CLR 519; [2007] HCA 16, cited
Melisavon Pty Ltd v Springfield Land Development Corporation Pty Ltd (2015) 1 Qd R 476; [2014] QCA 233, considered
Wardley Australia Limited v The State of Western Australia (1992) 175 CLR 514; [1992] HCA 55, cited

COUNSEL:

W Sofronoff QC with BF Charrington for the plaintiff

DG Clothier QC for the defendant

SOLICITORS:

Bennett & Philp for the plaintiff

Barry Nilsson for the defendant

By notice of claim, filed 1 May 2015, the plaintiff claimed damages for loss and damage allegedly occasioned by the defendant’s negligence in representing the plaintiff in a transaction for the sale of real property formerly owned by the plaintiff.
By application, filed 29 July 2016, the defendant seeks summary judgment in its favour in respect of the claim. That application is brought pursuant to Rule 293 of the Uniform Civil Procedure Rules. At issue is whether the plaintiff cannot succeed in its claim due to the provisions of the Limitations of Actions Act 1974 (“the Act”).
Background
The defendant is a firm of solicitors. Prior to September 2006, the defendant was retained by the plaintiff to provide advice in relation to the sale of real property owned by the…

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.

Continue reading Pomitix Pty Ltd v Rees Law

Details

AGLC: Pomitix Pty Ltd v Rees Law [2017] QSC 44
Case: [2017] QSC 44
Decision Date: 28 March 2017

CaseChat Overview and Summary

The case of Pomitix Pty Ltd v Rees Law involves a dispute between the plaintiff, a property developer, and the defendant, a firm of solicitors. The plaintiff alleges that the defendant was negligent in providing advice in relation to the sale of real property, including the risks of vendor finance, the insufficiency of a second mortgage and directors’ guarantees as security, the priority of Westpac, and that a cash offer from another party was a better offer and ought to have been accepted. The plaintiff seeks to recover the difference between the cash offer or, alternatively, the market value of the property at the date of the first contract and the amounts received by it from the buyers under the contract. The defendant has applied for summary judgment on the grounds that the plaintiff is out of time, contending that the claim is statute-barred under the Limitations of Actions Act 1974 (Qld). The plaintiff contends that the matter constitutes a ‘security case’ and, as such, the claim is not statute-barred.

The central legal issue in this case is whether the plaintiff's claim is statute-barred under the Limitations of Actions Act 1974 (Qld). The court must determine whether the plaintiff's claim has no reasonable prospects of success and whether there are any factual issues that require exploration. Specifically, the court must determine when the limitation period accrued and whether the plaintiff's claim falls within the six-year limitation period. The court must also consider whether the plaintiff's claim constitutes a ‘transaction case’ or a ‘security case’ and whether this affects the accrual of the limitation period.

The court found that the plaintiff's claim, while somewhat ambiguous, raises issues that are properly to be determined at trial. The court found that the defendant had not established that the plaintiff's claim has no reasonable prospects of success. The court found that the pleading, in its present form, whilst somewhat ambiguous, raises issues which are properly to be determined at trial. The court found that summary judgment was inappropriate in this case as there were factual issues that required exploration as to when the limitation period accrued. The court found that the defendant had not established that a consideration of the pleading as a whole clearly establishes that the pleaded cause of action could only have accrued at a time more than six years prior to the commencement of the proceeding.

The court dismissed the defendant's application for summary judgment. The court ordered that the applicant is to pay the respondent’s costs of and incidental to the application, to be agreed, or otherwise on the standard basis. The court noted that it would hear the parties as to any other orders and costs.

Orders

Orders of the court

The application is dismissed.

The applicant is to pay the respondent’s costs of and incidental to the application, to be agreed, or otherwise on the standard basis.

Background

Background to the litigation

By application, filed 29 July 2016, the defendant seeks summary judgment in its favour in respect of the claim. That application is brought pursuant to Rule 293 of the Uniform Civil Procedure Rules. At issue is whether the plaintiff cannot succeed in its claim due to the provisions of the Limitations of Actions Act 1974 (“the Act”). Background The defendant is a firm of solicitors. Prior to September 2006, the defendant was retained by the plaintiff to provide advice in relation to the sale of real property owned by the plaintiff. In September 2006, the plaintiff entered into a contract to sell the real property for $2 million. The contract provided for a deposit of $25,000, with the balance to be paid by a payment of $1 million on completion and the balance within 12 months thereafter by way of instalments on the sale of subdivided lots. Security for the purchase price was to be provided by a second mortgage over the property and directors’ guarantees. In or about August 2007, the plaintiff entered into a replacement contract for the sale of the property. That contract was entered into at the request of the directors of the purchaser under the first contract. The replacement contract was with another entity as buyer. The price, deposit and payment upon completion remained the same, as did the required security. On or about 31 January 2008, the plaintiff signed a Deed of Priority with the buyer’s financier, Westpac. A first mortgage was granted to the financier. The plaintiff was given a second mortgage. The plaintiff also received the requisite directors’ guarantees. The date for completion of the replacement contract was set at 14 February 2008. The terms of the contract were met insofar as the deposit and the completion payment were made by the buyers. Further funds were also paid towards the post-completion balance. However, an outstanding balance of $715,000 remained. There was also an entitlement to interest under the contract in respect of that balance. Ultimately, Westpac issued a notice of power of sale on 9 May 2011. The plaintiff demanded payment from the guarantors and subsequently received judgment in its favour. The plaintiff has not, however, been able to recover the outstanding sum. Pleadings The plaintiff alleges that before entering into the first contract it received a cash offer to buy the property for $2.1 million. The plaintiff alleges the defendant negligently failed to advise it as to the risks associated with the vendor finance, including the insufficiency of a second mortgage and directors’ guarantees as security; as to the priority of Westpac and that the cash offer was a better offer and ought to be accepted in the circumstances. The negligence is pleaded to have occurred over varying periods, the last of which ends 21 February 2008. The plaintiff alleges that if it had been given appropriate advice as to those matters it would not have entered into the first contract or the replacement contract and would not have suffered loss. The plaintiff pleads the loss as being the difference between the cash offer or, alternatively, the market value of the property at the date of the first contract and the amounts received by it from the buyers under the contract.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Whilst the loss suffered is framed in a manner more akin to the nature of a loss sustained in a “transaction case”, the allegations of negligence relied upon are reasonably open to an interpretation of the loss being due to the entry into the contract as a lender. On that basis, the loss is quantified by the monies advanced which, in this case, is the value of the property the subject of the vendor finance. That loss is only suffered on the default of the borrower. That date was less than six years prior to the commencement of the proceeding.Conclusions Summary judgment is only to be given where a court is satisfied that the plaintiff’s claim has no reasonable prospects of success and there is no issue requiring a trial. The defendant has not established that a consideration of the pleading as a whole clearly establishes that the pleaded cause of action could only have accrued at a time more than six years prior to the commencement of the proceeding. The defendant has not established that the plaintiff’s claim has no reasonable prospects of success. The pleading, in its present form, whilst somewhat ambiguous, raises issues which are properly to be determined at trial. Orders The application is dismissed. I shall hear the parties as to any other orders and costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Pomitix Pty Ltd v Rees Law [2017] QSC 44
PARTIES:	POMITIX PTY LTD (ACN 008 108 441) (plaintiff) v REES LAW (defendant)
FILE NO/S:	No BS 4300 of 2015
DIVISION:	Trial Division
PROCEEDING:	Application for summary judgment
ORIGINATING COURT:	Supreme Court of Queensland at Brisbane
DELIVERED ON:	28 March 2017
DELIVERED AT:	Brisbane
HEARING DATE:	6 February 2017
JUDGE:	Boddice J
ORDER:	The application is dismissed. The applicant is to pay the respondent’s costs of and incidental to the application, to be agreed, or otherwise on the standard basis.
CATCHWORDS:	PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SUMMARY JUDGMENT – where the plaintiff contracted for the sale of land – where advice pertaining to that contracting and the related matters of mortgage and security interest was provided by the defendant – where the plaintiff contends that the defendant was negligent in providing this advice – where the defendant applies for summary judgement under the UCPR on the grounds that the plaintiff is out of time – where the plaintiff refutes this – where the plaintiff contends the matter constitutes a ‘security case’ – where the defendant contends the matter constitutes a ‘transaction case’ – whether the plaintiff has no reasonable prospects of success PROCEDURE — SUPREME COURT PROCEDURE — QUEENSLAND — PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS — SUMMARY JUDGMENT — Factual issues requiring exploration as to when limitation period accrued — Legal issues — Summary judgment inappropriate — Uniform Civil Procedure Rules 1999 (Qld) r 293 — Limitation of Actions Act 1974 (Qld) s 10(1)(a) Limitation of Actions Act 1974 (Qld) s 10(1)a Uniform Civil Procedure Rules 1999 (Qld) r 293 Commonwealth v Cornwell (2007) 229 CLR 519; [2007] HCA 16, cited Melisavon Pty Ltd v Springfield Land Development Corporation Pty Ltd (2015) 1 Qd R 476; [2014] QCA 233, considered Wardley Australia Limited v The State of Western Australia (1992) 175 CLR 514; [1992] HCA 55, cited
COUNSEL:	W Sofronoff QC with BF Charrington for the plaintiff DG Clothier QC for the defendant
SOLICITORS:	Bennett & Philp for the plaintiff Barry Nilsson for the defendant