SUPREME COURT OF QUEENSLAND
CITATION:
QNI Resources Pty Ltd & Ors v Park & Ors [2016] QSC 222
PARTIES:
QNI RESOURCES PTY LTD
(first applicant)
QNI METALS PTY LTD
(second applicant)
QUEENSLAND NICKEL SALES PTY LTD
(third applicant)
v
JOHN PARK
(first respondent)
STEFAN DOPKING
(second respondent)
KELLY-ANNE TRENFIELD
(third respondent)
QUENTIN OLDE
(fourth respondent)
QUEENSLAND NICKEL PTY LTD (IN LIQUIDATION)
(fifth respondent)
FILE NO/S:
SC No 3849 of 2016
DIVISION:
Trial Division
PROCEEDING:
Application for leave to proceed
DELIVERED ON:
29 September 2016
DELIVERED AT:
Brisbane
HEARING DATE:
4 August 2016 and 24 August 2016
JUDGE:
Bond J
ORDER:
The order of the Court is that the application is dismissed.
CATCHWORDS:
CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – PROCEEDINGS BY OR AGAINST THE COMPANY – LEAVE TO PROCEED – GENERALLY – where the applicants are two joint venturers and the current manager of the joint venture – where the fifth respondent (“Queensland Nickel”) is the former manager of the joint venture and a company in liquidation – where the applicants advance contractual and equitable claims against Queensland Nickel which rely on an unconditioned obligation to return joint venture property – where an essential aspect of the applicants’ pleaded case is the negation of Queensland Nickel’s entitlement to an indemnity that may confer proprietary or beneficial rights in the joint venture property – whether the applicants’ pleaded case establishes a serious question to be tried in respect of the claims advanced
EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – INDEMNITY, LIEN AND REIMBURSEMENT – RELEVANT PRINCIPLES – where the applicants assert that Queensland Nickel held joint venture property as “bare trustee” for the joint venturers – nature of the trustee’s right to indemnity in respect of liabilities incurred in the execution of the trust
EQUITY – EQUITABLE REMEDIES – GENERALLY – whether an equitable lien will arise, even where assets are not held on trust, where the equity of the case demands it
EQUITY – EQUITABLE REMEDIES – ACCOUNTS AND INQUIRIES – GENERALLY – where the applicants assert a claim for an account – where the applicants must do more than demonstrate that they might be owed some money – where taking of account is not appropriate unless the applicants establish that there is, or likely to be, a surplus after the satisfaction of the obligation – where relevant consideration is whether applicants have entered into any agreement, or have disclosed any capacity to repay any deficiency which might arise on the taking of the account – whether the applicants’ pleaded case makes out a serious question to be tried as to the entitlement of an order for an account
EQUITY – GENERAL PRINCIPLES – RULES AND MAXIMS OF EQUITY – WHOEVER SEEKS EQUITY MUST DO EQUITY – where the applicants seek the aid of a court in equity to enforce a claim – where applicants must do justice as to the matters in respect of which the assistance…
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- Case
- [2016] QSC 222
- Decision Date
CaseChat Overview and Summary
The court considered whether the applicants' pleaded case established a serious question to be tried in respect of the claims advanced. The court also considered whether the applicants' pleaded case made out a serious question to be tried as to the entitlement of an order for an account. The court found that the applicants had not established a serious question to be tried in respect of the claims advanced. The court found that the applicants had not demonstrated that they were owed money and that there was, or likely to be, a surplus after the satisfaction of the obligation. The court also found that the applicants had not established that an equitable lien would arise, even where assets are not held on trust, where the equity of the case demanded it.
The court dismissed the application for leave to commence proceedings against the respondent. The court found that the applicants' pleaded case did not establish a serious question to be tried in respect of the claims advanced, and that the applicants had not demonstrated that they were owed money and that there was, or likely to be, a surplus after the satisfaction of the obligation. The court also found that the applicants had not established that an equitable lien would arise, even where assets are not held on trust, where the equity of the case demanded it. The court dismissed the application for leave to commence proceedings against the respondent.
The court ordered that the application be dismissed.
Orders
Orders of the court
The order of the Court is that the application is dismissed.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Queensland Nickel as General Manager was in charge of and responsible for (amongst other things, emphasis added):(a)the overall management, operation and administration of the Joint Venture: cl 5.2(a)(i);(b)managing the funds of the Joint Venture: cl 5.2(a)(ii);(c)maintaining the accounting records of the Joint Venture: cl 5.2(a)(iii); (d)preparing and maintaining complete books and accounting records describing each Joint Venturer’s financial involvement in the Joint Venture: cll 5.2(a)(iii) and 5.2(b)(xvii); (e)the management and control of the Joint Venture Property (a term which was defined, to which I will shortly turn) and all operations under the Joint Venture Agreement as agent for and for the account of the Joint Venturers: cl 5.2(a)(vii); and(f)the doing of all other acts and things as may be necessary or advisable for efficient and economic operation of the Joint Venture: cl 5.2(b)(xxiv). As to the Joint Venture Property (the management and control of which was the responsibility of Queensland Nickel as just recorded):(a)Clause 3.1 of the Joint Venture Agreement recorded the agreement of the Joint Venturers (and Queensland Nickel) that (emphasis added)-All the Joint Venture Property shall at all times be made available for the purpose and duration of the Joint Venture and during such duration shall not be used for any other purpose. …(b)“Joint Venture Property” was a term widely defined to cover –(i) relevant real property and mining titles;(ii) relevant technology and know-how;(iii) “all other rights, titles, interests, claims and benefits held or acquired from time to time, directly or indirectly, for the purposes of the Joint Venture”; and (iv) “all other property of whatsoever kind and wheresoever situate (including, without limitation, transportation, port and other service facilities, raw materials, work in process, stores, insurance proceeds, choses in action and rights and benefits conferred by or pursuant to any agreement hereafter entered into at any time for the purposes of the Joint Venture) from time to time hereafter held, constructed or acquired for the purposes of the Joint Venture”.(c)I interpolate that, amongst other things, the term Joint Venture Property would necessarily encompass:(i) the products produced by the nickel refinery;(ii) monies received or receivable from the sale or other exploitation of those products;(iii) the benefit of the various contracts, leases and licences which a working nickel refinery would generate; and(iv) real and personal property held or used for Joint Venture purposes.(d)All the “Joint Venture Property” was beneficially owned by the two Joint Venturers as tenants in common in proportion to their participating interest in the joint venture and all liabilities of the Joint Venture were to be severally borne by the two Joint Venturers in that proportion: cl 3.1. (e)Notwithstanding the statement concerning beneficial ownership of Joint Venture Property, the Joint Venture Agreement expressly contemplated that (with the exception of real property and mining titles) legal title to any Joint Venture Property could, for purposes of convenience and at the request of the Joint Venturers, be held solely in the name of Queensland Nickel: cl 3.2. If that occurred, the Joint Venture Property would be held “for the use and benefit of the Joint Venturers in proportion to their Participating Interests”. Thus the possibility that Queensland Nickel might hold Joint Venture Property on trust was obviously contemplated.(f)The Joint Venture Agreement imposed restrictions on the ability of the Joint Venturers and a Joint Venture Owners Committee (“the JVOC”, as to which see [15] below) to create “Encumbrances” over Joint Venture Property, but in terms which contemplated that “Permitted Encumbrances” might be created. Thus:(i) “Encumbrance” was defined in cl 1.1 to mean mortgage, hypothecation, pledge lien or charge or anything analogous to any of those things;(ii) “Permitted Encumbrance” was defined in cl 1.1 to include various liens arising in the ordinary course of business, including –Aany mechanics’ workmen’s or other like lien arising in the ordinary course of business securing obligations which are not yet overdue or which are being contested or litigated in good faith; andBany Encumbrance in respect of deposits of money or property by way of security for the performance of any contractual or statutory obligations arising in the ordinary course of business other than obligations for borrowed moneys or the deferred purchase price of goods or services;(iii) other than a Permitted Encumbrance, the creation of any Encumbrance over all or any part of the Joint Venture Property was regarded as a decision required to be made by the approval of each Joint Venturer: cl 4.10; and(iv) without the prior consent of the other Joint Venturer, no Joint Venturer could create or suffer to subsist any Encumbrance of its interest except a Permitted Encumbrance.(g)Queensland Nickel was constrained (except for liens arising in the normal and ordinary course of business) against creating any mortgage, pledge, charge, encumbrance, lien over, or trust in respect of Joint Venture Property or any of it: cl 5.5(i).