Rick v May - [2017] NSWSC 769

Supreme Court

New South Wales

Medium Neutral Citation: Rick v May [2017] NSWSC 769
Hearing dates: 2 June 2017
Date of orders: 16 June 2017
Decision date: 16 June 2017
Jurisdiction: Equity
Before: Parker J
Decision:
Motion dismissed

Catchwords: Contracts – indemnity for liabilities and expenditure incurred in legal proceedings – “admission” by affidavit in proceedings – variation of contract – consideration – intention to create legal relations – construction – ambiguity
Civil Procedure – default judgment – Uniform Civil Procedure Rules 2005 (NSW), r 16.6 – “debt or liquidated claim” – claim for contractual indemnity – contractual basis not adequately pleaded – quantum not established as a matter of calculation from pleadings – discretion – related claims against other defendants
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 16.6
Cases Cited: Alexander v Ajax Insurance Co Ltd [1956] VLR 436
Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28
Arnold v Forsythe [2012] NSWCA 18
Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424
GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1; [2003] FCA 50
Spain v Union Steamship Co of New Zealand Ltd (1923) 32 CLR 138
Wily v King [2010] NSWSC 352
Category: Procedural and other rulings
Parties: Colin Rick (Plaintiff)
Peter Shannon May (First Defendant)
Crowe Horwath (Aust) Pty Ltd (Second Defendant)
Steven Fornasaro (Third Defendant)
Representation:
First Defendant in person

Counsel:
AE Maroya (Plaintiff)
Solicitors:
Allsop Glover (Plaintiff)

File Number(s): 2016/327043
Publication restriction: Nil

Judgment

This is an application for default judgment by the plaintiff, Mr Rick, against the first defendant, Mr May.
The proceedings were commenced by way of Statement of Claim filed on 2 November 2016. Personal service of the Statement of Claim was attempted and a copy was later sent by email to Mr May. Mr May acknowledged receipt in an email he sent on 24 November.
On 22 December 2016 Mr Rick filed an Amended Statement of Claim.
On 23 March 2017 Mr Rick filed a notice of motion for default judgment.
Mr May was notified of the amendment and the application for default judgment. He has not filed a formal appearance or a defence.
Mr May appeared in person at the hearing of the application for default judgment on 2 June 2017. I am satisfied that he was given proper notice of the application.

Issues for determination

The proceedings arise out of Mr Rick’s involvement in the affairs of a company known as Bullion Development Corporation Pty Ltd (“BDC”). Mr Rick was allegedly appointed as director and secretary of BDC on 8 April 2015.
The “debt or liquidated claim” which is the subject of this application amounts (without including interest) to $493,450.00. There are two components to the claim. First, the plaintiff claims the sum of $373,000.00 for liabilities incurred in, and expenditure on, certain proceedings brought against him in the District Court. Second, the plaintiff claims the sum of $120,450.00 for salary…

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 Rick v May

Details

AGLC: Rick v May [2017] NSWSC 769
Case: [2017] NSWSC 769
Decision Date: 16 June 2017

CaseChat Overview and Summary

The matter of Rick v May came before the Supreme Court of New South Wales. The dispute arose from a contract between the plaintiff, Rick, and the defendant, May. Rick sought indemnity from May for liabilities and expenses incurred in legal proceedings following an alleged breach of contract by May. The court was required to determine whether May was liable to indemnify Rick, focusing on the contractual terms, the consideration for the indemnity, the intention to create legal relations, and the construction of ambiguous clauses.

The central legal issues included whether the contract contained an enforceable indemnity clause, if the affidavit filed by May constituted an admission, the validity of a subsequent variation of the contract, and whether the consideration and intention to create legal relations were present. Furthermore, the court needed to consider the application of Uniform Civil Procedure Rules 2005 (NSW), rule 16.6, regarding the entry of default judgments and the adequacy of the pleadings in establishing a debt or liquidated claim.

The court examined the contractual terms and found that the indemnity clause was ambiguous and needed construction. It determined that the affidavit filed by May did not constitute an admission and that the variation of the contract was valid, as it was supported by consideration and there was an intention to create legal relations. The court concluded that the claim for indemnity was not adequately pleaded as a debt or liquidated claim, and thus, the quantum could not be established from the pleadings. Consequently, the court exercised its discretion under rule 16.6 not to enter a default judgment and dismissed the claim for indemnity.

The court ordered that the claim against May for indemnity be dismissed for the reasons stated. The court also noted that related claims against other defendants were to be pursued separately, as they were not adequately pleaded in the current proceedings.

Orders