Smits v Cugola - [2021] QSC 164

SUPREME COURT OF QUEENSLAND

CITATION:

Smits v Cugola & Ors [2021] QSC 164

PARTIES:

LEONARDUS GERARDUS SMITS

(Plaintiff)

v
DAVID WILLIAM CUGOLA

(First Defendant)

AND

SUZANNE MARGARET CUGOLA

(Second Defendant)

AND

ANDRE WERNER DE WIT

(Third Defendant)

AND

KAREN JOHANNA ELIZABETH DE WIT
(Fourth Defendant)

FILE NO/S:

BS 9469 of 2020

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED EX TEMPORE ON:

Orders made and reasons delivered on 10 June 2021

DELIVERED AT:

Brisbane

HEARING DATE:

10 June 2021

JUDGE:

Jackson J

ORDER:

The order of the court is that:

1.   The plaintiff’s applications filed on 21 January 2021 and 7 May 2021 are dismissed.

2.   The plaintiff’s claim against the second defendant is dismissed.

3.   The plaintiff’s claim against the third and fourth defendants is dismissed.

4.   The following parts of the plaintiff’s claim against the first defendant are dismissed:

a.   The claim to stand in place of the Bank of Queensland Limited or to be subrogated to the rights of the Bank of Queensland Limited against the first defendant;

b.   The claim for contribution as a co-surety by the plaintiff against the first defendant; and

c.   The claims in paragraph 6 of the amended claim.

5.   Caveat 720427532 be removed.

6.   Leave is granted to the third and fourth defendants to bring an application to remove caveat 720427533.

7.   Caveat 720427533 be removed.

8.   The parties make written submissions as to costs in no more than five pages on or before 16 June 2021.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – GENERALLY – where the plaintiff and the first and third defendants orally arranged to purchase land in Yeppoon in 2007 – where Blue Chip Properties (Queensland) Pty Ltd (“BCP”) agreed to purchase the land and to borrow $7.24 million from the Bank of Queensland Limited (“BOQ”) under loan facilities secured by first mortgage over the land – where the plaintiff guaranteed payment of $3 million advanced under the loan facilities and lodged a $3 million deposit with BOQ – where each defendant guaranteed payment of the full principal amount of $7.24 million – where BCP borrowed $600,000 from the plaintiff under a loan facility agreement secured by second mortgage over the land – where the first and third defendants guaranteed the loan facility agreement - where BCP defaulted in 2008 in repayment of the BOQ loan facilities and in October 2008 BOQ appropriated the plaintiff’s $3 million deposit under his guarantee and subsequently appointed receivers and managers to BCP’s assets – where there was a settlement between the plaintiff and the third and fourth defendants in February 2012 – where the plaintiff purchased the land from BOQ selling as mortgagee – where there were settlements between BOQ and the plaintiff, between BOQ and the first and second defendants, and between BOQ and the third and fourth defendants between 2012 and 2014 – whether, on the plaintiff’s applications for summary judgment, the defendants have a real prospect of succeeding on their defences – whether, on the defendants’ applications for summary judgment, the plaintiff has a real prospect of succeeding on his claim

GUARANTEE AND INDEMNITY – RIGHTS OF SURETY – AGAINST CO-SURETIES – CONTRIBUTION – GENERAL PRINCIPLES – where the plaintiff was a co-surety with each of the defendants for BCP’s debt to BOQ under the loan facilities – whether the plaintiff is entitled to contribution from the defendants in respect of the $3 million paid under his guarantee to BOQ – whether the claim to contribution is limited to the excess paid over one-fifth of the amount for which all co-sureties have a co-ordinate liability, being $3 million – whether the deed dated February 2012, by which, inter alia, the plaintiff released the third and fourth defendants from all claims as defined, was operative

GUARANTEE AND INDEMNITY – RIGHTS OF SURETY – AGAINST CREDITOR – RIGHTS OF SUBROGATION – where the plaintiff purchased the land from BOQ selling as mortgagee and was released from further liability to BOQ in late 2012 and early 2013 – whether the plaintiff is entitled to stand in the place of BOQ under s 4(2) of the Mercantile Act 1867 (Qld) or by subrogation in equity for its rights at law as creditor against the defendants – whether the entitlement of a surety to stand in the place of the creditor against another surety, either under s 4(2) or in equity, is given to a surety where the full amount of the debt is paid, rather than part of the debt – whether the plaintiff’s claim is subject to the same defences that would operate upon a claim brought by BOQ as creditor against the defendants as sureties

LIMITATION OF ACTIONS – LIMITATION OF PARTICULAR ACTIONS – SPECIALTY DEBTS AND DEBTS ON STATUTES – where the guarantees given by the defendants to BOQ were executed under seal – where the guarantees provide that, “if we ask, you must pay us any amount which the debtor does not pay us when it is due” – whether the limitation period which applies in respect of the plaintiff’s claims in equity or under statute to stand in the place of BOQ is that which would apply to a claim brought by BOQ on the subrogated rights, being 12 years under s 10(3) of the Limitation of Actions Act 1974 (Qld) – whether BOQ asked for payment from the defendants before 1 September 2008

LIMITATION OF ACTIONS – LIMITATION OF PARTICULAR ACTIONS – SIMPLE CONTRACTS, QUASI-CONTRACTS AND TORTS – GENERALLY – where the guarantees given by the first and third defendants under the plaintiff’s loan facility agreement were by a contract not under seal and the relevant limitation period is 6 years under s 10(1)(a) of the Limitation of Actions Act 1974 (Qld) – where the loan facility agreement made the guarantor liable to pay the outstanding amount on demand – where the plaintiff alleges that he demanded payment from the first defendant in October 2008 but does not allege the date of demand for the third defendant – whether the plaintiff demanded payment before 1 September 2014 – whether the loan facility agreement was varied by the alleged deed of variation dated 22 October 2008, giving rise to a cause of action upon a speciality with a 12 year limitation period under s 10(3) of the Limitation of Actions Act 1974 (Qld)

LIMITATION OF ACTIONS – LIMITATION OF PARTICULAR ACTIONS – OTHER CASES AND MATTERS – where BOQ appropriated the plaintiff’s $3 million deposit on 16 October 2008 – where the relevant limitation period for a claim to contribution at law is 6 years under s 10(1)(a) of the Limitation of Actions Act 1974 (Qld) – whether there is a limitation period which applies by analogy to a claim for equitable contribution made by a surety against a co-surety

EQUITY – GENERAL PRINCIPLES – FIDUCIARY OBLIGATIONS – ASCERTAINMENT OF RELATIONSHIP – where the plaintiff alleges that the first defendant acted as a fiduciary agent for the plaintiff and second defendant and that the third defendant acted as a fiduciary agent for the plaintiff and the fourth defendant – where no material fact is alleged in the pleading and no admissible evidence supports the allegations of agency – whether there was a relationship of agency or an ad hoc or novel fiduciary relationship between the first defendant and the plaintiff and second defendant and between the third defendant and the plaintiff and fourth defendant

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – where the plaintiff alleges that each defendant owed to the plaintiff “duties of cooperation and…good faith” – where the alleged relationship between each defendant and the plaintiff is that of co-surety for BCP’s debt to BOQ and as guarantor for BCP’s debt to the plaintiff – whether there is a contractual duty of good faith owed by each defendant to the plaintiff, either as an express or implied term of contract

REAL PROPERTY – TORRENS TITLE – CAVEATS AGAINST DEALINGS – REMOVAL – PARTICULAR CASES – where the plaintiff lodged caveats over the first and second defendants’ home and against the third and fourth defendants’ home – where the first and second defendants apply for an order that the caveat over their home be removed – whether leave should be granted for the third and fourth defendants to apply for an order to remove the caveat over their home – whether the plaintiff as caveator satisfied the court that there is a serious question to be tried and the balance of convenience favours the retention of the caveats – whether the court can order amendment of the caveats – whether the caveat against the third and fourth defendants’ home lapsed because the proceeding against them was not started until 19 February 2021

Civil Proceedings Act 2011 (Qld), s 7

Land Title Act 1994 (Qld), s 60(1), s 62, s 122, s 126, s 127
Limitation Act 1960 (Qld), s 9(7)
Limitation of Actions Act 1974 (Qld), s 10(1)(a), s 10(3), s 10(6)(b), s 26, s 35(3)
Mercantile Act 1867 (Qld), s 4
Mercantile Law Amendment Act 1856 (19 & 20 Vic c 97), s 5
Property Law Act 1974 (Qld), s 84, s 88, s 199
Statute of Frauds and Limitations 1867 (Qld), s 16
Uniform Civil Procedure Rules 1999 (Qld), r 149(1)(b), r 292, r 293, r 376

Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd [2019] 1 Qd R 392, applied
Austin & Anor v Royal & Ors (1999) 47 NSWLR 27, considered
Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279, cited
Barber v De Prima (2018) 216 ACSR 253, applied
Belan v Casey (2003) 57 NSWLR 670, applied
Bird v Perpetual Executors & Trustees Association of Australia Ltd (1946) 73 CLR 140, applied
Bofinger v Kingsway Group Ltd (2009) 239 CLR 269, applied
Brisbane City Council v Amos (2019) 266 CLR 593, applied
Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491, cited
Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, applied
Coldham-Fussell v Commissioner of Taxation (2011) 82 ASCR 439, cited
Craythorne v Swineburn (1807) 14 Ves 160, cited
D & J Fowler (Australia) Ltd & Anor v Bank of New South Wales & Ors [1982] 2 NSWLR 879, cited
Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184, cited
Duncan, Fox & Co v North and South Wales Bank (1880) 6 AC 1, cited
Garcia v National Australia Bank Ltd (1998) 194 CLR 395, applied
General Steel Industries Inc v Commissioner for Railways (NSW) & Ors (1964) 112 CLR 125, cited
Knight v Hughes (1828) 3 C & P 467; 172 ER 504, cited
Manufacturers Mutual Insurance Ltd v GIO (1993) Aust Contract R 90-023, cited
Maxal Nominees Pty Ltd v Dalgety Ltd [1985] 1 Qd R 51, cited
Olson v Keefe [2019] FCA 339, cited
Qualify Me Pty Ltd v Get Qualified Australia Pty Ltd [2016] FCA 192, cited
Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150, considered
Sanctuary Lakes Pty Ltd v Commissioner of Taxation [2013] FCAFC 50, applied
Scholefield Goodman & Sons v Zyngier [1986] AC 562, applied
Toussaint v Martinnant (1787) 2 TR 100; 100 ER 55, cited
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, considered
Weldon v Neal (1885) 15 QBD 471, cited

COUNSEL:

The plaintiff appeared on his own behalf
S Couper QC and A Low for the first and second defendants
S Whitten for the third and fourth defendants

SOLICITORS:

The plaintiff appeared on his own behalf
Australian Property Lawyers for the first and second defendants

WGC Lawyers for the third and fourth defendants

Jackson J:

This hearing was of the following six applications, listed in chronological order of filing:
a.the plaintiff’s application for summary judgment or a pleadings-based judgment against the first and second defendants on the whole of the claim or part of the claim;
b.the first and second defendants’ application to remove a caveat lodged by the plaintiff over their home;
c.the third and fourth defendants’ application for summary judgment on the whole of the claim against them;
d.the first and second defendants’ application for summary judgment on the whole of the claim against them; and
e.the plaintiff’s application for summary judgment against the third defendant for the whole of the claim or part of the claim against him.
The third and fourth defendants have been given retrospective leave to amend their application to apply for an order to remove a caveat lodged by the plaintiff against their home.
The amended claim and amended statement of claim are inadequate. They do not articulate the claims or causes of action of the plaintiff against the defendants with precision. The plaintiff appears for himself. Although he is a lawyer, he has not been able to plead in compliance with r 149(1)(b) of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) so as to allege all of the material facts and not the evidence. Worse still, the replies to the defendants are non-compliant with the rules of pleading and are prolix. They contain some extravagant and, in some respects, scandalous allegations. Still, the applications must proceed on the pleadings as they are. However, an analysis of the cross-applications may be better understood if the skeleton of the story that underlies the claims in the amended claim and amended statement of claim is first set out, to the extent that it is not contentious, or apparently so.
The claim arises out of the parties’ relationships over a development project. The plaintiff had some unspecified interest in a sub-divisional development at Yeppoon, either on the land or near the land described as Lot 200 on Survey Plan 199666, County of Livingstone, Parish of Hewittville, Title Reference 50650144, that I will call “the Land”. The plaintiff and the male defendants orally arranged for the purchase of the Land from the prior owner. The transaction ultimately arranged involved the plaintiff as a significant contributor of security to the lender on the buyer’s side.
A company, Blue Chip Properties (Queensland) Pty Ltd, which I will call “BCP”, agreed to buy the Land and to borrow the money to do it. The lender was Bank of Queensland Limited, which I will call “BOQ”. To finance the transaction and the initial expenses associated with the development, BCP borrowed under loan facilities and agreements from BOQ and the plaintiff, including:
a.on 20 December 2007, commercial loan facilities in the total amount of $7.24 million from BOQ for a maximum term of six months except as to $600,000 that was repayable on demand, that I will call the “BOQ Facilities”; and
b.on 5 December 2007, a loan facility agreement, relevantly in the total sum of $600,000 with the plaintiff repayable on an unstated date, which I will call the “Plaintiff’s Loan Agreement”
The venture by BCP was not a success. Although some operational works were carried out, BCP was unable to obtain construction funding for the sub-division during the term for the initial loans.
In mid-2008, the BOQ Facilities became repayable.
In October 2008, BOQ demanded repayment of the BOQ Facilities.
On 21 July 2011, BOQ appointed receivers and managers to BCP’s undertaking.
By September 2014, the parties’ dealings with BOQ came to an end, as far as the evidence reveals.
In late 2012 and early 2013, the Land was sold by BOQ to the plaintiff and he was released from further liability to BOQ.
In 2014, the defendants compromised their liabilities to BOQ and BOQ gave each of them a release, so far as the evidence shows.
On 2 September 2020, the plaintiff started this proceeding, initially against the first and second defendants.
On 19 February 2021, the plaintiff added the third and fourth defendants as defendants and, from 5 March 2021, amended the claim and statement of claim as against all defendants.
The defendants’ alleged liabilities are based on the guarantees given by each defendant to BOQ for BCP’s liabilities under the BOQ Facility and the guarantees given by the male defendants for BCP’s liabilities under guarantees of the Plaintiff’s Loan Agreement.
There are other possible causes of action partly pleaded in the amended statement of claim, but the BOQ guarantees and the alleged guarantees to the plaintiff are the focal points.
As to the caveat removal applications, the questions raised turn on the plaintiff’s alleged rights of subrogation to BOQ’s rights and the effect of a charging clause in the guarantee provisions under the Plaintiff’s Loan Agreement.
Each of the plaintiff and the defendants guaranteed payment to BOQ of amounts to be advanced under the BOQ Facilities. The plaintiff’s guarantee was limited to $3 million. Each defendant guaranteed the full principal amount of $7.24 million.
The plaintiff lodged a $3 million deposit in a BOQ account in support of his guarantee and BCP’s borrowing under the BOQ Facilities. There was a letter of set-off associated with the deposit.
On 16 October 2008, following BCP’s default in repayment of the BOQ Facilities, BOQ appropriated the plaintiff’s $3 million deposit to the outstanding balance of BCP’s indebtedness, acting under the plaintiff’s guarantee.
The first defendant and third defendant each guaranteed the Plaintiff’s Loan Agreement by executing it as guarantor. Neither the second defendant nor the fourth defendant did so.
On 31 October 2008, the plaintiff alleges that the parties to the Plaintiff’s Loan Agreement executed a written variation dated 22 October 2008 to include the $3 million deposit that BOQ had appropriated as part of the moneys advanced under the agreement to BCP and guaranteed by the defendants. The defendants deny being party to any such variation. No executed copy of the document, that I will describe as the “Alleged Deed of Variation”, dated 22 October 2008, has been produced in evidence.
In paragraphs 15 and 15A of the amended statement of claim, the plaintiff alleges that the first defendant acted as a fiduciary agent for the plaintiff and the second defendant, and the third defendant acted as a fiduciary agent for the plaintiff and the fourth defendant. There is no material fact alleged in the amended statement of claim that supports the appointment of the first defendant as agent of either the plaintiff or the second defendant or the appointment of the third defendant as agent of the plaintiff or the fourth defendant, and no facts are otherwise alleged that would support the fiduciary relationship alleged as between the plaintiff and any defendant.
As to agency between the first defendant and the second defendant or agency between the third defendant and the fourth defendant, there is no presumption as to agency between husband and wife and there is no usual authority of that kind. See Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at [21] and Bowstead & Reynolds on Agency, 21^st ed at [3-043]. Of course, a pleading should allege the material facts that constitute one person acting as agent for another. For example, see Qualify Me Pty Ltd v Get Qualified Australia Pty Ltd [2016] FCA 192 at [97]. It is not alleged that the first or third defendants held themselves out to the plaintiff as contracting on behalf of either the second or fourth defendants, or that the second or fourth defendants actually authorised the first or third defendants to do so. As well, there is no admissible evidence that supports the allegations of agency.
It is also necessary to plead the material facts to support an ad hoc or novel fiduciary relationship. See, for example, Olson v Keefe [2019] FCA 339 at [13]-[14]. As well in this case, there is no admissible evidence that would support those allegations of agency or fiduciary relationship.
The plaintiff also alleges in those paragraphs, namely, paragraphs 15 and 15A, that each defendant owed to the plaintiff:
“express monetary contractual duties and implied duties of cooperation and to act in good faith, as implied by operation of law and as being necessarily incidental to performance of their contractual obligations and to secure or ensure that [the plaintiff] obtained the benefits provided for in the [BOQ Facilities and the Plaintiff’s Loan Agreement and a number of securities given to BOQ].”

No material fact is alleged in the statement of claim that will give rise to such a contractual duty of good faith, either as an express or an ad hoc implied contractual term of any alleged contract. Each defendant’s relationship to the plaintiff as alleged in the pleading was that of co-surety for BCP’s debt to BOQ and as guarantor of BCP’s separate debt to the plaintiff. Per se, those relationships do not support the alleged implied duties of cooperation and good faith. No basis for such an obligation otherwise as a matter of law was identified by the plaintiff. The alleged duty of good faith in this case is not one recognised as a general incident of contractual relationships in Australia. See Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at 194-195, [37]-[42] and Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd [2019] 1 Qd R 392 at 447-456, [222]-[245].
In paragraph 14 of the amended statement of claim, the plaintiff alleges that from 60 days after 22 October 2008, $3.6 million, interest and other amounts were payable to him by BCP under the Plaintiff’s Loan Agreement as varied, and each of the first and third defendants is liable to him for that amount as guarantor. In paragraph 16 of the amended statement of claim, the plaintiff alleges that the defendants and another “combined or agreed to act dishonestly for the predominant or dominant purpose, plan or scheme of injuring [the plaintiff], by defeating his said interests”, which I will call the “Conspiracy to Injure”. The particulars or facts alleged in support of that allegation are made in nine lettered sub-paragraphs, (a) to (h) as follows, but before considering each of the sub-paragraphs I note that in Banque Commerciale SA (En Liqn) v Akhil Holdings Limited (1990) 169 CLR 279 at 285, the requirement that fraud must be pleaded specifically and with particularity was re-emphasised.
First, sub-paragraph (a) alleges the Conspiracy to Injure was constituted or evidenced by acting in order to obtain financial benefits or advantages without the fully informed knowledge or consent of the plaintiff. The relevant actions, financial benefits or advantages are not there identified.
Second, sub-paragraph (b) alleges the Conspiracy to Injure was constituted or evidenced by negotiating the provision of new facilities by BOQ to BCP while the plaintiff remained liable as a guarantor. The evidence shows that in October 2008, BOQ did offer a new facility to BCP, which was accepted by BCP, but nothing came of it. So far as the evidence shows, the new facility agreement was never entered into. It has no apparent relevance to the parties’ rights at the present time on any of the arguments advanced on the applications, so far as I can see.
Third, sub-paragraph (c) alleges the Conspiracy to Injure was constituted or evidenced by $150,000 of the $600,000 lent under the Plaintiff’s Loan Agreement not being used for the intended purpose of execution of operational works. That allegation is denied by the defendants and the denial is supported by evidence on oath by the first defendant or the first and third defendants. But, in any event, that is not alleged to have caused loss. In addition, as previously stated, BCP was unable to obtain construction finance, which appears to have caused the development project by it to fail. The contrary is not alleged.
Fourth, sub-paragraph (d) alleges the Conspiracy to Injure was constituted or evidenced by the defendants procuring BOQ to appropriate the plaintiff’s $3 million deposit. The defendants deny that and their denials are supported by evidence on affidavit. They were not aware that BOQ intended to do so prior to the appropriation.
Fifth, sub-paragraph (e) alleges that the Conspiracy to Injure was constituted or evidenced by the defendants “rescheduling” the indebtedness of BCP to BOQ. What that means or what the defendants are alleged to have done to achieve it is not apparent and not referred to in the evidence.
Sixth, sub-paragraph (f) alleges that BOQ’s securities were cross-collateralised under other loan facilities to which the first and second defendant were privy. However, whether the securities held by the BOQ in respect of the BOQ Facilities were cross-collateralised with other securities is not alleged to have caused the plaintiff any loss.
Seventh, sub-paragraph (g) alleges “thereby” the defendants permanently and fully prejudiced the recovery of any money owing to the plaintiff under the Plaintiff’s Loan Agreement. How that was so is not alleged. There is no evidence read on the applications that rationally supports this allegation.
Eighth, sub-paragraph (h) alleges the defendants’ Conspiracy to Injure was constituted or evidenced by leaving the plaintiff to repay the balance of the moneys secured by the BOQ’s securities. First, what the plaintiff describes as being left to pay the balance of the moneys secured appears to refer to BOQ’s appropriation of the plaintiff’s $3 million deposit and the plaintiff’s subsequent purchase of the Land from BOQ as mortgagee.
There is no allegation or evidence that the plaintiff paid all of the debt owed by BCP to BOQ. On the contrary, it appears that in October 2014, BOQ wrote-off a balance of over $7 million on BCP’s account as a bad debt. I note that the writing-off of a debt in a creditor’s books does not amount, in the absence of anything else, to a release or forgiveness of the debt and that a debt released or forgiven cannot be written-off because it no longer exists. These elementary propositions are stated, for example, in Sanctuary Lakes Pty Ltd v Commissioner of Taxation [2013] FCAFC 50 at [118].
Second, no rational argument was advanced as to how the defendants’ failure to pay BOQ in any amount could, per se, amount to having combined or agreed or conspired to act for the predominant or dominant purpose, plan, or scheme of injuring or defeating the interests of the plaintiff under the said loan securities.
In paragraph 18 of the amended statement of claim, the plaintiff alleges that on 30 May 2012, BOQ issued notices of default, made demand for $9,143,678.98 and gave notice of exercise of power of sale under s 84 of the Property Law Act 1974 (Qld) (“PLA”). It is not alleged that this amount is still owing to BOQ, nor is there any evidence that it is.
In paragraph 19, the plaintiff alleges that was done to injure or defeat his interests. First, the alleged action was by BOQ, not any of the defendants. Second, no loss is alleged to have been caused to the plaintiff by those alleged actions of the bank.
The plaintiff alleges, in paragraph 20 of the amended statement of claim, that on 17 December 2010, under the Plaintiff’s Loan Agreement as varied, he issued a notice of default and a demand for payment of $3.6 million plus interest to the first defendant. The plaintiff further alleges in paragraph 21 of the amended statement of claim that on 13 August 2012, under the Plaintiff’s Loan Agreement as varied, he issued a notice of default and a demand for payment of $3.6 million plus interest to the first defendant.
In paragraph 22 of the amended statement of claim, the plaintiff alleges that, on 30 March 2012, BOQ made demands for amounts and, on 31 March 2013, refused to release its mortgage over the Land to the plaintiff as second mortgagee except on payment of amounts totalling $2,522,758.29. Again, the alleged action was by BOQ, not any of the defendants. Again, no loss is alleged to have been caused by those alleged actions of the bank.
The plaintiff alleges that those amounts demanded by the bank were “Excessive Payments” without alleging in excess of what. Presumably, the bank demanded any amounts on the basis that it was not required to release the relevant lots as part of its first mortgage security over the Land, so as to enable the plaintiff, as second mortgagee, to sell those lots, and refused to do so unless the alleged demanded amounts were paid. The plaintiff does not allege that he was liable to pay the amounts under his guarantee to BOQ. The contrary seems to be impliedly alleged by his description of them as “Excessive Payments”. The plaintiff does not allege the payment of the demanded Excessive Payments was in fact made by him in the amended statement of claim, although some paragraphs, for example, paragraph 17(g), assume he did. As will appear later, the evidence establishes that the plaintiff purchased the Land from the bank, exercising its power of sale as mortgagee, and the relevant payments were made on account of the sums payable under that purchase agreement.
In paragraph 23 of the amended statement of claim, the plaintiff alleges that as to the appropriated $3 million and the Excessive Payments plus accrued interest and costs:
“…each Defendant became liable to [the plaintiff], and BOQ became a constructive trustee of, the BOQ Facilities and Securities for [the plaintiff], under s. 4 of the Mercantile Act 1867 as then in force, under general law as to rules of subrogation, indemnity and contribution and pursuant to ss. 88(1)(c) of the Property Law Act 1974 (Qld) and s. 62 of the Land Titles Act 1994 (Qld).”
Before proceeding to further analyse the plaintiff’s claim, it is useful to briefly identify the operation of the relevant statutory provisions and general law doctrines that the plaintiff alleges are engaged in paragraph 23.
Section 62 of the Land Title Act 1994 (Qld) (“LTA”) provides that on registration of an instrument of transfer for a lot or interest in a lot, all the rights, powers, and privileges and liabilities of the transferor in relation to the lot vest in the transferee. It does not appear that the plaintiff seeks to rely on the section as transferring to him some registered mortgage interest in a lot held by BOQ as against one or more of the defendants. The amended statement of claim does not allege that there is still a registered mortgage held by BOQ of a lot of which any of the defendants is the owner and does not allege that there was a transfer of any such mortgage executed by BOQ or registered in the plaintiff’s favour. Section 62 is irrelevant.
Section 88 of the PLA provides that the money arising from sale and received by a mortgagee is to be held in trust and applied by the mortgagee in a particular order subject to exceptions. But in this case, there is no money alleged to have been received by BOQ by sale of the mortgaged property of any of the defendants. Section 88 is irrelevant.
Section 4 of the Mercantile Act 1867 (Qld) provides as follows:
“A surety who discharges the liability to be entitled to assignment of all securities held by the creditor
(1)     Every person who being a surety for the debt or duty of another or being liable with another for any debt or duty shall pay such debt or perform such duty shall be entitled to have assigned to the person or to a trustee for the person every judgment specialty or other security which shall be held by the creditor in respect of such debt or duty whether such judgment specialty or other security shall or shall not be deemed at law to have been satisfied by the payment of the debt or performance of the duty.
(2)     And such person shall be entitled to stand in the place of the creditor and to use all the remedies and if need be and upon a proper indemnity to use the name of the creditor in any action or other proceeding at law or in equity in order to obtain from the principal debtor or any co-surety co-contractor or co-debtor as the case may be indemnification for the advances made and loss sustained by the person who shall have so paid such debt or performed such duty and such payment or performance so made by such surety shall not be pleadable in bar of any such action or other proceeding by him or her.
(3)     However, no co-surety co-contractor or co-debtor shall be entitled to recover from any other co-surety co-contractor or co-debtor by the means aforesaid more than the just proportion to which as between those parties themselves such last mentioned person shall be justly liable.”
Section 4 owes its origins to s 5 of the English Mercantile Law Amendment Act 1856 (19 & 20 Vic c 97). That was described by Lord Blackburn in Duncan, Fox & Co v North and South Wales Bank (1880) 6 AC 1 at 19 as recognizing and enacting the principle that a person making payment of more than his due proportion is entitled to have assigned to him or her all rights and securities of the creditor for the purpose of obtaining contribution. The contribution to which his Lordship referred was the equitable right to contribution, articulated in Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184, that applies where a co-surety liable with another pays the debt to the creditor.
Section 4’s equivalents in different jurisdictions have been considered in a number of cases. Examples include D & J Fowler (Australia) Ltd & Anor v Bank of New South Wales & Ors [1982] 2 NSWLR 879 and Maxal Nominees Pty Ltd v Dalgety Ltd [1985] 1 Qd R 51. However, importantly, the Privy Council in Scholefield Goodman & Sons Ltd v Zyngier [1986] AC 562 held, at 575-576, that the last two cases were wrongly decided and, at 576, that the section “does not give a right of subrogation to a surety when no right to indemnity or contribution exists” otherwise.
The reason for the section may arise from the historical jurisdiction of the relevant courts in 1856 in England and 1876 in Queensland when the sections were enacted. Equitable subrogation and equitable contribution were principles and remedies granted by the courts of equity. As to contribution, after earlier contrary authority, there was a recognition of a common law claim for indemnity by a surety against the principal debtor by assumpsit (see Toussaint v Martinnant (1787) 2 TR 100 at 105; 100 ER 55 at 57-58), and a common law claim by a co-surety for contribution from another co-surety in assumpsit was also recognised (see Knight v Hughes (1828) 3 C & P 467 at 469; 172 ER 504 at 505). See also Manufacturers Mutual Insurance Ltd v GIO (1993) Aust Contract R 90-023. There was otherwise generally no right to contribution from a co-debtor in a court of common law. The section created general statutory rights recognizable in courts of law, as opposed to going to a court of equity, at a time before the Judicature Acts of the 1870s, passed both in England and Wales and in Queensland, had the effect that a single court was to administer all the remedies of the courts of common law and equity in the one proceeding.
There are a number of points to note about the operation of s 4. One is that both s 4(1) and s 4(2) operate when a surety has paid the debt owing to the creditor by “another person”, being a principal debtor, or a person “liable with” the surety, being a co-surety. The paying surety’s entitlement to an assignment of a judgment or speciality or security in respect of such debt would be in respect of the debt discharged by the payment, but the section, like the right of equitable subrogation in support of a right of indemnity or a right to contribution to which it relates, operates upon the creditor’s judgment or specialty or other security as it was before discharge. That is because it engages upon an underlying right to indemnity or contribution in general law.
As to s 4(1) in the present case, BOQ is not alleged to have expressly assigned any judgment, specialty or other security of relevance to the plaintiff. A statutory assignment at law of a debt or specialty can be made under s 199 of the PLA. The transfer of a security comprised in a mortgage of land held under the LTA may be made and may be registered under s 60(1) of that Act. It is not alleged in the amended statement of claim that BOQ has assigned any relevant debt, specialty or mortgage to the plaintiff because no assignment by BOQ is alleged and because no claim is made against BOQ for assignment. Section 4(1) need not be considered further.
However, the plaintiff relies on the rights to stand in the place of BOQ as creditor under s 4(2). There are also a number of points to make about that subsection. First, the entitlement of the surety under s 4(2) to stand in the place of the creditor is not an entitlement independent of the rights between the creditor and the other person. To the extent that the surety seeks to maintain a claim against the other person by standing in the place of the creditor for the creditor’s rights at law against the other person, he or she will be subject to the same defences that would have operated in the other person’s favour upon a claim brought by the creditor against the other person.
Second, the entitlement of a surety under s 4(2) to stand in the place of the creditor is given to a surety who pays the debt of the principal debtor or pays the debt for which he or she is liable with a co-surety. On the ordinary meaning of the text of s 4(1), that does not mean part of the debt.
In my view, on the proper construction of the section, the operation of s 4(2) must be confined to circumstances where the whole of the debt to the creditor is paid. Otherwise, upon payment of only part of the debt, a surety would be entitled to call for assignment from the creditor under s 4(1) and to stand in the place of the creditor against the principal debtor and the other co-sureties under s 4(2), even though the creditor had not been paid in full. That would not be the proper construction of s 4(2), in my view.
I am fortified in that conclusion by two cases. In Bofinger v Kingsway Group Ltd (2009) 239 CLR 269 at 279, [4], the High Court restated the rule as to equitable subrogation of a surety as follows:
“The right operates so as to confer on the surety who has paid the debt in full the rights against the debtor formerly enjoyed by the creditor or by imposing on the creditor the obligation to account to the surety for any recovery in excess of the full amount of his debt.”
Applying the statement of the Privy Council in Scholefield Goodman & Sons Ltd v Zyngier, already mentioned, that the section “does not give a right of subrogation to a surety when no right to indemnity or contribution exists” otherwise, s 4(2) could have no wider operation than the rule stated in Bofinger’s case.
As well, the point seems to have been decided in that way in the New South Wales Court of Appeal in Austin & Anor v Royal & Ors (1999) 47 NSWLR 27 at 32-33, where the equivalent to s 4 in New South Wales was relied on and the court said that:
“[i]t is only when the total obligations or debts of the debtor have been paid to the creditor…that the creditor…is obliged to transfer the securities to the guarantor pursuant to the guarantor’s rights of subrogation.”
I also observe that, in any event, the extent of the plaintiff’s right to claim against a co-guarantor by subrogation or contribution in the present case was regulated by the contract of guarantee between BOQ and the plaintiff, as I will mention below.
Third, the entitlement under s 4(2) of a surety who has paid a debt for which the surety is liable with another as co-surety is limited by s 4(3), which makes it clear that the stand-in rights against the co-surety are no more extensive than would be the rights upon a claim for equitable contribution. The paying surety is not entitled to recover more than the just proportion to which the other person is justly liable, as between those parties as co-sureties.
The plaintiff also relies upon the general law as to subrogation and contribution, being in particular the equitable doctrines of subrogation and contribution. In a post-Judicature Act world where, in the event of any conflict between the principles of law and those in equity, equity prevails, the equitable principles should be considered. See s 7 of the Civil Proceedings Act 2011 (Qld).
As to subrogation, in relation to the BOQ Facilities, as between the plaintiff and BCP and BOQ, the plaintiff was a surety for BCP’s debts to BOQ to the limited amount of $3 million. Further, as between the plaintiff and the defendants, the plaintiff was a co-surety with each of them for BCP’s debts to BOQ, although again the plaintiff’s liability was limited to $3 million while their liabilities were for the full amount of the BOQ Facilities of $7.24 million.

In equity, the right of a surety who pays a principal debtor’s debt to a creditor to be subrogated to the creditor’s right against the principal debtor has existed at least since Craythorne v Swineburn (1807) 14 Ves 160. It is based on the surety’s right to an indemnity from the principal debtor. That is not the same as a right of contribution of a surety against a co-surety in relation to their coordinate liabilities to the creditor.
In paragraph 25 of the amended statement of claim and potentially picking up, at least in part, paragraphs 1 and 2 of the amended claim, the plaintiff claims a right to subrogation for an indemnity. Paragraph 25 alleges that each defendant is liable “pursuant to the BoQ Facilities and Securities…as a primary…indemnifier to pay 100%...”
The plaintiff has not identified a basis in law or alleged facts in the amended statement of claim for him to claim a right of indemnity from any of the defendants, as opposed to BCP, that would support a claim to subrogation of any of the rights of BOQ against them, whether upon the BOQ Facilities or any guarantee or mortgage any of the defendants gave to BOQ.
As between the plaintiff and the defendants, no relationship of surety and principal debtor is alleged in the amended statement of claim in respect of the BOQ Facilities. No basis for a right of the plaintiff to indemnity from any of the defendants for the debt of BCP to BOQ was identified, apart from the allegations as to the operation of s 4.
At least while the creditor’s debt remains unpaid to some extent, as against the creditor a surety may waive a right to indemnity against the principal debtor or a right to contribution from a co-surety. Clause 13(b) of the plaintiff’s guarantee to BOQ in the present case provided, in part:
“For as long as an amount payable under a guaranteed agreement remains unpaid, you may not, without our consent…
claim the benefit of…another guarantee or indemnity; or…a mortgage, charge or other security interest, given to us…[or]
claim an amount from the debtor or another guarantor of the debtor’s obligations…”
The amended statement of claim does not allege that there was or is no amount payable by BCP under the BOQ Facilities as a guaranteed amount that remains unpaid. However, none of the defendants relies on cl 13(b) of the plaintiff’s guarantee to BOQ as such.
In respect of the BOQ Facilities, apart from the alleged right of subrogation to BOQ’s rights against the defendants, the plaintiff’s alleged rights against the defendants are to equitable contribution. The principles of that doctrine are well-known. A relevant point is that the liabilities must be coordinate, including that there must be reciprocity of obligation.
In the present case, that is relevant because the plaintiff’s guarantee was limited to $3 million. For example, had any of the defendants discharged BCP’s liability to BOQ in an amount in excess of $3 million in accordance with the higher limits of their guarantees, they would not have been entitled to contribution from the plaintiff in excess of one-fifth of the amount of $3 million as the extent of his pro-rated or just proportion of the amount of their coordinate liabilities. Similarly, any claim by him to contribution in respect of the $3 million paid under his guarantee to BOQ is limited in amount to the excess paid over one-fifth of the amount for which all co-sureties had a coordinate liability, being $3 million.
Paragraph 25 of the amended statement of claim and, at least in part, paragraphs 1 and 2 of the amended claim are also based on an alleged right to contribution. Paragraph 25 alleges that each defendant is also liable “…as a surety to pay at least one-fifth of the said sum of $3,000,000.00 which was the subject of the BoQ Appropriation and of the Excessive Payments.”
Because of the reference to the Excessive Payments, it is necessary to delve a little further into some of the evidence before further considering the claim to contribution.
On 22 October 2011, BOQ, BCP, the plaintiff, the defendants and others executed a deed of settlement and assignment, which I will call the “2011 BOQ Deed of Settlement”. One purpose of that deed was to settle finally all of the claims and rights of BOQ, BCP and the parties to this proceeding arising out of the BOQ Facilities. BOQ was to give releases to all parties in consideration of payment of $2,250,000, defined as the “Settlement Sum”, and releases from all other parties. In one of his affidavits, the plaintiff says that he paid $2,537,633.29 pursuant to that deed. That statement is not correct. The deed was not carried into effect.
After the time when the plaintiff entered into the 2011 BOQ Deed of Settlement, the plaintiff and the third and fourth defendants entered into another deed, dated October 2012, by which the third and fourth defendants agreed to transfer all their shares in BCP to the plaintiff and to resign all offices and capacities they had in BCP, in consideration of the plaintiff releasing them from all claims in connection with the advances made by BOQ to BCP, the development project or their guarantees to BOQ, which I will call the “2011 Smits-de Wit Deed of Settlement”. However, that deed provided that its operation and the releases to the third and fourth defendants it contained were conditional on the completion of the 2011 BOQ Deed of Settlement. That did not occur.
On 9 November 2011, BOQ terminated the 2011 BOQ Deed of Settlement for failure to pay the Settlement Sum.
In February 2012, the plaintiff and the third and fourth defendants entered into another deed, dated February 2012, by which the third and fourth defendants agreed to transfer all of their shares in BCP to the plaintiff and to resign from all offices or capacities they had in BCP, in consideration of the plaintiff releasing them from all claims as defined. The definition of “claims” in cl 1.3 was that claims means:
“all actions, complaints, suits, proceedings, claims, demands and causes of action (whether at law, under statute, in equity or otherwise), and the costs thereof, including claims for damages, contribution, interest and costs, or any legal, administrative, governmental, arbitral or other proceedings or investigations, arising in or from or in connection with Blue Chip, the advance, the project, or the Deed of Guarantee and Indemnity dated 14^th December 2007, and whether the facts, matters and circumstances giving rise to those actions complaints, suits, proceedings, claims, demands and causes of action are known or unknown to the parties as at the date of this deed.”
I will refer to that deed as the “2012 Smits-de Wit Deed of Settlement”.
Clause 1.1 provided that:
“[t]he parties to this Deed agree that Smits absolutely and irrevocably releases and forever discharges the de Wits from all claims, as defined in clause 1.3 below.”
The third and fourth defendants plead that release in answer to the plaintiff’s claims.
What followed in 2012 and 2013 and 2014 were separate settlements as between BOQ and the plaintiff, then between BOQ and the first and second defendants and between BOQ and the third and fourth defendants. No other written contract of settlement was subsequently made between the plaintiff and the defendants so far as the evidence reveals.
The first defendant says that, during the first half of 2012, there were dealings between him and the plaintiff and, in early 2012, the plaintiff entered into contracts with the receivers of BCP to purchase the Land. After those contracts were not completed, the plaintiff informed him in late 2012 that he had entered into a settlement with BOQ.
There is in evidence an unexecuted copy of a deed of settlement between BOQ, the plaintiff and the receivers of BCP, that I will call the “2012 BOQ-Smits Deed of Settlement”, that the plaintiff says was executed on 11 December 2011 and under which he purchased the Land. It recites the BOQ Facilities, that the (unstated) amount of the loan by BOQ to BCP was unpaid and accruing interest and other fees and charges, that BCP was still in default, that the loan was secured by BCP’s mortgage over the Land and the guarantees given by the plaintiff and the defendants, that BCP had appropriated the plaintiff’s $3 million deposit, and that the earlier contracts to sell the Land (and other land) to the plaintiff were not completed.
Under the 2012 BOQ-Smits Deed of Settlement, the plaintiff agreed to pay the “Total Amount Owing” to BOQ, defined to mean any advances to be made to the plaintiff under that deed, the amount of the purchase price payable by the plaintiff to buy the Land (and some other costs), and to release BOQ and the receivers from all claims whatsoever in consideration of BOQ entering into the deed, which provided for the terms on which the plaintiff might buy the Land. It also provided for BOQ to release the plaintiff from all further claims.
The terms of the 2012 BOQ-Smits Deed of Settlement are inconsistent with the plaintiff’s statement on affidavit that he paid $2,537,633.29 pursuant to the 2011 BOQ Deed of Settlement, and the allegation in the amended statement of claim that he paid the alleged Excessive Payments as sums to obtain release of BOQ’s first mortgage over the Land to be able to sell subdivided lots of the Land as second mortgagee from BCP.
In or about August 2014, BOQ and the first and second defendants entered into a deed of settlement, which I will call the “2014 BOQ-Cugola Deed of Settlement”, under which the first and second defendants agreed to make a number of payments totalling $50,000 and to release BOQ from all claims in consideration of BOQ’s agreement to release each of them from further liability, inter alia, under their BOQ guarantees. Prima facie, BOQ’s promises are to be regarded as a release.
Subsequently, the first and second defendants “refinanced” their home loan with the National Australia Bank. It is to be inferred, for the purposes of these applications, that their home is the land comprising Lot 14 on RP866030, Title Reference 5000262680, that I will refer to as “Lot 14”, and that the plaintiff alleges in paragraph 6(c)(a) of the amended statement of claim was security, inter alia, for the BOQ Facilities. It appears that BOQ no longer holds any mortgage over the first and second defendants’ home and that any mortgage over Lot 14 that used to exist in favour of BOQ has been released.
On 25 September 2014, BOQ and the third and fourth defendants entered into a deed of settlement, which I will call the “2014 BOQ-de Wit Deed of Settlement”, under which the third and fourth defendants agreed to pay $20,000 and to release BOQ from all claims, in consideration of BOQ’s release of the third and fourth defendants. Prima facie, BOQ’s promises are to be characterized as a release.
On 20 October 2014, BOQ credited BCP’s account with the sum of $7,036,493.55 as writing-off a bad debt, leaving the account in credit in a small sum.

Summary judgment for the plaintiff

Both the plaintiff’s applications for summary judgment under r 292 of the UCPR and the defendants’ applications for summary judgment under r 293 raise for consideration whether the opposite parties or party has a real prospect of succeeding on the defence or claim or part thereof. The principles as to the correct approach on such applications are not contentious and are stated, for example, in Coldham-Fussell v Commissioner of Taxation (2011) 82 ACSR 439 at 465-468, [97]-[102].
I bear also in mind that there are a number of arguments in the present case that engage the operation of relevant limitation provisions and whether a claim for a cause of action or equitable right has been brought after expiry of the relevant limitation period. In Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 533, it was said that it is undesirable that limitation questions of the kind under consideration in that case should be decided in interlocutory proceedings in advance of the hearing of the action except in the clearest of cases. However, that statement does not negate the statutory provision in r 293 of the UCPR, or the principle that in considering a summary judgment application “[a]rgument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff or defendant is so clearly untenable that it cannot possibly succeed”, as stated in General Steel Industries Inc v Commissioner for Railways (NSW) & Ors (1964) 112 CLR 125 at 130.
The plaintiff applies for summary judgment by applications filed as against the first and second defendants on 21 January 2021 and as against the third defendant on 7 and 12 May 2021. That application, on the face of it, does not appear to be brought against the fourth defendant, but in argument the plaintiff contended that it was. The terms of the applications for summary judgment are confusing and, at times, they depart from the amended claim and amended statement of claim. It is appropriate, therefore, to consider the questions of summary judgment having regard to the pleaded claims as made in the amended claim and amended statement of claim.
Paragraph 1 of the amended claim
Paragraph 1 of the amended claim is for $9,143,678.98, that paragraph 18 of the amended statement of claim alleges was demanded by BOQ on 30 May 2012.
In my view, it is not necessary to analyse the claim for summary judgment to a money judgment in that amount in any further detail. It is neither alleged to be nor is there evidence that it was the amount then owing or that the amount is owing now. I will consider the plaintiff’s claims to subrogated rights further later in these reasons.
The defendants have shown a real prospect of defending that part of the claim made in paragraph 1 of the amended claim.
Paragraph 2 of the amended claim
Paragraph 2 of the amended claim is for a declaration that the benefit of the securities defined in paragraph 1 of the amended claim as the “BOQ Loan Security Interests” passed or is transferrable to the plaintiff and thereby BCP and the defendants each became liable to pay all moneys secured thereby to the plaintiff, that relates to the BOQ Facilities and the money advanced by BOQ under them.
BCP is not a party to the proceeding and the court should not make any declaration as to its liability that is not necessary to a declaration to be made as between the parties to the proceeding. It also follows that no declaration should be granted as to subrogation of any of the BOQ Loan Security Interests as against BCP, unless that is necessary to a declaration to be made as between the parties to this proceeding.
As to the defendants, as previously analysed, they are not and were not principal debtors as between themselves and BOQ as creditor and the plaintiff as co-surety. There is no basis under s 4 of the Mercantile Act 1867 (Qld) or in equitable principle identified by the plaintiff based on facts alleged in the amended statement of claim and proved that would entitle him to the declaration as to entitlement by subrogation to BOQ’s rights, as previously discussed.
Further, the BOQ Loan Security Interests, as defined, do not include any mortgage over any real property of the defendants, apart from Lot 14. That mortgage has been released. The only other relevant instruments to which BOQ and they are parties among those securities are the guarantees given by the defendants to BOQ to secure the BOQ Facilities. The plaintiff has neither alleged in the amended statement of claim nor proved that he has paid the full amount of BCP’s debt to BOQ so as to be entitled to claim the benefit of BOQ’s guarantees from the defendants.
The defendants have shown a real prospect of defending that part of the claim.
Paragraph 3 of the amended claim
Paragraph 3 of the amended claim is against the first and third defendants to pay to the plaintiff an amount of $4 million or such other sum as determined by the court and interest at different rates for particular periods starting from 21 December 2007 under a group of nine or more securities defined as the “Smits Loan Security Interests” that relate to the Plaintiff’s Loan Agreement and amounts alleged to have been advanced under it.
Some of those securities are disputed by the defendants, in particular the alleged deed of variation of the Plaintiff’s Loan Agreement dated 22 October 2008. That security is the alleged source of the amount of $4 million and also, in part, the claimed rates of interest. There is no copy executed by any defendant in evidence. The defendants deny that it was made and say on affidavit that it was not. To that extent, they have shown a real prospect of defending that part of the proceeding.
Absent the alleged deed of variation dated 22 October 2008, the Plaintiff’s Loan Agreement was for $600,000, and the first and third defendants’ liabilities as guarantors under that agreement would be limited to that amount and other sums payable under its terms. No calculation of that amount was put into evidence.
The plaintiff submits that cl 17.3 of the Plaintiff’s Loan Agreement, which contains one of the clauses relating to the guarantees, would entitle the plaintiff to treat the $3 million appropriated by BOQ on 16 October 2008 as part of the moneys secured by the guarantee. In my view, that is not the effect of cl 17.3.
As well, the first and third defendants defend any claim against them under the guarantees given under the Plaintiff’s Loan Agreement as brought after the expiry of the relevant limitation period, which is discussed below.
It is unnecessary at this point to go further. The first and third defendants have shown a real prospect of defending that part of the plaintiff’s claim.
Paragraph 4 of the amended claim
The plaintiff did not apply for summary judgment for the declaratory relief in paragraph 4 of the amended claim.
Paragraph 5 of the amended claim
Paragraph 5 of the amended claim is for declaratory relief that both the BOQ Loan Security Interests and the Smits Loan Security Interests charged “any security interest held by BoQ at any time after 25 October 2007 and any proprietary interest of the registered proprietors” over the first and second defendants’ interests in their home and the third and fourth defendants’ interests in their home. The third and fourth defendants’ home is Lot 3 on Survey Plan 311499, being Title Reference 213421523, that I will refer to as “Lot 3”.
Further, the amended statement of claim does not allege that BOQ had or has any security interest in Lot 3 or that Lot 3 secured the BOQ Facilities debt as against the relevant defendants as guarantors. The evidence does not show when the properties were acquired or what security interest BOQ has in them, except that apparently BOQ released any mortgage over the first and second defendants’ home when the loan relating to it was refinanced, being Lot 14.
As previously discussed, as defined, the Smits Loan Security Interests included the alleged deed of variation of the Plaintiff’s Loan Agreement dated 22 October 2008. The amended statement of claim does not allege in terms that any debt owing by any of the defendants as guarantor of the Plaintiff’s Loan Agreement is secured against other properties.
To these extents, subject to the discussion below, the defendants have shown there is a real prospect of defending this part of the plaintiff’s claim.
As to the Plaintiff’s Loan Agreement, there is also a dispute whether either the second defendant or the fourth defendant was a party to or a guarantor under that agreement. On the face of the written agreement and on the face of the plaintiff’s alleged deed of variation of that agreement, dated 22 October 2008, they were not.
The analysis so far shows that the second defendant has a real prospect of defending this part of the plaintiff’s claim and it is unnecessary to go further so far as the second defendant is concerned. The same reasoning applies to any application for summary judgment against the fourth defendant on the Plaintiff’s Loan Agreement.

I note that, although not pleaded in the amended statement of claim, cl 21 of the Plaintiff’s Loan Agreement contains an equitable charging clause in respect of both the present and future acquired property of a guarantor. That clause could have operated to create an equitable charge over the first defendant’s interest and the third defendant’s interest in their respective family homes.
However, as to the first and third defendants, even if the defects in the pleading and evidence previously mentioned were corrected, unless there is a debt due and owing to the plaintiff under the Plaintiff’s Loan Agreement that would be secured by an equitable charge under cl 21, declaratory relief as to the claimed charge should not be granted.
The first and third defendants defend the proceeding on the ground that the limitation period for any cause of action for debt in contract against them has expired, as discussed below. It is unnecessary to go further so far as they are concerned.
All defendants have shown a real prospect of defending this part of the claim.
Paragraphs 6 and 7 of the amended claim
The plaintiff did not apply for summary judgment on the claim for damages or compensation in paragraphs 6 and 7 of the amended claim.
Conclusion on the plaintiff’s applications for summary judgment
It follows that the plaintiff’s applications for summary judgment must be dismissed.
First and second defendants’ application for summary judgment
The first and second defendants apply for summary judgment on the whole of the plaintiff’s claim, based on a number of grounds, but I will only deal with those it is necessary to decide.
It is convenient to separate the plaintiff’s claims based on being entitled to stand in the place of BOQ under s 4(1) of the Mercantile Act 1867 (Qld) or as subrogated in equity to BOQ’s rights and remedies, which I will refer to as the “BOQ Stand-in Claims”, from those based on the Plaintiff’s Loan Agreement, including as allegedly varied, and any claim based on equitable contribution alone.
BOQ Stand-in Claims
As discussed in the analysis of the plaintiff’s applications for summary judgment, the plaintiff does not allege that he has fully paid the BCP debt to BOQ under the BOQ Facilities, and the evidence is that in October 2014, BOQ wrote-off over $7 million of that debt that was unpaid by crediting that amount to BCP’s account.
For the reasons already discussed, it is a prerequisite in law to the plaintiff’s entitlement to stand in place of BOQ under s 4 of the Mercantile Act 1867 (Qld) or by subrogation in equity that the BOQ debt is paid fully.
In my view, on this ground the plaintiff has no real prospect of success on the parts of his claim for the BOQ Stand-in Claims.
Limitation defence – BOQ Stand-in Claims
Also as to the BOQ Stand-in Claims, there is a ground of defence of limitation raised. It may be assumed for this analysis that the plaintiff is otherwise entitled to be subrogated to BOQ’s debt claim against the first and second defendants and that such claims are not answered by releases made by BOQ in the 2014 BOQ-Cugola Deed of Settlement. On the plaintiff’s case, as previously discussed, it is alleged and assumed that the first and second defendants were indebted to BOQ upon their guarantees for the BOQ Facilities as at 13 May 2012.
A question arises when time on the BOQ Stand-in Claims started to run and what provision of the Limitation of Actions Act 1974 (Qld) (“LAA”), if any, applies to it.
In Barber v De Prima (2018) 126 ACSR 253 at 297, it was held, in effect, that the relevant limitation period that applies in respect of claims by subrogation and under s 4 of the Mercantile Act 1867 (Qld) is the limitation period that would apply to a claim by BOQ on the subrogated rights and remedies. So far as that is a claim to a debt under one of the BOQ guarantees, it would be under s 10(3) of the LAA as an action upon a specialty, being 12 years from the date on which the cause of action accrued because the BOQ guarantees were executed under seal.
As to the date when the cause of action accrued, cl 4.5 of the BOQ guarantees given by the first and second defendants provided that “if we ask, you must pay us any amount which the debtor does not pay us when it is due…”. That provision made the guaranteed amount payable upon demand. See Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491 at 503 as to the effect of a demand. The principal debt of BCP was in default from 2008, because the due amounts were not paid. But the fact to be proved to establish when the cause of action accrued against the first and second defendants as guarantors of BCP’s debt to BOQ is when BOQ asked for payment from them under their BOQ guarantees.
If that date was before 1 September 2008, this proceeding was started after the limitation period that applied to BOQ’s rights in debt against the first and second defendants had expired. However, the evidence does not establish that BOQ did ask for payment from the first and second defendants before 1 September 2008.
It follows that it is not shown on this additional ground that the plaintiff does not have a realistic prospect of succeeding on the BOQ Stand-in Claims.
Limitation defence – Plaintiff’s Loan Agreement claims
As to the sums claimed by the plaintiff under the guarantees given under the Plaintiff’s Loan Agreement by the first defendant as alleged by the second defendant, the guarantees in that agreement were not made by deed and so the cause of action for the debt owing under them is not upon a specialty. The relevant limitation period is s 10(1)(a) of the LAA for a cause of action founded on simple contract, being six years from the date on which the cause of action arose.
As to the date when the cause of action arose, cl 17.4 of the Plaintiff’s Loan Agreement made the guarantor liable to pay the sum due under the guarantee on demand. The fact that needs to be proved to establish when the cause of action against the first or second defendants arose is when the plaintiff demanded payment.
If that date was before 1 September 2014, this proceeding was started after the limitation that applied to the plaintiff’s rights in debt against the first defendant under the Plaintiff’s Loan Agreement had expired.
The plaintiff alleges, in paragraph 13 of the amended statement of claim, that between 15 October 2008 and 31 October 2008 he declared verbally to the first and third defendants that the Plaintiff’s Loan Agreement was immediately enforceable and he demanded payment from both BCP and the first defendant and, in paragraph 26 of the amended statement of claim, that he made demand on the first defendant between 16 October 2008 and 22 October 2008 for a payment of $3.6 million plus interest.
It would follow that the plaintiff’s claim against the first defendant under the guarantee given by him under the Plaintiff’s Loan Agreement may be barred by the expiry of the limitation period under s 10(1)(a) of the LAA.
In paragraphs 27 and 28 of the amended statement of claim, the plaintiff alleges two deeds were executed by some of the parties and, in submissions, the plaintiff relied on the deeds as acknowledgements under seal (and therefore by covenant as specialties) of the debts claimed by him under the Plaintiff’s Loan Agreement, either as originally made or as varied, to which s 35(3) of the LAA applies, to the exclusion of section 10(1)(a).
The first of those deeds was dated 27 August 2009 and made between BCP, the plaintiff, a proposed investor named Ronald Taylor, and the first and third defendants. I will call it the “2009 Taylor Investment Deed”. Recital A provided that the plaintiff held the second registered mortgage from BCP over Lot 202 on SP199666 “which secures the payment of $3.6M plus accrued interest…”. I observe that Lot 202 is not Lot 200. Clause 3 of that deed provided that the first and third defendants acknowledge the correctness of the recitals and operative provisions of the deed.
The second deed was the 2011 BOQ Deed of Settlement, previously mentioned. Each of the defendants was a party to that deed. Clause 22.1 contained an acknowledgement by each of them as guarantor of the BOQ Facilities that they were in default in respect of their indebtedness to BOQ in respect of the total amount owing, defined to mean the amount owing to BOQ by BCP under the BOQ Facilities.
Under s 35(3) of the LAA, where a person liable for a liquidated pecuniary claim acknowledges the claim, the right of action therefore shall be deemed to have accrued on and not before the date of acknowledgement.
However, any acknowledgement contained in the 2011 BOQ Deed of Settlement was not of the first or second defendants’ liabilities to the plaintiff under the Plaintiff’s Loan Agreement, including as varied. The 2011 BOQ Deed of Settlement is irrelevant for this purpose.
As to the 2009 Taylor Investment Deed, recital A did not acknowledge the first or second defendant’s liability as guarantor for the amount of $3.6 million plus accrued interest. In any event, where a recital is said to constitute an acknowledgement that is made in a deed where the recital is not made for the purpose of acknowledging the liability as an implied covenant, a covenant constituting a speciality will not be implied. See Bird v Perpetual Executives & Trustees Association of Australia Ltd (1946) 73 CLR 140 at 146-147.
Accordingly, on this ground, the plaintiff does not have a real prospect of success against the first defendant on its part of the claim based on the original Plaintiff’s Loan Agreement.
However, if the Plaintiff’s Loan Agreement was varied by the alleged deed of variation dated 22 October 2008, the debt owing under the guarantee would be $3.6 million plus interest and, under that deed, the promise to pay would be under seal, giving rise to a cause of action to recover the debt upon a specialty under s 10(3) of the LAA. Because the question of whether the Plaintiff’s Loan Agreement was varied by that deed cannot be finally resolved on these applications, it cannot be concluded that the plaintiff has no real prospect of success against the first defendant on this part of the claim.
As to the second defendant, the evidence did not establish when time started to run if she was a guarantor of BCP’s debt under the Plaintiff’s Loan Agreement, including as allegedly varied. Accordingly, it may not be established whether the period of limitation as against the second defendant has expired, but it is not necessary to consider this point further.
Second defendant is not a guarantor of the Plaintiff’s Loan Agreement
A separate ground of defence by the second defendant to the plaintiff’s claim under the Plaintiff’s Loan Agreement, including as allegedly varied, is that she was not a party to a guarantee of BCP’s debt to the plaintiff under that agreement.
The second defendant denies she was ever a party to that agreement and says in her affidavit on these applications that she neither authorised her husband to do so nor personally agreed that she would become a party as guarantor or otherwise. The first defendant says in his affidavit that he did not agree with the plaintiff that the second defendant would be a party to or guarantee the Plaintiff’s Loan Agreement. There is no document that says otherwise. There is not any unexecuted copy of a guarantee by the second defendant. There is also no evidence by the plaintiff that either the first defendant on behalf of the second defendant purported to agree that the second defendant would become a guarantor or that the second defendant agreed with him that she would be a guarantor of the Plaintiff’s Loan Agreement.
The plaintiff does not have a real prospect of succeeding on this part of the plaintiff’s claim against the second defendant. He does not even specifically plead it.
Limitation defence – plaintiff’s contribution claim
As to the plaintiff’s contribution claims against the first and second defendants, the starting point is an assumption that the plaintiff is otherwise entitled to equitable contribution or contribution at law against the first and second defendants as co-sureties in some amount based on his payment to BOQ of $3 million under the plaintiff’s BOQ guarantee.
A claim to contribution at law is a cause of action in quasi-contract to which s 10(1)(a) of the LAA applies. A claim for equitable contribution is not a cause of action under s 10 of the LAA, except under s 10(6)(b) that provides that s 10 does not apply to a claim for equitable relief save so far as any provision thereof may be applied by the court by analogy in the same manner as the corresponding enactment repealed by this Act as heretofore applied.
The enactment repealed by the LAA was the Limitation Act 1960 (Qld). Unhelpfully, perhaps, s 9(7) of that Act contained a similar provision to s 10(6)(b) of the LAA. The relevant limitation Act prior to the 1960 Act was the Statute of Frauds and Limitations 1867 (Qld). No express provision of that Act dealt with equitable application of limitations by analogy. However, s 16 provided that all actions upon the case of debt grounded upon any lending shall be commenced within six years after the cause of action arose.
The question is whether there is a limitation period that applied by analogy to a claim for equitable contribution made by a surety against a co-surety. In Belan v Casey (2003) 57 NSWLR 670 at 711, it was held that insofar as an action for contribution was based on an assumpsit it was an action based in quasi-contract and so had a six year limitation period. That was so under the repealed limitation Acts in Queensland. It follows that under the LAA, framing a proceeding as a claim for equitable contribution by a surety against a co-surety applies the same period by analogy in equity, and the period to be applied under the LAA is that for a cause of action founded on quasi-contract.
Section 10(1)(a) provides that a period of six years from when the cause of action arose applies to an action founded on quasi-contract. The equitable right to contribution in a money sum arises when the plaintiff has actually paid more than his or her proportion. See Belan v Casey at page 711 and the cases referred to there.
In the present case, the plaintiff paid more than his proportion of the coordinate liability of the co-sureties for $3 million when BOQ appropriated his $3 million on deposit on 16 October 2008. Any cause of action at common law of contribution and his right to equitable contribution arose then, and the period of limitation expired on 17 October 2014.
The plaintiff does not have a real prospect of succeeding on this part of the claim.
Third and fourth defendants’ application for summary judgment
The third and fourth defendants also apply for summary judgment as to the whole of the plaintiff’s claim, based on a number of grounds that I will deal with only to the extent necessary.
BOQ Stand-in Claims
For the same reasons as apply to the first and second defendants, in my view, the plaintiff does not have a real prospect of success on the BOQ Stand-in Claims against the third and fourth defendants.
Limitation defence – BOQ Stand-in Claims
As to limitation defences, the same points that decide the first and second defendants’ limitation defence to the BOQ Stand-in Claims apply to the third and fourth defendants’ limitation defence to the BOQ Stand-in Claims. The evidence does not establish that BOQ asked for payment from the third or fourth defendants before 1 September 2008.
It follows that it is not shown on this additional ground of limitation that the plaintiff does not have a realistic prospect of success on the BOQ Stand-in Claims.
Limitation defence – Plaintiff’s Loan Agreement claims
The same reasoning as applies to the first and second defendants’ limitation defence as to the Plaintiff’s Loan Agreement claims applies to the third and fourth defendants’ limitation defence to the Plaintiff’s Loan Agreement claims, except that the plaintiff has not alleged the date of demand upon the guarantees under the Plaintiff’s Loan Agreement for the third defendant and the date on which the cause of action arose before which the limitation period will have expired. It must also be kept in mind that the proceedings started against the third and fourth defendants on 19 February 2021, when they were ordered to be joined as a party to the proceeding.
It follows that it is not shown on this limitation ground that the plaintiff does not have a realistic prospect of succeeding on the Plaintiff’s Loan Agreement claims.
Fourth defendant is not a guarantor of the Plaintiff’s Loan Agreement
A separate ground of defence by the fourth defendant to the plaintiff’s claim under the Plaintiff’s Loan Agreement, including as allegedly varied, is that she was not a party to or a guarantor of BCP’s debt to the plaintiff under that agreement.
The fourth defendant denies that and says in her affidavit that she was not a guarantor of BCP’s debt upon the Plaintiff’s Loan Agreement. With one exception, the same points made in analysis of the second defendant’s similar defence apply to the fourth defendant.
The exception is that a recital to the 2011 Smits-de Wit Deed of Settlement and the 2012 Smits-de Wit Deed of Settlement stated that the “de Wits” were guarantors, which may include the fourth defendant, and that document or those documents were signed by her.
Despite that, on the evidence overall, in my view, the plaintiff does not have a real prospect of succeeding on this part of the plaintiff’s claim against her as a guarantor under the Plaintiff’s Loan Agreement. Such a claim is not specifically pleaded.
Limitation defence – plaintiff’s equitable contribution claim
The same reasoning as applies to the first and second defendants’ limitation defence to the plaintiff’s equitable contribution claim applies to the third and fourth defendants’ limitation defence to that claim against them.
It follows that the plaintiff does not have a real prospect of succeeding on this part of his claim.
Plaintiff’s release of the third and fourth defendants under the 2012 Smits-BOQ Settlement Agreement
The third and fourth defendants rely on the releases given to them by the plaintiff under the 2012 Smits-de Wit Deed of Settlement, as previously outlined.
The plaintiff raises a number of points or arguments as to why that deed is inoperative and a question of construction as to its operation. They include that the deed was not made because it had to be made by an exchange of counterparts, even though it was executed by all parties, that it was not performed as required because he did not become a member of BCP, even though the second defendant “executed’ a transfer of his shares to the plaintiff by a minute of a meeting resolving upon the transfer being signed by the third defendant. The plaintiff also raises as non-performance that the third defendant did not resign as the director of BCP. However, the evidence shows clearly that the third defendant by that minute which he signed intended to resign. The documents were forwarded by the third defendant to the plaintiff, but not only that, they were forwarded by the third defendant to the first defendant and, subsequently, a document was registered recording the resignation of the third defendant as a director.
There is no adequate explanation as to why the third defendant’s shares in BCP were not transferred as the minute proposed, but the third defendant plainly did that which was intended to be done by him towards that outcome.
In the end, it is important to recognise, however, that the relevant provisions of the 2012 Smits-de Wit Settlement Deed said in cl 1.4 that “[t]he de Wits have resigned from all offices”, and in cl 1.5 that “[t]he de Wits have transferred all shares”.
In my view, those clauses do not provide for executory obligations of the third and fourth defendants still to be performed, and no provision of that deed expressly provides that they are. However, in any event, if they were executory obligations still to be performed, cl 4.2 provided that the parties reserved the right to enforce the performance of the other parties’ obligations.

It follows, in my view, that the operation of the deed was not intended to be conditional upon performance of obligations in the future by the third and fourth defendants of cls 1.4 and 1.5.
None of the other points raised by the plaintiff require further analysis, in my view, or is sufficiently arguable.
In my view, on this ground as well, the plaintiff does not have a real prospect of succeeding on his claims against the third and fourth defendants.
First and second defendants’ applications to remove the caveat
A person claiming an interest in a lot may lodge a caveat under s 122 of the LTA. Where a caveat by an equitable mortgagee is subject to s 126, under that section, the caveatee may serve a notice requiring the caveator to start a proceeding to establish the interest claimed.
In the present case, the plaintiff lodged a caveat over the first and second defendants’ home in Lot 14, claiming an interest, in effect, as equitable chargee. They appear to – or, I assume, have - served him with notice under s 126. By paragraph 5 of the amended claim, he seeks to establish the interest claimed.
Under s 127 of the LTA, a caveatee may apply for an order that a caveat be removed. The first and second defendants apply for such an order. On an application to remove a caveat, Cousins Securities Pty Ltd & Ors v CEC Group Ltd & Anor [2007] 2 Qd R 507 shows that the onus is on the caveator to satisfy the court, as for an injunction, that there is a serious question to be tried and the balance of convenience favours the retention of the caveat on the title. For shortness of expression only, I will call that an “arguable basis”.
Because the plaintiff does not arguably show that he is entitled on the BOQ Stand-in Claims to be subrogated to any security that may have been held by BOQ over the interest in Lot 14, in my view, the plaintiff does not show an arguable basis to support the caveat lodged against the first and second defendants’ interest in Lot 14 on that ground.
Because the second defendant was not a party to the Plaintiff’s Loan Agreement, the charging clause in cl 21 of that agreement cannot operate against her and, accordingly, the plaintiff has not shown an arguable caveatable interest against the second defendant’s interest in Lot 14 on that ground.
As to the first defendant, otherwise, the question is not so clear. To the extent that cl 21 of the Plaintiff’s Loan Agreement may have charged the first defendant’s interest in Lot 14 with payment of BCP’s debt to the plaintiff under that agreement, including as allegedly varied, the question is more difficult. That is because, although the plaintiff’s claim against the first defendant for the amount owing under the agreement as a personal action for a money sum is barred by expiry of the limitation period under s 10(1)(a) of the LAA, a different cause of action may apply to a real claim to enforce an equitable charge under cl 21, such as an order for appointment of statutory trustees for sale and sale to realise the charge.
In Brisbane City Council v Amos (2019) 266 CLR 593, the High Court held that although the cause of action for a judgment for a personal money claim may be barred under s 10 of the LAA, a cause of action by a real claim under a mortgage or charge to recover the money secured is subject to s 26 of the LAA, under which a 12 year limitation period applies.
Accordingly, under s 26 of the LAA, a claim to enforce an equitable charge (not for a personal money judgment as such) may not be brought after the expiration of 12 years from the date on which the right to receive the money accrued. As previously stated, 12 years before the proceeding was started against the first defendant was 1 September 2008. I note, however, that the claim in paragraph 5 of the amended claim was added by amendment on 5 March 2021. Twelve years before then was 4 March 2009.
As previously stated, the plaintiff alleges in paragraph 13 of the amended statement of claim that, between 15 October 2008 and 31 October 2008, he declared verbally to the first and third defendants that the Plaintiff’s Loan Agreement was immediately enforceable and, in paragraph 26, that he made demand on the first defendant between 6 October 2008 and 22 October 2008. On the plaintiff’s case, that is when the cause of action to receive the money accrued. Accordingly, as against the first defendant, whether the claim in paragraph 5 of the amended claim is barred by the limitation period depends on whether the proceeding against him on that claim started on 2 September 2020 or 5 March 2021.
The effect of amending a claim and statement of claim is that the proceeding is started in relation to the added claim and causes of action from when it was originally started. What is sometimes called the rule in Weldon v Neale (1885) 15 QBD 471 proceeded from that basis to hold that an amendment to add a time-barred claim and cause of action was impermissible, but that rule was ameliorated by statutory amendments that permitted addition of a time-barred claim if the new cause of action arose out of substantially the same facts. See r 376 of the UCPR.
Accordingly, it cannot be concluded on a summary basis that the plaintiff’s claim against the first defendant in paragraph 5 of the amended claim is brought after expiry of the limitation period under s 26 of the LAA.
As well, if the Plaintiff’s Loan Agreement was varied by the alleged deed of variation dated 22 October 2008, the cause of action to receive the money within the meaning of s 26 will have accrued after that date.
The outcome so far is that the caveat must be removed against the second defendant on the ground that the plaintiff does not have an arguable case as to the interest claimed against her, but that is not established as against the first defendant.
What order should be made? That depends, on the analysis so far, whether the court can order amendment of the caveat. It was held in Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150 that the court’s power to make an order as to it seems just empowered an amendment of the caveat under the legislation then applicable as authorising an order amending a caveat. But s 127, in particular s 127(2), does not contain such a broadly expressed power.
In addition to these grounds, the first and second defendants rely upon the caveat having lapsed under s 126 of the LTA. It is not necessary to consider that ground in addition, although there seems to be substance in the submissions that were made in support of it.
In my view, for the reasons so far canvassed, it should be ordered that the caveat be removed.
Third and fourth defendants’ application for leave to file an application to remove the caveat
The third and fourth defendants applied for leave to apply for an order to remove the caveat against their home, and leave was granted.
Because the proceeding against the third and fourth defendants was not started until 19 February 2021, it was started after the time provided for in s 126 had expired, and prima facie the caveat lapsed.
In addition, because the plaintiff does not arguably show that he is entitled on the BOQ Stand-in Claims to be subrogated to any security that may have been held by BOQ over the interests in their home, in my view, the plaintiff does not show an arguable basis to support the caveat lodged against the third and fourth defendants’ interest in their family home on those grounds.
Also, because, as I have concluded, the fourth defendant was not a party to the Plaintiff’s Loan Agreement as guarantor, the charging clause in cl 21 of that agreement cannot operate against her interest in the family home as a ground for the caveat.
As for the third defendant, the question is potentially more complicated, as it is against the first defendant, for the reasons I have previously given. However, against the third defendant, there is no question that the proceeding only started on 19 February 2021.
Accordingly, if the plaintiff’s cause of action to receive the money accrued between 15 October 2008 and 31 October 2008, as the plaintiff alleges in paragraphs 13 and 26 of the statement of claim, the plaintiff’s cause of action against him was brought after the period of limitation provided under s 26 expired.
However, it is not necessary to proceed further in this analysis. In any event, the releases of the third and fourth defendants, made under the 2012 Smits-de Wit Deed of Settlement, show that the plaintiff does not have an arguable ground to support the caveat against either the third or the fourth defendants.
The orders that I propose to give effect to those findings are as follows:
a.The plaintiff’s applications filed on 21 January 2021 and 7 May 2021 are dismissed.
b.The plaintiff’s claim against the second defendant is dismissed.
c.The plaintiff’s claim against the third and fourth defendants is dismissed.
d.The following parts of the plaintiff’s claim against the first defendant are dismissed:
i.The claim to stand in place of the Bank of Queensland Limited or to be subrogated to the rights of the Bank of Queensland Limited against the first defendant;
ii.The claim for contribution as a co-surety by the plaintiff against the first defendant; and
iii.The claims in paragraph 6 of the amended claim.
e.Caveat 720427532 be removed.
f.Leave is granted to the third and fourth defendants to bring an application to remove caveat 720427533.
g.Caveat 720427533 be removed.
h.The parties make written submissions as to costs in no more than five pages on or before 16 June 2021.

CITATION:	Smits v Cugola & Ors [2021] QSC 164
PARTIES:	LEONARDUS GERARDUS SMITS (Plaintiff) v DAVID WILLIAM CUGOLA (First Defendant) AND SUZANNE MARGARET CUGOLA (Second Defendant) AND ANDRE WERNER DE WIT (Third Defendant) AND KAREN JOHANNA ELIZABETH DE WIT (Fourth Defendant)
FILE NO/S:	BS 9469 of 2020
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED EX TEMPORE ON:	Orders made and reasons delivered on 10 June 2021
DELIVERED AT:	Brisbane
HEARING DATE:	10 June 2021
JUDGE:	Jackson J
ORDER:	The order of the court is that: 1. The plaintiff’s applications filed on 21 January 2021 and 7 May 2021 are dismissed. 2. The plaintiff’s claim against the second defendant is dismissed. 3. The plaintiff’s claim against the third and fourth defendants is dismissed. 4. The following parts of the plaintiff’s claim against the first defendant are dismissed: a. The claim to stand in place of the Bank of Queensland Limited or to be subrogated to the rights of the Bank of Queensland Limited against the first defendant; b. The claim for contribution as a co-surety by the plaintiff against the first defendant; and c. The claims in paragraph 6 of the amended claim. 5. Caveat 720427532 be removed. 6. Leave is granted to the third and fourth defendants to bring an application to remove caveat 720427533. 7. Caveat 720427533 be removed. 8. The parties make written submissions as to costs in no more than five pages on or before 16 June 2021.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – GENERALLY – where the plaintiff and the first and third defendants orally arranged to purchase land in Yeppoon in 2007 – where Blue Chip Properties (Queensland) Pty Ltd (“BCP”) agreed to purchase the land and to borrow $7.24 million from the Bank of Queensland Limited (“BOQ”) under loan facilities secured by first mortgage over the land – where the plaintiff guaranteed payment of $3 million advanced under the loan facilities and lodged a $3 million deposit with BOQ – where each defendant guaranteed payment of the full principal amount of $7.24 million – where BCP borrowed $600,000 from the plaintiff under a loan facility agreement secured by second mortgage over the land – where the first and third defendants guaranteed the loan facility agreement - where BCP defaulted in 2008 in repayment of the BOQ loan facilities and in October 2008 BOQ appropriated the plaintiff’s $3 million deposit under his guarantee and subsequently appointed receivers and managers to BCP’s assets – where there was a settlement between the plaintiff and the third and fourth defendants in February 2012 – where the plaintiff purchased the land from BOQ selling as mortgagee – where there were settlements between BOQ and the plaintiff, between BOQ and the first and second defendants, and between BOQ and the third and fourth defendants between 2012 and 2014 – whether, on the plaintiff’s applications for summary judgment, the defendants have a real prospect of succeeding on their defences – whether, on the defendants’ applications for summary judgment, the plaintiff has a real prospect of succeeding on his claim GUARANTEE AND INDEMNITY – RIGHTS OF SURETY – AGAINST CO-SURETIES – CONTRIBUTION – GENERAL PRINCIPLES – where the plaintiff was a co-surety with each of the defendants for BCP’s debt to BOQ under the loan facilities – whether the plaintiff is entitled to contribution from the defendants in respect of the $3 million paid under his guarantee to BOQ – whether the claim to contribution is limited to the excess paid over one-fifth of the amount for which all co-sureties have a co-ordinate liability, being $3 million – whether the deed dated February 2012, by which, inter alia, the plaintiff released the third and fourth defendants from all claims as defined, was operative GUARANTEE AND INDEMNITY – RIGHTS OF SURETY – AGAINST CREDITOR – RIGHTS OF SUBROGATION – where the plaintiff purchased the land from BOQ selling as mortgagee and was released from further liability to BOQ in late 2012 and early 2013 – whether the plaintiff is entitled to stand in the place of BOQ under s 4(2) of the Mercantile Act 1867 (Qld) or by subrogation in equity for its rights at law as creditor against the defendants – whether the entitlement of a surety to stand in the place of the creditor against another surety, either under s 4(2) or in equity, is given to a surety where the full amount of the debt is paid, rather than part of the debt – whether the plaintiff’s claim is subject to the same defences that would operate upon a claim brought by BOQ as creditor against the defendants as sureties LIMITATION OF ACTIONS – LIMITATION OF PARTICULAR ACTIONS – SPECIALTY DEBTS AND DEBTS ON STATUTES – where the guarantees given by the defendants to BOQ were executed under seal – where the guarantees provide that, “if we ask, you must pay us any amount which the debtor does not pay us when it is due” – whether the limitation period which applies in respect of the plaintiff’s claims in equity or under statute to stand in the place of BOQ is that which would apply to a claim brought by BOQ on the subrogated rights, being 12 years under s 10(3) of the Limitation of Actions Act 1974 (Qld) – whether BOQ asked for payment from the defendants before 1 September 2008 LIMITATION OF ACTIONS – LIMITATION OF PARTICULAR ACTIONS – SIMPLE CONTRACTS, QUASI-CONTRACTS AND TORTS – GENERALLY – where the guarantees given by the first and third defendants under the plaintiff’s loan facility agreement were by a contract not under seal and the relevant limitation period is 6 years under s 10(1)(a) of the Limitation of Actions Act 1974 (Qld) – where the loan facility agreement made the guarantor liable to pay the outstanding amount on demand – where the plaintiff alleges that he demanded payment from the first defendant in October 2008 but does not allege the date of demand for the third defendant – whether the plaintiff demanded payment before 1 September 2014 – whether the loan facility agreement was varied by the alleged deed of variation dated 22 October 2008, giving rise to a cause of action upon a speciality with a 12 year limitation period under s 10(3) of the Limitation of Actions Act 1974 (Qld) LIMITATION OF ACTIONS – LIMITATION OF PARTICULAR ACTIONS – OTHER CASES AND MATTERS – where BOQ appropriated the plaintiff’s $3 million deposit on 16 October 2008 – where the relevant limitation period for a claim to contribution at law is 6 years under s 10(1)(a) of the Limitation of Actions Act 1974 (Qld) – whether there is a limitation period which applies by analogy to a claim for equitable contribution made by a surety against a co-surety EQUITY – GENERAL PRINCIPLES – FIDUCIARY OBLIGATIONS – ASCERTAINMENT OF RELATIONSHIP – where the plaintiff alleges that the first defendant acted as a fiduciary agent for the plaintiff and second defendant and that the third defendant acted as a fiduciary agent for the plaintiff and the fourth defendant – where no material fact is alleged in the pleading and no admissible evidence supports the allegations of agency – whether there was a relationship of agency or an ad hoc or novel fiduciary relationship between the first defendant and the plaintiff and second defendant and between the third defendant and the plaintiff and fourth defendant CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – where the plaintiff alleges that each defendant owed to the plaintiff “duties of cooperation and…good faith” – where the alleged relationship between each defendant and the plaintiff is that of co-surety for BCP’s debt to BOQ and as guarantor for BCP’s debt to the plaintiff – whether there is a contractual duty of good faith owed by each defendant to the plaintiff, either as an express or implied term of contract REAL PROPERTY – TORRENS TITLE – CAVEATS AGAINST DEALINGS – REMOVAL – PARTICULAR CASES – where the plaintiff lodged caveats over the first and second defendants’ home and against the third and fourth defendants’ home – where the first and second defendants apply for an order that the caveat over their home be removed – whether leave should be granted for the third and fourth defendants to apply for an order to remove the caveat over their home – whether the plaintiff as caveator satisfied the court that there is a serious question to be tried and the balance of convenience favours the retention of the caveats – whether the court can order amendment of the caveats – whether the caveat against the third and fourth defendants’ home lapsed because the proceeding against them was not started until 19 February 2021 Civil Proceedings Act 2011 (Qld), s 7 Land Title Act 1994 (Qld), s 60(1), s 62, s 122, s 126, s 127 Limitation Act 1960 (Qld), s 9(7) Limitation of Actions Act 1974 (Qld), s 10(1)(a), s 10(3), s 10(6)(b), s 26, s 35(3) Mercantile Act 1867 (Qld), s 4 Mercantile Law Amendment Act 1856 (19 & 20 Vic c 97), s 5 Property Law Act 1974 (Qld), s 84, s 88, s 199 Statute of Frauds and Limitations 1867 (Qld), s 16 Uniform Civil Procedure Rules 1999 (Qld), r 149(1)(b), r 292, r 293, r 376 Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd [2019] 1 Qd R 392, applied Austin & Anor v Royal & Ors (1999) 47 NSWLR 27, considered Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279, cited Barber v De Prima (2018) 216 ACSR 253, applied Belan v Casey (2003) 57 NSWLR 670, applied Bird v Perpetual Executors & Trustees Association of Australia Ltd (1946) 73 CLR 140, applied Bofinger v Kingsway Group Ltd (2009) 239 CLR 269, applied Brisbane City Council v Amos (2019) 266 CLR 593, applied Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491, cited Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, applied Coldham-Fussell v Commissioner of Taxation (2011) 82 ASCR 439, cited Craythorne v Swineburn (1807) 14 Ves 160, cited D & J Fowler (Australia) Ltd & Anor v Bank of New South Wales & Ors [1982] 2 NSWLR 879, cited Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184, cited Duncan, Fox & Co v North and South Wales Bank (1880) 6 AC 1, cited Garcia v National Australia Bank Ltd (1998) 194 CLR 395, applied General Steel Industries Inc v Commissioner for Railways (NSW) & Ors (1964) 112 CLR 125, cited Knight v Hughes (1828) 3 C & P 467; 172 ER 504, cited Manufacturers Mutual Insurance Ltd v GIO (1993) Aust Contract R 90-023, cited Maxal Nominees Pty Ltd v Dalgety Ltd [1985] 1 Qd R 51, cited Olson v Keefe [2019] FCA 339, cited Qualify Me Pty Ltd v Get Qualified Australia Pty Ltd [2016] FCA 192, cited Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150, considered Sanctuary Lakes Pty Ltd v Commissioner of Taxation [2013] FCAFC 50, applied Scholefield Goodman & Sons v Zyngier [1986] AC 562, applied Toussaint v Martinnant (1787) 2 TR 100; 100 ER 55, cited Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, considered Weldon v Neal (1885) 15 QBD 471, cited
COUNSEL:	The plaintiff appeared on his own behalf S Couper QC and A Low for the first and second defendants S Whitten for the third and fourth defendants
SOLICITORS:	The plaintiff appeared on his own behalf Australian Property Lawyers for the first and second defendants WGC Lawyers for the third and fourth defendants