Waterman v Hoare
[2006] QDC 108
•19 May 2006
DISTRICT COURT OF QUEENSLAND
CITATION:
Waterman & Anor v Hoare & Anor [2006] QDC 108
PARTIES:
Margaret Waterman (First Plaintiff/Applicant)
And
That’s Property Pty Ltd (ABN 64 107 800 000)(Second Plaintiff/Applicant)
V
Daniel Hoare (First Defendant/Respondent)
And
Francis Management Pty Ltd (ACN 087 124 301) (Second Defendant/Respondent)
FILE NO/S:
BD3439 of 2004
DIVISION:
Civil
PROCEEDING:
Chamber Application
ORIGINATING COURT:
District Court
DELIVERED ON:
19 May 2006
DELIVERED AT:
Brisbane
HEARING DATE:
28 February 2005
JUDGE:
Tutt DCJ
ORDER:
1. Judgment for the first plaintiff/applicant against the first defendant/respondent for the sum of $50,000.00 plus interest at the rate of 9% per annum calculated from 23 September 2004 to the date hereof;
2. The first defendant/respondent pay the applicants’ costs of and incidental to this application and of the proceeding to be agreed or assessed on the standard basis under the District Court scale.
CATCHWORDS:
Summary judgment application – respondent’s defence discloses no proper or reasonable defence against the applicant’s claim – relevant test to be applied.
COUNSEL:
Mr B P Marais for the respondents.
SOLICITORS:
Mr J W P Cusack of Cusack Galvin & James Solicitors for the applicants.
Jonathan C Whiting & Associates for the respondents.
Introduction
This is an application by the plaintiffs (“applicant”) for a number of alternative orders in the proceeding but the primary order sought at the hearing was for summary judgment against the first defendant (“respondent”) pursuant to r 292 of the Uniform Civil Procedure Rules 1999 (“UCPR”).
Background Facts
At all material times the applicant operated a property-letting business under the name of That’s Property Pty Ltd; had known the respondent for some time and had also conducted business with him in respect of computer consultancy work which the respondent carried out under the business name “A One Stop Solution” (“the business”) owned by the respondent’s company Francis Management Pty Ltd the second defendant in this proceeding.
It appears that in or about March 2004 the respondent approached the applicant offering to sell a share in the business as he needed the sum of $50,000.00 (“the funds”) urgently to pay outstanding debts to the previous owner of the business.
The applicant’s evidence is that the respondent offered her “a half share” in the business for the said sum of $50,000.00 but despite the fact that there was no formal documentation prepared in respect of the proposed sale and purchase the applicant gave the respondent a cheque for the sum of $50,000.00 “…made out to A One Stop Solution” on 8 March 2004. The applicant’s evidence is that she intended to leave it to her accountant to finalise the arrangements with the respondent and/or his accountant as to whether it should be her company the second plaintiff which would actually purchase the share in the business and these arrangements were to be confirmed at a later time between the respondent and the applicant’s accountant.[1]
[1]See applicant’s affidavit filed 14 December 2004 at paragraphs 7-9.
The applicant further states that subsequent to her payment of the cheque to the respondent, formal documentation arrangements were never made between the respondent and the applicant’s accountant despite various communication between the parties. On 28 June 2004 the respondent forwarded to the applicant a letter of 25 June 2004[2] in which he acknowledged receipt of the sum of $50,000.00 paid to him on 8 March 2004 and in which he stated that the amount paid was for “…the purchase of one third of the business ‘A One Stop Solution’…” and acknowledging further that the applicant did not wish to continue with the purchase of any share in the business and that it was the applicant’s wish that he “…make arrangements to repay the amount”.
[2]See Exhibit “MW1” to the applicant’s affidavit filed 14 December 2004.
The applicant’s response to this correspondence was contained in her solicitor’s letter of 28 July 2004 to the respondent which contained the applicant’s instructions to her solicitors of the sequence of events which occurred to attempt to formalise the purchase of the share in the business subsequent to her payment of the cheque to the respondent.
Repayment of the funds were not made by the respondent and the second defendant was placed in voluntary liquidation on 17 December 2004[3] with the funds remaining outstanding to the applicant.
[3]See Exhibit “MFW1” to the applicant’s affidavit filed 16 February 2005.
It is undisputed that the respondent received the funds from the applicant but he says they were for a one-third share only of the business and he made no representations to the applicant that “…[she] would make a lot of money”[4] from it. Further he says that the applicant was well aware that her investment in the business involved the usual commercial risks associated with any business undertaking.
[4]See paragraph 11 of the applicant’s affidavit filed 14 December 2004.
Counsels’ Submissions
The applicant’s submission is that the respondent’s defence discloses no proper or reasonable defence to the applicant’s claim as pleaded, in that the purported agreement for a share in the business for the consideration paid “was no agreement at all….because the terms were never properly defined”[5] so that in effect the amount advanced was for a consideration which wholly failed and must therefore be regarded as a loan by the applicant to the respondent.
[5]Applicant’s written submission paragraphs 18 and 19.
The respondent submits that he should not be held personally responsible for the debt to the applicant as he was at all times acting in the capacity of managing director of the second defendant which “…sold a one third share in its business ‘A One Stop Solution’ for an amount of $50,000.00 to the first plaintiff”.[6] The respondent further submits “…that the transaction was finalised”.
[6]Paragraph 3 of the respondent’s written submissions.
The respondent finally submits that the applicant purchased a one third interest in the business or alternatively loaned the second defendant the funds “…to pay its debts and now wants to recoup that money from the defendant”[7].
[7]Paragraph 14 of the respondent’s written submissions.
He finally submits that the application should be dismissed as “there is a serious question to be tried”.[8]
[8]Paragraph 18.
The Law
Rule 292 of the UCPR provides as follows:
“(1) A plaintiff may, at any time after a defendant files a notice of intention to defend, apply to the court under this part for judgment against the defendant.
(2) If the court is satisfied that—
(a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and
(b) there is no need for a trial of the claim or the part of the claim;
the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”
The test to be applied when considering whether summary judgment should be entered for either a plaintiff or defendant in a proceeding under rr 292 and 293 of the UCPR has been the subject of recent consideration by our Court of Appeal in the matter of Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 (“Salcedo”).
As stated by Williams JA at paragraph [11] with whom McMurdo P and Atkinson J agreed:
“… Rule 292 and r 293 brought about significant changes in the law and procedure relating to summary judgment. The wording of r 292 and r 293 is clearly based on the drafting used in Part 24 of the Civil Procedure Rules (UK) which came into force in the United Kingdom in 1999. In Swain v Hillman [2001] 1 All ER 91 the Court of Appeal had to consider rule 24.2, the equivalent of rule 292. Lord Woolf MR said at 92:
"The words 'no real prospect of succeeding' do not need any amplification, they speak for themselves. The word 'real' distinguishes fanciful prospects of success or . . .they direct the court to the need to see whether there is a 'realistic' as opposed to a 'fanciful' prospect of success."
Later, again speaking of the rule, he said at 94:
"It saves expense; it achieves expedition; it avoids the court's resources being used up on cases where this serves no purpose, and I would add, generally, that it is in the interests of justice. If a claimant has a case which is bound to fail, then it is in the claimant's interests to know as soon as possible that that is the position. Likewise, if a claim is bound to succeed, a claimant should know that as soon as possible."
In his reasons at 95, Pill LJ accepted that the term "real" was used in contradistinction to "fanciful". The third member of the court, Judge LJ, whilst recognising that summary judgment was a "serious step", went on to say at 96:
"This is simple language, not susceptible to much elaboration, even forensically. If there is a real prospect of success, the discretion to give summary judgment does not arise merely because the court concludes that success is improbable." …”
It is unnecessary for me to repeat what Williams JA said further in paragraphs [12] to [17] inclusive of his judgment but it is suffice to say that those paragraphs provide a succinct summary of the “test” to be applied by a judicial officer when considering an application for summary judgment under the UCPR. Further to this the comments of Atkinson J at paragraph [45] are also apposite.
The undisputed facts in this proceeding are:
(a) The applicant paid the funds to the respondent on 8 March 2004 on the basis that she would receive a share in the respondent’s business (whether it be a one-half interest or one-third interest) with respect to which no formal business agreement in writing was prepared or executed to give effect to such a transaction;
(b) There was no transfer of shares in the second defendant company to reflect the purchase of any interest in that company to the applicant in the subsequent months or at all; and
(c) That whatever the agreement was between the applicant and respondent in respect of the second defendant for which the funds were paid as consideration, such agreement was repudiated by the applicant on or about 16 May 2004[9] and accepted by the respondent on or about 25 June 2004.
[9]Exhibit “MFW3” to the applicant’s affidavit filed 16 February 2005.
Thereafter it would appear that the respondent accepted that the funds he received from the applicant became a loan to him for which he personally accepted responsibility for the repayment thereof as evidenced by his correspondence of 25 June 2004 which is prefaced “Details of Loan”. I do not consider that his referring to himself as “Managing Director” is of any significance in representing that the funds were loaned to the second defendant as distinct from the respondent personally and his subsequent conduct in the winding-up of the second defendant and the meeting of creditors associated with such action would tend to confirm that the repayment of the funds was not the responsibility of the second defendant but the respondent personally.
Finding
In all the circumstances, I am satisfied that the respondent “has no real prospect of successfully defending” the applicant’s claim within the terms of r 292(2) of the UCPR and I find that the applicant is therefore entitled to summary judgment for all of her claim against the respondent.
Orders
My orders in this matter will be:
1. Judgment for the first plaintiff/applicant against the first defendant/respondent for the sum of $50,000.00 plus interest at the rate of 9% per annum calculated from 23 September 2004 to the date hereof;
2. The first defendant/respondent pay the applicants’ costs of and incidental to this application and of the proceeding to be agreed or assessed on the standard basis under the District Court scale.
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