Westpac Banking Corporation v Boston Pacific (Queensland) P/L

[2011] QDC 318

[2011] QDC 318

DISTRICT COURT

CIVIL JURISDICTION

JUDGE NEWTON

WESTPAC BANKING CORPORATION	Plaintiff
and
BOSTON PACIFIC (QUEENSLAND) PROPRIETARY LIMITED & PETER BERNARD PRIEST	Defendant

SOUTHPORT

..DATE 23/12/2011

JUDGMENT

HIS HONOUR:  This is an application by the plaintiff, Westpac Banking Corporation, ABN 33007457141, for summary judgment in respect of the debt of $165,141.56, together with interest and costs.  The application is brought against both the first and second defendants.  The first defendant is Boston Pacific (Queensland) Pty Ltd, ACN 098463882.  The second defendant is Peter Bernard Priest who is the sole shareholder and director of Boston Pacific.

The claim and statement of claim were filed on 8 December 2009.  A notice of intention to defend and a defence were filed on behalf of both the first and second defendants on 27 April 2010.  The solicitors on the record for both defendants was the firm of Tucker and Cowen, that firm remains on the record for the defendants.

At the hearing of this application today, there has been no appearance by or on behalf of either the first or second defendant.  I am satisfied that the further amended statement of claim was served on Tucker and Cowen on 16 August 2011.  In that regard, I refer to the affidavit of Michael Cope, affirmed 22 December 2011, and filed by leave today.  I am further satisfied that on 9 December 2011, the plaintiff's solicitors, McKays Solicitors Pty Ltd, served by personal delivery on Tucker and Cowen a copy of the application for summary judgment together with the supporting affidavit of Stuart Megat, filed 1 December 2011, and the affidavit of Michael Cope, filed the same date.  Leave has been granted today for the filing of a further affidavit of Michael James Cope, together with two further affidavits of Mr Megat and an affidavit of Clara Christine Mehel - and I do apologise for my mispronunciation.

It appears that Tucker and Cowen no longer act for either the first defendant or the second defendant, although they remain on the Court record.  In any event, there is no doubt that the defendants are aware of this application.  In that regard, I refer to the affidavit of Ms Mehel as sworn 22 December 2011 and filed by leave today, and in particular to Exhibit CCM1 of that affidavit.

Out of an abundance of caution, I have caused the name of de Jonge, Read and Associates to be called and also the name of Ashley Shield to be called.  The document, CCM1, exhibited to Ms Mehel's affidavit, filed by leave today, contains an email from Mr Shield to Mr Cope.  It appears from that email that Mr Shield is a business consultant with de Jonge, Read and Associates.  That email indicates that these proceedings will be the subject of a request for adjournment by de Jonge, Read and Associates on the basis that any settlement or payout of the plaintiff's debts will be hampered should a judgment be entered.  Notwithstanding the calling of Mr Shield's name and that of de Jonge, Read, no such request or application for adjournment has been forthcoming.  It is appropriate, in my view, to proceed to determine this application for summary judgment.

The material before me discloses that the first defendant, Boston Pacific, signed a business finance agreement with the plaintiff dated 17 November 2004.  Pursuant to that agreement, the plaintiff, Westpac, advanced $910,000 to the first defendant.  The second defendant, Mr Priest, signed a guarantee and indemnity on 19 November 2004 in which he guaranteed all liabilities and obligations of the first defendant to the plaintiff, now or in the future, under or in respect of the business finance agreement or any other arrangement or obligation the second defendant agreed is covered by the guarantee.  In paragraph 9A of the defence, Mr Priest admits signing that guarantee.  It may be accepted then that Mr Priest's liability under the guarantee is limited to $910,000, together with duties, charges, fees, costs, expenses and interest.  The guarantee expressly incorporated Westpac's registered common provisions, number 706487974.

On or about 1 December 2006, the first defendant signed a letter of variation pursuant to which the limit of the overdraft account was increased from $20,000 to $120,000.  Pursuant to that letter of variation, the first defendant, Boston Pacific, agreed that the limit of the overdraft would reduce to $20,000 on or before 28 February 2007.  That letter also provided that the overdraft account was repayable on demand.  It further expressly incorporated the common provisions.  Mr Priest, the second defendant, signed a consent on 1 December 2006 which was attached to the letter of variation.  Pursuant to that consent, Mr Priest expressly agreed that the overdraft account as varied was subject to the guarantee.

Westpac sent a demand in writing on 14 August 2009 to the first defendant requiring payment of $178,697.71, then due and owing under the overdraft account.  That amount was required to be paid on 21 August 2009, no later than 4 p.m.  The first defendant admits having received that demand.  In that regard, I refer to paragraph 6 of the defence.  The first defendant failed to comply with the demand.

On 26 August 2009, Westpac sent a demand in writing to Mr Priest requiring payment of $179,636.36, then due and owing under the guarantee in relation to the overdraft account.  That amount was required to be paid no later than 4 p.m. on 2 September 2009.  Mr Priest admits having received the guarantee demand as indicated by paragraph 11 of the defence.  Mr Priest failed to comply with the guarantee demand.  Accordingly, as at 22 December 2011, the sum of $218,059.24 remained due and owing to the plaintiff pursuant to the overdraft account and the guarantee.

This application is brought pursuant to Rule 292 of the Uniform Civil Procedure Rules. It may be accepted that the applicant bears the onus under that rule of showing that there is no real prospect of the defendant successfully defending all or part of the plaintiff's claim and that no need exists for a trial of the claim or any part of it. If that onus is satisfied, the Court may give judgment for the plaintiff for all or part of the plaintiff's claim and may make any other order considered by the Court to be appropriate.

On the material presently before me, there is no question in my mind that the defendant does not have a real chance of defending this claim.  Nothing has been adduced or presented by the first or second defendants by way of admissible material or evidence to demonstrate the necessity of conducting a trial to resolve any issues that may properly be in dispute.

The only defence raised by the first defendant on the pleadings is that the sums owing under the business finance agreement have been repaid, but that is not in dispute.  The first defendant remains liable for those funds borrowed by it under the overdraft account and which have not been repaid.  There is no real prospect of the first defendant successfully defending the plaintiff's claim and there is no need for a trial.

So far as the second defendant is concerned, the following matters were raised by Mr Priest by way of defence: (1) the guarantee was not given in consideration of the business finance agreement; (2) the guarantee was limited in liability; (3) the guarantee was extinguished when the first defendant paid all sums owing under the business finance agreement; and (4) the overdraft agreement did not replace the business finance agreement.  It should be noted that the guarantee contained an express provision that, "You sign this guarantee or indemnity for value, including the lender, at your request, giving or continuing credit for the customer or agreeing to do so even conditionally."

Under the business finance agreement, Westpac did, in fact, advance $910,000 to Boston Pacific.  That agreement expressly provided that Mr Priest had offered a guarantee limited to $910,000 to secure the business finance agreement.  It is not correct that Mr Priest's guarantee was not given in consideration of the business finance agreement.  There is nothing before the Court to support such contention.  Furthermore, Mr Priest can derive no comfort from the limited liability defence because the debt owing under the overdraft account, namely $165,141.56, together with interest and costs, is clearly well below the limit of $910,000.

The guarantee was not extinguished by the payment of sums owing under the business finance agreement.  It is clear that Mr Priest's liabilities under the guarantee are both continuing and irrevocable, except where the plaintiff has agreed in writing.  No such agreement in writing has been pleaded, nor is any such agreement in evidence before me.  Furthermore, it is not pleaded that Westpac has discharged the guarantee or even that it has been requested to discharge the guarantee.  It is clear that Mr Priest expressly agreed that the overdraft account would be secured by the guarantee.

It is not alleged in the further amended statement of claim that the overdraft account replaced the business finance agreement.  Westpac's case is that Mr Priest agreed in writing that the guarantee would secure the overdraft account.  There is no real prospect of Mr Priest successfully defending the claim brought by the plaintiff against him, nor is there any need for a trial.  The guarantee is in evidence.  It is admitted that that guarantee was signed.

Mr Megat has deposed the debt owing under the overdraft account by Boston Pacific.  Bank statements are in evidence to support that debt.  There is no evidence before the Court to raise any matter to dispute the bank statements.  The demand and the guarantee demand are in evidence.  It is admitted that those demands were sent and were received.  Mr Megat has deposed to the fact that the demand and the demand guarantee will not satisfy.  I accept the evidence of Mr Megat.  I am satisfied that the first defendant, Boston Pacific, and the second defendant, Mr Priest, are in default with respect to those demands.

Furthermore, there is clear evidence that Boston Pacific failed to reduce the overdraft account to $20,000 by the required date of 28 February 2007.  This of itself constitutes a breach of the letter of variation and of itself would further enable Westpac to demand payment of the overdraft account.

I find that the sum claimed by the plaintiff from Boston Pacific is due and owing.  I am satisfied that the first defendant has no defence to that claim.  There is no evidence before the Court which even suggests an arguable defence.  I find further that the second defendant has guaranteed the first defendant's obligation in relation to the sum claim. 

The defences purported to be raised by Mr Priest cannot succeed.  There has been no evidence placed before the Court in support of those defences.  I am satisfied that nothing in this proceeding has been identified that would warrant a trial.

I am satisfied that the plaintiff is entitled to judgment for the sum claimed, together with interest and costs on an indemnity basis.  I accept in that regard that it should have been obvious to both the first defendant and the second defendant that there was no defence to the further amended statement of claim.  To avoid unnecessary costs, the defendants should have consented to judgment.

The judgment of the Court, therefore, is that the defendants, Boston Pacific (Queensland) Pty Ltd and Peter Bernard Priest, pay to the plaintiff, Westpac Banking Corporation, the amount of $193,145.12, including $28,003.56 interest to 23 December 2011.  Secondly, the defendants are to pay the plaintiff's costs of this proceeding, including this application, to be assessed on the indemnity basis.  The interest schedule for judgment which has being handed to me by counsel for the plaintiff is to placed with the draft judgment which I have ordered and both documents are to be placed with the Court papers.

MR GOODWIN:  Your Honour, could I just remind your Honour that that interest schedule is, in fact, for the first judgment which‑‑‑‑‑

HIS HONOUR:  Yes, but I've amended it.

MR GOODWIN:  Thank you, your Honour.

HIS HONOUR:  Do you want to check my amendments before I‑‑‑‑‑

MR GOODWIN:  No, no, your Honour, I just didn't want to‑‑‑‑‑

HIS HONOUR:  All right.  Thank you, Mr Goodwin.

MR GOODWIN:  Thank you, your Honour. 

-----