- Unreported Judgment
SUPREME COURT OF QUEENSLAND
No BS1103 of 2004
GEORGE AND SUZANNE MARY SZEKELY
HIS HONOUR: This is an application for summary Judgment by the defendant to an action which, in essence, seeks to attack her title to land she acquired from a company, Glenbush Proprietary Limited. To do so successfully, the plaintiffs must establish fraud on the part of the defendant pursuant to section 184, subsection 3 of the Land Title Act 1994. In the absence of fraud, the defendant's title is indefeasible.
The burden on the defendant seeking summary Judgment is as set out in Fancourt v. Mercantile Credits Limited (1983) 154 Commonwealth Law Reports 87 at page 99, “The power to order summary or final Judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.” The applicability of this rule to rule 293 of the UCPR was affirmed in Gray v. Morris (2004) QCA 5.
The case the plaintiffs seek to mount is this. On the 7th of February 2002 they entered into a document described as an option to purchase and licence to occupy with Glenbush. The controlling mind of Glenbush was a man called Black. The solicitors acting for Glenbush were Messrs Rostron Carlyle. Under the agreement, the plaintiffs paid an option fee of $900. The purchase price was $98,450. The option period was 25 years. In the meantime, the plaintiffs were to pay a fee of $410 per fortnight for the licence to occupy together with $70 per fortnight for outgoings.
The terms of the option provided for it to be exercised at any time. If there was default by the plaintiffs Glenbush could serve a notice of default specifying the default and allowing 30 days for the default to be rectified. If the default was not rectified, Glenbush could terminate the agreement without prejudice to any accrued right under it.
The defendant says that she was told by Mr Black that he served notice of default on the plaintiffs on or shortly after the 22nd of December 2003 and notice of termination on or after the 22nd of January 2004. The plaintiffs deny the receipt of any such notices. Mr Black has given no evidence and the notices exhibited to the defendant's affidavit bear no address.
On the 12th of March 2004, the defendant executed a contract to buy the land from Glenbush for $99,500. The settlement date for the contract was the 26th of March 2004. The contract was not subject to finance. Finance was, in fact, obtained from a company called Prosperity Trading Proprietary Limited. Mr Black is also associated with this company having signed the loan agreement on the 7th of April 2004 as director/secretary of the lender.
The defendant did not sign the loan agreement until the 21st of April 2004 although by then the document recorded that the advance had already been made. Settlement, however, was said to have taken place on the 24th of May 2004.
Messrs Rostron Carlyle acted for Glenbush on the sale and also for the lender. The defendant's solicitor on the sale is identified on the contract as “Conveyancing Works”. In her affidavit, the defendant refers to a letter being sent by her solicitors notifying the plaintiffs of the completion of the sale. That letter is dated the 24th of May 2004. It was written on the letterhead of Messrs Rostron Carlyle. The explanation for the apparent inconsistency given from the Bar table was that the letter was of a type commonly handed over by the vendor's solicitors on settlement and simply on-forwarded by the defendant's own solicitors.
There is, however, no document on the file apparently emanating from “Conveyancing Works”. In any event, Messrs Rostron Carlyle the solicitors for Black, Glenbush and the lender, have acted for the defendant since settlement.
There are other puzzling features of this case. In February 2004 the plaintiffs were in the Small Claims Tribunal relying on the licence to occupy which Glenbush through Black claimed to have terminated in January.
The defendant was speaking with Black about the property as early as December 2003. She says she signed the contract in March 2004, intending to repair, renovate and resell the property in the booming real estate market.
According to the plaintiffs, the defendant has never even inspected the property, much less had a building report commissioned.
Despite the booming property market to which she refers, the price the defendant paid at settlement in May 2004 was effectively the same price at which the plaintiffs obtained the option in February 2002.
The plaintiffs deposed to having been offered $240,000 for the property at about the time they purported to exercise the option.
It seems incredible that Messrs Rostron Carlyle could act for the defendant in circumstances where they acted for the vendor whose dealings with the plaintiff have embroiled the defendant in this litigation.
What I am left with is this. There is an arguable claim against the vendor for breach of contract by the plaintiffs. The same solicitors represent the vendor, the lender and the defendant purchaser.
The purchaser buys the house at what is, on one view of the evidence, a gross undervalue and at a time when the plaintiffs are trying to exercise the option to buy it for a low pre-boom price. It is not a case when Glenbush terminated the option to get a getter price.
The purchaser never inspected the property nor has anyone inspected it on her behalf. The vendor is happy, it seems, to extend settlement by two months, even though it is selling at less than half the current value.
In the same circumstances, Mr Black waited from December 2003, when he first approached the defendant, until March 2004 to sell the house to the defendant for this unusually low price. Mr Black seems to retain an interest, although I do not use that term in its technical legal sense, in the premises, despite having sold them nearly a year ago. He has been observed by the plaintiffs driving slowly past the premises in a manner suggesting a continuing interest.
There is, in my view, an unmistakable sense of fraud surrounding this case. The inference to be drawn from the facts outlined are, in my view, such that there is an arguable case that the connection between the defendant and Mr Black is such that collusion can be inferred.
It is not sufficient on an application such as this for the defendant merely to deny fraud. It is necessary to look at the respondent plaintiff's case at its highest and determine whether if the defendant were to be disbelieved the case has any prospect of success.
In addition, this case has many features in common with Miles v. Bull (1969) 1 Queens Bench 258. In that case, Justice Megarry said at page 265:
“Accordingly, if the question is whether or not the defendant has an arguable defence to the claim, I would have to answer no, for as matters stand I can perceive no such defence. All that can be said is that this is a transaction which ought to be scrutinised with some care, for plainly it bears something of the appearance of a device to evict the defendant.”
In my view, the evidence here goes a little further. In the absence of a plausible explanation for some of the matters raised, fraud might well be inferred.
Accordingly, I refuse the application for summary judgment. Having said that, the case made out in the material is not properly or adequately pleaded. The defendant is entitled to a clear enunciation of the fraud case.
I therefore propose to strike out the statement of claim but give the plaintiffs leave to replead within 28 days. In relation to the plaintiff's cross-application for a declaration that the offer of settlement made by the defendant is still open, I repeat what I said this morning. The offer was made and met by a counter-offer.
It was not in form or substance an offer under the rules and therefore lapsed on a cross-offer being made. I therefore dismiss that application.
I propose to reserve the costs of today's hearing.
- Published Case Name:
George and Suzanne Mary Szekely v Catherine Taylor
- Shortened Case Name:
Szekely v Taylor
 QSC 113
19 Apr 2005
No Litigation History