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Queensland Judgments
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  •   Notable Unreported Decision

YIC Industrial Pty Ltd v Spa Investments Pty Ltd

 

[2020] QSC 378

SUPREME COURT OF QUEENSLAND

CITATION:

YIC Industrial Pty Ltd & Anor v Spa Investments Pty Ltd & Ors [2020] QSC 378

PARTIES:

YIC INDUSTRIAL PTY LTD

(ACN 139 276 627)

(first plaintiff/respondent)

RORY ANN QUINN (a bankrupt)

(second plaintiff/respondent)

v

SPA INVESTMENTS PTY LTD

(ACN 134 314 631)

(first defendant/applicant)

PIONEER AUSTRALIA PTY LTD

(ACN 128 784 725)

(second defendant/applicant)

GALL STANDFIELD & SMITH SOLICITORS (a firm)

(third defendant/applicant)

FILE NO:

BS No 5692 of 2020

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

18 December 2020

DELIVERED AT:

Brisbane

HEARING DATE:

12 August 2020

JUDGE:

Davis J

ORDERS:

  1. Judgment for the defendants on the claim.
  2. The parties will be heard on the question of costs.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where the plaintiffs brought proceedings to set aside a judgment of this court which they allege was obtained by fraud – where the defendants apply for summary judgment against the plaintiffs on the basis that               the proceeding is an abuse of process and/or no cause of action is shown – where, in the alternative, the defendants apply to strike out the statement of claim – whether there is a proper evidentiary basis from which fraud could be inferred – whether the proceeding has any real prospect of success – whether there should be summary judgment for the defendants

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE JUDGMENTS AND ORDERS – ACTION TO REVIEW OR SET ASIDE JUDGMENT OR ORDER – WHERE FRAUD, MISREPRESENTATION OR SUPPRESSION OF MATERIAL FACTS ­– where the plaintiffs brought proceedings to set aside a judgment of this court which they allege was obtained by fraud – whether there were two related companies with the same name, one of which was deregistered at the relevant time – where what is effectively pleaded is that by a conspiracy between the defendants the previous proceedings have been prosecuted at trial and defended on appeal in the name of a deregistered company based on security documents bearing the name of the deregistered company – whether there is any evidentiary basis to find that the judgment was obtained by fraud

Uniform Civil Procedure Rules 1999, r 5, r 211, r 292, r 293, r 388, r 667

Agar v Hyde (2000) 201 CLR 552, cited

AKS Investments Pty Ltd v Gazal [2015] QSC 247, cited

AMA v CDK [2009] QSC 287, followed

Argus Administration Pty Ltd v Caldwell & Anor [2018] QSC 281, cited

Bishopsgate Insurance Australia Ltd v Commonwealth Engineering (NSW) Pty Ltd [1981] 1 NSWLR 429, cited

Burrell v The Queen (2008) 238 CLR 218, cited

Bush v National Australia Bank Ltd (1992) 35 NSWLR 390, cited

Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165, cited

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, cited

Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232, cited

Dey v Victorian Railways Commissioners (1949) 78 CLR 62, cited

Elderslie Property Investments No 2 Pty Ltd v Dunn [2007] QSC 192, cited

Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450, cited

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, considered

Gray v Morris [2004] 2 Qd R 118, cited

Haggarty v Wood (No 2) [2015] QSC 244, cited

Hooker Town Developments Pty Ltd v Director of War Service Homes (1973) 47 ALJR 320, cited

Johns v Cosgrove [2002] 1 Qd R 57, cited

McDonald v McDonald (1965) 113 CLR 529, cited

Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336, cited

Moller v Roy (1975) 132 CLR 622, cited

NEPV Solar Pty Ltd (in liq) v White & Anor [2014] QSC 215, cited

Nichols Constructions Pty Ltd v Mt Marlow Pty Ltd & Anor [2016] QSC 1, cited

Pioneer Australia Pty Ltd & Anor v Quinn [2019] QSC 72, related

Quinn & Anor v Pioneer Australia Pty Ltd & Anor [2019] QCA 266, related

Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603, cited

SEQ Tourism Projects Pty Ltd v Pioneer Australia Pty Ltd [2020] QSC 310, cited

Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85, followed

Slee v Warke (1949) 86 CLR 271, cited

Swain v Hillman [2001] 1 All ER 91, cited

TRFCK P/L & Ors v O’Brien Holdings (Townsville) P/L & Ors [2012] QSC 356, cited

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, followed

COUNSEL:

A J H Morris QC with L A Jurth for the plaintiffs/respondents

M D Martin QC with D V Ferraro for the defendants/applicants

SOLICITORS:

A J H Morris QC and L A Jurth appear by direct access brief for the plaintiffs/respondents

Gall Standfield & Smith Solicitors for the defendants/applicants

  1. [1]
    The defendants seek summary judgment[1] against the plaintiffs who sue seeking to set aside a judgment of this court which they allege was obtained by fraud.  That judgment was given in favour of the first and second defendants.  The third defendant is a firm of solicitors who acted for the first and second defendants when they were plaintiffs in the proceedings which resulted in the judgment now under attack.  They are alleged to be parties to the fraud.

Background to the dispute

  1. [2]
    A Mr Anderson controlled Spa Investments Pty Ltd (the first defendant) which I will call “Spa”. 
  2. [3]
    A Mr Stefanowicz controlled two companies, both called “Pioneer Australia Pty Ltd”.  The first bore Australian Company Number (ACN) 073 498 905.  For convenience, I will refer to this as “Pioneer Company 1”.  The second is the present second defendant.  It bears ACN 128 784 725.  I shall refer to that company as “Pioneer Company 2”. 
  3. [4]
    Pioneer Company 1 was incorporated in April 1996.  On 5 December 2007, it changed its name to “ACN 073 498 905 Pty Ltd”.  It was deregistered in June 2008.
  4. [5]
    Pioneer Company 2 was incorporated on 5 December 2007 with the name “Pioneer Australia Pty Ltd” and having ACN 128 784 725.  It remains a registered company.
  5. [6]
    YIC Industrial Pty Ltd (YIC), the present first plaintiff, acquired land in Yeppoon.  On 21 October 2009, YIC entered into a written agreement (the loan agreement) to borrow $3,500,000 on security of a mortgage over the Yeppoon land (the mortgage).  The present second plaintiff, Ms Rory Quinn and her husband Mr John Watson Quinn, guaranteed the loan by written guarantees dated 21 October 2009 (the guarantees).
  6. [7]
    In the loan agreement, the mortgage and the guarantees, the lender appeared as Spa and Pioneer Company 1.  In other words, Pioneer Australia Pty Ltd appeared as “Pioneer Australia Pty Ltd ACN 073 498 905”.  However, by October 2009, when the loan agreement was signed, Pioneer Company 1 was deregistered.  Pioneer Company 2 was trading.  It is common ground that the company which actually advanced the money was Pioneer Company 2. 
  7. [8]
    Mr Lester Gall, solicitor of Gall Standfield & Smith (the third defendant), acted for Spa and Pioneer Company 2 in the advance to YIC.
  8. [9]
    The mortgage was lodged for registration on 21 October 2009 and registered in the Freehold Land Register.[2]
  9. [10]
    In March 2010, another company controlled by Mr and Mrs Quinn, namely Quinnco Pty Ltd (Quinnco), was seeking to borrow $12,630,000 from a company, Angas Securities Limited (Angas).  Mr Brett Ahern was the Queensland Operations Manager for Angas and Mr Quinn dealt with him in relation to the loan to Quinnco.
  10. [11]
    The loan from Angas was approved but conditionally upon a mortgage being taken over the Yeppoon land owned by YIC.  The Angas mortgage would be a second mortgage ranking behind the mortgage registered in favour of Spa and Pioneer Company 1.[3]
  11. [12]
    Mr Quinn contacted Mr Anderson of Spa to inquire his attitude to the second mortgage and to Spa entering a deed of priority in favour of Angas limiting the sum secured by first mortgage.  It seems that Mr Stefanowicz was consulted and in due course Mr Gall was instructed on the matter of the deed of priority. 
  12. [13]
    On 24 and 25 March 2010, correspondence passed between Mr Ahern and Mr Gall.  On 24 March, Mr Ahern, by email, alerted Mr Gall to the fact that a search had shown that Pioneer Company 1 was deregistered.  Mr Gall replied on 25 March 2010 with an email:

“A request to correct the ACN to 128 784 725 will now be lodged at Titles Office.”[4]

  1. [14]
    On 25 March 2010, Mr Ahern sent a draft of the deed of priority to Mr Quinn.  That document described the “First Chargee” as:

“Pioneer Australia Pty Ltd ACN 128 784 725 and Spa Investments Pty Ltd ACN 134 314 631 as tenants in common in equal parts”[5]

  1. [15]
    I can be seen that the draft deed of priority describes one of the “First Chargees” as Pioneer Company 2.  In other words, the document bears the ACN of Pioneer Company 2.
  2. [16]
    Mr Gall, in order to correct the ACN on the Freehold Land Register as he told Mr Ahern he would do, swore a declaration which was lodged with the Registrar of Titles in support of a “Request to record correction of name of a corporation”.  Mr Gall’s declaration was in these terms:

“1. I am the Solicitor for Pioneer Australia Pty Ltd ACN 128 784 725.

  1. On 21 October 2009 a Mortgage was lodged and allocated Dealing Number 712810004 with one of the Mortgagees stated as ‘Pioneer Australia Pty Ltd A.C.N 073 498 905’. The information contained in Item 4 of the Mortgage was shown incorrectly and the above Mortgagee should have been stated as ‘Pioneer Australia Pty Ltd ACN 128 784 725’.
  1. Deposited herewith is a Company Search for Pioneer Australia Pty Ltd ACN 128 784 725 dated 25 March 2010 which evidences the above.”[6]
  1. [17]
    The request sought a correction of the Freehold Land Register so as to show the mortgagee on the mortgage as “Pioneer Australia Pty Ltd ACN 128 784 725” instead of “Pioneer Australia Pty Ltd ACN 073 498 905”.  In due course, the correction was registered on the title showing Pioneer Company 2 as the mortgagee.
  2. [18]
    On 26 March 2010, Mr Ahern sent an email to Mr Quinn listing a number of outstanding issues to be addressed before the Angas advance could be made (the first 26 March email).  One of the issues was:

 Wrong ACN is on title for Pioneer (Company Search on the ACN currently on title shows the company is deregistered). BA/JQ to discuss and find a solution.”[7]

  1. [19]
    The reference in the email to “BA/JQ” must refer to “Brett Ahern” and “John Quinn”.
  2. [20]
    An email was sent by Mr Gall to Mr Ahern and Mr Quinn (the second 26 March email) in these terms:

“We refer to the above and advise that we have been instructed by Pioneer Australia Pty Ltd and SPA Investments Pty Ltd to advise as follows:

  1. There has been no variation to our client’s mortgage recorded against title reference 50784248;
  1. The mortgage secures an amount of $3,500,000.00;
  1. Notice has been received that YIC Industrial Pty Ltd proposes to enter into a second mortgage with Angas Securities Ltd for $12,630,000.00;
  1. Notice has been received that YIC Industrial Pty Ltd proposes to enter a third mortgage with Cardiff Capital Pty Ltd for $512,475.00.”[8]
  1. [21]
    By the terms of the loan agreement with Spa and Pioneer Company 2,[9] the principal was repayable on the first anniversary of the advance of the money.[10]
  2. [22]
    On 21 October 2010, YIC and Mr and Mrs Quinn signed a document acknowledging an extension of time for repayment of the loan.  That was achieved by varying the “due date” under the loan agreement to 21 April 2011.  A request was lodged with the Registrar of Titles making the necessary amendments to the registered mortgage as it appeared on the Freehold Land Registrar.  The request was signed by all parties, including YIC and Mr and Mrs Quinn.  In both the variation document and the request to vary the registered mortgage, the lender is described as Spa and Pioneer Company 2, that is, Pioneer Australia Pty Ltd, was described with ACN 128 784 725.
  3. [23]
    By February 2013, YIC and the guarantors were in default.  It was agreed that YIC would pay Pioneer Company 2 and SPA some money in exchange for forbearance of recovery action.  That arrangement was evidenced by a document styled “Deed of Compromise and Contribution” dated 5 February 2013.  Again, the lender was described as SPA and Pioneer Company 2; that is, showing the ACN of 128 784 725.
  4. [24]
    On 11 March 2014, the mortgagees of the land, Spa and Pioneer Company 2, exercised power of sale.  There was a shortfall after the sale proceeds were appropriated to the outstanding debt. 
  5. [25]
    By this stage, Mr Quinn, who was presumably suffering some other financial difficulty, had made an arrangement with his creditors pursuant to the provisions of Part X of the Bankruptcy Act 1966 (Cth).
  6. [26]
    As Mr Quinn’s affairs were being managed pursuant to the Part X arrangement, he was not sued on his guarantee.  Proceedings were commenced against YIC and Mrs Quinn.[11]  The plaintiffs were named as SPA and Pioneer Company 1.  In other words, “Pioneer Australia Pty Ltd” was described in the proceedings by reference to ACN 073 498 905. 
  7. [27]
    By the time the proceedings were commenced against YIC and Mrs Quinn, Mr Gall had retired from practice.  Mr Liam Reynolds, a solicitor in the employ of the third defendant, had conduct of the matter for SPA and Pioneer Company 2.  In his affidavit filed in the present application, he referred to the fact that the loan agreement, guarantee and mortgage all described Pioneer Australia Pty Ltd as having ACN 073 498 905.  He then deposed:

“21. When I prepared the claim and statement of claim in the first proceeding I mistakenly recorded the wrong ACN for Pioneer Australia Pty Ltd. No issue was ever taken about this during the first proceeding. The original loan agreement, guarantee and mortgage dated 21 October 2009 were admitted on the pleadings.”

  1. [28]
    YIC and Mrs Quinn raised two matters in defence of the proceedings.  The first was that the calculation of the principal and interest as at the date of sale was some $900,000 less than what was claimed.  Secondly, by counterclaim it was alleged that the property had been sold at a price below market value.
  2. [29]
    Bond J heard the trial in September 2018 dismissing the counterclaim and giving judgment for the sum claimed by SPA and Pioneer Company 1.[12]
  3. [30]
    Tendered before Bond J during the trial were various documents, including the loan agreement which described Pioneer Company 1.  Also tendered were the documents extending the loan on 21 October 2010 and 5 February 2013.  As already observed, they correctly described Pioneer Company 2.  No-one involved in the trial apparently noticed the discrepancy with the ACNs on the various documents. 
  4. [31]
    An appeal was filed from the judgment of Bond J.  The appeal was heard by the Court of Appeal on 24 September 2019 and dismissed on 22 November 2019.[13]  Again, the discrepancies with the ACNs appear to have gone unnoticed. 
  5. [32]
    Mrs Quinn is now a bankrupt.  She concedes she cannot prosecute the claim she makes in the present proceedings because she is bankrupt.  YIC is negotiating to take an assignment of Mrs Quinn’s cause of action from her trustee in bankruptcy.  The defendants successfully applied to remove her trustees in bankruptcy to enable the new trustee to investigate the legitimacy of mortgages given over a house owned by Mrs Quinn.[14]  It is unnecessary to delve further into all that.
  6. [33]
    Pioneer Company 2 and Spa have filed a proof of debt in Mrs Quinn’s bankruptcy. 
  7. [34]
    Both Mr and Mrs Quinn have sworn that it was not until March 2020 that they became aware that they had given guarantees to a deregistered company.  The current proceedings were commenced on 27 May 2020.

Fraud as a ground to challenge a perfected judgment

  1. [35]
    In issue here is the power of the court to set aside its own perfected orders.  Apart from challenge by way of statutorily provided appeal, the circumstances in which a judgment may be challenged are few.  This reflects the well-established policy promoting finality in the determination of disputes.[15]
  2. [36]
    Equity has long recognised a jurisdiction to set aside perfected judgments and orders in limited circumstances.[16]  Fraud is one of those exceptional circumstances.  This is now reflected in r 667 of the Uniform Civil Procedure Rules 1999 (UCPR) which provides, relevantly:

667 Setting aside

  1. (1)
    The court may vary or set aside an order before the earlier of the following—
  1. (a)
    the filing of the order;
  1. (b)
    the end of 7 days after the making of the order.
  1. (2)
    The court may set aside an order at any time if—
  1. (a)
    the order was made in the absence of a party; or
  1. (b)
    the order was obtained by fraud; or
  1. (c)
    the order is for an injunction or the appointment of a receiver; or
  1. (d)
    the order does not reflect the court’s intention at the time the order was made; or
  1. (e)
    the party who has the benefit of the order consents; or
  1. (f)
    for a judgment for specific performance, the court considers it appropriate for reasons that have arisen since the order was made. …”
  1. [37]
    Rule 667 is one of a number of rules granting or recognising jurisdiction to set aside or correct a perfected judgment or order.  Rules 388 and 668 also fall into this category.
  2. [38]
    In Wentworth v Rogers (No 5),[17] Kirby P (as his Honour then was),[18] sitting in the New South Wales Court of Appeal, performed an extensive analysis of the principles governing the setting aside of judgments obtained by fraud.  His Honour’s judgment has been followed and applied in Queensland.[19]  There is nothing to suggest that r 667 extends the principles there explained.  In AMA v CDK,[20] Applegarth J accepted that the principles applying to the inherent jurisdiction and the principles relevant to the application of the rule are the same.[21]
  3. [39]
    Application can be made, not only to set aside a final judgment, but also to set aside other orders of the court which would include interlocutory orders.[22]  When a final judgment is sought to be set aside, there is no existing proceeding (it having been finalised by the judgment) so it is appropriate to commence a new proceeding seeking the relief.[23]  That is what has occurred here.  Probably, r 667 provides an alternative procedure allowing the application to be filed in the concluded proceedings.  Nothing turns on that here.
  4. [40]
    In Wentworth v Rogers (No 5), Kirby P identified six principles relevant to setting aside judgments on the basis of fraud.  It is unnecessary to go to any but the first which was expressed by his Honour in these terms:

“First, the essence of the action is fraud. As in all actions based on fraud, particulars of the fraud claimed must be exactly given and the allegations must be established by the strict proof which such a charge requires: Jonesco v Beard [1930] AC 298 at 301; McHarg v Woods Radio Pty Ltd (at 497).”

  1. [41]
    In Clone Pty Ltd v Players Pty Ltd (in liq),[24] a question before the High Court was whether “… the power of a court to set aside its perfected judgment extends to … misconduct by the party who succeeded at trial which does not amount to fraud”.[25]  In answering that question in the negative, the court held:

“55 The general power to set aside a judgment on the ground of fraud required actual fraud. The ‘essence of the action [was] fraud’. The general ground of fraud was not diluted to allow, for instance, the judgment to be set aside for misconduct, accident, surprise, or mistake. This point was made pellucidly in 1867 in Patch v Ward. In that case, as Lord Cairns LJ observed, the application was not brought on the basis of either category of the bill of review - either error of law or fresh evidence discovered since the decree. Rather, it was brought upon the basis that the decree was obtained by fraud. His Lordship explained that it was necessary that the fraud be ‘actual fraud … the person chargeable with it … acting in order to take an undue advantage of some other person for the purpose of actually and knowingly defrauding him’. Similarly, Sir John Rolt LJ, after observing that a particular ground of review in cases of foreclosure was inapplicable, remarked of the claim to set aside the order for fraud:

‘I think, for the reasons which have been given by my learned brother, that the fraud must be actual positive fraud, a meditated and intentional contrivance to keep the parties and the Court in ignorance of the real facts of the case, and obtaining that decree by that contrivance. Mere constructive fraud not originating in actual contrivance, but consisting of acts tending possibly to deceive or mislead without any such intention or contrivance, would probably not be sufficient - at all events I think could not, after such delay as has occurred in this case, be deemed sufficient - to set aside the order which has been made. What, therefore, the Appellant has to do is to satisfy the Court that the decree was obtained by the positive and actual fraud and contrivance of the party obtaining it.’” (emphasis added)

And later:

“57 The narrow scope of the general power of a court to rescind a judgment for fraud was reiterated after the Supreme Court of Judicature Act in The Ampthill Peerage. In the course of considering whether a declaration of legitimacy could be set aside, Lord Wilberforce compared an application to a court to set aside its own judgment and said that equitable fraud or ‘lack of frankness’ would not suffice to set aside a judgment and that ‘only fraud in a strict legal sense will do’. Similarly, Lord Simon of Glaisdale said that ‘lack of frankness or an ulterior or oblique or indirect motive is insufficient’.”[26] (emphasis added)

Principles in relation to summary judgment

  1. [42]
    The application is brought on two alternative bases:
    1. (a)
      for summary judgment under r 293; or
    2. (b)
      to strike out the statement of claim under r 171(2).
  2. [43]
    The grounds under r 171, which are relied upon, are:
    1. (a)
      the proceeding is an abuse of process; and
    2. (b)
      no cause of action is shown.
  3. [44]
    However, no submission, written or otherwise, was made by the defendants that the statement of claim did not disclose a cause of action.  On its face, it does.  The defendants argued that the current proceedings are an abuse of process because the dispute was finally determined in the earlier proceedings.[27] 
  4. [45]
    When seeking summary judgment under r 293, the onus is upon an applicant to show that the plaintiff has no real prospect of success and there is no need for a trial.  If the defendants here cannot succeed in proving those things, then it can hardly be said that the prosecution of the claim is an abuse of process.  In those circumstances, given that the statement of claim does disclose a course of action, a strike out order would be inappropriate.[28]  The real issue here is whether the defendants have made out an entitlement for summary judgment under r 293. 
  5. [46]
    Rule 293 provides for summary judgment for a defendant.  It is in these terms:

293 Summary judgment for defendant

  1. (1)
    A defendant may, at any time after filing a notice of intention to defend, apply to the court under this part for judgment against a plaintiff.
  1. (2)
    If the court is satisfied—
  1. (a)
    the plaintiff has no real prospect of succeeding on all or a part of the plaintiff’s claim; and
  1. (b)
    there is no need for a trial of the claim or the part of the claim;

the court may give judgment for the defendant against the plaintiff for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”

  1. [47]
    Rule 292 provides for summary judgment for a plaintiff.  The principles which govern summary judgment applications for defendants are the same as for summary judgment for plaintiffs under r 292.[29]
  2. [48]
    Both the Supreme Court Rules (SCR) (now repealed) and the UCPR provide for the granting of summary judgment although it is only the UCPR which provided a mechanism whereby a defendant could apply for summary relief.  Upon the introduction of the UCPR, questions arose as to whether the power to grant summary judgment had been widened.  Questions also arose as to the effect of r 5 of the UCPR.[30]  Whatever the difference in language between O 18, O 18A, O 19 of the SCR and rr 292 and 293 of the UCPR, two principles have emerged in the decided cases:
    1. (a)
      The words of rr 292 and 293 must be applied.  The plaintiff must have “no real prospect of succeeding on … [the claim]” and “there is no need for a trial” if judgment is to be achieved for a defendant.[31]
    2. (b)
      In applying the test, regard must be had to the fact that an order for summary judgment denies the party suffering the order from putting its case and so an order should only be made in the clearest of cases.
  3. [49]
    On that second point, Gaudron, McHugh, Gummow and Hayne JJ said in Agar v Hyde:[32]

“57. It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court's jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.”

  1. [50]
    That statement of principle is not new and is established in earlier decisions of the High Court.  In Dey v Victorian Railways Commissioners,[33] Dixon J (as his Honour then was) said:

“A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.”[34] (emphasis added)

  1. [51]
    Following Dey, Barwick CJ said in General Steel Industries Inc v Commissioner for Railways (NSW):[35]

“At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or ‘so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument’; ‘so to speak apparent at a glance’.

As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J (as he then was) sums up a number of authorities in Dey v Victorian Railways Commissioners where he says: ‘A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.’ Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff’s claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed.”[36] (emphasis added)

  1. [52]
    While those, and many other authorities,[37] strongly warn that caution must be exercised, the passages emphasised above demonstrate that a detailed analysis of the case may be justified in determining whether there are real prospects of success and whether a trial is necessary.[38]

The fraud alleged here

  1. [53]
    It is not alleged that there was any fraud in the preparation of the loan agreement, the mortgage or the guarantees.  In other words, it is accepted by the plaintiffs that the insertion of the ACN of Pioneer Company 1 on those documents was an error. 
  2. [54]
    In the course of argument before me, Mr Morris QC for the plaintiffs became concerned that Mr Martin QC, for the defendants, had misunderstood the fraud that was alleged.  Mr Morris QC then stated his client’s case in this way:

“MR MORRIS:  What your Honour was told was that we allege it was deliberate to put the wrong number on the mortgage. We don’t. That’s no part of our case. Indeed, we accept that putting the wrong number on the mortgage was a mistake. That’s obvious. The fraud that we allege occurred within a year after the mortgage was granted when Mr Gall goes to the titles office without telling us ­– indeed, at the same time as he sends us an email saying specifically the mortgage has not been amended but, whilst sending us that email,[39] goes unilaterally to the titles office and says, ‘Please change this mortgage because of a slip’. Had he revealed that there had been that slip there are two potential consequences, one for his client, the present – the parties presently represented by Mr Martin, in that the Quinn’s were arranging a second mortgage, as Mr Martin has mentioned, and if he had sought rectification of the mortgage, taken off the title and put a new mortgage on the title, it would have lost its priority. So Mr Quinn, instead of going through that process - well, it might have lost its priority depending on what the second mortgagee - what position the second mortgagee took. So instead of doing that, he takes this unilateral act without telling us that results in the titles office changing the number on the registered mortgage.”[40]

  1. [55]
    It was completely proper and appropriate for Mr Morris QC to concede that the defendants simply made a mistake in the preparation of the loan agreement, the mortgage and the guarantees.  That concession inextricably leads to the conclusion that the plaintiffs also made a mistake.  YIC clearly intended to enter into a loan agreement with the company that was actually lending it the money.[41]  It intended to mortgage its land to the company that was lending it the money.  Mr and Mrs Quinn intended to guarantee the performance of YIC’s obligations to the company that was advancing YIC the money.  That company was Pioneer Company 2.  By mutual mistake, the wrong ACN was placed on the documents, thus identifying the lender as Pioneer Company 1.  This is a classic case for rectification of the documents to correct the ACN, thus reflecting the true intention of the parties.[42]
  2. [56]
    In Simic & Ors v New South Wales Land and Housing Corporation & Ors,[43] a builder entered into a contract with a statutory corporation and thereby covenanted to perform building work.  That statutory corporation was the New South Wales Land and Housing Corporation.  The corporation’s ABN appeared on the building contract as part of the corporation’s description.  A clause in the building contract obliged the builder to obtain what can conveniently be described as a bank guarantee giving security to the corporation for the builder’s performance of the contract.
  3. [57]
    The builder approached the ANZ Bank.  He obtained the bank guarantee but, by error the guarantee was in favour of a named statutory corporation which had at one stage fulfilled the role now performed by the statutory corporation who contracted with the builder.  The bank guarantee bore not only the second statutory corporation’s name but also its ABN.  The statutory corporation who contracted with the builder ultimately called upon the bank under the guarantee and the bank refused to pay.
  4. [58]
    The statutory corporation who had contracted with the builder raised two arguments.  Firstly it said that on a proper construction of the bank guarantee, it was the beneficiary.  That argument failed.  Secondly, it was argued that the bank guarantee ought to be rectified to show it as the beneficiary.  That argument succeeded.
  5. [59]
    Simic raised more complicated issues than the present case.  That is because the material mistake there was that of the builder and the bank, whereas the error was made against the context of a contractual arrangement between different parties, namely the statutory corporation and the builder.
  6. [60]
    Kiefel J (as her Honour then was), with whom French CJ agreed, referred to various authorities which raised issues as to how the intention of the parties to the contract sought to be rectified should be proved and then observed:

[46] Regardless of these issues it may be said that the traditional approach of the courts, following cases such as Fowler v Fowler, is to grant rectification only if the instrument in question did not reflect the actual common intention of the parties.  That intention is proved in the usual way, by admissible evidence to the requisite standard.  The assessment undertaken by the court may, in the sense referred to above, be described as an objective one.  But the term ‘objective’ is apt to be misunderstood because it can be applied with respect to a quite different process, as the decision in Chartbrook Ltd v Persimmon Homes Ltd[44] shows.

  1. [61]
    Gageler, Nettle and Gordon JJ in a joint judgment put the relevant principles in this way:

[103] Rectification is an equitable remedy, the purpose of which is to make a written instrument ‘conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately’.[45]  For relief by rectification, it must be demonstrated that, at the time of the execution of the written instrument sought to be rectified, there was an ‘agreement’ between the parties in the sense that the parties had a ‘common intention’, and that the written instrument was to conform to that agreement.[46]  Critically, it must also be demonstrated that the written instrument does not reflect the ‘agreement’ because of a common mistake.[47]  Unless those elements are established, the ‘hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties’ cannot be displaced.[48]

[104] The issue may be approached by asking – what was the actual or true common intention of the parties?[49]  There is no requirement for communication of that common intention by express statement,[50] but it must at least be the parties’ intentions, viewed objectively from their words or actions, and must be correspondingly held by each party.[51]

  1. [62]
    For the reasons explored at [55], the common understanding of the parties here is obvious as is their mutual mistake.
  2. [63]
    The statement of claim pleads various consequences said to flow from the fact one of the lenders shown on the loan agreement, mortgage and guarantee was a deregistered company:
    1. (a)
      Pioneer Company 2 did not take a security interest;[52]
    2. (b)
      Mrs Quinn did not guarantee a loan from Pioneer Company 2 to YIC and therefore the guarantee could not be enforced;[53] and
    3. (c)
      the judgment was in favour of the deregistered Pioneer Company 1 and is therefore unenforceable.[54]
  3. [64]
    Once Mr Morris’s proper concession is accepted, neither of the first two consequences follow.  That is because the loan agreement, mortgage and guarantee would obviously be rectified.
  4. [65]
    The third consequence would surely be avoided by the slip rule.[55]
  5. [66]
    However, the plaintiffs can, if they set aside the judgment for fraud, seek to litigate against Pioneer Company 2 the matters of defence and the counterclaim which were unsuccessful before Bond J.  Perhaps some argument could be mounted that it would be an abuse of process for Pioneer Company 2 to pursue Mrs Quinn in the circumstance of the judgment being set aside on the ground of fraud.
  6. [67]
    Mr Morris was right to concede that there could be no allegation of fraud in the preparation and execution of the documents.  What is said to be fraudulent is:
    1. (a)
      The correction of the mortgage in March 2010.  As earlier observed, that was effected by a lodgement of the request and supporting statutory declaration sworn by Mr Gall with the Registrar of Titles.
    2. (b)
      Prosecuting the claim in the name of Pioneer Company 1.

The purported correction

  1. [68]
    What is pleaded is this:

“36. On about 26 March 2010:

  1. (a)
    a Form 14 General Request to record a correction of a name of a corporation was registered on the title of the Pineapple Patch as a dealing bearing registration number 713142580 (‘the Purported Correction’); and
  1. (b)
    the Purported Correction included a sworn declaration of Mr Gall (‘the Gall Declaration’).
  1. The Purported Correction:
  1. (a)
    listed the applicant as the Registered Pioneer;
  1. (b)
    claimed an interest in the Mortgage by the Registered Pioneer;
  1. (c)
    made a request in the following terms:

... the name of the Mortgagee be corrected from PIONEER AUSTRALIA PTY LTD A.C.N. 073 498 905 to PIONEER AUSTRALIA PTY LTD A.C.N. 128 784 725 in accordance with the evidence deposited herewith.

  1. (d)
    was, in the premises, a request for the Registered Pioneer to replace the Deregistered Pioneer as the mortgagee under the Mortgage.
  1. The Gall Declaration relevantly stated:

On 21 October 2009 a Mortgage was lodged and allocated Dealing Number 71281004 with one of the Mortgagees stated as ‘Pioneer Australia Pty Ltd A.C.N. 073 498 905’. The information contained in Item 4 of the Mortgage was shown incorrectly and the above Mortgagee should have been stated as ‘Pioneer Australia Pty Ltd A.C.N.128 784 725’.

  1. In truth and in fact:
  1. (a)
    at no time did the Registered Pioneer have any interest in the Mortgage;
  1. (b)
    at all material times, the Registered Pioneer was, and remains, a stranger to:
  1. (i)
    the Mortgage; and
  1. (ii)
    the Security Deed; and
  1. (c)
    the information contained in item 4 of the Mortgage showing the Deregistered Pioneer as the mortgagee was not incorrect.
  1. In the premises:
  1. (a)
    the interest claimed in the Purported Correction was false; and
  1. (b)
    the matters contained in the Gall Declaration were false.
  1. The Purported Correction and the Gall Declaration were:
  1. (a)
    prepared and lodged by GSS;
  1. (b)
    so prepared and lodged by GSS knowing them to be false;
  1. (c)
    so prepared and lodged upon the instructions of:
  1. (i)
    Mr Anderson, knowing them to be false; and
  1. (ii)
    further or alternatively, Mr Stefanowicz knowing them to be false;
  1. (d)
    known to be false by GSS when it accepted and acted on such instructions;
  1. (e)
    prepared and lodged with the intent to induce Mrs Quinn into believing that:
  1. (i)
    the Advance was secured to the full extent intended by the Mortgage; and
  1. (ii)
    the Guarantee was granted to guarantee the Advance on the footing that the Advance was secured to the full extent of the Mortgage.”
  1. [69]
    Orders are sought setting aside the judgment, and Mrs Quinn’s guarantee, various declarations and damages for fraud.  Damages are sought against all defendants, including Gall Standfield & Smith who are said to be active participants in the correction of the freehold land register and the prosecution of the previous proceedings.
  2. [70]
    So, it is said that Mr Gall, presumably to cover up his error with the ACN’s, fraudulently registered the correction.  The dishonest intention could only be proved here circumstantially.  It is necessary to assess the strength of the circumstantial case, in order to apply the tests in r 293(2)(a) and (b).
  3. [71]
    The circumstantial facts upon which it is sought to draw the inference that Mr Gall acted dishonestly appear to be:
    1. (a)
      Mr Gall did not inform Ms Quinn that he was effecting the correction.
    2. (b)
      Mr Gall’s statutory declaration in support of the correction is, it is submitted, false.
    3. (c)
      The second 26 March email falsely stated that there was no variation to the mortgage when there had been.
    4. (d)
      The alleged motivation for this allegedly fraudulent behaviour was to avoid the mortgage losing its priority to the incoming second mortgagee.
  4. [72]
    The plaintiffs have no real prospect of proving that Mr Gall acted fraudulently in effecting the variation of the ACN for the following reasons:
    1. (a)
      It is obvious, and in fact now conceded by the plaintiffs, that the error in the description of Pioneer Company 2 as Pioneer Company 1 was an innocent mistake, clearly one under which all parties were labouring.
    2. (b)
      The error was identified by Mr Ahern and the statutory declaration of Mr Gall is undoubtedly correct and truthful, namely that Pioneer Australia Pty Ltd should have been described by ACN 128 784 725.  That is clearly so because that reflects the obvious mutual intention of the parties.  The alternative is that YIC and Mr and Mrs Quinn intended to contract with a deregistered company which could not, as a matter of law, contract with them or advance YIC funds.
    3. (c)
      The suggested motivation for the fraud, namely that it was feared that Spa and Pioneer Company 1 (in reality Pioneer Company 2) might lose their priority as mortgagees, is just baseless.  The priority was not under threat.  Mr Ahern pointed out the error to Mr Gall and it was remedied.  Had the error been pointed out to YIC and Mr and Mrs Quinn and they had objected to the correction, rectification would have been ordered.
    4. (d)
      The deed of priority was prepared identifying Pioneer Company 2 with its correct ACN.  That document was sent to Mr Quinn.
    5. (e)
      The two deeds of extension prepared by Mr Gall described Pioneer Company 2 by its correct ACN and those documents were sent by Mr Gall to Mr Quinn.  Mr Gall made no attempt to hide the fact that the ACN on the loan, mortgage and guarantee was wrong.
    6. (f)
      Mr Ahern sent the first 26 March email to Mr Quinn which clearly pointed out that the ACN on the mortgage document related to a deregistered company and that the issue was being sorted.  The email contemplates Mr Ahern and Mr Quinn discussing the error and how to remedy it.  Mr Quinn says that if he read that part of the email, he did not understand the significance of it.  Importantly, though, the issue was being openly discussed between Mr Gall and Mr Ahern and Mr Ahern intended to speak to Mr Quinn about the error.  Certainly, Mr Ahern did not think that it was a secret[56] and neither did Mr Gall as he sent various documents to Mr Quinn thereafter all clearly showing the correct ACN for Pioneer Company 2.
    7. (g)
      The second 26 March email is, in context, not false.  Yes, it asserts that there has been no variation to the mortgage while in fact the register has been corrected.  However, the email was one sent to Mr Ahern and cc’d to Mr Quinn.  Mr Ahern knew that the register was being corrected.  Mr Gall told him that on 25 March 2010.  Mr Ahern is the agent for an incoming second mortgagee who is taking security behind Spa and Pioneer Company 2.  Of course, Mr Ahern needs to know whether there have been any variations to the terms of the mortgage which takes priority over Angas’s second mortgage.  Obviously, as the email is properly understood, Mr Gall is telling Mr Ahern that there have been no variations to the terms.  He is not pretending, contrary to his email the very day before, that the ACN has not been altered on the register.
    8. (h)
      There is also nothing mysterious or sinister about Mr Gall not informing Ms Quinn of the correction to the register.  The mistake with the ACN’s was an obvious one, one of no moment, and Mr Gall was correcting it so that the advance from Angas could proceed.
  5. [73]
    In my view, there is just no evidentiary basis upon which a fraudulent design could be attributed to Mr Gall in causing the Registrar of Titles to correct what was obviously a mutual mistake between the parties.

The previous proceedings[57]

  1. [74]
    What is pleaded in the statement of claim is:

Part 1H - The Antecedent Proceedings

  1. The Antecedent Proceedings were commenced against Mrs Quinn, as defendant, in the names of:
  1. (a)
    Spa, as a plaintiff; and
  1. (b)
    the Deregistered Pioneer, as a plaintiff.
  1. The Antecedent Proceedings sought to enforce the Guarantee against Mrs Quinn.
  1. The solicitors on the record for in the Antecedent Proceedings were GSS:
  1. (a)
    as solicitors for Spa; and
  1. (b)
    purportedly as solicitors for the Deregistered Pioneer.
  1. On about 11 September 2017, YIC became a party to the Antecedent Proceedings as a Plaintiff by Counterclaim.
  1. By the statement of claim in the Antecedent Proceedings, it was alleged that:
  1. (a)
    the Deregistered Pioneer was a company duly incorporated and able to sue in its own name;
  1. (b)
    the Deregistered Pioneer had entered into the Security Deed;
  1. (c)
    the Deregistered Pioneer had entered into and granted the ‘First Variation’;
  1. (d)
    the Deregistered Pioneer had served a notice of default pursuant to section 84 of the Property Law Act;
  1. (e)
    the Deregistered Pioneer had entered into and granted the ‘Second Variation’;
  1. (f)
    the Deregistered Pioneer had entered into a contract for the sale of the Pineapple Patch;
  1. (g)
    the Deregistered Pioneer had given a notice of completion of sale pursuant to section 85 of the Property Law Act;
  1. (h)
    the Deregistered Pioneer had made written demand upon Mrs Quinn under the Guarantee for the balance of the Advance; and
  1. (i)
    Mrs Quinn was indebted to the Deregistered Pioneer.
  1. The true position, throughout the course of the Antecedent Proceedings, was that:
  1. (a)
    the Deregistered Pioneer had been, and remained, deregistered;
  1. (b)
    the Registered Pioneer:
  1. (i)
    had purported to enter into and grant the ‘First Variation’; but
  1. (ii)
    had no lawful capacity to do so;
  1. (c)
    the Registered Pioneer:
  1. (i)
    had purported to serve a notice of default pursuant to section 84 of the Property Law Act; but
  1. (ii)
    had no lawful capacity to do so;
  1. (d)
    the Registered Pioneer:
  1. (i)
    had purported to enter into and grant the ‘Second Variation’; but
  1. (ii)
    had no lawful capacity to do so;
  1. (e)
    the Registered Pioneer:
  1. (i)
    had purported to enter into a contract for the sale of the Pineapple Patch; but
  1. (ii)
    had no lawful capacity to do so;
  1. (f)
    the Registered Pioneer:
  1. (i)
    had purported to serve a notice of completion of sale pursuant to section 85 of the Property Law Act; but
  1. (ii)
    had no lawful capacity to do so;
  1. (g)
    the Registered Pioneer:
  1. (i)
    had purported to make written demand upon Mrs Quinn under the Guarantee for the balance; but
  1. (ii)
    had no lawful capacity to do so; and
  1. (h)
    in the premises set forth in Parts E and F of this pleading, Mrs Quinn was not indebted to the Deregistered Pioneer.
  1. Each of:
  1. (a)
    the statement of claim in the Antecedent Proceedings containing the allegations forth in the last two (2) preceding paragraphs;
  1. (b)
    the ‘First Variation’ referred to above;
  1. (c)
    the notice of default pursuant to section 84 of the Property Law Act referred to above;
  1. (d)
    the ‘Second Variation’ referred to above;
  1. (e)
    the notice of completion of sale pursuant to section 85 of the Property Law Act referred to above; and
  1. (f)
    the written demand referred to above;

was:

  1. (i)
    prepared by GSS;
  1. (ii)
    so prepared by GSS knowing them to be false;
  1. (iii)
    so prepared and filed or served upon the instructions of Mr Anderson, who knew them to be false;
  1. (iv)
    further or alternatively, so prepared and filed or served upon the instructions of Mr Stefanowicz, who knew them to be false; and
  1. (v)
    known to be false by GSS when it accepted and acted on such instructions.
  1. The existence and substance of the Purported Correction and the Gall Declaration were not:
  1. (a)
    pleaded by the plaintiffs in the Antecedent Proceedings;
  1. (b)
    disclosed by the plaintiffs in the Antecedent Proceedings, whether pursuant to the UCPR or otherwise;
  1. (c)
    tendered by the plaintiffs at the trial of the Antecedent Proceedings;
  1. (d)
    the subject of any evidence in the Antecedent Proceedings; and
  1. (e)
    mentioned in the written or oral submissions of the plaintiffs in the Antecedent Proceedings.
  1. The conduct set forth in the last four (4) preceding paragraphs was committed with the intent to induce Mrs Quinn into believing that:
  1. (a)
    the Advance was secured to the full extent intended by the Mortgage;
  1. (b)
    the Guarantee was granted to guarantee the Advance on the footing that the Advance was secured to the full extent of the Mortgage; and
  1. (c)
    the Deregistered Pioneer or the Registered Pioneer had standing to enforce the Guarantee by means of the Antecedent Proceedings.”
  1. [75]
    It is true that the proceedings were conducted in the name of Pioneer Company 1.  Some of the documents issued or served before the proceedings were commenced bore the ACN for Pioneer Company 1 and some bore the ACN for Pioneer Company 2.   What is effectively pleaded is that by a conspiracy between the solicitors, Mr Anderson and Mr Stefanowicz, security documents have been enforced in the name of the deregistered Pioneer Company 1 and then the entire proceedings have been prosecuted at trial and defended on appeal in the name of a deregistered company in order to cover up the fact that there was an error in the description of the lender in the documents.  That extraordinary case is sought to be mounted, notwithstanding the correspondence between Mr Ahern and Mr Gall openly discussing the error and notwithstanding that documents bearing the correct ACN of Pioneer Company 1 had been prepared and sent to Mr Quinn and notwithstanding the concession now properly made by Mr Morris QC that the inclusion of the wrong ACN in the security documents was just a genuine error.
  2. [76]
    Mr Reynolds, as already observed, swore that he recorded the wrong ACN on the court documents.  Mr Morris QC submitted that “Mr Reynolds does not explain how the error came about”,[58] and that there is no affidavit by Mr Gall.[59]
  3. [77]
    Neither Mr Reynolds nor Mr Gall need explain the obvious.  Mr Gall has made a mistake in recording the ACN on the loan documents.  That is now admitted by the plaintiffs.  Mr Reynolds has been misled by the documents.  The alternate inference that Mr Reynolds would have deliberately launched and prosecuted proceedings on behalf of a deregistered company which would result in any judgment being worthless is absurd.
  4. [78]
    Mr Morris QC submitted that it was significant that Mr Gall’s declaration and the variation request were not disclosed in the proceedings.  Those documents were not “directly relevant to an issue in the proceeding”.[60]  In any event various documents (notably the deeds of extension) which bore the ACN for Pioneer Company 2 were disclosed.  There is no evidence of a cover up.

Conclusions

  1. [79]
    There is no proper evidentiary basis identified from which fraud could be inferred.
  2. [80]
    The proceeding has no real prospect of success and there is no need for a trial.
  3. [81]
    Judgment should be given for the defendants.
  4. [82]
    That will still leave the second defendants with a judgment in favour of Pioneer Company 1.  It is a mystery to me why rectification of the loan agreement, mortgage and guarantees has not been sought.  It is also puzzling that an order has not been sought under r 388 of the UCPR correcting the ACN which appears on the orders made in the original proceedings.
  5. [83]
    Perhaps it is the case that such remedies are now not necessary.  The rights of Spa and Pioneer Company 2 (misdescribed as Pioneer Company 1) under the mortgage have been exercised.  The land has been sold and the money applied to the debt.  The only outstanding matter is proof of the shortfall in Mrs Quinn’s bankruptcy.  The trustee in bankruptcy may simply admit a proof of debt lodged by Pioneer Company 2.  In any event, all that is a matter for Pioneer Company 2.
  6. [84]
    I will hear the parties on the question of costs.

Orders

  1. Judgment for the defendants on the claim.
  2. The parties will be heard on the question of costs.

Footnotes

[1] Uniform Civil Procedure Rules 1999, r 293.

[2] Land Title Act 1994, Part 2, Division 2.

[3] At this stage the mortgagee was described as using Pioneer Company 1’s ACN.

[4] Affidavit of J Quinn sworn 11 August 2020, exhibits page 223.

[5] The email is at page 226 of the exhibits to Mr Quinn’s affidavit and the deed of priority is at pages 227-238.

[6] Affidavit of J Quinn sworn 11 August 2020, exhibits page 250.

[7] Affidavit of J Quinn sworn 11 August 2020, exhibits page 243.

[8] Affidavit of J Quinn sworn 11 August 2020, exhibits page 256.

[9] Who was wrongly described as Pioneer Company 1.

[10] See clause 1(g), definition of “due date” and clause 3.

[11] Proceeding number BS 1550 of 2017.

[12] Pioneer Australia Pty Ltd & Anor v Quinn [2019] QSC 72.

[13] Quinn & Anor v Pioneer Australia Pty Ltd & Anor [2019] QCA 266.

[14] Pioneer Australia Pty Ltd v Bettles as Trustee of the Bankrupt Estate of Quinn [2020] FCA 1788.

[15] Burrell v The Queen (2008) 238 CLR 218 at 223, [16].

[16] Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165 at 187, [43] and [44].

[17] (1986) 6 NSWLR 534.

[18] With whom Hope and Samuels JJA agreed.

[19]Johns v Cosgrove [2002] 1 Qd R 57 at 94; SEQ Tourism Projects Pty Ltd v Pioneer Australia Pty Ltd [2020] QSC 310 (proceedings related to the present case); AKS Investments Pty Ltd v Gazal [2015] QSC 247; NEPV Solar Pty Ltd (in liq) v White & Anor [2014] QSC 215.

[20]  [2009] QSC 287.

[21]  See [21].

[22]Moller v Roy (1975) 132 CLR 622 at 625.

[23]McDonald v McDonald (1965) 113 CLR 529 at 533, Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538 and Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165 at 182-183, [32].

[24]  (2018) 264 CLR 165.

[25]  At [1].

[26]  Citations omitted.

[27]  T 1-9, lines 10-15.

[28]  As to the interaction between r 171 and r 273 see TRFCK P/L & Ors v O’Brien Holdings (Townsville) P/L & Ors [2012] QSC 356 at [23]–[30] and Haggarty v Wood (No 2) [2015] QSC 244 at [62]–[82].

[29]Argus Administration Pty Ltd v Caldwell [2018] QSC 281.

[30]Gray v Morris [2004] 2 Qd R 118 considering the judgment of Lord Woolf in Swain v Hillman [2001] 1 All ER 91.

[31]Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at 234, [11] and 237, [17], Gray v Morris [2004] 2 Qd R 118 at 133, [46].

[32]  (2000) 201 CLR 552.

[33]  (1949) 78 CLR 62.

[34]  At 91.

[35]  (1964) 112 CLR 125.

[36]  At 129-130.

[37]  For example, Gray v Morris [2004] 2 Qd R 118 at 126, 127 and 133; Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at 233, [3] and 236-237, [17].

[38]  For examples of the operation of the UCPR see Haggarty v Wood (No 2) [2015] QSC 244 at [82]; Elderslie Property Investments No 2 Pty Ltd v Dunn [2007] QSC 192; and Nichols Constructions Pty Ltd v Mt Morton Pty Ltd & Anor [2016] QSC 1.

[39]  This is a reference to the second 26 March email.

[40]  T 1-14.

[41]  Contrary to the submission of Mr Morris QC at T 1-15.

[42]Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450 at 461; Hooker Town Developments Pty Ltd v Director of War Service Homes (1973) 47 ALJR 320 at 323-4; Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336; Simic v New South Wales Land and Housing Corporation & Ors (2016) 260 CLR 85.

[43]  (2016) 260 CLR 85.

[44]  [2009] AC 1101.

[45]Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336 at 350; see also Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 346.

[46]Slee v Warke (1949) 86 CLR 271 at 281; Maralinga (1973) 128 CLR 336 at 350-351.

[47]Maralinga (1973) 128 CLR 336 at 350-351.

[48]Maralinga (1973) 128 CLR 336 at 350-351.

[49]Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at 642, [182] and [185].

[50]Bishopsgate Insurance Australia Ltd v Commonwealth Engineering (NSW) Pty Ltd [1981] 1 NSWLR 429 at 431; Bush v National Australia Bank Ltd (1992) 35 NSWLR 390 at 405-406.

[51]Bush v National Australia Bank Ltd (1992) 35 NSWLR 390 at 405-406.

[52]  Paragraph 28 of the statement of claim.

[53]  Paragraphs 33–35 and 62 of the statement of claim.

[54]  Paragraph 15.

[55]Uniform Civil Procedure Rules 1999, r 388.

[56]  He told Mr Quinn of the problem and intended to discuss it with him.

[57]  These are the proceedings tried by Bond J.

[58]  Written submissions paragraph 32(a).

[59]  Written submissions paragraph 32(c).

[60]Uniform Civil Procedure Rules 1999, r 211; the issues are described in paragraph [27] of these reasons.

Close

Editorial Notes

  • Published Case Name:

    YIC Industrial Pty Ltd & Anor v Spa Investments Pty Ltd & Ors

  • Shortened Case Name:

    YIC Industrial Pty Ltd v Spa Investments Pty Ltd

  • MNC:

    [2020] QSC 378

  • Court:

    QSC

  • Judge(s):

    Davis J

  • Date:

    18 Dec 2020

  • White Star Case:

    Yes

Appeal Status

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