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  • Unreported Judgment

James v Hill


[2007] QSC 258





James v Hill & Anor [2007] QSC 258


(First Defendant)
(Second Defendant)


155 of 2006






Supreme Court, Cairns


9 July 2007




2, 16 March 2007


Jones J


1. The plaintiff’s application dated 5 February 2007 and defendant’s application dated 26 February 2007 are each dismissed.

2. Costs of and incidental to each application are reserved.


PROCEDURE – PROCEDURE UNDER RULES OF COURT – PLEADINGS – APPLICATION TO STRIKE OUT – PARTICULARS – non-admissions – direct explanation of denials – whether refusal to address particulars evasive


Mr D Fraser QC for the plaintiff

Mr C Ryall for the second defendant


Williams Graham & Carman for the plaintiff

Brian Bartley & Associates for the second defendant

  1. In December 2001 the plaintiff agreed to sell to the first defendant his grazing property “Oakley Station” together with plant, equipment, brands, earmarks and livestock for the price of $2,080,000. The first defendant, who was in private practice as a solicitor, described himself as a “long and valued friend” of the plaintiff. He had, at that time, some of his own livestock pastured on the plaintiff’s property.
  1. The first defendant clearly enough intended to act on his own behalf in the transaction preparing the necessary documents and arranging his own finance. The purchase price was to be met by an advance from the Commonwealth Bank of Australia of $1.8 million secured by registered first mortgage over the real property and a Bill of Sale over the livestock and other assets.  The balance was to be lent by way of a vendor finance agreement by the plaintiff to the first defendant.  The terms of the vendor finance loan was to be for three years secured by a second mortgage over Oakley Station and other proposed securities.
  1. The second defendant is a solicitor who practises in Longreach, the area where Oakley Station is located. He was retained to give independent advice to the plaintiff about the security arrangements for the vendor finance. This retainer was initiated by a letter dated 4 December 2001 from the first defendant to the second defendant (ex 1). This letter gave details of the proposed securities for the vendor finance and enclosed copies of the Vendor Finance Agreement (ex 2) and the security documentation in triplicate, one of which was to be signed and returned to the first defendant. The operative terms of the letter were as follows:-

“Please advise David, as you see fit, as an independent legal advisor to him.  I will be paying your account, however that is because of an arrangement between David and me.  You remain David’s source of legal advice.  There is no fiduciary relationship between you and me, other than that you should advise David candidly.”

  1. The events that followed the receipt of that letter are largely uncontroversial. On 6 December 2001 the plaintiff met with the second defendant at the latter’s office to discuss the plaintiff’s position and, in particular, the security arrangements for the loan. In the course of that discussion, a conference telephone call was had with the first defendant who was then in Charters Towers.  The topics discussed in that conference call have been admitted in the pleadings and include a statement that the second defendant was retained to advise in relation to the proposed vendor finance loan; that the first defendant would continue to act for the plaintiff in relation to the contract; and, that the security required was as per the amended Vendor Finance Agreement (“the agreement”).  During the call the first defendant agreed to prepare, execute and send to the second defendant a Bill of Sale in accordance with paragraph 5 of the agreement and to obtain Deeds of Priority from the Bank of Queensland and the Commonwealth Bank respectively, imposing limitations on the extent of the security held by each of them.  With that undertaking by the first defendant having been given, the plaintiff executed the relevant transfer documents and they were returned to the first defendant on 7 December 2001.
  1. On 18 December 2001 the first defendant himself executed the transfer documents and sent a letter to the plaintiff with a copy to the second defendant to this effect. On 20 December 2001 the sale was completed. By letter dated 21 December 2001 the first defendant sent to the second defendant the Bill of Sale executed by him in accordance with clause 5 of the Vendor Agreement.  The document was not however seen by the second defendant until 2 January 2002.  It was not until some months later the second defendant arranged for the stamping of the document and its registration at the Department of Fair Trading.  The promised Deeds of Priority had not been obtained by the first defendant prior to completion and the delay in the registration of the Bill of Sale resulted in the financial institutions having priority over the security provided by the Bill of Sale.  As a consequence the plaintiff’s hoped for security was postponed and he has suffered considerable loss.
  1. The essential issue between the parties is the scope of the second defendant’s duty in the circumstances and whether there has been any breach of that duty.
  1. By this application and cross-application, the parties seek, inter alia, orders to strike out parts of the others’ pleading. Some of the other matters raised in the applications have been resolved or have been refined to the extent that the parties can work towards their resolution. The remaining matter which I am now asked to resolve concerns the adequacy of the second defendant’s response to the plaintiff’s assertion that after the meeting of 6 December 2001 the second defendant, in a general way, acted as solicitor for the plaintiff. This part of the plaintiff’s claim is framed in the following terms:-

“28.  The second defendant thereafter acted as the plaintiff’s solicitor in respect of the sale of the sale property, the vendor finance and completion of the contract.

  1. In particular, the second defendant on behalf of the plaintiff:
  1. Sent to the first defendant the proposed sale documents executed by the plaintiff on or about 7 December 2001;
  1. Sought from the first defendant a Bill of Sale over the plant, equipment and livestock at Oakley Station and a second mortgage over the Charters Towers premises on or about 7 December 2001;
  1. Engaged in further communications with the first defendant concerning completion of the contract;
  1. Engaged in communications with third parties concerning completion of the contract.”
  1. By his defence, the second defendant denies the allegation in paragraph 28 because–
  1. he was retained to advise the plaintiff in relation to security documentation;
  1. he was not otherwise retained to advise the plaintiff or to act for him in relation to the proposed sale; (para 8 of the defence);

and further -

  1. the first defendant acted as the plaintiff’s solicitor (para 32 of the defence).
  1. The present controversy centres upon the second defendant’s alleged conduct after 7 December 2001 when he sought the provision of the Bill of Sale which had been omitted from the bundle of security documents and engaging in further communications with the first defendant and third parties. That other conduct was not particularised in the Statement of Claim but has been the subject of requests for Further and Better Particulars and the exchange of correspondence. This has resulted in the parties now accepting that the conduct included the following:-
  1. Letter Hill & Staff to Skewes & Dempster enclosing completion details for settlement of the sale of Oakley on he basis that such settlement would proceed on 20 December 2001.
  1. Facsimile transmission from Skewes & Dempster to Hill & Staff re bill of sale over stock and plant and equipment at Oakley and second bill of mortgage over property at Mosman Street Charters towers.
  1. Letter Hill & Staff to Skewes & Dempster enclosing Bill of Sale and Form 2 Mortgage.
  1. Letter Hill & Staff to Skewes & Dempster enclosing insurance details.
  1. Letter Skewes & Dempster to Office of State Revenue enclosing Bill of Sale and Bill of Mortgage for stamping of the Bill of Sale.
  1. Assessment Notice from Office of State Revenue directed to Skewes & Dempster.

16/05.2002Letter Skewes & Dempster to Office of Fair Trading enclosing Bill of Sale for registration.

  1. Letter Office of Fair Trading to Skewes & Dempster
  1. Letter Skewes & Dempster to Office of Fair Trading enclosing amended Application to Register stock mortgage
  1. Letter Skewes & Dempster to Department of Natural Resources enclosing Form 2 Mortgage for registration.
  1. Telephone discussion by Skewes & Dempster with Graham Lewridge, CBA in respect of the securities registered.
  1. Letter Boulton Cleary & Kern re lodgement of mortgage.
  1. Letter Skewes & Dempster to Department of Natural Resources enclosing Amended Form 12 Bill of Mortgage.
  1. Letter Boulton Cleary & Kern to Skewes & Dempster re registration of Mortgage.[1]
  1. The second defendant denies that some of these actions fall within the scope of his retainer (as he perceives it to be). The plaintiff seeks the second defendant’s explanation of the denial – specifically a statement as to the basis upon which he was then acting. The plaintiff argues that the explanation is required by rule 166(4) of the UCPR which is in the following terms:-

“(4) A party’s denial or non-admission of an allegation of fact must be accompanied by a direct explanation for the party’s belief that the allegation is untrue or can not be admitted.”

  1. The plaintiff submits that second defendant’s refusal to give an explanation is evasive. The second defendant, in his statement of contentions, asserts that his retainer was defined by the letter dated 4 December 2001 (ex 1) and his duties were fully discharged by giving the advice he did on 6 December 2001. He argues that even if some of his actions were outside the perceived scope of the retainer and gives rise to other duties, that is a matter of law and not pleading. All the facts relevant to this period are known and therefore the factual basis for the plaintiff’s argument is known. Thus, the pleading cannot be said to be evasive because the second defendant cannot lead any different evidence.
  1. Mr D Fraser of Queen’s Counsel for the plaintiff relies particularly on the remarks of White J in Ballesteros v Chidlow & Anor (No. 2)[2] in respect of r 166(4) –

“[20]  The requirement to give “a direct explanation” for a party’s belief in the denial or non-admission raises significant difficulties for a pleader.  The governing general principle in respect of pleadings set out in r 149(1)(b) that a pleading must contain a statement of the all the material facts “but not the evidence by which the facts are to be proved” is an apparent conflict with the “direct explanation” requirement in r 166(4) if it be accepted that “an allegation of fact” in r 166 must be regarded as synonymous with “the material facts” in r 149.  The mischief of evasive denials or non-admissions which the rule seeks to remedy is, or was, well-known.  Common sense clearly must prevail so that the “direct explanation” must be as brief as is consistent with a statement of material facts but not evidence although I note Helman J’s observation in Doelle v Watson of 26 June 2002 at p 14.

[21]  Not only need there be an understanding of the difference between material facts and the evidence by which they are to be proved but also material facts and particulars of those facts.  Although particulars are part of the pleading and may be struck out for the same reason, r 162, it is a well-established principle of pleading that particulars are not to be pleaded to, Turnover v Bulletin Newspaper Pty Ltd (1974) 131 CLR 60 at 80 per Barwick CJ.  His Honour said “The defendant by not canvassing the particulars does not admit them, nor does he admit their relevance to the establishment of a cause of action or any part of it.”


  1. In the context of these applications there is no dispute as to the facts. In those circumstances the second defendant’s explanation as to why he acted as he did is of no relevance to defining either the scope of his duty in the circumstances, nor as to whether there was any breach of that duty. The state of his mind or the justification for his actions is not a material fact upon which any legal obligation can be determined. The application of r 166 relates to factual issues and not to contentions as to duties arising from known or agreed facts.
  1. I am satisfied that the issues upon which the parties are engaged are sufficiently defined in the pleadings and now, more particularly, in the statements of contention placed before me. Consequently it is not necessary to allow either application to strike out the parts of the respective pleadings which have been referred to in argument. Each application will therefore be dismissed.
  1. The costs of both applications will be reserved to take account of the fact that other matters were raised which have been, or are being dealt by agreement.


  1. The plaintiff’s application dated 5 February 2007 and defendant’s application dated 26 February 2007 are each dismissed.
  1. Costs of and incidental to each application are reserved.


[1] Amended Further & Better Particulars of Statement of Claim – ex “GCP-1” affidavit of Gregory Parr filed 16 March 2007

[2] (2005) QSC 258


Editorial Notes

  • Published Case Name:

    James v Hill & Anor

  • Shortened Case Name:

    James v Hill

  • MNC:

    [2007] QSC 258

  • Court:


  • Judge(s):

    Jones J

  • Date:

    09 Jul 2007

Litigation History

No Litigation History

Appeal Status

No Status