Renard Partners P/ L & Anor v Quinn Villages P/L
[2001] QCA 538
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- Unreported Judgment
- Appeal Determined (QCA)
- Renard Partners P/ L & Anor v Quinn Villages P/L[2001] QCA 538
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Renard Partners P/ L & Anor v Quinn Villages P/L[2001] QCA 538
Renard Partners P/ L & Anor v Quinn Villages P/L[2001] QCA 538
SUPREME COURT OF QUEENSLAND
CITATION: | Renard Partners P/ L & Anor v Quinn Villages P/L [2001] QCA 538 |
PARTIES: | RENARD PARTNERS PTY LTD ACN 075 717 234 SEAMARK PTY LTD ACN 058 624 516 (applicants/appellants) v QUINN VILLAGES PTY LTD ACN 000 776 189 (respondent/respondent) |
FILE NO/S: | Appeal No 6008 of 2001 SC No 4260 of 2001 |
DIVISION: | Court of Appeal |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 30 November 2001 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 26 November 2001 |
JUDGES: | McPherson and Thomas JJA, Mullins J Judgment of the Court |
ORDER: | Appeal dismissed with costs |
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – MISCELLANEOUS PROCEDURAL MATTERS – DECLARATIONS – JURISDICTION – WHETHER A REAL DISPUTE BETWEEN PARTIES – where the parties were engaged in a joint venture agreement – where the trial judge made declarations requested by the respondent – whether the subject matter of the declarations was hypothetical – where there had been no breach or threatened breach of the agreement - utility of declarations – where there was sufficient utility to justify making of declarations Ainsworth v CJC (1992) 175 CLR 563, considered Re Clay [1919] 1 Ch 66, considered Heery v CJC [2000] QCA 511, Appeal Nos 3594 and 3939 of 2000, 15 December 2000, considered Midland Bank v Laker Airways [1986] QB 689, considered Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1972] 2 AC 438, considered |
COUNSEL: | P A Freeburn for the appellants S Couper SC for the respondent |
SOLICITORS: | Blake Dawson Waldron for the appellants Nicol Robinson Halletts for the respondent |
- THE COURT: This is an appeal against declarations of parties’ rights under a joint venture agreement.
- It will be convenient to refer to the appellants as “Renard” and to the respondent as “Quinn”. Each of them had a 50 per cent share or entitlement in the venture, which involved the development of land. Under clause 21.1 of that agreement, which is dated 11 April 2000, the parties agreed that, in order to equalise their capital contributions, the appellant would pay to the respondent $3M in accordance with the provisions of clause 21. Clause 21.2 obliged Renard to make the contribution from proceeds of sale of land under the joint venture. A formula was provided, which for present purposes may conveniently be summarised as payments by Renard to Quinn of two fifths of Renard’s net entitlement on sales of the land.
- The remainder of clause 21 is in the following terms:
“21.3 The contribution shall be made by Renard within twelve (12) months from the date of execution of this Agreement.
21.4 If the contribution has not been made within twelve (12) months of the date of execution of this Agreement then the shortfall (“Balance Contribution”) is to be made by Renard procuring the release of freehold land under the Leasehold Joint Venture equivalent in value to the Balance Contribution for Quinn’s sole use and benefit. For avoidance of doubt:-
- when calculating the value of the land, all freeholding costs must be taken into account;
- when calculating the value of the land, Quinn must receive a “credit” for any interest it already holds in the land; and
- any dispute shall be referred to an independent expert valuer, whose determination in absence of manifest error, shall be binding.
21.5 Nothing in submission-clause 4 shall prevent Renard from making any of the Balance Contribution by way of cash payment.
21.6 If the total values of the Leasehold Land released for Quinn’s benefit is less than the Balance Contribution, then Renard must make that shortfall by way of a cash payment to Quinn.”
- Renard did not pay the $3M within the first year and apparently elected to make payment by the method stated in clause 21.4. By May 2001 there was some contention between the parties in relation to the manner in which the obligations stated in clause 21.4 would be satisfied. The contention included the means by which and the time by which Renard should procure the release of freehold land for Quinn’s sole use and benefit and whether that could be satisfied short of Quinn obtaining freehold title to the land.
- In May 2001, both parties brought cross-applications seeking declarations concerning their rights under the agreement in certain events. By the time the matter came on before Holmes J on 31 May 2001 there was virtually no contention in relation to the declarations sought by Renard, although some amendment was made to them as the matter proceeded. There was in the end no opposition to the making of the following declarations which are similar to those initially sought by Renard.
“1. A declaration that, on its true construction, clause 21.4 of the joint venture agreement between the applicants and the Respondent (the “agreement”) obliges the applicants to procure the release of freehold land under the Leasehold Joint Venture (as defined in the agreement) for the Respondent’s sole use and benefit within a reasonable time after 11 April 2001 subject to earlier cash payment within the meaning of clause 21.5 before the expiry of a reasonable time.
2. A declaration that, on its true construction, clause 21.4 of the joint venture agreement between the applicants and the Respondent (the “agreement”) obliges the applicants to procure the release of freehold land under the Leasehold Joint Venture (as defined in the agreement) for the Respondent’s sole use and benefit within a reasonable time after 11 April 2001 subject to earlier cash payment within the meaning of clause 21.5 before the expiry of a reasonable time.
- However her Honour declined to make the declarations sought on Quinn’s application, partly it would seem because of a perceived ambiguity in paragraph 3 of Quinn’s application and partly because her Honour understood that there was no challenge offered by Renard to the declarations sought in paragraph 4 of Quinn’s application. The position taken by counsel for Renard was that:
- if clause 21.4 was not fulfilled within a reasonable time, then Renard was obliged to pay Quinn the sum of $3M; and
- fulfilment of clause 21.4 required delivery of freehold title to the land to Quinn.
- Her Honour intimated that she considered that the parties could have achieved a similar result out of court and that the parties were “equally at fault”. Accordingly her Honour indicated that she would not make any order for costs on either application. We note in passing that the formal order in the appeal record, erroneously it would seem, includes an order that Quinn pay Renard’s costs of that application.
- Following the making of the above declaration on 31 May, Quinn’s solicitors wrote a rather lengthy letter to Renard’s solicitors recapitulating statements made at the hearing and endeavouring to secure agreement as to the outer limits of the “reasonable time” by which the freehold land would have to be released. Ministerial consent was necessary for the release of the land, and that this introduced an element of arguability in relation to the question of reasonable time. This provoked a response from Renard’s solicitors, characterising counsel’s statements at the hearing as “submissions” rather than as concessions, giving Quinn’s solicitors no confirmation on the matters upon which confirmation had been sought and no assurance that a contrary position would not be later adopted.
- Quinn’s solicitors then brought an application before Holmes J on 7 June 2001 which in turn led to the declarations which are the subject of the present appeal, namely that:
“1. If the respondent seeks to meet its obligations under clause 21 of the joint venture agreement by use of the mechanism contained in clause 21.4, those obligations will not be fulfilled unless the applicant obtains unencumbered freehold title to the land referred to in the clause.
- If the respondents have not procured the said title to the said land and transferred it to the applicant within a reasonable time after 11 April 2001, the respondents are obliged pursuant to clause 21.6 of the joint venture agreement to pay to the applicant the sum of $3,000,000.00.”
No order was made for costs of the application.
- There is no contention advanced to this court that declarations that her Honour made are incorrect. The complaint made on Renard’s behalf is that the subject matter of the present declarations is hypothetical and that there is no real controversy between the parties in relation to them. Reliance was placed upon Re Clay[1] Midland Bank v Laker Airways,[2] and Ainsworth v Criminal Justice Commission.[3] In the first-mentioned case the Court of Appeal considered that a potential claimant under an indemnity who reserved his rights but made no claim had not acted to create a real dispute of a kind in relation to which the court should make a declaration of right. Further in the Laker Airways case Lawton LJ said:
“As the liquidator has never threatened to take proceedings against either bank in the English courts, on the authority of Re Clay, there is no jurisdiction to make the declaration asked for. The claim for it should be struck out”.
- Counsel for Renard accordingly submitted that there needs to be a “proper contradictor”. However we do not consider that the court’s jurisdiction to make declarations of right is necessarily conditional upon the identification of an unambiguous denial of the right asserted. In Russian Commercial and Industrial Bank v British Bank for Foreign Trade Limited[4] Lord Sumner stated:
“For many years it has been accepted practice in cases in the commercial list to hear and determine claims for a declaration of right, when a real and not a fictitious or academic question is involved, and is in being between two parties, in order that they may know what business courts to take without having to run the risk of acting and finding themselves liable for damages, when at least the matter is brought to court”.
- The appellant’s main submission both below and here is that there is no dispute in existence between the parties. It is however of some interest to note that both parties initially sought cross-declarations, and that the declarations which Renard persuaded her Honour to make to some extent overlapped with the subject matter of the declarations requested by Quinn. There is no doubt that the court’s jurisdiction to make declarations of the present kind was enlivened by the applications initially before her Honour. It was not destroyed by later concessions, either in argument or correspondence. The declarations that her Honour has now made have narrowed the potential range of disputes between the parties, leaving only one obvious unresolved issue, namely determination of whether and when a reasonable time has elapsed. We do not say that the parties will not distil other points of controversy if they are so minded, but in our opinion the parties were sufficiently in dispute to justify the court in entertaining the declaration.
- The essential question in the present case is whether in the circumstances there was sufficient utility in the making of the declarations to justify the order. Renard’s solicitors refused to agree that they would not raise such matters in the future. In the absence of an indication from Renard that it did not propose to challenge the propositions sought in the declarations at some future time, we think that there was some utility in having those issues determined. The utility might be slight, but the declarations narrow the areas of possible contention with inevitable delay, at a future time. It is also possible that Quinn is starting at shadows, but the learned chamber judge had the benefit of seeing the parties in conflict on two occasions, and we cannot say that her Honour erred in exercising her discretion to grant the relief sought. It is true that no breach has occurred or been threatened, but those are questions that arise on injunctions, and are not the tests that need to be satisfied in order to make a declaration of right. It seems to us that there is sufficient utility to justify the making of the present declarations.
- In upholding this decision we would not wish to encourage the undue proliferation of separate determination of issues. However it is true that in recent times courts have become more willing to determine such issues than formerly, but there are both benefits and burdens in piecemeal litigation, as is recognised in Heery v CJC:[5]
“Courts are well aware of the difficulty of tidy subdivision of a case into discrete points or questions. However the fact remains that over the past two decades, and particularly over the last decade, considerable savings and efficiencies have been achieved by a greater willingness on the part of courts to determine particular questions and issues and to do so in a final way. This has been reflected not only in the practice of the courts but in rules of court. The change of approach between Evans Deakin Industries Ltd v Commonwealth in 1983 ([1983] 1 Qd R 40, 45) and Re Multiplex Constructions Pty Ltd in 1999 ([1999] 1 Qd R 287) is significant.”
- Whilst acknowledging the ineptitude of a declaration of right in respect of purely hypothetical or abstract questions, in circumstances like the present we do not think that any principle of law or practice obliged her Honour either to make a declaration or decline to make a declaration. Such a decision must be essentially based upon the primary judge’s perception of utility or lack of it. The present appeal is in our view tantamount to an appeal against the exercise of a discretion on a matter of practice or procedure and no error has been demonstrated on the part of the learned primary judge.
Order
- The appeal is dismissed with costs.