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Partram Developments Pty Ltd v Registrar of Cooperative Housing Societies[2025] QCA 13

Partram Developments Pty Ltd v Registrar of Cooperative Housing Societies[2025] QCA 13

SUPREME COURT OF QUEENSLAND

CITATION:

Partram Developments Pty Ltd v The Registrar of Cooperative Housing Societies [2025] QCA 13

PARTIES:

PARTRAM DEVELOPMENTS PTY LTD

ACN 106 229 672

(first appellant)

ROSS GLEN FEATHER

(second appellant)

v

THE REGISTRAR OF COOPERATIVE HOUSING SOCIETIES

(respondent)

FILE NO/S:

Appeal No 12651 of 2024

SC No 195 of 2019

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane – [2024] QSC 191 (Hindman J)

DELIVERED ON:

18 February 2025

DELIVERED AT:

Brisbane

HEARING DATE:

6 February 2025

JUDGES:

Flanagan and Boddice JJA and Williams J

ORDER:

The appeal be dismissed with costs.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE – VARIATION AND SETTING ASIDE OF CONSENT JUDGMENT OR ORDER – GENERAL PRINCIPLES – where the appellants were granted leave to discontinue the proceedings below – where the parties entered into a consent order to that effect – where the appellants applied to the Supreme Court to set aside these consent orders on various grounds – where the application was dismissed – whether the primary judge erred in dismissing the application – whether the consent order was obtained by fraud

Clone Pty Ltd v Players Pty Ltd (In liq) (2018) 264 CLR 165; [2018] HCA 12, cited

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

COUNSEL:

R G Feather (sol) for the appellants

E L Hoiberg for the respondent

SOLICITORS:

Access Legal Pty Ltd for the appellants

Clayton Utz for the respondent

  1. [1]
    FLANAGAN JA:  This is an appeal from orders made by Hindman J on 27 August 2024 dismissing the appellants’ amended application filed 20 March 2024 to set aside a consent order.  The consent order, which was made by her Honour on 29 November 2023, dismissed the appellants’ proceeding against the respondent.
  2. [2]
    By their amended application, the appellants sought to have the consent order set aside on a number of bases, including pursuant to r 667(2)(b) of the Uniform Civil Procedure Rules 1999.  This rule provides that the court may set aside an order at any time if the order was obtained by fraud.
  3. [3]
    The present appeal only concerns her Honour’s refusal to set aside the consent order on the basis that it was obtained by fraud.  Her Honour found that no fraud was made out on the evidence.[1]  The appellants seek to challenge this finding by advancing ten interlinked grounds of appeal.
  4. [4]
    For the reasons which follow, the appellants have failed to establish that her Honour erred in dismissing the amended application to set aside the consent order on the basis that it was obtained by fraud.  The appeal should, therefore, be dismissed with costs.

The Reasons

  1. [5]
    Her Honour outlined the relevant background at Reasons, [6] – [29].  The second appellant, Mr Feather, is the sole director of the first appellant, Partram Developments Pty Ltd.  Mr Feather is a solicitor.  He was granted leave both by her Honour and by this Court to represent the first appellant.  The appellants, together with another person, were the registered proprietors of a number of properties in Aitkenvale, Townsville.  The properties were subject to mortgages in favour of a cooperative housing society known as Waratah Cooperative Housing Society No 37 Limited (Waratah 37).
  2. [6]
    The appellants defaulted on their mortgages in July 2007 and Waratah 37 exercised its power of sale under the Property Law Act 1974 (Qld) (PLA).  Waratah 37 sold the properties in two tranches in late 2007 and early 2008.
  3. [7]
    On 3 December 2012, Messrs McCann and Killer of Grant Thornton were appointed as the receivers and managers of Waratah 37.
  4. [8]
    In November 2013, the appellants instituted proceedings against Waratah 37 in the Supreme Court of Queensland, alleging that it breached its duty under s 85 of the PLA and/or its duty at common law to take reasonable care to ensure the properties were sold at market value.  The receivers did not defend this claim and the appellants obtained default judgment against Waratah 37 in the sum of $3,489,010.  The appellants were, however, unable to enforce the judgment, including by making a claim on any insurance policy.
  5. [9]
    It was uncontentious before Hindman J that Waratah 37, up until about 18 March 2013, had in place an insurance policy that would have responded to the appellants’ claim.  The policy was for the period 1 June 2012 to 1 June 2013.  That policy was cancelled in about February 2013 by a former director of Waratah 37.
  6. [10]
    Waratah 37 went into liquidation in or about May 2017.
  7. [11]
    On 15 March 2019, the appellants commenced proceedings against the respondent.  The respondent is the regulator of Cooperative Housing Societies in Queensland under the Financial Intermediaries Act 1996 (Qld).
  8. [12]
    Her Honour noted that the appellants’ primary claim against the respondent was that the respondent breached its statutory and common law duties owed to the appellants by failing to exercise its power in such a way that ensured that Waratah 37 was not left without a policy of professional indemnity insurance that would respond to claims made against it, specifically the appellants’ claim against Waratah 37 for breach of duty owed to the appellants at common law and under s 85 of the PLA.[2]
  9. [13]
    The scheduled three day trial of the appellants’ claim against the respondent commenced on 27 November 2023.  On 17 November 2023, which was approximately 10 days prior to the commencement of the trial, the respondent obtained 216 documents from the receivers of Waratah 37 pursuant to a notice of non-party disclosure.  One of the documents produced was a professional indemnity insurance policy for the period 22 February 2013 to 22 February 2014 (the period during which the appellants commenced proceedings against Waratah 37), listing Waratah 37 as one of the insured.  This policy had a “retroactive date” of 3 December 2012 which was the date of the appointment of the receivers.  This had the consequence that the policy did not cover claims resulting from any act, error or omission occurring prior to that date (save for known claims).  Her Honour referred to this policy as the “Receivers’ Insurance Policy.”
  10. [14]
    On the first day of trial, whilst preliminary matters were being dealt with, the respondent indicated that it sought to add five additional documents to the tender bundle which it had recently received from the receivers through non-party disclosure.  One of these documents was the Receivers’ Insurance Policy.
  11. [15]
    Prior to the appellants being required to open their case at trial, Mr Feather was given some time to consider the appellants’ position in relation to the five documents.  This was at the suggestion of Mr Thompson KC, who appeared for the respondent at trial.[3]  Mr Feather requested and was granted 20 minutes for this purpose.
  12. [16]
    The subsequent relevant events are set out at Reasons [20] – [29]:

[20] When the Court resumed, the following exchange took place:

HER HONOUR: Are you ready to proceed, Mr Feather?

MR FEATHER: Well, it – well, I have the documents. I’m not quite sure what they mean and the other side haven’t indicated how that might affect their defence or the case. The matter will go for a couple of days. I would ask the court to continue for the moment until I can make more sense out of it. Perhaps hear what the other side say about the documents – are they significant, are they not? I don’t know if your Honour’s had a look at them yet.

HER HONOUR: No. No. But you’re not agreeing to them being tendered by consent at the moment.

MR FEATHER: No, your Honour.

HER HONOUR: That’s where we’re at. Okay.

MR FEATHER: Yes, thank you.

HER HONOUR: Well, then let’s start your case.

MR FEATHER: Thank you, your Honour.

MR THOMPSON: Can I just foreshadow, your honour, that in those circumstances, we will seek to call ---

HER HONOUR: You might need a witness.

MR THOMPSON: --- a witness tomorrow.

HER HONOUR: Yes.

MR THOMPSON: Yes.

HER HONOUR: Understood.

MR THOMPSON: Thank you.

[21] After dealing with some other preliminary matters, Mr Feather then opened the case for the plaintiffs, and subsequently gave his evidence-in-chief. There was cross-examination of Mr Feather on the documents (commencing at T1-38, L33) said to permit Mr Feather to comment upon them. At that point in time the Court marked the five documents “G” for identification.

[22] The relevant cross-examination was as follows:

MR THOMPSON: ….

So they’re respectively numbered 202(a), 204(a), 204(b), 204(c) and 208(a). And – so do you understand – and I won’t ask you to interpret the documents, Mr Feather, but what I’m suggesting to you is that the receivers had effected a professional indemnity insurance cover [indistinct] Waratah – I’m sorry, identifying Waratah 37 as an insured, effective from the 22nd of February 2013 to the 22nd of February 2014 – that’s looking at document 204(a) – for an insured sum of $10 million. And there’s correspondence with their broker and between the brokers and the receivers in relation to effecting that policy of insurance. And so even though, as we know, the policy of insurance which was effected by Waratah 37 previously, by its directors, was cancelled in February 2013 – in fact, I think, cancelled effectively on the 18th of March 2013 – there was a policy of professional indemnity insurance in place. Now, I’m not suggesting to you that we respond to your claim, but what I’m putting to you is that if the Registrar had, as you would contend, taken steps to ensure the existence of a policy of professional indemnity insurance, the response would have been from the receivers, “That’s exactly what we’ve done and we have a policy of professional indemnity cover in place.” And so what I’m suggesting to you is the allegations that you advance in your statement of claim that the Registrar should have insisted that the receivers, or someone else, have a policy of professional indemnity insurance is misconceived because one existed, and it existed for $10 million cover. Now, I’m not suggesting it will respond to your claims in relation to the section 85 sale – or complaint in 2007. I’m suggesting that the Registrar taking steps to see whether – or insist on a policy of professional indemnity insurance being in place would have insist on a policy of professional indemnity insurance being in place would have been met with a response that, in fact, there was one. Do you accept that? --- Well, been met with a response that, in fact, there was one. Do you accept that --- Well, looking at this, there seems to be a policy. Whether I can agree with your proposition, I – I would need some time to consider this and get some advice about it.

All right. And I’m suggesting to you that therefore, as a matter of causation, there was no point in the Registrar imposing a condition or a term of the management agreement, that you’ve referred to as a failure on the part of the Registrar, that professional indemnity insurance be taken out because the receiver have already done it? --- I don’t know if that is this.

And more relevantly, that that was likely to be the response the Registrar would have received if it had said there should be a professional indemnity policy. All right. Just moving on to something else.

[23] Mr Feather did not give any evidence in re-examination. There was only one other witness for the plaintiffs who was not available until the following day. Accordingly, the first day of the trial finished shortly after noon.

[24] Subsequently the defendant’s solicitor (Mr Sharry) and senior counsel for the defendant (Mr Thompson KC) had a discussion with Mr Feather, in which Mr Feather consented to the defendant tendering the additional documents without the need to call one of the receivers (through whom the documents would otherwise be proved). Subsequently Mr Feather reconsidered his position and advised the defendant’s solicitors that he did require Mr Killer, one of the receivers, for cross-examination. However, Mr Killer was no longer available. The other receiver, Mr McCann, was available to give evidence remotely on the third day of trial. These matters were agitated before the Court at the beginning of day two of the trial.

[25] The plaintiffs’ second witness then completed his evidence on day two of the trial. Attention then returned to the Receivers’ Insurance Policy. The following exchange occurred:

MR FEATHER: Did I understand your Honour to say that the document is likely to go in, in any event?

HER HONOUR: Well, the defendants’ going to call one of the receivers. The receiver will prove that their company records – they’ll be admissible under the Evidence Act as business records.

MR FEATHER: Has your Honour ---

HER HONOUR: I mean, that – if – you can, of course, require them to be proved in that way, which means you’ll have one of the receivers available for cross-examination.

MR FEATHER: Has – has your Honour had a look at the documents? I – I’m just heading this way. The whole –

HER HONOUR: No, I didn’t, apart from the fact that they were cross-examined on yesterday, so I’m aware that it appears that the receivers, in fact, did put in place some form of insurance policy and, obviously, you weren’t aware of that.

MR FEATHER: Well, I’m – I’m just not wanting to waste the court’s time and everybody else’s. What I’m – what I’m thinking is if it was to go in to evidence and your Honour was to accept it as a policy at the time, the whole – the plaintiffs’ whole case against the Registrar will fall away.

HER HONOUR: Well, one aspect of your case potentially will fall away. I think that’s right. Because of the plaintiffs’ case, as I understand it, is that one of the allegations of negligence is that you say the Registrar failed to ensure that the receivers had a policy in place.

MR FEATHER: Yes, your honour. I think that pervades them to ---

HER HONOUR: That would be a limb of it – of the plaintiffs’ case which looks like it would have some serious problems.

MR FEATHER: Yes, your honour. Well, now would be a good time to make a decision on that. I’m – could we have ---

HER HONOUR: Do you want some time? We can have a morning tea break.

MR FEATHER: I’m – I guess – I don’t want to precipitate a certain course if there’s a chance that your Honour might not come to the same conclusion about the documents as the defendants ---

HER HONOUR: Well, no, we – as I said, I haven’t looked at it carefully. I’ve just looked at it as we went through the cross-examination yesterday.

MR FEATHER: Well ---

HER HONOUR: I mean, it might not – no one’s suggested whether it responses to the particular circumstances, but then I understood your case to be that you weren’t contending for any particular terms of an insurance policy, just a generic ---

MR FEATHER: It’s just a general ---

HER HONOUR: --- policy.

MR FEATHER: Yes, your Honour. I’m just wondering – as I say, I don’t want it to be a waste of everybody’s time and effort – if we had a short adjournment. I’m happy to have it go into evidence now so your Honour could have a look at it and if you – I don’t know if your Honour was minded to – to the view as would be proposed by the defendants.

HER HONOUR: Well, I’m not going to make any decision about anything until the close of the case and when I’ve heard closing submissions.

MR FEATHER: Yes.

HER HONOUR: So all I’m concerned about at the moment is whether you want to close your case or, now that you know that the defendant is going to be able to reduce one of the receivers through whom they could tender these documents, even if you object to them going in by consent ---

MR FEATHER: Yes.

HER HONOUR: --- whether that impacts on whether you want to close your case.

MR FEATHER: Well, could we have an adjournment for 15 minutes and I’ll –

[26] The Court granted Mr Feather a 20 minute adjournment to consider whether the plaintiffs wished to close their case.

[27] When Court resumed, the following exchange took place:

HER HONOUR: Yes, Mr Feather.

MR FEATHER: Well, your Honour, I’ve decided that if the document is in – goes into evidence, it looks like a professional indemnity insurance policy. That’s the linchpin of the plaintiffs’ case, and there’s no point in wasting the court’s time and the defendants’ time.

HER HONOUR: Are you indicating to me that you’d like to discontinue the proceedings?

MR FEATHER: Discontinue, yes. Thank you, your Honour.

[28] The Court granted the plaintiffs leave to discontinue the proceeding. The parties were then given time to consider if agreement about costs could be reached.

[29] The following morning (19 November 2023)[4], Mr Feather requested a meeting with the defendant’s solicitors. After that meeting, the parties attended court at 2:15pm and handed up a consent order, dismissing the proceeding and ordering that the plaintiffs’ pay the defendant’s costs on a standard basis up to 17 August 2021, and on an indemnity basis afterwards. The consent order was made by the Court.”

  1. [17]
    As to the allegation of fraud, her Honour noted that the appellants asserted that the respondent and its legal representatives were involved in fraudulent conduct.  The respondent’s legal representatives included Mr Thompson KC, Mr Sharry, a partner of Clayton Utz who were the solicitors for the respondent, and Mr Smyth, general counsel of Queensland Treasury Corporation.[5]
  2. [18]
    The allegation of fraud was that the respondent and its legal representatives engaged in a course of conduct that induced the appellants to believe that the Receivers’ Insurance Policy was something which it was not, namely a policy that answered to the appellants’ claim against Waratah 37.
  3. [19]
    After considering the relevant principles in relation to setting aside an order obtained by fraud, her Honour concluded that the appellants had not proved fraud to the requisite standard.
  4. [20]
    The only evidence filed by the appellants in support of the amended application to set aside the consent order on the basis of fraud, was two affidavits of Mr Feather.  As further discussed below, a number of objections to numerous paragraphs of these affidavits were conceded.  Mr Feather was also cross-examined.  For the respondent an affidavit of Mr Sharry was filed.  He was not cross-examined.
  5. [21]
    Her Honour’s relevant findings as to the allegation of fraud are set out at Reasons, [46] – [47]:

[46] Whilst he complains that the defendant and its legal representatives “induced” that assumption I do not find that to be so. In particular:

  1.  the provision of the Receivers’ Insurance Policy to the plaintiffs in a clear plastic sleeve is of no consequence, nor is the fact that the retroactive date of the policy was on the second page of a double-sided document;
  1.  the defendant agreed to time being given to the plaintiffs to consider the documents;
  1.  the defendant and its legal representatives were under no obligation to explain the content and effect of the Receivers’ Insurance Policy to the plaintiffs, even if there was some implicit request for an explanation (or to the Court when the tender of the documents had not then taken place);
  1.  at no point did the defendant or its legal representatives tell the plaintiffs or the Court that the Receivers’ Insurance Policy would respond to the plaintiffs’ claim against Waratah 37;
  1.  if Mr Feather did not in fact read any part of the Receivers’ Insurance Policy beyond the first page until after December 2023 that was of his own choosing and could not have been anticipated by the defendant or its legal representatives;
  1.  it was Mr Feather’s choice as to whether he obtained independent advice about the document – he gave some indication during his cross-examination on the first day of trial that he intended to obtain some advice about the document (see T1-39, L21-28). He did not obtain such advice and the only step he took was to try to have a conversation with Mr Killer (one of the receiver and managers of Waratah 37). He accepted he was capable of obtaining independent legal advice. The defendant and its legal representatives were not to know what advice the plaintiffs did or did not obtain;
  1.  there is no basis upon which the defendant or its legal representative ought to have known that Mr Feather had no experience with insurance policies with retroactive dates;
  1.  the defendant and its legal representatives were under no obligation to bring the retroactive date in the Receivers’ Insurance Policy to attention of Mr Feather during his cross-examination;
  1.  the defendant’s senior counsel during the cross-examination of Mr Feather relating to the Receivers’ Insurance Policy specifically noted, “I’m not suggesting it will respond to your claims in relation to the section 85 sale – or complaint in 2007. I’m suggesting that the Registrar taking steps to see whether – or insist on a policy of professional indemnity insurance being in place would have been met with a response that, in fact, there was one”.

[47] I do not accept that the behaviour of the defendant or its legal representatives reveals any intention to conceal the true impact of the Receivers’ Insurance Policy from the plaintiffs, or to trick Mr Feather into believing that the Receivers’ Insurance Policy was a complete answer to the plaintiffs’ case. No misconduct, let alone fraud, is made out on the evidence.”

The grounds of appeal

  1. [22]
    Each of the 10 grounds of appeal effectively seek to challenge these findings.
  2. [23]
    By grounds 1, 2 and 3, the appellants assert that her Honour should have found that the respondent and its legal representatives “contrived” to make it appear that the Receivers’ Insurance Policy was “the policy within the existing pleadings and therefore a defence to the appellants’ claim.”[6]  This contrivance, according to the appellants, went beyond the mere failure to explain the effect of the policy[7] and her Honour erred by failing to find that the respondent had the necessary “guilty intent.”[8]  This error arose in part because her Honour misconceived the case being advanced by the appellants as being one merely based on an allegation that the respondent failed to explain the effect of the Receivers’ Insurance Policy to the appellants.[9]
  3. [24]
    Grounds 4 and 5 assert that the respondents’ silence as to the actual relevance of the Receivers’ Insurance Policy, in the context of the appellants’ pleaded case, constituted fraud.  This was because the only relevant policy that could have constituted a complete defence to the appellants’ claim as against the respondent was one which responded to the claim against Waratah 37.  As such, her Honour further erred, by deciding that the Receivers’ Insurance Policy was relevant on the basis that it could be part of a “counterfactual” raised by the respondent or was within “more broadly pleaded allegations regarding insurance.”  (Ground 6).
  4. [25]
    Ground 7 asserts that in considering the relevance of the Receivers’ Insurance Policy, her Honour failed to take into account “cogent evidence.”  That evidence consists of an email response to an enquiry from Mr Feather about the result of the “Third Party Disclosure Notice.”  The respondent’s solicitor responded by email on 22 November 2023:

“At this stage, the [respondent] does not intend to rely upon any documents produced pursuant to either of the [respondent’s] notices of non-party disclosure.”[10]

Mr Feather’s response sent on 23 November 2023 stated:

“Regardless of whether the [respondent] intends to rely on them, please forward copies for the [appellants] to consider.”[11]

  1. [26]
    Grounds 8, 9 and 10 generally assert that her Honour erred by failing to find that the conduct of the respondent and its legal representatives revealed an intention to conceal the true relevance of the Receivers’ Insurance Policy.

The evidence did not establish fraud

  1. [27]
    As it was the appellants who sought to have the consent order set aside, they carried the onus of establishing, by admissible evidence, that the consent order was obtained by fraud.[12]
  2. [28]
    What must be established to set aside an order obtained by fraud was explained by Kirby P (with whom Hope and Samuels JJA agreed) in Wentworth:

“… it must be shown, by the party asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment…”[13]

  1. [29]
    Kirby P continued:

“In summary, he or she must establish that the case is based on newly discovered facts; that the facts are material and such as to make it reasonably probable that the case will succeed; that they go beyond mere allegations of perjury on the part of witnesses at the trial; and that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud in such a way as to render it inequitable that such party should take the benefit of the judgment.”[14]

  1. [30]
    It was incumbent on the appellants to prove actual fraud.[15]
  2. [31]
    Hindman J at Reasons, [43] – [44] correctly identified what is necessary to establish fraud:

[43] Over the years, various definitions of fraud have emerged, and none is considered superior to the other. The case of Young v Hoger defines fraud as ‘wilful blindness, an abstention from inquiry for fear of learning the truth, and possibly reckless indifference in other respects but that, in either case, it must amount to actual dishonesty.’

[44] A lack of frankness or an ulterior or oblique or indirect motive is insufficient to establish fraud. Furthermore, mere suspicion of fraud is also not enough.

  1. [32]
    As already observed, the appellants relied on two affidavits of Mr Feather in order to establish the allegation of fraud.  Prior to the hearing of the amended application, the respondent had provided to the appellants a schedule of objections to Mr Feather’s affidavits.[16]  As to Mr Feather’s second affidavit[17] which consists of 25 paragraphs, the appellants conceded the respondent’s objections to paragraphs 2 to 24 of this affidavit.  The only relevant remaining paragraph is paragraph 25 in which Mr Feather confirmed that the date he became aware of the existence of the retroactive date and condition in the Receivers’ Insurance Policy and accordingly, that that policy would not respond to the appellants’ claim against Waratah 37, was 13 December 2023.  Apart from this fact, Mr Feather’s second affidavit did not contain any admissible evidence in support of the allegation of fraud.
  2. [33]
    In relation to Mr Feather’s first affidavit,[18] the appellants conceded that a number of paragraphs or parts of paragraphs should be treated as submissions rather than as evidence.  Further concessions were made by the appellants, in accordance with the schedule of objections, that other paragraphs of Mr Feather’s first affidavit were inadmissible.
  3. [34]
    It is apparent from Mr Feather’s first affidavit that he only became specifically aware of the policy ten minutes prior to the commencement of the trial.  He was cross-examined by Mr Thompson KC at the trial in relation to the Receivers’ Insurance Policy.  It was in the course of this cross-examination, as recorded by her Honour at Reasons [22], that Mr Thompson KC expressly stated that he was not suggesting to Mr Feather that the Receivers’ Insurance Policy responded to the appellants’ claim against Waratah 37.
  4. [35]
    When later cross-examined at the hearing of the amended application to set aside the consent order, Mr Feather gave the following evidence:

“Well, I’m asking – interested in your – what you did to understand – yourself understand the insurance policy. So did you take it out of the plastic sleeve it was presented to you in?---Yes.

Did you read it?---No. I – the – no. The details on the front cover were fixed in my mind and I thought that was – was just about it.

Sorry. So just to clarify, your evidence to this [indistinct] is that you didn’t read the insurance policy that was given to you?---Other than the first page, no.

And is it the case that you didn’t read – the first time you actually read the insurance policy was after you made the decision to discontinue the proceedings?---That’s right. Well, it’s the first time I made sense – yes. Yep. Both answers, yes to both of these. Yeah.[19]

You didn’t think it was necessary at the time before you discontinued to work out what the conditions of the insurance policy might be?---No. I hadn’t read the terms of the policy. No.[20]

I suggest to you that the real reason why you thought the insurance policy responded to your claims was because you did not, in fact, read it?---Well, if had read it in detail, I certainly would have raised objections, or concerns about it, at least, and probably considered that it didn’t apply.”[21]

  1. [36]
    The fact that Mr Feather did not read the Receivers’ Insurance Policy prior to the making of the consent order on 29 November 2023 permitted her Honour to make the following finding: [22]

“It is plain from Mr Feather’s evidence that despite Mr Feather having a concern that the Receivers’ Insurance Policy may be fatal to the [appellants’] case he made assumptions as to its content and effect.  Mr Feather’s wrong assumption as to the effect of the Receivers’ Insurance Policy is not enough to prove that the [respondent] or any of its legal representatives engaged in fraud.”

  1. [37]
    The effect of Mr Sharry’s evidence was that he was not aware of any legal representative of the respondent ever informing the appellants that the Receivers’ Insurance Policy or any other insurance policy responded to any of their claims.
  2. [38]
    Mr Sharry made specific reference to two occasions where Mr Feather was informed that no one was suggesting that the Receivers’ Insurance Policy responded to the appellants’ claim against Waratah.[23]
  3. [39]
    Mr Sharry also affirmed that at no point had he ever participated in a plan to mislead the appellants or the court as to the contents or relevance of any documents in the proceedings including the Receivers’ Insurance Policy.  He categorically denied that the respondent or Clayton Utz had been involved in any plan to induce the appellants into discontinuing the proceeding.
  4. [40]
    Mr Sharry explained the relevance of the Receivers’ Insurance Policy in paragraphs 8, 49 and 75 of his affidavit:

“48. After completing my own detailed review of those documents and following discussions with Counsel, I formed the view that the Defendant should seek to tender and rely upon the Grant Thornton Supplementary Bundle because those documents were relevant to the proceeding.  In particular, the Plaintiffs' counterfactual pleaded at paragraph 48A of the Eleventh Amended Statement of Claim (11ASOC) asserted that the Defendant "could and should have intervened in the affairs of Waratah 37" by, amongst other measures, appointing a board of directors, an administrator, an inspector or an investigator after 5 February 2013, who would have "conducted due diligence enquiries and investigations" which would have:

  1.  revealed that the professional indemnity insurance policy previously held by Waratah 37 had been cancelled on 18 March 2013;
  1.  led to the cancellation of Waratah 37’s former policy being reported to the Defendant; and
  1.  accordingly resulted in the Defendant directing Waratah 37 to "take out and maintain a policy of professional indemnity insurance with QBE insurance or other insurer which would have covered the plaintiff’s claim against Waratah 37''.
  1.  My understanding of the Plaintiffs' case was that they were not contending for any particular insurance policy but rather, were contending for some general insurance policy that would have covered their claim. That understanding is consistent with the exchange I observed between Mr Feather and Justice Hindman during the trial which I depose to at paragraphs 6(b) and 73 of this affidavit.

  1.  As a result of these exchanges, and my general knowledge of the case, my understanding and belief was that:
  1.  the Plaintiffs were not contending that Waratah 37 should have had any particular insurance policy but rather, were contending for some general insurance policy;
  1.  the Grant Thornton Supplementary Bundle should be put into evidence at the trial because:
  1.  it was relevant to what would have happened on the Plaintiffs’ alleged counterfactual scenario had the Defendant (or a person or body appointed by the Defendant) made enquiries with the Receivers about whether they had any professional indemnity insurance cover in place for Waratah 37; and
  1.  it tended against the Plaintiffs’ assertion that such enquiries would have resulted in the Defendant directing the Receivers to obtain professional indemnity insurance cover for Waratah 37 on the basis that at least some form of insurance (the Receivers’ Policy) was already in place.”
  1. [41]
    It was this evidence of Mr Sharry together with her Honour’s own analysis of the pleadings which led her Honour to reject the appellants’ submission that the Receivers’ Insurance Policy had no relevance to the proceedings.  The appellants relied on this submission to support the allegation that any reference or reliance on the Receivers’ Insurance Policy constituted “some devious conduct on the part of the [respondent] or its legal representatives.”[24]
  2. [42]
    Nor does the fact that the respondent did not amend its defence upon receipt of the Receivers’ Insurance Policy advance the allegation that the consent order was obtained by fraud.  The appellants submit that the respondent was obliged to amend the defence so as not to cause surprise and further, that her Honour erred by observing that the relevance of the policy need only have become apparent “at ‘submissions’.”[25]  The appellants go so far as to assert that the failure on the part of the respondent to amend the defence “was the foundation of the subterfuge.”[26]  These submissions cannot be accepted and no error has been demonstrated.  The Receivers’ Insurance Policy only came to be in the respondent’s custody and control when it was produced by the receivers pursuant to a notice of non-party disclosure.  As correctly submitted by the respondent:[27]

“The policy was only identified as relevant by the Respondent’s Counsel on the Friday prior to the commencement of the trial and it had not been tendered into evidence at the time the proceedings were discontinued.  Even if it could be concluded that the Respondent ought to have amended its Defence, the Appellants point to no evidence that the Respondent did not do so because it was ‘clearly aware of the futility’ of amending the Defence and so instead decided to use the Receiver’s Insurance Policy as a ‘tool of deception’.”

  1. [43]
    When one has regard to the evidence, her Honour’s finding that the appellants had not proved fraud to the requisite standard was inevitable.  It must be accepted, as submitted by the respondent, that the appellants did not lead any admissible evidence to prove that the respondent or its legal representatives engaged in actual or deliberate dishonesty.  Nor did the admitted evidence permit such an inference to be drawn.[28]  In the absence of admissible evidence to establish the allegation of fraud, it is unnecessary for this Court to further consider the relevance of the Receivers’ Insurance Policy or any asserted failure on the part of the respondent to amend its defence.
  2. [44]
    The primary difficulty with the appellants’ allegation of fraud is that they were furnished with the Receivers’ Insurance Policy on the first day of trial (27 November 2023) and were informed that the respondent would seek to tender the policy.  The consent order was not made until 29 November 2023.  In circumstances where the appellants were in actual possession of the policy prior to the making of the consent order and were therefore in a position to read and consider the operation and scope of the policy, absent any express misrepresentation by the respondent or its legal representatives, the task of establishing actual fraud was insurmountable.  Any allegation of fraud “through a concerted campaign of deception” must be evaluated in light of the fact that the appellants were in possession of the policy.  As correctly submitted by the respondent, the consent order was obtained because Mr Feather failed to read the document on which his decision to discontinue the proceeding was based.[29]  This was in circumstances where, in the course of cross-examination by Mr Thompson KC at trial, Mr Feather expressly acknowledged that he needed some time to consider the Receivers’ Insurance Policy and to obtain advice.[30]  The trial was adjourned at 12.08 pm on 27 November 2023 and did not resume until 9.58 am on 28 November 2023.  Mr Feather therefore had ample time within which to consider the policy and obtain advice.
  3. [45]
    Her Honour was correct in observing that the respondent and its legal representatives were under no obligation to explain the content and effect of the Receivers’ Insurance Policy to the appellants.[31]  The evidence further supported her Honour’s findings that at no point did the respondent or its legal representatives suggest to the appellants that the Receivers’ Insurance Policy would respond to the appellants’ claim against Waratah 37.
  4. [46]
    As to the appellants’ assertion that her Honour failed to take into account the “cogent evidence” set out at [25] above, as correctly submitted by the respondent:[32]

“The statement to Mr Feather that the Respondent did not ‘at this stage’ intend to rely on the documents produced was correct at the time it was made, based on the solicitors’ review of the documents.  Subsequently, the Respondent’s Counsel reviewed the documents produced by the receivers as part of their trial preparation and formed the view on Friday 24 November 2023 that five documents produced by the receivers, including the Receivers’ Insurance Policy, should be tendered.”

  1. [47]
    This evidence does not support any allegation of fraud.  Nor does the fact, that the respondent did not initially intend to rely upon any of the documents produced pursuant to the notices of non-party disclosure, suggest fraud.  The change in the respondent’s position in relation to tendering the Receivers’ Insurance Policy arose because of Senior Counsel’s advice.
  2. [48]
    Finally, the appellants have not established that her Honour misconceived the basis of the appellants’ application to set aside the consent order.  Her Honour did not limit the consideration of the allegation of fraud to the proposition that the respondent and its legal representatives ought to have explained to the appellants the true effect of the Receivers’ Insurance Policy.[33]  When the Reasons are read as a whole, her Honour considered each aspect of the conduct of the respondent and its legal representatives which the appellants alleged constituted fraud.  Her Honour’s analysis of the allegation of fraud was not limited to a consideration of whether the respondent and its legal representatives ought to have explained to the appellants the true effect of the Receivers’ Insurance Policy.

Disposition

  1. [49]
    The appeal should be dismissed with costs.
  2. [50]
    BODDICE JA:  I agree with Flanagan JA.
  3. [51]
    WILLIAMS J:  I have read the reasons of Flanagan JA and agree with his Honour’s reasons and the order that the appeal be dismissed with costs.

Footnotes

[1] Partram Developments Pty Ltd v The Registrar of Cooperative Housing Societies [2024] QSC 191 (“Reasons”) at [47].

[2]  Reasons, [14].

[3]  RB, Book 2, p 201, lines 17-19.

[4]  This date should be 29 not 19 November 2023.

[5]  Reasons, [40].

[6]  Ground 1 of the Amended Notice of Appeal.

[7]  Ground 2 of the Amended Notice of Appeal.

[8]  Ground 3 of the Amended Notice of Appeal.

[9]  Ground 1 of the Amended Notice of Appeal.

[10]  RB, Book 3, p 552-4.

[11]  RB, Book 3, p 552-4.

[12] Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 (Wentworth) at 537-9.

[13] Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538.

[14] Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 539.

[15] Clone Pty Ltd v Players Pty Ltd (In liq) (2018) 264 CLR 165, 195 at [62].

[16]  RB, Book 3, p 624-38.

[17]  RB, Book 2, p 365-9.

[18]  RB, Book 2, p 161-97.

[19]  RB, Book 3, p 725, lines 7-20.

[20]  RB, Book 3, p 726, lines 1-3.

[21]  RB, Book 3, p 727, lines 27-30.

[22]  Reasons, [45].

[23]  Affidavit of Scott William Sharry, sworn 10 April 2024, para 6(a), 6(b) and 73; RB, Book 3, 377, 389-90.

[24]  Reasons, [54].

[25]  Appellants’ Amended Outline of Submissions, p 4.

[26]  Appellant’s Amended Outline of Submissions, p 8, para 9(b).

[27]  Respondent’s Amended Outline of Submissions, para 43.

[28]  Respondent’s Amended Outline of Submissions, para 38.

[29]  Respondent’s Amended Outline of Submissions, para 46.

[30]  RB, Book 3, p 439, lines 27-28; Reasons, [22].

[31]  Reasons, [46] (c).

[32]  Respondent’s Amended Outline of Submissions, para 14.

[33]  Reasons, [3]; Appellants Amended Outline of Submissions, p 6.

Close

Editorial Notes

  • Published Case Name:

    Partram Developments Pty Ltd v The Registrar of Cooperative Housing Societies

  • Shortened Case Name:

    Partram Developments Pty Ltd v Registrar of Cooperative Housing Societies

  • MNC:

    [2025] QCA 13

  • Court:

    QCA

  • Judge(s):

    Flanagan, Boddice JJA, Williams J

  • Date:

    18 Feb 2025

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2024] QSC 19127 Aug 2024Application to set aside consent order dismissing proceedings dismissed: Hindman J.
Notice of Appeal FiledFile Number: CA 12651/2424 Sep 2024Notice of appeal filed.
Appeal Determined (QCA)[2025] QCA 1318 Feb 2025Appeal dismissed: Flanagan JA (Boddice JA and Williams J agreeing).
Application for Special Leave (HCA)File Number: B11/202524 Mar 2025Application for special leave to appeal filed.
Special Leave Refused (HCA)[2025] HCADisp 11612 Jun 2025Special leave refused: Gageler CJ, Gordon, Edelman, Gleeson, Jagot and Beech-Jones JJ.

Appeal Status

Appeal Determined - Special Leave Refused (HCA)

Cases Cited

Case NameFull CitationFrequency
Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165
2 citations
Clones Pty Ltd v Players Pty Ltd (in liq) [2018] HCA 12
1 citation
Partram Developments Pty Ltd v Registrar of Cooperative Housing Societies [2024] QSC 191
2 citations
Wentworth v Rogers (no 5) (1986) 6 NSW LR 534
4 citations

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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