Homesure Building & Property Group Pty Ltd v McDowell
[2002] QDC 267
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- Unreported Judgment
- Homesure Building & Property Group Pty Ltd v McDowell[2002] QDC 267
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Homesure Building & Property Group Pty Ltd v McDowell[2002] QDC 267
Homesure Building & Property Group Pty Ltd v McDowell[2002] QDC 267
DISTRICT COURT OF QUEENSLAND
CITATION: | Homesure Building & Property Group P/L v. McDowell & Ors [2002] QDC 267 | |
PARTIES: | HOMESURE BUILDING & PROPERTY GROUP PTY. LTD.(Plaintiff) And GARRY DAVID McDOWELL(Defendant) BY COUNTERCLAIM: GARRY DAVID McDOWELL(Plaintiff) And HOMESURE BUILDING & PROPERTY GROUP PTY. LTD.(First Defendant) And ANTHONY MACKLIN(Second Defendant) And MORRIS MORRISEY(Third Defendant) | |
FILE NO/S: | 228 of 2002 | |
DIVISION: | Civil | |
PROCEEDING: | Applications | |
ORIGINATING COURT: | District Court | |
DELIVERED ON: | 18th October 2002 | |
DELIVERED AT: | Maroochydore | |
HEARING DATE: | 14th October 2002 | |
JUDGE: | Judge J.M. Robertson | |
ORDER: | I order that judgment be entered for the defendant against the plaintiff with costs. | |
CATCHWORDS: | SUMMARY JUDGMENT – application by defendant pursuant to r 293(2) UCPR – principles to be applied LIMITATION OF ACTIONS ACT 1974 – claim based in contract – whether defendant has acknowledged the claim thus enlivening s. 35(3) of the Limitation of Actions Act 1974 Cases cited: Foodco Management P/L & Anor v Go My Travel P/L [2001] QSC 291 Bernstrom v. National Australia Bank Limited [2002] QCA 231 The Stage Club Limited v. Millers Hotels Proprietary Limited (1981) 150 CLR 536 Hipworth v. Mahar and Anor (1952) 87 CLR 335 Statutes cited: Uniform Civil Procedure Rules, r. 293(2) Limitation of Actions Act 1974, ss. 10, 35(3), 36 | |
COUNSEL: | P.J. Roney for the Plaintiff M.W. Jarrett for the Defendants | |
SOLICITORS: | Walker Smith & Breen for the Plaintiff Paul Everingham & Co for the Defendants | |
- [1]The plaintiff’s claim is for $60,592.91 by way of contractual debt and interest. The contract is a written agreement dated the 23rd July 1990 whereby the defendant agreed to pay the plaintiff the sum of $20,000.00 by equal monthly instalments of $500.00 (the agreement). Paragraphs 4 and 5 of the claim are in these terms:
“4. As at 30 June 1991, the amount owing pursuant to the contract was no less than $19,013.00 calculated as follows:-
Amount owing pursuant to the contract | $20,000.00 |
Less reduction pursuant to paragraph 3 of the contract | $1,000.00 |
$19,000.00 | |
Less five payments of $500.00 each made by the Defendant | $2,500.00 |
$16,500.00 | |
Plus interest at 15% to 30 June 1991 claimed at | $2,513.00 |
TOTAL | $19,013.00 |
- The Defendant has made no payments pursuant to the contract, or otherwise reduced the debt, after 30 June 1001.”
- [2]In its Defence and Counterclaim filed the 5th August 2002 the defendants plead in paragraph 2 that the claim is statute barred by reason of s. 10 of the Limitation of Actions Act 1974 (as amended).
- [3]Before the Court on the 14th October 2002 were these applications:
- The plaintiff’s application filed the 23rd August 2002 seeking orders inter alia that the counterclaims of the defendant and the Amended Defence dated the 14th August 2002 be struck out;
- The defendant’s application filed the 11th September 2002 seeking orders inter alia that the plaintiff have leave to join Anthony Macklin and Morris Morrisey as defendants in the proceedings;
- The defendant’s application filed the 8th October 2002 for summary judgment.
- [4]Mr Roney who appeared for the plaintiff acknowledged that if the defendant was successful in its application for summary judgment based on the Limitation of Actions Act 1974, then clearly the other applications would be pointless. For this reason, the parties fully argued the merits of this application and the remaining applications have been adjourned by consent to a date to be fixed.
Introduction
- [5]The parties have been involved in various business ventures dating back to the 1980’s. Messrs Morrisey and Macklin are barristers and Mr McDowell has been involved in home building since 1976. Initially Mr Morrisey was retained by solicitors acting for McDowell interests, and through Mr Morrisey, Mr McDowell met Mr Macklin. This lead to the formation of the plaintiff with these three (and two others) as shareholders. This commercial venture was unsuccessful. Without in any way intending to decide matters of fact which are not relevant to the application before me, it appears that as a result of some Magistrates Court judgment in favour of the plaintiff against an entirely separate McDowell company, Messrs Morrisey, Macklin and McDowell came together at an oral examination of McDowell and his wife on the 23rd July 1990. There is much factual dispute as to what occurred on that day, but it is common ground that Mr Morrisey drew up the agreement which was signed by Mr McDowell. Payments were made in accordance with the agreement, however no payments were made after the 30th June 1991. Subsequently, there were further business dealings between the parties and various corporate entities associated with them. It was in the context of complex negotiations which involved Mr Macklin (primarily on behalf of the plaintiff and his family trust) and the defendant (apparently on behalf of QN Pty Ltd) that a number of documents and letters said by the plaintiff to constitute relevant acknowledgment of claim by the defendant, came into existence. The complexity of these subsequent commercial dealings can be gleaned from the Schedule dated the 27th November 2001 prepared by Mr Macklin (paragraph 2(f) of Mr Everingham’s affidavit).
The application for summary judgment
- [6]Section 10 of the Limitation of Actions Act 1974 is in the following terms (relevantly):
“Actions of contract and tort and certain other actions
- 10.(1)The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action arose –
- (a)an action founded on simple contract or quasi contract …”
- [7]In its amended Statement of Claim filed the 12th August 2002 the plaintiff responded to the Limitation Act defence in paragraph 5A:
- “5A.By writing, signed by the Defendant and dated 4 December 2001, the Defendant acknowledged the Plaintiff’s claim herein in accordance with s.36(1) of the Limitations of Actions Act 1974 as amended.
Particulars
- (i)the letter dated 14 February 1997 from the Plaintiff to the Defendant referred to in item 10 of a document entitled “Schedule of Some Relevant Facts Circumstances and Documents” dated 27 November 2001;
- (ii)the letter dated 4 December 2001 signed by the Defendant and one Ray Hancock under the letter-head of QN Pty Ltd ACN 077 532 382 to the Plaintiff’s solicitors, in particular items 34 and 35 thereof;
- (iii)the letter dated 13 December 2001 signed by the Defendant and Ray Hancock under the letter-head of the said Q N Pty Ltd to the Plaintiff’s solicitors, and in particular the 5th paragraph thereof.”
- [8]Section 35(3) of the Limitation of Actions Act 1974 is in these terms:
- “(3)Where a right of action has accrued to recover a debt or other liquidated pecuniary claim, or a claim to the personal estate of a deceased person or to a share or interest therein and the person liable or accountable therefore acknowledges the claim or makes a payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment or the last payment.”
- [9]And s. 36 is in these terms:
- “36(1)Every acknowledgment referred to in section 35 shall be in writing and signed by the person making the acknowledgment.
- (2)Any acknowledgment or payment may be made by the agent of the person by whom it is required to be made under section 35 and shall be made to the person or to an agent of the person whose title or claim is being acknowledged or, as the case may be, in respect of whose claim the payment is being made.”
- [10]The defendant’s application for summary judgment is governed by rule 293(2) of the Uniform Civil Procedure Rules. In Foodco Management P/L & Anor v Go My Travel P/L [2001] QSC 291 at paragraph 8 Wilson J said of applications of this kind:
“In order to succeed on its application for summary judgment, the defendant must persuade the Court that the plaintiffs have “no real prospect of succeeding” on all or a part of their claim and that there is no need for a trial of the claim or part of the claim: Uniform Civil Procedure Rules 1999 (Qld) (UCPR) r 293(2). This is a new rule, which is similar to r 24.4 of the Civil Procedure Rules (UK). In Swain v Hillman [2001] 1 All ER 91 at 92 Lord Woolf MR said of the UK rule –
“The words “no real prospect of succeeding” do not need any amplification, they speak for themselves. The word “real” distinguishes fanciful prospects of success or … they direct the court to the need to see whether there is a “realistic” as opposed to a “fanciful” prospect of success.”
……………
And at 95:
“[Part 24 of the CPR] … is not meant to dispense with the need of a trial where there are issues which should be investigated at the trial.”
I respectfully apply his Lordship’s observations to r 293 of the UCPR.
- [11]In Bernstrom v. National Australia Bank Limited [2002] QCA 231 the Court of Appeal held that r. 293(2) directed the Court to the need to see whether the plaintiff had a realistic as opposed to a fanciful prospect of success, and that it was important that a judge made use of r. 293(2) in appropriate cases so as to save expense, achieve expedition, and avoid the using up of the Court’s resources on cases which served no purpose.
- [12]Mr Jarrett who appeared for the defendant, submits that none of the documents relied upon by the plaintiff as constituting a written acknowledgment of the claim signed by his client can be so construed; therefore the claim is statute barred and there is no real prospect of the plaintiff succeeding. Clearly the plaintiff does not rely on any part payment by the defendant.
The Law
- [13]Both Mr Roney and Mr Jarrett submit, by reference to the authorities noted in paragraph 117 of “Limitation of Actions s. 10” in Volume 5 of Laws of Australia, that whether a document amounts to an acknowledgment is a question of construction, and in determining whether a document constitutes sufficient acknowledgment, a court can examine the surrounding circumstances and will interpret the document in the manner in which its creator intended it to be read by the person to whom it was addressed. What is required is an admission that a debt is due, or that it is outstanding and unpaid. In The Stage Club Limited v. Millers Hotels Proprietary Limited (1981) 150 CLR 536 at 544, Gibbs CJ said:
“Although under the Limitation Act 1969, it is no longer necessary that there should be a promise to pay, it is still necessary, in my opinion, that an acknowledgment should admit or recognize the present existence of a cause of action; in other words, where the claim is for payment of a debt, an acknowledgment, to be sufficient, must recognize the present existence of the debt. I respectfully agree with the statement of Kerr J. in Surrendra Overseas Ltd. v. Sri Lanka that “To acknowledge a claim, as a matter of ordinary English, signifies an admission that it is due”. There is no acknowledgment of a debt unless there is “an admission that there is a debt … outstanding and unpaid”: Good v. Parry [1965] 2 QB 418 at 423.”
- [14]The question for me is therefore whether on an objective construction of the documents relied upon by the plaintiff together with the circumstances surrounding the creation of those documents, there is “an admission that there is a debt outstanding and unpaid”. In my opinion, there is no inconsistency in approaching the question thus with the obiter remarks of Dixon CJ, Webb and Fullagher JJ in Hipworth v. Mahar and Anor (1952) 87 CLR 335 at 340 where their Honours noted in referring to documents relied upon as acknowledgments:
“… Smith J. rightly held that this document could not be regarded as containing such an unequivocal admission as would amount to an acknowledgment of a presently subsisting debt.”
Conclusions
- [15]For present purposes, I am prepared to approach the question on the basis that the plaintiff is not confined to the documents referred to in paragraph 5A of its Amended Statement of Claim.
- [16]Mr Roney submits that there is at least one clear acknowledgment, and another which is less clear, in the document dated December 4, 2001 which is exhibited to Mr Everingham’s affidavit sworn the 10th October 2002 and filed by leave on the 14th October 2002 and which is referred to in paragraph 2(g) of his affidavit. The only reason that reference is made in the pleadings to a letter dated the 13th December 2001 is to meet any argument based on the fact that the letter dated the 4th December 2001 was marked “confidential and without prejudice”. No such argument was made by Mr Jarrett.
- [17]Mr Roney’s argument is that the statement at page 3 of the letter of the 4th December 2001:
- “35Noted. This will be part of the total discussions to resolve all issues to every parties satisfaction and allowing a proper framework to be put in place so that we can all move forward.”
is a clear admission that there is a debt outstanding and unpaid, and the statement
- “34At various and many times; ideas, discussions, agreements and a mixture of all three (and others) were undertaken by the various parties in various numbers etc to attempt to define both the working structure and the profit/cashflow allocations that would exist. Without being negative or inflammatory, we have not had time to analyse the background material to the content of the Schedule supplied but have no initial reason to argue with its accuracy or significance and accept the points made in both it and the November 28 letter in that context.”
constitutes such an admission, but not in such clear terms.
- [18]To understand the argument, it is necessary to read the whole of the documents to which these comments relate. The reference to 35 is a reference to a letter signed by Mr Macklin dated the 28th November 2001 (2(e) in Mr Everingham’s affidavit) in which he sais:
- “35I believe that Garry’s debt to Homesure standing at $54,564.08 as at 30 June 2001 (and accruing 10% simple interest thereafter) should be acknowledged and its discharge by some appropriate means taken up in our discussions.”
- [19]In the earlier letter signed by Mr Macklin (2(c) Mr Everingham’s affidavit) dated the 27th November 2001 he states in part at 33:
“I “flag” now for further consideration the issue of Garry McDowell’s debt to Homesure (which to 30 June 2001 is $54,564.08) …”
- [20]The alleged debt is referred to in the schedule attached to the 28th November 2001 letter at item 10 where it is described as a “loan” accruing interest at the rate of 10% whereas the agreement pleaded is not said to be a loan agreement and the interest rate is 15%. However, there is only one debt alleged so clearly it refers to monies said to be owing in the claim.
- [21]There is no dispute that the letter dated the 4th December 2001 is signed by the defendant. I agree with Mr Jarrett that as a matter of construction these documents do not constitute an admission by the defendant that there is a debt outstanding and unpaid. An examination of the whole of the document dated the 4th December 2001 reveals that the authors (one of whom was the defendant) use different terminology in dealing with the many and varied propositions in the Macklin letters. For example, on occasions the words “we acknowledge …” and “understand” and “understand and agreed” are used. The use of the word “noted” in paragraph 35 can only mean (as interpreted in the manner in which the defendant intended at the time): “I note that you (Mr Macklin) believe that the debt should be acknowledged and its discharge by some appropriate means taken up in our discussions.” Certainly, for what it is worth, Mr Macklin clearly did not regard the defendants response as an acknowledgement of the debt when he responded to the 4th December 2001 letter on the 6th December 2001 (Ex SJAM2 to the affidavit of Sebastiano John Anthony Miano sworn the 8th October 2002). At point 35 in that letter Mr Macklin says:
“I require Garry’s acknowledgement that his debt to Homesure stands at $54,564.08 as at 30 June 2001 and is accruing 10% simple interest thereafter. Your reply “notes” the assertion but does not signify acceptance or agreement.”
- [22]Similarly, the statements relied on in relation to point 34 in the December 4 letter in my opinion do not, as a matter of objective construction, amount to an admission by the defendant that the debt was outstanding and unpaid.
- [23]It follows that the defendant’s application for summary judgment must succeed and I order that judgment be entered for the defendant against the plaintiff with costs.