W & I Wright Nominees Pty Ltd v Haxview Pty Ltd
[2003] QDC 10
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- Unreported Judgment
- W & I Wright Nominees Pty Ltd v Haxview Pty Ltd[2003] QDC 10
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W & I Wright Nominees Pty Ltd v Haxview Pty Ltd[2003] QDC 10
W & I Wright Nominees Pty Ltd v Haxview Pty Ltd[2003] QDC 10
DISTRICT COURT OF QUEENSLAND
CITATION: | W & I Wright Nominees Pty Ltd v Haxview Pty Ltd & Ors [2003] QDC 010 |
PARTIES: | W & I WRIGHT NOMINEES PTY LTD Plaintiff And HAXVIEW PTY LTD A.C.N. 010 816 378 First Defendant And WENDY ANN WRIGHT Second Defendant |
FILE NO: | D5279 of 2001 |
DIVISION: | Civil Jurisdiction |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 19 February 2003 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 24 January 2003 |
JUDGE: | Judge O'Sullivan |
ORDER: | Application for Summary Judgment by the defendants is dismissed. The plaintiff is granted leave to file and serve within 14 days an Amended Claim to clarify the following:-
|
CATCHWORDS: | Summary judgement; Uniform Civil Procedure Rules 166, 168; deemed non-admissions; Particulars; undue influence; estoppel |
COUNSEL: | C J Forrest for the plaintiff P Hackett for the defendants |
SOLICITORS: | Conroy & Associates for the plaintiff Colwell Wright for the defendants |
- [1]This is an application by the defendants for summary judgment against the plaintiff, and in the alternative for the Amended Claim to be struck out pursuant to Rule 171.
Summary Judgment:
- [2]Rules 292 and 293 of the Uniform Civil Procedure Rules provide a new test for summary judgment. In order to succeed in an application for summary judgment the court must see whether the prospects of success on the claim are realistic as opposed to fanciful: Foodco Management Pty Ltd and Diaz Keinert Pty Ltd v Go My Travel Pty Ltd (2001) QSC 291. At paragraph 15 of that judgment Wilson J noted that the test is that of no real prospect of success, not of improbability of success. In McPhee v Zarb and LBS Holdings Pty Ltd and Australasian Theatrical Investments Pty Ltd (2002) QSC4 the test which was enunciated was that the prospects must be “so slim as to be fanciful”. This test was cited in Woodco Services Pty Ltd v John Holland Pty Ltd and Ports Corporation of Queensland (2002) QSC 264. In McPhee (supra) the court said that the new test under the Uniform Civil Procedure Rules called for a “more robust approach by the court,” consistent with Rule 5 of the Uniform Civil Procedure Rules.
- [3]In Smit v Chan (2001) QSC 70 McKenzie J noted that a defendant’s obligation is a “stringent one and the power must be exercised with great care”.
- [4]Counsel for the applicant defendants submits that the plaintiff is not in a position to call evidence to contradict the sworn assertions of the second defendant Wendy Ann Wright that the debt was forgiven. Thus, the best evidence is now before the court and there is no need for a trial pursuant to Rule 293(2)(b).
- [5]Counsel for the respondent plaintiff submits that there ought to be trial on the issue of the words used by the deceased to Wendy Ann Wright and their legal import: did they constitute forgiveness of the debt? He submits that the necessity to ascertain these matters particularly arises because of the plaintiff’s pleading of undue influence. He submits that it is not appropriate to deny the plaintiff the opportunity to cross-examine the second defendant, and to make submissions to a trial judge on matters of credibility. He further submits that it is relevant that directors of the plaintiff swear that they can find no documentary evidence corroborating or verifying the alleged forgiveness of the debt.
- [6]Counsel for the plaintiff submits that it is appropriate for a trial judge to have the opportunity to look at all the circumstances, including the nature of the Deeds, the way they were drawn and executed, and the fact that the name of the firm Colwell Wright was on the back of the first Deed. He submits that the plaintiff is entitled to test the honesty of the assertion by the second defendant that the debt was forgiven, especially as there are deficiencies in the documents which the plaintiff says can only be laid at the feet of the second defendant herself.
- [7]Counsel for the plaintiff submits that even if the trial judge finds that the words used were those asserted by Wendy Ann Wright, there still remains the matter of the legal effect of undue influence. Counsel now seeks to file a Reply, or to “amend the Claim in some way” so that it pleads estoppel against Wendy Ann Wright because of the undue influence.
- [8]Counsel for the plaintiff submits that a relationship of solicitor/client, whether it actually existed with respect to these particular transactions or not, gives rise to a presumption of undue influence in favour of the plaintiff that must be rebutted by the defendants. The plaintiff has pleaded undue influence in the Amended Claim, but Counsel conceded at the hearing that the pleading was “perhaps not done as fully as it might have been.” He submits that the presumption of undue influence cannot be rebutted by the untested assertions of the second defendant, and for this reason there must be a trial.
- [9]I consider that for the reasons advanced by Counsel for the plaintiff there is a need for a trial of the claim.
- [10]I dismiss the application for summary judgment by the defendants.
Deemed non-admissions:
- [11]The defendants also seek judgment on the pleadings because the plaintiff has not filed a Reply. Counsel for the defendant submits that pursuant to Rule 166(1) of the Uniform Civil Procedure Rules the allegations of fact, specifically forgiveness of the debt, are therefore deemed to be admitted.
- [12]Counsel for the defendants submits that Rule 168 does not apply. Rule 168(1) is as follows:
Every allegation of fact made in the last pleading filed and served before the time for filing and serving pleadings closes is taken to be the subject of a non-admission and rule 165(2) then applies.
- [13]Counsel for the defendants submits that the intention of Rule 168 is to protect parties until they deliver a Reply and/or Answer, not where they decline to deliver one in the face of positive allegations of fact inconsistent with the claim which are not responded to as required by Rule 166(1).
- [14]Counsel for the defendants submits that the words “every allegation of fact made in the last pleading filed and served before the time for filing and serving pleadings closes” in Rule 168(1) mean that the Rule does not apply after the time the pleadings close. It provides for a deemed non-admission in the 14-day period after the Defence is delivered and then ceases to have effect when the pleadings close, under Rule 169. He submitted that this interpretation is assisted by Woodco (supra), which dealt with Rule 166(5).
- [15]Counsel for the defendants submits that the interpretation of Counsel for the plaintiff is contrary to the spirit of Rules 166(3) and 166(4), and the Uniform Civil Procedure Rules require parties to plead the basis for non-admissions.
- [16]Counsel for the plaintiff submits that Rule 168 is not limited to interim protection during the period after the document is filed before the pleadings actually close. He submits that the last document in these proceedings was the Defence and every allegation not replied to by the plaintiff is deemed by the Rule to have not been admitted, and therefore is an issue in the trial.
- [17]Counsel for the plaintiff concedes that Rule 165(2) means that because there is no Reply this has consequences for the plaintiff, namely, that the plaintiff cannot call or give evidence in relation to the matter the subject of the non-admission. I agree that Rule 165(2) applies unless the plaintiff is given leave to file a Reply.
- [18]Counsel for the plaintiff also submits that his interpretation of Rule 168 is consistent with Rule 166(3) and Rule 166(4). He submits that these Rules relate to non-admissions actually pleaded in pleadings, unlike Rule 168 which provides for implied non-admissions. He submits that his interpretation is to be preferred to that of Counsel for the defendants whose interpretation would mean that pleadings could go on ad infinitum. He referred me to the judgment of McGill DCJ in Craig v Paul & Paul (2001) QDC 287.
- [19]Counsel for the plaintiff submits that the meaning of the words “filed and served before the time for filing and serving pleadings closes” in Rule 168 is that it enables identification of which pleading is being talked about – here, he submits, it is the Defence.
- [20]Counsel for the plaintiff says that if I do not accept his interpretation of Rule 168, and there is an implied non-admission, then he seeks leave to file a Reply.
- [21]I consider that Rule 168 has a different purpose to Rules 166(3)–(7). The latter concerns an actual pleading, unlike Rule 168 which concerns a notional joinder of issue and a deemed non-admission.
- [22]I consider that Rule 168(1) applies after the close of the pleadings, and its purpose is to avoid a mere joinder of issue. I consider that where (as here) the plaintiff is merely putting the defendant to proof of an allegation in the Defence, Rule 168 (1) creates a deemed non-admission.
- [23]I consider that there is no deemed admission under Rule 166(1) and the forgiveness of the debt is in issue on the pleadings.
Problems with the Plaintiff’s claim:
- [24]Counsel for the defendants submits that there are difficulties for the plaintiff which are independent of the application for summary judgment. The first of these is that the Deeds on which the plaintiff relies are not stamped, and s 487 Duties Act 2001 (formerly s 4A Stamp Act 1894) applies. He submits that pursuant to Hoggett and Smith and Cruison Pty Ltd and Woodsands Pty Ltd v O'Rourke and Thewton Nominees Pty Ltd (2000) QSC 387, the Deeds are a nullity incapable of founding a course of action. Holmes J there decided that both the physical document and the transaction underlying it are unavailable to found a pleading, relying on Dent v Moore (1919) 26 CLR 316. I agree with this submission.
- [25]Counsel for the defendants conceded that it is open to the plaintiff to stamp the documents at any time prior to trial.
- [26]Counsel for the defendants submitted that there are further difficulties with the documents. The first Deed of Loan is unsigned by the first defendant. It is also unsigned by the second defendant as guarantor, as required by s 56 of the Property Law Act. Counsel for the plaintiff submits that Wendy Ann Wright cannot escape the guarantee simply because she says “I didn’t sign that first document”. He says that if the two documents and the guarantee are put together, the statutory requirement is satisfied. He relies on Harvey v Edwards Dunlop (1927) 39 CLR 302 for the proposition that the need for written evidence of a guarantee can be satisfied by several documents if they are connected together.
- [27]Counsel for the defendants submits that the execution of the first Deed of Loan was not witnessed, as required by s 45 of the Property Law Act. He further submits that if the first Deed of Loan is not a Deed for the reasons he has stated, but rather is an agreement, there is the difficulty that there is no consideration. Counsel for the plaintiff submits that there is consideration, as stated in the documents themselves and by virtue of the fact that the monies were paid across pursuant to the agreement.
- [28]Counsel for the defendants submits that there are also problems with the Deed of Variation. It is not signed by either the plaintiff or the first defendant under seal pursuant to s 45 of the Property Law Act. The execution has not been witnessed pursuant to s 45 of the Property Law Act. If it is not a Deed, there is no consideration. It is not a guarantee pursuant to its terms, all it deals with is the reduction of the principal under the first Deed of Loan from $200,000 to $100,000.
- [29]Counsel for the defendants submits that the second Deed of Loan is irrelevant because neither of the defendants are parties to it.
- [30]Counsel for the defendants submits that by virtue of the various difficulties he has raised, there are no enforceable claims against the first defendant or the second defendant. He further submits that if the loan has been forgiven there can be no loss or damage to support a claim for negligence or undue influence.
- [31]Counsel for the plaintiff submits that the difficulties raised by Counsel for the defendants are valid, but the defendants are estopped from relying on them.
- [32]I consider that in the interests of justice the plaintiff ought to be given the opportunity to plead estoppel.
Particulars:
- [33]The defendants also apply to strike out the Amended Claim for lack of particularity in a number of respects.
Retainer:
- [34]The terms of the retainer are not pleaded in paragraph 7 of the Amended Claim, and the inability of the plaintiff to particularise the terms of the retainer is admitted by the plaintiff in the second paragraph 2 on page 3 of its Further and Better Particulars. Counsel for the plaintiff concedes that the retainer has not been fully particularised, and after discovery/ inspection there may be a need to provide further Particulars of a retainer.
Solicitor/client relationship:
- [35]Counsel for the defendants submits that the solicitor/client relationship between the deceased and Wendy Ann Wright has not been particularised in the Amended Claim, and this has not been improved upon in the Further and Better Particulars, paragraph 1(b)(i) – (v). He submits that the material exhibited to the affidavit of Seawright (DTS 21) supports the defendants’ claim that there was no retainer in respect of these transactions, and the deceased was an astute businesswoman who acted on her own behalf and knew what she was doing.
Retention of monies:
- [36]There is insufficient particularisation of the retention of the monies alleged against the second defendant as pleaded in paragraph 38 of the Amended Claim, and Counsel for the defendants submits there are at least three possible scenarios. Counsel for the plaintiff points out there are difficulties for the plaintiff in pleading these matters with greater particularity because of the lack of documentation. He concedes that they are insufficiently particularised at present.
Fiduciary relationship:
- [37]The fiduciary relationship has not been properly pleaded and particularised. Paragraph 44 of the Amended Claim pleads an implied term to use skill and care. Paragraph 46 pleads that the second defendant put her own interests ahead of the interests of any other party or entity in which she had an interest. It has not been pleaded how the duty to use skill and care is implied, nor the interests of the second defendant which were involved. The plaintiff is a trustee of a discretionary trust, and it is submitted that the interests of the second defendant are not properly pleaded in paragraph 47 of the Amended Claim. Wendy Ann Wright denies being a beneficiary of the Trust at all material times because she ceased to be such in November 1999.
Undue influence:
- [38]Counsel for the defendants submits that undue influence has not been properly pleaded and particularised. A conclusion of law is pleaded in paragraph 49 of the Amended Claim, and facts are not pleaded. This was conceded by Counsel for the plaintiff. Counsel for the plaintiff conceded that the enduring solicitor/client relationship to which he referred during the hearing has not been pleaded. He submits that it is not fatal to an undue influence claim if a specific retainer cannot be proved because “the mainspring of the equity is the habitual reliance and confidence arising from the relationship”: Meagher, Gummow and Lehane ‘Equity doctrines and remedies’ 4th ed, paragraph 15-065. He submitted Haxview Pty Ltd is caught up in undue influence conduct because of the relationship between Wendy Ann Wright and Haxview Pty Ltd.
- [39]Counsel for the defendants submits that as Mrs Wright is now dead it is impossible for the plaintiff to particularise the allegation of undue influence. Counsel for the plaintiff responds by saying that where there is the special category of solicitor-client, the burden of proof shifts across to the more powerful one, to rebut the presumption of the undue influence: Watkin v Combes (1922) 30 CLR 180; Meagher, Gummow and Lehane ‘Equity doctrines and remedies’ 4th ed, paragraph 15-060.
- [40]Counsel for the plaintiff submits that to rebut the presumption of undue influence the defendants would need to have evidence that Wendy Ann Wright advised Mrs Wright to obtain independent advice concerning execution and stamping. Wendy Ann Wright is estopped from relying on her own conduct in failing to properly execute and stamp.
- [41]I consider that in the interests of justice the plaintiff ought to be given the opportunity to plead estoppel and undue influence.
Orders:
- [42]Counsel for the defendants submits that the Amended Claim ought to be struck out, alternatively the plaintiff should be given leave to re-plead or alternatively ordered to provide Further and Better Particulars. His primary submission is of course that summary judgment ought to be granted to the defendants, but for the reasons I have outlined this application has failed.
- [43]I order:
- (a)Application for Summary Judgment by the defendants is dismissed.
- (b)The plaintiff is granted leave to file and serve within 14 days an Amended Claim to clarify the following:-
- (i)Fiduciary relationship; implied term to use skill and care
- (ii)Undue influence
- (iii)Estoppel
- (iv)Any matters related to (i) – (iii), and any matters raised at the hearing of the application for summary judgment.