Cherry v Knight[2005] QDC 24

HIS HONOUR: This is a summary judgement application by the plaintiff against the third defendant, Mr Brough, filed on the 24th day of December 2004 which, as Mr Campbell, appearing for the third defendant says, was a busy day in the Registry. His client filed an amended defence dated the previous day and responding to the original claim and statement of claim. He had been beaten to the Registry (on the basis of the order of documents filed) by the plaintiff's solicitor's filing the application and supporting material, also an amended claim and statement of claim.

Those are significant in adding to the claim as the principal relief sought a claim for specific performance of the share sale and purchase which underlies the proceeding. Further in the alternative damages for breach of contract are sought.

Whereas the defendant was entitled to amend his defence without any order of the Court under rule 378, the plaintiff was not entitled to amend his claim, as he purported to do, under rule 377, because, depending on the circumstances, the leave either of the Registrar or of a judge of the Court was necessary. Such leave has not been obtained. Mr Coveney indicates he will seek the leave now, the point of having being drawn to his instructing solicitor's attention by the third defendant's solicitors late last week.

The plaintiff sues on a written agreement, exhibited to the applicant, filed by him, of 10 shares in a company for $150,000. The first and second defendants, Mr and Mrs Knight, were to get five shares. Mr Brough was to get five shares. In his pleadings he has taken a different view of the agreement, separating it out into agreements relating to five shares for the Knights, and five shares for him - the consideration being appropriately halved.

He has no defence but seeks relief in third party proceedings against a gentlemen called Young who, it is asserted, agreed to purchase the shares from him. The plaintiff Mr Cherry's affidavit is the only evidence on the point and it asserts that there has been no contact with or even awareness of Mr Young.

In the end, Mr Campbell's resistance to the application comes down to fairly technical matters. He submits that although the Court's discretion to award summary judgement under rule 292 remains, the amendment of the statement of claim by the plaintiff may affect the way in which the discretion should be exercised "if the case as amended was substantially different from that originally pleaded": see per Wilson J in NAB Limited v Sinnathamby [2000] QSC 303 at paragraph [4]. I agree with the view expressed in that paragraph that the jurisdiction of the Court to award summary judgement remains.

Mr Brough has taken no step to plead to the amended statement of claim. The company which issued the shares is apparently in liquidation now. There has been no opportunity today, and it seems pointless to adjourn to create one, to explore the interesting question whether there are now any difficulties in effecting a transfer of shares in that company.

I am told from the Bar table that a transfer of the shares executed by the plaintiff has been made available to Mr Brough or his solicitors some time ago. What holds it up is the failure of Mr Brough to sign it and put it in to the company for registration. That information was made available on my inquiry as to whether the plaintiff was prepared to have incorporated in the order to be made today an undertaking to transfer the shares if that were required according to the justice of the case. It might be that the transfer ought to be to Mr Young rather than to Mr Brough, if one is called for at all. Mr Coveney is confident about offering an undertaking along those lines.

It would offer a way of serving justice in the sense of requiring the plaintiff to transfer what he is being paid for. I would not feel comfortable about ordering specific performance. Not only because of uncertainty about the appropriateness of doing so in light of the liquidation, but also because the requirements of rule 377 have not been met.

The plaintiff's real concern is to get his money. He has always had a monetary claim before the Court in the form of a damages claim. And indeed, the summary judgement application seeks judgement for a money sum. In my opinion, that ought to be the outcome of the application. In my opinion identification does not matter where that is characterised as moneys payable under the share agreement or as damages for breach of it. There is no defence. (I should mention that as far as the Knights are concerned the proceeding has already been settled.)

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HIS HONOUR: The judgement of the Court, given on the plaintiff's undertaking, by his Counsel, to execute and provide any further or better transfer of the subject shares to the third defendant or to Christopher Gordon Young, if so requested, is that the third defendant, pursuant to rule 292, pay to the plaintiff the amount of $59,682.20 which includes $4,682.20 interest to this day - and the plaintiff's costs of the proceeding including the application but not to include the costs of the amended claim filed on the 24th of December 2004 and to be reduced by the sum of $1,727.40 already paid for costs by the first and second defendants.