Powling v Power Sports International Pty Ltd
[2006] QDC 173
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- Unreported Judgment
- Powling v Power Sports International Pty Ltd[2006] QDC 173
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Powling v Power Sports International Pty Ltd[2006] QDC 173
Powling v Power Sports International Pty Ltd[2006] QDC 173
DISTRICT COURT OF QUEENSLAND
CITATION: | Powling v Power Sports International Pty Ltd & Anor [2006] QDC 173 |
PARTIES: | FERNLEIGH JOHN POWLING Plaintiff/Applicant v POWER SPORTS INTERNATIONAL Pty Ltd (ACN 109 256 171) First Defendant/First Respondent and steven donald ross Second Defendant/Second Respondent |
FILE NO/S: | 576/2005 |
DIVISION: | Civil Jurisdiction |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Southport |
DELIVERED ON: | 23 March 2006 |
DELIVERED AT: | Southport |
HEARING DATE: | 13 February 2006 |
JUDGE: | Dearden DCJ |
ORDER: | Judgment for the plaintiff against the first and second defendants in the sum of $75,802.33. |
CATCHWORDS: | APPLICATION – Summary judgment – Estoppel – Whether deed represents the entire agreement – Variance of terms of the deed Uniform Civil Procedure Rules Cases cited: Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 Grey v Morris [2004] QCA 5 |
COUNSEL: | Mr L J Nevison for the plaintiff/applicant Mr S B Whitten for the first & second defendants/respondents |
SOLICITORS: | Sajen Legal for the plaintiff/applicant McDonald Balanda & Co for the first & second defendants/respondents |
- [1]This is an application by the applicant/plaintiff seeking summary judgment pursuant to Uniform Civil Procedure Rules (UCPR) r 292, or alternatively, an order that the defence of the first and second defendants be struck out pursuant to UCPR r 171(2).
Background
- [2]The proceedings commenced by the plaintiff by claim and statement of claim in this Court on 14 October 2005, seeks judgment in the amount of $71,958, plus interest and costs arising out of a deed of settlement between the plaintiff and the first and second defendants, dated 25 July 2005[1]. The first and second defendants admit that a deed of settlement was entered into between the plaintiff and the first and second defendants on 25 July 2005[2].
- [3]The first and second defendants, although acknowledging that each of them entered the deed of settlement, seek to defend the claim on the following grounds:
- (a)the deed does not acknowledge indebtedness by the first and second defendants to the plaintiff in the sum of $76,958 as alleged[3];
- (b)
- (c)an issue estoppel arises as a result of the plaintiff’s discontinuance of an earlier District Court proceeding [which the deed of settlement purports to settle][5];
- (d)
- (e)
- (f)
- (g)the deed represented the entire agreement and understanding between the parties in relation to the sum of $76,958 claimed which was compromised to $50,440[9];
- (h)
- [4]The deed of settlement was entered into by the plaintiff and the defendants to compromise a District Court claim between the plaintiff and the second defendant filed in the Southport District Court on 2 June 2005, and a creditor’s statutory demand for payment of debt in respect of the first defendant dated 23 May 2005[11].
THE LAW
- [5]There is, it appears, some differences of opinion in the Supreme Court (Qld) and the Court of Appeal (Qld) as to the approach of a Court to a summary judgment application under UCPR rr 292 and 293.
- [6]UCPR r 292 relevantly provides:
“…
[2] If the Court is satisfied that –
(a)the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and
(b)there is no need for a trial of the claim or the part of the claim;
the Court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the Court considers appropriate.”
- [7]Chesterman J in Grey v Morris[12]takes the view that summary judgment can only be given “where it is just to do so and it will not be just to deprive a party of a trial unless it can be seen that their case is hopeless, or bound to fail”[13]. However, in Deputy Commissioner of Taxation v Salcedo[14]Williams JA held that “The judge determining [a summary judgment application] is essentially called upon to determine whether the respondent to the application has established some real prospect of succeeding at a trial”[15]. Atkinson J, in the same case, states that “The Court must consider whether there exists a real, as opposed to a fanciful, prospect of success.” Her Honour goes on to state that “If there is no real prospect that a party will be successful in all or part of a claim, and there is no need for a trial, then ordinarily the other party is entitled to judgment”[16]. It is clear, given the current state of authorities, that the views expressed by Williams JA and Atkinson J in Deputy Commissioner of Taxation v Salcedo[17]encapsulate the appropriate tests to be applied by this Court in considering the application by the applicant/plaintiff.
REAL PROSPECTS OF SUCCESS
- [8]The issue that this Court then has to address is whether any or all of the grounds of defence raised by the defendants amount to a “real as opposed to a fanciful, prospect of success”[18].
- [9]It becomes necessary, therefore, to examine the grounds of the defences pleaded by the first and second defendants to ascertain whether one or more of those grounds reveal a real prospect of success.
(a)The deed does not acknowledge indebtedness by the defendants to the plaintiff in the sum of $76,958 as alleged.
- [10]There is no doubt that the deed of settlement could have been drafted more felicitously. However, in my view, a careful reading of the “Recitals” section of the deed, together with the operative agreement section of the deed, indicates that the total amount of $76,958 claimed by “the creditor” (the plaintiff in these proceedings) is defined as “the amount due”.
- [11]Having defined the sum of $76,958 as “the amount due” in recital pr A, it is then referred to again in recital paragraph B, which states that “It is alleged by the creditor that in breach of the loan agreement, the debtors have not repaid the amount due” (my emphasis).
- [12]The substantive clauses of the agreement then provide that upon payment of the sum of $50,440, commencing with an initial payment of $25,440 on 15 July 2005, and five subsequent payments of $5,000 each on specified dates between 31 July and 30 September[19], “the creditor will release and forever hold harmless, the debtors in respect of the amount due (my emphasis) and any other amounts, including a demand for damages, loan, interest or costs arising out of the matters, facts and circumstances referred to in the Creditor’s Statutory Demand for Payment dated 23 May 2005 and District Court of Queensland statement of claim, filed at Southport 286/05, filed 2 June 2005”[20].
- [13]I note that a careful examination of the deed of settlement indicates that after defining the amount of $76,958 as “the amount due” in recital paragraph A, the term “the amount due” is then referred to in recital paragraph B and clauses 4 and 14 of the deed of settlement. Although there would have been more clarity, no doubt, if the parties had specified a monetary figure in clause 4 as being the sum that was “immediately due and payable” in the event of failure to make specified payments; it is, in my view, not possible to interpret the deed, as worded, other than that the phrase “the amount due” refers to the original (claimed) sum of $76,958. There is a clear logic, in any event, in defining ..
(b)The deed is not enforceable at law.
- [14]The deed of settlement, on its face, purports to represent “the entire agreement and understanding between the parties in relation to the subject matter of [the] deed”[21], and it is clear that the deed purports to settle an asserted claim by the plaintiff against the defendants for a larger sum ($76,958) by accepting a smaller sum ($50,000 + $440 legal costs[22]) by which payment (spread out over specified dates[23]), the plaintiff agreed to discontinue the District Court proceedings against the second defendant[24]; to take no further steps in respect of the Creditor’s Statutory Demand for Payment of debt in respect of the first defendant[25]; to fully release both the first and second defendants in respect of “the amount due” and “any other amounts … arising out of the matters, facts and circumstances” referred to in the Creditor’s Statutory Demand for Payment and the Southport District Court proceedings[26]; with the deed being able to be pleaded as a bar to any further proceedings in respect of the Creditor’s Statutory Demand for Payment and the District Court proceedings at Southport[27]. It is clear that the deed of settlement falls within the category of accord and satisfaction[28]and the plaintiff is therefore entitled to sue on the agreement and recover in accordance with the terms of the deed, as I have construed it. There is, in my view, no basis for the ground of the defence that the deed is not enforceable at law.
(c) Estoppel.
- [15]It is clear that the applicant/plaintiff sues in reliance on the deed of settlement and not in respect of the original loan agreement which was the subject of the proceedings encapsulated in the District Court, Southport claim 286/05, and the Creditor’s Statutory Demand for Payment dated 23 May 2005. There is, in my view, no basis for this ground of the defence.
(d) Time was not of the essence of the deed or was expressly waived by the plaintiff.
- [16]The first and second defendants argue that because clause 1 of the deed required the first payment to be made 10 days before the execution of the deed, then even though clause 7 of the deed states that “time will at all time remain the essence of this agreement,” that clause should be read down. In my view, it would be an extraordinary conclusion to argue that time was no longer “the essence of this agreement” where the first and second defendants were clearly, at the time, seeking the benefits of the deed of settlement including a reduced settlement amount, the discontinuance of the Creditor’s Statutory Demand for Payment of debt and the District Court proceedings 286/05 in the Southport Registry, as well as providing a bar to any further proceedings over the matters the subject of the original dispute. In my view, time was stated to be of the essence[29]and remained of the essence. The assertion that the plaintiff has expressly waived any stipulation as to time is unsupportable. The defendants clearly fell into breach in failing to pay the instalment amounts on the dates specified in the deed and as a consequence, the plaintiff was entitled to sue on the deed.
(e)The plaintiff agreed to vary the terms of the deed by accepting the sum of $5,000.
- [17]The fact that the plaintiff accepted payment of $5,000 (incidentally, I observe the only payment made by the defendants pursuant to the deed) does not, either explicitly or implicitly, in my view, vary the terms of the deed. As Mr Nevison, counsel for the applicant/plaintiff succinctly puts it in his submissions, “There was no agreement by the plaintiff, nor was any requested by the defendants, to vary the terms of the deed”[30]. There is no basis for this ground of the defence.
(f)Any claim by the plaintiff was limited to the compromised balance owing in the sum of $45,440.
- [18]As I have set out above, I consider a careful reading of recital paragraph A leads to the conclusion that the defined term “the amount due” is the disputed amount of $76,958. That defined term which is then utilised in recital paragraph B and clauses 4 and 14 of the deed itself[31]. Clause 4 makes it clear that non-payment of the reduced sum of $50,440[32]would result in “the unpaid component of the amount due[33]” becoming immediately due and payable, together with interest at a rate of 10 per cent from the date of the deed. That, in my view, leaves open the inescapable conclusion that the amount due, given non-payment in accordance with the terms of the deed, is an amount of $71,958 (i.e. $76,958 less the acknowledged payment of $5,000). On any view of it, this does not amount to a penalty[34]but rather, is the anticipated outcome of the bargain that was struck between the parties and encapsulated in the deed.
(g)The deed represented the entire agreement and understanding between the parties.
- [19]The deed, at clause 10[35]specifically provides “This deed represents the entire agreement and understand between the parties in relation to the subject matter of this deed.” In my view, there is no basis for the Court to look outside of the terms of the deed of settlement, and the Court is obliged to construe the deed in its own terms. Although, as I have indicated above, the deed could have been drafted with more felicity, I believe it is inescapable that the deed should be construed as settling a disputed “amount due” of $76,958 by instalment payments totalling $50,440, with a consequence that in default, the entire amount of $76,958 plus interest (less any payments made pursuant to the deed) was payable. Apart from ascertaining the amount or amounts paid pursuant to the deed, the Court is not required to and has no need to look outside the terms of the deed in order to construe the agreement on which the plaintiff has sued, and pursuant to which an assessment is to be made as to whether the first and second defendants have “no real prospect of [a successful defence]”[36]. This ground of the defence must fail.
(h)The deed is pleaded as a bar to this proceeding.
- [20]It is, in my view, a complete nonsense to argue that the wording of clause 15 could be interpreted as a bar to proceedings pursuant to the deed of settlement, as opposed to its clear intention, which is as a bar to any further proceedings “in respect of the matters, facts and circumstances referred to in the Creditor’s Statutory Demand for Payment dated 23 May 2005 and the District Court of Queensland proceedings at Southport, 286/05, filed 2 June 2005”[37]. This ground of the defence must fail.
CONCLUSION
- [21]It follows inevitably from my assessment of each of the grounds of defence set out above, that neither the first defendant nor the second defendant has any “real prospect of successfully defending all or a part of the plaintiff’s claim”[38]. I conclude, in addition, that there is no need for a trial of the claim. Accordingly I give judgment for the plaintiff against the first and second defendants for the totality of the plaintiff’s claim.
Order
- [22]I give judgment for the plaintiff against the first and second defendants in the sum of $71,958, plus interest of $3,844.33, a total of $75,802.33.
- [23]I will hear the parties on costs.
Footnotes
[1] Exhibit FJP1 and para 2; affidavit of Fernleigh Powling sworn 9 January 2006
[2] Para 2(a) of the defence of the first defendant; para 2(a) of the defence of the second defendant
[3] Para 2(b) of the defence of the first defendant; para 2(b) of the defence of the second defendant
[4] Para 2(c) of the defence of the first defendant; para 2(c) of the defence of the second defendant
[5] Para 2(d) of the defence of the first defendant; para 2(d) of the defence of the second defendant
[6] Para 2(e)(i) of the defence of the first defendant; para 2(e)(i) of the defence of the second defendant
[7] Para 2(e)(ii) of the defence of the first defendant; para 2(e)(ii) of the defence of the second defendant
[8] Para 2(e)(iii) of the defence of the first defendant; para 2(e)(iii) of the defence of the second defendant
[9] Para 2(e)(iv) of the defence of the first defendant; para 2(e)(iv) of the defence of the second defendant
[10] Para 2(e)(v) of the defence of the first defendant; para 2(e)(iv) of the defence of the second defendant
[11] Exhibit AJK1 and para 5, affidavit of Antony Knox sworn 9 February 2006
[12] [2004] QCA 5
[13] [2004] QCA 5 per Chesterman J at para 23
[14] [2005] QCA 227
[15] Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 per Williams JA at para 17
[16] Deputy Commissioner of Taxation v Salcedo [2005] QCA227 per Atkinson J at para 47
[17] [2005] QCA 227
[18] Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 per Atkinson J at para 47
[19] Exhibit FJP1, clause 2; affidavit of Fernleigh John Powling sworn 9 January 2006
[20] Exhibit FJP1, clause 4; affidavit of Fernleigh John Powling sworn 9 January 2006
[21] Exhibit FJP1, clause 10; affidavit of Fernleigh John Powling sworn 9 January 2006
[22] Exhibit FJP1, clauses 1 and 5; affidavit of Fernleigh John Powling sworn 9 January 2006
[23] Exhibit FJP1, clauses 1 and 2; affidavit of Fernleigh John Powling sworn 9 January 2006
[24] Exhibit FJP1, clause 12; affidavit of Fernleigh John Powling sworn 9 January 2006
[25] Exhibit FJP1, clause 13; affidavit of Fernleigh John Powling sworn 9 January 2006
[26] Exhibit FJP1, claus 14; affidavit of Fernleigh John Powling sworn 9 January 2006
[27] Exhibit FJP1, clause 15; affidavit of Fernleigh John Powling sworn 9 January 2006
[28] Osborn v McDermott [1998] 3VRI, 10-11
[29] Exhibit FJP1, clause 7; affidavit of Fernleigh John Powling sworn 9 January 2006
[30] Outline of argument – applicant/plaintiff, p 5
[31] Exhibit FJP1 to the affidavit of Fernleigh John Powling sworn 9 January 2006
[32] Exhibit FJP1, clause 1; affidavit of Fernleigh John Powling sworn 9 January 2006
[33] Exhibit FJP1, clause 4; affidavit of Fernleigh John Powling sworn 9 January 2006
[34] Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79
[35] Exhibit FJP1; affidavit of Fernleigh John Powling sworn 9 January 2006
[36] UCPR r 292(2)
[37] Exhibit FJP1, clause 15; affidavit of Fernleigh John Powling sworn 9 January 2006
[38] UCPR r 292(2)(a)