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Min Lung Pty Ltd v Moonace Pty Ltd[2007] QDC 146

Min Lung Pty Ltd v Moonace Pty Ltd[2007] QDC 146

 

DISTRICT COURT OF QUEENSLAND

 

CITATION:

Min Lung Pty Ltd v Moonace Pty Ltd & Ors [2007] QDC 146

PARTIES:

MIN LUNG PTY LTD ACN 104 592 127

Applicant/plaintiff

V

MOONACE PTY LTD ACN  087 307 864

Respondent/first defendant

And

OLRAC INVESTMENTS PTY LTD ACN 080 391 804

Respondent/second defendant

And

JOHN PATRICK DONNELLY

Respondent/third defendant

And

CARLO DE LUCA

Respondent/fourth defendant

And

O'BRIEN SERVICES PTY LTD ACN 105 403 370

Fifth Defendant

And

LINDSAY ROBERT O'BRIEN

Respondent/sixth defendant/first third party

And

SANDRA CHRISTINE O'BRIEN

Respondent/seventh defendant/second third party

FILE NO/S:

BD 696/2007

DIVISION:

Civil

PROCEEDING:

Application for summary judgment

ORIGINATING COURT:

District Court of Queensland, Brisbane

DELIVERED ON:

11 July 2007

DELIVERED AT:

Brisbane

HEARING DATE:

4 July 2007

JUDGE:

Alan Wilson SC, DCJ

ORDER:

  1. The first, second, third, fourth, sixth and seventh defendants pay to the plaintiff the sum of $96,055.20 including interest in the sum of $4,618.65; and
  2. The first, second, third, fourth, sixth and seventh defendants pay the plaintiff’s costs of and incidental to the application filed 14 June 2007 and the proceeding on the standard basis to be assessed.

CATCHWORDS:

PRACTICE AND PROCEDURE – PROCEDURE UNDER RULES OF COURT – SUMMARY JUDGMENT – UCPR r 292 – where plaintiff brought application for summary judgment – where defendants rely upon some matters pleaded in defence, but without particulars or evidence – onus upon applicant and respondent – nature of tests arising under UCPR r 292

UCPR, r 292

Cases considered:

ANZ Banking Group Ltd v Barry [1992] 2 Qd R 12

Bernstrom v NAB [2003] 1 Qd R 469

Clyde Contractors Pty Ltd v Northern Beaches Dev Pty Ltd [2001] QCA 314

Crisp v Crooks Michelle Peacock Stewart Pty Ltd [1999] 2 Qd R 573

Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232

Goldberg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711

Gray v Morris [2004] QCA 5

Jessup v Lawyers Private Mortgages Ltd [2006] QSC 003

Kingsley v Williams & Ors, unreported, District Court of Queensland, Forde DCJ, 23 August 1999

Kyabram Property & Investments Pty Ltd v Murray [2005] NSWCA 88

McPhee v Zarb & Ors [2002] QSC 004

Qld Pork Pty Ltd v Lott [2003] QCA 271

QUT v Project Constructions (Aust) Pty Ltd [2003] 1 Qd R 259

Swain v Hillman [2001] 1 All ER 91

TC Industrial Plant Pty Ltd v Robert’s Qld Pty Ltd (1963) 180 CLR 130

COUNSEL:

D A Skennar for applicant/plaintiff

M T Brady for respondent/first, second, third and fourth defendants

W Stinchcombe, law clerk by leave, for the respondent/sixth and seventh defendants

SOLICITORS:

McCarthy Palethorpe and Blanch for applicant/plaintiff

N R Barbi for respondent/first, second, third and fourth defendants

Worcester and Co for respondent/sixth and seventh defendants

  1. [1]
    The plaintiff seeks summary judgment against the first, second, third and fourth, and sixth and seventh, defendants. The first to fourth opposed the application; the sixth and seventh were granted leave to appear through a law clerk, Mr Stinchcombe, who raised no opposition to the application and said nothing more than that he had a ‘watching’ brief.
  1. [2]
    The claim relates to unpaid rent, outgoings, and GST pursuant to a lease granted by the plaintiff’s predecessors in title to the first and second defendants for a term of 10 years from July 2002.  The property was used to conduct a restaurant and takeaway business.  The lease was guaranteed by the third and fourth defendants. In July 2003 the first and second defendants sold the business to the fifth defendant and in September of that year the lease was assigned to that defendant.  The fifth defendant’s performance of the terms of the lease was guaranteed by the sixth and seventh defendants.
  1. [3]
    The plaintiff alleges that in June 2006 the fifth defendant ceased to pay rent and other moneys due under the lease. It commenced these proceedings on 12 March 2007.  The fifth defendant went into liquidation on 30 March 2007.  The first to fourth defendants obtained leave to prosecute third party proceedings against the sixth and seventh defendants on 16 June 2007.  The total amount currently alleged to be due is $96,055.25.
  1. [4]
    Under UCPR r 292(2) the court must be satisfied, before granting summary judgment, that the defendants have no real prospect of successfully defending the claim, and that there is no need for a trial of it.  The onus of establishing both limbs falls upon the applicant[1].  The precise nature of the test the rule sets has been the subject of some debate in the Queensland Supreme Court, and the Court of Appeal.
  1. [5]
    In McPhee v Zarb & Ors [2002] QSC 004 Wilson J said that summary judgment should only be awarded if the prospects of defending the claim or succeeding on it are so slim as to be fanciful.  In Gray v Morris [2004] QCA 5 Chesterman J opined, at [23], that the onus under the first limb of the rule is not satisfied unless the applicant has shown that the defence is hopeless, or bound to fail.
  1. [6]
    A less stringent test was, however, suggested by the Court of Appeal in Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232.  Williams JA said (at [17]):

… there has been a significant change brought about by the implementation of r 292 … the test for summary judgment is different, and the court must apply the words found in the rule.  To use other language to define the test … only diverts the decisionmaker from the relevant considerations.  But, and this underlines all that is contained in the UCPR, ultimately the rules are there to facilitate the fair and just resolution of matters in dispute.  Summary judgment will not be obtained as a matter of course and the judge determining such an application is essentially called upon to determine whether the respondent … has established some real prospect of succeeding at a trial; if that is established then the matter must go to trial 

  1. [7]
    In the same case Atkinson J said at [42]:

…in determining an application for summary judgment … apply the plain meaning of the words of those rules and not impose a gloss taken from the practice … that applied … before the … UCPR.

And, at [47]:

The test to be applied is that adopted … in Swain v Hillman … that is, the court must consider whether there exists a real, as opposed to a fanciful, prospect of success.

  1. [8]
    Chesterman J returned to the matter in Jessup v Lawyers Private Mortgages Ltd [2006] QSC 003:

[18] The difficulty with the approach taken in Salcedo is that it begs the question of what is meant by the words ‘no real prospect of success’. It may also be noted, in passing, that while eschewing the need to put a gloss upon the wording of the rule in order to arrive at their ‘plain and unambiguous meaning’ two of the judgments felt obliged to explain that a real prospect of success must be understood as being different from a fanciful prospect of success. That the rule needs this elaboration of meaning is, in my opinion, to admit that it is not plain an unambiguous. As much as one may like to deny it, it is to put a gloss upon the words of the rule.

[19] The real difficulty is not to understand what the language of UCPR r 292 signifies.  The difficulty is to know what test to apply in order to determine, without the investigative processes and procedures at trial, whether a party to litigation should suffer judgment against it …

[21] In practical terms I suspect the rule means (as the old rules meant) that summary judgment should not be given where the facts upon which the parties’ respective rights depend are disputed, or where the respondent to the application for summary judgment adduces evidence as to the existence of facts which, if proved, would establish a defence or a right to relief.  In other words, it is only where all the facts are known and/or established beyond controversy that the court should embark upon determining whether to give summary judgment.  Where relevant facts are controverted, or where it appears that the facts may exist which would affect a right of action or defence, there should be at trial to determine the facts.  This was the approach taken, in fact, in the cases which I analysed in my judgment in Gray

[22] It follows from what I have said that if the facts are settled and the respective rights of the parties turn upon questions of law, UCPR r 292 … would require the court to give judgment in advance of trial, even where the point may be difficult.  This conclusion involves a departure from the practice under the former rules …

  1. [9]
    In the context of the phrase appearing in the rule (‘no real prospect of success’) the word ‘real’ has the ordinary meaning, according to the dictionaries, of:

… actually present, not merely apparent; … having an existence in fact and not merely in appearance, thought or language; having an absolute and necessary, not merely a contingent, existence; … free from nonsense, affectation or pretense...; corresponding to actuality; correct, true. (Shorter Oxford Dictionary)

… true (rather than merely ostensible, nominal or apparent); … actual (rather than imaginary, ideal or fictitious); … actual as opposed to possible or potential. (The Macquarie Dictionary)

  1. [10]
    As both Williams JA and Atkinson J emphasised in Salcedo, it is of primary importance to apply the actual words found in the rule.  The Queensland Court of Appeal has thrice held[2] that this can be satisfactorily achieved by the use of the test adopted by Lord Woolfe MR in Swain v Hillman [2001] 1 All ER 91 at 92 – that the court must consider whether there exists a ‘realistic’ as opposed to a ‘fanciful’ prospect of success.  The usual meaning of the word ‘realistic’ (‘…interested or concerned with what is real or practical[3]) suggests that the phrase, as it is used in the rule, requires the court to consider the prospects from a standpoint of practicality.  That is unsurprising, in light of the announced philosophy of the UCPR expressed in r 5(1) and the fact r 292 appears in a portion of the Rules, Chapter 9, headed ‘Ending Proceedings Early’.
  1. [11]
    It might be thought, with respect, that to equate the phrase with words or terms like ‘hopeless’ or ‘bound to fail’ gives it a gravamen which goes beyond the ordinary meaning. The natural and ordinary meaning of ‘real’, used to describe prospects of success in the context of the rule, might be said to require a focus upon the tangible features of the case in the context of a fair and careful enquiry, rooted in practicality, whether the court can be satisfied that the plaintiff will succeed, and delay (and a trial) are futile.
  1. [12]
    In a careful argument Mr Brady of Counsel for the first to fourth defendants submitted that the claim here must fail against his clients because the plaintiff’s material failed to address, and expunge, matters raised in his clients’ defences; in particular:
  1. (a)
    that the plaintiff allowed building work to be done on the premises causing loss and damage to the business being operated there;[4]
  1. (b)
    the allegation that the plaintiff failed to advertise for and obtain alternative tenants;[5]
  1. (c)
    the allegation that the plaintiff failed to keep the first to fourth defendants up to date in relation to the fifth defendant’s arrears, resulting in those defendants losing the opportunity to take action to reduce the amount of the loss[6].
  1. [13]
    Mr Brady also contended that if the third party proceedings brought by the first to fourth defendants against the sixth and seventh is successful in full or in part, his clients will obtain either a complete indemnity or a substantial contribution from those defendants in respect of their liability and that is a matter which should be taken into account and, here, tells (in conjunction with the other deficits in the plaintiff’s material) against summary relief.
  1. [14]
    Before these issues are addressed it is convenient to deal with an ancillary submission made by Ms Skennar, Counsel for the plaintiff.  She contended that the first to fourth defendants have acknowledged liability to the plaintiff in correspondence to the sixth and seventh defendants, in these terms:

Despite the contents of your facsimile of 4 December 2006, our respective clients remain personally liable, both jointly and severally, and there will be no resolution of this matter unless there is a contribution by your clients and my respective clients.[7]

In context, however, investing this part of the letter with the properties of an open admission of absolute liability to the plaintiff is putting it too high; it was, rather, simply an acknowledgement that each of the first to fourth defendants, and the sixth and seventh defendants, are exposed to personal liability in respect of their obligations under the lease.

  1. [15]
    The allegation that building work caused unspecified loss and damage is raised in very terse terms in the defence of the first to fourth defendants. It is unparticularised and would, it might ordinarily be expected, have involved a claim by the fifth defendant and, if substantiated, might properly have been the subject of a counterclaim. Although the primary burden under the rule rests upon the plaintiff, once it has established a prima facie case an evidentiary onus shifts to the respondent; as Jones J said in Qld Pork Pty Ltd v Lott [2003] QCA 271 at pp 89:

[41] In this type of proceeding, as with an application under the former rules, the onus is on the application to prove the claim and to persuade the court that there is no real prospect of the opposite party succeeding.  In some circumstances a respondent to the application may be able to convince the court that the onus has not been discharged without filing any evidence at all.  But once a prima facie case has been made out entitling the applicant to judgment then an evidentiary onus shifts to the respondent.  Rule 295 of the UCPR especially provides that evidence may be given on information and belief, thus facilitating the discharge of that evidentiary onus.

  1. [16]
    I am persuaded that, adopting the Salcedo test, the plaintiff’s material establishes a prima facie right to summary judgment.  The notion that respondents to an application for that kind of relief who are faced, as here, with a persuasive case may simply plead an allegation about a fact, matter, or event said to create a defence (but without descending to any particularity or attempting to raise up a counterclaim) and thereby reduce, or even extinguish the plaintiff’s claim if the allegation is not rebutted by evidence from the plaintiff is not compelling.  Its logical concomitant is that any assertion raised by a defendant casts an onus back upon the plaintiff to adduce evidence which will extinguish it. 
  1. [17]
    While the burden of proof will always remain, principally, with the applicant the kind of bald allegation made here cannot prevail, nor have efficacy, without something of greater substance from its maker, or other appropriate source. As Williams JA said in Clyde Contractors Pty Ltd v Northern Beaches Dev Pty Ltd [2001] QCA 314 at p 5:

[21] There was an onus on the appellant to demonstrate that there was some issue to be tried or some other good reason for the matter to go to trial. (emphasis added)

While his Honour was not suggesting that evidence is essential, the statement illustrates the proposition that an assertion of a positive defence does not automatically create, without something more, an obligation on the plaintiff’s part to address it.

  1. [18]
    The allegation that the plaintiff failed to mitigate its loss is supported, again, by terse particulars that the plaintiff failed to advertise for or obtain alternate tenants. Again, however, the assertion is one which carries with it an obligation to demonstrate the failure, by evidence. The plea is, by its nature, one which attracts and carries an evidentiary burden; as Kitto, Windeyer and Owen JJ said in TC Industrial Plant Pty Ltd v Robert’s Qld Pty Ltd (1963) 180 CLR 130 at 138:

Next it was said that the plaintiff had failed to mitigate its damage in that it should, so it was said, have sought from the Commonwealth an extension of time for performance of the contract and made arrangements to obtain another crushing machine capable of carrying out the necessary work.  But it was for the defence to show that the plaintiff had failed to mitigate damages …

  1. [19]
    In Goldberg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 Sweeney & Ryan JJ said, at 714:

The onus remains on the plaintiff to prove, according to the appropriate measure, that he has suffered loss … if the defendant contends that the loss proved by the plaintiff could have been minimised or avoided altogether by the taking of some step which the plaintiff could reasonably have taken but did not take, the onus is on the defendant to make out that contention on the evidence.

  1. [20]
    The assertion that the plaintiff has failed or (as it is pleaded) refused, or neglected to keep the defendants ‘up to date in relation to the arrears and position’ about the fifth defendant’s alleged default, with the result that those defendants have lost the ‘opportunity to mitigate their loss’ was not supported by any reference to authority for the proposition that a duty of that kind rested on the plaintiff, and faces the practical difficulty that the guarantee itself specifies nothing more than payment on demand.  In the absence of a contrary submission, it is also reasonable to assume that the papers do not impose an obligation of the kind Mr Brady’s clients now assert; nor is there any persuasive basis for concluding that a term to that effect should be implied into the lease or guarantee.
  1. [21]
    It is also germane that a demand was made upon the first to fourth defendants in November 2006, five months before the proceedings commenced. There is no evidence they used that interval for the purpose for which, it was suggested in oral argument, they might have availed themselves had they known earlier – ie, to enter into negotiations with the fifth respondent about, say, reentering and taking possession of the premises.  In the face of utter silence from the first to fourth defendants about evidence which might attach some substance to these pleas, they are not persuasive. 
  1. [22]
    Finally the fact of the third party proceedings is relevant, but not necessarily determinative[8].  This is not a case in which the third parties (ie, the sixth and seventh defendants) are involved in a way which is quite separate and distinct from the relief principally sought.  They are already defendants, and arguably liable to pay.  The dispute in those proceedings concerns questions of indemnity or contribution.  There is no impediment to the separate resolution of that matter and it may, logically and without difficulty, continue notwithstanding judgments entered for the plaintiff here.[9] 
  1. [23]
    This discussion also shows the second arm of the rule is satisfied, and there is no need for a trial of any part of the plaintiff’s claims. At the conclusion of his submissions Mr Brady moved that, if summary judgment was allowed, there should nevertheless be a stay under UCPR r 300 pending the resolution of the third party issues between the defendants.  Ms Skennar was able to provide one case containing an example of a stay after summary judgment, State Bank of Victoria v Parry [1989] WAR 240 but the circumstances there were unusual, and quite different from those arising here.  Judgment was for almost $9 million, the third party proceedings were to be concluded within a very short time, and the third parties were not already defendants in the action proper.  It was those rather unusual circumstances which enabled the decision to be distinguished in two other cases she also provided – Kyabram Property & Investments Pty Ltd v Murray [2005] NSWCA 88, and Greenco Pty Ltd v Wilden Pty Ltd, unreported, Supreme Court of Western Australia, Full Court, 10 October 1997.  They are persuasive that the circumstances here, involving a number of defendants exposed to a similar obligation and, ultimately, nothing more than a dispute between them as to which should pay and in what proportions, is not a circumstance which properly attracts a stay.
  1. [24]
    No submissions were made, and no arguments were advanced on behalf of the sixth and seventh defendants. The plaintiff’s affidavit evidence and this analysis show it has satisfied both elements of the rule and is entitled to summary judgment against them, and the first to fourth defendants. There is no reason to depart from the usual rule that costs follow the event. I will hear further submissions about the appropriate form of order.

Footnotes

[1] ANZ Banking Group Ltd v Barry [1992] 2 Qd R 12, at 19.

[2] Salcedo (supra) at 242, per Atkinson J; QUT v Project Constructions (Aust) Pty Ltd [2003] 1 Qd R 259; Bernstrom v NAB [2003] 1 Qd R 469

[3]  The Macquarie Dictionary

[4]  Paragraph 3(b) of the defence of the first, second, third, and fourth defendants.

[5]  Paragraph  3(c).

[6]  Paragraph 3(d)

[7]  The letter is Exhibit CDL‑02 to the affidavit of De Luca filed 14 June 2007.

[8] Kingsley v Williams & Ors, unreported, District Court of Queensland, Forde DCJ, 23 August 1999 at para [20]

[9]  See Crisp v Crooks Michelle Peacock Stewart Pty Ltd [1999] 2 Qd R 573

Close

Editorial Notes

  • Published Case Name:

    Min Lung Pty Ltd v Moonace Pty Ltd & Ors

  • Shortened Case Name:

    Min Lung Pty Ltd v Moonace Pty Ltd

  • MNC:

    [2007] QDC 146

  • Court:

    QDC

  • Judge(s):

    Wilson DCJ

  • Date:

    11 Jul 2007

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Australia and New Zealand Banking Group Ltd v Barry[1992] 2 Qd R 12; [1991] QSCFC 83
2 citations
Bernstrom v National Australia Bank Ltd[2003] 1 Qd R 469; [2002] QCA 231
2 citations
Clyde Contractors P/L v Northern Beaches Dev. P/L [2001] QCA 314
2 citations
Crisp v Crooks Michelle Peacock Stewart Pty Ltd[1999] 2 Qd R 573; [1998] QSC 149
2 citations
Deputy Commissioner of Taxation v Salcedo[2005] 2 Qd R 232; [2005] QCA 227
4 citations
Goldburg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711
2 citations
Gray v Morris[2004] 2 Qd R 118; [2004] QCA 5
2 citations
Jessup v Lawyers Private Mortgages Ltd [2006] QSC 3
2 citations
Kyabram Property & Investments Pty Ltd v Murray [2005] NSWCA 88
2 citations
McPhee v Zarb [2002] QSC 4
2 citations
Queensland Pork Pty Ltd v Lott [2003] QCA 271
2 citations
Queensland University of Technology v Project Constructions (Aust) Pty Ltd (In Liq)[2003] 1 Qd R 259; [2002] QCA 224
2 citations
State Bank of Victoria v Parry (1989) WAR 240
1 citation
Swain v Hillman (2001) 1 All ER 91
2 citations
TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130
2 citations

Cases Citing

Case NameFull CitationFrequency
Currie v Meredith [2020] QDC 192 citations
Products For Industry P/L v Comgroup Supplies P/L [2014] QMC 131 citation
Summerfield Pty Ltd v Marsden [2008] QDC 701 citation
1

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