SNS Developments (Qld) Pty Ltd v Hayde
[2008] QDC 2
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- SNS Developments (Qld) Pty Ltd v Hayde[2008] QDC 2
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SNS Developments (Qld) Pty Ltd v Hayde[2008] QDC 2
SNS Developments (Qld) Pty Ltd v Hayde[2008] QDC 2
[2008] QDC 002
DISTRICT COURT
CIVIL JURISDICTION
JUDGE ROBERTSON
No D76 of 2007
SNS DEVELOPMENTS (QLD) PTY LTD ACN 105 518 885 (IN LIQUIDATION) | Plaintiff |
and | |
NORMAN STANLEY HAYDE | Defendant |
MAROOCHYDORE
DATE 11/01/2008
JUDGMENT
CATCHWORDS: | Summary judgment application by Company in liquidation – whether there is any real prospect of successful defence – whether agreed reduction in purchase price is unenforceable as being for past consideration and/or voidable as against the liquidator as an insolvent transaction or unreasonable director related transaction. The plaintiff company (in liquidation) applies for orders that the defendant's defence filed the 5th of July 2007 be struck out and that summary judgment be entered pursuant to rule 292 of the Uniform Civil Procedure Rules. |
Pursuant to sub-rule 2 of rule 292,
"If the Court is satisfied that the defendant has no real prospect of successfully defending all or a part of the plaintiff's claim and there is no need for a trial of the claim or the part of the claim, it may give judgment for the plaintiff against the defendant for all or the part of the plaintiff's claim and may make other orders as it considers appropriate."
Rule 292 has been judicially considered on a number of occasions and I adopt for the purposes of the proper approach to applications for summary judgment of this kind what I said in Kentwick v. Chandler (2007) QDC 179 at paragraphs 1 to 4.
"1.The plaintiff corporation (Kentwick Pty Ltd) is seeking summary judgment on its claim against the defendants (the Chandlers) and on the Chandlers' counter-claim.
2.It is common ground that the Chandlers leased a shop in the Cartwright Centre from Kentwick and entered into a written agreement dated 19 March 2004.The lease was for the period from 15 April 2004 until 31 January 2008.Rafter & O'Hagan was the managing agent of the centre pursuant to a written appointment by Kentwick on 18 March 2003 until 31 July 2006. Rafter & O'Hagan employed Steve Jeisman who was responsible for the day-to-day management of the centre during the relevant period and he had all relevant dealings with the defendants on behalf of Rafter & O'Hagan. It is common ground that in January 2006, the defendants vacated the premises in the Cartwright Centre and continued their business from other leased premises at Main Drive, Warana which Rafter & O'Hagan managed for an unrelated party. The plaintiff's claim is for unpaid rent and charges from March 2006 and for loss of a bargain less a discount for re-letting. It is accepted that if the plaintiff succeeds on its summary judgment application, the judgment sum should be $48,497.13.
THE RELEVANT LAW
3.Both rule 292 (summary judgment for plaintiff) and rule 293 (summary judgment for the defendant) use similar words. Rule 292 (relevantly) states:
'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 theplaintiff's claim and may make any other order the Court considers appropriate.'
4.The learned authors of Civil Procedure Queensland still quote Chesterman J's judgment in Gray v Morris [2004] 2 Qd.R 118 at 127 as authority for the proper principles to be applied in applications of this kind. Both parties accept that his Honour's analysis has been overtaken by the Court's judgment in Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd.R 232 in which Williams JA said (at 17): 'There has been a significant change brought about by the implementation of r292 and r293 of the UCPR. 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 decision-maker from the relevant considerations. But, and this underlies all that is contained in the UCPR, ultimately the rules are there to facilitate the fair and just resolution of the 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.'"
The Claim
The plaintiff's claim was filed on the 11th of April 2007. It claims $85,726.43 being the balance of the contract price payable by the defendant, Mr Hayde, pursuant to a written contract entered into between the parties on the 22nd of August 2006.
On the 5th of July 2007, solicitors filed a defence on behalf of Mr Hayde. Mr Hayde admits that there was an agreement on that date, however, he says that the purchase price was $770,000, not $790,000.
Paragraph 3 of the statement of claim alleges that pursuant to special conditions of the contract, the plaintiff agreed to lease the land from Mr Hayde for 12 months from the settlement date at a monthly rental of $5,045. This is disputed in paragraph 3 of the defence. The defendant alleges that prior to the 22nd of August 2006, there was an agreement that the plaintiff lease the land from the date of contract until the 31st of May 2007 at a monthly rental of $5,045.
Paragraph 4 of the statement of claim alleges a number of facts, namely that by correspondence between the solicitors, the contract was varied so that (a) settlement was fixed for the 9th of November 2006 and (b) the price payable with adjustments was $791,037.88.
Paragraph 4(c) alleges what is described as a first oral agreement between the parties to vary the contract whereby Mr Hayde would pay $670,000 on settlement and the balance as soon as practicable. Mr Hayde does not plead to this paragraph on the basis of alleged failures by the plaintiff to disclose and provide particulars. This pleading is not a proper denial but could be regarded as an imperfect non-admission, pursuant to rule 166 of the Uniform Civil Procedure Rules.
Paragraph 5 of the statement of claim pleads a second oral agreement in October 2006 "whereby in consideration of the defendant having served the plaintiff as a director of the plaintiff company from the 1st of June 2006, the plaintiff agreed to reduce the price by the sum of $20,000". The defendant admits that there was such a variation.
Mr Hayde admits that on the 9th of November 2006, the parties completed the contract in exchange for $669,995.95 in exchange for mortgage release and stamped transfer and he agrees that this was in part payment of the purchase price which he, of course, alleges is $770,000.
Paragraph 8 of the statement of claim raises a third oral agreement between the parties in or about the 5th of February 2007 to vary the contract by reducing the balance to be paid by the defendant by $35,315 "for rents payable by the plaintiff pursuant to special condition 3 of the contract". This is denied by Mr Hayde.
Pursuant to rule 169(b), the pleadings closed 14 days after service of the defence. The claim had been amended on the 11th of April 2007 simply to correct the name of the plaintiff. On the 5th of July 2007, i.e., the date of the filing of the defence, the claim was further amended to take into account that by then, Mr Cunningham and Mr Park had been appointed liquidators for the purposes of winding up the plaintiff.
This Pleading also raised an alternative argument to the effect that the second oral agreement was voidable as against the company in liquidation, essentially on the basis that because of its date and because of Mr Hayde's position as a director of the plaintiff, it was an insolvent transaction pursuant to various sections of the Corporations Act 2001.
Mr Hayde has not responded to the amended pleading. On the 11th of July 2007, Mr Hayde's solicitors advised the plaintiff's solicitors that they were no longer acting for him and that he would represent himself. The solicitors have not applied to the Court for an order that they be removed as solicitors for the defendant on the record nor has the defendant filed a notice that he is acting for himself.
It follows that his address for service remains that of his solicitors on the record. In accordance with the affidavits of the plaintiff's solicitors, Mr Beirne, I am satisfied that Mr Hayde has been served with the present application and supporting affidavits of Mr Beirne and Mr Cunningham filed on the 18th of December 2007 and the final affidavits of both men filed by leave today which were served by fax to the solicitors on the 8th of January 2008.
Mr Hayde's name was called when the matter came on this morning. He failed to appear. Mr Beirne told me that he also rang the solicitors but was put through to a secretary who knew nothing about the matter.
Discussion
It follows that on the pleadings there are a number of disputed factual issues that need to be considered in the light of the requirements of rule 292(2).
(a) The Contract Price
All the correspondence between the solicitors for the parties to the conveyance annexed to various affidavits of Mr Beirne and Mr Cunningham, refer to the contract price being $790,000. The front page of the original contract, and more importantly the copy of the stamped transfer which is annexed to Mr Cunningham's affidavit sworn on the 8th of Jan 2008, show the consideration as being $790,000. Clearly, the defendant would have no prospect of his succeeding in sustaining this point on trial.
(b) The terms of the lease back
Once again the contemporaneous documents directly contradict Mr Hayde's pleading that the lease back arrangement was to date from the date of the contract, as opposed to the date of settlement, as the plaintiff contends. For example, this is obvious from the copy of the special condition 3 which is apparently signed by Mr Hayde and is part of annexure JWC4 to Mr Cunningham's first affidavit.
In annexure JWC2 to Mr Cunningham's most recent affidavit, there is a reference to a fax sent by Mr Gardiner (former director of the plaintiff) with whom the defendant primarily dealt in relation to this transaction and Mr Hayde, which records the rental as being calculated from the 9th of November 2006. This document does refer to the lease back expiry date as being the 31st of May 2007 which on its face conflicts with the terms of special condition 3, however Mr Hayde's dispute in the pleading relates to the commencement date of the lease back agreement not the end date.
Clearly the documents support the plaintiff's allegation in this regard and there would be no real prospects of Mr Hayde successfully defending the claim on this basis.
(c) Amount paid on completion
That $670,000 was paid on completion is not expressly denied and is subject to a badly pleaded non-admission. Once again, it is clear from all the contemporaneous documents that $670,000 was paid on settlement as the plaintiff contends.
(d) The $20,000 for services as a director
It is probably correct that the past consideration for services as a director for the reduction in contract price by $20,000 thereby rendered this oral agreement to vary unenforceable based on the principles set out in Pao On v. Lauu Yiu Long [1980] AC 614 at 629; referred to in Robertson v. Unique Lifestyle Investments Pty Ltd [2007] BSCA 29 at paragraph 54; however I am satisfied at the very least that the second oral agreement is an unreasonable director related transaction pursuant to section 588FBA of the Corporations Act 2001 and/or an insolvent transaction pursuant to section 588FE of the Corporations Act 2001.
It follows that there is no real prospect of the defendant succeeding at trial and in my view, there is no need for a trial and I am satisfied that the calculations set out in paragraph 40 of Mr Beirne's written submission dated the 11th of Jan 2008, accurately record the quantum of the plaintiff's claim and I adopt and incorporate those calculations in these reasons.
"The plaintiff says that the defendant is indebted to the plaintiff as particularised paragraph 9 of the affidavit of John William Cunningham filed 18 December 2007 as follows: Balance price per settlement statement dated 8 November 2006 Exhibit JWC3 AffidavitJohn William Cunningham filed 07.01.08 $791,037.38 Less set off for rent pursuant to the terms and conditions of third oral agreement particularised at paragraph 8 of the statement of claim $35,315.00Balance $755,722.38 Less amount paid at completion $669,995.95 Balance payable by defendant $85,726.43"
Pursuant to the contract of sale and in particular, clause 9.6, the plaintiff is entitled to the default rate of interest published by the Queensland Law Society for the purposes of contracts of this kind for the month of November 2006 to today's date and once again, I agree with the careful calculations undertaken by Mr Beirne at paragraph 43 of his written submission and I award interest in the sum of $12,084.29.
...
HIS HONOUR: I will give judgment for the plaintiff against the defendant in the sum of $97,810.72 and I order the defendant to pay the plaintiff's costs of and incidental to the proceedings assessed on the standard basis.
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