Beckensall v Cruickshanks[2010] QDC 494

DISTRICT COURT OF QUEENSLAND

1. [1]
   There are effectively two applications before the Court; firstly, for an order pursuant to rule 293 of the Uniform Civil Procedure Rules (“UCPR”) that the Court give judgment for the defendant against the plaintiff for all of the plaintiff’s claims; and, secondly, for an order in the alternative pursuant to rule 671 of the UCPR that the plaintiff give security for the defendant’s costs of and incidental to the proceedings in the amount of $50,000 or such other amount may be determined by the Court and an order that the plaintiff’s claim be stayed until such time as the plaintiff provides the security for costs.

2. [2]
   An amended statement of claim was filed on 21 January 2010. It alleges that at all relevant times the plaintiff owned management rights to the Sanctuary Shores apartments located at 1 Pinnaroo Street, Santa Barbara on the Gold Coast and operated the management rights from Unit 1 which was owned by the plaintiff. By a contract in writing dated 17 January 2008 (the “Unit Contract”) between the plaintiff as vendor and defendant as purchaser, the plaintiff agreed to sell and the defendant agreed to purchase Unit 1 for $300,000. The defendant paid to the deposit holders named in the contract (Qld Law Group) the deposit of $5,000. It is further claimed that by a contract of the same date (the “Business Contract”) between the plaintiff as vendor and the defendant as purchaser, the plaintiff agreed to sell and the defendant agreed to purchase the management rights and business name “Sanctuary Shores Apartments” for the sum of $145,000. The defendant paid to the deposit holder named in the contract (Qld Law Group) the deposit of $5,000. The Unit Contract and the Business Contract were claimed to be each subject to and conditional upon the contemporaneous completion of the other. It was an essential term of each contract that time was of the essence. The completion date for each contract was 1 February 2008.^[1]

3. [3]
   It is claimed that by letters dated 27 February 2008 from the plaintiff’s solicitors and 7 March 2008 from the defendant’s solicitors the parties agreed that the purchase price for the business would be reduced to $120,000, that both contracts were unconditional, and that completion would occur on 27 March 2008. The plaintiff’s solicitors nominated 12pm on 27 March 2008 for settlement at their offices at Southport. It is claimed that the defendant failed to attend at the appointed time.^[2]

4. [4]
   When contacted shortly after 1pm on 27 March 2008 the defendant’s solicitors advised, it is claimed, that they would attempt to attend to effect settlement of the contracts on 2pm on that date. It is claimed that the defendant’s solicitors failed to attend or settle or otherwise tender settlement on 27 March 2008, or any other time.^[3]

5. [5]
   The plaintiff claims that, in the premises, the defendant was in breach of an essential term of each of the contracts by failing to settle the contracts on 27 March 2008.^[4] Furthermore, the plaintiff claims that the defendant’s solicitors wrongfully purported to repudiate the contracts by letter dated 22 April 2008.^[5]

6. [6]
   The plaintiff, pursuant to clause 9.3 of the Unit Contract and clause 31.3 of the Business Contract purported to terminated both contracts by letter dated 30 April 2008.

7. [7]
   The plaintiff claims $173,559.09 as damages and liquidated damages for breach of contract together with interest.^[6]

8. [8]
   In his written submissions on behalf of the defendant Mr Keane states that a further extension of the settlement was made to 3 April 2008. No settlement statement was delivered for 3 April 2008. No place or time for settlement was scheduled and the plaintiff did not tender for sale, nor attend at the place for settlement being ready, willing and able to settle.^[7] On 22 November 2007 the plaintiff’s mortgagee commenced proceedings for the recovery of the property.^[8] On 26 Feburary 2008 the mortgagee obtained an enforcement warrant for possession of the property. On 5 April 2008 the mortgagee took possession of the property.^[9]

9. [9]
   On 30 April 2008 the plaintiff purported to terminate the Unit Contract and the Business Contract.^[10]

10. [10]
    The requirements for summary judgment by a defendant are set out in rule 293(2) of the UCPR which states:

“(2) If the court is satisfied that:

1. (a)
   the plaintiff has no real prospect of succeeding on all or a part of the plaintiff’s claim; and

2. (b)
   there is no need for a trial of the claim or the part of the claim;

the court may give judgment for the defendant against the plaintiff for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”

11. [11]
    The words of rule 293(2) of the UCPR are to be given their plain meaning. In Deputy Commissioner of Taxation v Salcedo^[11] Williams JA stated:

“[10] On the hearing of the appeal counsel for the appellant referred to Gray v Morris [2004] QCA 5; [2004] 2 Qd R 118 and in particular observations by Chesterman J at 126 and 127 that the onus was on the applicant for summary judgment to establish that the defence was ‘bound to fail’, ‘one which cannot possibly succeed’, one which had ‘no prospect of success’ and or one that was ‘hopeless.’ Those words were used in the context of reasoning by that learned judge based on the proposition that the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’) had not effected any substantial change in the approach to summary judgment from that which applied under the former Rules of the Supreme Court.

[11] With respect that approach is not correct. Rule 292 and r 293 brought about significant changes in the law and procedure relating to summary judgment. The wording of r 292 and r 293 is clearly based on the drafting used in Part 24 of the Civil Procedure Rules (UK) which came into force in the United Kingdom in 1999. In Swain v Hillman [2001] 1 All ER 91 the Court of Appeal had to consider rule 24.2, the equivalent of rule 292. Lord Woolf MR said at 92:

‘The words “no real prospect of succeeding” do not need any amplification, they speak for themselves. The word “real” distinguishes fanciful prospects of success or . . .they direct the court to the need to see whether there is a “realistic” as opposed to a “fanciful” prospect of success.’

Later, again speaking of the rule, he said at 94:

‘It saves expense; it achieves expedition; it avoids the court's resources being used up on cases where this serves no purpose, and I would add, generally, that it is in the interests of justice. If a claimant has a case which is bound to fail, then it is in the claimant's interests to know as soon as possible that that is the position. Likewise, if a claim is bound to succeed, a claimant should know that as soon as possible.’

In his reasons at 95, Pill LJ accepted that the term ‘real’ was used in contradistinction to ‘fanciful’. The third member of the court, Judge LJ, whilst recognising that summary judgment was a ‘serious step’, went on to say at 96:

‘This is simple language, not susceptible to much elaboration, even forensically. If there is a real prospect of success, the discretion to give summary judgment does not arise merely because the court concludes that success is improbable.’”^[12]

12. [12]
    In his oral submissions counsel for the defendant stated that while there may be some factual contention about whether there was an extension until 3 April 2008, there is no doubt that no election was made and that no step was taken by the plaintiff to make an election until in response to a letter from the defendant’s solicitors of 22 April where the defendant says that time is no longer of the essence, the time having passed. It was submitted that while there is disagreement as to whether the contract had been extended, the failure to do anything between 27 March and 30 April demonstrates a clear intention by the parties to treat it as still being on-foot. The offer to extend, whether accepted or not, shows an election consistent with continuing with the contract. However, by 5 April 2008 there was no right in the plaintiff to terminate because they were no longer ready, willing and able to complete the contract because they were no longer in possession of the land.

13. [13]
    I remain unpersuaded that the evidence in its present form clearly establishes that the parties considered the contract to still be on foot as at 27 March 2008. Evidence is required to illuminate the precise circumstances attending the failure to settle the contracts on 27 March and 3 April 2008. Indeed, Mr Keane conceded that there was some mix-up in settlement and informed the Court that “there are other matters that our client relies on and will rely on at a trial”.^[13] I repeat the view expressed to counsel during submissions that the whole history of the matter including all terms of telephone conversations between Ms Shand and Ms Hillier of the respective firms of solicitors together with the correspondence of 27 March and 28 March 2008 and 22 April 2008 should be considered. This can only be done after evidence is called.^[14] I am not satisfied that the plaintiff has no real prospect of succeeding on all or a part of his claim. It follows that a trial is needed to determine the claim.

Security for costs

14. [14]
    Counsel for the defendant has submitted that subsequent to the commencement of the proceedings the plaintiff has changed address and no longer resides in Queensland having moved to Western Australia. Further, it is said that there is a failure for some nine months to pay an invoice of $50 from the defendant for photocopying expenses. It is alleged that the plaintiff has no assets within the jurisdiction and that the defendant is concerned that the plaintiff is impecunious and will seek to avoid the payment of the defendant’s costs at the conclusion of the matter.

15. [15]
    Rule 670 of the UCPR provides that:

“(1) On application by a defendant, the court may order the plaintiff to give the security

considers appropriate for the defendant’s costs of and incidental to the proceeding.

(2) This rule applies subject to the provisions of these rules, particularly, rules 671 and 672.”

 Rule 671, relevantly provides that the court may order a plaintiff to give security for costs only if the Court is satisfied –

“(d) the plaintiff has changed address since the start of the proceeding and there is reason to

believe this was done to avoid the consequences of the proceeding; or

…

(h) the justice of the case requires the making of the order.”

16. [16]
    The material before the Court does not, in my view, support the drawing of an inference to the effect that the plaintiff’s change of address was brought about in order to avoid the consequences of the proceeding. Furthermore, although it may be accepted that the Court has an inherent discretion to order security for costs which is broad I am not persuaded that the justice of the case requires the making of such an order. No basis for concluding to the contrary has been demonstrated by the defendant. The suggestion that the failure to pay an invoice of $50 for photocopying demonstrates impecuniosity, in circumstances where the indebtedness is disputed, should be rejected.

Conclusion

17. [17]
    Both applications, that is, the application for summary judgment and the application for security for costs, are refused.

18. [18]
    The applicant (defendant) is to pay the costs of the respondent (plaintiff) in respect of both applications to be agreed or failing agreement to be assessed on the standard basis.