Roll Form Industries Pty Ltd v WBE Engineering Group Pty Ltd
[2012] QDC 333
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- Unreported Judgment
- Roll Form Industries Pty Ltd v WBE Engineering Group Pty Ltd[2012] QDC 333
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Roll Form Industries Pty Ltd v WBE Engineering Group Pty Ltd[2012] QDC 333
Roll Form Industries Pty Ltd v WBE Engineering Group Pty Ltd[2012] QDC 333
DISTRICT COURT OF QUEENSLAND
CITATION: | Roll Form Industries Pty Ltd v WBE Engineering Group Pty Ltd [2012] QDC 333 |
PARTIES: | ROLL FORM INDUSTRIES PTY LTD (applicant/plaintiff) v WBE ENGINEERING GROUP PTY LTD (respondent/defendant) |
FILE NO: | 2787/12 |
DIVISION: | Civil |
PROCEEDING: | Application for Summary Judgement |
ORIGINATING COURT: | Brisbane |
DELIVERED ON: | 7 November 2012 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 October 2012 |
JUDGE: | Robin QC, DCJ |
ORDER: | Application dismissed |
CATCHWORDS: | Uniform Civil Procedure Rules r 292 Claim for price of goods (or damages for non-payment) – defence based on alleged overcharging of defendant and of the previous owner of the business supplied in respect of transactions going back years – whether very late deed of assignment of its rights by previous owner to defendant was valid. |
COUNSEL: | Mr M. D. Martin for the applicant Mr D. Atkinson for the respondent |
SOLICITORS: | Shand Taylor Lawyers for the applicant Wonderley & Hall Solicitors for the respondent |
- [1]Before the court is the plaintiff’s application for summary judgment pursuant to r 292 which was filed on 27 December 2012. It seeks judgment for $201,345.88 plus interest and costs on the indemnity basis. In the alternative it is sought that most of the defence and counterclaim be struck out under r 171.
- [2]The plaintiff has proceeded expeditiously, its claim for that amount for breach of contract, in the alternative money due and owing for goods sold and delivered on various dates from January to April this year, having been issued on 13 July 2012. What is sued for is the balance of invoice prices, less $31,770.91 paid on 20 June 2012.
- [3]By admitting paragraphs 6 and 14 of the Statement of Claim, the defence effectively admits that the relevant goods were delivered. It was filed with the notice of intention to defend on 21 August 2012.
- [4]The substantive defence, pleaded in terms of “entitlement to restitution” is that the plaintiff has overcharged (and been paid accordingly) for goods earlier supplied to the defendant, and, indeed, before that supplied from a date in 2009 to 1 July 2011 to a company called Waterbrook Enterprises Pty Ltd at a business it operated in Perth. The “Perth premises” are pleaded to have commenced operations around 2008, by way of expansion of a long established business called “WBE Engineering” based in Brisbane. It is pleaded that early in 2009 the plaintiff indicated it would seek slightly higher prices for goods supplied to Perth and that Waterbrook agreed. A new pricelist published in February 2009 reflected the increase which came to be charged and paid for.
- [5]The defence refers to two later pricelists which did not provide for special pricing for Perth. The plaintiff continued to charge (and receive) higher prices for goods supplied to Perth. It is asserted that at relevant times, the Brisbane rate should have applied to supplies to Perth, that Waterbrook and the defendant have paid $334,305.50 more for supplies to Perth than the plaintiff was entitled to. The defence contains the following:-
“Entitlement to restitution
- At no time before in or about February 2012 was Waterbrook or the defendant aware that the plaintiff had been invoicing for supply to the Perth premises at rates:
- (a)that were not in accordance with any agreement between the plaintiff and Waterbrook or WBE;
- (b)to which the plaintiff had no entitlement.
- As a consequence of the matter pleaded in paragraph 20, above, Waterbrook paid all invoices issued to it by the plaintiff for supply to the Perth premises under a mistake of fact or a mistake of law as to the plaintiff’s entitlement to the amounts charged in its invoices.
- As a consequence of the matter pleaded in paragraph 20, above, the defendant paid in full all invoices issued to it by the plaintiff, save for the invoices pleaded in paragraphs 5 and 7 of the Statement of Claim, for supply to the Perth premises under a mistake of fact or a mistake of law as to the plaintiff’s entitlement to the amounts charged in its invoices.
- As a consequence of the matters pleaded in paragraphs 20 to 22, above:
- (a)the plaintiff has been unjustly enriched at the expense of Waterbrook by the amount that it has overcharged Waterbrook for supply to the Perth premises.
- (b)the plaintiff has been unjustly enriched at the expense of the defendant by the amount that it has overcharged the defendant, and the defendant has paid, for supply to the Perth premises;
- (c)as at, at least, 30 June 2011, Waterbrook had a right to restitution of the difference between the amount that it had paid to the plaintiff for supply to the Perth premises and the amount which it should have been charged in accordance with its agreements with the plaintiff (Waterbrook’s right to restitution);
- (d)the defendant has a right to restitution of the difference between the amount that it has paid to the plaintiff for supply to the Perth premises and the amount which it should have been charged in accordance with its agreements with the plaintiff.
…
Transfer of business
- On or about 1 July 2011, the business was transferred from Waterbrook to the defendant.
- On or about 20 June 2011 or, alternatively, 26 July 2011, Waterbrook and the defendant notified the plaintiff that the defendant had taken over the business.”
- [6]Mr Johnson’s affidavit shows that he established Waterbrook in 1996 and began dealing with the plaintiff around the year 2000. The relationship became close, to the extent that for some purposes the plaintiff made use of the defendant’s premises. Most of the dealings were verbal but there was apparently a “2000 credit application” or “2000 credit agreement” (see paragraph 12(b)) referred to in the Reply and Answer filed 5 September 2012. The defendant was, it seems, incorporated to take over Waterbrook’s business on the advice of Mr Johnson’s accountant; there is also a new holding company, David and Sophia Pty Ltd. The parties made a new agreement for supply and delivery of goods to the defendant on credit encapsulated in an “Application for Credit Account” dated 26 July 2011.
- [7]The defence and counterclaim appears to be based on overcharging (leading to unjust enrichment of the plaintiff) for “supply to the Perth premises” which is said to lead to “Waterbrook’s right to restitution” for the early period and a similar right in the defendant later on.
- [8]As presently advised, I am sympathetic to the plaintiff’s pleaded uncertainty (in its reply) as to the implications of its allegedly being told “that the defendant had taken over the business.” The following paragraph in the defendant’s pleading (filed with the notice of intention to defend on 21 August 2012) was:
“30. If the effect of the transfer of the business was not to assign Waterbrook’s right to restitution to the defendant then the defendant will take immediate steps to effect such an assignment.”
- [9]An affidavit of Mr Johnson filed on 11 October 2012 exhibits a deed of assignment in the following terms:
“DEED OF ASSIGNMENT
This Deed is made on 10 October, 2012:
BETWEEN:
WATERBROOK ENTERPRISES PTY LTD ACN 073 120 260 (the Assignor)
AND
WBE ENGINEERING GROUP PTY LTD ACN 146 505 759 (the Assignee)
Recitals:
A. On or about 13 July 2000, Waterbrook entered into an agreement in writing with Roll Form Industries Pty Ltd ACN 090 930 626 (RFI) pursuant to which RFI would supply goods on credit to the Assignor (the Contract).
B. Pursuant to the Contract, RFI supplied goods to the Assignor at its Perth premises.
C. The Assignor and the Assignee believe that the Assignor was overcharged by RFI for the goods supplied to the Assignor at its Perth premises pursuant to the Contract.
D. From on or about 1 July 2011, the Assignee commenced operating the business that had, until that time, been operated by the Assignor under the name “WBE Engineering”.
E. The Assignor wishes to assign to the Assignee all of its rights under and in relation to the Contract and to recover the overpayments that the Assignor and the Assignee believe have been made to RFI by the Assignor.
Operative Terms:
- The Assignee hereby assigns absolutely to the Assignee with immediate effect:
- (a)all of the Assignor’s right, title and interest under the Contract;
- (b)insofar as they are capable of being assigned as a matter of law, all of the Assignor’s rights against RFI, including any chose in action, restitutionary right, or right to recover any part of any payment made to RFI whether as monies had and received or otherwise.
- The Assignee covenants with the Assignor to indemnify and keep indemnified on a full indemnity basis the Assignor from and against any liability incurred by the Assignor as a result of any action, demand, claim or proceeding against the Assignor by RFI under or in respect of the Contract.
- IN WITNESS the parties have executed this Deed on the date written above.”
- [10]Analyses of invoices have, the plaintiff concedes, shown that the amount of the “Waterbrook setoff”, as it was called, is (at least for purposes of obtaining a summary judgment) $31,677.43. Mr Martin, for the plaintiff, presents an argument that the purported assignment fails, being assignment of a “bare right of action”, that there ought to be judgement for that amount.
- [11]I understood the parties to accept (at all events they had little option but to accept) the statement of the “plurality” (French CJ, Crennan and Kiefel JJ) in Equuscorp Pty Ltd v Haxton (2012) 286 ALR 12 at [52]-[53]:
“[52] Australian authority on the assignability of restitutionary rights is sparse. In Mutual Pools & Staff Pty Ltd v The Commonwealth, Mason CJ observed, without elaboration, that a claim for restitution of taxes mistakenly paid was not based on a contractual right and was not assignable. On the other hand, Brennan J referred to a debt owed by the Commonwealth under an agreement or in restitution as "a common law chose in action vested in the plaintiff and assignable by it."
[53] A restitutionary claim for money had and received under an unenforceable loan agreement is inescapably linked to the performance of that agreement. If assigned along with contractual rights, albeit their existence is contestable, it is not assigned as a bare cause of action. Neither policy nor logic stands against its assignability in such a case. The assignment of the purported contractual rights for value indicates a legitimate commercial interest on the part of the assignee in acquiring the restitutionary rights should the contract be found to be unenforceable. Equuscorp fell into the category of a party with a genuine commercial interest in the restitutionary rights. Notwithstanding the difficulties that may attend the claims having regard to particular circumstances and defences which might affect their vindication, the better view is that adopted by the Court of Appeal, namely, that the restitutionary claims were assignable. The question that next arises is whether they were assigned.”
- [12]Gummow and Bell JJ (without the same extensive preceding historical analysis) expressed a similar view at [79]:
“Finally, the Assignment was not open to the objection that it dealt with no more than ‘bare’ rights of action and so attracted the statements of principle in Poulton v The Commonwealth. It has long been held that an exception exists where the assignee has an interest in the suit, and a genuine and substantial commercial interest is now regarded as sufficient. In the present litigation this was satisfied by the charge which Equuscorp held over the assets of Rural to secure the indebtedness of Rural; the recovery on the restitutionary claim would, as counsel put it, ‘fill the gap created by the debts imploding under illegality’.”
- [13]The statements of principle are unaffected by the outcome in that proceeding, which was that Equuscorp failed because the purported assignment had not been done properly. The arcane and now largely archaic rules of the common law about maintenance (including champerty) which have in the past stood in the way of such assignments are being increasingly whittled away by new exceptions. The courts nowadays seem loath to discern anything useful achieved by the old rules.
- [14]Locally, see WorkCover Queensland v Amaca Pty Ltd [2012] QCA 240, allowing an appeal where Equuscorp overtook the primary judge’s decision. The enquiry now is whether the assignee has a legitimate or genuine commercial interest in the assigned cause of action.
- [15]Mr Martin referred the court, as an example from earlier years of lack of a commercial interest, to ICM Agriculture Pty Ltd v Young [2009] FCA 1169. Mr Young attempted to stave off a sequestration order by taking assignments of claims a company of his had against the petitioning creditor. Lindgren J said:
“[106] The purported assignment of the two “Limited Causes of Action” cannot be supported as ancillary to an assignment of the Seed.
[107] Further, in so far as a cause of action in conversion is pleaded, a right of action in tort is incapable of assignment: see Poulton v Commonwealth (1953) 89 CLR 540 at 602 per Williams, Webb and Kitto JJ; Salfinger v Niugini Mining (Aust) Pty Ltd (No3) [2007] FCA 1532 per Heerey J at [115]-[120] (Salfinger).
[108] Assuming in favour of Mr Young that the assignments could be saved by Mr Young’s having had a genuine commercial interest in taking them (see Trendtex), they would not be saved. Mr Yong became the sole shareholder of AAC on 12 June 2009. He did not have a genuine commercial interest as at 11 December 2007 (see the Earlier Reasons for Judgment at [122]-[123]) and the mere fact without more that he was a one hundred percent shareholder in AAC at the time of the subsequent purported assignments on 12 June, 3 July and 15 July 2009 does not support those purported assignments.
[109] The question to be asked is: what genuine commercial interest did Mr Young have at the time of any assignment being considered that would be served by that assignment? It is not as if the assignment was necessary in order that the claimed cause of action against ICM be enforced and Mr Young’s interest as shareholder be safeguarded. As sole shareholder, director and controlling mind of AAC, Mr Young was in a position to ensure that AAC itself pursued ICM. Apparently Mr Young thought that it would serve his interests as shareholder for AAC to do so. The answer to the question posed is: none -- his interest was to become a creditor of ICM and so avoid bankruptcy’. This is a personal benefit, not a genuine commercial interest of the assignee to the kind to which Trendtex refers; cf Monk at 152-153.”
- [16]A sequestration order was made against Mr Young. I am unsure whether the “status” aspect of bankruptcy informed the decision. I have difficulty in identifying as other than a financial or commercial interest the practical ploy which it seems the defendant has in the nick of time resorted to to fend off what remains of this summary judgment application.
- [17]A high degree of confidence is required before a court can properly order summary judgment under r 292 or r 293 that the respondent’s situation is so hopeless that there really is no need for a trial. Some of the pertinent authorities are listed in Mr Atkinson’s written submissions.
- [18]But for the execution of the deed, the plaintiff might have expected some success on its summary judgment application. Mr Martin submitted that clause 1(a) of the Deed achieves nothing, as the “Contract” referred to is finished, beyond reviving, replaced by a new one between the plaintiff and the defendant. He also suggested, as I understand him, that we may not be dealing with a supply contract at all, in relation to goods, but no more than a contract to supply or make available credit/delayed payment facilities. It is difficult to make any pronouncement about this, when those contractual documents are not before the court. It cannot be said that bare rights of action are dealt with by the deed, unassociated with anything else under (a). I am not saying Mr Martin’s argument is wrong, just that effect should not be given to it in a summary judgement application. It does not present a suitable occasion for drawing possibly fine distinctions from Equuscorp.
- [19]In the circumstances, although I have found it a close question, the plaintiff’s application for judgment must be dismissed. The claim would be proceeding in any event. I will hear the parties in relation to costs and any other orders that ought to be made. It may not be necessary to commit them to any further court appearance when, in due course, orders are pronounced in open court. My inclination in the unusual circumstances would be to dismiss the plaintiff’s application but order that the costs of and incidental to it be the plaintiff’s costs in the cause.