Industry Funds Management (Nominees 2) Pty Ltd v Peart Investments Pty Ltd
[2013] QDC 98
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- Unreported Judgment
- Industry Funds Management (Nominees 2) Pty Ltd v Peart Investments Pty Ltd[2013] QDC 98
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Industry Funds Management (Nominees 2) Pty Ltd v Peart Investments Pty Ltd[2013] QDC 98
Industry Funds Management (Nominees 2) Pty Ltd v Peart Investments Pty Ltd[2013] QDC 98
DISTRICT COURT OF QUEENSLAND
CITATION: | Industry Funds Management (Nominees 2) Pty Ltd v Peart Investments Pty Ltd & Ors [2013] QDC 98 |
PARTIES: | INDUSTRY FUNDS MANAGEMENT (NOMINEES 2) PTY LTD (Plaintiff) v PEART INVESTMENTS PTY LTD AND OTHERS (Defendant) |
FILE NO/S: | 2132/2012 |
PROCEEDING: | Application |
DELIVERED ON: | 24/04/2013 |
DELIVERED AT: | Brisbane |
HEARD AT: | 24/04/2013 |
JUDGE: | Samios DCJ |
ORDER: |
|
CATCHWORDS | Practice - summary judgment - whether the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim - whether there is no need for a trial of the claim or part of the claim UCPR r 292 Cairns City Supermarkets Pty Ltd v Lightbrake Pty Ltd [2011] QCA 205. Capital Finance Australia Ltd v Airstar Aviation Pty Ltd and Others [2003] QSC 151. Bolton Properties Pty Ltd v JK Investments Australia Pty Ltd [2009] QCA, held, at paragraph 79 Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 Neumann Contractors Pty Ltd v Transport (Number 5) Pty Ltd [2010] QCA Rich v CGU Insurance Limited (2005) 79 ALJR 856 |
COUNSEL: | Mr Sewell for the Plaintiff. Mr Peart represented himself. |
SOLICITORS: | Gadens Lawyers for the Plaintiff. Mr Peart represented himself. |
- [1]This is an application for summary judgment brought by the plaintiff against the first defendant as a principal debtor, and the second defendant and the third defendant as guarantors pursuant to rule 292 of the Uniform Civil Procedure Rules. Rule 292 of the Uniform Civil Procedure Rules provides that, “A plaintiff may at any time after a defendant files a notice of intention to defence apply to the Court under this power for judgment against the defendant. 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, the Court may give judgment for the plaintiff against the defendant for all or part of the plaintiff’s claim and may make any other order the Court considers appropriate.
- [2]It is not disputed that the second defendant and the third defendant were the only shareholders of the first defendant. Further, on 30 June 2008, the second defendant and third defendant executed a written continuing personal indemnity guarantee with unlimited liability pursuant to which the second defendant and the third defendant promised to indemnify the plaintiff and guarantee any money becoming owing to the plaintiff by the first defendant. Further, that by a written agreement dated 11 August 2008, the plaintiff agree to advance $2,242,000 to the first defendant. The terms of the loan agreement are in evidence, as is a document titled General Terms June 2007. It is not disputed that these are the documents governing the relationship between the plaintiff and the first defendant.
- [3]The evidence indicates that the plaintiff provided what has been called Mezzanine Finance to the first defendant at various stages of a property development. The plaintiff alleges the first defendant subsequently defaulted on the loan agreement. The plaintiff has issues notices of demand not only to the first defendant but to each of the second defendant and the third defendant. The plaintiff alleges the first defendant, the second defendant and the third defendant have not complied with the notices of demand. The plaintiff alleges the first defendant continues to owe money to the plaintiff pursuant to the loan agreement. The plaintiff claims that, as at 24 April 2013, today, the total amount owing with respect to the loan agreement is $219,589.75.
- [4]The defendants claim that there are two clear triable issues and a need for a trial arising from the defence and counter-claim and as supported by the affidavits, that is, the defendants allege there has been a breach of the loan agreement by the plaintiff misappropriating legal fees in access of the amount payable under the loan, and, secondly, that there has been a wrongful appropriation of the components of the proceeds of sale, 20 per cent, which was due to other lenders for itself. The defendants say each of these breaches go to the primary loan obligations between the plaintiff and the first defendant company arising out of the very transaction and money sought to be enforced by the plaintiff despite those breaches. Consequently, the defendants submit there is a very real dispute about the calculation of the legal fees, interest thereon, and the money misapplied to the loan.
- [5]In short, the first defendant’s defence strikes at the heart of the amount owed under the loan, and that is the guaranteed money vis-à-vis the second and third defendants. The defendants say that the counter-claim exceeds the plaintiff’s claim. This is quite apart from the primary defence. Further, the defendants say it would be unjust and inequitable to hive that part off and proceed in an artificial way on the claim by summary judgment. The authorities indicate that 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 to the application has established some real prospect of succeeding at trial. See: Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 per Williams JA.
- [6]Further, Daubney J in Bolton Properties Pty Ltd v JK Investments Australia Pty Ltd [2009] QCA, held, at paragraph 79, that the rule required the respondent to the application to demonstrate that it had a real, as apposed to a fanciful, prospect of defending the claim. Finally, I have been referred to the joint judgement of Holmes and Muir JJA in Neumann Contractors Pty Ltd v Traspunt Number 5 Pty Ltd [2010] QCA 119 where their Honours held, “The utilisation of rules such as rule 292 is to be encouraged, but their application must conform with the general principle that issues raised in proceedings are to be determined in a summary way only in the clearest of cases.”
- [7]Their Honours cited Rich v CGU Insurance Limited (2005) 79 ALJR 856. In the present matter, the plaintiff contends that the relevant contractual documents between the plaintiff and the first defendant on the one hand and between the plaintiff and the second defendant and the third defendant on the other hand, both contain clauses which are contractual terms which prohibit any set off or counter-claim such as is raised in the defence and counter-claim in this matter, to be raised against the plaintiff’s claim. I have been referred to Cairns City Supermarkets Pty Ltd v Lightbrake Pty Ltd [2011] QCA 205 and Capital Finance Australia Ltd v Airstar Aviation Pty Ltd and Others [2003] QSC 151.
- [8]In Capital Finance, Holmes J, at paragraph 13, referred to the decision of The Fedora in which the guarantee under consideration provided that amounts payable by the guarantor were to be paid in full, free of set off or counter-claim. Her Honour noted that the English Court of Appeal held that claims in negligence were not exempt from the operation of such a clause, pointing out “that the commercial purpose of the transaction is that, upon default by the borrower, the bank should be paid quickly, and that the natural meaning of the words is that all set offs and counter-claims are excluded”.
- [9]Her Honour also noted that the guarantors were still able to prosecute their claims to judgment, however, they were “merely prevented from holding up payments admittedly due under the guarantees while disputer cross-claims are litigated”. Her Honour noted the bank was entitled to summary judgment. In the present matter, I am satisfied that clause 17.11 of the General Terms June 2007 at page 11 is such a term. Further, that clauses 4.5, 4.10, 4.12 and 5.1 of the second and third defendants’ guarantee and indemnities are also such terms. Finally, clause 2.4 of the second and third defendants’ guarantee and indemnity provides that the second defendant and the third defendant must indemnify the plaintiff for the entire amount, even if the plaintiff is prevented from recovering any amount owing from the first defendant.
- [10]That is, in the present matter, I am satisfied that even if without deciding the plaintiff is in breach of the agreement with the first defendant as claimed in the defence and counter-claim and the outline of submissions made here today and said to be supported by the affidavits, that nevertheless, the plaintiff is entitled to summary judgment on its claim, that is, the set off or counter-claim raised by the defendants is not one that can meet the entitlement of the plaintiff to the sum claimed here of $219,589.75. I am not deciding whether there is any prohibition by the defendants pursuing these claims other than what I have just decided, that is, it would still be open to the defendants to pursue such claims for breaches that they say have arisen in other proceedings.
- [11]However, at this stage, I am satisfied that the defendants have no real prospect of successfully defending the plaintiff’s claim and there is no need for a trial of the claim. Therefore I give judgment for the plaintiff against the first defendant, the second defendant and the third defendant for the sum of $219,589.75. I order the first defendant, the second defendant and the third defendant to pay the plaintiff’s costs of the application and the action to be assessed on the indemnity basis. I am satisfied that the provisions of the contractual documents between the parties entitles the plaintiff to indemnity costs of this application and of the action. There will be an order as per the draft initialled by me and left with the papers, then.