Young v Hulbert[2014] QDC 96

DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an appeal against the decision of a magistrate sitting at Cairns on 12 November 2013 to give summary judgment for the respondent plaintiff against the appellant defendant in the total sum of $52,645.48 and order the appellant defendant to pay the respondent plaintiff’s costs of and incidental to the proceeding on the indemnity basis. 

2. [2]
   Rule 292 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”), permits the court (in this case, the presiding magistrate) to give summary judgment for a plaintiff against a defendant in circumstances where 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 is a two step process requiring both requirements to be addressed.

3. [3]
   The respondent plaintiff’s claim is for moneys payable pursuant to a contract whereby the appellant defendant agreed to purchase the respondent plaintiff’s share of a live fish wholesale business in Shenzhen City, China from the respondent plaintiff.  In the Statement of Claim, the terms of the contract and the failure of the appellant defendant to pay the agreed purchase price are briefly pleaded.  Thereafter paragraph 4 states “in the premises, the defendant is indebted to the plaintiff for the sum of $30,000.00 plus interest at the rate of 12% per annum calculated from 1 August 2007 to the date of the claim”.

4. [4]
   Paragraph 4 does not contain any factual allegations which are not previously set out in the Statement of Claim, other than stating the logical conclusion that the appellant defendant’s breach of contract has made him “indebted to the plaintiff” as alleged. When this was raised by me during the course of the appeal hearing, counsel for the respondent plaintiff conceded that the words “in the premises” referred to the matters previously pleaded and did not submit any other basis for the alleged indebtedness of the appellant defendant.

5. [5]
   In his Further Amended Defence filed on 20 August 2013, the appellant defendant disputes that the respondent plaintiff owned a share of the business in question, asserting that it was entirely owned by a Chinese national called Mr Wong. It is further pleaded in paragraph 1(c) that “as a matter of Chinese law, foreign nationals are not permitted to own and operate Chinese domestic businesses without the proper registration pursuant to the Company Law of the People’s Republic of China (revised in 2005)”.

6. [6]
   It is subsequently pleaded that it was orally agreed by the parties that payment of the purchase price was conditional upon the respondent plaintiff obtaining ownership of the business from Mr Wong and that it was an implied term of the contract that the necessary steps to enable the appellant defendant to acquire and operate the business pursuant to Chinese law would be undertaken by the respondent plaintiff. The appellant defendant thereafter pleaded that the respondent plaintiff in being unwilling and unable to attend to these matters, repudiated the contract and that the appellant defendant accepted the respondent plaintiff’s repudiation, bringing the contract to an end. Paragraph 18 summarises the appellant defendant’s position in the following terms:

“By reason of the matters pleaded at paragraphs 6, 16 and 17 herein:

(a) the Plaintiff has breached the Agreement;

(b) the Defendant was entitled to terminate the Agreement;  and

(c) the Defendant has terminated the Agreement as a result of the Plaintiff’s breach”.

The appellant defendant did not, however, expressly plead to paragraph 4 of the  Statement of Claim.

7. [7]
   In entering summary judgment for the respondent plaintiff, the magistrate stated that the issue for determination “turns on a single discrete point in respect of the pleadings of the parties”, namely, that the appellant defendant had not pleaded to the allegation in paragraph 4 of the Statement of Claim at all.  The magistrate noted that r 166(1)(a) of the UCPR states that “an allegation of fact made by a party in a pleading is taken to be admitted by the opposite party required to plead to the pleading unless the allegation is denied or stated to be not admitted by the opposite party in a pleading”.  The magistrate then stated that there was a deemed admission in respect of the allegations contained in paragraph 4 of the Statement of Claim.  He went on to state that “the plaintiff is, in my view, entitled to summary judgment in respect of that admission”.

8. [8]
   The magistrate sought to justify his decision by reference to the Court of Appeal’s decision in Hanson Construction Materials Pty Ltd v Davey & Anor^[1], which he stated was in his view “an authority on all fours with the current application”. Regrettably, it was not.  The pleading under consideration by the Court of Appeal was a defence of two paragraphs containing broad denials without any substance whatsoever, which is not how the Further Amended Defence before me can be categorised.

9. [9]
   The magistrate completely failed to address the requirements of Rule 292.  It is clear from a reading of the Further Amended Defence that the appellant defendant vigorously disputed the claim.  The appellant defendant cannot be categorised as impliedly admitting that he was indebted to the respondent plaintiff simply because he did not expressly plead to paragraph 4 of the Statement of Claim.  It cannot be said that the appellant defendant has no real prospect of defending the respondent plaintiff’s claim in circumstances where potential questions of capacity, illegality and repudiation arise.  Moreover, in my view, the illegality issue alone raises the need for a trial.

10. [10]
    I therefore allow the appeal and set aside the judgment and costs order of 12 November 2013. I order the respondent plaintiff to pay the appellant defendant's costs of and incidental to the appeal on the standard basis.