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  • Unreported Judgment

Searle v McCormack[2016] QDC 259

DISTRICT COURT OF QUEENSLAND

CITATION:

Searle v McCormack [2016] QDC 259

PARTIES:

LORRAINE SEARLE

(plaintiff)

v

BEVERLEE McCORMACK

(defendant)

FILE NO/S:

48 of 2016

DIVISION:

Civil

PROCEEDING:

Application for summary judgments

DELIVERED ON:

29 September 2016 – delivered Ex Tempore

DELIVERED AT:

Brisbane

JUDGE:

RS Jones DCJ

ORDERS:

  1. Judgment be entered against the Defendant in favour of the Plaintiff in the sum of $205,000;
  2. Interest be payable on the amount of $205,000 pursuant to s 58 of the Civil Proceedings Act 2011 to date of judgment;
  3. Claims for declaratory relief are dismissed;
  4. Defendant pay Plaintiff’s cost in respect of this application and of proceedings from and including 10 March 2016.

COUNSEL:

D L Paratore for the plaintiff

Defendant appeared on her own behalf

SOLICITORS:

JHK Legal for the plaintiff

Defendant appeared on her own behalf

  1. [1]
    HIS HONOUR: On 28 September 2016, I was required to address an application for summary judgments. For reasons it is not necessary to go into here, I gave leave for the defendant’s solicitor to withdraw, and the defendant represented herself. In this particular matter, the relevant parties are the plaintiff, who is the defendant’s mother; the defendant, of course; but there are also certain allegations that have been made by the defendant in respect of her brother. In her statement of claim, the plaintiff, relevantly, pleaded that on or about 6 March 2015, the defendant entered into a written agreement with the plaintiff. Thereafter, the material terms of the agreement are set out. It is then alleged that, in breach of the obligation of the defendant to repay the plaintiff, the defendant was indebted to the plaintiff in the sum of $210,000, together with ancillary relief. It is also pleaded that, pursuant to the agreement, to secure the punctual payment of all amounts owed by the defendant to the plaintiff, the defendant granted an equitable charge and/or mortgage over the land in favour of the plaintiff. On or about 16 October 2015, the plaintiff lodged a caveat.
  1. [2]
    The relief the plaintiff seeks is as follows:

A declaration that by a written loan agreement between the plaintiff and the defendant on or about 6 September 2015, the defendant granted a charge and/or equitable mortgage to the plaintiff in respect of its interest in the estate in fee simple in the land described as Lot 234 on registered plan 146351 County of March, Parish of Gutchy, being the land contained in title reference 15364121; A declaration that the charge and/or equitable mortgage charges the defendant’s interest in the land with a payment of all moneys due and owing by the defendant, including claims for interest and legal costs on a solicitor and own client basis, all of which sums are due and owing to the plaintiff under the agreement;  the sum of $210,000 for money due and payable by the defendant to the plaintiff;  interest pursuant to section 58 of the Civil Proceedings Act;  costs and any other relief the Court considers appropriate.

  1. [3]
    In a defence settled by counsel, there were a number of the usual denials, but, most significantly, in paragraph 3 of the defence, it was asserted that the defendant denied the allegations of facts; denied that the defendant had entered into a written agreement with the plaintiff; admitted that, on 6 March 2015, the defendant signed a document at the insistence of the plaintiff and the defendant’s brother, Peter Searle, and the defendant’s sister-in-law, Alison Searle. Thereafter, it is said that the document was not an enforceable agreement because, first, the defendant had been assaulted by her brother on 3 March 2015; second, the defendant had signed the document under duress; third, the document, as signed by the defendant, was not enforceable because it was brought about and/or caused by the unconscionable conduct and/or undue influence of the plaintiff, her servants and/or agents; or, alternatively, was not enforceable because of a total lack of consideration. In paragraph 10 of the Defence, it was asserted:

As to paragraph 10 of the statement of claim, the defendant admits that the plaintiff lodged a caveat, but says that the caveat was not lodged in accordance with any rights under an agreement, because the signed document was not an agreement, and the defendant pleads and relies on the facts pleaded in paragraph 3.

  1. [4]
    In the plaintiff’s reply, there was the usual denial of any negative assertions, and the adoption of a number of admissions. On 10 March 2016, solicitors for the plaintiff wrote to the then solicitors for the defendant, advising, relevantly, as follows:

Our client is therefore of the opinion that (1) the defendant’s defence has no real prospects of successfully defending all or part of the plaintiff’s claim, and (2) there is no need for a trial of the claim or part of the claim.

  1. [5]
    The letter then goes on to say:

Further, should it become necessary for our client to file an amended reply, this letter is also notice that we will seek that our client’s cost of attending the same will be sought on an indemnity basis.

  1. [6]
    In response to that, the then solicitors for the defendant replied, stating as follows:

We repeat our assertions in the Defence that the agreement your client relies upon is not an enforceable agreement because there is a total failure of consideration, and it’s not in the form of a deed. If you require further better particulars, it is our suggestion that you request them in the usual manner. It is therefore our suggestion that (1) you request further and better particulars in relation to the duress, which will be provided promptly to you, and (2) you provide a sealed reply and serve it upon our client by way of email to this addressand (3) please advise us with the emails that you have sent us in this matter previously for our records.

  1. [7]
    I should note here that, in the relief that is pleaded in the plaintiff’s statement of claim the reference made to the 6th of September 2015, is clearly an error, and it is a reference to the agreement upon which the plaintiff relied, which was dated on or about 5 or 6 March 2015. It is tolerably clear that the defendant had raised a number of factual issues in her defence, which, if accepted, might provide a defence to the claim against her. In his written submissions, the solicitor for the plaintiff, in respect of the allegation of duress and unconscionable conduct, asserted to the effect that the Defence would fail because of a number of factual matters that are deposed to in affidavits and/or exhibits attached thereto. In my view, a number of the matters relied on by the plaintiff go to matters of evidence and not fact.
  1. [8]
    As cynical and/or sceptical as one might be about the material I then had before me, I was of the inclination that the application should be dismissed, and that an order requiring the defendant to file and serve an affidavit in support of her defence be filed and served. That I had that inclination was because of a violent event that occurred between the defendant and the plaintiff’s son, which was referred to in the affidavit material of the plaintiff. It was that violence between the defendant and her brother that grounded the allegations in the defence of duress, and, as I have said, the plaintiff herself clearly showed that there was serious tension between the defendant and her brother, and that an act of violence occurred. There is dispute about who was responsible for the assault that took place.
  1. [9]
    However, what occurred was that the defendant then sought to file by leave a document described by her as being an affidavit. Over objection, I allowed that document to be filed. A cursory reading of that document made it abundantly clear that it was not open in any way for the defendant to maintain her denial of the debt alleged against her. It is necessary only to quote some of the passages from that material. At page 2 it is said:

On the 5/3/15, my mother walked over to the coffee shop on her walker. My mother had a letter on three sheets of paper, each page saying the same thing. It had been written up by Alison Searle. My mother told me to sign it. I signed three copies and so did she. She then got the shop assistant to witness the agreement. I was given a page. She took the other two pages. It was in the form that I was to pay $50,000, then pay another $160,000. To be paid in September ’15. I just signed whatever she wanted. I was not feeling well. The social workers also [indistinct] they offered to fly me home to Queensland.

  1. [10]
    And then on the final page:

My mother lent me the money of $200,000. She also believed that what we were doing was true at the time. She was in contact with the people organising the goods to arrive to Australia from Germany. My mother also lent me $5000 to buy a car in November 2014 –

  1. [11]
    Indeed, during the course of the proceedings the defendant made a number of admissions: first, to the effect that the plaintiff did, indeed, lend her the money as alleged; and that she had an obligation to repay it. The defendant seemed to accept that, in reality, she had no defence to the claim in respect of the debt. Indeed, as I understood her, she went so far as to say that she intended to sell the land which was subject to a caveat in order to satisfy the debt. In response to a question by me during the proceedings, the defendant said:

Yes, because I was told that I had to go back to Queensland, so I just said give it to me, I’ll sign it. But I’m not arguing the fact that she didn’t lend me the money. She did lend me the money, and I put in as much as well, so it was a business deal between us. I am not arguing the fact that I owe her the money. I owe her the money back because that’s how I feel about it. Even though we were doing a business deal and she was going to make a lot of money about it, it didn’t turn out, so.

  1. [12]
    The document to which I have referred and the concessions made from the bar table by the defendant make it clear that her defences of duress and unconscionable conduct could no longer be maintained. This is one of those clearest of cases where to persist with the defence would be doomed to fail. In this regard, I have considered various decisions of the courts, including the Court of Appeal in Neumann Contractors Pty Ltd v Transpunt No 5 Pty Ltd [2010] QCA 119; the decision of his Honour Justice P. Lyons in Hughes v Westpac Banking Corporation [2010] QSC 274, and the decision of Justice Daubney in JM Kelly (Project Builders) Pty Ltd v Toga Development No 31 Pty Ltd and Anor (No 2) [2008] QSC 312. I should also note, here, that in the plaintiff’s solicitor’s written submissions a number of other well known cases in this regard are cited.
  1. [13]
    It is clear to me that the relief of the type claimed in paragraphs 3 and 4 of the plaintiff’s claim and the statement of claim ought to be granted. The difficulty I have is with the declaratory relief sought. The agreement between the plaintiff and the defendant could only be described as an unsophisticated one. It is headed A Loan Agreement Between Lorraine Searle and – the defendant here. It then goes on to say as follows:

The borrower shall repay the lender $205,000 and $5000 as interest, in total $210,000, $50,000 being payable upon demand, this day, March 6, 2015, within one week. Payment can be made by bank cheque to E.R. and L. Searle. The balance of $160,000 is due and payable by September 6 2015, payable by bank cheque to E.R. and L. Searle. The borrower secures this loan with the sale of properties 3 Oxley Street, Golden Beach, Queensland and 626 Beckmanns Road, Glenwood, Queensland.

  1. [14]
    The document is then signed by Lorraine Searle, described as the lender, and the defendant, described as the borrower. I emphasise the reference to the words:

The borrower secures this loan with the sale of properties.

  1. [15]
    As I have already indicated, on 16 October 2015 the plaintiff lodged a caveat over the Beckmanns Road property. As I understand it, by that time the Oxley Street property had already been sold. The caveatable interest was said to be:

The caveator owed the sum of $210,000 pursuant to an equitable charge arising out of a loan agreement granted by Beverley McCormack to the grantor, dated 6 March 2015, entitling the caveator to an equitable mortgage over the property.

  1. [16]
    In my view, no such interest or right vested in the plaintiff under the loan agreement. It seems tolerably clear to me that the loan agreement envisaged a situation that, in circumstances where the defendant was unable to pay the debt by using her available funds at the time, then she would meet the debt by selling those properties. If there be a charge, it was one over the proceeds of the sale of the property, not over the property itself. For the reasons given, the orders that I will make are as follows.
  1. 1.
    Judgment be entered against the defendant in favour of the plaintiff in the sum of $205,000;
  1. 2.
    That interest be payable on the amount of $205,000, pursuant to section 58 of the Civil Proceedings Act 2011 to the date of judgment;
  1. 3.
    The claims for declaratory relief are dismissed.
  1. [17]
    Now, before I go on further to deal with the question of costs, two things strike me. One is, having regard to the reasons that I have given, it may well be that you might consider whether or not you want to seek declaratory relief to the effect that the plaintiff holds a charge over the proceeds of the sale of the property. Because as I understand it, Ms McCormack, you intended to sell the property and use the net proceeds, after the usual commission and mortgage, to use the balance to repay as much of the debt as you could.
  1. [18]
    DEFENDANT: Yes.
  1. [19]
    HIS HONOUR: So that was your intention, was it not?
  1. [20]
    DEFENDANT: Yes.
  1. [21]
    HIS HONOUR: All right. Well, see, it might be that if you are able to draft some form of charge, and then get it to Ms McCormack, it might well be that it is able to be done by way of consent, without any further costs being incurred. But I am going to leave that to you and Ms McCormack, because there is no formal application to that effect before me. Now, on your side of the equation Ms McCormack, having regard to the reasons that I have given thus far, you might want to give consideration as to having the caveat removed.
  1. [22]
    DEFENDANT: Right. Okay. Well, they might not move it.
  1. [23]
    HIS HONOUR: Well, look - - -
  1. [24]
    DEFENDANT: They haven’t this far, so they’re not really going to.
  1. [25]
    HIS HONOUR: No, no, no. But that arrangement is one as between you, as the registered proprietor in the registrar of titles.
  1. [26]
    DEFENDANT: Right.
  1. [27]
    HIS HONOUR: I suggest you go and seek advice from what is commonly referred to as QPILCH. They are an in-house voluntary legal group. And if you - - -
  1. [28]
    DEFENDANT: Yeah.
  1. [29]
    HIS HONOUR: If you show them the terms of the orders, it might well be that you can take steps to have the caveat removed. But again, I will leave that in your hands at this stage.
  1. [30]
    DEFENDANT: Okay. Thank you.
  1. [31]
    HIS HONOUR: I will decide whether to leave that exchange in my ex tempore reasons or delete them.
  1. [32]
    Turning to the question of costs, in my view the most significant issues are these. First, the defendant filed a defence denying the debt she now admits to. Second, there is no doubt that there is an unfortunate family-history background to this agreement, and indeed, events that occurred prior to entering in to the agreement and subsequent thereto. Third, the plaintiff has been successful in this application, but only in respect of part of the claim, the applications for declaratory relief having been refused. Fourth, but for the concessions or admissions made by the defendant at the bar table on 28 September 2016, the whole of the plaintiff’s application might well have failed. Fifth, for the reasons givens, the caveat, in my view, ought never to have been registered in the first place over the subject land. The plaintiff’s claims for declaratory relief had no prospects of success, in my view. Finally, up until 28 September 2016 the defendant, at least on the material before me, had denied liability, as I have already said.
  1. [33]
    This proceeding, being a family one and with a clear history of some form of instability hanging over it, has clearly not been one involving what could be described as two objective and sensible, commercial individuals. The plaintiff is certainly entitled to some of her costs given the conduct of the defendant. However, in circumstances where the plaintiff, herself, maintained an unsupportable action in respect of the declaratory relief, I consider it appropriate to limit the scope of the cost orders.
  1. [34]
    On balance, I consider that the defendant ought to pay the plaintiff’s cost of this application and of the proceedings from and including 10 March 2016, being the date of the plaintiff’s letter to the defendant’s solicitors. Costs were sought on an indemnity basis. I do not consider indemnity costs ought to be awarded essentially for the reasons that I have already given. So in addition to the orders that I have made, I will further order that the defendant pay the plaintiff’s cost of the application heard on 28 September 2016 and pay the plaintiff’s cost of the proceeding from and including 10 March 2016.
Close

Editorial Notes

  • Published Case Name:

    Searle v McCormack

  • Shortened Case Name:

    Searle v McCormack

  • MNC:

    [2016] QDC 259

  • Court:

    QDC

  • Judge(s):

    Jones DCJ

  • Date:

    29 Sep 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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