Hunter Helicopter Charters Pty Ltd v ACN 133 019 093 Pty. Ltd.
[2017] QDC 62
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- Unreported Judgment
- Hunter Helicopter Charters Pty Ltd v ACN 133 019 093 Pty. Ltd.[2017] QDC 62
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Hunter Helicopter Charters Pty Ltd v ACN 133 019 093 Pty. Ltd.[2017] QDC 62
Hunter Helicopter Charters Pty Ltd v ACN 133 019 093 Pty. Ltd.[2017] QDC 62
DISTRICT COURT OF QUEENSLAND
CITATION: | Hunter Helicopter Charters Pty Ltd v ACN 133 019 093 Pty Ltd & Ors [2017] QDC 62 |
PARTIES: | HUNTER HELICOPTER CHARTERS PTY LTD ACN 111 245 731 (applicant/plaintiff) v ACN 133 019 093 PTY LTD (first respondent/first defendant) DUKE BOWAN (MA) PTY LTD ACN 168 846 173 (second respondent/second defendant) RICHARD JOHN MARLBOROUGH (third respondent/third defendant) COLIN WILLIAM MACVICAR (fourth respondent/fourth defendant) |
FILE NO/S: | 209/2016 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court at Southport |
DELIVERED ON: | 20 March 2017 |
DELIVERED AT: | Southport |
HEARING DATE: | 19 December 2016 |
JUDGE: | Kent QC DCJ |
ORDER: | Judgment on the claim be entered in favour of the applicant/plaintiff against the respondents/defendants in the sum of $191,256.92. |
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – FOR DEBT OR LIQUIDATED DEMAND OR FOR POSSESSION OF LAND – where the applicant lent $504,000 to the respondents – where the respondents defaulted – where the default continues – where a filed affidavit outlined the loan, unpaid interest and legal costs – where, in the context of previous correspondence, payment of the outstanding balance was demanded by email – where there was little dispute as to the merits of the claim – whether there was a proper evidentiary basis for the debt – whether a written demand was served on the third and fourth respondents – whether the plaintiff is entitled to summary judgment, pursuant to the two limbed test EVIDENCE – ADMISSIBILITY – HEARSAY – GENERALLY – where the debt was not set out in the application, but was disposed to in an affidavit – where the amount was consistent with prior correspondence – whether the amount stipulated in the affidavit is a conclusion, hearsay and inadmissible PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ANSWERING PLEADINGS – DENIALS AND NON-ADMISSIONS – where the defence includes many non-admissions that do not comply with the Uniform Civil Procedure Rules 1999 (Qld) – where non-admissions, with respect to provision of documents, were incorrect and unreasonable – whether the non-admissions amounted to deemed admissions pursuant to r 166(4) of the Uniform Civil Procedure Rules 1999 (Qld) PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ANSWERING PLEADINGS – DENIALS AND NON-ADMISSIONS – where, contrary to the requirements of the Uniform Civil Procedure Rules 1999 (Qld), the defence pleaded, on several occasions, a non-admission and, in the alternative, a denial – whether the consequence of each impermissible pleading is a deemed admission Evidence Act 1977 (Qld), s 83 Uniform Civil Procedure Rules 1999 (Qld), r 146, r 149, r 150, r 157, r 165, r 166(4), r 292 Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; [2005] QCA 227, cited Equititrust Ltd v Gamp Developments [2009] QSC 115, distinguished Green & Ors v Pearson [2014] QCA 110, considered Hanson Construction & Materials Pty Ltd v Norliss Pty Ltd [2010] 79 ACSR 668; [2010] QCA 246, considered National Australia Bank v Hart [2002] QSC 051, considered Upton v Westpac Banking Corporation [2016] QCA 220, cited |
COUNSEL: | M Lazinski for the applicant/plaintiff C Johnstone for the respondents/defendants |
SOLICITORS: | MacGregor O'Reilly Solicitors for the applicant/plaintiff Ramsden Lawyers for the respondents/defendants |
- [1]This application for summary judgment concerns the plaintiff’s action against the defendants for a sum of money said to be owing pursuant to a loan offer contract, deed of guarantee and indemnity and general security agreement (collectively referred to as the “Agreements”) together with interest and costs.
Background
- [2]The plaintiff was a credit provider to the defendants by assignment. In July 2015, an amount of $504,000 was lent to the defendants. The agreement provided for interest to be paid pursuant to the Agreements. The first and second defendants gave a charge over their assets to secure the loan. This was duly registered on the Australian Personal Property Securities Register. This interest was assigned to the plaintiff in March 2016.
- [3]The third and fourth defendants, natural persons, entered into a guarantee and indemnity concerning amounts owing pursuant to the loan. The loan was advanced in September 2015. Its term was intended to be 12 months, except where there was a default in performance.
Statement of Claim
- [4]The plaintiff pleads the balance due and owing at the time of issuing of the proceedings totalled $181,436.07. One of the arguments of the defendants on this application is lack of precise proof of this fact.
- [5]The statement of claim pleads that the defendants were in default under the securities as at 28 June 2016. The default continues. It is said a demand for immediate payment was made by email on 2 August 2016.
- [6]It is pleaded the default continues and, accordingly, the defendants are indebted to the plaintiff.
Defence
- [7]The defence pleads the statement of claim is embarrassing and, in various aspects, is liable to be struck out as not complying with the Uniform Civil Procedure Rules 1999 (Qld) (the “UCPR”). Otherwise there are many non-admissions pleaded as well as denials, often in respect of the same issue, something to which I shall return. It is admitted that the defendants gave a mortgage over certain real property in September 2015. It is admitted that the plaintiff was assigned the benefits of the mortgage in March 2016 and,[1] separately, that the plaintiff became entitled to exercise its rights thereunder in July 2016.
- [8]A rare positive assertion in paragraph 23 of the defence is that the plaintiff failed to take reasonable steps to mitigate its damage by not appointing a receiver. This is said to deny the plaintiff’s entitlement to recover. I pause to note that this pleading, which was not advanced at the hearing of the application for summary judgment, is contrary to the law when the claim in this case was for debt owing, rather than for damages. It is not a situation requiring analysis of causation of loss and thus mitigation of damages does not arise.[2] The relevance of this feature of the pleadings is to place the present application in context; that is, there seems, in reality, to be very little dispute on the merits, at least the factual merits, of the case.
Applicant’s submissions
- [9]The applicant submits that in terms of the test for summary judgment set out in UCPR 292, it is a case where the defendant has no real prospect of successfully defending the claim and there is no need for a trial of the claim. It is thus appropriate to give judgment for the plaintiff.
- [10]
- [11]The applicant bears the onus of showing that the conditions for ordering judgment under UCPR 292 are satisfied; that is, the two conditions set out above. As to the exercise of this jurisdiction, in National Australia Bank v Hart,[5] Justice Mullins observed:
“Each of the defences raised by the respondent…has no real prospect of success… It is still a matter of discretion as to whether judgment should be entered for the applicant against the respondent. The applicant’s claim based on the guarantee is straightforward. The overall impression left by the respondent’s affidavits is that the respondent has no real defence to the applicant’s claim, but seeks to have the benefit of further time and opportunity in relation to defending the claim. When the substantive defences relied on by the respondent are eliminated there is nothing in the respondent’s material which supports exercising the discretion against entering judgment.”
Judgment was therefore given for the applicant.
- [12]The applicant points to the problems with the defence. It includes many non-admissions which, it is argued, do not comply with the requirements of the UCPR and should be struck out. It is argued that non-admissions based upon assertions in paragraph 1(b) of the defence to the effect that documents had not been provided, were simply incorrect and unreasonable and thus amounted to deemed admissions pursuant to UCPR 166(4).
- [13]A similar submission was made in relation to pleaded criticisms of the statement of claim relying on UCPR 146, 149, 150 and 157. It is pointed out the defendants did not attempt to strike out the statement of claim or any part thereof. The pleaded criticisms did not seem to be pressed by the respondents at the hearing of the application.
- [14]It is next submitted by the applicant that the state of the defence in relation to paragraphs 22 and 23 is most unsatisfactory and such as to amount to a deemed admission of paragraph 22 of the Statement of Claim. A non-admission is pleaded at paragraph 22 and an alternative denial of the same matter is pleaded at paragraph 23.
- [15]The applicant relies upon Green & Ors v Pearson,[6] where the court observed, at paragraphs [19] and [20], that it is not permissible to plead alternatively that a party either does not admit or denies an allegation of fact in a statement of claim. The court referred firstly to the resultant uncertainty as to whether a party may give or call evidence in relation to the fact.[7] The opposite party would not know whether the pleader is entitled to go into evidence on that issue. Secondly, the right to plead a non-admission is restricted by r 166 of the UCPR, particularly r 166(3). Reasonable enquiries are a pre-requisite. In this case, the fact of the non-payment is not in serious issue on any of the material presented on this application. Relevant documents had been provided at least by 17 October 2016 without demur or further request, so that recourse to paragraph 1(b) of the defence did not assist. As in Green, the respondent could not have been uncertain of the truth or falsity of the allegation of the balance due. Third, the explanation for the alternative denial in paragraph 23 is the legally incorrect reference to failure to mitigate damage, referred to in paragraph [8] above; thus not a proper explanation.
- [16]Accordingly the applicant submits that the consequence of this impermissible form of pleading in paragraphs 22 and 23 of the defence is a deemed admission of paragraph 22 of the statement of claim, i.e. that the pleaded balance is due and owing to the plaintiff by the defendants.
- [17]Although it was not specifically mentioned in argument, the “alternative do not admit/deny” tactic is also present in paragraphs 24, 25, 26, 27, 29, 30, 31 and 34 of the defence. One of the implications of this, if the applicant is correct as to the consequences thereof, is that there would be a deemed admission of paragraphs 24 to 26 of the statement of claim, dealing with the facts of the default, its quantum, notice thereof and its continuance. If the pleading in paragraph 28 of the defence was found to be evasive and liable to be struck out as it was also found to be impermissible and amount to a deemed admission, there would be a further admission of a demand as at 2 August 2016.
- [18]The applicant submits that the one substantive defence advanced in paragraph 23 of the defence is misconceived. It refers to a duty to mitigate loss. The applicant submits that, in this case, the claim is for a debt owing and not for damages. Thus there is no question of causation of loss and questions of mitigation of damage do not arise.[8]
Respondents’ submissions
- [19]The respondents oppose summary judgment on two grounds. Firstly, it is said that the applicant has not proved the amount of the debt claimed to be owed. Secondly it is said in respect of the third and fourth respondents that the plaintiff does not plead, and has not proved, that the pre-condition to liability under the guarantee, being service of a written demand, has occurred.
(1) Proof of debt
- [20]The respondents submit that the evidence supporting the claim for the moneys said to be due and owing is unsatisfactory. Reliance is placed on observations of Chesterman JA in Hanson Construction & Materials Pty Ltd v Norliss Pty Ltd.[9] His Honour observed that there is a need for a proper evidentiary basis when summary judgment is sought on a debt. Plaintiffs should comply with the rules of evidence and practice, and otherwise cannot expect to succeed. The deponent in that case did not explain her sources of information or the reasons for her beliefs sworn in the affidavit material. It was a case concerning the supply of concrete from time to time on a running account, as proven by invoices. However, in that case, what was not proved with any precision was the assertion that the amounts had not been paid; the business records relevant to that issue had not been produced. The observations were obiter dicta; as his Honour said at [23] the point was not necessary to decide, because leave was properly refused to withdraw deemed admissions. Nonetheless, the principles are clear and no doubt uncontroversial, subject to the particular circumstances of individual cases.
- [21]The respondents here similarly point to what they submit is the lack of precise evidence on this topic. At the outset it must be said this is a simpler case factually than Hanson. In this case, there was an advance and monthly interest payments that were not paid. It was not a running account for goods supplied.
Applicant’s response – evidence of Porter
- [22]The response of the applicant to this argument is that the debt is proved by the affidavit of the company secretary, Mr Porter, filed 16 November 2016. He deposes (without contradiction) that the corporate defendants are subsidiaries of the recently failed Members Alliance Group (a housing finance provider) once controlled by the third and fourth respondents. He sets out the facts of the advance; the unpaid monthly interest, which was payable quarterly in advance; the term of the loan had expired on 17 September 2016 and thus the principal sum had then fallen due; these amounts remained unpaid; and the claimed legal costs and expenses, proven by an exhibited tax invoice. The applicant also points to the deemed admission of paragraph 22 of the Statement of Claim.
(2) Service of a written demand
- [23]The respondents rely on clause 1.3 of the guarantee arguing it requires a demand before payment becomes due (the clause certainly includes these words). They refer to a passage from Equititrust Ltd v Gamp Developments [2009] QSC 115 to this effect and say no such demand was made; thus the cause of action is not made out. If this were correct, then like Equititrust, it might be a case where the application, rather than being dismissed, could be adjourned to have the formal demand attended to. As set out below, this is not necessary.
Applicant’s response – evidence of Nash
- [24]The applicant’s response is to refer to the course of dealings as shown by the affidavit of Mr Nash (also filed 16 November 2016), which exhibits correspondence and sets out a chronology. On 4 April 2016, the applicant’s solicitor emailed a letter to the third respondent and others. The letter asserted that an interest payment was outstanding and was directed to all respondents, including by email to the third respondent and to all respondents by post. It indicated an intention to call upon the guarantors for payment. On 28 June 2016, the solicitor sent an email to Mr Young, the respondents’ in-house counsel, requiring the respondents to pay outstanding instalments for June, July and August (which had been due on 17 June). The third respondent was copied into this email (“DCN 4”). The email attached previous correspondence from 12 May 2016 which was addressed to all the respondents including the fourth respondent. It sets out how the amounts are calculated, the fact they are outstanding, and the intention of the applicant to enforce the guarantee without further notice.
- [25]Next, exhibit “DCN 7” to Mr Nash’s affidavit is a copy of an email sent at 2.19pm on 2 August 2016 in responding to an email from the respondent’s solicitor at 12.54pm that day. The email indicates a demand that the loan obligations be met immediately – payment of the “outstanding facility balance”. This is consistent with clause 21 of the Loan Offer Contract, exhibit ‘TDP 3’ to Mr Porter’s affidavit, which provides for all outstanding amounts to become due where the debtor is in default and the Credit Provider gives notice thereof. The email mentions all the respondents (the only involvement of the third and fourth respondents was as guarantors). In the context of the email of 28 June and the letter of 12 May, it amounted, so it is argued, to a written demand of performance including the guarantee, so as to comply with the deed.
Notice not properly directed?
- [26]The respondents resist the effect of the email sent on 2 August on the basis that the email correspondence indicates the solicitors were acting for the first respondent only at that stage. The solicitor confirmed later that his firm acted for the first to third respondents, on 19 August 2016 and, later, the firm also began to act for the fourth respondent after he had been personally served; “DCN 9” on the 19th September. The solicitors had clearly acted for all four respondents for some little time by that stage; they filed the defence on behalf of all the respondents on 16 September.
- [27]The respondents thus submit that there is no evidence of a demand being made on the third or fourth respondents as guarantors as opposed to directors, nor was a demand delivered to them in accordance with the terms of the guarantee, clause 6.3. They point out that the email of 2 August was not directed to the third and fourth respondents and the solicitors were only acting for the first respondent at that point; further, that correspondence was not posted to them. They submit that the capacity in which the third and fourth respondents were being pursued was not made clear. In essence they argue that these matters vitiate the effectiveness of the email as a demand.
Discussion
- [28]It is true that the demand could have been more precisely and comprehensively expressed. However in my view the email is a proper demand in its terms and the context of the previous correspondence, particularly the letter of 12 May. As to the proper delivery of the notice, clause 6.3 is not an exclusive code. The notice was given to the solicitor who had stepped into the shoes of Mr Young as a contact point for the respondents; the first respondent, as at that day, and the remaining three respondents within six weeks thereafter, at least prior to the filing of a defence on behalf of all four respondents. This was sufficient notice.
- [29]Further, if a deemed admission is found to have been made of paragraphs 24 to 27 of the Statement of Claim, there is then no contest as to the amount of default as at 28 June; the giving of notice of this and the continuance of default; and the further demand of 2 August. I so find on the basis, firstly, that the pleadings in paragraphs 25 to 27 of the defence impermissibly plead a non-admission concurrently with a denial.[10] Secondly, as to paragraph 28, there is no reasonable basis for the non-admission of the fact of an email which was clearly sent to the respondents’ solicitor. There cannot have been “reasonable enquiries” when the solicitor responsible for the pleading was aware of the email. The recourse to paragraph 1(b) of the defence has no merit when the email was sent to the solicitor with carriage of the matter at the firm that filed the defence. Thus, although use of the words “despite reasonable enquiries remain uncertain” are a common usage consistent with the rule, in the circumstances of this case they do not amount to a direct explanation with the result that UCPR 166(4) and (5) are engaged and there is a deemed admission.
Was the demand deficient?
- [30]Another argument advanced by the respondents was that any demand for payment was deficient, because the pleaded notice of 28 June did not demand immediate payment of the entire sum.[11] However the notice of 2 August was also pleaded and made an immediate demand for the outstanding balance. The respondents’ arguments about that notice, and my conclusions thereon, are set out in paragraphs [27] to [29] above.
Evidence of amount claimed
- [31]The respondents also submit that the amount sought is not set out in the application; however it is deposed to by Mr Porter. It is then submitted, in relation to that (uncontradicted) evidence, that paragraph 17 of Mr Porter’s affidavit, where the amounts are set out, is a “conclusion”, hearsay, and inadmissible. However the principal and interest amounts are consistent with the correspondence and uncontentious. Mr Porter exhibits the tax invoice establishing the legal costs. A “conclusion” is not objectionable if the basis for it is demonstrated, which in this case it is. The tax invoice is within the meaning of a book of account in s 83 of the Evidence Act 1977 (Qld) and thus a documentary exception to the hearsay rule. In my view this objection is not made out.
Conclusion
- [32]Thus, as in National Australia Bank, in my view the defences raised have no real prospect of success; there is no need for a trial of the action; the claim based on the loan agreements and guarantees is straightforward; there is nothing in the respondents’ material to counter the exercise of the discretion to enter judgment and, therefore, I give judgment for the applicant in terms of the application. Costs would normally follow the event on the standard basis, however I will hear the parties on that issue.
Other matters
- [33]Arguments were raised by the respondents as to the introduction of emails from the in-house counsel, which were headed “without prejudice”. In my view it is doubtful whether there is a claim of privilege where the correspondence (from the in-house counsel) is merely and uniformly given this heading and the body of the communication does not contain any elements of compromise; any admissions; discussion of the strength or weaknesses of the parties’ cases or place a value on the parties’ rights. The mere heading “without prejudice” does not magically confer immunity, rather the true nature of the communication must be examined.[12] However, I have not in any case had reference to those emails.
- [34]I therefore order that judgment on the claim be entered in favour of the applicant/plaintiff against the respondents/defendants in the sum of $191,256.92.
Footnotes
[1] Paragraph 23 of the defence.
[2] Upton v Westpac Banking Corporation [2016] QCA 220, [15]-[16].
[3] Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232.
[4] Ibid, [11].
[5] [2002] QSC 051, [38].
[6] [2014] QCA 110.
[7] See r 165(2) of the Uniform Civil Procedure Rules 1999 (Qld).
[8] Paragraph [8], above; Upton v Westpac Banking Corporation [2016] ACA 220, [16].
[9] [2010] QCA 246; [2010] 79 ACSR 668, [34].
[10] Green & Ors v Pearson [2014] QCA 110.
[11] See Equititrust Ltd v Gamp Developments [2009] QSC 115, [19]-[20].
[12] See Cross on Evidence, current online edition, paragraph [25355] and the cases therein.