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- Unreported Judgment
Currie v Meredith QDC 19
DISTRICT COURT OF QUEENSLAND
Currie v Meredith  QDC 19
IAN CURRIE AS LIQUIDATOR OF MT PRITCHARD PIZZA PTY LTD (IN LIQUIDATION)
MT PRITCHARD PIZZA PTY LTD (IN LIQUIDATION)
ACN 122 700 672
PETER EUGENE MEREDITH
(First Respondent/First Defendant)
PIZZA PIZZAZZ PTY LTD
ACN 606 575 366
(Second Respondent/Second Defendant)
HEADS UP AUS PTY LTD
ACN 635 354 666
(Third Respondent/Third Defendant)
31 January 2020, ex tempore
29 January 2020
Barlow QC DCJ
THE JUDGMENT OF THE COURT IS THAT:
THE COURT ALSO ORDERS THAT:
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – WHEN GRANTED OR REFUSED AND CONDITIONS – whether the third defendant has no real prospect of successfully defending all or part of the plaintiff’s claim – whether there is no need for a trial of the claim – whether granting summary judgment would be premature – whether there is a risk of inconsistent findings
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 second plaintiff is in liquidation and the first plaintiff is its liquidator – where the third defendant is the trustee of a trust of which the second plaintiff was the previous trustee – where the second plaintiff alleges that, as trustee, it incurred a debt and seeks indemnity out of the assets of the trust – where the trust deed provides expressly that the trustee is entitled to be indemnified out of the assets of the fund against liabilities incurred by it in the exercise of the trusts – whether there is evidence of the second plaintiff’s liability for the sum claimed – whether a running balance account statement is evidence of the second plaintiff’s liability to the Australian Taxation Office
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – EVIDENCE IN SUPPORT OF APPLICATION – where the Australian Taxation Office lodged a proof of debt claiming $204,255.15 for GST and general interest charges that were said to be owing under the second plaintiff’s running balance account – where the running balance account statement was annexed to an affidavit of the second plaintiff – where the defendants submit that the second plaintiff had not proved its source – whether the Court should accept the document to be a running balance account statement
TAXES AND DUTIES – ADMINISTRATION OF FEDERAL TAX LEGISLATION – COLLECTION AND RECOVERY OF TAX – where the Australian Taxation Office lodged a proof of debt for charges that were said to be owing under the second plaintiff’s running balance account – whether a running balance account statement was proof of the debt owed by the second plaintiff to the Australian Taxation Office
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – where the plaintiffs substantially amended the claim and statement of claim – where by rule 692(2) of the Uniform Civil Procedure Rules 1999, the plaintiffs must pay the costs thrown away by amendments it made unless the court otherwise orders – whether the court should order otherwise
Corporations Act 2001 (Cth) ss 530B, 588FE, 588M
Taxation Administration Act 1953 (Cth) ss 8AAZA, 8AAZG, 8AAZH, 8AAZI
Uniform Civil Procedure Rules 1999 (Qld) rr 292, 658, 692
Bolton Properties Pty Ltd v JK Investments Pty Ltd  2 Qd R 202, considered
Deputy Commissioner of Taxation v Salcedo  2 Qd R 232, applied
Min Lung Proprietary Limited v Moonace Proprietary Limited  QDC 146, considered
In the matter of Oakdale Queensland Pty Limited  NSWSC 1958, applied
LM Copley for the first plaintiff and the second plaintiff (applicant)
BJ Kabel for the defendants (respondents)
Stratos Legal for the plaintiffs
Tucker & Cowen for the defendants
- This is an application for summary judgment brought by the second plaintiff against the third defendant. The second plaintiff is in liquidation and the first plaintiff is its liquidator. The third defendant is the trustee of a trust of which the second plaintiff was the previous trustee. The second plaintiff alleges that, as trustee, it incurred a debt due to the Australian Taxation Office, or the Deputy Commissioner of Taxation, for which it seeks indemnity out of the assets of the trust.
- The application is brought under rule 292 of the Uniform Civil Procedure Rules. The first question under that rule is whether the third defendant has no real prospects of successfully defending the claim. That means real prospects as opposed to fanciful prospects, as Williams J said in Deputy Commissioner of Taxation v Salcedo  2 Qd R 232, where his Honour considered the meaning of the rule at paragraphs 11 to 13, in particular.
- The test is really whether there is a high degree of certainty about the ultimate outcome of the proceeding if it were to go to trial in the ordinary way. In that respect, I refer to Agar v Hyde (2000) 201 CLR 552, at pages 575 to 576, as quoted by President McMurdo in Deputy Commission of Taxation v Salcedo at paragraph 3.
- The second question under rule 292 is whether there is no need for a trial of the relevant claim. If there is a triable issue of law there is often a need for a trial even if the facts are not in dispute or are sufficiently certain at the time of the application.
- Both of those tests must be successful for the plaintiff to succeed in the application. The summary judgment application should be refused if the court is satisfied that there are circumstances that ought to be investigated, notwithstanding that the defendant cannot identify a specific issue which ought to be tried. The onus is on the plaintiff to satisfy the court of those two requirements, and only when a prima facie entitlement to summary judgment has been established does the evidentiary burden shift to the defendant: see Queensland Pork Proprietary Limited v Lott  QCA 271 at page 8 to 9 in the judgment of Jones J.
- Given that the defence will have been filed, as it has been in this case, prior to the summary judgment application, the plaintiff will need to specifically address any grounds of defence raised. In Al Ghadeer Proprietary Limited v Harrison Tyres Proprietary Limited  QDC 203, Judge McGill SC acknowledged that there is no particular requirement in rule 292 as to what a defendant needs to do in order to prevent a court from being satisfied of any or all of the matters set out in subrule (2).
- In Kingsley v Williams  QDC 213, Judge Forde noted that, unlike the former procedure for summary judgment, there is no onus upon the defendant to show cause by affidavit. Rather, it may contend that the plaintiff has not demonstrated that the defendant has no real prospect of success without the need for affidavits. However, if a plaintiff establishes a prima facie entitlement to summary judgment, the evidentiary onus will shift to the defendant to bring evidence of a defence or other need for a trial, and rules 295 and 296 provide that affidavits giving evidence in defence are still part of the procedure, as they were under the old summary judgment rules.
- In Min Lung Proprietary Limited v Moonace Proprietary Limited  QDC 146, Judge Alan Wilson SC said the following – and I am going to quote at some length, because it’s relevant to this application in particular:
 … The usual meaning of the word ‘realistic’ (‘… interested or concerned with what is real or practical’) suggests that the phrase, as it is used in the rule, requires the court to consider the prospects from a standpoint of practicality. …
 … The natural and ordinary meaning of ‘real’, used to describe prospects of success in the context of the rule, might be said to require a focus upon the tangible features of the case in the context of a fair and careful enquiry, rooted in practicality, whether the court can be satisfied that the plaintiff will succeed, and delay (and a trial) are futile.
 … The notion that respondents to an application for that kind of relief who are faced, as here, with a persuasive case may simply plead an allegation about a fact, matter, or event said to create a defence (but without descending to any particularity or attempting to raise up a counterclaim) and thereby reduce, or even extinguish the plaintiff’s claim if the allegation is not rebutted by evidence from the plaintiff is not compelling. Its logical concomitant is that any assertion raised by a defendant casts an onus back upon the plaintiff to adduce evidence which will extinguish it.
 White the burden of proof will always remain, principally, with the applicant the kind of bald allegation made here cannot prevail, nor have efficacy, without something of greater substance from its maker, or other appropriate source. As Williams JA said in Clyde Contractors Pty Ltd v Northern Beaches Dev Pty Ltd  QCA 314 at p 5:
 There was an onus on the appellant to demonstrate that there was some issue to be tried or some other good reason for the matter to go to trial. (emphasis added)
While his Honour was not suggesting that evidence is essential, the statement illustrates the proposition that an assertion of a positive defence does not automatically create, without something more, an obligation on the plaintiff’s part to address it.
- It’s uncontentious in this case that the second plaintiff operated the business over a number of years, but solely as trustee of a unit trust. The trust deed provides expressly that the trustee is entitled to be indemnified out of the assets of the fund against liabilities incurred by it in the exercise of the trusts. It also provides that a trustee is removed from office if, being a company, it is wound up.
- The second plaintiff was wound up in insolvency on 12 October 2018. It was, therefore, automatically removed as trustee of the trust on that date. The first plaintiff, as I have said, is its liquidator. The third defendant is the new trustee of the trust, having been appointed by the first defendant some time after the second plaintiff was wound up.
- The petitioning creditor for the liquidation was the Australian Taxation Office, which relied on a debt comprising unpaid tax liabilities constituting GST – or goods and services tax – payable on sales as well as general interest charges. The ATO lodged a proof of debt claiming $204,255.15 for GST and general interest charges that it said were owing under the second plaintiff’s running balance account with the office. A running balance account is a concept established under the Taxation Administration Act 1953 in Part IIB. Relevantly, it provides, in section 8AAZA as follows:
RBA means a running balance account established under section 8AAZC.
RBA deficit debt in relation to an RBA of an entity, means a balance in favour of the Commissioner based on:
- (a)primary tax debts that have been allocated to the RBA and that are currently payable; and
- (b)payments made in respect of current or anticipated primary tax debts of the entity, and credits to which the entity is entitled under a taxation law, that have been allocated to the RBA.
RBA statement means a statement prepared by the Commissioner under section 8AAZG.
- The Taxation Administration Act also relevantly provides as follows:
8AAZG RBA statements
The Commissioner may at any time prepare a statement for an RBA, containing such particulars as the Commissioner determines.
8AAZH Liability for RBA deficit debt
- (1)If there is an RBA deficit debt on an RBA at the end of a day, the tax debtor is liable to pay to the Commonwealth the amount of the debt. The amount is due and payable at the end of that day.
8AAZI RBA statement to be evidence
- (1)The production of an RBA statement:
- is prima facie evidence that the RBA was duly kept; and
- is prima facie evidence that the amounts and particulars in the statement are correct.
- (2)In this section:
RBA statement includes a document that purports to be a copy of an RBA statement and is signed by the Commissioner or a delegate of the Commissioner or by a Second Commissioner or Deputy Commissioner.
- In an affidavit of the first plaintiff, Mr Currie, filed on 13 January 2020 and read for the purpose of this application, at paragraph 17, he says:
Annexed hereto and marked IC-3 is a true and correct copy of the Australian Tax Office running balance account statement of the trust from 15 November 2006 to 11 October 2018.
- The exhibit IC-3 is a copy of a document apparently issued by the Australian Taxation Office to the trust – it is addressed to the trust, not to the second plaintiff itself – headed:
Insolvency – Running Balance Account (RBA) Statement.
- It shows a series of what are described as “self-assessment amounts”, payments and general interest charges for the period shown. The self-assessment amounts are clearly assessments of goods and services tax payable, made in quarterly business activity statements lodged on behalf of the second plaintiff, apparently by its accountants. There is evidence, indeed, on behalf of the defendants that the business activity statements were lodged on the second plaintiff’s behalf by its accountants. There is no suggestion that those accountants did not have authority to lodge those statements, nor is anything raised by the defendants that indicates that any of those statements or the RBA statement itself was or is incorrect. The balance shown in the RBA statement, which is how I shall refer to exhibit IC-3, that comprises that exhibit is the amount claimed in the claim in this proceeding and the sum claimed by way of summary judgment, for this purpose ignoring interest on that claim that is also sought.
- The exhibit is not a document as described in section 8AAZI, subsection (2), as it has not been signed by the Commissioner or any other authorised person. The defendants submit that the plaintiffs have not proved its source and, therefore, the Court should not accept that it is in fact an RBA statement. I do not accept that submission. Mr Currie, in his affidavit, clearly says that it is from the Australian Taxation Office and, on its face, it appears to be. Although the plaintiffs could have taken steps to prove it in a better or clearer manner by stating how it came into their possession, the defendants have not shown any reason to doubt that it is what it purports to be. Notably, the definition of “RBA statement” does not provide that a document not signed by the persons referred to in that subsection is not and cannot be such a statement.
- The effect of an RBA was described by Justice Robb of the Supreme Court of New South Wales in In the matter of Oakdale Queensland Pty Limited  NSWSC 1958. That case concerned an issue of whether a statutory demand issued by the Deputy Commissioner of Taxation should be set aside. As Justice Robb described it, the demand sought an amount comprising an RBA deficit debt as at the date of the demand under the BAS provisions of the Income Tax Assessment Act 1997, which was payable under section 8AAZH of the Taxation Administration Act.
- His Honour described the nature or basis of the dispute alleged at paragraphs 15 and 16 as follows:
 Neither the statutory demand that the defendant served on each plaintiff, nor the affidavit supporting the debt, provided any information as to the items in the RBA of which the final balance was composed. The statutory demand simply claimed the amount of the balance.
 In essence the plaintiffs’ position was that the bare claim in the statutory demands for the balance of the RBA did not give them sufficient information to enable them to understand whether they were liable for the debt claimed, and that this was a defect that could easily have been cured by the defendant annexing to the statutory demand a copy of a statement produced in accordance with s 8AAZG.
- At paragraph 21, his Honour went on to note the following:
The point that the defendant makes in relation to this evidence is that it undermines the claims made by the plaintiffs that the failure by the defendant to itemise the components of the RBA deficit debt had the consequence that the plaintiffs were unable, upon receipt of the statutory demands, to understand how the balance in the RBA was derived, or to form a view as to whether they were liable to the defendant to pay the amount claimed. Each plaintiff must have known the total of its self-assessed liabilities and credits, and the amount of tax payments that it made. It knew of the amount of the administrative penalties, because the defendant delivered penalty notices for each penalty incurred. The only amounts for which the plaintiffs did not have information were the general interest charges, and the plaintiffs should have been able to estimate, at least as an approximation, the accrual of interest.
- His Honour then described the effect of RBA statements and an RBA. At paragraph 32, his Honour said:
The effect is that, by force of the statute, while the primary tax debts retain their separate character, at the one time they are also amalgamated into a single debt, being the RBA deficit debt.
- And at paragraph 38, his Honour said the following:
The statutory effect of s 8AAZH is that the taxpayer becomes indebted to the Commissioner for a separate debt each day when there is a deficit in any RBA maintained by the Commissioner, and that is so whether or not the taxpayer has any basis to challenge the validity or the amount of any primary tax debt that has been allocated to the RBA. The existence of any genuine dispute concerning the validity or the amount of all, or any, of the primary tax debts, will not give rise to a genuine dispute concerning the existence or amount of the RBA deficit debt. The only question can be whether there is any scope for the taxpayer to have a genuine dispute as to whether there is an RBA maintained by the Commissioner for the taxpayer, and whether the amount claimed in the statutory demand is the deficit in the RBA on the date asserted by the defendant in the statutory demand. [This] … leaves little scope for any genuine dispute to arise.
- Thus, the RBA statement in this case is prima facie evidence of the second plaintiff’s liability to the Australian Taxation Office for the sum claimed and it seeks from the current trustee, the third defendant, indemnity for that debt out of the trust assets.
- The defendants submit that the plaintiffs’ claim rests or relies on the accuracy of the self-assessments referred to in the RBA, in other words, the business activity statements, and the accuracy of the RBA itself. Having regard to the effect of the RBA, I disagree.
- The RBA statement established the debt. As Justice Robb said at paragraph 38, that is so whether or not the tax payer has any basis to challenge the validity or amount of any primary tax debt that goes to make up the RBA deficit debt.
- The defendants submit that, as the plaintiffs themselves assert that the second plaintiff did not keep accurate records of its liabilities, that raises the question how the plaintiffs can rely upon the second plaintiff’s records to demonstrate that there is no real prospect that the defendants might succeed in demonstrating that the debt is wrong. But the plaintiffs are not relying on the accuracy of the second plaintiff’s records. Rather, they are relying on the RBA statement and the consequent RBA deficit debt.
- The defendants also submit that some business activity statements have not been filed during the relevant period, as is clear from the RBA statement, so the RBA deficit debt may be incorrect. Also, they submit that income tax returns have not been filed which may give rise to credits owing on that account by the ATO to the second plaintiff. That may be so but those matters do not affect the RBA as presently created. An RBA deficit debt is based on primary tax debts and payments that ‘have been allocated to the RBA.’ Any debts or credits that may arise from documents not yet filed have not been allocated to the RBA and are therefore irrelevant. Further, this RBA is only for GST, so even income tax refunds due do not affect the amount outstanding for GST. Although the statement says it is interim, it does not mean it cannot be relied on by the plaintiffs.
- Therefore, I do not consider that there is anything that merits the investigation of the facts notwithstanding that the third defendant says that it cannot identify a specific issue that ought be tried.
- In all these circumstances I find that there is no real prospect that the third defendant will succeed at a trial in its defence of the second plaintiff’s claim for indemnity for the second plaintiff’s debt to the Australian Taxation Office.
- The defendants also submit that I cannot be satisfied that there is no need for a trial of the second plaintiff’s claims against the third defendant, for a number of reasons. First, they submit that it is premature to grant summary judgment because it is sought so soon after an amended statement of claim was filed and served by the plaintiffs. In this respect I refer in particular to paragraph 16 of the defendants’ written submissions and Ms Kabel’s oral submissions in support. In paragraph 16, Ms Kabel said:
The amended defence does not presently plead a positive defence on this aspect of the plaintiff’s claim. Instead the allegations are largely not admitted. In part this is explicable as the most recent iteration of the proceedings are at a very early stage.
- She goes on to stress the short period between the time that the amended defence was filed in answer to the amended statement of claim and the filing of the application for summary judgment. The defendants assert that the plaintiff is in an extraordinary rush to seek summary judgment when the defendants have not had a proper opportunity to obtain the second plaintiff’s records from its and the first defendant’s accountants and to engage an expert to check the accuracy of the RBA statement and of all debts owing to or by the Australian Taxation Office.
- In this respect I refer again to the statement by Judge Wilson SC in Ming Lung v Moonace at paragraph 17, which I’ve already quoted, that:
… an assertion of a positive defence does not automatically create, without something more, an obligation on the plaintiff’s part to address it.
- Nor, in my view, does a non-admission of the principle allegations on the basis that the defendant has not been able to make sufficient inquiries to determine the truth or otherwise of the plaintiffs’ allegations automatically create an obligation on the plaintiffs’ part to provide that information before it can obtain summary judgment. I do not consider there to have been an extraordinary rush in making this application.
- Under the rules, a plaintiff is entitled to seek summary judgment at any time after the defence is filed. The purpose of summary judgment is to save the court and the parties the time and expense in avoiding interlocutory processes where a claim meets the tests in rule 292.
- The defendants have also sought particulars of the amended statement of claim. As summarised in the written outline of submissions on behalf of the defendants they include (a) a breakdown of the individual amounts which are said to comprise the debt; (b) the date on which each liability is said to have been incurred by the second plaintiff; (c) how each liability is said to arise; and (d) the basis upon which each liability is said to have arisen in the second plaintiff’s capacity as trustee. However, given the effect of an RBA statement, I cannot see how the defendants are entitled to such particulars. The debt is not the individual tax debts referred to in the statement but is simply the total RBA deficit debt. Furthermore the defendants have the entire RBA statement which, in any event, answers each of those requests.
- In paragraph 20 of the written outline on behalf the defendants the following passage is quoted from a decision of Justice Chesterman in Bolton Properties Pty Ltd v JK Investments Pty Ltd  2 Qd R 202 at paragraph 24. His Honour there said:
In practical terms I suspect the rule means [as the old rules meant] that summary judgment should not be given where the facts upon which the parties’ respective rights depend are disputed or where the respondent to the application for summary judgment adduces evidence as to the existence of facts which, if proved, would establish a defence or a right to relief. In other words …
- And the following words are underlined in the submissions:
… it is only where all the facts are known and/or are established beyond controversy that the Court should embark upon determining whether to give summary judgment. Where relevant facts are controverted or where it appears that facts may exist which would affect the right of action or defence, there should be a trial to determine the facts.
- The defendants go on to submit that the plaintiffs’ claim is complex. But it is, in fact, simple. The facts are not controverted by mere non-admissions. Nor does it appear that the facts are as described in the underlined passage of that quote.
- Finally, the defendants submit that a grant of summary judgment against the third defendant would have little or no impact on the scope of the dispute between the plaintiffs and the other defendants and would risk inconsistent findings if the court, on a trial of the balance of the matters, found that the RBA deficit debt was not, in fact, owing or not, in fact, in the amount claimed. The defendants submit that the existence and quantum of the debt owed by the second plaintiff to the ATO must also be proved in respect of the insolvent trading claim and the unreasonable director related transactions claim that are made against the first defendant. That, say the defendants, is a reason why there is a need for a trial of the proceeding.
- That part of the proceeding with which I’m presently concerned is the claim by the second plaintiff against the third defendant for an indemnity for the second plaintiff’s liability to the tax office. Summary judgment may be sought and given for part of a claim even if the balance of a claim should proceed to trial.
- But one part of the second plaintiff’s claim is for a loan alleged to have been made by it to the second defendant. That is irrelevant to this claim. The other claim is that the second plaintiff was insolvent or there were reasonable grounds to suspect that it was insolvent when it incurred the RBA deficit debt – presumably meaning the components of that deficit debt – and that the first plaintiff is entitled to recover that sum from the first defendant as its director under section 588M of the Corporations Act. That may require an examination of the second plaintiff’s solvency throughout the period of the RBA but it does not affect the third defendant’s liability immediately to the second plaintiff.
- Similarly, the plaintiffs allege that the second plaintiff made a payment to the second defendant at the behest of the first defendant on 28 March 2018 and the company was insolvent at that time or became insolvent as a result of the payment and it was an unreasonable director related transaction that’s recoverable by the first plaintiff under section 588FE of the Corporations Act. Those allegations must also be proved in other ways than proving the RBA deficit debt, including by demonstrating the assets and liabilities of the second plaintiff at that time. Its liabilities are not demonstrated by the RBA, as that document demonstrates only the debt as at its date, namely, 7 August 2019. Therefore, there is no need to litigate whether the RBA deficit debt existed at that latter date. Nor, in my view, is there a risk of inconsistent findings.
- Therefore, I propose to give judgment for the second plaintiff against the third defendant in the sum of $206,110.93 including interest of $1,855.78. To make matters clear I add that, although the judgment will be against the third defendant, it incurs that debt as trustee of the trust and it, of course, is entitled to its own indemnity from the assets of the trust. The amount that the second plaintiff can recover is therefore limited to the extent of the trust assets, because a trustee or former trustee has personal liability for a debt incurred as trustee but it’s entitled to indemnity from the trust assets, not personally from a subsequent trustee. If there are insufficient assets, the trustee is still liable to the creditor. In this case, the second plaintiff is in that position and it’s not contended, as I understand it – and it could not be – that it can improve its position by having the personal claim against the third defendant regardless of whether there are sufficient trust assets to meet the debt. Of course, if the third defendant were to decline to realise any trust assets and to pay the judgment sum from those assets and merely said that it had no other assets of its own, the second plaintiff and its liquidator would be entitled to obtain direct access to those assets by a right of subrogation. In this respect, see Belar Pty Ltd v Mahaffey  1 Qd R 576 at page 587 paragraph 20 and the cases referred to there.
- I also propose to order that the third defendant pay the second plaintiffs costs of the proceeding and the first paragraph of the application against it.
- The other issue raised by the application arises from the fact that the plaintiffs substantially amended their claim and statement of claim in November 2019. Rule 692(2) provides that a party who amends a document must pay the costs thrown away by the amendment unless the Court otherwise orders. The plaintiffs seek an order that, pursuant to rule 692 or rule 658, any costs in relation to the plaintiffs’ amendments made to the original claim and statement of claim filed on 1 July 2019 be costs in the cause, by which I may understand that to mean costs in the proceeding or, in the alternative, any costs incurred by the first and/or second defendants in relation to the plaintiffs’ amendments made to the original claim and statement of claim be assessed at the conclusion of the proceeding against the first and second defendants.
- The plaintiffs submit that the amendments in November 2019 arose because the first defendant, in particular, failed to provide to the first plaintiff the books and records of the second plaintiff, as he was obliged to do, and only provided the copy of the trust deed to them in August 2019. The plaintiffs also submit that the defendants delivered a costs statement two days before Christmas and the statement is for an extraordinary amount. These matters, it is said, justify the orders sought.
- The defendants say that the first defendant did not have the books and records of the second plaintiff and, in his statement of affairs given to the first plaintiff, he told the first plaintiff that the records were all with the second plaintiff’s accountants and named those accountants. Those records included the trust deed.
- It appears that the first plaintiff did nothing about getting them from the accountants despite being entitled to do so under section 530B of the Corporations Act. The plaintiffs cannot blame the first defendant for that. The defendants only got the trust deed after being served with the statement of claim, so that they could plead the fact of the trust as part of their defence. The amount and date of the costs statement are irrelevant to an entitlement to have the costs thrown away and the fact that amendments were considered necessary is not the fault of the defendants. Indeed, many of the amendments do not appear to be consequential on the plaintiffs having obtained the trust deed or any other documents of the second plaintiff. Therefore there is, in my view, no reason why the usual position described by rule 692 should not apply. Consequently I dismiss that part of the application. I do not consider it necessary to make any other order on that part.
- The orders I shall make are therefore the following:
- Judgment for the second plaintiff against the third defendant in the sum of $206,110.93, including interest of $1855.78;
- The third defendant pay the plaintiffs’ costs of and incidental to the second plaintiff’s claim against the third defendant, including the costs of and incidental to paragraph 1 of the application filed on 13 January 2020;
- The plaintiffs pay the defendants’ costs of and incidental to paragraph 2 of the application filed on 13 January 2020;
- The application filed on 13 January 2020 otherwise be dismissed.
- I’ll order that the third defendant pay the plaintiffs’ costs of and incidental to paragraph 1 of the application filed on 13 January 2020. So that will be order 2 instead of what I read out before.
- Published Case Name:
Currie v Meredith
- Shortened Case Name:
Currie v Meredith
 QDC 19
Barlow QC DCJ
31 Jan 2020