KV Projects Pty Ltd v Regal Bridges Pty Ltd (No. 2)
[2021] QDC 37
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- Unreported Judgment
- KV Projects Pty Ltd v Regal Bridges Pty Ltd (No. 2)[2021] QDC 37
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KV Projects Pty Ltd v Regal Bridges Pty Ltd (No. 2)[2021] QDC 37
KV Projects Pty Ltd v Regal Bridges Pty Ltd (No. 2)[2021] QDC 37
DISTRICT COURT OF QUEENSLAND
CITATION: | KV Projects Pty Ltd v Regal Bridges Pty Ltd and Ors (No. 2) [2021] QDC 37 |
PARTIES: | KV PROJECTS PTY LTD ACN 623 423 138 (plaintiff) |
v | |
REGAL BRIDGES PTY LTD ACN 615 989 494 (first defendant) | |
ANDREW MICHAEL CARR (second defendant) | |
JOSHUA ODIN STUART DEEM (third defendant) | |
FILE NO/S: | D32/2020 |
DIVISION: | Civil |
PROCEEDING: | Assessment of damages |
DELIVERED ON: | 4 March 2021 (orders) 5 March 2021 (reasons) |
DELIVERED AT: | Maroochydore |
HEARING DATE: | 4 March 2021 |
JUDGE: | Cash QC DCJ |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – Where the plaintiff secured default judgment against the defendants – where the plaintiff submits an entitlement to damages under an agreement – where the plaintiff further submits an entitlement to damages under the Australian Consumer Law. Uniform Civil Procedure Rules 1999 (Qld), r 284, 367, r 390, r 509, r 685 |
COUNSEL: | D. Worrell |
SOLICITORS: | Stonegate Legal for the plaintiff No appearance for the defendants |
- [1]This was a hearing for the assessment of damages pursuant to Chapter 13, Part 8 of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’). It arose in circumstances where the plaintiff has secured default judgment against each of the three defendants. As the claim was for unliquidated damages, the default judgment in each case was conditional upon the assessment of damages.[1] On 4 March 2021 when the matter was heard I made orders assessing damages in a total amount of $205,363.03 (inclusive of $26,563.03 in interest) and awarding fixed costs to the plaintiff. These are my reasons for making those orders.
The plaintiff’s claim
- [2]By reason of the default of the defendants, they are taken to admit the allegations concerning liability in the statement of claim.[2] The material facts so admitted were set out in the written submissions of the plaintiff. This summary is set out below, with paragraph numbers and footnotes omitted.
In November and December 2017, the second defendant (Carr) and third defendant (Deem) offered Christopher Kerrisk (Chris) and Victoria Kerrisk (Victoria) the opportunity to be involved in an investment scheme.
Carr and Deem offered them the opportunity to be involved in a two-part investment deal. The deal consisted of:
a. Part 1: Chris and Victoria would obtain a $20 million loan via a “sinking fund” from their contacts; and
b. Part 2: Chris and Victoria would use $10 million of those funds to participate in offshore trading. (the Investment)
At the time of the offer, Carr was a director of Modena Properties Pty Ltd (Modena Properties), which traded as “Westchester Properties”, and Deem was legal counsel for Modena Properties.
Multiple representations were made by the defendants to Victoria and Chris.
Those representations were made by the defendants:
a. in order to induce the plaintiff to enter into the Agreement and pay the Commitment Fee and Other Amounts;
b.fraudulently and either well knowing they were false or recklessly not caring whether they were true or false;
c. were in trade or commerce within the meaning of s 18 of the ACL;
d. misleading by virtue of s 4 of the ACL;
e. in contravention of s 18 of the ACL;
f. in connection with a financial service within the meaning of s 12BAB of the ASIC Act;
g. unconscionable;
h. in contravention of s 12CB(1) of the ASIC Act.
Those representations induced Victoria and Chris to enter into an agreement in relation to the Investment with Modena Properties.
Initially, Victoria and Chris entered into the agreement with Modena Properties through their company, Kerrisk Management Pty Ltd (Kerrisk Management).
The Agreement was that Modena Properties promised to facilitate the Investment and Kerrisk Management agreed to pay an upfront fee of $175,000 (the Commitment Fee).
The Agreement was partly oral and partly in writing. To the extent that it was in writing, it consisted of:
a. the Services Agreement dated 8 December 2017; and
b. the document entitled Authority to Act.
To the extent that it was oral, it consisted of promises by Carr and Deem that the Commitment Fee would be fully refunded if Modena Properties was unable to facilitate the Investment.
It was an express term of the agreement that a payment made by the investor known as the Commitment Fee was fully refundable if Modena Properties was unable to facilitate the investment.
Chris arranged payment of the required Commitment Fee to Modena Properties.
In or about 21 December 2017, the parties agreed to novate the agreement between them substituting the first defendant in place of Modena Properties and the plaintiff in place of Kerrisk Management.
In or about February or March 2018, the defendants said that in order to facilitate the investment they required payment of certain amounts by the plaintiff to third parties (not parties to these proceedings). Those payments were made. Those payments consisted of a payment of $5,000 and a payment of $15,000 (the Other Amounts).
On or about 22 May 2018, Carr advised the plaintiff that access to the investment was not possible.
On 24 May 2018, Carr advised the plaintiff that while a refund of the commitment fee would be made, it might be in multiple payments over 4 months.
On 8 June 2018, a payment plan was offered by the first defendant offering:
a. $25,000 within 2 weeks;
b. $50,000 the next month;
c. $100,000 the following month.
On 25 June 2018, the first defendant refunded $25,000 to the plaintiff.
The first defendant continued to acknowledge that the refund of the Commitment Fee was due and payable.
On 5 December 2018, the first defendant agreed to pay the plaintiff 3% interest per month for 2 months on the outstanding amount in return for an extension to pay (the Interest Amounts).
No repayments (other than the $25,000) have been made by the defendants to the plaintiff.
- [3]It must also be understood that the defendants were taken to have admitted an allegation that the third defendant was present and agreed with each of the fraudulent representations made by the second defendant. There was no basis for distinguishing between the liabilities of any of the three defendants.
- [4]In written submissions the plaintiff submitted the damages should be assessed as follows:
- a.$150,000 pursuant to the ACL being the amount of $175,000 paid as a ‘commitment fee’ less $25,000 that was refunded by the defendants;
- b.$9,000 being the agreed interest on 3% per month for two months on the balance of $150,000;
- c.$20,000 pursuant to the ACL pursuant being the amount paid to other entities as a result of the fraudulent representations of the defendants.
Consideration
- [5]I was satisfied at the hearing that the plaintiff had served notice of the hearing date as required by r 509(3) of the UCPR.[3]
- [6]The plaintiff sought to rely upon affidavit material to provide evidence of its damages. Rule 509 requires a hearing for the assessment of damages to ‘be conducted as nearly as possible in the same way as a trial’. Rule 390 provides that, subject to a direction of the Court, that evidence at the trial of a proceeding commenced by claim may only be given orally. At the commencement of the hearing on 4 March 2021 I directed, pursuant to r 367(3)(d) that the evidence in this hearing be given by way of affidavit. This was the appropriate course where the defendants have not appeared and there was no one to challenge the evidence of the deponents. There would, in these circumstances, be no point in requiring the deponents to give oral evidence of the matters to which they have already deposed.
- [7]Evidence of the agreements and payments can be found in the affidavit of Christopher Kerrisk filed on 27 August 2020 (court document 19). In it he deposed to the agreement to pay $175,000 as a ‘commitment fee’,[4] the payment of $175,000 in three tranches,[5] the further payment of $20,000 in two tranches as a result of fraudulent representations by the first defendant,[6] the refund of $25,000,[7] and, finally, the agreement of the first and second defendants to pay interest on the outstanding amount.[8]
- [8]I accept that the amounts set out by the plaintiff represent that loss it has suffered. It is appropriate to assess damages in these amounts, being $150,000, $20,000 and $9,000. It is also appropriate that there be interest on these amounts to the date of judgment. The amounts for interest are set out in the plaintiff’s written submissions and total $26,363.03.
- [9]Finally, the plaintiff sought costs, in fixed amounts, of the proceeding and also of the application for substituted service concerning the second defendant. The amount claimed in relation to the costs of the proceeding was $27,184.14. This represented an amount calculated by the plaintiff’s solicitor as the reasonable legal costs discounted by 35%.[9] This was a just amount and fixed costs in this amount were awarded pursuant to r 685 of the UCPR. The application for an order for substituted service was precipitated by what I concluded was likely to be attempts to avoid service by the second defendant.[10] In these circumstances an award of indemnity costs would have been appropriate. Instead, fixed costs were calculated by the plaintiff’s solicitor by discounting the otherwise reasonable legal costs of the application by 15%. I accepted this was a proper way to calculate the costs.
- [10]For these reasons, on 4 March 2021, I ordered:
- The plaintiff’s damages in respect of the default judgments issued by the Court against each of the first defendant on 11 May 2020, the second defendant on 25 November 2020 and the third defendant on 3 June 2020, are assessed in the sum of $205,363.03 (inclusive of an amount of $26,363.03 as interest).
- The defendants pay the plaintiff’s costs of the proceeding fixed in the sum of $27,184.14.
- The second defendant is to pay the plaintiff’s costs of the application for substituted service dated 2 October 2020 fixed in the sum of $1,394.00
Footnotes
[1] UCPR, r 284.
[2]Watson Specialised Tooling Pty Ltd v Stevens [1991] 1 Qd R 85, 93-4.
[3] Affidavit of Wayne Phillip Davis filed 25 February 2021 (court document 37).
[4] At paragraph [20].
[5] At paragraph [24].
[6] At paragraphs [32]-[33].
[7] At paragraph [38].
[8] At paragraphs [39]-[40].
[9] Affidavit of Wayne Philip Davis affirmed 4 March 2021 and filed by leave the same day (court document 39).
[10] See [2020] QDC 261 at [9].