Lees v Iskander Racing Pty Ltd
[2008] QSC 34
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- Unreported Judgment
- Lees v Iskander Racing Pty Ltd[2008] QSC 34
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Lees v Iskander Racing Pty Ltd[2008] QSC 34
Lees v Iskander Racing Pty Ltd[2008] QSC 34
SUPREME COURT OF QUEENSLAND
CITATION: | Lees & Ors v Iskander Racing P/L [2008] QSC 34 |
PARTIES: | ANDREW LEES GURRAVEMBI INVESTMENTS PTY LTD ROSS KIERNAN v ISKANDER RACING PTY LIMITED ACN 091 950 579 |
FILE NO: | BS 10796 of 2007 |
DIVISION: | Trial Division |
PROCEEDING: | Application for summary judgment |
DELIVERED ON: | 3 March 2008 |
DELIVERED AT: | Supreme Court at Brisbane |
HEARING DATE: | 19 February 2008 |
JUDGE: | Wilson J |
ORDER: | Application dismissed |
CATCHWORDS: | CONTRACTS – CLAIM FOR SPECIFIC PERFORMANCE - APPLICATION FOR SUMMARY JUDGMENT |
COUNSEL: | JI Otto for the applicant plaintiffs No appearance for the respondent defendant |
SOLICITORS: | Hopgood Ganim Lawyers for the applicant plaintiffs No appearance for the respondent defendant |
- Wilson J: The plaintiffs have applied for summary judgment against the defendants in a proceeding in which they claim specific performance of an agreement by which the defendant agreed to purchase shares in a syndicate that owned a thoroughbred horse called Written Tycoon.
History of proceeding
- The proceeding was commenced in the District Court on 1 August 2007 in relation to a first tranche of 3.6 shares. Shand Taylor Lawyers, as town agents for the defendant’s Sydney solicitors MWA Lawyers, filed a notice of intention to defend and a defence. The plaintiffs subsequently amended their statement of claim to include a claim in relation to a second tranche of 6 shares, and the same solicitors filed an amended defence. The proceeding was transferred to this Court by order of Byrne SJA made on 13 November 2007.[1] An amended claim was filed on 19 November 2007 and an amended defence was filed on 20 November 2007.
- The application for summary judgment was filed on 19 December 2007 and made returnable on 15 January 2008. The parties agreed that it should be adjourned to 19 February 2008. On 8 January 2008 Shand Taylor advised the plaintiffs’ solicitors that the defendant would file and serve any affidavit material to be relied on at the hearing of the summary judgment application at least seven days prior to the hearing date.[2]
- On 15 February 2008 MWA Lawyers sent an email to the Registry of the Court and a copy of it to the plaintiffs’ solicitors, which they asked to be placed on the Court file prior to the hearing on 19 February 2008. They advised that the defendant had withdrawn its instructions to them and Shand Taylor, and set out certain arguments in response to the summary judgment argument which the defendant had instructed them to note in the communication prior to withdrawing instructions.[3] Counsel for the plaintiffs addressed those arguments in his submissions, as well as other matters raised by the defence.
- There was no appearance by the defendant on the hearing of the application.
- By rule 295 of the Uniform Civil Procedure Rules an affidavit used in support of a summary judgment application may contain statements of information and belief if the person making the affidavit states the sources of the information and the reasons for the belief. In this case the only evidence relied on is contained in affidavits by the plaintiffs' solicitor Mr Peacock, which contain statements of what he was informed by the first and third plaintiffs and a director of the second plaintiff, as well as first hand evidence of his dealings with the former solicitors for the defendant.
The claim
- The plaintiffs’ claim is for specific performance of an agreement in writing entered into in or about December 2006 by which they agreed to sell to the defendant who agreed to purchase “9.6 shares in the Syndicate of 60 shares which owns [the horse]”.[4]
- It is necessary to review a little of the history of dealings between the parties.
- In or about August 2005 the plaintiffs agreed to purchase a 20 per cent ownership interest in the horse, in the following proportions:
- the first plaintiff, 5 per cent for $173,250;
- the second plaintiff, 5 per cent for $173,250; and
- the third plaintiff, 10 per cent for $346,500.
The terms upon which the plaintiffs agreed to purchase their respective interests included -
- that the horse would be syndicated into 10 racing shares;
- that when the horse was retired to stud, each racing share would be converted into five shares in a stallion syndicate of 50 shares.[5]
- There was a dispute about the sale price, the plaintiffs alleging that Mr Iskander had said it was "at cost" when it really exceeded cost price. This was resolved by Mr Iskander's agreeing that 60 rather than 50 stallion syndicate shares would be issued. Ultimately two agreements for the disposition of the plaintiffs’ interest in the stallion were executed:
- Agreement for the Sale of Shares in the Thoroughbred Stallion "Written Tycoon” made between the plaintiffs as Sellers and the defendant as Buyer in December 2006 ("the re-purchase agreement");[6]
- Agreement between the plaintiffs and others as Sellers, Lee James Fleming (trading as Eliza Park) as Buyer, Iskander Racing Bloodstock Pty Ltd as Agent and Sire Custodians Ltd as custodian made 16 February 2007 ("the Fleming agreement");[7]
as well as
- a Deed between the Owners (including the plaintiffs in the proportions of 5 per cent, 5 per cent and 10 per cent), the defendant as Racing Manager, Fleming as Studmaster and Sire Custodians Pty Ltd ("the syndication deed").[8]
- The plaintiffs have sued for specific enforcement of the re-purchase agreement. It contained the following recitals –
A.The Sellers are the owners of 9.6 shares in the Syndicate of 60 shares ('the Syndicate') which owns the thoroughbred chestnut horse WRITTEN TYCOON(AUS), foaled 2002, by IGLESIA from PARTY MISS (by KENMARE) ('the Stallion').
B.The Sellers have agreed to sell and the Buyer has agreed to buy the 9.6 shares in the Syndicate (the Sellers' Shares) upon the terms and conditions hereunder.
and these operative clauses –
1.SALE OF OWNERSHIP INTEREST
1.1The Sellers hereby agree to sell to the Buyer and the Buyer hereby agrees to purchase from the Sellers Shares.
…
2SALE PRICE AND PAYMENT
2.1Sale Price
The Sellers agree to sell and the Buyer agrees to buy the Sellers Shares as follows:
(a)On or before 30 June 2007 ('the First Settlement Date) the Buyer shall purchase and pay for 3.6 of the Sellers' Shares in the sum of $55,000 plus GST per share or proportionately for a part thereof…
(b)On or before 31 August 2007 ('the Second Settlement Date') the Buyer shall purchase and pay for 6 of the Sellers' Shares in the sum of $55,000 plus GST per share of proportionately for a part thereof.
- By the Fleming agreement the then owners of the stallion agreed to sell, on a pro rata basis, "20 per cent [twelve (12) shares] of the legal and beneficial ownership of the Stallion". The ownership interests were particularised in a schedule to the agreement, as follows: -
Name of Original OwnerOwnership Interest
BeforeAfter
- Jason Edward Abrahams8%4.8 shares
- George Shalala2%1.2 shares
- Chris Rogers10%6 shares
- Andrew Lees5%3 shares
- Gurravembi Investments Pty Ltd5%3 shares
- CJN Bloodstock Pty Ltd10%6 shares
- Ross Keirnan10%6 shares
- Iskander Racing Pty Ltd50%30 shares
Total:100%60 shares
- The syndication deed contained a recital that "the Owners" held ownership interests in the stallion as detailed in schedules. Schedule 1 set out the ownership interests in percentage terms (the plaintiffs being shown as holding five per cent, five per cent and 10 per cent respectively), and schedule 2 (which was headed Written Tycoon (Aus) Stallion Syndicate List of Shareholders upon Allotment) containing a list of 60 shares by number and name. The plaintiffs were listed as holding five, five and 10 shares respectively. By clause 1 of the deed –
- Syndication
Each Owner hereby agrees to the Syndication of the Stallion on the terms and conditions of each of the attached Deeds.
- There were two syndicate deeds attached - "the Racing Syndicate Deed" and "the Stallion Syndicate Deed". An executed copy of the Stallion Syndicate Deed obtained from ASIC is dated 24 April 2007.[9] By clause 2 of that deed –
- OWNERSHIP
2.1As and from the date of this Deed:
(a)The Owners will own the whole of the legal and equitable title to the Stallion divided into sixty (60) equal undivided Shares as tenants in common, free of encumbrances;
(b)The Management Company will hold the Syndicate Property upon trust for the Owners in sixty (60) equal undivided Shares as tenants-in -common, free of encumbrances, but subject always to the provisions of this Deed.
- "Syndicate Property" was defined as income received by the Syndicate (including proceeds of sale, but not property in or title to the stallion or money paid for shares).
- The Stallion Syndicate was registered by ASIC as a managed investment scheme on 8 May 2007.[10] Mr Sheriff Iskander signed the Product Disclosure Statement as a director of the defendant and as duly authorised representative of the other co-owners (including the plaintiffs). Paragraph 8 was in these terms –
- ISSUE
The owners of the 2002 Chestnut Horse WRITTEN TYCOON [by IGLESIA from PARTY MISS (by KENMARE) ("the Stallion") and the sellers of Shares the subject of this PDS are JASON EDWARD ABRAHAMS, GEORGE SHALALA, CHRIS ROGERS, ANDREW LEES, GURRAVEMBI INVESTMENTS PTY LTD (ACN 063 220 333) (T/AS BUYS THOROUGHBREDS), CJN BLOODSTOCK PTY LTD (ACN 095 249 175), ROSS KEIRNAN AND ISKANDER RACING PTY LTD (ACN 091 950 579) c/o Suite 6, Ground Floor, 272 Pacific Highway, Crows Nest, New South Wales, 2065 ("the Offeror").
The plaintiffs call on the defendant to complete
- In June 2007 the plaintiffs' solicitors called on the defendant to submit transfer documentation and to complete the re-purchase of the first tranche of 3.6 shares. The defendant did neither.[11]
- This proceeding was commenced in the District Court in August 2007, and the defendant filed a defence.
- On 30 August 2007 the plaintiffs' solicitors called on the defendant to submit transfer documentation in relation to the second tranche of shares. The defendant did not do so, and the next day the plaintiffs' solicitors prepared such documentation and sent it the defendant's solicitors, requesting completion at 5.00 pm that day. The defendant did not complete.
- Subsequently the plaintiffs amended their statement of claim to embrace the second tranche of shares also.
The defendant's primary defence
- In its amended defence the defendant admitted that the stallion was "at some time" owned by a syndicate and went on –
…and to the extent the Plaintiffs assert it was a Syndicate in existence as at December 2006, being the alleged date of the Agreement, that claim is denied.[12]
- In their email to the Registry on 15 February 2008 the defendant's solicitors said:
- The Syndicate, which is part of the basis for the claim by the Plaintiff was not in existence at the time the documents styled 'Agreement for the sale of shares in the Thoroughbred Stallion 'Written Tycoon'' was signed. Ownership of the stallion shares by the Syndicate is therefore a fact in dispute and the ability to sell property that did not exist at the time of the alleged agreement, is also a fact and/or legal issue in dispute.
The plaintiffs' response
- The submissions of the plaintiffs' counsel can be summarised as follows:
(i)The plaintiffs held a 20 per cent interest in the stallion;
(ii)They disposed of 80 per cent of that interest by the re-purchase agreement;
(iii)They disposed of 20 per cent of that interest by the Fleming agreement;
(iv)The nature of their interest was unchanged from the time they entered into the re-purchase agreement until completion was due: it simply came to be measured by reference to numbers of shares rather than by reference to a percentage.[13] In other words, their interest was equivalent to 12 out of 60 shares, and they disposed of 80 per cent of 12 shares (i.e. 9.6 shares) by the re-purchase agreement, and 20 per cent of 12 shares (2.4 shares) by the Fleming agreement;
(v)The Stallion Syndicate Deed did not change the nature of the plaintiffs' interest in the horse, but created additional contractual rights in the syndicate property;
(vi)In signing the Fleming agreement and the syndication deed the defendant acknowledged the respective ownership interests of the plaintiffs in the horse, before and after syndication;
(vii)In signing the Product Disclosure Statement on behalf of the co-owners, the defendant warranted that the statements in it (including those identifying the plaintiffs and the defendant as co-owners) were true and correct and not misleading in their form and content;
(viii)The defendant is estopped by deed or by convention from denying the plaintiffs' interest [sic].[14]
Principles
- Where a plaintiff applies for summary judgment –
(2)If the court is satisfied that—
(a)the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and
(b)there is no need for a trial of the claim or the part of the claim;
the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.[15]
- The interpretation and application of the summary judgment rules has been considered in a number of cases.[16] In Deputy Commissioner of Taxation v Salcedo,[17] Williams JA summarised the effect of these authorities when he said –
Ultimately the rules are there to facilitate the fair and just resolution of the matters in dispute. Summary judgment will not be obtained as a matter of course and the judge determining such an application is essentially called upon to determine whether the respondent to the application has established some real prospect of succeeding at a trial; if that is established then the matter must go to trial.[18]
Application
- The arithmetical approach contended for by counsel for the plaintiffs is overly simplistic. The re-purchase agreement dealt with shares in a syndicate rather than with undivided shares as co-owners of the horse. It was premised upon the syndicate having been already formed. While the Stallion Syndicate was in contemplation, it did not come into existence until April of the following year, and it gave rise to various contractual rights and obligations between the parties. In those circumstances I am unpersuaded that the defendant has no real prospect of succeeding in its argument.
- It is unnecessary to consider the defendant's other arguments.
- The application for summary judgment should be dismissed. I will hear counsel on costs and on directions for the further conduct of the proceeding.
Footnotes
[1] Lees & Ors v Iskander Racing P/L, Supreme Court file number BS 9522/07, document no 6 (13 November 2007).
[2] Email from Hopgood Ganim Lawyers to MWA Lawyers dated 13 February 2008: see affidavit of Mark Beauchamp Peacock filed 18 February 2008 on Supreme Court file no 10796 of 2007, exh “MBP02”, pp 16–17.
[3] Email from MWA Lawyers to Supreme Court of Queensland dated 15 February 2008: see affidavit of Mark Beauchamp Peacock filed 18 February 2008 on Supreme Court file no 10796 of 2007, exh “MBP02”, pp 18–19.
[4] Amended statement of claim filed 5 September 2007 on Supreme Court file number 10796 of 2007, para 3.
[5] Affidavit of Mark Beauchamp Peacock filed 24 October 2007 on Supreme Court file number 9522 of 2007, para 2(a) and (b); exh “MBP01”, p 1.
[6] Affidavit of Mark Beauchamp Peacock filed 24 October 2007 on Supreme Court file number 9522 of 2007, exh “MBP01”, pp 2-24.
[7] Affidavit of Mark Beauchamp Peacock filed 24 October 2007 on Supreme Court file number 9522 of 2007, exh “MBP01”, pp 15-26.
[8] Affidavit of Mark Beauchamp Peacock filed 24 October 2007 on Supreme Court file number 9522 of 2007, exh “MBP01”, pp 27-99.
[9] Affidavit of Mark Beauchamp Peacock filed 24 October 2007 on Supreme Court file number 9522 of 2007, para 3; exh “MBP01”, pp 152–176.
[10] Letter from ASIC to Sire Custodians Limited dated 8 May 2007: see Affidavit of Mark Beauchamp Peacock filed 24 October 2007 on Supreme Court file number 9522 of 2007, exh “MBP01”, p 117.
[11] Email letters from Hopgood Ganim Lawyers to MWA Lawyers dated 12 June 2007, 25 June 2007 and 27 June 2007: see Affidavit of Mark Beauchamp Peacock filed 24 October 2007 on Supreme Court file number 9522 of 2007, exh “MBP01”, pp 186-203.
[12] Amended defence filed 20 November 2007 on Supreme Court file no 9522 of 2007, para 3(b).
[13] Transcript of hearing: Lees & Anors v Iskander Racing P/L (19 February 2008), p 9.
[14] Plaintiffs' written submissions dated 19 February 2008 on Supreme Court file number 10796 of 2007, para 5(i).
[15] Uniform Civil Procedure Rules 1999 (Qld), r 292(2).
[16] Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259; Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469; Gray v Morris [2004] 2 Qd R 118; Foodco Management Pty Ltd v Go My Travel Pty Ltd [2002] 2 Qd R 249; Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232.
[17] [2005] 2 Qd R 232.
[18] Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232, [17].