Smits v Brown[2012] QSC 180

SUPREME COURT OF QUEENSLAND 

ANN LYONS J:

This application

1. Pursuant to an application filed on 24 February 2012 the defendant, Warren Thomas Brown (Brown), seeks an order for summary judgment pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) against the plaintiff Leonardus Gerardus Smits (Smits) in respect of the proceedings filed by Smits on 9 September 2009. 

The 2009 Claim by Smits

2. The basis of the claim by Smits, outlined in the Statement of Claim as amended on 1 December 2011, is as follows:

1. From 5 August 1995 until 11 June 2004 Donald Gordon Ogle (Ogle), was the registered proprietor of the land at Mount O'Reilly.

2. Brown entered into a partnership with Ogle, pursuant to a written agreement (1995 Agreement), on 5 August 1995 to develop and resell the land at Mount O'Reilly.  

3. Brown was to guarantee lenders to the partnership who advanced monies to develop the land.

4. On 10 September 1998 Ogle and Brown entered into a second agreement (1998 Agreement)

5. The 1998 Agreement, which ended the partnership, was conditional upon the land being sold for more than $5 million and expressly or by implication provided for the termination of the partnership upon satisfaction of that condition.

6. On 22 October 1999 Brown lodged a caveat over the land, claiming an equitable interest in the land.

7. From November 1999 until June 2004 Brown claimed, in Supreme Court proceeding BS No. 10384 of 1999, that he held beneficial ownership in the land pursuant to the partnership.

8. From 22 November 1999 Ogle incurred liabilities to Setglade Pty Ltd (Setglade) and Baseline Consulting Pty Ltd (Baseline) and in 2001 borrowed $3.5 from Elliott and Harvey Mortgage Securities Limited (Elliott & Harvey) secured over the property.

9. On 7 February 2002 Setglade registered a mortgage over the land.

10. At no time did Baseline, Setglade or Elliott & Harvey have notice of the 1998 Agreement or any restriction on Ogle’s power to bind the partnership pursuant to s 11 of the Partnership Act 1891 (Qld).

11. Brown is liable jointly with Ogle for the debts of the partnership.

12. The land sold in June 2004 at which time the partnership ended.

13. The sums owing as at June 2004 comprised $940,000 to Baseline, $570,000 to Setglade and $1,116,999.84 to Elliott and Harvey.

14. Brown is liable for those debts as they are partnership debts in relation to the land at MountO'Reilly.

3. Smits is the assignee of debts incurred by Ogle to Elliott & Harvey, Setglade and Baseline. He purchased the mortgage debts from Tendiris Pty Ltd in 2007 for $10 and Tendiris had purchased the debt from Elliott & Harvey for the same amount. 

4. Smits sues for recovery of debts incurred by the partnership between Brown and Ogle.

The application for summary judgment

5. An order for summary judgment is pursued by the defendant Brown because it is argued that whilst Ogle and Brown were in partnership pursuant to the 1995 Agreement, that partnership ceased on 10 September 1998 when the partnership was terminated by the 1998 Agreement.

6. It is also argued that the 1998 Agreement is, prima facie, a complete bar to any assertion that a partnership existed after 10 September 1998. Pursuant to that Agreement, it is submitted that Brown was released from any continuing obligations under the 1995 Agreement. It is argued that Mullins J made this finding in the Brown v Ogle^[1] proceedings in 2006.

7. Furthermore, it is argued that there are no other circumstances which support a finding that a partnership existed after 10 September 1998 and that the debts incurred by Ogle, in his name and for his own purposes, were incurred after the 1995 Agreement was terminated by the 1998 Agreement.

8. Essentially, counsel for Brown argued that Brown entered into a second agreement with Ogle on 10 September 1998 and that this agreement had two effects: first, it dissolved their partnership; and secondly, it immediately abrogated all of Brown’s rights and obligations with respect to the creditors of the partnership. The findings of Mullins J are also relied upon to support that assertion.

9. It is further argued that the current proceedings by Smits are the same as those issued by him in July 2008 and dismissed by Chesterman J (as he then was) on 6 August 2008. Counsel for the defendant accordingly submits that the dismissal of the action by Smits against Brown by Chesterman J now bars the present claim by Smits for the same debt. That is argued on alternative bases: first, that the entry of judgment extinguishes the right to maintain proceedings based on the same cause of action;^[2] and secondly, to the extent to which the claim is founded upon some other basis the action is barred by an Anshun estoppel.^[3]

10. In order to determine Brown’s application for summary judgment, it is necessary to understand the 1995 Agreement, the subsequent 1998 Agreement and the decisions of Mullins J on 12 April 2006 and Chesterman J on 6 August 2008.

The 1995 Agreement

11. The 1995 Agreement was signed on 5 August 1995 by Ogle and Brown and is in the following terms:

“D.G. Ogle and W.T. Brown have agreed to form a partnership to develop land being Lot 1 on registered plan No. 152762 containing 440.760 hectares exclusive of road reserve.

D.G. Ogle is the registered proprietor of the land described above.

W.R. Carpenter Australia Pty. Ltd. is currently mortgagee in possession of the land.

There is evidence that WR Carpenter may be wrongly in possession of the land.

D.G. Ogle agrees to transfer the land to the partnership for the sum of one million dollars ($1,000,000.00), free and unencumbered. The price of transfer will be reduced by the total of all expenditure by the partnership required to obtain free and unencumbered title and all monies advanced to D.G. Ogle for what ever purpose. D.G. Ogle further agrees to allow the partnership to mortgage the land, by way of first mortgage, to obtain finance to develop the property and to subdivide it. This finance will include payments for survey, engineering construction, marketing, Local Authority fees and charges, legal costs, finance charges, etc. Payment of the principal amount will be from profit from sale of land after subdivision and after repayment of all monies advanced to obtain free and unencumbered title.

W.T. Brown agrees to provide funds to the partnership to mount a legal challenge to the current status of the mortgage in possession and to obtain free and unencumbered title to the property. W.T. Brown further agrees to guarantee lenders to the partnership who advance monies for the development of the property.

W.T. Brown may at his sole discretion withdraw from this agreement at any time and if so all obligations between the parties shall cease.”^[4]

The 2005 litigation between Brown and Ogle before Mullins J in BS No. 10384 of 1999.

12. The terms of the 1995 and 1998 Agreements, as well as the circumstances surrounding the signing of that 1998 Agreement were the subject of extensive evidence and submissions in the four day trial before Mullins J in late 2005. Judgment was delivered on 12 April 2006.

13. It was clear that under the 1995 Agreement, Brown was entitled to withdraw from the partnership with Ogle at his discretion at any time and, if he did so, all obligations between the parties would cease. Mullins J found, however, that the 1995 Agreement was still on foot and that at no stage prior to entering into the 1998 Agreement had Brown conveyed to Ogle that he was withdrawing from the agreement or refusing to perform his obligations under that agreement. Mullins J also found that Brown had performed his obligations pursuant to that 1995 Agreement by providing funds to finance a legal challenge against WR Carpenter.

14. The factual scenario which led to the 1998 Agreement on 10 September 1998 was outlined by Mullins J as follows:

“[52] Because the defendant (Ogle) knew on 8 September 1998 that he had settled his dispute with Carpenter, but the plaintiff (Brown) did not, the defendant prepared the draft of the second agreement on terms which he was prepared to accept in order to terminate the partnership, but which obviously would have some attraction to the plaintiff. That explains why the defendant asked the plaintiff if he would be prepared ‘to get out of Mt O'Reilly with a clear $2,000,000’. Any such sum of money could not be paid by the defendant unless he sold the Mt O'Reilly property or found another party prepared to lend him funds or finance the development of the Mt O'Reilly property.”

15. In relation to the question whether there was consideration for the 1998 Agreement, Mullins J held:

“[86] Immediately prior to the signing of the second agreement by the parties, the first agreement remained in existence under which the plaintiff had performed his obligations and was entitled to the benefits that flowed from the partnership that was created as a result of the first agreement. There was no doubt that the relationship between the parties had deteriorated by that time and the plaintiff was disillusioned about the defendant’s ability to perform his obligations, but the first agreement remained of value to the plaintiff. Although he had expended about $162,000 on legal fees and anticipated that about $700,000 would need to be paid to Carpenter, the plaintiff was aware that finance could be obtained to the extent of $900,000 in order to pay out Carpenter and that the valuation of the Mt O'Reilly property as at September 1997 was $2,300,000. As one of the consequences of the second agreement was that it brought the first agreement to an end, the giving up by the plaintiff of his rights under the first agreement was good consideration moving from the plaintiff to the defendant to support the promises of the defendant under the second agreement.”

The 1998 Agreement

16. It is necessary therefore to examine the terms of the 1998 Agreement which was signed by Brown and Ogle on 10 September 1998. That agreement provided as follows:

“This agreement relates to the property at Mt O'Reilly (Area 1089 acres).

This agreement cancels all other agreements made between Ogle and Brown concerning the Mt O'Reilly property, and this agreement is enforceable from this date.

Ogle agrees to pay Brown the sum of 2 Million Australian dollars (A$2,000,000.00) in full settlement of any claims Brown may have against the Mt O'Reilly property.

Terms of Settlement

The settlement is subject to Ogle selling the property with the normal Pine Rivers Shire Council subdivisional approval for not less than 5 Million Australia dollars (A$5,000,000.00) PLUS LEGAL COSTS ALREADY PAID UP TO $160,000.”^[5]

17. After entering this agreement Ogle financed and re-financed the property on a number of occasions.

18. Counsel for Brown submits that Brown had no involvement whatsoever in any dealings with the land after September 1998. In 1999 Brown commenced litigation against Ogle to compel Ogle to perform the terms of the 1998 agreement.

19. In relation to the 1998 Agreement, Mullins J made extensive findings including the following;

“[99]It was clear to both parties at the time of entering into the second agreement that the attraction of the second agreement for the plaintiff was that it gave him the opportunity for recovering the moneys that he had already spent on legal fees of about $160,000 plus a share of the profit from the sale of the Mt O'Reilly property fixed at $2,000,000, provided the agreed minimum sale price of $5,000,000 was achieved by the defendant and, further, that the second agreement enabled the plaintiff to withdraw from the continuing obligations under the first agreement, such as providing a guarantee in respect of any borrowings by the partnership to pay out Carpenter and develop the Mt O'Reilly property.”

20. In addition, the following specific findings were made in relation to Brown’s obligations under the 1995 Agreement:

“[115] I find that by 9 September 1998 the plaintiff wanted to withdraw from the partnership, but preferably in such a way that gave the plaintiff the possibility of recovering from the defendant the amount paid on account of legal costs and some proportion of the profit that the parties anticipated would eventually be made from the Mt O'Reilly property. I find that the plaintiff was keen to avoid the continuing obligations arising from the partnership, and particularly the requirement to provide a guarantee in relation to future borrowings which would need to be undertaken by the partnership to develop the Mt O'Reilly property. I therefore find that the plaintiff was keen to accept the defendant’s offer that was embodied in the draft of the second agreement that was foreshadowed by the defendant on 9 September 1998 and presented to the plaintiff on 10 September 1998.”

21. Mullins J therefore found that in that action the plaintiff had established his claim for debt, based on satisfaction of the condition of settlement under the second agreement. It was, however, held that the plaintiff did not adduce any evidence to show that a sale of the Mt O'Reilly property for $5,000,000 would have been completed earlier than 11 June 2004 when it was sold to Tendiris Pty Ltd for that amount.

22. Council for Brown submits that the 1998 Agreement had the effect of dissolving Brown and Ogle’s partnership. Mr Brown surrendered his right for a formal winding up of the partnership in return for an entitlement to be paid a debt albeit that the payment of the debt was funded upon a contingency. There was therefore, it is argued, no existing partnership as alleged in the current Statement of Claim. Accordingly it is argued that the findings in the 2006 litigation support the application for summary judgment.

23. It is also argued that part of the current claim by Smits is essentially res judicata given Smits has already had judgment entered against him in respect of part of the current claim.

The 2008 determination by Chesterman J in relation to Elliott & Harvey Claim

24. Smits subsequently became the assignee of debts incurred by Ogle and on 21 July 2008 he instituted proceeding to recover from Brown amounts owing pursuant to a mortgage Ogle had entered into in 2001 when he borrowed $3.5 from Elliott and Harvey Mortgage Securities Limited (Elliott & Harvey) which was secured over the property.

25. A perusal of those proceedings (BS No. 6879 of 2008) indicates that, pursuant to an originating application filed on 21 July 2008, Smits applied for:

1. a declaration that Brown was liable to pay all debts due and owing in respect of Mortgage 705310542 formerly registered as a partner of Ogle in respect of the Mt O'Reilly Property;

2. a declaration that as at 6 September 2007 Smits certified such indebtedness to an amount of $1,116,999.84; and

3. an order that Brown pay such indebtedness together with interest at the contractual rate of 19% per annum compounding monthly in arrears from 6 September 2007.

26. Following extensive argument, Chesterman J delivered an ex tempore decision dismissing Smits’ application and awarding costs on an indemnity basis as follows:

“The land in question was owned by Mr Ogle; he was the registered proprietor of it and he did not convey it to the partnership or to himself and Mr Brown. The consequence, it seems to me, is that the land became held in trust by Mr Ogle for the purposes of the partnership.

The application is brought on the basis that the agreement of 1998 effected the winding-up of the partnership and the appointment of Mr Ogle to attend the winding-up of the partnership in which process he would have authority to bind his former partner, Brown, with respect to debts incurred in the execution of the winding-up and it is said, rather than proved, that the mortgage debt incurred by Ogle to Elliott and Harvey Mortgage Services Pty Ltd was a debt incurred in the winding-up. That, it seems to me, is simply not proved on the material. It may or may not be the case, but it is a matter of fundamental importance to the application and there is no, I think, evidence at all, no satisfactory evidence, that the debt is of the character it must have if the applicant is to succeed.

The parties are in contest as to the effect of the agreement of September 1998. Mr Derrington of Senior Counsel, who appears with Mr de Jersey for the respondent, contends that its effect was to bring the partnership to an end immediately and to abrogate all Brown's rights and obligations with respect to the partnership except the right, the contingent right, to be paid $2 million.

I think it is established by the evidence that there were no partnership debts as at September 1998 so that the rights of the partners only had to be adjusted between themselves.

Mr Cooper SC submits that the agreement has the effect I mentioned, that it was for the winding-up of the partnership with legal consequences described. He relies upon a letter written by the respondent's solicitors on 17 November 1999 which would lend some support to that contention.

It is, it seems to me, not necessary to resolve that question of fact, which can't be resolved anyway in an application like this because of the absence of proof that the debt incurred was a partnership debt. I was referred to section 41 of the Partnership Act which provides that, "After the dissolution of a partnership the authority of each partner to bind the firm and the other rights and obligations of the partners continue notwithstanding the dissolution so far as may be necessary to wind up the affairs of the partnership and to complete transactions begun but unfinished at the time of the dissolution but not otherwise."

To make good its case the applicant, it seems to me, had to prove that the mortgage of the land by Mr Ogle was necessary to wind up the affairs of the partnership or to complete a transaction begun but unfinished at the time of the dissolution, and the evidence does not establish those facts.

There are, I think, some other difficulties in the applicant's path. The first is that the mortgage was executed by Ogle some time after the dissolution of the partnership in September 1998. Brown was not a party to the mortgage. He is not sued, it is said, on the personal covenants in the mortgage for obvious reasons. It is said though that the mortgage debt is a partnership debt for which he is liable. I have mentioned that already.

The mortgage was assigned, so it's said, from Elliott and Harvey Mortgage Services to a company called Tendiris Pty ltd, a company wholly owned and controlled by the applicant Mr Smits. And Mr Smits asserts that he took an assignment of the mortgage in turn from Tendiris Pty Ltd but no notice of the assignment, either from Elliott and Harvey to Tendiris, or from Tendiris to Mr Smits, was given to the alleged debtor, the respondent Brown, as required by section 199 of the Property Law Act.

Rather late notice was given of the assignment to Ogle but no notice was purported to have been given or was given to Brown, and that seems to me to make the assignment under which the applicant sues defective.

There is a third point which is that the debt for which the applicant seeks judgment is an amount certified by the applicant’s solicitor pursuant no doubt to the terms of the mortgage. But the respondent was not a party to the mortgage. Parties may contract of course that in certain circumstances one may be liable for an amount certified by the other.

But in the absence of such a contract a party claiming a debt against another must prove the amount of it and the applicant has not done that. It relies instead upon the certification provisions of the mortgage which as I say do not bind the respondent. So for those reasons I dismiss the application”

27. It was argued that because of that dismissal of the cause of action by his Honour and that because of the doctrine of res judicata, the operation of issue estoppel or an Anshun estoppel, Smits is precluded from pursuing his action against Brown in relation to the Elliott & Harvey debt.

28. Does the doctrine of res judicata operate or does an estoppel operate as argued by counsel for Brown? I note in this regard that it must first be established that the question was in fact finally determined. In Blair v Curran,^[6] Dixon J held:

“A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put to suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.”^[7]

29. Has the right of action by Smits against Brown in the 2008 proceedings passed into judgment or does an issue estoppel operate? It is clear that the doctrine of res judicata operates only in relation to a cause of action which has merged into a judgment and that any issue estoppel created by the dismissal of the action by Chesterman J is limited to the actual ground upon which the action was dismissed and the essential factual findings which supported that dismissal.

30. Having considered both the originating application (in BS No. 6879 of 2008) and the reasons of Chesterman J, it is clear that his Honour considered that there was a contest between the parties before him as to the effects of the 1998 Agreement. His Honour noted the argument by counsel for Brown that the effect of 1998 Agreement was to bring the partnership to an end immediately. His Honour also noted the argument by counsel for Smits that the 1998 Agreement effected the winding up of the partnership but that Ogle was appointed to attend to the winding up of the partnership in which process he would have authority to bind his former partner Brown with respect to debts incurred in the execution of the winding up.

31. The argument that the Elliott & Harvey mortgage debt was a debt incurred in the winding up was noted by his Honour, who considered that such an assertion was not proved on the evidence before him. His Honour specifically declined, however, to resolve the question as to the legal effect of the 1998 Agreement indicating that it was not necessary to resolve that question of fact “which can’t be resolved anyway in an application like this because of the absence of proof that the debt incurred was a partnership debt.”

32. His Honour also noted that to make good his case Smits had to prove that the mortgage by Ogle was necessary to wind up the affairs of the partnership or to complete a transaction which had been commenced but not completed at the time the partnership was dissolved. The difficulties which confronted Smits in that regard were also noted, especially the facts that the mortgage was executed by Ogle some time after September 1998 and that Brown was not actually a party to the mortgage.

33. His Honour also noted that when the debt was assigned to Tendiris and then to Smits, if Brown was an alleged debtor he was not given notice of the assignment as required by s 199 of the Property Law Act 1974 (Qld). Ultimately, His Honour considered that the failure to give notice of the assignment to Brown made the assignment under which Smits sued defective. The defects in relation to the amounts certified by Smits’ solicitor pursuant to the mortgage were also noted.

34. I consider that Smits’ claim in respect of the amount of $1,116,999.84 assigned to Tendiris and then to him, has been fully determined by Chesterman J. His Honour was satisfied that Smits had not proved that such a debt was a debt that could be considered a partnership debt, even if Ogle had the authority to bind his former partner Brown with respect to debts incurred in the execution of the winding up.

35. I consider therefore that Smits is barred from pursuing the claim against Brown with respect to that debt by reason of the prior judgment of Chesterman J. The facts as alleged in the affidavit of Joel Hunter Pitman sworn 18 July 2008 in support of that application are also in substantially the same terms as those now argued in relation to that aspect of the claim by Smits in the present proceedings.

36. The entry of judgment therefore extinguishes the right to maintain proceedings based on the same cause of action. I am satisfied that the claim in relation to the Elliott & Harvey debt cannot be sustained by Smits. In my view an issue estoppel would also operate in relation to some aspects of the claim which has already been litigated before Chesterman J. That is the claim in respect of the amount assigned by Elliott & Harvey. It is clear from his Honour’s reasons that the debt was not shown to be a partnership debt for which Mr Brown was found to be liable.

37. The new claim, however, also incorporates the debts assigned to Smits by Setglade and Baseline. No findings were made by Chesterman J in relation to those debts and whether those debts could be considered a partnership debt or if Ogle had the authority to bind his former partner Brown with respect to debts incurred in the execution of the winding up. In this regard I also note that no final determination was made by Chesterman J about the effect of the 1998 Agreement.

38. Despite the fact that those issues were not finally determined by Chesterman J, should there nonetheless be summary judgment for the defendant Brown in relation to the remaining aspects of the claim? Essentially it is argued that a trial is not required as Smits claim has no chance of success.

Should there be summary judgment for the defendant Brown?

39. Rule 293 of the UCPR states that:

“293 Summary judgment for defendant

(1)A defendant may, at any time after filing a notice of intention to defend, apply to the court under this part for judgment against a plaintiff.

(2) If the court is satisfied—

(a) the plaintiff has no real prospect of succeeding on 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 defendant against the plaintiff for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”

40. Counsel for Brown submitted that the plaintiff’s claim has no real prospect of succeeding and that there is no need for a trial for the following reasons:

1. The claim in relation to Elliott & Harvey is res judicata;

2. There is no reason that a further trial would result in a conclusion other than that the terms of the 1998 Agreement are clear in that the partnership came to an end on its execution;

3. Mullins J, in her 2006 decision, found that the partnership between Ogle and Brown ended in 1998, some years before the debt was incurred;

4. The material produced and the uncontested evidence of Brown is that the partnership ended in 1998.

41. I have already indicated that I consider that the claim in relation to the Elliott & Harvey Claim is in fact res judicata.

Is there a triable issue in relation to the 1998 Agreement?

42. Smits was not a party to the partnership nor was he a party to the 1995 Agreement or the 1998 Agreement or their negotiations and, as such, it would be difficult to adduce evidence which would advance his case that the partnership continued after 10 September 1998 or that Brown continued to be responsible for the debts of the partnership after that date.

43. Counsel for Brown submits that Smits is simply unable to adduce or refer to any evidence which would contradict any of these reasons because Smits was not a member of the partnership and was not a party to the transaction by which the debt was incurred. As such, it is argued that there are no prospects of there being findings of fact at a new trial inconsistent with those previously made by Mullins J.

44. There is no doubt that the authorities urge a cautious approach and matters should only be determined summarily in the clearest of cases where all the facts are known or are established beyond controversy. As noted by Margaret McMurdo P in Deputy Commissioner of Taxation v Salcedo:

Nothing in the UCPR, however, detracts from the well established general principle that issues raised in proceedings will be determined summarily only in the clearest of cases. Gaudron, McHugh, Gummow and Hayne JJ said in Agar v Hyde, recently cited with approval by Gleeson CJ, McHugh and Gummow JJ in Rich v CGU Insurance Ltd:

"… Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way."^[8]

45. There is no doubt that the Court should not proceed to summary judgment where the facts are disputed and in those cases there should be a trial to determine those facts.^[9] 

46. In the present case however it would seem to me that there are insurmountable difficulties in the path of Smits in contending that the 1998 Agreement had the effect as contended by him. Necessarily there would have to be findings in the new action which would be contrary to the findings of Mullins J in her Honour’s 2006 decision. There was a clear finding that the partnership was terminated in September 1998 and further findings that the 1998 Agreement brought the 1995 Agreement to an end and, accordingly, that allowed Brown to “withdraw from the continuing obligations under the first agreement”.^[10]

47. In his decision, with respect to the Elliott & Harvey Claim, Chesterman J pointed out the difficulties which confronted Smits in that particular case. The same issues arise with respect to the outstanding claims in relation to the Setglade and Baseline debts. There is no evidence before me which indicates that the debts incurred were incurred in the name of the partnership. Chesterman J specifically referred to those difficulties.

48. Those evidentiary difficulties have not been overcome in this case either. In particular, it would seem clear that there is no evidence before me that Brown had any involvement with the persons who claim to be the debtors of Mr Ogle. Neither is there any evidence that Brown had any involvement in the work that was done to incur those debts.

49. Furthermore, the evidence is that Mr Ogle entered into the debts with Elliott & Harvey, Setglade and Baseline between 2000 and 2004, which is well after September 1998.

50. The ‘Mt O'Reilly Heads of Agreement’ document signed by Ogle, Mervyn Cotterell and John Koek (directors of Setglade and Baseline) on 24 March 2000 is exhibited to the affidavit of Billy Fitzgerald sworn 23 February 2012 and that document clearly states that the agreement is signed “In return for the financial and moral support provided to Don Ogle at a critical time when Don Ogle was in need of immediate assistance, it is hereby agreed....”. It would seem to be quite apparent that the money was provided to Ogle personally.

51. The evidence Ogle gave before Mullins J on 1 August 2008 was that there was no partnership to develop the Mt O'Reilly land. The uncontested evidence, as Chesterman J found, was that the land was owned by Ogle and that he did not convey it to the partnership or to himself and Mr Brown.

52. Counsel for Smits argues that in the trial before Mullins J, Brown and Ogle gave different and distinct versions of the conversations and events that preceded the signing of the 1998 agreement. It would also seem that a witness, Mr Thomas, was not called. Counsel for Smits submits that by cross-examining Brown and by adducing evidence from Ogle and Thomas, the factual matrix will be seen differently by the Court and factual matters, including Brown’s lodgement of a caveat over the property and his conduct of proceedings against Ogle, will be agitated.

53. I note however that Mullins J clearly indicated that she found that Ogle’s additions to his diary entries for the relevant period “reflected adversely” on his credit. I also note the following comments by Mullins J in relation to the evidence in general:

“[15]Although I have fewer reservations about the general reliability of the plaintiff’s evidence than I do for the defendant’s reliability, there were a few gaps in the plaintiff’s evidence that I have identified where it is relevant to the findings I make. This is not surprising as the oral evidence at this trial (which was given primarily by the plaintiff and the defendant) was given over 2½ days, but traversed events and conversations that took place over many years. The parties focussed mainly on the events and conversations that were raised directly by the pleadings which may explain to some extent why the evidence that was adduced does not always appear to be complete.”

54. I also note that almost seven years have elapsed since that evidence was given and that some of the events transpired seventeen years ago. Furthermore, Mullins J noted that, although evidence from the witness Thomas was opened by counsel for Ogle, he was not ultimately called to give evidence and that counsel for Brown sought to rely on a Jones v Dunkel inference. Ultimately, Mullins J held it was not necessary to rely on such an inference as her Honour held that she found Ogle’s evidence to be “unconvincing and implausible”.^[11]

55. In my view, given all of the above, there are insurmountable evidentiary issues and I consider that Smits has no real prospects of succeeding and that there is in fact no need for a trial.

56. The plaintiff’s claim should be dismissed. There should be judgment for the defendant against the plaintiff. I will hear from counsel as to the form of the order and as to costs.