McVicker International Pty Ltd v James
[2022] QSC 269
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- McVicker International Pty Ltd v James[2022] QSC 269
- Add to List
McVicker International Pty Ltd v James[2022] QSC 269
McVicker International Pty Ltd v James[2022] QSC 269
SUPREME COURT OF QUEENSLAND
CITATION: | McVicker International Pty Ltd & Anor v James [2022] QSC 269 |
PARTIES: | McVICKER INTERNATIONAL PTY LTD ACN 629 557 286 (first plaintiff) v ROBERT BRUCE McVICKER (second plaintiff) RACHEL CATHERINE JAMES (defendant) |
FILE NO/S: | BS 12379/19 |
DIVISION: | Trial Division |
PROCEEDING: | Interlocutory Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 2 December 2022 |
DELIVERED AT: | Brisbane (ex tempore) |
HEARING DATE: | 2 December 2022 |
JUDGE: | Kelly J |
ORDER: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where the second plaintiff claims that the defendant breached a warranty deed by making representations which amounted to misleading and deceptive conduct – where the second plaintiff claims that he suffered loss and damage being a potential liability to the first plaintiff under s 588M of the Corporations Act 2001 (Cth) – where the first plaintiff has been deregistered – where the defendant applied for summary judgment against the second plaintiff’s claim – whether summary judgment should be granted Corporations Act 2001 (Cth), s 588M Uniform Civil Procedure Rules 1999 (Qld), r 155, r 293 Bradshaw v Secure Funding Pty Ltd [2011] QSC 184, cited Chen v ANZ Banking Group Ltd [2001] QSC 43, cited Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232, cited James Point Pty Ltd v Minister for Transport [2015] WASC 323, cited Lewis v Australian Capital Territory (2020) 271 CLR 192; [2020] HCA 26, cited |
COUNSEL: | MD Martin KC for the second plaintiff SC Russell for the defendant |
SOLICITORS: | Mills Oakley for the second plaintiff Rose Litigation Lawyers for the defendant |
- [1]This is an application by the defendant (“Ms James”) for summary judgment against the second plaintiff (“Mr McVicker”). The proceeding was commenced on 8 November 2019. The first plaintiff (“McVicker International”) is a company of which Mr McVicker is the sole director.
- [2]By way of broad overview of the allegations made by the Amended Statement of Claim, the following can be said:
- (a)the defendant (“Ms James”) owned 150,120 shares in Best Jet Travel Pty Ltd (“the Company”);
- (b)by a written Share Sale Agreement dated 2 November 2018 (“the Sale Agreement”), Ms James agreed to sell to McVicker International 75,060 shares in the company for $1,500,000.00;
- (c)completion was to and did occur on 9 November 2018 and the purchase price was payable on 31 October 2020;
- (d)on completion, Mr McVicker became a director of the company. On that date, Mr McVicker and Ms James entered into a written Deed of Warranty (“the Warranty Deed”). The Warranty Deed contained a warranty, relevantly that any information provided to Mr McVicker by Ms James had been prepared in good faith after reasonable inquiries for the purpose of informing Mr McVicker about the company, its business, assets and liabilities;
- (e)it is alleged that certain representations had been made by or on behalf of Ms James to Mr McVicker which were in breach of the Warranty Deed and misleading and deceptive within the meaning of s 18 of the Australian Consumer Law;
- (f)it is further alleged that by reason of the breach of the Warranty Deed and misleading and deceptive conduct, Mr McVicker became a director of the company. It is alleged that in reliance upon the representations, McVicker International completed the Sale Agreement;
- (g)on 31 January 2019 the company was wound up;
- (h)McVicker International has not paid the purchase price for the shares. It claims damages against Ms James for the amount of the purchase price ($1.5 million). It further claims that, apart from the representations, Ms James breached implied terms of the Sale Agreement; and
- (i)Mr McVicker claims that as a result of the breach of the Warranty Deed and misleading and deceptive conduct he has suffered loss and damage namely his potential liability pursuant to s 588M of the Corporations Act 2001 (Cth). That section essentially provides for the prospect of an amount being recovered from a director of a company equal to an amount of a debt owed by the company to a creditor when a creditor has suffered loss or damage in relation to that debt because of the company’s insolvency.
- (a)
- [3]The summary judgment application is pursued on the ground that there is no real prospect of success on the claim for damages made by Mr McVicker. Ms James has submitted through her counsel that even if the claimed loss and damage is a type of contingent loss which is capable of giving rise to a cause of action, it is now “practically certain” that the contingency will not come to pass.
- [4]In support of that submission Ms James points to these matters:
- (a)the company having been deregistered on 1 September 2022 and, as a result, is no longer able to be described as “being wound up” within the meaning of s 588M(1)(d) of the Corporations Act 2001 (Cth); and
- (b)whilst it is theoretically possible that the liquidator or some other creditor may apply to reinstate the company pursuant to s 601AH of the Corporations Act 2001 (Cth) to permit proceedings to be brought pursuant to s 588M, that prospect is fanciful because:
- the liquidators have stated in a recent letter that the winding up is, as far as they are concerned, “finalised”;
- the liquidators have not provided consent to any creditor to bring a proceeding against Mr McVicker;
- the liquidators have not received any written notice from any creditor under s 588S of the Corporations Act 2001 (Cth);
- there is no evidence that any creditor is interested in pursuing a debt or claim against Mr McVicker; and
- even if such a creditor existed there would be procedural hurdles of a significant nature in its path.
- (a)
- [5]Mr SC Russell of counsel who appeared for Ms James emphasized that the only damages realistically in prospect are nominal damages. He submitted that to allow a claim to proceed to enable the pursuit of only nominal damages would be an abuse of process citing James Point Pty Ltd v Minister for Transport [2015] WASC 323 at [66]. Reliance was also placed upon Bradshaw v Secure Funding Pty Ltd [2011] QSC 184 at [34] – [35]. Ms James’ counsel also submitted that although Mr McVicker pleaded a cause of action in relation to misleading and deceptive conduct in breach of s 18 of the Australian Consumer Law, damage was an element of that cause of action. He submitted that there was no reason to refuse summary judgment in relation to “that claim”.
- [6]Mr Martin KC who appeared for Mr McVicker submitted that the application should be dismissed and emphasized that:
- (a)there were clearly issues to be tried in respect of any breach of the Warranty Deed;
- (b)the limitation period for a claim under s 588M would not expire until 17 December 2024;
- (c)even if no claim is made, Mr McVicker upon establishing a breach of the Warranty Deed would be entitled to nominal damages; and
- (d)an award of nominal damages, if made, would represent a vindication of the infringement of his rights under the Warranty Deed, citing Lewis v Australian Capital Territory (2020) 271 CLR 192 at 205 [21] and 213 [47].
- (a)
- [7]The principles that apply to summary judgment were not in dispute. Rule 293(2) UCPR requires the Court to be satisfied that “the plaintiff has no real prospect of succeeding on all or a part of the plaintiff’s claim” and “there is no need for a trial of the claim or a part of the claim”. If satisfied of both those elements, the Court “may” give judgment for the defendant against the plaintiff for all or part of the plaintiff’s claim and may make any other order the Court considers appropriate. It is accepted that r 293 should be applied consistently with the purpose of the UCPR as enshrined by r 5. Ms James emphasized that the appropriate inquiry was whether there existed a real, as opposed to fanciful, prospect of success. It was accepted that this type of relief is reserved to the clearest of cases where there is a high degree of certainty about the outcome of the litigation.
- [8]It should not be lost sight of that the overriding objective on the hearing or determination of any summary judgment application is to ensure that the proceeding is dealt with justly: Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at 235 [13]. Consistently with that overriding consideration, it has been recognised that the jurisdiction to grant summary judgment should not be exercised where a plaintiff can improve its position by proper amendment to the pleading: Chen v ANZ Banking Group Ltd [2001] QSC 43 at [1].
- [9]In commencing the proceeding against Ms James, Mr McVicker appears to me to have had a primary purpose of attempting to protect himself in the event he was sued for insolvent trading by preserving a right of recourse against Ms James. Mr SC Russell frankly and properly conceded that, were summary judgment to be entered in his client’s favour and a claim against Mr McVicker subsequently materialised, Mr McVicker would be barred from pursuing any rights against Ms James in respect of that claim.
- [10]Mr McVicker’s pleaded claim for damages does not, in my respectful view, appear to be compliant with the requirements of rr 155(1) or (2) of the UCPR. The claim that he has suffered loss and damage based upon “potential” liability appears to me to be problematical, but I do not purport to express any concluded view on this issue particularly as there has been no strike out application made by Ms James on this point. I do however note that, according to the defence, this difficulty has been a live issue on the pleadings since 20 September 2021 and the defendant appears to have been content to allow this difficulty to be resolved at trial.
- [11]I am prepared to accept that on the basis of the material presently before the Court, there does not appear to be a realistic prospect of a claim being made against Mr McVicker for insolvent trading by the liquidators or any creditor. However, it cannot be said, and is not said, that there is no prospect of any such claim being made. Mr Martin KC noted in this regard that the material before the Court did not establish that the liquidator had contacted each creditor individually with a view to ascertaining whether there was an intention to make a claim against Mr McVicker.
- [12]Whilst there may presently be no realistic prospect of a claim for insolvent trading against Mr McVicker being made, that does not in my consideration mean that there should be an order for summary judgment in respect of his claim against Ms James. Such an order could in my assessment conceivably cause injustice in the event that a subsequent claim materialises. In terms of the primary purpose which I have identified at paragraph [8], there may well be amendments which are able to be made to the amended statement of claim which give better effect to that purpose, particularly as to the type of remedy claimed. In that regard, Mr McVicker may wish to seek to formulate a claim for declaratory relief or other form of order arising out of factual findings binding upon the parties concerning the Warranty Deed and any breach thereof. I am not satisfied that it is appropriate to grant summary judgment merely because, in the circumstances of this case, Mr McVicker appears to be only entitled to nominal damages on his current pleading. It may still be important to him to vindicate his rights under the Warranty Deed and this case does not appear to me to be a clear case where the primary purpose of the proceeding is only to recover substantial damages.
- [13]In all the circumstances I am not satisfied that this is an appropriate case for summary judgment.
- [14]I intend to list the matter for trial for three days commencing on 20 February 2022. I also intend to case manage the proceeding to trial as far as that is necessary.
- [15]I will hear the parties as to costs.