Vantralia Pty Ltd v Birt Enterprises Pty Ltd
[2025] QSC 145
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- Notable Unreported Decision
- Vantralia Pty Ltd v Birt Enterprises Pty Ltd[2025] QSC 145
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Vantralia Pty Ltd v Birt Enterprises Pty Ltd[2025] QSC 145
Vantralia Pty Ltd v Birt Enterprises Pty Ltd[2025] QSC 145
QUEENSLAND COURTS AND TRIBUNALS
SUPREME COURT OF QUEENSLAND
CIVIL JURISDICTION
TRESTON J
No 10083 of 2023
VANTRALIA PTY LTDPlaintiff
and
BIRT ENTERPRISES PTY LTDDefendant
BRISBANE
3.50 PM, THURSDAY, 6 FEBRUARY 2025
DAY 1
JUDGMENT
HER HONOUR: By an amended originating application filed 20 December 2024, the plaintiff makes an application to the court for a declaration pursuant to s 10 of the Civil Proceedings Act 2011(Qld), or, in the alternative, in the inherent jurisdiction of the court for declarations that are set out at subparagraphs 1(a) to (c) of the amended originating application:
- A declaration pursuant to section 10 of the Civil Proceedings Act 2011 or in the alternative the inherent jurisdiction of the Supreme Court that:
- The Caveats lodged by the Respondent, on Lot 3 RP 113733 Title Reference 14211007 [the Land], dated 27 July 2023 and lodged on or about 9 August 2023 and the Caveat dated and lodged on 9 August 2023 [the Caveats] were made and maintained without the Respondent having an interest in the Land pursuant to section 122 of the Land Title Act 1994 (Qld) or leave pursuant to section 129 of the Land Title Act 1994 (Qld) at the time of lodgements or at any time.
- Alternatively, that the Respondent did not have sufficient interest in the Land that would warrant a Caveatable interest at the time of the Caveats being lodged or any time.
- The Caveat dated and lodged on 29 August 2023 was lodged improperly without leave which was required pursuant to s 129 Land Title Act 1994 (Qld).
An interlocutory application was then filed on `10 January 2025 that, pursuant to rule 292 of the Uniform Civil Procedure Rules 1999 (Qld), a declaration is made in the terms of paragraphs 1(a), or alternatively 1(b), of the amended originating application. In addition, a further order was sought in the interlocutory application that, pursuant to rule 292 of the UCPR, a declaration be made in the terms of paragraph 1(c) of the amended originating application.
Both parties therefore proceeded on the basis that on the application for summary judgment, if it were successful, the court would make the declarations of the sort contained in the amended originating application.
The principles in relation to the giving of summary judgment are well known. Rule 292 provides that if the plaintiff applies to the court for judgment and can satisfy the court that there is no real prospect of the defendant successfully defending all or part of the claim, and that there is no need for a trial of the claim or part of the claim, then summary judgment may be entered.
The plaintiff accepts that the threshold for summary judgment is a high one. The plaintiff refers to the Deputy Commissioner of Taxation v Salcedo, where Williams JA stated that in deciding an application for summary judgment, the Judge determining such an application is essentially called upon to determine whether the defendant to the application has established some real prospect of succeeding at the trial – that is, real, as opposed to a fanciful prospect, as later authorities have described. If that is established, then the matter must go to trial.
In that same case of Salcedo, Justice Atkinson stated “the court must consider whether there exists a real, as opposed to fanciful, prospect of success. If there is no real prospect that a party will be successful in all or part of a claim, and there is no need for a trial, then ordinarily the other party is entitled to judgment.” The test to be applied, therefore, is the test which is contained in the rule itself, that is, that there is no prospect of successfully defending all or part of a claim, and that a trial is not required.
Before granting summary judgment, a court must have a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way. As much was made clear by the Court of Appeal in Coldham-Fussell v Commissioner of Taxation [2011] QCA 45 at paragraph 102. Even if the court is satisfied that the defendant has no real prospect of succeeding on all or part of the defendant’s defence, and that there is no need for a trial of the claim or part of it, it nevertheless remains a matter of discretion as to whether summary judgment is entered.The plaintiff here has the onus of showing that it has a prima facie case entitling it to judgment on a summary basis. Once that has been established, the evidentiary onus shifts to the defendant. The rule requires the satisfaction of both limbs of 292 and 293 to be satisfied.
Justice Flanagan, as his Honour then was, in Bendigo and Adelaide Bank Limited v Prichard described that: “Summary judgment ought not be granted unless it is clear there is no real question to be tried”, and described the onus in the way which I have already set out. His Honour went on to observe that the requirements are intended to ensure that the rules do not dispense with the need for a trial where there are issues which should be investigated at trial.
The factual circumstances giving rise to the claim are as follows. The plaintiff is a property developer, who was developing real property located at Cooroy. The defendant was a civil works contractor. The plaintiff entered into a contract with the defendant dated 10 October 2022, pursuant to which the defendant agreed to construct civil works on the property. The plaintiff’s sole director was Ms Vanessa Catherine Mathews. Ms Mathews is married to Mr Darren Mathews. It is common ground that at all material times Mr Mathews was a bankrupt. After entering into the contract, works were carried out on the property at Cooroy.
In August 2023, the defendant, by its solicitors, sought to terminate the contract. The pleaded case relied upon by the defendants is that Mr Mathews was held out as the plaintiff company’s point of contact before the contract was entered into, and Mr Mathews, in fact, was the person who signed the contract on behalf of the plaintiff company. The defendant alleges that the plaintiff company held Mr Mathews out as a director and manager of the company by introducing himself to the defendant’s representative on 29 August 2022, stating at the time, words to the effect that he was the owner of the property, he was the developer of the property, and he had money to pay for the proposed works pursuant to the contract.
In fact, it was the case, as I have already said, that Mr Mathews was an undischarged bankrupt. The defendant alleges that by his representations, Mr Mathews, in fact, represented that as director and manager of the plaintiff, he was not an undischarged bankrupt, and that the company was not being managed by an undischarged bankrupt.
The defendants contend that the representations were false and misleading or likely to mislead or deceive, pursuant to section 18 of the Australian Consumer Law. The defendant alleges that it would not have entered into the contract with the plaintiff had it known the true facts. The defendant alleges that it has validly terminated the contract. The plaintiff contends the contract remains on foot.
The plaintiff, in fact, contends that monies are owed to it under the contract for some alleged overpayments that it made. That claim is for a sum of just less than $80,000. By way of a counter-claim, the defendant pleads that it is owed still some $750,000.
There are also a number of disputes that arise under the terms of the contract, which are or will be the subject of separate proceedings in a conventional building contract context. Those matters are not relevant to this application.
Before the contract was originally purported to be terminated in August 2023, the defendant lodged a caveat over the land at Cooroy, claiming an equitable interest in the land, arising from a constructive trust, implied trust or resulting trust. That caveat was subsequently withdrawn in late August 2023, with the defendant identifying that the grounds stated in the caveat did not accurately describe the grounds upon which the defendant claimed an interest in land. Later in August 2023, the defendant lodged another caveat over the land, this time claiming an equitable interest in the form of an equitable lien.
Ultimately, consent orders were made by Justice Applegarth on 18 September 2023 for the removal of a second caveat and an order that the plaintiffs pay into their solicitor’s trust account a sum of some half a million dollars. By the declarations which the plaintiff seeks, effectively, the plaintiff seeks to establish that the defendant has no equitable lien over the sum, with such further ancillary orders being such that that money would be released from the solicitor’s trust account. The defendants assert that they have a caveatable interest, in furtherance of which they lodged a second caveat in reliance on the equitable lien.
The plaintiff accepts that an equitable lien may constitute a caveatable interest for the purpose of the Land Title Act, but the plaintiff contends that the defendant’s case cannot succeed, because there is not, and could never have been, an equitable lien over the land in the circumstances of this case. The defendant pleads unconscionable conduct on the part of the plaintiff by the conduct of Mr Mathews to support the defendant’s claim for that lien.
The amended pleading, setting out the unconscionable conduct cases is contained substantially in paragraph 21 of the further amended defence of the defendant that was made pursuant to an order of Justice Sullivan dated 3 September 2024. Paragraph 21 of the further amended pleading provides:
21. The defendant denies the allegations in paragraph 21 of the statement of claim because the defendant has a caveatable interest in the Property (as that term is defined in the statement of claim) because:
- the plaintiff is indebted to the defendant in respect of the civil works performed by the defendant pursuant to the Contract in respect of the Property and as directed by the superintendent from time to time (the Indebtedness);
Particulars
The defendant relies on the particulars of the civil works identified in the counterclaim.
- the Property was specifically identified and appropriated to the performance of the civil works;
Particulars
The defendant relies on the facts alleged by the plaintiff in paragraph 6 of the statement of claim
- as alleged in paragraph 6(b)(i)(2)(b) above, Mr Darren Mathews held himself out to be and was held out to be by the plaintiff a director and the manager of the plaintiff, as on or about 29 August 2022, Mr Darren Mathews, for the plaintiff, introduced himself to Mitchell James Birt, for the defendant, in a meeting in person at the Property in words to the effect that was the owner of the Property, he was the developed of the Property and he had the money to pay for the proposed works pursuant to the Contract;
- as alleged in paragraph 6(b)(i)(2)(a) above, Mr Darren Mathews was in fact an undischarged bankrupt at all material times and he was therefore disqualified from managing corporations pursuant to section 206B(3) of the Corporations Act 2001 (Cth):
- the defendant, by Mitchell James Birt, did not know, and, having been informed of the matters stated by Mr Darren Mathews on or about 29 August 2022, he had no reason to suspect that the plaintiff was being managed by an undischarged bankrupt;
- as alleged at paragraph 6(b)(iii) above, the defendant would not have entered into the Contract if the defendant had known that the plaintiff was being managed by an undischarged bankrupt;
- by reason of the matters alleged in paragraphs 21(C) to 21(f) above, the defendant was at a special disadvantage vis a vis the plaintiff and it was against normative standards of acceptable commercial behaviour for the plaintiff to inform the defendant of the matters stated on 29 August 2022 where they were untrue and where they were likely to induce the defendant to enter the Contract; and
- in the premises, it was unconscionable for the plaintiff to fail to disclose to the defendant that Mr Darren Mathews was in fact an undischarged bankrupt;
- in the premises, it would be unconscientious of the plaintiff to dispose of the Property without Indebtedness being discharged.
In short, paragraph 21 pleads the case, the factual circumstances of which that I have set out above, that but for the conduct of Mr Mathews, which conduct it is alleged was false and misleading, the defendant would not have entered into the contract with the plaintiff. The defendant pleads it was unconscionable for the plaintiff to fail to disclose that Mr Mathews was, in fact, an undischarged bankrupt and that the plaintiff company was being managed by him.
The High Court’s decision in Hewett v Court remains the leading authority in this country on equitable liens. As to the nature of an equitable lien, Chief Justice Gibbs observed that an equitable lien did not depend upon contract or upon possession, “it arises by operation of law under a doctrine of equity, as part of a scheme of equitable adjustments of mutual rights and obligations”. His Honour went on to observe that, “It would be difficult, if not impossible, to state a general principle which would cover the diversity of cases in which an equitable lien has been held to be created”.
Justice Deane, in the same case, identified a statement of circumstances of what would be sufficient rather than what was essential to establish an equitable lien. In Hewett’s case, his Honour identified three such circumstances which might be so sufficient, and they are contained at pages 668 and 669 of the decision. I have had regard to each of those matters in the circumstances of this case, but with a view to recognising, as his Honour said, that they might be sufficient in the circumstances of a case, rather than essentially an effective checklist to establish the existence of such a lien.
The plaintiff’s position is that a contractor to a building contract, particularly a party that provides services such as, in this case, civil earthmoving work, does not obtain an equitable interest in land in undertaking that work. In this matter, rather, the plaintiff contends that the defendant has contracted its services for money, it being money and not an interest in land which is the property with which this contract is concerned. Next, the plaintiff identifies that no unconscientiousness arises where there is no evidence that the contracting party is impecunious. Third, the plaintiff submits that caveats should not be used as a debt recovery tool to circumvent court processes and legislation enacted to assist building contractors to resolve their disputes. For reasons which I will briefly return to, that third issue can be safely ignored, although there is, in fact, little to doubt the correctness of it as a broad proposition.
The plaintiff places significant reliance, as I say, on the three circumstances sufficient for the implication of an equitable lien identified by Justice Deane in Hewett’s case. Respectfully, to the detailed analysis of the comparable cases carried out on behalf of the plaintiff, when it is remembered that those three identified factors in Hewett’s case are not as such a checklist that must be satisfied in order to establish an equitable lien, the analysis of those comparable cases becomes, in my view, less useful to the consideration of a summary judgment application. It may well be, on the substantive determination of the proceeding, that such an analysis is of greatly more assistance; but here it is less helpful, I find, in the determination of the satisfaction of the threshold that the defendant has no real prospect of succeeding on all or part of the defence, and that there is no need for a trial of the claim or part of the claim.
Without intending to state the matter at too high a level, equitable remedies based on allegations of unconscionable conduct are ones which are not generally susceptible to a checklist-type approach, as was adopted in Hewett’s case for the establishment of an equitable lien. Hewett itself was, in fact, not such a case. Rather, even in circumstances where the present defence might ultimately be an unsuccessful one, the question of whether a party has acted unconscionably is generally a matter which requires a very specific factual inquiry, which are not generally, broadly susceptible to being resolved in a summary way.
A similar approach to this was adopted in Andrews Building Constructions Proprietary Limited v Machkevitch [2012] NSWSC 25. There, Justice Davies considered whether an equitable lien could arise from unconscionable conduct against a party. His Honour concluded that, as the question of whether it did arise was a factual question, the defendant should be, in that case, restrained from disposing of the property until a trial. In relation to that issue, his Honour said:
[48] What the Plaintiff asserted in submissions, however, was that it was the transfer of Unit 4 which, following what Deane J said in Hewett , resulted in the equitable lien being imposed, or otherwise caused a constructive trust in respect of Unit 4 to arise. The pleading in paragraph 38 embraces this but appears to go further. The Plaintiff ought not to be precluded from putting its case as it has simply because part of its pleading may extend beyond what is able to be demonstrated.
[49] In my opinion the present case is also a borderline one in relation to this aspect of the claim. If the Defendant (or NSHR for that matter) has acted unconscionably, Hewett and Cadorange may support the claim for an equitable lien, albeit, neither was considering the position of a builder who carried out the work on the land pursuant only to a building contract. That may be significant because of the general principle that I have mentioned that the builder does not acquire any interest in the land absent an express provision in the contract or a belief that he would do so, encouraged by the owner.
[50] In Hewett Deane J allowed for unconscionability arising from the disposal of the relevant property. Whilst it is true that no constructive trust arose before the transfer of Unit 4 the transfer itself, considered in the light of the pre-contractual statements about ownership of the land which led to the Building Contract being entered only with NSHR, the transfer of Unit 4 arguably raises an issue of unconscionability which may give rise to a constructive trust in respect of that Unit. Had the true position about ownership of the land been made clear before the Building Contract was made the Plaintiff is likely to have had a much more difficult task in asserting unconscionability at the time of the transfer of Unit 4. This is because the Deed of Partition and the subsequent transfers for $1 each could be seen as merely re-ordering the ownership shares. But it is where the Defendant has no contractual liability to the builder because of the pre-contractual ownership statements that the transfer of Unit 4 acquires a different, and an arguably unconscionable, significance.
[51] The whole issue of whether the Defendant has acted unconscionably will need to be examined. Whilst some things seem clearer than others there are factual enquiries which cannot be resolved on this interlocutory application. These include the statements by the Defendant concerning ownership of the land prior to the building contracts, and when the Plaintiff was first informed about the transfer of Unit 4. On one view (as noted above), if NSHR and the Defendant owned the property as to 75% and 25% respectively, there was nothing untoward in the Deed of Partition and the transfers for $1. In that regard, however, there may need to be some enquiry into the respective values of each of the four lots.
Importantly, his Honour observed that the whole of the issue of whether the party had acted unconscionably would need to be examined, and whilst some things might seem clearer on the material than others, there are factual inquiries which simply could not be resolved on an interlocutory application.
The same applies here. Whilst his Honour in Andrew’s case considered that the case was a borderline, and the same could respectfully, safely be said in respect of the current case. The factual circumstances pertaining to the conduct are ones which, in my view, cannot properly be determined on an interlocutory basis. Courts have for years grappled with the concept of what might or might not constitute unconscionable conduct, with the High Court in Kobelt’s case (2019) 267 CLR 1, using a variety of descriptions to separate unconscionable conduct from conduct which might merely be unjust, unfair or unreasonable, but also demonstrating that unconscionable conduct did not necessarily require findings of dishonesty.
Justice Edelman in that case described that there was “no clear baseline moral standard for what constitutes unconscionable conduct”, there his Honour considering the phrase as it appeared within provisions of the ASIC Act.
The Queensland Court of Appeal in Adani Abbott Point Terminal v Lake Vermont [2021] QCA 187, recently considered authorities in relation to the meaning of unconscionable conduct, and again, it’s beyond the needs of this decision to set out the detail of that in any analysis today. Suffice to say that the examination of the question of unconscionable conduct in the context of commercial contractual relationships such as this one seems to me to be an exquisitely factual exercise.
As such, it is one which the court could not conclude that the defendant had no real prospect of succeeding on all or part of the defence, and that there is no need for a trial of the claim or part of it. Whilst, as I say, the claim might fairly be described, as it was in Andrew’s case, as a borderline one, it is not, in my view, one which is amenable to summary judgment. In the circumstances, I would dismiss the application.
Before I do so, I should deal briefly with the alternative cases submitted by the defendant, being the two other bases upon which the application ought to be dismissed. The first is that the defendant submits there is no utility in the declarations being made now, as no relief would follow from any of the declarations sought. The plaintiff submits that the declarations have utility, because, if successful, the plaintiff would proceed to an application for compensation pursuant to section 130 of the Land Title Act. Section 130 of the Land Title Act provides:
130 Compensation for improper caveat
- The caveator under a caveat lodged or continued without reasonable cause must compensate anyone else who suffers loss or damage as a result
- In a proceeding for compensation under subsection (1), a court of competent jurisdiction may include in a judgment for compensation a component for exemplary damages.
- In a proceeding for compensation under subsection (1), it must be presumed that the caveat was lodged or continued without reasonable cause unless the caveator proves that it was lodged or continued with reasonable cause.
- Subsection (1) does not apply to the registrar in relation to a caveat prepared and registered under section 17.
Importantly, in a proceeding for compensation under subsection (1), the plaintiff would need to establish that the caveat which had been originally lodged, and which was removed, and/or the subsequent caveat, had been lodged or continued without reasonable cause, unless the caveator proves that it was lodged or continued without reasonable cause under subsection (3). It seems to me to be correct to submit, as the defendant does, that summary judgment would not automatically lead to the assessment of compensation. The court would still have to hear a proceeding in order to determine the issue, if it arose, as to whether the caveat was lodged or continued with or without reasonable cause.
Whilst I accept the plaintiff’s submission that the declarations, however, would simply be the first step in the process towards compensation, it seems to me that in respect of the question about whether the caveat was lodged with reasonable cause or not, the defendant might still seek to rely on the same sorts of issues as those which arise in the unconscionable conduct case, ultimately meaning that the same sorts of issues might fall to be determined in due course.
Although I consider it is unnecessary for me to decide this issue, I have some reservations about the utility of the summary judgment application in any event, and, on balance, I would have declined, for discretionary reasons, to grant it on that basis.
As to the second discretionary issue, the defendant contends this is effectively the second time the plaintiff has raised this similar issue. The first time a similar but not identical contention was advanced, was before Justice Sullivan in September 2024, when the plaintiff applied to strike out parts of the defendant’s pleading. On that occasion, Justice Sullivan expressed a tentative view that it may well be that, as a matter of law, an equitable lien might be available in the circumstances raised by the defendant. Indeed, as I read the material, it was his Honour who brought Andrew’s case to the attention of the parties, and it was because his Honour raised that issue, that an equitable lien might be arguable, without deciding it, if properly pleaded, that his Honour gave leave to, in fact, re-plead.
It is correct to say, however, as submitted by the plaintiff, that the plaintiff flagged at that time an intention to bring the summary judgment application if the fresh pleading still gave rise to such an issue. In my view, it cannot fairly be said that this is effectively the plaintiff’s second application for summary judgment, and I would not, as a matter of discretion, refuse the application on that ground.
It follows that the application pursuant to paragraph 1 and 2 of the interlocutory application filed the 10th of January 2025 be dismissed.
In the amended originating application, the plaintiff had sought alternative summary judgment in terms of paragraph 1(c) of the amended originating application, which sought a declaration that the caveat lodged on 29 August 2023 was lodged improperly without leave, which was required pursuant to section 129 of the Land Title Act. That declaration was the subject of paragraph 2 of the interlocutory application. I deal only very briefly with this to the extent that it raises any separate or different issue.
There was little oral or written argument addressed to this question. Some of the plaintiff’s written submissions were directed to the contention that that caveat was used as leverage for debt recovery purposes. The evidence which the plaintiff relied upon substantially in support of that submission was objected to by the defendant at the outset of the proceedings before me. Those objections to the affidavit of Mr Mathews were effectively conceded at the outset of the hearing, and I struck out those paragraphs in which Mr Mathews speculatively and argumentatively expressed opinions that the caveat was being used to place commercial pressure on the plaintiff.
Having struck out those parts of Mr Mathews’ affidavit, it seems to me that, to the extent that I need to deal separately with relief in respect of paragraph 1(c) of the amended originating application, the subject of paragraph 2 of the interlocutory application, that relief was destined to fail. But even if I am wrong in relation to that issue, I would have concluded, in any event, that an allegation that the caveat was improperly lodged was one which was so factually nuanced it could not possibly have been suitable for a summary determination. In the circumstances, the application for summary judgment is dismissed.