Beachcomber Management Pty Ltd ATF The Kafritsas Family Trust v Catchco Properties Pty Ltd & Ors [2012] QDC 291

DISTRICT COURT OF QUEENSLAND CITATION: Beachcomber Management Pty Ltd ATF The Kafritsas Family Trust v Catchco Properties Pty Ltd & Ors [2012] QDC 291 PARTIES: BEACHCOMBER MANAGEMENT PTY LTD ACN 156 514 822 ATF THE KAFRITSAS FAMILY TRUST Applicant and CATCHCO PROPERTIES PTY LTD ACN 096 827 048 First Respondent and MALCOLM GEOFFREY CATCHPOLE Second Respondent and PAMELA ROBYN CATCHPOLE Third Respondent FILE NO/S: 295 of 2012 DIVISION: Civil PROCEEDING: Originating application ORIGINATING COURT: District Court at Southport DELIVERED ON: 18 September 2012 DELIVERED AT: Southport HEARING DATE: 23 July 2012 JUDGE: McGinness DCJ ORDER: 1. This proceeding be transferred to the Supreme Court 2. Costs of the application reserved to the Supreme Court CATCHWORDS: PROCEDURE – INFERIOR COURTS – DISTRICT COURT - CIVIL JURISDICTION – TRANSFER OF ACTIONS FROM DISTRICT COURT TO SUPREME COURT – where originating application is not within the jurisdiction of the District Court – s 68 District Court Act 1967 -- 1 of 4 -- 2 LEGISLATION: District Court of Queensland Act 1967 s 68, 85 CASES: Brisbane City Council v Wood Hall Ltd [1983] 1 Qd R 563 Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 at 522-4 General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] Qd R 6 at 9; Mackay v Industrial Acceptance Corporation Ltd [1961] QWN 6 Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2010] 1 WLR 1803 at 1808 Ofulue v Bossert [2009] 1 AC 990 confirmed at House of Lords: [2011] 1 AC 662 Unilever PLC v Procter & Gamble Co [2000] 1 WLR 243 at 2444 COUNSEL: M J Campbell for the Applicant P J Favell for the Respondents SOLICITORS: Delaneys Lawyers for the Applicant MacGregor O’Reilly for the Respondents Introduction [1] The applicant has filed an originating application in this Court seeking a declaration that a legally binding contract was formed between it and the first, second and third respondents. The contract alleged is one by which a proceeding pending in the Supreme Court was compromised, although the application does not make this clear. The respondents submit that the District Court does not have jurisdiction to decide this matter, and in addition that the relief should be refused on the merits, no binding contract for settlement being ever entered into between the parties. Jurisdiction [2] The respondents’ point is that the jurisdiction of the District Court is set out in the District Court of Queensland Act 1967 s 68, and the application in the present matter does not fall within any of the provisions. It is not a personal action so it does not fall within the paragraph (a), nor does it fall within any of the specific categories of equitable relief or relief under a statute identified in s 68(1)(b). That appears to be correct, but the applicant submitted that the application fell within s 68(1)(b)(iii) or (xiii). The former covers a proceeding for “specific performance of an agreement for the sale or other disposition of land or an interest in land or of any other property”, subject to the monetary limit, or for damages in lieu of specific performance; the latter an application “for the determination of any question of construction arising under a deed, will or other written instrument, and for a declaration of the rights of the persons interested, where the sum or the property in respect of which the declaration is sought does not exceed in amount or value the monetary limit”. [3] As to the former, the short answer is that specific performance is not sought, just a declaration as to the existence of the contract. A longer answer may be that it is not at all clear that the contract is for the sale or disposition of any property. Although -- 2 of 4 -- 3 part of the contract alleged was that one party would buy another party’s “rent roll”, it appears from the draft rent roll assignment agreement sent by the respondents’ solicitors to the applicant’s solicitors in December 2011 that what was contemplated was a transfer of the burden of the agreements between the “vendor” and each unit owner, as well as the benefit, and that this was subject to each owner’s “consent to accept the assignment to the purchaser”. If what was contemplated by this agreement was an assignment of the contracts with the unit owners, that would be a disposition of property; but if, as this suggests, there was really to be a series of novations between the willing unit owners and the parties, that in my opinion would not be a disposition of property, since what the vendor was really being paid for was its willingness to enter into such novations, and to recommend that the unit owners also do so: see clause 6.2(b). It is unnecessary to decide this point, as specific performance is not claimed. [4] It would be open in the present case, if the relevant contract was a contract in writing, for that to satisfy the test for a “written instrument”, but it is not entirely clear that all of the steps necessary to make a valid contract of settlement in the present case were in writing. There was no deed of settlement signed by the parties. A more substantial difficulty however is that there is no issue which arises in respect of the construction of any written instrument, the dispute between the parties being as to whether there is a binding contract to settle the earlier proceeding. There is authority that the mechanism of a construction summons in the Supreme Court under the then Rules of the Supreme Court O64 r1A is not appropriate where the dispute is whether the instrument is valid and binding rather than about its construction: Mackay v Industrial Acceptance Corporation Ltd [1961] QWN 6. There is also authority that under that rule no declaration can be made if no question of construction is determined: Brisbane City Council v Wood Hall Ltd [1983] 1 Qd R 563. Paragraph (xiii) was based on the former O64 r1A, and accordingly I consider that these authorities provide guidance as to correct interpretation of this paragraph. The jurisdiction is conferred by reference to the existence of a question of construction to be determined, and the reference to a declaration is a reference to a declaration consequent upon the determination of that question of construction. [5] Apart from this, the monetary limit is applied in the District Court by reference to the value of the sum or property in respect of which the declaration is sought. That indicates that the question of construction must be one where the rights of the person interested as a result of its determination arise in respect of a sum of money or property having a value not above the monetary limit. The monetary limit obviously applies to the whole paragraph, and that shows that jurisdiction to make a declaration is conferred by the paragraph only where it is made in conjunction with the determination of a question of construction arising out of a written instrument; there is no freestanding jurisdiction to make a declaration. This may be contrasted with the position of the Supreme Court under the Supreme Court Act 1995 s 128, or, following the commencement of the Civil Proceedings Act 2011, s 10 of that Act. [6] If the proceeding alleged to have been compromised by the agreement was a proceeding in the District Court, it would have been open for the applicant to apply in that proceeding to obtain the declaration, and consequential relief to enforce the compromise: General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] Qd R 6 at 9; Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 at 522-4. That however cannot assist the applicant, because the principal proceeding is -- 3 of 4 -- 4 pending in the Supreme Court. It is therefore not open to me to treat the originating application as an application filed in that proceeding. [7] In those circumstances the respondents’ point about want of jurisdiction is a good one. The appropriate course under s 85 of the District Court of Queensland Act is to order that this proceeding be transferred to the Supreme Court. It is not clear whether I have any jurisdiction in relation to costs in circumstances such as this, but if I have I will simply reserve the costs to the Supreme Court. Admissibility Of Without Prejudice Correspondence [8] There is one matter which was argued before me on the hearing of the application with which I should deal. Objection was taken to evidence in the form of correspondence between the parties which was headed “Without Prejudice” and annexed to an affidavit of Timothy Norton Delaney sworn 20 July 2012 which the applicant sought leave to read and file at the hearing. In my opinion there was no substance to that objection, because it is well established that when the issue is whether without prejudice communications have resulted in a concluded compromise agreement evidence of those communications is admissible: Unilever PLC v Procter & Gamble Co [2000] 1 WLR 243 at 2444; Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2010] 1 WLR 1803 at 1808. The approach in the former case was approved by the House of Lords in Ofulue v Bossert [2009] 1 AC 990, although the point in issue in that appeal was different. The latter decision was affirmed by the House of Lords: [2011] 1 AC 662. I therefore grant leave to the applicant to read and file the affidavit and attached correspondence. [9] As to the merits of the application, in circumstances where the matter is to be transferred to the Supreme Court I do not think it appropriate for me to express any view even on a precautionary basis. [10] I order this proceeding be transferred to the Supreme Court. I reserve the costs of the application to the Supreme Court. -- 4 of 4 --