BMW Australia Finance Ltd v Myrteza & Anor [2010] QDC 541

1 [2010] QDC 541 DISTRICT COURT CIVIL JURISDICTION JUDGE JONES No 1337 of 2009 BMW AUSTRALIA FINANCE LIMITED Plaintiff and BURIM MYRTEZA AND ANOR Defendant BRISBANE ..DATE 19/10/2010 ORDER -- 1 of 9 -- 2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: I am concerned with an application for judgment but the plaintiff pursuant to rule 292 of the Uniform Civil Procedure Rules. As this was the second application for judgment leave was required, leave was granted without objection. In the alternative to the application for judgment the plaintiff seeks orders that paragraphs 2, 4 and 10 to 21 of the amended defence be struck out and that the entirety of the second defendant's counterclaim be struck out. As to the application for judgment, judgment may only be granted in circumstances where, relevantly here, it is shown that the second defendant has no real prospect of successfully defending the plaintiff's claim against it and there is no need for a trial of that claim or part thereof. In the case that is almost always referred to in matters such as this, the Court of Appeal decision of Deputy Commissioner of Taxation and Salcido [2005] QCA 227 in the leading judgment of Williams JA, with the President and Atkinson J agreeing, his Honour Williams JA in paragraph 11 referred to a number of cases with approval. I will not refer to all of these but note that in paragraph 11 after referring to a decision of Lord Wolfe, Master of Rolls, his Honour cited the following passage with approval: "The words 'no real prospect of succeeding' do not need any amplification, they speak for themselves. The word 'real' distinguishes fanciful prospects of success or they direct the Court to the need to see whether there is a realistic as opposed to a fanciful prospect of success." -- 2 of 9 -- 3 ORDER 1 10 20 30 40 50 60 Later, after referring to other judgments of Law Lords the following passage was referred to with approval: "This is simple language not susceptible to much elaboration, even forensically. If there is a real prospect of success the discretion to give summary judgment does not arise merely because the Court concludes that success is improbable." In paragraph 12 that is expanded on by his Honour, and again in paragraph 14, although I do not think it is necessary to refer to those paragraphs in full. On behalf of the second defendant three issues are raised in resistance to the application for judgment. They are to the effect that substantive matters of largely fact but also significantly issues of mixed fact and law, raise triable issues in respect of first, whether or not there is a binding agreement; second, whether the agreement is voidable pursuant to section 87 of the Trade Practices Act; and third, that there is triable issues concerning the value of the motor vehicle. Although, in respect of the third matter it would, of course, be open if the plaintiff were to satisfy me in respect of the first two issues to leave only the question of quantum as a triable issue. As to the first of these matters, the second defendant is a corporation and it is pleaded in the amended defence in paragraph 5 that it did not enter into a valid guarantee and indemnity with the plaintiff. The facts and circumstances -- 3 of 9 -- 4 ORDER 1 10 20 30 40 50 60 relied on in support of that allegation are essentially those pleaded in paragraphs 8 to 21 of the amended defence. In paragraph 17, in particular, it is pleaded, to the effect that it would not have authorised the first defendant to enter into such an agreement, the first defendant and the other director having entered into an arrangement whereby the first defendant was to stand down as a director. This particular defence is elaborated on in paragraph 18 of the amended defence, particularly in subparagraphs B, C and D. I should note here that judgment has already been entered against the first defendant. As I understand it the first defendant failed to file any material in response to the claim by the plaintiff against him. In this case at all relevant times the first defendant was one of two directors of the company. Under the constitution of the second defendant article 26 was brought to my attention by Mr Carius of counsel and in particular those words under the heading "Execution With Or Without Common Seal". That article relevantly states that the company may execute a document with or without affixing a common seal if it has adopted a common seal to the document. If the document is signed by A, two directors of the company or B, a director and the company secretary. However this clause only applies were a company secretary has been appointed, not surprisingly; or C, if the company has only one director then by that director. However, there is an expansive caveat to that article, namely -- 4 of 9 -- 5 ORDER 1 10 20 30 40 50 60 that this rule shall not be interpreted as limiting the manner in which the company may execute a document, including a deed. That particular part of article 26 was not raised in argument. However, it seems to me that one possible meaning might be that it is open for the directors of the company by appropriate resolution to give authority to one director to enter into particular arrangements, binding arrangements, notwithstanding the operation or effect of 26(a) and (b). There is sworn evidence by way of affidavit from the first defendant and the other director of the company that at the time the agreement was entered into the first defendant had no authority to do so. In all the circumstances, I have reached the conclusion that there is sufficient uncertainty surrounding the authority of the first defendant to bind the second defendant, be it actual or ostensible authority, to prevent a conclusion that no real prospect of successfully defending the action exists. That is so notwithstanding the apparent expansive caveat at the conclusion of article 26 to which I have already referred. Now, that finding alone would be sufficient, in my view, to dismiss this part of the application but for the sake of completeness I will deal with the other matters. As to the second issue, in paragraphs 8 to 17 of the amended defence it is alleged against the plaintiff that it, through its agent or representative, misled the first defendant to -- 5 of 9 -- 6 ORDER 1 10 20 30 40 50 60 execute the agreement by advising him of about the nature and effect of the documents bearing the second defendant's name. In particular, that such documents were not guarantees. The person who allegedly made these representations was apparently not an employee of the plaintiff but more likely than not an employee or agent of the car supplier. In response to the argument raised on behalf of the second defendant, relying on the decision of the Full Court in Victoria in Custom Credit Corporation and Lynch [1993] Victorian Reports 469, particularly at 486, it was submitted on behalf of the plaintiff that this defence was not open to the second defendant because a person is not an agent of a credit provider in common law merely because he possesses the credit provider's forms, receives a commission from the credit provider for the introduction of a debtor, or fills in the charges in the relevant forms. That is a summary of Ms Duffy's argument taken from the headnote to that decision to which I have referred. That these representations were allegedly made is neither denied nor admitted by the plaintiff. This is not surprising. He or she was not an employee or agent of the plaintiff, apparently, and if this was the case then his or her identity would be unknown to the plaintiff. I might say that I find some tension between the allegation in the defence concerning the lack of authority of the first defendant to bind the company and the signing of the agreement -- 6 of 9 -- 7 ORDER 1 10 20 30 40 50 60 by the first defendant on the representation that it was not a guarantee. I also consider the argument advanced by Ms Duffy on behalf of the plaintiff is not without some merit. However, on balance, I consider again it could not be said that a second defendant has no real prospect of successfully raising this defence. As to the issue of the value of the motor vehicle, this is clearly a question of fact which should be left to trial. If I could move on then to the striking out of the counterclaim. In paragraph 123 of the written submissions of Ms Duffy, the complaint against the counterclaim is that no material facts are alleged in support of the conclusion that the dealer was a representative agent of the plaintiff and no loss or damage is alleged to have been caused by the alleged misleading and deceptive conduct. The nature of the relief sought in the counterclaim does not require the pleading of any loss or damage. What is sought is declaratory relief pursuant to the trade practices legislation dependant upon the allegations of alleged deceptive and misleading conduct. If the second defendant were able to successfully defend the claim against it, relying on the authority issue to which I have already referred, this relief would be largely redundant as was acknowledged by Mr Carius. But notwithstanding that, given the present stage of proceedings, I do not consider it necessary or appropriate to strike out the counterclaim. Whether or not the dealer was a representative or agent of the -- 7 of 9 -- 8 ORDER 1 10 20 30 40 50 60 plaintiff is one of the factual issues that is yet to be resolved and may, in fact, require third party disclosure. Turning then to the final matter, the striking out of various paragraphs of the pleadings. The complaint in respect of paragraph 4 is that no particulars have been provided concerning what the second defendant says the market value of the vehicle ought to be and also a complaint is made about the lack of any particularity about the alleged offending behaviour of the plaintiff regarding the disposal of the vehicle. The real concern regarding paragraphs 10 to 21 is the reference to the person who allegedly made the misleading statements being the agent or representative of the plaintiff. As I have said, the actual identity of that person is, as yet, unknown. I am prepared at this stage to proceed on the basis that Mr Carius’ clients were expecting or at least hoping that the person's identity would have been disclosed within the disclosure process with the plaintiff but, perhaps not surprisingly where that person was not an employee of the plaintiff, that did not arise. It appears to me that amendments to the amended defence will be required but at this stage it would be premature to strike out these pleadings. I also consider it appropriate to make certain orders to assist in the clarification of any confusion -- 8 of 9 -- 9 ORDER 1 10 20 30 40 50 60 that might exist in the pleadings as they presently stand. For the reasons given, the application is refused but I would like to hear from the parties about a number of matters. First, of course, the obvious one, costs; and second, putting some appropriate directions in place. ... HIS HONOUR: The orders of the Court will be the plaintiff's application is dismissed. The costs of and incidental to the application to be assessed on the standard basis will be costs in the cause. It is further ordered that the parties complete disclosure by 2 November 2010; That the parties file any notices of non-party disclosure by 2 November 2010; The parties file any application for further disclosure by 23 November 2010; Each party serve any expert reports by 14 December 2010; Each party be at liberty to apply for further directions on three business days' notice in writing to the other. ----- -- 9 of 9 --