Cowan v Griffiths McColm Parry [2005] QDC 212

DISTRICT COURT OF QUEENSLAND CITATION: Cowan v. Griffiths McColm Parry [2005] QDC 212 Lob Wedge as Trustee for the Forbes Chatham Superannuation Fund v. Griffiths McColm Parry PARTIES: Griffiths McColm Parry (applicant) 325 /04 v. Douglas Keith Cowan and Joan Cowan (respondent) Griffiths McColm Parry (applicant) 118 / 03 v. Lob Wedge as Trustee for the Forbes Chatham Superannuation Fund (respondent) FILE NO/S: 325/04 and 118 / 03 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Maroochydore DELIVERED ON: 16 June 2005 DELIVERED AT: Maroochydore HEARING DATE: 20 May 2005 JUDGE: K.S. Dodds ORDER: Application refused CATCHWORDS: Rule 171 Uniform Civil Procedure Rules CLAIM AND STATEMENT OF CLAIM – wh.claim and statement of claim should be struck out. Rule 293 Uniform Civil Procedure Rules. Wh. summary judgment for defendant. COUNSEL: Mr Fleming Q.C. & Mr Moon (applicant) Mr Burnett (respondent) SOLICITORS: McColm Matsinger Lawyers (applicant) Schultz Toomey O’Brien (respondent) -- 1 of 4 -- 2 [1] These are applications by a defendant firm of solicitors for summary judgment against plaintiffs, further or alternatively, that the plaintiffs’ claim and statement of claim be struck out pursuant to Rule 171 UCPR. [2] The applicant received money from persons including the respondents which was amalgamated with other monies from other contributors, passed on to a company, LawCoast Mortgages Pty Ltd and lent by it to borrowers on first mortgage over real property. LawCoast Mortgages Pty Ltd was the defendant’s nominee company and was the mortgagee. See Rule 87 Queensland Law Society Rules. Under Rule 87 the applicant was required to obtain the prior written authority of each contributor in or to the effect of a particular form (in this proceeding referred to as a mortgage investment authority) before any money was provided to a borrower. Within one month after, inter alia, the first payment to the borrower under the mortgage or any variation of such mortgage a summary of mortgage containing certain specified particulars (in this proceeding referred to as an epitome of mortgage) was required to be prepared, executed and provided by the appellant to each contributor. These things were done in the case of each respondent. Cowan The respondents proceeding against the applicant alleged that the applicant breached both its contractual duty and its general duty of care to the respondent. The contractual duty was alleged to have its source in a contract of retainer between the respondent and the applicant in respect of the provision of funds for mortgage lending. The tortious duty was alleged to arise from the defendant’s role as solicitor and as third party mortgage lenders. Further particularisation of the duty appeared to confine it as arising out of the relationship brought about by the contract of retainer between the respondent and the applicant which was said to arise from mortgage investment authorities executed by the respondent with respect to monies provided to the applicant by the respondent, which, ultimately, with other monies provided to LawCoast Mortgages Pty Ltd, were lent to one Nocerino. [3] The application proceeded with a thorough examination by the applicant of the respondent’s pleadings, further and better particulars and discovered documents. The applicant asserted that with respect to the material transaction they were never retained as solicitors for the respondent, they at all times acted as solicitors for LawCoast Mortgages Pty Ltd, that with respect to the respondent (and others) they acted as no more than a conduit through which contributors provided money to LawCoast Mortgages Pty Ltd who leant to borrowers on first mortgage. They submitted that the mortgage investment authorities executed by the respondent, said in further particulars to evidence a contract of retainer, were not capable of doing so. [4] The proceeding by the respondent against the applicant which is sought to be struck out concerned sums of $100,000.00 and $50,000.00 provided to the applicant for mortgage lending on two separate occasions on or about 10th October 1994 and 8 February 1995 respectively. These monies, amalgamated with other monies, were provided to LawCoast Mortgages Pty Ltd and lent to Nocerino. Nocerino failed to meet repayment obligations, resulting in capital being lost. [5] Rule 293 Uniform Civil Procedure Rules (UCPR) makes provision for summary judgment for a defendant. On such an application, if the court is satisfied the -- 2 of 4 -- 3 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 the court may give judgment for the defendant for all or the part of the plaintiff’s claim. [6] The rule has been considered by courts in any number of applications. In Foodco Management and Anor v. Go My Way Travel 2001 QCS 291, Wilson J said “In order to succeed on its application for summary judgment the defendant must persuade the court that the plaintiff has no real prospect of succeeding on all or a part of their claim and that there is no need for a trial of the claim or part of the claim … This is a new rule which is similar to rule 24.4 of the Civil Procedure Rules (UK). In Swain v. Hillman (2001) 1 All ER 91 at 92, Lord Wolfe MR said of the UK rule …”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 … I respectfully apply His Lordships observations to rule 293 of the UCPR. [7] What Wilson J said was approved in the Court of Appeal decision of Bernstrom v. National Australia Bank Ltd 2002 QCA 231. See also Queensland University of Technology v Project Construction Pty Ltd (2003) 1QR 259. [8] In his affidavit in response to the application the male respondent has set out some detail of the respondent’s dealings with the applicant in the material transactions, other earlier different transactions where it is not disputed the applicant’s were retained as the respondent’s solicitors and other earlier transactions where the respondents contributed money similarly provided to LawCoast Mortgages Pty Ltd and lent to other borrowers. This material may have relevance to whether a contract of retainer between the applicant and the respondent may be inferred. It may also be relevant in a wider way to the existence of a duty of care. [9] In the final analysis, I am not persuaded the respondent’s case “cannot possibly succeed”, is “so manifestly faulty that it does not admit of argument” or “is such that under no possibility can there be a good cause of action”, to use some of the descriptions adopted by Barwick CJ in General Steel Industries Inc v. Commissioner of Railways NSW (1964) 112 CLR 125. Nor am I persuaded it has no real prospect of succeeding, nor that there is no need for a trial of the respondent’s claim. The application in the Cowan matter is dismissed. Lob Wedge This matter is similar. On 1 August 1997, $70,000.00 was provided to the applicant for investment into a mortgage investment. The trust account receipt for this money is for “matter no. POB970891”. LawCoast Mortgages, Client Forbes Chatham and Associates Pty Ltd, received from Forbes Chatham and Associates Investment Monies Pty Ltd, Recd. by cheque seventy thousand dollars” The money was provided to LawCoast Mortgages Pty Ltd amalgamated with other money and then lent to Nocerino on first mortgage. On 5 August 1997, the Forbes Chatham Superannuation Fund provided a mortgage investment authority to the applicant. On 21 August 1997, an epitome of mortgage was provided by the applicant to Forbes Chatham Superannuation Fund. Nocerino ultimately defaulted and the capital was lost. -- 3 of 4 -- 4 [10] The respondent’s pleading regarding contractual and tortious liability is similar to the Cowan matter. The applicant’s contentions regarding those pleadings on this application are the same as in the Cowan matter. In addition it is contended by the applicant that the respondent has suffered no loss or damage. Rather, the only person who suffered loss or damage was Forbes Chatham and Associates Pty Ltd. The investment of the $70,000.00 was not made by the respondent or any of the former trustees of the superannuation fund, but by an unknown and unrelated entity, Forbes Chatham and Associates Pty Ltd. Reference was made to the amended defence to which no reply has been filed within the time allowed by the rules. It was submitted that by operation of rules 166(1)(b) 168 (1) and 165 (2) the respondent was prevented from giving or calling evidence to prove matters the subject of non admission, for instance, to disprove the allegation that Kim Christie a partner of the defendant acted only for LawCoast Mortgages Pty Ltd with respect to its first mortgage security investments, to prove that the applicant was retained by the respondent trustee, to disprove that the applicant was retained by and acted only for LawCoast Mortgages Pty Ltd, to disprove that the applicant acted only to the extent of providing funds from Ross Forbes and Brian Chatham as trustees of Forbes Chatham and Associates Superannuation Fund to LawCoast Mortgages Pty Ltd for its first mortgage security investments, to prove there was any duty on the applicant to advise Ross Forbes and Brian Chatham as to matters the subject of allegations in paragraph 6 of the further amended statement of claim, to disprove the defendant was acting at all times only as solicitors for LawCoast Mortgages Pty Ltd in the conduct of its first mortgage scheme, to prove that on or about the 1st of August 1997 the applicant received $70,000.00 from any person other than for Forbes Chatham and Associates Pty Ltd for the purpose of providing the money to LawCoast Mortgages Pty Ltd for mortgage investment. [11] An affidavit by Ross Alistair Forbes was read on the hearing of the application. He deposes that Forbes Chatham and Associates Pty Ltd and he and Brian Chatham at the time of advancing the money had been long standing clients of the defendant. The affidavit and its exhibits provides evidence that at the time of the provision of the money, he and Brian Chatham were trustees of the Superannuation Fund, that in June 1990 they retired from that position and Lob Wedge Pty Ltd was appointed trustee, that the $70,000.00 came from the Forbes Chatham Superannuation Fund funds and the defendant was aware of that. [12] For reasons similar to those briefly set out in the Cowan matter, I am not persuaded that the necessary lack of prospects for the respondent’s case is shown and that there is no need for a trial of the proceeding. [13] Regarding the submissions about the lack of a reply to certain allegations of fact in the applicant’s amended defence, I would not give summary judgment on this application on that basis. It is apparent after the hearing on these applications that the pleadings are required to be formulated with much more care and precision than heretofore. So much was conceded by Counsel for the respondents. [14] Applications are dismissed. [15] Costs of the applications are reserved. -- 4 of 4 --