Day & Ors v Markfair Pty Ltd & Ors [2003] QDC 40

State Reporting Bureau Transcript of Proceedings 1 4 th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal offence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for their protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those categories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. DISTRICT COURT [2003] QDC 040 CIVIL JURISDICTION JUDGE ROBIN QC No D4905 of 2001 LESLEY DAY First Plaintiff and CHRISTOPHER FRANCIS DAY and BRIAN WILLIAM OSBORNE and SHERRALYN JEANETTE OSBORNE Second Plaintiff Third Plaintiff Fourth Plaintiff and MARKFAIR PTY LTD TRADING AS INVESTLAND (AUST) ACN 065 542 761 First Defendant and TRAVIS MILLER Second Defendant and REVISED COPIES ISSUED State Reporting Bureau Date: 17 April, 2003 -- 1 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 2 ORDER 1 10 20 30 40 50 60 ROB DAVIS Third Defendant and MICHAEL BYRON Fourth Defendant and MERMAID BEACH RESIDENTIAL PTY LTD ACN 007 406 822 Fifth Defendant and WESTPAC BANKING CORPORATION ACN 007 457 141 Sixth Defendant and AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 Seventh Defendant and GRAEME HART TRADING AS GRAEME HART AND ASSOCIATES Eighth Defendant and REA AUSTRALIA PTY LTD ACN 074 215 357 Ninth Defendant and McCULLOUGH ROBERTSON LAWYERS Tenth Defendant BRISBANE ..DATE 21/03/2003 ORDER CATCHWORDS: Application for summary judgment - UCPR Rule 293 - Trade Practices Act 1974 - limitation period relied upon - Trade Practices Amendment Act No. 1 of 2001, items 20 and 21 - as of 26 July 2001 limitation period increased from three to six years - amendment held to apply to conduct engaged in prior to the amendment for which the three year limitation period had not expired prior to 26 July 2001 - relevant date of conduct was 11 August 1998 - held to apply to would-be plaintiffs whose limitation period had not expired by 26 July 2001 - "period" in amending provision held to refer to "limitation period" - application dismissed. -- 2 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 3 ORDER 1 10 20 30 40 50 60 HIS HONOUR: The applicant is the second defendant, Travis Miller, who finds himself one of numerous defendants in this action instituted by Mr and Mrs Day and Mr and Mrs Osborne in respect of purchases of home units on the Gold Coast through "marketeering" exercises, of which they have repented. Mr Miller is involved only in respect of the Osborne contract. He was apparently made available to the Osbornes in the office of the first defendant but on the basis of his operating independently of the first defendant and indeed all other defendants, as a financial advisor. The statement of claim in paragraph 29.1(n) describes Mr Miller as the representative of the first defendant, but nothing seems to turn on whether or not they are associated for the purposes of the Trade Practices Act which, along with the State Fair Trading legislation, forms the basis of the claims being litigated. The paragraph I mentioned pleads that on the 11th of August 1998 Mr Miller represented to the Osbornes the purchase price it was suggested they pay of $178,900 was fair market value for the property they were looking at, that it would be a profitable investment for them, that it was reasonable to apply a capital growth rate of 10 per cent per annum to the purchase price in analysing the benefit of purchasing the property as an investment, that they would be able to sell it for $262,863.00 after five years with selling costs of $18,002.00, that they'd be able to sell it for $386,232 after 10 years with corresponding costs and capital gains tax of $44,403.00. -- 3 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 4 ORDER 1 10 20 30 40 50 60 The Osbornes plead that acting in reliance on such representations they decided to purchase the property and borrow the necessary funds to assist them. The purpose of the application is to obtain a summary judgment in Mr Miller's favour pursuant to Rule 293 of the UCPR. The basis on which the Osbornes' claim is said to have no real prospect of succeeding is that a limitations defence is available. Given the way in which the matter has been argued, the relevant limitation period is that established in section 82 subsection (2) of the Trade Practices Act. The applicant has pleaded the limitation point - which appears to me to be necessary if he's to have any prospect of success, as until there is such a pleading there's always a potential for a litigant entitled to set up the limitation period to waive it; see Western Australia v. Wardley Australia Limited (1991) 30 FCR 245. The decision of the High Court in that litigation, Wardley Australia Limited v. State of Western Australia (1992) 175 CLR 514, is a leading authority in the present context. The Court indicated at 533-34: "in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action except in the clearest of cases. Generally speaking in such proceedings insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question." -- 4 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 5 ORDER 1 10 20 30 40 50 60 I accept Mr Freeburn's submissions in support of the present application that the present circumstances offer nothing remotely comparable with the uncertainties that characterised the Wardley case. It concerned an indemnity; it was quite unknown whether the indemnity would ever be called on and if so what the relevant amounts of any demand were likely to be. I make that comment notwithstanding Ms Skennar's submission on the other side based on potential which the Osbornes might have to obtain some relief other than section 82 damages from Mr Miller. Mr Freeburn has persuaded me that in this case a crucial date is the 11th of August 1998. On that date, in the Osbornes' case, in any event, Mr Miller perpetrated the conduct attributed to him and they, before the day was out, signed a contract. Part of their claim is that their home unit was worth some $40,000 less than the fair market value as indicated. They are making a case that having committed themselves to the contract they have suffered loss and damage by being committed to prejudice their financial position by exchanging too great an amount of money for the property. An alternative relevant date may be the date of completion of the contract to purchase some weeks later. As it happens it does not particularly matter which date is relevant, so it is convenient to think in terms of the 11th August 1998. The filing date of the claim was the 9th October 2001 which fell outside the longstanding three year limitation period set -- 5 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 6 ORDER 1 10 20 30 40 50 60 out in section 82(2) which provided until the 26th July 2001 that "an action under subsection (1) may be commenced at any time within three years after the date on which the cause of action accrued." In July 2001, by the Trade Practices Amendment Act No 1 of 2001, certain amendments were effected to the principal Act, commencing on the 28th day after Royal Assent which was given on the 28th June 2001. In consequence of item 20 in the Schedule of amendments, subsection (2) came to read "an action under subsection (1) may be commenced at any time within six years after the date on which the cause of action that relates to the conduct accrued". A transitional provision was enacted in item 21 and I quote: "Application of item 20 (1). The amendment made by item 20 applies in relation to conduct engaged in, on or after the commencement of that item. (2) The amendment made by item 20 also applies in relation to conduct engaged in before the commencement of that item but only if the period that: (a) relates to the conduct; and (b) applied under subsection 82 (2) of the Trade Practices Act 1974 before the commencement of that item; had not ended when that item commenced." It is not suggested today that there is any special difficulty in identifying conduct which may be understood as actions taken by Mr Miller. There was reference to the possibility that "conduct" which prima facie refers to what a putative defendant has done extends to include events consequent upon -- 6 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 7 ORDER 1 10 20 30 40 50 60 that conduct, such as entry into a contract by people like the Osbornes. In this case everything happened on the same date, namely 11th August 1998, when I think their cause of action if they had one accrued. There is no question of item 21 (1) applying to extend the limitation period because there was no conduct engaged in after 26th July 2001. So far as item 21 (1) is concerned, Mr Freeburn presented what strikes me as a very subtle argument that (a) and (b) create two separate conditions to be satisfied before the limitation period is extended from three years to six in respect of conduct engaged in before 26th July 2001. The argument is that people in the position of the Osbornes who, because the limitation period has been pleaded, must show they sued in time must show (a) that "the period that relates to the conduct" (of Mr Miller) had not ended on the 26th July 2001 and (b) that the limitation period that applied under section 82(2) immediately before the 26th July 2001 had not expired. He concedes, as I think he had to, that the plaintiffs encounter no problem in respect of (b). His argument comes down to this, that the "period that relates to the conduct" of Mr Miller had ended before 26 July 2001. Although didn't assert it was strong support, he claimed there was some to be found in the judgment of Goldberg J in Software Engineers Australia (NSW) Pty Ltd v. Bonket Pty Ltd V192 of -- 7 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 8 ORDER 1 10 20 30 40 50 60 2002, 19 September 2002. The reference is [2002] FCA 1168, BC200205517, especially at paragraph 7. After setting out item 21 his Honour went on: "[7] The conduct complained of in the statement of claim refers to a period which had not ended when the amendment in item 20 came into operation (the end of that period being around 18 February 2002). Thus the limitation period applicable to the conduct alleged in paragraph 51 to 58 of the statement of claim is six years not three years." Mr Freeburn submits that the statement of his Honour bespeaks a recognition that a plaintiff must show that conduct continued until the relevant date. One can imagine cases where that happens, for example if information published on an internet website remains there. The argument of Mr Freeburn can possibly be supported by the observation that unless there is a separate requirement established by item 21(2)(a), then that subparagraph is otiose and has no useful, or indeed any effect. I think that is a correct observation but in my view the point carries the applicant only a limited distance. No-one expects Parliamentary drafting to be perfect these days and many criticisms could be made of item 21, not the least that it embraces the concept of a "period" which - and here I speak of a general impression - is eschewed by the drafters of the Trade Practices Act in its previous emanations, notwithstanding that (notably in section 82) it does establish what everybody else has been content to call a "limitation -- 8 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 9 ORDER 1 10 20 30 40 50 60 period". Such an expression is widely used in State legislation. See the Queensland Limitation of Actions Act 1974 in particular. In my opinion the significance of the word "period" being picked up in item 21 is that it is effectively an acknowledgement that the provisions are dealing with a limitation period, making the use of the term "period" particularly pertinent. Despite my invitation, neither side was able to assist with references to any second reading speech, explanatory memorandum or other information that might assist in the interpretation of item 21. My approach to it is what I think the common sense (and I hope not too ham-fisted) one, that a decision was made and implemented to harmonise the somewhat anomalous limitation period in section 82 with others in force in the various Australian jurisdictions; that was done by making it clear that in respect of conduct engaged in henceforth the limitation period would be six years and that in respect of conduct in the past the three year limitation period would be extended to six for would-be plaintiffs whose three years had not run out by the 26th of July 2001. If Mr Freeburn were right it seems to me that the word "period" in item 21.2 should be "periods". He is clearly asserting that two different periods are relevant, one applicable to each of the conditions he says have to be satisfied. -- 9 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 10 ORDER 1 10 20 30 40 50 60 So far as Justice Goldberg's paragraph 7, from which Ms Skennar also claims support, is concerned, I note the transposition that his Honour has engaged in in so far as in commenting on legislation which refers to "the period that relates to the conduct", he comments on it in terms of "conduct (that) relates to a period". As I read paragraph 7 his Honour is construing item 21 in the same way as I would construe it. He refers to the end of the period he is referring to being around 18th February 2002. That must be a reference to the three years expiring on the 18th February 2002, the starting date of which (as I read the judgment) has to be the unspecified date in February 1999 when Mr Bonket resigned from his employment, which had given him considerable dissatisfaction in respects identified in his pleading. The respondents in that case had submitted to his Honour that on the resignation any loss and damage crystallised for purposes of the Trade Practices Act and manifested itself in February 1999 following the resignation. So far as Justice Goldberg is referring to a period ending around the 18th February 2002, he is not referring to a "period that relates to conduct" but to a limitation period that expired three years after a particular commencement date. The last observation I would make is that it appears to me a use of language both inelegant and quite inappropriate to -- 10 of 12 -- 21032003 T33/FLC4 M/T CMS33/2003 (Robin DCJ) 11 ORDER 1 10 20 30 40 50 60 refer to a period over which conduct occurs as a "period that relates to the conduct". That seems to me a use of English so clumsy that one would not suspect parliamentary drafters to succumb to it. My view is that "period" in item 21 (2) is to be understood as if it read "limitation period" or something similar. While Justice Goldberg in the end resorted to the High Court's decision in Wardley and the lack of clarity about the situation, there is no need for me to take that course here. The limitation period here relevantly expired three years from 11th August 1998, by which time the amended section 82 (2) had come into effect so that the Osbornes gained the benefit of an additional three years within which to sue. I dismiss the application. ... HIS HONOUR: The second defendant's application is dismissed with costs and I make a special order that in the event of it being determined hereafter that the third and fourth plaintiffs are statute barred in respect of the Fair Trading Act then they are to pay the second defendant's costs of the application in so far as they related to the Fair Trading Act. ... ----- -- 11 of 12 -- D. T/ M/T () 12 1 10 20 30 40 50 60 -- 12 of 12 --