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[2026] QCA 48
respondent. Appeal dismissed. The appellants are to pay the respondent's costs of the appeal ([75]).
The Court of Appeal upheld the decision to strike out the McFauls' amended statements of claim because they did not clearly set out the facts supporting the claims about the mortgage and loans. The pleadings were unclear about which entities borrowed money, how the loans related to the mortgage, and what events allegedly repaid or extinguished debts. The Court also held that affidavits could not fill gaps in the pleadings and that the appellants had already had several opportunities to amend. The appeal was dismissed, but the result did not prevent a further attempt to plead the case. The appellants had to pay the respondent's appeal costs.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
2,325 words · generated 08/10/2026
Margaret and John McFaul appealed a District Court decision striking out amended statements of claim in proceedings against Green & White Freightlines Pty Ltd. Their claim concerned a mortgage over land at Evergreen Court, Parkwood, and sought relief that included declarations about whether loans were secured by the mortgage and whether the mortgage should be discharged.
2 cited instruments linked from this judgment.
The judgment records that the McFauls were registered owners of Lots 3 and 5 Evergreen Court when they executed a mortgage in favour of Green & White Freightlines on 14 February 2013 ([5]). The mortgage defined the “Principal Sum” as $300,000 plus additional money advanced to the mortgagor, and “Secured Money” to include money owing to the mortgagee by the mortgagors, related entities and certain other persons under or in respect of the mortgage and associated arrangements ([5]-[6]). John McFaul later assigned his interest in the property to Margaret, who remained the registered owner subject to the mortgage ([7]).
The claim began with a request for “[r]emoval of a mortgage” ([8]). An earlier statement of claim was struck out on 2 May 2025, with leave to replead if mediation was unsuccessful ([8]). The McFauls then filed amended pleadings in September and November 2025. The Court of Appeal refers particularly to the 6 November and 17 November statements of claim. It also notes that the 17 November document had not been authorised by the order granting leave, although no point was taken about that at the District Court hearing ([10], [19]).
The pleadings advanced several themes: that the mortgage was not properly executed under s 127 of the Corporations Act 2001 (Cth); that certain loans were corporate debts rather than Margaret McFaul’s personal liabilities; that some debts had been extinguished by offsets involving “boat equity”; that the respondent had no creditor interest in some loans; and that the mortgage had been retained or used for an improper purpose ([12], [17], [21], [28]-[33]). The Court did not decide the substantive truth of those allegations. It decided whether the statements of claim adequately pleaded material facts.
The appeal was dismissed. The appellants were ordered to pay the respondent’s appeal costs ([75]).
The central problem was that the pleadings did not give a coherent account of the material facts said to support the requested relief. The Court identified uncertainty about the companies mentioned, whether they were related entities, which entities had borrowed, and how those loans were said to be secured by the mortgage ([14]). It also found that the alleged offsets involving “boat equity” were not explained sufficiently to identify what transaction had discharged which debt ([17], [30]).
The 6 November pleading referred to several companies and loans, but did not make clear why some companies mattered or whether it was disputed that loans to related entities could be secured by the mortgage. The Court observed that, if the case were simply that no loans had been made to the McFauls or related entities, the references to other companies and their corporate histories would not assist in understanding that case ([14]). It also noted that the pleading described the loans as “corporate in nature” without clearly stating the significance of that characterisation to the mortgage claim ([14], [18]).
The 17 November pleading had related difficulties. It did not identify Loans 1-4 within that pleading, even though it relied on them as the basis for asserting that the respondent lacked a contractual connection to the underlying debts ([27]). It alleged that the mortgage purported to secure obligations owed to third parties, but did not identify the mortgage provisions said to produce that result ([28]). The alleged “constructive misuse” of the mortgage was expressed as a conclusion without material facts identifying the misuse ([32]). The pleaded reliance on a bankruptcy partition and offsets was also unexplained, including how the alleged events affected Margaret McFaul’s position ([33]).
The Court restated the function of a pleading: it must contain the material facts on which the party relies and state a cause of action known to law, or at least one that is sufficiently arguable. It must tell the respondent the essence of the case it has to meet ([50]). The Court therefore rejected the argument that affidavits and the statement of claim could be read together to make the case clear. A statement of claim does not perform its function if the respondent or judge must piece the case together from affidavits filed for other purposes ([54]).
The Court also rejected the complaint that the McFauls lacked a fair opportunity to clarify their claims. They had been given several opportunities to plead their case, the primary judge considered a document delivered shortly before the hearing, and another opportunity to amend remained after the strike-out order ([56]-[57]). The Court concluded that the problem was not that the merits could not be heard, but that the appellants had not yet articulated those merits clearly enough in a pleading ([60]).
This judgment does not purport to establish a new general rule about pleading or alter the applicable procedural framework. It applies established pleading principles to the particular documents before the Court. The judgment identifies rr 149 onwards of the Uniform Civil Procedure Rules 1999 (Qld) as setting out pleading requirements, and states the core requirement that a party plead all material facts relied on ([50]). It also discusses r 171, under which a pleading may be struck out where it discloses no reasonable cause of action or has a tendency to prejudice or delay a fair trial ([41], [45]-[52], [64]).
The judgment’s practical contribution is its application of those principles to pleadings that referred to many alleged events but did not adequately explain how those events formed a recognised claim for relief. The Court treated a pleading as deficient where it left the defendant unable to understand the case to be answered, even though other material might contain further details ([26], [50], [54]).
The Court also applied the established proposition, drawn from Turner v Bulletin Newspaper Co Pty Ltd, that where the form of a pleading is defective, a court can strike it out entirely and is not bound to rewrite it for the plaintiff ([38]-[39]). That does not mean a court must always strike out an entire pleading whenever some paragraphs are defective. Doyle JA said that, for the 6 November pleading, partial strike-out and amendment could have been considered, but striking out the whole pleading and allowing repleading was also open ([48]). For the 17 November pleading, the nature of the deficiencies made partial strike-out less suitable ([52]).
The decision also confirms the judgment’s stated approach to appellate review of procedural orders. It describes appellate courts as exercising particular caution because appeals from practice and procedure decisions can cause delay and expense. The judgment says intervention is available only if an error of principle is shown and the decision will work substantial injustice ([43]). On the facts, the Court found neither.
At [50], Doyle JA said a pleading must contain “a statement of all the material facts on which the party relies” and those facts must plead a cause of action known to law, or at least one that is sufficiently arguable. In plain English, the claim document itself has to explain the important facts and how they support the legal claim. A list of conclusions, unexplained references or general accusations is not enough.
At [54], the Court said the respondent and court should not have to “piece together” the case from affidavits. This means supporting documents do not replace a properly organised statement of claim. The pleading has to stand on its own as an account of the case to be answered.
At [28], the Court examined the assertion that the mortgage purported to secure obligations owed to third parties. It found the pleading did not identify the mortgage provisions that supposedly produced that effect, and that the basis for saying the mortgage was void or voidable was unclear. The point was not that the Court resolved the construction of the mortgage in the respondent’s favour. Rather, the pleading did not explain the factual and legal path from the alleged third-party loans to the requested relief.
At [32], Doyle JA described “constructive misuse” as a conclusion unsupported by material facts. In plain English, labelling conduct as misuse does not explain what the respondent did, when it did it, or how that conduct supports the claim.
At [60], the Court said the difficulty was the appellants’ ability to articulate the merits “with passable clarity”. That passage explains why the Court considered the strike-out orders compatible with a future merits determination: the orders did not decide the underlying loan and mortgage disputes, but required the case to be stated adequately first.
The judgment is relevant where a statement of claim refers to multiple transactions, companies, loans or legal theories but does not explain how those matters connect to the relief sought. Here, the pleadings referred to several entities, different alleged loans, corporate liability, a mortgage, offsets, a bankruptcy-related document, authority to execute, and alleged misuse. The Court found that the pleadings did not sufficiently connect those matters through material facts ([14], [26]-[36]).
It is especially relevant where a party relies on descriptions such as “corporate in nature”, “no consideration”, “void or voidable”, or “constructive misuse” without setting out the facts that give those descriptions legal significance. The Court’s point was that a pleading must explain what happened and why those events support the cause of action, rather than merely state a conclusion ([28], [31]-[33]).
The judgment also addresses cases in which a party expects affidavits, earlier pleadings or other documents to fill gaps in the current statement of claim. The Court said the pleading itself must tell the defendant the essence of the case ([50], [54]). It is also relevant where repeated amendments have been allowed but the revised documents remain unclear. The Court considered the number of opportunities the appellants had already received when rejecting their procedural fairness ground ([56]-[57]).
The decision does not determine the merits of the particular allegations about the McFaul mortgage. For example, Doyle JA expressly made no further comment on whether the s 127 argument was arguable because the issue had not been addressed in submissions ([16]). The precedent concerns pleading sufficiency and appellate review, not a final determination of the underlying mortgage or loan disputes.
The judgment text supplied here does not identify any later courts that considered McFaul v Green & White Freightlines Pty Ltd. Because the judgment was delivered on 20 March 2026, and the supplied text contains no subsequent case references, the treatment of this decision by later courts cannot be determined from this source.
The judgment itself relies on earlier authorities. It applies Taiepa v State of Queensland for the proposition that strike-out applications concern the adequacy of the pleading ([37]). It quotes and applies Turner v Bulletin Newspaper Co Pty Ltd for the power to strike out a defective pleading in its entirety without rewriting it for the plaintiff ([38]-[39], [48]). It cites Karlsson v Griffith University as an example of that principle being applied ([39]).
For the appellate approach to interlocutory procedural orders, the judgment cites Sedgwick Australia Pty Ltd v JLOC Super Pty Ltd, Chan v Goldenwater LDL Pty Ltd and McEwan v Commissioner of Taxation ([43]). It also applies Beale v Government Insurance Office (NSW) to explain that reasons need not be lengthy or elaborate, provided they disclose the findings and why they were reached ([63]-[64]). The judgment reports that the primary judge referred to Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd regarding whether deficiencies in pleading material facts could be cured by particulars ([65]).
These references show the authorities the Court used to frame its reasoning. They do not establish how courts after this decision have treated McFaul.
The Court did not decide whether the mortgage was in fact improperly executed under s 127 of the Corporations Act 2001 (Cth), or whether the alleged lack of authority was a legally arguable ground. Doyle JA expressly declined to comment further because no submissions had been directed to that question ([16]). That issue therefore remained unresolved by this appeal.
The judgment also did not determine whether the loans existed as alleged, whether they were made by the respondent or third parties, whether any borrowing entities were related entities under the mortgage, or whether the mortgage secured any particular debt. Those issues were left for any adequately pleaded proceeding; the appeal concerned the form and sufficiency of the pleadings ([14], [18], [28]-[36]).
Likewise, the Court did not determine what “boat equity” meant as a matter of fact, whether any offset occurred, or whether a bankruptcy partition had the legal effect asserted in the 17 November pleading. It found that the relevant events and their consequences were not adequately explained in the pleadings ([17], [30], [33]).
There is also an apparent difference in property description within the supplied materials. The judgment’s background identifies Lots 3 and 5, while Schedule B refers to Lots 118 and 119 ([5], Schedule B). The reasons do not resolve that inconsistency. It should therefore be treated as a feature of the supplied text, not as a finding that the descriptions refer to the same land.
Finally, the decision does not set out the content of any later pleading or determine whether the appellants ultimately formulated a sufficient case. It says they retained an opportunity to replead ([48], [52], [56]-[57]). The appeal outcome is therefore procedural: it upholds the strike-out orders while leaving the underlying merits undecided.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have it checked by a qualified Australian lawyer.
Source: Queensland Judgments (Supreme Court Library Queensland) (www.queenslandjudgments.com.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF QUEENSLAND
CITATION: McFaul v Green & White Freightlines Pty Ltd [2026] QCA 48
PARTIES: MARGARET LORNA McFAUL / (first appellant) / JOHN FREDERICK McFAUL / (second appellant) / v / GREEN & WHITE FREIGHTLINES PTY LTD / ACN 009 734 249 / (respondent)
FILE NO/S: Appeal No 5750 of 2025 / DC No 47 of 2025
DIVISION: Court of Appeal
PROCEEDING: General Civil Appeal
ORIGINATING COURT: District Court at Southport – Unreported, 19 November 2025 (Prskalo DCJ)
DELIVERED ON: 20 March 2026
DELIVERED AT: Brisbane
HEARING DATE: 11 March 2026
JUDGES: Boddice JA, Doyle JA, Crowley J
ORDERS: The appeal is dismissed. The appellants pay the respondent’s costs of the appeal.
CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – DISCLOSING NO REASONABLE CAUSE OF ACTION OR DEFENCE – where the appellants filed a statement of claim seeking removal of a mortgage on Lots 3 and 5 Evergreen Court Parkwood – where that statement of claim was struck out on 2 May 2025, with leave to replead – where the appellants filed an amended statement of claim on 5 September 2025 – where the respondent applied to have the claim and statement of claim struck out – where the appellants provided a further statement of claim on 6 November 2025 – where leave was granted at the hearing the next day to rely on the 6 November statement of claim – where the respondent amended its application, such application being heard on 19 November 2025 – where a further amended statement of claim was served on 17 November 2025 – where the further amended statements of claim were struck out because they disclosed no reasonable cause of action or had a tendency to prejudice or delay the fair trial of the proceedings – whether the primary judge erred in striking out the further amended statements of claim / Corporations Act 2001 (Cth), s 127 / District Court of Queensland Act 1967 (Qld), s 118(2)(b) / Uniform Civil Procedure Rules 1999 (Qld), r 171 / Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430; (1997) 25 MVR 373, applied / Chan v Goldenwater LDL Pty Ltd (2021) 7 QR 566; [2021] QCA 87, applied / Karlsson v Griffith University [2022] FCA 591, cited / McEwan v Commissioner of Taxation [2025] QCA 48, applied / Sedgwick Australia Pty Ltd v JLOC Super Pty Ltd [2024] QCA 218, applied / Taiepa v State of Queensland [2025] QCA 36, applied / Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69; [1974] HCA 25, applied
COUNSEL: The second appellant appeared on his own behalf and on behalf of the first appellant / A P McKinnon for the respondent
SOLICITORS: The second appellant appeared on his own behalf and on behalf of the first appellant / Small Myers Hughes Lawyers
BODDICE JA: I agree with Doyle JA.
DOYLE JA: This is an appeal from the Order of a District Court judge striking out the amended statement of claim in proceedings commenced by the appellants, Mr and Mrs McFaul, against the respondent, Green & White Freightlines Pty Ltd.
The application filed by the appellants in this Court assumes that leave is required to bring this appeal. That is not correct. There is a right of appeal conferred by s 118(2)(b) of the District Court of Queensland Act 1967 if the judgment relates to a claim for or relating to property that has a value equal to or more than the Magistrates Court jurisdictional limit. On the face of the various editions of the statements of claim which have been filed by the appellants, this condition is satisfied.
Grounds of Appeal
Background
“(b) all money owing, contingently or otherwise, to the Mortgagee by the Mortgagor, the Debtor, a Related Entity of either the Debtor or the Mortgagor, or another person under or in respect of this Mortgage, any Agreement or Collateral Security, including interest, and money payable under any indemnity given in this Mortgage, any Agreement or Collateral Security.”
The expression “Related Entity” is given the meaning of that term in the Corporations Act 2001 (Cth).
Subsequently Mr McFaul assigned his interest in the property to Mrs McFaul such that she is now the registered owner of the land subject to that mortgage.
In circumstances which are presently unexplained, on 6 February 2025 the appellants filed in the District Court a “Claim” the sole relief sought being “[r]emoval of a mortgage on Lots 3 and 5 Evergreen Court Parkwood Q”. A statement of claim was filed in support of that claim. That statement of claim was struck out by Jackson KC DCJ on 2 May 2025 with the appellants being given leave to replead, if (as occurred) the ordered mediation was unsuccessful. His Honour reserved the costs.
On 5 September 2025 the appellants filed an amended statement of claim. By application filed 31 October 2025 the respondent applied to have that statement of claim struck out and further applied to have the claim struck out. That application was to be heard on 7 November 2025.
On the eve of that hearing the appellants provided a further amended statement of claim (that is one dated 6 November 2025). Leave was given the next day by Holliday KC DCJ for the appellants to rely upon that further amended statement of claim and the respondent amended its application to refer to it. That amended application was heard on 19 November 2025 leading to the orders the subject of this appeal. In the interim, however, the appellants delivered yet another further amended statement of claim (one dated 17 November 2025). For convenience I will refer to these last two documents as the 6 November statement of claim and 17 November statement of claim respectively. No leave was given to file the 17 November 2025 statement of claim though no point seems to be taken in that regard at the hearing on 19 November 2025.
The 6 November Statement of Claim
This is a relatively short document. I have set out its substantive provisions in Schedule A to these reasons.
It can be discerned from this pleading that the appellants wish to contend:that the mortgage, by reason of not being executed in accordance with s 127 of the Corporations Act 2001 (Cth), is void or voidable: [2.3].that the loans which are identified as Loans 1-4 were “corporate in nature” for which Mrs McFaul was not liable with, in some instances, further information being given as to the loans being paid to companies in which the appellants were “formerly involved” but in respect of which it is said Mrs McFaul was not liable. [3.2], [5.2].additionally, it is asserted that the first and fifth of the loans had been “extinguished via offsets” some further indication of which is provided in the schedule set out in the pleading: [3.1].
The relevance of paragraph 4 and the foundation for the order set in paragraph 5.4 is each elusive.
The pleading leaves unclear why reference is made to JMF Holdings Pty Ltd, JFM Civil Contracting and JFM Contracting at all: [1.1]-[1.2]. The respondent, it is said, alleges the loans were made to the appellants or their related entities: [1.3]. It seems to be accepted that Loans 1-4 were made to some corporate entities: [3]. Three of the loans it seems were made to JFM Holdings or JFM Contracting: [3]. None is alleged to have been made to JMF Civil Contracting. It is not made clear whether it is controversial that, if those borrowing entities were related entities of the appellants, the loans to them would be secured by the mortgage. This lack of clarity is compounded by the circumstance that in paragraph 3.2 it is said that the loans, though made to corporate entities, were “not enforceable against” Mrs McFaul “personally”. If the appellants’ case was simply that no loans had been made to the appellants or any related entities, these references to other (non-related) corporate entities, the appellants’ historical role in them and the fact that the loans were made to corporate entities would be immaterial. But the pleading leaves unstated the case being made as to:The significance of JMF Civil Contacting;Whether loan 1 was made to a corporation and if so which corporation, or otherwise what is meant by it being ‘corporate in nature’;Whether the identified corporations are related entities of either Mr or Mrs McFaul; orIf it is accepted that they were related, whether the mortgage would capture and secure those loans.
The pleading might be thought to be relevant to show that there is a dispute between the parties given that the appellants contend that the respondent’s case is that it is sufficient if the loans were made to entities which are “related entities” of the appellants but even that dispute is not elucidated in the pleading.
The contention of a contravention of s 127 of the Corporations Act seems to be on the basis that Mr Baird lacked authority to bind the respondent when he signed the mortgage on its behalf. No submissions were directed below or on appeal as to whether this is an arguable contention and for that reason I make no further comment on it. But in any event, the pleading is obscure in that it leaves open whether the signature in fact was that of Mr Baird at all given that paragraph 2.1 refers to the signature as “purporting to be that of” Mr Baird. Again, the nature of the case being advanced is obscure.
17 November Statement of Claim
This document is said to have been filed pursuant to the leave granted by Holliday KC DCJ on 7 November 2025. That would seem to be a misapprehension of her Honour’s order which, relevantly provided that the appellants would have leave to file “a further amended statement of claim dated 6 November 2025” which is plainly a reference to the document previously filed.
Nonetheless, this too is a relatively short document the substantive parts of which is set out in Schedule B to these reasons.
As can be seen, by this document the appellants:First, forecast at least, that the prayer for relief in their “claim” seeking removal of the mortgage is to be understood as seeking a declaration of the kind they describe: [1.3].Assert that Loans 1-4 were not advanced by the respondent but rather by third-party entities in respect of which the respondent is said to have no interest: [2.1], [2.2] and [4.1]. Aligned to this is the suggestion in [2.3] that the mortgage purports to secure obligations owed to those third parties though the basis of this is not identified in the pleading (by identifying terms of the mortgage or otherwise).There is reference to Loan 5 having been extinguished by a process described as being “offsets”: [1.2], [7a]; somehow involving “boat equity”: [4.1].The contention of the mortgage being “retained” by the respondent for asset protection purposes as expanded upon in paragraph 4.2 is elusive. It is perhaps aligned with the statement that the relief sought is grounded on a cause of action identified as “constructive misuse of the mortgage for purposes unrelated to any enforceable obligation”: [1.2].The whole of paragraph 5 is obscure.Paragraph 6 again raises the contention that Mrs McFaul is not liable for loans advanced to corporate entities for corporate purposes and that the respondent’s contention to the contrary is misconceived.Again assert that non-compliance with s 127 of the Corporations Act leads to the mortgage as void or voidable. The difficulty of the use of the word ‘purported’ to describe Mr Baird’s signature has been overcome but otherwise the contention is much the same as before. The relief sought seeks to expand this to the associated loan deeds without the bases for that appearing in the pleading.Claim similar relief as in the 6 November statement of claim for the conduct of forensic examinations.
This pleading contains a further passage (which I have not set out) under a heading “Schedule of Rebuttals to Defendant’s Outline of Argument”. It takes the form of a submission rather than a pleading and, put at its highest, might be said to have some remote relevance to identifying that there is a controversy between the parties as to certain things which justify the appellants seeking declaratory relief.
A similar analysis can be made of this proposed pleading as for the 6 November statement of claim.
Paragraphs 1.1 and 1.3 are directed to identifying modifications to the relief which the appellants seek to make to their claim. Not a lot turns on the inclusion of these matters in the pleading.
Striking out Pleading as a Whole
Strike out applications are concerned with the adequacy of the pleading: Taiepa v State of Queensland [2025] QCA 36 at [23]. To strike out a pleading it is not necessary that every paragraph of it be objectionable.
In Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69, Jacobs J propounded at 97:
“Where the form of pleading is defective the Court can certainly strike it out entirely and is not bound to reframe it for the plaintiff’s benefit.”
“There is no need to go through the document to see whether some parts are unobjectionable for, where the form of pleading is defective, as Ms Karlsson’s statement of claim clearly is, a court is entitled to strike it out in its entirety and has no obligation to reframe it for the applicant’s benefit: Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69 at 97 (Jacobs J).”
Primary Judge’s Reasons
The primary judge focused attention initially on the application to strike out the 6 November statement of claim but in a number of places noted that submissions had been made to the effect that the 17 November statement of claim ought to be struck out as well.1
After reciting the various submissions made by the parties, her Honour stated as follows:2
“I accept that the amended statement on the 6th of November 2025 and the one dated 17 November 2025 are an improvement on what was before Judge Jackson insofar as it no longer seeks to make reference and annex evidence. But it still, unfortunately, does not clearly articulate the material facts which are required to formulate a complete cause of action known to law in a coherent way. Those facts might be otherwise littered throughout the material. The problem with the statement of claim and in particular, the amended statements of claim, are that they simply do not do that. I consider that to be the case for the further amended statement of claim filed 7 November 2025, the document that was filed 14 November 2025, and the final document which was filed 17 November 2025.
If nothing else, the amended statements of claim, in my view, have a tendency to prejudice or delay a fair trial of the proceedings and on that basis, they ought to be struck out pursuant to r 171 (1) (a). In my view, having regard to all of these factors, it is unnecessary to determine whether… it should be struck out pursuant to r 171(1)(b), in that it has a tendency to prejudice or delay the fair trial of the proceeding. It is, in my view, unnecessary to determine whether rr 171(1)(a) or (d) are satisfied.”
Approach of Appellate Court
Ground 1
The first ground is that it is contended the primary judge “erred in dismissing the Statement of Claim without properly considering the pleaded causes of action”.
The primary judge resolved that the pleading or part of the pleading ought to be struck out because it disclosed no reasonable cause of action or had a tendency to prejudice or delay the fair trial of the proceedings.
6 November statement of claim
Having regard to this pleading, in my view, the primary judge correctly described it as one which has a tendency to prejudice or delay the fair trial of the proceeding or that parts of it disclose no reasonable cause of action.
I have in the discussion above identified many respects in which this version of the pleading leads to that conclusion.
It might be possible to excise, by strike out, parts of this pleading granting the appellants leave to replead those parts struck out. That is a course which would have been open to the primary judge to have considered. But, it was equally open in my view, for her Honour to take the view she took, that the whole pleading should be struck out granting the appellants leave to replead. That is a course which I would take. Far from the appeal establishing an error of principle which will work a substantial injustice to the appellants, in my view, no such error is established.
17 November statement of claim
My conclusion in relation to this pleading is the same. Indeed its failure to plead material facts which in any way identify the Loans makes this draft perhaps further from one which discloses a reasonable cause of action.
The requirements for a pleading are set out in the UCPR commencing at r 149. The essence of a pleading is that it must contain “a statement of all the material facts on which the party relies” and those facts must plead a cause of action known to law (or at least a sufficiently arguable one). The object of doing so includes affording the defendant an opportunity to know the essence of the case that it has to meet.
In my view, the primary judge correctly described it as one which has a tendency to prejudice or delay the fair trial of the proceeding or that parts of it disclose no reasonable cause of action.
Given the nature of the deficiencies in this pleading it was probably not possible to strike out parts granting leave to amend those parts removed. The whole pleading was correctly struck out. Again, far from the appeal establishing an error of principle which will work a substantial injustice to the appellants, in my view, no such error is established.
Ground 2
The second ground is that “the judge refused to consider the appellants’ Affidavit and Amended Statement of Claim together, thereby failing to take into account relevant material and compounding the error”.
No error is revealed by this ground. The function of the statement of claim is to itself plead the material facts upon which the claimed causes of action depend so as to notify the respondent of the case it is to answer. That function is not fulfilled if it is necessary for the respondent or the court to piece together the appellants’ case by reference to affidavits filed in support of an application to amend or to oppose the application to strike it out.
Ground 3
The third claimed error is that “the dismissal was procedurally unfair, as the appellants were not afforded adequate opportunity to amend or clarify their pleadings before the order was made”.
This ground is not made out. As the history outlined above reveals the appellants had been given a number of opportunities to plead their case. On the hearing of the matter on 19 November 2025, the primary judge had regard to the proposed amended pleading which had been delivered only two days earlier. Moreover, having struck out the 6 November and the 17 November statements of claim, the primary judge afforded the appellants yet another opportunity to attempt to plead their case.
They have been afforded more than an adequate opportunity to do so.
Important Questions of Principle and Interests of Justice
The fourth and fifth grounds of appeal are directed to the contention that the decision of the primary judge raises an important question of principle concerning the proper application of the strike out powers under the UCPR and that the interests of justice require appellate intervention to prevent substantial prejudice to the appellants who would otherwise be denied the opportunity to have their claims determined on the merits.
Neither of these grounds is made out. Indeed, they did not assert to be grounds of error but rather grounds supporting this Court’s intervention in the event that some error below had been identified.
In my view, no error of principle let alone an important question of principle concerning the powers to strike out under r 171 of the UCPR arises. Moreover, no aspect of the primary judge’s ruling will prevent the appellants from having an opportunity “to have their claims determined on the merits”. The present difficulty has been in their ability to articulate those merits with passable clarity.
Other Matters
At the hearing of this appeal the appellants handed up a further document which was identified as an “Opening Submission” which identified other possibly contended for errors by the primary judge. I will deal with them briefly.
First, it is submitted the primary judge did not, as she was required to do, identify any “missing material fact” or “defective paragraph” or explain “why amendment or particulars could not sure any issue”.
Reasons however need not be lengthy or elaborate: Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430 at 443. The essential requirement in a case of a challenge to a pleading as in this case, is that the reasons reveal the findings and why they were reached.
The reasons, albeit brief, identify the absence of the material facts in the pleading as the vice and that this fell within the operation of r 171(1)(a) and (d) of the UCPR. That is sufficient, given her Honour’s previous recitation of the submissions made to her which identified the paragraphs of the pleadings of concern.
In a passage which I have not extracted above, the primary judge also referred to Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252 for the proposition that deficiencies to state material facts could not be cured by particulars. As to the possibility of amendments curing the deficiencies, that possibility was mentioned by the primary judge and accommodated by affording the appellants a further opportunity to amend their pleading.
Moreover, the result is correct. The matter has been fully aired in this Court and it cannot be said that there has been any injustice to the appellants from the orders made.
Second, it is contended that there was an error constituted by ‘pre-judgment’. There is no foundation for this and it is rejected.
Third, it is submitted the primary judge did not afford the appellants ‘procedural fairness’. This is advanced on a few bases.One is that the appellants were given no notice that the 19 November 2025 hearing would be treated as a strike out application. This is contradicted by the terms of Judge Holliday’s Order of 7 November that both gave the respondent leave to amend its application and ordered that that amended application “be listed for hearing on 19 November 2025”.Another is that the primary judge told the appellants to sit and listen but then (it is submitted) did not return to hear the appellants. That contention is not made out from a review of the transcript. The primary judge did suggest to Mr McFaul that the best thing was for him to listen to what was being put against him by counsel for the respondent.4 Despite this, submissions were made by Mr McFaul in the course of that counsel’s submissions. However, at the conclusion of those submissions the primary judge called on Mr McFaul. He handed up a ‘brief’ (an address) and the primary judge read it. There were then submissions made which followed.
Costs
Finally, the appellants challenge the costs order that was made.
This Court has even greater reluctance to interfere with orders of costs made at first instance. It is unnecessary to dwell on that in this case.
The pleadings, in my opinion, were rightly struck out and in the ordinary course the respondent was entitled to its costs of its applications to have the pleadings struck out. The appellants have been afforded a further additional opportunity to plead their case. The proceedings have not progressed at all since the filing of the claim and the claim as filed seeks relief which the appellants do not press. In my view, there is no arguable basis to overturn the order for costs which was made below.
Similarly, as the appellants have been wholly unsuccessful on this appeal, in my view, they ought to pay the costs of this appeal.
Conclusions
The appeal is dismissed;
The appellants pay the respondent’s costs of the appeal.
SCHEDULE A
6 November Statement of Claim
1. Background
1.1The plaintiffs were formerly involved in corporate entities including JFM Holdings Pty Ltd, JFM Civil Contracting Pty Ltd, and JFN Contracting Pty Ltd, all now in liquidation.
1.2Margaret McFaul resigned as director of JFM Contracting Pty Ltd on 3 September 1999 and held no directorship or management role in the other entities.
1.3The defendant alleges that five loans were made to the plaintiffs or their related entities and secured by a mortgage over Lots 3 and 5 Evergreen Court, Parkwood QLD.
2 Mortgage Execution and Authority
2.1The mortgage relied upon by the defendant was executed with a signature purporting to be that of Daniel Francis Baird, allegedly on behalf of Green & White Freightliners Pty Ltd.
2.2The plaintiffs assert that Mr Baird lacked authority to bind the defendant and put the defendant to strict proof of
Board resolutions authorising the mortgage;
ASIC records confirming signatory authority;
Internal governance documents validation execution.
2.3The plaintiffs contend that the mortgage was not executed in accordance with section 127 of the Corporations Act 2001 (Cth) and is therefore void or voidable.
3 Loan Schedule and Rebuttal
Loan Date Amount Plaintiff’s Position
1 30/06/1999 $157,000.00 Repaid via $199,000.00 boat equity; corporate in nature; Margaret not liable
2 18/05/2010 $385,000.00 Paid to JFM Contracting Pty Ltd; corporate loan; Margaret not liable
3 11/02/2013 $30,000.00 Paid to Boral for JFM Contracting account; corporate loan; Margaret not liable
4 07/08/2013 $138,071.00 Paid to NAB against JFM Holdings overdraft; corporate loan; Margaret not liable
5 2022 $14,973.22 Refunded by Land Tax Department; offset via boat equity; Margaret not liable
3.1The plaintiffs assert that Loans 1 and 5 have been extinguished via offsets.
3.2Loans 1, 2, 3 and 4 were made to corporate entities and are not enforceable against Margaret McFaul personally.
4 Conduct and Strategic Conflation
4.1The defendant ceased engagement with Bell Legal and retained SMH Law.
4.2The plaintiffs assert that this transition coincided with a shift in narrative from corporate debt recovery to personal liability claims, suggesting tragic conflation of obligations.
5 Relief Sought
The plaintiffs claim:
5.1A declaration that Loans 1 and 5 have been extinguished via offsets.
5.2A declaration that Loans 2, 3 and 4 are corporate in nature and not personally enforceable against Margaret McFaul.
5.3A declaration that the mortgage and associated loan deeds are void or voidable due to lack of authority, improper execution, and absence of consideration.
5.4An order for forensic examination of the mortgagee signature and execution authority.
5.5Costs and any further orders the Court deems just.
SCHEDULE B
17 November Statement of Claim
1 Overview and Clarification of Relief
1.1The plaintiffs seek declaratory and ancillary relief concerning the validity and enforceability of a mortgage registered over Lots 118 and 119 Evergreen Court, Parkwood QLD, in favour of the defendant.
1.2The relief sought is grounded in the following pleaded causes of action:
Absence of contractual nexus between the defendant and the underlying loans (Loans 1-4)
Improper execution and lack of authority under the Corporations Act 2001 (Cth)
Absence of consideration
Extinguishment of Loan 5 via offset
Constructive misuse of the mortgage for purposes unrelated to any enforceable obligation
1.3The plaintiffs do not seek “removal” of the mortgage in the abstract, but rather a declaration that the mortgage is not securing any debt, it is void or voidable and an order for its discharge, consistent with equitable and statutory principles.
2 Attribution of Loans and Lack of Contractual Nexus
2.1Loans 1-4 were advanced by third-party entities, not the defendant. No assignment, novation, or contractual instrument has been produced to support the defendant's claim of creditor status.
2.2The defendant's Schedule of Claims attributes these loans to itself without evidentiary foundation. The plaintiffs plead that this attribution is a procedural construct unsupported by legal substance.
2.3The mortgage purports to secure obligations owed to third parties. In the absence of a valid contractual nexus between the defendant and the plaintiffs, the mortgage is void or voidable.
3 Improper Execution and Lack of Authority
3.1The mortgage was executed by a solicitor, Daniel Francis Baird, allegedly on behalf of the defendant. The plaintiffs plead that Mr Baird lacked authority to bind the defendant and put the defendant to strict proof of:
Board resolutions authorising the mortgage
ASIC records confirming signatory authority
Compliance with section 127 of the Corporations Act 2001 (Cth)
3.2The mortgage was not executed by a director or secretary of the defendant and lacks a signature panel consistent with statutory requirements.
4 Consideration and Constructive Use
4.1The plaintiffs plead that no consideration was provided by the defendant in respect of Loans 1-4. Loan 5, the only loan arguably advanced by the defendant, has been extinguished via offset, including boat equity.
4.2The mortgage was retained by the defendant for asset protection purposes which is no longer required and is now being used to leverage unrelated monetary claims. This constitutes a misuse of process and renders the mortgage unenforceable and of no financial benefit for the plaintiffs to hold. Any attempt to recover corporate loans must be through proper liquidation processes.
5 Bankruptcy Partition and Offset
5.1In the alternative, the plaintiffs rely on the Bankruptcy Partition dated 19 July 2017, which records $750,000.00 owed to the defendant and offsets the entirety of the alleged loan exposure.
5.2The Partition was prepared by Bell Legal, then acting for the defendant, with full knowledge of the loan history. It extinguishes any residual claims under Loans 1-4 and Loan 5.
6 Personal Liability of Margaret McFaul
6.1Margaret McFaul was not a director, guarantor, or signatory to the relevant loan instruments. The loans were advanced to corporate entities for corporate purposes.
6.2The plaintiffs plead that any attempt to enforce the mortgage against Margaret McFaul personally is misconceived and contrary to the principles of separate legal personality and the absence of privity.
7 Relief Sought
The plaintiffs seek:
A declaration that Loan 5 has been extinguished via offsets
A declaration that Loans 1-4 are corporate in nature and not personally enforceable against Margaret McFaul
A declaration that the mortgage and associated loan deeds are void or voidable due to lack of authority, improper execution, and absence of consideration
An order for the discharge of the mortgage over Lots 118 and 119 Evergreen Court, Parkwood QLD
An order for forensic examination of the mortgage execution authority
Costs and any further orders the Court deems just
See T1-3, lines 43 to 46. ↩
T1-5 line 46 to T1-6 line 14. ↩
See Sedgwick Australia Pty Ltd v JLOC Super Pty Ltd [2024] QCA 218 at [11]; Chan v Goldenwater LDL Pty Ltd (2021) 7 QR 566 at [15]; McEwan v Commissioner of Taxation [2025] QCA 48 at [14]-[15]. ↩
T1-10 lines 36 to 37; T1-13 lines 47 to 48. ↩
T1-21 line 23. ↩
McFaul
Green & White Freightlines Pty Ltd [2026] QCA 48
(1997) 48 NSWLR 430
(1997) 25 MVR 373
(1974) 131 CLR 69
Appeal dismissed. The appellants are to pay the respondent's costs of the appeal ([75]).
Two of the loans are said to have been “extinguished via offsets”. This presumably means the debt has been discharged. In relation to Loan 1, it is said that it has been “repaid via $199,000.00 boat equity”. Just what this means cannot be discerned from the pleading. Loan 5 is identified as “refunded by Land Tax Department” which does not suggest a loan at all, but in any event, is said to be “offset via boat equity” which again is at best obscure.
These deficiencies in the formulation of the pleading mean, in my view, that this pleading is one which through absence of material facts fails to disclose a reasonable cause of action and more particularly is so vague and obscure as to have a tendency to prejudice or delay the fair trial of the proceedings.
Paragraph 1.2 is a statement of the bases upon which relief is sought which either stands or falls with the pleading of those bases elsewhere in the statement of claim.
A difficulty with this pleading is that it assumes that it is to be read against the background of the preceding pleading, or indeed other matters, when that is not an appropriate form of pleading. The consequence is that the pleading fails to plead even the most basic material facts for the possible causes of action.
For example, paragraph 2.1 refers to “Loans 1-4” but what they may be is nowhere identified in this pleading.
Paragraph 2.3 asserts that the mortgage “purports” to secure obligations owed to third parties. It is unclear whether that is an effect which the appellants contend the mortgage has. The provisions which give rise to that effect are not identified. The mortgage is not identified. It is contended that the mortgage is “void or voidable” but the basis of this is unclear. The only basis attributed is the absence of any “valid contractual nexus” between the appellants and the respondent. The mortgage, however, would appear to meet the description of affording that “contractual nexus”. This is so unless the only basis for denying that nexus is said to be the improper execution which is pleaded in a following paragraph. That, however, does not appear to be the limit of the allegation made on the face of the pleading.
Loan 5 is alleged to be one arguably made by the respondent: [4.1]. The facts which form the foundation of that allegation are not pleaded.
Paragraph 4.1 refers to Loan 5 being extinguished via offset, “including boat equity”. What is meant by boat equity, or when the transaction took place which effects the set off are not pleaded. Moreover, the event giving rise to the extinguishment is pleaded in a non-exhaustive way which leaves obscure just what other extinguishing events are relied on.
The allegation of the respondent having provided “no consideration” for Loans 1-4 is presumably on the basis that the loans were made by some third party. But what is not pleaded is how such a challenge to the loans touches upon the validity of the mortgage.
The whole of paragraph 4.2 is directed to a contention which is so bereft of material fact as to be one, if it persisted, which would undoubtedly have a tendency to prejudice or delay the fair trial of the proceedings. As mentioned, it is suggested to amount to a cause of action for “constructive misuse of the mortgage for purposes unrelated to any enforceable obligation”. The misuse is not identified, nor what is meant by the expression ‘constructive misuse’. What is pleaded is a conclusion, not material facts.
The whole of paragraph 5 is obscure. Doing the best one can, it would seem to be a contention that in an earlier bankruptcy petition prepared on its behalf, the respondent asserted that it was owed $750,000, I assume, by Mr McFaul. The petition somehow is said to extinguish “any residual claims” under Loans 1-5 in a way which is unexplained. No facts are pleaded to identify the basis of this or how Mr McFaul’s bankruptcy or the petition giving rise to it (if it did) affect Mrs McFaul’s liability. If persisted in, this allegation would both be irrelevant to any reasonable cause of action and have a tendency to prejudice or delay the fair trial of the proceedings.
Paragraph 6 of this pleading raises issues similar to those which arise in respect of paragraph 3 of the 6 November statement of claim.
And finally, as already mentioned, the whole of paragraph 8 is irrelevant.
Again, these deficiencies in the formulation of the pleading mean, in my view, that this pleading is one which through absence of material facts fails to disclose a reasonable cause of action and is so vague and obscure as to have a tendency to prejudice or delay the fair trial of the proceedings.
Fourth, it is said the primary judge failed to consider relevant matters (which seems to be a reference to the affidavit material provided by the appellants). But the primary judge in the passage I have quoted above explicitly refers to the facts “littered throughout the material”. Her Honour did not fail to consider them, but determined, correctly, that they did not cure the difficulties with the pleadings.
The other topics raised in the Opening Statement have been sufficiently dealt with above in relation to the grounds of appeal.