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[2015] QSC 284
General information, not legal advice.
Supreme Court of Queensland
2015-10-12
Burns J
Original judgment source is linked above.
PROCEDURE - SUPREME COURT PROCEDURE - QUEENSLAND - PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS - SUMMARY JUDGMENT - where the plaintiff contends that a binding agreement for the purchase of shares in a company came into being - where the plaintiff claims that the defendants repudiated the agreement for the sale of shares and seek damages accordingly - where the defendants contend that no binding agreement ever came into existence and that all that can be pointed to is an "agreement to agree" - where the defendants further contend that, if a binding agreement did come into effect, it expired or, alternatively, it was repudiated by the plaintiff or the plaintiff was otherwise not ready, willing and able to complete it - where the defendants have applied for summary judgment against the plaintiff pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld) - whether the plaintiff has no real prospect of succeeding on all or a part of the plaintiff's claim - whether there is no need for a trial of the claim or the part of the claim
PROCEDURE - SUPREME COURT PROCEDURE - QUEENSLAND - PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS - PLEADING - STATEMENT OF CLAIM - where the defendants requested further and better particulars of the plaintiff's statement of claim - where the plaintiff provided some particulars - where the defendants contend that the statement of claim does not identify what obligations under the agreement were breached - where the defendants argue the damages claimed do not comply with r 155 of the Uniform Civil Procedure Rules 1999 (Qld) - where the defendants, in the alternative to summary judgment, seek to strike out parts of the plaintiff's statement of claim pursuant to r 171 of the Uniform Civil Procedure Rules 1999 (Qld) - whether the pleadings have a tendency to prejudice or delay the fair trial of the proceeding - whether the plaintiff failed to identify the obligations breached - whether the plaintiff sufficiently pleaded the claim for damages
PROCEDURE - COSTS - SECURITY FOR COSTS - POVERTY - LACK OF MEANS - where the plaintiff company owns no real property and has limited share capital - where the sole director and shareholder of the plaintiff has been bankrupted on two previous occasions - where the defendants seek security for costs against the plaintiff pursuant to r 670 of the Uniform Civil Procedure Rules 1999 (Qld) - whether there is reason to believe the plaintiff will not be able to pay the defendants' costs
Uniform Civil Procedure Rules 1999 (Qld), r 171, r 293, r 670.
Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41, cited
Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114, cited
Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256; [2006] HCA 27, cited
Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600; [1982] HCA 53, cited
Cassatone Nominees P/L v Queenslandwide House & Building Reports P/L & Ors [2008] QCA 102, cited
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; [1982] HCA 24, cited
Darter Pty Ltd v Malloy [1993] 2 Qd R 615, cited
Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; [2005] QCA 227, cited
Dey v Victorian Railway Commissioners (1949) 78 CLR 62; [1949] HCA 1, cited
General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69, cited
Hensley v Reschke (1914) 18 CLR 452; [1914] HCA 88, cited
Kostopoulos v G E Commercial Finance Australia P/L [2005] QCA 311, cited
KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189, cited
LCR Mining Group Pty Ltd v Ocean Tyres Pty Ltd [2011] QCA 105, cited
Marek v Australasian Conference Association Pty Ltd [1994] 2 Qd R 521
Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72, cited
Moffatt Property Development Group P/L v Hebron Park P/L [2009] QCA 60, cited
Nowrani Pty Ltd v Brown [1989] 2 Qd R 582, cited
Petersen v Maloney (1951) 84 CLR 91; [1951] HCA 57, cited
Platinum United II Pty Ltd v Secured Mortgage Management Ltd (in liq) [2011] QCA 162, cited
Qld Pork P/L v Lott [2003] QCA 271, cited
Robert Bax & Associates v Cavenham Pty Ltd [2011] QCA 53, cited
Royalene Pty Ltd v Registrar of Titles & Anor [2007] QSC 59, cited
Royalene Pty Ltd v Registrar of Titles [2007] QSC 59, cited
Sheehan v Zaszlos [1995] 2 Qd R 210; [1994] QCA 145, cited
Spencer v The Commonwealth (2010) 241 CLR 118; [2010] HCA 28, cited
The Commercial Bank of Australia Ltd v G H Dean & Co Pty Ltd & Anor [1983] 2 Qd R 204
Walford v Miles [1992] 2 AC 128, cited
Weemah Park Pty Ltd v Glenlaton Investments Pty Ltd [2011] 2 Qd R 582; [2011] QCA 150, cited
West v Blakeway [1841] EngR 591; (1841) 133 ER 940, cited
Westpac Banking Corporation v Hughes [2012] 1 Qd R 581; [2011] QCA 42, cited
Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290; [2005] WASCA 106, cited
A J H Morris QC, with R W Frigo, for the defendants/applicants
O'Keefe Mahoney Bennett Solicitors for the defendants/applicants
[1] In this proceeding, the plaintiff claims that the defendants repudiated an agreement for the sale of shares in a company, KF & S Pty Ltd, and seeks damages accordingly. The defendants maintain that the plaintiff has no real prospect of succeeding on such a claim and that there is no need for a trial. They have accordingly applied for summary judgment pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld) or, failing that, they seek to strike out parts of the statement of claim[1] as well as security for their costs.[2]
[2] In snapshot, the defendants contend that no binding agreement ever came into existence and that, at best for the plaintiff, all that can be pointed to is an "agreement to agree" which is unenforceable as a matter of law. The defendants further contend that, if a binding agreement did come into effect, it expired when the plaintiff failed to give notice of its intention to progress the agreement to a formal contract of sale within the time prescribed by the agreement to do so or, if notice is ultimately held to have been given within time, that the plaintiff repudiated the agreement or was otherwise not ready, willing and able to complete it.
[3] In response, the plaintiff says that a binding agreement containing all of the essential terms for the purchase of the shares in KF & S came into being, and that notice was given by it within the time prescribed by that agreement to do so. In the alternative, the plaintiff argues that, if it is ultimately found that notice was not given within time, strict compliance with the requirements of the agreement in that regard was not insisted on by the duly authorised agent of the defendants and that, in any event, the defendants are estopped in the circumstances of this case from taking advantage of those requirements to the detriment of the plaintiff.
[4] The agreement which the plaintiff alleges came into existence and further alleges was subsequently repudiated by the defendants was in the form of a deed, dated 18 March 2014 and styled "Formal & Binding Heads of Agreement". The circumstances leading to the execution of this deed, as well as subsequent events, was the subject of affidavit evidence from both sides of the record. Although there are significant and unresolved issues of fact on the face of that material, what follows is intended to provide a brief overview of the relevant dealings and, in the main, it is taken from what can be reliably discerned from the contemporaneous documents.
[5] Mr Cameron Davis is the sole director of, and shareholder in, the plaintiff. At all times relevant to this proceeding, he represented the interests of the plaintiff.
[6] Until 10 September 2014 at least, the defendants collectively held all of the issued share capital in KF & S, a company that traded as a going concern in the design, manufacture, distribution and sale of sheepskin footwear under the name, "UGG Australian Made Since 1974". The third defendant, Mr Watts, was its sole director.
[7] Mr Gerard Cassar is a commercial real estate agent and business broker. Mr Davis had dealt with Mr Cassar in the latter's capacity as an agent since at least 2000, and had purchased property from sellers for whom Mr Cassar was acting.
[8] Prior to 8 January 2014, Mr Cassar made contact with Mr Davis to enquire whether he would be interested in purchasing KF & S. Mr Davis expressed interest and, on 9 January 2014, executed a confidentiality deed on behalf of the plaintiff to allow for the provision to it of financial and other information regarding the company. Once executed, Mr Davis emailed the deed to Mr Cassar. On 1 March 2014, Mr Davis met with Mr Cassar, as well as Mr and Mrs Watts, to discuss the purchase of the shares in KF & S, and this appears to have been the only face-to-face meeting to take place between the parties. Indeed, apart from an email from Mrs Watts to Mr Davis the following day, at all other times Mr and Mrs Watts dealt with Mr Davis through Mr Cassar.
[9] On 3 March 2014, Mr Davis forwarded an email to Mr Cassar in which he confirmed the plaintiff's "interest in the outright purchase of the company" and stated that he was "strongly motivated to conclude [an] agreement to purchase". The email included the broad scope of an offer containing details of what Mr Davis proposed by way of purchase price, due diligence, time for settlement and the structure of the acquisition. It seems that discussions then ensued between Mr Davis and Mr Cassar that culminated in Mr Davis emailing to Mr Cassar a heads of agreement document on 13 March 2014, which document had been prepared by him and signed on behalf the plaintiff. On receipt, Mr Cassar forwarded it to Mrs Watts for her consideration.
[10] On the afternoon of 15 March 2014, Mr Cassar sent an email to Mr Davis which detailed "changes" that the defendants wished to make to the heads of agreement. These changes included provision for a deposit, as well as a timetable for the selling process from the beginning of due diligence to settlement of the purchase. Mr Davis responded by email that evening. In it, he expressed concern about whether payment of a deposit was necessary, whether the period of time to be allowed for due diligence would be adequate and whether there would be sufficient time to "agree the contract terms". Then, with reference to the heads of agreement, he said this:
"The agreement I prepared for us to sign I did myself as I don't want to get my guys geared up again before we have 'a deal'. It is a really simple doc and I apologise for that but i think it shows we are totally committed.
Too much detail in this principal agreement will take too long to agree. It can be described in the contract."[3]
[11] Although it is not clear from the affidavit material, it is likely that further discussions were had between Mr Davis and Mr Cassar because, on 17 March 2014, Mr Davis emailed to Mr Cassar an amended version of the heads of agreement. That version still did not contain any provision for the payment of a deposit, but it had been amended to change the date of the agreement to 18 March 2014, and to specify the "last permissible day" for the performance of due diligence - 60 days from the date of the agreement - as well as the last date for completion of the contract - 31 July 2014. Again, it was signed by Mr Davis on behalf of the plaintiff. On 18 March 2014, this revised form of heads of agreement which, as I have already observed, was in the form of a deed, was executed by Mr and Mrs Watts, on their own behalf and on behalf of the first defendant.
[12] In the executed deed,[4] the defendants are collectively described as the "Owner" and the plaintiff is described as the "Buyer". It recites that the "Buyer wants to investigate and contract the purchasing of the Company from the Owner on agreed terms" and that the "Owner agrees to grant Buyer an exclusive dealing period with respect to the Company to enable Buyer to carry out its investigations (due diligence) in regard to the Company". The expression "Contract of Sale" is defined to mean:
"the Contract for the sale and purchase of the Company to be entered into by Buyer and the Owner, specifying an aggregate consideration of AUD$4.7 million plus estimated AUD$1 million SAV[5] (on the basis the sale of the Company is the supply of a going concern within the meaning of the GST Law)."[6]
The term, "Purchase", is also defined. It means "the proposed purchase of the Company by Buyer from the Owner".
[13] Turning then to the operative provisions, the following are presently relevant:
- (a) by clause 2.1, the defendants granted to the plaintiff an "exclusive right" for the duration of the "exclusivity period"[7] to "make such investigations in regard to the Company as it decides in its absolute discretion" and "deal with the Owner with respect to the Purchase the Company";
- (b) by clause 2.2, the defendants agreed not to negotiate with any other persons with respect to the company, market KF & S for "sale or lease" or grant or dispose of any interest in the company during the "Exclusivity Period";
- (c) clause 2.3 provided:
The exclusivity period will expire on the earliest to occur of:
(a) the date of execution of the Contract of Sale by Buyer (or its nominee) in respect of the Company;
(b) the date Buyer notifies the Owner that Buyer does not wish to proceed with the proposed Purchase; (failed due diligence) or
(c) 60 days from the date of this Deed, last permissible day.";
If Buyer gives the Owner the notice contemplated by clause 2.3(b) or the period in which clause 2.3(c) expires, then this Deed is terminated and the parties will have no further liability to each other, except any pre-existing breach. Upon that occurring, Buyer must promptly give to the Owner all Confidential Information it has obtained from the Owner.";
3.1 The parties acknowledge and agree that the confidentiality provisions (clause 5), exclusivity provisions (clause 2) and the commercial terms of the proposal outlined in Schedule A are intended to be legally binding on the parties.";
(f) clause 4 was concerned with the "agreement for sale". It provided:
If the Buyer is satisfied with the results of its investigations relating to the Company, and gives written notice to that effect to the Owner, the parties agree to enter the Contract of Sale and agreed to prepare and settle the Contract of Sale.
The parties acknowledge that the Contract of Sale will contain provisions required to reflect the commercial agreement between the parties with respect to the Purchase substantially in accordance with the commercial terms set out in "schedule A";
If the Buyer is satisfied with the results of its investigations relating to the Company, and gives written notice to that effect to the Owner, the parties agree to enter the Contract of Sale and agreed to prepare and settle the Contract of Sale.";
(a) must be in writing addressed to the intended recipient at the address shown below or last notified by the intended recipient to the sender;
(b) must be signed by a person duly authorized by the sender; and
(c) will be taken to have been given when delivered, received or left at the above address. If delivery or receipt occurs on a day when business is not generally carried on in the place to which the notice is sent, or is later than 4pm (local time), it will be taken to have been duly given at the commencement of business on the next day when business is generally carried on in that place.";
(h) clause 7 provided that "this Deed contains the entire agreement of the parties with respect to its subject matter" and "sets out the only conduct relied on by the parties and supersedes all earlier conduct by the parties with respect to its subject matter.";
(i) clause 8.1 dealt with amendment. It provided that the "Deed may be amended only by another deed executed by all parties";
(j) clause 10 provided:
10. 1 No failure to exercise and no delay in exercising any right, power or remedy under this Deed will operate as a waiver. Nor will any single or partial exercise of any right, power or remedy preclude any other or further exercise of that or any other right, power or remedy."; and
"1. Transaction: Contract of Sale whereby the Buyer purchases the Company and all assets.
[14] It was common ground on the hearing of the application that the "exclusivity period" under clause 2.3 of the deed expired on Friday, 16 May 2014. That of course meant that, if the plaintiff wished to proceed with its purchase of the shares in KF & S, it needed to give written notice to the defendants that it was satisfied with the results of its investigations relating to the company by no later than that date. If the plaintiff failed to do so then, by clause 2.4, the deed came to an end.
[15] After the deed was executed, the plaintiff commenced the process of due diligence with respect to KF & S. This appears to have been done through the use of the plaintiff's staff and consultants. For this purpose, a range of financial information was requested by Mr Davis from Mr Wood, a financial officer employed by the defendants, and Mr Cassar was copied into many of these communications.
[16] According to Mr Davis, in the month leading up to 15 May 2014, he told Mr Cassar "on numerous occasions" that the plaintiff would be proceeding with the purchase of the shares in KF & S. He deposed that late on the afternoon of 15 May 2014 he telephoned Mr Cassar to advise that the plaintiff "wanted to proceed with the purchase" and that there was "a letter confirming" that fact. Mr Davis also deposed that he had prepared that letter himself on 15 May 2014. He then deposed:
"Mr Cassar responded to me with words to the effect that Mr Cassar was in Sydney on 16 May 2014, and that it would be suitable if I made the letter confirming the plaintiff wanted to proceed with the purchase of the Shares pursuant to the Share Sale Agreement available for collection from Mr Davis' office on the Gold Coast, and Mr Cassar would collect the Notice when he had returned to the Gold Coast on 19 May 2014."[8]
[17] Again, according to Mr Davis, he told Mr Cassar that he "would do as he directed". He deposed to signing the notice on the following day (16 May 2014) and made it available for collection at his office. It was addressed to Mr and Mrs Watts, and read as follows:
"It is with much pleasure that I confirm our commitment to proceed with the purchase of your business. Please proceed to provide us with draft contracts for perusal and subsequent execution.
I sincerely look forward to working with you to conclude the transaction."[9]
[18] On Monday, 19 May 2014, Mr Davis emailed a copy of the notice to Mr Cassar and, then, followed it up with a text message to Mr Cassar to advise that the notice had been emailed. Mr Davis deposed to the original notice being collected from his office by 23 May 2014.
[19] Most of what I have just set out, however, is in serious dispute. Apart from arguments which were advanced on the hearing of the application as to the improbability of Mr Davis' account, the defendants relied in particular on an affidavit that had been drawn by Mr Cassar who swore that he knew nothing about the provision of a notice until he received the email from Mr Davis attaching a copy of it on the afternoon of 19 May 2014. Indeed, he described what Mr Davis deposed as having been said between them during a telephone conversation late on the afternoon of 15 May 2014 to be a "recent invention".[10]
[20] Mr Cassar did, however, depose to having spoken with Mr Davis on two occasions by telephone on 15 May 2014. He said that, during these conversations, he emphasised to Mr Davis that "tomorrow is the deadline" and that Mr Davis needed to "get your letter in if you are proceeding". Mr Cassar also deposed that he spoke again with Mr Davis on 16 May 2014 to enquire whether the plaintiff would be proceeding. He said that he again stressed to Mr Davis the importance of providing notice that day "if you are in". Other than those conversations, Mr Cassar swore that Mr Davis never told him that the plaintiff wished to proceed with the purchase or that he had prepared a notice to that effect.
[21] As already mentioned, Mr Cassar swore that he did not become aware of the notice until he received it by email on the afternoon of 19 May 2014 and that he did not attend the office of Mr Davis on any occasion to collect the original notice. He deposed that, after he received that email, he telephoned Mr Davis and said words to this effect:
"It is too late. The time to have given the Notice was Friday the 16th May 2014. You were aware that the Notice was to be given on 16 May 2014 but you did not give the Notice that day. I will send your email to the Second and Third defendants and whether they will enter into contract negotiations with you is a matter for them. They do not have to however. The agreement is now over. There are now other interested parties. The arrangement with you is no longer exclusive."[11]
[22] The affidavit evidence relied on at the hearing then proceeds to describe how the defendants continued to negotiate with the plaintiff regarding the terms of a contract for the sale of the shares in KF & S. From the plaintiff's perspective, the evidential story is one where, having given a complying notice under the deed, it proceeded to the next phase under contemplation by the parties - the negotiation of the other terms of the contract. For the defendants, the versions advanced are to the effect that they continued to treat with the plaintiff, but not in an exclusive way. As such, both sides of the record maintain that they acted consistently with their respective cases regarding the giving (or failure to give) notice under the deed in the subsequent dealings with the other party until, it seems, 27 June 2014 when the differences between them came to a head.
[23] In particular, on 21 May 2014, Mrs Watts emailed to Mr Cassar a "brief list of the main points for the contract" and Mr Cassar, in turn, emailed it to Mr Davis.[12] Among the points there listed is that the contract "is to be settled no later than 31/07/2014" and that the price for the business is "as per heads of agreement". Another point listed is provision for a five per cent deposit "upon signing". According to Mr Davis, he had a telephone conversation with Mr Cassar two days later during which he told him that he was "satisfied with the terms that the defendants wished to have included in the formal contract".[13] Mr Cassar denies that any such conversation took place.[14] In any event, on the day in question (23 May 2014), Mr Davis forwarded an email to Mr Cassar attaching a document which was described by him as "draft conditions for the draft contract".[15]
[24] On 30 May 2014, Mrs Watts sent an email to Mr Cassar attaching a share sale agreement.[16] In the email, Mrs Watts wrote:
"Please find attached the finalised Share Sale Agreement which is now an amalgamation of both contracts. As per our discussion we would require the agreement be executed by Friday 6th June or earlier."
Mr Cassar forwarded Mrs Watts' email, together with the attachment, to Mr Davis on the same day. It is noteworthy that the completion date specified in the draft Share Sale Agreement was 1 August 2014, one day after the last day for settlement of the sale under the deed.
[25] On 17 June 2014, a member of the plaintiff's staff emailed a letter from Mr Davis to Mr Cassar in which "requests for amendment" to the share sale agreement were made.[17] It is not clear on the affidavit material whether those requests were ever considered by the defendants; Mr Cassar accepts that he received the email[18] but does not say whether he passed it on to the defendants. Be that as it may, on 27 June 2014, Mrs Watts sent an email to Mr Cassar which he, in turn, forwarded to Mr Davis. In it, Mrs Watts stated:
"We wish to formally advise Cameron that the contract must be signed with the deposit paid by 1pm 2nd July. Failure to do so will result in the business being placed on the open market by end of day on 2nd July. It has been clear to you all along that there are two other parties interested in business. We feel that we have been fair and reasonable with Cameron and expected to finalise by now. Although we would like to see Cameron with the business we cannot wait any longer without jeopardising our overall position.[19]
[26] Mr Davis does not depose to having done anything in response to the deadline set out in this email. Rather, he deposed to having a telephone conversation with Mr Cassar on what I gather to have been the morning of 3 July 2014. However, at 12.08 pm on that day, Mr Cassar sent an email to Mr Davis in the following terms:
"I wish to inform you as you Heads Of Agreement has expired and your Exclusivity Period has laps. Your offer to purchase the Business is no longer valid, as no contract has been signed, the Watts are moving on with other parties who are interested to also purchase the Business."[20]
[27] After expressing his "shock" at this turn of events in an email to Mr Cassar later that day, Mr Davis continued to request financial information from Mr Cassar with respect to KF & S. According to Mr Davis, he was advised by Mr Cassar on 4 July 2014 that the defendants had sold the shares to a "third party for a higher price" but, whatever the position was regarding price, Mr Cassar sent an email to Mr Davis on 8 July 2014 in which he stated that no further information will be provided "as your agreement has ended" and confirmed that the "business is under contract with another party".[21]
[28] Undeterred, it seems, by this news, on 23 July 2014, Mr Davis delivered a letter dated 15 July 2014 to Mr Cassar as "agent for Kerry and Larry Watts". In it, Mr Davis confirmed that the plaintiff remained "keen to proceed to acquire KF & S". A copy of the Share Sale Agreement which had been submitted to the plaintiff on 30 May 2014, and was executed by the plaintiff on 15 July 2014, was enclosed. Handwritten amendments had been made to the form of that agreement but the only substantial change was to alter the provision concerning the time for payment of the deposit of $235,000 - from payment "contemporaneously with the purchaser's execution" to payment within two business days of the vendor's execution of the contract.
[29] Lastly, it appears that the shares in KF & S were sold by the defendants to another buyer by 10 September 2014.
[30] Before turning to a consideration of the application for summary judgment, it is important to perhaps state the obvious, that is to say, that there are serious credit issues between, in particular, Mr Davis and Mr Cassar. Neither was cross-examined on the hearing of this application, and nor would such a course have been appropriate given the summary nature of this application and the significant number of facts in dispute. It follows that those facts remain unresolved and, to the extent that any of those facts bear on the defendants' application for summary judgment, the court must proceed with that in mind. Importantly, the plaintiff is to receive the benefit of the doubt, at least, that Mr Davis' version on affidavit, for example, will be made out at trial.
[31] The test to be applied by the court on an application made by a defendant for summary judgment is to be found in UCPR r 293(2). It provides:
(a) the plaintiff has no real prospect of succeeding on all or a part of the plaintiff's claim; and
(b) there is no need for a trial of the claim or the part of the claim;
the court may give judgment for the defendant against the plaintiff for all or the part of the plaintiff's claim and may make any other order the court considers appropriate."
[32] The court must apply the words found in this rule, and is not to use other language to define the test[22] but, quite obviously, a clear case will be required before the court will be moved to summarily terminate a proceeding.[23] The issue is whether there exists a real, as opposed to a fanciful, prospect of success.[24] Rule 293 must, however, be applied in the context of the overriding purpose of the UCPR to "facilitate the just and expeditious resolution" of the matter in dispute.[25] It is certainly not a power "to be exercised lightly"[26] and, in that respect, the following observations made by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde are often cited:
"Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome."[27]
[33] It is sometimes said, based on the dictum of Jones J in Queensland Pork Pty Ltd v Lott,[28] that an applicant for summary relief has the onus of establishing a prima facie entitlement to judgment - that is to say, that the plaintiff has no real prospect of succeeding on all or part of the claim and that there is no need for a trial of the claim or the part of the claim - but, once that has been established, the evidentiary onus shifts to the respondent to upset that prima facie entitlement. Although it is uncontroversial that there will be a shift in the evidentiary onus,[29] it should not be thought that such an onus requires something in the way of complete proof of a plaintiff's case at this stage of the proceeding.[30] It is enough to point to the existence of evidence which, if accepted, makes the prospect that the plaintiff will succeed at trial a real one.
[34] For the defendants, it was argued that the parties had not reached consensus as to the terms on which a sale of the shares in KF & S might proceed. It was submitted that, at best for the plaintiff, the deed was a "lockout" agreement by which the defendants agreed not to negotiate with any third party whilst the plaintiff undertook due diligence and the parties negotiated for the sale of the shares in the company. Thus, it was submitted, the deed was merely an agreement to agree, and unenforceable for that reason. To support those arguments, clauses 4.1, 4.2 and Schedule A were referred to. Clause 4.1 makes explicit that the parties agreed "to enter the Contract of Sale and agreed to prepare and settle the Contract of Sale" and clause 4.2 contained an acknowledgement by the parties that the Contract of Sale will "contain provisions required to reflect the commercial agreement between the parties... substantially in accordance with the commercial terms set out" in Schedule A. The "language" of Schedule A, and especially clause 4 thereof, was submitted to further support the argument that the parties did not intend to be bound unless and until a contract of sale was entered into. Put another way, the defendants contended that the deed fell within the third class of case discussed in Masters v Cameron[31] - there was no intention to make a concluded bargain unless and until a formal contract was executed.
[35] For the plaintiff, it was argued that the deed constituted a binding agreement between the parties. In particular, it was submitted that the deed contained all of the essential terms for a binding agreement - the parties, the subject-matter, the price and the time for performance - and that clause 4 of Schedule A was a provision for the benefit of the plaintiff which could be waived in its absolute discretion. Thus, the plaintiff argued that the deed fell within the first class of case discussed in Masters v Cameron - the relevant intention was to be immediately bound to the terms contained in the deed but, at the same time, to have the terms restated in a form which would have a "fuller or more precise but not different" effect.[32]
[36] The courts will not enforce an agreement to agree.[33] Such agreements fall within the third class identified in . However, a determination as to which of the three classes of case an agreement falls "depends upon the intention disclosed by the language the parties have employed" as well as what can be "inferred from their conduct". This is a question of fact. Accordingly, although the subsequent conduct of the parties to a contract may generally not be referred to in construing its terms, such conduct may be considered in order to determine whether final agreement was reached. Evidence of the circumstances surrounding the entry into an agreement may also be admissible if the language used is ambiguous or susceptible of more than one meaning. It follows that it will not always be the case that the question whether a binding agreement was formed is solely one of construction of the words used in that agreement.
[51] For the above reasons, I am not satisfied that the defendants have established that the plaintiff has no real prospect of succeeding on its claim or that there is no need for a trial. The application for summary judgment will be dismissed.
[52] The defendants apply for an order that paragraphs 7 and 8 of the Statement of Claim be struck out pursuant to UCPR r 171.
[53] By that rule, the court is empowered to strike out a pleading, or any part of pleading, that (relevantly) has a tendency to prejudice or delay the fair trial of the proceeding or is otherwise an abuse of process of the court. It has been held that the court's discretion to do so should only be exercised in a clear case[49] but, nonetheless, where a pleading is "difficult to follow or objectively ambiguous or creates difficulty for the opposite party insofar as the pleading contains inconsistencies", it is liable to be struck out because "it can be said to have a tendency to prejudice or delay the fair trial of the proceeding".[50]
[54] The paragraphs in question purport to plead the alleged repudiation of the deed by the defendants and the suffering of loss by the plaintiff respectively. They are in these terms:
"7. In breach of the Share Sale Agreement,[51] the defendants:
(a) purported to terminate the Share Sale Agreement;
(b) evinced an intention not to perform the Share Sale Agreement, by entering into a contract for the sale of the Shares to an unrelated third party;
(c) thereby repudiated the Share Sale Agreement; and
(d) failed to complete the Share Sale Agreement by 31 July 2014, or at all.
[55] A request for particulars of both paragraphs was made on behalf of the defendants. On 30 January 2015, the plaintiff supplied further and better particulars with respect to paragraph 7 but not with respect to paragraph 8, asserting in the case of paragraph 8 that the pleading was, in effect, adequate in its current form.
[56] A review of the particulars supplied with respect to paragraph 7 reveals that they fail to identify which obligations contained within the deed executed on 18 March 2014 were allegedly breached by the defendants. Even if such obligations were identified in the particulars, the specific breaches relied on must be expressly pleaded: UCPR r 150(1)(a). Paragraph 7 is otherwise in my view an unsatisfactory pleading of a critical component of the plaintiff's case. It is thick with legal conclusion but thin in the pleading of the material facts on which the plaintiff relies. Such facts must be pleaded so as to prevent the defendants from being taken by surprise: UCPR r 149(1). Although a party is free to plead a conclusion of law, it must support any such conclusion with material facts: UCPR r 149(2). Paragraph 7 fails to do so. It will be struck out with leave to replead.
[57] The refusal to supply particulars with respect to paragraph 8 is puzzling. UCPR r 155(4) requires a party claiming damages to specifically plead any matter relating to the assessment of damages that, if not pleaded, may take an opposing party by surprise. Quite apart from anything else, paragraph 8 fails to plead any material facts to support the allegation that the shares in KF & S had (or have) a value that is $2 million greater than the purchase price under the deed. Paragraph 8, too, will be struck out with leave to replead.
[58] The defendants also apply for an order pursuant to UCPR r 670 that the plaintiff give security for their costs. The court may only do so if satisfied of the existence of one or more of the circumstances specified in UCPR r 671. In deciding whether to make an order, the court may have regard to any of the matters set out in UCPR r 672.
[59] In a case like this where the plaintiff is a corporation,[52] the court may order the plaintiff to give security if there is reason to believe it will not be able to pay the defendants' costs if ordered to pay them: UCPR r 671(a).[53]
[60] To my mind, there is a compelling case for the making of an order for security for costs_._ The plaintiff is a $100 corporation with no asset backing. No attempt has been made on behalf of the plaintiff to place before the court any evidence to suggest that it will be capable of satisfying a judgment for costs. Its sole director and shareholder is Mr Davis. He was made bankrupt in 1989 and was discharged in 1992. In 2010 he was again made bankrupt, although that bankruptcy was annulled in the following year. Two other corporations in relation to which Mr Davis was a director and the secretary were, at the time of the hearing of the application, under external administration.
[61] The plaintiff opposes the making of an order for security for costs. In that regard, it was submitted that the application has not been brought promptly. I cannot accept that submission. The proceeding was commenced on 24 October 2014 and security for costs was requested by letter dated 4 December 2014.[54] The overall response to that request was unsatisfactory and, so, the application was pursued. There was no substantial delay in the filing of the application.
[62] I am satisfied that, should the plaintiff be unsuccessful in this proceeding, it is unlikely to be able to satisfy any costs order made in favour of the defendants. The court's jurisdiction to award security for costs is therefore enlivened in the present case. In considering whether to order security, it is relevant to have regard to the means of those standing behind the proceeding: UCPR r 672(a). That is Mr Davis. There is no evidence as to his means although he has deposed that, if the plaintiff is ordered to provide security for costs, he is "prepared, in lieu of cash or personal guarantee, to lodge an irrevocable bank guarantee for a period of two years in such sum as might be ordered" by the court. I think that, in circumstances where such an offer is made, the plaintiff should be given the opportunity to provide a bank guarantee to that effect, although I would not be prepared to allow it to be limited as to time. The plaintiff has the carriage of this proceeding and it is up to it to ensure that its claim is prosecuted as quickly as it can be from this point on. In the absence of a bank guarantee being provided, I am otherwise satisfied that this is an appropriate case for the making of an order for security for costs.
[67] I shall hear the parties on the question of costs although, given the mixed success on both sides of the record, my preliminary view is that the appropriate order is that the costs of and incidental to this application should be each party's costs in the proceeding.
[68] Otherwise, I shall await submissions from the parties as to an appropriate form of order to reflect these reasons.
[3] Exhibit GFC-3 to the affidavit of Mr Cassar.
[4] Exhibit KFW-1 to the affidavit of Mrs Watts.
[8] Paragraph 38 of the first affidavit of Mr Davis.
[9] Exhibit CND17 to the first affidavit of Mr Davis.
[10] Paragraph 55 of the affidavit of Mr Cassar (referring to paragraph 36 of the affidavit of Mr Davis).
[11] Paragraph 90 of the affidavit of Mr Cassar.
[12] Exhibit GFC-7 of the affidavit of Mr Cassar.
[13] Paragraph 49 of the first affidavit of Mr Davis.
[14] Paragraph 102 of the affidavit of Mr Cassar.
[15] The email is exhibit CND20 to the first affidavit of Mr Davis and the attachment is exhibit GFC-8 to the affidavit of Mr Cassar.
[16] The email is exhibit CND23 the first affidavit of Mr Davis and the attachment is exhibit GFC-9 to the affidavit of Mr Cassar.
[17] Exhibit CND27 to the first affidavit of Mr Davis.
[18] Paragraph 121 of the affidavit of Mr Cassar.
[19] Exhibit CND33 to the first affidavit of Mr Davis.
[20] Exhibit CND34 to the first affidavit of Mr Davis.
[21] Exhibit CND40 to the first affidavit of Mr Davis.
[22] Deputy Commissioner of Taxation v Salcedo [2005] QCA 227; [2005] 2 Qd R 232 at [17] per Williams JA (with whose reasons McMurdo P and Atkinson J agreed); Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at 141, [58].
[23] Salcedo at [3] per McMurdo P; Westpac Banking Corporation v Hughes [2011] QCA 42; [2012] 1 Qd R 581 at 602, [74].
[24] Salcedo at [47] per Atkinson J, adopting the test laid down by Lord Woolf MR in Swain v Hillman [2001] 1 All ER 91 at 92.
[27] [2001] HCA 41; (2000) 201 CLR 552 at 575-576, [57], which statement was referred to with approval by Gleeson CJ, Gummow, Hayne and Crennan JJ in Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 at [46] and by French CJ and Gummow J in Spencer at [24] and followed by McMurdo P in Salcedo at [3] and by White JA in LCR Mining Group Pty Ltd v Ocean Tyres Pty Ltd [2011] QCA 105 at [29].
[28] [2003] QCA 271 at [41].
[29] LCR Mining Group at [22] per White JA (with whom Margaret Wilson AJA and Ann Lyons J agreed).
[30] Indeed, as Fraser JA observed in Cassatone Nominees P/L v Queenslandwide House and Building Reports P/L & Ors [2008] QCA 102 at [46], the dictum of Jones J in Queensland Pork is to be understood in the context of the facts of that case, that is, the "applicant for judgment there adduced evidence that demanded an 'irresistible' or 'unavoidable' inference of fact in its favour yet the respondent, though shown to have the personal knowledge necessary to swear to a direct response, did not do so".
[31] [1954] HCA 72; (1954) 91 CLR 353 at 360 per Dixon CJ, McTiernan and Kitto JJ.
[33] Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd [1982] HCA 53; (1982) 149 CLR 600 at 604; Walford v Miles [1992] 2 AC 128 at 136.
[35] Sheehan v Zaszlos [1994] QCA 145; [1995] 2 Qd R 210 at 213.
[36] Moffatt Property Development Group P/L v Hebron Park P/L [2009] QCA 60 at [17] per Keane JA (as his Honour then was).
[37] The Commercial Bank of Australia Ltd v G H Dean & Co Pty Ltd & Anor [1983] 2 Qd R 204 at 209 per McPherson JA; Marek v Australasian Conference Association Pty Ltd [1994] 2 Qd R 521 at 529 per Cooper and Byrne JJ; Weemah Park Pty Ltd v Glenlaton Investments Pty Ltd [2011] QCA 150; [2011] 2 Qd R 582 at 597 per Muir JA.
[38] Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 per Mason J.
[39] Holmes J (as her Honour then was) reached a similar conclusion in Caxton Street Agencies Pty Ltd v Korkidas & Anor [2002] QSC 210 at [25], although, in the case, her Honour found that there was a "resounding lack of direct evidence from either side as to just what was said in the discussions surrounding the coming into existence" of the document in question.
[40] Paragraph 7 of the Statement of Claim.
[43] Petersen v Maloney [1951] HCA 57; (1951) 84 CLR 91 at 94-95; Nowrani Pty Ltd v Brown [1989] 2 Qd R 582.
[44] West v Blakeway [1841] EngR 591; (1841) 133 ER 940.
[45] Kostopoulos v G E Commercial Finance Australia P/L [2005] QCA 311 at [43] per Keane JA (as his Honour then was), with whom McMurdo P and Dutney J agreed.
[46] Relying on Hensley v Reschke [1914] HCA 88; (1914) 18 CLR 452.
[47] See Darter Pty Ltd v Malloy [1993] 2 Qd R 615 at 620-621; Le v Bui & Anor [2008] QSC 149 at [18]- [20] per McMurdo J.
[48] See, for example, exhibit CND41 to the first affidavit of Mr Davis.
[49] Royalene Pty Ltd v Registrar of Titles & Anor [2007] QSC 59 at [6] per Mackenzie J.
[50] Robert Bax & Associates v Cavenham Pty Ltd [2011] QCA 53 at [16].
[51] The "Share Sale Agreement" is defined in paragraph 2 of the Statement of Claim to mean the deed executed on 18 March 2014.
[52] For a discussion of the principles in the case of a corporate plaintiff, see Base 1 Projects Pty Ltd v Islamic College of Brisbane Ltd [2012] QCA 114 at [18]- [19].
[53] And see Corporations Act 2001 (Cth), s 1335(1).
[54] Exhibit MGA-6 to the first affidavit of Mr Adamson.
[55] Paragraph 14 of the second affidavit of Mr Davis.
Pipeworks Australia
Betcop Pty Ltd atf The Watts Family Trust & Ors [2015] QSC 284
(2000) 201 CLR 552
(2006) 226 CLR 256
(1982) 149 CLR 600
(1982) 149 CLR 337
(1949) 78 CLR 62
(1964) 112 CLR 125
(1914) 18 CLR 452
(1995) 56 FCR 189
(1954) 91 CLR 353
(1951) 84 CLR 91
(2010) 241 CLR 118
(2005) 30 WAR 290
[37] Here, of course, the affidavit material relied on by the plaintiff and the defendants extended to evidence concerning many of the circumstances surrounding the entry into of the deed as well as to evidence of how the parties subsequently conducted themselves. It should not, however, be thought that the evidence in either of those respects was at all complete and, even if it was, portions of that evidence obviously remain untested.
[38] In my opinion, this is a case where such evidence - at least as regards subsequent conduct - may very well assist the court to determine whether final agreement was reached by the parties to the deed. This is not a case concerning, for example, a collection of pro forma conditions or even an agreement drafted by lawyers. The deed was prepared by Mr Davis as a "really simple" document. It should therefore not surprise that some of its provisions lend support to the arguments advanced on behalf of the defendants whereas others support the plaintiff's contentions that a binding agreement was entered into.
[39] In the circumstances of this case, I do not consider that the construction of the deed is a proper matter for summary resolution.[39] The position would be otherwise if there was no possibility that evidence might be called to bear on that question at the trial or if the position was so clear-cut that, regardless of any such extrinsic evidence, the contractual intention could safely be discerned from within the four corners of the agreement.
[40] In any event, I would be disinclined on the present state of the material to find in favour of the defendants on the construction point. The submissions made on behalf of the plaintiff to the effect that all of the essential terms for a sale of shares were included in the deed appear correct, as does the argument that the balance of the terms to be inserted in the contract of sale were within the power of the defendants to decide because clause 4 of Schedule A was a provision for the benefit of the plaintiff which could be waived if agreement on those terms could not be reached. In addition, clause 3.1 seems to me to be an important provision because it makes it clear that the "commercial terms" outlined in Schedule A were "intended to be legally binding on the parties". Moreover, when clause 3.1 is read in conjunction with the obligations contained in clauses 4.1 and 4.2, those obligations appear to take on a more precise meaning as to what the parties intended. But, I express no concluded view on the point for the reasons I have already expressed; it may well be that evidence is adduced at trial that casts a different complexion on the question.
[41] It is convenient to now deal with an allied argument advanced on behalf of the defendants, that is, that the parties were unable to agree on the terms which would "reflect the commercial agreement between the parties" as required by clause 4.2. The evidence discloses that the plaintiff executed the form of Share Sale Agreement which Mrs Watts submitted on 30 May 2014, albeit with handwritten amendments to change the time when the payment of the deposit was required. This, it was submitted on behalf of the defendants, constituted a counter-offer. It was also pointed out on behalf of the defendants that the contract which was executed by the plaintiff provided for settlement on 1 August 2014, one day after the final date for completion under the deed. I am not persuaded by these arguments. It is the plaintiff's case that, by the time it executed the Share Sale Agreement, the defendants had already repudiated the agreement represented by the deed. It is that repudiation which is relied on by the plaintiff in this suit.[40] Even if that were not so, and the parties were attempting to reach agreement, they had until 31 July 2014 within which to do so. The amendments sought by the plaintiff to the term concerning payment of the deposit could easily have been rejected by the defendants, in which event it was open to the plaintiff to revert to an acceptance of the term as it was originally formulated, provided that occurred before 31 July 2014. Such a course would in my view have been within the contemplation of the deed given that it provides for the negotiation by the parties of the terms of the contract to be executed. As for the completion date, it was not inserted by the plaintiff; rather, it was inserted by the defendants in the contract supplied on 30 May 2014. The defendants were free to specify a later date in that contract if the plaintiff was prepared to accept such a variation from the terms of the deed which provided for completion by no later than 31 July 2014. Based on its execution of the Share Sale Agreement, the plaintiff appears to have done so.
[42] Turning then to the arguments concerning the giving of notice pursuant to clause 4.1 of the deed, there is a stark conflict on the affidavit material between the version advanced by Mr Davis and that advanced by Mr Cassar. Although I have no doubt that, if this claim proceeds to trial, a number of the aspects of the account provided by Mr Davis will be under considerable scrutiny, I cannot resolve the conflict between Mr Davis and Mr Cassar on a hearing such as this. I must, instead, proceed on the assumption that the version advanced by Mr Davis will be accepted at trial.
[43] On that understanding of how I must approach the determination of this application, Mr Davis' evidence is to the effect that he prepared the notice, signed it and was in a position to provide it on 16 May 2014. On the basis, Mr Davis deposed, of a conversation he had with Mr Cassar on 15 May 2014 to the effect that it would be "suitable" if the notice was made available for collection from Mr Davis' office, he left the notice out for collection on 16 May 2014. On the following Monday (19 May 2014), he emailed a copy of the notice to Mr Cassar.
[44] None of that of course complied with the notice requirements under the deed. Clause 4.1 required written notice to be given to the "Owner" and clause 6 prescribed how any such notice was to be given. Further, despite the arguments advanced on behalf of the plaintiff to the effect that time was not of the essence of the performance of that obligation, I think that it clearly was. Clause 2.3 made it plain that the "last permissible day" for the performance of due diligence was 16 May 2014. Indeed, that very phrase was inserted by Mr Davis to cater, I infer, for the defendants' concern that their ability to market the shares for sale to other buyers not extend beyond that period of 60 days. The consequence of the exclusivity period expiring is set out in clause 2.4 - the deed would be "terminated and the parties will have no further liability to each other". That provision of course must be read with clause 4.1 which contemplates the giving of notice by the "Buyer" that it wishes to proceed with the purchase but, in the absence of the giving of any such notice by the date of expiration of the exclusivity period, it seems plain beyond doubt that the parties intended the deed to come to an end.
[45] It can therefore be seen that, even taking Mr Davis' account at its highest, the provisions of the deed were not complied with. However, for the plaintiff, a number of arguments were advanced which had at their heart the proposition that Mr Cassar was the "duly authorised agent of the Defendants, representing the Defendants' interests in relation to the transaction to which the [deed] related, and was capable of binding, and did bind the Defendants in all respects".[41] Based on the alleged existence of that degree of agency together with Mr Davis' account that Mr Cassar "directed" how notice was to be given by the plaintiff, a number of alternative arguments are advanced on its behalf, each of which is pleaded.[42] They are: that actual notice was given by the plaintiff to the defendants by their agent; that the deed was varied to the extent that notice would be effective if given in the manner directed by the agent; that the defendants waived strict compliance with the notice requirements under the deed; and that the plaintiff was estopped from relying on the requirements that notice be given by 16 May 2014.
[46] For the defendants it was submitted that neither the proposition that Mr Cassar was authorised to act in the ways alleged nor the arguments based on the alleged existence of such authority should be accepted.
[47] So far as the allegation of agency is concerned, it is perfectly correct to submit, as the defendants did, that the implied authority of a selling agent is limited.[43] However, on the evidence before me, I cannot exclude the possibility that Mr Cassar may have been authorised by the defendants to permit the giving of notice in the way Mr Davis maintains in his affidavit. At the very least, that is a question of fact which cannot be resolved at this stage of the proceeding.
[48] As for the arguments premised on that allegation of agency, the defendants pointed to the provisions of the deed which required any amendment to it to be effected by another deed executed by all parties (clause 8.1) as well as the common law principle to the same effect.[44] Reliance was also placed on the "no waiver" provision under the deed (clause 10.1).
[49] Although there is much force in these submissions, they do not supply a complete answer to the plaintiff's arguments. However unlikely it may be that the arrangement for the giving of notice deposed to by Mr Davis was at all necessary when the same notice could so easily have been emailed by Mr Davis to the defendants on 16 May 2014, if I accept for the purposes of this application (as I must) that such an arrangement was directed by Mr Cassar and, further, if I accept that the plaintiff may at the trial establish agency on the part of Mr Cassar sufficient to give such a direction (as, again, I must), then I cannot exclude the possibility that one or more of the plaintiff's arguments on this point might succeed. In this respect, I accept that a non-waiver clause may itself be waived by conduct, provided there is an "unequivocal statement of intention not to rely" on such a provision.[45] However, the arguments advanced on behalf of the plaintiff regarding variation of the terms of the deed are, given the presence of clause 8.1, less promising, and the argument regarding estoppel is even less so given the equivocal nature of the evidence of subsequent conduct. Nevertheless, these are all matters which the plaintiff should be free to pursue at trial.
[50] Lastly, it was submitted on behalf of the defendants that the plaintiff had not established by evidence that it was ready, willing and able to effect settlement on 31 July 2014. It was argued that such proof is an essential ingredient of the plaintiff's claim.[46] I am not convinced that such a proposition is correct in circumstances where, on the plaintiff's case, the defendants repudiated the deed before the time for performance arrived.[47] In any event, the correspondence under the hand of Mr Davis which is in evidence is sufficient to establish the plaintiff's readiness and willingness to complete the purchase.[48] As to the plaintiff's ability to complete the purchase, it is true that there is no direct evidence on that point but there is sufficient evidence in my view to infer for the purposes of the application that the plaintiff had the wherewithal to pay the purchase price. Such an inference arises I think from the circumstances which are disclosed on the material to the effect that the plaintiff pursued due diligence at some expense and over a considerable period of time. It was then prepared to execute a contract on 15 July 2014 without the expression of any reservation concerning its ability to pay the purchase price on completion. It seems to me to be quite unlikely that the plaintiff would have conducted itself in these ways unless it had the ability to complete the purchase.
[63] As to the quantum of such an order, the defendants' solicitor provided an affidavit in which he expressed the opinions that the likely costs to be incurred by the defendants in "seeing this matter to completion" would be "not less than $150,000", of which the "likely recoverable costs" would be in the range of between $90,000 and $110,000 inclusive of outlays and counsel fees. Based on that evidence, an order for security in the sum of $100,000 was sought by the defendants.
[64] Mr Adamson was cross-examined on the hearing of the application regarding his estimate. An attempt was made to suggest that he was insufficiently experienced in private practice litigation to express such opinions. Although I was not persuaded that this was so, the opinions which Mr Adamson did express were, to my mind, too broadbrush and imprecise to assist me to any great degree. They were merely estimates which were not, as Mr Adamson conceded when giving evidence, provided with reference to the "Supreme Court scale".[56]
[65] On the other hand, the plaintiff relied on an affidavit from an experienced cost assessor, Mr Walter. There one finds, in my view, a careful and detailed analysis of the likely standard costs that will be incurred in this proceeding up to and including the first day of trial. Those costs were assessed by Mr Walter by reference to the scale and amount to $47,788. I prefer the evidence of Mr Walter, and his assessment, to the evidence of Mr Adamson. Subject only to what I am about to say, it shall be ordered that the plaintiff provide security for the defendants' costs of and incidental to this proceeding in that amount.
[66] Before such an order takes effect, I propose to allow the plaintiff a period of 14 days to lodge with the Registrar of the Court an irrevocable bank guarantee by Mr Davis, in a form acceptable to the Registrar, in favour of the defendants, and each of them, whereby Mr Davis guarantees every obligation which the plaintiff may have to pay any costs order made against the plaintiff in this proceeding. Upon lodgement of that guarantee, the defendants' application for security for costs will stand dismissed. If, however, the plaintiff fails to lodge that guarantee within 14 days, the order of the court will be that the plaintiff forthwith provide security in that amount in a form satisfactory to the Registrar.