Refund Property Fees Pty Ltd v Prime Project Development

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 172 of 2011

BETWEEN: REFUND PROPERTY FEES PTY LTD ACN 145 709 360

AND: PRIME PROJECT DEVELOPMENT (CAIRNS) PTY LTD ACN 109 685 332

BLUECHIP DEVELOPMENT CORPORATION (CAIRNS) PTY LTD ACN 117 021 566

JUDGE: LOGAN J DATE: 23 NOVEMBER 2011 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 As to the applications today, the application made by the second respondent in seeks the stay or permanent dismissal of the proceeding. Whether or not this case is to be regarded as an abuse of process depends very much on the making of a value judgment about the nature of the substantive cause of action which in turn rests on making a value judgment about matters of creditability. 2 There is, as I observed in the course of the oral submissions, a persuasive case that is put in the second respondent's outline, but it is a case which in my opinion is one which is for trial rather than summary disposition. The observation "persuasive" does not indicate any view other than that second respondent's outline reflects a particular assessment of the case, depending on views one reaches about matters of fact. This Court has been reminded powerfully and recently by the High Court in Edwards v Santos Ltd (2011) 242 CLR 421 about the caution that should attend a summary disposition of a case, even allowing for whatever relaxation of the more traditional tests that has been effected by s 31A of the Federal Court of Australia Act 1976 (Cth). 3 Insofar as the application relates to the pleadings, reference has been made in the course of the second respondent's well crafted written submission to observations which I made in Wide Bay Burnett Conservation Council Inc v Burnett Water Pty Ltd (No 2) [2009] FCA 237 at [26] and, in particular, to an observation that particulars are not a substitute for the allegation of material facts. In the passage quoted from that case, I also referred to: … a discernible tendency in modern times against striking out when a pleading even with such a technical fault can be seen fairly to convey when read as a whole, including it so-called particulars, the case which a respondent has to answer. I referred in that regard to Queensland v Pioneer Concrete (Qld) Pty Ltd (1999) ATPR 41-691 at 42, 827-9. 4 This seems to me a case where that "modern discernible tendency" is applicable. That is not in any way to gainsay the critique made of the amended pleadings of the applicant, but rather to reinforce a view which I formed when considering whether the case was one which was an abuse of process which was that there is, albeit with some difficulty, a discernible cause of action the merits of which depend on factual value judgments as much as anything else and that the case very definitely is one which needs a trial. 5 It seems to me that any summary disposition would be fraught with the risk of elongating rather than truncating a final resolution of issues between the parties. It is for that reason, having regard to my ability to offer a relatively early trial date, that I consider that so much of the application of the second respondent seeks to strike out or stay the proceeding or strike out the pleadings should not succeed. 6 The nature of the applicant's case is relevant also to the other application made which concerns security for costs. As to that, I do not consider the application to be made at such a late stage of proceedings as would be oppressive. Of course, even at a late stage, in particular circumstances, an application for security for costs may be entertained and security ordered. 7 It is a concern in this case that the costs may well be equal to, if not greater than, the amounts at issue. That, though, is not a basis for ordering security. 8 The worth of the applicant depends very much on an assessment of the worth of loan accounts and set offs as against those. The applicant is under no obligation to prove why it should not be ordered to give security. There is an interrogative note established on the second respondent's case about the applicant's worth. For all that, there is also something of an element of the applicant's worth being inherently tied up with the nature of the claim that it makes. On one view, the applicant is worth at least $800,000. 9 It is unfortunate that there is no verified balance sheet of the applicant to give substance to that view. Nonetheless, having regard to the worth that the applicant apparently has, this is not a case, in my opinion, where security for costs should be ordered. 10 Having said that, I can well see why the second respondent was motivated to bring the application. It is for that reason that, notwithstanding the absence of forensic success, my disposition is to reserve costs rather than award them as against the second respondent. In other words, my very strong view is that the fate of the application, so far as costs are concerned, should be determined by the fate of the trial proper. 11 I should indicate, as well, insofar as there was an assault made on the defence that in its current form the defence is very much a product of having to deal with a very difficult statement of claim. I am not disposed in any way to strike out the defence as opposed to, as the interlocutory orders propounded reflect, granting leave to the second respondent to file and serve an amended defence. Again, the costs in relation to that application also are costs which I regard as costs that should be reserved to abide the result at trial. 12 The further orders then are that each of the interlocutory applications is dismissed with costs reserved. There will also be orders in terms which have been agreed between the parties. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.