Waters v Gembrook Crest Pty Ltd

[4] In or about July 2002, the applicant asserts that she entered into an agreement to act as a consultant for the respondent with respect to residential and commercial property development in Queensland[1]. The respondent admits an agreement was entered into with the applicant, but asserts that it was a "principal and agent" type agreement[2].

[5] The applicant asserts that the agreement was entered into on behalf of the respondent by a Mr Stanley Camov, managing director of the respondent at the relevant time, and provided that the applicant be paid a monthly consultancy fee of $2,000 plus GST per development project, together with a further bonus of payment upon the sale of each project[3]. The respondent asserts that the agreement provided that the applicant would undertake duties for and on behalf of the respondent, and that in return she would be paid a monthly retainer of $2,000 per month only[4].

[6] The applicant asserts that in accordance with the agreement, she worked on the following property developments between July 2002 and November 2003, namely:

(a) 56A Back Street, Runaway Bay ("the Back Street property")[5];

(b) 4713 The Parkway, Sanctuary Cove ("the Sanctuary Cove property")[6]; and

(c) 2 Bulolo Avenue, Runaway Bay ("the Bulolo Avenue property")[7].

[7] The applicant asserts that in accordance with the agreement, she identified the Back Street property as suitable for development, and further that it was purchased by the respondent for $690,000 in or about July 2002[8]. The respondent admits it purchased the property for the specified amount ($690,000) but denies it was pursuant to the agreement as alleged[9]. However, the respondent admits that the applicant assisted the respondent to develop a duplex building on the site[10].

[8] The applicant asserts that she identified the Sanctuary Cove property as a block of land suitable for development, pursuant to the agreement[11]. The respondent admits that the applicant identified the Sanctuary Cove land, but denies that it was pursuant to the alleged agreement[12].

[9] The applicant asserts that in or about October 2003, she and Mr Camov (on behalf of the respondent) agreed to amend the agreement. The applicant asserts that the amendment provided that, in addition to the consultancy fee, the applicant would be paid 50 per cent of the net profit from each of the developments (as opposed to $100,000 on the sale of the first duplex unit from the Back Street property and 50 per cent of all other sales)[13]. The respondent denies that there was ever any agreement to share the net profits with the applicant[14].

[10] On or about 26 November 2003 Mr Camov died suddenly[15]. The applicant asserts that on or about 19 February 2004, she agreed with Mr Camov's widow (a shareholder in the respondent company) that the applicant would cease her employment with the respondent[16]. The respondent admits that such a meeting took place, but denies that an agreement was reached in respect of the applicant's employment, asserting that the applicant was never employed by the respondent[17].

[11] The applicant asserts that she was entitled to be paid an agreed consultancy fee of $2,000 plus GST per month between July 2002 and February 2004 (i.e. 20 months)[18]. The applicant asserts that during this period she was only paid $24,000 plus GST[19]. The respondent admits that it made certain payments to the applicant, but claims that it is unable to verify the date or amount of these payments[20]. The applicant asserts that the respondent has failed to pay her a total of $16,000 plus GST in consultancy fees[21], but the respondent denies any indebtedness to the applicant in respect of the consultancy fees[22].

[12] The applicant asserts that she spent a sum on the Sanctuary Cove development for which she has never been reimbursed by the respondent[23]. The respondent neither admits nor denies this allegation[24]. The applicant asserts that in accordance with the agreement, the respondent is therefore liable to repay that sum of $1,200[25], but the respondent denies any such liability[26].

[13] The applicant and respondent agree that pursuant to a contract dated on or about 20 October 2003, one of the duplex units at the Back Street property was sold for $1,060,000[27]. The applicant asserts that on or about 17 May 2004, the second duplex unit at the Back Street property sold for $1,050,000[28]. The applicant deposes that the gross profit from the development of the Back Street property was $616,931.93[29].

[14] It is agreed by the applicant and the respondent that on or about 25 July 2003 the Sanctuary Cove property was purchased by the respondent for $325,000[30]. The Sanctuary Cove property was never developed, and the applicant asserts that it was sold by the respondent in or about July 2004 for $410,000[31]. The applicant asserts that the respondent made a gross profit of $85,000 from the sale of the Sanctuary Cove property[32].

[15] The applicant asserts that she is entitled to 50 per cent of the net profit from the sale of both the duplexes at Back Street and the land at Sanctuary Cove[33].

[16] The applicant commenced proceedings by way of claim and statement of claim in the District Court, Southport on 28 October 2004. Subsequently, the respondent (through Tucker & Cowen Solicitors, Brisbane) as town agents for ComLaw Barristers and Solicitors, Victoria, filed a defence on 8 December 2004 in respect of the proceedings.

[17] On 11 August 2005, the applicant served the respondent with a list of documents pursuant to UCPR r. 214, and requested a copy of the respondent's list of documents "within the prescribed period"[34]. Subsequently, because the respondent's list of documents was not supplied, the applicant wrote to the respondent pursuant to UCPR r. 444 on 30 August 2005[35].

[18] The applicant did not receive a response to the first UCPR r. 444 letter within the specified time (5 p.m. 6 September 2005)[36] and as a consequence, filed an application in the District Court at Southport on 8 September 2005, seeking an order that the respondent provide its list of documents in accordance with its obligation under the UCPR. The application was served on Tucker & Cowen Solicitors by a letter dated 9 September 2005[37]. On 28 October 2005, Tucker & Cowen Solicitors wrote to O'Keefe Mahoney Bennett, advising that they had received the relevant documents (the application and supporting affidavit material) but had not then (as of 28 October 2005) received instructions to respond to the various matters raised by the correspondence from O'Keefe Mahoney Bennett of 14 October 2005[38]. On 28 October 2005, Tucker & Cowen Solicitors faxed O'Keefe Mahoney Bennett, solicitors for the applicant, advising that "our instructions in relation to this matter have been withdrawn", enclosing a "notice that parties acting in person duly executed by the defendant" and advising that the original would "be forwarded to the court for filing as soon as possible"[39]. The applicant's solicitor, Matthew Gill, deposes to having conducted inquiries with the District Court Registry, Southport, which indicate that Tucker & Cowen Solicitors have not, in fact, withdrawn from the record, and that the respondent's address for service is still recorded as Tucker & Cowen Solicitors[40]. An examination of the file index reveals that, as of 20 April 2006, Tucker & Cowen had not filed any notice as to the defendant acting in person.

[19] The application seeking an order for the provision of a list of documents by the respondent in compliance with UCPR rr. 211 and 214 came for hearing before Judge Newton in the District Court, Southport on 31 October 2005. There was no appearance by or on behalf of the respondent. Judge Newton ordered as follows:-

(1) The defendant be ordered to provide to the plaintiff a list of documents within seven days from the date of this order in accordance with the defendant's duties under rules 211 and rule 214 of the Uniform Civil Procedure Rules.

(2) The defendant pay the plaintiff's costs of this application in the sum of $440[41].

[20] O'Keefe Mahoney Bennett, solicitors for the applicant, enclosed a copy of the court order, with a letter dated 1 November 2005, which was forwarded directly to the respondent at 6 Akuna Drive, Williamstown, Victoria 3016[42]. There was no reply to this correspondence by the respondent. On 14 November 2005, the applicant's solicitors again wrote direct to the respondent, requesting the respondent's list of documents within seven days, pursuant to UCPR r. 444 ("the second r. 444 letter")[43]. The respondent has never provided the applicant with a list of documents[44].

[21] The applicant filed an application on 29 November 2005, seeking relief pursuant to UCPR r. 225, and the respondent was served with a copy of that application[45]. When the matter came before the District Court at Southport on 23 January 2006, the court granted the applicant leave to file an amended application to enable the applicant to seek relief pursuant to UCPR r. 374.

[22] Neither the respondent's solicitors, Tucker & Cowen Solicitors, nor the respondent, have taken any steps to date to alter the status of Tucker & Cowen Solicitors as solicitors on the record. On 9 February 2006, the applicant, through her solicitors O'Keefe Mahoney Bennett, caused the following material to served by post on Tucker Cowen Solicitors, namely:-

(a) application dated 29 November 2005;

(b) affidavit of Matthew Campbell Gill sworn 28 November 2005;

(c) amended application dated 18 January 2006;

(d) affidavit of Louise Jane Waters dated 2 February 2006[46].

[23] In addition, the applicant, through her solicitors O'Keefe Mahoney Bennett, also caused the material listed above to be posted to the registered office of the respondent[47] at 6 Akuna Drive, Williamstown, Victoria 3016, on 9 February 2006[48].

[24] The hearing of the application under r. 374 proceeded before this court ex parte on 16 February 2006 and on 20 April 2006, given the non-appearance of any legal representative (or other representative) of the respondent company.

[25] The respondent's address for service, as far as the court file is concerned, remains Tucker & Cowen Solicitors[49]. Although that firm indicated on 28 October 2005[50] that their instructions had been withdrawn, they have not sought leave of the court to withdraw to date, nor has a Notice that Party Acting in Person been filed. An examination of the file index on 20 April 2006 confirms that this (unsatisfactory) situation has not altered as of that date.

[26] The firm of Tucker & Cowen Solicitors was served by post with the amended application and supporting affidavit material under cover of a letter to them from O'Keefe Mahoney Bennett dated 9 February 2006[51]. Such service complies with UCPR r. 31(5)[52] in that the documentation was served by posting it to the "relevant address"[53], which is defined as the "person's address for service"[54]. There being no application to the court on behalf of Tucker & Cowen Solicitors to seek leave to withdraw, nor any filing of a Notice of Party Acting in Person, Tucker & Cowen remain the respondent's solicitors on the record, and consequently, in my opinion, remain the relevant address for service of documentation pursuant to an application under the UCPR.

[27] In addition, the applicant's solicitors, O'Keefe Mahoney Bennett, forwarded copies of the amended application and supporting affidavit material by post to the respondent's registered business address[55]. Pursuant to Acts Interpretation Act 1954 (Queensland) s. 39A, the service on both Tucker & Cowen Solicitors and on the respondent company would, in my view, have been effective as at 13 February 2006, therefore enabling the matter to proceed to an ex parte hearing as it did on 16 February 2006, two clear business days after service is deemed to have been effective.

[28] Both the respondent company and Tucker & Cowen Solicitors were also advised of the further hearing on 20 April 2006[56]. There was no appearance on 20 April 2006 by or on behalf of the respondent company.

[29] UCPR r. 374 is applicable when a party does not comply with an order to take a step in a proceeding[57]. Among the options available to a court on the hearing of an application[58] under UCPR r. 374, is granting judgment against the party served with the application[59].

[30] The applicant's counsel, Mr James, submits that the respondent's failure to comply with the order of Judge Newton made in the Southport District Court on 31 October 2005, amounts to a failure to "comply with an order to take a step in a proceeding". As a consequence, it is submitted that the failure entitles the applicant to seek relief pursuant to UCPR r. 374, and the particular relief sought is judgment against the respondent[60].

[31] UCPR r. 374(4) requires that the application:

"(a) must allege the grounds on which it is based; and

(b) is evidence of the allegation specified in the application; and

(c) must, together with all affidavits to be relied on in support of the application, be filed and served at least two business days before the day set for hearing the application."

[32] It is submitted by Mr James, and in my view clearly self-evident from its contents, that the applicant's amended application alleges the grounds upon which the application is based and therefore fulfils the requirements of UCPR r. 374(4)(a).

[33] I consider that the applicant has complied with the requirement to serve the application and all affidavits to be relied on in support of the application at least two business days before the day(s) set for hearing[61].

[34] It is clear that there has been a continued failure to comply with the respondent's obligations pursuant to the UCPR, and in particular, in respect of the order of Judge Newton made in the District Court, Southport, on 31 October 2005. As a consequence, the failure by the respondent to provide a list of documents has effectively stymied further conduct of this matter, pending an application such as that currently before the court.

[35] I am satisfied, therefore, that it is appropriate to order, pursuant to UCPR r. 374(5)(a), that judgment be given against the respondent, given the complete failure of the respondent to cooperate in the litigation process before this court, a process that has continued through to the adjourned hearing on 20 April 2006.

[36] The applicant's counsel, Mr James, submits that the applicant is entitled to the following awards of damages:-

(a) $17,600 (inclusive of GST) for outstanding consultancy fees under the agreement; and

(b) $1,200 for moneys expended by the applicant on behalf of the respondent; and

(c) 50 per cent of the net profit from the sale of the duplex units at Back Street, Runaway Bay, together with 50 per cent of the net profit from the sale of the land at Sanctuary Cove.

[37] The applicant concedes that she is unable to identify precisely the net profit obtained by the respondent from the sale of the properties at Back Street, Runaway Bay and Sanctuary Cove. However, Mr James submits on her behalf that an inability to accurately assess the plaintiff's damages is not a bar to recovery, and cites Halsbury's Laws of Australia[62], and Commonwealth v Amann Aviation Pty Ltd[63] as authority for the proposition that "where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provided for breach of contract, an award of damages"[64].

[38] Mr James submits that, in the absence of evidence enabling the assessment of the precise net profit from the sale of the Back Street, Runaway Bay and Sanctuary Cove properties, the court is entitled to estimate the damage suffered by the applicant based on the material deposed to by the applicant and exhibited to her affidavit. The applicant's counsel, Mr James, submits further that the respondent has been served (both through Tucker & Cowen Solicitors and direct) with a copy of the material on which the plaintiff relies to quantify her damages in the sum of $250,000, and has chosen not to appear and defend the proceedings.

[39] The applicant asserts that the damages calculated in accordance with her agreement with the respondent are as follows[65]:

(a) Consultancy fees: $17,600 (including GST)

(b) Expenses $ 1,200

[40] The applicant claims the "bonus payments" of $231,200, being 38 per cent of the gross deposed to by her, as a fair estimation of damages[66].

[41] In my view, the damages sought are justifiable on the material placed before this court and, in any event, are quantified at no more than the maximum monetary amount able to be awarded under this court's monetary jurisdiction. I accept the submission on behalf of the applicant that the sum of $231,200 in "bonus payments" is a fair estimation of that aspect of her claim.

[42] I order that summary judgment be entered for the applicant/plaintiff against the respondent/defendant in the amount of $250,000.

[15] Para 15 of the Statement of Claim, para 16 of the Defence

[25] Para 34 (b) of the Statement of Claim

[27] Para 14 of the Statement of Claim, para 15(a) of the Defence

[28] Para 6 affidavit of Louise Jane Waters sworn 2 February 2006

[29] Para 5 affidavit of Louise Jane Waters sworn 2 February 2006

[30] Para 18 of the Statement of Claim, para 19 of the Defence

[31] Para 7 affidavit of Louise Jane Waters sworn 2 February 2006

[32] Para7 affidavit of Louise Jane Waters sworn 2 February 2006

[33] Para 22 of the Statement of Claim; para 2 of the affidavit of Louise Jane Waters sworn 2 February 2006

[34] Cover letter from applicant's solicitors dated 11 August 2005, page 55, Exhibit MCG8 affidavit of Matthew Gill sworn 28 November 2005

[35] See letter from O'Keefe Mahoney Bennett to Tucker & Cowen dated 30 August 2005, page 56, Exhibit MCG8 affidavit of Matthew Gill sworn 28 November 2005

[36] See letter from O'Keefe Mahoney Bennett to Tucker & Cowen dated 30 August 2005, page 56, Exhibit MCG8 affidavit of Matthew Gill sworn 28 November 2005

[37] Exhibit MCG9 affidavit of Matthew Gill sworn 28 November 2005

[38] Exhibit MCG10 affidavit of Matthew Gill sworn 28 November 2005

[39] Exhibit MCG11 affidavit of Matthew Gill sworn 28 November 2005

[40] Para 2, affidavit of Matthew Gill sworn 16 February 2006

[41] Exhibit MCG12 affidavit of Matthew Gill sworn 28 November 2005

[42] Exhibit MCG13 affidavit of Matthew Gill sworn 28 November 2005

[43] Exhibit MCG14 affidavit of Matthew Gill sworn 28 November 2005

[44] Para 16, affidavit of Matthew Gill sworn 28 November 2005; para 2, affidavit of Matthew Gill sworn 20 March 2006 (Document 28)

[45] Para 2, affidavit of Matthew Gill sworn 20 March 2006 (Document 26)

[46] Para 3 & Exhibit MCG1, affidavit of Matthew Gill sworn 16 February 2006

[47] Para 4 & Exhibit MCG2, affidavit of Matthew Gill sworn 16 February 2006

[48] Par 5 & Exhibit MCG3, affidavit of Matthew Gill sworn 16 February 2006

[49] Para 6, affidavit of Matthew Gill sworn 16 February 2006

[50] Exhibit MCG11, affidavit of Matthew Gill sworn 28 November 2005

[51] Para 3 & Exhibit MCG1, affidavit of Matthew Gill sworn 16 February 2006

[52] Requiring the application in the proceeding to be filed and served on each respondent, and complies with UCPR r. 112

[55] Exhibits MCG2 & MCG3, and paras 4 & 5 affidavit of Matthew Gill sworn 16 February 2006

[56] Exhibits MCG1 & MCG2, paras 2 & 3, affidavit of Matthew Gill sworn 19 April 2006

[58] UCPR r. 374(4) sets out the requirements for the content of the application

[63] [1991] HCA 54; (1991) 174 CLR 64 per Deane, J at 125

[65] Para 3.19 of applicant's Outline of Argument

[66] Para 3.19 of applicant's Outline of Argument