Hanson Construction Materials P/L v Norlis & Ors [2010] QSC 34

Her Honour Wilson found the holding defence prepared and filed by a very inexperienced solicitor in the terms below did not discharge the requirements of rule 166 of the Uniform Civil Procedure Rules (“UCPR”):

[5] On 19 August 2009 the second and third defendants filed a notice of intention to defend and defence. The defence was in these terms –

“1. The Second and Third defendants (“the defendants”) are unable to plead further to the Statement of Claim as it is defective and embarrassing on its face and fails to plead a cause of action against the Defendants. The Defendants are in the process of requesting clarification of the Statement of Claim, including further and better particulars. Until that clarification and particulars have been provided, and the Defendants afforded an opportunity to complete an investigation of the facts alleged, the Defendants are unable to properly plead to these proceedings. For these reasons the Defendants deny the allegations contained in the Statement of Claim.

2. Save as specifically admitted, the Defendants deny each and every allegation of the Plaintiff as if each allegation was transversed [sic] in this pleading.”

The effect was deemed admissions to the guarantee pleaded by the plaintiff.

The error was compounded by the filing of an amended defence without leave.  Her Honour confirmed that leave is first required pursuant to rule 188 of the UCPR:

[16] A party may withdraw an admission made in a pleading only with the Court’s leave.  The following matters are generally relevant to the exercise of the discretion whether to grant leave:

  •  how and why the admission came to be made;
  •  the evidence surrounding the issues the subject of the admission;
  •  whether there is likely to be a real dispute about the evidence;
  •  any delay in making the application for leave to withdraw the admission;
  •  prejudice to the other party.

Ridolfi v Rigato Farms Pty Ltd [2001] 2 Qd R 455; Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 at [742] –[750]; Civil Procedure Queensland [188.1] page 8271.

An application was made and her Honour ruled against leave being granted and accordingly summary judgment followed.

With respect to the deed of company arrangement her Honour relied on sections 444D-444H of the Corporations Act 2001 (Cth.) and Stone J in City of Swan v Lehman Bros Australia Ltd (2009) 179 FCR 243 at 247, that it does not affect a creditor’s rights under a guarantee or indemnity.

As far as whether it was an equitable mortgage or charge, her Honour did agree with the submissions of the second and third defendants that the guarantee gave rise to a charge only.

Brisbane Barrister – David Cormack

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