Bill Adams Tiling Pty Ltd v Calabrese No. Scciv-03-374

BILL ADAMS TILING PTY LTD v CALABRESE
[2003] SASC 184
Magistrates Appeal: Civil

SULAN J This is an appeal from a summary judgment of a Magistrate obtained on 6 March 2003.
Background
The respondent, (“Calabrese”), the plaintiff in the action, issued proceedings in the Magistrates Court alleging that on or about 3 July 2002 Calabrese and Bill Adams Tiling Pty Ltd, the appellant, which is the defendant in the proceedings (“Bill Adams Tiling”) had entered into a contract for Calabrese to supply to Bill Adams Tiling a quantity of Wistow veneer rock face by the first week of October 2002. In the Particulars of Claim, Calabrese alleged that on 5 September 2002 Bill Adams Tiling faxed a document to him cancelling the contract. On 20 September 2002 Calabrese advised Bill Adams Tiling, in writing, that the stone would be ready fifteen days after confirmation by Bill Adams Tiling of its intention to proceed with the contract. Calabrese gave notice that if confirmation was not received within forty eight hours Calabrese would treat Bill Adams Tiling’s conduct as a repudiation of the contract. No confirmation was received. Calabrese sued for loss of profit.
In the Defence, Bill Adams Tiling denied that a contract had been entered into as alleged by Calabrese. It alleged that during the course of negotiations between Nicholas Charles Wilson (“Wilson”), on behalf of Bill Adams Tiling and Calabrese, Calabrese represented that he would need approximately three months from the date of order to produce the rock face. Based upon that representation, Bill Adams Tiling faxed the order on 10July 2002. It admitted that it had cancelled the order, but pleaded that it was entitled to do so because of Calabrese’s failure to provide confirmation prior to 5September 2002 that he would, inter alia, be in a position to deliver the stone within three months from the date of the order. Bill Adams Tiling denied that it had repudiated the contract and denied that Calabrese was entitled to the relief claimed.
Calabrese sought summary judgment. He relied upon affidavits of Rito Calabrese sworn on 28 February 2003 and Christopher John Taylor sworn on 28 February 2003. Bill Adams Tiling opposed the application and relied on an affidavit of Nicholas Charles Wilson sworn on 4 March 2003. On 6 March 2003 the learned Magistrate entered judgment in favour of Calabrese and directed that the action be referred to trial to assess the quantum of Calabrese’s damages.
In his affidavit Rito Calabrese contended that on 22 May 2002 he was contacted by Nicholas Wilson, the manager of Bill Adams Tiling. They discussed the supply by Calabrese to Bill Adams Tiling of a quantity of Wistow stone. He stated that in June 2002 he had received a phone call from Wilson confirming that the job was to go ahead. One week later Wilson advised Calabrese that he wished to change the order. There was then a discussion about the price and in early July 2002 Wilson again telephoned and a price was agreed. Wilson agreed to fax an order within one week. Calabrese stated that he did not receive the order, but he proceeded to sort the stone with a view to completing the order.
According to Calabrese, on 5 September 2002 Wilson telephoned and asked whether the order was ready, to which Calabrese replied that he had not received the facsimile, but in any event it would be ready in ten days to two weeks time. It was agreed that Wilson would re‑send the order. Calabrese stated that Wilson telephoned him again and queried whether he had access to the stone. Calabrese confirmed that he had the stone in stock. Shortly thereafter, Wilson telephoned and cancelled the order. The cancellation was confirmed in a facsimile message dated 5 September 2002 which stated, inter alia:
“We confirm this morning’s discussion that production of the Wistow stone veneer for the project has not yet started”.
Calabrese denies that he told Wilson that production of the stone veneer had not yet started. Calabrese stated in his affidavit that he had indicated to Wilson that he could complete the order within ten days to two weeks. Calabrese also relied upon an affidavit of Christopher John Taylor sworn on 28 February 2003 which confirmed that Calabrese had instructed an employee to commence work to obtain the stone in mid to late July 2002. Taylor stated that at the time the order was cancelled in September 2002 he had begun to prepare the stone.
On 20 September 2002 solicitors for Calabrese wrote a letter to Bill Adams Tiling in which they stated:
“We are instructed that our client contracted to sell you 190 square metres of Wistow veneer rock face on or about 3 July 2002 at $145 per square metre. The stone was to be provided in three months from that date, namely by the first week of October 2002.
Although our client anticipated a faxed confirmation of the order the same was not received but our client was not concerned about that and proceeded to get the stone ready.
You telephoned on 5 September 2002 and inquired whether the stone was ready. Our client said that it was not available immediately but would be ready in 2 weeks (which was well within the three month period contracted for). Our client also questioned why you had not faxed the purchase order as indicated...
Our client calls upon you to complete. The order will be ready for collection 15 days after confirmation by you that you intend to proceed. If you do not confirm within 48 hours our client will accept your conduct as repudiation of the order. Our client’s profit margin is $50 per metre that is $9,500. We are instructed to issue a summons out of the Magistrates Court in Adelaide in that sum in the event that the order is not confirmed.”
Wilson responded by letter of 24 September 2002 in which he stated, inter alia:
“Mr Calabrese appears to have a different recollection of our phone conversations on 5 September than I do.
Rito was initially surprised to receive my first call inquiring about the progress of production. He claimed not to have received my order and had therefore not started any processing. When I questioned his ability to supply, as I had heard he did not have direct access to the raw material, he said he had some stock and if I were to fax him the order he would check if he had enough stock to complete our order.
This I did and some time later Rito called to confirm he had the raw material and he could start production straightaway.”
Wilson spoke to Calabrese shortly after the letter had been sent and he cancelled the order.
Bill Adams Tiling relied upon an affidavit of Nicholas Charles Wilson sworn on 4 March 2003. In his affidavit Wilson referred to his conversation with Calabrese in early July 2002. His recollection was that Calabrese told him that he, Calabrese, would need approximately three months from the date of the order to produce the rock face. Wilson stated that he had faxed an order to Calabrese on 10 July 2002. He stated that he had tried to telephone Calabrese, without success, and on 22 July 2002 he had re-faxed the order asking for confirmation of its receipt. He said he heard from a person who identified herself as Calabrese’s wife, that she had received the order and would advise Calabrese when he returned from interstate as to its receipt. He deposed that on 5 September 2002 he telephoned Calabrese who advised him that an order had never been received. Wilson therefore re-faxed the order on 5 September 2002. Wilson stated that after the conversation on 5 September 2002 he was concerned that Calabrese would not be able to fulfil the order. In that conversation Calabrese told Wilson that he had enough stock to fulfil the order and he could start processing the order. Wilson stated that as Calabrese had told him in the July conversation that it would take three months from the date of the order to process it, he concluded that Calabrese would not be able to perform his contractual obligations within the timeframe specified. He therefore advised Calabrese that he was cancelling the order.
The Magistrate’s findings
The Magistrate held that the “facts were beyond controversy”. He found that there had been oral conversations between Calabrese and Wilson which led to the conclusion of a contract for the sale and purchase of slate material. As to Wilson’s recollection of events the Magistrate said:
“On the defendant’s version it seeks to suggest that Mr Calabrese’s business would have been incapable of supplying the stone by the due date. It uses that on one version as an excuse to justify the cancellation of the order.
The answer to that is complete. There was no suggestion in the original order of a particular date and time being of the essence and there is nothing in the conduct of Mr Calabrese to suggest that he would have been unable to complete the terms of the original contract by the first week of October. The cancellation of the contract was not justified and it leaves Calabrese entitled to the profit on his lost bargain. The profit is still controversial, I cannot on the information here accept that there is no other view than Mr Calabrese’s that he missed out on $50 a tonne. The matter will have to proceed on an assessment of damages.”
The Appeal
In its Notice of Appeal, Bill Adams Tiling relies upon the following grounds:
“1.The learned Magistrate erred in finding that there was no factual dispute between the parties.
2.The learned Magistrate erred in finding that the contract between the parties was solely defined by the faxed order dated 10 July 2002.
3.The learned Magistrate erred in finding that the appellants/defendants’ defences to the summary judgment application of the respondent/plaintiff were devoid of merit and could not succeed on any matter of fact or of law.”
Rule 8 of the Magistrates Court (Civil) Rules 1992 provides, as far as is material:
“(1)Where a party wishes to obtain:
(a)     Summary judgment in, or the disposal of the whole or part of, an action; or
(b)    Immediate relief,
he or she may do so on application accompanied by an affidavit specifying
(c)    Why the other party does not have a good action or defence on the merits on any possible view of the facts or law; or
(d)    Why such relief should be granted.
(2)The Court may -
(a)     Enter judgment accordingly;
(b)    Grant the whole or part of the relief sought, and order that the action continue in relation to the part not disposed of;
(c)    Make an order for an early trial; or
(d)    Make any other order.”
The expression “summary judgment” is not defined in the Magistrates Court (Civil) Rules 1992. However, in Battiste v Mulvaney Doyle CJ held that “summary judgment” refers to the well-known way of dealing with cases which are so clear that they should not be permitted as a matter of convenience and justice to go to trial[1]. If the defendant has an arguable defence on the merits it cannot be said that it cannot succeed in the action on any view of the facts or law. In General Steel Industries Inc v Commissioner for Railways (NSW) and Others Barwick CJ confirmed that a court should approach an application to summarily terminate an action with caution and such relief should not be granted “except in a clear case where the court is satisfied that it has the requisite material and necessary assistance from the parties to reach a definite and certain conclusion”[2]. His Honour said that, having reviewed the authorities, some of which dealt with the Court’s inherent jurisdiction and others which dealt with Rules of the Court that:
“It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the Court is invited, as in this case to exercise its powers of summary dismissal - is clearly demonstrated..............
At times the test has been put as high as saying that the case must be so plain and obvious that the Court can say at once that the Statement of Claim, even if proved, cannot succeed; or ‘so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument’; ‘so to speak apparently at a glance’.”[3]
[1] Unreported judgment No S6419 of 1997.
[2] 112 CLR 125 at 129.
[3] ibid
Mr Durrant for the appellant submitted that the Magistrate was in error. He submitted that it is arguable that it was an express term of the contract that the product be supplied within three months of 10 July 2002. He claimed that it was therefore an essential term of the contract that the order be met on or before 10 October 2002. Mr Durrant further submitted that if the court accepted the evidence of Wilson that Calabrese had told him that it would take approximately three months from the date of order to process the order, and if, on 5 September 2002 Calabrese indicated to Wilson that the processing of the stone had not yet commenced, then it was reasonable for Wilson to conclude that the order could not be completed within the timeframe required. Mr Durrant submitted that it was arguable that there had been an anticipatory breach and therefore Bill Adams Tiling was entitled to repudiate the contract.
Mr Durrant argued that a party is entitled to terminate a contract in a case where the repudiation precedes the time of performance if it is clear that the promiser will not (or cannot) perform. He submitted that a promisee is entitled to anticipate a breach which is, for practical purposes, inevitable. He further submitted that it was an essential term of the contract that required Calabrese to deliver the stone within three months from 10 July 2002. Mr Durrant submitted that on 5 September 2002 it became clear to Wilson that Calabrese could not comply with that essential term, an anticipatory breach had occurred and Bill Adams Tiling was therefore entitled to terminate the contract.
Mr Swan for the respondent conceded that one of the issues to be determined was whether time was an essential term of the contract. If it was, a further question would arise as to whether Calabrese had told Wilson that it would take three months from the date of the order to produce the rock face.
Mr Swan submitted that the appellant could only establish a concern by Mr Wilson that the respondent would not be able to deliver the stone within the required time and that was not a sufficient basis upon which the appellant could have reasonably concluded that the respondent had repudiated the contract. He submitted that the appellant was unable to establish an anticipatory breach which entitled it to cancel the contract.
I do not agree with Mr Swan’s submission. In his affidavit Wilson stated that he had concluded that Calabrese was not ready or willing to perform his contractual obligations within the timeframe specified. Wilson had arrived at that conclusion because of the alleged earlier conversation when Calabrese told him that he would need three months from the date of the order to produce the stone. Calabrese denies that he said anything of that kind to Wilson. That is an issue of fact which will have to be resolved at trial.
In my view, the affidavits raise disputes as to crucial matters of fact. In particular, the details of the discussions that took place between Calabrese and Wilson in 2002 are disputed. Further, there is a factual question as to whether Calabrese informed Wilson on 5 September 2002 that it would take him 10 days to 2 weeks to complete the order. Another issue arises as to whether, in its facsimile of 5 September, Bill Adams Tiling had excused any breach or anticipated breach by Calabrese.
There are also issues of law which require determination, including the question of whether time was an essential term of the contract and, if so, whether Calabrese had repudiated the contract by advising Wilson on 5 September 2002 that he had not yet commenced production of the stone.
I consider that the Magistrate was in error in concluding that the facts were beyond controversy. There are both factual and legal disputes that arise on the pleadings and affidavits. I conclude that the respondent has not established that this is a case which is so plain and obvious that the defendant cannot succeed. There are factual and legal issues which must be resolved at trial.
Accordingly the appeal is allowed. I set aside the judgment and remit the case to the Magistrates Court for trial.

[2003] SASC 184

13 June 2003