Camberfield Pty Ltd v Foustanis
[2003] VSC 313
•29 August 2003
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 6932 of 1999
| CAMBERFIELD PTY LTD (ACN 001 045 355) | Plaintiff |
| v | |
| PARASKEVI FOUSTANIS AND OTHERS | Defendants |
---
JUDGE: | OSBORN J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 26 AUGUST 2003 | |
DATE OF JUDGMENT: | 29 AUGUST 2003 | |
CASE MAY BE CITED AS: | CAMBERFIELD PTY LTD v PARASKEVI FOUSTANIS | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 313 | |
---
Application for summary judgments in favour of defendants – Whether claim is "absolutely hopeless".
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Cawthorn | Valos Black & Associates |
| For the Eighth Defendant | Mr M. Bevan-John | John Dimitropoulos |
| For the Ninth and Tenth Defendants | Mr G. Bloch | Rockman & Rockman |
HIS HONOUR:
This is an application for summary judgment by the eighth, ninth and tenth defendants ("the applicants"). The applicants seek summary judgment either on the basis that they have a good defence on the merits under r.23.03 or that the claim should be dismissed on the grounds that it does not disclose a cause of action or is vexatious or an abuse of the process of the Court. The latter alternatives arise both under r.23.01 and in the inherent jurisdiction of the Court.
In substance the defence contends that the claim is "absolutely hopeless", to echo the language of Dixon J in Dey v Victorian Railways Commissioners[1] when he said of the then order XIVA:
"It confers a power summarily dealing with an action which Barton J said should be reserved for exercise as to actions that are absolutely hopeless: Bayne v Riggall (1908) 6 CLR 382."
Dixon J went on to say:
"The application is really made to the inherent jurisdiction of the court to stop the abuse of its process when it is employed for groundless claims. The principles upon which that jurisdiction is exercisable are well settled. A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the courts to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process."
[1](1948) 78 CLR 62 at 90
In General Steel Industries Inc v Commissioner for Railways (NSW)[2] Barwick CJ referred to the above passage and observed:
"Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed."
[2](1964) 112 CLR 125 at 130
The plaintiff sues the applicants on a guarantee in writing which is comprised in special condition 13 of a contract for the sale of land. By that contract the plaintiff sold premises containing a brothel to Pacific Grace Pty Ltd ("Pacific"), Vimplane Pty Ltd ("Vimplane") and Andrew Portelli ("Portelli") for the price of $1,000,000. Special condition 13 of the contract further provided for a guarantee which was executed under seal by the applicants:
"13.…
We, JIM KLAPANIS and RITA KLAPANIS both of 24 Bonview Street, Malvern in the State of Victoria, the Directors of PACIFIC GRACE PTY LTD (ACN 069 073 089) and
We JOSEPH MICHAEL CUSMANO of 9 Wicklow Street, Ormond and SALVATORE MICHEL CUSMANO of 449 Bridge Road, Richmond in the State of Victoria the Directors of VIMPLANE PTY LIMITED (ACN 005 877 243) (hereinafter called 'the Guarantors') IN CONSIDERATION of the within-named Vendors described in the within Contract of Sale for the price and upon the terms and conditions therein set forth DO HEREBY for ourselves, our respective Executors, and Administrators jointly and severally covenant with the said Vendors that if at any time default shall be made in the payment of the deposit or residue of the purchase money or interest or other money payable by the Purchaser to the Vendors under the within Contract of Sale or in the performance or observance of any term or condition of the within Contract to be performed or observed by the Purchaser we will forthwith on demand by the Vendors pay to the Vendors the whole of such deposit, residue of purchase money, interest or other moneys which shall then be due and payable to the Vendors and will keep the Vendors indemnified against all loss of purchase money, interest and other moneys payable under the within Contract and all losses, costs, charges and expenses whatsoever which the Vendors may incur by reason any default as aforesaid on the part of the Purchaser. This Guarantee shall be a continuing Guarantee and shall not be released by any neglect or forbearance on the part of the Vendors in enforcing payment of any of the moneys payable under the within Contract or the performance or observance of any of the agreements, obligations or conditions under the within Contact or by time being given to the Purchaser for any such payment, performance or observance or by any other thing which under the law relating to sureties would but for this provision have the effect of releasing us our Executors, Administrators and Assigns."
The purchase has been settled and vacant possession of the property provided to the purchasers and the applicants assert that their obligations under the guarantee are now at an end.
The matter is, however, complicated by special conditions 10, 11 and 12 which provide as follows:
"10.The Purchaser shall sign an additional contract in the form annexed hereto and shall exchange parts thereof contemporaneously for the payment of the residue under this Contract on the settlement date.
11.The obligations imposed by and under the additional contract referred to in clause 10 hereof shall be guaranteed by Dimitrios Klapanis jointly and severally with the tenants in common of the property situate at and known as 24 Bonview Road, Malvern who shall each charge their right title and interest in the said property in favour of the vendor and/or its nominee so as to secure and guarantee the obligations imposed by the additional contract and shall also in order to further support and guarantee such obligations shall also procure and provide a bank guarantee from the Westpac Banking Corporation (or such other bank as may be approved by the vendors) in the sum of not less than $150,000.00 and in a form to be approved by the Vendor. Provided that the liability of the said PARASKEVI FOUSTANIS of 17 Brisbane Street, Murrumbeena, HRYSOULA KATSONOS of 65 Wheatland Road, Malvern and ANTONIA PEPPAS of 65 Wheatland Road, Malvern shall be absolutely limited to the value of their interests in the property at 24 Bonview Road, Malvern.
12.Clause 8 to 12 of this Contract shall not merge on completion of the sale of the land."
In accordance with special condition 10 an additional contract was entered into in the form annexed to the contract of sale. This provided for the payment of $400,000 to the plaintiff by Pacific and Portelli and in turn was guaranteed by the individuals specified in special condition 11. The form of additional agreement annexed to the contract of sale commenced with the following recital:
"THIS AGREEMENT is made on the day of 1998 BETWEEN CAMBERFIELD PTY LTD (ACN 001 045 355) the registered office of which is situate at 115 Myer Street, Geelong in the State of Victoria ('the Vendor') AND DIMITRIOS KLAPANIS of 24 Bonview Road, Malvern in the said State, PARASKEVI FOUSTANIS of 17 Brisbane Street, Murrumbeena, HRYSOULA KATSONOS of 65 Wheatland Road, Malvern and ANTONIA PEPPAS of 65 Wheatland Road, Malvern and ANDREW PORTELLI of 34 Stephensons Road, Mt. Waverley in the said State ('the guarantors'). WHEREAS the Vendor is desirous of selling the premises situate at and known as 5 Truck City Drive, Campbellfield in the said State ('the land') to PACIFIC GRACE PTY LTD (ACN 069 073 089) of 24 Bonview Road, Malvern, VIMPLANE PTY LIMITED (ACN 005 877 243) of 291 Burwood Road, Hawthorn and ANDREW PORTELLI of 34 Stephensons Road, Mt. Waverley ('the purchaser') and it is noted that Vimplane Pty Ltd being one of the purchasers under the Contract of Sale of the land is not a party to this agreement and whereas the Purchasers have requested that a consideration of no more than ONE MILLION DOLLARS ($1,000,000.00) be indicated on the contact AND WHEREAS the actual consideration for the sale is $1,400,000.00 AND WHEREAS the vendor has agreed to not require the payment of $400,000.000 by the purchaser on completion of the sale but has agreed to allow the purchaser to pay the said sum no later than three years after the date of completion of the sale AND WHEREAS the guarantors have agreed to guarantee the obligations of the purchaser under this agreement NOW THIS AGREEMENT WITNESSETH as follows: …"
The plaintiff claims default has occurred under the additional agreement and that the applicants are liable as guarantors with respect to such default by reason of the guarantee contained in special condition 13 of the contract of sale. In my view this construction of the guarantee is simply not open.
(a)The default is not with respect to "the deposit or residue of the purchase money or interest or other moneys payable by the purchaser to the vendors under the within contract of sale" (my emphasis);
(b)The purchaser has not defaulted "in the performance or observance of any term or condition of the within contract to be performed or observed by the purchaser". The purchaser did sign and exchange parts of the additional contract in accordance with special condition 10. Special condition 10 has been performed. The breach which has occurred is with respect to the conditions of the additional agreement.
(c)The applicants are not nominated as guarantors of the additional agreement under special condition 11. Special condition 11 is entirely consistent with the terms of the additional agreement and the separate guarantees created thereunder. In short there were two agreements and two sets of separate guarantees.
(d)The obligations created under the contract of sale merged in the transfer of land pursuant to it.
It was submitted on behalf of the plaintiff that the use of the phrase "for the payment of the residue under this contract" in special condition 10 extended the meaning of the "residue of the purchase money … payable by the purchaser to the vendors under the within contract of sale" in the special condition 13 guarantee. I reject this argument. Condition 10 requires the execution and exchange of an additional contract between parties in part different to those to the contract of sale. It does not require the payment of money. The residue payable on the settlement date referred to in condition 10 is the $900,000 payable upon the date upon which vacant possession of the property must be provided. This residue has been paid.
Mr Cawthorn urged upon me that extrinsic evidence may be admissible to resolve the meaning of a written agreement in the circumstances identified by Mason J in Codelfa Constructions v State Railway Authority of New South Wales[3]. I accept that this is so and that evidence as to the subjective intentions of the parties may in some circumstances be relevant. As Santow J stated in Spunwill Pty Ltd v BAB Pty Ltd:
"Under the objective theory of the contract, evidence of actual intention is admissible in the limited circumstance where it is evidence of a 'shared subjectiveness'; that is to say of matters in common contemplation or of common assumption. Such matters of mutual subjective intention are themselves part of the objective framework of facts within which the contract came into existence, and are thus receivable as part of the surrounding factual circumstances …"[4]
[3](1982) 149 CLR 337 at 352
[4](1994) 36 NSWLR 290 at 309
In the present case, however, I am concerned with the terms of a guarantee. In my view its language is unambiguous and clear. It relates to performance of the contract of sale and not to the additional agreement. The true dispute is not as to what sums payable under the contract of sale are covered by the guarantee but whether the guarantee extends to the additional agreement (cf Hyundai Shipbuilding and Heavy Industries Co Ltd v Pournaras[5]; Hyundai Heavy Industries Co Ltd v Papadopoulos[6]). For the reasons I have stated I am of the opinion the terms of the guarantee are plain.
[5](1978) 2 Lloyds Reports 502
[6](179) 1 Lloyds Reports 130 (CA) and 1981 WLR 1129 (HL)
For the above reasons there will be summary judgment for the applicants and the proceedings against them are dismissed.
I will hear counsel as to the question of costs.
---
0
0
0