Cheng v Brown
[2019] VCC 1515
•24 September 2019
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-19-01888
| Cheng | Plaintiff |
| v | |
| Brown | Defendant |
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JUDGE: | Judicial Registrar Tran | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | In chambers having considered written submissions filed 17 September 2019 and 18 September 2019 | |
DATE OF RULING: | 24 September 2019 | |
CASE MAY BE CITED AS: | Cheng v Brown | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 1515 | |
REASONS FOR RULING
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Subject: Civil Procedure
Catchwords: Leave to file and serve Counterclaim – joinder of defendants
Legislation Cited: County Court Civil Procedure Rules2018 (Vic), r 9.02(b)(i); Civil Procedure Act 2010 (Vic), s 29.
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JUDICIAL REGISTRAR:
1 In this proceeding, the Plaintiff (“Mr Cheng”) seeks specific performance of a contract for the sale of a property in Reservoir for a price of $1.2M. The Defendant (“Mrs Brown”) denies she entered into the contract of sale with Mr Cheng. Mrs Brown admits she signed a version of the contract which did not have the price and other crucial details filled in and gave it to her real estate agent (“Ray White Reservoir”) but says that she did not authorise the sale of the property below her reserve price. In the alternative, she says that Mr Cheng has repudiated the contract by failing and/or refusing to pay the deposit.
2 The proceeding is listed for trial on 25 November 2019.
3 On 7 August 2019, Mr Cheng filed a summons seeking self-executing orders for further and better particulars of the Defence. The summons came on for hearing before me on 12 August 2019. During the course of that hearing, issues were raised with the pleading of the Defence, including the fact it appeared to include claims for relief against Mr Cheng. In addition, the possibility was raised that Mrs Brown may wish to join Ray White Reservoir as a Third Party.
4 I made Orders which required Mrs Brown to file and serve, by no later than 4:00pm on 19 August 2019:
“a) an Amended Defence and Counterclaim:
i) incorporating full and proper particulars, including answers to the Plaintiff’s Request for Further and Better Particulars dated 4 July 2019;
ii) marked in such a way so as to distinguish the amendments from the original Defence;
b) any application to file and serve a Third Party Notice. Any such application must be supported by an affidavit exhibiting a proposed Third Party Notice and providing evidence:
i) of the reason for any delay in seeking to file a Third Party Notice;
ii) of any prejudice which will be suffered if leave is not given; and
iii) demonstrating that the Third Party Notice has a real prospect of success.”
5 Mrs Brown did not file an Amended Defence or Counterclaim or any application to file and serve a Third Party Notice by 4:00pm on 19 August 2019.
6 On 22 August 2019, Mrs Brown filed a document headed “Form 10A” which included a “Defence” and “Counterclaim” and purported to join Ray White Reservoir as a Second Defendant to Counterclaim (“22 August Document”). That document:
a)was not filed by 4:00pm on 19 August 2019;
b)was not marked in such a way so as to distinguish the amendments from the original Defence; and
c)did not provide particulars of the allegation, in paragraph 7(b)(i), that Mr Cheng repudiated the Alleged Contract by “repeatedly failing and/or refusing to pay the Balance Deposit”.[1]
[1]In particular, in this paragraph and in a number of other paragraphs, reliance is placed on Mr Cheng’s “refusal” or “refusing” or having “refused” to pay the deposit. A refusal is an act which ought to be capable of being particularised. No particulars of this alleged refusal have been provided.
7 Even setting to one side the purported joinder of Ray White Reservoir, it did not comply with my Order of 12 August 2019 and could not be filed without the leave of the Court or the consent of Mr Cheng.
8 Mr Cheng objected to the filing of the 22 August document. On 29 August 2019, Mrs Brown then filed a further “Form 10A” which again included a “Defence” and “Counterclaim” (“29 August Document”). This time, some attempt had been made to mark the document so as to distinguish the amendments from the original Defence, however this was not comprehensive – notably the name of the purported new Second Defendant to Counterclaim was not underlined and a number of new paragraphs in the Counterclaim were not underlined. The 29 August Document still did not provide particulars of the allegation in paragraph 7(b)(i). Again, self-evidently, it was not filed by 4:00pm on 19 August 2019.
9 Mr Cheng objected to the filing of the 29 August Document. He requested a Directions Hearing to determine an application to strike out the 22 August Document and the 29 August Document. Mr Cheng accepted that Mrs Brown had an arguable counterclaim against Mr Cheng, but strenuously objected to the purported joinder of Ray White Reservoir as a Second Defendant to Counterclaim.
10 Ultimately, I decided to determine Mr Cheng’s application on the papers. My Associate wrote to the parties on 10 September 2019 and informed them of this. The letter also noted that my preliminary view was that:
a) the Amended Defence and Counterclaim did not comply with my Orders of 12 August 2019 in that it did not incorporate full and proper particulars of the allegation in paragraph 7(b)(i) of the Amended Defence and Counterclaim and it was not marked in such a way so as to distinguish all amendments from the original Defence (including, for example, amendments to the Court header); and
b) it is arguable that leave should have been sought under Rule 9.02(b) to join Ray White Reservoir as a Second Defendant to Counterclaim.
11 My Associate’s letter to the parties also required Mrs Brown:
“… to file and serve brief written submissions and any affidavit in opposition by 4:00 pm on 12 September 2019. Any such affidavit may also exhibit a proposed Further Amended Defence and Counterclaim.”
12 Mrs Brown filed her submissions on 17 September 2019.[2] She did not avail herself of the opportunity to put on any affidavit evidence nor to provide a proposed Further Amended Defence and Counterclaim.
[2] Having asked for, and been provided with, an extension of time.
13 Mrs Brown submitted that:
a) she was permitted under rule 9.02(a) to join Ray White Reservoir as a Second Defendant to Counterclaim without leave;
b) she had provided full and proper particulars of paragraph 7(b)(i) of the Amended Defence and Counterclaim; and
c) the health and condition of Mrs Brown had made it difficult for her solicitors to obtain instructions and she should be granted additional time and would be unfairly prejudiced if required to commence other proceedings against Ray White Reservoir to obtain relief against it.
14 Rule 10.03 of the County Court Civil Procedure Rules2018 (Vic) (“the Rules”) provides that:
“A defendant may join with the plaintiff as defendant to the counterclaim any other person, whether a party to the proceeding or not, who, if the defendant were to bring a separate proceeding, could be properly joined with the plaintiff as a party in accordance with Rule 9.02.”
15 Rule 9.02 of the Rules provides that:
“Two or more persons may be joined as plaintiffs or defendants in any proceeding—
(a) where—
(i) if separate proceedings were brought by or against each of them, some common question of law or fact would arise in all the proceedings; and
(ii) all rights to relief claimed in the proceeding (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or
(b) where the Court, before or after the joinder, gives leave to do so.”
16 Paragraphs (i) and (ii) of sub-rule 9.02(a) are cumulative. Mrs Brown could join Ray White Reservoir as a Second Defendant to Counterclaim in two circumstances:
a)if she complied with both paragraphs (i) and (ii) of sub-rule 9.02(a); or
b)with the leave of the Court pursuant to rule 9.02(b).
17 The 22 August Document and 29 August Document raise common questions of fact in relation to the claims made against Mr Cheng and Ray White Reservoir. However, all rights to relief claimed in the proceeding are not in respect of and do not arise out of the same transaction or series of transactions. Both are claims for breach of contract, but with respect to different contracts. Breach of contract is actionable per se.[3] The right to relief against Mr Cheng “arises out of” the contract of sale and Mr Cheng’s alleged failure or refusal to pay the deposit. The right to relief is “in respect of” the loss she has suffered because Mr Cheng failed or refused to pay the deposit. The right to relief against Ray White Reservoir “arises out of” the exclusive authority and Ray White Reservoir’s alleged completion and release of the signed contract of sale without her authority. The right to relief is “in respect of” the loss Mrs Brown will suffer as a result (ie: by reason of the claims made against her in this proceeding by Mr Cheng).
[3] see Halsbury’s Laws of Australia at [110-11075].
18 Further, in circumstances where:
a)the Order permitting leave to file an Amended Defence and Counterclaim was granted in conjunction with detailed provision for the making of an application to file and serve the foreshadowed Third Party Notice against Ray White Reservoir; and
b)it was or should have been plain that the joinder of an additional party at such a late stage may threaten the trial date,
it was not appropriate for Mrs Brown to seek to circumvent the express procedure in my Order of 12 August 2019 for applying for leave to join a Third Party by purporting to join a new party by Counterclaim.
19 If I am wrong about that, Mrs Brown nevertheless was required to comply with my Order of 12 August 2019 if she wished to file and serve an Amended Defence and Counterclaim. For the reasons given above in paragraphs [4]-[7] above, she failed to do so.
20 Leave is required for the filing of the 22 August Document and the 29 August Document. I am not persuaded in the circumstances it is appropriate to grant such leave. Mrs Brown has not filed and served a proposed Amended Defence and Counterclaim addressing the concerns expressed in the email from my Associate of 10 September 2019. Mrs Brown has also not taken the opportunity to file and serve any affidavit evidence. If it is said that the health of Mrs Brown is relevant, then an application should be made for leave and appropriate admissible evidence should be given of the facts relied upon.
21 The Defence and Counterclaim filed 22 August 2019 and the Defence and Counterclaim filed 29 August 2019 are struck out. The proceeding is listed for a Directions Hearing on 14 October 2019 at which time the Court will determine any application made by Mrs Brown by 4:00pm on 30 September 2019 for:
a)leave to file and serve an Amended Defence and any Counterclaim; and
b)leave to file and serve a Third Party Notice.
22 Any such application should be supported by an affidavit exhibiting a proposed Amended Defence and Counterclaim or Third Party Notice and providing evidence:
a)of the reason for any delay or failure to comply with Court Orders;
b)of any prejudice which will be suffered if leave is not given; and
c)demonstrating that the proposed Amended Defence and Counterclaim or Third Party Notice has a real prospect of success.
23 If no such application is made, the Directions Hearing will be vacated and the Judicial Resolution Conference will proceed on 16 October 2019.
24 Finally, I note that Mr Cheng has sought an order that Mrs Brown’s solicitors pay the costs of the application. I do not consider it is appropriate to consider such an application at this stage of the proceeding, particularly in view of the position of conflict in which it will place Mrs Brown’s solicitors on the eve of trial. I will order that Mrs Brown pay Mr Cheng’s costs of the application on a standard basis to be taxed in default of agreement and otherwise reserve costs, including in relation to any application that may be made under s 29 of the Civil Procedure Act 2010 (Vic).
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Certificate
I certify that these 7 pages are a true copy of the reasons for ruling of Judicial Registrar Tran, delivered on 24 September 2019.
Dated: 24 September 2019
Mark James
Associate to Judicial Registrar Tran
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