City Street Holdings Pty Ltd v LYDALE Holdings Pty Ltd
[1999] WASC 99
CITY STREET HOLDINGS PTY LTD -v- LYDALE HOLDINGS PTY LTD [1999] WASC 99
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 99 | |
| Case No: | CIV:2220/1997 | 16 JULY 1999 | |
| Coram: | MASTER BREDMEYER | 22/07/99 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed subject to a condition | ||
| PDF Version |
| Parties: | CITY STREET HOLDINGS PTY LTD (ACN 051 347 150) LYDALE HOLDINGS PTY LTD (ACN 009 097 965) |
Catchwords: | Summary judgment by a defendant and application to strike out a pleading |
Legislation: | Nil |
Case References: | Hadley v Baxendale (1854) 9 Ex 341 Hungerfords v Walker (1988) 171 CLR 125 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
LYDALE HOLDINGS PTY LTD (ACN 009 097 965)
Defendant
Catchwords:
Summary judgment by a defendant and application to strike out a pleading
Legislation:
Nil
Result:
Application dismissed subject to a condition
(Page 2)
Representation:
Counsel:
Plaintiff : Mr R R Cywicki
Defendant : Mr L F A Nixon
Solicitors:
Plaintiff : J Parry & Co
Defendant : Phillips Fox
Case(s) referred to in judgment(s):
Hadley v Baxendale (1854) 9 Ex 341
Hungerfords v Walker (1988) 171 CLR 125
Case(s) also cited:
Nil
(Page 3)
1 MASTER BREDMEYER: This is an application by the defendant either for summary judgment in respect of par 25 of the reamended substituted statement of claim (the statement of claim) or to strike out par 25 as scandalous, frivolous or vexatious.
2 The application for summary judgment is late. It needs to be brought within 21 days of the filing of the defendant's appearance. The defendant seeks leave to bring the application late. The application was brought by chamber summons on 14 June 1999. Given that par 25 of the present statement of claim did not appear in the original and given that the present statement of claim was only finalised on 14 June 1999, when Master Sanderson gave leave to amend in terms of the minute of that document, this application was brought 22 days after 14 June. That is a reasonable explanation for its lateness and I propose to give leave to bring the application out of time.
3 The plaintiff's claim is one for breach of contract and breach of fiduciary duties. The plaintiff is a company controlled by Mr Alan Holding, who was a contract administrator and supervisor. It is pleaded that in 1995 he entered into an oral agreement with the defendant to work for the defendant on a certain project at the rate of $35 an hour, plus reimbursement of expenses, plus one-third share of the profits. The money was to be paid to his company. Mr Holding was employed under that contract and the plaintiff company was paid certain wages and a sum on account of profits. He was sacked on 22 May 1996. The plaintiff sues for unpaid wages and expenses and for the unpaid part of its share of the profits. It says that the profits were artificially reduced by unsubstantiated deductions which reduced its share accordingly. The plaintiff seeks an account of the actual net profit earned under the construction contract.
4 The paragraph in dispute, par 25, reads as follows:
"25. By reason of the Defendant's failure to account and pay to the Plaintiff its net profit share as pleaded in paragraph 24 and its contractual entitlements as pleaded in paragraph 15 herein the Plaintiff has suffered consequential loss and damage as hereinafter particularised:
PARTICULARS
- On or about 2nd May 1996 the Plaintiff purchased an investment property at 15 Park Street, Como in expectation of receiving contractual benefits pursuant to the Contract.
(Page 4)
- In early May of 1996 the Defendant through its servant and/or agent Darrel Richard Sales was advised by Mr Alan Holding on behalf of the Plaintiff that the Plaintiff intended to utilize its contractual entitlements and its nett (sic) profit share to purchase an investment property.
By reason of the Defendant's breaches of the Contract the Plaintiff has incurred additional fees and charges associated with obtaining alternative finance for the purchase of the said investment property full particulars of which will be supplied before trial."
5 Mr Nixon's affidavit in support annexes documents which show that the plaintiff, City Street Holdings Pty Ltd, is the trustee for the Aljan Family Trust, of which the principal beneficiaries are Alan and Janet Holding. That fact is not pleaded in the statement of claim. The plaintiff, as trustee for the Aljan Family Trust, purchased a property at 15 Park Street, Como, in May 1996 for $315,000. The contract for sale was signed on 2 May 1996 and the settlement date was 31 May 1996. The plaintiff, as trustee, borrowed from National Australia Bank in order to finance the purchase.
6 The defendant's argument is that (1) it is not pleaded that the claim is brought by the plaintiff in its capacity as trustee of the trust; (2) the plaintiff has not alleged that the defendant owed the trust any duty; (3) the damages claimed are for loss to the trust and not to the plaintiff; and (4) it cannot be argued on the facts stated that the loss to the trust was foreseeable or in the contemplation of the parties when they made the contract pleaded in the statement of claim.
7 I agree with the plaintiff on the first three arguments above.
8 I do not agree with the defendant's argument on the fourth point. Hadley v Baxendale (1854) 9 Ex 341 said damages for breach of contract should be (1) such as may fairly and reasonably be considered to arise naturally from the breach of contract itself or (2) such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it. But it is clear from Hungerfords v Walker (1988) 171 CLR 125 that damages for the cost of borrowing money to replace money withheld in consequence of the defendant's breach of contract or of the defendant's tort is directly related to the wrong and is not too remote as to be unrecoverable (p146).
(Page 5)
- It is no objection to the recovery of the cost of borrowing as a consequential loss that the loss occurred after the plaintiff's cause of action accrues or becomes complete (p146). This kind of loss is a foreseeable loss necessarily within the contemplation of the parties, which is directly related to the defendant's breach of contract (p149).
9 Given that I consider the plaintiff's claim for this head of damages is arguable if pleaded properly, then I do not consider an order of summary judgment for the defendant is justified. I will grant the application to strike out and give the plaintiff leave to amend the statement of claim. I will hear the parties on costs.
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