D J Piercy Pty Ltd v Parsons Management Group Pty Ltd
[2014] WADC 127
•18 SEPTEMBER 2014
D J PIERCY PTY LTD -v- PARSONS MANAGEMENT GROUP PTY LTD [2014] WADC 127
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WADC 127 | |
| Case No: | CIV:4003/2013 | 4 AUGUST 2014 | |
| Coram: | DEPUTY REGISTRAR HARMAN | 18/09/14 | |
| PERTH | |||
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Applications successful | ||
| PDF Version |
| Parties: | D J PIERCY PTY LTD COCKBURN CENTRAL SELF STORAGE PTY LTD PARSONS MANAGEMENT GROUP PTY LTD |
Catchwords: | Practice Western Australia Practice under the Rules of the Supreme Court of Western Australia Application for summary judgment alternatively to strike out parts of a pleading Claim for breach of duty of care Duty of care Loss |
Legislation: | Nil |
Case References: | Nil |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- First plaintiff
COCKBURN CENTRAL SELF STORAGE PTY LTD
Second plaintiff
AND
PARSONS MANAGEMENT GROUP PTY LTD
Defendant
Catchwords:
Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Application for summary judgment alternatively to strike out parts of a pleading - Claim for breach of duty of care - Duty of care - Loss
Legislation:
Nil
Result:
Applications successful
Representation:
Counsel:
First plaintiff : Mr M Curwood
Second plaintiff : Mr M Curwood
Defendant : Mr J P Cook
Solicitors:
First plaintiff : Frichot & Frichot
Second plaintiff : Frichot & Frichot
Defendant : Mendelawitz Morton
Case(s) referred to in judgment(s):
Nil
1 DEPUTY REGISTRAR HARMAN: The action was commenced by what is now the first plaintiff. The defendant filed a defence. Upon the second plaintiff being joined a minute of proposed amended writ with indorsed statement of claim was constituted as the writ.
2 The defendant has issued an application for summary judgment against each plaintiff and to strike out parts of the pleading.
3 According to the statement of claim the second plaintiff is wholly owned by the first and each is associated with Donald James Piercy and his son Peter James Piercy. By February 2008 the Piercys had agreed that the first plaintiff would construct a self-storage facility on land that it then owned for use by the second defendant. By written agreement dated 1 September 2008 the first plaintiff and the defendant became parties to an agreement for construction of the facility. Part of the works to be performed by the defendant under the agreement involved the supply and installation of three hoists; an electrical switchboard; emergency light fittings; and an automatic sliding gate. Since the time that the works were completed in 2009 the second plaintiff has operated its self-storage business from the premises. The second plaintiff has met the cost of repairs, maintenance and some replacement costs associated with the specified components of the works. The plaintiffs have detailed likely future replacement costs of one of those components and the prospect of the second plaintiff's associated business losses. All of the relevant expenditure of the second plaintiff and its likely future expenses and anticipated business losses either have been or will be charged by the second plaintiff to the first plaintiff. The first plaintiff claims the loss but to the extent that it cannot recover the second plaintiff would do so. On 30 December 2011the first plaintiff transferred the land to Peter James Piercy.
4 Broadly the allegations of material fact that I have canvassed are supported by evidence of Peter James Piercy according to which he is a director of each plaintiff and the person with the day-to day running of the second plaintiff's self-storage business. Under the heading 'Relationship between the first plaintiff and the second plaintiff' he deposes as follows:
26. The first plaintiff and the second plaintiff are associated companies.
27. It has been resolved by the first plaintiff and the second plaintiff that the costs for the repairs carried out to the goods paid by the second plaintiff are to be charged to the first plaintiff.
28. Accordingly, I have instructed Blythe Partners, who are the accountants for the first plaintiff and the second plaintiff, to on-charge the costs paid by the second plaintiff in respect of the repair and/or replacement of the goods to the first plaintiff.
29. I am told by the accountant from Blythe Partners and I variably believe that the accountant has charged the costs paid by the second plaintiff in respect of the repair and/or replacement of the goods to the first plaintiff in the accounting and taxation records of the companies in accordance with my instructions.
5 In their submissions in opposition to the application for judgment the plaintiffs have contended as follows:
8. (The first plaintiff) has incurred a liability in the amount of the rectification costs. It has incurred that liability notwithstanding that those costs were originally paid by (the second plaintiff).
9. Contrary to the submission made on behalf of the defendant … there does not have to be pleaded in the statement of claim a 'legal basis' for (the second plaintiff) to charge (the first plaintiff) for the money expended in the rectification costs.
10. In an affidavit sworn by Peter James Piercy on 7 July 2014 in opposition to the application for judgment, Mr Piercy has deposed that the plaintiff companies are associated and that it has been resolved by both of them that the costs for the repairs paid by (the second plaintiff) are to be charged to (the first plaintiff) and that has occurred in the accounting and taxation records of the companies. The relationship between the parties and the agreement between them is pleaded at par 4 of the statement of claim.
11. Accordingly, for the purposes of the summary judgment application there is evidence that (the first plaintiff) has suffered loss in the amount of the rectification costs because (the second plaintiff) has charged that amount to it and it is a liability of (the first plaintiff).
6 In the application for judgment the defendant bears the onus. The result of the application depends upon the clarity of the case put against the respondents.
7 The sole cause of action brought by the second plaintiff is for damages for loss arising from breach of duty of care. The duty of care is pleaded at par 10 by reference to the works the subject of the agreement with the first plaintiff.
8 The first contention of the applicant is that there is no basis for the allegation that it owed the specified duty of care.
9 There is no pleading that would suggest any relationship between the second plaintiff and the defendant either by reference to the works or at all. There is no pleading that the second plaintiff acquired some benefit under the agreement between the first plaintiff and the defendant. There is no pleading that at any time the second plaintiff had any interest in the land upon which the works were undertaken.
10 The applicant's second contention is that there is no scope for any finding any loss.
11 Paragraph 19 of the pleading is as follows:
By reason of the defendant's breach of its duty of care to the plaintiffs the plaintiffs have suffered loss and damage.
PARTICULARS
A. The cost to remove 2 of the supplied hoists, and supply and install 2 replacement goods hoists was $138,554.98 which sum was paid by the second plaintiff;
B. The anticipated cost to remove the third supplied hoist, and supply and install a third replacement goods hoist is $102,449.60;
C. The second plaintiff has and will also incur further costs in respect of the removal and relocation of existing customers from self-storage units adjoining the supplied hoists, including potential lost rental income in respect to such units, with the particulars of such further costs to be provided prior to trial;
D. The second plaintiff has incurred costs in repairs to the supplied hoists, full particulars which will be provided prior to trial;
E. The second plaintiff incurred costs in the sum of $1,254.79 for inspection and testing of the switchboard and $5,886.20 for purchasing a replacement switchboard;
F. The second plaintiff incurred costs in the sum of $4,040.30 for replacing the emergency lights that were not working;
G. The second plaintiff incurred costs in the sum of $7,888.78 for the repair and replacement of a number of items and components of the gate including the gate's motor, keypad system, battery, safety beams, charger and circuit board;
H. The second plaintiff has and will charge to the first plaintiff any and all costs it has paid as set out above together with any lost rental income; and
I. All loss and damage particularised above is claimed by the first plaintiff. To the extent that the first plaintiff cannot recover the loss and damage particularised the second plaintiff claims that loss and damage.
12 The applicant submits that par H and the first part of par I of the particulars negate the allegation that presently the second plaintiff has suffered any loss. It also draws upon the evidence of Piercy and refers to the plaintiffs' submissions.
13 The particulars operate so as to confine the allegation of loss to the extent of the second plaintiff's expenditure, the prospect of its future expenditure and its prospective business losses.
14 On the evidence of Piercy I am satisfied that the cost of relevant expenditure of the second plaintiff has been subjected to a process by which it has been accounted for in the books of the first plaintiff. There is no explanation either in the pleading or the evidence as to whether the second plaintiff has recovered the cost of its expenditure. There is insufficient to conclude that the second plaintiff has had the benefit of any arrangement between the plaintiffs.
15 Upon the application of the test for success in the application I have sufficient doubt as to the clarity of the case that the cost of expenditure by the second defendant has accrued to the first that it would be unsafe to award summary judgment.
16 The case for judgment against the first plaintiff is limited to the claim of breach of duty of care. The basis of the application is that it has sustained no loss. The applicant submits that any actual cost to the first plaintiff of its accommodation of the second arises from its resolution.
17 Loss is an essential feature of the cause of action. I am satisfied that the first plaintiff resolved that it would accommodate the second plaintiff and it did so. But for the implementation of the resolution the first plaintiff could not have projected any loss.
18 It would be a bold step on an application for summary judgment to find against plaintiffs that assert a duty of care and loss arising from breach however in the circumstances of each of the cases presented I am persuaded that it is appropriate to do so. I am satisfied that in the case of the second plaintiff there is no basis for it to contend for the specified duty of care and that the first plaintiff has sustained no loss consequent upon any act or omission of the defendant.
19 As for the strike out application, it is inevitable that the success of the summary judgment application would have an impact upon the pleading. I will address what would remain to the extent that I consider that the application is justified by modern practice.
20 The allegation at par 3 that the plaintiffs were associated with the Piercys may bear upon the allegation of ownership of the land at par 4.1 and par 14 but an significance of that would emerge from ownership is compromised by the fact that the allegation at par 4.1 is put by reference to a date that preceded the date of the agreement with the defendant. Of itself the pleading of the agreement calls for an explanation yet none is provided. In my opinion each of the allegations at pars 3.4 and 14 ought be struck out.
21 Paragraphs 7, 8 and 9, raise allegations that would establish ground for the application of the Sale of Goods Act 1895. The defendant contends that the Act would have no application to a transaction under which one party agrees to incorporate goods within a building in the course of its construction.
22 In my opinion there should be no difficulty in recognising that by the description of what the plaintiff defines as goods, once installed would become fixtures. It would follow that under the agreement there was no transfer of property in goods but rather a process for the transformation of goods into fixtures.
23 It follows that par 11.3 by which the plaintiff would invoke the Act along pars 7, 8 and 9 and the plaintiff's reference to breach of implied term at par 15 ought to be struck out.
24 At par 16 the plaintiff alleges a resolution of one or other or both plaintiffs that the hoists be removed and replaced. In light of the findings that I have made on each part of the application to this point it is appropriate that it be struck out.
25 As for par 17 it asserts that in breach of the agreement the first plaintiff has suffered loss. That allegation is confused by the particulars. In my opinion it is appropriate that any arrangement between the plaintiffs be the subject of allegation of material fact. Paragraph 17 ought to be struck out.
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