Dalla Riva (Aust) Pty Ltd v Bestbar (Vic) Pty Ltd
[2016] WASC 36
•11 FEBRUARY 2016
DALLA RIVA (AUST) PTY LTD -v- BESTBAR (VIC) PTY LTD [2016] WASC 36
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 36 | |
| Case No: | CIV:1978/2015 | 8 DECEMBER 2015 | |
| Coram: | MASTER SANDERSON | 11/02/16 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed Part of the statement of claim struck out | ||
| B | |||
| PDF Version |
| Parties: | DALLA RIVA (AUST) PTY LTD BESTBAR (VIC) PTY LTD |
Catchwords: | Defendant's application for summary judgment Turns on own facts |
Legislation: | Instruments Act 1958 (Vic) Limitation Act 2005 (WA) Rules of the Supreme Court 1971 (WA) Statute of Frauds (1677) (Imp) (WA) Supreme Court Act 1935 (WA) |
Case References: | Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994) Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
BESTBAR (VIC) PTY LTD
Defendant
Catchwords:
Defendant's application for summary judgment - Turns on own facts
Legislation:
Instruments Act 1958 (Vic)
Limitation Act 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Statute of Frauds (1677) (Imp) (WA)
Supreme Court Act 1935 (WA)
Result:
Application dismissed
Part of the statement of claim struck out
Category: B
Representation:
Counsel:
Plaintiff : Mr M M Mony de Kerloy
Defendant : Ms C Button
Solicitors:
Plaintiff : Mony de Kerloy Barristers and Solicitors
Defendant : Minter Ellison
Case(s) referred to in judgment(s):
Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994)
Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
1 MASTER SANDERSON: This is the defendant's application for summary judgment. The defendant required an extension of time within which to bring the application. The plaintiff did not oppose the extension being granted and accordingly at the commencement of the hearing I indicated to the parties there would be a grant of leave to bring the application.
2 There are significant differences between a plaintiff's application for summary judgment brought under O 14 of the Rules of the Supreme Court (WA), and a defendant's application for summary judgment brought under O 16. A plaintiff when making an application must file and serve an affidavit verifying the facts set out in the statement of claim and confirming a belief the defendant does not have a defence to the claim. Once that is done the evidentiary onus shifts to the defendant. It is for the defendant to produce evidence to establish there is a serious question to be tried. Generally speaking a plaintiff's summary judgment application is brought before a defence is filed. Once the application is made it is bad practice for the defendant to file a defence. That means the defendant is at large - they can rely on any matter they say will provide an answer to the plaintiff's claim. They are not confined by any pleading.
3 The position is somewhat different on a defendant's summary judgment application. The application is brought after a statement of claim has been filed. That means there is in existence a pleading which delineates the plaintiff's claim. In Civil Procedure Western Australia the learned authors, relying on the decision of Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994), put the position as follows:
In resisting an application for summary judgment under this order the plaintiff may be confined to the causes of action raised by his or her indorsement or statement of claim and, as mentioned above, the defendant will succeed if he or she can demonstrate that there is no serious question to be tried upon any cause of action raised by the plaintiff. It is not for the court to identify causes of action which are not pleaded but which the evidence might arguably support [16.0.1].
4 There is one further significant difference between O 14 and O 16. If a plaintiff's application for summary judgment is dismissed there is no right of appeal. But if a defendant's summary judgment is dismissed there is such a right. While this seems to be an anomaly in the Supreme Court Act 1935 (WA) it is a matter of longstanding and must be accommodated. It has been my practice when dismissing a summary judgment application made by the plaintiff to give brief oral reasons for doing so. A summary judgment application is not a time for making findings of fact or expanding upon the law which might be relevant to the case. It is a situation where the less said the better. But where, as under O 16, a right of appeal exists and the Court of Appeal may be called upon to review a decision and more detailed reasons are necessary to establish how the decision was reached. But still given the application is to be dismissed no findings of fact should be made and any analysis of the legal position should be limited and in general terms. It is a matter of treading a fine line.
5 In the Forsayth decision the court said the plaintiff 'may be confined' to causes of action raised in the statement of claim. A difficulty arises where, as here, the defendant says the plaintiff's pleaded claims are statute barred under the provisions of the Limitation Act 2005 (WA). Leaving to one side the High Court's view on the appropriateness of determining a limitation question on a summary judgment application (see Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514) a limitation defence must be pleaded. It is not a matter of jurisdiction - a plaintiff can run a claim which would be statute barred if the point is not taken by the defendant. In this case there is no pleaded defence and accordingly, looking at the pleadings, it is not clear whether the limitation point will be raised. Counsel for the defendant during the course of argument indicated it would be raised and that can be accepted. But the plaintiff did not plead its statement of claim with one eye on the limitation defence. To do so would have been bad practice. When and if the limitation point is pleaded the plaintiff can file a reply dealing with the issue. Consequently, this is not one of those cases where regard can only be had to what the plaintiff says in its statement of claim. An assumption must be made the defendant will take the limitation point and the plaintiff through evidence is entitled to foreshadow what the pleaded response to the defence will be.
6 Turning then to the plaintiff's claim. In par 8 of her submissions counsel for the defendant summarised the claim, I think, fairly. The plaintiff says important aspects of the claim were omitted and I will deal with that point below. For the present it is enough if I quote counsel's submissions:
8. In outline, the allegations made by the Plaintiff are to the effect that:
(a) on 1 June 2004, the Plaintiff and the Defendant entered into a 10 year lease of land at 181 Doherty's Road, Laverton, Victoria, which may conveniently be described as that comprising buildings A, D and B;
(b) in February 2006, the Defendant indicated that it would require a hardstand area and another building (Building C);
(c) in October 2006, the Defendant made an 'Offer to Lease' which, when accepted on 2 October 2006, gave rise to an 'Agreement to Lease', the gravamen of which was:
(i) that the parties would enter into a new 10 year lease for Buildings A, B, C (which was to be constructed by the Plaintiff) and D and the new hardstand;
(ii) the rental was to be determined by the parties or, failing agreement, the rent was to be the 'commercial market rental rate' applicable to 'similar' properties and buildings 'determined by a qualified licensed real estate agent or agents';
(d) between November 2006 and August 2007, the Plaintiff duly performed the 'Agreement for Lease' by completing various design and construction works but, after the Defendant advised it on 17 August 2007 that it was vacating the premises, the Plaintiff accepted the Defendant's repudiation of the 'Agreement for Lease', which repudiation is pleaded to have been accepted on 24 August 2007- this is the date on which the Plaintiff's contractual cause of action arose;
(e) the Plaintiff claims to have suffered loss or damage as a result of the repudiation of the 'Agreement for Lease'; and
(f) it is also alleged that certain 'representations' were made by the Defendant between October 2006 and August 2007, in reliance on which the Plaintiff relied in incurring the expense of constructing Building C and the new hardstand. (footnotes omitted)
8 In answer to the limitation point the plaintiff makes the following points. An agreement to delay a reckoning (or in other words preserve legal rights by extending the time within which the legal rights may be pursued) until it is reasonably ascertainable whether there are any damages or losses to fight over is both sensible, inherently plausible and permissible under s 45 of the Limitation Act. The plaintiff points out the defendant commenced proceedings on 1 May 2015 in CIV 1628 of 2015 seeking return of a security deposit related to the various lease arrangements between the parties. Those proceedings were commenced after the parties had corresponded and met in an attempt to resolve their various legal claims.
9 The plaintiff says the correspondence and meeting was entirely consistent with the Mitigation Agreement pleaded by the plaintiff. The loss and damage likely to be sustained by the plaintiff became reasonably ascertainable when the original 2004 lease expired on 31 May 2014. At that point any losses under the 2004 lease were determinable and likely losses under the Agreement to Lease were reasonably ascertainable. At that point all reasonable mitigation had been completed. Further the plaintiff says at that point the fate of the security deposit needed to be determined.
10 The so-called 'Mitigation Agreement' referred to by the plaintiff is pleaded in pars 19 - 22 of the statement of claim. Those paragraphs are in the following terms:
19. (a) A meeting between Dalla Riva and Robert Van Straalen on behalf of the Plaintiff and Johnston and Pember on behalf of the Defendant was held at the Defendant's offices on 24 August 2007.
(b) At that meeting the Plaintiff rejected the Defendant's offer of compensation of $100,000 in return for being released from the Agreement to Lease and from its obligation to lease Building 'B' under the Lease. Instead the Defendant's repudiation of the Agreement to Lease was accepted by the Plaintiff and it was agreed that the parties would cooperate to mitigate the Plaintiff's loss, but if that loss could not be mitigated then the parties would resolve the Plaintiff's claim to be compensated for loss under both the Lease and the Agreement to Lease ('the Mitigation Agreement').
Particulars of Mitigation Agreement
- (i) The Defendant would honour the Lease;
(ii) The Defendant would occupy and pay rental at a rate of $65.35 per square metre for Building C (adjusted for movement in the Consumer Price Index between August 2007 and the date Building C was occupied) and occupy and pay rental at a rate of $8 per square metre for the concrete hardstand until it vacated the property which was to be not before February 2009; and
(iii) The parties would use best endeavours and cooperate to find a new tenant for the property; and
(iv) The resolution of the Plaintiff's claim to damages consequent upon the Defendant's repudiation of the Agreement to Lease would await the outcome of the mitigation agreed at (i) - (iii) above.
21. It was implicit in the Mitigation Agreement that the Security Deposit would be retained:
(a) to cover all the outstanding rental obligations of the Defendant under the Lease and under the further agreements to lease the New Facilities;
(b) to cover the outstanding obligations of Milltech as sub-tenant in relation to the Lease and in relation to its lease of the New Facilities (as referred to in paragraph 22(d)(ii); and
(c) and/or in any event pending resolution of the dispute between the parties relating to the Agreement to Lease.
Particulars of Implication
The particulars from clause 12(a)-(e) are repeated.
22. In furtherance of the Mitigation Agreement:
(a) the Defendant continued to observe and perform the terms of the Lease until its expiry on 31 May 2014;
(b) the Defendant continued to occupy the hardstand at the rate of $8 per square metre until 16 February 2009;
(c) the Defendant occupied Building C as and from 1 March 2008 at the rate of $67.78 per square metre until 16 February 2009;
(d) as from 16 February 2009 a company called Milltech Ltd:
(i) sub-let Buildings B and C from the Defendant for the balance of the term of the Lease to 31 May 2014; and
(ii) from 1 June 2014 leased Buildings B and C for a 3 year term but at a rate of $60 per square metre, which rate was less than the prevailing commercial market rental as at the date of practical completion of the New Facilities.
(e) The Security Deposit was left in situ and has remained in situ since notwithstanding demand for its return by the Defendant made on 6 June 2014;
(f) The Lease expired on 31 May 2014, but, apart from the lease pleaded at 22(d)(ii) above, no further mitigation of the Plaintiff's loss in relation to the Agreement to Lease has been possible despite best endeavours of the Plaintiff;
(g) The parties met in an attempt to resolve the Plaintiff's losses under the Agreement to Lease on or about 7 November 2014.
12 Dealing with the Australian Consumer Law limitation point the plaintiff says a cause of action under s 18 and s 234 arises when the loss or damage upon which the claim is based arises. When such loss or damage arises is a question of fact which would vary in accordance with the facts of a particular case. The plaintiff says it is entirely arguable the capital loss and/or other damages stemming from the defendant's misleading representations could not reasonably be ascertained in August 2007 but were reasonably ascertainable at the conclusion of the 2004 lease - that is to say, 31 May 2014.
13 As to the argument the Agreement to Lease was not in writing the plaintiff refers to various acts of part performance pleaded in pars 13 - 14 and 19(b) of the statement of claim. In my view the plaintiff's argument on this point is tenable and the defendant's summary judgment application based upon a lack of writing must fail.
14 In answer to the plaintiff's submissions counsel for the defendant made the point that no agreement to suspend or not rely on a limitation of actions period is alleged by the plaintiff. It was said that there was nothing in the pleading which supported the plaintiff's attempt to recast its pleaded case as involving an agreement on the defendant's part not to rely on a limitation period when the plaintiff advanced this claim nearly eight years after it informed the plaintiff in August 2007 that it would be vacating the premises. That leads directly to the point I made at the beginning of these reasons. If the plaintiff had pleaded an agreement to extend the limitation period as one aspect of the Mitigation Agreement it would have been bad pleading practice. It would probably not have been struck out but it would still have been bad pleading practice. No criticism can be made of the plaintiff for not anticipating a defence. There is no reason why in the reply (always assuming the defendant pleads a limitation defence) the plaintiff cannot raise a term in the Mitigation Agreement to the effect the limitation point will not be relied upon. At present it is difficult to be sure what facts might be pleaded which are said to give rise to what would presumably be an implied term. But on the state of the evidence and the pleadings as they stand at present it is not possible to conclude such a term could not be pleaded and if it was pleaded it was not arguable.
15 That being so I am not satisfied this is a case where there should be summary judgment for the defendant. In my view the case as pleaded at present is arguable and that there is arguably an answer to any limitation point raised by the defendant. Additionally the uncertainty as to how the pleadings will play out from this point onwards suggests this is not a case for summary judgment.
16 As an alternative the defendant sought to strike out pars 3 - 6 and 24 - 29 of the statement of claim. So far as pars 3 - 6 are concerned the defendant complains they raise irrelevant matters. It is difficult to see how any of the matters pleaded in those paragraphs has an impact on the plaintiff's claim. They do appear to be a matter of background. But in my view they are no so offensive as to warrant their being struck out and I am satisfied that the paragraphs can remain in the pleading.
17 The complaints as to pars 24 - 29 of the statement of claim are rather more fundamental. The defendant says they do not articulate a comprehensible case. It is said par 25 pleads a contract the 'Agreement to Lease' and certain 'actions' and 'silence' of the defendant which constituted representations. The defendant complains nowhere in the statement of claim is the content of the alleged representations set out. Further the content of the representations cannot be gleaned from referring back to paragraphs cross-referred to in par 25.
18 In my view the complaint is well made. Counsel for the plaintiff appeared to concede as much during the course of his submissions. The present mischief is I think confined to par 25. In par 23 of her written submissions counsel for the defendant clearly articulated the complaint and that must be addressed by the plaintiff. I think the better course is to strike out pars 24 - 29 with the plaintiff having general leave to re-plead. Really it is par 25 which requires attention and if the defendant's complaints are addressed by amendment to that paragraph I would see no reason why the other paragraphs could not remain in their present form. But while there is a flaw in par 25, pars 24 - 29 must be struck out.
19 I will hear the parties as to the form of orders and as to costs.
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