Dattner v Wharton
[2011] VSC 533
•21 October 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2011 00637
| NICHOLAS RICHARD DATTNER | Plaintiff |
| v | |
| STEPHEN LYNNE WHARTON | Defendant |
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JUDGE: | RANDALL AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 June 2011 | |
DATE OF JUDGMENT: | 21 October 2011 | |
CASE MAY BE CITED AS: | Dattner v Wharton | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 533 | Revised 28 November 2011 |
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PRACTICE AND PROCEDURE – Plaintiff’s application for summary judgement – plaintiff entered into an agreement for the sale of land to the defendant – plaintiff granted the defendant licence to occupy land – licence extended to settlement upon the execution of contract of sale – defendant terminated contract – plaintiff served notice of default – parties agree contract terminated – parties subsequently engaged in further negotiations – defendant continued to pay rates and body corporate fees for the land – negotiations failed – plaintiff alleges licence terminated upon termination of contract – tenancy at will – whether notice advising of summary judgment proceedings terminates tenancy at will – whether defence has no real prospect of success – Civil Procedure Act 2010, ss 61, 63-64.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Hopper | Emma Crean |
| For the Defendant | In person |
HIS HONOUR:
The plaintiff filed a summons for summary judgment dated 25 May 2011. The relief sought was that there be judgment against the defendant for possession of the land described in the statement of claim on the writ filed 15 February 2011.
The statement of claim attached to the writ relevantly sought possession of the land referred to therein and mense profits for the period between termination of the licence referred to therein and the plaintiff regaining possession of the land. The plaintiff and the defendant had been treating with each other for the sale of Unit 16 and accessory Unit 46, 26 Wellington Street, Collingwood in the State of Victoria, being the land more particularly in Certificates of Title Volume 10359 Folio 774 and Volume 10359 Folio 802 (“the land”).
The statement of claim pleads that pursuant to an agreement dated 31 August 2010, the plaintiff granted to the defendant a licence to occupy the land until 31 August 2010 or until settlement under any contract of sale of the land.[1]
[1]Paragraph 2.
A contract of sale was entered into by the plaintiff and the defendant. That contract was dated 19 September 2010.[2]
[2]Paragraph 4.
By paragraph 6 of the statement of claim it pleaded that at or around the execution of the contract of sale the plaintiff and the defendant agreed to vary the licence by extending its term until settlement of the contract of sale.
The defendant’s solicitor purported to terminate the contract by notice dated 29 October 2010. The plaintiff complained about such notice and served its own notice of default dated 12 November 2010. It is common ground that each of the plaintiff and the defendant treated the contract of sale as terminated.
Paragraph 16 of the statement of claim sets out that the term of the licence ended upon termination of the contract of sale. Further, the plaintiff contended that if the defendant occupied the land under a tenancy at will such tenancy ended upon the termination of the contract of sale.
The defendant filed a notice of conditional appearance dated 27 April 2011. However, the defendant did not make the necessary application as provided for by the Rules in time or at all. Accordingly the notice of conditional appearance is to be treated as an appearance.
The defendant has filed a notice of defence and counterclaim dated 27 May 2011. The defendant drew the defence and counterclaim himself and, as a pleading, it offends against various rules of pleading. However, at paragraph 5 it includes the following:
The defendant also denies paragraph 5 [of the statement of claim] in so far as paragraph 5(d) pleads that the plaintiff is entitled to possession of the property because the plaintiff has waived its rights through a series of emails, correspondence, conversations and communications from October 2010 to April 2011, and the defendant has relied upon the waiver and incurred costs to its detriment that it would not otherwise have incurred. In the circumstances the plaintiff is estopped from reliance upon this term of the contract of sale and bringing this proceeding for possession of the land.
Paragraph 7 of the defence sets out:
The defendant admits paragraph 7 in the statement of claim in so far as the defendant continues to occupy the land as a tenant at will but denies the extension of the term of the tenancy was limited until settlement of the contract of sale.
The defendant repeats the negotiations from October 2010 through to April 2011 in various parts of his defence. In particular in early April 2011 there was an email exchange between the parties. At paragraph 22.7 the defendant sets out:
The plaintiff then emailed the defendant again on 10 April 2011 requiring the defendant to make a step in respect of the offer by Monday 11 April 2011 and sent a follow up text on 11 April 2011 to the defendant regarding the payment to be made under the offer and arranged for the body corporate manage to email the details of body corporate fees to be paid as outlined in the plaintiff’s offer on 9 April 2011.
Paragraph 22.8 sets out:
On 11 April the defendant had accepted the plaintiff’s offer and paid the body corporate fees as required under the terms of the plaintiff’s offer and accordingly the plaintiff and the defendant entered into a new agreement in respect of the land … In furtherance of the April 2011 agreement the defendant prepared a new draft contract of sale of real estate and paid the City of Yarra Council Rates as required under the April 2011 agreement.
The counterclaim seeks specific performance of the April 2011 agreement and in the prayer seeks a declaration that these proceedings for possession be set aside and/or discontinued.
The counterclaim ventilates the same issues set out in the statement of claim. The plaintiff has not made application for summary judgment on the counterclaim nor has it made application for dismissal of the counterclaim. Accordingly, the usual procedure is to allow the defendant unconditional leave to defend or, if appropriate, allow the plaintiff judgment on its claim but stay the same until the hearing and determination of the counterclaim.
On 10 April 2011 (after the filing of the writ) the plaintiff emailed the defendant and set out:
It is a brief summary indeed and as yet, does not provide what I would need to consider whether or not I should enter into another contract with you.
Here are critical points that need to be resolved. They are not to the exclusion of any others that might arise and they are not in a final form. The purchase price is to be determined but in principle, I am prepared to use the former amount as the basis for doing so.
Also, if we are to do anything, it has to happen by the end of next week. I am not prepared to go beyond that and any excuses or delays will bring the process to an abrupt end and result in immediate legal action.
So, please address the following immediately.
The contract would be for 90 days (say April 15 to June 15), 30 of which would be raising finance. The contract should be entered into by the end of next week. It should be as simple as possible and contain the following conditions: …[3]
[3]Exhibit ND-18
A number of conditions as to preparation of contract, interest, deposit and other terms were set out. Clause 5 of the conditions is as follows:
The purchaser shall, prior to signing of any contract, pay all outstanding outgoings and provide proof of such.[4]
[4]Exhibit ND-18
On 11 April the defendant emailed the plaintiff and set out, inter alia:
I looked at this briefly over the weekend and just want to clarify a few things.[5]
[5]Exhibit ND-18
He then raised some queries.
By email dated 10 April, the plaintiff emailed the defendant and set out:
A follow up on my last email. I am hoping that you will act quickly on this if there is to be an agreement by the end of the week. I have a thought in mind about how that agreement might be put in place.
I am holding off alternative action as you know from now.
Please respond by tomorrow with a clear indication of how you are going to take this to the next step. It is vital that what you say now is credible and not designed to delay.[6]
[6]Exhibit ND-19
On 11 April the defendant emailed the plaintiff and set out:
I have not had any response to my queries of 11 April. I have, however, drafted a contract of sale for your comment as per attached. I am thinking the elements of our agreement related to any interest due and payable since 29 October 2010, the additional deposit payment, payment of rates and body corporate fees etc and other conditions outlined in your email of 9 April be dealt with separately.[7]
[7]Exhibit ND-19
A standard form of contract prescribed by the Estate Agents (Contracts) Regulations 2008 was attached. The defendant did not receive any further response with respect to the same.
The defendant paid the body corporate and outstanding rates. The defendant removed one of the caveats but stopped the process of removing the other caveat upon receipt of a letter from the plaintiff’s solicitors dated 16 May 2011. That letter, after raising queries about the defence and seeking an explanation on the basis upon which the defendant claimed to be entitled to occupy the land, set out:
In the meantime, your occupation of the Premises without payment of rent is causing loss to my client. I am instructed to preparing (sic) an application for summary judgment for possession of the Premises. If I do not receive a response from you in the stipulated time, I am instructed to file that application without further notice.[8]
[8]Exhibit ND-15
Mr Hopper, appearing for the plaintiff, quite properly conceded that the defendant might be occupying the premises pursuant to a tenancy at will irrespective of whether or not a licence had been granted. Mr Hopper also conceded that a notification might be required. He did not rely upon the filing or the filing and service of the writ in the proceeding as a notice determining the tenancy as the April 2011 negotiations had occurred after the service of the writ.
Mr Hopper also conceded that a notice might have been required to determine the licence if the licence is not construed to be for a fixed term. The plaintiff sought to rely upon the letter of 16 May 2011 as notice terminating either the licence or the tenancy at will in that it advised that application for summary judgment would be made.
Whether a notice of termination is ultimately required is a matter of construction of the email exchange of April 2011 and consideration of the consequences which ensue. However, as a general principle a notice of termination is required with respect to a tenancy at will.[9]
[9]Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386.
In Cowell v Rosehill Racehorse Co Ltd,[10] Dixon J said:
A licence which is not coupled with or granted in aid of an interest is revokable at law. It operates as a bare permission to do what would otherwise be an invasion of the licensor’s rights. If the permission is terminated, further continuance of the acts it authorised becomes wrongful. A licensee does not become a trespasser until he had received notice that the licence is countermanded and until a reasonable time has elapsed in which he may withdraw from the land and remove whatever property he has brought in pursuance of the licence … But, if he then refuses to leave the premises, he cannot complain of his forceable removal.
[10](1937) 56 CLR 605 at 630-1.
Subject to s 64 of the Civil Procedure Act 2010, the Court may give summary judgment in a civil proceeding if satisfied that a defence has “no real prospect of success”. The principles have been set out in the judgment of J. Forrest J in Matthews.[11]
[11]Matthews v SPI Electricity Pty Ltd (Ruling No 2) [2011] VSC 168.
The issue of whether or not a notice to terminate any licence or lease is required and, if so, whether the letter of 16 May 2011 was sufficient to constitute such notice are sufficiently arguable issues to negate the concept that the defence has no real prospect of success. Further, in any event, even if summary judgment was allowed on the plaintiff’s claim, those issues would still need to be agitated at trial on the defendant’s counterclaim. Accordingly, this is a matter appropriate for the discretion to be exercised pursuant to s 64 of the Civil Procedure Act.
Further, the defendant, by paragraph 5 of the defence and counterclaim has pleaded that the plaintiff has waived its rights by embarking upon the negotiations for the further contract in April 2011. It is set out that the defendant relied upon the waiver and incurred costs to his detriment which he would not otherwise have incurred. Those costs were the payment of rates and body corporate fees which he contends were paid in reliance upon there being a further contract for the purchase of the property entered into in April 2011. It is that contract which the defendant seeks performance of in the counterclaim.
Albeit that a draft contract of sale was enclosed which was prima facie consistent with the email chain of April 2011, the plaintiff submitted that the emails of 2011 did not constitute an offer, price was never agreed (albeit in principle), other terms were still being negotiated as at 15 April 2011 and there is no part performance which was attributable only to the formation of an agreement. The plaintiff further submits that the defendant was aware that the terms of any agreement had not been finalised by submitting queries and that he was under no misapprehension as to the nature of his rights. The plaintiff submitted that the payment of the body corporate fees and the council rates were either a gratuitous good will payment or, “at most, a payment in consideration for which the plaintiff continued to negotiate with the defendant.”
Whether the defendant was in occupation pursuant to a tenancy at will or a licence, the conduct of the plaintiff was such that he had either acquiesced or was taken to have agreed that the defendant could remain in possession of the property while negotiations continued. Whether or not the defendant can establish a binding contract pursuant to which a court might order specific performance, is not to the point. In Waltons Stores,[12] Brennan J held that to establish an equitable estoppel, it is necessary for a plaintiff to prove that:
[12]Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.
(a)the plaintiff assumed or expected that a particular legal relationship exists between the plaintiff and the defendant or that a particular legal relationship will exist between them and, in the latter case, that the defendant is not free to withdraw from the expected legal relationship;
(b)the defendant has induced (either actively … ) the plaintiff to adopt that assumption or expectation;
(c)the plaintiff acts or abstains from acting in reliance on the assumption or expectation;
(d)the defendant knew or intended him to do so;
(e)the plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and
(f)the defendant has failed to act to avoid the detriment … .
In this proceeding, the plaintiff put forward the framework for a proposal, required expedition and required payment of the rates and body corporate fees. The defendant prepared the draft contract and paid the fees as required. As conceded by the plaintiff, such payments could be characterised as
… a payment in consideration for which the plaintiff continued to negotiate with the defendant.
Rather than continuing the negotiations there was silence until the letter of 16 May 2011. It is hardly surprising that the defendant had an expectation that negotiations would continue to fine tune the proposals if not an expectation that the parties had reached agreement.
THE COURT ORDERS:
1.The plaintiff’s summons dated 25 May 2011 is dismissed.
2.The defendant have leave to defend.
3.There be no order as to costs.
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