Davey v Ron Farris Real Estate Pty Ltd - [2000] WASCA 58

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: DAVEY -v- RON FARRIS REAL ESTATE PTY LTD & ANOR [2000] WASCA 58

CORAM: TEMPLEMAN J
McKECHNIE J

HEARD: 21 FEBRUARY 2000

DELIVERED : 21 FEBRUARY 2000

FILE NO/S: FUL 175 of 1999

BETWEEN: ALAN DAVEY
Appellant
AND
RON FARRIS REAL ESTATE PTY LTD
First Respondent
RONALD SYDNEY PRITCHARD FARRIS
Second Respondent

Catchwords:

Practice and procedure Western Australia - Striking out statement of claim on the grounds that it is an abuse of process - Appeal from the decision of a Master striking out the plaintiff's statement of claim - Whether the statement of claim represents an attempt to re-litigate a point already determined in related action

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

Appellant:     Mr M L Bennett
First Respondent           :     Mr G R Hancy
Second Respondent       :     Mr G R Hancy

Solicitors:

Appellant:     Bennett & Co
First Respondent           :     Phillips Fox
Second Respondent       :     Phillips Fox

Case(s) referred to in judgment(s):

Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404

Case(s) also cited:

Ashmore v British Coal Corporation [1990] 2 QB 338
Biala Pty Ltd v Mallina Holdings Ltd (1994) 13 WAR 11
Dey v Victorian Railways Commissioner (1949) 78 CLR 62
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Haines v Bendall (1991) 172 CLR 60
House of Spring Gardens Ltd v Waite [1991] 1 QB 241
Manser v Spry (1994) 181 CLR 428
Permanent Building Society (In Liq) v Wheeler (1994) 11 WAR 187
Re Dawson [1966] 2 NSWLR 211
Reichel v McGrath (1889) 14 App Cas 665
Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275
State Bank of New South Wales Ltd v Stenhouse (1997) A Tort Rep 81-423
Webster v Lampard (1993) 177 CLR 598

TEMPLEMAN J : The appellant brought an action against two respondents, Mr Farris and a real estate company bearing his name. For the purposes of this appeal, I do not think it necessary to draw any distinction between the two respondents and I will refer to them both as "the respondent".
In the action, the appellant alleged negligence and breach of contract against the respondent in discharging his duties as an agent. The action arose from a contract of the sale of the appellant's property in Scarborough to a corporate purchaser. The contract was subject to two special conditions. One condition, which was in the standard form, gave the purchaser 28 days in which to find finance. The second condition, which was drawn specially for this situation, gave the purchaser 30 days in which to satisfy itself that the property could be used for its requirements. The parties have referred to this as the "Due diligence condition".
The appellant's complaint is that the respondent failed to advise him, after the time for obtaining finance had expired, that he, the appellant, could terminate the contract. However, on an application by the respondent to a Master, the statement of claim was struck out, the action was dismissed and summary judgment was entered against the appellant. This is an appeal from that decision. Although it was launched as an interlocutory appeal, it is common ground between the parties, and in my view rightly so, that the decision of the Master was a final decision and that therefore this is an appeal as of right.
In striking out the appellant's action and making the other orders to which I have referred, the Master applied the principle enunciated by Hunt CJ, Chief Justice at common law, in Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 at 410 to 414. It is common ground between the parties today that that is an appropriate principle to apply in this situation.
The elements which are to be extracted from Haines' case are these: first, the issue which is to be determined must have been determined in an earlier case in which the party propounding the issue was unsuccessful. Secondly, the issue must be one which was necessarily determined in the earlier case and one of importance to the final result. Thirdly, the issue must have been argued properly. Fourthly, the decision disposing of the issue in the earlier case must have been a final issue; that is, not subject to appeal. That consideration would not be relevant if, notwithstanding the absence of an appeal, it is clear that some earlier decision or binding authority has been overlooked which might have affected the result.
Although those principles were set out by Hunt CJ, he concluded by saying that there could be no definitive statement of the circumstances which would inevitably lead to a finding of an abuse of process.
The earlier case here was an action for specific performance brought by the purchaser against the appellant. That action arose out of the appellant's refusal to complete the contract. The action was tried by Wallwork J.
The learned Master reviewed the judgment in that case and held that there had been a finding by the trial Judge that the time for compliance with both of the special conditions to which I have referred had been extended beyond the time at which the purchaser waived its rights in relation to them.
It is accepted by Mr Bennett, who appears for the appellant before us, that if there was such a finding by the trial Judge, that would inevitably result in the subsequent action being untenable. That is because the respondent could not be held to be negligent for failing to advise the appellant that he could terminate the contract when the contract was still on foot.
It is common ground that the time for satisfaction of the two special conditions was extended to 4 pm on 17 March 1997. There was an issue on the pleadings in the earlier action as to whether the time for satisfaction of those conditions had been extended to 18 March; that is, after the time at which the purchaser waived the conditions.
Mr Bennett submits that although that issue arose on the pleadings, it was not the real issue at trial where the attention was focused only on the due diligence condition. Mr Bennett says it was that condition which was the hinge, as he put it, on which the contract turned because that was the crucial condition so far as the purchaser was concerned. It needed to be sure that the property could be used for the required purposes.
In support of that submission Mr Bennett refers to the passage in Wallwork J's judgment where he said:
"I find that there was an agreement to extend the time for compliance with the due diligence clause until after the council meeting on 18 March. I accept the plaintiff's submission that the evidence of Mr Muntz and Mr Farris should be preferred where it clashes with the evidence of Mr Davey."
Mr Muntz was the alter ego of the corporate purchaser, Mr Farris is the present respondent and Mr Davey the present appellant. Mr Bennett points to the fact that in that passage Wallwork J makes no reference to time for compliance or satisfaction of the finance clause.
Mr Bennett also refers to a passage a little later in the judgment where his Honour said:
"There was never any default notice issued under clause 18 of the general conditions for the sale of land or pursuant to clause 1.5 of the finance condition in the contract."
Mr Bennett says this gives rise to an inference that a notice under clause 1.5 of the finance conditions could have been served because the time for satisfaction of that condition had not been extended. Mr Bennett says that that passage in the judgment is inexplicable on any other basis.
I do not accept that submission. It seems to me that the passage is equivocal in this sense: an alternative interpretation which is equally open is that no notice was served pursuant to cl 1.5 of the finance condition because the time had been extended for satisfaction of that condition and, therefore, it would have been inappropriate to serve a notice.
That is, I think, a view which is consistent with various other passages in the trial Judge's judgment. For example, his Honour referred to the evidence given by Mr Muntz at a meeting on 20 February 1997 and at which Mr Muntz had said that the appellant told him that he did not have a problem with the extension of "the contract" by a month. The trial Judge said that when Mr Muntz was asked whether those were the appellant's exact words, he said, "As close as I can recall to it, yes."
I have referred previously to the passage in his Honour's judgment where he said that he accepted the submission that the evidence of Mr Muntz and Mr Farris should be preferred where it clashed with the evidence of the appellant. It is submitted by Mr Bennett that that passage, coming immediately after the finding about the extension of the time for compliance with the due diligence provision, must be taken to refer to the evidence relating to that matter.
Again, I do not accept that submission. It seems to me that where there is a finding that evidence should be preferred where it clashes with the evidence of another person, that is a finding of general application which is, I think, the position here but there is more.
His Honour later in his judgment referred to a departure from the promise which the appellant had made to grant "an extension of the contract" until after the council meeting. His Honour did not there differentiate between the extension of the finance clause and the due diligence clause.
Earlier in his judgment the trial Judge referred to the evidence of Mr Muntz at the meeting of 20 February to which I have already referred. He said that Mr Muntz had specifically told the appellant that he needed an extension of "the contract" for 1 month to allow the purchaser to get the application through the council. He said that the appellant had specifically agreed to this. The trial Judge accepted that evidence, in the sense that he preferred it to the appellant's evidence.
Then a little later his Honour made an express finding, and I quote:
"I am satisfied on all the evidence that [the appellant] did agree to an extension of time until after the council meeting on 18 March 1997. I accept Mr Farris' [the respondent's] evidence generally and that he took the extension of time document to [the appellant] on 26 February."
The extension of time document referred to is one in which both conditions were referred, although it is not a document that was signed by the appellant. It was signed by the purchaser and purported to deal with both conditions of the contract. Indeed, it would have been pointless to extend the time for satisfaction of the due diligence condition if the time for satisfaction of the finance condition was not extended also.
In the light of those findings the learned Master said in his reasons:
"I am satisfied that the learned trial Judge made a finding of fact that the contract of sale (which of course included the subject to finance clause) was extended by agreement of the parties reached in the Stirling City chambers on 20 February 1997 until the next council meeting on 18 March 1997. The evidence of [the respondent] and Muntz was preferred by the trial Judge to the evidence of [the appellant] on this matter. The trial Judge thought [the appellant's] evidence most improbable. These principal witnesses were examined and cross-examined at that trial and that issue was decided again [the appellant].
It seems to me, having reviewed the very thorough judgment of the trial Judge and the findings which he has made, that the learned Master was correct in reaching that conclusion. The learned Master then went on to say:
"I consider this case falls within the abuse of process principles of Haines. The plaintiff is seeking to litigate an issue - the extension of the contract - which he lost in the former case. It was an issue determined in the earlier case and was important to the result in that case. It was argued properly in that case. The relevant witnesses were heard at length. The decision of Wallwork J was a final one. An appeal was lodged but withdrawn. The earlier decision did not overlook any binding authority. It did not work any manifold injustice. If it had, and this was a winning point, why was the appeal not pursued? I consider that this case is an abuse of process and should be dismissed."
It seems to me, with respect, that the Master there considered the various points arising from Haine's case and he applied them correctly. There are two matters specifically that I would refer to. In Haine's case it is said, as I mentioned earlier, that the relevant issue must be an issue which was necessarily determined in the earlier case. Mr Bennett, of course, submits that the issue was not necessarily determined in the earlier case because the parties were there focussing only on the "due diligence" clause and not the "subject to finance" clause.
However, that issue was, I think, necessarily determined in the sense that it was an issue arising on the pleadings. It would have been wrong for the trial Judge not to have determined it in those circumstances.
If I am wrong in that view, I remind myself that as Hunt CJ said in Haine's case, there can be no definitive statement of the circumstances which will inevitably lead to a finding that there has been an abuse of process. Even if the principles enunciated in Haine's case could not be applied strictly here, I think, for myself, that it would still be an abuse of the process to relitigate a matter in which credibility findings have been made, on evidence which relates generally to this issue and which has been dealt with so exhaustively both during the trial and by the trial Judge in his reasons.
The other point that I would mention arising from the learned Master's judgment is the rhetorical question to the effect that if the

appellant had a winning point, why was the appeal not pursued? That question does not, I think, fall to be answered in the circumstances that the appeal was compromised: and it was not pursued for that reason.

In all the circumstances I am not persuaded that the Master was wrong to make the orders that he did and I therefore conclude that the appeal should be dismissed.
McKECHNIE J : I agree.