| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : DAWSON -v- McLERNON [2004] WADC 240 CORAM : MAZZA DCJ HEARD : 1 & 2 JULY, 28 & 29 OCTOBER 2004 DELIVERED : 1 DECEMBER 2004 FILE NO/S : CIV 1441 of 2002 BETWEEN : ROSALIND MARION DAWSON Plaintiff
AND
TERENCE JOHN McLERNON
Defendant
Catchwords: Contract - Acknowledgement of debt - Alleged compromise - Counterclaim - Allegations caveat lodged and maintained without reasonable cause - Turns on own facts
Legislation: Transfer of Land Act 1893, s 140
Result: Judgment for plaintiff
Counterclaim dismissed
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Representation:
Counsel:
Plaintiff : Mr R R Cywicki
Defendant : In person
Solicitors:
Plaintiff : Williams & Co
Defendant : Not applicable
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Nil
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Introduction 1 In 1996 the plaintiff and defendant formed a romantic relationship. When that relationship ceased was not clearly stated in the evidence but there was some evidence to the effect that the relationship had ceased by Christmas 2001. During their relationship the parties did not continuously live together, rather, they cohabited for various periods at premises situated in South Perth, Jolimont and Fremantle. The plaintiff and the defendant kept their income and assets separate. The plaintiff was employed as a service advisor by a number of car dealerships and the defendant was a private investigator. The defendant was also involved in property developments in the Fremantle area and in the south west of Western Australia. These developments were conducted by a company which was owned and controlled by the defendant, Halas Enterprises Pty Ltd (Halas). 2 The plaintiff has brought an action against the defendant to recover sums owed to her by the defendant which total $127,908. The defendant does not dispute that he incurred these debts. However, the defendant says that he and the plaintiff entered into an arrangement to compromise the debts so that rather than be obliged to pay the plaintiff $127,908 he was obliged to pay her $72,000. He admits that he has not paid the plaintiff this sum nor has he repaid her any sum. However, the defendant has counterclaimed. The plaintiff has lodged a caveat over seven properties owned by Halas. The effect of this caveat the defendant says has been to thwart or delay settlement of the sale of some, if not all, of these properties. As a result the defendant alleges that he has suffered financial loss and damage which can be quantified in a sum in excess of $72,000. The defendant says that although the properties are in the name of Halas, he has suffered damage because he has guaranteed its financial obligations, as he put it "to the bank" (T249).
History of proceedings, the conduct of the trial and the defendant's concessions 3 This case has had an unfortunate history. The trial was listed for two days before me on 1 and 2 July 2004. This was the fourth time the case had been listed for trial. The first trial was listed to take place before Macknay DCJ on 15 and 16 April 2003. Macknay DCJ adjourned the trial noting that no-one was entirely blameless. At that time the defendant was represented by counsel, Mr A C Thorpe. The matter was again listed for trial on 23 and 24 October 2003. The matter did not proceed to trial
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because no judge was available to hear it. Just prior to the scheduled commencement of this trial, Mr Thorpe ceased to act for the defendant. 4 The matter was then re-listed for trial on 28 and 29 January 2004 before Commissioner Reynolds (as he then was). The defendant represented himself. The trial was adjourned by Commissioner Reynolds on the application of the defendant. Commissioner Reynolds reluctantly adjourned the trial, remarking "There is no doubt in my mind that Mr McLernon has dragged his feet." The learned Commissioner made certain procedural orders, and ordered the defendant to pay the plaintiff's costs thrown away as a result of the adjournment. 5 The case was called over on 30 April 2004 at which point a lawyer, Mr Caulfield, appeared for the defendant. I have been informed that Mr Caulfield is an employed solicitor in the firm of Bennett & Co. Bennett & Co have not, at any point, filed a notice of acting. The call-over was adjourned to 14 May 2004. On that day neither the defendant nor anyone acting on his behalf appeared. The case was nevertheless listed for trial on 1 and 2 July 2004. The defendant was notified of this fact by the court in a letter addressed to him dated 19 May 2004. 6 The defendant sought an adjournment of the trial before me on 1 July 2004. He was represented for this purpose, and this purpose only, by Mr Yin of counsel. For reasons which I delivered on an extempore basis on 1 July 2004, I refused the defendant's application for an adjournment and as a result, he represented himself during 1 and 2 July 2004. 7 Proceedings on 1 and 2 July 2004 were taken up with the application to adjourn, the plaintiff's counsel's opening and the plaintiff's evidence-in-chief which finished just before lunchtime on 2 July 2004. After the lunch adjournment on that day, the defendant indicated that he wanted more time to prepare his cross-examination of the plaintiff. Although the defendant has appeared throughout the proceedings to be articulate and quite intelligent, he is not legally trained. The evidence of the plaintiff was not difficult to follow but it was reasonably lengthy and I formed the view that it would be better if the defendant was afforded time to prepare his cross-examination. As the matter was not going to be completed within the original time allocated to it, I decided on 2 July 2004 to adjourn the trial on a part heard basis without requiring the defendant to commence his cross-examination. The defendant told me that he would obtain the transcript of the proceedings thus far and instruct lawyers to represent him.
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8 On 6 July 2004 the Registry of the District Court wrote to the plaintiff and defendant advising the parties that the matter would resume before me on 28 October 2004 and had been allocated a further two hearing days.
9 On 22 October 2004 the defendant issued 11 subpoenas requiring those named in the subpoenas to come to court to give evidence on 28 October 2004. These subpoenas were issued notwithstanding the provisions of O 30 r 15A of the Supreme Court Rules. As it turned out, only five of the 11 subpoenas were served. Of the five subpoenas that were served four of the recipients were legal practitioners and the fifth recipient was described to me as a legal executive who worked for the plaintiff's solicitors. All five recipients of the subpoenas sought to have the subpoenas set aside. On 28 October 2004 I set the subpoenas aside as they were, in my opinion, an abuse of the process of the court. I delivered extempore reasons for my decision. 10 The plaintiff was re-sworn on the morning of 28 October 2004 so that she could be cross-examined by the defendant. The defendant sought an adjournment to reorganise his cross-examination in light of my decision to set aside the subpoenas. In the course of submissions on the application it became evident that the issues to be tried by me had narrowed considerably. The defendant explicitly acknowledged that he was indebted to the plaintiff for sums totalling $127,908 (T186). However, the defendant maintained that he and the plaintiff had reached a compromise agreement whereby she would receive $72,000 in full and final satisfaction of the monies that were owed to her. The defendant also maintained his counterclaim. 11 The defendant went on to tell me that he no longer wished to allege that he had paid back the money lent to him by the plaintiff. This allegation had been pleaded and had apparently been pursued by the defendant during the proceedings on 1 and 2 July 2004. This meant that a considerable amount of evidence heard by me from the plaintiff on those days as to sums of money allegedly advanced by her to the plaintiff in addition to the sums totalling $127,908 along with the alleged repayment of those sums by the defendant was no longer relevant. 12 Once the defendant made these concessions, it seemed that the scope of his cross-examination of the plaintiff would be substantially narrowed. Accordingly, I allowed the defendant more time to refine his cross-examination and adjourned proceedings on 28 October 2004 until 9 am on 29 October 2004.
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13 The defendant then cross-examined the plaintiff. After a short re-examination by the plaintiff's counsel, the plaintiff's case was closed and I invited the defendant to open his case. The defendant took up my invitation and opened his case. During the course of his opening I sought to clarify, as much as I could, the nature of the defendant's case. The defendant's opening was comprehensive and with the agreement of the plaintiff's counsel the defendant went into the witness box and confirmed on oath the truth of what he had told me in his opening. He was then given the opportunity to provide any further evidence that he thought was relevant. The defendant gave further evidence and was then cross-examined by the plaintiff's counsel. The defendant did not give further evidence by way of re-examination.
14 After the defendant had finished giving his evidence I asked him if he wished to call any other witnesses. At that point, the defendant sought a further adjournment to call those persons whom he had issued subpoenas against but not served. The defendant informed me that he wished to call the witnesses to pursue one or more of the following arguments: (a) that he was the victim of a conspiracy to defraud; (b) there had been an attempt to pervert the course of justice; (c) the plaintiff was guilty of the tort of champerty and/or maintenance; (d) the debt owed by the defendant to the plaintiff had been assigned by the plaintiff to someone else; and (e) the witnesses were relevant to the plaintiff's credibility. 15 During the course of submissions, the defendant said that he wished to have more time to obtain evidence as to the quantum of damages sought in his counterclaim. 16 I refused the defendant's application for a further adjournment. I gave brief extempore reasons for my decision. Essentially, I decided that it was too late for the defendant to be introducing new and unpleaded issues to proceedings which were already over two years old. In my opinion the defendant has had ample time to prepare his case and therefore a further adjournment was not in the interests of justice.
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17 The defendant chose not to address me in closing. The defendant took the view that everything that he could say in the circumstances had already been said by him in evidence. The plaintiff's counsel addressed me in closing, albeit briefly.
18 There is no doubt that the defendant sees this action as part of a wider campaign on the part of the plaintiff and others to cause him harm. Whatever the truth of this, my task is to decide the case according to the issues raised on the pleadings. These issues were further narrowed in the manner that I have described during the course of the trial. The pleadings did not allege some wider and more sinister dispute nor could they reasonably do so. Accordingly, it is not for me to make any comment or conclusion as to the defendant's wider allegations against the plaintiff and others.
The issues 19 In light of the defendant's admission that he was indebted to the plaintiff in sums of money totalling $127,908, there are two issues which I must determine. The first issue is whether there was a compromise entered into between the plaintiff and the defendant whereby the plaintiff agreed to accept a lesser sum of $72,000 in full and final settlement of the debt? Second, does the defendant have a valid counterclaim? The onus is on the defendant to demonstrate, on the balance of probabilities that there was a compromise and/or a counterclaim.
The evidence
The debt for $127,908 20 In order to understand the defences raised by the defendant it is necessary to say something about how the sum claimed by the plaintiff, $127,908 came about. The defendant needed money to complete transactions relating to the properties that were being developed by Halas in Fremantle and in the south west of Western Australia. The defendant approached the plaintiff at various times between 2000 and 2002 and requested her to lend him sums of money. The defendant offered to pay the plaintiff what she aptly described in her evidence "very generous interest" for the amounts to be loaned. The plaintiff agreed to the defendant's proposals and advanced the defendant various sums of money. Save for a small loan made in December 2001, these loans were documented, at the plaintiff's instigation, by four acknowledgements of debt. The acknowledgements of debt can be summarised as follows:
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(a) Acknowledgement of debt dated 28 February 2000. The defendant acknowledged that he was indebted to the plaintiff in the sum of $35,000 (inclusive of interest) such sum to be repaid to the plaintiff on 1 July 2000. (Exhibit 1.1A) (b) Acknowledgement of debt dated 17 March 2000. The defendant acknowledged that he owed the plaintiff $35,000 (inclusive of interest) such sum to be repaid to her on 17 July 2000. (Exhibit 1.8A) (c) Acknowledgement of debt dated 6 July 2000. The defendant acknowledged that he owed the plaintiff $35,000 (inclusive of interest) such sum to be repaid to her on 26 November 2000. (Exhibit 1.12A) (d) Acknowledgement of debt dated 4 February 2002. The document itself is difficult to decipher but the parties agreed that its effect was that the defendant acknowledged that he owed the plaintiff $50,908 being monies advanced to him by the plaintiff from various credit cards which she held in her name. However, it was recognised that some of the amounts drawn from the plaintiff's credit cards had been part of the sums advanced to the defendant and which were part of the earlier three acknowledgements of debt. In the end, the amount payable pursuant to this acknowledgement of debt was $20,108 (inclusive of interest). This sum was to be repaid to the plaintiff on 6 May 2002. (Exhibit 1.19A) 21 In addition to the acknowledgements of debt, the defendant admitted that in December 2001 the plaintiff advanced him $2,800 (inclusive of interest) such sum to be repaid on 21 March 2002. 22 The sum of $127,908 is therefore made up of the sums outstanding pursuant to the four acknowledgements of debt and the December 2001 loan. 23 The acknowledgements of debt dated 28 February 2000, 17 March 2000 and 6 July 2000 are expressed to be between the plaintiff as creditor and Halas and the defendant as debtors. Each document is expressed to be a deed and contains a clear and unambiguous statement acknowledging that both Halas and the defendant are indebted to the plaintiff. Each deed contains a clause in the following terms:
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"Should there be any default in payment of more than 7 days then Halas Pty Ltd (sic) ACN 075 697 540) trading as McLernon Investigation and Terence John McLernon consent to the said Rosalind Marion Dawson placing a caveat or charge over the assets and property of Halas Enterprises Pty Ltd and Terence John McLernon." 24 The fourth acknowledgement of debt dated 4 February 2002 is in somewhat different terms. Again the document is expressed to be a deed but the parties are the plaintiff, the defendant, Halas and Jack & Jill Holdings Pty Ltd. The last named company was another company owned and controlled by the defendant. The first paragraph of this documents reads: "Caveat still stand on 3 Deed of Debts." This is a clear reference to the first three acknowledgements of debt. 25 As further security, the defendant gave the plaintiff four post-dated cheques for the first three acknowledgements of debt and the debt of $2,800.
Evidence of the alleged compromise 26 The only evidence before me on this issue was the oral testimony of the plaintiff and the defendant. As the defendant has alleged a compromise, the onus is on him to prove, on the balance of probabilities, that he and the plaintiff reached a legally binding compromise. 27 The defendant's evidence on the question of the compromise was not easy to understand. According to the defendant, the parties agreed to "forget" about the acknowledgements of debt on the understanding that some alternative arrangement would be agreed to in the future. Eventually, over a period of time and many conversations, it was agreed that the defendant would pay the plaintiff $72,000, subject to "any glaring oversights", in full settlement of the money he owed the plaintiff. 28 I asked the defendant if there was one particular conversation in which the sum of $72,000 was agreed to by him. His response was as follows (T263): "Sort of – sort of – I'm just trying to, you know – I can't remember the date or time or place, your Honour, but that's where the conversations took place. While I was renovating unit 9, 79, I was living there because it was – you know, after it was about half done, and she would come around from time to time, be on and off, and that's when sort of all the arguments
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started and that's when I got a little bit more about, you know, crystallizing it because we'd split up when we were living in unit 5, which is about the time of the final renovations and --- " 29 I asked the defendant to explain what he meant when he said that the arrangement had crystallised. He replied: (T263) "[W]e were having the arguments then so I thought, well, let's crystallise it and from the best of my memory that's when we sort of started really working on the – you know, that's when the 72 popped up, rather than, 'Let's just forget it and don't worry about it.' We were all using everything and what the hell, you know. We'd gone past it. We had definitely dumped those agreements, the three main ones. She, you know, always kept a written record of what went my way but no record of the other way, but the bank – I though, well, it's all in the bank records, you know. She only earns 50 grand a year and she's got half a million going through the account." 30 Counsel for the plaintiff cross-examined Mr McLernon concerning the alleged compromise agreement. At T269 the following exchange took place between counsel for the plaintiff and the defendant: "CYWICKI, MR: So therefore are you suggesting to his Honour that the agreement to dump those three acknowledgements occurred in the year 2000?---No. At different times, along the way and finally at the end there were different agreements made. There were different – you know. some we were going to keep going. Others weren't. They weren't on that day forgetted (sic). It was like we will keep going. I think at one stage we even agreed to a total and then we went past that again. What I'm saying is there were moving agreements. It was a moving thing and during that period of time, you know, there were other agreements regarding that but eventually dumped by that Christmas when we did the 72 and then more, so we may have even agreed along the way to keep them going, revive them, drop them. It was up, down, on, off and eventually got so blurred, like I said, that everything – our finances was so blurred and entwined it became impossible to separate them. I mean, we may have even gone back to them at different times, but they eventually – it's like I said, if you had an argument, 'I want that money,' you know. They just kept on and off, on and off, and different times you'd write things down,
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we'd sign things, we'd do things, but at the end of the day they were compromised on numerous occasions. Maybe even gone back to – then recompromised on and off until we made that final arrangement now." 31 At T270 the following exchange took place between Mr Cywicki and the defendant over when the final compromise arrangement was made: "CYWICKI, MR: That final arrangement occurred before you split up in Christmas of 2001. Is that right?---Well, if – now you've said those documents were done in – started in 2000, it must've been 2002 or 2000, whenever it was. I mean, when we split up, I don't know. There's so many reasons I just sort of - - - What are you saying? Are you saying you don't know when you split up now?---Sorry? Are you saying you don't know when you split up---It was at Christmas Eve thereabouts and – but the final time was when she went to my kid's place the next day. I don't know what year as I said from the start. I mean, it might've been 2002. I've said that from the very beginning, but if it's relevant then I can try and work out - - - Well Mr McLernon, it can't have been Christmas 2002 because these proceedings were issued in 2002?---Well, there you go - - - So you are not suggesting to the court that you received the writ when you were both - - -?---Well, when did I borrow the money? You say in 2000? Yes, 2000---Well, it's some time between when I borrowed the money and when we split up. You know, whatever that period is. Tell me. I mean, I honestly haven't given thought to the years. They fly by now. I just can't remember. I mean, what year it is, tell me and if that's the year, I'll agree it. So in essence then, your evidence is - - -?---And I'm not trying to be difficult. You know, I mean - - -
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32 These extracts show how vague and confused the defendant's evidence was as to the alleged compromise. 33 The plaintiff's evidence with respect to the question of the compromise agreement was to the effect that there was no such compromise. 34 In cross-examination, the plaintiff's counsel put to the defendant differences in which the alleged compromise was pleaded as between the defence filed in this Court dated 9 July 2002 and the amended defence filed 4 September 2003. While I think that there are differences in the way in which the alleged compromise has been pleaded it must be borne in mind that the defence dated 9 July 2002 was drafted by the defendant himself whilst the amended defence was drafted by the defendant's then solicitor. I do not make any adverse finding as against the defendant because of the differences which exist between the two documents.
Did the parties enter into a legally binding compromise agreement 35 I found the plaintiff's evidence on this point to be compelling. She was very clear and definite that no such compromise was reached. The defendant's evidence, on the hand, was vague and confusing. Whilst I accept that the romantic relationship between the plaintiff and the defendant was off-again, on-again and that the defendant was under considerable emotional and financial stress, I would have thought that, had there been a definite compromise, he would have been able to set out with reasonable precision when the agreement was made, where it was made and its terms. It may be that the plaintiff and the defendant had many discussions about money over the years and it may be that at some point in time, there were discussions in which the repayment of a sum of $72,000 was mentioned, but I have no doubt that any such discussion, if it occurred, did not amount to a concluded agreement to compromise the debt.
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36 My view as to this is strengthened by my impression of the plaintiff. The plaintiff was careful to evidence four of the five loans (being nearly all the loaned funds) by way of the acknowledgements of debt. She was also careful to secure those loans by way of the caveat. If there had been a compromise agreement, it is, in my opinion, unthinkable that the plaintiff would not have documented it and sought some security from the defendant.
37 The defendant submitted that the plaintiff failed to present the post-dated cheques for payment and that such a failure tends to point to the existence of a compromise. I do not accept this submission. The plaintiff did not present the post-dated cheques but it seems to me that presentation of the cheques would have been pointless as the defendant and his companies had no capacity to honour them. It also the case that the plaintiff was under the impression that the cheques were stale once 12 months had elapsed from their issue and so she did not present them for payment. 38 For these reasons, I am not satisfied that any concluded compromise agreement was reached between the defendant and the plaintiff.
The counterclaim 39 The counterclaim is pleaded in the following way: "1. The Defendant CLAIMS THAT the Plaintiff had lodged caveats over the following properties: i. Lot 7/79 Thompson Road, North Fremantle WA 6159 ii. Unit 2, 3-5 Harvest Road, North Fremantle WA 6159 iii. Unit 3, 3-5 Harvest Road, North Fremantle WA 6159 iv. Unit 4, 3-5 Harvest Road, North Fremantle WA 6159 v. Unit 5, 3-5 Harvest Road, North Fremantle WA 6159 vi. Unit 6, 3-5 Harvest Road, North Fremantle WA 6159 vii. Chalet 7, 3 Hemsley Road, Yallingup WA 6282 2. Unit 5, 3-5 Harvest Road, North Fremantle WA 6159, was sold for $285,000 and that sale 'fell through' solely because the Plaintiff refused to lift her caveat thus
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stopping the sale; and as a result of the Plaintiff's action the Purchaser withdrew from the purchase. No sale has yet been settled, thus causing damage to the Defendant, the amount of which is yet to be determined and cannot be until a sale is effected. Bank interest, upkeep of unit, remarketing, strata management services and the liquidators extra costs continue to accrue. 3. Unit 2, 3-5 Harvest Road, North Fremantle WA did not settle on time due to the Plaintiff refusing to lift her caveat and on eventually settling the Defendant was charged $9,205.92 penalty interest for late settlement, from 30.06.03 to 21.11.03, plus other costs yet to be determined. 4. Lot 9, 79 Thompson Road, North Fremantle WA did not settle on time due to the Plaintiff not lifting her caveat. The Defendant was charged $14,010.92 penalty interest from 01.06.03 to 21.11.03 and $871.00 to apply to remove the caveat, plus other costs yet to be determined. 5. Unit 4, 3-5 Harvest Road, North Fremantle WA was sold for $265,000 and that sale has fallen over due to the Plaintiff refusing to lift her caveat and further costs such as bank interest, upkeep of unit, remarketing, strata management services, and the liquidators extra costs continue to accrue. 6. All other properties are still caveated by the Plaintiff and penalties that will be incurred by the Defendant cannot be determined until such time as the properties are sold. 7. The trial should be adjourned sine die until such time as the quantum of the damages in the Defendant's Counterclaim against the Plaintiff can be quantified and this will not be possible until all properties are sold." 40 Although it is not expressly pleaded the gist of the defendant's counterclaim is that he has suffered damage because the plaintiff has lodged and maintained her caveat against the properties without reasonable cause: s 140 Transfer of Land Act 1893.
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41 The plaintiff's defence to the counterclaim is as follows:
"1. The Plaintiff admits paragraph 1 of the Defendant's Counterclaim.
2. Save to deny that the Defendant has incurred or will in the future incur loss and damage as the result of the Plaintiff having placed caveats over the subject properties, the Plaintiff does not admit any of the allegations pleaded in paragraphs 2, 3, 4, 5, and 6 of the Counterclaim. 3. In further answer the Plaintiff states that caveats over the subject properties were lawfully registered over the subject properties pursuant to the terms of the Acknowledgements of Debt dated 28th February 2000, 17th March 2000 and 6th July 2000. 4. By Order of the Honourable Justice Wheeler dated 25th July 2003 the operation of the caveats were extended until further Order of the Court. 5. If the Defendant has suffered any loss and damage as the result of the caveats being registered over the subject properties (which is denied) the Plaintiff states that such loss and damage has been caused by the Defendant's failure to pay to the Plaintiff the debts being the subject of the Acknowledgements of Debt as pleaded in paragraph 3 herein. 6. Furthermore, the Plaintiff states that the subject properties over which the caveats were registered, were registered in the name of Halas Enterprises Pty Ltd and not the Defendant. As such the Defendant cannot raise by way of counterclaim matters forming part of legal interest of Halas Enterprises Pty Ltd."
42 It is convenient to deal first with the plaintiff's plea in paragraphs 3 to 5 of her defence to counterclaim. 43 In my opinion it has not been established that the plaintiff lodged and maintained the caveat without reasonable cause. Each of the acknowledgements of debt specifically allow the plaintiff to lodge and maintain a caveat over the properties owned by Halas while the debts are
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unpaid. Plainly the debts have not been repaid. While it may have been open to the defendant to contend that the caveat should have been withdrawn for some other reason and that the plaintiff's failure to do so has caused loss, there was no cogent evidence of this. 44 The defendant gave evidence that the settlement of a number of the caveated properties had been delayed and some contracts rescinded on the part of the purchasers because the relevant caveat had not been removed by the plaintiff. No documentation or other satisfactory evidence was provided to me to substantiate these claims. The evidence was inadequate to allow me to find that the plaintiff's caveat was lodged and maintained without reasonable cause. 45 As to damages, the defendant's evidence as to the alleged losses was vague at best and non-existent at worst. Although lengthy the following extract for the defendant's evidence on this point highlights just how inadequate the defendant's evidence on this point was. "Now, can you, if you wish, speak to your counterclaim. Give evidence in relation to your counterclaim and in particular quantifying that claim?---Well, your Honour, I have tried to - - - I know you have already said something, but I'm giving you another opportunity?---You mean, in addition to that. Well, my understanding is that we – well, she had caveats which were put on properly, with my permission, et cetera, years before, on all the properties. When this vendetta commenced, one of the solicitors involved, I won't go into names, his job was to wind up Halas and somebody else was to wind me up. So what happened was everybody else took off any caveats were there as they became due and these ones stayed. At the very last minute, when threatened with further legal action, they came off one at a time until – I think one came off – was about to come off this week or last week, and they kept them on until the very last minute. Melsom Robson wrote them letters saying they're causing damages and they are liable to be sued. They reserve the right to be sued was their words. To my knowledge, all of those documents were put before the court and I can get copies if I'm given the time. For instance, unit 5 was sold for 285,000. They blocked the sale, the people walked away. I was fined roughly $14,000. They were given this information, the sale fell through and then it resold for about 260, so there's approximately 36,000 there. Unit number 2 was blocked.
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I think they claimed $10,000 in interest because it took an extra three months to talk them into taking the caveat off and eventually allowing it through, but I had to pay a fine of $10,000 plus other - - - I'm sorry, you have just gone to each of those quite quickly. Unit 1, $285,000 - - -?---No, unit 5, your Honour, that I sold by - - - For 285,000. You said $14,000 was lost?---Yes. How was that lost?---It was lost because the people pulled out of that contract. Sorry, on that one – I've got confused. Unit 5 was sold for 285. they pulled out of that one and it was then resold for 260 something thousand, say, 265, so we lost approximately – and I could be wrong. I mean, I'm guessing these things – about $20,000, from memory. Unit 2 was sold and it was delayed for three of four or five months by their caveat, which they finally just walked away before taking them to court, and I lost 10,000 plus. The bank paid it out on the basis that these people had to keep that mortgage up and they lost certain things and the bank agreed to it, then they gave them $10,000, sort of damages for not settling, but the sale did go through at the same price, and it was unit 9, 79 Thompson Road where that was blocked for a long time. Other people did come along to buy it. I can't remember the price, but it was 340 or 50 thousand. I think it was – it was between 340 and 360 thousand it sold for, which belies other factors, and that one - because that was delayed for so long – did go through and the fine there was approximately 14,000 plus other costs and incidentals and liquidated costs et cetera. That went through all the properties and they just refused until one at a time at the last minute just before they were taken to court they walked away. It was an obvious plot a gentleman sitting down the back here funded and just went on from there. Do you want me to go through each one, but I can't give you the prices. It's a matter for you?---Unit 4, we walked away and lost the sale and that went down – when I say we walked away, the purchaser who had actually been living there as well walked away because he couldn't settle and purchased elsewhere, and we lost that sale and I think we eventually ended up with a loss of about – a difference of $20,000 again in the sale – 20,000.
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Unit 6, the sale fell through by just – well we haven't determined the loss there because that's the one we're waiting on. It's sold now, evidently, and I think it was two weeks ago the duplex chalets at Yallingup Forest Resort which are lot 7, went through and I - - - What's the address – lot 7?---Chalet 7, 3 –I forget the name, but it's Yallingup Forest Resort, Yallingup – chalet 7. Yallingup Forest Resort?---Yallingup Forest Resort, lot 7, A and B. Yes, and you were saying that two weeks ago - - -?---That went through and what the determination is I don't know. It was blocked for a long time and then they settled it and I'm about to get a letter, but it's settled and the last time I looked the letter was in the mail, so settlement has gone through and there's a loss. I can estimate it. You know, that one's a very valuable property and it's probably in the vicinity of 15 to 20 thousand if you're taking it easy. When you said previously lot 5, lot 2, lot 4, lot 6, that's the Weeties factory, is it?---Yes, and I should have said 'unit'. The number if a unit of three to five - - - You did, actually. You said unit 5, unit 2, unit 4, unit 6, and they are the Weeties factory?---Exactly, and, you know, there's a lot more cost than that but I haven't put it in. There's, like, holding costs, liquidators going around twice, lawyers for the bank. It's just huge and it was part of the plot. Is there anything else you want to say to me about the counterclaim?---What, just that I can determine it. If you need exact figures I'll do them on Monday – whether or not the last one's in or not. This is your opportunity, Mr McLernon?---I've just done the best that I can and I thought you already had them, and I'm quite sure that the paperwork was forwarded. If it's not there, what can I say? Is there anything else you want to say to me about those issues or anything else that's relevant to the issues that I have to determine?---I could speak for days, your Honour, but there's no point."
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46 The impression that I had when hearing the defendant give evidence on this topic was that he had no real idea of what the quantum of damages, if any, was. He told me that he thought documents had been submitted to the court by his previous solicitor but no documents were before the court and, in any event, there is no reason why the defendant's former solicitor should have sent such documents to the court.
47 In light of my view that the defendant has not made out his plea that the plaintiff had no reasonable cause to lodge and maintain the caveat nor has he proved his damages, I do not have to decide the issue raised in par 6 of the plaintiff's defence to counterclaim. However, there was no documentary evidence verifying the defendant's alleged status as the guarantor of Halas' debts and it is difficult to see on the evidence how the defendant has the right to recover damages when the land over which the caveat was lodged was owned by a different legal entity, Halas. 48 The counterclaim must be dismissed.
Conclusion 49 The plaintiff has established that the defendant owes her $127,908. The defendant has not established that the debt was compromised and has not established his counterclaim.
Orders 50 I propose to make the following orders: 1. That there be judgment for the plaintiff against the defendant in the sum of $127,908. 2. The defendant's counterclaim is dismissed. 3. The defendant pay the plaintiff's costs of the action, including any reserved costs.
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