Empire Securities Pty Ltd v CALM Bay Investments Pty Ltd - [2002] WASC 318

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: EMPIRE SECURITIES PTY LTD -v- CALM BAY INVESTMENTS PTY LTD & ORS [2002] WASC 318

CORAM: ROBERTS-SMITH J

HEARD: 24 DECEMBER 2002

DELIVERED : 24 DECEMBER 2002

FILE NO/S: CIV 2491 of 2002

BETWEEN: EMPIRE SECURITIES PTY LTD (ACN 055 640 376)
Plaintiff
AND
CALM BAY INVESTMENTS PTY LTD (ACN 077 190 722)
First Defendant
WARRIGAL DEVELOPMENTS PTY LTD (ACN 083 378 965)
Second Defendant
WHITE POINT HOLDINGS PTY LTD (ACN 009 380 643)
Third Defendant
WESTERN AUSTRALIAN PLANNING COMMISSION
Fourth Defendant
MICHAELANGELO FANTASIA
Fifth Defendant
REGISTRAR OF TITLES
Sixth Defendant

Catchwords:

Real property - Injunction and declaration - Interim injunction to prevent titles issuing to enable sale and development - Oral agreement for different coordinated development - Part performance - Claim for specific performance - Whether serious question to be tried - Damages an adequate remedy - Balance of convenience - Discretion

Legislation:

Town Planning and Development Act 1928 (WA), s 10, s 79

Fair Trading Act 1982 (WA), s 295(5)

Local Government (Miscellaneous Provisions) Act 1960 (WA)

Result:

Application refused

Category: B

Representation:

Counsel:

Plaintiff:     Mr G R Donaldson
First Defendant             :     Mr B H Taylor
Second Defendant         :     Mr B H Taylor
Third Defendant           :     Mr B H Taylor
Fourth Defendant          :     Ms L J Dias
Fifth Defendant            :     Mr G A Rabe
Sixth Defendant            :     No appearance

Solicitors:

Plaintiff:     Hotchkin Hanly
First Defendant             :     Talbot & Olivier
Second Defendant         :     Talbot & Olivier
Third Defendant           :     Talbot & Olivier
Fourth Defendant          :     State Crown Solicitor
Fifth Defendant            :     Mullins Handcock
Sixth Defendant            :     State Crown Solicitor

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

Nil

Case(s) also cited:

Nil

ROBERTS-SMITH J: This is an application by way of chamber summons dated 23 December 2002 for a substantive order that until after judgment in this action or further order the sixth defendant be restrained from issuing separate certificates of titles in respect of deposited plan 32029 and/or any other certificate of titles for the land comprised in certificate of title volume 1287 folio 391.
The action itself was commenced by a writ of summons dated 30 October 2002 and filed the following day. The summons had an endorsement of claim which in substance asserted that the claim arose out of representations made by the first, second, third and fifth defendants to the plaintiff to the effect that the plaintiff and those defendants would jointly subdivide adjoining lots 4 Chamberlain Street, Gosnells and lot 1291 Chamberlain Street, Gosnells in a particular way, specifically by dividing them in accordance with the plan of proposed subdivision which incorporated lots comprising land laying partly within both of those lots as approved by the fourth defendant in answer to an application made to the fourth defendant jointly by the plaintiff and the defendants that being a plan or ultimately approval 117097. There is more to the endorsement but that I think relevantly summarises the substance of it.
The plaintiff by the writ claims a declaration that the first, second, third and fifth defendants be estopped from proceeding with subdivision of lot 1291 other than pursuant to and as part of a joint subdivision incorporating the proposed subdivision said to be the subject initially of the representations. The writ further sought an injunction restraining the defendants from proceeding with the subdivision in accordance with a subsequent application referenced 118668 granted by the fourth defendant to the first, second, third and fifth defendants pursuant to the Town Planning Development Act 1928 (WA) in respect of lot 1291 together with other consequential orders.
A statement of claim was eventually filed dated 10 December 2002 and again briefly, but relevantly to the present proceedings, pleads in par 10 that pursuant to an oral agreement partly performed made between Ian Bruce McKellar, being at all material times a director of the plaintiff, and Dale Deeks, being at all material times a director of the third defendant for and on behalf of the first defendant and the second defendant (described as "the joint venture"), which oral part comprised conversations between McKellar and Deeks in or about March 2001, it was agreed as between the plaintiff and Calm Bay, White Point and Warrigal that the plaintiff would assist the joint venture to purchase lot 1291 and that upon the purchase of that lot by the joint venture the plaintiff and the joint venture would develop the properties and market them as part of a coordinated development.
Part‑performance of the agreement is pleaded at pars 11 and 12 of the statement of claim. In par 11 it is said that in part‑performance as from March 2001 the plaintiff instructed a firm by the name of Civiltech to prepare and undertake all necessary works to effect a subdivision and in par 12 in part‑performance it is said Civiltech prepared on instructions of the plaintiff and the joint venture an application to the Western Australian Planning Commission in respect of the plan referenced 117097.
Furthermore, in par 13 of the statement of claim it is pleaded that in part‑performance of the agreement in or about early May 2001, Deeks for and on behalf of the joint venture agreed to purchase lot 1291 from Mr Fantasia and that agreement was executed on or about 8 July 2001. It was said to be subject to certain conditions.
Other aspects of part‑performance are pleaded and in par 23 it is pleaded that in breach of the agreement and on a date unknown to the plaintiff the joint venture granted an authority to Reality Executives, Brown and Associates, to sell the lots of the subdivision of lot 1291 including what has been referred to as the balance title strip of lot 4. Other breaches are pleaded.
In substance, without again descending to the detail, it seems the plaintiff's claim is that in breach of the agreement the first, second and third defendants proceeded with a different development application than the one said to have been agreed with the plaintiff and which involved the purchase from Fantasia of lot 1291 but excluding the plaintiff's lot 4 or any part of lot 4 and which had the result that the portion of lot 4 comprising the balance title strip was deleted and that has a consequential effect not only on the development potential in terms of the pleaded agreement but generally adversely to the plaintiff. As I say, I appreciate I am summarising the position considerably.
The reason for the present application as I understand it is that the sixth defendant has indicated that since a caveat placed by the plaintiff on the land has expired and there are now requests for the issue of titles to give effect to the subsequent agreement, the sixth defendant is obliged by law to issue the titles unless and until prevented from doing so by an order of this Court. It is further indicated by the sixth defendant that the titles will issue as requested on or after 31 December 2002 and hence the urgency of the present application.
The serious question to be tried, as I apprehend it is said to be, first of all, the existence of the pleaded agreement, that is to say whether the agreement in fact can be proved as an agreement in the terms pleaded, both partly oral and partly performed and, further, should the agreement be proved, whether a claim of specific performance or the relief of specific performance can be granted in relation to it.
The relief claimed by the plaintiff in the statement of claim, as I have indicated, includes a claim for specific performance of the agreement as particularised in the statement of claim itself. Secondly, a declaration that the first, second, third and fifth defendants are estopped from proceeding with a subdivision of lot 1291 other than pursuant to and as part of a joint subdivision incorporating part of lot 4 pursuant to application 117097; (3) in the alternative to (1) damages in lieu of specific performance; (4) equitable compensation; (5) damages pursuant to s 79 of the Fair Trading Act together with other relief that it is not necessary for me to mention.
Whether or not there is a serious question to be tried, giving to that expression the meaning the authorities require on an application of this kind, I think is a difficult question in itself having regard to the material which is presently before me.
Mr Taylor who appears for the first, second and third defendants points out that there is no pleading of any agreement with the fifth defendant. As I understand the submission it is that there could not be specific performance of an agreement between a number of the parties who would be the purchasers of the land from the fifth defendant if the fifth defendant is not said to be part of that agreement. On the face of it there seems to be some considerable merit in that submission.
In addition to that it appears that the first and third defendants purchased only part of lot 1291 and that the fifth defendant accordingly retains the balance. That also I think goes to the question whether or not specific performance could be awarded even were, as Mr Taylor submitted, the agreement as pleaded to be made out.
Without again going into the detail of the affidavits to which reference has been made this afternoon it seems to me that although I have concerns whether or not there is a serious question to be tried I am not persuaded there is no serious question to be tried - although, as I say, I am left in that state of mind with a certain degree of discomfort. I am not prepared to deal with the matter accordingly on the basis of whether or not there is a serious question to be tried, nor do I need to do so.
I say that because I have come to the conclusion that the application should be refused on other grounds. The plaintiff, as Mr Donaldson frankly and properly points out, is a property developer and the basis of the agreement as sought to be relied upon and the arrangements which were to be put in place to implement it, were all part of a proposal to develop the land.
It is true that the land the subject of the second approval adjoins lot 4 and has therefore particular value to the plaintiff, described by Mr Donaldson, I think, as "strategic". He contends that the remedy of specific performance would be available. Whether or not it would be, which again is an aspect about which I have very considerable doubt without detailing that for the moment, the position it seems to me is that the plaintiff's claim ultimately could be adequately met by an award of damages rather than specific performance.
I say that, as I have indicated, notwithstanding the recognition that the land concerned may and does no doubt have some particular significance in a commercial sense to the plaintiff from the point of view of the proposed development and eventual sale.
There is I think considerable force in the submissions made to me by counsel for the first, second and third defendants and the fifth defendant that the statement of claim itself recognises that the plaintiff's claim is founded, or at least pleaded to be based, upon financial damage and loss which would accordingly be relieved ultimately if relief be granted by an award of damages.
It is not necessary I think for me to refer to the particular submissions made in that regard by reference again to the specific paragraphs of the statement of claim. The point I am making I think is sufficiently clear.
As to the balance of convenience again I am of the view that in that regard the balance of convenience falls in favour of the defendants. I appreciate the submission made by Mr Donaldson that if the land is sold, which is what clearly would be open to happen once the titles were to issue on or after 31 December and the plaintiff were then to be successful, it is most likely that the plaintiff would be refused specific performance on discretionary grounds given the complications following upon the sale. In addition to that there would no doubt be the potential complications of the plaintiff having to confront bona fide purchasers for value.
In effect what that amounts to is that if, as Mr Donaldson submitted, the injunction were not to be ordered today then the claims for specific performance and estoppel made by the plaintiff would be rendered nugatory. I accept that submission but nonetheless consider that the plaintiff's position still would be adequately met by an award of damages were it ultimately to succeed.
The countervailing consideration is that the grant of the injunction would have very serious financial consequences to the substantive defendants, if I might describe them that way, as well as potentially to bona fide purchasers.
Again there is in the affidavit material before me extensive evidence of the activities which have been undertaken since the approval of the second proposal and the defendants' reliance upon that. Without referring to that material it is clear that very considerable expenses and costs have been incurred and a great deal of work has been undertaken in reliance upon the approval.
I accept the submission that the plaintiff was well aware, and has been well aware for some seven months at least, of the prospect of the defendants' pursuing the second agreement and approval and indeed of the plaintiff's right to seek an injunction from this court.
The correspondence clearly enough shows that the plaintiff had turned its mind to that possibility. Nonetheless the application was not made until last week.
Again I do not propose to canvas in detail the submissions made to me in that regard, suffice to say that I accept that what has been put to me does establish that the plaintiff was well aware of its right to seek an injunction to prevent the further development of the approval, or in accordance with the approval and the need to do so, but took no action when action should have been taken. That factor I think goes both to the balance of convenience and also to the general consideration of discretion in relation to an application of this kind.
I have come to the conclusion therefore in summary that I am not prepared, first, to deal with this matter on the basis of whether or not there is a serious question to be tried, given the complexity and difficulty of it on the considerable material before me; secondly, for the reasons given, that damages would be an adequate remedy; third, that the balance of convenience (or as it is sometimes described, the greater risk of injustice) in the circumstances favours the defendants and as part both of the balance of convenience but also generally in terms of the exercise of my discretion I accept the submissions that the delay which I consider to be not satisfactorily explained again initiates against the exercise of discretion to grant the application.
I would accordingly refuse the application for interlocutory relief on those three grounds, namely damages being an adequate remedy, the balance of convenience and discretion, the latter being founded in the delay and I rule accordingly.