Fairfax Radio Network Pty Ltd v Printlane Pty Ltd

[2011] NSWDC 148

District Court

New South Wales

Medium Neutral Citation:

Fairfax Radio Network Pty Ltd v Printlane Pty Ltd [2011] NSWDC 148

Hearing dates:

18 August 2011

Decision date:

18 August 2011

Jurisdiction:

Civil

Before:

Gibson DCJ

Decision:

(1) Judgment for the plaintiff for the sum of $201,168.55.

(2) Defendants pay plaintiff's costs.

(3) Exhibits remain with the file for 28 days.

(4) The plaintiff is to notify the defendants of the proposed application to seek a lump sum cost order in lieu of assessed costs. Such notification is to be given to the defendants by 5.00pm today by facsimile and/or email and the return date of any such application is to be Friday 26 August 2011 at 10.00am.

Catchwords:

CONTRACT - action to recover payment for services from a company including a claim based on a guarantee signed by a director of a company - defence fails to identify issues in dispute or provide particulars - application for summary judgment

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56-62 and 100
Uniform Civil Procedure Rules 2005 (NSW), rr 13.1, 14.28, 15.1

Cases Cited:

Air Services Australia v Zarb (Court of Appeal, 26 August 1998, unreported)
Commonwealth of Australia v Griffiths (2007) 70 NSWLR 268; (2007) 245 ALR 172; [2007] NSWCA 370
Dey v Victorian Railway Commissioners [1949] HCA 1; (1949) 78 CLR 62
General Steel Industries Inc v Commissioner for Railways (NSW) & Ors [1964] HCA 69; (1964) 112 CLR 125
Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135; [2002] NSWCA 44
Schellenberg v British Broadcasting Commission [2000] EMLR 296
Webster & Anor v Lampard [1993] HCA 57; (1993) 177 CLR 598

Texts Cited:

-

Category:

Principal judgment

Parties:

Plaintiff: Fairfax Radio Network Pty Ltd
First Defendant: Printlane Pty Ltd
Second Defendant: Yuri Szilasi

Representation:

Plaintiff: Mr S Coleman
Plaintiff: Hudson Lawyers

File Number(s):

2010/342798

Publication restriction:

None

Judgment

1. HER HONOUR: The plaintiff by amended statement of claim seeks payment of $190,896 plus interest calculated pursuant to s 100 Civil Procedure Act 2005 (NSW) plus costs against the defendants Printlane Pty Ltd and Mr Szilasi, the sole director and a shareholder of the plaintiff at all relevant times.

1. The circumstances leading to the sum claimed are as follows:

(1)   The plaintiff and the first defendant entered into a written agreement on 20 January 2010 whereby the plaintiff agreed to provide advertising services to the first defendant upon certain terms and conditions, and to provide a trade credit account in respect of such services.

(2)   It was an express term of that advertising agreement that the first defendant would be liable for any legal costs, interest and commissions payable by the plaintiff in respect of any overdue accounts for the first defendant.

(3)   In consideration of the plaintiff granting a trade credit account and providing advertising services, the second defendant as guarantor guaranteed the payment to the plaintiff of all monies owing by the first defendant to the plaintiff for services, whether by way of commercial air time or other services supplied by the plaintiff to the first defendant.

(4)   It was an express written term of the guarantee that it would be a continuing guarantee and indemnity and remain in effect until all outstanding amounts were paid to the plaintiff and the plaintiff provided the second defendant with a written release of that guarantee.

(5)   I note that no such written release of guarantee has ever been provided.

1. There are two applications before me:

(1) The first is an application for summary judgment pursuant to r 13.1 Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"); and,

(2)   The second is in the alternative in the event that I will be prepared to grant summary judgment that the amount claimed in full should be the subject of a judgment in the plaintiff's favour by reason of the material set out in the following affidavits:

(a)   Affidavit of William Banjen sworn 18 August 2001 (exhibit A)

(b)   Affidavit of Phillip Simon Reid of 18 August 2001 (exhibit B)

(c)   Affidavit of Ross Cameron sworn 18 August 2001 (exhibit C)

1. I shall deal first with the summary judgment claim noting that this is principally based on the pleadings of the director in his amended defence which the plaintiff submits, and I agree, gives almost no idea of the basis upon which the claim is defended or of the particulars of the facts and matters relied upon in support of that defence, either by the company or the director.

The Relevant Provisions:

1. Rule 13.1 of the UCPR provides:

"(1) If, on application by the plaintiff in relation to the plaintiff's claim for relief or any part of the plaintiff's claim for relief:

(a) there is evidence of the facts on which the claim or part of the claim is based, and

(b) there is evidence, given by the plaintiff or by some responsible person, that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part of the claim, or no defence except as to the amount of any damages claimed,

the court may give such judgment for the plaintiff, or make such order on the claim or that part of the claim, as the case requires.

(2) Without limiting subrule (1), the court may give judgment for the plaintiff for damages to be assessed.

(3) In this rule, a reference to "damages" includes a reference to the value of goods.

1. Rule 13.4 of the UCPR provides that a Court may dismiss proceedings generally or in relation to any claim for relief in three circumstances:

"(a) the proceedings are frivolous or vexatious, or

(b) no reasonable cause of action is disclosed, or

(c) the proceedings are an abuse of the process of the court,"

1. Rule 14.28(1) UCPR provides that the Court may at any stage of the proceedings order the whole, or any part, of the pleading to be struck out where there is no reasonable cause of action or defence or where the pleading has a tendency to cause prejudice, embarrassment or delay.

1. Rule 14.28(2) provides that the Court may receive evidence on the hearing of an application. I note in this regard that there is some material in the affidavits that I have referred to.

1. The relevant principles are helpfully set out by the Court of Appeal in Commonwealth of Australia v Griffiths (2007) 70 NSWLR 268; (2007) 245 ALR 172; [2007] NSWCA 370 at [11]-[12] where Beazley JA, with whom Mason P concurred, explained:

"[11] The general principles relating to the summary disposal of proceedings are well-known: see General Steel Industries Inc v Commissioner for Railways (NSW) & Ors [1964] HCA 69; (1964) 112 CLR 125 at 129. If it is demonstrated that there is a real question to be tried, the matter is inappropriate for the entry of summary judgment: Dey v Victorian Railway Commissioners [1949] HCA 1; (1949) 78 CLR 62. The tests stated in the authorities as to whether it is appropriate that a case be disposed of by the entry of summary judgment include statements such as that the matter is "so obviously untenable that it cannot possibly succeed"; "manifestly groundless" or "would involve useless expense": see General Steel Industries at 129.

[12] The summary disposal of proceedings or part thereof deprives a party of the right to a contested hearing. For that reason it is said that the requirement for establishing that there is no triable issue is demanding: Air Services Australia v Zarb (Court of Appeal, 26 August 1998, unreported). In Webster & Anor v Lampard [1993] HCA 57; (1993) 177 CLR 598, Mason CJ, Deane and Dawson JJ said at 602:

"... the issue before the learned Master on the application for summary judgment was not whether [the plaintiffs] would probably succeed in their action against [the defendant]. It was whether the material before the Master demonstrated that that action should not be permitted to go to trial in the ordinary way because it was apparent that it must fail. The power to order summary judgment must be exercised with 'exceptional caution' and 'should never be exercised unless it is clear that there is no real question to be tried." (Citations omitted)"

1. But that is not the case in this Court where the provisions of r 14.28 UCPR are applicable. That is particularly the case having regard to the provisions of ss 56-62 Civil Procedure Act 2005 (NSW) which sets out requirements for the way in which cases are case managed by this Court to have regard to the overriding purpose (s 56) of the Act.

1. While the granting of summary judgment is a provision about which the Courts in New South Wales have been cautious, summary judgment is a procedure that has been increasingly used in England having regard to the civil procedure case management rules since the beginning of this decade: see Schellenberg v British Broadcasting Commission [2000] EMLR 296.

1. In the present case counsel for the plaintiff in his helpful written submissions has drawn my attention to the substantial serious defects in the amended defence. Leaving aside that it is difficult to read, because of the substantial alterations since the first defence, which was even more hopeless, the following have been particularly drawn to my attention:

(1) There is a total failure to provide particulars. UCPR r 15.1 provides:

"Subject to this Part, a pleading must give such particulars of any claim, defence or other matter pleaded by the party as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet."

The defendants have not provided any particulars of the claim of failure to provide services, over-provision of services or, indeed, any of the matters set out in the defence. The defence to the claim for a guarantee appears to be "As per paras 8 and 9 above, the second defendant denies the existence and enforceability of the alleged guarantee." Paragraphs 8 and 9 consist of denials although there is an alternate claim that the guarantee was not fully explained and the second defendant was not given the opportunity to obtain independent legal advice about the meaning or the effect of the guarantee. How I am to reconcile such an inconsistency in the absence of some form of particulars as to whether or not the existence of the guarantee is denied is a mystery.

(2)   The need for the issues in dispute to be clarified:

Since Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135; [2002] NSWCA 44, the Court of Appeal has repeatedly emphasised the need for parties to set out clearly what the issues in dispute will be, and this is a requirement of pleading, not of particulars. However, there is no indication of what issues are in dispute, as counsel for the plaintiff points out in paragraph 24 of his written submissions. There appears in fact to be an acknowledgment of the debt by the defendant.

(3)   Imprecise and inaccurate language:

Counsel for the plaintiff draws my attention to the impermissible vagueness of a number of provisions in the defence.

For example there is a reference to "some but not all advertising services claimed" in paragraph 6. The pleader relies essentially on simple denials, such as a denial that the express term is binding on either party (paragraph 5). What that means is uncertain.

1. In my view this is a clear case for the granting of summary judgment under r 13.1 UCPR. However in the event that I have erred in so holding, I propose to set out a consideration of the case on its merits. This will perhaps be shorter than usually would be the case by reason of it being an alternate finding.

1. Counsel for the plaintiff has helpfully provided me with a chronology setting out the relevant events from January to September 2010, during which time the plaintiff provided its advertising services upon the authorisations from the first defendant and its servants or agents. As summarised in the exhibit to the affidavit of Ross Cameron the plaintiff is seeking payment from the first defendant not only for advertisements which it put to air on its own behalf, but for broadcasts to other radio stations pursuant to the syndication agreements for which the plaintiff has already paid. The statement for each of these direct accounts for Fairfax Radio Stations as well as for the syndication accounts together with the reconciliation of each item is set out in the material attached to Mr Cameron's affidavit.

1. Counsel for the plaintiff submits that I may be confident from looking at this material that:

(1)   There are authorisations which relate to particular dates for accounts which reconcile with the invoices. I have not had an opportunity to go through these in detail but what I have seen from the affidavit material provided to me, satisfies me that this is the case.

(2)   Mr Barrington's affidavit which is set out in exhibit B explains the invoicing process as involving a reconciliation not only with the advertisements which are authorised but also with the records generated by the announcer or producer once the advertisement is aired.

(3)   In addition Mr Reid has set out in his affidavit that he was regularly in touch with the second defendant about these advertisements. He sets out that in addition to "live crosses", the defendant was provided with bonus advertising which were used as "fillers". This is the only procedure which radio stations use to fill advertising spots which are unfilled by reason of being late at night or otherwise unavailable and such advertising is a bonus. This has not been included in the sum claimed.

Mr Reid, in a course of a series of conversations from March 2010 was advised by the accounts section that the second defendant was not keeping up with the payment obligations. He arranged a hook up telephone conference in May 2010, in the course of which the second defendant said "we are having difficulty paying for the ads we signed off on" and a payment plan was prepared. A second payment plan was subsequently agreed on 23 June 2011. It was when this payment plan was not followed that advertising ceased in August 2010.

1. I am satisfied having read the affidavit material the advertisements appearing on the invoices were aired on the authority of the first defendant and pursuant to the terms of the advertising agreement the amount planned plus interest is owing. This brings me to the issue of the guarantee. This was a guarantee given in relation to a commercial transaction by a director of the first defendant; the basis upon which there is claimed to be a duty to explain or advise on the guarantee its unexplained. Similarly, the denial of the guarantee existing, or even being in existence, is a mystery, as there is no suggestion that the guarantee was not signed by the second defendant, and no claim of forgery.

1. I am satisfied, having regard to the history of the dealings of Mr Szilasi and in particular his conversations with several agents of the plaintiff on 21 May, 1 June, 24 June, 27 July and 23 August 2010, that the second defendant was acting on behalf of the company, and the basis upon which he claims that the guarantee is not enforceable (paragraph 10 of the amended defence) is a mystery.

1. Accordingly, I am satisfied on the merits of the affidavit material before me that judgment should be entered for the plaintiff for the sum of $190,896 and $10,272.55 making a total of $201,168.55.

Orders

1. Accordingly, my orders will be as follows:

(1)   Judgment for the plaintiff for the sum of $201,168.55.

(2)   Defendants pay plaintiff's costs.

(3)   Exhibits remain with the file for 28 days.

(4)   The plaintiff is to notify the defendants of the proposed application to seek a lump sum cost order in lieu of assessed costs. Such notification is to be given to the defendants by 5.00pm today by facsimile and/or email and the return date of any such application is to be Friday 26 August 2011 at 10.00am.

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Decision last updated: 04 October 2011