Foster v TW (Vic) Pty Ltd
[2020] VSC 533
•27 August 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2018 01050
| IAN FOSTER | Plaintiff |
| v | |
| TW (VIC) PTY LTD (ACN 162 233 203) | Defendant |
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JUDICIAL REGISTRAR: | Matthews JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 August 2020 |
DATE OF RULING: | 27 August 2020 |
CASE MAY BE CITED AS: | Foster v TW (Vic) Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2020] VSC 533 |
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PRACTICE AND PROCEDURE – Summary judgment – Whether plaintiff has real prospects of success on his statement of claim – Civil Procedure Act 2010 (Vic), ss 62 and 63 – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27 – Whether agreement was binding – Masters v Cameron (1954) 91 CLR 353 – Application for summary judgment refused.
PRACTICE AND PROCEDURE – Leave to amend statement of claim – Leave granted.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Noonan | HWL Ebsworth |
| For the Defendant | Mr T Sowden | Henley Legal |
JUDICIAL REGISTRAR:
Introduction
This ruling concerns two applications made in this proceeding:
(a) application made by summons filed 24 July 2020 by the Plaintiff for leave to file and serve an amended statement of claim (‘Amendment Application’); and
(b) application made by summons filed 31 July 2020 by the Defendant for summary judgment (‘SJ Application’).
By orders made on the Court’s own motion, both applications have been referred to me pursuant to r 84.04 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’) for hearing and determination.
The SJ Application has been made pursuant to s 62 of the Civil Procedure Act 2010 (‘CPA’) and r 22 of the Rules. Alternatively, the SJ Application is made pursuant to r 23 of the Rules.
In support of the SJ Application, the Defendant relies on an affidavit of Henry Wong affirmed 31 July 2020 (‘Wong Affidavit’). Mr Wong is the principal of Henley Legal, solicitors for the Defendant.
In opposition to the SJ Application, the Plaintiff relies on an affidavit of Todd Fraser sworn 20 August 2020 (‘Fraser Affidavit’). Mr Fraser is the Plaintiff’s son. In support of the Amendment Application, the Plaintiff relies on the affidavit of Angela Liaskos dated 24 July 2020,[1] to which is exhibited the Plaintiff’s proposed amended statement of claim (‘PASOC’).
[1]The date of swearing as in the jurat is 24 June 2020, but I apprehend that this is an error. In any event, nothing turns on this discrepancy.
Both parties filed written outlines of submissions, the Defendant on 4 August 2020 and the Plaintiff on 13 August 2020.[2] In addition, Counsel for each party made oral submissions at the hearing on 21 August 2020.
[2]Respectively, referred to as the Defendant’s Outline and the Plaintiff’s Outline.
It was common ground that the SJ Application needed to be dealt with first, and that the PASOC was relevant to that application.
For the reasons which follow, I will refuse the SJ Application and I will grant the Plaintiff leave to file and serve an amended statement of claim, substantially in the form of the PASOC.
This proceeding is fixed for trial commencing on 19 October 2020 on an estimated duration of 4 days. There remain a number of pre-trial steps which the parties still need to complete, although Counsel indicated that these were in hand. Due to the proximity of the trial and the need for the parties to continue preparation given that the SJ Application will be refused, I consider it necessary that the parties have my ruling as soon as practicable. Accordingly, these reasons are, of necessity, brief. In addition, given that I have determined that the proceeding should continue to trial, I do not consider it appropriate to go into a great deal of detail about the merits of the case. Beyond a consideration of whether the Plaintiff’s claim has a real prospect of success, I have not gone into the merits of each party’s case.
Background
This proceeding was commenced by the Plaintiff on 29 August 2018, when he filed his writ and statement of claim (‘SOC’). The Defendant filed its defence on 17 December 2018 (‘Defence’).
The Defendant is the registered proprietor of the land described in certificate of title volume 11531 folio 590, located in Bazalgette Crescent, Dandenong South (‘Property’).
On 29 March 2017, the parties signed a document entitled ‘Heads of Agreement’ (‘HOA’). The HOA is a short document for a sale of the Property, providing as follows:[3]
[3]Exhibit HW-1 to the Wong Affidavit.
(a) the vendor was the Defendant;
(b) the purchaser was the Plaintiff and/or nominee;
(c) the building size was “2,783 sqm which is subject to change but to be finalised and agreed to with architect, vendor and purchaser prior to contracts being executed” (‘Plans’);
(d) the purchase price was $1,600 per sqm of “the total building size. To be finalised prior to contract execution but using the size noted above the price would be $4,452,800 + GST”;
(e) the deposit was $10,000 upon execution of the HOA with the balance of the 10% at exchange of contracts; and
(f) the settlement date was 14 days after an occupancy permit is issued and a copy of it given to the purchaser.
Before the signatures of the Plaintiff and Lee Wang for the Defendant, the following is stated: “The terms and conditions set out above are agreed and accepted.”
On or around 4 April 2017, the Plaintiff paid the $10,000 part deposit to the trust account of CBRE, the Defendant’s agent, to be held on trust for the Defendant.[4]
[4]SOC [4]; Defence [4].
The Plaintiff alleges that on or around 21 February 2017, he appointed interior designers to design, document and manage the fitout of the building at a cost of $13,018.50 (including GST).[5] The Defendant does not admit this allegation.[6]
[5]SOC [6].
[6]Defence [6].
The Plaintiff alleges that on or around 27 July 2017 he and the Defendant varied the size of the building down to 2,670 sqm in accordance with the mechanism contained in the HOA (‘Revised Plans’).[7] The Defendant says that the Revised Plans were for the construction of a building that was not within the contemplation of the parties at the time of entering into the HOA and that the Revised Plans contained a number of items which were not agreed upon.[8]
[7]SOC [5].
[8]Defence [5].
On 6 September 2017, the Plaintiff paid into CBRE’s trust account the further sum of $90,000 in part payment of the deposit, at the request of the Defendant.[9]
[9]SOC [7]; [Defence [7].
The Plaintiff alleges that in or around June 2018, the Defendant informed the Plaintiff that it was “cancelling” the HOA and returning the $100,000 paid by the Plaintiff.[10] Save that it admits returning the deposit to the Plaintiff in June 2018, the Defendant otherwise denies this allegation.[11]
[10]SOC [9].
[11]Defence [9].
The Plaintiff alleges that the Defendant has breached the HOA because the matters referred to in the preceding paragraph evince an intention not to be bound by it. The Plaintiff also alleges that in breach of the HOA the Defendant has not started construction of the building on the Property.[12] All of this is denied by the Defendant, who says that it was under no obligation to commence construction works until the parties had executed a formal agreement.[13]
[12]SOC [9]-[10].
[13]Defence [9]-[10].
The Plaintiff says that he is entitled to specific performance of the HOA. This is particularised in the SOC as the Plaintiff being entitled to an assignment of the title to the Property for:[14]
(a) the agreed purchase price of $4,452,800 (plus GST, if any), less an amount by way of set-off for the cost of constructing a building of 2,783 sqm to the specifications agreed in the Plans; and
(b) alternatively, for the purchase price of $4,432,000 (plus GST, if any), less an amount by way of set-off for the cost of constructing a building of 2,670 sqm to the specifications contained in the Revised Plans.
[14]SOC [13].
Alternatively, the Plaintiff says that he is entitled to specific performance of the HOA with construction of the building in accordance with the Plans, alternatively the Revised Plans.
The Defendant denies that the Plaintiff is entitled to specific performance.[15]
[15]Defence [13].
The Plaintiff claims, further or alternatively, that he has suffered loss and damage. This is particularised in the SOC as being the lost value of the Property with its improvements in accordance with the HOA over the agreed purchase price (‘Category A Damages’), plus the storage and property rental costs incurred by the Plaintiff that would not have been incurred had the Defendant complied with the HOA (‘Category B Damages’).[16]
[16]SOC [14].
The Defendant denies this.[17]
[17]Defence [14].
In his particulars of loss and damage filed 26 March 2019 (‘FBPs’), the Plaintiff particularises:
(a) the Category A Damages as being the difference between the purchase price in accordance with the Plans, alternatively the Revised Plans, and the value of the Property in accordance with the Plans, alternatively the Revised Plans, as at June 2018. It is said that further particulars of loss will be provided by way of expert evidence; and
(b) the Category B Damages as being $28,311.20 as at 26 March 2019. It is said that the Property was purchased by the Plaintiff for and on behalf of Novas Luxe Pty Ltd (‘Novas’), and that the Plaintiff intended to nominate Novas as the nominee purchaser prior to or at settlement of the purchase of the Property. By reason of the failure to purchase the Property pursuant to the HOA, Novas has incurred storage and transport costs (including GST) and the Plaintiff is now liable to pay those to Novas.
The substance of this dispute, therefore, is that the Plaintiff says that the HOA is a concluded and binding agreement which he is entitled to specific performance of, whereas the Defendant says that the HOA is not binding as it is nothing more than an agreement to agree.
Applicable principles
The principles applicable to applications for summary judgment are well known and were set out by the Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd.[18] The test is whether the respondent to the application for summary judgment has a real prospect of success on its claim/defence. Both parties accepted that these were the principles to apply. I have previously summarised the principles applicable to summary judgment in Padella Pty Ltd v Elliott[19] which were adopted by Sloss J in Israfoods (2006) Ltd v J & D Consortium Pty Ltd.[20] There is no need for me to repeat these here: suffice to say, this is the approach I have followed.
[18](2013) 42 VR 27 (‘Lysaght’).
[19][2018] VSC 301, [19]-[28].
[20][2019] VSC 323, [41].
Submissions
The parties’ submissions are set out below.
Defendant’s submissions
The Defendant submits that the Plaintiff’s claim, even assuming the evidence goes his way, is bound to fail.
The Defendant described the Plaintiff’s case in this way: the Plaintiff seeks specific performance of the HOA. He says that the HOA was partly performed by the payment of a $10,000, a further payment of $90,000 and payment by the Plaintiff of an interior designer to manage the fit out. In the alternative, the Plaintiff claims damages for losses incurred by a company who, had a contract been executed, would have been the nominated purchaser.
Is the HOA binding?
The Defendant submits that the HOA is no more than an agreement to negotiate and therefore falls into the third category of such arrangements identified by the High Court in Masters v Cameron.[21] Whether the parties intended to be immediately bound by an agreement is assessed objectively from the terms of the document, construed in terms of the surrounding circumstances.[22] The Defendant submits that post-contractual conduct is not something taken into account when determining this question.
[21](1954) 91 CLR 353.
[22]Nurisvan Investments Ltd v Anyoption Holdings [2017] VSCA 141 (‘Nurisvan’).
As to this, the Defendant says:
(a) The HOA contains four clauses. Most of the terms necessary to make good the agreement are missing, leaving much to be negotiated.
(b) The operative provisions are qualified. The building size is said to be subject to change to be finalised and agreed with architect, vendor and purchaser. The purchase price is $1,600 per square meter, to be “finalised prior to contract execution.”
(c) No plans had been drawn up, or any draft building contract or even a contract for the sale of land at the time the HOA was signed.
(d) The Plaintiff asserts by the PASOC that in the alternative the contract was formed on 18 August 2017 when development approval was granted. This is untenable as it relies on post-contractual conduct, which is equivocal at best. It might constitute an act of part performance, but for the reasons stated below, this does not help the Plaintiff.
(e) There is no evidence that the parties agreed orally or otherwise that all the terms of the agreement were put in place and agreed between them at the time of signing the HOA in March 2017. They could not have been, since no plans had been drawn up at that stage.
In oral submissions, Counsel for the Defendant submitted that just as with Nurisvan, the HOA left much to be negotiated. These matters were said to include the starting date for the build, the completion date for the building contract, and payment terms.
The Plaintiff points to acts of part performance, which he says renders the HOA specifically enforceable. The Defendant submits that again, the argument is untenable, not least because:
(a) the doctrine of part performance prevents an unconscientious reliance on the statute of frauds to defeat a contract. Acts of part performance must be referable to a concluded contract. The HOA is not a concluded agreement, so the argument must fail.[23] Acts performed in anticipation of a later agreement do not qualify; and
(b) payment of money is usually not sufficient to constitute part performance.[24] Any payments made by the Plaintiff under the HOA were refunded by the Defendant.
[23]McBride v Sandland (1918) 25 CLR 69; Cooney v Burns (1922) 30 CLR 218.
[24]McKendrick & Co Pty Ltd v Fush [2001] VSC 95 (‘Fush’).
Specific performance and damages
The Defendant submits that the HOA is not amendable to an order for specific performance since the Court would be required to:
(a) order the parties to negotiate as to price and the timing and scope of the building works); and
(b) supervise the ongoing performance of the HOA to completion.
In respect of damages, the Defendant makes two submissions:
(a) alternatively to specific performance, the Plaintiff seeks damages. These are said to have been incurred by the acts of part performance. Part performance is an equitable doctrine invoked in a suit for specific performance. It does not permit a plaintiff to seek damages at large. Following the Lord Cairns Act a court of equity may order damages in lieu of specific performance, but before it can do that the Plaintiff must make good entitlement to the latter;[25]
(b) according to the Plaintiff’s FBPs, the entity that suffered the loss was Novas, which the Plaintiff intended to nominate as a purchaser. The HOA allows the Plaintiff to nominate a substituted purchaser. But the HOA is not a concluded document. In any event, Novas as nominee is not privy to the HOA and acquired no rights under it,[26] and so cannot claim damages for breach of contract from the Defendant.
[25]Fush, [81]-[82].
[26]428 Little Bourke Street Pty Ltd v Lonsdale Street Café Pty Ltd [2009] VSC 133 (‘428 Little Bourke Street’).
Plaintiff’s submissions
The Plaintiff submits that this is not a case for summary determination; if anything, as set out below, the evidence favours the Plaintiff’s case. The Defendant’s submissions also omit key aspects of the Plaintiff’s case as pleaded.
The Plaintiff says that there is no real dispute that the parties signed the HOA and undertook various steps thereafter (as discussed below). Having regard to the Defendant's submissions on the summary judgment application, the Plaintiff says that the key issues in the proceeding are whether:
(a) the parties’ conduct gave rise to an enforceable agreement, as opposed to a mere non-binding intention to agree at a future time; and
(b) the Plaintiff is entitled to recover, in circumstances in which it intended to nominate a nominee to receive the transfer of the Property, and various expenses were paid by the intended nominee.
Is the HOA binding?
The Plaintiff submits that the Court ascertains intention to create legal relations objectively, but in considering intention to create legal relations (cf construction of the terms of the Contract), the Court may look to all the evidence, including conduct occurring after the inception of the contract.[27] Courts will readily infer that commercial people intended commercial outcomes. Ultimately such cases turn on a close examination of the facts, so are usually more suited to trial rather than summary determination.
[27]See eg Howard Smith & Co ltd v Varawa (1907) 5 CLR 68; Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605; [2015] NSWCA 313, [118].
While each case turns on its facts, the Plaintiff says that when considering a ‘Heads of Agreement’, the principles as explained in cases such as Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd[28] and Agius v Sage,[29] are instructive, as is Riordan J’s useful summary of those principles in Verrocchi v Messinis.[30]
[28](1985) 2 NSWLR 309.
[29][1999] VSC 100, esp. at [49] – [56].
[30][2016] VSC 490 at [27] – [35] (‘Verrocchi’).
In this case, the Plaintiff submits:
(a) the parties after negotiation agreed and signed off on the HOA which identified:[31]
[31]Exhibit HW-1 to the Wong Affidavit.
(i) the identity of the land;
(ii) that a building was to be constructed on the land by the Defendant; and
(iii) the price formula, that would mathematically yield the price for whatever exact building size was ultimately approved for the site by the relevant authorities in due course;
(b) the document was executed in a context in which, on the Plaintiff’s case, the parties knew and understood the Defendant's standard template for a warehouse building[32] (tellingly, the Defendant does not seek to deny that it built to a standard warehouse template, or seek to refute this allegation by pleading or providing particulars of material differences between each of its warehouses on the Logis Estate);
[32]Wong Affidavit, [3]. As to the significance of mutually known background circumstances, see Adaz Nominees Pty Ltd v Castleway Pty Ltd [2020] VSCA 201 at [70] and the authorities cited by Whelan J and Riordan AJA (McLeish J agreeing on this point) at footnote 25 to their judgment.
(c) the plans as ultimately approved[33] included details of the building and its dimensions, construction materials (concrete panels; painted steel columns), cladding material (alucobond), roof materials (metal deck), glazing and window frame materials (including detailing such as tinted glazing in particular windows), canopy and business signage areas, even the number of bicycle parking areas (4), the colour of the mesh chain fence (black) - even the type of mulch around trees on the garden areas (shredded pine);
[33]Exhibit HW-3 to the Wong Affidavit.
(d) the Plaintiff paid a deposit;[34]
[34]Wong Affidavit, [6].
(e) the Plaintiff retained a fitout contractor;[35]
(f) the Defendant retained a draftsperson, who liaised with the Plaintiff in preparing plans, and submitted those plans to the relevant authority for (and received) approval;[36] and
(g) the Defendant requested, and the Plaintiff paid, a further instalment to the Defendant as the matter progressed, bringing the total paid to that point to $100,000.[37]
[35]SOC [6].
[36]Exhibit HW-2 to the Wong Affidavit; see also paragraphs [4] and [5] of that affidavit.
[37]Wong Affidavit, [6].
In short, the facts (most of which are undisputed) establish that the parties intended to be bound and the parties partly performed their agreement. Taking the evidence collectively, it is inconceivable in a commercial context that the Plaintiff simply gifted $100,000 to the Defendant on a ‘free’ basis, without any commitment that it would receive anything in return. The fact that the parties’ intention was to create legal relations, and understood that they had done so, is readily and objectively apparent.
The contrary evidence in support of the Defendant’s case is limited and cannot displace the evidence that the parties intended to be bound and partly performed their obligations.
The Plaintiff rejects the statement in the Wong Affidavit that the Defendant’s architect mostly dealt directly with the Plaintiff in developing revisions to the Plans and that the plans submitted to Development Victoria by the architect were not first shown to the Defendant.[38] The Plaintiff points to the emails in Exhibit TF-1 to the Foster Affidavit to show that Mr Wang of the Defendant was involved in the relevant communications, including between the Plaintiff and the architect.
[38]Wong Affidavit, [4]-[5].
The Plaintiff says that it is true that the parties clearly contemplated the exchange of a further formal contractual document. But this is true in every Masters v Cameron case; that is not in itself determinative. It is particularly unsurprising and common in the context of an agreement that will involve a transfer of land, which entails requirements for formalities. It certainly does not of itself displace the other evidence.
When referring to the intended formal document, the offer or agreement was not expressed to be ‘subject to contract’ or similar, as is sometimes the case (and even the expression ‘subject to contract’ is not necessarily fatal, but it often forms a key part of factual matrix).[39] Nor is it a case in which the parties' obligations were held in abeyance ‘subject to’ or pending contract.
[39]See eg Edge Development Group Pty Ltd v Jack Road Investments Pty Ltd [2019] VSCA 91, [21], [26].
The other matter that the Defendant seems to put in issue in its submissions is the question of any unresolved details. Failure to conclude minor or peripheral matters does not invalidate an agreement.[40] And given that the Defendant has not particularised any unresolved matters, it is not apparent that there was anything material left to be resolved; the parameters of the Defendant’s standard, cookie cutter warehouse building as inspected by the parties[41] and recorded in the detailed plans[42] address the material issues.
[40]See Agius v Sage [1999] VSC 100, [49]–[56].
[41]Wong Affidavit, [3].
[42]Exhibit HW-3 to the Wong Affidavit.
In oral submissions, Counsel for the Plaintiff referred to one of the cases in the Defendant’s Outline, Nurisvan. In that case, the trial judge had found that there was a binding agreement, but this was not upheld on appeal. Counsel emphasised that in that case, the agreement was expressed as a record of the parties’ intention, whereas here the HOA specifically states that the terms and conditions in the HOA are “agreed and accepted”. It was said that here, it could not be said that there was no real prospect of the Plaintiff succeeding on the HOA, when in Nurisvan a more equivocal document had been accepted by the trial judge as binding.
Specific performance and damages
The Plaintiff says that the Defendant’s submissions omit one key aspect of his claim: quite apart from the further and better particulars of specific expenses, it has always been the Plaintiff’s case[43] that it is entitled to the difference between the value of the property and what it contracted to pay for the property. Counsel for the Plaintiff asserted that the real reason for the Defendant ‘concluding’ the HOA was that there had been an increase in the value of the Property between the time of signing the HOA and June 2018.
[43]The first paragraph of the particulars to paragraph 14 of the SOC.
It is not to the point that the Plaintiff intended to nominate another party to receive the transfer of the property on settlement in due course; the Plaintiff as purchaser under the contract is the proper plaintiff.[44] The question is the value of the bargain as at the date of the breach; the prospect of what the Plaintiff intended to do with the property thereafter does not bear on the question.[45]
[44]428 Little Bourke Street, [25].
[45]Clark v Macourt (2013) 253 CLR 1; Tabcorp v Bowen Investments (2009 236 CLR 272.
As to the precise quantum, including a full accounting of whether the Plaintiff is ultimately liable for particular invoices and payments, the Plaintiff submits that is clearly a matter for trial.
Consideration
Summary Judgment Application
I am not convinced that the Defendant has established that the Plaintiff has no real prospect of success on his claims. Given that proceedings ought not be determined summarily unless satisfied that there is no real question to be tried, in this case the Plaintiff will not be denied the opportunity to take his case to trial.
I accept that the HOA clearly contemplates that the parties will enter into/execute further contractual documents in respect of the transaction. That is clear on the face of the HOA. The issue is, as both parties have expressed it, whether at the time of signing the HOA they intended to be bound by the HOA or whether they did not intend to be bound until those further contracts were entered into.
In Verrocchi, Riordan J summarised the categories in Masters v Cameron as follows:[46]
[46]Verrocchi, [28]-[31].
28.In Masters v Cameron[47] the High Court said that:
[47](1954) 91 CLR 353, 360 (Dixon CJ, McTiernan and Kitto JJ).
Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes
which they identified as follows:
(a)The parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound but propose to have the terms restated in a form which will be fuller or more precise but not different in effect.
(b)The parties have completely agreed upon all the terms of their bargain and intend no departure from the terms, but have made performance of one or more of the terms conditional upon the execution of a formal document.
(c)The intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.
29.A fourth category, by way of variation on the first category, was suggested by McLelland J in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd[48] being where the parties intend to be bound immediately by the terms on which they have agreed while expecting to make a further contract in substitution for the first contract containing, by consent, additional terms.
30.This fourth category has been accepted in many subsequent cases[49] and was confirmed on appeal.[50] However, the Court of Appeal did not appear to adopt the nomenclature of an additional category. Rather McHugh JA said as follows:
However, the decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances.[51] If the terms of a document indicate that the parties intended to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction.[52]
31.The concept of a fourth category has also been the subject of some criticism.[53] However, I adopt the approach of Giles JA in Tasman Capital Pty Ltd v Sinclair[54] who observed that ‘the categorisation does not greatly contribute to the decision in the particular case’ because whether or not the Court will find a contract is determined, in each category, by whether the parties intended to be legally bound to the informal agreement – such intention being objectively ascertained.
[48](1986) 40 NSWLR 622, 628.
[49]See, for example, Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486, 494-495 (Ipp J); Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101, 110 [24] (Ipp J, Pidgeon J agreeing); Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44, [86]-[88] (Handley AJA).
[50]GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, 634-635. (McHugh JA, with whom Kirby P and Glass JA agreed).
[51]Godecke v Kirwan (1973) 129 CLR 629, 638; Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309, 332–4, 337.
[52]GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, 634.
[53]See E Peden, J Carter and G Tolhurst, ‘When Three Just Isn’t Enough: The Fourth Category of the “Subject to Contract” Cases’ (2004) 20 Journal of Contract Law 156.
[54][2008] NSWCA 248 [26] (with whom McColl JA and Young CJ agreed); a decision reported in (2008) 75 NSWLR 1 but the relevant portion is not included.
The Defendant maintains that the HOA falls within the third category identified in Masters v Cameron. The Plaintiff, on the other hand, did not appear to firmly nail his colours to the mast, in respect of which of the three categories in Masters v Cameron or the additional fourth category the HOA fell into, other than to contend that it does not fall into the third category. For the purposes of this application, I do not consider that he needs to “pick a category”: after all, for him to have a real prospect of success on his claim, all that he needs to show is that there is a real prospect that it falls within a category other than the third category.
As has been noted in many of the cases considering the Masters v Cameron categories, while certain factors may be indicative of an agreement falling into a particular category, each case is determined on its own facts. So, for example, while ‘subject to contract’ may not be determinative of an agreement being in category 3, it is consistent with that being the case, whereas the absence of ‘subject to contract’ does not mean that it does not belong in category 3.
I accept the Plaintiff’s submission that the HOA does more than record an intention to enter into an agreement, for the reasons submitted by the Plaintiff. Whether the HOA contains all of the essential terms, or whether there is so much left out to be agreed that it could not have been the parties’ intention to be immediately bound, is something that in this instance cannot be determined without a full hearing.
I do not accept the Defendant’s submission that the operative provisions of the HOA are qualified. The purchase price was agreed: that there is a mechanism for this to be adjusted if the size of the building is altered from the agreed 2,783 sqm does not mean that the purchase price was not agreed or was uncertain. Rather, it remained to be calculated in accordance with the formula set out in the HOA. Similarly, that the size of the building was subject to change is not necessarily indicative that the parties had not intended to be bound. The matters referred to in paragraphs 1A to 1E of the PASOC, if established at trial, may impact upon this question. There is no, or no sufficient, evidence before me to be satisfied that the Plaintiff has no real prospect of success in that regard.
The Defendant may well be right in the matters it raises as barriers to the Court ordering specific performance, if it were to find that there was a binding agreement,[55] however I do not consider it appropriate to determine that summarily. Specific performance is an equitable remedy and is in the discretion of the Court: in this instance a full hearing is required so as to equip the Court with all the evidence it needs to inform the exercise of that discretion.
[55]See paragraph 35 above.
If the only loss and damage claimed by the Plaintiff in this proceeding were what I have described as the Category B Damages, then I would accept the Defendant’s submission that he has no real prospect of success in succeeding on that claim, at least as currently pleaded. Damages suffered by Novas, who is not a party to this proceeding and who, for the reasons set out in 428 Little Bourke Street, has no rights or obligations vis-à-vis the Defendant, are not “storage and property rental costs” that were “incurred by” the Plaintiff, as set out in the particulars to paragraph 14 of the SOC. It could only be if somehow the Plaintiff was liable to Novas, for example, in respect of those costs that they may be able to be the subject of the Plaintiff’s claim.
In any event, the Category B Damages are not the only loss and damage claimed by the Plaintiff, who points to the Category A Damages. However, the Plaintiff did not, in this application, deal with the question of how he has suffered loss in respect of the putative increase in value of the Property when it is said that it was his intention to nominate Novas as the purchaser. Nonetheless, this is a matter for trial, rather than for summary determination.
None of this should be taken as me saying anything more than that I cannot be satisfied that the Plaintiff has no real prospect of success. Other than that, I make no comments or findings on the merits of the Plaintiff’s claims.
Leave to file the PASOC
The Defendant objects to the Plaintiff having leave to file an amended statement of claim in the form of the PASOC.
The primary objection is that it suffers from the same alleged vices in the SOC and which are the foundation of the SJ Application. Given my Ruling on the SJ Application, I do not consider this to be a basis for refusing leave.
The Defendant says that the PASOC is defective because of the alternative pleaded in paragraph 2 of that document. That paragraph, with the amendment underlined, pleads the agreement which the Plaintiff seeks to enforce, as follows:
By an agreement dated 29 March 2017, alternatively 18 August 2017, the defendant as vendor agreed to sell the Property to the plaintiff as purchaser (Agreement).
In respect of this alternative, the particulars to paragraph 2 of the PASOC now include:
Further and alternatively (in particular if the Agreement was not concluded until 18 August 2017), the Agreement incorporated the Revised Plans as described in paragraph 5 below, and the plaintiff repeats paragraphs 5 to 6A herein (and the particulars thereto) as particulars hereunder.
It is further pleaded that 18 August 2017 was the date when Development Victoria approved and endorsed the Revised Plans.[56]
[56]PASOC [6A].
The Defendant submits that this alternative date for the Agreement is not available to the Plaintiff as it is inconsistent with the Plaintiff’s primary argument. This amendment is said to be untenable, as it relies on post-contractual conduct. The Plaintiff says that he can plead in the alternative, that what is pleaded in the PASOC is that if the Agreement was not concluded in March 2017 then it was concluded in August 2017.
I accept the Plaintiff’s submission in this regard.
Other objections include that there are problems with how the Plaintiff can prove its loss. I consider this to primarily be a matter for evidence, although the comments set out in paragraph 60 and 61 above ought to be noted.
Conclusion
For the reasons set out above, the SJ Application will be dismissed and the Plaintiff will be given leave to file and serve an amended statement of claim, substantially in the form of the PASOC.
As this Ruling is being delivered electronically, the proceeding will be listed for 3 September 2020 for the making of orders. The parties are asked to confer as to an appropriate form of orders, including as to costs.
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