Frontlink Pty Ltd v Cynthia Feldman
[2012] VSC 624
•19 December 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL & EQUITY DIVISION
No. 1075 of 2011
| FRONTLINK PTY LTD (ACN 074 034 496) | Plaintiff |
| v | |
| CYNTHIA FELDMAN in her personal capacity as holding Letters of Administration ad colligendum bona of the intestate estate of Derek Joseph Feldman (deceased) | Defendant |
---
JUDGE: | Pagone J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 December 2012 | |
DATE OF JUDGMENT: | 19 December 2012 | |
CASE MAY BE CITED AS: | Frontlink Pty Ltd v Cynthia Feldman | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 624 | |
---
PRACTICE AND PROCECDURE- Appeal from an Associate Justice – Hearing de novo – Application for summary judgment – Special leave to amend pleadings and rely on affidavits not before the Associate Justice – Whether the Court is satisfied the defence has “no real prospect of success” – Whether defendant is a contracting party to Agreement – Whether initials on Agreement were those of the defendant – Whether the Agreement is unenforceable against the defendant in equity – Whether the source of information of facts verified on the basis of information and belief were sufficiently disclosed – Civil Procedure Act 2010 (Vic) s 63 – Supreme Court (General Civil Procedure) Rules 2005 (Vic) O 22.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Cook | Belleli King & Associates |
| For the Defendant | Dr K Hanscombe S.C. with Mr M McInnis | Mason Black Lawyers |
HIS HONOUR:
The Defendant issued on 7 November 2012 a Notice of Appeal against the orders made by Randall AsJ on 2 November 2012. On that day Randall AsJ heard a summons dated 16 June 2011 by the Plaintiff seeking, amongst other things, summary judgment against the Defendant. His Honour gave judgment for the Plaintiff in her personal capacity in the sum of $156,225.10 together with interest pursuant to statute. On 7 November 2012 the Defendant appealed against that decision and judgment. It was set down for hearing in the Practice Court on 21 November 2012 and the appeal commenced to be heard on that day and Mr R Cook of counsel appeared for the Plaintiff (as he had before the Associate Justice) and Mr P Tree SC (as his Honour then was) appeared with Mr M McInnis for the Defendant. Mr Cook and Mr McInnis had appeared in the proceeding before the Associate Justice on 2 November 2012.
The hearing on 21 November 2012 was not concluded because what emerged in the course of the hearing led the Plaintiff to seek leave to amend the amended statement of claim. The hearing was resumed on 10 December 2012 with Dr K Hanscombe S.C. appearing with Mr McInnis for the Defendant and Mr Cook appearing for the Plaintiff. The proceeding continued as the hearing of the appeal from the decision of Randall AsJ but it had changed significantly because the Plaintiff sought, and was granted, leave to amend the amended statement of claim and sought, and was granted, special leave to rely upon additional affidavits which had not been before the Associate Justice on 2 November 2012.[1] The matter nonetheless continued to be heard at the request of the parties who sought to have the issue of summary judgment determined upon the material before the Court notwithstanding that the statement of claim upon which the Plaintiff sought summary judgment was no longer the one upon which the Associate Justice had given summary judgment. The jurisdiction of the Court had been invoked by the Defendant’s Notice of Appeal dated 7 November 2012 which, in turn, enlivened the Plaintiff’s summons dated 16 June 2011 for summary judgment as a de novo hearing. The Plaintiff was granted leave to file a further amended statement of claim exhibited to an affidavit filed in support of the application and it was treated as having been filed for the purposes of the proceeding. The Plaintiff contended that an appeal from the Associate Justice, being a hearing de novo,[2] enabled a judge seized with an appeal to hear the appeal without restriction except for the restriction in the rules that the parties needed special leave to rely upon any affidavit or oral evidence which had not been used or given before the Associate Justice. Counsel for the Defendant joined in seeking the determination of the Plaintiff’s claim for summary judgment relying in part upon the frailty of the Defendant and the desirability of the matter being determined expeditiously. The matter proceeded as the parties sought, albeit with some reservation about it being the appropriate course. In the event both the Plaintiff and the Defendant were given special leave to rely upon affidavits which had not before the Associate Justice on 2 November 2012 subject to any objections as to admissibility which were made and determined in the course of the hearing. The unusual circumstances justifying the grant of special leave in this case included: that the Plaintiff conceded that the quantum of the judgment awarded by Randall AsJ was in error and needed to be reduced; that part of the claim against the Defendant required an amendment to the statement of claim; that the Plaintiff therefore needed to verify by a new affidavit the new amount sought in the amended pleadings; and that the Defendant requested that the Plaintiff’s summons for summary judgment be heard and determined in the resumed hearing of her appeal notwithstanding that the matter had come to the Court as an appeal from a decision upon a pleading that had been substituted.
[1]Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 77.06 (7).
[2]Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 77.06 (7).
The relevant claim against the Defendant concerns an assignment by the Plaintiff of the right to receive profits from property at 181 Grices Road, Clyde North. The Defendant, Mrs Feldman, is sued in her personal capacity and in her capacity holding letters of administration ad colligenda bona of the estate of her late husband Derek Joseph Feldman. The Plaintiff, a company, alleges that it assigned the right to receive profits from the Grices Road property to both Mrs and Mr Feldman as assignee by a written agreement dated 20 October 2002 (“the Agreement”).
A copy of the Agreement was tendered in evidence. It is headed “Joint Venture Farming Agreement” and purported to be made between the Plaintiff, as owner, and Mr and Mrs Feldman (who were described in the Agreement to be trading as “Derek Feldman & Company, Property Consultants”). The recitals to the Agreement refer to the freehold property at 181 Grices Road, Berwick, which is owned by the Plaintiff and from which it was conducting a “farming business”. There was no disagreement about the identity of the property because of the different descriptions of its location as Clyde North or Berwick: the two descriptions appear to refer to the same location. The recitals to the Agreement go on to record that the parties wished to enter into terms of agreement to enable Mr and Mrs Feldman (defined in the Agreement as “the Farm Consultant”) to manage the land on behalf of the Plaintiff upon the terms and conditions of the Agreement. Clause 1 of the Agreement provided that the Agreement would commence on 20 October 2002 and was to continue until 21 October 2005 or would continue as “extended in accordance with the terms of [the] agreement”. Clause 6 of the Agreement provided that it would be for a three year term with the Farm Consultant having the option to extend the arrangement for a further three years for a specified sum. The Plaintiff’s further amended statement of claim refers to the Farm Consultant as the assignee (who for present purposes can be assumed to include the Defendant).
Clause 5 of the Agreement provided that the owner (namely the Plaintiff) would pay council and water rates, and building insurance, with respect to the property and that the Farm Consultant (that is, including the Defendant as alleged) “shall reimburse the Owner for Council rates and for water, power, building insurance and other services” used by the farm. That obligation was pleaded in paragraph 4(a) of the statement of claim before and after its amendment on 10 December 2012. Clause 6 of the Agreement also provided that the Farm Consultant would pay a fee to the owner as specified in that clause. Paragraph 4(b) of the statement of claim both before and after its amendment on 10 December 2012 pleaded that the assignee was obliged to pay a fee to the owner in consideration of the rights to receive the profits and would maintain the property in accordance with good husbandry practices.
The Agreement as pleaded before amendment on 10 December 2012 did not allege any extension of its term beyond 21 October 2005, but the amount claimed related to periods after that term. The quantum claimed in the statement of claim before its amendment on 10 December 2012 had been for the sum of $156,225.10 as particularised in paragraph 5 and as set out in a table annexed as a schedule to the statement of claim. The amounts in the schedule included claims for periods after 21 October 2005. The pleading as it had stood on 21 November 2012 had not expressly pleaded that the Agreement had been extended after completion of its three year term on 21 October 2005 although the particulars of the claim had included amounts said to be due after 21 October 2005 upon the assumption that the Agreement had continued to operate. It was the desirability to amend the pleading to allege the basis of a claim for the period in the particulars and schedule that led the Plaintiff to seek leave to amend the pleading. Paragraphs 4A to 4F were added upon the Plaintiff’s application for leave to amend the statement of claim to plead the continuation of the Agreement beyond the initial term of three years. The quantum of the claim in respect of the Grices Road property was also amended by reducing the amount from $156,225.10 to $148,618. The difference was needed to take into account part of an amount of $30,469.45 in the schedule which did not relate to the Grices Road property by reducing it to $22,862.32. Other paragraphs were added to the statement of claim but none relevant to the application for summary judgment in respect of the Grices Road property.
The orders made on 21 November 2012 had been to give leave to the Plaintiff to file an amended statement of claim, but the Plaintiff filed an affidavit exhibiting a proposed further amended statement of claim and formally sought leave on 10 December 2012 for that pleading to stand as the pleading upon which judgment was sought. The Defendant had similarly been given leave on 21 November 2012 to file an amended defence and had done so on 6 December 2012 upon the assumption that the Plaintiff’s proposed pleading had either been filed pursuant to the order on 21 November 2012 or did not need any further leave. However, at the hearing on 10 December 2012, senior counsel for the Defendant sought leave not to rely upon the amended defence on the basis that she had recently taken over the brief and wished to make further amendments than those which her predecessor had made for the purposes of the proceeding. Both parties, however, continued to press for a determination of the Plaintiff’s application for summary judgment notwithstanding that it would occur without the benefit of a formal pleading from the Defendant to the Plaintiff’s further amended statement of claim.
The Plaintiff’s claim against Mrs Feldman depends upon her being bound by the Agreement as a contracting party. The Plaintiff’s contention is that she signed the Agreement and was therefore bound by it whether or not she had read the document.[3] The Defendant, in contrast, contends that there is a serious question to be tried about whether Mrs Feldman did sign the Agreement and, if she did, whether equity would regard the document as unenforceable in the circumstances in which the document was signed.[4]
[3]See: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165.
[4]Yerkey v Jones (1939) 63 CLR 649, 675-6 (Dixon J); Garcia v National Australia Bank Limited (1998) 194 CLR 395.
The Plaintiff’s claim for summary judgment is brought under Part 4.4 of the Civil Procedure Act 2010 (Vic) and the Supreme Court (General Civil Procedure) Rules 2005 (Vic). Section 63(1) of the Civil Procedure Act 2010 (Vic) provides:
Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
The enactment of this provision was intended to provide a less stringent test for summary judgment than under the rules of the Court.[5] That was achieved by the statutory adoption of a test of “no real prospect of success” in contrast with a test of whether “the Defendant has no defence to whole or part of a claim … or no defence except as to the amount of a claim”.[6] In applying s 63 it is necessary to give effect to the overarching purpose of the Civil Procedure Act 2010 (Vic) of facilitating “the just, efficient, timely and cost-effective resolution of the real issues in dispute”.[7] The rules and case law which had developed around applications for summary judgment before the enactment of the Civil Procedure Act 2010 (Vic) may assist in its construction and application but may not always be applicable.
[5]Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd [2011] VSC 222, [8] (Dixon J).
[6]Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 22.02(1).
[7]Civil Procedure Act 2010 (Vic) ss 7(1) and 8.
Summary judgment under s 63 requires the Court to be “satisfied” that a claim, defence or counterclaim has no real prospect of success. The need for the Court to be “satisfied” that a defence has no real prospect of success imposes upon the applicant for summary judgment the burden of establishing sufficient material to warrant the order. Even then, however, the Court retains a general discretion under s 64 to allow a matter to proceed to trial.[8] The relevant principles were considered by Dixon J in Ottedin Investments Pty Ltd v Portbury Development Co Pty Ltd[9] in which his Honour said:
[8]Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd [2011] VSC 222, [12] (Dixon J).
[9][2011] VSC 222; see also JBS Southern Aust Pty Ltd v Westcity Group Holdings Pty Ltd [2011] VSC 476, [36]-[50] (Croft J).
Summary Dismissal
7In moving for summary dismissal, a party may rely on r 23.01 of the Rules, s 63 of the Civil Procedure Act 2010, and/or the court's inherent jurisdiction.
8 By civil procedure reform introduced by the Act, the operative effect of the principles governing applications for summary dismissal is now less stringent. The policy background to the reform is identified in the Victorian Law Reform Commission's Civil Justice Review Report (March 2008) and in the explanatory memorandum to the Civil Procedure Bill 2010. The reform is part of a wider trend towards relaxation of summary dismissal rules in the interests of the proper administration of justice. This is evident in s 31A(2) and (3) of the Federal Court of Australia Act 1976 (Cth), r 292 of the Uniform Civil Procedure Rules 1999 (Qld) and the test now applicable under r 24.2 of the Civil Procedure Rules in the United Kingdom.
9 The new test is evident in the plain language of Part 4.4 of the Civil Procedure Act 2010. Section 62 permits a defendant in a civil proceeding to apply to the court for summary judgment on the ground that a plaintiff's claim or part of that claim has no real prospect of success. Section 63 provides:
63 Summary judgment if no real prospect of success
(1)Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
(2)A court may give summary judgment in any civil proceeding under subsection (1)—
(a)on the application of a plaintiff in a civil proceeding;
(b)on the application of a defendant in a civil proceeding;
(c)on the court's own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.
It will be recalled that in explaining the test used prior to the Act, a variety of expressions describing that test could be found in the cases. The expression now identified by Parliament is in plain language: "no real prospect of success".
10 This expression follows a British precedent, originating in the well known Access to Justice report of Lord Woolf in 1996. The precise expression used in the English Rules, "no real prospect of succeeding on the claim or issue", was described by Lord Woolf MR in Swain v Hillman as a phrase speaking for itself, not requiring further amplification. The critical qualifying word "real" directs the court to "the need to see whether there is a realistic, as opposed to a fanciful, prospect of success".
11 In two other respects, the provisions of the Act ought be borne in mind when exercising the discretion to summarily dismiss. First, the court must seek to give effect to the overarching purpose of the Act and the Rules in exercising, or interpreting, the statutory power to summarily dismiss. This overarching purpose is "to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute". The court is directed to further the overarching purpose by having regard to the objects and matters articulated in s 9 of the Act. The manner in which the court will consider these objects and matters will depend on the nature and circumstances of the application before it. On this application, I bear in mind the following objects (s 9(1)):
(a) the just determination of the civil proceeding;
(c) the efficient conduct of the business of the court;
(d)the efficient use of judicial and administrative resources;
(f) the timely determination of the civil proceeding; and
(g)dealing with a civil proceeding in a manner proportionate to—
(i)the complexity or importance of the issues in dispute; and
(ii) the amount in dispute:
and I have regard to the following matters (s 9(2)):
(f)any prejudice that may be suffered by a party as a consequence of any order proposed to be made or direction proposed to be given by the court;
(g)the public importance of the issues in dispute, and the desirability of a judicial determination of those issues; and
(h)the extent to which the parties have had the benefit of legal advice and representation.
12 Second, the discretionary nature of the power to summarily dismiss is exercisable having regard to s 64 of the Act. That section provides:
64 Court may allow a matter to proceed to trial
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a) it is not in the interests of justice to do so; or
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate.
The section affirms the court's broad discretion, exercised judicially, whether to summarily dismiss a proceeding or a claim, which was the basis upon which the previous test was applied. The circumstances in which the court might consider the dispute to be of such a nature that only a full hearing on the merits is appropriate is equally wide in its compass and plainly to be considered in the circumstances of each case.[10]
His Honour went on to note the observations of French CJ and Gummow J in Spencer v Commonwealth of Australia[11] that the exercise of powers to terminate proceedings summarily must always be attended with caution.[12] In Karam v Palmone Shoes Pty Ltd,[13] decided since the coming into force of s 63 of the Civil Procedure Act 2010 (Vic), it was observed that “the power to order summary judgment is [still] to be exercised sparingly and not ‘unless it is clear that there is no real question to be tried’ ”.[14]
[10][2011] VSC 222 [7]-[12] (citations omitted).
[11](2010) 241 CLR 118.
[12]Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd [2011] VSC 222, [15] (Dixon J).
[13][2012] VSCA 97; see also Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99 (Mason, Murphy, Wilson, Deane and Dawson JJ).
[14]Karam v Palmone Shoes Pty Ltd [2012] VSCA 97, [28] (Nettle and Osborn JJA); see also Ticco Pty Ltd v Complete Family Healthcare Services Pty Ltd [2005] VSCA 221, [20]–[21] (Hollingworth AJA), [36]–[37] (Charles JA).
The Court’s power to give summary judgment under s 63 is in addition to the Court’s power under the rules of the Court.[15] There may therefore be a question about whether a plaintiff may be able to verify its cause of action and satisfy a court that a defence has no real prospect of success on a more liberal basis than provided by the rules. In this case the Plaintiff submitted that the requirements in the rules had been complied with and that its cause of action had been verified. The rules of court have been broadened substantially over the years to make verification of the facts easier.[16] A plaintiff may now verify the facts upon which a claim is based from personal knowledge or by statement of fact based upon information and belief if the grounds are set out.[17] Where a fact is verified on the basis of information and belief it is important that the source of the information be disclosed.[18]
[15]Civil Procedure Act 2010 (Vic) s 65.
[16]Cf O 14 r 1 with Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 22.03 and commentary in Neil J Williams, Civil Procedure Victoria, vol 1 at [I 22.03.20] 3365.
[17]Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 22.03(3); see also The Commissioners of the State Bank of Victoria v Tripp [1985] VR 297, 298-9 (Tadgell J); cf Suburban Homes Pty Ltd v Ward [1928] VLR 267, 268-9 (Lowe J) decided under the superseded O 14 r 1).
[18]Hartwell Trent (Australia) Pty Ltd v Tefal Societe Anonyme [1968] VR 3, 13 (Pape J); Westpoint Management Pty Ltd v Goakes [2002] WASCA 317, [14] (Wheeler J); Portbury Development Co Pty Ltd v Ottedin Investments Pty Ltd [2012] VSC 490, [28] (Pagone J).
The Plaintiff primarily relies upon the affidavit of Mr Souhail Mondous sworn 27 November 2012 to verify its claim. The Plaintiff relies also upon two other affidavits sworn by Mr Mondous, one dated 3 June 2011 and the other 5 August 2011, and an affidavit of Mr Janko Nikolic dated 5 August 2011. The Plaintiff’s reliance upon the evidence of Mr Mondous was criticised because he does not appear as a director of the Plaintiff in ASIC records tendered by him on the application. However it is clear from his evidence that he is the person best placed to give direct and probative evidence about all matters concerning liability and quantum. Mr Mondous is the Plaintiff’s General Manager. In paragraph 4 of the affidavit of Mr Mondous dated 27 November 2012 the deponent exhibited what was then the proposed further amended statement of claim in respect of which leave was granted at the hearing and deposed:
I am able to state from my own knowledge that the matters set out in the statement of claim are correct and I verily believe that the Defendant does not have a defence to this proceeding.
His verification of the facts are in general terms but the facts he verifies are within his personal knowledge. His direct evidence establishes personal knowledge of the matters pleaded except where his affidavit went on to make statements which were inadmissible conclusions rather than statements of fact. It was Mr Mondous who personally sent the invoices upon which the quantum of the claim is based. To the extent that Mr Mondous has had to rely upon information and belief he has identified the source of his information and belief and it ought to be permitted.[19]
[19]Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 22.03(3).
There is, however, no direct evidence for the Plaintiff that Mrs Feldman actually signed the Agreement. Successful objection was made to some of the evidence of Mr Mondous and, critically, he gave no direct evidence of the Agreement having been signed by Mrs Feldman. The Agreement itself bears initials which, in an affidavit dated 25 July 2011, Mrs Feldman concedes appear to be similar to her initials, although she observes that the initials were not witnessed. The evidence of Mr Mondous concerning the signature by Mrs Feldman was that he received the Agreement from Mr Feldman after Mr Mondous was informed by Mr Feldman that he had obtained Mrs Feldman’s signature. Mr Mondous gave evidence about conversations and said at paragraph 5(h) of his affidavit dated 27 November 2012:
The Grices Road Agreement was signed as a result of these conversations. As noted in my previous affidavit, the agreement when prepared was then taken away by Mr Feldman and Cynthia Feldman’s signature was obtained on it by Mr Feldman. I have no doubt, from the conversations that the Defendant and her husband and I had before the document was signed, that she had full knowledge of – and understanding of – the terms of the document and the obligations she was entering, which had been specifically discussed between us.
The Agreement had been exhibited to the affidavit by Mr Mondous dated 3 June 2011 and in the subsequent affidavit by him of 5 August 2011 Mr Mondous said that he could recall handing the original to Mr Feldman in or about October 2002 for it to be signed. In that affidavit Mr Mondous went on to say at paragraph 2(b):
[Mr Feldman] said he would arrange for its signature. The deceased took the document away to have it signed, both by himself and his wife. I recollect that several days later the deceased returned a copy of the original document to me in the form in which it appears as [the exhibit]. I believe the deceased retained the original.
Plainly Mr Mondous, on behalf of the Plaintiff, is not able to give direct testimony that Mrs Feldman signed the Agreement but produced a copy with initials that Mrs Feldman acknowledged appears to be similar to hers. Mr Mondous also gave evidence from information and belief about its signature by her and evidence about the circumstances surrounding its signing from which inferences may be drawn that the Agreement was likely to have been signed by Mrs Feldman upon the request by her husband that she do so. Mr Mondous has given the source of the fact of signature to which he deposes on information and belief and I accept that evidence.[20] The evidence of Mrs Feldman is not that she did not sign the Agreement but, at its highest, that she cannot recall having done so. The matters about which Mr Mondous can give evidence from his personal knowledge is sufficient to warrant the finding, and if necessary to permit the inference, that the initials appearing on the Agreement were those of Mrs Feldman as her signature and that they were put there when she was asked by her husband to sign the document around October 2002. Furthermore, Mrs Feldman candidly conceded in her affidavit dated 4 December 2012 that:
From time to time my husband gave documents to me and told me to sign them. I did not know what they were. He never explained what they were. I signed them because he told me to, and I relied on him. I did not feel able to refuse to sign. It is possible that this is one of those documents but I cannot say.
Accordingly, I am satisfied that her defence has no real prospect of success if it depended only upon whether Mrs Feldman had signed the Agreement.
[20]Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 22.03(3).
Senior counsel for Mrs Feldman, however, maintained that there was a serious question to be tried about whether the principle in Yerkeyv Jones[21] extended beyond guarantee cases to the circumstances between the Plaintiff and the Defendant. In that case Dixon J (as his Honour then was) said:
In the first place, there is a doctrine, which may now perhaps be regarded as a rule of evidence, that, if a voluntary disposition in favour of the husband is impeached, the burden of establishing that it was not improperly or unfairly procured may be placed upon him by proof of circumstances raising any doubt or suspicion. In the second place, the position of strangers who deal through the husband with the wife in a transaction operating to the husband’s advantage may, by that fact alone, be affected by any equity which as between the wife and the husband might arise from his conduct. In the third place, it still is or may be a condition of the validity of a voluntary dealing by the wife for the advantage of her husband that she really obtained an adequate understanding of the actual nature and consequences of the transaction. [22]
The principle has received some criticism[23] but was endorsed by the High Court in Garcia v National Australia Bank Limited.[24] Assuming (without deciding) that the principle in Yerkey is capable of application beyond guarantee cases to those in which primary liability is asserted against a person who signed an agreement,[25] it is still necessary that the principle is relevantly engaged. In this case Mrs Feldman’s evidence is that from time to time her husband gave documents for her to sign and that she would sign them. Her evidence is that he never explained what the documents were and that she signed them because he had told her to sign them and did so because she had relied upon him. She said that she did not feel able to refuse to sign the documents and that it is possible that the Agreement in question was one of the documents which she signed but could not say whether it was. The evidence on her behalf by Mr David Mond, showed that tax returns prepared on her instructions did not reveal any income derived by her other than as an employee and that, to the best of his knowledge, Mrs Feldman did not derive any personal income nor incur any personal expenses in respect of the cattle business conducted by Mr Feldman. There is, however, no evidence of unconscionable dealing as against Mrs Feldman either by her husband or the by Plaintiff, nor any basis to enliven an equity to make the Agreement unenforceable as between the contracting parties through conduct between Mr and Mrs Feldman.
[21](1939) 63 CLR 649.
[22]Ibid 675-6.
[23]N C Seddon and M P Ellinghaus (eds), Cheshire and Fifoot’s Law of Contract, (9th Australian ed, 2008) [14.16–14.20].
[24](1998) 194 CLR 395.
[25]Compare Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165.
It was also contended on behalf of the Defendant that the Agreement had problems of construction standing in the way of the claim as formulated in the further amended statement of claim. Paragraph 5 of the further amended statement of claim provides:
The Assignee in breach of the Grices Road Agreement has failed, neglected and or refused to pay the plaintiff the amount to be reimbursed and the fee by reason of which the plaintiff has suffered loss and damage and/or seeks payment of the moneys due to it under the agreement as so extended.
Senior counsel for the Defendant submitted that the Plaintiff’s claim did not accord with the entitlement arising from the Agreement. The Agreement may not be a lease, nor probably a license, but the Agreement plainly enough purported to confer upon Mr and Mrs Feldman (in the capacity in which they contracted) the entitlement to manage the land on behalf of the Plaintiff in return for the entitlements which the Agreement gave. Clause 6 of the Agreement gave Mr and Mrs Feldman the right to receive the profits. The Plaintiff was to provide the land with all improvements to be used for farming activity purposes including cattle grazing, horse agistment and other farm activities. Mr and Mrs Feldman were to reimburse certain amounts and to pay a fee. Any doubt about the proper characterization of the Agreement does not affect the construction of the obligations which Mr and Mrs Feldman had to pay specified amounts and upon which Mrs Feldman is sued.
Senior counsel for the Plaintiff also contended that the Plaintiff had not established the quantum for which judgment was sought. In that respect it was submitted that there was an issue about the allocation of an amount of $88,000 which had been paid on 30 March 2007 and ancillary questions about the allocation of other amounts paid. Mr Mond exhibited tables prepared by him showing amounts which had been paid in respect of which it was submitted that there were questions about how the Plaintiff allocated receipts against outstanding debts. However, a comparison of the schedules to the statement of claim (verified by Mr Mondous) with the tables exhibited by Mr Mond reveals that the payments have been taken into account in arriving at the amount of $148,618 now claimed.
The particulars claimed in paragraph 5 of the further amended statement of claim refers to the amounts identified in Schedule 1 which total $148,618. The schedule particularized in paragraph 5 of the statement of claim identifies the amounts of rent and of claims for reimbursement from the period from 22 October 2002 to 30 October 2010. The sum of $88,000 paid on 30 March 2007 was explained by Mr Mondous in one of his affidavits to have been credited against the Grice Road property in respect of the earliest debts. An amount $30,469.45 included in the total claim was conceded by counsel for the Plaintiff to have been wrongly claimed by about $7,500 reducing the total amount claimed within the limitation period to $148,618. The action was commenced in 2011 and the $88,000 paid on 30 March 2007 were applied against amounts owing before 2005.
The amounts which Mr Mond identified in the exhibit to his affidavit dated 4 December 2012 as having been paid without allocation can be seen in all but two amounts to have been allocated (correctly) by the Plaintiff in its claims against the Defendant in respect of a different agreement. Most of the items identified in exhibit DM- 6 to Mr Mond’s affidavit relate to the Pound Road claim and are clearly identified as such in Schedule 3 which is attached to the further amended statement of claim, and are not part of the claim against the Defendant in relation to the Grices Road land. Two amounts identified by Mr Mond in his exhibit are not identified in Schedule 3 to the statement of claim but otherwise appear not to relate to the Grices Road land. One of $38,610 is described in Mr Mond’s exhibit as “Commission Reema Blvd Endeavour Hills” and the other of $6,947 is described as “Commission Homestead Rd Berwick”. It is only the last amount about which there could be an error (because of the reference to Berwick) in the totals otherwise verified by Mr Mondous but the evidence points to the contrary conclusion. The evidence concerning it is in the affidavit of Mr Mond who said in his affidavit of 4 December 2012 that the figure of $6,947 had been identified by Mr Mondous as part of the debt claimed by the Plaintiff of Lot 1275 Pound Road. The amounts claimed in respect of Pound Road are, however, not those claimed in respect of the Grice Road property currently in question and accordingly, I am satisfied that the amounts totalling $148,618 have been verified by Mr Mondous.
Accordingly, but subject to the plaintiff having filed the further amended statement of claim, there will be judgment for the Plaintiff in the sum of $148,618.
---
6
0