GEBAEUR Nominees Pty Ltd v Cole - [2011] WADC 6

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: GEBAEUR NOMINEES PTY LTD -v- COLE [2011] WADC 6

CORAM: REGISTRAR KINGSLEY

HEARD: 29 OCTOBER 2010

DELIVERED : 20 JANUARY 2011

FILE NO/S: CIV 226 of 2010

BETWEEN: GEBAEUR NOMINEES PTY LTD
Plaintiff
AND
GERHARD JOSEPH COLE
First Defendant
PATRICK EDWARD MULLALLY
Second Defendant

Catchwords:

Practice - Application pursuant to O 14 Rules of the Supreme Court 1971 for vacant possession - Turns on own facts

Legislation:

Nil

Result:

Application allowed

Representation:

Counsel:

Plaintiff:     Mr A J Power
First Defendant             :     In person
Second Defendant         :     In person

Solicitors:

Plaintiff:     WHL Legal Pty Ltd
First Defendant             :     Not applicable
Second Defendant         :     Not applicable

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

Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Gebauer Nominees Pty Ltd v Cole as Trustee for the Hotrox Charcoal Unit Trust t/as Hotrox Charcoal Company [2006] WASC 57
Gebauer Nominees Pty Ltd v Hotrox Charcoal Co [2006] WASC 155
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Legione v Hateley (1983) 152 CLR 406
Webster v Lampard (1993) 177 CLR 598

REGISTRAR KINGSLEY:

The claim

By an endorsed writ filed 27 January 2010 the plaintiff sought recovery of possession of its real property comprising units 4, 5 and 6 of 4 Ladner Street, O'Connor (the Premises) on the basis that the first defendant (Cole) and the second defendant (Mullally) were in possession of the property without lawful entitlement. The plaintiff claimed possession, as well as damages equivalent to the gross rental value from 1 December 2009 and interest.
In an amended further substituted statement of claim dated 7 May 2010 the plaintiff pleads that it is and was at all material times, the registered proprietor of the premises. On 1 May 1998 Cole and Mullally as lessees entered into a written lease agreement with the plaintiff as lessor for a term of two years with an option to renew the term for a further two years. Cole and Mullally exercised the option to renew and the new term expired on 1 May 2002.
The plaintiff pleads that on 24 November 2009, the plaintiff notified Cole and Mullally in writing they were required to provide vacant possession by no later than 30 November 2009. The plaintiff pleads, despite that demand, Cole and Mullally fail and continue to refuse to provide vacant possession. The plaintiff goes on to plead that it has lost the use of the premises and has been deprived of the commercial opportunity to lease the premises on a long term commercial lease at market rates.

The application and relevant law

The plaintiff has brought an application dated 24 March 2010 pursuant to O 14 Rules of the Supreme Court 1971 (RSC) for vacant possession of the premises.
It is well established that the power to order summary judgment should be exercised with great care and should never be exercised unless it is clear there is no real question to be tried. Great care must be exercised to ensure that, under the guise of achieving expeditious finality, a party is not improperly deprived of its opportunity for the trial of their case before a court (Fancourt v MercantileCredits Ltd (1983) 154 CLR 87 and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125).
Where there are disputed facts, and in the absence of cross-examination, the application is to be determined on the basis that the defendant's version of the facts, assuming that it is not inherently incredible, will ultimately be accepted at the trial of the action (Webster v Lampard (1993) 177 CLR 598). If, after argument, there remains real uncertainty as to the plaintiff's right to judgment without further investigation of the facts, summary judgment must be refused (Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184).

The applicant

The plaintiff in the proceedings, Gebauer Nominees Pty Ltd, is the registered proprietor of the premises. Attached to the affidavit of Natalie Denne Xian Zhen Chow, sworn 29 March 2010 is a true copy of the certificate of title for the premises showing the plaintiff as the registered proprietor. Attached to the affidavit of Roger Dane Lewis (Lewis) sworn 28 May 2010 is a copy of the certificate of registration of Gebauer Nominees Pty Ltd as a company under the Corporations Act 2001 in Western Australia.
Cole, in his affidavit dated 1 June 2010 at par 163 deposes that the plaintiff has failed to disclose it acts in the capacity as trustee for the Gebauer Family Trust which is the ultimate owner of the property. In my opinion that issue is irrelevant. The plaintiff is the registered proprietor of the premises and it is the plaintiff, as registered proprietor, who is suing for vacant possession.

The evidence

The following affidavits are before me:
1.Lewis dated 24 March 2010;
2.Mullally dated 27 April 2010;
3.Cole dated 1 June 2010;
4.Lewis dated 2 July 2010;
5.Cole dated 23 September 2010;
6.David Ross Weaver dated 8 October 2010 (the casualty claim advisor for Zurich);
7.Lewis dated 12 October 2010;
8.Hannes Gebauer dated 14 October 2010 (for the plaintiff);
9.Cole dated 22 October 2010; and
10.Eric Rogers dated 27 October 2010 (the property manager of Metway Real Estate).
As to Cole's affidavits, the plaintiff solicitor have filed two schedules of objections. The theme of the objections to the various paragraphs are that they are inadmissible opinion, speculation comment and irrelevance.
Sensibly, plaintiffs counsel did not seek to argue each and every objection, being content to leave it to me, when considering the evidence of Cole, to take into account the objection and determine whether an objection was properly taken or not. Where I have made reference to Cole's affidavit, it is to a paragraph not objected to by the plaintiff's counsel.

The lease

The lease made 1 May 1998 is between the plaintiff and Hotrox Charcoal Company as lessee (Lewis, 24 March 2010, page 6 – 36). The lease is signed by Cole and Mullally.
In October 1997, the business name Hotrox Charcoal Company was registered and the persons named as carrying on business were Cole and Mullally. In Gebauer Nominees Pty Ltd v Cole as Trustee for the Hotrox Charcoal Unit Trust t/as Hotrox Charcoal Company [2006] WASC 57 Hasluck J [75] stated that:
… prima face the lease is valid and enforceable by and against Cole and Mullally as persons signing as lessees.

The issues

The issues that the defendants raise to resist the O14 RSC application are:
1.There is an agreement, an undertaking or an estoppel whereby the plaintiff agreed or undertook or is estopped from taking possession of the premises until the conclusion of arbitration and Supreme Court proceedings.
2.There are discrepancies in relation to rental payments.
3.The claims by Cole and Mullally in relation to two fires on the premises.
4.That the plant and machinery on the premises must be preserved as evidence in future proceedings.

Discussion on the issues

The agreement, understanding or estoppel

During 1999, the parties were in disputation over the condition of the premises. The dispute was referred to an arbitrator and he entered upon the reference in October 1999. The arbitrator brought down an interim award in May 2000 as the liability only and brought down a final award in December 2009. Between May 2000 and February 2009 there were Supreme Court and Court of Appeal hearings.
In a letter dated 18 December 2001 (Cole, 1 June 2010, page 444) from the plaintiff's lawyers to the defendant's lawyers, the plaintiff's lawyer referred to an extempore meeting late on Wednesday, 12 December 2001 between the lawyers for the parties. The letter goes on to say:
In the meantime, and until the outcome of our client's application to the Supreme Court has been determined, would you please direct your client that no steps should be taken to commence the removal of its plant and equipment or to reinstate the building.
On 21 December 2001 (Cole, 1 June 2010, page 446), the defendant's solicitors wrote to the plaintiff's solicitors stating that:
No steps will be taken by our client to commence the removal of the plant and equipment or to reinstate the building until the outcome of your client's application to the Supreme Court has been determined. However, should this undertaking mean that our client is left with too little time to remove its plant and equipment and reinstate the building, we place on record that our client will not in any way be liable for any costs associated with their holding over from 1 May 2002 onwards.
The reference in the letter to 1 May 2002 (Cole, 1 June 2010 page 451) is the date of expiry of the lease term. Subsequently, by letter dated 19 April 2002 (Cole, 1 June 2010, page 448) from the plaintiff's solicitors to the defendant's solicitors, the plaintiff's solicitor stated:
Our client (as landlord) consents to your client (as tenant) remaining in the premises up to and beyond 30 April 2002 until such time as the Supreme Court proceedings has been finally concluded and for three months thereafter to enable your client to dismantle and remove 'the production facility' and thereafter reinstate the premises. Our client's consent, however, is conditional on your client's continued undertaking (as first requested in our letter to you dated 18 December 2001 and as agreed in your letter to us dated 21 December 2001) that no steps are to be taken by your client (or we submit, any other person acting on its behalf) to commence the removal of its plant and equipment or to reinstate the building.
In their response by letter dated 26 April 2002, the defendant's solicitors wrote to the plaintiff's solicitors stating (par 6):
We note the consent of your client (as landlords) to our client (as tenant) remaining in the premises 'up to and beyond 30 April 2002 until such time as the Supreme Court decisions have been finally concluded and for three months thereafter' … Our client undertakes that no steps will be taken by them or any other person acting on their behalf to commence the removal of their plant and equipment or to reinstate the building prior to the expiry of this period.
The application in the Supreme Court in 2001 was proceeding ARB 26 of 2001 which was heard by Master Sanderson in March 2002. The proceedings, commenced by originating summons, sought orders in relation to leave to administer interrogatories, and for access by a nominated expert to the premises for inspection. The issue before the learned master was the appropriateness of the expert having access to information where that expert might be a competitor and might glean something for his personal use as a result of the inspection. The master made orders permitting the expert access to the proceedings. By notice of motion dated May 2002 the defendant appealed the orders made by Master Sanderson. That appeal was heard by the Full Court of the Supreme Court in October 2002 and the appeal was allowed. The matter was remitted to the master to be heard and determined on such further evidence as each of the parties may decide to lead.
It would appear the matter came before Justice Simmonds in 2006 (Gebauer Nominees Pty Ltd v Hotrox Charcoal Co [2006] WASC 155) rather then the master Simmonds J determined that the nominated expert be permitted to inspect the premises. (See Lewis, 2 July 2010)
The proceedings at the time the letters were written were the Supreme Court proceedings in relation to the plaintiff's application to administer interrogatories, and the inspection of the premises by an expert. Those proceedings were finally concluded when Justice Simmonds handed down his decision in October 2006. In my opinion, to say that the Supreme Court proceedings referred to in the letters of the plaintiff's solicitor and the defendant's solicitor means any Supreme Court proceedings in the future, is far fetched and fanciful. The undertakings or agreements reached in relation to the proceedings must be viewed in the context of the Supreme Court proceedings then on foot. Those proceedings were concluded by Justice Simmonds in October 2006.
This conclusion appears consistent with the defendants' solicitors understanding. During the course of the arbitration on 23 February 2009 (Cole, 1 June 2010 pages 95 and 96) there is an exchange between the arbitrator and the defendants' solicitor relating to the equipment on the premises. The arbitrator suggested the equipment had been taken out of the premises and the defendants' solicitor stated "The equipment has been decommissioned damaged by fire, is now derelict and redundant, remains in situ".
The response to the arbitrators next question 'damaged by fire?' the defendants solicitor responded:
Yes. There was a fire a few years ago which damaged it as well and it has not been able to be used. It is sitting there because of an understanding that was provided in writing, to the solicitors – two firms prior to the current solicitors for the respondent plus an associate sought an understanding that the premises would – that the plant and equipment would remain until the outcome of the Supreme Court proceedings. It didn't state which proceedings but they were recently inspected by one of the expert witnesses engaged. Essentially it has been left there pending the outcome of this matter.
In the context of the proceedings at the time of the reference to expert witness refers to the issue before Master Sanderson and subsequently before Justice Simmonds. Those proceedings, as I have stated were concluded in 2006.
In my opinion, any agreement or undertaking reached between the parties was in relation to the Supreme Court proceedings then existing in 2001 and 2002. In my opinion, there is no defence to the O 14 application on the basis of an agreement extending to any Supreme Court proceeding.
Both the defendants submit that in any event, the plaintiff is estopped from taking possession of the premises. The estoppel is said to arise from the cross‑examination of Dr Hannes Gebauer (see Gebauer 14 October 2010, page 5) in the arbitration proceedings. Doctor Gebauer is asked the question 'do you know why the premises have not been vacated since 1 May 2002?' and his answer is:
Well, Gebauer Nominees needed the premises to be held in its state so this arbitration court has the ability of assessing or otherwise the ability of Hotrox to produce the vast quantity of hotrox it alleged it could, so therefore preservation of evidence.
The defendants argue that the plaintiff is now estopped from retaking possession of the premises. It is suggested that estoppel is a device for the imposition of obligation (Seddon & Ellinghaus Law of Contract (9^thAustralian ed) Seddon and Ellinghaus Butterworths 2008 chapter 2.1). The basis for an estoppel is a promissory statement which must be reasonably clear and unambiguous (Legione v Hateley (1983) 152 CLR 406).
Again, in the context of the proceeding in which the statement is made by Dr Gebauer it is the arbitration proceedings then being heard. The clear statement by Dr Gebauer is that the premises were 'to be held in its state so this (my emphasis) arbitration court has the ability of assessing or otherwise the ability of Hotrox to produce a vast quantity of hotrox – it alleged it could'. Unambiguously, the reference is to the arbitration proceedings presently on foot. In my opinion, the estoppel could not extend to any arbitration proceeding in the future. Accordingly I am of the opinion the defendants do not have a defence based on a argument of estoppel.
As to the issue of preservation of evidence, I will come to that shortly.
In any event, I am of the opinion that any agreement has been abandoned by the defendant's solicitors. By a letter dated 28 August 2009 (Cole, 1 June 2010, page 165) from the defendant's solicitors to the plaintiff's solicitors, the defendant's solicitor's state:
As noted above, the hearing of the arbitration has come to end but the arbitration is not at an end until such time as the award is handed down. Our client was of the understanding (consistent with the evidence given by Dr Hannis Gebauer), that our client would not be required to dismantle the factory and vacate the premises until after the arbitration award has been handed down.
The letter goes on to say that, notwithstanding, the defendant's have commenced dismantling the factory and, given the size and nature of the plant and equipment in question, the defendant must be given a reasonable amount of time to vacate. The letter of 28 August 2009 concludes:
Our client considers that a minimum of 60 days is a reasonable period and on that basis will vacate the premises on or before 31 October 2009. Please confirm that this is in order.
Accordingly, I am of the opinion that the agreement not to take possession was confined to a very specific period and in any event, has been abandoned by the defendant's solicitors by their letter of 28 August 2009.

The issue of rent

Cole, in his affidavit, has raised an issue about a discrepancy in the amount of rent being invoiced and the amount being claimed in the loss of opportunity damages. This argument was not seriously pursued but in any event in my opinion this being an application for possession only, any discrepancy in the rent being invoiced, and the amount being claimed, is irrelevant.

The issue regarding fires

There have been two fires at the premises; the first in March 2006 and the second in June 2006. The fires caused damage to the premises. There is a contention by Cole that by reason of the fires, the defendants could not obtain insurance.
There is no suggestion that the fires started by any act or omission on the part of the plaintiff. There may well be issues as between the defendants and their insurer in relation to the plant and equipment on the premises, but in my opinion that issue is not relevant to a claim for vacant possession.
In my opinion, the issue of the fires does not raise an arguable defence on the part of the defendant.

The need to preserve evidence

The defendants' argument is that there is a need for the defendant to remain in possession to ensure that the plant and equipment is preserved for further proceedings.
The evidence of Rogers (Rogers, 27 October 2010) is that he has conducted a number of internal and one external inspection of the premises, not only recently but over a number of years. Rogers deposes to the fact that over those year plants and equipment has been removed, and the premises are no longer the way they were. This is confirmed by the defendant's solicitor's letter of 28 August 2009 which states that the defendant had commenced dismantling the factory. By letter dated 30 October 2009 (Cole, 1 June 2010, page 527) the defendant's solicitors wrote to the plaintiff's solicitors stating that:
To date, all of the electrical equipment and switchboards have been dismantled and placed on pallets as has some of the plant and equipment comprising the production facilities. These pallets will then be placed into sea containers and then removed from the factory premises.
The context of that letter is a request from the defendant's solicitor to the plaintiff's solicitor that the defendant be given a further month within which to complete the process and vacate the factory premises.
Further, in an email dated 7 December 2009 (Cole, 1 June 2010, page 527) from Mullally to the plaintiff's solicitor, Mullally writes:
The preparatory work that Gerry has done over the last few months has made the factory very close to being ready for a hand over.
Mullally, in that email, does voice concern as to whether the plant should be removed completely until the defendant has a final award. Mullally states that it is his understanding 'the plant and equipment remained in situ by demand of the plaintiff as part of the arbitration and until completion of the arbitration which of course has not yet occurred'. This is a reference to the fact that the arbitrator had not, by 7 December 2009, handed down his final award.

Bearing in mind that the events that gave rise to the arbitration occurred over 10 years ago and having regard to the evidence of Rogers and that of Cole, I am of the opinion that the premises are no longer in the way they were and the plant and equipment is no longer as it was. Accordingly, I am of the opinion that there would be no use in preserving what plant and equipment is left.
Accordingly, I am of the opinion that the argument of preservation of evidence does not afford a defence to the defendant.
In any event, if it is necessary to record the current state of the premises, the plaintiff's counsel has stated from the bar table that the plaintiff offers the defendant an opportunity to record the current state of the premises by photographic evidence and have an expert examine it if necessary. I will allow the plaintiffs application.

Conclusion

By reason of the foregoing, I am of the opinion that the defendant has not persuaded me there is any basis to deny the plaintiff its right to take possession of the premises.

Costs

I will hear argument by counsel for the plaintiff and the parties in relation to costs and the formulation of orders to reflect my reasons.