Glenberry Nominees Pty Ltd as Trustee for the Flottman Property Trust v Xie - [2022] WADC 52

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   GLENBERRY NOMINEES PTY LTD as Trustee for THE FLOTTMAN PROPERTY TRUST -v- XIE [2022] WADC 52
CORAM:   DEPUTY REGISTRAR HEWITT
HEARD:   25 MAY 2022
DELIVERED          :   7 JUNE 2022
FILE NO/S:   CIV 3991 of 2021
BETWEEN:   GLENBERRY NOMINEES PTY LTD as Trustee for THE FLOTTMAN PROPERTY TRUST
Plaintiff

AND

RUIQING XIE
Defendant

Catchwords:

Practice and procedure - Application to set aside default judgment - Principles to be applied - Whether defence of promissory estoppel - Turns on its own facts

Legislation:

Supreme Court Act 1935 (WA), s 32

Result:

Judgment set aside

Representation:

Counsel:

Plaintiff	:	Mr M S Macdonald
Defendant	:	Mr A H M Lai

Solicitors:

Plaintiff	:	Macdonald Rudder
Defendant	:	AH2 Legal

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

Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89
Je Maintiendrai Pty Ltd v Quaglia (1980) 26 SASR 101

DEPUTY REGISTRAR HEWITT:

In this action the plaintiff obtained a judgment in default of appearance on 18 February 2022. Subsequent to the entry of the judgment, the plaintiff issued a property seizure and sale order essentially seeking execution against a property occupied by the defendant as her home and personal property located at that home. By an application dated 14 April 2022 the defendant applied to set aside the judgment.
In order to succeed, such an application needs to demonstrate a satisfactory reason for the failure of the defendant to enter an appearance and a defence on the merits.
As to the first of those criteria, it seems that the defendant made attempts to have her daughter file an appearance on her behalf but that the situation descended into utter confusion and the appearance was not entered. Part of the problem may well be due to the fact that the defendant's familiarity with court processes and procedures in Western Australia is limited, she having arrived in this country in 2011.
The defendant alleges that she is not able to read or speak the English language and although that latter remark is challenged by the affidavit of Mr J K Flottman lodged 4 May 2022 who takes issue with that assertion, nonetheless, her affidavit in support dated 14 April 2022 was written in Chinese and was translated into English by a qualified interpreter. I think it likely that the defendant has exaggerated her difficulties with the English language, but I accept that she was or would be presented with special difficulties in understanding what was required of her when she received the writ of summons, which would have handicapped her capacity to respond within the time fixed by the rules within which to file an appearance.
The evidence does reveal however that efforts were made to file an appearance, but they were not successful. In the circumstances, I feel that an adequate explanation for the failure to file an appearance within the time required has been made out.
I now turn to the other leg which is required to be satisfied if the judgment is to be set aside. Before embarking on that examination, it is necessary to know something of the case.
The plaintiff was the lessor of a premises situated at 123 James Street, North Perth and known as the Market's Complex. Shop 1 of the complex was leased to one Lam Quoc Dung which sublease was assigned to the defendant to be used by her as a food outlet within the market. The plaintiff went into possession of the leased shop at the beginning of 2012 and remained in occupation until 1 June 2021.
The plaintiff's claim is that over the period of her occupation of the premises the defendant failed to pay the full rental which was due under the terms of the assignment and it seeks $88,515 inclusive of GST together with interest from 1 June 2021 until payment, pursuant to s 32 of the Supreme Court Act 1935 (WA).
Although the sublease document provided that the rental amount would increase by 5% per annum, the plaintiff rendered invoices to the defendant over a considerable period of time which did not make claim for the whole of that increment. The defendant paid the amount of the invoices and the plaintiff now seeks to recover from the defendant the amount of the 5% increases which it could have but did not require her to pay whilst the lease was current. I also note that the invoices which were rendered to the defendant claim amounts for rent and for variable outgoings. Why that should be so is difficult to understand, but it is probably of no moment in dealing with this matter. The plaintiff also claims GST on the amounts of the shortfall. I am not at all sure that the plaintiff is entitled to be paid an allowance for GST when the full amount of GST has been paid on the invoices rendered. Be that as it may, I will now consider the defence which is offered by the defendant to the claim for the arrears of rental.
The defendant primarily relies on a defence of estoppel. The argument is that in choosing not to invoice the defendant for the 5% increases under the lease it is now estopped from making claim for those monies.
As is well known, an estoppel requires a representation, a reliance on the representation, and detriment flowing by virtue of that reliance. In the present case, such detriment as might have occurred is said to be the fact that the defendant is now presented with a very large claim which is beyond her means to pay, whereas if the plaintiff had included the claims in the invoices, the amount would not have built up and she would not be in her present position. It is the evidence of the defendant that she is not in a good financial position and such income as she earns, she obtains through working as a cleaner. The plaintiff is presently engaged in selling the defendant's home to satisfy the judgment debt. She is unable financially to pay off the amount claimed. That, to my mind is a significant detriment and judicial support is found for the proposition in a decision of the Supreme Court of South Australia reported as Je Maintiendrai Pty Ltd v Quaglia (1980) 26 SASR 101 (King CJ, White & Cox JJ).
In that case the landlord promised to reduce rent although not formally recorded in any documentation nor supported by consideration, and it was held the acceptance of the agreed lesser sum was capable of creating a promissory estoppel. In my view, all three of the judges accepted that proposition. Justice White however, concluded that in the absence of evidence of the impact on the lessee that a promissory estoppel should not be found and the appeal before the court dismissed. The other judges however, found that the evidence of detriment was sufficient to support a promissory estoppel and upheld the appeal. The decision of the High Court of Australia in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 is authority for the proposition that Australian courts must follow the decisions of appellate courts across Australia unless those decisions are plainly wrong. That elevates the decision to a very high level and in my view, must be treated as binding in this jurisdiction (unless plainly wrong) to the extent it is relevant.
In this case there is no direct evidence of a promise to reduce the rent although there certainly were discussions about that topic. To my mind what supports the promissory estoppel case is the fact that the plaintiff behaved as though he had decided that he would not pursue the entirety of the 5% increases to which he was entitled. That state of affairs continued for many years and I think it a reasonable proposition that a judge on hearing this evidence might conclude that the behaviour of the plaintiff indicated that he had abandoned the right for the entirety of the increases. Additionally, the fact that the plaintiff did not claim the monies now claimed when it rendered invoices, and the fact the defendant no longer runs her business, is likely to mean she has lost the opportunity to claim that expense for tax purposes. On those scores therefore, I find that there is an arguable defence available to the defendant and that she should be entitled to have that part of the judgment which relates to arrears of rental set aside.
There remains however a portion of the claim which concerns a failure to pay a deposit. Without going into the calculations, essentially the plaintiff alleges that the defendant was required to pay him a $30,000 deposit. It is argued by the defendant that the money was in fact paid and that was achieved by a cheque drawn on the St George Bank. There is evidence before me from the bank to show that a cheque for $50,000 from the defendant to the plaintiff was presented and paid. It is alleged that $20,000 of that payment was allocated to furniture and the like, forming part of the equipment on the premises which was occupied, and the balance was the deposit. The evidence presented by the defendant on this score is powerful. The St George Bank confirms that the money was deposited into an account in the name of the plaintiff. There is clearly an arguable defence in that regard and I so find.
My conclusion therefore is that the defendant has an arguable defence against both aspects of the plaintiff's claim and furthermore has advanced a sufficient reason for failing to file an appearance to justify the judgment being set aside, and that shall be my order.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
FN
Associate
8 JUNE 2022