GOLDLIGHT Holdings Pty Ltd v Morton - [2009] WADC 85

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: GOLDLIGHT HOLDINGS PTY LTD -v- MORTON [2009] WADC 85

CORAM: REGISTRAR KINGSLEY

HEARD: 23 APRIL 2009

DELIVERED : 10 JUNE 2009

FILE NO/S: CIV 1223 of 2008

BETWEEN: GOLDLIGHT HOLDINGS PTY LTD (ACN 120 730 850)
Plaintiff
AND
BENJAMIN SHAUN MORTON
Defendant

Catchwords:

Practice - Application for summary judgment - Turns on own facts

Legislation:

Rules of the Supreme Court 1971

Result:

Application dismissed

Representation:

Counsel:

Plaintiff: Mr M Bennett
Defendant: Mr B S Morton

Solicitors:

Plaintiff: Lavan Legal
Defendant: Mendelawitz Morton

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

Nil

REGISTRAR KINGSLEY: The plaintiff has brought an application pursuant to Rules of the Supreme Court 1971 O 14 seeking specific performance of two contracts entered into between the plaintiff as vendor and the defendant as purchaser.
The plaintiff's application is supported by an affidavit sworn by Carmelo Giglia on 30 July 2008 ("Giglia affidavit"). The defendant, Morton, has sworn an affidavit on 29 August 2008 in opposition to the application ("Morton affidavit").
The plaintiff is the registered proprietor of land known as St Thomas Private Estate, Byford. The St Thomas Private Estate land was sub-divided in April 2008 and 60 separate lots were created.
In December 2006, the plaintiff engaged a real estate agent, Galloway and Associates, for the purpose of marketing and selling the sub-divided blocks in St Thomas Private Estate. The selling agent was one Frank DiLatte. Giglia deposes that he is informed by Mr DiLatte that on or about 14 December 2006, in the presence of Mr DiLatte, Morton executed a contract of sale for lot 941 of St Thomas Private Estate. Giglia, on or about 20 December 2006 on behalf of the plaintiff, in the presence of Mr DiLatte, executed the lot 941 contract.
Giglia deposes that he is informed by Mr DiLatte that Morton has paid a deposit of $2,000 for lot 941 which is held in the trust account of Galloway and Associates.
Giglia further deposes that he is informed by Mr DiLatte that on or about 14 December 2006 Morton, in the presence of Mr DiLatte, executed a contract for lot 942 and again on or about 20 December 2006 Giglia, in the presence of Mr DiLatte, executed the lot 942 contract. Giglia deposes that he is informed by Mr DiLatte that Mr Morton has paid a deposit of $2,000 for lot 942 which is held in the trust account of the Galloway and Associates.
Giglia deposes that, subsequent to the issue of certificates of title for lots 941 and 942, the plaintiff's settlement agent wrote to Morton notifying him that the separate certificates of title had been issued and advising a settlement date. Giglia deposes that Morton failed to settle on lot 941 and 942 and as a consequence on 1 May 2008, the plaintiff's solicitors sent a default notice on behalf of the plaintiff to Morton requiring settlement. Giglia deposes that Morton has failed to comply with the default notices and has not settled and further deposes that the plaintiff is and remains ready, willing and able to proceed with the contracts.
Frank DiLatte has not sworn any affidavit in support of the plaintiff's application.
Morton deposes that in December 2006, he met with DiLatte in Morton's office. DiLatte explained that he was a shareholder of the plaintiff and that the bank providing construction funding to the plaintiff for the development of the St Thomas Private Estate required the lots to be pre-sold to a broad range of unrelated purchasers. DiLatte asked of Morton whether he would agree to buy two lots on certain conditions.
Morton deposes that Mr DiLatte explained that for family and friends of the plaintiff, an option existed whereby DiLatte would market any lots that Morton contracted to buy to replacement buyers. DiLatte stated to Morton that when a replacement buyer was found, the Morton contract with the plaintiff would be terminated and that the plaintiff would contract directly with the replacement buyer. Morton deposes that DiLatte stated that any increase in price that the replacement buyer contracted to pay would be paid to Morton (par 9 Morton affidavit).
Morton deposes that he told DiLatte he was not interested in buying any of the lots but if it would help DiLatte in procuring construction funding then Morton would sign a contract for two lots, providing DiLatte could assure Morton that the plaintiff would cancel the contracts, and contract directly with the replacement buyer irrespective of the purchase price the replacement buyer paid (par 10 Morton affidavit).
Morton deposes that as part of assuring him that the plaintiff would abide its representation, DiLatte explained to Morton that a Mr Penello (a person known to Morton and an associate of DiLatte) through his company had already entered into an agreement with the plaintiff to buy lots, market them to replacement buyers for a higher price and keep the profits (par 11 Morton affidavit). Mr Penello, who was present at the meeting, confirmed to Morton that this was the case.
Morton then deposes that DiLatte assured Morton, as DiLatte was a 20 per cent shareholder in the plaintiff as well as its appointed real estate agent that Morton could take DiLatte's word the plaintiff would honour the promise made to Morton (par 13, Morton affidavit).
Morton goes on to depose at par 15 that DiLatte told him that lot 941 and lot 942 were subject to the agreement referred to in par 11.
At par 21 of his affidavit, Morton deposes that he signed the two contracts and left them at the reception of his workplace for DiLatte to collect. Morton deposes at par 22 that DiLatte was not present when he executed the contracts. At par 23 of the his affidavit, Morton deposes that on 5 January 2007 he received an email from a real estate company asking for him to pay deposits on the two lots he had contracted to purchase. The request to pay the deposits is re‑stated on 22 February 2007. On both occasions Morton deposes that he told DiLatte he was not going to pay the deposits and that if he needed deposits to be paid he should organise replacement buyers forthwith.
In late November 2007, DiLatte met with Morton at Morton's office together with Mr Penello where Morton was informed that replacement buyers had been procured for lots 941 and 942 at a purchase price of $195,000 each. At that meeting, Morton asked DiLatte if that meant the contracts were now cancelled and Morton deposes that DiLatte replied yes. Morton deposes that he told DiLatte that he needed the plaintiff to file a cancellation of contract form as required by the Office of State Revenue.
In December 2007, DiLatte telephoned Morton to advise that the plaintiff was not accepting the replacement buyers and would pursuing all contract parties to perform settlement.

General principles applicable

In considering an application pursuant to O 14, the following principles are in my opinion applicable:
•In considering an application for summary judgment, after the issues have been explained to the Court, there must be real uncertainty, without full argument or further investigation of the facts as to the plaintiff's right to judgment.
•Summary judgment is not confined to cases where it is immediately plain and obvious that there was no defence or real question to be tried. Extensive argument may be necessary to demonstrate there is no question which ought to be tried.
•The Court is not bound to accept uncritically as raising a dispute of fact every statement in an affidavit.
•Where a plaintiff has satisfied all the requirements of O 14 to give, prime face, the right to an order in the terms asked, the burden shifts to the defendant to satisfy the court why judgment should not be given against it.
•A defendant merely needs to depose as to facts would raise an arguable defence and the Court should not, for the purposes of a summary judgment application, attempt to assess the respective parties chances of success or strength of their case.

Discussion

Paragraph 9 of Morton's affidavit details the plaintiff's representation. The plaintiff's agent, DiLatte, would market any lots that Morton contracted to buy to replacement buyers and when a replacement buyer was found, Morton's contract with the plaintiff would be terminated and the plaintiff would contract directly with the replacement buyer. Any increase in price would be paid to Morton upon the replacement buyer settling with the plaintiff.
Morton deposes at par 11 of Morton's affidavit that as a part of assuring him that the plaintiff would abide by its representation (in the context meaning the par 9 representation) DiLatte had explained to Morton that Penello, through his company, had already entered into an agreement with the plaintiff to buy lots, market them to replacement buyers for a higher price, and keep the profit. At par 15, Morton deposes that DiLatte had told him that lots 941 and 942 were subject to the agreement referred to in par 11. But par 11 refers back to the par 9 representation.
However, Morton at par 10 of his affidavit says that he was not interested in buying any of the lots but if it would help DiLatte to procure the construction funding Morton would sign a contract for two lots, providing DiLatte could assure Morton that the plaintiff would cancel the contract and contract directly with replacement buyers irrespective of the purchase price the replacement buyer paid.
The par 10 assurance is clearly different to the par 9 representation as confirmed in par 11 and par 15 of Morton's affidavit. There is nothing in Morton's affidavit that establishes the par 10 assurance. As plaintiff's counsel, in written submissions dated 20 April 2009 states, it appears that Morton seeks to convert a written cash, unconditional contract for the sale of land into an option contract which the defendant could choose to complete or not complete.
I am not satisfied on Morton's evidence that Morton has established the plaintiff made the par 10 assurance: that irrespective of the purchase price the replacement buyer paid, the plaintiff would cancel the contract. Morton, on his own evidence, refers to the plaintiff abiding by its representation: that the plaintiff would contract directly with the replacement buyer and that any increase in price the replacement buyer contracted to pay for a lot would be paid to Morton upon the replacement buyer settling with the plaintiff. The par 10 assurance referred to by Morton is not taken up by the plaintiff on Morton's evidence.
Morton's written submissions are premised on that the plaintiff accepted the par 10 assurance. However there is no evidence in Morton's affidavit that the par 10 assurance was accepted by the plaintiff.
Morton submits that when a replacement buyer for each of the lots was found (the replacement buyer offering a lower purchase price on conditions) the plaintiff refused to sign those contracts, flavouring the representation as misleading and deceptive. Morton's further submits that the par 10 assurance contained an implied statement as to a present fact, namely that the plaintiff would make good the promise that irrespective of the price a replacement buyer paid, the plaintiff would cancel the contracts with Morton. However, that is not the representation made.
I have considerable doubt that Morton's evidence in relation to the representations establishes an arguable defence. However, I am concerned about the evidence given on oath by Giglia and Morton in relation to the execution of the contracts and the payment of the deposit.
Giglia deposes that he is informed by DiLatte that Morton, in the presence of DiLatte, executed the contracts for lot 941 and 942. Morton deposes that he executed the contracts, left them at his reception and the contracts, un‑witnessed, were then collected by DiLatte.
Further, Giglia deposes that he has been informed by DiLatte that Morton has paid $2,000 as a deposit on lot 941 and $2,000 for a deposit on lot 942 and these monies are held in the trust account maintained by Galloway & Associates. Morton deposes that he has not paid any deposit on lot 941 nor lot 942. Notwithstanding that Giglia's affidavit is sworn 30 July 2008, there is no evidence explaining this discrepancy. Nor is there any affidavit from Frank DiLatte. The two deponents are diametrically opposed on these issues.
The two issues go to the integrity of our justice system. Both Giglia and Morton are going on oath as to the statements made in their affidavits. Giglia, of course, is being informed by DiLatte. The difference in the versions is stark and, in my opinion needs to be explained before a Judge.

Conclusion

For these reasons, I am of the opinion the defendant ought to have leave to defend. However, this leave to defend is on the basis that the action come to a prompt trial. The parties are limited and the documentation even more limited. I do not see a trial extending beyond two days.
Accordingly, I intend to give leave to the defendant to defend but with strict programming orders to ensure that this matter comes to a prompt trial. I will hear counsel on the orders, and on costs.