GOLDLIGHT Holdings v Patina Pty Ltd
[2008] WADC 130
•11 SEPTEMBER 2008
GOLDLIGHT HOLDINGS -v- PATINA PTY LTD [2008] WADC 130
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WADC 130 | |
| Case No: | CIV:677/2008 | 1 AUGUST 2008 | |
| Coram: | SCOTT DCJ | 11/09/08 | |
| PERTH | |||
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed Unconditional leave to defend granted Action remitted to Supreme Court | ||
| PDF Version |
| Parties: | GOLDLIGHT HOLDINGS (ACN 120 730 850) PATINA PTY LTD (ACN 008 971 597) |
Catchwords: | Summary judgment Triable issue Remission to Supreme Court Turns on own facts |
Legislation: | Nil |
Case References: | Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 General Credits (Finance) Pty Ltd v Shipton Holdings Pty Ltd, unreported; SCt of WA; Library No 2054; 19 May 1977 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
PATINA PTY LTD (ACN 008 971 597)
Defendant
Catchwords:
Summary judgment - Triable issue - Remission to Supreme Court - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Unconditional leave to defend granted
Action remitted to Supreme Court
(Page 2)
Representation:
Counsel:
Plaintiff : Mr M L Bennett
Defendant : Mr R J L McCormack
Solicitors:
Plaintiff : Lavan Legal
Defendant : Richard Payne & Associates
Case(s) referred to in judgment(s):
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
General Credits (Finance) Pty Ltd v Shipton Holdings Pty Ltd, unreported; SCt of WA; Library No 2054; 19 May 1977
(Page 3)
1 SCOTT DCJ: This is one of a number of actions on foot in the District Court in which the plaintiff claims (inter alia) an order for specific performance against defendants who entered into contracts to purchase lots in a subdivision of which the plaintiff was the developer. There is also an action on foot in the Supreme Court, CIV 1309 of 2008, in which the defendant is Dale Richard Poole ("Poole action") in which the same or similar relief is sought by the plaintiff. The Poole action was commenced in the Supreme Court because the amount in dispute exceeded the jurisdiction of this Court.
2 In this Court the plaintiff has made an application for summary judgment pursuant to O 14 r 3 in this action and in two other actions, namely 684 of 2008 in which Adrian John Moore is the defendant ("Moore action") and 682 of 2008 in which Robert John Drysdale is the defendant ("Drysdale action").
3 The plaintiff's applications for summary judgment in this action, the Moore action and the Drysdale action are to some extent test cases and in the event that summary judgment was granted to the plaintiff in these actions then the plaintiff will, as I understand it, press on with applications for summary judgment in the other actions.
4 If the plaintiff's applications for summary judgment are not successful in this action and/or the Moore action and/or the Drysdale action, then the defendants in these actions propose that all of the actions in this Court be remitted to the Supreme Court to be dealt with in concert with the Poole action given likely cost savings by reason that there are issues common to all actions. To that end the defendant in the Moore action took out a chambers summons on 23 June 2008.
Order 14 – principles
5 The principles governing applications for summary judgment are not contentious. The plaintiff bears the burden of persuading the court that the claim is a good one, that there is no defence to it and that leave to defend should thereby not be granted and judgment should be given for the plaintiff.
6 The defendant assumes an evidentiary burden but the overall legal burden of persuasion remains upon the applicant (Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18 at 23).
7 The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no
(Page 4)
- real question to be tried (Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99).
8 The question, in the end, is whether there is a triable issue or a real question which ought to be tried.
9 Even though the defendant cannot show an issue which ought to be tried, he or she may be able to satisfy the Court that the circumstances ought to be investigated and that the claim requires the closer investigation of a trial (General Credits (Finance) Pty Ltd v Shipton Holdings Pty Ltd, unreported; SCt of WA; Library No 2054; 19 May 1977).
10 Counsel for the defendant submits that this action is one in which the principles in that case ought to be applied. To that end he says that the nature of the representations alleged to have been made by the agent of the plaintiff and the multiplicity of actions arising out of the same or similar set of facts might justify a determination that even if there is no clear issue which ought to be tried, there is in any event good reason for investigation which will result from a trial. I do not accept that submission. My view is that if I am not satisfied that there is a question which ought to be tried, then the plaintiff would be entitled to judgment.
Whether question to be tried
11 In the statement of claim the plaintiff (relevantly) pleads that:
"(a) By written contract made on or about 7 February 2007 the Plaintiff agreed to sell and the Defendant agreed to purchase Lot 913 in the Plaintiff's subdivision ('lot') for the price of $225,000 ("price").
(b) The contract provided (inter alia) that:
(i) the Defendant would pay to the Plaintiff a deposit of $2,000 with the balance of the price to be paid on settlement;
(ii) as soon as practicable after the plan of subdivision was in order for dealing the Plaintiff was to apply for and arrange for the issue of a separate Certificate of Title for the lot and notify the Defendant as soon as practicable after a separate Certificate of Title had been issued for the lot;
- (iii) settlement was to occur 14 days after a Certificate of Title for the lot was issued;
(iv) in the event that the Defendant repudiated the contract the Plaintiff was entitled to affirm the contract and sue the Defendant for damages in default or for specific performance.
- (c) On or about 20 March 2008 the Plaintiff applied for and arranged for the issue of a separate Certificate of Title for the lot.
(d) On 11 February 2008 the Defendant purported to terminate the contract.
(e) On 17 March 2008 the Plaintiff affirmed the contract.
(f) On or about 14 April 2008 a duplicate Certificate of Title for the lot was issued to the Plaintiff and on or about 15 April 2008 the Plaintiff notified the Defendant in writing that a separate Certificate of Title had been issued for the lot."
12 The plaintiff maintains that it is and was at all material times ready, willing and able to complete the contract.
13 The plaintiff seeks (inter alia) a declaration that the contract remains in full force and effect and an order for specific performance.
14 The affidavit in support of the plaintiff's application was sworn by Carmelo Giglia on 1 May 2008 ("Giglia's affidavit"). In that affidavit Mr Giglia verified the facts upon which the plaintiff's claim was based and further deposed to the fact that he was informed by Frank Di Latte that Mr Di Latte did not make representations to the defendant in the terms alleged in the letter from Richard Payne & Associates dated 11 February 2008 exhibited to the Giglia affidavit.
15 Mr Di Latte did not swear an affidavit in support of the plaintiff's application.
16 In response to the plaintiff's application the defendant filed a number of affidavits, namely:
(a) affidavit of Concetta Puglia ("Mrs Puglia") sworn 29 May 2008 ("Puglia's first affidavit");
(Page 6)
- (b) affidavit of Mrs Puglia sworn 14 August 2008 ("Puglia's second affidavit"); and
(c) affidavit of Mrs Puglia sworn 21 August 2008 ("Puglia's third affidavit").
17 In response to Puglia's second affidavit the plaintiff filed two further affidavits, namely:
(a) affidavit of Nathan Christopher Ebbs sworn 19 August 2008 ("Ebbs' first affidavit"); and
(b) affidavit of Nathan Christopher Ebbs sworn 20 August 2008 ("Ebbs' second affidavit").
18 The defendant also relies upon the affidavit of Richard Andrew Payne sworn 18 July 2008 in the Moore action ("Payne's affidavit") to which was exhibited:
(a) copies of the orders made in the Poole action;
(b) copy of the statement of claim in the Poole action; and
(c) copy of the amended defence and counterclaim in the Poole action.
19 In Puglia's second affidavit (par 16) she deposes to the fact that in the event that unconditional leave is granted to the defendant to defend this action she proposes to instruct the defendant's solicitor to lodge a counterclaim, the substance of which will seek orders confirming that the contract is at an end and that the defendant is entitled to a return of its $2,000 deposit. That counterclaim will be in similar terms to the counterclaim filed in the Poole action.
20 The issues raised by the defendant which are contended to be triable issues are as follows. In Puglia's first affidavit Mrs Puglia deposed to the following:
(a) Mr Di Latte, as the agent for the plaintiff made certain representations to (inter alia) the directors of the defendant to induce, relevantly, the defendant to enter into the contract and pay the price ("representations"). The representations were made at meetings at which the directors of the defendant attended together with other potential buyers of lots in the subdivision, including other defendants in proceedings instituted by the plaintiff;
(b) The representations were as follows:
(Page 7)
- (1) it was not necessary for an offer to purchase a lot in the subdivision to be subject to finance because if a buyer could not proceed with the purchase the worst that would happen would be that the buyer would lose the deposit of $2,000;
(2) an assurance that in the event that a buyer could not obtain finance for a purchase or was unable to proceed to settlement, the buyer would only lose the deposit of $2,000;
(3) a further assurance that if a buyer was unable to complete the purchase (of the relevant lot) the worst case scenario would be that the buyer would only lose the $2,000 deposit; and
(4) that if a buyer entered into a contract to purchase a lot, by the time of settlement the lot would have gone up in value by $20,000 to $30,000 and the buyer could on sell at a profit.
(Par 6).
(c) in reliance upon the representations the defendant entered into the contract to purchase the lot. The defendant would not have executed the contract in the absence of the representations because the defendant was only prepared to risk the $2,000 deposit. Further, by reason of the then limited financial circumstances of the defendant, it could not afford to complete the purchase of the lot without obtaining bank finance for at least 80 per cent of the purchase price payable under the contract (par 8);
(d) in a telephone conversation in or about July 2007 between Mrs Puglia and Mr Di Latte, Mrs Puglia advised Mr Di Latte that the defendant would not be able to proceed with the purchase under the contract and by subsequent correspondence the defendant gave notice that it would not be proceeding with the contract in reliance upon the representations and would forfeit the deposit (par 10); and
(e) by letter dated 11 February 2008 sent by Richard Payne & Associates, the solicitors for the defendant and 15 other buyers of lots in the subdivision to De Vita & Dixon, Richard Payne & Associates confirmed the termination of
- contracts for sale including the contract into which the defendant had entered.
21 By Puglia's second affidavit Mrs Puglia:
(a) set out the defendant's financial circumstances as at 10 December 2007 (par 9) which revealed that the defendant had purchased other real estate between the date of the contract and the purported date of termination;
(b) stated that in early December 2007 she telephoned Sean Freestone of Oceanside Finance, a finance broker who had assisted the defendant with finance previously, and asked him what the defendant would require in order to obtain a loan of $215,000 being the amount which the defendant needed to borrow to be able to complete the purchase of the lot;
(c) said that Mr Freestone told her that land values in the area of the subdivision had been going down and that the defendant would only be able to borrow 80 per cent of the lender's valuation of the lot and would need to provide the balance of funds required to complete the purchase of the lot from its own resources (par 10);
(d) said that the defendant did not have the funds available to meet the equity requirements necessary to be paid in order to obtain the loan in addition to which due to the defendant's financial commitments she considered that if it was to take out a further loan for the purchase of the lot, the anticipated monthly repayments on such a loan were much more than she believed the defendant could afford to pay (par 11);
(e) said that the defendant did not make a formal application for a loan having regard to the advice given by Mr Freestone; and
(f) said that it was in those circumstances that she made a decision on behalf of the defendant that it could not afford to complete the purchase of the lot under the contract and had to withdraw from that contract and as a result she forwarded correspondence to the plaintiff dated 10 December 2007 to that effect.
22 The plaintiff:
(Page 9)
- (a) accepts that for the purposes of the application for summary judgment the facts deposed to by or on behalf of the defendant need to be accepted;
(b) contends that the representations were not representations of a future fact but the expression of an opinion and the provisions of s 52 of the Trade Practices Act would not be thereby enlivened. To that end I am of the view that the representations may be construed as referring to the plaintiff's (future) intention not to rely upon the strict terms of the contract should the facts the subject of the representations come to fruition. It is arguable that, in that light, the representations were as to a future fact;
(c) submits that if the representations did amount to representations as to a future fact then on a proper construction of the representations the defendant would need to demonstrate that it was unable (as opposed to unwilling) to complete the contract because of its inability to obtain finance to do so and in order to discharge that evidentiary burden the defendant would need to prove that it had made proper endeavours to obtain finance to enable completion. That would entail at the very least an application actually being made to a recognised funder;
(d) says that the defendant did not make any formal application to a recognised funder and it did no more, via one of its directors, than to make an enquiry by telephone of a finance broker; and
(e) says further that the defendant, after entering into the contract to purchase the lot, then entered into a number of other contracts to purchase real estate for which it borrowed monies and then maintained that it was unable to borrow monies or service a loan thereby rendering it unable to complete the contract.
23 The defendant submits that:
(a) the representations were not confined to the inability on the part of the defendant to obtain finance but included an inability to proceed to settlement for other reasons; and
(b) in any event on the evidence adduced by the affidavits of Mrs Puglia, the defendant has demonstrated that it did not have the equity (20 per cent of the sum which a lender
- would lend against the property) to borrow an amount sufficient to purchase the lot nor did it have the ability to service a loan which it would need to borrow so as to effect settlement.
24 There is no evidence adduced by the defendant as to the market value of the lot at the settlement date save for perhaps the comment made by Mr Freestone referred to above. For the reasons to which I refer below this is not an issue which plays any part in my determination of the application.
25 The question for me to determine is whether I am satisfied that there is no triable issue and that, as a consequence, judgment ought to be granted to the plaintiff, summarily. I am not so satisfied.
26 Although I have some doubt as to whether, in the circumstances in which they were made, the representations could objectively communicate to the defendant that it was entitled to resile from the contract in the event that for any reason it was unable to settle, the representations may be construed as communicating to the defendant that if it was unable to obtain a loan or was unable to proceed to settlement through lack of finance then it would be entitled to resile from the contract and its exposure would not exceed the forfeiture of the deposit.
27 The issue raised by the defendant is that given the downturn in the market it was required to fund 20 per cent of the (then) value of the lot, that it did not have the financial ability to do so and nor did it have the financial ability to pay the instalments required for repayment of any loan.
28 It is true that the defendant did not make a formal application for a loan and that may well be a compelling matter at trial. The steps, however, which the defendant would need to have taken so as to establish that it was unable to obtain finance or secure a loan or that it was unable to effect settlement are matters of degree and are, in my view, matters which will require exploration at trial.
29 The conduct of the defendant in acquiring (and financing the purchase of) additional real estate after entering into the contract for the purchase of the lot, thereby preventing it from obtaining further finance or servicing a further loan, may well raise issues which will impact upon the nature of the obligation on the part of the defendant to take appropriate steps to obtain finance or make arrangements which would enable it to effect settlement of the purchase of the lot. These again are, in my view, matters of degree and are triable issues.
(Page 11)
30 As a consequence I am not satisfied that the plaintiff has established that there is no issue to be tried in this action and I propose to give the defendant unconditional leave to defend.
Remitting action to the Supreme Court
31 I have, in the Moore action and the Drysdale action given the defendants unconditional leave to defend. There is an application on foot in the Moore action for an order that all of the actions in this Court be consolidated and remitted to the Supreme Court to be dealt with in the CMC list with the Poole action.
32 I am not disposed to make an order for consolidation because it might be that there will be a number of factual issues which will be discrete to individual actions. However there is a common thread being the representations alleged to have been made by Mr Di Latte.
33 To that end it might be that the actions can be heard one after the other with evidence in one being, relevantly, evidence in others.
34 As a matter of case management I consider it appropriate that there be an opportunity for the actions to be dealt with in an expeditious way and given the fact that the Poole action has progressed in the CMC list in the Supreme Court I consider it appropriate that this action, the Moore action and the Drysdale action and the other similar actions in this Court be remitted to the Supreme Court and it will be a matter for that Court to determine the manner in which they will then be dealt with.
35 I suggest that the parties submit a minute dealing with the disposition of the summary judgment applications in these three actions and, if appropriate, the other actions in this Court in which I understand Order 14 applications have been made and the remission of the actions to the Supreme Court.
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