Golota v The Owners of Parkhill Strata Plan 10528 - [2018] WADC 93

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   GOLOTA -v- THE OWNERS OF PARKHILL STRATA PLAN 10528 [2018] WADC 93
CORAM:   REGISTRAR KINGSLEY
HEARD:   25 MAY 2018
DELIVERED          :   10 AUGUST 2018
FILE NO/S:   CIV 3494 of 2013
BETWEEN:   TATIANA GOLOTA
Plaintiff
AND
THE OWNERS OF PARKHILL STRATA PLAN 10528
Defendant

Catchwords:

Practice - Order 16 Rules of the Supreme Court 1971 - Turns on own facts

Legislation:

Nil

Result:

Judgment given an application by defendant

Representation:

Counsel:

Plaintiff	:	Mr A Metaxas
Defendant	:	Mr A Hershowitz

Solicitors:

Plaintiff	:	Metaxas Legal
Defendant	:	SRB Legal

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

APT Finance Pty Ltd v Bajada [2008] WASCA 73
Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614
Consolidated Trust Co Ltd v Naylor [1936] HCA 33
Knights Capital Group Ltd v Bajada and Associates Pty Ltd [2016] WASC 69
Marcon Pty Ltd v Kerman Contracting Pty Ltd [2015] WASCA 7
McIntosh v Shashoua (1931) 46 CLR 494
Norman v Federal Commissioner of Taxation [1963] HCA 21

REGISTRAR KINGSLEY:

Background

The plaintiff was the registered proprietor of a penthouse apartment the subject of Strata Plan 10528 (the apartment). The defendant is the strata company incorporated for the benefit of the owners of Strata Plan 10528, of which the plaintiff was previously one such owner. The defendant is responsible for controlling and managing the common property of the strata plan for the benefit of all owners.
In August 2011 there was heavy rainfall. The plaintiff alleges the rainfall caused rainwater to penetrate the roof of the apartment and enter the apartment. The plaintiff alleges that the penetration of the water into the apartment was caused by the defendant's breach of statutory duties and/or a duty of care, and commenced proceedings in 2013.
The plaintiff's claim is:
(a)a declaration that the defendant was obliged to repair and maintain a cracked wall in the apartment;
(b)cost of repairs for damage to the apartment and reinstatement of the apartment to its pre‑instant state;
(c)damage to fixtures and fittings and the cost of replacement/repair;
(d)damage to furnishings and the cost of replacement and repair thereof;
(e)damage to clothing and personal effects and the cost of replacement thereof; and
(f)loss of use of the penthouse since August 2011 due to inability to reside there.
The defendant has brought an application pursuant to O 16 Rules of the Supreme Court 1971 in respect of the plaintiff's claim referred to in subparagraphs (a), (b), (c) and (d) above. The defendant relies on the affidavit of Josephine Mary Courtney sworn 2 February 2018 (the Courtney affidavit). The plaintiff has filed an affidavit through her solicitor Arthur Metaxas sworn 12 April 2018 (the Metaxas affidavit).

Legal principles on an O 16 application

The principles relating to a defendant's summary judgment application are well settled: the onus is on the defendant to show there was no serious question to be tried on a particular cause of action raised by the plaintiff, but the power to order summary judgment is one that should be exercised with great care. It is only in the clearest case where there is a high degree of certainty about the ultimate outcome of the proceeding if the matter went to trial that summary judgment ought properly be granted (Knights Capital Group Ltd v Bajada and Associates Pty Ltd [2016] WASC 69; Marcon Pty Ltd v Kerman Contracting Pty Ltd [2015] WASCA 7).

The defendant's submission – the mortgage

By a mortgage dated 2 December 2015 the apartment was, by the plaintiff as mortgagor, mortgaged to Rosinita Nominees Pty Ltd and Biramont Pty Ltd (the mortgagees) (Courtney Affidavit, - JMC 3). The plaintiff fell into default under the terms of the mortgage and the mortgagees commenced proceedings in the Supreme Court (Supreme Court CIV 3157 of 2016) for possession of the apartment. By order of the Supreme Court dated 3 July 2017 the Supreme Court ordered the plaintiff, within 45 days of service of the order on her, give vacant possession of the apartment to the mortgagees, and pay the mortgagees the amounts owing under the mortgage. The Sheriff seized the apartment on 28 September 2017, and possession taken by the mortgagees (Courtney affidavit, page 48).
The mortgage contained certain express provisions. At cl 54.5 the mortgage provided that the mortgagor (the plaintiff) covenanted and agreed with the mortgagee that the mortgagor is the plaintiff in these proceedings (defined in the mortgage as 'the Court Proceedings') claiming damages relating to physical damage to the mortgaged property and consequential losses which the mortgagor says are the responsibility of the Strata Company (the defendant).
Clause 54.5.2 provides that in the event of a default on the part of the mortgagor to observe or perform any of the covenants, agreements and conditions on the part of the mortgagor the mortgagor assigns to the mortgagee all her interest in the Court Proceedings, irrevocably consents and agrees that the mortgagee shall conduct the Court Proceedings in the name of the mortgagor as the mortgagee deems fit at the mortgagee's sole discretion and irrevocably consents and agrees to the mortgagee prosecuting or compromising the Court Proceedings as the mortgagee deems fit in its absolute discretion.
Courtney in her affidavit deposes the mortgagees attended a mediation conference, in these proceedings, on 25 August 2017, and a further mediation conference on 17 October 2017. Ms Courtney deposes there was no objection from the plaintiff to the attendance of the mortgagees on both occasions (Courtney Affidavit, pars16 and 18).
The defendant's solicitors and mortgagees reached agreement for repairs to be undertaken to the common property and to the apartment and in doing so the mortgagees compromised part of the plaintiff's claim. The defendant has completed the works (Courtney affidavit pars 19 – 22).
The plaintiff opposes the defendant's application technically on the grounds that the defendant's application is out of time and substantively as plaintiff's counsel submits, the application is presumably on the basis that there was a default by the plaintiff, the plaintiff's right of action was assigned to the mortgagees, and the plaintiff's rights against the defendant in respect of some matters were compromised.

Delay

The defendant's appearance in the action was filed on 18 November 2013. The defendant's explanation for the delay in bringing the application is that it only became aware of the matters on which it seeks to rely in April 2017. The plaintiff makes the point that it still took more than 10 months before the defendant brought its application.
Ms Courtney deposes that in April 2017 the mortgagees advised the defendant's solicitors that the plaintiff was in default on the mortgage and that the mortgagees intended to exercise their rights under the terms of the mortgage. The mortgagees attended a mediation conference at the District Court on 25 August 2017 and attended a further mediation conference on 17 October 2017. During November 2017 the defendant's insurer arranged and paid for repairs to the common property in accordance with an agreement reached with the mortgagees. In December 2017 the mortgagees advised the defendant's solicitors that the apartment had been sold by the mortgagees and that the mortgagees and that the mortgagees no longer have any interest in pursuing any claims in respect of the apartment.
At a directions hearing in the matter held 13 December 2017 the court made orders granting the plaintiff leave to file an amended statement of claim by 5 January 2018. The amended statement of claim was to take into account the development since the time the mortgagees obtained possession of the apartment. The plaintiff has not filed an amended statement of claim.
I my opinion, the defendant acted reasonably in attempting to resolve the matter at a mediation conference, with the consequential avoidance of further interlocutory applications and costs. I will grant leave to the defendant to bring the application.
Having regard to the successful mortgagees' action in the Supreme Court to take possession of the apartment in my opinion it is inarguable there was a default. The question then becomes whether the plaintiff's right of action was assigned to the mortgagees, and if so were some of the causes of action compromised.
The plaintiff argue that proper notice of the assignment was not provided pursuant to s 20 Property Law Act 1969 (WA) (PLA). Section 20 PLA provides for the statutory method of assigning legal rights to a debt. (Both parties appear to agree that the plaintiff's claim is a chose in action – see Norman v Federal Commissioner of Taxation [1963] HCA 21.) To be effective as an assignment under s 20 express notice in writing of the assignment must be given to the debtors. There is no prescribed form of notice required under s 20. All that is required is express notice in writing.
The defendant argues that an email dated 4 April 2017 from the mortgagees to the plaintiff is for all intents and purposes express notice in writing. The relevant portion of the email is:
It is the intention of the mortgagees to exercise their rights under the terms of the mortgage and whilst we will allow current negotiations to continue with Migister Legal, nevertheless, we advise as follows:
1.No settlement can be reached without the specific written agreement from the mortgagees.
2.All settlement funds must be paid into the court or our lawyers' trust account. Under no circumstances is any monies to be paid to Ms T Golota or any associated entity.
The words 'express written notice' were considered in Consolidated Trust Co Ltd v Naylor [1936] HCA 33 where the majority stated that express written notice means a notice which indicates an express intention – a direct and definite statement of a thing, as distinguished from supplying materials from which the existence of such a thing may be inferred. The purpose is to make essential actual notice that the debt has been assigned. One of the objects of the giving of notice to the debtor is that he shall know with certainty in whom the legal right to sue him is vested: McIntosh v Shashoua (1931) 46 CLR 494.
In this case the email of 4 April 2017 does not give express notice to the plaintiff. The email of 4 April 2017 is not addressed to the plaintiff, nor her legal representative. There is no express notice in writing directed to the plaintiff, and so in my opinion the email of 4 April 2017 is not effective as an assignment pursuant to s 20 PLA (see APT Finance Pty Ltd v Bajada [2008] WASCA 73).
Notwithstanding that a method of assignment is provided for under s 20 PLA the statutory method is not regarded as an exclusive method and so equity continues to have a role in perfecting imperfect assignments.
In equity the giving of notice is not essential to the validity of an equitable assignment of a presently existing legal chose in action. Whilst notice may be important, it is not a condition precedent to the operation of the assignment (Comptroller of Stamps (Vic) v Howard‑Smith (1936) 54 CLR 614).
In this case, subsequent to the email of 4 April 2017, the mortgagees attended a mediation conference on 25 August 2017, and a further mediation conference on 17 October 2017. All this was without objection from the plaintiff (Courtney affidavit, par 16 and 18). By attending the mediation conference the mortgagees have evidenced their intention to exercise their rights in the proceedings, albeit by letting the plaintiff's solicitor continue negotiations. In my opinion there has been an effective assignment of the proceedings.
Subsequent to 17 October 2017, the defendant's insurer, CHU, and the mortgagees continued negotiations (Courtney affidavit, par 19).
The plaintiff had objected to pars 20 and 21 of Courtney's affidavit. After argument those paragraphs were allowed to stand. At par 20 of her affidavit Courtney deposes that CHU, the defendant's insurer, arranged and paid for repairs to the common property and apartment. This was in accordance with an agreement reached with the mortgagees. At par 21 Courtney deposes that on 16 November 2017 the assessor coordinating the works advised that the mortgagees confirmed the agreed works had been completed on 15 November 2017 to a tradesman's standard and the mortgagees were satisfied with the end result. The keys to the apartment were then handed to the mortgagees.
As they were entitled to do so pursuant to the terms of the mortgage the mortgagees and the defendant have reached a compromise as to those parts of the plaintiff's claim comprising the damage to common property, the apartment and damages to fixtures and fittings.
The uncontradicted evidence is that the defendant's insurer arranged and paid for repairs to the common property and to the apartment. The mortgagees who had taken possession in September 2017 agreed that the works completed on 15 November 2017 had been completed to a tradesman's standard. The defendant's counsel submits that as the defendant and mortgagees have resolved the plaintiff's claims in relation to damage to the common property and apartment there remains no cause of action by the plaintiff against the defendant for these issues. In my opinion the defendant has made out its case that the plaintiff no longer has a claim against the defendant other than a claim for damages to her personal property and for loss of use of the apartment. Judgment will be ordered against the plaintiff in the terms of the defendant's application.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
LW
COURT OFFICER
9 AUGUST 2018