Goodway Services Pty Ltd v Mobil Oil Australia Pty Ltd
[2001] VSC 265
•8 August 2001
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 6857 of 1999
| GOODWAY SERVICES PTY. LTD. | Plaintiff |
| v. | |
| MOBIL OIL AUSTRALIA LTD. AND ANOTHER | Defendants |
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JUDGE: | BEACH, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 6 JUNE 2001 | |
DATE OF JUDGMENT: | 8 AUGUST 2001 | |
CASE MAY BE CITED AS: | GOODWAY SERVICES PTY. LTD. v. MOBIL OIL AUSTRALIA LTD. & ANOR. | |
MEDIUM NEUTRAL CITATION: | [2001] VSC 265 | |
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CATCHWORDS: Pleadings – Statement of Claim – Application to strike out – Statement of Claim disclosing cause of action – Plaintiff's claim arguable.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr. G. Griffith Q.C. and Mr. D. Solomon | Arnold Bloch Leibler |
| For the First Defendant | Mr. T.J. North | Tress Cox & Maddox |
| For the Second Defendant | Dr. C.E. Croft S.C. and Mr. M.A. Hanak | Foster Hart |
HIS HONOUR:
This is an appeal from the order of a Master of the Court made on 29 May 2001 whereby the Master ordered that the plaintiff's amended statement of claim filed in the Court on 28 February 2001 be struck out. The Master then gave the plaintiff leave to file and serve a further statement of claim.
The proceeding relates to land situated at the corner of Central Avenue and Merton Street, Laverton being the land described in Certificates of Title Volume 8262 Folio 383 and Volume 9692 Folio 400. At the time relevant to this proceeding, there was a service station on the land. Hereafter I shall refer to the land and the service station as the premises.
By a lease dated 10 May 1988 a company called Saratina Pty. Ltd. leased the premises to the first defendant Mobil Oil Australia Limited (Mobil) for a term of 10 years commencing on 29 March 1988.
Clause 1(i) of the lease provided that except with the written consent of Saratina, Mobil was not to use the premises for any business or purpose other than as a petrol filling station/convenience shop and any other associated development relating to the marketing of petroleum products for motor vehicles.
As one would expect, the lease contained a number of covenants given to Saratina by Mobil. Those relevant for present purposes are 1(d), (f), (m) and (p) which read:
"1(d)To keep the demised premises and all parts thereof and all alterations and additions thereto, including the doors and windows and drains thereof and the fixtures therein and all interior walls in good tenantable and substantial repair and condition (reasonable wear and tear and damage by fire lightning flood and tempest only excepted) and in a thoroughly clean wholesome and sanitary state with the glass all whole in the windows and the locks keys and window fastenings in good order.
(f)Not to use the demised premises for or to do or permit on the demised premises any act which may whether done negligently or without negligence injure or damage the same and if Mobil or any employee or agent of Mobil commits a breach of this or the preceding covenant or if any customer or invitee of Mobil shall damage or injure the demised premises or the walls or fittings or any part or parts thereof, Mobil shall indemnify the Lessor against all losses costs and expenses paid or incurred thereby or rendered necessary for restoring the demised premises to the condition in which they were in immediately prior to such use injury or damage.
(m)Not to do or permit any act or thing which may reasonably be deemed to be or become a nuisance damage or annoyance to the Lessor or tenants or occupiers of other property in the neighbourhood. Provided however that nothing herein contained shall prevent Mobil from carrying on the businesses referred to in Clause 1(i) hereof.
(p)At the end or sooner termination of the term hereby granted and further tenancy (if any) peaceably and quietly to deliver up the demised premises to the Lessor in such state and condition as shall be in accordance with Mobil's obligations herein contained."
The lease also provided that the expression "the lessor" in the lease would include successors and transferees of Saratina.
Since about March 1998 the plaintiff has been the registered proprietor of the premises and the successor and transferee of Saratina within the meaning of the lease.
By an assignment of lease dated 14 December 1988 (with the consent of Saratina) Mobil assigned to the second defendant Strasberg Enterprises (Properties) Pty. Ltd. (Strasberg) the residue of the term of the lease.
Pursuant to the assignment Strasberg covenanted with Saratina that it would duly observe and perform all the covenants and conditions contained in the lease.
Pursuant to clause 6 of the assignment Mobil remained liable to Saratina under the lease in respect of the covenants and conditions in the lease.
The lease expired in August 1999.
The case for the plaintiff as pleaded is that at some point of time which it is presently unable to specify between the commencement of the lease on 29 March 1988 and its expiry in August 1999, the premises became seriously contaminated with hydrocarbons.
The plaintiff alleges that in permitting the premises to become contaminated, and in failing to remedy the contamination before the expiration of the lease, the defendants have breached the covenants in clauses 1(d), (f), (m) and (p) of the lease.
On 14 September 1999 the plaintiff filed a writ in the Court whereby it seeks damages in respect of the loss and damage it has sustained as a consequence of ridding the premises of the contamination.
This is now the third occasion on which a Master of the Court has ordered that its statement of claim be struck out.
In his reasons the Master made the following points which in his opinion justified striking out the plaintiff's statement of claim.
1. The relevant clauses in the lease required that the defendants not "permit" the premises to become contaminated (I assume that the Master was referring to the provisions of clauses 1(f) and (m)).
Paragraphs 11 and 12 pleaded only that sometime between 29 March 1988 and August 1999 the premises became contaminated with hydrocarbons. There was no allegation as to how the premises became contaminated, or at what date they became contaminated, or that the defendants or any one of them had taken any positive step to cause the contamination.
2. Paragraphs 13 and 15 allege that the defendants have failed to indemnify the plaintiff in respect of the costs of removing and remedying the contamination.
The Master has commented in his reasons that no details are given as to the cost of the removal and when it is expected to occur.
I simply note that many details in relation to those aspects appear in the "Particulars" given under paragraph 16 of the statement of claim. As to paragraph 16 the Master expressed surprise that the plaintiff could not be more particular or give better particulars of the costs of the work.
If one looks at the further and better particulars of the plaintiff's statement of claim dated 29 March 2001 both defendants were given quite detailed particulars of those matters.
3. Finally, in the opinion of the Master paragraph 14 of the statement of claim which alleges that if the contamination occurred after the second defendant took the assignment of the lease the second defendant permitted the premises to become contaminated, has the same deficiencies as paragraphs 11 and 12.
The views expressed by the Master were echoed in the submissions made to me by counsel for the defendants.
The principal points they make are that:
1. The plaintiff must specify what caused the contamination, when it was caused and by whom it was caused. If it cannot plead those facts, which it says it cannot, then it has no cause of action against either defendant.
2. There are no material facts pleaded to support the claim in paragraph 11 of the statement of claim that "the demised premises became seriously contaminated with hydrocarbons".
3. The statement of claim does not give any particulars of any act or acts on the part of the defendants from which the conclusion could be drawn that the defendants permitted the contamination to occur. It is said in that regard that the word "permission" assumes a positive act on the part of the defendants and that no positive act or acts has or have been identified. Nor does the statement of claim contain any allegation of material fact that one or other or both defendants caused the contamination.
4. The statement of claim does not plead what the situation was concerning the state of the premises at the commencement of the lease or whether the alleged contamination was over and above that which can be expected in a petrol station.
In answer to those submissions counsel for the plaintiff argues that the case for the plaintiff is quite straightforward and is unaffected by the fact that the plaintiff is unable to establish when the contamination occurred, what caused it and by whom it was caused.
He argues that the plaintiff's claim is for breach of contract only, the contract is the written lease, the lease contains the covenants relied upon, the first defendant remained subject to the covenants throughout the term of the lease and the second defendant became subject to them after it took an assignment of the lease.
The premises were not contaminated at the commencement of the lease. However, during the term of the lease they became contaminated. In permitting the premises to become contaminated the defendants were in breach of the covenants. As a consequence of those breaches the plaintiff has incurred expenditure and suffered loss and damage.
Expressed another way the plaintiff contends that it has a valid claim against the defendants once it establishes that the contamination occurred during the term of the lease.
It is trite law that the onus which rests on a defendant to satisfy a court that a plaintiff's claim should be struck out is a heavy one. A plaintiff's statement of claim should only be struck out where it is so clearly untenable that it cannot possibly succeed.
In Coles Myer Ltd. v. Bowman[1] Charles, JA. said at p.459:
"In my view, the decision of the primary judge to dismiss the appeal was plainly correct. One does not need to cite authority for the propositions that: (a) an application to strike out a statement of claim on the grounds that it does not disclose a cause of action is to be refused unless the claim which is attacked is so clearly untenable that it cannot possibly succeed; and (b) the plaintiff's right to state his own case as he will, and to plead the facts which he contends will ground his claim, is not to be restricted unless it appears on the face of the pleading that the connection contended for between the facts alleged and the claims which are made is bound to fail. If Bowman's claim is not so clearly untenable that it is bound to fail, the proper course is for the matter to proceed to a trial at which the relevant facts can be established and it will then become possible for the courts to apply the law to those facts: cf. Wickstead v. Browne (1992) 30 N.S.W.L.R. 1 at 6 per Kirby P."
[1](1996) 1 V.R. 457
I entirely agree with his Honour's observations.
It would seem to me that if the plaintiff in the present case can establish that the premises were not contaminated at the commencement of the lease, but were contaminated at the conclusion of the lease, that in the absence of more, it may well be arguable that the defendants have been in breach of one or other of the covenants in the lease and that the plaintiff has suffered damage as a consequence of that breach.
It would seem to me to be a somewhat odd situation if I were to lease an undamaged vehicle owned by me to a third party, and find on its return a week later that it was severely damaged, that I would not have a cause of action against the third party unless I could establish the date upon which the vehicle was damaged, how it was damaged and that the third party had personally caused the damage to it. Yet by analogy, that is what the defendants in the present case would argue.
In the final analysis I am not satisfied that the plaintiff's claim is untenable and bound to fail.
I order therefore that the appeal be allowed and that the orders of the Master made on 29 May 2001 be set aside.
I order that the first defendant's summons filed 3 May 2001 and the second defendant's summons filed 4 May 2001 be dismissed.
I order that the defendants pay the plaintiff's costs of the summonses and of the appeal.
I grant to the defendants the appropriate certificates pursuant to the Appeal Costs Act in respect of their costs of the appeal and the costs they are required to pay to the plaintiff in respect of the appeal.
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