Grainger v Williams - [1999] WADC 57

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: GRAINGER -v- WILLIAMS & ORS [1999] WADC 57

CORAM: DEPUTY REGISTRAR HEWITT

HEARD: 9 AUGUST 1999

DELIVERED : 24 AUGUST 1999

FILE NO/S: CIV 237 of 1999

BETWEEN: GEOFF ORMOND GRAINGER AND JOAN HARRINGTON GRAINGER
Plaintiffs
AND
GALE CURTIS WILLIAMS
First Defendant
RUTH EILEEN WILLIAMS
Second Defendant
MARK CURTIS WILLIAMS
Third Defendant

Catchwords:

Practice - Western Australia - Rules of Supreme Court O14 - Agreements to lease - Terms of lease - Whether additional terms should be implied

Legislation:

Nil

Result:

Application granted

Representation:

Counsel:

Plaintiffs:     Mr M G Clay
First Defendant             :     Mr M A R Bundell
Second Defendant         :     Mr M A R Bundell
Third Defendant           :     Mr M A R Bundell

Solicitors:

Plaintiffs:     Martin de Haas
First Defendant             :     Solomon Brothers
Second Defendant         :     Solomon Brothers
Third Defendant           :     Solomon Brothers

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

Nil

Case(s) also cited:

Bisset v Wilkinson [1927] AC 177
Birch Investments Pty Ltd v Lim; unreported; SCt of WA; BC8801057; 12 July 1988
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1978) 52 ALJR 20
Breen v Williams (1996) 186 CLR 71
Byrne v Australian Airlines Limited (1995) 185 CLR 410
Challenge Bank Ltd v Walters, unreported; SCt of WA; BC9401701; 31 May 1994
Clay v Karlson (1997) 17 WAR 493
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Colgate-Palmolive v Cussons (1993) 46 FCR 225
Cubillo v Commonwealth of Australia (1999) 163 ALR 395
Davies v Hastwell-Batten, unreported; SCt of NSW; BC8500510; 27 September 1985
Elliot v Reading [1999] WASCA 11
Eng Mee Yong v Letchumanan [1980] AC 331
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Gange v Sullivan (1966) 116 CLR 418
Goodfellow v Life Assurance Co of Australia Ltd [1920] VLR 296
Havenbar Pty Ltd v Butterfield (1974) 133 CLR 449
Hynes v Byrne (1899) 9 QLJ 154
Jones v Dunkell (1959) 101 CLR 298
L'Estrange v Graucob Ltd [1934] 2 KB 394
Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60
Mackwell v Petkovic, unreported; FCt SCt of WA; Library No 990070; 18 February 1999
Miles v Hughes, unreported, SCt of WA; Library No 990009; 11 November 1998
Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360
Richlaw Pty Ltd v Blackburne (1988) 19 WAR 164
Schlesniak v Justelle Nominees Pty Ltd, unreported; SCt of WA; BC9301371; 17 August 1993
St Barbara Mines Ltd v Oates, unreported; SCt of WA; Library No 970026; 6 February 1997
Standard Chartered Bank Ltd v Greater Pacific Investments Ltd (1991) 5 WAR 541
Suttor v Gundowa Proprietary Limited (1960) 81 CLR 418
Urquhart v Macpherson (1878) 3 AC 831
Vacuum Oil v Wiltshire (1945) 72 CLR 319
Webster v Lampard (1993) 177 CLR 598

DEPUTY REGISTRAR HEWITT: The matters for determination before me today are two applications for summary judgment, the first being against the first and second defendants and the other against the third defendant, a party who was added as a defendant during the progress of the action.
The plaintiffs' claim relates to their lease of two pieces of land being Kent locations 1658 and 1659 to the first and second defendants under written agreements to lease which were entered into between the parties on 18 May 1998. In essence the allegations of the plaintiffs against the first and second defendants relate to breaches under the agreements and a claim for possession of the land. As against the third defendant, he is alleged to be the person currently in occupation of the land and therefore insofar as the action concerns him it is for possession of the land which he occupies.
The issues raised by the summary judgment application cover a great ambit of material and was therefore appropriate, in my view, to hear argument on what I regarded as the pivotal issue and then depending on my determination of that issue hear argument of the balance of the matters necessary to finally determine the applications.
The propositions raised by the statement of claim are relatively straightforward. The plaintiff wishes to rely upon the written terms of the agreements which were entered between them and the first and second defendants. Under the terms of agreements to lease, the lease of location 1658 was to continue for a period of six months commencing on 18 June 1998 and determining on 18 December 1998. That relating to location 1659 was to commence on 1 June 1998 and thereafter continue until 28 February 2000. In regard to the second of those leases there was a proviso that the lease would be earlier determined in the event that the purchase of location 1658 should not be settled by 18 December 1998. That particular term is contained in paragraph 18 as special condition "b" and is expressed in the following way:
"Should the purchase of Kent location 1658 not be settled by the 18 December 1998, lease of location 1659 will terminate on that date. The lessee to have the right of access to harvest any crop sowed by them for the 1998/1999 season. Any crop grown by the lessee is to remain their property."
There is within each of the leases an option to purchase. Each of the leases purports to nominate "The Brown Trust" as the lessee. Additionally there is before me a document which is a contract by offer and acceptance which was entered into between the plaintiffs and a trust of which the trustee is Mark Curtis Williams (the third defendant) which is described in the terms of the contract as "The Mallee Trust". The contract relates to Kent location 1658 and the contract contains a term as follows:
"A condition of purchase of Kent location 1658 is that the purchasers are able to lease Kent location 1659 until 28 February 2000 and then first option to purchase Kent location 1659 for the sum of $680,000.00. The annual lease to be $43,825.00 payable monthly on the first working day of each month. Lease for Kent location 1658 to be $2,000.00 per month until settlement and Kent location 1659 to be $3,652.00 per month until settlement."
Elsewhere within the document the settlement date is nominated as 18 July 1998. By a separate document executed by the first and second defendants and the plaintiffs the settlement date was purportedly extended to 17 August 1998. The third defendant (ie the purchaser) did not execute that document. By notice of recision dated 17 August 1998 the third defendant purported to terminate the offer and acceptance contract.
Notwithstanding the fact that the documents have different dates there is obviously an inter relationship between the contract for sale and the agreements for lease.
At this stage I first note that the documentation in this matter is less than satisfactory in the sense that the lease agreements too relate to the first and second defendants in their capacities as trustees of the Brown Trust and the offer and acceptance contract relates to the third defendant in his capacity as the trustee of the Mallee Trust. Notwithstanding those difficulties I think tolerably clear, and the defendants allege, that there is an inter relationship between the contracts and therefore at this stage of my analysis, I think it is sensible to accept the proposition, as a working hypothesis, that both the agreements for lease and the contract for sale were entered into by the same entity.
The plaintiffs have established the existence of the agreements upon which they rely by appropriate affidavit evidence and it appears to me that the onus should shift to the defendants to demonstrate that they have some arguable defence on the merits for other reason which would justify this matter proceeding to a trial. I therefore turn to the propositions advanced by the defendants to see if the matters which they have raised are capable of constituting a defence on the merits.
In a nutshell the defendants rely upon a proposition that the contract with the third defendant for the purchase of the land was induced by misrepresentations which were made by the plaintiffs and that upon learning of those misrepresentations the third defendant rescinded the contract for the sale as he was entitled to do. They then proceeded to argue a case based upon paragraph 18(b) of the lease of Kent location 1659. The relevant words of which are "should the purchase of Kent location 1658 not be settled by 18 December 1998, lease of Kent location 1659 will terminate on that date …" The proposition which is advanced by the defendants is that since the purchase of the Kent location 1658 was not and could not be settled by 18 December 1998, due to what is alleged to be the misrepresentations made to the purchasers entitling them to rescind the contract, the plaintiffs cannot rely upon the terms in 18(b) to allege that the lease terminated on 18 December 1998, which is the lynchpin of their case against the defendants. In advancing that proposition the defendants rely upon two lines of argument. The first, and in my view the most promising is that the plaintiffs should be estopped from relying upon the provisions of paragraph 18(b) of the agreement because of their default which led to the failure of the purchase of Kent location 1658.
It is further argued by the defendants that there are terms within the agreements indicating that the farm comprising Kent location 1658 and 1659 would be run as a single entity and therefore whilst there is no provision within the agreement concerning location 1658 permitting the tenant to remain in occupation as a lessee beyond 18 December 1998 nonetheless that should be their entitlement. He also argued and in this respect I quote from the summary of argument which is before me:
"It is to be implied in the agreement for lease because 1658 and 1659 are to be farmed together that, if the contract should be rescinded due to the fault on the part of the plaintiffs, the term of the lease of 1658 should run with the term of 1659 ie to the 28 February 2000."
In essence the basis of the propositions which are advanced by the defendants are, notwithstanding the fact that various differing parties have entered the documents comprising the arrangements, they should nonetheless be regarded as a single transaction. Such a proposition is an essential if the submissions which have been advanced by the defendants are to be accepted. The difficulty I have with that proposition is as follows:
(a)There is nothing whatever in the agreement to lease Kent location 1658 to suggest that under any circumstances that lease was contemplated as enduring beyond 18 December 1998;
(b)It seems to me that if the contract for sale and lease are to be regarded as part of the single transaction then it is not possible to rescind one part of the transaction and nonetheless retain the benefit of the other. In other words it is not therefore possible for the defendants to decide to disavow one aspect of the transaction and receive the benefit of the others. If these arrangements constitute a single transaction then it appears to me that it must either stand or fall as such.
I have seen nothing in paragraph 18(b) of the lease of Kent location 1659 which suggests to me that it is in need of any implied term to give effect of the intention of the parties. The intention of the parties appears to me to be quite clear. The defendants intended to purchase lot 1658 and if they were to do so the vendors were prepared to lease to them the adjoining location 1659 for a period up to 28 February 2000 during which time the terms of the lease provided them with an option to purchase that piece of land as well. If the purchase of location 1658 did not proceed I see absolutely no basis upon which there should be any implication or estoppel which would require these plaintiffs to continue to lease lots 1658 and 1659 to the defendants beyond 18 December 1998. I do not believe it is necessary to refer to authority to establish that proposition. The words of the lease are plain. The outcome of the proposals suggested by the defendants are bizarre in the sense that were they to be adopted the defendants would be bound to remain as tenants of the relevant properties until 28 February 2000 notwithstanding the fact that the contract of purchase had been rescinded by virtue of the misrepresentations of the plaintiffs.
I understand it to be a fundamental proposition of law that it is not possible to imply a term into a contract which contradicts the express provisions of that contract. The implied terms which the defendants say should form part of these contracts are, in my opinion, in opposition to the express terms of the contracts themselves.
When I add to those basic propositions the additional complications which are created by the fact that entirely different parties entered the contract for sale and the agreements to lease, it appears to me to be tolerably clear that the propositions which are advanced by the defendants are not sound. In my view the terms of the agreements are clear. That which relates to Kent location 1659 has an unambiguous sunset clause in the event, for whatever reason, that the purchase of Kent location 1658 should not proceed and I am unable to see any reason that the terms of the agreement to lease should not be given their effect. Insofar as the claim relates to Kent location 1658 it is even more straightforward. There was never any contemplation that I am able to detect to indicate that the defendants were entitled to remain in possession of the land beyond 18 December 1998 other than as an owner.
Therefore in my view the claim insofar as it relates to Kent location 1658 is utterly unanswerable and that relating to Kent location 1659 although requiring more intensive analysis, is likewise unanswerable.
It is therefore my conclusion insofar as the plaintiffs' claim against the first and second defendants under the terms of the agreements to lease, they should have a judgment. Insofar as they claim for possession against the third defendant they should likewise have a judgment.
I shall now hear the third parties in regard to the terms of the order which should be made to give effect to this decision.