H & a Frigger v Om Trading Company Pty Ltd - [2013] WASC 454

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: H & A FRIGGER -v- OM TRADING COMPANY PTY LTD [2013] WASC 454

CORAM: MASTER SANDERSON

HEARD: 7 NOVEMBER 2013

DELIVERED : 16 DECEMBER 2013

PUBLISHED : 16 DECEMBER 2013

FILE NO/S: CIV 2307 of 2013

BETWEEN: H & A FRIGGER (ABN 13 397 257 763)
Plaintiffs
AND
OM TRADING COMPANY PTY LTD (ACN 164 901 393)
Defendant

Catchwords:

Practice and procedure - Action commenced by origination summons - Whether action should proceed as if commenced by writ - Turns on own facts

Legislation:

Nil

Result:

Application adjourned to allow plaintiffs to consider their position

Category: B

Representation:

Counsel:

Plaintiffs: In person (Mrs A Frigger)
Defendant: Mr B D Campbell

Solicitors:

Plaintiffs: In person
Defendant: Mony de Kerloy

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

Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221

MASTER SANDERSON: These reasons essentially deal with the plaintiffs' application to have these proceedings which were commenced by originating summons proceed as if commenced by writ. It is the defendant's position the proceedings ought be dismissed. There is also an argument between the parties as to who should pay the costs on a chamber summons issued on 23 August 2013. Determination of these questions requires some consideration of the background facts.
On 23 August 2013 the plaintiffs instituted this action by way of originating summons. They sought the following orders:
(a)A Declaration that the Contract of Sale of Business for the BP service station at 269 South Western Highway, Armadale ('the Contract') executed by the Defendant on 25 July 2013 and accepted by the Plaintiff on 27 July 2013 is a valid binding and enforceable contract.
(b)An order that the Defendant forthwith pay the deposit of $10,000 to the Plaintiff's settlement agent's trust account.
(c)An order pursuant to clause 26.3 of the contract the Defendant must take all action necessary to effect, perfect and complete the transaction contemplated by the Contract.
The plaintiffs also filed a chamber summons seeking the following orders:
(a)the time of [sic] service of the application be abridged to the date of the hearing thereof;
(b)the Defendant forthwith pays the deposit of $10,000 due under the Sale Contract to the Plaintiff's settlement agent's trust account;
(c)pursuant to clause 26.3 of the sale contract the Defendant must take all action necessary or desirable to effect, perfect and/or complete the transaction contemplated by the Sale Contract.
The chamber summons was accompanied by an affidavit of Angela Cecilia Theresa Frigger sworn 20 August 2013. On 2 September 2013 the plaintiffs filed a certificate of urgency, a memorandum of conferral and a certificate of readiness. On 3 September 2013 the defendant entered an appearance by its solicitors.
The defendant says the plaintiffs' chamber summons 'amounted to' an application for summary judgment. Of course it could not actually be a summary judgment application because no statement of claim had been filed as is required by O 14 r 1(1) of the Rules of the Supreme Court 1971 (WA). The plaintiffs says their summons was an application for an early hearing of the originating summons. However the chamber summons is viewed, the application was wildly optimistic and ought not to have been brought. I accept submissions made on behalf of the defendant to this effect.
The chamber summons came on for hearing in Master's Chambers on 5 September 2013. The defendant's solicitors say, and I accept, they were prepared to overlook the failure to serve the chamber summons, the failure to confer and the contractual obligation to mediate before issuing proceedings so that discussions could take place between the defendant's solicitors and the plaintiffs. On that basis the matter was adjourned by consent for two weeks. At the resumed hearing on 26 September 2013 counsel for the defendant pointed out the commencement of proceedings by way of originating summons was inappropriate. They invited me to transform the matter into one as if commenced by writ. This option had previously been offered to the plaintiffs in correspondence. During the course of the hearing I pointed out to Mrs Frigger the danger of proceeding by way of originating summons. Mrs Frigger declined the opportunity to alter the nature of the originating process; she said she was satisfied the matter could proceed by way of originating summons. Accordingly the defendant was ordered to file its affidavit and submissions by 17 October 2013 with the plaintiffs to file any responsive affidavit and submissions by 24 October 2013. The intention was the matters raised in the chamber summons would be heard and determined at a special appointment.
On 27 September 2013 the plaintiffs sent the defendant a notice requiring it to pay $10,000 deposit into the plaintiffs' settlement agent's account before 4.00 pm Wednesday 2 October 2013. Failure to do so, according to the plaintiffs, would result in termination of the contract. The letter went on to state that if the contract was terminated the plaintiffs would obtain summary judgment for breach of contract and damages, obtain a winding up order against the company and make a claim against the directors of the defendant for insolvent trading pursuant to s 588M of the Corporations Act 2001 (Cth).
On 15 October 2013 the plaintiffs sent an email to the solicitors for the defendant which purported to terminate the contract. They also said they now wished to have the action proceed as if commenced by writ. They proposed a timetable for the filing of a statement of claim and defence. On 17 October 2013 the plaintiffs served a minute of directions together with an affidavit of Mrs Frigger sworn 17 October 2013 and an amended originating summons. The plaintiffs indicated they no longer sought enforcement of the contract. Rather they said the contract had been terminated and they sought damages as a consequence. The defendant's solicitors had the matter relisted in chambers on 7 November 2013. It was the position of the defendant the originating summons ought be dismissed. Essentially it was said the cause of action originally relied upon had been abandoned. Assuming as the plaintiffs alleged there had been a repudiation of the contract by the defendant which had been accepted by the plaintiffs that cause of action arose after the issue of the originating summons. The originating summons could not be saved by amendment. On that basis it was submitted that the plaintiffs, if they wished to pursue their present case, would have to issue fresh proceedings.
To their credit the defendant's solicitors did point out it may not now be open to the plaintiffs to claim there has been a repudiation of the contract and an acceptance of that repudiation. Once a party has made an election in relation to a breach they surrender the right to make any further election in relation to that breach. An election to continue performance is a final election against termination and will operate as a permanent restriction on the right to terminate in relation to that breach: see Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221.
It would seem what the plaintiffs have attempted to do is set up some form of fresh breach of contract by issuing the notice of 27 September 2013. If I understand the plaintiffs' position correctly it is failure to comply with this notice which gives rise to the right to terminate. That stands apart from the earlier alleged breach by the defendant when the plaintiffs elected to affirm the contract. Thus the plaintiffs say they are entitled to take action in relation to this repudiation of the contract by the defendant.
This application is not the time to determine whether the plaintiffs' argument will succeed. Furthermore, if the defendant is correct, and it was not possible for the plaintiffs to effectively change their mind then the plaintiffs could still seek to enforce the contract in the terms of their originating summons. What the plaintiffs cannot do is have this matter proceed as if commenced by writ and rely upon events which occurred after the issue of proceedings to ground their action. So the plaintiffs have to make a choice. Do they continue with these proceedings transmogrified to proceedings as if commenced by writ and seek to enforce the original contract. Or do they abandon these proceedings and issue fresh proceedings claiming the contract is at an end. What they cannot do is maintain these proceedings and argue the contract has been terminated as a consequence of the notice of 27 September 2013.
Having read the submissions put on behalf of the plaintiffs I am not sure they fully appreciate the decision which has to be made. Accordingly I will afford them 28 days from the publication of these reasons to make a decision. If they do not file a notice of discontinuance of these present proceedings then there will be an order that the matter proceed as if commenced by writ and the plaintiffs should file a statement of claim. The defendant will have 14 days thereafter to file a defence or to bring an application to strike out the statement of claim.
The remaining question is as to costs.
As I have indicated the chamber summons issued by the plaintiffs was ill considered. They should pay the defendant's costs in relation to that chamber summons and all reserved costs. Those costs will include the defendant's costs in preparing submissions for the hearing of the chamber summons. The plaintiffs ought also pay the costs of the hearing on 7 November 2013. The points made on behalf of the defendant were valid and they have carried the day. Costs should follow the event. All of these costs should be taxed and paid forthwith.