Hall v Banfield
[2024] VSC 166
•8 April 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2023 01358
BETWEEN:
| GLENDA ADELE HALL | Plaintiff |
| v | |
| LEANNE JANE BANFIELD & ANOR (according to the attached Schedule) | Defendants |
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JUDGE: | Irving AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 8 February 2024 |
DATE OF JUDGMENT: | 8 April 2024 |
CASE MAY BE CITED AS: | Hall v Banfield |
MEDIUM NEUTRAL CITATION: | [2024] VSC 166 |
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LEASE RECTIFICATION — Whether non-party to a contract has standing to seek rectification — Summary judgment — Whether defendants have prospect of success — Civil Procedure Act 2010 ss 61, 62, 63, 64 – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Rubenstein of counsel with Mr S Cromb of counsel | Merton Lawyers |
| For the Defendants | Mr B Harding of counsel | Neylon Legal |
TABLE OF CONTENTS
Introduction................................................................................................................................... 1
Summary judgment principles................................................................................................... 3
The plaintiff’s cause of action...................................................................................................... 5
The plaintiff’s evidence in support of her claim for judgment.............................................. 5
The defence and counterclaim.................................................................................................... 9
The defendants’ evidence in defence of Ms Hall’s claim and support of their counterclaim 11
Consideration.............................................................................................................................. 13
Conclusion.................................................................................................................................... 17
HIS HONOUR:
Introduction
Glenda Adele Hall (Ms Hall) has farmed a small dairy property in Willow Grove, Victoria (Property) for over 27 years. She alleges that she leased the entirety of the Property from William and Betty Horner (Mr and Mrs Horner), the Property’s aged owners. Ms Hall says she allowed Mr and Mrs Horner to live on the Property in what became known as ‘Horner House’. In addition to living at Horner House, Mr and Mrs Horner were also permitted to use the Machinery Shed.
Both Mr and Mrs Horner are now deceased. It was Mr Horner who first passed. Following his death, Mrs Horner became the sole proprietor of the Property by right of survivorship. She remained sole proprietor until her passing. Ms Wenda Jane Banfield, daughter of Mrs Horner and mother of the first defendant, is the executrix of the estate of Betty Jane Horner (deceased) and is, in that capacity, the registered proprietor of the Property. The first defendant, Ms Leanne Jane Banfield, is Ms Wenda Banfield’s daughter and the late Mrs Horner’s granddaughter. In the months preceding Mrs Horner’s death, Ms Leanne Banfield moved into Horner House. Her partner, Mr Stanely Edward Harris (Mr Harris), moved in subsequently. Mr Harris is the second defendant in this proceeding.
Ms Hall commenced this proceeding by Writ on 5 April 2023. Ms Hall did not commence the proceeding under the summary procedure provided for in Order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules). Ms Hall seeks Orders to the effect that Ms Leanne Banfield and Mr Harris give up possession of Horner House. She is seeking this on the basis that the couple are occupying it without licence, title, or any other right to occupy. Ms Hall relies on the written rental agreement made between her and Mrs Horner, signed by both on 1 May 2016 (the 2016 agreement).
On 12 April 2023, Ms Leanne Banfield and Mr Harris jointly filed a defence and counterclaim. In it, they admit to their possession of one of the two dwellings on the Property, Horner House. However, they claim that Ms Hall’s lease excluded both that House and the Machinery Shed. Accordingly, Ms Leanne Banfield and Mr Harris are seeking Orders to the effect that the 2016 agreement be rectified so as to reflect these exclusions. They are seeking these Orders by counterclaim.
Ms Wenda Banfield (in her capacity as the executor of Mrs Horner’s estate) and Ms Hall are opposing parties in a related proceeding (the related proceeding). In the related proceeding, Ms Wenda Banfield sought that the 2016 agreement be declared void. She sought that it be declared void on the basis that Ms Hall obtained the 2016 agreement unconscionably. As I said, the 2016 agreement is the one that Ms Hall relies upon in this proceeding. In the related proceeding, Ms Hall has filed a counterclaim. In that counterclaim, she seeks to enforce an option to purchase the Property – an option that was allegedly granted to her by Mrs Horner. Also in that counterclaim, Ms Hall alleges that the contract of sale entered into by Ms Leanne Banfield and Mr Harris on 4 May 2022 was entered into with notice of Ms Hall’s option to purchase. While Ms Wenda Banfield has since discontinued her claim in the related proceeding, Ms Hall’s counterclaim remains to be determined.
This judgment concerns an application by Ms Hall for summary judgment or, alternatively, an Order striking out the defendants’ defence and counterclaim. Ms Hall’s application for summary judgment is made on the basis that Ms Leanne Banfield and Mr Harris’ defence has no real prospect of success. The following reasons are given in support of that contention:
(a) first, the defendants have no standing to seek rectification of the 2016 agreement because they are not a party to it; and
(b) second, they have not provided any evidence in support of the claim that the actual, common, and subjective intention of the parties to the 2016 agreement (being Ms Hall and Mrs Horner) was to exclude Horner House and the Machinery Shed from that agreement. Further, Ms Hall’s evidence is that no such intention existed.
For the reasons that follow I have decided to strike out the crossclaim on the basis that Ms Leanne Banfield and Mr Harris do not have standing to make that claim. However, I have decided neither to strike out their defence, nor to grant Ms Hall summary judgment. In my view, the nature of the defence requires a proper testing of the evidence at trial. It is not possible, at this stage of the proceeding, to find their defence has no real prospect of success.
Summary judgment principles
Ms Hall’s summons seeks that the defence and counterclaim be dismissed, and that judgment be entered in her favour (and, consequently, for her as the defendant by counterclaim). She seeks this Order pursuant to r 23.01 of the Rules or, alternatively, pursuant to r 22.03 of the Rules and s 61 of the Civil Procedure Act 2010 (Vic) (CPA).
Rule 23.01 permits the Court to give judgment in the proceeding where the defence or counterclaim is scandalous, frivolous, or vexatious, or an abuse of the process of the Court.
To make an Order under this rule, the plaintiff must show that on the pleadings or evidence the defence or counterclaim is unsustainable in fact or in law and that no proper amendment of the pleading can raise a good defence.[1] The issue on an application for summary dismissal is whether the action should be allowed to proceed to trial. The Court will examine the evidence not for the purpose of making findings of fact where the evidence conflicts, but rather, to determine whether a triable issue is disclosed.[2]
[1]Onus v Alcoa of Aust Ltd (1981) 149 CLR 27 at 57 (Aikin J).
[2]Wickstead v Browne 30 NSWLR 1, 9 (Handley and Cripps JJA).
Section 61 of the CPA allows a plaintiff in a civil proceeding to apply to the Court for summary judgment on the ground that a defendant’s defence or part of that defence has no real prospect of success. Section 62 allows a defendant to apply for summary judgment on the same basis. Section 63 clarifies that, subject to s 64 and as the case requires, the Court may give summary judgment if satisfied that a claim, a defence, a counterclaim, or any part thereof has no real prospect of success.[3]
[3]Civil Procedure Act 2010 (Vic), s 63.
Section 64 of the CPA provides that a Court may order that a proceeding proceed to trial if the Court is satisfied that, despite there being no real prospect of success, the proceeding should not be disposed of summarily because it is either not in the interests of justice to do so, or because the dispute is of such a nature that only a full hearing on the merits is appropriate.
There was no dispute that the relevant test for summary judgment was explained by the majority of Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd.[4] In that case, Warren CJ and Nettle JA jointly stated as follows,[5]
[4](2013) 42 VR 27.
[5]Ibid, [35].
(a) the test for summary judgment under s 63 of the Civil Procedure Act is whether the respondent to the application for summary judgment has a “real” as opposed to “fanciful” chance of success;
(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel;
(c) it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
An application for summary judgment under s 61 must be made in accordance with Part 2 of Order 22 of the Rules.
The plaintiff’s cause of action
Ms Hall seeks an Order for possession of the Property. Her statement of claim pleads:
(a) on 1 May 2016 Ms Hall entered into the 2016 agreement. It was a written agreement with Mrs Horner to lease the Property for a term of 5 years commencing on 1 May 2016, with an option of a further subsequent term of 5 years;
(b) on 10 September 2020 Ms Hall exercised her option under the 2016 agreement;
(c) Mrs Horner died in June 2022 and on 17 August 2022 Ms Wenda Banfield, in her capacity as executrix of Mrs Horner’s estate, was registered as proprietor of the Property, subject to the 2016 agreement;
(d) since June 2022 Ms Leanne Banfield and Mr Harris have been in possession of Horner House without licence, title or other right to occupy that dwelling;
(e) on 1 October 2022 Ms Hall’s solicitor wrote to Ms Leanne Banfield and Mr Harris demanding possession of Horner House;
(f) Ms Leanne Banfield and Mr Harris have failed and refused to yield up possession, have continued to be trespassers on that part of the Property and have interfered with Ms Hall’s use and enjoyment of the Property; and
(g) Ms Hall has suffered loss and damage.
The plaintiff’s evidence in support of her claim for judgment
Ms Hall’s claim is supported by two affidavits of her solicitor, Nicholas McKenzie-McHarg, sworn 22 September 2023 and 6 February 2024, respectively. Mr McKenzie-McHarg’s first affidavit exhibits a copy of the 2016 agreement. That agreement sets out the ‘Subject Property’ as ‘28/30 River Connection Road, Willow Grove, 3825’. The term of the agreement is ‘Five years with option of another five years’. The agreement was signed by both Ms Hall as tenant and Mrs Horner as landlord on 1 May 2016.
In his second affidavit, Mr McKenzie-McHarg deposed to his belief that the defence and counterclaim filed by the defendants has no real prospect of success.
Ms Hall also relied on her own affidavit affirmed 2 February 2024. By that affidavit, Ms Hall deposed:
(a) she grew up down the road from the Property and her parents were friends with Mr and Mrs Horner;
(b) the children of the two families played together as children and grew up as family friends;
(c) Mr and Mrs Horner treated Ms Hall like a daughter and Ms Hall would regularly visit them and help them out on the Property;
(d) the Property consists of approximately 141 acres of farming land including a dairy, irrigation and shedding, a small three room house in which Ms Hall has lived since the early 1990s, and a house in which Mrs Horner lived (30 River Connection Road, Willow Grove);
(e) in the early 1990s, Mr and Mrs Horner invited Ms Hall to come and work on the Property as a tenant in exchange for rent;
(f) at that time the fences, sheds, dairy and other infrastructure were in a poor state of repair, and Mr and Mrs Horner were unable to carry out the repairs necessary for the Property to operate productively;
(g) as a result Mr and Mrs Horner agreed with Ms Hall that she would rent the Property from them;
(h) within a year of working on the Property Ms Hall built, with Mr and Mrs Horner’s permission, a small 3 room house as her residence and commenced living on the Property;
(i) other than on a few agreed occasions, such as times of drought, Ms Hall paid the agreed rent each month and worked and improved the Property;
(j) in the mid-1990s, Ms Hall asked to buy the Property. Mr and Mrs Horner said no, as they wanted to die on the Property. However, Mr and Mrs Horner said that they would make sure Ms Hall got the first option to buy the Property when they were gone;
(k) Mr Horner died in November 2007, after which Ms Hall continued to make further improvements to the Property with Mrs Horner’s agreement and reiteration that Ms Hall would be given first option to buy the property after Mrs Horner died;
(l) on 1 May 2016 Ms Hall signed a written rental agreement with Mrs Horner in the presence of Ms Wenda Banfield, Wenda’s brother Barry, and Ms Hall’s friend, June Pellett;
(m) the rent recorded in the 2016 agreement was $1,970 per month or $23,640 per annum, but Ms Hall also paid for town water to the Property at a cost of $30,000-40,000 per annum;
(n) Ms Hall exercised the option under the 2016 agreement in September 2020 in writing (the affidavit exhibits a copy of the letter exercising the option);
(o) Ms Hall estimates that over the 35 years she has leased the Property she has spent many hundreds of thousands of dollars on capital works and improvements;
(p) Ms Hall is seeking to enforce Mrs Horner’s promise that Ms Hall be given first option to purchase the Property in Supreme Court of Victoria Proceeding No S ECI 2021 00204;
(q) Mrs Horner’s Will explicitly references her desire that Ms Hall have the option to buy the Property if it is owned by Mrs Horner at the time of her death;
(r) Ms Wenda Banfield’s challenge to Ms Hall’s lease was discontinued on 4 March 2023;
(s) in early 2021, while Ms Wenda Banfield was managing Mrs Horner’s affairs, Ms Hall was provided with a draft proposed lease for the term 1 May 2021 to 30 April 2026;
(t) the draft proposed lease sought to remove Horner House from Ms Hall’s lease and, because she had planned to move into Horner House when Mrs Horner died, Ms Hall declined to sign it;
(u) without Ms Hall’s knowledge, on 3 May 2022 Ms Wenda Banfield, in her capacity as legal attorney for Mrs Horner, entered into a contract of sale of the Property with Ms Leanne Banfield;
(v) Mrs Horner died on 8 June 2022;
(w)at the time of Mrs Horner’s death, Ms Leanne Banfield was staying at Horner House as her carer. Mr Harris moved in soon after Mrs Horner died;
(x) Ms Hall did not seek possession of Horner House until 1 October 2022 because her arrangement with Mrs Horner was that she could live there until she died. Ms Hall also wanted to allow the family some time to grieve;
(y) Ms Hall denied it was her intention that the agreement exclude Horner House and the Machinery Shed; she denied Mrs Horner ever told Ms Hall that was Mrs Horner’s intention;
(z) rather, Ms Hall’s intention, based on her discussions with Mrs Horner, was that the Property be leased to Ms Hall, who was happy for Mrs Horner to live in Horner House until she died, after which it would go to Ms Hall under the promised first option to purchase;
(aa) on that basis Ms Hall did not object to either Ms Leanne Banfield or Mr Darryl Horner (Ms Leanne Banfield’s uncle) living in Horner House with Mrs Horner;
(bb) Mr Horner predominantly used the Machinery Shed, but Ms Hall was always free to, and often did, use the shed both before and after Mr Horner’s death; and
(cc) since Mrs Horner’s death, Ms Leanne Banfield and Mr Harris have made it difficult for Ms Hall to live and work at the Property.
The defence and counterclaim
Ms Leanne Banfield and Mr Harris’ defence admits that:
(a) subject to their claim for rectification, Ms Hall leased the Property from Mrs Horner by agreement in writing dated 1 May 2016 for a term of five years with the option of a further 5 year terms;
(b) Ms Hall has exercised her option; and
(c) Ms Leanne Banfield and Mr Harris are in possession of Horner House.
Their defence denies:
(a) Ms Hall is entitled to possession of the Horner House;
(b) Ms Leanne Banfield and Mr Harris are trespassers.
In their counterclaim, Ms Leanne Banfield and Mr Harris plead:
(a) from the early 1990s until May 2016, Ms Hall was a tenant of part of, but not all of, the Property pursuant to written or oral leases granted to her from time to time, or overholding under one or more of such leases;
(b) apart from the 2016 agreement, in each instance the relevant lease has excluded both Horner House and the Machinery Shed from the demise;
(c) at all relevant times since the early 1990s, Horner House and the Machinery Shed have been in the possession of Mrs Horner or other members of her family, including (more recently) Ms Leanne Banfield and Mr Harris;
(d) it was the common intention of the parties to the 2016 agreement that Horner House and the Machinery Shed be excluded from the demise;
(e) by reason of the parties’ common intention, that agreement should be rectified to accord with the common intention.
There are no particulars to any of these allegations. However, in relation to the alleged earlier leases, under the heading Particulars, Ms Leanne Banfield and Mr Harris state they are endeavouring to locate copies of any written leases.
In response to Ms Hall’s request for further and better particulars, Ms Leanne Banfield and Mr Harris plead that:
(a) in relation to the earlier alleged leases – they infer that Ms Hall must have had some proper basis for occupying the Property and working it as a dairy farm since the early 1990s, and that this may have taken the form of a lease or succession of leases which they assume to have been oral leases because they cannot locate any written ones;
(b) in relation to the allegation that the earlier leases excluded Horner House and the Machinery Shed – the exclusion is to be inferred or implied from the fact that, from the early 1990s until May 2016 when the 2016 agreement was entered into, Mrs Horner and/or other members of her family were in possession of Horner House and the Machinery Shed, and Ms Hall was not in possession of those buildings;
(c) in relation to the allegation of the common intention to exclude the Horner House and Machinery Shed from the demise – the intention is to be inferred or implied from the fact that at or around the time the 2016 agreement was entered into, Mrs Horner was in possession of Horner House and the Machinery Shed, and Ms Hall was not.
The defendants’ evidence in defence of Ms Hall’s claim and support of their counterclaim
In opposition to Ms Hall’s summary judgment application, Ms Leanne Banfield and Mr Harris relied on the affidavits of:
(a) Ms Wenda Banfield affirmed 15 December 2023;
(b) Ms Leanne Banfield affirmed 15 December 2023; and
(c) Mr Stanley Harris affirmed 15 December 2023.
Ms Wenda Banfield’s evidence was that:
(a) her parents carried out dairy farming on the Property from 1960 to 1980, at which time her father retired and her parents leased the Property to a series of tenants;
(b) since 1980, her family continued to live in one of the houses on the Property and had the full use of one of the nearby sheds;
(c) her parents had never wanted to move away and both had died while living on the Property;
(d) Ms Wenda Banfield did not see the 2016 agreement until 2020, when VCAT proceedings relating to her mother were underway; and
(e) Ms Wenda Banfield was not aware of any demand by Ms Hall for possession of Horner House or the Machinery Shed until the demand was sent by Ms Hall’s solicitor on 1 October 2022.
Ms Leanne Banfield’s evidence was that:
(a) Ms Leanne Banfield and Mr Harris are de facto partners who purchased the Property under a contract of sale dated 4 May 2022;
(b) Ms Leanne Banfield, Mr Harris, Sophie Gray (Ms Leanne Banfield’s daughter), and Darryl Horner all reside in Horner House;
(c) Ms Leanne Banfield moved into Horner House in or about May 2021 to look after Mrs Horner, and has lived there ever since;
(d) Mr Darryl Horner has lived in Horner House consistently since 1960. In that time, there have only been three instances where he was not residing at Horner House. The first, for a period of twelve months, during which he was studying in Melbourne. The second, for a period of some months during the COVID-19 pandemic. The third, for a period of some months in 2022, when a truck belonging to one of the plaintiff’s contractors ran into Horner House and caused significant damage;
(e) Mr Darryl Horner suffered a stroke on 6 December 2023 and has received residential treatment away from the Property. However, he intends to return once his rehabilitation is complete;
(f) after Mr Horner retired in 1980, he and Mrs Horner leased the Property to a series of tenants, but continued to live in Horner House and have full use of the Machinery Shed;
(g) from 1 October 1980, the Property was leased to Cornelius Versteden and Jennifer Margaret Versteden (the Versteden Lease);
(h) from 1 September 1983, the Property was leased to Peter Douglas Ralston (the Ralston Lease);
(i) both the Versteden Lease and the Ralston Lease specifically did not include the “house or machinery shed” in the leased property;
(j) from 1 October 1989, the Property was leased to Allan Jewkes, a former business partner of Ms Hall (the Jewkes Lease);
(k) Ms Leanne Banfield has not been able to find a copy of the Jewkes Lease or the 2016 agreement among Mrs Horner’s papers at Horner House;
(l) Ms Leanne Banfield did not become aware of the existence of the 2016 agreement until VCAT proceedings related to Mrs Horner were issued in 2020; and
(m) Ms Leanne Banfield was not aware of any demand by Ms Hall for possession of Horner House or the Machinery Shed until the demand sent by Ms Hall’s solicitor on 1 October 2022.
Mr Harris’ evidence was that he has lived at Horner House since December 2021, and that he and Ms Leanne Banfield signed a contract of sale for the Property on 4 May 2022. He and Ms Leanne Banfield have paid all the money due under the contract, but have not been registered as proprietors of the Property due to caveats lodged on the title to the Property.
Consideration
Ms Leanne Banfield and Mr Harris’ counterclaim rests on their standing to seek rectification of the 2016 agreement. It was common ground that they were not parties to the 2016 agreement.
The weight of authority suggests that a non-party to a contract does not have standing to seek rectification.[6] In RHG Mortgage Securities Pty Ltd v Elektra Purchase No 19 Ltd[7], Einstein J held that an assignee of the relevant agreement had ‘an interest in seeking rectification…appropriate to be recognised’ as the right to rectification of the agreement was a chose in action capable of assignment. Neither Ms Leanne Banfield nor Mr Harris are currently the registered proprietors of the Property. Ms Wenda Banfield, in her capacity as the executor of Mrs Horner’s estate, is the current registered proprietor of the Property. Ms Leanne Banfield and Mr Harris did not contend that they were the assignees of Mrs Horner’s interests in the lease.
[6]See eg, Brunker v Perpetual Trustee Co (Ltd) (1937) 59 CLR 140, 148 (Rich J, Evatt and McTiernan JJ agreeing); Ayling v Hardman (1985) 58 ALR 763, 767 (Mason, Wilson, Deane and Dawson JJ); Cachia v St George Building Society Ltd NSWSC 3 October 1990, unreported (Cole J); and HDI-Global SE v Zurich Australian Insurance Limited [2020] NSWSC 1384, [11] (Ball J).
[7][2009] NSWSC 258, [115]-[119].
In response to the Court’s question as to whether Ms Hall was aware of any case in which a non-party to an agreement was found to have standing to seek rectification, Ms Hall’s counsel referred the Court to the case of Sekisui Rib Loc Australia Pty Ltd v Rocla Pty Ltd.[8]In that case, the Full Court of the Supreme Court of South Australia considered a business sale agreement (BSA) between Rocla, Sekisui Rib Loc Australia Pty Ltd (SRLA), Plastream, and Caliber, to which other contracts between several of those parties were annexed as schedules. One of those contracts was a sub-licence granted by Plastream to Rocla (the Rocla sub-licence). One issue was whether SRLA had standing to seek a declaration in respect of a variation to the Rocla sub-licence, and to seek orders for its rectification. In circumstances where the Court was satisfied either that the BSA required a variation to the Rocla sub-licence to be agreed by the parties to the BSA in writing, or that a term should be implied into the BSA requiring the consent of all parties to the BSA to a variation to the Rocla sub-licence, there was ‘no bar to SRLA having sufficient standing to make the arguments … with respect to the orders for rectification … sought’, and indeed, SRLA obtained the orders for rectification that it sought.[9] In my view, the factual circumstances of that case are readily distinguishable from that of the present case, such that it does not assist Ms Leanne Banfield and Mr Harris.
[8](2012) 291 ALR 140.
[9]Ibid, [47]-[52], [66], [133]-[134].
Counsel for the defendants sought to rely on Downie v Lockwood[10] as authority for the proposition that a purchaser of land has standing to seek rectification of a lease entered into by the previous landowner. I respectfully disagree that Downie v Lockwood is authority for that proposition.
[10][1965] VR 257.
In Downie v Lockwood it was the (plaintiff) tenant, and not the successor in title to the land (the defendant), who sought rectification of the lease. There was an argument as to whether rectification should be ordered when the executrix of the estate of the deceased lessor was not a party to the proceeding. The hearing proceeded on the successor in title’s agreement not to object to the addition of any parties necessary for the obtaining of an Order for rectification, and to also not object to an amendment to the claim for relief to limit it to relief claimable as between the tenant and the successor in title in the absence of the executrix.[11] Smith J identified an issue in the proceeding to be whether the tenant’s right to rectification could be enforced against the successor in title. It was in this context that Smith J had regard to s 42 of the Transfer of Land Act 1958 (Vic) (TLA), and, in particular, whether the tenant’s right to rectification was an interest within the meaning of ‘the interest…of a tenant in possession of the land’ in s 42(2)(e). If the tenant’s right to rectification was such an interest, then, according to s 42 of the TLA, the estate of the registered successor in title would be subject to the interests conferred on the tenant by the rectified lease. Smith J ultimately found that, by virtue of s 42(2)(e), the defendant did hold the land subject to the rectified lease.[12]
[11][1965] VR 257 at 258.
[12]Ibid 261.
In this case Ms Leanne Banfield and Mr Harris have not relied on any tenancy agreement as the basis of their occupation of Horner House. In my view their position is not analogous to the applicant for rectification in Downie v Lockwood.
In my view, Ms Leanne Banfield and Mr Harris do not have standing to seek rectification of the 2016 agreement. There is no amendment to their counterclaim which could cure this defect. Accordingly, it is appropriate that the counterclaim be dismissed summarily.
The next issue is whether Ms Leanne Banfield and Mr Harris’ defence has any real prospect of success. Neither the defence nor the evidence filed in the proceeding sets out the basis upon which the defendants claim a right to occupy Horner House. While it was evident that they have entered into a contract of sale of the Property and have paid the purchase price, I did not understand that to be the legal basis upon which they asserted their right to occupy part of the Property. Rather, I comprehend their defence to Ms Hall’s application for orders for possession to be that the 2016 agreement excludes Horner House and the Machinery Shed.
It was common ground that the terms of the 2016 agreement do not exclude Horner House and the Machinery Shed. Ms Leanne Banfield and Mr Harris’ defence denies that Ms Hall is entitled to possession of Horner House. At its highest, Ms Leanne and Ms Wenda Banfield’s evidence is that it is to be inferred that the 2016 agreement must have excluded Horner House and the Machinery Shed because:
(a) Mr and Mrs Horner continued to occupy Horner House and the Machinery Shed while Ms Hall leased the property; and
(b) previous leases in the 1980s between Mr and Mrs Horner and other tenants explicitly excluded Horner House and the Machinery Shed.
In Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8),[13] Beach J considered the principles governing the drawing of inferences:[14]
A finding may be made in the absence of direct evidence. All that is necessary is to demonstrate the more probable inference from the circumstances. “More probable” means no more that that upon a balance of probabilities, such an inference might reasonably be considered to have some greater degree of likelihood. A party who relies on circumstantial evidence to prove a fact must show that the circumstances raise the more probable inference in favour of what is alleged.
It is not sufficient that the circumstances give rise to conflicting inferences of an equal degree of probability or plausibility or that the choice between them can only be made by conjecture. I accept though that the process of inference may involve an intuitive element that is not susceptible to detailed support or explanation.
There is a distinction between inference and conjecture even if the reasoning process occurs on a continuum in which there is no bright line division. A conjecture, even though plausible, is no more than a guess, whereas an inference is a deduction from the evidence. If the deduction is reasonable, the inference may give rise to legal proof. But there must be objective facts from which the inference could be drawn, otherwise what is left is mere speculation or conjecture (Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169 and 170 per Lord Wright).
Generally, the proper inference to be drawn on the balance of probabilities depends on a practical and reasonable assessment of the evidence as a whole.
[13][2022] FCA 1404.
[14]Ibid [296]-[299].
On a summary judgment application the Court does not have the benefit of all of the evidence. Nor is the Court’s task to make findings of fact. I do not accept the submission made by counsel for Ms Hall that Ms Leanne Banfield and Mr Harris have not provided any evidence to support their case. They rely on Mr and Mrs Horner’s occupation of Horner House both before and during the terms of Ms Hall’s lease and the terms of the previous leases. Ms Hall’s counsel’s submission effectively asks the Court to assess the likelihood that a Court may find on the basis of all the evidence an inference that Horner House was excluded from the 2016 agreement. Not all of the evidence relevant to the inference contended for by Ms Leanne Banfield and Mr Harris is currently before the Court. The evidence that is before the Court has not been tested. In these circumstances it is not possible to find that Ms Leanne Banfield and Mr Harris’ defence has no real prospect of success.
If I am wrong, that is, if it is indeed the case that Ms Leanne Banfield and Mr Harris’ defence does not have any real prospect of success, then I would, nonetheless, allow the case to proceed to trial. The reason being that it appears to me that the nature of the case is such that a full trial of the merits is appropriate.
Conclusion
I have found that Ms Leanne Banfield and Mr Harris do not have standing to seek rectification of the 2016 agreement. Accordingly, their crossclaim will be dismissed.
I have also decided to dismiss Ms Hall’s application for summary judgment, as I cannot be satisfied that Ms Leanne Banfield and Mr Harris’ defence has no real prospect of success. In reaching this conclusion, I have had regard to the fact that Ms Leanne Banfield and Mr Harris seek to rely on inferences from the evidence, not all of which is currently before the Court. In my view, the nature of the dispute between the parties is such that only a full hearing on the merits is appropriate.
I request that the parties confer on the question of the costs of Ms Hall’s summons. If the parties are unable to reach agreement on the issue of costs within seven days of the date of this judgment, then the matter will be listed for oral submissions on costs.
SCHEDULE OF PARTIES
| S ECI 2023 01358 | |
| BETWEEN: | |
| GLENDA ADELE HALL | Plaintiff/Defendant by counterclaim |
| - v - | |
| LEANNE JANE BANFIELD | First Defendant/First Plaintiff by Counterclaim |
| STANLEY EDWARD HARRIS | Second Defendant/Second Plaintiff by Counterclaim |
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8
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