Johnson v Hallam - [2015] WASC 149

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: JOHNSON -v- HALLAM [2015] WASC 149

CORAM: ACTING MASTER GETHING

HEARD: 21 APRIL 2015

DELIVERED : 30 APRIL 2015

FILE NO/S: CIV 2030 of 2014

BETWEEN: FRANK PETER JOHNSON
Plaintiff
AND
PETER ROBERT HALLAM
Defendant

Catchwords:

Summary judgment - Application by defendant - Disposal of interest in land not in writing - Part performance

Legislation:

Property Law Act 1969 (WA), s 34, s 36
Rules of the Supreme Court 1971 (WA), O 16

Result:

Claim dismissed with costs

Category: B

Representation:

Counsel:

Plaintiff: Mr A R W Bower
Defendant: Mr T M Retallack

Solicitors:

Plaintiff: Corser & Corser
Defendant: Culshaw Miller

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

Adamson v Hayes [1973] HCA 6; (1973) 130 CLR 276
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209
Anderson v Effexseven (1998) 10 ANZ Ins Cas 61‑424
Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184
Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Bank of Western Australia v Stein [2005] WASC 43
Barrick Gold of Australia Ltd v F L Smidth Inc [2007] WASC 186
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256
Eng Mee Yong v Letchumanan [1980] AC 331
Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87
Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994)
Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458
GEL Custodians Pty Ltd v Dewar [2014] WASC 177
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 25; (1964) 112 CLR 125
Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 920512, 12 October 1992)
Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23
Lois Nominees Pty Ltd v QBE Insurance (Australia) Ltd [2011] WASC 208
Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353
McBride v Sandland [1918] HCA 32; (1918) 25 CLR 69
Redden v Wilks [1979] WAR 161
RHG Mortgage Corporation Ltd v Schafer [2014] WASC 297
Secola v McCann [No 2] [2011] WASC 342
Shepherd v Baster [2005] WASC 23
SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138
Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118
Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598
WMC Resources Ltd v Roche Mining Pty Ltd [2004] WASC 76

ACTING MASTER GETHING: Peter Robert Hallam and Deborah Anne Tschirpig (Owners) are the registered proprietors of a property on Highbridge Way in Karrinyup (Property). In March 2013, the Owners leased the Property to Frank Peter Johnson and Jane Eva Johnson (Tenants). The term of the lease was 12 months, expiring 28 February 2014. Since August 2013 the Tenants have not paid any rent, and have thereby been in default of the lease. They are still in possession of the Property, and the Owners allege that they owe over $70,000 in outstanding rent.
Mr Johnson says that in November 2013 he and Mr Hallam reached an agreement to the effect that the Owners agreed to forgive the Tenants' obligation to pay arrears of rent provided Mr Johnson submitted to Mr Hallam an offer in writing to purchase the Property for $1 million. Mr Johnson says that he did submit such an offer, but that Mr Hallam refused to complete the transaction, breaching the agreement. He says that the breach of the agreement caused him to miss an opportunity to exploit certain intellectual property rights, for which he claims substantial damages. Mr Johnson has commenced proceedings in the Supreme Court to pursue this claim.
Mr Hallam says that there was no such agreement, and has filed a defence in these terms as well as a counterclaim for arrears of rent and possession of the Property.
By application filed 23 January 2015, Mr Hallam seeks summary judgment on the claim (pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 16 r 1) and on the counterclaim (pursuant to RSC O 14 r 6). As the application was commenced more than 21 days after the date on which the appearance was filed, Mr Hallam has sought leave to bring the application. Mr Hallam filed an affidavit dated 21 January 2015 in support of his application. Mr Johnson filed an affidavit dated 13 March 2015 in opposition to the application.
At the hearing before me on 21 April 2015 it was agreed across the bar table that Mr Hallam's application for summary judgment on the counterclaim should be deferred until the finalisation of the application for summary judgment on the claim. This is because neither Ms Tschirpig (the co‑owner of the Property) or Mrs Johnson (who is a party to the lease) are parties to the proceedings. Counsel for Mr Hallam stated that his instructions were to join these parties so that relief could then be sought against both Mr and Mrs Johnson. I propose to make an order deferring the application for summary judgment on the counterclaim.
By RSC O 16 r 1(1), the court may enter judgment for a defendant 'if satisfied that the action is frivolous or vexatious [or] that the defendant has a good defence on the merits'. The application is to be supported by affidavit verifying the facts upon which the application is based.[1] The onus is on Mr Hallam as the applicant to persuade the court that this is a case in which it is appropriate to award summary judgment pursuant to O 16 r 1.[2]
[1] RSC O 16 r 1(2).
[2] Lois Nominees Pty Ltd v QBE Insurance (Australia) Ltd [2011] WASC 208 [34] (Beech J); WMC Resources Ltd v Roche Mining Pty Ltd [2004] WASC 76 [35] (Newnes M); Anderson v Effexseven (1998) 10 ANZ Ins Cas 61‑424, 74,757 (Parker J, with whom Owen J agreed).
Five issues arise for determination:
•Should Mr Hallam be granted leave to bring the application?
•Did the parties enter into a concluded agreement for the sale of the Property?
•If so, did the agreement comply with the requirement for it to be in writing pursuant to Property Law Act 1969 (WA) (PLA) s 34?
•If it did not, can Mr Johnson enforce the agreement based on the doctrine of part performance?
•What final orders are appropriate?

Should Mr Hallam be granted leave to bring the application?

An application by a defendant for summary judgment must be brought within 21 days after an appearance has been filed, or at any later time by leave of the Court.[3] Mr Hallam's appearance was filed on 15 August 2014. The application was brought on 23 January 2015, hence leave is required and has been sought.
[3] RSC O 16 r 1(1).
The policy rationale for the time limit is to ensure that summary judgment applications are brought at an early stage of proceedings before unnecessary expense has been incurred.[4] The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties, and may be exercised in favour of an applicant where strict compliance with the rules will work an injustice upon the applicant.[5] In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant and refusal of the application for the extension of time.[6]
[4] GEL Custodians Pty Ltd v Dewar [2014] WASC 177 [17] (Gething AM); Barrick Gold of Australia Ltd v F L Smidth Inc [2007] WASC 186 [10] (Templeman J); Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 920512, 12 October 1992) (Adams M).
[5] Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458, 459 (McHugh J); Bank of Western Australia v Stein [2005] WASC 43 [53] (Commissioner Siopis SC); GEL Custodians [17].
[6] Gallo (459); Bank of Western Australia [53].
Mr Hallam filed an affidavit of Christian Hofferberth, a solicitor employed by his lawyers, dated 16 April 2015 dealing with the issue of delay. Mr Hofferberth's evidence is that:[7]
(a)between August and November 2014 there were negotiations between the parties in relation to possible settlement of the dispute, and as such Mr Johnson did not file his statement of claim until 2 December 2014;
(b)on or about 11 December 2014 Mr Hallam's lawyers commenced conferral with Mr Johnson's lawyers regarding the proposed application for summary judgment;
(c)the office of Mr Hallam's lawyers was closed for the Christmas break between 23 December 2014 and 6 January 2015;
(d)there was some delays in sending Mr Hallam's draft affidavit to him at his residence in Queensland and the return of that affidavit; and
(e)there was some delay due to oversight with Mr Hofferberth being on leave during this period.
[7] Hofferberth Affidavit [3] ‑ [14].
Prior to the filing of the application, Mr Johnson had filed his statement of claim (16 December 2014) and Mr Hallam had filed his defence and counterclaim (19 December 2015).
In my view, delays in bringing a summary judgment application whilst parties are negotiating to resolve the action should not weigh heavily against the grant of leave to bring the application in the event of the failure of those negotiations. A contrary view may lead to applications for summary judgment being commenced unnecessarily, merely to hold this option open as of right. In the present case, the delays between when it became apparent that the action would not settle and when the application was commenced have been satisfactorily explained.
Mr Johnson has not put before the court any evidence of particular prejudice he has suffered, or will suffer, as a result of the delays in bringing the application.
Mr Hallam should have leave to bring the application for summary judgment in relation to Mr Johnson's claim.

Did the parties enter into a concluded agreement for the sale of the Property?

An application for summary judgment is to be determined on the basis that the version of the facts put forward by the respondent to the application, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action.[8] The court is not bound to accept uncritically as raising a dispute of fact calling for further investigation every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents or other statements by the deponent.[9] If after argument there remains real uncertainty as to the applicant's right to judgment without further investigation of the facts, summary judgment must be refused.[10]
[8] Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 608 (Mason CJ, Deane & Dawson JJ); RHG Mortgage Corporation Ltd v Schafer [2014] WASC 297 [28] (Chaney J).
[9] Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184 [28] (Newnes M); Eng Mee Yong v Letchumanan[1980] AC 331, 341 (Reasons of the Court).
[10] Ansearch [28]; Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332, 335 (Herring CJ, Lowe & Fullagar JJ).
Mr Johnson's case is that his agreement with Mr Hallam was made in a telephone conversation between the two of them during October 2013. The alleged agreement is set out at pars 4 and 6 of the amended statement of claim (Pleaded Agreement):
4.In or about November 2013 the plaintiff entered into an agreement with the defendant (the defendant acting on his own behalf and on behalf of the other proprietor of the Property), the express terms of which were that
a.The defendant agreed to forgive the plaintiff's obligation to pay arrears of rent provided that the plaintiff submitted to the defendant an offer in writing to purchase the property for $1,000,000;
b.If the plaintiff provided to the defendant the offer to purchase pleaded in paragraph 4(a) herein then the defendant would accept the offer, whereby in consideration of the plaintiff causing a nominated purchaser to pay $1,000,000 to purchase the Property from its registered proprietors the defendant would be bound to
i.cause the registered proprietors of the Property to transfer freehold title in the Property to the plaintiff's nominated purchaser in accordance with the terms of the Contract and
ii.permit the plaintiff and his family to occupy the Property from the date of the contract until the settlement of its sale to the plaintiff's nominee, and
c.In further consideration of the plaintiff's entry into the agreement pleaded in this paragraph 4 the plaintiff and his family could continue to occupy the Property as their family home without obligation to pay rent of any sum until the settlement of the plaintiff's or his nominee's purchase of the Property (The Contract.)
...
6.Pursuant to the terms of the Contract,
a.the settlement of the transfer of the Property under the Contract was due to occur within 90 days from the date of the defendant and the other registered proprietor signing the offer and acceptance document to confirm their acceptance of the offer, and
b.after the date of the Contract the plaintiff and his family continued to occupy the Property as their family home without payment of rent.
His evidence of this conversation is as follows (October 2013 Conversation):[11]
[11] Johnson Affidavit [35] ‑ [42].
35.During October 2013, on a date I do not now recall, I phoned Mr Hallam and had a discussion with him about the Property.
36.In that phone conversation I said to Mr Hallam words to the effect of, 'Peter, will you let me postpone payment of rent for a while so I can use my money to go to Chicago to launch OptionScape in the US?'
37.In reply Mr Hallam said words to the effect of, 'Frank, you always wanted to buy the place. If you don't want to pay rent, why don't you buy it for a million bucks and we will call it quits?'
38.I said to Mr Hallam words to the effect of, 'OK. Let me check if the rent arrears and the value of the Property add up to one million.'
39.I also said to Mr Hallam words to the effect of, 'I will need to be in Chicago for at least two months. I will then come home and I will be able to access finance to buy the house.'
40.Mr Hallam then said to me words to the effect of, 'OK, don't pay the rent. When you come back from Chicago, send me an offer as a private sale. We don't need to involve the agent.'
41.In reply, I said to Mr Hallam words to the effect of, 'Thanks very much, Peter. I shall do.'
42.Mr Hallam replied by saying words to the effect of, 'OK. Give me the written offer as soon as possible.'
I do not view this evidence as being inherently incredible, and so proceed to determine the application for summary judgment on the basis that the version of the facts put forward by Mr Johnson would ultimately be accepted at the trial of the action. I do note, however, that Mr Hallam's evidence is that he denies reaching the Pleaded Agreement or any agreement at all.[12]
[12] Hallam Affidavit [4], [27].
Counsel for Mr Johnson submitted that this constituted a 'Masters v Cameron class 1 agreement', being one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect.[13]
[13] Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353, 360 (Dixon CJ, McTiernan & Kitto JJ).
Counsel for Mr Hallam submitted that the October 2013 Conversation did not give rise to a concluded contract.
The principles governing whether parties who have been in negotiation have made a concluded contract are conveniently summarised by Le Miere J in Secola v McCann, which I respectfully agree with and adopt:[14]
[14] Secola v McCann [No 2] [2011] WASC 342[13] ‑ [24].
The first issue in determining whether a final, binding agreement was made is whether the parties intended to make a concluded agreement. That intention is ascertained objectively by reference to what a reasonable observer would have concluded.
In Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 the joint judgment of a plurality of the High Court held that there must be a complete and certain agreement and there will be no legally binding contract unless the parties intend to enter into legal relations. Gaudron, McHugh, Hayne and Callinan JJ said:
'It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty. To be a legally enforceable duty there must, of course, be identifiable parties to the arrangement, the terms of the arrangement must be certain, and, unless recorded as a deed, there must generally be real consideration for the agreement. Yet "[t]he circumstances may show that [the parties] did not intend or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts" [24].'
The search for the 'intention to create contractual relations' requires an objective assessment of the state of affairs between the parties as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour. The word 'intentions' describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties: Ermogenous [25].
The issue of whether a final, binding agreement was made involves the overlapping requirement of certainty as well as the requirement of intention to create legal relations. If a contract is legally uncertain, this might indicate that the parties did not intend to create legal relations. Furthermore, there can be no binding and enforceable contract unless the terms of the agreement, or at least its essential and critical terms, have been agreed upon: Thorby v Goldberg (1964) 112 CLR 597, 607 (Menzies J). An agreement to agree does not create a contract because it is incomplete and lacking essential terms: United Group Rail Services Ltd v Rail Corporation New South Wales [2009] NSWCA 177 [56] (Allsop P).
For there to be a valid and enforceable contract, the court must be able to attribute to it a sufficiently precise and clear meaning and to identify the scope of the rights and obligations to which the parties have agreed. In the ordinary case, as a matter of fact and commonsense, other things being equal, the more numerous and significant areas in respect of which the parties have failed to reached agreement, the slower a court will be to conclude that they had the requisite contractual intention: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 547 - 548 (Gleeson CJ).
Where the intention of the parties is equivocal, conduct subsequent to the making of the alleged agreement is admissible in evidence to show whether or not a contract was concluded: Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd; RJ Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2010] WASCA 128 [65].
The court may also look to such factors as whether an informal agreement that is alleged to constitute the contract would accord with the expectations of the parties in a contract of the kind that is in dispute: Sinclair Scott & Co Ltd v Naughton (1929) 43 CLR 310, 316 - 317 (Knox CJ, Rich & Dixon JJ); Toyota Motor Corp Australia Ltd v Ken Morgan Motors Pty Ltd (1994) 2 VR 106, 131 (Brooking J); Foxtel Management Pty Ltd v Seven Cable Television Pty Ltd (2000) 175 ALR 433 [143] (Full Federal Court). In relation to alleged agreements in relation to interests in the land the court may have regard to the fact that such agreements are generally made in writing.
In Masters v Cameron (1954) 91 CLR 353, 360 Dixon CJ, McTiernan and Kitto JJ said that when parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any one of three classes:
(1)it may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect;
(2)the parties may have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document; or
(3)the parties do not intend to make a concluded bargain at all, unless and until they execute a formal contract.
A fourth category, by way of variation of category (1), has been added:
(4)where the parties intend to be bound immediately by the terms which they have agreed upon, whilst expecting to make a further contract in substitution for the first contract containing, by consent, additional terms: Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622, 628 (McLelland J).
In the first, second and fourth cases there is a binding contract. Cases in the third category are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own. The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed: Masters v Cameron (361). In Masters v Cameron the court referred to Rossiter v Miller (1873) 3 App Cas 1124 where Lord Blackburn said:
'[P]arties often do enter into a negotiation meaning that, when they have (or think they have) come to one mind, the result shall be put into formal shape, and then (if on seeing the result in that shape they find they are agreed) signed and made binding; but that each party is to reserve to himself the right to retire from the contract, if, on looking at the formal contract, he finds that though it may represent what he said, it does not represent what he meant to say. Whenever, on the true construction of the evidence, this appears to be the intention, I think the parties ought not to be held bound till they have executed the formal agreement (362).'
In Masters v Cameron, the court pointed out that whether there is a concluded agreement depends upon the intention disclosed by the language the parties have employed, and no special form of words is essential to be used in order that there shall be no contract binding upon the parties before the execution of their agreement in its ultimate shape (362). In that case the court was considering the case where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract. Nevertheless, their Honours' observations are relevant to cases where, following negotiations, there is doubt about whether a legally binding agreement has been made.
In determining whether communications between parties amount in law to a binding agreement, care must be taken in determining the weight given to the use by the parties of words such as 'agree'. Gleeson CJ in Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd (1995) 7 BPR 14,551, observed:
'In a case such as the present, there are two, sometimes related, questions which require to be considered. The first is whether the parties to the putative contract intended to make a concluded agreement.
The second is whether they succeeded in doing so …
As the decision in [Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540] illustrates, the fact that parties to negotiations have agreed upon the major matter under discussion, confidently believing that the remaining matters to be decided will be sorted out later between them or their lawyers, without any difficulty, can sometimes create a misleading appearance of consensus. Such parties may well believe that they have a "deal" or a "bargain", and speak and act accordingly, whilst at the same time knowing and intending that further and more detailed agreement is necessary. For that reason, conduct such as shaking hands, or using the language of agreement, can be ambiguous. The resolution of the ambiguity may require more detailed factual and legal analysis (14,552).'
The court, in determining whether a concluded contract has been reached, is not confined to a consideration of the terms or manner in which the communications are made, but may also consider the subject matter and the surrounding circumstances: Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251, 9255.

I am of the view that the October 2013 Conversation described by Mr Johnson did not give rise to a concluded contract. This is for four reasons.
First, the October 2013 Conversation does not correspond with the Pleaded Agreement. Specifically, there was nothing stated in the October 2013 Conversation about the settlement date. The settlement date in this case has more significance than normal as the alleged agreement was that the Tenants could occupy the Property without payment of rent until settlement.
In general terms Mr Johnson is bound by his pleaded case. In Forsayth NL v Northern Gold NL Franklyn J stated: [15]
It is for the plaintiff to determine what is his cause of action. The defendant then knows what is the case he has to meet. It is not for the Court, on an O 16 application, to identify or accept some other cause of action, not pleaded, which the evidence before it might arguably support and which, possibly for good reason, was not relied on by the plaintiff in his Statement of Claim and to then allow the Statement of Claim to remain on foot in reliance on a possible subsequent amendment.
[15] Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994) 7 (Franklyn J, with whom Wallwork J agreed); Anderson (74,757).
However, given the consequences of a summary judgment application, it is appropriate that Mr Johnson be given some latitude in relation to the facts said to give rise to the pleaded cause of action. It is thus appropriate that I consider the balance of the evidence in relation to the October 2013 Conversation.
The second reason is that, if there was an offer by Mr Hallam for Mr Johnson to purchase the property for $1 million with any outstanding rent to be forgiven, it was not accepted. Mr Johnson expressly gave himself the opportunity to check the valuation of the Property: 'OK. Let me check if the rent arrears and the value of the Property add up to one million'.[16]
[16] Johnson Affidavit [38].
Third, there was no agreement as to the date for payment or terms of settlement, meaning that an essential term was not agreed.
Fourthly, the words used in the October 2013 Conversation were not words which evince an intention to enter a binding contract, in particular one in which the subject matter of the contract was property with a value of $1 million. This reason, coupled with the second and third reasons, lead me to be satisfied that a reasonable observer listening to this conversation would not conclude that a final binding agreement had been reached, even one which would be restated in a form which will be fuller or more precise.
Counsel for Mr Johnson noted the observation by Le Miere J in Secola that where the intention of the parties is equivocal, conduct subsequent to the making of the alleged agreement is admissible in evidence to show whether or not a contract was concluded.[17] Counsel outlined two series of conduct which he says are evidence to show that a contract was concluded.
[17] Secola [18].
The first relates to an offer dated 30 January 2014. Mr Hallam's evidence is that a real estate agent appointed by Mr Johnson approached him to prepare a standard REIWA Contract for Sale of Land for the Property. He says the agent came and saw him on 30 January, wrote out an offer and acceptance which he signed, and which the agent then took away.[18] The offer dated 30 January 2014 is in evidence (January 2014 Offer).[19] Relevantly, its terms are:
(a)the purchaser is Wingstar Holdings Pty Ltd as trustee for the Johnson Family Trust;
(b)the purchase price is $1,000,000;
(c)the settlement date is 21 days from finance approval;
(d)the agreement was subject to finance, with the latest time for finance to be provided being 90 days from acceptance; and
(e)'the seller is aware that settlement of 28 Highbridge Way Karrinyup includes all outstanding money including rent up to the date of settlement' (Rent Clause).
[18] Johnson Affidavit [53] ‑ [59].
[19] Johnson Affidavit FJP2 (57).
Mr Johnson counter-offered shortly afterwards, dating his amendments 11 February 2014 (February 2014 Counter‑offer).[20] The latest day for finance approval was changed to 60 days from acceptance and a line was ruled through the Rent Clause.
[20] Johnson Affidavit FJP3 (62).
The February 2014 Counter‑offer is significant for two reasons. The first is that it meant that there was no concluded agreement in writing based on the January 2014 Offer. The second is that it does not constitute equivocal conduct showing that an agreement had been concluded in the October 2013 Conversation; quite the opposite, making it clear that there were key two terms which remained to be agreed.
The second conduct is an offer from Mr Hallam sent to Mr Johnson's lawyers by his lawyers under cover of a letter dated 15 July 2014. This letter enclosed two documents. The first was a REIWA Contract for Sale of Land (July 2014 Offer).[21] The purchaser is left blank. The key terms were:
(a)the purchase price is $1,000,000;
(b)the settlement date is 30 days from finance approval; and
(c)the agreement was subject to finance, with the latest time for finance to be provided being 90 days from acceptance.
[21] Johnson Affidavit (65 ‑ 67).
The second document was an Acknowledgment of Debt in relation to the money owned for outstanding rent.[22]
[22] Johnson Affidavit (68 ‑ 76).
The July 2014 Offer and the Acknowledgment of Debt were expressed to be open until 5.00 pm on 22 July 2014. There is no evidence before me that the July 2014 Offer and the Acknowledgment of Debt were accepted before they expired. There is a letter from Mr Johnson's lawyer to Mr Hallam's lawyer dated 24 July 2014 which sets out the reasons why Mr Johnson states he could not execute the Acknowledgment of Debt.[23]
[23] Johnson Affidavit (78 ‑ 83).
The course of conduct in relation to the July 2014 Offer and the Acknowledgment of Debt is not equivocal conduct to the effect that there was a concluded agreement reached in the October 2013 Conversation; rather it is consistent only with the parities still trying to reach a final agreement.
There is another item of conduct that places it beyond doubt that no agreement was entered into in the October 2013 Conversation. In an email to Mr Johnson on 22 January 2014 discussing the issues, Mr Johnson states: 'The house price is not inflated. I had it assessed last month and the asking price is fair and reasonable'. Mr Johnson responds in an email later that day. He inserts his comments into Mr Hallam's email. In response to the sentence just quoted, Mr Johnson states: 'We were throwing around figures, but we did not agree on the price of the property'.[24] This comment by Mr Johnson is consistent with the language he says he used in the October 2013 Conversation (see [17] above) as well as the general tenor of the conversation.
[24] Johnson Affidavit (27).
Accordingly, I am of the view that no concluded agreement was reached in the October 2013 Conversation.
Having reached this conclusion it is not strictly necessary to deal with the next two issues. However, as they reinforce the conclusion that summary judgment ought to be awarded, I will address them briefly.

If there was a concluded agreement, did it agreement comply with Property Law Act 1969 (WA) (PLA) s 34?

PLA s 34(1)(a) provides that:
(1)Subject to the provisions hereinafter contained in this Act with respect to the creation of interests in land by parol -
(a)no interest in land is capable of being created or disposed of except by writing signed by the person creating or conveying the interest, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law.
Mr Johnson's case is that there was a concluded contract made in the October 2013 Conversation which was sufficiently evidenced in writing to comply with PLA s 34(1)(a). Counsel for Mr Johnson submitted that the July 2014 Offer and the Acknowledgment of Debt 'meet all requirements of the formation of a valid contract, and for the requisite writing'.[25]
[25] Plaintiff's submissions [12].
A 'verbal contract for the sale of land or for the disposition for valuable consideration of an interest in land is an agreement which creates an interest in land within the meaning of s 34(1)(a) of the Property Law Act and accordingly, "subject to the provisions hereinafter contained in this Act with respect to the creation of interests in land by parol" such an agreement is ineffective and cannot be specifically enforced'.[26] It is not sufficient that there is a 'good memorandum in writing of the verbal agreement, because it is the verbal agreement which creates the interest not the memorandum'.[27]
[26] Redden v Wilks [1979] WAR 161, 165 (Burt CJ), citing Adamson v Hayes[1973] HCA 6; (1973) 130 CLR 276. See also: Shepherd v Baster [2005] WASC 23 [5] (Sanderson M).
[27] Redden (165); Shepherd [5].
I am satisfied that:
(a)the agreement which Mr Johnson alleges was made in the October 2013 Conversation was an agreement which purported to create an interest in land within PLA s 34(1)(a);
(b)the alleged agreement was not in 'writing signed by the person creating or conveying the interest' as required by PLA s 34(1)(a); and therefore
(c)if there was an agreement concluded in the October 2013 Conversation, it is not enforceable by reason of PLA s 34(1)(a).
The decision of Master Sanderson in Shepherd v Baster is an example of the application of PLA s 34(1)(a) in substantially identical facts to the present case, leading to the same conclusion.[28]
[28] Shepherd [2] ‑ [8].

Can Mr Johnson enforce the agreement based on the doctrine of part performance?

An agreement which does not comply with PLA s 34 may nevertheless be enforced if there are sufficient acts of part performance.[29] The basis for the doctrine of part performance is that a defendant who allows the plaintiff to commit himself or herself in some material way by performing obligations under, or because of, the contract will be acting unconscionably if he or she then tries to escape the contract by resort to the PLA.[30]
[29] PLA s 36(d).
[30]Secola [122] referring to Cheshire and Fifoot's Law of Contract (9th ed, 2008) [16.58].
In Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd,[31] Buss JA set out the elements required to establish part performance in the following terms, drawn from the decision of Isaacs and Rich JJ in McBride v Sandland:[32]
[31] Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23 [70] (Buss JA), [49] (adopted by Pullin JA).
[32] McBride v Sandland [1918] HCA 32; (1918) 25 CLR 69.
The reasons of Isaacs and Rich JJ in McBride enunciate certain elements of the doctrine of part performance which are essential to raise the equity:
'(1) The act relied on must be unequivocally and in its own nature referable to "some such agreement as that alleged." That is, it must be such as could be done with no other view than to perform such an agreement (Maddison v. Alderson 8 App. Cas., at p.479; Gunter v. Halsey Amb, 586; Ex parte Hooper 19 Ves., 477, at p.479).
(2) By "some such agreement as that alleged" is meant some contract of the general nature of that alleged (Maddison v. Alderson 8 App. Cas., at p.485; Savage v. Carroll 1 Ball & B, 265 at p.282; Fry on Specific Performance, 5th ed., at p.292).
(3) The proved circumstances in which the "act" was done must be considered in order to judge whether it refers unequivocally to such an agreement as is alleged (Savage v. Carroll 1 Ball & B, 265, at p.282; Hodson v. Heuland (1896) 2 Ch., 428). Expressions are found in some cases which, if literally read, are to the effect that mere possession by a stranger is sufficient to let in parol evidence of any contract alleged. Those cases were prior to Maddison v. Alderson 8 App. Cas. 467, and the expressions if literally read appear to be too wide, because, so read, they would conflict with the requirement that the act must unequivocally refer to some such contract as is alleged, and because bare possession does not necessarily connote trespass or, alternatively, a contract at all; indeed, some contracts would not justify the act done. Possession may be the result of mere permission. But if the circumstances under which the possession was given are proved, then the Court may judge whether the act indicates permission or contract, and, if contract, its general character. For instance, in Frame v. Dawson 14 Ves., at p.388, the expression "some agreement" is used, we think, in contra‑distinction to the specific terms of the agreement, and not in the most general sense of any agreement whatever.
(4) It must have been in fact done by the party relying on it on the faith of the agreement, and further the other party must have permitted it to be done on that footing. Otherwise there would not be "fraud" in refusing to carry out the agreement, and fraud, that is moral turpitude, is the ground of jurisdiction (Fry on Specific Performance, 5th ed., par. 588; McCormick v. Grogan L.R. 4 H.L., 82, at p.97; Whitbread v. Brockhurst 1 Bro. Ch., 404, at p.417; Phillips v. Alderton 24 W.R., 8).
(5) It must be done by a party to the agreement (Fry on Specific Performance, par. 589).
These requirements must be satisfied before the actual terms of the alleged agreement are allowed to be deposed to.
Further, when those terms are established, it still remains to be shown:-
(6) That there was a completed agreement (Thynne v. Glengall 2 H.L.C., 131, at p.158).
(7) That the act was done under the terms of that agreement by force of that agreement (Thynne v. Glengall 2 H.L.C., 131, at p.158) (78 - 79).'
The acts of part performance identified by Mr Johnson are set out in the amended statement of claim:[33]
a.the defendant instructed his agent who managed the Property to cease collecting rent from the plaintiff in respect of his and his family's occupancy of the Property and
b.in accordance with those instructions the managing agent ceased to collect rent from the plaintiff and his family.
[33] Amended statement of claim [7].
For the purposes of a summary judgment application, I will assume that these facts will be established at trial.
There are two reasons why these acts are not sufficient to invoke the doctrine of part performance. The first is that they are not unequivocally and in their own nature referable an agreement of the kind alleged, being an agreement to transfer land. They are equally referable to an agreement to defer rent, perhaps even to an agreement to defer rent while the parties were negotiating a wider agreement.
The second reason is that the acts were not done by the party seeking to rely on them, namely Mr Johnson. Rather, they were done by Mr Hallam. As observed by Le Miere AJA in Lighting by Design, 'the acts of part performance that a plaintiff is required to establish must be his own acts, and not those of the defendant'.[34] There is no basis for there to be a 'fraud' if the agreement is not performed as there are no acts which Mr Johnson has done relying on the faith of the agreement; he has simply had the benefit of a decision by Mr Hallam to cease collecting rent. Put another way, as Mr Johnson has not committed himself in some material way by performing obligations under, or because of, the contract, Mr Hallam will be not be acting unconscionably if he tries to escape the contract by resort to the PLA.
[34] Lighting by Design [169].

What final orders are appropriate?

The power to order summary judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.[35] It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted.[36] On the material before me, Mr Hallam has persuaded me that Mr Johnson's claim is frivolous as required by RSC O 16 r 1. His claim is so clearly untenable that it cannot possibly succeed.[37] In the present case, I have the high degree of certainty required as to the ultimate outcome of the action to make it appropriate to order summary judgment in favour of Mr Hallam in relation to the claim brought by Mr Johnson.
[35] Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99 (Mason, Murphy, Wilson, Deane & Dawson JJ); SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 [20] (Judgment of the Court).
[36] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] (Gaudron, McHugh, Gummow & Hayne JJ); Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46] (Gleeson CJ, Gummow, Hayne & Crennan JJ); Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24] (French CJ & Gummow J), [54] ‑ [57] (Hayne, Crennan, Kiefel & Bell JJ); SMEC [20]; Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209 [113] (Le Miere J).
[37] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 25; (1964) 112 CLR 125, 129 ‑ 130 (Barwick CJ); Spencer [54] ‑ [57] (Hayne, Crennan, Kiefel & Bell JJ); Anderson (74,756) (Wallwork J); (74,757) (Owen J); Alcoa [113].
My preliminary view of the appropriate orders is:
1.There be judgment on the claim for the defendant against the plaintiff with costs to be taxed (including the costs of the summary judgment application) if not agreed.
2.The balance of the defendant's application dated 23 January 2015 relating to the counterclaim be adjourned to a date to be fixed.
I will hear from counsel as to the final form of the orders.