Johnson v Stawilton No 31 Pty Ltd

[1990] TASSC 130

Serial No B53/1990
List "B"

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Johnson v Stawilton No 31 Pty Ltd [1990] TASSC 130; B53/1990

PARTIES:  JOHNSON
  v
  STAWILTON NO 31 PTY LTD

FILE NO/S:  MA71/1990
DELIVERED ON:  4 September 1990
JUDGMENT OF:  Zeeman J

Judgment Number:  B53/1990
Number of paragraphs:  24

Serial No B53/1990
List "B"
File No MA 71/1990

JOHNSON v STAWILTON NO 31 PTY LTD

REASONS FOR JUDGMENT  ZEEMAN J

4 September 1990

1. This is an appeal from the Master. The plaintiff respondent ("the plaintiff") applied to the Master for summary judgment. The Master acceded to that application and granted leave to the plaintiff to enter final judgment against the defendant appellant ("the defendant") for the amount claimed in the action. The defendant has appealed against the making of that order and I have considered the matter anew upon the materials before the Master.

1. The statement of claim claimed the sum of $11,525.50 in respect of the supply by the plaintiff to the defendant of 3,293 cubic metres of fill at an allegedly agreed price of $3.50 per cubic metre. The statement of claim alleged that that fill was supplied pursuant to an oral contract made between the plaintiff of the one part and the defendant "through one of its directors acting as agent for the defendant" of the other part. That statement of claim was verified by the affidavit of the plaintiff.

1. I was told as an agreed fact that prior to the application for summary judgment having been filed, the plaintiff had delivered that statement of claim. Prima facie the affidavit of the plaintiff would entitle the plaintiff to summary judgment pursuant to O15, r1.

1. The principles to be applied in dealing with applications of this nature are well settled. They were referred to by Cosgrove J in Stephens v Huett [1983] Tas SR 227 (NC 10) where his Honour referred to the oft cited dicta of Lord Halsbury in Jones v Stone [1894] AC 122 at 124 and of Lord Esher MR in Roberts v Plant [1895] 1 QB 597 at 603. It is clear that if there is a triable issue raised upon the material before me other than one which must clearly be determined in favour of the plaintiff, then the defendant should have leave to defend.

1. I am dealing with this appeal upon the basis of the evidentiary materials before the learned Master. In addition to the plaintiff's initial affidavit, that material consisted of the following:

1An affidavit filed by the defendant, being the affidavit of Paul Andrejs Feldmanis, a director of the defendant.

2Two affidavits in reply being a further affidavit of the plaintiff and the affidavit of Terrence Richard Wheadon, who was a director of the defendant, apparently until 13 July 1990.

3A number of documents being exhibits P1, P2 and P3 emanating from the National Companies & Securities Commission, apparently relating to the defendant.

1. The primary issue raised upon the materials was the authority of the agent referred to in the statement of claim to bind the defendant. The statement of claim as amplified by the further and better particulars delivered by the plaintiff (which particulars in themselves were not verified by affidavit but which were handed to me by consent) suggests that the agent was Mr Wheadon. The conflict appears from Mr Feldmanis' affidavit and Mr Wheadon's affidavit. Mr Feldmanis deposed to the following:

"7        At no time did the company instruct or authorise Mr Wheadon either acting as a Director of the company or as an agent of the company to enter into any contractual negotiations such as those referred to in the Statement of Claim and the Further and Better particulars."

1. On the other hand, Mr Wheadon in his affidavit deposed to the following:

"2That in addition to being a Director of Stawilton No 31 Pty Ltd I was the properly appointed project Manager of the Defendant Company's Knocklofty Terrace subdivision and at all times I was authorised to act on behalf of Stawilton No 31 Pty Ltd with respect to the said subdivision.

3That pursuant to that authority, I agreed with Mr Peter Roger Johnson that he would deliver a quantity of fill at the price of $3.50 per cubic metre to the said subdivision site, and that Mr Johnson delivered the said fill as agreed.

5That my actions in entering into the agreement with Mr Peter Roger Johnson for the supply of fill for the Knocklofty Terrace subdivision were authorised by the Defendant Company and that authorisation was specifically confirmed by Mr Vis Feldmanis acting as agent for his son, Mr Paul Andrejs Feldmanis, a director of Stawilton No 31 Pty Ltd During my term as a director of Stawilton No 31 Pty Ltd all board meetings of the company were attended by Mr Vis Feldmanis, who also spoke at the said meetings. Mr Paul Andrejs Feldmanis barely spoke at all at board meetings."

1. The following matters might be noted as to Mr Wheadon's affidavit:

(a)He does not say how he became "the properly appointed project manager of the defendant company's Knocklofty Terrace subdivision".

(b)He does not say how he was authorised to act on behalf of the defendant with respect to the subdivision, nor does he say just what he was authorised to do in relation to the subdivision.

(c)He does not say how the defendant authorised him to enter into the agreement with the plaintiff.

(d)He does not say how it is asserted that Mr Vis Feldmanis was acting as agent for Mr Paul Feldmanis in confirming such authorisation.

1. As to these matters, Mr Wheadon has deposed to matters which really are matters to be determined by me upon the basis of primary facts. Examples of such primary facts would include evidence of proceedings at board meetings and evidence of the directors otherwise conferring some type of authority upon Mr Wheadon. No such primary facts appear from Mr Wheadon's affidavit. In those circumstances it ill behoves the plaintiff to complain of Mr Feldmanis not condescending to particulars in his affidavit or of the defendant not filing an affidavit in reply to the affidavit of Mr Wheadon.

1. I derive no assistance from the agreement P3. It should be noted that neither the defendant nor Mr Wheadon was a party to that agreement. That alone may be fatal in relying upon the agreement as conferring the necessary authority upon Mr Wheadon. More importantly, the agreement in its terms does not purport to authorise Mr Wheadon to do anything. The only relevant obligation is the obligation imposed on TGE Pty Ltd to "procure to the Syndicate as requested the services of Terrence Richard Wheadon in the design and development of the property." That falls far short of authorising Mr Wheadon to do anything. Before Mr Wheadon is to do anything, there needs to be a request for his services to TGE Pty Ltd and his services must be provided. There is no evidence before me as to those matters. There is no evidence as to the relationship (if any) between TGE Pty Ltd and Mr Wheadon.

1. In essence, the plaintiff has alleged that Mr Wheadon had authority, and Mr Wheadon has deposed that he had authority. There is no material before me as to factual matters upon the basis of which I could conclude that there was authority. In those circumstances, the defendant could do little more than to deny by a director, on oath, that Mr Wheadon had the requisite authority. It was not a case where the circumstances called for the defendant to condescend to particulars.

1. However, the plaintiff also seeks to rely on s68A of the Companies (Tasmania) Code.

1. The relevant provisions of s68A are in the following terms:

"68A    (1)       A person having dealings with a company is, subject to subsection (4), entitled to make, in relation to those dealings, the assumptions referred to in sub–section (3) and, in any proceedings in relation to those dealings, any assertion by the company that the matters that the person is so entitled to assume were not correct shall be disregarded.

(3)       The assumptions that a person is, by virtue of sub–section (1)... entitled to make in relation to dealings with a company ... are:

(b)       that a person who appears, from returns lodged with the Commission under section 238 or 263 or with the Commissioner for Corporate Affairs under a corresponding provision of a previous law of Tasmania to be a director .... has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised or performed by a director .... of a company carrying on a business of the kind carried on by the company;

(c)       that a person who is held out by the company to be an officer or agent of the company has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised or performed by an officer or agent of the kind concerned;"

1. There is no suggestion in this case that subs.(4) has any relevance. For a useful consideration of s68A reference might be made to Lyford v Media Portfolio Ltd (1989) 7 ACLC 271 at 280.

1. By virtue of O15, r3(1), I am empowered to "give such judgment for the plaintiff against the defendant on that claim or part thereof as may be just, having regard to the nature of the remedy or relief claimed" (my emphasis). Again, the affidavit verifying the facts required by O15, r2(1) must be one "verifying the facts on which the claim, or part of the claim, to which the application relates is based (my emphasis).

1. Before the assumptions referred to in s68A(3)(b) can be made, the following matters need to be established:

(a)That Wheadon appeared from a return lodged under one of the provisions referred to therein to be a director of the defendant.

(b)That a particular kind of business was carried on by the defendant.

(c)That particular powers and/or duties were exercised and/or performed by Mr Wheadon in relation to the transaction the subject matter of this action; and

(d)That those particular powers and/or duties were customarily exercised or performed by a director of a company carrying on a business of the kind carried on by the defendant.

1. There is uncontroverted evidence as to matter (a). There is evidence that at least inter alia the defendant owned subdivisional land and that its promoters intended, or at least contemplated, subdividing that land for profit. As to the balance of the matters required to be established, the evidence is equivocal. Certainly it is not so overwhelming as would be required before it could be said that the relevant assumption was necessarily one upon which the plaintiff could rely.

1. I turn to s68A(3)(c). There is no material upon which it could be found that Mr Wheadon was held out by the company to be an officer or agent of any description. Accordingly, it is not possible to determine as to what duties were customarily exercised or performed by an officer or agent of the kind concerned. In order for that provision to apply, the plaintiff would need to establish the following:

(a)That Mr Wheadon was held out by the defendant to be an officer or agent of the defendant.

(b)That he was so held out as an officer or agent of a particular type.

(c)That particular powers and duties were customarily exercised or performed by an officer or agent of that kind.

(d)That the transaction, the subject of this action, fell within the category of powers and/or duties customarily exercised or performed by an officer or agent of that kind.

1. Quite apart from the evidentiary matters, it was incumbent upon the plaintiff to plead the matters of fact upon the basis of which it was claimed the plaintiff was entitled to make the relevant assumptions. The statement of claim is silent in this regard. It merely asserts express agency on the part of an agent having no particular status or attributes.

1. Even if there had been no defect in the statement of claim, at a minimum the material discloses the following triable issues:

1Whether Mr Wheadon had the actual authority to enter into the transaction, the subject matter of the action, on behalf of the defendant.

2Whether in entering into the transaction on behalf of the company, Mr Wheadon was exercising powers or performing duties customarily exercised or performed by a director of a company carrying on a business of the kind carried on by the defendant.

1. Probably there are other triable issues. Upon the material before me it does not appear as though there could be any triable issue arising under s68A(3)(c) because there is no material upon which it would be open to a court to conclude that that provision applied.

1. Accordingly, I conclude that the defendant should have leave to defend. It was submitted that such leave ought to be granted on condition that the defendant pay at least one–half of the amount claimed into court. There is no proper basis upon which to impose such a condition.

1. Accordingly, I will order as follows:

1That the appeal be allowed.

2That the judgment entered on the 7th day of August 1990 pursuant to the Master's order be set aside.

3That the defendant have unconditional leave to defend the action.

1. I will hear the parties as to costs and as to any directions pursuant to O15, r6.