Jones v Pyramid Constructions (WA) Pty Ltd [No 2]
[2016] WADC 111
•29 JULY 2016
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: JONES -v- PYRAMID CONSTRUCTIONS (WA) PTY LTD [No 2] [2016] WADC 111
CORAM: STEWART DCJ
HEARD: 13 JUNE 2016
DELIVERED : 29 JULY 2016
FILE NO/S: CIV 2920 of 2015
BETWEEN: JOHN RICHARD JONES
First appellant
BOSCO KINETICS PTY LTD
Second appellantAND
PYRAMID CONSTRUCTIONS (WA) PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :DEPUTY REGISTRAR HARMAN
Citation :JONES -v- PYRAMID CONSTRUCTIONS (WA) PTY LTD [2016] WADC 26
File No :CIV 2920 of 2015
Catchwords:
Appeal from registrar - Application for summary judgment - Turns on its own facts
Legislation:
District Court Rules 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Appeal dismissed
Application for summary judgment dismissed
Representation:
Counsel:
First appellant : Mr J MacLaurin
Second appellant : Mr J MacLaurin
Respondent: Mr P Hardie
Solicitors:
First appellant : Lawton Gillon
Second appellant : Lawton Gillon
Respondent: Hardies Lawyers
Case(s) referred to in judgment(s):
Callisher v Bischoffsheim (1870) LR5QB 449
Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194
Fancourt v Mercantile Credit Limited (1983) 154 CLR 87
Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1979) 29 ACTR 21
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Morgan v Pallister [2004] WASC 188
Stevens v Hoberg [1952] St R Qd 10
STEWART DCJ:
Introduction
The respondent company, Pyramid Constructions (WA) Pty Ltd (Pyramid), operates a property development and construction business.
The first appellant, John Richard Jones (Mr Jones), was from 5 September 2005 to 27 June 2014 a director and shareholder of Pyramid. During the time of Mr Jones' directorship of Pyramid the other directors were Mr Jerry Masaryk (Mr Masaryk) and from on or about 10 October 2012 Mr Anthony Paul Chillino (Mr Chillino).
Mr Jones is a director, shareholder and secretary of the second appellant, Bosco Kinetics Pty Ltd (Bosco).
On or about 6 June 2014 Mr Jones alleges that he and Pyramid entered into a written agreement to settle a dispute about entitlement to monies in a bank term deposit. It is alleged that Pyramid would pay Mr Jones the sum of $450,000 by instalments to settle the payment dispute. Some payments were made to Bosco under the agreement.
Mr Jones and Bosco sued for the balance of the monies under the agreement. It is alleged there has been a breach of the settlement agreement.
Mr Jones and Bosco applied for summary judgment under O 14 of the Rules of the Supreme Court 1971 (RSC).
This is an appeal against the judgment of Deputy Registrar Harman dismissing Mr Jones' and Bosco's application for summary judgment and awarding Pyramid the costs of the application in any event: Jones v Pyramid Constructions (WA) Pty Ltd [2016] WADC 26.
By this appeal Mr Jones and Bosco seek the following orders:
1.The application for summary judgment be allowed.
2.Judgment be entered for Mr Jones and Bosco against Pyramid in the sum of $271,150.
3.Pyramid pay interest at the Supreme Court rate of 6% per annum:
(a)on the sum of $20,350 from 30 June 2015 until the date of judgment; and
(b)on the sum of $250,900 from 31 July 2015 until the date of judgment.
4.Pyramid pay the costs of the appeal and of the summary judgment application on the basis to be determined by the court. Alternatively:
(1)The costs of their application for summary judgment be in the cause;
(2)Pyramid pay the costs of the appeal on a basis to be determined by the court.
Nature of the appeal
The notice of the appeal does not set out any grounds of appeal. Mr Jones' and Bosco's outline of submissions state at par 3:
Although no error need be identified, there are certain aspects of the Deputy Registrar's reasons for decision which inform upon the present appeal in that the Deputy Registrar:
(a)appeared, as did the respondent at the hearing, to conflate the concepts of 'illegality' in a contract or transaction, and a lack of bona fides in respect of a settlement agreement, such as would lead to a want of consideration;
(b)stated that the 'issue presented in the application can only be resolved at trial' but failed to identify what that issue was or why it could only be determined at a trial;
(c)did not refer to the authorities relied upon by the parties;
(d)failed to deal with the question of conditional leave to defend notwithstanding that this issue was raised by the appellants at the conclusion of the hearing.
This appeal is brought under r 15(1) of the District Court Rules 2005 (WA) (DCR).
An appeal from the decision of a registrar to a judge under r 15(1) of the DCR is a hearing de novo: DCR, r 15(6); Hazart Pty Ltd v Rademaker (1993) 11 WAR 26, 28. Accordingly, I am to treat the application which led to the making of the orders the subject of the appeal as though it had not been previously determined.
It is not necessary for Mr Jones and Bosco to establish appealable error on the part of the registrar (although Mr Jones and Bosco set out aspects of his decision): Hazart v Rademaker (28); Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 [13], [14].
Applicable legal principles
The legal principles regarding summary judgment applications are not in dispute. Pullin J summarised the principles in his judgment in Morgan v Pallister [2004] WASC 188, in the following terms [4]:
The plaintiff carries the burden of persuading the court that the claim is a good one, that there is no defence to it, that leave to defend should not be granted and that judgment should be given for the plaintiff. The party showing cause against the application assumes an evidentiary burden but the overall legal burden of persuasion remains on the applicant. The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried. It is clear however, that the procedure is not confined to cases which are immediately plain and obvious and the fact that a transaction is intricate does not disentitle the plaintiff to relief in a clear case. It was never intended that when the facts are in dispute, an action should be disposed of summarily. If a defendant's affidavit reveals inconsistencies which might in a trial persuade a court not to believe the defendant's evidence, this will not necessarily lead to judgment for the plaintiff. It is not necessary to cite authority for these propositions.
The power to order summary or final 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: Fancourt v Mercantile Credit Limited (1983) 154 CLR 87.
Kendall C and Curthoys J, Civil Procedure Western Australia (vol 1, [14.3.3]) refers to disputes as to fact or law:
In determining whether there is a question which ought to be tried, there must be a plausible contention requiring investigation.
This does not mean that the court must uncritically accept every statement in an affidavit, 'however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself'. Nor must a court accept a statement in an affidavit not having 'sufficient prima facie plausibility to merit further investigation as to [its] truth; (cf Eng Mee Yong v Letchumanan [1980] AC 331 at 341; [1979] 3 WLR 373) 4. Nor must it accept 'a patently feeble legal argument or an assertion of fact unsupported by evidence'.
However, this does not mean that, except in circumstances outlined above, a court should not embark upon an inquiry as to the credit of a witness, or a deponent whose evidence is relied on as giving rise to the dispute. There is a clear difference between determining whether there is a question which ought to be tried and determining the merits of, or resolving, such a question: South Australia v Wall (1980) 24 SASR 189, 194; Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787; 12 ACLC 669; BC9402306.
Status of the pleadings
On 12 August 2015 Mr Jones and Bosco filed the writ of summons endorsed with a statement of claim for breach of agreement.
Pyramid entered a memorandum of appearance on 21 August 2015.
By chamber summons dated 11 September 2015 Mr Jones and Bosco made an application under O 14 r 1 RSC for summary judgment.
Mr Jones and Bosco relied upon Mr Jones' affidavit sworn 11 September 2015 and his responsive affidavit sworn 13 November 2015.
In opposition to the application Pyramid relied on the affidavit of Mr Chillino sworn 19 October 2015, the affidavit of Mr Masaryk sworn 29 November 2015, Mr Jones' responsive affidavit and the affidavit of Neil Anthony Alessandrino sworn 10 December 2015. Mr Alessandrino is the accountant who supervises the tax and accounting work for the Pyramid group of companies.
The application was heard on 15 December 2015 by Deputy Registrar Harman and on 2 March 2016 he delivered his decision.
Factual background
I set out the factual background as it emerges from the affidavits that have been filed.
Mr Masaryk was a founding director and 25% shareholder of Pyramid when it was incorporated in November 2000. In 2005 he increased his shareholding in Pyramid to 100%.
Mr Masaryk deposes that he transferred 25% of his shares to Mr Jones' family trust at no cost in August 2006 after Mr Jones became a partner in the business. The remaining 75% of the shares were held by his family trust.
In about July 2011 there was a re-structure of the companies. The Pyramid Group of companies was comprised of a new parent entity, Pyramid Group (Aust) Pty Ltd, and various subsidiaries including Pyramid.
On or about 30 September 2012 Mr Jones agreed to progressively sell his shares in the parent entity to Cestius Pty Ltd, a company associated with Mr Chillino. It was agreed that Mr Jones would remain a director of Pyramid and the other Pyramid Group of companies until his shareholding was completely transferred to Cestius Pty Ltd which in accordance with the terms of the Share Sale Agreement was to be 30 June 2014.
On or about 6 November 2009 Pyramid established a term deposit with the ANZ bank with an opening balance of $1.5 million (the first term deposit). Mr Jones, in his responsive affidavit, says at pars 5 and 6:
Prior to the Pyramid Group of companies (as set out in paragraph 8 of Masaryk's Affidavit), of which the Defendant was a member, employing a chief financial officer, Mr Stanley Voloczi, in or around August 2011, there was an arrangement in place between me and Masaryk by which, instead of the Defendant each financial year paying us a dividend, the Defendant would informally allocate the dividend to each of us.
The dividend monies that would have otherwise been paid to us stayed in the Defendant's main trading bank account for credit and cash flow purposes. Masaryk and I each used to refer to this as our 'dividend allocation' or the 'undeclared dividends'. The dividend allocation was calculated by reference to our respective shareholdings (being myself 25% and Masaryk 75%) in the Defendant.
Mr Jones deposes that the first term deposit was established utilising our respective dividend allocations which were in Pyramid's trading bank account. He further deposes that an amount of $375,000 represented his part of the dividend allocation.
Mr Masaryk says at par 16(j) of his affidavit that he did not understand Mr Jones' assertion that he
contributed approximately $375,000 to the first term deposit as the funds came from the Defendant's existing cash held in the Trading Account with no additional funds being contributed by either myself or the First Plaintiff.
Mr Masaryk deposes that when the first term deposit was due to mature in November 2010 Pyramid was experiencing a period of tight cash flow and needed additional working capital.
He says that he used his wife’s property as security to increase the business facility limit. 75% of the maturity value of the first term deposit was used, $1,200,528.12, towards repayment of an ANZ mortgage over that property.
The balance of the first term deposit was reinvested by Pyramid in a second term deposit. In February 2014 the balance of the second term deposit at the ANZ was $467,972.98.
In his affidavit Mr Jones deposes at par 10 that the second term deposit represented the security he had provided to ANZ for the banking facilities provided by ANZ to Pyramid and the other Pyramid Group companies.
Mr Jones says at par 11:
At all material times I considered as part of my exit from the Defendant and the other Pyramid Group Companies, I was entitled to be paid the amount of the ANZ Term Deposit plus interest accrued from February 2014.
Mr Masaryk at par 16 of his affidavit deposes that the statement at par 10 of Mr Jones' affidavit is incorrect.
Mr Alessandrino also disagrees with Mr Jones' assertions. He says at par 10 of his affidavit:
As to paragraph 5 of Jones' Second Affidavit, I am not aware of any such arrangement between Mr Masaryk and the First Plaintiff. To my knowledge the Defendant does not, and never has had, a dividend policy. In any event, based on my review and understanding of the Defendant's financial statements since 2000, the Defendant has never been in the financial position where it could afford to pay a dividend to its shareholders due to the high cash flow requirements and liquidity needs of the Defendant's business.
He says further at par 15:
Finally, as to paragraph 11 of Jones' Second Affidavit, I recall meeting with the First Plaintiff to discuss his proposed exit from the Pyramid group of companies but there was never any mention of dividend allocations or entitlements. For the reasons outlined above, any such discussions would have been fanciful.
On or about 4 June 2014 Mr Jones put forward a proposal to Pyramid for the payment by Pyramid to him of the monies held in the second term deposit.
Negotiations followed and the agreement set out below was typed by Mr Jones.
The agreement
Response to 'PROPOSED PAYOUT OF TERM DEPOSIT ANZ ACCOUNT ON. 9963-74343 FROM PYRAMID CONSTRUCTIONS (WA) PTY LTD TO JOHN JONES OF 79B Matheson Road, Applecross, WA, 6153.
•Term Deposited on or about 2008 by PCWA = $1,500,000.00 as interchangeable security for PCWA operations.
•On or about November 2010, term deposit (of just over $1.6M), was split whereby Jerry Masaryk's portion was utilised to pay off personal loan ($1.2M) on own personal residence as security which in turn allowed PCWA to increase its interchangeable facility to $1.95M, which was needed at the time.
•Term deposit belonged to PCWA and Jerry Masaryk took the amount as loan, balance remaining as John Jones's security portion for the share held, however, strictly speaking there is no legal entitlement to the amount.
That said:
•Proposed consideration is for a full and final lump sum settlement of $450,000, with following payment terms:
•Payout to be in 13 No. instalments, from July 2014, whereby:
•12No. x $18,500.00 +GST payments are made after a Tax Invoice is issued by John Jones's consultancy or other entity;
•1No. x $228,000.00 +GST is paid end of July 2015 after a Tax Invoice is issued as a full and final settlement of the agreed balance.
•Tax Invoices to be paid on the last day of each calendar month.
Employment/Shareholding Conclusion
1.Final salary paid to and including 30 June 2014 (as per payment terms) on current salary package.
2.Resignation as a Director – documents to be signed as and when made available.
3.Share Sale form to be executed.
4.Guarantee release as per agreement.
5.ANZ Bank signatories and guarantee to be cancelled as of Friday 27, June with key fobs returned as required by ANZ Bank.
6.Personal liability for all Matheson Road house construction debts assumed on and before 27 June 2014.
7.All other terms and conditions of the share sale agreement to be concluded.
Signatures then appear with Mr Masaryk, Mr Chillino and Mr Jones each signing as individuals with no indication of status. The document is dated 6 June 2014.
Issues for determination
Mr Jones and Bosco submit that this agreement represented a bona fide compromise of the payment dispute. Mr Jones and Bosco submit that the court cannot look behind the agreement. Further, Mr Jones and Bosco submit that the subject matter of the original dispute that led to the settlement agreement is wholly irrelevant. Summary judgment is claimed for breach of the settlement agreement and for the balance owing.
Pyramid submits that there is evidence casting doubt on the bona fides of Mr Jones when he entered into the settlement agreement. Pyramid's submissions have three limbs.
First, Mr Jones had no legal entitlement to the money in the second term deposit as the money in the second term deposit belonged to Pyramid.
Second, by reason of the fact that Mr Jones had no legal entitlement to the money in the second term deposit the underlying foundation of the settlement agreement was an alleged entitlement which was illusory.
Third, Mr Jones actually knew that his alleged entitlement to the monies in the second term deposit was illusory. Pyramid submits Mr Jones knew he had no claim to the monies in the second term deposit. Mr Jones did not act in good faith when he entered into the settlement agreement or, at the very least, he had imputed knowledge of this fact by reason of his position as a director of Pyramid.
The essential question is whether the settlement agreement represented a true and bona fide compromise of the dispute.
If Pyramid can persuade the court that there is a question regarding the bona fides of Mr Jones it will have shown, in my view, there is a serious question to be tried.
The registrar's reasons
I set out the learned registrar's reasons below [2] – [13]:
According to the pleading, the first plaintiff and defendant had been in dispute as to whether he had any entitlement to a fund held on deposit by the defendant's bank and the process by which he would be paid; they had recorded an agreement under which a lesser amount would be paid by instalments; and that in breach of the agreement the defendant failed to pay the last two instalments due.
According to the first plaintiff's evidence, the dispute arose after he has disposed of his shares in the defendant in the context of his withdrawal from the affairs of the defendant, both as director and employee. He attaches a letter from the defendant's solicitor dated 24 July 2015 in which it raises the issue whether the agreement was founded upon common mistake and the proper characterisation of payments made. It concludes with a demand for repayment.
The plaintiffs carry the onus of persuasion that there is a clear case for judgment and that it is appropriate to award judgment.
Although the defendant's evidence and written submissions suggest that it would present a wider range of issues for consideration upon the hearing, at the hearing its submissions were limited to the bona fides of the first plaintiff in contending that he had any entitlement to the fund. The only substantive issue presented upon the application is the question of enforceability of the agreement.
In his affidavit of 11 September 2015 the first plaintiff identifies the fund; asserts that it represented security that he had provided the to the defendant's bank and that at some time not clearly stated but either since the fund had been established or in the process of severing his connections to the defendant, he considered that he was entitled be paid the fund.
Thereafter he gives evidence of the presentation of his written proposal for payment and of the defendant's response, part oral and part written. The written part included a reservation as to the first plaintiff's entitlement but offered a lesser amount and along with the oral part, put a proposal for payment by more instalments over a longer period.
What I have characterised as the reservation was expressed by the words that the first plaintiff has no legal entitlement to the fund.
With reference to the affidavit, both the proposition that the fund would be amenable to characterisation as having been provided by the first plaintiff and his contended entitlement are no more than unfounded submissions.
According to the evidence presented by the defendant in the form of the affidavits of Masaryk and Alessandrino, there is sufficient to allow for the result that the particular fund had been set aside for a particular purpose that bore no relationship to any entitlement of its shareholders of whom the first plaintiff had been one. The evidence also supports the proposition that at the time that the fund had been established the defendant had not been in a position to establish any entitlement of its shareholders.
Since the defendant filed those affidavits, the plaintiff has filed further affidavits but did not seek leave to rely upon their content.
The defendant submitted that having at all material times been a director of the defendant the first plaintiff had been aware that the defendant had not been in a position to establish any entitlement of the first plaintiff to the extent that he claimed.
The issue presented in the application can only be resolved at trial. Accordingly the application is dismissed.
Analysis and decision
In order to deal with the competing arguments of the parties I make reference to some of the case law referred to me.
Mr Jones and Bosco rely upon Callisher v Bischoffsheim (1870) LR 5QB 449 (452). Mr Jones and Bosco submit that it stands for the proposition that not only is the settlement agreement enforceable, but all the background behind the subject matter of the dispute is irrelevant and inadmissible. In Callisher Cockburn CJ said:
Every day a compromise is effected on the ground that the party making it has a chance of succeeding in it, and if he bona fide believes he has a fair chance of success, he has a reasonable ground for suing, and his forbearance to sue will constitute a good consideration. When such a person forbears to sue he gives up what he believes to be a right of action, and the other party gets an advantage, and, instead of being annoyed with an action, he escapes from the vexations incident to it. The defendant's contention is unsupported by authority.
It would be another matter if a person made a claim which he knew to be unfounded, and, by a compromise, derived an advantage under it: in that case his conduct would be fraudulent. If the plea had alleged that the plaintiff knew he had no real claim against the Honduras Government, that would have been an answer to the action.
Again, in Callisher, Blackburn J said (452):
If we are to infer that the plaintiff believed that some money was due to him, his claim was honest, and the compromise of that claim would be binding, and would form a good consideration, although the plaintiff, if he had prosecuted his original claim would have been defeated. This case is decided by Cook v Wright. In that case it appeared from the evidence that the defendant knew that the original claim of the plaintiff was invalid, yet he was held liable, as the plaintiff believed his claim to be good. The Court say that 'the real consideration depends on the reality of the claim made, and the bona fides of the compromise'.
Further, Mr Jones and Bosco rely on Stevens v Hoberg [1952] St R Qd 10. In that case Philp J stated (14):
It follows from that dictum that a bona fide compromise of the civil action generally is valid and enforceable at the suit of a party even if he could not have succeeded in the original action because of some impediment, e.g. lack of a cause of action or the pleading of the Statute of Frauds.
Is the position different if the impediment to success in the original action is the illegality of the contract sued upon therein? I have seen no case laying down as a rule of law that the position is different. It is quite lawful to bring an action upon an illegal contract and the plaintiff will succeed if he establishes his cause of action and if the defendant does not plead the facts showing illegality and if illegality does not so clearly appear upon the evidence adduced as to cause the court itself to notice the illegality and to refuse relief because of it.
Even when the defendant pleads illegality he merely raises an issue of law and fact which like any other issue may or may not be decided in his favour …
In my view the compromise of such an action is valid provided it be bona fide, for it is public policy to uphold bona fide compromises.
The necessity for bona fides lays the fear that persons may make a collusive or a sham compromise in order to defeat the rule ex turpi causa non oritur action.
I do not regard either case as having application here.
Calisher was not a case where it was alleged the plaintiff knew he had no real claim against the defendant. In this case Pyramid submits that Mr Jones knew he had no entitlement to the monies in the second term deposit.
Moreover, the case of Stevens was not a case involving an application for summary judgment. In that case the building contract was illegal as contrary to building control regulations. The plaintiff honestly instituted the proceedings believing he had a legal claim and honestly compromised the claim. The defence of illegality to the action was available but not raised.
In this case illegality is not raised by Pyramid. What is raised is the bona fides of Mr Jones.
In my view the bona fides of Mr Jones is in question for a number of reasons.
First, I turn to the agreement. In my view the agreement itself brings into question Mr Jones' belief as to his entitlement to the monies in the second term deposit. The agreement contains these words:
Term deposit belonged to PCWA and Jerry Masaryk took the amount as loan, balance remaining as John Jones' security portion for the share held, however, strictly speaking there is no legal entitlement to the amount.
In my view, those words raise a question as to Mr Jones' claim that he was entitled to the monies in the second term deposit. The words clearly state that the term deposit belonged to Pyramid. The final part of that sentence, 'strictly speaking there is no legal entitlement to the amount' puts in issue Mr Jones' entitlement. I do not accept the proposition in oral argument from Mr Jones and Bosco that the words are akin to a denial of liability.
Although not raised in submissions, there is no clear indication in the document that Mr Jones, Mr Chillino and Mr Masaryk were signing as directors of Pyramid. Each appeared to be signing as an individual. The only reference to Pyramid is that the agreement is typed on Pyramid letterhead. In my view, that raises uncertainty as to who were the parties to the settlement agreement.
I turn now to Mr Jones' affidavits in support of the summary judgment application. An application for summary judgment must be supported by an affidavit verifying the facts on which the claim is based (O 14 r 2(1)).
As noted in vol 1, [14.2.6] of Civil Procedure:
Where statements of information or belief are contained in affidavits, it is desirable that they should state: 'I have been informed by X and verily believe that Y is the fact. The grounds for my belief are as follows'. They should not include bold allegations unsupported by material facts: Lewkowski v Bergalin Pty Ltd (Full Court, 1989, Lib No 7675, unreported). They must also include a statement of the source of the information and the grounds for the belief. If it is clear that direct primary evidence is readily available to a party, it should be placed before the court rather than information and belief: Birch Investments Pty Ltd v Lim (WASC, 1988, Lib No 7396, unreported, BC8801057).
I agree with the learned deputy registrar when he said at [9]:
That the proposition that the fund would be amenable to characterisation as having been provided by the first plaintiff and his contended entitlement are no more than unfounded submissions.
The affidavits in opposition to the summary judgment application do not support Mr Jones' assertion as to his entitlement. The documents annexed to the affidavits including the financial statements suggest otherwise. There is no mention of any dividend entitlement to the shareholders. I have already referred to the affidavit of the accountant Mr Alessandrino who says that 'any such discussions would have been fanciful'.
In this case I am of the view that the bona fides of Mr Jones entering into the settlement agreement is in issue. Accordingly, the bona fides of the compromise is in issue. I reject Mr Jones' and Bosco's submission to me that this is a compelling case for summary judgment.
Having regard to all the circumstances before me, I have not been persuaded that there is no real question to be tried in this matter. In my view the issues raised by Pyramid are ones which can only be determined at trial. The issues require a complete investigation of all the facts and circumstances. Accordingly, the appeal should be dismissed and the application for summary judgment should be dismissed.
Conditional leave to defend
Counsel for Mr Jones and Bosco submitted in oral argument that there should be conditional leave to defend as on any view the defences 'would have to be taken as shady'.
I do not accept that proposition for the reasons I have set out above.
Costs
I do not accept the proposition from Pyramid that the application should never have been made and that Pyramid should be awarded costs. In my view this is not an exceptional case in that the application should never have been made: Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1979) 29 ACTR 21, 23.
The usual order with respect to costs in a summary judgment application is that costs be in the cause because the decision is not a comment on the strength of Mr Jones' and Bosco's case beyond it not having reached the high threshold. Accordingly, I order that costs of the appeal and of the summary judgment application be costs in the cause.
0
10
2