Komtas Pty Ltd v Castlecity Pty Ltd - [2000] WASC 72

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: KOMTAS PTY LTD -v- CASTLECITY PTY LTD & ORS [2000] WASC 72

CORAM: MASTER SANDERSON

HEARD: 16 MARCH 2000

DELIVERED : 28 MARCH 2000

FILE NO/S: CIV 2461 of 1999

BETWEEN: KOMTAS PTY LTD (ACN 009 359 728)
Plaintiff
AND
CASTLECITY PTY LTD (ACN 009 453 169)
First Defendant
PETER TILLI
JOSEPH TILLI
Second Defendants

Catchwords:

Summary judgment - Application by plaintiff - Turns on its own facts

Legislation:

Nil

Result:

Judgment for part of claim

Representation:

Counsel:

Plaintiff:     Mr I Weldon
First Defendant             :     Mr R Guerrini
Second Defendants       :     Mr R Guerrini

Solicitors:

Plaintiff:     Granich Partners
First Defendant             :     Camillo D'Angelo & Co
Second Defendants       :     Camillo D'Angelo & Co

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

Baxter v British Airways plc (1988) 82 ALR 298
Gates v City Mutual Life Assurance Society Ltd (1985) 160 CLR 1
Port of Melbourne Authority v Anshun Pty Ltd (1990) 36 ALR 3
Webster v Lampard (1993) 177 CLR 598

Case(s) also cited:

Chamberlain v Deputy Commissioner of Taxation (1991) 98 ALR 617
Cordinup Resorts Pty Ltd v Terana Holdings (1997) 143 FLR 18
Elders Trustee & Executor v E G Reever Pty Ltd (1987) ATPR (Digest) 46-030
Given v Pryor (1979) 24 ALR 442
R & I Bank of Western Australia v Wright (1992) 7 WAR 50
Wall v Bright (1820) 1 Jac & W 494

MASTER SANDERSON: This is the plaintiff's application for summary judgment. The application was supported by two affidavits, both sworn by Charles Joseph Morrone. One on 21 January 2000, the other on 28 February 2000. In opposition to the application the defendants relied upon an affidavit of Peter Tilli, sworn 14 February 2000.
The plaintiff's claim is entirely straightforward. It is alleged that on 13 October 1998 the plaintiff advanced the first defendant the sum of $650,000. This advance was secured by a mortgage over certain property ("the land"). The second defendants guaranteed payment by the first defendant of all moneys due under the mortgage. It is pleaded that the first defendant defaulted under the terms of the mortgage and the plaintiff claims repayment of $650,000 from the first defendant. In the alternative it seeks judgment against the second defendants as guarantors of the first defendant's liabilities.
The defendants do not deny the advance, nor do the second defendants deny the guarantee. However, both defendants maintain that they have a claim against the plaintiff under the provisions of the Trade Practices Act or the Fair Trading Act.
The way in which this claim is said to arise is as follows. In early to mid‑1998, the first‑named second defendant ("Tilli") became aware that the land was for sale. The sale was being handled by a real estate company of which Morrone was a director. Tilli alleges that, at all material times, Marrone represented that the vendor of the land was Keywest Pty Ltd ("Keywest"), that he (Morrone) was the duly authorised agent of Keywest and that Keywest would not accept an offer of less than $1.7 million for the land. On 4 August 1998 the first defendant made an offer to acquire the land for $1.6 million. This offer, which appears as Annexure "PT1" to Tilli's affidavit, was made by the first defendant on the assumption that the vendor was Keywest. In fact, Keywest is nowhere mentioned in the offer document. That is not exceptional - the offer is made to a real estate agent as agent for the vendor. The offer was rejected. Tilli says that Morrone again advised him the lowest price the vendor was prepared to accept was $1.7 million. Acting on that advice, so Tilli says, an offer was made for $1.7 million and was accepted.
Subsequent to the acceptance of the offer, Tilli discovered that on or about 23 July 1998 the plaintiff had acquired the land from Keywest for an amount of $1,350,000. The transfer of the land from Keywest to the plaintiff did not take place until 13 October 1998, the same day upon which the land was transferred to the first defendant. The defendants say that they could not have ascertained from a search of the records of the Department of Land Administration that the plaintiff was the beneficial owner of the land. More importantly, they say that misrepresentations made by the plaintiff have occasioned them loss and damage. This loss and damage they put at $350,000 - the difference between what the plaintiff paid for the land and the first defendant paid for the land. In addition to that amount, the first defendant claims further sums by way of stamp duty, selling fees and the like.
The first thing to say about this defence is that, put at its best, the first defendant's counterclaim could amount to no more than $450,000 and the plaintiff should be entitled to summary judgment for an amount of $200,000.
For the purposes of this summary judgment application, the court is to accept the version of events as put by the defendants unless that version is inherently incredible: see Webster v Lampard (1993) 177 CLR 598. Putting the defendants' version of events together with s 52 of the Trade Practices Act, what is said is that in reliance upon representations made by Morrone which were misleading or deceptive, the first defendant has suffered loss and damage. Accepting, for the purposes of the application, that the representations made by the plaintiff were misleading and deceptive and that the defendants relied upon them in entering into the sale agreement and the guarantees, it is proper to ask what loss has been suffered. Without loss, there is no right of action under s 52: see Baxter v British Airways plc (1988) 82 ALR 298.
The proper way to approach an assessment of damages in an action brought under s 52 of the Trade Practices Act was considered by the High Court in Gates v City Mutual Life Assurance Society Ltd (1985) 160 CLR 1. Mason, Wilson and Dawson JJ put the position as follows (at 13):
"Because the object of damages in tort is to place the plaintiff in the position in which he would have been but for the commission of the tort, it is necessary to determine what the plaintiff would have done had he not relied on the representation. If that reliance has deprived him of the opportunity of entering into a different contract for the purchase of goods on which he would have made a profit then he may recover the profit on the footing that it is part of the loss which he has suffered in consequence of altering his position under the inducement of the representation. This may well be so if the plaintiff can establish that he could and would have entered into the different contract and that it would have yielded the benefit claimed. The lost benefit is referable to opportunities forgone by reason of reliance on the misrepresentation. In this respect the measure of damages in tort begins to resemble the expectation element of the measure of damages in contract save that it is for the plaintiff to establish that he could and would have entered into the different contract."
In this case, the first defendant says that had it not been for the plaintiff's misrepresentation, it could and would have entered into a contract for the purchase of the land for the sum of $1.35 million. As to the "could" element of this equation, it says the very fact that Keywest was prepared to sell to the plaintiff for the sum of $1.35 million indicates that had it made an offer for that amount it was likely to have been accepted. There are some difficulties with this submission. First, the plaintiff purchased the property from Keywest in July 1998 and the first defendant did not make its first offer until August 1998. Second, there is nothing in the evidence which suggests that Keywest would have accepted an offer of $1.35 million from the first defendant. Third, there is no evidence to suggest that such an offer would have been made in July by the first defendant. After all, there was no obligation on the plaintiff to advise the first defendant that an offer of $1.35 million to Keywest would be accepted. Indeed, there is no evidence that the plaintiff knew Keywest would accept such an offer.
Nonetheless, in the circumstances, it seems to me at least arguable that the first defendant may have suffered loss and damage as a consequence of misleading and deceptive conduct on the part of the plaintiff. The precise amount of that damage is presently not clear, but on any assessment of the first defendant's claim it could not amount to more than $450,000. In my view, there should be summary judgment for the plaintiff in the sum of $200,000 and leave to defend with respect to the rest of the plaintiff's claim.
There is one further matter which requires comment. After the issue of these proceedings, the first and second defendants issued proceedings of their own on 24 January 2000 (CIV 1077 of 2000). It was submitted by counsel for the plaintiff that the issue of these proceedings was an abuse of process. He is clearly correct in that submission. Any claims that the defendants may have against the plaintiff should be disposed of in these proceedings. Counsel for the plaintiff went further and argued that the mere issue of these proceedings amounted to an estoppel, the effect of which was that the claims raised in other proceedings were not available as a defence in these proceedings. In support of that submission, he relied upon the decision in Port of Melbourne Authority v Anshun Pty Ltd (1990) 36 ALR 3. There is no doubt that had these proceedings come to a conclusion with judgment entered for the plaintiff, then the issue of further proceedings raising the claim which could have been pursued in these proceedings would be an abuse of process and subject to a stay. That would be consistent with the principle, the so‑called Anshun estoppel. But while these proceedings are still extant, the mere issue of alternative proceedings, although it may amount to an abuse of process, does not in my view give rise to an Anshun estoppel. Rather, the appropriate course is to stay the other proceedings or order a consolidation. I propose to make orders to that effect on the present chamber summons to avoid the necessity for a further application.
I will hear the parties as to the precise form of the orders.