Leopardi v Leopardi - [2023] WASC 121

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   LEOPARDI -v- LEOPARDI [2023] WASC 121
CORAM:   MASTER SANDERSON
HEARD:   17 APRIL 2023
DELIVERED          :   18 APRIL 2023
FILE NO/S:   CIV 2151 of 2022
BETWEEN:   DAPHNE GALE LEOPARDI by next friend ANDREW CHRISTOPHER AND SIMON PETER LEOPARDI
Plaintiff
AND
KRYSTEN SARA LEOPARDI
Defendant

Catchwords:

Practice and procedure - Application for summary judgment - Turns on own facts

Legislation:

Property Law Act 1969 (WA)

Result:

Judgment for plaintiff

Category: B

Representation:

Counsel:

Plaintiff	:	P Dobson
Defendant	:	JR Shepherd

Solicitors:

Plaintiff	:	Hotchkin Hanly
Defendant	:	Blackwall Legal LLP

Case referred to in decision:

Masters v Cameron (1954) 91 CLR 353

MASTER SANDERSON:

This is the plaintiff's application for summary judgment. There is no dispute as to the relevant facts and these can be summarised as follows. The plaintiff is the mother of the defendant. The plaintiff and the defendant are registered proprietors as tenants in common of a property in Gidgegannup. The plaintiff seeks an order the property is sold pursuant to s 126 of the Property Law Act 1969 (WA). The defendant says there is an agreement between the plaintiff and the defendant which might be characterised as a right of first refusal which precludes an order for sale being made. It is the plaintiff's position the agreement is of no force and effect and can not stand in the way of an order for sale. The sole issue between the parties then is whether there is a serious question to be tried as to whether or not the agreement is enforceable.
There was no difference between the parties as to the relevant test for summary judgment. But in the context of this case, it is important to note it is not for the defendant to establish the proper interpretation of the agreement or define with precision its terms. For the defendant to be granted unconditional leave to defend, all she needs to establish is that her interpretation of the agreement is arguable. She may fail to satisfy a court at trial her interpretation should be accepted. But for the present, all she needs to establish is that her interpretation of the agreement gives rise to a serious question to be tried. On the other hand, the plaintiff must establish that the position is so clear the agreement could not possibly be of any force and effect and she is therefore entitled to judgment.
A copy of the agreement appears as attachment KSL-4 to the affidavit of the defendant sworn 22 March 2023. Because of the importance of this document, I will quote its terms in full.
KSL-4
Agreement between Daphne Leopardi and Krysten Leopardi regarding 32 Grassy View, Gidgegannup 6083.
1.We agree to contribute equally to the purchase price, purchasing expenses.
2.We agree to contribute equally to the on-going running expenses including insurance, electricity, gas, maintenance, gardening/mowing, and any agreed improvements.
3.Part of the purchase price and expenses will be funded by a vendors' loan of $15,000 plus interest which shall be repaid jointly by equal payments.
4.Daphne consents to a further $25,000 being borrowed by Krysten against the security of the property and to sign all necessary documents to effect that borrowing on the basis that Krysten makes all necessary repayments on that loan and indemnifies her in respect of that loan.
5.Neither party can require that the property be sold inside two years from the date of settlement. After that time either party may require that the property be sold - and each party has first option to buy the other's half interest. The price to be paid shall be the average of the mid-range of two appraisals from agents active in the area or the price set by a licensed valuer - whichever is the lesser. Any party requesting a licensed valuation shall be responsible for that cost.
Neither party has been able to locate a signed copy of this agreement. A search of the papers of the plaintiff has failed to yield a signed copy. The defendant says she too is unable to locate a signed copy of the agreement. The defendant says she saw the plaintiff sign the agreement and she signed it at or around the same time. Given that on a summary judgment application, the version of facts most favourable to the defendant must be accepted, I am prepared to accept a copy of this agreement was signed by both parties. This is not intended to be a finding of fact - rather it is an assumption which is made for the purposes of a summary judgment application, consistent with established principles.
Further, I am prepared to accept an agreement such as this would be enforceable. It is the defendant's position the agreement is a right of first refusal which does not create an interest in land. It is therefore not necessary for the defendant to establish the agreement was signed by both parties. The defendant says further, even if the agreement was not signed, it is enforceable because there has been part performance. It is not necessary for me to make any findings with respect to these matters. I will proceed on the basis the agreement is enforceable.
The difference between the parties relates to clause 5 of the agreement. It is the plaintiff's position that clause is meaningless. If that position is not accepted, it is said the clause amounts to an agreement to agree (as that description is used in Masters v Cameron (1954) 91 CLR 353) and as there has been no further agreement, the clause is of no consequence. The defendant says the meaning of the clause is clear. If that is not the case, the clause is ambiguous and at trial, extrinsic evidence may be admissible to explain the background facts and clarify the precise meaning of the clause. It is the defendant's position that if I was to determine the clause was ambiguous, leave to defend ought be granted. It is only if I conclude the clause is meaningless that summary judgment ought be entered for the plaintiff.
Turning then to the clause itself, the first sentence is clear and is not presently relevant. The second sentence has been activated - the plaintiff wants to sell the property. The sentence then says each party 'has first option' to buy the other's half interest. As counsel for the plaintiff pointed out, it is difficult to characterise the interest created by the clause as an 'option'. It is perhaps better characterised as a right of first refusal. Other than to note what appears to be a misdescription, nothing turns on the characterisation of the right conferred.
The third sentence deals with the price to be paid. That presumably is a reference to the price to be paid for the interest of the party wishing to sell. There is nothing in the clause which requires the prospective seller to give notice to the prospective purchaser of the prospective seller's intention to sell. An adequately drafted clause might for instance have said a prospective seller should give the prospective purchaser written notice of the intention to sell. That would then trigger a mechanism. To give effect to this clause, it would be necessary to imply that trigger mechanism. In fact, correspondence has passed between the plaintiff and the defendant (or at least between their respective solicitors) which makes it plain the plaintiff does wish to sell. So in practice, the lack of a trigger mechanism may not be relevant.
Once it is established one party wishes to sell, the sentence appears to deal with how the sale price will be reached. There appears to be two different mechanisms available. First, there is 'the average of the mid‑range of two appraisals from agents active in the area'. There is no mechanism in the clause for deciding how these two agents are selected. The phrase 'active in the area' is imprecise but perhaps can be given some meaning. If the parties were to agree on the two agents who would offer an appraisal, no difficulty would arise. But there is no mechanism in the clause for determining how, in the event of disagreement, this issue could be resolved. A clause such as this properly drafted might provide for the president of the Real Estate Institute of Western Australia to nominate two agents from a list provided by each of the parties. Given there is a dispute here for the clause to be operative, such a term would have to be implied by the court. There is no evidence the parties, prior to signing this agreement, turned their mind to this issue. In other words, no evidence of pre-contractual negotiations would resolve this question of which agents would be appointed.
A similar difficultly arises with respect to the valuer. There is no mechanism for selecting the valuer. Again, there is no evidence the parties considered this issue prior to signing the agreement. If the valuer was to be appointed by a third party, there is no mechanism which would allow for this to be done.
There are further difficulties with the clause. Assuming a value is set, there is no time limit within which the prospective purchaser must indicate whether she was prepared to pay the price as determined. Again, a properly drafted clause may have allowed a prospective purchaser 30 days to indicate an intention to purchase at a set price. That same clause may well have provided for a deposit to be paid at the time of accepting the sale price. There is nothing in the clause about settlement terms. Again, a properly drafted clause may have provided for settlement within 60 days of the date of acceptance. The clause is silent as to the discharge of any encumbrances registered on the title. Given any mortgagee would have to be paid out before transfer could be effected, it may be possible to imply that at least the mortgage would be discharged prior to settlement. But in this case, there are a number of other encumbrances on the title and it is by no means clear how these encumbrances would be dealt with at settlement.
In the circumstances, I am satisfied that this clause is so uncertain as to be of no force and effect. There are too many important matters omitted from the clause which could not be implied by the court. What would be required is for a trial judge to actually draft a clause which would have only a passing resemblance to the clause in its present form. Moreover, there is nothing to suggest there was prior negotiation which would explain the meaning of the clause. There is no evidence to suggest the parties turned their mind to the mechanics of how the option or pre‑emptive right would be exercised. There is then no purpose to be served in allowing this matter to go forward to trial. In short, there is no serious issue to be tried.
On that basis, I am satisfied there ought be judgment for the plaintiff. The terms of the judgment will allow the defendant to bid at auction of the property. The solicitors for the parties should discuss the form of orders and if no agreement can be reached, each party should submit a minute of proposed orders within seven days of the publication of these reasons. If no agreement can be reached with respect to costs, each party should file short submissions on that issue within seven days of the publication of these reasons.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MM
Associate
18 APRIL 2023