Liddiard v Avey

[1999] WASC 74

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   LIDDIARD & ANOR -v- AVEY [1999] WASC 74

CORAM:   MASTER BREDMEYER

HEARD:   3 JUNE 1999

DELIVERED          :   24 JUNE 1999

FILE NO/S:   CIV 1195 of 1999

BETWEEN:   KELVIN DEREK LIDDIARD

JACQUELINE VANESSA LIDDIARD
Plaintiffs

AND

STEPHEN DAVID GORDON AVEY
Defendant

Catchwords:

Costs - Costs of summary judgment application where leave was given to amend

Legislation:

Nil

Result:

Application allowed in part

Representation:

Counsel:

Plaintiffs:     Mr T R Stephenson

Defendant:     Mr M D Cuerden

Solicitors:

Plaintiffs:     Les Sephton

Defendant:     Fiocco Hopkins Nash

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

Nil

Case(s) also cited:

Nil

1. MASTER BREDMEYER:  This is a dispute over costs.  The plaintiffs brought an application for summary judgment on the whole of their claim and the defendant brought an application for summary judgment on part of his counter‑claim.  Both applications were scheduled to be heard by me at a special appointment on 3 June 1999.  Prior to that appointment each party conceded that the other's case had arguable merit and consented to the applications being dismissed.  As I have said the dispute is over costs.  The plaintiffs seek orders that costs of both applications be in the cause or reserved to the trial Judge.  The defendant seeks orders that costs of both applications up to 20 April 1999 be in the cause but as from 21 April 1999 the plaintiffs should pay the defendant's costs on an indemnity basis in any event. 

2. The costs order proposed by the plaintiffs is a common one.  The order proposed by the defendant is more unusual and I propose to consider it first.  The plaintiffs' claim against the defendant is for $23,575.81 plus interest and rates due under a mortgage.  The plaintiffs seek a money judgment failing which they seek an order that the defendant do give vacant possession of his property, Unit 1, 94A Tamar Street Palmyra.  The background to this plea taken from the statement of claim is that the plaintiffs, the defendant, and a Mr and Mrs Tye, ran a company Three Bills Pty Ltd ("the company") trading as Parcel Post.  The company borrowed $60,000 from BankWest.  The five named persons were guarantors of the company's debt and the plaintiffs and defendant each gave collateral mortgages over their respective residences.  Somehow Mr and Mrs Tye paid out their share of debt to the bank and ceased their involvement in the business.  The plaintiffs paid out the BankWest debt by payments totalling $23,275.81 and on 14 May 1998 took an assignment of the bank's mortgage.  They are thus seeking in this action to enforce the bank's mortgage rights against the defendant.

3. The defence and counter-claim covers 13 pages and raises a number of matters.  The defendant's summary judgment application relates to one only of these matters.  It seeks a declaration that the defendant is entitled to a contribution from the first named plaintiff of one half of any moneys which the defendant may have to pay to Fuji Xerox Australia Pty Ltd ("Fuji") less any money which the first named plaintiff may pay to Fuji in respect of its claim the subject of District Court action No 3902 of 1998.  The background to this claim, taken from the defence and counter-claim is as follows.  The company leased photocopiers from Fuji and by deeds of guarantee and indemnity dated 9 August 1995, Mr Liddiard and the defendant each guaranteed the company's lease payments to Fuji and agreed to indemnify Fuji against any loss it might suffer through non‑payment of rents etc.  In the District Court action mentioned, Fuji has sued Mr Liddiard and the defendant for $38,325 plus interest and costs said to be owing under the leases.

4. The plaintiffs' application for summary judgment is dated 16 March 1999 and an affidavit of Mr Liddiard sworn 15 March was filed in support.  On 13 April the defendant filed his application summary judgment on part of his counter-claim and an affidavit sworn on 12 April in opposition to the plaintiffs application and in support of his own.  That affidavit contains 16 pages of text and 36 pages of annexures.  The special appointment for the hearing of the summary judgment applications was scheduled to be heard on 27 April.  On 20 April Mr Cuerden, solicitor for the plaintiffs, and Mr Stephenson, of counsel for the defendant, spoke by telephone.  Mr Cuerden's record of that conversation, as recorded in a letter, is as follows:

   "Mr Stephenson enquired as to whether our client would agree to the special appointment in relation to your clients' application being adjourned to allow your clients to file further affidavit evidence in reply.  Although our client would like your clients' application to be dealt with as soon as possible, we confirm that our client consents to the listing on 27 April being vacated.

   We did suggest to Mr Stephenson that if you consider it necessary to file further affidavit evidence in reply, that in itself suggests that a triable issue is raised on the affidavits presently filed.  Mr Stephenson appeared to accept that, but stated that the application may be pursued for the purpose of seeking security by way of payment into court of the amount of your clients' claim.  Notwithstanding that there is clearly no reason for requiring such security as a condition of our client having leave to defend in this case, even if this were such a case, your clients' claim is secured by the mortgage which they hold over our client's property.

   The appropriate course is for your clients to discontinue their application with costs in the cause.  If your clients persist with the application, our client shall seek the costs of your clients' application after the time of the filing of the defence and counterclaim in any event.

   We confirm that our client otherwise intends to pursue his application for summary judgment against your clients.  We note that we have received no objection to the proposed settlement between our client and Fuji Xerox.  Mr Stephenson suggested that a copy of the agreement between Fuji Xerox and Three Bills Pty Ltd should be annexed to our client's affidavit.  Your clients are in possession of that agreement.  However, we are attempting to obtain a copy of that agreement to place before the court in the event that your clients fail to do that."

5. Part of the defendant's defence as pleaded and set out in the defendant's affidavit of 12 April was that on 27 March 1997 Mr Liddiard told the defendant that the company would use $19,000 cash which it had, to pay off its liability to BankWest.  The defendant acted on that representation to his detriment in that he agreed to sell his shares in the company to the plaintiffs for $25,000.  He said that the plaintiffs failed to use the cash to pay off the loan.  Instead they paid off the loan with their personal moneys and thereby obtained the benefit of the bank's mortgage against the defendant which would not have been the case if they had paid off the debt out of company moneys.  This raises an arguable defence and the plaintiffs lawyers have conceded that.  This estoppel defence was a matter raised for the first time in the defendant's affidavit so it was probably necessary for the plaintiffs to file an answering affidavit.  Their instructions were that the representation was not made and that the company did not have $19,000 or any similar sum in its account.  An affidavit deposing to these matters was probably necessary.

6. It was clear from the telephone conversation of the lawyers of 21 April quoted above that the defendant was proceeding on his summary judgment on the counter-claim.  The defendant's affidavit in support at par 52 to par 57 annexed the two deeds of guarantee and indemnity signed by Mr Liddiard and the defendant.  The affidavit also annexed a copy of the writ of summons in District Court action 3902 of 1998 and annexed correspondence between Fuji and the defendant whereby the defendant endeavoured to settle the action for a lesser sum but got no response from the plaintiff.  So in summary, it was necessary for the plaintiff to file an answering affidavit giving brief evidence to refute the defendant's estoppel defence to the plaintiffs claim, and setting out a defence to the defendant's counter-claim for an indemnity in relation to the Fuji photocopier leases.

7. Those two matters could have been set out briefly in an affidavit.  I say "briefly" because to resist a summary judgment application it is necessary to set out an arguable defence but not the defence in its complete form; it is necessary to give a statement of facts to show that it is arguable but not the facts which would be necessary to establish it at trial: Seaman 14.4.1.  Yet the answering affidavit of Mr Liddiard sworn 4 May 1999 consisted of 30 pages of text and 149 pages of annexures.  It appears to be a detailed statement of the plaintiffs case.  Paragraph 46 deals adequately with the defendant's estoppel defence.  It denies that the representation was made by Mr Liddiard that the company would pay off the BankWest loan.  It annexes two bank statements which show that the company never had any large sums in its account at that time.  More specifically it shows that on 27 March 1997 the company had $5749.32 in its account.  The affidavit in par 66 to par 73, which cover three and a half pages, deals with the Fuji matters.  It deposes to matters which arguably could amount to defences to the defendant's claim for contribution from the Liddiard's.  One of them being that no notice of demand from Fuji was ever served on him. 

8. I consider that par 1, par 46 and par 66 to par 73 of the plaintiffs affidavit of 4 May 1999 are directly relevant to the summary judgment applications.  I consider that the balance of the affidavit is not relevant and that no costs should be allowed on it in relation to the summary judgment applications.  This is not to deny that the plaintiffs may later recover costs for the whole of their affidavit.  It may be that the plaintiffs can ask for directions that this large affidavit stand as the first plaintiff's witness statement and that he be cross-examined on it thus saving some time at the trial.  But I do not consider that the whole of this affidavit should attract costs in relation to the summary judgment applications.  Likewise with the plaintiffs' submissions of May 1999 which are of eight pages, six of which deal with the plaintiffs summary judgment application and two of which are in response to the defendant's application.  The first six pages were not necessary.  They relate to the plaintiffs' application.  It should have been obvious from the defendant's affidavit of 12 April that he had raised an arguable defence.  The two pages of resistance to the defendant's application were necessary.  The order on each summary judgment application will be:

   1.Application dismissed.

   2.Costs of the application are in the cause. 

   Note the plaintiffs' costs are to include par 1, par 46 and par 66 to par 73 only of Mr Liddiard's affidavit of 4 May 1999 and pages 7 and 8 only of the plaintiffs submissions of May 1999.