Lombardo v Werbeloff
[2012] VSC 544
•14 November 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
No. 01533 of 2011
| FRANCIS SAMUEL LOMBARDO | First Appellant |
| and | |
| ROSEMARY LOMBARDO | Second Appellant |
| v | |
| BEN NEIL WERBELOFF | First Respondent |
| and | |
| KATHLEEN MARIE BILSBOROUGH | Second Respondent |
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JUDGE: | McMILLAN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30 May 2012 | |
DATE OF JUDGMENT: | 14 November 2012 | |
CASE MAY BE CITED AS: | Lombardo v Werbeloff | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 544 | |
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PRACTICE AND PROCEDURE – Appeal from summary dismissal – Rule 77.06 of the Supreme Court (General Civil Procedure) Rules 2005 – Whether application for summary dismissal should have been allowed – Rule 58.10(8) of the Supreme Court (General Civil Procedure) Rules 2005.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr J. Arthur | Voitin Lawyers |
| For the Respondents | Mr J. Nixon | Taylor Splatt & Partners |
HER HONOUR:
Introduction
This is an appeal from a decision of Daly AsJ made on 3 May 2012 to grant the respondents’ application for summary judgment against the appellants. The summary judgment dismissed the appellants’ appeal brought pursuant to s 109 of the Magistrates’ Court Act 1989 from a decision of the Magistrates’ Court.[1]
[1]Ben Neil Werbeloff v Francis Samuel Lombardo (Unreported, Magistrates’ Court of Victoria, Proceeding no Y03689527, Magistrate R Crisp, 3 March 2011).
Background
The Magistrates’ Court proceeding concerned a contractual dispute between the appellants as purchasers and the respondents as vendors of the sale of a portion of the respondents’ land, which was consequently subdivided as part of a ‘dual occupancy’ development. The land that was the subject of the sale was a lot in a proposed plan of subdivision that had not yet been approved and registered, and was sold pursuant to ss 9AA–9AF of the Sale of Land Act 1962.
It was alleged by the respondents that the appellants breached special condition 9.10 of the contract dated 21 December 2003 (‘the contract’) which required, among other things, certain works to be undertaken and paid for by the appellants. Special condition 9.10 provided:
All costs associated with the below items are for the purchaser [the appellants]
…
Landscaping front and back garden of existing residence to owner’s requirements. This includes construction of new front wall with wrought iron insert fence [sic], gate and automatic panel lift garage door as well as painting all exterior unpainted surfaces.[2]
[2]Note: the word ‘insert’ appears in the contract as signed by the parties.
The respondents brought a claim for damages in the amount of $100,000 in the Magistrates’ Court for breach, by the appellants, of special condition 9.10, alleging that the appellants had paid the balance of the purchase price due under the contract but had failed to complete the landscaping and other works referred to in special condition 9.10 of the contract by the date fixed for settlement.
In their defence, the appellants denied that there was any breach of the contract and asserted that no works or extra requirements were outstanding under the contract.
At the hearing on 3 March 2011,[3] the appellants were not represented by counsel or solicitors. The appellants initially appeared before the Magistrate before vacating the court room. The appellants did not return upon the hearing of the matter. The Magistrate found in favour of the respondents and ordered the appellants to pay the respondents the sum of $52,731 on the claim, interest of $6,671.56 and costs of $14,553.60 (‘judgment debt’).
[3]The hearing of the matter was adjourned twice on the request of the appellants before the matter was finally heard by Magistrate Crisp.
The appellants appealed the Magistrate’s decision by notice of appeal filed 4 April 2011. The grounds of appeal were that the appellants were denied natural justice and procedural fairness and a fair hearing, on the basis that the Magistrate:
7.1failed to allow the brother of the first appellant to appear on behalf of the appellants;
7.2failed to allow an adjournment, and continued the hearing in the absence of the appellants;
7.3found on the evidence that the respondents had proven each of the elements of their claim for breach of contract;
7.4failed to provide adequate reasons for his decision; and
7.5failed to consider properly, or at all, whether the appellants had a defence of merger, or other defence based on the matters alleged in their pleadings.
The appellants asserted a number of defences to the claim made by the respondents, either in defences filed in the Magistrates’ Court proceeding or in affidavits made in the proceeding in this Court.
On 26 April 2012, the respondents’ application filed 5 April 2012 seeking summary dismissal of the appeal was heard by Daly AsJ. The application was made on the grounds that the appellants’ claim had no real prospects of success pursuant to s 62 of the Civil Procedure Act 2010 (‘the CPA’). Alternatively, the respondents’ sought an order dismissing the appeal pursuant to r 58.10(8) of the Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’).[4]
[4]Note: the respondents referred to r 58.10(8) of the Rules in their submissions to Daly AsJ dated 25 April 2012.
Section 62 of the CPA provides:
62 Defendant may apply for summary judgment in proceeding
A defendant in a civil proceeding may apply to the Court for summary judgment in the proceeding on the ground that a plaintiff’s claim or part of that claim has no real prospect of success.
Rule 58.10(8) of the Rules provides:
58.10 Directions
…
(8) The Associate Judge may dismiss the appeal if satisfied that —
(a) the notice of appeal does not identify sufficiently or at all a question of law on which the appeal may be brought;
(b) the appellant does not have an arguable case on appeal or to refuse leave would impose no substantial injustice; or
(c) the appeal is frivolous, vexatious or otherwise an abuse of the process of the Court.
While the respondents did not accept that the Magistrate breached the rules of natural justice, the respondents’ application proceeded on the basis that, even if the Magistrate did breach the rules of natural justice, the appeal could not succeed as the appellants did not have any arguable defence and the defences relied on by the appellants were untenable and hopeless.
On 12 May 2012, at the return of the respondents’ summons seeking summary dismissal, Daly AsJ made orders dismissing the appeal pursuant to r 58.10(8)(b), and ordered that the appellants pay the respondents’ costs of the appeal, including reserved costs, and the costs of the summons. In the ‘Reasons for Decision’ dated 3 May 2012, her Honour held:
the appeal is bound to fail, notwithstanding that reaching that conclusion has involved some analysis of evidence and documents. In my view, proceeding to a full hearing on the issue of whether the defendants were afforded procedural fairness by the Magistrate, in circumstances where the appellants were afforded procedural fairness by the Magistrate, in circumstances where the appellants have no real prospects of success in defending the respondents’ claim in a re-hearing, is not a just, efficient, timely or cost effective resolution of the dispute, noting that the latter consideration assumes more importance when the parties to the proceeding are individuals rather than commercial entities.[5]
[5]See Francis Samuel Lombardo v Ben Neil Werebloff (Reasons for Decision, Daly AsJ, 3 May 2012) [38].
The appellants’ appeal from the decision of Daly AsJ is brought pursuant to r 77.06 of the Rules, which provides for decisions of Associate Justices to be appealed to a Judge of this Court. Appeals of this kind proceed by way of a hearing de novo, on the basis of the evidence put before the Associate Judge and, by special leave of the Court, on any evidence not used or put before the Associate Judge.[6]
[6]The Rules, r 76.06(7).
Questions for Determination
The questions for determination in this case are whether:
15.1Daly AsJ was correct in allowing the respondents to bring an application for summary dismissal; and
15.2the appeal from the Magistrate should be summarily dismissed on the basis that remitting this matter to the Magistrates’ Court would be futile, as the appellants’ defences to the respondents’ claim are hopeless.
Whether the Application for Summary Judgment Should Have Been Allowed
The appellants submitted that the respondents’ application for summary judgment ought not to have been granted as the application was based on inadmissible material; it was made too late; and, it was misconceived, with no proper basis.
Admissibility of the Material
In making the application for summary dismissal, two affidavits of Mr Ian Charles Isaacs sworn 4 April 2012 were relied upon by the respondents. The first affidavit exhibited correspondence between the parties from 8 February to 2 April 2012. The second affidavit exhibited the conveyancing file of Mr Crump (‘the Crump file’), the solicitor who acted for the respondents on the sale of the property, and the Bayside City Council file (‘the Council file’) in relation to the subdivision of the respondents’ property. The respondents also relied upon a plan showing the proposed layout of the property and a comparison between it and the plan of subdivision as registered.
The respondents submitted that this further evidence, which was located by them in early 2012, was not discovered by the parties, as it should have been. As a consequence, the further evidence was not before his Honour Magistrate Crisp when he heard and determined the matter. The respondents contend that the further evidence puts beyond doubt that the defences[7] relied upon by the appellants have no prospects of success.[8] The respondents also contend that they are entitled to support the order of Daly AsJ on any ground that was open to them at the stage when the order was made, whether or not the ground was raised before Daly AsJ.[9]
[7]See paragraph 30 below.
[8]See paragraphs 28–67 below.
[9]Referring generally to the commentary in respect of r 58.06 of the Rules in LexisNexis Butterworths, Civil Procedure: Victoria, vol 1 (at Service 262) [58.06.180].
The appellants submitted that the power of the court to admit fresh evidence on an appeal under s 109 of the Magistrates’ Court Act 1989 is very limited and that the material put before Daly AsJ does not fall within that limited category. The appellants also objected to the further evidence being admitted on the basis that it was inadmissible because:
19.1 it was not in evidence before the learned Magistrate; and
19.2 it is hearsay and, even if relevant on appeal, it would have to be exhibited and deposed to, and explained in evidence by those who had the requisite knowledge of the matters contained in the further material.
In my view, the further evidence sought to be relied upon by the respondents is important as it strongly supports, for the reasons set out below, the orders made by Magistrate Crisp. It is reasonable and appropriate to admit the further evidence because this evidence was not discovered at the time that the matter was before the learned Magistrate and it has now become available through the respondents’ research. It is important evidence going to the merits of the claim.[10]
[10]Note: The former r 58.12 of the Rules limited affidavit evidence that could be heard on appeal. That rule is not reproduced.
Further, if this proceeding were sent back to a Magistrate, then the further evidence would be adduced without objection and the same result would be made in favour of the respondents. In this regard, I also take into account the obligations of the Court to give effect to the overarching purpose of s 7 of the CPA, being the just, efficient, timely and cost effective resolution of the real issues in dispute in the exercise of its powers or in the interpretation of those powers.
Application Was Made Too Late
The appellants submitted that the application for summary dismissal was made very late in the proceeding, shortly before the scheduled hearing of the appeal. If the application were to be made, it should have been made prior to the hearing when directions for the appeal were made approximately one year earlier, on 12 May 2011, which was the time that the Court’s power to summarily dismiss an appeal was engaged, that is, when Daly AsJ made orders by consent for the appeal. It was submitted that the Court had no jurisdiction to revisit the issue and make the orders sought by the respondents. In making this submission, the respondents relied on para 3.2 of the Supreme Court of Victoria, Practice Note No 4 of 2009 — Judicial Review and Appeals List, 2 November 2009, which provides:
The first hearing in a proceeding in the List will generally be listed before one of the Associate Judges-in-Charge. … The first hearing will usually include the hearing of any application for leave to appeal if required, and of any application for summary dismissal. Interlocutory directions will be given as required. Usually the proceeding will then be referred forthwith to the Listing Associate Justice in Court 4 for the fixing of a trial date.[11]
[11]Supreme Court of Victoria, Practice Note No 4 of 2009 — Judicial Review and Appeals List, 2 November 2009, para 3.2 (emphasis added).
In making the application for summary dismissal, the respondents relied on the further evidence referred to in the two affidavits of Mr Ian Isaacs, sworn 4 April 2012, referred to above. As explained in the affidavits, this further important evidence was only revealed to the respondents in early 2012 and was the reason for the lateness of the application for summary dismissal. Because of the significance of the further evidence, as set out below,[12] I reject this submission by the appellants and consider the evidence to be a significant argument in the respondents’ favour.
[12]See paragraphs 37–55 below.
In my view, the inherent jurisdiction of the Court to manage its own processes is very broad and the power to grant summary judgment will not be extinguished simply because directions have already been made for the conduct of the matter.
Application Had No Proper Basis
The appellants submitted that s 62 of the CPA does not provide a proper basis for a summary judgment of the appeal because s 62 relates to ‘claims’ and not ‘appeals’. As cited above, s 62 refers to the ‘plaintiff’s claim or part of that claim’ having ‘no real prospect of success’.[13]
[13]Emphasis added.
The appellants submitted that there is no jurisdiction to grant summary judgment pursuant to s 62 of the CPA, as the appeal does not fall within the definition of a ‘claim’ under that provision. The appellants submitted that ‘claim’ is defined in the Encyclopaedic Australian Legal Dictionary as ‘[t]he assertion of a right to property or to a remedy; a cause of action; the grounds in pleadings upon which relief is claimed’.[14] The appellants submitted that the proper power for summary dismissal of the appeal is under r 58.10(8) of the Rules.
[14]Encyclopaedic Australian Legal Dictionary, (LexisNexis Butterworths, 2011). In support of this definition, the Encyclopaedic Australian Legal Dictionary cites Read v Brown (1888) 22 QBD 128.
Because I consider that the Court has the power to summarily dismiss the appeal under r 58.10(8), and that Daly AsJ did so under this rule,[15] it is unnecessary for me to make a determination whether the application can be made pursuant to s 62 of the CPA.
[15]Francis Samuel Lombardo v Ben Neil Werebloff (Reasons for Decision, Daly AsJ, 3 May 2012) [29]–[30].
Whether the Appeal Should Be Summarily Dismissed
The respondents’ application for summary judgment has proceeded on the basis that, putting the appellants’ case at its highest, even if there was a breach of the rules of natural justice, any re-hearing would be futile because the overwhelming evidence showed that the appellants have no arguable defence.
The appellants filed a notice of defence dated 2 February 2010 and an amended notice of defence dated 7 June 2010, neither of which was drafted by a lawyer. The appellants also produced a document wrongly titled ‘Request for further and better particulars of the defendants’ amended defence’ dated 17 February 2011, which purported to be a further amended defence. It is not clear whether that document was filed in the Magistrates’ Court proceedings. In addition, should the matter be remitted to the Magistrates’ Court, the appellants foreshadowed further defences in their letter dated 2 April 2012 and exhibited to the affidavit of Ian Charles Isaacs, sworn 4 April 2012.
Putting the appellants’ defence at its highest, and bearing in mind that, aside from the letter dated 2 April 2012, the defences were not drafted by a person with legal training, the appellants rely on the following defences:
30.1that the limitation period for the respondents’ claim pursuant to the Limitation of Actions Act 1958 had expired (‘the Limitation Defence’);
30.2that the contract had expired and was not renewed by the respondents (‘the Expiry Defence’);
30.3that the obligations in the contract had merged upon settlement of the contract on 28 January 2005, the date on which the full contract price was paid, and any outstanding obligations expired at that time (‘the Merger Defence’);
30.4that the parties had agreed to a variation of the contract, whereby the appellants would provide additional land to the respondents in the subdivision in exchange for a waiver of any outstanding special conditions (‘the Variation Defence’);
30.5that the respondents had waived any entitlement to rely on the special conditions, as they had not raised the issue of any outstanding special conditions since settlement of the contract and that by reason of this delay, the respondents were estopped from relying on the special conditions (‘the Waiver Defence’); and
30.6that the contract, or at least special condition 9.10 is uncertain or unenforceable, as it is not possible for a Court to enforce such a term as, in the event of a disagreement, ‘who can possibly set what landscaping should be carried out—there is no standard at all’.[16] In addition, there is no timeframe for compliance with the condition (‘the Uncertain and Unenforceable Defence’).[17]
[16]Paragraph 48 of the appellants’ submissions dated 29 May 2012.
[17]Ibid.
The respondents submitted that each of these defences is ‘fanciful and untenable’, and that any order for a new trial would be futile, as the new trial would not have a different outcome from that found by the learned Magistrate. The respondents supported this submission by highlighting the significant discrepancies between the affidavit material filed on behalf of the appellants and the contemporaneous records contained in the Crump file and the Council file.
The Limitation Defence
The respondents submitted that the Limitation Defence is hopeless because the proceedings were filed within six years of the date of the contract and clearly within six years of the date of the alleged breach of the special condition in the contract, which was the date that the cause of action accrued.
The statutory limitation period for bringing a claim for breach of contract is six years from the date the cause of action accrued.[18] The contract was entered into on 21 December 2003. The Magistrates’ Court proceedings were filed on 17 December 2009. In my view, the Limitation Defence must fail because the proceedings were filed before the expiration of the limitation period.
[18]Limitation of Actions Act 1958 s 5(1)(a).
The Expiry Defence
The Expiry Defence relied on special condition 7 of the contract, which provides:
The Purchasers [appellants] shall at their own cost and expense procure the approval of the [plan of subdivision] … and shall take all necessary steps to obtain approval of the said plan …
If the Plan is not approved within six months after the date of this Contract the Vendor [respondents] may after the expiration of that period of six months but before the Plan is approved rescind this Contract …
The respondents submitted that the terms of special condition 7 provided them with a right to rescind the contract in the event that the subdivision was not approved within six months and they elected not to do so.
In my view, there are no grounds to support these submissions by the appellants. Special condition 7 does not and cannot constitute an expiry date as alleged by the appellants. Accordingly, I conclude that the Expiry Defence is hopeless.
The Merger Defence
In his affidavit sworn 10 April 2011, Mr John Lombardo deposed:
The contract contained special conditions … While these were negotiated by me with the First Respondent … it was intended by all concerned that the special conditions … would all need to be complied with by settlement.[19]
[19]At paragraph 26 of the affidavit.
The respondents submitted that, taking the appellants’ position at its highest, the Merger Defence ‘presumably is that the obligation on the [a]ppellants to undertake works or pay for works undertaken at special condition 9.10 of the contract merged at settlement of the contract’.
The respondents submitted that the proper construction of the contract does not support the argument that the obligations merged upon settlement. In any event, the respondents submitted that the Merger Defence failed in light of the correspondence on the Crump file.
The Crump file contains a letter dated 25 January 2005 from Mr Crump, acting on behalf of the respondents, to Mr Dorevitch, acting on behalf of the appellants. In this letter, Mr Crump requested ‘confirmation in writing that any outstanding items referred to in the Special Conditions will not merge on settlement’.
Mr Dorevitch responded the same day and confirmed his clients’, the appellants, instructions that ‘any outstanding items referred to in Special Conditions will not merge on settlement’.
The appellants submitted that the reference to ‘outstanding items’ in the correspondence supported the Merger Defence and that the special conditions necessary for the subdivision itself were excluded from the alleged agreement to vary the contract.[20] No positive evidence was put forward by the appellants that the obligations contained in the special conditions merged upon settlement.
[20]See the Variation Defence below.
In my view, the correspondence referred to above provides clear and contemporaneous evidence that it was not the parties’ intention that their obligations under the contract would merge upon settlement. The matters referred to by the appellants in support of the Merger Defence do not establish that any obligations merged upon settlement.
Accordingly, I conclude that the Merger Defence is hopeless.
The Variation Defence
The Variation Defence is set out in the affidavit of Mr John Lombardo sworn 10 April 2011, in which he deposed:
In or about mid-May, 2004 I negotiated a variation to the contract with the First Respondent whereby in consideration of the Respondents as vendors getting extra land under the subdivision and us allowing the early release of $10,000 of the deposit, my brother and his wife would not be obliged to comply with the additional special conditions, save for that which had already been completed or was necessary for the subdivision itself.[21]
[21]At paragraph 28 of the affidavit.
The respondents submitted that the Variation Defence was inconsistent with the contemporaneous evidence on the Council file. Although the respondents agreed that the dimensions of the parcels of land in the plan of subdivision ultimately registered differed from the plan of subdivision contained in the contract, they submitted that the increased size of their portion of the subdivision was due to requirements imposed by the Council to secure approval for the subdivision, and not any negotiated variation to the contract as alleged by the appellants.
In support of this submission, the respondents relied on a letter dated 22 April 2004 from the Council to Thomas Anderson Design, retained by the appellants to assist in procuring Council approval of the subdivision. That letter referred to the appellants’ planning application and stated:
The proposal does not appear to comply with the Planning Scheme in terms of Standard B18: Walls on boundaries which states that a new wall or carport constructed on a side or rear boundary of a lot should not abut the boundary for a length of more than 10 metres plus 25% of the remaining length of the boundary of an adjoining lot.
On 3 May 2004, Thomas Anderson Design responded to the Council and enclosed a revised proposed plan of subdivision. The respondents submitted that this chain of correspondence demonstrated that the amendments were clearly a consequence of the Council’s requirements, rather than any agreement between the parties.
The appellants submitted that the Council letter and the response from Thomas Anderson Design are ‘not to the point’, as they do not relate to the reduction of the area of the appellants’ land, but rather to changing the set-backs between the buildings and the boundaries. In my view, the reduction in the appellants’ portion of the land was a direct corollary of the increased set-backs required by the Council and the correspondence referred to is very much to the point.
The respondents also submitted that the Variation Defence was inconsistent with evidence on the Crump file in that correspondence on the Crump file was consistent with the early release of the deposit being consideration for the respondents’ granting the appellants an extension of time to register the plan. The respondents referred to a letter dated 26 May 2004, in which Mr Crump, for the respondents, wrote to Mr Dorevetich, for the appellants, seeking confirmation:
that the parties have mutually agreed to extend the date in special condition 7 of the contract to 31 July 2004 and on this basis, we request your return confirmation that it is in order for the sum of $10,000 to be released to our clients from monies invested.
As referred to above, special condition 7 required the appellants to procure approval of the plan of subdivision within six months of the date of the contract.
The respondents also referred to a further letter from Mr Dorevitch to Mr Crump dated 27 May 2004, which stated:
The purchasers [the appellants] have confirmed with my office that they agree to the sum of $10,000.00 being part of the deposit you are holding to be released to the vendor [the respondents].
The release of the deposit is given on the strict understanding that the vendor has granted an extension of the date in special condition 7 of the contract to the 31/7/2004 and if the plan is not approved by the aforementioned date the vendor will consider a further extension at their discretion.
The respondents submitted that, if the parties had agreed to a variation in the terms alleged by the appellants, it would have been documented in this correspondence. Further, this correspondence was exchanged more than two weeks after Thomas Anderson Design submitted the amended plan of subdivision to the Council, which is inconsistent with the appellants’ submission that the increased dimensions of the respondents’ land was tied to the release of the deposit, or to the waiver of special condition 9.10 of the contract.
In my view, there is no evidence to support the appellants’ contention that the parties agreed to a variation of the contract whereby the appellants were released from their obligations to fulfil the outstanding special conditions. I am satisfied on the basis of the evidence that the increased dimensions of the respondents’ portion of the subdivision was solely due to the Council’s requirements. I am further satisfied that the early release of the deposit was entirely unrelated to the alleged variation and does not support the respondents’ contention.
Accordingly, I find that the Variation Defence is hopeless.
The Waiver Defence
The Waiver Defence is not articulated fully in any of the appellants’ submissions. Put at its highest, it appears to be that the appellants deny receiving any request to carry out the outstanding works after settlement of the contract on 27 January 2005 and that, as a result of the effluxion of time, the respondents waived their right to enforce special condition 9.10.
A number of letters from the first respondent to the appellants, care of Mr John Lombardo, were annexed to affidavits filed in this proceeding. These letters included:
57.1 a letter dated 12 May 2005, in which the respondents noted that ‘[t]he matters of painting and landscaping are still outstanding on the contract’. The respondents referred specifically to special condition 9.10 and stated that the works were incomplete. The letter noted:
We now rely on our contract with you to complete all works as per [c]lause 10 of the Special Conditions, and in particular note that it is to owners’ requirements.[22]
[22]Emphasis in original.
57.2 a letter dated 22 June 2006, which referred to a telephone conversation between the parties and noted a number of the respondents’ requirements with regards landscaping and works, including:
1.Jason Davidson of Green Garden Art prepared Landscape Plan Revision B dated 8/04 for both our properties – see attached together with copy memo [sic] faxed to us from Jason dated 25.08.04. …
We require amendments as per attached plant schedule [sic] for our property.
In his affidavit of 10 April 2011, Mr John Lombardo deposed that he never received any demand that the appellants comply with the additional special conditions before these proceedings were issued.[23] He did not refer in his affidavit to the telephone discussion referred to in the letter dated 22 June 2006.
[23]Paragraph 31 of the affidavit.
I am not in a position to determine whether this correspondence was in fact sent or received, as I have not heard any evidence in chief or cross-examination of the relevant witnesses. Nevertheless, in my view, the principles relating to estoppel make it unnecessary for me to make a final determination on this factual point.
The Waiver Defence relies on the respondents’ failure to pursue compliance with special condition 9.10 of the contract as conduct amounting to a waiver of that condition. This ‘waiver’ would operate in the sense that the respondents would now be estopped from pursuing the appellants in relation to the alleged breach.
In order to establish that special condition 9.10 has been waived in this manner, it must be shown that:
61.1the appellants assumed that the respondents did not intend to enforce special condition 9.10;
61.2the respondents induced the appellants to adopt that assumption;
61.3the appellants acted or abstained from acting in reliance on the assumption;
61.4the respondents knew or intended the appellants to do so;
61.5the respondents’ action or inaction will occasion detriment if the assumption is not fulfilled; and
61.6the respondents have failed to act to avoid that detriment, whether by fulfilling the assumption or otherwise. [24]
[24]Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 428–9 (Brennan J).
In the circumstances of this case, it is not clear that the evidence would support the Waiver Defence. There is no evidence that the respondents intended or assumed that the appellants would believe special condition 9.10 was not being enforced. Indeed, whether or not the letters dated 12 May 2005 and 22 June 2006 were sent or received, these letters provide evidence of the respondents’ contemporaneous state of mind and indicate that the respondents did not intend to induce the appellants to adopt the assumption that special condition 9.10 would not be enforced.
Further, there is no evidence that the appellants acted on or abstained from acting in relation to the asserted assumption. Although it might be said that their failure to comply with special condition 9.10 satisfies this element of the test, it is not adequate for a party to rely on their own failures to comply with the terms of the contract to establish that those obligations have been waived.
Finally, it is not clear what detriment the appellants will suffer if the respondents enforce special condition 9.10, other than being compelled to satisfy the condition.
Accordingly, I consider that the Waiver Defence is also hopeless.
The Uncertain and Unenforceable Defence
The appellants only provided brief submissions in respect of the Uncertain and Unenforceable Defence. The appellants initially submitted that the lack of a timeframe for compliance with special condition 9.10 made this condition uncertain; however, counsel for the appellants accepted upon appeal from the decision of Daly AsJ that the Court would imply a term that compliance with the condition ought to be done within a reasonable time. The appellants also submitted that there is a question of law as to whether a Court could enforce special condition 9.10, as ‘there is no standard at all’ as to the landscaping in respect of the front and back garden. This is not accurate. Special condition 9.10 provides that the landscaping includes ‘construction of a new front wall with wrought iron … fence, gate and automatic panel lift garage door as well as painting all exterior unpainted surfaces’. In my view, this condition is sufficiently certain, so as to be enforceable.
Accordingly, I find that the Uncertain and Unenforceable Defence is hopeless.
Arguments as to Quantum
The appellants submitted that, even if their defences were hopeless, they would contest the quantum of the order.
His Honour Magistrate Crisp awarded damages in the amount of $52,731 based on quotations obtained by the respondents, which were supported by expert evidence. No evidence was before the Court setting out the basis on which the appellants would seek to contest the quantum of the order. In those circumstances, in my view, the appellants do not have any basis upon which to dispute the quantum of the order.
Accordingly, this submission is not a basis upon which I ought to refuse the respondents’ application for summary judgment.
Were the Appellants Denied Natural Justice?
The first basis on which the appellants sought to resist the application was that the Magistrate made numerous errors in the handling of the proceeding, which, to summarise the appellants’ submissions, resulted in the appellants’ being denied procedural fairness. Those errors are detailed in the notice of appeal and the affidavit material filed in support of the appeals. In summary, the appellants submitted that they were denied the right to participate in the proceedings and defend the respondents’ claim against them and that this constituted a breach of the rules of natural justice.
The appellants submitted that ‘the denial of natural justice deprived [the appellants] of the possibility of a successful outcome’,[25] and that there was a possibility of a successful outcome if the matter were remitted to the Magistrates’ Court.
[25]Stead v State Government Insurance Commission (1986) 161 CLR 141, 147.
The appellants also submitted that the material relied upon by the respondents in support of the application for summary judgment, namely, the Crump file and the Council file, does not establish that the appellants’ defences are futile and, therefore, the Court should not be satisfied that the denial of natural justice made no difference to the Magistrate’s decision.
The respondents submitted that it is unlikely that the appellants will establish a denial of natural justice. The Magistrates’ Court adjourned the hearing originally set down for 16 August 2010 to 26 October 2010. The Magistrate then allowed a second adjournment request and re-fixed the hearing for 3 March 2011 on the condition that no further adjournments would be granted by consent and that any further adjournment on medical grounds was required to be supported by viva voce evidence from the relevant doctor. On 3 March 2011, for various reasons, the appellants vacated the court room and the hearing was adjourned.[26] On the resumption of the hearing, the appellants did not attend and the hearing proceeded in the absence of the appellants.[27]
[26]Transcript of Proceedings, Lombardo v Werbeloff (Supreme Court of Victoria, McMillan J, 30 May 2012) 5–8.
[27]Ibid.
In any case, the respondents submitted that a contravention of the rules of natural justice does not automatically entitle the aggrieved party to a new trial, if the circumstances are such that the outcome would not change.[28] The respondents submitted that, assuming a denial of natural justice was established by the appellants, an order for a new trial would be futile as it would inevitably lead to the same order as originally made by Magistrate Crisp for the reason that all of the defences relied on by the appellants were hopeless and untenable.
[28]Ibid 145. See also Dona Homes (Vic) Pty Ltd v Stevens [2005] VSC 499 (21 December 2005) [4] (Habersberger J).
In my view, as I have concluded that the defences relied on by the appellants are hopeless, it unnecessary for me to make any findings in relation to the learned Magistrate’s conduct in this proceeding. Regardless of whether there has been a breach of the rules of procedural fairness in this case, a rehearing would not change the outcome in this matter. In these circumstances, the appellants were not deprived of the ‘possibility of a successful outcome’.[29]
[29]Stead v State Government Insurance Commission (1986) 161 CLR 141, 147.
Payment of the Judgment Debt
The appellants have sought to resist paying the judgment debt pending final resolution of this matter or any re-hearing. No submissions were made by the appellants on this point at the hearing before me.
As I have determined to dismiss the appeal, it is not necessary to consider whether the judgment debt should be stayed pending a hearing. There is no basis for the appellants to continue to resist paying the judgment debt.
Conclusion
For the reasons set out above, I order that the respondents’ application for summary judgment be granted and the appellants’ appeal be dismissed.
I will hear the parties as to the form of order and as to costs.
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