LOWMOND Pty Ltd v Town of East Fremantle
[2007] WASC 67
•28 MARCH 2007
LOWMOND PTY LTD -v- TOWN OF EAST FREMANTLE & ANOR [2007] WASC 67
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 67 | |
| Case No: | CIV:1005/2003 | 13 MARCH 2007 | |
| Coram: | MASTER SANDERSON | 28/03/07 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Extension of time refused | ||
| B | |||
| PDF Version |
| Parties: | LOWMOND PTY LTD TOWN OF EAST FREMANTLE WESTERN AUSTRALIAN PLANNING COMMISSION |
Catchwords: | Practice and procedure Application for extension of time to apply to strike out statement of claim after long delay Turns on own facts |
Legislation: | Nil |
Case References: | Foran v Wight (1989) 168 CLR 385 State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
TOWN OF EAST FREMANTLE
First Defendant
WESTERN AUSTRALIAN PLANNING COMMISSION
Second Defendant
Catchwords:
Practice and procedure - Application for extension of time to apply to strike out statement of claim after long delay - Turns on own facts
Legislation:
Nil
Result:
Extension of time refused
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr J A Thomson
First Defendant : No appearance
Second Defendant : Mr G T W Tannin SC & Ms M J Paterson
Solicitors:
Plaintiff : Tottle Partners
First Defendant : No appearance
Second Defendant : State Solicitor for Western Australia
Case(s) referred to in judgment(s):
Foran v Wight (1989) 168 CLR 385
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161
(Page 3)
1 MASTER SANDERSON: By a chamber summons filed 15 December 2006, the second defendant sought, relevantly, three orders. First, an extension of time to bring an application to strike out the plaintiff's statement of claim. Second, an order that the statement of claim be struck out, and third, judgment against the plaintiff. The plaintiff opposed the application in its entirety. It is convenient first to deal with the application for an extension of time.
2 Under O 20 r 19(3)(a), an application to strike out a pleading must be brought within 21 days of the service of any pleading. It was common ground in this case that the second defendant was over two years out of time in making this application. Some explanation for the delay was provided by the second defendant. The State Solicitor's Office took over conduct of these proceedings on behalf of the second defendant in May 2006. It would appear that the second defendant's previous solicitors had not considered (or perhaps had not thought it appropriate) to raise a defence based on delay or the Limitation Act 1935 (WA). Hence, they had not made an application to strike out the plaintiff's statement of claim prior to their being relieved of the file.
3 Between 15 May 2006 and 22 June 2006, the parties were negotiating in relation to the basis upon which the plaintiff would remain in certain premises the subject of this application pending resolution of these proceedings. These negotiations culminated in the parties entering into a Deed of Interim Arrangement on 22 June 2006. It is the second defendant's position that it would have been inappropriate to bring strike out proceedings during this period. Further, the second defendant notes that early drafts of the deed provided to the plaintiff's solicitors noted that the second defendant proposed to plead in its defence that the plaintiff's claim was time-barred.
4 On 26 June 2006, the second defendant's solicitors wrote to the plaintiff's solicitors enclosing a minute of proposed request for further and better particulars of the statement of claim. The letter asked whether the plaintiff would be prepared to provide answers to the requests. The plaintiff declined to answer the request. An application was made by the second defendant on 7 September 2006 seeking to compel the plaintiff to provide answers. On 8 December 2006, I dismissed the second defendant's application. It is the second defendant's position that it was appropriate for them to wait until the question of particulars was resolved before bringing this strike out application.
(Page 4)
5 I will have more to say about the basis of the second defendant's application below. However, for present purposes, it is enough if I say that it is the second defendant's position that the plaintiff's action is time-barred and accordingly cannot succeed. Counsel for the second defendant accepted that this being a "limitation defence", it had to be pleaded. In other words, there was no question of this being an issue of jurisdiction. When and only when the issue of limitation was raised did it become a matter for consideration by the Court.
6 There is no doubt that it is open to the Court to extend the time within which to bring an application to strike out. Each case must depend upon its circumstances. But two points can be made. First, a time limit such as this is a rule of practice. It is not a rule of substantive law. It therefore ought always to be borne in mind that the ultimate aim of the Court is to attain justice between the parties and no principle of case management, whether it be embodied in the rules or otherwise, should be allowed to supplant that aim. That is the clear message of State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 (at 154). Second, the granting of an extension of time could be justified when it is established that the interests of justice require an extension. For instance, if it were established that the matters raised by the second defendant were so compelling that the plaintiff had no prospect of success, then the extension might be granted: see Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161 per Martin CJ at 19. Of course, the force of the strike out application is one factor to be taken into account along with factors such as the length of the delay, the reason for the delay and any other relevant matter.
7 In this case I would not be prepared to grant an extension of time. I have reached that conclusion for three main reasons. First, there is the length of the delay. To make an application such as this two years after the time has expired, is unreasonable. It is just too late. Second, there is no adequate explanation for the delay. Any competent solicitor must turn his or her mind to a limitation defence whenever a matter relates to incidents which occurred many years ago. To indulge solicitors who simply did not take the point is inappropriate. It is unfair to the other party - in this case, the plaintiff. Third, this matter is all but ready for trial. The parties have gone through a tortuous process of interlocutory applications, discovery has been given, there appears to be no need for expert evidence and subject to disposing of this application, the matter could be set down for hearing. To allow a strike out application when the case has progressed to that extent seems to me to be unreasonable.
(Page 5)
8 Against all of that, there is the question of the strength of the second defendant's application. For reasons which I will expand upon below, I am not satisfied that the second defendant's argument is so strong as to warrant an extension of time being granted. Given all the factors I have mentioned above weighing so heavily against the grant of an extension, the second defendant's case would need to be very strong indeed.
9 During the course of his submissions, Senior Counsel for the second defendant submitted that any prejudice the plaintiff might suffer as a consequence of the extension being granted could be accommodated by a costs order. Senior Counsel further indicated he would not oppose such a costs order being made - perhaps mindful of the orders that were made in the JL Holdings case. While that concession was appropriate, it is not, in my view, enough to tip the balance. The plaintiff has progressed this action to the point where it is ready for trial. Fully appraised of the second defendant's position on the limitation issue, it wishes to proceed to trial. In the circumstances, it should have the right to do so. The second defendant should be left to run the limitation point at trial.
10 Given that this matter will now proceed to trial, it is not appropriate for me to say too much about the limitation question raised by the second defendant. But the matter was fully argued and it provided the centrepiece of the second defendant's submissions. In fairness, I should set out the nature of the arguments put and state briefly why I am not satisfied they are strong enough to warrant the extension being granted.
11 The facts in this case can be summarised in the following way. In 1982, the second defendant's predecessor granted a head lease of certain land to the first defendant with effect from 30 June 1981. The land is on the foreshore in East Fremantle and is the site of a popular hotel known as the Left Bank. The term of the head lease was for 25 years, meaning that it expired on 30 June 2006.
12 In 1987, the first defendant granted a sub-lease of the Left Bank land to the plaintiff. The initial term of the sub-lease was 15 years but it could be extended to a maximum total term of 35 years. Hence, if the sub-lease was extended as far as permitted, it would expire in 2022.
13 The second defendant endorsed its consent upon the agreement for sub-lease and the sub-lease itself. The endorsement upon the sub-lease referred to the option to renew and extended the term of the head lease. This was a reference to a proposed variation of the head lease to extend it
(Page 6)
- to make its term coincide with the maximum possible term of the sub-lease. However, that proposed variation was never executed.
14 In its statement of claim, the plaintiff claims that it agreed with the first defendant and the second defendant that the head lease was varied so as to confer on the first defendant options to renew and extend the term of the head lease to enable it to continue for the maximum 35 year term of the sub-lease. It is further alleged that the first and second defendants agreed to do all things reasonably necessary to vary the head lease accordingly. As an alternative claim, the plaintiff says that the first and second defendants made representations about extending the term of the head lease and encouraged the plaintiff to assume that they would execute a deed to give effect to the alleged agreement. On that basis, the plaintiff says it carried out renovations to the hotel and that it would be unconscionable for the first and second defendants to resile from those representations and assumptions. In other words, there is a plea of equitable estoppel.
15 It is alleged that both of the defendants wrongfully failed and refused to give effect to the obligations alleged. By reason of this, the plaintiff says it has suffered loss and damage. Presently, the loss and damage is particularised as the damage the plaintiff has sustained because it has been unable to sell the business and assign the sub-lease. In its prayer for relief, the plaintiff claims declarations and orders in the nature of specific performance to give effect to the contractual arrangement which it alleges. As an alternative, it seeks damages or equitable compensation.
16 In its substituted defence dated 15 December 2006, the second defendant pleads, in effect, that by 6 November 1995, the plaintiff was aware that it (the second defendant) had resolved not to grant an extension of the head lease and that it would require full commercial rent to be paid for the Left Bank from July 2006. In these circumstances, the second defendant claims that the plaintiff's claims accrued by September 1996 at the latest and that the plaintiff's claim is now barred by the provisions of s 38 or s 47A of the Limitation Act.
17 Before going any further I should say something about the evidence upon which the second defendant purported to rely to bring this application. I should preface these remarks by referring to O 20 r 19(2) which states that no evidence is to be admissible on an application to strike out on the basis of no reasonable cause of action. For the purposes of an application of this sort, it is clearly necessary for the second defendant to establish the date upon which any cause of action accrued.
(Page 7)
- The relevant facts are pleaded in pars 32 to 36 of the second defendant's substituted defence. No reply has been filed by the plaintiff and so it can be assumed that the facts pleaded by the second defendant are in issue. It may well be at trial that these facts are uncontentious. Indeed, it may even be the case that the way the plaintiff's statement of claim is pleaded means that effectively the facts are admitted. But there is no basis upon which the second defendant can assume that its pleaded facts are established and there is no basis on an application such as this upon which those facts can be established. No evidence is admissible. That provides considerable difficulty for the second defendant in an application such as this.
18 There are three further difficulties with the second defendant's application. The first has to do with the date upon which any cause of action accrued. Accepting for the purposes of the argument the plaintiff became aware in 1996 that the second defendant would not vary the head lease to enable the sub-lease to be extended beyond June 2006, then there was arguably no more than an anticipatory breach of the second defendant's obligations. The authorities are clear that the existence of an anticipatory breach does not mean the party committing the anticipatory breach cannot also commit an actual breach of the contract if it remains on foot and the time for performance arrives: see Foran v Wight (1989) 168 CLR 385. It is therefore arguable that there is no particular date upon which this cause of action could be said to have accrued - at least not prior to 30 June 2006 when the head lease expired.
19 The second defendant's further difficulty relates to the fact that there is a claim based in estoppel. Proof of that equitable cause of action requires proof that detriment will be suffered by the claiming party. The basic purpose of equitable estoppel is to prevent a person from unconscionably departing from a representation upon which the claiming party has relied where departure from this representation would cause detriment to the claiming party. In these circumstances, the application of any limitation period depends upon when detriment is suffered by the claiming party. It is arguable that the detriment was suffered when the head lease expired. So even assuming that limitation periods apply by analogy to equitable causes of action, it is arguable here that there is no limitation applicable in this equitable cause of action.
20 The third difficulty relates to s 47A of the Limitation Act. That section requires notice to be given prior to proceedings being issued against a public authority. Here it is arguable that the contractual claim is not for any neglect or default by the second defendant in execution of a
(Page 8)
- public duty or authority. The claim is that the second defendant failed to comply with its existing contractual obligations. On the plaintiff's case, these contractual obligations were incurred with the second defendant's approval obtained in the performance of its public functions as evidenced by the second defendant's endorsement on the sub-lease. If the plaintiff's contractual case is accepted, it is immaterial to the existence of the contractual obligations alleged that the second defendant may subsequently have resolved not to extend the head lease. That resolution would simply place the second defendant in breach of its previous contractual obligations rather than somehow dissolving or modifying those previous obligations. The second defendant's failure to comply with its obligations is not a failure in the course of carrying out some other function.
21 In setting out the difficulties I see in the way of the second defendant's limitation defence, I am not in any way purporting to reach a concluded view as to whether that defence may succeed. All I have to determine is whether or not the plaintiff's position is arguable. I am satisfied that it is. Certainly, the second defendant's position is not so strong as to be unanswerable and thereby warrant a grant of an extension of time to bring this application.
22 I would dismiss the second defendant's application. I will hear the parties with respect to the form of orders and with respect to costs.
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