M L Holdings Pty Limited v Osborne
[2002] WADC 44
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: M L HOLDINGS PTY LIMITED -v- OSBORNE [2002] WADC 44
CORAM: NISBET DCJ
HEARD: 1 FEBRUARY 2002
DELIVERED : 12 MARCH 2002
FILE NO/S: CIV 3021 of 2000
BETWEEN: M L HOLDINGS PTY LIMITED
Plaintiff
AND
DOROTHY OSBORNE
Defendant
Catchwords:
Practice and procedure - Appeal from Registrar's refusal to enter summary judgment - Appeal from Registrar's decision dismissing plaintiff's claim as a nullity - Statutory interpretation – Section 27(1) Commercial Tenancy (Retail Shops) Agreements Act 1985
Legislation:
Commercial Tenancy (Retail Shops) Agreements Act 1985
Result:
Appeal allowed
Representation:
Counsel:
Plaintiff: Mr R E Keen
Defendant: Mr P A Smith
Solicitors:
Plaintiff: Williams & Co
Defendant: Patrick Smith
Case(s) referred to in judgment(s):
About Holdings Pty Ltd v Bellbird Enterprises Pty Ltd (1996) 17 WAR 309
Case(s) also cited:
Cargill v Bower (1878) 10 Ch D 502
Commodore Homes (WA) Pty Ltd v Standley [2001] WADFC 89
Ketch Nominees Pty Ltd v Spooner & Anor [2000] WADC 258
Nicolo v Perpetual Trustees Victoria Ltd, unreported; Commercial Tribunal of WA; Library No 95/24; 29 November 1995
Nyunt v Government Employees Superannuation Board (1995) 14 SR (WA) 263
Oh Ho & Ors v Minister for Immigration and Ethnic Affairs (1987) 72 ALR 43
Pearce & Anor v Gallop Investments [1999] WADC 34
Robart v Matchplan Pty Ltd (in liq), unreported; SCt of Victoria; BC9304148; 21 December 1993
Sharp v Associated Pulp & Paper Mills Ltd [1989] VR 139
Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
Taylor Farms (Aust) Ltd v A Calkos Pty Ltd [1999] NSWSC 186
Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233
Wigan v Edwards [1973] 1 ALR 497
NISBET DCJ:
The application
On 15 November 2000 the plaintiff issued a writ of summons out of this Court against the defendant upon which was endorsed a statement of claim. The plaintiff claimed arrears of rent in respect of a retail shop leased by it to the defendant and being $24,499.07, together with damages for breach of the provisions of the lease and interest at the rate of 16.6 per cent per annum. This rate was pleaded as being the rate applicable in consequence of the rate then being charged by trading banks on overdrawn commercial current accounts standing at 14.6 per cent per annum and the lease allowing for interest on unpaid rent and other charges at a rate of 2 per cent above the trading bank overdraft rate.
By chamber summons dated 9 January 2001 the plaintiff applied for summary judgment in the sum of $24,499.07 together with interest at the rate of 16.6 per cent per annum and costs and it could accordingly be seen to have abandoned its claim to damages arising out of alleged breaches of the lease. The defendant opposed the application for summary judgment and brought in an application of her own dated 8 May 2001 in which she sought an order that:
"The proceedings be dismissed on the grounds that the matters the subject of these proceedings are the subject of a reference to the Commercial Registrar under the Commercial Tribunal Act 1985 prior to these proceedings and by reason thereof the institution of these proceedings is prohibited by section 27(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 and in these circumstances this honourable Court has no jurisdiction to hear any such matter."
The two applications came on for hearing before a Registrar on 18 July 2001 and by written reasons delivered 21 August 2001 he dismissed the plaintiff's action in consequence of which (I infer) that the plaintiff's application for summary judgment then simply fell away. The plaintiff now appeals against that order. As is well enough known, such an appeal is a hearing de novo: Hazart Pty Ltd v Rademaker (1993) 11 WAR 26.
Commercial Tenancy (Retail Shops) Agreements Act 1985 – Section 27(1)
This section provides as follows:
"Where this Act provides for the reference of a question to the Registrar and the question is one that a court also has jurisdiction to determine, proceedings may be instituted to determine the question either —
(a)before the court; or
(b)by way of a reference to the Registrar,
but not both."
By s 19 of the Act the reference to a Registrar may be made in respect of: "A question arising under a retail shop lease …" (s 19(1)).
Bearing in mind that the plaintiff's claim is for arrears of rent pursuant to a retail shop lease, in the event that any question concerning arrears of rent under the lease between the plaintiff and defendant has been referred to the Registrar, then s 27(1) of the Act will operate to prevent such question being determined in this Court. The Registrar referred to in the Act is, of course, the Registrar of the Commercial Tribunal. The Registrar of this Court found that there had been a reference of a question concerning arrears of rent to the Registrar within the meaning of s 27(1) of the Act.
The reference in question was before the learned Registrar it having been tendered before him at the hearing on 18 July 2001. A copy is conveniently to be found annexed to the affidavit of Mr Ashdown sworn 18 January 2002. An examination of the reference shows that it is entitled as a "Form 4" and refers specifically to s 19(1) of the Act and says that it is a "reference of a question arising under a retail shop lease" and it is addressed to the Commercial Registrar of the Commercial Tribunal of Western Australia. It is signed by the defendant and bears date 16 March 1998 although for some reason not made clear to me it is stamped as having been received in the Tribunal in August of 1998. In any event an examination of the terms of the reference discloses no dispute about the rent as to its calculation, the stated amount of arrears or otherwise. The closest it comes is in par (ix) which reads as follows:
"Failure by a landlord to meet its obligation under (iv) and (vii) of the attachment gives the tenant a right to compensation, damages and abatement of rent."
That reference was supported by particulars which are dated 31 January 1999 and which were filed in the Commercial Tribunal. They may be found conveniently as Annexure "B" to the affidavit of the defendant sworn 17 July 2001. The particulars are a litany of complaints about the plaintiff's failure as landlord to perform various of its covenants under the lease but nowhere in its terms expressly or in the broad does it detail any dispute about the plaintiff's calculation of the rent, the arrears, the variable outgoings or otherwise of any amount included in the plaintiff's claim. All that can be said about the reference to the Registrar and the particulars of the defendant's claim is that had it not been a reference to the Registrar, they would have constituted matters in respect of which the defendant may have had an arguable counterclaim for damages.
Accordingly, in my opinion the learned Registrar of this Court was not justified in holding as he did that there had been a reference of the same question as arises by reason of the plaintiff's claim for arrears of rent as the question which had been referred to the Registrar of the Commercial Tribunal by the defendant. They are not the same question at all and accordingly, the appeal should be allowed and the order dismissing the action set aside.
The application for summary judgment
The plaintiff having established the defendant's indebtedness to it and the defendant having failed by any credible evidence to show that the plaintiff's calculation of the arrears of rent is erroneous or defensible on any other ground such that she is not liable to pay either the sum claimed or any part of it, in the ordinary course of events the plaintiff should have summary judgment in accordance with its summons. Before coming to this conclusion I looked to see whether there was anything in the defendant's case which could amount at law to a set‑off and came to the firm conclusion that there is not. For there to be a set‑off at law there must be a debt due by the plaintiff to the defendant either at the date of commencement of the action or at least reasonably ascertainable at the time the defence falls to be considered. Here this means as at the date of the plaintiff's application for summary judgment. The defendant had no provable debt which could be set off against the plaintiff's claim and did not plead one. Whatever the outcome of the reference to the Registrar, the defendant's complaints are of the plaintiff's breaches of its covenants as landlord and insofar as they may be categorised as coming within s 14 of the Act the Commercial Tribunal may determine compensation in the event of the landlord's failure to rectify any of its alleged breaches of its covenants under the lease. No determination of compensation has been made by the Commercial Tribunal in this case. Further, no argument was mounted such that would bring the defendant within the provisions of s 12(1d) of the Act. Again the result is that there is no identifiable or quantifiable debt due by the plaintiff to the defendant which could be set off against the plaintiff's claim for rent.
I considered too whether there may have been an equitable set-off available in the circumstances of this case such that it would be unconscionable to allow the plaintiff to have summary judgment against the defendant without at the same time allowing the defendant to prosecute an appropriate counterclaim against the plaintiff such as might arise, for example, in a situation where a plaintiff claimed a debt due under a contract of sale of a business providing for payment by instalments of the purchase price, and the defendant had an arguable counterclaim for deceit in the fraudulent misrepresentation of the business's takings, inducing the formation of the contract.
The immediate difficulty the defendant faces here is that she has referred all of the issues the subject of the counterclaim she would seek to prosecute, to the Registrar of the Tribunal. There is nothing in her proposed counterclaim which is in any material sense different from her reference to the Registrar and, it seems to me that in consequence, she is in fact caught by the same argument that she advanced before the learned Registrar of this Court. In my opinion the provisions of s 27(1) of the Act operate to preclude the prosecution of the counterclaim in these proceedings. She has chosen her forum, namely the Registrar of the Commercial Tribunal, and may not agitate it here in this Court: About Holdings Pty Ltd v Bellbird Enterprises Pty Ltd (1996) 17 WAR 309.
Accordingly, it seems to me that there is an impediment to my doing that which might otherwise be done in matters such as this namely, permitting the entry of summary judgment against the defendant but staying execution upon the defendant's undertaking to prosecute her counterclaim with all speed and diligence, because the prospective counterclaim simply may not be put forward in this Court having regard to the provisions of s 27(1) of the Act.
In the circumstances therefore, there will be summary judgment for the plaintiff against the defendant in the sum of $24,499.07. I will hear the parties on the calculation of interest. I will need to further hear counsel on this point because the claim for interest at 16.6 per cent per annum is based upon cl 2.44 of the Deed of Assignment and Variation of Lease dated 13 January 1995. That reads as follows:
"2.44INTEREST ON OUTSTANDING MONIES
Without prejudice to the rights, powers and remedies of the Lessor otherwise under this Lease the Lessee shall pay to the Lessor interest at such rate as shall be TWO per centum (2%) more than the then maximum permissible rate charged by trading banks on overdrawn commercial current accounts from time to time on rent and any other monies due but unpaid for seven (7) days or more by the Lessee to the Lessor on any account whatsoever pursuant to this Lease such interest to be computed from the due date for the payment of the moneys in respect of which the interest is chargeable until payment of such monies in full and to be recoverable in like manner as Basic Annual Rent in arrear." (Annexure AT4 and par 7 to the affidavit of Antonella Tersigni sworn 9 January 2001.)
Annexure AT9 to the same affidavit discloses that the National Australia Bank Limited advises that the relevant rate is 14.6 per cent. I would like to hear argument on whether that satisfies the clause, and, additionally, if it does not, whether interest is payable pursuant to the provisions of the Supreme Court Act.
In consequence of this I will provide a copy of these reasons to the parties in advance and invite brief submissions at a convenient time.
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