Make It Raine Money Pty Ltd v Alvaro

[2022] WASC 282

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   MAKE IT RAINE MONEY PTY LTD -v- ALVARO [2022] WASC 282

CORAM:   MASTER SANDERSON

HEARD:   13 JUNE 2022

DELIVERED          :   13 SEPTEMBER 2022

PUBLISHED           :   13 SEPTEMBER 2022

FILE NO/S:   CIV 1966 of 2020

BETWEEN:   MAKE IT RAINE MONEY PTY LTD

Plaintiff

AND

ROCCO DOMENIC ALVARO

Defendant

ROCCO DOMENIC ALVARO

Plaintiff by counterclaim

MAKE IT RAINE MONEY PTY LTD

Defendant by counterclaim

Catchwords:

Summary judgment - Application for extension of time to bring application - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Application dismissed

Representation:

Counsel:

Plaintiff	:	N Wallwork
Defendant	:	T Galic
Plaintiff by counterclaim	:	T Galic
Defendant by counterclaim	:	N Wallwork

Solicitors:

Plaintiff	:	Summer Lawyers
Defendant	:	TGC Lawyers
Plaintiff by counterclaim	:	TGC Lawyers
Defendant by counterclaim	:	Summer Lawyers

Case referred to in decision:

Westpac Banking Corporation v Palaniappan [2014] WASC 475

MASTER SANDERSON:

1. This is the plaintiff's application for summary judgment.  The writ in this matter was issued on 21 September 2020. An appearance was entered by the defendant on 3 February 2021. Under Order 14 rule 1(1) of the Rules of the Supreme Court 1971 (WA) (the Rules), the plaintiff had until 22 February 2021 to apply for summary judgment.  In fact, the plaintiff did not apply for summary judgment until 18 March 2022.  The plaintiff requires leave to bring its application.  The defendant opposes the grant of leave.  The defendant says the length of the delay and the failure to explain the delay, are fatal to the application for an extension of time.  The defendant also says he has a good defence to the claim and any summary judgment application would fail.  Before dealing with the application for an extension of time, it is worth considering the merits of the plaintiff's application for summary judgment.  If the application would fail, then there is no point in granting the extension of time.  Moreover, in this case, one of the grounds advanced by the plaintiff for extending the time is the strength of its case. 

2. On the pleadings, certain matters are not in dispute.  On 2 July 2019, the plaintiff advanced money to the defendant, pursuant to a loan agreement secured by a mortgage over a property in High Wycombe owned by the defendant.  The principal was to be repaid by 2 July 2020.  The only amount the plaintiff has received is a single payment of rent received from tenants of the property.  It also acknowledges receipt of a retained interest amount.  The defendant admits the principal is owing.  The plaintiff says the failure to repay the principal constitutes a default under the loan agreement.  Upon default, the plaintiff is entitled to take possession and sell the property.  The plaintiff says this action is an application by the plaintiff for vacant possession and the defendant has no reasonable grounds on which to defend the plaintiff's action.

3. By his defence, the defendant admits the terms of the loan agreement and admits a failure to repay the principal sum on the due date.  He then pleads there was no default under the terms of the loan agreement.  With respect, that cannot be right.  The defendant was contractually bound to repay the principal on the due date.  This was a fixed term loan.  The defence relies on an alleged failure by the plaintiff to provide a loan payout figure.  It is not pleaded the plaintiff was contractually bound to provide the defendant with notice of the payout figure or that somehow the failure to provide the defendant with the payout figure suspended the defendant's obligation to repay the loan.

4. As I understand the defence and counterclaim, the defendant has three grounds on which it resists the plaintiff's claim.  The first is the failure of the plaintiff to provide the payout figure.  I have dealt with that above and nothing further need be said.  Contractually, the position is clear.  The second ground is an allegation the default interest rate charged is a penalty and is therefore unenforceable.  The default interest rate is 4% per month.  It is inappropriate on a summary judgment application to determine whether such a rate of interest is a penalty.  I would therefore accept this point is arguable.  The third defence raised by the defendant relates to rent allegedly paid by tenants occupying the property to the plaintiff.  The plaintiff says it never received any payment from the tenant (other than one payment which I have referred to above).  The defendant is unable to point to any evidence which establishes rent was paid direct to the plaintiff by tenants of the property. 

5. Although the plaintiff does not concede any of the matters raised by the defendant have any merit, it says it is unquestionably entitled to possession of the property and repayment of the principal.  It says judgment ought be entered in its favour with respect to this part of the claim and the counterclaim ought be left to proceed.  In effect, the plaintiff is saying all matters raised by the defendant amount to nothing more than an accounting exercise which can be undertaken relatively simply.  Although it was not the subject of submissions by counsel for the plaintiff, presumably once the plaintiff had sold the property and deducted the principal sum outstanding, together with the costs of the sale, the residue would be paid into court.  Once the outstanding issues were resolved, each party's entitlement could be paid to them. 

6. In my view, there is no doubt the plaintiff has a very strong case supporting its position that it is entitled to repayment of the principal and to possession of the property to allow that to occur.  In other words, the plaintiff may well be entitled to summary judgment for part of its claim.  Summary judgment for part of a claim is unusual - a better alternative is often to have all issues disposed of at the one trial.  In this case, I accept there may be good reason for entering judgment for part of the plaintiff's claim.

7. Turning then to the extension of time, the plaintiff's first argument was the strength of its case.  It maintained the case was so strong the extension ought be granted.  Reference was made to the decision of Westpac Banking Corporation v Palaniappan [2014] WASC 475. In that case there was no reason provided for the delay. The proceedings had progressed beyond pleadings and discovery was complete. Nonetheless, an extension was granted because the strength of the plaintiff's case meant it was in the interests of justice to bring the action to an end rather than allow either party to incur further costs.[1]

   [1] Westpac Banking Corporation v Palaniappan [2014] WASC 475 [19] - [20].

8. The second reason advanced by the plaintiff for the grant of the extension of time was that this matter had not proceeded beyond pleadings.  Mediation had occurred but discovery had not been provided.  That being so, a grant of leave would not undermine the legislative intent of the Rule which required parties to bring claims for summary judgment prior to steps being taken and unnecessary costs being incurred.

9. Third, a director of the plaintiff has provided an explanation for the delay.  The plaintiff relied on an affidavit of Andrew Arthur Raine affirmed 30 May 2022.  Mr Raine says the plaintiff wished to resolve the matter by agreement and held off progressing the action pending mediation.  The defendant says that explanation is disingenuous.  Orders for mediation were not sought or made before 25 October 2021.  The mediation occurred on 31 January 2022.  The defendant points out the plaintiff fails to explain why it took no steps to mediate between February 2021 and October 2021.  The defendant says the length of the delay and the failure to explain the delay are fatal to the application for the extension of time. 

10. The plaintiff is correct when it says the legislative purpose behind the temporal limitation in Order 14 rule 1(1) (and Order 16) of the Rules is to encourage a party to bring an application for summary judgment before costs have been incurred.  The time limit is a regulatory embodiment of case management principles.  The entitlement to summary judgment is not altered by the passage of time.  A party either has an entitlement to judgment or it does not.  It is necessary then to take care to ensure the interests of justice are not obscured by rigid adherence to case management principles.

11. This creates a dilemma.  If it was the case that merits alone determined whether an extension of time ought be granted there would be no point in having the time limit in the rule.  On the other hand, forcing a party who clearly has an entitlement to judgment to litigate a case and incur costs hardly serves the interests of justice.  In the end, it is a balancing exercise.  An attempt must be made to weigh the interests of both parties and in so far as it is possible to reach a conclusion which is in the interests of justice. 

12. On balance, I am not satisfied here that an extension of time ought be granted.  In favour of the grant of an extension is the undoubted merits of the plaintiff's claim to judgment on part of its case.  I would also accept the action has not progressed to any extent and the defendant has not incurred significant costs in defending the claim.  If leave were granted, an order could be made requiring the plaintiff to pay the defendant's costs of preparing his defence.  That would protect the policy aims of the Rule.  On the other hand, it is clear the delay has been lengthy and is not adequately explained.  That is a factor in the defendant's favour.

13. What sets this case apart is the fact that if summary judgment were granted it would not resolve all of the matters at issue between the parties.  Absent agreement, the parties would need to go to trial on those questions.  Given that granting summary judgment for part of the claim would not have a significant impact on the length of trial, I am satisfied it would not be in the interests of justice to grant the extension of time.

14. Accordingly, I would dismiss the plaintiff's application.  Subject to hearing from the parties, I would order the costs be the defendant's costs in the cause.  Any party who wishes to make submissions as to costs should do so within 7 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.

AH

Associate to Master Sanderson

13 SEPTEMBER 2022