Maroni v Reid - [2016] WADC 88

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: MARONI -v- REID [2016] WADC 88

CORAM: PRINCIPAL REGISTRAR MELVILLE

HEARD: 9 MAY 2016

DELIVERED : 9 JUNE 2016

FILE NO/S: CIV 3897 of 2015

BETWEEN: MARCUS GIANNI MARONI
Plaintiff
AND
IAN MURRAY REID
CATHERINE MARGARET REID
TRENT WILLIAM REID
Defendants

Catchwords:

Summary judgment - Meaning of 'purports'

Legislation:

Personal Property Securities Act 2009
The Rules of the Supreme Court 1971

Result:

There be interlocutory judgment for the plaintiff on the issue of the defendants' failure to satisfy their obligations to CBH Grain Pty Ltd and Elders Rural with damage to be assessed

The defendants have unconditional leave to otherwise defend the action

Representation:

Counsel:

Plaintiff: Mr Blatchford
Defendants: Mr Priestly

Solicitors:

Plaintiff: Albany Legal Pty Ltd
Defendants: Pacer Legal

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

2020 Construction Systems Pty Ltd v Dryka & Associates Pty Ltd [2010] WASC 22
Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd [1994] FCA 1059; (1994) 51 FCR 446
Teras Australia Pty Ltd v Blue Ore Pty Ltd [No 2] [2015] WADC 120

PRINCIPAL REGISTRAR MELVILLE: In this case the plaintiff (Mr Maroni) is a land owner of farming land known as Glenidol which he leased to the defendants (the Reids). By the terms of the lease the Reids were required to pay rent as set out in the lease agreement and, after harvest, but before 1 March 2016, spread lime on the lease premises at the rate of 1 tonne per acre. Mr Maroni alleges the lime was to spread over the land to the reasonable satisfaction of the landlord.
The Reids in their defence do not dispute that the monies payable under the lease were not paid when required. However, they say a subsequent agreement was reached whereby the arrears were to be paid by the defendants harvesting the crop in December 2015 and delivering grain equal to the sum of all rent and interest outstanding under the lease to Mr Maroni's CBH grower account.
By way of reply, Mr Maroni alleges that it was a further term of the agreement that the grain delivered to his CBH growers account be unencumbered and free of registered security interests, which interests were particularised as interests registered against the crops by CBH Grain Pty Ltd and by Elders Rural Services Australia Limited. He alleges this was not done.
There is no rejoinder filed to the reply and accordingly by virtue of the Rules of the Supreme Court 1971 O 20 r 20 and r 15(2) there is an implied joinder of issue on this allegation.
Mr Maroni subsequently brought an application for summary judgment supported by an affidavit sworn by him on 25 February 2016 in which he deposed to the belief that the defendants did not have a defence to his claim. Such an application is governed by the Rules of the Supreme Court O 14 r 3 which, unless the court has dismissed the application, or the defendant has satisfied the court that there is an issue or question in dispute which ought to be tried, or that there ought for some other reason be a trial of that claim or part empowers the court to give judgment for the plaintiff against the defendant on that claim or part thereof as may be just, having regard to the nature of the remedy or relief claimed.
How that rule operates has been addressed by numerous authorities over the years. Most recently Wager J of this Court summarised the legal principles applicable to such an application in Teras Australia Pty Ltd v Blue Ore Pty Ltd [No 2] [2015] WADC 120 as follows:
[14]The summary judgment procedure is designed to deal with cases that are not fit for trial at all: Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1; [2001] 2 ALL ER 513, 516, 543, 547; [2001] UKHL 16 [1], [95], [111].
[15]Even if the facts which are established are inconclusive, if it is not possible to say without doubt on the whole of the material that there is no question to be tried, there should be leave to defend: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99; (1983) 48 ALR 1, 10; (1982) 57 ALJR 621. If facts are in dispute then the action should not be disposed of summarily.
[16]However, where the plaintiff has satisfied all of the criteria identified in O 14 Rules of the Supreme Court 1971 the defendant bears the onus of satisfying the court why judgment should not be given against it. In order to discharge this onus the defendant must lead evidence disclosing some triable issue either of fact or law, an arguable defence or a defence on the merits, or any other matters establishing that the case ought to be heard for some other reason: Clarke v Union Bank of Australia Ltd (1917) 23 CLR 5, 8; Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 (Brinson J); O 14 r 3 and r 4 Rules of the Supreme Court 1971. The matters contained in the defendant's affidavit material must condescend upon particulars if a defence is to be raised in the affidavits filed in support: Moscow Narodny Bank Ltd (113).
[17] Summary judgment proceedings are not to be decided by simply weighing up two affidavits. Rather, the court must look at the situation as a whole and ask whether the defendant has satisfied the court that there is a fair and reasonable probability of the defendant having a real or bona fide defence: Banque de Paris et des Pays‑Bas (Suisse) S.A. v de Naray [1984] 1 Lloyd's Rep 21, 23.
Having regard to what has been stated above I turn my attention to whether Mr Maroni has demonstrated a prima facie case. Annexed to the affidavit of Mr Maroni is a copy of the correspondence that is said to give rise to the agreement reached between the parties as to how the arrears of rent were to be paid. Annexure MGM7 is a copy of a letter from the Reids' solicitors proposing payment by way of two alternative options.
I am satisfied Mr Maroni accepted option two proposed by the Reids, namely that they were to satisfy their obligations to CBH Grain Pty Ltd and Elders Rural Services Australia Limited from the first wheat and barley harvested off the farm known as Glenidol and would thereafter deliver all grain harvested from Glenidol directly to Mr Maroni's CBH Grower account, up until the value, calculated using the daily rate on the date of delivery, that was equal to the sum of all rent and interest outstanding under the lease. I am also satisfied that the Reids did deliver grain to Mr Maroni's CBH account. The question is whether the Reids had first satisfied their obligations to CBH Grain Pty Ltd and Elders Rural Australia Limited as secured by registrations on the personal property securities register.
In this regard Mr Maroni also annexed copies of correspondence from CBH Group dated 7 January 2016 in which it was stated:
We have reason to believe that the grain may be encumbered by a prior existing security interested registered in favour of CBH.
It can be seen that by use of the word 'may', any belief that CBH had that the grain was encumbered was equivocal at best. In the penultimate paragraph, CBH stated:
We notify you that, if a registered security interest exists over the Grain in favour of CBH, CBH reserves its right to enforce that security interest in the case of default by the grantor …
Again, use of the word 'if' points to the equivocal nature of the statement and the apparent uncertainty in the mind of CBH Group as to whether it had a registered security interest over the grain. In my opinion, this evidence does not establish a prima facie case that the grain was encumbered and that the Reids were therefor in breach of the agreement.
Mr Maroni also annexed two documents described as 'Registration Number Search Certificate' under the letterhead of the Australian Government, Australian Financial Security Authority. He says that he checked the Personal Property Securities Register. These documents were dated 25 February 2016. The first document itself is said to be a 'registration number search certificate for a search conducted for registration number 201211020048191'. The second document stated similarly for registration number 201506050071726. Each document contained a statement to the effect it was provided under s 174 of the Personal Property Securities Act 2009 (the PPSA), indicating the registration of a security interest for the benefit of CBH Grain Pty Ltd and Elders Rural Services Australia Limited respectively. The registration start time preceded the agreement reached for the payment of the arrears of rent and the end time for the security interests is said to be 1 November 2019 and 30 June 2017 respectively.

Grantor details

The grantor is identified by a number, being 52318798875. The collateral details referred to CBH Grain Pty Ltd's rights and interest in the crops planted (and proceeds) to produce the grain to be delivered pursuant to the harvest to pre‑pay advantage contract between CBH Grain Pty Ltd and the Reids.
The Personal Property Security register is a register establish by Commonwealth legislation under the PPSA for the purpose of enabling persons to register security over the property of others for the payment of monies that are owing to them. This has the benefit of enabling third persons who may be considering purchasing that property to be aware that the owner of the property does not have a clear title to sell to them. Upon payment of what is owing the party who has registered his security interest is required file documentation putting an end to the registration of the security interest.
In this case the question is what is the evidential value of these documents?
By s 174(1) of the PPSA, it is provided:
A written search result in the appropriate form (see subsection (3)) is admissible as evidence in a court or tribunal and is, in the absence of evidence to the contrary, proof of the matters stated in the search result.
Section 174(3) provides:
A search result is in the appropriate form if:
(a)it purports to be issued by the Registrar in the approved form; or
(b)it purports to be issued by one of the following:
(i)an officer or agency of the Commonwealth authorised by the Registrar;
(ii)an officer or agency of a State or Territory authorised by the Registrar; or
(c)it purports to be:
(i)issued by a person prescribed by the regulations; and
(ii)if the Registrar approves a form for the purposes of this subparagraph—in the approved form.
In my opinion the document 'purports' to be issued by the Registrar. In 2020 Construction Systems Pty Ltd v Dryka & Associates Pty Ltd [2010] WASC 22 the court when discussing whether a document 'purports' to be a statutory demand said the expression 'purports to be' means 'professes or claims to be', citing Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd [1994] FCA 1059; (1994) 51 FCR 446, 452.
In my view there is no reason to depart from that definition of 'purports' as found in the PPSA and when the document is considered as a whole, including the fact it represents itself as being issued under s 174 of the PPSA, it purports to be issued by the Registrar in the approved form.
There being no evidence to the contrary, the certificate stands as proof that the CBH and Elders have an interest that is secured by the crop. It necessarily follows from that premise that the Reids have not satisfied all obligations to CBH or Elders namely that they would firstly 'satisfy the obligations to CBH Grain Pty Ltd and Elders Rural …' and that they are, therefore, in breach of the agreement.
However, I am not persuaded that the damages that Mr Maroni seeks are liquidated in the amount he seeks or at all. The certificates do not show what monies owing to CBH and Elders are secured by the Security interest. Accordingly it may be that the value of the grain delivered to CBH by the Reids and which stands to the credit of Mr Maroni in his growers account considerably exceeds what is owing to CBH and Elders. If Mr Maroni is to have the benefit of what is left over his loss will be less than the amount that owed as unpaid rent pursuant to the lease.
In my opinion Mr Maroni's claim is for unliquidated damages for breach of contract and he should be entitled to interlocutory judgement for this part of the claim with damages to be assessed.
With respect to the claim that the Reids were in breach of the lease by failing to apply lime to the lease premises, I observe that by cl 6.9(i) of the lease the Reids were required to spread on the lease premises lime at the rate of 1 tonne per acre. Clause 6.9(ii) the lease provides that the Reids would provide evidence to the reasonable satisfaction of the landlord that this has been done. Thus there is two parts to this being:
1.to spread lime; and
2.to provide evidence this was done, such evidence being to the reasonable satisfaction of Mr Maroni.
This is very different to what is alleged in the statement of claim, namely that the Reids were required to spread lime at the rate of 1 tonne per acre to the reasonable satisfaction of Mr Maroni.
Further, I find the evidence on this issue unsatisfactory. In my opinion it is constituted by the following, found at par 32 of the affidavit being:
To the best of my knowledge the tenant has not spread lime on Glenidol after harvesting their crop.
What knowledge Mr Maroni has in this regard and how he ascertained it is not particularised. In the absence of further detailed explanation his statement appears to me to be supposition. It may be that the Reids are in breach of the contractual requirement to provide evidence to the reasonable satisfaction of Mr Maroni that the lime was applied, but this does not mean that the lime was not in fact applied in accordance with the terms of the lease agreement. In my view this is a triable issue.
For these reasons interlocutory judgement should be entered for the plaintiff for the defendant's breach of the requirement to satisfy the obligations to CBH Grain Pty Ltd and Elders Rural with damages to be assessed and the defendants should be given unconditional leave to defend the issue as to whether they are in breach of the agreement to apply lime at the rate of 1 tonne per acre.