Natoli v Leverett
[2020] WADC 135
•16 OCTOBER 2020
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: NATOLI -v- LEVERETT [2020] WADC 135
CORAM: REGISTRAR KINGSLEY
HEARD: 4 SEPTEMBER 2020
DELIVERED : 16 OCTOBER 2020
FILE NO/S: CIV 2749 of 2019
BETWEEN: RACHEL MARGARET NATOLI
First Plaintiff
MARCO ANDREA NATOLI
Second Plaintiff
AND
VICKI MARIE LEVERETT
First Defendant
DREW GRAHAM LEVERETT
Second Defendant
AND
VICKI MARIE LEVERETT
Plaintiff by counterclaim
MARCO ANDREA NATOLI
RACHEL MARGARET NATOLI
Defendant by counterclaim
Catchwords:
Practice - Application pursuant to O 16 and O 20 of the Rules of the Supreme Court 1971 (WA) - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
O 16 Application partially successful
O 20 successful
Representation:
Counsel:
| First Plaintiff | : | Ms J Henderson |
| Second Plaintiff | : | Ms J Henderson |
| First Defendant | : | No appearance |
| Second Defendant | : | Mr P G McGowan |
| Plaintiff by counterclaim | : | No appearance |
| Defendant by counterclaim | : | Ms J Henderson |
Solicitors:
| First Plaintiff | : | McAulay Legal |
| Second Plaintiff | : | McAulay Legal |
| First Defendant | : | Rowley Legal |
| Second Defendant | : | Rowley Legal |
| Plaintiff by counterclaim | : | Rowley Legal |
| Defendant by counterclaim | : | McAulay Legal |
Case(s) referred to in decision(s):
Andrew Shelton & Co Pty Ltd v Alpha Heathcare Ltd [2002] VSC 248
Dalgety Australia v Rubin (Unreported, WASC, Library No 5485, 24 August 1984)
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Doric Group Holdings Pty Ltd v Garside [2016] WASC 38
McJannett v Gibbs [2012] WASC 369
Technip Oceania Pty Ltd v Cutmere Pty Ltd [2019] WASC 478
REGISTRAR KINGSLEY:
The plaintiffs claim against the defendant is for a breach of contract, restitution, quantum meruit, monies had and received, misleading and deceptive conduct, and estoppel. The plaintiffs claim damages of $418,805.58 or damages for restitution. The second defendant (Mr Leverett) has brought an application pursuant to O 16 Rules of the Supreme Court 1971 (WA) (RSC), alternatively an application to strike out the statement of claim against him.
Background
The plaintiffs plead that the first defendant (Ms Leverett) and Mr Leverett are the registered proprietors of land at Axford Street, Como. In January 2017 the first plaintiff (Ms Natoli) and Ms Leverett established a company, Build West (WA) Pty Ltd, with the view of small scale redevelopments. The plaintiffs plead that the Build West (WA) appointed the second plaintiff (Mr Natoli) as supervisor.
The plaintiffs plead that, in or around May or June 2017, Ms Leverett made representations as to the value of Axford Street ($615,000) and the monies owing pursuant to a mortgage ($100,000). The plaintiffs plead at par 9 of the statement of claim (SOC) that based on Ms Leverett's representations, the plaintiffs and both defendants made an oral agreement to allow Axford Street to be renovated, used as a display home and then sold. Particulars are given as to the oral discussion between Mr Natoli and Ms Leverett.
At par 10 of the SOC the plaintiffs plead they would renovate Axford Street at their cost but that cost would be repaid to the plaintiffs when Axford Street was sold. The profits from that sale were to be split equally between the plaintiffs and defendants.
At par 12 of the SOC, the plaintiffs plead that renovations were completed by August 2018, and the plaintiffs incurred costs of $361,500 for materials, and an unspecified amount for labour.
The plaintiffs go onto plead that Axford Street was sold in March 2019 for $1,018,000 and no monies have come to plaintiffs. Thus the plaintiffs' claims $418,805.58 being the renovation costs of $361,500 and 50% of the profit of $114,611.16.
Legal principles
Mr Leverett has brought an application pursuant to O 16 RSC and O 20 r 19 RSC. Where those applications are brought the court is not confined by the manner in which the plaintiff has formulated their case on the pleadings and may consider the undisputed facts as well as the facts that are in dispute.[1] Mr Leverett in bringing a summary judgment application bears the legal onus of establishing there is no serious question to be tried on any cause of action raised by the plaintiffs. On an O 16 application the plaintiffs may file an affidavit to show cause why summary judgment should not be granted. Whilst the legal onus and burden of persuasion remains on Mr Leverett the plaintiffs assume an evidentiary onus to show why summary judgment should not be given, and must show on the evidence there exists a triable issue.
[1] Bride v Peat Marwick Mitchell [1989] WAR 383; McJannett v Gibbs [2012] WASC 369.
Doric Group Holdings Pty Ltd v Garside[2] is authority for the proposition that in determining there is a real question to be tried it is not enough for a plaintiff to suggest some evidence as to a necessary fact will or maybe adduced in the future. It must be adduced by the plaintiff on the summary application.
[2] Doric Group Holdings Pty Ltd v Garside [2016] WASC 38.
In relation to an application to strike a pleading, as a general rule a plaintiff is entitled, as of right, to have their case heard, and it is only in cases where, from the outset however the facts are found, there is no basis for the legal conclusion contended for by the plaintiff that the pleading should be struck.[3] A plaintiff must show a reasonable cause of action; if the facts pleaded could give rise to relief then the cause of action would be held to be reasonable. The question then becomes whether the plaintiffs on the pleadings can prove facts which would constitute a cause of action.
[3] Dalgety Australia v Rubin (Unreported, WASC, Library No 5485, 24 August 1984).
The evidence
Mr Leverett has filed two affidavits:
(a)an affidavit sworn on 24 October 2019 (Mr Leverett's first affidavit); and
(b)an affidavit sworn 14 August 2020 (Mr Leverett's second affidavit).
Mr Natoli has filed an affidavit sworn 3 July 2020 (Mr Natoli's affidavit). That affidavit was subject to a number of objections (see notice of objections dated 24 August 2020). However, those objections were not argued at the hearing.
Ms Leverett has filed an affidavit sworn 14 August 2020 (Ms Leverett's affidavit).
An appearance was filed by Mr Leverett on 27 August 2019. Mr Leverett's application for summary judgment was made on 24 October 2019. O 16 r 1 RSC provides that an application under this rule should be made within 21 days of appearance.
Similarly O 20(1)(3) RSC provides that any application to strike a pleading be brought within 21 days of service of the relevant pleading.
The applications are out of time, but the RSC provide that time may be extended (O 3 r 5(1)). The discretion to extend time is enlivened upon evidence being given as to the delay.
The evidence, such as it is, is in Mr Leverett's first affidavit where he refers to the Natolis refusing to respond to a notice to admit facts dated 3 September 2019, notwithstanding repeated requests.
Whilst the evidence is sparse there is sufficient, in my opinion, to warrant an extension of time.
The plaintiffs' claims against Mr Leverett
The plaintiffs have brought a number of claims against Mr Leverett.
Breach of contract
After pleading representations made by Ms Leverett to Mr Natoli[4] the Natolis' go on to plead at par 9 that it is the plaintiffs and defendants who made an oral agreement. There is no written agreement between the parties. The Natoli affidavit and the SOC does not disclose any fact that the second defendant was a party to the contract.
[4] SOC, par 8.
The Natoli affidavit contends that evidence of neighbours maybe adduced at trial as to the alleged behaviour of Mr Leverett, evidence from Mr Leverett's brother-in-law who is not alleged to have been present during the making of the contract, and evidence of labourers on the property.
It would appear that the Natolis are seeking to draw together a coincidence of separate acts to lead to an inference that a contract has been entered into by Mr Leverett.
Mr Leverett submits that as he did not make any representations, and was never present at any meeting at which the representations were made, he could not be liable to the plaintiffs for any consequences arising out of an alleged representations made by Ms Leverett.
Discussion
The evidence is that Ms Leverett and Mr Leverett are the registered proprietors as tenants in common of Axford Street.[5] In her affidavit Ms Leverett attached an email dated 12 July 2019, sent 12.59 pm to a solicitor, Linda Rowley[6] with a copy to the Natolis and Mr Leverett.
[5] Mr Leverett's first affidavit, page 74.
[6] Ms Leverett's affidavit, pages 8 and 9.
The relevant parts of that email are:
After much discussion with all parties I was hoping you could assist us in putting together an agreement for the funds Marco and Rachel Natoli will be putting forward for the completion of the renovation at 64B Axford Street, Como of which the owners are Vicki Marie Leverett and Drew Graham Leverett.
On completion of the renovations we are planning on opening the home as a display for Buildwest WA Pty Ltd of which Rachel and I are directors once this opportunity has been exhausted we will consider the sale of the property at which time we would like to share in the profits of sale?
The opening sentence to the 12 July 2017 email refers to discussion with all parties, and Mr Leverett is included in the list of recipients. The email refers to the fact Ms Leverett and Mr Leverett are the owners of Axford Street. Ms Leverett states that on completing renovations we were planning on opening the home as a display. The email concludes by Ms Leverett stating we will consider the sale of Axford Street and we will share in the profits.
In my opinion it is open for an inference to be drawn that the 'we' in reference to the sale of Axford Street includes Mr Leverett as he would have to join in any transfer, and again the reference to 'we' in relation to sharing in the profits could also refer to Mr Leverett. Mr Leverett is a tenant in common in the home. Again it is open to conclude Mr Leverett joins in opening the home as on display.
In my opinion there would need to be a contextual enquiry not only on the facts, but inferences to be drawn from the facts. That enquiry could not be safely conducted on a summary judgment application.
It is axiomatic that, to ensure even a basic requirement of procedural fairness a pleading must state material facts to support the claim for relief, and define, with clarity and precision, the issues or questions which are in dispute (Technip Oceania Pty Ltd v Cutmere Pty Ltd).[7]
[7] Technip Oceania Pty Ltd v Cutmere Pty Ltd [2019] WASC 478.
The Natolis plead at par 9 SOC that an oral agreement was entered into between the Natolis and both Ms Leverett and Mr Leverett. There are no material facts in par 8 SOC to enable a court to draw a conclusion Mr Leverett was a party to any agreement. There is a bare assertion that the oral agreement entered into in June 2017 includes Mr Leverett.
In my opinion the plea against Mr Leverett in relation to the contract must be struck.
Restitution
The pleas at pars 29 ‑ 31 of the SOC seek a remedy by way of restitution. This would appear to be a claim for unjust enrichment. The basis for the plea of unjust enrichment are pars 8 ‑ 24 of the SOC.
To establish a plea of unjust enrichment, the Natolis must show the existence of an unjust factor.[8] It would appear the only recognised unjust factors are mistake, duress or illegality.[9]
[8] David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, 379.
[9] David Securities Pty Ltd v Commonwealth Bank of Australia (379).
Natoli, in his affidavit, has not deposed to any fact to support the existence of an unjust factor. In my opinion, in the context of the pleaded allegations in pars 8 ‑ 24 of the SOC, and Natoli's affidavit, no unjust factor could be found to exist.
In my opinion Mr Leverett has shown there is no triable issue under this head and judgment be entered for Mr Leverett.
Under the heading Restitution the Natolis also claim the recovery of the value of work and services provided for the purpose of renovating Axford Street (par 32 – 34 SOC).
A plea in quantum meruit arises not from an obligation at law or contract but from a person, Mr Leverett, taking benefit of work done by another, the Natolis.
As a tenant in common it is arguable that Mr Leverett has taken some benefit in the renovations to Axford Street. That being the case I am not prepared to enter judgment for Mr Leverett under this head.
The pleas at pars 32 ‑ 34 are not stated to be in the alternative, and no particulars have been given. Restitution by way of quantum meruit is a cause of action for recovery of a benefit where the contract is invalid or unenforceable. The plea relates to work done services rendered, or materials provided by the Natolis for the benefit of Mr Leverett, who has accepted that work (See Andrew Shelton & Co Pty Ltd v Alpha Heathcare Ltd).[10]
[10] Andrew Shelton & Co Pty Ltd v Alpha Heathcare Ltd [2002] VSC 248.
The pleas in pars 32 - 34 SOC are vague as to what work was done, by whom of the Natolis, and non-existent in terms of particulars of the value of the work done, services rendered, or materials provided. There are no material facts pleaded to enable Mr Leverett to understand the case he has to meet under this plea. Paragraphs 32 - 34 are struck.
Moneys had and received
The Natolis at pars 34 ‑ 37 of the SOC bring a claim for moneys had and received.
In my opinion these pleas are an abuse of process. A plea for money had and received as unjust enrichment has already been pleaded. A plea of moneys had and received can also be available where payment of moneys has occurred but is made under compulsion or under a mistake.
In this context there was no compulsion on the part of the Natolis, and there was no mistake. The Natolis paid moneys to renovate Axford Street for the ultimate sale of Axford Street with repayment of those moneys and a share in the profits.
In my opinion there can be no claim against Mr Leverett under this head and Mr Leverett is entitled to have judgment.
Estoppel
Paragraphs 44 ‑ 48 of the SOC plead an estoppel - that by reason of the conduct of the defendants the Natolis were induced to enter into the contract and expend moneys.
The underlying principle of estoppel is that a promise or representation by one party leads another to assume a certain course of action. It would then be unconscionable for the first party to go back on its promise or representation.
In my opinion the email of 17 July 2017, (and I recognise the email may give rise to more than one meaning), may be sufficient to found an estoppel. It is arguable the email conveyed to the Natolis the impression Mr Leverett was part of the contractual arrangement.
To give rise to an estoppel there must be some certainty required to enable a conclusion that a contractual relationship has arisen. Even where there may be more than one meaning to a representation, there may be an estoppel if it conveys to a reasonable person that, in this case, Mr Leverett was a party to the contract with the Natolis.
As this is also a contextual enquiry, in my opinion, it is inappropriate to deal with the issue by way of summary judgment.
The pleas in pars 44 - 48 SOC do not provide any material fact of the representations the Natolis rely on to found an estoppel. The Natolis must plead the various elements that will lead a court to the conclusion an estoppel exists.
The pleas in pars 44 - 48 SOC do not provide any material fact to enable Mr Leverett to understand the case against him. Those paragraphs are struck.
Conclusion
Having regard to my reasons I come to following conclusions:
1.In relation to the plea for breach of contract the application pursuant to O 16 fails. However, the SOC under this head is struck.
2.For the reasons stated in my opinion, there is no sustainable action by the Natolis in relation to pars 21 - 31 SOC and judgment is entered for Mr Leverett.
3.Paragraphs 32 - 34 SOC arguably could sustain a claim in quantum meruit and judgement will not be entered for Mr Leverett. However pars 32 - 34 SOC for the reasons given are struck.
4.For the reasons given, judgment is entered for Mr Leverett in relation to pars 34 - 37 SOC.
5.I have found that the pleas in pas 44 - 48 SOC give rise to an arguable claim, and judgment will not be entered. However, pars 34 – 37 SOC for the reasons given are struck.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
LF
Court Officer16 OCTOBER 2020
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