Natoli v Leverett [No 2]

[2021] WADC 52

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   NATOLI -v- LEVERETT [No 2] [2021] WADC 52

CORAM:   TROY DCJ

HEARD:   23 APRIL 2021

DELIVERED          :   1 JUNE 2021

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 - Appeal from registrar - Nature of hearing - Summary judgment applications - Adjournment applications - Failure to confer - Agreement - Agreement partly implied by conduct - Intention to create legal relations - Certainty - Unjust enrichment

Legislation:

District Court Rules 2005 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Second defendant's appeal dismissed
Plaintiffs' cross-appeal partially successful

Representation:

Counsel:

First Plaintiff	:	Ms  T Forde
Second Plaintiff	:	Ms T Forde
First Defendant	:	No appearance
Second Defendant	:	Mr P G McGowan
Plaintiff by counterclaim	:	No appearance
Defendant by counterclaim	:	Ms T Forde & 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):

Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209

Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540

Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622

BGC Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2019] WASC 248

Byrne v Australian Airlines Ltd (1995) 185 CLR 410

CVW Group Holdings Pty Ltd v Addison [2011] WASC 267

Doric Group Holdings Pty Ltd v Garside [2016] WASC 38

Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service [2018] WADC 36

Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551

Gerovich v Gerovich (as executor of the estate of Gerovich) [2018] WASC 153

Johnson v Hallam [2015] WASC 149

Kamath v Allight Sykes Landsdale [2019] WADC 98

Lazarevski v North Metropolitan Health Service [2019] WADC 84

LCLA Pty Ltd v Barkay Pty Ltd [2018] WASC 400

Mann v Patterson Constructions Pty Ltd (2019) 373 ALR 1

Masters v Cameron (1954) 91 CLR 353

May & Butcher Ltd v The Queen [1934] 2 KB 17

Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2020] WASC 357

Natoli v Leverett [2020] WADC 135

Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221

Roddan v Shore [2001] WASCA 373

Roude v Helwani [2020] NSWCA 310

Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310

Teng v Clarke ([No 2]) [2020] WASC 217

TLJ v Lai [2018] WASCA 201

TROY DCJ:

Introduction

1. This is an appeal de novo from a decision of Registrar Kingsley refusing summary judgment for the second defendant.[1]  Is the second defendant entitled to summary judgment notwithstanding, assuming, as I must, the most favourable interpretation of the facts from the plaintiffs' perspective, the second plaintiff spent at least 11 months carrying out renovations to a property jointly owned by both defendants, at a cost to the plaintiffs of $361,500, where he anticipated that the plaintiffs would receive a share of the eventual profits, and where the two defendants sold the property, (the value of which had increased significantly as a result of the renovations) and retained all the profit?

The parties

[1] Natoli v Leverett [2020] WADC 135.

1. The first plaintiff Mrs Rachel Natoli and the second plaintiff Mr Marco Natoli are husband and wife.  The first defendant, Mrs Vicki Leverett is the mother of the second defendant, Mr Drew Leverett.

The companies

1. According to the pleadings, in January 2017 Mrs Natoli and Mrs Leverett established a company, Build West (WA) Pty Ltd 'BWWA'.  The purpose was to engage in what is described as 'small scale premium residential building construction and renovation projects'.  BWWA was a successor to a company called Build West Pty Ltd 'Build West'.  Mrs Natoli and Mrs Leverett were the only directors.  Mrs Natoli was a director of BWWA between 16 January 2017 and 29 May 2020.

The property

1. In January 2017 Mrs Leverett and Mr Leverett were the registered proprietors as tenants in common[2] of the land at 64B Axford Street, Como, Western Australia ('the Property').  Mrs Leverett and her late husband had purchased the property in November 2013 with the intention that it be renovated by Build West as a display home.[3]

The alleged agreement

[2] Mr Leverett's first affidavit at par 5.

[3] Mrs Leverett's first affidavit at par 5.

1. The plaintiffs assert that there is an enforceable agreement with both defendants to allow the property to be renovated, used as a display home and then sold.  The plaintiffs' pleaded case is that the plaintiffs would renovate the property at their cost, but that cost would be repaid to them when the property was sold.  The remaining profits from that sale were to be split equally between the plaintiffs and defendants.

2. The fundamental dispute in this case is whether there was any such agreement.  The plaintiffs have now pleaded that the agreement was partly oral, partly in writing and partly to be implied.

The contended for renovations

1. The plaintiffs plead that the renovations were completed by August 2018.  They incurred a cost of $361,500, encompassing materials and Mr Natoli's labour/supervision of the project.  BWWA, it is said, employed Mr Natoli as a building supervisor.  Mr Natoli was not a registered builder at the time that Build West was completing its remaining projects.[4]

The sale of the property and the plaintiffs' claim

[4] Paragraph 9 of reply to first defendant's defence and defence to counterclaim of October 2019.

1. The property was sold in March 2019 for $1,018,000, but the plaintiffs received no monies.  By a writ and statement of claim dated 22 July 2019 the plaintiffs claimed against the defendants damages in the sum of $418,805.58; being the renovation costs of $361,500 and 50% of the total eventual profit of $114,611.16.  Alternatively, damages to be assessed for restitution.

The decision of the registrar and the appeals

1. On 16 October 2020, following a hearing on 4 September 2020, Registrar Kingsley made the following orders, according to the various heads of claim.

Breach of contract

1. This was originally pleaded at pars 8 - 28 of the statement of claim.  It is now represented by pars 5 - 22 of the amended statement of claim of 22 February 2021, to which I will return in detail.  The registrar struck out the paragraphs relating to the pleading of breach of contract but he declined to grant summary judgment for Mr Leverett.

2. On 26 October 2020 Mr Leverett appealed against the decision not to grant summary judgment.  On 18 November 2020, and so out of time, the plaintiffs cross‑appealed the decision to strike out.

Restitution in the alternative to breach of contract

1. This was originally pleaded at pars 29 - 31 of the statement of claim.  It is now represented by pars 23 - 31 of the amended statement of claim.  The registrar granted summary judgment for Mr Leverett.  The plaintiffs have cross‑appealed that decision.

Quantum Meruit

1. This was originally pleaded at pars 32 - 34 of the statement of claim.  It is now represented by pars 23 - 31 of the amended statement of claim.  The registrar struck out those paragraphs but he declined to grant summary judgment for Mr Leverett.  Mr Leverett appealed against the decision not to grant summary judgment.  The plaintiffs have cross‑appealed the decision to strike out.

Wrongful retention of monies

1. This was originally pleaded at pars 35 - 37 of the statement of claim.  It is now represented by pars 23 - 31 of the amended statement of claim.  The registrar granted summary judgment for Mr Leverett.  The plaintiffs have cross‑appealed that decision.

Misleading or deceptive conduct

1. Mr Leverett submits that the registrar overlooked pars 38 ‑ 43 (now pars 32 ‑ 37) which pleaded misleading or deceptive conduct and appeals against the failure to order summary judgment for Mr Leverett under this claim.

Estoppel

1. This was originally pleaded at pars 44 ‑ 49 of the statement of claim.  It is now represented by pars 38 ‑ 46 of the amended statement of claim.  The registrar struck out those paragraphs but he declined to grant summary judgment for Mr Leverett.  Mr Leverett appealed against the decision not to grant summary judgment.  The plaintiffs have cross‑appealed the decision to strike out.[5]

   [5] Orders of 16 October 2020 as settled on 14 January 2021.

2. The cross‑appeal by the plaintiffs[6] has been largely overtaken by the heavily amended statement of claim filed on 22 February 2021.

   [6] 18 November 2020.

3. During the hearing before me on 23 April 2021 I refused the plaintiffs' application to adjourn the appeal.  I will give my reasons for so refusing a little later.

Nature of this appeal

1. The appeal is to be by way of a new hearing of the matter that was before the registrar: District Court Rules 2005 (WA) r 15(6). See also the formalities required by r 15(3). I am satisfied that the observations of Le Miere J in CVW Group Holdings Pty Ltd v Addison[7] analogously apply.[8]  I also apply the observations of Gething DCJ observed in Kamath v Allight Sykes Landsdale.[9]  In essence, I am to treat either party's application as if it was before the court for the first time.  There is no requirement on the second defendant as the party who lodged the appeal, or the plaintiffs who lodged a cross‑appeal to show that the registrar made an error in any of the decisions under appeal.

   [7] CVW Group Holdings Pty Ltd v Addison [2011] WASC 267 [17].

   [8] His Honour cited High Court authority in that regard at [14] and [15].

   [9] Kamath v Allight Sykes Landsdale [2019] WADC 98 [25].

2. As will be seen, there is no new evidence relied upon by the plaintiffs compared with the evidence before the registrar on 4 September 2020.  There are however new pleadings, namely the amended statement of claim of 22 February 2021.

Principles on summary judgment applications

1. Such an application is governed by O 16 r 1 of the Rules of the Supreme Court1971 (WA) (RSC).

2. A party should not ordinarily be denied the opportunity to have their case determined following trial, and for that reason, the jurisdiction to grant summary judgment should be reserved for the clearest of cases, where there is a high degree of certainty about the ultimate outcome of the action if it were allowed to go to trial.  In other words, the question is whether, on the material before the court, it has been demonstrated that the plaintiffs' action should not be permitted to proceed to trial because it is apparent that it must fail.

3. The defendant bringing the summary judgment application bears the legal onus of establishing that there is no serious question to be tried on any cause of action raised by the plaintiff.[10] Under O 16 r 1(2) the defendant is required to file an affidavit verifying the facts upon which the application is based. Mr Leverett did so on 24 October 2019.

   [10] See BGC Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2019] WASC 248 [14].

4. If the plaintiff shows cause against the application for summary judgment by filing an affidavit in response, the plaintiff may assume an evidentiary onus to show why summary judgment should not be given.  In other words, the plaintiff needs to show, on the evidence, that there exists a 'triable issue'.  In doing so, the affidavit must 'condescend upon particulars' - that is, it must set out facts which establish that it is reasonable to permit the plaintiff to pursue the action.[11]  Here, the second plaintiff, Mr Natoli, swore and filed an affidavit with annexures to show cause against the application on 31 July 2020.  There is no affidavit from Mrs Natoli.

   [11] See Gerovich v Gerovich (as executor of the estate of Gerovich) [2018] WASC 153 [30] - [31].

5. While the plaintiff may assume an evidentiary onus, the defendant retains the legal onus of demonstrating that there is no real question to be tried.

6. An application for summary judgment is to be determined on the basis that the version of the facts put forward by the respondent to the application, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action: Johnson v Hallam.[12]

   [12] Johnson v Hallam [2015] WASC 149 [15] (Gething AM) (citations omitted).

7. The court is not bound to accept uncritically as raising a dispute of fact calling for further investigation, every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents or other statements by the deponent: Johnson v Hallam [15].

8. If after argument there remains real uncertainty as to the applicant's right to judgment without further investigation of the facts, summary judgment must be refused: Johnson v Hallam [15].

9. Accordingly an application for summary judgment for a defendant or to strike out a cause of action should be approached with great caution. A claim may be struck out under RSC O 16 r 1 if it is so clearly untenable that it cannot possibly succeed: Alcoa of Australia Ltd v Apache Energy Ltd.[13]  See also, Teng v Clarke([No 2]).[14]  In particular, in that case Kenneth Martin J observed that:

   a part of that extreme step, of course, would follow a denial to the plaintiffs of the usual interlocutory processes of discovery in the lead‑up to a trial.  That is no small matter.

   [13] Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209 [113] (Le Miere J) (citations omitted).

   [14] Teng v Clarke([No 2]) [2020] WASC 217 [25] (Kenneth Martin J).

10. As Kenneth Martin J explained in Teng v Clarke [No 2] at [27]:

    The counterparty (the plaintiffs here) is not to be evaluated in terms of their potentially arguable position supporting a trial, by being shackled exclusively to the state of a current pleading.  The true question is whether upon all the materials (ie, the evidence) put before the court, it can be demonstrated that the plaintiffs' action is, in effect, bound to fail at a trial conducted on those materials.  Essentially, the plaintiffs' difficulties need to be shown as being so manifest that a reasonable adjustment to the current state of a less than perfect statement of claim pleading by an amendment, would not remedy the vulnerability of the case to a summary termination, even viewed at its highest theoretical level for the plaintiffs.  A prevailing conceptual difficulty that cannot be remedied by a feasible amendment may then lead to their action being summarily terminated on the basis that it is hopelessly unarguable, and so, should not be permitted to proceed to a trial - with all the wasteful consequences entailed in pursuing an obviously futile trial exercise.

Statement of issues

1. The issues before me on the appeal were as follows:

   •Does the nature of this appeal, a de novo hearing, permit the plaintiffs to rely upon their amended statement of claim?

   •In considering whether to grant summary judgment for a defendant, is the court's consideration confined to the evidence that presently exists?

   •The reasons for the refusal to grant the plaintiffs' application to adjourn the appeal.

   •The significance, if any, of any failure to confer prior to the original hearing before the registrar.

   •In considering the decision not to grant summary judgment to the second defendant, Mr Leverett for breach of contract, who owned the property at the relevant time?

   •What was its condition as of 2017?

   •Was the asserted agreement partly oral?

   •And/or was it partly in writing?

   •And/or was it partly to be implied by conduct?

   •In considering whether there was an agreement implied by conduct, what is the significance of Mr Leverett's observations about the renovation project?

   •What was discussed in a 26 June 2017 telephone call?

   •What was the significance of the 6 July 2017 and 1 September 2017 emails?

   •What were the duration of the renovations?

   •What was the significance of the discussions between Mr Natoli and Mr Leverett concerning the alfresco?

   •What was the significance of the sale of the property and the benefit to the defendants?

   •Was there an intention to create legal relations and is there certainty?

   •Is it inarguable that there is no properly formed contract for other reasons eg lack of consideration?

   •Is there an evidential basis for the alternative remedy of unjust enrichment?

2. Given that this is a de nova hearing, applying the authorities to which I have made reference, I am satisfied that it is open to the plaintiffs to rely upon their amended statement of claim as opposed to the 24 July 2019 statement of claim that was before the registrar

Is this application entirely confined to the evidence as it currently exists?

1. Based on Doric Group Holdings Pty Ltd v Garside,[15] Mr Leverett submits that in seeking to show that there exists a 'triable issue' it is not enough for the plaintiffs to suggest that evidence will or may be adduced in the future; it must be adduced by the plaintiffs on the summary judgment application.  In that decision Master Sanderson noted that this was the defendant's argument but in dismissing the defendant's application for summary judgment did not categorically endorse it.

   [15] Doric Group Holdings Pty Ltd v Garside [2016] WASC 38 [2] (Master Sanderson).

2. In Doric Group Holdings Pty Ltd v Garside counsel for the defendant referred to the holding of Newnes JA in Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd[16] that it is not open to the court to infer that the requisite evidence exists or what that evidence might be to the evidence that must be adduced by the plaintiff on the summary judgment application.  Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd was not concerned with a summary judgment application.  It was an application for leave to appeal and an appeal against a decision by the master extending the operation of two caveats lodged by the respondent against the title to the appellant's land.  Newnes JA spoke of the obligation of an applicant (in that case the respondent to the appeal) to adduce sufficient evidence to establish that there is a serious question to be tried.  Newnes JA (McLure and Pullin JJA agreeing) held that the respondent failed to establish that there was a serious question to be tried in respect of either caveat and, accordingly, the master erred in the exercise of his discretion in extending the operation of the caveat.

   [16] Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [2009] WASCA 171 [50] - [51].

3. On a summary judgment application, it is certainly the case that the plaintiff is held to its pleadings: Roddan v Shore.[17]  But, as will become clear, (see [159] below for example), determining whether a contractual agreement in this case requires consideration of a number of disputed facts which, it seems to me, can only be conclusively resolved after trial.  I am not satisfied that the holding in Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd requires a court considering a summary judgment application to put to one side the fact that there are substantial disputed matters of fact which, by their nature, cannot be conclusively determined prior to any trial.

   [17] Roddan v Shore [2001] WASCA 373 [31] - [32] (Murray J).

4. Moreover, the ability, of the District Court on appeal to consider evidence that was not available or was not relied upon when the matter came before a registrar on a summary judgment application, clearly emerges from the decision of the Court of Appeal in TLJ v Lai.[18]  In fact it was the presence of such new evidence in that case that was found to be determinative.

   [18] TLJ v Lai [2018] WASCA 201.

1. So for the purposes of a defendant's summary judgment application, the plaintiff is bound by its pleaded case.  Matters which might appear in the evidence but which are not reflected in the statement of claim cannot be used to oppose an application for summary judgment.  Second, matters of fact which are pleaded in the statement of claim must be accepted for the purposes of the summary judgment application.  At trial the plaintiff may fail to establish one or other of the material facts pleaded.  But for the purposes of summary judgment it is assumed those facts will be proved.[19]

   [19]   LCLA Pty Ltd v Barkay Pty Ltd [2018] WASC 400 [2] (Master Sanderson).

2. I consider this matter in light of the pleadings as they currently stand and the evidence as it presently exists.  But I also bear in mind the fact that the disputed facts that emerge from the present evidence are not necessarily capable of resolution, one way or the other, on a summary judgment application.  I do not take into account any matter, that is not currently in evidence and which is not currently reflected in the amended statement of claim.  Because I will be referring to the evidence as it currently stands (with the caveat just noted at [34] - [36] it is convenient at this stage to explain my reasons for refusing to adjourn the appeal hearing.

Decision not to grant an adjournment

Programming orders following the lodging of the appeals

1. The plaintiffs have been on notice since 24 October 2019 that the second defendant seeks summary judgment.  Following the registrar's decision of 16 October 2020 Mr Leverett promptly lodged a notice of appeal.  The plaintiffs' cross‑appeal was lodged out of time.

2. On 8 December Registrar Kubacz ordered that the plaintiffs' appeal and Mr Leverett's appeal be listed before a Judge in Chambers on 17 February 2021 for a half day hearing, with consequential programming orders.  As of 8 December 2020, both sides were seemingly ready to proceed with the appeal.

3. On 9 February 2021 her Honour Judge Russell, by consent, ordered that the hearing listed for 17 February 2021 be adjourned to the first available date after 16 April 2021.  Those acting for the plaintiffs, on the face of it, saw utility in the programming orders made by her Honour Judge Russell, which required certain things of them.  By consent, the plaintiffs would file and serve any further evidence they proposed to rely upon by 19 February 2021.  When the matter came before me on 23 April 2021 the plaintiffs had not filed or served any further evidence.

4. As of 15 February 2021, each side was ready for an appeal on 23 April 2021.[20]

The plaintiffs' approach post 22 February 2021

[20] On 15 February 2021 the appeal was formally re-listed before a Judge in Chambers on Friday 23 April 2021 at 11.30 am. There were no changes to the estimated hearing time of half a day or to the programming orders of 9 February 2021.

1. Rather than comply with the programming orders, what instead happened was that counsel for the plaintiffs, on instructions, settled the amended statement of claim that was filed on 22 February 2021.  I accept that those acting for the plaintiffs genuinely considered that the most efficient way to proceed was to amend the statement of claim and thereby render all the interlocutory appeals superfluous.[21]

   [21] See the 6 page affidavit, with 134 pages of enclosures, in support of the plaintiffs' application for a case management hearing filed on 9 April 2021, with the accompanying letter from Ms Maggie-Claire Shipp, solicitor for the plaintiffs.

2. In her 9 April 2021 letter Ms Shipp stated that as the plaintiffs' solicitors she wrote to the defendants' solicitor on 23 February 2021 in those terms and enclosed a minute of consent orders.  A consent order was submitted to this court on 1 April 2021, but only to extend the entry for trial milestone to 30 June 2021, given the pending appeals.

3. On 14 April 2021 a court officer wrote to the plaintiffs' solicitors, copied to those acting for the defendants, to advise that a registrar had suggested the plaintiffs lodge a chamber summons requesting the orders sought in the 9 April 2021 letter.  And that such summons would be heard on 22 April 2021 at 10.00 am.

4. The programming orders had required Mr Leverett to file any further evidence he proposes to rely upon by 5 March 2021.  On 11 March 2021 Mr Leverett did so, albeit six days late, by filing three separate affidavits.[22]  The plaintiffs were to file any responsive evidence by 19 March 2021.  They did not do so.

   [22] Third affidavit of Mr Leverett, second affidavit of Mrs Leverett and affidavit of Ms Tayla Drury.

5. The plaintiffs were to file and serve written submissions on or before 2 April 2021.  The plaintiffs only did so on the morning of the appeal, 23 April 2021, having unsuccessfully applied the previous day for the matter to be adjourned.

6. Mr Leverett was to file and serve written submissions on or before 2 April 2021.  The submissions were filed on 12 April.  They substantially exceeded the limit for written submissions for an appeal.  Mr Leverett's solicitor for the second defendant explained the reason for the delay in filing an affidavit.  Essentially because, it was asserted, Mr Leverett was waiting for evidence to be filed by the plaintiffs.

7. It should be noted that during the hearing before the registrar on 4 September 2020 then counsel for the plaintiffs had proposed, and the registrar had invited counsel for Mr Leverett's consideration, to an amendment to the statement of claim.  Such amendment would expressly plead that the first defendant was acting on behalf of the second defendant.  Counsel for the second defendant made it abundantly clear that the application would continue whether or not there was any attempt to amend the pleadings.

8. I accept that attempts were made on behalf of the plaintiffs to confer with Mr Leverett's lawyers.[23]  However the latter's lack of enthusiasm for resolving matters in this way was fairly predictable.  And no attempt at conferral can make up for the fact that programming orders made by consent, and on the basis that the appeal was going ahead on 23 April 2021, were ignored by the plaintiffs.  This court was not notified until very late in the day that the plaintiffs were effectively embarking upon an alternative strategy.  No application was made to the court by the plaintiffs seeking relief from the obligations to comply with Judge Russell's orders of 9 February 2021 or seeking to vacate the appeal hearing.

The application to adjourn on the day before the appeal

[23] As set out in Ms Shipp's affidavit, 9 April 2021.

1. I learned that there was likely to be an application to a registrar, under the guise of seeking a case management hearing, to seek orders that would be incompatible with the appeal occurring on 23 April 2021.  On 19 April 2021, through my associate, I advised that counsel for the plaintiffs should not assume that the appeal would be adjourned.

2. On 22 April Mr Leverett filed amended submissions which, while still exceeding the limit imposed by the District Court Rules now extended to effectively 20 pages, as opposed to 44 pages.  On the same date, the plaintiffs' application for an adjournment of the hearing listed for 23 April 2021 was dismissed.[24]  That application was in effect renewed before me the following day.

   [24] On 22 April 2021 Deputy Registrar Hewitt ordered that the plaintiffs' application for an adjournment of the hearing listed for 23 April 2021 be dismissed with costs.

3. At 8.11 am on 23 April the plaintiffs filed written submissions together with written notice of objections to certain aspects of the affidavits relied upon by Mr Leverett.  By these submissions the plaintiffs contended that the appeal was to be heard upon the claim and evidence currently before the court, as opposed to an assessment of the position as it was when the registrar made the orders that are under challenge.  In particular, the plaintiffs asserted that the amended statement of claim filed 22 February 2021 superseded the original statement of claim.

The application to adjourn at the appeal hearing

1. The plaintiffs' alternative position, was that the appeal, listed as it was by consent on 9 February 2021 and then 15 February 2021, be adjourned to enable further evidence and submissions to be filed to address the substantive matters.

2. No doubt the plaintiffs were disadvantaged by the fact that written submissions on their behalf were only finalised on the morning of the hearing.  But that was as a result of the plaintiffs choosing not to comply with an eminently achievable timetable.

3. When I considered an adjournment under r 57(2)(m) of the District Court Rules I was required to evaluate the interests of justice informed by the goals and objects of the District Court Rules.  These rules seek to facilitate appeals being conducted efficiently, economically and expeditiously.  The plaintiffs have not acted in a timely way.  They have ignored programming orders that they consented to.  This litigation has already been drawn out. Further delay in the final resolution of this would be prejudicial to the defendants. Granting an adjournment, I found, would be inconsistent with the public interest in the efficient use of the resources of the court.

4. For the reasons already given, in my view it was open to the plaintiffs to adduce any additional evidence on this appeal.  But they did not do so.  Programming orders permitting them to do so were extended by consent but disregarded.  In terms, the plaintiffs had from 26 October 2020 to 23 April 2021 to obtain a further affidavit from Mr Natoli or an affidavit from Mrs Natoli.  Mr Leverett had made the basis for seeking summary judgment abundantly clear at the hearing of 4 September 2020.  The opportunity to respond to those contentions through the filing of further evidence by way of affidavit(s) was readily open.

Lack of conferral?

1. The plaintiffs also asserted that Mr Leverett's alleged failure to confer with the plaintiffs prior to the hearing before Registrar Kingsley prevents him from challenging the outcome of that hearing.

2. I explored this with counsel at the hearing before me.  Counsel submitted that because there had been a failure to confer prior to the hearing before Registrar Kingsley, the appeal could not succeed.

3. In written submissions at par 22 counsel contended,

   Without knowing the reasons for making the application, other than a bare assertion there was no cause of action against the second defendant and no detail of which ground the second defendant relied upon in O 20 r 19(1) RSC as to striking out the paragraphs set out in the application or the reasons for seeking to do so; the plaintiffs were denied the opportunity to respond, make any corrections or avoid the application.

4. Counsel for the plaintiffs referred to Master Sanderson's observations in Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd.[25]  But the plaintiffs did not invoke that suggested principle before the registrar.  There was no application by the plaintiffs on 4 September 2020 to adjourn the hearing.  It was a fully contested hearing.  The registrar specifically asked then counsel for the plaintiffs if she wanted more time to put in further evidence.  Counsel declined.[26]

   [25] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2020] WASC 357 [26].

   [26] ts 24 of 4 September 2020 hearing.

5. In my view, the remedy for inadequate conferral is an adjournment with costs against the party at fault.  Not, effectively an embargo on the right to appeal from any decision where there was been inadequate conferral before the hearing that results in that decision.

Summary judgment for breach of contract – Paragraphs 5 ‑ 22 of the amended statement of claim

1. I will consider the decision not to grant summary judgment to the second defendant, Mr Leverett for breach of contract first.  On the amended statement of claim, coupled with Mr Natoli's affidavit, is the plaintiffs' contention that Mr Leverett was party to a contract (pleaded in the amended statement of claim as 'The Agreement') with them, which he then breached, hopelessly unarguable? And so, should not be permitted to proceed to a trial?[27]

   [27] Teng at [27] (Kenneth Martin J).

2. I repeat the guiding principles.  Has Mr Leverett satisfied me that there is no real question to be tried on the issue of whether he was a party to a properly formed legal contract, which he breached? Has he demonstrated that the plaintiffs' action is, in effect, bound to fail at a trial conducted on the materials currently before me?

3. Mr Leverett contends in his written submissions that the assertions in Mr Natoli's affidavit are comprehensively answered in the affidavits filed on behalf of Mr Leverett.  An application for summary judgment, however, is to be determined on the basis that the version of the facts put forward by the plaintiffs, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action.

4. If, after argument and analysis there remains real uncertainty as to Mr Leverett's right to judgment, without further investigation of the facts, then summary judgment must be refused.

5. An application for summary judgment for a defendant should be approached with great caution.  To accede to an application will deny to the plaintiffs the usual interlocutory processes of discovery in the lead‑up to a trial.

6. Paragraphs 1 ‑ 4 of the amended statement of claim introduce the parties.  The pleaded breach of contract is set out at pars 5 ‑ 22.

The ownership of the property and its state of disrepair

1. It does not seem to be controversial that, as pleaded, at all relevant times the second defendant was one of the registered proprietors of the property as a tenant in common as to one half share.  He was also one of the mortgagors.

2. Paragraph 8 of the amended statement of claim asserts that in or about 2015, but prior to May 2017, the defendants had, through Build West, undertaken renovations to the property (which I take to be the house on the property).  Because the renovations were unfinished, the property (house) was uninhabitable.  In particular the property was completely gutted, partially demolished, a section of the roof and windows were missing and it had been damaged due to water ingress.

3. Mr Natoli states in his affidavit at pars 25 ‑ 29 that at some unspecified time he went to the property to observe it.  The renovations were approximately a quarter complete and the house was uninhabitable.  There was rubbish and building material everywhere.  Part of the roof had been removed without protecting the ceilings.  There was no glass in the windows.

4. Paragraph 9 of the amended statement of claim asserts that prior to May or June 2017, the plaintiffs and the defendants each knew that the house bult [sic] on the property was in a derelict and uninhabitable condition and required significant money expended on it to renovate it to be habitable and/or of a standard sufficient for it to be used as a display home for a premium builder, such as BWWA would be.  This does not appear to be controversial.

5. Paragraph 10 of the amended statement of claim asserts that in or around May or June 2017, Mrs Leverett represented to Mr Natoli that the property had been valued by Westpac Bank Ltd (Westpac) at $625,000.  She showed him a contemporaneous Westpac valuation. She also represented that Westpac held a mortgage over the property which secured a loan for $100,000.  Further, that the Property was not cross‑collateralised because Mr Leverett was also on the title and the Mortgage.

6. Mr Natoli states in his affidavit at pars 16 ‑ 29 that Mrs Leverett told him that along with her late husband she had purchased the property for her son, the second defendant.  Their son had been on the land title.  When her husband died, she and her son owned the property together.

7. The material contained at Annexure 'MAN 1' to the Natoli affidavit indicates that both defendants were registered owners of the property.  They do not permit an inference, as is in essence asserted at pars 18.2 ‑ 18.3 of the Natoli affidavit, that Mrs Leverett regarded the property as belonging entirely to Mr Leverett.  Nor do they permit an inference that BWWA was paying for the renovations of the property in order to ensure that Mr Leverett had a house of a similar value to his sister.

The alleged agreement

1. Critically, par 11, as very substantially amended, now asserts that in or around May or June 2017, in reliance on Mrs Leverett's representations concerning the value of the property, the extent of the mortgage and that it was not cross‑collateralised, the plaintiffs entered into an agreement with both defendants.  The plaintiffs would arrange and pay for the renovation of the property.  It would be used as a display home for BWWA and then sold at a later unspecified date to be agreed between the parties.

2. The agreement is pleaded as partly oral, partly in writing and partly to be implied: par 11(a) of the amended statement of claim.  The express terms of the Agreement are pleaded at pars 13.1 ‑ 13.9:

   13.1the plaintiffs would complete the Renovation Works on the Property;

   13.2.the Renovation Works were to be based off the plans and drawings for the Unfinished Renovations, with further design details to be discussed between Ms Leverett and Mr Natoli;

   13.3.the materials and services used for the Renovation Works, apart from those provided by Mr Natoli, were to be based on quotes used by the Defendants during the Unfinished Renovations;

   13.4.the Renovation Works were to be sourced through the Company;

   13.5.the plaintiffs were to pay for the Renovation Works at their own cost, by paying to the Company all sums required for the goods and materials supplied and invoices rendered to it for the Renovation Works;

   13.6.once the Renovation Works were complete, the Property would be used as a display home for the Company;

   13.7.the Westpac valuation of $625,000 would be the baseline value of the Property at the commencement of the Renovation Works and would be the amount notionally contributed by the defendants to the project;

   13.8.the Property would then be sold;

   13.9.when the Property was sold and settled, the proceeds of sale would be applied as follows:

   13.9.1.first, the defendants would receive $625,000 from the proceeds of the sale of the Property; from which they would use to pay out the amount secured by the Mortgage over the Property (step 1);

   13.9.2.second, the amount paid by the plaintiffs for the cost of the renovation would be repaid reimbursed to them; from the proceeds of the sale (step 2); and

   13.9.3.third, the money remaining monies after step 1 and step 2 would be distributed in equal shares to the plaintiffs and to the defendants (step 3).

3. There appears to be an inherent contradiction in the amended statement of claim. It is not clear whether the agreement was partly concluded in writing, namely the 6 July 2017 email as pleaded at par [11](c). Or whether that email confirmed the terms of an (earlier) Agreement, as seemingly pleaded at par 14.

4. Although it was Mrs Leverett, not Mr Leverett who made the representations, it is said that based on her representations, the plaintiffs and both defendants made this agreement.

5. The plaintiffs admit that Mr Leverett did not make any of the representations originally set out at par 8 of the original statement of claim (which are largely preserved in par 10 of the amended statement of claim).  They admit that Mr Leverett was never present at any meeting at which the representations were made.[28]

   [28] Paragraph 5 of the Reply to Second Defendant's Defence.

6. The plaintiffs have now pleaded (pars 11(b)(ii)A and 12) that Mrs Leverett held herself out in communications with each of the plaintiffs as entering an oral agreement on behalf of both defendants.

Oral agreement

1. The plaintiffs say that the oral agreement comprised of discussions between Mr Natoli (on his own behalf and on behalf of Mrs Natoli) and Mrs Leverett (said to be on her own behalf and on behalf of Mr Leverett as the co-registered owner of the property).

1. Paragraph 11 and par 11(b)(i) and par 11(b)(ii) of the amended statement of claim plead that the oral agreement is comprised of oral discussions up to and including June 2017 and in June-July 2017.

2. Paragraph 11(b)(i) pleads the substance of the discussions as during oral discussions between Ms Leverett and Mr Natoli at the BWWA offices, Mr Natoli proposed on behalf of both plaintiffs renovating the property to use as a display home.  Mrs Leverett accepted the proposal in principle on behalf of both defendants subject to terms.  Mrs Leverett provided Mr Natoli with details of the value of the property and its encumbrances.  The terms of the agreement were negotiated, with each of Mrs Leverett and Mr Natoli conveying the content of the negotiations to Mr Leverett and Mrs Natoli respectively.

3. Paragraph 11(b)(ii) pleads that during further oral discussions between Mrs Leverett and Mrs Natoli at the offices in June to July 2017, Mrs Leverett expressly confirmed that Mr Leverett was aware that she  was negotiating on his behalf and she had authority to do so.  Mrs Leverett and Mrs Natoli agreed that communications about the design and build process for the renovation works would be substantially between Mr Natoli and Mrs Leverett.  It would be based off obtaining prices for the works set out in the quotes received and following the plans and drawings prepared in 2015 for some earlier unfinished renovations.

4. The background to the contended oral discussions emerges from par 12 of the Natoli affidavit.  In around October 2016 Mr Natoli attended a meeting at the Buildwest office along with both defendants and a former employee of his, Mr Alex Gray.  This office subsequently became the BWWA office. In par 15 of his affidavit Mr Natoli refers, without any particularisation, to casually helping Mrs Leverett and Buildwest over a period of four months.

5. According to par 30 of his affidavit, in early 2017 Mr Natoli would regularly meet Mrs Leverett at the office generally after 3.30 pm.  This was after Mr Natoli had completed his unspecified Buildwest work on site for the day.  It is not specified what work that was and when it had been agreed.  All that is said is that Mr Natoli's former employee Mr Gray had asked him if he could come and help. And that there was a meeting in October 2016.  From those observations, the affidavit jumps to an assertion that over four months, in a period that is not defined, Mr Natoli was casually helping Mrs Leverett.

6. According to par 30.1 of his affidavit, in early 2017 Mr Natoli suggested to Mrs Leverett that they renovate the property to use it as a display home for the company.  According to par 30.2 in or about June 2017 Mrs Leverett showed him a valuation for the property.  Mr Natoli believed that on the front page was a valuation of $615,000.  According to par 30.3 she informed him that the property was in her personal name and that of her son's.  There was a mortgage of $100,000.  According to par 30.4 Mr Natoli asked Mrs Leverett to confirm the mortgage was in that amount.  Mrs Leverett said it was not cross‑collateralised because her son was on the title and the mortgage.

7. According to par 30.6 Mr Natoli was never aware of a $400,000 loan secured against the property.  He told Mrs Leverett (par 30.7) that the plaintiffs would contribute the money and his supervision to pay for the renovations.  The value of the property at $615,000 would be the defendants' contribution.

8. According to par 30.9 Mr Natoli told Mrs Leverett that whatever was left over from the sale of the property would be split.

9. According to par 30.10 Mrs Leverett said words to the effect that the defendants would pay the plaintiffs the costs of the renovations and split the proceeds once the property was sold.

10. According to par 30.11 Mr Natoli understood that there would be a written agreement drafted by a lawyer but that the renovations would commence on the basis of the oral discussions, notwithstanding the absence of a written agreement.

11. For the purpose of a summary judgment application, there is a basis for the contention that there were oral discussions, as Mr Natoli described, between him and Mrs Leverett.  And that Mrs Leverett said that the defendants would pay the plaintiffs the costs of the renovations and split the proceeds once the property was sold.

12. On this basis, the express terms, as pleaded, that could be encompassed by an oral agreement were confined to:

    •the plaintiffs would complete the renovation works on the Property: par 13.1 of the amended statement of claim;

    •The plaintiffs were to pay for the Renovation Works at their own cost: part of par 13.5.

    •The Property would then be sold.  When the Property was sold and settled, the amount paid by the plaintiffs for the cost of the renovation would be reimbursed to them from the proceeds of the sale.  The remaining monies would be distributed in equal shares to the plaintiffs and to the defendants: parts of pars 13.8 and 13.9.

13. I will consider whether it is at least possible that Mr Leverett agreed to be bound by such an oral agreement a little later.

Written agreement?

1. Insofar as the agreement was in writing, the plaintiffs relied, as pleaded at par 11(c) upon an email sent on 6 July 2017 at 12.58 pm by Mrs Leverett to Ms Linda Rowley, copied to Mr Natoli, Mrs Natoli and Mr Leverett.  Ms Rowley is a legal practitioner who has had carriage of this matter on behalf of Mr Leverett throughout these proceedings.

2. The plaintiffs do not explain how this email is capable of, even in conjunction with oral discussions and implied conduct, forming the alleged agreement. I set out the content of the email at [127] below.

3. Whether this email forms part of the evidence from which an inference can be drawn that Mr Leverett agreed to be bound by Mrs Leverett is something that I will consider a little later.  But, I do not consider this email to be capable of being part of an agreement.

4. The plaintiffs are entitled to place heavy reliance on this email as evidence that as of 6 July 2017 there was no concluded oral/implied agreement.  They are entitled to contend that was why a lawyer's assistance was being sought to draft an agreement to reflect a proposal that the plaintiffs would advance funds to complete renovations at the property.  I will consider this argument as part of the overall matrix of facts in determining whether to accede to the application for summary judgment.

5. There is no basis for the assertion in the amended statement of claim that the agreement was partly in writing.

Is it arguable that there was an implied agreement?

1. On the evidence before me, the oral agreement is confined to the matters set out at [94]. In the absence of a written agreement, the plaintiff's case is that the remaining express terms are to be implied by conduct. These are as follows:

   •that the 'Renovation Works' were to be based off the plans and drawings for the 'Unfinished Renovations', with further design details to be discussed between Ms Leverett and Mr Natoli;

   •That the materials and services used for the Renovation Works, apart from those provided by Mr Natoli, were to be based on quotes used by the defendants during the unfinished renovations.

   •That the Renovation Works were to be sourced through BWWA.

   •That the plaintiffs would pay BWWA all sums required for the goods and materials supplied and invoices rendered to it for the Renovation Works.

   •That once the Renovation Works were complete, the Property would be used as a display home for the Company.

   •That the Westpac valuation of $625,000 would be the baseline value of the Property at the commencement of the Renovation Works and would be the amount notionally contributed by the defendants to the project.

   •That the defendants would receive $625,000 from the proceeds of the sale of the Property from which they would use to pay out the amount secured by the Mortgage over the Property.

   •The plaintiffs' argument that the agreement was partially implied by conduct relies in combination on a number of matters as pleaded at pars 11(d)(i) ‑ 11(d)(xiii).

2. The argument that there is a real question to be tried on the issue of whether Mr Leverett's conduct constitutes an implied agreement to the terms pleaded at par 13 of the amended statement of claim is inextricably linked to the assertion that he agreed to be bound to the alleged oral/implied agreement.  This argument clearly involves inferential reasoning.

3. By par 12 of the amended statement of claim, the plaintiffs plead that at the time that the agreement contended for was formed, Mrs Leverett had authority to act on behalf of Mr Leverett in dealing with the property.  Mrs Leverett negotiated on behalf of Mr Leverett.  She conveyed to the plaintiffs that she was acting on behalf of Mr Leverett and that she was offering and accepting negotiated terms on behalf of Mr Leverett.

4. It is not arguable that Mr Leverett ever expressly declared himself to be bound.  Accordingly, the proposition at par 12.7 that Mr Leverett agreed to be bound by the agreement is based on inferential reasoning.

5. In Lazarevski v North Metropolitan Health Service[29] I quoted from part of the judgment of Gething DCJ in Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service[30] where his Honour gathered a number of authorities to the following effect.

   [29] Lazarevski v North Metropolitan Health Service [2019] WADC 84 [250].

   [30] Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service [2018] WADC 36.

6. Inferences from actual facts that are proved are just as much part of the evidence as those facts themselves.  In order to draw an inference, the court must be satisfied that the circumstances raise a more probable inference in favour of what is alleged.  Where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference.  Characterisation of a reasoning process between permissible inference and conjecture often occurs on a continuum, in which there may be no bright line division.  The drawing of an inference is an assessment of what is human experience, rather than a mathematical or scientific calculation. If the court is satisfied that there are two conflicting inferences of equal probability, that would not be sufficient to make a finding on the balance of probabilities.  This is because the choice between them would be a matter of conjecture.

7. The fact that no alternative cause or hypothesis is established or suggested in the evidence is a significant circumstance in favour of drawing an inference.  Evidence of possibility is admissible as part of the factual basis for an inference.  The sequence of events may be called in aid of drawing an inference.  A finding may be inferred from a series of primary facts each of which is not of itself sufficient to found the inference, but, when taken together, form the basis for a reasonable and definite inference.

8. The appropriate test for whether there is an agreement implied by conduct remains as identified in Byrne v Australian Airlines Ltd.[31]

   [31] Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 422 (Brennan CJ, Dawson & Toohey JJ).

9. The implication relied upon by the plaintiffs is to be based upon the presumed or imputed intention of the parties.  The implication must be reasonable and equitable.  It must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it.  It must be so obvious that it goes without saying.  It must be capable of clear expression.  It must not contradict any express term of the contract.  There is a degree of overlap.  Further, such a rigid approach should be avoided in cases (such as the present) where there is no formal contract.

10. Where the contract is not in writing and is oral or partly oral, or it appears that the parties themselves did not reduce their agreement to a complete written form, caution is required against an automatic or rigid application of the cumulative criteria I have just identified at [110].

11. In a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case.

12. Further, as noted by McHugh and Gummow JJ at (442), in such situations, the first task is to consider the evidence and find the relevant express terms.  Some terms may be inferred from the evidence of a course of dealing between the parties.  It may be apparent that the parties have not spelled out all the terms of their contract, but have left some or most of them to be inferred or implied.

13. If, as is the case here, the contract has not been reduced to complete (or in this case any) written form, the question is whether the implication of the particular term is necessary for the reasonable or effective operation of the contract in the circumstances of the case; only where this can be seen to be true, will the term be implied.

What inferences can be drawn from Mr Leverett's alleged conduct?

1. Mr Natoli's affidavit is the only evidentiary material relied upon by the plaintiffs.  It contains some material that could not possibly permit the inference the plaintiffs contended for.  There are references at par 20 to neighbours calling the police to complain about Mr Leverett holding parties at the property.  At this stage that is inadmissible hearsay. Similarly, the reference at par 32 to Mr Leverett's wife apparently working for Ms Rowley, who apparently shared the BWWA office and whose desk was apparently some 4 m from where relevant discussions took place, is incapable of contributing to the evidence from which the contended for inference might be drawn.

2. I remind myself that on an application for summary judgment is to be determined on the basis that the version of the facts put forward by the plaintiffs, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action.

3. I accept that as pleaded at par 11(d)(i) Mr and Mrs Leverett co‑owned the property at the time of the alleged agreement.

4. I accept that as pleaded at par 11(d)(iii) at the relevant time Mr and Mrs Leverett knew of the state of disrepair of the house on the property.  And that they knew that to make the house habitable would require the expenditure of significant amounts of money.

5. I proceed on the basis that as pleaded at par 11(d)(viii) Mrs Leverett supplied the quotes, plans and drawings to Mr Natoli from the Unfinished Renovations for the purposed of procuring the Renovation Works: pars 46 ‑ 49 of Mr Natoli's affidavit.

Mr Leverett's observations about the renovation project

1. I proceed on the basis that as contended at par 31 of Mr Natoli's affidavit, Mrs Leverett said words to the effect that she was speaking to Mr Leverett about the deal.  It is open to me to infer that she did speak to him.

2. I proceed on the basis that the assertion as pleaded at par 11(d)(xi) I that Mr Leverett told Mr Natoli that he expected that he would receive a share of the profits once the renovations were complete and the property was sold, arises by implication from par 95 of his affidavit. See also [140] below.

The 26 June 2017 telephone call

1. The plaintiffs plead at  par [11](d)(xi)E that there were communications by telephone, text messages and email between Mr Leverett and Mr Natoli as to various aspects of the Renovation Works.  At this point I am only prepared to proceed on the basis of telephone calls on 26 June 2017 as contended at par 38 of Mr Natoli's affidavit and on one other occasion as set out at paras 115 ‑ 118 of his affidavit.

2. I proceed on the basis that, as contended at par 39 of Mr Natoli's affidavit, the 26 June 2017 telephone call was the same day that Mrs Leverett had told him, as alleged at par 30.10 that Mrs Leverett and Mr Leverett would pay Mr and Mrs Natoli the costs of the renovations and split the proceeds once the property was sold.

3. I proceed on the basis that as contended at par 41 of Mr Natoli's affidavit, Mr Leverett said words to the effect of '(when it was) finished it should get about 1.55 million.'  But to get this, the property would need to be 'all specced up' with automated curtains and similar features.

4. I proceed on the basis that as contended at par 42 of Mr Natoli's affidavit Mr Leverett told Mr Natoli that he was happy that Mr Natoli had taken over the project from his brother in law, Mr Middleton.  I do not at present discern the evidential basis for the assertion as is pleaded at par 11(d)(xi)H that Mr Leverett informed Mr Natoli and Ms Natoli that 'he was happy with the renovations they were doing as he had lost interest in the project'.  Mr Natoli says that Mr Leverett expressed 'happiness' but not 'loss of interest.'

5. I proceed on the basis that as contended at par 45 of Mr Natoli's affidavit Mr Natoli told Mr Leverett that he thought that the alfresco should become part of the interior of the house, but that Mr Leverett disagreed.

The 6 July 2017 email

1. I accept that on 6 July 2017 Mrs Leverett sent an email[32] to the lawyer Ms Rowley which was copied to the plaintiffs and Mr Leverett and which read:

   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?

   [32] As pleaded at pars 11(d)(iv) - 11(d)(v).

2. I proceed on the basis that a reasonable inference open on the evidence is that Mrs Leverett's use of the word 'we' includes Mr Leverett.  I readily accept that there is a competing inference that 'we' is a reference to the plaintiffs and Mrs Leverett who were embarking on a business project through BWWA of which Mrs Natoli and Mrs Leverett (but not Mr Leverett) were directors.

3. Given that this is a summary judgment application, in my view it is not possible to exclude the inference that Mrs Leverett was telling Ms Rowley that on completion of the renovations, Mrs Leverett and Mr Leverett were planning on opening the home as a display home for BWWA.  And that once that opportunity had been exhausted Mrs Leverett and Mr Leverett would consider the sale of the property, at which time they would like to share in the profits of sale.

4. I accept however that there is nothing in the content of this email that calls for a response from Mr Leverett.  In my view the absence of any response by him cannot inferentially constitute acceptance by him of the content of the email or any particular intention on the part of Mrs Leverett.

The 1 September 2017 email

1. I accept that on 1 September 2017 a lawyer, Ms Alana Dowley, replied by email to an earlier (date unknown) email that Mrs Leverett had sent her.  Ms Dowley's email was sent to Mrs Leverett, copied to Mr Natoli but not to Mr Leverett.[33] This email seemingly contains part of Mrs Leverett's earlier email which is copied and pasted into this email with Ms Dowley's' recommendations.  It reads as follows:

   On(e) other matter you may be able to assist us with.  Marco and Rachel are funding the cost of a renovation at Axford Street, a property owned by myself and Drew.

   We need some sort of agreement written up to clarify our arrangement as the total cost is unknow(n.) I was wondering if you may have some ideas for how we could go about this?

   Once completed we are going to open it as a display for 12 months and then we may plan to sell at which time we will share in the profit of the sale? I imagine having an agreement that can be amended once completed and we have a final cost?

   [33] Attachment MAN 3 to Mr Natoli's affidavit.

1. Ms Dowley then gave some advice in the body of this email.  It is common ground that no written agreement was ever prepared.

2. It is open to the plaintiffs to contend that it is implicit in this communication that both the plaintiffs and Mrs Leverett contemplated a future written agreement setting out those terms.  It is open to the plaintiffs to argue that it is striking that the plaintiffs never communicated with Mr Leverett or with Ms Dowley to indicate that they had in fact reached a firm agreement on the cost of the renovations and/or the mechanism for dividing the profits.

The duration of the renovations

1. I note that it is pleaded at par 11(d)(vi) that the renovations of the property continued for a period of 15 ‑ 16 months from about 1 July 2017 until about October 2018.  And that this was done under the direct supervision of Mr Natoli, as well as utilising his labour for some of the renovation works.  I note that it is pleaded at par 15 that this was on a full-time basis except for two separate specified periods of three weeks.  Mr Natoli's affidavit[34] is confined to establishing that the work began in or about August 2017 and was still continuing when he took a holiday from 19 June to 8 July 2018.

   [34] At pars 71 and 112.

2. I note that it is pleaded at par 11(d)(vii) that the plaintiffs paid or advanced to BWWA $361,500 for the renovation works as set out in Annexure A.  BWWA then used that advanced sum to pay for materials, labour and the cost of contract tradespersons.  Details of the amounts paid by BWWA are set out in the spreadsheet in Annexure A.

Discussions between Mr Natoli and Mr Leverett concerning the property, in particular the alfresco

1. I note that Mr Natoli concedes at par 57 of his affidavit that he never explicitly told Mr Leverett the amount of money that he had invested into the renovations.  And that as he states at pars 63 - 66, he never saw Mr Leverett do any physical work on the renovations.  I proceed on the basis that Mr Natoli met Mr Leverett on site only a few times.  And that he discussed the renovations with him from time to time.

2. With respect to those discussions, I proceed on the basis that as Mr Natoli states at pars 74 - 75, in August 2017, Mr Leverett attended the property and expressed approval for the work that was being done to the fireplace.  I proceed on the basis that as Mr Natoli states at pars 77 - 80 the two men discussed moving the kitchen ceiling and the nature of the ceiling.  And that Mr Natoli told Mr Leverett, 'wait until I'm finished you'll understand more.'

3. I proceed on the basis that as Mr Natoli states at par 81, in August or September 2017 the two men again met at the property, although this time Mrs Leverett was there as well.[35]  I proceed on the basis that Mr Natoli and Mr Leverett disagreed about the size of the external doorway: pars 82 - 84.

   [35] Reflected in pleadings at par 11(d)(xi) B.

4. I proceed on the basis that as Mr Natoli states at pars 85 - 88, pars 91 ‑ 94, and par 96 the two men disagreed on whether the alfresco should be enclosed as part of the house.  And that, as set out at pars 89 ‑ 91, they also disagreed on whether a focal point such as a water feature at the side of the property would be useful.[36]

   [36] Reflected in pleadings at par 11(d)(xi) C - D.

5. I proceed on the basis that as Mr Natoli states at par 95 in the context of the disagreement about the alfresco, Mr Leverett said it didn't matter what they spent because 'we (my emphasis) will end up with $1.55 million'.

6. I proceed on the basis that as Mr Natoli states at pars 97 ‑ 99 the discussions about the alfresco continued with Mr Leverett at a meeting subsequently at the BWWA office.

7. I proceed on the basis that as Mr Natoli states at pars 110 ‑ 112, at some point before 19 June 2018 Mrs Leverett advised Mr Natoli that Mr Leverett thought it would be better if a deck was installed rather than a spa.

8. I proceed on the basis that as Mr Natoli states at pars 115 ‑ 118[37] there was a second telephone call with Mr Leverett concerning a water feature at the front of the property.  Mr Natoli and Mr Leverett disagreed about the colour of the tiles.

   [37] Reflecting pleadings at par [11](d)(xi) C - D.

9. I do not at present discern the evidential basis for the assertion as is pleaded at par 11(d)(xi) F that there was a disagreement between Mr Natoli and Mr Leverett about Mr Natoli's request that Mr Leverett take control of the cabinetry for the renovations.

Mr Leverett photographed at the property

1. I accept that on 3 July 2018 Mr Leverett and Mrs Leverett attended at the property and that Mr Leverett permitted a photograph of himself and his mother to be posted on the BWWA Facebook page on 4 July 2018 with the caption 'serious design talk going on here with @leverettdesigncompany.' A link is provided for anyone who wants to 'find out more about our team.'

The sale of the property and the benefit to the defendants

1. I accept that as pleaded at par 11(d)(xii) that when the Property was ultimately sold by the defendants, it was completely habitable as a result of the renovations.[38] I proceed on the basis that as pleaded at par 11(d)(xiii) that the defendants only paid for a very small amount of the total costs of the renovation.  I accept that the property sold on 26 February 2019 for $1,118,000.  That in June/July 2017 its approximate valuation was $625,000.  That at all relevant times Mr Leverett was a co-owner.  And that his share of the increased equity between June/July 2017 and late February 2019 was therefore approximately $246,500.

Conclusion on existence of agreement

[38] Attachment 'MAN 6' of Natoli affidavit.

1. I apply without repetition the principles that arise when one is considering an application by a defended for summary judgment.  There are aspects of the evidence that permit strong argument on behalf of Mr Leverett, particularly the two emails.  But when I consider all of the matters asset out above, I am not prepared to conclude that on a summary judgment application there is no real triable issue that there was an agreement, partially oral, partially implied by conduct, between on the one hand the plaintiffs and on the other hand both defendants.

Intention to create legal relations and certainty

1. As Lord Dunedin held in May & Butcher Ltd v The Queen:[39]

   To be a good contract there must be a concluded bargain and a concluded contract is one which settles everything that is necessary to be settled and leaves nothing to be settled by agreement between the parties.  Of course it may leave something which has still to be determined, but then that determination must be a determination which does not depend upon the agreement between the parties.

   [39] May & Butcher Ltd v The Queen [1934] 2 KB 17, 21.

2. I note that in Teng v Clarke [32]: Kenneth Martin J observed that, 'principles of Australian contract law concerning uncertainty of contract are reasonably settled.' His Honour noted the 'somewhat fine distinctions as to ways a contract may be said to fail for uncertainty (either as to a lack of intention to contract or, the lack of certainty, or sufficiency in the settled upon contractual terms).' I note and apply his Honour's, with respect helpful, distillation of the relevant principles, at [32] ‑ [45].

3. In particular, simply because there may be a level of disagreement as to the interpretation of a term within a contract, that does not mean that there is legal uncertainty resulting in the avoiding of that contract.  It is only if the court is unable to put any definite meaning on the contract that it can be said to be uncertain.[40]

   [40] Teng v Clarke at [44].

4. In undertaking an inquiry as to uncertainty, a court should, if possible, adopt a construction that would uphold the validity of a contract.[41]

   [41] Teng v Clarke at [45].

5. In Uranium Equities Ltd v Fewster[42] the court observed:[43]

   There is some overlap between the requirements of intention to create legal relations and certainty.  If a contract is legally uncertain, this might indicate that the parties did not intend to create legal relations.  A contract can be uncertain in various ways, one of these being incompleteness, in the sense that essential terms are lacking.  The overlap between intention and uncertainty is at its greatest in cases in which agreement on some matters is deliberately postponed.  If what is postponed is essential to the agreement (itself a question that largely depends upon the intention of the parties), the agreement, to the extent that it has been reached, will be void.  Also, the fact that essential terms have been left over for later agreement will militate against a finding that the parties intended to create contractual relations.

   (citations omitted)

Applying the relevant principles to the present case

[42] Uranium Equities Ltd v Fewster (2008) 36 WAR 97 (Steytler P, McLure & Buss JJA).

[43] Uranium Equities Ltd v Fewster at [127].

1. On a summary judgment application it is not possible for me to conclude that what was postponed, as is apparent from the two emails, was essential to the agreement.  It is arguable that the parties had reached agreement on the basis that the increase in equity in the property, as a result of renovations carried out by the plaintiffs, was bound to exceed the cost of those renovations (as indeed was the case).  So that there was bound to be a profit that would be apportioned equally between the plaintiffs and the defendant.  Obviously the greater the cost of the renovations potentially the lesser the profit.  Although it is conceivable that the cost of a particular piece of work would increase the value of the property on a pro rata basis, thus preserving the quantum of the ultimate profit.  What had not been formalised was the detail of the final cost of the renovations.

2. In my view it is at least arguable that this case is either in the first of the traditional three categories identified in Masters v Cameron,[44] namely that the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect.[45]

   [44] Masters v Cameron (1954) 91 CLR 353, 360 (Dixon CJ, McTiernan & Kitto JJ).

   [45] As cited in Uranium Equities Ltd v Fewster at [128].

3. It is also arguable that it falls within the fourth category added by McLelland J in Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd[46] relying on Sinclair, Scott & Co Ltd v Naughton.[47]  As the court in Uranium Equities Ltd noted at [129]:

   This is a variation of the first category.  We have earlier mentioned that it is one in which the parties intend to be bound immediately by the terms which they have agreed upon, while expecting to make a further contract in substitution for the first contract containing, by consent, additional terms.'

   [46] Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622, 628.

   [47] Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310, 317.

4. It is not possible, on a summary judgment application, to definitively state that any agreement must have fallen within category one or category four.  The answer to the question of categorisation depends upon the intention disclosed by the language used by the parties.  No special form of words is essential in order that there shall be no contract binding upon the parties before the execution of their agreement in its ultimate shape.[48]

   [48] Masters v Cameron as cited in Uranium Equities Ltd v Fewster at [130].

5. The parties' intention must be objectively ascertained.  This, in turn, requires consideration of the words used in the context in which they were used.  The high value of the subject matter might be relevant in determining whether there was an intention to be bound immediately or only after receiving professional advice.  The complexity of the contemplated deal may make it less likely that the parties intended to commit to the contract by informal means although, in the end, the disclosed intention of the parties will be decisive.[49]

   [49] Uranium Equities Ltd v Fewster at [131].

6. Here the value of the subject matter is certainly substantial, exceeding as it does $400,000, but the contemplated deal is not complex.

7. It will normally be of importance that the court have an understanding of the commercial context in which the dispute arises, and a most significant feature of that context will relate to the subject which the parties regard, or would ordinarily be expected to regard, as matters to be covered by their contract.[50] That underscores the difficulty in concluding that there is no residual uncertainty as to Mr Leverett's right to judgment without further investigation of the facts.

   [50] Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 548 (Gleeson CJ) cited in Uranium Equities Ltd v Fewster at [132].

8. In many cases, there is a need for evidence in one form or another as to what subjects would be regarded as requiring agreement between the parties.  The best evidence on that subject is to be found in the actual communications between the parties.

9. As Gleeson CJ (then of the Supreme Court of New South Wales) observed in  Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd:[51]

   The question in a case such as the present is expressed in terms of the intention of the parties to make a concluded bargain.  That is not the same as, although in a given case it may be closely related to, the question whether the parties have reached agreement upon such terms as are, in the circumstances, legally necessary to constitute a contract.  To say that parties to negotiations have agreed upon sufficient matters to produce the consequence that, perhaps by reference to implied terms or by resort to considerations of reasonableness, a court will treat their consensus as sufficiently comprehensive to be legally binding, is not the same thing as to say that a court will decide that they intended to make a concluded bargain.  The more numerous and significant the areas in respect of which the parties have failed to reach agreement, the slower a court will be to conclude that they had the requisite contractual intention.

   [51] Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd cited in Uranium Equities Ltd v Fewster at [132].

10. I accept that the existence of matters of importance in which the parties have not reached consensus in their informal agreement will render it the less likely that they intended immediately to be bound before the execution of a formal document.  Even where the parties have agreed on the 'major matters', their subsequent conduct may indicate that they did not intend to be bound until the other issues between them were resolved in a formal document.[52]

    [52] Uranium Equities Ltd v Fewster at [133].

11. I am not persuaded that the only inference that arises from the two emails, is that Mr Leverett had indicated that he did not intend to be bound until the other issues between the plaintiffs and with Mr Leverett and his mother were resolved in a formal document.  Particularly given the fact that for these purposes I accept that, to the knowledge of both defendants, the renovation works were well underway as of 1 September 2017.

12. In order to determine in what areas the parties were, and were not, in agreement, and what matters they considered necessary in order for an agreement to exist, it is legitimate to examine their subsequent conduct.[53]  This is not a case where correspondence between the parties after an informal agreement refers to important terms and conditions not mentioned during that informal discussion, so that it may more readily be inferred that the earlier discussion was simply a preliminary negotiation and not a binding agreement.  Again, for these purposes I accept that, to the knowledge of both defendants, the renovation works continued for at least 10 months after 1 September 2017.

    [53] Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551, 14569 ‑ 14570 cited in Uranium Equities Ltd v Fewster at [133].

13. It is wrong to isolate any part of the correspondence from the rest in order to prove or disprove the existence of a binding agreement.  The same approach should be taken to the analysis of words and phrases within the correspondence.  Reference to an 'agreement' having been reached does not necessarily prove the existence of a presently binding contract.  Conversely, references to a 'proposed' agreement, and similar expressions, will not necessarily mean that no agreement presently exists.  It is a question of how the words are to be interpreted in their context, and in the light of the correspondence, viewed as a whole.[54]

Conclusion on claim for summary judgment on breach of contract

[54] Uranium Equities Ltd v Fewster at [133].

1. I am not prepared to conclude that on a summary judgment application there is no real triable issue that there was a concluded bargain between the plaintiffs and both defendants with certainty that all essential terms been agreed.

2. It is at least arguable as disclosed by their language and/or inferred from their conduct that all parties reached finality in their agreement.

3. I am not satisfied that there is no real question to be tried on the issue of whether Mr Leverett did not intend, or cannot be regarded as having intended, to subject that agreement to the adjudication of the courts.

4. It is not possible or appropriate to determine whether Mr Leverett's dual arguments on consideration, namely that alleged agreement is void for illegality, or that the plaintiffs have received value for the money paid by them to BWWA whereas the second defendant has received no consideration, are bound to succeed.

5. Approaching the matter with the required great caution, I am not satisfied that it is appropriate for there to be summary judgment in favour of the second defendant with respect to the claim for breach of contract, as encompassed by pars 5 ‑ 22 of the amended statement of claim. Accordingly the appeal from the decision of Registrar Kingsley on 16 October 2020 declining to grant summary judgment for the second defendant for breach of contract is dismissed.

6. In my view the plaintiffs' cross-appeal against the registrar's decision to strike out pars 5 ‑ 28 falls away given the amended statement of claim.

Basis for the plaintiffs' alternative claims

1. There remains a cross-appeal against the decision to grant summary judgment in respect of the claim in the alternative for restitution as originally pleaded at pars 29 ‑ 31, now pleaded at pars 23 - 31.  Quantum meruit forms part of the claim for restitution.  The cross‑appeal against the decision to strike out the paragraphs pleading quantum meruit, namely pars 32 - 34, falls away given the emergence of pars 23 - 31 in the amended statement of claim.  There remains an appeal by Mr Leverett against the registrar's decision to strike out pars 32 - 34 as opposed to granting summary judgment.

2. The defendants' arguments (which in the case of Mr Leverett are not so conclusive as to require summary judgment) in relation to lack of a properly formed contract and/or breach of such contract may well prevail at trial.  If they do, it is open to the plaintiffs to contend, as pleaded, that there is an alternative entitlement at law resting in the unjust enrichment each defendant, being co-owners, may have received resulting from them deriving a benefit in which they have acquiesced and accepted without payment.

3. There is a clear evidential basis for a conclusion that that Mr Natoli attended at the property every week for at least 10 months (with some breaks) and worked on or supervised the renovations.  That he did so with an expectation of recovery of the costs incurred by the plaintiffs and a share in the ultimate profits.  And that each defendant knew about and continued to accept his presence on that basis.  And that each benefitted from it.

1. If it is ultimately determined that there is no contractual obligation on the part of the defendants or one of the defendants it is open on the materials for the plaintiffs to assert, as they do, that there was an obligation on the defendants to pay the plaintiffs.  Such obligation would arise in those circumstances not from any oral/implied contract, but because of a quantum meruit to avoid an unjust enrichment, a discrete principle.

2. The quasi-contractual obligation to pay fair and just compensation for a benefit which has been accepted will only arise in a case where there is no applicable genuine contractual agreement or where such an agreement is unenforceable.  In such a case, it is the very fact that there is no genuine agreement or that the genuine agreement is unenforceable that provides the occasion for (and part of the circumstances giving rise to) the imposition by the law of the obligation to make restitution.[55]

   [55] Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 (Deane J) cited with approval in Mann v Patterson Constructions Pty Ltd (2019) 373 ALR 1 [14] (Kiefel CJ, Bell & Keane JJ).

3. The common law governs recovery for work done in these circumstances according to the common law principles that govern imposition of an obligation to pay by way of restitution a sum of money representing the value of work, enforceable by an action that can be described following Pavey & Matthews Pty Ltd v Paul as a non‑contractual quantum meruit.[56]

   [56] Mann v Patterson Constructions Pty Ltd [60] (Gageler J).

4. See also the reasons of Nettle, Gordon and Edelman JJ in Mann v Patterson Constructions Pty Ltd and Roude v Helwani.[57]

   [57] Roude v Helwani [2020] NSWCA 310 [36] ‑[42] (White JA, Brereton & McCallum JJA agreeing).

5. In my view it is arguable that each of the defendants accepted constructively or expressly a benefit from the plaintiffs, in unjust circumstances, where they did not adequately, or at all, pay for it.

Conclusions on the plaintiffs' alternative claims

1. I grant leave in the circumstances to the plaintiffs to cross-appeal out of time.  I allow the plaintiff's cross-appeal to grant summary judgment in respect of the claim in the alternative for restitution as originally pleaded at pars 29 - 31, now pleaded at pars 23 - 31.

2. The cross-appeal against the decision to strike out the paragraphs concerning quantum meruit as originally pleaded, pars  32 - 34 falls away given the amended statement of claim, pars 23 - 31.  For the reasons given, Mr Leverett's appeal against the registrar's decision to strike out pars 32 - 34 as opposed to granting summary judgment is dismissed.

3. The claim for money wrongly retained as originally pleaded at pars 35 ‑ 37 is now also encompassed within pars 23 - 31 of the amended statement of claim.  For the reasons given I grant leave in the circumstances to the plaintiffs to cross-appeal out of time.  I allow the plaintiff's cross-appeal against the registrar's decision to grant summary judgment in respect of that claim.

4. The claim for misleading and deceptive conduct as originally pleaded at pars 38 - 43 is now encompassed within pars 32 - 37 of the amended statement of claim.  For the reasons given, Mr Leverett's appeal against the registrar's omission to grant summary judgment in respect of that aspect of the plaintiffs' claim is dismissed.

5. Finally, the claim for estoppel as originally pleaded at pars 44 - 49 is now encompassed within pars 38 - 46 of the amended statement of claim.  For the reasons given, Mr Leverett's appeal against the registrar's decision to strike out pars 44 - 49, as opposed to granting summary judgment is dismissed.  In my view the plaintiffs' cross‑appeal against the registrar's decision to strike out pars 5 ‑ 28 falls away given the amended statement of claim.

Orders

1. The appeal by the second defendant is dismissed.  The cross‑appeal by the plaintiffs is allowed only to the extent of the registrar's decision to grant summary judgment in respect of the claim as originally pleaded at pars 35 - 37, as now pleaded as part of pars 23 ‑ 31.

2. I will hear from the parties as to costs.  The plaintiffs have succeeded in that (a) the appeal by the second defendant is dismissed and (b) the cross-appeal has partially succeeded.  However, in my view the inadequacies of the original statement of claim has substantially contributed to the need for a contested hearing before the registrar in the first place.  It is only by drastically amending the statement of claim that some of the deficiencies identified by the registrar have been rectified, thus rendering the plaintiff's cross-appeal largely nugatory with the single exception of the decision on former pars 35 - 37.  My preliminary view, subject to further argument, is that all costs associated with this appeal be costs in the cause.

   I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

   MW

   Associate to Judge Troy

   1 JUNE 2021