Newman v Scook

[2003] WADC 46

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   NEWMAN -v- SCOOK & ANOR [2003] WADC 46

CORAM:   REGISTRAR KINGSLEY

HEARD:   14 JANUARY 2003

DELIVERED          :   Delivered Extemporaneously on 14 JANUARY 2003 typed from tape and edited by Registrar

FILE NO/S:   CIV 2695 of 2002

BETWEEN:   WALLY NEWMAN

Plaintiff

AND

DEAN GEORGE SCOOK
First Defendant

CAROL NORMA HARDIE
Second Defendant

Catchwords:

Practice - Application for summary judgment by plaintiff - Turns on own facts

Legislation:

Nil

Result:

Judgment for plaintiff

Representation:

Counsel:

Plaintiff:     Mr S V Forbes

First Defendant              :     Mr H R Robinson

Second Defendant         :     Mr H R Robinson

Solicitors:

Plaintiff:     Paiker & Overmeire

First Defendant              :     Haydn Robinson

Second Defendant         :     Haydn Robinson

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

Gan v Sanders (1994) 15 ACSR 298.

Heppingstone v Stewart (1911) 12 CLR 126.

Hill v Anderson Meat Industries Ltd [1971] 1 NSWLR 868.

Phillips Fox (a firm) v Westgold Resources NL & Ors [2000] WASCA 85.

Case(s) also cited:

Nil

1. REGISTRAR KINGSLEY:  This is the return of the plaintiff's application for summary judgment against the first and second defendants.  The principles in relation to applications for summary judgment are well known.  It is for the plaintiff to show that, firstly, there is a prima facie case.  Once there is a prima facie case there is an obligation on the defendant to show cause why leave to defend should be given.

2. The defendant need not show a complete case but only an arguable case.  The defendant must put forward some facts to show that there is in fact an issue for argument.  It is entirely possible for a defendant to show cause by attacking the statement of claim and arguing that the claim of the plaintiff is flawed.

3. In fact that is what has occurred in this case.  The plaintiff's statement of claim pleads that four parties, the first defendant, second defendant and the principal debtor together with the plaintiff, entered into a written put and call option agreement.

4. The principal debtor agreed to purchase some fully paid shares in Tuart Resources for $69,000.  There were certain express terms in that agreement; firstly, that the purchase by the principal debtor was conditioned on a listed selling price on the Australian Stock Exchange at 1400 hours Western Standard Time which was not to be below a stated purchase price per share on 31 August; secondly, the plaintiff was to send by form attached to the agreement no later than 1700 hours Western Standard Time on 3 September a notice requiring the principal debtor to purchase; and in the event that the principal debtor failed to pay he must pay interest at 15 per cent per annum.

5. The plaintiff pleads that it forwarded to the principal debtor to a facsimile number on 10 April a notice calling on the principal debtor to purchase the shares at $69,000.  The share price was calculated at 11.5 cents per share which was expressed to being a price in excess of the closing price per share.  The principal debtor failed to pay.  The defendants are guarantors under the agreement and hence the claim against the guarantors.

6. The facts are verified by Walter Alfred Newman in an affidavit sworn on 1 October 2002.  Mr Newman deposes that the share price on 31 August was 6.46 cents.  The plaintiff in my opinion was making a calculated gamble at the time of sending the notice.

7. The defendant has opposed the application and has made various submissions.  I will deal with each of those submissions.  The defendants' counsel submits there was no agreement as the agreement was not signed by the plaintiff.  In my opinion on the authority of Heppingstone v Stewart (1911) 12 CLR 126 at p 135: "A party who has not signed an agreement may enforce the agreement against someone who has."

8. The defendants' counsel argues that there is no principle obligation because the company has been placed in administration.  There is authority for the proposition that the execution of a deed of company arrangement may extinguish the principal debt, but as the release is by operation of law the release does not discharge the guarantor; Gan v Sanders (1994) 15 ACSR 298 which applied Hill v AndersonMeat Industries Ltd [1971] 1 NSWLR 868.

9. The defendants' counsel raised an issue that the trustee in bankruptcy may be able to reject a proof of debt.  Referring back to Hill v Anderson, that is authority to say that where there is a court sanctioned scheme there is no release of a guarantor.  Forcefully defendants' counsel submitted that there was no valid exercise of the option referring to the authority of Phillips Fox (a firm) v Westgold Resources NL & Ors [2000] WASCA 85. Counsel submitted that the notice of exercise of the option must be strictly in accordance with the agreement. There is no evidence to suggest that the notice is not strictly in accordance with the agreement. The agreement provides the notice be sent no later than 1700 hours Western Standard Time on 3 September 2001. The agreement does not say the notice can only be sent between a certain period of time: as defence counsel argues between 31 August and 3 September. That being so I see no issue with the validity of the notice. Accordingly I am of the opinion that the defendants counsel has not persuaded me that there is any issue sought to be argued and I would give judgment as sought in the prayer of relief.