Northwest Enterprises Pty Ltd v Bosco Nominees (WA) Pty Ltd

[2018] WADC 62

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   NORTHWEST ENTERPRISES PTY LTD -v- BOSCO NOMINEES (WA) PTY LTD [2018] WADC 62

CORAM:   DEPUTY REGISTRAR HEWITT

HEARD:   17 MAY 2018

DELIVERED          :   14 JUNE 2018

FILE NO/S:   CIV 4534 of 2017

BETWEEN:   NORTHWEST ENTERPRISES PTY LTD

First Plaintiff

JENTO AKANG

Second Plaintiff

AND

BOSCO NOMINEES (WA) PTY LTD

Defendant

BOSCO NOMINEES (WA) PTY LTD

Plaintiff by counterclaim

NORTHWEST ENTERPRISES PTY LTD

JENTO AKANG

Defendant by counterclaim

Catchwords:

Practice and procedure - Application to strike out defence and counterclaim - Although a viable defence may exist the state of the pleading unsatisfactory

Legislation:

Nil

Result:

Time to bring the application extended
Defence and counterclaim struck out

Representation:

Counsel:

First Plaintiff	:	Mr S K Shepherd
Second Plaintiff	:	Mr S K Shepherd
Defendant	:	Mr D Jones
Plaintiff by counterclaim	:	Mr D Jones
Defendant by counterclaim	:	Mr SK Shepherd

Solicitors:

First Plaintiff	:	Linfoot Commercial Law
Second Plaintiff	:	Linfoot Commercial Law
Defendant	:	Capital Legal
Plaintiff by counterclaim	:	Capital Legal
Defendant by counterclaim	:	Linfoot Commercial Law

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

Nil

DEPUTY REGISTRAR HEWITT:

1. Before me for determination in this action is the plaintiffs' chambers summons dated 28 March 2018 in which the plaintiff seeks firstly that the time for bringing the application be extended.  Secondly, that the defence be struck out in its entirety.  Thirdly, that the counterclaim be struck out in its entirety or alternatively paragraphs identified in sch 2 of the application be struck out.

2. In my view the question of whether leave should be granted should be influenced by the strength of the application.  My practice, and that which I intend to follow in this application, is that I am only prepared to make orders striking out pleadings when those applications are brought out of time if I am satisfied that the pleading as it presently stands is likely to jeopardise the prospect of a fair trial on the true issues between the parties.  With that statement of principle I now approach the details of the application and I do so by first giving a brief summary of the cause of action which is pursued by the plaintiff and some further information adding background to that transaction.

3. The plaintiffs' cause of action relies upon the terms of a lease executed on about 12 December 2016 under the terms of which the plaintiffs leased units numbered 134 and 135 which comprised strata title lots in a development at 2 Signal Terrace, Cockburn Central, Western Australia.  The plaintiffs' case alleges that the leases which were executed imposed upon the defendant the obligation to pay the rent and comply with the other terms contained in the leases and that they have failed to do so and as a consequence are liable not only for the arrears of payments but also for damages the plaintiffs having terminated the lease by reason of the breaches for which they now sue.

4. The defence adds a little colour to that situation.  The defendant admits executing the leases upon which the plaintiff sues but refers by way of defence to an earlier agreement dated 26 April 2016 which was in effect an agreement to lease.  The defendant alleges that the agreement to enter a lease contained special conditions which were required to be satisfied before the commencement of the lease.  It is also alleged that those special conditions were made applicable to the lease by being directly referred to and incorporated in the lease the effect of which was to make the leases subject to the same conditions as were applicable to the earlier contract.  The gist of the defence concerns a number of the conditions which it alleges were incorporated into the lease agreements which have not been satisfied as a consequence of which an enforceable lease agreement did not come into existence between the plaintiff and the defendant with the effect that the monies sued for by the plaintiff and the damages sought to be recovered are not due, owing or recoverable.

5. Whilst there were a number of special conditions that which is of the central interest concerns a modification to the premises the subject of the lease.  Lots 134 and 135 are separate premises and it was intended by the defendant to modify them to accommodate a small bar business within the premises so modified.  The modification required the removal of a separating wall between the premises to accommodate the proposed use.  It appears to be common ground that in order to achieve this end the approval of the strata company, the City of Cockburn and the Department of Racing, Gaming and Liquor both as to the use of the premises and the modification of the premises was required.  There were additional requirements concerning an extraction fan and grease trap and that presumably those works could not be done until the wall had been removed.  Of those matters the stumbling block appears to have been the removal of the wall and although there were delays in obtaining other approvals the reason, from the defendant's point of view, that the leases did not take effect was the failure to obtain the necessary approval concerning the removal of the wall.  It is this failure to achieve the condition precedents required which the defendant offers as a defence to the claim for the rent and other matters for which the writ has been issued.  Additionally, there are allegations that the requirements of the Commercial Tenancy (Retail Shops) Agreements Act 1985 s 6 have not been met. The breach alleged is the failure to provide a disclosure statement however the Act only provides that a tenant whose landlord makes such a breach has the right to rescind the lease which she or she enters and to commence proceedings in the State Administrative Tribunal. Nothing in that Act offers a defence to this present application. Insofar as the defendant relies upon the requirement to obtain the approval of the strata company in my view that approval would need to be obtained by the owner. A party who has no proprietary interest in the land, which would be the position of this defendant would have no standing in relation to proposals to modify the premises.

6. An additional point which has been raised by the defendant is that the plaintiffs have has engaged in misleading and deceptive conduct by giving assurances that the necessary modifications would be approved and could be achieved and on that basis the defendant entered the lease.

7. I now turn to the question of whether the defence is in a satisfactory form.  Whilst I have discerned the defences I have referred to they are not clearly expressed and in my view the whole of the defence is something of a muddle with large chunks of evidence being quoted, considerable irrelevancies being introduced, propositions that lead nowhere being inserted and generally I find that the defence as pleaded is such that it is not really possible for the plaintiffs to meaningfully respond to it pleading in its present condition.  The pleading is far too long for what is intended to be pleaded.  It is to my mind confusing and obscures rather than elucidates the issues which need to be dealt with.  Furthermore, the counterclaim which is advanced by the defendant sets out in an annexed schedule a series of amounts of money said to be payable by reason of the breach by the plaintiffs of the terms of the lease.  Nowhere in the statement of claim is there any pleading which justifies any of the amounts claimed nor gives any explanation as to why they should be payable as damages in a counterclaim.  Additionally, the damages claimed seem to be on the basis that there was a valid lease and that in some way the defendant has been prevented from operating its proposed business within the leased premises.  That proposition does not square very happily with the assertion that the lease had not in truth come into full effect because various condition precedents were unsatisfied.  In my view the whole of the counterclaim, as it is presently pleaded, is flawed and should not be permitted to remain on the court record.  In making those remarks I do not wish to be understood to say that it is not possible that there might be a valid counterclaim but the manner in which this counterclaim is presented is so unsatisfactory that it cannot be permitted to continue in its present form.  I also mention in passing that there appears to be considerable redundancy within the schedule upon which the defendant rely and that a significant amount of the sum for which the defendant counterclaims appears to be legal costs within the present proceedings.

8. As I have earlier mentioned the defence and counterclaim is lengthy and it occupies some 17 pages.  Very few of those pages would escape criticism in some form or another.  Most of the pleading can be criticised because of its lack of precision, irrelevancy, or contradiction with other pleaded portions of the same pleading.

9. For this reason I think that it is pointless to go through this pleading paragraph by paragraph.  The proper way to deal with a pleading in this condition in my view is to strike it out and allow the defendant the opportunity to re-plead its defence and counterclaim in a much more succinct and focused way and in a manner in which the plaintiff can properly understand what is being alleged and how to respond to it.

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

   JC

   REGISTRAR'S ASSOCIATE

   8 JUNE 2018