Paringawood Nom P/L & Ors v Baulderstone & Anor No. Scgrg-97-1382 Judgment No. S6797

PARINGAWOOD NOMINEES PTY LTD & ORS V BAULDERSTONE AND ANOR

ACTION NO 1382 OF 1997

[1998] SASC S6797

Judge Burley

By application dated 16 January 1998 the defendants seek, among other things, the following orders:-
“1..... Summary judgment against the secondnamed plaintiff, Anthera Pty Ltd (‘Anthera’) in respect of the relief claimed against the defendants by Anthera in this action.
2...... An order that the injunction granted in this action on 3 December 1997 (‘the injunction’) be dissolved.
3...... An order vacating or setting aside paragraph 1 of the order made in this action on 22 October 1997.”
The defendants contend that a written agreement entered into between Anthera and the defendants for the sale and purchase of certain Crown lands is null and void by virtue of the provisions of Section 226 of the Crown Lands Act 1929 (“the Act”). That section is as follows:-
“226.......... An agreement, whether oral or in writing, for the sale, transfer, assignment or subletting of a lease or agreement shall be null and void after the expiration of one year from the making of the agreement, unless before the expiration of that period the Minister consents in writing to the proposed sale, transfer, assignment or subletting.”

It was submitted by Mr Besanko QC, counsel for the defendants, that if the agreement is null and void, the defendants were entitled to enter judgment against Anthera, the second plaintiff. They were also entitled to a dissolution of the injunction granted on 3 December 1997 and the order extending the caveat lodged by Anthera to protect its interests under the contract.
The defendants pursue their application pursuant to SCR 25.04. That Rule enables a defendant to apply for a final order dismissing the plaintiffs’ claim. On the application the defendants must satisfy the Court that on any view of the facts or law, Anthera’s claims against the defendants cannot succeed.
It is now well established that on an application such as this it is neither possible nor appropriate for the Court to attempt to resolve material disputes of fact: Wicklow v Doysal (1987) 45 SASR 247. It is evident from the pleadings and the affidavit material referred to by the parties that there are material disputes of fact. Accordingly, as was accepted by the defendants, the only course open to the Court is to proceed as if on a demurrer, ie the allegations in the statement of claim are assumed to be true and a determination is to be made as to whether on any view of the law, the plaintiffs’ claim cannot succeed. If it is held that Anthera’s claim cannot succeed against the defendants, the defendants must be given leave to enter judgment against the plaintiffs accordingly. It would follow that to the extent that the injunction and order extending the caveat rely upon the validity of the subject agreement, those orders should be discharged if the agreement is found to be null and void.
Mr Besanko submitted that I should proceed to a determination of the questions raised on argument because only points of law were involved. Put at its highest, his argument was that I should take into account both arguments advanced by the parties in respect of disputed issues and arrive at a final determination of that dispute. Whilst it may be possible for a plaintiff to achieve such a result under the provisions of SCR 25.02, I do not think it is open to a defendant to seek such a summary judgment. When a plaintiff seeks summary judgment under SCR 25.01, the only issue is whether or not there is a triable issue which should proceed to trial. SCR 25.04 allows a defendant to seek summary judgment (as opposed to immediate relief). SCR 25.04(1)(c) refers to the filing of an affidavit which shows that the plaintiff’s claim cannot succeed on any possible view of the facts or the law. Olsson J, in Royal Australia Finance Ltd v Xenophou Corp Pty Ltd (an unreported judgment delivered on 22 July 1992, Judgment No S3526), came to the conclusion that the issue to be decided on an application under Rule 25.04 was whether or not there was a real question to be tried. In South Australian Asset Management Corporation v Key (an unreported judgment delivered on 21 December 1995, Judgment No S5390), I expressed the view that where the Court found there was a serious question to be tried, it could not then proceed to determine that question summarily. In light of those authorities it seems to me that it is not open to me on the defendants’ application pursuant to SCR 25.04 to proceed to a determination of the disputed issues argued before me in the manner which I understand was contended for by Mr Besanko. In other words, if I form the view that there is a serious question to be tried, I should permit that issue to be determined at trial.
In applying this approach to the application before me there is a complication: Anthera contests the defendants’ assertion that the agreement comes within Section 226 of the Act but pleads a number of grounds. If I were to come to the conclusion that one of the principal or alternative arguments constituted a triable issue, is it appropriate to deal with any other of the disputes raised during argument? For example, if I came to the view that the question of whether or not the agreement came within Section 226 of the Act is a triable issue, is it appropriate to deal with the response raised in the plaintiffs’ amended reply relating to estoppel?
It seems to me that this question is to be answered by reference to the relief sought by Anthera. Anthera seeks specific performance of the agreement on a number of grounds. If I conclude that one of those grounds constituted a triable issue, it would be inappropriate to proceed to deal with the other grounds because, even if I were satisfied that one or more of the other grounds did not constitute a triable issue, I would not be able to make an order dismissing Anthera’s claim because there was at least one ground raised in the pleading which constituted the triable issue which could potentially lead to an order for specific performance. The only order that could be made would be an order to strike out certain parts of the plaintiffs’ statement of claim or reply. In my view that would not be an appropriate course to take on an application for summary judgment. Such an application has a specific function which enables a party to have the Court decide at an early stage and in a summary way whether or not, respectively, the defendant or plaintiff has raised a triable issue. Accordingly, in circumstances where, for example, a plaintiff raises principal and alternative issues, a defendant seeking a summary determination should be required to take into account that, if an application for summary judgment is to be pursued, it must be demonstrated that all of the principal and alternative arguments are without substance, at least in circumstances where each of the principal and alternative issues raised in the pleadings by the plaintiff lead to the same relief. In light of that reasoning, if I come to the conclusion that any of the issues debated in argument constitute a triable issue leading potentially to the grant of essentially the same relief to which other issues lead, I intend to deal only with that issue and no other.
The facts as they emerge from the statement of claim are as follows. In January 1990 Paringawood Nominees Pty Ltd (“Paringawood”) was the trustee of the RM & R Smith Family Trust. The fourth plaintiff (“Mrs Curtis”) was a beneficiary of that trust. The first defendant (“Mr Baulderstone”) and Leslie Charles Baulderstone (now deceased) were registered as the proprietors of Crown Lease Perpetual No 20293, Register Book Volume 1575 Folio 41 situated at Belvedere Road, Mannum (“the land”). The deceased died on 12 October 1994 and administration of his estate was granted to Mr Baulderstone and the second defendant (“Mr Fox”) by grant of probate dated 30 January 1997.
During 1989 Mr Baulderstone approached the third plaintiff (“Mr Curtis”) and Mrs Curtis with a proposal that they enter into a share farming arrangement in respect of the business operated by Mr Baulderstone and the deceased, who traded as “Baulderstone Pastoral” on the land and on certain adjoining freehold land comprised in CT Register Book Volume 5393 Folio 58 (“the freehold land”).
Mr and Mrs Curtis indicated interest in sharefarming the land by operating the business with the Baulderstones but proposed that they pay for and obtain a financial stake in the business. A meeting was held in January 1990 between Mr Baulderstone, Mr Curtis and Mr Ronald Smith, who is the father of Mrs Curtis. At the meeting it was agreed a sharefarming agreement would be entered into on the basis that Paringawood acquired fifty per cent of the plant and equipment and stock of the business and twenty per cent interest in the land. Eventually the consent of the Minister of Lands was obtained in respect of the proposed transfer of a twenty per cent interest in the land and the transfer was effected on 28 June 1990.
By 1992 the parties had reached a stage where they wished to terminate the arrangements then existing between them. In January 1993 Anthera was incorporated and on 3 November 1993 a contract was entered into between Mr Baulderstone and the deceased as vendors and Anthera as purchaser in respect of the remaining eighty per cent interest in the land. I will refer to the agreement of 3 November 1993 as “the agreement”. Anthera, in these proceedings, seeks rectification and specific performance of the agreement in its rectified form.
In reciting the above facts, I have only provided the barest outline as background to the application for summary judgment. The dealings between the parties were quite complicated and this reflected itself in a complicated series of contracts entered into over a period of years.
It is common ground that the Crown lease of which the land is comprised is a lease within the meaning of Section 226 of the Act. It is also common ground that the Minister’s consent to the transfer of the eighty per cent interest as contemplated by the agreement has not yet been obtained. The defendants contend that the commencement date of the one year period referred to in Section 226 of the Act was 3 November 1993, the date that the agreement was signed. They also contend that the agreement is an agreement for the sale and transfer of a lease and that because the Minister’s consent has not been obtained to the proposed sale and transfer, the agreement is null and void.
Mr Besanko drew my attention to Section 227 of the Act. In general terms the effect of that Section is to prohibit, among other things, the giving of possession of Crown land in pursuance of an agreement for the alienation of Crown land without the consent of the Minister being obtained to the agreement for alienation. The plaintiffs have possession of the land. In referring to Section 227 he did not seek to establish an additional ground for avoidance of the agreement. His purpose was to demonstrate a policy evident from a perusal of Part 12 of the Act, which deals with transfers, that the Minister’s consent has to be obtained before a registered proprietor could deal with an interest in Crown land and that it was impermissible to give effect to any such agreement without the Minister’s consent first being obtained.
The plaintiffs’ amended reply (leave to file which was given during the hearing of the defendants’ application) sets out Anthera’s response to the defendants’ contention in their defence that the agreement is null and void. Anthera contends, in essence, that an agreement contemplated by Section 226 has not arisen because the agreement was subject to the fulfilment of a number of conditions. One of those conditions related to the obtaining of the Minister’s consent. It was Anthera’s contention that until those conditions had been fulfilled (except for the condition relating to the obtaining of the Minister’s consent) an agreement for sale and transfer of the lease did not arise. In other words, the commencement of the one year period did not occur until fulfilment of all of the conditions apart from the condition relating to the consent of the Minister. Not all of the conditions have been fulfilled.
The amended reply also raises an estoppel argument.
Anthera’s arguments in opposition to the application for summary relief are:-
“1..... That the agreement did not come within the meaning of Section 226 of the Act essentially because it was a conditional contract.
2...... That because the plaintiff seeks rectification of the agreement the time has not yet arisen for the Minister’s consent to be obtained because the Minister must consider the agreement in its rectified form and that cannot be achieved unless and until an order for rectification as sought is made.
3...... Alternatively, that if the agreement was rendered void by the operation of Section 226, an agreement to renew the transaction arose by way of estoppel.
4...... In the further alternative, that even if the agreement is void by virtue of Section 226, it did not become void until 3 November 1994 and before that date rights to claim damages accrued to Anthera because of breaches on the part of the defendants.”

It seems to me that issues 1-3 all relate to the question of whether or not Anthera is entitled to an order, in due course, for specific performance. Consequently if only one of those issues is found by me to be a triable issue, that will be sufficient to defeat the defendants’ application. It also follows that the fourth issue referred to above will need to be dealt with whatever conclusion I come to in relation to the first three.
Having considered all of the submissions of counsel in relation to whether or not the agreement is void by virtue of Section 226 of the Act, and in particular both the principal and alternative points raised by Anthera, I have come to the conclusion that at least one of the contentions advanced by Anthera constitutes a triable issue, which if successfully pursued at trial, may lead to an order for specific performance of the agreement. The submissions put by Mr Wells in relation to the effect that rectification had upon the application of Section 226 of the Act constitutes, in my view, a triable issue.
Mr Wells QC, counsel for Anthera, contended that it was at least arguable that the commencement of the twelve month period provided for in Section 226 of the Act did not commence until an order for rectification was made. He put such a submission notwithstanding that he accepted that the cases dealing with rectification were to the effect that the rectified contract was regarded as having been made when the document purporting to set out the parties’ bargain was originally signed. He argued, however, that such a concept was not applicable to the question of whether or not Section 226 of the Act applied as from the original date of execution. He referred to Lang v Castle and Anor [1924] SASR 255. He submitted that it was clear from that case that the Minister was required to give consent to the complete transaction if his consent was to be a real consent. Mr Wells QC argued that the Minister would not be in a position to give a proper and informed consent until he was aware of the actual terms of the contract.
The rectification sought by Anthera was to the effect that the bargain struck between the parties included the purchase by Anthera of water rights. In my view, the pleadings raise such a point as a triable issue.
The rectification sought does not include that part of the agreement which deals with the transfer of the eighty per cent interest in Crown lands, but, if rectification is granted, the transfer of water rights is a matter that might be considered by the Minister to be material to the question of whether or not consent to the transfer of the leasehold interest is to be given or withheld. If an application for the Minister’s consent had been pursued whilst there was a dispute between the parties as to whether or not the agreement included the transfer of water rights, the Minister would potentially have been faced with the situation where one party said that the agreement did include the transfer of water rights and the other party said that it did not. This could potentially place the Minister in an impossible position.
It seems to me that it is at least arguable that the Court could hold that the twelve month period referred to in Section 226 did not commence unless and until the Court found that the agreement should be rectified. I accept that it might be arguable, and perhaps strongly arguable, by the defendants, that the ordinary principles as to rectification, in particular the principle that the rectification does not change the date at which the contract was entered into, apply. There is no case law on the point to offer guidance. Since I am of the view that the arguments on rectification advanced by Anthera are not untenable, Anthera must be permitted to proceed to trial.
For the reason given earlier I do not consider it appropriate to express any views as to the other points raised by Anthera in pursuing its claim for specific performance.
As to the alternative contention that, even if the contract was avoided by Section 226 of the Act twelve months after it was entered into, there remains a potential claim for damages, I am of the view that this also raises a triable issue. It is at least arguable that the contract was in force for the twelve months prior to it being avoided and that if breaches occurred during that period on the part of the defendants, damages would lie as the appropriate remedy.
For the above reasons, the defendants’ application for summary dismissal of the claim by Anthera for specific performance and for damages in the alternative must itself be dismissed. I will hear counsel as to costs.

[1998] SASC 6797

19 August 1998