Perth Design and Construct Pty Ltd v Coward

[2020] WADC 42

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   PERTH DESIGN AND CONSTRUCT PTY LTD -v- COWARD [2020] WADC 42

CORAM:   DEPUTY REGISTRAR HEWITT

HEARD:   25 MARCH 2020

DELIVERED          :   9 APRIL 2020

FILE NO/S:   CIV 33 of 2020

BETWEEN:   PERTH DESIGN AND CONSTRUCT PTY LTD

Plaintiff

AND

STEPHEN JAMES COWARD

Defendant

Catchwords:

Practices and procedure - Summary judgment application - Action based on deed of acknowledgement of debt - Whether defence of fraudulent misrepresentation arguable - Turns on own facts

Legislation:

Nil

Result:

Application dismissed
Unconditional leave to defend

Representation:

Counsel:

Plaintiff	:	Mr I R Gillon
Defendant	:	In person

Solicitors:

Plaintiff	:	Lawton Gillon
Defendant	:	Not applicable

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

Nil

DEPUTY REGISTRAR HEWITT:

1. In this matter the plaintiff sues on a deed of acknowledgement of debt which was executed by the defendant as a deed and which is dated 29 April 2019.  It is common ground that the amount acknowledged to be due has not been paid save for a sum paid to the plaintiff by a mortgagee exercising a power of sale over a piece of land against which the acknowledgement of debt was registered as a caveat pursuant to its terms.  On the face of it, the matter looks straight-forward.

2. The papers which have been filed by the defendant, clumsy and inarticulate as they are, cast a different light on the matter.  The story advanced by the defendant in his defence is that he and the plaintiff entered an arrangement which I can only describe as some sort of joint venture between them.  The basis of the joint venture revolved around a piece of land which was owned by the plaintiff on which he resided.  The proposition as explained by the defendant is that the plaintiff would develop the land by subdividing it into three blocks of which one would contain the plaintiff's existing home and the other two blocks would be developed by building houses on them and selling those as house and land packages.  In order to achieve the subdivision, it was necessary to make some alterations to the home which was occupied by the defendant which, in its original state, encroached on one of the proposed subdivided blocks.  That work was done and the subdivision was achieved.

3. Put loosely, the proposition advanced by the defendant is that he would provide the land which would allow the project to proceed and the plaintiff would finance the project, build the houses and they would share in the profits thus generated.

4. As the subdivision was achieved and the renovations to the defendant's house were completed (although not to the defendant's satisfaction) the defendant began to experience some difficulties with the mortgagor which held a mortgage over the property.  He was having some financial difficulties and was finding it difficult to maintain the payments.  At that stage the defendant says that an officer of the plaintiff said it would be able to stop a mortgagee from selling the property and in order to do so it was necessary for him to sign a document.  That document was brought to the defendant's home in circumstances which, he states, placed him under some level of pressure such that he signed the document without looking at it in any detail, or indeed at all.

5. What is completely obvious from the document which he did sign, and upon which the plaintiff sues, is that it conferred absolutely no advantage whatsoever to the defendant and was entirely and in all respects favourable to the plaintiff.  The document was incapable of offering any impediment to the mortgagee from selling the property to recover the amount secured by the mortgage in the event of default.  If the defendant did sign the document in the circumstances that he describes, relying on the statements made on behalf of the plaintiff that in doing so he would protect his property from a mortgagee sale, then, in my opinion that advice was arguably a fraudulent misrepresentation.  The document could not and would never have been capable of achieving that outcome and indeed was entirely devoted to the benefit of the plaintiff and simply imposed extra burdens such as the requirement to pay interest on the plaintiff without any discernible consideration for that obligation.

6. Although a deed carries a certain weight, if this defendant were able to persuade a judge that the circumstances surrounding his signing of the document were as I have described, in my view, he will have established an arguable defence of fraudulent misrepresentation and that defence, if upheld, would entitle him to defeat the plaintiff's claim based as it is entirely on the acknowledgement of debt.

7. For those reasons, I am of the view that the defendant has established an arguable defence on the merits and he should be entitled to unconditional leave to defend the plaintiff's claim.

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

AC
Court Officer

9 APRIL 2020