Prada Developments Pty Ltd v Western Coastal Property Investments Pty Ltd
[2006] WADC 198
•5 DECEMBER 2006
PRADA DEVELOPMENTS PTY LTD & ANOR -v- WESTERN COASTAL PROPERTY INVESTMENTS PTY LTD [2006] WADC 198
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WADC 198 | |
| Case No: | CIV:94/2005 | 7 JUNE & 17 NOVEMBER 2006 | |
| Coram: | EATON DCJ | 4/12/06 | |
| PERTH | |||
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| PDF Version |
| Parties: | PRADA DEVELOPMENTS PTY LTD ANDY NED LULICH WESTERN COASTAL PROPERTY INVESTMENTS PTY LTD |
Catchwords: | Procedure Appeal from a Registrar Application for summary judgment Turns on own facts |
Legislation: | Rules of the District Court 1996 Rules of the Supreme Court 1971, O 14 |
Case References: | Nil Casella v Costin Pty Ltd, unreported; FCt SCt of WA; Library No 5416; 22 June 1984 Morgan & Son Ltd v S Martin Johnson & Co Ltd [1949] 1 KB 107 State Bank of Victoria v Parry [1989] WAR 240 Westwind Air Charter Pty Ltd v Hawker de Havilland Ltd (1990) 3 WAR 71 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Appellant
ANDY NED LULICH
Second Appellant
AND
WESTERN COASTAL PROPERTY INVESTMENTS PTY LTD
Respondent
Catchwords:
Procedure - Appeal from a Registrar - Application for summary judgment - Turns on own facts
Legislation:
Rules of the District Court 1996
Rules of the Supreme Court 1971, O 14
(Page 2)
Result:
Appeal dismissed
Representation:
Counsel:
First Appellant : Mr R C Ioppolo 7 June 2006 and Mr M D Reid 17 November 2006
Second Appellant : Mr R C Ioppolo 7 June 2006 and Mr M D Reid 17 November 2006
Respondent : Ms K A Vernon
Solicitors:
First Appellant : Wojtowicz Kelly
Second Appellant : Wojtowicz Kelly
Respondent : Nicholson Clement
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Casella v Costin Pty Ltd, unreported; FCt SCt of WA; Library No 5416; 22 June 1984
Morgan & Son Ltd v S Martin Johnson & Co Ltd [1949] 1 KB 107
State Bank of Victoria v Parry [1989] WAR 240
Westwind Air Charter Pty Ltd v Hawker de Havilland Ltd (1990) 3 WAR 71
(Page 3)
1 EATON DCJ: By writ of summons filed 19 January 2005 the appellants, as first and second plaintiffs, sued the respondent for $27,000 said to be an amount due by the respondent to the appellants pursuant to a written contract for sale of land by offer and acceptance dated 1 July 2004, or alternatively, pursuant to a settlement agreement made between those parties on or about 19 November 2004. In due course the appellants filed a statement of claim and the respondent filed a defence. That defence was amended and filed along with a set-off and counterclaim on 16 May 2005.
2 On 4 August 2005 the appellants made application by way of chamber summons for an extension of time to apply for summary judgment and for summary judgment pursuant to O 14 of the Rules of the Supreme Court 1971, for summary judgment on the counterclaim pursuant to O 16 of those Rules and, in the alternative, for an order striking out certain paragraphs of the defence and/or counterclaim. That application was supported by an affidavit sworn by Andy Ned Lulich on 4 August 2005 and an affidavit sworn by Michael John Taddei on the same day. John Paul Tzanis, on 29 August 2005, swore an affidavit in response.
3 The application was heard by Registrar Wallace on 28 September 2005. She delivered judgment on 30 November 2005. She refused leave to the appellants to bring their summary judgment application out of time.
4 On 6 December 2005 the appellants filed a notice of appeal from the judgment of Registrar Wallace. Given that the writ was filed on 19 January 2005 and that the respondent's memorandum of appearance became unconditional on 15 March 2005, the District Court Rules 1996 apply to the appeal. As such, the appeal is by way of a complete review de novo dealt with by way of an actual re-hearing of the application which led to the order under appeal.
5 The appeal was heard by me on 7 June 2006. The material before me then was that which was before Registrar Wallace save for an amended defence, set-off and counterclaim filed by the respondent on 9 May 2006 and for the respondent's outline of submissions filed 10 May 2006. Counsel for the appellants began by advising me that pars 1 and 2 of the appellants' application filed 4 August 2005 were not in issue. Counsel for the respondent confirmed that to be the case. What was in issue was the appellants' application for leave to apply for summary judgment out of time, for judgment against the respondent in the sum of $27,000 plus interest at the rate of six per cent from 19 January 2005,
(Page 4)
- costs and, in the alternative, the appellants' strike-out application and costs.
6 On the pleadings it appears to be common ground that by a written contract of sale of land by offer and acceptance dated 1 July 2004 Western Coastal Property Developments Pty Ltd as agent or trustee for the respondent agreed to purchase and the appellants agreed to sell land known as Unit 1, Lot 35 Kulin Way, Mandurah being Lot 1 on Strata Plan 46522 the whole of the land comprised in Certificate of Title Vol 2569 Fol 378. The only evidence of that document before me at the initial hearing was a document annexed to the affidavit of John Paul Tzanis sworn 27 September 2005. That document was a photocopy of what appeared to be the first page of a contract of sale. There was no copy of the reverse of the document in evidence. There was a copy of a document entitled Annexure "A" which appears to relate to Unit 1, Lot 35 Kulin Way, Mandurah and refers to the sellers as being Prada Developments Pty Ltd and Andy Ned Lulich and the buyer as being Western Coastal Property Developments Pty Ltd. The purchase price on the face of the contract is said to be $356,300 plus GST or $391,930 including GST. Settlement is stipulated to be 4 August 2004. The annexure contained certain conditions including one to the effect that the sellers at their expense would do certain work specified therein and that prior to settlement "the sellers and the buyer shall inspect the property and any defects noted shall be rectified".
7 On the pleadings it appears to be common ground that by reason of a dispute between the parties settlement pursuant to the contract did not take place on 4 October 2004. In his affidavit sworn 29 August 2005 John Paul Tzanis deposed that by a document dated 18 October 2004 the respondent gave notice of defects including water ponding in the front and rear carparks and defective bitumen at the premises requiring the appellants to rectify those matters prior to settlement.
8 It is apparent that there was a meeting between the parties in an attempt to resolve the difficulties that were preventing settlement. By letter of 19 November 2004 Wojtowicz Kelly, solicitors for the appellants, wrote to the solicitors for the respondent purporting to confirm the terms of an agreement reached to enable settlement to proceed on 22 November 2004. The letter contained the following paragraph:
"We confirm that settlement is to proceed on 22nd November 2004 on the following terms:
(Page 5)
- (1) The sum of $27,000 is held in your trust account being part of the purchase price due and payable to our client;
(2) Our client will coordinate with Hawk Construction to procure and arrange the installation of the Tanks at the Property with such installation to occur between Saturday 4December 2004 and Monday 6December 2004 in line with Airey Ryan & Hill report (item 4.1);
(3) Upon installation of the tanks, the City of Mandurah will attend the Property to supervise the installation of the Tanks; and
(4) That upon the Tanks being approved by the City of Mandurah, the balance of the purchase price, being the sum of $27,000, is unconditionally paid to our client within 24 hours of you receiving the written confirmation."
9 The appellants' action is to recover the sum of $27,000 mentioned in that letter.
10 At par 5 of their statement of claim the appellants allege that the parties agreed to proceed to settlement on 22 November 2004 on certain terms which included each of the four terms referred to in the letter from Wojtowicz Kelly of 19 November 2004 with the exception of the third which was pleaded as follows:
"Upon installation of the tanks, the City of Mandurah to attend the property to supervise (sic, approve) the installation of the tank,…"
11 The use of the word "sic" is customarily used in parenthesis in a quotation to call attention to something anomalous or erroneous in the original. Whoever drew the statement of claim was attempting to point out, when quoting from the letter of 19 November 2004, that the term should have referred to the City of Mandurah attending at the property to approve the installation of tanks rather than to supervise the installation of tanks. This begs the question of what was, in fact, the agreement reached between the parties at their meeting. The plaintiffs' statement of claim purports to particularise the agreement and, in particular, that term by noting that it is evidenced by a facsimile letter sent by the plaintiffs' solicitors, Wojtowicz Kelly, to Nicholson Clement dated 19th November 2004. If the agreement reached between the parties was, in fact, that the
(Page 6)
- City of Mandurah should attend the property to approve the installation of the tanks then the agreement should have been pleaded in those terms with no reference to the letter of 19 November 2004 which must, if that were the case, misrepresent that term of the agreement reached.
12 In its defence filed 7 April 2005 the respondent admitted par 5 of the statement of claim and said further that it was an implied term of the agreement that the appellants would carry out the work in a proper and workmanlike manner. The respondent now seeks leave to amend its defence by, inter alia, asserting that in breach of the agreement, the City of Mandurah failed to attend to the property at any stage during the installation of the storm water drainage tanks such that the City of Mandurah failed to supervise and/or approve the installation of the said tanks which, in turn, also failed to rectify the flooding. The respondent therefore seeks to both admit par 5 of the appellants' statement of claim and yet assert that by reason of breach of the agreement, namely the failure by the City of Mandurah to attend the property during the installation of the stormwater drainage tanks and to supervise and/or approve the installation of those tanks, it is entitled to damages.
13 It is common ground on the pleadings that on 22 November 2004 settlement pursuant to the contract and the subsequent agreement took place and the sum of $27,000 was thereafter held in the trust account of Nicholson Clement. It is further common ground that in or about December 2004 the appellants procured and arranged the installation of stormwater drainage tanks at the property in line with item 4.1 of a report dated 12 October 2004 by Airey Ryan & Hill, consulting engineers, and that on 12 January 2005 the appellants' solicitors sent a letter to the respondent's solicitors enclosing a facsimile letter from the City of Mandurah to Hawk Construction Services dated 12 January 2005 said to be in satisfaction of the requirement of the agreement reached and demanding the sum of $27,000 within 24 hours. Needless to say, that amount of money has not been paid, the funds still residing, presumably, in the Nicholson Clement trust account.
14 While admitting the foregoing the respondent pleads that the appellants were in breach of the implied term to the effect that the work should have been carried out in a proper and workmanlike manner and was not. In an affidavit sworn 29 August 2005 John Paul Tzanis deposed to the appellants having installed "three additional soakwells in or about mid December 2004". He says that, notwithstanding that that was done, the asphalt laid all over the soakwells failed, requiring the asphalt to be replaced. He deposed further that by 10 January 2005 the solicitors for
(Page 7)
- the respondent wrote to the appellants' solicitors requesting that the appellants carry out remedial works to the asphalt. No work was done. The flooding to the carparks, he says, is still a problem. Annexed to his affidavit are photographs of the premises showing flooding of the carpark in June 2005. He says that the flooding has been so bad at times that it has ruined floor coverings and other items in the building and left water marks on the building itself. There is, it appears, other water damage.
15 In an affidavit sworn 4 August 2005 in support of the application for summary judgment Andy Ned Lulich deposed to his belief that there was no defence to the claim. The affidavit of Michael John Taddei sworn 4 August 2005 is a little more expansive but only just. In addition to deposing to a belief that there is no defence to the claim the deponent annexed a company extract with respect to Prada Developments Pty Ltd to prove that it is an Australian proprietary company having been registered in Western Australia on 8 February 2002. The deponent also annexed a copy of the transfer of land with respect to Lot 1 on Strata Plan 46522 evidencing a transfer of that land by Prada Developments Pty Ltd and Andy Ned Lulich to Western Coastal Property Investments Pty Ltd for a consideration of $391,930.
16 In written submissions before Registrar Wallace, the appellants contended that the contract for the sale of land was between the appellants and Western Coastal Property Developments Pty Ltd whereas the subsequent agreement concerning $27,000 was with the respondent suggesting that the parties to the subsequent agreement were not the same as those to the substantive agreement. Given the appellants' pleading to the effect that Western Coastal Property Developments Pty Ltd contracted as trustee or agent for the respondent that contention is unsustainable. In argument before me on 7 June 2006 counsel for the appellants appeared to suggest that his client was entitled to summary judgment against the respondent and that any cause of action giving rise to a counterclaim was not actionable by the respondent but rather by Western Coastal Property Developments Pty Ltd. It was submitted that the respondent had no defence to the appellants' claim against it because whatever claims might arise against the appellants were claims which could only be pursued by another entity. Having regard to the appellants' own pleading which, as I have already observed, is common ground, there is no merit in that submission.
17 Putting aside, for the moment, the question of whether time should be extended to enable the appellants to bring an application for summary judgment, it is clear that an issue between the parties as the pleadings
(Page 8)
- presently stand is whether or not there should be a term implied in the agreement to proceed to settlement on 22 November 2004. Terms may be implied in contracts to fill gaps or to address contingencies that may affect the operation of the contract. Implied terms are a means of regulating the performance and enforcement of contracts. (Cheshire & Fifoot's Law of Contract, 8th Australian ed, Sedden & Ellinghous, par [10.36]). In principle a court implies terms only to the extent to which to do so is consistent with the actual terms of the contract. A term will not be implied if it conflicts with the actual agreement of the parties. Before considering whether a term should be implied the Court should first establish what the actual terms of the contract are (op. cit. par [10.37]). The term sought to be implied as a matter of law by the respondent being a term that work be carried out in a proper and workmanlike manner is by its nature a generic term. Generally speaking terms such as that sought to be implied by the respondent are implied into contracts for the performance of work and the provision of materials. What is sought to be implied is akin to a term that reasonable care and skill will be exercised. Such a provision is implied to ensure that work is done of an appropriate standard or that materials supplied are of an appropriate quality.
18 When the matter was argued before me on 7 June 2006 the defence, as it was then pleaded, admitted pars 6-9 of the statement of claim and alleged that, in breach of the implied term referred to in par 5 of the defence, the plaintiffs installed three additional soakwells in or about mid December 2004. Counsel for the respondent argued that, with respect to par 6 of the Amended Defence and Counterclaim, the reference to the installation of three additional soakwells was a reference to work that was separate from the installation of stormwater drainage tanks. She argued that in addition to the installation of stormwater drainage tanks the plaintiffs did certain work, being the installation of three additional soakwells, in a manner that was in breach of the term to be implied to the effect that the work would be carried out in a proper and workmanlike manner.
19 Subsequent to the hearing counsel for the respondent advised that she had been mistaken in her submission and that the installation of the stormwater drainage tanks and the three additional soakwells were, in fact, one and the same.
20 On 21 June 2006 the respondent filed a chamber summons to re-amend its defence in terms of a minute dated 20 June 2006.
(Page 9)
21 On 22 June 2006 all matters then pending in Chambers came before me at a directions hearing. I gave leave to the appellants to file a further affidavit in support of its application under O 14 of the Rules of the Supreme Court 1971. I further directed that the respondent's application by chamber summons for leave to re-amend the defence and counterclaim be adjourned to a special appointment, that the respondent have leave to file and serve a further affidavit in support of its application to amend and that the application for summary judgment be adjourned to the same special appointment.
22 The matter came on again for hearing in chambers on 17 November 2006. By then the additional material before me was an affidavit of John Paul Tzanis sworn 15 June 2006, an application by the defendant to re-amend its defence, set-off and counterclaim filed 21 June 2006, an affidavit of Andy Ned Lulich sworn 18 July 2006, an affidavit of Michael John Taddei sworn 18 July 2006 and a further affidavit of John Paul Tzanis sworn 2 November 2006.
23 Registrar Wallace, in dealing with the appellants' application for summary judgment observed, inter alia, that there was no explanation given for a delay of three months from the end of April 2005 and that the absence of an explanation for such a delay would be, in itself, sufficient to disentitle the appellants to an order granting leave to bring their application out of time. In addition she observed that the appellants had failed to file an affidavit verifying the facts pleaded in the statement of claim. She declined to grant leave to the appellants to bring the summary judgment application out of time. The appellants appealed. Having read the affidavit of Michael John Taddei sworn 18 July 2006 and, in particular, pars 11 and12 thereof, I am not satisfied that there has been a proper explanation of the delay in bringing the O 14 application. The reference to "certain negotiations" is vague and does not, in my opinion, in any event, afford a sufficient or good explanation for the delay between mid-April 2005 and early August 2005.
24 As a result of the misunderstanding by counsel for the respondent mentioned above it was appropriate that I not deliver judgment following argument of the matter in chambers on 7 June 2006. Since that time both parties have attempted to improve their respective positions vis a vis the application for summary judgment and to repair some of the inadequacies alluded to by Registrar Wallace. In his affidavit sworn 18 July 2006 Michael John Taddei, a sole director of the first appellant, referred to the facts alleged in pars 3 to 9 of the statement of claim and deposed to the truth of those facts. The problem with doing so is in relation to par 5 and,
(Page 10)
- in particular, term (c) of the alleged agreement said to be evidenced by the letter sent by the plaintiffs' solicitors, Wojtowicz Kelly, to Nicholson Clement dated 19 November 2004. It is an improper use of the term "sic" to effectively allege that the real agreement between the parties involved approval of the installation of stormwater drainage tanks by the City of Mandurah when the letter said to evidence the agreement quite clearly asserts that it was a term of the agreement that the City of Mandurah would supervise the installation of the tanks. That inappropriate pleading has led, in due course, to a confusing pleading of the defence which, on the one hand, seeks to admit par 5 of the appellants' statement of claim while now attempting to amend to assert something different on the other. Either the agreement reached by the parties was that the City of Mandurah would approve the installation of the stormwater drainage tanks or that it would supervise the installation of the stormwater storage tanks or perhaps both. Whatever was agreed needs to be pleaded. It is not appropriate to, on the one hand, rely on the letter of 19 November 2004 as evidencing the terms of the agreement and in pleading attempt to assert that it did not. It does, therefore, seem to me that there is a fundamental flaw in the appellants' statement of claim which has, in turn, given rise to confusion. I am not prepared to grant summary judgment on the pleading as it presently stands. It does seem to me that the matter needs to be clarified. I am prepared to grant leave to the appellants to amend their statement of claim within 14 days. I propose that the respondent have 10 days thereafter within which to file an amended defence and counterclaim. I am not prepared to grant leave to amend in accordance with the respondent's application filed 21 June 2006.
25 This sorry situation is brought about, at the outset, by an inappropriate pleading of the statement of claim, then compounded by a misunderstanding of instructions at the time of the hearing of the appeal on 7 June 2006 and further confused by attempts to remedy obvious inadequacies in the affidavit material supporting the application for summary judgment and further amend the defence and counterclaim in circumstances where the confusion alluded to would simply be perpetuated. My inclination is that costs be in the cause. I will hear argument from counsel as to the proposed terms of directions to be made. Suffice it to say that the appeal from the decision of Registrar Wallace is dismissed and the application filed 21 June 2006 to amend the defence, set-off and counterclaim is also dismissed.
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