Rehins Pty Ltd v Debin Nominees Pty Ltd - [2007] WASC 288

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: REHINS PTY LTD -v- DEBIN NOMINEES PTY LTD [2007] WASC 288

CORAM: ACTING MASTER CHAPMAN

HEARD: 10 OCTOBER 2007

DELIVERED : 29 NOVEMBER 2007

FILE NO/S: CIV 1562 of 2007

BETWEEN: REHINS PTY LTD (ACN 116 998 095)
First Plaintiff
GOLDBEACH NOMINEES PTY LTD (ACN 068 766 496)
Second Plaintiff
AND
DEBIN NOMINEES PTY LTD (ACN 008 810 688)
First Defendant
FIORE CONSTRUCTIONS PTY LTD (ACN 008 887 046)
Second Defendant

Catchwords:

Practice and procedure - Leave to amend the statement of claim - Leave to bring a summary judgment application - Summary judgment - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 14, O 16

Result:

Leave granted to amend the statement of claim
Plaintiffs granted leave to bring the summary judgment application out of time
Plaintiffs' summary judgment application dismissed
Defendants' summary judgment application dismissed

Category: B

Representation:

Counsel:

First Plaintiff                  :     Mr R R Cywicki
Second Plaintiff             :     Mr R R Cywicki
First Defendant              :     Mr L A Tsaknis
Second Defendant         :     Mr L A Tsaknis

Solicitors:

First Plaintiff                  :     Taylor Linfoot & Holmes
Second Plaintiff             :     Taylor Linfoot & Holmes
First Defendant              :     J D Finlay & Co
Second Defendant         :     J D Finlay & Co

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

Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537
Theseus Exploration NL v Foyster (1972) 126 CLR 507

ACTING MASTER CHAPMAN:

Applications

The plaintiffs, by chamber summons filed on 27 August 2007, sought:
(1)leave to amend the statement of claim in terms of the minute of proposed further amended statement of claim;
(2)leave to bring the summary judgment application out of time; and
(3)summary judgment pursuant to O 14 r 1 of the Rules of the Supreme Court 1971 (WA).
The defendants, by chamber summons filed on 3 October 2007, sought:
(1)the time for hearing the summons be abridged to 10 October 2007;
(2)leave to apply for summary judgment; and
(3)summary judgment pursuant to O 16 r 1 of the Rules of the Supreme Court.
At the hearing of this matter, the plaintiffs were granted leave to amend the statement of claim in terms of the minute with a slight amendment. Further, it was ordered that the amended minute stand as the statement of claim and leave to bring the summary judgment application out of time was granted.
As to the defendants' application, I would abridge the time and grant leave to apply for summary judgment.

Facts

It is common cause that:
(1)on 18 November 2005 the parties entered into a written contract for the sale of a portion of the land situated at 31 Office Road, Kwinana;
(2)the contract adopts the 2002 General Conditions;
(3)as the land in question comprised portion of a lot, it was necessary for the defendants to lodge an application with the Planning Commission for subdivision approval pursuant to cl 13.4 of the General Conditions;
(4)the defendants lodged an application for subdivision with the Planning Commission on 19 January 2006;
(5)on 28 February 2006, the defendants, through their agents, Sheridan's Settlement Agency, wrote to the plaintiffs refunding the deposit paid thereby purporting to terminate the contract;
(6)the plaintiffs refused to accept the defendants' purported termination of the contract;
(7)on 10 April 2007, the defendants purported to terminate the contract again.

Plaintiffs' summary judgment application

In the prayer for relief in the statement of claim, the plaintiffs seek:
A.A declaration that the Variation Agreement is in force and that the Defendants are obliged to proceed with it.
B.Specific performance of the Variation Agreement.
C.Damages for breach of the Variation Agreement in lieu of or in addition to specific performance of the Variation Agreement.
D.All necessary and consequential accounts, directions and enquires.
E.Further or other relief, as is just.
F.Costs.
In the application before me the plaintiffs seek an order in terms of par 4 of the chamber summons which reads:
A notice of termination served on the Plaintiffs by the Defendants dated 28 February 2006 is ineffective to terminate the Contract and the verbal representation by Mr Dino Elpitelli on 10 April 2007 is ineffective to terminate the Variation Agreement and the Variation Agreement remains in full force and effect.
Essentially what the plaintiffs seek is judgment in terms of par A of the prayer for relief.
The plaintiffs contend that:
(1)pursuant to cl 13.4 of the General Conditions, the defendants were contractually obliged to use their best endeavours to secure the subdivision plan as soon as practicable so as to enable settlement to take place on the prescribed settlement date;
(2)the principal issue between the parties is whether the defendants did perform their obligations pursuant to cl 13.4, thus entitling the defendants to terminate the contract pursuant to cl 13.7;
(3)the defendants failed to use their best endeavours as prescribed by cl 13.4 and, as such, have repudiated the contract and the subsequent variation agreement by purporting to terminate the contract and the variation agreement on 28 February 2006 and 10 April 2007 respectively.
The variation agreement is defined at par 13 of the statement of claim, where it is pleaded:
On 30 June 2006 at the offices of the Town of Kwinana, the Defendants through their representative Mr Dino Elpitelli entered into a verbal agreement with the Plaintiffs through their representatives Mr Declan Greaney and Mr Roger Franklin that the Defendants would proceed to settlement under the Contract as soon as a title for the sub‑division lot was issued ('Variation Agreement').
Mr Gianfranco Fiore, at par 4 of his affidavit sworn on 27 September 2007, denies that Mr Corradino Elpitelli was at any time authorised to act as agent for the second defendant nor was he authorised to enter into any contract including the purported variation agreement. Mr Elpitelli makes a similar statement at par 62(g) of his affidavit sworn 27 September 2007. The only evidence to the contrary is Mr Declan John Greaney's rather bald statement at par 9 of his affidavit sworn 23 August 2007 where he states that at all material times Mr Elpitelli acted as agent for the second defendant.
Counsel for the plaintiffs accepts there is a dispute on the facts between the plaintiffs and the defendants regarding the variation agreement, but argues it is only relevant if it were held the contract was validly terminated on 28 February 2006. In these circumstances he accepts it would not be appropriate to enter judgment. He contends the definition of the variation agreement in par 13 of the statement of claim does not abandon the contract, but rather extends the settlement date under that contract.
As an alternative he submits that the problem can be cured simply by seeking an amendment to the statement of claim to refer to the contract as opposed to the variation agreement. I note that no application was made for an amendment at the special appointment. Even if that were so, the relief sought is clearly in relation to the variation agreement and evidence in relation to that agreement is in issue.
If there is a question which ought to be tried after the matter has been explained to the court, for there is real uncertainty without full argument or further investigation of the facts as to the plaintiffs' right to judgment, then there should be leave to defend: Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332, 335. Even if the facts which are established are inconclusive, if it is not possible to say without doubt on the whole of the material that there is a question to be tried, there should be leave to defend: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99.
In view of the conflict of evidence in relation to the variation agreement, I consider there are doubts as to the true position to the extent that it would be unjust to grant judgment and decline to do so.

Further application to amend the statement of claim

Some 15 days after the special appointment had concluded, the solicitors for the plaintiffs wrote to my associate including a minute of proposed further amended statement of claim which, it is said, effectively remedied the inconsistencies I had identified and sought that I grant leave to amend the statement of claim in terms of that minute.
In my view, it would be inappropriate to do so for substantially two reasons. First, O 14 proceeds on the basis that a statement of claim has been served on the defendant and that the application for summary judgment is supported by an affidavit verifying the facts on which the claim or part of the claim to which the application relates is based. To allow an amendment at this late stage, in my view, would be unfair to the defendants. Secondly, whilst the amended statement of claim may clarify one aspect upon which a summary judgment application should properly be rejected, there remains on foot the question of the proper interpretation of the contract and whether or not either or both of the parties have complied with those terms. In this regard, there is a dispute on the evidence which it is not appropriate to resolve at this interlocutory stage.
Should I be wrong in that regard, I consider there are other reasons why the plaintiffs' summary judgment application should fail, and consider these can best be addressed by dealing with the defendants' application for summary judgment.

Defendants' summary judgment application

The defendants bring their application on the basis they have a good defence to the plaintiffs' claim which it is said is frivolous or vexatious. The first defendant contends that to succeed in its claim the plaintiffs must establish:
(1)a pre‑existing contract the subject of the variation agreement;
(2)the parties entered into the variation agreement;
(3)the variation agreement was capable of creating an interest in the land; and
(4)the defendants failed to use their best endeavours to effect a subdivision of the land the subject of the variation agreement.
In relation to the variation agreement, the defendants submit there is no evidence that:
(1)s 34(1)(a) of the Property Law Act 1969 (WA) has been complied with;
(2)Mr Elpitelli was authorised to bind the second defendant in writing;
(3)any consideration which has moved from the plaintiffs.
As to the first point, the plaintiffs rely on par 26 of the affidavit of Mr Greaney sworn 23 August 2007 as evidencing the variation agreement, where he deposes as follows:
I refer to paragraph 13 of the Statement of Claim. A copy of an email from Dino Elpitelli to Roger Franklin dated 26 October 2006 evidencing the Variation Agreement is now shown to me and attached hereto and marked with the letters 'DJG13'.
I fail to see that the email evidences the variation agreement, but even if it did, the question of authority is clearly in issue. Further, the defendants deny they entered into the variation agreement. I have already considered this matter in relation to the plaintiffs' application and have concluded there is a clear conflict on the evidence which should not be resolved at this interlocutory stage.
As to the original contract, the defendants say it was validly terminated on 28 February 2006 because the defendants were entitled to terminate the contract without giving reasonable time for completion when the time for settlement expired on 21 February 2006, and rely on Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537.
It was submitted by the plaintiffs that whether a condition or a term of a contract constitutes a contingent condition is a question of construction and that the term 'no later than the 21st February 2006' does not constitute a contingent condition. It is said it is simply a statement as to settlement and as such any question concerning settlement and delays thereof are entertained by cl 4 of the General Conditions. I consider there is some force in that argument. In any event, the plaintiffs argue that the first defendant was in default under the contract and thus was not in a position to terminate the contract. The first defendant disputes this.
Counsel for the plaintiffs contends that the right to terminate the contract due to the non‑fulfilment of a subdivision is only available to a party who has strictly complied with the time requirements imposed by cl 13 of the General Conditions and, in this case, the requirement to use their best endeavours. It is said the issue of whether a party has used his best endeavours must be determined objectively with regards to what is necessary to obtain the requisite goal. It was argued that cl 13.4 requires the defendants to lodge an application with the Planning Commission within 15 days of the contract date.
The defendants did not lodge an application in that time but argue an application for subdivision approval had previously been made and therefore cl 13.4 has no application. The defendants argue that in relation to a previous contract a plan for subdivision was lodged on 26 August 2004 and the planning authority gave conditional approval on 20 December 2004. It is said that approval is relevant as the approval in relation to this contract was given on 26 May 2006 and cross‑referenced the approval letter of 20 December 2004. The approval was still conditional with the conditions being the same as imposed on 20 December 2004.
The defendants argue that the revised plan requested on 22 November 2005 to be prepared and lodged with the Planning Commission for approval referred to in par 36 of the affidavit of Mr Elpitelli sworn 27 September 2007 was not a new application, but it was a revised application. What is clear is the parcel of land sought to be dealt with in the previous contract was different from the parcel the subject of this action. This, I think, is significant.
It is accepted by counsel for the defendants that the land in the revised plan is a new parcel of land, but he argues:
(1)clause 13.4 is notoriously a clause routinely inserted into numerous contracts and the factual matrix on which the parties negotiated is central to how the clause is interpreted;
(2)the parties had previous dealings with the land;
(3)the plaintiffs are aware of previous applications.
The plaintiffs argue that cannot be the case as the new contract, by necessity, required a further application to be made because the parcel of land constituting the new lot was different in its dimensions to that which had been the subject of the previous approval. The plaintiffs say the application should have been lodged with the Planning Commissioner no later than 9 December 2005, whereas it was not lodged until 19 January 2006. Because of that the plaintiffs submit the defendants are clearly in default of cl 13.4 and could not rely upon cl 13.7 to terminate the contract.
I accept that the factual matrix may have a bearing on how the clauses of the contract will be applied in any particular circumstances. In that regard, there are a number of issues to be determined in this matter which have an impact both on the plaintiffs' and the defendants' applications. One is the proper interpretation of the contract and/or the variation agreement. This would have regard to the 2002 General Conditions. It is not unknown for courts to determine questions of law on a summary judgment application, but in this case I consider the factual matrix may well be relevant, some of which is in dispute. It is entirely proper for a court to decline to dispose of difficult and substantial questions of law which cannot be determined without full argument: Theseus Exploration NL v Foyster (1972) 126 CLR 507, 514 ‑ 515. I consider this case falls into that category.
The question of whether or not the purported termination of the contract on 28 February 2006 was valid or not can only be determined once the dispute on the facts and the proper interpretation of the contract has been determined.
The defendants contend they were at liberty to terminate the contract on 10 April 2007 due to the unreasonable conditions having been imposed by the Town of Kwinana. The Planning Commission approval of the revised plan was notified to P J Neale Surveys, the defendants' agent, on 26 May 2006. This approval was subject to the same conditions as the approval relating to the previous contract which included compliance with the conditions imposed by the Town of Kwinana.
At the commencement of his submissions, counsel for the defendants sought to rely upon the affidavit of Mr Elpitelli sworn 9 October 2007 which deals with the cost of sealing the paved area of the subdivision, it being said to be one of the conditions imposed. Counsel for the plaintiffs had only seen the affidavit briefly, but did not object to the defendants relying on it subject to the plaintiffs having an opportunity to provide a responsive affidavit. On 12 November 2007, the plaintiffs filed such an affidavit having been sworn by Mr Greaney on the same date. These affidavits raise further disputes on the facts.
The plaintiffs argue that the right to terminate the contract due to an unacceptable condition was governed by cl 13.5 of the General Conditions. Clause 13.5(d) provided the defendants with a 10‑day window of opportunity to notify the plaintiffs of their intention to terminate the contract due to the imposition of an unacceptable condition. They further contend the defendants had until 6 June 2006 to notify the plaintiffs of their intention to terminate for this reason, but they did not do so until 10 April 2007. As this was done verbally it is said it does not satisfy cl 13.5 of the General Conditions.
For the reasons given in respect of the purported termination on 28 February 2006, I do not consider the question of whether the purported termination on 10 April 2007 is valid or not should be made at this interlocutory stage.

Conclusion

I am of the view that both the plaintiffs' and defendants' applications for summary judgment should be declined as, in my view, there are serious issues to be tried.