Rhodes v De Castro - [2022] WASC 214

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RHODES -v- DE CASTRO [2022] WASC 214
CORAM:   HILL J
HEARD:   14 FEBRUARY 2022
DELIVERED          :   30 JUNE 2022
FILE NO/S:   CIV 2171 of 2021
BETWEEN:   DAMIEN TERENCE MICHAEL RHODES
Plaintiff
AND
GUI JORGE DA COSTA NAPOLEAO DE CASTRO
Defendant

Catchwords:

Practice and procedure - Application by plaintiff for summary judgment - Settlement deed required transfer of units in a trust to the value of $500,000 - Whether plaintiff has established defendant has no arguable defence to claim - Turns on own facts

Practice and procedure - Order 59 r 9 of the Rules of the Supreme Court 1971 (WA) - Whether application should be dismissed because of alleged failure to confer

Practice and procedure - Admissibility of documents as business records under s 79C of Evidence Act 1906 (WA) - Whether documents 'prepared' or 'used' in the trust

Legislation:

Evidence Act 1906 (WA) s 79C
Rules of the Supreme Court 1971 (WA), O 14, O 59 r 9

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	C S Gough
Defendant	:	C S Williams

Solicitors:

Plaintiff	:	Mills Oakley
Defendant	:	Solomon Brothers

Cases referred to in decision:

Brocx v Hughes [2008] WASC 34
Donohoe v The Director of Public Prosecutions (WA) [2011] WASCA 239
McKay v Commissioner of Main Roads [No 2] [2010] WASC 153
Miles v Bull [1969] 1 QB 258; [1968] 3 All ER 632
Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67
Pownall v Conlan Management Pty Ltd as trustee for the Kalbarri Trust (1995) 12 WAR 370; (1995) 16 ACSR 227
Re McCallum, Holdco Pty Ltd (Administrators appointed) (No 2) [2021] FCA 377

HILL J:

On 23 July 2021, the plaintiff in these proceedings (together with another party) issued proceedings in this court against the defendant and two other parties, being proceedings CIV 1721 of 2021 (First Proceedings). On 27 July 2021, I made freezing orders against the defendant and his related corporate entities freezing assets up to the value of $750,000. Following the making of these orders, the parties entered into settlement negotiations and ultimately, on 4 August 2021, entered into a deed of settlement and release (Deed).
The defendant and his related corporate entities did not perform certain obligations under the Deed. As a result, on 13 August 2021, the plaintiff filed a motion for judgment in the First Proceedings. On 3 September 2021, I ordered that judgment be entered in so far as the plaintiffs in those proceedings were seeking to enforce the Deed. The part of the claim on which judgment was not entered concerned the contention that the defendant had breached cl 5.1(c) of the Deed.
As a consequence, on 4 November 2021, the plaintiff commenced these proceedings by way of a writ of summons indorsed with a statement of claim. A memorandum of appearance was filed on 15 November 2021. On the same date, the plaintiff filed a summons for summary judgment supported by an affidavit of the plaintiff, together with a memorandum pursuant to O 59 r 9(1) of the Rules of the Supreme Court 1971 (WA) (Rules). The plaintiff seeks an order for judgment against the defendant in the sum of $500,000, together with interest at the rate of 6% per annum from 11 August 2021 until the date of payment.
The application is opposed by the defendant, primarily on the basis that the plaintiff has not adduced admissible evidence in support of his claim. In the alternative, the defendant says there was no proper conferral before the application was filed and there is 'some other reason' the matter should proceed to trial.
For the reasons that follow, it is my view that the plaintiff's application should be dismissed.

Evidence on application

On 16 December 2021 and 9 February 2022, I made orders granting leave to the parties to rely on a number of documents filed in the First Proceedings.
In support of his application, the plaintiff relied on one affidavit filed in these proceedings, being his affidavit filed 15 November 2021, as well as seven affidavits filed in the First Proceedings being:
(a)four affidavits of Meriel Louise Steadman, a partner of Mills Oakley, the solicitors for the plaintiff, filed 13 August 2021 (Third Steadman affidavit), 20 September 2021 (Seventh Steadman affidavit), 29 September 2021 (Eighth Steadman affidavit), and 26 October 2021 (Tenth Steadman affidavit);
(b)a confidential affidavit of Meriel Louise Steadman filed 29 September 2021 (Confidential ninth Steadman affidavit); and
(c)a confidential affidavit of Sherif Andrawes filed 26 October 2021(Confidential Andrawes affidavit).
The defendant relied upon two affidavits filed in the First Proceedings, namely his affidavits filed 27 August 2021 and 2 September 2021.

Conferral

The defendant contends the plaintiff failed to comply with the obligations of O 59 r 9 of the Rules and that the application should be dismissed on this basis.
The memorandum of conferral relevantly records that on 15 November 2021, the plaintiff's solicitors attempted to contact the solicitor for the defendant on three occasions for the purposes of conferral. At approximately 3.33 pm on that date, the solicitor for the defendant returned these calls. The memorandum records that the defendant's solicitor was unable to engage in meaningful conferral as he had not been made aware by his client or the solicitor on the record in the First Proceedings that there remained a live issue in respect of cl 5.1(c) of the Deed. The defendant's solicitor indicated he would seek instructions. The memorandum then records:
In light of the defendant's failure to instruct Mr Williams in this regard, the plaintiff's solicitors are of the view that the requisite instructions to advance conferral are unlikely to be provided by the defendant to his solicitor in a timely manner, if at all.
As a consequence, the chamber summons for summary judgment was filed on that date. The summons was initially listed for directions on 3 December 2021. At this hearing, no objection was taken to the summons (including on the basis of any absence of conferral) and orders were made programming the summons through to hearing in February 2022. The orders included orders for the defendant to file and serve any affidavits in opposition to the application by 21 January 2022 and for the parties to file submissions.
The Court of Appeal recently summarised the principles that apply to an alleged failure to comply with O 59 r 9 of the Rules in Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd.[1] In that case, the Court of Appeal stated that:[2]
[B]y the time that the application was heard …, the parties' respective positions had become clear, namely that issue had been joined. What could have been achieved by further conferral at that point is not apparent. To the extent there had been a failure to confer, the practical effect of the failure was that the parties and the court were involved in a hearing on [date] that might potentially have been avoided (or shortened). At its highest, that might have justified an appropriate costs order.
[1] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67 [42] - [61].
[2] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [60].
Similar observations may be made in respect of this application. Even if the summons was filed without waiting for the defendant's solicitor to revert to the plaintiff's solicitors, there was a two and a half month delay between the first return date of the summons and the hearing. In the interim, the defendant filed detailed submissions opposing the plaintiff's application and at the hearing of the application continued to oppose the application.
In these circumstances, it is my view that to the extent there has been a failure to confer (on which I make no finding), I consider any failure should be waived.

Factual background to application

On 23 July 2021, the plaintiff and another commenced the First Proceedings against a number of parties including the defendant in these proceedings. In compromise of the First Proceedings, on 4 August 2021, the parties entered into the Deed. The obligations under the deed included an obligation, pursuant to cl 5.1(c), that:[3]
Mr De Castro shall take all steps to transfer to Mr Rhodes 150,000 units, alternatively, units to the value of $500,000 (whichever is the higher value) in the Ibis Perth Hotel and the transfer must be effected by 11 August 2021.
[3] Third Steadman affidavit 'MLS-48'.
The reference to the 'Ibis Perth Hotel' is a reference to the property located at 69 Adelaide Terrace, East Perth, Western Australia (Property). The Property is owned by Rehawk Property Group Pty Ltd in its capacity as trustee of a unit trust known as the Rehawk Property Group Unit Trust (Trust).[4]
[4] Confidential ninth Steadman affidavit 'MLS-94'.
On 5 August 2021, the defendant caused an email to be sent to the plaintiff's solicitors enclosing a transfer form signed by the defendant for 150,000 units in the Trust.[5]
[5] Third Steadman affidavit 'MLS-55'.
In response, the plaintiff's solicitors stated they were waiting for confirmation of the value of a unit in the Trust. On receipt of this confirmation, they would either arrange for the plaintiff to sign the transfer form or advise the defendant of their view.[6]
[6] Third Steadman affidavit 'MLS-56'.
On 5 and 6 August 2021, the parties exchanged emails in relation to the value of units in the Trust. [7] On 6 August 2021, the plaintiff's solicitor advised the defendant's then solicitor that they considered the value of a unit in the trust was $1.00. As a consequence, they requested the transfer form be amended to increase the number of units being transferred to 500,000 units.[8]
[7] Third Steadman affidavit 'MLS-56' - 'MLS-61'.
[8] Third Steadman affidavit 'MLS-62'.
In response, the defendant did not amend the transfer form but offered to arrange for an independent valuation of the units in the Trust.[9] This offer was rejected by the plaintiff.[10]
[9] Third Steadman affidavit 'MLS-63'.
[10] Third Steadman affidavit 'MLS-65'.
The plaintiff says that the value of 150,000 units in the trust as at 5 August 2021 was not $500,000. In support of this contention, the plaintiff relies on three documents. First, letters from the trustee of the Trust to unitholders of the Trust dated 28 August 2020, which valued a unit in the Trust as at 30 June 2020 at $1.00 per unit, and 2 September 2021, which valued a unit in the Trust as at 30 June 2021 at $0.84.[11] Second, a confidential report from CBRE dated 2 June 2021 (CBRE report) which valued the Property as at 27 May 2021.[12] Third, an expert report which the plaintiff obtained from Mr Andrawes of BDO, which values a unit in the Trust as at 5 August 2021 at $0.8374[13] and the value of 150,000 units in the Trust as $125,613 and not $500,000.
[11] Third Steadman affidavit 'MLS-51'; Tenth Steadman affidavit 'MLS-100'.
[12] Confidential ninth Steadman affidavit 'MLS-94'.
[13] Confidential Andrawes affidavit 'SA-1'.
The plaintiff also adduced in evidence the financial statements and tax statement of the Trust.[14]
[14] Seventh Steadman affidavit 'MLS-84'.
On the basis of these documents, the plaintiff says the defendant failed to comply with his obligations under the Deed to transfer units to the value of $500,000 and the defendant has no defence to the plaintiff's claim in the proceedings.
The defendant denies that he has not complied with his obligations under the Deed. In support of this position, he refers to an offer he received on 18 August 2021 to purchase 225,000 units in the Trust for $833,000.[15] On the basis of this offer, he was only required to transfer 150,000 units in the Trust and had taken all steps in his power to do so.
[15] Affidavit of Gui Jorge Da Costa Napoleao De Castro filed 27 August 2021 (CIV 1721 of 2021) [14] - [18], 'GDC-4', 'GDC-5'.

Principles governing application

It is trite that summary judgment will be granted only when there is no real question to be tried. The power to order summary judgment is one that should be exercised with great care and it is only in the clearest of cases, where there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted. This applies in a summary judgment application supported by evidence.
A summary judgment application is not the occasion to resolve which argument is to be accepted, particularly where not all of the relevant facts have been agreed. A party should not be denied the opportunity to put his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes.
In determining whether there is a real question to be tried:
(a)it is settled that where there is a serious point of law raised by a defendant, the matter should not be determined summarily; unconditional leave to defend should be given;
(b)a judge has a discretion in deciding whether the question of law raised is so difficult it should not be decided summarily. No doubt sometimes some explanation or reference to authorities will be necessary to enable a judge to decide whether a question is really unarguable;
(c)the applicant for summary judgment bears the legal onus of establishing there is no real question to be tried, after which the evidential burden shifts to the respondent to show there is a triable issue or an arguable defence;
(d)the defendant does not have to show a defence on the balance of probabilities but must, at least, show cause as to why there is an arguable defence. Even where the defendant cannot point to a specific issue which ought to be tried, he or she may be able to satisfy the court that the circumstances ought to be investigated;
(e)extensive argument may be necessary to demonstrate that a party's case is so clearly untenable that it cannot possibly succeed. If after argument, there remains real certainty as to the applicant's right to judgment without further investigation of the facts, summary judgment must be refused; and
(f)where the plaintiff's application fails, the appropriate course is to allow the matter to proceed to trial; summary judgment differs from a preliminary issue to be determined before trial. An application for summary judgment is not the occasion for determining, adversely, to the plaintiff and finally, a question of law.
On an application for summary judgment pursuant to O 14 of the Rules, the court may decline to award summary judgment if the defendant satisfies the court 'that there ought for some other reason to be a trial of that claim'. In Miles v Bull,[16] Megarry J expressed the view that:[17]
If the defendant cannot point to a specific issue which ought to be tried but nevertheless satisfies the court that there are circumstances that ought to be investigated, then I think that those concluding words are invoked. There are cases when the plaintiff ought to be put to strict proof of his claim, and exposed to the full investigation possible at a trial; and in such cases it would, in my judgment, be wrong to enter summary judgment for the plaintiff.
[16] Miles v Bull [1969] 1 QB 258; [1968] 3 All ER 632.
[17] Miles v Bull 266.

Parties' submissions

The plaintiff submitted the only issue that required determination on the application was whether the defendant had complied with his obligations under cl 5.1(c) of the Deed. The plaintiff contended this did not require the court to make any positive finding as to the actual value of a unit in the Trust as at 5 August 2021, but only that the value of a unit in the Trust was less than $3.33.[18]
[18] The plaintiff's written submissions say this value is $3.70. In oral submissions, counsel accepted this was an error.
The plaintiff submitted that, because the defendant had not filed any evidence in opposition to the application, the court should draw an inference that the defendant was unable to adduce evidence that 150,000 units in the Trust were worth at least $500,000.[19] Counsel for the plaintiff contended that an order for summary judgment would be consistent with the objectives of the Rules in avoiding an unnecessary trial and saving the plaintiff and the court significant time and costs. It was also submitted that:[20]
Given the defendant has filed no material in opposition to the Application, there is no prejudice to the defendant if the Application is granted.
[19] Plaintiff's submissions filed 31 January 2022 [29].
[20] Plaintiff's submissions filed 31 January 2022 [60(d)].
In oral submissions, as a result of the objections to the admissibility of the documents on which the plaintiff relied, counsel for the plaintiff submitted it was not necessary for the plaintiff to rely on any of the documents referred to at [21]. He contended that the fact the value of a unit in the Trust was less than $3.33 was evident from the defendant's own affidavit and the various scenarios he had put forward as to the value of the units in the Trust. This was because the defendant's affidavit made an incorrect assumption as to the number of units on issue in the Trust and if the correct number were used, the value of a unit did not equate to $3.33.
The defendant drew attention to the absence of a definition of value in the Deed. The defendant contended that on its proper construction, cl 5.1(c) must refer to the market value of the units.[21]
[21] Defendant's submissions filed 9 February 2022 [19].
The defendant submitted that none of the documents on which the plaintiff relied were admissible on the application. Specifically, the defendant submitted that:[22]
(a)the CBRE Report did not set out the basis on which the author was qualified to express the opinion contained and was based on facts not established by the evidence. In any event, the defendant contended the CBRE report was irrelevant as it did not value the Property at the date of breach;
(b)the Andrawes report is based on facts not established by the evidence, particularly in relation to its reliance on the CBRE Report;
(c)the letters from the trustee do not value the units in the Trust at the date of the breach and, in any event, do not express an opinion on the market value of the units but the value for super fund reporting; and
(d)the tax statement and financial statements of the Trust are irrelevant as they are not evidence of the market value of the net assets of the Trust.
[22] Defendant's submissions filed 9 February 2022 [24].
Counsel for the defendant submitted that the offer the defendant received at or about the time of the alleged breach of contract placed a value on each unit at $3.70. In his submission, this was a sufficient basis for the court to consider there is an issue or question in dispute which ought to be tried.
In any event, the defendant contended that, in the circumstances of this case, there was a good reason that there ought be a trial of the plaintiff's claim. Counsel for the defendant emphasised that none of the authors of the documents on which the plaintiff relies have been cross-examined. He drew attention to the inconsistencies in the methodology adopted in the CBRE report as compared to the Andrawes report. In his submission, '[t]his inconsistency goes to the very heart of the case which the plaintiff seeks to make'.[23]
[23] Defendant's submissions filed 9 February 2022 [60.4].
The defendant submitted he had not had a proper opportunity to obtain competing expert evidence which would require an inspection of the Property and the issue of subpoenas or an application for non-party discovery. Counsel for the defendant submitted that it was not appropriate to require the defendant to undertake these steps to resist an application for summary judgment.

Objections to evidence

The defendant objected to the admission of the documents on which the plaintiff relied to establish the value of a unit in the Trust. In the alternative, the defendant submitted the court should exercise its discretion to exclude these documents for the purposes of the application.
The plaintiff contended the first two documents on which it relied (namely the letters from the Trustee and the CBRE report) were admissible as business records of the Trust pursuant to s 79C(2a) of the Evidence Act 1906 (WA) (Evidence Act).
Section 79C(2a) of the Evidence Act provides that:
Notwithstanding subsections (1) and (2), in any proceedings where direct oral evidence of a fact or opinion would be admissible, any statement in a document and tending to establish the fact or opinion shall, on production of the document, be admissible as evidence of that fact or opinion if -
(a)the statement is, or directly or indirectly reproduces, or is derived from, a business record; and
(b)the court is satisfied that the business record is a genuine business record.
The terms 'business' and 'business record' are defined in s 79B of the Evidence Act as follows:
business means any business, occupation, trade or calling and includes the business of any governmental body or instrumentality and of any local government;
business record means a book of account or other document prepared or used in the ordinary course of a business for the purpose of recording any matter relating to the business.
That is, the question is whether the documents on which the plaintiff relies (apart from the expert report of Mr Andrawes) are documents which are 'prepared or used in the ordinary course of a business for the purpose of recording any matter relating to the business'. The use of alternatives 'prepared or used' in the definition means that two questions arise when considering whether a document is a business record, namely:[24]
(a) was the document 'prepared' in the ordinary course of a business for the purpose of recording any matter relating to the business; or
(b) was the document 'used' in the ordinary course of a business for the purpose of recording any matter relating to the business?
[24] Donohoe v The Director of Public Prosecutions (WA) [2011] WASCA 239 [124] (Buss JA; Murphy JA and Hall J agreeing).
In McKay v Commissioner of Main Roads [No 2],[25] Beech J explained at [32] the second of these alternatives in the following terms:
[I]f a business uses an externally generated document as a record of information relating to its business, it does not thereby use the document 'for the purpose of recording any matter relating to the business' within the meaning of the definition of business record. To my mind, a document is used for the purpose of recording matters relating to the business only if there is or it is contemplated that there will be some further or ongoing recording of information by or on behalf of the business.
[25] McKay v Commissioner of Main Roads [No 2] [2010] WASC 153.
I turn then to consider the documents on which the plaintiff relies. First, in relation to the letters from the Trustee, these letters were prepared by the Trustee for unitholders to record the value of a unit for the purpose of superannuation fund reporting. In this regard, I accept that these letters fall within the first of these alternatives, namely that the letters were prepared in the ordinary course of business and record a matter which relates to the business of the Trust. In my view, these letters are business records of the Trust and are admissible under s 79C(2a) of the Evidence Act.
In relation to the CBRE report, it is clear from its terms that this document was not prepared by the Trustee in the ordinary course of the Trust's business nor was it prepared by CBRE for the purpose of recording a matter in relation to CBRE's business. As such, it does not fall within the first of these alternatives. In relation to the second alternative, there is no evidence before me to suggest the CBRE report was used by the Trustee 'for the purpose of recording any matter relating to the business'. It is not sufficient, for the purposes of the Evidence Act, that the Trust or Trustee received the CBRE report and that the report contained information relating to its business. For these reasons, I do not consider the CBRE report is admissible as a business record of the Trust as truth of its contents.
Even if I am wrong in this regard, I consider there are three further reasons the CBRE report is inadmissible. First, on its cover, the CBRE report states that it is prepared for the lender for the purposes of first mortgage security purposes only and is not to be used or relied upon by any other party for any other purpose. The interest that was valued by CBRE was the '[c]urrent market value of the unencumbered freehold interest in the subject property, on a going concern basis, subject to the existing management agreement'.[26] That is, the CBRE report valued the Property and not a unit in the Trust. The valuation makes plain that it was specifically prepared on the assumption that any lender was providing mortgage financing at a conservative and prudent loan to value ratio.
[26] Confidential ninth Steadman affidavit 'MLS-94', p 4.
Second, in reaching their opinion on the valuation of the property, the authors had regard to a number of specific transactions.[27] If the authors rely on these comparable transactions in order to express an opinion as to value, these transactions must be proved by admissible evidence.[28] It is clear from the terms of the CBRE report that the authors considered these comparable transactions in order to infer the value of the Property which is directly in issue. In these circumstances, without proof of these underlying transactions, the CBRE report is not admissible and cannot be relied upon for the purposes of this application.
[27] Confidential ninth Steadman affidavit 'MLS-94', p 12.
[28] Pownall v Conlan Management Pty Ltd as trustee for the Kalbarri Trust (1995) 12 WAR 370; (1995) 16 ACSR 227, 231 (Ipp J).
Third, the CBRE report expresses a view on the value of the Property and not the value of a unit in the Trust, which is the relevant issue for the purposes of these proceedings.
The final document relied upon by the plaintiff was an expert report of Mr Andrawes. Mr Andrawes sets out in his report the sources of information he had regard to in expressing his opinion. This included the valuation report of CBRE as well as audited financial statements of the Trust for the financial years ending 30 June 2020 and 30 June 2021. Mr Andrawes expressly states that he has:[29]
[n]ot performed any audit or review procedures on any of the information provided and as such I do not provide any assurance on accuracy. However, where any material inaccuracies have come to my attention I have made any changes that are necessary to the extent that they may impact on my valuation.
[29] Confidential Andrawes affidavit 'SA-1', p iv.
In his report, Mr Andrawes states that the key issue in arriving at his valuation opinion was that:[30]
[T]he predominant element of the value of the Trust is the value of the Ibis Styles Hotel property. The property was valued by CBRE Valuations Pty Ltd as at 27 May 2021 for the purpose of first mortgage security and you have instructed me that I may refer to, and rely on, CBRE's report in my valuation, subject to very strict confidentiality requirements.
[30] Confidential Andrawes affidavit 'SA-1', p 2.
That is, it is clear from the terms of Mr Andrawes' report that his opinion relies on the CBRE report. In this regard, the CBRE report is 'specific hearsay' which must be proved. In circumstances where the CBRE report has not been proved, the basis for Mr Andrawes' opinion has also not been proved and his report is inadmissible.

Disposition

In these proceedings, the plaintiff asserts the defendant breached cl 5.1(c) of the Deed by failing to transfer units to the value of $500,000 prior to 11 August 2021. It is not in dispute that the defendant forwarded to the plaintiff a signed transfer for 150,000 units prior to this date and that this transfer was not accepted by the plaintiff.
The plaintiff submitted, which I accept, that in determining this application, it is not necessary for the court to determine the actual value of a unit in the Trust as at 5 or 11 August 2021. The question for the court is whether the plaintiff had established the defendant has no arguable defence to his claim that the defendant breached his obligations under cl 5.1(c) of the Deed. This requires an assessment of whether the plaintiff has proved a unit in the Trust was worth at least $3.33 (being the sum of $500,000 divided by 150,000 units).
Pursuant to clause 13.2 of the Trust Deed, the Trustee of the Trust my cause a valuation of the Property Asset, which is defined as the property at 69 Adelaide Terrace, East Perth, and Assets of the Trust Fund to be done by a competent valuer or expert. However, there is no obligation in the Trust Deed for the Trustee to provide unitholders with information regarding the value of a unit in the Trust.
As set out above at [21], the plaintiff relied on three separate documents as evidence that the value of a unit in the Trust as at 5 or 11 August 2021 was less than $3.33. For the reasons set out above, I do not consider that either the CBRE report or Mr Andrawes' report are admissible on this application.
In relation to the letters from the directors of the Trust, these letters on their face state that the value of a unit in the Trust set out in these letters is for 'superfund (sic) reporting only'. No evidence was adduced by the plaintiff as to whether this value is the same as market value or is different.
Counsel for the plaintiff submitted the court should draw an inference from the significant difference between the valuation in these letters and $3.33 that the defendant was in breach of its obligations under the Deed. I do not accept that submission. While it is clear on the face of these documents that there is a significant difference between the value of a unit in the letter and the value that would be required to comply with the obligations under the Deed, it is also clear from the face of the letter that it was prepared for a specific purpose. There was no evidence before the court that the value of a unit 'for super fund purposes' was a market valuation, nor was this clear from the terms of the Trust Deed.
Directions made by the court required the defendant to file any affidavit evidence in opposition to the application by 21 January 2022. The defendant has not availed itself of this opportunity and there is no evidence before the court as to how long it would take to provide expert evidence or what steps, if any, have been taken to obtain evidence. Counsel for the plaintiff submitted that the court should draw an inference from the defendant's failure to adduce any expert evidence that it is unable to adduce evidence that the value of a unit in the Trust as at 5 August 2021 is more than $3.33.
Counsel for the plaintiff relied on the decision of Johnson J in Brocx v Hughes.[31] In my view, this decision is of little assistance to the plaintiff. In that case, on an application to set aside judgment which was entered following the failure to comply with a springing order, the applicant bore the onus of proof on the application and was required to file evidence explaining the delay. In these circumstances, the court held that the information provided was deficient and the court should not be required to conjecture about the correct position.[32] In this case, the plaintiff bears the legal onus of establishing the defendant has no defence to the plaintiff's claim. If it does this, an evidentiary onus then passes to the defendant to establish it has a reasonable defence to the proceedings. However, the legal onus remains with the plaintiff at all times.
[31] Brocx v Hughes [2008] WASC 34.
[32] Brocx v Hughes [92].
I accept that the plaintiff is motivated to bring these proceedings to a conclusion as quickly and efficiently as possible. If this application is dismissed, the next phase of the proceedings will involve the defendant filing a defence, discovery and subpoenas, expert evidence and a trial. All of these steps will take time and cause both parties to incur costs.
However, in this case, for the following reasons, I am not satisfied on the admissible evidence before the court that the plaintiff has discharged its onus in establishing the defendant has no defence to his claim. First, the only admissible evidence adduced by the plaintiff on this application as to the value of a unit in the Trust is the letters from the Trustee. However, these letters make plain that these letters are provided as to the value on 30 June of the relevant financial year and that they are provided for 'superfund (sic) reporting' purposes only. No evidence was adduced by the plaintiff as to whether this is the same or different to market value.
Second, I accept that there is no absolute rule as to the admissibility of evidence of an offer as proof of the value of the property in question. As was stated by O'Bryan J in ReMcCallum, Holdco Pty Ltd (Administrators appointed) (No 2):[33]
The probative value of evidence of an offer will depend on the issue to be determined and the circumstances in which the offer is made. For example, if the issue to be determined is the fair market value of property (being the price that would be paid by a willing but not anxious buyer to a willing but not anxious seller), evidence of an offer made by an anxious seller would have little, if any, relevance.
[33] ReMcCallum, Holdco Pty Ltd (Administrators appointed) (No 2) [2021] FCA 377 [260].
It is possible that at any trial of the matter, the offer the defendant received for units in the Trust may be admissible in considering the value of a unit in the Trust at the date of the alleged breach. I did not hear extensive submissions from the parties on this question and accordingly express no concluded view.
Third, in relation to the plaintiff's reliance on the defendant's representations as to the value of a unit in the Trust, there was no suggestion the defendant has expertise in valuing commercial properties or that the contents of his affidavit were anything more than a personal expression of opinion.
It is not appropriate or necessary for the purposes of this application that I comment in detail on the evidence on which the plaintiff relied. It is sufficient to state that, although the defendant's task of demonstrating the value of 150,000 units to be not less than $500,000 may be difficult, I cannot, on the admissible evidence before me, say it is clearly impossible or doomed to fail. I do not consider this is a case where only one conclusion can be said to be reasonable and accordingly, I find that the plaintiff has not discharged his onus.
For these reasons, I consider the application by the plaintiff ought be dismissed.

Interests of justice considerations

In any event, having regard to all of the circumstances of this case, I also consider the interests of justice weigh against summary judgment being granted.
The question as to whether a unit in the Trust was worth more or less than $3.33 at 5 or 11 August 2021 will depend on the expert evidence that is adduced by the parties.
At this point, no orders for expert evidence have been made. The court has an expert report, which relies on an expert valuation based on specific hearsay, which has not been tested by cross-examination.
In my view, the defendant should be given the opportunity to brief and adduce expert evidence at trial, to cross-examine Mr Andrawes, and for full argument to occur. I consider the interests of justice require this.

Conclusion

For these reasons, I consider the plaintiff's application for summary judgment should be dismissed. I will hear from the parties as to the costs of the application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
FD
Associate to the Honourable Justice Hill
30 JUNE 2022