Ron Farris Real Estate Pty Ltd v Australian Real Estate Investment Ltd
[2011] WASC 112
•2 MAY 2011
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RON FARRIS REAL ESTATE PTY LTD -v- AUSTRALIAN REAL ESTATE INVESTMENT LTD [2011] WASC 112
CORAM: ACTING MASTER CHAPMAN
HEARD: 6 APRIL 2011
DELIVERED : 2 MAY 2011
FILE NO/S: CIV 2603 of 2010
BETWEEN: RON FARRIS REAL ESTATE PTY LTD
Plaintiff
AND
AUSTRALIAN REAL ESTATE INVESTMENT LTD
First DefendantSYDNEY JAMES CHESSON
Second DefendantRON FARRIS REAL ESTATE PTY LTD
First Defendant by CounterclaimRONALD SYDNEY PRICHARD FARRIS
Second Defendant by Counterclaim
Catchwords:
Practice and procedure - Leave to bring application - Summary judgment - Pleadings - Costs
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff: Mr T M Clavey
First Defendant : Mr A C Willinge
Second Defendant : No appearance
First Defendant by Counterclaim : No appearance
Second Defendant by Counterclaim : No appearance
Solicitors:
Plaintiff: Clavey Legal
First Defendant : Rowe Bristol Lawyers
Second Defendant : No appearance
First Defendant by Counterclaim : No appearance
Second Defendant by Counterclaim : No appearance
Case(s) referred to in judgment(s):
Eng Mee Yong v Letchumanan [1980] AC 331
Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10
Fancourt v Mercantile Credit Ltd (1983) 154 CLR 87
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125
Patrick v Capital Finance Pty Ltd (No 4) [2003] FCA 436
White v Johnston (1986) 8 ALT 53
ACTING MASTER CHAPMAN: The plaintiff by way of chamber summons filed on 29 November 2010, seeks the following orders:
1.The defendants' defence and counterclaim be struck out and judgment be entered against the first defendant pursuant to Order 14 of the Rules of the Supreme Court.
2.The defendant do pay the plaintiff's costs of this application to be taxed.
3.The first defendant do pay the plaintiff's costs of the action to be taxed.
4.The plaintiff do have leave to bring this application if required.
Order 14 r 1 requires applications of this nature be brought within 21 days after appearances. Leave was given by Registrar S Boyle to bring this application out of time.
Evidence
The first defendant took issue to exhibit RF 14 of the affidavit of Ronald Sydney Pritchard Farris sworn 29 November 2010. This annexure purports to be an affidavit sworn by the second defendant in this action in District Court action CIV 5 of 2009. It is said that an affidavit sworn in one proceedings cannot be used in different proceedings without leave and there is no evidence that leave has been sought or given. The first defendant relied upon the decision of Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 where at [96] Justices Hayne, Heydon and Crennan said:
Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise [Bourns v Raychem Corporation [No 3] [1999] 1 All ER 908 at 916 [19]; affd [1999] 3 All ER 154 at 169‑170], to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery [Riddick v Thames Board Mills Ltd [1977] QB 881; Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 32-33], answers to interrogatories [Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509 at 510‑511; Ainsworth v Hanrahan (1991) 25 NSWLR 155], documents produced on subpoena [Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322], documents produced for the purposes of taxation of costs [Bourns Inc v Raychem Corporation [1999] 3 All ER 154 at 169‑170], documents produced pursuant to a direction from an arbitrator [Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 33, 39, 46‑47, 48], documents seized pursuant to an Anton Piller order [Cobra Golf Inc v Rata [1996] FSC 819], witness statements served pursuant to a judicial direction [Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509; Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 at 223; State Bank of South Australia v Smoothdale (No 2) Ltd (1995) 64 SASR 224 at 229] and affidavits [Medway v Doublock Ltd [1978] 1 WLR 710; [1978] 1 All ER 1261; Re Addstone Pty Ltd (in liq); Ex parte Macks (1998) 30 ACSR 156]. The appellants did not dispute the existence of this principle, and in particular did not dispute its potential application to the affidavit of Mrs Hesse and the witness statement of Dr Tonin.
Counsel for the plaintiff contends the decision in Hearne only applies to the use of documents in proceedings for a collateral purpose. He referred to par 26.9.6 of Seaman, P, Civil Procedure Western Australia; Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10; Patrick v Capital Finance Pty Ltd (No 4) [2003] FCA 436.
He argues that the affidavit contains highly relevant material, it is a document in the possession of the plaintiff and is a discoverable document in these proceedings. In relation to the affidavit in question, I am not told the purpose for which it came into existence, nor whether it was received into evidence. I consider the affidavit is relevant to this application and in the particular circumstances of this application, I consider the plaintiff can rely upon the affidavit, together with its annexures.
Background
The plaintiff claims an amount of $728,000 against the first defendant for three debts. In essence, there are three loans which the plaintiff says have not been repaid. One loan related to the sum of $300,000 which is said to have been made on or about 8 June 2007. The loan was for the period 8 June 2007 to 31 July 2007.
A further loan was for $500,000 for the period 3 December 2007 to 22 December 2007. At par 6 of the affidavit of Sydney James Chesson which is exhibit R‑14 to the affidavit of Ronald Sydney Pritchard Farris sworn 29 November 2010, Mr Chesson deposes as follows:
6.On 9 May 2007 and 29 February 2008 the Second Defendant did pay the sum of $20,000 (9 May 2007) and $160,000 (29 February 2009)respectively to the account of Ron Farris Real Estate Pty Ltd but the payments were not made by way deposit on the contract with the First Defendant the payments which do not even accord with the contract referred to in paragraph 3 herein were made for an entirely different purpose namely the repayment of loans made by Ron Farris Real Estate Pty Ltd to the Second Defendant. The Second Defendant had entered into various written loan agreements acknowledging amounts owed to Farris in relation to various other contracts to buy land in the Baldivis area where Farris who was the selling agent had agreed also to put up the deposit on the Second Defendants behalf.
6.1.Now produced and shown to me marked 'SJC‑l' is a true copy of an acknowledgment of debt in favour of Farris signed by me on behalf of the Second Defendant dated 8 June 2007.
6.2.Now produced and shown to me and marked 'SJC‑2' is a true copy of a further acknowledgment of debt in favour of Farris signed by myself on behalf of the Second Defendant dated 3 December 2007.
Annexure SJC1 reads:
AUSTRALIAN REAL ESTATE INVESTMENT LIMITED
412 NEWCASTLE STREETWEST PERTH WA 6005
8th June 2007
Ron Farris Real Estate Pty Ltd
PO Box 112SOUTH PERTH WA 6951
Dear Sir,
We confirm the loan from Ron Farris Real Estate Pty Ltd for the period from 8 June 2007 to 31 July 2007 being $300,000.00.
Yours faithfully,
[signed]
………………………
S CHESSONDIRECTOR
Annexure SJC2 reads:
AUSTRALIAN REAL ESTATE INVESTMENT LIMITED
412 NEWCASTLE STREETWEST PERTH WA 6005
3 December 2007
Ron Farris Real Estate Pty Ltd
P.O. Box 112
SOUTH PERTH WA 6951
Dear Sir
We confirm the loan from Ron Farris Real Estate Pty Ltd for the period from 3rd December 2007 to 22nd December 2007 being $500,000.00.
Yours faithfully,
[signed]
………………………
S CHESSONDIRECTOR
Counsel for the plaintiff contends this is an admission made prior to commencement of the proceedings. Counsel for the plaintiff referred to the affidavit of Maureen Ann Heal sworn 18 February 2011. She annexes documents in the same terms as annexures SJC1 and SJC2 which are annexures MH1 and MH3 respectively. She deposes to the fact that she prepared each document on instructions from Mr Farris. She deposes as follows:
1.I am employed by the Plaintiff as its Office Manager. I have been employed by Mr Ron Farris, a director of the Plaintiff, for 28 years as his personal assistant.
2.I swear this affidavit in answer to matters raised in the affidavit of Sydney James Chesson sworn 9 February 2011, which was sworn in opposition to the Plaintiff's application for summary judgment against the First Defendant and in opposition to the Plaintiff's application to strike out the Defendants' Defence and Counterclaim.
3.The matters deposed to in this affidavit are within my own knowledge except for where otherwise indicated. To the extent that I rely on information and belief, the source of that information is set out in this affidavit.
4.I refer to paragraph 27 of Mr Chesson's affidavit which refers to annexures RF‑4 and RF‑8 of the affidavit of Mr Farris sworn 29 November 2010 in support of the Plaintiff's application for summary judgment against the First Defendant.
5.Now produced and shown to me and marked 'MH‑1' is a true copy of the letter dated 8 June 2007 confirming a loan in the sum of $300,000.00 to the First Defendant and being annexure 'RF‑4' to Mr Farris' affidavit ('the Second Loan Agreement'). I recognise this letter as being a document that I prepared on instructions from Mr Farris.
6.I recall that on that day Mr Farris asked me to prepare a letter confirming a loan of $300,000.00 to the First Defendant and to write out a cheque in the sum of $300,000.00 payable to the First Defendant.
7.I typed the Second Loan Agreement at the Plaintiff's offices at Suite 9, 23 Richardson Street South Perth on 8 June 2007.
8.Now produced and shown to me and marked 'M‑2' is a true copy of the cheque from the Plaintiff to the First Defendant dated 8 June 2007 in the sum of $300,000.00. I wrote out the cheque on 8 June 2007 for Mr Farris to sign.
9.On 8 June 2007, I took the cheque and the Second Loan Agreement to Mr Farris and Mr Chesson, who were in Mr Farris' personal office, and gave both the cheque and Second Loan Agreement to Mr Farris.
10.I recall that Mr Farris gave me the signed Second Loan Agreement and asked me to make a copy. I made a copy for our file, stamping it 'COPY' and returned the original to Mr Farris.
11.Now produced and shown to me and marked 'MH‑3' is a true copy of the letter dated 3 December 2007 confirming a loan in the sum of $500,000.00 to the First Defendant and being annexure 'RF‑8' to Mr Farris' affidavit ('the Third Loan Agreement). I recognise this letter as being a document that I prepared on instructions from Mr Farris.
12.I recall that on that day Mr Farris asked me to prepare a letter confirming a loan of $500,000.00 to the First Defendant and to write out a cheque in the sum of $500,000.00 payable to the Plaintiff's trust account. I recall that the cheque was in payment of a deposit payable on a contract for the sale of land between Collective Property Investments as buyer and George William Morgan and Rosemary Morgan for Lot 100 (Number 436) Young Road, Baldivis dated 3 December 2007. I refer to annexure RF‑7 of Mr Farris' affidavit which annexes a copy of this contract.
13.I typed the Third Loan Agreement at the Plaintiff's offices at Suite 9, 23 Richardson Street South Perth on 3 December 2007.
14.Now produced and shown to me and marked 'MH‑4' is a true copy of the cheque from the Plaintiff to the Plaintiff's Trust Account dated 3 December 2007 in the sum of $500,000.00. I wrote out the cheque on 3 December 2007 for Mr Farris to sign.
15.On 3 December 2007, I took the cheque and Third Loan Agreement to Mr Farris and Mr Chesson, who were in Mr Farris' personal office, and gave both the cheque and Third Loan Agreement to Mr Farris.
16.I recall that Mr Farris gave me the signed Third Loan Agreement and asked me to make a copy. I made a copy for our file, stamping it 'COPY' and returned the original to Mr Farris.
Of those documents, the second defendant deposes as follows at pars 37 and 38 of his affidavit sworn on 9 February 2011 (in this action):
37.I recall Farris coming to my office. I do not recall the date but I think it was in January or February 2008. He parked his car at the back of my offie and called me on my mobile phone. Farris asked me to come downstairs to see him. He said that he had to cover his tracks because some of the contracts for Baldivis were not in order and he had transferred the money from the Plaintiff's general account to the Plaintiff's real estate trust account. He said that his auditors were checking up on him and he needed the paperwork tidied up to explain why he had been putting money into his own trust account. He had a pile of documents with him that he asked me to sign. I signed them on the boot of his car. He later provided me with photocopies of the documents annexed to the Farris Affidavit as RF‑4 and RF‑8. I expect that those documents were part of the documents he wanted me to sign as 'tidying up matters for the auditors'.
38.It is true that Farris caused 'RF‑4' and 'RF‑8' t be prepared. This document has not been prepared on the First Defendant's usual letterhead.
The circumstances in which these documents are said to have been prepared and signed differ greatly. The allegation made by the second defendant is serious indeed.
Counsel for the plaintiff contends that the evidence in support of the first defendant's opposition to the summary judgment application requires close scrutiny. It is said the first defendant does not depose to facts which raise an arguable defence, an arguable counterclaim or a serious question to be tried. Counsel further argues that the belated attempt by the first defendant to raise the second defendant's lack of authority to enter into the loans is, at best, shadowy. It seems to me that questions such as this will very much depend on the facts as found.
Counsel for the first defendant submits that this is not a simple case about three loans. He asserts the true nature of the arrangement was that of a joint venture. There are a number of factual disputes as to whom the funds were actually paid, together with a dispute as to what has actually been repaid.
He further contends both the pleadings and the affidavits show there are numerous factual contests about critical issues. He submits the fact‑finding process in relation to these issues may well be influenced by credibility, in circumstances where there is apparently a degree of animosity between the main protagonists. He says the fact‑finding process will be affected by discovery which has not yet been given, but is likely to be significant.
On applications such as this, it was never intended that, when the facts are in dispute, the action should be disposed of summarily (White v Johnston (1986) 8 ALT 53). That does not mean the court must uncritically accept every statement in an affidavit (Eng Mee Yong v Letchumanan [1980] AC 331, 341). Power to order summary judgment is to be exercised with great care and will not be exercised unless it is clear that there is no real question to be tried (Fancourt v Mercantile Credit Ltd (1983) 154 CLR 87, 99).
I have carefully examined the evidence and am of the view that a number of factual disputes have been raised which should not be disposed of summarily, but should be tested at trial. Further, several serious allegations have been raised about the conduct of the parties. These also require proper investigation at a trial.
Conclusion
I am of the view that this is not one of those straightforward cases which is appropriate to be disposed of summarily. Further, I am not persuaded that the defence and counterclaim should be struck out. Having reached those conclusions, I would dismiss the application.
1
8
1