SAS Global Forrestdale Pty Ltd v Forestdale Developments Pty Ltd

[2010] WASC 104

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   SAS GLOBAL FORRESTDALE PTY LTD -v- FORESTDALE DEVELOPMENTS PTY LTD [2010] WASC 104

CORAM:   LE MIERE J

HEARD:   20 APRIL 2010

DELIVERED          :   18 MAY 2010

FILE NO/S:   CIV 2809 of 2009

BETWEEN:   SAS GLOBAL FORRESTDALE PTY LTD

Plaintiff

AND

FORESTDALE DEVELOPMENTS PTY LTD
Defendant

Catchwords:

Practice and procedure - Application for summary judgment - Whether the defendant has an arguable defence - Turns on own facts

Legislation:

Planning and Development Act 2005 (WA), s 145
Rules of the Supreme Court 1971 (WA), O 14

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     Mr P G Mcgowan

Defendant:     Mr S Penglis

Solicitors:

Plaintiff:     Mendelawitz Morton

Defendant:     Cornerstone Legal

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

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

1. LE MIERE J: The plaintiff (SAS) applies for summary judgment pursuant to O 14 of the Rules of the Supreme Court 1971 (WA). The defendant submits that it has an arguable defence and an arguable counterclaim.

Subject matter of the action

1. SAS and the defendant entered into two written contracts whereby SAS agreed to sell, and the defendant agreed to purchase, properties described as proposed lots 313 and 320 Forrestdale Business Park (the Properties).  SAS alleges that the defendant is in breach of the contracts because it failed to complete settlement.  The defendant alleges that it validly terminated the contracts because servicing of the land by SAS had not been completed by the date specified in the contract and under the terms of the contract the defendant was entitled to, and did, give the requisite notices to terminate the contracts.  The defendant counterclaims for the amount of the deposits paid pursuant to the contracts.

2. SAS' application for summary judgment turns on the proper construction of cl 10.1, cl 1.1 and cl 9.6 of each of the contracts.

The contract clauses

1. Clause 9.6 provides:

   If a separate Certificate of Title to the Land is not issued by Landgate on or before the date mentioned in the Schedule or if the servicing of the Land to be undertaken by SAS has not been completed by that date then either party may by giving written notice to the other terminate this Contract whereupon the Deposit and any other money paid by the Buyer under the Contract shall be repaid to the Buyer … provided that if there is any delay in obtaining the issue of the Certificate of Title or [the plaintiff] completing the servicing of the Land and such delay is beyond the reasonable control of SAS that date shall be extended by a period equivalent to the period of such delay.

   The Schedule specifies the 'latest date for issue of Certificate of Title for the land under condition 9.6' to be 1 September 2009.

2. The issue in this summary judgment application concerns whether the servicing of the land to be undertaken by SAS had been completed by 1 September 2009.  Services are dealt with in cl 10.  Clause 10 provides:

   10.1The Buyer and SAS acknowledges and confirms that:

   (a)the Land has or will be serviced by SAS in accordance with conditions imposed by the Commission at SAS' sole costs and expense;

   …

   10.2The Buyer acknowledges and confirms that:

   (a)the Buyer has made its own enquiries in relation to all servicing required to be effected to the Land for its proposed Development and will meet all such servicing requirements (other than as mentioned in paragraph 10.1(a)) at its costs;

   …

   The definitions and interpretation in cl 1.1 includes:

   'Commission' means the Western Australian Planning Commission.

   'Serviced' means the compliance with all conditions imposed by the Commission before a separate title can be issued in respect of the Land and 'servicing' has a corresponding meaning.

SAS' contentions

1. SAS submits that the substance of SAS' 'servicing' obligations must be derived by reference to the conditions imposed by the Commission in its written approval dated 12 February 2008.

2. The Commission issued a document entitled 'Approval Subject To Condition(s) Freehold (Green Title) Subdivision' on 12 February 2008 (Conditional Approval).  By the Conditional Approval the Commission stated, amongst other things:

   The WAPC is prepared to endorse a deposited plan in accordance with the plan submitted once the condition(s) set out have been fulfilled.

   The condition(s) of this approval are to be fulfilled to the satisfaction of the WAPC.

   The condition(s) must be fulfilled before submission of a copy of the deposited plan for endorsement.

3. The defendant says the following conditions were not satisfied:

   1.Those lots not fronting an existing road being provided with frontage to a constructed road(s) connected by a constructed road(s) to the local road system and such road(s) being constructed and drained at the applicant/owner's cost.  As an alternative the WAPC is prepared to accept the applicant/owner paying to the local government the cost of such road works as estimated by the local government subject to the local government providing formal assurance to the WAPC confirming that the works will be completed within a reasonable period as agreed by the WAPC.  (Local Government)

   …

   11.Suitable arrangements being made with the Water Corporation so that provision of a suitable water supply service will be available to lot(s) shown on the approved plan of subdivision.  (Water Corporation)

   12.Suitable arrangements being made with the Water Corporation so that provision of a sewerage service will be available to the lot/s shown on the approved plan of subdivision.  (Water Corporation)

   …

4. SAS relies upon the confirmation of compliance with the conditions from the separate government authorities responsible for answering to the Commission and approval by the Commission.  SAS submits that it is not a matter for the parties to be satisfied as to the standard of fulfilment of the conditions.  SAS submits that if the Commission was satisfied that the conditions had been complied with then the servicing of the land had been completed for the purposes of cl 9.6.

5. Condition 1 is the subject of notification by the City of Armadale in a letter of 15 June 2009 to the Commission.  The Executive Manager, Planning Services of the City stated:  'I now advise clearance of conditions 1 … imposed by the Western Australian Planning Commission in its approval dated 12 February 2008'.  The letter enclosed a number of plans that certified that conditions, including condition 1, had been fulfilled to the satisfaction of the City.

6. By letter of 26 June 2009 to representatives of SAS the Water Corporation stated that conditions, including conditions 11 and 12 of the Conditional Approval, had been fulfilled to the satisfaction of the Water Corporation except for exceptions not presently relevant.

7. The deposit plan was indorsed 'approved by Western Australian Planning Commission' on 12 August 2009.  SAS says that the endorsement on the plan is an endorsement of the Commission's approval under Planning and Development Act 2005 (WA) s 145(4)(b)(i) and is conclusive evidence that the conditions imposed by the Commission were complied with, at the latest by 12 August 2009 when the Commission indorsed its approval on the diagram or plan of survey.

8. SAS submits that by 12 August 2009 the Commission was satisfied that the conditions had been complied with and therefore servicing of the land had been completed by that date for the purposes of cl 9.6.

Defendant's contentions

1. The defendant submits that the Commission's endorsement of the deposited plan is not conclusive proof that 'servicing' of the Land is complete and 'compliance' with all of the conditions within the Conditional Approval has been accomplished.  The defendant says that the actual servicing has not taken place in that there are no access roads, water connections or sewer system connected.  There is evidence to support those contentions.  The defendant contends that the definition of 'servicing', and in particular 'compliance' with the conditions contained within the Conditional Approval, is not conclusively determined by the Commission's approval, but rather requires the actual compliance with the conditions contained within the Conditional Approval.

Principles applicable to summary judgment

1. The test to be applied in determining whether to summarily dispose of an action has been variously described.  In General Steel Industries Inc v Commissioner for Railways(NSW) (1964) 112 CLR 125 Barwick CJ said that great care must be exercised to ensure that under the guise of achieving expeditious finality a litigant is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal and summary disposal should be reserved for cases so clearly untenable that they cannot possibly succeed (130). In Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 Gaudron, McHugh, Gummow and Hayne JJ observed:

   It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court's jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways …, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way [57].

2. Wherever a summary judgment is sought a judge may, in appropriate cases, reach a conclusion on a question of law, even one involving considerable argument, if at the conclusion of the argument he considers the answer is clear.  If the judge is satisfied that the plaintiff's claim must succeed it will ordinarily be appropriate that summary judgment be entered.  However, if the judge fails to reach that state of satisfaction then the matter should not be disposed of summarily.  If the judge considers that the defendant has at least an arguable defence, which may mean that the plaintiff will not succeed at trial, then the judge must allow the matter to go on to trial.  The judge may finally determine a question of construction of a contract when it is ordered that a preliminary issue be determined before trial, however, the judge may not summarily dispose of the matter where the defendant has an arguable case.

Is there an arguable defence?

1. In my view the construction advanced by the defendant is at least arguable.

2. Section 145 of the Planning and Development Act 2005 (WA) deals with the indorsement upon a diagram or plan of survey of subdivision of approval by the Commission. The approval of the Commission may be subject to conditions. Subsection 4(b) applies where the Commission has given approval subject to conditions. Subsection 4(b)(i) relevantly provides that if the Commission is satisfied that the conditions have been complied with or will be complied with at the time a certificate of title is created or registered the Commission is to indorse its approval on the diagram or plan of survey. The Commission did indorse its approval. That is evidence that, or from which it might be inferred that, the Commission was satisfied that the conditions had been complied with or would be complied with at the time a certificate of title was created or registered.

3. It is arguable that upon their proper construction cl 9.6 and the definition of 'serviced' in cl 1.1 have the effect that the servicing of the land has not been completed until the conditions have been complied with in fact and it is not sufficient that the Commission is satisfied that the conditions have been complied with.

4. 'Serviced' is defined in cl 1.1 to mean the compliance with all conditions imposed by the Commission before a separate title can be issued.  'Serviced' is not defined to mean compliance to the satisfaction of the Commission with all conditions imposed by the Commission.  Clause 9.6 empowers either party to terminate the contract if one of two events or circumstances have not been completed by the specified date.  The first is a separate certificate of title is not issued by Landgate.  The second is that servicing of the land has not been completed.  The effect of the plaintiff's construction is that the second condition must necessarily be satisfied if the first condition is satisfied.  It is improbable that the parties to the agreement would have intended to insert a provision which has virtually no practical effect.  In general, one should look to see whether any other meaning produces a more reasonable result.  Of course, it may be impossible to give a full and accurate meaning to every word or phrase in the agreement and the agreement must be construed according to its context and its terms as a whole.

5. Summary judgment should not be granted if the construction advanced by the defendant is arguable.  I find that it is.  That is, it is arguable that for the purposes of cl 9.6 servicing of the land is not completed until all the conditions imposed by the Commission have been complied with as a matter of fact.  It is not necessary or appropriate that I consider whether the construction advanced by the plaintiff is to be preferred to that advanced by the defendant.  There is evidence that the conditions had not, as a matter of fact, been complied with by 1 September 2009.

6. The action should proceed to trial where fuller and more complete argument will be made.  In those circumstances it is not appropriate to discuss the strength and weaknesses of the competing arguments.  The defendant will have leave to defend.