Seneviratne v 96 & 102 Terrace Road Pty Ltd
[2012] WASC 471
•4 DECEMBER 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: SENEVIRATNE -v- 96 & 102 TERRACE ROAD PTY LTD [2012] WASC 471
CORAM: MASTER SANDERSON
HEARD: 28 NOVEMBER 2012
DELIVERED : 28 NOVEMBER 2012
PUBLISHED : 4 DECEMBER 2012
FILE NO/S: CIV 3305 of 2011
BETWEEN: SHOHAN ASIRI SENEVIRATNE
Plaintiff
AND
96 & 102 TERRACE ROAD PTY LTD
Defendant
Catchwords:
Summary judgment - Application to extend time to make application - Termination of contract to purchase land without prior default notice - Turns on own facts
Legislation:
Nil
Result:
Extension of time granted
Judgment for the plaintiff
Category: B
Representation:
Counsel:
Plaintiff: Mr J D Steedman
Defendant: Mr D K Barker
Solicitors:
Plaintiff: Karp Steedman Ross-Adjie
Defendant: Chalmers Legal Studio Pty Ltd
Case(s) referred to in judgment(s):
Nil
MASTER SANDERSON: This was the plaintiff's application for an extension of time within which to bring a summary judgment application. If leave was granted then the plaintiff sought judgment. The defendant also applied by summons for leave to amend its defence in terms of a minute of amended defence and counterclaim dated 6 September 2012. At the conclusion of the hearing I indicated to the parties I would extend time within which to bring the application and enter judgment for the plaintiff. I said I would publish my reasons for doing so. These are those reasons.
The facts in this matter are simple and are not in dispute. By a contract for sale of strata title by offer and acceptance dated 5 December 2005 the plaintiff agreed to purchase and the defendant agreed to sell an apartment to be constructed in a multi‑storey strata titled development on Terrace Road, East Perth. As might be expected the contract was subject to a number of conditions. These conditions are pleaded in par 3(a) of the statement of claim. Some of the conditions operated in favour of the plaintiff and some in favour of the defendant. The plaintiff pleads all conditions were satisfied or the benefit of the conditions was waived. On 30 October 2007 the defendant purported to terminate the contract on the basis a condition known as the 'Viability Condition' had not been satisfied. The defendant then treated the contract as at an end and on 25 January 2008 it sold the completed apartment to a third party. The plaintiff alleges this is a repudiation of the contract which it has accepted. It seeks damages for the defendant's breach of the contract.
When the plaintiff first alleged the defendant had repudiated the contract the defendant maintained it was entitled to rely upon the matters set out in the notice of termination. However by the time a defence was filed on 23 January 2012 the defendant had undergone a change of heart. It now accepts it had no right to terminate the contract based upon the Viability Condition. However it still maintains it was entitled to terminate the contract. It is convenient to set out the defendant's position by reference to the defendant's proposed amended defence and counterclaim. Having pleaded the contract was on foot and settlement was due on 18 August 2009 the defendant continues:
9.4The plaintiff:
9.4.1did not as required by clause 7.1 of the Contract deliver to the Defendant not less than 5 business days before Settlement a duly executed and stamped Transfer Document in a form capable of registration at Landgate but for the execution by the Defendant;
9.4.2did not as required by clause 7.3 of the Contract specify the place for settlement in the Perth CBD;
9.4.3did not as required by clause 7.4 of the Contract specify a time for settlement between 10.30 am and 3.30 pm on the Settlement Date;
9.4.4.did not on 18 August 2009 tender performance of his obligations under clause 7.5 of the Contract; and
9.4.5did not as required by clause 12.1 of the Contract serve upon the Defendant a default notice.
10.By reason of the matters pleaded in paragraph 9.4 the plaintiff was in fundamental breach of the contract.
There is a fatal flaw in the defendant's argument. Assuming for present purposes the plaintiff was in breach of the contract as pleaded by the defendant, the defendant did not give the plaintiff a default notice requiring him to rectify the default. A copy of the offer and acceptance and the contract appears as annexure SAS1 to the affidavit of the plaintiff sworn 11 June 2012 and filed in support of the application. Clause 12 of the contract is headed 'default'. Clause 12.1 is in the following terms:
Time shall be of the essence in respect of this Agreement but neither of us shall be entitled to institute proceedings against the other arising from any breach of the provisions of this Agreement nor shall either party be entitled to terminate this Agreement or the sale arising from the breach by the other of any provisions of this Agreement unless the party who is not in default (called the 'non‑defaulting party') has given written notice (called the 'default notice') to the other party (called the 'defaulting party') specifying the breach and calling upon the defaulting party to remedy the breach within the time specified in the default notice (being not less than 10 business days after the service of the default notice) and the defaulting party fails to remedy the breach.
It is not in dispute the defendant did not give the plaintiff a default notice. Prima facie then it was precluded from terminating the contract even assuming the plaintiff was in default as alleged. The defendant attempted to overcome this difficulty by alleging 'fundamental breach'. As I understand the argument it was said the breaches of the contract by the plaintiff was such the contract came to an end and it was not incumbent upon the defendant to issue a default notice before accepting the plaintiff's repudiation of the contract.
Clause 12 makes it plain that time is the essence of the contract. But it also makes plain a default notice must be issued and a party must be given the opportunity to remedy a default before the contract can be terminated. I can see no basis in this case for maintaining the defendant could terminate the contract without a default notice. It is simply at odds with the clear wording of the agreement.
It is clear from the above the plaintiff had a very strong case. It was the strength of the case which was the deciding factor in my extending time to bring this application. The writ in this matter was issued on 2 December 2011 and a memorandum of appearance was entered on 21 December 2011. Allowing for the exclusion of time found in O 3 r 3 of the Rules of the Supreme Court 1971 (WA), the plaintiff had until early February 2012 to bring the summary judgment application. The defence was delivered on 23 January 2012 and from that date onwards the plaintiff was aware the defendant would not be relying on the alleged breach of the viability condition. The matter came on for a status conference on 9 March 2012 and was referred to mediation. But the plaintiff had taken no steps between 23 January and 9 March 2012 to bring on a summary judgment application. In fact the application was not filed until 21 June 2012. By that time an unsuccessful mediation had taken place.
The plaintiff maintained given the position the defendant adopted prior to the delivery of the defence a failure to apply for summary judgment was understandable. That may be so. But there is no explanation in any of the affidavit material as to why an application was not made in the period between 23 January and 9 March 2012. If an application had of been made it would have been determined before a mediation and the costs associated with filing an amended defence and applying to further amend the defence. The costs of the mediation would be avoided.
But it would not be in the interests of justice to allow a case as clear as this one to proceed further. It would only result in unnecessary expense to all concerned. Far better it is terminated now and the parties move on. However the plaintiff's delay has had consequences in terms of costs for the defendant and the costs order I will make as a consequence will not simply reflect the outcome. The parties should file short submissions in relation to costs and I will make an order in due course.
However as to the proceedings themselves there should be judgment for the plaintiff.
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