Signore v Antonio Giannitto & Ors No. Scciv-03-1614

SIGNORE v ANTONIO GIANNITTO & ORS
[2004] SASC 19
Civil

DEBELLE J. This is an appeal from an order of a magistrate made on 15 October 2003 striking out an action. The appeal was instituted on 12 November 2003. It is therefore some 13 days out of time. The appellant applies for an extension of time within which to appeal.
I deal first with the events leading to the appeal. On 6 February 2003 the plaintiff entered into two contracts with the defendants to purchase three adjoining parcels of land at 270, 272 and 274 Payneham Road, Payneham. The first two defendants are the registered proprietors of the land at 270 Payneham Road and all three defendants were the registered proprietors of the land at 272 and 274 Payneham Road. Each parcel of land has a building erected on it.
The purchaser on each contract was stated to be the plaintiff or his nominee. The sale included all buildings, fixtures and fittings: Schedule E to each of the contracts. The plaintiff alleges that in breach of each contract the defendants removed certain fixtures including a number of air-conditioning units, a heating unit and alarm systems.
A dispute between the plaintiff and defendants arose which in turn led to the contract not being completed. The plaintiff issued proceedings in the Supreme Court seeking among other things specific performance of the contracts and damages for the removal of the fixtures. The defendants filed a defence. After a time the parties agreed to complete the contracts and litigate only the question whether the items which were removed were fixtures which should have been transferred to the plaintiff. The plaintiffs also agreed to transfer the action to the Magistrates Court. Orders to that effect were made in this Court on 6 May 2003. In addition an order was made that the defendants pay $10,000 into the Magistrates Court Suitors Fund to abide the outcome of the action in the Magistrates Court.
Pursuant to leave granted in the Magistrates Court, the plaintiff filed an amended statement of claim limiting the relief claimed to damages for the fixtures which had been removed, damages for a loss of rental and other income, and a claim for bank interest. The defendants filed a defence and counterclaim. The defendants also joined as a third party the real estate agent who had arranged the sale of the three properties.
On 29 September 2003 the defendants lodged an application to strike out the action and other ancillary orders. The application was made on the ground that the plaintiff had no standing to prosecute the action as the registered proprietor of each parcel of land was not the plaintiff but a company called Payneham Central Pty Ltd (“Payneham Central”).
The application was argued on 15 October 2003. The magistrate gave ex tempore reasons for judgment allowing the defendants’ application. The magistrate made the following orders.
1.An order striking out the plaintiff’s claim.
2.An order that the sum of $10000 paid into the Magistrates Court Suitors Fund be repaid to the defendants.
3.An order that the plaintiff indemnify the defendants for the cost of a third party proceedings.
4.An order that the plaintiff pay the defendants’ costs in the Magistrates Court since 6 May 2003 on an indemnity basis.
The plaintiff appeals against all of these orders.
It is convenient to deal first with the merits of the appeal. The magistrate struck out the plaintiff’s action. She did not simply strike out the plaintiff’s statement of claim. That is confirmed by the fact that the magistrate order repayment of the sum of $10,000 to the defendant. The defendants do not suggest other than that the magistrate struck out the plaintiff’s action. The order, therefore, has the same effect as an order dismissing the claim. The order is an order which finally disposes of the rights of the parties and is, therefore, a final order: Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246. If I am wrong in that conclusion, I am firmly of the view that this is a matter where it is proper to grant leave to appeal. The reasons for that conclusion are apparent from what follows.
The description of the purchaser in the contract as the plaintiff or his nominee conferred a power on the plaintiff to purchase the land or to nominate some other person as purchaser: Williams on Vendor and Purchaser (4th ed.) pp 54-55 and at p 642. In such a case, the plaintiff is the sole purchaser but the plaintiff is at liberty to effect a novation of the contract by nominating a purchaser who agrees to be bound: Tonelli v Komirra Pty Ltd [1972] VR 737 at 740. The exercise of the nomination results in a novation and the nominee cannot enforce the contract unless the vendor consents to the nomination: Lambly v Silk Pemberton Ltd [1976] 2 NZLR 427 at 429 and 433, and Karangahape Road International Village Ltd v Holloway [1989] 1 NZLR 83 at 101. The party named as purchaser in the transfer of each parcel of land was Payneham Central. As the plaintiffs have completed the contracts for the sale of the land it must be inferred that they consented to the novation. Thus there was a new contract with Payneham Central as purchaser.
The fixtures were removed before the completion of the contract at a time when Payneham Central had not been nominated as purchaser. The contracting parties at that time were the plaintiff and the defendants. The plaintiff was entitled to have the defendants complete the contract according to its terms. There is no clear evidence of all of the facts relating to the settlement or as to the arrangements between the plaintiff and Payneham Central. There must, therefore, be questions whether the plaintiff had to indemnify Payneham Central for any loss occasioned by the removal of the fixtures. There are questions also as to whether the losses claimed were incurred by the plaintiff or by Payneham Central or by both. If it is established that there was any wrongdoing on the part of the defendants it might be that the only party who has suffered loss is Payneham Central. However, I repeat that there are considerable gaps in one’s understanding of the facts. There is also a question whether the plaintiff was acting as the agent for an undisclosed principal. The resolution of that issue was not known to the magistrate at the time. All of these issues point to the fact that the magistrate ought to have allowed the plaintiff an opportunity to clarify the position.
It seems that the plaintiff’s former legal advisers have been rather less than diligent in their prosecution on his claim. By letter dated 15 September 2003 the solicitor for the defendants informed the former solicitors for the plaintiff that she intended to advise her client to apply to strike out parts of the statement of claim on the ground that they did not disclose a cause of action. By letter dated 16 September 2003 she gave them notice that the defendants would be applying to have the action dismissed on the ground that Payneham Central was the purchaser. On 30 September 2003 the application to strike out the action was served on the plaintiff’s former solicitors. The plaintiff’s former solicitors did not respond to either of the letters from the defendants’ solicitor nor did they file any evidence in answer to the application. Indeed, they did not inform the plaintiff of the defendants’ application until 4 November 2003, that is to say, after the orders had been made and after the time for appeal had expired. Plainly, the conduct of the former solicitors for the plaintiff is less than satisfactory and may give rise to a claim on the part of the plaintiff against them. That is not a matter which I need examine any further.
It is apparent from an affidavit filed by Mr Minicozzi, the solicitor for the defendants, that on the hearing of the application before the magistrate the plaintiff’s former solicitor did not make any application for leave to join Payneham Central as a plaintiff, did not apply to adjourn the application, and informed the magistrate that he had no instructions on the issues which had been raised. This only serves to underline my earlier remarks that the solicitors for the plaintiff have not diligently represented his interests.
In all the circumstances I think the magistrate acted peremptorily in striking out this action. It is well established that the jurisdiction to determine an action summarily for want of a cause of action is to be sparingly employed: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130. An action will be struck out if it is so obviously untenable that it cannot succeed: General Steel at 129. As Dixon J, as he then was, noted in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91:
“A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abusive process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.”
The onus which the defendant had to discharge is conveniently expressed in Rule 25.04 of the Supreme Court Rules which requires the defendant to establish that the plaintiff cannot succeed on any view of the facts or law. That cannot be said of the plaintiff’s case in this action. I have already referred to issues of fact which might arise. There is also an interesting question of law whether the plaintiff is entitled to bring the action on behalf of his intended nominee: Beswick v Beswick [1968] AC 58. There is also a question of law arising from the fact that the plaintiff might have been the agent for an undisclosed principal.
For all of these reasons, the magistrate ought to have allowed the plaintiff’s solicitor an opportunity to get instructions as to whether the plaintiff sought to bring the action in his own name only or to join Payneham Central as a plaintiff. There were not in my view sufficient grounds upon which to strike out the plaintiff’s action. There were a number of relevant facts which were not known to the magistrate. I sympathise with the magistrate in that the plaintiff’s former solicitor did not make her task any the easier. However, given the attitude adopted by him and once he had alerted the magistrate to the fact that he had no instructions on the issues raised by the defendants, the magistrate ought to have adjourned the matter directing the plaintiff to obtain instructions. For these reasons the magistrate erred in striking out the action. It follows that the magistrate should not have ordered repayment of the sum of $10,000 to the defendants.
I turn to the appeal against the order that the plaintiff pay indemnity costs to the defendants. An order for indemnity costs should not be lightly made. The order is a departure from the ordinary rule that the successful party recovery party and party costs. The party seeking an order for indemnity costs must satisfy the court that proper grounds exist. Those grounds are set out in the reasons of Sheppard J in Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 at 254-257. Generally speaking, there needs to be some special or unusual feature in the case to justify the court departing from the ordinary rule.
The magistrate gave the following reasons for making the order:
“In relation to the defendants’ costs, whilst I accept that the plaintiff was not vexatious or has deliberately inconvenienced the defendants in this way, and while it is highly likely that it is due to error that has led to these proceedings, it is clearly a case where the defendant is entitled to indemnity costs for the costs that have been incurred since the hearing in the Supreme Court on 6 May 2003.”
It is apparent from those remarks that there is nothing which takes this case out of the ordinary. The magistrate acknowledged that the plaintiff was not vexatious and had not deliberately inconvenienced the defendants. She does not indicate the ground upon which indemnity costs should be payable. The best Mr Milazzo could do, when arguing this appeal, was to point to the fact that the defendants should not be unduly out of pocket if a fresh action were commenced by Payneham Central. That is hardly a ground which justifies an order for indemnity costs. On any view of the matter, there were no sufficient grounds to justify an order for indemnity costs. In no respect did the matter fall within the principles enunciated by Sheppard J in Colgate Palmolive Co v Cussons Pty Ltd. For these reasons, even if the appeal against the order striking out the action were to fail, the appeal against the order for costs must succeed.
It follows that all of the other orders made by the magistrate should also fall.
I turn to the question whether it is proper to grant an extension of time within which to appeal. Mr Milazzo, who appeared for the defendants, properly took the view that if the issues on the appeal were arguable, there is no ground upon which to refuse to extend the time within which to appeal. His concession accords with authority. Generally speaking, there are four factors which must be established if a party is to secure an extension of time within which to appeal where that party has not instituted an appeal within time. Those factors are, the length of the delay, the reason for the delay, whether there is an arguable case, and the extent of any prejudice suffered by the intended respondent: Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196.
I deal first with the question of whether the plaintiff has an arguable case on the appeal. It is apparent from the reasons already given that the plaintiff has a manifestly arguable case. The plaintiff would succeed in having all the orders set aside.
In this case the length of the delay is only some 13 days. The reason for the delay is that the plaintiff’s former solicitors did not promptly inform the plaintiff of the orders made on 15 October 2003. The default lies entirely at their door. It is well established that a plaintiff will not, as a general rule, be adversely affected by any default on the part of his solicitor. The only prejudice to which the defendants can point is having to litigate the issues raised in the plaintiff’s claim. I do not think that is sufficient ground to refuse to extend the time within which to appeal, particularly as the plaintiff clearly has an arguable case on this appeal. I will, therefore, make an order extending the time within which to appeal.
There will be order as follows:
1Extend the time within which to institute this appeal to 12 November 2003.
2Appeal allowed.
3Set aside the orders the magistrate made on 15 October 2003.
4Leave to the plaintiff within 14 days to add Payneham Central Pty Ltd as a plaintiff in this action.
5Within 21 days the plaintiff shall amend his particulars of claim to reflect the added plaintiff.
6The defendant shall pay the sum of $10,000 into the Magistrates Court Suitors Fund.
7The plaintiff shall pay the defendants’ costs of and incidental to the application of the defendants dated 29 September 2003.
8The defendants and the third party shall pay the costs of and incidental to this appeal other than the costs of and incidental to the institution of the appeal and of the affidavit of Luciano Signore.

[2004] SASC 19

13 January 2004