St Kilda Road Pty Ltd v 170-174 St Kilda Road Pty Ltd

[2000] VSC 65

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 4322 of 2000

ST. KILDA ROAD PTY. LTD.	Plaintiff
v.
170-174 ST. KILDA ROAD PTY. LTD. AND N.D.H. DEVELOPMENTS PTY. LTD.	Defendants

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	3 MARCH 2000
DATE OF JUDGMENT:	8 MARCH 2000
CASE MAY BE CITED AS:	ST. KILDA ROAD PTY. LTD. v. 170-174 ST. KILDA ROAD PTY. LTD. & ANOR.
MEDIUM NEUTRAL CITATION:	[2000] VSC 65

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CATCHWORDS:                  Abuse of process – Stay of proceedings.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. D. Sharp	Bruce McNab
For the First Defendant	Mr. J.D. Wilson	Tisher Liner & Co.

HIS HONOUR:

1. This is the return of a summons filed on behalf of the first defendant 170-174 St. Kilda Road Pty. Ltd. to which I shall refer hereafter as "170", seeking an order pursuant to Rule 23.01 that the proceeding be stayed as an abuse of process.

1. The background to the application may be summarised as follows.

1. 170 is the owner of land at 170-174 St. Kilda Road, Melbourne.

1. On 14 April 1999 170 entered into a contract to sell the land to the plaintiff St. Kilda Road Pty. Ltd. to which I shall refer hereafter as "St. Kilda" for $1.4m.  On that same day St. Kilda paid to 170 the sum of $70,000 by way of a deposit.

1. The contract of sale provided that the payment of the balance of the purchase money was to be on 14 September 1999 or such earlier date as was mutually agreed between the parties.

1. The relevant clause in the contract relating to the payment of the balance of purchaser also provided:

"In the event that the Purchaser wishes to extend the date for payment of the Residue it shall pay to the Vendor the sum of $25,000.00 on    September 1999 and the date for payment of Residue shall be on or before the 14th October 1999.  In the event that the Purchaser further wishes to extend such settlement date for payment, then it shall pay a further sum of $25,000.00 on the 14th October 1999 and the due date for payment of the Residue shall be on or before the 13th November 1999."

1. By letter of 16 September 1999 from its solicitor to 170, St. Kilda elected to exercise its option to extend the date for completion of the contract to 14 October 1999.  A cheque for $25,000 was enclosed with the letter.

1. However, on 17 September St. Kilda stopped payment of the cheque and since that time has made no further payment in respect of the balance of purchase money.  Later on 17 September 170 served a notice of default on St. Kilda.  The notice was not complied with.

1. On 1 December 1999 170 entered into a contract to sell the land to the second defendant N.D.H. Development Pty. Ltd., to which I shall refer as "N.D.H.", for $1.5m.  Settlement of the sale is due on 30 March 2000.

1. On 3 December 1999 St. Kilda lodged a caveat on the titles to the land.

1. On 24 January 2000 170 filed an originating motion in the Court whereby it sought an order removing the caveat.

1. Following a contested hearing before Nathan, J. on 7 February, his Honour ordered that the caveat be removed.

1. On the next day St. Kilda caused a further caveat to be lodged upon the titles to the land.

1. A further application was made to Nathan, J. in relation to the matter and on 16 February his Honour ordered that the caveat be removed.

1. On that occasion his Honour ordered that St. Kilda pay 170's costs of the application on an indemnity basis.

1. On that same day i.e. 16 February St. Kilda filed a proceeding in the Court seeking to uphold the contract between it and 170.  It has joined N.D.H. as a party to that proceeding.

1. In that proceeding St. Kilda seeks the following relief:

"As against the Defendants and each of them:

A.     A declaration that the Notice of Default is void.

B.     A declaration that the Contract of Sale remains afoot.

C.A declaration that the purported resale and the purported contract of sale are void or voidable and have been or are hereby avoided.

D.     Restitution and/or compensation.

E.     Such further or other relief as shall be deemed fit and suitable.

And as against the First Defendant:

F.An order that the First Defendant specifically perform the contract of sale.

G.Further or in the alternative damages at common law, equity and pursuant to the Trade Practices Act and/or the Fair Trading Act.

H.An injunction (interim, interlocutory and permanent) restraining the First Defendant from proceeding further in breach of the contract of sale and/or with the purported resale and/or purported contract.

I.Alternatively relief against forfeiture including forfeiture of the deposit.

And as against the second Defendant:

J.An injunction (interim interlocutory and permanent) restraining the Second Defendant from proceeding further with the purported resale and/or purported contract.

K.Damages at common law, equity and pursuant to the Trade Practices Act and/or the Fair Trading Act."

1. In my opinion this proceeding is totally without merit and has been instituted by St. Kilda to exert commercial pressure on 170.

1. On two occasions St. Kilda has sought to interfere with 170's sale of the land to N.D.H. and on each occasion its attempt has been unsuccessful.  On the latter occasion Nathan, J. observed that overwhelming the evidence is that that contract between 170 and St. Kilda has been terminated on the basis that St. Kilda did not pay the balance of purchase money.  See Ex. SA7 to the affidavit of Simon Joel Abraham sworn 29 February 2000.

1. Having considered the evidentiary material which was before his Honour on the occasions his Honour dealt with the matter, it is my opinion that such a finding was inescapable.

1. When this application was argued before me on Friday last counsel for St. Kilda contended that I should not entertain the application, that there should be a full trial of the proceeding with St. Kilda being given the opportunity to avail itself of all interlocutory procedures available to it pursuant to the rules.  It was said that only in that way would it be possible to fully investigate St. Kilda's claims in respect of the land.

1. Clearly that submission was designed to achieve a situation whereby settlement of 170's sale of the land to N.D.H. would not take place on 30 March and in all probability N.D.H. would then walk away from the property.

1. When I put that proposition to counsel for St. Kilda, he was not prepared to face up to it maintaining instead that St. Kilda's contract had not been validly terminated because the Notice of Remission served on it was defective.

1. I was informed by counsel for 170 that a similar argument relating to the validity of the Notice of Remission had been put to Nathan, J. but rejected by him.

1. A further argument raised by counsel for St. Kilda was that in the circumstances of this case St. Kilda would be entitled to relief against forfeiture.

1. Whilst I must confess I found that a somewhat novel proposition I observed to counsel for St. Kilda that if a court was minded to adopt that course it would only do so on the condition that St. Kilda immediately paid to 170 the balance of purchase money of $1,330,000.

1. Counsel's reaction to the observation was to say that St. Kilda was unable to do that as it would be relying on the proceeds of sale of the units it had proposed to build on the land to enable it to ultimately pay the balance of purchase money.

1. The simple fact of the matter is that in my opinion St. Kilda does not and probably never did have the money available to it to effect a settlement of the sale of the property on 14 September 1999.

1. When one has regard to the content of paragraph 16 of the affidavit of 170's solicitor Simon Abraham sworn 29 February 2000 relating to the solvency of St. Kilda and George Kallis that is hardly surprising.

1. In my opinion this proceeding has been brought for the improper purpose of frustrating 170's sale of the property to N.D.H.

1. In ordering that the two caveats in question be removed from the titles to the land it was clearly the intention of Nathan, J. that the sale should proceed.  That also is my view of the matter.

1. Accordingly I order that this proceeding now be stayed.

1. I order that the plaintiff pay the first defendant's costs of the application on an indemnity basis

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