Starbrake Holdings Pty Ltd as Trustee for the Starbrake Holdings Trust v Pollock
[2014] WASC 385
•24 OCTOBER 2014
STARBRAKE HOLDINGS PTY LTD As Trustee For the Starbrake Holdings Trust -v- POLLOCK [2014] WASC 385
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 385 | |
| Case No: | CIV:2261/2012 | 15 OCTOBER 2014 | |
| Coram: | ALLANSON J | 24/10/14 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed | ||
| B | |||
| PDF Version |
| Parties: | STARBRAKE HOLDINGS PTY LTD As Trustee For the Starbrake Holdings Trust JAMIE KEVIN POLLOCK CARINA LEE-ANNE HEALEY STONETRADERS PTY LTD As Trustee For the Stonetraders Trust |
Catchwords: | Practice and procedure Application to separately try issues of liability Entitlement to possession of land Saving in time and cost Current use of land unlawful |
Legislation: | Environmental Protection Act 1986 (WA), s 57, s 68A Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B, O 32 r 4 |
Case References: | Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47 Landsdale Pty Ltd v Moore [2009] WASCA 176 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
JAMIE KEVIN POLLOCK
First Defendant
CARINA LEE-ANNE HEALEY
Second Defendant
STONETRADERS PTY LTD As Trustee For the Stonetraders Trust
Third Defendant
Catchwords:
Practice and procedure - Application to separately try issues of liability - Entitlement to possession of land - Saving in time and cost - Current use of land unlawful
Legislation:
Environmental Protection Act 1986 (WA), s 57, s 68A
Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B, O 32 r 4
Result:
Application allowed
Category: B
Representation:
Counsel:
Plaintiff : Mr C S Williams
First Defendant : Mr J E Scovell
Second Defendant : No appearance
Third Defendant : Mr J E Scovell
Solicitors:
Plaintiff : Solomon Brothers
First Defendant : Mills Oakley Lawyers (Vic)
Second Defendant : No appearance
Third Defendant : Mills Oakley Lawyers (Vic)
Case(s) referred to in judgment(s):
Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47
Landsdale Pty Ltd v Moore [2009] WASCA 176
1 ALLANSON J: The plaintiff, Starbrake Holdings Pty Ltd, is the registered proprietor of an area of land at Wangara (the Land). In these proceedings it seeks relief, including an order that the defendants deliver up vacant possession of the Land and damages. The defendants deny that they are in possession of the Land, but also claim that the third defendant, Stonetraders Pty Ltd, is entitled to possession and occupation.
2 These proceedings were commenced in July 2012. The pleadings are complete, but there are still several steps to be completed before the action can proceed to trial. This is, at least in part, because the firm of practitioners who previously acted for the defendants ceased carrying on business in late 2013. Those difficulties have now been resolved.
3 In this application, the plaintiff seeks an order under O 32 r 4 of the Rules of the Supreme Court 1971 (WA) to separately try the issues of liability, which includes determining who is entitled to possession of the Land. I am satisfied in the circumstances of this case that the order should be made for the following reasons.
The claim
4 In its amended statement of claim dated 15 July 2013, Starbrake Holdings Pty Ltd pleads:
(1) That it is the registered proprietor of the Land: [1.2].
(2) By a deed, further or alternatively an agreement, dated 2007 it granted to each of Soiland Pty Ltd, Jamie Pollock (the first defendant), and Carina Lee-Anne Healey (the second defendant), together with their agents and employees, a right to occupy the Land for the purpose of removing peat from the Land and carrying on a soil mixing business on the terms specified in the agreement (the Tenancy): [3]. The statement of claim refers to this agreement as the 'Agreement'. The defendants dispute that there was an agreement and refer to the Document. It is convenient to refer to it as the Agreement, to distinguish it from other oral agreements alleged by the defendants, while recognising that its status as an enforceable agreement is in issue.
I interpolate that Soiland is in liquidation, and Ms Healey is now in bankruptcy. The third defendant was not party to the Agreement. The claim for damages for breach of the Agreement is, accordingly, against the first defendant only.
(3) The Agreement contains terms to the effect that Soiland and the first and second defendants were to transfer a stockpile of peat onto the Land, and remove the peat from the Land by no later than three years from the date of the Agreement (the Works): [4].
(4) The Tenancy expired upon the earlier of the completion of the Works, or the expiry of three years from the date of the Agreement.
(5) In or about April 2010, Soiland ceased to occupy or possess the land and the third defendant commenced occupying, or possessing, the Land: [5].
(6) The term of the Tenancy has expired: [7]. In October 2011, the plaintiff served each of the defendants with a notice terminating the Tenancy as of 21 November 2011, and requiring them to deliver up vacant possession of the Land by 22 November 2011: [8].
(7) The defendants, or one or more of them, remain in occupation or possession of the Land: [9].
5 The plaintiff pleads that it has suffered loss and damage: [10]. It seeks an order for vacant possession, further or alternatively damages, further or alternatively mesne profits.
6 In pars 11, 12, and 13 of the amended statement of claim, the plaintiff pleads that the first and second defendants moved peat onto the Land or caused it to be moved there, and in breach of the Agreement did not remove the peat from the Land within three years from the date of the Agreement or at all. And by reason of that breach the plaintiff has suffered loss and damage, being the cost of removing the peat which remains on the Land.
7 The cost of removing the peat is estimated to be several million dollars, and the operation to remove it may take many months.
8 Although no material facts relating to the further damages have been pleaded, I understand from the submissions and evidence in this application that the plaintiff claims losses as a result of its inability to develop the Land while it is kept out of possession.
The defence
9 In a joint amended defence, filed 3 December 2012, the defendants plead:
(1) The plaintiff is the registered proprietor of the Land but holds the Land on trust for the purposes of a joint venture under an oral agreement between Allen Caratti, the sole director of the plaintiff, and Esteem Holdings Pty Ltd.
(2) It was agreed that the land would be purchased and registered in the name of the plaintiff for the purposes of obtaining finance for the development of the Land, and the plaintiff would hold a 50% interest in the Land on trust for Esteem Holdings: [2].
(3) The Agreement pleaded by the plaintiff was subject to an oral agreement; the document containing the Agreement would only be provided to Mr Caratti to be used for the purpose of obtaining finance and 'in exchange for a letter signed by Caratti, dated after the Document, confirming that the Document was null and void': [5.2].
(4) The Document was never signed by Ms Healey and was never exchanged for that letter, and has at all material times been unenforceable: [5.5] - [5.7].
(5) It was never the intention of the parties to the Agreement that it was to be treated as a binding agreement between them or enforceable in accordance with its terms and conditions: [5.9].
(6) The third defendant is entitled to possess and occupy the Land under the oral agreement between Esteem Holdings and Allen Caratti: [5.14] - [5.15], [7] - [8].
(7) The parties acted in furtherance of the joint venture agreement, including by moving peat from other land to the Land. And Kevin Pollock, through entities associated with him, has continued to conduct business using the peat on the Land and has thereby used and depleted the peat stockpile: [5.16].
(8) The plaintiff is estopped from enforcing or relying upon the Agreement, alternatively that the plaintiff has waived its rights under the Agreement: [10] - [12].
10 The defendants admit that they have not removed the peat from the Land, but deny that they are obliged to do so and deny that the plaintiff has suffered loss or damage.
The reply
11 The plaintiff has filed a reply in which it pleads that any agreement as alleged by the defendants has been frustrated, as they may no longer lawfully store peat or carry on a soil mixing business on the Land.
The evidence
12 The plaintiff relies on an affidavit of Allen Bruce Caratti (ABC), sworn 19 June 2014, in support of this application. Relevantly, Mr Caratti annexes documents to the effect that:
(1) The planning approval which permitted peat stockpiling on the Land expired on 8 September 2013. The plaintiff is required to remove the entire peat stockpile and all materials associated with the soil blending and waste mulching business on the site: ABC-11.
(2) The Land is 'prescribed premises' under the Environmental Protection Act 1986 (WA), and the third defendant no longer has a licence under s 57 of that Act permitting emissions from the premises. On 1 October 2013, the Department of Environmental Regulation served a closure notice under s 68A of the Environmental Protection Act on the third defendant: ABC-15.
(3) The cost of removing the peat may be more than $10 million (on the basis of a stockpile of 446,814 m3 and relocation to a site at Neerabup, Wanneroo): ABC-26.
(4) The plaintiff has an existing conditional development approval for the Land, which is in effect until 2017: ABC-29.
The application for trial of a preliminary issue
13 In submissions before me, Mr Williams for the plaintiff outlined possible outcomes on the issue of liability:
(1) The plaintiff is successful in its claim under the Agreement, which entitles it to possession of the Land and damages, including damages for breach of contract against the first defendant (Jamie Pollock) for failure to remove the peat from the Land;
(2) The plaintiff fails in its claim under the Agreement, but the defendants fail in their claim under the oral agreements. In that case, the plaintiff is entitled to possession as the registered proprietor, and perhaps to damages for being kept out of possession;
(3) The defendants succeed in the claim that the third defendant is entitled to possession under the joint venture agreements.
14 The first alternative is the only one in which contractual damages would be awarded for the cost of removing the peat from the Land.
15 The plaintiff now seeks an order pursuant to O 32 r 4 of the Rules of the Supreme Court that all issues raised in the pleadings, except those raised by pars 10 to 13 of the amended statement of claim, be tried as a preliminary issue and prior to all other issues in the proceedings. This would separate issues of damages for breach of the Agreement from the issues of formation and enforceability of the Agreement and the entitlement to possession of the Land.
16 In support of the application, the plaintiff puts several points.
17 First, the claim is in contract, so proof of damage is not essential to establishing liability.
18 Second, while the factual questions concerning the making of the agreement will be common to both the claim to possession and the claim to damages, there are complicated issues of quantification which are discrete to the damages claims. In particular, issues of credibility of witnesses - which are likely to be central to the determination of liability - will not arise in the assessment of damages.
19 Third, if the defendants are successful in establishing that they have a continuing entitlement to remain on the land, the claim to damages will fall away.
20 Fourth, even if the claims are determined in favour of the plaintiff, so that assessment of damages will be required, the prior determination of the basis of liability (in particular, whether it is for breach of the Agreement) will affect the nature and extent of the evidence to be called.
21 Fifth, the claim for possession of the Land requires early determination. The plaintiff cannot develop the Land while the defendants continue to occupy it and is incurring holding costs. The defendants cannot, in any event, lawfully carry on business on the Land as they no longer have subsisting planning approval or a current licence under the Environmental Protection Act allowing them to carry on that business. It may be that the continued storage of the peat on the Land is unlawful and both the plaintiff and third defendant are at risk.
22 Sixth, the issue of damages will delay the early determination of the issue of possession as it requires expert evidence about the volume of peat remaining on the Land, and expert and lay evidence about what is required to remove it and the cost of that process.
The principles
23 Order 32 r 4 of the Rules of the Supreme Court provides that the court may order that any question or issue arising in a cause, whether of law or fact or partly of law and partly of fact, be tried separately before trialof the proceedings. Order 32 r 4 does not, itself, limit the discretion given to the court. In deciding whether to order thetrialof a preliminaryissuethe court must have regard to O 1 r 4A and r4B of the Rules of the Supreme Court, and follow the course that best ensures the attainment of the objects set out in those rules.
24 The authorities on the considerations relevant to this rule have been collected and summarised conveniently by McKechnie J in Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47 [4]. The matters found relevant or determinative in other cases are useful in assisting the court to exercise discretions consistently, but do not detract from the broad discretion and the need to exercise it according to the justice of the case.
25 Many of the authorities preceded the introduction of case management. But the objects of case management are consistent with the considerations referred to in the earlier authorities: see Landsdale Pty Ltd v Moore [2009] WASCA 176 [19] - [21].
26 In Lansdale, Newnes JA said:
The starting point is that ordinarily the trial of an action should include all issues arising in the action. The determination of an application for separate trials requires a careful balancing of the prospective advantages and disadvantages involved in separating the issues, bearing in mind the uncertainties inherent in litigation, and that, once embarked upon, it is a course from which it may be difficult and even impossible to retreat. It should only be embarked upon where its utility, economy and fairness to the parties is clearly made out [21].
27 It is necessary to consider whether the issues for separate determination can be clearly stated and finally answered without the court having to resolve complex contested issues of fact. Unless an issue can be clearly defined and determined in isolation, the objectives of case flow management are unlikely to be met. If the issue will require extensive evidence, may result in an appeal, and may not finally determine the outcome of the case, it is unlikely that there will be real savings in time and cost.
Consideration of the application
28 There are several factors in favour of determining liability separately.
29 Proof of damage is not essential to establishing the plaintiff's claim for possession, which is based in contract and, as an alternative, on the plaintiff being the registered proprietor of the Land. The splitting of issues would not produce the difficulties which arise where damage is an element of the cause of action.
30 In the present case, the plaintiff does not argue that there will necessarily be an overall saving in time and cost. That saving will occur if the plaintiff loses its substantial claim for damages under the Agreement or, the question of liability being determined, the matter can be resolved other than by trial. But the plaintiff looks for a speedy and cost-effective determination of whether it is entitled to possession of the Land. That, in my view, is a legitimate object to be pursued and a relevant factor in the consideration of the discretion to order separate trial of the issue of liability. It is particularly pertinent where the continued storage of the peat on the Land may be or may become unlawful.
31 I also accept that the issue of liability is unlikely to require extensive evidence. There is no doubt that the court will have to resolve contested questions of fact. But whether the Agreement is a sham, and whether there was an oral joint venture agreement and other oral agreements between the plaintiff and Esteem Holdings, are primarily based on the evidence of two witnesses: Allen Caratti and Kevin Pollock. The defendants also plead conduct in furtherance of the joint venture agreement, and that conduct may be relevant to proving the existence of the oral agreements on which they rely. But the facts asserted in that plea are of limited scope.
32 The material facts supporting the pleas of estoppel and waiver are similarly limited and are largely the same as those supporting the pleaded oral agreements.
33 There are competing considerations.
34 First, I take into account the strong warnings about the caution to be exercised in deciding whether to split issues, and the need to ensure that any anticipated savings are not illusory.
35 Second, the decision on the preliminary issue may not wholly dispose of the action. A preliminary determination that the plaintiff is entitled to possession and damages under the Agreement will simply defer the issues relating to damages. Should that be the result, there is likely to be a substantial period between the decision on liability and hearing the assessment of damages.
36 Even if the plaintiff does not succeed under the Agreement, it has pleaded alternative cases under which it would be entitled to possession, with damages to be assessed for being kept out of possession of the Land. The assessment of damages on the alternative basis is also likely to be relatively complex because the Land is development land, and its use for that purpose may be affected by the presence of the peat stockpile on part of it. There could again be a significant delay before the whole action was completed.
37 Third, there is the prospect of an appeal from the decision on the preliminary issue.
38 Fourth, the plaintiff has not put forward evidence about the likely time required to dispose of the proposed preliminary issue and the time required to bring the whole matter to trial. I believe, however, from a consideration of the pleadings, particularly where each party has already filed affidavits in support of competing applications for summary judgment (one unsuccessful, one that did not proceed), that I can make a reasonable assessment of what is needed to resolve the issues of liability.
39 Taking all of these matters into account, I am satisfied that the question of relating to liability and the right to possession of the land, as pleaded in pars 1 to 9 of the amended statement of claim, should be separately tried. I am particularly concerned about the need to quickly resolve who is entitled to possession of the Land. It is not simply a matter of the plaintiff being kept out of possession - if that is the case - but the position of both plaintiff and third defendant when they no longer have development approval and a licence under the Environmental Protection Act. I will make orders on the plaintiff's application as set out in its minute of proposed orders dated 19 June 2014, and will make directions with the object of bringing that hearing on as soon as is reasonably practical.
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