Stonehouse v Golledge

[2009] WADC 114

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   STONEHOUSE & ANOR -v- GOLLEDGE [2009] WADC 114

CORAM:   DEPUTY REGISTRAR HEWITT

HEARD:   30 JULY 2009

DELIVERED          :   13 AUGUST 2009

FILE NO/S:   CIV 347 of 2009

BETWEEN:   COLIN STONEHOUSE

AMANDA  STONEHOUSE
Plaintiffs

AND

CLAYTON LYN GOLLEDGE
Defendant

Catchwords:

Practice and procedure - Summary judgment - Strata Titles Act - Acts of repudiation - Acceptance of repudiation - Jurisdiction of the Court - Application to amend statement of claim

Legislation:

Strata Titles Act 1989, ss 69, 69B, 69C & 69D

Result:

Summary judgment
Application dismissed
Application to amend adjourned for further argument

Representation:

Counsel:

Plaintiffs:     Mr T O Coyle

Defendant:     Mr A Prime

Solicitors:

Plaintiffs:     Lavan Legal

Defendant:     McCallum Donovan Sweeney

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

Lukey v Stonehouse & Anor [2009] WADC 92

1. DEPUTY REGISTRAR HEWITT:  The application with which I am required to deal is a summary judgment application which was brought by the plaintiffs to this action on 15 May 2009.  That application seeks leave to bring the summary judgment application out of time, that the defence and counterclaim which had been filed be struck out and that judgment in terms of the statement of claim as it then stood be granted in favour of the plaintiffs.

2. Grafted on to that application is now a further application seeking leave to amend the statement of claim in the terms of a proposed statement of claim, exhibited to an affidavit of Daniel Paul Butler sworn 29 July 2009.  That affidavit contains a proposed amended statement of claim bearing a date 15 July 2009 and I understand it to be common ground between the parties that the original of that document was served on the defendant with an invitation to consent to the amendments at around about that time.  No formal application for amendment has been brought other than a motion from the Bar Table to that effect. 

3. The law relevant to summary judgment applications is well known and I adopt the summary of the position set out by Principal Registrar Gething in Lukey v Stonehouse & Anor [2009] WADC 92:

   "It is well established that the power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99. Great care must be exercised to ensure that under the guise of achieving expeditious finality, a party is not improperly deprived of its opportunity for the trial of the case in the appointed manner by the Court: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129 ‑ 130.

   The authorities also establish that the Court at first instance should be particularly astute not to risk stifling the development of the law by summarily terminating actions in respect of which there is a reasonable possibility that it will be found, in the development of the law, still embryonic, that a cause of action does lie: Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at 373.

   The burden of persuasion in a summary judgment application was considered by Pullin J (as his Honour then was) in Morgan v Pallister [2004] WASC 188 at [4] in the following terms:

   'The plaintiff caries the burden of persuading the court that the claim is a good one, that there is no defence to it, that leave to defend should not be granted, and that judgment should be given for the plaintiff.  The party showing cause against the application assumes an evidentiary burden but the overall burden of persuasion remains on the applicant.  The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.  It is clear however, that the procedure is not confined to cases which are immediately plain and obvious and the fact that a transaction is intricate does not disentitled the plaintiff to relief in a clear case.  It was never intended that when the facts are in dispute, an action should be disposed of summarily.  If a defendant's affidavit reveals inconsistencies which might in a trial persuade a court not to believe the defendant's evidence, this will not necessarily lead to judgment for the plaintiff.  It is not necessary to cite authority for these propositions.'

   Where there are disputed facts, and in the absence of cross‑examination, the application is to be determined on the basis that the defendant's version of the facts, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action: Webster v Lampard (1993) 177 CLR 598 at 608. In the same case, the members of the High Court had previously commented that the 'issue before the learned Master on the application for summary judgment was … whether the material before the Master demonstrated that the action should not be permitted to go to trial in the ordinary way because it was apparent that it must fail' [at 602]. If after argument there remains real uncertainty as to the plaintiff's right to judgment without further investigation of the facts, summary judgment must not be refused: Ansearch Ltd v Wavetech Pty Ltd [2006] WASC 184, at [28]; Australian Can Co Pty Ltd v Levin & Co Ltd [1947] VLR 332 at 335."

4. The facts as they emerge from the materials before me appear to be as follows:

   1.The parties entered into a written contract on or around 10 July 2007 under the terms of which the plaintiffs agreed to sell to the defendant a property known as Unit 4, 31 Troy Terrace Daglish ("the Unit").

   2.A deposit was paid in respect of the purchase of $125,000 which is being held by two settlement agents.

   3.Settlement under the contract was scheduled to occur on 30 December 2008.

   4.On 24 December 2008 the defendant wrote to the agents representing the plaintiffs purporting to terminate the contract on the grounds set out in the letter.

   5.In response by letter date 29 December 2008 the settlement agents indicated that the propositions contained in the letter dated 24 December 2008 were rejected and they required the defendant to proceed to settlement. 

   6.The settlement did not proceed on 30 December 2008 and under the terms of the contract the latest date upon which settlement could have been achieved was the 31 December 2008.

   7.By letter dated 8 January 2009 (in the Proposed Statement of Claim 2008) the plaintiff gave notice that the repudiation constituted by the letter dated 24 December 2008 was accepted and gave notice to the settlement agents and selling agents that the contact had been terminated and the plaintiff's required the deposit to be paid to them.

   8.By a further notice served by the defendant on or around 13 January 2009 the defendant contended that the contract had been validly terminated by the letter dated 24 December 2008 and that the deposit should be released to him. 

5. At that point I pause to make some observations concerning the cause of action which was commenced by the plaintiff in this action.  That cause of action sought the following declaratory relief.

   (a)That the purported termination of the contract by the letter dated 24 December 2008 was ineffective.

   (b)That the contract was validly terminated by the plaintiff's letter dated 8 January 2009. 

6. It is immediately notable that pure equitable relief was sought and that equitable relief was not ancillary to any other matter.  As a consequence the writ as it was originally formulated was outside the jurisdiction of the District Court and at the time the plaintiffs commenced their action for summary judgment that application could not possibly have succeeded because relief which was not within the power of the District Court to grant had been sought.  The proposed amendments to the statement of claim introduced further matters notably an introduction of a claim for damages plus a further basis of relief that being the proposition that the repudiation of the contract by the defendant was ongoing and that repudiation was accepted by the issuing of the writ.

7. I now pause to analyse the various causes of action which have been pursued by plaintiff.  The first cause of action has as its foundation the defendant's letter dated 24 December 2008 which is for the purposes of the pleading characterised as repudiation accepted by the plaintiffs by the letter dated 8 January 3009. 

8. If I understand the law correctly a party in the position of these plaintiffs after receiving the letter dated 24 December 2008 (and assuming for the purpose of this analysis that the letter did constitute repudiation) could elect to treat that letter as a repudiation of the contract and proceed to enforce their rights in the face of such repudiation, or alternatively they could elect to affirm the contract and hold the defendant to the performance of its terms.  The letter from the plaintiffs' agents dated 29 December 2008 in my view clearly evinced an intention to keep the contract on foot, requiring as it did the defendants to proceed to settlement, and in the light of such an election the subsequent notice dated 8 January 2009 was in my view ineffective.  Having elected to proceed with the contract in the face of the relevant breach the plaintiffs were not then in a position to change their minds and then accept the repudiation.  If the contract was on foot it contains the means by which failure to settle could be dealt with, but the plaintiffs' chose to go down a different path.  In my view that path was not open to them in the light of the letter by their agents dated 29 December 2009 and it was necessary to comply with the contractual terms by service of notices and the like in the usual way which applies to most contracts for the sale of land. 

9. The next cause of action upon which the plaintiffs rely is the continuing failure to settle by the defendants and their contest to the demand by the plaintiffs to the selling agents that the deposits be handed over to them.  That opposition was contained in the defendant's dispute notice dated 13 January 2009.  The plaintiffs contend that the cumulative effect of such behaviour is evidence of further repudiation of the contract and that repudiation was accepted by the issuing of this writ.  At that point I pause to note what appears to me to be a difficulty.  The writ in its original terms sought a declaration to the effect that the defendant's letter of 24 December 2008 was ineffective to terminate the contract and that the contract was validly terminated by the plaintiffs' letter dated 8 January 2009.  I struggle to understand how it can be that a writ claiming that relief could be said to be an acceptance of conduct occurring on 13 January 2009 and thereafter.  It appears to me to be clear that the writ was not an acceptance of that allegedly repudiatory conduct but simply an application to the court to characterise the correspondence between the parties on 24 December 2008 and 8 January 2009 respectively in the manner sought by the declarations.  Therefore whilst I accept as a general rule that the issuing of a writ can be evidence of acceptance of repudiatory conduct the very nature of this writ makes it clear that it was not intended to an acceptance of any conduct which occurred after 8 January 2009.  Such conduct was not even mentioned in the writ and the nature of the relief sought seems to me make it clear that that writ did not purport to accept the repudiation of the contracts subsequent to 8 January 2009.  Indeed the very nature of the writ sought to establish that the contract had in fact been ended by the letter of that date.  Therefore on the present analysis I see some difficulties for the plaintiff in pursuing this cause of action and I see overwhelming difficulties in the plaintiff obtaining a summary judgment in the present application.  If I am right the plaintiff will face considerable difficulties in the future conduct of this matter because it is no longer possible for them to rely on the provisions of the contract of sale giving notice calling upon the defendants to settle and so forth since the property has already be sold to a third party, or so at least so it appears by the proposed amended statement of claim. 

10. Having analysed the plaintiffs' case and identified what I consider to be weaknesses in it, I will for the sake of completeness deal with the issues raised by the defendant.  The defendant contends that it was entitled to rescind the contract on two bases.  The first basis is alleged to have been the failure of the plaintiff to comply with the requirements of the Strata Titles Act 1989 in providing certain information to a purchaser of a strata unit.  It is contended on behalf of the plaintiffs that in fact compliance with the Act was achieved because the relevant information was contained within the contract itself.  A perusal of those materials indicates to me quite clearly that the relevant information was not in all respects included.  I refer particularly to the provisions which relate to the income and expenditure of the strata company which would be brought into existence by registration of the strata plan.  That portion of the materials is contained on p 67 of the affidavit of the first-named plaintiff sworn 15 May 2009.  Under the provision of the strata company budget in a table of proposed levy contributions what was originally noted as "Colin to insert" has been changed to nil.  When on bears in mind that strata companies have certain statutory obligations including the obligation to insure it is very difficult to understand how the budget for the year following the settlement date could be nil as has been indicated in these materials.  In my view there has been in that respect at least non‑compliance with the requirements of the Strata Titles Act.  Therefore insofar as it is contended that the necessary materials were contained within the contract itself I do not accept that proposition.  There is however a further matter and that is that the right of a proposed purchaser of a strata unit to rescind the contract based on the non performance of this aspect of the seller's obligations.  Those obligations are imposed by s 69B (2)(c) & (d) of the Strata Titles Act and s 69D of that Act provides as follows:

    "(1)  Subject to subsection (3), if a vendor has failed to give to a purchaser information that substantially complies with section 69 or 69C and at the time required by that section, the purchaser has a right to avoid the contract by notice in writing given to the vendor before the settlement of the contract."

11. Subsection 3 concerns the situation where the vendor provides information which substantially complies with the section prior to receipt of a notice of avoidance. 

12. It therefore appears on my analysis of these materials that the purchaser may well be right and that the failure to comply with the requirements of the Strata Titles Act in the provisions of notifiable information entitled it to rescind the contract prior to settlement which it did by the notice dated 24 December 2008.

13. The notice also refers to other matters those being a reliance on sections of the Fair Trading Act 1987  for what is characterised as misleading and deceptive conduct in contravention of that Act.  The basis of those allegations is that there were representations that the relevant unit would be completed to a high standard of quality, and that those representations induced the purchaser to enter the contract.  It is alleged that the building was not completed to such a standard constituting breach entitling the defendant to rescind the contract relying on the relevant provisions of the Act.  In support of that allegation a report has been prepared which is in evidence before me outlining a number of matters in which it is said that the building appears to be deficient.  I must say that aspect of the defendant's case seems to me unconvincing.  It appears that no complaint as to the quality of the workmanship or anything else was made by the defendant during the course of construction of this building and in fact his first intimation to the vendor that there was a problem was on the letter of 24 December 2008, six days prior to the date fixed for settlement.

14. In summary therefore it seems to me that the defendant may well have had a valid basis for rescinding the contract through breach of the requirements of the Strata Titles Act.  The other matters upon which the termination notice relied are rather less convincing but may well be arguable. 

15. The final matter which was not raised by the parties but nonetheless it seems to me to be important concerns the fact that the relevant contract if not settled by 31 December 2008 would cease and the contract would be at an end and the deposit paid under it repayable and so forth.  There is nothing with in any of the materials which have been filed by the plaintiffs to indicate that they were ready willing and able to settle on the nominated date namely 30 December 2008. 

16. In the original pleading that matter is not even raised and it is sought to be introduced by the amended pleading.

17. If the plaintiffs were not able to settle by the 31 December ie. in a position to discharge whatever encumbrances existed in respect of the unit and make good title to the purchaser, then the contract would have ended and any rights they had under it would have ceased.  In those circumstances given the proximity of the date fixed for settlement and the date of termination of the contract by virtue of its terms, I would have expected to see some evidence advanced by the plaintiffs to indicate that they were in fact capable of carrying out the necessary steps to give the defendant clear title to the unit he had entered a contract to purchase.  As I have mentioned there is no evidence whatever to support that proposition and even if every other aspect of the case had favoured the plaintiffs they would have required evidence on that point before I granted the judgment in their favour.

18. Having decided that the summary judgment application should be dismissed I now turn to the terms of the Proposed Amended Statement of Claim.  I have no difficulty in allowing the plaintiff to amend the statement of claim in a manner which brings the case within the jurisdiction of this Court, but I have some reservations concerning the attempt to introduce a further basis of claim namely conduct ensuing after the letter of 8 January 2009 said to be repudiatory conduct by the defendant accepted by the issue of the present writ.  It seems to me that seeking as it does a declaration that the contract had been previously terminated by its notice of the 8 January 2009 there are substantial difficulties in persuing that matter and before I allow an amendment to introduce that aspect of the claim I will require arguments specifically directed to the issue I have identified namely whether the issuing of this writ could be regarded as acceptance of that repudiation.  As I have already indicated for the purposes of the summary judgment application I consider those problems stand as an obstacle to the plaintiff but I have fallen short of saying that its case is unarguable and that is a matter that I wish to have canvassed before I grant leave to amend in the terms proposed.