Strzelecki Holdings Pty Ltd v Jorgensen [No 2]

[2014] WADC 109

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   STRZELECKI HOLDINGS PTY LTD -v- JORGENSEN [No 2] [2014] WADC 109

CORAM:   EATON DCJ

HEARD:   11 AUGUST 2014

DELIVERED          :   25 AUGUST 2014

FILE NO/S:   CIV 1811 of 2011

BETWEEN:   STRZELECKI HOLDINGS PTY LTD

Plaintiff

AND

STEPHEN LAURENCE JORGENSEN
ROBYN MIRIEL JORGENSEN
Defendants

Catchwords:

Practice and procedure - Costs - Defendants' application to amend at the beginning of trial - Adjournment - Opposing applications for costs

Legislation:

Nil

Result:

An order that the defendants forthwith pay the plaintiff's costs thrown away by reason of the adjournment of the trial on 11 August 2014, such costs to be taxed if not agreed

Representation:

Counsel:

Plaintiff:     Mr M M Solomon SC

Defendants:     Mr N D C Dillon

Solicitors:

Plaintiff:     Hotchkin Hanly Lawyers

Defendants:     Murcia Pestell Hillard

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

Nil

1. EATON DCJ:  The trial of this action was listed to begin in this court on 11 August 2014 with an estimated hearing time of three days.  The action was commenced in 2011.  It arises out of a contract in writing dated 7 May 2007 by which, it is alleged, the plaintiff would sell and the defendants would purchase Apartment 14, Oceanic Retreat, Lot 313 The Lido, Mandurah. 

2. By a statement of claim filed 10 June 2011 the plaintiff pleads certain express terms, that the defendants paid a deposit, that the defendants failed to settle in accordance with the terms of the contract, that the plaintiff issued a written notice of default and that the contract was, in due course, terminated with the deposit being forfeit.  The plaintiff claims a declaration that it is entitled to payment of the deposit and interest accrued, damages and costs.

3. By a re‑amended defence and counterclaim filed 21 February 2014 the defendants plead that the plaintiff was represented at all material times by its agent, Century 21 Coast Realty Mandurah, and that they met in March/April 2007 with that firm (as agents for the plaintiff), those meetings described in the pleading as 'initial meetings'.  Those initial meetings took place at the plaintiff's office or an office rented by the plaintiff located near to the site of the Oceanic Retreat development.

4. By way of particulars the defendants plead that at the initial meetings Century 21 was represented by Mr David Green.  It is alleged that the plaintiff, through him, represented that the entire residential portion of the Oceanic Retreat development was to be strictly subject to the restriction that it be exclusively occupied by tourists or short‑stay residents.  The defendants further plead a representation that the plaintiff would only enter into agreements for sale of residential lots if the purchasers agreed that the lot to be purchased would only be occupied on the basis of tourist or short‑stay accommodation and not as a permanent residence.

5. Without going further into the detail of the particulars, it is the case that the defendants plead that the contract was subject to certain implied conditions and, in the alternative, that there was a collateral contract, that the plaintiff was in breach of the contract and the collateral contract and in certain other respects.

6. In summary, the defendants contend that the plaintiff is not entitled to any loss or damage and that it failed to take reasonable steps to mitigate any loss or damage that it did suffer.  Their counterclaim seeks declarations including that the contract be set aside, that it is void and that the deposit be returned to them.

7. On the morning of the first day of trial, prior to opening speeches, Mr Dillon, counsel for the defendants, moved to amend the defence and counterclaim.  The application was opposed.

8. The substance of the amendment sought concerned the initial meetings at which the defendants are said to have met with Century 21, as agent for the plaintiff, in March and April 2007.

9. In par 2.3 of the re‑amended defence and counterclaim filed 21 February 2014 the initial meetings are particularised as follows:

   The initial meetings took place at the plaintiff's office or an office rented by the plaintiff located near the site of the Oceanic Retreat development, Century 21 was represented by Mr David Green, the first‑named defendant attended the first of the initial meetings and the defendants attended the subsequent meetings.

   Mr Dillon applied to include 'and Mr Greg Jardine' immediately following the reference to Mr David Green.

10. In support of his application Mr Dillon tendered, without objection, an affidavit sworn by Bernard Arthur Cummins on 8 August 2014.  The deponent said that, subject to the care and control of his principals, he had the conduct of the matter on behalf of the defendants.  He deposed to having taken instructions from the defendants in relation to the preparation of the defence and counterclaim in or about June/July 2011.  At that time, he said, he was told about meetings between Century 21 Real Estate and his clients.  In particular, he was told that two meetings had occurred, the first involving the first‑named defendant and David Green from Century 21 Real Estate and the second involving both defendants and David Green. The deponent said that it was not until he was taking instructions as to the defendants' affidavits on 30 July 2014 that it became apparent that, in fact, the second meeting was not with David Green but with Greg Jardine, at that time another employee of Century 21 Real Estate.

11. The deponent says that amendment of the particulars of the defence and counterclaim is required to accurately record the representations he says were made by both David Green and Greg Jardine at the initial meetings.

12. The deponent asserts that the plaintiff has been on notice about the involvement of 'Mr Green' since the affidavit of the first‑named defendant was served on it on 6 August 2014.  As to that assertion, I assume there is an error.  My expectation and understanding is that the involvement, not of David Green, but rather of Greg Jardine, is said to have been known to the plaintiff since the service of the affidavit referred to.

13. Mr Dillon informed me from the bar table that there had been correspondence between the solicitors for the respective parties agreeing a regime in relation to the filing and service of affidavits for trial from both sides. He said, pursuant to that agreement, the plaintiff was to provide its affidavits on or before 7 July 2014 with the defendants doing so 14 days later, that being on or before 21 July 2014.  In fact, he said, the plaintiff provided three affidavits one on 16 July 2014 being the affidavit of a Ms Taylor, the second on 22 July 2014 being the affidavit of David Green and a third on 29 July 2014 being the affidavit of a Mr Poland.  The point, said Mr Dillon, was that the plaintiff had not complied with the timetable agreed.

14. Mr Solomon also tendered an affidavit from the bar table, the deponent being Peter William Van Der Zanden.  It was sworn on 11 August 2014.  The deponent deposed to being a partner in the plaintiff's solicitors and to having carriage of the matter with the assistance of an employed practitioner.  His affidavit was sworn in opposition to the application to amend.

15. It appears that on 3 July 2014, by email, the plaintiff's solicitors made enquiry of one Brian Jardine, said to be the father of Greg Jardine, as to the contact details of the latter.  There was no response.  The deponent says that he:

    [D]ecided not to take any further steps to try and locate Mr Greg Jardine and proof him because the defendants did not allege that he had made any representations to them.

16. According to the deponent on Wednesday 6 August 2014 the defendants served the affidavits of each defendant sworn 5 August 2014.

17. By letter of 6 August 2014 the plaintiff's solicitors wrote to the defendants' solicitors as to those affidavits referring to passages concerning a meeting with Greg Jardine and 'things he is alleged to have said and done'.  The letter continued:

    We are instructed to oppose any application by your clients to amend the pleading on the basis that our client would be prejudiced because it will be faced to meet a case that it has not prepared to meet.  Please let us know forthwith what your clients propose to do.

18. The deponent asserts that neither he nor the employed solicitor involved had any 'time spare last week' to enable them to contact Greg Jardine and proof him as to his evidence in the matter.

19. Mr Solomon submitted that his client had been 'completely prejudiced' by the revelation of Greg Jardine's involvement.  He indicated that, in the event of the application to amend succeeding, he would seek an adjournment of the trial to locate Greg Jardine and take instructions as to his evidence.

20. It became clear, as the discussion between bench and bar table ensued, that the revelation of Greg Jardine's involvement was central to the issues at trial.  In consequence, it seemed that an adjournment was inevitable if the matter were to be fully and fairly tried.

21. In the midst of debate as to what should be done Mr Dillon advised that the elusive Greg Jardine has been, just that morning, located and was, as we spoke, working at a firm somewhere nearby on St George's Terrace. Though his whereabouts had become known, it appeared that neither party, at that stage, had spoken to him. The prospect emerged that he might be contacted spoken to and that the trial might proceed with his involvement later in that week. Failing that development, the prospect of an adjournment of the trial for several weeks was canvassed. By consent the court adjourned pro tem to enable counsel to confer.

22. Upon resumption there was agreement that the trial should be adjourned and relisted.  In consequence of discussion as to the availability of dates for both the court, counsel and, no doubt, others, the action was re‑listed for trial to commence before me on 24 November 2014 with an estimated hearing time of three days.

23. Mr Solomon applied, in the wake of the relisting, for an order that the defendants forthwith pay the plaintiff’s taxed costs thrown away by reason of the adjournment. Mr Dillon applied for an order that the plaintiff forthwith pay the defendants' taxed costs thrown away by reason of the adjournment.

24. In support of his application Mr Dillon made reference to programming orders made on 6 December 2013 to the effect that the evidence-in-chief of all witnesses be given at trial by affidavit and setting out a timetable for the filing of those affidavits. As mentioned earlier, that programme was superseded by a regime agreed upon by the parties. It is clear that there was a failure to comply with that agreed regime. Mr Dillon submitted that, in consequence, of the failure to comply with that regime, there was a failure on the part of the plaintiff to make 'proper enquiries about this relevant witness until 3 July, and then, for reasons which are totally unclear, they do not, in fact, follow up with that witness'.

25. It is the case that, had it not been for the application to amend the defendants' defence and counterclaim to include Greg Jardine as, apparently, a key player, the trial would have proceeded, as listed and there would have been no costs thrown away.  In fact, prior to 11 August 2014 neither party's pleadings made any mention of him. The reason for that being so is apparent from the affidavit of Bernard Arthur John Cummins sworn 11 August 2014. In June/July 2011 he took instructions from the defendants about the initial meetings. It seems that no mention was made of his presence on those occasions or either of them. The revelation that it was Greg Jardine, rather than David Green, who was, it is alleged, the plaintiff’s representative at the second meeting with both defendants did not emerge until 30 July 2014, some two years later.  Details of that meeting were set out in the affidavit of the first-named defendant in his affidavit sworn 5 August 2014 and served on the following day.

26. The plaintiff's solicitors prepared, filed and served an affidavit of David John Green on about 17 July 2014. In that affidavit he mentioned the involvement of Greg Jardine in pars 24, 25, 26 and 27 in the context of Greg Jardine being a witness to and having written on the contract document signed by the defendants. The plaintiff's solicitors made attempts to locate Greg Jardine as early as 3 July 2014 without success.

27. It does seem to be clear from the defence and counterclaim that the 'short stay only representation' referred to in par 2.4 could only have been made if, in fact, it was made, by David Green.  There is no mention of Greg Jardine in the pleading.

28. It is now the case that Greg Jardine has emerged as being a potentially important witness, such that, as the alleged maker of crucial representations, there was a belated need to amend the defendants' pleadings at the eleventh hour. It is the case that, prior to the application for the amendment, the plaintiff was prepared to run its case in the absence of any contact with Greg Jardine.  The fact that he was involved in the initial meetings and may have been either the maker of alleged representations on the part of the plaintiff to the defendants, or, at the very least, been present when those representations  were made, is a matter that should, perhaps, have been made clear when initial instructions were taken. If the statements made by David Green in his affidavit are correct, the presence of Greg Jardine at crucial times must have been known to the defendants at some stage and should, perhaps, have been apparent to them and others from perusal of the contract documents.

29. I conclude that the failure of the parties, and the plaintiff in particular, to comply with the agreed regime for the filing of trial affidavits, has very little to do with the predicament the parties found themselves in on the morning of 11 August 2014. It is my view that the presence and potential importance of Greg Jardine to the issues to be tried should have been known to the defendants' solicitors much earlier than it was.  I wish to make it very clear that, in making that observation, I make no criticism of the defendants or either of them or their solicitors in that regard.  What remains is that, but for the belated application to amend being made, the trial would have proceeded as listed.  The fact that it did not is no fault of the plaintiff.  In my view it is appropriate to dismiss the defendants' application for costs and uphold that made by the plaintiff.  There will be an order as sought by the plaintiff.