Summers v Pycju Pty Ltd
[2021] VSC 230
•3 May 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2020 04448
| GEOFFREY DOUGLAS SUMMERS & ANOR (according to the schedule attached) | Plaintiffs |
| v | |
| PYCJU PTY LTD (ACN 166 978 490) & ORS (according to the schedule attached) | Defendants |
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JUDGE: | M Osborne J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 9 April 2021 |
DATE OF JUDGMENT: | 3 May 2021 |
CASE MAY BE CITED AS: | Summers v PYCJU Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2021] VSC 230 |
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PRACTICE AND PROCEDURE – Summary judgment sought pursuant to s 61 and 63 of the Civil Procedure Act 2010 (Vic) – Applicable test for summary judgment – Whether defence has a real prospects of success – General Steel Industries v Commissioner for Railways (NSW) (1964) 112 CLR 125 – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27.
DEED OF SETTLEMENT – Alleged breach of intermediate or innominate term – Whether party to a contract is precluded from seeking recovery of a debt while retaining title to certain property to be transferred – The time at which a debt owed to the recipient party accrues – Chang v Registrar of Titles (1976) 137 CLR 177 – Geoffrey W Hill & Associates v King (1992) 27 NSWLR 228 – Hausman v Abigroup Contractors Pty Ltd (2009) 29 VR 213 – Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 – McDonald v Dennys Lascelles (1933) 48 CLR 457 – Mount Bruce Mining Pty Ltd v Wright Prospecting (2015) 256 CLR 104.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr G Bigmore QC and Mr B Murphy | Cornwalls |
| For the Defendants | Mr D Williams QC and Mr B Devanny | HFW |
HIS HONOUR:
Introduction
This is an application by the plaintiffs for summary judgment pursuant to order 22 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’) and part 4.4 of the Civil Procedure Act 2010 (Vic) (‘the CPA’).
The application arises out of a deed of settlement (‘the Deed’) by which the parties to the Deed resolved a proceeding in the Federal Court of Australia.
The Deed provided for the first defendant (‘PYCJU’) to purchase from the second plaintiff (‘West Horse’) shares in Lottah Mining Pty Ltd (‘Lottah Mining’) and Forward Mining Limited (‘FML’) for the sum of $10,000,000. Additionally, the Deed provided for the second defendant (‘AGG’) to purchase from the first plaintiff (‘Mr Summers’) shares in Dundas Mining Pty Ltd (‘Dundas’) for the sum of $2,000,000.
AGG and the third to eighth defendants guaranteed the obligations of PYCJU under Deed, whilst PYCJU and the third to eighth defendants guaranteed the obligations of AGG under the Deed.
It is not in dispute that PYCJU and AGG did not make payments to the plaintiffs of the respective amounts of $8,000,000 and $1,600,000,[1] which were payable on 18 November 2020 per clause 3.4(b) of the Deed.
[1]The balance of the price after payment of the respective deposits.
The sole issue raised by the defendants is whether an alleged breach by the first plaintiff (‘Mr Summers’) of clause 3.6(c) of the Deed relieves PYCJU and AGG of their obligations to make those payments.
The test for summary judgment
The test for summary judgment under the CPA is well understood and has been essayed numerous times. In Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[2] Warren CJ and Nettle JA observed (at [35]):
a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
b)the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;[3]
c)it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there may be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
[2](2013) 42 VR 27.
[3]General Steel Industries v Commissioner for Railways (NSW) (1964) 112 CLR 125.
The Deed
The provisions of the Deed are critical and therefore warrant setting out at some length:
3. Settlement
…
3.2AGG Fortune agrees to purchase from Mr Summers the twenty (20) shares issued to Mr Summers in Dundas for the amount of $2 million (two million dollars).
3.3PYCJU Pty Ltd agrees to purchase from West Horse for the amount of $10 million (ten million dollars):
(a)The forty-five (45) shares issued to West Horse in Lottah Mining; and
(b)The 36,427,296 ordinary shares issued to West Horse in FML.
3.4Payment of the amounts in accordance with clauses 3.2 and 3.3 herein are to be made by way of electronic funds transfer as follows:
(a) On or before 11 August 2020:
(i)AGG Fortune shall remit the sum of $400,000 (four hundred thousand dollars), representing a non-refundable deposit of 20% of the sum referred to in clause 3.2 herein, to the Nominated Bank Account;
(ii)PYCJU shall remit the sum of $2,000,000 (two million dollars) representing a non-refundable deposit of 20% of the sum referred to in clause 3.3 herein, to the Nominated Bank Account; and
(b) by 4.00 pm on 18 November 2020:
(i)AGG Fortune will remit the balance of the total purchase price referred to in clause 3.2 herein, to the Nominated Account; and
(ii)PYCJU Pty Ltd will remit the balance of the total purchase price referred to in clause 3.3 herein, to the Nominated Account.
(c) Time is of the essence in relation to this clause 3.4.
3.5Forthwith upon receipt of all of the Payments, West Horse and Mr Summers (as applicable) shall:
(a)transfer the shares referred to in clauses 3.2 and 3.3 above (as applicable) free from Encumbrances;
(b)deliver to the purchasers, c/- Stephen Thompson, HFW, Level 3A, 1 Bligh Street, Sydney or such other address as nominated by Mr Su:
(i)duly executed and completed transfer form(s) in respect of such transfers; and
(ii)share certificates in respect of the transferred shares.
3.6In consideration of the above and without any admission as to liability, Mr Summers agrees to:
(a)resign as the director and company secretary in Lottah Mining and FML immediately upon execution of this Deed;
(b)resign as the site senior officer for the Mines, with effect from 12 August 2020; and
(c)to provide reasonable assistance in respect of the transfer of his duties to any incoming senior site office [sic] for the Mines for the period of five (5) weeks from the execution of this Deed.
4. Guarantee
4.1The Guarantors jointly and severally guarantee to Mr Summers and West Horse due and punctual payment in accordance with clauses 3.2 to 3.4 herein.
4.2The Guarantee is a continuing guarantee (any rule of law or equity notwithstanding) and the liability of the Guarantors shall continue until Mr Summers and West Horse receive payment of the amounts referred to in clauses 3.2 to 3.4 herein.
4.3The Guarantors guarantee and agree to hold Mr Summers and West Horse indemnified against all loss, damages, legal costs and expenses which Mr Summers or West Horse may incur by reason of any breach or default on the part of the nominated purchasers in clauses 3.2 to 3.4 herein.
5. Release and indemnity
5.1Subject to the contents of this Deed generally, the Parties hereby release and discharge each other from all damages, actions or legal proceedings, suits, causes of action, claims (including without limitation any claims for costs, losses or expenses) or demands of any nature and howsoever arising that the parties or any associated entities or person, spouses or relatives, have now or may in the future have or but for execution of this Deed could or might have had against each other for or in respect of:
(a) the Proceeding;
(b)any matters the subject of any of the Proceeding;
(c)in respect of Mr Summers’ directorship in Dundas and otherwise the management of Dundas to the date of this Deed;
(d)in respect of any employment relationship between Mr Summers and any of the Defendants;
(e)any of the matters the subject of correspondence between the Parties or between them and their solicitors or between their solicitors in connection with or arising out of the Proceeding or negotiations in respect of the subject matter of the Proceeding;
(f)all matters and allegations which were or could have been or but for the execution of this Deed could or might have been in dispute in the Proceeding; and
(b)any other claims, actions, or suits that the Plaintiffs, associated parties, or entities, spouses or relatives have against or may have against the Defendants or any associated parties, or entities, spouses or relatives.
5.2This Deed may be pleaded by a party to it as a bar to any proceeding or claim that may be brought by another party to it in relation to any matter that is the subject of a release under this Deed.
The defendants admit that PYCJU and AGG have not made payment of the amounts due under clauses 3.4(b) of the Deed by the time specified in the Deed, being 4pm on 18 November 2020, or at all.
The defendants allege that it was a precondition to PYCJU and AGG’s payment obligations under clause 3.4(b) of the Deed that Mr Summers fulfil his obligations under clause 3.6(c) of the Deed. By clause 3.6(c), Mr Summers agreed to provide reasonable assistance in respect of the transfer of his duties to any incoming Senior Site Officer for the Mines[4] for the period of five weeks from the execution of the Deed (‘the five week period’), which was executed on 5 August 2020.
[4]Defined in the Deed as the Avebury Mine and the Rogetta Mine.
In other words, the defendants allege that the breach by Mr Summers of his obligation to provide reasonable assistance in respect of the transfer of his duties to the incoming Senior Site Officer for the Mines for the five week period means that PYCJU and AGG were not obliged to remit the balance of the purchase price to the plaintiffs on 18 November 2020.
In support of the application for summary judgment, the plaintiffs relied on the affidavit of Mr Summers sworn 24 February 2021. In his affidavit, Mr Summers deposed:
(a) on 12 August 2020, in compliance with clause 3.6(b) of the Deed he resigned his position as the Senior Site Officer of the Avebury Mine and the Rogetta Mine;
(b) on 17 August 2020 he resigned from his position as director and company secretary of Lottah Mining and FML;
(c) during the five week period, the defendants did not ask him to provide any form of assistance in respect of the transfer of his duties to the incoming Site Senior Officer of the Avebury Mine and/or the Rogetta Mine; and
(d) nothing else was required of him under the Deed (whether under clause 3.6 or otherwise).
Mr Summers also deposed to the fact that he and West Horse (the second plaintiff) remain ready, willing and able to transfer their unencumbered shares Lottah Mining, Dundas and FML (collectively, ‘the Mining Companies’) to PYCJU and AGG (the first and second defendants) upon the receipt of $9,600,000 in the Nominated Bank Account. Additionally, Mr Summers deposed that the executed share transfer instruments are currently held by the plaintiffs’ solicitors and are available to be provided to PYCJU and AGG immediately upon receipt of payment.
The defendants relied upon an affidavit of the fifth defendant, Wenwu Su (‘Mr Su’) sworn 17 March 2021.
In his affidavit, Mr Su sets out details of Mr Summers’ alleged breaches:
26.Following the execution of the Deed of Settlement and Release, Dr Lakshman Jayaweera (“Dr Jayaweera”) was appointed the incoming Senior Site Officer for the Mines to replace Mr Summers. I depose to matters involving Dr Jayaweera below on the basis of information provided to me by him, which I believe to be true.
27.On 24 August 2020, Dr Jayaweera spoke with Mr Robert Willis, Registrar of Mines with Minerals Resources Tasmania. Mr Willis then emailed Dr Jayaweera, referred to their conversation and noted that he would make Dr Jayaweera the principal contact for tenement-related issued with the Mine.
28.On the same day, Dr Jayaweera responded to Mr Willis, stating that ‘we certainly like to go through with you all of our tenements and to follow its updates and to make sure we are all in order and importantly any outstanding issues’. This reflected the fact that Mr Summers has provided no information as to tenement matters following his resignation on or about 9 August 2020. The Mines were, therefore, unaware of any regulatory renewals that were imminently due (and indeed it would later transpire, as set out below, that planning permit DA 2016/109 had already expired).
29.By email reply to Dr Jayaweera of the same day (24 August 2020), Mr Willis stated that ‘The next tenement requiring action held by your group of companies is EL6/2005 Blythe River Iron, that has an extension date of the 7th September 2020’. EL6/2005 is held by Blythe River Iron in respect of the Rogetta Mine. Since Mr Summers had not alerted us to its imminent expiry, this was the first time that we became aware of it.
30.The tenement renewal process fell within Mr Summers’ obligations to provide reasonable assistance to the incoming Senior Site Officer. Notification of the imminent expiry within the assistance period was required to be provided as reasonable assistance to the incoming Senior Site Officer. If the exploration lease was not renewed before expiry, the exploration lease would automatically lapse. Mr Summers had not taken any steps to arrange for the removal and, as set out below, then demanded the capital Defendants pay his company – Moina Gold Pty Ltd (“Moina Gold”) - for undertaking the obligations that Mr Summers had already owed under the Deed of Settlement and Release …
31On or about 25 August 2020, I telephoned Mr Summers to express my concern that tenement EL6/2005 was due to expire on 7 September 2020. I requested Mr Summers’ assistance with the process of renewal. Mr Summers refused to assist unless FML and Allegiance Mining entered into a “service agreement” with Mr Summers’ company, Moina Gold.
32On 25 August 2020, Mr Summers sent an email to Ms Liang, together with a typed noted [sic] … Mr Summers’ letter (which is incorrectly dated 15 August 2020) relevantly stated:
Mr Su just called me concerned about EL6. I consider there is a degree of misunderstanding.
On the 6th of August 2020, we signed an agreement that removed me from the Nickel and Iron and Lottah. It was also demanded that I resign as SSO and director & have no further involvement with the tenements. I currently have no role or job with those companies at all. When I left all the tenements and licences were in good standing with the government at all levels, this is indisputable & can be verified by the minister if required.
Mr Su and I have been in discussion to enter into a service agreement and SPA for Allegiance and FML. Today Ian Guest sent through the service agreement for signing. Once that is signed, fee paid and funding available, then I can do most of the important work I was doing before, until then I cannot.
Currently FML, BRI, Lottah, Dundas and Allegiance have so many problems, with all government agencies, due to the agreement that was signed on the 6th of August & the lack of function since, it’s hard to know where to start explaining. I can fix these problems if the service agreement is signed immediately, payments made and funding is available, otherwise I can’t. Every day this continues the bigger the mess to fix.
…
34I understood Mr Summers’ letter to amount to a demand for payment, and ongoing contractual relationship, in exchange for performing obligations he was already obliged to perform under Clause 3.6 of the Deed of Settlement and Release.
35Other than assistance with the immediately pressing matter of the renewal of exploration lease EL6/2005, the Defendants did not require Mr Summers’ managerial assistance. However, given that Mr Summers was in possession of property of the Companies (including but not limited to data and other information concerning their mining assets), it must have been obvious to him, and hence did not require any request to be made of him, that this property was to be handed over as part of the transfer of his duties. The return of Company property was a key – if not the central – aspect of Mr Summers’ obligation to provide assistance in the transfer of his duties. Mr Summers appears to suggest in his affidavit that, because an express request for the return of that property was not made during the five weeks following the Deed of Settlement Release, he was entitled to retain it until such request was made …
Mr Su also deposes that Mr Summers failed to return certain documents, data and physical property of the Mining Companies and two other companies, Allegiance Mining Pty Ltd (‘Allegiance’),[5] and Blythe River Iron Pty Ltd (collectively ‘the Companies’). This alleged failure led in turn to an exchange of correspondence between solicitors. That part of Mr Su’s affidavit concludes (at [61]) with reference to the fact that ‘on or about 5 February 2021 Mr Summers finally arranged for the delivery of some 16 boxes of documents and a digital hard drive to Mr Simon Phillips at the Avebury Mine office’. It is unclear whether Mr Su contends that there are other outstanding items of the Companies’ property in Mr Summers’ possession. Taking a generous view of the contents of the affidavit, there appears to be a suggestion that Mr Summers may have retained some recent financial documents.
[5]Allegiance is a wholly owned subsidiary of Dundas.
In addition, Mr Su’s affidavit refers to an alleged transfer of motor vehicles by Lottah Mining to unknown persons. This is purported to have occurred variously in 2019 and 2020, and on 3 August 2020, a few days before the execution of the Deed. Mr Su also identifies a number of unexplained transactions carried out by Lottah Mining and Dundas, apparently for the benefit of Mr Summers or Moina Gold. Mr Su contends that as the CEO of Lottah Mining, Mr Summers had sole access to and control of Lottah’s bank account with the Commonwealth Bank of Australia (‘CBA’) and in addition had sole access to and control of Dundas’ bank account with the CBA.
Finally, and in addition to Mr Summers’ failure to assist with the handover of the Mines and to return property of the Companies, the defendants’ claim that Mr Summers directed business opportunities away from the Companies to companies owned and controlled by him.
At the hearing of the plaintiffs’ application for summary judgment, the defendants confined their opposition to summary judgment to two bases:
(a) the first plaintiff failed to comply with the obligations under clause 3.6(c) of the Deed, which on the Deed’s proper construction ought be considered a material condition that had to be complied with prior to PYCJU and AGG’s payment obligations under clause 3.4(b) becoming due;
(b) in the alternative, if PYCJU and AGG are in breach of their obligations under clause 3.4(b), the appropriate remedy for the plaintiffs is damages, not the claim in debt which the plaintiffs pursue.
Each of those arguments assumes in the defendants’ favour that there is at least an arguable case as to the breach by the plaintiffs of clause 3.6(c). It is convenient, at least initially, to proceed upon this basis.
Compliance with clause 3.6 (c) of the Deed is a pre-condition to payment pursuant to clause 3.4(b)
Rights and liabilities under a provision of a contract are to be determined objectively by reference to the text and context.[6] It is also trite to observe that the proper construction of a contract depends upon the precise terms of that contract.
[6]Mount Bruce Mining Pty Ltd v Wright Prospecting (2015) 256 CLR 104, [46].
In my view, it is clear that the entitlement to payment of the respective amounts of $1,600,000 and $8,000,000 on 18 November 2020 did not depend on compliance by Mr Summers with the obligations in clause 3.6(c) of the Deed.
The text of clause 3.4(b) of the Deed is clear; there is a specific obligation on AGG to pay the balance of the total purchase price of $2,000,000 to Mr Summers by 4pm on 18 November 2020. It is accepted that the non-refundable deposit of $400,000 was earlier paid in accordance with the Deed’s provisions. That being the case, the balance of the purchase price payable by AGG to Mr Summers was $1,600,000, which was required to be paid by 4.00 pm on 18 November 2020. Likewise there is a specific obligation in identical terms on PYCJU to pay the balance of the purchase price to West Horse by the same time. After the admitted payment of the non-refundable deposit of $2,000,000, this left the balance of the payment due from PYCJU to West Horse as $8,000,000.
Clause 3.4(c) of the Deed provides that time is of the essence in relation to the payments as specified in clause 3.4. There is no other provision in the Deed for which time is expressed to be of the essence.
It would have been a simple matter to have prescribed that the entitlement to the balance of the payment was conditional upon a particular event occurring or otherwise was to occur contemporaneously with some other event. The Deed does not so provide. In contrast, the Deed sets out a clear and unequivocal obligation on the part of PYCJU and AGG to make the payments, and for the plaintiffs to transfer the unencumbered share titles upon receipt of those payments.[7] Such a construction is clear. In my opinion, the alternative construction advocated by the defendants does not have any real chance of success within the meaning of s 63 of the CPA.
[7]See clause 3.5. Nor does clause 3.5 provide for the share transfer to occur contemporaneously with payment.
In its written submissions, the defendants referred to the decision of the High Court in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd[8] to support the contention that the alleged breach by Mr Summers of clause 3.6(c) was at least a breach of an intermediate or innominate term that was capable of operating as either an essential or inessential term depending on the gravity of the effect of the breach.
[8](2007) 233 CLR 115.
The defendants argued that the breach of clause 3.6(c) was a breach of a sufficiently serious term such as to deprive PYCJU and AGG of a substantial part of the benefit of the contract.
There are two answers to this submission. First, even if that were the case, the breach of the intermediate or innominate term only discharges the innocent party from any further obligation arising under the contract if that party chooses to terminate the contract on faith of the breach. It is not alleged, nor is there any evidence, that the defendants terminated the Deed, thereby discharging the payment obligation.
Second, and construing the Deed as a whole and in its relevant commercial context, the contention that the breach of clause 3.6(c) disentitles the plaintiffs from the receipt of payment for the shares lacks reasonable foundation.
I do not accept that clause 3.6(c) has the status of an intermediate or innominate term that entitles the innocent party to terminate in the circumstances identified.
As the majority in Koompahtoo said, ‘a judgment as to the seriousness of the breach, and the adequacy of damages as a remedy, is made after considering the benefit to which the injured party is entitled under the contract’,[9] and that account is to be taken ‘of the nature of the contract and the relationship it creates, the nature of the term, the kind and degree of the breach and the consequences of the breach for the other party’.[10]
[9]Ibid, 140.
[10]Ibid.
The critical aspects of the Deed were the settlement of the underlying Federal Court proceeding and the purchase by PYCJU and AGG of the shares held by the plaintiffs in the Mining Companies.
Putting aside the obligation on the plaintiffs to transfer the unencumbered shares upon receipt of all payments, the remaining obligations imposed upon the first plaintiff were subsidiary in nature. These obligations extended to resigning as director and company secretary of Lottah Mining and FML, resigning as the Senior Site Officer for the Mines with effect from 12 August 2020, and to provide reasonable assistance in respect of the transfer of duties to any incoming Senior Site Officer for the Mines for the five week period. The latter obligation, being one to provide ‘reasonable assistance’ for a mere five weeks from the execution of the Deed, is of much lesser significance than the obligation to transfer the shares for the not inconsiderable sums specified under the Deed.
Assuming in the defendants’ favour that there was such a breach in relation to the failure to provide reasonable assistance in connection with the renewal of tenement EL6/2005, the breach can only have lasted for five weeks, and even assuming a failure to provide reasonable assistance, there is no evidence that the tenement was not renewed (and the contrary may be inferred). This hardly amounts to a breach which entitles the defendants to terminate the deed (which they did not do in any event).
Are the plaintiffs precluded from seeking recovery of a debt?
The second argument rests on the proposition that a vendor who receives payment for property cannot bring an action for recovery of the debt due, but rather must bring an action for damages or, in the alternative, an action for specific performance (particularly in relation to contracts for the sale of land).
The failure to pay a sum of money that is due under a contract is a breach for which damages are recoverable. However, it may also create a right to recover the sum as a debt. The claim in debt arises for an amount fixed by the contract as a certain or ascertainable sum.[11]
[11]McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457, 475.
Counsel for the defendants asserted that it was not open to the plaintiffs to sue for the debt allegedly due as and from 18 November 2020, while at the same time retaining the shares. Counsel sought to draw an analogy with a vendor of land where the purchaser fails to pay the purchase moneys due at settlement, and submitted that what the plaintiffs were purporting to do here was sue for the debt at the same time as retaining title to the shares.
Such a comparison is apt to distract. The debt owed to the recipient party accrues at the time specified in the contract, if the contract unequivocally provides for payment at a specified time prior to, during or after performance of the obligation.[12]
[12]Cheshire & Fifoot Law of Contracts, 7th Aust ed. 26.12.
The position was authoritatively stated by Dixon J in McDonald v Dennys Lascelles (at 475):
As a general rule, on the failure or refusal of a purchaser to complete an executory contract for the purchase of land the vendor is not entitled to sue for the purchase money as a debt. He is entitled merely to sue for specific performance or for damages for the loss of his bargain. It is only when the contract has been completed by the execution and acceptance of a conveyance that unpaid purchase money may become a debt and can be recovered accordingly. This general rule is sufficiently illustrated and established by the case of Laird v. Pim (1841) 151 ER 852. The sale of land is in this respect similar to the sale of goods. In the case of goods sold and delivered, and of goods bargained and sold, the property in each case having passed to the buyer, the seller’s remedy is to sue for the price. But if under any executory contract the buyer wrongfully refuses to accept the goods the seller’s only remedy is an action for damages. The general rule, however, that in an executory contract for the sale of land the vendor cannot sue for the price is excluded whenever a contrary intention is shown by the express terms of the contract. And it seems established by authority that a contrary intention is sufficiently shown in all cases in which by the express terms of the contract the purchase money or any part thereof is made payable on a fixed day, not being the agreed day for the completion of the contract by conveyance. In all such cases the purchase money or such part thereof becomes, on the day so fixed for its payment, a debt immediately recoverable by the vendor irrespective of the question whether a conveyance has been executed and notwithstanding the fact that the purchaser may have repudiated his contract. Notwithstanding such repudiation the vendor is not bound to sue for damages or specific performance, but may recover the agreed purchase money.
(emphasis added).
This is a case where the general rule does not apply. The Deed specifically provides that the payment is due at a fixed time, being 4:00pm on 18 November 2020. Only on receipt of payment is the vendor required to transfer the shares to PYCJU and AGG. The debt thus becomes recoverable as from the time of non-payment.
Contrary to the submissions of the defendants, this does not mean that the plaintiffs are entitled to both the money due for the shares and to retain the shares.
From the time of payment of the balance of the purchase price, the vendor holds the property on trust for the purchaser, and the purchaser has a clear right to specific performance.[13] In the alternative, and in the event that the vendor refuses to transfer the shares, such repudiatory conduct can be accepted by the purchaser, and in such event the vendor is required to refund the purchase moneys.[14]
[13]Chang v Registrar of Titles (1976) 137 CLR 177, 180.
[14] McDonald v Dennys Lascelles Ltd (n 9), (see Dixon J above).
Remaining matters
In those circumstances, it is not necessary to consider whether the facts disclosed in Mr Su’s affidavit establish an arguable case for breach of clause 3.6(c). Such an argument is one that ordinarily is not conducive to determination on a summary basis as it is likely to require resolution of mixed questions of fact and law such as the content of the duties that were transferred and what may or may not constitute reasonable assistance. Although it is not necessary to decide, there is much to be said for Mr Summers’ contention that in circumstances where there was no request by (or on behalf of) the defendants that he provide assistance as set out in clause 3.6(c), no instance of breach arises.
The alleged breach of clause 3.6(c) is to provide reasonable assistance in respect of the transfer of duties to the incoming Senior Site Officer. In the context of clause 3.6(c), Mr Su relies upon the fact that the EL6/2005 Blythe River Iron tenement was due to expire, and that Mr Summers had neither taken steps to arrange for its renewal, nor apparently provided any ‘information as to tenement matters following his resignation on or about 9 August 2020’. Mr Su further asserts that ‘the tenement renewal process fell within Mr Summers’ obligation to provide reasonable assistance to the incoming Senior Site Officer’. Mr Su deposed that, instead, Mr Summers insisted that if he was to assist with the process of renewal, a service agreement would have to be entered into with Moina Gold.
The critical question is whether the ‘tenement renewal process’ fell within the rubric of duties of the Senior Site Offer for the mines, which role was formerly performed by Mr Summers and later by Dr Jayaweera. There is no evidence from Dr Jayaweera as to the content or nature of those duties.
Mr Su asserts that the renewal process fell within Mr Summers’ obligation to provide reasonable assistance. This conclusionary statement begs the question as to whether such a task fell within the ambit of the duties of the Senior Site Officer. Relatedly, the plaintiffs point to the Mines Work Health and Safety (Supplementary Requirements) Act 2012 (Tas) (‘the Act’). The Act requires the mine holder[15] to appoint a mine operator[16] and separately a Senior Site Officer,[17] who has particular duties under the Act.[18]
[15]A defined term in s 5 the Mines Work Health and Safety (Supplementary Requirements) Act 2012 (Tas) (‘the Act’).
[16]Ibid, s 11.
[17]Ibid, s 14.
[18]Ibid, s 17.
The evidentiary burden on the respondent to an application such as this is not overly onerous where the basis of an arguable defence involves questions of fact or mixed questions of fact and law.
This notwithstanding, I do not accept that Mr Su’s affidavit discloses an arguable breach of clause 3.6(c) with respect to the tenement renewal. There is no sufficient evidence of the duties of the Senior Site Officer as extending to the task of assisting with, or attending to, the tenement renewal. One would expect such evidence to be easily obtainable. There is a more than reasonable basis to suggest that the question of renewal would fall to the mine holder.[19]
[19]Or if the mine holder is a company, whoever the company through its officers might entrust with that task.
Accordingly, on the basis of the evidence as filed, I do not accept that the there is an arguable case of a breach of clause 3.6(c) of the Deed.
None of the other matters identified in the defence or Mr Su’s affidavit, namely the failure to return the Companies’ documents, data and physical property, the transfer of the vehicles and the unexplained transactions, redirection of business opportunities and obstruction of company projects, were referred to in either the defendants’ written outline or in oral argument.
To the extent to which those matters took place, they do not amount to a breach of clause 3.6(c) of the Deed or otherwise excuse PYJCU and AGG from the payment obligations under the Deed. At their highest, they may amount to a breach of duty owed by Mr Summers. Insofar as the alleged breaches were of duties owed to the Mining Companies, each of those parties are parties to the Deed and any claim by those parties for breaches on the part of Mr Summers would appear to be excluded by the release contained in clause 5.1 of the Deed.
Conclusion
In my opinion, the defence has no real prospects of success. Accordingly, there will be summary judgment for the first plaintiff, Mr Summers, against AGG, and against PYCJU and the third to eighth defendants as guarantors, for the sum of $1,600,000 together with interest according to statute and costs.
Additionally, there will be summary judgment for the second plaintiff, West Horse, against PYCJU, and against AGG and the third to eighth defendants as guarantors, for the sum of $8,000,000 together with interest according to statute and costs.
SCHEDULE OF PARTIES
| BETWEEN | |
| GEOFFREY DOUGLAS SUMMERS | First Plaintiff |
| WEST HORSE PTY LTD ACN 165 475 219 | Second Plaintiff |
| and | |
| PYCJU PTY LTD ACN 166 978 490 | First Defendant |
| AGG FORTUNE PTY LTD ACN 626 953 339 | Second Defendant |
| COLOUR METAL PTY LTD ACN 619 459 675 | Third Defendant |
| WINCHED INVESTMENT PTY LTD ACN 616 834 676 | Fourth Defendant |
| WENWU SU | Fifth Defendant |
| LI XIONG LIANG | Sixth Defendant |
| GANG YANG | Seventh Defendant |
| HUI QIN | Eighth Defendant |
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