JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : JUSTELLE NOMINEES PTY LTD -v- MARTIN [2010] WASC 295 CORAM : EM HEENAN J HEARD : 8 DECEMBER 2008 DELIVERED : 8 DECEMBER 2008 PUBLISHED : 25 OCTOBER 2010 FILE NO/S : CIV 1861 of 2006 BETWEEN : JUSTELLE NOMINEES PTY LTD Plaintiff
AND
GAVIN WILLIAM MARTIN
First Defendant
NATALIE MARTIN
Second Defendant
Catchwords:
Practice and procedure - Case management - Application to strike out defence and counterclaim - Overall case management - Turns on its own facts - No special principle
Legislation:
Nil
(Page 2)
Result: Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr D J Morris
First Defendant : Mr A E Lynn
Second Defendant : Mr A E Lynn
Solicitors:
Plaintiff : Bruce Havilah & Associates
First Defendant : Lynn & Brown
Second Defendant : Lynn & Brown
Case(s) referred to in judgment(s):Nil(Page 3)1 EM HEENAN J: This application by the plaintiff, Justelle Nominees Pty Ltd, is for an order to strike out the defendants' defence and counterclaim on the basis of non-compliance with a series of directions made in case management. Alternatively, there is an application for a series of further directions designed to achieve compliance with a number of interlocutory milestones which I observe, without being too critical about the matter, should have been achieved already. 2 This is in the context of an action where the plaintiff was originally claiming possession of premises which were the subject of a lease to the defendants on the grounds of default in payment of rent. The defendants had defended and counterclaimed on the basis that: the plaintiff was in breach of an obligation to repair the premises; that they were structurally unsound; that the defects in the premises were such as to prevent them being used profitably; as a result of which the defendants had suffered losses which they sought to set off against the arrears of rent and use as a basis to resist the owner's claim for possession.
3 In addition, the defendants foreshadowed a claim for damages in excess of the amount of the alleged set off. There was a long earlier interlocutory history resulting in an injunction being granted to prevent the plaintiff from retaking possession, and accompanied by orders that the defendants should pay into a fund, controlled by the court, sums of money equal to the arrears of rent and the accruing rent while steps were being taken to obtain expert evidence from builders as to the nature and extent of the alleged damage to the premises and its significance. All that was done and by April 2007, over 18 months ago, the situation was that the evidence produced on either side showed extensive damage to the leased premises due to white ants and other infestation so as to render them uninhabitable, but there was issue joined between the parties as to the responsibility and liability for this damage.
4 The owner/landlord contended that the damage was due to breach of a covenant by the tenants in failing to keep the premises in good repair and to take steps to locate and eradicate pests. The defendants, on the other hand, maintain that the damage pre-existed their taking of possession, that it was structural in kind, and that the landlord was in breach of obligations to maintain the structural integrity of the premises, as a result of which the landlord is said to be liable to them in damages.
5 At that point, because it seemed evident that neither the plaintiff nor the defendants was willing, or had the means, to undertake the magnitude of the repairs which were necessary, there was some vacillation as to
(Page 4)whether or not the defendants would remain in possession. Since I dealt with the matter last in April 2007 I am informed that the defendants have vacated the premises, yielding up possession on 1 May 2007, without making any arrangements to secure the payment of the balance of moneys accruing under the lease by way of rent and effectively abandoning the premises.
6 Since then, and perhaps even before then, the regular payments to the fund set up by the order of the court had stopped. The plaintiff, Justelle Nominees Pty Ltd, as landlord, has treated the abandonment of possession by the defendants as a repudiation of the lease and has terminated the lease by accepting that repudiation. No more rent of any kind has been paid and by a contract of sale which was completed on 18 July 2008 the plaintiff, Justelle Nominees Pty Ltd, has sold the premises with vacant possession to a third party. 7 The situation therefore is that Justelle Nominees Pty Ltd, as plaintiff, seeks to pursue the action for the recovery of rent due up to the date of the termination of the lease; and for damages, if any, which can be proved for alleged breach of the covenant by the tenants to repair; and perhaps also for damages to the value of the reversion caused by the dilapidated state in which the premises were left and in which they were sold. The defendants' counterclaim is for damages for breach of what they allege is the landlord's obligation to maintain the premises in adequate structural condition; for loss of profits due to the inability to trade during the term that they were in possession; and for the loss of the value of the lease because of the premature ending of the lease on the grounds.
8 The defendants are in breach of a number of orders and obligations requiring them to give detailed particulars of their alleged losses and they seem to be unmoved by a series of orders which have been made requiring delivery of those particulars. It is in those circumstances that the application is made to strike out their defence and counterclaim. If that application were successful it would still leave the plaintiff with the need to prove its case for the recovery of rent and for damages which I have described, so a trial of some kind will be essential. The evidence on the court record, however, indicates that there was, at least in the past, an arguable defence by the defendants to the plaintiff's claim along the lines which I have already indicated. There is evidence in affidavits from the defendants as to the extent of the damage, and it seems to me that the defendants have at least an arguable case which should not be lightly struck out.
(Page 5)
9 As there is to be a trial in any event, it does not seem that maintaining the position where the defendants are entitled, if they are willing and able to do so, to advance their counterclaim will prolong the trial or result in significant additional costs. It seems very doubtful whether the defendants, indeed, will contest the trial but I do not think that I should deprive them of the opportunity to do so by upholding this present application. 10 I will therefore dismiss the application for the dismissal of the defence and counterclaim and for other orders, but reserve liberty to apply. It seems that I should take steps to ensure that this action is brought to a speedy and complete conclusion and that the best way of doing that, in my view, is to order an early trial.
11 I therefore order that:
(a) the plaintiff have liberty to enter this action for trial forthwith, notwithstanding any non-compliance with existing orders by any party, and that it be set down for trial in this court for two days commencing on 15 January 2009; (b) that the matter be listed for mediation before Registrar Dixon on Tuesday, 9 December 2009 at 11.30 am; and
(c) that the Registrar have power to make such directions as he considers necessary in relation to the amendment of the pleadings or otherwise to ensure that all issues are properly raised at the trial in January; and that there be liberty to apply.