Szulc v Szulc - [2015] WASC 451

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: SZULC -v- SZULC [2015] WASC 451

CORAM: ACTING MASTER GETHING

HEARD: 2 NOVEMBER 2015

DELIVERED : 30 NOVEMBER 2015

FILE NO/S: CIV 2445 of 2014

BETWEEN: SCOTT ANDREW SZULC
Plaintiff
AND
MAXWELL JAN SZULC
Defendant

Catchwords:

Summary judgment - Sale of land - Ambiguity or uncertainty as to price - Specific performance

Legislation:

Rules of the Supreme Court 1971 (WA), O 14

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr W Vogt
Defendant: In person

Solicitors:

Plaintiff: Vogt Graham Lawyers
Defendant: In person

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

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209
Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101
Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184
ANZ Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695
Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604
Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256
Commonwealth Bank of Australia v Hanley [1998] NSWSC 1032
Coulls v Bagot's Executor & Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460
Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2] [2012] WASCA 27
Fremantle Port Authority v DP World Australia Ltd [2007] WADC 202
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 25; (1964) 112 CLR 125
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Goulding v Laran Holdings Pty Ltd (1997) 137 FLR 328
Hee v Nyoni [2014] WASC 44
Helmers v Como [2014] WASC 394
HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153
Mackinlay v Derry Dew Pty Ltd [2014] WASCA 24; (2014) 46 WAR 247
May & Butcher Ltd v The King [1934] 2 KB 17
Morgan v Pallister [2004] WASC 188
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Nyoni v Hee [2014] WASCA 84
Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146
Primewest (Mandurah) Pty Ltd v Ryom Pty Ltd as Trustee for Golden Asset Pty Ltd [2012] WASC 443
Rehins Pty Ltd v Debin Nominees Pty Ltd [No 2] [2011] WASC 168
Smart v Prisoner Review Board (WA) [2012] WASC 48
Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118
The Public Trustee (WA) v Brumar Nominees Pty Ltd [No 2] [2012] WASC 337
Thorby v Goldberg (1964) 112 CLR 597
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106
Turner v Bladin [1951] HCA 13; (1951) 82 CLR 463
Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1
Westwind Air Charter Pty Ltd v Hawker De Havilland Ltd (1990) 3 WAR 71
Wilson v Northampton & Banbury Junction Railway Company (1874) LR 9 Ch App 279

ACTING MASTER GETHING: The defendant in this action, Maxwell Jan Szulc, is the father of the plaintiff, Scott Andrew Szulc. The plaintiff and the defendant are each registered proprietors of a half share as tenants in common in a property on Rawlinson Road, Munglinup (the Property).
In July 2013 the plaintiff and the defendant each executed a REIWA standard form Contract for Sale of Land or Strata Title by Offer and Acceptance (the Contract). Pursuant to the Contract, the defendant agreed to sell his half share as a tenant in common in the Property to the plaintiff.
The plaintiff asserts that the Contract is binding, and that in October 2013 the defendant purported to terminate it. By writ of summons filed 17 October 2014, the plaintiff commenced the present action against the defendant seeking specific performance of the Contract, alternatively, damages or equitable compensation in lieu of specific performance. The defendant asserts that the Contract is 'a succession plan gone wrong' and that it was part of a wider agreement which was never finalised.
By application dated 13 July 2015, the plaintiff sought orders for summary judgment pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 14 r 3. This application was commenced within the 21 day time limit set out in RSC O 14 r 1, the defendant's memorandum of appearance being filed on 22 June 2015.
The plaintiff filed two affidavits in support of the application, being sworn 11 July 2015 and 18 September 2015.[1] The plaintiff also filed an affidavit of Rebecca Womack sworn 14 July 2015. Ms Womack is a licenced settlement agent engaged by the plaintiff.
[1] Which I will refer to as the 'Plaintiff's First Affidavit' and the 'Plaintiff's Second Affidavit' respectively.
The Contract is annexed to the Plaintiff's First Affidavit.[2] It is apparent on the face of the Contract that the plaintiff signed the Contract in the presence of a witness on 9 July 2013 and that the defendant signed the Contract in the presence of a witness on 15 July 2013. The Contract incorporates by reference the 2011 General Conditions, being the Joint Form of General Conditions for the Sale of Land agreed between the Law Society of Western Australia and REIWA. The General Conditions are attached to the Contract.
[2] Plaintiff's First Affidavit, attachment SAS3.
The Contract included a chattel identified as: 'CAT CHALLENGER, 95E' (Tractor).
There are two odd aspects to the Contract. The first one is that no settlement date is provided for in the space set out in page 1 of the Contract. This is not fatal to the Contract as this contingency is provided for in the General Conditions cl 3.5. For the reasons which follow, I do not need to consider this issue further.
The second oddity is that the description of the purchase price reads: 'Yet to be determined, see below special conditions'. The special conditions provide:[3]
TOTAL PURCHASE PRICE TO INCLUDE
REPAYMENT OF ALL ENCUMBRANCE ON TITLE AS OF 1/7/2013
$40,000 PAYMENT NET TO SELLER
CLAUSE 7 of the general conditions (outgoings) does not apply.
[3] Plaintiff's First Affidavit, page 19.
In the amended statement of claim the plaintiff identified nine encumbrances on the title to the Property:[4]
[4] Amended statement of claim, par 4.
•Mortgage C103030 in favour of United Credit Union Society Ltd (transferred to Mortgage D464520 in favour of Wendy Joan Spencer).
•Mortgage C144123 in favour of Australia & New Zealand Banking Group Ltd.
•Caveat E507247 to Beverley Elaine Szulc as to the defendant's interest.
•Caveat I819503 in favour of the Shire of Ravensthorpe.
•Caveat C422944 to International Harvester Credit Corporation of Australia.
•Warrants I101606 and I239099 to the benefit of Esanda Finance.
•Caveats I287572 to the benefit of Esanda Finance.
•Property (Seizure and Sale) Order K542189.
•Memorial L615448 in favour of Legal Aid.
The plaintiff goes on to state that, in performance of his obligations under the Contract in respect of the purchase price, he made payments which had the effect of discharging each of these encumbrances.[5] The total amount paid out by the plaintiff was $171,130.08. In his affidavit, the plaintiff attaches documents which record or evidence the payments made to discharge the encumbrances.[6] None of these encumbrances now appear on the extract of the certificate of title for the Property printed 8 July 2015 and attached to the Plaintiff's First Affidavit.[7]
[5] Amended statement of claim, par 5.
[6] Plaintiff's First Affidavit, attachments SAS5 to SAS13, pages 42 ‑ 51.
[7] Plaintiff's First Affidavit, page 17.
The deposit payable was $40,000 which was to be paid within seven days of acceptance, and was to be held by the defendant. In the amended statement of claim, it is pleaded that, pursuant to the plaintiff's obligations under the Contract, the plaintiff paid the deposit to the defendant in three tranches:
(a)$18,043.75 on or about 14 July 2013 to the defendant;
(b)$1,956.25 on or about 14 July 2013 to Spana Pty Ltd at the direction of the defendant; and
(c)$20,000 on or about 15 July 2013 again to Spana at the direction of the defendant.
It appears that the defendant owed Spana money in relation to the Tractor, and that the payments made by the plaintiff to Spana satisfied this obligation.[8] This in turn, says the plaintiff, comprised payment of the deposit under the Contract.[9]
[8] Plaintiff's First Affidavit, attachments SAS14 to SAS17, pages 52 ‑ 55.
[9] Plaintiff's First Affidavit, par 11.
The plaintiff's position is that he has verified all the facts on which the claim is based as required by RSC O 14 r 2(1).[10] He also deposes that he believes that the defendant has no defence to the claim, again as required by RSC O 14 r 2(1).
[10] Plaintiff's First Affidavit, pars 8 ‑ 9.
As a general principle, an applicant for summary judgment who complies with the requirements of RSC O 14 r 2 establishes a prima facie right to summary judgment.[11] However, in this case, a further legal issue needs to be addressed. This is whether the basis for the grant of an order for specific performance has been made out. Specific performance may be awarded on an application for summary judgment.[12] It is awarded 'instead of damages only when it can by that means do more perfect and complete justice'.[13] A contract for the sale of land is the classic example of a contract where damages are usually regarded as an inadequate remedy for breach, and specific performance will generally be ordered if it is otherwise available.[14] There are four preconditions to the award of specific performance:[15]
(a) the contract must be valid and enforceable;
(b) the party seeking to enforce the contract must have performed its obligations before the commencement of the action, and be ready and willing and able to perform its future obligations;
(c) the party resisting performance must have threatened or actually refused to perform any promise for which the time for performance has arrived; and
(d) damages at common law must be an inadequate remedy.
[11] Westwind Air Charter Pty Ltd v Hawker De Havilland Ltd (1990) 3 WAR 71, 74 (Murray J); Hee v Nyoni [2014] WASC 44 [17] (Gething AM). An appeal from the decision in Hee was stuck out on the basis that none of the grounds of appeal had a reasonable prospect of succeeding: Nyoni v Hee [2014] WASCA 84.
[12] Goulding v Laran Holdings Pty Ltd (1997) 137 FLR 328, 334 ‑ 336 (Sanderson M); Hee [18].
[13] Wilson v Northampton & Banbury Junction Railway Company (1874) LR 9 Ch App 279, 284 (Lord Selbourne LC); see also Coulls vBagot's Executor & Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460, 503 (Windeyer J); Primewest (Mandurah) Pty Ltd v Ryom Pty Ltd as Trustee for Golden Asset Pty Ltd [2012] WASC 443 [237] (Edelman J); Hee [18].
[14] Rehins Pty Ltd v Debin Nominees Pty Ltd [No 2] [2011] WASC 168 [23] (Murray J); Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146, 157 (Barwick CJ); Hee [20].
[15] Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604, 619 ‑ 620 (Mason CJ & Dawson J); Coulls (503); Turner v Bladin [1951] HCA 13; (1951) 82 CLR 463, 472 (Reasons of the Court); The Public Trustee (WA) v Brumar Nominees Pty Ltd [No 2] [2012] WASC 337 [26] ‑ [28] (Pritchard J); Primewest [237].
The difficulty which the plaintiff faces is that the purchase price set out in the Contract is either ambiguous or uncertain. As I have indicated, it is described as 'yet to be determined' and the special conditions are in inclusive terms. This immediately raises the question: what else was the purchase price intended to include? In my view, this constitutes an ambiguity in the language in which the parties purported to express their agreement. This in turn means that the court may have regard to the surrounding circumstances known to the parties and the purpose and object of the transaction to assist in interpreting the term.[16] A finding that an essential term is ambiguous will not necessarily render a contract void for uncertainty. If the term is capable of a meaning, it will ultimately bear the meaning given to it by the court.[17] There is nothing in the affidavits filed by the plaintiff that constitutes a compelling account of the surrounding circumstances known to the parties and the purpose and object of the transaction which would allow the purchase price under the Contract to be construed with the level of certainty required for a summary judgment application. On the materials before me, any construction of the term as to price attempting to resolve the ambiguity would be no more than arguable. Until the purchase price is ascertained, the plaintiff will not be able to establish that he has performed his obligations under the Contract so as to establish the basis for an award of specific performance. The ambiguity in the purchase price means that there is real uncertainty as to the plaintiff's right to judgment which cannot be resolved without further investigation of the facts. It follows that summary judgment ought not be granted.[18]
[16] Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1 [3] (Judgment of the Court); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40] (Judgment of the Court); Mackinlay v Derry Dew Pty Ltd [2014] WASCA 24; (2014) 46 WAR 247 [ 53] ‑ [54] (Pullin JA, Buss & Newnes JJA agreeing on this point).
[17] Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429, 436 (Barwick J); Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101 [30] (Ipp J, Pidgeon J agreeing).
[18] Commonwealth Bank of Australia v Hanley [1998] NSWSC 1032 (Carruthers J); Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184 [28] (Newnes M); Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332, 335 (Herring CJ, Lowe & Fullagar JJ); Hee [26].
Further, it may be that the Contract is void on the basis that it is sufficiently incomplete or uncertain. In Thorby v Goldberg, Menzies J approved of the following statement of the principle from the judgment of Sugerman J in the Full Court of New South Wales decision the subject of the appeal:[19]
It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties.. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention.
[19] Thorby v Goldberg (1964) 112 CLR 597, 607. The passage was quoted in part with approval in ANZ Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695, 700 (Kaye J) and in full with approval in Anaconda Nickel [28] (Ipp J, Pidgeon J agreeing).
For a contract to be void for uncertainty, the uncertain term must be an essential term which is so vague that no definite meaning can be assigned to it.[20] In a contract for sale, price will be an essential term.[21]
[20] Upper Hunter (436 ‑ 437) (Barwick CJ); Anaconda Nickel [28] ‑ [29]; Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106, 130 (Brooking J).
[21] ANZ Banking Group Ltd (701); May & Butcher Ltd v The King [1934] 2 KB 17, 21 (Viscount Dunedin).
As to the defendant's position, on 4 August 2015 the Master made directions that the defendant file and serve any affidavit in opposition on or before 18 August 2015. He did not do so. What he did file on 11 September 2015 was an outline of submissions. As the defendant is in person, it is appropriate that I approach the documents in which he articulates his defence with some flexibility.[22] He may require, and be given, some leniency in relation to compliance with the rules set out in the RSC.[23]
[22] Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536 ‑ 537 (Kirby P), 543 (Hope & Samuels JJA agreeing); Smart v Prisoner Review Board (WA) [2012] WASC 48 [10] (Pritchard J).
[23] Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10] (Reasons of the Court).
Ordinarily, it will be necessary for a defendant to file affidavit evidence in order to successfully resist an application for summary judgment by satisfying the court that 'with respect to the claim … that there is an issue or question in dispute which ought to be tried, or that there ought for some other reason to be a trial of that claim'.[24] In the particular facts of the present application, the defendant's failure to file an affidavit is not fatal to his opposition to the application. This is because the defence asserted is patent on the face of the Contract. In his submissions, the defendant asserted that the Contract is 'a succession plan gone wrong'. His submissions, both in writing and orally before me at the hearing, are to the effect that the Contract was part of a wider agreement which was never finalised. In particular, the total purchase price was never agreed. The defendant does not have to show a defence on the balance of probabilities, but must at least show cause why there is an arguable defence.[25] In my view, he has done so. In particular, there is an arguable defence that the Contract was void for uncertainty.
[24] RSC O 14 r 3(1). See generally: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 (Brinsden J); Westwind (74).
[25] Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2] [2012] WASCA 27 [4] (Reasons of the Court).
Alternatively, the existence of the ambiguity in the purchase price, entitling the court at trial to have regard to the surrounding circumstances known to the parties and the purpose and object of the transaction to construe the term, constitutes 'some other reason' for there to be a trial of the action. In Miles v Bull, Megarry J said with reference to this phrase:
If the defendant cannot point to a specific issue which ought to be tried but nevertheless satisfies the court that there are circumstances that ought to be investigated, then I think that those concluding words are invoked. There are cases when the plaintiff ought to be put to strict proof of his claim, and exposed to the full investigation possible at a trial; and in such cases it would, in my judgment, be wrong to enter summary judgment for the plaintiff.
This passage has been endorsed in this jurisdiction.[26] This present case is one falling within the class identified by Megarry J.
[26] Fremantle Port Authority v DP World Australia Ltd [2007] WADC 202 [48] (O'Brien DCJ); Helmers v Como [2014] WASC 394 [59] ‑ [61] (Gething AM); HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153 [95] (Gething AM).
For these reasons, I am not satisfied that the defendant's defence is so clearly untenable that it cannot possibly succeed.[27] I do not have the high degree of certainty about the ultimate outcome of the case required by the High Court to justify the grant of summary judgment. In this regard, in Agar v Hyde Gaudron, McHugh, Gummow and Hayne JJ observed:[28]
It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court's jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways … but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way. (citations omitted)
[27] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 25; (1964) 112 CLR 125, 129 ‑ 130 (Barwick CJ); Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24] (French CJ & Gummow J), [54] ‑ [57] (Hayne, Crennan, Kiefel & Bell JJ); Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209 [113] (Le Miere J).
[28] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] (Gaudron, McHugh, Gummow & Hayne JJ). These observations were adopted in Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 [46] (Gleeson CJ, Gummow, Hayne & Crennan JJ).

I am of the view that the plaintiff, as applicant, has not discharged the overall legal burden of persuasion on him to establish that summary judgment is justified.[29] The application should be dismissed. The defendant should have unconditional leave to defend the action.
[29] Morgan v Pallister [2004] WASC 188 [4] (Pullin J).
I will hear from the parties in relation to costs.