The Owners of Mount Bakewell Resort, Strata Plan 18228 v YORK-MT Bakewell Caravan Park Pty Ltd - [2020] WADC 92

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   THE OWNERS OF MOUNT BAKEWELL RESORT, STRATA PLAN 18228 -v- YORK-MT BAKEWELL CARAVAN PARK PTY LTD [2020] WADC 92
CORAM:   REGISTRAR KUBACZ
HEARD:   5 JUNE 2020
DELIVERED          :   24 JUNE 2020
FILE NO/S:   CIV 408 of 2020
BETWEEN:   THE OWNERS OF MOUNT BAKEWELL RESORT, STRATA PLAN 18228
Plaintiff

AND

YORK-MT BAKEWELL CARAVAN PARK PTY LTD
Defendant

Catchwords:

Practice and procedure - Plaintiff's summary judgment - Section 36 Strata Titles Act - Turn on its own facts - No new principles

Legislation:

Strata Titles Act1985 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Leave to bring application granted
Application successful

Representation:

Counsel:

Plaintiff	:	Mr P Monaco
Defendant	:	Mr J Hammond

Solicitors:

Plaintiff	:	GV Lawyers
Defendant	:	Hammond Legal

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

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Batistatos v Road and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Spenser v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118
Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14
Westpac Banking Corp v Anderson [2017] WASC 106

REGISTRAR KUBACZ:

This matter came on for hearing on 5 June 2020 for the plaintiff's application for summary judgment filed on 25 March 2020. The plaintiff's application was supported by the affidavit of Dianne Ogden sworn 20 March 2020.
The defendant filed an affidavit of Nicola Di Giulio sworn on 14 April 2020 in opposition to the plaintiff's application (the First Di Giulio Affidavit).
The plaintiff is 'the owners of Mount Bakewell Resort Strata Plan 18288'. The defendant is the registered proprietor of Lot 1 on Strata Plan 18228 (the Property) and became the registered owner of the Property on 1 August 2019 as evidenced from the certificate of title annexed as 'NGD 1' to the First Di Giulio Affidavit. The defendant became the registered proprietor of the Property following the transfer of title from Mr Nicola Di Giulio in his personal capacity to the defendant. Mr Di Giulio became the registered proprietor of the Property on 26 October 2018 as evidenced from the certificate of title annexed as 'NGD 2' to the First Di Giulio Affidavit. Mr Di Giulio is the direction of the defendant and also the real estate agent.
The plaintiff's writ and statement of claim plead a claim pursuant to s 36 of the Strata Titles Act1985 (WA) (the Act) and various by‑laws for the strata plan.
Sections 36(1) - s 36(4) of the Act provides the legislative provisions to allow a strata company to raise levies and interest thereon from the owners of strata lots the subject of a strata plan and in accordance with the strata plan's by-laws.
The plaintiff raised such strata levies in respect of the Property in accordance with the Act which became due and owing for all lot proprietors, including for Lot 1, at the time they were levied at the annual general meetings of the plaintiff.
Section 36(6) of the Act provides that:
A proprietor of a lot is liable in respect of any contribution levied under [section 36] and any interest thereon, jointly and severally with any person who was liable to pay that contribution and interest when the proprietor became the proprietor of that lot, to pay so much of that contribution and interest as was unpaid when he became the proprietor of that lot.
The plaintiff's claim is that the defendant has failed to pay outstanding levies raised for Lot 1 and is seeking recovery of those outstanding amounts pursuant to the Act.
The plaintiff's further claim that pursuant to an agreement between the strata company and Mr Giulio at the time that he became the registered proprietor of the Property, and as evidenced by a resolution of the strata company, the amount payable was $79,340.52 in respect to the outstanding levies. Paragraph 4 of the affidavit of Diane Ogden, deposes that as at 15 November 2017 substantial strata levies had accrued in respect of Lot 1. These 'substantial amounts' were not quantified (but it is evidence form the affidavit material before me that it was likely to be in the vicinity of $366,676.20). However, she went on to depose that at a meeting of the plaintiff, it was resolved to accept a compromise amount of $79,340.52 from the defendant in respect of outstanding levies.
As evidence, Ms Ogden attached an affidavit of Mr Nicola Di Giulio dated 13 December 2017 from Magistrates Court Proceedings 7992 of 2014 as being evidence of the agreed compromise (the Second Di Giulio Affidavit).
Magistrates Court Proceedings 7992 of 2017 were proceedings between the plaintiff (as judgment creditor) and Michael Murphy and Elizabeth Anne Sherwood (as judgment debtors) the context of which was not provided to me. However, from what I can gather from the Second Di Giulio Affidavit, Mr Di Giulio made an offer to purchase the Property from the judgment debtors by way of a private agreement for an amount of $97,322.72 plus encumbrances to prevent the sale of the Property by the bailiff.[1] Further under the terms of the offer, Mr Di Giulio agreed to 'assume and become responsible for all secured and unsecured liabilities on or affecting the property'[2] and acknowledged in par 6 of that the total liabilities he would assume via the purchase of the Property was in the amount of approximately $402,013.04. He further deposed that 'the council of the strata company has resoled not to seek from me any outstanding strata contributions in excess of $79,340.52'.[3]
[1] Paragraph 1 of the Second Di Giulio Affidavit.
[2] Paragraph 2 of the Second Di Giulio Affidavit.
[3] Paragraph 7 of the Second Di Giulio Affidavit.
The plaintiff therefore relies on this affidavit and pleads that as a result of the agreement, the amount of $79,340.52 remains outstanding, and that pursuant to the provisions of s 46(5) of the Act, the defendant has now become liable to pay this amount.
It is reliance on the above that the plaintiff states that the defendant has no defence and therefore judgment should be entered.
In opposition to the application the defendant states that firstly, there are no number of factual issues in dispute as follows:
(a)With respect to the Second Di Giulio Affidavit, the defendant submits that he was under the belief that if it was sworn solely for the purpose of supporting the application of the plaintiff, for orders from the Magistrate Court for the sale of the Property.
(b)The orders subsequently made by the magistrate did not mention outstanding strata levies and states that the Property, 'may be sold for an amount less than a fair value of the interest, provided the saleable interest shall not be sold for less than the amount of $97,323.73'.
(c)The defendant disputes the amounts levied for the strata levies as outlined by the plaintiff.
(d)At the date of the sale of the Property, the defendant states there was no agreement regarding the payment of $79,340.52 in strata levies.[4]
(e)The defendant submits that the original offer and all subsequent negotiations were premised upon him securing finance for the purchase of the Property. He was unable to secure finance by the settlement date notwithstanding that the settlement was executed on 25 October 2018. He submits that at that time he had not and did not agree to pay any amount toward the outstanding strata levies.
(f)The defendant further submits that at the time of arranging payment of the judgment debt to the bailiff above, there was no mention of any payment of outstanding levies.[5]
(g)The defendant states that he used his superannuation and personal savings to service the judgement debt to the bailiff and the other debts to the Shire of York and others.
(h)The defendant submits that there was no concluded agreement as to the payment of outstanding strata levies and that the conduct of the defendant and the plaintiff at settlement did not constitute a binding contract of any form.
[4] Paragraph 32 of the First Di Giulio Affidavit.
[5] Annexure NDG 15 of the First Di Giulio Affidavit.
In oral submissions the defendant's counsel stated that the statement of claim is that the claim is based on a compromised claim only and that a pleading under the Act is simply pleaded in the alternative and therefore the plaintiff cannot rely on the provisions of the Act.
Further the defendant, in its written submissions, submits that summary judgment cannot be entered as it has a counterclaim against the plaintiff and the strata manager as a third party.

Summary judgment principles

The principles of when a court should allow an application for summary judgment are well established and have been eloquently summarised in a number of judgments in both the Supreme and District Courts including Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24].
It is trite law 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, 99. It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceeding if it went to trial, that summary judgment ought properly be granted: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57]; Batistatos v Road and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46]; Spenser v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24], [53] - [55].
The defendant must show by affidavit or otherwise that there is some triable issue either of fact or law, and that he has an arguable defence or a defence on the merits: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 - 111.

Extension of time to make the application

Before I deal with the application proper, I need to address the fact that the plaintiff's application has been brought out of time limitations prescribed by O 14 r 1(1) of the Rules of the Supreme Court 1971 (WA) (RSC).
Order 14 r 1(1) RSC stipulates that an application for summary judgment must be made within 21 days after an appearance if filed or at any later time by leave of court. The defendant filed its appearance on 20 February 2020 and the application for summary judgment was filed on 25 March 2020, 13 days after the time limitation lapsed.
The plaintiff has sought the leave of the court to apply for summary judgment in its chamber summons.
The onus is on the applicant to justify the delay in bringing the application: Westpac Banking Corp v Anderson [2017] WASC 106 [38].
The plaintiff failed to address the issue of delay in its affidavit material and written submissions. Upon my asking counsel for the plaintiff to address me on the issue, he simply stated that there was no prejudice to the defendant by reason of the delay.
The defendant, in written submissions states that summary judgment should not be entered because it was filed 'outside the 21 day time limit'. The defendant did not make any written or oral submissions as to any prejudice that it suffered by reason of the delay and no affidavit evidence was provided as to any prejudice.
Prejudice to the defendant is one consideration the court must consider in its discretion to allow an application to be brought out of time, it is not the only issue that must be considered. Other considerations are the length of the delay and the reasons for the delay.
Although I was not provided with reasons for the delay by the plaintiff, I cannot see how there has been any prejudice to the defendant by a 13 day delay. As mentioned above there were no submissions made by either party in respect of this.
Given the short delay and no evidence of any prejudice to the defendant in the lateness of the application, I exercise my discretion to allow the application to be brought outside of the 21 day period and I therefore grant the plaintiff leave to bring the application.

Determination

There is no argument that the plaintiff is and was entitled pursuant to s 36 of the Act to raise strata levies with respect to the Property which became due and owing at the time they were raised. It is clear that pursuant to the s 36(6) of the Act that a proprietor of a lot is liable to pay any unpaid levies raised pursuant to s 36, plus interest thereon, upon the transfer of the lot to the proprietor.
It is therefore unquestionable that upon the defendant becoming the proprietor of the Property, it became liable to pay any unpaid levies in respect of the Property. In this regard, the plaintiff has a prima facie case.
The evidence put before me shows that the amount agree to between the parties was $79,340.52 as discussed above.
It is therefore for the defendant to put before the court some material that demonstrates a triable issue either of fact or law, and that he has an arguable defence or a defence on the merits: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd, 110 - 111; Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18, 23 per Murray J.
Before I deal with the substantive issues, I pause here to deal with the defendant's potential counterclaim. This issue was first raised in the defendant's written submissions. The defendant has not provided any affidavit evidence as to the counterclaim and counsel for the defendant did not address me on the issue during oral submissions. Plaintiff's counsel addressed me simply to say that the first it had heard of any potential counterclaim was via the submissions. In the circumstances and without any affidavit material to support this claim, it is entirely appropriate for a counterclaim to be raised as an aside in written submissions. I therefore pay no heed to any potential counterclaim in determining this application. Further, if the defendant has such a claim, it has other remedies available to it.
With respect to the defendant's submissions regarding the factual issues in dispute which I have outlined above, I find it inconceivable that a real estate agent would not fully comprehend the workings of s 36 of the Act, particularly with respect to the liabilities passing to him upon becoming the proprietor of the Property. In fact it is evident from pars 8 - 13 of the First Di Giulio Affidavit that he knew he would be liable for outstanding strata levies as the first offer to purchase the Property, which was rejected, was for an amount of $200,000 with the Property to be 'unencumbered of an previous debts incurred by previous owners'.[6] This shows two things, first Mr Di Giulio was aware that there were outstanding debts on the property and second, that he had the insight to attempt to negotiate out of having to pay any outstanding debts.
[6] Paragraphs 8 - 10 of the First Di Giulio Affidavit.
Once this offer was rejected, he made a second offer, for a much lower sum of $97,322.73 plus encumbrances, which was accepted.
Mr Di Giulio swears at par 14 of the First Di Giulio Affidavit that he understood the encumbrances to mean the sum of $114,677.27, including the outstanding strata levies. The 'understanding' pleaded in the First Di Giulio Affidavit is in direct contract to the 'understanding' pleaded in the Second Di Giulio Affidavit where he deposes that:
(a)the amount offered is $97,322.73 plus encumbrances (par 1);
(b)I will assume and become responsible for all secured and unsecured liabilities on or affecting the Property (par 2);
(c)the liabilities outstanding to the strata company as of 1 November 2018 is $366,676.20 (par 5);
(d)the total liabilities I would assume would be $402,013.04 (par 6); and
(e)the council of the strata company has resolved not to seek from me any outstanding contributions in excess of $79,340.52 (par 7).
I give more weight to the Second Di Giulio Affidavit as it was made contemporaneously at the time of the sale of the Property and not for the purposes of opposing this application. It is clear to me from the Second Di Giulio Affidavit that Mr Di Giulio knew that there were outstanding strata title levies owing, that he knew they were in the amount of approximately $366,000 and that he negotiated a very favourable agreement with the plaintiff to settle the outstanding levies for the amount of $79,340.52, which is the amount being claimed by the plaintiff.
It follows that if the defendant's argument is to be accepted, as the registered proprietor, it would be liable for the entire amount of the unpaid strata levies on the Property.
Mr Di Giulio had not provided any evidence that he paid the $79,340.52 or any part thereof whilst he was the proprietor of the property and therefore subject to s 36(5) of the Act that amount outstanding became the liability of the defendant.
Again, there has been no evidence put on by the defendant that the $79,340.52 or any part thereof has been paid to the plaintiff by the defendant. That amount remains outstanding and the defendant is therefore liable to pay it.
Whilst I accept the defendant's submission that he believed that the Second Di Giulio Affidavit was sworn solely for the purpose of supporting the application of the plaintiff for orders from the Magistrates Court for the sale of the Property, I do not accept that this raises any defence or triable issue to the matters in issue in this case.
I reject the defendant's submissions disputing the amounts owed to the plaintiff and that there was no agreement between the parties reached regarding the payment of outstanding strata levies during negotiations and payments to the bailiff regarding the purchase of the Property. The evidence before me does not support these submissions, rather, supports the plaintiff's case in its entirety.

Conclusion

In consideration of all of the evidence before me, it is my opinion that the defendant has failed to demonstrate on the evidence that there is some triable issue either of fact or law, and that he has an arguable defence or a defence on the merits: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd, 110 - 111 and therefore there is no real question to be tried: Fancourt v Mercantile Credits Ltd, 99.
It is clear on the evidence that the amount of $79,340.52 was agreed between the plaintiff and Mr Di Giulio as being a settlement of outstanding strata levies upon his purchase of the Property. Mr Di Giulio failed to pay this amount when the Property was transferred to the defendant, it became liable subject to the provisions of s 26 of the Act to pay that amount plus any interest owing on that amount. This amount has not been paid by the defendant and it remains due and owing.
The plaintiff's application for summary judgment is therefore successful.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DH
Court Officer
24 JUNE 2020