Thomas v Elizabeth City Centre P/L - [2008] SADC 152

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
THOMAS v ELIZABETH CITY CENTRE P/L
[2008] SADC 152
Reasons for Decision of His Honour Judge Clayton
21 November 2008
PROCEDURE
APPEAL FROM A DECISION OF A MASTER
On an application for summary judgment a master entered judgment of the plaintiff on the basis the defendant had no reasonable basis for defending the claim.
Appeal from decision of the Master dismissed.
Supreme & District Court Civil Rules 2006 6R 232, referred to.

THOMAS v ELIZABETH CITY CENTRE P/L
[2008] SADC 152

By a Notice of Appeal filed on 9 October 2008 Jamie Thomas has appealed from a decision of a Master which was posted to the parties 19 September 2008.
Mr Thomas represented himself both before the Master and before me.
The application before the Master was for summary judgment pursuant to Supreme and District Court Civil Rules 2006 6R 232 on the basis that Mr Thomas had no reasonable basis for defending the plaintiff's claim which is set out in a Further Amended Statement of Claim filed 11 June 2008.
The plaintiff had leased a shop at the Elizabeth City Centre to Mr Thomas. Mr Thomas fell into arrears with the payments required under the lease and a dispute arose between the parties. Mr Thomas claimed that he had been induced to enter into the lease by false representations. On 17 October 2007 a settlement of the dispute was arrived at and recorded in a handwritten document signed by the solicitors for the parties. The document recorded that the proceedings were to be discontinued, that Mr Thomas would vacate the shop by 31 January 2008, that Mr Thomas would make payments of rental and arrears and that Mr Thomas would make good the premises in accordance with the terms of the lease at the date of vacation on 31 January 2008.
Mr Thomas did not abide by the Settlement Agreement and the Statement of Claim was amended to include a new cause of action based on the alleged breaches of the Settlement Agreement by Mr Thomas. Before the Master the plaintiff claimed:
16.1total arrears in the sum of $59,260.79:
16.2the balance of November 2007 rent (25% of the total rent payable) in the sum of $2103.27:
16.3the balance of December 2007 rent (25% of the total rent payable) in the sum of $2147.58:
16.4total rent arrears the month of January 2008 in the sum of $8,590.32:
16.5sundry charges and electricity in the sum of $1758 and $.51: and
16.6make good costs in the sum of $12,298.
The Master found that the defendant had no reasonable basis for defending the claim and ordered summary judgment for the plaintiff.
The grounds in the Notice of Appeal are:
1.The book of documents that were compiled argument for argument were not taken into consideration or even viewed before the court.
2.Thomlat Pty Ltd.
3.The demand on defit which does not appear in the deed of settlement.
Considered by themselves those grounds are so cryptic as to be meaningless.
The Notice of Appeal states that the appellant seeks orders first that his "argument/counterclaim be heard in court", secondly that he "be able to present his book of documentation in court" and third that the summary judgment be overturned. One of the complaints that the appellant made orally to me during the course of the hearing was that the Master had not considered material that he had relied upon.
The respondent objected to the casebook which Mr Thomas had prepared for the appeal on the ground that it seeks to include new evidence that is irrelevant and could have been adduced before the Master but was not.
In written submissions the respondent argued that the Notice of Appeal was invalid in that it failed to identify an appellable error of fact or law made by the Master, failed to state grounds of appeal, failed to provide details of the grounds as required by r 204(2)(c), seeks orders that the court cannot properly make on appeal and fails to comply with r 284(2)(d).
Because the appellant was unrepresented and I had difficulty understanding the grounds of appeal I had a discussion with Mr Thomas in an attempt to ascertain the real basis for his complaints.
The application for summary judgment pursuant to Supreme and District Court Civil Rules 2006 6R 232 required the Master to be satisfied that there was no reasonable basis for defending the plaintiff's claim. The learned Master considered the principles to be applied in his reasons for judgment. The Notice of Appeal does not complain of any error in the way that the Master identified the principles. I am satisfied that the Master correctly identified the principles.
As I have mentioned the Further Amended Statement of Claim and the claim for summary judgment was based upon alleged breaches of the Settlement Agreement. Mr Thomas did not dispute that the Settlement Agreement had been signed by his solicitor and I find that the Master correctly determined that the parties were bound by the Settlement Agreement. In fact Mr Thomas part performed the Settlement Agreement by going back into possession of the shop. In an oblique way Mr Thomas tried to suggest to me that he was not bound by the agreement, but in my opinion there is no merit in that suggestion and the Master was correct in proceeding on the basis that the Settlement Agreement was binding upon Mr Thomas.
The question therefore was whether Mr Thomas was in breach of the Settlement Agreement.
The Master concluded that certain paragraphs in an affidavit of Mr Thomas dated 26 August 2008 were inadmissible (Reasons paragraph 88). The text of the affidavit is recited in the Master's reasons. In one of the paragraphs, which the Master held to be inadmissible, Mr Thomas had said:
3.Elizabeth City Centre had banked a bank guarantee which was held to the lease under the company name Thomlat Pty Ltd which is now in liquidation.
I return to discuss the bank guarantee below.
During the discussion which I had with Mr Thomas he said that he could not contest the items claimed in paragraphs 16.2, 16.3, 16.4 and 16.5 of the Further Amended Statement of Claim. The dispute therefore revolved around the claim for "Total arrears in the sum of $59,260.79" which was made in paragraph 16.1 and the claim for "Make good costs in the sum of $12,298" in paragraph 16.6 of the Further Amended Statement of Claim.
I deal first with the costs of making good in paragraph 16.6. Mr Thomas argued that he should not be liable for what he described as the "defit". As I understood his argument it revolved around the terminology that had been used. He sought to distinguish between the term "defit" and the term "make good".
At the first hearing before me Mr Thomas claimed to have photographs which showed that he had removed glue from some surfaces but he was never given a chance to show the photographs to the Master. Mr Thomas has now produced photographs which are contained in exhibit "JT39" to the affidavit of Jamie Richard Thomas sworn 19 November 2008. I received those photographs as evidence in the case. In my opinion they do not take the matter further. They do not establish that the plaintiff has charged Mr Thomas for work in connection with making good the premises that was unnecessary.
Leaving the meaning of the term "defit" to one side, Clause 8 of the Settlement Agreement required that when he vacated the shop Mr Thomas would "make good in accordance with terms of the lease."
The lease was in evidence before the Master. Clause 12.13 dealt with the condition of the premises on termination. Paragraph (a) required the Tenant to surrender and yield up the premises in a condition in accordance with the terms of the lease and in proper working order. Paragraphs (b) and (c) of clause 12.13 of the lease required the Tenant to:
(b)remove the property from the premises in a proper and workmanlike manner… except, if requested by the Landlord, the shopfront, all electrical fittings and dissociated wiring and the switchboard and other fixtures and fittings of a structural nature (which items must be left on the Premises in a proper working order had become the property of the Landlord):
(c)subject to clause 12.13(b), reinstate any alterations made to the Premises by the Tenant so that the Premises are in the same condition as before the alterations were made;
I regard the contractual obligation of Mr Thomas as being to reinstate alterations which he made to the premises and to leave the premises in the same condition as they were before the alterations were made.
The question for the Master to determine was whether the amount claimed by the plaintiff was the amount to which it was entitled under clause 12.13 of the lease.
I wondered whether the costs of making good were the proper subject matter of an application for summary judgment or whether they should have been the subject of an assessment of damages. Mr Douglas who appeared for the respondent referred me to the evidence before the Master. Exhibit "DAS4" to the affidavit of David Alistair Seward contained the evidence which the plaintiff relied upon before the Master with respect to the costs of making good. The exhibit included an invoice dated 18 February 2008 from a company called ONE68 Pty Ltd. for "Electrical defit works at the above store as per our quotation". The quotation was $980, GST was $98 and the total amount was $1,078.
The exhibit also included a tax invoice from Exclusive Property Maintenance addressed to Elizabeth City Centre Management. The details provided in that invoice were:
RE: Demolition of First Bounce (Mr Thomas's business)
1.   Remove entire shopfront and roller door.
2.   Grind all grooves from floor.
3.   Patch all walls and paint white.
4.   Install bondor hoarding.
That invoice was for $10,200 with GST of $1,020 which produced a total balance of $11,220.
The work was carried out by ONE68 and Exclusive Property Maintenance in the ordinary course of business. It can be assumed that as the manager of a large shopping centre the plaintiff would be experienced at having work carried out by contractors. Mr Thomas did not convince me that he had a defence on the basis that the work which was the subject of the two invoices was not required for the purpose of complying with his obligation to make good under the lease. The reasonableness of the quantum of the claim can be inferred from the fact that the plaintiff had itself incurred a liability to the firms that carried out the making good work in the ordinary course of its business. It is significant that the plaintiff’s claim was for reimbursement of costs which the plaintiff had actually incurred itself, not damages. There is no reason to assume that the plaintiff paid more than was reasonable to have the work carried out.
I asked Mr Thomas how what has been described as "defit" differed from his obligation to make good in clause 12.13 of the lease (transcript p.25). Mr Thomas claimed that it did but could not demonstrate how the amounts which had been charged for making good the premises included work which extended beyond his contractual obligation. His final position was that the necessary work did not come to $11,000 (transcript page 26); that is he was contesting the quantum of the claim for making good.
In my opinion there was evidence upon which the Master was entitled to give summary judgment for that part of the claim in paragraph 16.6 of the Further Amended Statement of Claim. Mr Thomas did not satisfy me that there was a reasonable basis for defending that part of the plaintiff's claim and he did not identify any error on the part of the Master in deciding that there was no reasonable basis for defending that part of the plaintiff's claim. In my opinion the two invoices establish the reasonableness of the quantum of claim for making good.
In my opinion the result would not have been any different if the Master had taken into account the photographs which Mr Thomas claimed show that he had removed glue. As I mentioned the photographs which were produced to me take the matter no further.
The fact is that the plaintiff's claim for making good is confined to passing on the actual costs of work which was carried out.
I now turn to the claim in paragraph 16.1 of the Further Amended Statement of Claim, that is the claim for total arrears in the sum of $59,260.79. Mr Thomas complained that the amount included costs of litigation and a bank guarantee had not been deducted.
During the course of the hearing, at my request, Mr Douglas obtained instructions from his client and confirmed that Mr Thomas had received a credit for the bank guarantee. Mr Thomas denied that he had received a credit. I adjourned the hearing to enable each party to obtain evidence to support their contentions. The question whether Mr Thomas had received a credit is a simple one and is determinative of the final issue on the appeal.
I return to paragraph 3 of Mr Thomas's affidavit which the Master struck out as inadmissible. That paragraph really served two purposes. First, it raised Mr Thomas's claim that he had not received a credit for the amount of the guarantee. If that claim was correct it would have been a part defence to the claim in paragraph 16.1 of the Further Amended Statement of Claim. The second purpose that paragraph 3 served was to provide evidence of Mr Thomas's claim. While the statement in the affidavit as to payment of the guarantee moneys may have been inadmissible as proof of that fact, the statement by Mr Thomas that he had not received credit for the bank guarantee served a separate purpose in so far as it was a statement of a defence which the Master should have considered. The fact that paragraph 3 of the affidavit may have contained inadmissible evidence did not mean that the Master was relieved from the obligation to consider whether the defendant had the defence of payment. Also, if the evidence in the affidavit was inadmissible, the defendant should have been advised of that fact before the reasons for decision were posted to him and he should have been provided with an opportunity to adduce evidence of the payment in an admissible form. One of Mr Thomas's complaints was that he was not told that the affidavit was going to be disallowed.
The plaintiff admitted receiving the moneys from the guarantee and the evidence which was ruled to be inadmissible was therefore of no consequence. The real dispute was not whether the plaintiff had received the amount of the guarantee, but whether the plaintiff had given the defendant a credit for the amount of the bank guarantee. If the plaintiff had received money from a bank guarantee Mr Thomas should have been credited with that amount.
So far as Mr Thomas's statement about legal costs is concerned Mr Douglas informed me that the claim in paragraph 16.1 of the Further Amended Statement of Claim did not include the costs of litigation and that legal costs were claimed as a separate item. He said that the statement upon which Mr Thomas relied to suggest that the judgment sum included legal costs was not the document upon which the judgment amount was calculated. The judgment amount was based upon exhibit "DAS3" to the affidavit of Mr Seward dated 6 June 2008. Mr Thomas has not satisfied me that a claim for legal costs was included in the amount of the judgment. I am not satisfied that the Master fell into error in his assessment of the claim made in paragraph 16.1 of the Further Amended Statement of Claim by including legal costs.
As to the guarantee I am now satisfied by reason of the affidavit of Angela Jocelyn Perazzo and the exhibits thereto, in particular "AJP3", and the second affidavit of David Alistair Seward that the plaintiff has given the defendant credit for the amount of the bank guarantee. Exhibit "AJP3", which is a "Receipt Summary" records that cheque number 336742 for $7,791.66 had been received by the plaintiff on 2 May 2007. Accordingly the Master did not fall into error in determining the amount of the claim in paragraph 16.1 of the Further Amended Statement of Claim. He was correct in relying upon exhibit "DAS 3" to the first affidavit of Mr Seward. The appellant has not established that the plaintiff had no reasonable prospects of success with respect to that claim or that there was a triable issue with respect to paragraph 16.1.
For these reasons I have come to the conclusion that there is no merit in the appeal. Having considered each of the items claimed in paragraphs 16.1 to 16.6 inclusive of the Further Amended Statement of Claim, I am not satisfied that Mr Thomas had any defence.
For the sake of completeness I should say that I have not seen or heard anything which suggests there is merit in the first ground in the Notice of Appeal, that is that the book of documents that were compiled for argument were not taken into consideration or even viewed by the court. The transcript of the proceedings before the Master on 14 July 2008 indicates that after Mr Douglas had put detailed submissions on behalf of the plaintiff the Master allowed Mr Thomas four weeks within which to put answering submissions in writing. Mr Thomas has not drawn my attention to any material which was likely to have affected the decision of the Master which was not taken into account.
It is unnecessary to hear argument about the procedural complaints raised by the respondent about the adequacy of the Notice of Appeal or book of documents. The appeal must be dismissed on its merits.
The appeal should be dismissed.