| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : VOLLEY INVESTMENT PTY LTD -v- ASTERLEIGH PTY LTD [2013] WADC 108 CORAM : DEPUTY REGISTRAR HEWITT HEARD : 27 JUNE 2013 DELIVERED : 18 JULY 2013 FILE NO/S : CIV 958 of 2013 BETWEEN : VOLLEY INVESTMENT PTY LTD Plaintiff
AND
ASTERLEIGH PTY LTD
First Defendant
ABRAHAM LAHDO
Second Defendant
Catchwords: Practice and procedure - Summary judgment application - Relevance of application to State Administrative Tribunal - Quality of that application - Consideration of unliquidated portion of claim - Consideration of issue estoppel - Consideration of quality of hearsay evidence in support of application Legislation: Rules of the Supreme Court 1971 O 14(2)(1)
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Result: Application dismissed
Representation: Counsel:
Plaintiff : Mr S Crabb
First Defendant : Mr P Hannan
Second Defendant : Mr P Hannan
Solicitors:
Plaintiff : Clayton Utz
First Defendant : Metaxas & Hager
Second Defendant : Metaxas & Hager
Case(s) referred to in judgment(s):
Continental Illinois National Bank & Trust Co of Chicago v Papanicolaou [1986] 2 Lloyd's Rep. 441, C.A.
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
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1 DEPUTY REGISTRAR HEWITT: These proceedings commenced by way of a writ of summons indorsed with a statement of claim which was filed on 25 March 2013, subsequently, a defence to that statement of claim was filed and following the filing of that document, a chamber summons for summary judgment was filed on 29 April 2013. That chamber summons was argued before me on 27 June 2013.
2 The plaintiff's claim comprises monies said to be payable under the terms of a lease of a retail premises known as shop 5B Phoenix Shopping Centre by the first defendant from the plaintiff, coupled with a guarantee by the second defendant guaranteeing the due performance of the terms by the first defendant. Supporting the application are a number of affidavits but particularly those of Lauree Danielle Coci sworn 30 May 2013, 19 June 2013 and two affidavits each sworn 26 June 2013. In opposition to the application is an affidavit of the second defendant sworn on behalf of himself and the first defendant. 3 The claims brought by the plaintiff may be broadly categorised as arrears of rent and other outgoings payable by the tenant to the landlord under the terms of the lease together with a further sum which is claimed following the determination of the lease which is claimed to be a diminution of the value of the reversion by virtue of the fact that it was sold to a third party unlet which it is said was productive of a reduction in the purchase price. On that latter point, I take the view that portion claim is not a liquidated claim although it purports to be as much, and is very much a matter upon which expert evidence should be called and is not the appropriate subject of a summary judgment application. I do not intend to further consider that aspect of the claim since I regard the application for summary judgment on that portion to be completely misconceived. 4 As to the remainder of the claim, there have been challenges raised to the sufficiency of the evidence advance in support of the application with which I will deal at a later stage in this decision but I shall first concentrate on the issues which have been raised by the defendant in opposition to the application before considering that aspect of the matter. I might start by referring to the defence which has been filed which seeks to set off against the plaintiff's claim an amount which is claimed by the first defendant in separate proceedings in the State Administrative Tribunal proceeding CC424 of 2012. Those proceedings involve a claim for relief under the provisions of the Commercial Tenancy (Retail Shops) Agreements Act 1895. The proceedings allege unconscionable conduct and are proceedings over which the State Administrative Tribunal has exclusive jurisdiction. In my view, there is no basis upon which the (Page 4)
proceedings in the State Administrative Tribunal can possibly be invoked as a set off in the District Court proceedings and the set off is fundamentally flawed and unsustainable. 5 It may be, however, that the proceedings in the State Administrative Tribunal might provide a basis upon which any judgment which is delivered in favour of the plaintiff in the District Court action might be stayed until determination of those proceedings. 6 For the purposes of analysis I shall adopt the hypothesis that the matters which have been raised in the State Administrative Tribunal could be litigated in the District Court and that the materials which have been submitted to that tribunal could constitute a counterclaim and a set off in the District Court. It is a well known principle in determining summary judgment applications that a defendant to such application must condescend to particulars. The materials with which I have been provided concerning the proceedings in the State Administrative Tribunal, in my view, had they been pleaded as a counterclaim in this court are so wanting in particulars as to fail to satisfy the test which is required to successfully defend a summary judgment application. In that regard my criticism is that although the matters upon which the tenant and guarantor rely to establish unconscionable dealing are set out, there is nothing in the materials which give anything but the vaguest indication of the financial impact of that conduct. The closest that the defendants come to particulars of loss and damage said to have been incurred by virtue of the behaviour of the plaintiff is contained in par 5 of the affidavit of Abraham Ladho sworn 21 June 2003 in which he says in par 5: I verily believe the loss and damages suffered by the first defendant as a result of the conduct of the claimant the subject of the State Administrative Tribunal proceedings, exceed the rental and other monies due to the claimant under the lease of both of shops 5B and 38. 7 There are elsewhere in the materials vague references to the business operated by the first defendant suffering losses which are not quantified and no details whatever are provided which would allow one to confidentially assess the amount which might be recovered in the State Administrative Tribunal proceedings in the event that they were successful. I take the view that the materials which are in the State Administrative Tribunal would, if they formed part of the court record in these proceedings, be wholly inadequate to resist a claim for summary judgment failing to condescend as they do, on relevant particulars of the quantum of loss. My conclusion on this aspect of the matter is therefore firstly, that the purported set off contained in the (Page 5)
defence is invalid and unsustainable. Secondly, that although the proceedings in the State Administrative Tribunal could in some circumstances, justify a stay of any judgment granted by the court to the plaintiff, those proceedings are so wanting in particulars and so general and ill-defined on the question of quantum that such a stay should not be contemplated. 8 The next issue which requires consideration is the proposition that the lease purported to be granted by the plaintiff to the defendant was in fact void by virtue of its want of registration. I deal with that allegation by referring to par 2 of the defence. That paragraph admits par 4 of the statement of claim which is in the following terms: By a lease agreement (the lease) made on 17 November 2009 between: (a) Asterleigh (as lessee); (b) Mr Lahdo (as guarantor; and (c) Volley Investments (as lessor). Asterleigh leased the retail premises known as 5B of Phoenix Shopping Centre (the leased premises) from Volley Investments. 9 I am unable to understand how having admitted the relevant existence of the lease it is now open to the second defendant to contend in his opposition to the summary judgment that there was in fact no lease. That contention is contrary to the admissions contained in the defence and it seems to be to be pointless to analyse the niceties of the relevant legislation and cases in the light of that admission. Additionally, if I am wrong on that point, I think it relevant to refer to par 27 of the lease agreement which contains the guarantee upon which the plaintiff sues the second defendant. The first sentence of the guarantee reads as follows: 27.1 In consideration of the landlord executing this lease at the request of the guarantor (which request is testified by the guarantor's execution of this lease) the guarantor. 27.2 … 27.3 A reference in clause 27.1 or 27.2 to this lease is a reference to any tenancy or other right whether legal, equitable or otherwise under which the tenant occupies or is entitled to occupy the premise including without limitation a tenancy for a fixed term, a periodic tenancy, a tenancy at will or a tenancy at sufferance. (Page 6)
10 Additionally, it is to be noted that the proceedings in the State Administrative Tribunal have at their heart the proposition that the applicant, namely Asterleigh Pty Ltd leased the relevant shop from the respondent Volley Investments. Statements contained in the evidence which has been filed in the State Administrative Tribunal including in par 5 of a statement of evidence of Abraham Lahdo (the second defendant) at par 48 appearing on page 33 of his affidavit a statement to the effect that he renewed the lease of shop 5B that being the shop the subject of the proceedings with which I am concerned. 11 It appears to me that a party cannot properly engage in a court proceeding in which the existence of the lease was propounded in one jurisdiction and defend in another jurisdiction on the basis that there was no such lease and accordingly no guarantee of it. 12 A further matter requiring consideration is, notwithstanding my comments about the strength of the matters proceeding in the State Administrative Tribunal whether an issue of estoppel exists which would preclude the defendants to this action relying on the set off they purport to raise. 13 In proceeding 18336 of 2011 that precise issue was litigated by these defendants in proceedings which had been commenced against them by the plaintiff to the present action, that proceeded to a determination before Magistrate Bromfield on an application filed by the defendants on 20 March 2013. The application sought the proceedings to be transferred to the State Administrative Tribunal or alternatively stayed or alternatively enforcement of any judgment given be stayed. The matter received the consideration of the court and the application was rejected and a judgment entered in favour of the plaintiff unencumbered by any stay or any impediment. In my view, the issues raised in that application are identical to those which are raised by way of defence in the present application. The application related to the same lease, and all of the parties presently before me were before the Magistrates Court. In my view the issues once resolved cannot be aired again and there is an issue of estoppel preventing the defendants from raising it. In any event, were I to decide the issue on the basis of the evidence and the law I would conclude that the provisions within the lease which require the payments by the first defendant and any demanded of the second defendant to be paid without deduction, counterclaim or set off to effectively snuff out any prospect of the defendants successfully obtaining a stay of either these proceedings or of any judgment granted in these proceedings. In my view the authority relied upon by the applicant plaintiff, namely (Page 7)
Continental Illinois National Bank & Trust Co of Chicago v Papanicolaou [1986] 2 Lloyd's Rep. 441, C.A. a decision of the English Court of Appeal are sound authority for that proposition. As I have mentioned in my view the matter has been determined by the Magistrates Court in a manner in which creates an issue of estoppel and accordingly precludes me from reaching any conclusion different to that reached by Magistrate Bromfield. 14 I now turn to the final issue which is raised by the defendant that is to call into question the quality of the affidavit evidence which has been filed in support of the plaintiff's claim. The issue arises because the deponent of the three affidavits which contain the substance of the evidence relied upon by the plaintiff is a lawyer employed by the solicitors of the plaintiff. Although the deponent to the relevant affidavits recites the formula: Save where I state otherwise I depose to the matters herein on the basis of my own knowledge. Where I have deposed to a matter on information and belief I believe it to be true and I have set out the source of my information and belief; it is clear, the deponent merely being a solicitor employed by the firm acting for the plaintiff, has no personal knowledge whatsoever of the claim and everything that she does know about the claim must necessarily be hearsay save to the extent that she refers to actions which have been undertaken by the plaintiff's solicitors in the course of the proceedings. In my view in order to support an application for summary judgment it is necessary for a person who has actual knowledge of the relevant facts to swear an affidavit, or if hearsay evidence is relied upon to state the source of that evidence and, the belief in the veracity of that evidence, and information which would persuade the court that belief to be soundly held. In those circumstances in my view that would require the hearsay evidence to have been provided by a person with actual knowledge of the relevant facts. In the present case it is quite clear in my view that the deponent L V Coci in her first affidavits has failed to satisfy that requirement. There is however a final affidavit which has been filed which is an attempt to overcome the criticisms which have been levelled against the evidence contained in earlier affidavits, specifically that in an affidavit of 26 April 2013, which in my view can be properly characterised at the back bone of the case which is being advanced by the plaintiff. The additional affidavit states as follows in par 3: I refer to my earlier affidavit of 26 April 2013, which was filed in this proceedings. The content of that affidavit, and specifically to matters to (Page 8)
which I refer are paragraphs 5, 7, 8 and 14 are based on information and figures which I received from Steve Cousins which I verily believe to be true and correct. ___ Mr Cousins is the managing director of Altas Point Pty Ltd a company which was contracted by the plaintiff to manage the assets of the Phoenix Shopping Centre. Mr Cousins informs and I verily believe that the financial information and figures that were provided to me have been extracted from the books and records of the plaintiff to which Mr Cousins had access. 15 The question then arises as to whether or not the belief which has been formed by the solicitor in swearing the affidavit as to the truth of the information which has been provided by Mr Cousins is a reasonable one. It would appear Mr Cousins has no first hand information concerning the business affairs relating to the period in question. There has been no reference to any source document or anything else. Disbursements have been claimed it would seem without any verification by way of examination of source documents or any kind of scrutiny either by the solicitor or Mr Cousins and, the basis of calculations is not explained. I am therefore in a position that the essential information upon which this application for summary judgment relies is provided by a solicitor who on the face of it has no personal knowledge of the matters to which she deposes and relies on information provided by an individual whose source of information appears to be confined to the fact that he has access to the books and records of the plaintiff. It seems to me to be a long bow to draw to assume that the 'books and records' to which he as access are necessarily accurate and a sufficient basis to found a judgment in excess of half a million dollars as is sought in the present application. The mere transcribing of information into books and records does not imbue them with any magic. I do not know what the books and records are. I do not know whether or not Mr Cousins has viewed any original source documents such as receipts and invoices and the like, all I know is that he has access to some records from which he has drawn certain conclusions as to the indebtedness of the defendant and that information has been conveyed to the deponent of the affidavit. In my view, before a belief in the truth of information which is provided on a hearsay basis can be drawn, it would be appropriate to ensure that the person providing that information had some first-hand knowledge of the matters or there was some sound basis upon which to place reliance upon them. In the present case in the absence of any information as to source documents to evidence of disbursements and where appropriate the basis upon which calculations of apportionment have been made, I think the quality of the evidence advanced by the plaintiff falls short of what is required. (Page 9)
16 Furthermore, it is a requirement of O 14(2)(1) of the Rules of the Supreme Court 1971 that the deponent state a belief that 'there is no defence to that claim …' In the present case that statement of belief is contained in the affidavit of Ms Coci. As I have earlier indicated Ms Coci is a person who has no personal knowledge of the matters pertaining to this claim save for acts of her firm. The words are not a mere mantra. They are supposed to convey a genuine and reasonable belief in a state of affairs. Given the deponent's distance from the relevant events and information, I am unable to accept that an uninformed deponent swearing as to matters outside what appear to be the limits of her knowledge, is capable of properly satisfying the requirements of O 14(2)(1). 17 In order to succeed in the summary judgment application, the court needs to be satisfied that there is no real issue to be tried (Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87). The power to order summary judgment should be exercised with great care and never exercised unless it is clear there is no real question to be tried. To simply order judgment because an individual has told a solicitor employed by the plaintiff that the plaintiff's books and records contained certain entries, strikes me as an inappropriate basis to support a summary judgment and a proper basis to require the plaintiff to prove in the normal manner at trial exactly how it calculated the amount for which it makes claim, to prove that the disbursements it claims were in fact made and to prove, to the extent that those disbursements when apportioned between various tenants, were in fact appropriately apportioned. It is therefore my view that on the information presented before me it is not appropriate to grant this plaintiff a summary judgment and accordingly, I dismiss its application.
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