Wang v Intrinsic Project Pty Ltd [No 2]
[2023] WADC 132
•2 NOVEMBER 2023
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: WANG -v- INTRINSIC PROJECT PTY LTD [No 2] [2023] WADC 132
CORAM: PALMER DCJ
HEARD: 2 NOVEMBER 2023
DELIVERED : 2 NOVEMBER 2023
FILE NO/S: CIV 5374 of 2022
BETWEEN: LEI WANG
Plaintiff
AND
INTRINSIC PROJECT PTY LTD
First Defendant
WILL LEE LEONG
Second Defendant
Catchwords:
Pleadings - Application to strike-out statement of claim - Whether the matters pleaded disclose a reasonable course of action - Whether the matters pleaded may prejudice, embarrass or delay fair trial of the action
Legislation:
Nil
Result:
Appeal dismissed
Application dismissed
Representation:
Counsel:
| Plaintiff | : | In person |
| First Defendant | : | Mr M N Blandford |
| Second Defendant | : | Mr M N Blandford |
Solicitors:
| Plaintiff | : | Not applicable |
| First Defendant | : | Hoe Lawyers |
| Second Defendant | : | Hoe Lawyers |
Case(s) referred to in decision(s):
Built Environs WA Pty Ltd v Perth Airport Pty Ltd [No 4] [2020] WASC 382
Cheney v Moore [2020] WASC 227
Day v William Hill (Park Lane) Ltd [1949] 1 KB 632
English v Vantage Holdings Group Pty Ltd [2021] WASCA 47
Kezic v St John of God Health Care Inc [2015] WASCA 220
Technip Oceania Pty Ltd v Cutmere Pty Ltd [2019] WASC 478
Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398
Wang v Intrinsic Project Pty Ltd [2023] WADC 50
PALMER DCJ:
Introduction
This is an appeal from a decision made by Registrar Jeyamohan on 12 May 2023 to dismiss an application (Application) made by the defendants to strike out the statement of claim or paragraphs of the statement of claim pursuant to O 20 r 19(1)(a) or O 20 r 19(1)(c) of the Rules of the Supreme Court 1971 (WA) (RSC).
At the hearing of the appeal I indicated that I would dismiss the Application and I would publish reasons for my decision later. These are those reasons.
The plaintiff owns a parcel of land in Doubleview (Land).[1]
[1] Amended Statement of Claim dated 23 March 2023 (Amended Statement of Claim), par 1.
On 30 December 2020, the first defendant and the plaintiff entered into a written agreement (Contract) for the first defendant to construct a house on the Land.[2] The second defendant is the first defendant's sole director and signed the Contract on behalf of the first defendant.[3]
[2] Amended Statement of Claim, par 4.
[3] Amended Statement of Claim, pars 3 - 4.
In the Amended Statement of Claim, the plaintiff alleges that the first defendant repudiated the Contract and the plaintiff accepted that repudiation by issuing the writ that commenced these proceedings, or by giving a written notice of termination on 23 November 2022.[4]
[4] Amended Statement of Claim, pars 11 - 26.
The plaintiff seeks damages for breach of contract,[5] return of a deposit that she paid[6] and damages for misleading and deceptive conduct.[7]
[5] Amended Statement of Claim, pars 25 - 29.
[6] Amended Statement of Claim, par 30.
[7] Amended Statement of Claim, pars 31 - 35.
The Application was heard before Registrar Jeyamohan on 3 May 2023 and she delivered written reasons dismissing the Application on 12 May 2023.[8] It was that decision that was the subject of the appeal.
[8] Wang v Intrinsic Project Pty Ltd [2023] WADC 50.
The defendants contended that the Amended Statement of Claim should be struck out because it pleads that construction was to be completed within 400 working days of the execution of the Contract and this was inconsistent with the express terms of the Contract.[9]
[9] First and Second Defendant's Written Submissions dated 28 July 2023 (Defendant's Written Submissions), par 4.
The grounds upon which the defendants sought to strike out the Amended Statement of Claim were narrower than those argued before Registrar Jeyamohan. The Amended Statement of Claim was also filed after the registrar heard the Application but the defendants say that the amendments failed to addressed their concerns.[10]
[10] Defendant's Written Submissions, par 5.
The nature of the appeal
Rule 15(6) of the District Court Rules 2005 (WA) provides that an appeal from a registrar is to be by way of a new hearing of the matter that was before the registrar.
A new hearing means that the judge hearing the appeal must treat the application as if it was before the court for the first time.[11] The defendant, as the party which has appealed, is not required to show that the registrar made an error in the decision, the subject of the appeal.[12]
[11] Kezic v St John of God Health Care Inc [2015] WASCA 220 [42].
[12] Cheney vMoore [2020] WASC 227 [9].
It is therefore necessary for me to decide the strike out application again but this time, on the basis of the Amended Statement of Claim.
The Amended Statement of Claim
The Contract
The plaintiff pleads the Contract in par 4 of the Amended Statement of Claim. That paragraph pleads that by a written agreement made between the plaintiff and the first defendant (signed by the second defendant) on 30 December 2020, the first defendant promised to design and construct a residential dwelling on the Land in accordance with, and subject to, the terms of the agreement.[13]
[13] Amended Statement of Claim, par 6.
The plaintiff pleads the effect of the terms of the Contract in par 6 of the Amended Statement of Claim. The Application arises out of par 6.5 where it is pleaded that:
6.5The first defendant was to complete the construction within 400 business days of 30 December 2020 (excluding public holidays), or by 25 July 2022, subject to the first defendant giving the plaintiff written notice of an extension of time occasioned by, and within 10 business days of the first defendant becoming aware of the cause and extent of, a cause beyond the first defendant's control, including:
6.5.1. the plaintiff not making a payment that becomes due to the first defendant, or;
6.5.2. any delay in the supply of materials, transport or labour;
The balance of the terms pleaded in par 6 of the Amended Statement of Claim are as follows:
(a)the plaintiff was to pay a total of $339,000 by way of a deposit and then following the completion of certain stages of the work;[14]
(b)the first defendant could request the plaintiff to vary the Contract by agreeing to increase the amount payable by the plaintiff by reason of circumstances that could not have been reasonably foreseen by the first defendant as at 30 December 2020, except by reason only of increases in the costs of labour or materials or both;[15]
(c)any request by the first defendant to vary the Contract was to be by written notice setting out the reason for the variation and the specific additional costs to be incurred within 10 business days of when the first defendant became aware or should reasonably have become aware of the circumstances relied upon for the variation;[16]
(d)on receiving a request from the first defendant to vary, the plaintiff was to agree to the variation within 5 business days, or not agree to the variation and, in the latter case, the first defendant was to complete the Contract without adjustment or to terminate the Contract within a reasonable time by notice in writing;[17] and
(e)termination of the Contract was to be by written notice of termination.[18]
Termination of the Contract
[14] Amended Statement of Claim, par 6.1.
[15] Amended Statement of Claim, par 6.2.
[16] Amended Statement of Claim, par 6.3.
[17] Amended Statement of Claim, par 6.4.
[18] Amended Statement of Claim, par 6.6.
The plaintiff pleads the first defendant's alleged repudiation of the Contract and her acceptance of that repudiation in par 11 ‑ 24 of the Amended Statement of Claim. The plaintiff alleges that:
(a)the first defendant repudiated the Contract by:
(i)proposing a variation to the Contract to increase the cost of bricklaying (Bricklaying Variation), despite the fact that the first defendant was not entitled to such a variation because the variation sought to recover an increase in the cost of labour and materials that was reasonably foreseeable as at 30 December 2020;[19]
(ii)refusing to perform the Contract unless the Bricklaying Variation was agreed;[20] and
(iii)failing to perform any work from November 2021;[21] and
(b)the plaintiff accepted the first defendant's repudiation by issuing these proceedings, or by giving a written notice of termination on 23 November 2022.[22]
[19] Amended Statement of Claim, pars 11 - 13.
[20] Amended Statement of Claim, par 18.
[21] Amended Statement of Claim, pars 11 - 16 and 18 - 24.
[22] Amended Statement of Claim, pars 25 - 26.
Paragraphs 14, 17 and 20 of the Amended Statement of Claim refer to the first defendant continuing to be obliged to complete construction within 400 days in accordance with the terms of the Contract. It was not clear to me whether the plaintiff intended to plead that the failure to complete construction within 400 days was part of the repudiatory conduct. Those paragraphs plead the persistence of the obligation. The paragraphs do not expressly plead that the failure to complete construction within 400 days was a repudiation of the Contract. In this regard, those paragraphs may be contrasted to par 28 of the Amended Statement of Claim where it is expressly pleaded that the failure to complete construction within 400 days was a breach (but not repudiation) of the Contract.
Paragraphs 15 - 16 and 21 - 22 plead proposed variations in relation to fixtures and fittings. It is not pleaded, however, that the first defendant had no right to the variation proposed, or that the first defendant refused to perform the Contract unless that variation was agreed. It is therefore not clear to me why this conduct would have been repudiatory.
With regard to the term of the Contract that permitted the first defendant to terminate the Contract if the plaintiff did not agree to a variation,[23] the plaintiff pleaded that on each occasion on which the variation was refused, the first defendant affirmed the Contract.[24]
Damages for breach
[23] See Amended Statement of Claim, par 6.4.
[24] Amended Statement of Claim, pars 13 - 14, 16, 19 and 21 - 23.
In pars 27 - 29 of the Amended Statement of Claim, the plaintiff pleads damages for breach of contract.
In par 27 the plaintiff pleads that by reason of the first defendant's repudiatory breach of the Contract, the plaintiff has lost the benefit of the Contract and has lost the benefit of the construction of the dwelling at the agreed price by the agreed date and has suffered consequential loss in consequence of the delay in construction.[25]
[25] Amended Statement of Claim, par 27.
In par 28 of the Amended Statement of Claim the plaintiff pleads that in lieu of terminating the Contract, the first defendant's obligation was to complete the Contract in accordance with the term pleaded at par 6.5 of the Amended Statement of Claim, but the first defendant failed to complete the Contract within 400 business days of the date of the Contract or by 25 July 2022 or at all prior to termination.[26]
[26] Amended Statement of Claim, par 28.
In par 29 of the Amended Statement of Claim the plaintiff pleads that by reason of the first defendant's breach of rights accruing under the Contract before termination, the plaintiff has suffered consequential loss as a result of the delay in construction. The loss and damage is particularised as being the cost of alternative accommodation and the loss of opportunity to sell the dwelling.[27]
Return of the deposit
[27] Amended Statement of Claim, par 29.
In par 30 of the Amended Statement of Claim the plaintiff pleads that by reason of the termination of the Contract, there was a total failure of consideration for the $22,035 deposit paid and it would be unjust or unconscionable for the first defendant to retain the benefit conferred thereby.[28]
Misleading and deceptive conduct
[28] Amended Statement of Claim, par 30.
The plaintiff pleads a claim for misleading and deceptive conduct in pars 31 - 35 of the Amended Statement of Claim.
In pars 31 and 32 of the Amended Statement of Claim the plaintiff pleads that by entering into the Contract, the first defendant conveyed or represented to the plaintiff that there was a reasonable basis as at 30 December 2020 for the first and second defendant's promise to construct the dwelling at Doubleview within 400 business days and/or for $339,000.[29]
[29] Amended Statement of Claim, par 32.
In pars 33 and 34 of the Amended Statement of Claim the plaintiff pleads that that representation was a representation as to a future matter within the meaning of s 4 of the Australian Consumer Law.[30]
[30] Amended Statement of Claim, par 33.
In par 35 of the Amended Statement of Claim the plaintiff pleads that she relied on the second defendant's representation in binding herself to the Contract and has suffered loss and damage by reason of the pleaded contravention. The loss and damage is particularised as the difference between the contract price and the cost of construction by an alternative builder, cost of alternative accommodation and loss of opportunity to sell the dwelling.[31]
[31] Amended Statement of Claim, par 35.
Strike out applications
The principles in relation to strike out applications were summarised by Smith J in Vantage Holdings Group Pty Ltd v Donnelly [No 4] (Vantage Holdings).[32] That summary was described 'as comprehensive and correct' by Murphy and Vaughan JJA in English v Vantage Holdings Group Pty Ltd[33] and as 'a valuable guide for the determination of any strike-out application'.[34]
[32] Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60(d)] - [60(f)].
[33] English v Vantage Holdings Group Pty Ltd [2021] WASCA 47.
[34] English v Vantage Holdings Group Pty Ltd [56].
The principles identified by Smith J in Vantage Holdings that are relevant to the present application are:
(a)the court should proceed with caution before striking out a pleading on the ground that it does not disclose a reasonable cause of action. While the court may determine a difficult question of law on such an application, it would usually be appropriate to leave the determination of such questions for trial;
(b)in alleging no reasonable cause of action:
(i)the question to be decided is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action. Rather, the question is whether it would be open to the party (on its pleadings) to prove facts at the trial which would constitute a cause of action; and
(ii)'reasonable' means reasonable according to law. If the facts pleaded conceivably give rise to relief, then the cause of action should be held to be reasonable;
(c)the mere fact that a case appears weak is not of itself sufficient to strike out the action;
(d)provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action (or defence), and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleading rules that evolved in, and derive from, a very different case management environment; and
(e)pleadings may be struck out on the ground that they may prejudice, embarrass or delay the fair trial of the action because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general.
Order 20 r 19(2) of the RSC provides that no evidence is admissible on an application under O 20 r 19(1)(a). The court may, however, refer to documents mentioned in the pleadings.[35]
[35] Technip Oceania Pty Ltd v Cutmere Pty Ltd [2019] WASC 478 [12]; Built Environs WA Pty Ltd v Perth Airport Pty Ltd [No 4] [2020] WASC 382 [10]; Day v William Hill (Park Lane) Ltd [1949] 1 KB 632.
The defendants' submissions
The defendants referred to cl 9(a) (particularly cl 9(a)(v)), cl 9(b) and cl 26 of the Building Contract, Item 9 in the Schedule to the Building Contract and to the date on which it was executed.[36] The defendants also referred[37] to a building permit (Building Permit) attached to an affidavit sworn by the second defendant.[38]
[36] Defendant's Written Submissions, pars 9(a) - 9(e) and 9(h).
[37] Defendant's Written Submissions, pars 9(f) - 9(g).
[38] Affidavit of Will Lee Leong sworn 20 January 2023, attachment 'MLL‑3', pages 34 - 35.
The defendants submitted that when the Contract was read together with the Building Permit, the 400 days for completion of the Works do not commence from the date the contract was signed (30 December 2020) but rather from when the Building Permit was obtained (5 October 2021).[39]
[39] Defendant's Written Submissions, par 10.
The defendants submitted that pars 6.5, 27, 28, 29, 31, 32, 33, 34, 35 and par B of the prayer for relief of the Amended Statement of Claim, all rely on the 400 working days within which the first defendant was required to complete the construction of the home being calculated from the date the Contract was signed on 30 December 2020. It was submitted that this is inconsistent with the express terms of the Contract, namely cl 9(a) and specifically cl 9(a)(v).[40]
[40] Defendant's Written Submissions, par 16.
The defendants submitted that cl 9(a)(v) was not satisfied until 5 October 2021 and that when 400 working days is calculated from this date, the 400 working days had not elapsed until after the plaintiff commenced the present proceedings.[41]
[41] Defendant's Written Submissions, par 17.
The defendants submitted that it was not open to the plaintiff to plead, inconsistently with the Contract, that the 400 working days within which the first defendant needed to complete the Works, commenced on the date that the Contract was signed, 30 December 2020.[42]
[42] Defendant's Written Submissions, par 18.
Disposition
Application to strike out pursuant to O 20 r 19(1)(a)
The defendants contend that a plea in the Amended Statement of Claim that the first defendant was required to complete construction within 400 working days of the execution of the Contract is inconsistent with cl 9(a) and cl 9(b) of the Contract and Item 9 of the Schedule.
Clause 9(b) of the Contract provides that subject to the Contract, the Builder shall complete the Works (bring the Works to Practical Completion – cl 19(a)) by the time specified in Item 9(b) of the Schedule.
Item 9 in the Schedule states:
(a) TIME TO COMMENCE WORKS (CLAUSE 9(a)) 10 Working days
(b) TIME TO COMPLETE WORKS (CLAUSE 9(b)) 390 Working days
from the date on which work commenced or should have commenced under Clause 9(a).
Clause 9(a) of the Contract provides as follows:
(a)Subject to this Contract the Builder shall commence the Works within the number of working days specified in Item 9(a) of the Schedule or as soon thereafter as may be reasonably practicable calculated from the latest of the following dates:
(i)on which the Owner shall have complied with the conditions referred to in Clause 2;
(ii)on which the Owner satisfied all requirements under Clause 3(c), if applicable, and Clause 3(d);
(iii)on which the Builder is satisfied that the boundaries of the Site have been adequately delineated;
(iv)on which the Builder is satisfied that both an adequate water supply and an adequate power supply for the carrying out of the Works are available to the Site;
(v)on which the Builder has received approval from all relevant authorities.
Thus, when cl 9(b) is read with Item 9 of the Schedule and cl 9(a), cl 9(b) requires the Builder to bring the Works to Practical Completion by 390 working days of the date of the satisfaction of the latest of the matters in cl 9(a). Significantly, however, the Contract does not record any of the dates upon which any of the matters identified in cl 9(a) were satisfied.
It seems to me that the Contract itself is not inconsistent with a plea that the first defendant was required to complete construction within 400 working days of the execution of the Contract. This is because the Contract itself does not identify the date upon which the last of the matters in cl 9(a) were satisfied. Read in isolation, the Contract leaves open the possibility that the matters identified in cl 9(a) were satisfied by the date of the execution of the Contract, so that the 400 days would run from that date.
The defendants seek to rely on evidence other than the Contract, in the form of the Building Permit, to establish when cl 9(v) was satisfied. As the defendants have acknowledged[43] however, O 20 r 19(2) provides that no evidence is admissible on an application under O 20 r 19(1)(a).
[43] Defendant's Written Submissions, par 13.
The defendants may refer to the Contract because it is referred to in the Amended Statement of Claim and a document referred to in the statement of claim may be referred to on an application under O 20 r 19(1)(a), despite O 20 r 19(2). But the Building Permit is not referred to in the Amended Statement of Claim. It may therefore not be referred to for the purposes of an application under O 20 r 19(1)(a).
This is sufficient to dispose of the defendants' application to strike out pursuant to O 20 r 19(1)(a).
Application to strike out pursuant to O 20 r 19(1)(c)
The defendants have also applied to strike out the Amended Statement of Claim pursuant to O 20 r 19(1)(c) on the ground that it may prejudice, embarrass or delay the fair trial of the action. The defendants contend that regard may be had to the Building Permit in relation to that application.[44]
[44] Defendant's Written Submissions, par 15.
Pleadings may be struck out pursuant to O 20 r 19(1)(c) because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general.
The defendants have not suggested that the claim pleaded in the Amended Statement of Claim is vague or obscure, or that they have had any difficulty understanding the case put against them. Indeed, they do not rely on the Building Permit to explain the obscurity of the plaintiff's claim. Rather, they rely on the Building Permit to argue that the plaintiff's claim cannot succeed. Two observations may be made.
First, that the defendants are in a position to advance an argument that the plaintiff's claim cannot succeed reveals that they well understand the case put against them. Thus, the Amended Statement of Claim seems to have performed one of the basic functions of a pleading - apprising the defendants of the case to be met.
Secondly, if the defendants wished to argue that the plaintiff's claim cannot succeed, the appropriate course was to apply for summary judgment. Order 20 r 19(1)(c) is concerned with different matters than those that arise on an application for summary judgment (or an application to strike out pursuant to O 20 r 19(1)(a)). This observation should not be understood as an encouragement to bring an application for summary judgment in this matter.
It seemed to me that the defendants' contention that the entire Amended Statement of Claim should be struck out assumed that the plaintiff's case rested on the allegation that the defendants had breached the alleged term of the Contract that construction must be completed within 400 days of the Contract's execution. In my view, when the Amended Statement of Claim is fully considered, it may be seen that that is not the case.
The claim made in the Amended Statement of Claim is that the plaintiff was entitled to terminate the Contract because of the first defendant's repudiatory conduct. The repudiatory conduct pleaded consists of the first defendant wrongly insisting on the plaintiff agreeing to the Bricklaying Variation, refusing to perform the Contract unless that variation was agreed and performing no work after November 2021.[45]
[45] Amended Statement of Claim, pars 11 - 13, 18 and 24.
As mentioned, pars 14, 17 and 20 of the Amended Statement of Claim refer to the first defendant continuing to be obliged to complete construction within 400 days in accordance with the terms of the Contract. It is not clear to me, however, that the plaintiff intended to plead that the failure to complete construction within 400 days was also repudiatory conduct. Even if this was what was intended, any alleged breach of the alleged obligation was not the only repudiatory conduct relied upon. Any summary judgment application would therefore be unlikely to finally dispose of the proceedings.
Further, the amendments made to the particulars to pars 27 and 29 of the Amended Statement of Claim to remove reference to the 400‑day period appeared to me to be intended to avoid reliance on that period to calculate damages. While there is reference to the 400‑day period in the pleaded claim for misleading and deceptive conduct, as I canvassed with counsel for the defendants at the hearing, the question of whether or not a term in a contract is misleading or deceptive does not turn solely on the proper construction of the contract.
Conclusion
For these reasons, I dismissed the Application. I also ordered the defendants to pay the plaintiff's costs to be taxed if not agreed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DF
Associate to Judge Palmer
7 NOVEMBER 2023
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