Warren v Lawton
[2014] WASC 59
•5 MARCH 2014
WARREN -v- LAWTON [2014] WASC 59
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 59 | |
| Case No: | CIV:1372/2010 | 14 NOVEMBER 2013 | |
| Coram: | LE MIERE J | 5/03/14 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Amendments to amended defence disallowed Leave to file and serve a minute of proposed amended defence and counterclaim granted | ||
| B | |||
| PDF Version |
| Parties: | MARK DONALD WARREN JOSEPH FRANCIS LAWTON MOLLY ELIZABETH HALL REGISTRAR OF TITLES |
Catchwords: | Practice and procedure Application to disallow amendments to defence and counterclaim Amendments withdraw admission No prejudice from delay in making amendments No leave to amend pleading into defective form Amendments which render pleading defective should be disallowed Amendments are defective Pleading of legal conclusion Material facts must be pleaded Implied terms inconsistent with written terms of sale contract Rectification plea embarrassing |
Legislation: | Property Law Act 1969 (WA), s 126(2) Transfer of Land Act 1893 (WA), s 138B |
Case References: | Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
JOSEPH FRANCIS LAWTON
MOLLY ELIZABETH HALL
First Defendants
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Practice and procedure - Application to disallow amendments to defence and counterclaim - Amendments withdraw admission - No prejudice from delay in making amendments
No leave to amend pleading into defective form - Amendments which render pleading defective should be disallowed - Amendments are defective - Pleading of legal conclusion - Material facts must be pleaded - Implied terms inconsistent with written terms of sale contract - Rectification plea embarrassing
Legislation:
Property Law Act 1969 (WA), s 126(2)
Transfer of Land Act 1893 (WA), s 138B
Result:
Amendments to amended defence disallowed
Leave to file and serve a minute of proposed amended defence and counterclaim granted
Category: B
Representation:
Counsel:
Plaintiff : Mr M J McPhee
First Defendants : Mr I A Morison
Second Defendant : No appearance
Solicitors:
Plaintiff : M J McPhee Barrister and Solicitor
First Defendants : McAuliffe Legal
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212
- LE MIERE J:
Application to disallow amendments to defence and counterclaim
1 The plaintiff has applied to disallow amendments to the first defendant's defence and counterclaim. The action arises out of dealings between the plaintiff and the defendants concerning land near Margaret River. In 1983 the plaintiff was the registered proprietor of the land. The plaintiff and the defendants executed a contract of sale dated 8 September 1983 by which the plaintiff agreed to sell to the defendants as joint tenants an undivided one-twentieth share of the land. I will refer to that document as the Written Contract.
The Written Contract
2 The Written Contract provides that the defendants shall be entitled to the exclusive use and occupation of a portion of the land coloured green on a plan attached to the contract (the Plan) and the plaintiff shall be entitled to the exclusive occupation and use of the remainder of the land, which is coloured red on the Plan. Clause 13 of the Written Contract provides that if the defendants wish to sell their undivided one-twentieth share in the land they shall give written notice to the plaintiff and the plaintiff shall have an option to purchase their share on the terms and conditions specified. Clause 14 provides that the defendants shall hold the undivided one-twentieth share of the land as joint tenants and they warrant that they will not alter such joint tenancy without the written consent of the plaintiff. On 17 January 1990 the plaintiff registered a caveat over the defendants' undivided one-twentieth share in the land.
Lawton transfers his interest to Hall
3 The defendants, Mr Lawton and Ms Hall, were in a de facto relationship. Upon the termination of that relationship they agreed to separate their financial and property interests. They agreed that Mr Lawton's interest in the land would be transferred to Ms Hall. Mr Lawton signed a document to transfer his interest in the land to Ms Hall. Mr Lawton returned to America and has lived there ever since. In about August 1995 Ms Hall wrote to the plaintiff seeking his consent to the transfer. On 29 August 1995 the plaintiff by letter to Ms Hall stated that he did not wish to exercise his option under the Written Contract and consented, or purported to consent, to the transfer upon terms. Mr Lawton's interest in the land has not been legally transferred to Ms Hall.
Plaintiff commences this action
4 On 16 October 2009 Ms Hall caused the Registrar of Titles to issue to the plaintiff a notice under s 138B of the Transfer of Land Act 1893 (WA) to the effect that unless the plaintiff obtained from the Court an order extending the operation of the caveat within 21 days after the day on which the notice was served, the caveat will lapse. The plaintiff commenced this action in which he seeks an order for the dismissal of the defendant's application under s 138B of the Transfer of Land Act for the removal of the caveat, or alternatively an order that the Registrar of Titles dismiss the defendants' application for the removal of the caveat. The plaintiff also seeks a declaration that he has a caveatable interest in the land.
5 Mr Lawton has played no part in this action. In an affidavit sworn on 12 September 2013 Mr Lawton said that he does not wish to be involved in this action or counterclaim and will abide by whatever decision the Court makes. Ms Hall is the active defendant and the claimant in the counterclaim.
The defence and counterclaim
6 Ms Hall filed a defence which was subsequently amended on 12 January 2012. I will refer to her amended defence of 12 January 2012 as the 2012 defence. The substance of Ms Hall's 2012 defence is as follows. The defendants purchased from the plaintiff a one-twentieth undivided share of the land on 8 September 1983 pursuant to a contract of sale. In August 1995 Ms Hall wrote to the plaintiff seeking his consent to the transfer of Mr Lawton's interest in the land to her. By letter of 29 August the plaintiff advised her that he did not wish to exercise his option under the contract of sale and purported to consent to the transfer upon terms. Upon a proper construction of the correspondence referred to, Ms Hall had invoked the right of pre-emption granted to the plaintiff under cl 13 of the contract of sale, the validity of which she disputed, and the plaintiff had elected not to exercise his right of pre-emption. Upon the plaintiff electing not to exercise his right of pre-emption he was not entitled to impose terms upon such non-exercise. The plaintiff's rights of pre-emption were extinguished and Ms Hall was entitled to the removal of the caveat to enable the transfer of Mr Lawton's interest in the land to her.
7 In her 2012 defence Ms Hall further pleaded as follows. The provisions of cl 13 of the contract of sale constituted a catching bargain and equitable fraud upon Ms Hall and an invalid restraint upon her rights of alienation of her interest in the land and should be set aside. Alternatively, if on the proper construction of events cl 14 of the contract of sale had been invoked, then cl 14 read with cl 15 constitutes a catching bargain, an equitable fraud and/or an invalid restraint upon Ms Hall's rights of alienation of her interest in the land and should be set aside. The actions of the plaintiff in attempting to rely upon cl 13, 14 and 15 of the contract of sale were unconscionable and the court should deny the plaintiff the right to do so.
8 In her counterclaim Ms Hall sought a declaration that cl 13, 14 and 15 of the contract of sale are unenforceable and should be set aside and that the caveat should be removed to enable the transfer of Mr Lawton's interest in the land to her. Ms Hall further pleaded that the plaintiff has interfered with her peaceful enjoyment and possession of the land. Further, Ms Hall sought an order pursuant to s 126(2) of the Property Law Act 1969 (WA) that the land be sold and the proceeds divided between the parties.
The further re-amended defence and counterclaim
9 On 3 September 2012 Ms Hall served on the plaintiff a minute of proposed further amended defence and counterclaim. By his solicitor's letter of 10 September 2012 the plaintiff objected to the proposed amendments. Amongst other things the plaintiff objected that [1] of the proposed amendment removed an admission that the contract was entered into. I will refer to that argument later. Ms Hall did not proceed with that proposed amendment. On 1 July 2013 Ms Hall filed a further amended defence and counterclaim dated 10 June 2013. On 28 August 2013 Ms Hall filed another further amended defence and counterclaim described as further re-amended defence and counterclaim and dated 14 August 2013. I will refer to that defence and counterclaim as the amended defence and counterclaim. It is the amendments in the amended defence and counterclaim which the plaintiff applies to disallow.
Amendments in outline
10 The case put by Ms Hall in her amended defence is essentially as follows. Under the caveat the plaintiff claims an interest in the land as optionee by virtue of an option to repurchase contained in cl 13 of the Written Contract. Ms Hall gave no notice under cl 13 and hence no option under cl 13 arose. Therefore, the plaintiff has no interest in the defendants' one-twentieth share in the land sufficient to support the caveat and the caveat should be removed.
11 The amended counterclaim is a more extensive and complex pleading. Its main features are as follows. Paragraph 21 pleads that the plaintiff and the defendants entered into a contract for the sale and purchase of the undivided one-twentieth share in the land which is described as the 'sale contract'. The pleading of the contract is awkward. The material fact pleaded is only that the plaintiff and defendants entered into a contract for the sale and purchase of the one-twentieth share. Particulars are given. The particulars are that the sale contract was partly oral and partly in writing, that the oral part is the oral agreement pleaded in [17] and the written part is the written agreement pleaded in [18], that is the Written Contract with the exception of the Plan. Further particulars state that in the alternative the sale contract is the written agreement with the exception of the Plan and the oral agreement is collateral to the sale contract. A further difficulty is that [21] pleads that the sale contract is partly oral and partly in writing but [22] pleads that the terms of the sale contract were partly express and partly implied. I take the defendants' case to be that the sale contract is partly oral, partly in writing and partly to be implied.
12 A further source of confusion is that [17] pleads an oral agreement, but in the course of argument counsel for Ms Hall, Mr Morison, explained that [17] is not intended to plead a contract. Mr Morison said that the oral agreement is an agreement between the parties in the sense of a consensus but is not itself a contract. Similarly, Mr Morison said that the written agreement pleaded in [18] is an agreement but not itself a contract. Paragraph [29] pleads that the written agreement, not the sale contract, be rectified by replacing the Plan with a plan that shows in green the Lawton Hall lot. The Lawton Hall lot is defined in [17], which pleads that the oral agreement between the plaintiff and the defendants which preceded the Written Contract (described in [18] as the 'written agreement'), and which together with the Written Contract with the exception of the Plan constitutes the sale contract. The Lawton Hall lot has different boundaries than the area coloured green on the Plan.
13 The implied terms and the pleaded breaches of the implied terms are as follows. The first implied term, the 'legal dwelling term', is that the plaintiff would do nothing to prevent the defendants lawfully building and maintaining a residence on the land and do all things necessary and desirable to ensure that they could do so. The plaintiff breached that implied term when in 1994 he applied to the Shire of Augusta Margaret River for planning approval and for a building licence to erect a dwelling on the land. The zoning of the land precluded the construction of more than two dwellings on the land. At the time the sale contract was entered into there was one residence on the land, that of the plaintiff. Subsequently, the defendants built a dwelling on the Lawton Hall lot but had not obtained a building licence and planning approval for the dwelling.
14 The second implied term, the 'subdivision term', is that the plaintiff would join in any application by the defendants for subdivision of the Lawton Hall lot or alternatively consent to any application by the defendants for subdivision of the Lawton Hall lot or not attach to the consent unreasonable conditions. Counsel explained that the subdivision term is intended to be a term that the plaintiff would join in any application by the defendants for subdivision of the land into two lots – the Lawton Hall lot and the remainder of the land. Furthermore, the defendants undivided one-twentieth share in the land would be converted to ownership of the fee simple in the subdivided Lawton Hall lot. In 1992 the defendants applied to subdivide the Lawton Hall lot, but in breach of the subdivision term the plaintiff refused to support or consent to the application except upon the unreasonable condition that he receive a share of any profit arising from the subdivision.
15 The third implied term, the 'tranquillity term', is that the plaintiff would do nothing on the land that would affect the peace and tranquillity of the Lawton Hall lot. The tranquillity term was breached by a number of acts over time, including clearing native bush, people using the driveway, attempting to remove water from Ms Hall's water tanks, constructing a third dwelling upon the land and unlawfully attempting to prevent the alienation of Mr Lawton's interest in the land to Ms Hall.
16 The fourth implied term is that the sum of $20,000 was fair market value for the one-twentieth share and the exclusive right to use and occupy the Lawton Hall lot ('fair price term') and the terms of the sale contract were fair, just and reasonable ('fair terms term'). This term was breached because the written agreement was unclear, unjust and unreasonable.
17 The fifth implied term, the 'transfer of joint tenancy term', is that the plaintiff would not unreasonably withhold his consent under cl 14 of the written agreement, would not attach any unreasonable conditions to his consent, and upon granting his consent would do all things necessary to secure registration of the relevant transfer of joint tenancy. This term was breached by the plaintiff refusing to remove the caveat to allow the transfer of the joint tenancy to be registered or by the plaintiff not consenting to the transfer of the joint tenancy to Ms Hall.
18 Ms Hall pleads that the plaintiff unconscientiously took advantage of Ms Hall's special disadvantage by causing her to agree to pay a sum for the one-twentieth share that was in excess of its fair market value and causing her to sign a written agreement, the terms of which were unfair, unjust and unreasonable. Ms Hall seeks a declaration and injunction preventing the plaintiff from exercising his rights under cl 6, 13, 14 and 15 of the written agreement. Alternatively, Ms Hall pleads that cl 6, 13, 14 and 15 of the written agreement are an invalid restraint upon her rights of alienation of her interest and the one-twentieth share and should be set aside.
19 Ms Hall pleads a breach of fiduciary duty by the plaintiff. The plaintiff is said to be in a fiduciary relationship with Ms Hall because he was the purchasing agent of the defendants by reason of the fact that he was a real estate agent who agreed to find a property for the defendant with certain stated characteristics and as their purchasing agent owed them a fiduciary duty to act in good faith toward and deal fairly with the defendants and not to allow his personal interest to conflict with their interests. Ms Hall pleads that in breach of his fiduciary duties the plaintiff failed to act in good faith towards the defendants and allowed his personal interest to conflict with his interest to them.
20 In [67] and [68] Ms Hall pleads that the plaintiff opted not to exercise his rights under cl 13 and those rights have expired. The reference to that pleading being in the alternative to [40], which pleads that in breach of the subdivision term the plaintiff refused to support or consent to the application except upon the unreasonable condition that he receive a share of any profit arising from the subdivision, appears to be an error.
21 Finally, Ms Hall seeks an order pursuant to s 126(2) of the Property Law Act 1969 (WA) that the whole of the land be sold and the net proceeds be divided between the plaintiff and Ms Hall in the proportion 19-twentieths and one-twentieth.
Plaintiff's objections
22 The plaintiff applies to disallow the amendments to the defence and counterclaim on a number of grounds. The first ground is that the amendments to the defence and counterclaim are not amendments but a substitution of one case for another and that O 21 r 3 does not apply to such a case. I do not accept that argument. Order 21 r 3(1) provides that a party may amend any of its pleadings, without the leave of the court, by filing its amended pleading not later than seven weeks before the date fixed for the start of the trial. The rule permits a defendant to amend her defence and counterclaim notwithstanding that the amendments are so extensive that they may be described as substituting one case for another. The extent of the amendments may be relevant to the discretion of the court to disallow the amendments but the amendments nevertheless fall within the rule.
23 The plaintiff's next objection is that the amendments withdraw an admission and the defendant has not made out good cause for allowing the amendment. The admission to which this objection refers is the admission in [1] of the 2012 defence and [2] of the statement of claim which pleads that the defendants, on 8 September 1983, pursuant to a Contract of Sale, purchased from the plaintiff a one-twentieth share of the land. Particulars to the paragraph state 'Contract of Sale dated 8 September 1983 between Plaintiff and First Defendants "(the Contract of Sale")'. In her amended defence and counterclaim, Ms Hall denies [2] of the statement of claim and alleges that the plaintiff and the defendants entered into the sale contract described in the defence, which is the contract partly in writing, partly oral and partly implied to which I have referred, or alternatively the written agreement without the Plan.
24 As a matter of substance the amended defence and counterclaim withdraws the admission that the contract for the sale and purchase of the one-twentieth undivided share in the land was by the Written Contract. The case advanced by the amended defence is that the contract is a contract partly in writing, partly oral and partly to be implied. Insofar as the contract is in writing it consists of the Written Contract without the Plan. Insofar as the contract is oral it consists of the oral agreement. Insofar as the contract is implied it consists of the implied terms pleaded in [24] to [28]. Ms Hall puts forward an alternative case that the contract consists of the Written Contract without the Plan and the oral agreement is collateral to the sale contract constituted by the Written Contract without the Plan. A difficulty with the alternative contract pleaded is that the Written Contract without the Plan is not an enforceable contract because it fails to identify the portion of the land of which the purchasers are entitled to exclusive use and occupation. The major amendment effected by the amended defence and counterclaim is to plead that the contract for the sale and purchase of the one-twentieth share of the land consists not of the Written Contract pleaded by the plaintiff and admitted by Ms Hall in her 2012 defence, but is the contract partly in writing, partly oral and partly implied pleaded in [21] of the amended defence or alternatively the Written Contract without the Plan.
Withdrawal of admission - legal principles
25 Where a defendant seeks leave to amend her defence so as to withdraw an admission, or to resist the disallowance of such an amendment, she has a heavier onus than normally falls on a party seeking to make an amendment, or resist the disallowance of an amendment. In Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212 at [19] the Court of Appeal said that the general principles to be applied upon an application to withdraw an admission in a pleading could, for the purposes of that case, sufficiently be stated as follows:
1. The court has a broad discretion to permit or refuse an amendment which has the effect of withdrawing an admission; the ultimate question must always be what is in the interests of justice in the circumstances of the case.
2. But it is a serious matter to make an admission in a pleading and ordinarily a party should not be permitted to withdraw an admission in a pleading without good cause.
3. In determining whether or not to permit an amendment to withdraw an admission, relevant considerations will generally include:
(a) the circumstances in which the admission was made;
(b) the reason it is sought to be withdrawn;
(c) the significance of the admission;
(d) the time for which it has stood on the record; and
(e) any prejudice that is likely to be suffered by the other side that cannot appropriately be compensated by an order for costs.
- That is a sufficient statement of the general principles for the purposes of this case.
26 In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 the plurality said in relation to an application for leave to amend a defence:
It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment [102].
Leave should be given to withdraw the admission
27 The explanation for the amendment is given by Ms Hall's solicitor, Mr McAuliffe, in his affidavit sworn 25 September 2013:
Following receipt of the brief, Mr Morrison, liaised extensively with me and the second named First Defendant, including discussions with the second named First Defendant to further refine her Proof of Evidence. Mr Morrison also consulted directly, and via myself with Mr McPhee, the solicitor for the Plaintiff. Following upon these consultations and discussions, Mr Morrison advised me that it would be appropriate that there be a further Amended Defence and Counterclaim.
On or about 3 September 2012, Mr Morrison provided a further proposed Amended Defence and Counterclaim. In the original Defence and Counterclaim paragraph 2 of the Plaintiff's Statement of Claim was admitted without further comment. In the document prepared by Mr Morrison, it is proposed that the second named first Defendant relies upon the written sale contract as pleaded in the Statement of Claim but adds oral and implied terms to it.
28 Mr McAuliffe's explanation is sparse but appears to be to the effect that upon Mr Morison being briefed as counsel, Mr Morison considered that the amended pleading was necessary. It also appears from the affidavits filed, including the affidavit of Ms Hall sworn 25 September 2013 in support of her application for an interlocutory injunction, that events have occurred since Ms Hall first filed her defence and counterclaim which have given rise to disputes other than the dispute which led to the plaintiff commencing this action. It is those further disputes which are, in part, sought to be agitated by the amendments to the defence and counterclaim.
29 The relevant delay in relation to the amendments is the delay between the defence of 12 January 2012 and the amended defence and counterclaim. That delay is not long relative to the time which has elapsed since the making of the agreement or agreements in 1983. The plaintiff has not identified any prejudice flowing from delay in making the amendments which cannot be compensated for by costs. In this case, the court's discretion should be exercised to allow the amendment by way of withdrawal of the admission.
30 Ms Hall should be given leave to amend her defence to withdraw the admission that the contract for the sale and purchase of the undivided share of the land is the Written Contract and to plead instead that the contract is a contract partly in writing, partly oral and partly to be implied. However, the court will not allow amendments which amend a pleading into a form which ought to be struck out. The court will not give leave to a party to make a defective amendment and will disallow amendments which are defective. The plaintiff says that in addition to the amended defence and counterclaim, withdrawing the admission in relation to the contract of sale and purchase the amendments are in any event defective.
Pleading of sale contract
31 The plaintiff says that the oral agreement pleaded in [17] of the counterclaim and incorporated into [21] of the counterclaim and [2] of the defence is inadequately pleaded in that it fails to give particulars as to the substance of the words spoken said to constitute the oral part of the agreement. In my view, the sale contract pleaded in [21] of the counterclaim and incorporated in [2] of the defence is inadequately pleaded. Paragraph 21 pleads that on or about 8 September 1983 at the Land the plaintiff and the defendants entered into a contract for the sale and purchase of the one-twentieth share for $20,000 ('sale contract'). Particulars are subjoined to the paragraph. The particulars say that the sale contract was partly oral and partly in writing, that the oral part of the sale contract is the oral agreement and the written part of the contract is the written agreement with the exception of the Plan.
32 Returning to [21], it is a pleading of a legal conclusion. A pleading must only contain a statement of the material facts. Nevertheless it is common practice to plead a conclusion of law if the material facts supporting it are pleaded. The material facts are pleaded in [17], [18] and [19]. Paragraph 17 pleads that the plaintiff orally agreed with Ms Hall and Mr Lawton, alternatively Mr Lawton on behalf of himself and Ms Hall the matters set out in subpars 17(a) to (e) which is there defined as the 'oral agreement'. That pleading is defective. It is a pleading of a legal conclusion. The defence and counterclaim must plead the material facts. The material facts include that a meeting took place, the date and place of the meeting and who attended and participated in the meeting. It is not clear from the introductory paragraph of [17] who it is alleged attended the meeting. Ms Hall is entitled to plead in the alternative but must make that clear. For example she may plead that the meeting was attended by the plaintiff, Ms Hall and Mr Lawton and then separately plead that in the alternative the meeting was attended by the plaintiff and Mr Lawton. However, [17] does not make clear who Ms Hall says attended the meeting. It merely pleads a legal conclusion about who were the parties to an agreement.
33 Furthermore, the paragraph should set out the effect or substance of what was said at the meeting. The paragraph pleads that the matters set out were 'orally agreed'. As I have said, counsel for Ms Hall, Mr Morison, stated that [17] is not intended to plead that a contract was made. It appears that [17] is not intended to be a pleading of the legal conclusion that an agreement or contract was made but fails to disclose what material facts are said to give rise to or constituted the 'oral agreement'. Paragraph 17 fails to plead the effect or substance of what was said. Ms Hall's case might be that the plaintiff said that he was willing to sell and one or other of the defendants said that they were willing to buy a one-twentieth undivided share of the land for $20,000 on the terms set out in [17]. Or the plaintiff may have said that he was willing to sell and one or both of the defendants said that they were willing to buy a one-twentieth undivided share for $20,000 and they would draw up a written contract. Or the plaintiff and one or other of the defendants may have said something else. The way in which [17] is pleaded is embarrassing.
34 The embarrassment is extenuated by [4(b)] of the particulars subjoined to [21]. The particulars plead that in the alternative to the sale contract being partly oral and partly in writing as pleaded in [21], the sale agreement is the written agreement with the exception of the Plan, and the oral agreement is collateral to the sale contract. That alternative pleading makes it important that the prior oral collateral contract be identified. But counsel for Ms Hall stated in argument that the oral agreement pleaded in [17] is not the pleading of a contract. The pleading is embarrassing.
35 An additional point is that the alternative sale contract and collateral contract pleaded in the particulars to [21] set up an alternative case. Those matters are material facts and should be separately pleaded, not included in particulars to [21].
36 The matter becomes more confusing when the reader reaches [22]. That pleads that the terms of the sale contract were partly express and partly implied. The implied terms are pleaded in [24] to [28]. The plaintiff attacks some of those pleadings. I will briefly consider the pleaded implied terms.
Implied terms
37 Each of [24], [25], [26], [27] and [28] plead implied terms of the sale contract and in the alternative of the collateral contract. A collateral contract is a contract made in consideration of agreeing to enter into the principal or main contract which sets out additional terms relating to the same subject matter as the main contract. The collateral contract pleaded by Ms Hall cannot have implied terms.
38 The plaintiff submits that the pleaded implied terms cannot be implied terms of the sale contract. The plaintiff says that the first implied term, the 'legal dwelling term', is inconsistent with the express term of the Written Contract, which Ms Hall says is the written part of the sale contract, which provides that the vendor and purchaser shall each be entitled to the exclusive occupation and use of an area of the land and that each shall be entitled to erect improvements on their exclusive use portion of the land. Ms Hall says that the plaintiff breached the implied term by erecting a dwelling on the land. In my view the legal dwelling term is inconsistent with the express terms of the Written Contract and is not maintainable.
39 The second implied term is the 'subdivision term'. In my view the subdivision term is inconsistent with the written terms of the sale contract pleaded by Ms Hall. The essence of the sale contract is the sale of an undivided share of the land. Furthermore, by cl 6 the purchasers agreed that the plaintiff shall be entitled to mortgage the whole of the land including the purchasers undivided one-twentieth share.
40 The third implied term is the 'tranquillity term'. The plaintiff says that that implied term is inconsistent with the written terms of the sale contract which provides that the plaintiff shall be entitled to the exclusive occupation and use of his designated portion of the land. I am not prepared at the interlocutory stage to say that the implied tranquillity term is necessarily inconsistent with the written terms of the sale contract. The content of the tranquillity term alleged by Ms Hall should be considered in light of the acts of the plaintiff which Ms Hall pleads constitute a breach of that term. It is not necessarily inconsistent with the plaintiff having exclusive occupation and use of the designated portion of the land that he should do nothing on the land that would affect the peace and tranquillity of the purchasers designated exclusive use area.
41 The fourth implied term is the 'fair price term' and the 'fair terms term'. That term is inconsistent with the written terms of the sale contract which provide that the plaintiff shall sell and the defendants shall buy an undivided one-twentieth share of the land for $20,000.
42 The fifth implied term is the 'transfer of joint tenancy term'. It is not unarguable that such a term may be implied.
Rectification plea
43 Paragraph 29 pleads that '[t]he written agreement must be rectified by replacing the Plan with a plan that shows in green the Lawton Hall Lot'. In my view, this is embarrassing. Counsel for Ms Hall said in argument that the 'written agreement' is not pleaded as a contract but as an element in the sale contract. The defence does not make clear what is the contract sought to be rectified and what concluded agreement is said to have preceded that contract and on what basis it should be rectified.
Conclusion
44 The court will not give leave to amend a pleading into a defective form. Similarly, amendments to a pleading which render it defective should be disallowed. The amended defence is confusing and fails in a number of respects to disclose to the plaintiff and the court what Ms Hall's case is. Some of the pleading is untenable. The amendments to the amended defence will be disallowed.
45 I find that the amended defence is defective in form. However, Ms Hall may be able to plead that the contract between the plaintiff and the defendants consists not only of the Written Contract but is an agreement partly oral, and partly written or partly oral, partly written and partly to be implied. I will give Ms Hall leave to file and serve a minute of proposed amended defence and counterclaim and to move to amend the defence and counterclaim in terms of that minute.
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