Warrigal Developments Pty Ltd v Midstyle Nominees Pty Ltd
[2013] WASC 19
WARRIGAL DEVELOPMENTS PTY LTD -v- MIDSTYLE NOMINEES PTY LTD [2013] WASC 19
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASC 19 | |
| Case No: | COR:166/2012 | 16 JANUARY 2013 | |
| Coram: | MASTER SANDERSON | 30/01/13 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | WARRIGAL DEVELOPMENTS PTY LTD MIDSTYLE NOMINEES PTY LTD |
Catchwords: | Corporation law Application to set aside statutory demand Turns on own facts |
Legislation: | Nil |
Case References: | Harvey Fields Private Estates Pty Ltd v 33 Malcolm Street Pty Ltd [2012] WASC 218 Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MIDSTYLE NOMINEES PTY LTD
Defendant
Catchwords:
Corporation law - Application to set aside statutory demand - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr C S Williams
Defendant : Mr K J Mony De Kerloy
Solicitors:
Plaintiff : Solomon Brothers
Defendant : Herbert Smith Freehills
Case(s) referred to in judgment(s):
Harvey Fields Private Estates Pty Ltd v 33 Malcolm Street Pty Ltd [2012] WASC 218
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
(Page 3)
1 MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand. The plaintiff makes the application on two grounds. First it says there is a genuine dispute as to the alleged debt. Second it says it has an off-setting claim greater than the alleged debt. There is no real dispute between the parties as to the relevant facts. They are found in two affidavits. The first is an affidavit of Roger William Whalan sworn 18 October 2012 and filed in support of the application. The second is an affidavit of Nicholas John Allingame sworn 9 November 2012 and filed in opposition to the application. What follows is a summary taken from both of these affidavits.
2 The defendant developed and marketed a block of apartments known as 'Aqueous Apartments' located in Mandurah. The plaintiff is a company that makes property investments including developing, marketing and selling strata lots. At all material times Mr Whalan was the sole director of the plaintiff. Mr Whalan is a businessman with extensive experience in the property market both as a real estate agent and property investor.
3 The defendant and the plaintiff entered into a contract for the sale of land or strata title by offer and acceptance dated 10 June 2006 in respect of Apartment 19 (lot 7) of the Aqueous Apartments. This is referred to throughout the document as the 'first contract'. Some two years later the first contract was terminated by the plaintiff with the defendant's consent. The defendant and the plaintiff then entered into a contract for the sale of land or strata title by offer and acceptance dated 17 March 2008 in respect of Apartment 21 (lot 9) of the Aqueous Apartments. This is referred to as the 'second contract'.
4 The second contract contained a schedule which stated that the unit entitlement for Apartment 21 was 212 units of a possible 10,000 units. A year or so later the defendant lodged the strata plan for the Aqueous Apartments with Landgate. The strata plan was registered on 10 September 2009. The strata plan contained a schedule which stated that the unit entitlement for Apartment 21 was 212 units of a possible 10,000 units. The schedule was signed by a Mr Matthew Stacy.
5 In early November 2009 the plaintiff was obliged to settle on Apartment 21 but failed to do so. The defendant commenced proceedings in the Supreme Court of Western Australia on or about July 2010. It claimed damages resulting from the plaintiff's failure to settle on Apartment 21. In defence of the proceedings the present plaintiff alleged a number of things. First it was said the defendant had not procured a valid 'Certificate of Practical Completion' and therefore the plaintiff was
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- not obliged to settle. Further, and in the alternative, the present plaintiff alleged the present defendant had made misleading and deceptive representations regarding the completion date for stage one and stage two of the Aqueous Apartments.
6 The defendant and the plaintiff settled the proceedings and entered into three separate deeds. First, there was a deed of release dated 12 May 2011. Second, there was a contract for the sale of land or strata title by offer and acceptance dated 12 May 2011 in respect of Apartment 21. This is referred to as the 'third contract'. There was also a side deed dated 12 May 2011 entered into by the parties.
7 In essence under the settlement the defendant agreed to discontinue the proceedings and the plaintiff agreed to discontinue its counterclaim. This was to be put into effect by the signing and filing with the Supreme Court of a minute of consent orders. The plaintiff agreed to enter into the third contract and to settle on the third contract on 1 June 2011. The defendant agreed to defer the payment of the purchase price of Apartment 21 - in effect providing vendor finance. The deposit paid by the plaintiff under the second contract (being $157,000) would be applied towards the purchase price of Apartment 21 on the settlement date. The defendant waived its right to claim default interest under the second contract. The plaintiff would repay the purchase price of Apartment 21 in accordance with the repayment schedule contained in the side deed.
8 On the settlement date the parties signed the minute of consent orders. The Supreme Court made orders discontinuing the proceedings on or about 7 July 2011. The plaintiff signed the transfer form and became the registered proprietor of Apartment 21. This transfer was registered on 3 June 2011. On the same day the transfer form was signed the defendant applied the deposit of $157,000 towards the purchase price.
9 Under the side deed the next instalment of the purchase price of $112,052.95 was due to be paid by the plaintiff on 1 June 2012. The plaintiff failed to make that payment. The defendant abstained from enforcing the side deed and entered into discussions with Mr Whalan regarding a revised deferred payment schedule. On 16 August 2012 the defendant and the plaintiff entered into a variation deed which among other things afforded the plaintiff more time to pay the purchase price for the apartment. The first payment of the deferred purchase price was due under the side deed (as amended by the variation) on 5 September 2012. On 3 September 2012 Mr Allingame contacted Mr Whalan regarding the payment. On 14 September 2012 Mr Whalan advised Mr Allingame by
(Page 5)
- email payment would be made 'probably early next week'. In fact no payments were made. This is the case with respect to $112,052.95 which was due on 5 September 2012 and in relation to a further sum of $28,013.24 due on 15 September 2012.
10 It is convenient first to deal with the plaintiff's claim the demand ought be set aside 'for some other reason' under s 459J of the Corporations Act 2001 (Cth). The plaintiff says the affidavit accompanying the statutory demand is defective. The authorised witness has not signed the first page of the affidavit. The plaintiff says the affidavit does not comply with the Oaths Affidavits and Statutory Declarations Act 2005 (WA) (the OASD Act) meaning there is in effect no affidavit accompanying the statutory demand. This it is said is sufficient to set the demand aside.
11 It is the case the defendant has failed to comply with the requirements of s 9(5)(b) of the OASD Act. Prima facie the affidavit is defective. But s 16(2) of the OASD Act is in the following terms:
The validity of an oath, affirmation, affidavit or statutory declaration is not affected by the fact that the required procedure for taking or making it is not followed exactly as long as the procedure actually followed substantially complies with the required procedure.
12 In my view there has in this case been substantial compliance with the requirements of the OASD Act. There is no suggestion the deponent was not aware of his duty to state matters honestly. There appears to have been an oversight - nothing more. To uphold the plaintiff's objection would be to adopt an altogether too technical approach to what is intended to be a simple and straightforward procedure.
13 Turning then to the genuine dispute the plaintiff puts the position as follows. On 17 March 2008 in accordance with s 69A(c) of the Strata Titles Act 1985 (WA) the plaintiff was provided with a schedule specifying the proposed unit entitlement of every lot within the scheme and the proposed aggregate unit entitlement in the second contract. Under s 69C of the Strata Titles Act the vendor under a contract to sell a lot or proposed lot is obliged by notice in writing given to the purchase to inform the purchase of full particulars of any 'notifiable variation'. Under s 69C(3)(d) a notable variation occurs if the unit entitlement of any lot or the aggregate unit entitlement is not the same as the unit entitlement or proposed unit entitlement or the aggregate unit entitlement or proposed aggregate unit entitlement as the case may be that was specified under s 69A(c).
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14 If the unit entitlement of any lot or the aggregate unit entitlement is not the same as that notified pursuant to s 69 this constitutes a 'notifiable variation' full particulars of which must be given by the vendor to the purchaser in writing. The purchaser then has a right of termination, condition by a need for the purchaser to have been materially prejudiced by the variation if the written particulars were duly provided. Variations in unit entitlements can readily materially prejudice a purchaser: see Harvey Fields Private Estates Pty Ltd v 33 Malcolm Street Pty Ltd [2012] WASC 218 [81] - [145].
15 The plaintiff did not receive any notice. In fact as I indicated above the certificate signed by Mr Stacy and lodged with Landgate indicated the plaintiff would receive precisely the same entitlement as it had when the contract was entered into. The plaintiff now says there is reason to believe its unit entitlement is not as specified in the certificate and it should have been provided with notice of the variation. Before dealing with the basis upon which the plaintiff says there is doubt about its entitlement it is appropriate to set out the plaintiff's argument as to why this gives rise to a genuine dispute.
16 Unbeknown to the plaintiff at the time he signed the certificate Mr Stacy was an employee of Pindan Pty Ltd. That company was the development manager for Aqueous Apartments. The plaintiff alleges Mr Stacy was not an independent valuer. Moreover if the valuation was negligent the plaintiff says Mr Stacy is properly regarded as an agent of the defendant. So the defendant would be vicariously liable for the negligence. That it is said gives rise to a serious question to be tried and there is a genuine dispute between the parties.
17 The evidence the defendant relies upon in submitting its unit entitlement may be less than it was advised is a valuation report prepared by Propell. A copy of the report appears as Annexure RWW14 to the affidavit of Mr Whalan. It would seem this report was prepared on or about 2 October 2009. It would seem it was prepared either for or at the request of the Westpac Banking Corporation. In any event the authors of the report also valued a number of other apartments in the Aqueous Apartments. They then prepared a schedule of what he anticipated each unit entitlement would be. That schedule appears as Annexure RWW15 to Mr Whalan's affidavit. What it shows is the entitlement of Apartment 21 is to 101 units rather than the amount specified in Mr Stacy's certificate.
(Page 7)
18 Mr Whalan puts this evidence in context in par 40 of his affidavit. It is in the following terms:
When I caused the plaintiff to execute the Deed of Settlement, the Third Contract and the Side Deed, I believed that the reason why the unit entitlement for Apartment 21 had not changed when the Strata Plan was registered was because the proportions that the values that each of the Lots had to the aggregate value of all Lots had not changed by more than 5%. I did not know that the valuer who certified the schedule of unit entitlements was an employee of Pindan Property Group. Had I known that there had been changes in the value of the Lots relative to each other, and that the valuer who certified the schedule of the unit entitlements was an employee of Pindan Property Group, I would not have caused the plaintiff to execute these documents.
19 On behalf of the defendant it is said under s 14(3) of the Strata Titles Act and s 10(2) of the Strata Titles General Regulations 1996 (WA) a certificate given by a licensed valuer for the purposes of the Strata Titles Act is valid for a period of two years (except where a strata plan is registered). Where a strata plan is registered the certificate is valid on and from the date of registration of the strata plan until the unit entitlement of the scheme is reallocated or amended. The defendant says the effect of these provisions is the certificate is valid for all purposes and the validity cannot be impinged.
20 Further, the defendant says the plaintiff has not put forward any admissible relevant or cogent evidence which impinges the validity of Mr Stacy's certificate. The original schedule specifying the proposed unit entitlement of every lot within the scheme and the proposed aggregate unit entitlement was provided to the plaintiff on 17 March 2008. Mr Stacy's certificate is dated 6 July 2009. There is no evidence at all that between 17 March 2008 and 6 July 2009 there were changes in the value of the lots greater than or less than 5% of the aggregate value of all lots. In order for any of the plaintiff's contentions to be sustained there must be at least some evidence the certificate was wrong. There is no such evidence.
21 Finally the defendant says any claim by the plaintiff in relation to the issue of the lots would be an abuse of process. The defendant says all the facts, matters and causes of defence the plaintiff raises could have been raised in the Supreme Court proceedings. The contentions now sought to be raised by the plaintiff were all valid defences to the defendant's claim in the proceedings. They were so closely associated with the subject matter of the proceedings that it was to be expected that they would be relied upon as defences to the defendant's claim. Further the plaintiff
(Page 8)
- signed a deed of release the terms of which preclude it from taking the sort of action it now says amounts to a genuine dispute. There arises a so-called Anshun estoppel: see Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589.
22 In my view all of the defendant's submissions should be accepted. By virtue of registration of the strata plan with the certificate signed by Mr Stacy the plaintiff's position is protected. It has the statutory protection of the Strata Titles Act. Whether or not there was a variation is not to the point. Mr Stacy said there was not, the strata plan has been registered and that is the end of the matter. Further, there is no evidence Mr Stacy was wrong. The certificate was signed in July 2009. The evidence the plaintiff relies upon dates from October 2009. There is not sufficient correlation between the date of the certificate and the date of the evidence provided by the plaintiff.
23 But perhaps most tellingly there is the deed of release. The plaintiff settled its differences over the apartment with the defendant. Mr Whalan is an experienced businessman and he was represented at the time by competent solicitors. It would seem the settlement negotiations involved a good deal of give and take - not uncommon when actions are settled. But when a settlement is concluded the rights of the parties are exhausted. Counsel for the plaintiff attempted to argue the terms of the deed of release were limited so that the matters raised with respect to the unit entitlement could still be argued. In my view there is no merit in that submission. All issues between the parties were resolved and the finality of that resolution ought be recognised.
24 The plaintiff also argued based upon the facts and the unit entitlement that there was some form of unconscionable conduct or a claim under the Australian consumer law Competition and Consumer Act 2010 (Cth) which constituted a genuine dispute between the parties. In my view there is no such claim or claims available. Essentially the same arguments apply - the settlement being conclusive.
25 That then leaves the off-setting claim. As I understand the plaintiff's position the argument is this. The purchase price of Apartment 21 was $1.35 million. According to the valuation by Propell the apartment is in fact worth around $900,000. That would leave the plaintiff with a claim against the defendant for an amount of $450,000. The plaintiff says it should not have to make any payments under the variation agreement until the payments it is liable to make total more than $450,000. It was
(Page 9)
- conceded however that at a bare minimum the plaintiff would actually have to pay $900,000 for the apartment.
26 The flaws in this argument are obvious. First it depends for its validity on there being some form of claim available to the plaintiff against the defendant. For reasons which I have outlined above I am not satisfied there is any such claim available. Furthermore there is no reason why even if the full extent of the plaintiff's liability to the defendant was $750,000 the plaintiff should not be liable to make regular payments until that figure is reached. Nothing in the documents supports such a position. In my view there is no merit in this aspect of the plaintiff's argument.
27 For these reasons I would dismiss the application to set aside the statutory demand. The plaintiff should pay the defendant's costs of the application including the reserved costs.
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