West Coolgardie Holdings Pty Ltd v Mercanti [No 2]
[2016] WADC 123
•24 AUGUST 2016
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: WEST COOLGARDIE HOLDINGS PTY LTD -v- MERCANTI [No 2] [2016] WADC 123
CORAM: STAUDE DCJ
HEARD: 1 AUGUST 2016
DELIVERED : 24 AUGUST 2016
FILE NO/S: CIV 2126 of 2015
BETWEEN: WEST COOLGARDIE HOLDINGS PTY LTD
Plaintiff
AND
TYRONE KANE MERCANTI
First DefendantPEZZANOVANTA RESOURCES PTY LTD
Second Defendant
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :PRINCIPAL REGISTRAR MELVILLE
Citation :[2016] WADC 46
Catchwords:
Appeal from registrar's decision - Application for summary judgment - Action in tort for trespass - Whether there is a triable issue - Whether plaintiff in possession of premises at material time - Turns on own facts
Legislation:
Nil
Result:
Appeal dismissed
Application for summary judgment refused
Leave to defend granted
Representation:
Counsel:
Plaintiff: Mr M S Macdonald
First Defendant : Mr G Metaxas
Second Defendant : Mr G Metaxas
Solicitors:
Plaintiff: Macdonald Rudder
First Defendant : Metaxas & Hager
Second Defendant : Metaxas & Hager
Case(s) referred to in judgment(s):
Bankstown Airport Ltd v Noor Al Houda Islamic College Pty Ltd [2002] NSWSC 193
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
Esperance Cattle Company Pty Ltd v Granite Hill Pty Ltd [2014] WASC 279
Fancourt v Mercantile Credits Limited (1983) 154 CLR 87
Plenty v Dillon [1991] HCA 5; (1991) 171 CLR 635
Port of Melbourne Authority v Anschun Pty Ltd (1981) 147 CLR 589
STAUDE DCJ:
Introduction
The plaintiff appeals the decision of the learned principal registrar on 31 March 2016 refusing an application for summary judgment against the first defendant. The appeal requires a fresh hearing of the application. It is not necessary to show error at first instance.
The claim
The statement of claim pleads an action for damages for trespass as follows.
The plaintiff is the registered proprietor of commercial premises in O'Connor (the premises). The premises were leased to Deliver Western Australia Pty Ltd (Deliver). The first defendant was employed by Deliver and held himself out to the plaintiff as an agent of Deliver.
Deliver breached the lease of the premises by failing to pay rent and outgoings. The lease was terminated on 16 January 2015. On 17 February 2015 the plaintiff re-entered the premises and took possession.
At that time, and from early November 2014, unbeknownst to the plaintiff, Deliver had sold its business to the second defendant and gave it possession of the premises (contrary to the terms of the lease). The first defendant was at all material times the sole director and company secretary of the second defendant.
After the plaintiff had re-entered the premises the defendants (the second defendant at the direction of the first defendant) took possession of the premises.
In the belief that Deliver remained in possession, the plaintiff brought proceedings against it in the Supreme Court. It is common cause that on 17 March 2015 the plaintiff obtained an order for possession.
The plaintiff's claim against the defendants is for damages for trespass from 17 February 2015 to 25 March 2015, being the legal costs associated with Supreme Court proceedings against Deliver, loss of rent and outgoings and the costs of attempting to retake possession of the premises.
The plaintiff also claims exemplary and aggravated damages against the defendants on the grounds that their conduct was 'malicious, insolent and high‑handed or contumelious of the plaintiff's rights'. (Counsel for the plaintiff formally conceded at the hearing that the plaintiff would waive its claim for such damages should the court be of the view that they could not be awarded without a trial).
For ease of reference I annex a copy of the plaintiff's statement of claim filed 7 July 2015.
Defence
There is a joint defence dated 21 August 2015 filed on behalf of the defendants. The defendants admit that the first defendant was at all material times a servant of Deliver and that Deliver agreed to sell its business to the second defendant. It is further pleaded that the premises were at all material times in the possession of and under the control of Deliver and that the first defendant's actions were taken by him as a servant and at the direction of Deliver.
Essentially, the defence is that the premises were in the possession of Deliver as tenant pursuant to the lease. The defendants deny that the plaintiff obtained possession on 17 February 2015 and say that the actions of the first defendant complained of by the plaintiff were taken in his capacity as an employee of Deliver. There was no wrongful entry by either defendant.
Application for summary judgment
The application is brought against the first defendant. It is supported by an affidavit of Aidan Gale Keogh sworn 24 September 2015. Mr Keogh is a director of the plaintiff. He states that summary judgment is not sought against the second defendant because it is conceded that there is ‘a triable issue of fact as to whether the second defendant was in possession of the premises as defined in the statement of claim'.
Procedure
Summary judgment is available on the application of a plaintiff pursuant to O 14 of the Rules of the Supreme Court 1971. Order 14 r 1(1) permits an application for summary judgment to be made within 21 days of an appearance or any later time by leave of the court.
Order 14 r 2(1) provides:
An application under rule 1 shall be made by summons supported by an affidavit verifying the facts on which the claim or the part of the claim to which the application relates is based, and stating that in the deponent's belief there is no defence to the claim or part thereof, as the case may be, or no defence except as to the amount of any damages claimed.
Order 14 r 3(1) provides:
On the hearing of an application under rule 1 unless the court dismisses the application, or the defendant satisfies the court with respect to the claim, or the part of the claim, to which the application relates that there is an issue or question in dispute which ought to be tried, or that there ought for some other reason to be a trial of that claim or part, the court may give such judgment for the plaintiff against the defendant on that claim or part thereof as may be just, having regard to the nature of the remedy or relief claimed.
The plaintiff's application requires an extension of time. The delay is explained by the correspondence annexed to the affidavit of Jeremy Thomas London, affirmed 9 December 2015, which indicates that the parties were in conferral up to the date of the application. The first defendant does not press any objection to a grant of leave. The extension of time is granted.
The fundamental principles are well-established. The applicant for summary judgment assumes the burden of persuading the court that the claim is a good one, that there is no defence to it, that leave to defend should not therefore be granted, and that judgment should be given for the plaintiff. The party showing cause against the application assumes an evidentiary burden by that process, but the overall legal burden of persuasion remains upon the applicant: Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18, 23. The power to order summary judgment will be exercised with great care and will not be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Limited (1983) 154 CLR 87, 99.
Affidavit in support
On the plaintiff's behalf it is submitted that Mr Keogh has deposed appropriately to the sources of his information and beliefs as to some facts and otherwise to facts within Mr Keogh's knowledge. The first defendant contends that the affidavit is defective. The first defendant objects to the admissibility of parts of the affidavit of Mr Keogh as follows:
1.Paragraphs 6, 7 and 8 because the deponent fails to set out the grounds for his belief;
2.Paragraph 11 is a conclusion devoid of material facts;
3.Paragraph 12 is a conclusion devoid of material facts;
4.Paragraph 13:
(a)the first sentence is a conclusion devoid of material facts;
(b)the second sentence is an opinion; and
(c)the documents produced in the third sentence are hearsay.
The paragraphs of the affidavit objected to are as follows:
6.Of my knowledge the facts set out in paragraph 1, paragraphs 3 to 7 both inclusive and paragraph 11 of the Statement of Claim are true.
7.Knight Frank Australia Pty Ltd is and has at all material times being [sic] the agent of the Plaintiff for the purpose of managing the premises. I am informed by Joyce Bacich of Knight Frank and believe that the facts set out in paragraphs 8 and 9 of the Statement of Claim are true.
8.I am informed by the Plaintiff's lawyer David Griffith Lang of McDonald Rudder Lawyers and believe that the facts set out in paragraph 10 of the Statement of Claim are true (with the exception that the reference to a letter dated 16 January 2015 should have read 16 February 2015).
…
11.The First Defendant occupied the Premises to the exclusion of the Plaintiff from and including on or about 17 February 2015 to and until 25 March 2015.
12.The First Defendant did not at any time after 17 February 2015 have authority from the Plaintiff to enter or remain on the Premises.
13.From the time the Plaintiff took possession on 27 February 2015 I believed that the First Defendant occupied the Premises as agent of the Tenant. This belief was based on four emails from the First Defendant to Knight Frank referred to in paragraph 3 of the Statement of Claim, copies of which I attach hereto and marked AGK4. They are as follows:
(a)Email from the First Defendant to Knight Frank dated 7 January 2015;
(b)Email from the First Defendant to Knight Frank dated 12 January 2015;
(c)Email from the First Defendant to Knight Frank dated 21 January 2015; and
(d)Email from the First Defendant to Knight Frank dated 28 January 2015.
It is unnecessary for a plaintiff to adduce proof of its claim in order to ground an application for summary judgment. The rules are clear. The application must be supported by an affidavit verifying the facts on which the claim is based and the deponent's belief that there is no defence to the claim. Order 14 rule 2 specifically provides that an affidavit may contain 'statements of information and belief with the sources and grounds thereof'.
In my view Mr Keogh as a director of the plaintiff was able to depose of his own knowledge to the facts of the incorporation of the plaintiff, its ownership of the premises, the lease and the events in which he was a participant on 17 February 2015. He was able to depose to the breach of the lease on the basis of information from the managing agent and to the termination on the basis of information provided by his lawyer. Paragraphs 11and 12 merely state that the plaintiff's contention that the first defendant occupied the premises without the plaintiff's consent for a certain period, and par 13 simply sets out the basis of the plaintiff's belief at the material time that Deliver was the occupant.
I overrule the objections to the affidavit.
Affidavit of the first defendant
Mr Mercanti has sworn an affidavit in opposition to the application.
He deposes that he is the sole director and shareholder of the second defendant. In June 2014 he was employed by Deliver as its financial controller, but was not an officer or member of that company. In the course of his duties he was instructed by the then sole director of Deliver, Pasquale Forgione, to deal with the plaintiff's agent Knight Frank with respect to the lease of the premises. There was a meeting at the premises on 21 August 2014 attended by representatives of Knight Frank and the plaintiff at which he was introduced as the financial controller of Deliver.
He deposes to email correspondence between him and Mr Keogh and Ms Bacich of Knight Frank with respect to the lease of the premises. He states that the second defendant was incorporated on 2 September 2013, but did not trade until October 2014 when it was awarded a freight transport contract. Between November 2014 and February 2015 he negotiated with Deliver as to the terms of an agreement between Deliver and the second defendant. Relevant email correspondence is annexed to the affidavit (TKM4).
An agreement was executed on 22 February 2015 (TKM5). The second defendant agreed to purchase from Deliver a client list, plant and equipment leases, computers, office furniture, shelving and racking units and telephone numbers. The second defendant made no agreement with Deliver in relation to the lease.
As to the events of 17 February 2015, Mr Mercanti deposes that he witnessed Mr Keogh and one Chris Daws attend the premises and place a notice on the reception desk indicating that the plaintiff was taking possession.
Mr Mercanti then deposes to a conversation with Mr Daws in which he (Mr Mercanti), having been informed that possession was being taken of the premises, responded 'You cannot do that. You need a court order'. Mr Mercanti states that he then removed a notice from the front door of the premises and warned Mr Daws not to touch him. He observed Mr Daws to lock the gates of the premises and to park his car in the driveway to prevent any of Deliver's trucks from entering the premises.
Mr Mercanti states that he then asked Mr Darren Simmons of Deliver to call the police. Subsequently the plaintiff's representatives left. The affidavit effectively contradicts the plaintiff's contention that it obtained possession on 17 February 2015.
Furthermore, Mr Mercanti deposes to Deliver's acknowledgment of the termination of the lease by email of 17 February 2015 and the plaintiff's subsequent commencement of Supreme Court proceedings on 19 February 2015 which resulted in an order for possession. According to Mr Mercanti, Deliver vacated the premises on 17 March 2015, in accordance with the order and at the direction of its administrators who were appointed on 11 March 2015.
Is there an issue to be tried?
In my view the affidavit of Mr Mercanti discloses mixed issues of law and fact that can only be resolved by a trial.
It is an element of the tort of trespass that the defendant entered the property without the consent of the occupier: Plenty v Dillon [1991] HCA 5; (1991) 171 CLR 635. There is clearly an issue as to whether the plaintiff was in possession of the premises on 17 February 2015.
On Mr Mercanti's account there was an attempt by the plaintiff to re‑take possession which he thwarted, resulting in the plaintiff's subsequent Supreme Court action for an order for possession against Deliver. Arguably, at least, the occupier at the material time was Deliver, as the plaintiff believed when the order was sought. According to Mr Mercanti, there was no sale of Deliver's business to the second defendant until 22 February 2015. There was no agreement with respect to taking over the lease.
The plaintiff must be able to show that it had obtained legal possession: Esperance Cattle Company Pty Ltd v Granite Hill Pty Ltd & Ors [2014] WASC 279 [445] (Martin CJ); Hampton v BHP Billiton Minerals Pty Ltd [2011] WASC 2012, [271]-[273], [300] (Edelman J). The commencement of an action for possession on 19 February 2015 suggests that the plaintiff did not have legal or actual possession at that time.
Whether the judgment against Deliver precludes a further action against the first defendant may be seen as a discrete question of law, but I rather think it is tied up with the conduct of the parties and the capacity in which Mr Mercanti was acting, such that it would in itself constitute a good reason for a trial. The first defendant has raised an issue estoppel (in the nature of an Anschun estoppel: Port of Melbourne Authority v Anschun Pty Ltd (1981) 147 CLR 589) as to the fact of the occupation of the premises by Deliver at the material time, and also contends that this further action against the defendants is an abuse of process as it involves re-litigating issues that have been decided.
In line with Anschun, if the plaintiff contends the first defendant is personally liable for trespass on the basis that he was the servant or agent of Deliver, then it is arguable that he should have been joined in the Supreme Court action and that the plaintiff is estopped.
In any event, there is authority for the proposition that occupation by a servant is occupation by the master (Bankstown Airport Ltd v Noor Al Houda Islamic College Pty Ltd [2002] NSWSC 193 [65] (Young CJ in Eq, and the authority there cited) and it would seem to follow, or is at least arguable, in the circumstances of this case that if there were a trespass, it was singular such that there is only one cause of action.
On the evidence before me it seems unlikely that the Supreme Court judgment involved any factual determination as to who was in occupation of the premises, but against the background of disputed facts the court is disinclined to attempt to determine the issue estoppel, Anschun estoppel and abuse of process questions discretely, making it appropriate that the action be tried.
I appreciate, of course, that the plaintiff has made submissions based on a joint occupancy scenario that the action against the first defendant as a joint tortfeasor is not precluded by the judgment against Deliver, but whether there was or could be, as a matter of fact and law, a joint occupancy such that relief is obtainable against both the defendants, or either of them, and Deliver, remains an issue.
Conclusion
For these reasons I would dismiss the appeal. The plaintiff's application for summary judgment against the first defendant is dismissed. The first defendant has leave to defend.
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