Ziegler v Piva
[2004] VSC 453
•11 November 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6335 of 2003
| ANDREA PATRICIA ZIEGLER | Plaintiff |
| And | |
| SANDRA PIVA | First Defendant |
| And | |
| WALLACE STUART CAMERON | Second Defendant |
| And | |
| KAY & BURTON PTY LTD (ACN) 005 488 175) | Third Defendant |
| And | |
| MICHAEL DAVID GIBSON | Third Party |
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JUDGE: | Morris J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 October 2004 | |
DATE OF JUDGMENT: | 11 November 2004 | |
CASE MAY BE CITED AS: | Ziegler v Piva & Ors | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 453 | |
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | No appearance | |
| For the First and Second Defendants | Dr Cliff Pannam Q.C. and Mr I. Williams | |
| For the Third Defendant and Third Party | Mr P. Riordan Q.C. and Mr D. Bennett |
HIS HONOUR:
The third defendant (Kay & Burton Pty Ltd) and the third party (Michael David Gibson) (who I will refer to as “the agents”) have applied to the Court, pursuant to Rules 21.01 and 23.02 of the Rules of Civil Procedure, that the third party proceeding brought by the first and the second defendants against the agents be dismissed or, alternatively, that the relevant statement of claim be struck out. The application is effectively brought on the basis that the statement of claim does not disclose a cause of action.
It is necessary to paint the picture which sets the context of the application.
Summary of Facts
On 3 April 2003 Sandra Piva executed an unconditional contract of sale to purchase land at 743 Orrong Road, Toorak for $7,100,000. On that day Piva handed the contract, together with a cheque for $710,000 drawn by Shandford Investments Pty Ltd and payable to Kay & Burton, to Gibson, an employee of Kay & Burton. Gibson took the contract to the vendor in Sydney where she signed it and banked the cheque in the sum of $710,000. That cheque was dishonoured. Kay & Burton has sued the drawer of the cheque in another proceeding.
On 10 April 2004 the plaintiff served a notice of rescission on Piva on the basis of the default in the failure to pay the deposit. The deposit was not paid within 14 days of this notice. Subsequently the plaintiff initiated a proceeding in the Court seeking a declaration that the contract had been rescinded and seeking the payment of the deposit and other relief. The second defendant (Cameron), who at the time the contract was entered into had some form of relationship with Piva, was joined in the action on the basis that he induced the breach of contract. Subsequently the plaintiff also brought a claim against Kay & Burton, the details of which will become apparent in my reasons.
In their defence dated 9 December 2003 the defendants Piva and Cameron admit the substance of the facts asserted by the plaintiff but make the following allegations:
(a)On 27 March 2003 Piva’s agent made an offer to Gibson by giving him the contract of sale, signed by Piva, and a cheque for $710,000 and stated that “the cheque was not to be presented for payment on that day or any other day unless and until the plaintiff’s agent was informed sufficient funds were in the account to meet the cheque”.
(b)On 28 March 2003 Gibson told Piva’s agent that the offer was not acceptable because a term of the written contract, that the purchaser would have the right to occupy the property until completion of the contract, was unacceptable.
(c)On 1 April 2003 the purchaser made a second offer to buy the land on the same terms as the first offer (including a condition in relation to the time the cheque was presented, which I will refer to as “the deposit condition”) except that, instead of the requirement for occupancy, the contract would not take effect until the purchaser had obtained a lease of suitable alternative accommodation until the completion of the contract.
(d)On 3 April 2003 the plaintiff accepted Piva’s second offer, which included the deposit condition.
On 15 December 2003 Piva and Cameron filed a third party notice against the agents. This notice was predicated on the assumption that the plaintiff would succeed in establishing that the contract of sale did not contain the deposit condition.
The allegations of Piva and Cameron in the third party statement of claim were that the agents represented and warranted that if the offer was accepted by the plaintiff the contract would include the deposit condition and that the deposit would not be payable and the cheque would not be presented for payment, unless and until there was sufficient funds in the account to meet the cheque. Piva and Cameron allege that if the plaintiff’s allegations are correct and upheld the representations made by the agents were untrue, the warranties were broken and the representations were misleading and deceptive.
By leave granted on 11 March 2004 the plaintiff amended her statement of claim to add Kay & Burton as a defendant, on the basis that, if the deposit condition had been agreed to between Gibson and the agent of Piva the agents had failed to inform the plaintiff of the terms of the offer.
On 20 May 2004 Master Wheeler struck out the third party notice. On 10 June 2004 an appeal against Master Wheeler’s decision was dismissed by Byrne J. The appeal was dismissed on the basis that it was not part of the plaintiff’s case that the agents acted without authority or otherwise that the terms of the contract alleged by Piva and Cameron were ineffective for want of uncertainty or for some other reason. As a result, Byrne J accepted the submissions of the agents that the statements attributed to Gibson would, on the assumption that they were found to have been made, bind the plaintiff. As a result his Honour found that:
“The issue between the vendor and the purchaser will turn upon the factual question whether the statements were in fact made and, if so, upon the further question, whether they have the effect intended for in the defence.”
Consequently Byrne J considered that, because the actions of the action bound the principal, no loss could flow on the claims of breach of warranty or misleading and deceptive conduct.
Notwithstanding these reasons for judgment, Byrne J permitted Piva and Cameron to file a fresh statement of claim against the agents. It may be that this was intended to cover the possibility of the plaintiff’s claim failing and the first and second defendants being unable to recover costs from the plaintiff; in which case they may wish to recover these costs from the agents. In any event when the opportunity was taken up, the result was that an amended statement of claim was served which differed little from that struck out by Byrne J. In substance the only amendments were to:
(a)allege that the agents were not authorised to enter into contractual relationships in respect of the land (paragraph 5); and
(b)that the agents represented that they would inform the plaintiff of the offer made by Piva and its terms and obtain her acceptance of them (paragraph 17).
The agents now submit to me that the allegations added to the statement of claim do not change the basis upon which the first statement of claim was struck out by Master Wheeler and, on appeal, by Byrne J. Essentially the argument put on behalf of the agents comes down to this:
(a)If the plaintiff does not deny that the agents were able to bind her as principal, it is not competent for Piva and Cameron to do so. Piva will obtain the benefit of the plaintiff’s acceptance of the agent’s authority if she is able to establish the fact of the representations and their effect.
(b)Similarly, if the failure to inform the plaintiff of the deposit condition does not affect the incorporation of the term, the execution of the contract by the plaintiff did not cause loss to Piva or Cameron.
The pleadings
As I have indicated the writ was issued in 2003. On 9 December 2003 Piva and Cameron delivered a defence. The critical paragraphs of the defence are paragraphs 23 and 26. It is only necessary to reproduce paragraph 23, because paragraph 26 effectively alleges that the second offer which was made was on the same terms as the first offer (including the deposit condition) except for certain matters which are not presently relevant. Paragraph 23 of the defence provides as follows:
“They [sic] Defendants will contend that on or about 27 March 2003 Piva made the offer to buy the property.
Particulars
The offer was partly oral, partly written and partly implied. Insofar as it was oral, it was made in a conversation between Di Francesco acting on behalf of Piva and Gibson acting on behalf of the Plaintiff on or about 27 March 2003 at Di Francesco’s home when Di Francesco handed to Gibson a form of contract of sale of real estate signed by Piva and a cheque for $710,000 payable to the Plaintiff’s agent and stated to Gibson words in substance and to the effect that the cheque was not to be presented for payment on that day or on any later date unless and until the Plaintiff’s agent was informed that sufficient funds were in the account to meet the cheque. Insofar as it was written, it was constituted by that form of contract and cheque. Insofar as it was implied, it was to be implied from that conversation and those documents and from the facts and circumstances, known to Gibson, that Piva did not have funds for the purchase money, the purchase money was to be provided to her by Cameron, Cameron did not then have the funds, Cameron was in the process of a refinancing, the funds for the purchase money, particularly the deposit, were to come from that refinancing and were dependant [sic] upon that refinancing being completed.”
No doubt as a response to this part of the defence, the plaintiff served an amended statement of claim. In this amended statement of claim the plaintiff also joined Kay & Burton as a defendant. The critical paragraph is paragraph 28 which provides:
“If, which is not admitted, the matters pleaded in paragraphs 23 to 31 of the Defence of Piva and Cameron are an answer to the Plaintiff’s claims against Piva and Cameron, Kay & Burton’s failure to advise the Plaintiff of the matters referred to in paragraphs 23, 24, 26 and 27 of the said Defence was negligent and in breach of the implied term of the Kay & Burton’s retainer to exercise all due care, skill and diligence in the exercise of its powers and authorities and in the discharge of its duties and in advising the Plaintiff in relation to the sale of the property.”
As I have mentioned, Byrne J considered the first statement of claim by Piva and Cameron against the agents inadequate. The amended claim, which the agents now seek to have dismissed or struck out, is substantially the same. All the changes seem to be of no consequence except, possibly, paragraph 5. This provides as follows:
“The authority of Kay & Burton and Gibson to act on behalf of the Plaintiff to sell her property extended to enable them to make representations as to the property, but did not extend to enable them to enter into any contractual relationship in respect of the property on behalf of the Plaintiff.
Particulars
The particulars to paragraph 2 hereof and paragraph 28 of the Plaintiff’s Further Amended Statement of Claim are referred to and repeated.
The Nature of the Proceeding
It is well established that the Court will only summarily dismiss or strike out a proceeding if the stated claim is obviously unsustainable or cannot possibly succeed.
The Case by Piva and Cameron
The case in response was put by Dr Pannam on behalf of Piva and Cameron and was supported by two written submissions. Although the argument was couched in terms that the amendments to the claim had overcome the criticism of Byrne J, I suspect the real argument was that Byrne J was wrong. If that was so the correct course would have been to appeal to the Court of Appeal. Even if I am in a position to differ from Byrne J, I would not do so unless his Honour was obviously wrong.
In my opinion, the decision of Byrne J, particularly the analysis in paragraph 15 of his judgment (which was subject to criticism), is not obviously wrong. Indeed I agree with the analysis, which is to the following effect: if the agents warranted that the deposit condition would be part of the contract, it was part of the contract; for the reason that the plaintiff does not suggest in her pleadings that the agents would have been acting beyond their authority if they made such a warranty. This is so notwithstanding paragraph 28 of the plaintiff’s Amended Statement of Claim, as that paragraph is confined to an allegation that the agents “failed to advise” the plaintiff of the deposit condition.
Dr Pannam acknowledged that if the alleged agreement by the agents to the deposit condition was within the scope of the agents’ authority, then the condition bound the plaintiff. Further he acknowledged that, in these circumstances, his clients would, on the facts of this case, have no cause of action against the agents. But he said that the relevant critical issue was whether or not the agreement by the agent to the deposit condition was within the agents’ authority from the plaintiff.
Dr Pannam pointed to paragraph 5 of the Amended Statement of Claim against the agents as raising this issue. But this paragraph really states what was implicit in that Statement of Claim when the matter was considered by Byrne J. Dr Pannam also contended that paragraph 28 of the plaintiff’s Further Amended Statement of Claim alleges that the agreement by the agent to the deposit condition was not within the agents’ authority from the plaintiff. In particular, he emphasises that the allegation of negligence in paragraph 28 must include an excess of authority. But that is not what paragraph 28 in fact alleges: rather it is confined to an allegation of negligence and a lack of due care in relation to the “failure to advise” the plaintiff of the deposit condition. It does not allege any negligence or lack of care in exercising the authority in relation to the entering of the contract. Further, this paragraph of the Statement of Claim is unchanged from the time when the matter was considered by Byrne J.
In the event that the plaintiff subsequently seeks to allege that the agents acted without authority in relation to the deposit condition, then there may be a basis for the first and second defendants to sue the agents. But while there is no such allegation on foot, the consequence of the first and second defendants proving that the agents agreed to the deposit condition will be that the plaintiff fails in her claim.
Subject to hearing from counsel, I would propose to strike out the Amended Statement of Claim and order that any reformulation of the Statement of Claim must be confined to the circumstance of the plaintiff failing in her claim against the first and second defendants.
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