Ziegler v Piva
[2004] VSC 223
•2 July 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
PRACTICE COURT
No. 6335 of 2003
| ANDREA PATRICIA ZIEGLER | Plaintiff |
| v | |
| SANDRA PIVA & ORS | Defendants |
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JUDGE: | Byrne J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 June 2004 | |
DATE OF JUDGMENT: | 2 July 2004 | |
CASE MAY BE CITED AS: | Ziegler v Piva | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 223 | |
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Practice and procedure – third party claim – strike out application – whether claim justiciable.
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APPEARANCES: | Counsel | Solicitors |
| For the Firstnamed Defendant | Dr C.L. Pannam QC with Mr I.S. Williams | Piper Alderman |
| For the Third Parties | Mr J.D. Elliott | Phillips Fox |
HIS HONOUR:
The firstnamed defendant, Sandra Piva (“the Purchaser”), appeals against the order of Master Wheeler made on 20 May 2004 striking out her third party notice filed on 16 December 2003 directed to the third parties, Kay & Burton Pty Ltd (“the Agent”), and Michael David Gibson. The claim of the plaintiff, Andrea Patricia Ziegler (“the Vendor”), against the purchaser is for declarations that a contract of sale entered into between them on or about 3 April 2003 for the purchase of the property situate at and known as 743 Orrong Road, Toorak has been rescinded and for payment of the deposit.
It is common ground that, on or about 3 April 2003, the purchaser executed an unconditional contract of sale to purchase the land for $7.1M and handed this contract together with a cheque drawn by Shandford Investments Pty Ltd payable to the agent in the deposit sum of $710,000, to Mr Gibson an employee of the agent. Settlement was due on 27 June 2003. Mr Gibson took the contract to the vendor in Sydney where she signed it. The cheque was banked on 5 April but was dishonoured on presentation. In proceeding No. 5363 of 2003 the agent has sued Shandford Investments on the cheque.
The purchaser contends that no contract was entered into, alternatively, that the contract should be set aside, in either case because of the terms of the offer to purchase made to Mr Gibson on behalf of the vendor by Vincent di Francesco on behalf of the purchaser at or prior to the execution by the purchaser of the proffered contract of sale. These terms are pleaded in paragraph 24 and 26 of the defence as follows:
The contract of sale –
(i)“would not take effect or be operative or enforceable until the fulfilment of a condition ('deposit condition'), namely, Piva having, or having available to her, sufficient funds for the purchase money, including the deposit, and that condition would be, or would be taken to be, fulfilled upon completion of the refinancing by Cameron and the Plaintiff’s agent being informed that sufficient funds were in the account to meet the cheque;[1]
(ii)would not take effect or be operative or enforceable until the fulfilment of a further condition ('lease condition'), namely, Piva or Cameron obtaining and entering into a lease of suitable alternative accommodation until completion of the contract.”[2]
It is said in paragraph 28 that this offer was purported to be accepted by the act of the vendor’s solicitors in forwarding to the purchaser the contract of sale executed by their client. The case of the purchaser, as pleaded, is that this acceptance was ineffective so that no contract of sale came into existence. for present purposes I am not concerned with this contention.
[1]Defence para 24(b).
[2]Defence para 26(b).
Alternatively, it is said that, if a contract was concluded, it came to an end for non-fulfilment of the two terms set out above.
This must be because the terms were in fact conditions subsequent so that their non-fulfilment brought the contract of sale to an end. I express myself in this way because the defence does not plead that the terms were in fact conditions subsequent. In paragraphs 24(b) and 26(b) the terms which I have set out above appear to be conditions precedent to the contract, or perhaps they are intended to have a suspensive effect, in that the effectiveness or operation of the existing contract depends upon their fulfilment. In paragraph 31 it is pleaded that, if a concluded contract was entered into, the contract “included the deposit condition and the lease condition as conditions to any liability on the part of Piva”. It is then said in paragraph 32 that, as a matter of law, if the conditions were not fulfilled within a reasonable time the contract would be at an end. It is then put that a reasonable time expired on 10 April 2003 or, alternatively that a reasonable time was established as expiring on 24 April 2003 by notice given on 10 April 2003. The conditions in any event were not fulfilled within such time or at all. The logical consequence of this must be that the contract of sale then came to an end.
I should mention that the references to Cameron in the terms is a reference to Wallace Stuart Cameron, the secondnamed defendant, who was a director of Shandford Investments, the drawer of the deposit cheque, and the person who was to live in the property with Ms Piva.
No reply has been filed on behalf of the vendor. This means that she is taken simply to have joined issue with the allegations in the defence.[3] In particular, it is not a pleaded issue in this case, as between the vendor and her agent, that the agent acted without authority if it made the offer including the terms as alleged. Nor is any point taken that the terms of any contract alleged by the purchaser were ineffective for want of writing, uncertainty, or for some other reason.
[3]Rule 13.13(2).
By an amendment to the statement of claim permitted on 11 March 2004 the vendor added the agent as defendant. She alleges against the agent that it failed to inform her of the terms of the offer and that this was in breach of the implied term of its retainer that it exercised due care and skill. She seeks damages against this defendant in the event that the defences raised by the purchaser are an answer to her claims against that defendant.
On 14 November 2003, Master Wheeler ordered, by consent, that the defendants file any third party notice by 8 December 2003. The third party notice was in fact filed on 15 December 2003, but no point is taken of this. The notice is directed to the agent and to Mr Gibson, a licensed agent who actually conducted the negotiations on behalf of the agent for the vendor.
The third party claim is predicated upon the fact that the vendor will succeed in her denial of the purchaser’s contention that the contract of sale contained the two conditions to which I have referred so that the purchaser will be found to be in breach of her obligation to pay the deposit. Accordingly, the vendor’s recission will be held to be effective. The allegation of the purchaser in the third party statement of claim is that the agent, prior to her signing the contract of sale and delivering the deposit cheque, made the following representations to her and warranted to her the truth of those representations:
(i)if the offer was accepted by the vendor the resultant contract would include the deposit condition and the lease condition; and
(ii)the deposit would not be payable and the cheque would not be presented for payment unless and until there were sufficient funds in the account and Mr Gibson or the agent was informed of that.
The representations were untrue and the warranties breached. The purchaser then seeks damages from the agent and Mr Gibson for breach of warranty. Alternative claims are made for damages for misleading and deceptive conduct and for indemnity or contribution.
By summons filed on 27 April 2004, the third parties sought orders that the third party claim against them be dismissed pursuant to r. 23.01(1) or struck out pursuant to r. 23.02. On 20 May 2004, Master Wheeler struck out the third party notice, with leave to file and serve a further notice by 9 June. The defendant purchaser appeals from this order.
I should observe at the outset that, since the agent became a defendant pursuant to the leave granted on 11 March 2004, it is no longer appropriate for it to be a third party. No point, however, was taken about this; the argument before me turned upon the question whether the defendant’s claims against the agent and Mr Gibson were maintainable.
I approach the application first under r 23.02 without regard to any affidavits filed as to the merits. The relevant test is that set out in General Steel Industries Inc v Commissioner for Railways (NSW)[4]. The submission put on behalf of the third parties was that the statements attributed to the agent and Mr Gibson bind the principal. As I have mentioned, the vendor does not contend otherwise. Then, it is said, 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 had the effect contended for in the defence. If, and only if, the vendor is successful on one or other of these issues, then the purchaser may be liable for the relief sought against her in the statement of claim. This is for the payment of the forfeited deposit of $710,000, further and in the alternative for damages, and interest and costs.
[4](1964) 112 CLR 125 at 129, per Barwick CJ.
The success of the vendor in the principal proceeding will, therefore, depend upon a finding either that one or other or both of the statements was or were not made by Mr Gibson or, if they were made, that either the lease condition or the deposit condition or both of them, nevertheless, did not become a term of the contract of sale.
The success of each of the third party claims depends upon a finding that the representations and warranties as to the lease condition and the deposit condition or either of them were in fact made and further that a binding contract of sale was entered into which, for some reason did not contain these terms.[5] What is first contended is that, in making the statements, the agent warranted that the resultant contract would contain the terms and that this warranty was breached. Such a contention must, in my view, inevitably offend logical and legal principle. Accepting the possibility of a finding in these circumstances that the vendor innocently executed the contract, believing it to be unconditional, the legal effect of the representations as pleaded must be that the two terms were part of the transaction. In such a case breach of warranty could not be found to exist.
[5]Third party statement of claim para 15.
The second claim depends upon the characterisation of the statements as misleading and deceptive conduct. They are, of course, statements as to future matters and I must assume that the purchaser will establish that they were made without reasonable grounds. For the same reasons as I have discussed with respect to the breach of warranty claim, the contract of sale must be taken as containing the terms pleaded so that no loss could be demonstrated to flow from this.
The third claim is for contribution and indemnity. As pleaded, it is not easy to understand. I was told by counsel that it is based upon s. 23B of the Wrongs Act 1958 and upon the general law. This claim assumes that the vendor successfully contends that she was not informed of the representations made by the agent or Mr Gibson, that, in failing to inform her, the agent or Mr Gibson was in breach of its or his duty to the vendor to act honestly and to exercise reasonable care, diligence and skill in her interests and that she suffered loss as a consequence. At this point, the pleader, in paragraphs 27-30, lapses into unhelpful generalities.
The claim must assume also that the vendor succeeds in her claim against the purchaser, presumably on the basis that the terms did not become part of the contract of sale. Then it must be assumed, for the purposes of s. 23B at least, that her damage is the same damage as she suffered as a consequence of the purchaser's breach of contract. I cannot on this pleading see circumstances in which the pleaded claims for contribution or indemnity could succeed.
In these circumstances it is not necessary for me to consider the application under r. 23.01. No affidavits appear to have been filed in support of the application. The outcome must be the same as that under r. 23.02.
The appeal therefore will be dismissed with costs.
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