(These reasons are an edited version of the reasons delivered extemporaneously on 5 December 2008.)

1 By chamber summons dated 19 September 2008 the first-named first defendant, Mr Craig Hughes, applies for summary judgment, alternatively other orders, in relation to the action brought by the plaintiff, Mr Warren Ayres, against Mr Hughes. The application came before me for hearing on 17 November 2008. In the course of that hearing counsel for Mr Ayres sought and obtained leave to file a further amended statement of claim supported by an affidavit of Mr Ayres.

2 Mr Ayres invoked that leave and filed a further amended statement of claim dated 27 November 2008 and an affidavit that he swore on 17 November 2008. He also filed a supplementary affidavit of Amy Rumble sworn 4 December 2008.

3 Mr Hughes maintains his application for summary judgment and objects to the amendment by Mr Ayres to the statement of claim. Some of the other alternative orders sought in the chamber summons were, as I understood it, not pursued in the light of the amendment.

4 The starting point for Mr Hughes' submissions is what he says about the affidavit of Mr Ayres sworn on 17 November 2008.

Mr Hughes' submissions as to Mr Ayres' affidavit

5 Mr Hughes says that Mr Ayres' affidavit of 17 November 2008 should be rejected. As I understood the submission, it did not appear that that was a contention amounting to an objection to its receipt; rather Mr Hughes' position was that because of the unexplained inconsistency between the content of Mr Ayres' affidavit of 17 November 2008 and the previous affidavit of Ms Rumble and correspondence which had been exchanged between the parties, the veracity of Mr Ayres' affidavit should be adversely determined. In that sense the affidavit, it is submitted, should be rejected.

6 Mr Hughes relies on a passage in a first instance decision in the Queens Bench division Paclantic Financing Co Inc v Moscow Narodny Bank Ltd [1983] 1 WLR 1063, 1067. In the context of an application by the plaintiff for summary judgment, Webster J said as follows:

I conclude, therefore, that I can reject Mr. Wong's affidavit, or any evidence contained in it only if the affidavit, or that evidence, is inherently unreliable because it is self-contradictory, or if it is inadmissible, or if it is irrelevant. I conclude that I could reject a defendant's evidence when there is affirmative evidence which is either admitted by the defendant or unchallengeable by him, and which is unequivocally inconsistent with his own evidence; and where no, or no plausible, explanation is given of the inconsistency; because in such a case I could, but would not necessarily, conclude that on the evidence not even a faint possibility of a defence existed. But I conclude that I should not reject the defendant's evidence if, merely because of its inherent implausibility or its inconsistency with other evidence, I find it incredible or almost incredible.

7 I should not be taken to accept that what is there said constitutes an authoritative statement of the proper approach to determining how affidavits are to be considered in the context of an application for summary judgment in Western Australia. Even applying that approach, for the reasons that follow, I do not think it would lead to the rejection of Mr Ayres' affidavit.

8 It is not necessary in my opinion to attempt a comprehensive statement of principle. It is sufficient to refer to the statement of the High Court in Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 608, that if a version of facts is put forward by a deponent which is not inherently incredible, then in the absence of any opportunity of cross-examination it is incumbent on a court in determining an application for summary judgment to proceed on the basis that that version will ultimately be accepted at the trial of the action. I accept that there is authority that a court does not necessarily have to uncritically accept every statement in an affidavit, 'however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself': Eng Mee Yong v Letchumanan [1980] AC 331, 341. Nonetheless, in my opinion, in the context of an application for summary judgment, a court will be slow to reject the veracity of an affidavit as to the facts on the basis of its inconsistency with other material or failure to explain such other material.

9 Mr Hughes' submissions proceed on the footing that the first affidavit of Ms Rumble, sworn 3 October 2008, can be taken as involving a comprehensive encapsulation of Mr Ayres' case. It follows from that premise, the submission continues, that Mr Ayres' affidavit of 17 November 2008 is inconsistent with Ms Rumble's first affidavit.

10 I do not accept the premise of that submission. It seems to me that Ms Rumble's affidavit of 3 October 2008 was evidently directed to resisting Mr Hughes' application for leave to apply for summary judgment. To that end it annexed correspondence between the solicitors. It did not seem to me to involve or require a comprehensive statement of the facts relevant to the merits of the claim brought by Mr Ayres.

11 Further, it seems to me that Ms Rumble's affidavit of 4 December 2008 means that there is no inconsistency, or at least no inconsistency of a kind that would warrant the exceptional course of the rejection of an affidavit or the rejection of the veracity of its contents, between the affidavit of 17 November 2008 and Ms Rumble's affidavit of 3 October 2008 and Mr Ayres' solicitors' previous correspondence.

12 Ms Rumble says in her affidavit of 4 December 2008 that the plaintiff's solicitors have, since about January 2008, had instructions from Mr Ayres to the effect of what is said in his affidavit of 17 November 2008. She says that she and, by implication, others in the firm took the view that the conversation was not part of the agreement, rather it formed part of the negotiations preceding the plaintiff's entry into the agreement. Thus the conversation between Mr Hughes and Mr Ayres the subject of Mr Ayres' affidavit of 17 November 2008 was not referred to in earlier versions of the statement of claim.

13 Mr Hughes submits that there is an important distinction between negotiations preceding an agreement, on the one hand, and discussions which form part of an agreement or which induce an agreement, on the other hand. He submits that in light of that distinction there is substantial inconsistency between the position revealed in Mr Ayres' affidavit of 17 November 2008 and the position he adopted before that. I do not accept that submission. On the face of it, those distinctions seem to me to be primarily ones of legal analysis and legal characterisation. I do not consider that there is anything approaching an inconsistency of the kind as would warrant the rejection of the affidavit. Consequently, Mr Hughes' submissions to the effect that the affidavit should be rejected are dismissed. Moreover, Mr Hughes' application for summary judgment is to be determined on the basis that the facts in Mr Ayres' affidavit will be established at trial: Webster v Lampard (608).

14 That conclusion disposes of one of the bases on which, Mr Hughes submits, summary judgment should be granted. There are others.

15 Mr Hughes objects to the further amended statement of claim in various respects. He says that the objections are such that not only should the amendment be disallowed, but summary judgment should be granted in favour of Mr Hughes. For the reasons that follow, I am not persuaded that the amendment should be disallowed on any of the grounds raised by Mr Hughes.

16 First, Mr Hughes points out that the plea in the further amended statement of claim does not plead a novation of the syndicate agreement. The syndicate agreement is pleaded by the plaintiff in pars 10 - 14 of the further amended statement of claim. Mr Hughes submits that because the syndicate agreement is pleaded earlier, in order for the plaintiff to succeed in his claim, the Comprehensive Agreement (as defined, and on which the plaintiff's claim is based) must have been a novation of the syndicate agreement.

17 I do not accept that it is necessary, or at least so clearly necessary as to justify striking out or summary judgment, for the plaintiff to have pleaded a novation of the syndicate agreement. It seems to me to be at least arguable that novation is not required, in that the two agreements could both remain on foot. In my opinion it is arguable that the $10,000 the subject of the syndicate agreement gave rise to certain rights under that agreement, and by agreement between the parties in November 2000, was also credited as part of the monies to be paid by Mr Ayres for the purposes of the November 2000 agreement. The fact that there may well be counter arguments to such an analysis does not justify the striking out of that plea or the grant of summary judgment on the basis that it is doomed to fail.

18 Next, Mr Hughes submits that the plea of the letter agreement in pars 26 - 29 of the further amended statement of claim should be struck out on the ground that it discloses no arguable cause of action. The submissions in that respect were made to me in writing and orally prior to and at the first hearing of this application on 17 November 2008.

19 Mr Hughes' submissions in this respect invite attention to the terms of the letter of 26 November 2000. The letter is in evidence before me. I will not recite its terms. In considering Mr Hughes' submissions, it is to be remembered that a contract in writing is not to be construed in a vacuum. Background facts known to both parties and evidence showing the object purpose or genesis of the contract may be relevant. I outlined some of the principles relevant to the construction of contracts and other instruments in Corporate Systems Publishing Pty Ltd v Lingard [No 4] [2008] WASC 21 [251] - [257].

20 Mr Hughes submits that there is nothing in the language of the letter of 26 November 2000 which supports the plea that the sum of $22,000 was inclusive of the monies totalling $16,000 already paid by the plaintiff, as had been pleaded earlier in the statement of claim. As far as it goes, that submission is correct. However, the question for me is whether the position in that respect is so clear that the question of construction does not admit of any real doubt. I am not satisfied that it would be appropriate on an application of this nature to reach a firm and final conclusion on the construction of the agreement in this respect. The proper construction of the agreement should, in my opinion, be determined in the light of all of the evidence, including as to background facts known to the parties and evidence showing the object, purpose or genesis of the agreement.

21 Finally, Mr Hughes objects to the pleas at pars 30 - 32 of the further amended statement of claim, where a collateral agreement based on the conversation between Mr Ayres and Mr Hughes in November 2000 is pleaded. Mr Hughes contends that these pleas involve a further attempt to plead a novation of the earlier syndicate agreement. To put it another way, Mr Hughes again submits that the failure to plead a novation is fatal to the pleas of the collateral contract.

22 I do not accept the premise of that argument. As I have said, I do not accept that the plaintiff's case requires it to plead a novation of the syndicate agreement.

23 For these reasons I would not strike out the paragraphs to which Mr Hughes objects and I would not grant summary judgment in favour of Mr Hughes.