Consolidated Credit Network v Illawarra Retirement Trust [2005] NSWSC 1004 | Case summary

4250/05 CONSOLIDATED CREDIT NETWORK PTY LTD v ILLAWARRA RETIREMENT TRUST PTY LTD & ANOR JUDGMENT - Ex Tempore 1 HIS HONOUR: This is the second day of a hearing of an action for specific performance. The plaintiff seeks to have read an affidavit which has been filed in Court only this morning, and which goes to the issue of whether it is ready, willing and able to perform the contract. The affidavit is from a man who gives evidence of having readily available funds in excess of $9,000,000, who, yesterday, entered into heads of agreement pursuant to which he would provide finance for the contract to purchase which the plaintiff is seeking to have specifically performed. That heads of agreement is subject to a condition precedent, the precise ambit of which is not particularly clear to me, but I put that consideration to one side. 2 The case is one which has had its hearing expedited. The vendor served a notice of termination of the contract on 21 July 2005. The next day it entered into contracts to sell different parts of the property to two different purchasers. Those new contracts are due to be completed on Wednesday of next week. 3 These proceedings were begun on 29 July 2005, and have been given an expedited hearing. On 2 September 2005 the matter was fixed for hearing yesterday and today. On 14 September 2005 the matter was again before me for final pre-trial directions. On that occasion the only evidence flagged as being additional evidence which needed to be filed concerned certain very isolated and specific topics, on which the defendant wished to file some further evidence. Time was limited for the filing of that evidence. 4 On 14 September 2005 directions were given which required each party to identify the affidavits proposed to be relied on by that party, and set out a regime for the notification before trial of objections. The affidavit which is now sought to be read was not mentioned, until the possibility of an affidavit dealing with the general topic that that affidavit deals with was mentioned in the course of the hearing yesterday. 5 The various powers of case management of the Court under the Uniform Civil Procedure Act 2005, and in particular under sections 56, 57, 58, 59 and to 61, make clear that the Court has an extremely wide power to give directions, including, as is specifically mentioned in section 61(3)(e), to reject any evidence that a party seeks to adduce. 6 The objectives which are sought to be achieved through the giving of directions are, fundamentally, that the proceedings be disposed of in a way which is just, quick and cheap. In so doing, it is possible to take into account the earlier procedural directions which have been given, and the use that could have been made of any opportunity that had been available to a party in the course of proceedings. 7 The affidavit in question is one which annexes a National Australia Bank document relating to a term deposit of more than $9,000,000 and the deponent says (without elaboration, explanation or detail) that that deposit is not encumbered, and says that he has net personal assets well in excess of $10,000,000. 8 Mr Blake SC, for the defendant, submits that the evidence is too general and could not be tested without the opportunity for subpoenas. At the least, he submits subpoenas to the National Australia Bank, and to the deponent would be needed to enable the testing to occur. In my view that is right. Without that opportunity counsel would be doing little more than guessing in seeking to cross-examine the deponent. It is doubtful, indeed, whether any cross-examination of a kind which really tested the evidence, could be engaged in, without that opportunity. 9 It is well established that it is necessary for a plaintiff seeking specific performance to show that he is ready, willing and able to perform the contract. Mr Harris SC, for the plaintiff, submits that it is usually not necessary to prove that element of the cause of action with the same detail as other matters. Hence, he submits, the generality of this affidavit does not matter. I do not accept that that is so. 10 In the case of an action for specific performance which is conducted upon pleadings, Rule 14.11 Uniform Civil Procedure Rules provides that if it is a condition precedent necessary to a party's case that the party is ready and willing to perform an obligation, a statement to the effect that the condition has been satisfied is taken to be implied in the party's pleading. In the construction of that rule "ready and willing" means the same as "ready willing and able". 11 In a specific performance action conducted on the pleadings, if that implied allegation in the pleading is not traversed in a defence then it is taken to be admitted, and hence no evidence need be called on that topic. It is in that way that in a specific performance action with pleadings the element of the cause of action concerning being ready, willing and able to perform is frequently dealt with. 12 However, in those circumstances where there is an issue raised by the defence, or in cases where there is no pleading, it is still necessary for the element to be established, and established by the plaintiff. If there were no countervailing evidence, it might be established by comparatively brief evidence, because the Court, when there is no countervailing evidence, can decide the issue on the little amount of evidence that it has been presented with. That is another reason why specific performance cases often have little evidence on how the plaintiff is ready willing and able to perform. 13 Nor do I accept the submissions that it would be appropriate to make an order for specific performance, in the absence of evidence that a plaintiff was ready, willing and able to perform and to simply see whether he was able to perform. Before the Court orders the performance of a contract it needs to be satisfied that the plaintiff is able to carry out its side of the contract, and is willing to do it. 14 For these reasons I decline to permit the affidavit to be read. * * * * * * * * * * 15 Mr Harris SC now makes two applications in the alternative. The first is that the present hearing should continue so that all evidence which was proposed to have been given yesterday and today can be completed, but that the hearing then be adjourned to give the defendant the opportunity of making the further inquiries which it would need to make to be able to test the evidence contained in the affidavit filed today. 16 The plaintiff accepts that such an adjournment would involve the defendant in certain costs. The plaintiff is a $2 company with a deficiency of assets, so there is no reason to believe that it could, of its own resources, meet any order for costs which might be made against it. However, it offers, as a term of the proposed adjournment, to pay into court the sum of $15,000 by tomorrow afternoon. 17 Mr Blake SC accepts that the sum of $15,000 would cover the legal costs and disbursements which would be involved in an adjournment, but has some uncertainty as to whether it would necessarily cover all the prejudice which the defendant might suffer if there were to be an adjournment. The particular unknown is whether the delay in completing the new contracts might result in a claim for damages by the purchasers under those contracts, even if they did not actually terminate the contracts. 18 The other contracts are, it is common ground, ones which, while they set Wednesday of next week as the completion date, do not make that time of the essence, and consequently it would be necessary for a Notice to Complete to be served and not complied with before a termination of those contracts could occur. However, a failure to complete on the due day would still be a breach of contract on the part of the defendant, which could give rise to unliquidated damages. 19 In my view, in light of the history which I have earlier outlined, it is not appropriate to grant the adjournment at all. The situation is one where the matter has come to trial in the expedition list on the basis that it was ready for trial and that the existence of the new contracts made the need for a hearing urgent. Pre-trial directions have been given accordingly, and it is the late realisation that more is needed on the plaintiff's part which gives rise to the present application. In such a circumstance it can be appropriate for the Court to refuse an adjournment: State Pollution Control Commission v Australian Iron & Steel Pty Ltd (No 2) (1992) 29 NSWLR 487; GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710. In my view, the present circumstances are ones where an adjournment is not appropriate. The uncertainty that there is about cover for damages or costs arising from the adjournment strengthens what is already, in my view, a strong case for refusing the adjournment. The application for adjournment is rejected. 20 The alternative application which is made is to reinstate a claim for damages. At the outset of the hearing, a claim for damages as an alternative to specific performance was abandoned. It is that claim which is now sought to be reinstated. Mr Blake SC cannot point to any prejudice which his client would suffer if that claim were to be reinstated, even at this stage of the proceedings. It may be that such a claim would need to be determined in the detail of any quantum, by an Associate Justice, but that is a course commonly enough followed. I grant leave for the claim for damages to be reinstated. **********

Consolidated Credit Network v Illawarra Retirement Trust

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Cases Cited (2)

Cited By (2)