Dalswinton Pastoral Company Pty Ltd v Cole [2006] NSWSC 570 | Case summary

The defendant in her defence admitted that allegation. 3 The current argument commenced with an application by her to withdraw that admission. However, the argument proceeded on the basis that Mr Dubler, of Senior Counsel for the defendant, argued that the pleading allegation in par 5 was inadequate and needed to be amended for the plaintiff to be able to obtain relief in its suit. He claimed that the deficiency was that the plaintiff had not alleged that it "was at all material times" ready, willing and able to perform, as well as the allegations in the present tense set out above. 4 If the pleading is deficient and the plaintiff is obliged to amend par 5 to cure the deficiency, then any question of withdrawal of the admissions would go out the window, because the plaintiff would necessarily have general leave to replead to the amended paragraph. The plaintiff's response is that par 5 is not necessary at all and, to any degree it is deficient, that deficiency would be cured by the provisions of r 14.11: " Conditions precedent presumed to have been met

Paragraph (d) of that rule refers specifically to an averment of readiness and willingness, present and past, as one of the matters to be implied. 5 It is certainly true that the traditional pleading in equity was in terms that the plaintiff was and is ready, willing and able to perform: See Mason and Weston, Precedents in Equity (1915) 15; Miller and Horsell, Equity Forms and Precedents (New South Wales) (1934) 257 and Nevill & Ashe, Equity Proceedings With Precedents (New South Wales) (1981) 251. However, there is authority in the High Court to the effect that allegations of readiness and willingness to complete are among the allegations in pleadings, the necessity for which is removed by provisions in the rules such as that contained in SCR Part 15 r 11 and now in UCPR r 14.11: Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 620. The history of the matter is clarified in the judgment of A H Simpson CJ in Eq in McDonald v McMullen (1908) 25 WN(NSW) 142. His Honour there pointed to the traditional view, stated by Wigram VC in Walker v Jeffreys (1841) 1 Ha 341 at 342; 66 ER 1064 at 1069. He stated that the necessity for the averment had clearly been removed in England by the predecessor of SCR Part 15 r 11 and UCPR r 14.11, but that the necessity remained in NSW. It was probably removed in NSW upon promulgation of the SCR in 1972 or, at latest, by an amendment of Part 15 r 11 in 1995. It was therefore probably not necessary at the time Nevill and Ashe was published and is certainly not necessary now. 6 Thus, Mr Trebeck, of counsel for the plaintiff, says that par 5 was not necessary at all. Even though it was cast as making an allegation in the present tense only, the absence of the appropriate allegation in the past tense remains cured by r 14.11. Mr Dubler refers to my decision in Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2005] NSWSC 482, where at [14] I stated that the rule does not operate to dispense with the pleading of a necessary ingredient in a cause of action, citing May v Chidley [1894] 1 QB 451 and Robert v Plant [1895] 1 QB 597 and referring to Ritchie's Supreme Court Practice NSW [15.11.1]. 7 In Lewis v Nortex supra, I held that the rule did not operate to permit an action to be treated as a derivative action brought by a beneficiary on behalf of a trustee when there was no statement or indication to that effect in the pleadings. In that regard, I said that the pleading "was inadequate to bring to attention the cause of action now sought to be relied on". The omission in this case of par 5 from the statement of claim would not cause any doubt that the cause of action sued on by this plaintiff was a cause of action for specific performance of a contract. 8 Mr Dubler has put the ingenious argument that r 14.11(d) should be construed distributively and that the High Court case cited above in reality deals only with an allegation of readiness and willingness to perform in relation to common law causes of action, where the absence of the averment did not mean that there was no cause of action at all in contract, but only that certain sorts of damages could not, except upon proof of such an allegation, be recovered in the action. 9 It is true that the decision does not deal with a case which was a claim for specific performance, but the Justices of the High Court do advert to the close analogy between the allegations of readiness and willingness in common law actions upon the contract with the allegations in equity suits for specific performance. Furthermore, I rely upon the generality of r 14.11(d) itself, which is not cast in terms of wide import, as are pars (a), (b) and (c) of the same rule, but refers quite specifically to an averment of readiness and willingness. 10 I think it would be unfortunate to treat r 14.11(d) as having a distributive effect, so that it applies to common law causes of actions, to which I am bound to hold that it applies by the decision of the High Court, but to say that a different rule applies in the case of suits in equity for specific performance. In those circumstances I take the view that par 5 of the statement of claim, although it would have been deficient under the traditional rule, is not necessary at all and a statement of claim that lacks it should not be regarded as deficient in the regime since 1972 when SCR Part 15 r 11 and UCPR r 14.11 have been successively in force. 11 The current practice should therefore be regarded as being that the averment of readiness and willingness is no longer necessary in a statement of claim for specific performance. The condition precedent, of course, still exists. But it is up to the defendant to raise in the defence the allegation that the plaintiff was not at some time ready, willing and able to complete. It is to be noted that, if the defendant does this, the onus of proof does not change; upon issue being taken, the onus remains on the plaintiff to prove at the trial readiness and willingness at all material times. 12 This leaves a somewhat uncertain situation as to the necessity for the plaintiff to withdraw the admission. The admission is only that the plaintiff is at the time of the defence and, presumably, prospectively ready, willing and able to perform. It does not deal with earlier readiness and willingness, which is not admitted. However, I do not think it is realistic to subdivide the situation concerning this. 13 The defendant's solicitor has given evidence that she believed in the existence of the plaintiff's readiness, willingness and ability to perform at the time the defence was settled. She draws attention to various matters which she says have come to her attention since that time, which lead her to the view that there is such doubt about that matter that it is appropriate to traverse the plaintiff's readiness and willingness. It would seem that those matters do go back to December 2005, when the contract was due for completion, but that they are also matters that well may be ongoing. They are the suggestion that Mr Ballard who, as well as Mr Byrnes, was a director of the plaintiff, was being relied on to provide the finance, but it is clear that Mr Ballard resigned as director of the plaintiff on 5 December 2005, which lends some credence to subsequent statements, to which the plaintiff's solicitor deposes, to the effect that he was no longer willing to provide or assist with the providing of finance. 14 Furthermore, it is said that it has come to the plaintiff's solicitor's attention that a Gregory Cole, who is the owner of a one quarter share in the property (the defendant owns a three quarter share), is unwilling to consent to a mortgage and that that would create difficulty in the raising of finance. 15 Mr Trebeck refers to various matters and puts submissions that those statements of the plaintiff's solicitor should be given no credence at all. It may be that, in other circumstances, the Court would have to come to a conclusion as to the degree of credence which should be given to the statements. But it is not possible or appropriate to come to any conclusion concerning this on an interlocutory application such as the present, where cross examination has not been sought and almost certainly would not have been allowed if it were. 16 Bearing those matters in mind, I turn to the principles on which applications to withdraw admissions are dealt. The principal authorities are the decisions of Rogers CJ Comm D in Cooper's Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738; the judgment of Santow J (as his Honour then was) in Drabsch v Switzerland General Insurance Co Ltd, NSWSC 16 October 1996 unreported; and the judgment of the Full Court of the Federal Court in Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327. These authorities were collected and discussed by me in my judgment in Silver v Dome Resources NL [2005] NSWSC 265 at [8] - [10]. 17 Bearing in mind the principles stated by Santow J in Drabsch and specifically approved by the Full Federal Court in Jeans, I have come to the conclusion that the withdrawal should be permitted in this case. The plaintiff's solicitor says she has become aware after the filing of the original defence of significant matters which cast doubt upon the accuracy of the admission and I do not think on the material before me that the agitation of the issue raised would necessarily be a futility. Proceedings should be tried upon the real issues that arise on the facts of the case. It seems to me that whether or not the plaintiff was at all times ready, willing and able to perform the contract is a real issue in the present proceedings. 18 In those circumstances I propose to grant to the defendant leave to withdraw the relevant admission. I should add that I do bear in mind on the question of whether or not any prejudice would arise from the late withdrawal of this admission that it is clear, not only from the inherent probability, but from the evidence of Mr Byrnes, the director of the plaintiff, that material relevant to the financial situation of the plaintiff and its ability to complete are squarely within Mr Byrnes' knowledge and there will be no difficulty, in so far as it is not already included in an affidavit which has been read on this application, that any necessary evidence will be able to be put on before the trial. 19 The other manner in which amendment of the defence is sought is by adding paragraphs that raise an allegation that the contract was rescinded by notice served on 15 December 2001. With the notice of rescission was sent a cheque for $50,000 returning the deposit. That cheque was ultimately banked by the plaintiff and presented. However, it is said by the plaintiff that the acceptance of the rescission, which would otherwise arise from those circumstances, was negatived by a letter sent by the plaintiff's solicitor on 9 February 2006, before the cheque was banked, in which he said that the plaintiff would retain the cheque rather "than engaging in a ping pong game", and making it clear that the plaintiff did not accept the defendant's right to terminate and was proceeding to seek specific performance of the contract. 20 Again, it is late in the day. There is added in the proposed amended pleading an allegation that, if the notice of rescission was invalid to terminate the contract and the giving of the notice amounted to a repudiation, that repudiation was accepted by the plaintiff when it presented the cheque. 21 Argument has been put each way upon the effect of these events, including the surrounding correspondence. The subject matter is in small compass and it seems to me that the persons who might be wanted to give evidence about it (if any) are not difficult to find. 22 The plaintiff says that, if the defendant needs to give further evidence it will be prevented by a direction of Young CJ in Eq that all its evidence had to be filed by a certain date, now past, and could not be relied on without the leave of the trial Judge. However, this subject matter was not open at that time. If there is any application of the defendant to file further evidence upon this, I shall consider that application on its merits as the Judge managing this case, in the absence of the trial Judge from duty. In the period leading up to the trial I should be regarded as standing in the shoes of the trial judge for this purpose. 23 I, therefore, propose to allow also the amendment to the effect proposed in this regard.

Dalswinton Pastoral Company Pty Ltd v Cole

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Judgment (14 paragraphs)

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