Growthbuilt Pty Limited v Paul Saad

Growthbuilt Pty Limited v Paul Saad - [2019] NSWSC 1366 - NSWSC 2019 case summary — Zoe

Background

The background to this application is as follows and is not in dispute.
In May 2017, the plaintiff commenced proceedings in this Court against the defendant and another party seeking liquidated damages of over $1 million arising from the alleged termination of a building contract and defective works (the damages proceedings).
In July 2018, the defendant filed his defence in the damages proceedings.
On 19 December 2018, the plaintiff and the defendant entered into a Deed of Settlement and Release in resolution and settlement of the damages proceedings (Settlement Deed). Consent orders were filed the same day discontinuing the damages proceedings.
Under the Settlement Deed, the defendant agreed to pay to the plaintiff the sum of $325,000 (settlement sum) in three instalments, the first of which was payable on 30 April 2019.
On the due date of payment of the first instalment, the defendant wrote to the plaintiff and requested an amendment to the time of payment of the settlement sum. The defendant also offered the plaintiff an ability to register the settlement sum as a judgment debt if it was not paid on time.
The plaintiff accepted the defendant's offer. On 7 May 2019, the plaintiff received the defendant's signed Deed of Variation to amend the Settlement Deed (Deed of Variation) which included changes to reflect the agreement reached between the parties.
The Deed of Variation provided that the defendant was to pay the amount of $326,077.12, being the original settlement sum, plus some interest (revised settlement sum). The revised settlement sum was payable in two instalments, the first on 31 May 2019 and the second on 31 July 2019.
The Deed of Variation also provided that the plaintiff was, without notice to the defendant, entitled to file a summons in this Court, and seek orders and summary judgment in the terms of the consent orders annexed to the Deed of Variation if any of the instalment payments were not paid in full: clause 4.3(b)(iv) and annexure A to the Deed of Variation. The consent orders at annexure A were signed by the legal representative of the defendant.
The Deed of Variation also relevantly: 1. provided that interest at the rate of 12% per annum was payable on the revised settlement sum and/or any balance remaining to be paid: clause 4.3(b)(ii); 2. provided that the defendant was barred from taking any steps to set aside the Deed of Variation or any proceedings commenced by the plaintiff seeking orders in summary judgment: clause 4.3(b)(v); and 3. included warranties that the defendant had had adequate opportunity to obtain legal advice and negotiate the Deed of Variation: clause 16.
As events transpired, the defendant failed to pay any of the revised settlement sum.
As a consequence, and relying on the terms of the Deed of Variation, the plaintiff commenced these proceedings by summons and now seeks summary judgment.
The defendant has been represented in these proceedings. He had a lawyer on the record, although a notice of intention to file a notice of ceasing to act was filed on 2 October 2019.
On 6 September 2019, when the matter was last before the Court, the defendant was represented by Mr Nowlan. Orders were made for the defendant to file any response to the summons by 20 September 2019 and any evidence on which he intends to rely by 27 September 2019. The defendant has not complied with these orders.
The defendant was represented at the hearing today by Mr Adelstein who informed the Court that he had only recently been retained. At the start of the hearing, Mr Adelstein made an application for an adjournment of the hearing to enable the parties time to attend a mediation. I declined that application given the history of default by the defendant and the opportunities he has already had to put forward his case and seek to engage the plaintiff in mediation.

[4]

Consideration

In order to succeed in its application for summary judgment under r 13.1 of the UCPR, the plaintiff must adduce evidence: 1. establishing the facts justifying the claim for relief; 2. of it is its belief that the defendant has no defence to the claim, or part of the claim; and 3. showing that there is no real issue to be tried.
It is not in dispute that the threshold for summary judgment is a high bar. The power to summarily determine proceedings must be exercised with caution and with a high degree of certainty about the ultimate outcome of the proceedings: see Spencer v Commonwealth [2010] HCA 28 at [53] and [55].
Generally, the Court will not deny a party a contested merits hearing unless the absence of a cause of action or defence is clearly demonstrated by the party applying for the order: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 and Singh v Varinder Kaur (1985) 61 ALR 720.
At the hearing, Mr Adelstein informed the Court that the defendant would not be advancing any defence to these proceedings and did not seek to challenge the plaintiff's right to judgment pursuant to the terms of the Deed of Variation.
Based on submissions made by the plaintiff's counsel, the concession by the defendant and evidence before the Court, I am satisfied that there are facts which justify the plaintiff's claim for summary judgment, and there is no real defence to the claim and no real issue to be tried.
The facts are clear. The defendant agreed to compromise his defence to the damages proceedings by entering into the Settlement Deed, which he did with the benefit of legal advice.
At the defendant's own instigation, the parties agreed to a variation of the Settlement Deed on terms which provided the defendant further time to pay the settlement sum (plus some interest) and that the plaintiff could seek judgment in the event that he did not do so.
The Deed of Variation represented an agreed compromise based on mutual promises of the parties to do certain acts in satisfaction of the original claims in the damages proceedings. Those mutual promises included the defendant's promise to pay the revised settlement sum and for the plaintiff to be entitled to enforce by way of consent judgment if payment was not forthcoming. The promises are legally binding and enforceable and the original cause of action from the damages proceedings no longer remains alive: McDermott v Black (1940) 63 CLR 161 at [183] to [185].
The evidence from the plaintiff's finance manager is that no payments have been made by the defendant in respect of the varied settlement sum or these proceedings and that the amount of $326,567.12 remains outstanding.
There is also evidence from the plaintiff's solicitor that he believes the defendant has no defence to the claim. While this evidence is not strictly in proper form, I accept the submission from plaintiff's counsel that the statement is based on information and belief from the defendant.
In those circumstances, I am satisfied that it is appropriate for summary judgment to be granted to the plaintiff in these proceedings and will make orders accordingly.

[5]

Costs

As the plaintiff has succeeded in its application, the usual rule is that costs would follow the event and the defendant would be ordered to pay the plaintiff's costs: r 42.1 UCPR.
Mr Adelstein submits that the Court should not adopt the usual rule because these proceedings should not have been maintained in this Court and should have been transferred to the District Court. He relies on r 42.34 of the UCPR, which applies to proceedings (other than defamation proceedings) where a plaintiff has obtained a judgment in an amount of less than $500,000 and would be otherwise entitled to an order for costs.
Rule 42.34(2) of the UCPR provides that: (2) An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied that: (a) …the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted…
By the Settlement Deed and Deed of Variation the parties agreed that steps to enforce the consent judgment would be taken by filing a summons in this Court.
Given the amount of the judgment sum, the District Court was the appropriate Court to consider this matter. The parties should have recognised this and commenced these proceedings in that Court
That said, once these proceedings were commenced in this Court in accordance with the parties agreement, I do not think their continuation was not warranted such as to deprive the plaintiff of the benefit of a costs order, as Mr Adelstein submits.
Taking steps to transfer the proceedings to the District Court after commencement, as Mr Adelstein suggests, would have been likely to result in increased costs to both parties, which is not in the interests of justice. These proceedings have not involved a lengthy action requiring significant Court time or the resolution of complex questions of fact and law. They essentially require the Court to recognise and administer the agreement reached between the parties.
I also consider it relevant that at no stage before today was the issue of transfer to the District Court raised by the defendant.
Even if I were to accept Mr Adelstein's submission that r 42.34 is engaged because the proceedings were appropriately commenced but should not have been maintained in this Court, the Court retains a general discretion as to costs: Gladio Pty Limited v Buckworth (No 2) [2015] NSWSC 1462 at [24]. I see no reason why I should not exercise my discretion in this case in favour of a plaintiff who has obtained judgment and order the defendant to pay its costs.

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Legislation Cited (2)

Cases Cited (6)