Sperrer v Rasla Pty Ltd [2011] NTSC 2

Equity Doctrines and Remedies, Meagher Gummow & Lehane, 4th Edition, Butterworths, 2002

[1] The Plaintiff has applied by Interlocutory Summons filed 28 October 2010 seeking summary judgment pursuant to Order 22 Rule 2 of the Supreme Court Rules ("the Rules") which provides:-

(1) Where the defendant has filed an appearance, the plaintiff may at any time apply to the Court for judgment against the defendant on the ground that the defendant has no defence to the whole or part of a claim included in the writ or statement of claim, or no defence except as to the amount of a claim.

(2) Subrule (1) does not apply to a claim for defamation malicious prosecution, false imprisonment or seduction or to a claim based on an allegation of fraud.

(3) Where the writ or statement of claim includes a claim within subrule (2), the plaintiff may apply for judgment in respect of any other claim and continue the proceeding for the first-mentioned claim.

(4) Except by order of the Court, the plaintiff shall make only one application for judgment under this Order.

[2] Order 22 Rule 6 is also relevant and that provides:-

(1) On the hearing of the application the Court may:

(b) give such judgment for the plaintiff against the defendant on the claim or the part of the claim to which the application relates as is appropriate having regard to the nature of the relief or remedy claimed, unless the defendant satisfies the Court that in respect of that claim or part a question ought to be tried or that there ought for some other reason be a trial of that claim or part;

(c) give the defendant leave to defend with respect to the claim or the part of the claim to which the application relates either unconditionally or on terms as to giving security, paying money into court, time, the mode of trial or otherwise; or

(d) with the consent of all parties, and notwithstanding rule 77.03(1), dispose of the proceeding finally in a summary manner.

(2) The Court may stay the execution of a judgment given under subrule (1)(b) until after the trial of a counterclaim made by the defendant in the proceeding.

[3] The legal principles in relation to applications for summary judgment are well established. I discussed the authorities in detail in Nibbs v Australian Broadcasting Corporation.[1] The principles were neatly summarised by Southwood J in Sportsbet Pty Ltd v Moraitis,[2] where his Honour said:-

The substance of the criterion to be applied is that, after the matter involved has been explained to the Judge, there must be a real uncertainty as to the plaintiff's right to judgment. The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.

A burden is cast on the defendant of satisfying the Court that there ought to be a trial and, if not, judgment. The provisions of O 22 of the Supreme Court Rules apply to cases where there can be no reasonable doubt that a plaintiff is entitled to judgment.[3]

[4] His Honour then went on to elaborate on the relevant principles. The following extracts represent the principles relevant to the current matter, namely:-

1. The Court will give the judgment unless the defendant shows cause against the application to the satisfaction of the Court.

2. A defendant will be granted leave to defend if there are facts which, if true, would constitute a defence to the plaintiff's claim. The Court is reluctant to try a case on affidavit where there are facts in dispute.

3. An important issue is whether the defendant's account of the facts has sufficient prima facie plausibility to merit further investigation, whether of fact or law.

4. The Court will normally require an affidavit by or on behalf of a defendant before a defendant will be granted leave to defend. The defendant is required to use such diligence as is reasonable in the circumstances to put before the Court in a summary form all of the evidence relied on by the defendant in defence of the plaintiff's claim.

5. A defendant should condescend into particulars. The evidence of the defendant must deal specifically with the facts relied upon by the plaintiff in support of its application. The affidavit of the defendant should state clearly and concisely what facts are relied on as supporting the defence.

[5] In relation to the obligation on a defendant opposing an application for summary judgment and in respect of the evidence required to be produced by a defendant, in Hausman & Anor v Abigroup Contractors Pty Ltd,[4] the Victorian Court of Appeal said:-

The defendant must satisfy the Court that, in respect of the claim to which the application for judgment relates, a question ought to be tried, or there ought for some other reason to be a trial of that claim. The Court, if so satisfied, will give the defendant leave to defend and the proceeding will continue to trial in the ordinary way. The Court will normally require an affidavit by, or on behalf of, the defendant before it will be satisfied that the defendant is entitled to leave to defend. The standard of diligence required of the defendant in preparing a case in opposition to the application, especially if under pressure of time, is perhaps not as high as that required in preparing for trial.

Nonetheless, the defendant is required to use reasonable diligence to put before the Court, albeit in summary form, all the evidence relied on in the defence...

The authorities suggest that an affidavit in opposition to an application for summary judgment must provide sufficient particulars to enable the defence case to be properly understood. A bald denial that the defendant is indebted to the plaintiff will not suffice. The affidavit should, so far as practicable, deal specifically with the plaintiff's claim and the facts set out in the supporting affidavit to establish that claim. It should state clearly and concisely what the defence is, and identify the facts relied upon in support of that defence.[5]

[6] The background to the current matter is a proposed development and subdivision of a property owned by the Defendant at Winnellie ("the Development"). The Defendant entered into contracts to sell the two new lots which would result from the Development. A contract to sell one lot was entered into with Hacker Nominees Pty Ltd ("Hacker") and the other lot was the subject of a contract with the Plaintiff ("the Contract").

[7] In the case of the contract with Hacker, proceedings were commenced in this Court against the Defendant (No 73 of 2008 (20815620)). The relief sought was specific performance and damages in the alternative. In those proceedings, on 29 April 2010 the Defendant herein consented to judgment against it in the sum of $521,000.

[8] Relevantly the Contract contained inter alia the following terms:-

1. Clause 28.1 - A notice could be served by facsimile transmission to the party's facsimile number, or the facsimile number of the party's conveyancer specified in the contract;
2. The Contract nominated Withnalls as the Defendant's conveyancer and specified their facsimile number for the purpose of service of notices;
3. There was a special condition in clause 31.4 which provided as follows:-

The vendor shall diligently and at his own expense in all things make every reasonable endeavour to obtain a separate title for the property agreed to be sold and shall sign all such documents and perform all such acts and things as shall be necessary or required to enable the separate title to be issued. If such separate title shall not be issued on or before 30 September 2007 (hereinafter referred to as the "Title Issue Date") then:

(a) the purchaser in any event;

(b) the vendor provided he has complied with the terms of this clause;

shall be entitled upon not less than 14 days notice in writing to the other party to rescind this contract.

[9] The Darwin City Council ("the Council") specified certain storm water drainage works as part of the approval for the Development. The Defendant has been unable to satisfy those requirements. The affidavit evidence of the Defendant (affidavit of Mr Oppermann, the director of the Defendant, sworn 1 December 2010) is to the effect that the development permit in relation to the Development was initially granted in 2003. When that lapsed, a further permit was obtained on 19 November 2007. That further permit has since been extended and remains current to 24 October 2011.

[10] Mr Oppermann claims that the conditions imposed by the Council with respect to the current permit are more onerous then was the case under the initial permit. He states that the latest conditions required considerably more expense.

[11] Mr Oppermann's evidence is to the effect that the Defendant has considered a number of alternative ways of satisfying the Council's conditions but without success. One option involved the re-levelling of the land and draining stormwater to the street frontage of the property. There is evidence that the cost of those works were between $140,000 and approximately $300,000. Mr Oppermann does not specifically say so in his affidavit but it appears that he, on behalf of the Defendant, considered that unacceptable as he then went on to consider alternatives. The Plaintiff deposes to having obtained a quote for approximately $110,000 but Mr Oppermann claims to have no knowledge of that.

[12] One of the other alternatives referred to involved draining stormwater to the rear of the property with pipe work over an adjoining property. The adjoining owner was prepared to agree to that until the Council required a registered easement. Another alternative required removal of a boundary fence and access over a different adjoining property for works to be effected. In each case, Mr Oppermann claims he could not obtain the necessary approvals from the relevant owners.

[13] The Statement of Claim filed by the Plaintiff in this matter seeks specific performance and damages for breach of contract in the alternative. The former is no longer pressed. The Defence raises a number of defences to the claim namely:-

1. Laches, acquiescence and waiver;
2. Invalid notice of default;
3. Failure to mitigate damages;

[14] In the course of the hearing before me, Mr Liveris for the Defendant indicated that the defence of frustration only related to the claim for specific performance. As the Plaintiff no longer presses that claim, it is unnecessary to consider it further. I have serious doubts as to whether that defence could have been maintained if specific performance were still pressed, particularly on the basis that the alleged frustrating act, i.e., the judgment of Hacker arises from the Defendant's own default. Further I am not convinced that the judgment amounts to frustrating act in any case.

[15] The defence of invalid notice is based on the allegation in the affidavit of Mr Oppermann that notice of default under the Contract was served on the Defendant by facsimile transmitted to the Defendant's solicitors. Mr Oppermann alleges that the Defendant did not authorise that. Although this was an issue on the affidavit material and submissions, it appears to have been conceded as it was not argued. The claim is untenable in any event given that the specified mode of service is authorised by the Contract and the evidence shows that service of the notice complied with the relevant provision.

[16] As to the defence of laches, acquiescence and waiver, in general terms I am satisfied that those defences cannot be maintained even on the Defendant's evidence. The affidavit of Mr Oppermann deposes to the ongoing involvement of the Plaintiff in various aspects of the works required to satisfy the conditions for the Development. The Plaintiff had numerous discussions with Mr Oppermann and he was also involved in discussions with the Council and one of the adjoining owners. He also obtained a quotation for the earthworks.

[17] Although Mr Oppermann says that he cannot recall being provided with a quote by the Plaintiff, the Plaintiff's evidence on that point is more positive. He says that he specifically obtained the quotation after discussions with Mr Oppermann as to concerns regarding the extent of works required and the quotes received. The Plaintiff positively asserts that he provided the quotation he obtained to Mr Oppermann. On that evidence I would prefer the version of the Plaintiff given the circumstances leading up to him obtaining the quote and that he obtained the quote specifically for provision to Mr Oppermann. In contrast, all the Defendant can say is that he cannot recall receiving the quote.

[18] There is the suggestion that the failure of the Plaintiff to take legal proceedings at an earlier stage also amounts to acquiescence so as to bar the relief claimed. In contrast Hacker commenced proceedings by Writ filed 5 June 2008. The Plaintiff however denies any acquiescence. He deposes to attending a number of conferences at the Supreme Court in relation those proceedings. There is also evidence both from Mr Oppermann and the Plaintiff that the Plaintiff was active in discussions to attempt to find an alternative method of satisfying the Council's conditions.

[19] In any event the proceedings which the Plaintiff has commenced have been commenced within the time limit fixed by the Limitation Act. It appears well established, albeit lacking any recent authority, that the doctrine of laches does not apply until the expiration of a limitation period fixed by statute. Although it is acknowledged that laches can still apply to bar a right to relief even if the action is still within the statutory time limit, this is only if the Defendant were to have reasonably acted to his detriment in reliance of the Plaintiff's acquiescence. See generally Equity Doctrines and Remedies, Meagher Gummow & Lehane, 4th Edition, Butterworths, 2002.[6] The Defendant has not produced any evidence of detriment nor can I see how he could have suffered detriment even if I was satisfied that the Plaintiff's acquiescence was established.

[20] The defence of failure to mitigate damage is raised in a number of contexts in the Defence. However the Defendant has not presented any evidence in support nor was it argued before me. Moreover it is not entirely clear from the Defence as to how or why it should prevent an order for summary judgment. I therefore disregard it.

[21] With that background, the only possible basis upon which the Defendant could establish that there is a serious question to be tried or that there is sufficient prima facie plausibility to merit further investigation is that the Defendant is not in breach of contract given the wording of the special condition in clause 31.4 of the Contract. That turns on whether it can be said that the Defendant has "...diligently and at his own expense in all things make every reasonable endeavour to obtain a separate title for the property agreed to be sold and shall sign all such documents and perform all such acts and things that shall be necessary or required to enable the separate title to be issued...". In turn this can only rely on the Defendant's claimed inability to satisfy the Council's conditions. As there is at least one alternative available to the Defendant to satisfy those conditions, it descends to a question of the reasonableness of that alternative.

[22] The failing of the evidence of the Defendant in this respect is that it does not condescend to particulars. There is a bare statement that the obligations imposed were more onerous than under the initial permit. There is also a bare statement that it would have required considerably more expense than under the initial permit. However there is no evidence to compare the requirements under each permit which allows scrutiny of the Defendant's bare assertion. There are no details of what the initial requirements were and how the latest requirements of the Council differ from that. There is no evidence of the extent of the additional works or of the likely additional costs. All of this is very relevant given that the obligations on the Defendant under the contract are to do all things reasonable to obtain separate titles.

[23] The available evidence of cost is discussed in paragraphs 11 and 17 above. It is apparent that the Defendant considered that a cost of $140,000.00 was excessive and that Mr Oppermann at least thought it was not "reasonable" for that expenditure to be incurred. However there is no evidence from the Defendant as to whether $110,000 was excessive and if so, why. No doubt that is due to Mr Oppermann's claim, which I would reject if necessary, that he was unaware of that quote. In any event that would necessitate comparison with the extent and cost of works required to comply with the initial permit and the Defendant's failure to provide evidence in respect of those works or costs prevents objective scrutiny of the bare assertion upon which the Defendant relies.

[24] I note that works costing $110,000 represents less that 10% of the combined sale price (as at March 2007) under the two contracts. On its face and looking at it in this admittedly simplistic fashion, that does not appear an unreasonable impost such that I could otherwise accept the Defendant's bare assertion without more.

[25] Noting that the Defendant is required to go beyond mere statements and bare assertions and must condescend to particulars, I am not satisfied on the state of the evidence presented by the Defendant that there is a serious question to be tried. A proper assessment of that would require the type of particulars referred to in the discussions above (paragraph 22). The Defendant has had an opportunity to do that and has not complied. Accordingly, I am prepared to order summary judgment in favour of the Plaintiff.

[26] As to damages, the Plaintiff claims damages of $1,381,800. This comprises:-

1. Loss of capital value of the property, $1,083,000.00
2. Loss of rental, $158,400.00
3. Loss of income, $140,400.00

[27] In respect of the loss of the capital value of the property, the Plaintiff has provided a valuation by Mr Gore which assesses the current market value of the lot the Plaintiff was to purchase in the amount of $1,640,000. From this is deducted the purchase price that would have been payable under the contract of $770,000. After allowing for the deposit which had been paid by the Plaintiff and which is now refundable, that amounts to $1,083,000 as aforesaid.

[28] The claim for loss of rental relates to the rent which the Plaintiff would have received for the premises on which the Plaintiff currently conducts his business. The Plaintiff proposed to relocate that business to the property he was purchasing from the Defendant with the plan to then rent out the existing business premises. The Plaintiff's evidence is that rental value of the existing premises is $4,400 per month plus outgoings.

[29] This head of damage cannot be assessed by simple arithmetical calculations. Considerations as to taxation and other factors need to be allowed for. I have no information upon which I can even base an estimate. The only evidence provided is as to proof of the rental value of the premises. The necessary expert evidence to establish the net loss is lacking and I am not prepared to allow that amount without further evidence.

[30] Similarly in respect of the claim for loss of income, again gross amounts are claimed without any allowance for expenses. It is also curious that the claim is in part based on the gratuitous use of the Defendant's land for storage of vehicles. It seems to me that irrespective of the proposed subdivision the Defendant could have refused permission for the ongoing use of the Defendant's land at any time and in any event.

[31] Nonetheless expert evidence required to prove the loss is lacking and again I am left with no evidence upon which I can even base a reasonable estimated assessment. I am also not prepared to allow that amount without further evidence.

[32] Accordingly, I am prepared to order judgment for the Plaintiff pursuant to Rule 22.06(1)(b) for the sum of $1,083,000. If the Plaintiff wishes to pursue his claim under the remaining heads of damage then the matter should proceed to hearing for assessment of damages.

[33] I will hear the parties as to any consequential orders, as to the costs of the proceedings and as to the costs of the current application.

[1] [2010] NTSC 52

[2] [2010] NTSC 24

[3] [2010] NTSC 24 at p 5

[4] [2009] VSCA 288

[5] [2009] VSCA 288 at p 63-65