HER HONOUR: This is an application, by notice of motion filed on 2 March 2017, brought by the Recyclers (NSW) Pty Limited (the plaintiff) for summary judgment against the first defendant, Mr Michael Ayoub, who is represented in these proceedings by his tutor, Mr Paul Joseph Donnelly. The application is made pursuant to r 13.1 of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR). The plaintiff also seeks that damages be assessed. The plaintiff does not press its claim for relief against the third or fourth defendants, who were joined as necessary parties in light of a particular defence that had been raised by Mr Ayoub at an earlier stage in the proceedings.
[2]
Background
The procedural history of the matter is somewhat unsatisfactory. The plaintiff commenced the proceedings in 2015. The plaintiff's claim was a claim for damages for trespass and in nuisance in circumstances where the plaintiff had the benefit of a registered lease in respect of premises at Kembla Grange on which the plaintiff proposed to conduct a recycling and waste management business. The registered owner of the property was initially the second defendant.
The lease entered into on 6 August 2015 was for a term of three years. Rent was payable from 6 August 2015 in the amount of $18,750.00, excluding GST, per month. The lease was registered on 18 November 2015.
The plaintiff's claim arose because, from the period from 6 August 2015 until 30 March 2016, the plaintiff was not able to access the property as it was occupied by the first defendant and by those authorised by the first defendant.
The first, third and fourth defendants served an amended defence on or about 15 December 2015, denying the claim for trespass and asserting that any actions taken by them on the relevant property had been authorised by another entity (namely, Aus Wide Recycling Pty Ltd; the second defendant). A cross-claim was filed on 10 February 2016. In support of the first, third and fourth defendants' position, an affidavit was filed by Mr Donnelly (whose occupation was described as "principle solicitor" [sic]), who made the affidavit as tutor of the first defendant.
The initial hearing date was vacated by Stevenson J on 2 March 2016 at the request of the Ayoub interests. Orders were made by his Honour at that date and, in particular, his Honour noted an admission by the first, third and fourth defendants that the plaintiff's lease was indefeasible for the purposes of the Real Property Act 1900 (NSW) and that, since 18 November 2015, the first, third and fourth defendants had no equities against the plaintiff which affected the indefeasibility interest of the plaintiff arising under the lease. His Honour dismissed claims that had been made in the cross-claim filed on 15 February 2016 for a declaration that the lease was obtained by fraud within the meaning of s 42 of the Real Property Act and ordered that the first defendant give to the plaintiff possession of the property by 30 March 2016. His Honour also made consequential orders in relation to the costs thrown away by the vacation of the 2 March 2016 hearing date and of and incidental to the claims pleaded in paragraphs 10 and 11 of the first cross-claim, the claims in which his Honour had dismissed. His Honour granted leave to the plaintiff and the second defendant to apply for an order that the defence be struck out and the cross-claim dismissed if the costs that had been ordered to be paid were not paid in accordance with his orders.
There was no compliance by the Ayoub defendants with the orders for payment of costs and the plaintiff applied on 4 May 2016 for the defence to be struck out and the cross-claim to be dismissed. Stevenson J made those orders and I refer to his Honour's reasons (The Recyclers (NSW) Pty Limited v Ayoub (No 3) [2016] NSWSC 576). In particular, his Honour made the observation that the Ayoub interests had had every indulgence in the proceedings and referred (at [51]) to the history of non-compliance with Court orders, most significantly in relation to the costs order made in March 2016.
Subsequently, the Ayoub interests sought to commence fresh proceedings reinstating the dismissed amended defence and first cross-claim (in which they sought to restore the allegation that the lease had been registered as a result of fraud).
On 17 June 2016 the second defendant obtained an order that the costs ordered on 9 May 2016 be specified in a particular amount and that the Ayoub interests and Mr Paul Donnelly, as tutor of the first defendant, be jointly and severally liable to pay those costs (The Recyclers (NSW) Pty Ltd v Ayoub (No. 5) [2016] NSWSC 864). The proceedings between the plaintiff and the second defendant were subsequently resolved with an order dismissing the further amended statement of claim so far as it concerned the second defendant and with an order that each party bear its own costs on 21 June 2016.
The Ayoub interests' application to reinstate the dismissed amended defence and cross-claim was listed for hearing, together with the hearing of an application by the plaintiff for an order for security for the costs of the fresh cross-claim, these applications to be heard on 18 November 2016. Prior to that hearing date, Pembroke J was notified by Mr Donnelly by email that the reinstatement application was no longer pressed by the Ayoub interests. His Honour was "invited to cancel the hearing". On 14 November 2016, Pembroke J made orders including that, on the notice of motion filed by the first defendant, the first defendant and the tutor be jointly and severally liable to pay the costs of the respondents to that notice of motion. The security for costs application was dismissed with no order as to costs.
[3]
The present application
The basis on which summary judgment is now sought by the plaintiff is that, in circumstances where the defence filed by the first, third and fourth defendants was struck out by Stevenson J on 9 May 2016; the first, third and fourth defendants withdrew their application to reinstate the defence; and they have not filed a defence since then, this has the result that the defendants have admitted the facts pleaded in the further amended statement of claim. Reliance is placed on Ward v Ward [2011] NSWSC 107 at [28] (Brereton J) and Alesco Corporation Limited ACN 008 666 064 v Te Maari [2015] NSWSC 469 at [56] (Hallen J).
It is submitted that, as a result, what has been admitted by the first defendant is that: the first defendant has been in possession of the property from 6 August 2015 without the plaintiff's consent (see [12] and [15] of the plaintiff's latest pleading); that the first defendant has placed waste and chattels on the property since 15 August 2015 (see [13] and [19] of the pleading); and that the first defendant for the period from 6 August 2015 (when, I interpose to note, possession was ordered in favour of the plaintiff) the first defendant has occupied the property, authorised others to remain on the property, and placed waste on the property (see [14] of the pleading).
I should raise at least one matter in this regard. In Sayour v Elliott [2017] NSWSC 713, I declined (at [13]) to find that the failure of the defendant to file a defence to the claim amounted to an admission of the facts in the relevant pleading. Reliance had in that case been placed by the plaintiff on Alesco v Te Maari, to which I have just referred. Sayour case can be distinguished because in that case it had been made clear, when those proceedings were earlier before Lindsay J, that the defendant was intending to file a defence to the proceedings but was not in a position to do so until provision of particulars. His Honour considered that it was appropriate that the defendant be permitted to make a request for particulars (and that the plaintiff provide those particulars). I was not prepared, in circumstances where a lengthy request for particulars had been served (albeit some three to four weeks late in accordance with the timetable set by Lindsay J), to treat the fact that no defence had been filed as an admission of the facts pleaded in the pleading in that case. This case is in a much different position and, further, I note that the tutor for the first defendant has conceded that liability is admitted and that the first defendant can make no submissions in relation either to the heads of damage claimed or to the quantum claimed by way of the losses alleged to have been suffered by the plaintiff.
The second matter I should raise is the fact that no evidence has been adduced by the plaintiff (or by some responsible person) as to the belief of the plaintiff (or that responsible person) that the defendant has no defence to the claim or part of the claim or no defence except as to the amount of any damages claimed as provided for under r 13.1(1)(b) of the UCPR. Reliance is placed in that regard by the plaintiff on what was said in Long Leys Company Pty Limited v Silkdale Pty Limited (1991) 5 BPR 11,512, where it was said (at [15]) by Sheller JA in the Court of Appeal, with whom Priestley and Meagher JJA agreed, that on an application for summary judgment where the defendant appears (and I interpose to note that the defendant has appeared today) the Court is bound to consider the pleading, all the evidence submitted and the submissions put to it and, if having done so, it concludes that the defendant has no defence, then it is not powerless or without jurisdiction to make an order for summary judgment by reason only that the plaintiff's affidavit does not comply with r 13.1(1)(b) .
In this case, liability is admitted and there are no submissions made in relation to the damages claimed. In those circumstances I am persuaded that there is no reason not to give summary judgment solely because of the failure of the plaintiff to file an affidavit in compliance with r 13.1(1)(b) (and I note that the plaintiff's counsel indicated that evidence could be adduced orally by Mr Ellicott, the legal practitioner acting on behalf of the plaintiff, deposing orally to his belief that there is no defence, were that to be necessary; see T 7.25).
I have read on the application particular paragraphs of two affidavits sworn by Mr Ellicott (namely, the affidavits sworn on 13 May 2016, [1]-[13], and 4 February 2016, [1]-[16]). I have also read on this application the affidavit of Gene Eric Stewart sworn 1 March 2016, ([22]-[24]), and of Mr Stewart filed 15 December 2015, ([23]-[39] and [43]-[45]), as well as the affidavit of Mr Stewart filed 13 October 2015. Mr Stewart is the sole director and secretary of the plaintiff and has deposed in his affidavit sworn 13 October 2015 to the circumstances in which the lease was granted and as to the steps taken on behalf of the plaintiff to engage a security guard to be present at the property to ensure that no waste was taken into the property and to monitor the movements of the defendant in and about the property as well as to the observations made in relation to material having been taken onto the site. Mr Stewart deposes (at [69]) as to his concern that the site contains materials which should not have been received at the site and to his concern as to the presence of asbestos and contaminated material containing fuel and other hydrocarbons. Part of the costs that are claimed by way of the loss suffered include testing consultancy costs in relation to testing of the material that has been placed on the site by the first defendant or persons authorised by the first defendant.
The test as to when summary judgment may be entered is clear. It is set out in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 by Dixon J at 91 and in General Steel Industries Inc v Commissioner for Railways (New South Wales) (1964) 112 CLR 125 by Barwick CJ at 129.
I am satisfied that the plaintiff, whose interest under the registered lease has for some time been admitted by the first defendant and whose indefeasibility of title has been recognised, has established its claim for damages for trespass. On the evidence to which I have had regard, the claim in nuisance is also established in relation to the placement of waste and other materials on the site by the first defendant or those authorised by the first defendant. In those circumstances I am satisfied that the damages for trespass (which are said to be compensatory in nature, as explained by Martin CJ in Esperance Cattle Co Pty Ltd v Granite Hill Pty Ltd (2014) 288 FLR 1; [2014] WASC 279 at [454][455]; see also, Macquarie International Health Clinic Pty Ltd v Sydney Local Health District; Sydney Local Health District v Macquarie Health Corporation Ltd (No 10) [2016] NSWSC 1587 at [151]ff (Kunc J)) claimed by the plaintiff are in order and that the plaintiff should receive by way of damages for trespass the amounts paid by it in rent for the period in which it was unable to occupy the property. Those amounts have been deposed to by Mr Ellicott and Mr Stewart and the rental payments from 6 August 2015 to 30 March 2016 which are claimed total $144,375.
I am also satisfied that it was reasonable for the plaintiff to incur the cost of retaining a security contractor to conduct surveillance activities at the property, in light of the plaintiff's concern that the first defendant may have been bringing contaminants onto the property; and as to the reasonableness of taking aerial photographs of the property from time to time to identify what further material was brought onto the property. I note in that regard the evidence that has been read by the plaintiff referring to altercations that took place at the premises which make the reasonableness of the aerial photography clear. Those amounts have been quantified and there is evidence of the invoices in relation to those amounts at $61,450.95 and $3,346.75 respectively.
I am also satisfied that the costs in relation to the testing of contaminants was reasonably incurred and that those costs would be recoverable as damages for trespass and/or in nuisance in the sum of $17,237. In particular, I note that certain of the costs in relation to the aerial photography surveillance and the testing of contaminants would be costs that would reasonably have been incurred in preparing the matter for hearing on the allegations of trespass and nuisance in any event and would equally have been recoverable as costs of the litigation.
The basis on which costs are claimed against Mr Donnelly is that he is the tutor of the first defendant and, in accordance with ordinary principles, would have understood when he took the position as tutor that he was exposing himself to personal liability for costs. No submissions have been made as to why a personal costs order against him should not be made. In those circumstances I propose to enter summary judgment against the first defendant and to make costs orders against the first defendant and Mr Donnelly jointly and severally in relation to the plaintiff's costs of the motion and of the proceedings.
The position as to the third and fourth defendants is that the plaintiff seeks for the proceedings to be adjourned to a date to deal with the question the costs. They were, as I have said, parties joined as necessary parties to the proceedings in light of the stance taken by the first defendant at one stage in relation to the claim. They, I understand, filed an appearance and will have incurred at least some costs in relation to the claim that has not been proceeded against them. No relief has been sought or obtained against them. The plaintiff seeks protection in that, in the event that an adverse costs order were to be made against the plaintiff in respect of the joinder of the third and fourth defendants, an order akin to a Sanderson order should be made such that the first defendant and Mr Donnelly indemnify the plaintiff for any such costs orders. No submissions have been made against that form of order. To avoid the incurring of additional costs in relation to the matter, vis-à-vis the first defendant, I think it is appropriate to make a Sanderson order against the first defendant conditional upon and operative only in the event that there were to be an adverse order made against the plaintiff in respect of the third and fourth defendant's costs.
[4]
Orders
Accordingly, I make orders in accordance with the order which I will initial and date. The orders I make are as follows:
1. Judgment in favour of the plaintiff against the first defendant in the sum of $226,409.70.
2. Interest to accrue on the sum of $226,409.70 from 6 March 2016 to 16 June 2017 pursuant to section 100 of the Civil Procedure Act 2005.
3. Interest is payable on the sum of $226,409.70 so much as is from time to time unpaid pursuant to section 101 of the Civil Procedure Act 2005 (NSW).
4. Order the first defendant and his tutor jointly and severally to pay the plaintiff's costs of the proceedings, including any reserved costs, and the costs of the notice of motion filed 2 March 2017.
5. The proceedings against the third and fourth defendants be listed for directions before the Registrar at 9.00am on Wednesday 28 June 2017.
6. Order the first defendant and his tutor, in the event that the plaintiff is ordered to pay the third and fourth defendant's costs of the proceedings, jointly and severally to indemnify the plaintiff for those costs.
[5]
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Decision last updated: 23 June 2017