Salfa Pty Ltd v Kazmierski [2007] NSWSC 165

New South Wales Supreme Court

CITATION : Salfa Pty Ltd v Kazmierski [2007] NSWSC 165

HEARING DATE(S) : 26/02/07 JUDGMENT OF : Gzell J

EX TEMPORE JUDGMENT DATE : 26 February 2007

DECISION : Application dismissed.

CATCHWORDS : PROCEDURE - Summary Termination - Application to strike out defence - Serious issues whether extension of time validly made, whether defendants estopped from asserting to the contrary, and whether a notice of rescission can rely upon any ground extant at the time - Whether principles in relation to summary termination of a plaintiffs proceedings apply equally to the striking out of a defence

LEGISLATION CITED : Uniform Civil Procedure Rules 2005

Dey v Victorian Railways Commissioners (1948-1949) 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 CASES CITED : Penthouse Publications Ltd v McWilliam, unreported, NSWCA, 14 March 1991 Mutual Life & Citizens Assurance Co Ltd v Evatt (1970) 122 CLR 628 Carter, Breach of Contract, 2nd ed, Law Book Company, 1991

PARTIES : Salfa Pty Ltd - Plaintiff Jacek Wojciech Kazmierski - Plaintiff

FILE NUMBER(S) : SC 4699/06

COUNSEL : Mr P Gray - Plaintiff Mr G Sirtes -Defendant

SOLICITORS : Blessington Judd Lawyers Edwin Davey Property and Environmental Lawyers

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

GZELL J

MONDAY 26 FEBRUARY 2007

4699/06 SALFA PTY LTD v JACEK WOJCIECH KAZMIERSKI & ANOR EX TEMPORE JUDGMENT 1 The application before the court by the plaintiff is to strike out the defence under the Uniform Civil Procedure Rules 2005, r 14.28 as showing no reasonable defence, or having the tendency to cause prejudice, embarrassment or delay in the proceedings. 2 In the substantive proceedings the plaintiff seeks declarations that a contract for sale of land to the defendants in December 2003 was repudiated by them in May 2006 and there was a breach of an essential term in August 2006. Damages are sought including the return of the deposit. 3 Clause 38.1 of the contract provided that completion was conditional upon registration of a strata plan by 30 September 2005 failing which either party could rescind. Clause 38.2 provided that the plaintiff could extend the time if delayed for specified reasons and the project manager was the sole determiner of the plaintiff's entitlement to extend time. 4 The plaintiff purported to extend time on three occasions. As to the first occasion, the statement of claim alleges that the plaintiff extended the time or the defendants are estopped from asserting to the contrary. The Defence denies that time was validly extended on that occasion as the ground for extension was not recognised by the contract. The defence also denied the allegation of estoppel. 5 The application is based upon the proposition that the defendants had taken two inconsistent positions, one before and the other in the defence. The consequence is, it was submitted, that there is a pleading that is embarrassing because the case to be met at trial is not disclosed. 6 There is a proposition in Carter, Breach of Contract, 2nd ed, Law Book Company, 1991 at [1006] that, as a general rule, a party who has elected to terminate the performance of a contract for breach or repudiation of obligation, may justify the election by reference to any ground for termination extant at the time of election. 7 It was submitted on behalf of the defendants that they were entitled to rely upon any ground open to them on the date the notice of rescission was sent so that they were entitled to rely on the alleged invalidity of the first and second extensions and were not confined to the alleged invalidity of the third extension. 8 In my view, if the first extension was not validly made, it must follow that the second and third purported extensions fail. 9 Serious questions arise on the pleadings as they currently stand, in my view. Was the plaintiff entitled to extend on the first occasion or was the basis upon which it purported to do so outside the reasons specified in cl 38.2? If there was no proper basis for the first extension, are the defendants estopped from asserting to the contrary? Are the defendants by their current pleading providing less than ought to be indicated to apprise the plaintiff of the case it must meet? Were the defendants entitled to rely upon the proposition in Carter? 10 It seems to me that a number of the complaints that have been made by the plaintiff can be cured by seeking particulars of various portions of the defence. 11 The principles applicable to summary termination of a plaintiff's proceedings are well understood. The case must be very clear to justify summary intervention to prevent a plaintiff submitting a case for determination in the usual way (Dey v Victorian Railways Commissioners (1948-1949) 78 CLR 62 at 91). The court's powers of summary dismissal should not be exercised to deny a plaintiff access to the courts unless the lack of a cause of action is clearly demonstrated (General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129). It is for the applicant to demonstrate that the statement of claim is beyond saving by legitimate amendment (Penthouse Publications Ltd v McWilliam, unreported, NSWCA, 14 March 1991, citing Mutual Life & Citizens Assurance Co Ltd v Evatt (1970) 122 CLR 628 at 631). 12 In my view, there is no reason why the same principles should not apply to the summary termination of a defendant's process by striking out a defence. 13 In my judgment the plaintiff has failed to establish an entitlement to the relief sought in the notice of motion and it is dismissed. I order the plaintiff to pay the defendant's costs of the motion. I stand the matter over before the Registrar for directions at 9.30 am on Thursday 1 March 2007.