Perricoota Boat Club Investments Pty Ltd v Watson [2010] NSWSC 1097

New South Wales Supreme Court

CITATION : Perricoota Boat Club Investments Pty Ltd v Watson [2010] NSWSC 1097

HEARING DATE(S) : 26 August 2010

JUDGMENT DATE : 26 August 2010

JURISDICTION : Equity

JUDGMENT OF : White J

EX TEMPORE JUDGMENT DATE : 26 August 2010

DECISION : Refer to paras 66 and 67 of judgment.

CATCHWORDS : PRACTICE AND PROCEDURE – application to strike out amended defence and cross-claim – where orders made for defence to be filed by certain date – where plaintiff contends that amended defence filed out of time and impermissibly raises new matters – where issues raised require joinder of additional parties – where both parties' pleadings do not adequately raise issues in proceedings – no basis for striking out defence where raises genuine issues between parties – embarrassing pleadings and pleadings seeking to withdraw earlier admission or raise irrelevant issues struck out – defendant to provide further particulars and replead part of defence with further particularity – where plaintiff contends that cross-claim contains embarrassing, defective, vague and uncertain pleadings – no basis for striking out cross-claim

LEGISLATION CITED : Civil Procedure Act 2005 (NSW)

CATEGORY : Procedural and other rulings

Plaintiff: Perricoota Boat Club Investments Pty Ltd PARTIES : Defendant: Anthony Rupert Watson

FILE NUMBER(S) : SC 2009/291115

COUNSEL : Plaintiff: D Neggo Defendant: M Goldblatt

SOLICITORS : Plaintiff: BizLaw Defendant: Dandanis & Associates

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WHITE J

Thursday, 26 August 2010

2009/291115 Perricoota Boat Club Investments Pty Ltd v Anthony Rupert Watson JUDGMENT 1 HIS HONOUR: The plaintiff moves on a notice of motion seeking orders that the defendant's further amended defence dated 25 June 2010 be struck out, and that the defendant's cross-claim dated the same day also be struck out. The grounds upon which the first order is sought, as set out in the notice of motion, is that the further amended defence was filed out of time, and was filed without leave, or in excess of leave granted. 2 In respect of the second order sought concerning the defendant's cross-claim, an additional ground set out in the notice of motion is that the cross-claim contains pleadings that are embarrassing, defective, vague, and uncertain. 3 The pleadings in this case are complex and there are difficulties with both the amended statement of claim and the defendant's further amended defence and cross-claim. 4 Insofar as the plaintiff's application is based upon the pleadings having been filed out of time, or having been filed without leave, or in excess of leave granted, I would not uphold the application. 5 The matter came before Bergin CJ in Eq on 9 June 2010 on an application concerning discovery. In the course of submissions on that question it became apparent that the defendant wished to raise matters that required an amendment to the defence, and, after debate, orders were made ultimately by consent in relation to that and other matters. 6 The relevant order was "Defendant to file any Amended Defence by 21 June 2010". The order did not limit the matters to be raised in the amended defence to matters debated before her Honour on 9 June 2010, nor to the matters in the defendant's affidavit of 1 June 2010, which were referred to at that time. However it is no doubt correct, as Mr Neggo for the plaintiff submits, that the parties at the time envisaged that the amended defence would deal only with such matters. He complains that the defence raises additional matters. It was also served a few days late, but the period of delay is not such as to warrant striking-out the pleading. The delay is sufficiently explained. 7 If the matters raised in the amended defence and the cross-claim can be shown to raise genuine issues between the parties, in the absence of any suggestion of over-reaching on the part of the defendant, I would not refuse leave for the defendant to file the pleading on the ground that it raises matters not raised at the hearing on 9 June. 8 It appears to me the pleadings of both parties require further consideration. 9 The plaintiff's principal claims are first, that in late October 2006, it and another company called Hillington Valley Pty Limited, entered into a contract for sale of land with the defendant and Hillington Valley Pty Limited. This has been called the second land contract. It relates to land known as Perricoota Marina Village. Hillington Valley Pty Limited is described as both vendor and purchaser in different proportions. 10 The plaintiff pleaded that it paid a deposit under that contract of $60,000 and that the moneys were paid to, or at the direction of, the defendant. It alleges that the defendant rescinded the second land contract. 11 Although the date of rescission is not included in the pleading, the plaintiff's evidence is that the notice of rescission was given on 30 March 2009. He complains that the defendant has not returned the deposit. 12 Prima facie the deposit payable under that contract was payable by both purchasers and the relief to which the plaintiff is entitled, if it is entitled to relief at all, is a right it holds jointly with Hillington Valley Pty Limited. Unless the court otherwise orders, that company ought to be joined as party to the proceedings. 13 It is clear that at the hearing there will be a factual issue as to whether the plaintiff did make payment of a deposit under the second land contract by making a payment on the defendant's instructions as alleged. 14 The plaintiff also pleads that it entered into two contracts called contracts for moorings. 15 In paragraph 16 of the amended statement of claim the plaintiff alleges that it entered into a contract for sale of land as purchaser with the defendant, Hillington Valley Pty Limited and Ozzie Erections Pty Limited as vendors for moorings known as lots 26, 27 and 28 on a proposed plan of subdivision (the first mooring contract). That contract stated that the purchase price was $450,000 and that a deposit of $45,000 and an instalment of $180,000 were payable on the signing of the agreement. 16 The plaintiff alleges that it arranged for the deposit and the instalment to be paid to the defendant by three separate payments, being a payment of $25,000 on or about 27 April 2007, and two payments of $75,000 and $125,000 on or about 4 May 2007. It alleges that each of these payments was made to the defendant. 17 The plaintiff alleges that the mooring contract was rescinded in December 2007 and that it was a term of the Deed of Rescission that the vendors repay the deposit. It alleges that neither the deposit, nor the instalment was repaid by the defendant to the plaintiff. 18 In relation to the first matter, in his defence filed on 14 December 2009 and in his amended defence filed on 15 March 2010, the defendant pleaded that: " Subject to the production of the first Mooring Contract and reference to its full terms and effects, he admits that he entered into an agreement for the sale of Lots 26, 27 and 28 on a proposed plan of subdivision ... " He alleges he did so in the capacity as trustee, but that is not presently material. 19 The defendant denied that the three payments totalling $225,000 were made to him, but pleaded in his amended defence, that if moneys were paid by the plaintiff to him, then he was entitled to set off any moneys paid by the plaintiff to him against moneys due by the plaintiff to him. 20 The Deed of Rescission of the first mooring contract is admitted. That document is signed for each of the vendors under the first mooring contract. It recites the execution and exchange of the contract for sale of land referred to as lots 26, 27 and 28 mooring berth in the unregistered plan. It recites that because of delays required for the completion of the subdivision, the parties had agreed to rescind the contract. 21 All three of the vendors agreed to repay the deposit to the purchaser. The necessary inference from that term, unless explained, is that at least the deposit was paid under the contract. If, as the plaintiff alleges, the instalment of $180,000 was also paid, then it would also be refundable by all three vendors, who would be under a joint obligation in that respect. 22 The plaintiff then pleads that in 2007 it entered into what it called a second mooring contract for the purchase of moorings described as lots 5, 6, 7 and 21 on a certain unregistered plan. That contract is said to have been entered into with the defendant alone. 23 That contract is also for a price of $450,000 and included a provision for payment of a deposit of $45,000 and an instalment of $180,000. The plaintiff pleads that the defendant breached the second mooring contract, as a result of which the plaintiff rescinded that contract. The plaintiff alleges that it agreed to release the deposit and instalment on exchange of the contract. It does not plead how the deposit and the instalment under the second mooring contract were paid, or were taken to have been paid. 24 It seems that the plaintiff would seek to allege either that there was an agreement between it and the defendant that the deposit and instalment repayable to it under the first mooring contract should be treated as having been paid under the second mooring contract, or would allege that it gave a direction to the vendors under the first mooring contract to pay the deposit and the instalment to the defendant pursuant to the second contract. 25 There may be other ways in which the plaintiff contends that it paid or is taken to have paid the deposit and the instalment under the second mooring contract. Whatever those ways might be, they have not been pleaded. 26 The plaintiff alleges that the defendant breached the second mooring contract and that it has rescinded it. It demands the return of the deposit and instalment from the defendant. 27 The defendant admits execution of the second mooring contract but contends, for reasons to which I will come, that that contract is void or unenforceable against him. This was a new allegation raised in the further amended defence filed on 25 June 2010. 28 The defendant denies that moneys were paid pursuant to the second mooring contract. He denies any obligation to repay any moneys following the rescission. 29 The defendant also says that any moneys paid by the plaintiff were not paid pursuant to the contracts in question, but were paid in connection with joint ventures entered into by the plaintiff, Hillington Valley Pty Limited and the defendant. 30 The defendant contends that any claim for repayment of moneys allegedly paid must be brought against all of the relevant joint venture parties. 31 Insofar as the plaintiff claims relief to which Hillington Valley Pty Limited is jointly entitled, then that company should be joined as a party either as plaintiff (if it consents to be joined as plaintiff), or otherwise as defendant under r 6.20 of the Uniform Civil Procedure Rules. 32 Insofar as Hillington Valley Pty Limited and Ozzie Erections Pty Limited may be liable jointly with the defendant for the repayment of moneys said to be refundable on rescission of the first mooring contract, then they should be joined as parties, although pursuant to s 95 of the Civil Procedure Act 2005 (NSW) and r 6.23 of the Uniform Civil Procedure Rules the proceedings are not defeated by their non-joinder. Where the parties are jointly, and not jointly and severally, liable, the proceedings may be stayed. 33 Insofar as the plaintiff's claim seeks to enforce rights under the first mooring contract, it appears to me that the obligations of the vendors are joint, and not joint and several. 34 Enough has been said to indicate why the amended statement of claim requires further attention, both in respect of the joinder of additional parties and for the plaintiff to plead the basis upon which it contends that the moneys he says were paid under the first mooring contract are to be taken to have been paid under the second mooring contract and are repayable by the defendant following the rescission of that contract. 35 Returning to the further amended defence, the defendant has amended his pleading in relation to the allegation that he, with Hillington Pty Limited and not Ozzie Erections Pty Limited, entered into the first mooring contract with the plaintiff. Whereas he had previously admitted entry into the agreement (although the admission was said to be subject to the production of the first mooring contract and reference to its full terms and effect, which is not a proper qualification to be included in the pleading), the defendant, in his further amended defence, alleges that the first mooring contract was void and of no effect. 36 In paragraph 14 of the further amended defence the defendant admits execution of the document on his own behalf as one of three of the vendors, but says that the contract was not executed by or on behalf of the other two vendors. The defendant pleads in paragraph 14: " Save to say that he executed a document titled 'Contract for the Sale of Land – 2005 Addition [sic] ' purportedly for the sale of Lots 26, 27 and 28, on his own behalf as one of the three vendors, which document he will refer to at the trial of these proceedings, he denies the allegations contained in paragraph 16 thereof. He says further that the said contract was never executed by or on behalf of Hillington Valley Pty Ltd or Ozzie Erections Pty Ltd. He says further that the said contract was drafted by his then solicitors BizLaw, who were also then and remain the solicitors acting for and on behalf of the Plaintiff. The contract as drawn was for the sale of Lots 26 and 28, when these lots were already the subject of a prior and enforceable Contract of Sale by each of the vendors to independent third parties. Accordingly, the said contract was void and of no effect. " 37 The last three quoted sentences could not arguably lead to the conclusion that the contract was void and of no effect, quite apart from the fact that the defendant admits execution by the vendors of the Deed of Rescission, which deed recites entry by all vendors into the contract of sale. 38 This paragraph seeks, impermissibly in my view, to withdraw the admission in the earlier pleading. 39 In my view the last three sentences of paragraph 14 of the further amended defence should be struck out. 40 I am doubtful as to the purport of the pleading that the contract was not executed by or on behalf of Hillington Valley Pty Limited or Ozzie Erections Pty Limited, given the admission of the entry into the Deed of Rescission. In my view the only relevance of such an allegation would be to deny that the contract was entered into because it was not executed by the other two vendors. 41 Having regard to the earlier pleadings and to the admission of the Deed of Rescission I do not think that allegation raises a real issue between the parties which should be permitted to go to trial. 42 Accordingly I consider that the second sentence of paragraph 14 should also be struck out. 43 Paragraph 16 of the further amended defence purportedly pleads a claim of set-off. The defendant alleges that if any moneys were paid by the plaintiff to him, which he denies, he is entitled to set off any moneys paid by the plaintiff to him against moneys due by the plaintiff to him as part of the Deep Creek Marina and Perricoota Marina Village joint ventures. He then alleges: " He says further that any monies which were paid by the Plaintiff pursuant to the terms of the alleged first Mooring Contract or otherwise in connection with the Deep Creek Marina or the Perricoota Marina Village joint ventures were payments made in respect to and concerning such joint ventures between the Plaintiff, Hillington Valley Pty Ltd and him, and any claim which the Plaintiff has to the payment of such alleged monies does not constitute a payment to him, but rather to the Deep Creek Marina or Perricoota Marina Village joint ventures, and accordingly all claims by the Plaintiff against him in respect to such monies are misconceived and accordingly the Plaintiff's pleading in this regard is embarrassing and liable to be struck out. He says further that, in the circumstances, any claim sought to be made by the Plaintiff in respect of any monies allegedly paid to him and liable to be repaid pursuant to the first Mooring Contract or otherwise in respect to the Deep Creek Marina or Perricoota Marina Village joint ventures can only be properly made by the Plaintiff against all joint venture parties. "