Wadhera v Tesoriero [2015] NSWSC 743

Supreme Court New South Wales

Medium Neutral Citation: Wadhera v Tesoriero [2015] NSWSC 743 Hearing dates: 12 June 2015 Date of orders: 12 June 2015 Decision date: 12 June 2015 Jurisdiction: Common Law Before: Harrison J Decision: (1) Order that the cross claim filed on 14 September 2014 be struck out. (2) Grant liberty to the defendant if so advised to file and serve an amended cross claim within 14 days. (3) Order that the defendant pay the plaintiffs costs of and incidental to the proceedings on the statement of claim and the costs of and incidental to the hearing before me today. (4) Stand the proceedings over before me for directions on 3 July 2015. (5) Grant liberty to either party to restore the matter before me on 48 hours' notice by arrangement with my Associate. Catchwords: PLEADINGS – cross claim – whether cross claim disclosed a reasonable cause of action – UCPR 14.28 – costs Legislation Cited: Uniform Civil Procedure Rules 2005 Category: Principal judgment Parties: Vijay Kumar Wadhera and Kusum Wadhera (Plaintiffs/ Cross-Defendants) Samuel Joseph Tesoriero (Defendant/Cross-Claimant) Representation: Counsel: G Moore (Plaintiffs/Cross- Defendants)

Solicitors: Hemant Prakash & Associates (Plaintiff/ Cross-Defendants) File Number(s): 2014/219339 Publication restriction: Nil

Judgment 1. HIS HONOUR: The plaintiffs are the registered proprietors of land in Nutt Street, Londonderry. On 24 September 2010 they granted an option to purchase the property to the defendant for the sum of $1.8M. It was a term of the agreement that the defendant was entitled to occupy the property in consideration of the payment of a weekly sum of $300. That occupation was conditional upon compliance by the defendant with several other matters which are not presently relevant. The defendant went into occupation of the property in accordance with the terms of the option agreement. 2. The option to purchase the property was expressed to expire four months after the grant of development consent from the Penrith City Council to subdivide it into five lots but in any event no later than 31 December 2011. The defendant was required by the agreement to pay an option fee of $25,000 in two instalments, the first in the amount of $10,000 upon the signing of the agreement and the second in the amount of $15,000 by no later than 31 December 2010. The defendant failed to pay the option fee. 3. The agreement further provided that the defendant was entitled to request an extension of the option expiry date for a period of up to six months, which request shall not be refused, provided that the defendant paid the plaintiffs an extension fee of $5,000 per calendar month. Any such request for an extension of the option was required to be in writing and given at least two weeks prior to the option expiry date. The defendant gave a notice of extension of the time to exercise the option on 14 December 2011 but failed to pay the sum of $5,000 per month at any time between that date and 2 October 2014. 4. The Penrith City Council granted consent to the development application on 2 October 2012. That development consent lapsed two years later in October 2014. 5. By their statement of claim dated 25 July 2014 the plaintiffs claimed possession of the land. The defendant vacated it in September 2014. Before doing so, the defendant filed a cross claim dated 11 September 2014 in the following relevant terms: "1. The defendant repeats paragraphs 1 to 4 of the particulars in the statement of claim. 2. The plaintiffs granted the defendant and other persons an option to purchase the property and agreed that the defendant could reside in the property and pursue a development application over the property. 3. After the option period expired, the plaintiffs and the defendant orally agreed that the defendant could continue to reside in the property and that the option agreement was extended to permit the defendant to pursue the development application. 4. The defendant continued to reside in the property and to pursue the development application. 5. On 2 October 2012 the development application was approved by the Penrith City Council. 6. In breach of their agreement with the defendant, the plaintiffs served a notice to quit on the defendant and otherwise abrogated their agreement with the defendant, whilst retaining the benefit of the development approval. 7. The defendant claims the cost of pursuing the development approval, namely one hundred and ten thousand dollars ($110,000)." 1. By their defence to the cross claim the plaintiffs have denied that they agreed to extend the option as alleged in paragraph 3 of the cross claim. The plaintiffs have also denied paragraph 7 of the cross claim. 2. When the proceedings came before me today for hearing of the cross claim, there was no appearance by the defendant or by any one on his behalf. The plaintiffs tendered documents, which I marked as exhibit "A", which satisfied me that the defendant had been given notice of the hearing today but had failed to appear notwithstanding. It was in those circumstances that the plaintiffs sought an order pursuant to UCPR 14.28 that the cross claim be struck out. 3. UCPR 14.28 is in the following terms: "14.28 Circumstances in which court may strike out pleadings (1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c) is otherwise an abuse of the process of the court. (2) The court may receive evidence on the hearing of an application for an order under subrule (1)." 1. The proceedings remain on foot only to the extent of the defendant's cross claim and the plaintiffs' claim for their costs of and incidental to the statement of claim. 2. It seems to be clear or at least reasonably apparent that the defendant has abandoned any claim that he might at some stage have had to call for specific performance of the option agreement. The cross claim does not seek specific performance of the option agreement and the defendant would appear from the form of his pleading to have accepted that he is limited to, or that he has in any event chosen only to pursue, a claim in damages. There is therefore no obvious connection between the terms of paragraph 3 of the cross claim and the form of relief referred to in paragraph 7. 3. The option agreement is silent concerning the alleged entitlement of the defendant to claim the costs expended by him in pursuing or obtaining development approval. The cross claim does not plead any specific terms of the option agreement in support of the costs that the defendant claims. Those costs are in any event not particularised beyond a reference to the total sum claimed. The cross claim is accordingly relevantly devoid of detail concerning the basis of the defendant's claim for the costs of pursuing the approval. The cross claim also fails in terms to connect the alleged breach or so-called abrogation of the option agreement by the plaintiffs referred to in paragraph 6 of the cross claim to the defendant's claim to be entitled to the costs expended by him in securing the consent. The cross claim neither pleads a relevant term of the option agreement nor any form of actionable representation or conduct suggesting that the plaintiffs are estopped in some way from denying the defendant's claim. There is no legal or logical connection that is pleaded, or which is otherwise apparent on the face of the cross claim, between the breach alleged in paragraph 6 and the relief claimed in paragraph 7 of the cross claim. 4. In my opinion, the cross claim is amenable to being struck out upon the basis that it fails to disclose a reasonable, or indeed any, cause of action. 5. The plaintiff did not read or rely upon any evidence in the hearing before me, with the exception of the tender of material to establish that the defendant had been given, or otherwise had, notice of the hearing. Notwithstanding that, the plaintiff sought an order that the cross claim be dismissed with costs. I take that application to be one based upon UCPR 13.4. That rule is as follows: "13.4 Frivolous and vexatious proceedings (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1)." 1. It will already be apparent that I consider that the cross claim does not disclose a reasonable cause of action. I am, however, disinclined in the absence of the defendant and without the benefit of material going to the possible factual merits of the cross claim to dismiss the proceedings to the extent that they remain alive. Although UCPR 13.4(2) does not mandate that evidence be received on the hearing of an application for an order under UCPR 13.4(1), I do not consider that I should yet make such an order in the circumstances of this case. 2. I was informed by Mr Moore of counsel for the plaintiffs that the costs of the principal proceedings commenced by statement of claim and the plaintiffs' practical success in obtaining the relief that they sought have been reserved. The plaintiffs in those circumstances seek their costs of and incidental to their claim for relief as well as the costs referable to the relief that they seek with respect to the cross claim that I have indicated I am prepared to grant. 3. Having regard to the matters to which I have referred I propose to make the following orders: 1. Order that the cross claim filed on 14 September 2014 be struck out. 2. Grant liberty to the defendant if so advised to file and serve an amended cross claim within 14 days. 3. Order that the defendant pay the plaintiff's costs of and incidental to the proceedings on the statement of claim and the costs of and incidental to the hearing before me today. 4. Stand the proceedings over before me for directions on 3 July 2015. 5. Grant liberty to either party to restore the matter before me on 48 hours' notice by arrangement with my Associate.