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County Court of Victoria |
Last Updated: 16 July 2018
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Revised
Not Restricted Suitable for Publication |
Case No. CI-16-02350
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OWNERS CORPORATION PLAN NO. 702502M
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First Defendant
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and
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and
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MASBUILD (AUST) PTY LTD
(ACN 117 430 261) |
Third Defendant
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JUDGE:
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WHERE HELD:
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DATE OF HEARING:
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DATE OF RULING:
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CASE MAY BE CITED AS:
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Subject: PRACTICE AND PROCEDURE
Catchwords: Summons seeking summary judgment – application by second defendant under s62 and s63 of the Civil Procedure Act 2010 for summary dismissal of application by plaintiff on the basis that it has no real prospect of success at trial
Legislation Cited: Civil Procedure Act 2010; Transfer of Land Act 1958; Subdivision Act 1988; Owners Corporation Act 2006; Wrongs Act 1958
Cases Cited: Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158; Capital One Securities Pty Ltd v Soda Kids Holdings Pty Ltd [2012] VSC 163; Breskvar & Anor v Wahr & Ors (1971) 126 CLR 376; Protec Pacific Pty Ltd v Steuler Industriewerke GmbH [2009] VSC 322
Judgment: The second defendant’s application for summary judgment granted.
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APPEARANCES:
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Counsel
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Solicitors
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For the Plaintiff
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Slater & Gordon
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For the First Defendant
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Meridian Lawyers
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For the Second Defendant
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Mr K Naish
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Grindal & Patrick
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For the Third Defendant
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Mr C Forder
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Hall & Wilcox
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1 By Summons dated 19 December 2017, the second defendant sought orders that:
(a) Pursuant to s62 and s63 of the Civil Procedure Act 2010, an order for summary judgment be entered in favour of the second defendant;
(b) That the second defendant receive its costs of and incidental to this application on an indemnity basis, and that such an order be made against the solicitors for the plaintiff, or in the alternative, the plaintiff.
2 My ruling is sought in this instance as to whether the Court should exercise its discretion pursuant to s63 of the Civil Procedure Act 2010 to grant summary judgment for the second defendant.
3 Counsel for the second defendant relied upon affidavits of Benjamin Hartley, solicitor, and Luke Daley, director of the second defendant, both affidavits being sworn on 18 December 2017, and the exhibits referred to in the affidavits.
4 The application was opposed by the plaintiff. The plaintiff relied upon an affidavit of Alexandra Agathouli, solicitor, sworn 19 February 2018, and exhibits referred to in the affidavit.
5 Keystone Property Group Pty Limited (“Keystone Property Group”) (“the second defendant”) specialises in the identification of suitable properties for residential development in Melbourne. The second defendant identifies suitable properties for development and takes steps to purchase the property. A separate entity is incorporated to conduct the development. The separate entity becomes the registered proprietor of the land. It contracts with a builder for construction of residential property on the land, and then acts as the vendor of the residential property.[1]
6 In respect to the purchase of 372 to 374 Geelong Road, Kingsville (“the land”), the Contract of Sale of the land was entered into in two separate contracts. The Contracts of Sale were signed on 27 January 2010 and 2 March 2010 respectively. In both cases, the purchaser was the second defendant or nominee.
7 On 27 March 2010, Keystone Developments Geelong Road Pty Limited (“Keystone Developments Geelong Road”) was incorporated in order to develop the land as described in paragraph 6 above. Keystone Developments Geelong Road was the nominated purchaser of the land.
8 Historical land title searches for the land are exhibited to the affidavit of Luke Daley, which record Keystone Development Geelong Road as the sole proprietor of the land.
9 Mr Daley swore that:
“The settlement documents for 374 Geelong Road do, at one point, refer to Keystone Property Group as being the purchaser. This is an error. The letter and invoice are both addressed to Keystone Developments Geelong Road and this entity’s ownership of 374 Geelong Road is shown in the title searches [for the land].”[2]
10 Keystone Developments Geelong Road entered into a contract with the third defendant to build thirty-five apartments on site.[3] The owner is described as Keystone Developments Geelong Road.
11 In or around May and June 2013, Certificates of Occupancy were issued for the apartments on site. The Plan of Subdivision was approved on 9 May 2013. The Owners Corporation was created and obtained insurance for the common property on the land. The Owners Corporation Certificate was issued on 19 June 2013. Copies of the Certificate of Occupancy, Approval of the Plan of Subdivision and the Owners Corporation Certificate were exhibited to the affidavit of Luke Daley.[4]
12 Settlements for the thirty-five apartments began on 1 July 2013, with the majority taking place over that month. The final settlement occurred on 6 February 2014.
13 Having successfully completed the development, Keystone Developments Geelong Road was deregistered on 28 December 2016.
14 Counsel for the plaintiff did not dispute this factual background.
15 Initially, the plaintiff commenced proceedings against the Owners Corporation Plan No. 702502M (“the first defendant”) pursuant to s28 of the Subdivision Act 1988 and s4 of the Owners Corporation Act 2006. She alleges that the first defendant was the occupier of, and was responsible for the care, maintenance and control of, the common area of the premises located at 372 to 374 Geelong Road, Kingsville, in the State of Victoria.
16 Counsel for the plaintiff submitted that the first defendant denied any claim. On 13 September 2017, the plaintiff filed an Amended Statement of Claim. The Amended Statement of Claim added the second and third defendants to the proceeding.
17 In the Amended Statement of Claim, the plaintiff alleges that the second defendant was the owner of the premises, an occupier of the premises, and responsible for the building and construction works at the premises, including in and about the garage car park.
18 The plaintiff’s claim against Masbuild (Aust) Pty Ltd (“Masbuild”), (“the third defendant”), was that it was engaged by the second defendant to build and construct the premises, including in or about the garage car park, an occupier of the premises and the head contractor of building works at the premises.
19 The plaintiff alleges, on 6 December 2013, she was leaving her friend’s apartment and was exiting the rear of the premises from the garage car park when she fell from an unmarked and unguarded step. She alleges that the incident was caused by the negligence of the defendants or, in the alternative, by a breach by the defendants of their duty to her under s14A or s14B of the Wrongs Act 1958. As a result of the incident, she suffered injuries and she seeks damages.
20 Section 63 of the Civil Procedure Act 2010 provides:
(1) Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim ... has no real prospect of success;(2) A court may give summary judgment in any civil proceeding under subsection (1 )–
(a) ...
(b) on the application of a defendant in a civil proceeding.
(c) ....”
(my emphasis).
21 Section 64 of the Civil Procedure Act 2010 provides:
“Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—(a) it is not in the interests of justice to do so; or
(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.”
No real prospect of success
22 Essentially, s63 of the Civil Procedure Act 2010 provides that, on the application of the defendant, or on its own motion, the Court may give summary judgment in any civil proceeding if satisfied that the plaintiff’s claim, or part of that claim, has “no real prospect of success”.
23 In Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd,[5] Warren CJ and Nettle JA stated the following useful propositions:
“Upon the present state of authority:
24 Neave JA agreed with this analysis, however, made the following observation at paragraph 41:
“Nevertheless I am concerned that undue emphasis on the caution with which a court must exercise the power of summary dismissal runs the risk of reinforcing the historical approach to summary dismissal and may result in the legislative liberalisation of the test in s 63 having little impact in practice. That approach would be inconsistent with the objective of reforming the law relating to summary judgment, expressed in s 1(2)(e) of the Civil Procedure Act, and with the requirement that the court give effect to the over-arching purposes of that Act, imposed by s 8.”[6]
25 The effect of s63 is that there is a new, less stringent and more liberal test for summary judgment. The new provisions are directed at achieving the overarching obligations to “facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute”.[7]
26 Caution should be exercised by the Court in terminating proceedings. Proceedings should be terminated summarily when it is clear that there is no real question to be tried. Regard should be had to the fact that, if the application is granted, it will deprive the party of the opportunity to pursue her claim against the second defendant.
27 The question is, therefore, whether the plaintiff’s claim against the second defendant has “no reasonable prospect of success, that is, no real question to be tried”.
Submissions of Counsel for the Second Defendant
28 First, the second defendant was never a party to the contracts for the sale of land. The purchaser for both contracts was nominated as Keystone Developments Geelong Road.
29 Second, Keystone Developments Geelong Road is not a subsidiary of the second defendant. The second defendant is not a holding company of Keystone Developments Geelong Road. They are separate entities.
30 Third, Keystone Developments Geelong Road was a “special purpose vehicle” – a separate entity which contracted with the builder. Once Keystone Developments Geelong Road had achieved its purpose of completing the development, it was deregistered on 28 December 2016.
31 Fourth, from the time of the settlement of the land in 2010, the second defendant had no further involvement in the development of the land.
32 Fifth, Counsel for the second defendant relied upon s41 of the Transfer of Land Act 1958. That provision provides as follows:
“No folio of the Register under this Act shall be impeached or defeasible by reasons or on account of any informality or irregularity in any application or instrument or in any proceedings previous to the creation of the folio or the making of any recording on it; and every folio of the Register shall be received in all courts as evidence of the particulars recorded in it and all the recordings of those particulars in the Register, and shall be conclusive evidence that the person named in the folio as the proprietor of, or having any estate or interest in, or power to appoint or dispose of, the land described in the folio is seised (sic) or possessed of that estate or interest or has that power.”[8]
33 The historical land title searches for the land are exhibited to the affidavit of Mr Daley.[9] Those searches disclose the registered proprietor of the land is Keystone Developments Geelong Road. Counsel for the second defendant relied upon s41 of the Transfer of Land Act. The certificate is to be conclusive evidence of title.
34 Further, in Breskvar & Anor v Wahr & Ors,[10] the High Court said:
“The Torrens system of registered title of which the Act is a form is not a system of registration of title but a system of title by registration. That which the certificate of title describes is not the title which the registered proprietor formerly had, or which but for registration would have had. The title it certifies is not historical or derivative. It is the title which registration itself has vested in the proprietor.”
35 As per the Certificate of Title, the second defendant was never named as the proprietor of the land.
36 Sixth, Keystone Developments Geelong Road entered into a contract with the third defendant to build the apartments on the land. Certificates of Occupancy were obtained, a Plan of Subdivision was approved, an Owners Corporation was created, and the Owners Corporation obtained insurance for the common property on the land in or about May and June 2013. Settlement for the apartments commenced on 1 July 2013, with the final settlement taking place on 6 February 2014.
37 Keystone Developments Geelong Road was deregistered on 28 December 2016.
Submissions of counsel for the Plaintiff
38 Counsel for the plaintiff opposed the second defendant’s application. He relied on the following:
(a) The second defendant entered into two contracts to purchase the premises before Keystone Developments Geelong Road was incorporated;
(b) The settlement documents refer to the second defendant, despite Keystone Developments Geelong Road being nominated as the purchaser of the premises;
(c) The Certificates of Insurance named the second defendant as owner of the premises. The second defendant asserts this is an error, without proper explanation or documented evidence about it;
(d) No documents were provided in answer to a subpoena against the second defendant on the basis that no documents existed; however, exhibits annexed to the affidavit material indicate the second defendant does have some documents;
(e) The plaintiff should have the benefit of the second defendant’s Answers to Interrogatories and its discovery before concluding, on a summary basis, that the claim against the second defendant has no prospects of success;
(f) Counsel relied upon the decision of Habersberger J in Protec Pacific Pty Ltd v Steuler Industriewerke GmbH.[11]
(g) The plaintiff argued that Keystone Developments Geelong Road is likely to be a subsidiary of Keystone Property Group.
Analysis
39 Counsel for the plaintiff submitted it has a prospect of success against the second defendant because, first, it entered into two contracts to purchase the premises before Keystone Developments Geelong Road was formed. The evidence is that Keystone Developments Geelong Road was incorporated on 27 March 2010 in order to develop the land. Keystone Developments Geelong Road was the nominated purchaser of the land and was the registered proprietor of the land. Once Keystone Developments Geelong Road became the nominated purchaser of the land, there was no further involvement of the second defendant. Section 41 of the Transfer of Land Act provides that the Certificate of Title is conclusive evidence of title. There was no reason put to me as to how the plaintiff would have any prospects of success against the second defendant when Keystone Developments Geelong Road is the registered proprietor of the land.
40 A second submission was that although Keystone Developments Geelong Road was nominated as purchaser of the premises, the settlement documents refer to the second defendant. The settlement documents were exhibited to the affidavit of Mr Daley.
41 The settlement documents for 372 to 374 Geelong Road, Kingsville, do, at one point, refer to the second defendant as the purchaser. Mr Daley said this was an error. The documents were prepared by Link Conveyancing. The letter and invoice are addressed to Keystone Developments Geelong Road, the registered proprietor. The Statement of Adjustments refers to the second defendant as owner. I accept that the reference on the Statement of Adjustments is an error. The Certificate of Title is conclusive evidence of title, which was adopted by the High Court in Breskvar & Anor v Wall & Ors.[12]
“The Torrens system of registered title of which the Act is a form is not a system of registration of title but a system of title by registration. That which the certificate of title describes is not the title which the registered proprietor formerly had, or which but for registration would have had. The title it certifies is not historical or derivative. It is the title which registration itself has vested in the proprietor.”
42 I accept the document has been prepared by a third party and is an error.
43 A third submission was that the second defendant engaged the third defendant, Masbuild, to build and construct the premises. There was no evidence to support this allegation. The evidence is that the contract to construct the premises was between Keystone Developments Geelong Road and Masbuild.[13]
44 A fourth submission was that there might be a degree of control between the second defendant and Keystone Developments Geelong Road. The basis for this allegation is unclear. I note that the Directors of Keystone Property Group were also the Directors of Keystone Developments Geelong Road.[14] The two entities had the same contact information and address. However, this is not indicative of the entities being related, or of Keystone Developments Geelong Road being a subsidiary of Keystone Property Group. The evidence does not show any degree of control by Keystone Property Group over Keystone Geelong Road. The plaintiff’s counsel suggested it wished to amend its pleading to make such an allegation. I take the view that there needs to be a basis for such an allegation and that was not canvassed before me. At best it is speculative.
45 A fifth submission was that Certificates of Insurance name the second defendant as the owner of the premises. The Certificates of Insurance were before the Court.[15] The Certificates of Insurance were issued by QBE Insurance (Australia) Ltd for and on behalf of the Victorian Managed Insurance Authority (“VMIA”). The Certificates of Insurance relate to domestic building insurance. The policy provides cover for structural or non-structural defects to buildings on site. The insurance only operates in the event the builder, the third defendant (named above), has died, becomes insolvent, or has disappeared. It would not respond to a personal injury claim made by a visitor to the land. The evidence is that the second defendant was not responsible for the document. It is the second defendant’s understanding that the insurance was taken out by consultants who were setting up the Owners Corporation and they did so without consulting the second defendant. Further, it is not accurate to say that the second defendant was the owner as per the insurance documents. An historical title search disclosed that the owner of the land was Keystone Developments Geelong Road and a redacted Statement of Adjustments for the sale of the apartments in October 2013 disclose Keystone Development Geelong Road was the owner of the land.
46 A sixth submission was that no documents were produced in answer to the subpoena directed to the second defendant. The subpoena dated 25 January 2017 directed to the second defendant sought the following documents:
47 The evidence is that a director of the second defendant informed the plaintiff’s solicitor that no documents exist relevant to the documents sought. The plaintiff’s submission was based on the fact that the second defendant had filed affidavit material and exhibits which suggests that it does have some documents in its possession. The evidence is that the documents that the second defendant has exhibited are documents it obtained from the conveyancer. Further, the documents sought in the subpoena are not directed to the question of ownership of the property. The documents sought relate to the construction at the property. They are not the documents referred to in the affidavit material.
48 Seventh, the plaintiff’s counsel submitted that the plaintiff was entitled to have the benefit of the second defendant’s full discovery and Answers to Interrogatories before the Court can conclude, on a summary basis, the claim against the second defendant has no prospect of success. Based on the submissions and evidence of the second defendant, I accept it had no involvement in the development of the property. Therefore, it is unlikely that discovery would be of any assistance. Further, it seems unlikely that the second defendant could answer any interrogatories which relate to the plaintiff’s claim. Further, to accept the submission made by the plaintiff’s counsel would involve a fishing expedition.
49 Finally, counsel for the plaintiff relied upon the decision in Protec Pacific Pty Ltd v Steuler Industriewerke GmbH.[16] In that case, the defendant’s application for summary judgment failed. In that case, there was confusion as to the identity of the contracting parties in various agreements. In this case, the second defendant is not named as a party to any agreement. The evidence is that the second defendant has no involvement with the development of the land from the time of settlement in late 2010. Further, it is not the registered proprietor of the land.
50 There is no evidence that the second defendant had taken any action in relation to the development and settlement of the property. In addition, there is no evidence that the second defendant had any degree of control over the property. Accordingly, I grant the second defendant’s application for summary judgment.
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[1] Exhibit LED-6, affidavit of Luke Edward Daley sworn 18 December 2017 at paragraphs [3] and [4]
[2] Exhibit LED-6, affidavit of Luke Edward Daley sworn 18 December 2017 at paragraph [8]
[3] Exhibit LED-6 to the affidavit of Luke Edward Daley
[4] Exhibit LED-7
[5] [2013] VSCA 158 at paragraph [35]
[6] Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (supra)
[7] Sections 7(1), 8(1) and 9(1a) of the Civil Procedure Act 2010; Capital One Securities Pty Ltd v Soda Kids Holdings Pty Ltd [2012] VSC 163 at paragraphs [8] and [10]
[8] Section 41 of the Transfer of Land Act 1958
[9] Exhibit LED-5
[10] (1971) 126 CLR at 385 and 386
[12] (Supra) at 385 and 386
[13] Exhibit LED-6 annexed to the affidavit of Luke Edward Daley
[14] Affidavit of Luke Edward Daley dated 18 December 2017, paragraph 4
[15] Exhibit BNCH 2 to the affidavit of Benjamin Hartley
[16] Supra
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URL: http://www.austlii.edu.au/au/cases/vic/VCC/2018/345.html