No. 5409 of 1998
No. 5626 of 1998
- Mr Wotherspoon for the respondent, whom we called on first,
has said, I think, everything that can be reasonably said in support
of
the orders which are the subject of this appeal. Nevertheless, it is in my
opinion clear that the appeal must succeed.
- In October 1995 or thereabouts the appellant went into
possession of a shop in Sydney Road, Coburg as lessee pursuant to a lease
of
which the respondent took an assignment from the lessor. The term was for six
years from 25 September 1995, and the rent for
each of the first and second
years was $29,000, payable at the rate of $2,416.67 monthly in advance after an
initial rent-free period
of three weeks.
- According to the respondent, the appellant had by August 1997
paid only one month's rent: $2,416.67. On 20 August 1997 the respondent
served notice of default, threatening to re-enter or to forfeit the lease if
arrears, said to be some $52,000, and interest were
not paid within 14
days.
- On 21 August the parties met, together with the appellant's
local Member of Parliament, with a view to reaching a compromise of
the dispute
whether the arrears claimed were payable or should have been paid. The result
of that discussion was apparently inconclusive.
- On 5 December 1997 there was a further meeting between the
appellant and a representative of the respondent. It seems to be common
ground
that on that day an agreement was made to resolve the dispute. There is,
however, as appears from some correspondence between
the solicitors for the
parties, dispute as to the content of the agreement. According to a letter
dated 8 December from the appellant's
solicitors to those for the respondent,
the agreement was that the appellant should immediately pay the sum of $15,000
of the outstanding
arrears of rental, and that the balance be paid within 60
days, that is by 5 February 1998; that the appellant remain in the premises
as
tenant and pay the rental as previously fixed until the end of the term; and
that a full accounting of rental received by the
respondent be provided, there
being some dispute as to whether the appellant had made more than one monthly
rental payment. With
their letter of 8 December the solicitors for the
appellant sent the $15,000 payment which had been agreed upon.
- By letter of 9 December 1997 the solicitors for the respondent
wrote to those for the appellant saying that their letter of 8 December
had not
accurately stated the agreement. Part of the agreement, according to the
respondent, was that the appellant should by 8
December provide evidence that
she was financially in a position to satisfy the rental arrears within 60 days
of 5 December. There
were other provisions asserted by the solicitors for the
respondent which I need not mention; but the letter concluded by saying
that,
if the appellant did not provide evidence by 11 December that she was able to
pay the balance of rental arrears by 5 February
1998, the respondent would
proceed to evict her as foreshadowed. By writing that letter it seems that the
respondent, through its
solicitors, had at least arguably waived provisions of
the agreement said to have been reached on 5 December requiring the provision
by 8 December of the financial information. By 22 January information had not
been provided in accordance with the requirements
of the respondent and, on
that day, the respondent entered the premises and changed the locks with a view
to keeping the appellant
out. With a measure of intrepidity the appellant
herself soon afterwards obtained entry again and continued to conduct the
business
on the premises for which she had leased them.
- There was further dispute between the solicitors for the
parties, by way of assertion and counter assertion, about the appellant's
right
to be in possession but ultimately, in April this year, the respondent again
took possession and again the appellant managed
herself to re-enter. Thus it
was that on 9 April proceedings were begun in this Court seeking possession on
behalf of the respondent
of the subject premises. The means selected was an
application by originating motion pursuant to Order 53 of the Rules of Court.
After an adjournment the matter came on for hearing in the Practice Court on 30
April this year. A lengthy affidavit was submitted
on behalf of the present
respondent, and a more modest affidavit was sworn by the
appellant.
- In addition to opposing the application for summary judgment
brought on behalf of the respondent the appellant, by her own originating
motion, sought relief against forfeiture. It was her case that she was in
possession of the premises as a lessee. She contested
the allegation that the
respondent had on 22 January duly terminated the lease by re-entry. She
further contested an allegation
by the respondent that, thereafter, when she
had gone back into occupation of the premises, she was there as licensee
pursuant to
an express licence agreement made between the parties by reference
to correspondence between their solicitors.
- The appellant swore in her affidavit that she had never made a
licence agreement with the respondent in respect of the premises
and that it
was never agreed between them that she was a licensee. She asserted that she
was still a tenant within with the rights
as tenant under the lease. There was
no cross-examination on the affidavits.
- The learned judge refused the appellant's application for a
further adjournment and on 30 April gave judgment for possession in
favour of
the respondent, dismissing the appellant's application for relief against
forfeiture.
- His Honour's reasons were brief. They record no findings of
fact, but the substance of them is that the respondent's case was
accepted by
his Honour, namely, that the appellant was, on 30 April when his Honour heard
the matter, a trespasser on the premises,
so that it was appropriate to grant
the relief under Order 53.
- In my opinion it was not, having regard to the material
before the learned judge, appropriate that Order 53 should have been resorted
to in order to create jurisdiction for resolution of the dispute between the
parties. There having been a dispute of fact as to
whether there was extant a
lease pursuant to which the appellant was in possession of the premises, the
summary procedure provided
for by Order 53 was inappropriate.
- Order 53 is intended to enable speedy resolution, in favour
of a proprietor of land, of a dispute whereby trespassers are keeping
the
proprietor out. It is a prerequisite to the application of Order 53 that the
persons who are in possession and whom it is desired
to have removed should
have gone into occupation as licensees or without the plaintiff's consent and
remain in occupation without
the plaintiff's consent. In this case the
appellant initially went into possession as a tenant and the question which was
presented
to the Court was whether she was entitled to continue in possession
as a tenant or whether she was not. In those circumstances it
seems to me that
Order 53 was unavailable to provide jurisdiction. That is not to say that the
mere existence of a factual dispute
will deny the application of Order 53. It
may be possible to resolve such a dispute quite readily and fairly so that the
summary
jurisdiction afforded by Order 53 can conscientiously be available.
This is not a case of that kind. The matter required resolution
at least of
the questions whether the agreement that the parties had reached on 5 December
1997 was as the respondent asserted or
as the appellant asserted, and whether
the appellant was in breach of it when the respondent re-entered on 22 January
this year.The
judge does not appear to have resolved these disputed questions
of fact which were presented to him. What was appropriate when it
became
evident - as it did not until the very day on which the matters were heard -
that there was a dispute of this kind, was to
send the matter off for trial
with or without pleadings. As it was, it seems to me, pleadings in this case
were necessary in order
that the several issues that were raised should have
been properly exposed and dealt with.
- In addition to the respondent's claim for possession there
was, of course, the claim by the appellant for relief against forfeiture.
That
there was such a claim which was brought on for hearing concurrently with the
respondent's claim for possession should itself,
I think, have been enough to
indicate that a summary determination was inappropriate. Quite apart from any
disputed facts raised
upon the respondent's application for possession, there
were other disputed facts which needed to be resolved in order to decide
whether relief against forfeiture should have been granted.
- In all the circumstances it seems to me that this appeal,
which was a consolidated appeal against the order allowing the respondent's
application and that dismissing the appellant's application, should succeed.
There should be orders made of a kind designed to facilitate
a determination of
the disputes as early as possible, and the Court ought to give appropriate
directions.
CALLAWAY, J.A.:
- I agree.
CHERNOV, J.A.:
- I also agree that the appeal should be upheld. I agree with
the reasons of the learned judge presiding concerning the operation
of Order
53, generally and in relation to this case. For reasons given by his Honour,
the appellant has arguable defences which
involve the resolution of a number of
factual issues as to which there is conflicting evidence. In those
circumstances, it was inappropriate
to enter summary judgment under Order 53.
- One matter in relation to which the appellant has an arguable
defence is, for example, whether the lease was, in fact, forfeited
on 22
January 1998, having regard to the agreement between the parties of 5 December
1998. There is also the question of whether
the appellant is entitled to
relief against forfeiture.
- In those circumstances, and given the other issues in this
case which raise complicated questions of fact which can only be properly
determined at trial, it was inappropriate to give summary judgment under Order
53. The case should be sent to trial.
TADGELL, J.A.:
- Subject to any submissions counsel may wish to make, the
judgment of the Court will be in accordance with the following
minutes:
1. That the appeal be allowed with costs.
2. That paragraphs one and two of the order made on
30 April 1998 and paragraph three of the order made on 15 May 1998 each in
proceeding
5409 of 1998 be set aside.
3. That the sum paid into Court pursuant to paragraph 1 of the
last-mentioned order be paid out to the appellant.
4. That the order made on 30 April 1998 in proceeding 5626 of
1998 be set aside.
5. That the costs of the hearings upon which each of the said
orders was made be reserved.
6. That proceeding 5409 of 1998 commenced by originating
motion continue as if it had been commenced by writ.
7. That the respondent as plaintiff in proceeding 5409 of 1998
file and serve a statement of claim by 30 November 1998, and that
further
pleadings (including any counterclaim for relief against forfeiture or
otherwise if the appellant is so advised) be filed
and served in accordance
with the Rules.
8. That each party file and serve an affidavit of documents in
proceeding 5409 of 1998 no later than ten days after the close of
pleadings.
9. That proceeding 5626 of 1998 be dismissed without any order
to costs.
- The respondent may take a certificate pursuant to s.13 of the
Appeal Costs Act.
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