Council of the Shire of Noosa v Mapps Investments Pty Ltd & Ors [1991] QSCFC 94

IN THE SUPREME COURT OF QUEENSLAND REVISED COPIES ISSUED Court Reporting Bureau Date: jfrSEty1991 FULL COURT BEFORE : Appeal No. 119 of 1990 10 The Acting Chief Justice (Mr. Justice McPherson S7PIJ.) Mr. Justice Shepherdson Mr. Justice Williams BRISBANE, 19 AUGUST 1991 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter ,Court Reporting Bureau.) ( 20 BETWEEN: COUNCIL OF THE SHIRE OF NOOSA (Plaintiff) Respondent 20 -and- 30 40 MAPPS INVESTMENTS PTY.LTD. First (First Defendant) Appellant 30 -and- PAUL HENRY STAGG and Second MARIJKE JOHANNA STAGG Appellants (Second Defendants) JUDGMENT THE ACTING CHIEF JUSTICE: I agree with the orders to be proposed by my brother Williams and with his reasons. MR. JUSTICE SHEPHERDSON: I agree with the reasons and orders to be published by my brother Williams. MR. JUSTICE WILLIAMS: In my opinion the appeal should be allowed, the judgment appealed from should be set aside and in lieu thereof there should be judgment for the plaintiff against the defendants for the sum of $44,060.41 together with interest on that amount at the rate of 18 percent per annum from 5 December 1989. 40 about 50 60 60 G 21 Orintar OIH 1 [1991] QSCFC 94 -- 1 of 13 -- 1 10 20 BO 40 50 60 I would further order that the defendants pay the plaintiff's costs of and incidental to the application heard on 18 October 1990 to be taxed. There should be a trial in the District Court at Gympie with respect to the balance of the plaintiff's claim and I would order the respondent to pay the appellant's taxed costs of the appeal. I publish my reasons. THE ACTING CHIEF JUSTICE: The order of the Court will be in the form enunciated by my brother Williams. 2 -- 2 of 13 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT BETWEEN : AND: Appeal No. 119 of 1990 COUNCIL OF THE SHIRE OF NOOSA (Plaintiff) Respondent MAPPS INVESTMENTS PTY LTD (First Defendant) First Appellant AND: PAUL HENRY STAGG and MARIJKE JOHANNA STAGG (Second Defendants) Second Appellants MCPHERSON SPJ SHEPHERDSON J WILLIAMS J Reasons for judgment delivered by Williams J on 19th August 1991. McPherson SPJ and Shepherdson J agreeing with these reasons and with the order proposed. "APPEAL ALLOWED. ORDER THE JUDGMENT BELOW BE SET ASIDE AND IN LIEU THEREOF ENTER JUDGMENT FOR THE PLAINTIFF AGAINST THE DEFENDANTS IN THE SUM OF $44,060.41 TOGETHER WITH INTEREST ON THAT AMOUNT AT THE RATE OF 18% PER ANNUM FROM 5TH DECEMBER 1989. FURTHER ORDER THE DEFENDANTS PAY THE PLAINTIFFS COSTS OF AND INCIDENTAL TO THE APPLICATION HEARD ON 18TH OCTOBER 1989 TO BE TAXED. FURTHER ORDER THAT A TRIAL TAKE PLACE IN THE DISTRICT COURT AT GYMPIE WITH RESPECT TO THE BALANCE OF THE PLAINTIFF'S CLAIM. FURTHER ORDER THE RESPONDENT PAY THE APPELLANTS TAXED COSTS OF THE APPEAL" -- 3 of 13 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT Appeal No. 119 of 1990 Before the Full Court Mr. Justice McPherson A.C.J. Mr. Justice Shepherdson Mr. Justice Williams BETWEEN : COUNCIL OF THE SHIRE OF NOOSA (Plaintiff) Respondent AND: MAPPS INVESTMENTS PTY. LTD. (First Defendant) First Appellant AND: PAUL HENRY STAGG and MARIJKE JOHANNA STAGG (Second Defendants) Second Appellants JUDGMENT - G.N. WILLIAMS J. Delivered the JLSth day of August, 1991. CATCHWORDS : Practice - summary judgment - repudiation of contract - damages - set-off - hold no claim - claim under collateral contract - held triable issue. Counsel: Mr. Wensley for Appellants. Mr. Mack for Respondent. Solicitors: N.R. Barbi for Appellants. Nicol Robinson & Kidd t/a for Wakefield Sykes for Respondent . Hearing date: 18th and 22nd July, 1991 -- 4 of 13 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT BETWEEN : Appeal No. 119 of 1990 COUNCIL OF THE SHIRE OF NOOSA (Plaintiff) Respondent AND: MAPPS INVESTMENTS PTY . LTD. (First Defendant) First Appellant AND: PAUL HENRY STAGG and MARIJKE JOHANNA STAGG (Second Defendants) Second Appellants JUDGMENT - G.N. WILLIAMS J. Delivered the 1~&th day of August, 1991 . The respondent Council obtained summary judgment in the District Court at Gympie against the first and second appellants in the sum of $65,002.66 together with interest as provided for therein. The appellants have appealed contending either that they should have unconditional leave to defend or that the judgment should be varied so that it was for the sum of outstanding management fees with appropriate interest and there be leave to defend as to the balance of the claim. There were two components in the respondent's claim. Firstly, an amount being arrears of management fees to 25th May, 1989 together with interest pursuant to the management agreement to the date of the plaint. And secondly, a claim said to be for arrears of rates with respect to garbage services as at 30th -- 5 of 13 -- 2 June, 1989, together with statutory interest to the date of the plaint. On the hearing of the appeal counsel for the appellants conceded that the arrears of maintenance fees and interest thereon in the sum of $48,131.10 were due and owing by the appellants to the respondent. On the hearing of the summary judgment application, and on appeal, it was contended that there was a triable issue as to the basis of the claim for garbage fees and as to its amount. Further, it was the appellants' contention that the respondent had repudiated the management agreement in circumstances entitling them to recover substantial damages for breach of contract; it was contended that they were entitled to set-off that claim against the amount owing for management fees. Further, the appellants asserted a set-off with respect to a claim for damages to an office building; I will say more of that later . I will deal first with the appellants' contention that the respondent wrongfully repudiated the management agreement. By letter dated 13th April, 1989 the Acting Shire Clerk of the respondent, Mr. J.F. Kelly, wrote to the solicitor for the appellants referring to a Council resolution recording the basis on which the respondent would agree to payment of the outstanding and accruing fees under the management agreement. The letter specified amounts and dates for payment and went on to state that "should any of these payments not be made in full by the due date, the Management Agreement is to be terminated forthwith and recovery proceedings for any debt outstanding initiated without further reference to Council." By letter of 18th April, 1989 the appellants' solicitors confirmed the figures as stated in Kelly's -- 6 of 13 -- 3 letter with respect to the outstanding fees. It would appear that the instalment due on April 21 was paid, leaving instalments due on May 19 ($17,400.00) and June 23 ($24,000.00). Then on 18 th May, 1989 Paul Stagg, one of the second appellants, forwarded a handwritten letter signed by him to Mr. Noel Play ford, the Shire Chairman of the respondent. In the course of that letter he said: "The frightening state of affairs is that we have almost no hope of recovering the losses under the current trading arrangements and conditions. We are forced to advise the current management arrangements can no longer be accepted and we require their termination effective close of trading 19th May, 1989. It is not our intention nor is it implied that we are threatening to vacate forthwith and leave Council with no management, but rather we must discuss a more equitable arrangement for each other. Mapps Investments accepts that there is an outstanding debt which they are in no position to meet and do require a deferment of the debt so that May becomes and June becomes July, payments respectively." The Council replied by letter of 25th May, 1989 which, so far as is material, stated: "I acknowledge receipt of your letter of 18th instant notifying your intention to terminate the management agreement as of 19 May, 1989 and advise that the Council accepts such repudiation and hereby rescinds the said agreement." That letter was signed by J.F. Kelly, the Acting Shire Clerk. The appellants ' solicitors replied by facsimile transmission of even date in which he stated: "I refer to previous advices and I am instructed that you have given oral notice to my client -- 7 of 13 -- to vacate the caravan park and deliver up possession to the Noosa Shire Council. I further understand that there have been negotiations and that these negotiations have not been concluded amicably. My client is now prepared to deliver up possession and determine agreement. However, my client is presently 'holding over' and requires reasonable and proper notice in writing." The respondent's reply was also by facsimile transmission on 25th May, 1989. So far as is material the letter was in the following terms: "I wish to advise that Mr. Stagg has already given the Council written notice of termination of the agreement effective at the close of business on 19 May, 1989. By notice in writing under the hand of the Acting Shire Clerk, Council has now accepted your client's repudiation of the agreement. Given this fact and the fact that your client is in default under the payments provision of the agreement, he is not entitled to further notice. The Council has made arrangements to install a new Manager this afternoon and requires Mr. Stagg to vacate by that time. I am instructed that the Council will allow Mr. Stagg reasonable access to the park to remove chattels but not fixtures." The reply from the appellants' solicitors was a letter dated 26th May, 1989. All that need be quoted is the following extract : "My client is presently terminating activities at the Caravan Park. My client seeks to remove the following items 1 . A steel shipping container. 2. The demountable office." It was contended that the letter under the hand of Stagg of 18th May, 1989 was "non-repudiatory", and in any event as it was not addressed to the Council it was not capable of acceptance by the Council. In his affidavit placed before the Chamber Judge Stagg asserted that he merely wished to communicate with Playford -- 8 of 13 -- 5 in his capacity as Shire Chairman so that he could in turn liaise with other councillors on the matter. The payment due on May 19 and the amount thereof, namely $17,400.00, is included in the amount now sued for. Counsel for the appellants referred to the observation by Brennan J. in Laurinda Ptv. Ltd, v. Capalaba Park Shopping Centre Ptv. Ltd. (1989) 166 C.L.R. 623 at 647 that "repudiation is not ascertained by an enquiry into the subjective state of mind of the party in default". So much can be accepted; in order for there to be repudiation there must be conduct conveying to the other party the defaulting party's inability to perform the contract or evidencing an intention not to perform it or evidencing an intention to fulfil it only in a manner substantially inconsistent with the obligations thereunder and not in any other way. That test is to be derived from a series of authorities to which reference is not necessary. The appellants' argument, in my view, concentrates far too much on the handwritten letter of 18th May. It must be considered in the context of the communications and conduct to which I have referred. It is conceded by the appellants that there were substantial arrears under the management agreement. It was not submitted that the Council was not entitled to resolve that if arrears were not paid in accordance with the dates and amounts specified in the Council letter of 13th April, 1989 the management agreement should be terminated forthwith. It is conceded that the amount of $17,400.00 payable in terms of that letter on 19 th May was not paid. The accuracy of Stagg's statement in the letter that the first appellant was not in a -- 9 of 13 -- 6 position to pay the arrears was not challenged. The letter of 1 8th May in clear and unequivocal terms called for termination of the management agreement as of close of trading on 19th May. When the Council responded to the letter of 18th May by treating it as a repudiation of the agreement and on that basis rescinded the agreement, there was no immediate response from the appellants contending that the Council was not entitled so to act. Rather the subsequent correspondence was more concerned with the mechanics and consequences of the termination of the agreement. It should also be recorded that there was no suggestion made in the course of argument on appeal that the respondent was not entitled to assert in its letter of 13th April that failure to meet the arrears in accordance with the terms thereof would entitle the Council to terminate the agreement. In those circumstances I have come to the conclusion that it is clear beyond doubt that there was a repudiatory breach by the first appellant which was accepted by the respondent. The evidence clearly establishes that the first appellant was in breach of the management agreement and that in consequence at all material times the Council was in a position to elect to determine the agreement. Having considered the evidence placed before the Chamber Judge, and given due consideration to the argument addressed to this Court by counsel for the appellants, I am not persuaded that the appellants have raised a triable issue on this point. After termination of the agreement there was some dispute between the parties as to the demountable office. But ultimately -- 10 of 13 -- 7 the respondent did concede that it was the property of the first appellant, and that the first appellant was entitled to remove it. In his affidavit Stagg says with respect to that office: "I have had an opportunity to inspect the office recently and it has been vandalised whilst under the control of the Council or its servants or agents and I estimate that damage in the sum of $5,000.00." On the basis of that it was submitted that the appellants had a claim for damages against the Council in the sum of $5,000.00, and that sum should be set-off against the outstanding management fees. This is a situation wherein the defendant must "condescend upon particulars" (per Lord Blackburn in Wallingford v. Mutual Society (1880) 5 App. Cas . 685 at 704) and particularity is singularly absent in this instance. The nature of the damage is not disclosed and the estimate of $5,000.00 appears to be no more than a calculated guess by the deponent. The learned Chamber Judge observed that he was "not satisfied that this matter represents any basis for defeating or delaying the plaintiff's claim". In my view he was correct in so stating. If the appellants do have a claim in this regard then it may be prosecuted in an action in the appropriate court. But they have not brought forward sufficient particularity at this stage to warrant the court taking the claim into account in determining the extent of the judgment to which the respondent is presently entitled. It therefore follows that the appellants have not succeeded in establishing any right to set-offs which should be taken into account when considering the application for summary judgment. It remains to consider the matters which they contend give rise -- 11 of 13 -- 8 to a triable issue with respect to the Council's claim for rates for garbage services. The plaint prima facie suggests that the claim for garbage services was derived from the terms of the management agreement previously referred to. But that is not the case. As the learned Chamber Judge held, the matter of payment for garbage collection was the subject of "more detailed discussion and agreement from time to time, between the parties". There is a great deal of material in the record which relates to those discussions. A great deal of time was spent during the course of argument in taking the court to various documents said by the one side to evidence a concluded agreement with respect to garbage services, and by the other side to indicate that a stage of finality had not been reached. Having considered the documents it appears to me that the real position can only be ascertained when oral evidence is received as to the discussions to which the correspondence advert and which would place the various documents in proper context. The learned Chamber Judge was considerably influenced by the fact that the appellants paid an amount of $4,139.00 for garbage services in the year 1985-86 without argument; he apparently reasoned that that constituted an admission that rates for such services were payable. But even if that reasoning be correct it is not relevant to determining the quantum of the amount outstanding for garbage services, and quantum was a matter clearly in issue on the appellants' case. It is not desirable that I say any more about the evidence on this particular aspect of the matter, because I have come to -- 12 of 13 -- 9 the conclusion that the appellants have demonstrated there is a triable issue, and that particular claim matter must go to trial. As the appellants do not have any defence to the claim for management fees the respondent should have judgment for that amount. No proper basis has been established for staying execution with respect to that judgment. I would therefore order that the judgment appealed from be set aside and that in lieu thereof there be judgment for the plaintiff against the defendants for the sum of $44,060.41 together with interest on that amount at the rate of 18 per cent per annum from the 5th day of December, 1989. I would further order that the defendants pay the plaintiff's costs of and incidental to the application heard on 18th October, 1990 to be taxed. There should be a trial in the District Court at Gympie with respect to the balance of the plaintiff's claim. I would order the respondent to pay the appellants taxed costs of the appeal . -- 13 of 13 --