ACT v Gaillard & Gaillard [2009] ACTSC 3 (6 February 2009)

Last Updated: 16 March 2009

AUSTRALIAN CAPITAL TERRITORY v ROBERT GAILLARD & STEPHANIE GAILLARD

[2009] ACTSC 3 (6 February 2009)

PRACTICE AND PROCEDURE – summary judgment for plaintiff – action for possession – whether arguable defence possible – general principles – application refused

Australian Capital Territory (Self-Government) Act 1988 (Commonwealth)

Court Procedures Rules 2006, r 1146, 1149

Supreme Court Rules (repealed), o 15, r 1

Civil Procedure ACT

BC Cairns, Australian Civil Procedure, Lawbook Co., 5th Edition, 2002

Fancourt & Anor v Mercantile Credits Limited [1983] HCA 25; (1983) 154 CLR 87

No. SC 425 of 2008

Judge: Master Harper

Supreme Court of the ACT

Date: 6 February 2009

IN THE SUPREME COURT OF THE )

) No. SC 425 of 2008

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: AUSTRALIAN CAPITAL TERRITORY

Plaintiff

AND: ROBERT GAILLARD

First defendant

AND: STEPHANIE GAILLARD

Second defendant

ORDER

Judge: Master Harper

Date: 6 February 2009

Place: Canberra

THE COURT ORDERS THAT:

1. The plaintiff’s application of 25 July 2008 be dismissed.

2. The action be listed on 20 February 2009 for directions.

1. This is a plaintiff’s application for summary judgment for possession. The claim relates to two lots in the Parkwood Road recycling estate in the district of Belconnen (not the division of Belconnen within that district) which the defendants have probably been occupying as licensees. There may be an argument that they have been occupying the lots as tenants.

2. The lots are not the subject of separate legal title. They are part of Lot 1586, District of Belconnen, which is bounded on the north by the border between the Australian Capital Territory and the State of New South Wales, and on the east by Parkwood Road. The block lies generally to the west of the suburban divisions of McGregor and Holt. It is the subject of a ninety-nine-year lease from the Commonwealth to the Australian Capital Territory which commenced on 1 October 1999. The lease is registered (Volume 1558 Folio 94) and permits the Territory to use the land for any purpose permitted under the Territory Plan. The entire block is of some 108 hectares. An area in its north-eastern corner has been divided into about fifty generally rectangular lots of varying sizes, including the two lots in question. Lot 2053 is 6834 m² in area; Lot 2014 has an area of 515 m².

3. The application for summary judgment is supported by an affidavit of Mr BL Smith, a senior property officer with ACT Property Group, a unit within the Department of Territory and Municipal Services of the ACT Government. The defendants in opposing the application rely on an affidavit by the first defendant and an affidavit by Mr RJ Hodder, a work colleague of the defendants. The application proceeded on affidavit evidence. None of the deponents were cross-examined. Although I was informed that the plaintiff did not accept much of Mr Gaillard’s affidavit evidence as to conversations he had had with ACT employees, it seems to me that I must accept his evidence in that regard for the purposes of this application, taking account of the fact that he was not cross-examined and that the plaintiff called no evidence to contradict his assertions.

4. Mr Gaillard swore that he and his wife were the proprietors of a business known as Willburn Firewood. They had been “tenants” (his word) at what he called Parkwood Road Resource Estate since 1993. He exhibited a copy of a licence agreement between the ACT and Mrs Gaillard dated 30 April 1999 of an area shown on an attached plan as Block 1A, which appears to be part of what is now Lot 2053. The licence agreement recited the wish of the licensee “to operate a firewood storage and sales outlet at a facility at the Belconnen landfill” and permitted the licensee to split, store and sell firewood on the block. The agreement identified a contract administrator as the person occupying a specified position with ACT Waste, Department of Urban Services, then Mr WT Mitchell.

5. Mr Gaillard also exhibited a copy of a licence agreement dated 29 September 1999 between the ACT and a company, ACT Skip Hire Pty Limited, of which the defendants were directors. This licence agreement related to part of Block 1586, but the exhibited agreement does not include a plan stated to have been attached to the original. Mr Gaillard says that this licence related to another lot on the survey plan, Lot 2035, opposite and just south of Block 2053.

6. Mr Gaillard says that in mid-2002 he learned that the occupier of Block 2014 wanted to leave the site. He spoke to Mr R Whelan of ACT NoWaste. Apparently there was a shed or building of some kind on Block 2014 which suited Mr Gaillard for storage purposes. This would have been cheaper for him than putting a shed on his existing lot. He told Mr Whelan that he would proceed with the arrangement only if the two blocks were amalgamated for licence fee purposes, resulting in a cheaper rate than if the fee was charged on the two blocks separately. Mr Whelan said that he would “have to pass it by my superiors”. Mr Gaillard says that the arrangement “was subsequently agreed to”.

7. Mr Gaillard then says that in early 2003 he was asked, presumably by Mr Whelan, to relocate temporarily to Block 2053 because ACT NoWaste wanted to carry out improvements on Block 2035. At that time there were a number of occupiers on Block 2053, which I infer was for practical purposes divided into separate sub-lots.

8. In about March 2003, while the work on Block 2035 was underway, Mr Whelan spoke to Mr Gaillard. He said that the defendants would have to decide whether they wanted to go back to Lot 2035 and give up Lot 1A, or alternatively to take over the whole of Block 2053. The defendants decided to take over the whole of Block 2053, a larger block, with a view to establishing a rubbish transfer facility to offer a service to residents of Belconnen affected by the impending closure of the Belconnen tip. Mr Gaillard asked what would happen to the other occupants of the sub-lots of Lot 2053. Mr Whelan told him that they would be leaving in the near future. Mr Gaillard then asked about clearing of waste material on the lot. Mr Whelan told him that the block would be cleared of waste material. Mr Gaillard agreed to these arrangements. In about June 2003 the defendants (or perhaps their company) spent about $200,000.00 on plant and equipment. During 2004 they spent another $170,000.00 on additional equipment.

9. Mr Gaillard swears that he spoke to Mr Whelan on many occasions about waste material which had been left on Lot 2053. The other occupiers had left by the end of 2003, but the ACT never cleared the rubbish from the site. This included drums of used cooking oil, a burnt out shipping container, pallets, timber logs, and a vast amount of pine mulch covering the whole lot, in places up to 45 centimetres in depth. He spoke to Mr Whelan about this from time to time. Late in 2005 Mr Whelan gave him a key to a padlock which gave access via a back gate to the old Belconnen tip, and pointed out an area where rubbish from the lot could be dumped. The defendants removed, at their own expense, some three hundred m³ of rubbish to the tip. Still most of the site was unusable because of rubbish which remained. The defendants in protest ceased to pay their licence fees for Lot 2053 in May 2005. Three months later they received a letter of demand for the arrears from the ACT Government Solicitor. They wrote back explaining in some detail their reasons for dissatisfaction.

10. On 15 June 2005, the defendants were sent a letter signed by Mr P Donnelly, contracts manager, on the letterhead of ACT NoWaste, ACT Department of Urban Services, informing them that following “a rearrangement of responsibility for property management within the ACT Government” management of the Parkwood Road Recycling Estate would be transferred from ACT NoWaste to Property ACT. The letter did not explain in any detail what this meant to occupiers. The next letter of relevance received by the defendants was from Mr Charge, manager, Multi-Purpose Tenancies Section, Property Branch, ACT Department of Urban Services in December 2005. I infer that ACT NoWaste and Property ACT, or the Property Branch, were units of the Department of Urban Services, and that the relevant functions of that department are now carried out by the Department of Territory and Municipal Services. I infer that ACT Property Group, the unit where Mr Smith (the deponent of the plaintiff’s supporting affidavit) works is to all intents and purposes identical with the Property Branch of the Department of Urban Services as it was in 2005. There is no suggestion that any of these units or departments had any independent legal existence: I am satisfied that all were and are part of the Australian Capital Territory, the entity constituted as a body politic under the Australian Capital Territory (Self-Government) Act 1988 (Commonwealth). A complicating factor for the purposes of the present proceedings is that the officers of the property unit, variously named Property ACT, Property Branch and ACT Property Group, have in their correspondence with the defendants conveyed the impression that their unit is a legal entity quite separate from ACT NoWaste. In Mr Charge’s letter of December 2005 to the defendants, and in subsequent correspondence, the defendants were given the impression that their previous relationship with the Territory was with ACT NoWaste and had nothing to do with the property unit. This appears to have been a convenient device for the staff of the property unit to wash their hands of the previous relationship between the plaintiff and the defendants.

11. Mr Gaillard swore that in January 2007 he met with Mr BL Smith for the first time. Mr Smith says in his affidavit that he joined the ACT Property Group in April 2006 and has “had the oversight of the conduct of the matter relating to recovery of the land the subject of these proceedings since May 2006”. Mr Gaillard says that in the course of their discussion, Mr Smith said words to the effect “it is Property’s responsibility to clean the yard and I will get onto this straight away. Once this is done you can sign the lease to enable you to develop the yard and become operational”. Mr Smith, at that meeting or soon afterwards, decided to give the defendants credit for some $22,550.00 arrears of licence fees, leaving a balance of $5,068.25. There is no evidence that these figures were negotiated or agreed to by the defendants, who appear at all times to have taken the position that Lot 2053 was effectively unusable for the purposes of their business, and that all the arrears should be waived. At all events, during January 2007 the property unit issued credit adjustment notes to the defendants, giving credit for the amount of $22,550.00.

12. On 17 January 2007, Mr Smith wrote to the defendants enclosing a form of licence agreement in respect of Lots 2053 and 2014. In his covering letter, Mr Smith said that the licence was offered on the condition that they paid “all readjusted arrears accruing in respect of your existing occupation since 1 January 2006, being a total amount of $5,068.25 due to 31 December 2006”.

13. In the letter Mr Smith also said that the provision of the draft licence was in no way to be treated as a waiver by the Territory of its right to bring an action for any previous breach of licence arrangements with the Territory for the period before 1 January 2006. In Mr Smith’s words, “that is a matter between you and ACT NoWaste”. The letter stated that the offer of the licence was to expire on 9 February 2007 if not accepted by then. The term offered was five years from 1 January 2007, at a fee of $12,860.75 plus GST per annum, payable monthly in advance. The draft licence agreement ran to thirty-five pages, and Mr Smith in his covering letter suggested that the defendants obtain independent legal advice before signing it.

14. Patently the defendants did not sign the agreement by the specified date. On 6 February 2007, Ms G Schmidt of the property unit wrote to the defendants demanding payment of $5,068.25 and noting that the licence offer would expire on 9 February. On 12 February she wrote again asking that the defendants contact her office to discuss arrangements for payment of the arrears. In late February, Mr H Kozlow, a senior property manager with the property unit, telephoned Mr Gaillard to suggest a meeting about the licence agreement and other outstanding issues. On 5 March 2007, Mr Charge and Mr Kozlow met Mr Gaillard. He told them about his meeting with Mr Smith two months earlier, when Mr Smith had acknowledged that it was the responsibility of the property unit to clear the rubbish from the lot. During the conversation, either Mr Kozlow or Mr Charge said words to the effect “we would like to get this problem resolved. Would you make a goodwill gesture to the amount of $1,500.00? We will organise contractors to clean the yard”. During the same month, Mr Gaillard paid the sum of $1,500.00.

15. On 11 April 2007, Mr Kozlow wrote to the defendants. He referred to the site meeting on 5 March 2007. He said that the defendants had stated during the meeting that there was additional information that would affect the monies claimed by the property unit, which would be submitted within about two weeks. The information had not yet been provided. Mr Kozlow asked that it be provided within ten days. He said that the property unit was genuinely trying to resolve the matter in a fair and equitable manner but that it had to be finalised as soon as possible, or the property unit would have no alternative but to take formal action.

16. The defendants responded in a lengthy letter on 3 May 2007, going through the history of the matter, explaining their position and submitting that the balance of the arrears should be waived and that they should be offered a fresh contract for five years with a five-year option.

17. Mr Kozlow replied by letter of 15 May 2007. He said that the question of the arrears was “a separate issue to which Property Group is not involved which you must address with ACT NoWaste”. He went on to say that the Property Group would arrange and pay for the removal and dumping of the previous tenant’s materials (woodchip, earth and minor debris). He then resubmitted the offer to reduce the arrears from some $25,700.00 to $5,068.25. He asked for a response about this within five working days. He said that the offer of the fresh licence agreement remained valid but unless the matter was finalised very shortly, he would “have no alternative than to refer the matter to the Government Solicitor for action in relation to breach of provisions of your tenancy which would include recovery of their legal costs”.

18. The defendants replied by letter on 3 June 2007. They pointed out that Lot 2053 had still not been cleared. They resubmitted their proposal of a fresh start with a new lease and no arrears. They enclosed photographs of the block illustrating the extent of the rubbish and debris.

19. They did not receive a reply to this letter. Instead, on 14 August 2007 the ACT Government Solicitor wrote to the defendants. They demanded payment of the amount of $5,068.15, less the $1,500.00 paid, plus licence fees from 1 January 2007. The letter said that if this was not acceptable, the ACT reserved its right to bring action for recovery for the full amount of arrears, and to commence action to remove the defendants from the site.

20. The defendants replied to this letter on 22 August 2007. They pointed out that they had been able to use only a small amount of the lot. They were still prepared to negotiate and to try to finalise an agreement. They had understood that their goodwill payment of $1,500.00 would lead to removal by the property unit or its contractors of the material left behind by previous tenants, which to date had not happened.

21. It appears that for some reason this letter of 22 August 2007 was not linked up with the Government Solicitor’s file. In November 2007, the Government Solicitor attempted to serve a notice to quit on the defendants. The process server handed the notice to a woman at the site who “made no comment of note”. The defendants say that they have never heard of this woman. She may have been a visitor or customer. The defendants say that the notice to quit never came to their attention. The plaintiff does not rely on service of the notice. Nothing further happened until 6 May 2008. The defendants remained in occupation. On 6 May 2008 the Government Solicitor wrote to them again asserting that they had not replied to the letter of 14 August 2007 (I am satisfied that they had done so) and that they had been served with notices to quit (it is now clear that they had not). The letter required the defendants forthwith to vacate the lots, remove their goods and chattels and “leave the lots in a clean and tidy condition having regard to their condition at the commencement of your occupation”. (One can understand and sympathise with the reaction of the defendants to the last of those requirements). The letter went on to say that in view of, inter alia, their failure to vacate the lots as required by the notice to quit, the ACT regarded both of them as trespassers. The Government Solicitor, the letter said, had instructions to commence proceedings forthwith for recovery of possession of the two lots, unless arrangements for “voluntary surrender” were made within seven days.

22. The defendants replied promptly to this letter. On 12 May 2008 they made the point that they were still waiting for the property unit to make good its offer to remove the rubbish and materials left by the previous tenants. They suggested that the Government Solicitor refer to their previous correspondence with the property unit and with ACT NoWaste.

23. In August 2008, the defendants met Mr Smith, in their words, in the hope of resolving the issue. Mr Smith said that he would like the matter resolved but would have to speak to Mr L Jansen about it. Mr Jansen joined the meeting and after a general conversation said that he would have to refer the matter to the Government Solicitor. He said that if it settled, the defendants would “have to pay the full amount”. The defendants were not sure what was meant by this.

24. Mr Gaillard swears that his business, Willburn Firewood, has operated out of the Parkwood Estate for approximately twenty years. If the defendants are forced to vacate, this will be the end of their business. He concedes that they stopped paying rent but he said that this was because they were not able to use the lot.

25. The defendants’ supporting affidavit by Mr Hodder verifies a conversation between Mr Gaillard and Mr Whelan in about May 2003 at the site, during which Mr Whelan assured Mr Gaillard that the rubbish would be removed from Lot 2053 and the site cleared.

26. That is a summary of the evidence on the hearing of the application. The Court does not have the benefit of a draft defence. It would be helpful, and should be regarded as the usual practice, for a defendant resisting an application for summary judgment, as is the case with a defendant seeking to set aside default judgment, to provide the Court with a draft defence. However, the fact that this was not done on the present application is not necessarily fatal to the defendants’ opposition to it.

27. The application is made pursuant to rule 1146 of the Court Procedures Rules 2006. The rule is relevantly in the following terms:

1146 Summary judgment—for plaintiff

(1) The plaintiff may, at any time after a defendant files a notice of intention to respond or defence, apply to the court for summary judgment against the defendant.

(2) The court may give judgment for the plaintiff against the defendant for all or a part of the plaintiff’s claim for relief, unless satisfied that—

(a) the defendant has a good defence to the claim for relief on the merits; or

(b) sufficient facts are disclosed to entitle the defendant to defend the claim for relief generally.

. . . . . . .

(4) The court may make any other order it considers appropriate.

. . . . . . .

28. Rule 1149 provides that evidence in support of an application for summary judgment must be given by affidavit unless the Court gives leave. Affidavits may contain statements of information and belief. The sources of the information and reasons for the belief must be stated. Documents may be annexed or exhibited to an affidavit. A deponent may not be cross-examined without leave of the Court.

29. The rule is the successor to order 15 rule 1 of the Supreme Court Rules which were in force until 2006. The principles to be applied are usefully summarised, with extensive reference to case law, by the learned editors of the commentary to the old rules found in Civil Procedure ACT. Counsel did not suggest that there was any issue as to the applicable principles and I do not propose to refer extensively to case law in these reasons.

30. I have also found helpful the explanation of the principles by Dr BC Cairns in Australian Civil Procedure (Lawbook Co., 5th Edition, 2002) at page 384 and following. I shall attempt a brief summary of the principles.

31. Summary judgment may be entered for a plaintiff, on application supported by affidavit evidence, if the Court is satisfied that there is no triable issue. The remedy is given sparingly. In accordance with the pronouncement of the High Court in Fancourt & Anor v Mercantile Credits Limited [1983] HCA 25; (1983) 154 CLR 87 at 99, it should be given with great care and only where it is clear that there is no question to be tired. Once it appears to the Court that there is an issue of fact or law, the proceeding must proceed to trial. The defendant may show that there is a factual dispute which, if resolved in the defendant’s favour, raises a defence. In this task the defendant bears an evidentiary onus. The defendant must show at least an arguable defence, and disclose the facts on which it is based. A simple denial of liability, or of the factual assertions in the statement of claim, is insufficient. It is unnecessary for the defendant to show an absolute defence. An arguable defence or case is sufficient. The power to enter summary judgment is a discretionary one and the Court may decline to exercise it even in cases where the plaintiff appears to be entitled to summary judgment, depending on the Court’s assessment of the circumstances. The Court will enter summary judgment only in a clear case where it is proper for the proceeding to be determined without a trial. The test has been framed in terms of “no real substantial question to be tried” and “no reasonable doubt that the plaintiff is entitled to judgment”. The defendant may discharge the evidentiary onus by proving a plausible ground of defence, or showing facts leading to an inference that at the trial the defendant may be able to establish a defence. Summary judgment should not be granted where there is a serious conflict of fact, and is inappropriate if a question of credit is involved, even if the Court has a strong prima facie view about the result.

32. In the present case, little of the history of the relationship between the plaintiff and the defendants was placed before the Court by the plaintiff in the affidavits supporting the application. Much of the evidence of Mr Gaillard, if accepted at trial, may be capable of supporting a defence to the claim for possession. The defendants may satisfy the Court of some equitable entitlement to continue in occupation of the land. Conceivably they might persuade a court that in the light of the history of the relationship, the plaintiff should be regarded as estopped from exercising a right to eject the defendants. I am left in a position where I am not satisfied that the plaintiff must inevitably succeed at trial, or that there is no serious issue to be tried between the parties. It seems to me that it is possible that the defendants may be able to establish a defence to the claim at trial. In those circumstances, I cannot deprive the defendants of their right to a trial of the action against them. The application for summary judgment will be dismissed.

33. It may be helpful for me to add a few words about the future course of the proceedings. If the action continues in the ordinary way, the legal costs on both sides are likely to be high, perhaps disproportionately to the matters in dispute between the parties. The plaintiff is likely to have to identify and locate a number of witnesses, some of whom may no longer be in its employ. Discovery of documents may be quite an extensive process and is always expensive.

34. At times during the history of the dispute, both parties have shown some willingness to negotiate, and to try to reach a compromise. At times it seems that the parties have come close to agreement. The process has not been helped by the fact that different units within the same department of the ACT Government have behaved as though they were separate legal entities, when plainly they are not. This difficulty should be readily capable of resolution at a more senior level in the department, and now that the Government Solicitor is involved.

35. I urge the parties to agree upon the appointment of a mediator with a view to resolving the dispute. Indeed, this is a dispute which, if necessary, I would be prepared to consider referring to mediation on the initiative of the Court. Mediation is in itself an expensive process, and it seems to me preferable for mediation of the dispute to be undertaken before further legal costs are incurred on either side in advancing the litigation.

36. My provisional view is that the plaintiff should pay the defendant’s costs of the application for summary judgment, but I shall hear the parties on the question of costs before arriving at a final view, in case there are factors of relevance which are presently unknown to me.

37. I would propose to adjourn the matter to my list in fourteen days, for such further directions as may be necessary.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 6 February 2009

Counsel for the plaintiff: Mr RP Clynes

Solicitors for the plaintiff: ACT Government Solicitor

Counsel for the defendants: Mr GJ Blank

Solicitors for the defendants: Elrington Boardman Allport

Date of hearing: 21 November 2008

Date of judgment: 6 February 2009