Charles John Ryman & Anor v Seymour CBD Pty Ltd (ACN 010 302 860) [1997] FCA 124 (28 February 1997)

CATCHWORDS

PROCEEDINGS - Notice of Motion - Application for summary dismissal of proceedings by respondent - whether frivolous or vexatious - whether abuse of process - allegations in statement of claim inconsistent with uncontradicted evidence - collateral purpose.

Federal Court Rules O 20 r 2

Trade Practices Act 1974 s 82

Charles John RYMAN and Valmai RYMAN v SEYMOUR CBD PTY LTD

ACN 010 302 860

No QG 116 of 1996

SPENDER J

BRISBANE

28 FEBRUARY 1997

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY No QG 116 of 1996

GENERAL DIVISION

BETWEEN: CHARLES JOHN RYMAN and VALMAI RYMAN

Applicants

AND: SEYMOUR CBD PTY LTD

ACN 010 302 860

Respondent

CORAM: SPENDER J

PLACE: BRISBANE

DATE: 28 FEBRUARY 1997

MINUTES OF ORDER

The Court orders:

1. The proceedings be dismissed.

2. The applicants pay the respondent's costs (including any reserved costs) of and incidental to the principal proceedings and the costs of and incidental to the notice of motion filed 22 August 1996, to be taxed if not agreed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY No QG 116 of 1996

GENERAL DIVISION

BETWEEN: CHARLES JOHN RYMAN and VALMAI RYMAN

Applicant

AND: SEYMOUR CBD PTY LTD

ACN 010 302 860

Respondent

CORAM: SPENDER J

PLACE: BRISBANE

DATE: 28 FEBRUARY 1997

REASONS FOR JUDGMENT

By a notice of motion filed on 22 August 1996 the respondent, Seymour CBD Pty Ltd (`Seymour'), seeks orders that the principal proceedings be dismissed pursuant to O 20 r 2 of the Federal Court Rules, on the basis that the proceeding is frivolous or vexatious or is an abuse of process of the court.

Order 20 r 2 provides, so far as is relevant:

" 2 (1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding -

(a) no reasonable cause of action is disclosed;

(b) the proceeding is frivolous or vexatious; or

(c) the proceeding is an abuse of the process of the Court,

the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding."

It is contended on behalf of Seymour that the case for the applicants in the principal proceedings, Mr Charles John Ryman and Mrs Valmai Ryman (`the Rymans'), must fail as being inherently incredible. In considering this contention, it is necessary to refer in detail to the evidence before the court concerning the misrepresentations pleaded. In the alternative, it is contended on behalf of Seymour that the principal proceedings involve an abuse of process, because the evidence establishes that the proceedings were not brought by the Rymans to enforce or vindicate any rights which they may have. Rather, Seymour alleges that the proceedings were brought to pressure Seymour into delaying or deferring completion of the contract at the centre of the Rymans' statement of claim.

There is no dispute about the principles to be applied concerning the summary termination of proceedings.

In Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598 at 602, Mason CJ, Deane and Dawson JJ said:

" It is important to note at the outset that the issue before the learned Master on the application for summary judgment was not whether Mr. and Mrs. Webster would probably succeed in their action against Sergeant Lampard. It was whether the material before the Master demonstrated that that action should not be permitted to go to trial in the ordinary way because it was apparent that it must fail. The power to order summary judgment must be exercised with `exceptional caution:' General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) [1964] HCA 69; (1964), 112 C.L.R. 125, at p. 129 and `should never be exercised unless it is clear that there is no real question to be tried' Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983), 154 C.L.R. 87, at p. 99. As Dixon J. commented in Dey. v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 C.L.R. 62, at p. 91:

` A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.'

Nowhere is that need for exceptional caution more important than in a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact. In such a case, it is essential that `great care...be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal' General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) (1964), 112 C.L.R., at p. 130; see also, Church of Scientology Inc. v Woodward [1982] HCA 78; (1982), 154 C.L.R. 25, at p. 31."

In General Steel (supra), Barwick CJ said at 129:

" ...cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; `so obviously untenable that it cannot possibly succeed'; `manifestly groundless'; `so manifestly faulty that it does not admit of argument'; `discloses a case which the Court is satisfied cannot succeed'; `under no possibility can there be a good cause of action'; `be manifest that to allow them' (the pleadings) `to stand would involve useless expense'."

And at 130 he said:

" Although I can agree with Latham CJ in [Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 C.L.R. 62 at 84] when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings , in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed."

In Walton v Gardiner (1993) 177 CLR 378, a majority of the High Court (Mason CJ, Deane & Dawson JJ), with Brennan and Toohey JJ dissenting, held that the Court of Appeal of New South Wales had properly stayed proceedings in the Medical Tribunal on the ground that the proceedings constituted an abuse of the Tribunal's process. At 392, the majority said:

" The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail." (citing Metropolitan Bank v Pooley (1885) 10 App. Cas. 210, at pp. 220- 221; and General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) [1964] HCA 69; (1964), 112 C.L.R. 125, at pp. 128-130).

In Williams v Spautz [1992] HCA 34; (1991-1992) 174 CLR 509 at 529, Mason CJ, Dawson, Toohey and McHugh JJ said:

" ...in more recent times it has been said, in our view correctly, that the predominant purpose is the criterion. That was the test applied by Lord Denning in Goldsmith v Sperrings Ltd [1977] 1 W.L.R. at p. 496; [1977] 2 All E.R., at p. 579 and by the English Court of Appeal in Metall & Rohstoff v Donaldson Inc. [1990] 1 Q.B 462. In giving the judgment of the Court in the latter case, Slade L.J. observed at p. 469:

` [A] person alleging such an abuse must show that the predominant purpose of the other party in using the legal process has been one other than that for which it was designed.''

It is, of course, well established that the onus of satisfying the court that there is an abuse of process lies upon the party alleging it. The onus is `a heavy one', to use the words of Scarman L.J. in Goldsmith v Sperrings Ltd [1977] 1 W.L.R. at p. 498; [1977] 2 All E.R., at p. 582 and the power to grant a permanent stay is one to be exercised only in the most exceptional circumstances [citing Jago (1989), 168 C.L.R., at p. 34; and see also Sang, [1980] A.C., at p. 455].

It is pertinent in the present case to note the observations of their Honours earlier at 529, where their Honours said:

" Inquiry into motivation alone might prove a fragile foundation on which to base an exercise of the power to grant a permanent stay. For that reason, apart from any other, it is more satisfactory to base an exercise of the jurisdiction in cases of improper purpose upon a use or threatened use of the proceedings for such a purpose. Then the conclusion which the court reaches is more likely to be founded upon objective evidence rather than subjective evidence of intention."

One example of proceedings being dismissed on this basis is found in Second Life Decor Pty Limited v Comptroller-General of Customs [1994] FCA 1273; (1994) 53 FCR 78. Heerey J said at 85:

" ...the present proceeding is an abuse of process not only because it is `foredoomed to fail'. Quite apart from its merits or prospects of success, the claim is an abuse of process because it is brought as a means of obtaining some advantage for which such proceedings are not designed or some collateral advantage beyond what the law offers: Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509; Goldsmith v Sperrings Ltd [1977] 1 WLR 478; [1977] 2 All ER 566; Packer v Meagher [1984] 3 NSWLR 486 at 492; Re Majory; Ex parte a Debtor [1955] Ch 600; Grainger v Hill [1838] EngR 365; (1838) 4 Bing (NC) 212; 132 ER 769."

The statement of claim which is the subject of attack in the present motion is disarmingly orthodox.

The applicants plead that by an instrument in writing dated 21 April 1994, they agreed to purchase a proposed lot, being a three bedroom apartment in `Admiralty Towers' from Seymour for the sum of $545,000.00. The Rymans allege that in negotiations in contemplation of such an agreement, one Michelle Harris, (`Ms Harris') who was a real estate agent with L J Hooker Brisbane Project Marketing, (the real estate company retained by Seymour as its agent to sell the apartment development, `Admiralty Towers'), made certain oral representations to the Rymans; namely, that upon completion of construction, the three bedroom apartments in `Admiralty Towers' would rent for the sum of $1,000.00 per week and that all lots or proposed lots in the development had been sold except for two three bedroom apartments. The conversation is said to have taken place at the site office of L J Hooker on or about 6 November 1993. It is said that there were no reasonable grounds for making the representation as to rental and that the representation as to sales was false. The applicants plead that in reliance upon those representations, they signed the agreement dated 21 April 1994 and provided bank guarantees in the sum of $54,500.00. The Rymans claim that by letter from their solicitors dated 29 July 1996, they rescinded the agreement.

The application by the Rymans seeks rescission, or the setting aside of a contract dated 21 April 1994, pursuant to s 87 of the Trade Practices Act 1974 (`the TPA'), under which the Rymans agreed to buy Unit 119, a three bedroom unit in the `Admiralty Towers' apartment block.

The evidence before me establishes that on 16 October 1993, both Mr and Mrs Ryman signed a letter of intent to purchase unit D on level 11 at `Admiralty Towers', Admiralty Wharf Brisbane, for $405,000.00. On the signing of that letter of intent, the Rymans agreed to pay $1,000.00. A cheque for $1,000.00 was paid to the solicitors for Seymour, the drawer of the cheque being VGO Pty Ltd ACN 010 911 322 trading as Century 21 Charles Ryman Real Estate Australia General Account. A trust account receipt reveals that the sum of $1,000.00 was paid by VGO Pty Ltd on 19 October 1993.

Mr Ryman is a real estate agent. Both Mr Ryman and Ms Harris have deposed to their versions of the conversation that occurred on 6 November 1993. Mr Ryman, in an affidavit filed on 18 September 1996 swears that Ms Harris told him on 6 November 1993 that there were no two bedroom units left for sale in the development and that there were only two three bedroom units left. Ms Harris, according to Mr Ryman, said that "these two three bedroom units would most certainly be sold in the very near future".

Mr Ryman in that affidavit says:

" I believed the statements made by Michelle Harris...concerning the rentals that would be obtainable, the non-availability of any two bedroom units and that there were only two three bedroom units which would be sold in the very near future."

He swears that after that meeting, he decided with his wife to proceed with the purchase of a three bedroom unit "relying on what Michelle Harris had told us about the rentals and sales of the units". He says that at a later meeting, Ms Harris showed him the plans to the two three bedroom units that were left. Mr Ryman further deposes that he told Ms Harris that he would choose between them in the next few days and that "days later I told her that I wished to proceed with Unit 119, the three bedroom apartment which later became the subject of the contract".

Mr Ryman claims that as at late 1993 and early 1994, he had no experience in the "prestige residential market" nor in respect of "CBD investments in that market", and he maintains that his experience in the real estate market was confined to ordinary residential household sales in suburban areas and low-priced motel accommodation outside the CBD. However, Mr Ryman was also at that time involved in a development of inner city strata title residential units at 40 Elizabeth Street. Mr Ryman says that this was "not a residential development. It was originally proposed to be a high-rise three star motel development".

Ms Harris denies that she made a statement on 6 November that the three bedroom apartments would bring in a rental of $1,000.00 per week. She says that she would not even have considered giving such advice to people she knew to be experienced real estate agents.

Furthermore, Ms Harris denies making the statement that there were no two bedroom units left. In fact, Ms Harris swears:

" On that occasion the Rymans in fact purchased a two bedroom unit being lot 72 in Admiralty Towers'".

Messrs Stubbs, Barbeler and Grant, the solicitors for Seymour, received by facsimile on 6 November 1993 instructions to prepare a contract for the Rymans for Unit 72, a two bedroom `D' type unit in `Admiralty Towers'.

A solicitor, Mr Philip Meyer, of Stubbs, Barbeler and Grant prepared a duplicate Contract of Sale for Unit 72, and on 8 November 1993 arranged for hand delivery of a letter enclosing the Contract of Sale in duplicate, a Purchaser's Acknowledgment in duplicate and a Section 66 Statement under the Auctioneers and Agents Act 1971 to Messrs Astills, the solicitors then acting for the Rymans.

The Purchaser's Acknowledgment is signed by each of Mr and Mrs Ryman and dated 10 November 1973. It, together with the Section 66 Statement and a bank guarantee from the Commonwealth Bank for $40,500.00 was received by Seymour's solicitors under a covering letter dated 11 November 1993.

The agreement bears the date of 18 November 1993, and is in respect of a two bedroom unit, Unit 72, for a purchase price of $405,000.00. The purchasers signed the architectural plan and the floor plan of Level 11 showing Unit 72. Each of those documents indicates that the unit agreed to be purchased pursuant to that agreement was a two bedroom unit.

Mr Ryman, somewhat unfortunately for the applicants, in an affidavit filed on 24 September 1996 says:

" Until I saw the contract for the purchase of unit 72...I had forgotten signing a contract to purchase a two bedroom unit in `Admiralty Towers I'. Prior to seeing the said contract on 23 September 1996, I believed that I had only paid a holding deposit of $1,000.00 on a two bedroom unit. I do not deny that I executed the said contract...I confirm that in signing the contract for the purchase of Unit 119 I did rely on the statements made by Ms Harris set out in my previous affidavit."

It simply cannot be true that, in signing a contract for a three bedroom unit, (Unit 119), Mr and Mrs Ryman relied on a representation by Ms Harris made on 6 November 1993 that there were no two bedroom units left, because on that day they had agreed to purchase a two bedroom unit, Unit 72. An agreement was in fact signed by the Rymans in respect of a two bedroom unit on 18 November 1994.

Ms Harris swears that on 6 January 1994, the Rymans attended the site office and told her that they had decided to purchase a second unit in `Admiralty Towers'. After discussions, Ms Harris swears:

" ...they told me they wanted to purchase Unit 119, a threebedroom `J' type unit on Floor 19. They told me they intended to live in this unit."

This conversation is not denied by Mr Ryman.

On that same day, the solicitors for Seymour received instructions from L J Hooker to prepare a contract of sale for Unit 119 and on 10 January 1994, duplicate contracts of sale for Unit 119, a Purchaser's Acknowledgment and a Section 66 Statement were hand delivered to Messrs Astills. By letter dated 25 January 1994, Astills wrote to the solicitors for Seymour enclosing, according to the letter, the contract of sale in duplicate executed by the Rymans, a copy of the Purchaser's Acknowledgment and a s 66 Statement.

The contract of sale for Unit 119 was subsequently executed by the vendor. It bears the date 21 April 1994.

Ms Harris says that on 11 January 1994 the Rymans told her they wanted to purchase another three bedroom unit, this time in `Admiralty Towers II', an adjoining apartment development. On that day Ms Harris sent instructions by facsimile for the preparation of a contract of sale for Unit 136 in `Admiralty Towers II' to Seymour's solicitors.

On 25 January 1994, the solicitors for the Rymans returned the contract for Unit 119 executed by the Rymans.

On 27 January 1994 the developer of Seymour wrote to its solicitors advising that:

" ...the purchasers of Unit 72 in Stage 1 (Ryman) have advised that they are prepared to sign a contract for Unit 136 in Stage 2 on the basis that we rescind the original Contract.

We are prepared to do this on the basis that should at a later date the Stamps Office wish to charge stamp duty for the earlier sale, the purchaser would be obliged to pay such an amount."

The letter of 27 January 1994 from Seymour to its solicitors refers to an agreement by the Rymans to sign a contract for Unit 136 in Stage 2 of Admiralty Towers on the basis that the original contract (being a reference to the two bedroom unit contract for Unit 72) be rescinded.

On 7 February 1994, the solicitors for the Rymans returned a signed deed of rescission of the contract in respect of Unit 72.

On 21 February 1994 the contract for the purchase of Unit 136 `Admiralty Towers' was executed. On 21 April 1994, as indicated earlier, the contract in respect of Unit 119 in `Admiralty Towers I' was executed.

The position then was that the contract for the purchase of Unit 72 in `Admiralty Towers I', entered into by an agreement dated 18 November 1993, had been rescinded. There was in existence an agreement made on 21 February 1994 in respect of Unit 136 in Admiralty Towers II for $568,000.00 and there was in existence an agreement for the purchase of Unit 119 in Admiralty Towers I for $545,000.00. The contract of sale for the purchase of Unit 119 bears the date 21 April 1994.

After it was disclosed that he had signed a contract in respect of Unit 72 in `Admiralty Towers I', Mr Ryman said in a later affidavit:

" The acquisition of a unit in Admiralty Towers II was independent of this transaction."

In the light of the authorities to which I have referred, I am very conscious that if there is any dispute of fact relevant to the existence of a claim which the applicants wish to make, I ought not to entertain any application for the summary termination of the principal proceedings.

Here, in my opinion, the position is that notwithstanding the terms of the applicants' statement of claim, the uncontradicted evidence is that on 6 November 1993 the Rymans agreed to purchase a two bedroom unit, Unit 72, on the 11th floor of Admiralty Towers I. Next, the evidence, not denied, is that on 6 January 1994 the Rymans told Ms Harris that they wanted to purchase Unit 119, a three bedroom unit on the 19th level of Admiralty Towers I and that they intended to live in that unit.

On 11 January 1994, the Rymans informed Ms Harris that they wished to purchase another three-bedroom unit, this time in Admiralty Towers II, but that they could only proceed with that purchase if Seymour would be prepared to rescind the contract of sale for the two-bedroom unit in Admiralty Towers I.

The question whether the statement of claim is frivolous or vexatious as disclosing no real cause of action is not answered simply by looking at the terms of the statement of claim in a factual vacuum. If, notwithstanding what appears in the pleading, the uncontradicted facts are contrary to those which are pleaded, justice dictates that reality, or substance, should triumph over form.

In the present application, I am not attempting to make any assessment of credibility but dealing only with evidence which is not in dispute or which is not challenged.

On that basis, I am satisfied that the proceedings should be struck out pursuant to O 20 r 2. Of the two representations alleged, that concerning the non-availability of two bedroom units is demonstrably false. It could not have been made. I do not, however, take into account the effect of that conclusion on the reliability or credit of Mr Ryman for the purposes of considering other issues.

On the day of the second alleged representation concerning rental income for the three bedroom units, (the making of which is denied in the sworn affidavit of Ms Harris), the Rymans had in fact agreed to purchase a two bedroom unit. In relation to the later decision to agree to purchase a three bedroom unit, Unit 119, the subject of the statement of claim, the uncontradicted evidence of Ms Harris is that the Rymans, at the time of communication of the decision to purchase that unit, indicated that they intended to live in the unit. I accept that there might have been some transferred relevance for that later decision in whatever may have been said on 6 November 1993. However, in light of the statement made by the Rymans of their intention to live in Unit 119, any representation by Ms Harris about the rental income of three bedroom units could not have been a causative factor in their decision to enter into the contract to purchase Unit 119; that decision was made some time in 1994 in consequence of an agreement to rescind the contract for Unit 72 .

I am conscious that there have been suggestions that the role of courts in dismissing matters in a summary way for want of merit should be widened. The rules in the Federal jurisdiction, however, despite such suggestions, are benevolent in the extreme, and it is only in the clearest case that one ought to determine that proceedings should be summarily dismissed. On the material before me, I am of the view that it would be manifestly unfair to the respondent to permit the bald allegations contained in the statement of claim to continue in the face of the admitted or uncontradicted evidence led before me. The administration of justice, in my view, would be brought into disrepute by countenancing what in my considered assessment is a `try on' dressed up as an arguable case.

The second basis for dismissing the application asserts that these proceedings were initiated, not for the "protection or vindication of particular legal rights or immunities, the maintenance or affection of particular legal relationships, and the imposition or enforcement of particular legal penalties, liabilities and obligations", (adopting the words of Brennan J in Williams v Spautz (supra) at 532), but for the collateral purpose of pressuring the vendor under the contract to grant an extension of time for completion.

The contract to purchase Unit 119, a three bedroom unit in `Admiralty Towers I' is dated 21 April 1994. On 1 December 1995, the Rymans' then solicitors, Astills, wrote to the solicitors for Seymour seeking a variation to the contract in respect of Unit 119 as follows:

" 1. An extension of time for completion by 12 months. If your client is so minded to grant this extension, please advise what the terms of the extension will be;

2. Alternatively, the existing Contract be terminated and a new Contract be entered into with respect to a unit of similar value in Admiralty Towers II.

3. Alternatively, completion of this Contract shall take place on the due date on the basis of Vendor finance for 90% of the purchase price for a period of 18 months at a rate of 12%."

By letter of 4 December 1995, Seymour advised that it did not agree to any variation.

The Building Units Plan was registered on 15 December 1995, and on 5 January 1996 Seymour's solicitors nominated 25 January 1996 as the date for completion.

On 9 January 1996 the Rymans' solicitors again requested an extension of time until 31 July 1996. That letter indicated a difficulty with cashflow as the reason for seeking an extension of time. The request was initially refused by Seymour but later acceded to, on the condition that the Rymans pay $20,000.00 as a prepayment of default interest. The Rymans agreed to this proposal.

On 2 July 1996, the solicitors for Seymour wrote to Astills enclosing documents required for settlement on 31 July 1996. No response was received and Seymour's solicitors wrote again on 9 July 1996.

On 25 July 1996, the solicitors for Seymour received by facsimile two letters; the first was from Burns Jameson, the new solicitors for the Rymans. It said in part:

" We have been instructed by our clients that they were induced to enter into the contract by misrepresentations made by your client's agents concerning, amongst other things, the rental achievable from the unit and the value of the unit.

The purpose of this facsimile is to notify you of our client's dispute and to reserve our clients' rights..."

Nothing is pleaded in the statement of claim concerning any representation about the value of the unit. This is the first time any allegation of misrepresentation was made on behalf of the Rymans.

The second facsimile was headed "WITHOUT PREJUDICE" and said in part:

" We are instructed by our clients that they are prepared to settle the dispute referred to in the open correspondence on the following grounds:-

1. That your client agrees to extend the date for completion under the contract to 31st January, 1997.

2. That in consideration of your client agreeing to extend the date for completion, our clients will pay to your client the sum of $20,000.00.

3. That time shall in all respects remain of the essence.

This offer remains open for acceptance by your client until 12 midday Thursday, 18 July, 1996."

The solicitors for Seymour wrote to Burns Jameson, rejecting the contentions in both letters and confirmed the date for completion as 31 July 1996.

On the afternoon of 29 July 1996, Seymour's solicitors received by facsimile a letter, referring to the representations later pleaded in the statement of claim concerning rentals of three bedroom units and to all proposed lots but for two three bedroom units having been sold, and giving notice that "our clients rescind that contract." The letter also provided:

" On instructions from our clients, we have issued an Application out of the Federal Court of Australia, Brisbane District Registry for appropriate relief. A copy of the Application with the annexed Statement of Claim will be served on you in due course.

We have been instructed to seek from you an undertaking that your client will not make demand under the bank guarantees provided by our client pending determination of the Federal Court proceedings. We have also been instructed to seek from your client an undertaking that you will not cause the trustee and stakeholder (under the Contract) to make such demand under the bank guarantee.

Should such an undertaking not be provided by 4.30pm, Monday, 29 July 1996 we will proceed for interlocutory relief before the Federal Court immediately."

At 4.00pm that afternoon, Seymour's solicitors were served with a document which bore a filing stamp "Registrar in Bankruptcy State of Queensland 29 July 1996". That statement of claim recited in paragraph 9(b) that the respondent had failed or refused to give the undertaking referred to in the letter of rescission. In fact, that statement of claim had been stamped by an officer of the Court on 29 July 1996 with an incorrect stamp and delivered to the articled clerk of the Rymans' solicitors who, in turn, had served that document that afternoon.

On 31 July 1996, a solicitor for the Rymans attended at Seymour's solicitors' office but the Rymans did not settle and it is agreed that the Rymans did not have arrangements in place to settle on 31 July 1996. A properly stamped copy of the statement of claim bearing the filing date of 1 August 1996 was served on the solicitors for Seymour on 13 August 1996.

Quite independently of my view expressed earlier, that the proceedings are without any merit and bound to fail, I am satisfied that in this case the proceedings initiated by the Rymans in this court had the predominant purpose of seeking to achieve the attempts that otherwise had been unsuccessful in pressuring Seymour into delaying or deferring completion of the contract.

This conclusion is supported by the consideration that the first time that complaints of misrepresentations were particularised was in the letter of 29 July 1996, just two days before the contract was due to settle and after an application for a further postponement of settlement had been refused. The second of the claimed representations is manifestly untenable in that contrary to Mr Ryman's recollection, he had, on 6 November 1993, agreed with his wife to purchase a two bedroom unit, Unit 72. The representation concerning rental (raised for the first time at deathknock) is quite inconsistent as an inducing factor, with the unchallenged evidence that the Rymans wished to live in Unit 119. The offer to "attempt to settle the potential litigation" with Seymour is nothing more than an attempt to secure an extension of time from them on the same terms as the previous six months extension.

On this ground also I would dismiss the principal proceedings by the Rymans.

I will hear the parties on costs.

I certify that this and the preceding nineteen (19) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.

Associate

Date: 28 February 1997

Counsel for the applicant : Mr H B Fraser QC

instructed by : Burns Jameson

Counsel for the respondent : Mr P A Keane QC with Mr A M Daubney

instructed by : Stubbs Barbeler Grant

Date of hearing : 24 September 1996