Pattinson v Shortman[2010] QDC 475

DISTRICT COURT OF QUEENSLAND

1. [1]
   This application, filed 16 November 2010 by defendants, seeks an order pursuant to rule 188 Uniform Civil Procedure Rules 1999 (UCPR) for leave to withdraw admissions in a defence, specifically paragraphs 1, 2 and 3 of the defence and for leave to amend the defence.

2. [2]
   The application is opposed by the plaintiff/respondent.

3. [3]
   The proceeding in this Court is a claim for damages consequent upon non completion of a contract for sale of land by the plaintiff to the defendants, dated 29 May 2008. Paragraphs 1, 2 and 3 of the statement of claim allege that by that contract the plaintiff sold the land to the defendants, that it was sold subject to an easement, there was a deposit of $5000, provisions for a building and pest inspection and report by a certain date, for settlement 90 days after the date of the contract and that the terms of the contract were those in the form approved by the Real Estate Institute of Queensland (REIQ) and the Queensland Law Society (QLS) for a contract for houses and residential land. Particular terms of the contract were set out.

4. [4]
   On 26 August 2008 the defendants’ solicitor wrote to the plaintiff’s solicitor advising that the defendants were terminating the contract. The letter asserted:

• prior to the contract, there was no discussion of any easements;
• when inspecting the property with the real estate agent, the female defendant received a passing indication that there was an easement along the side of the property. As there was a driveway along the side of the property, she understood the reference to easement to mean an access easement, being the driveway on the other side of the fence. There was no suggestion to her there was a drainage easement on the property;
• the defendants had no recollection of seeing the words “Easement number 601138639” at the time they signed the contract;
• the male defendant found it extremely unlikely that if the words were on the contract he would have failed to notice them and to ascertain precisely what rights the easement granted;
• The easement was to the Maroochy Shire Council for underground drains, pipes, conduit, etc. A survey had indicated the house on the land encroached 0.96 of a metre across the easement. The right to maintain the house over the easement was inconsistent with the rights of the Council;
• The defendants were acting under a mistake when they entered into the contract. The detail of the easement was not disclosed prior to entering into the contract;
• The encroachment was significant and made the property significantly different from that inspected and the subject of the agreement.

5. [5]
   In the reference schedule of the pre-printed contract details of agent and seller, land description and address, and real estate agent as deposit holder were typed in. The buyers’ details, purchase price, deposit amount, inspection date and settlement details were handwritten in, in handwriting by what appears to be the same hand. In the space for title encumbrances in different handwriting “Easement number 601138639” has been written in.

6. [6]
   The plaintiff’s solicitors responded to the defendants’ solicitor’s letter on the same date, rejecting the defendants’ termination. Amongst other things, it was pointed out that the encroachment of the house over the easement was not inconsistent with the rights of the Council. Enclosed with the letter was a copy of a letter from the Council, together with a plan referred to therein, approved by Council. Council had consented to the house being completed over a portion of the easement. It was asserted the easement was disclosed to the defendants in the contract. A time, date and place for settlement was notified.

7. [7]
   The defendants did not attend settlement. The plaintiff forfeited the deposit. On 7 April 2009, the plaintiff commenced this proceeding. In the statement of claim, she asserted she had subsequently sold the property for a lesser price. She sought the difference in price and the amount of other expenses incurred, interest and costs.

8. [8]
   In their original defence, the defendants having admitted the matters earlier outlined, pleaded:

• the easement;
• that on the occasion of inspecting the property with the real estate they recalled the agent referred to an easement and pointed to a driveway which they presumed was an access easement, not the registered easement 601138639;
• they had no recollection of seeing the words “Easement number 601138639” written on the contract at the time they signed the contract;
• that an identification survey report they had obtained revealed the encroachment;
• the termination letter from their solicitor amounted to notice terminating the contract pursuant to clause 7.5(4) of the contract and was sent in accordance with clause 10.4 of the contract;
• a failure on the part of the plaintiff to mitigate her loss and counterclaim for return of the deposit and damages.

9. [9]
   On 27 October 2010 the defendants filed an amended defence. In it they denied paragraphs 1, 2 and 3 of the statement of claim. The defence asserted:

• they never entered into a contract with the respondent;
• when they signed the contract, the handwritten words “Easement number 601138639” were not included in the reference schedule in the contract against encumbrances;
• when they signed the contract their signatures were not witnessed;
• when they signed the contract it was undated;
• the contract they signed amounted to an offer to purchase the unencumbered property;
• when they received the contract back from the real estate agent, signed by the plaintiff, it was altered. It was dated, the words “Easement number 601138639” had been hand written in against title encumbrances and their signatures purported to be witnessed;
• the delivery of the contract signed by the defendants to the plaintiff amounted to an offer to purchase unencumbered property;

• the plaintiff’s counter offer was to sell the property encumbered by registered easement 601138639;
• the defendants did not accept the counter offer;
• no contract was ever entered into, alternatively if a contract was entered into, the defendants entered into it under a mistake of fact, believing the property was unencumbered because the space against title encumbrance in the reference schedule in the contract was blank when they signed the contract.

It denied wrongful termination, asserted the plaintiff had failed to mitigate her loss and counterclaimed for damages.

10. [10]
    Whether leave be granted to withdraw admissions lies in the Court’s discretion to be exercised judicially. Before the discretion will be exercised, the Court needs to be satisfied the discretion should be exercised. Leave to withdraw is not just for the asking on payment of costs.^[1]  Relevant matters include:

• how and why the admissions came to be made;
• the evidence surrounding the issues the subject of the admissions;
• whether there was likely to be a real dispute about the evidence;
• delay in making the application for leave to withdraw the admissions.^[2]

In Hanson Construction Materials Pty Ltd v Davey & Anor^[3] Chesterman JA said “the first consideration--- in an application to withdraw admissions must be whether the subject matter of the admission is truly contested--- If an applicant cannot demonstrate that there is a real dispute about the subject matter of the admission, no other considerations need be examined”.

11. [11]
    In Rigato Farms Pty Ltd v Ridolfi [2000] QCA 292 Williams J expressed the view that “a clear explanation on oath should be given as to how and why the particular admission or admissions came to be made and then detailed particulars given of the issue or issues which the party would raise at trial if the admission was withdrawn”. In Hanson Chesterman JA endorsed His Honour’s words where an admission is intentionally made.^[4] 

12. [12]
    The sworn evidence supporting the application is inadequate. There is no sworn evidence from the defendants themselves. The only sworn material is an affidavit by their solicitor in which he deposes that when the defendants initially instructed their solicitors they did not recall the easement details being written on the contract document when they signed it, but were unable to positively instruct that it was not. Otherwise the affidavit contains largely irrelevant hearsay material which does not contribute to any proof that the easement details were not written on the contract when the defendants signed it. It goes on to depose to the solicitor’s belief that their exists evidence in support of the allegation that the easement details were inserted on the contract after it was executed by the defendants and that there is now a genuine dispute about the facts and circumstances of the execution of the contract but that provides no support to the application. It deposes to a belief that if the facts and circumstances instructed by the defendants can be substantiated by evidence at trial, that there are prospects that a valid contract never came into existence. That also provides no adequate support to the application. As against that material, the plaintiff put sworn evidence before the Court in the form of affidavits from the sole director of the real estate company involved in the sale and the real estate agent with whom the defendants dealt, from that company.

13. [13]
    The agent has deposed that the handwritten details of the easement were on the contract when the defendants signed the contract. The director has deposed to the office procedure. The procedure was that when the company was appointed to sell a property, a standard REIQ contract was prepared by administration staff with property details inserted, the contract then being placed onto the property file, so it was ready for when a buyer wished to put an offer to the seller. He recalled reviewing the contract and noticing that the easement was written into the contract in handwriting. He queried an employee who he named whether it was her handwriting and why it was written in and not typed with the balance of the property details in the contract. He was told, and believed to be true, that once she had put the typed details into the contract and printed it, she realised the easement details were missing. She had written those details onto the contract under the heading “Title Encumbrances” in the reference schedule immediately after she had printed the contract. She then placed the contract in the file for use by the agent. It was the only contract on file ready for use. It was the contract subsequently signed by the defendants.

14. [14]
    The admissions sought to be withdrawn were admissions made by the defendants. They were not deemed admissions. The material in support of the application is inadequate to justify the leave sought being granted. The application is dismissed. The amended defence filed without leave in its present form cannot be sustained. Leave to file the amended defence is refused.   

15. [15]
    I order the defendants pay the plaintiff’s costs of the application.