Littlejohn v Julia Creek Town and Country Club Inc
[2011] QCA 260
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- Unreported Judgment
- Appeal Determined (QCA)
- Littlejohn v Julia Creek Town and Country Club Inc[2011] QCA 260
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Littlejohn v Julia Creek Town and Country Club Inc[2011] QCA 260
Littlejohn v Julia Creek Town and Country Club Inc[2011] QCA 260
SUPREME COURT OF QUEENSLAND
CITATION: | Littlejohn v Julia Creek Town and Country Club Inc [2011] QCA 260 |
PARTIES: | SONIA IVY LITTLEJOHN |
FILE NOS: | Appeal No 6303 of 2011 SC No 488 of 2008 |
DIVISION: | Court of Appeal |
PROCEEDING: | Application for Security for Costs |
ORIGINATING COURT: | District Court at Townsville |
DELIVERED EX TEMPORE ON: | 27 September 2011 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 27 September 2011 |
JUDGES: | Margaret Wilson AJA |
ORDER: | Delivered ex tempore on 27 September 2011:
|
CATCHWORDS: | APPEAL AND NEW TRIAL – APPEAL – PRACTICE AND PROCEDURE – QUEENSLAND – SECURITY – where respondent sustained personal injuries when she tripped in the appellant’s premises – where the respondent sued for negligence – where a judge of the Trial Division gave judgment in her favour for $160,705.68 – where the appellant appealed – where the Court of Appeal allowed the appeal and remitted the question of liability for determination by the District Court – where the District Court found that the respondent is liable to pay to the appellant the whole of the damages assessed by the Trial Division – where the appellant seeks payment by the respondent into court of the entirety of the judgment sum, including interest, plus an amount for her costs in the Trial Division and in the District Court – where pursuant to s 68 and s 69 of the Supreme Court of Queensland Act 1991 the final determination of liability rests with the Court of Appeal – whether respondent should be ordered to pay judgment sum into court – where the appellant also seeks security for costs of her appeal against the District Court determination – whether security for costs should be ordered, and if so, in what amount |
COUNSEL: | K C Fleming QC for the applicant M Grant-Taylor SC, with A Stobie, for the respondent |
SOLICITORS: | Connolly Suthers Lawyers for the applicant Turner Freeman Lawyers for the respondent |
MARGARET WILSON AJA: The respondent, Sonia Ivy Littlejohn, sustained personal injuries when she tripped in the appellant Julia Creek Town and Country Club Inc's premises. She sued the club for negligence and on 29 June 2010 a judge of the Trial Division gave judgment in her favour for $160,705.68. The Club appealed. Both liability and quantum were in issue on the appeal.
On 17 December 2010 the Court of Appeal delivered its judgment on the appeal. It declined to interfere with the assessment of quantum, but held that the trial judge's reasons on liability were inadequate. Accordingly, it allowed the appeal and remitted the question of liability for determination by the District Court. It ordered Mrs Littlejohn to pay the Club's costs of and incidental to the appeal and subsequently granted her an indemnity certificate pursuant to s 15 of the Appeal Costs Fund Act 1973.
The District Court delivered its decision on 23 June 2011. Its finding was that the Club is liable to pay to Mrs Littlejohn the whole of the damages assessed by the judge of the Trial Division on 29 June 2010. The Club has brought the matter back to the Court of Appeal by way of an appeal against the whole of the finding of the District Court pursuant to s 69(1)(b)(iii) of the Supreme Court of Queensland Act 1991, or alternatively by way of challenge to the finding pursuant to s 68(4) of that Act.
The notice of appeal was filed on 21 July 2011. Within five days, Mrs Littlejohn's solicitors wrote to the Club's solicitors a letter seeking payment in court of the entirety of the judgment sum, including interest, plus an amount of $100,000 as security for costs. They gave the Club's solicitors 14 days in which to respond. There was no response, and on 31 August 2011 the application presently before the court was filed.
It is an application by Mrs Littlejohn that the further prosecution of the appeal be made conditional upon the Club paying into court the judgment sum, interest pursuant to s 48 of the Supreme Court Act 1995 from 29 June 2010 to the determination of the application, and a sum for her costs of the proceeding in both the Trial Division of the Supreme Court and the District Court.
Mrs Littlejohn relies on rule 772(1) of the Uniform Civil Procedure Rules and the inherent power of the court to protect its own process as the foundation for her application. She also seeks an order for security for costs in the more orthodox form, and in that regard relies on rule 772(1) also.
Remittal does not deprive the Court of Appeal of the power or responsibility of final determination of the question remitted. Sections 68 and 69 of the Supreme Court of Queensland Act 1991 were considered by the Court of Appeal in Johns v Cosgrove [2002] 1 Qd R 57. I refer in particular to paragraphs 8, 9, 12, 72 and 73 of the reasons for judgment. In that case the plaintiff sued Chevron Queensland Limited and Cosgrove for damages for negligence.
The trial judge found each defendant negligent, that the plaintiff was guilty of contributory negligence, and that responsibility should be apportioned to the plaintiff to the extent of 45 per cent, to Cosgrove to the extent of 30 per cent, and to Chevron to the extent of 25 per cent.
There was an appeal on the ground that the judgment had been obtained by fraud and that fresh evidence had been discovered such that it could not reasonably be supposed that the same judgment against the defendants would have resulted. The Court of Appeal remitted the question of fraud to the Trial Division. A judge of the Trial Division found that the judgment had been obtained by fraud. The matter came back to the Court of Appeal pursuant to s 68(4) of the Supreme Court of Queensland Act 1991.
Thomas JA, with whom the other members of the Court agreed, observed that the Court of Appeal had to decide whether to accept the judge's determination in whole or in part, and that ultimately it would be necessary to consider whether the court was satisfied that the grounds relied upon by the appellants/defendants in their notice of appeal had been made out and to determine whether a new trial should be ordered.
His Honour considered the New South Wales Court of Appeal decision in Sedgwick v Law Society of New South Wales (New South Wales Court of Appeal No 40111 of 1992, 18 May 1994) as an example of an appellate court dealing with challenged findings of fact, reviewing them, noting a reservation, and accepting the conclusions subject to the reservation.
In the present case it is common ground that the final determination of liability rests with the Court of Appeal. Both parties submitted that the determination of the District Court is not a judgment capable of being enforced, and that there is presently no judgment. This may well be correct. The matter needs to be brought back to the Court of Appeal to have the determination of the District Court accepted, and for the Court of Appeal finally to dispose of the appeal.
Mrs Littlejohn has apparently not taken any step to bring the matter back to the Court of Appeal to have the determination accepted. Her counsel indicated during the course of submissions that the taking of such a step had been overtaken by the filing of the notice of appeal.
In its defence of liability the Club pointed to substantial discrepancies between Mrs Littlejohn's account of her fall in the notice of claim she served five months after the incident, and the case pleaded four years later and two years after an ergonomist had been retained and provided a report.
The Court of Appeal considered that the trial judge's reasons for accepting the version Mrs Littlejohn gave at trial were not adequately stated. The Club now complains that the District Court decision, too, was accompanied by inadequate reasons. It complains that the District Court judge failed properly to deal with discrepancies between the notice of claim and the case run at trial, and fails to deal with inconsistencies in Mrs Littlejohn's evidence. It complains that the District Court Judge palpably misused his opportunity to assess credibility. It seeks an order allowing the appeal on the grounds that Mrs Littlejohn's version of the facts was not proved, or alternatively, it seeks a retrial.
There is some force in the submission of Mrs Littlejohn's counsel that this is going over old ground. He submitted that she has two pronouncements in her favour. That is not strictly so. As counsel for the Club pointed out, the first finding in her favour has been set aside by the Court of Appeal, and the determination of the District Court awaits acceptance by the Court of Appeal. Suffice it to say at this stage that the Club's prospects on its appeal against the District Court determination are arguable.
Mrs Littlejohn is concerned that the Club will be unable to meet the judgment and costs orders so far in her favour, as well as the additional costs she is being forced to incur as a result of the further appeal.
The defendant is a club in Julia Creek, a small town in northwest Queensland. It has a membership of 513. It has a clubhouse which is a focal point of the social life of the local community. The clubhouse provides a venue for the annual Dirt and Dust Festival, which in turn provides sporting, entertainment and general recreational activities for the community.
At the time of Mrs Littlejohn's fall, the Club held public liability insurance. The insurer had conduct of the litigation until May 2009 when it went into provisional liquidation. The insurer was subsequently wound up and there is no suggestion that moneys will be available from the liquidation to meet any judgment which may be entered in favour of Mrs Littlejohn.
On 12 June 2009 the Club's then solicitors wrote to the solicitors who had been conducting the defence of the claim on instructions from the insurer, saying that the Club was in no financial position to afford any legal representation in the proceedings and that it would not have any ability to meet any judgment for damages, costs or interest either in whole or in part. Counsel for Mrs Littlejohn has submitted that there was never any explanation for those assertions, and that indeed the Club remains in that position.
On 23 October 2009 the Club engaged its own solicitors, who retained counsel. The trial took place on 16 November 2009 and two days in June 2010.
On 21 June 2010 the Club gave a mortgage over five parcels of land to the partners of its solicitors, Connolly Suthers.
In the first appeal the Club agreed to Mrs Littlejohn's request for security for costs. It raised $25,000, which was held in trust pending the determination of the appeal. Upon the Court of Appeal's decision being given, the amount of the security was released to the Club, which applied it towards payment of its costs.
Mrs Littlejohn was ordered to pay the Club's costs of and incidental to the appeal. The Club's solicitor has estimated those costs to be approximately $30,000. Its counsel has informed the court that it will not enforce that costs order until the matter is finally resolved by the Court of Appeal.
On the evidence it is clear that the Club has been propped up by funds from its members. In particular, the President, Mr Woodhouse, and his wife have advanced $30,000 for legal costs between November 2009 and 23 September 2011, and $70,000 for ongoing club expenses, on the basis that repayment be secured against the Club's assets. The Vice President, Mr Cook, has advanced sums totalling $62,340 between November 2009 and July 2011 to allow the Club to meet legal expenses, and three sums totalling $22,776 between July 2007 and April 2011 for ongoing expenses, on a similar basis. On 25 June 2010 a mortgage of the Club's premises in favour of Mr and Mrs Woodhouse as to one half share and Mr Cook as to the other half share was registered.
Over the course of the litigation, the Club has continued to maintain and improve its facilities, spending in excess of $142,000 in that regard. Of that amount, $85,000 has been spent since December 2010.
Over the last three months or so, the Club has been endeavouring to sell 11 gaming machines, apparently because they are infrequently used and expensive to maintain. They have not been sold to date.
According to both Mr Woodhouse and Mr Cook, if the Court makes the orders sought by Mrs Littlejohn the Club will have to sell assets in an orderly fashion to attempt to pay the judgment sum and costs. This will take a considerable period of time, probably extending well into 2012 and will cause the Club to cease trading, whereupon its facilities will be denied to its members, many of whom rely upon it as the sole source of sport and recreation in the district. It is inevitable, they say, that the Dirt and Dust Festival will cease to be held.
This is an unusual situation. As I have said, I consider that the matters raised by the Club in its notice of appeal are arguable, and that is a factor relevant to the exercise of the judicial discretion to make either or both of the orders sought. Of course, the question of liability was sent back to the District Court not because of any conduct of Mrs Littlejohn, but because the Court of Appeal considered the trial judge's reasoning was not adequately exposed. This has caused delay and expense to both parties.
In addition to the costs she has been ordered to pay the Club, Mrs Littlejohn has incurred her own costs of the appeal. Further, the costs incurred before the Trial Division and before the District Court have not been dealt with yet by the Court of Appeal.
Usually a successful plaintiff has a judgment on which it should execute. Often an unsuccessful defendant will seek a stay of execution pending appeal on the basis that if it pays the judgment debt and its appeal succeeds, it will not be able to recoup the money paid.
A judgment creditor is of course not a secured creditor, and even a Mareva injunction does not have the effect of converting a judgment creditor into a secured creditor. In Jackson v Sterling Industries Limited (1987) 162 CLR 612 at 617-618 Wilson and Dawson JJ observed that a Mareva injunction represents a limited exception to the general rule that a plaintiff must obtain his judgment and then enforce it. He cannot beforehand prevent the defendant from disposing of his assets merely because he fears there will be nothing against which to enforce his judgment, nor can he be given a secured position against other creditors. Other members of the Court made similar observations. At 625 Deane J observed that the purpose of a freezing order is not to create security for the plaintiff or to require a defendant to provide security as a condition of being allowed to defend. Its purpose is to prevent a defendant from disposing of actual assets so as to frustrate the process of the Court.
Mrs Littlejohn does not have a judgment in her favour on which she can execute. It would be wrong, in my view, for the Court to order the Club to pay the quantum which has been assessed into Court as a condition of the further prosecution of its appeal against the determination by the District Court on liability. To make such an order would, it seems to me, de facto elevate Mrs Littlejohn to a preferred status over other creditors.
I am, however, favourably disposed to ordering security for the costs of the appeal. The parties have, it seems, agreed that if security is to be ordered, the appropriate amount of the security is $30,000.
The orders I make are as follows:
(a)By 4 pm on 5 October 2011 the appellant Julia Creek Town and Country Club Inc provide security for the respondent Sonia Ivy Littlejohn's costs of the appeal against the determination by the District Court in the amount of $30,000 in a form satisfactory to the Registrar;
(b)The costs of and incidental to the application for security for costs are reserved;
(c)Otherwise the application is dismissed.