Johnson v SPJ Nominees Pty Ltd
[2011] QCA 263
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- Notable Unreported Decision
- Appeal Determined (QCA)
- Johnson v SPJ Nominees Pty Ltd[2011] QCA 263
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Johnson v SPJ Nominees Pty Ltd[2011] QCA 263
Johnson v SPJ Nominees Pty Ltd[2011] QCA 263
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Court of Appeal | |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | |
DELIVERED ON: | 30 September 2011 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20 September 2011 |
JUDGES: | Margaret McMurdo P, White JA and Fryberg J Separate reasons for judgment of each member of the Court, each concurring as to the orders made |
ORDERS: | 1.Grant an extension of time to apply for leave to appeal from the order of Durward SC DCJ on 15 March 2011, grant the application for leave to appeal, and allow the appeal to the extent of setting aside paragraph 10 of that order. 2.Grant the application for leave to appeal from the orders of Baulch SC DCJ of 23 and 30 March 2011 and allow the appeal to the extent of setting aside the following part of the order of 23 March 2011: "That the trial proceed as an undefended hearing in accordance with paragraph 10 of the order of Judge Durward SC" and paragraphs 4, 5 and 6 of the order of 30 March 2011. 3.Instead order that: (a) the defendants file and serve all affidavits and documents on which they intend to rely in the assessment of damages within fourteen (14) days of the pronouncement of these orders; (b)the defendants at the assessment of damages be permitted to only lead evidence which complies with order 3(a) above, unless a District Court judge otherwise orders; (c)the defendants advise the plaintiffs' solicitor within fourteen (14) days of pronouncement of these orders of the witnesses the defendants require for cross-examination; (d)the plaintiffs advise the defendants' solicitor within fourteen (14) days of the receipt of the defendants' affidavits and documents of the witnesses the plaintiffs require for cross-examination; (e)subject to any application by way of objection by the parties within fourteen (14) days of being advised that a witness is required for cross-examination, any witnesses in the assessment of damages may give their evidence by telephone; (f)the matter is to be listed for hearing at a time to be agreed by the parties or, failing agreement, as directed by the Registrar of the District Court at Townsville. 4.The appellant pay the respondents' costs of and incidental to the stay, the leave applications and the appeal on the indemnity basis to be assessed if not agreed. |
CATCHWORDS: | APPEAL AND NEW TRIAL – APPEAL - PRACTICE AND PROCEDURE – QUEENSLAND – POWERS OF COURT – ORDERS SET ASIDE OR VARIED – where orders were made in the District Court that the trial for the disputed assessment of damages for breach of contract proceed against the defendants as an "undefended hearing" if they failed to advise the plaintiffs of witnesses required for cross-examination within fourteen days of service – where the defendants persistently failed to comply with court orders – where the appellant deposed that he is now ready, willing and able to defend the claim – whether the interests of justice require that the orders of the District Court that the matter proceed as an "undefended hearing" are set aside District Court of Queensland Act 1967 (Qld), s 118, s 118(3) Uniform Civil Procedure Rules 1999 (Qld), r 5 Johnson v SPJ Nominees Pty Ltd & Ors [2011] QCA 121, cited |
COUNSEL: | G Radcliff for the appellant LR Middleton for the respondents |
SOLICITORS: | Robinson & Robinson Solicitors for the appellant Lee Turnbull & Co Solicitors for the respondents |
[1] MARGARET McMURDO P: The sad and sorry history of this matter has been set out comprehensively by Margaret Wilson AJA in Johnson v SPJ Nominees Pty Ltd & Ors[1] in which the second defendant appellant, Andrew William Johnson, successfully applied for a stay pending this hearing, conditioned upon him providing security in the sum of $10,000 for the costs of this appeal:
"The notice of appeal was filed on 20 April 2011. … It was an appeal against part of an order made in the District Court at Townsville on 23 March 2011 that the assessment of damages proceed as an undefended matter.
The first defendant below, Black Watch Sport Fishing Boats Pty Ltd, is not a party to the appeal. It agreed to build a vessel for the plaintiffs, who are the respondents to the appeal. Johnson (that is, the appellant) guaranteed the obligations of the company and indemnified the plaintiffs against any losses in consequence of the company's failure to perform.
The plaintiffs (that is, the respondents to the appeal) purported to terminate the contract because of the company's failure to remedy certain defaults, namely its failure to complete construction by the scheduled delivery date and its failure to complete specified items of work by certain dates.
The respondents took possession of the part completed vessel. Between the contract and the termination the respondents paid instalments in excess of $470,000. They allege that the part completed vessel was valued at $80,000.
The respondents claimed against the company the amount of the instalments they had paid less the $80,000 plus certain additional costs, their claim being in all a little short of $410,000.
They claimed against the company damages for breach of contract or duty. They claimed against the appellant judgment in the amount of the damages and costs awarded against the company in terms of the guarantee and indemnity.
This proceeding was commenced in the Supreme Court in Townsville on 29 January 2010. On 26 March 2010 default judgment was entered against the company for damages to be assessed. The company filed an application on 7 June 2010 to set aside the default judgment. That application came before Justice Cullinane on 11 June 2010. In the meantime default judgment had been entered also against the appellant for damages to be assessed by the District Court. His Honour treated the application as one by both defendants. He dismissed the application. He made orders affecting the company, namely that the assessment against it should proceed in the District Court and an order for costs against it.
There was then a series of directions orders made in the District Court. The first order was made by Judge Durward on 3 August 2010 and the next was also made by him on 8 November 2010.
At about this time it came to light that the company had been deregistered and it was subsequently reinstated to the register by ASIC on 12 November 2010.
On 15 March 2011 the matter again came before Judge Durward. It had been set down for hearing on 18 March 2011, but his Honour vacated that hearing date and ordered a trial review before Judge Baulch on 23 March 2011.
Judge Durward gave various directions, including a direction that the defendants (that is, the company and the present appellant) give the plaintiffs (that is, the respondents) disclosure by providing a list of documents by 18 March 2011 and copies of documents on the list by 23 March 2011. At the end of the directions his Honour ordered, "(10) In the event that the first and/or second defendants fail to do any of the acts, including the payment of costs, required of it/him by these orders by 4 pm on Friday, the 18 March 2011, the trial will proceed on the 23 March 2011 as an undefended hearing."
The matter came before Judge Baulch on 23 March 2011. There was some argument about the extent of the defendants' compliance with the orders and it was conceded by counsel acting on their behalf that disclosure had been deficient."
[2] It should also be noted that the defendants were self-represented from time to time but on occasions they directly briefed Mr Radcliff of Counsel. It is beyond doubt that the defendants persistently failed to comply with court orders. On 23 March 2011 Judge Baulch noted that they had instructed solicitors only the previous day (22 March 2011). His Honour expressed the view that in doing so they had left it far too late. Judge Baulch concluded that the defendants had shown no good reason for further delaying the assessment of damages and ordered "that the trial proceed as an undefended hearing in accordance with paragraph 10 of the order of Judge Durward SC". It seems neither Judge Durward nor Judge Baulch were able to hear the assessment of damages because of their personal connections with one of the plaintiffs.[2] It therefore seems probable the matter would not have proceeded on 23 March even had the defendants complied with Judge Durward's orders.
[3] The matter was listed for a further mention on 30 March 2011 when Judge Baulch made the following relevant orders:
"4.That the Defendants advise the Plaintiff's Solicitors, within fourteen (14) days of being so served, which of the Plaintiff's witnesses the Defendants require for cross-examination.
5.That, if the Defendants fail to so advise the Plaintiff's Solicitors within the said period of fourteen (14) days, then the hearing proceed on an undefended basis, without cross-examination of the Plaintiff s witnesses.
6.Subject to any application by way of objection, by or on behalf of the Defendants within the said period of fourteen (14) days, each and every such witness by or on behalf of the Plaintiff required for cross-examination, may give his or her evidence by telephone." (errors in the original)
[4] Johnson's notice of appeal in respect of Judge Baulch's order of 30 March 2011 was filed within time but, as it was an interlocutory order, Johnson had no right of appeal: see s 118 District Court of Queensland Act 1967 (Qld). He should have filed an application for leave to appeal under s 118(3). This Court, however, has treated the notice of appeal as an application for leave to appeal from Judge Baulch's orders of 23 and 30 March 2011 and as an application for an extension of time to apply for leave to appeal from order 10 of Judge Durward's order of 15 March 2011.
[5] There has been no appeal from Justice Cullinane's dismissal of the first defendant's application to set aside the default judgment. It is clear, therefore, that the only issue now between the parties is the assessment of the plaintiffs' damages against both defendants. It is also clear from the transcript, and the material before Judge Durward, Judge Baulch and this Court, that the defendants sought to dispute the quantum of the claim, and at some material times were represented only by Johnson who is not a lawyer.
[6] Appellate courts are reluctant to give leave to appeal from discretionary interlocutory orders and will only do so if the interests of justice demand it. But the orders the subject of this appeal were extraordinary in so far as they provided for the disputed assessment of damages to proceed "undefended". The parties were unable to refer this Court to any rule in the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) which provides for such an order. Nor is it clear what the expression "undefended hearing" means in this context. Judge Baulch seemed to think it precluded the defendants from calling evidence but allowed them to cross-examine the plaintiffs' witnesses but "not produce material to contradict them".[3] Whatever Judge Durward intended the expression to mean, it was concerning that it purported to fetter the defendants' right to challenge the plaintiffs' claim on the sole issue left in dispute, namely the quantum of damages the defendants must pay the plaintiffs.
[7] The respondents, in resisting Johnson's applications in this Court and in defending the orders below, relied on UCPR r 5. But this rule requires not only the "expeditious resolution of the real issues in civil proceedings at a minimum of expense" but also their just resolution. Rule 5(4) allows the court to "impose appropriate sanctions if a party does not comply… with an order of the court". The orders the subject of this application were, in the circumstances here, neither just, appropriate, nor comprehensible. They would deny the defendants the opportunity to effectively defend the plaintiffs' significant quantum claim against them. There was no reason why the expense and inconvenience suffered by the respondents as a result of the defendants' grossly unsatisfactory delay and their failure to comply with court orders could not be remedied by indemnity costs orders in the respondents' favour. The interests of justice require that the applications be granted and the appeal allowed so that the orders can be set aside, in so far as they state the assessment of damages is to proceed undefended.
[8] Mr Radcliff seemed to accept in this Court that the defendants were, as Judge Durward identified, in contumelious disregard of court orders. But the evidence before this Court suggests that, at material times, Johnson was self-represented and struggling to raise funds to pay for legal representation to defend himself and the first defendant. He did make some efforts, allbeit unsatisfactory and ineffectual ones, to comply with Judge Durward's directions. He has now met the previous cost orders against him in this action and has also paid $10,000 into court by way of security for costs in this application. He has deposed that he is now able to meet all time limits placed on him. Mr Radcliff stated that Johnson is now ready willing and able to defend the claim; he would have all material upon which the defendants intend to rely filed and served within 14 days.
[9] I propose the following orders:
1.Grant an extension of time to apply for leave to appeal from the order of Durward SC DCJ on 15 March 2011, grant the application for leave to appeal, and allow the appeal to the extent of setting aside paragraph 10 of that order.
2.Grant the application for leave to appeal from the orders of Baulch SC DCJ of 23 and 30 March 2011 and allow the appeal to the extent of setting aside the following part of the order of 23 March 2011: "That the trial proceed as an undefended hearing in accordance with paragraph 10 of the order of Judge Durward SC" and paragraphs 4, 5 and 6 of the order of 30 March 2011.
3.Instead order that:
(a)the defendants file and serve all affidavits and documents on which they intend to rely in the assessment of damages within fourteen (14) days of the pronouncement of these orders;
(b)the defendants at the assessment of damages be permitted to only lead evidence which complies with order 3(a) above, unless a District Court judge otherwise orders;
(c)the defendants advise the plaintiffs' solicitor within fourteen (14) days of pronouncement of these orders of the witnesses the defendants require for cross-examination;
(d)the plaintiffs advise the defendants' solicitor within fourteen (14) days of the receipt of the defendants' affidavits and documents of the witnesses the plaintiffs require for cross-examination;
(e)subject to any application by way of objection by the parties within fourteen (14) days of being advised that a witness is required for cross-examination, any witnesses in the assessment of damages may give their evidence by telephone;
(f)the matter is to be listed for hearing at a time to be agreed by the parties or, failing agreement, as directed by the Registrar of the District Court at Townsville.
4.The appellant pay the respondents' costs of and incidental to the stay, the leave applications and the appeal on the indemnity basis to be assessed if not agreed.
[10] WHITE JA: I have read the reasons for judgment of the President and agree with her Honour’s reasons and the orders which she proposes.
[11] FRYBERG J: I have had the benefit of reading the judgment of Margaret McMurdo P and agree with the reasons given by her Honour and with the orders proposed.