SUPREME COURT OF QUEENSLAND

[1] HOLMES JA:  I agree with the reasons of Jackson J and the orders he proposes.

[2] FRASER JA:  I agree with the reasons for judgment of Jackson J and the orders proposed by his Honour.

[3] JACKSON J:  The applicants apply for leave to appeal and for an extension of time for filing of a notice of appeal from the order of the District Court of Queensland at Maroochydore made on 12 October 2012.  The order struck out paragraphs 1 to 17 of the statement of claim filed 8 June 2011 and provided for leave to file and serve an amended statement of claim together with consequential orders.

[4] Section 118 of the District Court of Queensland Act 1967 (Qld) confers a right of appeal.  In this case, s 118(3) requires leave of the Court of Appeal as a pre-condition of the applicants’ right of appeal.  No time is expressly provided for making an application for leave under s 118(3).  Nevertheless, a party seeking leave to appeal must do so promptly, because a notice of appeal is required to be filed within 28 days after the decision appealed from is given, unless the Court of Appeal otherwise orders.[1]  Accordingly, when 28 days after the decision appealed from has passed, a party seeking leave to appeal under s 118(3) will also need an order extending the time for filing the notice of appeal under UCPR 748.

[5] On 12 November 2012, which was 31 days after the date of the judgment from which they wish to appeal, the applicants attempted to send a notice of appeal by facsimile to the registrar.  On 17 December 2012, that is 37 further days later, the applicants filed an application to extend the time “to file her appeal”.

[6] Leaving aside the question of time, the applicants face significant hurdles in contending that leave to appeal should be granted.  First, where the application is for leave to appeal from an interlocutory order, “Leave to appeal from such orders will ordinarily be refused unless it appears that the decision is attended with sufficient doubt to warrant being reconsidered and also that, supposing it is wrong, substantial injustice would result if leave were refused…”.[2]

[7] Secondly, the judgment in question is one on a matter of “practice and procedure”.  As the High Court said in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc:

“Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure.”[3]

[8] In a salutory reminder, the High Court repeated an oft-cited statement of Sir Fredrick Jordan in In re The Will of F B Gilbert (deceased):

“… The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”[4]

[9] In Fritz v O'Brien, the same point was made in this Court in the context of an application for leave to appeal from a decision striking out paragraphs of a pleading in the District Court.  Muir JA said:

“For the reasons eloquently expressed by Jordan CJ in In re the Will of F B Gilbert (dec’d), courts are traditionally reluctant to interfere with exercises of discretion by judges which do not determine substantive rights.”[5]

[10] It is convenient to briefly consider the substance of the proposed appeal to see whether the decision is attended with sufficient doubt.

[11] The grounds set out in the draft notice of appeal are that UCPR 171 had no application to the case, or that the appropriate order would have been a direction to replead a mere part of the original pleading.  Otherwise, the challenge is simply that the learned judge erred in exercising discretion in striking out the pleading and in making an order for costs before any hearing of the substantive issues.  The order sought is that the order made by the District Court be set aside and the matter be remitted for further hearing.

[12] The grounds of appeal are not elucidated by the written outline of argument or reply.  The outline of argument raises bias and a denial of procedural fairness, neither of which is a proposed ground for an appeal.  The only basis for the allegation of bias seems to be that the applicants lost before the judge at first instance.

[13] Turning to the statement of claim, the learned judge said:

“It is embarrassing in the sense of a failure to plead material facts, rather than assertions and of consequently failing to identify a cause of action or a liability against which any defendant must plead.  As the defendant’s counsel pointed out, the pleading is inconsistent or confusing as to the person or entity alleged to be subject to any relevant obligation as trustee.  The pleading is particularly devoid of explanation as to the basis upon which each component of the claim is pursued and as to how any particular defendant may be liable for any such claim.  It is also not apparent as to the basis upon which the second plaintiff sues in her own right, as distinct from the first plaintiff, who has sued in a capacity as trustee.”[6]

[14] Having proceeded to analyse some of the facts behind the plaintiffs’ claim and having identified the defendants’ further application to stay the proceeding as an abuse of process under s 20(3) of the Service and Execution of Process Act 1992 (Cth), the learned judge returned to the theme:

“Once again and despite attempts to come to grips with this morass, the fundamental problem preventing any sensible assessment of the competing contentions and particularly as to whether any of the claims have any potential to succeed, is the lack of any sufficient description of the basis of those claims.”[7]

[15] Later in the reasons, the learned judge concluded:

“Although this review of the pleading and materials before the Court might engender little by way of confidence that the plaintiffs may be able to properly identify some cause of action against any defendant, I have eventually come to the view that it is not presently possible to conclude that there is none and accordingly the most appropriate order at this stage may be to strike out the pleading in the Statement of Claim and give directions as to the basis upon which the plaintiffs have leave to re-plead.  It may then remain to be seen whether the defendant can legitimately pursue any form of summary determination of any such claim.”[8]

[16] Paragraphs 1 to 7 of the statement of claim attempted to set up a breach of contract or breach of trust by the first and second defendants, in allowing a property known as “Meeyunah” to be transferred or disposed of without the written consent of the trustee of the Batmanda Trust.  Meeyunah was alleged to have been taken by a company known as Meeyunah Pty Ltd (“MPL”) under an acknowledgement of trust.  Paragraph 3 alleged that the first and second defendants were to have a 25 per cent interest “in the land” and an interest, described as “the 75 per cent balance”, was to be held upon trust for the Batmanda Trust.  Paragraph 4 alleged a promise by the first and second defendants not to enter into any dealing with any property held by MPL without the prior written approval of the trustee of the Batmanda Trust.  Paragraph 5 alleged a similar promise by the first and second defendants not to allow a company under their control to transfer or dispose of MPL’s property without the prior written approval of the trustee of the Batmanda Trust.  Paragraph 6 alleged a sale by MPL of Meeyunah “in clear Breach of Trust”.

[17] If the intention was to plead a cause of action against the first and second defendants for breach of contract, the statement of claim should have alleged a breach or breaches of the contractual promises made by the first or second defendants.  It did not.  If it was sought to make them liable as parties to a breach of trust by MPL, it would have been necessary to make further factual allegations which were not made.  Accordingly, paragraphs 1 to 7 of the statement of claim did not disclose a reasonable cause of action.

[18] The applicants appear to contend that the statement of claim was adequate, even if not fulsome.  But the defects previously mentioned are not hair-splitting.  The acknowledgement of trust referred to in the statement of claim was in evidence before the learned judge.  It comprised an acknowledgement by the first and second defendants that they held the shares in MPL on trust, not an acknowledgement that MPL itself held the land on trust.  So the basis of the allegation that the sale by MPL to a third party was a “clear breach of trust” invites the question:  breach of what trust?  The trust property under the acknowledgement of trust was the shares in MPL, not the land.

[19] Paragraphs 9 to 15 of the statement of claim related to another property, described in the pleading as “the Leeton property”.

[20] The substance of the claim set out in paragraphs 10 to 14 was that the plaintiffs advanced $34,329.68 towards the settlement of the acquisition of the Leeton property by MPL and that for some unidentified reason the first and second defendants were required to account for or repay those moneys to the plaintiffs.  However, material facts to support the claim, other than the fact of the advance by the plaintiffs, for the settlement of the acquisition of the residence by MPL were not alleged.  That is to say, paragraphs 10 to 14 did not disclose a cause of action in relation to the claim of $34,329.68.

[21] Paragraph 15 appears to have been an attempt to allege a further cause of action relating to “two unauthorised loans taken by the First and Second Defendants as Directors of [MPL] using as security [the Leeton property]”.  It was further alleged that those loans and another $1,000 were repaid by the first and second plaintiffs to the National Bank, although the circumstances are not set out.  Then it was alleged that the “total of loans” of $56,681.49 has been reduced and offset under a “deed of settlement” leaving a net balance owed of $11,527.87.  Paragraph 9 alleged that the plaintiffs and the first and second defendant entered into a deed dated 29 August 2005, which I infer is that deed.

[22] The calculation of the amount of $11,527.87 is clear enough, but the factual basis on which the defendants are alleged to be legally liable to pay to the first and second plaintiffs the sums they repaid to the National Bank on 29 August 2005 was not alleged beyond pleading that the loans were “unauthorised”.  The plaintiffs have not disclosed a reasonable cause of action for recovery of the $11,527.87.

[23] Thus, it appears that the learned judge was correct in concluding under UCPR 171 that the relevant parts of the pleading did not disclose a reasonable cause of action or were embarrassing and it was appropriate to strike out all or part of the pleading and to order the costs of the application be paid by the applicants.

[24] In my view, there can be no complaint about that outcome looking at the application to strike out the relevant paragraphs in the pleadings under UCPR 171 on the merits.

[25] The learned judge also dismissed the applicants’ application for summary judgment filed on 8 November 2011.  The learned judge reasoned:

“However that application is not maintainable, in the light of the extent of the application of the defendants which was also filed on 12 October 2011, together with the Conditional Notice of Intention to Defend.”[9]

[26] The basis of the plaintiffs’ application for summary judgment was the defendants’ failure to comply with UCPR 144, because of their failure either to file an application for an order under UCPR 16 or a defence.  It is true that the document described as a conditional notice of intention to defend did not set out a proper defence.  However, the application filed by the defendants on 12 October 2011 clearly sought a stay of proceedings and an order limiting (thereby extending) time for the defendants to file and serve a defence.

[27] In any event, it would not have been appropriate for the District Court to proceed on an application for summary judgment under UCPR 292, in circumstances where the pleading of the claim by the statement of claim was as defective as set out previously.

[28] Therefore, it was appropriate for the primary judge to order that the plaintiffs’ application for summary judgment be dismissed and that the plaintiffs pay the defendants’ costs of that application as well.

[29] The applicants submitted that they did not have a sufficient opportunity to argue before the District Court that the orders for costs made against them should not have been made.  It appears that the third plaintiff, Mr Bell, was not present in court on that day to make submissions.  Accordingly, this Court invited him to make the submissions which he would have made to the learned judge below.  In my view, there was nothing said which would have warranted an order departing from the general rule that costs of an application in a proceeding “follow the event, unless the court orders otherwise”.[10]  While the applicants may be hampered in their conduct of the proceeding by their straitened circumstances, in my view that ought not deprive the respondents of their ordinary entitlement to an order for costs, where such an order would otherwise be made.

[30] It follows, in my view, that the application to this Court should be refused.  There is no reason why costs should not follow the event.  The applicants should be ordered to pay the respondents’ costs of the application.