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Hafford v Chernov QCATA 32
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Hafford v Chernov  QCATA 32
JOSHUA PAUL JAMES HAFFORD
ORIGINATING APPLICATION NO/S:
14 March 2019
On the papers
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where the applicant claimed pursuant to promissory notes – whether promissory notes had been presented in accordance with their terms as at date of hearing – where hearing adjourned to allow the notes to be presented – where notes presented prior to the return date – where judgment given in favour of the applicant on the promissory notes
Pickering v McArthur  QCA 294
Stone v ACE-I.R.M Insurance Broking Pty Ltd  1 QdR 173
Vanden Hoven v QBCC  QCAT 456
Wigan v Edwards (1973) 47 ALJR 586
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
REASONS FOR DECISION
- Mr Hafford and Ms Chernov were once in a domestic relationship. They lived together for approximately 6 months. They shared a bank account.
- Mr Hafford borrowed money from Ms Chernov. The money was in their shared account. Ms Chernov was a student obtaining her Masters degree in speech pathology and her money in the account was to cover the costs of her tuition.
- Mr Hafford promised to repay the money. After he borrowed the money however they broke up as a couple and Mr Hafford provided Ms Chernov with 2 promissory notes to offer her security for the money. The amount totalled $4,300.
- The promissory notes were both dated 17 July 2017. One was marked as due on 30 January 2018 in an amount of $3,650, and the other due on 1 March 2018 in the sum of $650. Both promissory notes were marked non-negotiable and stated to be payable to a nominated bank account on the physical presentation of the note to ‘PO Box 1128 Ashmore City Queensland 4214’. Both promissory notes were signed by Mr Hafford and marked as being for value received.
- Mr Hafford did not pay back the money he had borrowed. Ms Chernov filed an application for minor civil dispute – minor debt in the tribunal seeking recovery of the money on 5 March 2018.
- In the application she stated:
He ensured (sic) he would pay back the money in full and because of his business knowledge I would receive interest on the amount given. When we later broke up, I had Joshua write up promissory notes that he would pay the money on given days. The first payment was due 30.1.2018 of $3650. The second payment is due 1 March 2018 of $650.
- It seems reasonably clear that Ms Jenner was suing on the promissory notes rather than seeking recovery of moneys loaned and due.
- The matter came on for hearing before Justices of the Peace on 18 July 2018. Ms Chernov appeared but Mr Hafford did not.
- During the hearing the issue dealt with was the promissory notes. Mr Hafford had filed a response to Ms Chernov’s claim. Much of the response dealt with irrelevant personal relationship complaints and his state of mind after the failure of the de facto relationship but it also raised the issue that Ms Chernov had failed to present the promissory notes as required.
- The Justices of the Peace noted that the notes were required to be presented before becoming due for payment. They suggested the matter be adjourned to allow her to present them for payment. They noted the failure to present the notes was an impediment to her claim.
- The matter was adjourned and came back on for hearing on 29 August 2018. This time Mr Hafford appeared. Ms Chernov gave evidence that she had physically handed the promissory notes to Mr Hafford after the adjourned hearing on 18 July 2018. The Justices of the Peace found the money was owing on the promissory notes and gave judgment in favour of Ms Chernov for the sum of $4,300 and ordered Mr Hafford to pay her filing fee of $116.40 plus interest of $115.34 and a bailiff’s service fee of $59.50.
- Mr Hafford seeks leave to appeal that decision.
- Given this is an appeal from a decision made in the Tribunal’s Minor Civil Dispute jurisdiction, leave to appeal must first be obtained before any appeal proceeds.
- Leave to appeal will usually only be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.
- Mr Hafford complains about the decision below on a number of bases. As with his response to the initiating application in the minor debt proceedings, some of his complaints are entirely irrelevant. They concern amongst other things the failure of the Justices of the Peace to acknowledge the high levels of abuse, violence and harassment that he says he still struggles to recover from after his failed relationship with Ms Chernov.
- He does make an entirely appropriate complaint however. He complains that in the proceeding below the tribunal advised the applicant to deliver the promissory notes and adjourned the hearing to enable her to do so.
- Ms Chernov’s cause of action was based upon the promissory notes. It was not a general claim for recovery of monies loaned by her and unpaid by Mr Hafford. It might well have been but that was not the cause of action pursued.
- A cause of action is all those facts which gives rise to a claim enforceable in a court, or in this case, the tribunal.
- One such necessary fact when one deals with promissory notes is that, if they require presentation to the person who promises to pay before there is an obligation to pay, until the notes are presented for payment there is no cause of action against the promisor on the promissory notes.
- As at the date of the first hearing on 18 July 2018, given Ms Chernov had not presented the promissory notes, which was necessary according to their terms, her claim at the time of the first hearing was inchoate and yet to vest in actionable proceedings.
- In Wigan v Edwards, Mason J explained:
To succeed a plaintiff must establish his cause of action at the date of the plaint, for that is the origin of the action.
- In many jurisdictions the rules of court allow a party to sue on causes of action arising after the institution of proceedings. In Stone v ACE-I.R.M Insurance Broking Pty Ltd, McMurdo J, with whom McPherson JA and Holmes J (as she then was) agreed, said:
These days, rules of court commonly permit plaintiffs to sue upon causes of action arising after the issue of proceedings: see, eg, r 375(2) of the Uniform Civil Procedure Rules. But absent such a rule, it had long been held that a plaintiff could not sue upon a cause accruing after the issue of proceedings. In Wigan v Edwards (1973) 47 ALJR 586, Mason J at p 596 explained why:
"To succeed a plaintiff must establish his cause of action at the date of the plaint, for that is the origin of the action. An amendment dates back to the original filing of the plaintiff (see Sneade v Wotherton Baryts and Lead Mining Co Ltd  1 KB 295, at p 297, per Collins MR). It is for this reason that a plaintiff cannot, in the absence of statutory authority, amend the proceedings without the consent of the defendant by adding a cause of action which has accrued to him since the commencement of the action (Eshelby v Federate European Bank Ltd  1 KB 254). And in the absence of such authority an amendment, if allowed, must be regarded as asserting a cause of action existing at the date of the writ."
- However there was no amendment of Ms Chernov’s claim sought in the matter at hand when the adjourned hearing came back on for hearing.
- But in any case, there is nothing in the Queensland Civil and Administrative Tribunal Act 2009 (Qld) permitting amendment to add a cause of action arising only after commencement of proceedings.
- The course adopted by the Justices of the Peace of adjourning the matter part heard to allow the applicant to perfect a cause of action based on the promissory notes was intended to assist but resulted in them falling into error of law. As at the date of commencement of proceedings on 5 March 2018 Ms Chernov had no actionable claim based on the promissory notes given they had never been presented for payment. An action on the promissory notes could not succeed.
- Leave to appeal is granted and the appeal allowed. The decision of the Justices of the Peace made 29 August 2018 is set aside and in lieu thereof it is appropriate to order that matter MCDO169-18 Southport be dismissed.
- This does not mean that Ms Chernov does not have a cause of action based on either the general failure of Mr Hafford to repay monies he borrowed or on the promissory notes (after presentation). Further new proceedings by her in that regard, and its success or otherwise, is entirely a matter for her to decide.
- Given the final orders made, there is no need to consider the application for a stay of the order of the Justices of the Peace made by Mr Hafford which would otherwise have fallen for consideration during the hearing of the appeal.
- Finally I should note, Mr Hafford supplied during the appeal copies of the transcript of the evidence taken at the hearings before the Justices of the Peace. In breach of the terms of provision of the transcripts to him by Auscript, the transcriber of the proceedings, Mr Hafford altered the first transcript by underlining and bolding various passages. There does not appear to have been deletions, changes or additions made to the text. The mere underlining and bolding however alters the page and line references. Had there been changes to the text I would have considered referring Mr Hafford to the President of the Tribunal on the basis his changes to the transcript was a contempt of the Tribunal.
- Published Case Name:
Joshua Paul James Hafford v Lera Chernov
- Shortened Case Name:
Hafford v Chernov
 QCATA 32
14 Mar 2019