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- Unreported Judgment
Tremco Pty Ltd v Thomson QDC 137
DISTRICT COURT OF QUEENSLAND
Tremco Pty Ltd v Thomson  QDC 137
TREMCO PTY LTD ACN 000 024 064 (Plaintiff)
CAROLYN MARY THOMSON (Defendant)
BENTLEYS (SUNSHINE COAST) PTY LTD (formerly known as PWA FINANCIAL GROUP PTY LTD) ACN 010 527 876) (First Third Party)
PETA WENDY GENFELL (Second Third Party)
ULRIKE BENDLE (Third Third Party)
CHERYL BLINCO (Fourth Third Party)
DC No 3868 of 2017
District Court at Brisbane
Ex tempore on 17 April 2018
16 April 2018
Porter QC DCJ
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COURT SUPERVISION – AMENDMENT – GENERALLY – where the defendant applies for leave to amend the amended defence in the proceedings – where the application is brought on the first day of trial – where the amendment sought is directed to establishing a judgment was obtained by fraud – whether an arguable case of fraud arises on the proposed pleading and the supporting evidence relied on.
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Briginshaw v Briginshaw (1938) 60 CLR 336
Expense Reduction Analysts group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303
Hansen Yuncken Pty Ltd v Ericson  QSC 327
McBride v ASK Funding  QCA 130
McDonald v McDonald (1965) 113 CLR 529
Tremco P/L v Kadoe P/L trading as Kadoe Commercial Coatings  QDC 40
M T De Waard for the plaintiff
Defendant, C M Thomson, appearing in person
Mills Oakley for the plaintiff
- This is an application for leave to amend the amended defence in these proceedings. The application was brought on the first day of trial, that is, yesterday. It seeks leave to add allegations directed to establishing that a judgment of Andrews DCJ given on 27 September 2015 was obtained by fraud. I first turn to the character of the judgment and its place in these proceedings.
- The plaintiff, Tremco, is a creditor of a company known as Kadoe. Tremco supplies waterproofing material and Kadoe carried out waterproofing work. Tremco sued Kadoe for some $146,000 in respect of goods sold and delivered over the period between late 2009 and December 2010. Precise dates of unpaid invoices are not particularly relevant for present purposes but it appears they were incurred in the period between March and December 2010. At the trial the key issue was articulated by his Honour Judge Andrews in Tremco P/L v Kadoe P/L trading as Kadoe Commercial Coatings  QDC 40 in these terms:
 The plaintiff’s claim is for $146,210.28 and for interest for moneys due and owing for goods allegedly sold and delivered to the defendant. The issues are whether goods for which payment is demanded were not ordered, not delivered, not picked up, already paid for, returned or donated. For certain items there was issue about whether, if delivery was proved, the defendant was entitled to credits and whether they were properly brought to account.
- This summary by his Honour of the issues in the case is shown, by the balance of his Honour’s reasons, to be an admirably precise and accurate statement of the issues.
- The case was litigated, as is perhaps evident from his Honour’s opening paragraph, on whether the prima facie evidence of goods sold and delivered based on the plaintiff’s business records could be displaced by challenges to that evidence by the defendant, Kadoe. Ms Thomson appeared at the trial and conducted the trial on behalf of Kadoe. She was Kadoe’s only witness. As his Honour’s reasons demonstrate, Ms Thomson levied numerous and detailed attacks on the adequacy of the plaintiff’s documents to prove its claim. She did so in circumstances where the defendant itself had not kept records of deliveries. Her approach to the trial is conveniently summarised by his Honour at paragraphs 15 and 16 where he says:
 The system for creating paperwork to evidence orders, sales and deliveries between the plaintiff and the defendant left gaps, most importantly at the stage of the delivery to an address away from the plaintiff’s warehouse.
 The defendant, for its part, kept no records of orders that it made to the plaintiff or pickups that it made from the plaintiff’s warehouse, on deliveries that it received from the plaintiff by couriers, by a transport company of deliveries that it signed for, or deliveries that were left without being signed for. It puts the plaintiff to proof of delivery, as the defendant is at liberty to do. The plaintiff must prove delivery, and every other matter upon which it bears the onus of proof, on the balance of probabilities.
- After reviewing, in detail, each of the critiques by Ms Thomson his Honour ultimately rejected those critiques as impugning the positive evidence of the plaintiff and awarded judgment. That judgment is relevant in this case because it is relied upon by Tremco in this proceeding, inter alia, as giving rise to a debt of the company for the purpose of its claim against Ms Thomson for compensation for insolvent trading by the company under 588G and M of the Corporations Act.
- I now turn to this application. This application arose in the following manner: Ms Thomson filed a written opening which frankly alleged the judgment was obtained by fraud. The fraud she identified was evidence of Mr Boslem and Hooper for the plaintiff to the effect the delivery companies did not maintain evidence of delivery after about six months. Mr de Waard rightly objected to these submissions on the basis that such allegations were not made in the defence and were not issues in the proceedings. Ms Thomson referred to paragraph 21 of the amended defence. Paragraphs 20 and 21 should be read together. They provide:
20. The defendant admits the allegations contained in paragraph 15(a) of the plaintiff’s statement of claim because a judgment was made in favour of the plaintiff for $146,410.20 in the District Court proceedings number 2152/11.
21. Further, and in the alternative, the defendant denies the allegation contained in paragraph 15(a), which I interpolate was an allegation that between October 2000 and July 2011 the company incurred an unsecured debt to the plaintiff in the amount of $146,410.20. That amount is owing to the plaintiff by the defendant because:
- (a)by the plaintiff’s own admissions it was not able to provide proof of deliveries for invoices it had supplied to the trading trust;
- (b)the plaintiff never provided evidence of those proof of deliveries to the court in District Court of Queensland proceedings number 2152/11;
- (c)the plaintiff did not provide evidence of those proof of deliveries to the court at trial, stating the courier companies did not keep those proofs of deliveries for longer than six months, when the plaintiff had disclosed documents during the legal proceedings, that proved they could be printed from courier’s websites more than 12 months of the date of the alleged delivery;
- (d)hose documents were also provided to Rackemann DCJ pursuant to court orders made by his Honour during a hearing of a directions application made by the company in February 2014, which hearing spanned several weeks to accommodate the plaintiff time to make the required disclosure.
- Paragraph  does not plead an allegation of fraud in any respect. It does not, in terms, allege fraud but merely criticises evidence given at trial. The plaintiff’s reply, understandably and properly, treats it in that way. When Ms Thomson was taxed by this she submitted that she believed it raised fraud in paragraph 21(c). Whether that state of mind is accepted as held by her or not is irrelevant. In my view, paragraph 21(c) specifically and paragraph 21, generally, does not objectively disclose any allegation of fraud and no reasonable reader would reach the conclusion that it does. Much less does it expressly plead and particularise fraud in a manner required by the law.
- Ms Thomson said that that occurred because of her disadvantages as a litigant in person. Whether that is or isn’t correct, there is a limit to which the Court may ignore rules for the conduct of civil proceedings. The rules apply to all parties, litigants in person as well as represented parties, and ultimately must be complied with. Ms Thomson, therefore, sought leave to amend her amended defence to allege the judgment was obtained by fraud. She delivered the proposed pleading this morning.
- The proposed further amended defence, to Mrs Thomson’s credit, does a serviceable job at identifying what conduct is said to be fraudulent and the foundation of the allegation that it was so. It certainly sufficiently identifies the case she seeks to advance to permit it to be analysed. However, such analysis, taken with the evidence relied upon by Ms Thomson, discloses that no arguable case for fraud arises on the proposed pleading.
- Ms Thomson accuses five persons of fraud. I’ll deal with them in order.
- First, Mr Boslem. Ms Thomson accuses Mr Boslem of perjury, both in an affidavit filed before the trial, but not relied upon at trial, and evidence given at trial. Obviously, the former is irrelevant from the perspective of setting aside the judgment as it was not relied upon at trial. The evidence impugned, therefore, properly in the sense of being evidence that was given at the trial, is that he said in evidence: “It is my understanding that courier companies typically only keep their records (ie the documents created when collecting goods) in relation to deliveries performed for a period of about six months”. No evidence was before the Court that he made a statement in those terms. Nonetheless, I proceeded to deal with the application on the assumption that that is the evidence that he actually gave. That assumption is of real benefit to Ms Thomson, of course, because very minor differences in wording can have a very substantial effect upon whether evidence is perjured or not or arguably perjured or not.
- This evidence of Mr Boslem is said to be false because when he made it he knew such information could be obtained after six months from Fastway, one of the courier companies involved. Ms Thomson relied on evidence that information was obtained by her from Fastway in the form of certain “trace reports” linked to delivery numbers sworn to by Mr Boslem and that that information was provided to Mr Boslem and the representatives of Tremco prior to trial. There are many problems with this as evidence of fraud in the evidence of Mr Boslem described:
- (a)As Ms Thomson herself contended to Tremco in correspondence well before trial, the trace documents in question and documents like them do not prove delivery. So much is plain, in my opinion, from looking at them, which are exhibits page 50 to 57 Mrs Thomson’s affidavit filed in this proceeding on 4 April 2017.
- (b)The trace documents do not falsify that which Mr Boslem is said to have said in evidence. His evidence was conditional. It was an understanding about what typically happens and in relation to documents created when collecting goods. These documents seem to have nothing to do with documents created by the courier when collecting goods.
- (c)Even if they did falsify Mr Boslem’s evidence, Mr Boslem might not have agreed that they did so or taken a narrow view of what they communicate or considered them unreliable. There’s any number of explanations consistent with differing perceptions or innocent error. I make that observation bearing in mind the observations of Dixon J in Briginshaw v Briginshaw about the necessity when determining whether there has been fraud on the balance of probabilities to require nonetheless cogent evidence bearing in mind the nature of the allegation.
- (d)The evidence relied upon by Ms Thomson was known to both parties and had been discussed in correspondence prior to the trial. That makes it, it seemed to me, highly unlikely there was any fraud attached with not referring to it.
- For all of those reasons, I find that on the proposed pleaded case and the evidence relied upon there is no arguable case of fraud by Mr Boslem in his evidence at trial.
- I now turn to Mr Hooper. Ms Thomson accuses Mr Hooper of fraud. He was an employee who worked at Tremco’s warehouse. What his inducement would be to give fraudulent evidence and take the risk of being convicted for perjury when he was merely an employee was not explored. Nonetheless, putting that to one side, I note he gave evidence of the records held by the plaintiff as to the supplies that they allege gave rise to the debts. Ms Thomson accuses him of fraud in making the following statement:
That transport companies doing their deliveries could only produce proofs of delivery for a period of up to six months after the goods were collected from the plaintiff’s warehouse.
- Again, Ms Thomson relies on trace documents as demonstrating this evidence was knowingly false. In particular, she relies on two documents Mr Hooper is alleged to have printed out after the six month period, which were trace documents of the kind I have already discussed. She also referred to certain documents relating to deliveries from another company called Javelin. As to the former, again, the vagueness of the contents of the trace documents mean that it is impossible, in my view, to draw the conclusion Mr Hooper’s statement was false. Also, again, the trace documents were not a secret. They were known to Mr Hooper. It seems entirely likely he did not consider them to be proof of delivery. Again, Ms Thomson asserted as much and, in my view, rightly.
- As to Javelin, Ms Thomson could not say that that evidence was not disclosed, nor that it was not tendered at trial, and it appears from paragraphs 22 to 25 of his Honour’s reasons that some paperwork from Javelin was before his Honour. In any event, that evidence of what the Javelin documents contained was not put before me and I do not see how I can reasonably infer the existence of that evidence falsifies Mr Hooper’s evidence much less than it permits an inference his evidence was knowingly false. I note in that regard, as I have said, that Mr Hooper, and indeed Mr Boslem, were just employees of Tremco. I find that on the proposed pleaded case there is no arguable cause of fraud against Mr Hooper.
- I now turn to Ms Wilson. Ms Wilson was added to the proposed amendments, though she had not been mentioned in the outline objected to by Mr de Waard. The allegation against her was that before his Honour she said there had been no disputes with Kadoe between March and December 2010 but Ms Thomson alleges Ms Wilson said in an affidavit filed in this proceeding that there was a dispute over $30,000. Reading that affidavit, it is plain to any fair minded reader her statement about the dispute relates to January 2011. Ms Thomson rightly abandoned her application in respect of Ms Wilson. It should not have been brought.
- I now turn to Mr Barber. Mr Barber was the solicitor for Tremco at the trial before his Honour. Ms Thomson seeks to allege fraud against him as a party to the fraud of Boslem and Hooper. She accepts that her allegations against him fail if no arguable case is disclosed against those witnesses. On that basis, given my conclusions in respect of those gentlemen, no case is disclosed against Mr Barber. It was a proper and helpful concession by Ms Thomson in that regard that allows me to proceed somewhat with despatch in respect of Mr Barber.
- Finally, Mr Millar. Mr Millar was not an employee at the time of the trial. Nothing alleged against him is relevant to whether that judgment was obtained by fraud.
- Accordingly, I have concluded that the proposed pleaded case that the judgment was obtained by fraud is not reasonably arguable on the face of the pleading taking into account the evidence put before me to sustain it. For that reason alone, I refuse leave to amend.
- However, there are other compelling considerations which would support that conclusion, even if one thought there might be an arguable case to sustain the pleading. First, Ms Thomson frankly conceded that she had the material she has relied upon as proving fraud at the time of the trial. It had been discussed in a contentious way before the trial. It was not fresh evidence. She was also aware of its importance to her attack on the plaintiff’s case, as is evident from her deployment of it in the disclosure application prior to trial.
- Ms Thomson referred to Hansen Yuncken Pty Ltd v Ericson  QSC 327 at paragraphs 124 to 128 where McMurdo J grapples with the suggestion that in a case that a judgment should be set aside for fraud, the applicant must pass the tests that generally apply when a person seeks to lead new evidence on appeal, those tests being: the evidence must be newly discovered since trial, the evidence could not have been found by the time of trial exercising reasonable diligence, that the evidence was so material it could have affected the outcome, the evidence must be so strong it would be reasonably expected to be decisive at a rehearing and if unanswered would have that result.
- There is a dispute as to whether the first two of these requirements are necessary. In Hansen Yuncken McMurdo J observed that there was authority reaching back to the High Court’s decision in McDonald v McDonald (1965) 113 CLR 529 that evidence of fraud did not have to reach those levels, that is, that it was newly discovered since trial and could not have been found out by the exercise of reasonable diligence before trial.
- His Honour’s observations in which his Honour agreed in the analysis of McDonald v McDonald was also referred to by his Honour Justice Jackson in McBride v ASK Funding  QCA 130 at  where is Honour, with whom Justices of Appeal Gotterson and Muir agreed, referred to the issue raised by McDonald, but it seems to me, with respect to his Honour, that his Honour didn’t decide the point because he didn’t have to. In that case, like this case, his Honour took the approach of analysing whether an arguable case for the judgment to be set aside by fraud was disclosed in the material and didn’t decide the case on the basis of those other questions. I’ve adopted the same approach. I would observe, however, that both McDonald, Hansen Yuncken and McBride are concerned with the question of whether the evidence is newly discovered but could not have been found by the time of trial by exercising reasonable diligence. On the facts of those cases it was that second question which their Honours, in each case, thought might not be a requirement for setting aside a judgment for fraud. In my respectful opinion that must be correct.
- However, that does not mean that it is irrelevant in exercising the discretion whether, in this case, to give leave that the evidence involving fraud was known before trial and even its contentious character understood before trial. That seems to me to be a very substantial consideration that would be taken into account in whether leave would be given, at this stage, to amend. As I’ve said, the evidence was in Ms Thomson’s possession. She was aware of its significance, if not entirely what could be done with it, and that is a substantial reason why, given the interest in finality of litigation, leave should be refused in this case as well.
- Finally, I come to the principles in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. The relevant passages are set out in paragraphs 6, 7 and 8 of Mr de Waard’s submission on this application where he also refers to the subsequent case, Expense Reduction Analysts group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303. I don’t need to go into those cases in detail. Suffice it to say that it is plainly the law that amendments are not to be granted just because an offeror is made to pay the costs thrown away if the trial is adjourned, not that Ms Thomson’s made such an offer or, to be fair to her, that she’s been asked to make it. The fact is, though, it’s impossible to see how the trial could proceed if these amendments were permitted. The trial has already been adjourned once. Blame for that is irrelevant. It was adjourned in the Supreme Court in September 2017. It’s on for hearing now. The court’s available to hear it. If it is adjourned again these days will be wasted, they’ll be lost to other litigants. They’ll be lost to the court. Other litigants could have had trials determined in this period, and so on.
- Bearing in mind that matter, it would have required, I think, a reasonably compelling case of fraud to justify pleading at this late stage, bearing in mind all the other considerations. Of course, there isn’t a compelling case of fraud. In my view, there’s no arguable case disclosed on the pleading and the evidence relied on in support of it, but that is another consideration as to why leave is refused. In all the circumstances, therefore, I dismiss the application.
- I reserve the costs in respect of this application.
- Published Case Name:
Tremco Pty Ltd v Thomson
- Shortened Case Name:
Tremco Pty Ltd v Thomson
 QDC 137
17 Apr 2018