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Mcleod v Shulin Family Trust Pty Ltd[2019] QDC 134

Mcleod v Shulin Family Trust Pty Ltd[2019] QDC 134

DISTRICT COURT OF QUEENSLAND

CITATION:

Mcleod & Anor v Shulin Family Trust Pty Ltd [2019] QDC 134

PARTIES:

KARENA MCLEOD & ADEN MCLEOD

(appellants)

and

SHULIN FAMILY TRUST PTY LTD (AS TRUSTEE FOR THE SHULIN FAMILY TRUST)

(respondent)

FILE NO/S:

66/19

DIVISION:

Civil

PROCEEDING:

Appeal pursuant to s 45 Magistrates Court Act 1921

ORIGINATING COURT:

Magistrates Court, Cairns

DELIVERED ON:

5 August 2019

DELIVERED AT:

Cairns

HEARING DATE:

29 July and 2 August 2019

JUDGE:

Fantin DCJ

ORDERS:

  1. Grant the application for leave to appeal.
  2. Allow the appeal.
  3. Set aside the judgment and orders entered in the Magistrates Court on 16 October 2018.
  4. Set aside the enforcement warrant issued in the Magistrates Court on 13 November 2018.
  5. The appellants file and serve an amended defence and counterclaim (if any) within 28 days of today’s date.
  6. The respondent file and serve a reply and answer (if any) within 14 days of receipt of any amended defence and counterclaim.
  7. Remit the proceeding to the Magistrates Court at Cairns for determination by a different Magistrate.
  8. The respondent pay the appellants’ costs of the appeal (if any) on the standard basis.

CATCHWORDS:

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF – where an appeal is brought against a decision of a Magistrate to order summary judgment for the plaintiff pursuant to rule 190 Uniform Civil Procedure Rules 1999 (Qld) based on admissions in the defence – whether summary judgment should be set aside – whether the admissions were unequivocal – whether the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim  – whether there is no need for a trial of the claim.

Legislation

District Court of Queensland Act 1967 (Qld), s 113

Magistrates Court Act 1921 (Qld), s 45(1)(a), s 47

Uniform Civil Procedure Rules 1999 (Qld), r 190(1),  r 292(2), r 748, r 765(1), r 766(1)(c),  r 785

Cases

Abram v Bank of New Zealand [1996] ATPR 41-507

Agar v Hyde (2000) 201 CLR 552

ANZ Banking Group Ltd v Barry [1992] 2 Qd R 12

Allesch v Maunz (2000) 203 CLR 172

Bolton Properties Pty Ltd v J K Investments (Australia) Pty Ltd [2009] 2 Qd R 202

Crawley v Crawley Land & Ors [2012] QSC 294

Deputy Commission of Taxation v Salcedo [2005] 2 Qd R 232

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87

Jonathan v Mangera (2016) 75 MVR 143

Neil v Nott (1994) 64 ALJR 509

Platcher v Joseph [2004] FCAFC 68

Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259

Reardon v Deputy Commissioner of Taxation (2013) 275 FLR 9

Reserve Vault Pty Ltd v Barrier Reef Arts Pty Ltd [2012] QCA 35

Robinson Helicopter Company Inc v McDermott (2016) 90 ALJR 679

Shaw v Deputy Commission of Taxation (2016) 104 ATR 1

Willmott v McLeay [2013] QCA 84

SOLICITORS:

The appellants were self represented (K McLeod)

WGC Lawyers as Town Agents for Lee Turnbull & Co for the respondent (S Webb)

Nature of the appeal

  1. [1]
    The appellants seek leave to appeal against a decision of Magistrate Pinder made in the Magistrates Court at Cairns on 19 February 2019 dismissing their application to set aside summary judgment entered against them on 16 October 2018. The respondent opposes the appeal.
  1. [2]
    For the reasons that follow, leave should be granted and the appeal allowed.
  1. [3]
    The appeal is pursuant to s 45(1)(a) of the Magistrates Court Act 1921 (Qld).
  1. [4]
    On such an appeal, this court has the same powers as the Court of Appeal to hear an appeal: s 113 District Court of Queensland Act 1967 (Qld); rules 785, 765(1) Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”). 
  1. [5]
    The court may draw inferences of fact, order a new trial, order judgment, make any other order, on such terms as it thinks proper, to ensure the determination on the merits of the real questions in controversy between the parties and make such order with respect to costs of the appeal as it thinks proper: s 47 Magistrates Court Act (Qld) 1921.
  1. [6]
    The appeal is by way of rehearing on the record. It is necessary for the appellants to show that the decision under appeal is wrong.[1] On such an appeal, it is necessary for this court to conduct a real review of the evidence at first instance, and of the Magistrate’s reasons for judgment, and make up its own mind about the case.[2]
  1. [7]
    While the ultimate conclusion of a court granting summary judgment pursuant to rule 292 UCPR is an exercise of discretion, that however depends upon the determination, in the first instance, of the mandatory pre-conditions for any such exercise of discretion. Here, the question is whether the Magistrate correctly found the necessary statutory pre-conditions for any such exercise of discretion. Accordingly, it is necessary, if this court is to intervene to exercise any power available to it, that error be identified in the decision of the Magistrate, such as to warrant intervention.[3]
  1. [8]
    The appellants were self represented before the Magistrate and on appeal. The respondent was legally represented in the court below and on appeal.
  1. [9]
    On 15 May 2019 the appellants filed an affidavit of Ms McLeod in support of their appeal. On 14 June 2019 Morzone QC DCJ ordered that that affidavit constitute the appellants’ submissions on appeal and that the appeal be listed for hearing. The respondent filed an Outline of Argument. At the hearing of the appeal, both parties were granted leave to file and read supplementary written submissions and made oral submissions.
  1. [10]
    Before dealing with the merits of the appeal, there are two preliminary issues.

Extension of time within which leave to appeal granted

  1. [11]
    An appeal must be filed within 28 days after the decision appealed from: see rules 785 and 748 UCPR. The decision appealed from was made on 19 February 2019. The appeal was filed on 17 April 2019, four weeks out of time.
  1. [12]
    I am satisfied that the appellants provided a reasonable explanation for the delay. They did not have the benefit of legal advice, did not know the proper procedure (so much is evident from the notice of appeal, which uses the incorrect form), and the cost of filing the appeal was initially an impediment.
  1. [13]
    The respondent did not oppose the short extension of time sought. There was no suggestion of prejudice to the respondent. For the reasons explained below, the appeal has merit.
  1. [14]
    I am satisfied that it is appropriate to grant leave to extend the time in which to file the appeal to 17 April 2019.

Application to adduce further evidence on appeal refused

  1. [15]
    The appellants sought to adduce new evidence on appeal in support of their defence in the form of photographs and copies of bank statements (“the documents”). The documents were not provided in an admissible form exhibited to an affidavit but rather were attached to their supplementary written submissions.
  1. [16]
    The court may on special grounds receive further evidence as to questions of fact: rule 766(1)(c) UCPR. The party seeking to adduce such evidence must satisfy the court that the evidence:[4]
  1. could not have been obtained by reasonable diligence for the original hearing;
  2. if allowed, would have an important impact or influence on the case; and
  3. is apparently credible.
  1. [17]
    The documents were in the possession of the appellants and predated the hearing before the Magistrate. The Magistrate adjourned the proceeding from 22 January 2019 to 19 February 2019 to allow the appellants time to adduce any further evidence they wished to rely upon at the hearing. There was no reason why the documents could not have been obtained by reasonable diligence for the hearing in the Magistrates Court on 19 February 2019 and adduced at that time in admissible form.
  1. [18]
    The documents were relied upon to prove that the appellants had incurred expenses in the performance of the contract and those losses form part of their claim against the respondent. The documents did not, on their face and without sworn evidence, establish that.
  1. [19]
    I am not satisfied that, if allowed in the form in which they were sought to be adduced, the documents would have an important impact or influence on the case. There was already sworn evidence before the Magistrate about the losses claimed: see the appellants’ affidavits filed 8 October 2018 and 13 February 2019.
  1. [20]
    Without sworn evidence explaining the documents, I could not be satisfied that they were apparently credible.
  1. [21]
    The appellants have failed to satisfy the relevant test. Their application to adduce further evidence on appeal is refused.

Principles

  1. [22]
    Pursuant to rule 292(2) UCPR, before a court may enter summary judgment for a plaintiff, it must first be satisfied of two preconditions:
  1. that the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and
  2. that there is no need for a trial of the claim or part of the claim.
  1. [23]
    Only if the court is satisfied of those preconditions may it exercise its discretion to give judgment for the plaintiff against the defendant.
  1. [24]
    The principles guiding the exercise of the court’s discretion are well settled.
  1. [25]
    The power to order summary judgment is one that should be exercised with great care, and should never be exercised unless it is clear that there is no real question to be tried.[5]  Summary judgment will not be granted as a matter of course.[6] It should not be granted “except in the clearest of cases”.[7] That is because ordinarily a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes.[8] 
  1. [26]
    The question is whether there exists a real, as opposed to a fanciful, prospect of successfully defending the claim.[9]
  1. [27]
    The test requires a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.[10]  The discretion does not arise merely because the court concludes that a successful defence is improbable.[11]
  1. [28]
    It is only where the facts are known or are established beyond controversy that the court should embark upon determining whether to give summary judgment.
  1. [29]
    The burden of proof under rule 292 rests on the plaintiff but when the plaintiff has led evidence discharging that burden the evidentiary onus shifts to the defendant to adduce facts to support the allegations in the defence sufficient to establish a defence or a need for a trial of the proceeding.[12]  Thus while it may be prudent for a defendant to adduce evidence in response to an application for summary judgment, there is no requirement for it to do so. Ultimately the onus remains on the plaintiff to persuade the court that the respondent has no real prospect of defending the claim.[13]
  1. [30]
    The court may refuse summary judgment if satisfied on the material there is a real issue to be investigated.[14]
  1. [31]
    Here, summary judgment was sought by the respondent plaintiff pursuant to rule 190(1) UCPR on the basis of admissions in the defence. The respondent did not adduce any evidence in support of its claim, other than an affidavit from its solicitor referring to the admissions.
  1. [32]
    In order for the court to act on an admission in the way contemplated by rule 190(1), the admission must be sufficiently clear and settled, and not subject to an application for amendment or withdrawal.[15] Where there has not been any application to withdraw any admission, the question will be whether an unequivocal admission has been made.
  1. [33]
    In Crawley v Crawley Land & Ors Atkinson J said (with respect to rule 190(1)):[16]

“Kiefel J, with whom Higgins and Tamberlin JJ agreed in ACT Leagues Club v ACT Rugby League said that the “purpose of the rule is to save time and costs where a party can be seen, by unambiguous admissions of fact howsoever made, to have a clear entitlement to the relief claimed”. Citing Barwick CJ in Re Registered Trade Marks Certina & Certina DS, her Honour reiterated that “the power is discretionary and is exercised with great caution”. In relation to the requirement for clarity, her Honour continued:

‘The requirement that the entitlement be ‘clear’ cannot be satisfied where the right asserted is subject to some other contention which cannot be disposed of then and there by legal argument, a course which was not in any event undertaken here. Whilst it is possible that the procedure could be utilised prior to the close of pleadings, an order could only be warranted where the Court could conclude with certainty that no matter could be raised against the right to relief claimed.’”  [citations omitted]

Chronology in Magistrates Court

  1. [34]
    On 25 May 2018 the respondent filed a claim and statement of claim against the appellants claiming $45,000 plus interest and costs. The statement of claim was drafted by the respondent’s legal representatives. It comprised five paragraphs:
  1. Paragraph 1 pleaded that the plaintiff paid to the defendants $90,000 “to enable the Defendants to purchase dry timber slabs of different valuable sorts, of very good quality (“the timber”), for a project the Plaintiff anticipated engaging the Defendants to complete at the Plaintiff’s childcare centre …”.
  2. Paragraph 2 pleaded that, contrary to the defendants’ assertions that they had an agreement with the supplier of the timber, the supplier had no knowledge of the arrangement.
  3. Paragraph 3 pleaded that as a result of the defendants’ misrepresentation, the plaintiff made demand on the defendants for the return of the $90,000, and that the defendants refunded $45,000 on 2 May 2017.
  4. Paragraph 4 pleaded that notwithstanding further demand, the balance $45,000 remains unpaid and the plaintiff claims it.
  5. Paragraph 5 set out the relief claimed.
  1. [35]
    On 24 July 2018 the appellants filed a notice of intention to defend and defence. The defence adopted the same numbering as the statement of claim but was a more detailed document, comprising five pages. The application for summary judgment was based on admissions said to be made in paragraphs 4 and 5(a) of the defence.
  1. [36]
    Paragraph 1 of the statement of claim was partly admitted and partly denied. The appellants “admitted the first part of the allegation in regard to the purchase of the timber; the defendants deny the allegation the plaintiff “anticipated” engaging the defendants because the plaintiff did engage the defendant”.
  1. [37]
    That was followed by several subparagraphs which sought to plead the material facts relied upon to allege that there was a concluded agreement between the parties for the design of the childcare centre project, of which the supply of timber was a part. The appellants pleaded a series of discussions between the parties, the dates on which they occurred, the mode of communication, the persons who participated and what was discussed. They pleaded that the respondent promised to provide a written agreement reflecting the verbal agreement but did not do so. They pleaded that the appellants took steps in reliance on the verbal agreement, including performing work and incurring costs. They pleaded that the respondent unilaterally sought to vary the agreed terms including by reducing the hourly rate and renegotiating the shipping rate for the timber. They pleaded that on 1 May 2017 the respondent made an unscheduled visit to the appellants’ property, became aggressive, advised them that she had gone back to the timber seller to renegotiate the purchase of the timber and that she (the respondent) did not wish to proceed with the project. They pleaded that “in view of the aggressive behaviour and manner and the admission by the plaintiff of trying to negotiate the timber deal, the defendant agreed to not go ahead with the project.”
  1. [38]
    Paragraphs 2 and 3 denied the allegations and set out the factual basis for the denials. It is unnecessary to set out those details for the purposes of the appeal.
  1. [39]
    Paragraph 4 admitted the allegation but was followed by several subparagraphs explaining the circumstances in which the appellants repaid the $45,000 and agreed to repay the balance $45,000. The circumstances included that on 1 May 2017 the respondent acted in a verbally and physically threatening manner, the respondent refused to leave the appellants’ property when asked, the respondent followed the appellants to the local bank branch and the respondent was verbally and physically threatening outside the bank despite the appellants stating the intent to repay the money, the respondent returned to the appellants’ home and was physically threatening and verbally aggressive, blocking access by parking across the driveway, the respondent continued to email the appellants stating they would physically remain in the area until the appellants returned the money and despite the appellants telling the respondent not to trespass. The appellants plead that “due to fears of physical threat the defendants had the property locks changed as a precaution”. The appellants pleaded that they found the respondent threatening and at times, frightening.
  1. [40]
    Significantly, paragraph 5 pleads a non-admission. It is followed by several subparagraphs setting out the basis for that.
  1. [41]
    Subparagraph (a) states “when the plaintiff broke the agreement on the 1st May 2017 the defendant clearly stated an intent to repay the money”. That is the main admission relied upon by the respondent to obtain summary judgment. Subparagraph (b) pleads that on 5 May 2017, following receipt of legal advice, the appellants advised the respondent they would deduct their expenses from the amount to be repaid. Subparagraph (c) pleads that on 1 June 2017 the appellants provided details of their expenses to the respondent’s agent. Subparagraph (d) pleads that the respondent refused to accept or acknowledge the appellants’ request for expenses. Subparagraph (e) pleads the work done, and expenses incurred, by the appellants in performance of the contract. 
  1. [42]
    Paragraph 6 sets out the steps taken by the appellants following those events.
  1. [43]
    Paragraph 7 sets out allegations regarding the respondent’s previous work practices which are not relevant on appeal.
  1. [44]
    The defence was not drafted with the benefit of legal advice and is not couched in legal terminology. It is in a narrative form and does not comply with the rules of pleading in the UCPR. Nonetheless, it pleads material facts sufficiently to understand the appellants’ position.
  1. [45]
    On 10 August 2018 the respondent filed a reply adopting certain admissions in the defence.
  1. [46]
    On 3 September 2018 the respondent filed an application for summary judgment returnable on 16 October 2018. The application was made pursuant to rule 190(1) UCPR.
  1. [47]
    On 8 October 2018 the appellants filed an affidavit of Ms McLeod opposing the application for summary judgment. In paragraph 2 she deposed that:

“The defendant claims that they had a contract agreement with the plaintiff, the plaintiff breached that agreement, as a result the defendant claims loss of income of $96,000 plus costs of $47,980.27 for the following:

  1. [sic] site inspection of the plaintiff’s project in Melbourne
  2. sourcing and negotiating with the timber seller, as well as additional and alternative timber sellers for the purchase of timber suitable for the plaintiff’s project.
  3. Arranging storage and shipment of the timber
  4. negotiating and engaging subcontractors
  5. acquiring accommodation in Melbourne
  6. acquiring warehouse storage space in Melbourne
  7. loss of income from the closure of the defendant’s home based holiday accommodation to accommodate a long term caretaker for the defendant’s property while the defendant undertook the plaintiff’s project
  8. loss of future income from the breached agreement.”
  1. [48]
    Paragraph 3 requested the court dismiss the application for summary judgment and “allow an amended defence and counterclaim to be filed which I am willing to resubmit in 7 days.”
  1. [49]
    On 16 October 2018 the appellants did not appear on the hearing of the application. The respondent’s submissions stated that the application was made pursuant to rule 190 UCPR and the application was based on the admissions in paragraphs 4 and 5(a) of the defence. Magistrate Pinder entered summary judgment for the respondent plaintiff in the sum of $45,000 plus interest of $3,898.97 and costs of $2,225.20.
  1. [50]
    It can be seen from the above analysis of the pleading that it cannot be concluded that the defendants clearly and unequivocally admitted that they were indebted to the respondent in the sum of $45,000, or liable to repay the entirety of that amount. Paragraph 5 of the defence pleads a non-admission. To the extent that subparagraph (a) pleads that the appellants stated an intention to repay the money, that must be construed in the context of the rest of that subparagraph, and the other contentions in the pleading. That allegation was supported by the affidavit of Ms McLeod filed 8 October 2018.
  1. [51]
    Although the legal causes of action were not identified, the effect of the appellants’ allegations was that the respondent had wrongfully terminated or repudiated the contract, giving rise to a right to recover damages for lost income and wasted expenditure, and that they had agreed to repay the deposit under duress.
  1. [52]
    In those circumstances in the absence of a clear admission, the respondent’s summary judgment application should have been refused when the application first came before the Magistrate on 16 October 2018.
  1. [53]
    On 17 October 2018, the appellants filed an application to set aside the summary judgment and an affidavit which explained the appellants’ failure to appear on the hearing of the summary judgment application. Ms McLeod had waited outside the correct courtroom from 8:30am, did not hear her name called, entered the courtroom at about 10.05am and was informed by a clerk that the matter had already been heard. The appellants’ application was returnable on 22 January 2019.
  1. [54]
    On 13 November 2018 an enforcement warrant for seizure and sale of the appellants’ property was issued by the Magistrates Court.
  1. [55]
    On 22 January 2019 the appellants’ application to set aside the summary judgment was heard by Magistrate Pinder. Although the application purported to be made pursuant to rule 508, the respondent plaintiff and the Magistrate accepted, and the hearing proceeded, on the basis that it was an application pursuant to rule 302 UCPR. That was no doubt correct. The Magistrate accepted that the appellants had provided a reasonable explanation for their failure to appear on 16 October 2018. He adjourned the hearing of their application to 19 February 2019 to give the appellants an opportunity to adduce further evidence in support of their application, and ordered that the appellants pay the respondent’s costs thrown away by the adjournment.
  1. [56]
    On 13 February 2019 the appellants filed a further affidavit of Ms McLeod in support of the application. Paragraph 2 again explained the reason for their non-appearance on 16 October 2018.
  1. [57]
    Paragraphs 3 to 11 deposed to facts in support of the defence. Paragraph 4 deposed that the plaintiff commissioned the defendants on 16 March 2017 as professional artists to redesign and undertake works on their childcare centre in Melbourne, including to purchase timber, supply tools, arrange storage and shipment of timber, materials, tools and equipment, subcontract artists as needed and relocate to Melbourne including accommodation and warehouse space.
  1. [58]
    Paragraph 5 deposed that “The plaintiffs paid the defendant a deposit of $90,000 towards the project on 20 March 2017, to include, but was not limited to, the purchase of timber”. Ms McLeod exhibited an email relevant to that.
  1. [59]
    In paragraph 6, she deposed that “The plaintiff was aware of ongoing works by the defendant and costs associated with the project between 16 March 2017 and 1 May 2017, through regular phone calls and emails”. Again, she exhibited correspondence with the plaintiff evidencing that.
  1. [60]
    In paragraph 8 she deposed that “On the 1 May 2017 the plaintiff cancelled the commission without prior notice, without reason, and demanded to be fully reimbursed”.
  1. [61]
    In paragraph 9, she deposed that “The defendant has attempted to negotiate with the plaintiffs costs incurred and any reimbursement of funds”. She exhibited correspondence evidencing that. One of those documents was an email itemising the expenses incurred by the appellants.
  1. [62]
    In paragraph 10, she deposed that the plaintiff’s allegations in the statement of claim of alleged misrepresentations by the appellants about the timber had been investigated by police and found to be unsubstantiated or false. She identified the investigating officers and the dates on which this occurred.
  1. [63]
    In paragraph 11, she deposed that the defendants also relied upon all admissions and statements in the defence filed 24 July 2018.
  1. [64]
    On 19 February 2019 the appellant’s application to set aside the summary judgment was heard by Magistrate Pinder. He dismissed the application, and affirmed the summary judgment.
  1. [65]
    On 17 April 2019 the appellants appealed.
  1. [66]
    On 17 June 2019 the Magistrates Court stayed the execution of the enforcement warrant until seven days after determination of the appeal.

Grounds of appeal

  1. [67]
    In the notice of appeal, the reasons said to justify the appeal largely focussed on the explanation for not appearing on the first return date and procedural matters arising on the other dates. It also stated that the appellants had provided “clear and compelling evidence” to support dismissal of the plaintiff’s application for summary judgment.
  1. [68]
    The effect of their defence, the evidence filed by them and their written and oral submissions is this. They contend that the Magistrate erred in finding that the material before the court failed to disclose a defence on the merits. Namely, that there was a genuine dispute as to the terms of the contract, that the respondent had by its actions repudiated or breached the contract, that the appellants had a claim for damages against the respondent for work done by them and expenses incurred in partly performing the contract, and that they only repaid the $45,000 and agreed to repay the balance $45,000 under duress, in circumstances where they were verbally and physically threatened.

Consideration

  1. [69]
    According to the transcript, the hearing on 19 February 2019 took 27 minutes.
  1. [70]
    The Magistrate was faced with the difficult task of dealing with a self represented litigant who had not filed an outline of submissions and did not identify clearly all the evidence relied upon in support of her application.
  1. [71]
    All parties have the right to a fair hearing regardless of whether they have legal representation. This is balanced by the limitation that the court needs to avoid compromising its impartial stance. The assistance which should be provided by a judge to a self represented litigant depends on the litigant, the nature of the case, and the litigant’s intelligence and understanding of the case.[17] Where the case has not been pleaded by lawyers, steps should be taken to ensure that the issues are defined and that the unrepresented party is satisfied that they are adequately defined.[18]  A judge should attempt to clarify the substance of the submissions of the self represented litigant, especially in cases where, because of misconceived advocacy, the substantive issues are either ignored, or given little attention.[19]
  1. [72]
    In the circumstances of this case, the Magistrate needed to consider any submission properly founded in the pleadings and the evidence, which competent counsel would have advanced on behalf of the appellants had they been legally represented. That required a proper analysis of the legal issues raised on the pleadings, not just the facts that the self represented appellants had managed to plead.
  1. [73]
    Instead, the Magistrate focussed on the fact that, despite being granted an adjournment on 22 January 2019, Ms McLeod had not annexed to her affidavit a draft defence, and that the defendants would need the leave of the court to withdraw their admissions.
  1. [74]
    Ms McLeod struggled to articulate the basis for her defence.
  1. [75]
    Although Ms McLeod referred to her affidavit filed 8 October 2018, it was not formally read by her and not referred to by the Magistrate. There is nothing in the transcript to suggest that the Magistrate considered that affidavit.
  1. [76]
    The Magistrate insisted a number of times that Ms McLeod needed to have provided a draft defence that the defendants intended to file should judgment be set aside. Ms McLeod said that she thought she had addressed the court’s requirements in the affidavit she had filed. She made it clear that she relied upon the information provided in the affidavit filed 13 February 2019. Her understanding was that she required the court’s leave to file an amended defence, so had not filed one. She said that between the hearing on 22 January and the hearing on 19 February 2019, she had received advice from a community legal centre. The effect of that advice was that she should set out her position in the affidavit, which she had done.
  1. [77]
    The Magistrate said that he could not see on her material what changed the position in the pleadings, and that she needed to overcome the issue of seeking leave to withdraw the admissions.
  1. [78]
    The Magistrate did not seek the clarify any of the appellants’ submissions, their defence, the basis upon which the admissions were made, or whether the appellants in fact were seeking to withdraw the admissions.
  1. [79]
    He said that the defence did not respond to the pleaded case. He said that the defence filed was non-compliant and to the extent it made admissions, the admissions properly founded the application for summary judgment. He said it did not disclose an arguable case on behalf of the defendants.
  1. [80]
    Ms McLeod applied for a further adjournment of the application, which was refused.
  1. [81]
    The solicitor for the respondent pointed out to the Magistrate that the defendants were not in fact seeking to withdraw their admissions. They had affirmed the admissions in the defence: Ms McLeod’s affidavit filed 13 February 2019 paragraph 11.
  1. [82]
    His Honour delivered his reasons immediately after the hearing. He said:

“… there is no draft defence annexed to the applicant defendant’s affidavit material. A review of the affidavit which is asserted to premise the defence of the action fails to disclose any feature inconsistent with the defence which would enliven any possible consideration of an arguable case by the defendant.

The application is conceded by the respondent plaintiff and properly so to be an application effectively pursuant to rule 302 of the Uniform Civil Procedure Rules. That enlivens a wide – that empowers a wide jurisdiction of the Court to set aside or vary a judgment given on application under this part against a party who did not appear. There are two limbs to the exercise of the discretion under rule 302. The first is an explanation or reasonable excuse for failing to appear, and the second is that the defendant discloses an arguable defence which enlivens a basis on which the judgment – the summary judgment cannot be maintained. It is conceded and, again, a proper concession, and I find that that first limb is satisfied, albeit an unusual set of circumstances – set of circumstances. I accept the defendants have a reasonable excuse for failing to appear on the hearing of the application for the summary judgment on 16 October 2018.

In respect of the second limb, the pleaded case by the plaintiff and the Defence in its current form does not disclose any arguable case against – by the defendants in respect of the pleaded case, and, in fact, as the respondent to the application rightly points out, the affidavit material upon which the defendants seek to rely adopts and confirms the admissions in the notice of defence. The defence is a document which in many respects is non-compliant with the pleading rules of the Uniform Civil Procedure Rules. Be that as it may, it makes admissions which enliven the – entitle it to a summary judgment. The material does not establish on any basis how the judgment cannot be maintained; accordingly, the application to set aside the judgment is dismissed.”

  1. [83]
    A number of things may be observed about that.
  1. [84]
    First, to the extent that his Honour treated the “two limbs” he refers to as mandatory preconditions to the exercise of the discretion under rule 302, that was an error.[20] The transcript of the hearing supports that construction of his reasons. On an application under rule 302, the Court is required to consider all relevant facts and circumstances. The two “limbs” referred to by the Magistrate, while no doubt highly relevant considerations, were not mandatory preconditions to the favourable exercise of the discretion.
  1. [85]
    In Reserve Vault Pty Ltd v Barrier Reef Arts Pty Ltd,[21] Chesterman JA said:

“[33] The primary judge appears to have proceeded on the assumption that the appellant could succeed in establishing an arguable case on the merits only by pleading such a case or by properly articulating the legal basis for the defence. Much of his Honour’s discussion of what he referred to as “the second point” related to the manifest deficiencies in the appellant’s pleaded defence.His Honour’s approach was too narrow. The discretion to set aside a judgment under Part 2 of Chapter 9 of the UCPR is broad. Rule 302 relevantly provides that “The court may set aside... a judgment given on an application under this part against a party who did not appear on the hearing of the application”.

[34] The rule does not prescribe or confine the matters to which a court may have regard in deciding whether to set aside a judgment. The absence of a pleaded defence which is arguable on its face is no doubt a relevant consideration where a defence has been filed, but so too is the evidence of facts which on their face give rise to an arguable defence. Such evidence will normally be afforded substantially more weight than uncorroborated allegations in a defence.”

The same observations may be made here.

  1. [86]
    Second, the Magistrate did not refer to, and it is unclear whether he properly considered, rule 292, whether its requirements had been satisfied or the test expounded in Deputy Commissioner of Taxation v Salcedo[22] or other authorities. 
  1. [87]
    Third, through no fault of the Magistrate, not all of the appellants’ affidavit material was considered. The Magistrate referred to a single affidavit, which was Ms McLeod’s affidavit filed 13 February 2019. There was no reference to her affidavit filed 8 October 2018,[23] nor the matters relevant to the defence raised in it. 
  1. [88]
    Fourth, when the defence and the appellants’ affidavits are properly considered, the Magistrate’s finding that the admissions entitled the respondent plaintiff to summary judgment was not reasonably open. The admissions relied upon to grant summary judgment were not unambiguous or unequivocal admissions of fact sufficient to establish a clear entitlement to the relief claimed by the respondent. Although the appellants admitted saying to the respondent that they would repay the balance of the funds, that admission was subject to, and qualified by, the contentions raised elsewhere in the defence.
  1. [89]
    In their oral submissions on appeal, the appellants made it clear that they did not seek to withdraw the admission in paragraph 5(a) of the defence. They submitted that it must be read in the context of the contentions at paragraphs 1(h), 4 (particularly subparagraph (b)), and 5 of the defence, and their affidavit evidence.
  1. [90]
    When all of the material is properly construed, the appellants’ position may be summarised in this way. The appellants allege that they had a concluded agreement with the respondent to redesign the childcare centre which included (but was not limited to) the purchase of timber, that the respondent terminated that agreement unexpectedly and without notice when the appellants were in the process of relocating to Melbourne to perform the agreement, that the appellants had done work and incurred expenses in part performance of that agreement, that the respondent demanded the repayment of the $90,000, and that the appellants only agreed to repay the balance $45,000 under duress, in circumstances where the respondent came to their home uninvited and was verbally and physically threatening them.[24] The facts raise an arguable defence.
  1. [91]
    The written submissions of the respondent’s solicitor who appeared on the appeal[25] were comprehensive and helpful. However they simply served to highlight the extent to which the facts alleged by the appellants in the pleadings and evidence were disputed. That supports a finding that there should be a trial to determine those issues.
  1. [92]
    On the basis of the defence, the evidence filed by the appellants in the Magistrates Court and the appellants’ submissions, there was a real, as opposed to a fanciful, prospect of successfully defending the claim. This was not the “clearest of cases” where it could be said that the appellants had no real prospect of successfully defending the claim.
  1. [93]
    The material and the submissions raised real issues to be investigated, albeit that an amended defence and counterclaim had not yet been filed. Namely, the nature and terms of the agreement, whether the respondent repudiated the agreement leading to termination, whether the respondent terminated the contract for breach by the appellants, or whether the respondent repudiated the contract, whether the respondent was entitled to the return of the deposit or whether there was an implied right of forfeiture, whether the appellants were entitled to claim damages and if so on what basis, and whether the appellants’ agreement to repay the $45,000 was procured by illegitimate threat and duress, and therefore voidable.
  1. [94]
    On any analysis, it could not be said that there was no need for a trial of the claim.
  1. [95]
    Bearing in mind the authorities I have referred to above, the court could not be satisfied of the requisite high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.
  1. [96]
    The respondent did not establish an entitlement to summary judgment under rule 190(1) on the basis of the admissions, and neither of the preconditions in rule 292 was satisfied.
  1. [97]
    Further, given the factual disputes, it was in the interests of justice that those issues be ventilated and proved by calling oral evidence at a final hearing on the merits.
  1. [98]
    It follows that the Magistrate erred in his application of the relevant rules. That error justifies intervention.

Conclusion

  1. [99]
    I would allow the appeal, set aside the summary judgment, set aside the enforcement warrant and remit the matter to the Magistrates Court for determination by a different Magistrate.
  1. [100]
    In order to ensure the proceeding progresses in a timely fashion, I will make directions for the filing of any amended defence and counterclaim, and reply and answer. In any amended pleading, if a party intends to raise matters such as breach of contract, duress, performance and part performance, they must be specifically pleaded (rule 150(1)), as does the nature and amount of damages claimed: rule 155.
  1. [101]
    I see no reason why costs of the appeal should not follow the event. The respondent sought summary judgment on the basis of admissions which did not, in fact, support that judgment. They opposed the application to set judgment aside and opposed the appeal. The respondent should pay the appellants’ costs of appeal. As the appellants are self represented, those costs are likely to be limited to the filing fee on the appeal.

Footnotes

[1] See Allesch v Maunz (2000) 203 CLR 172 at [23].

[2] Robinson Helicopter Company Inc v McDermott (2016) 90 ALJR 679 at [43], [57].

[3] Cf Willmott v McLeay [2013] QCA 84, where Holmes J, at [17], described the proper construction of the rule as involving “a residual discretion”. See also Bolton Properties Pty Ltd v J K Investments (Australia) Pty Ltd [2009] 2 Qd R 202 per Daubney J.

[4] See Jonathan v Mangera (2016) 75 MVR 143.

[5] Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99.

[6] Deputy Commission of Taxation v Salcedo [2005] 2 Qd R 232 at [17].

[7] Agar v Hyde (2000) 201 CLR 552 at 575-576.

[8] Agar v Hyde at 575-576.

[9] Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259 at 265.

[10] Ibid.  

[11] Deputy Commission of Taxation v Salcedo [2005] 2 Qd R 232. 

[12] ANZ Banking Group Ltd v Barry [1992] 2 Qd R 12 at 14, 19. 

[13] Shaw v Deputy Commission of Taxation (2016) 104 ATR 1 at [22]. 

[14] Reardon v Deputy Commissioner of Taxation (2013) 275 FLR 9 at [41], [86].

[15] Crawley v Crawley Land & Ors [2012] QSC 294 at [60]-[61].

[16] Crawley at [62].

[17] Abram v Bank of New Zealand [1996] ATPR 41-507 at 42-347, 43-341, 43-347, referred to with approval in Platcher v Joseph [2004] FCAFC 68 at [104].

[18] Supreme Court of Queensland, Equal Treatment Benchbook, Appendix F: Examples of working guidelines for proceedings involving self-represented litigants, paragraph 11.

[19] Neil v Nott (1994) 64 ALJR 509, 510.

[20] Reserve Vault Pty Ltd v Barrier Reef Arts Pty Ltd [2012] QCA 35 at [11] – [13] per Muir JA.

[21] [2012] QCA 35. 

[22] [2005] 2 Qd R 232.

[23] The solicitor who appeared as town agent for the respondent’s solicitor in the Magistrates Court confirmed on appeal that his principals had not provided him with Ms McLeod’s affidavit of 8 October 2018, although it had been served on them. As a result, in the Magistrates Court hearing he was unaware of that evidence and his written and oral submissions were not responsive to it.

[24] See also affidavit of McLeod filed 15 May 2019 paragraph 4.

[25] Filed by leave on 2 August 2019.

Close

Editorial Notes

  • Published Case Name:

    Karena Mcleod & Anor v Shulin Family Trust Pty Ltd

  • Shortened Case Name:

    Mcleod v Shulin Family Trust Pty Ltd

  • MNC:

    [2019] QDC 134

  • Court:

    QDC

  • Judge(s):

    Fantin DCJ

  • Date:

    05 Aug 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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