CQ Field Mining Services Pty Ltd v Deguara
[2022] QDC 42
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- Unreported Judgment
- CQ Field Mining Services Pty Ltd v Deguara[2022] QDC 42
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CQ Field Mining Services Pty Ltd v Deguara[2022] QDC 42
CQ Field Mining Services Pty Ltd v Deguara[2022] QDC 42
DISTRICT COURT OF QUEENSLAND
CITATION: | CQ Field Mining Services Pty Ltd v Deguara [2022] QDC 42 |
PARTIES: | CQ FIELD MINING SERVICES PTY LTD (appellant) v WAYNE MICHAEL DEGUARA (respondent) |
FILE NO: | 49/21 |
DIVISION: | Civil |
PROCEEDING: | Appeal from Interlocutory Decision |
ORIGINATING COURT: | Magistrates Court at Mackay |
DELIVERED ON: | 3 March 2022 |
DELIVERED AT: | Mackay |
HEARING DATE: | 21 February 2022 |
JUDGE: | Loury QC DCJ |
ORDER: |
|
LEGISLATION: | Uniform Civil Procedure Rules 1999 (Qld) r 166 |
CASES: | Adeva Home Solutions Pty Ltd v Queensland Motorways Management Pty Ltd [2021] QCA 198 Hanson Construction Material Pty Ltd v Davey & Anor [2010] QCA 246 Manikis & Anor v Byrne & Anor [2021] QDC 185 Pattison v Shortman [2010] QDC 475 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Rigato Farms v Rodolfi [2000] QCA 292 |
COUNSEL: | S McLennan for the appellant M De Waard for the respondent |
SOLICITORS: | McKays Solicitors for the appellant Kelly Legal for the respondent |
Introduction
- [1]This is an appeal against orders made by a learned Magistrate refusing the appellant plaintiff an extension of time within which to file a second amended reply, and refusing leave to withdraw deemed admissions caused by the failure to file the second amended reply.
- [2]This is therefore an appeal against an interlocutory decision.
Background to the applications
- [3]On 23 April 2014 the appellant plaintiff commenced proceedings against the respondent defendant in the Magistrates Court of Queensland, Mackay Registry. For ease of reference I will refer to the appellant as the plaintiff and the respondent as the defendant in these reasons.
- [4]The plaintiff seeks the payment of $105,257.68 for services provided to Minerite Pty Ltd. The sole director of Minerite Pty Ltd during the service period (16 June 2013 – 16 November 2013) was the defendant. The plaintiff is suing the defendant pursuant to the terms of a contract purportedly signed by the defendant guaranteeing the payment of all monies due and payable to the plaintiff by Minerite Pty Ltd.
- [5]On 12 June 2014 the defendant filed its Notice of Intention to Defend and Defence.
- [6]On 30 June 2014 the plaintiff filed its Reply. On 24 November 2017 the plaintiff filed an Amended Statement of Claim. On 8 December 2017 the respondent filed an Amended Defence.
- [7]On 13 December 2019 the original plaintiff who brought the claim (CQ Industries Pty Ltd) filed an Amended Claim which sought to substitute the current plaintiff. It did not change the relief sought. CQ Industries Pty Ltd went into liquidation on 29 April 2019. The plaintiff purportedly entered into a deed of assignment with CQ Industries Pty Ltd which assigned the debt owed by the defendant to the plaintiff.
- [8]On 13 December 2019 the plaintiff (as substituted) filed a Further Amended Statement of Claim. Relevantly it pleads:
- (I)CQ Industries Pty Ltd assigned to the plaintiff the debt owed to it by the defendant.
- (II)On 25 May 2012 the defendant entered into an agreement with CQ Industries Pty Ltd to guarantee all money due to CQ Industries Pty Ltd by the defendant’s company.
- (III)The guarantee was signed by the defendant on 25 May 2012 or in the alternative the defendant authorised someone else to sign the guarantee on his behalf.
- (I)
- [9]On 3 February 2020 the defendant filed a Further Amended Defence.
- [10]On 10 March 2020 the plaintiff filed an Amended Reply.
- [11]On 23 September 2020 the plaintiff’s solicitor wrote to the defendant’s solicitor enclosing a Request for Trial Date. On 9 October 2020 the defendant’s solicitor wrote to the plaintiff’s solicitor enclosing a Notice to Admit Facts and Notices of Non-Party Disclosure.
- [12]On 30 November 2020 the defendant’s solicitor wrote to the plaintiff’s solicitor advising that they expected to receive further evidence that week which would be relied upon by the defendant. On 11 December 2020 the defendant’s solicitor provided a report from a forensic handwriting expert to the plaintiff’s solicitor also indicating that the defendant intended to amend his defence upon receipt of some of the documents sought pursuant to the Notice of Non-Party Disclosure.
- [13]On 12 April 2021 the defendant filed a Second Further Amended Defence. Relevantly it pleads that:
- (I)The purported assignment was invalid.
- (II)The defendant did not provide any guarantee or sign the guarantee as confirmed by a forensic handwriting report.
- (III)The defendant did not authorise any person to sign the guarantee on his behalf.
- (IV)CQ Industries Pty Ltd did not communicate acceptance of the guarantee such that there is no binding agreement.
- (I)
- [14]On 5 May 2021 the defendant’s solicitor wrote to the plaintiff’s solicitor advising that no reply had been filed to the Second Further Amended Defence and purporting to deem admissions pursuant to rule 166 of the Uniform Civil Procedure Rules 1999 (“UCPR”). Further correspondence was exchanged between the parties between 15 June 2021 and 23 June 2021 in relation to the application ultimately brought by the plaintiff.
- [15]On 5 July 2021 the plaintiff’s solicitor served an unsealed copy of the plaintiff’s Second Amended Reply. On 8 July 2021 the defendant’s solicitor again wrote confirming reliance upon deemed admissions.
- [16]On 19 July 2021 the plaintiff filed an interlocutory application supported by an affidavit from the plaintiff’s solicitor. That application was heard on 18 August 2021. That application sought:
- (I)An extension of time within which to file the Second Amended Reply pursuant to rule 385 of the UCPR or in the alternative;
- (II)Leave to withdraw any deemed admissions arising from the plaintiff’s failure to plead to the Second Further Amended Defence within eight days; and
- (III)Pursuant to rule 483 of the UCPR an order for the separate determination of whether the debt was validly assigned.
- (I)
- [17]The learned Magistrate refused all three applications. It is the refusal with respect to the first and second applications against which the plaintiff now appeals.
The Appeal
- [18]The appeal to this court is governed by the UCPR as applies to the Court of Appeal.[1] The mode of the appeal is by way of rehearing. This is an appeal against interlocutory orders. The well-established principles governing such an appeal were reviewed recently by Bond JA in Adeva Home Solutions Pty Ltd v Queensland Motorways Management Pty Ltd.[2] His Honour observed that the degree of appellate restraint in determining appeals from the exercise of a judicial discretion is even greater in appeals from the exercise of a judicial discretion concerning questions or practice and procedure. Citing the observation of Sir Frederick Jordan in In re the Will of F B Gilbert (dec),[3] Bond JA observed at [13]:
“…generally an appellate court will not interfere unless, in addition to error of principle, the appellant demonstrates that the order will work a substantial injustice to one of the parties”.
The grounds of appeal
- [19]The grounds of the appeal are:
- (I)The learned Magistrate’s reasons were inadequate; and
- (II)The learned Magistrate’s decision was plainly unreasonable or unjust.
- (I)
The decision of the Magistrate
- [20]It is relevant to a consideration of the learned Magistrate’s decision that it was submitted during the oral hearing by the defendant’s counsel that the important issue for the learned Magistrate to decide was whether he was minded to grant the plaintiff’s application for a trial on separate issues. The deemed admissions were said to be a “side issue”.
- [21]Prior to adjourning to consider the material filed, the learned Magistrate said “I’ll make it clear, I haven’t made a decision”. Upon resuming he said that the matter was becoming progressively difficult in the issues that needed sorting out. He said that he was refusing the application for the separate trial and referred to an authority which he found persuasive in determining where the interests of justice lay.[4]
- [22]Counsel for the defendant queried what the learned Magistrate’s orders were with respect to the two other applications. The learned Magistrate said: “I think what I’m saying is I’m dismissing the application by Mr McLennan in entirety.” He went on to say “And the application to allow the extension of the filing, I am not satisfied that the reasons have been established and I am dismissing the application in its entirety.”
Ground 1
- [23]The plaintiff contends that the learned Magistrate did not give any reasons for dismissing the application for an extension of time or in the alternate for refusing leave to withdraw deemed admissions.
- [24]The High Court recently, in Minister for Immigration, Citizenship and Multicultural Affairs v AAM17,[5] referred to the duty of a judicial officer to give reasons as being an inherent aspect of the exercise of judicial power. After referring to that decision in Manikis & Anor v Byrne & Anor[6] Farr SC DCJ set out the obligations for judicial officers to give reasons as follows:
The relevant obligations for a judicial officer to give reasons was considered by the New South Wales Court of Appeal in Alchin v Daley:
- (i)The giving of adequate reasons lies at the heart of the judicial process, since a failure to provide sufficient reasons can lead to a real sense of grievance because the losing party cannot understand why he or she lost.
- (ii)While lengthy and elaborate reasons are not required, at a minimum the trial judge’s reasons should be adequate for the exercise of a facility of appeal, where that facility is available.
- (iii)The extent and content of the reasons will depend on the particular case and the issues under consideration, but it is essential to expose the reasoning on a point critical to the contest between the parties. This may require the judge to refer to evidence which is critical to the proper determination of the issue in dispute.
The Queensland Court of Appeal considered the requirement to give adequate reasons:
- (a)In Sunland Group Ltd v Townsville City Council where the Court held:
“It was thus incumbent on the primary judge to provide adequate reasons for his conclusions as to the existence and extent of conflict. Failure to give such reasons would be an error of law.”
- (b)In Jakeman Constructions Pty Ltd v Boshoff where it held:
“A failure to give sufficient reasons for an order where reasons are required amounts to an error of law. So much is established by many authorities, including Drew v Makita (Australia) Pty Ltd and AL Powell Holdings Pty Ltd v Dick.”
- [25]In failing to file a reply to the Second Further Amended Defence the defendant in correspondence, indicated reliance upon deemed admissions. Relevantly, the plaintiff accepts that there is a deemed admission that it failed to communicate acceptance of an essential component of the contract. The consequence to the plaintiff of that deemed admission is that its claim is reduced by some $84,000 (approximately 80 percent of the entire claim). Therefore, the determination of the applications by the learned Magistrate has resulted in a substantial reduction of the claim.
- [26]Before the learned Magistrate, the defendant relied on Rigato Farms v Rodolfi[7] and in particular the view of Williams J that “a clear explanation on oath should be given as to how and why the particular admission or admissions came to be made and then detailed particulars given of the issue or issues which the party would raise at trial if the admission was withdrawn” to argue that the plaintiff had failed to provide an adequate explanation for how and why the admissions came to be made; the evidence surrounding the issues; whether there was a real dispute about the evidence and the delay in bringing the application.
- [27]The defendant also relied upon the decision of Dodds DCJ in Pattison v Shortman[8] to argue that explanation needed to come from sworn evidence from the director of the plaintiff.
- [28]The defendant contends the learned Magistrate’s statement that indicates that he read the submissions (which were extensive) together with his statement “I am not satisfied that the reasons have been established” to argue that in context, that statement is a reference to the submission that the defendant made relying on the decision of Pattison v Shortman, that the affidavit evidence relied upon by the plaintiff to explain how the admission came to be made was inadequate because it did not include any material from the director of the plaintiff.
- [29]The decision of Pattison v Shortman involved admissions intentionally made by the defendants and not deemed admissions. In the circumstances of that case the evidence placed before the court which came only from the defendant’s solicitor was not considered adequate to explain: (1) how and why the admissions came to be made; (2) the evidence surrounding the issues the subject of the admissions; (3) whether there was a real dispute about the evidence; and (4) the delay in bringing the application to withdraw the admissions. Dodds DCJ drew a distinction between the admissions made by the defendants in that case which were deliberately made and deemed admissions.
- [30]Pattison v Shortman does not stand as authority for the proposition that sworn evidence from the person who is seeking to withdraw admissions must always be provided. In Hanson Construction Material Pty Ltd v Davey & Anor[9] Chesterman J said:
Ridolfi was decided shortly after the UCP Rules came into force and it may be the decision was intended to underscore the importance of adherence to the new procedures and to emphasise that the consequences the rules provided for non-compliance were to be taken seriously. That may account for the severity of some of the expressions, particularly those of Williams J. I would have thought myself, with respect to that learned judge, that a detailed and clear explanation as to how an admission came to be made may not be necessary where an admission is deemed by the rules. How the admission came to be made will be obvious enough. An explanation of the failure to comply with the rule should be given so as to establish that it was not deliberate. His Honour’s remarks apply with full force where an admission is intentionally made.
It is no doubt true that the UCP Rules are meant to expedite litigation and to limit disputes to issues that are genuinely in contest, but it must, in my respectful opinion, remain the case that the rules do not operate so as to prevent the trial of issues that are genuinely in dispute.
- [31]There is thus a distinction drawn between the nature of the explanation to be provided and from whom it must come in matters involving admissions deliberately made and deemed admissions.
- [32]It is quite clear how the admission in this case came to be deemed. It is a direct consequence of the plaintiff’s failure to file a Second Amended Reply within time. An affidavit sworn by the plaintiff’s solicitor was filed which set out an explanation for the delay in the matter progressing since 25 January 2019 including the reasons for the delay in filing a Second Amended Reply. That delay related to the obligations of counsel in circuit sittings of the Supreme and District Courts over a period of five weeks and the substantial nature of the amendments to the defendant’s Second Amended Defence. In addition, a request was made of the defendant pursuant to r 222 of the UCPR for a copy of a letter referred to in the defendant’s Second Further Amended Defence for which it became apparent that the defendant did not have in his possession. There were also attempts made to resolve the matter without the need to bring the applications before the learned Magistrate.
- [33]It was not necessary in the circumstances of this case for the director of the plaintiff to file an affidavit explaining how the deemed admissions came to be made. Indeed there was nothing that the director of the plaintiff could have sworn to which would explain the deemed admissions. The admissions were deemed as a consequence of the failure of his legal representatives to file the Second Amended Reply. The explanation for that failure was provided by the plaintiff’s solicitor who was, together with counsel responsible for it.
- [34]The defendant contends that, from the interaction between his counsel and the learned Magistrate it can be gleaned that he accepted the argument that sworn evidence needed to come from the director of the plaintiff. The defendant points to statements the learned Magistrate made during the course of submissions in which he said “yes” in response to the defendant’s argument. It must be borne in mind however that a little later, when the Magistrate adjourned to consider his decision, he made clear that he had not formed a concluded view.
- [35]The defendant has referred to the decision of McColl JA in Pollard v RRR Corporation Pty Ltd[10] in which she said:
“The Court is conscious of not picking over an ex tempore judgement and, too, of giving due allowance for the pressures under which judges of the District Court are placed by the volume of cases coming before them. However a trial judge’s reasons must, ‘as a minimum…be adequate for the exercise of a facility of appeal’. A superior court, ‘considering the decision of an inferior tribunal, should not be left to speculate from collateral observations as to the basis of a particular finding.” (Citations omitted).
- [36]McColl JA went on to observe that the extent and content of reasons will depend upon the particular case and the matters in issue. She said that whilst a judge is not obliged to spell out every detail of the process of reasoning it is essential for a judge to expose the reasons for resolving a point critical to the contest between the parties.[11]
- [37]The plaintiff contends that the statement by the learned Magistrate “I am not satisfied that the reasons have been established” refers not to the application to withdraw deemed admissions, but rather to the application for an extension of time. The plaintiff contends that the defendant has, in making this argument, ignored the learned Magistrate’s introductory remarks “in the application to allow the extension of the filing, I am not satisfied that the reasons have been established and I am dismissing the application in its entirety.”
- [38]The statement of the learned Magistrate in its proper context is, in my view, a reference to the application for an extension of time rather than the application to withdraw deemed admissions. I have come to that view because the learned Magistrate has not at all referred to the significant consequence to the plaintiff if the deemed admissions are not withdrawn. In circumstances where the deemed admission relates to a critical matter in dispute, I would expect that some reasons as to how that dispute was resolved would have been provided. I am therefore of the view that the learned Magistrate has failed to give any reasons for refusing the application to withdraw the deemed admissions.
- [39]If I am wrong in that regard I would nonetheless allow the appeal because the brevity of reasons provided by the learned Magistrate does not reveal whether he determined that the explanation for the admissions having been made was inadequate because of the absence of sworn evidence from the director of the plaintiff, or whether he considered the explanation that was provided by the plaintiff’s solicitor did not address adequately, the matters relevant to an application to withdraw deemed admissions.
- [40]The brevity of the reasons means that I am left to speculate as to the basis upon which the discretion was exercised. Accordingly in that way the reasons were inadequate. On either basis, the absence of, or inadequacy of, reasons amounts to an error of law which requires the decision to be set aside given that it does result in a substantial injustice to the plaintiff in a reduction in 80 percent of his claim, unless I conclude independently that it was the appropriate order in the circumstances.
- [41]The first consideration in determining an application to withdraw deemed admissions is whether the subject matter of the admission is truly contested. In the circumstances of this appeal, the subject matter of the deemed admission being communication of acceptance of the operative term of a contract is genuinely in dispute. That is apparent from the pleadings and from the service of a notice disputing facts.
- [42]Whilst the defendant submits that the plaintiff ought to be held to the rules and effectively suffer the consequences of a breach of the rules it must be remembered that whilst the UCPR are meant to expedite litigation and to limit disputes to that which is genuinely in contest the rules do not operate to prevent the trial of issues that are genuinely in dispute.
- [43]There has been an explanation which I consider adequate for how the deemed admissions came to be made. The failure to file the Second Amended Reply was caused by the conduct of the plaintiff’s legal representatives. That falls to the representatives and not to the director of the plaintiff to explain. The evidence surrounding the issues the subject of the admissions is contained in the pleadings already filed. Importantly, the defendant was put on notice by way of a notice disputing facts that the assertion of non-acceptance and non-communication of acceptance of the guarantee was denied by the plaintiff. The Second Further Amended Reply for which leave is sought pleads that the credit application was approved by the original plaintiff; that the terms of the credit application contained a provision which deemed acceptance upon approval and by which the defendant waived the need for communication of acceptance. It further pleads in the alternative that the provision of services on credit to Minerite Pty Ltd constitutes acceptance.
- [44]In terms of the delay the application which was brought to extend time or withdraw the deemed admissions of itself was not significantly delayed, being approximately three months. Counsel for the defendant accepted at the hearing before the learned Magistrate that wasn’t an overly long delay.
- [45]The defendant points to a prejudice to him if the application to extend time or withdraw the deemed admissions is allowed. He points to the already considerable delay in the matter progressing despite the claim being filed seven years ago. He points to the fact that the guarantee was signed in 2012 so the further delay of the trial impacts on the ability of witness recollections. Into that delay must be factored that the defendant did not produce evidence supporting his claim that he did not sign the guarantee until 11 December 2020 which is in itself six years after the proceedings were commenced. There was a further significant delay of before the defendant filed its Second Further Amended Defence (on 12 April 2021) where it was raised for the first time that acceptance of the guarantee was not communicated.
- [46]It can be seen that the delay in this matter proceeding falls at the feet of both the plaintiff and defendant for varying reasons at differing times. Extending time within which to file a reply or to withdraw the deemed admissions does nothing in my view to further significantly delay the matter beyond the already significant delay. The signing of the guarantee and communication of the acceptance of it is central to the dispute between the parties.
- [47]I give the plaintiff leave to withdraw the deemed admissions and extend time within which to file the Second Amended Reply to 9 July 2021.
- [48]Given my determination on ground 1 of the appeal, it is not necessary to consider ground 2.
- [49]I will hear the parties as to costs.
Footnotes
[1] See rule 785(1).
[2] [2021] QCA 198.
[3] (1946) 46 SR (NSW) 318, 322-3.
[4] The authority referred to was Great Northern Developments Pty Ltd v South West Eco Developments [2020] QSC 172.
[5] (2021) 388 ALR 257 [22].
[6] [2021] QDC 185 [26] - [27].
[7] [2000] QCA 292.
[8] [2010] QDC 475.
[9] [2010] QCA 246 [14] – [15].
[10] [2009] NSWCA 110 [56]
[11] Ibid [58].