McKinless v Van[2024] QDC 68

DISTRICT COURT OF QUEENSLAND

The appeal

1. [1]
   The appellant appeals against a decision made by a magistrate on 13 October 2023 whereby he ordered her application brought pursuant to UCPR 389(2) be dismissed and the related adverse costs order.  She seeks for the appeal to be allowed, the magistrate’s decision of 13 October 2023 be set aside, and she be granted leave under UCPR 389(2) to take a further step in the proceeding and costs. 

Background

2. [2]
   In the original proceeding, the appellant claimed for the sum of $61,000 paid by her to the respondent/defendant.  The claim was formulated upon a number of bases, but generally for damages for breach of contract and/or breach of trust and/or restitution for unjust enrichment and/or for recovery of monies had and received.  Principally, the claims were founded in allegations that the appellant had paid the respondent upfront for the performance of various building works which he either did not undertake or cause to be undertaken (the termite works); or did not complete works which he was paid (decking; garden shed and associated concrete); or completed works but without accompanying certification or provision of evidence of payment (electricity meter relocation; bathroom). 
3. [3]
   On the face of the pleadings as they stand, much remains in dispute although the defendant largely did not admit a significant number of the allegations pending further and better particulars which have since been provided and now provide more focus to the dispute. 
4. [4]
   The building works progressed between October 2010 and September 2015.  It is not disputed that between July 2010 and June 2016, the appellant and respondent had developed a personal friendship and a relationship of trust existed between the parties.  The respondent further particularised that matter alleging a personal relationship between “late 2010 to early 2012” with personal contact concluding in September 2015. 
5. [5]
   The chronology incorporated in the respondent’s outline details other relevant events.  In summary, the proceedings issued in August 2017.  The initial iteration of pleadings closed approximately 12 months later on the filing of the appellant’s reply on 20 August 2018.  Skirmishes continued between the parties into 2019 principally concerning particulars which matters impacted the finalisation of pleadings. On my assessment pleadings are still to be finalised although in the context of this dispute pleadings appear only to further complicate issues rather than illuminate them. 
6. [6]
   In early to mid-2020, unsuccessful efforts were made at resolution of the dispute.  Approximately 12 months passed before the appellant then gave notice in May 2021 of her intention to file a notice for trial.  The respondent’s response was to put the appellant on notice that a notice was required in accordance with UCPR 389(1).  The appellant gave such notice approximately three months’ later, on 28 October 2021.  The next step taken following delivery of that notice was the appellant delivering a list of documents on 8 August 2023.  Concurrently with the appellant filing its list, the appellant also gave notice of its intention to file a notice of trial which notice was subsequently delivered on 16 August 2023.  The appellant’s solicitor was plainly alive to the issue of delay and the need to seek leave to proceed.  Against that background, the appellant filed her application for leave to proceed on 31 October 2023. 
7. [7]
   The appellant’s filing of her application elicited from the respondent by way of response a cross-application for the claim to be dismissed for want of prosecution.  Although the registry would not list the respondent’s application for determination on the return date set for the return of the appellant’s application, the determination of the application arguably was resolved by the magistrate’s decision of 13 October 2023. 

Nature of appeal

8. [8]
   In her outline, the appellant contends the appeal is one that should proceed by way of rehearing pursuant to UCPR 765(1) on the basis that the appeal is in respect of a final decision in a proceeding.  The respondent contended that the order was not a final order but merely an interlocutory order and as such, was an appeal from a decision other than a final decision in a proceeding.  If so, the appeal would be conducted stricto sensu.^[1]
9. [9]
   The nature of appeal is of moment here because the outcome of the application as decided by the magistrate was arguably open upon a proper exercise of his discretion. The respondent submitted there were no House v the King factors arising impeaching the magistrate’s exercise of his discretion in this instance so the ruling should not be disturbed.  It was contended he did not act upon any irrelevant consideration, nor misapply any principal of law and he decided the matter consistent with the material presented to him.  It is significant to note the contest before me is quite differently framed to that which was argued before the magistrate but in my view that matter is more relevant to costs.
10. [10]
    In submissions, the appellant referred to the decision of De Innocentis v Brisbane City Council [2000] 2 Qd R. 349; [1999] QCA 404 where at [32] to [34] the meaning of the term “final decision” as used in UCPR 765 was considered.  There it was noted the term had a wide meaning and meaning wider than judgment and that in the context of the case then under consideration, as here, the judge’s decision on a strike-out application was final. Relevantly Chesterman J observed an order not to extend time was a ‘final decision’ “… in the sense that it brought the claim to an end.  The decision precludes further controversy, or all questions involved in that claim.  No further decisions with respect to the claim is necessary or possible.  The decision is therefore final.”.
11. [11]
    In my view, those observations by Chesterman J with whom Pincus and Thomas JJA concurred puts the issue beyond doubt.  The nature of the appeal here is governed by UCPR 765(1) and the appeal must be conducted by way of rehearing. The rehearing requires this court to conduct a real review of the record of proceedings below, rather than a complete fresh hearing.^[2] case. On such an appeal, the judge should afford respect to the decision of the magistrate and bear in mind any advantage the magistrate had in seeing and hearing any witnesses give evidence.  But the judge is required to review the evidence, to weigh the competing evidence, and draw his or her own conclusions. ^[3]  When reviewing the magistrate’s decision on an appeal such as this, the court must examine whether the magistrate acted upon a wrong principal, was guided or affected by extraneous or irrelevant matters, mistook the facts, or failed to take into account some material consideration.^[4]

Issues on appeal

12. [12]
    Refined to its essence the appellant contends:

    1. The magistrate “mistook” the facts finding:
       1. (i)
          The relevant premises had increased in value;
       2. (ii)
          That due to delay, the defendant had been prejudiced by the loss of witnesses through death and/or unavailability;
       3. (iii)
          Witnesses who might have been available would not be able to fully testify to relevant matters because of the impact of delay upon their recall.

because there was no evidence of those matters placed before him in the application; and

2. The magistrate failed to take proper account of material considerations including;
   1. (i)
      The plaintiff’s prospects of success;
   2. (ii)
      The defendant’s inaction in the proceeding;
   3. (iii)
      The prejudice to the appellant if leave was not granted to her to take a step in the proceeding;
   4. (iv)
      That the respondent had an evidentiary onus to raise any consideration telling against the exercise of the discretion ;
   5. (v)
      That the respondent’s evidence did not identify;
      1. (A)
         any witness unable to give evidence at trial; and/or
      2. (B)
         the issues to which such witnesses evidence would be relevant; and
   6. (vi)
      Whether the delay which occurred meant a fair trial could not be conducted.

The premises increased value^[5]

13. [13]
    There was no direct evidence before the magistrate on this topic.  At best the material available to support an inference of increased value was the pleaded case that the appellant had engaged the respondent to undertake home improvements to a residential property enlarging its capacity from a single bedroom home to a three-bedroom home with improved amenities.  The dwelling is located in an established residential area.  In submissions, the appellant’s solicitor pointed to para 61 of the respondent’s set-off which claims a set-off for the completed works which resulted in improvement to the structure of the dwelling. 
14. [14]
    However, the complaint by the appellant related to partly completed works which she alleged had been paid for in full.  Plainly, whether the improvements had increased the value of the property or otherwise, is moot. It is not inconceivable that a partly completed project might in fact cause a diminution of value rather than an enhancement of value. There was no evidence either way to address this issue.  However, that said, it is also a matter of notoriety that general real estate prices for residential property, particularly in the greater-Brisbane area have escalated significantly over the past 10 years.  Ultimately, and relevant to this finding, the magistrate concluded:

“… there would seem to be little dispute that the premises at Scarborough have increased significantly in value, both due to the location when this work was completed and the change in the nature of the property from one bedroom to a three-bedroom, two bathroom property”^[6]

15. [15]
    The finding informed his conclusion that no impecuniosity on the part of the appellant explained the delay.  The inference of the property had increased in value was not an unreasonable inference to draw in all the circumstances.  However, finding that alone would not ordinarily be sufficient to found a conclusion of an absence of financial means.  Respectfully, much more information is required.  That would include evidence of cashflow such as by wages or whether from employment or other sources or indirect lines of credit such a beneficent  friend of the appellant, as was submitted to exist in this instance prior to the death of the appellant’s partner. 
16. [16]
    It was the appellant’s application, so she ultimately bore the onus of proof on this point, but in my view failed to discharge it.  Accordingly, the evidence being left as it was, namely the appellant had a valuable asset available to her, absent any other explanatory evidence, its availability would diminish any explanation of impecuniosity. 
17. [17]
    Ultimately, I think the finding by the magistrate that the appellant suffered impecuniosity which led to delay was open to him. It was equally open to find that there was nothing to the appellant’s complaint of being impecunious being causative of delay.  I also make the same finding.

Prejudicial effect of delay

18. [18]
    Although Taylor v Custom Credit Corp Ltd^[7] detailed a non-exhaustive list of matters to be considered in the context of an application for leave to take a step out of time, this element was the most controversial in the application and the appeal.  Although this factor is not the sole consideration it was, in context, a paramount one.
19. [19]
    The material on this issue before the magistrate was brief.  He was limited to one paragraph in the affidavit of each of the appellant and the respondent. 
20. [20]
    In her affidavit, the appellant stated at paragraph 39(b):

“39(b) The passage of time has not affected the availability of the key witness being the parties, or the primary evidence on which the parties rely, which has already been exchanged between the parties.”

21. [21]
    In his affidavit, the respondent stated at paragraph 10 - 14:

“10 Due to the delay I am unable to locate a number of key witnesses, such as tradesmen who performed the works, due to the following:

1. I am no longer in possession of their contact details; and/or

2. they are no longer living or working in the Brisbane area.

11 As the events alleged to have given rise to the plaintiff’s claim to a place between nine years and 11 years ago, my recollection and memory of the relevant events is diminished.

12 Furthermore, most of the documents which were in my possession with respect to the works, such as quotes and tax invoices, were given to the plaintiff at the time the works were carried out and are not in my possession.

13 This matter has caused me a significant amount of financial stress and anxiety since it began.  I am afraid that if this matter continues, it will increase my financial and psychological burden.

14 I thought that with the passing of the years, this matter had gone away, however, since my solicitors inform me that the plaintiff had brought the application, I have been pulling my hair out.”

22. [22]
    Prejudices are contended to fall into three groups.

    1. witness prejudice;
    2. documentary prejudice;
    3. personal prejudice to the respondent.

Witness prejudice

23. [23]
    Apart from the evidence of the appellant submitted on the issue she contended:

“The respondent had in March 2019 and at the time of filing his original defence been unable to recall events and provide particulars and disclosure material.  As such the appellant’s submission is that any delay does not prejudice the defendant (by reason of this issue) and a fair trial can proceed.”

24. [24]
    The respondent requested particulars of the appellant’s original statement of claim in September 2017 which particulars were provided in October 2017.  The particulars identified four witnesses beyond the appellant and the respondent.  They were Trevor Ballangry (relevant to the plumbing claim); Ian Blair (relevant to the termite claim); Bruce (relevant to the roofing or rear deck works); Aiden (the carpenter) (relevant to the back deck claim); Structerre Consulting Engineers (generally relevant to the construction).
25. [25]
    That left unaccounted witnesses in respect of decking materials, the electrical meter and the garden shed.
26. [26]
    In the respondent’s written submissions on this issue, he submitted:

“The unchallenged evidence of the respondent attests to the prejudice that he has suffered in respect of this proceeding due to the plaintiff’s delay.  This is primarily due to his inability to contact or call relevant witnesses, his diminished recollection of factual matters due to the passing of time, the lack of documentation that is now available to him to support his case and the financial cost of litigation that has now resurfaced.  This prejudice leads to an ability to ensure a fair trial.”

27. [27]
    Concerning that submission, a number of matters require addressing at this time:

    1. The Respondent’s contentions were not unchallenged.  The appellant contended for a diametrically opposite viewpoint, that is that there would be no prejudice for reasons identified in paragraph 27 of her submission and her opinion expressed in paragraph 39(b) of her affidavit that there would be no prejudice because the passage of time had not affected the availability of the “key witnesses”.  No doubt the appellant’s view was informed by her capacity to identify some of those witnesses in her pleading and relevant documentary material which she later discovered.  Plainly the prejudice now complained of would have been solely within the knowledge of the respondent. He bore the onus to demonstrate prejudice and produce material to support the contention. In my view that would have required him to identify it with sufficient particularity those lost witnesses by identifying their names or descriptions, the nature of their relevance such as contractor etc and the associated value of works or other association with the project and of the efforts undertaken to locate such witnesses. The respondent made no effort to provide any such particulars. In the absence of such material there can be no proper basis beyond speculation to conclude that respondent has been prejudiced by the loss of witnesses.
    2. In respect of documentation, the material suggests to the contrary of the respondent’s submissions.  Despite the litigation having been on foot for six years, the defendant has made no complaint concerning the availability of documentation at any earlier time prior to this submission.  At best the defendant asserted, for instance in response to the request for particulars, that such particulars as might be provided would be provided upon, inter alia, the completion of disclosure.  For instance, here, in the initial correspondence dated 20 September 2017, demands were made for the appellant’s production of documents. However no complaint was foreshadowed, for instance, that the defendant had destroyed or lost relevant documents which might have been relevant from its perspective in the proceeding.  Given it is a contempt to destroy relevant documents after the commencement of litigation, I proceed on the presumption that the respondent acted lawfully and did not destroy or mismanage any relevant documents in his possession.^[8] Upon that basis it is reasonable to conclude the respondent had all relevant documents in his possession.
28. [28]
    That leads the central issue in argument which concerns the respondent’s claim of prejudice related to witnesses occasion by delay.  I have outlined earlier the respondent’s sworn testimony on the issue.  To characterise that statement as “glib” is an understatement.  For reasons identified in the appellant’s submissions, it is fair to submit that the statement barely hurdles the evidentiary burden borne by the respondent. 
29. [29]
    In response, the respondent contends that as it raised and addressed the issue the onus shifted to the appellant to request any further particulars in respect of those matters and that in the absence of any such request it ought to be deemed sufficient. 
30. [30]
    I think the appellant properly held a well-founded belief that there would be no prejudice to the defendant in its obtaining witnesses because of delay.  First the appellant identified in its pleadings the particulars of the names of significant witnesses known to her.  Secondly, documents held by the appellant were also disclosed.  No doubt relevant documents would have identified other witnesses of relevance. Once informed of relevant witnesses and documents it is to be expected the respondent would have at the very least, sought to identify from that material those witnesses who he contends were unavailable and the reasons for their unavailability.  Further at a minimum it would be expected the respondent’s lawyers had obtained proofs of evidence from those who were so identified.  The inference open from the respondent’s submissions is that they had not done so.^[9] That omission shouldn’t unreasonably be visited upon the appellant.
31. [31]
    Although the onus is upon the appellant to satisfy the Court that grounds exist for exercising the discretion in its favour, there is an evidentiary burden on the defendant to raise any consideration telling against the exercise of the discretion.^[10]

32. [32]
    Ultimately the magistrate observed the respondent complained of prejudice because people he had engaged to do the work were, inter alia deceased.  That was not the evidence.  The matter arose in a submission made by the respondent which unfortunately was unchallenged by the appellant.  This view plainly informed the magistrate’s consideration of the issue of prejudice. Additional to that is the materiality of any such deceased witness. This was never explored. There was simply no foundation for the magistrate to either find there were now deceased witnesses or a deceased witness that was materially relevant to the proceeding. This might be best illustrated by references to payments made in kind by the provision of slabs of beer for in exchange for works undertaken by mates. Had that occurred and a mate was now deceased such a payment and associated works might have been immaterial in the context of a dispute over $61,000 for incomplete works.

Documentary prejudice

33. [33]
    I addressed this matter in part at paragraph 18(b) above. Further to that matter, I note that the appellant delivered UCPR 444 letter upon the defendant dated 12 November 2019 which was responded to by the defendant on 18 March 2019.  The defendant’s response in part asserted that the appellant’s request for particulars, may be obviated by the process of disclosure.  The request for particulars attached to the appellant’s UCPR 444 letter of 12 March 2019 was not included in her solicitor’s affidavit, but nonetheless again no complaint was foreshadowed or made in the respondent’s response to the UCPR 444 letter concerning difficulties that it had with documentation; but rather disclosure was anticipated as a means to resolve issues raised concerning particulars sought in respect of the pleadings.  The defendant ultimately produced its list of documents dated 29 March 2019.  Consistent with the UCPR, the list didn’t detail documents no longer in the defendant’s possession.  However such documents now contended to no longer exist, if they existed, were on any view plainly relevant.  The defendants’ early failure to indicate that the earlier loss of documents or their details would now prejudice a fair trial appears disingenuous. Further it was potentially unintentionally misleading distracting the appellant from pursuing her rights for specific orders concerning those documents – see UCPR 223(2).  The first time any issue was made concerning documents is in the respondent’s affidavit at paragraph 12 where he swore that most of the documents which were in his possession with respect to the works such as quotes and tax invoices were given to the appellant at the time works were carried out and therefore not in his possession.  Curiously, I note that the appellant makes disclosure of some of that material in her list of documents filed 8 August 2023, which by implication does not include all documentation contended to be relevant by the respondent.  Plainly had she done so, the defendant would have no basis to claim prejudice.  He has made no complaint of inadequate disclosure by her or application for further and better disclosure, a course plainly open to him if he has a basis to challenge the conclusiveness of the appellant’s list of documents.  It follows that none of these matters suggests concerns about documents were alive at any stage prior to this application.
34. [34]
    None of these matters were explored in any detail in submissions by either party before the magistrate.  Following my analysis of matters, the situation is that as the matter currently stands, disclosure is substantially complete which renders the proceeding substantially ready for trial.  While I recognise that both parties maintain pleadings might require some amendment, the issues are sufficiently articulated to contain the dispute.  Indeed, in terms of further preparation for trial, a greater return for expense and effort is likely to be achieved by filing of statements rather than tinkering with the pleadings.  However these are matters for case management and are made purely by way of comment or observation by me.

35. [35]
    In summary, in this case I am not satisfied the respondent has demonstrated any such prejudice.  As earlier observed the appellant adequately identified the issues in its pleadings and particulars she specifically identified relevant documentation know to her.  Plainly a significant body of documentary material existed.  The respondent now submits that the loss of or unavailability of documents have now occasioned prejudice.  He did nothing to put the appellant on notice of that matter. Had he done so the appellant could have sought to clarify the position by requesting the respondent’s list include documents that were once but no longer are in his possession.  For instance, had the appellant been put on notice that a body of documents of documents which no longer existed and in turn not requested that information I may well have concluded this matter less critically of the respondent. On the respondent’s case he is no more or less prejudiced by the unavailable documents. It simply means his oral testimony becomes more significant on matters related to the issues that might otherwise have been addressed by the missing documents. In my view the issues related to disclosure have now largely been concluded. Furthermore the respondent makes only glib assertions of prejudice. Accepting documents may now be lost their significance is not exposed. In the absence of an understanding of what documents are no longer available and their materiality it is impossible in the absence of speculation to conclude the issue of prejudice on this point.
36. [36]
    Accordingly I consider the respondent did not provide any substantive basis for the magistrate’s conclusion that the proceeding is not at a stage where it can be listed for trial.  Much of the focus of the procedural contest to date concerned particulars.  No substantive complaint has been made concerning disclosure and importantly no complaint has ever been made prior to the application concerning the effect delay had upon the respondent’s disclosure such as to put the appellant on notice concerning lost documentation.  Later the debate included issues related to disclosure but the respondent made no substantive complaints about it.   I do not think in this case the state of disclosure would indicate a lack of readiness for trial or support any conclusion that the matter is not ready for trial.  Likewise in my view the totality of facts concerning disclosure and pleadings do not support that conclusion. 

Personal prejudice

37. [37]
    It is correct that significant time has elapsed between the relevant events and the present.  Undoubtedly the memory of the relevant witnesses will be and has been affected.  However, the case is one that will principally be supported by documentation accompanied by the objective evidence of the quantity surveyors engaged early in the proceeding.  The tribunal effect will be well positioned to proceed with a hearing concerning those matters as and when they arise.   The trial may not be a perfect trial but nonetheless I am satisfied that overall a fair trial can be achieved in the circumstances of this dispute despite the delay to date. 

Explanation for delay

38. [38]
    This proceeding has been characterised by significant delay on the part of both parties.  I accept it is not the respondent’s role to urge the appellant to prosecute the litigation against himself.  However, he does have a general obligation to pursue in accordance with UCPR 5.  That includes where appropriate an application to strike out a proceeding for want of prosecution.  I note that no such application was ever made until one was made in response to the appellant’s application for leave to proceed.
39. [39]
    The early delay in the proceeding can in part be explained by the manner in which the proceeding was conducted.  Specialist tribunals exist for cases such as this.  As a domestic construction dispute a specialist forum is provided by QCAT.  In my view much of the early delay involved skirmishes directed to inutile contests over particulars and pleadings. The delivery of a Scott Schedule accompanied by an exchange of statements attaching relevant documentation would have more effectively focused the parties on the issues and achieved a much more expeditious and cost-effective outcome. In this instance both parties appear to have floundered about unsure of how to prosecute/defend the proceeding.
40. [40]
    The delay which in my view warrants greater attention is that which concerns the delay between 2021 and 2023.  However, that delay is explained. I have no reason to doubt the appellant’s evidence concerning both the emotional and financial challenges she faced over that period.  I am satisfied a reasonable explanation for the delay has been provided.

General matters

41. [41]
    Furthermore, complaint was made by the respondent that the appellant had delayed in the prosecution of the proceeding to such an extent that the interlocutory stages were far from complete.  Again, this submission appears to have significantly affected the Magistrate’s conclusion.  For reasons explained I am not satisfied that this is entirely correct.  The proceeding has been characterised by significant interlocutory skirmishing.  That has been permitted to proceed unchecked because the proceeding was not adequately case managed.  That is no criticism of the Magistrate’s Court or the presiding Magistrate.  This matter was plainly not one suitable for disposition in the Magistrates Court. The respondent relied upon the decision in Mathiesen v Lawson and Ors^[11]. However as was submitted by the appellant this decision is readily distinguishable from the case now before me.
42. [42]
    Other matters which might be considered in terms of the non-exhaustive list provided in Tyler v Custom Credit Corp Limited include:

    1. The action appears to be a proper action which depending upon the facts affords the plaintiff prospects of success; and
    2. In this claim the plaintiff alleges that she has overpaid the respondent. Thus to some extent if she is correct her impecuniosity can in part be attributed to the conduct of the respondent.  Of course, this remains a matter to be determined by trial.

Summary

43. [43]
    In summary, upon a complete consideration of the material placed before the magistrate it appears the magistrate’s decision was informed by matters which were not supported in the evidence before him.  In fairness the Magistrate was in my view mislead by submissions made during the course of argument before him.  I do not suggest that those submissions were made intentionally but rather submissions presented a gloss on material by the respective solicitors who appeared before the magistrate.  Unfortunately, the fact remains that submissions were made which were not supported by the evidence and in turn the magistrate’s decision was misinformed.  It follows that the magistrate’s decision ought be set aside. 
44. [44]
    Upon a review of the material conducted in accordance with principles informing an appeal by way of rehearing I am satisfied that the magistrate’s discretion had miscarried. In this instance, informed by the principles governing an application for leave to proceed and based upon the evidence before me the magistrate should have granted the appellant leave to proceed.  The appeal will be allowed, and I will now so order.

Further steps

45. [45]
    As I foreshadowed this proceeding is not one which I think is appropriate for the Magistrate’s Court.  QCAT has a non-exclusive jurisdiction to determine domestic building disputes as defined in the Queensland Building and Construction Commission Act 1991.  This is such a dispute.  The Tribunal conducts a building list which appropriately case manages disputes of this kind in order to ensure their efficient and expeditious as well as cost effective determination.  As part of my orders, I will direct that the proceeding be transferred from the Magistrates Court to the Queensland Civil & Administrative Tribunal for a disposition.

Orders

46. [46]
    I direct that the parties prepare a form of order giving effect to this ruling and submit to the court within 48 hours and reserve the matter of costs.