Lilypond Constructions Pty Ltd v Homann
[2005] QSC 263
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- Unreported Judgment
- Lilypond Constructions Pty Ltd v Homann[2005] QSC 263
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Lilypond Constructions Pty Ltd v Homann[2005] QSC 263
Reported at [2006] 1 Qd R 411
Lilypond Constructions Pty Ltd v Homann[2005] QSC 263
Reported at [2006] 1 Qd R 411
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO: | |
Trial Division | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 23 September 2005 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 9 September 2005 |
JUDGE: | Mackenzie J |
ORDER: | 1. Leave to withdraw admission in amended defence is granted and leave to amend the amended defence is granted 2. Applications for summary judgment are dismissed 4. On the defendants’ application for leave to withdraw the admission and to amend, no order as to costs 5. On the applicant’s applications for summary judgment, the plaintiff to pay the defendants’ costs of and incidental to the applications to be assessed 6. On the plaintiff’s application for production pursuant to r 223, the plaintiff pay the defendants’ costs of and incidental to the application to be assessed |
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – SUMMARY JUDGMENT - where plaintiff sought judgment pursuant to r190 UCPR in respect of claim for payment of money – where plaintiff relied on an admission of liability by the defendant in amended defence – where defendant claimed amendment to defence containing the admission was made in error – where plaintiff claimed summary judgment pursuant to r292 UCPR in the alternative to judgment under r190 UCPR - whether plaintiff could rely on admission in amended defence to satisfy requirements of r190 – whether court should give summary judgment pursuant to r292 because defendants have no real prospect of success at trial PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – PLEADINGS – AMENDMENT – where defendants sought leave pursuant to r375 UCPR to amend amended defence – where amended defence contained an admission – where defendants claimed that inclusion of admission in amended defence was made by mistake and was contrary to defendants’ instructions – where defendant claimed in the alternative leave to withdraw admission pursuant to r188 UCPR – whether court should exercise discretion to allow defence to be amended – whether court should grant leave to allow defendant to withdraw admission contained in amended defence Uniform Civil Procedure Rules 1999 (Qld) r 188, r 190, r 222, r 292, r 375 Ridolfi v Rigato Farms Pty Ltd (2001) 2 Qd R 455 |
COUNSEL: | B Codd for the applicant T Matthews for the first, second, third and fourth defendants |
SOLICITORS: | O'Keefe Mahoney Bennett for the applicant Lang Hemming and Hall for the respondents |
[1] MACKENZIE J: These matters are, firstly, an application by the plaintiff for summary judgment on what is alleged to be an admission in paragraph 34 of the amended defence. The application is made on two bases, rule 190 which allows for judgment on an admission and rule 292, summary judgment on the basis that the defendant has no real prospect of successfully defending all or part of the plaintiff’s claim and there is no need for a trial of the claim or part of the claim. Secondly, there is an application by the defendants to withdraw an admission (rule 188); alternatively, there is an application to amend the defence (rule 375).
[2] The statement of claim so far as relevant for present purposes discloses that the plaintiff purchased and had transferred to it a parcel of land. Subsequently, purporting to act for the plaintiff, the first defendant executed a transfer to the second defendant and caused it to be registered in the second defendants’ name. Consideration was shown as $350,000. It is alleged that none of the consideration was paid to the plaintiff.
[3] Paragraph 34 of the defence in its original form, filed on 17 March 2005, alleged that the contract between the plaintiff and the second defendant was due to be settled on or before 12 months from the date of the contract. Pursuant to a pleaded agreement, $110,296.45 was to be payable to the plaintiff, $4,000 to another person associated with the plaintiff but not a party to the action and the balance to the third defendant.
[4] There was a request for further and better particulars which addressed, inter alia, paragraph 34 of the defence. Further and better particulars were duly given which included a paragraph that described that distribution of the net proceeds of sale was to be $206,890 to the plaintiff and the balance to the third defendant. According to the defendants’ solicitor, it became apparent that it would be necessary to amend the defence when there was a further request for further and better particulars because of alleged inconsistencies arising from the further and better particulars.
[5] An amended defence was filed on 20 July 2005, containing a paragraph 34 which affectively said that the second defendant was obliged to pay the plaintiff $350,000 on or before 12 months of the contract. The pleading in that form is the genesis of the application for summary judgment. It was repeated in an amended defence filed on 11 August 2005 which complied with rule 382, which requires amendments to be made distinct, which the first amendment of paragraph 34 had not. In the compliant amended defence, original paragraph 34 was struck through and the paragraph relied on as the basis for the summary judgment applications was marked as the amended version.
[6] As the application by the defendants was in response to the plaintiff’s applications for summary judgment, it was argued as an application to withdraw admissions rather than for an amendment in the first instance. In support of this application, Mr Homann, the first defendant, swore an affidavit on behalf of all defendants that paragraph 34 in the defence of 17 March 2005 represented his instructions. The solicitor for the defendants deposed that a draft defence, which required further instructions to be obtained before it could be finalised, was provided by counsel. In consequence of the further instructions, paragraph 34 was amended into the form in the defence of 17 March 2005.
[7] After correspondence about the further and better particulars, counsel was briefed to draw an amended defence. The amended defence returned to the defendants’ solicitor contained the original draft paragraph 34 that did not, according to the defendants, represent their instructions. The error was not noticed before the amended defence was filed on 20 July 2005. This was the defence that did not comply with rule 382.
[8] The following day the plaintiff’s solicitors raised that non-compliance. The correspondence did not specifically refer to paragraph 34. However, a reference to it was made in a letter dated 1 August 2005. It is deposed that on 11 August 2005 the plaintiff’s solicitor told the defendants’ solicitor that the paragraph 34 appearing in the amended defence had been erroneously included. This is not the subject of any denial by the plaintiff’s solicitor. On 17 August 2005 there was a conversation between the solicitors and it is common ground that the defendants’ solicitor explained to the plaintiff’s solicitor that paragraph 34 was incorrect and that paragraph 34 in the defence filed on 17 March 2005 was correct. On that day the application for summary judgment was foreshadowed and in the absence of response to a proposal to avoid that step being taken, the application was filed on 18 August 2005. On 23 August 2005 the defendants’ application was filed.
[9] The explanation given by the defendants’ solicitor for the fact that the compliant defence filed on 11 August 2005 struck out the defence intended to be relied on and indicated that the wrong version was to be relied on, was due to a misunderstanding in his firm. It was because of this that the correct version was marked as having been deleted and the wrong version marked as the amendment.
[10] The plaintiff’s solicitors assertion is essentially that because of his letters of 20 July 2005 and 1 August 2005, the latter of which included express identification of the discrepancy with respect to paragraph 34, the amendment was not made in error and actually reflected the defendants’ pleadings. He asserts that he believes the defendants would never have brought their cross-application to amend or withdraw paragraph 34 of their own volition but for the plaintiff’s application for summary judgment.
[11] Rule 188 permits a party to withdraw an admission only with the court’s leave. The matter was argued on the assumption that paragraph 34 contained an admission subject to that wide discretion. There is sworn evidence of how paragraph 34 in the alleged erroneous form appeared in the pleading (Ridolfi v Rigato Farms Pty Ltd (2001) 2 QdR 455 – concerning the analogous provision in rule 189(3)). There is nothing to indicate, on the occasion the allegedly erroneous paragraph 34 first appeared, that it was intended to be an amendment, although the force of this observation is diminished by inattention to rule 382 in other respects during the proceedings. Nevertheless, there is no substantial circumstantial or other evidence that the application is a mere attempt to avoid summary judgment.
[12] On 24 August 2005 a document headed “notice to produce” requiring “production and copies of … documents mentioned expressly or by implication in the affidavits of the defendants’ solicitor and the first defendant pursuant to various paragraphs of their affidavits was served on the defendants’ solicitor. Typically, the notice to produce required production of “all and any written material” including, in some cases, file notes, associated with paragraph 34 of the defence. Rule 222 provides that a party may by written notice require another party in whose pleadings particulars or affidavits mention is made of a document to produce it for inspection and to permit copies to be made. The focus of rule 222 is the allegation that mention is made, in this case, in two affidavits. The notice to produce, which subsequently was used as the basis for an application for an order that the documents sought in the notice to produce be disclosed, proceeds on the assumption that there would be such documents but does not identify any specific document as having been mentioned in the affidavit.
[13] The affidavit by the defendants’ solicitor refers to “instructions” in different senses. It does not refer expressly to documents containing instructions. In paragraph 2 it is used, on the first two occasions, in the sense of detailed information concerning the case and, more particularly, the absence of such information. The third and fourth times it is used do not expressly refer to documents. Nor does the reference in paragraph 3. The use of the word in paragraph 5 is in the context of instructions yet to be received. The only reference in the affidavit of Mr Homann does not refer to documents.
[14] It is undoubtedly probable that some documentary evidence of instructions was created at some time. However, it seems to me that rule 222 is directed towards a particular situation, that is to say where a document is specifically referred to in the affidavit. Where it is impossible to identify a specific document referred to in the affidavit and the affidavit is ambiguous as to whether any document was in existence at the time relating to the particular reference to “instructions”, I am not persuaded that rule 222 has any operation. In my view rule 222 requires a clear and unambiguous reference to a document before it can operate.
[15] It should also be recorded that when the issue of disclosure of instructions was raised by the plaintiff’s solicitors, the defendants’ solicitors claimed that legal professional privilege applied to the documents. The plaintiff’s solicitors maintained it had been waived. In view of the conclusion expressed above as to the circumstances necessary to trigger rule 222 it is unnecessary to consider this issue further on this occasion. The application for an order under rule 223(1), based on non-compliance with rule 222 is refused.
[16] Returning to the issue of leave to withdraw, giving an explanation in support of an application to withdraw an admission does not necessarily result in leave being given to withdraw but where the evidence suggests, as in this case, that the admission was due to a production error in the process of drafting a subsequent version of the defence, the case is strong. By way of resistance to the application it was submitted that the plaintiff’s solicitor had not required an amended defence, that the amendment was not forced on the defendants and that there was a presumption that the defendants had given instructions which reflected the admission.
[17] Where inadvertence is relied on those kinds of considerations beg the question. What is said to be the correct version of the defendants’ defence may be inferred, from the early steps in drafting, to have been one of the matters dependent on the obtaining of further instructions after a first draft was done by counsel. The first version of the defence filed did not include it. Assuming that it is correct that it is relevant to consider whether the grant of leave to withdraw an admission would not affect the outcome of the trial, there are a number of issues of fact in dispute on the pleadings and on the affidavit evidence in these proceedings. It is of no assistance to argue a case that one version should be believed over another in proceedings of this kind. Such conflicts can only be resolved by hearing evidence. On the material before me, I am unable to find that there is no genuine dispute. Further, no specific prejudice, over and above what may be assumed flows from delay in resolution of the proceedings, has been alleged.
[18] Accordingly, leave to withdraw the admission in paragraph 34 of the amended defence is given. Consequentially I give leave to amend the amended defence.
[19] As previously mentioned, the application for summary judgment is made in the alternative. Rule 292 was also relied on. In this case, as in the application under rule 190, the application was based on the admission in the existing paragraph 34. It is therefore premature to consider summary judgment on the basis of an amendment yet to be made, which, if made in the form said to be the correct version of paragraph 34 may leave room for argument whether it is an admission for the purpose of either rule 190 or rule 292. Where, under rule 292, the test is whether the defendant has no reasonable prospects of success on all or part of the claim and there is no need for a trial of the claim or part of the claim, the necessity of having settled pleadings to consider is obvious. In addition the same considerations relating to the existence of issues of fact needing determination applies to this application. The application for summary judgment on each of the grounds is dismissed.
[20] With regard to costs, subject to any submissions that the parties may wish to make, I make the following orders:
1.On the defendants’ application for leave to withdraw the admission and to amend, no order as to costs.
2.On the applicant’s applications for summary judgment, the plaintiff to pay the defendants’ costs of and incidental to the applications to be assessed.
3. On the plaintiff’s application for production pursuant to r 223, the plaintiff pay the defendants’ costs of and incidental to the application to be assessed.