Cosmos E-C Commerce Pty Ltd v Bidwell & Associates Pty Ltd

Court of Appeal (NSW)|2005-05-18|Before: Hodgson JA, Ipp JA, Ms J

The application of Pt 11A r 2 28 Part 11A r 2 relevantly provides as follows: 2 Summary judgment (1) Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff: (a) there is evidence of the facts on which the claim or part is based,and

(b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed,

the Court may, at any time, give such judgment for the plaintiff on the claim or part as the nature of the case requires.

(2) Without limiting subrule (1), the Court may, under that subrule, give judgment for the plaintiff for damages to be assessed, and where the Court gives such a judgment the action shall go to trial only as to the assessment of damages.

(3) … (4) … (5) …

29 Mr Graham QC, appearing for the claimant, submitted that this rule has three requirements. First, there must be evidence of the facts on which the claim is based. Secondly, there must be evidence of the belief that the defendant has no defence to the claim. Thirdly, if those two requirements are established, then the court has a discretion as to whether or not to exercise the power conferred by the rule. In the claimant's submission, the primary judge erred in the application of the rule. It asserts that triable issues were disclosed by the statement of claim and the grounds of defence, and having regard to those triable issues, the primary judge failed to apply the correct principle in dealing with the application to order summary judgment, and that, accordingly, his discretion miscarried. 30 It is convenient, I think, to deal with the claimant's submissions by dealing separately with the question of a triable issue and the exercise of the discretion conferred upon the primary judge by Pt 11A r 2, and then by dealing with the submission that the requirement for evidence of belief was not met in this case.

31 The claimant asserts that the statement of claim and the grounds of defence disclosed a number of triable issues, amongst which were at least the following:

Who were the parties to the alleged agreement between the opponent and the claimant?

Was there an intention between the parties to create an agreement, and, if so, what were the precise terms and conditions of the alleged agreement?

What consultancy services were alleged to have been performed?

Was consideration given for the alleged consultancy services to be provided by the opponent to the claimant?

Was there past consideration in relation to consultancy services apparently rendered by the opponent to the claimant before the alleged agreement came into existence? 6. Was the consideration offered illusory?

Was there conduct on the part of the opponent that entitled it to demand a debt due from the claimant?

Was the agreement, if there was one, void for uncertainty? 32 The claimant pointed to a number of matters in the evidence before the primary judge that it claims support a finding that triable issues were disclosed. First, it pointed to the uncertainty of the range of dates disclosed in cl 2 of the particulars set out in the statement of claim that asserted the making of an agreement "…between August and 21 December 1999…" Secondly, it pointed to the assertion, in cl 3(a) of the statement of claim, that consultancy services were to be provided by Mr Bidwell, raising uncertainty as to whether he was a party to the alleged agreement in his own capacity and whether the opponent in fact was the proper plaintiff in the proceedings. This uncertainty is reflected in the first affidavit of Mr Bidwell, where he deposed to his conversation with Mr Jim Gilchrist and to his conversation with Mr Adam Gilchrist, which both appear to have involved him in his personal capacity. Thirdly, it points to the retrospective nature of the alleged written agreement, that is, that it was alleged to have been made on 18 May 2000 in respect of consultancy services alleged to have commenced on 12 March 1999. Fourthly, it points to the variations between the alleged oral agreement and the alleged written agreement - for example, the latter provided for a daily fee "…for a minimum of three days per week…" and it also provided for payment within 21 days of invoice date, neither of these matters having been pleaded as terms of the alleged oral agreement. Fifthly, it points to the uncertainty as to who was to be the recipient of the alleged consultancy services - both the oral and written agreements, as pleaded, suggests the consultancy services were to be provided to the defendant or any other company in the Cosmos group, but cl 6 of the particulars in the statement of claim refers to consultancy services being provided to the defendant. 33 Having regard to these matters, the claimant contends that triable issues were disclosed that required determination on their merits at a final hearing. 34 In response, the opponent submits that the primary judge was correct in finding that no triable issue had been disclosed. That follows, in its submission, from the evidence of Mr Noble. He was a director of the claimant at all relevant times, and in a position to know what matters were considered at any board meeting of the claimant. His affidavit disclosed that one of those matters was the material contained in the explanatory notes. The explanatory notes contained, in the opponent's submission, a clear admission that the sum of $211,000 was due and owing by the claimant to the opponent. They also acknowledged that the claimant was providing services through Mr Bidwell, they disclosed the nature of those services, and they disclosed that the services so provided were being monitored on a daily basis. 35 The opponent submits that, in addition, there was evidence of invoices being submitted from time to time by the opponent to the claimant, and there were e-mails being exchanged between Mr Bidwell and Mr Jim Gilchrist (or persons on the latter's behalf) as to arrangements for the payment of the amounts claimed in the various invoices. 36 Accordingly, so the opponent submits, no triable issue was disclosed. The amount claimed was acknowledged in the evidence as a debt due from the claimant to the opponent arising out of the performance of a contract for the provision of consultancy services for a fee. 37 The basis for the exercise of a court's jurisdiction to order summary judgment is not in doubt. In Dey v Victorian Railways Commissioners (1949) 78 CLR 62, Dixon J said, at p 91 that"…a case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury". In General Steel Industries Inc v Commissioner for Railways (NSW) and Ors (1964) 112 CLR 125 at 129. Barwick CJ stated that the jurisdiction to terminate an action "…is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion." Both those authorities dealt with the exercise of a power of summary dismissal of a plaintiff's claim, but, in Theseus Exploration NL v Foyster (1972) 126 CLR 507, which dealt, amongst other things, with the giving of summary judgment, Barwick CJ at 514 said: Perhaps the summary intervention to prevent the continuance of a plaintiff's action ought to be much rarer than the giving of summary judgment but there is sufficient correspondence in the two situations to make apposite to this case much of what I said in General Steel Industries v Commissioner for Railways (N.S.W.).."

38 Webster and Anor v Lampard (1993) 177 CLR 598 was also a case involving the exercise of a power to give summary judgment. At pp 602-603 in a joint judgment, Mason CJ and Deane and Dawson JJ cited both Dey v Victorian Railways Commissioners and General Steel Industries v Commissioner for Railways for the proposition that the power must be exercised with exceptional caution, and stated that "[n]owhere is that need for exceptional caution more important than in a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact." 39 In my opinion, the requisite standard outlined by those authorities has not been met in this case. I think that it was far from certain that no triable issues were disclosed. I say that for the following reasons. First, the opponent's claim was founded on an alleged agreement and on an allegation that the claimant was in breach of that agreement, entitling the opponent to the amount it claimed. But the claimant has shown that there were a myriad of uncertainties about that agreement. The evidence raised a number of questions about whether there was in fact an agreement, and, if there was, who were the parties to it and what were its terms. In addition, there were questions as to whether there was a breach of the agreement, and, if so, what constituted that breach. It seems to me that all these questions needed to be determined on their merits at a trial. 40 Secondly, I do not think that it is clear that the explanatory notes amounted to an unequivocal admission that a debt in the amount claimed was owed by the claimant to the opponent, so that, as the opponent claims, there is no triable issue between the parties. The explanatory notes were also uncertain. They were an internal document, labelled as a "draft", and there is a conflict in the evidence as to their effect. Mr Noble claimed that they disclosed an arrangement for the issue of shares in satisfaction of debts due to consultants, but Mr Bidwell claimed that he had no knowledge of any such arrangement.. Furthermore, they are expressed to have been written by the managing director but the reference to "Note to JG" casts some doubt upon who wrote them, since "JG" may have referred to Mr Jim Gilchrist, who may himself have been the managing director. Furthermore, they appear to be no more than the writer's opinion as to a particular state of affairs. 41 Having regard to these matters, I consider that the material before the court below was not so clear and definite as to justify summary intervention, and that, accordingly, the primary judge erred in applying the proper test and his discretion miscarried upon this basis. 42 The claimant raised an alternative basis for its contention that the primary judge erred in his approach to determining whether a triable issue had been disclosed. It submits that the primary judge erred in making findings of fact that would ordinarily be adjudicated upon at a final hearing. It asserts that the correct approach is to examine the evidence before the court, not for the purpose of making findings of fact where the evidence conflicts, but to determine whether a triable issue is disclosed. That is the test enunciated by Handley and Cripps JJA in Wickstead v Browne (1992) 30 NSWLR 1 at 9. The claimant submits that his Honour fell into error in failing to apply that test. Instead, in the claimant's submission, his Honour made findings of fact by preferring the evidence of Mr Bidwell over that of Mr Noble, simply upon their affidavits and without the benefit of cross-examination. 43 I do not accept this alternative submission. It is clear, I think, that the primary judge had regard to the material before him simply for the purpose of determining whether a triable issue had been disclosed. In my opinion, he did not go beyond the limits of a proper inquiry in the application before him; rather, he erred in exercising his discretion in favour of the opponent when the case presented on the material before him was far from clear and definite.

44 The claimant submits that the primary judge erred in concluding that the belief of the opponent, required to be evidenced pursuant to Pt 11A 2r 2(1)(b), could be inferred. It asserts that direct evidence of the belief is required for compliance with the rule. 45 As authority for this proposition, the claimant cited the decision of Blackburn CJ in the ACT Supreme Court in Harry Smith Care Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1979) 29 ACTR 21. In that case, a director of the plaintiff had sworn an affidavit containing the words "…in my opinion the defendant has no defence to this action." His Honour held that this was not in compliance with a rule similar to Pt 11A r 2(1)(b) because it was a statement of opinion rather than belief. His Honour said at p 23: The rule requires a form of words which unequivocally implies an actual belief by the deponent in the truth of every fact required to establish the plaintiff's claim, and in the absence of any fact which could ground a defence in fact or in law. Such a form of words affords a proper basis for cross-examination. A statement of opinion, on the other hand, is neither unequivocal nor, strictly speaking, relevant. 46 However, in my opinion, this case is merely authority for the proposition that evidence of an opinion does not constitute sufficient compliance - it does not supports the proposition that the belief cannot be inferred from the evidence furnished by the plaintiff or other responsible person. 47 Part 11A r 2(1)(b) simply requires that there be evidence given of the belief. I would not hold that the rule precludes inferring the requisite belief from the evidence furnished by the plaintiff or other responsible person. The precise form of the evidence is not the critical point of the rule. What is required is the requisite belief, and in my opinion that can be established by an inference properly drawn from evidence furnished by the plaintiff or other responsible person. 48 For these reasons, I consider that the primary judge did not fall into error in relation to the application of the requirement in Pt 11A r 2 (1)(b). The disposal of the appeal 49 For the reasons that I have set out, I would grant leave to appeal and I would allow the appeal. Two matters, however, arise. 50 The first matter is the submission by the opponent that, if the Court were to uphold the appeal, it should do so on terms, namely, that the claimant should be ordered to pay the amount claimed by the opponent into court. It was submitted that, having regard to the grounds of defence as drafted and the circumstances of the case, the Court must have a real doubt about the genuineness of the defence. In making this submission, Mr Robberds QC, appearing on behalf of the opponent, relied upon the decision of Lord Justice Devlin in Fieldbank Ltd v Stein (1961) 1 WLR 1287 in the English Court of Appeal, where his Lordship, at p 1289, embraced the notion of imposing some condition upon a defendant in circumstances where the court is "…..left with a real doubt about the defendant's good faith…" Mr Robberds also drew attention to an example in the Federal Court in Tomlinson and Anor v Cut Price Deli Pty Ltd and Ors (1992) 112 ALR 122 where Drummond J made orders on the condition that the plaintiff paid money into court or provided security. 51 However, I can see no reason to impose any terms upon the claimant. I am not persuaded that the claimant lacks good faith or that its actions to date have not been genuine. Nor is there any evidence to warrant a finding that it would not be able to meet any order made against it if the opponent was wholly successful at the trial. 52 The second matter is the question of costs. The claimant has abandoned its appeal in relation to the order rejecting leave to file amended grounds of defence, and it should be required to pay the opponent's costs thrown away as a consequence of that abandonment. Otherwise, the claimant has been successful and it should be awarded its costs. 53 The orders I would make are as follows:

Leave granted to the opponent to appeal; Notice of Appeal to be filed within seven days; 2. The appeal is allowed; 3. The following orders of Cooper ADCJ are set aside: (a) the order striking out the claimant's grounds of defence; (b) the order giving summary judgment for the opponent; (c) the order setting the proceedings down for the assessment of damages; (d) the orders as to costs on the opponent's notice of motion. 4. Set aside the orders of Rolfe DCJ;
Order the opponent to pay the claimant's costs of: (a) the application for leave and the appeal, except in relation to the abandonment of any appeal against the orders rejecting leave to the opponent to file amended grounds of defence; (b) the opponent's notice of motion in the court below. 6. Order the claimant to pay the costs of the opponent thrown away by reason of the abandonment of any appeal against the order rejecting leave to the opponent to file amended grounds of defence. 7. The opponent is to have a certificate under the Suitors Fund Act if so qualified.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION: Cosmos E-C Commerce Pty Ltd v Bidwell & Associates Pty Ltd [2005] NSWCA 81

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