Gabriel v Grech

Introduction

1. By summons filed on 8 September 2017, Joseph Gabriel (the plaintiff) appeals against the decision of Atkinson LCM to dismiss his claim against Paul Grech, the first defendant, for damage sustained by a BMW motor vehicle (the BMW) which he allegedly owned. The damage was the consequence of a rear end collision which occurred on 4 August 2011 when the BMW, which was driven by the plaintiff's son, Mark Gabriel, the third defendant, was hit from behind by a Berlina driven by Mr Grech. Mr Grech had hired the Berlina from the second defendant, Drive My Car Rentals Pty Ltd (DMC). The appeal is brought pursuant to s 39 of the Local Court Act 2007 (NSW); or, if leave is required, pursuant to s 40 of the Local Court Act.
2. In her Honour's reasons for decision dated variously 9 March 2017 and 10 March 2017, which were emailed to the parties, (the First Decision) the Magistrate found: 1. Mr Grech's negligence caused the damage to the BMW driven by the plaintiff's son on 4 August 2011 when the Berlina collided with the BMW; 2. the damage suffered amounted to $15,900; 3. the collision was not staged and therefore not fraudulent (contrary to allegations that had been made by DMC in the cross-claim); 4. at the relevant time the plaintiff's son, but not the plaintiff, owned the BMW; 5. as the plaintiff did not own the BMW at the relevant time, Mr Grech was not liable to the plaintiff and the plaintiff's claim ought be dismissed; 6. DMC was liable to Mr Grech for any damages for which Mr Grech was liable to the plaintiff but as Mr Grech was not liable, the cross-claim ought be dismissed.
3. In substance, the plaintiff appeals against the order dismissing the claim on the basis that it was not open to her Honour to make finding (4) as it was not in issue between the plaintiff and Mr Grech, the allegation of ownership made in the statement of claim having been admitted in the defence. The plaintiff also seeks leave to appeal against the costs orders made by the magistrate (set out below).
4. DMC has filed a notice of contention alleging that the magistrate's decision was correct in that the plaintiff failed to prove that he had suffered loss as a result of the collision.
5. The plaintiff in these proceedings was the plaintiff in the Local Court. Mr Grech, the first defendant in this Court, was the sole defendant and also the cross-claimant in the Local Court. DMC is the second defendant in this Court and was the cross-defendant in the Local Court. Mark Gabriel was not a party to the proceedings in the Local Court but is the third defendant in the proceedings in this Court. To avoid confusion, the parties will be referred to as the plaintiff, Mr Grech, DMC and the plaintiff's son.
6. Mr Baron Levi appeared for the plaintiff and his son in this Court. There was no appearance in this Court on behalf of Mr Grech. Mr Barham appeared for DMC in this Court and in the Court below.
7. An amended summons was filed on 3 October 2017. The plaintiff sought relief in the alternative for orders that the plaintiff's son be substituted for the plaintiff. He also sought an extension of time, if such an extension be required, for commencing the proceedings in this Court. For the reasons set out below, I do not need to determine the alternative case and I am satisfied that, if an extension of time be required, it ought be granted.
8. On 5 December 2017 DMC filed a notice of motion to strike out the proceedings as incompetent on the basis that they had been filed out of time. The application was heard on 20 March 2018 and dismissed by Walton J on 1 November 2018: Gabriel v Grech [2018] NSWSC 1652. On 6 May 2019 DMC filed a notice of motion for orders requiring the plaintiff to provide security for the costs of the appeal. The motion was heard on 14 August 2019 and dismissed by Harrison AsJ on 11 September 2019: Gabriel v Grech [2019] NSWSC 1163. The costs of each of these applications were reserved.

The pleadings in the Court below

1. In the Local Court, the plaintiff alleged in his statement of claim that he was, at all material times, the owner of the BMW. This allegation was admitted by Mr Grech in his defence. Thus, there was no issue between the plaintiff and Mr Grech that the plaintiff owned the BMW or, implicitly, that he had standing to sue for any damage to the BMW. The only issues between the plaintiff and Mr Grech on the pleadings were whether Mr Grech's negligence had caused the collision and whether any damages ought be reduced for contributory negligence on the part of the plaintiff's son, who was driving the BMW at the relevant time.
2. A "statement of agreed facts and issues in dispute", signed by counsel for the plaintiff and counsel for Mr Grech, was filed by the plaintiff. It contained, as the first agreed fact, the allegation that, as at 4 August 2011, the plaintiff was the owner of the BMW. It was not tendered as evidence. The parties have been unable to point to a statement by a party before the court with the agreement of all other parties. Accordingly, s 191 of the Evidence Act 1995 (NSW) does not apply. The significance of this statement will be addressed below in the context of the parties' submissions.
3. Initially, the only two parties to the proceedings were the plaintiff and Mr Grech. As there was no appearance filed by Mr Grech, the plaintiff applied for default judgment, which was entered. Mr Grech successfully applied to have the default judgment set aside. He also joined DMC as the cross-defendant to his cross-claim for an indemnity pursuant to the contract between himself and DMC for the hire of the Berlina.
4. In the cross-claim, Mr Grech alleged, relevantly: "5. On or about 4 August 2011, the driver collided with another car that was stationary which resulted in damage to the car and the stationary vehicle owned by the plaintiff."
5. In its defence to the cross-claim originally filed, DMC pleaded in response: "In respect of paragraph 5 the Cross Defendant does not admit the facts and allegations contained therein."
6. In its amended defence to the cross-claim filed on 9 November 2015, DMC deleted the words "does not admit" in its response to paragraph 5 and inserted the word "denies". DMC further alleged in its amended defence to the cross-claim: "32. If, which is not admitted, the Cross Defendant is liable to the Cross Claimant for the damage to the Plaintiff's vehicle, then the Cross Defendant says the BMW vehicle was not owned by the named Plaintiff and that damage: (i) was not suffered by the named Plaintiff (Ii) has not been established by the Plaintiff (iii) to the BMW was substantially less than that claimed and is not now able to be established on the evidence."
7. As referred to above, DMC alleged that the collision had been staged by the three drivers: the plaintiff's son, Mr Grech and Mr Hafda. Mr Hafda was driving the vehicle in front of the BMW, which the plaintiff's son had braked to avoid hitting. I note that Mr Barham confirmed that there was no allegation that the plaintiff himself was involved in the staged collision.

The hearing dates

1. The proceeding in the Court below was heard over a total of 8 days (6 days of evidence and submissions and a further 2 days on costs). The evidence was adduced on 9, 10 and 11 March 2016 and 13, 14 and 15 July 2016. The hearing was adjourned and directions made for the provision of written submissions following receipt of transcript. On 15 November 2016 the parties made oral submissions, by reference to the written submissions which had already been filed and served. At the conclusion of the hearing on 15 November 2016, her Honour reserved her decision.
2. On 9 or 10 March 2017 the First Decision was emailed to the parties. It is not clear whether orders were made at that stage, although the reasons for decision recorded that the plaintiff's claim was dismissed. The only order that was entered on JusticeLink (the computerised record maintained by courts in New South Wales) in the field "Terms of Judgment/Order" was "Decision emailed to parties". The First Decision was uploaded to JusticeLink. The date the order was said to have been made or given was "9 March 2017" and the date on which it was entered was said to be "17 March 2017".
3. On 24 May 2017, her Honour heard argument on costs. I note for completeness that Mr Adelstein, who appeared on behalf of the plaintiff in the Court below, foreshadowed that he was considering making an application to add the plaintiff's son as a party to overcome the issue of ownership. DMC foreshadowed that if the plaintiff pressed such an application, DMC might seek security for costs. Neither application proceeded.
4. The argument on costs continued on 14 July 2017. At the conclusion of argument, her Honour again reserved her decision.
5. The decision was emailed to the parties on 11 August 2017 (the Second Decision). The reasons for decision record that the following orders were made on that day: "1. Dismiss the claim. 2. Dismiss the cross-claim. 3. Order that Joseph Gabriel [the plaintiff] pay Paul Grech's [the defendant's] costs on the ordinary basis as agreed or assessed. 4. Order that Joseph Gabriel [the plaintiff] to [sic] pay 50% of DMC's [the cross-defendant's] costs on the ordinary basis as agreed or assessed."
6. The JusticeLink entry for the proceedings recorded, in the field marked "Terms of Judgments/Order" was: "See attached". The Second Decision was attached to this entry. The date on which the order was said to be "made or given" was 11 August 2017. The date on which the order was said to be "entered" was "23 August 2017".

The Markus direction

1. The magistrate acceded to an application by DMC that the plaintiff not have access to some of the material produced on subpoena because of the challenge which DMC proposed to make to the credibility of the plaintiff and his son. This was referred to in the hearing and in the magistrate's reasons as "the Markus direction". This was a reference to the decision of Markus v Provincial Insurance Co Ltd (1983) 25 NSWCCR 1; BC8300012 where it was held that the discretion to restrict disclosure may be exercised to allow a party to withhold documents which, though not privileged, are capable of adversely affecting the credibility of a witness. One of the consequences of this approach was that the plaintiff's representative may not have been aware of the course taken by Mr Barham in cross-examination or the relevance of particular questions.

The plaintiff's evidence

1. The plaintiff's evidence in chief was by affidavit. He was not cross-examined by Mr Rollinson, who appeared for Mr Grech in the Local Court. He was extensively cross-examined by Mr Barham, who appeared for DMC in the Local Court and in this Court.
2. In substance, the plaintiff said that he was away in Lebanon when the BMW was purchased by his son at auction on his behalf and that the price of $50,000 had been paid in cash from the family safe to which the plaintiff's wife had access in his absence.
3. I note that no allegation was made that the plaintiff himself had been party to any fraud. This was confirmed by Mr Barham before me.
4. The topics about which the plaintiff was cross-examined included the ownership of the BMW. At one point in the course of the cross-examination where the plaintiff was being asked where his son was living, the following exchange took place: "ADELSTEIN: Your Honour, I am not sure what the relevance of this is. I have tried to give my friend reasonable latitude and not stand up and object in regards to the scope of cross-examination because it goes to things like credit and the like, I understand that but what may I respectfully ask through you, is the relevance of for any matter that is currently in dispute in regards to where Mark was living and to ask this witness of it is to my mind really not helpful and not likely to assist your Honour. HER HONOUR: You will need to get there fast because it is-- BARHAM: I am not going to get evidence I apprehend from Mark as to where he has been living, the evidence will be - I would rather deal with this in the absence of the witness, your Honour, it will take about two minutes. HER HONOUR: I think even though he is a party we can't close gates. ADELSTEIN: If your Honour is minded to give him leave because it is quicker I am happy for that. HER HONOUR: No, I will let you ask the questions but we need to bear in mind what is relevant."

The evidence of the plaintiff's son

1. The plaintiff's son was also called to give evidence. He confirmed that the BMW was his father's car but that he had bought it at auction for his father with cash provided by his mother from the family safe and that his father had permitted him to drive it. He said that he paid for some of the repairs to the BMW after the collision the subject of the proceedings and expected to be reimbursed. Although the plaintiff's son was cross-examined by Mr Rollinson, no questions were asked which were relevant to the question of ownership. This reflected the position in the pleadings that the only issues between the plaintiff and Mr Grech were: whether Mr Grech was at fault and, if so, whether the plaintiff's son had contributed to the collision thereby warranting a discount for contributory negligence.
2. The plaintiff's son was cross-examined at length by Mr Barham, including about the circumstances of the acquisition of the BMW and his use of the BMW. Mr Barham cross-examined the plaintiff's son to suggest that he was party to the staged collision and that it was his BMW and not his father's. There was a significant challenge to the plaintiff's son's credibility on several topics.

Evidence on damages

1. The plaintiff called Mr Semaan from Camperdown Smash Repairs (CSR) who inspected the BMW following the collision and prepared a quotation. The plaintiff also called Scott Quirk, a loss assessor.

Mr Grech's evidence

1. Mr Grech was briefly cross-examined by Mr Adelstein in the Local Court, about the circumstances of the accident and the relative speeds of the vehicles. Mr Grech was cross-examined at length by Mr Barham with a view to establishing that the accident was staged.

DMC's evidence

1. DMC called witnesses, including experts, to establish its proposition that the accident was staged.

Submissions made by the parties in the Court below

1. As referred to above, the parties exchanged detailed written submissions.

DMC's written submissions

1. DMC's submissions, dated 30 September 2016, were served first. DMC said, of present relevance: "For the reasons set out below, the plaintiff must fail against the defendant and therefore the defendant's cross claim must fail against the cross-defendant. Broadly speaking those reasons are that the plaintiff did not own the BMW motor vehicle and cannot sue for damage to it. Secondly, the collision, if it occurred at all, it was staged, and that the Court would be comfortably satisfied of that, so that previous damage could be slotted home to DMC of the third vehicle colliding from the rear. Thirdly, neither damage nor quantum of damage is proved in any event…" [Emphasis added.]
2. DMC made detailed submissions in support of its contention that the plaintiff did not own the BMW. It submitted, in conclusion: "As the plaintiff is [not] and was not the owner, the plaintiff is not entitled to sue. The true owner, the plaintiff's son Mark Gabriel, would otherwise have been entitled to sue, for some still indeterminate amount, (but probably limited to $15,900 being the amount claimed to have been paid by Mark Gabriel for repairs according to the plaintiff's affidavit, if they had been paid and were reasonable) if there had been a genuine collision in which he was not complicit, but he has not sued in any event. Accordingly, in the premises of the plaintiff not being entitled to sue, he must fail against the defendant. As the defendant is not liable to the plaintiff, so the defendant's cross claim for indemnity must fail as there is no liability against which to indemnify."
3. DMC said, in conclusion at [117]: "The plaintiff did not own the BMW and cannot recover for damage sustained to it…"

The plaintiff's written submissions

1. The plaintiff summarised the relevant issues in its written submissions dated 18 October 2016, which were prepared by Mr Adelstein, who had appeared in the hearing to date, as follows: "4. DMC, in its submissions, raises issues such as ownership of the BMW, damage sustained to the BMW in the accident and pre-existing, any entitlement for a hire car and fraud. These submissions will be addressed in the same order in response, in addition, Grech raises a further issue in respect of who was liable for the collision, suggesting that either Mark G was solely responsible for the accident or alternatively there was substantial, contributory negligence. 5.1 DMC assert that because Mark G attended at the Pickles auction to acquire the repairable write-off BMW at a time when Joseph G was overseas, Joseph G could not have been the owner. 5.2 That misunderstands the relationship between Mark G and Joseph G. This was a close-knit family of Lebanese heritage, whereby Mark G, a first generation Australian, undertook much of the business activities on behalf the family, having an advantage in respect of language, literacy and an understanding of the Australian business culture."
2. The plaintiff also said, at [5.10]: "Both [the plaintiff and his son] assert that the vehicle was the property of [the plaintiff]. The Court would be comfortable in accepting that proposition, particularly in circumstances where there is no substantive evidence to disprove this, so that on the balance of probabilities that is the most likely circumstance."
3. As to the quantum of damages, the plaintiff submitted at [6.3]: "The damage to the BMW in the accident, on one view, cannot be seriously challenged. Neither Grech nor DMC adduced any evidence in opposition to that of Colin or Scott Quirk. Whilst DMC put up a crash reconstruction expert, he was not competent to, and did not purport to, express a view as to the reasonableness of the cost of repairs. (a) The unchallenged evidence is that part of the repairs was paid for by Mark G -$15,900.00 paid from his work money and for which he hopes to be reimbursed at the conclusion of the case - see 2.46.45 - 2.47.15. This amount was paid to enable the car to be fixed, at least to a state to make it roadworthy, whilst the controversy was resolved as between CSR and DMC's assessor, Mr Smith. (b) The balance of the repair costs, namely $42,039.16 remain outstanding."

Mr Grech's written submissions

1. In his written submissions dated 28 October 2016 on behalf of Mr Grech, Mr Rollinson made detailed submissions in response to DMC's submissions about fraud. With respect to the plaintiff's claim, he submitted, in summary at [21]: "… He was not negligent in any manner alleged by the plaintiff (in effect, S of C par 5, failure to 'look out', to steer adequately, to brake and excessive speed). So he is not liable. If [Mr Grech] was negligent, so was [the plaintiff's son]; he braked too late and suddenly behind the Citroen in front of him, leaving Grech insufficient time to stop. A reduction in damages for contributory negligence is called for; 50% would be appropriate."
2. Mr Rollinson also addressed the indemnity and contractual defences raised by DMC. In answer to DMC's submission at [117] (extracted above), he said at [35]: "As to DMC [117], the plaintiff is Joseph Gabriel. Mark Gabriel claims nothing from Mr Grech. Joseph Gabriel's claim fails because the collision and resulting damage to the BMW was not caused by Grech's negligence. Alternatively, it was partly caused by Mark Gabriel's negligence and a reduction of damages by 50% is called for. In the event that he is to any extent liable to Joseph Gabriel, Mr Grech is entitled to indemnity by DMC for the damages and costs awarded against him in favour of Joseph Gabriel."

DMC's submissions in reply

1. In reply, Mr Barham, on behalf of DMC stated in written submissions dated 11 November 2016 (four days before the resumed hearing on 15 November 2016), at [19]: "It is curious that in light of the evidence which emerged, and in light of the XDWS [cross-defendant's written submissions], that Mr Grech, through his submissions, takes no issue with ownership of the BMW. One would think his client would be glad of the submission that the plaintiff cannot succeed against him. He then denies negligence at [DWS 35]. That part of the submission is correct. It was not negligence: it was deliberate." [Emphasis added.]
2. Mr Barham made detailed submissions on the issue of ownership which, for present purposes, warrant neither summary nor reproduction.

The hearing on 15 November 2016

1. On 15 November 2016, the parties addressed her Honour orally by reference to their written submissions.
2. Mr Adelstein submitted: "ADELSTEIN: Your Honour, if I can deal with it in these terms. My submissions actually were second in time; so, to an extent, they have responded to the cross-defendant's. There are these issues, as I see them: first and foremost, put in issue is ownership of the motor vehicle, and that's perceived by the cross-defendant as being a killer point, and correctly so. If the plaintiff is not the owner of the motor vehicle, well then, the plaintiff's case must fail. The second issue is in regard to what I'll call the state of the vehicle pre-accident. The third issue is what I see as being repairs done to the vehicle, repairs/damage. The fourth issue is the hire car." [Emphasis added.]
3. It was accepted by Mr Baron Levi that Mr Adelstein's submission highlighted in bold was incorrect and did not reflect the state of the pleadings on the plaintiff's claim against Mr Grech, in respect of which there was no issue of ownership, it having been admitted that the plaintiff owned the BMW.
4. Whatever transitory misconception may have been created by Mr Adelstein's submission, this was corrected by Mr Rollinson who said, at the outset of his oral submissions on behalf of Mr Grech: "…First on the issue is [sic] between the plaintiff and the defendant: that is, between [the plaintiff] and [Mr Grech]. On the pleadings, [Mr Grech] admits ownership by [the plaintiff] of the BMW. [DMC] does not admit it, but I would submit to your Honour, secondly, what my learned friend, Mr Adelstein, has said: that your Honour would be comfortably satisfied that [the plaintiff] owned the vehicle at the date of the accident, and that's all that matters." [Emphasis added.]
5. I understand the effect of Mr Rollinson's submission to be that, whatever the issue of ownership between DMC and Mr Grech on the cross-claim, there was no issue as to ownership on the plaintiff's claim as it had been admitted. I regard this as sufficient to correct the submission made by Mr Adelstein which omitted that important detail.
6. In oral submissions, Mr Barham said: "…[The plaintiff's son] is not the plaintiff. If [the plaintiff's son] wanted to sue for damage to his car, then he was the proper plaintiff so his father can't sue on his behalf. [The plaintiff's son] had to bring that action, and he didn't bring that action."

The hearing on 14 July 2017

1. At the hearing on 14 July 2017, the principal issue was costs. There was argument about the amount of time that was taken on the issue of fraud (on which DMC failed) when compared with other issues. Mr Barham contended orally that the issues were interrelated: "It's not the case, the cross-defendant's claim was that it was only a staged collision, the cross-defendant said it didn't know how effectively or when the damage was sustained, and that was part of the problem, that there was prior damage. It's not the case that this case can be boxed up into nice little packets of this amount of time was spent on an allegation of a fraudulent motor vehicle accident, this amount of time or these documents were relevant to the issue of damage, these documents were relevant to the issue of ownership; the fact is that all of the issues were interrelated and I think in my earlier written submissions I referred to, and if I didn't I'll say it on my feet, the actual amount of time spent in cross-examination on the actual motor vehicle collision, it's to be recalled that Mr Hafta, a material witness and an associate at the very least - I think he was referred to as a friend of Mr Marc Gabriel - wasn't called to give evidence, so I couldn't cross-examine him. I cross-examined Marc Gabriel about it in a very short compass, and I cross-examined Mr Grech about it in a very short compass. All of the documents being interrelated went to inter alia the question of the prior damage to the vehicle, and went to the question of ownership. So when Mr Watson refers to it as a, I think it was a sad old case, it is a sad old case when a defendant is called upon, or a cross-defendant is called upon to pay damages to relation to a matter where the damages, or at least a substantial amount of the damages, appear to have been pre-existing and not disclosed."

The decision of the Court below

1. The Court below addressed the issue of ownership first. Her Honour appears to have overlooked, or disregarded, the circumstance that, as between the plaintiff and Mr Grech, there was no issue of ownership.
2. Her Honour also said: "38. As DMC is alleging that it was Mark Gabriel and not Joseph Gabriel who owned the BMW, it is in effect alleging that Joseph Gabriel has fraudulently claimed that he was the owner. 39. While DMC bears the onus of proving that Mark Gabriel was the owner to the civil standard (s.140 of the Evidence Act 1995), before the court makes findings that there has been fraud, it needs to be comfortably satisfied of it (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361 to 362 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170). 40. Despite the Gabriels' evidence to the contrary, I am not satisfied on the balance of probabilities that Mark Gabriel purchased the vehicle for Joseph Gabriel as: … 41. In relation to the question of who owned the BMW at the time of the collision, I am comfortably satisfied on the balance of probabilities that Mark Gabriel still owned it as: • Joseph Gabriel apparently had a limited understanding of spoken and written English and was dependent on Mark Gabriel for assistance with transactions requiring a reasonable understanding of English. This situation is not uncommon as there are many families in Australia where children act as interpreters for immigrant parents with a limited command of English. • However despite his poor English language skills, it appears that Joseph Gabriel had been able to run a successful business over many years that enabled him to save the tens of thousands of dollars he had in his safe. • I had real concerns about both Joseph Gabriel's and Mark Gabriel's credibility and in particular, Mark's (see the discussion in relation to whether the accident was staged), in my view, it was plausible that Joseph Gabriel and Mark Gabriel had decided that the BMW would be registered in Joseph's name even though it was actually Mark's car. … … 43. On this basis, I find on the balance of probabilities that Joseph Gabriel was not the owner of the BMW at the time of the collision and so he is not entitled to bring the proceedings to recover damages arising out of the collision." [Emphasis added.]
3. I note that DMC did not plead that the plaintiff's allegation that he was the owner of the BMW was fraudulent. Her Honour appears to have been aware that the allegation had not been pleaded, as indicated by the words "in effect" highlighted in bold above. Fraud must be specifically pleaded and particularised. There is no such thing as pleading fraud "in effect": Sgro v Australian Associated Motor Insurers Ltd (2015) 91 NSWLR 325; [2015] NSWCA 262 at [54]-[57] (Beazley P, Meagher JA and McDougall J agreeing). It was not open to her Honour to make the findings set out above. These findings amount to a denial of procedural fairness.
4. Further, her Honour's finding that "it was plausible that Joseph Gabriel and Mark Gabriel had decided that the BMW would be registered in Joseph's name even though it was actually Mark's car" could not, in any event, amount to a finding of fraud since "plausibility" falls well short of the degree of satisfaction required by Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34. In these circumstances, it is difficult to understand why her Honour made these findings at all. It is not necessary to say more about these findings since, for the reasons given above, the plaintiff has made out his primary ground of appeal.

The grounds of appeal

1. The principal appeal ground is ground [1A] of the amended summons which alleged: "1A. The magistrate erred as a matter of law in determining that the ownership of the BMW was a fact in issue between the plaintiff and the defendant and in determining that issue. Particulars (a) There was no fact in issue between the plaintiff and the defendant as to the ownership of the BMW; (b) The plaintiff alleged in the Statement of Claim that the plaintiff was the owner of the BMW and the defendant admitted the allegation in the Defence; (c) The defendant conducted his case consistently with his admission that the plaintiff was the owner of the BMW; he did not seek leave to withdraw that admission; and the admission was not withdrawn; (d) It was therefore not open to the magistrate to find that the plaintiff was not the owner of the BMW in the case between the plaintiff and the defendant. The magistrate was bound to determine the issues and to grant relief based upon the pleadings;"
2. A question as to the construction and operation of a pleading involves a question of law: Moon v Mun [2013] NSWCA 217 at [10] (Basten JA). As I am satisfied, for the reasons given below, that this ground has been made out, it is not necessary to determine the other appeal grounds. Nor is it necessary to address the question whether leave to appeal against costs ought be granted since the magistrate's order dismissing the plaintiff's claim, on which the costs orders depended, must be set aside. However, it is also necessary to address the notice of contention.

Third party claims

1. At the outset it is important to identify the principles which apply where a plaintiff sues a defendant who then cross-claims against a cross-defendant, otherwise known as a third party.
2. The nature of a claim such as that brought by Mr Grech against DMC was considered in Hordern-Richmond Ltd v Duncan [1947] 1 KB 545 (cited with approval in Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd (2010) 31 VR 46 at 52; [2010] VSCA 355 at 52). At 552, Cassels J said: "The cause of action which entitles a defendant to bring a third party before the court is the liability of the third party to make contribution or to pay an indemnity. That cause of action has not arisen until the liability of the defendant has been ascertained. Under s. 39 of the Act of 1925 and the Orders and Rules of the Supreme Court governing third-party proceedings, notice of them is given to a third party before liability is established. It is one of the peculiarities of that procedure which enables this to take place before there is any liability. But the plaintiff can never get a judgment against the third party; it is only the defendant who gets a judgment against the third party. Neither, in such proceedings, could the defendant succeed and yet leave the plaintiff with judgment against the third party. It is only on the defendant being made liable that the defendant has any cause of action against the third party. Whatever for convenience of procedure may be the order for directions for the trial, however the witnesses may be called and heard, or whether the proceedings by the plaintiff against the defendant are tried at the same time as the proceedings by the defendant against the third party matters not. The position is quite clear. The proceedings by the defendant against the third party are independent of and separate from the proceedings by the plaintiff against the defendant, except that, when the defendant is made liable to the plaintiff, he then has his right open against the third party to establish, if he can, that he possesses a right to indemnity and contribution from that third party." [Emphasis added.]
3. This passage has been consistently followed and was cited by the High Court with approval in Bitumen and Oil Refineries (Australia) Ltd v Commissioner for Government Transport (1955) 92 CLR 200 at 210-211 (Dixon CJ, McTiernan, Webb, Fullagar and Taylor JJ); [1955] HCA 1 and in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 595-596 (Gibbs CJ, Mason and Aickin JJ); [1981] HCA 45.
4. The third party procedure is governed by s 22 of the Civil Procedure Act 2005 (NSW), which relevantly provides: "22 Defendant's right to cross-claim (1) Subject to subsection (2), the court may grant to the defendant in any proceedings (the first proceedings) such relief against any person (whether or not a plaintiff in the proceedings) as the court might grant against that person in separate proceedings commenced by the defendant for that purpose. (2) Relief may not be granted under this section against a person who is not a plaintiff in the first proceedings unless the relief relates to, or is connected with, the subject of the first proceedings. (3) A person against whom a defendant makes a claim for relief under this section: (a) has the same rights in respect of his or her defence against the claim as he or she would have in separate proceedings commenced against the person by the defendant, and (b) if not already a party to the first proceedings: (i) becomes a party to the first proceedings, and (ii) unless the court otherwise orders, is bound by any judgment (including a judgment by consent or by default) or decision (including a decision by consent) on any claim for relief in the proceedings (including a claim for relief in any cross-claim in the proceedings)."
5. The effect of s 22(3) is that a cross-defendant is a party to the proceedings and will be bound by the determination of issues between the plaintiff and the defendant, subject to any contrary order: s 22(3)(b)(ii).

The effect of admissions on pleadings in final hearings

Admissions generally

1. The effect of formal admissions on the pleadings and the distinction between formal and informal admissions were summarised by Mr Heydon in Cross on Evidence (1991, Butterworths) at [3165]: "In civil cases a party may in the pleadings…admit facts for the purposes of the trial… An admission made in the pleadings…cannot, until formally retracted by leave, be contradicted by the party who makes it, and evidence relevant only to such admitted fact will be rejected as not relevant to an issue in the proceedings… Unlike a formal admission, an informal admission…is an item of evidence…"
2. The principles that apply to pleadings (and, where relevant, particulars) were set out in Dare v Pulham (1982) 148 CLR 658 at 664 (Murphy, Wilson, Brennan, Deane and Dawson JJ); [1982] HCA 70: "Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it …; they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial …; and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings … But where there is no departure during the trial from the pleaded cause of action, a disconformity between the evidence and particulars earlier furnished will not disentitle a party to a verdict based upon the evidence …" [Citations omitted and emphasis added.]
3. In Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 (Banque Commerciale), the High Court set out the orthodox position regarding pleadings before addressing the circumstances where a court may decide a case on a basis different from that pleaded. The importance of pleadings to procedural fairness was also emphasised. Mason CJ and Gaudron J said, at 286-287: "The function of pleadings is to state with sufficient clarity the case that must be met… In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities… Ordinarily, the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted." [Emphasis added and citations omitted.]
4. In Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12, the High Court overturned a judgment in favour of the employer (the Water Board) on the basis that the negligence which was held by the Court of Appeal to found its liability had not been put at trial and that therefore the employer had been deprived of the opportunity of meeting that case. The High Court ordered a new trial.
5. The orthodox position has been consistently applied in the authorities: see for example Asia Television Ltd v Yau's Entertainment Pty Ltd (No 2) [2000] FCA 838; (2000) 49 IPR 264 (Asia Television) (Gyles J) at [17]-[19]; Younan v Nationwide News Pty Ltd [2013] NSWCA 335 at [22]; followed in Fairfax Media Publications Pty Ltd v Gayle [2019] NSWCA 172 (Leeming JA, Bell P and Gleeson JA agreeing).
6. These principles apply, in the main, to final hearings of proceedings.

Particular exceptions

1. The authorities recognise exceptions to the general principle that courts are bound by formal admissions. As Mr Barham has relied on the authorities referred to below in support of his submission that the Court was not bound by Mr Grech's formal admission of ownership, it is necessary to address them in some detail.

Proof of foreign law

1. Foreign law is treated by courts as a question of fact to be proved by evidence. However, the authorities show that a court is not bound by an agreement between the parties or an admission on the pleadings as to the content of the foreign law, although in the absence of evidence, the court is generally entitled to assume that the foreign law is the same as the lex fori.
2. In Damberg v Damberg (2001) 52 NSWLR 492; [2001] NSWCA 87 (Damberg) an issue arose concerning the entitlement of German tax authorities to levy tax on certain matrimonial property. The proceedings were commenced and determined at first instance in the Family Court but the appeal was determined by the New South Wales Court of Appeal. There was a "consensus" or agreement between the parties, who were all members of the Damberg family, as to the effect of the German law. The Court of Appeal was required to consider whether that consensus bound the court.
3. In Damberg, Heydon JA (Spigelman CJ and Sheller JA agreeing), confirmed the general principles concerning pleadings at [154] as follows: "A party may admit allegations made in pleadings by the opposing party, and may do so either expressly or by non-traverse. The effect of such admissions is to narrow the issues in dispute: they can thus have the effect of restricting the evidence to be tendered and can prevent evidence being called to the contrary."
4. His Honour said further, at [160]: "… [T]he courts are averse to pronouncing judgments on hypotheses which are not correct. To do so is tantamount to giving advisory opinions and to encouraging collusive litigation. On the other hand, the courts will act on admissions of or agreements about matters of fact where there is no reason to doubt their correctness. But they are reluctant to do so where there is reason to question the correctness of the facts admitted or agreed. A similar caution appears to apply in relation to an assumption or agreement that foreign law is the same as the lex fori."
5. There was an important public interest element to the dispute in Damberg because the issue was not merely German law per se but the entitlement of German authorities to levy tax, an issue which went beyond the interests of the parties to the proceedings. There was a risk that the parties would agree on a position which was at odds with the true position. Although the passage cited above is expressed in general terms, it must be read in this context. I do not understand it to be in any way contrary to the general principle that parties and the courts are bound by admissions in the pleadings. Indeed, Heydon JA articulated the general principle in Damberg at [154]:

Some issues of enforcement of intellectual property which concern the interests of the public

1. There would also appear to be an exception to the general rule in the context of intellectual property disputes, at least in cases, where the starting point is whether the plaintiff has a design (or similar) which would attract such protection under statute. Such cases raise the public interest since an action for infringement may be brought in respect of a validly registered design. Issues also arise in this class of cases which are similar to those which arise in applications for declaratory relief, where the court's power to grant relief is discretionary, which are considered below.
2. In Gramophone Co Ltd v Magazine Holder Co [1911] UKHL 1081; (1911) 28 RPC 221 (Gramophone), the issue was whether the defendants had infringed the plaintiff's registered design for a gramophone cabinet. The defendants admitted on the pleadings that the plaintiff's design was novel and original so as to be entitled to the protection afforded by registration. Lord Loreburn LC refused to be bound by that admission on the pleadings. His Lordship's reasoning, although expressed in general terms, indicated that the real vice of the court's being bound by the defendants' admission in that case was that the court's judgment might be used against third parties because the registrability of a design was a matter that concerned the public.
3. His Lordship said, at 225: "… [I]f a Court is not precluded from applying a little common sense, the first question which occurs to me is this - How can it be said that the shape or configuration of this cabinet is new and original so as to come within the Act? To this the plaintiffs' counsel answers, firmly but politely, that it is really no concern of ours, because the defendants (who, by the way, have also registered their cabinet) admit the novelty and originality; so that as between the parties the matter is concluded, though no one else is bound, except apparently the Court which has the duty of adjudicating. I am afraid that I cannot accept the position prescribed for me. It is the duty of a Court to decide cases according to the truth and fact, not according to any assumed or artificial state of facts which the parties may find it convenient to present. No doubt courts of law allow, and indeed encourage, parties to simplify litigation by making admissions, and to a certain extent by waiving their rights, because when there is a real controversy, depending upon real facts, everyone ought to facilitate its authoritative settlement. But that is a very different thing from allowing people to obtain an adjudication upon the footing that something exists or has happened which in truth does not exist and has never happened; and the objection to such a course is most striking when the parties agree to admit as true something which lies at the root of the jurisdiction, and any judgment which is obtained upon the footing of its truth may be used as a weapon in terrorem against persons not parties to the admission. A court of justice can never be bound to accept as true any fact merely because it is admitted between the parties." [Emphasis added.]
4. Gramophone was considered by the High Court in Macrae Knitting Mills Ltd v Lowes Ltd (1936) 55 CLR 725; [1936] HCA 43 (Macrae). The High Court decided that the validity of a design may be put in issue not only in proceedings to rectify the register but also in an action for infringement. Because only a "new or original" design was entitled to be registered, mere registration, without adjudication, would not thereby make the design "new or original". Dixon J said at 728-729: "… The description of the thing obtaining protection requires that it should be a design within the definition. It is called a "design" and, therefore, unless it falls within that description it does not fulfil a necessary condition on which, according to the very form of the enactment, protection depends. … The English authorities in which effect has been given to a defence of invalidity appear to be numerous. The most remarkable and perhaps the most decisive is that of Gramophone Co Ltd v Magazine Holder Co. That was an appeal from a judgment given in an action for infringement of a registered design. At the trial the validity of the design had been admitted by counsel for the defendant. The House of Lords, consisting of Lord Loreburn LC, Lord Halsbury, Lord Atkinson and Lord Shaw, refused to be bound by the admission. They said that in the interests of the public they must insist upon declaring that the design was one which was not new or original and could not be registered. For that reason the House decided that the action failed…" [Emphasis added and footnotes omitted.]
5. The passage extracted from Gramophone above was also cited in Damberg, in the context of proof of foreign law. It would appear that the courts in Gramophone and Macrae were concerned about the prospect, adverted to in the passage from Damberg set out above, that the admissions by the defendants in those cases (that the plaintiff's designs were novel and therefore registrable) were "collusive".

The effect of admissions in applications for discretionary relief

1. Where the court's power to grant relief is discretionary, such as where declaratory relief is sought, or where there is an application for judgment on admissions pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 17.7, the effect of admissions is more limited and is not determinative.
2. As declaratory relief is discretionary it follows that declarations are not to be made by consent or on the admissions of the parties since the court must satisfy itself that such relief is appropriate: Termijtelen v Van Arkel [1974] 1 NSWLR 525 (Termijtelen) at 527 (Hardie JA), 529 (Hope JA) and 534-535 (Bowen CJ in Eq).
3. Similarly, the admissions of the parties are not determinative in applications for judgment on admissions because the court is not, in such an application, bound to act on the admissions: Termijtelen at 528-529 (Hope JA). The court has a discretion whether to grant such relief, as indicated by the word "may" in UCPR, r 17.7. In Moon v Mun, Barrett JA (Basten and Ward JJA agreeing) expressed the relevant test as follows at [43]: "The power to award judgment on admissions on the pleadings is properly exercisable only where the court can see that a clear and unanswerable case is advanced on the pleadings, with the position so decisively depicted and the correct outcome so unambiguously obvious that there is simply no need for any issue to go to trial. The evaluative question relevant to exercise of the discretion is whether it is just to award judgment without regard to the merits of the parties' contentions."

The distinction between parties to an issue and parties to the proceedings

1. There is a distinction between parties to an issue and parties to the proceedings. The effect of the distinction was explained, in the context of issue estoppel, by Fisher J (Ryan J agreeing) in Taylor v Ansett Transport Industries Ltd (1987) 18 FCR 342 at 358; [1987] FCA 127 (cited with approval in CGU Insurance Ltd v Blakeley (2016) 259 CLR 339; [2016] HCA 2 at [112] (Nettle J)): "[I]ssue estoppel can only be raised by or applied against parties who were in 'controversy' at the time when the issue was first determined, either in their favour or adversely to them. If a party was not involved in the litigation of that issue, either because it was not an issue between him and another party to the proceedings, or because he was not a party at all to the proceedings at the time of resolution, then he is not affected by nor can he raise an estoppel. Likewise his presence initially or subsequently cannot affect the right of other parties to raise or rely upon issue estoppel as between themselves. If the contrary was the case, the public interest in not having the same matters relitigated could with ease be bypassed." [Emphasis added.]
2. Questions arose about the role of a cross-defendant in Barclays Bank v Tom [1923] 1 KB 221. The Court of Appeal dismissed an appeal and upheld the primary judge's decision that a cross-defendant was entitled to cross claim against the defendant/cross-claimant. Scrutton LJ (Eve J agreeing) said at 223-225: "…Now I think it is important to keep clearly in mind what the third party procedure is. A plaintiff has a claim against a defendant. The defendant thinks if he is liable he has a claim over against a third party. With that matter between the defendant and the third party the plaintiff has obviously nothing to do. He is not concerned with the question whether the defendant has a remedy against somebody else. His remedy is against the defendant. But the defendant is much interested in getting the third party bound by the result of the trial between the plaintiff and himself, for otherwise he might be at a great disadvantage if, having fought the case against the plaintiff and lost, he had then to fight the case against the third party possibly on different materials, with the risk that a different result might be arrived at. The object of the third party procedure is then in the first place to get the third party bound by the decision between the plaintiff and the defendant. … the third party order usually provides that the third party may appear at the trial between the plaintiff and the defendant. When the third party has so appeared as party to the proceedings, various questions arise as to what he can do. Can he counterclaim against the plaintiff? The answer is no, for such a counterclaim would have nothing to do with the issue in the action to which he is admitted as a party…Can he interrogate the plaintiff? The answer is yes, if the object of the interrogatories is to show that the plaintiff's claim against the defendant cannot be supported…I remember in one case in which I was counsel the third party was on the same principle allowed to raise a defence on behalf of the defendant which the defendant would not raise on his own behalf. …How may the third party defend himself? Of course he may deny that he is under any such liability at all. But he may admit his liability and say that he has a cross-claim against the defendant which prevents any effective judgment being given against him…" [Emphasis added.]
3. The highlighted passage would seem to suggest that a cross-defendant is entitled to raise a defence to the plaintiff's claim which the defendant has not raised. The statement is in tentative terms and no detail is given as to the nature of the defence. I do not regard this passage as gainsaying the principle expressed in Taylor v Ansett Transport Industries Ltd set out above.
4. Barclays Bank v Tom was referred to in passing by Hutley JA in Parramatta City Council v Sandell [1973] 1 NSWLR 151 at 174. That case relevantly concerned a proclamation which had transferred land, which included Mrs Sandell's land, from the Municipality of Blacktown to the City of Parramatta. Mrs Sandell sought a declaration that the Parramatta City Council was bound to acquire the land by reason of cl 18 of the Blacktown Planning Scheme Ordinance and the proclamation. The Parramatta City Council, the defendant in the proceedings, filed a cross-claim against the Blacktown Municipal Council seeking a declaration that the Blacktown Municipal Council continued to be bound to acquire and pay for the land. Blacktown Municipal Council argued that relevant parts of the proclamation were invalid. The primary judge made the declaration sought by Mrs Sandell and dismissed the cross-claim. Parramatta City Council appealed. It was held that it was bound by the proclamation since it had not called its validity into question in the hearing. On appeal, Hutley JA said that the cross-claim had been rightly dismissed as there was no jurisdiction to entertain it. His Honour said further at 174: "…Even if I am wrong on this point, it by no means follows that the cross-defendant is entitled to raise a defence against Mrs. Sandell which Parramatta declined to do. It is true that a third party can raise a defence which the defendant declines to raise (see Barclays Bank v. Tom [at 224]) but this is only where by so raising the defence it advantages itself. This is appropriate where the remedy sought against the third party is contribution or indemnity. Where, as here, there can be no question of transferable liability, the cross-defendant should not be permitted to intrude upon the conduct of the proceedings as between plaintiff and defendant." [Footnotes omitted.]
5. I do not consider that this passage, which was obiter, necessarily refers to the highlighted remark by Scrutton LJ. The point did not arise in Parramatta City Council v Sandell, except in a tangential, comparative way. I do not regard this passage as either intended, or sufficient, to challenge the general principles about admissions on pleadings referred to above.
6. Mr Barham also referred me to Insurance Exchange of Australasia v Dooley (2000) 50 NSWLR 222; [2000] NSWCA 159 (Dooley) which turned, in part, on the construction of District Court Rules 1973 (NSW) (DCR), Pt 21, r 4 (since repealed) which relevantly provided: "4 (1) A third party shall, as from the time of service upon him of a third party notice, be a party to the action in which the notice was filed and, subject to the rules, he shall have the same rights, and be subject to the same liabilities, in respect of the action as he would have had and been subject to if he had been sued in a separate action by the defendant. (2) Without limiting the generality of subrule (1), the third party shall plead in his notice of grounds of defence any grounds on which he disputes the plaintiff's claim against the defendant or the defendant's claim against the third party. …" [Emphasis added.]
7. The rule was subsequently replaced by the following rule (which became effective after 1 January 1997): "4 The Court may, at any stage of an action, on terms: (a) order that any cross-claim or any question or issue in or arising on any cross-claim shall be separately tried; (b) give a defendant to the cross-claim leave to defend the claim on the statement of claim … either alone or in addition to any other party; …"
8. In Dooley Handley JA (Giles JA agreeing) said that the pre-1 January 1997 version of DCR, Pt 21, r 4, expressly authorised a cross-defendant to directly contest the plaintiff's claim. His Honour continued (in a passage on which Mr Barham relied) at [14]: "…This provision reverses that part of the decision in Barton [Barton v North Western Railway Co (1888) 38 Ch D 144] (at 151) where Cotton LJ held that persons served as third parties were not at liberty to deliver defences as if they were defendants. It has long been settled that a third party may raise a defence on behalf of a defendant which the defendant himself has not raised: Barclays Bank v Tom (at 224)."
9. It was common ground that there was no equivalent rule in the UCPR (which largely replaced the DCR in 2005) or otherwise which was comparable to either of the rules set out above. In other words, there is no present rule which permits a cross-defendant to plead directly in answer to the plaintiff's claim or which permits a cross-defendant to seek leave to defend the statement of claim. In these circumstances, I am not persuaded that this Court ought resurrect such repealed rules under the guise of the common law. The reference to Barclays Bank v Tom is plainly obiter. It is important when considering decisions such as Dooley to read them in the context of the relevant court rules since, as the extracts from DCR set out above demonstrate, the rules may confer certain rights on cross-defendants that they would not otherwise have.

The application of principles to the present case

1. Before turning to the application of principles I propose to address the forensic positions of the parties in the determination of the claim and the cross-claim in the present case. All parties were interested in the determination of the plaintiff's claim. DMC had a direct interest in the outcome of the plaintiff's claim against Mr Grech because Mr Grech's right of indemnity against it depended on the plaintiff establishing that Mr Grech was liable to him.
2. The plaintiff had no direct interest in the outcome of the cross-claim but may have had an indirect interest in such outcome if there was any concern about the solvency of Mr Grech to meet any judgment in favour of the plaintiff on the plaintiff's claim. There was evidence at the hearing that Mr Grech had been on a disability support pension for at least ten years. The plaintiff would therefore appear to have had an indirect interest in the success of Mr Grech's cross-claim against DMC.
3. DMC, although party to the proceedings, since it was a cross-defendant, was not a defendant to the plaintiff's claim. The issues on the plaintiff's claim were determined by the pleading of the statement of claim and the defence and thus circumscribed by allegations and admissions, denials or non-admissions as between the plaintiff on the one hand and Mr Grech on the other. To succeed against Mr Grech, the plaintiff did not have to prove ownership of the BMW since that allegation had been admitted on the pleadings and was, to the plaintiff's knowledge, the subject of an agreement as to facts which his counsel and the defendant's counsel had signed. The effect of the plaintiff alleging, and Mr Grech admitting, that the plaintiff owned the BMW, was to remove the plaintiff's ownership of the BMW as an issue to be determined in the plaintiff's claim against Mr Grech.
4. The effect of s 22 of the Civil Procedure Act is that, if Mr Grech was found liable to the plaintiff, DMC could not challenge that finding of liability for the purposes of its defence to the cross-claim.
5. Having regard to the course of the litigation summarised above, I am not persuaded that the present is a case (such as was referred to in Dare v Pulham, Water Board v Moustakas and Banque Commerciale) where it can fairly be said that the parties deliberately chose to disregard the pleadings. Mr Rollinson was clear in final submissions that Mr Grech admitted the plaintiff's ownership of the BMW on the pleadings and that it was not an issue between them. This was sufficient to correct the plaintiff's legal representative's earlier misstatement. Mr Barham's written submissions in reply (including his use of the word "curious") highlighted that he was aware of the defendant's admission on the pleading and understood its significance.
6. Although DMC was a party to the proceedings, it was not a party to the issue of ownership between the plaintiff and Mr Grech, which was, by Mr Grech's admission, no longer an issue between them.
7. Thus, had the plaintiff succeeded in the action, he could rely subsequently (as an issue estoppel) on Mr Grech's admission that he owned the BMW since an admission of an allegation in a pleading is enough to create an issue estoppel in favour of the plaintiff: Boileau v Rutlin (1848) 2 Exch 665, 681. However, there would be no such issue estoppel against DMC because, although a party to the action, it was not a party to the issue. DMC was entitled to challenge the plaintiff's claim of ownership in so far as it was relevant to its defence of the cross-claim. DMC had an interest in establishing, as part of its defence to the cross-claim, that the plaintiff's son owned the BMW because if he owned the car, it would have given him a motive (on DMC's case) to stage a collision. It would also, potentially, have assisted DMC to establish that the plaintiff's son was not a credible witness (since the plaintiff's son gave evidence that it was his father (the plaintiff) who owned the BMW). It is difficult to see how otherwise it could have assisted DMC since DMC had not pleaded that it was a breach of the contract of indemnity for Mr Grech to admit that the plaintiff owned the BMW.
8. Mr Barham relied heavily on the aside emphasised in bold in the judgment of Scrutton LJ in Barclays Bank v Tom set out above. He contended that the issue of the plaintiff's ownership could not be foreclosed on the pleadings between the plaintiff and Mr Grech and that DMC was entitled to agitate it. While DMC was entitled to agitate it for its forensic advantage on the cross-claim (it being potentially relevant to the issue whether the collision was staged and to the credibility of the plaintiff's son), its conduct did not affect the circumstance that the issue of ownership had been removed on the plaintiff's claim by Mr Grech's admission.
9. At least theoretically, DMC had various options. Had it granted indemnity to Mr Grech, it would have been entitled to control the defence of the proceedings in his stead pursuant to its right of subrogation. It could also have endeavoured to persuade Mr Grech to put it in issue in his defence to the plaintiff's claim. DMC could have alleged (if there was a sufficient basis) that Mr Grech's admission that the plaintiff owned the BMW was a breach of the contract of indemnity. DMC did none of these things. As referred to above, DMC did not allege in its pleading that the plaintiff's allegation that he was the owner of the BMW was fraudulent. Paragraph [32] of the defence to the cross-claim (set out above) is manifestly inadequate to amount to such a pleading since, apart from other deficiencies, it does not allege fraud.
10. It is of significance to note that, if Mr Grech had put ownership in issue, the plaintiff could have joined his son as a plaintiff. That joinder would have entirely removed the issue of ownership from the proceedings since there was no suggestion that anyone other than the plaintiff or his son owned the BMW. There could have been no possible objection to the joinder. The plaintiff and his son can be taken to have been prepared to be represented by the same solicitors (as they were in the proceedings in this Court). Further, UCPR, r 6.23 expressly provides that proceedings are not defeated merely because of the misjoinder or non-joinder of any person as a party to the proceedings.
11. I accept Mr Baron Levi's submission that the allegation of ownership was not required as part of the cause of action in tort. Rather, the allegation of ownership was made by the plaintiff in the present case to assert that he had standing to sue. It was not necessary for the plaintiff to allege a particular proprietary interest in the BMW or that he was the sole person with any right to own or use it: Iran v Barakat Galleries [2008] 1 All ER 1177; [2007] EWCA 1374 at [15]-[16] (Lord Phillips CJ).
12. While Mr Barham cross-examined the plaintiff and his son extensively on the issue of ownership, these questions were relied upon for the purposes of credibility, to establish that the accident was staged and also on the issue of the pre-accident condition of the BMW. In these circumstances, it cannot be said that either the plaintiff or Mr Grech acquiesced in any case beyond the pleadings since it was by no means clear that that was Mr Barham's intent. Mr Barham confirmed the several ways in which such questions were relevant in his oral submissions on costs reproduced above.
13. Mr Barham resorted to various authorities to the effect that evidentiary admissions do not bind the court. It is not necessary to address these authorities since they do not apply to formal admissions on the pleadings, such as occurred in the present case. Whereas admissions on the pleadings bind the court (except in the particular categories of case referred to above), evidentiary admissions merely constitute items of evidence to be taken into account with all other evidence.
14. The principal case relied on by Mr Barham for the proposition that the court was not bound by formal admissions on the pleadings was Gramophone, which has been addressed above. There is, in my view, no analogy between the allegation of ownership by the plaintiff in the present case and the allegation relating to the novelty and originality of the plaintiff's design in Gramophone. There is no public element to the allegation of ownership of the BMW. The only other person who has the remotest interest in that allegation is the plaintiff's son because he arranged to buy the BMW. There is no basis for the suggestion that the allegation was made for "collusive" purposes. First, as referred to above, no such allegation was pleaded against the plaintiff; and secondly, there was no forensic need for collusion in any event, since the plaintiff's son could readily have been joined as a plaintiff, either at the outset of the proceedings, or had Mr Grech put the plaintiff's ownership in issue. In these circumstances, the general principles relating to admissions on pleadings apply.
15. I reject Mr Barham's submission that there is any inconsistency between cases such as Asia Television and cases such as Damberg. For the reasons given above, the principles that parties and the court are bound by admissions on the pleadings apply generally except in cases where there are particular features, such as a public interest element, which makes them inapplicable.
16. For these reasons, the plaintiff, Mr Grech and the court were bound, in respect of the plaintiff's claim, by the admission made by Mr Grech that the plaintiff owned the BMW. It was, in these circumstances, not, as a matter of law, open to her Honour to find that the plaintiff's claim failed because the plaintiff had not established that he owned the car for the purposes of his claim against Mr Grech. Her Honour's finding involved a denial of procedural fairness to the plaintiff who was not on notice that ownership was in issue in his claim against Mr Grech.
17. The error can, and should, be corrected by this Court. In light of her Honour's findings that the accident was wholly caused by Mr Grech's negligence and that the damages amounted to $15,900, the plaintiff is, subject to the notice of contention, entitled to have the order dismissing his claim set aside and substituted with an order for judgment in his favour.

Claim for alternative relief

1. In these circumstances, it is not necessary to determine the plaintiff's claim for alternative relief. I note for completeness that, although the plaintiff's claim for substitution of his son was expressed to be the primary relief claimed by him in these proceedings, it was plain, as a matter of logic and having regard to the plaintiff's submissions, that it was pressed only as an alternative. This was confirmed by Mr Baron Levi at the hearing.

Application for extension of time, if such extension required

1. UCPR, r 50.3 provides that a summons commencing an appeal must be filed within 28 days of the material date. The material date is defined in UCPR, r 50.2 as, relevantly, the date on which the decision of the court is "pronounced or given". As there is no right of appeal from reasons for decision, but only from orders, the material date must be the date on which the orders the subject of the appeal were made.
2. Thus, whether an extension of time is required depends on when the order dismissing the plaintiff's claim was made. There are three possible dates: 9 or 10 March 2017, being the date of the First Decision or the date on which it was emailed to the parties; or 11 August 2017, the date on which her Honour emailed the second set of reasons to the parties, which addressed the question of costs (the Second Decision).
3. As her Honour's judgments were reserved, the starting point is UCPR, r 36.3, which makes provision for the judge, another judge or registrar, reading the judgment in open court when it is delivered. In such cases, the judgment or decision is taken to have been given on the day when this occurs. This provision does not apply here since the magistrate did not deliver the judgment, or have any other judicial officer or registrar give it in court. However, it is relevant to set out how a reserved judgment may be given.
4. UCPR, r 36.3 provides: "36.3 Reserved decision (1) If in any proceedings a judicial officer reserves his or her judgment or decision on any question, he or she - (a) may give the judgment or decision, either in open court or in the absence of the public - (i) at the venue for those proceedings, or (ii) at any other place at which he or she is authorised to hear or dispose of those proceedings, or (b) may reduce the judgment or decision to writing, sign it and forward it to the registrar at the venue for the proceedings. (2) If a registrar receives a judgment or decision forwarded under subrule (1)(b) - (a) the registrar must appoint a time for the judgment or decision to be read, and (b) the registrar must give at least 24 hours' notice to the parties, in writing or otherwise, of the appointed time, and (c) at the appointed time, the judgment or decision must be read by another judicial officer of the court, or by the registrar, whether or not the court is sitting at that time. (3) A judgment or decision given under subrule (1)(a) or read under subrule (2)(c) takes effect on the day on which it is so given or read and is as valid as if given by the judicial officer at the hearing of the proceedings to which the judgment or decision relates. (4) Rule 36.2 applies to a judgment or decision referred to in this rule in the same way as it applies to a judgment or decision referred to in that rule."
5. UCPR, r 36.4 provides: "36.4 Date of effect of judgments and orders (1) A judgment or order takes effect - (a) as of the date on which it is given or made, or (b) if the court orders that it not take effect until it is entered, as of the date on which it is entered. …"
6. UCPR, r 36.11 provides: "36.11 Entry of judgments and orders (1) Any judgment or order of the court is to be entered. (2) Unless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court's computerised court record system. (2A) If the court directs that a judgment or order be entered forthwith, the judgment or order is taken to be entered - (a) when a document embodying the judgment or order is signed and sealed by a registrar, or (b) when the judgment or order is recorded as referred to in subrule (2), whichever first occurs. …"
7. The Court of Appeal in Tarrant v Statewide Secured Investments Ltd [2011] NSWCA 248 (Tarrant) considered the situation where the parties understood that an order for possession had been made but it had not been entered. The successful party sought to enforce it, although the form or words entered did not correspond with the parties' understanding of the content of the order. Basten JA (McColl JA agreeing) said at [11]: "The entry of a judgment or order of the Court is of crucial importance, because the judgment or order 'may not be enforced until it has been entered in accordance with the uniform rules': Civil Procedure Act 2005 (NSW), s 133(1)."
8. His Honour continued at [12]-[13]: "The difficulty which arose in the present case (which is not unique) derives from the fact that there is no notation of the Court 'ordering otherwise' for the purposes of r 36.11(2), nor directing that judgment be entered forthwith, for the purposes of sub-r (2A). As will be noted below, the present proceedings involve an application for leave to appeal from a judgment refusing to set aside the 'judgment entered on 17 June 2009'. The parties having acted on the basis that such judgment was entered and the judgment having been enforced at least to the extent of the issue of a writ of possession and the sale of the property, it is appropriate that this Court rectify the informality attending the orders of 17 June 2009. That may be done by this Court now ordering that the orders be taken to have been entered on 17 June 2009 and, pursuant to r 36.4(3), ordering that the direction be taken to have effect as at that date."
9. The requirement that orders be entered was also considered in Mills v Futhem Pty Ltd (2011) 81 NSWLR 538; [2011] NSWCA 252. In that case the Court of Appeal (Allsop P, Beazley JA and Handley AJA agreeing) held, at [33]-[34] that there was no "recording" of orders for the purposes of UCPR, r 36.11 if all that was stated in the relevant JusticeLink entry was that some orders exist.
10. In the present case, the difficulty is that the orders purportedly made by the magistrate were neither pronounced in court nor entered in terms on JusticeLink. For this reason, there is a difficulty in working out when they were "made". Ritchie's Uniform Civil Procedure NSW states at [36.4.5]: "Judgments and orders that have been pronounced in court generally take effect on the date that they are made. If judgment is given otherwise than in court (for example, where default judgment is entered), it takes effect on the formal entry of judgment."
11. There is a further complication in that her Honour purported to order that the plaintiff's claim be dismissed on both 10 March 2017 and 11 August 2017. This of itself provides some indication that her Honour did not intend to make the order for dismissal on 10 March 2017.
12. On no view could the "order" "decision emailed to the parties" constitute the entry of an order dismissing the plaintiff's claim. On only the most charitable view could a reference in the "terms of judgment/order" field to the decision being attached amount to entry of the orders contained on the cover sheet and at the conclusion of the reasons for decision. I note that it is highly questionable whether such an approach fulfils the requirements identified in Mills v Futhem for the orders to be recorded. However, no extension of time is required if the material date is 23 August 2017. In any event, it appeared ultimately to be common ground that the material date was not later than 23 August 2017.
13. For these reasons I am not persuaded that the order dismissing the plaintiff's claim was made at any time earlier than 23 August 2017, being the date on which the document which contained the reasons and a record of the orders was "entered" in a broad sense by the attachment of the document as set out above.
14. This case illustrates the importance of orders being entered correctly into JusticeLink. While all orders must be entered in order to be enforced, an order is not "made" until it is pronounced in court or entered on JusticeLink. Accordingly, while it is open to judicial officers to email reasons for decision, which set out the orders, to the parties, this is no substitute for the entry of orders on JusticeLink. It is not necessary for present purposes to determine whether attachment of the decision to the part entitled "Judgment/Order" is sufficient to achieve that purpose. However, that practice is, at the very least, undesirable.
15. For these reasons, the plaintiff does not need an extension of time since the material date was 23 August 2017 and the summons was filed on 8 September 2017, well within the time limit of 28 days specified in UCPR, r 50.3.
16. In any event, I consider the present case to be an overwhelming case for an extension of time to be given. Having regard to the ambiguity about when orders were made, the plaintiff was entitled to wait until the matter came back before her Honour after the reasons for decision had been emailed since, as far as he was concerned, the matter was still part heard and (as was the case) no substantive orders had been pronounced. Moreover, as is apparent from the reasons I have given above, the matter raises a serious question about the effect of admissions on the pleadings, albeit one which depends on fundamental and well-established principle. I reject Mr Barham's submission that the Court ought not be disposed to grant an extension of time because there was no affidavit from the plaintiff's solicitor explaining the delay. I regard the period from 9 May 2017 to 11 August 2017 as being sufficiently explained by the course of the proceedings and the terms of the First and Second Decisions.

The notice of contention

1. The notice of contention set out the following grounds: "1 The Plaintiff did not claim to have paid the claimed repair costs of $15,900. There was no finding that he did. The Third Defendant (in these proceedings) claimed that he paid the claimed repair costs. There was no finding that he did. 2 There was no evidence of any agreement for the Plaintiff to reimburse the Third Defendant for any repair costs. To the extent that the Third Defendant did not pay the claimed repair costs, the Plaintiff suffered no loss. To the extent that the Third Defendant did pay those costs, the Plaintiff suffered no loss. 3 No application was made to add the Third Defendant as a Plaintiff and the Plaintiff is bound by the case run at trial. 4 The Second Defendant was not contractually bound to indemnify the First Defendant in the Court below by reason of his untruthful statements in connection with the claim, his failure to assist in the processing of the claim and his failure to deliver every summons, complaint or paper in respect of the alleged loss. 5 Irrespective of what amount, if anything, was paid to the repairer, it was not proved that such amount was referrable to the collision rather than any or all of the three (3) prior collisions in which the vehicle had been involved."
2. The magistrate relevantly found that: 1. the damage to the BMW was caused by Mr Grech's vehicle colliding into its rear; 2. CSR, the repairer, had carried out repairs to the BMW, the cost of which was assessed to be $15,900, being the amount actually paid to CSR for those repairs; 3. an independent loss assessor, Scott Quirk, whose evidence was not challenged, assessed the cost of repairing the BMW to its pre-collision condition to be $57,939.16; 4. as her Honour was not satisfied that the sum of $57,939 would actually be spent on the repairs, her Honour awarded $15,900.
3. It was common ground, and I accept, that the approach to be taken to a notice of contention in an appeal to this Court under the Local Court Act was as set out by Beech-Jones J in Ken Wolf Real Estate Pty Ltd v O'Halloran [2012] NSWSC 993 at [53] as follows: "On an appeal under s 39(1) of the Local Court Act, the issues raised by a notice of contention will only arise for consideration at a point where either an erroneous decision by the Local Court on a question of law or, if leave has been granted, on a question of mixed law and fact has been established and the question arises as to what relief, if any, should be granted under s 41. If the notice of contention raises a pure question of law which is determinative of the case and is resolved in favour of the respondent to the appeal, then the appeal should be dismissed. If it only raises a question of fact determined adversely to the respondent by the Local Court then, consistent with the above authorities, it should not be entertained. If it raises a question of mixed fact and law then the same consideration that attends a grant of leave to an appellant under s 40(1) would attend the Court in considering the exercise of its discretion to grant relief and the form of that relief pursuant to s 41."
4. The measure of damages for tort is that sum of money that will put the plaintiff in the position in which he would have been had the tort not been committed: Gates v City Mutual Life Assurance Society Limited (1986) 160 CLR 1 at 13 (Mason, Wilson and Dawson JJ); [1986] HCA 3. When assessing a claim for property damage, there are various possible heads of damages and methods of assessing loss. In the present case, the magistrate rejected any economic loss claim. There was no evidence of the diminution in the value of the BMW as a result of the collision. Accordingly, damages were assessed by reference to the cost of repair: that is, the cost of restoring the BMW to its pre-collision condition. This involved an evaluative judgment, according weight to the evidence of what CSR had been paid and the unchallenged evidence of Mr Quirk. Ultimately, the magistrate decided that the figure of $15,900, being the amount actually paid to CSR for the repairs, represented the loss suffered as a consequence of the collision. I discern no error of principle. This finding, which is one of fact, was open to her Honour.
5. For these reasons, I do not accept DMC's arguments on the notice of contention.

Costs

1. The parties have asked that I reserve the question of the costs in the Local Court and in this Court, pending further submissions.

Orders

1. The plaintiff has sought an order for judgment in his favour on his claim and in Mr Grech's favour on the cross-claim. The parties wish to have the opportunity of addressing me on the latter question. Accordingly, I will refrain from making an order relating to the cross-claim.
2. For the reasons set out above, I make the following orders: 1. Allow the appeal. 2. Set aside the order made by Atkinson LCM dismissing the plaintiff's claim and in lieu thereof order judgment in favour of the plaintiff. 3. Reserve the question of the appropriate order on the cross-claim. 4. Reserve the question of the costs of these proceedings and of the costs in the Local Court. 5. Direct the parties to agree on a timetable for submissions on the cross-claim and costs and provide it to my Associate in the form of draft short minutes by 4.00pm on 15 March 2020 in order that directions can be made in chambers. 6. Grant liberty to apply to restore the matter on three days' notice.

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. Decision last updated: 11 March 2020