Goodman v Lorenzen [2000] QCA 11

[1] McPHERSON JA: This is an appeal, or more accurately an attempt to appeal, against a decision striking out an action instituted by plaint no 127 of 1995 issued out of the District Court at Cairns on 19 June 1995. In it the plaintiff, who is the appellant in this Court, claimed a sum of $52,440.18 representing the total of amounts of various payments alleged to have been made as loans by means of cheques drawn in favour of the respondent defendant on dates between 1989 and 1993, together with damages for detinue or conversion of a diamond said to be worth $2,500 and certain books on art valued at $6,569. The plaintiff and defendant had formerly lived as art instructor and pupil until 1993. During that period, their property had to some extent become intermixed, and, with a view to separating or resolving their proprietary rights, they signed a handwritten agreement (ex PRL 1) dated 2 June 1993, on which the defendant relied as a defence, wholly or partly, to the action against her.

[2] In 1998 the defendant applied to White DCJ for an order that the plaintiff provide security for her costs of the action in the sum of $15,000, which was accepted by solicitors on both sides as a reasonable estimate of the likely amount of those costs. The application was opposed by the plaintiff but, after a hearing or hearings at which the parties were represented by counsel, his Honour, for reasons which he gave on 27 May 1998, and in which he recognised that the course he was taking was exceptional, exercised his discretion in favour of the defendant by ordering that, within 60 days, the plaintiff provide security for her costs of the action in the sum of $15,000; and that the action be stayed until the security was given.

[3] The plaintiff did not attempt to appeal against the order, but he failed to comply with it. In consequence, the defendant on 25 August 1998 applied for an order that the action be struck out. The application came before the learned judge on 18 September 1998, when the plaintiff was again represented by counsel. Submissions were made, and the decision on the application was reserved by his Honour, or it may be that the hearing was adjourned to be completed at a later date. On 11 November 1998 the plaintiff filed an application in those proceedings seeking that the order for security made on 27 May 1998 be set aside. As amended by a further application of the same date, it sought (para 6) an order that the order for security for costs be set aside, which was a claim repeated in yet another such application filed on 10 December 1998. Other orders were also sought in relation to matters which, although they might perhaps have been material to issues arising at a trial of the action, were not relevant either to the application to set aside or to the defendant's own application to strike out the action. The plaintiff's applications were accompanied by various affidavits asserting fraud on the part of the defendant in procuring the agreement PRL1, and of her solicitor in obtaining the order for security for costs, as well as matters advanced in support of a variety of the other orders that were being sought by the plaintiff, including an order for production of the document PRL1, and so on.

[4] The precise sequence of events that ensued is not entirely clear from the appeal record before us, which was prepared by the plaintiff himself and which in some minor respects appears to be deficient. What is clear, however, is that in December 1998, his Honour delivered reasons in which he referred to the application to set aside the order for security, and recorded that the plaintiff, who was by then no longer legally represented, had said that he was "interested" in providing the security for costs which had been ordered on 27 May 1998, but was having difficulty doing so. It may be added that in this Court the plaintiff claimed that he was unable to provide the amount of the security ordered. In any event, his Honour concluded that no prejudice would result to the defendant if her application were adjourned for a time to allow the plaintiff to provide the security so ordered. Both the plaintiff's and defendant's applications were then adjourned to 29 January 1999, his Honour observing in the reasons which he gave at that time that he would deal with the plaintiff's application before making any final order dismissing the action.

[5] The matter was back before the learned judge first on 6 February and then again on 12 February 1999, which was the morning after the night on which Cyclone Rona passed over Cairns. The hearing nevertheless took place because the plaintiff had come some distance for the occasion and the defendant's solicitor was anxious to proceed. On 29 March 1999 his Honour delivered reasons dismissing the plaintiff's application to set aside the order for security made on 27 May 1998 and, on the defendant's application, ordering that the action be struck out. In the meantime, further affidavits had been filed, and communications had been made or attempted on behalf of the plaintiff with the registrar of the court and the judge's associate. Judging by the material in the appeal record, these communications or attempts related to claims or contentions that the agreement PRL1 and the order of 27 May 1998 had been procured by fraud on the part of the defendant or her solicitor. Having regard to the plaintiff's complaint that, at the hearing on 12 February 1999, he had been under stress because of the cyclone and was indisposed, his Honour gave him leave to file a further affidavit sworn on 22 February 1999. With respect to other material which had been received from the plaintiff in an informal way, the learned judge directed that it be sealed in an envelope and placed in the court file. It was not the subject of any submissions to the Court at the hearing of this appeal.

[6] The stage has now been reached where it is possible to consider the appeal now before us. As regards the plaintiff's application to set aside the order for security made on 27 May 1998, his Honour, in referring to it in his reasons delivered in December 1998, said that, except on an appeal against it, there was no power to set aside or vary that order. That was, in law, not altogether correct. The order in question was interlocutory in character, and interlocutory orders are, at least to some extent and in some circumstances, susceptible of variation either by the judge who made them or otherwise without necessity for an appeal. What is, however, generally required as a prerequisite to varying or setting aside such an order is new material providing evidence of additional relevant facts, which have arisen or been discovered since the earlier application or order was made, that require a different order from that originally made, or would have done so at the time when that order was made. See ex p Edwards [1989] 1 Qd R 139, 142. Without material of that kind, a further such application would, as Taylor J described it in Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423, 440-441, ordinarily prove quite "fruitless".

[7] The plaintiff would, if he was aware of this requirement, no doubt say that his allegations of fraud against the defendant and her solicitor amount to "additional relevant facts" in this sense. However, as regards the defendant herself, the allegations made against her centred on the execution on 2 June 1993 of the agreement PRL1, and so raised questions which, if relevant at all, are concerned with contested issues that will or would arise only when trial, if any, takes place. On the hearing before us, the plaintiff, who appeared in person, confirmed that what he is contending is that, in prevailing on him to sign that agreement, the defendant committed the criminal offence of larceny or stealing. It is, of course, clear that that is not what is meant by fraud in obtaining the order for security for costs, and cannot constitute additional relevant facts capable of resulting in that order being set aside or varied.

[8] As regards the allegations of fraud against the defendant's solicitor, the learned judge, whatever his view may have been when he gave his reasons in December 1998, quite plainly did in the end consider the material relied on by the plaintiff for that purpose before giving his decision on 29 March 1999. In his reasons of that date, he described the attacks on the solicitor's integrity as "scandalous and outrageous", adding that the solicitor in question had been "scrupulously honest" in his work before the court, "in stark contrast to the plaintiff". Considering that the plaintiff was by then an unrepresented litigant, it might perhaps have been preferable if his Honour's remarks had been less emphatically phrased; but he concluded his reasons by saying that there was "virtually no basis for thinking that the defendant obtained the order for security for costs by fraud". The intrusion of the word "virtually" is not calculated to inspire confidence; but, even if weight is given to that apparent qualification, it is clear that the plaintiff's allegations of fraud in obtaining the order were being dismissed outright. On the admissible evidence presented in support of these allegations, there is nothing at all before us to show that his Honour was mistaken in coming to that conclusion.

[9] The only other material capable of being characterised as presenting additional relevant facts in support of the plaintiff's application to set aside or vary the earlier order is that the revenue authorities in California have, it is said, now quantified and fixed the amount of some previously indeterminate claims against the plaintiff for unpaid taxation. There is a letter dated 31 December 1998 addressed to the plaintiff from the Tax Board of that state, which, in appropriately minatory terms, explains the consequences that will ensue if arrangements for monthly payments of the outstanding total of $54,367.32 are not adhered to. The plaintiff, it appears from the material, has income and income-producing assets in the United States, but nothing at all in Australia that the defendant or her solicitors have been able to identify. Far from affording a reason why the order for security for costs, or the order for striking out, should not have been made at all, the evidence of this latest development may well be thought to provide, if anything, additional grounds for giving effect to those orders.

[10] Out of deference to the plaintiff as an unrepresented litigant in this Court, the material in the record has been examined here in greater detail than is perhaps warranted by the nature of the matter before us. As has previously been said, these proceedings take the form of an appeal to this Court against the orders made on 29 March 1999, which (1) dismissed the plaintiff's application to set aside (or perhaps vary) the order for security for costs; and (2) struck out the plaintiff's action. Both orders are interlocutory in character, the first of them plainly so: cf. Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423, and authorities referred to there. The original order for security made on 26 May 1998 did no more than stay proceedings pending provision of the security that was ordered to be given. As to the second order, striking out an action might on first impression be thought to stand on a different plane; but an order of that kind does not determine the merits of the matters in issue in the action, or finally adjudicate upon the rights of the parties to it, which is the test generally now adopted in deciding whether an order is final or interlocutory. See Licul v Corney [1976] HCA 6; (1976) 50 ALJR 439, 444, and Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 35, as well as the many subsequent cases in which those authorities have been considered and applied, including e_x p Britt_ [1987] 1 Qd R 221, 224-225.

[11] Dismissing or striking out an action for want of prosecution is regarded as interlocutory only, as it was for example by Lord Diplock in Birkett v James [1978] AC 297, 319; and striking out an action for failure to comply with an order for security for costs has long been treated as a form of dismissal for want of prosecution: Vale v Oppert (1877) 5 Ch D 633; La Grange v McAndrew (1879) 4 QBD 210. An order dismissing an action for want of prosecution is one that is made in the exercise of the court's inherent jurisdiction: Birkett v James [1978] AC 297, 318; Madden v Kirkegood Ellwood & Parties [1983] 1 Qd R 649, 652; and the District Court possesses inherent or, more accurately, implied or incidental jurisdiction sufficient to sustain the making of an order of that character. See, generally, Jago v District Court of New South Wales [1989] HCA 46; (1989) 168 CLR 23; and, more specifically as to Queensland_, R v Noud, ex p MacNamara_ [1991] 2 Qd R 86, 93.

[12] It was therefore within the jurisdiction or power of the learned judge in the exercise of his discretion in this matter to strike out the plaintiff's action for failure to comply with the order made on 27 May 1998 to provide security for the defendant's costs of the action. The order made on 29 March 1999 that the action be struck out was interlocutory only, and not final. As such, the leave of this Court to appeal against it is required under s 118(3) of the District Court Act 1968. Even if the plaintiff had applied for such leave, I would, for the reasons given here, not be prepared to grant it. As it is, application to this Court, which is in form of an appeal is incompetent, and should be dismissed with costs.

[13] There is a further matter requiring mention although it does not affect the conclusion reached in these reasons. On 4 February 2000 the President conducted a directions hearing in relation to the hearing of this appeal. In the course of it, the plaintiff intimated that, for the purpose of the appeal, he wished to submit the written agreement ex PRL1 to a documents expert Mr Marheine for his report. The agreement was handwritten and signed in duplicate evidently using carbon paper to produce a second copy simultaneously with the first. There are some words on the top copy, which was retained by the plaintiff after its execution, that do not appear on the carbon copy, which was retained by the defendant. The plaintiff was confident that the question of how or when those words appeared on the top copy, but not on the carbon copy, would be elucidated if the carbon copy was submitted to Mr Marheine. The defendant, on the other hand, was unwilling to allow the original carbon copy to pass into the possession of the plaintiff himself.

[14] Her Honour obtained undertakings from both parties enabling the carbon copy to be submitted to Mr Marheine, which was done. Mr Marheine prepared a report which, or a copy of which, was submitted to the Registrar of the Court. Mr Marheine may well have believed that he had been appointed a court expert pursuant to UCPR 425(1), and so sent a copy of his report to the Registrar in compliance with UCPR 426(1). Rule 426(3) makes a report ordered under Rule 425 admissible in evidence but not binding on a party, except to the extent that he agrees to be bound by it: UCPR 426(4).

[15] In the course of the hearing in this Court, Mr Cochrane of counsel for the defendant at first tendered the report. The plaintiff objected to its admission in evidence. Mr Cochrane then withdrew the tender, whereupon the plaintiff proceeded it appeared, to change his mind and insist that the report be placed before the Court. If this should be equated with his tendering it, then in my opinion it should not be admitted in evidence at this hearing. I am disposed to the view that what was envisaged at the directions hearing was not the appointment of an expert under UCPR 425, but an inspection of property (the carbon copy original of PRL1) pursuant to UCPR 250. The precise authority for what was being done was not investigated at the directions hearing. The President acted on the undertakings given by the parties, and, in the result, no order of any kind was in fact made under either of those rules of court.

[16] It follows that the report is not of its own force under UCPR 426(3) admissible without its being proved in the ordinary way. If it had been admitted, it would have on this hearing assumed the status of fresh evidence that was not before the primary judge, which would or might have required the Court to undertake an original rehearing and to re-exercise the discretion to strike out the action: cf Kaats v Caelers [1966] Qd R 482, 507. Not having been admitted in evidence in these proceedings, the report of Mr Marheine has not affected the result arrived at, which, as I have said, is that the appeal should be dismissed with costs.

[17] THOMAS JA: I agree with the reasons of McPherson JA.