Lean v Clarence Property Corporation Ltd

Further application by Clarence's solicitor 9Even though the parties had been advised the filing of additional submissions would require a grant of leave, on 20 November 2012 my associate received a four-page letter direct from Clarence's solicitor. The letter asserted the author had "sat on the side line in relation to the appeal" and asserted his client: "[s]hould be given an opportunity to address evidentiary issues that have become relevant to the now (sic) defence that is raised by the plaintiff in this Court." 10The letter sought to re-argue aspects of the appeal and complained about Mr Lean being successful on a new point which was said to involve the raising of a defence under s 184(3) of the Land Title Act 1994 (Qld). Section 184(3) is referred to in Lean (No 1) at [38]. The letter sought a new set of orders which would involve the remittal of the proceedings to the Local Court for rehearing and the amendment of Mr Lean's defence to raise a defence under s 184(3). 11In addition, my associate was also sent a copy of a letter sent by the defendant's solicitor to the plaintiff's solicitor enclosing the letter to the Court. Amongst other matters, this letter referred to the author's opinion that the course of the appeal had created an "injustice". 12The politest description that can be applied to the letter of 20 November 2012 is that it was misconceived on a number of levels. First, as I have stated, the parties were specifically advised on 15 November 2012 that submissions on new issues would only be considered if there was a grant of leave to do so. Yet the letter appears to seek exactly that with no such leave having been obtained. In substance the letter was no more than a venting by the author. If it was meant to be a serious application to reopen it was a completely inappropriate means of doing so. 13Second the solicitor had not "sat on the side lines". To the contrary, he instructed counsel to argue the appeal for his client, and counsel performed his role well. 14Third, the orders allowed in the appeal in dismissing Clarence's appeal in the Local Court had already been entered. 15Fourth, it should be apparent from Lean (No 1) that Mr Lean did not "succeed" on a defence that raised s 184(3) of the Land Title Act. Instead, Clarence simply failed to prove the necessary elements of a cause of action brought against Mr Lean for the breach of the guarantee. It will be necessary to return to this in light of what occurred next. 16The day after the receipt by the Court of the letter by Clarence's solicitors, its counsel emailed my associate seeking to have the matter re-listed to argue a notice of motion seeking to vary all of the orders made on 25 October 2012 to reflect the approach stated in the letter of 20 November 2012. In an effort to bring the matter to a finality I made directions requiring Clarence to file and serve a notice of motion and submissions, and listed the matter before me today. 17Clarence filed a notice of motion. It sought orders under s 14 of the Civil Procedure Act 2005 for the Court to dispense with the requirement under r 36.16(3A) of the UCPR that a notice of motion for the setting aside or variation of the judgment or order be filed within fourteen days of it being entered. The motion also sought the variation of the balance of the orders made on 25 October 2012 in the manner suggested in the letter of 20 November 2012, as well as orders for costs in Clarence's favour. 18Accompanying the notice of motion was an affidavit of Clarence's solicitor, Warren Ernest Wells. The affidavit annexed the letter of 20 November 2012. I will refer to parts of Mr Wells' affidavit shortly. 19For the purpose of considering this notice of motion, I am assuming in Clarence's favour that s 14 of the Civil Procedure Act enables the Court to enlarge the time provided in r 36.16(3A) of the UCPR. I am not to be taken as having decided that such an application can be made in circumstances where the Court was not notified within fourteen days of the orders being made that they would be challenged. If such a power exists then the considerations relevant to its exercise would necessarily include the explanation for any late application and the merits of the application. None are of any assistance to Clarence. 20Mr Wells' explanation for the delay in bringing this application is set out in paragraphs 11 to 13 of his affidavit. In paragraph 11, he recites the history of what occurred in relation to the debate over costs following publication of the judgment in Lean (No 1), recited above at [8]. He states that after being notified that the previous costs orders had been set aside and that a timetable in relation to the costs had been set: "12. I then instructed counsel to prepare submissions on the issue of costs. I delayed seeking instructions to file a notice of motion seeking a variation of the other orders of 25 October 2012 for the following reasons: a. I assumed that when the costs issue was resolved, the orders of 25 October 2012 would be amended and then re-entered in their entirety. The parties would then have 14 days from the entry of those amended orders to file an application to vary the orders made. b. Furthermore, I considered that it was in the interests of facilitating the just, quick and cheap resolution of the proceeding to delay the application to vary the orders made on 25 October 2012 until after the revised orders had been entered rather than making essentially piecemeal applic-ations to vary the orders at different times. 13. Following my intense consideration of the orders made by this Court and discussions with the officers of Clarence Property, my views on the appropriate time to deal with the orders other than those as to costs changed 20 November 2012, prompting me to write to the Court. On 21 November 2012 I received instructions from the client to formalise what appears in the email and to instruct counsel to draft a notice of motion seeking variation of the orders made on 25 October 2012, in accordance with my email to the Court dated 20 November 2012." (emphasis added) 21The source of his belief as recounted in subparagraph 12(a) that once the issue of costs was resolved, then all other orders would "be amended and then re-entered in their entirety" is not stated. I do not accept that it is a belief that has any proper basis. The position was made clear in Lean (No 1) which drew the parties' attention to r 36.16(3B) of the UCPR. It should have been immediately apparent to anyone who looked at r 36.16 that there would not be a re-consideration of the Court's orders in their entirety. Why should any such re-consideration occur after costs are determined? Normally costs are the issue that is determined last. 22In paragraph 13 of his affidavit Mr Wells states that he gave the orders in Lean (No 1), "intense consideration". The judgment in Lean (No 1) was only fifty paragraphs long and the necessary "intense consideration" to ascertain the operation of r 36.16 could have occurred in much less than the almost four weeks between publication and the letter of 20 November 2012. 23In these circumstances, I am not satisfied that a satisfactory explanation for the delay in making the application has been provided. 24In any event, for the reasons I have already adverted to but will outline in further detail, the application was wholly misconceived. 25The submissions filed in support of the notice of motion confirm that it is premised on the incorrect contention that Mr Lean succeed upon a defence under s 184(3) of the Land Title Act, which he only raised for the first time in this Court. 26I have outlined the basis of my judgment in Lean (No 1) above. The operation of s 184(3) of the Land Title Act only arose on the appeal because Clarence, not having proved any other means by which Robina's interests as lessor were succeeded to or were assigned to the Public Trustee, might have demonstrated that succession or assignment if there was privity of estate between the Public Trustee and Dog & Parrot. 27This was the issue I raised with the parties on the first day of the hearing of the appeal. I raised it because it was a means by which Clarence could have overcome the lacuna in its case as to whether the Public Trustee was the assignee or successor of Robina's obligations as lessor and thereby maintained the verdict in its favour based on the presiding magistrate's finding of fact. Counsel for Mr Lean only resorted to s 184(3) to defeat that argument (Lean (No 1) at [38]). 28The question as to whether the point that Mr Lean succeeded on in this Court was originally raised in the Local Court was addressed in Lean (No 1). In Lean (No 1) at [23] to [24] I explained that, in the Local Court, Mr Lean's principal response to Clarence's claim was that, as Robina never executed a written lease, it never came into effect and there was no obligation that he had guaranteed. I explained that in response to that argument Clarence had sought to demonstrate to the Local Court that the lease was nevertheless binding upon Robina, even though it was not executed by Robina and further contended that the Public Trustee was an "assignee" of Robina's right, title and interest as lessor. I noted that in response to that contention Mr Lean's counsel had submitted to the Local Court that there was, "no evidence that could possibly support any such assignment". 29Later in Lean (No 1), when addressing costs I stated at [49]: "Even though the point Mr Lean succeeded on was not at the forefront of his submissions in the Local Court it was raised." 30It is regrettable that in bringing this application, Clarence's legal representatives have not adverted to these parts of Lean (No 1), much less sought to address them. On the hearing of the application I specifically drew the attention of Clarence's counsel to the passage in the transcript of the Local Court hearing upon which the findings in Lean (No 1) at [23] to [24] were based and sought his submissions. 31Those passages in the transcript commence with submissions in reply by Mr Wells who was then appearing for Clarence. Apparently in response to a point raised by Mr Lean, that the lease had not been executed, he submitted on behalf of Clarence as follows: "No one argues against the fact that the lessor was, well, there's an argument against the lessor being Robina but Robina was the entity that existed at the time Dog and Parrot took possession of the premises. On my submission, by the application of the doctrine of part performance, Robina was the lessor at that date and from that date until January 2007, 18 January 2007. There is no argument that the Public Trustee became the lessor and so there's no argument that it can be defined as an assignee of the lessor's right title and interest in the lease and finally, there can be no argument that my client is also defined by that. It is an assignee and in relation to that, your Honour, para 5.2 states clearly 'that the transfer of the whole of the lessor's interest in this reversion will operate to assign the benefit of this guarantee and indemnity to the transferee of that interest as if the guarantee and transferee had done so expressly'." (emphasis added) 32The transcript records that counsel for Mr Lean then submitted to the presiding magistrate that Mr Wells' submissions were "not truly in reply" and sought to further briefly address those submissions. He was granted that leave. His supplementary submissions complained about Clarence relying upon the doctrine of part performance in support of the existence of a lease between Robina and Dog & Parrot, which he said was not pleaded. He further contended: "It's then said that there was, it's now said I should say, that there was some sort of assignment of an unwritten lease to the Public Trustee of Queensland. Not only is there no evidence that could possibly support any such assignment, the evidence is to the contrary." 33This is the very argument that I upheld in Lean (No 1). It was the rejoinder Mr Lean made to a changing argument that Clarence had mounted in the Local Court in response to Mr Lean's contention that there was no formal lease entered into between Robina and Dog & Parrot which engaged the guarantee. Subsection 184(3) of the Land Title Act only arose on the appeal as a further response by Mr Lean to a point which I raised as to whether there was any assignment by operation of law of any unwritten lease between Robina and Dog & Parrot to the Public Trustee. 34The appeal succeeded in this Court because Clarence never proved its case in the Local Court. At all times it bore the onus. There is no justification for giving it an opportunity to recast its case a further time. In paragraph 8 of his affidavit Mr Wells sets out various steps he claims he would have taken if the submission concerning s 184(3) had been raised in the Local Court. The steps he nominates are either steps that should have been taken as part of Clarence's obligations to discharge its onus of proof in the first place, or could only have possible relevance if Clarence fundamentally recast its case in a manner that is not apparent to me. There is no proper reason why Clarence should be able to pursue any of them. Clarence's notice of motion will be dismissed.

Costs of proceedings 35In its written submissions concerning costs, Clarence contended Mr Lean should pay its costs of the Local Court proceedings and the proceedings in this Court up to and including 8 October 2012. It submitted that Mr Lean only succeeded on a point that was not raised before the Local Court and was not raised until after oral argument on 8 October 2012. 36It submitted that in those circumstances, it would be unjust to visit a costs order upon it and instead it should receive its costs. Clarence refers to a number of decisions in which the principle that costs follow the event have been altered in circumstances where a party has succeeded on an appeal on a point not raised below, or has succeeded on a point that was only raised late (including Armstrong v Boulton [1990] VR 215 at 223; and Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137; [1994] 4 All ER 464). 37It follows from the above that the premise for this contention is one that I do not accept. Mr Lean did raise the point he succeeded on before the Local Court. I will order Clarence to pay Mr Lean's costs of the proceedings in the Local Court and in this Court.

Indemnity costs and repayment order 38As I have stated, in his submissions in reply, Mr Lean sought an order for indemnity costs and an order that he be paid certain amounts that have been paid by him pursuant to the judgment of the Local Court. 39The basis for Mr Lean's application for indemnity costs was an offer he made on 7 September 2011 to pay $4,000.00 to settle Clarence's claim. The letter of 7 September 2011, to which this submission related, was sent prior to proceedings being commenced. It appears that, in response to a letter of demand from Clarence, the letter sought clarification of the basis of Clarence's claim, as well as copies of various documents. The letter stated: "In the meantime please be advised my client does not have the financial capacity to pay $40,000 either now or over a period of 12 months. He is prepared to offer a sum of $4,000 payable over 4 months. Your client should be aware my client is considering his options as far as his financial future. Any money spent by your client pursuing my client will be a wasted expense." (emphasis added) 40The letter did not make any reference to it being a Calderbank letter nor to being relied on for the purposes of costs. There is no evidence that the offer was repeated after proceedings commenced. Further, I do not construe the letter as making an offer that was capable of immediate acceptance by Clarence. In context the statement that Mr Lean was "prepared to offer a sum" was not a statement that he was in fact offering a sum but that he would offer a sum if Clarence indicated it would be acceptable. The statement was made in the context of an explanation being given as to the inadequate information available to Mr Lean and his otherwise limited financial means. 41Accordingly, I reject Mr Lean's application for indemnity costs for this appeal and in the proceedings in the Local Court. 42It appears that Mr Lean has paid $6,500.00 of the Local Court judgment pursuant to an instalment order. Despite demand Clarence has not repaid it. Clarence's submissions indicate that the funds are being retained, pending the determination of its application for costs. As I will be ordering it to pay Mr Lean's costs, there is no basis upon which it can retain this amount. I will order that any amounts paid by Mr Lean pursuant to this judgment be repaid. 43Finally, it follows from what I have said earlier that the costs of the notice of motion filed 26 November 2012 will be paid by Clarence. 44Accordingly I order as follows: (1)The Defendant's notice of motion filed 26 November 2012 be dismissed. (2)The Defendant pay the Plaintiff's costs of that notice of motion. (3)The Defendant in this Court pay the Plaintiff in this Court's costs of the Local Court proceedings 2011/327799. (4)The Defendant in this Court otherwise pay the Plaintiff in this Court's costs of these proceedings including the argument as to costs. (5)The Defendant pay the Plaintiff such amounts as have been paid by the Plaintiff to the Defendant pursuant to the judgment given by the Local Court in Local Court proceedings 2011/327799, with interest. (6)The exhibits be returned.

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: 07 December 2012