Tobias Partners Pty Ltd v Hayson

Uniform Civil Procedure Rules LEGISLATION CITED: Civil Procedure Act 2005 Cheques Act 1986 (Cth)

TCS Aces Pty Ltd v Mikohn Gaming Australia Pty Ltd [2007] NSWSC 1139 Drabsch v Switzerland General Insurance Co Ltd & Ors unrep, 16 October 1996 BC 9604909 SLE Worldwide v WGB [2005] NSWSC 816 Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 CASES CITED: Ridolfi v Rigato Farms Pty Ltd (2001) 2 Qd R 455 Apex Pallett Hire Pty Ltd v Brambles Ltd unrep SC of Victoria, Full Court 8 April 1988 H. Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694 Hannon v Afro Pacific Capital Limited [2009] NSWSC 564 Spalla v St George Wholesale Finance Pty Ltd (1999) 95 FCR 359

PARTIES: Tobias Partners Pty Ltd (Plaintiff) Edward Hayson (Defendant)

COUNSEL: S A Benson (Plaintiff) J Gruzman (Defendant)

SOLICITORS: Lenehan & Partners O'Brien & Hudson Solicitors

1 Before me are several notices of motion. I have stood over a notice of motion by the Defendant seeking security for costs until I have decided two other applications. One is by the Plaintiff for summary judgment in whole or in part, and the other is by the Defendant, seeking leave to withdraw admissions made by him, some in the Defence which he filed, and some deemed admissions which he has made because he failed to respond to a Notice to Admit Facts within 14 days of service of that notice early in June.

2 The claim by the Plaintiff, which carries on business as an architect, is for payment of moneys said by it to be due pursuant to a contract. It is not in dispute that there was a contract between the Plaintiff and the Defendant, pursuant to which the Plaintiff would perform certain architectural work for the Defendant in respect of the development of a large residential property at Cremorne. In the course of hearing these applications, it has emerged that there is now a possible dispute between the parties as to what the contract provides, although in its original defence, the Defendant admitted that the contract was as it had been pleaded by the Plaintiff.

3 It is not in dispute that the Plaintiff did perform some architectural work for the Defendant pursuant to the contract. Nor is it in dispute that some time in March or April 2008, the Defendant terminated the contract, because he had sold the land upon which the development was proposed.

4 Subsequently, the Defendant handed to the Plaintiff a cheque for $100,000. Apparently this cheque was post-dated. The Plaintiff presented the cheque for payment on the date that it bore. By that time the Defendant had stopped payment on the cheque. By its amended Statement of Claim, the Plaintiff seeks compensation for the cheque, and by its notice of motion it seeks summary judgment on that claim.

5 The Defendant has admitted, or is deemed to have admitted, that he drew the cheque and delivered it to the Plaintiff. He now seeks to withdraw admissions and file a defence to the effect that payment of the cheque was conditional.

6 The Plaintiff's motion for summary judgment was filed in December 2008. Prima facie, in view of the admissions made in the Defence, it was entitled to summary judgment or judgment on admissions, at least in part, at that stage. At that time the Defendant lodged a notice of motion seeking to withdraw admissions. The matter came before me earlier this year. At that stage it occurred to me that the matter would more appropriately be resolved by mediation, and I stood the matter over to enable that to occur. Attempts were made, unsuccessfully, to resolve the matter. The matter was re-listed and, fortuitously, came before me.

7 In the meantime, the Plaintiff filed an amended Statement of Claim, adding counts seeking compensation for the dishonoured cheque, and both parties amended their notices of motion, so I am now dealing with those amended notices.

8 In addition, the Plaintiff served a Notice to Produce Documents, in consequence of which some documents were produced, and also, on June 5, 2009, a Notice to Admit Facts. There was no response to the Notice to Admit Facts, and in consequence, pursuant to Rule 17.3, the Defendant is deemed to have admitted the facts specified in the Notice.

10 The Defendant seeks to withdraw two classes of admission. The first class consists of admissions made in the Defence filed on 28 October 2008. The second admissions deemed to have been made because the Defendant did not respond to a Notice to Admit Facts.

11 The Statement of Claim reads as follows: "2. By written agreement between Plaintiff and the Defendant dated 1 August 2007, and accepted in writing by Artazan Pty Ltd on behalf on the Defendant on 9 August 2007, Plaintiff agreed to provide architectural services to be Defendant in respect of the Defendant's property at 18-20 Large Rd, Cremorne ("property") Particulars (i)The agreement was in writing and dated 1 August 2007. The Plaintiff relies upon the terms of the agreement as if it has been fully and accurately set forth herein.

12 Mr Gruzman, for the Defendant, points out that this form of pleading is objectionable. He refers to Rule 14.9, which provides:

References in pleadings to documents and spoken words

14.9 If any documents or spoken words are referred to in a pleading: (a) the effect of the document or spoken words must, so far as material, be stated, and (b) the precise terms of the document or spoken words must not be stated except so far as those terms are themselves material."

13 He also referred to the judgment of Brereton J in TCS Aces Pty Ltd v Mikohn Gaming Australia Pty Ltd [2007] NSWSC 1139 at [7], where his Honour said, "[T]his is an impermissible form of pleading. A party must not incorporate terms of an agreement by reference, but must set out in each pleading the effect of the terms for which it contends." This point was not taken until the hearing. No objection was taken to the form of the pleading previously, and, as will be indicated, the Defendant admitted the allegation stated in the particulars, with one exception which is not material here. In this case, the Defendant's case is that the terms of the Statement of Claim, paragraph 3(v) (set out below), the contents of which the Defendant has never admitted, do not accurately reflect the terms of the contract, which add some relevant words. Those words are material in the dispute that clearly exists on the pleadings, given the Defendant's non-admission of the relevant paragraph. Because the words are material, Rule 14.9 permits, and possibly requires, that the terms of the statement be pleaded in full. Although it is not vital in this case, I see no reason why the pleading should not incorporate those terms by reference, rather than setting them out verbatim.

14 The Statement of Claim continues: "3. The terms of the agreement, inter alia, were as follows: (i) The Defendant agreed for the Plaintiff to attend to architectural work. (ii) Fees by the Plaintiff would be charged for each stage to which work was performed and invoices issued accordingly. (iii) Interest on invoices outstanding for more than seven working days to be charged at a rate of 15% per annum on the outstanding amounts. (iv) Either party may terminate the agreement by giving the other party not less than 10 working days in writing. (v) Within 10 working days of the date of any notice of termination all fees in out-of-pocket expenses to be paid to the Plaintiff by the Defendant for all work carried out by the Plaintiff to the date of termination. 4. On 27 March 2008 Artazan, on behalf of the Defendant, gave written notice of termination to the Plaintiff effectively making the date of termination 10 April 2008. [particulars are omitted] 5. Pursuant to the agreement all invoices issued by the Plaintiff to the Defendant for work done were to be paid by the Defendant. 6. The Defendant has failed to pay invoices issued by the Plaintiff for work undertaken being invoices issued on termination and invoices previously issued and passed for payment by Artazan but not paid by the Defendant. "

The particulars of paragraphs 4-6 are omitted. The particulars of paragraph 6 indicate that invoice 565, dated 29 February 2008, is for "architectural fees - 45% stage 2 plus copy/print and colour disbursements"; invoice 579, also dated 29 February 2008, is for "architectural fees - boundary adjustments and jetty review and jetty drawings"; and invoice 562, dated 20 on March 2008, is for "architectural fees - final invoice due to property sale - 95% stage 2 plus disbursements of courier, copying and print fees". The total amount of these three invoices is $216,262.85. GST of 10% is added, making a total of $237,889.14.

15 The Statement of Claim also claims interest at the rate of 15% per annum.

16 The Statement of Claim goes on to allege that the Defendant has breached the terms of the contract by failing to pay the invoices, despite several demands for payment.

17 In the Defence filed on 25 October 2008, the Defendant admits paragraphs 1, 3(i)-(iv), 4 and 5, but denies the remaining allegations.

18 Paragraph 2 of the Defence reads, "in answer to paragraph 2, says that the agreement was constituted by an exchange of letters from the Plaintiff to the Defendant on 1 August 2007 and from Artazan Pty Ltd for the Defendant to the Plaintiff on 9 August 2007."

19 Paragraph 3 includes the following statement: "denies paragraph 3(v) and says that it was agreed that within 10 working days of the date of a notice of termination, the Defendant would pay fees and out of pocket expenses pursuant to the invoices rendered by the Plaintiff in respect of work carried out up to the date of termination."

20 The Defendant also says: "6.In answer to paragraph 6, admits that the invoices pleaded have not been paid but denies that the amounts claimed are due to the Plaintiff, in that the work specified in them has not been completed so as to entitle the Plaintiff to payment under the contract. Particulars (a) Work done had not reachedt the stages set out in the invoices. (b) The final invoice (No 562, 31.03.08), includes work done after the date of notice of termination which was unnecessary in view of determination and cannot be charged for under clause 24, or alternatively clause 20, of the Terms and Conditions incorporated into the contract."

21 Paragraph 7 of the Defence denies paragraphs 7, 8, 9 in 10 of the Statement of Claim.

22 On 5 June 2009, the Plaintiff served on the Defendant a Notice to Admit Facts and authenticity of documents pursuant to Rules 17.3 and 17.4, which are set out below. The notice reads as follows (omitting formal parts): "The Plaintiff requires you to admit the following facts: 1.That the Defendant and the drawer of the National Australia Bank cheque with serial number 236 ("the cheque") are one and the same person. 2.The BSB 082001 and the account 869397622 was, at the date the cheque bears, the Defendant's personal account with the National Australia Bank Limited. 3.All handwriting on the cheque is the handwriting of the Defendant. 4.The signature on the cheque is that of the Defendant. 5.As at the date the cheque was drawn, the Defendant forwarded the cheque or caused it to be sent to the Plaintiff. 6.As at the date the Defendant forwarded the cheque or caused it to be forwarded to the Plaintiff, the Defendant did so with the intention of paying the amount of the cheque to the Plaintiff. 7.The cheque was drawn in part payment of and on account of architectural services rendered by the Plaintiff in relation to 16-20 Lodge Rd, Cremorne in the State of New South Wales.

The Plaintiff requires you to admit the authenticity of the following documents: 1.The authenticity of the annexed cheque with the serial number 236.

If you do not, within 14 days after service of this notice on you, serve a notice on the party requiring admission disputing any fact (and the authenticity of any documents) in this notice, that fact (and the authenticity of that document) will, for the purpose of these proceedings, be admitted by you in favour of the party requiring admission."

23 The Defendant has not ever served any formal notice disputing any fact. However, in support of its application to withdraw admissions, the Defendant has served an affidavit by the Defendant in which he alleges that the cheque was delivered to Mr Nicholas Tobias, the managing director of the Plaintiff, subject to conditions. Most of the other facts required to be admitted are not disputed.

24 Rule 17 deals with admissions. Some relevant parts are: 17.2 Voluntary admissions of fact (1) The admitting party may, by a notice served on the requesting party, admit, in favour of the requesting party only and for the purposes of the proceedings only, the facts specified in the notice. (2) The admitting party may, with the leave of the court, withdraw any such admission. 17.3 Notice to admit facts ((1) The requesting party may, by a notice served on the admitting party ("the requesting party's notice"), require the admitting party to admit, for the purposes of the proceedings only, the facts specified in the notice. (2) If, as to any fact specified in the requesting party's notice, the admitting party does not, within 14 days after service on the admitting party of the requesting party's notice, serve on the requesting party a notice disputing that fact, that fact is, for the purposes of the proceedings only, taken to have been admitted by the admitting party in favour of the requesting party only. (3) The admitting party may, with the leave of the court, withdraw any such admission. 17.7 Judgment on admissions (1) If admissions are made by a party, whether by his or her pleadings or otherwise, the court may, on the application of any other party, give any judgment or make any order to which the other party is entitled on the admissions. (2) The court may exercise its powers under this rule even if the other questions in the proceedings have not been determined."

25 The law into the circumstances in which leave should be granted to withdraw admissions was originally stated in convenient form by Santow J, as he then was, in Drabsch v Switzerland General Insurance Co Ltd and Others, unreported, 16 October 1996 (BC9604909), where his Honour set out the following principles (at BC 7-8): "1. Where a party under no apparent disability makes a clear and distinct admission which is accepted by its opponent and acted upon, for reasons of policy and the due conduct of the business of the court, an application to withdraw the admission, especially at appeal, should not be freely granted; Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 per Rogers CJ Comm D, followed in IOL Petroleum Ltd v O'Neill per Young J (Young J, 17 November 1995, unreported) and Apex Pallett Hire Pty Ltd v Brambles Holdings Ltd (full Supreme Court of Victoria, 8 April 1988, unreported), and in that respect not followin g H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694 at 703. 2. The question is one for the reviewing judge to consider in the context of each particular appeal, with the general guideline being that the person seeking on a review to withdraw a concession made should provide some good reason why the judge should disturb what was previously common ground or conceded ; IOL Petroleum Ltd v O'Neill (supra), in the context of withdrawing a concession made before the Registrar. 3. Where a court is satisfied that admissions have been made after consideration and advice such as from the parties' expert and after a full opportunity to consider its case and whether the admissions should be made, admissions so made with deliberateness and formality would ordinarily not be permitted to be withdrawn; Coopers Brewery Ltd v Panfida Foods Ltd (supra) at 745 and 748. Thus a court will not lend its approval to the withdrawal of admissions where, by analogy with the making of amendments, this is actuated by purely tactical reasons; compare Devae Prufcoat Pty Ltd v Altex Industrial Paints Ltd (Cole J, 15 March 1989, unreported). 4. It will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts. Leave may also be appropriate where circumstances show that the admission was made inadvertently or without due consideration of material matters. Irrespective of whether the admission has or has not been formally made, leave may be refused if the other party has changed its position in reliance upon the admission; H Clark (Doncaster) Ltd v Wilkinson (supra), in that respect not doubted. 5. Following Cohen v Mc William and Anor (1995) 38 NSWLR 476, a court is not obliged to give decisive weight to court efficiency, such that a party who wishes to defend its claim is entitled to a hearing on the merits, with cost orders being available as a means of compensating the other party for any costs thereby unnecessarily incurred or not fairly visited on the other party."

26 That decision was approved and applied by White J in SLE Worldwide v WGB [2005] NSWSC 816. That, and most of the other cases to which I was referred, were decided before the introduction of the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules. Mr Benson, for the Plaintiff, suggested that the introduction of the Act and Rules had changed the position, so that while the general thrust of what was said by Santow J, and earlier by Rogers CJ in Coopers Brewery Ltd v Panfida Foods Ltd, remains the law, a slightly different gloss must be put on the principles because of the provisions of the 2005 Act, particularly sections 56-58, and the Rules. He submitted that the most relevant authority was the decision of the Queensland Court of Appeal in Rigato Farms Pty Ltd v Ridolfi (2001) 2 Qd R 455. There are, after referring to the introduction of the Uniform Civil Procedure Rules, de Jersey CJ (with whom McPherson JA agreed) said: "[20] There is no principle that admissions made, or deemed to have been made, may always be withdrawn "for the asking", subject to payment of costs. The discretion is broad and unfettered, as exemplified by Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 and Equuscorp Pty Ltd v Orazio [1999] QSC 354. [21] The charter of procedure contained in the Uniform Civil Procedure Rules cannot be approached on the basis that if important provisions are ignored, even if inadvertently (and that is not established here), the court may be expected to act indulgently and rectify the omission. Fulfilling procedural requirements will often contribute significantly to securing an ultimate result which may be considered just. Allowing the appellant to withdraw these deemed admissions would substantially erode the beneficial worth of a very important procedural mechanism directed, through expediting cases and reducing costs, to promoting the interests of justice. [22] Parties do not have an inalienable right to a hearing of all issues on the merits. Rule 5(3), for example, confirms each party's obligation to proceed expeditiously, or risk sanctions (rule 5(4)) which may include dismissal. [23] It would have been unduly yielding for the court to have accommodated this appellant's complaint about the consequence of its not responding to the notice. Further, appeal courts should be especially circumspect about interfering with decisions on matters of practice and procedure. As put by the High Court ( Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, 177) "particular caution" must be exercised . The constraints confirmed in House v The King are real constraints, to be respected not perfunctorily discarded, and they are especially powerful, in limiting an appellate court, in a case of this character."

27 In the same case, Williams J said: "It was asserted that it would be unfair to the appellant not to permit the withdrawal of at least some of the admissions because they deprived it of the opportunity of raising at trial significant issues as to causation of the Plaintiff's present contribution. There is, so it was asserted, material in medical reports which would suggest that the Plaintiff had a pre-existing back condition and that his present back condition was not due to any, or all, of the three incidents referred to in the pleadings. In my view that submission is misconceived."

28 Finally, in Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738, at 743-745, Rogers CJ Comm D discussed some of the earlier cases which indicated that if fairness required withdrawal of admissions, that should be allowed. In particular, he referred to Apex Pallett Hire Pty Ltd v Brambles Ltd (unreported, SC of Victoria, Full Court, 8 April 1988) and what Lord Denning MR and Salmon LJ had said in H. Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694, 703, and said "If I may say so, with the greatest deference, their Lordships' words were uttered in another age and in other circumstances. Today it is the thinking in Apexwhich prevails." Those remarks were made before the Civil Procedure Act came into effect. That Act reinforces what Rogers CJ said.

29 I have reached the conclusion, from the principles stated in the cases, both before and after the enactment of the Civil Procedure Act, that it is not an inflexible rule that an admission, once made can be withdrawn. Before granting leave, a court must give careful consideration to the position of both parties and interests of justice. This is made explicit in the Civil Procedure Act s 58, even if that had not been the position at common law. The remarks of the members of the Court of Appeal in Queensland in Rigato Farms Pty Ltd v Ridolfi are not only highly persuasive, but in my view virtually compelling, particularly as they are supported by similar comments in the Supreme Court of this State. The efficient conduct of litigation requires the parties should consider carefully any admission they make, particularly in all verified pleading such as the Defence filed and served in this case.

30 The evidence in this case as to why the Defendant seeks to withdraw the admissions is less than satisfactory. The Defendant himself has not given evidence on this point. The authorities seem clear that where an omission to comply with the notice is deliberate, leave to withdraw a deemed admission should not usually be granted. In this case the failure of the defendant to comply with the notice may have been inadvertent. His solicitor, Mr O'Brien, has given affidavit evidence that, when he was preparing the Defence, he was unaware of the significance of some of the statements in the Statement of Claim. It is quite human for a solicitor to make a mistake. However, the interests of the parties, and particularly the legislative command in the Civil Procedure Act, ss 56 and 58, mean that where parties have brought litigation to a particular stage, it may be unfairly prejudicial to another party to allow admissions to be withdrawn. This is particularly the case where the Defendant has verified the admissions. The fact that admissions are made, or deemed to have been made, inadvertently rousing deliberately is a factor to be taken into account, but the courts, in view of the legislative command, should not automatically relieve a party of the consequences of inadvertence or negligent omission.

31 In this case, the matters upon which the Defendant relies in support of its application for leave are matters that smack of last-minute temporising. The absence of an affidavit from the Defendant himself, the person who verified the defence in which the admissions are contained, would in itself cast serious doubts on the merit of the application. The matters deposed to by the Defendant's solicitor are unfortunate, but to allow the Defendant to withdraw the admissions at this stage would place the Plaintiff in a highly prejudicial position. The prejudice to the Plaintiff is both presumed and actual prejudice. It is clear that the Plaintiff is entitled to some payment, even if the admissions were withdrawn, and the delay in payment causes prejudice, which is not necessarily cured by the payment of interest, costs, or both. In my view, this prejudice outweighs the potential prejudice to the Defendant, who may not, because of my ruling, be able to agitate matters that he now wishes to agitate. Those matters are matters which should, in my view, have been raised several months ago, and not immediately before the hearing of the Plaintiff's application for summary judgment. The matters upon which it relies were readily apparent to it, at least when the Plaintiff first made an application for summary judgment in December 2008. It makes no difference that, shortly after the plaintiff served the Notice of Motion for summary judgment, the defendant served his Notice of Motion seeking leave to withdraw the admissions. Nor is it significant that the admissions were made inadvertently. The fact that a major part of the affidavit evidence in support of the Defendant's notice of motion was filed and served only within the few weeks before the hearing of this application lends support to the view that it is an attempt to salvage a situation where the Rules clearly entitle the Plaintiff to seek a particular remedy.

32 The affidavit of the Defendant, in which he alleges that delivery of the cheque was conditional, was not served until a few days before this hearing. The only explanation provided by the Defendant for his failure to serve a notice of dispute is that it was overlooked by his solicitor. That assertion is made, not in the affidavit of the Defendant himself, but in the affidavit of the solicitor.

33 A Notice to Admit Facts is a device which has been provided by the rules of court for many years. Its purpose is to shorten and simplify proceedings. It is therefore entirely consistent with the purposes of the Civil Procedure Act, particularly s 56. As a matter of practice, such notices have always been regarded as important, and if such a notice is served, a party has a choice: either to serve a notice disputing any alleged fact, or to do nothing, in which case the fact is taken to be admitted, so that the other party is not put to the trouble and expense of proving it. A party who has proper legal advice and does not respond appropriately to a Notice to Admit Facts does so at its peril. The consequences of failure to respond to a Notice to Admit Facts are clear, and a party who does not respond to a Notice to Admit Facts cannot be said to have been the subject of an "ambush".

34 In my view, the circumstances require that the Defendant not be given leave to withdraw the admissions made in the verified Defence. In so far as the admissions sought to be withdrawn are contained in the Defence, the Defendant's application is refused.

35 The Plaintiff's application is brought either under Rule 17.7 (above) or Rule 13.1: 13.1 Summary judgment (1) If, on application by the Plaintiff in relation to the Plaintiff's claim for relief or any part of the Plaintiff's claim for relief: (a) there is evidence of the facts on which the claim or part of the claim is based, and (b) there is evidence, given by the Plaintiff or by some responsible person, that, in the belief of the person giving the evidence, the Defendant has no defence to the claim or part of the claim, or no defence except as to the amount of any damages claimed, the court may give such judgment for the Plaintiff, or make such order on the claim or that part of the claim, as the case requires. (2) Without limiting subrule (1), the court may give judgment for the Plaintiff for damages to be assessed. (3) In this rule, a reference to "damages" includes a reference to the value of goods."

36 In Hannon v Afro Pacific Capital Limited [2009] NSWSC 564, Johnson J conveniently summarised the applicable legal principles: "7. The principles applicable on a summary judgment application are not in doubt. The application for summary judgment is brought under Part 13 rule 1 of the Rules. Those provisions provide that if on application by a Plaintiff in relation to the Plaintiff's claim for relief, there is evidence of the facts on which the claim or part of the claim is based and there is evidence given by the Plaintiff or some responsible person that in the belief of the person giving the evidence, the Defendant has no defence to the claim, or part of the claim, or no defence except as to the amount of any damages claimed, the Court may give judgment for the Plaintiff or make such other order on the claim or part of the claim as the case requires. 8 It is accepted by counsel for the Plaintiff that, on an application such as this, the Plaintiff bears a heavy burden. I approach the application on the basis that a very clear case is required before summary judgment is granted and that the power should be sparingly used: Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125 at 129 ; Webster v Lampard (1993) 177 CLR 598 at 602-3 and Cosmos E-Commerce Pty Limited v Bidwell Associates Pty Ltd [2005] NSWCA 81 at [37]-[38]."

37 The Plaintiff's application is primarily, as I apprehend it, an application for judgment on the admissions, rather than an application for summary judgment in the strict sense. The Defendant has never admitted that the amount claimed in the Plaintiff's invoices is correct, as indicated by its denial of the allegations in paragraphs 5(v) and 6 of the Statement of Claim. In my view, this indicates that there is a genuine dispute, not that the Defendant owes money to the Plaintiff, but rather about the amount of work done by the Plaintiff before the termination of the contract, and the amount which the Defendant owes to the Plaintiff as a result of such work.

38 It is apparent from the evidence, particularly the affidavit of Mr Nick Skulander dated 3 July 2009, paragraph 77, that the Defendant and his agents, of whom Mr Skulander was one, accepted that the work done by the Plaintiff and subject to the claim in these proceedings was not only done, but that Stage 2 of the work, as defined in the contract, was 65-70% complete. That admission establishes that the Defendant owed a substantial sum - exceeding $100,000 - to the Plaintiff. The Plaintiff is entitled to judgment on the admissions, though there is clearly a dispute about the extent to which the Plaintiff had completed the work.

39 Even though, on one view of the pleadings, the contract might be read as entitling the Plaintiff to any sum, in respect of which it had rendered an invoice to the Defendant, that is not clear. It is a matter which might be contended in a full hearing, but in view of the principles governing summary judgment, I have concluded that it is a matter which ought to be litigated in full at this stage, rather than for me to decide an issue simply on the basis of the document pleaded. Another advantage of not giving summary judgment may be that, if the Defendant genuinely believes that he has a counterclaim against the Plaintiff, it would be open to him to file a counterclaim along the lines that he proposes.

40 The Plaintiff is not at this stage entitled to summary judgment for the full amount claimed. However, there are two matters upon which I have concluded that the Plaintiff is entitled to judgment at this stage in the proceedings.

41 The position is different both in respect of the claim for compensation for the dishonoured cheque, and for judgment for an unliquidated sum on the admissions.

42 The relevant provisions of the Cheques Act 1986 (Cth) read as follow:

27 Drawing or indorsement may be shown to be ineffective

Subject to section 28, the delivery of a cheque by the drawer or an indorser may be shown to have been conditional, or for a special purpose only, and not in order to issue the cheque or transfer it by negotiation, as the case may be.

(1) The drawer of a cheque shall: (a) as regards a holder in due course--be conclusively presumed to have made an effective delivery of the cheque so as to complete the drawer's contract on the cheque; and (b) as regards a ho ld er who is not a holder in due course--be presumed, unless the contrary is proved, to have made an effective delivery of the cheque so as to complete the drawer's contract on the cheque.

29 Delivery of cheque payable to bearer Where the holder of a cheque payable to bearer delivers the cheque to another person (whether or not the holder also indorses the cheque), the delivery of the cheque is effective to transfer the cheque by negotiation, whether or not the holder delivered the cheque to the other person in order to transfer the cheque by negotiation.

(1) Valuable consideration for a cheque may be constituted by: (a) any consideration sufficient to support a simple contract; or (b) an antecedent debt or liability.

(2) An antecedent debt or liability may constitute valuable consideration for a cheque whether or not the cheque is post dated.

The drawer and each indorser of a cheque shall, unless the contrary is proved, be presumed to have received value for the cheque.

37 Holder taking cheque for which value has been given

Where value has at any time been given for a cheque, the holder shall, as regards the drawer and indorsers who became indorsers before that time, be conclusively presumed to have taken the cheque for value.

50 Holder in due course defined (1) The holder of a cheque is a holder in due course if: (a) the cheque was transferred by negotiation to the holder and, at the time when the holder took the cheque, the cheque: (i) was complete and regular on the face of it; (ii) was not a stale cheque; and (iii) did not bear a crossing of the kind referred to in paragraph 53(1)(b); and (b) the holder took the cheque: (i) in good faith; (ii) for value ; and (iii) without notice: (A) of any dishonour of the cheque; or (B) of any defect in the title of the person who transferred the cheque to the holder or that the person who transferred the cheque to the holder had no title to the cheque. (2) Without limiting the generality of paragraph (1)(b), the holder of a cheque shall, for the purposes of that paragraph, be deemed to have taken the cheque with notice of a defect in the title of the person who transferred the cheque to the holder if the holder took the cheque with notice that the person transferred the cheque to the holder in breach of faith or under circumstances amounting to a fraud.

70 Drawer and indorsers of cheque liable whether or not given notice of dishonour

A person who is the drawer or an indorser of a cheque that has been dishonoured is liable on the cheque whether or not the person is given notice by any person of the dishonour.

Subject to subsection 17(1), section 59 and subsection 60(1), the drawer of a cheque, by drawing the cheque, undertakes: (a) that, on due presentment for payment, the cheque will be paid according to its tenor as drawn; and (b) that: (i) if the cheque is dishonoured when duly presented for payment; or (ii) if presentment of the cheque for payment is dispensed with by virtue of paragraph 59(a) or (aa) and the cheque is unpaid after its date has arrived;

the drawer will compensate the holder or an indorser who is compelled to pay the cheque.

The drawer of a cheque, by issuing the cheque, is estopped from denying to a holder in due course that the cheque was, at the time when the cheque was issued, a valid cheque.

43 For the purposes of this argument, I find that the Plaintiff was a holder in due course of the cheque because of the operation of s 50(b). The Plaintiff took the cheque in good faith. That is not disputed. It took for value, because it is admitted both in the Defence, and more particularly in the affidavit of the Defendant's agent, Mr Skulander, that the Plainitiff did architectural work for the Defendant; and it took the cheque without notice of any dishonour of the cheque or of any defect in the title of the person who transferred the cheque to the Defendant. That being the case, the provisions of the Cheques Act, which are set out above, operate to preclude the Defendant from arguing that it is not liable to the Plaintiff on the cheque. The defendant has referred me to a decision of the Federal Court of Australia, Spalla and others v St George Wholesale Finance Pty Ltd (1999) 95 FCR 359. That case was concerned with the construction of the Cheques Act, s 27. It is an authority for the proposition that a cheque can be delivered in escrow. The defendant contends that that is what happened in this case, but in view of its deemed admission through failure to respond to the Notice to Admit Facts, it cannot be heard in this case to adduce the evidence that the cheque was delivered in escrow. The Plaintiff relies on s 27, but my findings in relation to the Defendant's deemed admissions by reason of its failure to dispute the Notice to Admit Facts, and my ruling that that admission cannot be withdrawn at this stage, mean that the Plaintiff cannot rely on s 27. In any event, the Defendant did not give evidence and was not cross-examined, and in view of the lateness of the service of his affidavit in which he claims to have delivered the cheque conditionally, I would not be inclined to accept it.

44 Where a person draws a cheque and delivers it to the payee or to bearer, he or she, in effect, subjects himself or herself to virtually strict or absolute liability, to ensure that the payee, bearer, or at least any holder in due course, receives the amount shown in the cheque. That is the effect of the sections of the Cheques Act set out above. That is the case here, and for that reason the Plaintiff is entitled forthwith to judgment for the amount of the cheque plus interest from the date of dishonour.

45 The affidavits of the Defendant's solicitor, Mr O'Brien, show that the Defendant's failure to respond to the Notice to Admit Facts was due to his oversight. In the circumstances, there was no reason why the Defendant or the Plaintiff should have to bear the costs of the consequences of this oversight. I propose to order that he show cause why he should not be made personally liable for the costs of the two motions that I am currently deciding.

46 I make the following orders: 1. Verdict and Judgment on the admissions for the Plaintiff in the sum of $100,000 plus interest from 10 March 2008 to date of judgment. 2. Judgment for the Plaintiff for such amount as is found after assessment to be owing to the Plaintiff by the Defendant on the contract, whose terms the Defendant has admitted. 3. The matter be listed before the Judicial Register on 30 July 2009 to fix a date for the assessment of the amounts owing to the Plaintiff.

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