Total Gas Care Pty Ltd v Barry Bros Specialised Services Pty Ltd [2012] VSCA 303

FRESH EVIDENCE - Appeal from summary judgment - Whether fresh evidence should be allowed - Doherty v Murphy [1996] VicRp 86; [1996] 2 VR 553 applied.

1 I will ask Hargrave AJA to deliver the first judgment in this matter.

2 This application arises out of a dispute relating to the sale of a drain cleaning truck by the respondent to the applicant. The truck was sold as long ago as 2004, and the applicant experienced problems with it from the outset. Further, the applicant alleges that these problems were exacerbated by the failure of the respondent to provide it with sufficient work requiring the use of the truck, under a services agreement.

3 The applicant sued the respondent in the County Court, by generally endorsed writ issued on 28 October 2010. After a delay of more than a year, and having obtained the respondent's consent for late service, the applicant served its statement of claim in the County Court proceeding. In the statement of claim, the applicant alleged that the truck was unfit for its purpose or was not of merchantable quality, that the respondent breached the services agreement by failing to provide the agreed minimum amount of work to the applicant, and alleged false, misleading or deceptive conduct.

4 By summons dated 31 July 2012 in the County Court proceeding, the respondent applied for summary judgment dismissing the applicant's claim or, alternatively, an order striking out the statement of claim. In response, the applicant put forward a proposed amended statement of claim.

5 In the first instance, the judge below considered whether the statement of claim should be struck out. He ordered that it be struck out, and granted leave to re-plead.

6 Pursuant to the leave granted, on 20 September 2012, the applicant filed an amended statement of claim. On the basis of that pleading, a hearing was then held on 26 September 2012, to consider the summary judgment application.

7 For the purposes of the summary judgment hearing, the parties agreed that the delivery date for the truck had been 22 October 2004. That date was more than six years prior to the commencement of the County Court proceeding, by four days. There was a dispute at the hearing, however, as to when the parties entered into the contract of sale for the truck. The applicant had pleaded that the contract of sale was not completed and entered into until 1 November 2004. If that was correct, the proceeding was commenced two days prior to the expiration of the six year limitation period. As to the claim made under the services agreement, the applicant claimed that no breach could have occurred until, at the earliest, work was first allocated to it by the respondent under that agreement, on 5 November 2004.

8 The issue before the judge was whether or not the applicant's claim, as pleaded, had a real prospect of success.[1] The respondent argued that it did not, because, although the contract of sale was pleaded as having been completed and entered into on 1 November 2004, the parties agreed that the truck had been delivered on 22 October 2004 and the other particulars of the contract all related to dates prior to 28 October 2004, and thus more than six years before the commencement of the proceeding on 28 October 2010.

9 The judge below gave brief ex tempore reasons for accepting the respondent's contentions. He gave summary judgment for the respondent, and dismissed all of the applicant's claims. The judge's reasons focussed on the agreement as to the delivery date and the effect that had on the limitation defence, especially to the claim under the contract of sale that the truck was defective.

10 The parties accept that, notwithstanding that the judge's orders had the effect of terminating the proceeding, they were nevertheless interlocutory in nature and leave to appeal was required by s 74(2D) of the County Court Act. In order to obtain leave to appeal, the applicant must satisfy the Court that the decision which it seeks to appeal was attended with sufficient doubt to warrant it being reconsidered on appeal and, in addition, that the decision will cause it substantial injustice if it is allowed to stand.[2]

11 Contrary to the common ground adopted by the parties for the purposes of the summary judgment hearing, that the truck had been delivered to the applicant on 22 October 2004, the applicant seeks to rely upon fresh evidence constituted by two affidavits.

12 The first affidavit was sworn by Ian Pewtress (the director and secretary of the applicant). He deposes that the truck was not, contrary to the agreed position before the County Court judge, delivered on 22 October 2004; but was not completed or delivered until 1 November 2004. In summary, Mr Pewtress has sworn that he collected and drove the truck on 22 October 2004 in an incomplete state. It was not then fitted out in accordance with the agreement between the parties, but was at that time 'a bare shell'. He swore that, over the following week, the truck was in the respondent's possession and underwent further work and installation of the necessary equipment to comply with the contract of sale; and the truck was finally delivered on 1 November 2004, at which time the respondent raised a tax invoice for the first instalment of the purchase price.

13 If this evidence had been before the judge below, I have no doubt that the summary judgment application would have been dismissed, at least insofar as it related to the alleged defects in the truck when delivered. I will return later to the issues concerning the claims made under the services agreement and the claims based on false or misleading conduct under the Trade Practices Act.

14 The first issue, therefore, is whether or not the applicant should have leave to rely upon the further evidence. That requires the Court to give some consideration to the reason why the evidence was not placed before the County Court judge. On that issue, the applicant seeks to rely upon a second affidavit sworn by its solicitor, Gregory Lay, deposing that the applicant's instructions to him and junior counsel who drew the statement of claim 'were not clarified or elaborated upon with any real precision' and that, in the circumstances, he 'did not appreciate the legal significance of [Mr] Pewtress's instructions concerning the events surrounding his subsequent dealings after 22 October 2004 involving [the truck].' As a result of obtaining further instructions after the summary judgment application had been determined adversely to the applicant, Mr Lay has sworn that he now appreciates that he was 'working under a misapprehension concerning the true facts and circumstances' relating to the delivery of the truck to the applicant.

15 It was submitted on behalf of the respondent that this Court should refuse the applicant leave to rely upon Mr Pewtress's affidavit or those portions of Mr Lay's affidavit to which I have referred. The respondent contends that this evidence contradicts: (1) the applicant's case alleged in its amended statement of claim; (2) a previous affidavit sworn by Mr Pewtress as to the delivery date for the truck; and (3) the basis upon which the applicant conducted its defence of the summary judgment application below. Although accepting that this Court may more readily grant leave to rely on fresh evidence in an appeal from a summary determination of a proceeding,[3] the respondent contends that this is an extraordinary case, involving a change of position on a fundamental factual matter which has been alleged for a two year period. In that period, a number of iterations of the statement of claim were put forward on the basis of the delivery date being 22 October 2004, and Mr Pewtress committed to that date in sworn evidence.

16 In Doherty v Murphy,[4] the Appeal Division of this Court (Tadgell, Nathan and Hansen JJ) considered an appeal against order for summary judgement in favour of a plaintiff. On the hearing of the appeal, the defendants sought to rely upon arguments not raised below and, if that were not successful, fresh evidence which was not relied on below. In the result, leave was given to rely upon the new arguments which had not been put below, and the appeal was allowed on that ground. However, two of the judges had something to say about an appeal court's approach to the reception of fresh evidence on an appeal from a summary judgment.

17 The principal judgment on this issue was given by Hansen J. After referring to the principles to be applied in determining whether to admit fresh evidence on appeal,[5] Hansen J referred with approval to the approach adopted by the New South Wales Court of Appeal in Wickstead v Browne.[6] In that case, Handley and Cripps JJA, Kirby P agreeing, allowed further evidence on an appeal by a plaintiff whose claim had been summarily dismissed by the judge below, on the ground that the judgment appealed from was not given after a trial on the merits.[7] In this regard, Hansen J stated:

In my opinion, without doubting the sense of the approach expressed in Coulton in an appeal from a judgment after a trial, the court should not treat the discretion to receive further evidence in an appeal from a summary judgment as limited by that approach, as the relevant considerations must be different. In my opinion, the discretion should be exercised sensitive to the fact that the affected party has not had the benefit of a trial and the opportunity thus afforded to investigate, and have a determination upon, the facts and the law.[8]

18 Nathan J expressly approved this statement by Hansen J.[9] Tadgell J did not think it was necessary to consider the issue, as he agreed that the new arguments should be permitted on appeal and the appeal should be allowed on the basis of those arguments.

19 In my opinion, this Court should grant leave to the applicant to rely upon the fresh evidence. I accept the explanation given by Mr Lay as to his failure to obtain full and precise instructions as to the delivery date of the truck. I accept also, that his failure to obtain full instructions, was the result of his failure to appreciate the legal significance of the delivery date for the purposes of the Limitation of Actions Act. It would in my opinion be unfair to prevent the applicant from relying upon Mr Pewtress's fresh evidence, in circumstances where there has not been a full trial but only a summary judgment application. Any prejudice to the respondent can be dealt with by appropriate costs orders.

20 Leave having been granted to rely upon the fresh evidence, it is obvious that the decision appealed from is attended by sufficient doubt to justify granting leave to appeal, and that the applicant will suffer serious prejudice if the judgment appealed from is allowed to stand in respect of the claim that the truck was defective. If the fresh evidence is given and accepted at trial, the limitation defence could not succeed. In the event that the Court determined that leave to appeal should be granted on any ground, the parties joined in a request to the Court that it proceed to determine the appeal forthwith, so as to avoid unnecessary cost. We will do so. Accordingly, insofar as the appeal relates to the dismissal of the claims based on defects in the truck, it will be allowed.

21 I turn to consider the other claims. Counsel for the respondent rightly acknowledged that those claims, insofar as they are being pursued, fall away on the basis of the fresh evidence. They were, in any event, in my view, triable issues and ought not to have been the subject of final judgment.

22 This case shows the dangers of determining limitation of actions questions on summary judgment applications. In Wardley Australia Ltd & Anor v The State of Western Australia,[10] the High Court (Mason CJ, Dawson, Gaudron and McHugh JJ) said:

We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.[11]

23 For the reasons given, I would grant leave to appeal and would allow the appeal. The judgment given below on 26 September 2012 should be set aside and, in lieu thereof, the respondent's summary judgment application should be dismissed. I would hear the parties as to the costs below and before this Court.

24 I note that the applicant now has the benefit of senior counsel representing it and, with that benefit, has proposed a draft further amended statement of claim. The further amended pleading reflects the substance of the fresh evidence to which I have referred, and makes other amendments. Some unsustainable claims have been deleted. Subject to what counsel for the respondent may say, for the purposes of limiting costs and expediting this case towards trial I would grant leave to the applicant to file a further amended statement of claim in the form of the draft put forward and order the respondent to file and serve its defence and counterclaim by a fixed date.

25 Having regard to the antiquity of the issues in this case, the County Court should take all steps reasonably necessary to have it fixed for hearing at the earliest available time.

28 Leave is granted to rely on the affidavits referred to in the summons. Leave to appeal is granted.

29 We order that the appeal is to be heard forthwith and allowed.

30 Order that the orders of his Honour Judge Lacava made 26 September 2012 be set aside and in lieu thereof there be an order that the application for summary judgment is dismissed.

31 In addition to the orders that we previously pronounced, we shall also order that the plaintiff/applicant has leave to file and serve a further amended statement of claim in the form of the draft before the Court today by 4:00 pm on 11 December 2012.

32 We will direct that the respondent/defendant file and serve any amended defence and counterclaim by 4:00 pm on Friday 1 February 2013.

33 The material relied upon before us, and the case put, constitutes a significant departure from the position adopted prior to this application and appeal on the critical issue of the truck's delivery date. If the position now adopted had been advanced earlier, the course of the litigation may well have been entirely different. The application for summary judgment was brought and determined on a factual basis which the plaintiff/applicant accepted and positively advanced and from which it has now resiled. In those circumstances we think it should pay the costs of this application/appeal and the application in the County Court on a solicitor-client basis.

34 We order that the costs of the application before Judge Lacava and on this appeal be paid by the plaintiff/applicant on a solicitor/client basis.

[1] Civil Procedure Act 2010, s 62.

[2] Niemann v Electronic Industries [1978] VicRp 44; [1978] VR 431, 441-2.

[3] Doherty v Murphy [1996] VicRp 86; [1996] 2 VR 553.

[5] Reference was made to Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1, 7-8.

[6] (1992) 30 NSWLR 1.

[8] [1996] VicRp 86; [1996] 2 VR 553, 563.

[10] [1992] HCA 55; (1992) 175 CLR 514.