ACN 105 753 731 Pty Ltd v Muscrete Constructions Pty Ltd
[2012] VCC 1596
•10 October 2012 (revised)
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted |
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
BUILDING CASES DIVISION
Case No. CI-12-03994
| ACN 105 753 731 PTY LTD | Plaintiff |
| v | |
| MUSCRETE CONSTRUCTIONS PTY LTD (ACN 091 771 238) | Defendant |
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JUDGE: | HIS HONOUR JUDGE GINNANE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 October 2012 | |
DATE OF JUDGMENT: | 10 October 2012 (revised) | |
CASE MAY BE CITED AS: | ACN 105 753 731 Pty Ltd v Muscrete Constructions Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 1596 | |
REASONS FOR JUDGMENT
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BUILDING CASE - alleged breaches of concreting contract – previous proceedings where claim not made - defendant’s summary judgment application - Anshun estoppel defence – summary judgment refused - Civil Procedure Act 2010 ss62,64
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Harris | A’Beckett Lawyers |
| For the Defendant | Mr M Albert | Bruce K Judge & Co |
HIS HONOUR:
1 The defendant (Muscrete) seeks the summary dismissal of the proceeding in reliance on the principles set out in Port of Melbourne Authority v Anshun Pty Ltd[1]. It argues that the plaintiff’s claim has no real prospect of success within the meaning of s62 of the Civil Procedure Act 2010.
[1](1981) 147 CLR 589
2 The plaintiff’s claim, as pleaded in its Statement of Claim, arises from an agreement with Muscrete to provide concreting works for the construction of a building at Craigieburn. It contends that in breach of the contract, Muscrete did not carry out those works with due care and skill, and that Muscrete did not pay for all of the contractors that agreed to perform the task, as it was required to do under the contract. Various items of damage are claimed: cost of rectification, $56,000; $6,677 for works undertaken by a Mr Demetriades; a sum of $2,640 paid to Greenbrook Excavations; and for consequential losses including, those arising from the failure to be able to lease the premises, which are claimed in the sum of approximately $45,740.
3 The matter has a chequered history which has led to the plaintiff seeking to raise issues, similar to the present claim in the Magistrates’ Court, including by attempts to set aside orders after they were made, briefly on judicial review to the Supreme Court and in the Victorian Civil and Administrative Tribunal. The history of the matter set out in affidavits of the two solicitors, Mr Judge for Muscrete and Ms Nomikos for the plaintiff, is as follows.
4 On 4 August 2011, Muscrete commenced a proceeding in the Magistrates’ Court for partially unpaid invoices for the concreting work in the sum of $27,000. The plaintiff filed a defence, but while it foreshadowed filing a counterclaim, it never did.
5 On 12 September 2011, Muscrete requested particulars of the present plaintiff’s defence in the Magistrates’ Court proceeding. The plaintiff did not provide those particulars, and as a result, on 11 April 2012, a Magistrate struck out the plaintiff’s defence. On 12 April, the plaintiff sought to have the order of the previous day varied or set aside and the proceedings stayed. On 17 April, that application was refused. The defence, having been struck out, on 19 April 2012 Muscrete entered judgment for the amount of its claim.
6 On 20 April, the present plaintiff sought for a second time in the Magistrates’ Court to have the order of 11 April 2012 varied, or set aside and its defence reinstated. On 27 April, a Magistrate refused that second application.
7 While all that was going on, on 5 April, the present plaintiff commenced proceeding in VCAT against Muscrete in respect of the same contract as had been the subject of the Magistrates’ Court proceedings. An incorrect view was formed by those advising the plaintiff that VCAT had exclusive jurisdiction in respect of the proceeding. On 12 April 2012, a Deputy President of VCAT made an order stating:
“This VCAT proceeding ought not proceed until it is clear that the above Court proceeding has been stayed.”
8 On 6 June 2012, a Deputy President of VCAT, struck out the application. There is some dispute as to whether the Deputy President reserved a right of reinstatement, but I do not consider that anything turns on that.
9 The plaintiff also commended an application in the Supreme Court to judicially review the order of the Magistrates’ Court of 11 April, but that application was withdrawn thirteen days after it was commenced and Muscrete did not file an appearance or any other document in that proceeding.
10 This labyrinth of proceedings is the responsibility of the current plaintiff and there is no evidence that Muscrete has been responsible for the diverse steps that have been taken by the plaintiff.
11 The sole question I have to determine is whether Muscrete has established that the plaintiff’s claim has no real prospect of success. That question is to be determined by determining whether Muscrete’s reliance on the Anshun defence means that the plaintiff claim has no real prospects of success.
12 It is important to note, that Muscrete made no argument that this proceeding is an abuse of process. There was no material before the Court showing particular prejudice or loss incurred by these multiple proceedings. Some prejudice is self evident in Muscrete being subjected to the various proceedings. At least, a significant part of the judgment debt owing by the plaintiff to Muscrete, as a result of the Magistrates’ Court order, has been paid. The determination of whether a proceeding is an abuse of process ultimately turn on the requirements of justice require. However, I repeat that is not the question I am asked to determine.
13 The principle discussed in Anshun is in the nature of an issue estoppel. In their joint judgment, Gibbs CJ, Mason and Aickin JJ referred to the following statement in Henderson v Henderson[2]:
“where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”
[2](1843) 3 Hare, at p 115; 67 ER at p319
14 Counsel for Muscrete made submissions pointing out the overlap between the issues sought to be raised in the proceeding in this Court and the issues raised in the Magistrates’ Court and VCAT. They included the allegation of lack of due skill, the allegation concerning a mistaken payment, issues concerning costs of rectification works and loss of rental revenue. This overlap was not really disputed. Muscrete argued that those issues should have been raised in the Magistrates’ Court and perhaps still could be raised, either by separate proceedings in the Magistrates’ Court, or by a third attempt to set aside the Magistrates’ Court orders, or in VCAT in fresh proceedings, or by exercising the right of reinstatement that Muscrete said existed.
15 Counsel for Muscrete also relied on the fact that the application to set aside the Magistrates’ Court proceedings had been refused twice and had been the subject of an application for judicial review in the Supreme Court, which in turn had been withdrawn. Counsel relied on the provisions of ss7 and 8 of the Civil Procedure Act, which state the overarching purposes of just efficient, timely and cost effective resolution of disputes and the Court’s obligation to give effect to those purposes. He referred to the fact that the certificates required under the Act had not been served, although they had been filed. I would not dismiss the plaintiff’s proceeding just on that ground.
16 Muscrete also relied on the argument that if a Court did not uphold its application, the Court would be impugning or subverting the effect of the Magistrates’ Court and VCAT orders.
Consideration of submissions
17 In applying the Anshun principle the facts of the particular case will be decisive.
18 The issue here is whether the Anshun principle apply where there has been a default judgment for failure to comply with procedural orders. The authorities relied on by the plaintiff establish that there is a reasonable argument that they do not. Those authorities were the decision of the Queensland Court of Appeal in Mango Boulevard Pty Ltd v Spencer[3] and the judgment of Jessup J in Thirteenth Court Pty Ltd v State.[4] In the latter case, Jessup J referred specifically to a default judgement on account of default in the provision of particulars, as a case which does not give rise to an Anshun estoppel.[5]
[3][2010] QCA 207
[4](2006) 232 ALR 491
[5](Supra) [33]
19 In the Mango Boulevard Case, Fraser JA stated:
“The same reasoning appears to me to be equally applicable in relation to a judgment given for non-compliance with obligations to disclose documents under procedural rules or pursuant to an order for disclosure. The two different forms of orders have a common foundation in conduct by a party which is so procedurally deficient as to justify summary judgment termination of the proceeding without regard to the merits. Plainly such judgments do not involve nay actual determination on the merits and I see no reasonable basis for treating them as determining the merits of any issue. Such judgments should be distinguished from default judgments which have been treated as giving rise to a res judicata or an issue estoppel, such as a judgement based upon default of pleading (which may be explained on the ground that the party in default has or should be taken to have admitted the allegations) and a consent judgement based on a compromise (where the parties should be held to their compromise).”[6]
[6](Supra) [116]
20 In this case, the default judgment following the striking out of a defence caused by the failure to provide particulars was followed by two unsuccessful applications to set that order aside. However no counterclaim was then on foot, even though one may have been foreshadowed during the hearing of the application.
21 I do not consider that the Magistrates’ Court’s orders would be subverted unless Muscrete’s application is upheld.
22 The VCAT proceedings raise different issues because they sought to raise claims very similar to those raised in this proceeding. It is not apparent from the order why VCAT considered that the proceeding should be struck out. I was informed that it was a short hearing but the reasons for the order do not appear. However, again, I do not consider a refusal of the defendant’s application would subvert VCAT’s order.
23 The principle in Anshun has usually been applied where there has been an adjudication, or determination on the merits, or a compromise of issues in the proceeding, and a party then seeks to raise issues which could have been previously raised before that adjudication, or determination. Muscrete obtained a default judgment in the Magistrates’ Court for the amounts owing for unpaid invoices. The present plaintiff now seeks to litigate breaches of the contract, under which Muscrete performed the work for which it obtained its default judgement. The Magistrates’ Court proceeding, or the default judgment obtained, did not involve a determination, after a hearing on the merits, of the claim that the plaintiff now seeks to bring in this Court.
24 As I have previously stated, for the purposes of the present application, all I am permitted to decide is whether Muscrete has proved that the plaintiff’s claim has no real prospects of success. I do not consider that Muscrete has established that position.
25 In event, under s64 of the Civil Procedure Act, the Court may allow the case to go to trial if it considers that the dispute is of such a nature that only a full hearing on the merits is appropriate do so. I do consider that this is such a case. I do not consider that the Anshun argument is so clear that it should prevent the proceeding going to trial.
26 I dismiss Muscrete’s summons.
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