Cairns v Freeman

[2008] NSWSC 792

CITATION:	Cairns v Freeman & ors [2008] NSWSC 792
HEARING DATE(S):	6 June 2008
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	6 June 2008
DECISION:	Appeal allowed, orders of Associate Judge for summary dismissal set aside; part of pleading struck out with leave to replead; third defendant to pay costs of proceedings before Associate Judge. Costs of appeal to be plaintiff’s costs in the proceedings.
CATCHWORDS:	COSTS – default application to strike out defence for default of directions to serve affidavits – where default since remedied – application premature - PROCEDURE – APPEALS – appeal from decision of Associate Judge summarily dismissing claim – whether the Associate Judge erred in acceding to third defendant's application for dismissal on a ground not advanced by the third defendant – whether the Associate Judge erred in finding that the statement of claim did not plead a cause of action – whether the Associate Judge exceeded the assistance permitted to be given to an unrepresented litigant by raising an argument not advanced by the third defendant – whether the Associate Judge erred by refusing the plaintiff an opportunity to replead a cause of action where the third defendant allegedly did not oppose such a course – whether the Associate Judge of his own motion was entitled to decide whether the pleadings disclosed a reasonable cause of action – whether the Associate Judge erred in not acting on an assertion of fact made by counsel from the bar table in the absence of admitted evidence – whether the Associate Judge erred in finding that there was no evidence that demonstrated a reasonable prospect of success – where plaintiff is an executrix and does not possess relevant evidence herself – what evidence required to disclose a reasonable prospect of success – where the Associate Judge re-opened the trial pursuant Uniform Civil Procedure Rules, r. 36.16, to consider further evidence of the plaintiff – whether the Associate Judge erred in rejecting the tender of an affidavit file in another proceeding - COSTS – where plaintiff succeeded on only one of eight grounds of appeal, and plaintiff’s case salvaged on re-opening.
LEGISLATION CITED:	(NSW) Supreme Court Act 1970, s 75A (NSW) Uniform Civil Procedure Rules, rr 13.4, 14.28, 30.16, 31.9, 36.16, 49.4
CATEGORY:	Principal judgment
CASES CITED:	House v The King (1936) 55 CLR 499 Spencer v Australian Capital Territory [2007] NSWSC 303; (2007) 13 BPR 24,307 Wickstead v Browne (1992) 30 NSWLR 1
PARTIES:	Suzanne Rose Cairns (plaintiff) Glenn Arthur Freeman (first defendant) Michael Charles Unicomb (second defendant) Warren Donald Turner (third defendant)
FILE NUMBER(S):	SC 5237/06
COUNSEL:	Mr G Curtin (plaintiff) Mr M Unicomb (in person) Mr W Turner (in person)
SOLICITORS:	Mullane & Lindsay (plaintiff)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Friday, 6 June 2008

5237/06 Suzanne Rose Cairns v Glenn Arthur Freeman & ors

JUDGMENT (ex tempore)

1 HIS HONOUR: Before me are two motions filed by the plaintiff Suzanne Rose Cairns: one by which she seeks an order that the defence of the second defendant Michael Charles Unicomb be struck out; and the second by which she appeals from an Associate Judge’s order that her proceedings as against the third defendant Warren Donald Turner be summarily dismissed.

The motion to strike out the defence

2 I will deal first with the motion filed on 24 April 2008, by which Ms Cairns sought an order that the defence filed by Mr Unicomb on 25 May 2007 be struck out. The basis upon which that motion was brought was that Mr Unicomb was in default of a direction that he serve the affidavits upon which he intended to rely. On 2 June 2008, Mr Unicomb swore and subsequently served and lodged with my Associate an affidavit upon which he intends to rely in the proceedings. I grant leave to the second defendant to file in Court the affidavit of Michael Charles Unicomb, sworn 2 June 2008. In the light of the service of that affidavit, Ms Cairns no longer presses for the relief claimed in the motion, save for costs.

3 Mr Unicomb was first directed to serve affidavits by McLaughlin AsJ who, when giving judgment on the summary dismissal applications on 26 February 2008, directed that Mr Unicomb serve any affidavits upon which he intended to rely by 15 April 2008. Mr Unicomb failed to comply with that direction. On 1 May 2008, the Registrar ordered Mr Unicomb to serve affidavits upon which he intended to rely by 15 May 2008. Mr Unicomb did not comply with that direction. When the matter was listed before me on 27 May 2008, Mr Unicomb indicated that he was in the course of preparing an affidavit, and I directed that he serve any affidavits upon which he intended to rely by 2 June 2008. Although he may have been a day or two late, he substantially complied with that direction.

4 The motion was filed, as I have recorded, on 24 April 2008, only nine days after time expired for compliance with the original direction of McLaughlin AsJ, and before the Registrar had made his direction or I had made mine. The supporting affidavit of Robert James Lindsay dated 28 May 2008, which deposed that at the time of swearing that affidavit the second defendant had not served any evidence upon which he intended to rely, was sworn on 8 May 2008, after I had extended time for compliance to 2 June 2008 and before that time elapsed.

5 In my view, the motion was premature. There was no evidence that any warning was given of any intent to file a motion almost immediately if the affidavit was not punctually served, and had the motion been heard on its first return date on 1 May, there was no realistic prospect that the relief sought in it would then have been granted. The defence would not have been struck out nor default judgment granted, and at the highest, the case would have gone to trial on the basis that Mr Unicomb had no affidavit evidence to support what was in his defence; but even for that to have happened a more grievous default would have been required. The affidavit of 28 May 2008 seems rather superfluous, in circumstances that, by the time it was sworn, time for compliance had already been extended to a later date.

6 In those circumstances, I do not think the plaintiff is entitled to costs of the motion. There will be no order as to the costs of that motion, to the intent that each party bear its own costs.

The appeal

7 I turn now to the motion against the third defendant Mr Turner, on whose application McLaughlin AsJ summarily dismissed the claim brought against him by Ms Cairns, who sues in her capacity as executrix of the estate of her late husband Peter Cairns [Cairns v Freeman, Supreme Court of New South Wales, McLaughlin AsJ, 26 February 2008, unreported]. Ms Cairns appeals from the Associate Judge's decision.

8 Ms Cairns instituted proceedings against three defendants, Glen Arthur Freeman, Mr Unicomb and Mr Turner. In her Statement of Claim, she alleges that from some time before (but at least from) February 2000, Messrs Unicomb, Freeman and Turner or entities they owned or controlled were involved in the proposed purchase and development of land in South Australia known as the “Wirrina development”; that Mr Unicomb was Mr Cairns's accountant; that on 19 February 2003 Mr Cairns entered into an agreement with Mr Freeman to lend Mr Freeman $40,000, which was advanced on or about 19 February 2003; that on 17 March 2003, Mr Cairns entered into an agreement with Mr Freeman to lend $150,000, which was advanced to Mr Unicomb for Mr Freeman's use on or about that date; that on or about 17 April 2003, Mr Cairns agreed with Mr Unicomb or Mr Freeman to lend to one or other or both of them $18,000, which was paid to Mr Unicomb for his or their use on about that date; that on or about 18 May 2003, Mr Cairns agreed with Mr Unicomb and/or Mr Freeman to lend a further $40,000, which was advanced to them or one of them on or about that date; that on or about 29 May 2003, Mr Cairns agreed with Mr Unicomb and/or Mr Freeman to lend them $25,000, advanced on or about that date; and that on 23 December 2004, Mr Cairns agreed to borrow from Galadriel Lothlorien a sum of $200,000, and to lend to Mr Unicomb and/or Mr Turner the sum of $170,000 from the proceeds of the loan from Galadriel. She also alleges that shortly after 23 December 2004, the principal sum under the December 2004 loan was paid to Mr Unicomb or in accordance with his direction, for his use and/or the use of Mr Turner. Various complaints are then made against Mr Unicomb, of breach of fiduciary duty and contravention of the (NSW) Fair Trading Act 1987.

9 Against Mr Turner, paragraphs 100 to 106 of the Statement of Claim plead as follows:

100. On or about 23 December 2004, Peter Cairns entered into an oral loan agreement with Unicomb and/or Turner whereby Peter Cairns agreed to lend to Unicomb and/or Turner the principal sum of approximately $170,000 (the “December 2004 Loan”).
101. It was an implied term of the agreement that:
a) the loan would be repayable on demand;
b) interest would accrue on such monies as were from time to time payable to Galadriel.
102. On or about 23 December 2004 Peter Cairns executed a Direction to Pay, authorising Galadriel to pay the loan funds to Unicomb or as he directed.
103. Shortly thereafter, Unicomb directed Galadriel to pay the funds as he directed.
104. To the knowledge of Unicomb, the loan funds were to be used for the purposes of the Wirrina Development.
105. Neither Unicomb nor Turner has repaid the loan, nor the interest accruing thereon.
106. The plaintiff claims against Unicomb and/or Turner:
a) $377,500.00;
b) Interest on the amounts paid by the plaintiff to Galadriel from the date of payment;
c) costs.

10 In his defence, Mr Turner says that he knew nothing of the Wirrina Development before April 2003. He says that he was not a party to the Galadriel loan, and at all material times was unaware that it was made. He denies the allegations that he was party to any loan agreement about the $170,000 allegedly made on 23 December 2004, and says at all material times he was unaware that the loan was made, that "the December 2004 loan is entirely wrongly described and this is more particularly dealt with later in this defence", and that the funds were not obtained for his use or benefit and most were ultimately transferred to the benefit of Sunset Cove Development Pty Ltd.

11 In answer to paragraphs 100 to 106, he pleads as follows:

The Third Defendant does not plead to paragraphs 102 to 104 inclusive of the Plaintiff’s Statement of Claim as they do not appear to involve the Third Defendant and the Third Defendant denies Paragraphs 100, 101, 104 and 106 inclusive of the Plaintiff’s Statement of Claim and he says that:
a) the Third Defendant was not a party to the December 2004 Loan and at all material times was unaware that the Loan was made;
b) the December 2004 Loan is entirely wrongly described and he did not enter into any Agreement with Peter Cairns nor did he authorise the Second Defendant to act as his agent in any respect concerning any of the matter complained of by the Plaintiff or for the purpose of raising any funds to assist any company that he may have been associated with; and
c) the funds were not obtained for the use or benefit of the Third Defendant and most of the funds were ultimately transferred to the benefit of Sunset Cove Developments Pty Ltd.

12 Although Mr Freeman has been joined as a defendant, the Statement of Claim claims no relief against him. Why he is a party at all is a mystery. He is said to be bankrupt, and has not been served.

13 An application by Mr Unicomb for summary dismissal or striking out of the claim against him except in respect of the Galadriel loan was dismissed by the Associate Judge. However, in respect of the claim against Mr Turner, the Associate Judge concluded that the claim should be summarily dismissed. After reference to the principles applicable to such an application, including the relevant rules, his Honour said:

26. The situation concerning Mr Turner is, however, very different. I have already observed that the statement of claim refers to Mr Turner only in paragraph 100 and the succeeding paragraphs. The allegation against him appears to be being made in the alternative to an allegation against Mr Unicomb. The statement of claim itself does not provide any particulars of the alleged oral loan agreement between the deceased and Mr Turner. Apart from asserting that such agreement was entered into on or about 23 December 2004 it does not refer to the place of such agreement or the persons who were present thereat. It does not allege that the deceased carried out any terms of any such agreement with Mr Turner by lending to him the principal sum of approximately $170,000. It does not allege that there was a breach of the implied term of the agreement in respect to the repayment on demand. There is no allegation of any demand being made to Mr Turner. It is not alleged that Mr Turner received the benefit of any such loan or that the loan moneys ever came under his control.
27. Mr Turner has placed before the Court an affidavit in which he categorically denied any such involvement with the deceased, with whom he had had no more than two meetings in his life, once at a football game and on another occasion that date of which he cannot recall. He has sworn that he never had any discussions with the deceased or anyone on his behalf about borrowing any money from the deceased either for a specific project or for any other purpose. He has sworn he has never had any person act as his agent for a specific project or for any other purpose. He has also sworn in his affidavit of 18 October 2007 that he was not aware of any loan transaction between the deceased and Mr Unicomb or Mr Freeman, and that neither was he aware of a loan transaction between the deceased and the company Galadriel Pty Limited.
28. It seems to me not only that the statement of claim discloses no reasonable cause of action against Mr Turner but that there is no cause of action against Mr Turner which could in any way be supported on behalf of the plaintiff.

14 An appeal from an Associate Judge pursuant to (NSW) Uniform Civil Procedure Rules, r 49.4, (“UCPR”) is an appeal within (NSW) Supreme Court Act 1970, s 75A, and in order to succeed, the plaintiff must establish appellable error of fact or law in the judgment below. However, an appeal under s 75A is not limited to error of law, and while due deference will be afforded to any position of advantage enjoyed by the trial judge in observing witnesses, such considerations are hardly applicable here, since no oral evidence was taken before his Honour. What is challenged here is an exercise of discretion. To succeed in demonstrating error in the exercise of a discretion, it must be shown that the Associate Judge acted on a wrong principle, or manifestly misunderstood the facts or the law, or otherwise fell within the well-known principles in House v The King (1936) 55 CLR 499.

15 I endeavoured to summarise the law applicable to applications for summary dismissal and for the striking out of proceedings in Spencer v Australian Capital Territory [2007] NSWSC 303; (2007) 13 BPR 24,307, as follows (at [3] - [6]):

Summary Dismissal and Striking Out

[3] (NSW) Uniform Civil Procedure Rules 2005, r 13.4 authorises the Court, if it appears that the proceedings generally or in relation to any claim for relief in them are frivolous or vexatious, or disclose no reasonable cause of action, or are an abuse of the process of the court, to order that the proceedings be dismissed generally or in relation to that claim.

[4] The power summarily to dismiss proceedings is exercised only where the defect in the plaintiff’s claim is clearly established [ General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125]. Summary dismissal is inappropriate if there are serious questions of fact to be determined [ Spellson v George (1992) 26 NSWLR 666]. Where factual issues turn upon evidence likely to be in the possession of the defendant, that circumstance itself may be sufficient to refuse an application for summary dismissal; it may be reasonable to suppose that the evidence will become available in the course of the proceedings [ Wickstead v Browne (1992) 30 NSWLR 1]. While, as distinct from an examination of the pleadings alone, evidence may be adduced by an applicant/defendant to demonstrate that the plaintiff’s case is hopeless [ UCPR r 13.4(2); Willis v Earl Howe [1893] 2 Ch 545; Peter Kent Development Pty Ltd v ANZ Banking Group Ltd (Hunt J, 6 May 1980, unreported], such applications are still concerned more with the weakness of the plaintiff’s case, than the strength of the defendant’s: it is usually practically impossible for a defendant to show on such an application, by affirmative evidence, that a contention of the plaintiff must fail at trial.

[5] In the present application, the Defendants have not sought to prove that they have incontrovertible defences of fact. Rather, the arguments that the Defendants advance are that the Mr Spencer’s causes of action are doomed to fail, as a matter of law, upon examination of the case as pleaded in his statement of claim. In an application for summary dismissal of the nature of the current application – which depends upon asserted legal defects in the plaintiff’s claims, rather than on factual defects – the question is whether it is apparent that the case is absolutely hopeless, and that there is no possibility of the facts pleaded giving rise to a good cause of action; and that question must be decided on the footing that the plaintiff’s case is taken at its highest, and the facts asserted by the plaintiff in its statement of claim are to be taken to be true. The applicant for summary dismissal must accept the truth of all allegations in the opposing pleading, including the ranges of meaning that the assertions of fact in it are reasonably capable of bearing [ Penthouse Publications Ltd v McWilliam (NSWCA, 14 March 1991, unreported, BC9102223)]. An order for summary dismissal will be made on the examination of the pleadings only if it is apparent that the case is absolutely hopeless, or that there is no possibility of the facts pleaded giving rise to a good cause of action [ Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 90; Tampion v Anderson [1973] VR 321, 325]. On such an application, a liberal construction should be given to the opposing pleading, and in order to justify dismissal the offending pleading must be beyond saving by legitimate amendment [ Mutual Life and Citizens’ Assurance Co Ltd v Evatt (1970) 122 CLR 628, 639; Penthouse Publications Ltd v McWilliam; Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937, 942].
[6] Uniform Civil Procedure Rules r 14.28 provides that the court may order that the whole or any part of a pleading be struck out if the pleading discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or has a tendency to cause prejudice, embarrassment or delay in the proceedings, or is otherwise an abuse of the process of the court. Although there is an overlap between summary dismissal under r 13.4 and striking out under r 14.28, the former is more concerned with the tenability of the claim as a matter of substance, and the latter with the adequacy of the pleading as a matter of form. Where the pleading is inadequate or defective, but not beyond saving by legitimate amendment, the appropriate course is to strikeout the pleading with leave to replead [cf Republic of Peru v Peruvian Guano Co (1887) 36 Ch D 489, 496; Worthington & Co Ltd v Belton (1902) 18 TLR 438, 439; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536].

It was not suggested that, at least for present purposes, this was other than a sufficient summary.

16 I understand the reasoning of the Associate Judge to proceed along the following lines. First, the pleading was defective in failing sufficiently to disclose the requisite material facts to constitute a cause of action of the type sought to be advanced by Ms Cairns against Mr Turner [see [26] of his Honour's judgment]. Ordinarily, if a pleading were defective in that way, one would expect that leave to replead would be granted. However, his Honour proceeded to hold, secondly, by reference to the evidentiary material put before him, that not only did the Statement of Claim disclose no reasonable cause of action, but that there was no such reasonable cause of action, so that there was no utility in granting leave to replead [see [27] - [28]]. It is clear (from [29]) of his Honour's judgment that ultimately his Honour summarily dismissed the proceedings under UCPR, r 13.4, rather than merely striking out the pleading or part of it under UCPR, r 14.28.

17 The Notice of Motion advances eight grounds of appeal. The first ground is that his Honour erred in acceding to Mr Turner's application for dismissal, on a ground not advanced by Mr Turner. If this is intended to mean that his Honour granted relief on the basis of deficiencies in the pleadings rather than on the weakness of the plaintiff's case or the strength of the defendants' case, then I do not accept that that ground was not advanced by Mr Turner. The Notice of Motion before the primary judge plainly sought, as well as summary dismissal under r 13.4, a striking out of the pleading under r 14.28. The invocation of r 14.28 implicitly involves an attack on the sufficiency of the pleading. Merely to assert – as Ms Cairns’s written submissions before the Associate Judge did – that the plaintiff does not understand what other attack is made on its case or what other case is brought in support of the claim for dismissal or striking out does not mean that the ground is not one advanced. To my mind, any application by Mr Turner invoking r 14.28 would necessarily have required attention to be given to so much of the Statement of Claim as pleaded a case against him.

18 If the first ground of appeal is intended to refer to the ground under r 13.4 and the contention advanced in argument that it was implicit in the Associate Judge's conclusion that he found that there was no evidence in Ms Cairns's possession that could sustain a viable case against Mr Turner, then, again, I do not accept that this was a ground not advanced by Mr Turner. By invoking r 13.4 and filing an affidavit which asserted "I believe that the plaintiff does not have any valid claim or cause of action against me ... ", Mr Turner made abundantly clear that he was asserting that there was no tenable or viable case that Ms Cairns could advance against him. That is ultimately exactly what the Associate Judge found. Ground 1 therefore fails.

19 The second ground of appeal is that his Honour erred in finding that the Statement of Claim did not plead a cause of action against Mr Turner. My understanding, both from what his Honour recorded in the supplementary judgment delivered after the UCPR, r 36.16, application (to which I shall come) and indeed from what counsel indicated before me today, is that ultimately it was accepted on behalf of Ms Cairns that the Statement of Claim is deficient in its pleading of a cause of action against Mr Turner. In those circumstances, Ground 2 is untenable and fails.

20 The third ground is that his Honour erred, in exceeding the assistance permitted to be given to an unrepresented litigant, by raising an argument not advanced by Mr Turner, and in refusing an opportunity to replead without Mr Turner opposing that course. So far as raising an argument not advanced is concerned, this is directed to the conclusion reached by his Honour as to the sufficiency of the pleading. It is true that Mr Turner did not expressly raise the defect to which his Honour referred in the judgment. However, as I have said, the motion invoked r 14.28 which inevitably raised a question as to the sufficiency of the pleading and his Honour was unquestionably entitled to look at the pleading and see for himself whether or not it sufficiently disclosed a cause of action. Indeed, it is perfectly permissible for the Court of its own motion to strike out pleadings or parts of pleadings that are deficient. There was no overstepping of the mark whatsoever in the course that his Honour adopted in that respect.

21 As to refusing Ms Cairns an opportunity to replead without Mr Turner opposing such a course, it is implicit in Mr Turner's application in reliance on r 13.4 that there was opposition to an application for leave to replead. The basis of his Honour's decision to decline an opportunity to replead seems to have been that there was no arguable case, so that repleading would be futile. In those circumstances, Ground 3 fails.

22 The fourth ground of appeal is that in granting Mr Turner's application, his Honour, first, acted on an incorrect principle of law, namely, that no opportunity should be given to a plaintiff to replead a cause of action; secondly, failed to take into account a relevant consideration, namely, the absence of prejudice to Mr Turner; thirdly, failed to take into account the prejudice to Ms Cairns; and fourthly, failed to take into account that counsel for Ms Cairns had indicated (from the bar table) that Ms Cairns was in possession of evidence which in counsel's view would justify a pleading against Mr Turner. As to these matters: first, it is just wrong to assert that the Associate Judge acted on a principle that no opportunity should be given to a plaintiff to replead the cause of action: his Honour gave no such opportunity in this case because his Honour concluded that it would be futile to do so. In those circumstances, the questions of comparative prejudice to Mr Turner and Ms Cairns raised by the second and third points are immaterial. In any event, it would be prejudicial to Mr Turner to be compelled to remain a party to the litigation and incur the associated costs. But the fundamental point in this respect is that his Honour acted on the basis that there was no tenable cause of action. As to the fourth point – namely, that counsel had indicated that Ms Cairns was in possession of evidence which in counsel's view would justify a pleading – his Honour was correct to disregard any such indication. Applications, even for summary judgment, are decided on evidence, not on assertions from the bar table. If Ms Cairns was in possession of evidence that would justify a pleading against Mr Turner, then the proper course was for Ms Cairns to adduce that evidence before the Associate Judge. At least on the initial hearing, she did not do so. Ground 4 accordingly fails.

23 The fifth ground is that in granting Mr Turner's application the Associate Judge erred in finding, in the absence of evidence, that there was no evidence, before the Court or otherwise, that would support any cause of action against Mr Turner. His Honour made no express finding in those terms. What his Honour concluded in paragraph 29 was that there was no cause of action against Mr Turner that could in any way be supported on behalf of Ms Cairns. I take that to be no more and no less than a conclusion that the proceedings had no reasonable prospect of success or were, in the terminology used in some of the cases, "manifestly hopeless or doomed to fail".

24 As I have indicated in the passage cited from Spencer above, the power conferred by r 13.4 may be exercised where the plaintiff's case is so weak, or in rare cases where the defendant's case is so strong, that to permit the proceeding to go to trial would be futile. Relief in such a case is appropriate only where the defect in the plaintiff's case is clearly established. If factual issues turn upon evidence likely to be in the possession of the defendants, that circumstance may itself be sufficient to refuse an application for summary dismissal. It may be reasonable to suppose that evidence will become available in the course of the proceeding, either as a result of interlocutory procedures for discovery and interrogatories, or evidence called by co-defendants or third parties [see, for example, Wickstead v Browne (1992) 30 NSWLR 1].

25 In this case the position was that the Associate Judge had Mr Turner's evidence that he had had no commercial dealings with the deceased and that he had never authorised anyone to borrow funds or raise funds on his behalf from the deceased. There was before the Associate Judge nothing in response to that evidence of Mr Turner. Moreover, that evidence was unchallenged by cross-examination before the Associate Judge. Had the Associate Judge been referred to the correspondence about particulars, he would have seen that, in response to a request for the usual particulars of the alleged oral loan agreement, Ms Cairns’s answer was that she was unable to provide any further particulars at that stage.

26 In my view, Mr Turner's evidence in that context was sufficient at least to require Ms Cairns to point to some evidence to suggest that she had something to take to trial against Mr Turner. While it is true that, on an application for summary dismissal, it is not appropriate for the Court to embark on resolving contested questions of fact, a mere assertion in a pleading unsupported by any evidence does not of itself establish that there is a triable question of fact. Such an allegation in a pleading is a mere allegation, not evidence, nor even evidence that there will be some evidence to make it good. Such an allegation does not establish that there is a contested question of fact to go to trial, at least when it is confronted by sworn and unchallenged evidence of a defendant to the contrary.

27 I have not overlooked that this is a case in which Ms Cairns is an executrix and therefore not privy to the relevant conversations and is entirely dependent upon obtaining evidence elsewhere. In such circumstances, the plaintiff would only need to point to slight material to justify the matter going to trial. But it seems to me that, at least in the first part of the hearing before the Associate Judge, not even that happened. Accordingly, it seems to me that the Associate Judge was entitled to conclude at that stage – as his Honour it did at [29] - [32] – that the proceedings as against Mr Turner should be summarily dismissed. That conclusion would have only been fortified by the knowledge that Ms Cairns had indicated that she was unable to provide any better particulars of the alleged loan agreement.

28 Following his Honour coming to that conclusion and expressing it, an application was made on Ms Cairns's part under UCPR r 36.16 to vary or set aside the order. The effect of that application, if permitted – as it eventually was – was to re-open the hearing before the Associate Judge. The application was apparently made for the purpose of addressing the shortcomings in Ms Cairns's case, and establishing that there was, or would likely be, evidence capable of supporting her claim.

29 On the reopening, Ms Cairns tendered some documentary material. One of those documents was an authority signed by Mr Turner, apparently in his capacity as Director of Sunset Cove, and addressed to Mr Unicomb, dated 24 December 2004 (the date of the alleged December 2004 loan) and directing payment of funds from "Sunset Cove Development Pty Limited funds held in your trust account" to ICA Finance Group, Lifelong Planners and to Mr Unicomb's firm. That document was admitted by the Associate Judge on the rehearing. Also tendered on the rehearing was an affidavit of Mr Unicomb sworn on 25 November 2005 in earlier proceedings in this Court, in which Ms Cairns had sought preliminary discovery from Mr Unicomb and others. That affidavit contained Mr Unicomb’s response to allegations about various amounts in a schedule to the Summons in those proceedings, including the following:

$200,000 - The amount borrowed by Peter Cairns from Galadriel Lothlorian Pty Limited. Funds were borrowed by Warren Turner in an attempt to secure property at Wirrina Cove. This was a goodwill gesture by Peter Cairns made with his full knowledge of what risks that this involved and made with the intention of assisting the recovery of previously lost investments that he had made with Mr Freeman. The amount was paid at Peter Cairns' direction into my Practice's Trust A/c. Amounts totalling $20,000 were disbursed as instructed by Warren Turner and sanctioned by Peter Cairns and the balance was transferred to ICA Ltd in Sydney for payment to the MFS Group, which is the first mortgagee over the Wirrina Resort. I will say more about this investment later.

30 However, there does not appear to be anything later, at least in that affidavit. That affidavit was tendered, as I have said, before the Associate Judge on the re-opening. His Honour said:

[44] When the hearing resumed after the luncheon adjournment, counsel for the plaintiff sought to tender an affidavit, or part thereof, sworn by Mr Unicomb, the second defendant, not in the present proceedings but in other proceedings. It was at that point that I was alerted to the fact that I had been under the incorrect impression that the affidavit to which counsel had earlier made reference was an affidavit which had been filed in the present proceedings.
[45] Since that affidavit was not an affidavit of Mr Turner himself and since it had not been filed in the present proceedings, I did not admit the tender of that document or of the parts thereof upon which counsel wish to rely…

31 Ground 6 in the Notice of Appeal is that Associate Judge erred in rejecting the tender of that affidavit of Mr Unicomb. The transcript of the proceedings before his Honour reveals that his Honour rejected it on the basis that "it is not part of the evidence in the proceedings" [Transcript, 26 February 2008, p 15, line 3]. Implicit in his Honour's reasons – that the affidavit was not an affidavit of Mr Turner himself and had not been filed in the present proceedings – is that it was not admissible as an admission by Mr Turner and it would not ordinarily be admissible in proceedings in which it had not been filed (although UCPR, r 31.9, provides that an affidavit filed in other proceedings may be used in evidence if the Court grants leave for it to be used in relation to the proof of particular facts).

32 What had to be established by Ms Cairns before the Associate Judge was, not that she had filed evidence in the proceedings capable of sustaining her case, but that it could not be said that her case was manifestly doomed to failure. Such a proposition may be supported by pointing to material other than in the evidence already filed in the proceedings which suggests that by the trial, or even at the trial, evidence supportive of Ms Cairns's case might become available. As I have indicated with reference to Wickstead v Browne, it may be sufficient reason for declining an application for summary dismissal that relevant evidence may be in the possession of the defendants and become available at trial, even in the course of cross-examination. Mr Unicomb's affidavit indicated that there was a reason for thinking that evidence supportive of Ms Cairns’s case might become available before or at the trial, or even in the course of cross-examination of Mr Unicomb, or if necessary if he were called in Ms Cairns's case and leave granted to treat him as adverse under (NSW) Evidence Act 1995.

33 It therefore seems to me, with great respect, that the Associate Judge erred in declining to receive Mr Unicomb's affidavit as evidence tending to show that there was reason to suppose that evidence supportive of Ms Cairns's case might become available by the time of the trial. If Mr Unicomb's affidavit were tendered at the trial in the way it was on the application before the Associate Judge, it would have been inadmissible. But what had to be proved before the Associate Judge was that relevant evidence would be available at trial, not that Ms Cairns was currently in possession of or had filed the relevant evidence. In other words, the relevant issue before the Associate judge was not identical to that which would arise at the trial, and on the relevant issue Mr Unicomb’s affidavit was relevant and admissible.

34 Accordingly, Ground 6 of the Notice of Appeal is upheld. Upon the rehearing before me, in order to inform my re-exercise of the discretion, I admit it.

35 Ground 7 is that in rejecting the tender of Mr Unicomb's affidavit the Associate Judge took into account an irrelevant consideration, namely, his Honour's mistaken impression that the affidavit had been served in these proceedings. This ground seems to me to be entirely misconceived. His Honour acknowledged that his original impression was a mistaken one, and his Honour plainly ultimately proceeded on the correct basis that it had not been filed. It was on that correct assumption that his Honour erroneously rejected its reception. Accordingly, Ground 7 fails.

36 Ground 8 is that his Honour ought to have dismissed the application, or adjourned it to allow the plaintiff to replead. It adds nothing to the previous grounds.

37 There remains for me the question of what ought to be the outcome, Mr Unicomb's affidavit having now been admitted on the rehearing. It shows some basis for supposing that there will be evidence that Mr Turner was a borrower from the deceased. I appreciate that Mr Unicomb and Mr Turner have explanations and qualifications to offer about what is said in that affidavit, but any such explanation or qualification will only give rise to a factual contest, which can only be resolved at trial. As I have said, it is relevant that Ms Cairns sues as an executrix without personal knowledge of the relevant dealings and must resort to what she can extract on discovery, interrogatories and subpoena in order to establish much of her case. As I have also said, in that context it does not take much to show there is a sufficiently triable case to overcome a summary dismissal application, although such a conclusion says nothing as to the strength of the case. But it seems to me that, in the light of the material in Mr Unicomb's affidavit to which I have referred, it cannot be said that Ms Cairns's case is manifestly untenable.

38 Accordingly, the application for summary dismissal ought to be dismissed.

39 As his Honour summarily dismissed the proceedings, it was unnecessary for his Honour to make any order striking out the pleading in whole or in part. Some of the defects to which his Honour referred are perhaps not so problematic: for example, the loan agreement referred to in paragraph 100 of the Statement of Claim is also pleaded and particularised, so far as Ms Cairns says she is currently able to particularise it, in paragraph 18 of the Statement of Claim; and the allegation that the funds the subject of the agreement were advanced by the lender to the borrower is in fact to be found in paragraph 20 of the Statement of Claim. These, I think, answer most of the issues of substance which his Honour raised so far as the pleading is concerned. It is true that there is no allegation that demand has been made for repayment of the loan and that would apparently remain a defect, but I shall ascertain whether the defendants really want to make an issue about that and incur the extra costs and delay that repleading to address that would involve. On the other hand, if Ms Cairns is going to seek leave to amend in any event, that matter may as well also be remedied.

40 That leaves the question of costs, which is not necessarily clear cut, and whether the plaintiff proposes to amend in any way.

[His Honour heard argument on the issue of costs and decided as follows.]

Costs

41 So far as the proceedings before the Associate Judge were concerned, on the conclusions I have reached, the third defendant was entitled to succeed until the UCPR, r 30.16, application was made, and although I have concluded that the r 30.16 application ought to have succeeded, and leave to replead granted, that would have involved granting Ms Cairns an indulgence. In those circumstances, the costs of the proceedings before the Associate Judge should be the third defendant's, noting that as a self-represented litigant Mr Turner will be entitled only to out-of-pocket expenses, which will not be a very great burden in any event.

42 So far as the appeal is concerned, Ms Cairns ultimately succeeded and that is an important consideration. On the other hand, Ms Cairns succeeded really on only one of the grounds argued. It remains a distinct possibility that it will ultimately be found that there is, in fact, no case against Mr Turner. In those circumstances I am inclined to the view that it would be inappropriate to make a costs order which would have the effect that Mr Turner would be liable for Ms Cairns's costs of the appeal regardless of the ultimate outcome. The appropriate course is that the costs of the appeal be the plaintiff's costs in the proceedings, so that if Ms Cairns ultimately succeeds, she will recover the costs of the appeal; whereas Ms Cairns does not succeed, neither party will be entitled to the costs of the appeal.

43 My orders are:

1. Order that the appeal be allowed.

2. Set aside orders 1, 3, 5 and 6 made by the Associate Judge on 26 February 2008.

3. In lieu thereof –


3.1 Order that the application of the third defendant Warren Donald Turner contained in paragraphs 3 and 4 of the Amended Notice of Motion, filed in Court on 19 October 2007, be dismissed.

3.2 Order pursuant to UCPR, rule 14.28, that paragraphs 100-106 of the Statement of Claim be struck out, with leave to replead.

3.3 Order that the plaintiff pay the third defendant's costs of the Motion before the Associate Judge.


4. Order that costs of the appeal be the plaintiff's costs in the proceedings.

5. Order that the plaintiff serve any Draft Amended Statement of Claim by 20 June 2008.

6. Adjourn the proceedings to Friday 18 July 2008 at 9.30am before me for hearing of any application for leave to amend the Statement of Claim.

7. Direct that by 11 July 2008 the defendant serve on the plaintiff and lodge with my Associate a submission setting out any ground of opposition to the grant of leave to file an Amended Statement of Claim, and that by 16 July the plaintiff lodge with my Associate and serve on the defendant any submission in reply.

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