Collins v Djunaedi

Case [2016] SASCFC 48

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

COLLINS & ANOR v DJUNAEDI & ORS

[2016] SASCFC 48

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Stanley and The Honourable Justice Parker)

11 May 2016

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT - GENERALLY

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS

Appeal against summary judgment entered in the District Court.

The respondents claim they paid money to the appellants in reliance upon certain pleaded misrepresentations. The respondents allege that the representations were fraudulent, a breach of warranty and a breach of the Australian Consumer Law.

The appellants deny that the representations were made, and allege that all of the parties agreed that the money would remain in Australia for the use of the appellants.

The appellants were charged in the Magistrates Court with six charges of deception and one count of money laundering relating to the transactions set out in the claim.

The appellants made an application to stay the claim in the District Court pending the conclusion of the criminal proceedings.

The Judge granted a stay of proceedings on an interim basis, but subsequently adjourned hearing the application.

Orders were then made by consent that the appellants file a defence and answer to the notice, which they then did. The interim stay was not renewed.

Summary judgment was ordered for the respondents.

The appellants contend that the Judge should have continued the stay of proceedings in order to relieve for the appellants their obligation to file a defence because the filing of a defence may have involved disclosure of incriminating material.

Held per Kourakis CJ (Stanley and Parker JJ agreeing), dismissing the appeal:

1.  Summary judgment was correctly entered as there was no reasonable basis to defend the claim;

2.  The Judge was correct in not continuing the stay of the proceedings.

Competition and Consumer Act 2010 (Cth) schedule 2; Federal Court of Australia Act 1976 (Cth) s 31A; Fair Trading Act 1987 (SA) s 14; District Court (Civil) Rules 2006  rule 232, referred to.
Ceneavenue Pty Ltd v Martin [2008] SASC 158; Spencer v The Commonwealth (2010) 241 CLR 118; Proude v Visic & Ors (No 4) [2013] SASC 154; Djunaedi and Ors v Collins and Anor (No 2) [2015] SADC 155; Djunaedi and Ors v Collins and Anor [2015] SADC 120; McMahon v Gould (1982) 7 ACLR 202; Atkins v Minister of Community Welfare (1988) 34 A Crim R 26, considered.

WORDS AND PHRASES CONSIDERED/DEFINED

"Summary judgment"

COLLINS & ANOR v DJUNAEDI & ORS
[2016] SASCFC 48

Full Court:  Kourakis CJ, Stanley and Parker JJ

  1. KOURAKIS CJ:         This is an appeal against a summary judgment entered against the appellants/defendants in the District Court of South Australia in December 2015 on…

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Collins v Djunaedi [2016] SASCFC 48
Case
[2016] SASCFC 48
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CaseChat Overview and Summary

This matter concerned an appeal by the defendants against a summary judgment granted to the plaintiffs by the District Court. The plaintiffs' claim was based on alleged misrepresentations made by the defendants concerning New York real estate investments and representations regarding a bank in Papua New Guinea. The defendants had sought to defend the claim by asserting that the funds transferred were for establishing a corporation and not for investment purposes, and that the funds were never intended to be used for investment.

The central legal issues before the Full Court were whether the District Court had erred in granting summary judgment to the plaintiffs, and whether the defendants had a reasonable basis for their defence. This involved an assessment of the evidence presented, including emails and bank statements, and the application of the principles governing summary judgment under Rule 232 of the District Court Civil Rules 2006. The court was required to determine if there was "no reasonable basis" for the defendants' defence, a test that has been interpreted as significantly lowering the barrier for summary judgment applications.

The Full Court considered the evidence, including admissions made by the defendants in response to notices to admit, which largely corroborated the plaintiffs' claims. Documentary evidence, such as emails originating from the first defendant's IP address and signed property transfer documents, directly contradicted the defendants' pleaded defence. The court found that the defendants' attempts to challenge this evidence were speculative and lacked an evidential foundation, such as the unsupported suggestion that a third party had sent some of the emails. Applying the principles from cases like *Ceneavenue Pty Ltd v Martin* and *Spencer v Commonwealth of Australia*, the court concluded that the defendants' defence had no reasonable prospect of success and that it was evident that there was no reasonable basis for their defence.

Consequently, the Full Court dismissed the appeal and affirmed the summary judgment granted by the District Court in favour of the plaintiffs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

I observe here that despite that explanation, which cast the blame on Mr Heinrich, as discussed above, the defendants appeared in person at the hearing on 31 July 2015 and made no attempt to correct Mr Heinrich’s submission when the issue of the transfer of the funds was raised.Documentary evidence falsifying the New York representation On 10 July 2015, the plaintiffs filed a Notice to Admit (the Notice), attaching a series of emails between them and the defendants which evidence the false representations on which the plaintiffs rely. The notice was answered by the defendants on 31 August 2015 (the First Response) and again on 14 September 2015 (the Second Response). Much of the documentation supporting the plaintiff’s claim, including the emails attached to the Notice, was largely admitted by the defendants. In so far as there is some equivocation in the defendants’ admissions, those answers should be construed against the defendants. In any event, that equivocation does not detract to any meaningful extent from the admissions they made. Moreover, the plaintiffs produced printouts of the electronic record of a number of emails from different addresses which reveal that the source of the emails was the first defendant’s internet provider (IP) address. On appeal, the defendants advanced some theoretical arguments against the weight of that evidence but those arguments fail to take into account the corroboration derived from the defendant’s admissions and the strong degree to which the very contents of the unadmitted emails suggest that they were also sent by the defendants. Moreover, the defendants have failed to produce any evidential foundation for their challenge to that evidence. Speculation of the kind on which they rely, for example that a third party sent some of the emails from the defendants’ email addresses, is not a reasonable basis on which to deny the plaintiffs’ claims. One such email sent from the first defendant’s IP address on 26 March 2014 to the plaintiffs reads:I am under pressure from the bank and these 6 are prime real estate in New York City All due diligence has been done and they all have been refurbished from Nov up to now That communication is consistent with the making of the New York Representations and necessarily falsifies the first defendant’s claim that the money was paid in order to establish a corporation and was never intended to be used for investment purposes. Another admitted email dated 20 May 2014 sent by the first defendant to the plaintiffs purports to attach ‘all the property transfers’. The attached transfers were signed by the defendants. Those documents also falsify the pleaded defence. There are numerous other examples of documents admitted by the defendants which are inconsistent with their case. I do not propose to detail all of them. The PNG bank representations With respect to the PNG bank representations, a bank statement attached to the notice establishes that a cheque for $100,000 was deposited into the defendants’ account on 21 February 2014. An affidavit of Antonio De Pasquale, the third plaintiff, dated 5 May 2015 deposes that the plaintiffs transferred the funds in reliance on the PNG bank representations.

Decision

Reasons for decision

Rule 232 of the District Court Civil Rules 2006 (DCR 232) provides:232—Summary judgment(1) The Court may, on application by a party, give summary judgment for that party.(2) Summary judgment may only be given if the Court is satisfied that—(a) if the applicant is a plaintiff—there is no reasonable basis for defending the applicant's claim; or(b) if the applicant is a defendant—there is no reasonable basis for the claim against the applicant. In Ceneavenue Pty Ltd v Martin,[2] Debelle J (Duggan and Anderson JJ agreeing) said of rule 232 of the Supreme Court Civil Rules 2006 (SCR 232), which is in identical terms:[3]A comparison of the test in r 25.04 with the test in r 232(2)(b) readily discloses that the burden to be discharged by the defendant on an application under para (b) is lighter than the burden that had to be discharged under r 25.04. The reasoning in General Steel is, therefore, no longer applicable. I respectfully agree with Bleby J that the barrier to summary judgment on an application by a defendant has been lowered: JT Nominees Pty Ltd v Macks (2007) 97 SASR 471 at [61].While there can be no doubt that para (b) has significantly lightened the burden for a defendant seeking summary judgment, two questions nevertheless remain. The first is what is meant by the expression “no reasonable basis” for the claim against the defendant and the second is whether the test is materially different from the test of a real question to be tried … The test in r 232(2) requires the court first to identify the issues to be tried and then to assess whether the claim or defence has reasonable prospects of success. In the case of an application for summary judgment by a plaintiff against a defendant, it is doubtful, therefore, whether there is a material difference between that test and the former test as it had been expressed in Fancourt. That is because the question whether there is a real question to be tried denoted that the task for the court was to determine whether the issues at the trial are real or fanciful and have reasonable prospects of success.The question whether there is no reasonable basis for the claim or defence must be determined in a summary way. It is entirely inappropriate for there to be a mini trial on that question. It must, therefore, be evident or obvious that the party defending the application for summary judgment has no reasonable basis for the claim or the defence. While adversarial argument will assist in the determination of that question, the question should be capable of ready resolution without prolonged argument. A prolonged argument might suggest that there is a reasonable basis for the claim or the defence. Comparison with the requirements in rules in other jurisdictions providing for summary judgment confirms these propositions.[2] [2008] SASC 158.[3] Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1 at [80]-[82]. The parties both referred to the matter of Spencer v Commonwealth of Australia,[4] which was concerned with s 31A of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), as the leading High Court decision on the application of summary judgment. Section 31A relevantly provides:[4] (2010) 241 CLR 118.(1)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:(a) the first party is prosecuting the proceeding or that part of the proceeding; and(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.(2)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:(a) the first party is defending the proceeding or that part of the proceeding; and(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:(a) hopeless; or(b) bound to fail;for it to have no reasonable prospect of success.

Ratio Decidendi

Legal Principle Established

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