Collins v Djunaedi
[2016] SASCFC 48
•11 May 2016
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 48Full Court: Kourakis CJ, Stanley and Parker JJ
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 an application brought by the respondents/plaintiffs on 6 May 2015.
On 4 February 2016, this Court dismissed the appeal. I now publish my reasons for joining in that order.
The claim
The application for summary judgment was brought on the third Statement of Claim (the SOC) filed by the plaintiffs in their action against the defendants on 3 July 2015. The SOC alleges that the plaintiffs paid money to the defendants totalling $385,750.00 (the funds)[1] in reliance upon certain pleaded misrepresentations.
[1] The third statement of claim claims that sums of $99,000 and $285,750, totalling $384,750, were transferred but claims in part 3 a total sum of $385,750. It appears that the sum of $285,750 should actually read $286,750. The judgments are for $385,750 plus interest.
There is no dispute between the parties that the plaintiffs paid the funds to the defendants. The dispute is about the terms upon which the funds were paid. In particular, and critically, the parties are in dispute about what was said as to the purpose for which the funds were paid. The plaintiffs say that the funds were paid to the defendants on the basis of the “Papua New Guinea (PNG) Bank” and the “New York Real Estate” representations.
As to the PNG bank representations, the plaintiffs claim that the defendants falsely represented that they:
·had previously managed a bank in PNG;
·sought to reopen that bank to fund charitable infrastructure projects;
·had contacts within the United States and PNG governments; and
·would employ the third and fourth plaintiffs as consultants in humanitarian aid work.
The SOC pleads that, relying on the PNG bank representations, the third and fourth plaintiffs deposited a sum totalling $99,000.00 with the defendants.
The pleaded New York Real Estate representations were to the effect that the defendants falsely represented inter alia that:
·they had the opportunity to purchase six real estate investment properties in New York city;
·they had completed due diligence with respect to those properties; and
·there would be a net return to each of the plaintiffs.
Relying on those representations, the plaintiffs paid a total of $286,750.00 to the defendants.
The plaintiffs allege that the New York Real Estate and the PNG Bank representations were fraudulent, a breach of warranty and a beach of the provisions of the Australian Consumer Law.
The defendants deny that the New York Real Estate and PNG Bank representations were made, and allege that all of the parties agreed that the funds would remain in Australia for the use of the defendants, who would procure funds to the same amount through an overseas loan guaranteed by the first defendant. The overseas loan funds would then be expended on the formation of a corporation in the United States of America which would, in turn, purchase properties. The defendants assert that it was agreed by all parties that about $450,000.00 would be spent on legal and other fees to establish the corporation and that the funds were never intended to be used for investment purposes.
Summary judgment
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.
In Spencer, French CJ and Gummow J said:[5]
[5] Spencer v The Commonwealth (2010) 241 CLR 118 at [25]-[26].
Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.
Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact.
(citation omitted)
Hayne, Crennan, Kiefel and Bell JJ stated:[6]
How then should the expression “no reasonable prospect” be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is “no reasonable prospect”. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like “no reasonable prospect” is to be avoided. Consideration of the difficulties that bedevilled the proviso to common form criminal appeal statutes, as a result of judicial glossing of the relevant statutory expression, provides the clearest example of the dangers that attend any such attempt.
In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like “clearly”, “manifestly” or “obviously”) as “frivolous”, “untenable”, “groundless” or “faulty”. But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word “reasonable”, in the phrase “no reasonable prospect”, be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a “frivolous”, “untenable”, “groundless” or “faulty” claim.
Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.
(citation omitted)
[6] Spencer v The Commonwealth (2010) 241 CLR 118 at [58] – [60].
In Proude v Visic & Ors (No 4),[7] Blue J made the following observations on the similarities and differences between s 31A(2)(b) and SCR 232(2)(b):[8]
Section 31A(2)(b) bears a similarity to Rule 232(2)(b). However, the Federal Court provision refers to “no reasonable prospect of successfully prosecuting the proceeding”, whereas this Court’s rule refers to “no reasonable basis” for the claim. The inquiry in the Federal Court is directed to the future and to an assessment of the prospect of success, whereas the provision in this Court is directed to the present and to the basis for the plaintiff’s claim. While there is no equivalent in this Court’s Rules to section 31A(3), the Full Court decided in Ceneavenue that it was not a pre-condition for obtaining summary judgment that a proceeding be demonstrated to be hopeless or bound to fail.
[7] (2013) 117 SASR 560.
[8] Proude v Visic & Ors (No 4) [2013] SASC 154 at [16].
Blue J concluded that the determination of what is a reasonable basis for a claim will vary depending upon the nature and circumstances of the particular claim, bearing in mind the necessity to determine whether there is a reasonable basis for the claim in a summary way.[9]
[9] Proude v Visic & Ors (No 4) [2013] SASC 154 at [18]-[19].
For my part I doubt that the ‘prospective’ and ‘present’ foci, of the FCA Act and DCR 232 respectively, will ever lead to different results. There cannot be a reasonable prospect of future success in prosecuting or defending a claim unless there is a presently existing reasonable basis upon which to prosecute or defend it. Nor can it be said that a claim or defence which has a reasonable basis does not have a reasonable prospect of success.
In the case of a summary judgment application, there is a reasonable basis for a claim, or a positively pleaded defence, when there is an evidential foundation for facts upon which arguable propositions of law would result in judgment for the plaintiff or the defendant as the case may be. In cases in which the defendant merely denies the claim, there must be reasonable grounds on which to contend that the plaintiff will not discharge its onus of proof or make good the propositions of law on which it relies. In the case of a SCR 232 application, the evidential basis or grounds must at least be pleaded.
Inconsistent defences in the District Court action
The action first came before the District Court on 23 January 2015, on an application by the plaintiffs for a freezing order. At that hearing, the first defendant did not admit that he had used the plaintiff’s funds for his own purposes but instead asserted that the funds were transferred overseas.
At the next hearing of this matter on 6 February 2015, Peter Heinrich appeared as counsel for the defendants. At that hearing Mr Heinrich stated:
… In light of what Mr Collins said to the court, as the plaintiffs know, they authorised some transactions to occur overseas and permitted their money to be used for that purpose.
…
That's our case and you have no evidence to find otherwise. At the moment you just have counter-allegations. Mr Collins informed the court that the money has been transferred overseas, so we don't see the big concern in going to his local bank branch to provide the court this evidence… Mr Collins asserted to the court that the money has been transferred and providing bank statements to the court will justify and show to the court that is the main issue in contention right now. If there has been money transferred overseas then of course that will exonerate Mr Collins most likely from any further proceedings but ultimately he has raised this matter before the court and we are simply acting on his assertion it had been transferred overseas…
At subsequent hearings on which Mr Heinrich appeared for the defendants the first defendant’s claim, that the funds were transfered overseas, was discussed numerous times. At no time did Mr Heinrich inform the Court that the defendants would admit to using the funds for their own purposes in Australia but deny liability on the basis that they were authorised to do so.
On 31 July 2015, the first defendant appeared in person and claimed to represent both himself and the second defendant. The defendants are husband and wife. Counsel for the plaintiffs again raised the issue of the overseas transfer of the funds and the earlier claims that the money had been transferred overseas were not withdrawn.
On 31 August 2015, the defendants filed a Defence to the claim. The Defence stated, inter alia, that the funds were intended to remain in Australia and be used by the defendants, but that the defendants had agreed to cover the funds ‘by a loan by a third party overseas guaranteed by the first defendant’. The Defence further alleged that the funds were intended to be used to establish a corporation in New York, which in turn would purchase the properties.
On 3 September 2015 the first defendant again appeared in person and on behalf of the second defendant. The following exchange took place on the topic of the overseas transfer of the funds:
HIS HONOUR: All right. Mr Collins, this pleading is generally a denial, but the pleading in 19F in particular merely asserts that the money was to stay in Australia and could be used by the defendants, but for what purposes?
MR COLLINS: For our own personal use. That was made very clear. I have notes on all that.
HIS HONOUR: So you say this was for a loan, do you, just a loan?
MR COLLINS: Yes, I borrowed a loan from a - sorry, I obtained a loan from overseas to cover all the expenses. I have that loan agreement, I have a default agreement. Unfortunately, my statement to Judge Boylan was supposed to be corrected by Mr Heinrich. He never got around to doing it, and I apologise for that.
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.
The defendants deny that the PNG bank representations were made but accept that the monies were received. The defendants assert, somewhat cryptically, that the monies were paid ‘to buy into the project’. One can only assume that this means the project in PNG which is referred to earlier in the defence. The details of the project are not disclosed.
The defendants filed a document titled ‘Answer to Affidavits Supplied for Summary Judgment’. That document is not an affidavit and accordingly the defendants have not given sworn evidence refuting the PNG bank representations. In any event, that document does not go so far as to deny the PNG representations as set out in Mr De Pasquale’s affidavit.
It is clear from the lack of particulars and any supporting documentation that there was, in fact, no project in PNG for the third and fourth plaintiffs to invest in. In any event, even if there were such a project, the defendants have admitted that the monies were in fact used for their own purposes within Australia. This much is also evident on the face of the bank statements.
Forged documents
On 7 September 2015, the defendants filed further particulars of their defence. The further particulars attached a loan agreement dated 25 March 2014 purporting to have been made between the first defendant and Yamama Cement Company, a Saudi Arabian company whose authorised signatory was said to be Prince Sultan bin Mohammed bin Saud Al Kabeer (the Loan Agreement).
It is inherently improbable that an agreement in the form of the Loan Agreement would be entered into for a loan of $600,000.00 ($US). The Loan Agreement does not specify an interest rate and the supposed lender does not appear to be in the business of lending. Importantly, the document itself is in the form of a template loan agreement available online from the ‘Biztree’ website.
To add to the implausibility of the defendants’ case, when the plaintiffs began to query the set up costs of the investment and their ability to access funds, emails calculated to dissuade the plaintiffs from questioning the transactions were sent to several of them purportedly from Shiekh Ahmad Moaz Al-Khatib, the former president of the National Coalition for Syrian Revolutionary and Opposition Forces and the United States of America Central Intelligence Agency. Those emails were traced back to the IP address of the defendants.
On the hearing of this matter before the Full Court, when asked where the monies drawn down under the purported loan agreement had been deposited, and what evidence there was of the disbursal of those monies, the following exchange ensued with counsel for the defendants:
MR FABBRO: I'll get some instructions. No receipts were provided because it apparently never went into a bank account. On my instructions it went to Alex … that’s the solicitor that’s named in the documentation, and simply expended on the formation of the corporation. So, the reason why that has not been presented either to yourselves or to the primary judge, is apparently it doesn’t exist.
PARKER J:So the whole amount was expended on legal fees and set-up costs, is that -
MR FABBRO: That’s my instructions.
PARKER J: So is there any documentation available for those matters?
MR FABBRO: No.
PARKER J: Disbursements, fees -
MR FABBRO: The answer is no on my instructions.
KOURAKIS CJ: Trust account receipt?
MR FABBRO: My instructions are that there is no documentation, so it’s not possible to present it.
The irresistible inference is that the loan documents and the correspondence from the Crown Prince of Saudi Arabia and the CIA were forged by the defendants in perpetrating a fraud on the plaintiffs.
No reasonable basis to defend claim
The Judge described the basis of the defence advanced by the defendants as follows:[10]
It can be seen then that the terms of defence as propounded by the defendants, consist in part of mere denials, inconsistencies, assertions of an alternative basis of the facts without specifying what they are, or by asserting facts which are demonstrably incorrect as against their own documents.
[10] Djunaedi and Ors v Collins and Anor (No 2) [2015] SADC 155 at [17].
The Judge then referred to authorities urging caution in entering summary judgment and continued:[11]
When so examined the posture taken by the defence is patently no more than a colourable smoke screen in conflict with their own documents and other objective facts, and which reveals or discloses nothing of substance, supported by bogus documents. It is therefore appropriate to grant summary judgment against the defendants in the amount claimed.
[11] Djunaedi and Ors v Collins and Anor (No 2) [2015] SADC 155 at [19].
I agree with the Judge’s conclusion. The defendants have no reasonable basis on which to defend the claim. Indeed the proposed defence, on its face, is an audacious attempt to perpetrate on the Court the same fraud perpetrated on the plaintiffs.
It is inherently probable that the plaintiffs advanced the funds on the faith of the pleaded PNG Bank and New York Real Estate representations. It is fanciful to suggest that the plaintiffs paid over hundreds of thousands of dollars for the defendant’s personal use hoping and believing that the defendants would secure an equivalent amount by borrowing overseas to invest in the way they had promised. If the defendants had that degree of borrowing capacity, there is no reason why they would not have borrowed money for their personal needs and used the plaintiff’s money for the agreed investments.
It is patent on the face of the loan agreement that it is fraudulent as are the bizarre emails from the CIA and the Shiekh. It is ridiculous to claim that nearly half a million dollars might be borrowed from a Saudi Arabian prince and paid to New York lawyers to form a trading corporation without leaving any money trail. Overall, the evidence discloses the modus operandi of the fraudster.
Stay application
In July 2015, the defendants were charged in the Magistrates Court at Christies Beach with six counts of deception and two counts of money laundering relating to the transactions set out in the claim.
On 16 July 2015, the defendants made an application to stay the claim pending the conclusion of the criminal proceedings.
The stay application was first argued on 31 July 2015. At that hearing the Judge explained the privilege against self-incrimination and the procedural requirements to file a defence and response to the Notice in these terms:
HIS HONOUR: Mr Collins, I want you both to understand in a minute I’m about to reserve judgment to think about this because it’s a tricky situation. I want you to understand, as I think you do, that it’s fine, you are perfectly entitled to claim privilege against self-incrimination. I’ll consider your application for a stay but as I said it may be you take your chances on the summary judgment if you don’t want to say anything at this point.
The Judge granted an interim stay on 14 August 2015. In his reasons for so ordering, the Judge correctly observed that it is a serious matter to interfere with a party’s right to have an action tried in the ordinary course and that the burden was on the applicant requesting the stay to show that it was just to displace those rights.[12] The Judge explained that it was well established that the ‘right to silence’ does not extend to give ‘as a matter of right the same protection in contemporaneous civil proceedings’.[13]
[12] Djunaedi and Ors v Collins and Anor [2015] SADC 120 at [9].
[13] Djunaedi and Ors v Collins and Anor [2015] SADC 120 at [19] citing McMahon v Gould (1982) 7 ACLR 202 at 206-207, Atkins v Minister of Community Welfare (1988) 34 A Crim R 26 at 28.
On the basis of the information before the Judge, his Honour was not able to identify any prejudice the defendants might face if they disclosed their defence nor any risk of injustice in the criminal proceedings.[14]
[14] Djunaedi and Ors v Collins and Anor [2015] SADC 120 at [10].
In adjourning the summary judgment application, the Judge said:[15]
In the circumstances it is proposed to adjourn the application for summary judgment to await the outcome of the next stage of proceedings in the criminal court, until after the 11 August 2015, and so as to afford the defendants the chance to obtain legal advice (as they are represented in the criminal proceedings) on the consequences in the summary judgment application of declining to place any material before the court as to a potential defence. The defendants should clearly understand that at the resumed hearing they are at risk of orders requiring them to file defences and respond to the notice to admit.
[15] Djunaedi and Ors v Collins and Anor [2015] SADC 120 at [12].
On 24 August 2015, the defendants filed an application seeking permission to file and serve a defence and a response to the notice by 31 August. That matter came before the Court on 26 August 2015 and the following exchange took place:
HIS HONOUR: Mr Rigall, we’ve got this application for liberty to file and serve a defence and notice to admit by Monday the 31st.
MR RIGALL: That seems reasonable.
HIS HONOUR: Mr Collins, you have taken legal advice? Don’t tell me what it is, but you’ve had the opportunity to take legal advice?
MR COLLINS: I have spoken to several people.
HIS HONOUR: You wish now to file a defence?
MR COLLINS: Yes, in answer to the notice to admit.
On 26 August orders were made by consent that the defendants file a defence and answer to the notice. The interim stay was not renewed at that time.
The Judge then adjourned the summary judgment application until after the defendants had filed their documentation.
The Defence and First Response were then filed on 31 August. Further particulars were filed on 7 September, and the Second Response on 14 September 2015.
The summary judgment application was argued on 9 October 2015 and summary judgment was ordered and reasons delivered on 10 November 2015.
The defendants contend that the Judge should have continued the stay of proceedings in order to relieve the defendants of their obligation to file a defence because the filing of a defence may have involved disclosure of incriminating material. Counsel contends that the Judge was duty bound to raise the issue of self-incrimination with the defendants. I reject that submission for the reasons set out below.
The course of the proceedings shows that the defendants were afforded an opportunity to obtain legal advice, and that they took the opportunity to obtain advice of one kind or another, with respect to the summary judgment application and their right to claim the privilege against self-incrimination. The defendants then made an informed election to file a defence and other answering material to the claim. There was nothing more that the Judge was bound in law to do. Indeed the Judge acted impeccably. No error has been shown.
In any event, nothing can now be done to reverse what the defendants chose to do. The fanciful defence they have advanced cannot be ignored. If the defendants had taken a different course and, for example, elected not to file any material in their defence, and summary judgment had been ordered, it may have been open to them to appeal against that judgment contending that the stay should have been granted. In that event, this Court on appeal would have been required to balance the strong interests of the plaintiffs to a timely adjudication of their claim against the interests of the defendants in maintaining their procedural right of silence in the criminal proceedings. However, the defendants did not choose that course. This Court cannot now approach the appeal against the summary judgment made against them on the notional basis that no material was filed by the defendants.
The second defendant
Counsel for the defendant submits that summary judgment should not have been entered against the second defendant for two reasons. First, because she was inadequately represented in the District Court and, second, because the Judge erred in treating the defendants as if the case against them was the same. I reject those contentions.
I have already observed the first defendant appeared at the initial hearing of the freezing order in the District Court on 23 January 2015. The second defendant was not present on that occasion. Counsel for the defendants relies heavily on the second defendant’s absence on that day because it was then that the first defendant told the Court that the funds were sent overseas.
However, at the next hearing of the action on 6 February 2015, Mr Heinrich appeared as counsel for both defendants and the second defendant was present in court. At that hearing Mr Heinrich repeated the first defendant’s assertion that the funds had been sent overseas.
Mr Heinrich continued to appear for the defendants until 31 July 2015 when the first defendant again appeared in person and on behalf of the second defendant. The following exchange took place on that occasion:
HIS HONOUR: … And this is a position you take on behalf of you both, do you?
MR COLLINS: Yes, we’re not in a position to file a defence.
HIS HONOUR: No, but you’re speaking for the second defendant as well?
MR COLLINS: Yes.
HIS HONOUR: You have exactly the same position?
MR COLLINS: Yes.
With the exception of the hearing on 23 January 2015, the second defendant was present at each of the hearings of this matter, namely on 31 July 2015, 26 August 2015, 3 September 2015, 2 October 2015, 9 October 2015, 5 November 2015 and 10 November 2015.
On the hearing of the summary judgment application on 9 October 2015, the first defendant again claimed to appear for the second defendant.
The Judge, in his reasons for granting summary judgment, stated:[16]
This is not a case in which the defendants ought to be given a further opportunity to file yet another defence. Although they are unrepresented, Mr Collins who has argued the case on behalf of both defendants, has proved articulate in outlining their position and he freely acknowledged understanding the legal implications.
[16] Djunaedi and Ors v Collins and Anor (No 2) [2015] SADC 155 at [20].
On the procedural history I have outlined, there is no reason to assume that the second defendant was unaware of the position taken by the first defendant, and the changes in that position, including whether the funds had been sent overseas. No affidavit material to the contrary was tendered on her behalf on the appeal. If the second defendant sought to put a different view, or to agitate her own different defence to the claim, she has had ample opportunity to do so.
In support of the contention that the case against the defendants should not have been treated in the same way by the Judge, the defendants’ counsel submitted that the mere presence of the second defendant at meetings between the parties, which are alleged in the particularisation of the SOC, is insufficient to prove that she was a party to the relevant transactions.
That submission suffers from several weaknesses. The first is that the defence of innocent presence is not clearly set out in the defence and was not put to the District Court Judge. The defence merely denies that the second defendant was present at some of the meetings between the parties, but falls well short of claiming that the second defendant was not a party to the transactions.
The second defect in the submission is that it fails to acknowledge that the basis for liability at common law, and under statute, in claims of this kind is wider than being a party to the transaction.
Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law) is applied in South Australia pursuant to s 14 of the Fair Trading Act 1987 (SA). Part 2.1 of the Australian Consumer Law deals with misleading or deceptive conduct as follows:[17]
[17] Competition and Consumer Act 2010 (Cth) Schedule 2 s 18.
18—Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
Damages are recoverable in respect of a breach of s 18 pursuant to s 236 of the Australian Consumer Law. That section relevantly provides:[18]
(1) If:
(a) a person (the claimant) suffers loss or damage because of the conduct of another person; and
(b) the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
(Emphasis in bold in original. Underlined emphasis added.)
[18] Competition and Consumer Act 2010 (Cth) Schedule 2 s 236.
A person is deemed to have been “involved” in a contravention of a provision of the Australian Consumer law if that person has, inter alia, been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention, or has conspired with others to effect the contravention.[19]
[19] Competition and Consumer Act 2010 (Cth) Schedule 2 s 2.
The defendants have admitted that the second defendant was present at some of the meetings between the parties and is noted as an attendee in minutes of those meetings. She was copied into relevant correspondence, including the email attaching the signed documents purporting to transfer real estate which was never purchased. In the absence of any evidence to the contrary, the material before the Court shows that the second defendant has no reasonable basis on which to deny that she was knowingly involved in the contravention alleged for the purposes of the Australian Consumer Law. Moreover, the evidence overwhelmingly established that the defendants were acting jointly and as agents, one for the other, in making the representations.
Conclusion
For the above reasons, I joined in the order dismissing the defendants’ appeal.
STANLEY J: In this matter I join with the Chief Justice in dismissing the appeal. I agree with the reasons given by the Chief Justice for doing so.
PARKER J: I join with the Chief Justice in dismissing the appeal. I agree with the reasons given by the Chief Justice
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