De Lyster v Newport Quays Stage 2A Pty Ltd
[2011] SADC 118
•5 August 2011
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
DE LYSTER v NEWPORT QUAYS STAGE 2A PTY LTD & ANOR
[2011] SADC 118
Judgment of His Honour Judge Cuthbertson
5 August 2011
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS
- SUMMARY JUDGMENT
Appeal against decision of Master to grant summary judgment to respondent – Subject of action related to whether respondent vendor was entitled to damages for failure of appellant purchaser to settle – Whether proceedings were interlocutory thus permitting the appellant to rely on hearsay in affidavits – Fresh evidence – Whether appellant entitled to rely on fresh evidence of misrepresentations as to environment of subject property after signing Deed of Release – Whether on the fresh evidence application appellant is entitled to rely on hearsay in affidavits.
HELD: Application before Master was not for the purpose of interlocutory proceedings and hence appellant could not rely on hearsay in affidavits - Master's decision upheld – On appeal permission to appellant to rely on hearsay material in affidavits – Deed of Release arguably did not cover facts not within the parties contemplation at the time of execution - Foreshadowed fresh evidence met the test for fresh evidence and could be received. Appeal allowed.
District Court Act (1991) s 38; District Court Civil Rules (2006) Rule 162, 232, referred to.
Re Luck (2003) 203 ALR 1; Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 259 ALR 319; Settlement Wine Co Pty Ltd v National & General Insurance Co Ltd (1988) 146 LSJS 150; Luck v University of Southern Queensland (2009) 176 FCR 268; Ventura v Sustek (1976) 14 SASR 395, discussed.
DE LYSTER v NEWPORT QUAYS STAGE 2A PTY LTD & ANOR
[2011] SADC 118Introduction
On or about 4 September 2006 the respondent and the appellant entered into a written contract whereby the respondent agreed to sell to the appellant, and the appellant agreed to purchase from the respondent, a villa which was proposed to be constructed by the respondent in a development at Newport Quays.
The respondent as plaintiff sued the appellant claiming breaches of contract by the appellant purchaser in the failure of the purchaser to go ahead and complete the contract.
The respondent, by application dated 19 November 2009 (FDN 4), sought summary judgment against the appellant.
Rule 232 of the District Court Civil Rules 2006 SA reads as follows:
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.
The application was heard by a Master of the District Court on 25 March 2010.
A central issue on the application for summary judgment was whether the appellant could rely on hearsay material in his affidavit (FDN 7 at para 26) in order to support an argument that a Deed of Release dated 8 April 2009 could arguably be set aside at trial, thus establishing there was a reasonable basis for defending the respondent’s claim.
Rule 162 of the District Court Civil Rules 2006 SA reads as follows:
162—Form of affidavit
(1) An affidavit is to be in an approved form.
(2) Subject to the following exceptions, an affidavit is to be confined to matters that the witness knows of his or her own knowledge.
Exceptions—
1An affidavit made for the purpose of interlocutory proceedings may contain statements that the witness honestly believes to be true if the witness also states the grounds of the belief.
2 The Court may dispense with the requirements of this subrule to the extent it considers appropriate in a particular case.
(My underlining)
The hearing before the Master
At the hearing before the Master counsel for the appellant indicated that he did not wish to have an adjournment in order to rectify the fact that the affidavits he was relying on contained hearsay material.
Further, the Master did not dispense with the requirement of Rule 162(2) relating to affidavits.
Accordingly, the decision depended on whether the affidavit came within exception 1. to Rule 162(2) namely whether it was “An affidavit made for the purpose of interlocutory proceedings”.
The affidavit was clearly made for the purpose of an application for summary judgment pursuant to Rule 232 of the District Court Civil Rules 2006.
The law
The question then is whether an affidavit made for an application for summary judgment is “for the purpose of interlocutory proceedings.”
The test of what is final and what is interlocutory is stated by their Honours McHugh ACJ, Gummow and Heydon JJ in Re Luck (2003) 203 ALR 1 at para 4:
As McHugh, Kirby and Callinan JJ stated in Bienstein v Bienstein [2003] HCA 7; (2003) 195 ALR 225 at 230 [25], the usual test for determining whether an order is final or interlocutory is whether the order, as made, finally determines the rights of the parties in a principal cause pending between them. That question is answered by determining whether the legal effect of the judgment is final or not.2 (Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; 1981 147 CLR 246 at 248, 256).
The difference was explained in Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 259 ALR 319 in the joint judgment of Spender, Graham and Gilmour JJ as follows:
[33]The usual test for determining whether an order is final or interlocutory is whether the order, as made, finally determines the rights of the parties in a principal cause pending between them. That question is answered by determining whether the legal effect of the judgment is final or not. If the legal effect of the judgment is final, it is a final order; otherwise it is an interlocutory order: see per McHugh ACJ, Gummow and Heydon JJ in Re Luck (2003) 203 ALR 1; 78 ALJR 177; [2003] HCA 70 at [4] (Re Luck); see also Port of Melbourne Authority v Anshun Pty Ltd (No. 1) (1980) 147 CLR 35 at 38; 33 ALR 248 at 249 (Anshun (No 1)).
The most immediate authority in a matter such as this is the judgment of the Full Court of South Australia in Settlement Wine Co Pty Ltd v National & General Insurance Co Ltd (1988) 146 LSJS 150.
The appellant’s submissions
The appellant asserts that this decision has been overruled at least implicitly by the High Court in the decision in the matter of an appeal in Re Luck (2003) 203 ALR 1. It is further asserted by the appellant that some subsequent decisions of the Full Federal Court indicate that the law is no longer as declared by our Full Court in Settlement Wine.
It is necessary to examine in some detail the reasons of the Court in Settlement Wine. In that case, a winemaker whose winery premises were severely damaged by fire brought action against an insurance company claiming indemnification in accordance with a policy of insurance whereby the insurance company agreed to indemnify the insured winery against loss or damage caused by fire.
The respondents brought an application for immediate relief enlisting the powers conferred by s 30B of the Supreme Court Act 1935. Section 30B of the Supreme Court Act 1935 at the relevant time provided as follows:
30B(1) Where in any action the court determines that a party is entitled to recover damages from another party, it shall be lawful for the court to enter declaratory judgment finally determining the question of liability between the parties, in favour of the party who is entitled to recover damages as aforesaid, and to adjourn the final assessment thereof.
(2) It shall be lawful for the court when entering declaratory judgment and for any judge of the court at any time or times thereafter-
(a) to make orders that the party held liable make such payment or payments on account of the damages to be assessed as to the court seems just;
and
(b) in addition to any such order or in lieu thereof, to order that the party held liable make periodic payments to the other party on account of the damages to be assessed during a stated period or until further order.
(Rest of section omitted)
The same point arose as in the present case as to whether the application could be dealt with in reliance on affidavits containing hearsay.
Rule 83.04 of the Supreme Court Rules at that time provided as follows:
83.04 (1) An affidavit used in interlocutory proceedings may contain statements based on information received by the deponent which he believes to be true with the sources and grounds thereof.
Otherwise an affidavit is to be confined to facts of the deponent’s own knowledge
(2) Unless the Court otherwise orders, an affidavit shall contain only such facts as the deponent is able of his own knowledge to prove.
Costs of improper material to be paid by the party filing the affidavit
(3) The costs of an affidavit which sets forth matters of hearsay or argumentative matter unnecessarily or unnecessary copies of or extracts from documents shall be paid by the party filing the same or in a proper case his solicitor.
In the principal judgment of the Court King CJ said as follows:
The learned Judge [at first instance] held that Rule 83.04 [2] applied to these affidavits and that hearsay statements in them were inadmissible. I think that that ruling was correct. There is a sense, it is true, in which a declaratory judgment and interim award pursuant to s 30b of the Supreme Court Act can be said to be interlocutory in that there is a final judgment to follow when damages are finally assessed. I do not think, however, that proceedings leading to a s 30b judgment are interlocutory proceedings in the sense in which that expression is used in Rule 83.04 (1) which permits the use of statements in affidavits based on information and belief. The declaratory judgment is final as to the issue of liability and the interim award is final as to the appellant’s liability for it. The hearing of an application for immediate relief leading to such a judgment is not, in my opinion, an interlocutory proceeding within the meaning of Rule 83.04 (1) and hearsay content of affidavits is not admissible.
(See p151)
I am obliged to follow the decision of the Full Court in Settlement Wine unless it has been overruled by the Full Court or by the High Court of Australia, as in my view, it is directly on point.
The fact that Settlement Wine involved an application for immediate relief pursuant to s 30B of the Supreme Court Act and under Rule 25.01 of the Supreme Court Rules 1987 is a distinction of no relevance. As King CJ said:
Another purpose of the procedure is to operate as an alternative to an Application for Summary Judgment under Rule 25.01 where the Rule 25.01 endorsement has not been made but where the plaintiff considers there is no serious issue to be tried, Bellas v Kipouros (1974) 8 SASR 418 at 419. This latter purpose is emphasised by the language of the 1987 Rules which express the Rule 25.02 procedure as an alternative to the Rule 25.01 procedure.
(See p152)
The test under Rule 25.01 is to ascertain whether the defendant is shown to have a good defence on the merits, see Lawrence v Griffiths (1987) 47 SASR 455. This test is similar to the test under Rule 232(2)(a) such that a Summary Judgment based on either provision would clearly be a final judgment and there is no logical reason why one would say that a judgment arising out of one procedure was interlocutory and arising out of the other final.
It follows that the analysis conducted by Debelle J in Ceneavenue Pty Ltd & Others v Martin & Others (2008) 106 SASR 1 is irrelevant to the present issue.
I do not accept that the decision of the High Court in the matter of an appeal in Re Luck (2003) 203 ALR 1 overrules the decision in Settlement Wine.
In Re Luck the appellant had sought to issue a writ of summons naming 32 appellants including various judicial officers and the Commonwealth Attorney General asserting that each of the appellants had tortured her.
The writ of summons was the subject of a direction by Callinan J under High Court Rules Order 58 Rule 4(3). The effect of the direction was that the Registrar could not issue the Writ of Summons or Statement of Claim without the leave of a Justice.
Gleeson CJ refused to grant leave to issue holding that the Statement of Claim disclosed no cause of action against any appellant and the appellant appealed against the decision of Gleeson CJ.
The question on appeal was whether ‘leave to appeal’ was required on the basis that the appellant was seeking to appeal against an interlocutory order.
The High Court held that the direction made by Callinan J amounted to an interlocutory order and not a final order and hence leave was required to appeal from that order.
In the joint judgment of the Court it was pointed out that:
[2]Not only does the Writ and Statement of Claim fail to disclose any recognisable cause of action against any individual defendant, but they seek to join as defendants in one action many people who have nothing in common except that the applicant claims that each of them has tortured her.
The Court concluded:
[5]The order of Gleeson CJ refusing to grant leave to issue process was an interlocutory order. It did not finally determine Luck’s rights against the various defendants, if she has any such rights. An order refusing to grant leave after an O 58 direction has been made does not finally determine the legal rights of the parties. It does no more than refuse leave to serve the process, the subject of the direction, on the defendant or defendants. In this case, Callinan J made the direction that he did because the case was within O 58 r 4. On their face, the writ and statement of claim appeared “to be an abuse of the process of the Court or a frivolous or vexatious proceeding”. The order of Gleeson CJ, therefore, refuses leave to serve documents that on their face are “an abuse of the process of the Court or a frivolous or vexatious proceeding.”
[6] For more than a century Courts, including courts of the highest authority, have consistently held that an order staying an action on the ground that it is frivolous, vexatious or an abuse of process is an interlocutory order.
(See para 5 & 6)
In my view, the decision in Settlement Wine is clearly distinguishable from the decision in Re Luck.
In the former there was a valid Statement of Claim setting out a factual basis whereupon liability in law adhered to the appellant in respect of the factual matrix set out by the respondent in the Statement of Claim and the parties rights were fairly and definitively established by the decision. The judgment finally determined the rights between the parties on the factual matrix which was established before the Court.
In Re Luck, on the other hand, the Court decided that the Statement of Claim disclosed no cause of action in law against any appellant. It was therefore struck out but did not finally determine the issues between the respondent and the appellant as there were no issues between the respondent and the appellants properly joined on the pleadings as they then stood. That was not to say that the respondent might not have been able to plead the same or similar facts in a way so as to disclose a course of action. It was just that she had not done so in the proceedings dismissed.
The judgment of Kourakis J in Hardel Pty Ltd v Burrell & Family Pty Ltd (2009) 103 SASR 408 also confirms the point:
[38]An order granting an application for summary judgment is a final order, because it finally disposes of the action by a judgment which creates a new charter governing the substantive rights of the parties.
Mr Doyle, counsel for the appellant, asserts that certain Federal Court cases confirm that Settlement Wine is no longer good law.
I first deal with Mr Doyle’s point that if you can have some orders that are final and some that are interlocutory it would follow that one could not determine the nature of the application until after the order is made or not made as the case may be.
I do not agree with that. It may well be true that an order could be interlocutory or final. It is, however, according to the relevant Rule of Court, whether the affidavit is for the purpose of interlocutory proceedings which determines whether hearsay may be used. If the purpose of the proceeding is for a final order hearsay evidence is not permitted because the affidavit would be for the purpose not of interlocutory proceedings. If the purpose of the proceeding is for an interlocutory order then hearsay may be used.
In other words one does not have to await the Judge’s decision in order to determine the admissibility of the affidavit material as its admissibility is to be determined on whether the purpose of the proceeding and hence the purpose of the affidavit is for a final or interlocutory order.
Mr Doyle placed some reliance on paragraph 9 of the joint judgment of the High Court in Re Luck:
[9]Given the long established English rule, the decision in Tampion and our decisions in Pye, Hall, Carr and Bienstein, we see no valid reason for departing from the rule laid down in Tampion. An order is an interlocutory order, therefore, when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious, or an abuse of the process of the court or does not disclose a reasonable cause of action.
Far from supporting the proposition that Settlement Wine is no longer good law, in my opinion it confirms the distinction between cases like the present case where there is a comprehensive Statement of Claim and a Defence and judgment given upon that Statement of Claim thus finally settling the dispute between the parties on that factual scenario and the applicable law.
The matters referred to by the High Court, on the other hand, in para 9 are all matters where there is not an issue properly joined between the parties requiring and being given a definitive legal resolution.
Mr Doyle also refers to Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 259 ALR 319. At first instance in that case, a Judge of the Federal Court had provided the respondent with two opportunities to amend his pleadings. Eventually the appellant sought to have the claim summarily dismissed on the grounds that it had no reasonable prospects of success, was frivolous, vexatious, embarrassing and an abuse of process. The application was allowed and the claim of the respondent was dismissed.
The respondent sought leave to appeal.
Section 31A of the Federal Court Act 1976 is as follows:
Summary judgment
(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.
(4) This section does not limit any powers that the Court has apart from this section.
(5) This section does not apply to criminal proceedings.
By Notice of Motion the respondent sought inter alia that the proceedings be summarily dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 on the basis that they had no reasonable prospects of success, and that they be summarily dismissed pursuant to O 20, r 5 of the Federal Court Rules on the basis that they were frivolous or vexatious and an abuse of the process of the Court and pursuant to O 11, r 16 on the basis that the proceedings disclosed no reasonable course of action, were frivolous and vexatious and embarrassing.
The primary Judge made orders that the motion be allowed and the application be dismissed.
The respondent appealed.
If the appeal was from an interlocutory judgment then leave to appeal was required.
The Court concluded that:
[38] An order is an interlocutory order when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious, an abuse of the process of the Court or does not disclose a reasonable cause of action: per McHugh ACJ, Gummow and Heydon JJ in Re Luck at [9].
[39]There have been numerous cases in the High Court which illustrate orders that are interlocutory and orders that are final applying the test as stated above:
·Orders dismissing applications for interlocutory injunctions and for orders striking out matter within a statement of claim, which it was said tended to prejudice and embarrass a defendant and to delay the fair hearing of the suit, are interlocutory; per Dixon, Williams, Webb, Fullagar and Kitto JJ in Pye v Renshaw; (1951) 84 CLR 58 at 64 and 77; [1951] ALR 880 (Pye).
·Orders upholding a demurrer ore tenus to a statement of claim and granting a respondent liberty to amend a statement of claim are interlocutory (per Dixon, Williams, Webb, Fullagar and Kitto JJ in Pye at 64 and 77).
·An order refusing an application for an extension of time within which to institute proceedings against the Nominal Defendant under s 65A(3) of the Traffic Act 1925 (Tas) is interlocutory; per Taylor, Windeyer and Owen JJ in Hall at CLR at 441, 445 and 447; ALR 715-16, 719 and 720-1.
·Orders setting aside an order for substituted service and setting aside orders relating to the deemed validity of service of process are interlocutory (see Licul v Corney; (1976) 180 CLR 213; 8 ALR 437; see in particular, per Gibbs J, as his Honour then was, at CLR 225; ALR 446.
·An order refusing to set aside a default judgment is interlocutory. It does not, as a matter of law, finally dispose of the rights of the parties, whatever its practical effect may be; see Carr at CLR at 248, 257 and 258; ALR 450, 457-9 457 and 458.
·An order dismissing an application for removal of Family Court proceedings into the High Court is interlocutory: see Bienstein v Bienstein (2003) 195 ALR 225; 30 Fam LR 488; [2003] HCA 7 at [29].
·An order staying an action as an abuse of process on the ground that the matters in question which it was sought to raise could and should have been litigated in earlier proceedings was a final one: Gibbs J, as his Honour then was, Mason and Murphy JJ agreeing, in Anshun( No. 1) at CLR 38; ALR 249.
[40] In our opinion, a case where summary judgment is given for a respondent in the absence of the full and complete factual matrix and full argument thereon, the court being satisfied that the moving party has no reasonable prospect of successfully prosecuting the proceeding is no different from a case where an order is made dismissing an action because it is frivolous, vexatious, an abuse of the process of the court or does not disclose a reasonable cause of action (see Re Luck) or one dismissing an appeal from an order of a master refusing to set aside a default judgment (see Carr) (see Zoia v Commonwealth Ombudsman Department (2007) 240 ALR 624; 99 ALD 229; [2007] FCAFC 143 (Zoia) per Spender J, Gilmour J concurring, at [14] and [19] and per French J as his Honour then was at [26]).
We respectfully disagree with the views expressed by Finkelstein J in Jefferson Ford at [12] that “[i]n an application for summary judgment, the judge resolves the dispute on the merits”, and by Gordon J, by way of obiter dicta, at [164] that “an order granting summary judgment on all claims ... is a final order because there are no further substantive rights in issue”.
What the judge does, when considering a summary judgment application, is make a determination, on the material then before the court, as to the prospects of the moving party successfully prosecuting the proceeding. The legal effect of such a judgment is not final.
In my opinion, in the subject case the full and complete factual matrix and full argument is provided by the pleadings and affidavits tendered. It is not a case where “summary judgment is given for a respondent in the absence of the full and complete factual matrix and full argument thereon”.
Moreover none of the examples cited above involve an application for summary judgment for the plaintiff based upon the pleadings and affidavits.
Where the pleadings of the plaintiff or part of them are accepted, as indicated in the Defence, there is a complete factual matrix and hence, in my view, there is a relevant distinction between cases where a Statement of Claim is struck out and cases where judgment is entered because the Statement of Claim is frivolous, vexatious or an abuse or doesn’t disclose a reasonable cause of action. Here, where the issues are sufficiently defined as to enable a plea of res judicata or issue estoppel to be able to succeed on the strength of the ruling, there is a complete factual matrix.
The next case referred to by Mr Doyle was Luck v University of Southern Queensland (2009) 176 FCR 268. In that case the appellant made a request for access to documents from the University of Southern Queensland under the Freedom of Information Act. The university did not respond which was a deemed refusal and the appellant sought review.
The Administrative Appeals Tribunal determined that it had no jurisdiction under the Administrative Appeals Tribunal Act 1975 because the university was not “a prescribed authority.”
The appellant filed a Notice of Appeal in the Federal Court and the University filed a Notice of Motion seeking to have the appeal summarily dismissed under s 31A(2) of the Federal Court of Australia Act 1976.
The Judge who heard the matter dismissed the appeal on the basis that the appellant had no reasonable prospect of success in prosecuting the proceeding.
An issue for determination by the Full Court was whether the Judge erred in finding that there was no reasonable prospect of the appellants succeeding in establishing that the Tribunal had jurisdiction to hear her application.
Section 24(1) A of the Federal Court of Australia Act stated that:
An appeal from an interlocutory judgment of a single Judge could not be brought without leave.
The appellant claims she was entitled to appeal as of right and that the decision appealed from was not interlocutory.
The Full Court held that leave to appeal was required because an order under s 31A(2) of the Federal Court of Australia Act determining that an applicant has no reasonable prospects of success was interlocutory.
The basis upon which the primary Judge held that Ms Luck had no reasonable prospect of successfully prosecuting the proceeding was that the Tribunal had no jurisdiction to hear her application. (See p271 para 5).
In his judgment Graham J says:
[17]In my opinion, an order dismissing an action for want of jurisdiction is no different from an order dismissing an action because it is frivolous, vexatious, an abuse of the process of the court or does not disclose a reasonable cause of action. Similarly, in a case where summary judgment is given for a respondent in the absence of the full and complete factual matrix and full argument thereon, the court being satisfied that the moving party has no reasonable prospect of successfully prosecuting the proceeding (see per Spender J, Gilmore J, concurring, in Zoia v Commonwealth Ombudsman Department (2007) 240 ALR 624 at [14], [19] and per French J as His Honour then was at [26]).
It is noteworthy that the reference in paragraph 17 to a case where summary judgment is given confines it to where there is an absence of the full and complete factual matrix and full arguments thereon.
In all the matters referred to by Graham J the initiating proceedings are inadequate such that there could never be a plea of issue estoppel or res judicata whereas in the instant case such a plea would succeed as the pleadings and the judgment set out the basis for the factual findings which have been made the subject of a final adjudication between the parties.
Rares J said as follows:
[101]In my opinion a judgment or an order under s 31A(2) that determines that an applicant has no reasonable prospect of successfully prosecuting a proceeding is interlocutory. I have held that s 31A requires a prediction of the outcome of a trial on the merits and is not an actual adjudication of those merits: Jefferson Ford 167 FCR 372 at [45]. I examined the nature and order under s 31A in that judgment. I concluded that proceedings may still be dismissed or judgment given under s 31A on the ground that the claim or defence is hopeless or bound to fail, as well as on the express ground in the section that there is no reasonable prospect of successfully prosecuting or defending the proceeding.
The difference is that here there is an adjudication on the merits. The respondent’s case is expounded in the Statement of Claim and the defence, in their filed Defence, put forward their answer to the claim. When their answer, even if accepted, is seen to be inadequate as here then the decision finally determines the issues between the parties.
The next case I have been asked to consider is Hardel Pty Ltd v Burrell & Family Pty Ltd (2009) 103 SASR 408. In this case an application was made by the appellant to set aside a statutory demand. The application to set aside the demand was dismissed by a Master and the appellant appealed against the decision to a single Judge.
Rule 17 of the Supreme Court Rules 2006 provides as follows:
17—Appeal to Full Court
(1) An appeal lies, as of right, from a final judgment of a Master to the Full Court.
(2) An appeal lies, as of right, from any other judgment of a Master to a single Judge of the Court.
It follows that the appropriate Court to appeal to was the Full Court if the judgment of the Master dismissing the application to set aside the statutory demand was a final judgment.
The Full Court ruled that an order dismissing an application to set aside a creditor’s statutory demand under the Corporations Act is not a final judgment.
The principal judgment of the Court was delivered by Kourakis, J. Having dealt with some of the plethora of conflicting judgments in this area His Honour has proposed a reformulation of the dichotomy between interlocutory and final proceedings and orders as follows:
[34]In my respectful opinion there is much utility in the reformulation of the interlocutory/final dichotomy by reference to the concept of procedural or adjectival orders on the one hand, and orders determining substantive rights and obligations on the other. Disputed questions of law may arise between persons about the scope and extent of those rights and obligations, as may factual disputes about the circumstances which attract them. Rights carry with them a co-relative right to enforcement or remedial orders if those obligations are breached. It is the function of courts to adjudicate those controversies. As Kitto J observed in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd:
[J]udicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons.
[35]A final order is generally one that creates the “new charter” to which Kitto J referred. It is the very essence of the exercise of judicial power that it finally settles the controversy which is the subject matter of the action, and thereby precludes any further application for another or different orders with respect to that matter; to ask whether a further application can be brought for the purpose of determining whether an order is final or interlocutory conflates cause and effect.
[36]Conversely, decisions on whether the court’s jurisdiction to adjudicate a controversy has properly been invoked, and on whether its procedures for determining that controversy have been complied with, are generally adjectival and therefore interlocutory. Speaking loosely it might be said that parties have a right to the correct and proper application of the procedural rules of the court to the litigation they conduct within it. Indeed, if the proper procedure is not applied, the parties can generally seek leave to appeal procedural orders. However, parties do not have “rights” against the judicial tribunals that determine their controversies in the same sense that they have rights against each other under the substantive law.
[37]The distinction between substantive and adjectival orders to which I have referred is not the same as, but may be informed by, the distinction drawn by the common law between procedural and substantive legislative amendments for the purpose of determining whether the legislation will be given retrospective or prospective effect.
[38]The distinction, I think, also explains why in some cases different orders made on the same application may be interlocutory or final depending on the result. An order granting an application for summary judgment is a final order, because it finally disposes of the action by a judgment which creates a new charter governing the substantive rights of the parties. However, an order dismissing an application for summary judgment merely decides that the procedure by which the controversy will be determined will be the ordinary trial procedures of the court, and not the summary procedure that the party attempted to invoke.
(My underlining)
As to the remarks of His Honour that in some cases different orders made on the same application may be interlocutory or final, an issue raised by Mr Doyle during the conduct of this appeal, I simply note that the test under Rule 162 speaks of the purpose of the affidavit. As I have said, the purpose of the affidavit may be for interlocutory or final proceedings depending on whether the order that is being sought is interlocutory or final regardless of whether the ultimate order made is interlocutory or final.
Finally, in JT Nominees Pty Ltd v Macks (2007) 97 SASR 471 Bleby J, speaking of Rule 232 said as follows:
[41]Rule 232, although not on the same terms, is the successor in the 2006 Rules to r 25.02 (claim for summary judgment by a plaintiff) and r 25.04 (claim for summary judgment by a defendant) of the 1987 Rules. Those rules were in turn based on the provisions of O 10, r 1 of the Supreme Court Rules, as they were then known (“The 1947 Rules”). For an explanation of the difference see Settlement Wine Co. Pty Ltd v National & General Insurance Co. Ltd.7
[42]It is clear that the remedy of summary judgment is discretionary. Unlike rules which allow pleading or proceedings to be struck out where a pleading discloses no reasonable cause of action, consideration of the application is not limited to the pleadings. The court must make an assessment of both matters of fact and of law. The application will usually be decided on affidavits and by reference to documents referred to in the pleadings, although in some cases it may be necessary or desirable to hear brief oral evidence. …
The interpretation of Rule 232(2)(b)
[44]The rule has its origin in O 10 of the 1947 rules. Order 10, r 1 allowed a plaintiff or defendant to apply to a judge for “any relief which he claims or to dispose of the action summarily”. No other criteria were specified.
[45]Under O 10, r 4 the court was able to make “an order that judgment be entered for the plaintiff or defendant (as the case may be) for the relief claimed, or such portion thereof, or such other relief or declaration as may be just, or otherwise disposing of the action, or of any issue or question in the action”.
[46]As Bright J noted in Bellas v Kipouros,8 it was devised as a South Australian expedient. It did not have a counterpart in the UK Rules of Court or in other Australian jurisdictions. It was for an applicant to show cause why the matter should not be dealt with in the ordinary trial list. Of the procedure under O 10 of the 1947 Rules, King CJ said in Wicklow Enterprises Pty Ltd v Doysal Pty Ltd that O 10 was inappropriate for the resolution of substantial disputes as to facts or even as to the law requiring extensive argument and considerations. He said:
The Summons for Immediate Relief [O 10] is a convenient vehicle for disposing expeditiously of cases in which there is not substantial dispute or in which the nature of the dispute is such that it can be resolved readily and speedily in Chambers. An attempt to determine by means of the Summons for Immediate Relief issues of fact and law requiring substantial hearing time produces mischiefs which are well illustrated by the course which the present case took.10
[47]The operation of O 10 and its successors is not to be confused with the operation of other rules relating to striking out pleadings or dismissing actions based on defective pleadings, nor with rules allowing summary judgment based on what were formally known as specially endorsed writs.
Conclusion
In my view the decisions in Hardel Pty Ltd v Burrell & Family Pty Ltd and JT Nominees Pty Ltd v Macks affirm that Settlement Wine is still good law in South Australia.
I am of the view that the decision of the Master to grant the summary judgment was correct. The purpose of the proceedings was not interlocutory proceedings as it was to obtain summary judgment. The affidavits to be used in them were therefore not for the purpose of interlocutory proceedings and were therefore required to be “confined to matters that the witness knows of his or her own knowledge” District Court Civil Rules, 2006 SA (Rule 162(2))
Fresh evidence
The second aspect of the appeal is an application to have the Court receive fresh evidence on the appeal.
The test for fresh evidence on an appeal is as set out in Ventura v Sustek (1976) 14 SASR 395. There the Full Court approved of the remarks of Denning LJ, as he then was, in Ladd v Marshall [1954] 1 WLR 1489 at 1491:
To justify the reception of fresh evidence on a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible.
The Deed of Release
It is necessary to deal first with the argument that the Deed of Release signed by the appellant would preclude any claim for damages for misrepresentation as is supported by the fresh evidence.
It is important to recognise that the question is simply whether such a claim is arguable as, on an application for summary judgment, a successful claim that a matter was arguable would preclude the summary judgment. The parties have referred to Bank of Credit & Commerce International SA v Ali & Others (2001) 2 WLR 735, a judgment of the House of Lords. In that case defendant employees made compulsorily redundant by the bank signed an agreement accepting the terms of a settlement, “In full and final settlement of all or any claims … of whatsoever nature that exist or may exist” against the bank.
When the bank went into liquidation, liquidators sought to recover loans made to the employees who counter-claimed damages for misrepresentation and breach of their employment contracts as a result of which they alleged they were disadvantaged on the labour market. The bank contended that the agreements signed by the employees were binding compromise agreements precluding their claims.
Lord Bingham in his speech said as follows:
[10]But a long and in my view salutary line of authority shows that, in the absence of clear language, the court will be very slow to infer that a party intended to surrender rights and claims of which he was unaware and could not have been aware. In Cole v Gibson (1750) 1 Ves Sen 503, 507, Lord Hardwicke LC said:
I will not say, there may not be such confirmation or release given, as may release the remedy of the party; for it is hard to say that in a Court of equity, a man having a right of action or suit to be relieved in equity, and knowing the whole of the case, may not release that, on whatever consideration it arises, so far as regards himself: but it must be applied to that particular case, doing it with his eyes open, and knowing the circumstances.
His Lordship concluded as follows:
[19]On a fair construction of this document I cannot conclude that the parties intended to provide for the release of rights and the surrender of claims which they could never have had in contemplation at all. If the parties had sought to achieve so extravagant a result they should, in my opinion, have used language which left no room for doubt and which might at least have alerted Mr Naeem to the true effect of what (on that hypothesis) he was agreeing.
In my view in relation to the fresh evidence material ascertained subsequent to the signing of the Deed of Release it is at least arguable that the Deed of Release does not preclude the appellant from reliance on it.
In this matter the appellant and respondent had entered into a contract on 4 September 2006 in which the appellant agreed to purchase a villa and marina berth at stage two of the Newport Quays Development known as Marina Cove.
Settlement was initially to occur on 27 February 2009 but the appellant sought, and was granted, extensions of time to settle eventually until 31 March 2009.
On 8 April 2009 a Deed was entered into by the appellants and the respondents in which the respondent granted further time to the appellant to settle on the contracts to 1 May 2009 and agreed not to charge default interest if settlement occurred on that date.
Clause 7 of the Deed is in the following terms:
Save for any claim that De Lyster may have against Newport pursuant to the terms of the Dwelling Contract or the Berth in relation to defective works, De Lyster shall by execution of this Deed, forever release and discharge Newport or any related entity of Newport (as that expression is defined in the Corporations Act 2001) from all claims, suits and demands including as to interest and costs that De Lyster could now or at any time make against Newport or any related entity of Newport (as that expression is defined in the Corporation Act 2001) arising out of the Dwelling Contract or the Berth Contract.
(Exhibit JK14, affidavit of John Kavanagh, 3 November 2009)
The appellant failed to settle on 1 May 2009 and further on 29 May 2009 having been given a notice of default requiring that he settle on that date. The respondent terminated the contract on 2 June 2009.
The first objection to the receipt of the fresh evidence is that the Deed of 8 April 2009 purportedly releases the respondent from all claims arising out of the Contracts and is quite clear in that regard.
For their fresh evidence point the appellants rely on a category of representations which they describe as environmental representations. They were made prior to entry into the original contracts.
The appellant says they are in a different category to other representations made prior to entry into the contract which the Master held were covered by the Deed of Release of 8 April 2009 on the basis that at the time of entering into that Deed the appellants were not aware of the falsehood of them.
It is the case for the appellant that these environmental representations, were not known to be false by the appellant at the time he entered into the Deed and hence are not covered by the Deed of Release.
The fresh evidence materials
An affidavit of Richard James Temlett dated 17 November 2010.
This is an affidavit which annexes a communication from Troy Tyndall, a partner of Toop & Toop Real Estate, who asserts that there has been significant resistance from consumers to potential purchases in the Newport Quays development suggesting that media coverage about an EPA report has been a significant factor in the consumer sentiments.
The opinion expressed in the affidavit is hearsay because it is not the opinion of the deponent.
An affidavit of Theodoor De Lyster dated 11 November 2010.
In it he asserts that in late October 2010 he became aware of various news articles and stories about air pollution, affecting development at Newport Quays.
He further asserts that he became concerned about these reports and the effect of pollution on the value of property associated with the development. He had not been told anything about this issue before.
Upon reviewing the reports he noted the following:
(1) That the EPA had been monitoring “particles at the Le Fevre Peninsula” since December 2004 and that “…existing monitoring and modelling data suggests that the level of particles (including cement, dust) in the greater Port Adelaide Centre Zone composed significant health nuisance to new residents. (at page 5)”
(2) That the EPA considers that the site at Newport Quays Precinct 5 (the “Dock 1” Development) is not suitable for residential development and is therefore unable to support the proposed land division. (at page 11)”
From the October 2006 EPA report he noted that it referred to testing carried out at “Jenkins Street, Birkenhead” which is less than 500 m from the property and the marina berth that is the subject of these proceedings.
In particular the report identified the following:
·The PM10 NEPM standard of 50 mg/m3 was exceeded 16 times during the monitoring period, making it the most affected area in metropolitan Adelaide so far identified.
·Ten minute average benzene levels greater than 100 mg/m3 were measured on a number of occasions. Maximum 1-hour concentration of benzene exceeded 50 mg/m3 on two occasions.
·Elevated toluene levels (below WHO guideline) were detected at the same time as high benzene levels were measured. This suggests the same source(s) for both pollutants.
The deponent further asserts that he entered into the property contract on 4 September 2006 and that prior to entering into the contract a number of representations were made concerning the environment of the area surrounding the Newport Quays Development.
In particular he refers to a document entitled “Official Newsletter of Newport Quays” which, at page 3, refers to:
NATURE’S PARADISE…
With more than 160 existing public reserves walking trails, picnic reserves, playgrounds and bicycle paths, the Port’s natural environment will only be enhanced by Newport Quays.
The Exhibit TD1 to the first affidavit of the deponent is a promotional brochure which the deponent claims to having read and relied upon. It refers to the following:
·“Marina Cove is set to become a world class destination”
·“For those with a love of a carefree lifestyle by the water without compromise, there’s no better place to live”
·“Marina Cove’s harbour homes are the epitome of the ultimate waterfront address”
·“Soak up the parkland and harbour atmosphere in your Marina Cove park terrace”
Further representations were said to have been made by Mr Theunissen, who, I infer, was a representative of the respondent. Broadly speaking the representations are to the effect that the appellant would be purchasing in a pristine, natural and clean environment.
As to the material said to prove the falsity of the representations it is all hearsay in the sense that it relies on reports annexed to the affidavit of Mr De Lyster who cannot depose to the truth of the contents of the reports.
In my view the material in the affidavits of Mr Temlett and Mr De Lyster, if capable of being relied upon, is capable of establishing that there is an arguable case for misrepresentation.
Reliance on hearsay
This proceeding is an appeal from the decision of a Master of the District Court pursuant to DCR17 and s 43(2)(a) of the District Court Act 1991.
As has already been observed Rule 162 of the District Court Rules 2006 governs the use of affidavits.
This proceeding being an appeal is not an interlocutory proceeding within the meaning of Rule 162(2). Accordingly, the parties are required not to use hearsay in affidavit material unless the requirement of Rule 162(2) is dispensed with under the exception number two.
I am prepared to dispense with the requirements of Rule 162(2) for the following reasons:
(1) We are not talking about fresh evidence after a final trial and judgment on the merits but only for the purposes of considering material that the appellant asserts could not reasonably have been put before the Master on a summary judgment application where the test is whether there is an arguable case.
(2) The material is in the nature of reports from a public authority and therefore is likely to be the genuinely held opinion of its author or authors and as it emanates from a public authority there is less likelihood of it being a non genuine assertion of fact.
(3) This appeal was lodged on 12 October 2010 and the material only came to light in October 2010 and the appellants could not reasonably have been expected to have put before the Court direct scientific opinion in so short a period of time.
Conclusion
I am of the view that the evidence could not have been obtained with reasonable diligence for use at the hearing before the Master. At that stage it had not even occurred to the appellant that there might be a dangerous level of particulate emission from any industrial plant within reach of the development. Certainly, the appellant could have been expected to be aware of the general geographical location and, in a broad sense, the type of activities that occurred within the area. I would not, however, have expected the purchaser of premises in such a development to conduct studies on particulate emissions within the area.
Such a task would be onerous and perhaps impossible without the sanction of Government to intrude on the premises to be tested and the resources to conduct the appropriate tests.
Moreover, I would not have thought it reasonable to expect a potential purchaser like the appellant to have enquired of Governmental and other scientific agencies as to whether any studies existed in relation to the air quality in the particular area. Certainly it is not one of the usual enquiries made on behalf of purchasers in relation to land sales in South Australia.
In my view the evidence can be described as probably having an important influence on the result of the case. It is important to remember that the issue in the proceeding appealed from was whether the appellant had an arguable case on which to defend the proceedings. If the appellant had been able to produce this material to the Master, in my view the evidence is likely to have had an important influence bearing in mind that it need not be a decisive influence.
Thirdly, in my view, the evidence is apparently credible though it need not be incontrovertible.
I have already said in connection with the granting of permission for affidavits containing hearsay that the material emanates from a public authority and to that extent is apparently credible, no argument having been put against its prima facie credibility.
Summary
I conclude for the above reasons that the Master was correct in holding that the proceedings before him were not for the purposes of interlocutory proceedings and hence reliance could not be placed upon affidavits containing hearsay at that hearing.
Further, in my view, these proceedings themselves are not interlocutory proceedings and affidavits for these proceedings could not be said to be “made for the purpose of interlocutory proceedings”.
I would nevertheless dispense with the requirements of Rule 162(2) for the reasons I have outlined.
That being the case I would permit the hearsay material in these proceedings that the appellant seeks to lead.
As I am of the view that it is at least arguable that the Deed which purports to protect the respondent from liability for misrepresentations does not cover material of which neither party was aware of at the time of entering the Deed, I am of the view that it is at least arguable that the fresh material would have had an important influence on the result. In my view it was shown that it was evidence that could not have been obtained with reasonable diligence and it is apparently credible.
Accordingly I will allow the appeal and quash the order of the Master entering summary judgment.
I will hear the parties as to such other orders as may be appropriate and as to costs.
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