Dunmore Farming Pty Ltd v Grugeon
[2014] WADC 148
•22 OCTOBER 2014
DUNMORE FARMING PTY LTD -v- GRUGEON [2014] WADC 148
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WADC 148 | |
| Case No: | BUN CIV:25/2013 | 18 SEPTEMBER 2014 | |
| Coram: | PRINCIPAL REGISTRAR MELVILLE | 22/10/14 | |
| PERTH | |||
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Costs be in the cause | ||
| PDF Version |
| Parties: | DUNMORE FARMING PTY LTD JASPER ROLAND GRUGEON COLEEN KATHLEEN GRUGEON |
Catchwords: | Summary judgment Triable issue Special circumstances Costs |
Legislation: | Rules of the Supreme Court 1971 O14 |
Case References: | Agar v Hyde (2000) 201 CLR 552 Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332 Country Estates Pty Ltd v Leighton Contractors Pty Ltd (1975) 49 ALJR 173 Dey v Victorian Railways Comm (1949) 78 CLR 62 Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 Glover v Roche [2003] ACTSC 19 Lill v Merchant Capital (WA) Ltd (1996) 15 WAR 536 Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 Whitehall Holdings Pty Ltd v Custom Credit Corporation Ltd (Unreported, WASCA, Library No 920347, 19 June 1952) |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
JASPER ROLAND GRUGEON
COLEEN KATHLEEN GRUGEON
Defendants
Catchwords:
Summary judgment - Triable issue - Special circumstances - Costs
Legislation:
Rules of the Supreme Court 1971 O14
Result:
Costs be in the cause
Representation:
Counsel:
Plaintiff : Mr D F Beere
Defendants : Mr C Rimmer
Solicitors:
Plaintiff : D F Beere
Defendants : Jarman McKenna
Case(s) referred to in judgment(s):
Agar v Hyde (2000) 201 CLR 552
Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Country Estates Pty Ltd v Leighton Contractors Pty Ltd (1975) 49 ALJR 173
Dey v Victorian Railways Comm (1949) 78 CLR 62
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122
Glover v Roche [2003] ACTSC 19
Lill v Merchant Capital (WA) Ltd (1996) 15 WAR 536
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Whitehall Holdings Pty Ltd v Custom Credit Corporation Ltd (Unreported, WASCA, Library No 920347, 19 June 1952)
1 PRINCIPAL REGISTRAR MELVILLE: On the 24 December 2013 the plaintiff issued a writ with an indorsed statement of claim seeking damages resulting from the death of 194 cows. It is alleged the deaths were caused by botulism poisoning as a consequence of eating contaminated silage sold by the defendants.
2 On or about the 10 March 2014 the defence was filed and it seems to be common ground that it was served by facsimile on or about 18 March 2014.
3 In its statement of claim the plaintiff pleaded at pars 3 – 5 as follows:
3. In or about August 2013 the defendant sold to the plaintiff various quantities of silage to be used by the plaintiff in feeding the dairy cows located on their Scott River Farm (the Silage Contract).
4. As a result of consuming the silage 194 cows owned by the plaintiff died, 19 of which were yearlings and 179 of which were milkers currently being milked by the plaintiff for the purposes of supplying milk to Browns Foods Operations Pty Ltd.
5. The cause of the death of the cows was botulism and cause of the botulism was consumption by the cows of silage provided by the defendants, such silage containing decayed animal or plant organic matter therein.
4 The defence to these allegations was constituted by little more than bare denials. More particularly the defence provided:
2. The defendants admit that between 15 August and 26 August 2013, various quantities of meadow haylage, Lucerne haylage rolls and oaten small hay bales were sold to the plaintiff but otherwise do not admit paragraph 3 of the statement of claim.
3. The defendants deny paragraphs 4 and 5 of the statement of claim.
5 The defence then goes onto deny a number of allegations pertaining to the operation of the Fair Trading Act(2010) and the Sale of Goods Act (1895).
6 On 21 March 2014 the plaintiff applied to the court for judgment pursuant to the Rules of the Supreme Court 1971 O 14, which application was supported by an affidavit of Robert Frewen Dunnet sworn 18 March 2014.
7 Annexed to the affidavit of Mr Dunnet was that the report of Dr Dario Nandapi, a veterinarian. His report is found at annexure 'RD 1'. In brief he said he had examined a number of animals and that the clinical signs and progression of the disease, and lack of response to treatments for metabolic disease, lead to a diagnosis of botulism. It was his view that it was most likely that a dead animal had been incorporated into a bale of feed that was fed to the cattle from which they were exposed to the botulism toxin.
8 By the time the application for summary judgment came on for hearing on 18 September 2014 the defendant had obtained its own expert opinion as to the cause of death following which it was conceded by the plaintiff that there was a triable issue and that the summary judgment application should be dismissed. It was the plaintiff's contention that the costs of the application should be in the cause but the defendants sought costs on an indemnity basis or, in the alternative, a party/party basis.
9 It seems common ground that normally where a summary judgment application is unsuccessful costs should be in the cause, but in exceptional circumstances the defendant should receive them. The defendants say in this case there are exceptional circumstances. The plaintiff says there is not.
10 The essence of the defendants position is that the summary judgment application should never had been made because it should have been abundantly clear to the plaintiff, before lodging the application, that there was a triable issue and that, therefor, the application should never have been made.
The law
11 In WhitehallHoldings Pty Ltd v Custom Credit Corporation Ltd (Unreported, WASCA, Library No 920347, 19 June 1952) Ipp J, with whom Pidgeon and Owen JJ agreed said the usual order where an application for summary judgment is dismissed is that the costs of the application be in the cause. He went on to observe that it would be in exceptional cases where costs are awarded to the defendant, cases of that kind occurring where the application '… should never had been made'. He went on to say:
The rule that the costs of a summary judgment application may be ordered against an unsuccessful plaintiff where he knows of the existence of a defence rests in essence on the principle that applications for summary judgment should not be brought when the plaintiff is aware or should be aware that the application is hopeless and that it has no prospect of succeeding.
12 By O 14 (1) a plaintiff may on the ground that the defendant has no defence to a claim apply to the court for judgment. By O 14(2) the application is required to be supported by an affidavit verifying the facts on which the claim is made and stating that in the deponent's belief there is no defence to that claim.
13 Order 14 r 3(1) provides that on the hearing of the application judgment may be entered unless the court dismisses the application or the defendant satisfies the court that there is:
(a) An issue or question in dispute which ought to be tried; or
(b) There ought for some other reason to be a trial of the claim, the court may give judgment for the plaintiff.
14 It is clear that a court may dismiss the application for summary judgment where the evidence filed in support of the application fails to verify the facts on which the claim is based, fails to depose to a belief there is no defence or where there is otherwise something in the evidence or omitted from the evidence filed by a plaintiff in support of the application that suggests judgment should not be entered. It has been said in Lill v Merchant Capital (WA) Ltd (1996) 15 WAR 536 that strict compliance is required with O 14, the purpose of the strictness being to
… ensure that the summary procedure never results in the plaintiff obtaining a judgment against the defendant which he would have been unable to obtain if the action had gone to trial in the ordinary way.
15 If the evidence filed by the applicant verifies the facts upon which the action is brought and testifies to the belief there is no defence, in all likelihood the provisions of O 14, insofar as they impose obligations on the plaintiff, will have been strictly complied with. In so doing the plaintiff would have established a prima facie case, effectively transferring the onus to the defendant to place evidence before the court to demonstrate there is a triable issue or there is some other reason for there to be a trial. See MoscowNarodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 (Brinsden J).
16 In most cases the defendant finding itself in this position will file an affidavit setting out facts of circumstances that are said to demonstrate this. However, it is clear that a defendant cannot rely on bare denials and must 'condescend to particularity' MoscowNarodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd (113 - 114).
17 In considering an application for summary judgment brought by a plaintiff it is also necessary to bear in mind the comments of Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde (2000) 201 CLR 552, 575 – 576 where it was said, in slightly different circumstances
Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways (63), but all of the verbal formulae which have been used are intended to describe a high degree of certainly about the ultimate outcome of the proceedings if it were allowed to go to trial in the ordinary way.
18 The defendants' contention that there are exceptional circumstances that justify the departure from the ordinary costs order are set out in its submissions and the affidavit of Elisa Clare McLennan sworn 15 September 2014 at paragraph 47, which although somewhat argumentative, demonstrates the real essence of the defendants case for a costs order.
19 By pars 17 - 20 the defendants submits that summary judgment is reserved for those cases in which it is clear that there is no real question to be tried, the plaintiff's case was circumstantial, the cause of death and source of the botulism gave rise to complex issues of fact and the issues raised on the pleadings were complex and contested.
20 In my view it doesn't assist the defendants to observe that there are complex issues of fact and contested issues. Assuming issues as to the cause of death and sources of the botulism are complex, and I am not convinced they are, if those facts can be confidently found on a summary judgment application it doesn't matter that the path to finding those facts is complex, convoluted or time consuming. In this regard it has been held that the fact that a transaction is intricate does not disentitle a plaintiff to relief in a clear case and extensive argument may be necessary to demonstrate there is no real question to be tried. Dey v Victorian Railways Comm (1949) 78 CLR 62, 91 and Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332, 334.
21 Further, it can't be the case that a plaintiff cannot be successful on a summary judgment application where the case is circumstantial. Reference to a circumstantial case is really reference to case in which the ultimate facts are determined by inferences that are drawn from primary facts. If those primary facts are established and there is only one reasonable inference open, it is not hard to be satisfied as to the ultimate facts. It can, in those circumstances, quite properly be said that there is no real question to be tried.
22 In respect of the contention that the issues raised on the pleadings were complex and contested, it is to be observed that the defence in respect of the allegations of the contraction or botulism and how it was contracted were constituted by nothing more than bare denials. Further, there are a number of reported decisions of summary judgment applications being successful in circumstances where a defence denying liability has been filed and in circumstances in which affidavits purporting to deny liability and to contest the facts have been filed.
23 The question of whether the plaintiff should have known that the summary judgment application was destined to fail from the outset is developed further at pars 21 - 23 of the submissions. There it was said that the mere fact that the defendants outlined the basis of their defence on the pleadings ought to have been sufficient for the plaintiff to assess that it had no prospect of success and that the defendant should not have been required to file their evidence in order to defend the application.
24 I cannot agree. Again I observe that the defence fails to condescend to particulars. On the face of the defence all the plaintiff knows is that the allegation constituted by several facts is denied but does not know what in particular is denied or why. In Moscow Bank (114) support is found for the proposition that a defendant was required to provide particulars in the affidavit filed to oppose the application. An affidavit is filed by a defendant, of course, for the sole purpose of placing of evidence before the court from which it could see there is a triable issue or that there ought for some other reason be a trial of the claim. The cases cited by the defendants in support of that proposition that the mere outlining of the basis of the defence is sufficient for a plaintiff to assess there is no prospect of success do not, in my opinion, support the proposition at all.
25 In Glover v Roche [2003] ACTSC 19, one of the cases cited by the defendants in support of their submission, it was said at [20] – [22] that once there was prima facie evidence of liability the court was able to make orders for the entry for judgment if the defendant did not establish there was at least an arguable defence or for some other reason the defendant should be able to defend the action. At [21] the court observed that the onus imposed on the defendant was not a heavy one and that the defendant only needed to 'establish a state of facts that displaces the prima facie effect of the sworn statement …' filed on behalf of the plaintiff. At [22] the court observed again, that the defendant cannot rely upon bare denials and 'must condescend to particularity'.
26 Hence, it can be seen from those statements of principle, once the affidavit is filed there is some onus on the defendant to demonstrate a 'state of facts' that that warrant a trial. The 'state of facts' is usually established by evidence in the form of an affidavit, not from the pleadings in a defence.
27 Further, in Glover v Roche a defence had been filed. One of the plaintiffs deposed to the fact that he believed there was no defence to the claim and, further, to his belief the defence and counterclaim was filed 'purely for the purposes of delay'. Notwithstanding the fact the court was presented with a defence raising a number of issues that the defendant contended warranted a trial, summary judgment was entered for the plaintiff. Accordingly, in my view, far from being authority for the proposition that a filed defence in itself is sufficient to defeat an application, the case stands as authority to the contrary.
28 Nor am I able to see how Country Estates Pty Ltd v Leighton Contractors Pty Ltd (1975) 49 ALJR 173 supports the defendants' contentions. In that case, Barwick CJ observed in respect of an appeal by a defendant against an order entering summary judgment, the following:
No affidavit was tendered by an officer of the appellant, no defence was formulated and, in my opinion, reading the engineers summary as favourably to the appellant as I am able, no evidence is contained in the material offered of a present cause of action sounding in damages, whether it be called a set-off or a counterclaim.
29 He went on to say:
I cannot imagine a less satisfactory method of attempting to satisfy a judge under O XV11 r.1 of the existence of a triable issue other than the method adopted by this appellant.
30 At pars 23 – 24 the defendants submit the plaintiff brought the application despite having being served with the defendants' defence, in the knowledge that the defendants intended to lead expert evidence in support of their defence, that there had been exchange of correspondence in which the defendants are said to have 'seriously contested the plaintiff's claims in relation to the silage provided by the defendants, that the defendants face difficulties in defending the application in the absence of discovery and that the defendants were entitled to the benefit of full discovery before briefing their expert.
31 I find that the submission that the defendants intended to lead expert evidence curious and is one with which I have real difficulty. The proposition, at that stage, that the defendants intended to lead expert evidence seems to assume without question that any expert engaged by the defendants would provide an opinion that supported the defendants' bare denial of liability and doesn't countenance the possibility that the expert engaged by the defendants would express an opinion supportive of the plaintiff's claim. To that extent the nature of the evidence the defendants hoped to obtain was hypothetical and speculative. Further, in one sense the submission can be seen as an acknowledgment that in the absence of obtaining the desired expert opinion the defendant had no evidence available to them with which to positively defend the plaintiff's case.
32 In my view annexure ECM 2 to the affidavit of Elisha Claire McLennan is revealing in terms of the defendants' attitude and approach to the defence of the action generally and the summary judgment application in particular. In that letter (letter of Jarman McKenna) to the plaintiff's solicitors dated 12 March 2014 it was said:
With respect, our client is not required to produce its expert evidence at this stage of the proceedings.
Our client is entitled to the benefit of full discovery prior to briefing its expert to provide an opinion in relation to this matter.
33 In this regard I would observe that, at that stage of the proceedings the defendants were facing a summary judgment application. That might have been a good time to produce their expert evidence, if they had it, particularly in support of what was in my view nothing more than a bare denial of liability contained in the defence.
34 No authority was cited for the proposition that full discovery was an entitlement before briefing the defendants' expert. The defendants were always at liberty to brief their expert without full discovery and at liberty to brief their expert for an opinion on the facts as pleaded and as deposed to in the plaintiff's affidavit.
35 Part of the problem in this case lies in the apparent concession by the plaintiff's solicitor that the defendants were entitled to full discovery prior to briefing their expert and that the defendants faced difficulties in answering a summary judgment application given they did not have sufficient material to instruct an expert. This apparent concession is found in his letter of the 17 March 2014, four days before the filing of the summary judgment application (annexure ECM3). However, when the letter is read in full any concession in this regard takes on a more equivocal nature. In the last paragraph of that letter the plaintiff's solicitor said:
In the event that the expert report differs in its conclusion from my client's expert, I concede that it might be appropriate for the summary judgment application to be adjourned or dismissed because of the need to have the expert evidence dealt with at trial
36 Hence, when viewed in that light, the plaintiff's solicitor seems to be saying that in his view, on the evidence currently available there is no defence, and that there would only ever be a triable issue in the event there was a conflict in the expert evidence. This personal opinion appears to be further demonstrated by his comments in his earlier letter of the 5 March 2014 (annexure ECM1) in which he says:
However, to date I have seen no documentation emanating from your office which would suggest that the cause of death was anything than as concluded by Dr Nandapi and on that basis alone it seems to me that my client is entitled to apply for judgment.
37 Nor am I convinced the concession, if made, was correctly made. In MoscowNarodny Bank (116) it appears the defendant argued without success that it ought to have the opportunity to interrogate and to cross-examine to see if there was a possible defence that the promissory notes were not properly executed. That is little different to an argument that a party should be permitted to have discovery of documents to see if there is a possible defence.
38 No doubt much will turn on the fact of the particular case. In some cases such as that in Moscow Narodny Bank it may have seemed clear to the court that the facts demonstrating liability were so strong and the lack of a defence so obvious it did not warrant a departure from the ordinary position that a party should be able to place his or her case before the court after taking advantage of the usual interlocutory processes referred to in Agar v Hyde. In this case, at the time the summary judgment application was brought, it seems the evidence was all one way and the defendants wanted to invoke the interlocutory process to embark on a voyage of discovery in the speculative hope they could land upon some ground that could be used to positively contest the facts averred by the plaintiff. It is one thing to want to use the interlocutory processes of discovery to support a defence. It is another to use the process to go in search of a possible defence that does not presently exist. To allow a party to utilize the interlocutory processes in the latter circumstances completely undermines the efficacy and purpose of a summary judgment application which is designed to eliminate the cost and delay associated with trial and pre-trial procedures where there is no triable issue demonstrated.
39 There can be a fine line between forming a view that there is no defence to a claim and therefore it is a waste of time and money to allow a defendant to engage in the costly and time consuming pursuit of discovery processes in the hope of stumbling upon a defence on the one hand and the slightest evidence of a defence that might only be proven by access to facts exclusively or predominately on the possession of the plaintiff and which can only be accessed by those procedures on the other. In the latter case the defendants should be given the opportunity to place their case before the court in the usual way and the summary judgment application should be dismissed. In some cases the difference in the two positions if marked by a fine line and calls for a judgment on which minds will differ. In such circumstances it is hard to say the differing judgment represents an unreasonable position.
40 However to persuade a court to dismiss a summary judgment application on the basis it is demonstrated that the defendant needs discovery in order to be able to fairly present its defence is one thing. To persuade a court that the plaintiff should pay the defendants' costs incurred in demonstrating this to the court is something else, particularly when there is a fine line between deciding whether the defendants have demonstrated there is an arguable defence that needs to be investigated on the one hand, or that the defendants want to go in search of evidence of a defence in the first place on the other hand.
41 Having regard to the comments of Ipp J in Whitehall Holdings the defendants need to satisfy me that the plaintiff was aware or should have been aware that the application was hopeless and that it had no prospect of succeeding. I am not persuaded. From the plaintiff's perspective all the evidence was one way and it is clear that the plaintiff did not accept the defendants bare denial of its case as pleaded. In those circumstances I am not prepared to find that the plaintiff was or should have been aware that the application for summary judgment was hopeless. The mere fact the defendants may have asserted, and asserted strenuously, that they were not liable does not mean that they weren't or that the plaintiff must accept those strenuous denials. As said in Australian Can Co Pty Ltd:
… the length at which or the detail in which or the vigour with which counsel has argued the matter cannot be the determining factor.
42 There needs to be something more and that something more should have been constituted by a defence and or affidavit that condescended to particulars in response to an affidavit in which the plaintiff swore to a belief that there was no defence.
43 In short I do not consider the plaintiff's actions either unreasonable or so unreasonable as to warrant a departure from the normal rule that costs should be in the cause.
Costs on an indemnity basis
44 If I am wrong in coming to this view that the plaintiff should not be required to pay the defendants' costs, I would not award costs to the defendants on an indemnity basis. Firstly I am unable to find that the costs the defendants have incurred in defending the summary judgment application exceed more than that allowed on the scale.
45 The evidence that the costs are 'estimated' to be in the vicinity of $40,000 implies that the defendants have not presently been billed for the work. The 'estimate' lacks detail and may suggest that the defendants will be given a bill for something in that region at some time in the future, or may mean their solicitors have approximately $40,000 work in progress recorded against the file. As the 'estimated costs' are vastly in excess of the scale the defendants' liability to their solicitors could only be in the vicinity of $40,000 in the event there was a costs agreement that permitted the defendants' solicitors to charge their client in excess of the scale. No cost agreement was tendered.
46 In Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 [30] Pullin J said:
… it is my opinion that if a party wishes to seek a special costs order or an indemnity costs order to allow costs to be taxed on the rates stated in a cost agreement, then the terms of the costs agreement should be disclosed to the Judge who is being asked to make the order. This should not be left to emerge as an issue before the taxing officer.
47 Notwithstanding the opinion evidence of Ms McLennan that the defendants will not be adequately compensated by an order that the plaintiff pay the defendants costs on a party/party basis, I am not persuaded. Firstly, I am not persuaded that the defendants will be required to pay their solicitors costs in excess of the scale. Secondly, if the defendants are entitled to a costs order, they should be entitled to recover reasonable costs. I am far from persuaded the costs estimated in defending the summary judgment application are reasonable.
48 Thirdly, I do not consider the plaintiff's behavior, if it should be regarded as wrongly pursuing this summary judgment application, such as to warrant the degree of disapproval that would justify an indemnity costs order. The defendants' position on costs also seems somewhat paradoxical. That is, if the plaintiff's application was so obviously misconceived and hopeless, why then spend $40,000 opposing it? Why not simply make the submission, as they have, that because a defence had been filed denying liability and, or, that the defendants should in the circumstances be allowed to avail themselves of the usual interlocutory processes in order to defend themselves, and leave their opposition to the summary judgment application on that basis? It seems to me the answer to those questions is either the application did require a responding affidavit descending to the detail disclosed, or that it didn't and that therefor work done in defending the application unnecessary and could be said to be unreasonable. In Flotilla Nominees [29] Pullin J said:
In my view, work which has been performed which was not 'necessarily incurred 'in connection with the litigation would be costs not 'reasonably incurred'.
49 Even if the conduct of the plaintiff was deserving of censure it should not be required to pay the costs of the defendant that have been unnecessarily incurred.
50 Accordingly I would order the costs of the application be in the cause.
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