Feldman v Frontlink Pty Ltd
[2014] VSCA 27
•3 March 2014
SUPREME COURT OF VICTORIA
COURT OF APPEAL
| S APCI 2013 0017 | |
| CYNTHIA FELDMAN | Appellant |
| v | |
| FRONTLINK PTY LTD | Respondent |
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| JUDGES | WARREN CJ, TATE JA and SIFRIS AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 5 February 2014 |
| DATE OF JUDGMENT | 3 March 2014 |
| MEDIUM NEUTRAL CITATION | [2014] VSCA 27 |
| JUDGMENT APPEALED FROM | [2012] VSC 624 (Pagone J) |
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PRACTICE AND PROCEDURE – Application for leave to amend Notice of Appeal – Application for leave to rely on new evidence – Where proposed amendments do not raise new argument – Where unnecessary to deal with application for leave to rely on new evidence – Leave granted.
PRACTICE AND PROCEDURE – Appeal against Summary Judgment – Whether the defence has a ‘real prospect of success’ – Whether cause of action verified – Whether in the interests of justice to refer the matter to trial – Where unusual features of the transaction – Where additional claims on foot in the proceeding – Appeal allowed – Civil Procedure Act 2010 (Vic) ss 63(1) and 64 – Supreme Court (General Civil Procedure) Rules 2005 (Vic) Order 22 – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr P D Santamaria SC with Mr M V McInnis | Mason Black Lawyers |
| For the Respondent | Mr R E Cook | Belleli King & Associates |
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WARREN CJ
TATE JA
SIFRIS AJA:
Introduction
The respondent (‘Frontlink’) is the owner of a property situated at 181 Grices Road, Berwick (‘the Property’).
Pursuant to a Joint Venture Farming Agreement purportedly made between Frontlink and the appellant (‘Mrs Feldman’) and her late husband Derek Joseph Feldman (‘Mr Feldman’) on 20 October 2002 (‘the Agreement’), the Feldmans were engaged by Frontlink to manage the Property. The Feldmans are referred to in the Agreement as the Farm Consultant.
The Agreement contained the following relevant terms:
•Clause 1 – The Agreement would commence on 20 October 2002 and continue until 21 October 2005 or as ’extended in accordance with the terms of [the] agreement’.
•Clause 5 – Frontlink would pay council and water rates, and building insurance, with respect to the Property and the Farm Consultant ’shall reimburse the Owner for council rates and for water, power, building insurance and other services’ used by and in relation to the Property.
•Clause 6(a) – the Agreement would be for a three year term with the Farm Consultant having the option to extend the arrangement for a further three years.
•Clause 6 – the Farm Consultant would pay a fee to the Owner as specified in that clause.
There is an issue as to whether Mrs Feldman signed the Agreement. Mrs Feldman did not deny signing the Agreement. She said that the initials on the Agreement were similar to hers but that she could not recall signing the Agreement.
It is common ground that Mr Feldman took possession of and remained in occupation of the Property (although he did not live there) during the initial period of the Agreement up to 21 October 2005 and thereafter until he died on 13 October 2010. There is however an issue as to whether the Agreement was extended for the further three year term pursuant to clause 6(a) of the Agreement and indeed beyond 21 October 2008. Mrs Feldman submitted that the evidence in support of the extension of the Agreement beyond 21 October 2005, and the indebtedness arising therefrom, was not adequate or sufficient and that there was a real issue in this regard. Further, Mrs Feldman denied that she was ever in occupation of the Property or had anything to do with any extension of the Agreement.
On 2 November 2012, Randall AsJ heard an application by Frontlink for summary judgment. His Honour gave judgment for Frontlink against Mrs Feldman in her personal capacity in the sum of $156,225.10 together with interest pursuant to statute. The amount included ‘rent’ beyond 21 October 2005, the initial period of the Agreement, in circumstances where no extension of the Agreement — the basis of most of the liability — was pleaded.
Mrs Feldman appealed the decision and the matter came on for hearing on 21 November 2012 in the Practice Court before Pagone J. The appeal did not conclude on 21 November 2012 because during the course of argument, Frontlink applied for leave to amend its statement of claim and sought to rely on additional affidavit evidence not before the Associate Justice. The application was granted and the appeal proceeded on 10 December 2012 despite additional and amended pleadings from both sides after 10 December 2012. Both sides were anxious for the matter to proceed.
The main amendments to the statement of claim were to plead the continuation of the Agreement beyond its initial term of three years and to reduce the quantum to $148,618.
The judge found[1] that Mrs Feldman’s defence did not have real prospects of success and gave judgment for Frontlink in the sum of $148,618, the amount deposed as owing by Mr Souhail Mondous (‘Mr Mondous’), the general manager of Frontlink. The amount was purportedly verified by Mr Mondous simply by reference to a schedule to the Further Amended Statement of Claim (‘FASC’) (‘Schedule 1’) setting out various debits and credits extending over a period of about eight years. No business records were exhibited or referred to. The purported verification of Schedule 1 is the sole basis on which the quantum was established.
[1]Frontlink Pty Ltd v Cynthia Feldman [2012] VSC 624 (‘Judgment’).
Mrs Feldman appeals against the decision and orders of the judge. She contends that for various reasons summary judgment should not have been granted.
Grounds of appeal
The notice of appeal dated 4 February 2013 set out the following grounds of appeal:
(1)That the Learned Trial Judge erred in the interpretation and/or the application of the law relating to summary judgment and/or in the interpretation of s 63 of the Civil Procedure Act 2010 (Vic) and/or Supreme Court (General Civil Procedure) Rules 2005 (Vic) Order 22.
(2)That the Learned Trial Judge erred in the interpretation and/or the application of Rule 22.03 of the Supreme Court (General Civil Procedure) Rules 2005 by finding that the Respondent “may” verify the cause of action rather than shall be required to verify the cause of action pursuant to the Rule.
(3)That the Learned Trial Judge erred in law and/or in fact by finding that the defence raised by the Appellant of unconscionable conduct and/or duress did not apply.
(4)That the Learned Trial Judge erred in law and/or in fact by finding that the agreement was verified by the Respondent and/or supported the claim as pleaded in the Amended Statement of Claim by the Respondent.
(5)That the Learned Trial Judge erred by relying upon the affidavit evidence of Mr Mondous to establish that the Appellant had lawfully executed the agreement.
(6)That the Learned Trial Judge erred in failing to find that there was a triable issue in relation to the quantum claimed by the Respondent.
(7)That the Learned Trial Judge erred by ordering that interest should be payable by the Appellant to the Respondent from the date when proceedings were commenced by the Appellant.
(8)That the Learned Trial Judge erred by granting leave to the Respondent to further amend the Amended Statement of Claim on the first day of hearing of the Appeal from the decision of the Honourable Associate Justice.
At the commencement of the hearing of the appeal, Mrs Feldman made application for leave to amend the grounds of appeal. The proposed amended grounds of appeal are in the following terms:
1.That the Learned Trial Judge erred in the interpretation and/or the application of the law relating to summary judgment and/or in the interpretation of s.63 of the Civil Procedure Act 2010 (Vic) and/or Supreme Court (General Civil Procedure) Rules 2005 (Vic) Order 22 in that instead of considering whether the evidence satisfied the s.63 threshold of “real prospects of success”, he proceeded to determine the factual and legal issues as if he were conducting the trial of the proceeding.
2.That the Learned Trial Judge erred in law and/or in fact by finding that the defence raised by the Appellant of unconscionable conduct and/or duress did not apply.
3.That the Learned Trial Judge erred in law and/or in fact by finding that the agreement was verified by the Respondent and/or supported the claim as pleaded in the Amended Statement of Claim by the Respondent.
4.That the Learned Trial Judge erred by relying upon the affidavit evidence of Mr. Mondous to establish that the Appellant had lawfully executed the agreement in that:
(a)he did not have regard to evidence of the Appellant concerning events leading to the preparation of the Agreement; and
(b)he acted upon Mondous’ evidence which contained both hearsay and opinion evidence not otherwise admissible under the Evidence Act.
5.That the Learned Trial Judge erred in failing to find that there was a triable issue in relation to the quantum claimed by the Respondent in that:
(a)there were no documents evidencing an invoice, statement or demand for:
(i) ‘rent’;
(ii) fees;
(iii) council and water rates and building insurance;
(iv) increase of fees in accordance with CPI;
(v) amounts received by the Respondent;
tendered by the Respondent in support of its claim whether from the financial accounts of the Respondent or otherwise; instead, his Honour acted upon mere assertions by Mondous that he had sent invoices for such amounts to the appellant and her deceased husband;
(b)there were no documents evidencing how the Respondent had allocated payments received from the Appellant’s deceased husband as between the three properties used by her deceased husband for his cattle business;
(c)there was no evidence to support the Respondent’s assertion that the Appellant had exercised the option to extend the Agreement to October 2005; moreover, by its terms the Agreement did not contain an option for the further extension of the term beyond October 2008, yet his Honour gave judgment for amounts claimed up to October 2010;
(d)he had no regard to the factual issue raised in the appellant’s evidence as to whether some or all of the cattle formerly belonging to the deceased as part of his business had been removed and sold by Mr. Mondous (on behalf of the Respondent) or Mrs. Feldman.
4.6.
That the Learned Trial Judge erred by ordering that interest should be payable by the Appellant to the Respondent from the date when proceedings were commenced by the Appellant.5.7.
That the Learned Trial Judge erred by granting leave to the Respondent to further amend the Amended Statement of Claim on the first day of hearing of the Appeal from the decision of the Honourable Associate Justice.
Application was also made by Mrs Feldman to rely on new evidence in order to support the proposed ground of appeal referred to in Ground 5(d). This evidence was objected to by Counsel for the respondent principally on the basis that the evidence could, with reasonable diligence, have been available at the trial.[2] Counsel also opposed the application for leave to amend the notice of appeal.
[2]Clark v Stingel [2007] VSCA 292, [25].
In our opinion, save for Ground 5(d), Mrs Feldman should be given leave to amend the notice of appeal in accordance with the proposed amended notice of appeal dated 28 January 2014. In view of the way in which we have approached this appeal and the consequent result we do not propose to deal with Mrs Feldman’s application for leave to rely on the new evidence.
The proposed amendment to Ground 1 simply clarifies the ground, does not involve any new argument and was the subject of argument below and in this Court.
In relation to the proposed amendments to Ground 4 they do not raise any new matter but simply clarify and place more focus on the ground.
In relation to Grounds 5(a) and (b) of the proposed amended notice of appeal, the matters referred to simply expand on the ground. It is clear that Mrs Feldman always contended that the evidence in relation to quantum was not sufficient. Grounds 5(a) and (b) do no more than sharpen the focus on the sufficiency and adequacy of the verification by Frontlink of the quantum of its claim and in respect of which the judge gave judgment.
In relation to Ground 5(c) it is clear that the issue as to whether the option to extend the Agreement was exercised and indeed the basis on which the Feldmans were liable beyond the expiry of the Agreement were issues specifically before the judge at the hearing. Indeed Frontlink was given leave to amend its statement of claim in order to include a claim for amounts owing beyond the expiry of the Agreement. In its amended statement of claim, Frontlink alleged various ways in which the Agreement continued beyond the expiry date and as a consequence gave rise to the indebtedness for the extended period on the same basis as the Agreement. Although this may well have been a separate ground of appeal, in our view it is properly brought under the rubric of the accuracy and verification of the quantum.
Accordingly we propose to grant Mrs Feldman leave to rely on the proposed amended notice of appeal other than Ground 5(d).
The relevant legislation
Section 63(1) of the Civil Procedure Act 2010 (Vic) (‘the Act’) provides:
Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
Section 64 of the Act is in the following terms:
64 Court may allow a matter to proceed to trial
Despite anything to the contrary in this Part or any rules of the court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because –
(a) it is not in the interests of justice to do so: or
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate.
Order 22 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) (‘the Rules’) permits a plaintiff to apply for summary judgment.
The authorities
There is no dispute in relation to the applicable legal principles.
In the recent case of Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[3] decided after the judge gave judgment and referred to by both parties on the appeal, this Court held as follows:
Upon the present state of authority:
a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
b)the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
c)it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[4]
[3][2013] VSCA 158 (Warren CJ, Nettle and Neave JJA).
[4]Ibid [35].
Summary of conclusions
In our opinion, it is sufficient to dispose of the appeal by finding that there is a real issue in relation to the quantum of Frontlink’s claim. The matters referred to in Grounds 5(a), (b) and (c) are issues in respect of which Mrs Feldman has a real prospect of success in the proceeding. For reasons that follow it may be more accurate to say that Frontlink has failed to verify the quantum of its claim and the underlying legal basis thereof.
For the reasons set out hereunder, given the approach we have taken, and notwithstanding the able arguments made in relation to the grounds of appeal we are of the opinion that it is neither necessary nor desirable to determine whether Grounds 2, 3 and 4 are made out and whether there are real issues to be tried in relation to these grounds. Indeed we propose to say no more than is necessary in order to dispose of this appeal.
Further, to the extent that Ground 1 contends that s 64 of the Act was not engaged or properly considered by the judge the ground is made out.
Accordingly and for reasons that follow we would allow the appeal, grant leave to defend and remit the matter back to the Trial Division.
Grounds 5(a) and (b)
Rule 23.03(1) of the Rules provides:
An application for judgment shall be made by Summons supported by an affidavit —
(a)verifying the facts on which the claim or the part of the claim to which the application relates is based; and
(b)stating that in the belief of the deponent there is no defence to that claim or part, or no defence except as to the amount claimed.
Mrs Feldman submitted that the quantum of Frontlink’s claim was not properly verified by the affidavits of Mr Mondous sworn 3 June 2011, 5 August 2011 and 27 November 2013. The FASC, it was submitted, purports to provide in Schedule 1 particulars of loss and damage claimed to have arisen from paragraph 5 of the FASC. Schedule 1 refers to ‘rent’ and states at various points ’copy enclosed’ and ’to be provided’. It was submitted that Schedule 1 and the affidavit material identifying that schedule do not verify the quantum at all and on this basis alone Mrs Feldman has a real prospect of success in relation to part or all of the amount of loss and damage claimed. This is particularly so, it was submitted, due to the conflict of evidence between the affidavit of Mr Mondous sworn on 27 November 2012 and the affidavit of Mr Mond, the Feldmans’ accountant, affirmed on 4 December 2012.
In her supplementary written submissions dated 29 January 2014 Mrs Feldman submitted that the judge fell into error by finding that Frontlink, through Mr Mondous, had properly verified its claim in relation to quantum. It was submitted that the evidence of Mr Mondous was no more than a series of assertions on his part.
The finding that Mr Mondous sent the invoices upon which the quantum of the claim is based was, it was submitted, a convenient example. No invoices were produced by Mr Mondous. Nor were any books of account or business records of the Frontlink business. No independent evidence was given in relation to the preparation or forwarding of invoices, statements or demands. This, it was submitted, was in circumstances where Mr Mondous’ own calculation of amounts owing reveals that in almost every year from 2002 until 2010, rent and insurance were never paid. Whatever arrangement had in fact been negotiated between Mr Mondous and Mr Feldman, it did not involve timely payment of rent or insurance. It was submitted that Mr Mondous appears to have waived rent, at least until the death of Mr Feldman. Mrs Feldman denied that she had at any stage paid Mr Mondous $88,000 as recorded in Schedule 1, and said it was more likely to have been a commission retained by Mr Mondous in the same way as the commissions recorded by Mr Mondous were set off by him in the case of the Pound Road property (‘Pound Road’).[5]
[5]The claim in respect of the Property was only one of three claims made in the proceeding. The other two claims relate to contracts with Mr Feldman in relation to two other properties including Pound Road.
It was submitted further that the schedule of rent in relation to Pound Road (Schedule 3 to the FASC) refers to three commissions totalling approximately $75,000. There is no evidence adduced by Mr Mondous as to how it was he came to accept commissions from the deceased (in lieu of rental payments), nor why he appropriated these commissions as against Pound Road and not either, or both, of the other two properties. Mr Mondous did not give evidence on this topic and produced no documents to substantiate his claim. It was submitted that Mrs Feldman was entitled to put Frontlink to its proof on a matter that remains contentious.
Frontlink submitted that the verification was, in the circumstances, adequate.
The judge dealt with the verification issue as follows:
However it is clear from his evidence that he [Mr Mondous] is the person best placed to give direct and probative evidence about all matters concerning liability and quantum. Mr Mondous is the Plaintiff’s General Manager. In paragraph 4 of the affidavit of Mr Mondous dated 27 November 2012 the deponent exhibited what was then the proposed further amended statement of claim in respect of which leave was granted at the hearing and deposed:
I am able to state from my own knowledge that the matters set out in the statement of claim are correct and I verily believe that the Defendant does not have a defence to this proceeding.
His verification of the facts are in general terms but the facts he verifies are within his personal knowledge. His direct evidence establishes personal knowledge of the matters pleaded except where his affidavit went on to make statements which were inadmissible conclusions rather than statements of fact. It was Mr Mondous who personally sent the invoices upon which the quantum of the claim is based. To the extent that Mr Mondous has had to rely upon information and belief he has identified the source of his information and belief and it ought to be permitted.[6]
[6]The Judgment [12].
We are, with respect, unable to agree with the judge. In our opinion Frontlink has failed to properly and adequately verify the quantum of its claim and there is a real question in this regard.
In many cases a bare assertion from personal knowledge may be sufficient verification. This is not such a case. The many unusual features of the transaction and the account, the lengthy period to which the account relates, the irregular features of the debits and credits all call for further and more precise analysis and verification beyond assertion.[7] This is particularly so in circumstances where there are disputed items by a party (Mrs Feldman) who asserts no intimate knowledge and involvement in the transaction, this itself being an issue of some significance.
[7]See Suburban Homes Pty Ltd v Ward (1928) VLR 267, 269 in which Lowe J found that in the case of a claim which was not simple, a broad verification was insufficient without the production of the documents referred to. See also Symon & Co v Palmer’s Stores (1903) Ltd [1912] 1 KB 259, 265 (Buckley LJ); Commissioner of the State Bank of Victoria v Tripp [1985] VR 297, 300.
It is neither necessary nor desirable for us to say what evidence would constitute sufficient verification of the quantum of the claim. However, it is in our view clear that the simple verification of the sheet of paper called Schedule 1 is in the circumstances referred to inadequate. There is no supporting documentation. The schedule is dated 1 March 2011 and is clearly derived from other documents, presumably business records, that are not referred to or exhibited. In fact Schedule 1 is not even a business record that may be admissible under the Evidence Act 2008 (Vic). It is more of an aide memoire or note prepared by Mr Mondous. By itself it is of little evidential value. Even business records, more often than not constituting documentary hearsay, are only admissible if certain conditions are met.[8]
[8]Section 69 of the Evidence Act 2008 (Vic).
Schedule 1 is headed ‘History of Rent with Derek Feldman’. The absence of a reference to Mrs Feldman is not without significance. Further, the lump sum payment of $88,000 referred to in the schedule is disputed.
It should also be noted and emphasised that the reference to rent is peculiar. The Agreement was not a lease agreement and refers to a fee being payable. The amended pleading does not refer to any extension of a lease agreement, or any indebtedness in respect of rental.
Finally, this is not a case where there is a contractual provision that provides for a different basis of verification, usually a certificate of indebtedness, which may be prima facie evidence or indeed conclusive evidence.[9] Absent such provision, verification usually and necessarily involves reference to business records and other primary evidence as constituting the best evidence available. This is all the more so in this case for the reasons given.
[9]Commonly referred to as a Dobbs certificate (see Dobbs v National Bank of Australia Ltd (1935) 53 CLR 643).
In our view more is required in order to prove or establish the truth of[10] or verify the indebtedness over an extended period in all of the circumstances referred to. The purported verification of a non-business record (Schedule 1) prepared for the case is not sufficient verification and does not meet the requirements of r 23.01(1)(a).
[10]A definition of ‘verify’ referred to in the Macquarie Encyclopaedia Dictionary (2nd ed, 2010).
If we are wrong in relation to whether there has been sufficient verification and whether or not there is a real issue in this regard, we would nevertheless and in the interests of justice refer the matter for trial in accordance with s 64 of the Act for all the reasons referred to and discussed below with regard to Ground 1 of the appeal.
Ground 5(c)
To a large extent this ground has been dealt with. Mrs Feldman submitted that apart from the above, there was no proper verification of the quantum relating to the period after the Agreement came to an end, namely the period after 21 October 2005. The asserted indebtedness was based on the continuation of the Agreement beyond this date, and indeed beyond the further (and only) three year term contemplated by clause 6(a). This aspect is troubling and requires further consideration.
Frontlink sought leave to amend its statement of claim after the judgment in its favour from Associate Justice Randall – the amendment was a substantial one. It was the underlying basis of most of its claim.
Frontlink pleaded in Ground 4B of the amended pleading that the initial term of the Agreement was:
extended from time to time by agreement between the parties for the periods mentioned in Schedule 1 to the (amendment) on the same terms and conditions as had before applied (except as to termination).
Schedule 1 does not set out the relevant periods of the extension or new agreement. It simply records rental and other items on a year by year basis.
Frontlink therefore sought to recover amounts relating to a period from the commencement of the Agreement in October 2002 until 2010, following the death of Mr Feldman on 13 October 2010 in circumstances where the Agreement was for a term of only three years. Thus, it needed to establish that the Agreement had been extended, pursuant to its terms, by the Feldmans’ exercise of an option in or about October 2005 and beyond that by some further agreement, and that as a result of these extensions the indebtedness had increased.
There was no evidence of any discussion about the option or other manifestation of intention by the parties to exercise the option or further extend the period.
However, as submitted by Mrs Feldman, there was only one option period. Even assuming that the option was exercised, the Agreement could not have extended beyond October 2008. The consequence is that although in October 2008, the parties were free to enter into a new agreement it could not be done by a second exercise of an option to extend.
The summary judgment entered against Mrs Feldman is predicated upon the Agreement validly extending to October 2010 (and thus Frontlink receiving approximately $50,000 to $60,000 of rent for the two years beyond October 2008). The exercise of the option and the new agreement (on the same terms) are said to arise by implication from the Feldmans remaining in occupation and conducting farming operations.
As to whether the Agreement had been validly extended in 2005, the judge appeared to ignore relevant evidence given by Mrs Feldman on the issue of whether the option had been validly exercised. She denied that she had ever been in occupation of the Property or that she had anything to do with extending the Agreement. As mentioned above, Mrs Feldman deposes that she had nothing to do with the payment of $88,000 to Frontlink in March 2007 and suggested that it had the hallmarks of a commission being paid by Frontlink to her deceased husband, in the same way as Frontlink stated in respect of Pound Road. Once those matters were put in issue by Mrs Feldman, the judge ought not have proceeded to give summary judgment on the assumption that the option had been exercised or a further agreement entered into. The evidence in support of these matters was inadequate and any quantum based on an assumption of the extension and a new agreement was not adequately verified. We say nothing of the adequacy of the pleading and asserted basis of liability.
Accordingly, the judge fell into error in concluding that Mrs Feldman had no real prospects of successfully defending Frontlink’s claim against her, as the exercise of the option or extension of the Agreement and Mrs Feldman’s position in relation thereto are real issues of fact and perhaps law.
Ground 1
In her original submission in relation to Ground 1, before the amendment, Mrs Feldman submitted that the judge had failed to give adequate consideration to s 64 of the Act. It was submitted that in all of the circumstances the proceeding should be referred to trial.
Although the amended Ground 1 is more specific we do not take Mrs Feldman to have abandoned the argument. It was implicitly argued below, dealt with by the judge,[11] and the subject of written submissions to this Court.[12]
[11]Judgment [10].
[12]Paragraph 8 of the appellant’s written submissions filed 13 September 2013.
We would allow this ground. There must be a trial. This conclusion is inescapable and compelled by a number of factors.
The extended duration, nature and unusual features of the transaction including the irregular debits and credits (and the inter-relatedness of the other contracts and indebtedness) require proper consideration and analysis. This is not simply a matter of arithmetic, or adequate verification but the underlying legal basis of liability for most of the period to which the asserted quantum relates.
Although Mrs Feldman may not have been a stranger to the transaction and may have been more involved than suggested by her Senior Counsel, the question remains as to the extent of her conduct and involvement in extending the Agreement beyond the initial term; being the asserted basis of her liability. What and precisely how Mrs Feldman incurred such obligation are matters that need to be investigated at trial. They are serious issues and the evidence in support is, in our view, inadequate. In the face of Mrs Feldman’s denial it is not sufficient to simply regard continued occupation by Mr Feldman (and perhaps even Mrs Feldman — but this is an issue) as sufficient. In our opinion this is a real issue. However, whether or not this is a real issue, these matters and other disputed matters[13] need to be tested at trial, particularly given the unusual features of the transaction and calculation of quantum. This was, with respect to the judge, a case where caution was required.
[13]The affidavits filed expose a number of areas where there are disputes of fact of some significance. The more relevant matters are collected in a schedule provided by the appellant.
It is also of some relevance to note that the claim in respect of the Property is only one claim in the proceeding. There are two more claims arising out of similar contracts. Although Mrs Feldman was not a party to these contracts — which in itself raises an issue — she remains a party to the proceeding in her capacity as holding Letters of Administration ad colligendum bona of the intestate estate of her late husband. The balance of the case continues.[14] In all of the circumstances of this particular case fragmentation of the claims was not desirable and all matters should have proceeded to trial.
[14]The case has, since the grant of summary judgment, been significantly expanded to include other claims based on amongst other matters, alienation of property with the intention of defrauding the respondent as a creditor.
Notice of Contention
By a Notice of Contention dated 8 August 2013, Frontlink contends that the appeal should be dismissed and the decision of the judge affirmed by reason of the following provisions of the Act –
(a)section 63 thereof: on the basis that the defendant’s defence has no real prospect of success;
(b)section 65 thereof: on the basis that the powers of the Court under Part 4.4 of the Act are in addition to and do not derogate from any powers a court has under the Rules of Court in relation to the summary disposal of a civil proceeding; and
(c)that the overarching purpose of the Act is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute on the basis that the same should, inter alia, have regard to –
(i)the efficient conduct of the business of the Court;
(ii)the efficient use of judicial and administrative resources;
(iii)the timely determination of the civil proceeding;
(iv)dealing with a civil proceeding in a manner proportionate to –
(1)the complexity or importance of the issues in dispute;
(2)the amount in dispute.
(v)minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for –
(1)the fair and just determination of the real issues in dispute;
(2)the preparation of the case for trial.
We have dealt with s 63 of the Act. For the reasons given we do not accept that the defence has no real prospect of success.
The reference to s 65 of the Act does not take the matter any further. We accept that Part 4.4 of the Act, dealing with summary judgment, operates in addition to the Rules. However, we have specifically dealt with this appeal under ss 63 and 64 of the Act.
Finally, nothing we have said is inconsistent with the overarching purpose of the Act. If a defence has a real prospect of success (s 63) or a proceeding should not be disposed of summarily (s 64), as we have found, there is no basis for summary judgment.
Disposition
The appeal will be allowed, the orders of the judge set aside, leave to defend will be granted and the matter remitted to the Trial Division.
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