Gregory's Transport Pty Ltd v Ray's Haulage Pty Ltd

[2008] NSWCA 333

New South Wales

Court of Appeal

CITATION:	Gregory's Transport Pty Ltd v Ray's Haulage Pty Ltd [2008] NSWCA 333
JUDGMENT DATE:	5 December 2008
JUDGMENT OF:	Allsop P at 1; Campbell JA at 6; Macfarlan JA at 7
DECISION:	(a) Appeal allowed. (b) Set aside the judgment and orders of Brown LCM of 8 May 2007 other than his order striking out the appellant's defence. (c) Remit the matter to the Local Court to receive from the respondent an "affidavit in support" complying with the terms of Rule 16.6(2) of the Uniform Civil Procedure Rules and to give judgment for the respondent in such amount, if any, as it considers appropriate. (d) Order the respondent to pay the appellant's costs of the appeal to Harrison As J, with the respondent to have a certificate under the Suitors' Fund Act 1951 concerning those costs if qualified. (e) Order the appellant to pay the respondent's costs of the appeal to this Court.
CATCHWORDS:	PRACTICE AND PROCEDURE - appellant's defence struck out - entry of monetary judgment for respondent - power of magistrate to give judgment for specific amount - lack of evidence of existence and quantum of debt - Uniform Civil Procedure Rules 16.3(2), 16.6, 12.7(2) - Civil Procedure Act 2005 s 61(3)(c), s 14 - affidavit in support - point at issue not taken below - whether prejudicial to respondent
LEGISLATION CITED:	Civil Procedure Act 2005 Local Courts Act 1982 Suitors' Fund Act 1951 Supreme Court Act 1970
CATEGORY:	Principal judgment
CASES CITED:	Suttor v Gundowda Pty Limited [1950] HCA 35; (1950) 81 CLR 418 Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491
PARTIES:	Gregory's Transport Pty Ltd (Appellant) Ray's Haulage Pty Ltd (Respondent)
FILE NUMBER(S):	CA 40041/08
SOLICITORS:	John Hertz & Associates (Appellant) Marsdens Law Group (Respondent)
LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S):	SC 12775/07
LOWER COURT JUDICIAL OFFICER:	Harrison As J
LOWER COURT DATE OF DECISION:	12 December 2007
LOWER COURT MEDIUM NEUTRAL CITATION:	Gregory'sTransport v Ray's Haulage [2007] NSWSC 1442

CA 40041/08
SC 12775/07

ALLSOP P
CAMPBELL JA
MACFARLAN JA

FRIDAY 5 DECEMBER 2008

GREGORY’S TRANSPORT PTY LTD v RAY’S HAULAGE PTY LTD

Judgment

1 ALLSOP P: I have read the reasons in draft of Macfarlan JA. I agree with his Honour’s orders and, subject to what follows, with his reasons.

2 The appeal to the Supreme Court permitted by the Local Courts Act 1982 (NSW), 73 is limited by the terms of s 73(1), to an “appeal against the judgment or order, but only as being erroneous in point of law”

3 The appeal to this Court, by leave, arises from the Supreme Court Rules Pt 60 r 17, Sched D Pt 3 para 5B. (See also the Supreme Court Act 1970 (NSW), s 104.)

4 The role and function of the Supreme Court Act, s 75A and the interaction between s 75A(4) and provisions such as the Local Court Act, s 73 is a matter not without difficulty: B & L Linings Pty Ltd v Chief Commission of State Revenue [2008] NSWCA 187 at [38]-[79] and [144]-[150] and Scicluna v New South Wales Land and Housing Corporation [2008] NSWCA 277 at [20]ff; cf Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300; 156 LGERA 150.

5 Here, the respondent’s argument as to prejudice appears to be that it would have been able to prove its case on quantum before Harrison As J if the point about authority of the magistrate had been run. That evidence could possibly have been relevant to an argument before her Honour that no relief should be ordered as the error of law (entering judgment without lawful authority) could not make any difference. That approach would be debatable, to say the least. The evidence could possibly have been relevant on the application for leave to appeal as relevant to the Court’s discretion to grant leave. However, unless the quantum was agreed (which is not apparent here) such a course before Harrison As J would have involved the contested suit as to quantum being heard in the Supreme Court on appeal, in effect, on a question of law. Once it was clear that the magistrate entered judgment without statutory authority, the only proper course by Harrison As J would have been to remit the trial of the issue of quantum to the Local Court. (See in this respect also AMP Capital Investors Limited v Transport Infrastructure Development Corporation [2008] NSWCA 325 at [120].) The “appeal” under the Local Court Act, s 73 is on the limited ground identified above and could not involve the resolution of such a contested question of fact. Nor do I accept that the evidence as to quantum could have been led before Harrison As J, or this Court, simply by reference to the Supreme Court Act, s 75A.

6 CAMPBELL JA: I agree with Macfarlan JA. I also agree with the remarks of Allsop P.

7 MACFARLAN JA: This appeal arises out of proceedings commenced in the Local Court at Blacktown by the respondent against the appellant to recover fees alleged to be owing in respect of haulage services. By reason of various defaults found to have occurred on the part of the appellant, Brown LCM struck out the appellant’s defence and directed judgment for the respondent in the sum of $21,031.18, together with interest and costs. This occurred on 8 May 2007.

8 Having told counsel for the appellant that he was against his submissions, his Honour expressed his conclusions in the following way:

“It seems to me that this matter’s been to arbitration so the parties should know exactly the case that they have to meet. We are rehearing an arbitrated matter, we’re not running a different case. The simple situation is your client’s [sic] have been dilatory to the point of getting the matter to trial without bothering to file the evidence that they were going to rely on. It seems to me that I can’t say it’s the solicitor’s fault. In the circumstances I have no belief that whatever orders are made are likely to be complied with for the further proceedings of this matter. The defence is struck out.
A judgment for the plaintiff in the sum of $21,031.18. Interest as per scale – when was the statement of claim filed Mr Donella?
Donella: 22 November 2005.
His Honour: From 22 November 2005. Costs as agreed or in default as assessed.” (Combined Appeal Book Tab 2)

9 Pursuant to s 73 Local Courts Act 1982 an appeal on points of law was brought to the Supreme Court by the appellant.

10 That appeal was heard and determined by Harrison As J. It was argued before her Honour that for various reasons the appellant had been denied natural justice by Brown LCM. By her judgment of 12 December 2007, her Honour affirmed the orders of Brown LCM and ordered the appellant to pay the respondent’s costs.

The Grant of Leave to Appeal

11 Leave to appeal to the Court of Appeal was then sought by the appellant. Leave was necessary as the orders of Harrison As J did not involve “any claim demand or question” to the value of $100,000.00 or more (see s 101(2)(r) Supreme Court Act 1970). Subject to the obtaining of a grant of leave in the type of matter in respect of which s 101 requires leave to be obtained, a combination of Part 60 r17 of the Supreme Court Rules and Schedule D Part 3 paragraph 5B to those Rules confers a right of appeal from an Associate Justice of the Court to the Court of Appeal in respect of the determination by the Associate Justice of an appeal from a Local Court in any civil matter (see also s 104 Supreme Court Act).

12 The application for leave to appeal to the Court of Appeal was heard and determined by Allsop P and Campbell JA on 6 August 2008. Their Honours granted leave to appeal on a limited point only, that is, on the question of the “power of the magistrate to make orders for the entry of judgment for a specific amount” (Combined Appeal Book Tab 9, as corrected to reflect the order orally pronounced). This question arose out of the fact that, after striking out the appellant’s defence, the magistrate directed the entry of judgment for the respondent for its claimed debt without turning to consider whether there was any evidence to prove the debt. This was a new point of law which was raised for the first time in the argument on the leave application. It was not raised or argued before Harrison As J. Leave to appeal was not granted in respect of the matters which were in fact argued before, and determined by, Harrison As J.

13 In determining the leave application, the Court noted that the parties agreed that the appeal would be conducted on the written material before the Court, without the need for an oral hearing. Directions were however made for further written submissions to be lodged. This occurred.

The Relevant Court Rules

14 The point in respect of which leave was granted is put by the appellant as follows:

“ … the Magistrate’s decision was erroneous in law for that he peremptorily entered judgment for the Opponent in the sum of $21,031.18 without any evidence as to how that amount was calculated and in particular without requiring the Opponent to comply with rule 16.6(2) …”.of the Uniform Civil Procedure Rules 2005 (Submissions dated 6 August 2008, [8]).

15 Rule 16.6 of those Rules is in the following terms:

“(1) If the plaintiff’s claim against a defendant in default is for a debt or liquidated claim or for a claim for unliquidated damages of the kind referred to in rule 14.13(2), judgment may be given for the plaintiff against the defendant for:
(a) a sum not exceeding the sum claimed, and
(b) interest up to judgment, and
(c) costs.
(2) The relevant affidavit in support:
(a) must state the amount due to the plaintiff, in respect of the cause of action for which the proceedings were commenced, as at the time the originating process was filed, and
(b) must give particulars of any reduction of that amount, and costs, as a consequence of any payments made, or credits accrued, since the time the originating process was filed, and
(c) must state the source of the deponent’s knowledge of the matters stated in the affidavit concerning the debt or debts, and
(d) must state the amount claimed by way of interest, and
(e) must state whether costs are claimed and, if so, how much is claimed for costs, indicating:
(i) how much is claimed on account of professional costs (not exceeding the amount fixed by the regulations made for the purposes of section 329 of the Legal Profession Act 2004), and
(ii) how much is claimed on account of filing fees, and
(iii) how much is claimed on account of the costs of serving the originating process, and
(f) must state when and how the originating process was served on the defendant.”

16 Rule 16.3 is also relevant. It is in the following terms:

“(1) If a defendant is in default, the plaintiff:
(a) may apply for judgment to be given under this Part according to the nature of his or her claim for relief, given the defendant in default, and
(b) may carry on the proceedings against any other party to the proceedings.

(1A) Unless the court orders otherwise, an application under this rule:
(a) may be dealt with in the absence of the parties, and
(b) need not be served on the defendant.
(2) Unless the court orders otherwise, an application for judgment to be given under this Part must be accompanied by:
(a) an affidavit of service of the statement of claim ( the affidavit of service ), and
(b) an affidavit in support of the application ( the affidavit in support ). (emphasis added)
(3) An affidavit of service is unnecessary in relation to a statement of claim whose service has been effected by a Local Court under rule 10.1(2).
(4) Unless the court orders otherwise, an affidavit in support is valid for the purposes of an application only if it has been sworn within 14 days before the date on which the application is filed.”

17 It can be seen from the above that subrule 16.6(2) contemplates that when judgment is given for the plaintiff there will be before the court an “affidavit in support”. The requirement for such an affidavit is to be found in subrule 16.3(2). As indicated by their numbers, both rules are in the same Part. Subrule 16.3(2) is therefore applicable to the entry of judgment under subrule 16.6(2). The requirement for an affidavit is expressed to be applicable “unless the court orders otherwise”.

18 There was no “affidavit in support” complying with the terms of subrule 16.6(2) in evidence in the proceedings at the time when the magistrate gave judgment for the respondent. Prior to the hearing before the Local Court it appears that there had however been filed at the Court a statement of Sariful “Ray” Rahman, a director of the respondent. The statement dealt with various matters relevant to the existence of the debt alleged to be owed by the appellant to the respondent but it did not deal with all of the matters referred to in subrule 16.6(2). It was not a sworn statement (and therefore not an “affidavit” as contemplated by the subrule) and in any event does not appear to have been tendered in evidence at the hearing, as distinct from being filed at the Court prior to the hearing.

19 The respondent has not contended in this Court that this witness statement constituted a relevant “affidavit in support”. It has only relied upon the statement as indicating that if the magistrate had given the respondent an opportunity to file an “affidavit in support”, the respondent “would have been able to establish the quantum” of its claim (Submissions dated 13 August 2008, [16]).

20 In any event, It is apparent from the reasons of the magistrate quoted above that he did not proceed to deal with the matter upon the basis that there was an affidavit in support.

Conclusion as to Power under Rule 16.6

21 Having struck out the appellant’s defence was the magistrate in these circumstances empowered by Rule 16.6 to give the money judgment that he gave in favour of the respondent?

22 Rule 16.3 sets out the procedure applicable where a defendant is in default. Subrule (2) leaves no doubt that any application for judgment to be given under the relevant Part (being the Part in which Rule 16.6 falls) is to be accompanied by an “affidavit in support”, “unless the Court orders otherwise”. Rule 16.6 does not expressly refer to an application for judgment being made by the plaintiff but it is implicit that any judgment to be given by the Court under that subrule will be made upon an application, express or implied, of the plaintiff. Subrule (2) of Rule 16.6, as has been stated earlier, contemplates that there will be an “affidavit in support”. This reflects the express requirement in Rule 16.3. This requirement was applicable but not met.

23 There being no “affidavit in support”, my view is that the magistrate was not relevantly empowered by Rule 16.6, unless reliance can be placed upon the ability of the Court under subrule 16.3(2) to order “otherwise”.

24 I do not consider that the respondent is entitled to rely upon that provision as the magistrate did not purport to do so and any proper reliance by him on it, if error of law were not to occur, would have required reference to the provision and an expression of reasons as to why he was prepared to exercise the discretion conferred by it. It can be inferred from the absence of reference to the provision that the magistrate did not turn his mind to it. In any event, it is difficult to identify circumstances that would have warranted an exercise of that discretion favourable to the respondent where no evidence at all had been admitted by the magistrate at the hearing, (although certain material had been filed at the Court prior to the hearing).

Other Sources of Power Relied Upon

25 In its written submissions, the respondent relied upon other sources of power as follows.

26 The first was s 61(3)(c) Civil Procedure Act 2005.

27 Section 61(1) is in the following terms:

“(1) The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings.”

28 Section 61(2) specifies some particular directions that the Court may make. The relevant part of subsection 3 is in the following terms:

“(3) If a party to whom such a direction has been given fails to comply with the direction, the court may, by order, do any one or more of the following:
…

(c) it may strike out any defence filed by a defendant, and give judgment accordingly,”

29 I do not read this provision as authorising the Court to act without evidence in directing the entry of a monetary judgment for a plaintiff. Clear words would in my view be required to warrant the conclusion that such a provision was intended to permit the Court to act without evidence, at least evidence such as an admission or sworn verification of the existence of the debt, to substantiate a plaintiff’s claim.

30 Indeed, the respondent does not appear to contend that the provision goes so far because its written submissions state that “[t]he Court may well have the means to quantify the judgment instanter” or “alternatively, the Court may give directions for determining the question” (paragraph 7 of submissions dated 13 August 2008).

31 Another source of power relied upon by the respondent was subrule 12.7(2) of the Uniform Civil Procedure Rules 2005. This subrule is part of a rule entitled “Dismissal of proceedings etc for want of due despatch” and is in the following terms:

“(2) If the defendant does not conduct the defence with due despatch, the court may strike out the defence, either in whole or in part, or make such other order as the court thinks fit.”

The comments I made concerning s 61(3)(c ) are equally applicable to this provision insofar as it extends to authorising the entry of judgment for a plaintiff. Again the respondent appears to accept that there would need to be some evidence substantiating the claim to warrant the court directing judgment under this provision for a money sum.

32 Yet another provision relied upon by the respondent was s 14 Civil Procedure Act 2005. The section is in these terms:

“In relation to particular civil proceedings, the court may, by order, dispense with any requirement of rules of court if satisfied that it is appropriate to do so in the circumstances of the case.”

33 This provision cannot in my view be regarded as justifying the magistrate’s decision in circumstances in which he did not purport to rely upon it and did not therefore identify any matters which would warrant its application.

Point Not Taken Below

34 Finally, the respondent complains that the point now at issue was not taken by the appellant before Harrison As J. The appellant concedes that to have been the case.

35 There would be a basis for precluding the appellant relying upon the point of law on the present appeal only if it appeared that the respondent had suffered, or might suffer, some prejudice as a result (see Suttor v Gundowda Pty Limited [1950] HCA 35; (1950) 81 CLR 418 at 438; Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491 at 497).

36 The respondent puts an argument that it has been prejudiced in the following way:

“The failure to raise the point below potentially deprived the Respondent of the opportunity of, for example, submitting to her Honour that, notwithstanding there may have been no power to enter judgment without an Affidavit pursuant to UCPR 16.7(2), no denial of natural justice resulted because, if the Magistrate had given the Respondent an opportunity to file an Affidavit pursuant to UCPR 16.7(2), the Respondent would have been able to establish the quantum ultimately determined in any event. To do this, the Respondent could have relied before her Honour upon the uncontested evidence that was before the Magistrate, but which had not been put before her Honour, that would have enabled a quantification of the default judgment, regardless of UCPR 16” (Paragraph 16 of Submissions dated 13 August 2008).

37 The “uncontested evidence” referred to in this passage is the statement of Mr Rahman dated 31 August 2006 referred to earlier in these reasons.

38 I do not consider that this argument can be sustained. The respondent is, so far as the adducing of further evidence is concerned, in no different position in this Court than it was before Harrison As J. As the appeal to her Honour was confined to points of law, it follows that any appeal to this Court was similarly so confined. This was reflected in the terms of the grant of leave which confined the appeal to this Court to a single point of law.

39 The prospects of the respondent persuading the Court to admit further evidence of the nature referred to in the respondent’s written submissions would not have been significantly different before Harrison As J than they would have been in this Court if relevant application had been made in either place. If the power to admit further evidence existed (s 75A(7) Supreme Court Act), it did so in both cases and there was in both cases, in light of the nature of this case and the evidence sought to be adduced, little, if any, prospect of the discretion being exercised in the respondent’s favour. The respondent’s position has thus in my view not been prejudiced by the point only being raised in the Court of Appeal.

Further Determination

40 In light of the reasons I have given above the entry of judgment without evidence to support it was not authorised. The respondent is however entitled to have its claim for judgment further considered by the Local Court on such evidence, if any, as the Local Court is prepared to admit.

Costs

41 Whilst in my view the appellant is entitled to succeed on this appeal, its entitlement arises only out of a point not raised before Harrison As J. If the point had been raised before her Honour, the probabilities are that it could have succeeded and that the appeal to this Court would have been unnecessary.

42 As a result, I consider that the appellant should pay the respondent’s costs of the appeal to this Court.

Orders

43 In my opinion, the following orders should be made:

(a) Appeal allowed.

(b) Set aside the judgment and orders of Brown LCM of 8 May 2007 other than his order striking out the appellant’s defence.

(c) Remit the matter to the Local Court to receive from the respondent an “affidavit in support” complying with the terms of Rule 16.6(2) of the Uniform Civil Procedure Rules and to give judgment for the respondent in such amount, if any, as it considers appropriate.

(d) Order the respondent to pay the appellant’s costs of the appeal to Harrison As J, with the respondent to have a certificate under the Suitors’ Fund Act 1951 concerning those costs if qualified.

(e) Order the appellant to pay the respondent’s costs of the appeal to this Court.

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