Holmes v Jefferis

Case [2022] SASCA 63

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Appeal: Civil)

HOLMES v JEFFERIS

[2022] SASCA 63

Judgment of the Court of Appeal  

(The Honourable President Livesey, the Honourable Justice Doyle and the Honourable Justice Bleby)

30 June 2022

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES

EQUITY - EQUITABLE REMEDIES - ACCOUNTS AND INQUIRIES

EQUITY - TRUSTS AND TRUSTEES - POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES - ACCOUNTS

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT

The appellant was engaged for a time by the respondent as a bookkeeper in connection with the respondent’s physiotherapy practice.  The bookkeeper banked monies received by the practice.

In 2016, the physiotherapist commenced a claim against the bookkeeper for monies had and received, claiming that there is a shortfall in practice proceeds for which the bookkeeper is responsible.  The physiotherapist sought an order that an account be taken of all monies received by the bookkeeper.

The physiotherapist unsuccessfully sought summary judgment from a District Court master.  On 8 February 2022, a judge of the District Court allowed the physiotherapist’s appeal, gave summary judgment and ordered that an account be taken before trial.

The bookkeeper now seeks leave to appeal against the decision of the judge, contending that the judge erred in ordering the taking of accounts before trial.

Held (the Court) granting leave to appeal and allowing the appeal:

1.The action should proceed to trial in the ordinary way.

2.Even if the bookkeeper was an admitted accounting party, it was necessary to consider whether a liability to account at this time had been established.

3.In the circumstances of this case, the general rule described in Doss v Doss (1843) 18 ER 464 applied, and it was necessary for the physiotherapist to first establish that a sum was owed by the bookkeeper.

4.It was also necessary to consider the likely purpose and course of an account, when compared to proceeding to trial in the ordinary way.  The taking of an account before trial would likely only avoid a trial if it became a trial.

5.In these circumstances there was a reasonable basis for defending the claim for an account, and a summary order for an account should not have been ordered before trial.

Uniform Civil Rules 2020 (SA) rr 144.2(1), 144.3(1), 182.6, 213.1(1)(b); Judicature Acts 1873-1875 (UK), referred to.

Rowe v National Australia Bank Ltd (2019) 56 WAR 1, applied.

Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1; Anonymous (1412) 145 ER 47; (1388/89) 12 Rich II; Asset Risk Management Ltd v Hyndes [1999] NSWCA 201; Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (In Liq) (2000) 202 CLR 588; Barkley v Barkley Brown [2009] NSWSC 76; Clarke v Edwards [2012] SASC 213; Doss v Doss (1843) 18 ER 464; Duncan Davis (Sales) Pty Ltd v Davis

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Holmes v Jefferis [2022] SASCA 63
Case
[2022] SASCA 63
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CaseChat Overview and Summary

This matter concerned an application for summary judgment made by the plaintiff, Holmes, against the defendant, Jefferis, pursuant to rules 144.3(1) and 182.6 of the Uniform Civil Rules 2020 (SA). The plaintiff sought judgment based on admissions made by the defendant concerning the separate issue of taking an account.

The legal issue before the court was whether there was "no reasonable basis" for the defendant to contest the plaintiff's claim for an account. This required the court to consider the circumstances under which an order for an account can be made, particularly in the context of summary judgment.

The master determined that an order for an account is not merely an inquiry to ascertain if money is owed, but rather proceeds from a finding that an entitlement exists and an inquiry is necessary to quantify the amount due. Following the reasoning in *Roberts v Eckert*, the master concluded that for the defendant to be entitled to an order for an account, they would have had to prove at trial that the plaintiff was an accounting party. As the application was for summary judgment based on admissions, the master considered whether there was no reasonable basis for the defendant to contest the claim for an account.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The application was made pursuant to rr 144.3(1) and 182.6 of the Uniform Civil Rules 2020 (SA). Those rules are in the following terms:144.3—Judgment on admissions(1)The Court may, on application by a party, give judgment in favour of an applicant based on admissions on a claim, cause of action or separate issue that arises in the same manner as it may grant summary judgment under rule 144.2(1).182.6—Account or inquiry (1)If a judgment includes a provision that accounts be taken or an inquiry be conducted to determine relief to be granted, it may include provisions about—(a) the appointment of a party, an independent expert or another person to prepare the account or conduct the inquiry; (b) the nature and extent of the accounting or inquiry;(c) how the accounting or inquiry is to be undertaken including in relation to evidence being taken from persons to be examined; or(d) how the account or a report about the result of the inquiry is to be prepared.(2)A judgment may include an order that, on the filing of an account under this rule, a party must pay to another party an amount certified by the person preparing the account as owing.(3)The Court may monitor the progress of the account or inquiry and may—(a) require the person undertaking it to appear before the Court to explain any delay; or(b) make orders to enforce cooperation by a party in relation to it.The determination of the summary judgment application As can be seen from the terms of r 182.6, the rule of court assumes that there is a judgment and that the judgment includes a provision that accounts be taken or an inquiry be conducted. Accordingly, the physiotherapist sought judgment based on admissions pursuant to r 144.3(1) on the separate issue of taking an account pursuant to r 144.2(1). The summary judgment application was argued on 4 March 2021 and the master provided his decision to the parties on 13 April 2021. The master, with respect correctly, posed the question as being whether there was “no reasonable basis” for contesting the claim for an account. Both parties relied on Rowe v National Australia Bank Ltd and it will be necessary to return to that decision.[33] The master, however, followed the ruling of Nicholson J in Roberts v Eckert to the following effect:[34]In order for the defendant to have become entitled to an order for an account he would have had to prove at trial (and obtain a finding) that the plaintiff was an accounting party.[35] An order to account is not a mere direction to enquire into a situation in order to see if any money is due. It proceeds upon a finding that there is an entitlement and that an enquiry is necessary in order to work out the amount to which the moving party is entitled.[36] [33] Rowe v National Australia Bank Ltd (2019) 56 WAR 1 (Rowe) (Quinlan CJ, Murphy JA and Sofronoff AJA, with whom Quinlan CJ agreed). [34] Roberts v Eckert [2020] SASC 27, [43] (Nicholson J).[35] Hancock v Rinehart [2015] NSWSC 646, [338] (Brereton J). [36] See P Young, C Croft and M Smith, On Equity (Lawbook Co, 2009), [16.1300] and [16.1320].

Ratio Decidendi

Legal Principle Established

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