Robert John Bigo Stoney v A and S Boesley Pty Ltd
[2014] VSCA 237
•17 September 2014
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2014 0087
| ROBERT JOHN BIGO STONEY | Applicant |
| v | |
| A & S BOESLEY PTY LTD | Respondent |
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| JUDGES: | SANTAMARIA and KYROU JJA and GARDE AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 17 September 2014 |
| DATE OF ORDER: | 17 September 2014 |
| DATE OF REASONS FOR ORDER: | 26 September 2014 |
| MEDIUM NEUTRAL CITATION: | [2014] VSCA 237 |
| JUDGMENT APPEALED FROM: | A & S Boesley Pty Ltd v Stoney [2014] VSC 323 (Macaulay J) |
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SUMMARY JUDGMENT – Purchaser defaulted under contract for sale of land – Contract provided for service at the address of purchaser or purchaser’s legal practitioner – Legal practitioner corresponded about the contents of a default notice and filed affidavit which did not deny receipt of default notice – Judge did not err in finding implied admission of service on legal practitioner.
EVIDENCE – Hearsay evidence by vendor’s legal practitioner about posting of default notice by his secretary – Hearsay evidence permitted by r 22.03(3) of the Supreme Court (General Civil Procedure) Rules 2005 – No error shown.
EVIDENCE – Application to admit fresh evidence – No probative value and could not have affected decision below – Application dismissed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr M Stirling | Mr J D Mapleston |
| For the Respondent | Mr R Greenberger | Engel & Partners Pty |
SANTAMARIA JA
KYROU JA
GARDE AJA:
Introduction and summary
By his proposed notice of appeal, the applicant sought to set aside an order made by a judge in the Practice Court. The order granted summary judgment to the respondent in respect of the applicant’s claim that the respondent had not validly terminated a contract for the sale of land and that the applicant continued to have an equitable interest in the land.
As the notice of appeal was filed five days out of time, the applicant sought an extension of time and, if leave to appeal were necessary, such leave. He also sought leave to adduce fresh evidence.
On 10 September 2014, Pedley JR ordered that the application for an extension of time and, in the event that an extension were granted, the resultant appeal be heard at the same time.
At the conclusion of the hearing on 17 September 2014, we made the following order and stated that our reasons would be provided later:
1.The applicant’s application to adduce fresh evidence is refused.
2.The applicant have leave to file his proposed amended notice of appeal but must exclude paragraph 1A dealing with fresh evidence.
3.The time for the applicant to file his notice of appeal is extended nunc pro tunc to the date the notice was filed.
4.To the extent leave to appeal is required, leave is granted.
5. The appeal be heard instantly and be dismissed.
6.The applicant pay the costs of the respondent in respect of all applications and of the appeal on the standard basis.
7.The stay set out in paragraph 3 of the order made by the Honourable Justice Macaulay in Supreme Court proceeding number S CI 2014 0649 on 2 July 2014 be extended until 4:00pm on Friday 26 September 2014.
These are our reasons for the above order.
Facts
The respondent is the registered proprietor of five parcels of contiguous rural land in Reedy Flat, Victoria, being 992 Buchan–Ensay Road, 1119 Buchan–Ensay Road and 470 Hammonds Road (‘Land’). On 1 July 2010, the parties entered into a contract for sale of the Land, under which the applicant agreed to purchase the Land for a price of $1,450,000 (‘2010 Contract’). The applicant paid a deposit of $145,000.
On 2 September 2010, the applicant lodged a caveat on the title of the Land to protect his interest as purchaser (‘2010 Caveat’).
The 2010 Contract was a terms contract which entitled the applicant to possession of the Land upon payment of an instalment of $391,500 by 7 July 2010. The applicant paid the instalment by way of three part payments, all of which were made after 7 July 2010. The last part payment was made on 4 March 2011, and the applicant went into possession of the Land on that date.
Clause 17 of the 2010 Contract is titled ‘Service’ and provides as follows:
17. Service
17.1Any document sent by post is taken to have been served on the next business day after posting, unless proved otherwise.
17.2Any demand, notice, or document required to be served by or on any party may be served by or on the legal practitioner … for that party. It is sufficiently served if served on the party or on the legal practitioner … :
(a) personally; or
(b) by prepaid post; or
(c)in any manner authorised by law or the Supreme Court for service of documents.
The particulars of sale in the 2010 Contract specified the applicant’s address as 445 King Street, Melbourne and stated that his legal practitioner was James D Mapleston of 222 La Trobe Street, Melbourne.
The balance of the purchase price, $913,500, was due under the 2010 Contract on 7 July 2013 and the applicant failed to make payment.
On 31 July 2013, the applicant sought an extension of time to settle the purchase until 6 September 2013, and ‘as a sign of good faith’, instructed Mr Mapleston that he would deposit $9,067.46 into the trust account of the respondent’s solicitors, Engel & Partners Pty.[1] By letter dated 6 August 2013, the respondent’s solicitors acknowledged receipt of the funds in their trust account and agreed on behalf of the respondent to an extension of time for payment until 22 August 2013. The letter stated that if settlement had not taken place by that date, a notice of rescission would be served, and proceedings for an order for possession of the Land would be taken. The balance of the purchase price has never been paid.
[1]That amount represented payment of penalty interest due under the 2010 Contract for the period 7 July 2013 to 5 August 2013.
The respondent alleged that it had served two default notices on the applicant.
An affidavit was sworn by the respondent’s solicitor, Mr Peter Tovey of Engel & Partners Pty, on 29 May 2014 in which he stated that he had been informed by his secretary, Ms Judy Searl, and believes, that in each case she posted or faxed documents to various addresses or facsimile numbers to effect service of the two default notices.[2] According to Mr Tovey’s affidavit, the first default notice, dated 23 August 2013, was served with a covering letter by the following means:
·on the applicant’s solicitor, Mr Mapleston, by prepaid post to 2/222 La Trobe Street, Melbourne and by facsimile transmission on 23 August 2013;[3]
·on the applicant by prepaid post to 445 King Street, Melbourne on 26 August 2013; and
·on the applicant by prepaid post to the address of the Land on 26 August 2013.
[2]The appellant objected to the admission of parts of Mr Tovey’s affidavit on the basis that it contained hearsay evidence.
[3]Mr Tovey’s evidence was that he noted that the address ‘2/222 La Trobe Street, Melbourne, Victoria, 3000’ was specified on the letterhead used by Mr Mapleston.
The first default notice stated that the respondent intended to exercise its rights arising from the applicant’s default under the 2010 Contract unless the default was remedied within 14 days of service. The notice stipulated that, should the default not be remedied, the 2010 Contract would ‘immediately end’.
On 2 September 2013, the applicant emailed Mr Tovey to advise him that Mr Mapleston was no longer acting for him, and requested that future correspondence be sent directly to the applicant at PO Box 167, North Melbourne. On 4 September 2013, Mr Tovey received an email from the applicant advising that Ms Kathy Gamble of Madgwicks was acting on his behalf.
The default specified in the first default notice was not remedied.
On 10 September 2013, Mr Tovey wrote to the applicant noting that he had failed to remedy the default described in the first default notice, that the 2010 Contract was therefore at an end, and that the respondent was entitled to possession of the Land. The letter stated that the applicant was trespassing on the Land, and that the respondent required him to vacate the Land.
According to Mr Tovey’s affidavit, Ms Searl informed him and he believes that the letter of 10 September 2013 was sent by prepaid post to the following addresses:
·to the applicant at 445 King Street, Melbourne;
·to the applicant at PO Box 167, North Melbourne;
·to the applicant at the address of the Land;
·to Mr Mapleston at 2/222 La Trobe Street, Melbourne; and
·to Ms Gamble of Madgwicks.
On 11 September 2013, Ms Gamble emailed Mr Tovey confirming that she acted for the applicant and that she had received Mr Tovey’s letter of 10 September 2013. She requested that a copy of the first default notice be sent to her, on the basis that the applicant did not have ‘ready access to this document’.
Mr Tovey states in his affidavit that Ms Searl informed him and he believes that on 17 September 2013, the second default notice dated 16 September 2013 was served in the following way:
·on the applicant by prepaid post to 445 King Street, Melbourne;
·on the applicant by prepaid post to PO Box 167, North Melbourne;
·on Mr Mapleston by prepaid post to 2/222 La Trobe Street, Melbourne; and
·on Ms Gamble by email.
The covering letter sent with the second default notice advised that the sending of that notice was without prejudice to the respondent’s contention that the first default notice was valid and effective, and that accordingly the 2010 Contract had already come to an end.
The default specified in the second default notice was not remedied.
On 2 October 2013, Mr Mapleston wrote to Engel & Partners Pty, stating:[4]
I refer to your letter of 10 September 2013 in which you state that the contract between our clients is at an end and that your client is entitled to possession of the property.
At the outset my client denies that the contract is at an end and that your client is entitled to possession of the property. The Default Notice that your client relies on has serious factual inaccuracies amounting to a misdescription of the money alleged to be owing rendering the notice void and of no effect.
[4]It appears that Mr Mapleston had resumed acting for the applicant in the place of Ms Gamble.
On 17 October 2013, Engel & Partners Pty wrote to the applicant alleging that the second default notice had been served and the default had not been remedied and that, therefore, the 2010 Contract was at an end. The applicant was again advised that the respondent required him to vacate the Land forthwith. Mr Tovey’s affidavit states that Ms Searl informed him and he believes that the letter was sent by prepaid post to the following addresses:
·to the applicant at the address of the Land;
·to the applicant at 445 King Street, Melbourne;
·to the applicant at PO Box 167, North Melbourne; and
·to Mr Mapleston at 2/222 La Trobe Street, Melbourne.
In an affidavit sworn on 26 June 2014, the applicant denied receiving either of the default notices. He stated that in late July and August 2013, Mr Mapleston no longer traded at 2/222 La Trobe Street, but had moved to an address at Queens Road, Melbourne. He stated that he only engaged Madgwicks for a short period, and that he ‘cannot recall’ receiving a copy of a default notice from them.
Mr Mapleston swore an affidavit on 26 June 2014 in which he said that:
Postage and fax material that was sent to my old address in La Trobe Street was held by that office for me and I would drop in every few days to collect it. From my file, it appears that all of the material sent by Tovey’s office to me at my old office in La Trobe Street was collected by me and passed on by me to Mr Robert Stoney via email.
On 30 October 2013, Mr Mapleston again wrote to Engel & Partners Pty, stating:
My client again denies that the contract is at an end and that your client is entitled to possession of the property. The Default Notice that your client relies on has serious factual inaccuracies in it.
There was no assertion by Mr Mapleston in either of the letters referred to at [24] and [28] above that the default notice to which the letters referred had not been validly served on the applicant, or that Mr Mapleston had not received that notice.
In a further letter dated 11 December 2013 to Engel & Partners Pty, Mr Mapleston stated: ‘As advised previously my client does not accept the validity of the notices seeking to terminate the sale contract.’ Once again, there was no suggestion that Mr Mapleston had not received the two default notices.
On 20 January 2014, the respondent resold the Land to Xclusive Projects Pty Ltd (‘Xclusive’) for a price of $1,225,000 (‘2014 Contract’).
On 21 March 2014, the applicant and three other persons (Mr Peter Fuller, Mr Justin Whitford and Mrs Samantha Stoney) lodged a further caveat over the Land (‘2014 Caveat’).[5] The caveators claimed an estate in fee simple as the subsequent nominated purchasers under the 2010 Contract.
[5]Mr Fuller and Mr Whitford subsequently consented to the removal of the caveat.
Settlement of the 2014 Contract was to take place on 30 June 2014. The 2014 Contract obliged the respondent to provide Xclusive with clear title to the Land and thus the 2010 Caveat and the 2014 Caveat were preventing the settlement from going ahead.
Relevant legislation
Order 22 of the Supreme Court (General Civil Procedure) Rules 2005 (‘Rules’) applies to summary judgment for plaintiffs in proceedings commenced by writ. Rule 22.02(1) provides that:
Where the defendant has filed an appearance, the plaintiff may at any time apply to the Court for judgment against that defendant on the ground that the defendant has no defence to the whole or part of a claim included in the writ or statement of claim, or no defence except as to the amount of a claim.
Rule 22.03 of the Rules relevantly provides:
(1)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.
…
(3)An affidavit under paragraph (1) may contain a statement of fact based on information and belief if the grounds are set out and, having regard to all the circumstances, the Court considers that the statement ought to be permitted.
Rule 23.01(2) of the Rules provides that the Court may give judgment where a defence does not disclose an answer or is scandalous, frivolous or vexatious.
Part 4.4 of the Civil Procedure Act 2010 (‘Act’) is headed ‘Summary Judgment.’ The powers of the Court under that Part are in addition to the Court’s powers under O 22 of the Rules.[6] Section 61 of the Act provides that a plaintiff in a civil proceeding may apply to the Court for summary judgment on the ground that ‘a defendant’s defence or part of that defence has no real prospect of success.’ Section 62 is an equivalent provision which applies to defendants to civil proceedings.
[6]Act s 65.
Sections 63 and 64 of the Act provide as follows:
63 Summary judgment if no real prospect of success
(1)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.
(2)A court may give summary judgment in any civil proceeding under subsection (1)—
(a) on the application of a plaintiff in a civil proceeding;
(b) on the application of a defendant in a civil proceeding;
(c)on the court’s own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.
64 Court may allow a matter to proceed to trial
Despite anything to the contrary in this Part or any rules of 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.
Section 75 of the Evidence Act 2008 provides that, in an interlocutory proceeding, the hearsay rule does not apply if the party who adduces the evidence also adduces evidence of its source.
Proceeding in Practice Court
On 14 February 2014, the respondent commenced a proceeding by writ, to which the applicant and the Registrar of Titles are the first and second defendants (‘First Proceeding’). The statement of claim sought relief including a declaration that the 2010 Contract had come to an end, an injunction requiring the applicant to vacate the Land, damages for trespass and for loss upon resale of the Land, and an order that the 2010 Caveat be removed.
The applicant filed a defence dated 17 April 2014, in which he denied that the 2010 Contract had come to an end and that the Land had been lawfully sold to Xclusive. The applicant also filed a counterclaim in the First Proceeding dated 26 May 2014 but it is not necessary to describe its contents because it is not relevant to the appeal.
The respondent commenced a second proceeding by originating motion (‘Second Proceeding’), in which the respondent sought the removal of the 2014 Caveat.
In each of the First and Second Proceedings, the respondent filed summonses on 29 May 2014. In the First Proceeding, the respondent sought summary judgment pursuant to rr 22.02(1) and 23.01(2) of the Rules and / or ss 61 and 63 of the Act, on all parts of its claim other than its claim for damages, including an order for removal of the 2010 Caveat. In the Second Proceeding, the respondent sought an order for removal of the 2014 Caveat.
The applications for interlocutory relief were heard in the Practice Court and first came before Macaulay J on 26 June 2014. On that date, the applicant successfully applied for an adjournment to allow for the filing of affidavit material. The affidavit material was filed and the hearing resumed before Macaulay J on 2 July 2014, at which time the applicant sought a further adjournment to enable him to reformulate his defence and counterclaim. That application was refused.
Primary decision
Macaulay J identified two central questions that required resolution, only one of which is relevant to the appeal. The relevant question was whether the 2010 Contract was validly terminated by either of the default notices allegedly served by the respondent on the applicant. His Honour considered that this issue turned entirely upon whether one or both of the default notices were validly served. His Honour was satisfied that both of the default notices were validly served.[7] Macaulay J applied r 22.03(3) of the Rules and stated that he saw no reason not to permit the evidence of service given by Mr Tovey on the basis of information and belief. The conduct the subject of that evidence was of a routine, administrative nature, and it was appropriate to allow its reception.[8]
[7]A & S Boesley Pty Ltd v Stoney [2014] VSC 323, [26] (‘Reasons’).
[8]Reasons [44].
His Honour concluded that, even if he were not to have permitted the hearsay evidence of service given by Mr Tovey, he would have been comfortably satisfied by the implied admissions contained in the correspondence of Mr Mapleston set out at [24] and [28] above and the email from Ms Gamble set out at [20] above that the default notices were served on the applicant.[9]
[9]Reasons [44].
The 2010 Contract was held to have been validly terminated on 10 September 2013, which was 14 days after service of the first default notice.[10]
[10]Reasons [45].
Macaulay J decided that that the applicant had not demonstrated that there was a real question to be tried or that he had any real prospect of defending the respondent’s claim, or advancing a counterclaim. His Honour was also not satisfied that the relevant deficiencies could be cured by amendment or the substitution of a different counterclaim.[11]
[11]Reasons [63].
Macaulay J made orders in the First and Second Proceedings on 2 July 2014 and published his Reasons on 7 July 2014.
In the First Proceeding, the judge declared that the 2010 Contract was rescinded by the respondent on 10 September 2013, and that the respondent is entitled to possession of the Land. Paragraph 3 of that order required the applicant to vacate the Land, subject to a stay of 30 days to permit him to remove cattle and other property from the Land. The Registrar of Titles was directed to remove the 2010 Caveat and amend the Register accordingly. The applicant’s counterclaim was dismissed, and the order stated that the plaintiff have judgment on the counterclaim. The respondent’s claims for damages were adjourned to a directions hearing fixed for 21 July 2014.
In the Second Proceeding, Macaulay J’s order directed the Registrar of Titles to remove the 2014 Caveat and amend the Register accordingly. The further hearing of the respondent’s summons was also adjourned to 21 July 2014.
Grounds of appeal
The applicant’s amended notice of appeal relied on the following grounds of appeal:
1.The trial Judge erred in admitting into evidence the hearsay evidence of Peter Tovey (contained in paragraphs 7 and 10 [of] the affidavit of Peter Tovey sworn on 29 May 2014) as evidence of service of the first default [notice] on the appellant.
1B.The trial judge erred in concluding that there were implied admissions in the correspondence of Mr James Mapleston to the effect that the default notices were served upon the appellant.
2.The trial Judge erred in determining that the contract of sale had been validly terminated by the respondent.
3.The trial [Judge] erred in determining that the appellant had no real prospect of successfully … defending the claim of the respondent that the contract had been validly terminated.
The respondent filed a notice of contention but did not pursue it because it covered the same issue as ground 1B of the amended notice of appeal.
Parties’ submissions
The applicant submitted that the judge’s decision that the 2010 Contract had been validly terminated turned on his Honour’s finding that the applicant had been served with the default notices and that this finding was not open on the admissible evidence. It was not in dispute that if the finding was properly open to his Honour then the appeal could not succeed.
The applicant sought to impugn the judge’s finding on service of the default notices on two bases. The first basis was that his Honour should not have admitted the hearsay evidence of Mr Tovey about service of the notices. The second basis was that the evidence before his Honour was insufficient to support a finding that there were implied admissions that the default notices had been served on the applicant.
In relation to the admission of the hearsay evidence of Mr Tovey, the applicant contended that this evidence ought not to have been admitted for the purposes of the application for summary judgment. He submitted that when the potential consequences of the granting of summary judgment are balanced against the ease with which direct evidence could have been given by Ms Searl, the judge should have decided to reject the hearsay evidence.
Faced with the Court’s express power in r 22.03(3) of the Rules to receive hearsay evidence in a summary judgment application, the applicant made two submissions. The first submission was that r 22.03(1)(a) contained an implicit requirement that the affidavit in support of an application for summary judgment must contain direct evidence. The second submission was that the discretion in r 22.03(3) can only be exercised in respect of formal matters or matters which are not reasonably in dispute. In the present case, so it was said, the hearsay evidence did not relate to such a matter but rather to the critical issue in the summary judgment application.
The applicant also contended that another way of testing whether the hearsay evidence ought to have been admitted is to consider whether the evidence could have been led on a hearsay basis at trial, and submitted that it could not.
The applicant contended that the evidence of Mr Mapleston, set out at [27] above, was insufficiently precise to enable the Court to conclude that there were implied admissions that he had passed on the relevant default notices to the applicant. Further, the applicant stated in express terms that he did not receive the default notices. The applicant’s denials, so it was said, are sufficient to transport this case into the category of a case with a real prospect of success, rather than a hopeless case.
Finally, the applicant contended that the proper approach of the Court was to hold over the factual conflict concerning service to trial so that all relevant evidence could be adduced, in its proper form, and the witnesses cross-examined.
The respondent submitted that the construction of r 22.03(3) of the Rules advocated by the applicant cannot be accepted because it would involve reading into the rule qualifications which it does not contain. Further, so it was said, the applicant’s submissions really amounted to an argument that hearsay evidence should never be admitted in a summary judgment application, which is untenable given the terms of r 22.03(3).
The respondent relied on the terms of cl 17 of the 2010 Contract which permitted service of a default notice by prepaid post to either the applicant or his legal practitioner. Service of a default notice on the legal practitioner was said to constitute proper service even if the notice was not received by the applicant.
According to the respondent, the applicant’s submission that the factual conflict concerning service should have been held over to trial ignores the crucial findings made by Macaulay J as to implied admissions by Mr Mapleston and Ms Gamble that the default notices had been received. The respondent submitted that it is clear from the Reasons that, even if the hearsay evidence had not been admitted, the result would have been the same.[12] The admission of that evidence had no critical consequences in light of the other findings of the judge.
[12]See [45]–[46] above.
The respondent submitted that the judge’s finding as to the implied admission of service was open to his Honour in the light of the statements of Mr Mapleston and Ms Gamble that are set out at [20], [24], [27] and [28] above. The respondent emphasised that the judge did not make any finding that Mr Mapleston ‘passed on’ the default notices to the applicant; rather, his Honour found that those default notices had been served on the applicant by being served on Mr Mapleston.
Decision on grounds of appeal
The key issue for this Court is whether the judge erred in law or misapplied any discretion available to him in either admitting the hearsay evidence of Mr Tovey or finding that there were implied admissions by the conduct of Mr Mapleston or Ms Gamble that the first default notice had been validly served. In our opinion, the applicant has failed to establish any error of law or miscarriage of discretion.
Rule 22.03(3) of the Rules clearly authorised the judge to receive in evidence the statements made by Mr Tovey in his affidavit based on the information he had been provided by Ms Searl which he believed to be true. The fact that the hearsay evidence could be used to support a summary judgment against the applicant is not a reason for rejecting the evidence, as r 22.03(3) authorises the use of the evidence for this very purpose. We agree with the submission of the respondent that if the nature of the order to be made by the use of the hearsay evidence, namely summary judgment, in and of itself warranted rejection of the evidence, then such evidence could never be used for the very purpose for which r 22.03(3) provides.
Rule 22.03(3) of the Rules does not confer on an applicant for summary judgment an entitlement as of right to rely on hearsay evidence. Rather, the rule confers a discretion upon a judge to receive hearsay evidence. Whether this discretion should be exercised depends on whether, having regard to all the circumstances, the judge considers that the evidence ought to be permitted. Contrary to the applicant’s submission, those circumstances are not confined to evidence of formal matters or matters that are not reasonably in dispute.
In the present case, the judge was justified in exercising his discretion to admit the hearsay evidence because it related to administrative steps taken within the office of Engel & Partners Pty. Contrary to the applicant’s submission, the fact that the steps taken by Ms Searl in posting the default notices were proved by the hearsay evidence of Mr Tovey rather than the direct evidence of Ms Searl was not critical, as it would be difficult for the applicant to contradict the accuracy of that evidence in either case.
More importantly, the issue in this case was not how and by whom the default notices were posted, but whether they were received by the applicant or his legal practitioners by one of the means set out in cl 17 of the 2010 Contract. The applicant and his legal practitioners could have successfully defended the summary judgment application by credible evidence that they did not receive the default notices. Such evidence — which the applicant and his legal practitioners were uniquely placed to give — would have negatived the probative value of the hearsay evidence. Although the applicant asserted that he did not receive the default notices, neither Mr Mapleston nor Ms Gamble made such an assertion. In fact, Ms Gamble did not give any evidence at all.
It follows that the hearsay evidence of Mr Tovey was properly admitted pursuant to r 22.03(3) of the Rules. On the appeal it was common ground that s 75 of the Evidence Act 2008 also applied. However, s 75 was not raised before the judge.
The hearsay evidence, when considered with the provisions of cl 17.1 of the 2010 Contract, is sufficient to establish service of both the default notices because they were posted by prepaid post to the applicant’s address at 445 King Street, Melbourne and to Mr Mapleston’s address at 222 La Trobe Street, Melbourne and it has not been proved that they were not received at those addresses.
In relation to service at 445 King Street, Melbourne, in the light of all the evidence, the judge was entitled to reject the applicant’s evidence that he had not received the default notices. There was no evidence of the envelopes containing the default notices being returned to sender. Further, in her email dated 11 September 2013 to Mr Tovey, Ms Gamble requested a copy of the first default notice on the basis that the applicant did not have ’ready access to this document’[13] suggesting that the applicant had received the notice but could not readily locate it.
[13]See [20] above.
In relation to service at Mr Mapleston’s former business premises at 222 La Trobe Street, Melbourne, there was a surfeit of evidence to support a conclusion that Mr Mapleston had received the default notices. First, there was evidence that the envelopes containing the default notices had not been returned to sender. Secondly, in his affidavit of 26 June 2014, Mr Mapleston stated that he collected mail sent to him at that address ‘every few days’ and that he passed on to the applicant by email any ‘material’ received from Mr Tovey. In his affidavit, Mr Mapleston did not state that the ‘material’ he received from Mr Tovey did not include the default notices. Thirdly, and most significantly, in his letters dated 2 and 30 October 2013 to Engel & Partners Pty, Mr Mapleston commented on the contents of ‘the Default Notice’ in a manner which unequivocally suggested that he had received and had read the default notice to which he referred. That conclusion is reinforced by the contents of Mr Mapleston’s letter dated 11 December 2013 which are relevantly quoted at [30] above.
It must be borne in mind that proper service of a default notice for the purposes of the 2010 Contract does not require personal service on the applicant or the applicant in fact becoming aware of the contents of the default notice. Clause 17.1 of the 2010 Contract provides that service by prepaid post either at the applicant’s address or the address of his legal practitioner is sufficient. Under that clause, any notice sent by post is taken to have been served on the next business day after posting, unless proved otherwise.
The evidence established that the first default notice was posted to Mr Mapleston on Friday 23 August 2013 and therefore, according to cl 17.1 of the 2010 Contract, it would be deemed to have been served on Monday 26 August 2013 unless the contrary is proved. There was no evidence which indicated, still less proved, that the notice was not received by Mr Mapleston. To the contrary, Mr Mapleston’s evidence set out at [27] above indicates that he received the notice.
Indeed, on the appeal, counsel for the applicant conceded that it was open to Macaulay J to find that Mr Mapleston had received the first default notice. Once it is accepted that it was open to Macaulay J to so find, his Honour was able to find that the notice was received on 26 August 2013 even if there was no direct evidence that the notice was actually received on that day.
The evidence discussed above was more than sufficient to enable the judge to be satisfied that service of the default notices had been effected in accordance with the 2010 Contract by being served by prepaid post on Mr Mapleston.
In addition, the matters set out at [20], [24], [27], [28] and [30] above were sufficient to enable the judge to safely infer that Mr Mapleston had received both default notices and that Ms Gamble had received the second default notice and that they passed on to the applicant the documents that they had received. A solicitor has a duty to pass on to a client important legal documents received on behalf of a client. In the present case, there was no basis for concluding that Mr Mapleston or Ms Gamble breached this duty.
A reading of the judgment below as a whole indicates that the judge did not make his order in reliance exclusively on Mr Tovey’s hearsay evidence but also on his finding of an implied admission from statements made by Mr Mapleston and Ms Gamble that the applicant had been served with the default notices. Such a finding was well open to the judge in relation to the statements of Mr Mapleston. The finding in relation to Ms Gamble is less clear, as the second default notice was served on her by email. Clause 17.2 of the 2010 Contract does not expressly refer to service by email. As the parties did not make any submissions on the meaning of the phrase ‘in any manner authorised by law or the Supreme Court for service of documents’ in that clause it is not necessary for us to consider whether service by email satisfied the requirements of that phrase.[14]
[14]See, eg, Electronic Transactions (Victoria) Act 2000.
As the applicant conceded that proper service of the default notices would be effective in terminating the 2010 Contract, there is no basis for vitiating the orders made by the judge. It must follow that the appeal cannot succeed.
Decision on application to admit fresh evidence
The fresh evidence that the applicant sought to adduce on the appeal was a photograph of three envelopes which he claimed to have received on 25 August 2014 by text message on his mobile phone from an anonymous sender. The envelopes appeared to be from Engel & Partners Pty and were addressed to the applicant at the street address of the Land but without a postcode. Each envelope had a ‘return to sender’ sticker. The applicant did not allege that the fresh evidence was not previously available due to any default or misconduct on the part of the respondent.
Rule 64.22(3) of the Rules permits this Court to receive further evidence concerning questions of fact by oral examination, affidavit or deposition.
In Clark v Stingel,[15] Warren CJ, Chernov and Kellam JA summarised the principles upon which this Court will grant leave to introduce fresh evidence upon an appeal. According to their Honours, leave should only be given if:
·By the exercise of reasonable diligence such evidence could not have been discovered in time to be used in the original trial.
·It is reasonably clear that if the evidence had been available at the trial, and had been adduced, an opposite result would have been produced.
·The evidence proposed to be adduced is reasonably credible.[16]
[15][2007] VSCA 292 (‘Clark’).
[16]Clark [2007] VSCA 292, [25]. See also Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237, [522]–[523]; Sgargetta v National Australia Bank Ltd [2014] VSCA 159, [35]; Commonwealth Bank of Australia v Quade (1991) 178 CLR 134, 139–43.
In the present case, the fresh evidence did not satisfy the second and third of the above requirements. That evidence has no probative value because its provenance is unknown and the inferences to be drawn from it would be entirely speculative. The applicant’s contention that it can be inferred from the fresh evidence that the envelopes contained the default notices and that they were returned to Engel & Partners Pty cannot be accepted. This is because the contents of the envelopes are not disclosed and Mr Tovey swore an affidavit on 12 September 2014 deposing that neither he nor any of his firm’s staff had sent the text message to the applicant or had ever seen the envelopes with the ‘return to sender’ stickers on them.
More fundamentally, even if the fresh evidence can be treated as indicating that the default notices were not received by the applicant at the address of the Land, this would have no bearing on the question of whether the default notices were properly served at the other addresses to which they were posted, including the applicant’s address at 445 King Street, Melbourne and Mr Mapleston’s address at 222 La Trobe Street, Melbourne. The address that was critical to the judge’s decision was the 222 La Trobe Street address.
It follows that even if the less stringent test suggested by the applicant — namely, whether the fresh evidence with all the other evidence indicated that he arguably had a defence on the basis of failure to serve the default notices — were applied, that test would not be met.
Decision on application for an extension of time
Mr Mapleston swore an affidavit on 6 August 2014 in which he deposed that the notice of appeal was filed out of time because he erroneously assumed, based on discussions he had with staff of the Court, that time ran from 7 July 2014, when the Reasons were published, rather than from 2 July 2014, when Macaulay J pronounced his orders. This explains why the notice of appeal was filed five days out of time. The applicant did not personally contribute to the delay. The respondent did not allege that any prejudice was caused to it by the delay.
In the light of our conclusions on the substantive grounds of appeal, we decided to grant the application for an extension of time for the filing of the notice of appeal without considering this issue in any detail.
Decision on application for leave to appeal
The applicant did not initially seek leave to appeal on the basis that the summary judgment finally determined his rights under the 2010 Contract. When the correctness of this approach was raised at a late stage of the hearing of the appeal, the applicant made an oral application for leave to appeal should such leave be necessary. Once again, in view of our conclusions on the substantive grounds of appeal, we decided to grant leave to appeal, should such leave be necessary, without examining this question in any detail.
Decision on application for a stay
As stated at [50] above, para 3 of the order made by Macaulay J in the First Proceeding required the applicant to vacate the Land but granted a stay of 30 days. The applicant has not complied with this order. At the conclusion of the hearing of the appeal, the applicant requested an extension of the stay to enable him to remove from the Land items belonging to him. We decided to extend the stay until 4:00pm on Friday 26 September 2014.
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