Wall Street Developments Pty Ltd v Egerton

[2010] QDC 44

[2010] QDC 44

DISTRICT COURT

APPELLATE JURISDICTION

JUDGE ROBIN QC

No 2943 of 2009

WALL STREET DEVELOPMENTS PTY LTD ACN 105052748	Appellant
and
EDWARD HUMPHREY EGERTON	Respondent

BRISBANE

..DATE 19/02/2010

ORDER

CATCHWORDS

Uniform Civil Procedure Rules r 476(4)
Defendant appeals against judgment entered when it failed to appear at trial - appeal struck out on basis defendant ought to have applied to the original court to have the judgment set aside

HIS HONOUR:  In this matter I want to be careful not to pronounce any decisions on issues which may require determination elsewhere on another occasion.

The appeal is one by the defendant against a judgment entered when at the trial it failed to appear.  The Acting Magistrate dealt with the situation (which involves a claim by a surveyor for his fees in a principal amount not much in excess of $10,000) when the matter came on for trial, the plaintiff fully prepared with witnesses available.  I am prepared to assume the plaintiff could have proved his case by presenting evidence.  The Acting Magistrate said, "I suspect the defendant won't be here."  Then, "I suspect the matter's not going to take very long, Mr Smith," to which Mr Smith of Counsel agreed, mentioning the professional witnesses who were there who might be "excused fairly quickly".  His Honour went on, "I'll obviously be granting judgment if the defendants are not here."

What appeared to be of interest to his Honour was how costs ought to be worked out.  The non-appearance of the defendant company was expected.  Its principal is Mr Williams.  He had obtained a medical certificate from Dr Kaur who didn't really know him, on the 11th of September 2009 indicating unfitness for work for a month.  He learned from the court in circumstances where he appears to have had the conduct of the matter for the defendant company that the certificate was unsuitable and got Dr Kaur on the 14th of September to make a handwritten change, apparently by changing "work" to "court".
The plaintiff and his advisers must have become aware of the defendant's interest in getting an adjournment on the basis of the medical certificate.  They subpoenaed the doctor, the upshot of which was that she called Mr Williams in to the surgery for a more thorough examination and determined to cancel the certificate.  She provided another to the court indicating her opinion on the 16th of September 2009 that Mr Williams will be fit for trial next day.

There has been evidence given by him and the doctor, also by Mrs Williams.  There is a conflict between the first two as to exactly what the doctor told him.  It's clear that within minutes of the consultation, he advised the Registrar of the Court that he could not attend the next day because of stress, that he was going to stress management as advised by the doctor and "would like adjournment when he can attend, seeing own doctor tomorrow re sugar problem and other matters."  That quote is the Registrar's note of the conversation.  In my opinion the approach was not an effective way of applying for an adjournment.

Dr Kaur confirmed that Mr Williams has diabetes.  Doubtless the circumstances of the Registrar's telephone call with Mr Williams came to the Acting Magistrate's attention.

There is no spelling out of the basis on which judgment for the claim and a substantial amount of costs was entered by the court below.  In my opinion, although there was no reference to it, it must have been by reference to Rule 476 sub‑rule (1).

The usual course of events would see evidence presented by the plaintiff in the ordinary way, as happened in NKV Enterprises Pty Ltd -v- Lorenzo Suarez [2007] QSC 086. The earlier practice in the various courts which now apply the Uniform Civil Procedure Rules varied.

In the Magistrates Court, Rule 192 provided that "if the plaint discloses a sufficient cause of action" the Court "may give such judgment or make such order as may be just."

District Court Rule 229 required that the court "shall give judgment for the plaintiff if the plaint discloses a sufficient cause of action."

RSC Order 39 Rule 31 provided that "the plaintiff may prove his claim so far as the burden of proof lies on him."  That provision is obviously the closest to Rule 476. 

In the circumstances, I don't propose to make any ruling on what Rule 476 required in the present case when, as things turned out, there was nobody before his Honour seeking an adjournment of the trial when it was called on.  It may be that "evidence" has a loose meaning.  It may be that it was proper for regard to be had to the state of the pleadings which Mr Smith commenced analysing in some detail.

The defendant's pleading referred to an agreement to pay the amount of the basic claim but subject to a condition.  Mr Smith has suggested that his client, the plaintiff below and respondent in this Court, might get some comfort from the claim being a liquidated one, a proposition Mr Stobie was not in agreement with.

What does matter about Rule 476, sub-rule (1) of which provided that "if a defendant does not appear when the trial starts, the plaintiff may call evidence to establish an entitlement to judgment against the defendant in a way the Court directs" is sub-rule (4) which provides that the court "may set aside or vary any judgment order obtained because of sub-rule (1) on terms the court considers appropriate."

The respondent in the appeal has contended, since its original outline of argument was filed, that the appropriate procedure for the defendant to adopt to have the judgment set aside was to proceed under Rule 476(4). That would have required the defendant to explain its non-appearance at the trial, and to establish - and presumably on oath - that there's a defence desired to be mounted of sufficient merit to justify a trial. The leading case in this regard is Evans v Bartlam [1937] AC 473, which has been frequently applied in Queensland.

Whether of not consciously seeking to avoid providing affidavit material on the merits, the appellant's procedure has had that effect.  In a supplementary outline of argument filed last Monday, Mr Smith expanded his argument in relation to what was proper procedure, raising a preliminary point that the court ought not to embark on the hearing of the appeal.  A decision on that preliminary point was reserved to permit the calling of the deponents, Dr Kaur and Mr and Mrs Williams, in order to suit their convenience.  All were present at court.

I am avoiding making any findings based on the evidence that was given in affidavit form or from the witness box or expressing preference for any evidence over any other.  That's because I think Mr Smith's preliminary point deserves to succeed.

Formally, there has been doubt, where a provision like Rule 474(4) exists, whether an appeal can be brought or whether the remedies available in the originating court should be pursued.   The preponderance of authority would appear to support the view that the appeal court does have jurisdiction but that the jurisdiction ought not to be too readily exercised, the proper course being to exhaust remedies available in the original court.

The leading case is Vint v Hudspith [1885] 29 Ch D 322. Bowen LJ there described it as "bad practice to encourage parties to come here without having the cause in the first instance tried by the court below." The outcome there was that the appeal was stood over for a fortnight in order to give the plaintiff, against whom a default judgment had been entered, time to make application to the primary Judge, to have the judgment entered set aside.

There were two cases in Victoria in 1896, Brown v Fraser (1896) 22 VLR 22 and Crotty v Clarke (1896) 22 VLR 594. These principles remain of current relevance, as established by Federal Court decisions such as Szibd v Minister for Immigration and Citizenship [2008] FCA 429 and Mzwik v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 185.

In Mzwik, despite doubts as to the propriety of the course taken by the applicant in appealing, the Judge proceeded to consider whether there was sufficient merit in the appeal to justify the grant of leave to appeal and an extension of time, reaching conclusions unfavourable to the applicant.

In Szibd, the conclusion was that the corresponding applicant's application for leave to appeal was misconceived and inappropriate in circumstances where he hadn't first made an application to set aside the decision under the relevant rule of the Federal Magistrates Court Rules. That applicant had failed to attend at the hearing. The judgment of Reeves J is helpful.

A recent appeal court decision of considerable assistance and to similar effect is Adams v Cronin (Unreported, Supreme Court of Victoria, Court of Appeal, 6 September 1996).  Of all of the authorities mentioned, in my opinion Brown v Fraser is the most pertinent because only it involves the entry of a judgment against a defendant who didn't appear at the trial.  Mr Higgins, appearing in support of that appeal, submitted, "The learned Judge has given a judgment not warranted by the Statement of Claim.  The proper course is an appeal to this court.  In Vint v Hudspith, the plaintiffs did not appear.  It is a different matter when the defendants do not appear.  They are unwillingly dragged into court.  No case is cited in which appeal was disallowed."

I have always been strongly of the view that the situations of plaintiffs and defendants in circumstances like the present are very different and that as Mr Higgins submitted, the court ought to show "a tenderness towards the defendant who fails to appear at trial".  Nonetheless, the outcome in Brown v Fraser was that the appeal was struck out with costs. 

Reasons advanced by Mr Stobie for not adopting that course here include that the appeal is not simply against the judgment, it's also an appeal against the refusal of an adjournment.  It's difficult to find from the transcript that an adjournment, which on the day wasn't requested because no‑one turned up, actually was refused. 

Mr Stobie's next argument is that the judgment was pronounced on no evidence.  That may or may not vitiate it.  I don't think it provides a reason for encouraging the appellant to invoke the processes of this court, which is likely to involve both greater delay and expense, rather than pursue the remedies that were available in the Magistrates Court.

The further reason advanced by Mr Stobie is that it's not clear that this is a case of a judgment under Rule 476 at all. Although the rule wasn't mentioned, I think that it is inevitably a judgment, if not under Rule 476, then under the equivalent previous practice which his Honour may well have had in mind (in the UCPR regime, Rule 476 in the one that appeal in the circumstances. I have no doubt that sub-rule (4) became applicable.) As Mr Smith says, it may or may not be the case that evidence has to be called in the ordinary way. This may be a potent point available to the appellant but I'm of the firm view that it ought to be tested first in the Magistrates Court, rather than here.

In recent times, there's evidenced in all sorts of ways a strong policy that litigants ought to have their issues resolved in the court at the lowest point in the judicial hierarchy which is available.

For those reasons, I think this appeal ought to be struck out with costs.

...

HIS HONOUR:  The appeal is struck out with costs to be assessed on the indemnity basis from the 15th of February 2010, when the supplementary outline made it clear to the appellant that its procedure would be challenged.

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