Warea Pty Ltd v Waterloo Industries Pty Ltd

[1986] FCA 234

Re: WAREA PTY. LTD. and STRIPE PTY. LTD.
And: WATERLOO INDUSTRIES PTY. LTD. trading as DELTRITE FINANCIAL SERVICES;
WILLIAM LEONARD ARMSTRONG; LISA N. VIRBA; ROBERT WAYNE COLLINS and JOAN LENORE
CECILIA ARMSTRONG
Re: NERIDA PARKER
And: WATERLOO INDUSTRIES PTY. LTD. trading as DELTRITE FINANCIAL SERVICES;
WILLIAM LEONARD ARMSTRONG and LISA N. VIRBA
No. QLD G6 of 1986 and QLD G14 of 1986
Federal Court - Practice

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.

CATCHWORDS

Federal Court - admission of hearsay - application for summary judgment.

Practice - hearsay admissible other than on "trial" - whether summary judgment interlocutory or final.

Federal Court Rules, 0.19, r.1(2); 0.20, r.1; 0.20, r.5; 0.33, r.1; 0.33, r.2; 0.33, r.3(a)

HEARING

BRISBANE

#DATE 12:6:1986

ORDER

1. The applications for judgment under O.20, r.1 in G6 of 1986 and G14 of 1986 be dismissed.

2. The applicants pay to the first and second respondents their costs of and incidental to the said applications, to be taxed.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

These two applications for summary judgment under O.20, r.1 were heard together. The facts in each are not precisely the same, but it is convenient to discuss, in the first place, Warea Pty. Ltd. and Anor. v. Waterloo Industries Pty. Ltd & Anor., no. G6 of 1986.

1. The amended statement of claim in that case alleges that, from April to November 1985, the applicants paid the first respondent sums totalling $247,000 as a result of statements made on behalf of the first respondent. They were to the effect that the moneys were being invested in Eurobond transactions through a bank called the Caribbean Bank of Credit Limited. The essence of the case, so far as the present application is concerned, is that the bank mentioned never has existed. It should be said at the outset that on the information before me, that would seem to be correct. However, a procedural objection was raised by Mr. Cooper Q.C., who appeared with Mr. Hugh Fraser for the first and second respondents. He argued that the affidavit filed in support of the application contains hearsay and that, either because there is no power to do so, or in the exercise of the Court's discretion, the evidence should not be received. The "evidence of the facts on which the claim is based" is almost wholly hearsay.

2. The expression just quoted is from O.20, r.1, sub-r.(1) which reads as follows:
   
   

"Where, in relation to the whole or any part of the applicant's claim for relief, there is evidence of the facts on which the claim or part is based, and --

(a) there is evidence given by the applicant or by some responsible person that, in the belief of the person giving the evidence, the respondent has no defence to the claim or part;

(b) the respondent's defence discloses no answer to the applicant's claim or part; or

(c) the respondent is in default of appearance,

the applicant may move on notice for such judgment for the applicant on that claim or part and the

Court may pronounce such judgment and make such

orders as the nature of the case requires."

1. It will be noted that the sub-rule speaks of evidence without saying expressly whether hearsay is admissible. Mr. Cooper Q.C. argued that O.33, r.2 which permits the use of hearsay does not apply, at least to the evidence first mentioned in the rule; O.33, r.2, sub-r.(1) is as follows:
   
   

"This rule applies only to evidence other than

evidence on an issue at a trial and only where the circumstances are such that undue delay or

inconvenience would otherwise be caused."

It was contended that because the word "trial" is defined by O.1, r.4 to include "any hearing other than an interlocutory hearing", and an application for final judgment is not interlocutory, the power to admit statements made on information and belief, given by O.33, r.2(2), does not apply.

1. Although, under rules empowering the making of an order giving leave to enter final judgment, the making of such an order is interlocutory and not final (Cox Bros. (Australia) Ltd. v. Cox 50 CLR 314, Dudgeon v. Chie 92 CLR 342), O.20, r.1 plainly contemplates the making of a final order.

2. At first sight, the notion that an application for summary judgment is a "trial" is startling, and Mr. Russell, for the applicants, argued that I should hold that the definition of "trial" is inapplicable, because O.20, r.1 evinces a contrary intention. A somewhat similar problem confronted the House of Lords in Langdale v. Danby (1982) 1 WLR 1123, where a question arose whether a summary judgment under the English practice was a "judgment after ... hearing of any cause ... on the merits". The relevance of the question was to the admissibility of fresh evidence on appeal. Without any particular assistance from definitions, their Lordships decided the question in the affirmative, holding, in particular, that the hearing was "on the merits": p.1132, per Lord Bridge of Harwich. Fortified by that example, I hold that the definition of "trial" should here be applied, rather than held to be excluded by context, from which it follows that O.33, r.2 is inapplicable.

3. A cognate, but distinguishable, question raised by counsel is whether O.33, r.1 applies:
   
   

"Unless the Court otherwise orders or the parties

otherwise agree, the evidence of a witness at the trial of a cause shall be given orally."

Under O.20, r.5, an application for summary judgment under O.20, r.1, is to be made by motion upon notice. The motion must, by reason of the terms of O.19, r.1(2) be "supported by affidavits setting forth the facts relied upon". Because of these provisions, it is clear that O.33, r.1 does not require that an application for summary judgment be supported by oral evidence. It must, however, be supported by evidence other than of a hearsay character.

1. It may be true that, under most forms of similar rules, an application may be mounted on the basis of a hearsay affidavit (see, for example, Deputy Commissioner of Taxation v. Merness Investments Pty. Ltd. (1972) VR 866), but there does not appear to have been a universally accepted practice that such applications may be so made; even if there were, that practice could not stand against the terms of these rules.

2. I note that in National Westminster Finance Australia Ltd. v. Vas Pty. Ltd. and Ors. (unreported, 4 September 1985) Forster J. declined to act, in an application of this sort, on what was apparently hearsay evidence of a representation.

3. The view I have expressed does not necessarily apply to the requirement of O.20, r.1(1)(a) - i.e. I do not find it necessary to decide what must be the state of knowledge of the person who swears that, in his belief, the respondent has no defence.

4. Mr. Russell, for the applicants, argued that if I agreed with the submission of Mr. Cooper Q.C. on the preliminary point, then I should dispense with compliance with the rules of evidence as to proof of the non-existence of the bank in question, because that is a matter "not bona fide in dispute" within the meaning of O.33, r.3(a). There is certainly reason to think that the bank in question is a very shadowy creature, if indeed it has any sort of existence, but I am not satisfied that it would be an appropriate course to use the provisions of the paragraph relied on where, as the applicants rightly say, the question of the bank's existence is the central point of the application. The decision of the Full Court in Pearce v. Button (unreported, 7 March 1986) on O.33, r.3(b), and in particular the judgment of Lockhart J., suggest that provisions of this sort should not be read so widely as to cover the issue mentioned.

5. Apart from that, if I dispensed with compliance with the rules of evidence as to the non-existence of the bank, that would hardly bring success to the applicants, for it is difficult to hold, in a case of this sort, that the matter of inducement is not "bona fide in dispute". There is evidence that a director of the applicants made independent inquiries about the bank, and Mr. Cooper Q.C. argued that it might in the end be held that the applicants placed no reliance on statements made on behalf of the respondents. I would not think that contention would have much chance of ultimate success, but at this stage it cannot be treated as hopeless.

6. In summary, I hold that an application for judgment under O.20, r.1 must give "evidence of the facts on which the claim or part is based" other than by hearsay, because O.33, r.2 does not apply to such an application; that is so, because the application is not interlocutory.

7. The second application faces the same difficulty, and it, like the first, must be dismissed, with costs.