Westonia Earthmoving Pty Ltd v Geier
[2018] WASC 399
•20 DECEMBER 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WESTONIA EARTHMOVING PTY LTD -v- GEIER [2018] WASC 399
CORAM: MASTER SANDERSON
HEARD: 21 NOVEMBER 2018
DELIVERED : 20 DECEMBER 2018
FILE NO/S: CIV 2052 of 2018
BETWEEN: WESTONIA EARTHMOVING PTY LTD
Plaintiff
AND
WALTER HERBERT GEIER
First Defendant
CHRISTINE ETHEL GEIER
Second Defendant
ASHLEY JAMES GEIER
Third Defendant
STACEY ANN GEIER
Fourth Defendant
TANIA MICHELLE GEIER
Fifth Defendant
Catchwords:
Practice and procedure - Summary judgment - Judgment in District Court in excess of jurisdiction - Whether additional evidence should be admitted - Leave to reopen summary judgment application
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Leave to reopen summary judgment application granted
Leave to adduce further evidence granted
Application for summary judgment dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr T O Coyle |
| First Defendant | : | Mr S Vandongen SC & Mr J E Scovell |
| Second Defendant | : | Mr S Vandongen SC & Mr J E Scovell |
| Third Defendant | : | Mr S Vandongen SC & Mr J E Scovell |
| Fourth Defendant | : | Mr S Vandongen SC & Mr J E Scovell |
| Fifth Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Cooper Legal |
| First Defendant | : | Salerno Law |
| Second Defendant | : | Salerno Law |
| Third Defendant | : | Salerno Law |
| Fourth Defendant | : | Salerno Law |
| Fifth Defendant | : | No appearance |
Case(s) referred to in decision(s):
Simonsen v Legge [2010] WASCA 238
TLJ v Lai [2017] WADC 119
TLJ v Lai [2018] WASCA 201
MASTER SANDERSON:
This matter has an unfortunate procedural history. It is necessary to recount some of that history before even detailing the nature of this application. The matter began on 1 March 2017 in the District Court of Western Australia. The liquidator of the plaintiff sought to recover money allegedly owing from the defendants' first and second partnership with the plaintiff. The plaintiff claimed the sum of $898,215. That is the figure specified in the amended statement of claim which was filed 14 June 2017.[1]
[1] Submissions filed 29 October 2018 on behalf of first to fourth defendants at pars 1 ‑ 2.
On 25 August 2017 in a hearing of an application for summary judgment in the District Court before Registrar Kingsley the first to fourth defendants inclusive consented to part of the sum claimed by the plaintiff (being $437,205). Following the hearing judgment was given for the full amount of the claim but not entered. On 7 September 2017 the District Court raised the issue of jurisdiction by way of a letter to the parties. The letter explained that the judgment sum exceeded the jurisdiction of the District Court. Pursuant to an order of her Honour Judge Wager made 29 March 2018 the matter was remitted to the Supreme Court.[2]
[2] Submissions filed 29 October 2018 on behalf of first to fourth defendants at pars 3 ‑ 5.
The plaintiff's solicitors, not unreasonably, took the view that it was simply a matter of drawing the court's attention to the decision of Registrar Kingsley and then entering judgment for the full amount of the claim. By the time the matter reached this court, the defendants had changed solicitors. The new solicitors looked again at the claim and the evidence which had been relied upon by the defendants in resisting the summary judgment application. After some investigation, they reached the conclusion there was a defence available to the summary judgment application but the evidence had not been put before Registrar Kingsley.
It is convenient at this point to consider the plaintiff's claim. The amended statement of claim by the first 11 paragraphs identifies the parties.[3] The plaintiff is a company in liquidation. At all material times the directors of the plaintiff were the first named defendant and his son Darren Walter Geier (Darren). The second through to fifth defendants were relations of the first defendant.
[3] Amended Statement of Claim filed 14 June 2017.
It is pleaded that from approximately 28 May 2004 until 12 April 2012 the defendants carried on an earth moving business in partnership with Stebbing Enterprises Pty Ltd (Stebbing Enterprises) and Darren. This is described as 'the first partnership'. The first and second defendants were directors of Stebbing Enterprises. The first partnership traded as Westonia Civil Earthmoving. The customers of the first partnership included the plaintiff. On 26 July 2011 Stebbing Enterprises was wound up. On 12 April 2012 the liquidator of Stebbing Enterprises gave notice to its fellow partners and terminated the first partnership as at that date. From 12 April 2012 to 15 November 2016 the defendants carried on the earth moving business in partnership with Darren. That partnership is referred to as 'the second partnership'. The second partnership continued to trade as Westonia Civil Earthmoving. The customers of the second partnership included, until 31 January 2013, the plaintiff. On 15 November 2016 Darren entered personal bankruptcy.[4]
[4] Amended Statement of Claim filed 14 June 2017, pars 12 ‑ 21.
By par 22 of the amended statement of claim it is alleged that as at 12 April 2012 the amount owing from the first partnership to the plaintiff was $1,513,657.49. It is further alleged that during the period 12 April 2012 until 31 January 2013 the plaintiff advanced payments to, or for the benefit of, the second partnership. It is further alleged that during the period subsequent to 12 April 2012 until 31 January 2013 to second partnership charged to the plaintiff quarterly equipment hire fees of $416,226.80 which together with other credits and payments were credited to the loan account owing from the first partnership to the plaintiff and the second partnership to the plaintiff. The plaintiff alleges that the current balance owing from the second partnership to the plaintiff is $898,214. Particulars of that are found in par 25 of the amended statement of claim. For the purposes of this application it is necessary to detail those particulars. They read as follows:
a)The plaintiff's financial records show that at 31 January 2013 it was owed $437,205 by the second partnership in respect of the transactions referred to in paragraphs 23 and 24 above.
b)The plaintiff's financial records at 30 June 2013 show that it was owed $437,205 by the second partnership in respect of the transactions referred to in paragraphs 23 and 24 above.
c)The second partnership's financial statements at 30 June 2013 record an amount owing to the plaintiff of $478,766.
d)The second partnership's financial statements at 30 June 2014 record an acknowledgement that the second partnership incurred interest expense to the plaintiff during the financial year ending 30 June 2013, of $44,782.
e)The second partnership's financial statements at 30 June 2014 record a reversal of the hire contracting charges to the plaintiff for the financial year ended 30 June 2013 in an amount of $416,144 including GST.
f)The second partnership's financial statements at 30 June 2014 record an amount owing to the plaintiff of $898,214.
g)The second partnership's financial statements at 30 June 2015 record an amount owing to the plaintiff of $898,214.
h)The second partnership's financial records at 30 June 2016 record an amount owing to the plaintiff of $898,214.
Balance at 31 January 2013 as per plaintiff's financial records
$437,205
Add Back: Quarterly plant hire charges from second partnership to plaintiff December 2012
$416,207
Add: Interest for year ending 30 June 2013 as per comparative figures in second partnership's financial statements for year ended 30 June 2014
$44,782
$898,214
By par 27 of the amended statement of claim the plaintiff says that on 20 December 2016 the plaintiff demanded from each of the defendants payment of $437,205.39.[5] That is the amount that the plaintiff's financial records show as at 31 January 2013. Although the letter did not mention either the hire charges or the interest referred to above it was common ground between the parties it was the full amount of $898,214 which was claimed and which was in dispute.
[5] Letters from Quigley & Co dated 20 December 2016 and attachments PRQ‑18 to PRQ‑22 to the affidavit of Peter Reymond Quigley sworn 14 June 2017.
The application for summary judgment brought in the District Court was supported by an affidavit of Peter Reymond Quigley sworn 14 June 2017. The affidavit satisfies the requirements of O 14 of the Rules of the Supreme Court 1971 (WA) in as much as it verifies the amount of the claim and swears to Mr Quigley's belief there was no defence to the application. It is not necessary to go through Mr Quigley's affidavit in detail. Suffice to say he relies exclusively on company records. The relevant records are attached to his affidavit. There is nothing in that material which would, on its face, give rise to any doubt as to the veracity of the claim and which would call into question the plaintiff's right to judgment. That being so, the evidentiary onus shifts to the defendants. It is for the defendants to show there is a serious question to be tried. If that is to be done the defendants must condescend upon particulars.
When the matter came on before Registrar Kingsley, the defendants appeared by counsel. Counsel for the plaintiff advised the registrar that the defendants consented to judgment in an amount of $437,205. When that was put to counsel for the defendants his response was as follows:
My friend's assertions are correct, registrar. We do consent to a part judgment in that particular figure, $437,205, and I see no reason why the defence would not be amenable to the interest accruing from 20 December 2016.[6]
[6] ts 3, 25 August 2017 (District Court of Western Australia).
The registrar indicated he would enter judgment for that amount. He then proceeded to consider the remainder of the claim. Counsel for the plaintiff made detailed submissions based upon Mr Quigley's affidavit. He also touched upon the evidence in opposition to the application. That evidence comprised an affidavit of the second defendant sworn 21 August 2017.[7]
[7] Affidavit of Christine Ethel Geier filed 21 August 2017 in District Court of Western Australia.
As might be expected, the evidence of the second defendant touched only upon the reversal of the hire charges. The relevant paragraphs of the affidavit are pars 9 and 10. They are in the following terms:
9.I refer to paragraph 28(i) of the affidavit of Peter Reymond Quigley sworn in support of the Plaintiff's application for summary judgment on 14 June 2017 and state:
(i)I verily believe that the paragraph sets out the reversal in the accounting books of the Second Partnership noted in paragraph 25(e) of the Statement of Claim (the Reversal).
(ii)I verily believe that the Reversal was entered into the accounting books of the Second Partnership by its accountant because a majority of the Equipment was not being utilised by the Pliantiff's employees or agents during the financial quarter ending in December 2012.
(iii)I verily believe it to be true that the facts giving rise to the Reversal do not account for the fact that the Plaintiff was in possession of the Equipment during the financial quarter ending in December 2012 and therefore was in a position to enjoy that possession of the Equipment.
10.My solicitors have informed me and I verily believe it to be true that as a result of the facts stated in paragraph 9(iii) of this my affidavit, the Defendants likely have a claim against the Plaintiff for the Rental Fees from the financial quarter ending in December 2012 or a reasonable sum in the circumstances.
Not surprisingly, given the state of the defendants' evidence, the registrar indicated he would enter judgment for the plaintiff. In essence, he found the statements in par 9 of the second defendant's affidavit did not discharge the evidentiary burden thrown onto the defendants. It seems clear from his reasons the registrar had some difficulty understanding what defence was being raised. Having read the submissions of counsel and considered the evidence, the registrar's uncertainty was understandable. In my view, there was no question but that the registrar was right to indicate he would enter judgment for the plaintiff. In proceedings in this court it has never been suggested otherwise.
The matter was then remitted to the Supreme Court. When the matter first came on in chambers, counsel for the plaintiff made an oral application to enter the judgment in the form which had been prepared by the District Court after the hearing before Registrar Kingsley but which had not been entered because of the jurisdictional difficulty. There was no summons seeking entry of that judgment. For their part the defendants opposed judgment being entered and they lodged a number of affidavits to support their position. But they have never filed a summons seeking leave to reopen the summary judgment application. In my view it is necessary for them to do so. Properly considered, the summary judgment application is still extant but has been heard. The defendants, to avoid judgment being entered against them, need leave to adduce further evidence and reopen the summary judgment application. That is an important procedural step because were there to be an appeal against my decision the actual application upon which the decision is made needs to be clear. That said it is a procedural difficulty which can be overcome by the appropriate order.
At this point, it is necessary to jump ahead somewhat to consider the nature of the evidence upon which the defendants now seek to rely. This is found in an affidavit of Ross McDermott sworn 29 October 2018. Mr McDermott is a chartered accountant. According to his affidavit at par 3 he was engaged to 'provide a forensic accounting expert report in relation to the correct accounting treatment of transactions that have occurred between the plaintiff and the WH & CE Geier partnership during the period from 1 July 2009 to 30 January 2013'. Mr McDermott's report appears as attachment RM‑1 to his affidavit. It is in a form which is consistent with expert reports prepared for use in a trial of an action. For reasons which I will explain below it is unnecessary for me to go through in detail Mr McDermott's report. He concludes that on his analysis of the accounts that rather than the defendants being indebted to the plaintiff the plaintiff is in fact indebted to the defendants in the sum of $101,494.51.[8] The methodology used by Mr McDermott was the subject of detailed criticism by counsel for the plaintiff. But even taking into account counsel's submissions there is in my view no doubt had this report been available when the summary judgment application was argued there was no real prospect of judgment being entered. On the one hand there was the financial analysis of Mr Quigley based upon certain financial records. On the other hand there was Mr McDermott's analysis which called into question the way in which the accounts had been prepared. Taken in the overall Mr McDermott's report makes it arguable the defendants are not indebted to the plaintiff. I am satisfied if Mr McDermott's report had been in evidence summary judgment would not have been entered against the defendants.
[8] Report of Mr McDermott, page 23, par 11.
That then leaves the question of whether or not given the nature of the evidence the defendants now wish to rely upon they should be given leave to reopen their case and present that evidence. Based upon the decision of Simonsen v Legge [2010] WASCA 238 there are four matters to be taken into account in determining such an application. They are the length of the delay, the reasons for the delay, the prospects of the applicant succeeding in the appeal and the extent of any prejudice to the respondent. The parties in their written submissions approached the matter on the basis Simonsen was binding authority. However, just before the hearing of this matter the Court of Appeal published the decision in TLJ v Lai [2018] WASCA 201. This decision involved an appeal by the appellant from the refusal of a District Court judge to extend time to appeal against the grant of summary judgment to the defendants. There was a dispute between counsel as to whether or not this decision is relevant to the present application. Either way it requires careful consideration.
In the TLJ decision the appellant alleged in her writ that Dr Lai had performed a tubal ligation on her without her consent during the course of an elective caesarean. The critical factual question for the purposes of the summary judgment application was whether a tubal ligation had been carried out. This would have meant that the appellant could not have further children.
Dr Lai applied for summary judgment. He relied on affidavits sworn by his solicitors which simply annexed documents without deposing to any factual material as to whether the appellant had a cause of action. In particular reference was made to a diagnostic imaging report performed on 29 January 2009. The respondent also relied on an expert report which was based on a review of the images from the hysterosalpingogram.
The registrar granted summary judgment on 27 January 2016. At the hearing the registrar informed the appellant she had 10 days in which to commence an appeal. The appellant was at that time self‑represented. On 8 June 2017 the appellant lodged a notice appealing the registrar's decision in which she acknowledged that an extension of time was required. On 28 July 2017 she filed an affidavit in support of her application in which she said she had another case on at the time which 'took a lot of time'. The application for an extension of time to appeal the summary judgment was dismissed by a District Court judge on 31 August 2017.[9]
[9] TLJ v Lai [2017] WADC 119.
His Honour noted that the delay of 488 days was acute and required 'an exponentially more cogent explanation'[10] than the one provided by the applicant. His Honour said that the delay was neither intentional nor contumelious. 'Equally, I am not satisfied that it was merely the result of a bona fide mistake or blunder'.[11] He found that the prospects of succeeding in the appeal were 'poor' although 'not entirely absent'. He also found the grant of an extension of time would cause prejudice to the respondents. He refused leave to commence the appeal out of time.
[10] TLJ v Lai [165].
[11] TLJ v Lai [160].
The Court of Appeal upheld the appeal and determined the fresh evidence ought be admitted and the appellant given leave to reopen her case. The court said that relevant considerations in considering an application for grant of leave to admit additional evidence in an appeal against a final decision made after trial were the public interest in finality whether the additional evidence is properly categorised as fresh evidence which either did not exist at the time of trial or could not have been discovered with reasonable diligence at the time and the strength of the evidence. The ultimate question was whether it is in the interest of justice to admit the additional evidence. The court noted that in the context of an appeal from an interlocutory decision a consideration of finality applies with less force but remains relevant.
The Court of Appeal noted there was no basis for concluding that the fresh evidence could not have been discovered with reasonable diligence at the time of the summary judgment application. There was no explanation explaining why the letter was not adduced but it may have been that the appellant did not fully appreciate the existence of the evidence. The court did conclude that the fresh evidence supported the view the appellant had a very strong prospect of succeeding on the appeal. It determined it was in the interest of justice the evidence be admitted. Accordingly the appeal was allowed.
It was the plaintiff's submission that the TLJ decision did not support the general proposition that delay and reasons for the delay are not relevant in an application for an extension of time to appeal. With respect it is difficult to accept that submission. In TLJ there was no adequate explanation for the delay and the delay was by any measure extraordinary. The primary judge found that admitting fresh evidence would prejudice the defendant. Yet the fact that admitting the evidence was in the interest of justice carried the day. At the very least it must now be said the interest of justice are a prime or paramount consideration in determining whether fresh evidence ought be admitted.
Once that point is reached it is clear in this case the affidavit of Mr McDermott ought be admitted into evidence.[12] As I have indicated it alters the position drastically. In fact I am satisfied that when Mr McDermott's evidence is taken into account summary judgment would not be granted.
[12] Affidavit of Ross McDermott filed 29 October 2018.
Against that background I would propose to make the following orders:
(1)The defendants have leave within seven days to file a summons seeking to adduce the additional evidence on the summary judgment application.
(2)Service of the summons is dispensed with.
(3)The application to rely on the affidavit of Ross McDermott filed 29 October 2018 and the affidavit of Walter Herbert Geier filed 29 October 2018 is granted.
(4)The application for summary judgment is dismissed.
(5)The defendants are to pay the plaintiff's costs of the application for summary judgment in the District Court and the costs associated with the application to adduce further evidence in this court on a full indemnity basis such costs to be taxed and paid forthwith.
The parties have not had the opportunity to consider the form of the orders. On publication of these reasons I will give parties the chance to make submissions on the proposed orders.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DG
Associate to Master Sanderson20 DECEMBER 2018
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