Arthurell v Ryans Mulching Queensland Pty Ltd [2017] QDC 74

DISTRICT COURT OF QUEENSLAND CITATION: Arthurell v Ryans Mulching Queensland Pty Ltd [2017] QDC 74 PARTIES: ARTHURELL (appellant) v RYANS MULCHING QUEENSLAND PTY LTD (respondent) FILE NO/S: 37/16 DIVISION: Civil PROCEEDING: Appeal ORIGINATING COURT: Magistrates Court DELIVERED ON: 3 April 2017 DELIVERED AT: Brisbane HEARING DATE: 16 March 2017 JUDGE: Devereaux SC DCJ ORDER: I will hear from the parties as to the precise form of orders in accordance with these reasons. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – FROM INTERLOCUTORY DECISIONS – GENERALLY – appeal from interlocutory decision by Magistrate – whether the Magistrate correctly decided a letter sent by the plaintiff’s solicitor to the defendant’s solicitor, dated 26 June 2015, was not a step – whether the Magistrate correctly decided not to declare a letter dated 11 May 2016 an effectual step, under r 371 UCPR - whether notice was required prior to issuing a Notice to Admit Facts – whether the Magistrate conducted the hearing in “a fair and judicial manner” Magistrates Court Act 1921 (Qld) s. 45 The Rules of the Supreme Court 1901 (Qld) O.93 r.17 Uniform Civil Procedure Rules (Qld) r. 189, r. 221, r. 371, r. 389, r. 765 -- 1 of 8 -- 2 Artahs Pty Ltd v Gall Standfield & Smith (A Firm) [2012] QCA 272 Bates v Qld Newspapers P/L & Anor [2001] QSC 83 Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 House v The King (1936) 55 CLR 499 New Asian Shipping Co Ltd v Omar Farooq Sultan [2005] QSC 228 Perez v Transfield (Qld) Pty Ltd [1979] Qd R 444 Pickering v McArthur (No 2) [2010] QDC 90 Ure v Robertson & Ors [2016] QSC 210 Ure v Robertson [2017] QCA 20 Uzsoki v McArthur [2011] QDC 60 COUNSEL: Dr C. Jensen for the appellant Mr J. Ivanisevic for the respondent SOLICITORS: Dr Craig Jensen Lawyers for the appellant HopgoodGanim Lawyers for the respondent [1] This is an appeal from an interlocutory decision by a magistrate at Beaudesert on 17 October 2016. The claim, filed on 13 March 2014, is for damages for breach of contract, resulting from the delivery by the defendant of a load of mulch which allegedly contained asbestos. A defence was filed on 9 May 2014. Among other things, the defendant denies there was asbestos in any mulch it supplied. On 28 May 2014 the reply was filed, closing the pleadings. During September 2014 both parties made disclosure. [2] Relevant actions taken by the parties since disclosure included the following. On 26 June 2015, the plaintiff’s solicitors wrote to the defendant’s solicitors disclosing certain documents which, it is conceded, related only to the assessment of damages. On 11 May 2016, the plaintiff’s solicitors wrote to the defendant’s solicitors disclosing documents. On 6 July 2016, the solicitors for the plaintiff issued a notice to admit facts. By letter of 7 July 2016 the solicitors for the defendant replied that the plaintiff was unable to deliver the notice to admit facts because no step had been taken in the proceedings for more than 12 months and no notice had been given of the intention to proceed. A few days later, on 12 July 2016, the defendant’s solicitors wrote again reiterating its position that no step had been taken for more than 12 months but responding to the notice by not admitting 9 of the 10 facts. -- 2 of 8 -- 3 [3] The plaintiff takes the view that the manner of responding to the notice to admit is such that the defendant should be taken to admit the facts in the notice: UCPR r 189(2). The Application [4] The plaintiff filed an application in the Magistrates Court at Beaudesert seeking the following orders: 1. A declaration that the notice to admit was validly served. 2. A declaration that the defendant failed to give notice under r 189 disputing the facts. 3. Directing that the facts listed in the notice are admitted. 4. That the defendant pay the costs of the application on an indemnity basis. [5] The plaintiff argued that the letter of 11 May 2016 constituted a step. If notice was required before taking it, the defendant’s inaction during the period between that letter and the letter of 6 July 2016 with the notice to admit facts validated the May letter. At the hearing of the application on 17 October 2016, the discussion turned to the letter sent on 26 June 2015 because if that letter constituted a step in the proceeding notice of intention to proceed was unnecessary in May 2016. The learned magistrate decided: 1. that the delivery of material under cover of letter dated 26 June 2015 was not a step in the action; 2. that it would not “be a legitimate use of r 371 to apply it to the conduct in delivering further material in May (2016) such as to grant this application.” [6] Her Honour dismissed the plaintiff’s application. The appeal [7] By a notice of appeal amended by leave on the day of the hearing of the appeal, the grounds are: 1. The learned magistrate erred in law in not finding that the plaintiff took a step on 26 June 2015. 2. Alternatively the magistrate failed to exercise the discretion under r 371 correctly as regards to the purported step taken on 26 June 2015. 3. The magistrate should have held, on the basis of Supreme Court decisions to which she was referred, that the defendant had failed to have the step of 26 June 2015 set aside by the court, it was not a nullity and was valid for all purposes. 4. The magistrate should have then held that as the plaintiff had taken a further step on 11 May 2016 which had also not been impugned by the defendant, no month’s notice under r 189 needed to have preceded the notice to admit facts being served and declaration 1 should have been made. 5. Alternatively to the above grounds: the magistrate did not act in a fair and judicial manner. Particulars were given of ground 5 in the notice of appeal which I will come back to later. -- 3 of 8 -- 4 [8] The appeal is not a rehearing because it is from a decision which not a final decision: Magistrates Court Act 1921 (Qld) s 45; UCPR r 765(2). It is for the appellant to show error. The question is whether the decision was correct at the time it was made; whether the order was right on the material which the lower court had before it.1 [9] I am not satisfied that the Grounds have been made out however I am satisfied that the appellant does have a reasonable complaint that the learned magistrate failed to consider the balance of the application. Grounds 1, 2 and 3: the letter of June 2015. [10] The appellant submits: the letter of June 2015 was irregular in part, because it offended UCPR r 221, which provides that a party may disclose a document relating only to damages if the other party asks for its disclosure; but the action of delivering copies of documents was still a step. Also, the June 2015 letter noted the defendant had made a ‘right to information’ application and so probably already had copies of certain correspondence. The writer invited the defendant’s solicitor thus: “If you think otherwise please let us know.” Third, the letter reiterated (the word suggests the request had already been made) that the plaintiff required “disclosure of documents indicating where the truck driver loaded the mulch onto his truck and documents relating to the sources of mulch in any stockpile should the driver have taken mulch from a stockpile.” [11] In Pickering v McArthur (No 2) [2010] QDC 90, McGill SC DCJ decided that the sending of tax returns and notices of assessment, without request from the other side, was not required by the rules (referring to r 221) and was unlikely to satisfy the other requirement of the test as to whether an action was a step, namely that it progress the action towards a conclusion. [12] The appellant submits that Pickering v McArthur “is no longer good law”, referring to Artahs Pty Ltd v Gall Standfield & Smith (A Firm) [2012] QCA 272. In that case, Peter Lyons J, after reviewing authorities, said, “it seems to me that under r 389, an event may be a step in the action, notwithstanding that it is not required by the rules.”2 The example his Honour gave was the filing of a reply or other subsequent pleading. McMurdo P agreed that to be a step it must progress the action towards conclusion and that it was not necessary that the step be something required by the rules. The learned President used the same examples.3 Fraser JA did not join in that general statement. McMurdo P and Fraser JA considered the event submitted to be a step in the case, namely the making of an order initiated by case flow management which order was not met by the parties, was not a step. The appeal was allowed, and the action thereby allowed to proceed, because all members of the court agreed the primary judge wrongly assessed the applicant’s prospects of success and should have granted leave to proceed. [13] However the decision in Artahs changes prior thinking about what constitutes a step, I am not satisfied the learned magistrate erred in deciding the letter sent in June 2015 was not a step. It would be surprising if every letter passing between parties or their solicitors is now to be considered a step in the proceeding. The step must be 1 Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 per Mason J at 619. 2 [2012] QCA 272 at [48]. 3 Ibid. -- 4 of 8 -- 5 substantial enough that it may not be taken without notice more than one year after the last step. As McMurdo P said, “whether a step has been taken in a particular proceeding will turn on the pertinent circumstances in the case.”4 Insofar as the June 2015 letter incorporated the delivery of documents, they were unrequested documents relevant only to damages. The invitation concerning correspondence obtained from a government department, while reasonable and congenial, did not relevantly progress the proceeding. As for the ‘reiterated’ request for disclosure, this argument was not made to the learned magistrate, but does not, in any case, make the letter a step. It is not clear any such documents, which have not been produced, exist. In the circumstances of this case I am not satisfied the magistrate is shown to be in error where the letter contained a mere reiterated request for undisclosed documents.5 [14] The learned magistrate did not err as alleged in Ground 1. In the result, there was no occasion to exercise the discretion referred to in Ground 2 nor to consider whether the respondent should have made the application referred to in Ground 3. Ground Four: The letter of May 2016 [15] As the June 2015 letter was not a step, there was a gap of longer than 1 year between the parties’ disclosure and the letter of 11 May 2016. Without conceding this letter was a step, the respondent did not argue strenuously that it could not amount to a step. Nonetheless, I seriously doubt it was a step. The letter enclosed ‘by way of further disclosure’ a quote, invoices and a waste transport certificate; directed attention to an enclosed letter seeking to limit the issues; and asked whether the defendant was willing to sign a Request for Trial Date. The question has been, as I have set out above, whether the learned magistrate erred in declining to declare the step effectual. [16] UCPR r 389(1) provides that if no step has been taken in a proceeding for 1 year a party who wants to proceed must, before taking any step, give a month’s notice to the other party of the intention to proceed. [17] The appellant’s primary argument, as set out in the written outline of submissions, was that the May 2016 letter constituted a step; the letter of 6 July 2016 was “barely two months” later and; if the May letter was irregular it became valid by the respondent’s inaction before during the period between it and the July letter. The appellant relies on Perez v Transfield (Qld) Pty Ltd [1979] Qd R 444; Bates v Qld Newspapers P/L & Anor [2001] QSC 83 and New Asian Shipping Co Ltd v Omar Farooq Sultan [2005] QSC 228, and argues that the onus is on “the objecting party to apply to the court within a reasonable time to set the step aside. If that application is not made the step is validated.” [18] In Perez v Transfield, the plaintiff purported to enter the action for trial although 3 years had passed since the last step. After some delay, the defendant took the point. Ultimately, an application for dismissal for want of prosecution failed. The statements of Hoare J, with whom Lucas and Kelly JJ agreed - that a litigant should observe the requirements of the rules; that should he fail to do so the onus is on the other side to apply to the court within a reasonable time otherwise that party will lose its rights – 4 [2012] QCA 272 at [3]. 5 The respondent referred to Uzsoki v McArthur [2011] QDC 60. -- 5 of 8 -- 6 flowed directly from the provisions of the old Rules of the Supreme Court: O. 93 r 17.6 [19] In Bates & Ors v Qld Newspapers P/L & Anor, the claim was for damages for defamation. As Chesterman J wrote, the article “may not have been adequately researched.”7 The Courier-Mail published an apology for “certain inaccurate statements.”8 The plaintiffs filed an amended statement of claim substituting a plaintiff. This required leave. The defendants did not consent to the change. The plaintiffs applied for orders for the substitution and a declaration that the amended statement of claim was a step. The defendants filed an application for dismissal for want of prosecution. [20] Chesterman J noted the change in UCPR r 371 from the former Order 93. His Honour concluded the amended statement of claim, though irregular, was not a nullity: “The statement of claim in its present amended form, is valid until set aside.”9 This flowed from the statement that Perez was “authority for the proposition that an irregular proceeding, that is one which does not comply with the rules of court, is valid and will be effectual unless the court otherwise orders.”10 [21] Wilson J, in New Asian Shipping Co Ltd v Omar Farooq Sultan, referred to Perez v Transfield (Qld) Pty Ltd and Bates v Qld Newspapers P/L & Anor, concluding that the filing of an amended statement of claim without an order for joinder was contrary to the rules but remained valid unless the court ordered otherwise. In that case, the defendant applied, not under r 371, but for an order striking out the pleading as vexatious or an abuse of process. In the circumstances of the case, Wilson J would not have exercised the discretion under r 371 to declare the amended statement of claim ineffectual. [22] UCPR r 371(1) provides that a failure to comply with the rules is an irregularity. The step or document is not a nullity. [23] I accept the respondent’s submission that the present rule does not place an onus on the other side to take action within a reasonable period to prevent the step or document having effect, although it is unnecessary to decide the point in order to dispose of the appeal. [24] Although considering r 389(2), not r 389(1), Jackson J said as much in Ure v Robertson & Ors [2016] QSC 210. [25] The appellant argued the step taken was valid until declared otherwise. The language of the present rule does not include ‘validity’. The relevant distinction is between ‘effectual’ and ‘ineffectual’. A step which does not comply with the rules, while not a nullity, is irregular and not effectual. Rule 371(2) empowers a court, among other things, to declare the step effectual or ineffectual. [26] On appeal from the decision of Jackson J, in Ure v Robertson [2017] QCA 20, Bond J said, at [40]: 6 Lucas J expressed the opinion that the result was not the intention of the rule: [1979] Qd R 444 at 447. 7 [2001] QSC 83 at [1]. 8 Ibid. 9 [2001] QSC 83 at [10]. 10 Ibid. -- 6 of 8 -- 7 “The proper construction of r 389 (2) is that the ‘last step’ contemplated must be the last effectual step, namely a step which was effectual because it was regular when taken, or a step which, although irregular when taken, has since been declared to be effectual under the rules.” [27] So if the letter of 11 May 2016 was a step, it was not effectual because of the failure to give notice. [28] I have set out some of the history of the proceeding in paragraph 2. The parties continued to correspond and disagree through July and August 2016. The application was filed on 6 September 2016. [29] As to the exercise of discretion required under r 371(2), the appellant submits the justice of the case lies in his favour, as the defendant’s solicitors did not return the documents delivered in May 2016 and made no application. [30] The circumstances included the appellant’s sending the May 2016 letter without the required notice and then the notice to admit facts in early July. The defendant immediately took the point – that notice of intention to proceed had not been given. The defendant’s inaction between May and July, though a relevant consideration, was not decisive. The service of a notice to admit facts is a substantial step. The application was designed to confirm the service of that notice and the appellant’s view of the responses. I have noted the learned magistrate’s brief decision: that having decided the letter of June 2015 was not a step, it would not “be a legitimate use of r 371 to apply it to the conduct in delivering further material in May (2016) such as to grant this application.” [31] Such a conclusion has not been shown to be a wrong exercise of discretion, as required in the High Court’s decision in House v The King (1936) 55 CLR 499 at 504 - 505. Should it have fallen to me to exercise the discretion afresh, I would have reached the same conclusion. [32] The problem with the learned magistrate’s decision is that it did not go on to deal with the application before her Honour, which properly put was for a declaration that the notice to admit was an effectual step. Ground 5 [33] By Ground 5, the appellant attacks the conduct of the application by the learned magistrate. [34] The first basis of attack is that the learned magistrate decided the application on a preliminary ruling which was not sought by either party. In fact, the point was raised before her Honour – and had been in correspondence – and the appellant’s solicitor was armed with an affidavit attaching the letter which he filed by leave. It was proper for the learned magistrate to consider the matter. If the June 2015 letter constituted an effectual step, notice was not required before the letter of May 2016. [35] Next, the appellant argued that the learned magistrate failed to read court documents, the appellant’s submissions and several authorities and generally failed to give careful consideration to the application. I notice, from the transcript, that the hearing commenced at 9:37 am. After hearing submissions until 10.22 am the court -- 7 of 8 -- 8 adjourned, her Honour saying, “I’ll stand down and look at this material” and taking the set of rules lent by one of the advocates. Her Honour gave reasons for her decision from 10.43 am. [36] Finally, the appellant argues the hearing was conducted in a question and answer format and the appellant’s advocate was not given a proper hearing. At the hearing of the appeal the appellant’s solicitor referred me to certain expressions the learned magistrate used. [37] But for the matter I have mentioned in paragraph [32], I am not satisfied the appellant has shown any unfairness in the learned magistrate’s dealing with the application. Balance of Application [38] Having decided not to declare the letter of May 2016 effectual, the notice to admit facts was also ineffectual – or, in terms of the first order sought in the application, it was not ‘validly served’. As I have said, it was still necessary to decide the balance of the application. [39] The disadvantage to the respondent of receiving a notice to admit facts after no effectual steps had been taken for so long, would be in responding appropriately in the time allowed. It may be that the respondent wishes to take issue with some parts of the notice to admit. I notice that in written submissions before the magistrate the respondent argued the notice to admit was an abuse of process. This argument was not addressed at the hearing of the appeal so I do not express a final view on it. It should be for the respondent to take any point in the Magistrates Court or simply to respond to the Notice. [40] The proceeding is still on foot but has been stalled for some time now. A reasonable outcome of the application/appeal would be to declare the notice to admit an effectual step and order the respondent to have leave to reply to it afresh. [41] I will hear from the parties as to the precise form of orders but I am minded to order that the learned Magistrate’s orders be varied (only) by adding these two orders. -- 8 of 8 --