Cassatone Nominees Pty Ltd v Queenslandwide House & Building Reports Pty Ltd [2008] QCA 102

SUPREME COURT OF QUEENSLAND CITATION: Cassatone Nominees P/L v Queenslandwide House & Building Reports P/L & Ors [2008] QCA 102 PARTIES: CASSATONE NOMINEES PTY LTD ACN 097 207 040 (Appellant) v QUEENSLANDWIDE HOUSE & BUILDING REPORTS PTY LTD ACN 081 139 871 (First respondent/not party to the appeal) VERO INSURANCE LIMITED FORMERLY KNOWN AS ROYAL & SUN ALLIANCE INSURANCE AUST LTD ACN 005 297 807 (Second respondent) CGU INSURANCE LIMITED ACN 004 478 371 (Third respondent) FILE NO/S: Appeal No 5797 of 2007 SC No 775 of 2004 DIVISION: Court of Appeal PROCEEDING: General Civil Appeal ORIGINATING COURT: Supreme Court at Townsville DELIVERED ON: 2 May 2008 DELIVERED AT: Brisbane HEARING DATE: 2 April 2008 JUDGES: McMurdo P, Fraser JA and Fryberg J Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDERS: 1. That the appeal from the order of the learned primary judge made on 12 June 2007 by which the appellant's action was dismissed with costs to be assessed be allowed 2. Set aside the order of 12 June 2007 and in lieu thereof order that the second and third respondents' application for summary judgment be dismissed with costs to be assessed on the standard basis 3. That the appeal from the order that the appellant pay the second and third respondents’ costs of the successful application to set aside the default judgment be dismissed 4. That the second and third respondents pay the appellant’s costs of the appeal to be assessed on the standard basis -- 1 of 13 -- 2 CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – SUMMARY JUDGMENT – where the appellant claimed that a liability owed to it by the first respondent was covered by an insurance policy issued to the first respondent by the second and third respondents – where the second and third respondents alleged that they had repudiated the contract of insurance for non-disclosure by the first respondent – where the second and third respondents obtained summary judgment against the appellant – where r 293(2)(a) of the Uniform Civil Procedure Rules 1999 (Qld) required that no real prospect of succeeding be demonstrated before summary judgment be entered – whether a repudiation of the contract of insurance by the second and third respondents entitled the second and third respondents to summary judgment APPEAL AND NEW TRIAL – APPEAL – PRACTICE AND PROCEDURE – QUEENSLAND – WHEN APPEAL LIES – BY LEAVE OF COURT – COSTS ORDERS – where the trial judge made an order as to costs – where s 253 of the Supreme Court Act 1995 (Qld) provided that no order as to costs only, which by law are left to the discretion of the judge, shall be subject to any appeal except by leave of the judge who made the order – where no such leave was obtained – whether the appeal was competent Corporations Act 2001 (Cth), s 601AG Insurance Contracts Act 1984 (Cth), s 28, s 33 Supreme Court Act 1995 (Qld), s 253 Uniform Civil Procedure Rules 1999 (Qld), r 293(2) Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd (2005) 62 NSWLR 148, cited Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469; [2002] QCA 231, cited Cassatone Nominees Pty Ltd v Queenslandwide House and Building Reports Pty Ltd & Ors [2007] QSC 138, varied Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; [2005] QCA 227, cited Falcon v Famous Players Film Co Ltd [1926] 2 KB 474, cited Howard v Pickford Tool Co Ltd [1951] 1 KB 417, cited Nosworthy & Encel v SGIC (SA) [1999] SASC 496, cited Orb Holdings Pty Ltd v Lombard Insurance Co (Australia) Ltd [1995] 2 Qd R 51; [1994] QCA 155, cited Pagnon v WorkCover Queensland [2001] 2 Qd R 292; [2000] QCA 421, cited Queensland Pork P/L v Lott [2003] QCA 271, cited Queensland University of Technology v Project Constructions (Aust) P/L (in liq) & Anor [2003] 1 Qd R 259; [2002] QCA 224, cited -- 2 of 13 -- 3 Young v Tibbits (1912) 14 CLR 114; [1912] HCA 23, cited COUNSEL: L Evans for the appellant A P J Collins for the respondents SOLICITORS: Thomas Booler & Co for the appellant Minter Ellison for the respondents [1] McMURDO P: I agree with Fraser JA. [2] FRASER JA: The appellant appeals from a summary judgment dismissing its claim and from an order that it pay the costs of the second and third respondents’ previous successful application to set aside the appellant's earlier judgment in default of pleading. (I will refer to the second and third respondents as “the respondents”) Summary judgment appeal [3] The appellant's claim against the respondents was made pursuant to s 601AG of the Corporations Act 2001 (Cth), which provides: "A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if: (a) the company had a liability to the person; and (b) the insurance contract covered that liability immediately before deregistration." [4] The appellant alleged that it incurred loss for which Queenslandwide House & Building Reports Pty Ltd (which I will call “the company”) was liable as a result of deficiencies in the company’s pre-purchase building inspection report of residential property in Townsville in June 2001. Whilst that is in issue in the proceedings, the respondents did not seek to prove in the summary judgment application that the company did not have that "liability to the person" (the appellant) before the company was deregistered. [5] The appellant claimed that, before the company was deregistered in June 2006, its liability to the appellant was covered by an insurance policy issued by the respondents. [6] The respondents’ defence admitted the policy but alleged that before the company was deregistered the respondents had avoided the policy or otherwise were not obliged to indemnify the company under it on account of an alleged non-disclosure by the company to the respondents. That was the sole basis upon which the respondents sought summary judgment and upon which they defended it in the appeal. [7] It is to be emphasised that, although many other factual issues and questions of construction of s 601AG might arise at the trial, for the purposes of this appeal the respondents did not contend on any other basis that the policy was not one which, to -- 3 of 13 -- 4 quote the terms of the section, “covered that liability immediately before deregistration” of the company or that the amount of the appellant’s claim was not “payable to the company under the insurer's contract”. The respondents’ counsel disclaimed, for example, any submission that s 601AG applies only where an insurer’s liability had been ascertained by judgment or otherwise before deregistration of the company.1 [8] The respondents’ application for summary judgment was made under UCPR r 293(1). Sub-rule 293(2) provides: "(2) If the court is satisfied – (a) the plaintiff has no real prospect of succeeding on all or a part of the plaintiff's claim; and (b) there is no need for a trial of the claim or the part of the claim; the court may give judgment for the defendant against the plaintiff for all or the part of the plaintiff's claim and may make any other order the court considers appropriate." [9] The issue under paragraph (a) of r 293(2) is whether the plaintiff has no real prospect, as opposed to a fanciful prospect, of success.2 The respondents, as the applicants for judgment, assumed the burden of satisfying the Court to that demanding standard of their contention that, before the company was deregistered, they had avoided the policy or otherwise were not liable to indemnify the company under it on account of the company’s alleged non-disclosure. The reasons for summary judgment [10] The evidence relied upon to support the respondents’ argument that the appellant could not succeed in its claim was summarised in the following passage of the reasons of the primary judge (in which references to the “first defendant” are to the company): 3 “[36] Here the only evidence before the court is that by letter of 27 March 2003 the solicitors for the applicants wrote to the first defendant informing it that the applicants proposed to decline indemnity in relation to the particular claim the subject of the letter and all other claims for the relevant policy period and in any subsequent policy periods. The letter went on to invite the first defendant to respond to the issues raised in the letter and said that their clients would defer making a final decision for a period of 14 days pending the receipt of such an submissions. 1 See Hutchinson v Australian Securities and Investments Commission (2001) 167 FLR 90; [2001] VSC 198; (2001) 40 ASCR 198 at [25]. 2 Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) & Anor [2003] 1 Qd R 259 at [7]; [2002] QCA 224, and Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469 at [35]-[40]; [2002] QCA 231, cited with approval in Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; [2005] QCA 227. 3 Cassatone Nominees Pty Ltd v Queenslandwide House & Building Reports Pty Ltd & Ors [2007] QSC 138 at [36]-[39]. -- 4 of 13 -- 5 [37] Subsequently by letter of 29 January 2004 and with no written submissions having been received the applicants informed the first defendant that the indemnity sought in relation to all matters pursuant to the policy period 23 March 2001 to 23 March 2002 and any subsequent policy period were rejected for the reasons already explained. [38] The claim here fell within the policy period 23 March 2001 to 23 March 2002. There is nothing to suggest the first defendant or the liquidator took any action against the insurer.” [11] The primary judge then recorded the respondents’ submission in support of their application for summary judgment: “[39] For the applicants it is said that the claim against them by the plaintiff is doomed to failure since the only evidence is that the insurance contract relied upon did not cover the liability alleged immediately before deregistration. Claims under the policy had been rejected some years before.” [12] In subsequent paragraphs of the reasons4 his Honour referred to the appellant’s characterisation of the respondents’ rejection of indemnity as a wrongful repudiation of the policy. [13] His Honour then considered a question of construction of s 601AG and decided that it was not apt to cover a situation in which a plaintiff contends that the deregistered company’s claim against the insurer was for damages for wrongful repudiation of the policy. 5 (I interpolate here that this construction question does not fall for determination in this appeal, in which neither party contended that the respondents’ alleged liability to the company was for damages for wrongful repudiation and the respondents did not seek to support the judgment on any such basis). [14] In the course of considering that question, his Honour observed: 6 “[44] Here the only evidence is that the relevant contract does not cover the liability asserted here immediately prior to deregistration because liability under it had been denied in respect of such liability at a significantly earlier period.” [15] After rejecting various other arguments advanced by the appellant, including an argument that the respondents were estopped from contending that they had avoided the policy, the primary judge concluded:7 4 Cassatone Nominees Pty Ltd v Queenslandwide House & Building Reports Pty Ltd & Ors [2007] QSC 138 at [40]-[51]. 5 Cassatone Nominees Pty Ltd v Queenslandwide House & Building Reports Pty Ltd & Ors [2007] QSC 138 at [41]. 6 Cassatone Nominees Pty Ltd v Queenslandwide House & Building Report Pty Ltd & Ors [2007] QSC 138 at [44]. -- 5 of 13 -- 6 “[52] Whilst the expanded power for which section 293 of the UCPR provides is one which should be exercised cautiously it seems to me that there is in this case no reason to believe that the plaintiff could overcome the obstacle represented by section 601AG(b) in the light of the circumstances just described.” The issue in the appeal [16] The appellant contended that the reasons of the primary judge elided the distinction between wrongful repudiation and avoidance of the policy. The respondents rejected that view. They contended that the "obstacle represented by section 601AG(b)" to which the primary judge referred was that the respondents had validly avoided the policy and denied liability to indemnify the company before it was deregistered on account of the alleged non-disclosure by the company. Discussion [17] The effect of s 33 of the Insurance Contracts Act 1984 (Cth) is that s 28 of that Act provides an insurer’s only remedy for non-disclosure in a case of this kind. Section 28 provides: “(1) This section applies where the person who became the insured under a contract of general insurance upon the contract being entered into: (a) failed to comply with the duty of disclosure; or (b) made a misrepresentation to the insurer before the contract was entered into; but does not apply where the insurer would have entered into the contract, for the same premium and on the same terms and conditions, even if the insured had not failed to comply with the duty of disclosure or had not made the misrepresentation before the contract was entered into. (2) If the failure was fraudulent or the misrepresentation was made fraudulently, the insurer may avoid the contract. (3) If the insurer is not entitled to avoid the contract or, being entitled to avoid the contract (whether under subsection (2) or otherwise) has not done so, the liability of the insurer in respect of a claim is reduced to the amount that would place the insurer in a position in which the insurer would have been if the failure had not occurred or the misrepresentation had not been made.” [18] The submissions made on behalf of the respondents in the appeal, like those made to the primary judge, did not explain how the company’s alleged non-disclosure 7 Cassatone Nominees Pty Ltd v Queenslandwide House & Building Reports Pty Ltd & Ors [2007] QSC 138 at [52]. -- 6 of 13 -- 7 could have justified the respondents’ purported avoidance of the policy in circumstances in which they did not plead or attempt to prove that the non-disclosure was fraudulent: cf s 28(2). No other legal basis was identified as justification for the respondents’ stance. The submissions on behalf of the respondents did not, for example, contend for or articulate the elements of a claim that their liability under the policy should be reduced to nil under s 28(3).8 No doubt for that reason, the primary judge’s reasons do not advert to those matters. [19] In my respectful opinion it must be accepted that the reasons do not include any finding that the respondents’ purported avoidance of the policy or their denial of indemnity was justified by the alleged non-disclosure or on any other basis. Paragraph [44] of the judgement identified only the respondents’ denial of indemnity as the basis for his Honour’s conclusion that the policy had not covered the company’s liability to the appellant. [20] If the respondents’ unequivocal and repeated denials of indemnity were not legally justified then they and their assertions that they had avoided the policy amounted to a wrongful repudiation. It was not suggested that the company had accepted that repudiation. An unaccepted wrongful repudiation has been described as “a thing writ in water and of no value to anybody”.9 That is of course an exaggeration,10 but it is trite law that a wrongful repudiation does not of itself bring a contract to an end. If the respondents’ repudiation was wrongful then it did not displace the alleged liability of the respondents to indemnify the company under the policy. [21] The respondents did not contend that, if the repudiation was wrongful, the company’s liability was nevertheless not “covered” by the policy in terms of paragraph (b) of s 601AG; nor was it argued that in such a case there would be no amount “payable to the company under the insurance contract” within the meaning of the introductory words in the section. [22] The respondents’ counsel instead sought to support the summary judgment by the contention that the respondents’ entitlements to avoid the policy and to deny indemnity had been admitted. The precise admission was not expressed, but this was the general effect of the submission. This, it was submitted, was to be inferred by the company’s silence in the face of the respondents’ claims in correspondence that they were entitled to avoid the policy and deny indemnity on account of the alleged non-disclosure by the company. 8 Cf Orb Holdings Pty Ltd v Lombard Insurance Co (Australia) Ltd [1995] 2 Qd R 51, at 52, 57-58; [1994] QCA 155, and Midaz Pty Ltd v Peters McCarthy Insurance Brokers Pty Ltd [1999] Qd R 279 at 282; see also Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 193 CLR 603 at [47], [117]. 9 Howard v Pickford Tool Co Ltd [1951] 1 KB 417 per Asquith LJ at 421. 10 See, e.g., Foran v Wight (1989) 168 CLR 385. -- 7 of 13 -- 8 [23] In my opinion, that submission must be rejected. Before explaining my reasons for that conclusion I will summarise the evidence upon which the respondents relied for the submission. [24] By a letter of 11 June 2002 to its insurance broker, the company conveyed its opinion that a possible claim by the appellant was “dead”. Other evidence explains what this meant. An affidavit by the respondents’ solicitor exhibited the appellant’s earlier letters to the company of 23 February and 3 March 2002, by which the appellant had complained that damage to its house and contents, productive of financial loss to the appellant, had been caused by rain leaking through the roof. The complaint was that the defects in the roof were negligently overlooked in the company’s pre-purchase report, so that the company was responsible for the appellant’s loss. [25] The company passed that correspondence on to its broker, who forwarded it with a “claims advice” to the respondents. That document identified the “date of loss” as 19 March 2002 and gave other “claim details”. Later in the affidavit the solicitor swore that the appellant’s claim “fell into the 2001/2002 policy year”. [26] The opinion expressed in the 11 June 2002 letter that the claim was “dead” proved to be wrong. The appellant later sued the company. It was not submitted that the 11 June 2002 letter had withdrawn the company’s earlier claim or that there never was any “claim” to which the policy responded in the 2001/2002 policy year. That letter therefore does not materially support the respondents’ submission. [27] The letter upon which the respondents placed most emphasis was one dated 27 March 2003 from the respondents’ solicitors to the company. This is the letter described in paragraph [36] of the primary judge’s reasons. It referred to the respondents’ previous defence on behalf of the company of a claim by one Mr Finucan, under a reservation of rights in relation to indemnity. The letter asserted that the solicitors’ “investigations” had “ascertained” that the company had initiated a widespread practice of writing reports that “glossed over, or down played, deficiencies in dwellings” in order to maximise referrals to it by real estate agents; that this “practice” should have been disclosed to the insurers (the respondents) as being relevant to their decision to renew the policy; and that had it been disclosed the policy would not have been renewed. [28] The 27 March letter included this paragraph: “As a consequence, our client proposes to decline indemnity in relation to this claim, and all other claims for the relevant policy period and any other subsequent policy periods. However, if you would like to respond to the issues raised in this letter you are welcome to do so and our client will defer making a final decision for a period of 14 days pending receipt of your submission.” [29] The solicitors concluded their letter by communicating their view that the issues they had raised “make our continued involvement in the litigation inappropriate”. -- 8 of 13 -- 9 They indicated that they would apply to withdraw as solicitors on the record unless the company advised that it had retained new solicitors. [30] By letter from the respondents’ solicitors to the company’s broker of 28 March 2003, the respondents’ solicitors’ enclosed a copy of their letter of 27 March and stated that they “have recently received instructions from [the first respondent] to decline indemnity to [the company].” The letter also conveyed that the respondents “intend to decline indemnity for all other claims for the relevant policy period and any other subsequent policy periods.” [31] The next letter, from the respondents to the company’s broker of 29 January 2004, is summarised in paragraph [37] of the primary judge’s reasons. The respondents asserted in that letter that “the insured advised that they did intend to make written submissions in reply, however, no such submissions were ever received by [the first respondent].” [32] On 20 November 2006 the appellant wrote to the respondents’ solicitors seeking “full details of the material non-disclosure” they alleged. The response of 29 November 2006 did not provide any such particulars. It simply referred back to the letters of 27 March 2003 and 29 January 2004. [33] Before the company was deregistered and ceased to be a party to the litigation, its director, Mr Haks, swore an affidavit. Most of it was taken up with swearing to a defence to the appellant’s claim which is not relied upon in this appeal, but Mr Haks also deposed that he believed that he was entitled to an indemnity against the appellant’s claim and that “I have still not received any written advice from the brokers or the insurer as to why they assert I am not entitled to an indemnity.” [34] For completeness I should mention that a paragraph in an affidavit by a solicitor for the respondents conveyed that her employer had made investigations during the course of which “it was discovered that the principal of the first defendant, Mr Haks, had initiated a widespread practice of writing reports that glossed over or played down deficiencies in inspected dwellings”. That was alleged to have been done with a motive of strengthening relationships between the company and referring real estate agents. The affidavit, like the respondents’ defence, gave no particulars of those allegations. The respondents’ counsel did not contend that this paragraph was other than a recital of the respondents’ allegations: it was not relied upon as evidence of the truth of those allegations. The company’s failure to make submissions in response to the respondents’ invitation [35] The respondents did not adduce any evidence that any of the allegations made in the correspondence were true. Instead, a solicitor swore that the company did not make any submissions in relation to the respondents’ solicitors’ letter of 27 March 2003. On behalf of the respondents it was submitted that the company’s failure to make any such submission justified an inference that the company had admitted the respondents’ entitlement to avoid the policy and deny indemnity. -- 9 of 13 -- 10 [36] The respondents did not contend that the company had made any binding agreement to terminate the policy or that their conduct gave rise to an estoppel or any other defence to a claim by the company for indemnity. They contended only for an inferred admission. In the appellant’s proceeding, evidence that the company had admitted the respondents’ entitlement to avoid the policy and deny liability would wear the appearance of hearsay or irrelevance. The submission therefore provokes the question whether the suggested inference is admissible as against the appellant. [37] It might be contended that as the inferred admission concerned the company’s former claim under the policy it should be admitted against the appellant by analogy with the rule that successors in title to personal property are bound by admissions relating to the title made by a predecessor when in possession of the title.11 Support for that view might be found in the legislative policy behind s 601AG, which was simply to bypass the need to reinstate the company by enabling the ultimate recipient of the insurance proceeds to sue the insurer direct where the company had been dissolved. 12 The rule against the reception of hearsay evidence may not be so rigid as to preclude an exception in this kind of case.13 [38] On the other hand, s 601AG does not in terms constitute the appellant as a successor in title to the claim formerly held by the deregistered company. It has been held that the section creates a new, statutory cause of action that is separate from the deregistered company’s former cause of action against the company. 14 Similar features of dependents’ claims in Lord Campbell’s Act, actions and for compensation under workers’ compensation legislation and the like have been held to justify rulings that admissions by the deceased worker are inadmissible hearsay.15 [39] Those decisions are not directly on point and none were cited by counsel. Although this admissibility question was raised in the appeal it was not the subject of full argument; nor was any objection taken to the evidence before the primary judge.16 It is, I think, preferable to defer this question for a case in which it is necessary to decide it. It is not necessary to decide it here because in my opinion the admission for which the respondents contend was in any event not established by the evidence with sufficient clarity to justify summary judgment. 11 Falcon v Famous Players Film Co Ltd [1926] 2 KB 474. 12 Pagnon v WorkCover Queensland [2001] 2 Qd R 492 per McPherson JA at [17]; [2000] QCA 421. 13 Cf Nicholls v R (2005) 219 CLR 196 per Gummow and Callinan JJ at [178] – [179] 14 Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd (2005) 62 NSWLR 148 per Ipp JA at [19]-[20]; [41] – [46]; Nosworthy v State Government Insurance Corp (SA) [1999] SASC 496 at [93], per Olsson J. 15 Tucker v Oldbury Urban District Council [1912] 2 KB 317; Evans v Hartigan (1941) 41 SR (NSW) 179; Harper v Burton's Haulage Co Pty Ltd (1954) 55 SR(NSW) 237; McLaren v Victorian Stevedoring and General Contracting Co Pty Ltd [1960] VR 449 at 45. See also Holloway v McFeeters (1956) 94 CLR 470, per Dixon CJ at 476 and per Kitto J at 487-488, holding that admissions by an unidentified driver were not admissible against the Nominal Defendant. The point was left open by Williams, Webb and Taylor JJ, at 482. 16 If the evidence is relevant, characterising it as hearsay would not render it inadmissible in the summary judgment application if it were in the form required by rule 295(2) of UCPR. -- 10 of 13 -- 11 [40] Even passing by the statements in the letter of 29 January 2004 and the affidavit of Mr Haks which suggest that whether there is a satisfactory explanation for the company’s alleged failure to rebut the respondents’ allegations itself raises a factual issue, the evidence relied upon by the respondents did not support their contention that it was clear that the alleged admission should be inferred. [41] An admission is to be inferred from silence only when a rebuttal of the allegations “might reasonably be expected”.17 In Young v Tibbits (1912) 14 CLR 114 at 121 – 122; [1912] HCA 23, Griffith CJ said: “There are, no doubt, many occasions when silence gives assent, but there is some limitation. I respectfully adopt the words of Bowen LJ in Wiedemann v Walpole [(1891) 2 QB 534 at p 539]:- “’The limitation is, I think, this: Silence is not evidence of an admission, unless there are circumstances which render it more reasonably probable that a man would answer the charge made against him than that he would not’. That appears to me good sense, and it is in substance the principle laid down by Willes J, in Richards v Gellatly [LR 7 CP 127 at p131]. He says: - ‘It seems to have been at one time thought that a duty was cast upon the recipient of a letter to answer it, and that his omission to do so amounted to evidence of an admission of the truth of the statements contained in it. But that notion has been long since exploded, and the absurdity of acting upon it demonstrated. It may be otherwise where the relation between the parties is such that a reply might be properly expected’.” [42] The inference is open on the very limited evidence adduced here that the option of not responding was one which the company rationally might have preferred regardless of the truth or falsity of the allegations made against it. The 27 March letter is open to the construction that the respondents had decided to repudiate liability regardless of any response by the company. That view is reinforced by the unequivocal terms of the solicitors’ letter to the broker of 28 March. So far as the evidence goes the company may well have acted on the view that there was no point in responding and that it was preferable for it to keep its powder dry for subsequent litigation against its insurers; and it is of course not unusual for companies for whom indemnity has been denied by their insurers ultimately to face practical difficulties in pursuing such litigation. [43] As I have mentioned, the evidence relevant to the question whether the inference is available and should be drawn is very limited. Evidence is to be weighed according to the power of the parties to give it.18 The appellant could not be expected to have direct knowledge of the dealings between the company and the respondents concerning the policy. On the other hand, the respondents’ evidence suggested that they knew all of the relevant facts. The respondents alleged that their “investigation” had established that there was a “practice” that the company should have disclosed but failed to do so, but the respondents did not adduce evidence of that investigation or the specific facts revealed by it. Most obviously, the questions 17 Weissensteiner v R (1993) 178 CLR 217 at 229, per Mason CJ, Deane and Dawson JJ. 18 Blatch v Archer (1774) 1 Cowp 63, 65; 98 ER 969, 970; Hampton Court Ltd v Crooks (1957) 97 CLR 367, per Dixon CJ at 371. -- 11 of 13 -- 12 whether the alleged practice occurred prior to the renewal for the period in which the claim fell19 and whether the respondents would not have renewed the policy for the relevant period had the alleged practice been disclosed to them were peculiarly within the respondents’ knowledge but they adduced no evidence on that topic. [44] In this state of affairs, if the inference for which the respondents contend is available at all it “may be treated with greater reserve”. 20 [45] Counsel for the respondents relied upon the dictum by Jones J in Queensland Pork P/L v Lott [2003] QCA 271 at [41] (which echoed similar statements about the effect of the different summary judgment provisions in the former Rules of the Supreme Court) 21 that “once a prima facie case has been made out entitling the applicant to judgment then an evidentiary onus shifts to the respondent.” [46] That dictum must be understood in the context of the facts of that case. The applicant for judgment there adduced evidence that demanded an “irresistible” or “unavoidable” inference of fact in its favour yet the respondent, though shown to have the personal knowledge necessary to swear to a direct response, did not do so. 22 Here the position is very different. The inference for which the respondents contend is a questionable one, it involves mixed questions of fact and law, and the respondents are responsible for the paucity of evidence bearing on the question whether the inference is available or should be drawn. [47] These features strongly suggest that this is not one of those clear cases in which it is appropriate to deprive the appellant of the opportunity of a trial after taking advantage of the court’s usual interlocutory processes.23 Conclusion [48] In my opinion, the evidence upon which the respondents relied did not justify a finding that it was clear that the validity of the respondents’ purported avoidance of the policy or their denial of liability to indemnify the company was admitted by the company. It was therefore not shown, as UCPR r 292(2)(a) required, that the appellant lacked real prospects of success in its claim on the only basis advanced by the respondents. Summary judgment should not have been granted. [49] It is therefore unnecessary to consider the question whether, in terms of UCPR r 293(2)(b), any other consideration suggests that there is a need for a trial. 19 The primary judge found at paragraph [38] of the reasons that the “claim here fell within the policy period 23 March 2001 to 23 March 2002”. There is no finding that the alleged “practice” occurred or should have been disclosed before the date upon which the policy was renewed for that period. 20 Payne v Parker [1976] 1 NSWLR 191 per Glass JA at 201, applying Jones v Dunkel (1959) 101 CLR 298, 312; see also Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99. 21 Australia & New Zealand Banking Group Limited v Barry [1992] 2 Qd R 12 per Derrington J at 19. 22 Queensland Pork P/L v Lott [2003] QCA 271 per McMurdo P at [8]; per Cullinane J at [30]; per Jones J at [46]. 23 See Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 per McMurdo P at [3]; [2005] QCA 227. -- 12 of 13 -- 13 Similarly, there is no occasion to consider the appellant’s other grounds of appeal but I should record that the appellant’s counsel informed the Court that she did not seek to support grounds 1-3 of the notice of appeal. Costs appeal [50] The learned primary judge ordered that the appellant pay the respondents' costs of their successful application to set aside the appellant’s earlier judgment in default of pleading. The appellant did not appeal against the order setting aside the default judgment but it did purport to appeal from the costs order. [51] The appellant’s counsel did not present argument in support of this purported appeal and in my opinion it is incompetent. Costs were in the discretion of the primary judge. Section 253 of the Supreme Court Act 1995 (Qld) provides that no order as to costs only which by law are left to the discretion of the judge shall be subject to any appeal except by leave of the judge who made the order. No such leave was sought or granted. Orders [52] I would allow the appeal from the order of the learned primary judge made on 12 June 2007 by which the appellant's action was dismissed with costs to be assessed. I would set aside that order and in lieu thereof I would order that the respondents' application for summary judgment be dismissed with costs to be assessed on the standard basis. I would dismiss the appeal from the order that the appellant pay the respondents’ costs of the successful application to set aside the default judgment. [53] The respondents should be ordered to pay the appellant’s costs of the appeal to be assessed on the standard basis. [54] FRYBERG J: I agree with the orders proposed by Fraser JA and with His Honour's reasons for them. -- 13 of 13 --