BRYMAT PTY LTD v KALJO SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, CLARKE and MEAGHER JJA 31 March 1989, 31 March 1989 [1989] NSWCA 29 LOAN — SUMMARY JUDGMENT — ONUS ON APPLICANT EXISTENCE OF A QUESTION OF FACT TO BE TRIED Clarke JA The first opponent sued the claimant in the District Court for repayment of the balance of a loan made on 26 July 1985. Prior to the issue of the proceedings there had been correspondence between the solicitors for the parties, in the course of which it was asserted on behalf of the first opponent that the claimant had not repaid the balance of the loan, and the claimant's solicitors contended that the loan had been made, not to the claimant but to one of its directors, Mr B Fleming, who is the first opponent's son-in-law. In their letter the claimant's solicitors added the observation that he was not prepared to repay the balance of the loan until the first opponent had returned some furniture which he had allowed her to use. The failure of the parties to resolve their different contentions led to the issue of a statement of claim which was followed by an application by the first opponent for summary judgment. This occurred, despite the fact that no defence had been filed, presumably because of the attempts by the parties to resolve their differences. Upon the filing of the motion for summary judgment, the claimant put on a misguided application seeking an order that the statement of claim be struck out. Both the motions came on for hearing before Judge Ward on 12 August 1988 and at the outset of the hearing counsel for the claimant indicated that he wished to have an order made dismissing the motion which his client had brought. He did, however, wish to rely on the affidavit filed in support of that motion, as providing an answer to the motion for summary judgment. Upon the case being called on for hearing, there was an interchange between counsel for the claimant and his Honour which in the circumstances which I will later reveal is unnecessary to recount in detail. It is sufficient for present purposes to note that although this interchange led to an application by the claimant that his Honour disqualify himself from further considering the matter, his Honour declined to take that course and proceeded ultimately to determine the motion. In his reasons for judgment, Judge Ward pointed out that the authorities established the principle that summary judgment should be entered only in the cases in which it was clear and beyond doubt that there was no real question of fact to be tried. His Honour was, in my opinion, stating the position accurately and I would refer only to what was said by the High Court in Fancourt v Mercantile Credits 48 ALR | at 10 where their Honours said: "The power to order summary or final judgment is one which should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.... In our view it is not possible to say without doubt on the whole of the material that there is no question to be tried concerning the payment of the deposits by the appellants." Consistent with that authority his Honour said: "The 2 UNREPORTED JUDGMENTS judicial officer should not give the relief sought except in the situation where there can be no reasonable doubt that the plaintiff is entitled to judgment." His Honour then proceeded to deal with the facts which had emerged from the affidavit evidence and from cross-examination of the first opponent on the one hand and Mr Fleming on the other. The former asserted that when she made the loan it was made clear by Fleming that the claimant company was the borrower. She stoutly denied suggesting that he said that he had borrowed the money...[several words missing from transcript] application and her evidence by two documents; the first was dated 26 July 1985 which, it will be recalled, was the date of the loan and was a receipt signed by Mr Fleming. the significance of this document was that it appeared on the claimant's letterhead paper. The second document was even more powerful evidence in support of the first opponent's claim. It was a statement of account recording the initial loan with an adjustment which it is not necessary to detail, and the present balance. It was dated 13 November 1985; was typed on the claimant's letterhead and was signed by another director of the claimant. The documentary evidence provided by the first opponent undoubtedly provided very significant support for her version of the conversation of 26 July. Mr Fleming, for his part, denied that the conversation had taken the course suggested by the first opponent. He said that he made it plain that he was the borrower and he added that there was no suggestion at any relevant time that the claimant was borrowing the money. He did not, however, support this version with any documentary evidence. His counsel took the stand that in order that the first opponent succeeded in obtaining an order directing the entry of summary judgment, she was obliged to show that there was no triable issue and that it was clear beyond doubt that she was entitled to that judgment. According to the argument by counsel for the claimant before Judge Ward and repeated before us by senior counsel for the claimant, the sworn evidence of Mr Fleming established the existence of a triable issue. The fact that it was not supported by any documents did not, according to this argument, detract from its force as providing a triable issue. It may be true to say that the absence of documentation supporting the claimant's version might make it difficult for the claimant to succeed in a trial, but given the sworn evidence of Mr Fleming the claimant was, at least, entitled to a trial. I should add the observation that counsel for the claimant opposed the hearing of the claim for summary judgment being converted into a full trial on the basis that he had not been able to marshal all the evidence which it was desired to call upon that trial. This suggests very strongly that the claimant adopted the stand taken, not only because of the requirement that the first opponent show that there was no triable issue before she could establish an entitlement to summary judgment, but because the claimant itself had not had time to prepare for trial and to provide further evidence. While it is somewhat difficult to see what additional evidence may have been called by the claimant, there is no doubt that one most important document was not before Judge Ward. That was the cheque for $50,000 which was handed by the first opponent to Mr Fleming when the loan was made. According to Mr Fleming, the cheque was a cheque drawn by a third party and made payable to the first opponent. Before she handed it over, she endorsed it and following these events Mr Fleming paid the money into his own bank account. However, his evidence is ambiguous in the sense that he does not make it clear whether the endorsement was a general one or one made specifically directing payment to URJ BRYMAT PTY LTD v KALJO (Clarke JA) 3 him. Of course if the endorsement had been made in his favour that fact would provide a large measure of support for his version of the conversation. It would appear that little attention was directed to the statement on the cheque before Judge Ward, for his Honour directed his attention to the material which supported the first opponent's version, noting that the only evidence which might be thought to support the claimant's version was the payment by Mr Fleming of the cheque into his bank account. This fact his Honour discounted, properly in my view, as being of limited relevance because Mr Fleming may well have done this even though the loan had been made to the claimant. In his final conclusion his Honour observed that the fact that the lack of documentary support for the claimant's contention tended to be supportive of his findings, which he had already articulated, as to the first opponent's truthfulness as to the initial conversation. He then said: "I am satisfied of that finding (that is the first opponent's truthfulness) concerning the making of the agreement beyond a reasonable doubt." In my opinion that statement by his Honour demonstrates error. The question which he was opposed was not whether he preferred the evidence of one witness to that of the other. It was not whether he should be satisfied beyond reasonable doubt that one witness's version was the truthful one. He was bound to address the question whether the claimant had demonstrated the existence of the triable issue. The client's sworn evidence would, if accepted, except in particular circumstances which do not appear in this case, normally be sufficient to raise such an issue. If the objective evidence demonstrated that the sworn evidence could not possibly be right, then it may have been open to Judge Ward to adopt the course which he did. If his Honour had come to the conclusion that not only was the evidence of the first opponent to be preferred, hut that the claimant's witness Mr Fleming was deliberately putting forward a false story for his own purposes, then again, the proper course may well have been to have ordered the entry of summary judgment. But the mere fact that the strength of his Honour's preference for the evidence of the first opponent was such as to lead him to say that he believed it beyond reasonable doubt does not, in my opinion, negate the existence of a triable issue. Indeed, it demonstrates the error in following the course that was taken in this case, because what happened was that his Honour reached a concluded opinion as to the truthfulness of the two witnesses without having a full hearing. He reached that conclusion in the absence of some evidence which may have been led at the final hearing. At the least, he reached that conclusion in the face of the statement by counsel for the claimant that he wished to call additional evidence upon the hearing. The result is that a determination was made of the same nature as the determination that should occur at the end of a full trial when that had not taken place. This error, in my opinion, re uires that the order made by his Honour be set aside. I would wish to add this. The claimant's witness Mr Fleming has said In his evidence that he borrowed the money and he presently owes that sum of money to the first opponent plus interest. He took the stand some time ago, and has adhered to that stand, that he will not repay that money until she returns the furniture which he says he has let her use. What is of present significance is that he has indicated that if she joined him as a party in the present proceedings he will consent to the entry of judgment against him for the amount outstanding. If the first opponent did join Mr Fleming, and he did then consent to judgment, she 4 UNREPORTED JUDGMENTS would be able to enforce that judgment unless he was able to secure a stay upon the basis of his proposed cross-action. These facts suggest to me that there was a lot in what his Honour said when he adverted to the unnecessary wasting of court time. It seems to me that if the parties apply some commonsense to their present predicaments then a proper arrangement can be made for the litigation of the only apparent disputed matter between them and that is the ownership of the furniture, or, at the least, the right to possession of the furniture. I say that because the dispute as to who is the correct defendant, seems to me to be one which it should not be necessary for the court to decide. I would uphold the summons and set aside the order made on 15 August 1988 by Judge Ward and order that the action be set down for trial on the pleadings which have been filed or any amended pleadings. I will leave the question of costs until later. Priestley JA I agree with what has been said by Clarke JA and wish to add onlya comment on the form of the proceedings as they were pursued before us today. They took the form of a summons for orders of a prerogative nature. When opening the proceedings before us, Mr Toomey informed the court that the claimant had become aware since commencing the proceedings in that form that it was open for an appeal to have been brought. That this is so is demonstrated, if it is necessary to demonstrate it, by this Court's decision in Singh v Varinder Kaur (1985) 61 ALR 720 in which this Court entertained an appeal from an order for summary judgment in the District Court. The proceeding by way of appeal is more convenient in general and has less possibility of procedural complications arising in it. However, in the present proceedings the point that has been decided could probably have been equally as well decided under either form of proceeding, and counsel for the first opponent, if I may say so, sensibly raised no question concerning the propriety of the matter proceeding upon the summons. In those circumstances, the court was content to deal with the first point in the way which it is doing, the substantial point being the same, whichever was in fact the more appropriate method of proceeding. PRIESTLEY JA: The Court makes the orders proposed by Clarke JA. The Court further orders that the first opponent pay the claimant's costs. The Court takes the view that this proceeding today falls within the description of a proceeding in the nature of an appeal within the meaning of s2 of the Suitors Fund Act and accordingly grants the first opponent a certificate under s6. Appeal allowed. Counsel for the Appellant: B Toomey QC and A Colefax Solicitors for the Appellant: Hunt and Hunt Counsel for the Respondent: ML Barr Solicitors for the Respondent: Gridiger and Co