New South Wales Supreme Court Dr Jonathan Carne v United Medical Protection Limited [2005] NSWSC 556 CITATION : This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 8 June 2005 JUDGMENT DATE : 21 June 2005 JURISDICTION : Common Law Division JUDGMENT OF : Associate Justice Malpass at 1 DECISION : The summons is dismissed; the plaintiff is to pay the costs of the summons; the exhibit may be returned. CATCHWORDS : Contractual claim for call upon member levied pursuant to constitution - duty to disclose and estoppel - leave to appeal on mixed question - relevant considerations. Dr Jonathan Carne (Plaintiff) PARTIES : United Medical Protection Limited (Defendant) FILE NUMBER(S) : SC 10809/05 Mr C P Locke (Plaintiff) COUNSEL : Mr R D Marshall & Mr T Rickard (Defendant) Oliveri Attorneys (Plaintiff) SOLICITORS : Sally Nash & Co (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 88011/04 LOWER COURT JUDICIAL OFFICER : Sweeney LCM - 6 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Associate Justice Malpass 21 June 2005 10809 of 2005 Dr Jonathan Carne v United Medical Protection Limited JUDGMENT 1 His Honour: The plaintiff is a medical practitioner. He had been a member of the Medical Defence Union Limited (MDU). There was a merger between the operations of MDU and the defendant which took effect from 1 January 1999. This followed the difficulties encountered by the former organisation. His membership of MDU was terminated. He was offered membership by the plaintiff commencing in the year of 1999. The membership provided medical indemnity. 2 The plaintiff received from the defendant a letter dated 30 November 1998 (together with a brochure). It is regarded by the plaintiff as being in the nature of promotional material. It advised, inter alia, that he would be invited to join as an ordinary member. The plaintiff complains that, whilst it presented the favourable aspects of membership, it did not mention the negative aspects of it (inter alia, it did not advise of the members' liability to pay a call). 3 He subsequently received a further letter dated 18 December 1998. It enclosed an application for membership. 4 The plaintiff applied for membership. He was a member for the years 1999 and 2000. He paid a subscription for each of those two years. He did not renew his membership for the year of 2001. 5 The defendant is a company governed by a constitution. The constitution has effect as a contract between it and each member. Pursuant to the constitution, it was entitled to make a call upon ordinary members. It did so during 2000. The call was in an amount similar to the subscription for that year (in the order of $7,000.00). 6 The plaintiff refused to pay the call. The defendant brought proceedings in the Local Court to recover the amount of the call. The proceedings were defended by the plaintiff. On 16 February 2005, the Magistrate (Sweeney LCM) found in favour of the defendant and entered judgment in the sum claimed ($7,456.90 plus interest). 7 On 8 March 2005, the plaintiff filed a summons in this Court. It purports to bring an appeal against the decision of the Local Court. It enumerates seven grounds of appeal. 8 The appeal was heard on 8 June 2005. it is unnecessary to individually address the various grounds. Largely, the hearing concentrated on one ground (the principal matter). 9 It is common ground that, in this case, an appeal lies where there is error in point of law. Leave may be granted where there is a question of mixed law and fact. The plaintiff bears the onus of satisfying the Court that the decision of the Local Court should be disturbed. 10 Before proceeding to deal with what was argued by the parties on the appeal, it is convenient to first go to the pleadings in the Local Court. 11 In essence, the defendant's case could be described as a simple claim for debt founded on contract (in this case, the call levied upon the plaintiff on 17 November 2000). 12 Largely, the defence put in issue the matters pleaded by the defendant (paragraphs 2-12]. The plaintiff put in issue, inter alia, that he was a member and was bound by the constitution. Paragraph 13 thereof, pleaded a defence of estoppel (which was said to arise by reason of failure to bring, inter alia, the constitutional power to the notice of the plaintiff). The balance of the defence would appear to be devoted to allegations of contravention of either of the Fair Trading Act 1987 or the Trade Practices Act 1974 (including misleading and deceptive conduct) or matters that were not pressed during the hearing before the Local Court. 13 There was no cross-claim (but paragraphs 18-21 of the defence are in the nature of prayers for relief). I should also state that there are restrictions on the relief that can be obtained in the Local Court pursuant to either of the Trade Practices Act or the Fair Trading Act. 14 There was evidence before the Local Court that made out the defendant's claim and the Magistrate found that it had proved all matters it must prove to succeed in its claim. This was a finding that cannot be disturbed in this appeal. 15 The Magistrate then proceeded to deal with the defences. The defence of estoppel was rejected. A further matter which relied on documentation that came into being subsequent to the making of the call (which was a guide to renewal for the year 2001) was also rejected. The Magistrate concluded that the plaintiff had not succeeded in establishing that the plaintiff had made any misleading or deceptive representation. Further, she observed that although she did not need to consider issues of reliance or detriment, she was of the view that the evidence did not establish either of them. 16 The further matter can be put aside, as it was not argued on the appeal and could not constitute a defence to the claim for the call. 17 The principal matter that was argued before this Court was that of error in dealing with the defence of estoppel. 18 The estoppel case was based on representation by silence. It had to be demonstrated that, inter alia, there was a duty to disclose or speak out. It was a defence upon which the onus was borne by the plaintiff. 19 The Magistrate examined the circumstances of the case and came to the conclusion, inter alia, that there was no duty to disclose the power to make a call and that there was no misrepresentation by silence. I am not satisfied that any basis has been demonstrated for the disturbing of that conclusion. 20 Upon the reaching of that conclusion, there was no need for the Magistrate to pursue other matters that had to be proved by the plaintiff (such as matters of reliance and detriment) to make out his estoppel defence. Despite that, she did express her views on these matters. 21 I shall mention certain of the circumstances thrown up by the evidence and certain of the observations made by the Magistrate. 22 It was the constitution that empowered the making of the call. A constitution now performs the function of what had been previously known as articles of association. The constitution itself had not been mentioned in documentation received by the plaintiff preceding the making of the call and a copy of it had not been given to the plaintiff. However, there had been mention of articles of association in such documentation. The plaintiff conceded that he had probably read the documentation. 23 The statute required the sending by the defendant of a copy of the constitution within seven days upon request in writing and payment of the prescribed fee. In this case, the plaintiff had not made any request. He maintained the view that he was unaware of the existence of a constitution or articles of association. 24 The plaintiff had been a member of MDU. He had been told that the defendant was taking over its operations. He had been told in the documentation that he was being offered membership. He completed a membership application form dated 22 December 1998. He received a letter dated 15 February 1999 confirming that he was a member of the plaintiff. He renewed his membership for the year 2000. 25 The Magistrate observed that he appeared to be an intelligent person not suffering from any apparent incapacity to read the letters and understand them. She attributed any lack of understanding or appreciation to insufficient attention. 26 A submission alleging lack of reasons was briefly put. What will suffice depends on the circumstances of the case. In my view, a reading of the judgment of the Magistrate reveals that the reasoning process of the Magistrate has been sufficiently disclosed. 27 I am not satisfied that there has been either error of law or error involving a question of mixed law and fact. 28 There was some brief argument directed to the question of what must be shown to obtain a grant of leave. The legislation itself affords no assistance on the question. It does not impose any express criteria. What happens in other jurisdictions may not be particularly helpful. 29 It may be a question that has to be dealt with on a case by case basis. There is an unfettered discretion which is to be exercised having regard to the relevant circumstances of the particular case before the Court. 30 One relevant matter may be the quantum of the amount in issue. In this case, the quantum is relatively modest. 31 Another relevant matter may be whether the issue in dispute has public interest. Whilst this matter was not fully argued, it is difficult to see the issue in this case as having that quality. It was said that there were a number of other disputed claims. However, there was no evidence to support that contention. If there was, it would have to be taken into account together with all of the other relevant circumstances. 32 The summons is dismissed. The plaintiff is to pay the costs of the summons. The exhibit may be returned. ********** 27/06/2005 - Rtf file not attached when originally published. - Paragraph(s) 1 - 32 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.