New South Wales Court of Appeal CITATION: Cosmos E-C Commerce Pty Ltd v Bidwell & Associates Pty Ltd [2005] NSWCA 81 HEARING DATE(S): 21/03/2005 JUDGMENT DATE: 18 May 2005 JUDGMENT OF: Hodgson JA at 1; Ipp JA at 2; Pearlman AJA at 3 DECISION: Refer para 53. CATCHWORDS: PRACTICE AND PROCEDURE - summary judgment - strike out of grounds of defence - pleading general issue - triable issues - principles for exercise of summary judgment - evidence of belief in no defence - whether belief can be inferred. LEGISLATION CITED: District Court Rules 1973 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Fieldbank Ltd v Stein (1961) 1 WLR 1287 General Steel Industries Inc v Cmmissioner of Railways (NSW) & Ors (1964) 112 CLR 125 Harry Smith Care Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1979) 29 ACTR 21 CASES CITED: Theseus Exploration NL v Foyster (1972) 126 CLR 507 Tomlinson & Anor v Cut Price Deli Pty Ltd & Ors (1992) 112 ALR 122 Webster & Anor v Lampard (1993) 177 CLR 598 Wickstead v Browne (1992) 30 NSWLR 1 Cosmos E-C Commerce Pty Ltd PARTIES: Sue Bidwell & Associates Pty Ltd FILE NUMBER(S): CA 40379/04 P R Graham QC with Mark Cohen Applicant COUNSEL: L Robberds QC with Ms J Pentelow Respondent Muggletons Applicant SOLICITORS: Watson Mangioni Respondent LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 2590/03 LOWER COURT JUDICIAL OFFICER: Cooper DCJ, Rolfe DCJ IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40379/04 HODGSON JA IPP JA PEARLMAN AJA Wednesday, 18 May 2005 COSMOS E-C COMMERCE PTY LTD v SUE BIDWELL & ASSOCIATES PTY LTD Judgment 1 HODGSON JA: I agree with Pearlman AJA. 2 IPP JA: I agree with Pearlman AJA. 3 PEARLMAN AJA: Introduction The claimant seeks to appeal from an interlocutory judgment of Cooper ADCJ in the District Court in which the primary judge made the following orders: (1) Struck out the claimant's grounds of defence; (2) Refused leave for the claimant to file amended grounds of defence; (3) Entered summary judgment in favour of the opponent; (4) Set the proceedings down for hearing as to the assessment of damages; (5) Dismissed the cross defendants' motion to strike out the claimant's cross claim; (6) Rejected an application that the claimant provide security for costs in relation to the cross claim; and (7) Ordered a separate trial for the cross claim. 4 In a separate judgment delivered on the same day as the principal judgment, Cooper ADCJ granted a stay of the proceedings for seven days, and, in a further separate judgment, made various orders for costs. 5 On 11 June 2004, Rolfe DCJ refused to extend the stay granted by the primary judge and set the proceedings down for hearing on the assessment of damages. On 28 July 2004, upon notice of motion filed by the claimant, this Court granted leave to apply out of time for leave to appeal from the orders made by Rolfe DCJ and stayed the orders made by both Cooper ADCJ and Rolfe DCJ until the hearing of applications for leave to appeal. The pleadings in the Court below 6 The respondent (the plaintiff) had commenced proceedings in the court below seeking payment of $221,700 claimed to be for fees for consultancy services provided by Mr Barry Bidwell, on behalf of the plaintiff, to the claimant (the defendant). 7 The proceedings had been commenced by a statement of claim in which the plaintiff pleaded the following case. It alleged that between August and 21 December 1999, the plaintiff had made an oral agreement with Mr Adam Gilchrist on behalf of the defendant in which the plaintiff agreed to provide consultancy services through Mr Bidwell. The fee was alleged to be $1000 for each day from 12 March 1999 in which the plaintiff provided consultancy services to the defendant or any other company of the Cosmos group of companies. On 18 May 2000, the terms of the oral agreement were incorporated into a written agreement or, alternatively, the oral agreement was varied by the written agreement. One term of the written agreement was that the plaintiff's daily fee would be for a minimum of three days per week, and another term was that the fee would be paid within 21 days of the invoice date. The plaintiff claimed that it had provided 300 days of consultancy services to the defendant pursuant to the agreement, amounting to a fee of $300,000 (plus an amount of $6,700 for goods and services tax), for which it had issued an invoice, and in respect of which the defendant had paid $85,000, leaving an amount of $221,700 due and owing to the plaintiff. 8 In its grounds of defence, the defendant denied each of the allegations in the statement of claim. It then continued with a statement to the effect that it had no knowledge of the plaintiff's allegations and assertions. It stated that it was a proprietary company all the shares of which were acquired by Cosmos Limited, formerly Medicine Quantale Limited, in March 2001, and that, at the time of acquisition, no records relating to the matters claimed in the statement of claim were brought to the attention of Cosmos Limited or contained in due diligence documentation. It stated that following receipt of the invoice referred to in the statement of claim, the defendant's officers had made inquiries but had not located any records relating to the plaintiff's allegations and assertions. 9 As well as filing notice of grounds of defence, the defendant instituted a cross claim against Mr Adam Gilchrist, Mr James Gilchrist and Beratame Pty Ltd. It stated that each of Mr Adam Gilchrist and Mr James Gilchrist was a shareholder and director of the plaintiff, and that Beratame Pty Ltd was the corporate vehicle by which they conducted their investment in the defendant. Although the cross claim was pleaded at some length, it is sufficient for present purposes merely to note that it pleaded an indemnity said to arise out of alleged breaches of warranties and representations made in favour of the defendant by each of the cross defendants. The evidence in the court below 10 Mr Bidwell swore two affidavits, one on 23 December 2003 and the other on 5 May 2004. It is not clear that both affidavits were formally read, but the primary judge appears to have read both of them and he referred to both of them in his judgment. I think therefore that it is appropriate to proceed on the basis of the evidence in both affidavits. 11 In his first affidavit, Mr Bidwell deposed to having had a conversation with Mr Jim Gilchrist, who was his neighbour, about whether he would be interested in "…doing some work…" for the defendant. Mr Bidwell subsequently attended the defendant's office, and he stated that he started work on 15 March 1999. He deposed to a conversation with Mr Adam Gilchrist in or around September 1999 about the rate at which he would be paid, that rate being $1000 per day. He said that the written agreement had been entered into on 18 May 2000. He annexed a job description that had been formulated in late 1999, and he described his work as being involved in human resource management, and in a number of large projects. 12 According to Mr Bidwell, he agreed to submit invoices for fees "…when money was available rather than on a monthly basis." In his first affidavit, he described invoices he had rendered and attached copies. The first of those was apparently rendered on 21 December 1999, about 11 months after he had commenced work. He detailed various payments he said had been made, totalling $85,000. On 25 February 2002, he submitted an invoice for the total that he claimed was outstanding and the copy of that invoice attached to his first affidavit shows the balance due as $221,700. 13 Before dealing with Mr Bidwell's second affidavit, it will be convenient to deal with the affidavit read on behalf of the defendant, which was sworn on 19 March 2004 by Mr Peter Noble, who, for the relevant period, was both a director of the defendant and also of Cosmos Limited. Relevantly for present purposes, Mr Noble stated that, in or about September 2000, the board of the defendant considered a proposal for the capitalisation of debts due to consultants "…and the issue of fully paid ordinary shares in the capital of (the defendant) as consideration for such debt forgiveness." He annexed a copy of "explanatory notes", expressed to be written by the managing director, relating that proposal as an agenda item ("the explanatory notes"). The explanatory notes contained the following paragraph concerning the plaintiff: Sue Bidwell & Associates This is a corporate entity used by Mr Barry Bidwell who was appointed to provide Sales and Marketing planning expertise and Human Resources advice. Barry has been instrumental in the development of the Sales and Marketing planning and the design of the material to support that. Human Resources activities include development of Policies and Procedures for staff, and working with the staff in their Goal Setting and Goal Alignment activities. Barry has assisted in the development of training materials and provided Occupational Health and Safety advice. 14 Amongst other things, the explanatory notes stated that negotiations with a prospective investor required that unpaid consulting fees be capitalized prior to the investor taking a placement of shares. The writer set out his understanding that the consultants would agree to convert the majority of the unpaid fees at the same price as the cash placement price. There followed, at the foot of the document, a paragraph commencing "Note for JG" and setting out various names and figures, included amongst which was the name of the plaintiff and the figure of $211,000. 15 Mr Noble stated that, as a result of the board meeting to which I have referred, the debt claimed by the plaintiff was forgiven in consideration of the issue of 282,000 fully paid ordinary shares in the capital of the defendant issued at the direction of the plaintiff to its nominee, Bidwell Nominees Pty Ltd. He annexed a copy of an undated and unsigned transfer of shares, purporting to show the transfer of 282,000 shares in the capital of the defendant from Bidwell Nominees Pty Ltd to Medicine Quantale Limited (that name being the former name of Cosmos Limited) in consideration of "…$23,500 (representing 94,000 fully paid ordinary shares in Medicine Quantale Limited)." 16 In his second affidavit, Mr Bidwell claimed that he had no knowledge of the explanatory notes or of any proposal for the conversion of the plaintiff's debt into shares in the capital of the defendant. He stated that in August and November 1999, The Bidwell Family Superannuation Fund became the registered owner of 282,000 shares in the capital of the defendant. He annexed copies of two shares certificates, one dated 26 August 1999 in relation to 200,000 ordinary shares in the capital of the defendant, the other dated 26 November 1999 in relation to 82,000 ordinary shares, both showing The Bidwell Superannuation Fund as the holder of the shares. The judgment in the court below 17 It is necessary for the purpose of this appeal to concentrate chiefly on the principal judgment delivered in the court below. 18 In that judgment, the primary judge noted that the plaintiff had, by notice of motion, sought leave to apply for summary judgment, and that the defendant had applied for leave to amend its grounds of defence. His Honour said (at p 3): The existing grounds of defence are clearly noncompliant with the rules because they do not set out the matters upon which the defendant proposes to rely, and merely raise the general issue. 19 The primary judge then turned to the amended grounds of defence that the defendant was seeking leave to file. He noted that it contained the general denial raised in the original grounds of defence, but that it further asserted that the alleged agreement, if it came into existence, arose in relation to the provision of consultancy services, and there was an extinguishment of the liability arising under the agreement by operation of an agreement between the parties by way of accord and satisfaction. 20 His Honour examined the evidence, and came to the conclusion that the assertions contained in Mr Noble's affidavit did not reveal a triable issue between the parties and that the evidence neither supported the original grounds of defence nor the amended grounds of defence. In particular, the primary judge noted that the explanatory notes indicated a proposal to convert debt to shares, but there was no evidence that the proposal had ever been accepted by the plaintiff. He noted that the transfer of 282,000 shares from Bidwell Nominees Pty Ltd to Medicine Quantale Ltd did not constitute a receipt by Bidwell Nominees of shares in return for forgiving a debt. He also noted that the share certificates in relation to 282,000 shares in the capital of the defendant held by the Bidwell Family Superannuation Fund were dated respectively in August and November 1999, some 12 months before the proposal outlined in the explanatory notes. 21 The primary judge then turned to the application for summary judgment. He noted that it had been made under Pt 11A r 2 of the District Court Rules 1973. One of the requirements of that rule is to the effect that there must be evidence given by the plaintiff that, in the belief of the plaintiff, the defendant has no defence to the claim. The primary judge noted that there was no express statement in the affidavits of Mr Bidwell of a belief that the defendant had no defence to the claim, but his Honour went on to hold (at p 9) that there was a volume of material in Mr Bidwell's two affidavits "…that establish to my satisfaction that Mr Bidwell in fact believes that the defendant has no defence to the claim." Accordingly his Honour gave summary judgment for the plaintiff, and ordered that the proceedings go to trial only as to the assessment of damages. The grounds of appeal 22 At the hearing of the appeal in this Court, the issues arising on the appeal were substantially narrowed. First, the claimant expressly abandoned its appeal against the order rejecting the claimant's application for leave to file amended grounds of defence. Secondly, the cross defendants did not appear at the hearing in this Court, and, in their absence, the Court declined to consider any issue regarding the primary judge's order of a separate trial for the cross claim. Thirdly, no submissions were made in relation to the stay of the proceedings ordered by the primary judge, or in relation to the order of Rolfe DCJ refusing to extend the stay. 23 Accordingly, the issues on appeal were whether the primary judge had erred in striking out the claimant's defence, whether he had also erred in entering summary judgment in favour of the opponent, and if the claimant is successful in this Court, whether the claimant should be put on terms requiring payment into court of the amount claimed. 24 In relation to the principal issues concerning the strike out of the claimant's defence and the entering of summary judgment, the claimant's case was that the primary judge erred firstly, in relation to whether the defence merely raised the general issue and, secondly, in relation to the application of Pt 11A r 2. I deal with each in turn. The general issue ground 25 The claimant contends that the primary judge erred in holding that the grounds of defence merely raised the general issue and were noncompliant with the rules. It submits that, in circumstances where, at the relevant times, it was neither the majority shareholder in, nor the provider of the controlling management of, the claimant, it was entitled to put the opponent to strict proof of the facts alleged against it. It claims that the denials in the grounds of defence did put the opponent upon strict proof. Therefore, in the claimant's submission, the primary judge erred in ordering that the grounds of defence be struck out on the basis that it merely raised the general issue. 26 In response to this submission, the opponent in effect concedes that the primary judge fell into error in stating that the grounds of defence merely raised the general issue and were noncompliant with the rules, but the opponent claims that error had no relevance or bearing upon the order that the primary judge made. The question was whether a triable issue had been disclosed. In its submission, there was no triable issue, and his Honour did not err in exercising his discretion upon the basis that there was no triable issue. 27 I do not propose to dwell on this ground because I accept that the significant grounds in this appeal are whether or not the proceedings disclosed a triable issue, and whether the discretion conferred on the court below by Pt 11A r 2 was properly exercised. I note only that the grounds of defence were not well pleaded. They simply denied allegations in the statement of claim, whereas, by a statement not strictly part of the pleadings, the claimant endeavoured to show its intention to plead that it did not know and could not admit the allegations pleaded by the opponent. The application of Pt 11A r 2 28 Part 11A r 2 relevantly provides as follows: 2 Summary judgment (1) Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff: (a) there is evidence of the facts on which the claim or part is based,and (b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed, the Court may, at any time, give such judgment for the plaintiff on the claim or part as the nature of the case requires. (2) Without limiting subrule (1), the Court may, under that subrule, give judgment for the plaintiff for damages to be assessed, and where the Court gives such a judgment the action shall go to trial only as to the assessment of damages. (3) … (4) … (5) … 29 Mr Graham QC, appearing for the claimant, submitted that this rule has three requirements. First, there must be evidence of the facts on which the claim is based. Secondly, there must be evidence of the belief that the defendant has no defence to the claim. Thirdly, if those two requirements are established, then the court has a discretion as to whether or not to exercise the power conferred by the rule. In the claimant's submission, the primary judge erred in the application of the rule. It asserts that triable issues were disclosed by the statement of claim and the grounds of defence, and having regard to those triable issues, the primary judge failed to apply the correct principle in dealing with the application to order summary judgment, and that, accordingly, his discretion miscarried. 30 It is convenient, I think, to deal with the claimant's submissions by dealing separately with the question of a triable issue and the exercise of the discretion conferred upon the primary judge by Pt 11A r 2, and then by dealing with the submission that the requirement for evidence of belief was not met in this case. A triable issue? 31 The claimant asserts that the statement of claim and the grounds of defence disclosed a number of triable issues, amongst which were at least the following: 1. Who were the parties to the alleged agreement between the opponent and the claimant? 2. Was there an intention between the parties to create an agreement, and, if so, what were the precise terms and conditions of the alleged agreement? 3. What consultancy services were alleged to have been performed? 4. Was consideration given for the alleged consultancy services to be provided by the opponent to the claimant? 5. Was there past consideration in relation to consultancy services apparently rendered by the opponent to the claimant before the alleged agreement came into existence? 6. Was the consideration offered illusory? 7. Was there conduct on the part of the opponent that entitled it to demand a debt due from the claimant? 8. Was the agreement, if there was one, void for uncertainty? 32 The claimant pointed to a number of matters in the evidence before the primary judge that it claims support a finding that triable issues were disclosed. First, it pointed to the uncertainty of the range of dates disclosed in cl 2 of the particulars set out in the statement of claim that asserted the making of an agreement "…between August and 21 December 1999…" Secondly, it pointed to the assertion, in cl 3(a) of the statement of claim, that consultancy services were to be provided by Mr Bidwell, raising uncertainty as to whether he was a party to the alleged agreement in his own capacity and whether the opponent in fact was the proper plaintiff in the proceedings. This uncertainty is reflected in the first affidavit of Mr Bidwell, where he deposed to his conversation with Mr Jim Gilchrist and to his conversation with Mr Adam Gilchrist, which both appear to have involved him in his personal capacity. Thirdly, it points to the retrospective nature of the alleged written agreement, that is, that it was alleged to have been made on 18 May 2000 in respect of consultancy services alleged to have commenced on 12 March 1999. Fourthly, it points to the variations between the alleged oral agreement and the alleged written agreement – for example, the latter provided for a daily fee "…for a minimum of three days per week…" and it also provided for payment within 21 days of invoice date, neither of these matters having been pleaded as terms of the alleged oral agreement. Fifthly, it points to the uncertainty as to who was to be the recipient of the alleged consultancy services – both the oral and written agreements, as pleaded, suggests the consultancy services were to be provided to the defendant or any other company in the Cosmos group, but cl 6 of the particulars in the statement of claim refers to consultancy services being provided to the defendant. 33 Having regard to these matters, the claimant contends that triable issues were disclosed that required determination on their merits at a final hearing. 34 In response, the opponent submits that the primary judge was correct in finding that no triable issue had been disclosed. That follows, in its submission, from the evidence of Mr Noble. He was a director of the claimant at all relevant times, and in a position to know what matters were considered at any board meeting of the claimant. His affidavit disclosed that one of those matters was the material contained in the explanatory notes. The explanatory notes contained, in the opponent's submission, a clear admission that the sum of $211,000 was due and owing by the claimant to the opponent. They also acknowledged that the claimant was providing services through Mr Bidwell, they disclosed the nature of those services, and they disclosed that the services so provided were being monitored on a daily basis. 35 The opponent submits that, in addition, there was evidence of invoices being submitted from time to time by the opponent to the claimant, and there were e-mails being exchanged between Mr Bidwell and Mr Jim Gilchrist (or persons on the latter's behalf) as to arrangements for the payment of the amounts claimed in the various invoices. 36 Accordingly, so the opponent submits, no triable issue was disclosed. The amount claimed was acknowledged in the evidence as a debt due from the claimant to the opponent arising out of the performance of a contract for the provision of consultancy services for a fee. 37 The basis for the exercise of a court's jurisdiction to order summary judgment is not in doubt. In Dey v Victorian Railways Commissioners (1949) 78 CLR 62, Dixon J said, at p 91 that"…a case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury". In General Steel Industries Inc v Commissioner for Railways (NSW) and Ors (1964) 112 CLR 125 at 129. Barwick CJ stated that the jurisdiction to terminate an action "…is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion." Both those authorities dealt with the exercise of a power of summary dismissal of a plaintiff's claim, but, in Theseus Exploration NL v Foyster (1972) 126 CLR 507, which dealt, amongst other things, with the giving of summary judgment, Barwick CJ at 514 said: Perhaps the summary intervention to prevent the continuance of a plaintiff's action ought to be much rarer than the giving of summary judgment but there is sufficient correspondence in the two situations to make apposite to this case much of what I said in General Steel Industries v Commissioner for Railways (N.S.W.).." 38 Webster and Anor v Lampard (1993) 177 CLR 598 was also a case involving the exercise of a power to give summary judgment. At pp 602-603 in a joint judgment, Mason CJ and Deane and Dawson JJ cited both Dey v Victorian Railways Commissioners and General Steel Industries v Commissioner for Railways for the proposition that the power must be exercised with exceptional caution, and stated that "[n]owhere is that need for exceptional caution more important than in a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact." 39 In my opinion, the requisite standard outlined by those authorities has not been met in this case. I think that it was far from certain that no triable issues were disclosed. I say that for the following reasons. First, the opponent's claim was founded on an alleged agreement and on an allegation that the claimant was in breach of that agreement, entitling the opponent to the amount it claimed. But the claimant has shown that there were a myriad of uncertainties about that agreement. The evidence raised a number of questions about whether there was in fact an agreement, and, if there was, who were the parties to it and what were its terms. In addition, there were questions as to whether there was a breach of the agreement, and, if so, what constituted that breach. It seems to me that all these questions needed to be determined on their merits at a trial. 40 Secondly, I do not think that it is clear that the explanatory notes amounted to an unequivocal admission that a debt in the amount claimed was owed by the claimant to the opponent, so that, as the opponent claims, there is no triable issue between the parties. The explanatory notes were also uncertain. They were an internal document, labelled as a "draft", and there is a conflict in the evidence as to their effect. Mr Noble claimed that they disclosed an arrangement for the issue of shares in satisfaction of debts due to consultants, but Mr Bidwell claimed that he had no knowledge of any such arrangement.. Furthermore, they are expressed to have been written by the managing director but the reference to "Note to JG" casts some doubt upon who wrote them, since "JG" may have referred to Mr Jim Gilchrist, who may himself have been the managing director. Furthermore, they appear to be no more than the writer's opinion as to a particular state of affairs. 41 Having regard to these matters, I consider that the material before the court below was not so clear and definite as to justify summary intervention, and that, accordingly, the primary judge erred in applying the proper test and his discretion miscarried upon this basis. 42 The claimant raised an alternative basis for its contention that the primary judge erred in his approach to determining whether a triable issue had been disclosed. It submits that the primary judge erred in making findings of fact that would ordinarily be adjudicated upon at a final hearing. It asserts that the correct approach is to examine the evidence before the court, not for the purpose of making findings of fact where the evidence conflicts, but to determine whether a triable issue is disclosed. That is the test enunciated by Handley and Cripps JJA in Wickstead v Browne (1992) 30 NSWLR 1 at 9. The claimant submits that his Honour fell into error in failing to apply that test. Instead, in the claimant's submission, his Honour made findings of fact by preferring the evidence of Mr Bidwell over that of Mr Noble, simply upon their affidavits and without the benefit of cross-examination. 43 I do not accept this alternative submission. It is clear, I think, that the primary judge had regard to the material before him simply for the purpose of determining whether a triable issue had been disclosed. In my opinion, he did not go beyond the limits of a proper inquiry in the application before him; rather, he erred in exercising his discretion in favour of the opponent when the case presented on the material before him was far from clear and definite. The evidence of belief 44 The claimant submits that the primary judge erred in concluding that the belief of the opponent, required to be evidenced pursuant to Pt 11A 2r 2(1)(b), could be inferred. It asserts that direct evidence of the belief is required for compliance with the rule. 45 As authority for this proposition, the claimant cited the decision of Blackburn CJ in the ACT Supreme Court in Harry Smith Care Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1979) 29 ACTR 21. In that case, a director of the plaintiff had sworn an affidavit containing the words "…in my opinion the defendant has no defence to this action." His Honour held that this was not in compliance with a rule similar to Pt 11A r 2(1)(b) because it was a statement of opinion rather than belief. His Honour said at p 23: The rule requires a form of words which unequivocally implies an actual belief by the deponent in the truth of every fact required to establish the plaintiff's claim, and in the absence of any fact which could ground a defence in fact or in law. Such a form of words affords a proper basis for cross-examination. A statement of opinion, on the other hand, is neither unequivocal nor, strictly speaking, relevant. 46 However, in my opinion, this case is merely authority for the proposition that evidence of an opinion does not constitute sufficient compliance – it does not supports the proposition that the belief cannot be inferred from the evidence furnished by the plaintiff or other responsible person. 47 Part 11A r 2(1)(b) simply requires that there be evidence given of the belief. I would not hold that the rule precludes inferring the requisite belief from the evidence furnished by the plaintiff or other responsible person. The precise form of the evidence is not the critical point of the rule. What is required is the requisite belief, and in my opinion that can be established by an inference properly drawn from evidence furnished by the plaintiff or other responsible person. 48 For these reasons, I consider that the primary judge did not fall into error in relation to the application of the requirement in Pt 11A r 2 (1)(b). The disposal of the appeal 49 For the reasons that I have set out, I would grant leave to appeal and I would allow the appeal. Two matters, however, arise. 50 The first matter is the submission by the opponent that, if the Court were to uphold the appeal, it should do so on terms, namely, that the claimant should be ordered to pay the amount claimed by the opponent into court. It was submitted that, having regard to the grounds of defence as drafted and the circumstances of the case, the Court must have a real doubt about the genuineness of the defence. In making this submission, Mr Robberds QC, appearing on behalf of the opponent, relied upon the decision of Lord Justice Devlin in Fieldbank Ltd v Stein (1961) 1 WLR 1287 in the English Court of Appeal, where his Lordship, at p 1289, embraced the notion of imposing some condition upon a defendant in circumstances where the court is "…..left with a real doubt about the defendant's good faith…" Mr Robberds also drew attention to an example in the Federal Court in Tomlinson and Anor v Cut Price Deli Pty Ltd and Ors (1992) 112 ALR 122 where Drummond J made orders on the condition that the plaintiff paid money into court or provided security. 51 However, I can see no reason to impose any terms upon the claimant. I am not persuaded that the claimant lacks good faith or that its actions to date have not been genuine. Nor is there any evidence to warrant a finding that it would not be able to meet any order made against it if the opponent was wholly successful at the trial. 52 The second matter is the question of costs. The claimant has abandoned its appeal in relation to the order rejecting leave to file amended grounds of defence, and it should be required to pay the opponent's costs thrown away as a consequence of that abandonment. Otherwise, the claimant has been successful and it should be awarded its costs. 53 The orders I would make are as follows: 1. Leave granted to the opponent to appeal; Notice of Appeal to be filed within seven days; 2. The appeal is allowed; 3. The following orders of Cooper ADCJ are set aside: (a) the order striking out the claimant's grounds of defence; (b) the order giving summary judgment for the opponent; (c) the order setting the proceedings down for the assessment of damages; (d) the orders as to costs on the opponent's notice of motion. 4. Set aside the orders of Rolfe DCJ; 5. Order the opponent to pay the claimant's costs of: (a) the application for leave and the appeal, except in relation to the abandonment of any appeal against the orders rejecting leave to the opponent to file amended grounds of defence; (b) the opponent's notice of motion in the court below. 6. Order the claimant to pay the costs of the opponent thrown away by reason of the abandonment of any appeal against the order rejecting leave to the opponent to file amended grounds of defence. 7. The opponent is to have a certificate under the Suitors Fund Act if so qualified. ********************** 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.