SUPREME COURT OF QUEENSLAND CITATION: Hayes v Westpac Banking Corporation & Anor [2015] QCA 260 PARTIES: THOMAS PATRICK HAYES (appellant) v WESTPAC BANKING CORPORATION ABN 33 007 457 141 (first respondent) BALMAIN NB COMMERCIAL MORTGAGES LIMITED TRADING AS BALMAIN COMMERCIAL BN 98174824 (NSW) (A Firm) ACN 074 619 980 (second respondent) FILE NO/S: Appeal No 2869 of 2015 SC No 7887 of 2009 DIVISION: PROCEEDING: Court of Appeal General Civil Appeal ORIGINATING COURT: Supreme Court at Brisbane Unreported, 24 February 2015 DELIVERED ON: 4 December 2015 DELIVERED AT: Brisbane HEARING DATE: 19 August 2015 JUDGES: ORDERS: CATCHWORDS: Chief Justice, Philippides JA and Mullins J Separate reasons for judgment of each member of the Court, each concurring as to the orders made 1. Appeal dismissed. 2. The appellant must pay the costs of each of the first and second respondents of the appeal. PROCEDURE JUDGMENTS AND ORDERS AMENDING, VARYING AND SETTING ASIDE GENERAL RULES where appellant was sued on a guarantee by the first respondent where appellant counterclaimed against the first and second respondents where trial was delayed by illness and absence of the appellant where trial judge refused appellant s application for a further adjournment where trial judge then gave judgment in favour of first and second respondents where order giving effect to the judgment had been filed where appellant applied for an order setting aside the judgments against him pursuant to r 667(1) of the Uniform Civil Procedure Rules 1999 (Qld) after the order had been filed where primary judge dismissed the application to set aside
COUNSEL: SOLICITORS: 2 the order where appellant appeals on the ground the primary judge should have followed the decision in McIntosh v Linke Nominees Pty Ltd [2010] 1 Qd R 152 whether the decision in McIntosh should be followed Acts Interpretation Act 1954 (Qld), s 14, s 38 Uniform Civil Procedure Rules 1999 (Qld), r 7, r 661, r 667 FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268; [1988] HCA 13, considered McIntosh v Linke Nominees Pty Ltd [2010] 1 Qd R 152; [2008] QCA 410, not followed WMJ Attractions Pty Ltd v Ireland [2008] QSC 167, considered P A Kronberg for the appellant E J Goodwin for the first respondent S S Monks for the second respondent The appellant appeared on his own behalf Allens for the first respondent Minter Ellison for the second respondent [1] HOLMES CJ: I agree with the reasons of Mullins J and the orders she proposes. [2] PHILIPPIDES JA: I agree with the orders proposed by Mullins J for the reasons stated by her Honour. [3] MULLINS J: Westpac Banking Corporation sued Mr Hayes on a guarantee which he had given in favour of Westpac in respect of the indebtedness of Funk Road Developments Pty Ltd under a loan made to it by Westpac. Mr Hayes counterclaimed against Westpac based on allegations of misleading conduct by silence and also counterclaimed against his finance broker Balmain NB Commercial Mortgages Limited trading as Balmain Commercial. Mr Hayes was appearing for himself in defending Westpac s claim and prosecuting the counterclaim with the assistance of a non-lawyer Mr Freeman. [4] On 3 November 2014 Mr Hayes did not attend court, but Mr Freeman on his behalf applied for an adjournment. After evidence, the adjournment was refused. Peter Lyons J then gave judgment for Westpac in respect of Mr Hayes counterclaim against Westpac and for Balmain Commercial on Mr Hayes counterclaim against it. Judgment was also given for Westpac on its claim against Mr Hayes in an amount of $10,762,958.98. The order giving effect to the judgment of Peter Lyons J was filed on 20 November 2014. [5] By application filed on 4 February 2015, Mr Hayes sought an order pursuant to either r 667(1)(b) or r 667(2)(a) of the Uniform Civil Procedure Rules 1999 (Qld) to set aside the judgment against him given in favour of Westpac and Balmain Commercial. That application was dismissed by the learned primary judge on 24 February 2015 and Mr Hayes was ordered to pay the costs of both Westpac and Balmain Commercial. Mr Hayes appeals against these orders. The first ground of appeal is the primary judge erred in law in not following the ratio decidendi of the decision of the Court of Appeal in McIntosh v Linke Nominees Pty Ltd [2010] 1 Qd R 152 in
3 respect of extending time pursuant to r 7 of the UCPR. Other grounds of appeal concern the decision to refuse the application on discretionary grounds, including the primary judge erred in not accepting Mr Hayes reasons for not attending at the trial on 3 November 2014 and failure of the primary judge to give sufficient weight to Mr Hayes expressed intention to engage a barrister for the continuation of the trial. Both Westpac and Balmain Commercial have filed notices of contention seeking to contend that the decision should be affirmed on the basis that the decision in McIntosh is wrong and should not be followed. The decision of Peter Lyons J [6] In order to put the dismissal of the r 667 application in context, it is necessary to refer to the circumstances that resulted in Peter Lyons J s decisions. [7] The proceeding had commenced on 23 July 2009. On 31 July 2012 the trial had been set down to commence on 3 December 2012. That was adjourned on 15 November 2012. The matter was then set down for trial on 2 December 2013 and commenced on that day. On 13 December 2013 the trial was adjourned to 14 April 2014, but did not resume until 8 May 2014. On 22 May 2014 the trial was adjourned to 20 October 2014 for a hearing of three weeks. The trial did not resume until 29 October 2014, as Mr Hayes had undergone eye surgery on 20 October 2014. There had been 24 whole or partial sitting days by 3 November 2014. [8] When the trial was adjourned on 31 October 2014, Peter Lyons J directed that if Mr Hayes wished to apply for any further adjournment of the hearing, he had to provide details by email sent by 5 pm on 1 November 2014 of the adjournment he was seeking and the grounds upon which he sought the adjournment. He was also directed to serve on the other parties written medical evidence that he relied on in support of any application for a further adjournment and that any medical practitioner be available for cross-examination at a time to be arranged by Mr Hayes, but no later than 12.30 pm on 3 November 2014. A direction was also made that Mr Hayes be at liberty to appear in person or by telephone on 3 November 2014. The solicitors for Westpac were directed on how to communicate the substance of those directions to Mr Hayes. On 31 October 2014 Westpac s solicitors emailed Mr Hayes a draft order that set out the directions made by Peter Lyons J on that date. [9] At the commencement of the hearing on 3 November 2014, two emails from Mr Hayes to Peter Lyons J s associate were marked as exhibits. The first sent on 1 November 2014 at 4.56 am advised the associate and the solicitors for the other parties that Mr Hayes was very ill again, may need to return to hospital if his fever did not go down, and that he had been unable to prepare for his opening address or to prepare questions for Mr Dooney and Mr Dallimore. He requested the trial be delayed until Wednesday (5 November 2014) to enable him to recover his health. The second email sent at 5.16 pm on 2 November 2014 advised that he had attended the hospital the previous night, as his fever had worsened, he was on a course of antibiotics and drops since the Birkdale Clinic had prescribed them last Thursday, and he proposed to attend the Birkdale Clinic when it opened on Monday morning at 8 am. When the trial commenced on 3 November 2014, Mr Freeman was given leave to appear for Mr Hayes and applied for an adjournment of the trial until 5 November 2014. The adjournment was opposed by Westpac. [10] At 10.47 am on 3 November 2014 Mr Hayes sent another email to Peter Lyons J s associate and the solicitors for the other parties in which he stated:
4 am now booked in to Hearts 1 st for 3.15 wednesday and 3.15 thursday for further echo tests and monitor tests doctor sanggaran says bacterial infection of eye is clearing up with antibiotics but that i should rest until wednesday and thursday s tests are completed doctor sanggaran wants me to stop driving until tests are completed. [11] Dr Sanggaran provided a medical certificate dated 3 November 2014 that stated he had examined Mr Hayes on 3 November 2014 and that he was suffering from a medical condition and will be unfit to attend court up to and including 05/11/14. Dr Sanggaran gave evidence by telephone in the matter before Peter Lyons J commencing about 11.20 am. [12] Dr Sanggaran stated that he had seen Mr Hayes twice and the initial problem related to an infection in his right upper eyelid after a surgical procedure which would have made it difficult for him to attend court, but that appeared to have largely cleared up with a course of antibiotics when Dr Sanggaran saw him on 3 November 2014. Mr Hayes other medical issues needed further investigations, before Dr Sanggaran could express an opinion. He had recommended an echocardiogram and a 24 hour halter monitor. Dr Sanggaran had performed an ECG that showed a normal looking heart trace with abnormal erratic beats. Dr Sanggaran could not comment on Mr Hayes ability to read, but did say that Mr Hayes was capable of sitting and engaging in a conversation when he saw him earlier that day. [13] The application for the adjournment was refused, as Peter Lyons J concluded the medical evidence provided by Mr Hayes did not demonstrate an adjournment was required. After hearing further submissions from counsel for Westpac and Balmain Commercial seeking judgment on the counterclaim and giving Mr Freeman an opportunity to make submissions, Peter Lyons J gave reasons for giving judgment against Mr Hayes. Mr Hayes did not appeal against any of the orders made by Peter Lyons J on 3 November 2014. The relevant rules [14] Rule 7 of the UCPR provides: 7 Extending and shortening time (1) The court may, at any time, extend a time set under these rules or by order. (2) If a time set under these rules or by order, including a time for service, has not ended, the court may shorten the time. Note A time allowed or provided for under these rules is calculated according to the Acts Interpretation Act 1954, section 38 (Reckoning of time). [15] Rule 667 of the UCPR provides: 667 Setting aside (1) The court may vary or set aside an order before the earlier of the following
(a) (b) 5 the filing of the order; the end of 7 days after the making of the order. (2) The court may set aside an order at any time if (a) (b) (c) (d) (e) (f) the order was made in the absence of a party; or the order was obtained by fraud; or the order is for an injunction or the appointment of a receiver; or the order does not reflect the court's intention at the time the order was made; or the party who has the benefit of the order consents; or for a judgment for specific performance, the court considers it appropriate for reasons that have arisen since the order was made. (3) This rule does not apply to a default judgment. The application before the primary judge [16] For the purpose of the application, Mr Hayes filed an affidavit on 4 February 2015 that expanded on his medical issues that culminated in his attendance on Dr Sangarran on 3 November 2014. [17] Mr Hayes acknowledged receiving the email dated 31 October 2014 providing a copy of the orders made by Peter Lyons J, but stated that due to the problems with both eyes, he was unable to read the orders. Mr Hayes described having almost nil sight on 3 November 2014, because his left eye was still sore, gumming up and weeping, and his right eye was swollen shut. He informed Mr Freeman of his problems who informed him that he had to obtain a medical certificate by 8.30 am, but did not inform him of the other terms of the orders made on 31 October 2014. Mr Hayes stated that Dr Sangarran told him that he thought he was having a heart attack. Mr Hayes returned home and went to bed to rest. He stated: 16. On previous occasions during the course of the trial, when I was ill and had sought an adjournment, usually through Mr Freeman, if the adjournment was refused I was contacted by the Judge s Associate, or Court orderly, to be available to attend at the trial by telephone. This had occurred on about five occasions. 17. On 3 November 2014 I thought the same situation would pertain. If my request for an adjournment of the trial was not successful I was able to attend by telephone, though I would have had difficulty reading any documents in the course of the day s proceedings. Unfortunately I had not communicated this intention to Mr Freeman. On Monday morning, the 3 rd November, 2014 I had been given a certificate by the doctor, not to attend at Court for at least three days. I was also given a letter of referral to Hearts First. Exhibited and marked TPH 2 is a bundle of a true copy of the certificate and the letter of referral.
6 18. On the morning of 3 November 2014 I thought that an adjournment would be granted, and thus I had not communicated to Mr Freeman what would happen if the adjournment was refused. [18] Mr Hayes also relied on a further affidavit which he swore on 24 February 2015 which exhibited a written report from Dr Sanggaran dated 5 February 2015. Dr Sanggaran had not assessed Mr Hayes ability to read with his infected right eye on 30 October 2014, but noted it was reasonable that he would be able to read only with the nonaffected eye. He confirmed that following the consultation on 3 November 2014, Mr Hayes was referred for investigations concerning his heart, because Mr Hayes had described a series of uninvestigated and unexplained blackouts. Dr Sanggaran explained that as a result of that consultation he wrote out the medical certificate to excuse Mr Hayes from attending court until 5 November 2014, because Mr Hayes had many investigations to attend, the cause of his blackouts had not been established, he was advised not to drive until the cause was established, and his eye would have made it more difficult attending to court matters. (Dr Sanggaran did not confirm the evidence given by Mr Hayes to the effect that Mr Hayes had almost nil sight on 3 November 2014 or that Mr Hayes was told by Dr Sanggaran on that day that he thought Mr Hayes was having a heart attack.) [19] Mr Kronberg of counsel who appeared for Mr Hayes on the application conceded that, in the circumstances that pertained on 3 November 2014, Peter Lyons J s decisions were correct and appeals would not be successful. [20] The application to the extent that it was made under r 667(2)(a) of the UCPR was rejected on the basis that, as Mr Freeman had been given leave to appear on behalf of Mr Hayes at the trial, it could not be said the judgment on 3 November 2014 was given in the absence of Mr Hayes. [21] With respect to Mr Hayes reliance on r 667(1)(b) of the UCPR, it was noted that the judgment was formally taken out more than seven days after it was pronounced on 3 November 2014, but before the application to set aside the judgment. [22] The primary judge further noted that even accepting that McIntosh permitted the enlargement of time in r 667(1)(b), to do so in this case would still leave the earlier event as the formal taking out of the judgment, so that r 667(1)(b) would not apply, and stated: It seems that factually, this circumstance was available for argument in McIntosh, although it does not seem that it was raised by the parties. I do not regard McIntosh, therefore, as deciding this point. Certainly, it is not one which the Court of Appeal judgments in that case deal with. [23] If that approach were wrong, either as to the construction of the rule and the facts as to the absence of a party, or the application of r 7 to r 667(1)(b), the primary judge went on to consider the merits of the application and concluded that the judgments should not be set aside on discretionary grounds. [24] It was noted there was a long history of delay and applications for adjournments on the part of Mr Hayes leading up to 3 November 2014. An express finding was made in these terms:
7 I do not believe that Mr Hayes could not see as at the 3 rd of November 2014, or could not see well enough to read, or that he had any advice from Dr Sanggaran that he might be suffering a heart attack or any such dramatic event. [25] It was also noted there was no adequate explanation for the delay which had occurred after judgment was given against Mr Hayes; and he did have a chance to ventilate his defence before Peter Lyons J, but chose not to take it, either by instructing Mr Freeman to run it or by appearing by telephone or in person to run it himself. It was conceded by counsel for Mr Hayes that Mr Hayes would need to amend his pleadings, if judgment were set aside, so he could raise matters in his defence and counterclaim and reply and answer on the counterclaim which had not been pleaded, but which went to his own knowledge and state of mind, but it was noted that he had chosen not to plead these matters previously. The defence on its face did not look strong, when the merits were considered. Rule 667 was being used either in lieu of an appeal against the decision to refuse an adjournment or an appeal against the judgment given by Peter Lyons J or to circumvent difficulties which Mr Hayes would encounter in appealing either or both of those decisions. Rule 667 should not be used to circumvent the normal appeal process. What did McIntosh decide? [26] McIntosh concerned orders made in an appeal on 12 September 2008 that the appeals be allowed, orders made in the first instance be set aside, and the respondents pay the appellant s costs of the proceedings, including the costs of the appeal. A legal representative of the respondents was present when the orders were made, but did not request that the respondents be permitted to make submissions on costs. On the next business day of 15 September 2008, the respondents solicitors wrote to the appellant s solicitors, advising of the respondents intention to apply for a variation of the costs order. That order was taken out and filed by the appellant on 15 September 2008. On 19 September 2008 the respondents applied to vary the costs order by filing an outline of submissions. That application was opposed by the appellant on the basis that the court had no power under r 7(1) of the UCPR to extend time, as the general power to extend time given by that rule was excluded by the specific provisions of r 667 of the UCPR. [27] The focus of the application of r 7 in McIntosh was on the time period under r 667(1)(b). Muir JA (with whom the other members of the court agreed) noted at [8]: It may be accepted that the time limit imposed in r 667(1) reflects public policy which favours certainty and finality in litigation. Accordingly, where power exists to extend the seven day period prescribed by r 667(1)(b), the power could be expected to be exercised with due caution. There is, however, no good reason to conclude that r 7(1) does not permit a court to extend the seven day period. Rule 7(1) provides: The court may, at any time, extend a time set under these rules or by order. The power is unqualified and is obviously intended to be availed of where there has been a failure to comply with or observe a requirement of the rules or an order. Rule 667(2) lists a number of circumstances in which the Court would have power to set aside an order, or in which it could be expected to set aside an order if it had power to do so. It is confined to the setting aside of an order, whereas sub-rule (1) also accommodates the varying of an order.
[28] Muir JA at [9] emphasised the remedial nature of r 7(1): 8 Rule 7(1) is a remedial provision in aid of the purpose expressed in r 5 of facilitating the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense. The rule confers on a court a broad power to relieve against injustice. In my view, r 667(2), by listing a number of circumstances in which no time limit applies, does not impinge on the extent of the power conferred by r 7(1), although it may be relevant to the exercise of that power. (footnote omitted) [29] It was held at [10] that the failure of the legal representative of the respondents to raise the question of costs when judgment was handed down was not a disqualifying factor. Muir JA then proceeded to consider the submissions made by the parties on the appropriate order to be made on the appeal in respect of costs. Muir JA concluded at [15] that the appropriate order was the respondents pay one-half of the appellant s costs at first instance, including reserved costs, if any, and the whole of the appellant s costs of the appeal. Muir JA therefore relied on r 7(1) of the UCPR to extend the time under r 667(1), so that the court could vary the costs order that was made on 12 September 2008. [30] As observed by the primary judge, it does not appear to have been argued in McIntosh that r 667(1) refers expressly to a time limit determined by reference to two events, being before the earlier of the filing of the order [and] the end of 7 days after the making of the order. It is implicit by the order that was made in McIntosh, however, that the court not only extended the period of seven days referred to in r 667(1)(b), but modified (without express explanation) the effect of the filed order being the earlier of the two events referred to in r 667(1). Should McIntosh be followed? [31] There is little point in traversing Mr Hayes argument that the primary judge erred in not following McIntosh in accordance with the doctrine of stare decisis, if the decision in McIntosh can be shown to be wrong, as raised by the notices of contention. [32] The only difference between the facts in McIntosh and the facts of Mr Hayes application under r 667(1) was that the relevant order in McIntosh was filed within seven days of the making of the order, whereas Westpac filed the order some 17 days after the making of the order. In both cases the application under r 667(1) was made subsequent to the filing of the relevant order. Prima facie, McIntosh applied to Mr Hayes application under r 667(1) to permit reliance on r 7(1) to extend the time for filing the application. [33] Rule 7 has been amended since the decision in McIntosh by removing the footnote (which was not part of the rule) that referred to calculating time allowed or provided for under the UCPR according to s 38 of the Acts Interpretation Act 1954 (Qld) and inserting a note at the end of the rule that is to the same effect. The changing of a footnote to a note to r 7 had the effect of making the note a part of the UCPR: s 14(4) Acts Interpretation Act 1954 (Qld). Rule 7 is specifically directed at extending (and shortening) a time that is set under the UCPR or by order and that is emphasised by recourse to s 38 of the Acts Interpretation Act 1954 (Qld) that regulates the calculation of periods of time. Rule 7 is an important remedial provision as recognised in McIntosh at [9], applying FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988)
9 165 CLR 268, 283, for the purpose of relieving against injustice by extending (or shortening) a period of time set under the UCPR or by order. [34] The filing of an order is a step required to facilitate enforcement of the order or an appeal against the order: r 661(4) UCPR. Rule 667(1) confers on the court the power to vary or set aside an order before the earlier of the two events that are then specified: the filing of the order and the end of seven days after the making of the order. The time at which the application is made under r 667(1) therefore determines whether the court has power to vary or set aside an order. This can be contrasted with r 667(2) which sets out in each paragraph a discrete circumstance (such as the order was obtained by fraud) in which the power to set aside an order at any time may be exercised by the court. [35] The timing required of the application made under r 667(1) as before the earlier of the two events specified in paragraphs (a) and (b) is not itself a time period as contemplated by r 7. If the specified event in r 667(1)(a) occurs first in time, then the timing of any application under r 667(1) is determined by reference to whether it occurred before the filing of the order. It is the specified event in r 667(1)(b) which is calculated by reference to a time period. The specification of seven days in r 667(1)(b) is a period of time that is amenable to the application of r 7, provided the relevant order has not been filed. If the order has been filed, there is no longer any room for the operation of r 667(1)(b), as extending the period of seven days in r 667(1)(b) could never change the fact that the filing of the order would continue to be earlier than any extended date under r 667(1)(b). Rule 7 does not empower the court to deem an event that has occurred (such as the filing of the relevant order) as not having occurred for the purpose of considering the application under r 667(1). [36] Such an approach to the construction of r 667(1) was applied by Daubney J in WMJ Attractions Pty Ltd v Ireland [2008] QSC 167 (which decision was given before McIntosh) where no order embodying the judgment that was sought to be varied had been filed before the application to vary the order was made under r 667(1), and the time period of seven days referred to in r 667(1)(b) was extended. [37] To the extent that McIntosh appeared to be authority for applying r 7 to extend the time period for making the application to vary or set aside an order, after the order was filed, McIntosh had the effect of deeming that the filing of the order had not occurred and is therefore wrong and should not be followed. On the proper construction of r 667(1), an application cannot be made to set aside or vary an order after the order has been filed. [38] There is still room for the operation of r 667(1) in a case where the application to vary or set aside the order is made before the relevant order has been filed or where any application to extend the period of seven days under r 667(1)(b) is made before the relevant order has been filed. [39] On the proper construction of r 7 and r 667(1), Mr Hayes was too late in applying to set aside the judgments given against him on 3 November 2014. [40] It should be noted that although the primary judge did not regard McIntosh as addressing or deciding the point of permitting the enlargement of time under r 667(1)(b) where the order had already been filed, the primary judge was careful to proceed in any case to deal with the application on the merits.
10 [41] In view of the conclusion that McIntosh should not be followed where the relevant order was filed before the application to set aside or vary the order was made, there is no point in considering the arguments advanced on behalf of Mr Hayes on the other grounds directed at the merits of the application to set aside the orders. The decision of the primary judge should be affirmed on the ground relied on in the notices of contention. Orders [42] The orders which should be made are: 1. Appeal dismissed. 2. The appellant must pay the costs of each of the first and second respondents of the appeal.