BURNS PHILP TRUSTEE CO LTD v SARET INVESTMENTS PTY LTD

Supreme Court of the Northern Territory of Australia Martin J.
14 April and 5 May 1988

Appeal - Master - Hearing de novo - Supreme Court Rules o. 77 r. 7(b)

Practice and Procedure - Application for summary judgment - Content of affidavit - Facts to be verified on the balance of probabilities - Inferences may be drawn - Supreme Court Rules o. 22

Cases referred to:
Holloway v McFeeters (1956) 94 CLR 470

Cases cited:
Lombard Australia v Mulley 9 ACTR 23

Counsel for Appellant Solicitors for Appellant

Counsel for Respondent Solicitors for Respondent

Mr T Mead
Morris, Fletcher & Cross

Mr S Southwood Ward Keller

mar880020

mar880020

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY OF AUSTRALIA

No. 67 of 1988

BETWEEN:

BURNS PHILP TRUSTEE. COMPANY LIMITED

A?"D:

Plaintiff

SARET INVESTMENTS PTY LTD
Defendant
CORAM:	MARTIN J.

REASONS FOR JUDGMENT
(Delivered 5 May 1988)

This is an appeal from an order made by the Master, dismissing an application by the appellant (plaintiff) for judgment against the respondent (defendant) pursuant to
r.2.	The appeal is brought under 0.77 r.5 to a Judge.

Order 77 r.7 provides that the appeal shall be by re-hearing de novo of the application to the Master and by special leave of the Judge each party may, subject to proper objections to admissibility, rely on affidavit or oral evidence not used or given before the Master, 0. 77 r.7(b). In disposing of this appeal I may determine any issue of law or fact just as the Master might have done on first instance on the evidence before him with such additional evidence, if

any, as may be allowed  by special leave.	The appellant sought to tender a further affidavit in support of its appeal.	It may not have been the most appropriate course, but I decided that I would not deal with the application until I had considered the appeal on the evidence before the Master.

The Writ was issued on 5 February 1988 and by it the plaintiff claims, $15 878.21 plus costs.	On 16 February the respondent entered an appearance.	A Statement of Claim dated 19 February was filed.	Paragraphs 3 and 4 are as follows:

"Pursuant to a registered lease agreement dated the 11th day of June 1985 between the Plaintiff and the Defendant, the Plaintiff agreed to lease to the Defendant certain shop premises situated at Casuarina in the Northern Territory of Australia at an annual rental •Of twenty seven thousand five hundred dollars ($27,500.00) per annum subject to annual adjustment.
The Defendant has made default in the payment of rent and other expenses and costs payable pursuant to the said lease agreement and the amount of fifteen thousand eight hundred and seventy eight dollars and twenty one cents ($15,878.21) is presently due and owing by the Defendant to the Plaintiff in respect of rent, electricity, promotion levy, operating expenses, and airconditioning."

No defence has been filed.

The appellant's summons seeking judgment was issued on 26 February and was supported by an affidavit sworn the same day.	It reads as follows:

"I CASSANDRA DOROTHY BARTLETT of 1 Morice Court
Kahlin in the Northern Territory of Australia, Secretary, MAKF OATH AND SAY as follows:

I am a secretary in the employ of Lend Lease Property Management Pty Ltd, the duly appointed agent and manager of the abovenamed Plaintiff and I am duly authorized to swear this affidavit.

I am responsible for keeping the records of Lend Lease Property Management Pty Ltd and I  am familiar with the accounts rendered by Lend Lease Property Management Pty Ltd to the abovenamed defendant in respect of rent and other outgoings payable in respect of Shop 24, Casuarina Shopping Centre leased by the Defendant pursuant to the lease· agreement referred to in the Plaintiff's Statement of Claim herein, a ccpy of which is annexed  hereto and rr,arked with the letter "A".

Annexed hereto and marked with the letter "B" is a copy of a statement dated 17th February, showing the amount of sixteen thousand three hundred and ninety-eight dollars and fourteen cents ($16,398.14) due and payable in respect of rent, electricity, promotion levy, operating expenses and air-conditioning expenses.
At the time of instructing our solicitors to issue proceedings in this matter, the amount of $519.93 in respect of electricity used during the months of December 1987 and January 1988 was not outstanding, so that the amount claimed was only $15,878.21.
The amount presently outstanding is
$16,398.14.
It is my belief that the Defendant does net have a good defence to this action.

All the facts and circumstances herein deposed to are within my own knowledge save such as

are deposed to from information only and my means of knowledge and sources of information appear on the face of this my Affidavit."

Annexure "A", shows that the appellant was lessor and the defendant lessee of the premises referred to, the rent and other monies payable by the lessee to the lessor.

Annexure "B" is headed "Outstanding Debtor's Invoice" and on the face of it shows various amounts debited to the respondent in respect of the premises the subject of the lease, and falling within the description of the monies claimed under the Statement of Claim.	It shows a total of
$16,398.14, but the discrepancy between that sum and the sum claimed is explained in paragraph 4 of the affidavit.
Paragraph 3 of the affidavit says that the sum of $16,398.14 was due and payable at the time the affidavit was sworn.	It does not expressly state that the lesser sum claimed in the proceedings was due and payable either at the time the Writ was issued or at the time the affidavit was sworn, but I consider that it is a proper inference to be drawn from the combination of paragraphs 3 and 4 that at the time when the appellant gave instructions to its solicitors to issue proceedings the sum of $15,878.21 was then due and payable.

Paragraph 5 of the affidavit asserts that the sum of $16,398.14 is "outstanding" and the copy invoice, Exhibit "B", demonstrates how that amount is calculated.

That invoice also shows how the amount claimed in the Writ was calculated  as at the date it was issued.	By inference the amount referred to in paragraph 5 is the amount shown on the copy invoice, and thus the conclusion may safely be  drawn that nothing had been paid to reduce that sum which included the amount claimed in the Writ.

Order 22 provides that where proceedings have been commenced by writ and the defendant has filed an appearance, as in this case, the plaintiff may at any time apply to the Court for judgment against the defendant on the ground that the defendant has no defence to the claim, or part of the claims included  in the writ of Statement of Claim.	Rule   3 of that Order requires that the summons for judgment shall  be supported by an affidavit "verifying the facts on which the claim	... is based and stating that, in the belief of the deponent, there is no defence" to the claim.	That latter requirement is satisfied by paragraph 6 of the
affidavit.

The respondent has not filed any affidavit to show cause against the application.

The respondent argues that the facts on which the claim is based are not verified  by the affidavit.	No objection was taken to the contents of the affidavit nor the exhibits being admitted into evidence.

In his detailed reasons for his decision the Master referred to the law to be applied as follows:

'"It has been held", says ¼illiams, "that a proper affidavit is a condition precedent to the exercise of the power conferred on courts to grant judgment without trial: Symon &   Co. v Palmer's Stores	· (1903) Ltd [1912) 1 KB 259 at 263-4."

Lord Esher M.R. in Roberts v Plant (1895) 1 QB 597 at page 603 said of rules similar to Order 22:

"(t)he substance of Order XIV is that where, with reference to a claim within Order III, rule 6, the plaintiff can shew to the satisfaction of the judge that he has a clear case against the defendant, which the defendant cannot possibly answer, the judge may give the plaintiff leave to enter judgment forthwith without the expense and delay which would be involved in letting the case go to trial in the ordinary way.	That is a stringent power to give, and therefore the Courts have said that its exercise must be strictly watched, in order to see that the plaintiff has brought himself within the scope of the provisions of the order; but that does not mean that effect will be given to every unsubstantiated technicality that may be set up by way of objection to proceedings under the order.	The meaning is that care must be taken to see that the plaintiff has, in accordance with the terms of the order, made out a cause of action to which the defendant can have no possible defence".
In Carlton and United Breweries Limited v Long (1958) VR 539 Smith J at page 541, speaking of rules similar to the former Victorian rules, said "(v)ery soon after the first introduction of the Order XIV procedure, the rule was laid down, and it has since then been repeatedly affirmed, that every precaution should be taken, and great strictness insisted upon by the court, when dealing with applications for leave to enter final
judgment	"
Later in the same paragraph His Honour said:
"(t)here has, however, been a good deal of variation as between different judges, and

different times and places, in the degree of strictness with which the rule has been applied.	Sometimes strictness seems to have bee:n insisted upon for its own sake, and without regard to the purposes which the rule of strictness is intended to serve.	This, in my view, cannot be justified .•• A proper exercise of the court's discretion requires, I think, a consideration of the purposes that the rule of strictness is intended to serve and also the extent to which strictness is needed in order to serve those purposes."
His Honour referred to one such purpose as being "to ensure that the summary procedure never results in a plaintiff obtaining a judgment against the defendant which he would have been unable to obtain if the action had gone to trial in the ordinary way."

In May v Chidley (1894) 1 QB 451 Wills J at 453 said of the function of the affidavit in support of an application of this kind that it is required "to verify the cause of action ... but the verification
.•• in the affidavit may be made in general terms". Williams (supra) at paragraph 10.47 says:
"The affidavit or affidavits must verify the
facts on which the claim or the part of the claim to which the application relates is based."
At paragraph 10.48, he adds:
"For the purpose of the Rules a fact is verified by affidavit when the deponent swears to the truth of the fact of his own knowledge. The deponent must state that he swears to the facts from personal knowledge, or this must appear by necessary implication."	For this proposition he cites Caddie v Beattie [1908] VLR 17; W. Neall & Son v Wan [1973] VR 458.

That an affidavit in support must be made from personal knowledge is now, of course, qualified by rule 22.03 (3).
As to what must be verified, Williams at paragraph
10.49 notes:
"What must be verified are the facts necessary to establish a good cause of action ...	In a simple case the affidavit may verify the facts

sufficiently if it states generally that
the defendant is justly and truly indebted at the commencement of the proceeding and that the particulars of the claim appear in the indorsement of claim or in the statement of claim, if one has been served.	A general verification by reference to the indorsement or statement of claim is appropriate only if the indorsement or pleading contains sufficient particulars of the ·cause of action. Where a cause of action is based on a document, it is usually necessary to exhibit the document to the affidavit or to set out expressly the relevant parts of it in the affidavit." (underlining mine)

In Suburban Homes Pty Ltd v Ward [1928] VR 539, Lowe J, at page 268-269, dealing with an application for summary judgment in a case which was for a sum of money claimed under a written contract which was not exhibited to the affidavit in support, said:

Probably, in a simple case I would be bound by the case of May v Chidley (supra) to hold that a very general verification in the following form would be sufficient: - "(1) The defendants are justly and truly indebted to the plaintiff in the sum of ... for .......
and were so indebted at the commencement of this action.	The particulars of the said claim appear by indorsement on the writ of summons in this action.	(2) I verify believe that there is no defence to this action.•

His Honour expressed some doubt as to the validity of this course, but ruled on the question of the non-production of the written document, holding that the cause of action was not sufficiently verified.'

In Lombard Australia v Mulley 9 ACTR 23, Blackburn J. at p.25, when dealing with an argument put forward by a plaintiff, that an objection made by the defendant to its application for summary judgment, was a "technical one devoid of merit", said "but this argument

completely misses the point that an application for summary judgment is short circuiting the normal procedure in an action.	Its very nature requires strict and technical compliance with the principle that every element in the plaintiff's cause of action must appear as completely proved in the affidavits supporting the application."

Notwithstanding the strictness with which the power is watched "in order to see that the plaintiff has brought himself within the scope of the provisions" and "that every precaution should be taken" in that regard, "that does not mean that effect will be given to every unsubstantiated technicality that may be set up", nor that strictness should be insisted upon for its own sake.

In a case such as this, where what is challenged is whether or not the evidence is sufficient to verify the facts on which the claim is based, it is necessary to look to the evidence admitted for that purpose and determine whether or not, on the balance of probabilities the facts are verified.

"Inferences from actual facts that are proved are just as much part of the evidence as those facts themselves" per Williams, Webb &  Taylor JJ in Holloway v McFeeters (1956) 94 CLR 470 at p.480, but as Dixon CJ	observed at
p.477 "The inference may be made only as the most probable

deduction from the established facts, but it must at least be a deduction which may be reasonably drawn from them."

The Master asked himself the question "Does the affidavit state, with sufficient certainty the facts that show that the Defendant is justly and truly indebted tc the plaintiff?" and replied "No" and set out the following reasons:

"In my view, the affidavit is a poorly drafted one for the purpose intended to be achieved.	Bartlett, in paragraph 2, speaks only of "accounts rendered" to the defendant, but says nothing of their being due and payable.	At paragraph 3 she refers to annexure "B" which refers to "outstanding debtor's invoices", to the Defendant company and to several "invoices" totalling $16,398-14.		Neither in that paragraph, nor in annexure "B" is there a firm statement that the Defendant was justly and truly indebted for the amount stated.	Bartlett speaks of a sum of $16,398-14 as being "due and payable" but does not state with the necessary degree of certainty by whom it is payable.

I do not suggest that there is any "magic" in the expression "justly and truly indebted" so as to render a failure to use the expression as fatal to an application of this kind.	But what I do say is that, the affidavit must, in its terms, make it clear that there is a liability, and that that liability is the defendant's.

Paragraph 4 of Bartlett's affidavit adds nothing more to achieve this end, and nor does paragraph 5. The need for the affidavit to properly verify the Plaintiff's claim has not been satisfied with the kind of certainty that Order 22 requires.

Whilst the authorities speak of the acceptability of verification of a claim, in general terms, I do not feel that the broad generality of paragraph 6 of Bartlett's affidavit can possibly provide what is missing.•

The Master's approach in taking each paragraph in the affidavit and each of the exhibits and failing to consider the whole of the evidence available and draw proper inferences led him into error.	I have already indicated the inference which I consider can be drawn from the facts disclosed in the evidence and applying the standard of proof required I find that the facts on which the claim is based are verified by the affidavit.

The deponent has stated that in her belief there is no defence to the claim.

No application was made that she attend to be cross-examined and no affidavit was filed in opposition to the application.

The respondent has sought to have the "strictness" test applied for a purpose which it was not intended to serve.

Judgment for the appellant against the respondent for the sum of $15,878.21 plus interest.	The respondent must pay the appellant's costs here and below.