UCPR: withdrawal of admissions not ‘formally’ made

Green v Pearson [2014] QCA 110

Jackson J delivered the leading judgment with whom Fraser and Morrison JJA concurred.

The appeal originated from an interlocutory decision to give leave to withdraw admissions which were not formally made, but rather stemmed from a ‘holding’ defence, which was motivated by a summary judgment application.

Jackson J:

[4] First, the statutory right of appeal to the Court of Appeal from an interlocutory order of a Judge of the Supreme Court engages principles applied in similar contexts in appellate courts in this country, including this Court. A helpful statement appears in Liao v New South Wales,[1] a recent decision of the Court of Appeal of New South Wales, about an appeal from order of the Supreme Court of New South Wales about admissions. Barrett JA said:

“The discretionary nature of the decisions means that appellate intervention is warranted only on grounds identified in House v R [1936] HCA 40; (1936) 55 CLR 499 at 504-5 including that the decision is affected by extraneous or irrelevant matters or the judge mistakes the facts, acts on a wrong principle or does not take into account a material consideration or the decision is unreasonable or plainly unjust. The fact that matters of practice and procedure only are involved means that the appellant court should exercise the ‘added restraint’ that that circumstance attracts (Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170) and ‘be extremely reluctant to interfere’ (In the Will of FB Gilbert (dec) (1946) 46 SR (NSW) 318).”[2]

[5] Secondly, the philosophy of the UCPR is important in considering an appeal from the exercise of a power conferred by those rules. As r 5(1) provides, the purpose of the rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense. And as r 5(2) provides, accordingly the rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of the rules.

[6] That philosophy is also reflected in r 367(1) under which the court may make any order or direction about the conduct of a proceeding it considers appropriate, even though the order or direction may be inconsistent with another provision of the rules. As r 367(2) provides, in deciding to make an order or direction, the interests of justice are paramount. Rule 367(5) then provides that if a court’s order or direction is inconsistent with another provision of the rules, the court’s order or direction prevails to the extent of the inconsistency.

[7] The decision of the primary Judge, made under r 188, to give leave to the respondent to amend the defence, must be viewed against the background of r 5 and r 367, when this Court asks the question whether it should interfere with his Honour’s exercise of discretion.

Verifying affidavit

[45] The appellants rely on cases which support the contention that in many cases a party will need to prove the existence or reasonable likelihood of the existence of evidence to support the denial of the admission which it is seeking leave to withdraw.

[46] In exercising the discretion to give leave to withdraw an admission, there is no a priori rule as to what evidence is required in every case. Nor is there an a priori rule that an affidavit generally verifying a proposed defence will not be enough. Like the primary Judge, in my view it was relevant in the present case that the respondent who swore the affidavit was the principal witness who might be expected to know the relevant facts. It was therefore open to the primary Judge to act upon an affidavit generally verifying the contents of the draft defence dealing with facts within his knowledge. His Honour did so specifically because of the “level of detail with which the proposed amended pleading deals with the plaintiffs’ allegations”.

[47] That view was adopted in the context that after so much time “it would not be expected that the detail would still be retained in his mind” and that it would “be unlikely that he would have much in the way of documents from the time of the alleged events”.

[48] In my view, there was no error of principle or failure to take a material consideration into account by his Honour in taking that approach in the circumstances of this case.

Formally or deliberately made admissions

[49] Before the primary Judge, there was a debate about whether it was reasonable for the respondent to have brought the summary judgment application. The respondent sought to re-enliven the question on the hearing of the appeal. However, the answer to the question is of limited relevance. It goes only to whether the respondent should be given leave to withdraw the admissions which had come about because of the decision to apply for summary judgment rather than to prepare a complying defence. The primary Judge said that he would not “be critical of the decision to seek to have the matter decided on a summary basis”. Although that was a matter relevant to the circumstances in which the deemed admissions came to be made, and therefore relevant to the decision on the application for leave to withdraw them, I would not generally endorse any suggestion that it is an appropriate procedure for a defendant to file and serve a “holding” defence that does not comply with the UCPR.

[50] The appellants relied on statements made in cases where the admissions sought to be withdrawn were made formally and deliberately. For example, an admission made “after consideration and advice… and after a full opportunity to consider its case and whether the admissions should be made”.[11]

[51] The primary Judge considered that the appellants sought to make too much of the cases involving formally and deliberately made admissions and that they were “not apposite”. The respondent’s admissions were neither formal nor deliberate, in the senses described above. On the contrary, the defence attempted not to admit or deny almost all the allegations contained in the statement of claim. Because it did so in a way that did not comply with the requirements of r 166, deemed admissions were made. That was a consequence of the operation of the UCPR, not a formal or deliberate action evidencing an intention by the respondent to make admissions. The reason for the defence following that form was to bring the application for summary judgment, which was done promptly.

[52] In those circumstances, it was open to his Honour to give less weight to the way in which the admissions were made than might be given in a case where the admission was made formally and deliberately. The facts of this case are not the same as in the other cases relied on by the appellants.

[53] There was no error of principle or failure by the primary Judge to take a relevant consideration into account in his Honour’s approach. No error in the exercise of the discretion is disclosed because his Honour did not treat the statements in those cases as determinative of the present case.

Costs

[54] The primary Judge ordered that the costs of the application be made “costs in the cause”.[12] The appellants contend that the primary Judge’s discretion on the question of costs miscarried. The primary Judge took into account that the respondent’s conduct in bringing a summary judgment application without first incurring the costs of preparing a proper defence was “reasonable”. The appellants submit that the primary Judge’s discretion was thereby affected by an irrelevant or extraneous matter, because the UCPR do not permit that form of procedure.

[55] The appellants also challenge that his Honour was entitled to take into account that the appellants had not alerted the respondent to their criticisms of the proposed amended defence before the hearing of the application.

[56] In my view, the primary Judge’s exercise of discretion in making the order for costs should not be disturbed.

Brisbane Barrister – David Cormack

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