Adams v Wendt

[1994] HCATrans 248

..

.

• r

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No Ml20 of 1993

B e t w e e n -

HALINA ADAMS

Applicant

and

GUNTER WENDT

First Respondent

and

HUSEYIN TOPCU

Second Respondent

Application for special leave

to appeal

MASON CJ

TOOHEY J

Adams 1 11/3/94

MCHUGH J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 11 MARCH 1994, AT 11.07 AM

Copyright in the High Court of Australia

MR D. GRACE:  If the Court pleases, I appear on behalf of the applicant. (instructed by Grace Partners)

MR J.R. BIRRELL: If the Court pleases, I appear on behalf

of the first respondent. (instructed by Fraser

Campbell & Co)

MR R.S. LANCY:	If the Court pleases, I appear on behalf of the second respondent.	(instructed by Robert M.
Phelan & Co)

MASON CJ:  Mr Grace.

MR GRACE: If the Court pleases. It is submitted,

Your Honours, that the Full Court erred in this

matter in law in refusing to grant the extension of
time within which the applicant could lodge and

serve her notice of appeal.

There are five principal reasons why the Full

Court should have held differently in a due and

fair administration of justice. Firstly, the court

accepted that - - -

MASON CJ: Are you .saying there are five.errors of law?

MR GRACE:  I am saying there are five reasons why the court

ought to have held differently.

MASON CJ: What is the error of law?

MR GRACE:  The error of law is failing to properly apply the

principles that apply to the exercise of discretion

in granting extension of time within which to serve

a notice of appeal.

MASON CJ: 

And what is the error of law constituted by that

failure to exercise the discretion in accordance
with principle? Can you identify it?

MR GRACE:  The finding that there were no meritorious or substantial grounds of appeal.

McHUGH J: That is a question of fact.

MR GRACE:  Which, it is submitted, in the circumstances of

this case, Your Honour, is a matter that goes to an

error of principle and an error of law in this
application in this case.

The second aspect is the failure to find that in the circumstances of this case the explanation

given for the delay was, by itself, sufficient to

have militated in favour of the granting of the

discretion in favour of the applicant.

Adams 11/3/94

MASON CJ: But if the court came to the conclusion that the

appeal was bound to fail, surely they could have

regard to that.

MR GRACE: Certainly, Your Honour. However, it is submitted

that the court wrongly came to the conclusion that

there were no arguable grounds of appeal and it is

clear, on the materials, that the court did no more

than apply almost a cursory analysis of the grounds

of appeal that had been purported to be served.

MASON CJ: But a cursory analysis may yield the right

answer.

MR GRACE:  It is submitted that in this case a cursory

analysis would not give the right answer, and that

there are at least two arguable grounds of appeal

which the court ought to have so found. The first

related to the issue of the magistrate imposing as

a condition for the grant of the adjournment a

requirement that the applicant make security for

costs. That requirement was not within power or

within the jurisdiction of the - - -

McHUGH J:	Has she power to grant an adjournment?
MR GRACE:	She has power to grant an adjournment.

McHUGH J: If she has power to grant an adjournment, she has

power to grant an adjournment on conditions, has

she not?

MR GRACE:  The application in this case for the security for

costs was made by counsel for the respondents on

the basis and on the strict and sole basis that

security for costs be provided. It was not made

simply as a condition for the granting of an

adjournment. There was specific reference to the

applicable rules of the Magistrates' Court Act and

those rules are specific in the categories of

persons to whom security for costs orders can be
ordered against.	Your Honours would have a copy of

those rules available and I seek to just briefly

refer to them. Order 31.02 of the Magistrates'

Court Rules provides certain categories of persons

to whom orders for security for costs may be

ordered and it is clear that the applicant is not

one of those persons referred to in any of those

categories.

So, therefore, it is submitted that the

magistrate in imposing that condition erred in law.

That error of law was the subject of three grounds

of appeal to the Full Court; was the subject of a
grant of an order nisi by Master Williams in the
supreme court; was not adequately considered at all

by His Honour Mr Justice Fullagar at first instance

Adams 11/3/94

in the supreme court; and was properly and arguably

a strong ground of appeal before the Full Court.

McHUGH J: It appears from the judgment of

Mr Justice Fullagar at page 121 that:

Counsel for each respondent opposed the application, reminding the Court - as was the

fact - that the appellant had told the Court

she had "no money to pay any costs". They

indicated that some security for costs should be given if there was to be an adjournment to

a date to be fixed.

Well, why cannot a court impose as a condition of

the adjournment that a party gives security for

costs?

MR GRACE:  Because the terms of Order 31 and the terms of

the application to the learned magistrate in this

case were predicated on the basis that the

application was made pursuant to Order 31 and not

pursuant to the other applicable rule in the - - -

McHUGH J:  You say that. Where is the evidence of that?

MR GRACE: That is found on pages 26.10, 26.11 and 26.13 of

the application book. At 26.10 there are

transcribed the notes of the learned magistrate,

Mrs Maughan, and in the second-half of that page at

line 24 there is this comment, and this is relating

to an application by Mr McGarvie, who was then

counsel for the second respondent:

if adj. = brief a -

and I cannot understand what the next word is -

& only on terms Plf pay into Ct. subst. amt

costs.

Now, one is not talking about a payment to a
respondent of the costs of an adjournment.	One is

talking about the payment into court as security

for costs. So, it is clearly that the application

was predicated on the basis of Order 31 and not on

any other order or rule of the Magistrates' Court

Act.

McHUGH J:  It is not apparent to me that that is the case.

I do not see any reason at all why a magistrate, in a case like this over $500 - that is what it

started over - an application by two tradesmen that

has been through the Supreme Court of Victoria and

is now brought up here, and it really borders on

disgraceful that this litigation is up here with

such an amount of money involved. It really does.

Adams	4	11/3/94
MR GRACE:	Yes.	In fact, the security for costs application

was made in relation to the cross-summons brought

by the applicant for the amount of $15,700.

McHUGH J: It is the whole proceedings. Five days were set

aside for this matter and then your client wants an

adjournment.

MR GRACE:  Yes. Additionally, if I could just briefly refer

to pages 26.11 and 26.13, there are further

references on those pages. At 26.11, at page 50,

in the top-half of the page, where the magistrate

makes the order not to allow the adjournment

because there was a refusal to give any security

for costs. So, at that stage the magistrate had

reached the decision that in the interests of

justice an adjournment was appropriate but because

there was no security for costs tendered or agreed

to be tendered there would be no adjournment.

McHUGH J:  That does not follow at all. The magistrate made

a decision that the interests of justice would

permit an adjournment if security for costs were

provided and the respondents were protected.

MASON CJ:	And in circumstances where it was apparent that there was a strong probability that your client
would not meet an order for costs.
McHUGH J:	And I might remind you that what your client said

on that occasion does not fit too well with the

fact that she now claims to have assets of over

$1 million with a mortgage of $200,000 on it.

MR GRACE:  Yes. I think that statement of wealth or worth

was made at some stage to the magistrate and she

clearly indicated that she was a person of means

and was able to meet any order for costs.

McHUGH J:  She told the court she had no means to pay any

costs.

MR GRACE:  She had no cash or liquid funds available at that

time to pay the costs. That was her claim.

MASON CJ: But does it not appear from page 60 of the

application book that, in fact, the order for costs

arose out of a submission by Mr McGarvie that he

would be prepared to concede to an adjournment on

condition that an order for security for costs be

made?

MR GRACE:  Yes. He refers further to:

"security costs of thousands of dollars

payable immediately" .

Adams 11/3/94

MASON CJ: Maybe, but what I am saying to you is that the

genesis of the order for security for costs was its

linkage with the adjournment.

MR GRACE:	Yes.
MASON CJ:	The adjournment being conditioned, in a sense, on

the order for security.

MR GRACE:  Yes, but what is submitted is that that order for

security, conditioned in the way it was, was an

error of law on the part of the magistrate because

Order 31 of the Magistrates' Court Rules covers the

field in respect of orders for security for costs.

One is only talking about the cross-summons here, not the original claim in which she was the

defendant. I am talking about the cross-summons in

which she was plaintiff. She does not fall into

any of the categories covered by Order 31.

MASON CJ: Yes, I follow all that.

MR GRACE:  The delay in serving the notice of appeal in this

case was negligible. It resulted from an

apprehension and a belief on the part of the

solicitor and.then .. counsel on the part of the
applicant that the time for service of the notice

of appeal expired on the Monday when, in fact, it

had expired on the Friday. So, one is talking

about one working day.

MASON CJ: Yes, we realize that.

MR GRACE:	In those circumstances, it is submitted that the negligence or inadvertence of the solicitor and
counsel of the applicant should not be visited upon
the applicant so as to deprive her of her right of appeal.

TOOHEY J: But the Court of Appeal put that to one side, did

they not? They were quite prepared to excuse that

for the purposes of coming to grips with the main

issue.

MR GRACE:  Yes, they accepted that there was a reasonable or

a proper explanation for the delay and, in the

circumstances of this case, it is said that that

ought to have been sufficient to have granted the

extension.

Now, the second basis why it is said that the

applicant had an arguable ground of appeal was that
there was, it is submitted, a breach of natural

justice to her in refusing her adjournment

application. She did not seek any previous

adjournments of this case. She had not been

responsible for the inordinate delays which have

Adams 6 11/3/94

been attributed to her at page 186 of the

application book, and that is in the judgment of

His Honour Mr Justice Ormiston, and that particular

finding of fact on His Honour's part was clearly in

error. All of these inordinate delays that

His Honour is referring to refer to the period

prior to the adjournment application which was

first made on 20 May 1991.

It is submitted that the applicant, as a

result, suffered injustice by reason of that

finding. It is submitted that she was not given,

by the magistrate, a reasonable opportunity to

obtain counsel to present her case. Her

counter-claim was described by His Honour

Mr Justice Ormiston, at line 10 on page 186, as

being "for slightly more" than the original claim

by the respondents when, in fact, it was for

$15,700. It was an unfair situation, it is

submitted, in the whole combination of
circumstances which resulted in her being deprived

of the opportunity to present her case by counsel.

TOOHEY J:  Mr Grace, your argument, really, has to amount to

this, that notwithstanding the existence of

Order 31 which is aimed at staying proceedings when

security has not been given, there was no power in

the court in deciding not to stay proceedings but,

on the contrary, to order their continuance to

attach to an application that resists the

continuation of the proceedings, a condition that

security for costs be furnished.

MR GRACE:  What is submitted is that the court has no power

to order security for costs in this factual situation. It has a power to order that an

applicant for the adjournment pay costs. There is

no quarrel with that. But the issue is - - -

TOOHEY J: What do you mean by "pay costs"? Do you mean

costs that have already accrued?

MR GRACE:  Yes, pay the costs of the respondents that they

have incurred in the hearing to date in the court.

TOOHEY J:  Do you mean costs incurred by reason of the

adjournment only?

MR GRACE:  Yes.

TOOHEY J: Let us say, as was the case here, there were

outstanding orders for costs, what if the court had

said, "Well, we will grant an adjournment if those

costs are paid in within the next 30 minutes" or

"paid to the other party", would you have a

complaint?

Adams 7 11/3/94

MR GRACE:  I am not certain, Your Honour, that there were

any outstanding orders for costs at that stage.

TOOHEY J: Let us assume there were for the purpose of the

exercise.

MR GRACE:  I would submit and concede that a court would have that power.

McHUGH J: What about section 128 of the Magistrates' Court

Act. It says:

The Court may, on the application of a party

to a proceeding or without any such

application, adjourn the hearing of the

proceeding -

(c) on such terms as to costs or otherwise -

as it considers necessary or just in the

circumstances.

Why does that not give the court jurisdiction?

MR GRACE: Because, it is submitted, that Order 31 is a

specific provision which is intended to-cover the

field in respect of security for costs.

TOOHEY J: Order 31 is aimed at staying proceedings where

the party bringing the action fails to comply with

an order for security for costs. That is not the

situation we have here.	We have almost the
obverse.

MR GRACE:  But in so far as the magistrate made the order or

made the condition on those terms, it improperly

conveyed a situation to the applicant which, in

law, was not open to the magistrate to convey.

TOOHEY J:  You say that but you say it by reason of a rule

which, it seems to me, has nothing to do with this

situation.

MR GRACE: That is exactly the point, Your Honour, because

if the learned magistrate relied upon that rule it

clearly had nothing to do with this situation and

yet - - -

TOOHEY J:  In the end, the question is one of whether the

power existed; whether she prayed in aid Order 31

or otherwise, whether she had power to do what she

did.

MR GRACE:  Yes, that is what it boils down to in the end.

But even if one takes into account all the

circumstances of this case, one is left with the

position that this applicant simply wanted an

Adams 11/3/94

adjournment so that she could be legally

represented on her cross-summons. She had conceded

the claim proceeding against her with her being

unrepresented but in respect of the cross-summons,

she wished to be legally represented and that was

the basis for her application.

The adjournment, it is submitted, would not

have resulted in any injustice to any of the other

parties, only inconvenience. The proposition that

an adjournment should not be refused if the refusal

will result in a denial of justice to the applicant

and would not result in any injustice to any other

party is firmly established, and I refer

Your Honours to the decision of this Full Court in

Sali v SPC Limited, (1993) 67 ALJR 841, at

page 843.

For those reasons, Your Honours, it is

submitted the applicant has been denied her right

of appeal upon an incorrect application of legal

principles and it is respectfully submitted that

the questions of law raised by this application are
of general relevance and, in the circumstances of

this case, a grant of special leave is required to

correct a_substantial.miscarriage of justice to the

applicant. If the Court pleases.

MASON CJ:  The Court need not trouble you, Mr Birrell, nor you, Mr Laney.

The Court considers that the decision of the

Appeal Division was plainly right. In elaboration of that conclusion, I should say that the Court is of the opinion that section 128(1)(c) of the

Magistrates' Court Act 1989 conferred power on the magistrate to make the order for costs which she

made. The application for special leave to appeal

is therefore refused.

MR BIRRELL:  I seek an order for costs, if the Court

pleases.

MASON CJ: Yes.	You cannot oppose costs, Mr Grace?
MR GRACE:	No, Your Honours.
MR LANCY:	I would seek the same order.
MASON CJ:	Yes.  The application is refused with costs.

AT 11.29 AM THE MATTER WAS ADJOURNED SINE DIE

Adams 9 11/3/94