Air Marshal Errol John McCormack v Russell Vance
[2008] ACTCA 16
•14 November 2008
AIR MARSHAL ERROL JOHN McCORMACK and ANOR v RUSSELL VANCE
[2008] ACTCA 16 (14 November 2008)
Court Procedure Rules 2006 (ACT), r 671, r 7000
Supreme Court Rules 1937 (ACT), O 33 r 1, O 34 r 13, r 23
Rules of the Supreme Court 1883 (UK), O 31 r 12
Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256
House v The King (1936) 55 CLR 499
Lovell v Lovell (1950) 81 CLR 513
Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621
Micallef v ICI Australia Operations Pty Ltd & Anor [2001] NSWCA 274
Birkett v James [1978] AC 297
Commonwealth of Australia v Lewis [2007] NSWCA 127
Stollznow v Calvert [1980] 2 NSWLR 749
The National Commercial Bank v Wimborne, unreported, Supreme Court of NSW, 4 May 1992, BC9201904
Mosser v PGH Ceramics Pty Ltd (1964) 82 WN(NSW) (Pt 1) 147
APPLICATION FOR LEAVE FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
No. ACTCA 36-2007
No. SC 317 of 2001
Judges: Gray P, Refshauge and Marshall JJ
Court of Appeal of the Australian Capital Territory
Date: 14 November 2008
IN THE SUPREME COURT OF THE ) No. ACTCA 36-2007
) No. SC 317 of 2001
AUSTRALIAN CAPITAL TERRITORY )
)
COURT OF APPEAL )
APPLICATION FOR LEAVE FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:AIR MARSHAL ERROL JOHN McCORMACK IN HIS CAPACITY AS CHIEF OF AIR FORCE
First Applicant
AND:COMMONWEALTH OF AUSTRALIA
Second Applicant
AND:RUSSELL VANCE
Respondent
ORDER
Judges: Gray P, Refshauge and Marshall JJ
Date: 14 November 2008
Place: Canberra
THE COURT ORDERS THAT:
The application for leave to appeal be adjourned to a mention before Refshauge J at 9:30am on 16 December 2008.
IN THE SUPREME COURT OF THE ) No. ACTCA 36-2007
) No. SC 317 of 2001
AUSTRALIAN CAPITAL TERRITORY )
)
COURT OF APPEAL )
APPLICATION FOR LEAVE FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:AIR MARSHAL ERROL JOHN McCORMACK IN HIS CAPACITY AS CHIEF OF AIR FORCE
First Applicant
AND:COMMONWEALTH OF AUSTRALIA
Second Applicant
AND:RUSSELL VANCE
Respondent
Judges: Gray P, Refshauge and Marshall JJ
Date: 14 November 2008
Place: Canberra
REASONS FOR JUDGMENT
THE COURT:
This is an application for leave to appeal from an interlocutory order of Justice Crispin made in these proceedings.
The applicants, the Commonwealth of Australia (Commonwealth) and Air Marshall Errol John McCormack, in his capacity as Chief of Air Force, are the defendants to a further amended statement of claim in which Russell Vance, the respondent to this application, was the plaintiff. The plaintiff was formerly a squadron leader in the Royal Australian Air Force and is claiming loss or damage as a consequence of unlawful or negligent termination of his employment with the Commonwealth.
On 28 September 2007, Crispin J ordered that the Commonwealth of Australia not defend the allegations of unlawful termination in the further amended statement of claim and that the Commonwealth’s defence responding to those allegations be struck out.
The plaintiff’s application seeking those orders referred to Rule 671 of the Court Procedure Rules 2006 (ACT) (CPR) or, alternatively, the inherent power of the court by reason of the Commonwealth’s failure to comply with “the order of the court dated 2 April 2002 that the second defendant (the Commonwealth) provide discovery”. In his judgment, Crispin J set out the issue before him as:
[25]The first application is reliant upon rule 671 of the Court Procedure Rules 2006 and/or the inherent power of the court, which in this jurisdiction is effectively entrenched by s 48A of the ACT (Self Government) Act 1998.
[26]Rule 671 is in the following terms:
(1)If a party, without reasonable excuse, contravenes an order of the court made under this part, the court may—
(a)if the party is a plaintiff or other claimant—order that all, or a stated part, of the party’s proceeding be struck out, dismissed or stayed; or
(b)if the party is a defendant or respondent—order that the party not be allowed to defend all, or a stated part, of the proceeding against the party.
(2)This rule does not limit any other power of the court in relation to the contravention.
[27]In the present case it is alleged that the defendants have failed to comply with an order made by the Registrar on 2 April 2002 requiring them to provide discovery by 30 August 2002. In purported compliance with this order, Mr Miller, the Director of Litigation for the Department of Defence, swore no less than six affidavits, the first on 30 August 2002 and the last on 8 June 2007, and arranged for the provision of some further documents on several occasions. Despite these efforts, it is clear that the defendants have still not adequately complied with the order.
His Honour concluded:
[40]Mr Crowe has argued that the plaintiff’s case is destined to fail because he was undeniably incapacitated at the time the decision to retire him was made. That may be so, but the plaintiff is entitled to have access to the documents that should have been produced in compliance with the court’s order of 2 April 2002 before being required to prove his case. Furthermore a party is not relieved of the duty to comply with a court order merely because it believes it has a strong case.
[Our emphasis]
It can be seen by this that a critical issue as far as his Honour was concerned was whether there had been compliance with the order made by the Registrar on 2 April 2002.
The draft notice of appeal
In the draft notice of appeal lodged with the application for leave and in the applicants’ written submissions, issue was taken with various aspects of his Honour’s approach to the matter, particularly in terms of what were said to be matters to which his Honour should or should not have had regard. In particular, it was contended that an exercise of the court’s inherent power required an analysis of whether the circumstances allowed the defendants to obtain a fair trial in terms of the approach of the High Court in Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256. These are matters predicated on the court exercising its inherent power to prevent abuses of its process.
Point taken for the first time
In his oral submissions to this court, Mr Crowe SC, who appeared as counsel for the applicants, raised for the first time the issue of whether what had been found to be inadequate compliance with the order was, in fact, a contravention or failure to comply with it. At the outset of his submissions, Mr Crowe added to the appeal book, by consent, the bench sheet for the proceedings before the Registrar on 2 April 2002. No formal order had been taken out consequential upon those proceedings. The record of proceedings lists the matter as “Directions” and the order recorded is, “Affidavit of discovery by 30 August Relist 2 September”.
In fact, the first affidavit of discovery was filed on 30 August 2002 and it is the Commonwealth’s contention that the affidavit that was filed on that date constitutes compliance with the order.
That is said to be significant because the terms of O 33 r 1(2) of the Supreme Court Rules 1937 (ACT) (SCR) that applied at the time provided generally that the court may:
… at any time give such directions, and on such terms, as may be just and expedient, including directions with respect to –
…
(d) discovery; …
At that time, SCR O 34 dealt particularly with discovery and inspection. The procedure for discovery was set out in SCR O 34 r 13:
13 Discovery of documents
(1)Any party may, without filing an affidavit, apply to the court for an order directing any other party to the cause or matter to make discovery on oath of the documents which are or have been in his or her possession or power relating to any matter in question therein.
(2)On the hearing of the application the court may either refuse or adjourn the same if satisfied that such discovery is not necessary, or not necessary at that stage of the cause or matter, or make such order, either generally or limited to certain classes of documents, as is, in its or his or her discretion, thought fit.
(3)Discovery shall not be ordered unless, and so far as, the court is of opinion that it is necessary either for disposing fairly of the cause or matter or for saving costs.
It may be noted that SCR O 34 r 13 required the exercise of a discretion based upon the necessity of discovery at that stage and to make orders limiting discovery. In the present case, it is apparent that the court was not called upon to exercise its discretion and the order that was made was directed, by consent, to only requiring an “Affidavit of discovery”.
The provision for non-compliance, at that time, was provided in SCR O 34 r 23 in these terms:
23 Failure to comply with order
(1)If a party (the failing party) fails to comply with an order to answer interrogatories, or for discovery or inspection of documents, the party interrogating may apply to the court for an order under this rule.
(2)The court may, by order, do the following under this rule in relation to the failing party:
(a)find the party (or, for a party with a legal disability, the party’s litigation guardian) to be in contempt of court and deal with the party accordingly;
(b)if the party is a plaintiff—dismiss the party’s action;
(c)if the party is a defendant—strike out the party’s defence (if any), and place the party in the same position as if the party had not defended.
Having regard to the consequences of non-compliance with an order of discovery under the rule, the applicants claim to be entitled to have the rule construed strictly. If the order had been an order for discovery, the adequacy of the response to such an order would be an issue. However, it was put that a direction that an affidavit of discovery be filed by a particular date, as was made in this case, does not admit of such a challenge.
The application of CPR 671 to the order in question was not contested at the hearing before Crispin J. The transitional provisions in Chapter 7 of the CPR are in wide terms. CPR 7000 provides:
7000Transitional—existing proceedings in Supreme Court on 1 July 2006
(NSWA sch 6, cl 5; Qld r 996)
(1)Unless the Supreme Court otherwise orders, these rules apply to an existing proceeding.
(2)If a difficulty arises in the application of subrule (1) to a particular proceeding, the court may make any order it considers appropriate to resolve the difficulty.
(3)The court may make an order under this rule on application by a party or on its own initiative.
NotePt 6.2 (Applications in proceedings) applies to an application for an order under this rule.
(4)In this rule:
existing proceeding means a proceeding started in the Supreme Court, but not completed, before 1 July 2006.
NoteSee sch 4 (Scale of costs), r 4.12 (2) for transitional provisions in relation to costs
There seems little difficulty in regarding CPR 671 as applying to the consent order made on 2 April 2002 under SCR O 34 r 13. The point taken by Mr Crowe is whether the order by consent on that date was an order that the respondent make discovery rather than that it merely file an affidavit of discovery.
Mr Crowe also made a point of noting that the order was made in the context of “directions” (ie SCR O 33) rather than “discovery” provided for by SCR O 34. As far as this point is concerned, there cannot be any merit in it. SCR O 34 is the primary source of the court’s power to give directions under SCR O 33 and the direction given is clearly reliant upon that power.
As no order was taken out, there remains a question as to what might be considered the practice in relation to orders of this nature. SCR O 34 r 14 provides:
14 Affidavit in opposition
The affidavit to be made by a party against whom an order as is mentioned in rule 13 has been made shall specify which (if any) of the documents therein mentioned he or she objects to produce, and shall be in accordance with form 1.24.
It can therefore be seen that compliance with the order under SCR O 34 requires an affidavit in the form prescribed and is predicated on an order in terms of SCR O 34 r 13(1) as being “an order directing any other party to the cause or matter to make discovery on oath …”.
SCR O 34 was derived in almost identical terms from the Rules of the Supreme Court 1883 of the United Kingdom (RSC) which, by RSC O 31 r 12, provides for an application for discovery of documents. Appendix K No. 17 to those Rules provides for an “Order for Affidavit as to Documents (O31 r 12)” and provision is only made for an order that there be “answer on affidavit stating what documents are or have been in possession or power relating to the matters in question …”.
The form in Appendix K of the RSC has not been replicated in the SCR. It seems clear that the practice adopted from the RSC does not require a separate order directing discovery but that an order to that effect may be taken to be implicit in the order directing the filing of the affidavit as to documents.
That being the case, there is no difficulty in assuming that the consent order made by the Registrar in this case was an order directing discovery on oath and that it was open to Crispin J in this matter to determine whether the defendant had contravened an order of the court that could be taken to be an order of the court to which CPR 671 applied. In the course of his oral submissions, Mr Crowe sought and was granted leave to amend the draft notice of appeal to add a further ground in terms of:
The court erred in finding that the Commonwealth had failed to comply with the order made on 2 April 2002.
However, for the reasons just expressed, the applicants cannot succeed on such a ground.
The applicants’ other issues
As has been noted, the draft notice of appeal proposed by the applicants appears to be predicated upon the applicants’ view that the matter was determined on the basis of the exercise of the court’s inherent power to prevent an abuse of process rather than an exercise of the court’s discretion consequent upon a direct contravention of an order of the court. This, it would seem, was the reason the applicants pressed the amendment to the draft notice of appeal which, if successful, would have resulted in the matter having to be determined in the exercise of the court’s inherent power to prevent an abuse of process. The matters put forward on the applicants’ behalf are not questions of principle but rather matters directed to the exercise of a judicial discretion. Essentially, the applicants’ complaint is that on the material before the court, the court’s discretion should have been exercised in the applicants’ favour.
Further, in this case, this was a discretionary decision on a question of practice and procedure. Appeals against discretionary decisions are to be determined in accordance with the oft cited principles set out in House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
(See also, Lovell v Lovell (1950) 81 CLR 513 at 518-519; Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621 at 627.)
The application of these principles to decisions on matters of practice and procedure was authoritively considered by the NSW Court of Appeal in Micallef v ICI Australia Operations Pty Ltd & Anor [2001] NSWCA 274, where Heydon JA (Sheller JA and Studdert AJA agreeing) said at [45]:
As a result, Garling DCJ had to make a discretionary decision on a matter of practice and procedure - an extremely important one, having potentially serious consequences for the plaintiff, but a discretionary decision on a matter of practice and procedure nonetheless. Any attack on decisions of that character must fail unless it can be demonstrated that the decision-maker:
(a)made an error of legal principle,
(b)made a material error of fact,
(c)took into account some irrelevant matter,
(d)failed to take into account, or gave insufficient weight to, some relevant matter, or
(e)arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning.
Micallef (supra) concerned a rule under the District Court Rules where the court was given the power to dismiss for want of prosecution proceedings where a plaintiff defaulted in complying with any order or direction.
The Court of Appeal in Micallef expressly rejected the plaintiff’s contention in that case that orders should not have been made unless there had been “an inordinate and inexcusable delay” giving rise to “the substantial risk that a fair trial would not be possible resulting in serious prejudice to the Defendants”. In so doing, the Court of Appeal referred to a similar formulation by Lord Diplock in Birkett v James [1978] AC 297 at 318. Heydon JA referred to the fact that the District Court Rule under consideration contained no limitation on the discretion conferred by the Rules. He went on to say, at [50]:
The English formulae would compel the exercise of the discretion one way unless particular circumstances were established, in which case the discretion would have to be exercised another way. A “discretion” which can only be exercised one way is not in truth a discretion at all. The English tests are thus inconsistent with Part 18 rule 3(1) [the District Court Rule]. Part 18 rule 3(1) is, after all, a statutory enactment in the sense that it was made by the Rule Committee in the exercise of the statutory power conferred by the District Court Act 1973, s 161. Restrictive words are not lightly to be read into it.
These comments are equally applicable to the discretion to which CPR 671 gives effect.
The decision in Micallef may be directly applied to the decision in this case. It may be noted that the approach in Micallef was recently applied in Commonwealth of Australia v Lewis [2007] NSWCA 127 per Beazley JA (Santow JA and Ipp JA agreeing). There has been no good reason advanced why this court should not also accept this approach.
The proposed grounds of appeal as set out in the draft notice of appeal are:
(a)The Court erred in failing to consider adequately the issue of what prejudice was suffered by the Respondent as a result of the Appellants’ breach of their obligations with respect to discovery, or how the Respondent was prevented from having a full and fair hearing
(b)The Court failed to have regard, or adequate regard, to the explanation which was tendered on behalf of the Appellants in relation to the discovery process.
(c)The Court failed to consider, or consider adequately, relevant authorities cited by the Appellants, namely: Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 and National Commercial Bank v Wimborne (unreported).
(d)The Court failed to have sufficient regard to the principle that access to the courts should not be denied other than in exceptional circumstances.
(e)It was not open to the Court to strike out the defence in circumstances where:
(i)it had not been found that the Respondent could not receive a fair trial because of the Appellants’ breach of their obligations with respect to discovery; and
(ii)it had not been found that the Appellants had contumaciously or deliberately breached their obligations with respect to discovery.
(f)The Court erred in holding that it was not necessary for it to decide the second and third applications before it, being:
(i)an application by the First Appellant dated 13 June 2007 for an order relieving it of any further obligation to attempt to restore information from back up tapes; and
(ii)an application by the Respondent [dated] 1 May 2003 for an order requiring the Appellants to discover a number of documents notwithstanding the Appellants’ claim of legal professional privilege in relation to those documents.
Paragraphs (a), (b) and (d) of the proposed grounds of appeal are all directed to matters clearly before the primary judge and nothing was put in submissions that demonstrates that they were not taken into account by the primary judge in the exercise of his discretion.
Paragraph (c) in particular, and paragraph (e) of the proposed grounds of appeal are predicated on the court determining the matter in the exercise of the court’s inherent power and as Micallef demonstrates, the judicial discretion under a rule such as CPR 671, is not to be so confined. Micallef approved an earlier Court of Appeal decision of Stollznow v Calvert [1980] 2 NSWLR 749 at 751 per Moffit P (Hope JA and Mahoney JA agreeing):
While useful guidance is provided by the manner of exercise of the discretion in other cases, and by the factors considered in those cases to favour the exercise of the discretion in a particular way, each case must depend on its own facts. It would be contrary to what I understand to be the accepted law in this country, to confine the exercise of a judicial discretion by judge made rigid formulae.
Nevertheless, the applicants submitted that the decision should have had regard and given effect to the comments made by Young J in The National Commercial Bank v Wimborne, unreported, Supreme Court of NSW, 4 May 1992, BC9201904. At 11, it was said:
If documents are not discovered a party may invoke the powers of the court under Pt23 r15. This incudes the power to strike out or stay the proceedings.
It is clear, however, that the ultimate sanction of dismissal is for the worst case where it is the only appropriate way to ensure effective compliance with an order for discovery; Mosser v PGH Ceramics Pty Ltd (1964) 82 WN(NSW) (Pt1) 147, 149. The authorities show that the court may also take this action if the failure to give proper discovery is symptomatic of the plaintiff’s want of prosecution of its case; Hartley v Owen (1876) 34 LT 752, or where the defaulting party is deliberately avoiding giving discovery; Danvillier v Myer 1883 Eng WN 58.
The principles were recently considered in Southern Cross Exploration NL v Fire and All Risk Insurance Co ltd (1985) 2 NSWLR 340. In that case his Honour stopped a forty seven day trial to hear a notice of motion for a new trial because of want of discovery, which motion took a further fifty days to hear. He found that discovery was inadequate because of an erroneous view taken by the defendant’s lawyers. However, his Honour rejected the application for a new trial because there was not the material before him to show that there was irreparable harm or dishonourable or deliberate conduct to injure the other party.
This case was cited to Crispin J in argument and his Honour expressed difficulty with the concept concerning the ultimate sanction of dismissal being the appropriate way of ensuring effective compliance with the order. That is not necessarily so when it is appreciated that the case cited, Mosser v PGH Ceramics Pty Ltd (1964) 82 WN(NSW) (Pt 1) 147 (at 149), was concerned with a self-executing order in the event of discovery not being complied with. Nevertheless, the examples given by Young J are not, by any means, exhaustive of the circumstances which might constitute the “worst case”. Apart from emphasising the seriousness of the sanction of dismissal as a consequence of a discovery order that has not been complied with, the case is not authority for any principle that would constrain or restrict a court’s discretion in considering whether it should act under CPR 671.
The particular circumstances of the case before Crispin J led him to the following conclusions:
38.In my opinion, the real question raised by this case is what should be done about the extraordinarily persistent non-compliance with the order for discovery? In Logicrose Ltd v Southend United Football Company Ltd Chancery Division, 5 February 1988, unreported save in the Times newspaper of 5 March 1988 but cited in British American Tobacco Australia Services Ltd v Cowell at [152] Millet J said that it would not be right to deprive a litigant of justice without determination of the issues as punishment for his or her conduct, however deplorable, unless there was a real risk that that conduct would render the further conduct of the proceedings unsatisfactory. His Lordship added the admonition that a court “must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice”. On the other hand, I am conscious of the old adage of “justice delayed is justice denied”. It is true, of course, that delay is a regrettable but inevitable concomitant of contemporary litigation and, generally speaking, a party should not be denied the opportunity for a full and fair hearing on the merits of the case when the delay caused by its default has not led to irredeemable prejudice. However, in this case there has been a persistent failure to adequately comply with a court order and a defendant cannot expect a court to be mollified by a contention that, no matter how many years the case is delayed by its persistent default, it will always be possible for the plaintiff to eventually obtain a fair trial of the action. …
39.I accept that, even when there has been protracted default, it may be relevant to consider the nature and extent of the potential prejudice suffered by the plaintiff as a consequence. In the present case, counsel for the plaintiff have taken me through many of the ADF records in chronological order, pointing to the absence of further documents that are referred to in the records that have been produced, and others the existence of which may be inferred [from] the circumstances. It does appear that some of the missing documents could be potentially important to the plaintiff’s case. In any event, parties who persistently fail to comply with court orders must understand that they do so at their peril.
41.The defendants have now been in breach of the order for discovery for more than five years. There has been no adequate explanation for this extraordinary default and I have not even been given any assurance as to when due search and inquiry would be undertaken or as to when Mr Miller or some other officer would be placed in a position to validly swear a seventh affidavit of discovery.
This reasoning does not demonstrate any error of principle, material error of fact or the taking into account of some irrelevant matter. It cannot be said that the reasoning fails to take into account or give insufficient weight to some relevant matter or that the result is so unreasonable or unjust to suggest that error has occurred.
Applications not determined
As far as the matters raised by paragraph (f) of the proposed grounds of appeal are concerned, it said that Crispin J erred in not proceeding to determine an application by the applicants to limit their obligation to attempt to restore information from back-up tapes and an application by the respondent concerning discovery of certain documents in respect of which privilege was claimed. As the respondent points out, these applications need to be considered in light of Crispin J’s decision to strike out paragraphs 12 and 13 of the defence of the Commonwealth. The applications have not been dismissed. It is open to the moving party to seek to have the application made by that party determined. For that purpose, the Court will not now formally order that the application for leave to appeal be refused, but allow the parties a period of one month in which to seek to raise these issues before a single judge of the Court. If that opportunity is not availed of in that time, an order will be made that the application for leave be refused with costs. For the time being we will order only that the application for leave to appeal is adjourned until further order.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.
Associate:
Date: 14 November 2008
Counsel for the Applicants: Mr R Crowe, SC
Solicitor for the Applicants: Australian Government Solicitor
Counsel for the Respondent: Mr F J Purnell, SC with Mr C Erskine, SC and Mr D J C Mossop
Solicitor for the Respondent: Maliganis Edwards Johnson
Date of hearing: 12 and 13 May 2008
Date of judgment: 14 November 2008
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