Canberra Residential Developments Pty Limited v Brendas (No 3)
[2008] FCA 350
•5 March 2008
FEDERAL COURT OF AUSTRALIA
Canberra Residential Developments Pty Limited v Brendas (No 3) [2008] FCA 350
PRACTICE AND PROCEDURE – application to the trial judge for leave to appeal from an interlocutory judgment of that judge, refused
Federal Court of Australia Act 1976 (Cth) ss 24(1A) and 25(2)(a)
Federal Court Rules Order 52, r 10Canberra Residential Developments Pty Limited v Brendas (No 2) [2008] FCA 255
Decor Corporation Pty Ltd v Dart Industries Inc (1992) 104 ALR 621
Niemann v. Electronic Industries Ltd. (1978) VR 431
House v The King (1936) 55 CLR 499CANBERRA RESIDENTIAL DEVELOPMENTS PTY LIMITED ACN 098 326 375 v SPIROS BRENDAS, BEVERLEY ROSE BRENDAS, KENOSS PTY LIMITED ACN 008 544 232 AND CANBERRA LAND DEVELOPMENTS PTY LIMITED ACN 103 875 823
ACD 21 OF 2006
GRAHAM J
5 MARCH 2008
CANBERRA
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
ACD 21 OF 2006
BETWEEN:
CANBERRA RESIDENTIAL DEVELOPMENTS PTY LIMITED ACN 098 326 375
ApplicantAND:
SPIROS BRENDAS
First RespondentBEVERLEY ROSE BRENDAS
Second RespondentKENOSS PTY LIMITED ACN 008 544 232
Third RespondentCANBERRA LAND DEVELOPMENTS PTY LIMITED ACN 103 875 823
Fourth Respondent
JUDGE:
GRAHAM J
DATE OF ORDER:
5 MARCH 2008
WHERE MADE:
CANBERRA
THE COURT:
1.Orders that the application for leave to appeal made ore tenus at 10.15am on 5 March 2008 from the interlocutory judgment of Graham J of 4 March 2008 (Canberra Residential Developments Pty Limited v Brendas (No 2) [2008] FCA 255) be dismissed.
2.Orders that the applicant pay the costs of the first, second and third respondents of the application.
3.Makes no order in respect of the costs of the fourth respondent.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
ACD 21 OF 2006
BETWEEN:
CANBERRA RESIDENTIAL DEVELOPMENTS PTY LIMITED ACN 098 326 375
ApplicantAND:
SPIROS BRENDAS
First RespondentBEVERLEY ROSE BRENDAS
Second RespondentKENOSS PTY LIMITED ACN 008 544 232
Third RespondentCANBERRA LAND DEVELOPMENTS PTY LIMITED ACN 103 875 823
Fourth Respondent
JUDGE:
GRAHAM J
DATE:
5 MARCH 2008
PLACE:
CANBERRA
REASONS FOR JUDGMENT
These proceedings were commenced by an application filed on 14 September 2006. The hearing of the matter commenced on Monday, 26 November 2007 and continued through to and including Friday, 30 November 2007 whereupon it was stood over, part heard, to Tuesday, 4 March 2008 at 10.15 am in the anticipation that the hearing would conclude on or before Thursday, 6 March 2008. It is now shortly after 3.00 pm on Wednesday, 5 March 2008 and, as yet, the hearing has not progressed beyond the stage that it had reached at 4.22 pm on 30 November 2007.
When the matter was adjourned, Mr Spiros Brendas, the first respondent, was under cross-examination by senior counsel for the applicant, Mr R. Crowe SC. The cross-examination commenced at 11.45 am on 30 November and continued until 4.11 pm, interrupted only by a luncheon adjournment between 12.52 pm and 2.01 pm. When the part heard matter was called at 10.15 am on Tuesday, 4 March 2008 Mr Orlov of counsel alone appeared for the applicant. He informed the Court that Mr Crowe was no longer leading him in the matter whereupon the question of Mr Crowe’s incomplete cross-examination of Mr Brendas was raised as an issue and the Court questioned Mr Orlov’s right to proceed to cross-examine him.
Mr Orlov proceeded to apply for leave to cross-examine Mr Brendas notwithstanding his former leader’s earlier cross-examination of him. At that stage the leave application was put to one side and the balance of the morning was taken up with the hearing of a Notice of Motion filed in Court on behalf of the first, second and third respondents for further security for costs to be provided by the applicant. At 2.15 pm, when the hearing resumed, Mr Orlov made an application ore tenus, on behalf of the applicant for leave to complete the cross-examination of Mr Brendas. That application was heard instanter and was decided adversely to the applicant. The Court ordered that leave not be granted to the applicant permitting the further cross-examination of Mr Brendas by different counsel. The Court further ordered that the applicant pay the costs of the first, second and third respondents of the application made ore tenus at 2.15 pm on 4 March 2008.
At the commencement of the hearing today, 5 March 2008, Mr Orlov alone appeared for the applicant. The Court was informed that Mr Crowe would not be available until 16 June 2008. No application was made to have the matter adjourned until his services could again be retained. Rather, an application was made to me as the trial Judge for leave to appeal from my judgment on the question of leave being granted to the applicant to cross-examine Mr Brendas by different counsel. The judgment has now been published and is identified as Canberra Residential Developments Pty Limited v Brendas (No 2) [2008] FCA 255.
Section 24(1A) of the Federal Court of Australia Act 1976 (Cth) (‘the Federal Court Act’) provides as follows:
‘24(1A) An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leaves to appeal.’
It is clear that the judgment which I delivered on 4 March 2008 on the leave to cross-examine application was an interlocutory judgment within the meaning of s 24(1A) of the Federal Court Act. Section 25(2)(a) of the Federal Court Act provides:
‘25(2) Applications:
(a)for leave … to appeal to the Court;
…
may be heard and determined by a single Judge or by a Full Court.’
Order 52, rule 10 of the Federal Court Rules deals with applications for leave to appeal from interlocutory judgments of the Court. Order 52, rule 10 relevantly provides:
‘10(1) An application for leave to appeal from an interlocutory judgment of the Court may be made orally to the Judge who has pronounced the judgment at the time of its pronouncement.
(2)If an application has not been made in accordance with subrule (1), an application may be made by motion on notice.
…’
The application for leave to appeal was not, in my view, made ‘at the time of its pronouncement’ within the meaning of Order 52, rule 10(1). However, it was made ore tenus in circumstances where yesterday afternoon’s events were fresh in everybody’s minds. In support of the application for leave to appeal Mr Orlov submitted that my judgment had been in error in articulating the applicable rule as I did. He submitted that I had stated the test as to when two counsel for the same party could cross-examine the same witness as one which permitted such a course only when there were ‘special and exceptional circumstances’. At the time when the submission was made by Mr Orlov this morning, he was without the benefit of my published reasons from yesterday afternoon. It seems to me that the submission made by Mr Orlov in respect of a failure to correctly articulate the rule is without substance.
Mr Orlov further submitted that I had not focussed on the real question of balancing the relative injustice and prejudice. He submitted that I did not take matters into account which he had raised in argument and that I took other matters into account that should not have been taken into account. He submitted that the order which had been made could be characterised, or could arguably be characterised, as one directed at punishing rather than as a proper exercise of discretion. In his submissions in support of yesterday’s application Mr Orlov accepted that some special circumstances needed to be shown. He submitted that the categories of special circumstances had not closed. He submitted that in the exercise of the Court’s wide discretion it should be guided basically by the need to serve the interests of justice. He submitted that there was in fact not a rule, that the matter was one calling for the exercise by the Court of its discretion and that the discretion should be rooted in notions of fairness. He submitted that there was a need to balance on the other side the importance of Mr Brendas’ evidence and the circumstances where the applicant had in fact run out of funds.
Arguably, in the unusual circumstances of this case, it could be questioned whether the applicant had, as Mr Orlov submitted, ‘in fact run out of funds’. Mr Orlov proceeded to address the Court on questions of prejudice to Mr Brendas arising from the cross-examination of different counsel, the fact that the Court’s discretion was rooted in fairness. He submitted that the Court could ensure that cross-examination of Mr Brendas by different counsel would not lead to prejudice and that the problems could be controlled in that regard. He submitted that the unfairness to the applicant was ‘incapable of remedy’. In support of his application for leave to appeal, Mr Orlov has referred the Court to the judgment of Sheppard, Burchett and Heerey JJ in this Court in Decor Corporation Pty Ltd v Dart Industries Inc (1992) 104 ALR 621.
In that case, reference was made to the decision of the Victorian Supreme Court in Niemann v. Electronic Industries Ltd. (1978) VR 431 (‘Niemann’). The relevant principles flowing from Niemann were referred to as calling for consideration of two tests, the first being one which related to the prospects of the proposed appeal, the question being ‘whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being re-considered by the Full Court’. The second test was stated as ‘whether substantial injustice would result if leave were refused, supposing the decision to be wrong’.
It was indicated that the two tests should not be isolated in separate compartments and that ultimately, a discretion must be exercised on what may be a fine balancing of considerations. The Full Court considered that the principles discussed in Niemann, and in the other cases which were cited, provided general guidance which a Court should normally accept. Their Honours continued at 623:
‘… However, there will continue to be cases raising special considerations, and the court should not regard its hands as tied in any case beyond this, that by s 24(1A) the legislature has evinced a policy against the bringing of interlocutory appeals except where the court, acting judicially, finds reason to grant leave.’
The Court opined that leave would more readily be granted where an interlocutory decision determined a substantive right.
In House v The King (1936) 55 CLR 499 (‘House v The King’) at 504-5, Dixon, Evatt and McTiernan JJ said:
‘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.’
Mr Orlov submits that if leave to appeal were granted, he would urge the case that the Court’s discretion at first instance miscarried within the meaning of the House v The King principle and that leave to cross-examine the same witness by two different counsel should in the circumstances of this case be granted.
Mr Martin SC, for the first, second and third respondents, submits that no error in the statement of the relevant rule was identified by the applicant, that nothing was relevantly identified to demonstrate an error in the exercise of the Court’s discretion and, further, that no substantial injustice would occur if leave to appeal were not granted for the reason that the judgment on the leave to cross-examine application would merge in any final judgment so that an appeal against a final judgment would permit the correctness of the decision of 4 March 2008 to be raised.
Mr Martin highlights the prejudice to the first, second and third respondents and, in particular, the first and second respondents who are individuals, submitting that the stress and strain of the litigation should not be unduly prolonged. He acknowledged that the litigation was significant commercial litigation. He further submitted that a fair outcome for his clients could not be guaranteed in respect of the payment of their costs were they to be successful. I should acknowledge that Mr Orlov indicated that, were leave to be granted there would be a need to deal with costs thrown away, security for costs of an appeal from the interlocutory judgment and security for costs of a further hearing of the substantive matter. I do not consider that questions of protective costs orders such as have been mooted are germane to the question of whether or not leave to appeal should be granted.
Mr Orlov is obviously in the delicate position of suggesting to the trial Judge that what he did yesterday was wrong. Analysing the matters which he has advanced in support of a grant of leave, it does not seem to me that the judgment of 4 March 2008 was attended with sufficient doubt to warrant it being reconsidered by a Full Court. Furthermore, I am in agreement with the submission of senior counsel for the first, second and third respondents that there would be no substantial injustice occasioned to the applicant were leave to be refused, supposing that my decision had been wrong. I can also see that there is a point at which the prolongation of the matter can work to the prejudice of persons such as the first, second and third respondents.
In my opinion, this is not an appropriate case for a grant of leave to appeal and I dismiss the application made ore tenus this morning for such a grant of leave to appeal.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate:
Dated: 17 March 2008
Counsel for the Applicant: R Crowe SC (only on 26, 27, 28, 29 and 30 November 2007) and M Orlov Solicitor for the Applicant: Bradley Allen Counsel for the First, Second and Third Respondents: A S Martin SC and D J C Mossop Solicitor for the First, Second and Third Respondents: Gillespie-Jones & Co Counsel for the fourth respondent: B J Salmon QC Solicitor for the fourth respondent: J S O’Connor Harris & Co Date of Hearing: 26, 27, 28, 29, 30 November 2007 and 4 and 5 March 2008 Date of Judgment: 5 March 2008
4
2
0