Charafeddine v Morgan

[2013] NSWDC 7

District Court

New South Wales

Medium Neutral Citation:

Charafeddine v Morgan [2013] NSWDC 7

Hearing dates:

11 February 2013

Decision date:

11 February 2013

Jurisdiction:

Civil

Before:

Gibson DCJ

Decision:

(1) Statement of claim struck out and dismissed.

(2) Plaintiff pay defendant's costs.

(3) Liberty to apply in relation to costs.

(4) Exhibits retained for 28 days.

Catchwords:

RES JUDICATA - issue estoppel - motor vehicle accident - proceedings between same parties for property damage determined in Local Court before proceedings for personal injury heard in District Court - whether issues the same - effect of no contributory negligence finding - no special circumstances displacing issue estoppel - whether abuse of process

Legislation Cited:

Local Court Act 2007 (NSW), ss 35(4), 35(5) and 39
Local Court (Civil Claims) Act 1970 (NSW)
Uniform Civil Procedure Rules 2005 (NSW), Part 31

Cases Cited:

Arnold v NatWest Bank Plc. [1989] Ch. 63
Blair v Curran (1939) 62 CLR 464
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; (1982) 41 ALR 367; (1982) 56 ALJR 459; (1982) NSW ConvR 55-070; [1982] HCA 24
O'Toole v Charles David Pty Ltd (1991) 171 CLR 232; (1990) 96 ALR 1; (1990) 64 ALJR 618; (1990) 34 IR 309; [1990] HCA 44
Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110
Western Export Services Inc v Jireh International Pty Ltd (2011) 282 ALR 604; (2011) 86 ALJR 1; [2011] HCA 45
Young v Annis-Brown t/as Lincoln Smith & Co [2011] NSWSC 890

Texts Cited:

-

Category:

Principal judgment

Parties:

Plaintiff: Hanadi Charafeddine
Defendant: James Roko Morgan

Representation:

Plaintiff: Mr S E Torrington
Defendant: Mr J Jobson
Plaintiff: Stephen Spinak Solicitor
Defendant: Sparke Helmore Lawyers

File Number(s):

2012/60189

Publication restriction:

None

Judgment

1. These are proceedings for damages arising out of a motor vehicle injury on 8 September 2009. The defence denies liability and at paragraph 7 pleads as follows:

"The defendant says that these proceedings are not maintainable due to an issue estoppel which has arisen as a result of a judgment entered in the Local Court of NSW on 2 May 2011 in favour of the defendant in these proceedings against the plaintiff in these proceedings in the matter of James Roko Morgan v Hanadi Charafeddine 2010/356559, relating to property damage suffered by Mr Morgan in the same accident as is the subject of these proceedings."

1. At the commencement of the hearing, the defendant ("Mr Morgan") brought an application for summary judgment, on the basis that his success in Local Court proceedings against the plaintiff ("Ms Charafeddine") amounted to issue estoppel, as it raised common issues (namely duty of care and contributory negligence): Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110.

1. In the Local Court, Mr Morgan was the plaintiff and Ms Charafeddine was the defendant. The statement of claim in the Local Court (see Exhibit A1) pleads in paragraph 6 that the collision occurred as a result of Ms Charafeddine's negligence on the basis that she failed, inter alia, to give way. The sum of $5,044.20 was claimed as liquidated damages.

1. Ms Charafeddine's defence in the Local Court proceedings denied negligence, and alleged the plaintiff was contributorily negligent for "failing to keep a proper lookout and driving at an excessive speed".

1. The property damage proceedings came before the Assessor on 2 May 2011, 18 months after the accident. Mr Morgan provided a statement beforehand in accordance with a timetable; Ms Charafeddine handed one up on the day of the hearing, explaining that her solicitor had been asked to attend to this. She was given permission to rely upon the statement despite the delay.

1. Mr Morgan's solicitor tendered the police report, evidence as to valuation and photographs of the damage. The Assessor then heard from the solicitor for Mr Morgan in relation to both negligence and contributory negligence (T 4). Ms Charafeddine then told the Assessor what she said occurred (T 5). The Assessor then gave a decision taking up approximately three pages of the transcript which it would be fair to describe as "careful and well-reasoned" (see T 49). There has been no attempt to establish what Handley JA called "a plausible case of error of the kind that would attract appellate intervention if a full appeal on fact and law had been available" (Tiufino v Warland, supra, at [49]).

1. There is no evidence before me as to whether the judgment debt was paid. I have, however, been told that no appeal was lodged. Proceedings in the District Court for personal injury were commenced on 23 February 2012, nine months after the proceedings before the Assessor had resulted in a judgment. Mr Morgan's defence to the claim for personal injury damages was therefore able to raise the question of issue estoppel at the first opportunity, rather than during the proceedings (as occurred in Tiufino v Warland, supra).

1. There are two issues before me. The first is whether there is issue estoppel. The second is whether, if I find there is issue estoppel, the court has, and should exercise, a discretion not to apply issue estoppel principles in the present circumstances: Young v Annis-Brown t/as Lincoln Smith & Co [2011] NSWSC 890 at [12].

Is the judgment capable of creating an issue estoppel?

1. Counsel for the plaintiff submitted that it was not enough for the issues to be common. The legislative structure for the proceedings before the Local Court, and the fact that these were not of a true adversary nature, preclude questions of issue estoppel arising.

1. The current legislation, the Local Court Act 2007 (NSW) ("the Act"), differs from the Local Court (Civil Claims) Act 1970 (NSW) in several respects, each of which is submitted by counsel for the plaintiff to be significant. I set each of these out, together with my observations, as follows:

(a) There are limitations in relation to appeals as of right, as set out in s 39 of the Act. There must be lack of procedural fairness or lack of jurisdiction for any right of appeal to lie. In those circumstances, issue estoppel cannot arise.However, there were similar restrictions in relation to proceedings under the repealed legislation, hence the remarks by Handley JA at [49] of Tiufino v Warland, supra, referred to above.

(b)   There was no entitlement to cross-examination and there could be no credit findings in those circumstances. Consequently, issue estoppel could not arise.Part 31 of the Uniform Civil Procedure Rules 2005 (NSW) is excluded for claims in the Local Court, as the notes to Part 31 make clear. This meant that Ms Charafeddine was denied the opportunity to cross-examine Mr Morgan, and that the Assessor's findings could not therefore be based on credit. Each of the parties provided a statement to the Assessor, who then asked the parties to address him in reply.The manner in which a Magistrate or an Assessor may hear evidence in the Local Court is up to the Magistrate or Assessor's determination: see ss 35(4) and 35(5) Local Court Act 2007 (NSW). I was not taken to any authority to support the contention that cross-examination is a pre-requisite for issue estoppel. If so, terms of settlement could not give rise to issue estoppel: c.f. Young v Annis-Brown t/as Lincoln Smith & Co, supra.

(c) The Assessor was not a Magistrate, and therefore the judgment and orders could not amount to issue estoppel.I can see nothing in the Act giving this subsidiary role to the determinations of Assessors; provisions such as s 35(5) appear to be to the contrary.

1. Counsel for Ms Charafeddine raised two other issues upon which it was asserted that the judgment could not amount to issue estoppel:

(a)   The Assessor did not make any findings in relation to contributory negligence.This is incorrect. Not only was the Assessor addressed on the issue of contributory negligence (T 4 lines 46-50) in relation to allegations Mr Morgan was speeding, but he made findings in relation to speeding (T 6 lines 24-32).

(b)   Ms Charafeddine was a litigant in person in the Local Court proceedings.Ms Charafeddine's defence was drafted by a firm of solicitors (see Exhibit A1). She gave a clear and straightforward description of the accident. She appears to have understood the proceedings in the court and she had the benefit of legal advice about these issues.

The law relating to concurrent proceedings raising common issues

1. The facts in this case are identical to Tiufino v Warland, supra. They differ only in two respects, namely that the relevant legislation and court rules have changed (the Local Court Act 2007 (NSW) being the applicable legislation) and the proceedings before this court were commenced some nine months after the proceedings in the Local Court were concluded.

1. In Tiufino v Warland, supra, Handley JA noted (at [26]) the governing principles of issue estoppel as stated by Dixon J in Blair v Curran (1939) 62 CLR 464 at 531-532 and the entitlement of a judgment or order of an inferior court to create an issue estoppel binding in a superior court (at [27]). The principal issue for determination was whether the issue was the same as that which had been decided in the Local Court, there being disputes as to whether the parties and causes of action were the same.

1. Handley JA noted the long history of separate actions for personal injury and property damage (at [43]):

"[43] The decision that there are two causes of action in these cases has stood too long to be disturbed by this Court, but it provides no reason for holding that the existence of a breach of duty to a victim in respect of the clothes he or she is wearing, and the existence of a breach of duty to the victim in respect of his or her bodily safety, are different questions. Linsley v Petrie confirmed that in highway cases a single duty is owed to a person for his property and bodily safety. If this is so I cannot, with respect, see that separate questions of breach can arise. There is no trace in the books before Linsley v Petrie of a case where the same tribunal of fact has found a breach of duty in one case and no breach in the other."

1. However, this did not entitle a party who had been unsuccessful in the Local Court in a property damage claim to bring a personal injury claim in the District Court, as the issues were the same. His Honour explained (at [48]-[50]):

"[48] In my opinion therefore Dowd J was correct in upholding the defence of issue estoppel. If I had been of a different view I would have held that the magistrate's decision in favour of Miss Warland made the maintenance of these proceedings an abuse of process. Mrs Tiufino had complete control over the proceedings in the Local Court through the solicitors and counsel of her choice. The particulars of negligence in her defence in the Local Court are the same as the particulars of negligence in her statement of claim. The solicitors who acted for her in those proceedings are the solicitors acting for her in the present proceedings.

[49] This was an everyday collision case which the magistrate decided on the credibility of the witnesses and the probabilities. There was nothing in the case except possibly the amount of Mrs Tiufino's damages which called for the skills and experience of a Supreme Court Judge. The magistrate gave a careful and well-reasoned decision and no attempt was made to establish a plausible case of error of the kind that would attract appellate intervention if a full appeal on fact and law had been available to Mrs Tiufino.

[50] In these circumstances the attempt to re-litigate these simple issues of fact was an abuse of process even if for some reason the defence of issue estoppel is not available. See Wall v Radford [1991] 2 All ER 741. It has long been established that proceedings which seek to re-litigate some question which technically is not covered by an issue estoppel may be stayed or dismissed as an abuse of process. See Reichel v Magrath (1889) 14 App Cas 665."

1. Tiufino v Warland, supra, is binding authority on this court. Although Mr Jobson submitted that I should, if necessary, make new law in holding that the Local Court decision did not amount to issue estoppel, that is not the role of this court. Mr Jobson has not been able to persuade me that the bases upon which he submits the Local Court judgment and orders do not amount to estoppel should be accepted, and has not directed me to authority to support his contentions that restricted rights of appeal and absence of cross-examination mean that issue estoppel is incapable of arising. A finding that a Local Court judgment does not have the necessary characteristics to amount to issue estoppel is not a finding which should be made without the benefit of careful analysis of the statutory regime, supported by references to appropriate decisions on the issue.

1. This brings me to Mr Jobson's second submission, namely that the court has, and should exercise, a discretion not to apply issue estoppel principles in the present circumstances, relying upon references to this discretion in Tiufino v Warland, supra.

1. In Young v Annis-Brown t/as Lincoln Smith & Co, supra, Black J notes that in O'Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 258; (1990) 96 ALR 1; (1990) 64 ALJR 618; (1990) 34 IR 309; [1990] HCA 44 Brennan J characterised Arnold v NatWest Bank Plc. [1989] Ch. 63 (which identifies such a discretion) as resting on "an uncertain foundation" (Black J nevertheless made findings in relation to whether the discretion should be exercised).

1. In Western Export Services Inc v Jireh International Pty Ltd (2011) 282 ALR 604; (2011) 86 ALJR 1; [2011] HCA 45, in the course of an application for special leave to appeal, the High Court noted statements in a judgment of the Court of Appeal which appeared to challenge the correctness of Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; (1982) 41 ALR 367; (1982) 56 ALJR 459; (1982) NSW ConvR 55-070; [1982] HCA 24. Gummow, Heydon and Bell JJ stated that until the High Court embarked upon the exercise of reconsideration of its own decisions, "intermediate appellate courts are bound to follow that precedent. The same is true of primary judges, notwithstanding what may appear to have been said by intermediate appellate courts" (at [3]).

1. Having noted a potential inconsistency between Tiufino v Warland, supra, and O'Toole v Charles David Pty Ltd, supra, I nevertheless set out briefly the reasons why, in the event that I have a discretion not to apply issue estoppel principles, no such exercise of discretion should be permitted.

1. These proceedings were commenced nine months after the judgment entered against Ms Charafeddine. Ms Charafeddine, and her legal advisors, would have been aware of these proceedings being concluded against her at that time and of the consequences arising by reason of the principles discussed in Tiufino v Warland, supra. The proceedings before the Local Court were conducted fairly and resulted in a careful and considered judgment. There is thus a compelling basis for me to decline to exercise any discretion which may be available to me not to apply issue estoppel principles. There are in fact strong reasons to apply those principles, for the purpose of delivering justice between the parties, and avoiding the parties and the community devoting further resources to the re-agitation of matters which have been the subject of these earlier proceedings (see Young v Annis-Brown t/as Lincoln Smith & Co, supra, at [16]).

1. As the nature of these findings amounts to a finding of abuse of process (Tiufino v Warland, supra, at [50]), it would be inappropriate for me to make alternative findings about the merits of the claim for damages for personal injury.

1. Subject to hearing from counsel, I propose to order the plaintiff should pay the defendant's costs of these proceedings.

Orders

(1)   Statement of claim struck out and dismissed.

(2)   Plaintiff pay defendant's costs.

(3)   Liberty to apply in relation to costs.

(4)   Exhibits retained for 28 days.

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Decision last updated: 12 February 2013