Clutha Developments Pty Limited v Barry; Costain Australia Limited v Noble; Bayswater Colliery Company Pty Limited v Moffitt

[1990] HCATrans 70

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S3 of 1990

B e t w e e n -

CLUTHA DEVELOPMENTS PTY LIMITED

Applicant

and

KEVIN BARRY

Respondent

Office of the Registry

Sydney No S4 of 1990

B e t w e e n -

COSTAIN AUSTRALIA LIMITED

Applicant

and

WARREN NOBLE

Respondent

Clutha

Office of the Registry

Sydney No S5 of 1990

B e t w e e n -

BAYSWATER COLLIERY COMPANY PTY LIMITED

Applicant

and

WALTER MOFFITT

Applications for special

leave to appeal

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BRENNAN J
DEANE J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 APRIL 1990, AT 3.14 PM

Copyright in the High Court of Australia

' .

MR C. G. GEE , QC : t-ey it please the Court, in these appl~tions I appear

with my learned frian.d, i:1RJ.P. CURTIS,fo:r; the applicants in

each case. (instructed by Sparke Helmore & Withycombe)

MR J.A. CRUMPTON, QC:  May it please the Court, in each of these

applications I appear with my learned friends,

MR P.M. SEERY and MR K.W. ANDREWS, for the respondents.

(instructed by Maurice May & Co)

BRENNAN J:	Mr Gee.
MR GEE:	Your Honours, I hand up, if I may, some folders

containing material which may possibly need to be

looked at. The submission will be at the end of

the application that the matters raised involve a

short but important question, namely the competence

of an appeal from the District Court in New South Wales

to the Court of Appeal of that State in relation to

an order made in the district court under section 58

of the LIMITATION ACT.

The way in which the proceedings come before

this Court is this, that in three cases now being

heard together plaintiffs who conceived that they

needed to get orders under section 58 of the LIMITATION
ACT extending what would otherwise be a time bar

against the success of their actions made such

applications to the district court. As it happens,

the three applications came forward in three different
ways. In each case, a district court judge granted
the application and made the appropriate section 58

order. In each case the - I am sorry, before I go

on, in one of the three cases, the order having been

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made in the course of the hearing of the substantive
proceedings between the plaintiff applicant and the

employer defendant, that particular case proceeded to

a verdict at the hands of the jury, and a verdict

was given in favour of the plaintiff.

In each of the three cases, the defendants, now

applicants, sought to appeal to the Court of Appeal

against the decisions under section 58. In the case of the matter where it went to trial, there was also

an appeal lodged which would lie as of right against

the verdict that was given in favour of the plaintiff.

But I can anticipate matters, Your Honours, by

indicating that that appeal is irrelevant to what has

to pass here.

In each of the three cases the now respondents

challenged the competency of those appeals and did so
by filing notices of motion in the Court of Appeal
proceedings. Each of those cases was heard together
before a bench of five members of the Court of Appeal

and the motions seeking declarations of incompetency

were all upheld and each appeal was dismissed as
incompetent.

The matter below turned on the interpretation and effect of a number of provisions of the DISTRICT COURT ACT with reference, which is of little importance,to

a provision in the SUPREME COURT ACT. Dealing with

the matter from the point of view of that which we

have to establish for the grant of special leave,

Your Honours, we would first respectfully submit that

this is a matter of general importance. It affects

matters beyond rights of the three parties involved.

Support for that proposition, we respectfully submit,

is obtained from if nowhere else, the opening language
of the judgment of His Honour the Chief Justice who
delivered the majority judgment below who so describes
the matter. His Honour described the matter, page 5

of the appeal book, line 1, as raising a -

question of practice and procedure concerning

the rights of appeal from the District Court -

This Court may feel that it is not precisely a

question of practice and procedure that is involved

but rather a question of the existence or otherwise

of a right of appeal which was held in the Court

long ago to be a right of substance and not merely

one of procedure. May I merely cite, Your Honours,

without reading the judgment of the Court delivered

by His Honour Mr Justice Barton in WORRALL V COMMERCIAL

BANKING COMPANY OF SYDNEY LTD, (1917) 24 CLR 28 at 31

where His Honour so held.

So we would submit that the point of public

importance is made good. From the point of view of

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the existence of at least arguable erro~ below
may I,without fleshing it out in any way by reference

to express statutory provisions, try to give the

central basis on which we would respectfully submit

that the court below did fall into error. The

introduction of subsection (2A) to section 128 of the

DISTRICT COURT ACT on any view had the intention and

effect of widening rights of appeal from the district

court to the supreme court. It did so not only

linguistically, in a way that I will have to come back

to if I am asked to flesh these submissions out, but

it also released from the shackles of the point of

law restriction appeals from district court judges.

Now, historically, action - that is the term used in the DISTRICT COURT ACT - was held to apply

to a process or a procedure which could be interfered
with in one of two ways only: first, by entry of

judgment for either party or, secondly, the order of

a new trial. And that historical approach to the

meaning of the expression found itself expressed in

cases which themselves turned upon historical language

of the DISTRICT COURT ACT which restricted the appellate

court's powers. Hence, historically, if a process -

I am trying to use a neutral word - did not meet

those criteria, that is that it was something that could be interfered with either by the order of a

new trial or the entry of judgment for either party,

then it was not an action; hence no appeal.

Two legislative events changed that, we submit,

radically. The first was the introduction of

subsection (2A), the critical subsection of section 128,

which as a matter of parliamentary intention and as a

matter of language widened the scope of appeal.	The
other crucial parliamentary intervention, in our
submission, was the passage of section 75A of the
SUPREME COURT ACT which just predated the 1973

DISTRICT COURT ACT, to give the supreme court wide

powers in relation to the orders that could be made

on appeal from tribunals, including a judge of the
district court.	·

The effect, we would submit, if leave is granted

of those two legislative interventions was that an historical theory based on the proposition that an action had to be judged by reference to what the

appellate court's powers were in relation thereto

no longer had relevance or validity. In particular,
section 75A empowered the supreme court generally,
that is the Court of Appeal generally, in relation to
the relief that could be granted on a successful
appeal, or even a partially successful appeal, and

secondly, the passage of the same legislation before

the 1973 DISTRICT COURT ACT made it clear that even

if it could properly be said before 1973 that the

supreme court's powers were exclusively laid down in

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section 128 and its predecessor, that was no longer

the case.

BRENNAN J:  Mr Gee, what this leads to is that there were

substantial arguments in favour of the challenge

which you seek to make to the construction placed

upon this seciton by the Court of Appeal.

MR GEE:	Yes, Your Honour.
BRENNAN J:	I suppose against you is the proposition that since

the section has been introduced it has received a

uniform interpretation in New South Wales from the

Court of Appeal and that despite the Court of Appeal having drawn attention to the desirability of

legislative change, none has been made.

MR GEE:  Those factors exist, Your Honour, but they should not,

in our respectful submission, outweigh the - if the

submissions that we put pass the threshold of special

leave by persuading Your Honours that there is at

least a good arguable case of error below, then the

mere fact of silence on the part of the legislature

should not stand in the way of review.

DEANE J: But it is not just construction, is it, in that error

below must mean that the Court of Appeal should not

have thought it appropriate to leave the previous

decision standing after so long?

MR GEE:	That could follow, Your Honour, with respect.
DEANE J:	It is a problem as to the approach to be adopted in

this Court to that situation.

MR GEE:  May I say a word about that, Your Honour. Assume for

a moment that the Court of Appeal, to take the

extreme case, accepted our submissions about error -

I am sorry, that is in the instant appeal bench below -

accepted our submissions as to error in the controlling

case, FRASER CREDITS, but said, "We accept the

submissions as to error but for reasons relating to

the law of precedent, we decline to disturb the

status quo". That could have happened. It did not,

but it could have.

DEANE J: In one way it did happen, though, did it not, in that

they effectively said, "Well, it is an open question;

we would not interfere, but in any event we think it

is right."

MR GEE:  Yes, in that sense that happened, Your Honour. The

submission I would put in that regard is this, that

by definition on that hypothesis, an applicant for

special leave would have passed the threshold of

showing error below in the sense that the controlling

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authority was accepted by the irmnediately precedent

bench as being in error. So that it would be wrong

in principle, in our respectful submission, then to
refuse leave on the basis that stare decisis, if that

is the correct pronunciation, requires that the

status quo be maintained. That would be wrong in
principle, we submit, for the reason that this Court,

if otherwise persuaded that it was a proper case for special leave, would be pre-empting a decision about

a judgmental decision about whether the law should be

allowed to stand despite error, without any opportunity

in the light of full rehearsal of the error with which

the previous decision was infected to determine - I

will put it crudely - how bad it was and to what
extent justice demanded that it be overturned,

notwithstanding long existence. Hence, in our

respectful submission, for the purposes of this

application, although one can see that at the end of

day an appeal, if leave were granted, could be

defeated on that basis, it should not stand in the way

of the grant of leave. Otherwise, as I say, Your Honours,

a very difficult judgmental process is pre-empted,

cut off at the stage of the application for leave
when, on the assumption that I am dealing with, the

applicant is otherwise entitled to take its appeal

before this Court. So that is the answer I would seek

to give Your Honour in relation to that - - -

DEANE J: Yes. The problem in that is that if one were of the

view that at the end of the day in an appeal- and

treating this as a question of practice and procedure -
this Court would not intervene in the circumstances,
that is something that must be taken into account at

this stage in fairness to the parties.

MR GEE:  Your Honour, I could not possibly suggest that what I

have submitted is absolute. It is, I submit,

decisive but not absolute.

DEANE J: I mean, if, for example, there had been a question of

conveyancing practice involved in this 10-year-old

case it would really be unthinkable, unless it was	a matter of great public importance, that the Court
would grant leave if the Court of Appeal had said, well, we cannot interfere with this; it is just too
late.

MR GEE:  Your Honour says it is unthinkable, but if the error

was egregious it would not follow, with respect.

DEANE J:	I can see that, yes.
MR GEE:	Your Honour, two more observations or submissions, if

I may, in relation to this aspect of the matter.

First of all, if you were going to put in the balance against us the sort of consideration that Your Honour

Mr Justice Deane has just put forward, you should put

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in the balance against our opponents ~h8 capricious

results which all hands accept flow from maintainL1.E,

the status quo, which can be illustrated in many ways,

but one of which would be, for example, suppose a

plaintiff in the district court is in ·.:be midst of

trial, that is there is an action on any view of the

meaning of that word and he finds that he needs

section 58 relief on the run, 30 t.o speak, now the

law of section 58 enables that to occur. But he

could then find himself in the, position, as the

maintenance of the status quo would entail, that

before he could make his application to his trial

judge for section 58 relief he would have to ask

for an order transferring the whole proceedings to
the supreme court, no doubt at great cost to himself,

to make sure that if he was unsuccessful in the

section 58 application he would at least have some
avenue of appellate redress.

Now that, with great respect, has to be put in the balance the other way. That was the first thing

that I wanted to add.	The second thing is that at
page 61 of the - - -

BRENNAN J: That makes litigation into a high art form, does it

not?

MR GEE:  Your Honour, I could put some other examples which we

respectfully submit are not fanciful that arise from

the problems posed by the status quo. A plaintiff

might, for example, have a small - what seems to be a

small claim and is advised to make his application

and bring his action in the district court. If his

claim appears to be under $50,000, as the law presently
stands in New South Wales, he will bring it in the

supreme court at great peril as to non-recovery of

all his costs, even if successful. That litigant would

be going to the district court seeking a section 58

order, faced.with the prospect that if he fails there

is no redress.

Another odd consequence - I will not heap any more on Your Honours - there are others. I was

turning to the second matter I wanted to put in

relation to His Honour Mr Justice Deane's observations.

As His Honour the President in his minority judgment

pointed out at page 61 of the application book,

Your Honours, lines 23 and following, the question of

maintaining the status quo in this situation is not

quite analogous, with great respect to His Honour

Mr Justice Deane, with the maintenance of the status

quo where a longstanding conveyancing practice might

have been based thereon because, as His Honour the

President points out, it is not really a question of

"ordering .. , · affairs", it is a question of looking at

the existence or otherwise of a facility of appellate

review which in turn simply determines what the

ultimate legal rights of the parties are.

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So it would be different in kind, in our

respectful submission, even after this passage of

time, to say that FRASER CREDITS and what followed from

it erred than saying that there was error in an old

conveyancing case but the Court would be reluctant

to interfere with it. Those are the matters I wanted
to put in relation to that aspect.

Now, Your Honours, I was putting a moment ago a line of submission intended to try and make good

the proposition that there was an arguable challenge

to the decision below and I am now not quite certain,

to be honest, whether I need to pursue that line.

The central error which we respectfully submit occurred in FRASER CREDITS and will now be perpetuated

if leave is not granted is in failing to recognize

the fundamental change wrought by the two statutory

interventions to which I earlier referred, and failing

to recognize therefore the now irrelevance of historical

decisions confining the meaning of "action".

BRENNAN J:  I think you could proceed on the footing that you

have demonstrated that the question is arguable.	The
proposition, of course, may be whether or not the
opposing view is quite unreasonable.

MR GEE:  Your Honour, with great respect, that formulation would

not be a touchstone for the grant of special leave.

Even putting against myself that we have to persuade

Your Honours that it is a point of general importance

and that it must be at least necessary to show plausible

error, rational arguments to suggest error below, it

would be, in my submission, wrong in principle that an

applicant for special leave should then have to pass

the hurdle that would be erected in front of him of

having to show that the other side's arguments were

quite irrational and quite unacceptable.

BRENNAN J: Well, it depends. If the construction has been one

which affects chiefly procedural matters, then surely	of long standing and it relates to an appeal right	those facts, those circumstances together must be
weighed.

MR GEE:  I cannot say that they cannot be weighed, Your Honour.

That is a different thing, with respect, from erecting

a requirement that an applicant for special leave show

that the opponent's arguments are irrational or could

not be sustained.

BRENNAN J: If the proposition is, and with a provision of this

kind, it is reasonably open to attribute the
construction that has been attributed to them, and

that reasonably open construction has stood for

12 years, the question then arises whether this Court

should intervene.

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MR GEE:  It does, Your Honour. Now one of the factors that would

cause the Court to depart from no doubt some

reluctance to intervene is, first of all, the breadth

of classes of litigants affected. It is all district

court litigants in the State of New South Wales.	So
that is the first balancing matter, with respect.

The second point would be the extent of the injustice

of the result from non intervention if error were
otherwise perceptible and the extent of the injustice

demonstrated, first of all by these three cases in

which the defendant below, applicant here, has no

opportunity whatever of challenging the decision
against it that in each case the applicant was

entitled to an order under section 58, and the converse

is just as true. An unsuccessful applicant in the

district court whose action has been extinguished by

the law of New South Wales has no redress whatever if

a district court judge holds against him under

section 58.

Now those, with respect, Your Honours, are

weighty matters, and although the courts have said

on occasions that there is a reluctance to interfere,

not only are they heavy matters but, with respect,judges

who have followed FRASER CREDITS before the

decision against which we are now seeking leave to

appeal have mentioned the fact that it produces

unsatisfactory or capricious results.and that despite

the attraction of leaving the status quo there must be,

in our respectful submission, a great reluctance to

leave an unsatisfactory state of affairs,based on

error, uncorrected. I say based on error because, for

the purpose of submission, I am assuming that I have
passed that threshold.

If I could just illustrate the matter, in the court below there was a case directly in point and directly against us. It was the EL KALSA case and

it was the one which we were given leave to reargue. There a plaintiff/applicant failed before a district

court judge_- this case is in the bundle of material,

Your Honours - and His Honour the learned trial judge

gave no reasons for the decision, none whatsoever.

The result was that when the Court of Appeal came to

consider EL KALSA, the principal judgment being given

by Your Honour Mr Justice McHugh, the situation was

that the court followed FRASER CREDITS, said that a

section 58 order was not the subject of an appeal and the applicant there, not as a matter of theory but as

a matter of reported fact, had no remedy at all even

in a case where the judge had declined to give any reasons for his decision . And to deny the review process in a minor matter of procedure might be one

thing; here section 58 - - -

McHUGH J: There may have been other causes of action open in

that particular case; mandamus, or even certiorari

to quash the decision, on the basis it -was a decision at all.

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MR GEE:	Yes, Your Honour.	But assume the decision were quashed,

where from there? Fresh decision made, plaintiff

fails again, some reasons given, end of his action

or more accurately, his action is never revived. It

had been extinguished by section 63 and that remained

the end of it. So that while, of course, one has

to recognise that there are matters which, as a matter

of broad policy, may favour the maintenance of the

status quo even if error were perceived, it is the

weight of injustice that is done by denying review

that makes this case one for special leave, in our

respectful submission.

BRENNAN J:  We need not trouble you, Mr Crumpton.

The argument has not revealed sufficient

grounds to justify this Court bringing into question

the well-settled construction of an appeal provision

affecting chiefly procedural appeals, which has been

acted on uniformly for 12 years past when that

construction is reasonably open. However, we note

the suggestions in the Court of Appeal that

legislative consideration should be given to

section 128(2A) of the DISTRICT COURT ACT 1973.

The application for special leave is therefore

refused.

MR CRUMPTON:	May I ask for an order for costs?
MR GEE:	Nothing to say, Your Honour.

BRENNAN J: With costs.

AT 3.46 PM THE MATTER WAS ADJOURNED SINE DIE

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