Commonwealth of Australia v Davis Samuel Pty Limited [No 3]
[2008] ACTSC 76
•26 August 2008
HUMAN RIGHTS
COMMONWEALTH OF AUSTRALIA V DAVIS SAMUEL PTY LIMITED [NO 3]
[2008] ACTSC 76 (26 August 2008)
Trade Practices Act 1974 (Cth), s 52
Human Rights Act 2004 (ACT), ss 21, 22
Court Procedures Act 2004 (ACT), Sch 1
Court Procedures Rules 2006 (ACT)
Muir v The Queen [2003] ACTCA 2
R v Muir (ACTSC, Reasons for Sentence, Gray J, SCC 251 of 1999, 25 September 2001, unreported)
Barnes v Addy (1874) 9 LR.Ch.App 244
Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming [1995] 2 AC 378
Auckland Harbour Board v The King [1924] AC 318
Commonwealth v Burns [1971] VR 825
Koh v Murchison Metals Ltd [2007] NSWSC 765
Dietrich v The Queen (1992) 177 CLR 292
New South Wales v Canellis (1994) 181 CLR 309
Airey v Ireland (1979) 2 EHRR 305
Golder v United Kingdom (1975) 1 EHRR 524
Seal v Chief Constable of South Wales Police [2007] HRLR 37
Hinckley and South Leicestershire Permanent Building Society v Freeman [1941] Ch 32
Dick v Piller [1943] KB 497
In Re Yates’ Settlement Trusts [1954] 1 WLR 564
Watson v Watson (1968) 70 SR(NSW) 203
Priddle v Fisher and Sons [1968] 1 WLR 1478
Sydney City Council v Ke-Su Investments Pty Ltd (1985) 1 NSWLR 246
Bloch v Bloch (1981) 180 CLR 390
Sali v SPC Ltd and Anor (1993) 116 ALR 625
Titan v Babic (1994) 49 FCR 546
Short v Short [1960] 1 WLR 833
Squire v Rogers (1979) 27 ALR 330
Scott v Handley (1999) 58 ALD 373
Frugtniet v State Bank of New South Wales [1999] NSWCA 458
Stuart v Federal Commissioner of Taxation (1996) 34 ATR 112
NAOJ v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 814
Shahi v Minister for Immigration and Multicultural Affairs [2000] FCA 763
Fournier v Noelle [2007] Fam CA 845
Walker v Walker [1967] 1 WLR 327
Carryer v Kelly (1969) 90 WN (Pt 1) (NSW) 566
Maxwell v Keun [1928] 1 KB 645
REASONS FOR JUDGMENT
No. SC 75 of 1999
Judge: Refshauge J
Supreme Court of the ACT
Date: 26 August 2008
IN THE SUPREME COURT OF THE )
) No. SC 75 of 1999
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:COMMONWEALTH OF AUSTRALIA
Applicant
AND:DAVIS SAMUEL PTY LTD AND ORS
Defendant
On 23 May 2008, the fourth defendant, Mr Peter Cain, and the fifth defendant, Mr Allan Endresz, then acting for themselves, applied to me to vacate the hearing date for this action. The application was opposed by the plaintiff, the Commonwealth of Australia, and the twenty-seventh defendant, TNG Limited. I dismissed that application; these are my reasons. In these reasons, I call Mr Cain and Mr Endresz jointly, the Applicants.
The action
The Commonwealth has brought this action to recover moneys illegally taken from it in 1999 when the second defendant, Mr David Muir, caused sums of $6m and $2.275m to be transferred from the Commonwealth on 20 April 1998 and 24 September 1998 respectively to companies associated with the Applicants. Mr Muir was convicted of offences relating to these two transfers: Muir v The Queen [2003] ACTCA 2 and R v Muir (ACTSC, Reasons for Sentence, Gray J, SCC 251 of 1999, 25 September 2001, unreported).
Some portions of the funds were used by various of the defendants in different ways and much of them have, therefore, been dissipated. The Commonwealth seeks to trace the funds through these transactions and a number of orders have been made restraining relevant defendants from dealing with them or the assets into which they were converted.
The action was commenced in 1999 but has been delayed in part because of the criminal proceedings involving Mr Muir and other proceedings involving the Applicants and other defendants. It was revived sometime in 2007. The Commonwealth gave notice on 26 September 2007 of its intention to seek a hearing date.
Between the commencement of the proceedings and its revival, the proceedings between the Commonwealth and some defendants had been resolved so that they were no longer what is described in the Court Procedures Rules 2006 (ACT) as “active parties”: see Dictionary.
The Commonwealth has pleaded a number of causes of action in an endeavour to recover the funds, including by seeking to trace them to the assets they were used to purchase. The causes of action pleaded are:
·that Mr Muir and his company, Callform Pty Limited, acted in breach of a fiduciary duty owed to the Commonwealth and that some of the defendants received these funds and, as allegedly having actual or constructive notice of the breach, become liable under the first limb of the principle established in Barnes v Addy (1874) 9 LR.Ch.App 244 at 251;
·that some defendants are liable as accessories within the second limb of the principle in Barnes v Addy, supra, and developed in Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming [1995] 2 AC 378 which held that simple dishonesty was sufficient to attract liability;
·that Mr Muir and Callform Pty Limited also breached a duty of confidence they owed to the Commonwealth and that certain defendants participated in the breaches rendering themselves liable in equity to the Commonwealth as constructive trustees of any property acquired as a result;
·that the payments, which were made out of Consolidated Revenue, were made without Parliamentary authority and were thus illegal and ultra vires and therefore recoverable by the Commonwealth, including by tracing into the hands of the defendants who were holders of such moneys: Auckland Harbour Board v The King [1924] AC 318; Commonwealth v Burns [1971] VR 825;
·that the Commonwealth in paying the funds at the instigation of Mr Muir and Callform Pty Limited made an operative mistake rendering certain of the moneys received by some defendants recoverable; and
·that the action of Mr Muir, in making certain entries in the Commonwealth’s computer system, was conduct in trade and commerce which was misleading and deceptive in contravention of s 52 of the Trade Practices Act 1974 (Cth) and, insofar as it was committed on behalf of some defendants, rendered them liable in damages to the Commonwealth.
As can be seen, the action is a complex one, involving issues of both fact and law that are not ones which would usually be regarded as coming within the scope which a person without legal training would ordinarily be expected to be able to manage in litigation. This view may be reinforced by the fact that it had been listed for hearing from 10 June 2008 for 3 weeks.
The course of the setting a hearing date
To understand the context in which the Applicants have applied to vacate the hearing date, I need to set out briefly how the date was set.
The actual genesis of the setting the hearing date is not entirely clear but it appears that when the Commonwealth sought to revive the action, an approach was made to an appropriate member of the Registry staff who indicated that the 3 weeks from 10 June 2008 was available. So far as I can tell, this date was communicated to the defendants who are active parties. It came to be included in the Court’s calendar and was allocated to me for hearing.
An application in proceedings was made by the Commonwealth on 4 October 2007 returnable on 27 October 2007. It sought orders:
· that the action be listed as a special fixture; and
· that directions be given for the service of any additional evidence.
This application was adjourned to 5 November 2007 then again to 10 December 2007 so that inquiries could be made about the availability of a judge for the hearing and so that the defendants’ counsel could get instructions. It will be recalled that at this time, there were only two resident judges of the court. It appears that during this adjournment the dates in June 2008 were allocated. On 10 December 2007, the application was then adjourned to 14 March 2008.
On that latter date, the defendants who are active parties, except the first defendant and the twenty-seventh defendant, were represented by the same counsel who had represented them in the earlier directions hearings. The twenty-seventh defendant was separately represented. The first defendant was not represented.
The represented defendants (other than the twenty-seventh defendant) opposed the action being listed on 10 June 2008. The reasons were that
·they estimated that the action would take 6 to 8 weeks rather than the 3 set aside;
·the civil penalty proceedings in the NSW Supreme Court against some of them had not concluded, though the only outstanding issue was the amount of the penalty to be imposed and I specifically asked how this could affect the current action, but no clear answer was given;
·the first defendant, Davis Samuel Pty Limited, could not be represented as its only director, Mr Allan Endresz, was subject of an order banning him from being concerned in the management of a corporation, though no funds were actually held by that defendant and Mr Endresz, himself a party, could make any submissions it was likely to make;
·there was not enough time to prepare before the hearing date; and
·counsel had not been briefed for the trial (though this was not strongly pressed; counsel prefaced it with “I’m not putting this as a submission, I’m just saying this as a hypothetical”).
The Commonwealth pointed to prejudice, in the form of the damage that the delay was doing to its reputation and the cross-claim by the represented defendants (other than the twenty-seventh defendant) claiming $4.3 billion from the Commonwealth which was a contingent liability and which had constantly to be disclosed. It also relied on the fact that notice had, at that date, been given at least 3 months before.
I note, in particular, that there were no issues raised about whether the defendants had sufficient funds to pay for legal representation. Although, in the context of the fact that trial counsel had not been briefed, there was a “throw away line” reference to the possibility of the defendants having to represent themselves at trial, this was not pressed and not connected to any ability to brief counsel through insufficient funds.
I directed that the action be listed for hearing to commence on 10 June 2008. I did, however, order further that
Any application, including affidavits in support, to vacate the hearing date be filed and served by 4.15 pm on 25 March 2008 returnable on 28 March 2008.
No such application was made.
This application and the evidence to support it
On 16 May 2008, however, this application was made, returnable on 23 May 2008, just over 2 months after the date I had specified in my direction and just 3 days more than a fortnight before the action was listed for trial.
The application purported to be made on behalf of the 1st, 4th, 5th, 6th, 7th, 8th, 9th, 10th, 15th, 16th, 20th and 21st defendants. The Applicants appeared on the return of the application and announced appearances for themselves. Mr Cain, however, was a legal practitioner, holding a practising certificate in the State of Victoria.
The application was supported by an affidavit of Mr Cain and an affidavit of Mr Endresz. The affidavits were similar and very general, not descending into any real particulars. A number of the matters in the affidavits were more submission than evidence.
Mr Cain deposed that
·Ken Cush, the solicitor retained by those defendants listed in paragraph 19, had retired;
· he did not have the funds required to engage solicitors or experienced counsel;
· he believed he would not receive a fair hearing without legal representation;
·he and his family were suffering stress because of the delay in hearing and he wanted the action heard as soon as possible;
·the complexity of the case, the number of witnesses and volume of documents meant he would not be ready in time;
·time was required to obtain the relevant funding and there was “a strong possibility that those funds will be in place by the end of 2008”;
·if funds do not become available “I will have had sufficient time … to more properly prepare and represent myself”; and
·he was engaged full-time in his business and had responsibilities to it.
Mr Endresz deposed that
·he had received advice from his lawyers about the cost of proceedings but gave no indication of the content of this advice;
·he and the other above listed defendants (other than Mr Cain and the 15th and 21st defendants) were “unable to commit to pay [the estimated] fees at this stage”;
·they will not receive a fair hearing if they are not properly represented;
·they do not presently have sufficient resources to pay for representation but “expect to have sufficient funds by the end of 2008”;
·he is currently involved in other proceedings, namely a costs hearing in the NSW Supreme Court, the challenge to the civil penalty proceedings referred to above and a taxation of costs in the High Court of Australia;
·he has “several possible sources of funding” and is “confident … that [he] will obtain the required funding by the end of [the] year”;
·if he is unable to obtain the funding he will be representing himself and will seek to request the other relevant defendants, but, if so required, the time available is too short to be able to prepare properly;
·he wants the cases dealt with as quickly as possible.
Neither was cross-examined on their affidavits.
The Applicants tried to add to this material by giving evidence in the course of their submissions. This was, of course, unsatisfactory. Apart from the obvious defect that such evidence was not sworn, it could not be properly tested.
For example, Mr Cain tried to make his rather opaque reference to Mr Cush’s retirement relevant by explaining:
MR CAIN: Your Honour, the surprise came to me at about the time indicated when I then discovered that the principal of the practice, Ken Cush & Associates, had retired. Up until that point I didn’t know that. The funding arrangements with that practice through these proceedings, and indeed others, has been that work was done before payment was made. The change of ownership of Ken Cush & Associates, understandably or rightly, their policy is different. The new proprietor of that practice wants money before work is done. That was the surprise that hit the defendants.
Mr Cain had put the date of his knowledge of the problem about funds needed for the hearing as at April 2008. I understand that Mr Cush retired well before that. I further understand that Mr Mark Barrow had taken over the practice. Mr Cain’s counsel made reference to Mr Barrow at the directions hearing on 14 March 2008 where counsel did appear for Mr Cain. I probably cannot rely on my understandings, but the lack of evidence makes the position very unsatisfactory. In the circumstances, I am of the opinion that I cannot accept any of the evidentiary material included in submissions, especially in the light of the complaint about this by Mr M Slattery QC who appeared for the plaintiff.
The twenty-seventh defendant tendered its half-yearly financial report to 31 December 2007 disclosing the action and the contingent liability it creates, potentially eroding a substantial portion of its assets. Otherwise, it adduced no evidence. Likewise, the Commonwealth adduced no evidence.
At the end of the evidence, however, there were significant gaps, being an absence of facts or detail, which included
·the level of proposed representation, the estimated costs and any reasonable alternatives explored or considered;
·the actual financial circumstances of the defendants and any material about the resources available to them;
·facts that would explain why this matter had not been addressed until April 2008 when the date had been foreshadowed at least in December 2007 and set finally on 14 March 2008;
·why this application, I directed to be made by 25 March 2008, was not then made;
·the source of the funds said to become available by the end of the year and the material on which I could make an assessment of the likelihood of its actual acquisition; and
·how the lack of resources had now become a problem which it had not been until now and why it had not been foreseen, given the time that the action has been pending and, especially, as four prior hearing dates had been set and vacated.
The basis for opposing the application
The Commonwealth opposed the application. It claimed that it would suffer prejudice were the application to succeed. It relied particularly on the “reputational issue”, that is that the Commonwealth suffers in reputation from the fact that a serious and very substantial fraud has been perpetrated on it and it appears that it has been not dealt with in a timely manner. The good administration of justice in a public way for the community demanded a speedy end to the litigation. The Commonwealth also relied on the fact of the delay, particularly as it had sought to proceed and hearing dates had previously been vacated over its opposition.
The Commonwealth also, of course, relied on the inadequacy of the application and the failure to present an appropriately and properly detailed and specifically supported application.
The twenty-seventh defendant also opposed the application. It pointed out that it was a public company which suffered from having the action “hanging over its head” for 9 years and having to disclose the contingent liability in its accounts. This is a significant issue: Koh v Murchison Metals Ltd [2007] NSWSC 765 at [3].
Further, it had a cross-claim of its own and so was not merely being denied the vindication that, as a defendant, a favourable judgment brings, but was also being denied the fruits that a favourable judgment on its cross-claim would bring. This is, of course, partly diluted by the provisions relating to pre-judgment interest at rule 1616 of the Court Procedure Rules 2006 (ACT) made under item 20 by Sch 1 to the Court Procedures Act 2004 (ACT).
The question of representation
While legal representation played a prominent part in the application, it was not all about representation, for the evidence was that the Applicants were prepared, given preparation time, to represent themselves (and, if allowed, the other relevant defendants).
I needed to consider, however, whether legal representation was a necessary indicium of a fair trial. The Human Rights Act 2004 (ACT) gives each citizen a right to a fair trial: s 21.
In a criminal trial, which this clearly would not be, a right to representation is an important element of the right to a fair trial at common law: Dietrich v The Queen (1992) 177 CLR 292. Even there, however, it is not an absolute right and a trial can be fair even if the accused is not represented: Dietrich v The Queen, supra, at 311, 335-6, 355-6, 365.
In civil cases, it seems quite clear that the common law does not recognise that, as part of procedural fairness, legal representation is required: New South Wales v Canellis (1994) 181 CLR 309 at 328-9. Under the Human Rights Act 2004 (ACT), s 21 specifies a right to a fair trial (in those broad terms) for both criminal and civil cases but s 22 then sets out express “minimum guarantees” of process and procedure for those charged with crimes, including a reference (but apparently not absolute right) to legal representation, a distinction, therefore, between civil and criminal proceedings.
The international jurisprudence is sparse, but it seems from Airey v Ireland (1979) 2 EHRR 305, a decision of the European Court of Human Rights, that it is not an absolute requirement in civil cases that counsel represent the litigants. The test appears to be whether the absence of counsel would render the litigant’s access to the courts ineffective, in the sense that the litigant would not “be able to present [his or] her case properly and satisfactorily.” The court noted that the European Convention on Human Rights 1950 made a distinction between what was required in criminal proceedings and the absence of the same requirements in relation to civil proceedings. This, I note above, is similar to the ACT position.
I do not consider this to be affected by the decision in Golder v United Kingdom (1975) 1 EHRR 524, where the House of Lords held that denial of access to a solicitor for a serving prisoner who wished to commence civil proceedings was a denial of access to a court (at [28]-[36]) since the right of access to a court would, for him, have been valueless without access to legal advice. This is not the situation here, where the Applicants have already had significant legal advice and representation, they have previously represented themselves and they were prepared to again. I accept, of course, that they would be advantaged by continuing legal representation.
Thus, I find that the question to be asked in this context is whether the absence of legal representation will effectively abrogate the Applicants’ access to a court, which is protected under s 21 of the Human Rights Act 2004 (ACT), though it has been held not to be an absolute right: Seal v Chief Constable of South Wales Police [2007] HRLR 37.
The relevant law
A superior court has jurisdiction to adjourn proceedings, including the vacation of a hearing date. See Hinckley and South Leicestershire Permanent Building Society v Freeman [1941] Ch 32 at 38-9; Dick v Piller [1943] KB 497 at 499; In Re Yates’ Settlement Trusts [1954] 1 WLR 564 at 568-9; Watson v Watson (1968) 70 SR(NSW) 203 at 206; Priddle v Fisher and Sons [1968] 1 WLR 1478 at 481; Sydney City Council v Ke-Su Investments Pty Ltd (1985) 1 NSWLR 246 at 252.
Whether to adjourn is a discretionary decision for the trial judge: Bloch v Bloch (1981) 180 CLR 390 at 395; Sali v SPC Ltd and Anor (1993) 116 ALR 625 at 628-9; Titan v Babic (1994) 49 FCR 546 at 555.
A number of factors have, however, been identified as relevant to the decision. Thus, parties should be able to expect that proceedings set down for trial will be heard and determined then: Short v Short [1960] 1 WLR 833 at 849; Watson v Watson, supra, at 206.
The competing claims of other litigants, whose cases will be delayed or whose cases could have been heard, is a relevant consideration also, especially these days where courts are under pressure from the press of litigation. See Squire v Rogers (1979) 27 ALR 330 at 337; Sali v SPC Ltd and Anor, supra, at 629.
The interests of the other parties to the action, too, must clearly be considered and any prejudice to those parties caused by the delay must be taken into account: Scott v Handley (1999) 58 ALD 373 at 380; Frugtniet v State Bank of New South Wales [1999] NSWCA 458 at [32].
The length of notice of the date for hearing of proceedings that an applicant for an adjournment has had is a relevant factor: Stuart v Federal Commissioner of Taxation (1996) 34 ATR 112 at 115; NAOJ v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 814 at [5].
Where an applicant seeks an adjournment in order to obtain legal representation, the reasons why such representation has not been obtained are very relevant: Shahi v Minister for Immigration and Multicultural Affairs [2000] FCA 763 at [15], [31]; Fournier v Noelle [2007] Fam CA 845 at [2].
Nevertheless, the paramount duty of a court is to see that justice is done, though doing justice is a “two-way street” and in the exercise of the discretion the rights of both parties to the litigation must be considered: Watson v Watson, supra, at 206; Walker v Walker [1967] 1 WLR 327.
In so considering the interests of justice, a court must bear in mind that where refusal of an adjournment would result in serious injustice to the applicant, it should normally be granted unless refusal is the only way in which justice can be done to the other party to the action. See Walker v Walker, supra, at 330; Watson v Watson, supra, at 210; Carryer v Kelly (1969) 90 WN (Pt 1) (NSW) 566 at 569; Sydney City Council v Ke-Su Investments Pty Ltd, supra, at 252; Sali v SPC Ltd and Anor, supra, at 629.
Clearly, refusal of an adjournment is not justified where it will defeat the rights of a party altogether: Maxwell v Keun [1928] 1 KB 645 at 653.
Drawing on the law, I find that the task of deciding this application should be approached in the following way. The decision is a discretionary one and will depend on all the circumstances. It must, of course, be approached judicially. The Applicants are required to make out their case and provide adequate evidence of the relevant circumstances. The relevant circumstances include, but are not limited to, the position in which the Applicants find themselves and the situation in which they will find themselves if the application is refused. The other circumstances include at least
·the reason or reasons why the Applicants are in their present position and how that came about, especially any responsibility of the Applicants for it;
·the position the other parties would be in if the application is granted; and
·a general assessment of the position of other litigants in the court and the management of cases in the court in the context of this application.
All this must have regard to the paramount duty to see that the Applicants are not denied a fair trial nor access to the court as protected by the Human Rights Act 2004 (ACT) and that, balancing all the relevant considerations, justice is done and, finally such an application must, in the absence of exceptional circumstances, be granted if its refusal would altogether defeat the rights of the Applicants.
Conclusion
Applying this test, I concluded that the Application should be dismissed. In coming to this conclusion I have had principal regard to the facts that:
·the Applicants have not satisfied me to the requisite degree that they are unable to secure appropriate representation;
·the Applicants have not satisfied me that if they cannot brief counsel they will be denied access to the court as it is understood on the authorities, particularly in the light of their knowledge and experience and their involvement with other litigation arising out of these events giving rise to this action;
·the Applicants have known since late 2007 that the trial was likely to proceed on 10 June 2008 and known since 14 March 2008 that this was the trial date; and
·the Applicants have not satisfied me that, in the circumstances where all but one of the relevant affidavits have been filed for some time, most of them years ago, (and that remaining one is that of the fifth defendant) they will not be ready.
I have also had regard to the facts that:
·the twenty-seventh defendant will suffer significant prejudice if the application is granted;
·the Commonwealth will suffer prejudice if the application is granted, though this is not serious prejudice;
·there have been four prior hearing dates set; and
·the Applicants have not satisfied me that they have realistic prospects of obtaining funds to brief counsel for a hearing were the proceedings adjourned.
Although of lesser significance, I have also had regard to the facts that
·the Applicants have not satisfied me that they bear no relevant responsibility for the position in which they presently find themselves;
·the Applicants failed to apply to vacate the hearing date in accordance with the Order I made on 14 March 2008; and
·the granting of the application at this late stage is likely to leave much of the 3 weeks currently set aside for the trial unable to be used to list other cases in the court which will also be affected by the re-allocation of a trial date for this trial.
Because of my principal reliance on the gaps in the material adduced on behalf of the Applicants, I made it clear when dismissing the application that the Applicants were at liberty to make a further application if they could gather and adduce the relevant evidence to address these matters. It is, of course, entirely a matter for the Applicants whether they choose to do so.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.
Associate:
Date: 26 August, 2008
Counsel for the plaintiff: Mr M Slattery QC and Mr J Hogan-Doran
Solicitor for the plaintiff: Australian Government Solicitor
Fourth Defendant In person
Fifth Defendant In person
Counsel for the 27th Defendant Mr N Hutley QC and Mr J Giles
Solicitors for the 27th Defendant Snedden Hall & Gallop
Date of hearing: 23 May 2008
Date of judgment: 26 August 2008
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