Darcob v Equipment Trading
[2011] NSWSC 1548
•21 December 2011
Supreme Court
New South Wales
Medium Neutral Citation: DARCOB v EQUIPMENT TRADING [2011] NSWSC 1548 Hearing dates: 18 July 2011 Decision date: 21 December 2011 Jurisdiction: Civil Before: RS HULME J Decision: (i) The appeal is allowed.
(ii) The orders made by Magistrate Russell herein on 17 September 2010 are set aside.
(iii) The proceedings are remitted to the Local Court to be decided by some Magistrate other than Magistrate Russell.
(iv) Each party is to pay its own costs of proceedings in this Court and its own costs of the hearing before, and submissions to, Magistrate Russell in the Local Court.
(v) Otherwise, the costs of proceedings in the Local Court are to be dealt with as an incident of the final determination of the proceedings in that Court.
(vi) Stay orders (iv) and (v) until Friday 27 January 2012 or, if a Notice of Motion returnable before me on Friday 3 February 2012 seeking variation of those orders is filed and served prior to that date, until further order.
Catchwords: APPEAL - Local Court - no question of principle Legislation Cited: s 39 of the Local Courts Act 2007
s 27A of the Oaths Act 1900
s 64 of the Evidence Act 1995Category: Principal judgment Parties: Darcob Pty Ltd - Plaintiff
Equipment Trading Pty Ltd - First Defendant
Joan Shepherd - Second Defendant
John Shepherd - Third Defendant
Kandidco Pty Ltd - Fourth Defendant
Dianne Olling - Fifth Defendant
Sheldon Olling - Sixth DefendantRepresentation: J Jobson
J Clifton
Andresakis & Associates
Ghobrial Legal
File Number(s): 2010/338091
Judgment
RS HULME J: By Summons filed on 13 October 2010, the Plaintiff appeals against a decision of Magistrate Russell made on 17 September 2010. There is no application for leave so the appeal is pursuant to s 39 of the Local Courts Act 2007 and restricted to an appeal on a question of law. The grounds of appeal advanced in the Summons are as follows:-
(1) The Magistrate failed to give any or adequate reasons.
(2) The Magistrate erred in failing to assess the proceedings on the basis of agreed issues between the parties.
(3) The Magistrate erred in rejecting the Affidavit of the director of the plaintiff company.
(4) The Magistrate erred in finding a verdict for the second defendant in the absence of any evidence put forward by the second defendant in the proceedings.
(5) The Magistrate erred in finding that the obligations of the second and third defendants have been waived by the plaintiff.
(6) The Magistrate erred in finding that the plaintiff failed to mitigate his loss.
(7) The Magistrate erred in the light of the agreed issues that the plaintiff had not proved its case.
(8) The magistrate's finding is against the weight of the evidence.
The pleadings in the Local Court are not a good example of the draftsman's art but essentially the Plaintiff alleged:-
(i) A lease from the Plaintiff to Equipment Trading (as it will hereafter be convenient to refer to the First Defendant).
(ii) Guarantees by the Second and Third Defendant of the First Defendant's performance of the terms of the lease.
(iii) Equipment Trading assigned the Lease to the Fourth Defendant.
(iv) Pursuant to clause 11 of a Deed of Consent to Assignment, Equipment Trading continued to indemnify the Plaintiff and the Second and Third Defendants continued to indemnify Equipment Trading.
(v) A failure of the Fourth Defendant to pay rent.
(vi) An obligation on the Fifth and Sixth Defendants to indemnify the Fourth Defendant (presumably meant to refer to the Plaintiff in the event of the Fourth Defendant's default).
(vii) A claim that the rent due in the months of April to November 2008 was $27,133.28.
(viii) A claim for outgoings in the sum of $6,070.64 and a sum of $900.00 for painting.
The sums mentioned total $34,103.92 and it was this amount plus interest from 1 August 2008 that the Plaintiff claimed.
The Defence of the first three defendants admitted the allegations I have numbered (i) and (ii), denied that they would continue to indemnify the Fourth (sic) Defendant, did not admit the allegations I have numbered (v), (vi), (vii) and (viii) and claimed "that the Plaintiff failed in its duty to take reasonable action to avoid or reduce any damage or loss sustained".
The Second and Third Defendants were a Joan and John Shepherd. The Fourth Defendant was Kandidco Pty Ltd and the Fifth and Sixth Defendant were a Dianne and Sheldon Olling.
There was also a Cross-Claim in which Equipment Trading, Joan and John Shepherd as Cross-Claimants claimed against Darcob and Dianne and Sheldon Olling. It is clear that the reference to Darcob as the First Cross-Defendant was erroneous and it should have been Kandidco. Indeed, counsel for the Defendant admitted as much. The Cross-Claim alleged a contract for sale of a business, and obligations that the purchaser under the contract was obliged to comply with the obligation of the lessee, viz. Equipment Trading and to indemnify the latter against claims arising out the Lease.
The Cross-Claim also alleged that Dianne and Sheldon Olling agreed to indemnify Equipment Trading and Joan and John Shepherd and went on to allege that:-
The Cross Defendants must indemnify the Cross-Claimant for the sum of $27,133.28 plus outgoings of $6,070.64 plus $900.00 painting.
The Statement of Claim was dated 4 November 2008, the Defence 27 March 2008, although the Affidavit verifying was dated 23 March 2009. The Cross-Claim was dated 20 May 2009.
On 19 October 2009, a Notice of Motion was filed on behalf of Equipment Trading, Joan and John Shepherd seeking "default judgment for liquidated claim". Although the First Cross-Defendant was still named as Darcob, the persons affected by the orders sought were specified to be Kandidco Pty Ltd and Dianne and Sheldon Olling. An Affidavit of John Shepherd in support said he was a director of Equipment Trading, that the Cross-Claim had been served on the Cross-Defendants, "the amount owing to me at the time of commencement of the proceedings in respect of the cause of action for which the proceedings were commenced was $39,093.63". This sum was particularised as:-
Claim $34,103.92
Interest $4,036.41
Filing fees $378.00
Solicitor's costs $575.30
The Notice of Motion had endorsed on it a "Minute of Judgment", listing the above items and amounts save that the amount for interest was $5,501.61 and a total amount of $40,803.53 was stated. The Minute seems to bear a facsimile signature with a notation "date of Judgment 24/11/09".
The Minute was drawn to Magistrate Russell's attention, her Honour noting that the default judgment was only "against the Second and Third Cross-Claimants" (sic). Her Honour was informed that Kandidco had been deregistered.
There was no appearance for the Fourth to Sixth Defendants and counsel for the Plaintiff said that the Plaintiff discontinued against them. Counsel for the Defendant observed:-
The Defendant's case will be, well the case of the First, Second and Third Defendants, is that the Plaintiff was unable to succeed against any of them or any one of them on the basis the Plaintiff has not mitigated its loss. The Second and Third Defendant say in the alternative that the documents, well document, being the assignment of the lease to another party has the effect that the guarantees originally entered into by the Second and Third Defendants no longer continue beyond that point.
Soon thereafter, the Magistrate asked twice if she could "get a statement of facts and issues". Not having received a response to those questions, she asked and was told by counsel for the Plaintiff that the Plaintiff relied on the Statement of Claim and, inferentially, by counsel for the First to Third Defendants that they relied on the Defence filed on 27 March.
Although the transcript does not record it being handed up, after a short adjournment, her Honour said she had had access to the Statement of Agreed Facts and Issues, asked that they be signed and proceeded:-
As I understand it from the statements of facts and issues together with the pleading, that the issue so far as the first defendant goes is only the question of whether the plaintiff has mitigated its loss, is that right?
And a little later:-
So far as the second and third defendants, both that question and the question of the effect of the assignment on the guarantee, is that right?
Counsel for the Defendant answered both of these questions in the affirmative.
The Statement of Agreed Facts and Issues was in terms:-
Agreed Facts
1. The 1 st Defendant leased the premises from the Plaintiff and the Second and Third Defendants guaranteed the Lease.
2. The First Defendant sold its business to Kandidco Pty Ltd and assigned the Lease to that company. The Second and Third Cross-Defendants guaranteed the obligations of Kandidco Pty Ltd to the Plaintiff.
Issues
1. Has the Plaintiff mitigated its loss so as to be able to maintain a claim against the 1 st , 2 nd and Third Defendants?
2. Did the Guarantee between the 2 nd and 3 rd Defendants and the Plaintiff continue beyond the assignment of the Lease?
Soon after, her Honour recorded that an affidavit of Mr Georgaklis had been handed up. Paragraph [8] was not pressed and otherwise the document admitted without objection as Exhibit 3. Counsel for the Plaintiff observed that that was the Plaintiff's case but her Honour was informed that Mr Georgaklis was then required for cross-examination. An interpreter and Mr Georgaklis were then sworn. The Plaintiff's counsel asked him no more than for his name, address and occupation and cross-examination then commenced.
Early in the cross-examination, Mr Georgaklis disclosed that, before he swore the affidavit, it had been interpreted to him, that the contents were true and correct and that he was a director of Darcob. It seems then to have been accepted that there was nothing earlier than Mr Georgaklis' oral evidence to alert the Defendant to the fact the Affidavit had been interpreted. Counsel for the Defendant submitted that his agreement to the Affidavit being read was, therefore, vitiated and the Magistrate went on to reject the document. Counsel for the Plaintiff was invited to tender it again.
Counsel said he preferred to first tender a certificate of an interpreter, Mary Prsa. This was objected to but admitted by her Honour on a voir dire. There was no attempt to provide a certificate by the person before whom the Affidavit purported to have been sworn, viz. Peter Scouteris, solicitor. There followed debate on the admissibility of the Affidavit. The Plaintiff's counsel appears to have formed the view that the debate was not going well for him and he applied for the proceedings to be adjourned. This application also was opposed and refused.
Counsel for the Plaintiff then recalled Mr Georgaklis who gave evidence to the effect that a document had been read to him in the Greek language, that after that reading he had signed it and the contents were true and correct. The document was then tendered.
Again objection was made. There was then what was treated as a second voir dire hearing in the course of which it appeared that the document bore a certificate of an interpreter, Polydoros Polydoropoulos, to the effect that he read the contents to the deponent in Greek and it appeared that the deponent understood it. The document itself revealed that the person before whom it was sworn was counsel for the Plaintiff.
The document appears to have been the same one tendered in the morning which had been returned to the Plaintiff's counsel by her Honour's associate in her Honour's absence. Again there was debate, counsel for the Defendant contending that it did not comply with the terms of UCPR 35.7 or s 27A of the Oaths Act 1900.
Her Honour then rejected this Affidavit also, concluding that it complied with neither of these provisions. Having dealt with s 27A, her Honour continued:-
"What purports to be a compliance with s 27A of the Oaths Act or purports to be a certificate referred to in s 27A of the Oaths Act for these purposes is a notation on the side of the third page of the Affidavit which says the following:
"Signed pursuant to s 27A of the Oaths Act 1900, Parramatta Court, 4/12/09 Polydoropoulos interpreter NAATI level 2 accreditation number 12532. I read the content to the deponent in Greek out loud and it appeared that the deponent understood the Affidavit,"
and it would appear to have the signature "Polydoropoulos" beneath it.
That is not a certificate, in my view, which complies with s 27A of the Oaths Act. The person before whom the Affidavit was sworn - I withdraw that. The person before whom the Affidavit was made appears to be James Jobson of 1/270 Pitt Street, Sydney, barrister. The document is not otherwise, it seems to me - does not otherwise comply either - it says that it was read - that the content was read to the deponent. It doesn't say that it was read in the presence of the authorised person. It doesn't go on to say that the deponent subscribed the affidavit by signature or mark in the presence of the authorised person.
Sub-rule (b), "the Court can otherwise be satisfied that the Affidavit was read to the deponent in the presence of the person before whom it was made and that it appeared to that person that the deponent understood the Affidavit." As I understand it, what is relied upon for that purpose is the notation on the side of the Affidavit which is signed by Polydoropoulos. Nothing further with respect to that requirement is in evidence, as I understand the situation, with respondent to the second affidavit.
I can't be satisfied that r 35(7) has been complied with. As I read the rule, the affidavit then may not be used."
After some further matters, again not presently relevant, the Plaintiff then tendered a number of documents without objection. They included the Lease, some correspondence commencing on or about 23 May 2008 from real estate agents enclosing advertisements for the subject property and three documents of the Plaintiff numbered 192677, 192679 and 192680.
Invoice 192677 appears to be undated but records that it is for "Being Dep on 68 Parker Street Kingswood to rent 2 year By 2 year option $500 cash. Dep".
Invoice 192678 dated 18 March 2008 records the receipt of rent of $3,000 for 68 Parker Street and notes "paid to 18.4.08". Invoice 192679 dated 19 April 2008 bears the notation:-
Rent 68 Parker St, Kingswood
18-4-08 - 18-5-08
Cheque N.1307 $3500
Invoice 192680 records that it is for a "Refund 2 wks rent" and bears a date 5 May 2008.
In his rejected Affidavit, Mr Georgaklis had said that the last payment of rent from the Fourth Defendant paid the rent up to 28 February 2008 and that:-
After this period the premises were leased out on short term occupancy to Grand Motor Prix (who) paid rental of total of $5,250. This brought payment up to April 2008. The tenant did not continue to sign a lease.
How the figures in the invoices are to be reconciled with the figure of $5,250 referred to in Mr Georgaklis' affidavit is not apparent.
The Defendant then read an affidavit of John Shepherd sworn 26 August 2009. In that affidavit, Mr Shepherd said that he was a Director of Equipment Trading and that a contract for the sale of the business of Trading Equipment had been exchanged on or about 20 October 2006 and settled on or about 7 December 2006. Mr Shepherd also deposed to having had a number of conversations with Mr Georgaklis. He said that the following conversation occurred in late February or early March 2008:-
Mr Shepherd: Looks like Sheldon has left? I can rent back the space if you want, I'll give you $3,000 per month.
Mr Georgaklis: No, I want $4,500 a month.
Mr Shepherd: No way. I was paying $3,000 a month.
Mr Georgaklis: No, I want more. I've got someone else already willing to pay that amount and to move in.
Mr Shepherd deposed to a second conversation having occurred in about July 2008 when he said he had noted that another tenant had moved out:-
Mr Shepherd: We could use the premises, John. Look, another tenant has moved out. Look at all the money you have lost in unpaid rent.
Mr Georgaklis: I don't need the money. I'm very wealthy.
According to Mr Shepherd's evidence, there was a third conversation in about August:-
Mr Shepherd: John, what are you going to do with the premises?
Mr Georgaklis: Do you want to buy from me? You can have it for $700,000. Actually, you probably could not afford it.
When the hearing of the matter was resumed on 19 April 2010, Mr Shepherd was cross-examined. I do not regard this further evidence as presently relevant.
The parties made their submissions to Magistrate Russell in writing. The Plaintiff took exception to the entitlement of the Defendant to contend that the Plaintiff had not established the non-payment of rent and outgoings which it alleged and the matter was re-listed. Submissions were made, including reference to the passage I have set out in [14] above and her Honour indicated further submissions could be provided. There was no application on behalf of the Plaintiff to adduce further evidence or have the matter yet again listed for that purpose.
On 17 September 2010, her Honour delivered her reasons. Inter alia, she observed:-
(1) Although there were significant deficiencies in the pleadings, the hearing of the matter proceeded on the basis reflected in the Statement of Agreed Facts and Issues.
(2) The defendants should not be permitted to resile from that basis on which the hearing proceeded.
(3) Clause 13.5 of the Lease provided for some circumstances when a guarantor was liable to the landlord but the landlord "must do every reasonable thing to mitigate those losses and try to re-lease the property to another tenant on reasonable terms".
(4) The Statement of Facts and Issues does not include as an issue the non-payment of rent but nor does it include any reference to the non-payment of rent as a fact agreed between the parties.
(5) It was for the Plaintiff to establish that the rent had not been paid by Kandidco Pty Ltd.
(6) The Plaintiff had not established that there was default in that regard so as to make the guarantors liable.
(7) "In any event, the uncontradicted evidence is that the Plaintiff failed to take advantage of an offer made to rent the premises for the same amount as the Lease between the Plaintiff and the First Defendant provided. On the uncontradicted evidence, that offer was made when the premises were first seen to be unoccupied."
Her Honour then directed a verdict for the Defendant with costs as agreed or assessed.
It is unnecessary to deal with all of the grounds of appeal.
Ground 2
There is a deal to be said for the view that this ground is made out. Defence counsel's agreement in her Honour's suggestion that the only issue so far as the First Defendant as concerned was the question of mitigation was something upon which the Plaintiff's counsel was entitled to rely unless and until there was an express repudiation of or retreat from it. It may be accepted that the Statement of Facts and Issues does not refer to the topic but this does not affect the conclusion just expressed.
However, when the matter was re-listed after it became apparent that the Defendant's submissions canvassed the question of whether rent had not been paid, the legal representative of the Plaintiff then appearing did not seek the opportunity of calling further evidence or suggest that the Plaintiff's case had been conducted under some misapprehension. However, I do not need to reach a final conclusion on this ground.
Ground 3 - the admissibility of the Affidavit of Mr Georgaklis
Rule 35.7 of the Uniform Civil Procedure Rules provides:-
An affidavit made by a blind or illiterate person may not be used unless:
(a) the affidavit bears a certificate referred to in section 27A of the Oaths Act 1900, or
(b) the court is otherwise satisfied:
(i) that the affidavit was read to the deponent in the presence of the person before whom it was made, and
(ii) that it appeared to that person that the deponent understood the affidavit.
So far as is presently relevant, the Oaths Act 1900 provides in s 27A:-
If it appears to the person before whom an affidavit is made ( "the authorised person" ) that the person making the affidavit ( "the deponent" ) is blind or illiterate, the authorised person must certify, in or below the jurat:
(a) that the affidavit was read to the deponent in the presence of the authorised person, and
(b) that it appeared to the authorised person that the deponent understood the affidavit, and
(c) that the deponent subscribed the affidavit (by signature or mark) in the presence of the authorised person.
Pursuant to s 27 of that Act, any leg al practitioner is authorized to take an affidavit.
Because the certificates attached or endorsed on the affidavits of Mr Georgaklis were from the interpreters and neither of those affidavits bore a certificate from the person before whom they were respectively sworn, they did not fulfil the requirements of Rule 35.7(a).
Nor was there evidence put before the Magistrate that in express terms fulfilled the requirements of Rule 35.7(b). At the risk perhaps of feeling he would then have to withdraw, Mr Jobson could possibly have provided such evidence but he did not.
On the other hand, there were a number of factors which argue in favour of her Honour being satisfied, albeit as a matter of inference, as required by Rule 35.7(b):-
(i) There was Mr Georgaklis' evidence that the document had been read to him, that after that reading he had signed it and the contents were true and correct.
(ii) There was the certificate of the interpreter, the terms of which I have detailed.
(iii) There was the debate which had occurred earlier in the day involving the terms of Rule 35.7
(iv) There was the inherent likelihood that the Plaintiff's counsel would not have witnessed the affidavit and then sought to use it unless he was satisfied that it had been read in his presence and apparently understood.
Of course, in light of the Plaintiff's counsel failing to give express evidence of these matters, the inference was one which did not have to be drawn. However, this was not the way in which her Honour approached it. Rather, did she refer to the certificate of the interpreter annexed to the second affidavit, observed that nothing further was in evidence and said "I can't be satisfied that r 35(7) has been complied with". By so doing, her Honour applied the wrong test and erred in law.
Furthermore, the document was also admissible under s 64 of the Evidence Act 1995. So far as presently relevant, that section provides:-
64(1) This section applies in a civil proceeding if a person who made a previous representation is available to give evidence about an asserted fact.
...
(3) If the person who made the representation has been or is to be called to give evidence, the hearsay rule does not apply to evidence of the representation that is given by:
(a) that person, or
(b) a person who saw, heard or otherwise perceived the representation being made.
(4) A document containing a representation to which subsection (3) applies must not be tendered before the conclusion of the examination in chief of the person who made the representation, unless the court gives leave.
The order in which events occurred is set out above and need not be repeated. It is clear that the tendering of the affidavit that occurred after Mr Georgaklis was recalled was after the Plaintiff's counsel had asked him all the questions that formed part of his examination in chief.
However, in this connection, two other matters should be mentioned. Firstly, the expression "may not be used" in Rule 35.7 is clearly directed to the use of the document as an affidavit. It is inconceivable that those words, appearing as they do in a rule directed solely to the topic of affidavits, could have been intended to prohibit all use, e.g. in cross-examination. Nor is there reason to regard the rule as effectively circumscribing the operation of s 64 of the Evidence Act.
The second matter is this. Although argument as to the admissibility of the document under Rule 35.7 and s 27A had, on and off, occupied many pages of transcript, nowhere was s 64 of the Evidence Act referred to. Indeed, at one stage her Honour having referred to s 27A of the Oaths Act, asked counsel for the Plaintiff whether that was the basis on which he was trying to adduce the evidence and received the reply, "Your Honour, I'm adducing that evidence as an affidavit sworn by the plaintiff today".
However, counsel for the Plaintiff had tendered it. Her Honour's decision that it "could not be used", while undoubtedly its terms were inspired by the words of Rule 35.7, was wrong. Having been tendered, the document should have been admitted into evidence.
Reference should also be made to s 56 of the Civil Procedure Act 2005 which, so far as is presently relevant, provides:-
(1) The overriding purpose of this Act and of rules of court, in their application to a civil dispute or civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings.
(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.
Mr Georgaklis had sworn that the contents of the affidavit were true and correct. In the face of that statement, it was making a mockery of s 56 for her Honour to exclude it.
The default judgment that Equipment Trading obtained is a second matter to which attention must be directed. Although it was not formally tendered in the proceedings before her Honour, it was a matter of record and, as has been said, her Honour's attention was drawn to it. As a judgment of the Court and in the same proceedings it should not have been ignored.
The first item included in the judgment sum was "Claim $34,103.92", viz. the precise amount in the Plaintiff's claim, and reference to the Cross Claim itself would have made clear that the claim arose out of Equipment Trading's obligations under a continuing lease and a clause in the contract for sale of a business that bore an identical number to a clause in a similarly described contract referred to in the Defence. The coincidence of these features with the Plaintiff's claim, combined with the fact that the Defence of the First, Second and Third Defendants to that claim did not allege payment, also provided strong evidence that the Plaintiff had not been paid the amount it claimed. Her Honour did not mention this topic in her reasons.
Ground 6 - the Magistrate erred in finding that the Plaintiff failed to mitigate its loss
Her Honour's second reason for dismissing the Plaintiff's claim was, as I have set out above:-
In any event, the uncontradicted evidence is that the Plaintiff failed to take advantage of an offer made to rent the premises for the same amount as the Lease between the Plaintiff and the First Defendant provided. On the uncontradicted evidence, that offer was made when the premises were first seen to be unoccupied.
Although her Honour had earlier referred to clause 13.5 of the lease between the parties, the passage quoted, which contains the whole of her Honour's reasoning on that topic, contains no reference to the fact that both under the general law and under clause 13.5 between the parties, a party's obligation to mitigate its loss is merely to take reasonable steps to do so. The inevitable inference is that her Honour did not direct attention to this limitation when considering her second reason.
The three invoices which were tendered make it clear that at some stage in early 2008, the Plaintiff did seek to mitigate any loss it suffered in consequence of non-payment of rent under the lease. The correspondence from real estate agents indicates further efforts in this connection were being made in and about May. Mr Georgaklis' rejected Affidavit contains further evidence on the topic. Whether in light of Mr Shepherd's evidence these efforts were reasonable was a matter which her Honour did not, but should have, addressed. This ground is also made out.
The Defendant submitted that, if I should conclude as I have, i.e. that her Honour's decision was affected by error, it would be in the interests of the just, quick and cheap resolution of the proceedings to finalise the matter in this Court. With some qualification, the Plaintiff also suggested that could be done. However, any judgment upon the issue of mitigation involves decisions of fact which, given the nature of the appeal, it is not appropriate for me to embark upon. In these circumstances, the appropriate orders involve allowing the appeal and remitting the matter to the Local Court.
The question of costs arises. It is clear that those representing the Plaintiff have contributed to some of the problems which have arisen. There was the failure to ensure that Mr Georgaklis' Affidavits met the requirements of s 27A of the Oaths Act and Rule 35.7. There was the failure to press the admissibility of the Affidavit under s 64 of the Evidence Act .
On the other hand, counsel for the Defendant contributed to the error that occurred. It was at least in part arguments he advanced in strong opposition to the admissibility of a clearly admissible document that led to it being rejected. In these circumstances and in light of some others to which I refer below, the appropriate order for costs is that each party should bear its own costs of the hearing in this Court. Similar considerations affect most of the costs in the Local Court, in particular the costs of the hearing days and submissions in the Local Court and to some extent the costs of preparation of Mr Georgaklis' affidavit. In the result, I am disposed to make the same order as to the costs of the hearing and submissions, leaving to that Court to deal in a re-hearing or otherwise with the balance of costs in that Court.
However, I should record that costs were not the subject of full argument in the proceedings before me. In that situation it is appropriate to stay the costs order for a time so as to provide either party with an opportunity to seek to have what I propose altered.
Before I leave the matter, there are some other matters to which I should refer. Counsel for the Defendant and her Honour made reference to s 56 of the Civil Procedure Act and the decision in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 in criticising the conduct on the Plaintiff's side of the record. It would have been preferable if they themselves had paid more attention to the principles set out in those places.
It is obvious that counsel for the Defendant sought to contest the proceedings with every point he could think of, including that counsel for the Plaintiff should withdraw because he was a witness in consequence of his having witnessed Mr Georgaklis' affidavit and because Mr Sheppard gave evidence that he felt intimidated by the Plaintiff's counsel. The Defendant's counsel also made application under rule 12.7 on the ground that the time taken in consequence of the problems with Mr Georgaklis' affidavit meant that the Plaintiff had not prosecuted the proceedings with due despatch and they should be dismissed. Counsel for the Defendant also submitted that, on account of some of these matters, the Plaintiff's counsel should personally pay costs.
Counsel are entitled to fight hard on their client's behalf. However that does not amount to a licence to take points that on any reasonable view are hopeless and that is what occurred in this case. Her Honour as I have said, failed to take account of s 56 in rejecting the tender of Mr Georgaklis' Affidavit. Surprisingly, she also seemed to think that there was some problem in acquiescing in a request by the Plaintiff's counsel to defer a decision on his adjournment application when he indicated that he had a further affidavit from Mr Georgaklis that he clearly thought would make any adjournment unnecessary. In my view it is clear that the matter should be reconsidered by another magistrate de novo.
Accordingly, the orders that seem to me appropriate are:-
(i) The appeal is allowed.
(ii) The orders made by Magistrate Russell herein on 17 September 2010 are set aside.
(iii) The proceedings are remitted to the Local Court to be decided by some Magistrate other than Magistrate Russell.
(iv) Each party is to pay its own costs of proceedings in this Court and its own costs of the hearing before, and submissions to, Magistrate Russell in the Local Court.
(v) Otherwise, the costs of proceedings in the Local Court are to be dealt with as an incident of the final determination of the proceedings in that Court.
(vi) Stay orders (iv) and (v) until Friday 27 January 2012 or, if a Notice of Motion returnable before me on Friday 3 February 2012 seeking variation of those orders is filed and served prior to that date, until further order.
Decision last updated: 21 December 2011
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