Harrison v Combined Towing Services Pty Ltd

Case •

[2023] NSWSC 1524

•

08 December 2023

No judgment structure available for this case.

Supreme Court


New South Wales

Medium Neutral Citation: Harrison v Combined Towing Services Pty Ltd [2023] NSWSC 1524
Hearing dates: 7 December 2023
Date of orders: 8 December 2023
Decision date: 08 December 2023
Jurisdiction:Common Law
Before: Basten AJ
Decision:

(1) Pursuant to s 40(2) of the Local Court Act 2007, grant the plaintiff leave to appeal from the decision of the Local Court of 27 January 2022, striking out the plaintiff’s proceeding in that Court.

(2)   Allow the appeal and set aside the orders made in the Local Court.

(3)   Remit the matter to the Local Court for determination of the defendant’s notice of motion of 25 October 2021, if pursued as a preliminary matter, or otherwise for determination of the plaintiff’s claim.

(4)   Order that the defendant pay the plaintiff’s costs in this Court.

Catchwords:

CIVIL PROCEDURE – limitation period – action in conversion – person under a disability – prisoner in custody seeking damages for vehicles disposed of after his arrest – fraudulent concealment – statements by principal of defendant as to fate of vehicles – application of Limitation Act 1969 (NSW), ss 52, 55 – whether limitation defence appropriately dealt with as preliminary issue

CIVIL PROCEDURE – appeal from Local Court – question of law – dismissal of proceedings without hearing on merits – whether interlocutory order – whether leave required – whether criteria for grant same as for appeal by way of rehearing to Court of Appeal

CIVIL PROCEDURE – appeal from Local Court – error of law established – magistrate failed to make necessary findings of fact – whether findings can be made on appeal

Legislation Cited:

Felons (Civil Proceedings) Act 1981 (NSW), s 4

Interpretation Act 1987 (NSW), s 35

Limitation Act 1969 (NSW), ss 11, 14, 21, 52, 53, 55

Local Court Act 2007 (NSW), ss 39, 40

Mental Health Act 2007 (NSW), Sch 6, Pt 2, cl 4

Supreme Court Act 1970 (NSW), s 101

Cases Cited:

Adrenaline Pty Ltd v Bathurst Regional Council (2015) 97 NSWLR 207; [2015] NSWCA 123

Be Financial Pty Ltd atf Be Financial Operations Trust v Das [2012] NSWCA 164

C & J Clark Ltd v Inland Revenue Commission [1973] 1 WLR 905

Murgolo v AAI Ltd t/as AAMI [2019] NSWCA 295

Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513; [1997] HCA 38

Re Refugee Review Tribunal; ex parte Aala (2000) 204 CLR 82; [2000] HCA 57

Rose v Tunstall [2018] NSWCA 241

The Age Company Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26

The Queen v Khazaal (2012) 246 CLR 601; [2012] HCA 26

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55

Texts Cited:

M Leeming, Resolving Conflicts of Laws (The Federation Press, 2011)

Category:Principal judgment
Parties: Graham Loughlan Harrison (Plaintiff)
Combined Towing Services (NSW) Pty Ltd (Defendant)
Representation:

Counsel:
M S White SC (Plaintiff)
B Wilson (Defendant)

Solicitors:
Hall & Wilcox (Defendant)
File Number(s): 2022/00212412
Publication restriction: N/A
 Decision under appeal 
Court or tribunal:
Local Court
Jurisdiction:
Civil
Date of Decision:
27/01/2022
Before:
Greenwood LCM
File Number(s):
2020/00254240

JUDGMENT

  1. BASTEN AJ: On 27 January 2022, Magistrate Greenwood struck out proceedings brought in the Local Court by the plaintiff, Graham Loughlan Harrison, against the defendant seeking to recover the value of two motor vehicles which had been held by the defendant and then disposed of. The proceedings were dismissed on the motion of the defendant on the basis that the limitation period fixed by either s 14 or s 21 of the Limitation Act 1969 (NSW) had expired.

Leave to appeal

  1. The plaintiff’s appeal identified error on two questions of law as to the proper construction of the Limitation Act, and a claim of procedural unfairness. Each ground fell within the terms of s 39(1) of the Local Court Act 2007 (NSW), under which there should have been an appeal as of right. Because the plaintiff’s case was that the magistrate failed to address the relevant factual criteria, the appeal does not raise “a question of mixed law and fact” within s 40(1), which would require a grant of leave to appeal. However, the defendant submitted that, the proceeding having been dismissed without a hearing on the merits, the judgment below was interlocutory, and leave is therefore required under s 40(2) of the Local Court Act.

  2. The defendant’s argument should be accepted. In Murgolo v AAI Ltd t/as AAMI [1] the Court of Appeal accepted a common position of the parties that the dismissal of the proceedings in the Supreme Court, based on a defence under the Limitation Act, gave rise to an interlocutory judgment, which required leave under s 101(2)(e) of the Supreme Court Act 1970 (NSW). That provision is not readily distinguishable in its language from s 40(2) of the Local Court Act. Nevertheless, this does not require that leave need be determined as a preliminary matter, where there has been full argument on the appeal, unless refusal of leave has been identified as the appropriate course. That was not this case.

    1. [2019] NSWCA 295 at [4], [71], [75].

Procedural background

  1. It may be assumed that the plaintiff’s cause of action in conversion arose when the defendant disposed of each of the vehicles. The first, a Mercedes panel van, was (on the evidence presently available) sold by the defendant on 17 July 2014. The second vehicle, a Suzuki motorcycle, was sold no later than 2 January 2015. On the basis that the limitation period continued to run without interruption, the latest date on which the plaintiff could have commenced proceedings in relation to the first vehicle was 17 July 2020, and in relation to the second vehicle, 2 January 2021. However, the statement of claim in the Local Court, which required a grant of leave under the Felons (Civil Proceedings) Act 1981 (NSW) (“Felons Act”), was not filed until 23 March 2021.

  2. The magistrate treated the statement of claim as relying on causes of action in negligence, detinue and conversion and referred to both s 14 of the Limitation Act (providing for the general limitation period in tort) and s 21 (providing for successive wrongs to goods). Nothing turns on which was appropriate as each provides that the limitation period runs from the date when the cause of action first accrues to the plaintiff and each fixes a limitation period of six years from that date.

  3. The plaintiff, appearing without representation before the Local Court, relevantly submitted that (i) his claim had been lodged in time, or (ii) the limitation period had been suspended because he was a person under a disability, or (iii) the defendant had fraudulently concealed the cause of action. As, by the time of the hearing of the defendant’s motion it was clear that the vehicles had been disposed of more than six years before the proceedings were commenced, (i) may be disregarded.

  4. The plaintiff was arrested in 2013, following which his vehicles were impounded by the police for the purposes of the criminal investigation and were held by the defendant until provided by the police with a release notice after which the plaintiff was to arrange for their recovery. The plaintiff remained in custody pending his trial and continues to be held in custody pursuant to his sentencing to imprisonment for a lengthy period. The plaintiff having been convicted of a serious indictable offence, is in custody as a result of that conviction, for the purposes of s 4 of the Felons Act. Accordingly, he was unable to commence civil proceedings except by leave of the Court granted on his application.

  5. According to his affidavit, dated 13 January 2022 and filed in the Local Court, during 2015 the plaintiff had a private solicitor (Grays Legal) assisting him. Up until July 2015 inquiries directed to Mr Willis, the principal of the defendant, had elicited advice that the vehicles had deteriorated and had been destroyed. However, Ms Gray made other inquiries which revealed that the vehicles were still registered. On 7 July 2015 she wrote to Mr Willis stating:

“We believe that the disposal of the vehicles and the manner that they [were] disposed [of] amounted to fraud and as a consequence a report will now be made to the New South Wales Police, civil action in detinue will now be initiated in the New South Wales Local Court.”

  1. No further steps were taken by Ms Gray, as, according to the plaintiff’s affidavit, she “unexpectedly ceased most non-criminal law as she wound down her NSW practice before moving to Darwin”.

  2. By 2018, the plaintiff had obtained some assistance from Ms Baxter, a solicitor, working with the Prisoner’s Legal Service at the Legal Aid Commission. On 31 January 2019, Mr Willis sent a lengthy email to Ms Baxter at the Prisoner’s Legal Service maintaining that the vehicles had been “disposed of on 22/05/15 to wreckers”. In his affidavit, the plaintiff stated that Ms Baxter had informed him of that statement; the amended statement of claim filed on 26 April 2021 alleged the statement, including the date of disposal. Although, as senior counsel for the plaintiff submitted, allegations in the pleading should have been accepted for the purposes of the strike-out application, he sought to tender a letter of 1 February 2019 from Ms Baxter to the plaintiff referring to the conversation and advising that civil proceedings could be commenced against the defendant up until 21 May 2021. That letter was not before the Local Court, but its tender may be accepted in this Court with its relevance limited to the application for leave to appeal. It is, in any event, of limited assistance.

  3. On 5 July 2020, the plaintiff sought leave to file the proceedings pursuant to the Felons Act. Leave was granted on 18 September 2020.

  4. The plaintiff also sought to rely upon an affidavit filed in this Court on 26 October 2022 in support of a number of procedural orders, including an application for pro-bono assistance, which was granted. The affidavit contained further information in relation to the steps taken to obtain information and legal assistance during various periods. For reasons which will be explained further below, it is not relevant on this application and its tender is refused.

  5. The documents contained in the Court Book also included a transcript of the interlocutory hearing before N Adams J on 1 December 2022. That material was irrelevant and should also be excluded.

Grounds of appeal

  1. Grounds 1 and 2 in the further amended summons alleged that the magistrate was in error in not finding that the plaintiff was under a disability and that the running of the limitation period was suspended throughout the time from the accrual of the cause of action until the commencement of the proceedings. Ground 3 alleged that the magistrate failed to consider and apply s 55(1)(b) of the Limitation Act. Ground 4 alleged a failure to accord the plaintiff procedural fairness.

  2. It is convenient to deal with grounds 1 and 2 (relating to the reasoning of the magistrate with respect to s 52 of the Limitation Act) together, then ground 3 (relating to s 55 of the Limitation Act). If either or both of those grounds were to be upheld, the allegation in ground 4 (procedural unfairness) would not need to be resolved. However, as it is relevant also to the issue of leave to appeal, it should be addressed. In addition it provides part of the explanation for the other alleged errors.

Grounds 1 and 2 – person under a disability

  1. Grounds 1 and 2 challenged the finding that the plaintiff was not a person under a disability for the purposes of s 52(1) of the Limitation Act. Section 52 reads as follows:

52   Disability

(1)   Subject to subsections (2) and (3) and subject to section 53, where—

(a)   a person has a cause of action,

(b)   the limitation period fixed by this Act for the cause of action has commenced to run, and

(c)   the person is under a disability,

in that case—

(d)   the running of the limitation period is suspended for the duration of the disability, and

(e)   if, but for this paragraph, the limitation period would expire before the lapse of three years after—

(i)   the date on which the person last (before the expiration of the limitation period) ceases to be under a disability, or

(ii)   the date of the person’s death,

(whichever date is the earlier), the limitation period is extended so as to expire three years after the earlier of those dates.

(2)   This section applies whenever a person is under a disability, whether or not the person is under the same or another disability at any time during the limitation period.

(3)   This section does not apply to a cause of action to recover a penalty or forfeiture or sum by way of penalty or forfeiture, except where the person having the cause of action is an aggrieved party.

  1. Critical to the operation of this provision is the definition of a person under a disability in s 11(3) of the Limitation Act:

11   Definitions

…

(3)   For the purposes of this Act a person is under a disability—

(a)   while the person is under the age of eighteen years, or

(b)   while the person is, for a continuous period of twenty-eight days or upwards, incapable of, or substantially impeded in, the management of his or her affairs in relation to the cause of action in respect of the limitation period for which the question arises, by reason of—

(i)   any disease or any impairment of his or her physical or mental condition,

(ii)   restraint of his or her person, lawful or unlawful, including detention or custody under the Mental Health Act 1958,

(iii)   war or warlike operations, or

(iv)   circumstances arising out of war or warlike operations.

  1. The whole of the magistrate’s reasoning with respect to the operation of s 52 is found in the following passage: [2]

“HER HONOUR: Turning to s 52 – he relies on that as well, of the Limitation Act – and that refers to a person with a disability. Now, the Court can’t just go to a particular section of legislation; the Court has to read the legislation in its entirety. Now, what s 52 is is under a division of the Act called “disability, confirmation, fraud and mistake”, and really what s 52 does is say that if a person’s under a disability the limitation period is suspended. But the action – this section needs to be read in its entirety; the entirety of the Act. When one turns to s 53 – because s 52, if I am not mistaken, is subject to s 53 – s 53 is talking about a person who is, for example, under the Mental Health Act or has a curator or is under the Protective Division of the Supreme Court. I am not convinced s 52 is relevant here either, and there’s been no case law provided to me to suggest it is.”

2. Local Court Tcpt, 27/01/2022, p 16(35)-(45).

  1. It is apparent that the magistrate dismissed the plaintiff’s attempt to rely upon s 52, by treating the phrase “subject to s 53” as meaning that s 52 only applied if s 53 was engaged. However, that is not what the phrase means here.

  2. The words “subject to” may be understood as a relational term, as described by French CJ in The Queen v Khazaal. [3] The phrase “subject to” creates a hierarchy, by indicating which of two provisions prevails in a case of conflict or inconsistency. As Leeming JA noted in Adrenaline Pty Ltd v Bathurst Regional Council,[4] the words are a standard way of making clear that the unqualified provision (in this case s 53) prevails. [5] However, as McHugh J noted in a constitutional context, the use of that expression “does not itself mean that there is always a conflict between” the two provisions. [6] McHugh J continued, quoting Megarry J in C & J Clark Ltd v Inland Revenue Commission,[7] “[w]here there is no clash, the phrase does nothing: if there is collision, the phrase shows what is to prevail”.

    3. (2012) 246 CLR 601; [2012] HCA 26 at [31].

    4. (2015) 97 NSWLR 207; [2015] NSWCA 123 at [56].

    5. See also M Leeming, Resolving Conflicts of Laws (The Federation Press, 2011) pp 50-51.

    6. Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 580; [1997] HCA 38.

    7. [1973] 1 WLR 905 at 911.

  3. In some circumstances, “subject to” may render all aspects of a provision subject to compliance with another provision. That means that the first provision will apply if, and only if, the second provision is complied with. Alternatively, the phrase may subordinate one provision to the operation of another, if the latter is engaged, but not otherwise. The latter operation is the relevant one with respect to s 52(1). The phrase “subject to” appears twice in the chapeau, first by reference to subs (2) and (3). Subsection (2) deals with a person who is under more than one disability; subs (3) deals with an action to recover a penalty or forfeiture. Those two provisions were not engaged in the present case and did not preclude the application of subs (1). The magistrate did not suggest otherwise. However, there is no reason to suppose that the phrase “subject to” had some different operation when used for a second time, namely in relation to s 53. Section 53 provides for an exception to the operation of the suspension under 52(1) in the case of a person having a “curator” as defined in that section. It provides that where a person under a disability may have a cause of action against another person, the latter may serve a “notice to proceed” on the curator, which notice has the effect of the prospective claimant ceasing to be under a disability: s 53(3). Self-evidently, it cannot apply to a person under a disability who does not have a “curator”. The only persons who can be affected by s 53, are those referred to in the limb of par (b)(ii) of the definition of a person under a disability, dealing with persons in detention or custody under the Mental Health Act. That was not the plaintiff.

  4. The plaintiff did not have a curator, but if he had had, the defendant would have been required to give notice to proceed to the curator in order for the person to cease being under a disability. Section 53 has no operation in relation to a person who relies upon parts of the definition of “person under a disability” not engaging any provision of the Mental Health Act 2007 (NSW). [8]

    8. The Mental Health Act 1958 was repealed and replaced, first in 1990 and then in 2007. Although the Limitation Act was not amended by Sch 7 to the Mental Health Act 2007 (NSW), references in s 53 are to be read as references to equivalent provisions in that Act, pursuant to Sch 6, Pt 2, cl 4(2) and (3) to that Act.

  5. It follows that the magistrate was in error, on a point of law, in placing reliance upon the operation of s 53 and concluding that s 52 could not be relied on by the plaintiff. As a consequence of that error the magistrate did not address the questions of whether in fact s 52 was engaged in relation to the plaintiff and, if so, for what period.

Ground 3 – fraudulent concealment

  1. Ground 3 alleged that the magistrate failed to consider and apply s 55(1)(b) of the Limitation Act. That provision reads as follows:

55   Fraud and deceit

(1)   Subject to subsection (3) where—

(a)   there is a cause of action based on fraud or deceit, or

(b)   a cause of action or the identity of a person against whom a cause of action lies is fraudulently concealed,

the time which elapses after a limitation period fixed by or under this Act for the cause of action commences to run and before the date on which a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by the person or by a person claiming through the person against a person answerable for the fraud deceit or concealment.

  1. For reasons which are obscure, but may, as the plaintiff submitted, have arisen from the refusal of the magistrate to allow the plaintiff to address orally, the magistrate misunderstood the basis of his reliance on s 55. The whole of the reasons in respect of that provision were as follows: [9]

“Then I am taken to s 55 that Mr Harrison says applies, and I’ve had a look at s 55. Section 55 has the heading of ‘fraud in [sic, and] deceit’, and he is saying, well, he is alleging fraud and he certainly raises the issue of fraud, but s 55 says ‘where there is a cause of action based on fraud or deceit’. The cause of action here is negligence, it is conversion, and it is detinue. Now, what I’ve understood to be argued is that there was some kind of fraud in relation to the amount of money paid or something similar, but it is not the basis of the cause of action, but in any event this section … is to be read … in the context of the whole legislation.”

9. Tcpt, p 16(47)-17(10).

  1. As counsel for the plaintiff submitted, the magistrate failed to appreciate that the plaintiff had sought to invoke par (b) s 55(1), not par (a), or not only par (a). The case for concealment was not addressed. Nor does the section heading, which is not part of the Act,[10] provide any basis for reading down or disregarding subs (1)(b). To the extent the heading is relevant extrinsic material, its reference to fraud is apt to include fraudulent concealment.

    10. Interpretation Act 1987 (NSW), s 35(2).

  2. Ground 3 should be upheld, and provides an additional and separate reason for setting aside the judgment in the Local Court.

Ground 4 – procedural unfairness

  1. In substance, the unfairness relied upon was the refusal of the magistrate to allow the plaintiff to expand orally upon his written submissions. That would not necessarily be procedurally unfair, but there were four factors which made it so in the present case.

  2. First, the magistrate did not have access to his affidavit or written submissions before coming on the bench. Indeed, as appears from the transcript of the hearing, she read them while in court. The submissions were only five and a half pages (of single-spaced typing) but the plaintiff’s affidavit was more than seven pages of typing and included responses to an affidavit filed on behalf of the defendant. There were numerous attachments to the affidavit. The magistrate identified it in the transcript as a bundle of some 30 pages. Before she read the affidavit, counsel for the defendant took objection to some parts on the basis that they were argumentative and in the form of submissions, “and also he raises a point of fraud and also intention to mislead the court on the part of my client and also my instructing solicitor that are unfounded”. [11]

    11. Tcpt, p 12(50)-13(1).

  3. The magistrate asked the plaintiff if he understood what had just been raised and he responded, “Not really, your Honour”. She said, “Don’t worry about it. I’d like to read this and then we’ll speak again about the matter. Thank you; just let me do some reading. Thank you.” She then returned to the matter (there was no break in the proceeding) and said, “Just one moment and then I’ll hear anything else from you both”. [12] The exchange which took place after that was as follows: [13]

“Alright; I’ve read and understood everything you’ve had to say, Mr Harrison. Is there anything else? You don’t need to repeat yourself; I’ve read and understood all of that. Is there anything else you wanted to say today?”

12. Tcpt, p 13(17).

13. Tcpt, p 13(18).

  1. The plaintiff raised three matters, without finishing his sentences on each occasion, with the magistrate saying words to the effect “You don’t need to worry about all of that; I’ve read all of your material”. [14]

    14. Tcpt, p 13(32).

  2. Finally, and importantly, the following exchange occurred: [15]

“HER HONOUR: What I said to you, though, I wanted to start with the issue of the Limitations Act, and you’ve addressed that very comprehensively in your submissions.

PLAINTIFF: Thank you, your Honour. Because I do rely on a number of some standalone, some are in combination some cascade one to the other, but I do rely heavily on ss 52, 55 and 56 of the Limitations Act; I do rely very heavily on the –

HER HONOUR: You don’t need to repeat yourself; I’ve read and understood it all.

PLAINTIFF: The date of 21 May 2021 being the date that solicitors expressly sought from the defendant on 31 January 2019, which predates the expiry date. I did my best efforts to try and get these dates and times and –

HER HONOUR: I’ve read and understood all of that, okay?”

15. Tcpt, p 13(40).

  1. It is true that the magistrate also shut down counsel for the defendant, who sought to make further submissions. She then refused to let the plaintiff continue with submissions in response to a nine-page written submission from the defendant which he had only obtained two days earlier.

  2. First, this transcript demonstrates that the magistrate did not permit the plaintiff to make any completed submission orally. She assumed that she had fully understood the written submissions, but her misunderstanding of the issues became apparent in the passages from the judgment set out above demonstrating legal error. Her assurances to the plaintiff proved to be mistaken and therefore unfair. The fact that she also cut off counsel for the defendant is immaterial, although it may have resulted in a missed opportunity to clarify the issues.

  3. Secondly, although the magistrate may not have been aware of it, at a previous directions hearing, at which the plaintiff was not present, on 11 November 2021, Magistrate McIntyre had requested the defendant’s solicitor to provide written submissions addressing the question of whether the fact that the conversion took place while the plaintiff was in custody might create an extension of time in relation to the limitation period, so that the plaintiff would have advanced notice of what she thought might amount to “a disability under the Limitations Act”. [16]

    16. Tcpt, 11/11/21, p 4(9).

  4. The defendant’s written submissions before the Local Court did in fact refer to the Limitation Act, but only by way of reliance on ss 14 and 21, and without reference to the possibility of a suspension under ss 52 or 55. As counsel for the defendant on the appeal fairly conceded, the direction given by Magistrate McIntyre on 11 November was not complied with. No doubt Magistrate Greenwood did not know that. Nevertheless, through the error on the part of the defendant’s lawyers, the plaintiff was deprived of assistance which, as an unrepresented litigant, he should have had and was intended to have had.

  5. The fact that a tribunal may believe that it has before it all the relevant information, when in fact it does not, but wrongly assures the applicant that it has and has read that material, may give rise to procedural unfairness, although the misrepresentation by the tribunal was inadvertent. Such a situation arose in Re Refugee Review Tribunal; ex parte Aala. [17] In the present case, it is clear that Magistrate McIntyre thought that fairness required that the represented defendant at least raise the issue as to what might be necessary to establish a disability for the purposes of the Limitation Act. Had that been done, it is likely that the plaintiff’s written submissions would have directed themselves more specifically than they did to the matters to be addressed. By itself, that circumstance may not have constituted procedural unfairness, but when combined with the lack of an opportunity for full oral submissions, unfairness resulted.

    17. (2000) 204 CLR 82; [2000] HCA 57.

  6. Thirdly, that assessment depends to a significant degree on the fact that the plaintiff was unrepresented and not legally trained. Separately, however, that fact alone should have put the magistrate on notice that his written submissions and affidavit may not have dealt with legal issues as clearly as those of a lawyer would have done. Where written submissions adverted to issues (as indeed did his brief oral submissions) it was incumbent upon the magistrate to ensure that she understood the basis of each submission.

  7. Fourthly, the magistrate should have been alert to the fact that the plaintiff was explaining that he had not had an opportunity to respond to the defendant’s written submissions, which had been supplied to him two days before the hearing.

  8. In combination, these factors demonstrate that the hearing was procedurally unfair. That the unfairness was in respect of material matters was demonstrated by the misunderstandings as to the legal basis on which the plaintiff’s claims under the Limitation Act were made. Accordingly, ground 4 should be upheld. It provided an independent basis for setting aside the orders in the Local Court.

Leave to appeal

  1. The criteria for granting leave to appeal from a decision of the Local Court on a question of law are not necessarily identical, at least in their application, to the criteria regularly invoked in relation to an appeal by way of rehearing from a single judge of the Supreme Court to the Court of Appeal. [18] For example, the claim for $35,000 is a not insignificant amount in the limited civil jurisdiction of the Local Court; it is a very small amount in the Supreme Court, which generally should not be determining such claims, and where the costs are likely to be considerably greater and therefore more likely to be disproportionate to the amount in issue.

    18. See Be Financial Pty Ltd atf Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[38]; The Age Company Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13].

  2. The fact that the trial court judgment is limited to a question of law limits significantly the scope of such an appeal, compared with the appeal by way of rehearing in the Supreme Court. It is important in ensuring the regular administration of justice that material errors of law are corrected. On the other hand, it may be appropriate not to grant leave where the merits of the appellant’s case appear to be no more than merely arguable.

  3. It is also appropriate to consider whether the Local Court decision involves a clear miscarriage of justice. It is less likely that Local Court cases (which have limited precedential value) will raise issues of public importance, but some will. At least since the 1980s, this Court has been willing to hear claims from prisoners whose rights have been improperly restricted, not as an intended effect of incarceration, but as a consequence of incarceration.

  4. Importantly, leave is more likely to be granted where, as here, the judgment under appeal has, in a practical sense, brought the proceedings to an end,[19] than in the case of interlocutory orders which have a more limited effect. That a miscarriage of justice has occurred follows from the finding of procedural unfairness. Thus, the plaintiff’s claim has been dismissed without the basis of dismissal having been properly considered by any court.

    19. Murgolo at [5].

  5. Section 52(1) provides for an unqualified effect, namely suspension of the limitation period, but it does so only for the time the prospective plaintiff is under a disability. Section 11(3)(b) requires the satisfaction of three criteria, namely (i) a continuous period of disability of at least 28 days, (ii) the existence of a substantial impediment in the management of affairs relating to the cause of action, and (iii) an impediment caused by detention or custody. There remains a question in the present case as to whether the plaintiff was “substantially impeded” in the management of his affairs in relation to his claim against the defendant throughout his incarceration, but relevantly up to the date six years prior to the commencement of the proceeding, that is up to say May 2015.

  6. The defendant submitted that the plaintiff had been able to engage solicitors to assist him, and to obtain information and ultimately, when he decided to sue, to commence proceedings. That is so, but the plaintiff’s case was not that, in the terms of s 11(3)(b), he was rendered “incapable”, but that he was substantially impeded. The fact that the plaintiff had difficulty identifying what had happened to the vehicles is relevant to whether he is entitled to succeed in his reliance on s 52(1). Although there are significant gaps in the chronology, the evidence is sufficient to demonstrate that the plaintiff may have been substantially impeded in the management of his affairs in relation to the cause of action by reason of his imprisonment. A finding to that effect would suffice to make him a person under a disability within the terms of s 11(3)(b)(ii).

  7. It is not for this Court to determine that factual issue. As held in Rose v Tunstall,[20] this Court has no jurisdiction to make findings of fact and the matter must be remitted to the Local Court for that exercise to be undertaken. Leave might be refused if a reasonably arguable case on the facts were not demonstrated, but that limiting criterion is satisfied.

    20. [2018] NSWCA 241 at [26]-[31] (Payne JA, Simpson AJA and I agreeing).

  8. In addition, the plaintiff sought to rely upon the different accounts given by Mr Willis, who was the director and agent of the defendant, to those who made enquiries of him on behalf of the plaintiff. There was evidence that fraudulent concealment commenced by responses to enquiries made on behalf of the plaintiff advising that the vehicles had been damaged and destroyed, first in 2014 and later in early 2015. It was only after the plaintiff discovered that the vehicles were still registered (although not to whom) that he was told, in 2019, that they had been sold in May 2015, which was also false. The claim based on s 55 would appear to have merit, but again the factual issues have not been addressed: they can only be determined in the Local Court on a remittal.

  9. The plaintiff requires leave to appeal under s 40(2) of the Local Court Act 2007 (NSW). In circumstances where the error of law was fatal to the continuation of the proceedings and where the error was clearly established, there is no sound basis for refusing leave. Accordingly, this is an appropriate case for granting leave to appeal.

Form of orders

  1. In respect of each limb on which the plaintiff has made good his claims of legal error, there are criteria which require a fact-finding exercise which was not engaged in by the magistrate. The necessary findings require an assessment of the circumstances under which the plaintiff sought to pursue his claim against the defendant from the dates on which the vehicles were disposed by the defendant until May 2015.

  2. The grounds of appeal assumed that the magistrate did not err in dealing with the Limitation Act defence as a preliminary matter. In fact, the magistrate may have thought it necessary to deal with it as a preliminary matter because, having made findings that the proceedings had been commenced outside the relevant limitation period, she stated that “this means that this Court does not have jurisdiction to hear Mr Harrison’s claim”. [21] That was arguably not correct. The fact that a claim fails because a defence is made good, does not mean that the Court did not have jurisdiction to hear the claim: indeed, the result demonstrates the contrary. Further, it has often been said that caution should be applied in dealing with a limitation defence as a preliminary matter, especially where the application of the defence may involve findings of fact and evaluative judgments. [22] In submissions in this Court, senior counsel for the plaintiff embraced that concern. For that reason, the order of remittal should be expressed in terms which make clear that there should be no assumption that the defence is to be addressed as a separate and preliminary matter. There may be circumstances in which that course is appropriate, but, as explained in Wardley Australia Ltd v Western Australia,[23] a case involving a claim for misleading and deceptive conduct, where the cause of action required that the plaintiff establish loss, the joint reasons stated:

“We should, however, state in the plainest terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.”

21. Tcpt, 27/01/2022, p 17(27).

22. Murgolo at [62]-[63]; see also at [5], [71] and [75],

23. (1992) 175 CLR 514, 533 (Mason CJ, Dawson, Gaudron and McHugh JJ); [1992] HCA 55.

  1. While the circumstances of this case are different, where fraudulent concealment is alleged on the part of the defendant, there will be factual issues to be determined, perhaps involving credit findings, which should generally only be taken at a trial, and not by way of a split hearing.

  2. Accordingly, the Court makes the following orders:

  1. Pursuant to s 40(2) of the Local Court Act 2007, grant the plaintiff leave to appeal from the decision of the Local Court of 27 January 2022, striking out the plaintiff’s proceeding in that Court.

  2. Allow the appeal and set aside the orders made in the Local Court.

  3. Remit the matter to the Local Court for determination of the defendant’s notice of motion of 25 October 2021, if pursued as a preliminary matter, or otherwise for determination of the plaintiff’s claim.

  4. Order that the defendant pay the plaintiff’s costs in this Court.

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Endnotes

Decision last updated: 08 December 2023

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Adrenaline Pty Ltd v Bathurst Regional Council [2015] NSWCA 123
Adrenaline Pty Ltd v Bathurst Regional Council [2015] NSWCA 123
Adrenaline Pty Ltd v Bathurst Regional Council [2015] NSWCA 123