Haughton v Chang | CaseChat AU

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Civil)
HAUGHTON v CHANG
[2021] SASCA 90
Judgment of the Court of Appeal
(The Honourable Justice Doyle and the Honourable Justice Bleby)
2 September 2021
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - EXTENSION OF TIME FOR APPEAL
Mr Haughton leased commercial land owned by the respondents pursuant to a “Fixed Term Land Lease Agreement” entered in October 2013. He was late in paying all invoices issued to him by the respondents under this agreement and, on 7 July 2015, the respondents terminated the lease.
Mr Haughton issued proceedings alleging unlawful termination and seeking reinstatement of the lease. The respondents filed a counter-claim for damages for breach of contract.
At a directions hearing, Mr Haughton appeared to raise some form of constitutional challenge to the Court’s jurisdiction. He was advised that, to raise this issue, he ought either to bring an interlocutory application or amend his pleadings. He was given leave to do so, but did not file any such application nor amend his pleadings.
At trial, Mr Haughton sought to challenge the Court’s jurisdiction. He did not explain why he had not raised the issue in accordance with the grant of leave given to him. Despite the trial Judge’s attempts to have him run his case, he refused to call evidence, declined to discontinue his action, and purported to serve criminal proceedings on the Court. The Judge dismissed his claim in an ex tempore ruling.
Mr Haughton attended the hearing of the counter-claim. He gave evidence in support of his defence, tendered several documents, and cross-examined Mr Chang. The trial Judge delivered her reasons on 24 July 2020, and entered judgment for the respondents in the sum of $364,988 (including interest).
Mr Haughton filed a notice of appeal on 10 June 2021, some 10 months out of time. He applies for an extension of time within which to appeal, citing financial difficulties and his poor health as explanations for his delay. By his notice of appeal, he contends that he was denied procedural fairness. He also broadly contends that the Judge erred in fact and in law, seemingly on the bases that Mr Chang committed perjury, and that the lease had been frustrated.
Held, per Doyle JA (Bleby JA agreeing), refusing the extension of time and dismissing the appeal:
1.      There is little in the affidavit evidence filed by Mr Haughton to support the asserted causal role in his delay of his health or financial difficulties.
2.      Mr Haughton was given a reasonable opportunity to present his case and meet the respondents’ case, and no error has otherwise been identified in the reasons of the trial Judge.
3.      In light of the significant length of the delay, the inadequate explanation for that delay, and the poor prospects of success for Mr Haughton on appeal, this is not an appropriate case for the Court to exercise its discretion to grant an extension of time.
Uniform Civil Rules 2020 (SA) r 218; Bankruptcy Act 1966 (Cth) ss 5, 58, 60, 116, referred to.
Attorney-General (WA) v Marquet (2013) 217 CLR 545; Goldus Pty Ltd v Australian Mining Pty Ltd [2015] SASCFC 193; Stokes v Ragless [2019] SASCFC 31; SZRKG v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1389; Cummings v Claremont Petroleum NL (1996) 185 CLR 124; Henderson v Housing Choices South Australia Ltd [2019] SASC 121; Henderson v Housing Choices South Australia Ltd [2019] SASCFC 92, considered.

HAUGHTON v CHANG
[2021] SASCA 90
Court of Appeal – Civil: Doyle & Bleby JJA

DOYLE JA: Mr Haughton (the applicant) applies for an extension of time within which to appeal a decision of a Judge of the District Court, dismissing his claim against Mr Chang and Ms Kiew (the respondents) and giving judgment for the respondents on their counter-claim in the sum of $364,988 (including interest).
The trial Judge handed down her reasons on 24 July 2020. Mr Haughton did not file his notice of appeal until 10 June 2021. It follows that Mr Haughton’s appeal was filed some 10 months outside of the time prescribed by the Uniform Civil Rules 2020 (SA) for the institution of an appeal, and he requires an extension of time to proceed.
For the reasons that follow, I would refuse Mr Haughton’s application for an extension of time and dismiss his appeal.
Background
The respondents are husband and wife, and own commercial land in Lonsdale (the Property). Mr Haughton is the sole shareholder and director of a company that, at the time of the relevant events, owned land adjacent to the Property. The proceedings the subject of this appeal arose out of a dispute regarding a commercial leasing arrangement between Mr Haughton and the respondents in respect of the Property.
Mr Haughton was interested in leasing the Property for the purpose of “establishing and developing landfill and green waste treatment”, and approached the respondents in this regard in early to mid-2013. He produced a document entitled “Fixed Term Land Lease Agreement” (the Agreement), which was ultimately signed by the parties on 22 October 2013.
Shortly after, and as contemplated by the Agreement, Mr Haughton paid an initial amount to the respondents, took possession of the Property, and began depositing landfill. The Agreement provided that subsequent payments, which encompassed both rent and payment for income generated through Mr Haughton’s enterprise, were to be made within seven days of the presentation of invoices by the respondents to Mr Haughton.
Relevantly, the termination provisions in the Agreement entitled either party to terminate the lease upon certain defined default events, including a failure by the lessor to “pay the lease fee and allocated shares of income streams when due monthly”. As at April 2015, Mr Haughton had been late in paying the invoices issued to him by the respondents. On 15 April, the respondents issued another invoice and, despite payment falling due on 23 April, it remained unpaid as at 7 July 2015.
As a consequence of Mr Haughton’s failure to pay this invoice, the respondents instructed their solicitors to terminate the Agreement, and serve a notice of re-entry. The locks on the premises were changed, and the respondents resumed possession. Mr Haughton subsequently paid the outstanding invoice on 30 July 2015.
On 22 July 2015, Mr Haughton issued proceedings in the Magistrates Court, alleging that the respondents had unlawfully terminated the Agreement, and seeking orders for the reinstatement of the lease. The respondents filed a defence, and a counter-claim for damages for breach of contract, on 31 August 2015. The proceedings were transferred to the District Court on Mr Haughton’s application on 18 October 2016.
The matter progressed slowly through various interlocutory procedures, including the filing of amended pleadings by both parties. While the matter was listed for trial in mid-2018, the trial was vacated to enable the parties to continue negotiations. These negotiations were ultimately unsuccessful, and the trial was relisted to commence on 18 October 2019.
At a directions hearing on 1 October 2019, Mr Haughton applied for an adjournment of the trial on the basis that he was not ready to proceed. The adjournment was granted, despite opposition from the respondents, and the trial was relisted for 1 June 2020.
At this directions hearing, Mr Haughton appeared to raise some form of constitutional challenge to the jurisdiction of the Court. He was advised by the Court that, to raise this issue, he ought either to bring an interlocutory application or amend his pleadings. He was given leave to do so within 28 days, but did not file any such application nor amend his pleadings.
The trial
The trial commenced as scheduled on 1 June 2020, with both parties unrepresented.
At the outset, Mr Haughton sought to challenge the jurisdiction of the Court to hear his action. For the purposes of this appeal, it is sufficient to note that the challenge was based on the supposed invalidity of the Australia Act 1986 (Cth), and belongs to a class of jurisdictional challenges that have been authoritatively dismissed as lacking merit.[1]
[1] Attorney-General (WA) v Marquet (2003) 217 CLR 545 at [70] (Gleeson CJ, Gummow, Hayne and Heydon JJ).
Mr Haughton did not explain why he had not raised the issue by way of application or amendment of his pleadings in accordance with the grant of leave given to him on 1 October 2019. Despite the trial Judge’s reminder that it was he who had invoked the jurisdiction of the Court, Mr Haughton was firm that his position was that the jurisdiction of the Court was “fraudulent”, and that he would consequently not be calling evidence in support of his case. Regardless, he declined to discontinue his action, seemingly on the basis that he wished to pursue the jurisdictional point.
The trial Judge indicated a preparedness to listen to Mr Haughton’s submissions on the topic, but asked Mr Haughton to clarify what orders he was seeking. Mr Haughton said that he was seeking an order that the matter be referred to the “Full Court of the Supreme Court of Victoria”, apparently because others who had allegedly perpetrated frauds were in some way connected with that jurisdiction. Her Honour declined to refer the matter to the Supreme Court of Victoria on the basis that she lacked power to do so.
The respondents expressed that it remained their desire for the Court to deal with both the claim and counter-claim. In light of Mr Haughton’s conduct in both refusing to address the substantive case set out in his pleadings, and declining to discontinue his claim, the trial Judge adjourned to enable him to re-consider the conduct of his action. Her Honour warned Mr Haughton that he was at risk of having his claim dismissed if he continued in this manner.
When the Court resumed, Mr Haughton confirmed that he would not call evidence in support of his case and purported to serve criminal proceedings on the Court. The trial Judge subsequently delivered an ex tempore ruling dismissing Mr Haughton’s claim.
Following the trial Judge’s dismissal of Mr Haughton’s claim, the respondents indicated that they still wished to pursue their counter-claim. The respondents were unrepresented, but did not wish to seek legal advice, and wanted the matter dealt with without further delay.
The respondents’ case at trial consisted of evidence given by Mr Chang and several documents tendered as exhibits. Mr Haughton attended the hearing of the counter-claim. He gave evidence in support of his defence and tendered several documents. He also cross-examined Mr Chang.
The trial Judge’s reasons
The trial Judge reserved her decision, and delivered reasons on 24 July 2020. Her Honour commenced with a summary of the background and procedural history to the matter in a manner similar to that above. She referred to her dismissal of Mr Haughton’s claim on 1 June 2020, and set out her reasons for making that order in the following terms:
I note that Mr Haughton has sought to agitate the [jurisdictional] issues on other occasions in the Supreme Court. …
… In each case the Court rejected Mr Haughton’s constitutional or jurisdictional claims as being “without merit”; “manifestly misconceived” and “seriously legally flawed”. With respect, I agree with these conclusions.
These occasions are however different to the current proceedings as in each matter Mr Haughton was the respondent not the applicant. Further, in each of those matters Mr Haughton had at least attempted to raise the issue prior to the hearing by way of pleadings or application. In the proceedings issued by Mr Haughton against Mr Chang and Ms Kiew, the jurisdictional issue was not raised in his pleadings or by way of interlocutory application despite Mr Haughton being given the opportunity to do so. This was unfair to Mr Chang and Ms Kiew who had attended court to deal with the substantive issues arising out of their agreement with Mr Haughton as set out in the pleadings. They had no forewarning of this argument other than what was said, somewhat incoherently, by Mr Haughton at the directions hearing on 1 October 2019.
Given the position of Mr Chang and Ms Kiew, the prior trial adjournment at the request of Mr Haughton, Mr Haughton’s failure to raise the jurisdictional issue in a proper form prior to the hearing and his stated intention not to address or call any evidence concerning the substantive issues raised in his pleadings I delivered an ex tempore Ruling on 1 June 2020 in which I dismissed Mr Haughton’s claim.
Her Honour then turned to consider the respondents’ counter-claim, beginning with some general observations about the evidence at trial. She noted that the evidence of both Mr Chang and Mr Haughton had been difficult to follow, but that Mr Chang had responded “coherently and cogently” to questions put to him by the Court. Mr Haughton, by contrast, was somewhat argumentative and prone to making unsubstantiated assertions. On this basis, her Honour preferred the evidence of Mr Chang where it conflicted with that given by Mr Haughton.
Her Honour then set out the terms of the Agreement and proceeded to consider the various aspects of the respondents’ counter-claim. As I will explain, Mr Haughton’s grounds of appeal do not address the terms of the Agreement, or the detail of the trial Judge’s findings. Rather, they challenge the manner in which the trial Judge conducted the hearing of the claim and counter-claim, and include an attempt to adduce new evidence for the purpose of impugning more general aspects of the decision. Given the nature of Mr Haughton’s grounds, it is sufficient to give a relatively concise overview of the trial Judge’s findings.
First, her Honour accepted Mr Chang’s evidence as to the dates upon which invoices were sent, due and paid, and found that, under the terms of the Agreement, the respondents were entitled to interest in the sum of $1,800 for Mr Haughton’s late payment of invoices.
Secondly, her Honour was satisfied that Mr Haughton’s late payments amounted to a breach of the Agreement, and that the respondents were entitled to terminate on 7 July 2015. Her Honour accepted Mr Chang’s evidence that the respondents had been unable to relet the Property due to the state in which it was left by Mr Haughton, and found that they had not failed to mitigate their loss. As such, her Honour considered it appropriate to award the respondents damages for the loss of the benefit of the Agreement from the date of termination to the end of the lease term, in the amount of $350,000 (including interest).
Thirdly, the trial Judge awarded damages to the respondents for damage to a fence on the boundary between their Property and the property owned by Mr Haughton’s company. Mr Haughton had given evidence to the effect that there had been a derelict fence on this boundary when he took possession, but that he had erected a functional fence since this time. The trial Judge did not accept his evidence, instead preferring Mr Chang’s evidence that the fence had been fully functional at the commencement of the lease and had now been largely removed. Her Honour assessed damages at $12,000.
Finally, her Honour made an order for costs in favour of the respondents in the amount of $1,188, being the costs incurred prior to the institution of the claim and counter-claim in respect of the non-payment of rent by Mr Haughton and the termination of the Agreement.
The trial Judge was not satisfied that the respondents were entitled to any further payment for landfill deposited on the Property, or damages for the cost of remediation.
Her Honour ultimately entered judgment for the respondents on the counter-claim in the sum of $364,988 (including interest).
This appeal
Mr Haughton now appeals the decision of the trial Judge. He relies on three grounds in support of his appeal, namely:
1.   That the presiding learned Judge erred in law in failing to allow the Appellant any opportunity to present his evidence in raising the substantive arguments of his Claim – in the presentation of him Claim proper.
2.   That the presiding learned Judge erred in law in her application of law and in her application of the evidence that she believed to be relevant, and the application of the law to those findings of facts.
3.   That the presiding learned Judge erred in law in not allowing the Appellant natural justice, procedural fairness, due process and equity in her management of the trial, which resulted in an erroneous finding and outcome.
He seeks orders that the findings made by the trial Judge be set aside; that the matter be remitted to the District Court for re-trial; and that a different judge hear the re-trial.
As I have mentioned, Mr Haughton filed his appeal some 10 months out of time, and consequently requires an extension of time to proceed. The matter came before me in the callover on 25 June 2021 for the purpose of addressing this preliminary issue. At that hearing, I informed the parties that the Court would consider the question of whether it was appropriate for an extension of time to be granted on the papers. I made orders for the filing of material by Mr Haughton in support of his application for an extension of time, and of responsive material by the respondents.
Mr Haughton has filed two lengthy affidavits, dated 12 July 2021 and 29 July 2021. The respondents also rely upon two affidavits, both dated 15 July 2021. The respondents have also filed an interlocutory application, seeking, inter alia, the refusal of an extension of time, the dismissal of Mr Haughton’s appeal, and costs.
Extension of time
This Court has a discretion to extend the time within which to file an appeal. The factors which are relevant to the exercise of the Court’s discretion are well established, and include the length of the delay, the reason for the delay, the merits of the appeal, and the extent of any prejudice suffered by the respondent.[2]
[2] See, eg, Goldus Pty Ltd v Australian Mining Pty Ltd [2015] SASCFC 193 at [14] (Gray, Blue and Nicholson JJ).
I have already mentioned that the length of the delay in this case is significant. The reasons proffered by Mr Haughton to explain his delay are, first, that he has been unable to prosecute the appeal due to his poor physical and mental health and, secondly, that the COVID-19 pandemic has caused him financial difficulties and delayed his ability to bring proceedings. There is little in the affidavit evidence filed by Mr Haughton to support the asserted causal role in his delay of either of these explanations, and I consider that both the length of, and lack of explanation for, the delay militate against an extension of time.
Turning to the merits of the appeal, in circumstances where Grounds 1 and 3 of Mr Haughton’s appeal essentially raise issues of procedural fairness, it is convenient to consider these grounds together.
By Ground 1, Mr Haughton challenges the trial Judge’s decision to dismiss his claim, on the basis that she failed to allow him the opportunity to present his evidence. It is important to consider this Ground in the context of the procedural history of the matter, and the manner in which Mr Haughton conducted his case at trial.
As I have already outlined, Mr Haughton invoked the jurisdiction of the Court by instituting proceedings against the respondents. At the directions hearing on 1 October 2019, Mr Haughton foreshadowed an intention to challenge the jurisdiction of the Court. He was told by the trial Judge that the correct way to do so was by interlocutory application or through the amendment of his pleadings, and was granted leave to take either of these procedural steps within 28 days. He did not do so within this time; indeed, he did not do so at any point in the approximately eight months between that directions hearing and the first day of trial.

At the commencement of the trial, Mr Haughton maintained his jurisdictional challenge, and made it clear that he would not lead evidence nor make submissions on his substantive case against the respondents. The Judge adjourned the trial to give Mr Haughton the opportunity to reconsider his position, and he did not waver; he instead purported to serve criminal proceedings upon the Judge and the Court itself.
In circumstances where Mr Haughton himself invoked the jurisdiction of the Court; failed to take advantage of the opportunity he had been given to raise the jurisdictional issue properly; and made it clear that he would not lead any evidence on the substantive issues in the proceeding, the trial Judge was left with little choice but to dismiss his case. In light of her Honour’s efforts to have Mr Haughton run his substantive claim, it cannot properly be said that her Honour failed to allow Mr Haughton the opportunity to present his evidence.
By Ground 3, Mr Haughton alleges that the trial Judge erred in not affording him natural justice, procedural fairness, due process and equity in her management of the trial. To the extent that this Ground challenges the trial Judge’s conduct in dismissing Mr Haughton’s claim, I consider that it is not arguable for the reasons I have already given. Insofar as this Ground also challenges the trial Judge’s conduct of the respondents’ counter-claim, I note that Mr Haughton presented both oral and documentary evidence in relation to his defence on the counter-claim, and cross-examined Mr Chang. The judicial obligation of procedural fairness required that Mr Haughton be given a reasonable opportunity to present his case and meet the respondents’ case,[3] and such opportunity was given.
[3] Stokes v Ragless [2019] SASCFC 31 at [16]-[18] (Lovell J, Blue and Parker JJ agreeing).
It follows that Grounds 1 and 3 of the appeal are not reasonably arguable.
Ground 2 of Mr Haughton’s notice of appeal broadly contends that the trial Judge erred “in her application of law and in her application of the evidence that she believed to be relevant, and the application of the law to those findings of facts.” While the high degree of generality with which this Ground is expressed may itself be a sufficient basis for dismissal,[4] I have attempted to discern the substance of Mr Haughton’s complaints from his lengthy affidavits rather than dismiss his appeal on that basis.
[4] See SZRKG v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1389 at [22] (Farrell J).
Mr Haughton’s complaints appear to be two-fold. First, he contends that the trial Judge was led into error as a result of Mr Chang having committed perjury. In this regard, he seeks to rely on fresh evidence regarding the terrain of the Property; he contends that this evidence proves that Mr Chang gave dishonest evidence when he said that there was a functional fence on the Property at the time Mr Haughton took possession.
Secondly, Mr Haughton contends that the lease had been frustrated before the respondents had terminated the Agreement, due to issues with the stormwater connection on the Property. He again seeks to rely on fresh evidence, including photographs of the Property, documents produced by the Onkaparinga Council, and correspondence from the same.
Having reviewed the material filed by Mr Haughton, I do not think there is any merit in either of these challenges to the trial Judge’s decision. There is no basis in the material before the Court from which it could sensibly be inferred that Mr Chang gave dishonest evidence, nor is there any evidence to support Mr Haughton’s claim that the Agreement had been frustrated.
Further, and in any event, I do not consider that this would be an appropriate case for the Court to exercise its discretion under r 218.17(1)(c) of the Uniform Civil Rules to receive “further evidence” on the hearing of an appeal. In addition to the observations I have already made to the effect that the evidence would not have had any result on the outcome of the proceedings at first instance, I note that it is plain that the evidence that Mr Haughton seeks to adduce was evidence that was either available at the time of trial, or could with reasonable diligence have been obtained for use at that hearing. Further, by reason of the long periods of delay for which Mr Haughton has been responsible, both in the lead up to trial and in the commencement of his appeal, the public interest in the finality of litigation militates against the admission of fresh evidence.
I note in passing that the evidence regarding frustration of the Agreement raises an additional difficulty for Mr Haughton, in that adducing such evidence would seem to fly in the face of his attempts, by his notice of appeal, to have his claim for wrongful termination and reinstatement of the Agreement re-tried.
I do not consider that Ground 2 is reasonably arguable.
In light of the significant length of the delay, the inadequate explanation for that delay, and the poor prospects of success for Mr Haughton on appeal, I do not consider this to be an appropriate case for the Court to exercise its discretion to grant an extension of time. I would refuse the extension and dismiss the appeal. I would also dismiss the respondents’ interlocutory application seeking orders for dismissal, but only because it is redundant in light of the orders I have already determined should be made.
Mr Haughton’s bankruptcy
I note that at the callover hearing on 25 June 2021, I was informed by Mr Chang that a sequestration order had been made against Mr Haughton’s estate. Mr Haughton confirmed that this was the case, and I informed Mr Haughton that the Court would require evidence of the position of his trustee in bankruptcy in relation to his pursuing the appeal.
Accordingly, Mr Haughton annexed a letter dated 1 July 2021 from Mr Shanahan of Hall Chadwick to his affidavit of 12 July 2021. In this letter, Mr Shanahan confirmed that he had been appointed Mr Haughton’s trustee in bankruptcy on 8 June 2021. He advised that he elected to discontinue the appeal pursuant to s 60(2) of the Bankruptcy Act 1966 (Cth), but did not object to Mr Haughton continuing the action in his own name, as provided for by s 60(4).
As the respondents have pointed out, s 60(4) provides that a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in particular circumstances. In circumstances where a sequestration order was made against Mr Haughton’s estate on 8 June 2021, and his appeal was not instituted until two days later, it is not open for Mr Haughton to ‘continue’ the action in his own name under s 60(4).
As the present case is concerned with an appeal commenced after Mr Haughton became bankrupt, the critical provisions of the Bankruptcy Act are ss 5, 58(1) and 116(1)(b). Having only briefly reviewed the authorities, and without the benefit of detailed submissions, it seems that Mr Haughton’s appeal, insofar as it challenges the dismissal of his own claim, is incompetent by reason of his bankruptcy. However, it also seems that no equivalent difficulty arises in relation to his appeal of the Judge’s findings on the counter-claim. I express this tentative view in light of authority to the effect that a right to appeal against a judgment imposing a monetary obligation on an appellant is not ‘property’ for the purposes of the Bankruptcy Act and does not vest in the trustee.[5]
[5] See Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 133-134 (Brennan CJ, Gaudron and McHugh JJ); applied in Henderson v Housing Choices South Australia Ltd [2019] SASC 121 at [96]-[103] (Peek J) (affirmed in Henderson v Housing Choices South Australia Ltd [2019] SASCFC 92 (Kourakis CJ, Parker and Doyle JJ)).
In light of my conclusion on the question of whether to grant an extension of time, I make these observations for completeness and without expressing a concluded view on the issues raised by Mr Haughton’s bankruptcy.
Conclusion
For the reasons I have given, I would refuse Mr Haughton’s application for an extension of time within which to appeal. I would dismiss the appeal. I would also dismiss the respondents’ interlocutory application, but, as I have explained, only on the ground that it is redundant in light of the orders I propose to make on Mr Haughton’s application.
BLEBY JA: I would refuse the application for an extension of time within which to appeal, and dismiss the appeal, for the reasons given by Doyle JA. I would consequently dismiss the respondents’ interlocutory application on the basis that it is redundant.