Henderson, R.F. v Amadio Pty Ltd

[1995] FCA 518

CATCHWORDS

PRACTICE AND PROCEDURE - Leave to appeal from interlocutory order refusing leave to amend pleadings - whether substantial injustice caused by evidence of order - interference with exercise of discretion

Federal Court of Australia Act s 24
Federal Court Rules  Order 52 rule 10

Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170
House v The King (1936) 55 CLR 499

RUSSELL FRASER HENDERSON AND OTHERS v AMADIO PTY LTD AND OTHERS
No VG 260 of 1993
No VG  95 of 1994

CORAM:    NORTHROP, WHITLAM & TAMBERLIN JJ
PLACE:    MELBOURNE
DATE:     15 JUNE 1995

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION                 No VG 260 of 1993
  No VG  95 of 1994
VICTORIA DISTRICT REGISTRY

B E T W E E N :

RUSSELL FRASER HENDERSON AND OTHERS
  Applicants

A N D :

AMADIO PTY LTD AND OTHERS
  Respondents

COURT:    NORTHROP J
         WHITLAM J
         TAMBERLIN J

PLACE:    MELBOURNE

DATE:     15 JUNE 1995

REASONS FOR JUDGMENT

NORTHROP J

There are two motions before the Court, one in matter No VG 260 of 1993 in which the first applicant is Russell Fraser Henderson, and one in matter No VG 95 of 1994 in which Robert Charles Morgan is the first applicant.  Although these two motions were heard together, the Court will refer to the facts in the Henderson matter only since the result in the Morgan matter will depend upon the orders made in the Henderson matter.

The motion is brought on behalf of the cross-respondent, SGIO Insurance Limited, seeking leave to appeal from a decision of the Court constituted by Heerey J made on 5 June 1995.  In addition, the insurance company is seeking an order
that if leave is granted the appeal be heard and determined instantly.  In the course of submissions counsel have adverted to both aspects of the motion, namely the leave to appeal point and also the substantive matter.  The same position applies with the Morgan case.

In order to understand the motion for leave to appeal a brief reference may be made to the relevant historical facts.  The actions involve a very large number of parties, of applicants and respondents, and a cross-claim is being made by one of the respondents, Bird Cameron, Accountants, against the cross-respondent, SGIO Insurance Limited, the insurer of Bird Cameron.  The affidavit in support of the motion shows that the hearing of the action commenced on 20 March this year, and that the applicants closed their case on 26 May of this year.  It is anticipated there will be another 42 sitting days before the case concludes.  The Court was informed that there are 11 separate representations of counsel appearing in the matter and that the way the matter is proceeding is that all parties are participating in the hearing.  Witness statements have been exchanged and are in the course of being exchanged.  All aspects of the two actions are proceeding, as it were, as one, with all parties participating actively in the conduct of the hearing.

The pleadings have been amended from time to time.  On 5 June the insurance company sought leave to amend its defence to raise certain issues, some of which may involve the calling of further evidence but most of which, however, appear to be
indications of arguments which will arise from facts already before the Court or facts which are in issue before the Court and will be examined in detail by way of further evidence and cross-examination during the remainder of the hearing of the case.  After hearing submissions the trial judge declined to allow the amendments sought by the insurance company and it is against that decision which is headed, "Ruling", but for present purposes can be treated as an order, refusing the motion to grant leave to amend the defence, that leave to appeal is sought.

The procedural provisions are quite clear. Subsection 24 (1A) of the Federal Court of Australia Act 1976 provides that an appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal. Subsection 24(1) allows an appeal from a judgment of the Court constituted by a single Judge. Subsection 24(1A) was inserted into the Federal Court of Australia Act at a time when the burden on the Court in hearing appeals from trial judges on interlocutory matters, both before and during the course of the hearing, became very, very common and as a matter of policy the Government determined to limit the right of appeal in interlocutory judgments to cases where the Court gave leave to appeal.

The rules take up this provision.  Order 52, rule 10, provides, in substance, that an application for leave to appeal from an interlocutory judgment may be made orally to the judge who pronounced the judgment at the time of its pronouncement, or where that is not done, by motion on notice to a single Judge or to a Full Court.  One thing is clear, the Court does not, lightly, give leave to appeal from interlocutory judgments, particularly in matters involving practice and procedure.  This is made very clear by a reference to what the High Court said in Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170, and in particular see the judgment of the then Chief Justice, Sir Harry Gibbs and Aicken, Wilson and Brennan JJ. I refer in particular to the passage at page 177 of that judgment which cites with approval the well-known extract from the judgment of Sir Frederick Jordan in In Re the Will of F.B. Gilbert (dec) (1946) 46 SR (NSW) 318 at 323, a passage which is well worthwhile repeating now and which I quote:

" ... I am of opinion that, ... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights.  In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice.  The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal."

At the same time it must be remembered that matters involving practice and procedure do vary from case to case.  In many cases an interlocutory judgment in that sense could relate to a preliminary question tried and determined which has the effect of determining finally the rights between the parties, or it could be of a kind, as in this case, of an
amendment to a pleading.  In my opinion, it is not appropriate to say that because a pleading gives rise to limitations on relevance of evidence and matters of that kind, it therefore has an effect on the substantive issue of the case in due course.  This, in my opinion, is a case dealing with practice and procedure and in these circumstances, as is said in Adam P Brown at 177:

"It is safe to say that the question of injustice flowing from the order appealed from would generally be a relevant and necessary consideration."

It is often put that, in order to satisfy that requirement, there must be some substantial or manifest injustice arising from the existence of the order from which leave to appeal is sought.  It is also a well known general principle that normally applications for leave to amend a pleading should be granted unless substantial injustice is caused to the opposing party which cannot be overcome by an adjournment or by the awarding of costs.  This is so because of the need to ensure that justice is done between the litigants.  Justice can only be done if the real issues between the litigants can be determined from the pleadings as finally determined to illustrate what is at issue between the parties and what the rights of the parties then are.  In the present case it must be remembered that the trial Judge has been hearing this matter for a long, long time, in which all parties have played an active part.  The trial Judge has a very keen knowledge of what has occurred, what the facts are and what is involved.  The orders made are interlocutory in the sense that they are not finally binding.  There is nothing to prevent an order being made in the future in relation to pleadings to give effect to any evidence that might be given, to enable the Court to make the appropriate order.  It also must be remembered that if, in due course, a party is not given leave to amend and a judgment is obtained against that party, that may well be a good appeal point when the substantive orders are made.  That has been made clear by a number of authorities referred to in the course of submissions today.  I will refer to one only, the decision of the Full Court of this Court in the case of Londish v Gulf Pacific Pty Limited (1993) 45 FCR 128.

In the course of submissions, the Court was taken in some detail to the pleadings and the proposed amendments.  Much attention was directed to a consideration of the reasons given by the trial Judge for refusing to grant the amendment sought.  Reference is made also to the well known principles to be applied with respect to interfering with a discretion of a judge as enunciated in the case of House v The King (1936) 55 CLR 499 as well as to a number of cases dealing with the substantive issue of amendment to pleadings. I should indicate that I have heard nothing in the course of argument which tends to persuade me that the trial Judge was in error in any sense as described in House v The King, but I do not decide the case on that point.

In my opinion, leave to appeal should be refused on the ground that it is inappropriate for the trial, particularly a
long trial, to be in danger of being interrupted from time to time by a party seeking leave to appeal from judgments of an interlocutory nature made in relation to matters arising in that trial.  If that course were not adopted the whole system of administration of justice in this Court could founder and be dragged out indefinitely.  I see nothing on the facts of this case which justifies leave being granted.

Accordingly I would refuse leave to appeal in each motion with costs.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment of The Honourable Justice R.M. Northrop.

Associate:

Date:

IN THE FEDERAL COURT OF AUSTRALIA     )
  )
GENERAL DIVISION   )    VG 260 of 1993
  )    VG  95 of 1994
VICTORIAN DISTRICT REGISTRY          )

RUSSELL FRASER HENDERSON AND ORS

Applicant

AMADIO PTY LTD AND ORS

Respondent

Coram:       Northrop, Whitlam and Tamberlin JJ
Place:       Melbourne

Date:15 June 1995

REASONS FOR JUDGMENT

I agree with Northrop J and with the orders that his Honour proposes.

I certify that this is a true copy of the reasons for judgment herein of the Hon. Justice A.P. Whitlam

Associate:

Date: 15 June 1995

IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY       )    No  VG 260 of 1993 GENERAL DIVISION                  )    No  VG 95 of 1994

BETWEEN:          RUSSELL FRASER HENDERSON
  AND OTHERS
  Applicants

AND:              AMADIO PTY LTD
  AND OTHERS
  Respondents

CORAM:       NORTHROP J
             WHITLAM J
             TAMBERLIN J

PLACE:       MELBOURNE
DATED:       15 JUNE 1995

REASONS FOR JUDGMENT

TAMBERLIN J:

I also concur with the reasons given by Northrop J in the orders that he has foreshadowed. However, I think that the principles set out in House v The King (1936) 55 CLR 499 are particularly applicable in the present circumstances. I am not satisfied that the Judge has been shown to have acted on a wrong principle or has allowed extraneous or irrelevant matters to guide or influence his decision. Nor has he been shown to have mistaken the facts or not to have taken into account any material consideration. Having regard particularly to the duration of the case and his Honour's familiarity with all the facts and circumstances surrounding it I see no reason for departing from the conclusion which his Honour has reached.

I certify that this and
the preceding page
are a true copy of the
Reasons for Judgment herein of
his Honour Justice Tamberlin.

Associate:

Date:          15 June 1995  

ATTACHMENT

Counsel for SGIO Insurance Ltd:   Mr A.G. Uren QC
  Mr C.M. Caleo

Solicitor for SGIO Insurance Ltd: Phillips Fox

Counsel for Bird Cameron:        Mr J.I. Fajgenbaum QC
  Mr D.M. Clarke

Solicitors for Bird Cameron:     Barker Gosling

Date of Hearing:                 15 June 1995