Hewitt v Count Financial Ltd
[2017] VSCA 354
•30 November 2017
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2017 0073
| DARREN EDWARD HEWITT | Applicant |
| v | |
| COUNT FINANCIAL LTD (ACN 001 974 625) | Respondent |
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| JUDGES: | TATE and KYROU JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 6 October 2017 |
| DATE OF JUDGMENT: | 30 November 2017 |
| MEDIUM NEUTRAL CITATION: | [2017] VSCA 354 |
| JUDGMENT APPEALED FROM: | Hewitt v Count Financial Ltd (Unreported, Victorian Court of Appeal, Irving JR, 23 August 2017) |
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PRACTICE AND PROCEDURE – Application to set aside Judicial Registrar’s orders refusing extension of time to file application for leave to appeal – Length of delay, reasons for delay, prospects of success, and extent of any prejudice suffered by respondent if extension granted – Reason for delay not adequate – Little to no prospects of success of application for leave to appeal – Application dismissed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | In person | |
| For the Respondent | Mr J A J Nixon | Moray & Agnew |
TATE JA
KYROU JA:
The applicant, Darren Edward Hewitt (‘Hewitt’), applies for the setting aside of orders made by Irving JR refusing to grant an extension of time for the filing of an application for leave to appeal.[1] Hewitt sought an extension of time to apply for leave to appeal from decisions of the County Court made on 17 March 2017[2] and 12 April 2017.[3] When reviewing the decision of Irving JR, this Court considers the application for an extension of time afresh.[4] In other words, this Court does not review the decision of Irving JR to determine whether or not an error has been committed; rather it looks at Hewitt’s application for an extension of time anew, on the same materials as those before the Judicial Registrar.[5] The respondent, Count Financial Ltd (‘Count Financial’), opposes the grant of an extension of time.
[1]Hewitt v Count Financial Ltd (Unreported, Victorian Court of Appeal, Irving JR, 23 August 2017) (‘Irving JR reasons’). The application is made under r 64.42(8) of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules of Court’).
[2]Hewitt v Count Financial Ltd [2017] VCC 236 (‘Primary reasons’).
[3]Hewitt v Count Financial Ltd[No 2] [2017] VCC 405 (‘Costs reasons’).
[4]See Bisognin v Hera Project Pty Ltd [2016] VSCA 322 [105]. However, see also Leeworthy v Registrar of the Licensing Appeals Tribunal [2017] VSCA 353.
[5]Rules of Court r 64.42(9).
For the reasons below, we would refuse the application for an extension of time.
History of proceedings
The dispute between Hewitt and Count Financial concerns advice that Hewitt alleges John Pollock (‘Pollock’) gave him in June 2007. At that time, Pollock held a sub-licence of an Australian Financial Services Licence with Count Financial.
Hewitt and Pollock met on 28 June 2007 at Pollock’s office in Glen Waverley (‘the June 2007 meeting’). The parties dispute the substance of the June 2007 meeting. Hewitt claims that Pollock advised him to take out a margin loan to buy more units in the Mariner Pipeline Income Trust (‘MIT’).[6] Pollock gave evidence at the trial in the County Court that he had given no such advice to Hewitt at the June 2007 meeting.[7] Pollock also alleged that a second meeting had taken place on 6 July 2007, at which point Hewitt returned the signed Terms of Engagement. Hewitt denies that there was a second meeting and instead claims that he signed the Terms of Engagement at the June 2007 meeting and left the document undated in Pollock’s possession.[8] Hewitt maintains that from this point onwards he believed that Pollock was his financial adviser.
[6]Primary reasons [4]. The Mariner Pipeline was also known as the Ethane Pipeline. MIT units have also been referred to in proceedings as EPI units and EPX units. For the purposes of this judgment, they are referred to as MIT units.
[7]Primary reasons [4].
[8]Primary reasons [5].
Between 6 July 2007 and 9 November 2007, Pollock and Hewitt had intermittent contact via email. This email communication often involved Pollock ignoring many questions posed by Hewitt.[9]
[9]Primary reasons [6], [69].
On 11 September 2007, Hewitt applied for a CommSec margin loan with a credit limit of $52,000.[10] The loan was approved with a credit limit of $60,000. Hewitt successfully applied to increase the credit limit of the margin loan on two occasions. On or about 21 September 2007, he applied to increase the loan to $100,000 and on 22 October 2007 he applied to increase the loan to $150,000.[11]
[10]Primary reasons [7].
[11]Primary reasons [8], [9].
Between 16 September 2007 and 10 October 2007, Hewitt increased his holding of MIT units from 43,100 units to 91,359 units.[12]
[12]Primary reasons [10].
Hewitt said that he sold a number of units on or about 22 January 2008 to pay back an unrelated debt to the Australian Taxation Office. From early 2008 onwards, the value of the MIT units fell considerably and Hewitt accepted loans from family members to meet margin calls. From 3 December 2008 onwards, he was forced to sell MIT units to meet the margin calls. By 7 July 2009, Hewitt had sold all of his MIT units.[13] He claimed that he lost his life savings as a result of a drop in the price of the units.[14] He also claimed that he had wished to put together enough money for a deposit to buy his own home and that he would have undertaken this alternative transaction in 2007 if he had not accepted and relied upon Pollock’s advice.
[13]Primary reasons [11]–[12].
[14]Primary reasons [15].
On 20 July 2013, Hewitt wrote Pollock a letter complaining about the advice he alleges he received at the June 2007 meeting.[15] In response, in August 2013, the Commonwealth Bank customer relations team sent Hewitt copies of the emails that had passed between himself and Pollock in 2007.[16]
[15]Primary reasons [16].
[16]Primary reasons [19]; The Commonwealth Bank of Australia Group acquired Count Financial in 2011.
On 16 May 2014, Hewitt commenced proceedings against Count Financial in the County Court of Victoria. He made his claim alternatively in alleged breach of:
(a) contract, specifically breach of the retainer allegedly entered into between Hewitt and Count Financial;
(b) tort, specifically breach of the duty of care owed to Hewitt to avoid pure economic loss; and
(c) statute, specifically breach of statutory duties owed to Hewitt under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth).[17]
[17]Primary reasons [118].
Between the commencement of proceedings in May 2014 and the beginning of the trial on 20 February 2017, there were two attempts at mediation. A third attempt at mediation was made on the third day of the trial.
Hewitt was variously represented during this time. At the first mediation on 10 December 2015, Hewitt was represented by Maurice Blackburn.[18] At the second mediation (a Judicial Resolution Conference) on 13 December 2016, Hewitt was represented by Paul Pratt of National Compensation Lawyers and Michael Seelig of counsel.[19] At the third mediation on 22 February 2017, Hewitt was represented by Pratt and Seelig, although the judge had granted leave to them earlier that day to cease to act.
[18]Leave was granted on 18 December 2015 to Maurice Blackburn to file a Notice of Solicitor Ceasing to Act. That notice was filed on 22 December 2015.
[19]Hewitt was represented by National Compensation Lawyers from 27 July 2016 until 22 February 2017.
Over the course of the County Court proceeding, Count Financial made three Calderbank offers. These offers, which Hewitt did not accept, were as follows:
(d) On 27 October 2014, that Hewitt discontinue his action and each party bear its own costs of the proceeding;
(e) On 5 May 2016, to pay Hewitt $60,000 inclusive of costs, interest and any GST in full and final settlement of his claim; and
(f) On 20 January 2017, to pay Hewitt $150,000 inclusive of all costs, interest and any GST in full and final settlement of his claim.[20]
[20]Costs reasons [6].
The hearings ran for eight days from 20 February until 1 March 2017. As mentioned, the judge delivered reasons for judgment on 17 March 2017. On 27 March 2017, the parties were heard on the issue of costs and final trial orders. The judge delivered further reasons and made final orders on 12 April 2017.
The judge concluded that there was no contract between Hewitt and Pollock or Count Financial by which Pollock or Count Financial gave financial advice. He said:
In my opinion, Hewitt did not enter into any formal retainer with Count to give him advice ...
I find that Hewitt did not ask Pollock to provide any of the services set out in the Terms of Engagement and Pollock did not agree to provide any such services. ... I consider that Hewitt did not retain Pollock or Count to give him advice.[21]
[21]Primary reasons [48]–[49].
With respect to the action in tort, the judge also concluded that ‘Hewitt has not proved the alleged negligent advice (or misstatement) was given or made ... [and thus] without the allegedly negligent conduct, the duty cannot arise’.[22]
[22]Primary reasons [57].
With respect to the alleged breach of statutory duties, the judge concluded that no statutory duty arose:
In circumstances where there was no retainer between Hewitt and Count and where, at their meeting in June 2007 Count, through Pollock, did not advise Hewitt to take out a margin loan in order to buy more units in MIT, Count did not breach any retainer, duty of care or statutory duty arising under the Corporations Act or ASIC Act.[23]
[23]Primary reasons [73].
The extension of time application
Under r 64.05 of the Rules of Court, an application for leave to appeal must be filed within 28 days after the decision was made to which the application relates, unless otherwise allowed. In accordance with the Rules of Court, an application for leave to appeal in this matter was required to be filed by 10 May 2017 in order to be within time.
Hewitt’s application for leave to appeal was accepted for filing by the Court of Appeal Registry on 22 June 2017. This was about 42 days beyond the time allowed. Hewitt filed an application for an extension of time together with his application for leave to appeal.
In Gippsreal Ltd v Kenny,[24] Kyrou JA set out the principles governing the discretionary power to grant an extension of time including a consideration of the length of the delay, the reasons for the delay, the prospects of success and any prejudice to a respondent to the application:
Pursuant to r 64.08 of the 2015 Rules, the Court has a discretion to extend the time for the filing of an application for leave to appeal. As with the exercise of any other discretion by the Court, the Court must seek to give effect to the overarching purpose in s 7 of the CP Act,[[25]] namely, to ‘facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.’ The factors that are relevant to the exercise of the discretion under r 64.08 include the length of the delay, the reasons for the delay, the prospects of the application for leave to appeal succeeding and the extent of any prejudice to a respondent.[26]
[24][2016] VSCA 65.
[25]Civil Procedure Act 2010.
[26]Gippsreal Ltd v Kenny [2016] VSCA 65 [21]; see also Jackamarra v Krackouer (1998) 195 CLR 516, 519–24.
The exercise of the discretion must be done within a framework of facilitating ‘the just, efficient, timely and cost-effective resolution of the real issues in dispute’.[27] The Court will not grant an extension of time if the application for leave to appeal ‘is so devoid of merit that it would be futile to do so’.[28]
[27]Civil Procedure Act 2010 s 7.
[28]Kambouris v Kiatos [2016] VSCA 266 [23], citing Muto v Secretary, Department of Planning and Community (2013) 38 VR 293, 296 [13] (Nettle AP and Neave JA).
The length of the delay
We have noted that there was a delay of about 42 days. Irving JR described this period of delay as ‘not insignificant’ but observed that it ‘cannot be described as inordinate’.[29] We agree that 42 days cannot be described as ‘inordinate’ but we consider it, nevertheless, to be a period that is material and requires a full explanation. It is not a trifling period of one or two days.
[29]Irving JR reasons [21].
The reasons for the delay
Hewitt’s explanation for the delay is that he attempted to file an application within the 28-day period but it was rejected as it did not comply with the Rules of Court. During the oral hearing he suggested that he thought he made two attempts to file within the 28-day period during which he was communicating with the self-represented litigants’ coordinator. During the hearing he also informed the Court that he was unable to get pro bono assistance to help him fill out the forms and prepare his written case with the consequence that he had to prepare it on his own without any assistance. He later said that he was referred to someone in the pro bono Duty Barristers scheme with whom he corresponded by email and met briefly but he was not happy with the advice he received. He then unsuccessfully sought pro bono legal assistance for the preparation of his written case and so proceeded to prepare the application and written case on his own.
Hewitt submitted that it is significant that he attempted to comply with the 28-day timeline and the consequent delay was in part explained by the need to correct the errors and omissions in the first attempt. He also relied on the complexity of the application, the fact that he is self-represented, and that he could only devote weekends to preparing his case due to his full-time work during the week as a self-employed courier with his own vehicle working for a company. All of this meant that he was unable to meet the 28-day deadline. He submitted that he was also delayed by his unsuccessful attempts to obtain legal assistance.
Irving JR was satisfied, on this basis, that Hewitt provided a reasonable explanation for the delay. We are not so satisfied. We do not consider that having a full-time occupation provides an adequate explanation for delaying the filing of an application for leave to appeal. Hewitt was well familiar with his case as presented before the County Court and, while the matter has some complexity, we do not consider that this can explain why it took 42 days beyond the permitted 28-day time limit, a total of 70 days, for an application for leave to appeal to be filed. While we take into account, in Hewitt’s favour, that he sought to comply with the 28-day period we do not consider that the particular circumstances here provide a proper basis for adequately explaining a material delay.
The prospects of success of the application for leave to appeal
Hewitt’s proposed application for leave to appeal contains multiple grounds of appeal. They are as follows:[30]
[30]All errors are in original.
1. His Honour Judge Cosgrave’s judgment and conclusions is the opposite to what the facts and evidence are that were heard and presented at trial.
2. His Honour Judge Cosgrave overlooked considerable and substantial evidence given by the applicant at trial that established and proved liability of the defendant. The strength and weight of the applicant's evidence not only established and proved the applicant’s case on the balance of probabilities, but also beyond reasonable doubt.
3. At the trial the principle witness for the defendant, Mr John Pollock, was wrongfully permitted to give evidence after he was in attendance observed the applicant give his entire evidence in chief and be cross-examined, despite the applicant’s (who was self-represented at the time) strong objections. Mr Pollock’s entire evidence should therefore be declared and ruled as being inadmissible.
4. Prior to the trial the respondent failed to comply on two separate occasions with a court order to have all parties attend mediation. The dates of these two mediation’s are 10 December 2015 and 13 December 2016. The applicant attended both mediation’s and was represented at both. Two parties of the respondent failed to comply with the court’s order to attend both of these mediation’s; Mr John Pollock and his insurer. The applicant, at the earliest opportunity he had, complained very strongly about the non-attendance at the mediation of Mr Pollock when he was self-represented at the first Directions Hearing the applicant attended on 15 January 2016.
Had the applicant been aware of the seriousness and consequences of a party not complying with a court order, he would have submitted an application for defendant’s the notice of defense be struck out and damages awarded to him. The applicant talked to his new legal team (National Compensation Lawyers) about the defendant’s non-compliance with the court order to attend mediation and the applicant requested his counsel that this be told to the presiding judge at trial. He also questioned his first legal team (Maurice Blackburn) as to why Mr Pollock was not at mediation because he expected Mr Pollock to attend mediation as he is the Financial Adviser who the applicant holds responsible for all of the damages claimed and is therefore also a party.
5. As the applicant, at the very first opportunity that he had, raised and complained about Mr Pollock’s absence from the first mediation at the first Directions Hearing he attended after the first mediation that Mr Pollock failed to attend, His Honour’s statement in his second judgment that the applicant did not raise until after judgment the issue of the defendant’s noncompliance with the court order for one of the defendant’s party (Mr Pollock) to attend mediation is wrong.
6. The applicant did not become aware of a second party who should have also attended mediation but did not, Mr Pollock’s Professional Indemnity insurer, until after the first judgment was handed down. The applicant discussed this with judge Cosgrave at the costs hearing on 27 March 2017.
7. The County Court ordered all parties to attend a second mediation, which was held on 13 December 2016. One again, the respondent did not comply with this court order as both Mr Pollock and his insurer failed to attend the second mediation which was order due to the above parties not attending the first mediation.
These grounds raise three distinct primary questions: (1) Did the judge err in his assessment of the strength and weight of Hewitt’s evidence? (2) Did the judge err in not ruling that Pollock’s evidence was inadmissible? and (3) Should the non-compliance with the court orders for mediation have led to the striking out of the notice of defence? We will deal with each of these questions separately while noting that, on an application for an extension of time, the prospects of success are not to be assessed in the detail appropriate to the full hearing of an application for leave to appeal. It must be recognised that, on an interlocutory application such as an application for an extension of time, the prospects of success are to be approached somewhat broadly.
Did the judge err in his assessment of the strength and weight of Hewitt’s evidence?
The judge was well aware that central to the success of Hewitt’s case was Hewitt’s and Pollock’s credit. This was especially so ‘[g]iven the relative paucity of relevant documents’.[31] Hewitt and Pollock were the only participants at the June 2007 meeting at which the alleged advice was said to have been given. As they had competing recollections as to what took place at that meeting, it was incumbent upon the judge to decide which version of events he could be satisfied took place.
[31]Primary reasons [13].
The judge’s findings on the credit of Hewitt were damning. He observed:
While I do not doubt his sincerity, I consider that Hewitt’s recollection of the events of June 2007 is defective and is largely a reconstruction after the event. I have grave reservations about the credit of Hewitt. [32]
[32]Primary reasons [14] (emphasis added).
He also stated:
Hewitt’s statement that the evidence was revised or reconstructed on the basis of the 2007 emails did not instil confidence in the accuracy and reliability of Hewitt’s evidence generally. [33]
[33]Primary reasons [20] (emphasis added).
He found Hewitt’s evidence to be ‘inconsistent in notable respects’. [34]
[34]Primary reasons [25].
Ultimately, the judge held that ‘in a clash between Hewitt and Pollock’, he ‘would prefer Pollock’s evidence to that of Hewitt’.[35]
[35]Primary reasons [46].
The principles governing appeals by way of rehearing to this Court were recently summarised in Southern Colour (Vic) Pty Ltd v Parr[36] in a manner which emphasised that a factual finding of a trial judge should not be overturned unless the finding is ‘glaringly improbable’ or ‘contrary to compelling inferences’:
On appeal, the Court is required to undertake a ‘real review’ of the evidence in respect of the findings made by the judge, and the reasons for the judge’s conclusions. Where the finding, that is under review, depended on the acceptance or rejection by the trial judge of the evidence of a particular witness or witnesses, the appellate court should only set aside that finding if, after making due allowance for the advantages enjoyed by the trial judge, that finding is ‘glaringly improbable’ or ‘contrary to compelling inferences’. On the other hand, in general, an appellate court is in as good a position as the trial judge to decide the proper inferences to be drawn from facts which are undisputed, or which have been established by the evidence. In deciding the proper inference to be drawn, the appellate court should, however, give respect and weight to the conclusion of the judge, but, having reached its own conclusion, it must give effect to it.[37]
[36][2017] VSCA 301 (Santamaria, Kaye and Ashley JJA) (‘Parr’).
[37]Parr [2017] VSCA 301 [78] (citations omitted), referring, among other things, to Fox v Percy (2003) 214 CLR 118, 126–27 [25], 128 [29]; Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550, 558–9 [43].
Assessing a finding made at trial as ‘glaringly improbable’ is especially difficult when the finding relates to the credit of a witness as that assessment significantly depends on the ‘advantages enjoyed by the trial judge’ in seeing and hearing the witnesses and observing their demeanour giving evidence, especially under cross-examination.
In careful and detailed reasons, the judge explained why he had grave reservations about Hewitt’s credit, including:
· there was a substantial disparity in the number of MIT units Hewitt initially said he owned in mid-2007 (5,100) and later accepted as correct (37,000);[38]
[38]Primary reasons [18].
· there were two significant matters which Hewitt asserted in 2013 that he ‘clearly and distinctly’ recalled (namely, that Pollock advised him to use his available cash savings to buy more MIT units and obtain a Commonwealth Bank margin loan) but he acknowledged at the trial that these matters were false;[39]
[39]Primary reasons [16]-[17].
· Hewitt agreed that, to an extent, his evidence was reconstructed by reference to documents, the details of which he had forgotten;[40]
[40]Primary reasons [19].
· there was an absence of any reference to his wish to buy property in a letter Hewitt sent to Pollock on 20 July 2013;[41]
[41]Primary reasons [21].
· the first occasion upon which Hewitt raised the allegation that his investment goal had been to purchase a house arose only in January 2017;[42]
[42]Primary reasons [22]-[23].
· Hewitt was ‘too flexible in changing his claim from time to time when it became apparent that a particular version of his claim (or part thereof) was not sustainable’;[43]
· there was inconsistency in Hewitt’s evidence in notable respects (for example, in his Amended Particulars of Loss and Damage he removed the claim for loss of opportunity to make capital growth and changed the loss of opportunity claim to one from buying a Wantirna property for $315,150 to buying a Wantirna property for $300,000 and the explanation he gave for the change was that his lawyers had acted without instructions — this prompted the judge to grant leave to Hewitt’s lawyers to cease to act for him);[44]
· there were inaccuracies in Hewitt’s income tax returns for the financial years ending 30 June 2007, 30 June 2008, and 30 June 2009 (including a failure to disclose dividend earnings received from the MIT units in his tax returns for the financial years ending 30 June 2008 and 30 June 2009)[45] — the judge found that Hewitt’s explanations ‘were not credible ... [w]hether he was fabricating his responses ... or simply making errors, the result of these inconsistencies is that Hewitt’s testimony cannot be safely accepted as reliable or accurate’.[46]
[43]Primary reasons [24].
[44]Primary reasons [25]-[30].
[45]Primary reasons [31], [33]-[34].
[46]Primary reasons [40].
We consider that it cannot be said that the judge’s conclusion that he ‘would not be comfortable accepting Hewitt’s evidence without corroboration’[47] or that he did ‘not regard Hewitt as a credible and reliable witness’[48] are ‘glaringly improbable’ or ‘contrary to compelling inferences’.[49] With respect, it seems to us that the judge’s conclusions about Hewitt’s credit and reliability were well open to him. It is clear that the judge based his assessment of Hewitt upon the whole of the evidence. In particular, the judge noted that his concerns with respect to Hewitt’s reliability arose from his observations of Hewitt during the course of the evidence he gave, including his demeanour. Those observations included:
[47]Primary reasons [42].
[48]Primary reasons [42].
[49]Parr [2017] VSCA 301 [78].
·the concern [Hewitt] expressed about remembering events which took place more than nine years ago at the meeting with Pollock;
·the misplaced certainty Hewitt expressed previously in his recollection of events;
·the obvious fluidity in Hewitt’s recollections;
·the admitted reconstruction of his evidence based not on memory of actual events but on documents which he viewed subsequently;
·Hewitt’s demeanour in the witness box over an extended period in which he was frequently longwinded and evasive and failed to grapple directly with the propositions put to him; and
·the inconsistencies in Hewitt’s evidence.[50]
[50]Primary reasons [42].
We consider that there is no merit in this issue.
The findings on credit have important implications for Hewitt’s application for leave to appeal. Hewitt submitted that the judge omitted to address his submission that Count Financial was grossly negligent in failing to give him a Statement of Advice, a financial needs analysis and a risk profile assessment. However, we consider that there was no need for the judge to address these matters. The judge concluded that there was no retainer between Hewitt and Count Financial, and that no advice was given, on the basis of his conclusions on credit, as we have set out and which we consider were open to him. In those circumstances, the judge did not have to go on to make further particular findings on the matters Hewitt identified as the judge wholly rejected the existence of a legal relationship between the parties that would have given rise to the relevant obligations. Furthermore, as Hewitt’s fundamental claims have been wholly rejected any dispute about the application of limitation periods to those claims (mentioned by the judge and contested by Hewitt) is of no consequence.
Did the judge err in not ruling that Pollock’s evidence was inadmissible?
Hewitt submitted that, given the significance of Hewitt’s and Pollock’s competing evidence, the judge should have excluded Pollock from the Court while Hewitt was giving evidence.
Hewitt gave evidence over several days during the trial. He was represented by counsel and a solicitor until late on day three. On the first day, Pollock was present in court, but Hewitt was not aware that it was him. At the end of the first day, Hewitt asked who had been present in court and when he discovered it was Pollock he submitted that he expressed concerns to his counsel. Cross-examination of Hewitt commenced late on day one, for a short period of time and extended for all of day two. On day three there was the application by Hewitt’s lawyers to cease to act. Day four involved short submissions and an adjournment for Hewitt to obtain advice. Cross examination of Hewitt recommenced on day five and was completed on day five. Pollock was present in the Court on all those days.
Hewitt made an objection when Pollock was called to give evidence as Pollock had heard all of Hewitt’s evidence. Hewitt again objected before final orders were made.
Pollock was not joined as a party to the proceeding. The sole defendant was Count Financial. The judge observed that Pollock was in a practical sense, the representative of Count Financial in Court and the source of its legal instructions. He said:
Pollock was an authorised representative [of Count Financial] who was licensed to act as a financial advisor by reason of his association with Count. He was the critical person involved in the transaction with Hewitt and the person, who if disbelieved, would have caused the court to find Count liable to Hewitt. Therefore, in a practical sense, Pollock was the representative of Count and, unless he was allowed to remain in court to watch the case and instruct Count’s legal representatives, Count would have had no person in court able to provide instructions.[51]
[51]Cost reasons [51].
Hewitt submitted before this Court that Pollock’s evidence should have been ruled inadmissible because he was present while Hewitt gave his evidence.
We consider that this issue has no prospect of success. There is no absolute rule that a witness is to be ordered out of court until required to give evidence. A court has a discretionary power to order a witness out of court but this is typically exercised upon the application of a party. Hewitt made no application, either through his lawyers or on his own behalf when he became self-represented, for Pollock to be ordered out of court while Hewitt gave his evidence. During the time that Hewitt gave his evidence in chief, and to the end of day two of the trial, Hewitt was represented by counsel. We consider that in those circumstances Hewitt waived his right to apply for an order that Pollock remain outside the court until required to give evidence. In any event, for a witness to remain in court does not render that witness’s evidence inadmissible, even where the witness disobeys an order and even more so where there is no order.[52] There remains scope for the circumstances to be taken into account with respect to the weight of the evidence, as occurred here.
Should the non-compliance with the court orders for mediation have led to the striking out of the notice of defence?
[52]R v Briggs (1930) 22 Cr App R 68 (UK Court of Criminal Appeal); R v Thompson [1967] Crim LR 62 (UK Court of Appeal (Criminal Division)).
Hewitt complained that Count Financial breached court orders for mediation[53] by reason of the absence of Pollock and/or a representative of the insurer for Count Financial to attend in person at the first mediation conducted on 10 December 2015 and the second mediation conducted on 13 December 2016.
[53]The orders provided to this Court fixing the various dates by which the mediations were to be completed include: (1) an order of Judge Kennedy made on 6 August 2014; and (2) orders of Judge Anderson made on 25 August 2014 and 3 September 2014. The Court has also been provided with an order of Burchell JR made on 19 June 2015 and an order made on 5 October 2016 referring the proceeding to a Judicial Resolution Conference on 13 December 2016.
In this instance the relevant orders for mediation only required ‘the parties’ to attend mediation. With regard to the first mediation, which took place on 10 December 2015, Judge Kennedy, on 6 August 2014, when setting the matter down for trial in February 2015, ordered (at [9]) that:
By 20 February 2015, the parties must have completed the mediation of the dispute.
On 25 August 2014 Judge Anderson amended [9] of Judge Kennedy’s orders to read:
By 20 January 2015, the parties must have completed the mediation of the dispute.
On 3 September 2014 Judge Anderson vacated the trial date and refixed the trial for 13 April 2015 and ordered that:
The time for the parties to have completed the mediation of the dispute is extended to 20.02.15.
On 19 June 2015 Burchell JR vacated the trial date of 13 April 2015 and refixed the hearing for 2 February 2016. She also extended the time for the completion of the mediation:
The time for parties to mediate the dispute is extended to 22 September 2015.
It would appear that the time for the completion of mediation was later extended again to allow for a mediation on 10 December 2015. The trial date of 2 February 2016 was later vacated and a new trial date of 10 October 2016 was fixed.[54] That trial date was also vacated and on 5 October 2016 Burchell JR refixed the proceeding for trial on 20 February 2017 with priority on the condition that there be no further adjournments on application by Hewitt. An order was also made for Hewitt to file and serve his valuation expert report. With respect to the second mediation, Burchell JR ordered that:
If the parties comply with paragraphs 3 to 6 of these orders, the proceeding be referred to a Judicial Resolution Conference on 13 December 2016 at 11:30 am.
[54]It appears that there was at least one intermediate order, made by Tran JR, which vacated the trial date of 2 February 2016 and refixed it to commence on 9 May 2016.
There was compliance with orders 3 to 6, including the filing of Hewitt’s expert report and an exchange of correspondence about proposed further supplementary reports. The second mediation took place on 13 December 2016.
As mentioned, on the third day of trial the judge raised the issue of a third mediation by way of a concern about the costs being expended. He said:
The costs in this case, it seems to me, are going to be fairly extensive, having regard to the history of the case. It’s apparent from the court file, or files plural, that the matter has generated a lot of paper. The matter has been prepared for trial on several occasions and that can only make the matter fairly expensive. So you’ve got the historical costs, you’ve got the future costs of being in court for, I suspect by the time submissions are finished, the better part of next week and so it seemed to me timely for the parties to reflect upon the difference between the best-case and worst-case scenarios which they face, including the cost component of those scenarios.
Accordingly, it is for that reason that I was proposing to raise with the parties today whether there was any benefit in having some formal or informal further negotiation or mediation, that way the parties still have some control over the outcome of the litigation.
After submissions were made to the effect that there was likely to be utility in another attempt at mediation, the judge contacted Burchell JR and arranged for the mediation to occur in the courtroom, for the convenience of the parties. When he was later informed that the mediation had been unsuccessful, the judge resumed the hearing. It emerged during the course of the hearing in this Court that Pollock had attended this third mediation. Hewitt’s complaint was that as Pollock sat at the back of the room and not across a table he was not sufficiently in attendance.[55] We reject this proposition.
[55]Hewitt said: ‘as far as I’m concerned, he wasn’t there’.
In any event Pollock was not obliged to attend any of the mediations. It is apparent that the orders for mediation did not extend to Pollock personally; as mentioned, Pollock was never joined as a party to the proceeding. He was therefore not legally obliged to attend any mediation or judicial resolution conference, nor to face risk of contempt of court by disobeying an order.
For these reasons, we consider that there is no merit in this issue.
Prejudice to the respondent
In addressing the issue of prejudice likely to be suffered if an extension of time were granted, Count Financial relied on the likely irrecoverability of any costs it would incur in resisting the application for leave to appeal. However, the question of whether costs were recoverable from Hewitt would have been live even if the application for leave to appeal had been filed within time (and may have been able to be addressed by a security for costs application which, if an order was made and not honoured, could have led to a stay of the proceeding).[56] Count Financial did not identify any particular prejudice it would suffer if the extension of time application was granted by comparison with the position it would have been in had the application for leave to appeal been brought within time.
[56]Hewitt conceded that it would be impossible for him to meet any costs order.
Conclusion
We have concluded that the delay in filing the application for leave to appeal required a full explanation and that the explanation relied on by Hewitt was inadequate. We have further concluded that there are little to no prospects of Hewitt’s application for leave to appeal succeeding. In those circumstances, we refuse an extension of time. We consider that the application for leave to appeal is so devoid of merit that to grant an extension of time would be futile.
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