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LIMITED DISTRIBUTION
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CATCHWORDS
PRACTICE AND PROCEDURE - Application for leave to appeal from
the decision of a single judge refusing to vacate a trial date
| - principles to be applied | - weight to be given to the views |
of the judge at first instance - application made to enable
simulation of a computer system - importance of simulation in
| the conduct of the trial - whether simulation within | the |
| ordinary rules of practice and procedure adopted | by the court. |
Ahern v. Deputy Commissioner of Taxation (Qld) (1987) 76
A.L.R. 137
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Federal Court of Australia Rules - 0.34
| Federal Court of Australia | Act - s.25(2) | I ' |
HONEYWELL HOLDINGS PTY LIMITED v, ASSOCIATED NEWSAGENTS
CO-OPERATIVE LIMITED & OTHERS
No. G1056 of 1988
| Davies, Sheppard and Burchett | JJ. |
| 8 July 1988 |
| Sydney |
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LIMITED DISTRIBUTION
| IN THE FEDERAL COURT OF AUSTRALIA | ) |
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| NEW SOUTH WALES DISTRICT REGISTRY | |
| 1 |
| B ETWEEN : | H | mELL HOLDINGS PTY |
| - | - | L | CED |
| - | - |
Appellant
| - | ASSOCIATED NEWSAGENTS
CO-OPERATIVE LIMITED
(RECEIVER AND MANAGER
APPOINTED) |
AND :
First Respondent
| AND : | BERSAND ONLINE SERVICES |
| - | PTY LIMITED |
Second Respondent
AND :
Third Respondent
| - | AND : | EXATRON PTY LIMITED |
Fourth Respondent
| CORAM: | Davies, Sheppard and Burchett JJ. |
| - | DATE : | 8 July 1988 |
| PLACE: Sydney | REASONS FOR JUDGMENT |
EX TEMPORE
| Davies J.: | This is an application for leave | to appeal from a |
| decision of a single Judge of | the Court who refused | an |
| application to vacate 1 August 1988 as the date of the trial | of |
proceedings brought by the first respondent ("Ancol"), against
the applicant ("Honeywell") and the other respondents.
The proceedings were brought by Ancol against Honeywell
and the three other respondents with respect to the supply to
Ancol of a computer based videotex system. The system was
intended to be accessible by newsagent members of Ancol for the
| purpose of keeping their accounts, | for ordering supplies and for |
other purposes. The system was installed about April 1985 and
became operational in August 1985. It was abandoned by
| Associated Newspapers in July | 1986, being regarded by Associated |
Newspapers as irredeemably unsatisfactory. The maximum
| utilisation of the | syst-em was in March 1986 | when about 100 |
members of Ancol were using the system.
Honeywell had supplied the hardware and had some role
with respect to software, although the other respondents also had
| I | responsibilities in that regard. In his reasons for decision, |
| the learned trial judge mentioned | that:- | |
| "During the period of operation there was | a Honeywell | : , |
| officer designated as project manager. He | was employed |
| full time for portion of the | period. Honeywell also |
| kept a diary of problems notified to the company in |
| relation to the system | and in regard to the action taken |
to meet those problems. This diary has been discovered
and apparently sets out numerous items. It also is
said, and accepted on behalf of Honeywell, that, during
| this period, the company | flew out experts from | France. |
from time to time to investigate the complaints. In
about December 1985 a newstex steering committee was
established; the word 'newstex' referring to the code
name of the system. This committee consisted of a
| Honeywell representative, | Mr Dawson, who is the third |
respondent, and a principal of the second respondent and
an Ancol representative. This committee met regularly
and minutes were kept. Apparently the committee dealt
| with problems which were | being experienced." |
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| The trial was first fixed for | 1 July 1988, but his |
| Honour later postponed that to | 1 August 1988 to give Honeywell |
more time to prepare. On 25 May 1988, counsel for Honeywell informed the trial Judge that Honeywell Intended to make application to vacate the hearing date to enable Honeywell to conduct a simulation of the computing system in order to obtain
evidence relevant to the case. On 23 June 1988, his Honour
refused the motion and it is from that decision that leave to
appeal IS sought.
| The principles to be applied by this Court | on such an |
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| application for leave were stated | in Ahern v. Deputy Commissioner | S | . |
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| of Taxation (Qld), (1987) 76 A.L.R. | 137 at pp.146-7, by Davies, |
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| Lockhart and Neaves | JJ. as follows:- |
;. .
| "The decision whether or not to adjourn | the hearing of |
| the petition was within the discretion of the primary | ! .' |
| judge. | It is well established that an appellate court |
| will rarely interfere with | a trial Judge's exercise of |
discretion upon an application for adjournment.
However, the refusal to grant an adjournment may in some
cases prevent the party seeking it from presenting his
case or defence and in some circumstances this may
result in injustice of such kind or magnitude as to
warrant interference on appeal. In Maxwell v. Keun
[l9281 1 K.B. 645 Aitkin L.J. said (-653):
| "I quite agree the Court of Appeal ought to | be very |
| slow indeed to interfere | with the discretion of | the. |
learned judge on such a question as an adjournment of a trial, and it very seldom does do so; but, on
| the other hand, if it appears that the result | of |
| the order made below | is to defeat the rights | of the |
| parties altogether, and | to do that which the Court |
| of Appeal is satisfied would | be an 1nJustice to one |
or other of the parties, then the Court has power to review such an order, and it is, to my mind, Its duty to do s o . "
In Bloch v. Bloch (1981) 55 A.L.J.R. 701 Wilson J. at
| 703, with whose Judgment Gibbs C.J., Murphy and Aickin | - |
| JJ. agreed, described this passage from the judgment | of |
| Aitkin L.J. as stating 'the rule in terms which have | won |
| general acceptance.' |
| Similarly, in Walker | v. Walker 119671 1 W.L.R. | 327 Sir |
Jocelyn Simon P. said at 330:
'First where the refusal of an adjournment would
result in a serious injustice to the party
| requesting the adjournment, the adjournment should | _. |
only be refused if that is the only way that
justice can be done to the other party; and,
secondly, that although the granting or refusal of
an adjournment is a matter of discretion, if an
appellate court is satisfied that the discretion
has been exercised in such a way as would result in
an Injustice to one of the parties, such appellate |
| court has both the power and | the duty to review the | . |
| exercise of the discretion.' |
| A related principle, though derived from | a different |
| stream of authority, was expressed in Cameron | v. Cole |
| (1944) 68 C.L.R. | 571 by Rich J. (at 58iTJTiTEhtheseterms: |
| 'It is a fundamental principle | of natural justice, |
| applicable to all courts whether superior | or |
inferior, that a person against whom a claim or
| charge is made must | be given a reasonable |
| opportunity of appearing and | pre'senting his case.' |
To similar effect, Dixon C.J. and Webb J. said in
| Commissioner of Police v. Tanos (1958) 98 | C.L.R. 383 at |
| 395: |
| I . . . | it is a deep-rooted principle of the | law that |
| before anyone can be punished | or prejudiced in his |
person or property by any judicial or
| quasi-judiclal proceeding he must | be afforded an |
| adequate opportunity of being | heard.' |
| See also Taylor v. Taylor (1979) 143 C.L.R. | 1 per Gibbs |
| J. at 4. |
| The principles that guide | a court when sitting | on an |
appeal from a discretionary order or judgment have been
referred to many times. The Drinciules are summarised
by Kitto J. in hstralian Coai and 'Shale Employees'
Federation v. Commonwealth (1953) 94 C.L.R. 621 at 627:
| 'I | shall not repeat the references | I made in Lovell |
| v. Lovell (1950) 81 C.L.R. | 513, at pp.532-4 to |
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| cases of the highest authorlty which appear to | me |
| to establish that the true principle limiting the | ; , |
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| manner in wich appellate jurisdiciton is exercised |
| in respect of decisions involving discretionary | l |
| judgment is that there is | a strong presumption in |
favour of the correctness of the decison appealed
| from, and that that decision should | therefore be |
| affirmed unless the court | of appeal is satisfied | l ' |
| that it is clearly wrong. A degree of satisfaction | L |
| sufficient to overcome the strength | of the |
| presumption may exist where there | has been an error |
| which consists in acting upon | a wrong principle, or |
givlng weight to extraneous or irrelevant matters,
| or failing to give weight | or sufficient weight to |
| relevant considerations, | or making a mistake as to |
| the facts. | Again, the nature of the error may not |
be discoverable, but even so it is sufficient that
| the result is | so unreasonable or plainly unjust |
that the appellate court may infer that there has been a failure properly to exercise the discretion
| which the law reposes | in the court of first |
.
| instance. House v. | The King (1936) 55 C.L.R. 499 | I. |
| at pp.504-5.' |
| This passage was cited with approval in the joint | .~, |
| judgment of the Full Court of the High Court | in Rod ers | .. |
| v. Rodgers (1964) 114 C.L.R. | 608 at 619-20. See | + | a so |
| Niemann v. Electronic Industries Ltd [l9781 | V.R. 431, |
| especially |
| See also Adam P. Brown Male Fashions Pty Ltd b. Philip Morris Inc | I |
| & Anor (1981) 148 C.L.R. 170 at pp.176-7 and Squire v. Rogers |
| (1979) 39 F.L.R. | 106 at pp.103-4. |
| The weight which | is given, in respect of the questions |
arising under an application for an adjournment, to the views of the judge at first instance was emphasized by the Full Court In
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| Mudginberri Station Pty Ltd v. Australasian Neat Industry |
| Employees' Union (1986) 12 F.C.R. 10 at pp.12-13. | At p.13, the |
| joint judgment of | the Court states:- |
"Where there is no question of absence of jurisdiction,
| breach of the rules of natural justice, | or other |
positive error, a mere refusal of an adjournment can very rarely, we thlnk, be a fit subject for a grant of leave to appeal."
The case put to his Honour for the adjournment was that
a major issue at the trial would be whether defects in the
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computing system arose from the equipment which Honeywell had
supplied or, on the other hand, from the software designed by the
| third respondent, Mr B.J. | Dawson, and supplied by the second |
| respondent, Bersand Onllne Services Pty Limited. The case | was |
| put that, as the hardware and software were available in |
| substantially, though not entirely, | the form in which they had |
| been supplied, it would | be possible to prepare and institute | a |
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programme which would simulate the operating conditions
| encountered when the computing system | was used by Ancol. It was |
said that if the simulation were properly structured and
| appropriate tests were devised, | it should be possible to |
ascertain where the faults in the system lay.
Provided that an effective and usefui simulation could
| be achieved, it no doubt would not matter that there would not | be | I |
| complete identity between the test equipment | and that actually |
| used by Ancol. | However, the evidence before the trial Judge left |
much in doubt. The programme for the simulation had not been
| worked out. | The assumptions to be made had not been agreed. The |
| objectives and specific goals of the simulation had | not been |
| finally identified or settled. The evidence | was that from May to |
12 August 1988, time would be spent identifying more precisely
| what the model had to simulate and | what Components the model must |
| have in it in order to provide an effective simulation. Then, | ! |
| from 12 August to 2 4 December 1988, time would be spent writing |
| programmes and runnlng the initial trials. It would then be | .... |
necessary for the programmes to be audited to ensure that each
programme properly recreated the environment it was intended to |
| simulate. | Mr P.K. MacGregor, the expert witness called in this |
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| application on behalf of Honeywell, | was unable to say when any |
| decision would be taken as to whether the simulation would | be |
| used by Honeywell for the purpose of seeking to determine whether | . , |
| op rating | the | computer | system | was running | correctly. | : I |
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As to the use of the simulation, Mr MacGregor gave this
| "And do you have a view as to whether the simulation will | . ,. |
| have any - will give you any assistance in forming | a | i ' |
view as to the capacity of the system?---Yes it would.
| Why would it do that?---It would allow us to measure the | I . |
| capacity of the system over | a range of rates of |
| submission of transactions and over | a range of different |
| transaction | types. | i', |
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| And why is that a significant matter in the context of | I : |
| the complaints that Ancol makes?---As | I understand it, |
| one of the complaints which Ancol makes | is that the | 1 . |
| system had insufficient capacity to handle more | than, I | ; |
| believe, 50 users, under certain conditions which | are | I |
specified in the complaint and the simulation would
allow us to test that claim."
| The trial judge came to the | view that, if the simulation |
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| were allowed, it would be as likely to interfere | with the fair . |
| trial of the proceedings as to assist it. | His Honour said:- |
| "It is clear | to me that the development and operation of |
| a network load simulator would | be of assistance in |
| answering some of | the questions which arlse in the |
proceeding. But it is equally clear -- and indeed
conceded by Mr MacGregor, who has given evidence on
| behalf of Honeywell -- that the utility | of the simulator |
| will depend upon it being either conceded or found that | r : |
| the specificatlon and the program used in developing | the | ! |
simulator do fairly reflect the system which was
installed in 1985. As to that matter, one can only say
that it ought to be possible for the specification, and
subseqently the program, to be submitted for examination
by one or more experts retained by Ancol. But, in
| respect of at least some | Items, Mr MacGregor has |
| conceded that competent people might differ | as to the |
appropriateness of what is proposed. I can-only say
| that the evidence | does not satisfy me that it would be |
| possible to avoid the undesirable situation | at a trial |
| of having a separate question arise as to whether | the |
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| simulation is in fact | a fair representation of the | I . |
original system. Were such an issue to arise, it could
have the effect of distracting attention from the
principal question -- the adequacy of the original
system to comply with the requlrements accepted on
behalf of the respondents -- and, of course, this
| diversion could considerably extend | the length of the |
trial and its cost. If I were of the view that a
simulation could be undertaken which would very likely
answer all the problems of the trlal, there would be
considerable temptation in postponing the trial for
sufficient time to allow the simulatlon to occur.
However, it 1s clear that this is not so. I think that
it may turn out that the simulation provides little
ultimate assistance; and even perhaps a disadvantage in
the ultimate resolution of the issues between the
parties."
| I agree with the view taken | by his Honour. The |
simulation would, if anything, tend to dlstract attention from what was said and done and known at the time of the transactions which are the sublect of the proceedings. The proceedings are
based principally upon representations made by or on behalf of
| Honeywell. | At the trial, it will be necessary for the trial | I. . |
| Judge to determine what representations were made | by or on behalf |
of Honeywell and what equipment, hardware or software was
| supplied by or | on behalf of Honeywell | o r by others within the |
| ambit of the Honeywell representations. And it will then be | t . . |
| necessary to ascertain whether the representations were false, |
| misleading or deceptive or likely to mislead or deceive. | By |
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directing attention of the experts away from the facts as they
| occurred and the knowledge | as it stood at the time to the |
| assumptions in the programmes | of and the other technicalities of |
| the simulation, the simulation would | be likely to detract from | a |
| proper trial of the proceedings. |
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| The proposal for the simulation | was outside the ordinary |
| rules of practice and procedure adopted | by courts. The | i |
simulation was not intended as part of the discovery and
inspection of equipment held by an opposite party. Discovery of
equipment held by others, including software, was available. The
application for the adjournment was not sought to ascertain what
had occurred in the past but to permit further investigation to
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| determine what were the causes | of the failures which had |
| occurred. |
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| If any such simulation were to take place, | it could |
| appropriately take place pursuant to an order under Order | 3 4 of |
the Federal Court Rules, that is to say, by an expert appointed
by the Court. That is because, if the Court thought it proper
| that an issue of fact in the case should be resolved by the | i ' |
making of further tests, it would be appropriate for the Court to
appoint an independent expert who would develop the assumptions, |
| programmes and procedures for the carrying out | of the necessary |
| tests. | In that way, the making | of the tests would form a part of |
the decision-making process and the problems which the trial
| Judge foresaw under the present proposal would | be avoided. The |
| motion put on behalf of Honeywell | was not a motion for the |
| appointment of a Court expert under | 0 . 3 4 . | If in the course of |
the proceedings it becomes appropriate to have an issue of fact
determined by an expert in some manner, as by carrying out a
simulation, that course is one which 1s still open and any party
| may apply to the trial Judge under | 0 . 3 4 . | However, the trial |
| Judge would not make an order appointing a court expert unless | he |
| was satisfied that in all the circumstances | of the case it was |
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| appropriate to do so. | There may well be other means, whether | by |
| order of the | Court or by agreement of the parties, whereby the |
| simulation could take place | if the trial Judge thought it |
| appropriate that it should do | so. | However, his Honour was of the |
| view, at the time of the appllcation before | him, that the |
carrying out of the simulation was not appropriate. That view
| was open to his Honour on the materlal before him | and, with | ' _ |
| respect, it was correct. | . | I ' |
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| His Honour also rejected the adjournment | on the basis of |