Lavin v Toppi

Case [2016] FCA 801

FEDERAL COURT OF AUSTRALIA

Lavin v Toppi [2016] FCA 801

Appeal from: Application for extension of time and leave to appeal: Paola Toppi & Anor v Dolores Lavin [2016] FCCA 830
File number: NSD 691 of 2016
Appeal from: Application for leave to appeal: Toppi & Anor v Lavin (No. 2) [2016] FCCA 1109
File number: NSD 692 of 2016
Judge: GLEESON J
Date of judgment: 13 July 2016
Catchwords:

BANKRUPTCY AND INSOLVENCY – Application for extension of time and leave to appeal refusal to discharge examination summons – leave to appeal from a discretionary judgment - application refused

PRACTICE AND PROCEDURE – Leave to appeal from a judgment dismissing application for non-publication orders – fact finding and weight to be given to evidence – principle of open justice – judgment not attended by sufficient doubt to warrant its reconsideration – application refused

Legislation:

Bankruptcy Act 1966 (Cth)

Federal Court of Australia Act 1976 (Cth)

Cases cited:

Basecove Pty Ltd v Dolores Lavin Management Pty Ltd [2009] NSWSC 1315

Cooper v Winter [2013] NSWCA 261

Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397

Dye v Commonwealth Securities Limited (No 2) [2010] FCAFC 118

Geste v Pereira [1991] SASC 3018; (1991) 161 LSJS 260

Hogan v Australian Crime Commission [2009] FCAFC 71

House v The King  [1936] HCA 40; (1936) 55 CLR 499

JMP v The Queen [2005] NTSC 83

Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564; [2000] FCA 1572

Johnston v Cameron [2002] FCAFC 251; (2002) 124 FCR 160

Love v Roads Corporation [2014] VSCA 129

Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705

R v Hakim (1989) 41 A Crim R 372Ramsay v Watson [1961] HCA 65; (1961) 108 CLR 642

Ramsay v Watson [1961] HCA 65; (1961) 108 CLR 642

Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238; [2011] FCAFC 156

Sekigawa v Minister for Immigration [2016] FCA 127; (2016) 237 FCR 276

Sharman License Holdings Ltd v Universal Music Australia Pty Ltd [2005] FCA 802

Sheahan (Trustee) v Scott, In the matter of Livingstone [2002] FCA 1440

WAAD v Minister for Immigration & Multicultural Affairs [2002] FCAFC 399

Watson v A-G (NSW) (1987) 8 NSWLR 685 at 703; (1987) 28 A Crim R 332
Date of hearing: 23 June 2016
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 85
Counsel for the Applicant: Mr GD McDonald
Solicitor for the Applicant: Gavin Parsons & Associates
Counsel for the Respondent: Mr M Pesman SC with Mr C Alexander
Solicitor for the Respondent: Beazley Boorman Lawyers

ORDERS

NSD 691 of 2016 NSD 692 of 2016
BETWEEN:

DOLORES LAVIN

Applicant
AND:

PAOLA TOPPI

First Respondent

NEIL CUNNINGHAM

Second Respondent

JUDGE:

GLEESON J

DATE OF ORDER:

13 JULY 2016

THE COURT ORDERS THAT:

1.The application…

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AGLC
Lavin v Toppi [2016] FCA 801
Case
[2016] FCA 801
Decision Date

CaseChat Overview and Summary

Lavin v Toppi is a case where the Federal Circuit Court (FCCA) considered an application for leave to appeal against decisions that refused to discharge examination summonses and non-publication orders. The applicants sought to appeal the decisions of the FCCA judges, who had exercised their discretion in denying the applicants' requests. The primary issues for the court were whether there was sufficient doubt to warrant reconsideration of the FCCA judges' decisions and whether the principles of open justice and the weight to be given to expert evidence were correctly applied.

The court emphasised that leave to appeal from a discretionary judgment requires the applicant to demonstrate that the primary judge acted on a wrong principle, allowed irrelevant matters to influence the decision, mistook the facts, failed to consider material considerations, or reached an unreasonable or unjust result. The court further explained that a court is not bound by expert opinion and must weigh the evidence to determine the probabilities. In this case, the FCCA judge was justified in not accepting the expert's opinion as it was not supported by the applicant's own evidence and was inconsistent with other evidence. The court concluded that the FCCA judges' decisions were not attended by sufficient doubt to warrant reconsideration.

The court dismissed the application for leave to appeal and discharged the orders made by the FCCA judges. The funds held in the controlled monies account were ordered to be released to the respondents immediately. The decision underscores the importance of the principles of open justice and the proper application of expert evidence in discretionary judgments.

Orders

Orders of the court

1. The application for leave to appeal in proceeding NSD 692 of 2016 be dismissed with costs.

2. In proceeding NSD 691 of 2016 orders 2 and 3 made by Katzmann J on 13 May 2016 and order 1 made by Markovic J on 17 May 2016, as varied by me on 24 June 2016 be discharged.

3. In proceeding NSD 692 of 2016, orders 2 and 3 made by Katzmann J on 13 May 2016 and order 1 made by Markovic J on 17 May 2016, as varied by me on 23 June 2016 be discharged.

4. The funds held in the controlled monies account pursuant to the orders made by Markovic J on 17 May 2016 be released to the respondents forthwith.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Each of the judgments concerned an application to the FCCA to exercise a discretionary power. In those circumstances, the applicant must demonstrate sufficient doubt that, in failing to be satisfied that the relevant powers should be exercised, the primary judge:(a)acted upon a wrong principle;(b)allowed extraneous or irrelevant matters to guide or affect him;(c)mistook the facts;(d)did not take into account some material consideration; or(e)reached a result that is plainly unreasonable or unjust: House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505.Fact finding and the weight to be given to evidence It is not the case that a court is always required to accept as “paramount” an expert opinion, even if that opinion is based upon the observations of the expert, as Mr McDonald, counsel for the applicant, suggested. In Ramsay v Watson [1961] HCA 65; (1961) 108 CLR 642 at 645, the High Court said:That some medical witness should go into the box and say only that in his opinion something is more probable than not does not conclude the case. A qualified medical practitioner may, as an expert, express his opinion as to the nature and cause, or probable cause, of an ailment. But it is for the jury to weigh and determine the probabilities. In doing so they may be assisted by the medical evidence. But they are not simply to transfer their task to the witnesses. They must ask themselves “Are we on the whole of the evidence satisfied on a balance of probabilities of the fact?” At 649, the High Court continued:… if the man whom the physician examined refuses to confirm in the witness box what he said in the consulting room, then the physician's opinion may have little or no value, for part of the basis of it has gone. Each case depends on its own facts. In Geste v Pereira [1991] SASC 3018; (1991) 161 LSJS 260 (“Geste”), after reviewing the authorities, Cox J concluded:… there is no general rule that a trial judge (or a jury if there is one) is bound in law to decide a case in conformity with the expert evidence, even where the evidence is uncontradicted.Whether in a particular case the judge will be justified in preferring his own opinion to that of the only expert witness in the case is likely to depend on the nature of the evidence. If the expert is giving evidence on a subject quite outside common experience and about which only a person with special training could have any knowledge whether an analysed specimen contains blood, for instance, or how a nuclear reactor works, or whether someone is suffering from a particular disease – it is not easy to see how such evidence, apparently plausible, could simply be ignored. If the judge should ignore it, or give it insufficient weight, his decision might well be set aside on appeal as perverse. Often, however, an expert’s opinion is based not merely upon his special knowledge but also upon the application of that knowledge to a given set of observed or assumed facts. It may be that at that later stage the judge will be in as good a position as the expert to form a sound judgment or opinion on the matter. An important question, of course, will be whether the expert’s observations or assumptions were correct.

Decision

Reasons for decision

These considerations are cumulative, so that leave to appeal will not be granted unless both limbs are made out: Sekigawa v Minister for Immigration [2016] FCA 127 at [12]; (2016) 237 FCR 276.Leave to appeal from discretionary judgments Each of the judgments concerned an application to the FCCA to exercise a discretionary power. In those circumstances, the applicant must demonstrate sufficient doubt that, in failing to be satisfied that the relevant powers should be exercised, the primary judge:(a)acted upon a wrong principle;(b)allowed extraneous or irrelevant matters to guide or affect him;(c)mistook the facts;(d)did not take into account some material consideration; or(e)reached a result that is plainly unreasonable or unjust: House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505.Fact finding and the weight to be given to evidence It is not the case that a court is always required to accept as “paramount” an expert opinion, even if that opinion is based upon the observations of the expert, as Mr McDonald, counsel for the applicant, suggested. In Ramsay v Watson [1961] HCA 65; (1961) 108 CLR 642 at 645, the High Court said:That some medical witness should go into the box and say only that in his opinion something is more probable than not does not conclude the case. A qualified medical practitioner may, as an expert, express his opinion as to the nature and cause, or probable cause, of an ailment. But it is for the jury to weigh and determine the probabilities. In doing so they may be assisted by the medical evidence. But they are not simply to transfer their task to the witnesses. They must ask themselves “Are we on the whole of the evidence satisfied on a balance of probabilities of the fact?” At 649, the High Court continued:… if the man whom the physician examined refuses to confirm in the witness box what he said in the consulting room, then the physician's opinion may have little or no value, for part of the basis of it has gone. Each case depends on its own facts. In Geste v Pereira [1991] SASC 3018; (1991) 161 LSJS 260 (“Geste”), after reviewing the authorities, Cox J concluded:… there is no general rule that a trial judge (or a jury if there is one) is bound in law to decide a case in conformity with the expert evidence, even where the evidence is uncontradicted.Whether in a particular case the judge will be justified in preferring his own opinion to that of the only expert witness in the case is likely to depend on the nature of the evidence. If the expert is giving evidence on a subject quite outside common experience and about which only a person with special training could have any knowledge whether an analysed specimen contains blood, for instance, or how a nuclear reactor works, or whether someone is suffering from a particular disease – it is not easy to see how such evidence, apparently plausible, could simply be ignored. If the judge should ignore it, or give it insufficient weight, his decision might well be set aside on appeal as perverse. Often, however, an expert’s opinion is based not merely upon his special knowledge but also upon the application of that knowledge to a given set of observed or assumed facts. It may be that at that later stage the judge will be in as good a position as the expert to form a sound judgment or opinion on the matter. An important question, of course, will be whether the expert’s observations or assumptions were correct.

Ratio Decidendi

Legal Principle Established

Finally, Mr McDonald challenged the finding (at [59] of the first judgment) that “nothing Ms Lavin told Dr Adams about her present and past mental state should be accepted as true” as being so all-encompassing that it was not available to the FCCA judge to reach that finding.Consideration At [21] of the first judgment, the FCCA judge noted that Ms Lavin relied exclusively on the evidence of Dr Adams. This was a matter of fundamental importance in his Honour’s assessment of Dr Adams’ evidence because it meant that the court did not have evidence from Ms Lavin herself confirming the history she had provided to Dr Adams. The FCCA judge noted in a footnote to [59] of the first judgment that, in the absence of an objection to the admissibility of Dr Adams’ report, the question of whether the evidence given by Dr Adams was admissible to prove the truth of the matters Ms Lavin communicated to him did not arise. However, that did not mean that the FCCA judge was obliged to accept Dr Adams’ hearsay evidence of Ms Lavin’s account, particularly when it was challenged by the respondents through the cross-examination of Dr Adams. In those circumstances, it was open to the FCCA judge to conclude, as he did, that Dr Adams’ opinion had no value because it was not supported by evidence from Ms Lavin verifying the history she had given him and explaining the contradictions between that history and the matters identified in cross-examination. Put another way, the FCCA judge was not obliged to accept any aspect of Ms Lavin’s account to Dr Adams in circumstances where she did not verify that account to the court and in circumstances where her account was inconsistent with her own affidavits in earlier proceedings. At [42] of the first judgment, the FCCA judge said:Although Dr Adams said he would need to revise his opinions, he was not asked whether he was in a position to so revise his opinions in the witness box having regard to the inaccuracies that counsel identified to Dr Adams. My impression is that, had Dr Adams been asked, he would have answered by saying that the inaccuracies would not lead him to abandon all of the opinions he expressed in his report. My impression is based on the evidence he gave in answer to my questions which I have set out above. The matter that appears to have weighed most heavily on Dr Adams’ assessment of Ms Lavin was her behaviour when he interviewed her. The relevant passage of Dr Adams’ cross-examination is as follows:And I will repeat – I mean, it must be reasonably obvious to you now that a very large part of what you were told turns out to be wrong, and that must necessarily involve you revising your opinions?---Yes. If I could come back to what I was saying ---Certainly?--- ---in terms of the assessment itself, as I was saying, we didn’t concentrate on the exact detail of the legal proceedings, and that was absolutely, as you said, given to me in the chronology of legal proceedings. Put simply, however, would it make me review my opinion: yes, it most certainly would.