Norfeld Pty Ltd v Jones trading as Watermark Patent & Trademark Attorneys
[2014] NSWSC 992
•31 July 2014
Supreme Court
New South Wales
Medium Neutral Citation: Norfeld Pty Ltd v Amanda Lee Jones Trading as Watermark Patent & Trademark Attorneys [2014] NSWSC 992 Hearing dates: 30 April 2014 Decision date: 31 July 2014 Jurisdiction: Common Law Before: Hamill J Decision: (1) Leave to appeal under s 40(1) of the Local Court Act 2007 (NSW) is granted.
(2) The application to amend the further amended summons is refused.
(3) The appeal is dismissed.
(4) The Plaintiff is to pay the Defendant's costs, including the costs of all interlocutory applications where costs were reserved or otherwise.
Catchwords: Appeal from Local Court - leave to appeal - natural justice - procedural fairness - refusal to allow cross-examination - restriction on cross-examination - unrepresented litigant - pleadings - multiple applications to amend grounds of appeal Legislation Cited: Local Court Act 2007 (NSW)
Civil Procedure Act 2005 (NSW)Cases Cited: Beveridge v Dontan Pty Ltd (1991) 23 NSWLR 13
Boulos v Martin (No 2) [2012] NSWCA 161
Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492
Finch v Goldstein (1981) 55 FLR 257
GPI Leisure Group v Herdsman Investments (No 3) (1990) 20 NSWLR 15
Jamal v Director of Public Prosecutions [2013] NSWCA 355
Jeray v Blue Mountains City Council & Ors (No 2) [2010] NSWCA 367
Kasupene v Minister for Immigration & Citizenship (2008) 49 AAR 77
Kioa v West [1985] HCA 81; (1985) 159 CLR 550
Marriage of Johnson (1997) 22 Fam LR 141
Mears v Sydney Anglican Schools Corporation [2013] NSWSC 535
Mobil Oil Australia v Federal Commissioner of Taxation [1963] HCA 41; (1963) 113 CLR 475
Norfeld v Jones [2014] NSWSC 54
Rocknote Enterprises v FS Architects [2008] NSWCA 39
Tanwar Enterprises v Bradshaw [2013] NSWCA 1276
Wakim v Mathiew Pty Ltd [2002] NSWSC 405
Williams v NSW Land and Housing [2012] NSWSC 1022Category: Principal judgment Parties: Norfeld Pty Ltd (Plaintiff)
Amanda Lee Jones Trading as Watermark Patent & Trademark Attorneys (Defendant)Representation: Counsel:
B Zipser (Plaintiff)
S Ahmed (Defendant)
Solicitors:
Livingstone & Company Lawyers (Plaintiff)
Lewis Holdway Lawyers (Defendant)
File Number(s): 2013/71259 Publication restriction: Nil
Judgment
Watermark is a firm of patent and trademark attorneys. On 6 October 2011 it sued Norfeld Pty Limited in the Local Court for what it alleged to be outstanding fees in the amount of $74,883.12. The proceedings were defended. The matter came on for hearing before Magistrate Barko on 30 August 2012. The case proceeded on 10 October 2012. It was then adjourned until 11 February 2013. On 12 February 2013 Magistrate Barko delivered Judgment.
The proceedings come to me as an appeal under ss 39-40 of the Local Court Act 2007 (NSW). To avoid confusion, I will refer to the plaintiff in this Court (the defendant in the Local Court) as Norfeld and the defendant in this Court (the plaintiff in Local Court) as Watermark. Magistrate Barko entered judgment for Watermark in the sum of $73,250.55. Norfeld appeals to this Court. The evidence before this Court is contained in an affidavit sworn on 20 September 2013 by Mr Preston, the director and sole shareholder of Norfeld. This annexed the transcript and exhibits before the Magistrate which comprised 3 volumes (869 pages). This was marked as exhibit A but, following the lead of counsel, I will refer to this as the Court Book ("CB"). There was also a fourth volume of material (52 pages) filed by Watermark which was marked as Exhibit 1. It will also be necessary to refer to the transcript of oral argument ("T").
The nature of the appeal is a limited one. Section 39(1) of the Local Court Act provides:
"A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law."
Section 40(1) provides:
"A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court."
Accordingly, the appeal only lies if the grounds of appeal encompass an error of law or, if they involve a question of mixed law and fact, leave is granted. Determining precisely the grounds upon which Norfeld relies is a matter of some complexity, and gives rise to preliminary issues. At the hearing of the appeal, Norfeld argued that it was denied natural justice or procedural fairness because it was shut out from running part of its defence. Whether the grounds of appeal encompass that assertion is a matter of controversy.
Whether a denial of procedural fairness constitutes an error of law will depend on the circumstances of the case: Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation [1963] HCA 41; (1963) 113 CLR 475, 503-504 (Kitto J); Kioa v West [1985] HCA 81; (1985) 159 CLR 550, 584-585 (Mason J). However, if the point is made good and I am satisfied that there was a denial of procedural fairness in the Local Court, I would be inclined to grant leave assuming that there is a mixture of fact and law in the questions raised by the appeal. This is the approach taken by Garling J in Mears v Sydney Anglican Schools Corporation [2013] NSWSC 535 at [132]-[137]. One of the features of that case which is shared with the present case, and which may bear upon the question of whether to grant leave as well, perhaps, as the ultimate question, is that the party asserting a denial of procedure fairness was not legally represented in the Local Court. In the Local Court Mr Preston himself represented Norfeld.
PLEADING AND PROCEDURAL HISTORY
The procedural and pleading history of this matter is complicated and unsatisfactory. It will be necessary to deal with the Local Court pleadings later in this judgment.
However, a preliminary issue arises as to whether Norfeld should be allowed to rely on the ground of procedural fairness that it asserted at the hearing in circumstances where that ground formed no real part of its further amended summons filed 24 October 2013, and where (on 7 February 2014) Campbell J granted an adjournment on condition that the further amended summons "stand without further amendment": Norfeld v Jones [2014] NSWSC 54.
No formal motion and affidavit was filed in support of a further amendment of the grounds of appeal. The matter arose in the course of the hearing and was subject to written submissions filed (at my request) after the hearing. To place the application to amend the grounds of appeal in a proper context, the following history has been derived from a perusal of the Court file and previous judgments and orders made in the case.
Proceedings in this Court were commenced by summons on 8 March 2013. The grounds for relief were as follows:
"(1) The magistrate erred at Law in the judgment and including but not limited to striking out the Cross Claim and striking out Quantum, not allowing the Defendant more time to file his Cross Claim, Defence, Quantum and whether the defendant was the correct Defendant and others.
(2) Liberty to amend appeal upon receipt of the 4 days hearing transcript and legal advice."
On 8 April 2013 the Registrar made orders requiring Norfeld to file and serve a copy of the transcript of Local Court proceedings No. 2011/325041 on or before 6 May 2013. The proceedings were adjourned until 6 May 2013.
On 15 April 2013 Mr Preston informed Watermark via email that Norfeld had retained a new solicitor. On 29 April 2013 Watermark, through their solicitor Mr Adam Foster, responded by reminding Mr Preston that a Notice of Appearance by his solicitor must be filed by 6 May 2013.
On 6 May 2013 Mr Abraham Ishkhanian appeared on behalf of Norfeld. As Norfeld failed to file a Notice of Appearance, the Registrar made orders requiring Norfeld to file and serve a Notice of Appearance by 13 May 2013. The proceedings were adjourned until 20 May 2013. Norfeld did not comply with that order.
However, on 20 May 2013 Mr Ishkhanian appeared on behalf of Norfeld, and filed in court a Notice of Appearance. The Registrar made orders requiring Norfeld to file and serve affidavits upon which it relied by 11 June 2013. The proceedings were adjourned until 15 July 2013.
On 7 June 2013 Mr Ishkhanian notified Watermark of his intention to cease acting for Norfeld. In response to that notice, Mr Foster emailed Mr Preston reminding him that the evidence of Norfeld was due to be filed and served by 11 June 2013.
In an email dated 12 June 2013, Mr Preston informed Watermark that Norfeld was not in a position to comply with the orders made by the Registrar on 20 May 2013. The reason provided for non-compliance was that Norfeld's "email server was down till Tuesday" and that their "photocopier is not working and waiting for parts" (Annexure O to the affidavit of Adam Foster filed 4 July 2013).
However, on 27 June 2013 Mr Preston sent an email to the Court stating that the "Plaintiff has been delayed by the Plaintiff's solicitor ceasing to act for a personal accident reasons" (Annexure 14 to the affidavit of John Preston filed 4 July 2013). Mr Preston explained that Watermark had been informed of that misadventure and wrote:
"Mr Foster confirmed it verbally to myself that he was told by Harbourside Legal of the personnel accident reasons of the delays and consequently Ceasing to Act for the Plaintiff."
And:
"It was unfortunate this accident happened to our solicitor and we should not be punished for it."
It is difficult, and not necessary in the circumstances, to reconcile the factual assertions made in those two emails.
On 15 July 2013 the matter came before the Registrar and was adjourned until 31 July 2013 for directions. At the directions hearing on 31 July 2013, Mr Preston appeared on behalf of Norfeld. Norfeld had still not complied with the orders for service of evidence made on 20 May 3013. Watermark filed in court a notice of motion seeking orders that the Norfeld's summons and appeal be dismissed and that Norfeld pay Watermark's costs on an indemnity basis. Harrison J made the following orders:
"1. I decline to make the orders sought in paragraph 1 of the defendant's notice of motion dated 31 July 2013.
2. I note that the plaintiff proposes at the hearing of this appeal to rely upon evidence limited to the transcript of the proceedings before Magistrate Barko in the court below, exhibits tendered before him in those proceedings and the transcript of interlocutory proceedings before magistrates and registrars in the court below beforehand.
3. I direct the plaintiff to serve all evidence upon which it intends to rely in the hearing of these proceedings by no later than Friday 13 September 2013.I also direct the plaintiff to file in court a folder containing all such evidence served on the defendant and upon which it proposes to rely by no later than the same date.
5. I note that the defendant proposes to file no evidence in addition to that upon which the plaintiff intends to rely.
6. I grant liberty to the parties jointly to approach the list manager with a view to obtaining the hearing date for the proceedings currently with an estimate of 1 day.
7. I order that the costs of and incidental to the defendant's notice of motion should be the defendant's costs in the proceedings.
8. I grant liberty to the parties to apply on 2 days notice for further directions as they may be advised. Pursuant to s 14 Civil Procedure Act 2005 I dispense with compliance by the plaintiff with UCPR 7.1."
On 17 September 2013 Norfeld filed a Notice of Appointment of Mr Charles Ciappara as its solicitor.
On 23 September 2013 Norfeld filed an amended summons. The amendments were substantial. The amended grounds were as follows:
"1. The Court erred in law in failing to afford the Plaintiff, as the Defendant in the Court below, (Norfeld Pty Ltd) ("Norfeld") natural justice,
(i) Failed to direct that the Defendant, as the Plaintiff in the Court below, (Watermark Patent and Trademark Attorneys) ("Watermark") provide proper detailed further and better particulars upon the Statement of Claim in the Local Court;
(ii) Confirmed the listing of the hearing of the matter notwithstanding that the service of Watermark's evidence was late and did not permit Norfeld appropriate time to prepare evidence in reply and to prepare for the hearing;
(iii) Confirmed the listing of the hearing of the matter notwithstanding the service by Watermark of substantial and voluminous evidence and did not permit Norfeld appropriate time to prepare evidence in reply and to prepare for the hearing:
(iv) Confirmed the listing of the hearing of the matter notwithstanding the late service by Watermark of substantial and voluminous evidence and did not permit Norfeld appropriate time to prepare evidence in support of its Cross Claim for the hearing
(v) Wrongly declined applications on behalf of Norfeld for an adjournment of the hearing of the Local Court proceedings;
(vi) Wrongly declined applications on behalf of Norfeld to file and serve an Amended Defence and Amended Cross Claim.
2. The Court erred in law in finding that there was any, or any persuasive, evidence that:-
(i) The debt claimed by Watermark was due and payable by Norfeld;
(ii) The debt claimed by Watermark arose by reference to any agreement between Watermark and Norfeld;
(iii) The debt claimed by Watermark arose by reference to work completed by reference to any agreement between Watermark and Norfeld;
(iv) The quantum of the debt claimed by Watermark arose by reference to work completed by reference to any agreement between Watermark and Norfeld.
3. The Court erred in law and fact in finding that there was any, or any persuasive, evidence that:-
(i) The debt claimed by Watermark was due and payable by Norfeld;
(ii) The debt claimed by Watermark arose by reference to any agreement between Watermark and Norfeld;
(iii) The debt claimed by Watermark arose by reference to work completed by reference to any agreement between Watermark and Norfeld;
(iv) The quantum of the debt claimed by Watermark arose by reference to work completed by reference to any agreement between Watermark and Norfeld.
4. The Court erred in law in wrongly declined applications on behalf of Norfeld for an adjournment of the hearing of the Local Court proceedings on the basis that:
(i) Norfeld required appropriate time to prepare evidence in reply and to prepare for the hearing;
(ii) Norfeld to file and serve an Amended Defence and Amended Cross Claim;
(iii)The director of Norfeld was compromised in representing the Company upon medical evidence."
On 11 October 2013 Norfeld sought leave to file the amended summons, and an order that Watermark pay its costs incidental to the Notice of Motion. Harrison J made the following orders:
"1. Direct the plaintiff to file and serve any application for leave to file an amended summons and any affidavit material in support of that application by 5 pm on Wednesday 16 October 2013.
2. I will appoint Wednesday 23 October 2013 before the duty judge for the hearing of that application.The costs of today can be reserved to be determined by the trial judge.
3. Without foreclosing the outcome of the application on 23 October direct the plaintiff to file and serve any such evidence upon which it proposes to rely at the hearing on 31 October 2013 by no later than 5pm on Friday 25 October 2013 and that the defendant should file and serve any evidence upon which it proposes to rely at the hearing by no later than 5pm on Wednesday 30 October."
On 24 October 2013 the Notice of Motion filed on 11 October 2013 came before RS Hulme AJ. His Honour was critical of Norfeld's conduct of the proceedings saying:
"Norfeld has clearly been guilty of substantial delay and default in the conduct of proceedings in this Court."
However, his Honour granted leave to file the further amended summons. Norfeld was directed to serve written submissions by 29 October 2013. With regard to Norfeld's costs application, his Honour said:
"[H]aving regard to the gross delays on the part of Norfeld, which have occurred since the summons was first filed in this Court, the costs of the indulgence which it has now obtained should be that Norfeld pay the costs of an incidental to this Application".
On 28 October 2013, RS Hulme AJ vacated the hearing date of 31 October 2013 and directed the parties to have liberty to make a joint application to the Registrar to obtain a hearing date in November or December 2013.
On 30 October 2013, the Registrar made the following orders by consent:
"1. The Defendant to file and serve any evidence on which it intends to rely upon at the Hearing of the Further Amended Summon by 6 November 2013.
2. Amend the direction of Acting Justice Hulme QC that the Plaintiff is to file and serve submissions by 28 October 2013 to the Plaintiff is to file and serve written submissions by 11 November 2013.
3. The Defendant file and serve written submissions by 18 November 2013.
4. The Plaintiff to file and serve written submissions in reply by 22 November 2013.
5. The matter be listed for a Hearing on 7 February 2014."
Norfeld filed an outline of submissions dated 4 December 2013 under the hand of counsel. Those submissions indicated that "Norfeld withdraws reliance upon ground 2 and 3" and that Norfeld "presses grounds 1 and 2". Those statements are inconsistent but the submissions made it clear that Norfeld abandoned grounds 2 and 3 but pressed grounds 1 and 4.
On 4 February 2014 Mr Ciappara sent an email to Mr Preston informing him that he was terminating the retainer. Mr Ciappara appears to have contacted Campbell J's Associate to request the matter be listed before His Honour. The matter was set down for mention on 6 February 2014.
On 6 February 2014 Mr Preston appeared and sought an adjournment on the grounds that Mr Ciappara had terminated the retainer and that he, Mr Preston, had not been able to arrange alternative representation. In refusing the application for adjournment, Campbell J informally indicated that if Mr Preston could retain representation, he would be inclined to grant a short adjournment. The matter was adjourned until 7 February 2014.
On 7 February 2014 Mr Preston, who was still unrepresented, renewed his application for an adjournment. On this occasion, it was supported by an affidavit annexing two emails between Mr Preston and his former solicitors. Mr Preston expressed dissatisfaction with his lawyers while the lawyers explained their termination of the retainer by reference to Mr Preston's "failure to provide timely instructions" and "refusal to accept advice".
In spite of what he described as the matter's "chequered history" Campbell J found that it was in the interests of justice to adjourn the appeal to allow Mr Preston time to arrange legal representation. His Honour also granted leave to Mr Preston to file in Court the written submissions referred to above: see Norfeld v Jones [2014] NSWSC 54. As noted, those submissions withdrew reliance on grounds 2 and 3. The following orders were made:
"1. The hearing of the appeal is adjourned upon the following conditions:
(i) The grounds stated in the Further Amended Summons filed in Court 24th October 2013 are to stand without further amendment
(ii) The plaintiff to pay the Defendant's costs thrown away by the adjournment on an indemnity basis forthwith after they have been agreed or assessed with liberty to apply in respect of any lump sum assessment.
2. The appeal is fixed for Directions before me on Wednesday 12 February 2014 before me at 9:30 a.m. with a view to fixing the matter for hearing."
On 12 February 2014 the matter was before Campbell J for directions. Watermark sought to amend the orders made on 7 February to ensure that the abandonment of grounds 2 and 3 was confirmed by order of the Court: Transcript of proceedings, 12 February 2014. Norfeld was in the process of retaining new representation but it seems that the process was delayed by negotiations concerning a costs agreement. Mr Zipser appeared on behalf of Norfeld. Campbell J made the following orders:
"1. Amend order 1 pronounced on 7th February 2014 by adding at the end of paragraph (a) the matter "as refined in the plaintiff's submissions dated 4th December 2013";
2. Plaintiff's application for a stay is dismissed;
3. In default of agreement the defendant's lump sum costs application to be heard by Campbell J at 9:30am Tuesday 25th February 2014 any agreement reached to be reduced to short minutes of order signed by representatives of the parties which may be transmitted to my associate by email with a view to Orders being made in chambers without attendance of either party.
4. Parties to approach the common law case management Registrar forthwith to fix the earliest available date for hearing of the appeal with an estimate of half a day plus.
5. Costs of today to be the defendant's costs in the cause."
On 25 February 2014 the lump sum cost application came back before Campbell J. Mr Preston appeared on behalf of Norfeld. His Honour made the following orders:
"1. Pursuant to order 1(b) made on 7 February 2014 the plaintiff pay the defendant's costs in the sum of $6,416.36 within 28 days of today.
2. If order 1 is not complied with, the defendant has liberty to apply to have the matter listed for the plaintiff to show cause as to why the proceedings should not be dismissed or stayed until the costs order is satisfied.
3. The costs of today and preparation of the lump sum cost application are the defendant's costs in the appeal."
On 13 March 2014 Norfeld filed a Notice of Appointment of Mr George Anastasi. On 11 April 2014 Hall J ordered a stay of the execution of the judgment in the Local Court and on 15 April 2014 Harrison J confirmed that order and attached a condition relating to a charge over certain property as a means of securing the judgment.
THE GROUNDS OF APPEAL AND ORAL ARGUMENT
The matter came on for hearing before me on 30 April 2014. By reference to the further amended summons and the abandonment of grounds 2 and 3 in the written submissions, the grounds of appeal were as follows:
"1.The Court erred in law in failing to afford the Plaintiff, as the Defendant in the Court below (Norfeld Pty Ltd) ("Norfeld") natural justice;
(i) Failed to direct that the Defendant, as the Plaintiff in the Court below, (Watermark Patent and Trademark Attorneys) ("Watermark") provide proper detailed further and better particulars upon the Statement of Claim in the Local Court;
(ii) Confirmed the listing of the hearing of the matter notwithstanding that the service of Watermark's evidence was late and did not permit Norfeld appropriate time to prepare evidence in reply and to prepare for the hearing;
(iii) Confirmed the listing of the hearing of the matter notwithstanding the service by Watermark of substantial and voluminous evidence and did not permit Norfeld appropriate time to prepare evidence in reply and to prepare for the hearing:
(iv) Confirmed the listing of the hearing of the matter notwithstanding the late service by Watermark of substantial and voluminous evidence and did not permit Norfeld appropriate time to prepare evidence in support of its Cross Claim for the hearing
(v) Wrongly declined applications on behalf of Norfeld for an adjournment of the hearing of the Local Court proceedings,
(vi) Wrongly declined applications on behalf of Norfeld to file and serve an Amended Defence and Amended Cross Claim;
4. The Court erred in wrongly [declining] applications on behalf of Norfeld for an adjournment of the hearing of the Local Court proceedings on the basis that;
(i) Norfeld required appropriate time to prepare evidence in reply and to prepare for the hearing;
(ii) Norfeld to file and serve an Amended Defence and Amended Cross Claim;
(iii) The director of Norfeld was compromised in representing the Company upon medical evidence."
I understand from Watermark's submissions, and from Norfeld's failure to dispute them, that ground 4(iii) had also been abandoned in the course of correspondence between the parties prior to the hearing date.
At the hearing Mr Zipser specifically abandoned appeal ground 1(iv) and 4(ii) and conceded that that there was no error in relation to the cross-claim (T 2, 48, 50) and said that the only ground he was pressing was the one he articulated in oral argument (T 48). He also conceded (T 9) that there was no procedural unfairness in failing to adjourn the proceedings given that there was no application for an adjournment.
Mr Zipser indicated that his purpose was "to nail colours to a mast" and to attempt to identify with precision the point of procedural fairness upon which Norfeld relied. In doing so, many of the grounds, and particulars or sub-grounds of appeal, fell away and parts of the written submissions filed by both parties became otiose. For example, counsel for Watermark had structured his written submissions as a response to the "precise wording of each [remaining] ground of appeal".
In his oral submissions Mr Zipser focused on what he described at various stages as the question of "quantum". For example, he said:
"The first issue was whether it was Norfeld that was liable for the debt and the second issue which Mr Preston wanted to raise was quantum. The submission which I will be developing orally today, from which paras 38 and 39 are a launching pad, are that on the first two dates of the hearing, 10 and 11 October 2012, Norfeld was wrongly denied the opportunity to cross-examine Watermark's witnesses on the issue of quantum to the extent that quantum was relevant to a defence by Norfeld to Watermark's claim." (T 2, ln 19-25)
"In relation to issues concerning the defence to the plaintiff's claim. I say alternatively - and it is the same proposition worded slightly differently - Magistrate Barko wrongfully dissuaded Norfeld from cross-examining Watermark's witnesses on the issue of quantum to the extent that quantum was relevant to a defence by Norfeld to Watermark's claim." (T 3, ln 20-22)
Norfeld's submission is that the Magistrate misunderstood Norfeld's defence and, as a result, denied it procedural fairness by refusing to allow Mr Preston to cross-examine relevant witnesses or to call evidence relating to whether Watermark had acted on instructions and were entitled to fees particularised in some 81 invoices upon which its claim was based.
Mr Zipser pursued this argument vigorously. He relied on a close examination of the Magistrate's interaction with Mr Preston. That examination demonstrates, in Norfeld's submission, that Mr Preston was effectively or actually stopped from pursuing part of its defence. Norfeld submits that on the first two days of the hearing, being 10 and 11 October 2013, Mr Preston was wrongly denied the opportunity to cross-examine Watermark's witnesses on the issue of quantum. In the alternative, Norfeld asserts that Magistrate Barko "wrongfully dissuaded" Norfeld from cross-examining Watermark's witnesses on the issue of quantum "to the extent that quantum was relevant to a defence by Norfeld to Watermark's claim".
In nailing Norfeld's "colours to the mast", Mr Zipser tacitly abandoned all, or most, of the balance of the grounds as expressed in the further amended summons with the exception of ground 1(vi). I raised the question of whether these arguments came within any of the various grounds in the further amended summons as it stood following the orders of Campbell J on 7 and 12 February 2014. Mr Ahmed, appearing for Watermark, contended that they did not. He said (at T 39) that he was "surprised" as to the course the case had taken and complained that his written submissions did not address the argument other than "tentatively".
Mr Zipser acknowledged (T 53) that ground 1(vi) was the "closest" that the summons came to grounding the appeal in terms of the arguments that Norfeld sought to advance in oral argument. While that proposition may be correct in the relative terms in which it was advanced, I do not think that ground 1(vi) encompasses the arguments that were put to me at the hearing.
Mr Zipser made two alternative submissions as to how this problem could be overcome or rectified.
First, he relied on what I might call the "fine print" in the orders of Campbell J on 7 and 12 February 2014. As I have said, on 12 February 2014, Watermark's lawyers asked Campbell J to clarify an aspect of his Honour's order that Norfeld would be allowed no further amendments. The purpose of this application was to ensure that Norfeld did not attempt to resurrect the grounds that it had abandoned on 7 February 2014 (by way of its written submission dated 4 December 2013). Whatever the objective or purpose, the order of 7 February 2014 was amended to add at the end of paragraph (a) "as refined in the plaintiff's submissions dated 4th December 2013". Mr Zipser relies on the fact that the written submissions filed on behalf of Norfeld on 7 February 2014 included the following:
"38. Further, during the hearing before the Local Court on 10 October 2012 Mr Preston on behalf of Norfeld on a number of occasions averred to a Defence and or Cross Claim putting in issue the quantum of Watermarks claim (see, Preston Affidavit 23/9/2013 T 10/10/12, page 135, ln 15-19 and page 142, ln 1-36 and page 146, ln 1 to page 157 ln 5 and page 179 ln 30-35 and page 180 ln 9-14) which had not been properly plead, it is submitted, due to the late service of Watermarks evidence as well as perhaps insofar as the Defence is concerned, due to a misinterpretation by Mr Preston on behalf of Norfeld that the issues had been appropriately and properly raised upon the face of the Defence filed about 10 April 2012, (Preston Affidavit 23/9/2013 T 10/10/12, page 142, ln 1-36).
39. Notwithstanding those issues having been squarely raised on several occasion on behalf of Norfeld it was denied the entitlement to raise one of the two main issues upon its apparent defence of the Watermark claim, it is submitted with respect, in the name of judicial expediency and without any, or any due, regard to the real issues of the dispute."
Mr Zipser says therefore that the written submissions incorporated an argument along the lines of that which he made at the hearing. I do not think that it is unkind to describe this as opportunistic. Mr Ahmed relies on the whole of the record and I accept that a review of the transcript of 12 December shows that the purpose of the alteration of Campbell J's orders was to prevent Norfeld from again changing tack (to adopt Mr Zipser sailing metaphor) and to confirm that the original grounds 2 and 3 were abandoned.
On the other hand, the content of those paragraphs in the written submission undermines to a limited degree the suggestion that Watermark was taken by surprise at the hearing when Mr Zipser focused, almost entirely, on the exchanges in Court to mount his submission that his client was denied the opportunity to present part of its defence.
That brings me to Mr Zipser's second submission in support of the contention that Norfeld should be permitted to make the arguments that are now advanced. He says that if I am persuaded that there had been a denial of procedural fairness, I should allow Norfeld to amend its summons in spite of the history of the matter and the orders made by Campbell J.
I called for further submissions on these and other issues. Counsel for each side has taken the opportunity to provide me with extensive written submissions. Putting aside the submission that the grounds were effectively amended by the refining of Campbell J's order on 12 February, Norfeld seeks to amend its grounds so that there is to be one ground of appeal in the following terms:
"The Local Court erred in law in failing to afford the plaintiff, as the defendant in the Local Court (Norfeld Pty Ltd) ("Norfeld"), natural justice because:
(a) At the hearing on 10 and 11 October 2012, Norfeld was wrongly denied the opportunity to cross-examine Watermark's witnesses on the issue of quantum, to the extent that quantum was relevant to a defence by Norfeld to Watermark's claim.
(b) At the hearing on 10 and 11 October 2012, Magistrate Barko wrongfully dissuaded Norfeld from cross-examining Watermark's witnesses on the issue of quantum, to the extent that quantum was relevant to a defence by Norfeld to Watermark's claim.
(c) At the hearing on 11 October 2012 Norfeld was wrongly denied the opportunity to tender further evidence on the issue of quantum, to the extent that quantum was relevant to a defence by Norfeld to Watermark's claim."
Watermark objects to the amendment. It relies on the transcript before Campbell J which shows that the purpose of the refining of his Honour's orders was clearly calculated to confirm that grounds 2 and 3 had been abandoned. There was no suggestion that the submission would replace the ground of appeal. Reliance is also placed on the judgment of Campbell J: Norfeld v Jones [2014] NSWSC 54 at [12]-[17].
In order to come to any sound decision as to whether an amendment should be granted, or whether Norfeld should be permitted to make the arguments advanced at the hearing, it is necessary to consider the substance and merit of those arguments by conducting a thorough review of how the proceedings were conducted in the Local Court. The underlying purposes of case management, Norfeld's conduct of the proceedings to date and the orders made by other Judges of this Court speak loudly and cogently against allowing Norfeld to amend its case yet again. However, I accept the tenor of Mr Zipser's submission that efficiency and case management ought not to stand in the way of justice: cf s 58(1) of the Civil Procedure Act 2005 (NSW).
Accordingly, I propose to examine the substance of Norfeld's complaint before deciding whether I should allow it to rely on its "Second further amended summons" which was filed with Norfeld's supplementary written submissions.
A REVIEW OF THE LOCAL COURT PROCEEDINGS, THE MAGISTRATE'S INTERACTION WITH MR PRESTON AT THE HEARING AND THE PARTS OF THE RECORD RELIED ON BY NORFELD
The original Statement of Claim filed in the Local Court on 6 October 2011 asserted:
"1. The Plaintiffs are and were at all material times in partnership within the meaning of the Partnership Act 1982 (NSW).
2.The following were at all material times partners in the partnership:
(a) Amanda Lee Jones
(b) Brian Morton Hendy
(c) John Roger Green
(d) Raymond Ludwig John Tettman
(e) Josef Alexander Schieber
(f) Carolyn Joy Harris
(g) Paul Victor Fong
(h) Karen Joy Sinclair
(i) Richard Hiram Baddeley
3.The Plaintiffs are and were at all material times carrying on business as a firm of patent and trademark attorneys.
4.The Plaintiffs are and were at all material times trading under the registered Victorian business name of "Watermark Patent and Trademark Attorneys".
5.The Defendant is and was at all material times a company incorporated pursuant to the Corporations Act 2001.
6.Between about August 2010 and August 2011 the Defendant requested the provision of services by the Plaintiff, and the Plaintiff agreed to provide services to the Defendant ("the Agreement").
7.Pursuant to the Agreement, the Plaintiff provided services to the Defendant in between and including 17 August 2010 and 11 August 2011.
Particulars
Full particulars of the services provided are contained in invoices previously delivered to the Defendant, copies of which may be inspected at the offices of the solicitors for the Plaintiff by prior appointment.
8.As at 5 September 2011, the balance of amounts outstanding from the Defendant to the Plaintiff for services provided was $81,756.83.
9.In breach of the terms of the Agreement, the Defendant has failed, refused or neglected and continues to fail, refuse or neglect to pay to the Plaintiff the amount due for services provided by the Plaintiff to the Defendant in the sum of $81,756.83.
10.In the premises, the Defendant is indebted to the Plaintiff in the total sum of $81,756.83."
A Further Amended Statement of Claim dated 9 October 2012 altered the amount claimed crediting a payment made by Norfeld on 15 June 2012:
"8. As at 5 September 2011, the balance of amounts outstanding from the Defendant to the Plaintiff for services provided was $74,883.12.
9.In breach of the terms of the Agreement, the Defendant has failed, refused or neglected and continues to fail, refuse or neglect to pay to the Plaintiff the amount due for services provided by the Plaintiff to the Defendant in the sum of $74,883.12.
10.On or about 15 June 2012, the Plaintiff credited the Defendant $1,632.57.
11.In the premises, the Defendant is indebted to the Plaintiff in the total sum of $73,250.55
12.The Plaintiff further claims interest under Section 100 of the Civil Procedure Act of $6,126.85 ..."
The grounds of defence filed on 10 April 2012 were as follows:
"The Defendant relies on the following facts and assertions and reply to the Plaintiff's paragraph in the Statement of Claim:
Paragraph 1 to 5 -The Defendant is not aware and it was not denied.
Paragraph 6 - The Defendant denies requesting the provision of services by the Plaintiff to the Defendant.
Paragraph 7 - The Defendant denies there is and is not aware there is an Agreement between the Plaintiff and the Defendant. The Defendant requested the Plaintiff to copy and send all arrangement, retainer or Agreement and give further and better particulars on the allegation in the Statement of Claim including but not limited to paragraph 6, 7, 8 and 9. The Plaintiff has not provided the Agreement nor a reply to further and better particulars.
Paragraph 8 - The Defendant denies it owes $81,756.83.
Paragraph 9 - The Defendant is not aware of the Agreement and the Defendant does not owe the Plaintiff $81,756.83.
Paragraph 10 - The Defendant is not indebted to the Plaintiff in the sum of $81,756.83, and the Defendant says they do not owe any money or interest or cost or any other sums of money to the Plaintiff. The Defendant reserves the right to amend the Defence as the Plaintiff refuses to supply further and better particulars."
Norfeld says that it defence effectively put everything - liability and quantum - in issue. It relies on cases such as Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492 at [154], Tanwar Enterprises v Bradshaw [2013] NSWCA 1276 at [49]-[57] and Rocknote Enterprises v FS Architects [2008] NSWCA 39 at [76].
Norfeld sought particulars in a letter dated 23 May 2012. This is reproduced at CB 37-41. It is, if I may say so, a lawyerly document. It was no doubt as a result of this letter that the Magistrate assumed that Mr Preston either had legal qualifications or that he was receiving advice from a lawyer. At the hearing Mr Preston disabused the magistrate of that assumption in the following exchange at CB 224, T 3 ln 22-41:
"HIS HONOUR: Well Mr Preston I formed the view having read through your material, the file, the material that you've filed in Court, that you either have some experience in litigation or you have somebody assisting you in the background or you have some legal training.
PRESTON: I have no legal training. I have absolutely no other single legal person advising me.
HIS HONOUR: Yes?
PRESTON: And yes I have been to Court which I've mentioned before, been in the building industry, a lot of time we don't get paid, we're sub-contractors, builders don't pay us, we end up with disputes and I've always made it - even while waiting for other Court cases to finish I sit down in the Court and I find it a little bit fascinating. I suppose it's the system we have. And I have no - as I said before, no-one is assisting me at all. Basically if you could see I'm a very good copier because when, when, when the plaintiff sends me a letter, I send identical letters to him back. When I see the affidavit I follow the system through. I type them up and I've done lots of affidavits before. So it's basically a matter of copying. And I've had no legal training either."
A reply to the request for particulars was dated 14 June 2012 (CB 43-51).
It is not necessary to dwell on the request for particulars and the response other than to note Mr Zipser's submission that Watermark changed its case in the Local Court. As I understand this submission, it is said that Watermark originally (and in response to the request for particulars) pitched its case as being based on an agreement which was both oral and in writing. It is said that by the end of the case, or "on the eve of the hearing", it put its case as being based on an agreement articulated in one document, being an exchange of emails dated 25 October 2007 (CB 630-631). In that email exchange Mr Preston said this:
"1.All patents, applications etc are to be in my name, no change, I am the inventor and owner of the patents.
2.I am not an employee of Norfeld Pty Limited. I am a director of both companies, Norfeld and Preston Australia.
3.All payments will be made by Norfeld Pty Limited, Norfeld Pty Limited have no interest in the Intellectual Property.
4.I have an agreement with Norfeld and they pay for the Intellectual Property fees.
5.Preston International Pty Limited is dormant, it has not traded since 2002 and will not trade further. Do not correspond with Preston International Pty Limited.
6.All previous dealings have been with Preston Australia Pty Limited and you continue to correspond with Preston Australia Pty Limited but all invoices are made out to Norfeld Pty Limited on all matters new and old. Norfeld Pty Limited have been paying your bill for over 12 months now. All cheques come from form Norfeld.
7.Norfeld owns the property at 196 Silverwater Road, Silverwater NSW 2128.
Summary
a) All patents in John Preston's name.
b) Invoice everything to Norfeld, Norfeld will pay.
c) Correspond with Preston Australia, no change."
While it is of no consequence to the resolution of the appeal, I do not accept the submission that Watermark's entire case hinged upon this email or that it had changed its case "on the eve of the hearing". Rather, that email established to a degree of certainty, and certainly on balance of probabilities, that whoever or whichever entity provided the instructions or received the services, Norfeld had assumed responsibility to pay the fees and was the appropriate entity to whom to send the invoices. Watermark relied on 81 invoices, none of which individually it seems had been subject to any contemporaneous complaint or dispute.
At the hearing I asked whether the first time that quantum had been raised was during the exchange in the Local Court recorded (at CB 141) where Mr Preston said "The first [issue] is whether Norfeld is responsible for the debt. And the second one is quantum". Mr Zipser indicated "I think it is" (T 19) and later (in his submissions in reply at T 54) pointed to an email dated 29 July 2011 where Mr Preston said that he had been invoiced for "unnecessary matters and or matters which have no value" and asserted that Watermark was "in breach of your retainer" (at CB 856). Mr Zipser submitted that "I cannot say it's a winning document" but contended that Mr Preston "at least touches on the issue".
The pleadings did not specifically plead that quantum was in issue or that Watermark had not acted on instructions or had not provided the services subject of particular invoices. On the other hand, as Mr Zipser submits, it had put liability in issue and did not make any admissions, including as to quantum, by reference to its pleadings.
The record of proceedings confirms that both the Magistrate and counsel for Watermark were under the impression that the issue was whether Norfeld - as opposed to Mr Preston personally or the entity Preston Australia Pty Ltd of which he was also director and sole shareholder - was liable for the debt. When the matter came on for hearing, the Magistrate's understanding of the issue was confirmed in the following exchange with Mr Ahmed (who appeared for Watermark at first instance and before me) (CB 128):
"HIS HONOUR: All right. From what I gather on the pleadings this is a case, effectively just a case for fees for services rendered and the issue that's raised in the defence is that the currently named defendant, Norfeld Pty Ltd is simply not the proper defendant?
AHMED: Exactly. That's exactly right. And the corollary of your Honour having dismissed the cross-claim is that issues such as negligence or over payment which were contemplated in the cross-claim, although not actually pleaded, are not in issue. So your Honour is precisely correct to say that the only issue before your Honour is whether Norfeld Pty Ltd, N-O-R-F-E-L-D is the proper defendant and whether there is an agreement between the plaintiff and the defendant."
At this stage Mr Preston said nothing to indicate that he also put in issue the amount of the debt by reference to whether Watermark had acted on instructions or failed actually to perform the services referred to in the invoices.
I now turn to the parts of the transcript upon which Norfeld places reliance.
On the first day of the hearing the following exchanges are recorded:
HIS HONOUR: And then hopefully either late today or tomorrow at some stage if need be I'll then try and hand down a judgment rather than reserve and get it dealt with as best we can while we're here, all right? Mr Ahmed?
PRESTON: Excuse me, one thing.
HIS HONOUR: Yes?
PRESTON: The matters that you crossed off my affidavit, there's probably two issues in this matter, whether Norfeld is responsible for the debt.
HIS HONOUR: That's going to-be a legal issue upon which I have to determine ultimately based on facts that are in evidence before me--
PRESTON: Yes and--
HIS HONOUR: --and the law
PRESTON: And the second one is quantum
HIS HONOUR: Yes?
PRESTON: And most of the issues that you removed from my affidavit go to quantum. If you just go to paragraph 8 it goes to quantum. So if Norfeld is responsible, it's also whether some of the invoices are genuine, justified or whatever or whether the work was done or not.
HIS HONOUR: Well the difficulty with your - first of all you deny a liability to pay. Let's just go to your notice of grounds of defence. You deny that the defendant is indebted and deny any liability to pay any money. What you don't plead is that if Norfeld was determined to be liable then the fees that were rendered to you either were not in accordance with an agreement or were not incurred or services weren't rendered." (CB 141-143)
and
"HIS HONOUR: I take that as background information. That's what I take it as, background information, because what they're doing you'll see in their - Mr Preston this case all revolves the following. I've read this material which I anticipate now as amended will go into evidence. This case all revolves around a series of emails and oral conversations that occurred around about, and I'll just get the emails themselves, started with an email - and I'm just saying this to you so as I understand the real essence of this case as I've read it thus far - there's an email from you to Christian Scheiber. And can I just say this to you, that under section 161 of the Evidence Act an electronic communication effectively is prima facie evidence of who sent it, when it was sent, who it was sent to and things of that nature unless sufficient evidence is provided by you or anybody else to place sufficient doubt on the authenticity of the document.
What that tells me is that at or about 2.08pm on 24 October 2007 you sent an email to Christian Scheiber saying, "Christian, please invoice Norfeld Pty Ltd all matters and not Preston Australia Pty Ltd." Then there's the response where Mr Scheiber queries what your instructions are in that regard. The evidence of the plaintiff is that at that point in time you were a director and sole shareholder of the defendant company Norfeld, and you were also the director and sole shareholder of the other company Preston Australia Pty Ltd.
And then it goes on to your response which is an email dated 25 October 2007 at 11.18am to Mr Scheiber and there set out in seven paragraphs or seven lines or points appears to be instructions given by you as a director of each of those two companies.
PRESTON: That's right, yes
HIS HONOUR: This case will all really fall - in my view the essence of these proceedings revolve around that series of emails and what those emails mean
as a matter of fact and law. And then what the plaintiff will say thereafter is
you made various submissions in relation to the liability of the defendant to pay the bills, that you paid $121,000 of the bills using Norfeld's money, and that thereafter you made admissions by the way you said there's no excuse for not paying, we're going to pay, we've got all sorts of cash flow problems and so on and so on. And then what the plaintiff will say is that when you're threatened with legal action you then turn around and say, "You're not good patent attorneys and you've done the wrong thing by me and I'm not going to pay you more money." (CB 144)
and
"HIS HONOUR: Yes. Because you've got no cross-claim. I'm not dealing with any loss.
PRESTON: No, no, but the loss is that if services were not rendered or if they were exaggerated or if they weren't according to instructions then it shouldn't be paid, let alone the matter of who's liable to be paid. And I - it was quite known that Norfeld just stepped in to pay the money on their behalf till things got better.
HIS HONOUR: That will be an argument that we'll have at the end of the day, a legal argument. Whatever your personal and/or company arrangements were I don't know. But that's going to really be the essence of the plaintiff's case.
PRESTON: That's right, yeah." (CB 145)
and
"PRESTON: And they were just totally ignored and I asked the Court to force them to answer my particulars so I could reply.
HIS HONOUR: I don't see this case as a very difficult case in the sense it's not a complex case.
PRESTON: Probably not but -
HIS HONOUR: I'm here to determine whether or not the defendant has a debt to the plaintiff.
PRESTON: That's right, yeah.
HIS HONOUR: And it's a debt for $80,000 or thereabouts and it's a debt based on services rendered and bills paid, and the question is going to be whether or not as a matter of law the defendant company is liable to pay those monies.
PRESTON: Yes I understand that.
HIS HONOUR: That's the case before me today. All right. Just have a seat for the moment. Yes Mr Ahmed, first witness?" (CB 147)
and
"HIS HONOUR: The issue today is this, and tomorrow is this, I'm not here to
determine whether or not you had financial difficulties or whether or not it
wasn't fair that they were pressing for so much money when you were paying
so much money. The issue that I have to determine is whether or not Norfeld
is liable to pay the outstanding account. ;.
PRESTON: Mm. And the quantum too because if the dispute was all about well where's the value, you didn't do this and you didn't do that, and where did these invoices come from, I didn't order them, I didn't instruct them. You know, it goes to quantum too. And also it goes to quantum even - and the cross-claim was going to be about that I know I paid a lot of money for things I never, I never requested, only because it's very difficult to find out if the work was done at all.
HIS HONOUR: You see the difficulty with that submission you're making to me now - that reference I make to lavish lifestyle is in the body of the affidavit of Christopher Line sworn 1 October 2012.
PRESTON: I don't have a lavish lifestyle. As a matter of fact very frugal if you could say.
HIS HONOUR: Paragraph 7.
PRESTON: I don't have an expensive car.
HIS HONOUR: Mr Preston, if you had made it clear in your pleadings and/or any other time that you disputed the work was done or there was instructions to do it, the plaintiff company would have to call evidence from probably every officer that did any work on your file and prove every aspect of it, and it would probably have taken another ten or so witnesses, the hearing would have gone for a week, and it would have been a whole different ballgame." (CB 179)
and
"PRESTON: That was the arrangement with Watermark. It's very important.
HIS HONOUR: What concerns me is who it was effectively who's liable to pay the plaintiff's fees after that series of emails. That's what concerns me.
PRESTON: Mm.
HIS HONOUR: That's the whole essence of why we're here.
PRESTON: That's if you look at it from one way. I look at it from another way.
I said, look Norfeld's got some money, if you want to be paid I'll pay you tomorrow because there was something looming like a - patents have set dates. If you don't file by a set date the patent lapse and that's it, finished, gone. A bit like mining leases. And I said look I'll pay you from - but you got to send me the invoice in Norfeld's name so when I pay it l can claim the GST and send it to the government." (CB 187)
and
"HIS HONOUR: To hand down a judgment. Well we'll try and do that. What Mr Preston now has the advantage of is a further more than 12 hours but a further time in which to consider the plaintiff's evidence and perhaps to make some notes for cross-examination tomorrow morning. But the guts of that should be Mr Preston concerning whether or not that Norfeld is a proper defendant, whether or not Norfeld has a liability to pay the debt that's alleged. And if we try and restrict it to those issues we should get through it much quicker than before. But in any event I'll have to give Mr Preston some latitude because he is unrepresented.
AHMED: I understand that and I make that application in that light." (CB 213)
and
"PRESTON: What about the quantum?
HIS HONOUR: Well I talked to you about that this morning already. The plaintiff has never been put on notice as far as I can see in the Court file that they have to justify every "T" they crossed and "I" they dotted. And if you read, and have you given a copy of exhibit 2 to Mr Preston?
PRESTON: But also I'm a little bit annoyed that I have had only two and a half days, they have had one year to prepare this case and I was rushed through and now I'm told that I've got to rush under section 56. I don't think that's very fair and I'm sure there's a section that says, you know, that somebody can respond in proper fair time. But I've been rushed through because, not because of the Court's fault, as to the way this matter has been handled right throughout. They've just dragged their feet." (CB 214)
and
"HIS HONOUR: I'm of this view. I can't give you advice but you should concentrate about the issue about your series of emails that required the plaintiff to invoice Norfeld and what that all means. Whether or not that constitutes a variation of an existing agreement or the constitution of a new agreement on existing terms or reasonable terms or otherwise." (CB 217)
Norfeld also relies on the following exchanges which took place on the second day of the hearing:
"PRESTON: I think your Honour interrupted me saying that I can't back to a whole thing, but I did mention before that this matter also goes to quantum?
HIS HONOUR: Yes.
PRESTON: So--
HIS HONOUR: What quantum though?
PRESTON: Well the thing is if it was not done according to instructions then it shouldn't be paid.
HIS HONOUR: That's an allegation that you have to make which is a whole new ball game. It's not in your pleadings. You came to Court without that being part of your defence.
PRESTON: And that's why I requested to file further evidence in my affidavit which I was really denied by the process of rushing to give me two and a half days to file all the evidence. It just didn't give me enough time and I, I, I made objections to that.
HIS HONOUR: Mr Preston can I just remind you, and once again we're losing time now with this argument, but can I just remind you that you made clear in your emails in July of 2011 and thereafter what problem or issues you saw with the plaintiff's claim. Those issues weren't put in your notice of grounds of defence, they weren't put in your cross-claim, and they weren't effectively litigated until you raised them in your - tried to raise them in your affidavit.
And just remember this, if you've got a complaint about anything done prior to the date that I read earlier in relation to anything up to the bill of 2 September 2010, you would have had to have - you've paid those bills, which means you would have to have put on a claim to recover monies paid wrongly or paid in breach of contract.
PRESTON: Yeah and I've already advised them of that, that I would be doing so.
HIS HONOUR: But you advised them of that in July last year.
PRESTON: That's right, and it takes a long time to get the - we are getting the information from the overseas patent attorneys.
HIS HONOUR: Yes?
PRESTON: And the patent attorneys have told us that we're wasting our time, we're not going to get a patent. And it's as simple as that, the patents have no value. The patents are very low tech and there's prior art [sic] which I've been given by the patent attorneys--
HIS HONOUR: Yes?
PRESTON: --which should have been discovered by Mr Schieber.
HIS HONOUR: As I said Mr Preston I've disallowed you to ventilate these issues on the basis of for the rulings I've previously given.
PRESTON: Yes, what you're saying is you disallow me to go to quantum?
HIS HONOUR: Yes.
PRESTON: So I cannot dispute the amount?
HIS HONOUR: No. To dispute the amount you'd have to dispute one of a number of things. One, that the services allegedly rendered were not rendered at all. Or if they were rendered they weren't rendered to the extent claim in the various tax invoices. And/or that whatever services were rendered were done in breach of a contract but which you say there's no contract with the defendant!
PRESTON: But there, there is, as you said, verbal - and I think there's enough writing in my correspondence to, to detail all this, and, and it - you see, you just can't - when Mr Schieber sends a note or an invoice I've got to pay it because it's all well if you don't pay it we can't proceed with the next thing so I've got to pay it. And then I find out later on, and it takes time to get this evidence, that there was no prior art done on the patents and therefore it takes a while to get all that. Therefore that payment should not be made, and also the payments which are now in dispute.
HIS HONOUR: If you want to ventilate an allegation that you have been ripped off by being charged services that weren't rendered, then perhaps you should go and see somebody in the criminal jurisdiction after these proceedings are finished.
PRESTON: We don't have to go that far. It's only a matter of - it's probably, just commercial matters, there's nothing criminal about them ripping off people or producing work which is just a normal course of business. If they're careless or don't do the job or if they wish to do it differently according to instructions I'm not aware of that.
HIS HONOUR: All right. Well you can put--
PRESTON: I'm not aware of anything they do.
HIS HONOUR: In your cross-examination you can put to Mr Schieber in
relation to the outstanding invoices you put to him if you want that what's in
those invoices was either not rendered, the services weren't rendered or
they've overcharged or otherwise.
PRESTON: So I can go to quantum?
HIS HONOUR: I'm not going to let you go to each and every invoice because
that's going to take three days, and if the parties were aware and the Court
was aware that you'd go to each and every invoice and dispute quantum we
would never have fixed this case for two days.
PRESTON: The thing is if I had the evidence - the normal course of any Court would be that the plaintiff files the affidavit and then usually there's about 30 days, six weeks for the defendant to file his response.
HIS HONOUR: Mr Preston I'm not going through all that with you--
PRESTON: And--
HIS HONOUR: --you're going to have to explain to me at the end of the day why you swear an affidavit in respect of which you say that Preston International Pty Ltd was the relevant contracting party up until and during the time of this debt when Preston International was de-registered in 2009 and you ceased to be a director. So how could Preston International be liable for the debt up to 2011? Now, let's centre ourselves on those predominant issues and whether Norfeld is a contracting party or not rather than what you're trying to do which I've disallowed on a number of occasions." (CB 232-235)
and
"PRESTON: Yeah, well it's, it's quantum.
HIS HONOUR: Why don't you concentrate -I can't tell you how to suck eggs but why don't you concentrate on whether or not Norfeld's a proper contracting party?
PRESTON: Okay. I don't agree but I'm just saying that--
HIS HONOUR: I appreciate that but there'll come a point in time where I'll get so cranky with you for continuing to ask questions that I've disallowed-" (CB 235)
and
"HIS HONOUR: Let's concentrate then on whether or not you personally are liable for the fee, Norfeld are liable for the fee or Patent Marketing are liable for the fee. Because on your own sworn material, Preston Australia's got nothing to do with it, it's just an email address. Do you see where the issues really lie in this case? And you're not saying you're personally liable, you've never said you're personally liable, and it can't be Preston International because they were deregistered and non-existent and you would not have been giving instructions as a director of Preston International when you weren't a director, we know that. So let's concentrate on the real issues between the parties.
And you can just tell from my short summary there that they're the real issues. That how can Norfeld be liable to pay when Norfeld was simply paying bills and never, ever signed an agreement, or never, it was never agreed in discussions that Norfeld would be contractually liable. Okay? They're the real issues as I see them. And I'm referring to your evidence and your emails to express the summaries I just did.
PRESTON: Yeah." (CB 246-247)
and
"HIS HONOUR: Yes Mr Preston?
PRESTON: Did your Honour say I can't go to quantum?
HIS HONOUR: Yes. The issue in this case is not about quantum, the way it's pleaded and presented.
PRESTON: It is that if the work wasn't done or wasn't done according to instructions then I'm not liable to pay." (CB 266)
Norfeld's submission is that these interactions establish that the Magistrate denied it natural justice in the sense that it was not permitted to be heard in respect of an assertion that Watermark had not provided some of the services claimed in the invoices or had provided some of those services without instructions. At the very least, Norfeld submits that the unrepresented litigant was dissuaded from pursuing those arguments.
SOME OBSERVATIONS ON THE EXCHANGES RELIED ON BY NORFELD
The first observation that I make as to these exchanges is that the suggestion made by Mr Preston (for example at CB 214 ln 44-50) that he only had "two and a half days" to prepare and that Watermark had "one year to prepare this case and I was rushed through" is not correct.
The invoices upon which the suit was founded were dated between 14 August 2010 and 11 August 2011. The action was commenced on 6 October 2011. On 18 May 2012 the Local Court made orders that the parties exchange evidence. There was a pre-trial review on 30 August 2012 where it emerged that the parties had not complied with that order. There was a further pre-trial review on 25 September 2012 when the parties jointly and unsuccessfully applied for the hearing date to be vacated. On that occasion Magistrate Culver made the unsurprising observation that "the matter's been floating around too long". Watermark was ordered to serve its evidence by 1 October 2012, the hearing date (10-11 October 2012) was confirmed and the matter listed for further review on 2 October 2012. On 2 October 2012 Mr Preston did not appear because (it seems) he was late to Court. An order was made for Norfeld to serve its evidence by 5 October 2012. It is clear that the respective Magistrates had different views as to whether the plaintiff should file its evidence first or whether there should be an exchange of evidence.
When Mr Preston complained to Magistrate Barko in the course of the hearing that he was only given "two and half days" to prepare, it seems that he was referring to the period between 2 and 5 October 2012. However, he had many months before that to prepare his case and had been ordered to serve his evidence as early as 18 May 2012.
The second observation is that the Magistrate expressly gave "Mr Preston some latitude because he is unrepresented" (CB 213 ln 23-27). Watermark relies on a number of exchanges which it submits demonstrate that the Magistrate did not deny Norfeld natural justice and was mindful of the fact that Mr Preston and Norfeld were not legally represented. For example:
"HIS HONOUR: I'll let you know now how these proceedings will now continue. At this stage I haven't admitted any of the documents as exhibits. What will happen now is Mr Ahmed will call each of his witnesses in turn and he will - he doesn't need to but may have them adopt the statements of the affidavits they've already made and may seek to have any errors corrected. He may ask them a short series of questions. He may determine, given the practice note and the rules that if it's going to go over and beyond what's in the affidavits he might seek the Court's leave to ask further evidence in chief, and then he will tender the statement or the affidavit. That when tendered will then become evidence in the proceedings. Then you have the opportunity of cross-examining the witness, and that's an opportunity for you if you want to, to put further matters to them, to question their credibility about anything that they've said in their affidavits, and to put your point of view across to them and through them.
When you cross-examine the witnesses remember this, it's really just for the purpose of challenging what if any evidence they've given or getting further evidence in to expand on something perhaps or to clarify something. It's not an opportunity for you to make a submission about why you win and they'll lose. That can be done later, okay? And then once you've finished your questioning, and I'll try and guide you as best I can in relation to the question on relevance and things of that nature, if there's something you've raised in cross-examination that needs to be clarified then Mr Ahmed can ask further questions in that regard.
Then he'll go through each witness that way, and the same will occur in relation to your right to cross-examine if you want to. You don't have to if you don't want to. For example, there may be no issue about certain matters and you don't need anything else clarified or you don't need to put something to a witness. But if you are challenging them to the effect that they are lying about something, you say they're lying about something, or they're either grossly mistaken about something, in fairness to that witness, if it's not already included in your affidavit you should put it to them. If you've already stated in your affidavit something there's no need to repeat it. It will ultimately be in evidence subject to any of the amendments that we've made this morning, all right?
Once all of the plaintiff's evidence is concluded, on what I've read thus far it will be a situation where if you want to you can then give sworn evidence. If you want your affidavit to go in you can tender that affidavit once again, but to do so as I understand Mr Ahmed will require you for cross-examination. You then have to give evidence just like any other witness, take an oath or affirmation to tell the truth, and I will assist you in getting your affidavit into evidence and then ask you some further questions, I might or may not, and then you can tell me what if anything further you want to tell me, evidence not a submission, and then Mr Ahmed can cross-examine you as well.
If you've got any other documents you want to tender, whether they be photographs, plans, emails, faxes or anything of that nature you're entitled to do that, and if you've got any other witnesses you want to call, even though you haven't provided a statement from them, you can seek the Court's leave to do that if required. Then once you've finished all of your evidence, if there's something you've said in your case which takes the other side completely by surprise they may make an application to call any evidence in reply, but in the sort of case like this I doubt whether there will be any need for a case in reply.
Once all the evidence is concluded I will call upon each of the parties to make submissions to me. The plaintiff will make submission as to why I should find on the balance of probabilities that their case succeeds, and you can make submissions as to why they on the balance of probabilities their case should not succeed, remembering that you don't have your own case, there's no cross-claim or anything of that nature. So they have the onus of proving their case on the balance of probabilities, that is it's more likely than not that there was a contract or an agreement, the terms of the agreement were as follows, that certain things occurred and the like, and then you can do the same thing by saying they failed to do that on the balance of probabilities or that I should accept your version of events and you can tell me why. All right? They're called submissions, not evidence, just argument." (CB 140)
and
"HIS HONOUR: Ordinary basis you'll get about 75 to 80% back of your costs on assessment. Indemnity basis, very often more often than not you'll get everything back. So it means that these costs are going further and further and it means that we are going to finish this case on the next day. Mr Ahmed you'll now have an opportunity of confining your cross-examination I dare say with some time. But we're going to finish this case on the next occasion. And I hopefully will be able to hand down a decision on the next occasion. But all I want the parties to understand is there are now going to be more costs involved and somebody is going to be paying for them. At some stage somebody will be paying the costs. And I would dare imagine with a case like this and the preparation and the appearances and the like, subject to any argument about the quantification the costs are going to be at least half the amount of the claim." (CB 288)
and
'HIS HONOUR: Mr Ahmed it might assist me and Mr Preston in fairness to him unrepresented that you maybe do an outline skeleton of the point form of how you're going to approach your submissions so if there's any basic case law or otherwise you're going to rely upon, let him have a look at that beforehand.
AHMED: Yes.
HIS HONOUR: So he understands the principles that you'll ask me to apply.
AHMED: Certainly.
HIS HONOUR: Do you remember the apple example I gave you?
PRESTON: Yes your Honour.
HIS HONOUR: And the question about who was giving instructions to - you asked Mr Schieber who was giving instructions, just to expand on that basic proposition about the apple. The person comes in, the mother comes in and says, "This is my son. I want him to have some fruit and I'm going to pay for any fruit that he takes, that he chooses." The son doesn't say a word. The son might be outside the shop and have no idea about that conversation. The son comes in and then says to the fruitier, "I'll have that apple, that banana's too small I want a bigger one, I'll have that watermelon and that pineapple, and gives instruction to the fruitier about what they want done, what fruit he wants. He takes the fruit and then goes. And the mother then turns out of the shop and walks away. Now, as a matter of law the law would say that the mother is liable to pay for the fruit. All right, do you understand that? The mother has the arrangement and agreement with the fruitier that she will pay for any fruit her son chooses. And her son doesn't even know about that conversation. And that's a very basic example of how the law would say the mother is legally liable to pay for the fruit chosen because the son gave the instructions but mum said she'd pay for it and there was an agreement, and the agreement was if you provide him with the fruit, that's consideration from you to him, I'll give you the consideration of paying you the money for that fruit. And there's an understanding between them that she makes herself liable. It's not some joke. If you say to your mate, "I'll beat you over the Harbour Bridge. Whoever gets over the Harbour Bridge first I'll give a million dollars to." Nobody intends to enter into a legal obligation to pay a million dollars. So there's another issue to determine.
In your case of this sort of nature, any Court is going to find that anything said between the parties had intention to bind legally, whether it be to bind legally simply to pay or simply to undertake to pay or otherwise. The real question is going to be on your emails and that circumstances and everything that followed thereafter, what the intentions of the party were and what actually occurred. And contracts can be formed as I said before with a handshake, with a nod and a wink.
You might have seen those people on the stock market in the US or any other stock market, they're waving their hands around, they're making all sorts of signals and doing all sorts of things. They're talking "I want 1.4" which actually in the industry means $1.4 million but they understand what it all means and there doesn't have to be a formal written contract signed, sealed and delivered. Contracts can be formed very simply and that's why what the Plaintiff says is around that period of time the consideration that they were giving was to continue to provide services. They were doing that on the basis that Norfeld's director said Norfeld will pay. The consideration passing from Norfeld to enable other corporate entities to give the instructions about what to do. So just apply my fruit example to this example and just weight up there.
Now, Mr Ahmed may be able to send you some very basic submissions but he's going to - he won't be stuck by them but give you an outline of the legal approach he's going to make to the case and refer to some basic facts, and if he's got any case law there or any legal principles or texts or anything he can refer you to he'll give you notification of that.
In the old days when I started law you had to go up to the library and photocopy pages, five cents a page and so on. Now you can push a button on the internet and under Law Foundation of New South Wales or any of the other free services you can get a myriad of legal texts and things of that nature. So have a look at that as well. If there's any proposition of resolving this case it's got to be done quickly." (CB 288, T p 67, ln 45 onwards)
and
"HIS HONOUR: Let me just read to you, Mr Preston, the section of the Evidence Act that talks about, and the predominant section that talks about whether or not a matter is relevant. Section 55 of the Evidence Act.
"(1) The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding."
I have determined that an issue of fact in the proceedings is not whether or not the services provided by the Plaintiff were of an appropriate or reasonable quality or otherwise, or whether or not they were provided at a certain time, a certain place in a certain amount, because the issue between the parties as defined in the pleadings and the particulars that I've read leading up to this matter being allocated two hearing days, was not those issues. The issue was clearly identified in your pleadings and in the request for particulars whether or not Norfeld Pty Ltd had any contractual liability to the Plaintiff. You abandoned your cross-claim. There's no pleading in relation to a set off for negligence; breach of duty or care; for breach of contract; for breach of federal legislation, in those days under the old Trade Practices Act or otherwise.
PRESTON: Yeah, because I was not allowed to by the Court.
HIS HONOUR: No, you had more than a year to do that." (CB 367)
The third observation is that the transcript suggests that Mr Preston was not in any sense cowed or overwhelmed by the proceedings. He put his submissions forcefully and repeatedly. This has some significance in considering his silence when Mr Ahmed and the Magistrate discussed (at CB 128) that the issue was whether Norfeld was the proper defendant. It may also be relevant in considering the extent to which the fact that Norfeld was unrepresented should play a part in determining the flexible content of natural justice in the particular circumstances of the case.
The fourth observation is that Norfeld's assertion that the services were not provided (or not provided on instructions) and that the invoices were exaggerated was always put globally and in general terms.
At no stage has Norfeld identified which particular invoices are disputed or the basis upon which they are disputed. This observation applies to the correspondence which occurred before the Local Court proceedings were commenced, the litigation in the Local Court and the submissions made to this Court. I have been unable to find any material in which Norfeld, Mr Preston or any of his legal representatives have indicated which of the subject invoices contained fees for services that were not provided or not provided on instructions.
The fifth observation is that there is a little confusion within the various passages as to whether Mr Preston was stopped from cross-examining on these issues altogether. I accept that the majority of the passages upon which Norfeld relies suggest that he was but the Magistrate said (at CB 234 ln 25-28):
"In your cross-examination of Mr Schieber in relation to the outstanding invoices you put to him if you want that what's in those invoices was either not rendered, the services weren't rendered or they've overcharged or otherwise."
At the same time the magistrate was not prepared to let Mr Preston go to "each and every invoice". As far as I can tell, there was (and is) no suggestion that each and every invoice was disputed. One of the problems for the Magistrate was that no attempt was made to identify which invoices were disputed and which were not.
WATERMARK'S CASE IN THE LOCAL COURT
The case advanced by Watermark in the Local Court was that Watermark was owed outstanding professional fees by Norfeld in the amount of $73,250.55. The fees arose from the provision of certain patent and trademark services by Watermark to Mr Preston or Preston Australia during the period between 17 August 2010 and 11 August 2011 and which Norfeld had undertaken to pay. This was set out in Watermark's Further Amended Statement of Claim of 9 October 2012.
At the hearing, Watermark relied on the affidavits of Gina Steryos, Christian Schreiber and Christopher Line sworn on 1 October 2012. Each of these witnesses gave oral evidence and was cross-examined. Mr Preston relied on his own affidavit sworn on 5 October 2012.
The exhibits tendered were:
1. Affidavit of Ms Gina Steryos dated 1 October 2012
2. Letter from Christian Schreiber dated 30 November 2001 to Mr John Preston
3. ASIC names search in relation to Preston International Pty Ltd CAN 003792247
4. Affidavit of Mr Josef Alexander Christian Schreiber dated 1 October 2012
5.Licence and technical assistance agreement between Patent Marketing Corporation Pty Ltd and Potain SA
6. Email from Ms Leanne Oitmaa of 18 February 2009 to Preston
7. Affidavit of Christopher John Line, sworn 1 October 2012
8. ASIC company search for Patent Marketing Corporation Pty Ltd, dated 11 February 2013
9. Unsworn affidavit of John Clement Preston
10.Statement of John Clement Preston dated 5 October 2012
11.Two statements of accounts to Norfeld and Preston Australia Pty Ltd respectively
12. Bundle of documents produced by Mr Preston showing the arrangements between the plaintiff and defendants
13. Document showing Plaintiff invoicing Preston Australia
14. Insurance claim, insurance payment and photos arising from accident flooding top floor of Preston's offices (tendered following objection from Ahmed as to relevance)
15. Bundle of National Australia Bank statements for Norfeld Pty Ltd
Mr Preston's cross-examination of Mr Line included the following question and answer (CB 352):
"Q. So you go to paragraph 6 (of Mr Line's affidavit) and it says, "John Preston, on behalf of Norfeld, continuously advised me that it had difficulty in financing." Do you have any documents, any proof that it was Norfeld which had the financial difficulties?
A. No. I have both recollection and emails, which go back and forth, between you and I in regard to the payment of our invoices, which you were having financial difficulties finding the ability to pay those invoices and those invoices were due to Norfeld Pty Ltd, by you for Norfeld Pty Ltd. So our discussions, there's various emails there which say, "We have financial difficulties. We are arranging new banking facilities. We're looking for a new line of credit to pay your invoices", and our invoices are in the name of Norfeld Pty Ltd."
Mr Preston's affidavit of 5 October 2012 included the following (CB 67 [18]):
"[A]t no time is Norfeld Pty Ltd responsible or liable for any fee for debt of others. Norfeld Pty Ltd paid on behalf of others to stop any abandonment of patent applications. On or about 2007, the trading group of company was experiencing a common solvable financial problem due to the following:
a) Extremely huge patent fees paid to Watermark.
b) Hugh Research & Development cost paid to develop the products for commercial uses
c) Low income as the products were not commercialised yet.
Mr Schreiber and I had a discussion how to resolve the problem:
Me: I will get another company Norfeld to pay the debt for the time being on behalf of the companies but you will have to invoice Norfeld because of GST requirement. Norfeld can't just pay someone else's invoice, it has to be in the name of Norfeld for GST requirement.
Mr Schreiber: Yes, GST problem, I understand. I will send an invoice to Norfeld to get over the GST problem.
Me: Once the companies are making money and we commercialised the products, we will revert to the previous arrangement. I will advise you."
Mr Preston gave the following evidence in cross-examination:
"A. No because Rita had instructions to pay all the invoices from a patent attorney through Norfeld because she runs the bank accounts; she knows where the money is and she would be making the payment.
Q. So if that was true, why have you in paragraph 18 set out a conversation which goes for almost a page that you had with Mr Schreiber? The whole purpose of that conversation was which Preston entity is going to pay. That's the whole purpose of that conversation, isn't it? "I will get another company, Norfeld, to pay the debts". That's how you start the conversation. "Once the companies are making money, we will revert to the previous arrangements"?
A. That's right." (CB 388)
and
"Q. And then you say Mr Schreiber says "I accept that. Look John, head office is on my back about the payment. I can't act until you pay all the fees". I put it to you sir that that part of the conversation is fabrictated. Do you agree with that?
A. No, no. Some time I went to his office. We, we meet in the board room and there would be discussions. In this case it was, he was concerned that head office was on his back and he was telling me that he can't do much more work if I don't pay my bills and I said "Well look. Okay look. This is only an interim arrangement. When the companies get on their feet, meaning the, the product is being researched and we got all the research and development, we start manufacturing "then that product goes into a separate company and then that company would be paying the fees for the patent." (CB 389)
and
"A. ... Norfeld was paying the account on behalf of other companies, and then once that company got on its feet, got the product up and running, it would then pay its own fees. And that means that once somebody gets a licence, they have to pay a licence agreement and Norfeld's got nothing to do with patents so eventually I would separate the companies..." (CB 390)
See also the exchange recorded at CB 187 reproduced above at [65].
Eighty one invoices dated from 17 August 2010 to 11 August 2011 from Watermark to Norfeld were included as part of Gina Steryos' affidavit sworn 1 October 2012 (CB 667-748). The invoices are labelled "Tax Invoice" and are made out in reference to subjects such as "Fencing", "Safety Barriers" and "Construction Platform". Each invoice nominates Norfeld as the debtor, includes its address and bears an invoice number, date and debtor code. Some invoices include the address for Preston Australia Pty Limited, which is given as the same address as that of Norfeld Pty Limited: see for example, the invoice dated 22 October 2010 at CB 689. All invoices nominated John Clement Preston as the "applicant" and I assume this is a reference to the applicant for a patent or trademark. In some invoices, a description of the services is also included, for example the invoice dated 2 September 2010 at CB 676:
"Fees associated with renewal of patent (application), including payment of official fees, surcharge fees (where applicable), associate's charges, disbursements and our service charges."
Each invoice details the amount incurred for professional services, disbursements and associated fees. The name of the individual issuing each invoice - eg. "Penny McNamara" or "Cheryl Collins" is also included. At the bottom of each invoice is the following:
"PAYMENT TERMS: STRICTLY 30 DAYS
If paying this invoice by $AUD cheque, please forward directly to Watermark ... Otherwise deposit directly into the following bank account listed below and advise Watermark of the payment details..."
A chart summarising the invoice also highlighted those invoices which remained outstanding (CB 646).
Mr Preston cross-examined Mr Line about these invoices:
"Q. No, but all your correspondence is to Preston Australia. Correct?
A. To you, as managing director and shareholder and director of Norfeld.
Q. Well, can you show me where it says that in any documentation?
A. Well, I just said that it's not specifically mentioned in the documentation, but in our discussion that was always the reasonable implication that you were acting on behalf of Norfeld and when we had verbal conversations you were quite clear that Norfeld was our debtor.
Q. Where does it say that? Where is it quite clear that Norfeld was a debtor?
A. Well, I think if you go back to the correspondence and the invoicing that Watermark did to your organisation from a - over a substantial period of time, all those invoices were issued in the name of Norfeld Pty Ltd.
Q. Were any invoices issued in the name of any other companies?
A. Not that I'm aware. I have not looked at that detail.
Q. You're not aware that other invoices were issued to Preston Australia?
A. They may well have done, but before the period that you instructed to invoice Norfeld Pty Ltd, in 2007. That may have been the case, but I haven't looked at that detail." (CB 315)
In Mr Preston's email of 25 October 2007 (CB 866), to which I have already referred, he gave specific instructions that Norfeld to be billed for the work done for him, Preston International Pty Limited and Preston Australia Pty Limited:
"3.All payments will be made by Norfeld Pty Limited, Norfeld Pty Limited have no interest in the Intellectual Property.
4.I have an agreement with Norfeld and they pay for the Intellectual Property fees.
5.Preston International Pty Limited is dormant, it has not traded since 2002 and will not trade further. Do not correspond with Preston International Pty Limited.
6.All previous dealings have been with Preston Australia Pty Limited and you continue to correspond with Preston Australia Pty Limited but all invoices are made out to Norfeld Pty Limited on all matters new and old. Norfeld Pty Limited have been paying your bill for over 12 months now. All cheques come from form Norfeld."
The Magistrate said:
"This case all revolves around a series of emails and oral conversations that occurred around about, and I'll just get to the emails themselves, started with an email - and I'm just saying this to you so as I understand the real essence of this case as I've read it thus far - there's an email from you to Christian Schreiber. And can I just say this to you, that under section 161 of the Evidence Act an electronic communication effectively is prima facie evidence of who sent it, when it was sent, who it was sent to and things of that nature unless sufficient evidence is provided by you or anybody else to place sufficient doubt on the authenticity of the document.
What that tells me is that at or about 2.08pm on 24 October 2007 you sent an email to Christian Schreiber saying, "Christian, please invoice Norfeld Pty Ltd all matters and not Preston Australia Pty Ltd." Then there's the response where Mr Schreiber queries what your instructions are in that regard. The evidence of the plaintiff is that at that point in time you were a director and sole shareholder of the defendant company Norfeld, and you were also the direct and sole shareholder of the other company Preston Australia Pty Ltd.
And then it goes on to your response which is an email dated 25 October 2007 at 11.18am to Mr Schreiber and there set out in seven paragraphs or seven lines or points appears to be instructions given by you as a director of each of those two companies." (CB 144)
NATURAL JUSTICE AND THE RIGHT TO CROSS-EXAMINE AND BE HEARD
As Mason J said in Kioa v West (1985) 159 CLR 550 (at 584) "what is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia the nature of the inquiry, the subject matter and the rules under which the decision-maker is acting": see also Mobil Oil Australia v Federal Commissioner of Taxation (1963) 113 CLR 475, 504.
"In ordinary court-conducted litigation to deny a party completely the opportunity to cross-examine a witness would be a denial of natural justice": Beveridge v Dontan Pty Ltd (1991) 23 NSWLR 13 at [12]. The question will ultimately be whether "each party [has] been given a fair opportunity to put his, or her or its case and point of view": Beveridge at [13]. As to the requirement that a party has the right to cross-examine, see also Finch v Goldstein (1981) 55 FLR 257, 277 (Ellicott J); Wakim v Mathiew Pty Ltd [2002] NSWSC 405 at [25]-[30] and GPI Leisure Group v Herdsman Investments (No 3) (1990) 20 NSWLR 15, 17-22 (Young J).
The fact that a litigant is not represented by a lawyer may have some relevance to the content of the requirements for natural justice in a particular case. Norfeld placed some (but not particular) reliance on the fact that it was not represented and Watermark conceded the relevance of the matter to a degree. Neither party placed particular emphasis on this aspect of the case and neither took me to the authorities on the subject. I have considered the following authorities which deal with the fact that a litigant is not represented and the extent to which this impacts on considerations of natural justice: Marriage of Johnson (1997) 22 Fam LR 141; Kasupene v Minister for Immigration & Citizenship (2008) 49 AAR 77 at [14]-[21], [28]-[29],[36]-[37] (Flick J); Jeray v Blue Mountains City Council & Ors (No 2) [2010] NSWCA 367; Boulos v Martin(No 2) [2012] NSWCA 161; Williams v NSW Land and Housing [2012] NSWSC 1022 at [45]-[47] (Schmidt J) and Jamal v Director of Public Prosecutions [2013] NSWCA 355 at [41], [46] (Gleeson JA).
In Jeray v Blue Mountains City Council, Allsop P said at [6]:
"At the root of procedural fairness is the provision of a fair hearing to a litigant and the basal notion that the litigant has understood the proceedings before him or her and has had an adequate opportunity given to him or her, considering his or her attributes, qualities and deficiencies which render the litigant more or less able to vindicate his or her rights in court. A sharp line between rules and consequences cannot be drawn in this respect. Analogies of the rules of the game and how the game is played may be helpful at one level, but ultimately each circumstance has to be analysed and evaluated to see whether in a human context, a fair hearing has been provided."
In the same case, MacFarlan JA said [54]:
"...the respondents accept that in fulfilling the basic obligation to ensure a fair trial, additional obligations may fall upon a judge where there is a litigant in person. Indeed, the respondent's counsel accepted that the law in this respect was appropriately stated by Justice Basten ... in Lee v Cha [2008] NSWCA 13 at [49]. Justice Basten said:
'The relevant principles, if they can be so described, derive from the obligation of a trial judge to take appropriate steps to ensure that a party appearing unrepresented has sufficient information about the practice and procedure of the Court as is reasonably practicable for the purpose of ensuring a fair trial.'"
In Boulos v Martin (No 2) [2012] NSWCA 161 Whealy JA said at [22]-[23]:
"[T]here are not two laws to be applied where a litigant is unrepresented; one for the benefit of the unrepresented person and the other for the person who may have legal representation.
The Court does its best to extend every assistance it can within the bounds of propriety and fairness to unrepresented litigants and I believe we have done so in the present matter. The law however is constitutionally, and in every respect, to be interpreted the same way for all citizens whether they have the benefit of a lawyer or they do not."
In civil litigation, the precise content of the requirements of natural justice will also be guided by the pleadings and relevant case management provisions.
APPLICATION OF PRINCIPLES TO THE FACTS OF THIS CASE
Norfeld's case, as presently articulated, relies to a significant degree on those passages of the transcript which are set out above at [66]. However, to determine whether it was denied a fair hearing in the relevant sense, it is necessary to review the whole of the transcript.
Such a review shows that the Magistrate explained the procedures to Mr Preston in a clear and intelligible way.
It also shows that his Honour attempted to keep the case moving and within the parameters of the issues that truly arose. In doing so, he provided Mr Preston with significant latitude on the ground that he was not legally qualified.
Mr Preston availed himself of the opportunity to cross-examine the witnesses at some length and with varying degrees of success. However, on the central issue in the case, the witnesses remained unshaken.
Watermark presented a powerful case and the extent to which Norfeld had a legitimate defence to the claim was, on my review of the material, highly questionable. Rather, it seems that Mr Preston (and his companies including Norfeld) did not want to pay and that they had some difficulty in paying. Neither of those things affects the question of whether the debt was owed.
I have come to the conclusion that Norfeld was not denied procedural fairness or natural justice. Had there been any legitimate contest as to "quantum" in the sense that Norfeld alleged that any of the invoices were based on services that were not rendered or that the services were not rendered on instructions, Mr Preston had ample opportunity to articulate that contest and to do so much earlier, and with greater particularity, than he did.
I have taken into account that Norfeld was not represented and that Mr Preston was not a lawyer. I have had particular regard to this when considering any deficiencies in the pleadings. My view is that the Magistrate adequately fulfilled his obligation to ensure that Norfeld received a fair hearing.
CONCLUSIONS AND ORDERS
I am not persuaded that Norfeld was denied procedural fairness. The appeal should be dismissed.
Given the substance of the matters finally argued, I would be inclined to grant leave under s 40(1) of the Local Court Act insofar as the appeal is grounded in a question of mixed fact and law.
In view of the conclusion that I have reached on the substance of the argument, the controversy as to whether the application to amend the grounds of appeal by way of the proposed Second Further Amended Summons is of no practical moment. Even if leave were granted to amend, the final result would not be affected. However, in view of the history of the litigation, the orders made by Campbell J that no further amendments be allowed and to indicate the Court's condemnation of Norfeld's conduct of the proceedings, I am disposed to refuse the application to amend. As I have said, this does not affect the ultimate outcome of the appeal. I have considered the arguments made under the proposed amendments and have concluded that they are without merit.
The orders that I make are these:
(1) Leave to appeal under s 40(1) of the Local Court Act is granted.
(2) The application to amend the further amended summons is refused.
(3) The appeal is dismissed.
(4) The Plaintiff is to pay the Defendant's costs, including the costs of all interlocutory applications where costs were reserved or otherwise.
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Decision last updated: 31 July 2014
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