Priority Networking Pty Ltd v Peterson
[2018] WASC 36
•8 FEBRUARY 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: PRIORITY NETWORKING PTY LTD -v- PETERSON [2018] WASC 36
CORAM: LE MIERE J
HEARD: ON THE PAPERS
DELIVERED : 8 FEBRUARY 2018
FILE NO/S: CIV 1598 of 2017
BETWEEN: PRIORITY NETWORKING PTY LTD
Plaintiff
AND
JUSTIN PETERSON
Defendant
Catchwords:
Practice and procedure - Appeal from decision of registrar - Whether an appeal of a registrar's decision is by way of rehearing or hearing de novo - Whether grounds of appeal need to be provided on appeal notice
Legislation:
Rules of the Supreme Court 1971 (WA), O 60A
Result:
Plaintiff granted leave to file and serve amended appeal notice specifying grounds of appeal
Category: B
Representation:
Counsel:
Plaintiff: No appearance
Defendant: No appearance
Solicitors:
Plaintiff: Hotchkin Hanly Lawyers
Defendant: Mills Oakley Lawyers
Case(s) referred to in judgment(s):
Allesch v Maunz (2000) 203 CLR 172
Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194
CVW Group Holdings Pty Ltd v Addison [2011] WASC 267
Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124
Forte v Raith Nominees Pty Ltd [2016] WASC 337
Harris v Caladine (1991) 172 CLR 84
Lacey v Attorney-General (Qld) (2011) 242 CLR 573
Pullinger Readhead Lucas v Golden West Resources Ltd [2009] WASC 140
LE MIERE J:
Summary
By originating summons filed 11 April 2017, the plaintiff commenced proceedings seeking orders pursuant to O 26A r 4 of the Rules of the Supreme Court 1971 (WA) (RSC) that the defendant give it pre-action discovery of certain classes of documents because the plaintiff believes it has or may have a cause of action against the defendant. The application was heard on 9 August 2017 by Registrar C Boyle. On 25 August 2017 the registrar distributed to the parties unpublished reasons for decision and on that same date refused the plaintiff's application for pre-action discovery. On 4 September 2017 and pursuant to O 60A r 5(3), the plaintiff filed a Form 80A appeal notice appealing the registrar's decision and asserting that the appeal be by way of a new hearing. The appeal notice did not specify any grounds of appeal.
By letter dated 5 September 2017 the defendant advised the Court that he seeks an order that the appeal be dismissed on the basis that a mandatory provision in O 60A r 5(3)(b) RSC has not been complied with because grounds of appeal have not been provided.
At a hearing before me on 21 September 2017 the defendant submitted that the appeal ought to be dismissed or, alternatively, the plaintiff should be required to provide grounds of appeal. I made orders that the parties file submissions as to whether the appeal should be summarily dismissed and this application be determined on the papers.
For the reasons that follow I find that the plaintiff's Form 80A is irregular because it fails to specify grounds of appeal. The plaintiff shall have leave to file and serve an amended Form 80A appeal notice, which shall specify grounds of appeal in terms of Annexure A to its submissions of 2 November 2017.
The registrar's decision
The registrar commenced his reasons for decision by reviewing O 26A r 4 and authority in relation to the application of that rule, framing two questions that had to be answered:
(i)whether the plaintiff's affidavit, filed in support of the application, goes beyond 'assertion, conjecture or suspicion' to demonstrate that the plaintiff may have a cause of action of the kind asserted; and if so,
(ii)whether it would be a proper exercise of discretion to order the defendant to swear to the classes of documents sought.
The registrar set out the three possible causes of action against the defendant identified by the plaintiff - breach of fiduciary duties, breach of duties of confidentiality and breaches of a duty in tort not to interfere with the contractual relationship between the plaintiff and the vendor of the business. The last of the possible causes was not pressed at the hearing.
At the hearing, the plaintiff sought discovery of six classes of documents. In relation to the first ‑ 'communications concerning the provision of IT services by the defendant to former clients of the plaintiff' ‑ the registrar declined to order discovery, identifying a number of deficiencies in the plaintiff's case:
There is no more than speculation that the defendant breached his duties in the ways suggested, and the period sought is far too broad to be justifiable if the discretion to order discovery of documents of the class identified had been enlivened (page 8).
The registrar dealt with the other categories of documents, ‑ documents of Virtuosys Pty Ltd, a company in which the defendant is one of two directors ‑ together. The registrar found that the defendant could not be compelled to exercise his power as a director to obtain access to the books of the company of which he is a director for a purpose collateral to both his duties and the company's interests. Further, the registrar found that the class of documents sought is too broad both as to nature and time of creation.
An amendment to O 60A RSC
Order 60A describes the jurisdiction of the registrars of this Court and sets out the procedure to be adopted upon an appeal from a decision of a registrar. Order 60A r 4 ‑ 6 provide, relevantly, (r 6A omitted):
4.Appeals from decisions of registrars
(1)A party who is dissatisfied with an order or decision of a registrar may appeal from it.
(2)The appeal must be made to a judge, but a judge may order that it be heard by a master.
(3)This rule does not apply to an order or decision of a registrar ‑
(a)made or given in relation to a cause, matter, question or issue referred to or tried by the registrar under section 50 or 51 of the Act; or
(b)made or given in proceedings to which Order 61 applies; or
(c)when acting as a taxing officer.
5.Appeal procedure
(1)An appeal from the decision of a registrar must be commenced within 10 days after the date of the order or decision appealed against or any longer period allowed by a judge or master.
(2)The appeal must be commenced and proceed on the file in which the action was commenced.
(3)The appeal must be commenced by filing an appeal notice in Form 80A, stating the following ‑
(a)the order or direction appealed against;
(b)briefly, but specifically, the grounds of the appeal;
(c)the order or directions sought at the appeal;
(d)any directions considered necessary to facilitate the hearing of the appeal;
(e)for the period of 32 days beginning on the 14th day after the date of the filing of the appeal notice, any days within that period on which the appellant will be unavailable to attend the hearing of the appeal.
(4)No appeal books are required for the appeal.
(5)Within one day after filing an appeal notice under this rule a copy of it must be served on the other parties.
…
6.Appeal is by way of new hearing
An appeal from a registrar is to be by way of a new hearing of the matter that was before the registrar.
Each of these rules is the result of an amendment to the Rules on 13 November 2015. Prior to their amendment, O 60A r 4 ‑ 6 provided that:
4.Appeals from registrars' decisions
(1)Subject to subrule (6), a person affected by an order or decision of a registrar may appeal from it.
(2)The appeal must be made to a master unless a judge orders otherwise.
(3)The decision of a master on an appeal from a procedural decision of a registrar is final.
(4)The decision of a judge on an appeal from a decision of a registrar is final.
(5)A procedural decision means ‑
(a)a case management direction made under Order 4A; or
(b)a decision as to the time for compliance with an interlocutory order; or
(c)an enforcement order made under Order 4A other than a self‑executing order for judgment, striking out pleadings, or otherwise.
(6)This rule does not apply to an order or decision of a registrar ‑
(a)made or given in relation to a cause, matter, question or issue referred to or tried by the registrar under section 50 or 51 of the Act; or
(b)made or given in proceedings to which Order 61 applies; or
(c)when acting as a taxing officer.
5.Appeal procedure
(1)An appeal from a registrar shall be commenced within 3 days after the date of the decision concerned by filing a notice of appeal.
(1a)The appeal shall be commenced and proceed on the file in which the action was commenced.
(2)The notice of appeal shall state ‑
(a)the order or direction appealed against; and
(b)briefly, but specifically, the grounds of the appeal; and
(c)the orders or directions to be sought at the appeal.
(3)All parties shall file written submissions within 3 days after the filing of the notice of appeal.
(4)No appeal books are required for the appeal.
(5)The appeal shall be entered for hearing within 7 days after it is commenced and if not so entered shall be taken to have been discontinued.
(6)Within 24 hours after filing a document under this rule a copy of it shall be served on the other parties.
6.Powers of judge or master on appeal
(1)An appeal from a registrar shall be by way of rehearing.
(2)The judge or master hearing an appeal has the powers and duties of the Court of Appeal on an appeal and may cancel or amend any interlocutory order or case management direction made by the registrar.
Form 80A was inserted by the same amendment and is set out below:
80A Appeal notice (Registrar's decision) (O 60A r 5(3))
Supreme Court of Western Australia
No:_________________________________________
Notice of appeal from decision of Registrar
Parties
Plaintiff
Defendant
Name of party appealing
Name of Registrar
Date of decision
Last date for appealing1
Last date:
Is an extension of time needed? Yes/No
Orders or directions appealed against
1.
2.
3.
Grounds of appeal
Orders sought on appeal
1.
2.
3.
Directions sought to facilitate appeal2
1.
2.
3.
Dates when unavailable for hearing of appeal3
Date of notice
Date of filing
Signature of party appealing or lawyer
Party appealing/Lawyer
Date
Contact details of party appealing or lawyer
Name
Firm
Address
Phone
Fax
Reference
Notes to Form No 80A ‑
1.The date being 10 days after the date of the order or decision appealed against. See Order 60A r 5(1).
2.For example, filing of further affidavits or submission.
3.For the period of 32 days beginning on the 14th day after the date of the filing of the appeal notice. See Order 60A r 5(3)(e).
The issue in the present case
In response to the plaintiff's appeal notice the defendant argues that the appeal notice is incompetent, on the basis of the failure to specify grounds of appeal, such that the appeal notice should be dismissed, or alternatively, the plaintiff should be required to provide grounds of appeal. The plaintiff contends that upon the proper construction of O 60A r 6, an appeal under O 60A is an appeal de novo. A decision-maker in a hearing de novo exercises their powers irrespective of any error made by the original decision-maker: Allesch v Maunz (2000) 203 CLR 172 [23] (Gaudron, McHugh, Gummow & Hayne JJ); Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 [14] (Gleeson CJ, Gaudron & Hayne JJ); Forte v Raith Nominees Pty Ltd [2016] WASC 337. A corollary of this feature is said to be that it is unnecessary to specify grounds of appeal for a hearing de novo, because the decision is to be made afresh. In response, the defendant argues that upon its proper construction, O 60A r 6 must provide for a rehearing and not a hearing de novo.
An issue in the present case is the appropriate construction to be given to the words 'new hearing of the matter' in O 60A r 6. This terminology differs from that used in relation to appeals to this Court and to the Court of Appeal ‑ 'by way of rehearing unless another written law provides otherwise' ‑ see RSC O 65 r 8 and Supreme Court (Court of Appeal) Rules 2005 (WA) r 25.
The nature and content of an appeal is a matter of statutory construction of the terms of the statutory grant of the right of appeal: Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 (Sperway Constructions) 621 ‑ 622 (Mason J); Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 [2] (per curiam).
In the context of a legislative process which may at times leave courts with relatively limited information in construing the nature of the appeal that was intended, the High Court has noted the value in classifying a particular appeal within the recognised taxonomy of appeals: see, for example, Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [12] ‑ [13].
A well accepted taxonomy of appeals is that made by Mason J in Sperway Constructions at 619 ‑ 622, subsequently adopted by the High Court in Fox v Percy (2003) 214 CLR 118 [20] (Gleeson CJ, Gummow & Kirby JJ), Dwyer v Calco Timbers [2] (per curiam) and Lacey v Attorney‑General (Qld) (2011) 242 CLR 573 [57] (French CJ, Gummow, Hayne, Crennan, Kiefel & Bell JJ), where his Honour Justice Mason distinguished between:
(i)an appeal stricto sensu, where the issue is whether the judgment below was right on the material before the trial court;
(ii)an appeal by a rehearing on the evidence before the trial court;
(iii)an appeal by way of rehearing on that evidence supplemented by such further evidence as the appellate court admits under a statutory power to do so; and
(iv)an appeal by way of a hearing de novo.
At (621) Mason J said that when determining whether an appeal is a hearing de novo or a rehearing, the following factors can be considered:
a.whether there is provision for a hearing at first instance;
b.whether there is a record of the proceedings;
c.whether the authority is bound to apply the rules of evidence;
d.whether the issues are non‑justiciable; and
e.whether the authority is required to give reasons.
In Allesch v Maunz, Gaudron, McHugh, Gummow & Hayne JJ considered the distinction between an appeal by way of rehearing and a hearing de novo in the circumstances of the case before them:
For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance [23].
In the present case the appellant submits that O 60A provides for an appeal from a decision of the registrar to be an appeal by way of a hearing de novo whereas the respondent submits that such an appeal is an appeal by way of rehearing on the evidence before the registrar.
The appropriate construction to be given to O 60A
Distinguishing between an appeal by rehearing an appeal de novo is often a difficult task. It is appropriate to start with the words of O 60A r 6. Following the November 2015 amendment, this rule now refers to a 'new hearing of the matter' as opposed to a 'rehearing'.
Prior to this amendment, in CVW Group Holdings Pty Ltd v Addison [2011] WASC 267 (CVW) I identified an apparent inconsistency in the terms of O 60A r 4 ‑ 6, as it then was. This inconsistency was between:
(a)features of the right of appeal under O 60A (such as that an appeal be commenced by filing a notice of appeal and the need for the notice of appeal to state, amongst other things, the grounds of the appeal); and
(b)the fact that a registrar is exercising delegated authority, and the validity of that delegation requires that the exercise of the delegated power be subject to stringent review (and upon the view of some of their Honours in Harris v Caladine (1991) 172 CLR 84 may require a hearing de novo).
Similar comments were made by Jenkins J in Pullinger Readhead Lucas v Golden West Resources Ltd [2009] WASC 140 (Pullinger) at [5].
Following the amendment of O 60A, this inconsistency arguably remains. The salient factors identified by Mason J in Sperway Constructions are indicators that the appeal in this case is to be by way of a rehearing. The decision of the registrar was given following a formal hearing at which the parties were legally represented, a transcript was kept, written reasons were given and evidence was given on oath by affidavit. The registrar was obliged, and did, follow the rules of evidence. Further, O 60A r 5(3) requires that the appellant file an appeal notice in Form 80A, which specifies 'briefly, but specifically, the grounds of the appeal'.
However, a construction of O 60A r 6 that an appeal is by way of a rehearing would leave substantial uncertainty as to the validity of the delegation of authority to a registrar. A registrar is not a member of this Court. The Supreme Court Act 1935 (WA) s 167(1)(c) provides that rules of court may be made conferring on a registrar jurisdiction to determine certain matters. In CVW at [13] to [17], I referred to the decisions of Mason CJ and Deane J, Dawson J, Gaudron J and McHugh J in Harris v Caladine (1991) 172 CLR 84, which expressed broadly consistent views about the breadth of the appeal right which must exist before any delegation of the jurisdiction, powers and functions of the Family Court to its officers is permissible:
Mason CJ and Deane J held that the delegation of some part of the jurisdiction, powers and functions of the Family Court as a Federal Court to its officers is permissible so long as two conditions are observed. The second condition is that the delegation must not be inconsistent with the obligation of a court to act judicially and that the decisions of the officers of the court in the exercise of their delegated jurisdiction, powers and functions must be subject to review or appeal by a judge or judges of the court. Their Honours said:
'For present purposes it is sufficient for us to say that, if the exercise of delegated jurisdiction, powers and functions by a court officer is subject to review or appeal by a judge or judges of the court on questions of both fact and law, we consider that the delegation will be valid. Certainly, if the review is by way of hearing de novo, the delegation will be valid. The importance of insisting on the existence of review by a judge or an appeal to a judge is that this procedure guarantees that a litigant may have recourse to a hearing and a determination by a judge (95).'
Dawson J considered that further evidence may be called on the appeal because that was the consequence of the specific provision that the review be by way of hearing de novo. But his Honour held that even if there had been no such provision the result would, in the absence of any provision to the contrary, have been much the same. His Honour explained:
For where the function of exercising a discretion is delegated by a court, as it may be delegated to a Registrar, the exercise of the delegated discretion cannot confine the exercise of the same discretion by the person in whom it is primarily reposed … Upon a hearing by way of review of the decision of a Registrar the court is exercising its own discretion. There are not the same restrictions which exist when there is an appeal from a judge to whom a discretion is confided, rather than delegated, at first instance (125).
Gaudron J considered that the review of the exercise of power delegated to a registrar entailed a consideration of whether, quite apart from legal or other error, a different result should be arrived at.
McHugh J considered that nothing less than a hearing de novo to review the exercise of the power by the registrar was sufficient:
That is to say, appellate review is an insufficient condition of the delegation of the exercise of the power; there must be a complete rehearing of the facts and the law as they exist when the justice or judge reviews the order made by the officer. Otherwise, the officer and not the Justices or judges of the court would be exercising the original jurisdiction of the court (164).
It was a course open to the judges to retain reference in O 60A to a 'rehearing'. Instead, the amendment adopted the phrase 'new hearing'. The most plausible explanation for the amendment to O 60A r 6 is that, in light of the identification in CVW and Pullinger of some ambiguity in O 60A, the judges intended to confirm that an appeal under O 60A lies regardless of error. I find that this is so for three reasons.
First, an alternative construction would imperil the system of delegation that currently exists in this Court. The delegation of some of the jurisdiction, powers and functions of the members of this Court to the registrars is a vital element of the structure of this Court. These registrars have carriage of matters forming a considerable part of the workload of this Court in their case management, mediation and probate responsibilities. It is highly improbable that, following the identification of concerns that limiting the right of appeal of registrars' decisions might imperil the delegation of authority to those registrars, the judges would so limit the right of appeal without amending O 60A to end the delegation of authority to the registrars.
Second, the literal meaning of 'de novo' is 'from the beginning; anew' (Macquarie Dictionary). Reference to a 'new hearing' aligns with this meaning to a greater extent than reference to a 'rehearing'.
Third, whereas O 60A r 6 previously stated that a judge or master would have the powers and duties of the Court of Appeal ‑ which had the capacity to create confusion given that appeals to the Court of Appeal are by rehearing unless a statute provides otherwise ‑ that provision has now been completely removed.
What then is the precise scope of an appeal under O 60A? In CVW, I construed the right of appeal from a decision of a registrar as follows, and I adopt those comments in the present case:
The appeal from a registrar to a judge is not a hearing anew as if there had been no hearing before, and decision by, the registrar. That is apparent from O 60A r 5 which requires an appeal to be commenced by filing a notice of appeal and for the notice of appeal to state, amongst other things, the grounds of the appeal. … The appeal may be on the evidence before the registrar or as supplemented by any further evidence the judge admits. The appeal from a registrar to a judge is a hearing de novo in the sense that the powers of the court on appeal are exercisable not only where the appellant can demonstrate that, having regard to all the evidence now before the court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error. On an appeal from a registrar the court may exercise its powers regardless of error [17].
The Court may exercise its powers regardless of error. Nevertheless, the appealing party must identify the grounds of the appeal. That is expressly required by O 60 r (3)(b).
Conclusion
The plaintiff's Form 80A appeal notice fails to provide grounds of appeal as is required by O60A r 3(b). Attached as an annexure to the plaintiff's outline of submissions is a document setting out the plaintiff's grounds of appeal. The plaintiff shall have leave to file and serve an amended Form 80A appeal notice, which shall specify grounds of appeal in terms of Annexure A to its submissions of 2 November 2017.
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