Railtrain Services Pty Ltd v Kinsela

[2023] NSWDC 179

District Court

New South Wales

Medium Neutral Citation:

Railtrain Services Pty Ltd v Kinsela [2023] NSWDC 179

Hearing dates:

26 May 2023

Date of orders:

26 May 2023

Decision date:

26 May 2023

Jurisdiction:

Civil

Before:

Abadee DCJ

Decision:

See paragraphs 50 - 52

Catchwords:

APPEALS & REVIEWS – civil claim in Small Claims Division of Local Court – whether denial of procedural fairness – no issue of principle

Legislation Cited:

Local Court Act 2007 (NSW) ss 39, 41

Uniform Civil Procedure Rules 2005 (NSW) rr 14.7, 36.16

Category:

Principal judgment

Parties:

Railtrain Serviced Pty Ltd (plaintiff)
E Kinsela (defendant)

Representation:

Mr P Stringthorpe, Counsel for the plaintiff
Mr E Kinsela, in person

File Number(s):

2023/00013317

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Local Court of New South Wales

Jurisdiction:

Small Claims Division

Date of Decision:

21 December 2022

Before:

Magistrate Thomas

File Number(s):

2023/00013317

EX TEMPORE REASONS FOR JUDGMENT

Introduction

1. This is an appeal from a decision of the Small Claims Division of the Local Court of New South Wales in Parkes made on 21 December 2022. By the decision, the plaintiff’s claim against the defendant was dismissed.

2. The plaintiff’s ultimate submission is that the decision should be set aside and remitted back to the Local Court (to a different Magistrate) for determination.

The claim in the Local Court

3. On 31 August 2022, the plaintiff commenced the Local Court proceeding, by which it brought a money claim in the Local Court, seeking payment of the sum of $10,000 allegedly owed as a debt by the defendant pursuant to a bonding agreement entered into on or about 4 January 2022.

4. The plaintiff contends that the bonding agreement was collateral to a written employment contract with the defendant, dated 10 January 2022. Both of these documents were referred to (paragraphs 1 and 2 of the Statement of Claim). The defendant, in his defence, admitted the allegations. By the bonding agreement, it was said, the defendant was required to pay a liquidated sum to the plaintiff if the defendant voluntarily terminated the plaintiff’s employment within a specified period, from the commencement of employment, on the basis that the plaintiff had provided training to the defendant at no cost and the liquidated sum payable represented reimbursement for the costs of that training.

5. The statement of claim referred to a number of attachments. Attachments ‘A’ and ‘B’ were the employment services agreement (between plaintiff and defendant) and a bonding agreement, respectively. But the statement of claim that was filed did not actually attach those (or other) documents referred to in the pleading.

6. The plaintiff relies upon an affidavit of Mr Pager, affirmed on 23 February 2023.

The Lead up to the hearing

7. After the ‘pre-trial review’ that occurred on 17 November 2022, when the matter was fixed for hearing, and a direction was made for the parties to serve their documentary evidence by 1 December 2022, at 9:25am Mr Pager emailed the Local Court a zip folder containing copies of each of the annexures to the Statement of Claim. There was no content in the email.

8. Mr Pager was the National Industrial Relations Manager of the plaintiff. He identified that he was the person responsible for conduct of the Local Court hearing.

9. But Mr Pager’s email was acknowledged in an email from the Local Court, with the statement:

“I thank you for the documents. All have been printed and placed on file for the courts attention and a copy has been given to Mr Kinsella”.

10. Mr Pager deposed to his understanding that the attachments to the Statement of Claim had been filed and served on the defendant in compliance with the direction for the parties to serve their evidence by 1 December.

11. On 1 December 2022, Mr Pager sent another email to the Local Court, purporting to comply with the direction made on 17 November 2022 in which he attached “further” documentary evidence; in the form of 3 statements and their attachments. Mr Pager intended that these documents were to be supplementary to the documents he had filed on 17 November. What he wrote however was:

“In accordance with the Notice of Listing, please find attached further documentary evidence, in the form of 3 statements and their attachments, relied upon in this matter…”

12. Although he used the word “further”, Mr Pager did not indicate what they further to: he did not mention the attachments that he had sent to the Local Court, in the zip folder on 17 November 2022.

13. Written confirmation was supplied, by email, from the Parkes Local Court to Mr Pager on 1 December 2022, with the statement:

“Receipt is acknowledged of your email and attachments being evidence in the abovementioned proceedings. All have been printed and placed on file for the Magistrate’s attention on the 21 December 2022. There is no need to file them on-line.”

14. Mr Pager deposed that he understood that the ‘effect’ of the two emails received from the Local Court represented that the documents emailed on 17 November and 1 December 2022 respectively had been “accepted by the Court for filing and had been served on the defendant, so that the plaintiff would be able to rely on all the evidence at the hearing.” (emphasis added)

The hearing in the Local Court

15. Mr Pager, who represented himself, appeared by AVL link. Before the link was activated, the Magistrate engaged in conversation with Mr Kinsela who represented himself, explaining the procedure that was to occur. He should not have done so in the absence of Mr Pager; although in fairness, the Magistrate did purport to summarise the gist of that earlier dialogue when Mr Pager became connected.

16. At T 2.48 – 3.19, the following exchange took place:

HIS HONOUR: Okay so Mr Kinsella is here in person obviously because he lives at Parkes. Mr Pager the situation is this, I've just explained to Mr Kinsella, you filed your material which involves a number of statements.

PAGER: That’s correct.

HIS HONOUR: Yep okay I’ve got those and I’ve read those. Mr Kinsela has also filed some material and I’ve read that. I'm just going to go off the bench for about five or 10 minutes just to re-read it because I have read it but I just want to re-read it again. When I come back Mr Pager I will give you the opportunity because you're the plaintiff to address me on the evidence, I don't need you to read the evidence out. If there's any parts of the evidence or any specific parts of the evidence you want to take me to you can and you need to make submissions or tell me why you think I should find in favour of the company okay? When you've done that Mr Kinsela will be given the same opportunity to make his submissions as to why I should find in his favour or against you and once you've both done that I will then maybe straightaway if not I might adjourn for a short time I will then give a judgment and make a decision based on the statements that I've read and the submissions that you made. So in other words no one gets into the witness box, no one gets cross-examined, it's done purely on the statements and the submissions that you both make to me do you understand that?”

17. Mr Pager said that he interpreted those comments as conveying to him that the Magistrate had read the attachments to the Statement of claim (sent on 17 November) and the documentation sent on 1 December and that he “did not need to explain all of the evidence”.

The Magistrate’s decision

18. The Magistrate dismissed the plaintiff’s claim on the basis that it had not proved the terms of the contract. The Magistrate said (at T 12.27-12.34) that the two primary documents (ie the original contract of employment and bonding agreement) that the plaintiff relied upon “do not form part of the plaintiff’s evidence” and “to simply say well we have attached those to the statement of claim is in my view is not sufficient. That is in my view fatal to the plaintiff’s claim”.

19. The plaintiff complains that the Magistrate erroneously believed that the plaintiff’s evidence was confined only to the material supplied on 1 December 2022 and considered that the plaintiff was unable to rely upon documents identified as being annexed to its pleading.

The Grounds of Appeal

20. The plaintiff’s grounds in the summons acknowledge the limited jurisdiction of this Court to determine appeals from the Small Claims Division of the Local Court by reason of s 39(2) of the Local Court Act 2007 (NSW). All of the grounds of appeal are identified by reference to an assertion that procedural fairness was denied to the plaintiff.

21. The grounds identified in the Amended Summons (filed with the Court’s leave today) are:

1. the Magistrate denied procedural fairness by failing to have regard to the evidence relied upon by the plaintiff in the Local Court;

2. the Magistrate denied procedural fairness by rejecting the admissibility of evidence without giving the plaintiff the opportunity to be heard;

3. the Magistrate denied procedural fairness by:

1. failing to ask the plaintiff to specify the evidence it relied upon; and

2. failing to identify to the plaintiff the evidence which would form the basis for the Magistrate’s decision.

4. in the alternative to Ground 1, if the plaintiff’s evidence was not admitted, denying procedural fairness by not giving the plaintiff the opportunity the opportunity to submit why it should grant leave to the plaintiff to call the evidence.

5. in further alternative to Ground 1, if the plaintiff’s evidence was not admitted, denying procedural fairness by not granting the plaintiff leave to call the evidence where it had been referred to in the plaintiff’s statement of claim, served and placed on the Court file.

Evidence

22. I have already identified the matters identified materially by Mr Pager in his evidence.

The defendant’s evidence

23. The defendant, Mr Kinsela represented himself. He is a truck driver. He sought to rely upon no less than 6 affidavits filed on 13 March 2023. But 3 of those were duplicates of one another. One of those was in the usual form; although even then, much of the affidavit amounted to submissions.

24. Another affidavit filed attached a notice of listing dated 17 November 2022, which relevantly stated that “Last Date for Exchange and Filing of Documentary Evidence: 01 Dec 2022” and a Case Management Order.

25. The last of the affidavit’s filed attached the Local Court’s Practice Note Civ 1.

Parties’ submissions

The plaintiff’s submissions

26. The plaintiff’s written submissions recognise that to succeed with an appeal based upon a denial of procedural fairness at hearing in the Small Claims Division of the Local Court, it is necessary not only to establish error, but also that its consequences were material to the outcome of the decision. Another way of stating the latter aspect was proof that the plaintiff was denied the opportunity of obtaining a different outcome.

27. The plaintiff submitted that the error was simple. The Magistrate erred in finding that the plaintiff had not filed the two critical documents in its claim. Mr Pager had in fact filed them and the Magistrate was required to have regard to them. That was a denial of procedural fairness.

28. There were other matters that led to the same result. This included the Magistrate:

1. not ascertaining from the parties the evidence that they, respectively, relied upon;

2. leading the parties to think that that the critical documents were taken to be in evidence by inviting submissions about them, when the Magistrate did not treat them as being in evidence.

3. not giving the plaintiff leave to rely upon documents even if (contrary to the true position) the Magistrate believed that they had not been filed in the Court.

29. The plaintiff emphasised that it was surprising that at a hearing whose procedural rules indicated that cases were to be conducted with little technicality and where rules of evidence were not applicable, and, perhaps most significantly – that he was entitled to inform himself on any relevant matter in such a way as he thought fit - that the Magistrate would disregard the critical documents relied upon by the plaintiff.

30. The plaintiff submitted that it was not fatal to the appeal that Mr Pager did not object to the course of action proposed by the Magistrate, nor foreshadowed any application to set aside his order at any point.

The defendant’s submissions

31. The defendant personally prepared his submissions. With no disrespect to him, they were somewhat repetitive and prolix and to that extent did not readily aid my comprehension of his position. As to the factual matters, he emphasised the following.

Events prior to the hearing

32. The defendant accepted that on 17 November 2022 Mr Pager had emailed documents that were intended to be annexed to the plaintiff’s statement of claim to the Local Court, (including the contracts) but argued that Mr Pager had not indicated his intention that they were to be relied upon as the plaintiff’s evidence at the hearing. He accepted that it was fair to infer that the Registrar had filed them behind the statement of claim.

33. The defendant accepted also that on 1 December 2022, Mr Pager emailed three statements (not annexing the vital documents) which he did ask to be treated as evidence (by the reference to ‘exchange and filing’) and for which the Local Court confirmed was to be placed before the Magistrate and treated as evidence.

The Hearing

34. Mr Kinsela noted that the Magistrate acknowledged receiving a number of statements that had been filed and that Mr Pager had confirmed this. But he argued that it was up to Mr Pager to ascertain from the Magistrate the documents that the latter had and which he wished to rely upon.

35. Mr Kinsela then referred to the Magistrate asking Mr Pager not to read out evidence, but instead, to refer him to any parts of the evidence that Mr Pager wished for him to rely upon and invited him to make submissions about them. This, Mr Kinsela says, was an invitation for Mr Pager to identify the evidence he wished to rely upon.

36. On the basis of these matters, Mr Kinsela submitted that:

1. when Mr Pager sent the documents (the missing annexures to the statement of claim) to the Court on 17 November 2022, he did not indicate his purpose for doing so and, specifically, did not indicate his intention to rely upon them as evidence at the hearing;

2. the documents annexed to a party’s pleading cannot be treated as evidence at the hearing unless ‘specifically resubmitted’ as evidence in accordance with the pre-trial direction for service of evidence;

3. it was not incumbent upon the Magistrate to inquire of Mr Pager what documents he relied upon; even though in this case, the Magistrate confirmed receipt of documents which, it could be inferred had been sent by Mr Pager on 1 December 2022 and not 17 November 2022;

4. the Magistrate’s reference to the plaintiff having “filed your material, which involves a number of statements” prima facie should have indicated to Mr Pager the possibility that the Magistrate believed that it was the documents sent on 1 December 2022 (in express compliance with the pre-trial direction) that represented the entirety of the plaintiff’s case and should have triggered concern in Mr Pager that the Magistrate may have been unaware of the documents that Mr Pager had sent on 17 November 2022;

5. during the hearing, even if the Magistrate laboured under a misapprehension as to the documents that Mr Pager relied upon, it was Mr Pager’s responsibility to indicate to the Magistrate those which he relied upon rather than simply assuming that the Magistrate knew;

6. at no stage during the hearing, up to and including the delivery by the Magistrate of his reasons, when it became patently apparent that the Magistrate laboured under an erroneous assumption about the documents that formed part of the plaintiff’s case, did Mr Pager seek to eradicate that misapprehension, by seeking leave to rely upon the documents;

7. this was despite the Magistrate offering Mr Pager the opportunity to “take me to” parts of the evidence and make submissions or explain to him why he should decide the case in the plaintiff’s favour;

8. in all the circumstances, the plaintiff is bound by its representative’s conduct. It was not denied the opportunity to adduce evidence and make submissions about it.

37. Mr Kinsela also emphasised that although Mr Pager was not a practising lawyer, he had been admitted to the roll of legal practitioners and held a practising certificate. He should not receive the same degree of latitude as a purely self-represented litigant with no legal training.

Consideration

38. The problem began when Mr Pager purported to annex documents to a statement of claim at all. The rules clearly indicate that in pleadings, parties are expected to plead matters of fact; not evidence (UCPR, r 14.7). There was no need for Mr Pager to annex documents to the statement of claim at all. But by then correcting for his omission to actually annex the documents to the plaintiff’s pleading, by filing them on 17 November, Mr Pager inadvertently sowed the seeds for potential further confusion closer to the hearing after a pre-hearing direction had been given for the parties to ‘exchange and file’ their evidence.

39. Mr Pager intended that the documents he had sent on 17 November 2022 would be treated as evidence at the hearing without expressly declaring that intention. When he later sent documents on 1 December 2022, it was indicated clearly that they would be relied upon at the hearing. But where did that leave the documents that had been supplied to the Local Court on 17 November? Mr Pager did not say. He should have pointed out what he was doing.

40. But notwithstanding these issues, it appears from T 6.47 and T 11.16 – 11.22 that the learned Magistrate had before him and did, in fact, read the two contracts that Mr Pager had sent to the Local Court on 17 November. To reinforce the point, at T 11.32, the Magistrate noted that agreements signed by Mr Kinsela had been attached to the statement of claim. Further, as Mr Springthrope argued, much of the argument was premised upon all parties being aware of the content of the 2 contracts. This leads to an absurdity: why should argument precede on that basis unless the Magistrate was prepared to admit the documents? Another problem is that by his defence, Mr Kinsela admitted the documents. It is even more strange that the Magistrate felt he could not rely on them in this circumstance.

41. There was no issue that Mr Kinsela had not seen these documents: the Local Court indicated that they had been passed on to him back on 17 November. He was therefore on notice of their content.

42. As was pointed out in the plaintiff’s submissions, the rules of evidence did not apply to the hearing in the Small Claims Division. Rules of procedure were also such as to require the avoidance of technical concerns getting in the way of a hearing on the merits.

43. But the Magistrate considered himself constrained from taking these documents into account in his consideration of the merits of the claim. The Magistrate did not consider whether or not Mr Kinsela would be prejudiced by his taking the documents into account. The only reason he articulated for doing so was that Mr Pager did not expressly indicate, or clarify, his stated intention that both contracts, being part of the attachments to the statement of claim, were relied upon in the hearing.

44. Although it is important that parties comply with pre-trial directions for the filing and service of documents, as a matter of fact, and of substance, both the critical documents had been filed and served. It did not matter that they were not “re-submitted” (as they prudently should have been). The simple fact that the documents were referred to or attached to the plaintiff’s pleading was an obvious signal that the plaintiff would reply upon them. If, however, counterintuitively, the Magistrate was in any doubt, he should have asked Mr Pager. Both the Magistrate and Mr Kinsela had read and received them at or prior to the hearing. But the Magistrate ignored them because of a concern that no prior declaration was made by Mr Pager that they were sent to the Court in express compliance with the listing notice. Further, the Magistrate did not consider his power (referred to in the Case Management Order and paragraph 25.5 of the Local Court’s Practice Note) to exercise a discretion to admit the documents. In my view, with respect, the conduct of the learned Magistrate created a triumph of form over substance; elevating the tool of pre-trial directions to be a master and not a servant.

38. In circumstances where the Magistrate had access to and indeed read the critical documents, Mr Pager’s omissions to intervene, by formally seeking leave to rely upon documents ‘out of time’ i.e. after the cut-off date ordered at the pre-trial review, whilst regrettable, is not determinative. If the matter turned upon discretionary considerations, it may have some weight, as would Mr Pager’s omission to apply to set aside the judgment under r 36.16 of the UCPR within the 14 day period provided to, but these omissions do not derogate from a party’s right to have potentially admissible evidence they rely upon considered before a decision on the merits is made.

39. But for the undue weight he placed upon adherence to a pre-trial direction, there was nothing to suppose that Mr Kinsela had any valid basis for complaining that he would be taken unawares by the Contract documents and even if he had, less drastic means than dismissal of the plaintiff’s claim could have been taken, such as an adjournment.

40. It is obvious from the significance that the Magistrate placed in his reasons upon the absence of the documents that they were material to his decision-making process. In other words, by refraining from taking them into account, the Magistrate denied the plaintiff the opportunity of obtaining a different outcome.

41. That is sufficient to make out a denial of procedural fairness. Ground 1 is made out. It is unnecessary to consider the other grounds, although at least Ground 3 would also have been made out for the same reasons.

42. I accept that the matter should be remitted to the Local Court and to a Magistrate other than Magistrate Thomas, so that fresh consideration can be given to the dispute.

43. Pursuant to s 41(2) of the Local Court Act, the order made by the Parkes Local Court on 22 December 2022 is set aside and the matter is remitted to the Local Court for determination by some other Magistrate than Magistrate Thomas.

44. I direct that the venue for the Local Court proceeding be altered so that it occurs in the Downing Centre Local Court in Sydney.

45. The defendant is to pay the plaintiff’s costs of the summons.

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Decision last updated: 01 June 2023