Rose v Tunstall (No 2)

[2017] NSWSC 1425

Supreme Court

New South Wales

Medium Neutral Citation:

Rose v Tunstall & Ors (No 2) [2017] NSWSC 1425

Hearing dates:

18 October 2017

Date of orders:

18 October 2017

Decision date:

18 October 2017

Jurisdiction:

Common Law

Before:

Campbell J

Decision:

(1) Under s 64 Civil Procedure Act 2005, grant leave to the plaintiff to file the third amended summons commencing an appeal incorporating proposed grounds 1, 2, 2F, 2G, 2H and 2K redrafted as necessary to conform with these reasons within 14 days, that is, by 1 November 2017;

(2)   List the matter for further directions before the Common Law Registrar at 9am on Monday, 6 November 2017;

(3)   Costs of the parties will be costs in the appeal.

Catchwords:

CIVIL PROCEDURE – Originating process – Amendment – Appeal from the Local Court – Whether grounds of appeal disclose the making of errors of law – Consideration of distinction between questions of fact and questions of law – Amendment allowed in part

Legislation Cited:

Associations Incorporation Act 1984 (NSW)
Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Local Court Act 2007 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280
Rose v Tunstall [2017] NSWSC 797

Category:

Procedural and other rulings

Parties:

Mr Wayne John Rose (Plaintiff)
Mr Robert Tunstall (as representative of the estate of the Late Arthur Tunstall) (First Defendant)
Mr Patrick Edward Hailwood (Second Defendant)
Mr Raymond James Birchell (Third Defendant)
Mr David Raymond Birchell (Fourth Defendant)
Mr Paul Cajentan Toweel (Fifth Defendant)

Representation:

Counsel: M Heraghty (Plaintiff)
P Simpkins (Defendants)

  Solicitors: Lawrence J Myers (Plaintiff)
Carneys Lawyers (Defendants)

File Number(s):

2017/139138

Publication restriction:

Nil

EX TEMPORE Judgment (revised)

1. By summons filed within the time fixed by r 50.3 Uniform Civil Procedure Rules 2005 (NSW), the plaintiff appeals from a decision of Magistrate Atkinson given in the Local Court on 11 April 2017.

2. Under s 39 Local Court Act 2007 (NSW) a party to proceedings before the court sitting in its general division, if dissatisfied with the judgment or order of the court, may appeal to this Court, but only on a question of law.

3. The plaintiff is seeking leave under s 64 Civil Procedure Act 2005 (NSW) to amend his summons to include additional grounds of appeal. Section 64, so far as material, provides:

(1) At any stage in proceedings the court may order:

…

(b) that leave be granted to a party to amend any document in the proceedings.

4. By operation of the doctrine of relation-back, an amendment, if allowed, as a general rule, speaks from the date of the original document and not from the date of the amendment. I mention that matter as relevant because the motion filed on 27 August 2017 seeks, apart from leave to amend, an extension of time to file the amended summons. On the view that I take of section 64, that second order is of no practical effect and is unnecessary. Mr Simpkins of Counsel, who appears for the defendants, who oppose the application, accepts that this is so.

The nature of the dispute

5. The dispute in the Local Court turned upon the provisions of the Associations Incorporation Act 1984 (NSW) and, in particular, sections 37 and 38 concerning the liability of officers of the association for debts incurred by the association when it was insolvent.

6. I have put the matter in general terms. It is unnecessary to descend into the facts of the particular case. It is, however, apposite to record that this is the second time it has been necessary for the matter to come before a judge to ventilate the adequacy of the grounds of appeal.

7. The defendants challenged the competency of the appeal by motion before Davies J: Rose v Tunstall [2017] NSWSC 797. His Honour found that grounds 3-9 in the original summons were incompetent and dismissed them, permitting grounds 1 and 2 to proceed, and directed that the plaintiff file a further amended summons, consistent with his orders, within 14 days.

8. With one exception, the defendants submit that the proposed amended grounds of appeal before me are likewise incompetent inasmuch as the defendants submit that the grounds, as drawn, disclose no error of law; rather, they complain of, in the defendants’ submission, at best, alleged errors of fact.

The question of delay

9. The defendants also submit that, for discretionary reasons, even if the grounds can be seen to involve errors of law, leave should be refused. This argument is based upon a contention that the application is affected by operative delay. In this regard the defendants submit that I should consider the whole history of related proceedings, which date back to events which occurred as long ago as 2005.

10. Mr Heraghty of Counsel, who appears for the plaintiff, submits that whereas delay is always relevant to the exercise of discretion, the real question relates not to the history of the whole dispute between the parties but, rather, to the history of the particular litigation in question. In this regard, he points out that the Local Court decision was only made in April of this year; that the summons appealing from that decision was filed within time; and, although the matter has been before the Court once before, as I have mentioned, it cannot be said, in Mr Heraghty's submission, that ventilating these additional grounds at this stage constitutes unreasonable delay. He points out that he came into the case after Davies J's decision and that a certified transcript of the hearing in the Court below was not available at that time. He submits an official transcript was necessary to enable proper consideration to be given to the grounds of appeal.    

Decision about delay

11. It is not uncommon for appellate courts to permit amendment of grounds of appeal after the transcript of proceedings relied upon becomes available, although I observe that in an appeal restricted to an error of point of law the transcript of evidence is likely to be less important than the reasons for judgment, except in cases where a “no evidence ground” is advanced.

12. On the whole, I think Mr Heraghty has the better side of this argument and, in the context of this appeal, it cannot be said that an application to amend, filed on 22 August 2017, in circumstances where no date for the hearing of the appeal has yet been fixed, is attended by operative, or disqualifying, delay, if I may put it that way. I am not satisfied that there is operative delay that would preclude the Court from considering the application otherwise than strictly on its merits.

Legal principles

13. Before going to the particular grounds of appeal sought to be propounded, I wish to record that I have had the benefit of receiving careful and detailed written submissions from each of Mr Heraghty and Mr Simpkins, which have been supplemented today by succinct and well-directed oral argument. I express my indebtedness to Counsel for their assistance. I hope that by deciding to give an ex tempore judgment today, without taking time for consideration, that I do justice to the careful arguments that they have advanced.

14. I do not propose to refer to all of the authorities that I was taken to in the course of Counsels’ arguments. I record that Davies J set out and analysed the legal principles dealing with point of law appeals at [19]-[21] of his judgment and I gratefully adopt his Honour's analysis.

15. To that analysis I would wish to add reference to the decision of the Court of Appeal in Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 at 155-156. That concerned an appeal from the former Workers’ Compensation Commission. Under its governing legislation, appeals to the Court of Appeal from the Commission were restricted to errors of law and questions concerning the admission and rejection of evidence.

16. At pages 155-156, Glass JA, with whom Samuels JA agreed, said, after reviewing the authorities:

“It is clear from these extracts that numerous pejorative expressions in common usage possess a single meaning and are interchangeable. To say of a finding that it is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way or that no reasonable person could have made it, is to say the same thing in different ways. Upon proof that the finding of a jury is vitiated in this way, it will be set aside because it is wrong in fact. Since the Act does not allow this Court to correct errors of fact, any argument that the finding of a Workers’ Compensation Commission judge is vitiated in the same way discloses no error of law and will not constitute a valid ground of appeal. It is also pointless to submit that the reasoning by which the court arrived at a finding of fact was demonstrably unsound as this would not amount to an error of law (citation omitted).”

His Honour went on to say, however, the following:

“A finding of fact in the Commission may nevertheless reveal an error of law where it appears that the trial judge has misdirected himself ie has defined otherwise than in accordance with the law the question of fact which he has to answer. A possibility of this kind exists with ultimate findings of fact but not with respect to primary findings of fact such as whether the applicant suffered injury on a particular date. Further an ultimate finding of fact, even in the absence of a misdirection, may reveal error of law if the primary facts found are necessarily within or outside a statutory description and a contrary decision has been made (citation omitted).”

17. Naturally his Honour's statements do not fully define the province of errors of law but they do provide a very clear guide as to the distinction between errors of fact, on the one hand, and errors of law involving findings of fact, on the other. I do not mean to suggest that his Honour was speaking of the so-called category of mixed questions of fact and law. Naturally the expression “question of law”, as the authorities referred to by Davies J indicate, has a greater scope and, indeed, it is obvious that questions of the construction of a governing statute are likely to involve questions of law; however, one should have regard to Davies J's reference to a decision in the Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287.

The new grounds of appeal

18. Bearing these principles in mind, I turn to the specific grounds of appeal propounded in the proposed further amended summons. I should say at the outset that ground one, which was permitted by Davies J, has been redrafted and Mr Simpkins takes no objection to it in its redrafted form. Likewise, ground 2 has been redrafted, given that Davies J was prepared to allow that ground to stand. No objection is taken to that ground.

19. Mr Simpkins argues that 2A is a restatement of ground 3 that was rejected by Davies J and there is some force in this argument. The ground relates to her Honour's interpretation of section 37(3) of the Act in question. That matter would qualify ordinarily, in my judgment, as a question of law. However, his Honour took the view that a similar ground, as I have said, the original ground 3, and the related ground, ground 4, should be disallowed as frivolous because they “take the matter nowhere” (see [37]).

20. I am inclined to accept Mr Simpkins' submission in this regard. I accept that her Honour's interpretation, with respect, was arguably wrong; however, I also accept that that error, if it be such, is immaterial, inasmuch as it was common ground between the parties that section 38, conferring the statutory cause of action upon which the plaintiff sued below, was applicable to the case if its conditions could be established to the court's satisfaction.

21. The only purpose of section 37, according to its express terms, is to identify the categories of case to which section 38, and other sections within the same division, will apply, and it was common ground that section 38 did apply because the incorporation of the association had been cancelled by the Director-General following its “dis-affiliation” by the national body.

22. For a time I thought perhaps there may be some purpose to allowing the plaintiff to argue the applicability of section 37(3), but I am persuaded that, first, I should not depart from Davies J's analysis without good reason being shown and, secondly, that, as I have said, even if an error of law is involved, it is not material; the Act, that is to say section 38, was clearly available if the plaintiff proved the necessary matters. Accordingly, I disallow paragraph 2A.

23. Paragraph 2B, properly understood, although its language draws together extraneous considerations, I think raises a misdirection point, clearly a question of law. Her Honour, in express terms, referred to section 38(1)(a)(i) at [30]-[43] of her judgment. However, she did not expressly refer to subsection 38(1)(a)(ii). Mr Simpkins argues that it is necessarily implicit in her Honour's reasoning that she had it in mind. It seems to me that that is a matter that would better be determined upon the hearing of the appeal. I accept that sub-paragraphs (i) and (ii) are alternatives of different content and if it can be shown that her Honour failed to direct herself in accordance with the second alternative then that matter would be an error of law in accordance with the analysis I have set out from Glass JA's judgment in Azzopardi.

24. Mr Simpkins does point out that there are other extraneous matters tied up, or bound up in, paragraph 2B. To that extent, there is force in his argument. In particular there is an averment that her Honour's reasoning was irrational and illogical, a matter to which I will return in a moment.

25. During the course of argument, it seemed to me that the point I have identified as being available to the plaintiff to argue on appeal from paragraph 2B is also raised by paragraph 2G, subject to substituting the conjunctive "and" for the disjunctive "or" in the second line. I would reject 2B but allow 2G, subject to that amendment.

26. Paragraphs 2C, 2D and 2E again invoke a ground that reasoning was irrational and illogical. The proposed grounds set out in detail the respects in which that is said of key aspects of the learned Magistrate's reasoning.

27. Mr Heraghty referred to authority from the field of administrative law to demonstrate that the grounds were good. However, with respect, I accept Mr Simpkins' argument that those expressions in administrative law are understood as aspects of jurisdictional error, rather than strictly error of law. It seems to me that to say something is illogical or irrational in the present context of an appeal restricted to error of law, really engages what Glass JA said about numerous pejorative expressions possessing a single meaning which are interchangeable. I would regard, in this context, illogicality and irrationality to be complaining of an error of fact rather than one of law and in that regard I reject 2C, 2D and 2E.

28. It seems to me that 2F, which relates to section 38(2), for the reasons I have already given, raises an error of law of the same kind as 2G, which I would permit. It seems to me that the question is whether her Honour directed herself in respect of both alternatives and I am satisfied that, in accordance with Azzopardi, that is an error of law that should be allowed to proceed to hearing.

29. 2H, I think, picks up the same point and may be, for that reason, unnecessary duplication and I would direct that consideration be given to 2F and 2H being reduced to a single ground of appeal when this document is redrafted in accordance with my orders.

30. Grounds 2I and 2J complain that the decision below was so unreasonable that no reasonable decision-maker could have made it. Once again, Mr Simpkins argues that this borrows, inappropriately, expressions from the area of administrative law, which are not applicable when one is dealing with an appeal restricted to a point of law. Mr Heraghty joins issue. I think, however, Mr Simpkins has the better of this argument and I call to mind again that Glass JA said a complaint that "no reasonable person could have made the decision appealed from" is saying no more than the decision was factually wrong in this context. It may have other meanings in the field of administrative law. I will reject 2I and 2J.

31. 2K concerns a question of the admission of evidence. Her Honour rejected a document, which has been referred to as the “Phillips Report”, a private inquiry by Mr Jeffrey Phillips SC and others into the affairs of the association. The point about that tender was that whatever may be said about the body of the document, it did purport to set out verbatim evidence given by Mr Tunstall, now deceased, about his belief in relation to the financial viability of the association at certain times. It is true that other evidence along the same lines was admitted by her Honour, but not considered decisive by her. There may be difficult questions about whether s 69 Evidence Act 1995 (NSW), which is invoked, applies to such a document. It is inappropriate for me to determine that question now.

32. I am, however, satisfied, for the reasons advanced by Mr Heraghty, that such a question of the admission or rejection of evidence is generally regarded as a question of law, although minds may differ about that, depending upon the context. It seems to me, however, that that proposition is sufficiently arguable in the circumstances and, for that reason, I should allow it to stand.

33. I record the argument of Mr Simpkins was that the question about the admission or rejection of evidence is an interlocutory order within the meaning of s 40 Local Court Act 1987. However, I am not sure that that is so. Certainly it may be said that a decision about the admission or rejection of evidence is a ruling; however, it is hard to see it as an interlocutory judgment or order properly so-called. It seems to me that it is capable of being a question of law and I would allow paragraph 2K to stand.

34. Given what I have said about the extent of the power under s 64 Civil Procedure Act, it is unnecessary for me to order any extension of time and I reject 2L as being otiose.

35. 2M sought to, in the alternative, maintain the various grounds as being mixed questions of law and fact. However, during the course of argument Mr Heraghty properly, in my view, with respect, withdrew that ground and I reject paragraph 2M.

36. Accordingly, I make the following orders:

1. Under s 64 Civil Procedure Act 2005, grant leave to the plaintiff to file the third amended summons commencing an appeal incorporating proposed grounds 1, 2, 2F, 2G, 2H and 2K redrafted as necessary to conform with these reasons within 14 days, that is, by 1 November 2017;

2. List the matter for further directions before the Common Law Registrar at 9am on Monday, 6 November 2017;

3. Costs of the parties will be costs in the appeal.

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Decision last updated: 23 October 2017