Rozenblit v Vainer & Anor
[2018] HCATrans 13
[2018] HCATrans 013
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Melbourne No M114 of 2017
B e t w e e n -
BORIS ROZENBLIT
Appellant
and
MICHAEL VAINER
First Respondent
ALEXANDER VAINER
Second Respondent
KIEFEL CJ
BELL J
KEANE J
GORDON J
EDELMAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON FRIDAY, 9 FEBRUARY 2018, AT 10.00 AM
Copyright in the High Court of Australia
MR J.G. KORMAN: Your Honours, I appear on behalf of the appellant in this matter. (instructed by the appellant)
MR R.M. GARRATT, QC: If the Court pleases, I appear with my learned friend, MR M.G. McNAMARA, for the respondents. (instructed by CIE Legal)
KIEFEL CJ: Yes, Mr Korman.
MR KORMAN: Your Honours, on 23 December 2013, the appellant brought proceedings against the respondents in the Victorian Supreme Court. Twice the court rejected his applications to amend his pleadings, with costs to be taxed forthwith. The appellant, an aged pensioner living in government‑subsidised housing, could not pay the costs orders. When, on 22 December 2015, the associate judge ordered that the proceedings be stayed until the costs orders were satisfied, the appellant was effectively shut out of court.
The appellant contends before this Court that it was not open to the associate judge, as a matter of law, to exercise her discretion as she did. This contention can be derived independently from principle and from authority. The right to seek justice from the courts is a fundamental common law right. The principle of legality precluded the associate judge, in the circumstances of this case, from exercising a statutory discretion so as to abrogate that right.
Further, the associate judge, the single Supreme Court judge on appeal, and the Court of Appeal on further appeal below, all erred in failing to recognise that the effect of the binding authority of this Court was that the discretion to order an effectively permanent stay cannot be exercised, absent collateral purpose, for conduct amounting to harassment. There are four aspects of this case that I ‑ ‑ ‑
KEANE J: What about gross inefficiency in the conduct of the proceedings? So gross – assuming that it is so gross as to warrant condemnation.
MR KORMAN: Yes. Your Honour, my submission in that respect is that the court has, at its disposal, the tools in which to control its own procedure. So that if, for example, documents are not filed on time, et cetera, the court can order that if the procedures are not followed according to certain conditions, the case will be stayed. That is what his Honour Justice Dixon referred to as the “manner appointed” in Cox v Journeaux. A manner can be appointed for the hearing of matters and if that manner is not complied with, a matter may well be stayed. And, I should also say, it is not enough for there to have been gross inefficiency, it must be clear to the court that this gross inefficiency is going to continue.
KEANE J: So, you accept that an order can be made as an encouragement to lift the game – improve the efficiency.
MR KORMAN: Yes, and I would go further than that. Sorry, a stay order, is your Honour saying?
KEANE J: Yes.
MR KORMAN: No. A stay order can be made if the procedures of the court are not complied with in a gross manner. So, what I am saying is, the court can lay down the necessary procedures and a certain time will come – if a litigant is non‑compliant – that the court cannot go on. That is what I mean by manner appointed. The court can appoint a manner in which a case is to be heard. But, what cannot happen is that, absent non‑compliance with the procedures of the court, a matter would be stayed.
What happened in this case, and perhaps I should bring your Honour’s question to the facts of this case, is there was no non‑compliance and that is a very important fact. The appellant did not miss a deadline, failed to comply with a directive of the court. True, it is, the appellant applied three times to amend his pleadings and two of those applications were unsuccessful. That happened, but there was no failure to comply with any order of the court. So, I would submit that before a stay can be ordered due to gross inefficiency in the conduct of a case, the court must have, prior to then, set out very clearly what it expects in terms of ‑ ‑ ‑
EDELMAN J: What you are talking about really is some sort of self‑executing order but how does that fit within the language of rule 63.03?
MR KORMAN: The language of 63.03 is broad. It merely grants a discretion, or rather not merely, but it grants a discretion to the court to stay proceedings and that is it. So, the considerations which inform that discretion must take account of, among other things, the right of access to the courts, so that no discretion in reality is unfettered. In reality, every discretion must be exercised judicially and the judicial exercise of the power to stay proceedings is fettered by, among other things, the principle of legality. It cannot be assumed that the intention of 63.03(3) was to abrogate the right of every litigant to have access to the court’s procedures except in circumstances where that would impose – sorry, I withdraw that ‑ except in circumstances where the court’s process is being used for an alien purpose.
KEANE J: Why confine it like that?
MR KORMAN: Because, otherwise – and this is, really, the bedrock of the appellant’s case – a fundamental common law right will be abrogated. The discretion must be confined so that the courts do not shut out litigants in circumstances where they have genuinely brought their case and where the manner appointed by the court has been adhered to. So, my submission is really this – that two things are not at large. One is the ability to use the courts for any purpose they choose. The other is for litigants to run the cases as they choose and not as the court has laid down. Those are not at large.
But, in circumstances where a litigant has conducted his or her case in accordance with the rulings of the court – and the orders of the court – and in circumstances where the case is genuinely brought, there is no abuse of process, there is a genuine purpose actuating the litigation which is the quelling of a controversy. In those cases, barring those two exceptions, it is a fundamental liberty of litigants to have access to the courts.
EDELMAN J: Is your point, effectively, then that the principle of legality requires that 63.03(3), effectively, be read as a rule that provides that where the court makes an interlocutory order for costs, the court may then or thereafter order – and I interpolate – that if some or all of the court’s orders are subsequently violated, then if the party fails to pay costs, and so on, that that interpolated part arises in circumstances where a party who is unable to make an immediate payment of costs would, thereafter, be shut out from litigation?
MR KORMAN: I am sorry, your Honour, if you could just say again what is the proposition of what is to be interpolated?
EDELMAN J: The qualification on 63.03(3) is one that a stay order would not be made unless some or all of the court’s orders are subsequently violated, so that there has to effectively be a warning for the parties that the stay is coming unless there is violation of a future order.
MR KORMAN: Well, I would definitely agree with the proposition that there must be a warning in terms of some breach of procedure that a stay is coming. However, I am not sure that that in itself captures – that goes far enough. In other words, it is not enough for the court to say, “Unless a document is handed in by a certain deadline we are going to stay the proceedings”. The breach of procedure has to be gross, as your Honour said, a gross inefficiency that has been caused.
EDELMAN J: What is the qualification that you want to put on sub‑rule (3)?
GORDON J: Justice Ormiston dealt with it in Gao in relation to this very rule, did he not? I mean, he imposed two conditions on 63.03. One was that there was a strong suspicion that the party refusing to pay the orders was being recalcitrant and, secondly, that if he was forced to pay it, he or she would pay it, which seemed to suggest that there was an intervening step.
MR KORMAN: Justice Gao did ‑ ‑ ‑
GORDON J: Justice Ormiston, not Gao.
MR KORMAN: Sorry, Justice Ormiston did add those two conditions but, in my submission, he also applied Cox v Journeaux. That is, he imported the requirements of Cox v Journeaux into the exercise of a stay.
KIEFEL CJ: Well, what did you say then, that Justice Ormiston, acknowledging the fundamental principle stated in Cox v Journeaux, read the sub‑rule as if it said “order that if the party able to and liable to pay”. That is, that he assumed the position that where a party had the ability to pay and refuse to pay, that it was warranted in those circumstances.
MR KORMAN: That I would agree with your Honour, that that was imported. Justice Ormiston also used the words of conduct which falls for condemnation.
KIEFEL CJ: Yes.
MR KORMAN: And what I wanted to clarify was that, in using those words, he was not referring to condemnation at large. He was importing the requirements of Cox v Journeaux, that is, that where the court’s procedures are being used for a collateral purpose or for harassment and there is conduct amounting to condemnation, in those circumstances, a stay can be ordered. Why that was important is because the cases show that there can be an abuse of process without moral delinquency.
GORDON J: But did not he then also qualify it by an additional observation that, assuming that those two propositions, the one put to you by the Chief Justice and the one you have just put to us is right, that there was still an obligation or requirement for the court in the exercise of the discretion to understand that if the person was impecunious, taking all of that into account, as is the case here, then the court had to realise that making the order would effectively bring the litigation to the end.
MR KORMAN: Very much so, your Honour, and that is perhaps - the impecuniosity is what brings the rule in Cox v Journeaux into play, that is, if a stay is ordered for costs to be paid and a litigant is able to pay the costs, it is not effectively a permanent stay, it is a stay which exists until an action which is in the power of a litigant to take is carried out and, obviously cases are stayed for other purposes which are not necessarily permanent.
The matter that your Honour has raised is the cardinal issue here that where a – and I do not think there is controversy about that, that where a costs order cannot be paid because the litigant is impecunious that is effectively a permanent stay, so that all the learning in relation to the conditions in which a permanent stay can be applied becomes relevant.
KEANE J: Mr Korman, can I ask you to look at paragraph 67 in the reasons of the Court of Appeal at page 246 of the appeal book?
MR KORMAN: Yes, your Honour.
KEANE J: There the Court summarises the principles according to which the power is to be exercised. Do you disagree with those principles, any of them?
MR KORMAN: What I would submit is that principle (d) which says:
a stay should not be ordered unless the conduct of the party in default warrants the condemnation inherent in such an order –
perhaps the starting point of my answer to you is to make the point that that is a reference or derived from the relevant passage in Gao and that passage, I think it is paragraph 17 - it is in the Court book here I will see if I can find it. Here we are, it is on page 243 in paragraph 30 it has been cited and his Honour Justice of Appeal Ormiston said:
Finally, at least for the present, if an order of this kind is to be made, there must be seen to have been some conduct on the part of the party in default which falls for condemnation to the extent of making so draconian an order.
Now, that is the passage I was referring to earlier where I said that given that his Honour followed Cox v Journeaux the notion of condemnation to the extent of matters so draconian an order is condemnation to the extent that the conditions in Cox v Journeaux are satisfied.
What I would submit is that paragraph (d) – his Honour Justice Nettle had at the special leave application made the point that paragraph (a) is a statement of the principle and the other paragraphs are epexegetical of that principle. What I would say is that paragraph (d) actually is more than a mere clarification of that principle. It actually even in its form here provides a condition, that is, even if the principle in (a) is satisfied a stay should not be ordered unless the requisite condemnation is present.
GORDON J: So where do you say you find the principles set out in paragraph 67 dealing with the effective end of the litigation, that is, what you described as the most cardinal principle which underpins this area. Where do you find that in 67?
BELL J: Mr Korman, in paragraph 29 of your written submissions, you deal with this, observing that none of the principles stated in paragraph 67 required that a proceeding honestly brought not be stayed or dismissed unless its continuance would cause injustice to the opposite party.
MR KORMAN: Yes.
BELL J: You draw that from Justice Ormiston’s analysis in Gao in the following paragraph. That, I must say, as I understood it, was the nub of your challenge to the Court of Appeal’s analysis, not that there was any error in the principles as stated in paragraph 67 but simply they did not address a critical aspect raised by the facts of this matter.
MR KORMAN: Yes, your Honour. I would say that paragraph (d) really does need some further elucidation to make it clear in the future that the condemnation inherent in such an order is condemnation arising, or associated with the fact that the court’s processes had been used for an alien purpose or for harassment of the other party. So, in its correct understanding – reverting back to Gao – (d) ought to have imported that requirement but did not. So I would not take issue with anything here but I would say a further clarification is required in paragraph (d).
KIEFEL CJ: Could I just clarify a background matter, Mr Korman? The orders made staying the proceedings were only able to be made because earlier orders had been made under rule 63.20(1) that the costs be taxed before the proceeding was concluded.
MR KORMAN: Yes, your Honour.
KIEFEL CJ: They were made by the same associate justice, I think.
MR KORMAN: Yes, your Honour.
KIEFEL CJ: There were no reasons given for the exercise of that power?
MR KORMAN: There appears – and in the court book – in an order – I think it is on page 90 of the court book – one moment, your Honour – yes, on page 94 of the court book is the order that was made.
KIEFEL CJ: It says that the court gave oral reasons in paragraph 6 of the order.
MR KORMAN: Yes. Sorry, your Honour ‑ ‑ ‑
KIEFEL CJ: I think it comes down to this, but I just wanted to check with you.
MR KORMAN: The Court of Appeal ‑ ‑ ‑
KIEFEL CJ: In the judgment of the associate judge at paragraph 101, there is discussion there of the basis upon which those orders were made. I think that is the only written reference that there is for the basis for those orders?
MR KORMAN: Your Honour ‑ ‑ ‑
GORDON J: I thought there was a set of reasons in 2014, were there not – [2014] VSC 510.
MR KORMAN: There were reasons there.
KIEFEL CJ: But they are not in the appeal book.
MR KORMAN: No, they are not in the appeal book. I believe that there were “Other Matters” and I will have a look – it could be the December orders, the orders in which the stay was ordered. There was a statement in “Other Matters” somewhere of the reasons. If the Court would just bear with me for a moment – and I believe the Court of Appeal also mentions the reasons somewhere. Just one moment, your Honour, and I will see if I can find it.
GORDON J: If you go to page 142 of the appeal book, there is the December 2015 order. Is that the one you want?
MR KORMAN: Yes. No, it is not here. Your Honour, I will take that on notice, and in my reply I will be able to find the further material.
KIEFEL CJ: It is just that the discussion that is in paragraph 101 of the judgment that we are looking at says:
I considered that a departure from the usual rule was justified . . . It was largely the manner in which the applications for leave to amend had been conducted, the delay thereby occasioned and the fact that at the time of the second order the plaintiff foreshadowed the third application for leave to amend –
They are the reasons.
MR KORMAN: Yes, I think that is the statement. Yes, your Honour. It was those three things which her Honour had raised: the manner, the oral application rather than an application on summons ‑ ‑ ‑
KIEFEL CJ: And they were said to warrant the special order that costs be taxed.
MR KORMAN: That is right. The point I made in my submissions was that ‑ ‑ ‑
KIEFEL CJ: They were not appealed, I take it.
MR KORMAN: No, the costs orders were not appealed. The point that I made in my written submissions in relation to those reasons was this: they relate, particularly at the time the stay was ordered, to historical conduct; that is, there was disapproval of matters that had been done in the past. But all of those matters had, by that date, become no longer relevant. Among other things, the third version of the pleadings had been approved and there was conditional leave to proceed on that amended version.
The requirement that the proceedings cannot continue without it being clear that an unnecessary injustice would inflicted on the opposite party was not satisfied. There was no reason to say that the continuation of the case would involve those past events that had happened. My submission was that the costs jurisdiction is very much one which is concerned with the punitive aspect of the court’s powers and with deterrence et cetera. But, when it comes to the abrogation of human rights or common law rights, a different set of considerations come into play. The notion that a right can be abrogated as an expression of disapproval or punishment, generally speaking, should not be accepted.
KEANE J: Why is it punishment to make an order that protects the defendant in respect of the expenses that it has been put to and that are effectively wasted because of the manner in which the case has been conducted? You do not recognise that as something that attracts some notion of justice? They will never be able to get paid because of your client’s impecuniosity. It is not a matter of staying the case because your client is impecunious; it is about protecting the defendant from expense, and possibly further expense, that will never be recoverable by it.
MR KORMAN: Your Honour, there are two responses I would make to that. Firstly, with respect, it is a similar issue to the question of security for costs; that is, an impecunious litigant is entitled to bring a case, even though it is clear that any costs orders made against that litigant will not be satisfied.
KEANE J: Absolutely, but this is not about that. This is about one side being put to costs, put to expenses, that are entirely wasted by reason of the inefficiency of the other side.
GORDON J: One answer might be – I do not know if it is an answer, but if one looks at the scale of the available penalties a court can impose, one is a costs order that is to be taxed immediately – that is, I am talking about interlocutory costs orders now ‑ which gives rise to a judgment which can be the subject of bankruptcy proceedings, and that attracts penalty interest under the Penalty Interest Rate Act from the time that the order is made. That in itself is a penalty. That is an imposition of a penalty because the court does not regard the conduct as being appropriate. The real question is: why is it, in a sense, on that scale of available measures one gets to a stay where that penalty has already been imposed?
MR KORMAN: Yes, your Honour, I would adopt that. I would say as well that, in Justice Dixon’s formulation of the rule – I will address this in my submissions – the words “necessary injustice” were used. Those words played a very important role; that is, it is not any injustice that will be imposed if the case continues that justifies a stay.
Certain injustices are a necessary incident of universal access to justice for all. A necessary injustice is an injustice that flows from the fact that a litigant has honestly approached the courts and, despite the various measures available to the courts to control its own process and to direct the manner in which a case is to be heard, an injustice as a result will be imposed on the other side. That, which I will develop later, is a necessary injustice arising from the system of justice we have available. What has happened here is in reality no different from what would have happened if the case had run to completion and a costs order had been made against my client.
KEANE J: No, it would be different because these costs have been generated by reason of the manner in which the case has been run and they are wasted. They are not the costs that are necessarily incurred in the conduct of the litigation in accordance with the Rules and with fairness to the other side.
MR KORMAN: I would submit that the word “necessary”, as used by Justice Dixon, was not used in that sense. His Honour did not mean that only costs which must necessarily be incurred in the running of a case, that where a cost was unnecessarily incurred in the running of a case a stay might be imposed. What his Honour was referring to was the whole range of injustices that on an individual level might be unnecessary – injustices that arise from incompetence from various failings of litigants. Those injustices, although unnecessary on an individual level, on a system‑wide level are going to happen.
Those injustices will arise through the workings of the court system inevitably and his Honour, in my submission, was making the point that those sort of injustices do not allow a litigant to be shut out of court. However, the injustice that would arise from harassment in using the court for some reason for which it was not intended does justify it because there is no right to approach the courts on that basis.
I should also make the point before leaving this issue that true it is that her Honour made her orders because of the matters that she had alluded to, including wasted costs and delay, but it must be borne in mind that not only was there no delay arising from a failure to comply with an order, the opposite, the delays that arose, arose in the context of orders that were complied with.
A particular point I want to make is this, in her Honour’s reasons in relation to the second failed application, her Honour said this ‑ I will just read this out and I appreciate the case is not before your Honours but the citation is Rozenblit v Vainer (No 2) [2015] VSC 234, paragraph 113. In disposing of the case, her Honour was discussing whether Aon – considerations in Aon were relevant. Her Honour said:
As the application fails on pleading grounds, it is not necessary in relation to the current proposed amended pleading to consider these discretionary factors. They will, however, be relevant if the plaintiff seeks in the orders to be made following these reasons the opportunity to further amend. In the event the plaintiff seeks that opportunity in the orders to be made, and if it is opposed, I will hear the parties further. They may at that time rely on the evidence and submissions already put, in addition to any further submissions.
So, having said that, those orders to which her Honour was referring are on page 94 and 95 of the court book. In order number 7 – so these relate to the third ultimately successful application to amend ‑ in order number 7 on page 95 her Honour said:
The plaintiff make his foreshadowed further application for leave to amend his statement of claim in the form provided to the Court on 5 June 2015 on summons filed and served by 4:00 pm on 10 July 2015.
I should interpolate here that that order was made in the context that the appellant had sought to actually make the amendments by oral application at that hearing. That was rejected and instead the order was made. So, what we have is this, that all the way through we have orders that were made, we have the court at the end of this second failed application inviting the parties to make submissions – or the respondents to make submissions as to why a third application ought not be permitted but the court permitted that third application to be made and made procedural orders.
So, in those circumstances, I wanted to make that point although it does not go to the principle of what your Honour was asking me but it does go to the facts of this case, that what we have is the third application that was made in accordance, in compliance with the orders her Honour made and was successful and, nevertheless, at the same time that leave was granted to amend the proceeding was stayed due to wasted time et cetera.
This ties back to what I was saying earlier about the court’s ability to control its own processes. If there is gross inefficiency – if, for some reason or other – and in the circumstances of this case it was held that two applications to amend were sufficient and a third would be causative of great inefficiency to the court, well, her Honour had the power to refuse to allow a third application to be made. But the opposite was done and perhaps in the circumstances of this case rather than in questions of legal principle, but in circumstances of this case where we have a litigant who has complied with what the court had ordered and succeeded in that third application and, nevertheless shut out of court, among other reasons, because of the historic delays that had happened in the past.
Will I proceed, your Honours? Okay. First of all, as I said, there are four aspects of this case that I wish to discuss. The first – and, briefly, I will identify the materials which establish the threshold circumstances stated in the grant of appeal that they exist and are, or should be, uncontroversial. The second part of the submission addresses issues related to the application of the principle of legality to this case. That, I say, above all, is the principle that must guide the exercise of any discretions – or any statutory discretion to stay proceedings.
I will argue that what is generally referred to as a right of access to the courts is more accurately described, for the purposes of this case, as the right to seek justice by accessing the courts. The important point is that no right is abrogated by preventing access to the courts for a collateral purpose or in order to harass the opposing party. The principle of legality is not enlivened where a statute of discretion to stay proceedings in response to an impecunious litigant’s failure to pay costs orders is exercised in circumstances where denial of access to the courts does not amount to denial of access to justice.
The third part of the submissions concerns the propositions that the three courts below were bound by this Court’s decision in Cox v Journeaux. It will be argued that the Court of Appeal erred in failing to disturb the single judge decision that it was reviewing on appeal – and, again, it must be borne in mind that there were two appeals prior to this appeal – and that decision expressly distinguished Cox v Journeaux and confined the cases where the exercise of the power to stay proceedings arises in the Court’s inherent jurisdiction.
Finally, I will address a question – and this question has been covered so I may summarise it – but the question which I had sought to address is one which arises if the grant of appeal is made out – that is, if the application of the five principles which, according to the Court of Appeal, govern the exercise of discretion of rule 63.03, generated an outcome that was bad at law, what was the defect in those principles? Your Honour has asked me about that, so I may be brief there.
Your Honours, moving to the first part, the appellant’s sole ground of appeal, just to refresh the Court’s memory, is at page 262. In that ground of appeal it is asserted that:
it is not alleged or found that the plaintiff has conducted a proceeding in a manner amounting to harassment or for a collateral purpose –
This assertion may be substantiated by referring to the associate judge’s comments at paragraph 94 of her reasons for decision. That is at page 131. Her Honour stated there:
I accept the submission put on behalf of the plaintiff that his attempts to amend his statement of claim have been genuine, and go to the heart of the case he wishes to bring. There is no evidence that his intention has been to vex or harass the defendants by those applications, or by the manner of their conduct.
Her Honour’s statement was acknowledged by the Court of Appeal, at paragraph 34 of that decision on page 236. Importantly, the Court of Appeal made a finding at paragraph 51 on page 241. The Court of Appeal found in the second sentence there:
In the present case, the court had not found (nor had the respondents submitted) that the proceeding amounted to an abuse of jurisdiction.
GORDON J: Mr Korman, do your propositions come down to five on these matters? One is you have got an impecunious client; second, the stay would effectively end the litigation; third, you have got a genuinely properly pleaded claim that went to the heart of the case he wanted to make; fourth, it is not alleged, which is the matter you just referred to, or found that his case amounted to abuse of jurisdiction or harassment; and, finally, the respondent, looking at it from the respondent’s position, is not so seriously financially prejudiced that he would not be able to defend the claim.
MR KORMAN: Yes, that would be the fundamental proposition. Yes, your Honour. In relation to the question of harassment or collateral purpose, learned counsel for the respondents accepted at the special leave application hearing that the appellant was not acting otherwise than out of a well‑intentioned sense of achieving justice according to law.
KIEFEL CJ: That does not seem to be in issue. It is not in issue.
MR KORMAN: Okay. I will move on then.
KIEFEL CJ: Yes.
MR KORMAN: The second threshold condition – again, I can move on if the Court would wish to. I just want to draw the Court’s attention to two affidavits at pages 44 and 51 of the court book.
KIEFEL CJ: Do these deal with the appellant’s financial position?
MR KORMAN: Correct, yes, your Honour.
KIEFEL CJ: They are to the effect that his only income is an aged pension; he has no assets. Is that right?
MR KORMAN: Yes. The second affidavit elaborated on that produced documentary evidence. The most important statement in the first affidavit on page 45 is that he said on oath, in paragraph 9:
I have not paid the costs order that was made against me because I have no way of doing so.
KIEFEL CJ: He was not cross‑examined on that?
MR KORMAN: That is correct. He was not cross‑examined, neither was any evidence led by the respondents to refute that. Really, the proposition that the appellant was speaking the truth in paragraph 9 was never challenged at any time.
KIEFEL CJ: What do you say, then, to the associate judge’s observations at paragraph 109 of the judgment? That seems to raise a question mark about whether he has got some financial resources because he has failed to properly account for how he has funded necessary disbursements to date.
MR KORMAN: Yes.
KIEFEL CJ: Was that taken up with the parties in court?
MR KORMAN: That was taken up between her Honour and the counsel for the parties. Her Honour had asked me how the proceeding was being funded. At the time, my client was not in court. I did not have instructions as to what response to give and I think her Honour mentions in her reasons that I had stated that it is common in cases such as this for matters to be run on a “no win, no fee” basis.
But, I would say in general to these questions that were raised by her Honour is this. Generally speaking, it is possible to raise questions about any evidence that is given. It will be rare that evidence will be so thorough and so complete as to cover every possible question that will be raised on cross‑examination. But, those questions need to be raised by opposing counsel cross‑examining the witness.
In a case where a witness has said a statement, I did not pay because I could not do so – and it is not to be assumed he lied – barring any other evidence – so, if he is speaking the truth when he said, I could not pay, if there are further questions that arise, then how did you do this ‑ ‑ ‑
KIEFEL CJ: I think we understand the point you are making. Is there any other material, then, in the first aspect of your argument?
MR KORMAN: The only other material was references to the transcript which I do not need to take your Honours to – where the various matters have been conceded – the transcript of the special leave application where the matters your Honour referred to were conceded by the counsel for the ‑ ‑ ‑
KIEFEL CJ: And, the second matter, then, in your outline of oral submissions, you have, largely, touched upon, I think – the legal principle arising from Cox v Journeaux.
MR KORMAN: I do want to make some important points there. Sorry, I should just take one step back in relation to one minor aspect of the timing. A question was raised at the special leave application ‑ was the fact that impecuniosity before the court at the time the stay orders were made. It is clear from the dates on the affidavits and from the chronology that they were filed in support of the application for leave to amend – the June application for leave to amend. And, in December, those orders were made. So, that just will arise from the affidavits themselves.
The important point that I wish to make in relation to the principle is this. I want to elaborate on the notion that the – on the proposition – that the common law right of access to the courts should be stated more accurately in this context. I will also make the point – which is not made in the written submissions – and, perhaps, the opposite impression is created ‑ ‑ ‑
KIEFEL CJ: You do not have to foreshadow what you are going to say, you can just say it.
MR KORMAN: So, coming now to Part 2 of the submissions, if the threshold conditions stated in the ground of appeal are made out and it is accepted that the right to access justice via the courts is a fundamental common law right, it follows that the principle of legality must prevent a statutory discretion formulated in general terms which is the terms of 63.03 from being exercised so as to abrogate that right.
Now, as I mentioned, it is important to ensure that the common law right brought into play here is correctly formulated. Often, the right is simply described as a right of access to the courts. In most contexts, that description suffices but here, where imposition of a stay is by definition a denial of access to the courts and the power to stay proceedings recognises that parties do not have an untrammelled right to commence or conduct proceedings in court for any purpose or in any manner they choose, it is important to be more precise. In Aon Risk Services v Australian National University at paragraph 96, the right was described as:
the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of their dispute.
Shorthand expressions might be the right to seek justice by accessing the courts or simply a right of access to justice. To the extent the authorities referred to, in footnote 55 at page 11 of the appellant’s submissions, speak of access to the courts without more, this can be explained in terms of the issues for determination in each case.
In Witham referred to there, the matter for determination was removal of financial hardship exemptions on court fees. In Raymond v Honey and in Leech, the two other English cases, what was at issue was interference in communications between prisoners and their solicitors. In Plaintiff S157 and in Momcilovic, the Australian cases, what was at issue there was the effectiveness of a privative clause that purported to deny access to the courts. In all of those cases, the words “access to courts” alone are used and they suffice in terms of the matter raised there.
But the relevant passage in Cox v Journeaux, which can be found at page 240 of the court book, does not use the language of “access to courts”. Rather his Honour refers to and this – I think the question was raised earlier, what is the principle that the appellant submits ought to guide the exercise of the discretion. This is the principle in the second sentence and this is on page 240, third line up from the bottom:
The principle, in general paramount, that a claim honestly made by a suitor for judicial relief must be investigated and decided in the manner appointed, must be observed.
So that is the principle, not a ‑ ‑ ‑
GORDON J: But that principle is qualified by what we have talked about before and that is what follows two sentences later:
It is only when to permit it –
being the “it” you just identified:
to proceed would amount to an abuse of jurisdiction –
i.e., the claim is not very good or it is so bad as not to – or it should not be in the court room:
or would clearly inflict unnecessary injustice upon the opposite party that a suit should be stopped.
MR KORMAN: Yes, your Honour, those two statements taken together encapsulate the ‑ ‑ ‑
KEANE J: Mr Korman, this passage from Cox v Journeaux is talking about whether or not to allow a claim to proceed by reference to considerations as to its inherent merit or lack thereof – evident lack of merit. We are not talking about that; we are talking about a rule that assumes that proceedings are otherwise viable and provides for a stay in certain events. We are a long way from this general principle, which is about when a claim will be stopped because it can be seen to be not viable.
MR KORMAN: That was the specific facts of the case in which that principle was stated, but the same principle has been stated in a range of other cases, including two I will take the Court to shortly, relating specifically to non‑payment of costs.
KEANE J: Are they better for you than Gao?
MR KORMAN: The fact that Gao applied Cox v Journeaux really ‑ ‑ ‑
GORDON J: To the rule.
MR KORMAN: ‑ ‑ ‑ to the rule specifically – really is directly apposite to the question before the Court today. However, as a matter of principle, why was it the case that it ought to have been applied? Why is Gao correct? The answer to that is that true it is that the rule provides that where costs are unpaid a proceeding can be stayed. Justice of Appeal Ormiston made the point that the power will rarely be used, or should rarely be used.
The point is that, no matter what the circumstances in which a proceeding may be stayed ‑ and the legislature in 62.03 is addressing only certain circumstances – nevertheless the principle remains that a proceeding cannot be stayed unless the general principle is observed. That is, the principle of legality is such that it prevents 63.03 from being used to abrogate the right of access to the courts. That is really the nub of it. True it is that the costs order was not paid and true it is that there is concern for the courts that injustice is inflicted on the other side – I withdraw that.
True it is that costs orders should, where possible, be paid, but in the circumstance of this particular case or of any case where the rule is used to abrogate the right of access to the courts, it simply cannot be so used. If that means that it is confined to a particular class of cases, so be it. Gao was clearly one of those cases. In that case it was used where the court was used for the purpose of harassment. That is where the principle was applied.
In my submission, yes, that does cut down on a large range of cases where costs orders are not satisfied. They are not amenable to this rule. Nevertheless, the fact that the ambit of the rule is far narrower than the potential ambit is not in itself enough to justify using the rule to abrogate a common law right.
I had made the point earlier, in relation to the words “unnecessary injustice”, that the notion of unnecessary injustice should be understood as an injustice arising from the use of the courts for a purpose other than seeking justice; that is, where litigation is engaged in for a collateral purpose or conducted in a manner amounting to harassment.
Now, Justice Dixon’s vantage point in his formulation of the ruling in Cox v Journeaux is the policy‑maker’s vantage point; that is, the justice system as a whole. The question is not, as I have said, whether in an individual case, injustices are unnecessary or avoidable and, as I mentioned earlier, it is inevitable for various reasons that injustices will arise as a by‑product of a policy that affords universal access to justice. For present purposes, it can be observed that in the real world, litigants and their legal advisers miss deadlines, makes mistakes, fail to take sufficient care, advance misconceived arguments and so on.
In doing these things, they may bring about a state of affairs where a suit cannot proceed without some injustice being inflicted on the opposite party. That injustice may be described as avoidable from the perspective of an individual case because more competence, care, diligence could have been but was not applied and it may be penalised by means of an adverse costs order including an order that interlocutory costs be taxed forthwith. But moving from the individual to the overall society‑wide perspective, it can be appreciated that any human system for dispensing justice must be attended from time to time by such conduct.
If access to justice is to be universal and not restricted to the competent, the careful and the diligent, lack of application of qualities of competence, care and diligence will and must occur from time to time. But I insert in parenthesis here, what I had said earlier, which is that one would expect cases where one party will clearly suffer substantial injustice, if a case is to proceed, would be rare, a genuinely brought case, because courts will generally manage proceedings such that the “manner appointed” will keep any net injustice suffered by a party within acceptable limits.
So, we arrive at the conclusion that an unnecessary injustice is one that does not arise as a by‑product of the common law’s insistence on universal access to justice. In circumstances where an anticipated injustice is attributed to the conduct of a party, in order to determine whether that party can and should be shut out of court, the question that must be answered is whether that party was acting genuinely in seeking justice; or, alternatively, whether his conduct was actuated by an alien purpose such as harassment.
In the former case, to shut the doors of the court will be to deprive the party of his or her fundamental rights but in the latter, a stay involves no abrogation of rights because there is no right to access a court in order to harass an opponent or otherwise misuse the jurisdiction.
KEANE J: Do defendants have a right to be sued in accordance with the Rules? I mean, this access to justice theory of yours, does it operate for everybody?
MR KORMAN: Your Honour, if we are using the language of rights, access to justice, all parties clearly have a right of access to justice and they have a right to have their matter determined according to law and law includes according to the procedures of the court and they do not have a right for the court to determine the matter in any way they may think appropriate.
That much is accepted, your Honour, and if there were circumstances where a case was being brought and run but not in the manner appointed, no such right would arise; that is the purport of what Justice Dixon said. So, that if the rules prescribe certain matters to be done, and if there is a persistent failure to comply with the Rules, ultimately, a party might be stayed because that party is attempting to bring his proceeding not accordance with the manner appointed by the courts.
GORDON J: Mr Korman, does your proposition under this heading come down really to three points: one is that Gao is good law; two, that Gao correctly picks up the principles identified by Justice Dixon in Cox v Journeaux – especially at paragraph 12; and, third, that the Court of Appeal incorrectly applied them?
MR KORMAN: Yes, and that is the third aspect – the incorrect application of authority – of these oral proceedings that I will be addressing in a few minutes.
KIEFEL CJ: Have you finished with your discussion of the principle?
MR KORMAN: I just wanted to make two other points. One is that the idea that a stay can only be imposed when to do so would cause no injustice to the affected party – which is really the point of what I have being saying ‑ ‑ ‑
GORDON J: That is what Gao says, does it not – having set out in paragraph 12 Cox v Journeaux and then in 13, 15 and 17 picking up those propositions.
MR KORMAN: Yes, your Honour. Gao says that. Justice Dixon himself says that in the first sentence of the passage. The matter was also – guided the courts in Oceanic Sun Line and questions of the correct forum, although the common law has changed since then. At that time the case of St Pierre v South American Stores [1936] 1 KB 382 – at 398, Lord Justice Scott there refers to the need for two conditions before a forum non conveniens can be found. One condition is no injustice to the plaintiff and the other is misuse/abuse of the court’s process by the defendant ‑ ‑ ‑
KIEFEL CJ: What does that have to do with this case?
MR KORMAN: Because the question there was imposition of stays. So the notion in relation to the line of cases forum non conveniens is that a proceeding already brought cannot be stayed in that context unless there is both no injustice, on the one hand, and an injustice to the other party. The other brief point I wanted to mention in this part is that although in my submissions I have discussed questions of proportionality and questions of justified limits to rights, on further consideration – in terms of the understanding advanced today, they are not relevant.
KIEFEL CJ: You say that they do not arise?
MR KORMAN: Yes, that is right.
KIEFEL CJ: You do not want to go into that?
MR KORMAN: Not only that, the Court does not need to go into that. It is a fraught matter as to whether the courts ought to determine proportionality issues. But they simply do not arise here because there is no abrogation of a right if the doors of the Court are shut for ulterior ‑ ‑ ‑
KIEFEL CJ: That brings you to your third?
MR KORMAN: It does, your Honour. The third is that authority dictates that the principle is made out. It is not entirely clear from the reasons for decision whether the Court of Appeal was of the view that it applied Cox v Journeaux or not. The first ground of – the appellant’s first ground of appeal before that court – which is at court book 190 – addressed that particular issue – that Cox v Journeaux was binding authority.
The appellant’s relevant submission before the Court of Appeal was that the associate justice’s discretion miscarried because her Honour was required but failed to apply the rule in Cox v Journeaux and, consequently, acted on a wrong principle. The court acknowledged this at paragraphs 48 to 51 of the Court of Appeal judgment which is on pages 240 to 241 – acknowledged this submission. The Court of Appeal was reviewing the decision of the learned Supreme Court judge who had heard the matter on appeal from the associate judge. Her Honour, the judge hearing the matter ‑ ‑ ‑
KIEFEL CJ: But really, you do not need to go further, in fact, you should not go further than the reasons of the Court of Appeal. If your proposition is that the Court of Appeal did not, in fact, apply Cox v Journeaux, just take us to the passages from which that inference is to be drawn from what is said or unsaid.
MR KORMAN: Firstly, what is unsaid, is that the Court failed to disturb her Honour’s holding that Cox v Journeaux was distinguished. I think it is in that context that I wanted to go back to what was the decision before the Court of Appeal. It will be seen – it is in the court book. Her Honour on appeal from the associate judge had expressly found that Cox v Journeaux should be confined to the inherent jurisdiction of the court to stay proceedings and did not apply ‑ ‑ ‑
KIEFEL CJ: You say that is wrong.
MR KORMAN: That is right, your Honour.
KIEFEL CJ: What did the Court of Appeal say or did it not deal with it at all?
MR KORMAN: That is the point, your Honour, the court failed to disturb – did not deal with whether her Honour was right or wrong.
KIEFEL CJ: How do we infer then what the Court of Appeal thought about it?
BELL J: Mr Korman, the Court of Appeal purported to apply Justice Ormiston’s statements of the manner in which the approach to the rule was to be – the manner in which the rule was to be approached. Justice Ormiston, as I understand your argument, was informed by the statement of principle in Cox v Journeaux, in formulating a principle approach to the circumstances in which a stay under the rule would be granted. Now, the Court of Appeal, as I understand it, purported to accept the correctness of Justice Ormiston’s analysis, is that right?
MR KORMAN: Well, the second proposition that your Honour made in relation to Justice of Appeal Ormiston applying Cox v Journeaux is correct in terms of the fact that that is the appellant’s submission, however, the single judge also found that Gao did not apply Cox v Journeaux. Now, in my respectful submission, that must plainly be wrong but that is what was found.
KIEFEL CJ: But the question is what did the Court of Appeal say about it and what did it do, did it apply Gao or not on your argument?
MR KORMAN: The Court of Appeal purported to apply Gao ‑ ‑ ‑
KIEFEL CJ: Yes, did it though? You say it did or it did not?
MR KORMAN: That goes back to the step of whether Gao applied Cox v Journeaux.
GORDON J: Assume for the moment that Gao did apply Cox v Journeaux and assume for the moment, as I put to you as I thought I understand your argument, that Gao is good law and it reflects that principle, where is the error in the Court of Appeal which is where we came back to, I think, at the very beginning of your submissions?
MR KORMAN: The error of the Court of Appeal in applying Gao is that it did not apply the principle for which Gao had accepted which is that a proceeding ought not be stayed unless it would inflict necessary injustice.
GORDON J: Does that mean we go back to your original submissions when we started when, I think, as a result of questioning from a number of us that paragraph 67 of their summary of the principles omits that essential basal principle?
MR KORMAN: Yes, your Honour, it goes to Gao but it does not make it clear that Gao actually went to Cox v Journeaux.
KIEFEL CJ: I think we follow your argument there. Does that bring us to your fourth point?
MR KORMAN: There is just one point which I wish to make, and that is this: if the Court accepts that Gao applied Cox v Journeaux and, therefore, if Gao were to be applied, Cox v Journeaux therefore applies as well, there is no need to discuss whether the single judge was right or wrong in confining ‑ ‑ ‑
KIEFEL CJ: Quite so. Your fourth point is really what you have just been discussing with Justice Gordon, and it has already been discussed earlier in argument and in discussion with the Bench that 67(d) does not pick up what Cox v Journeaux said. That is your essential fourth point?
MR KORMAN: Yes, your Honour. Perhaps I will conclude at this point. In concluding, I would just like to address the Court as follows. This case can be looked at on several levels. At each level one is inevitably drawn to the same conclusion: it was not open to the associate judge to stay the proceeding. Intuitively it cannot be right for a litigant who has acted genuinely, who has sought to make amendments that went to the heart of the case he sought to bring, who had no intention to vex or harass the opposite parties to be permanently shut out of court because it took him three tries to get his pleadings right.
That intuition is captured in the common law right of access to the courts to seek justice. As a matter of legal principle, the Court of Appeal ought to have found that it was not open to the associate justice to construe the statutory power to stay the proceedings so as to be an abrogation of the right.
Thirdly, the common law right of access to the courts to seek justice was in terms succinctly stated by Justice Dixon in Cox v Journeaux. That binding authority, a decision of this Court, was not applied in the three decisions below. Finally, the effect of the decision currently before the court is that the single judge’s finding that Cox v Journeaux was confined to its inherent jurisdiction ‑ ‑ ‑
KIEFEL CJ: I think we have covered that. I think you have already addressed that.
MR KORMAN: Yes, your Honour. If the Court pleases.
KIEFEL CJ: Thank you, Mr Korman. Yes, Mr Garratt.
MR GARRATT: Before I begin, can I say this about Cox v Journeaux. Cox v Journeaux was a decision at a time when there was no rule permitting a defendant to have a claim dismissed by interlocutory application for want of merit. That rule only came into the Rules in the common law system in Australia at least in the 1980s and thereabouts. So if the defendant were to attack the plaintiff’s claim, it had to be on the basis of abuse of process. That is why the decision is framed in those terms. His Honour says it is an abuse because it has no merit – this claim is unviable. It is a…..recasting of what had been done before and it will cause injustice and so it was brought within the abuse of process rubric.
The first point I wish to address, coming back to the special leave question, is that to construe rule 63 as the special leave question would renders the power granted by rule 63 otiose. Let me explain. The Supreme Court has always had inherent power to stay or dismiss a proceeding unconditionally, which has been conducted in a manner amounting to harassment or for any impermissible collateral purpose. It has always had that inherent power.
The Supreme Court has now, for a very long time, also had the express power to stay or dismiss a proceeding unconditionally which has been so conducted. In 1986, a further express power was introduced – in rule 63.03 – to allow the Court to stay a proceeding where a party failed to pay an interlocutory costs order so as to obviate the need for exceptional circumstances – before you could do so – identified by the Full Court in Exell v Exell to use ‑ ‑ ‑
KIEFEL CJ: You are submitting that Gao is wrong, then?
MR GARRATT: No, I am not submitting that Gao is wrong. What I am submitting, your Honour, is that to construe rule 63 in the terms in which the special leave question does, makes the rule otiose. It was never necessary to bring in rule 63 to allow a stay for non‑payment of costs if the proceeding was characterised by improper purpose or conduct amounting to harassment. That was always within the inherent power and then the express power of the Court granted years before.
We say, therefore, the special leave question is inherently to be rejected, as it were, because it requires the existence of conditions which make the rule unnecessary. The Court always had that power to stay a proceeding where there was conduct amounting to harassment or the existence of an improper purpose. The rule is, in our submission, not to be glossed – glossed by saying, absent conduct amounting to harassment, or absent improper collateral purpose, you cannot exercise the power to order a stay for non‑payment of costs.
GORDON J: That sounds contrary to ‑ ‑ ‑
KIEFEL CJ: But, what do you say ‑ ‑ ‑
GORDON J: Sorry.
KIEFEL CJ: Do you say, then, that the rule operates and may be applied without more when costs are unpaid? What more is required?
MR GARRATT: What more is required is what was identified in Gao and refined in the Court of Appeal below, namely, to find that the only way to do justice between the parties – at the point where the litigation has reached – is by the imposition of a stay until the wasted costs which ‑ ‑ ‑
KIEFEL CJ: What does “justice between the parties” mean in this context? Does it just mean you are balancing something? What does it actually mean? What is its content?
MR GARRATT: “Justice between the parties” requires attention to be given to all the circumstances that have occurred. I will come to those in more detail. What the vice of the special leave question is, is that it elevates two of those circumstances as sine qua non and relegates any other circumstance.
EDELMAN J: Mr Garratt, do you accept that there has been no finding that there is any likelihood of any future injustice to the defendant without the stay?
MR GARRATT: Not at all. Not at all.
EDELMAN J: What is either the finding or the future injustice that you say would arise – or would have arisen – without the stay being granted?
MR GARRATT: Your Honour ‑ ‑ ‑
EDELMAN J: Not the past injustices of unnecessary costs that have been incurred.
MR GARRATT: No. I understand that, your Honour. Your Honour, can I cite from our learned friend’s submissions to the learned associate justice on the third amendment application in respect of the eighth iteration of the pleading? “It is obvious”, he said, “that expert accounting evidence will play a crucial role at trial. The relevant expert report or reports to be produced for the plaintiff will permit the provision of further particulars to paragraph 67(b) of what was then the current draft of the pleading”. Justice Lansdowne was alive to that. This case required – just even for the completion of interlocutory steps – significant expert evidence to be gathered ‑ ‑ ‑
KIEFEL CJ: So, the answer is costs of expert evidence?
EDELMAN J: How is that an injustice?
MR GARRATT: Your Honour, what we have got here – and these are the relevant circumstances – here you have got, in effect, in the material, a want of candour. How this litigation ‑ ‑ ‑
GORDON J: That is a very large allegation. Was that put below?
MR GARRATT: It did not need to be, your Honour. Well, sorry, in this sense, yes. What was put forward in terms of the material explaining how the litigation got to this point was incredibly thin, it pointed – the first ‑ ‑ ‑
KIEFEL CJ: Why was not the appellant cross‑examined?
MR GARRATT: Did not need to. It was obvious ‑ and there was debate between the associate justice and my learned friend as to how was this litigation been resourced to date, how is it getting resourced given your position that you need expert evidence even just to complete interlocutory steps. So, to answer Justice Edelman’s question, what was in prospect, very real prospect, was litigation if there was not a stay, languishing from directions hearing to directions hearing to directions hearing, while expert evidence is not being brought forward, pleading is not being completed, interlocutory steps cannot be completed, a trial cannot be fixed. In other words, it was very much before the court that this was a case which was going nowhere.
GORDON J: There was an application for expedition which had been put to one side.
MR GARRATT: Well, there was, after ‑ ‑ ‑
GORDON J: Your client could not say that it was financially prejudiced to the point where it could not defend the proceeding. I mean, why was it not in your client’s best interest just to push the proceeding on and have it resolved?
BELL J: But all of – as I think was raised earlier, the force of the overarching principle is to equip the court to force the parties to conduct litigation in a way that will enable the real issues to be decided. That does seem very far removed from a stay in circumstances that shut a party out by reason of impecuniosity.
MR GARRATT: What your Honour says, with respect, has force but there is another event which has happened in recent procedural history. Aon recognised at the highest level in this country, for the first time, that costs orders are not a panacea, that stress and strain of litigation is a reality. These are matters which any right‑thinking person looking at the legal process would have said were obvious but which it took the courts until 2009 in this country, a bit earlier in the UK, to – perhaps a bit earlier in this country, the Federal Court had said a few things – to realise were part of the picture that needed to be taken into account.
Notions that there is necessary injustice which a party must suffer, words my learned friend used, as part of the system, are no longer
acceptable. Your Honour, unless your Honours have any questions, those are our submissions.
KIEFEL CJ: Thank you, Mr Garratt. Do you have anything in reply?
MR KORMAN: Yes, your Honour. Firstly, your Honours, I would address the construction aspect of this matter. This is really a question, the specific question, before the courts of the construction of rule 63.03 and my learned friend has said that there is no basis for adding a gloss or for adding unwritten conditions to that rule. However, and perhaps this is stating the obvious, the principle of legality is a rule of construction and a fundamental rule of construction and what that principle requires as stated, for example in Coco, is that without ‑ just one moment and I will read it out.
KIEFEL CJ: But just in terms of rule 63.03 itself it is discretionary. The word is “may”. The question is what guides the discretion.
MR KORMAN: Yes, and in that sense, calling it a ‑ ‑ ‑
KIEFEL CJ: The question here is whether or not the fundamental principle in Cox v Journeaux continues to inform the exercise of the discretion or whether something lesser.
MR KORMAN: If it is to be viewed as a construction case it is – is this discretion to be understood as the words themselves state to be just a broad at large discretion or are there limits to the exercises of discretion. On the other hand, if we look at it as House v The King question there is what is the right principle that her Honour ought to have followed, is it that that discretion was effectively at large or is it that that discretion was limited and, in my submission, it is clear that the exercise of that discretion must be limited to places where fundamental common law rights are not being abrogated.
There is nothing in that rule that can be regarded as a clear manifestation of a parliamentary intention to abrogate fundamental rights. The rule has operation as her Honour Justice Bell mentioned in terms of situations where a litigant can but will not pay interlocutory costs and in that sense it is not a gloss or an additional unwritten statement that was added to the discretion, it is a fundamental principle of construction that must guide the way that rule 63.03 is to be construed.
Whether or not - although there are certain statements to the effect in some of the cases without entering into the question, whether or not the intention of Parliament was to allow the stays to be ordered other than in special circumstances, whether or not rule 63.20 which required that as a general rule 63.20 interlocutory costs be taxed at the end of proceedings, whatever the various hints and indications that are pointed to in terms of parliamentary intention, absent a clear statement of legislative intent, it cannot be – the discretion cannot be construed so as to permit the rights stated in Cox v Journeaux to be abrogated.
That is the first point I wish to make. Secondly, the matters that my learned friend alluded to in terms of the future prosecution of the case, the need to fund disbursements such as for experts, whether arising from the case on its initial pleadings, whether arising on the amended case, all go squarely to the question of security for costs. That is the purpose for which security is granted – in order to give some measure of comfort to the opposing party that in the event the plaintiff is unsuccessful there will be a recompense.
Our system of justice in Australia recognises that an impecunious resident litigant in person as a general rule will not be required to pay security for costs. But the law of security of costs is not before this Court. It was not raised and the submission I just would wish to make is that whatever concerns are raised as to the defendants being out of pocket were the case to proceed are really questions that go to the security for costs jurisdiction.
One minor point but perhaps a correction I should make is my learned friend said that the affidavits that go to the appellant’s impecuniosity nowhere state if a stay is ordered this matter will not be able to proceed. Those affidavits were filed in support of an application to amend, which, if one looks at the ‑ ‑ ‑
BELL J: Mr Korman, I think the unchallenged evidence is that there is affidavit evidence that your client lacks the capacity to pay the interlocutory costs orders. The effect of the associate justice’s order is that the proceedings are stayed until they are paid. One might think one follows the other.
MR KORMAN: Yes, your Honour. My learned friend referred to the right of access to the courts not being a right at large and rather a right to have a matter determined in accordance with procedure. He referred to paragraph 65 of Batistatos which says that:
The “right” of the plaintiff with a common law claim to institute an action is not at large. It is subject to the operation of the whole of the applicable procedural and substantive law administered by the court –
Now, obviously, there is no dispute with that proposition, but it must be borne in mind in this case that there is not one court procedure that was not
complied with by the appellant. This is not a case of an individual instance ‑ ‑ ‑
KIEFEL CJ: I do not think this is a reply submission. I do not think that point has been taken up by ‑ ‑ ‑
MR KORMAN: I was just replying to the point my learned friend had made in which he said the right is not a right of access at large but a right subject to the court’s procedures. That may be so but that is not relevant to this case where there was no breach of the court’s procedures.
KEANE J: Well, there was really, was there not? Batistatos says it is about the rules and here the rules require that when you plead a claim, you put in your statement of claim all the claims you wish to litigate. Your client did not and it emerges from the record that he did not make the claim that he sought to make by amendment on the basis of legal advice that it would be too hard to make it out. So there was a failure to comply with one of the important rules about how you make a claim.
MR KORMAN: And that failure to comply came before the court in the context of the application to amend that claim and among the range of actions the court could have taken would be to refuse leave to amend because the litigant ought to have gotten it right the first time. What happened when that matter came before the court was that leave was granted and leave was granted three times, or permission to amend, to apply to amend was granted three times.
So when I say there was no procedural failure, perhaps the point is that matters came before the associate justice for determination, they were determined, rulings and orders were made and they were followed. That is the important aspect of this case which, in my submission, needs to be kept in mind. If the Court pleases.
KIEFEL CJ: Thank you. Yes, Mr Garratt.
MR GARRATT: There is one matter my learned friend just mentioned which I need to correct. It is simply this, that the two affidavits of means were filed as well in opposition and relied upon in opposition to the stay application, as per the written submissions which he filed in support of his case on that stay application.
KIEFEL CJ: The Court reserves its decision in this matter and adjourns to 10.15 am on Tuesday, 13 February.
AT 12.21 PM THE MATTER WAS ADJOURNED
2
0