Rozenblit v Vainer & Anor - [2017] HCATrans 167

[2017] HCATrans 167

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M52 of 2017

B e t w e e n -
BORIS ROZENBLIT
Applicant
and
MICHAEL VAINER
First Respondent
ALEXANDER VAINER
Second Respondent
Application for special leave to appeal

NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 18 AUGUST 2017, AT 11.27 AM

MR J.G. KORMAN: Your Honour, I appear on behalf of the applicant in this matter. (instructed by the applicant)

MR M.G. McNAMARA: If the Court pleases, I appear on behalf of the respondents. (instructed by CIE Legal)

NETTLE J: Yes, Mr Korman.

MR KORMAN: Your Honours, the applicant’s case can be stated in five propositions. Firstly, that the common law as stated by Justice Dixon in Cox v Journeaux provides that a suit honestly brought should only be stopped:

when to permit it to proceed . . . would clearly inflict unnecessary injustice upon the opposite party ‑

Secondly, it cannot be and has not been demonstrably justified as required by section 7(2) of the Charter that the right to have a proceeding determined after a fair and public hearing should be restricted beyond the principle stated in Cox v Journeaux.

NETTLE J: Do you need the Charter to get to that? Is it not just a matter of a principle of law?

MR KORMAN: Yes, it is, your Honour, we do not need the Charter, and the application could proceed on the principle of legality just as well.

GORDON J: What about Gao v Zhang, do you not use that as well?

MR KORMAN: Yes, but Gao v Zhang was derived from the principle in Cox v Journeaux, but we do rely that Gao v Zhang is currently the ‑ should be the authority which governs rule 63.03(3).

NETTLE J: Sorry, you got up to point 3, I think, of your finding.

MR KORMAN: Yes, so point 3 is the principle of legality and, if necessary, the Charter, but the principle of legality on its own as well, requires that the discretion to order a stay under section 63.03 should be exercised in accordance with the rule in Cox v Journeaux. Four, in this case, the continuation of the action would not and will not clearly inflict unnecessary injustice on the respondents and the conclusion in five is that the Court’s exercise of its discretion to order a stay under rule 63.03 miscarried.

NETTLE J: It miscarried why? Because it was not open to reach the conclusion that the only just way to proceed would be by a stay in the proceeding? Is that the way it is put or some other basis?

MR KORMAN: Well, that is the way it is put but it is put that the correct principle was not followed. In other words ‑ ‑ ‑

GORDON J: So, we have got an error ‑ we have got application, we have…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] HCATrans 167
Decision Date

CaseChat Overview and Summary

This matter concerned an application for special leave to appeal to the High Court of Australia. The applicant sought to challenge a decision of the Victorian Court of Appeal that had affirmed an order staying his legal proceedings pending payment of outstanding costs orders. The dispute centred on the correct legal principles governing the exercise of discretion to grant a stay of proceedings under rule 63.03(3) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), particularly in circumstances where the applicant claimed impecuniosity.

The primary legal issues before the High Court were whether the Court of Appeal erred in its application of the principles established in *Cox v Journeaux* and *Gao v Zhang* to rule 63.03(3), and whether the court below had correctly distinguished between the exercise of a court's inherent jurisdiction to stay proceedings and the exercise of a statutory power to do so under the rules. Specifically, the applicant argued that the principle in *Cox v Journeaux*, which dictates that a suit should only be stopped if its continuation would clearly inflict unnecessary injustice, should apply regardless of whether the stay is sought under the court's inherent power or under rule 63.03(3). The applicant contended that the courts below had incorrectly treated rule 63.03(3) as a mechanism for enforcing costs orders, potentially abrogating a litigant's right to access justice, rather than applying the stringent test for stays that protects this right.

The applicant's central submission was that access to justice is a fundamental right, not a privilege, and therefore a stay order, which effectively denies access to justice, should only be granted in limited circumstances. He argued that the courts below had erred by focusing on the applicant's past conduct and his failure to pay costs orders, rather than on whether the continuation of the proceedings would clearly inflict unnecessary injustice on the respondents. The applicant presented evidence of his impecuniosity, stating he had no means to pay the costs orders. He contended that while costs orders can be punitive, stay orders are more drastic and should not be used merely to express the court's disapproval of a litigant's conduct or as a routine debt collection tool, as cautioned against in *Gao v Zhang*. The respondents, however, argued that the courts below had correctly applied the relevant principles, noting that the Court of Appeal had considered the seriousness of making a stay order and had found that the applicant's conduct warranted such a measure, particularly in light of rule 63.20.1 which allows for interlocutory costs to be taxed forthwith.

The High Court ultimately granted special leave to appeal, indicating that the case raised important questions of law regarding the interplay between the right to access justice, the power to impose stays, and the enforcement of costs orders under court rules. The Court acknowledged the applicant's argument that a distinction drawn between stays under inherent jurisdiction and those under rule 63.03(3) was erroneous and that the *Cox v Journeaux* principles should apply in both instances. The proceedings were adjourned for further hearing.

Orders