Russell v Polites Investments Pty Ltd (No 2)
[2015] SADC 128
•16 September 2015
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
RUSSELL v POLITES INVESTMENTS PTY LTD (NO 2)
[2015] SADC 128
Judgment of His Honour Judge Stretton
16 September 2015
PROCEDURE - COSTS
Appeal against a Master’s refusal of an application that inter alia sought a stay of execution of a costs order pending an appeal to the Supreme Court.
HELD:
1. In all the circumstances a stay of execution pending the outcome of the Supreme Court appeal is appropriate.
2. Appeal allowed.
District Court Act 1991 43(2)(a), referred to.
Russell v Polites Princes Group of Companies & Ors [2009] SADC 73; Russell v Polites Investments P/L [2011] SADC 30, considered.
RUSSELL v POLITES INVESTMENTS PTY LTD (NO 2)
[2015] SADC 128
This is an appeal against the decision of a Master of this court to dismiss certain applications made by the plaintiff in this matter.
The nature of these proceedings
An appeal lies as of right from the judgement of a Master of this Court to a judge of this Court.[1]
[1] Section 43(2)(a) District Court Act 1991. DCR 17.
Such an appeal is by way of rehearing, and the Court may determine the appeal as the justice of the case requires notwithstanding the failure of any party to the appeal to raise relevant grounds of appeal, or to state grounds of appeal appropriately in the notice of appeal.[2]
[2] DCR 286.
On the hearing of such an appeal the court has the power to draw inferences from evidence before the original hearing and has wide powers of disposition, including the power to remit for rehearing or reconsideration and the power to amend or set aside the judgement subject to the appeal and give any judgement that the justice of the case requires.[3]
[3] DCR 286(3).
The parties
The action that this application and appeal are but a small part of, is a claim for damages over a commercial lease entered into between the parties for a Hindley Street property owned by the defendant.
The appellant Douglas Charles Russell is an unrepresented plaintiff who has now been in litigation and conflict with the defendant for many years. He has no legal training. It is plain from the history of the matter, the applications he made to the Master and the voluminous materials he tendered before the Master that he harbours a strong sense of grievance at the way the defendant has treated him, both over the lease itself and by the defendant’s carriage of the subsequent litigation between them, which also led to his bankruptcy at the hands of the defendant.
The defendant is a commercial landlord who has vigorously contested the plaintiff’s claims to date.
Preliminary observations
In all the circumstances, the unrepresented lay plaintiff’s pleadings and materials are discursive, inclusive of much historical material, emotive and at first glance can appear impenetrable.
It has therefore been necessary, in accordance with the spirit of the important principles articulated above governing appeals of this nature, to carefully analyse and distil the plaintiff’s real complaint about the Master’s 1 June 2015 decision to dismiss the plaintiff’s applications.
A short history of proceedings up to 23 March 2011
To properly understand the plaintiff’s applications before the Master, one must look a little further back in this matter.
There is a long history between the parties, apparent in previous decisions of this court and the Federal Court. Much of the history is summarised in an earlier judgement of Judge Herriman in this matter, reported at [2011] SADC 30. I adopt without repeating the history set out therein.
In the briefest of terms, the plaintiff took over a lease from a 3rd party of the defendant’s Hindley Street premises. The defendant evicted him from them on 29 August 2000, on the basis of asserted breaches of the lease.
On 19 February 2007 the plaintiff commenced action against the defendant over that. He claimed he had been wrongfully evicted, and he sought damages for that and for other matters he said arose out of the defendant’s actions concerning and surrounding the lease. The plaintiff represented himself. The plaintiff’s Statement of Claim was vigorously procedurally tested by the defendant, and on 9 July 2009 Master Bampton ordered that the plaintiff provide $15,000 security for costs and that in default his proceedings be stayed. The money was not paid into court and after further application by the plaintiff that he be allowed to proceed without providing security, and by the defendant for dismissal for want of prosecution, on 31 May 2010 Master Blumberg refused to vary the order for security for costs and dismissed the plaintiff’s claim for want of prosecution, awarding costs to the defendant, with an allocatur subsequently issued.
The plaintiff also claimed he had been injured by slipping over on three occasions at the property while still lessee and in 2003 in a separate action sued the defendant over his injuries. On 8 July 2009 a judge of this court dismissed that claim on the basis that the defendant had not breached its duty of care to the plaintiff; see Russell v Polites Princes Group of Companies & Ors [2009] SADC 73.
On 29 October 2010 the defendant commenced proceedings in the Federal Court to bankrupt the plaintiff on the basis of the $41,997.55 costs order it had secured against him in this court and $1500 costs from a summary matter, and indeed the plaintiff was bankrupted on 20 December 2010.
It is common ground that that the plaintiff was then bankrupt for approximately 5 years, and at the time this appeal was argued was soon to be discharged from it.
The plaintiff had earlier appealed against the orders of Masters Bampton and Blumberg and on 23 March 2011 Judge Herriman dismissed those appeals with costs in Russell v Polites Investments P/L [2011] SADC 30. The plaintiff did nothing to quantify or pursue that costs order at the time.
Application for costs on 4 March 2015
Four years later, however, on 4 March 2015 the defendant filed a short form claim for costs in the sum of $13,898.71. That claim primarily comprised an account for $11,000 from senior counsel for a brief attendance to argue the Masters appeal before Judge Herriman. The practice of this court is to allocate 90 minutes for such matters. The transcript of proceedings before Judge Herriman on 15 December 2010 indicates the hearing took 42 minutes.
The plaintiff’s solicitor Kym Ryder filed an affidavit on 14 April 2015 deposing that on 11 March 2015 he had caused a letter enclosing sealed copies of the short form claim for costs to be posted to what he described as the Plaintiff’s last known place of address being Unit 6, 21 Frederick Street Adelaide. Mr Ryder then says “That letter was no returned to me as “sender”” (sic). It is not clear what that means. It is unclear whether that means the letter was not ‘returned to sender’, or whether it was returned to him as sender.[4]
[4] Subsequent to the initial delivery of these reasons, the defendant's solicitior filed materials explaining that this was a typographical error, clarifying that the letter was in fact not returned to him as sender.
Mr Ryder’s affidavit discloses that the defendant also sought costs in the Federal Court pursuant to 2012 orders made there, and also informed the plaintiff of that in his 11 March 2015 letter. He attaches an affidavit that the plaintiff appeared to have filed in the Federal Court on 25 March 2015 attaching a letter complaining about the defendant’s whole carriage of matters against him. Although one of the many addressees listed in that letter is “The Presiding Judge in the matter of DCCIV 256 of 2007”, there is no acknowledgement of service in that letter, or any direct indication that it is in response to the letter sent by the defendant’s solicitor on 11 March 2015 and the claims for costs that letter purported to serve.
Whilst postal service is sufficient for such documents[5], nothing was filed in this court by the plaintiff specifically indicating he was aware of the defendant’s claim for an assessment of costs in this court.
[5] DCR 60, 66 and 68.
The defendant’s solicitor filed an application accompanied by the affidavit, asserting that the plaintiff had admitted the defendant’s short form claim of costs by virtue of Rule 271(4). That rule provides that where a person is served with a claim for costs in an approved form, if they do not file a notice responding they will be taken to have admitted the claim in full.
The plaintiff had not filed anything, so on the following day 15 April 2015 the Registrar issued an allocatur, in other words a certification that the costs of and incidental to the appeal before Judge Herriman had been fixed at $13,898.71 and were now payable by the plaintiff to the defendant.
It is common ground that the defendant is now seeking to bankrupt the plaintiff again, this time based on this $13,898.71 costs order, together with other costs it was awarded in the Federal Court some years ago also.
Discussion re the proceedings
Whilst I can understand the ostensible rationale of the various earlier decisions made by the Masters, I am left with a sense of unease at the overall passage of these matters.
The plaintiff was evicted while his lease was still on foot and has always claimed that was unjustified and in breach of his lease. He commenced proceedings in this court over that action, and was prevented from ever having his claims substantively assessed by this court, by the Masters imposing on him the requirement to lodge $15,000 security for costs, when it seems it was common ground that he was an impecunious unrepresented litigant.
Then, when he was unable to lodge those monies his claim was dismissed, and an order for $41,997.55 costs was made against him.
The defendant then took that order and bankrupted the plaintiff, thereby inhibiting his ability to continue to litigate to assert his rights.
The plaintiff claims that the trustee in bankruptcy that was appointed was a friend and indeed neighbour of the defendant, and that the plaintiff was misled as to certain matters surrounding the statement of affairs he was required to provide, which enabled the trustee to extend his bankruptcy for several years, in effect until now.
The defendant has done nothing to pursue the order for costs it obtained in 2011 before Judge Herriman for four years, nor indeed to pursue other costs obtained before the Federal Court in 2012 over the plaintiff’s bankruptcy appeal, yet now when the plaintiff is emerging from his extended bankruptcy has it lodged a short form claim for costs, secured an allocatur, and is proposing to bankrupt him a second time over a cost claim it has done nothing to enforce for four years.
It mailed its claim for costs to a last known mailing address, and when there was no response, obtained in this court an allocatur for the full amount claimed. Whilst I have not heard argument on it and therefore express no final view, it is far from clear that anything like such an amount would have been allowed on taxation, nor that the matter was fit for senior counsel.
So there has not only been no substantive consideration of the plaintiff’s claim before its dismissal, but there has also been no substantive assessment of the costs claimed pursuant to the appeal against that dismissal, which costs are now being used to bankrupt the defendant again.
It is in that context that the plaintiff made the applications currently in question to the Master.
The plaintiff’s interlocutory applications to the Master
The “two applications in FDNs 43 and 46” as described by the Master included seeking the following orders:
ORDER ONE: May grant a stay on any further defendant’s plaintiff costs for the security bond and appeal costs to allow 2008 appeals on perjury accusations of the actions 256 of 2007 and action 925 of 2003. (sic)
ORDER NINE: That the action 256 of 2007 be stayed to allow a review of Judge Herriman Orders that may be struck out over an abuse of process, to be heard by the Supreme Court for a review and a ruling or any considerations it may say, with all other parties matters with the Supreme Court actions and or an ICAC investigation for a review of the Action and other to determine a remedy. (sic)
The plaintiff filed a substantial amount of evidence in support of his applications, namely detailed affidavits dated 14 April 2015, 27 April 2015 and 6 May 2015.
Properly understood, having regard to the plaintiff’s other filed documents, the applications sought (amongst other things[6]) a stay of execution of the order of costs of and incidental to the appeal before Judge Herriman of $13,898.71 that the defendants had only recently pursued and secured, pending the resolution of a foreshadowed appeal to the Supreme Court against Judge Herriman’s decision and Judge Millsteed’s decision, both decisions that the plaintiff says his bankruptcy had prevented him appealing for nearly five years.
[6] The defendant also sought orders seeking to investigate alleged improper management and communication by the defendant of the medical evidence in matter 925 of 2003 (the damages action heard by Judge Millsteed), and orders that the $41,997.55 costs order the defendant had originally secured against him in this matter when he had been unable to meet the security for costs order and hence been prevented from pursuing his claim had been secured by way of abusing the process of this court. It is not appropriate to attempt to re-litigate matters arising in matter 925 of 2003 (the damages action heard by Judge Millsteed) in the current proceedings for breach of lease which currently stand dismissed for want of prosecution, nor investigate whether the earlier costs order was secured by abusing the process of this court.
As such, much of the plaintiff’s filed materials were directed to establishing the wrongness of the original decisions that the plaintiff was foreshadowing he would appeal to the Supreme Court as soon as he was capable of doing so upon the imminent expiry of his bankruptcy. Properly understood however, that was context for the plaintiff’s complaint to the Master that the defendant was now urgently pursuing a late claim of costs against him to secure a further bankruptcy and hence prevent by collateral means his proper pursuit of his appeals to the Supreme Court, and that accordingly he requested a stay of the new costs order against him.[7] In para 22 of his 27 April 2015 filed “Letter of Objection”, the plaintiff concluded:
22.I firmly object to the conduct of the above matters and do seek a stay on all or any claim of costs of the Polites as for the above miscarriages and abuse and do seek opportunity for the reviews of Appeals of District Court Actions 256 (of) 07 and Action 925 (of) 03, to (be) allowed and to be filed after the bankruptcy end in June 2015 and in the interest of natural justice and fairness to be heard by the South Australia Supreme Court. (sic)
[7] Variously, including at paras 13, 14, 16 and 22 of the plaintiff’s “Letter of Objection” filed on 27 April 2015.
The plaintiff then set out several costs orders, including the one currently being pursued by the defendant in this matter.
The plaintiff says that in light of his bankruptcy he can only now effectively pursue the Supreme Court appeals, and that the defendant is again seeking to use costs orders from years ago to bankrupt him again, and again prevent his case from being substantively pursued, and that the defendant has abused the process of this court in its earlier carriage of the two cases against him, and is doing so again now.
As earlier observed, the plaintiff is a layperson with no legal training, but with a strong sense of grievance and injustice at what has occurred to him at the hands of the defendant both prior to and in the course of litigation, and so his filed materials that were before the Master were discursive and included much history, argument and background material. As such, and in fairness to the Master they are somewhat impenetrable at first perusal, particularly if the full context is not understood, and for example where the matter is being heard in a busy Master’s list.
However it is important that courts exercise patience and care when dealing with impecunious litigants in person who are attempting to exercise their important right, as any other citizen, of access to courts to secure, protect or defend their legal interests.
It is clear however that the plaintiff was foreshadowing appeals to the Supreme Court, setting out a detailed basis for why he was pursuing the appeals and why he had been unable to do so to date, and that he was seeking a stay of the costs order that the defendant had only recently pursued against him so that he could pursue his legitimate appeals. He also asserted that the defendants were pursuing the costs for the improper collateral purpose of preventing his appeals from proceeding.
The Master’s decision
The hearing of the plaintiff’s application and the consequent decision about which the plaintiff complains occurred on 1 June 2015. The Master considered and determined the matter at that time. It was in the course of a brief directions hearing which was neither recorded nor transcribed. Hence there is no transcript of what occurred nor is it now possible for the Court to obtain one.
The only record appears to be a typed then signed “Record of Outcome” noting the conclusions arrived at by the Master at the time, which I set out verbatim as follows:
1. The plaintiff has filed two applications in FDNs 43 and 46.
2.The plaintiff has made statements today to the effect that he instituted, or thought he had instituted, an appeal from the decision of Master Bampton ordering security for costs.
3. The Court record reveals that no such appeal had been instituted.
4.Accordingly, I dealt with an application to dismiss the Action for want of prosecution, which action was granted in 2010.
5.That decision was the subject of an appeal to Judge Herriman which was unsuccessful.
6.The consequence of the outcome of this litigation ultimately involved processes in the Federal Court.
7.The applications in FDNs 43 and 46 appear to be collateral challenges to decisions made in this Action as well as in another Action determined by Judge Millsteed (Russell v Polites Princes Group [2009] SADC 73) as well as decisions made in the Federal Court.
8.A detailed review of the file and the applications indicate that there is no merit in those applications as a vehicle for the orders sought by the plaintiff.
9.The orders of the Court are that the applications be dismissed with the defendant to have the costs of and incidental to those applications.
10. Registry to notify plaintiff of these orders.
11.The plaintiff is informed today that the time for appeal from this decision is 21 days.
In the absence of any transcript of what occurred, there is no easy way to assess the adequacy of the hearing conducted by the Master on 1 June 2015.
The “Record of Outcome” document does however record that the entire hearing before the Master, including argument, dismissal of the plaintiff’s applications and the delivery of the above paragraphs took from 10.15am to 10.30am, in other words a mere 15 minutes,.
Given that this time includes decision and the making of orders, the hearing of any argument itself, if it occurred at all, must accordingly have been even briefer.
There is no indication of whether in such a brief time the Master attempted to clarify from the unrepresented lay plaintiff what the real gravamen of his complaint was, nor what arguments were put against him by the defendants and whether the plaintiff had an opportunity to answer them or fully put his case, in short whether the plaintiff was properly and fully heard such that the requirements of natural justice and procedural fairness were accorded to him.
The only basis for the Master’s substantive decision appears in the phrase “there is no merit in those applications as a vehicle for the orders sought by the plaintiff”. In other words, there is no indication whether the Master properly understood the plaintiff’s applications, whether the Master considered the right legal or factual questions, or whether the Master applied the correct principles.
It is unlikely that all that could have adequately occurred in such a brief hearing.
There is no reference to the plaintiff’s application for a stay of execution of the costs order pending a foreshadowed appeal to the Supreme Court.
The notice of appeal
By notice of appeal dated 17 June 2015 the appellant:
Appeals to a Judge of the District Court of South Australia against all of the judgements of Master Blumberg made on 1st June 2015 and the orders delivered on 31st of May 2010 and furthermore the order of costs made on the 16th of September 2010 to all be struck out. (sic)
The particulars of the judgement complained of are given as:
In the Action 256 of 2007. Date of last directions hearing made on the first of June 2015. Master Blumberg did refused the Plaintiff’s request of Orders Against the orders of costs made on the 16th of September 2010 and the orders and judgement delivered on the 31st of May 2010. (sic)
The ground of appeal is that:
The Master Blumberg did wrongly conduct a review of Master Bampton orders and did wrongly remove the order of Master Bampton Stay to wrongly award costs of his said review application to the respondent Polites Investments. Against the rules of the District court of South Australia, of the master Jurisdiction as was wrongly described by judge Herriman as being appeal one in Judge Herriman’s judgement DCCIV 256-07 (2011) SADC 30. (sic)
There is an application for extension of time in which to appeal, in the following terms:
Due to the bankruptcy caused by the Cost Order of Master Blumberg the Appellant has been prevented from appealing the Judge Herriman’s judgement of Master Bampton orders and appeal one The late discovery of the District Court Rule Breaches of the Master Blumberg and Judge Herriman that did secrete the breaches of the District Court of South Australia. (sic)
In support of the appeal the plaintiff filed a further affidavit and attached submissions, recounting the history of the matters and the basis of his issues with the earlier judgments of Judges Millsteed and Herriman and setting out in some detail his complaints about those decisions. He drew attention to the material before the Master.
In his affidavit the plaintiff maintained a request for a stay of the costs that had been ordered by Judge Herriman, pending an appeal to the Supreme Court,[8] also submitting that the current costs order was being pursued late and with undue haste primarily to bankrupt him again and again prevent him from pursuing his legitimate appeals against the judgements of Judges Millsteed and Herriman.[9]
[8] Paragraph 2 of handwritten affidavit of the plaintiff executed and filed on 17 August 2015.
[9] Paragraphs 8-9, 18-21 of typed “reasons and Grounds of Appeal Submission” dated and filed on 17 August 2015.
Analysis
It is clear from paragraph 7 of the Master’s reasons that he did not appreciate that the plaintiff was seeking the stay of a costs order in the instant matter that might otherwise bankrupt him pending a foreshadowed Supreme Court Appeal in the very matter concerned, nor the grounds upon which the application for a stay of execution of the costs orders were based. That appeal has now been lodged.
The issue is of real and immediate importance to the plaintiff, as if the recent allocator is not quashed or stayed, the defendant will likely use that order in support of its current application to bankrupt the plaintiff again, to again inhibit the defendant from pursuing his substantive appeals to the Supreme Court.
So far as it can be ascertained, the Master’s decision indicates that he did not properly understand and hence address the applications made by the plaintiff, did not apparently adequately consider the material filed by the plaintiff, and accordingly did not address the correct question. There was no adequate record of proceedings kept nor sufficient reasons given such that, most particularly in light of the very brief duration of the proceedings, that I could be satisfied on the balance of probabilities that the unrepresented plaintiff was fully heard at the hearing of the matter. In all these ways the decision miscarried.
The plaintiff filed extensive affidavit material asserting that the defendants have abused the process of this court in the way they have conducted the litigation against him, and that he wishes to pursue his filed appeal in the Supreme Court and if successful have a substantive trial of this breach of lease case against the defendants.
I have some considerable disquiet over the history of these proceedings and the way in which the plaintiff has been prevented having his case substantively adjudicated or considered on appeal, firstly by the security for costs order, then by the dismissal of his claim for want of prosecution over his objection, and then by the bankruptcy proceedings, and now by the further costs and foreshadowed further bankruptcy proceedings.
I have been notified that on 21 August 2015 the plaintiff has indeed now lodged a Notice of Appeal in the Supreme Court against Judge Herriman’s 2011 judgement which dismissed appeals against the Masters’ decisions that effectively prevented the plaintiff from ever having his substantive claims against the defendants over the original lease adjudicated.
Whilst it will be for the Supreme Court to determine, and with due respect to Judge Herriman and the Masters concerned, it is in my view far from clear that this impecunious plaintiff litigant in person ‘had no arguable claim’ and hence ought to have been required to lodge security for costs to pursue his breach of lease claim, and then have his claim struck out when he could not comply. It is a serious matter to prevent, by way of a security for costs order, an impecunious litigant, on pleading grounds, from having their case substantively considered by a court.
In my view the hearing before the Master miscarried, the appeal should be upheld and the decision set aside. In my view the justice of the case requires that the plaintiff be allowed to pursue his substantive appeal in the Supreme Court and in all the circumstances enforcement of the costs ordered by Judge Herriman in this matter should be stayed pending the outcome of the appeal.
The defendant’s counsel has submitted that the appeal to the Supreme Court is incompetent and while I have regard to those submissions in my view the competence of the appeal to the Supreme Court is more appropriately dealt with by the Supreme Court.
Whilst I have not heard argument on it, it is my provisional view that it would not be appropriate for the District Court to stay the costs order obtained against the plaintiff in the Federal Court pending a Supreme Court appeal. The plaintiff also sought an order that those costs be stayed to stop the defendant bankrupting him on the basis of that costs order and preventing him from pursuing his Supreme Court appeal. If the plaintiff wishes to address that pending his appeal, he will need to further consider that issue and how to address it, and for example whether it may be addressed either in the Federal Court or the Supreme Court.
Conclusion
The decision of the Master dismissing the plaintiff’s applications is quashed.
There should be an interim order staying the enforcement of the costs order made by Judge Herriman against the plaintiff, pending the hearing of the plaintiff’s appeal to the Supreme Court in this matter.
Upon delivery of this decision the defendant consented to the quashing of the allocatur for $13,898.71
Postscript
Upon delivery of these reasons the defendant also sought to re-argue the matter and indeed made further submissions opposing the plaintiff’s appeal to this Court, and the matter was adjourned until later in the day to allow that to happen.
Further oral submissions were made later in the day. The defendant made extended oral submissions and sought to convince the Court that the decision it had just made herein was wrong, and sought a further opportunity to put still further submissions on the matter, notwithstanding that the judgment had been delivered.
Notwithstanding the highly unusual nature of that request, 28 days were granted to the plaintiff to file any further submissions in written form. On the 28th day more submissions were delivered, seeking to re-open the whole appeal, and providing extensive further written submissions.
At the root of the further submissions was the complaint, when reduced to its essence, that some of the matters addressed in the judgment were “not raised in oral argument” with them. Further submissions were made concerning those matters, and how they ought properly be regarded by this Court.
It was plain on the hearing of the appeal that the defendant was relying on his written materials, although he did repeat much of his argument orally. All the materials and issues relevant to this appeal by the plaintiff were fully before this Court and the defendant, either in writing or by way of oral submissions, and the defendant had a full opportunity to answer them. They have now had a further two opportunities to supplement their argument, later on the day subsequent to when judgment was delivered, and by way of their further written submissions.
Those further submissions do not alter the view I have taken of this matter that the hearing before the Master plainly miscarried, and that the justice of the situation plainly requires that the costs order against the plaintiff made by Judge Herriman on 23 March 2011, but for some unexplained reason[10] not pursued by the defendant until 2015 as the defendant was emerging from his extended bankruptcy, be stayed pending the full ventilation and resolution of the plaintiff’s Supreme Court appeal against the earlier decision to prevent by way of security of costs order and consequent dismissal the plaintiff from ever having his wrongful eviction breach of lease claim substantively considered.
[10] T 37.12-22 The defendant's counsel was asked why his client had waited four years to pursue the current costs claim, firstly replying that it was due to several matters but then saying he did not have that information.
I will reserve the costs of this appeal and grant liberty to apply to vary the orders should that appeal not be pursued in a timely way, or for any other reason.
Orders
1.The appeal is allowed and the decision of Master Blumberg dated 1 June 2015, is quashed.
2.There will be an interim order staying enforcement of the costs order made by Judge Herriman against the plaintiff concerning the appeal that the plaintiff made against the Master’s decision to Judge Herriman, pending the hearing of the plaintiff’s appeal to the Supreme Court.
3.The District Court costs allocator of $13,898.71 is set aside.
4.I reserve the issue of the costs of this appeal.
5.Each party has liberty to apply.
2