Yau v Cheung

[2000] HCATrans 40

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S46 of 1999

B e t w e e n -

ANDY SUNG KIT YAU

Applicant

and

WING CHEUNG

Respondent

Application for special leave to appeal

GAUDRON J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 FEBRUARY 2000, AT 9.57 AM

Copyright in the High Court of Australia

MR G.T.W. MILLER, QC:   May it please the Court, I appear with my learned friend, MS A.G. PEARMAN, for the applicant. (instructed by Koffels)

MR M.D. BROUN, QC:   May it please the Court, I appear with my learned friend, MR L. Y-K. MA, for the respondent. (instructed by W. Chan & Co)

GAUDRON J:   Mr Miller.

MR MILLER:   Your Honours, there are two affidavits:  one is an affidavit filed 25 January 2000, correcting procedural error in relation to the application.

GAUDRON J:   That is in relation to the date of the order, is it?

MR MILLER:   The date of the orders.

GAUDRON J:   Yes, thank you, we have that.

MR MILLER:   And the other is an affidavit of 10 February, Mr Chard, Solicitor, annexing - he described it as Statement of Liquidated Claim, the pleadings and part of the transcript.

GAUDRON J:   Yes, thank you.

MR MILLER:   I read those, your Honour.

MR BROUN:   Your Honour, I should say, we got them about 5 o’clock last night.  We do not see that they actually advance the arguments one way or another, but no doubt it will become clear from my friend’s arguments what the relevance of them is, but we have certainly not had much opportunity to examine them.

GAUDRON J:   Yes.

MR MILLER:   I apologise to my learned friend for that.  It was not intended that that occur.  Your Honours, the present case, we submit, warrants a grant of special leave because there are issues of general or public importance raised and, in short, they are as follows:  firstly, the extent to which District and County Courts, exercising civil jurisdiction, should require the parties to formulate with some precision their dispute by pleadings ‑ ‑ ‑

GAUDRON J:   By that you mean, in their pleadings?

MR MILLER:   In their pleadings, your Honour.

GAUDRON J:   Yes, but it was formulated on transcript, was it not?

MR MILLER:   Well, we say no, your Honour.  Her Honour was not assisted, she acknowledged that.  The Court of Appeal went even further in its criticism of the extent to which her Honour was left unassisted.

GUMMOW J:   By everybody.

MR MILLER:   By everybody.

GUMMOW J:   Why should they get a new trial?

MR MILLER:   Because, your Honour, we say that a manifest injustice has resulted.  Her Honour, with respect, in the difficult position ‑ ‑ ‑

GUMMOW J:   I think she did the best she could be expected to do.

MR MILLER:   She did the best she could be expected, but, your Honours, the short position is this:  County and District Courts are under increasing jurisdictional pressure to determine matters of considerable public importance in relation to commercial disputes.  We have not included, but we made inquiries interstate yesterday, and the position is this, your Honours may well be aware of it:  New South Wales is now a jurisdictional amount of $750,000; Victoria there is a County Court jurisdictional limit of $200,000, but by consent unlimited; Queensland, $250,000; Western Australia, $250,000; South Australia appears to be unlimited; Tasmania and Northern Territory not having a District Court.

We have included, your Honours, here, in the documents that we have ‑ ‑ ‑

GAUDRON J:   Now, but Mr Miller, the principles in this area are well known, are they not, and presumably well known to counsel and if not, that would seem to me to be where the problem lies.

MR MILLER:   Well, your Honour, that is one approach, with respect.  It does not do the public much good if that is the way it is going to be left ‑ ‑ ‑

GAUDRON J:   But the principles are well known, are they not?  You do not seek to establish any new principle?

MR MILLER:   We do, your Honour, in relation to the control that is required, we submit, of this Court, ultimately, of the legal profession, and the extent to which inferior courts ‑ ‑ ‑

GAUDRON J:   Now, was there objection taken before her Honour?  No.  As I understand it, counsel said, we understand the point.

MR MILLER:   Saying one understands the point and leaving the trial judge in the position that she was left is not the answer, we submit.  The ultimate test ‑ ‑ ‑

GAUDRON J:   Well, no, but was the point taken at trial?

MR MILLER:   No.  Indeed, the concession was made, as your Honours will appreciate, that the point would not be taken and that counsel felt that ‑ ‑ ‑

GAUDRON J:   But now, at the end of the day, you would like to take it.

MR MILLER:   Not at the end of the day, your Honour; it should have been taken up front, it was not taken.  I am not seeking to excuse the fact that it was not taken and, indeed - but the ultimate result, we say, is that there was a manifest injustice.  The available cross-claim, which raised matters under the Contracts Review Act, was not properly addressed by her Honour.  She did her best – and I say that with the utmost and greatest respect – but did not address all the issues, and it was not addressed at all in the Court of Appeal.  The manifest injustice which occurred in this case, as a result of the exercise in the Court of Appeal, is ‑ ‑ ‑

GAUDRON J:   And no argument was addressed on it in the Court of Appeal?

MR MILLER:   That, with respect, your Honour, we do not accept that.  I can take your Honours to the passage, and that is why we included in the - pages 27 and 28 of the transcript, which is annexed to the affidavit, which is numbered at the bottom right-hand corner, pages 31 and 32, your Honours will see in the discussion between senior counsel who then appeared – the President put at line 25:

it came about subject to the contracts review point, it was in the document and the document was read out to the two men who then, wearing at least one of their hats, signed it.

Your Honours will then see the response of senior counsel.  And whilst I am on that point, your Honours will no doubt raise, and my learned friends have in their written submissions raised against us, concessions apparently made.  They are dealt with at, I think, the next page – no, page 29, line 35, the reference to the “dead duck”.

If that transcript is read as a whole, the concessions that are attributed to senior counsel for the applicant, we say were not in fact made in the terms as so found by his Honour Mr Justice Powell.

GUMMOW J:   Well, we are going to resolve this, are we?

GAUDRON J:   It is hard to.

MR MILLER:   No, your Honour; the matter should go back for a new trial with instruction from this Court, we submit, as to the appropriate minimal way in which pleadings should be addressed.

GAUDRON J:   Now, the question of the Contracts Review Act would have required analysis of evidence, would it not?

MR MILLER:   That would have to.

GAUDRON J:   And was it analysed in the Court of Appeal?

MR MILLER:   No, your Honour.

GAUDRON J:   No, and it would have to require analysis by us, if we were to grant leave.  Rarely does this Court embark upon matters where evidence is in issue and where findings of fact would have to be made.

MR MILLER:   If your Honours please.  But on that point, the problem is this, and it is going to be a recurring problem.  His Honour Mr Justice Powell took the same approach in this case as he took in Walsh, on analysis, in relation to a fact-finding exercise or a review of the matter on appeal.

GUMMOW J:   That was not an appeal.

MR MILLER:   No, I appreciate that it was not, but as a result of – special leave was granted because it was considered, in the particular circumstances of that case, his Honour, as to the way in which ‑ ‑ ‑

GUMMOW J:   The Court of Appeal was exercising original jurisdiction.

MR MILLER:   It was, your Honour, yes.  This is an appeal as of right, because it is in excess of the jurisdictional amount of $100,000, and although it was indicated during debate by his Honour Mr Justice Powell that it was a re-hearing, in effect that is not what occurred.  Now, your Honour, the starting point of the problem, we submit, is the necessity to ensure that there is at least minimal attention to pleadings.  If the Court of Appeal then embarks, as it did here ‑ ‑ ‑

GUMMOW J:   Well, that is for one party to complain about the other party’s deficiency at the time, and it used to be said the District Court was not a court of strict pleading.

MR MILLER:   It used to be said that, we accept that, but there is at least ‑ ‑ ‑

GUMMOW J:   Is that still the position?

MR MILLER:   It still is, your Honour, but what does that mean?

GUMMOW J:   Well it may require looking at now they have such a large jurisdiction; that is a legislative matter.

MR MILLER:   Yes, indeed your Honour, yes.

GUMMOW J:   Or perhaps a matter for rules of court.

MR MILLER:   Yes, and indeed, with respect, your Honour, a curial supervisory ‑ ‑ ‑

GUMMOW J:   We do not supervise anybody, except sometimes with prerogative writs.

MR MILLER:   Well, your Honours do by way of review, with respect.  The Court of Appeal admittedly is pressed itself with the number of matters that are coming before it and will be increasingly pressed with a number of important commercial matters that are coming before it.  We submit, your Honour, what should have been done – and I say this with the utmost and greatest respect to the learned trial judge – is that her Honour should have insisted that the pleadings be re-drawn and that the whole of the evidence then be presented in a way in which it could reflect the ‑ ‑ ‑

GUMMOW J:   But that was for one party to complain about a delinquency of the other party, and the judge to rule on it; that is the way it works.

MR MILLER:   Well, your Honours, that of itself, for the reasons that we put in our written ‑ ‑ ‑

GUMMOW J:   These notions of case management seem to be getting somewhat out of control, it seems to me.  It is distorting the real nature of the adversarial process.

MR MILLER:   Well, they are going to get even worse.  The inquiries that I made interstate – and I was speaking to a colleague in Melbourne ‑ ‑ ‑

GAUDRON J:   That may all be very well, but counsel not only did not complain, he made a concession. 

MR MILLER:   He made a concession.

GAUDRON J:   Well now, had her Honour refused to proceed in those circumstances, the other side would have had a far more substantial complaint than the one you now make.

MR MILLER:   Well, save, your Honour, we address at page 60 of the application book in our written submissions the concessions that were made and, ordinarily, we accept that the conscious departure from the pleaded cause would prevent a party in the position of applicant for arguing relief.  But in this case we say there is an injustice.  I direct your Honours to paragraphs 28 and 29 there.  Your Honour Mr Justice Gummow referred to case management principles.  They are concerned, we accept, with the efficient administration of justice, but if there is ‑ ‑ ‑

GUMMOW J:   In an adversarial system.

MR MILLER:   Accepted, your Honour.  We submit, ultimately, that notwithstanding the concessions that were made at first instance, the procedural informality which was permitted led to manifest injustice to the applicant.

Your Honours, the other points that we seek to advance in support of the application for grants – and, your Honour, can I give your Honours these references - and other members of this Court have addressed the desirability or need for pleadings – in Darvall, which is No 4 in the cases that we give, Mr Justice Kirby said:

Issues for trial are determined by the pleadings and the way a trial is conducted.  Neither the trial judge, nor an appellate court –

and we say this is apposite here –

are at liberty to conduct a roving inquisition, determining, on the run as it were, the issues which arise in a peripheral way only to those posed by the pleadings.

GUMMOW J:   That Darvall Case was a fairly well-known case in the corporations list, was it not, in the Equity Division, Justice Hodgson decided it.  It is a Supreme Court appeal.

MR MILLER:   It was, your Honour.  Well, I will take your Honours to judgments of this Court.  Mr Justice Kirby in Earthline, once again referring to the matters that your Honour Mr Justice Gummow has referred to.  At page 617 – and your Honours, I apologise, we gave your Honours the ALR report ‑ ‑ ‑

GUMMOW J:   Yes, but Earthline was another case in the Supreme Court at the trial.

MR MILLER:   I am sorry.

GUMMOW J:   Earthline was another case involving a trial in the Supreme Court.

MR MILLER:   Well, your Honours, the point we make in short is this:  yes, they were trials in the Supreme Court, but the Supreme Court, at least of this State, is remitting important matters, matters of increased value in the commercial list, to the District Court.

GUMMOW J:   Pursuant to legislation permitting that.

MR MILLER:   Your Honour, and we would submit ‑ ‑ ‑

GUMMOW J:   And that is a matter of the legislative organisation of New South Wales legal system.

MR MILLER:   It is, your Honours, but procedurally, and as a matter in the end result of fairness, there is no reason why, if this Court would intervene on review in respect of a commercial matter which has been determined in the Supreme Court, it should not do the same in respect to a matter which has been determined in the District Court.

Your Honours, the passage that I want to take your Honour to in Earthline, in the Australian Law Report is at page 617 line 5:

A further significant change is the increase in the number of civil trials conducted before judges sitting alone, the near elimination in most Australian jurisdictions of jury trials of civil causes, the large increase in the workload of judges.....These phenomena have resulted in pressures for case management and for the efficient disposal of litigation.

Mr Justice Callinan, recently, in Boland v Yates, 656/657; and I just take these procedures because they are most apt to what happened in the Court of Appeal in this case, stated ‑ ‑ ‑

GAUDRON J:   I do not think you are coming to grips with the problem.  We know all this, but the concession having been made, how can one go back on that?  The problem is, the concession having been made, the parties conducted their case accordingly, and there would be very – I mean, the other side could be heard to complain that they have suffered detriment because they accepted the concession at face value.  Had it not been accepted, had the concession not been made, they may have taken another course.  That is the problem that confronts you; it is not a problem about case management.

MR MILLER:   Your Honour, can I address that.  Look at the concession, we say, that was made.  It was not a concession which was made such as to require the trial judge, as she did, not to address all of the matters in the cross-claim, particularly in relation to the defences that arose under the Contracts Review Act.  What the trial judge did in that regard was that she referred to the fact that the pleadings were in an abysmal state, then addressed but two of the matters under the Contracts Review Act, namely the question of explanation of terms and the practical effect and the cross‑claimant’s facility with English; she did not make any findings on when the cross-claimant was first shown the document, whether the provisions were subject to negotiation prior to or at the time the agreement was entered into, whether it was reasonably practical for the cross‑claimant to negotiate for alteration or rejection of any of the provisions, whether the cross-claimant received any independent legal or other expert advice, prior to or at the time of signing the document, or whether he was aware of the risks in entering the agreement if there was a change in position.

Now, your Honours fully appreciate that the trial judge found a totally oral agreement. She did not accept the enforceability of the agreement, and there was a question then of the prima facie breach of section 205 of the Corporations Law.  On review, Mr Justice Powell did not investigate the question of the breach of the Corporations Law, considered it was not necessary, but nonetheless used portion of the document in some way to evidence the alleged oral agreement.  I can say no more, your Honour.

GAUDRON J:   Thank you, Mr Miller.  Mr Broun, we need not call upon you.

This case turns upon its own facts.  The crucial matter in the conduct of this litigation was the concession at trial in the District Court made by counsel then appearing for the applicant.  The effect of the case the applicant seeks to make would be to go behind those concessions.  Having regard to that consideration, and also having regard to the way in which the case was otherwise conducted, it is not a suitable vehicle for the grant of special leave.  Special leave is refused.  There having been written submissions with respect to costs, it is refused with costs.

AT 10.18 AM THE MATTER WAS CONCLUDED