Appellant v Respondent

Supreme Court of Victoria|2009-12-11|Before: J. FORREST J

Appeal from Associate Justice - Application for leave to appeal from Magistrates' Court to Supreme Court - Application for leave to appeal out of time - Meaning of exceptional circumstances - Appeal dismissed - Magistrates' Court Act 1989 s 109(4).

2 At the heart of the appeal is Mr Burlock's inability to obtain the transcript of the Magistrates' Court proceeding and institute the appeal within the 30 days prescribed by the Magistrates' Court Act ("MCA").[1]

3 Mr Burlock elected not to participate in the Magistrates' Court hearing. Consequently, the lack of transcript and the reasonableness of any efforts to obtain the transcript or lodge the appeal within the prescribed time are of significance.

4 The bar set by the exceptional circumstances test is high, hence it is necessary to provide a persuasive explanation where an appeal has not been lodged within the 30 day period.

5 I have concluded, for the reasons I shall set out, that exceptional circumstances have not been demonstrated.

6 The proceedings in the Magistrates' Court at Melbourne were issued on 2 August 2007. Mr Burlock and Aspendale, were sued by the respondent, Wellington Street Investments Pty Ltd ("Wellington Street"). The claim related to Wellington Street's purchase of a townhouse (to be built) at Aspendale. Wellington Street sought recovery of its damages, deposit, as well as damages for breach of s 75 of the Trade Practices Act. Mr Burlock was sued on the basis of accessorial liability pursuant to s 75B(1) of that Act.

7 There was a significant dispute between the parties regarding the nature of the agreement under which the "deposit" of $83,000 was paid.

8 At the hearing of the claim on 20 April 2009, Mr Burlock and Aspendale were represented by Mr Scriva of counsel. He was briefed by Messrs Issac Brott & Co ("the solicitors"). The matter came on for hearing before Beder M.

9 Having failed to secure an adjournment or have the proceeding stayed, Mr Scriva sought and was granted leave to cease to appear. The case proceeded with Aspendale and Mr Burlock unrepresented. The Magistrate gave judgment against both Aspendale and Mr Burlock in the sum of $83,000 plus interest.

10 On 24 April 2009, the solicitors made application to the Magistrates' Court for the digital recording of the Magistrates' Court hearing. This was accompanied by the payment of the prescribed fee.[2] On the same day Aspendale was served by Wellington Street with a creditor's statutory demand.

11 On 6 May 2009 Mr Burlock was served with a bankruptcy notice.

12 On 7 May 2009, Mr Burlock and Aspendale made application pursuant to s 110 of the MCA for a re-hearing, presumably on the basis that they did not appear at the proceeding.

13 On either 22 or 28 May 2009 (on any view, out of time), the solicitors received from the Magistrates' Court a CD Rom containing the digital recording of the hearing

14 On 1 and 2 June 2009, Beder M heard the application pursuant to s 110 of the MCA. The application was dismissed.

15 On 2 June 2009, Mr Burlock and Aspendale lodged their notices of appeal pursuant to s 109 of the MCA against the Magistrate's decision of 20 April.

16 On 1 July 2009, this Court ordered Aspendale be wound up in insolvency.

17 Aspendale did not proceed with its appeal pursuant to s 109 of the MCA. Mr Burlock's application for leave to appeal as it is deemed to be by s 109(4)) came on for hearing before the Associate Justice on 27 August and was completed on 31 August 2009.

18 On 8 September 2009 the application for leave to appeal was dismissed by the Associate Justice.

19 At the commencement of the hearing, Mr Scriva made it clear to the Magistrate that his instructions were confined to an application to have the hearing adjourned and the proceeding stayed.[3] The basis of that application was to enable Aspendale to issue a separate action in the County Court against Wellington Street. The Magistrates' Court proceeding would then ultimately be uplifted. It was argued that in those circumstances the proceeding should be stayed so that the matters could be heard together.

20 Mr Burlock did not attend the hearing. Mr Scriva, undoubtedly acting on instructions, informed the Magistrate that Mr Burlock was on the Gold Coast on business and "would not be here".[4]

21 The hearing of the case had already been adjourned twice on the application of Mr Burlock and Aspendale; on at least one occasion the application being made on the date of the trial. The Magistrate, faced with another application, this time to defer the case indefinitely and await a County Court proceeding yet to be issued, was clearly correct in proceeding with the hearing.[5] No challenge is made to that decision.

22 After the Magistrate ruled against his application, Mr Scriva sought to be excused. This was granted, and he later added that as a "matter of courtesy to the client", he wished to remain in the Court and "just take notes".[6]

23 Having heard Wellington Street's evidence (involving two witnesses and the tendering of documents), his Honour found both claims proved and made the following orders:

Aspendale to pay Wellington Street the claim of $83,000 with interest of $16,479.

Alan Burlock to pay Wellington Street $83,000 with interest of $16,479.

Both Mr Burlock and Aspendale were ordered to pay Wellington Street's costs on Scale G up to and including 24 September 2008, including any reserved costs and thereafter on an indemnity basis (including the costs of the application for an adjournment made on this day).[7]

24 The Associate Justice concluded that Mr Burlock had not demonstrated exceptional circumstances as required by s 109(5)(a) of the MCA and dismissed the application. However, it is implicit from his reasons that he considered Mr Burlock had an arguable case in challenging the finding by the Magistrate of accessorial liability under the Trade Practices Act.[8]

25 Section 109(5) of the MCA sets out the basis upon which leave may be granted to appeal out of time, the prescribed period being not later than 30 days after the day on which the order complained of was made: s 109(2).

26 The two prerequisites are (a) demonstrating the failure to institute the appeal was due to exceptional circumstances, and (b) the delay in instituting the appeal has not caused material prejudice. There was no suggestion of any material prejudice occasioned by the delay.

27 Last year in Shire of Carnarvon v Klein Corporation Pty Ltd,[9] I endeavoured to analyse the authorities relevant to an application under s 109(5) of the Magistrates' Court Act. Those authorities stand for the following principles:

• The granting of an extension of time is not automatic. Upon the expiry of the time for the lodgement of the appeal, a respondent has a vested right to retain the judgment unless the application is granted.[10]

• The onus lies on the applicant to satisfy the test of exceptional circumstances.

• Although "exceptional" is defined as meaning "unusual, special, out of the ordinary course" in the Oxford English Dictionary, in the context of the Act, the circumstances must be such that they can be said to "rarely occur" and "perhaps be outside reasonable anticipation or expectation".[11]

• The inquiry is confined to the circumstances relevant to the applicant's failure to appeal within time and whether they may be characterized as exceptional.[12]

• As part of that inquiry, a Court will examine the conduct of the applicant (and his or her agents) in the prosecution of the appeal and the explanation for failing to lodge the notice within time.

• The inquiry in determining whether exceptional circumstances exist as required by s 109(5) is not a consideration of all matters germane to the appeal.[13]

28 Counsel for Mr Burlock submitted that exceptional circumstances existed as Mr Burlock's inability to obtain the digital recording of the proceeding meant he was unable to determine whether and on what grounds he should appeal. There was evidence that the solicitors had endeavoured to obtain the recording on several occasions, after instructions by Mr Burlock to institute an appeal. It was also said that even if the solicitors had not done enough to procure the recording, exceptional circumstances were demonstrated by Mr Burlock instructing them to obtain the recording, and their subsequent inability to procure it. It was argued that consideration of the period relevant to the inquiry was confined from the time of judgment until the expiry of 30 days. In other words, Mr Burlock's decision to, effectively, have his agents walk out of the Magistrates' Court proceeding denying him the opportunity of, at least, knowing the basis for the Magistrate's decision should be ignored in determining whether exceptional circumstances have been shown.

29 Counsel for Wellington Street submitted that the provision of the digital recording was irrelevant to the consideration of the question of appeal. If he had wished, Mr Burlock could have lodged an appeal under s 109 of the MCA, even though it may not have conformed with the Rules: r 56.08. That way the notice could have been filed in time and then amended once the recording was received. Further the existence of the digital recording was irrelevant as it could be inferred that a strategy had been devised by Mr Burlock to apply for the setting aside of the judgment pursuant to s 110 of the MCA and then, if that failed, lodge a notice of appeal. Counsel said this was clear as the notice of appeal was lodged only after the application for re-hearing was dismissed. It was also contended that the evidence surrounding the efforts to obtain the digital recording was replete with omissions. Mr Burlock's credit was also put in issue in relation to matters surrounding the Magistrates' Court hearing and efforts to obtain the transcript.

30 By use of the expression "exceptional circumstances", the legislature intended to place a considerable bar in the way of an applicant before leave will be granted. The use of the word "exceptional" poses a more significant hurdle than the word "special" which is found in r 56.02. It is also to be contrasted to other extension of time provisions where a Court is required to consider a set of criteria in determining such an application. [14] The word "exceptional" conveys, as Hedigan J said in Owen v Stevens[15], circumstances which "rarely occur" or are "outside reasonable expectation or anticipation".

31 I accept counsel for Mr Burlock's submission that the MCA requires an examination of the circumstances between the time of the Magistrates' judgment and the expiry of the 30 day period. But in carrying out this examination and determining whether exceptional circumstances have been demonstrated, a Court may, properly, look at events prior to that period to determine whether the actions taken by the applicant during the period satisfy the test.

32 Of particular relevance here was the considered decision by Mr Burlock and Aspendale to instruct their solicitors and counsel to participate solely in the application for the adjournment and then "walk out", potentially depriving their agents of the opportunity to hear the evidence and reasons of the Magistrate in delivering judgment against each of them. Whilst this did not occur within the relevant 30 day period, it is nonetheless germane to the inquiry as to the reasonableness of the steps taken by Mr Burlock after the judgment and within that period.

33 There are a number of reasons to reject Mr Burlock's argument that his inability to obtain the digital recording within the 30 days constitutes exceptional circumstances.

34 First, I am by no means persuaded that Mr Burlock simply left matters to the solicitors and they permitted time to run out as suggested in his affidavit and by his counsel. An exhibit[16] to Mr Burlock's second affidavit of 28 July 2009 contains a body of email correspondence between himself and his solicitor, Mr Dean during the relevant period. Mr Burlock was not a client who simply awaited advice from the solicitors or counsel. To the contrary, he was regularly giving instructions as to the application for the re-hearing, the setting aside of the bankruptcy notice and the statutory demand under the Corporations Act. There is no evidence to suggest he canvassed the appeal against the Magistrate's judgment with the solicitors. It is true that in many cases an unsophisticated client could not be expected to understand the legal niceties. However, the correspondence portrays Mr Burlock as a businessman with considerable acumen and a penchant for rhetoric and invective. Given that Aspendale faced an application for winding up and he faced an application for bankruptcy if the judgment stood, his attention to the prosecution of the appeal was totally absent.

35 Second, Mr Burlock's explanation of the solicitors' inability to obtain the transcript is, I think, totally unconvincing. At para 8 of his affidavit, he deposes as follows:

"The request for the digital tape recording was placed by Manal Chatila, legal secretary, who no longer works for my solicitor. On 20 June 2009 I spoke with Ms Chatila by telephone and she confirmed to me, and I truly believe, that a request for the digital tape recording was made by her and that she experienced delays in receiving the recording which did not arrive at her office until 28 May 2009. Ms Chatila also confirmed and I truly believe that she made follow-up calls to the court registry inquiring about the process of her request and expressing concern at the delay. Ms Chatila informs me that she made at least one phone call per week to the registry and was never given any firm commitment about when the digital recording would be sent."

36 This information was obtained by a phone call, two days before the affidavit was sworn. The account is replete with omissions and is extraordinarily vague. There is no evidence as to precisely when, to whom and in what circumstances such inquiries were made or the response received from the Magistrates' Court. No correspondence was exhibited, no file note, no description of the time or date of the phone calls and to whom and at which office they were made. These omissions were made in the context of Mr Burlock's affidavit being prepared by the solicitors responsible for the prosecution of the appeal.

37 There is a concern not only regarding the vagueness of the assertions in Ms Chatila's phone calls but also Mr Burlock's credit. Counsel for Wellington Street did not seek to cross-examine Mr Burlock, however there is at least one example of a highly relevant inconsistency which, I think, reflects adversely on Mr Burlock's credit. As I have said, the Magistrate was told by Mr Scriva that Mr Burlock was interstate on business and could not attend the Magistrates' Court hearing. Yet, when Mr Burlock swore his affidavit[17] on this application explaining his inability to attend the Magistrates' Court, he said that it was due to a "medical condition" both undisclosed and unsubstantiated.[18] The two propositions are completely irreconcilable and reflect adversely on Mr Burlock's credit.

38 There is also an inconsistency in Mr Burlock's affidavit as to when the CD Rom was received. In his affidavit in this proceeding he swore the CD Rom did not arrive until 28 May 2009 as advised by Ms Chatila.[19] However, in his affidavit of 1 June 2009 filed in the Magistrates' Court proceeding,[20] he swore "My solicitor informs me and I verily believe that although a recording was requested from the court registry shortly after the undefended hearing, a disc recording was not provided until or about 22 May 2009".

39 Third, the absence of evidence from either Mr Dean or Ms Chatila is of significance. I would have expected, in a case where the primary submission relates to the efforts to obtain the transcript and the response received from the Magistrates' Court Registry officers, that evidence would have been adduced from one or other of the two persons involved in the handling of the file. I reject the submission put on behalf of Mr Burlock that the interlocutory nature of the application does not require such evidence. To the contrary, where one is seeking to extend the time for prosecuting an appeal, particularly where the test is one requiring "exceptional circumstances" to be demonstrated, the proofs must be clear and cogent to enable a Court to be satisfied the onus has been discharged. Indeed, solicitors' affidavits are regularly filed in applications where it is sought to explain the delay in complying with limitation periods. Mr Burlock's affidavit in this proceeding was filed by the solicitors. Mr Dean and Ms Chatila were both employed by the solicitors. There is no evidence from either of them as to the steps taken to obtain the transcript or, indeed, as to the prosecution of the appeal. There is no acceptable explanation for the absence of evidence from either of them. It could not seriously be suggested that because Ms Chatila no longer works for Isaac Brott & Co, she is incapable of providing an affidavit deposing precisely what went on between her and the Registry staff. A Jones v Dunkell[21] inference can, I think, be readily drawn. I infer that neither Mr Dean nor Ms Chatila would have assisted Mr Burlock's assertion as to the efforts made to procure the digital recording. The failure to adduce evidence from them also permits me to draw inferences more confidently in favour of the case put by Wellington Street.[22]

40 Fourth, if it be accepted that some inquiries had been made of the Magistrates' Court, the failure to do anything more is relevant. Mr Burlock's barrister, Mr Scriva, told the Magistrate that as a matter of courtesy he was going to remain at the Court and take notes.[23] There is no suggestion he was contacted to see whether he had notes of the judgment. Nothing was done by Mr Burlock or his solicitors to contact the solicitors or counsel who had acted for Wellington Street (who would, undoubtedly, have had notes of the evidence and the reasons). Whilst such a step may have been met with a brick wall, the fact is, nothing was done to even open up the line of inquiry, particularly as the clock ticked down towards the expiry of the period. Further, no holding notice of appeal was filed prior to the expiry of the 30 days. Although I accept that it would have run foul of r 58.08, it could have been amended once the reasons were obtained. (I should add that I do not regard this consideration as one of any great significance.)

41 On this issue, the context has to be borne in mind. Having decided not to appear personally at the hearing and instructed his solicitors to only apply to have the trial date vacated, it was incumbent upon Mr Burlock to be proactive in terms of the prosecution of the appeal. Whilst it seems clear that for some of the period he was in the United States, he nevertheless retained a keen interest in the progress of the re-hearing application. Even if one accepts (which I do not) that there were adequate steps taken by the solicitors to "chase up" the digital recording, once it became apparent, as it should have, that there it was going to be a close run thing to obtain the digital recording, Mr Burlock should have given instructions to undertake further steps to obtain the digital recording or a version of the reasons so the appeal could be launched. As I have already set out, there is no evidence of any attendance at the Magistrates' Court, specific communication (oral or written) with the Court endeavouring to explain the urgency of the matter, communication with Mr Scriva or with Wellington Street's solicitors or counsel.

42 Fifth, the obtaining of the digital recording in the form of the CD Rom does not demonstrate, as counsel for Mr Burlock contended, a determination to proceed with the appeal. Rather, it was to be deployed in the application for a re-hearing. Portions of it are deposed to in Mr Burlock's affidavit of 1 June 2009 filed in support of that application.[24]

43 Sixth, whilst there may be cases in which exceptional circumstances are demonstrated by a solicitor failing to issue an appeal notwithstanding the client's instructions[25], the facts would need to be considered closely and in context. This, as I have already observed, is not the case here. It is clear the solicitors were working together with Mr Burlock to prosecute the re-hearing application. Significantly, Mr Burlock has not sworn as to his understanding of the time limit imposed upon an appeal pursuant to s. 109 of the MCA.

44 Finally, I think that on analysis of the correspondence and communications between Mr Burlock and Mr Dean, it is clear the strategy employed by them was to prosecute the application for a re-hearing which, if successful, would have stymied the bankruptcy and winding up applications.[26] The only reference in the instructions was to appeal against the refusal of the adjournment by the Magistrate, not the substantive decision.[27] This was not considered again during the 30 day period. Their focus was on the re-hearing, with no apparent consideration of the right of appeal or the time limits involved. Once the re-hearing application failed, then it became clear, I suggest, to Mr Burlock and the solicitors that the only way in which to challenge the Magistrate's decision was by appeal under s 109 of the MCA by which time Mr Burlock was out of time.[28]

45 Mr Burlock has not demonstrated exceptional circumstances. The application for leave to appeal should be refused.

[2] Exhibit ADB2 to the affidavit of Mr Burlock of 22 June 2009.

[3] Exhibit ADB3 to the affidavit of Mr Burlock of 22 June 2009 - transcript of the Magistrates' Court proceedings ("the transcript").

[7] Exhibit ADB1 to the affidavit of Mr Burlock of 22 June 2009.

[8] [21] of the reasons of the Associate Justice.

[10] Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458. See also Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541, 553-554.

[11] Owen v Stevens (unreported 3 May 1991 Hedigan J), R v Steggall [2005] VSCA 278 [12].

[12] Hughes v Morgan & Anor [1998] VSC 147 [18].

[13] Schwerin v Equal Opportunity Board [1994] VicRp 60; (1994) 2 VR 279, 287.

[14] E.g. s 23A s. 27L of the Limitation of Actions Act.

[15] Unreported 3 May 1991. See [27].

[16] Exhibit ADB11 of the affidavit of Mr Burlock of 28 July 2009.

[18] In an affidavit sworn in the Magistrates' Court by Mr Burlock (1 June 2009 and Exhibit PL2 to the affidavit of Phillip Leaman of 11 August 2009), he also asserts that he was "not in a fit condition to attend court as a witness or party and was unable to issue proper instructions to my lawyers for the purpose of the cross-examination of the plaintiff witnesses" [6].

[20] Exhibit PL2 to the affidavit of Phillip Leaman.

[22] Transport Industries v Longmuir (1997) 1 VR 125, 143.

[25] See for instance in a different context Kostokanellis v Allen [1974] VicRp 71; [1974] VR 596, 607.

[26] See the affidavit of Mr Burlock of 28 July 2009.

[27] Affidavit of Mr Burlock of 22 June 2009 [9].

[28] I have significant reservations about Mr Burlock's suggestion in [10] of his affidavit that advice was given by Mr Dean before the rehearing application that there was an arguable Supreme Court appeal point. Mr Dean has given no such evidence.

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