Applicant v Respondent

Supreme Court of Victoria|2008-02-13|Before: FORREST J

1 This appeal from a Master of this Court is concerned with whether exceptional circumstances exist which would permit the appellant to bring its appeal under s.109 of the Magistrates' Court Act ("the Act").

2 The Act permits an appeal to be lodged within 30 days of a final order[1], but thereafter a Court is only permitted to grant an extension of time if it is satisfied that "exceptional circumstances" exist.

(a) is of the opinion that the failure to institute the appeal within the period referred to in subsection (2)(a) was due to exceptional circumstances; and

(b) is satisfied that the case of any other party to the appeal would not be materially prejudiced because of the delay". (My emphasis)

4 The appellant is a Shire situated in rural Western Australia. The respondent specialises in training personnel in training schemes set up by State governments.

5 In 2003, the respondent was engaged by the Western Australian government to deliver training in remote Western Australia[2].

6 In early 2004 the appellant entered into an arrangement[3] with the respondent to occupy commercial premises owned by the appellant and located at the Carnarvon airport ("the premises").

7 Materials and equipment for use with the respondent's training program were delivered to the premises in about May of 2004. Such goods comprised the office equipment of the business and included items such as telephones, desks, cabinets and computer equipment ("the goods"). The respondent originally asserted that the goods were valued at around $27,000[4], but this was subsequently amended to approximately $15,000[5].

8 Within a very short time, the appellant prevented the respondent from gaining access to the premises by changing the locks on the doors.

9 Thereafter, a protracted dispute commenced in relation to the alleged detention of the respondent's goods by the appellant.

10 A proceeding was commenced in the Magistrates' Court of Victoria. In that proceeding, the respondent sought the sum of approximately $15,000 in respect of goods sold and delivered to the appellant in Carnarvon, Western Australia[6].

11 On 18 October 2006, a Magistrate refused the appellant's application ("the jurisdiction decision") seeking, inter alia, a stay of the proceeding on the basis that the Magistrates' Court lacked jurisdiction to deal with the claim and/or that the appropriate forum was a court of competent jurisdiction in Western Australia. That application was dismissed and the proceeding continued in the Magistrates' Court.

12 On 30 May 2007, the trial of the proceeding commenced before a Magistrate. In essence, the claim had shifted from one of goods sold and delivered to one in detinue and/or conversion.

13 On 31 May 2007, the Magistrate gave judgment ("the primary judgment") in the proceeding in favour of the respondent. Her Honour declared that the respondent had title and/or right to possession of the goods. She ordered that the appellant deliver to the respondent the goods and ordered that the appellant pay the respondent's damages fixed at $5,000.83 with costs fixed at $6,286.70[7].

14 There have been further developments since the primary judgment. The Sheriff of the Supreme Court of Western Australia has issued a Seizure and Sale Order in relation to the goods, apparently on the basis that the goods are the property of Ticket Xpress Pty Ltd - a company associated with the respondent. There are also a number of affidavits filed in this proceeding suggesting that a relatively large number of goods were, in fact, removed from the premises by the respondent around the time that the locks were changed. In addition there is an allegation that the goods were the subject of an insurance claim with payment made to the respondent by the insurer on the basis that the goods were stolen. None of this material was before the Magistrate.

15 On 5 September 2007, the appellant commenced proceedings under the Act to set aside the primary judgment on the basis that it was obtained by fraud.

16 On 9 November 2007, the appellant lodged a Notice of Appeal in this Court.

17 On 30 November 2007, a Master of this Court dismissed the appellant's summons; the Master not being satisfied that exceptional circumstances as required by s.109(5) of the Act were demonstrated.

18 On 6 December 2007, the appellant sought leave to appeal the decision of the Master.

19 Before the Master, the appellant argued that the exceptional circumstances were constituted by two factors. Firstly, that the jurisdictional decision was wrong in law. Secondly, that as a result of the information summarised above which had come to light subsequent to the primary judgment, it was said that the judgment was the result of fraud. This claim is hotly denied by the respondent.

20 The master was not satisfied that on the material before him exceptional circumstances were established.

21 Mr Sandbach, who appeared for the appellant, did not press any argument concerning the insurance or fraud issues, accepting that these would be resolved by the application to set aside the judgment pending in the Magistrates' Court. Rather, he focused his argument on the jurisdictional decision, submitting that it was patently wrong and that exceptional circumstances existed justifying a review of that decision alone. He also contended that the time for making such an application could only run from the time of final order as provided by s.109 of the Act[8]. He sought leave to file a further affidavit [9] relating to the jurisdictional decision. I grant him special leave to rely upon this affidavit.

22 Mr Foster, who appeared for the respondent, did not contend that there was not an arguable case in respect of error in relation to the jurisdictional decision. Rather, he said, accepting that time ran from the date of the primary judgment, that there was no basis to conclude that exceptional circumstances existed. He argued that any real deficiency in the jurisdictional decision had always been within the knowledge of the appellant and it had not satisfied the exceptional circumstances test.

23 It is necessary to say something about the jurisdictional decision of the Magistrate.

24 Only the appellant filed material before the Magistrate at this hearing on 17 October 2006[10].

25 The following matters appear to have been undisputed before the Magistrate:

(a) The lease was entered into in Western Australia.

(b) The goods were, at all relevant times, located in Western Australia.

(c) The cause of action ultimately claimed by the respondent (i.e. detinue and/or conversion) could only have arisen in Western Australia.

(e) The invoice apparently delivered by the respondent to the appellant related to the goods which were still in Western Australia.

(f) The goods continued to be held in Western Australia.

26 As far as I can determine, the only connecting factor with Victoria was the fact that the respondent was incorporated in Victoria and carried on business here, as well as in other parts of the Commonwealth.

27 Section 100(4) of the Act describes in negative terms the territorial jurisdiction of the Magistrates' Court. S.101 of the Act stipulates the procedural steps to be taken in respect of staying or dismissing the proceeding. It seems to me that, prima facie, the appellant has a powerful case in asserting error on the part of the Magistrate in determining that the Magistrates' Court had jurisdiction to hear the case. Indeed, the forum non conveniens argument must also have been one of some force[11].

28 There is a strong line of authority relating to applications for extensions of time in which to appeal in varied contexts which demonstrate that in considering whether to extend time a Court may also have regard to the merits of the appeal. In such cases there may be an examination, on a prima facie basis, of the merits of a party's arguments on appeal and whether there would be an injustice done in preventing a party from pursuing a right to appeal.

29 In Gallo v. Dawson[12], McHugh J discussed the principles referable to an application to extend time for leave to appeal to the High Court from a decision made in the original jurisdiction of that Court. Although the Rules of Court did not impose a test of "exceptional circumstances", the discussion by his Honour is, with respect, illuminating:

"The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court or Justice to do justice between the parties. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice, upon the applicant. In order to determine whether the rules will work an injustice it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has 'a vested right to retain the judgment' unless the application is granted. It follows that, before the applicant can succeed in this application there must be material upon which I can be satisfied that to refuse the application would constitute an injustice". (Authorities omitted).[13]

30 In this Court the principles associated with the granting of an extension of time in respect of leave to appeal against an order of a single Judge of this Court are well known and were summarised succinctly by Gillard J in Griffiths v Maleka Holdings[14]:

"In my opinion, in the final analysis, it is a question of avoiding an injustice."

31 Mr Sandbach relied upon these principles and also upon authorities relevant to determining whether "special circumstances" exist in the context of seeking an extension of time for judicial review (pursuant to r56.02). In particular he referred to a decision in this Court of Lednar v The Magistrates' Court & Anor[15].

32 After an analysis of the authorities, Gillard J in Lednar concluded:

"141. In my opinion, it was not the intention of the framers of the rule to so confine the paragraph in Rule 56.02 and in my opinion one has to consider all the circumstances which include not only the reasons for failing to bring the proceeding within time but also whether the plaintiffs have an arguable case and whether the defendants would be prejudiced by an extension of time.

143. The court does have a discretion which it may exercise where special circumstances are established and what constitutes special circumstances in any particular case will depend upon the circumstances of the case. It is not appropriate to fetter the jurisdiction by seeking to define what are 'special circumstances'".

33 The general principles are clear and well understood, but do they have any application to the statutory test laid down by s. 109 (5) of the Act?

34 In Owens v. Stephens [16], Hedigan J said of the phrase "exceptional circumstances":

"The use of the phrase 'exceptional circumstances' is not unknown in the legal lexicon. Section 13 of the Bail Act is a well-known example.

Exceptional is defined, contextually, in the Oxford English Dictionary (2nd Edition Volume V), the greatest dictionary, as meaning 'unusual', special, out of the ordinary course'. This does not mean any variation from the norm.

The facts must be examined in the light of the Act, the legislative intention, the interests of the prosecuting authority, the defendant and the victims. It may be that the circumstances amounting to exceptional must be circumstances that rarely occur and perhaps be outside reasonable anticipation or expectation".

35 These observations were approved by the Court of Appeal in R v Steggal.[17]

36 In Di Blasi's affidavit filed on behalf of the appellant, he set out[18] the following grounds to support a finding that exceptional circumstances existed, namely:

"(a) Initially, following the judgment, the appellant decided against an appeal on the information available to it at the time, as the judgment amount and costs were modest and it would be uncommercial and not in the interests of the ratepayers of the Shire of Carnarvon to pursue an expensive appeal proceeding.

(b) Subsequently, the appellant discovered information relating to the GIO insurance claim, which appeared on its face to suggest that the respondent had obtained judgment by fraud. This fresh evidence was not discovered until the late afternoon of 30 June 2007. As at 30 June 2007, the 30 day period for appeal had already elapsed. The matters relating to fraud had not been confirmed with absolute certainty until a subsequent inspection of the computer goods took place on a date after 4 July 2007.

(c) Following the discovery of this extraordinary evidence, the appellant gave instructions to consider all of its rights against the respondent, including the right to appeal to the Supreme Court. However, at that point the 30 day limitation period for appeal had already elapsed.

(d) Upon review of the appellant's Supreme Court appeal rights in light of the freshly discovered evidence, it also became apparent that the appellant had a number of compelling grounds of appeal which relate to jurisdiction and errors of law in arriving at the judgment in the original proceeding. The appellant did not learn of those additional grounds until the time of drafting the notice of appeal, namely early November 2007.

(e) Had the appellant become aware of the matters concerning the GIO insurance claim, the competing claim for the goods by the Department of Consumer and Employment Protection in Western Australia and the removal of the goods to Exmouth within the 30 day appeal period, it would have considered and commenced an appeal on the same grounds as are set out in the appellant's notice of appeal herein, within the 30 day period." (My emphasis).

37 It will be observed with the exception of paragraph (d) that none of the matters referred to are directly related to either the question of jurisdiction or consideration of the jurisdictional decision. Indeed, as Mr Foster submitted, the initial review of the question of appeal by the appellant (which presumably included consideration of whether there were real issues to be ventilated on appeal) occurred in early June 2007 and instructions were then given not to appeal on 8 June 2007[19].

38 What appears to have excited the interest of the appellant in pursuing the appeal is the material which emerged after July concerning the insurance claim, the Sale and Seizure Order of the Sheriff and further information obtained from potential witnesses as to the removal of some or all of the goods.

39 Mr Foster directed my attention to two decisions of Judges of this Court analysing "exceptional circumstances" as defined in various parts of the Act (including s. 109), contending that the factors relevant to exceptional circumstances must relate solely to the explanation for the delay, and that consideration of the merits of the appeal itself was irrelevant.

40 In Schwerin v Equal Opportunity Board and Ors[20], McDonald J said:

"That which must be first established is that the failure to institute the appeal within the period referred to in sub-s.(2)(a) of s.109 of the Magistrates' Court Act 'was due to exceptional circumstances'. It is not sufficient that the plaintiff establishes there exists exceptional circumstances generally with respect to the subject matter of the appeal, or the appeal itself, but, rather, that which must be established is that the failure to institute the appeal within the statutory period was due to exceptional circumstances." (My emphasis)

41 Subsequently in Hughes v Morgan & Anor[21], Beach J accepted that this was the correct interpretation of the section. Beach J said:

"One does not look to the merits of the appeal itself when determining whether to grant leave to a litigant to appeal out of time. The sub-section requires one to look at the circumstances giving rise to the litigant's failure to appeal within time. If those circumstances can properly be categorised as exceptional then leave to appeal out of time will be granted. If they cannot, then leave will be refused." (My emphasis)

42 In Hughes' case the appellant appealed on a question of law pursuant to s.92 of the Magistrates' Court Act (which deals with criminal proceedings) as well as lodging a general Notice of Appeal to the County Court pursuant to the provisions of s.83 of the Act (as it stood at that time)[22]. Beach J accepted that the Magistrate had clearly made one error of law and arguably made not less than one other error of law[23]. However he was, following McDonald J in Schwerin, not prepared to accept that this was a factor relevant to the exercise of his discretion to extend time. Although it was argued by Mr Sandbach that underpinning the decision of Beach J was the ability of the County Court to correct the errors of law that he had identified, his interpretation and application of the section is clear: the exceptional circumstances must relate solely to the explanation for the delay.

43 In my view the wording of the section is clear and unambiguous. It is the failure to institute the appeal which must be due to exceptional circumstances, not a general consideration of the circumstances surrounding the appeal.

44 The wording of the section is to be contrasted to that used, by way of example, in r.56.02 which permits an extension of time provided special circumstances are shown but does not limit the exercise of the discretion to a failure to lodge the appeal.

45 The reasoning of McDonald J in Schwerin and Beach J in Hughes is, with respect, unimpeachable given the wording of the statute: the exceptional circumstances must relate directly to the failure to institute the appeal not a consideration of the merits of the appeal. Indeed this interpretation was noted by Gillard J in Lednar[24] who distinguished the wording of s. 109 (4) of the Act from that in r.56.02(3).

46 The appellant has always been aware of the jurisdictional issue and its merits (or demerits); there is nothing in the material which shows any alteration in its knowledge of that fact (particularly given that some nine months before the hearing it instituted its jurisdictional application). Whilst it was aware that it had a right of appeal, according to Di Blasi it only learnt in November that it could ventilate the correctness of the jurisdictional decision at that time because of the concern about the fraud/insurance issues.

47 The evidence concerning the decision to appeal the jurisdictional decision does not reveal "exceptional circumstances". Nothing new has occurred, other than extreme agitation on the part of the appellant in respect of matters that go to the quantum or genuineness of the claim, but not to the question of the jurisdiction of the Magistrates' Court to hear the claim. The overlooking of the right to appeal the jurisdictional decision does not constitute an exceptional circumstance, particularly when experienced solicitors considered the issue of appeal generally on two occasions. There is nothing out of the ordinary disclosed on the evidence.

48 Accordingly, I am not persuaded that the appellant has demonstrated that "exceptional circumstances" referable to the failure to institute the appeal exist. I reach this conclusion with some reluctance, as it seems to me that the appellant has a distinctly arguable case in respect of the jurisdictional decision. Nevertheless, the legislation is clear. I am not permitted to take into account the merits of the appellant's case.

49 In summary I am not satisfied that in respect of an appeal confined to the jurisdictional decision there exist exceptional circumstances to justify extending the time in which to bring the appeal.

50 I do not think it appropriate to refer this application to the judge who may hear a putative appeal ( a course which was open to me as submitted by Mr Sandbach).

52 Subject to hearing counsel, I propose to make the following order:

That the appeal against the orders of the Master of 30 November 2007 be dismissed, with costs.

[1] Section 109(2) of the Act.

[2] Affidavit of Anthony Klein sworn 27 November 2007 ("Klein's affidavit") - para 11.

[3] The legal nature of the arrangement is far from clear. Other entities were involved.

[6] Affidavit of Alex Di Blasi sworn 29 November 2007 ("Di Blasi affidavit") - paras 3-5.

[7] Exhibits "AD10" and "AD11" to De Blasi affidavit.

[8] It was effectively assumed by the parties for the purpose of this application that time for the appeal in respect of the jurisdictional application ran from the date of final order.

[9] Affidavit of De Blasi of 23 January 2008 (De Blasi supplementary affidavit)

[10] Supplementary affidavit of De Blasi - para 5.

[11] On the basis of a "Clearly inappropriate forum" see: Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538; Regie National des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491.

[14] Unreported 19 August 1997 at page 12.

[15] [2000] VSC 549 at paras 122-150.

[18] Di Blasi - further affidavit of 23 January 2008 - para 68 (a separate affidavit to the supplementary affidavit)

[19] Di Blasi further affidavit of 23 January 2008 - paras 24 and 25.

[22] In effect the Act now precludes an appellant from pursuing both avenues of appeal: s.83(2).

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