HER HONOUR: Mr Franz Boensch brought proceedings in the Local Court after his vintage Mercedes Benz, a 1969 300 SEL, was hit by a garbage truck. The company that owned the truck admitted liability for the damage caused but there was a significant contest in the local court as to the quantum to be awarded.
Mr Boensch's case was that he had purchased the vehicle for $14,000, although it remained registered in the name of the vendor. He claimed to have undertaken significant modifications and improvements to the vehicle which he said made it exceptionally rare, one of six in the world, making it a show piece of great interest to vintage car enthusiasts and valuable to him for the flow-on income that generated for his company, which imports genuine parts needed for such vehicles. In proceedings in the Local Court, Mr Boensch claimed the sum of $100,000 for repairs and other losses plus interest and costs.
On 30 January 2017, the magistrate awarded the sum of $14,950. That finding reflected the midpoint between the assessments of two experts called by the plaintiff and the defendant respectively. A substantial component of the claim, which was not allowed, was the cost of repairing damage to the axle of the vehicle. A combination of delay in the identification of that damage, adverse credit findings against the plaintiff and acceptance of the defendant's expert evidence as to the likelihood of the axle damage occurring as a result of the mechanism of the collision with the garbage truck left the magistrate unable to be satisfied on the balance of probabilities that the axle damage was caused by the truck.
A summons appealing against the magistrate's decision was filed in this Court on 21 February 2017. An appeal as of right lies on a question of law pursuant to s 39 of the Local Courts Act 2007 (NSW) but only with leave on a question of mixed law and fact. The Court has no authority to entertain an appeal on a question of fact alone.
The summons alleges misapprehension of the facts and law "which amounts to jurisdictional error" (ground 5). Grounds 6 to 13 similarly allege errors framed in the language of jurisdictional error but which, upon analysis, appear rather to assert error of fact.
That is not necessarily fatal to the appeal but it seems likely, at best for Mr Boensch, that the grounds specified would, at any final hearing, require leave under s 40 of the Local Court Act and, at worst, that pure questions of fact are raised as to which, as already noted, this Court has no authority to entertain an appeal.
Further, on any ground requiring leave, the plaintiff faces the significant additional hurdle of the magistrate's findings as to credit. The magistrate said at [21] of the judgment:
"Generally in the witness box under cross examination the plaintiff often avoided answering questions directly or giving clear answers. In relation to issues as to the Safety Inspections Certificates he signed, his directorship of Go Green Systems Pty Limited and when repairs were commenced on the vehicle he only answered the questions truthfully when he was backed into a corner by the evidence."
That finding, in turn, informed her Honour's conclusions as to the recoverability of the cost of repairing the damage to the axle.
In those circumstances, the defendants sought security for costs. An order for security was in due course made by Registrar Bradford, on 23 June 2017. The registrar made orders in the following terms:
"1. Pursuant to r 50.8 the plaintiff is to provide security for costs to the defendant in the sum of $29,000.00, which is to be paid by two payments.
2. The first payment of $14,500.00 is to be paid within 28 days of today's date, that is by 21 July 2017.
3. The second payment of $14,500.00 is to be made within six (6) weeks of the allocated hearing date.
4. Such security is to be provided by way of:
(a) Bank Guarantee from a major Australian Bank in a form acceptable to the Prothonotary of the Supreme Court, or
(b) money paid into Court; or
(c) such other form of security as may be agreed between the Plaintiff and Defendant in advance of the date for provision of that security.
5. Until the provision of security for the first of the amounts referred to in order 2, the proceedings be stayed. If the second sum ordered in order 3 is not provided on the date specified then the proceedings shall be stayed until such sum is provided.
6. The defendant has liberty to apply to increase the amount of the security referred to in order 1, should that amount prove inadequate, and liberty to apply in relation to any orders sought for the ongoing conduct of the proceedings if any one or more of the amounts ordered by security is paid at a later date than provided for in orders 2 and 3."
The plaintiff has not paid the amount ordered. Instead, on 19 July 2017, he filed a notice of motion seeking to have the registrar's orders set aside. He did not seek a stay of those orders but, as he has been unrepresented in the proceedings, the defendant does not take any point on that basis.
The motion has been listed for hearing three times, albeit that the third listing was tentative, as I will explain. First, on 21 September 2017, Mr Boensch was ordered to file and serve his written submissions on the motion by 31 October 2017. That did not occur. On 4 December 2017 the respondent to the motion, the defendant in the appeal, filed its written submissions. The motion was then listed for hearing on 12 December 2017 but was adjourned due to the plaintiff's ill health.
At that time the plaintiff advised the Court that he had been hospitalised with a septic infection to his leg. He has subsequently provided medical evidence to support that claim.
On 15 February 2018, the plaintiff was again ordered to serve written submissions, this time by 11 May 2018. Again, no submissions were filed. The motion was listed for hearing on 1 June 2018. The plaintiff again sought an adjournment of the hearing, again relying on medical evidence. It should be noted that the medical evidence in support of the application for the vacation of the second hearing date is strong. The plaintiff, it appears, was the victim of a serious assault and has suffered significant injuries and sequelae as a result of that assault. In any event, the 1 June hearing date was vacated by Fagan J, who then made orders requiring the plaintiff to file and serve any written submissions by 16 July 2018. Dependent upon compliance with that order, the motion was listed for hearing on 30 August 2018.
The plaintiff did not file any written submissions by 16 July 2018. It follows that, technically, in accordance with the orders of Fagan J, he was not entitled to have the motion heard on 30 August 2018, although that date was reserved as a hearing date for the motion.
The matter came before me that day (from memory, as duty judge). On that occasion Mr Woods of counsel sought leave to appear as amicus curiae in the interests of Mr Boensch. He relied on an affidavit sworn by Mr Boensch that morning seeking to extend the time for compliance with the orders of Fagan J until mid-January 2019 and asking that the motion to set aside the registrar's decision not be listed for hearing until a date after then.
I was not persuaded that it was appropriate to adjourn the matter for so long, for a number of reasons.
First, the medical evidence, as I have indicated, certainly revealed that Mr Boensch suffers from a number of medical difficulties, but it was not established that he could not have addressed the basis for the application to have the registrar's decision set aside, at least in writing. His failure to do so is to be contrasted with the level of energy he has committed to outlining his medical condition in the detailed affidavit sworn 30 August 2018 in support of the application for an extension of the time for compliance with the orders of Fagan J. I should acknowledge that it was stated in that affidavit that the plaintiff had not been able to prepare it himself and had obtained the assistance of a friend. Even so, in my view, the same level of energy could have been applied employing the same assistance to simply getting on with the task of addressing the substantive motion.
Secondly, the registrar's decision is a decision on a matter of practice and procedure, review of which would ordinarily require the demonstration of error or a material change of circumstances. Mr Lloyd, who appears for the defendant, addressed that issue on the last occasion, noting that the relevant principles are stated in the decision of Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369.
Thirdly, I have regard to the fact that the dismissal of the motion would not finally determine the plaintiff's rights, because it is still open to him to pay the security, in circumstances of the defendant's very fair concession to which I have already referred.
For those reasons the order I made on the last occasion was not to extend the time for compliance with the orders of Fagan J but instead to indicate that I would determine the motion after giving the plaintiff a further opportunity to put submissions on. The order I made was that the plaintiff have until close of business on 11 September 2018 to put on any submissions in support of the motion. I then listed the matter today for oral judgment on the basis that, if the plaintiff wished to appear to address any of the matters raised in the submissions today, he would be given leave to do so.
No written submissions were received but this morning Mr Evatt of counsel has sought leave to appear as amicus curiae for Mr Boensch and has made substantive submissions addressing the motion to set aside the registrar's decision. I should record that Mr Evatt has done so in circumstances of some difficulty, having been briefed only very recently and, as already indicated, appearing only as amicus curiae, with the leave of the Court. Mr Evatt nonetheless ably acquitted himself in addressing the issues raised by the motion and it is appropriate to record and consider those submissions.
Mr Evatt noted that in considering the defendant's application for security for costs the registrar was required to have regard to the requirement of r 50.8 of the Uniform Civil Procedure Rules 2005 (NSW), which provides that in the case of an application for security for costs of an appeal the Court is not to order security unless there are "special circumstances". The registrar did have regard to that rule. He accepted that impecuniosity was established but proceeded to consider whether there were special circumstances consisting in the alleged hopelessness of the appeal contended for by the defendant.
The central proposition argued by Mr Evatt today was that the registrar's assessment of the strength of the appeal was erroneous and, accordingly, that the conclusion that the requirement for special circumstances was met was also erroneous.
Mr Evatt accepted that the appeal may face difficulties but submitted that it would be wrong to characterise it as hopeless. Mr Evatt also noted that if the order for security for costs stands, that would in effect finalise the matter at this stage, depriving the plaintiff of a determination of the appeal on its merits as he is unable to comply with the order. Mr Evatt noted that impecuniosity and stultification under the general test for security for costs is never regarded as being sufficient. So much may be accepted.
In those circumstances, two issues need to be considered. The first is the appropriateness of finding that it is enough to satisfy the special circumstances test to conclude that an appeal is hopeless. The second is to consider the correctness of that conclusion which the registrar did reach.
As to the first, Mr Lloyd has drawn my attention to the decision of Ballard v Brookfield Australia Investments [2012] NSWCA 434, which indeed he relied upon in the argument before the registrar and which was cited in the registrar's decision.
In that case at [16] there is a convenient collection of the principles concerning the concept of special circumstances within the meaning of the rule. The principles were stated as follows:
"1. No order for security should be made in the absence of special circumstances.
2. Consideration of what may constitute special circumstances should not be fettered by some general rule of practice.
3. Impecuniosity without more will usually be insufficient.
4. An order may be appropriate if the appeal is shown to be hopeless, unreasonable or of a harassing nature.
5. Where a bone fide and reasonably arguable appeal would be stifled by an order for security such an order should not usually be made, and
6. The subject matter of the appeal, including an issue as to the liberty of the individual, or a public interest may provide a reason for not imposing a security order which would stifle the continuation of the appeal."
There is no suggestion in the present case of any issue of public interest such as to invoke the application of the sixth principle, nor indeed, obviously, of the liberty of the individual. The real issue in the present case is whether the appeal is shown to be hopeless or unreasonable or, conversely, whether it is shown to be a bone fide and reasonably arguable appeal which will be stifled by an order for security.
As to stultification, in the proceedings before the registrar the evidence was assessed to be "far from convincing". Further evidence has been put before this Court going to the issue of stultification. As Mr Lloyd reminds me, that evidence was admitted on the application for an extension of the time for compliance with Fagan J's orders, and not in respect of the present application so as to demonstrate a change of circumstances of the kind contemplated in Tomko v Palasty (No 2). However, it is convenient and possible to determine the present application on the assumption that there may well have been a change in Mr Boensch's circumstances such as to produce the result that he might be unable, or find it difficult, to meet the order for security.
I am content to determine the application on that basis because, in my assessment, this application does fall within principle 4 set out above. Mr Lloyd's submissions have persuaded me, as they persuaded the registrar, that the appeal is hopeless or unreasonable and that its prosecution is likely to generate substantial costs which, in the circumstances, it appears are likely to be unrecoverable.
My reasons for reaching that conclusion have effectively already been recited in my explanation of the circumstances in which the defendant brought its application for security for costs in the first place, that is, that the grounds of appeal, while framed in the language of jurisdictional error, upon analysis assert errors of fact on the part of the magistrate. Further, it is clear that the appeal will necessarily have to challenge her Honour's finding as to credibility, even if the plaintiff is successful in persuading the Court that the errors alleged are questions of mixed fact and law rather than pure questions of fact. I am not persuaded that any error is shown in the registrar's conclusion as to the strength of the appeal. Accordingly, I am satisfied that the notice of motion must be dismissed.
I do think, having regard to the unusual history of this matter, that the plaintiff should now be given a further opportunity of equal length to that originally allowed in the registrar's orders to make the first payment for security contemplated by those orders. Mr Lloyd did not oppose that course.
For those reasons the notice of motion filed 19 July 2017 is dismissed. I order the plaintiff to pay the defendant's costs of that motion. The time for making the first payment contemplated by order 1 made by the registrar on 23 June 2017 is extended to 28 days from today's date, that is, 11 October 2018. If the first payment of $14,500 is not paid by close of business on 11 October 2018, the proceedings are dismissed. If the payment is made by that date the parties have leave to approach the list clerk to obtain a hearing date for the appeal.
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Decision last updated: 05 November 2018