Borcherdt v Scott

Supreme Court of NSW|2013-03-26|Before: Adamson J

Introduction 1The plaintiff appeals to this Court pursuant to s 39 and s 40 of the Local Court Act 2007 (the Act) against a decision of Magistrate Heilpern (the Court below) to dismiss his claims against the defendant. 2In so far as the plaintiff raises a question of law he has a right to appeal to this Court: s 39 of the Act. In so far as the plaintiff's appeal raises a question of mixed law and fact or concerns an order for costs he requires leave to appeal: s 40 of the Act.

The Grounds of Appeal: the conduct of the Court below during the hearing 17The plaintiff raised several matters which, individually and collectively, are said to amount to a denial of procedural fairness. Because of the number and variety of such allegations it is necessary to consider the whole transcript of the hearing before the Court below and the affidavits and other evidence tendered in order to assess the allegations, which I have done.

Reading affidavit evidence in advance of the hearing 18The plaintiff contended that prior to the hearing the Court below read some of the evidence that had already been filed and that this significantly prejudiced the Court below against the plaintiff. The plaintiff instanced the affidavit of Glen Scott dated 26 September 2011 to which was annexed a letter dated 5 June 2009 from the ATO to the plaintiff and Glen Scott (the ATO letter) which reported on an audit conducted of the partnership and contained the following passages: "We have decided that you have overstated your EGCS [energy grants credit scheme] and FTC [fuel tax credit] for the period. We have decreased your FTC entitlement by $71,004 and decreased your EGCS claims by 48,440 litres and $18,476.70. . . . The net amount payable as a result of the audit is $89,480.49 plus penalties of $67,110.34 plus any applicable general interest charge. You will receive assessments reflecting the adjustments and penalty notices shortly." 19The Court below admitted the letter in evidence, over the plaintiff's objection. 20Efficient use of court time makes it desirable, in some instances, that a court acquaint itself with proceedings before the commencement of the hearing. This is particularly so when the court is a Local Court where transcript is generally not available until six weeks after a hearing and reasons for decision are commonly given ex tempore at the conclusion of the hearing. Reading material in advance maximises the utility of Court time and enhances the prospect that the judicial officer can given reasons within the time allocated for the hearing of the matter. Furthermore, the Court below would have had to read the letter in any event prior to ruling on the plaintiff's objection to it. No error has been established.

The Court below did not permit the issue of "cross-claims" to be dealt with in advance of the hearing 21The plaintiff submitted that the Court did not permit "cross-claims" and that this impaired his right to a fair hearing. The transcript records that the plaintiff raised the issue of cross-claims early on the first day of the hearing. The Court below noted that none had been filed and required the plaintiff to call his first witness. There is nothing remarkable about this course. Nor did it involve a breach of natural justice. 22It became apparent in the hearing before me that the plaintiff was under the misapprehension that the word cross-claim was synonymous with a positive allegation of fact made in the defence. The plaintiff then sought to draw from the proposition in Young v Queensland Trustees Limited [1956] HCA 51; 99 CLR 560 that when a loan is admitted, the defendant bears the onus of establishing payment, the further proposition that the defendant bore the onus of establishing every allegation of fact in the defence, including payment, although the loan was disputed. The first proposition is good law. The second proposition is incorrect and does not follow from the first. 23However, even had the Court below been satisfied that the plaintiff lent money to the defendant, the Court below found that the defendant had discharged the onus of proving that the requisite quantity of logs had been supplied and that therefore the "contra" deal had been satisfied. 24Many of the plaintiff's submissions were based on this misapprehension. I reject the plaintiff's submissions. In circumstances where the allegation that the plaintiff had lent money to the defendant was disputed, he bore the onus of proof, as the Court below correctly found. The Court below found, as a matter of fact, that he had not discharged it.

The so-called "letter of agreement" dated 29 August 2004 25The plaintiff submitted that the Court below did not "correctly understand" that this letter covered the Westpac and Autocar loans. As referred to above, the Court below was not satisfied that the defendant ever signed the letter or that it was prepared at or about the date it bore. This factual finding involved neither a question of law nor a mixed question of law and fact. 26Furthermore it was not one of those rare cases adverted to in Fox v Percy [2003] HCA 22; 214 CLR 118 (Fox v Percy) where the findings of the tribunal of fact are either "glaringly improbable" or "contrary to compelling inferences in the case". Accordingly I do not propose to disturb the finding, which in any event, appears not only to have been open, but also the correct one, having regard to the impression the Court below formed of the credibility of respective witnesses, which were, as the reasons show, only partly, if at all, based on demeanour.

The Credibility of witnesses 27The determination of the credibility of witnesses is pre-eminently a matter for the Court below, which has heard and seen the witnesses. The plaintiff, in his detailed written submissions, outlined in considerable detail the reasons why he contended that the Court below incorrectly assessed the witnesses. It is apparent from its reasons that the decision of the Court below was affected by its impression of the witnesses and the advantage it enjoyed in seeing and hearing them. This advantage is entitled to respect: Jones v Hyde [1989] HCA 20; 63 ALJR 349 at 351-352; Abalos v Australian Postal Commission [1990] HCA 47; 171 CLR 167 at 176 and Devries v Australian National Railways Commission [1993] HCA 78; 177 CLR 472 at 479, 482-483. 28The plaintiff drew my attention to [30] and [31] in Fox v Percy where the High Court warned of the dangers of too readily drawing conclusions from the appearance of witnesses and their demeanour. There is, in my view, no indication that the Court below was particularly influenced by the demeanour of the witnesses as distinct from the substance and inherent logic of what they were saying and the concessions they were prepared to make. 29The plaintiff has not identified any question of law or mixed question of law or fact arising from the assessment of witnesses by the Court below.

Alleged denial of procedural fairness in the course of the hearing 30The plaintiff made a series of allegations which he submitted, individually and together, amounted to a denial of procedural fairness. These allegations raise questions of law and accordingly fall within an appeal under s 39 of the Act. 31The principal complaint was that the Court below imposed "severe" time restrictions and did not allow sufficient time for examination and cross-examination by the plaintiff. I do not consider there to be any substance to this ground. 32The plaintiff did not disagree with Magistrate Linden's estimate of two days when the matter was originally stood over to be allocated a hearing date. He did not demur from the estimate of the Court below when the matter was set down that it would take "one day plus". At the commencement of the hearing the Court below said: "My general practice is to limit cross-examination of witnesses to 20 minutes. I can see that, in the case of both the plaintiff and the defendant, that time would be likely to need to be extended and so I would have a preliminary time for those of 40 minutes. If, when you come close to the 20 minutes or the 40 minutes, with respect to the plaintiff and defendant, you seek extra time you can do so and I will consider it at that time. But you should plan your cross-examination or any questions for those witnesses around those limits." 33The Court below was required by s 56, 57 and 58 of the Civil Procedure Act to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The proposed protocol set out above was designed to achieve that end. As it transpired, the Court below at no stage refused a request by the plaintiff for extra time, although the possibility of such application being made was specifically adverted to. The plaintiff at times sought, and was granted, extra time. He was granted extra time on two occasions in relation to the cross-examination of Glen Scott. 34The plaintiff called Glen Scott as his first witness and indicated that he would call Tim Scott as his second witness. The Court below counselled him against calling them in his case but the plaintiff was adamant that it would not disadvantage him to call Glen Scott first. The Court below permitted this to be done. 35The plaintiff submitted that the Court below "abruptly terminated" the cross-examination of Glen Scott. The transcript reveals that the plaintiff sought an additional five-minute extension and that when the five minutes were up, the Court below signified that the cross-examination by the plaintiff was at an end. The plaintiff then foreshadowed that he might wish to recall Glen Scott "in reply" the following day. The Court below said that such an application, either to adduce evidence in reply or for leave to re-open, would have to be made when the time came. Mr James, who appeared for the defendant, then cross-examined Glen Scott and the plaintiff asked questions which were technically in re-examination (the plaintiff having called Glen Scott as his witness). The Court below then terminated the re-examination on the grounds that it was repetitive. The Court below then excused the witness, but did not determine any application the plaintiff might make in the future to have the witness recalled. 36The plaintiff then proposed, as he had earlier foreshadowed, to call Tim Scott. Once again, the Court below counselled him against this course but the plaintiff was adamant that he needed Tim's evidence to establish his case. There was then an exchange, at the conclusion of which the Court below asked the witness to come to the witness box and, after the affirmation was made, asked the witness for his full name, address and occupation. Without demur, the plaintiff then started to ask Tim Scott questions. Although, as with Glen Scott, the questioning was technically examination in chief, there was no restriction imposed on the plaintiff's right to ask leading questions. 37The plaintiff sought an extension to continue his examination of Tim Scott. The Court below granted a five-minute extension. After the plaintiff had questioned Tim Scott for 45 minutes, the Court below asked him to finish. After some further time, the length of which is not revealed on the transcript, the plaintiff began questioning the witness about a matter not in dispute and the Court below terminated the questioning. Mr James then cross-examined Tim Scott. The plaintiff did not seek to ask any questions in re-examination. 38In this Court the plaintiff submitted that the Court below variously: "intimidated and displayed animosity towards the plaintiff from the outset of the hearing" "assumed duties normally performed by the advocate for the Defence and intervened excessively in the examination and cross-examination, often in a leading manner" "failed to appropriately control the conduct of witnesses" "did not deal in a fair and just manner with the admitting of evidence" "chastised, without cause, the Plaintiff in front of the Defence witnesses" "characterised, without cause or evidence, the Plaintiff as "petulant" in front of Defence witnesses" "characterised without cause or evidence, the Plaintiff as 'throwing temper tantrums'" 39In my view there is no substance to any of these grounds. The Court below had a duty to conduct the proceedings fairly and expeditiously. The transcript reveals that the Court below, in a commendable way, sought to assist the plaintiff, within proper bounds, to present his case in a way that conformed with orthodox procedure. The Court below did not act in such a way as to disadvantage the plaintiff when he made forensic decisions which might not have been in his best interests and might not have been made had he been represented. The Court below was entitled to attempt to control the plaintiff's behaviour when he became intemperate. I do not consider there to be any error of law shown in the way the Court below did so. Indeed the Court below was, in my view, appropriately restrained in its dealings with the plaintiff. 40The plaintiff also relied on a map which was annotated by Tim Scott while he was in the witness box in the Court below to indicate the locations from which the logs had been taken from the defendant's property. The Court below referred to the map in its reasons for decision since it had been referred to in evidence, although the map had not been tendered. The plaintiff submitted that he had been so rushed by the Court below that he had not tendered the map and that this was another instance of denial of procedural fairness. 41I do not consider that the omission by the plaintiff to tender the map gives rise to any inference of denial of procedural fairness. No doubt it is difficult for non-lawyers who appear in Court to ensure that all relevant matters are attended to in the course of a hearing. However, the plaintiff is an educated, articulate man who showed himself to be able to deal with significant numbers of documents and issues. On later reflection he may have regretted omitting to tender the map. There is no indication in the transcript that the Court below would not have permitted the map to be tendered. Furthermore, the map showed locations of logs and the number of loads of logs from each location. This was the subject of oral evidence which was accepted by the Court below. The specific locations from which the logs had been harvested was, at best, a peripheral matter, since it was the number of loads which was of relevance.

Alleged error of law arising from the alleged failure to make appropriate allowance for the fact that the plaintiff was unrepresented 42The plaintiff ultimately submitted that the Court below erred in law in not making appropriate allowance for his being unrepresented. As will be apparent from my reasons above, I consider that the Court below made significant allowances for the fact that the plaintiff was unrepresented, including that he did not require compliance with the rule in Browne v Dunn (1893) 6 R 67 (HL) (Browne v Dunn). The Court below had, however, no duty to protect the plaintiff from himself. For example, having warned the plaintiff of the risks associated with calling a witness whom the other side proposed to call, the Court below was not obliged to prevent the plaintiff from disregarding the warning. 43The plaintiff submitted that the Court below did not properly apply the principles applicable to unrepresented litigants in the bench book published by the Judicial Commission of NSW. The gist of the plaintiff's submissions is that the Court below ought to have given him favourable treatment because he was unrepresented. He did not articulate in what way the Court below failed to apply such principles, except to submit in a general way that the Court below ought not have required the parties to follow the orthodox order of examination, cross-examination and re-examination. 44For reasons elsewhere given, there is no substance in this ground. The Court below owed a duty to accord both parties a fair hearing and in my view it did so.

Alleged errors arising from the dispute with the ATO and the AAT and Federal Court proceedings arising from the dispute 45The substance of the ATO letter is set out above. The plaintiff sought administrative review in the AAT of the ATO's decision as expressed in the letter (the objection decisions). The objection decisions under review were affirmed by the AAT: RJ Borcherdt and GP Scott trading as Nymboida Native Timbers and Commissioner of Taxation [2011] AATA 939 on the basis that the AAT was not persuaded that the Commissioner's decision was excessive or should have been made differently. 46The plaintiff informed me from the Bar table that he had appealed to the Federal Court from the decision of the AAT. Such an appeal is limited to questions of law: s 44 Administrative Appeals Tribunal Act 1975 (Cth). After a hearing on 6 February 2013 the Federal Court reserved its decision. No judgment has yet been delivered. 47The plaintiff submitted that since no assessment had issued in relation to the objection decisions, there was no "debt" owing by the partnership and that therefore the Court below was in error in finding as follows: "What is important about the AAT proceedings is . . . that there is evidence that there is indeed a huge debt hanging over the head of . . both the plaintiff and Mr Glen Scott as a result of the way the Tax Office has treated certain items that they are obliging the partnership or the partners jointly and severally to pay." 48Glen Scott did not return the goods which were partnership property because of the amount which the ATO considered to be owing to it by the partnership, which had been the subject of an unsuccessful challenge by the plaintiff in the AAT. The Court below found, relevantly: "What is clear is that Glen, who was a partner, has a debt of $160,000 hanging over his head. That, of course, is the reason why he did not want the property taken from his father's land and being returned to the plaintiff lest he have to sell it or claim an interest in it vis-à-vis the tax debt. . . Glen's evidence at the AAT that he has no claim on the property I have already dealt with. I repeat again that in my view he quite clearly was stating an interest in that property now and he was prepared to walk away from the partnership if there was no debt but given that there is a debt he wants to make sure the property stays there." 49Whether the liability of the plaintiff and Glen Scott was a present debt or a contingent liability that would not accrue until an assessment was issued which nominated a date on which the amount was due and payable was immaterial to the decision of the Court below, and also to Glen Scott's appreciation of his potential liability to the ATO. 50In addition, the plaintiff contended in his written submissions that: "His Honour . . . dismissed the evidence of Glen Scott to the AAT and did not deal appropriately with a request from the Plaintiff to tender relevant sections of the AAT transcript." 51In this Court the plaintiff tendered the transcript of the AAT proceedings and contended that it was relevant material on which he was prevented by the Court below from relying and that his amounted to a denial of procedural fairness. The plaintiff contended that Glen Scott had admitted in the AAT proceedings that his father, the defendant, was part of the partnership. The plaintiff submitted that he wanted to put these matters to Glen Scott in the Court below but was denied the opportunity. This matter has already been dealt with in connection with the way in which the matter was heard. The transcript of the proceedings in the Court below establishes that the plaintiff drew Glen Scott's attention to the evidence he had given in the AAT and questioned him about it. Although it was examination in chief it was conducted as if it were a cross-examination. The plaintiff read out passages from the transcript and obtained Glen Scott's agreement to what had occurred in the AAT. 52In any event, the plaintiff put such matters to the defendant. No Browne v Dunn point was, or indeed could, in my view, have been, taken as to whether he should have put them more fully to Glen Scott. 53The transcript also reveals that the plaintiff put matters concerning a response, which was apparently written on behalf of Glen Scott by a Ms Hunter in response to the ATO letter. Glen Scott said that he did not know if he had seen a letter before. The plaintiff then continued to cross-examine him about the letter, Mr James then objected and the Court below noted that the plaintiff was: "well and truly past the additional 10 minutes" 54The plaintiff then sought, and was granted, another extension of five minutes but moved to another, unrelated, topic. 55For these reasons I do not consider the plaintiff to have been denied the opportunity to put these matters to Glen Scott, since he availed himself of the opportunity that was afforded to him and did not seek any further opportunity. He did not seek to tender the AAT transcript. Accordingly no denial of procedural fairness has been established.

Alleged discrepancy between the draft amended defences in respect of which leave was granted and the amended defences which were filed 56Ultimately the defendant relied on defences which were not in identical terms to the drafts in respect of which leave was granted. The difference was that the drafts concluded as follows: "the plaintiff is statute-barred from recovering any of the said amounts advanced by the plaintiff to the defendant prior to 22 June 2005 by reason [of] section 14 of the Limitation Act 1969" 57By contrast, the filed defences had the following additional words after the passage set out above: "and the cause of action in respect thereof [was] extinguished by reason of section 63 of the Act" 58The plaintiff submitted that the discrepancy was an error of law. No error of law arises by reason of this slight discrepancy. Not only did the additional words not add anything of substance, but the Court below did not dismiss the plaintiff's claim on the basis that they were statute-barred. His Honour's reasons, in so far as they refer to the limitation defence, were obiter dictum.

Alleged error of law arising from the misapplication of the Partnership Act 1892 59Rather than paraphrase the plaintiff's argument before me as to the issues relating to the partnership, I propose to set out a passage from his oral submissions before me: "My initial claim against Mr Scott, the defendant, is that the agreement for the funding of the D9 and the Auto Car and the Westpac loan was a direct agreement between him and me. However, their defence was that it occurred, in relation to the D9, that the agreement was between the defendant and the partnership. In respect of the Westpac and Auto Car Loans they say that the agreement was within the partnership. To counter those suggestions and that defence, I say that regardless of whether it was within - if in the first instance the agreement was between the defendant and the partnership, I'm still entitled to recover it from him being the only one that has a financial interest in the partnership after the other two partners left the partnership, the only one that is due any money from the partnership property." 60The plaintiff ran his case before the Court below on the basis that he, Tim Scott and Glen Scott were partners. He did not submit that the defendant was a member of the partnership. Nor did the plaintiff put his case on the basis that he was suing for the benefit of the partnership. His unequivocal submission to the Court below was that he was the sole member of the partnership remaining, the others having earlier left the partnership and that therefore he was solely entitled to the property and business of the partnership. His submission is encapsulated in what he said to the Court below as follows: "It follows that the property and the business of the partnership then vests with the only remaining partner, the plaintiff, effective 1 January 2008." 61The plaintiff supported his submission before me that he brought proceedings on his own account and on behalf of the partnership by reference to Russell v Commissioner of Taxation [2008] FCA 343; 168 FCR 330. 62The Court below was not satisfied that there was an agreement as alleged by the plaintiff between the plaintiff and the defendant. This question was one of fact to which the assessment of the credibility of witnesses by the Court below was central. There was nothing glaringly improbable about the findings of the Court below. The plaintiff has not persuaded me that the Court below was in error in making the relevant findings.

Alleged errors from the dismissal of each of the proceedings 63The basis of the dismissal of each of the plaintiff's claims is set out above. The plaintiff has failed to identify any error, whether of law, or mixed law and fact in the reasons for decision of the Court below.

Alleged errors arising from "veracity of business records" 64The plaintiff used the expression "business records" indiscriminately to describe documents, such as the so-called letter of agreement and documents which may properly be so described. In relation to business records, such as the bank statements of Westpac, the Court below indicated to the plaintiff that there was no need to tender the originals since photocopies had been tendered. I do not accept the plaintiff's contention that the transcript ought be read otherwise. The plaintiff's complaints about this process have no substance whatsoever. 65The plaintiff submitted that he would have tendered Bananacoast Credit Union statements had the Court below not prevented him. I do not read the transcript as containing any such prohibition since I do not consider that the plaintiff ever tried to tender them.

Alleged miscarriage of the discretion regarding costs 66In his written submissions, the plaintiff submitted: "His Honour erred by not taking into account, in the awarding of indemnity costs against the plaintiff, the legal authorities given in the Judicial Commission of NSW Civil Trials Bench books 8-0080 and 8-0090 as handed up by the Plaintiff during the hearing as to costs." 67In oral submissions before me, the plaintiff contended that the Court below ought not to have ordered indemnity costs because as at the date of the offers, 12 July 2011, he was not appraised of the full parameters of the defendant's case. The plaintiff made a submission in similar terms to the Court below, which rejected it. 68The plaintiff has not identified any basis on which the discretion of the Court below miscarried with respect to the costs orders.

Alleged error arising from use of notes made by the Court below in delivering reasons rather than a transcript of proceedings 69The plaintiff contended that the Court below erred in delivering reasons by reference to his Honour's notes made in the course of the hearing rather than waiting for the transcript of proceedings which the parties agreed would have been available within about six weeks of the conclusion of the hearing. 70The workload borne by Magistrates in Local Courts throughout New South Wales would become practically impossible if Magistrates were required to wait for transcript before giving reasons. With each day that passed the Magistrate's recollection of the witnesses and the way in which they had given evidence and the issues in the case would become fainter. The number of cases that Magistrates commonly deal with in a day, let alone in six weeks, would make the course proposed by the plaintiff not only practically impossible but also expensive and adverse to the dictates of justice. The Court below delivered an ex tempore judgment immediately upon the conclusion of submissions and within the time allocated for the hearing. This was an efficient and commendable course. There is no substance in the plaintiff's complaint on this ground.

Fresh evidence sought to be adduced by the plaintiff in the proceedings in this Court 71The plaintiff sought to adduce substantial "fresh" evidence in the hearing before me. I allowed the evidence subject to its relevance being established since I considered this to be a more efficient way of adjudging the force of the plaintiff's submission that he was unduly constrained by the time limits imposed by the Court below and was, accordingly, unable to adduce relevant evidence within the time allowed to him. 72The plaintiff has not persuaded me that the Court below imposed undue time constraints. He accepted before me that the two days allocated was sufficient for the hearing. He could not point to a single instance where any application he made for extra time was refused. 73Furthermore directions as to the filing of evidence by way of affidavit were made by the Court and complied with before the matter was set down for hearing. Had the plaintiff required more time to comply with those directions, he could have asked for more time and the matter would not have been set down. The plaintiff expressly disavowed the suggestion before me that he did not have sufficient time to prepare his evidence in chief.

Alleged bias or apprehended bias of the Court below 74The plaintiff's primary submission was that the ATO letter predisposed the Court below against him. He also submitted that the rulings of the Court below indicated that the Court was against him. I do not consider either of these matters supports any inference as to actual or apprehended bias. The remarks of the Court below from time to time in the course of the hearing which display some level of irritation with the plaintiff amount to no more than restrained and innocuous observations designed to preserve a courteous atmosphere in Court and curb such of the plaintiff's outbursts, which his Honour did not consider to be warranted. 75Further, the plaintiff made no application that his Honour ought recuse himself on the ground of actual or apprehended bias in the course of the hearing.

The plaintiff's submissions concerning appropriate orders 76The plaintiff contended, on the basis of Kostas v HIA Insurance Services Pty Limited [2010] HCA 32; 241 CLR 390, that, if I were satisfied that the Court below had erred in law or made an error of mixed law and fact, I could decide the proceedings in his favour and make consequential orders. This situation has not arisen because the plaintiff has not persuaded me that the Court below was in error. However, I do not consider this to be a case where I could make findings of fact based on the evidence in circumstances where I have not heard or seen the witnesses. It is not, however, necessary to decide this point.

Conclusion 77In my view the plaintiff's complaints about procedural fairness have no substance whatsoever. The matters referred to by him do not begin to justify any inference of apprehended or actual bias in the Court below, or to suggest that he was not given a fair opportunity by the Court below to present his case. 78The way in which the Court below conducted the hearing showed, in my view, a commendable concern for the interests of the plaintiff and the difficulties encountered by litigants in person.

Orders 79I make the following orders: (1) Appeal dismissed. (2) Costs reserved.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 April 2013

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