CAMERON v QANTAS AIRWAYS LTD

14 October 2009 Rita CAMERON v QANTAS AIRWAYS LTD Judgment 1 JUDGMENT of THE COURT delivered by BASTEN JA: This was an application for leave to appeal against a judgment of the District Court delivered by McLoughlin DCJ on 14 April 2009. 2 The issue in dispute concerns a consent judgment made by the District Court, based on terms of settlement of a dispute between the applicant and the respondent. This matter has a history, which need not be recounted, but it has been before this Court on a previous occasion. The applicant originally sought to challenge that consent judgment by way of application for leave to appeal to this Court, which was dismissed on 14 October 2008: see Cameron v Qantas Airways Limited [2008] NSWCA 275. In the course of dismissing that application, the Court noted that there was an alternative procedure available which might allow a consent judgment to be challenged by way of separate proceedings. 3 The matter then went back to the District Court. On 11 December 2008 the applicant filed a notice of motion which alleged that the consent orders had been made under extreme pressure and should be set aside. The motion came before McLoughlin DCJ, who had been the trial judge. 4 The procedure by which the matter came back before the District Court was irregular. No separate proceeding was instituted seeking to set aside the agreement and the orders which followed. Precisely how the basis for the relief sought was to be supported did not appear from the notice of motion. Affidavits were filed on behalf of both parties in support of the contentions they sought to make in respect of the motion. In particular the applicant filed at least one affidavit and the respondent filed affidavits from both their own solicitor and from the solicitor and barrister who had appeared for the applicant at the trial and who had negotiated in respect of the settlement agreement. The applicant filed one or more affidavits in reply. Of these affidavits, only one was put before this Court on the hearing of the leave application. Each was said to address the allegations of duress or undue influence sought to be made good by the applicant. 5 Counsel for the respondent accepted that there was an alternative means of proceeding and noted that such an approach had been identified by this Court in Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691. He noted that it might not be the only way of proceeding and referred to two other decisions which seemed to support the possibility, at least where there was no allegation of fraud, of the matter proceeding by way of notice of motion as had been done in the present case. He referred to the comments of Sheller JA in Logwon Pty Limited v Warringah Shire Council (1993) 33 NSWLR 13 at 30, and to the more recent decision of White J in the Equity Division in Across Australia Finance Pty Ltd v Bassenger [2008] NSWSC 799 at [20] to [22]. We shall return to the nature of the proceedings shortly. 6 His Honour's judgment of 14 April 2009 set out the terms of the notice of motion and referred to the evidence put on by the applicant in what his Honour described as "extensive affidavits". He noted that the affidavits contained "allegations" made against the solicitor and barrister who had been acting for her at the trial. The affidavits concerned the pressure she was put under on 1 February 2008 when settlement was reached. 7 His Honour also noted an allegation that there had been collusion between her former lawyers and the solicitor for Qantas. He rejected the suggestion that there was collusion on the basis that there was "no evidence" to support the allegation. Without further comment about the applicant's evidence, he then noted that both her former solicitor and former barrister had given evidence that there was no duress, and that he accepted their evidence as to the manner in which the settlement was reached. 8 His Honour accepted further that it may be available to the applicant to have the judgment set aside on the basis of an application made under Part 36, rule 15 of the Uniform Civil Procedure Rules 2005 (NSW). He assumed that such relief was available in that way without finally determining the question. 9 His Honour then stated (at pages 3-4) that the view he had come to, which we take to be the acceptance of the evidence of the former lawyers for the applicant, was "confirmed" when one read the transcript of remarks made by the applicant when the consent judgment was entered. He then set out those remarks, which had been placed before the Court by an affidavit of the respondent's solicitor, annexing a portion of the trial transcript. 10 His Honour accepted that the applicant had indicated she was not happy with the compromise but that she had said in the course of those remarks that her barrister had "been really good and so has my solicitor". The remarks went somewhat further than that, but his Honour appears to have inferred that the applicant had affirmed at the time of the settlement that she had no complaint about the conduct of the barrister and the solicitor in relation to the settlement that had just occurred. His Honour said that it was clear that she had had an opportunity to complain "against both of her legal advisers should she at that time have felt duress. She did not." 11 The process by which the relevant factual conclusion was reached may not have been fatally flawed but it is clear that there are a number of potential problems with the approach taken. His Honour disbelieved the account which the applicant had given of how the settlement was reached. There are three difficulties in relation to that conclusion which was not in terms identified in his reasons for judgment. First, the applicant was not cross-examined on her affidavits. Counsel for Qantas has said that that was by no means necessary because she had had the opportunity to put on an affidavit in reply to the response to her allegations which the lawyers had set out in their affidavits. Nevertheless, there were matters, such as the inferences available from her statement when the consent orders were made, which arguably should have been put to her. 12 Secondly, his Honour appears to have relied upon what had happened at the trial. It is clear from the transcript that when the matter first came back before him he had no immediate recollection of the proceedings. Later, he recalled that he had been the trial judge and remembered it as a case in which the respondent had shown a video recording of the applicant walking up steps, presumably so as to challenge her evidence as to the extent of her disabilities: Tcpt, 9/4/09, p 2. After some further discussion as to the process which was to be undertaken, his Honour asked the applicant if she wanted him to disqualify himself from the matter as he had been the trial judge. The applicant said: "Your Honour, I actually do not know what to say. All I am looking for is justice and I just want the--"

She was apparently cut off, his Honour repeating the question, "Do you want me to disqualify myself as the trial judge?" The applicant replied, "No, your Honour." 13 It is not entirely clear from that exchange that the applicant knew or understood the basis upon which the question was being asked. It might be inferred that, having recounted the incident involving the video, his Honour had realised that he had formed an impression of the applicant and that it might not be appropriate that he hear the fresh application involving a dispute in which her credit would be in issue. However, he did not explain that to the applicant, who was not represented at the time, and there must be a real concern as to whether he may have allowed his views of her evidence, formed at the trial, to influence his rejection of her evidence, un-cross-examined, on the motion. 14 The third difficulty which arises in this context is the form of the reasons, as outlined above. Although he accepted the explanation from her former lawyers, he gave no reason for rejecting her account and, indeed, did not expressly state that he was rejecting her evidence. 15 There may be answers to each of these concerns but they are not in the material before this Court. There is sufficient to give rise to a concern about how the matter proceeded and was determined to warrant the grant of leave to appeal. 16 It may be noted that this kind of issue usually arises where a client proceeds against her former lawyers directly. In a case such as this the applicant may need to show, not merely that there was unconscionable conduct on the part of her lawyers, but also that the respondent was on notice of that. The absence of pleadings may have obscured the full extent of the issues to be proved. In any event that issue was not presented for determination in the District Court because the applicant failed at an earlier stage, namely, in relation to her own evidence as to what had occurred with her lawyers. 17 In those circumstances there will be a grant of leave to appeal. [Discussion followed in the course of which counsel for the respondent indicated his client's consent to the following further orders:]

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