Ceil Comfort Insulation Pty Ltd & ors. v ARM Equipment Finance Pty Ltd & anor.

Supreme Court of NSW|2001-07-17|Before: Sully J, O'Keefe J

CITATION : Ceil Comfort Insulation Pty Ltd & ors. v ARM Equipment Finance Pty Ltd & anor. [2001] NSWSC 619 FILE NUMBER(S) : SC 11842/00 HEARING DATE(S) : 17 July 2001 JUDGMENT DATE : 17 July 2001

Ceil Comfort Insulation Pty Ltd Anthony John Iezzi PARTIES : Gabriel Iezzi ARM Equipment Finance Pty Ltd Corporate Acceptance Pty Ltd JUDGMENT OF : Sully J at 1

LOWER COURT Local Court JURISDICTION : LOWER COURT 1348/97 FILE NUMBER(S) : LOWER COURT Dives LCM JUDICIAL OFFICER :

COUNSEL : R. E. Dubler - Plaintiffs M. A. Bradford - Defendants SOLICITORS : Margaretic Solicitors & Barristers - Plaintiffs RAJ Lawyers - Defendants LEGISLATION CITED : Local Courts (Civil Claims) Act 1970 (NSW) Justices Act 1902 (NSW) CASES CITED : House v The King (1936) 55 CLR 499 at 504-505 Queensland v J L Holdings Pty Limited (1997) 189 CLR 146 DECISION : (i) Appeal allowed with costs; (ii) Judgment of Local Court set aside; (iii) Proceedings remitted to Local Court; (iv) Moneys paid into this Court in connection with orders made by O'Keefe J are to remain in Court pending further order; (v) Grant to the defendants before this Court, and pursuant to s 6 of the Suitors Fund Act 1951 (NSW), an indemnity certificate in respect of costs of the appeal

SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

11842/00 - CEIL COMFORT INSULATION PTY LIMITED & ORS v ARM EQUIPMENT FINANCE PTY LIMITED & ANOR

1 HIS HONOUR: By a summons filed on 9 July 2000 Ceil Comfort Insulation Pty Limited and John Iezzi and Gabriel Iezzi, as plaintiffs, seek relief as follows: "1. An order that the Judgment of His Worship Mr. Dives LCM, made on the 21st June 2000, in proceedings commenced in the Downing Centre Local Court and numbered 1348/97 be set aside. 2. An order that the matter be remitted to the Downing Centre Local Court for re-hearing. 3. Such further or other order as the Court may deem fit. 4. Cost, including the costs of the Local Court proceedings." 2 The defendants to the summons are Arm Equipment Finance Pty Limited and Corporate Acceptance Pty Limited.

3 The plaintiffs in the summons were the defendants in the Local Court. The defendants in the summons were the plaintiffs in the Local Court. It will be convenient, in what follows, to refer to the parties according to their standing before this Court. 4 As is clear from the terms of the summons, the proceedings before this Court are essentially proceedings by way of appeal from a decision of the Local Court exercising power pursuant to the Local Courts (Civil Claims) Act 1970 (NSW). Such an appeal to this Court is permitted by, and only in the terms provided by, s 69 of that Act. Put very simply, the right of appeal thus conferred by s 69 is limited, so far as is at present relevant, to an appeal upon the basis that the judgment or order of the relevant Local Court is "erroneous in point of law".

5 Section 69 (3) provides that the provisions of Part 5 of the Justices Act 1902 (NSW) are to apply, "to the extent to which they are applicable", to an appeal such as the present appeal. Part 5 of the Justices Act was recently amended in a number of very significant respects. The overall objective of the amendments, so far as is at present relevant, was to abolish the old procedure of an appeal to this Court by way of a case stated for the opinion of the Court by a Local Court Magistrate; and to replace that procedure by a simplified appellate procedure originating with the filing in this Court of a summons, and of such supporting documents as might be prescribed either by Part 5 itself, or by appropriate Rules of Court. 6 The elaborate provisions made by the re-fashioned Part 5 of the Justices Act deal with every imaginable practical consideration that might be thought to arise in connection with an appeal of the kind constituted procedurally by the re-fashioned Part 5; but with the exception, not insignificant for present particular purposes, of any definition of the nature of the appeal permitted to this Court by the combined effect of s 69 of the Local Courts (Civil Claims) Act as to jurisdiction, and of Part 5 of the Justices Act as to procedure. 7 In other words, it is moot whether the appeal thus permitted is an appeal in the sense of a hearing de novo; or whether it is, rather, an appeal in the sense more strictly understood: that is to say, an appeal which is to be decided by this Court upon, and only upon, the basis of the expressed reasons of the Local Court, and of such evidence as was presented in the Local Court. 8 Since Part 5 of the Justices Act itself makes no specific provision in that regard, it is necessary to attend with some care to the Rules of this Court respecting the institution and prosecution of appeals to which Part 5 of the Justices Act does in fact apply. 9 Section 106 of the Justices Act, itself forming part of Division 2 of Part 5, provides in terms that an appeal is to be made and conducted in accordance with the Rules of Court. Rules have been promulgated accordingly; and they constitute Part 51B of the Supreme Court Rules. Rule 7 of Part 51B provides for the institution of an appeal of the present kind by the filing of a summons that indicates, relevantly, the decision which is sought in place of the decision of the primary Court. Rule 8 of Part 51B provides for the subscribing to the summons, or for the filing with the summons, of what is described in the Rules as: "A brief but specific statement: (a) of the grounds relied upon in support of the appeal and, in particular, grounds upon which it is contended that there is any error of law; and (b) as to whether the appeal is from the whole or part only and what part of the decision in the ... (primary Court)." 10 Rule 9 of Part 51B provides that the plaintiff moving by means of the particular summons is to file, unless otherwise directed by this Court, an affidavit exhibiting: "(a) a copy of the transcript of the proceedings in the ... (primary Court), unless a transcript cannot be obtained in respect of proceedings of that type; (b) a copy of the reasons for decision in the ... (primary Court), unless the ... (primary Court) has not given, and does not intend to give, written reasons."

11 In a situation where the only practical guidance to be obtained is that afforded by the combined effect of Rules 7, 8 and 9 of Part 51B, it seems to me that the better view is that this Court should approach the hearing of an appeal brought properly to the Court pursuant to s 69 of the Local Courts (Civil Claims) Act, upon the basis, and only upon the basis, of the material that was in evidence in the relevant Local Court, coupled with the expressed reasons for its decision of that Local Court. I propose so to deal with the present appeal. 12 The Rule 8 statement filed by the plaintiffs in connection with the present particular appeal is a comparatively succinct statement of the intended grounds of appeal. It is convenient to reproduce it in full: "1. In or about early April 2000 an Application for Re-Hearing of Arbitrated Action was filed in the Downing Centre Local Court. 2. Mr. Luka Margaretic, a Western Australian Solicitor was instructed to appear at the hearing of the matter. Mr. Margaretic was informed by Ledlin Partners Business and Commercial Lawyers that the matter was set down for hearing on Monday 26 June 2000. 3. On 20 June 2000 Mr. Margaretic received a letter from the Plaintiffs' (as Defendants in this appeal) solicitors indicating that the matter had in fact been set down for hearing on Wednesday 21 June 2000 at 9.30 am and not Monday 26 June as was diarised by Mr. Margaretic. 4. As Mr. Margaretic was unable to attend at the hearing he briefed Mr. Eugene Gramelis from the Trust Chambers who duly appeared before His Worship, Mr. Dives LCM. 5. His Worship Mr. Dives LCM refused the Application and an Ex-Parte Judgment was entered in favour of the Plaintiffs. 6. Through no fault of any of the Defendants (as Plaintiffs in this appeal), judgment was entered against them jointly and severally. A grave injustice will be done if the Ex-Parte Judgment is not set aside so that the Defendants can put their defence. 7. It would be unjust for the Defendant to suffer Ex-Parte Judgment being entered against them through no fault of their own. 8. The Defendants as Plaintiffs in this appeal have not been afforded the right to be heard as a result of a procedural error made by their solicitor. 9. The Defendants rely on the authority of the State of Queensland v J. L. Holdings Pty Limited (1997) 189 CLR 146, that case management principles could not be used to prevent a party from litigating an issue which was fairly arguable and that a party should be permitted to raise an arguable defence provided any prejudice to other parties could be compensated by a costs order."

13 I am not sure that the grounds thus notified succeed in delineating in an appropriately precise way the points which seem to me in fact to call for consideration in connection with the resolution of the present appeal. There is, however, no suggestion that the way in which the appeal has in fact been conducted before this Court has occasioned any real prejudice by reason of any postulated deficiencies of expression in the Rule 8 statement. 14 All of those considerations being in place, it is relevant to take up, next, the course of proceedings in the Local Court; and the relevant reasoning of the learned Magistrate then presiding. 15 Put very simply, what happened can be summarised as follows 16 The claim by the present defendants against the present plaintiffs was listed for hearing on 21 June 2000 in the Local Court at the Downing Centre in Sydney. When the hearing commenced, the learned Magistrate was informed that there was an application by the present plaintiffs for the adjournment of that hearing. It was indicated to the Magistrate that the basis of the application was the erroneous noting in the diary of the plaintiffs' solicitor, (that solicitor not being the representative making the application for adjournment), of the hearing date. The learned Magistrate was informed that the hearing had been entered in the relevant diary as a hearing fixed for 26 June. It was put that two "key witnesses" were overseas, although it later transpired that they were not overseas but elsewhere in Australia. It was indicated that there had been an offer to pay the costs of the present defendants; and that such an offer met sufficiently any prejudice otherwise arising. 17 It was submitted that the only way, in practical terms, in which the proceedings could be heard on 21 June itself was on an ex parte basis; and that it would be a denial of justice to the present plaintiffs, in effect to force them into a situation where their rights were determined in an ex parte application. 18 It was indicated by the present applicants that the application would be opposed. The Magistrate asked for a brief explanation of the basis upon which the application for an adjournment was opposed. The Magistrate was told that the intended legal representative of the present plaintiffs was a practitioner who practiced out of Perth. It was put to the learned Magistrate that there had been late notification of the intended application for adjournment. Counsel for the present defendants thereupon made available to the Court a copy of a particular letter. Counsel expressed the view that "perhaps that letter should be tendered". It is not quite clear whether it really occurred to anybody, the learned Magistrate included, that if the letter was to be put forward upon any substantive basis, it would be appropriate to ensure that it had a proper status in that connection by marking it as an exhibit in connection with the contested application for adjournment. 19 Be that as it may, it is clear from a reading of the transcript that the letter was in fact handed to the learned Magistrate; and that its contents were read and considered by his Worship. There was handed to the learned Magistrate in the same way a second letter, which had been written by a firm of solicitors who were either acting, or had been acting, for the present plaintiffs, to the instructing solicitors for the present defendants. Once again, it is clear that the learned Magistrate did in fact receive the letter, and that his Worship did in fact read and consider its contents. 20 The first of those two letters was in the form of a facsimile communication addressed by the Perth-based legal representative of the present plaintiffs to the solicitor handling the proceedings on behalf of the present defendants. Formal parts omitted, the letter reads as follows: "I confirm receipt of two facsimile letters dated 20 June 2000 with attached Statement of Agreed Facts and Issues ("the documents") which were sent directly to my office in Perth, Western Australia. The documents were forwarded to me in Hobart where I am currently appearing as counsel before the Commission of Inquiry into The Death of Joseph Gilewicz. I further confirm that I spoke with you in relation to the matters detailed below; - I was briefed as counsel to appear in the matter listed above. My firm was not engaged in a general sense. - The hearing was mis-diarised by my secretary as commencing on Monday 26 June 2000. This was clearly erroneous. - My clients, including two key defence witnesses, made arrangements to travel to Sydney from Perth and Brisbane respectively in order to be present at the hearing on Monday 26 June 2000. - The error is not that of my clients who maintain they have a strong defence to your client's claim. In the present circumstances, it is patently clear that for you to attempt to obtain an ex parte judgment would be to deny my clients natural justice. That is, the right to have this matter determined by a court of competent jurisdiction. In particular, I refer you to the offer of my clients to pay your client's thrown away costs relating to the vacation of the hearing date. I realise that this delay is frustrating and can only apologise for this error. However, please be in no doubt that should you press for ex parte judgment, my clients shall immediately appeal the same using this correspondence in support of any application. As there is a clear understanding to reimburse your client's costs thrown away (as conveyed in my conversation with your Mr. Evans this morning), I am at a loss as to what prejudice your client would suffer by vacating the hearing date. To this end, I conclude by inviting you once again to seek your client's instructions with a view to vacating the hearing date by consent. If this is not the case, appropriate submissions will be made by counsel tomorrow morning. Should you have any queries, please do not hesitate to contact me on my mobile telephone number 041 99 22 907." 21 The date of that letter is 20 June 2000. 22 The second letter made available to the learned Magistrate was dated, also, 20 June 2000. It read, formal parts omitted, as follows: "Thank you for your facsimile received late yesterday enclosing the Notice to Produce. Please note that we have referred same to Messrs. Margaretic Morton, Solicitors and Barristers in Perth, who now act for the Defendants. We have been advised that Margaretic Morton are arranging for Counsel to attend at the Hearing scheduled for tomorrow morning. We are attending to the preparation and filing of a formal Notice of Ceasing to Act." 23 Those letters having been placed before the learned Magistrate, learned counsel appearing for the present defendants put to the Magistrate, - in effect, although not, it must be said, in precise terms, - the proposition that there might be reason to think that the real purpose of the adjournment application was not confined to a mere error in the notation of the hearing date in the relevant diary; but had at least something to do in a more general sense with the unpreparedness of the present plaintiffs to proceed, even on 26 June. This suggestion made to the learned Magistrate appears to have made some immediate impression upon his Worship. His Worship observed, - and, as will be seen, not for the last time, - that there was "simply nothing before me to substantiate the error that you say has befallen the attendance of (the Perth-based representative). Nothing as to confirming that necessary arrangement for example of the attendance of witnesses has been made in error for 26 June". 24 Counsel who was appearing for the present plaintiffs in connection with the adjournment application was placed, obviously, in something of a quandary by these observations of the learned Magistrate. It seems clear from a fair reading of the whole of the Local Court transcript, that the particular counsel had been briefed at fairly short notice, not to conduct the entirety of the hearing in place of the Perth-based representative, who remained professionally retained for that purpose; but, rather, for the more limited purpose of making the adjournment application. 25 It seems to have been assumed by all those representing the present plaintiffs that the learned Magistrate would be persuaded readily enough that there had been indeed some misadventure in the matter of the relevant diary notation; that the offer of costs was a genuine one and that the combination of those considerations would suffice to persuade the learned Magistrate readily enough that the interests of justice were compatible with the granting of an adjournment. 26 That is not the way in which matters developed. The learned Magistrate turned, rather, to an exploration of the proposition that certain procedural directions as to the filing and serving of witness statements and other documents had not been complied with by the present plaintiffs, as indeed they had not. There were some brief exchanges between the learned Magistrate and counsel then appearing for the present plaintiffs; and they culminated in an application that the matter stand in the list so that an attempt might be made to contact the Perth-based representative who was, as it transpired, then in Tasmania appearing in either a Royal Commission or a similar kind of administrative inquiry. 27 After a short while, counsel then appearing for the present plaintiffs informed the learned Magistrate that he had been unable to make any contact with the Perth-based practitioner. Counsel informed the Magistrate that, as best he could establish, the practitioner himself was in Hobart; and that the practitioner's, "associate", - by which I take to be meant secretary or like assistant, - had been unable either to make contact in Hobart, or otherwise to be of assistance. 28 Counsel then told the learned Magistrate that he could not add to what he had previously put as the basis for the adjournment. 29 The learned Magistrate then heard a lengthy submission from counsel appearing for the present defendants. Prominent in the overall thrust of that submission was the proposition that the Magistrate might well be left "with the uneasy feeling that there is more to this than meets the eye; and it is our submission that the Court, bearing in mind the interests of my client, bearing in mind the interests of other litigants in this busy list, and bearing in mind the general public interest factors that your Worship will know should be taken into account, we would submit that there is simply no basis upon which the defendant really has got to pursue an application of this sort." 30 There was more to the same effect; but its gist was that the adjournment application as it finally stood was so deficient in the materials put forward to support it that it could not be a proper exercise of the relevant discretion to grant the adjournment. 31 Counsel for the present plaintiffs reiterated as his final submission the limited basis upon which he was able to put the application; and stressed again the preparedness of the present plaintiffs to pay costs in accordance with an appropriate order in that behalf; and reiterated the submission that a proper costs order of that kind would be sufficient to neutralise any prejudice that might otherwise flow to the present defendants from the granting of an adjournment. 32 The learned Magistrate gave judgment immediately. The judgment is, as these things go, fairly short; and it is, once again, convenient to set it out in full rather than to attempt a paraphrase of it: "BENCH: The application before the Court this morning is for these proceedings to be adjourned and for the hearing date of today to be vacated. The history of the matter is that - and a brief history I would say, is that a statement of claim was filed on 11 February 1997 and there have been some amendments to pleadings. That has ultimately led to the matter coming before a Registrar for a directions hearing on 3 April 2000. On that day, both parties represented by solicitors apparently, have agreed that a hearing date of 21 June would be suitable. The Registrar has then made standard directions for the contemporaneous exchange of witness statements fourteen days before the hearing date, being 7 June, and for the preparation of a statement of agreed facts and issues. On the day before the hearing, 20 June, an urgent facsimile has been sent by Margaretic barristers and solicitors of Perth to Mr. Evans, solicitor for the plaintiff. That letter notes that Mr. Margaretic was briefed to appear in the matter but not engaged in a general sense, and says that the hearing was misdiarised by his secretary as commencing on Monday 26 June and that that was clearly erroneous. That his clients, including two key defence witnesses made arrangements to travel to Sydney from Perth and Brisbane respectively to be present on 26 June and that the defendants maintain a strong defence. An application is made today to vacate the hearing and that application is opposed. The situation is that there is no evidence whatsoever to back up this application. There is no notice of motion, no affidavit in support, so all I have is a copy of a letter that has been handed up from the bar table. One would have thought it would have been quite simple as Mr. Bradford has suggested for Mr. Margaretic to have provided, either with his letter which may have convinced the plaintiffs to take a different course, or to the Court by way of an affidavit which obviously could have been facsimilied to Sydney today as to evidence which would support the error by another in the misiarying of the hearing date. There is also no evidence as one would expect of arrangements which would demonstrate that Mr. Margaretic, and indeed the witnesses, had been arranged to attend here on Monday. So there is no affidavit which deals with travel arrangements or plane tickets etcetera from Brisbane and Perth to attend next Monday. It also concerns me that there is no dispute before me today that the directions given by the Registrar for preparation of this case have not been complied with. That witness statements have not been served, and indeed there is no evidence of them having been prepared. So there is another indication within that that the defendant is not ready to proceed either today or indeed next Monday. The issue which I have to decide is where the interest of justice lies and to look at what prejudice befalls the parties given the issue here. The defendants say that they will be substantially prejudiced if the hearing is not vacated and that such prejudice can be met by an order for costs thrown away. I have certainly referred myself to the principles in the case of the State of Queensland and J L Holdings, a decision of the High Court which I think suggests the Courts should be well attuned to the realities of life and perhaps be a little more creative in trying to ensure that justice is done as well as a factor such as Court administration are cared for. Now this application to adjourn is not being refused on the basis that Court management rules must be complied with. On the contrary, it is being refused because there is no notice of motion, no evidence whatsoever to support the adjournment application, and additionally, no evidence which would suggest that the defendants are ready for hearing on this or any near future date. The notice given to the other side was minimal. The whole issue seems to have only arisen by virtue of some pressure by the plaintiffs to achieve the requirement of a statement of agreed facts and issues. Accordingly, in the light of any evidence that would support the application in the light of the application being contested, and given in my view that there is nothing before the Court which suggests that it would be in the interest of justice to adjourn this case, and I might note in these ex tempore reasons that this is not a large case. The statement of claim claims the amount of $11,350, that is not a large sum of money. Legal costs in relation to proceedings of that size frequently outweigh the quantum of the claim, and in my view, quantum is indeed an issue which goes to where the interests of justice lie. Accordingly the application for an adjournment is refused." 33 The Magistrate, having refused the adjournment application, proceeded to deal ex parte with the substantive claim. His Worship in due course found a verdict, and gave judgment, in favour of the present defendants. 34 The relevant question of law now presented for the decision of this Court is the question whether the decision of the learned Magistrate to refuse the adjournment application miscarried. It is common ground that if it be held that the discretion did miscarry, then the ex parte judgment cannot justly be left to stand, but should be set aside, and the principal proceedings remitted to the Local Court to be dealt with according to law. 35 The principles according to which this Court is to decide whether the learned Magistrate's discretionary decision to refuse the adjournment application did indeed miscarry are not in doubt. They are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them as follows: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

36 It can be allowed at once, and with respect to the learned Magistrate, that the materials that were placed before his Worship in connection with the adjournment application were less than ideal. That is, of course, to say that the learned Magistrate was in a position with which all Courts are familiar: that is to say, the position of having to do the best his Worship could to apply the relevant law to the materials, however scanty, that had in fact been placed before him. 37 The correct starting point for that assessment by his Worship was the proposition that the application for an adjournment was to be governed ultimately by the requirements of justice in the particular case. That requirement gave rise to a need for his Worship to define correctly the prejudice likely to be caused to the present defendants were the adjournment application to be granted; and to define similarly the prejudice likely to be occasioned to the present plaintiffs were the adjournment application to be refused. 38 Those various prejudicial postulates having once been correctly defined, it was then necessary for his Worship to bring them into overall balance in a way that was just in principle and sensible in fact. 39 It is clear, if I may say so with respect to the learned Magistrate, that his Worship did appreciate that the ultimate question for him was the question where the interests of justice might be thought, on a fair view, to lie overall. 40 It was then necessary for his Worship to consider what likely prejudice would be caused to the present defendants were the adjournment to be granted. 41 It seems to me that there were obviously two such possible kinds of prejudice. The first entailed that the present defendants would be delayed in their opportunity to have their day in Court. The second entailed that, absent some remedial order, the present defendants would be burdened with the costs of a hearing aborted through no fault of theirs. 42 It was then necessary to define correctly any likely prejudice that would be occasioned to the present plaintiffs by the refusal of the adjournment application. 43 There was essentially one such prejudice. It was that the present plaintiffs would be in effect forced to final judgment without having any opportunity for a hearing on the merits of such defences as they were entitled to raise, and wished to raise, in answer to the claim being made against them. 44 It is axiomatic that a party should not lightly be shut out from having his day in Court. It is useful from time to time for all Courts to remember that, ultimately, they exist in order to serve the litigants who appear before them, by doing justice in the contest which those litigants present for resolution; and that the Courts do not exist in order to be served by litigants who come to them for relief. 45 There could be no sensible questioning of the proposition, and there is in any event ample authority to support it, that the administrative convenience of the Court; the smooth conduct of proceedings before the Court; and matters of that character, have their rightful place in the scheme of things, including the scheme of things as relevant to adjournment applications. But it remains always fundamental that "justice is the paramount consideration in determining an application such as the one in question" Queensland v JL Holdings Pty Limited (1997) 189 CLR 146 per Dawson Gaudron McHugh JJ at 155. I appreciate that the Court was dealing in the J L Holdings case with an application to amend a pleading; but I can see no reason in principle why what was said in that particular context is not equally applicable to the particular kind of application which I am now called upon to consider. 46 The learned Magistrate did in terms refer to the J L Holdings decision; and as will appear from the reasons quoted earlier herein, his Worship expressly did not decide the adjournment application upon the basis of what I might describe comprehensively as case management considerations. His Worship seems, rather, to have decided the adjournment application by reference to the combined effect of two considerations. The first consideration was the paucity of the evidence that had been placed before his Worship by the parties carrying the burden of proof on the issue. The second was the view expressed by his Worship at the end of his judgment concerning the comparatively small amount of the relevant claim; the comparatively large amount of the costs likely to be at hazard were the plaintiffs to continue any further; and the notion that the quantum of those costs, related to the amount of the claim was, "indeed an issue which goes to where the interests of justice lie". 47 I think that it is clear from the decision in House v The King that the exercise of a judicial discretion is not to be interfered with lightly. It is fair in that context to acknowledge that in the present particular case the learned Magistrate gave an ex tempore judgment; and that it is not appropriate to rake over such a judgment with what I might describe as a forensic microscope, hoping that there will be found here or there this or that word or phrase which might have been more happily expressed. And it is fair to reiterate my earlier acknowledgment of the fact that the materials placed before the learned magistrate were sparse. 48 All of that said, it remains the fact that what his Worship was required to do was to define fairly and precisely the particular prejudices likely to fall this way and that depending on whether or not the application for adjournment was granted or refused; and then to bring those matters into a just and sensible balance, bearing in mind the "paramount consideration" of ensuring that justice was done to all parties. 49 That the evidence before his Worship was sparse could not, as I respectfully think, of itself be any indication of how the application should be properly adjudicated. It remained in such a case the requirement of the law that the learned Magistrate at least define correctly the relevant competing prejudices and then balance them having regard to what was in fact, rather than what might have been in principle, before him. 50 It seems to me, with respect, that the learned Magistrate gave to the notion of the sparseness of the materials before him a weight which was disproportionate in the context in which his Worship was adjudicating. 51 In my respectful opinion the same is to be said about his Worship's perception concerning the quantum of the claim and the related quantum of costs. It is one thing for a Court to draw attention to what is an apparent disproportion between the value of a claim, and the quantum of the costs that are at hazard if the claim is pressed. It is one thing for the Court to deplore the pursuit of a particular claim, the amount of which seems to the Court to be manifestly out of proportion to the amount of costs that are likely to be at hazard. It is, however, an entirely different thing for a Court, in effect, to force the issue in defended proceedings because it thinks that it would be undesirable to permit, or to encourage, the litigation of claims of the particular kind, because of the disproportion between the amount claimed and the amount of the costs likely to be at hazard. 52 For the whole of those reasons, it seems to me that the learned Magistrate was, with respect, distracted by the particular matters to which both his Worship and I have particularly referred. 53 It seems to me that in the circumstances that were presented to his Worship, there was no reason to doubt that there had been some misadventure of the kind suggested in the facsimile letter of 20 June 2000. 54 It is not apparent from the reasoning of his Worship, or indeed from the things put to his Worship in connection with the argument of the adjournment application, that any sensible cause was shown for the proposition that a properly framed order for costs would not do what was necessary in a just and practical sense to preserve the position in the relevant litigation of both sides of the record. 55 I think that a fair reading of the learned Magistrate's reasons indicates that his Worship did take either wrongly or disproportionately into account extraneous matters; that he did not sufficiently define for himself the competing possible prejudices; and that he did not, therefore, perform in respect of those competing prejudices, properly defined, that balancing exercise essential to the proper putting into effect of his discretion to grant or refuse the adjournment application. 56 For the whole of those reasons I have come to the conclusion that the plaintiffs before this Court are entitled to the relief they seek. 57 I make therefore the following orders: 1. The appeal is allowed with costs. 2. The judgment of the Local Court given on 21 June 2000 is set aside. 3. The proceedings are remitted to the Local Court to be heard and determined according to law. 4. The moneys paid into this Court in connection with orders made by O'Keefe J are to remain in Court pending further order. 5. Grant to the defendants before this Court, and pursuant to s 6 of the Suitors Fund Act 1951 (NSW), an indemnity certificate in respect of the costs of the appeal.

Last Modified: 07/26/2001 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.

Local Courts (Civil Claims) Act 1970(NSW)

Justices Act 1902(NSW)

Suitors Fund Act 1951(NSW)

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