[2024] NTCA 4
General information, not legal advice.
Court of Appeal (NT)
2024-09-03
Reeves JJ
Original judgment source is linked above.
APPEAL - Whether Supreme Court erred in finding there was a denial of procedural fairness - Where an appeal contains allegations of denial of procedural fairness the appeal Court must first address that issue - Rejection of evidence upon which there was no cross examination - Local Court obliged to provide procedural fairness - Procedural fairness not afforded - Defect in the administration of justice which adversely affects public confidence - Orders need to address the public interest in the integrity of the administration of justice - No error by Supreme Court.
APPEAL - Whether Supreme Court erred in finding apprehended bias - Where an appeal contains allegations of apprehended bias the appeal Court must first address that issue - Whether decision is impugned by apprehended bias - Reasons of Local Court detailed and cogent - Local Court's decision not affected by apprehended bias - Error by Supreme Court.
APPEAL - Local Court order set aside for denial of procedural fairness - Retrial by Local Court would be futile as vacant possession of land already provided - No remitter to Local Court - Supreme Court erred in determining other grounds of appeal and making findings of fact - Appeal allowed in part - Supreme Court's orders set aside.
Browne v Dunn (1893) 6 R 67 (HL), Charisteas v Charisteas [2021] HCA 29; (2021) 273 CLR 289, Concrete v Parramatta Design and Developments [2006] HCA 55; (2006) 229 CLR 577, Conway v R (2002) 209 CLR 203, Crown Melbourne v Cosmopolitan Hotels [2016] HCA 26; (2016) 260 CLR 1, Development Consent Authority v Phelps [2010] NTCA 3; 27 NTLR 174, Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315, Jorgensen v Fair Work Ombudsman [2019] FCAFC 113; (2019) 271 FCR 461, Poricanin v Australian Consolidated Industries Ltd [1979] 2 NSWLR 419, QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65, Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88, Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219, Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, Sullivan v Trilogy Funds Management [2017] FCAFC 153; (2017) 255 FCR 503, Tiver Constructions v Clair [1992] NTSC 86; (1992) 110 FLR 239, Windoval Pty Ltd v Donnelly [2014] FCAFC 127; (2014) 226 FCR 89 referred to.
Darwin International Airport Pty Ltd v DIAH (NT) Pty Ltd [2024] NTCA 4
DIAH (NT) PTY LTD AS TRUSTEE FOR THE AIRPORT HOTEL TRUST
(a) The Local Court did not afford it procedural fairness when rejecting as unreliable, without notifying it, in circumstances where there was no cross examination or other challenge to its reliability, the evidence of its director, John Robinson, about a conversation he had with Airport's CEO, Ian Kew, where he stated that Airport would give Hotel "plenty of notice to remove the improvements" if Airport required vacant possession of the land.
(b) There was a reasonable apprehension that the question concerning the reliability of Mr Robinson's evidence would not be dealt with impartially by the Local Court.
(c) In the circumstances outlined above, Mr Robinson's evidence with respect to the conversation should have been accepted.
(d) Accordingly, its sublease of the land was varied to require Airport to give either "plenty" or "reasonable notice" of its termination and/or a collateral contract was concluded to the same effect.
(e) Alternatively, a promissory estoppel operated to prevent Airport terminating the tenancy without giving such notice.
It should be noted that this summary differs from the one that appears in the Supreme Court's reasons.[3] Importantly, for the purposes of this appeal the first two grounds described above do not appear in that summary. As will appear later in these reasons, this disparity affects the orders that the Supreme Court ultimately made.
(a) holding that there had been a breach of the rule in Browne v Dunn[6] and/or a failure to afford procedural fairness on the part of the Local Court - numbered ground 1(i),
(b) treating ground 3 before the Court as an allegation of apprehended bias; then proceeding to deal with that allegation without first notifying it of that intention and providing the opportunity to make submissions with respect to it; and finally, in concluding that the Local Court had demonstrated apprehended bias - numbered grounds 1(iii), (iv), (v) and (vi),
(c) failing to remit the matter to the Local Court for a retrial and instead making findings of fact and disposing of the matter based thereon - numbered grounds 1(ii) and (vii), and
(d) finding that the words spoken by Mr Kew resulted in a variation of the sublease and/or finding that a collateral contract was formed with respect thereto - numbered ground 2.
An intermediate appellant court dealing with allegations of apprehended bias, coupled with other discrete grounds of appeal must deal with the issue of bias first. It must do this because, logically, it comes first. Actual or apprehended bias strike at the validity and acceptability of the trial and its outcome. It is for that reason that such questions should be dealt with before other, substantive, issues are decided. It should put the party making such an allegation to an election on the basis that if the allegation of apprehended bias is made out, a retrial will be ordered irrespective of possible findings on other issues. Even if a judge is found to be correct, this does not assuage the impression that there was an apprehension of bias.[8] [citations omitted]
Furthermore, if, as here, an intermediate appellate court finds the allegation made out, but grants no relief because it otherwise finds in favour of the party making the allegation, a defect in the administration of justice has been found to have occurred which, in the absence of any successful appeal on the point, will remain unremedied. Inevitably, this adversely affects public confidence in the administration of justice. [9]
In about June 2017, I spoke by phone with Ian Kew, who was at the time the Chief Executive Officer of NT Airports. I cannot recall whether I called him or whether he called me, however at the outset of the call one of us said that the purpose of the call was to work out the basis of [Hotel's] ongoing occupation of the premises (i.e. following on from some of the emails I have referred to above). In the course of that conversation an exchange took place as follows:
I said words the effect of "we don't have any forward bookings and we have significant rental arrears with [Hotel]. I thought I might be able to do a deal with JKC but not until later in the year."
Ian said words to the effect of: "yes, you've been a good rent paying tenant at the Darwin Airport Resort, Darwin Airport Inn and Darwin Airport Lodge since 2004. I can agree to invoice only outgoings until you find a client."
"we don't not [sic] have any plans for the land and as long as you cover so there was no cost to us, I'm happy to agree to 5% of turnover when you find another client."
"if anything changes will give you plenty of notice to remove the improvements"
I said words to the effect of "alright thanks".(Paragraph numbering removed)
Mr Robinson's affidavit was admitted at the hearing. He was not cross-examined, although he was available to be cross examined, should [Airport] have required. His affidavit contained the only evidence of the conversation which on [Hotel's] case altered the notice requirements of the lease. Mr Kew's evidence set out in his affidavit, which was before the Local Court for an interlocutory proceeding, was merely that he could not recall if the conversation had taken place.[19]
(a) the passage of time between the conversation in June 2017 and 14 April 2021 when Mr Robinson made his affidavit;
(b) the lack of any contemporaneous record of the conversation particularly having regard to the practice of the parties during this period to send confirmatory emails of their meetings and discussions;
(c) the absence of any mention of the notice issue in any of the emails that had passed between the parties at the relevant time; and
(d) the fact that Mr Robinson's evidence was not tested by cross examination leaving him "with only the brief and unexplored evidence in those few lines of that affidavit to determine a question of the greatest gravity in this proceeding".
In my view there was clear error by the rejection of the evidence of Mr Robinson on the basis of lack of reliability due to the passage of time, without Mr Robinson being given an opportunity to address the issue through cross examination. It was not clear his reliability would be under challenge, by virtue of the passing of time.[25]
This was decisive evidence and to reject it required that the witness party be given an opportunity to deal with the criticism....While it is the case that his Honour was not bound to accept the evidence, to exclude it from consideration required that the witness be afforded procedural fairness.[26]
Where, in a civil case, a witness is not cross-examined, it may normally be assumed that the evidence of that witness is not in contest. Therefore...in such a case a party who has not cross-examined the witness will not normally be entitled to submit in address that the witness's evidence should not be accepted.
But the circumstances of the particular case may negative such an assumption. Whether it is right to make such an assumption will depend upon, for example, whether counsel has at the time, given an adequate reason for not cross-examining the witness or otherwise made it clear that it is not a proper case in which to make that assumption.....It may be that the witnesses evidence is fanciful or such as not to warrant cross examination... Or that cross examination is forgone for other adequate reasons, for example, delicacy...
Similarly, failure to cross examine the witness may not found such an assumption, or hinder the course of the trial unfairly if it is clear from the manner in which generally the case has been conducted that his evidence will be contested... The nature of the defendant's case and the particulars given and otherwise the conduct of it may make it sufficiently clear that such an assumption is unwarranted and that there has been no surprise or prejudice concerning the matter.[28]
There is no question that the primary judge was obliged to afford Mr Jorgensen procedural fairness. Procedural fairness extends to require a decision‐maker to identify to a person who may be affected by a decision any adverse conclusion which has been arrived at which would not obviously be open on the known material, though the decision‐maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision. There will be a denial of procedural fairness and a substantial miscarriage of justice where a trial judge makes findings of impropriety against a witness in circumstances where the witness was not given an opportunity to address that issue in cross‐examination.[29]
Being "fair-minded", the observer "is neither complacent nor unduly sensitive or suspicious". Yet the observer is cognisant of "human frailty" and is all too aware of the reality that the judge is human. The observer understands that "information [as well as attitudes] consciously and conscientiously discarded might still sometimes have a subconscious effect on even the most professional of decision-making".
Consequences of denial of procedural fairness and no apprehended bias
It is also possible to address the legal issues that are raised by the remaining grounds of appeal without considering the evidence in any great detail and without expressing views about factual matters which will need to be considered afresh on remittal to the Circuit Court. It would, in all the circumstances, be desirable to address the legal issues so as to provide guidance for the purposes of the retrial.[45]
(a) The appellant's (Airport's) appeal is allowed in part.
(b) The orders of the Supreme Court made on 29 November 2023 are set aside and in their place this Court orders that:
(i) The appellant's (Hotel's) appeal to the Supreme Court is allowed with respect to the following ground of appeal: That the Local Court did not afford Hotel procedural fairness when rejecting as unreliable, without notifying it, in circumstances where there was no cross-examination or other challenge to its reliability, the evidence of its director, John Robinson, about a conversation that he had with Airport's CEO, Ian Kew, where he stated that Airport would give Hotel 'plenty of notice to remove the improvements' if it required vacant possession of the land.
(ii) The appellant's (Hotel's) appeal to the Supreme Court is otherwise dismissed.
(iii) The respondent's (Airport's) notice of contention in the Supreme Court is dismissed.
(iv) The order of the Local Court made on 3 August 2021 is set aside.
(v) There is to be no rehearing in the Local Court.
[1] Darwin International Airport v Diah (NT) [2021] NTLC 22.
[2] Diah (NT) Pty Ltd as Trustee for the Airport Hotel Trust v Darwin International Airport Pty Ltd [2023] NTSC 99 ('the Reasons').
[4] See the Reasons at [43]-[44], [60], [63], [77] and [79] respectively.
[6] Browne v Dunn (1893) 6 R 67 (HL).
[7] [2006] HCA 55; (2006) 229 CLR 577 ('Concrete').
[8] At [117], with whom Gummow J agreed at [3].
[10] [2021] HCA 29; (2021) 273 CLR 289 ('Charisteas').
[11] Charisteas at [10] per Kiefel CJ, Gageler, Keane, Gordon and Gleeson JJ. See also CNY17 v Minister for Immigration and Border Protection [2019] HCA 50; (2019) 268 CLR 76 at [54]- [55] per Nettle and Gordon JJ.
[12] [2019] FCAFC 113; (2019) 271 FCR 461 at [199] per Greenwood, Reeves and Wigney JJ ('Jorgensen').
[13] See Jorgensen at [93]. See also Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9] per Basten JA.
[14] See the Reasons at [3]-[8].
[15] Development Consent Authority v Phelps [2010] NTCA 3; (2010) 27 NTLR 174 at [9]- [11] per Martin CJ, Mildren and Reeves JJ and Tiver Constructions v Clair [1992] NTSC 86; (1992) 110 FLR 239 at 255 per Martin and Mildren JJ.
[16] Section 19(6) of the Local Court (Civil Procedure) Act 1989 (NT) and s 55(1)(f) of the Supreme Act 1979 (NT), respectively.
[17] See Windoval Pty Ltd v Donnelly (2014) 314 ALR 622 per Jacobson, White and Gleeson JJ citing Conway v R (2002) 209 CLR 203 at [36] per Gaudron ACJ, McHugh, Hayne and Callinan JJ and Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 at 145-146 per Mason, Wilson, Brennan, Deane and Dawson JJ at [95]-[96] and [106] respectively.
[18] As to a denial of procedural fairness, see, for example, Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315 at [202] noting that special leave to appeal was refused in respect of that judgment, see Crown Melbourne v Cosmopolitan Hotels [2016] HCA 26; (2016) 260 CLR 1 at [69], and as to bias see, for example, QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; (2023) 409 ALR 65 at [328] per Jagot J ('QYFM').
[20] Darwin International Airport v Diah (NT) [2021] NTLC 22 at [63]- [71].
[27] (1977) 19 NSWLR 219 at 236.
[28] See also Sullivan v Trilogy Funds Management [2017] FCAFC 153; (2017) 255 FCR 503 at [265].
[30] See Poricanin v Australian Consolidated Industries Ltd (1979) 2 NSWLR 419 at 426 per Hope and Glass JJA. See also Nominal Defendant v Saleh [2011] NSWCA 16; (2011) 57 MVR 412 at [140]- [142] per McColl JA and One Flare Pty Ltd v Chernih [2017] NSWCA 195 at [34]-[35] and [38] per Meagher JA (Gleeson and Leeming AJJ agreeing).
[33] See the Reasons at [51], citing Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [6].
[34] See the Reasons at [55], referring to Ebner supra at [8].
[35] Including Charisteas v Charisteas supra at [21] and Johnson v Johnson [2000] HCA 48, 201 CLR 488 at [53].
[46] See at [6(c)] and [6(d)] above.
[51] Compare the Reasons at [86] with the numbers used in the grounds of appeal set out in the Reasons at [2].
Darwin International Airport Pty Ltd
DIAH
(2021) 273 CLR 289
(2006) 229 CLR 577
(2002) 209 CLR 203
(2016) 260 CLR 1
(2015) 233 FCR 315
(2019) 271 FCR 461
(2023) 409 ALR 65
(1977) 19 NSWLR 219
(1986) 161 CLR 141
(2017) 255 FCR 503
(1992) 110 FLR 239
(2014) 226 FCR 89
(2019) 268 CLR 76
(2016) 332 ALR 128
(2010) 27 NTLR 174
(2014) 314 ALR 622
(1959) 101 CLR 298
(2011) 243 CLR 361
(1979) 2 NSWLR 419
(2011) 57 MVR 412
(2000) 205 CLR 337