Drive My Car Rentals Pty Ltd v Gabriel

Outline of the dispute and procedural background

1. An understanding of the issues is assisted by a brief outline of the procedural background leading to the proceedings in this Court.
2. The proceedings in the Common Law Division involve an appeal by Joseph Gabriel from the Local Court against the dismissal of his claim against Paul Grech for damage to a BMW motor vehicle which Joseph Gabriel claimed he owned. Joseph Gabriel claimed that the BMW motor vehicle sustained damage as a consequence of a rear-end collision on 4 August 2011 when the BMW driven by his son Mark Gabriel was hit from behind by a vehicle driven by Mr Grech. Mr Grech filed a cross-claim seeking indemnity from DMC, the owner of the hire car vehicle he was driving.
3. In March 2017, the Magistrate dismissed Joseph Gabriel's claim against Mr Grech and also dismissed Mr Grech's claim against DMC on the ground that at the relevant time, Mark Gabriel owned the BMW motor vehicle. But for that finding, the Magistrate found that Joseph Gabriel would have succeeded in his claim of negligence against Mr Grech for damage suffered in an amount of $15,900 and that DMC was liable for Mr Grech for such damages.
4. Joseph Gabriel appealed to the Supreme Court against the decision in the Local Court joining Mr Grech as first defendant, DMC as second defendant, and later Mark Gabriel as third defendant. Adamson J upheld Joseph Gabriel's first ground of appeal that the Magistrate erred as a matter of law in determining that ownership of the BMW was a fact in issue between Joseph Gabriel and Mr Grech and in determining that issue, when the issue of ownership was admitted on the pleadings as between Joseph Gabriel and Mr Grech. Her Honour found that it was not necessary to determine the other grounds of appeal: Gabriel v Grech (No 3) [2020] NSWSC 218.
5. The dispositive part of her Honour's reasons was that although DMC was a party to the Local Court proceedings, the effect of s 22 of the Civil Procedure Act was that DMC was not a party to the issue of ownership as between Joseph Gabriel and Mr Grech, which was by Mr Grech's admission on the pleadings, no longer an issue between them: at [95]. Her Honour concluded that the finding by the Magistrate that Joseph Gabriel's claim failed because he had not established that he owned the car for the purposes of his claim against Mr Grech involved a denial of procedural fairness to Joseph Gabriel who was not on notice that ownership was an issue in his claim against Mr Grech: at [105].
6. Her Honour made orders allowing the appeal, setting aside the order made by the Magistrate dismissing Joseph Gabriel's claim and in lieu ordered judgment in favour of Joseph Gabriel, reserved the question of the appropriate order on the cross-claim in the Local Court, and also reserved the question of the costs of the appeal and of the costs in the Local Court.
7. DMC seeks leave to appeal from the decision of Adamson J. It is common ground that DMC requires leave to appeal to challenge her Honour's orders given that the amount in issue is less than the threshold of $100,000: Supreme Court Act 1970 (NSW), s 101(2)(r)(i).
8. On 11 June 2020, DMC filed a summons seeking leave to appeal, together with a White Book containing its summary of argument and draft notice of grounds of appeal. The respondents, Joseph Gabriel and Mark Gabriel, filed their response to the application on 10 July 2020.
9. On 20 July 2020, the Registrar fixed the matter for a concurrent hearing on 19 October 2020 and made procedural directions for the preparation of the matter.

Whether concurrent hearing should be vacated?

1. DMC says that the Common Law Division proceedings are next listed before the primary judge on 28 August 2020, at which time it will seek a hearing of the two remaining reserved questions: (1) the appropriate order on the cross-claim in the Local Court, and (2) the question of the costs of the appeal and of the costs in the Local Court.
2. DMC says that it will only be necessary to pursue its application for leave to appeal (which is in the nature of a holding application), if the primary judge makes the order sought by the Gabriels in par 1B(c) of the amended summons: "Judgment in favour of the cross claimant [Mr Grech] against the cross-defendant [DMC]". If such an order is not made DMC does not intend to pursue its leave application. However, if such an order is made on the appeal to the Supreme Court, DMC says that it would be preferable if its leave application together with any further appeal by DMC from the orders of the primary judge were dealt with together.
3. In my view, the most efficient course with respect to the proceedings in this Court is to defer the concurrent hearing until after the determination of the reserved questions in the Common Law Division. The delay is unlikely to be significant, and there is always the possibility, as DMC submitted, that the outcome of the reserved questions below will render the proceedings in this Court moot. Of course, I express no view on the likelihood of that occurring.

Whether should be a stay of proceedings in this Court?

1. Accepting that the concurrent hearing fixed for 19 October 2020 should be vacated the next question is whether there should be a stay of the proceedings in this Court. No good reason was demonstrated by DMC for a stay. And as a practical matter, a stay might be relied upon by Mr Grech as an argument against permitting enforcement action by Joseph Gabriel against Mr Grech. The stay application is rejected.

Challenge to direction for a concurrent hearing

1. There remains the question of the Gabriels' challenge to a concurrent hearing, which was directed by the President. Having reviewed the papers I am well satisfied that, notwithstanding the small amount in issue, a concurrent hearing is appropriate.
2. Without intending to express any concluded view on the question of leave, it seems to me that the proposed appeal arguably raises an important point of principle as to the operation of s 22 of the Civil Procedure Act, in particular, whether and by what means a cross-defendant can put in issue a factual matter which is the subject of an admission as between the plaintiff and the defendant. There is also an arguable issue that there has been an injustice if, as DMC submitted, not only did DMC put the question of ownership in issue in the Local Court, but Joseph Gabriel also acquiesced in that course in the Local Court. These issues could not be conveniently addressed in the usual short 20 minute oral argument by each party on a leave application.
3. Counsel for the Gabriels suggested that a concurrent hearing would involve significantly greater cost in terms of hearing time (it was suggested that an appeal would take 2 days) and greater preparation time in view of a multitude of issues. I do not agree.
4. First, a concurrent hearing would not take more than 1 day, and if argued efficiently, should be able to be dealt with in half a day, as senior counsel for DMC submitted.
5. Second, it is the responsibility of counsel and solicitors on both sides of this dispute to ensure that only the real issues are raised for determination, particularly given the small amount in issue.
6. Third, if the parties spend an inordinate time preparing for a concurrent hearing with respect to a small claim, the successful party cannot expect to recover, on an assessment of costs, all of their costs in this Court. And there is the possibility that the Court might make a gross sum costs order, in effect, limiting the amount of costs in favour of the successful party, taking into account, among other matters, the extent to which the costs are disproportionate to the amount in issue: Civil Procedure Act s 60 and s 98.

Costs

1. Given the somewhat mixed outcome of the applications and the small amount in issue, in my view, no order for costs should be made on the present applications.

Orders

1. Accordingly, at the conclusion of oral argument, the Court made the following orders: 1. Set aside the orders made by the Registrar on 20 July 2020. 2. Direct a concurrent hearing of the summons for leave to appeal, and appeal, if leave be granted. 3. Refuse applicant's application for a stay of the proceedings in this Court. 4. Stand over matter before the Registrar on 12 October 2020 with a view to fixing a hearing date with respect to a concurrent hearing. 5. No order as to costs.

Amendments 26 August 2020 - [5] 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: 26 August 2020