ELEFTHERIOU v WATER BOARD

Court of Appeal (NSW)|1991-04-26|Before: Kirby P

ELEFTHERIOU v WATER BOARD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, CLARKE and HANDLEY JJA 26 April 1991, 17 May 1991

INFERIOR COURTS - District Court - appeal to Supreme Court - from what decisions - ruling, order, direction or decision "in an action" - no appeal from proceeding "ancillary to action" - District Court Judge (Walsh A-DCJ), pursuant to motion filed in court in the action and at the hearing of an action, extends time within which plaintiff may sue the defendant pursuant to Limitation Act 1969, 8 58(2) - judge gives reasons for extension in the course of giving his reasons for judgment in favour of plaintiff in the action - defendant appeals to Court of Appeal from that judgment - notice of appeal includes grounds challenging correctness of the order extending time - motion by plaintiff to dismiss appeal an incompetent - held: (1) (by the Court): Generally, in an appeal, a party may challenge the final judgment upon the ground of any error in an anterior or ancillary or interlocutory order or ruling. Bunning v Cross (1978) 141 CLR 54, 82; Smith v Tabain (1987) 10 NSWLR 562, 566 applied; (2) (per Clarke and Handley JJA; Kirby P dissenting): However, a motion for extension of the limitation period is, under the District Court Rules, an originating motion which is separate from, although ancillary to, the action. It is thus not competent to appeal from it in an appeal "in an action"; (3) Accordingly, the purported grounds of appeal challenging the decision to extend the limitation period were incompetent and should be struck out. Clutha Developments Pty Limited v Barry (1990) 18 NSWLR 86 applied.

District Court Act 1973, s128(2A). District Court (Amendment) Act 1990, s3, Schedule 1, para 1(a) and (b). Limitation Act 1969, s57,s58. District Court Rules, Pt5, Division 3.

Kirby P This motion concerns the limits on the jurisdiction of the Court of Appeal to entertain an appeal from the District Court pursuant to the District Court Act 1973, s128(2A).

In a series of decisions in this Court, that statutory provision has been construed narrowly, to exclude an appeal from rulings, orders, directions or decisions made in proceedings "ancillary to an action", as distinct from made "in the action" itself. From | March 1991, the District Court Act has been amended to provide for appeals to this Court against interlocutory orders as defined, but only by the leave of the Court. See District Court (Amendment) Act 1990, s3, Schedule 1, (1). However, the present motion must be determined under the former law.

A successful motion to extend time under Limitation Act Mr Michael Eleftheriou (the claimant) commenced proceedings against the Water Board (the opponent) on 23 September 1984. He did 80 by way of a statement of claim issued out of the District Court. He claimed damages for negligence in respect of a condition of industrial deafness allegedly caused by his work for the opponent.

The case meandered in the District Court list in an all too typical fashion until, on 21 February 1990, the claimant filed a notice of motion seeking an extension of time pursuant to s58(2) of the Limitation Act 1969 within which he might

claim against the opponent. That motion was returned before Walsh A-DCJ on the same day as the claimant's action for damages was listed. His Honour dealt with it in the course of providing reasons for judgment in which he dealt both with the motion for the extension and the action for damages reliant on it. He rolled the two issues up. Without making a formal order on the motion, Walsh A-DCJ appears to have acceded to the motion. He entered judgment in favour of the claimant in the sum of $26,375 together with costs.

Against that judgment, the opponent has appealed to this Court. The first two grounds of the notice of appeal complain that Walsh A-DCJ erred in failing to dismiss the claim, insofar as (but for the extension) it was barred by the operation of the Limitation Act; and in extending the limitation period under s58 of that Act. On the face of his Honour's reasons, he does appear to have extended the limitation period. He appears to have done so upon a basis which would give rise to viable arguments on the part of the opponent having regard to the authority of the High Court of Australia in Do Carmo v Ford Excavations Pty Limited (1984) 154 CLR 234.

However, the claimant has filed a motion in this Court suggesting that the purported appeal is misconceived being, in effect, an appeal from a ruling or order made by Walsh A-DCJ in proceedings ancillary to an action and not in the action itself. In support of his motion, the claimant invokes Clutha Developments Pty Limited v Barry (1989) 18 NSWLR 86, a decision of this Court. That decision reconfirmed the Court's earlier authority in Fraser Credits Pty Limited v Osterberg-Olsen [1978] 1 NSWLR 121 and El Kalza v Superior General (formerly Reverend other General) of the Order of the Sisters of Charity, Court of Appeal, unreported, 8 April 1987. By the authority of those decisions, the claimant submitted that the Court had decided that it had no jurisdiction to entertain an appeal from a decision of a District Court judge made on an application for an extension of a limitation period pursuant to s58 of the Limitation Act. This was because, such decisions were classified as being in a "proceeding ancillary to an action" and not "in an action".

It should be noted that the order of extension was sought by the claimant on a notice of motion. That notice of motion was accepted for filing by the District Court Registry. It was the basis upon which Walsh A-DCJ proceeded to hear and determine the application under the Limitation Act. There is no doubt that the motion was treated by the judge - and by both parties - as being in the action, the judgment in which is now appealed. The notice of motion bears the same number at the action. It was not treated as a separate proceeding but as a step interlocutory to the action. Belatedly, in this Court, the claimant argues that the motion was wrongly titled. He now says that, in accordance with Pt5, District Court Rules, it should have been treated as an entirely separate proceeding, although one "ancillary to [the] action". This is not a point which was taken at the trial. Nor is it the way the parties and the judge there dealt with it. It was the claimant, and not the opponent, who filed the motion. He titled and numbered his process. He now wishes to say that it was an entirely separate proceeding. It is legitimate for the opponent to point out that this is not the way that the claimant proceeded before Walsh A-DJC.

Approach to the motion: three considerations I accept three starting points for my approach to the resolution of the claimant's motion now before this Court:

The facility of appeal is a valuable one. It exists, for beneficial purposes to provide a party, disaffected with a ruling, order, direction or decision at first instance, the opportunity to have an appellate court review such determination (I

use a generic word). There was no right of appeal at common law. However, appellate rights have now been provided by statute for more than a century both in this country and in England. The variety and growth of the business of this Court demonstrates the utility of appeal. Even the most painstaking judge can err. The casebooks are full of decisions on s57 and s58 of the Limitation Act. In England, where the statutory provisions originated, their words were described by Lord Denning MR as very difficult to understand" and by Salmon LJ as *obscure".

See Goodchild v Greatness Timber Co Ltd [1968] 2 QB 372, 379, 381 (CA). They have been the source of numerous equivalent judicial laments in this country. For example, in Ditchburn v Seltsam Limited (1989) 17 NSWLR 697, 698 I said that "[c]ourts, lawyers and citizens must still find their way through the thicket of the statutory language - generally emerging from the other side dazed, bruised and not entirely certain of their whereabouts". In that legal thicket, it is easy for any judge to err. It should not be lightly assumed that Parliament would intend to deprive a party affected by a decision on the application of such provision of the facility of appellate review. That facility being useful generally, and specially useful in the application of such opaque statutory language, I would approach a statute conferring appellate jurisdiction on this Court with a presumption that Parliament intended the appellate facility to be available. Any ambiguity in the legislation would therefore be resolved by me in favour of ensuring the availability of such facility to the full extent permitted by the statutory language;

It is a well established rule of appellate procedure that, unless otherwise disentitled by law, a party to an appeal against a final judgment may, in the appeal, raise the correctness of any interlocutory or other determinations which have been made as steps in the proceedings leading to the final judgment. The point scarcely needs legal authority. It has been so since the earliest days of appellate procedure. See eg Sugden and Others v 1, ord St Leonards and Others [1876] 1 PD 154, 208 (CA). Typically, leave is required to appeal from an interlocutory decision made in the course of resolving proceedings between parties. Similarly, leave is required to appeal from other determinations which do not amount to the final disposition of litigation. See eg Supreme Court Act 1970, 8 101(2). There are developed principles which restrain earlier appellate disturbance of such preliminary or ancillary determinations. The purpose of such principles is to reduce the costs and delays of litigation by defending the right of the court of trial to dispose of the whole proceedings before the appellate facility is availed of. A further indication of this policy of the law is found in the requirement to secure leave to appeal on a separate question fully determined even where the court of trial has ordered that the question, typically important, should be tried separately and first. See Supreme Court Act 1970, s103. The corollary of these provisions and the principles for their application is that, when the final order is made, a party disaffected by interlocutory or ancillary determinations, or the resolution of separate or preliminary questions, should ordinarily have a full facility, in an appeal as of right, to challenge each and every determination anterior to the final judgment.

So much appears to be nothing but commonsense and, indeed, rudimentary justice. If, however, authority is required it may readily be found. See eg Crowley v Glissan (1905) 2 CLR 402; Bunning v Cross (1978) 141 CLR 54 at 82 and Smith v Tabain (1987) 10 NSWLR 562, 566 (CA). See al so American Home Assurance Co v Ampol Refineries Limited (1987) 10 NSWLR 13, 20. So well

entrenched is this principle, and 80 clearly grounded in rudimentary requirements of justice, that I would require a lot of convincing to be persuaded that a statutory provision, expressed in general terms, permitting an appeal to be brought to this Court from determinations of the District Court reversed such a basic principle, denied the appellant the opportunity to complain about earlier, interlocutory determinations and confined complaints, in home artificial way, to those otherwise arising against the final judgment only. By definition, that judgment will ordinarily have been affected by the earlier determinations of the court made on the way to deciding it; and

The right of appeal from determinations of the District Court, at the time relevant to the decision made in the instant case, is not free of authority. The authority of the Court in Fraser Credits and Clutha is binding on me. Whatever my opinion may be about the benefits of the facility of appeal or the plain justice of allowing interlocutory challenges to be raised in an appeal from a final judgment, if this Court has held otherwise, I am bound by the Court's holdings. The fact that Parliament, in response to Clutha, has amended the District Court Act to provide a facility for appeal by leave in future cases both recognises the injustice which Clutha might occasion in a particular case and removes that source of that injustice for the future. The amendment reduces the risk of a persisting injustice to parties deprived of the opportunity of appellate review of an important interlocutory or ancillary order. The injustice to residual cases would remain. But even these would not in every case be bereft of remedy. Relief, prerogative in nature, would be available in home case to permit the Court to quash an order infected by non-jurisdictional error of law appearing on the face of the record of the District Court. The resolution of the present motion is therefore primarily to be found by discovering the answer to the question whether the holding in Clutha determines the issue. If it does, my duty is to apply that holding.

Some of the observations of Gleeson CJ in Clutha (with whom the other members of the majority agreed) support the claimant's proposition that the holding in that case resolves the issue now before us. Thus, at 102, his Honour referred to the attempt made to distinguish between the three cases then before the Court and the different circumstances in which, in each of them, the order had been made in the District Court extending time under the 1, imitation Act, which the defendant in each case wished to challenge on appeal. The Chief Justice concluded (at 102):

"T cannot accept that the outcome can depend upon accidental differences in the procedure adopted in relation to the respective applications. Assuming that the District Court has sufficient control over its own procedures to enable applications under s58 to be made in any of the ways described above, or perhaps in other ways also, the answer to the question whether the application is to be described as "an action" or " proceedings ancillary to an action" must always be the same. "

On the other hand, the one case in the Clutha series which was similar to that now before the Court was Costain Australia Limited v Noble. In my reasons, I described what had happened in that case (at 104): 'Noble was a different case entirely. The statement of claim was filed on 24 December 1985. The statement of defence was filed on 26 February 1986. The notice of motion for the order under the Limitation Act, s58, was not filed until 26 September 1987, the very day on which the trial of the action was listed to commence before Shadbolt DCJ

and a jury. Out of courtesy to the jury in writing and because there was argument about challenges for cause) the jury to trial Mr Noble's action was empanenelled before the notice of motion was dealt with. It was thereupon argued in the absence of the fury) and determined by his Honour after the hearing of the proceedings on the statement of claim had actually been commenced. It was determined by his Honour in favour of Mr Noble on 17 September 1987. No point was taken at the trial, or in the appeal that the jury having been summoned to try Mr Noble's action, it should have determined the disputed issues of fact in the motion; see District Court Act 1973, s77(2). But nothing would seem to turn on this... In Noble, the decision on the motion in favour of the plaintiff necessarily affected the charge to the jury thereafter given by Shadbolt DCJ. In this indirect way, the decision on the s58 point determined by his Honour, affects the verdict returned by the jury against which the appellant wishes to appeal. The appeal awaits hearing.

I recorded in my reasons in Clutha an important concession which was made by counsel who appeared for all of the appellants. That concession delineates the issue for decision in Clutha and defined what that issue was. I went on (at 105) to say:

[W]ith appropriate candour, counsel for the appellant acknowledged that, if the appellant could not disturb the ruling made on the motion and challenge that ruling in this Court, he could not otherwise sustain a challenge to the verdict. Upon the premise of the unappealability of the order made in the motion, the verdict was unassailable on appeal. If, however, the judge had erred in providing the extension under s58, and this could be challenged in the Court, the verdict (so the argument ran) would fall and a new trial be ordered limited to the plaintiff 's claim upon the original statement of claim, deprived of the order under s58 of the Limitation Act. By reason of this concession, the Court in Clutha did not have to deal with an appeal from a judgment in the respective actions (which would indubitably be before the Court) although in the action that appeal was raising (as a long line of authority permitted) the challenge to the interlocutory determination which necessarily affected the order challenged. The remarks of Gleeson CJ in Clutha evidence a disinclination to distinguish among effective challenges to orders made under the Limitation Act, depending upon the procedures actually followed in the District Court. However, the fact remains that the appellants in Clutha, and specifically in Noble's case, did not take the point now taken defensively by the opponent here. Accordingly, the Court did not address its attention specifically to the point.

I do not therefore believe that this Court is now bound by Clutha to uphold the claimant's objection to the competence of the appeal. It should resolve that objection by returning to the statutory language which gave rise to the decision in Fraser Credits confirmed in Clutha. That line of authority is clearly a judicial response to the "alarming" prospect of premature appeals from interlocutory rulings etc in the District Court. Cf Wallace P in Australian Guarantee Corporation Limited v Hackett [1967] 2 NSWR 152, 153 (CA). It depended upon classifying "appeals" into one of two categories: ie those "against rulings, orders, directions or decisions made in an action" and those "made in proceedings ancillary to an action". The District Court Rules make provision for particular procedures to be followed in the bringing of applications (such as those for extension of time under the Limitation Act). But such Rules do not thereby reduce the conferral of the right to appeal expressly provided by the Act. To the extent that such right arises from a determination "in an action", it incontestibly

confers an unfettered right to appeal. But this picks up and includes the ordinary right to challenge in the appeal against a decision "in an action'" any anterior interlocutory determination, although only to the extent that it may affect the "determination in an action". Provision in the Rules of the District Court governing the way in which such earlier proceedings are to be brought can scarcely determine the meaning of the right or privilege conferred by the statutory facility of "an appeal... to the Supreme Court from any ruling (etc) in an action".

If the construction urged by the opponent were adopted, the "alarming" prospect of appeals from rulings in proceedings ancillary to an action, at the interlocutory stage, would be entirely avoided. There may be no such appeal. But, if the decision has an adverse effect on a party which necessarily affects the ruling etc "in an action" there is no reason why the ordinary principle of appellate procedure should not apply. And there is every reason why it should. A party disaffected with the determination of the "action" may appeal, invoking therein the challenge to any determination made on the way.

It must be acknowledged that this construction of the District Court Act, and the juxtaposition in it of rulings etc "in an action" and those made in "proceedings ancillary to an action" produces anomalies. A plaintiff who failed in an s58 application for extension of time (and was thereby put out of court entirely) would have no effective appeal against a decision "in an action" unless he or she pressed on with an action, without benefit of the extension of time and necessarily suffered judgment as a consequence. See El Kalza; cf Clutha, 101. However, there are anomalies and capricious results whichever construction is adopted. In my opinion it is more anomalous to acknowledge (as the plain words of s128(2A) of the District Court Act required that an appeal lies from a decision "in an action" but to deny such appeal any utility by excluding the normal facility to challenge in it contested interlocutory determinations made on the way. I therefore prefer the construction of the Act which does the least harm and accords the greater injustice.

In the result, this Court should give the facility of appeal provided by s128(2A) of the District Court Act as it stood before its recent amendment the ample meaning which the provision of such an important and beneficial civil right or privilege normally imports. The section, like any other section of a statute, should be given meaning in order to achieve the purposes imputed to Parliament. It should also be given meaning against the background of the well established rule that an "appeal... from any... decision... in an action" will ordinarily permit an appellant to challenge interlocutory rulings which necessarily affect the decision under appeal. That normal rule is not expressly negated by the statute here. It is not excluded by references in the Act to "proceedings ancillary to an action".

The opponent's appeal should therefore proceed to hearing on the grounds which are challenged in the normal way. As in any other appeal of this character, the opponent is entitled to raise for the Court's decision each and every objection which it has to the lawfulness and factual correctness of the District Court judgment with which it is burdened and with which it will remain burdened, unless it can secure relief from this Court. Only that approach will avoid confining the appellant's statutory right of appeal to a wholly artificial and empty entitlement to challenge the judgment entered against it except on that ruling inherent in the judgment which it claims to have been wrong. Only in this way will the Court avoid banishing the appellant to the artificial necessity to seek

URJ ELEFTHERIOU v WATER BOARD (Clarke AND Handley JJA) 7

relief for non-jurisdictional error of law on the face of the record. The appellant disdained to seek such relief, although an opportunity was afforded to it to do so. It asserts its right to appeal conferred by statute. And in my opinion it is correct to do

The claimant's objection to the competency of the opponent's appeal should be overruled. His motion should be dismissed with costs.

Clarke AND Handley JJA The proceedings before the Court involve an objection to the competency of an appeal by the Board from a final judgment given by Walsh ADCJ in an action for damages. On 9 May 1990 his Honour granted an application by the respondent for an order under s58(2) of the Limitation Act 1969 extending the limitation period. His Honour then heard and determined an action for damages brought by the respondent against the Board for breach of its duty as an employer. On 10 May the judge found a verdict for the plaintiff in the action and assessed damages at $26,375.

The Board appealed from the final judgment and in its notice of appeal challenged the correctness of the judge's order extending time under the Limitation Act. The respondent to the appeal has applied by summons to have the appeal struck out as incompetent. Counsel for the respondent relies upon the decision of this Court in Clutha Developments Pty Limited v Barry (1989) 18 NSWLR 86 as establishing that at the relevant time this Court had no jurisdiction to entertain appeals from orders made in the District Court under s58(2) of the Limitation Act.

Mr Coles, counsel for the appellant, submits that the decision in Clutha Developments Pty Limited v Barry is distinguishable because the present appeal is not from the order extending time as such, but from the final judgment in the action. The appeal from the final judgment is clearly competent, and Mr Coles submits that in that appeal the appellant may challenge any interlocutory decision in the action which has affected the ultimate result. In support of this submission we were properly reminded of Crowley v Glissan (1905) 2 CLR 402 and Smith v Tabain (1987) 10 NSWLR 562 at 566.

Mr Andrews for the respondent however has drawn our attention to the fact that one of the matters before this Court in Clutha Developments Pty Limited v Barry was the case of Costain Australia Limited v Noble where the appellant had purported to appeal from a final judgment and sought in such appeal to challenge the order for extension of time made by the judge immediately before the final hearing commenced. In that case counsel for the employer conceded that if it could not directly challenge the decision to extend time it could not attack the final judgment on the ground that the order extending time had been wrongly made. See above at 104-105. Accordingly the point now taken by Mr Coles was not taken in Costain Australia Limited v Noble and therefore that decision cannot determine the result in the present case. So much may be accepted. A judicial decision is not binding in respect of questions which are either conceded or not argued. See The Queen v Hughes [1866] LR 1 PC 81 at 92-93 and National Enterprises Limited v Racal Communications Limited [1975] Ch 397.

The question is whether the order of Walsh ADCJ extending time under the Limitation Act was made "in an action" within the meaning of s128(2A) of the District Court Act. The majority in Clutha held that an application for an order under s58(2) of the Limitation Act was "a proceeding ancillary to an action" (above at 101). It therefore followed that any order granting or refusing an extension was not made "in an action" and no appeal lay direct to this Court from such an order.

Mr Coles however drew attention to the fact that the order in the present case was made pursuant to a notice of motion filed in the action and he submitted that therefore it was an interlocutory order in the action itself and thus open to appellate review on an appeal from the final judgment. PtS Div 3 of the District Court Rules provides for applications under the Limitation Act to be made by originating motion. R7 in Div 3 states that the Division applies to "any proceedings, other than an action or appeal, brought in the Court under any existing or future Act other than the District Court Act". On the other hand, interlocutory motions in a pending action are dealt with by Pt16 of the Rules. R1 of Pt16 states that the provisions of that part "apply to an interlocutory or other application in or for the purposes of or in relation to any proceedings, other than an application by which proceedings are commenced under Pt5 Div 3."

The ultimate issue before this Court therefore is whether the order extending the limitation period was an "interlocutory or other order which has been made as a step in the proceedings leading up to the final judgment". See Smith v Tabain (above) at 566 per Mahoney JA. This is a question of procedure which is governed by the District Court Rules. As we have demonstrated under those rules the motion for extension of the limitation period is an originating motion under the statute, and as such is an independent proceeding which is separate from, although ancillary to the action. Accordingly an order extending or refusing an extension of time is not "a step in the proceedings leading up to the final judgment'. In our opinion therefore it is not open to the Board in its appeal from the final judgment entered by Walsh ADCJ in favour of the plaintiff to challenge the earlier order made by the judge extending the limitation period.

Nevertheless the Board's appeal from the final judgment in the action is competent, and cannot be summarily dismissed or struck out. However the first two grounds of appeal which specifically challenge the order extending the limitation period are not available to the appellant in the appeal. The relevance of those grounds having been fully argued in the present proceedings and the Court having come to a clear conclusion an order should now be made striking out those grounds of appeal.

The remaining ground of appeal is expressed as follows: "Such further or other grounds [as] may be open to the appellant upon obtaining a copy of the transcript of the reasons for judgment in the Court below".

While we appreciate the reasons which led the Board to include this ground in its notice of appeal it is not as such a proper ground of appeal and should also be struck out. Since it is possible that the Board does have other grounds of appeal against the final judgment which it wishes to pursue it is appropriate to grant leave to the Board to amend its notice of appeal within fourteen days and to further order that if no amendment is made within that period the appeal should be dismissed with costs.

In our opinion the following orders should be made.

Order that grounds 1, 2 and 3 in the notice of appeal failed on 6 June 1990 be struck out.

Grant leave to the appellant to amend its notice of appeal within fourteen days by filing an amended notice of appeal containing such such other grounds of appeal as the appellant may be advised.

If the notice of appeal is not so amended within fourteen days the appeal should be and is hereby dismissed with costs.

Order that the opponent pay the claimant's costs of the summons.

URJ ELEFTHERIOU v WATER BOARD (Clarke AND Handley JJA) 9

Order that grounds 1, 2 and 3 in the notice of appeal filed on 6 June 1990 be struck out;

Grant leave to the appellant to amend its notice of appeal within fourteen days by filing an amended notice of appeal containing such

5 other grounds of appeal as the appellant may be advised;

If the notice of appeal is not so amended within fourteen days the appeal should be and is hereby dismissed with costs; and

Order that the opponent pay the claimant's costs of the summons.

19 Counsel for the Appellant: K Andrews Counsel for the Respondent: B Coles Solicitors for the Appellant: Maurice May and Co

Solicitors for the Respondent: Solicitor for Metropolitan Water Sewerage and Drainage Board (Mr O' Keefe)

At a glance

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Judgment (58 paragraphs)

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Cases Cited (10)

Cited By (3)