Grusauskas v Deputy Commissioner of Taxation [2005] VSCA 49

Court of Appeal (Vic)|2005-03-04|Before: CHARLES and CHERNOV, JJ.A.

The applicant now seeks an extension of time within which to fill a notice of appeal from the decision of the judge. Affidavit material filed on behalf of the applicant demonstrates that his solicitor miscalculated the 14-day period required for filing a notice of appeal, with the consequence that the notice was filed one day out of time, on 9 February. The affidavit asserts that the delay was not the fault of the applicant, but was entirely the fault of the deponent's firm of solicitors, and was the result of an administrative error made by an articled clerk, and in consequence of the deponent's absence from the office at the relevant time.

A draft notice of appeal filed before this morning discloses that the grounds on which the applicant relies include that the judge made an error of fact in finding that the applicant withheld $78,832 for the purposes of Division 12 in Schedule 1 of the Taxation Administration Act 1953, in his capacity as a director of Rastas Resort Management Pty Ltd, and further, that any alleged non-compliance with the relevant taxation acts was the result of misappropriation of the financial records and funds of the company by another currently under investigation by the Australian Securities Investment Commission.

A further and different notice of appeal was handed to the Court this morning in which the sole ground relied on by the applicant is that her Honour erred in the exercise of her discretion by declining to grant the defendant's application made in person at the hearing of the summary judgment application for adjournment in order to obtain legal advice.

The transcript of the argument before the judge on 25 January last demonstrates that her Honour was informed that the unrepresented applicant sought an adjournment to consult his solicitor, who was due to return to Australia the next day, having been overseas in Thailand for much of December as well as January. The applicant sought an adjournment until the final hearing date of the action (2 May 2005), but was plainly under a misrepresentation then as to the process of case management by which the matter had been fixed for hearing on 2 May.

In the ordinary course one would have expected a judge, faced with a litigant in person in the circumstances previously outlined, unhesitatingly to have adjourned the matter for a short period (say a week or a fortnight) to enable that party to obtain legal advice. The fundamental importance in a judicial hearing of ensuring that each party has equal and proper opportunity to present his or her own case (which involves full and proper challenge to the case of the opposite party) is really too obvious to require authority; I refer to what was said by Marks J in Gas & Fuel Corporation v. Wood Hall and Leonard[1]. It has not been suggested that a delay of this order would have caused any damage to the respondent or that there was any particular urgency required. Any costs involved could have been protected by an order reserving them for later consideration. As Lord Salmon, speaking for the Privy Council, said in Maharaj v. Attorney-General for Trinidad and Tobago[2]:

"Their Lordships recognise how important it is not to waste judicial time. But if this can be avoided only by finding against a party without giving him a fair chance of being heard, then such a price for saving judicial time is far too high."

The judge, however, decided to continue with the hearing and invited argument as to whether there should be an adjournment. The applicant commenced to explain why it was that he needed an adjournment, which included not only that his solicitor was away on leave, but also that he needed to contact witnesses both in Victoria and interstate. The passages from the transcript already quoted show that he had proceeded to the point of saying that the case was not as clear-cut as (presumably it may have appeared to the judge at that point) when her Honour interrupted the applicant in mid-sentence and announced that she could not see any proper grounds for adjourning the application. Her Honour then forthwith heard the respondent's application for summary judgment. In my view, with respect, this was a clear breach of her Honour's obligation to hear both sides and a denial of natural justice to the applicant.[3]

Much was made, both by the judge and counsel for the respondent, of the fact that the applicant had not filed any answering affidavits. But this was explained by the applicant saying that he was not aware that he had to file affidavits on the application then before the Court. If the applicant's solicitor had been away overseas from the middle of December until late January, an explanation which seems not at all improbable for that time of year and which was not challenged, it was entirely understandable that the applicant should not have been aware that he was required to put affidavit material before the Court or that he was not ready to proceed on 25 January.

Before this Court Mr Moore (who did not appear below) accepted for the respondent that this Court has a discretion to extend time for granting leave to appeal and that ordinarily, particularly where the delay in filing a notice of appeal was due to the solicitor's mistake and was only for a day, there would be good ground for extending time. He argued, however, that it would be futile to extend the time and that the Court should not do so since the appeal is "hopeless".

Mr Moore did not concede that there had been a denial of natural justice by the judge, but he put it that even if there had been, in this case the applicant had no right to have that injustice put right on appeal. His argument was that the Court will not remit the matter when the respondent positively shows that he has no defence and that the hearing of the case would be futile. He submitted that even if the applicant below had been given a full opportunity of being heard, he would not have been better off, and he submitted that the Court will not permit hopeless cases to continue even if error is shown. In his submission the overriding principle is that it is not in the interests of justice to permit hopeless cases to proceed. Mr Moore put before us a convincing argument that the respondent's case is very strong indeed, and it may well be unanswerable.

In my view, however, the proceedings before the judge on 25 January involved a very clear breach of the judge's fundamental obligation, audi alteram partem. The unrepresented applicant was at an obvious disadvantage, he had stated that he needed to obtain advice from his solicitor who was returning the next day, he wished to speak to witnesses and he plainly was not ready to proceed before the judge. He had put no affidavits before the Court because he said he had not been aware that he was obliged to do so. To proceed to hear the matter and to grant the respondent final judgment was, in these circumstances, nothing less than proceeding without giving the applicant any real chance of being heard, and a denial of natural justice to him. One might add that even though the respondent's case might appear strong, even unanswerable, it is really impossible to say what prospect of success the applicant had of defending the action without having heard his case at all.

I would therefore grant the applicant an extension of time to enable him to file notice of appeal.

The parties had been informed by the Registry that, should an extension of time be granted, they should be prepared to continue on and argue the appeal, and Mr Moore did so.

Having heard Mr Moore's forceful submissions this morning, I remain firmly of the view that the applicant (as I shall continue to call him) was denied natural justice by the procedure followed by the judge. In addition, to the Gas & Fuel Corporation case, I refer to Maharaj v. Attorney-General for Trinidad and Tobago[4]; Queensland v. J.L. Holdings Pty Ltd[5]; Howarth v. Adey[6]; Walker v. Walker[7]; McColl v. Lehmann[8]; Magistrates' Court of Prahran v. Murphy[9]; Smith v. Gannawarra Shire

The respondent plainly has a strong case, and it may well be that the applicant has no defence to it. If this Court allows the applicant's appeal, it should do so without prejudice to the respondent being able to have her application for summary judgment heard without delay, once the applicant has had an opportunity to put affidavit material before the Court. Accordingly, in my opinion, the judgment below should be set aside with costs and the respondent's application for summary judgment remitted to the County Court for hearing before a different judge.

1. That the time fixed by the rules for filing a notice of appeal from the judgment of the County Court entered on 25 January 2005 be extended to 4 March 2005.

2. Upon the appeal being heard instanter, the Court orders:

(b) the judgment entered on 25 January 2005 is set aside;

(c) the respondent's application for summary judgment dated 2 December 2004 is remitted to the County Court for hearing before a different judge.

[1] [1978] VicRp 41; [1978] V.R. 385 at 404-405, and the cases there cited.