Gulf Conveyor Systems Pty Limited v Gulf Integrated Solutions Pty Limited - [2020] FCA 1534 - FCA 2020 case summary — Zoe

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Gulf Conveyor Systems Pty Limited v Gulf Integrated Solutions Pty Limited

[2020] FCA 1534

Federal Court of Australia|2020-10-22|Before: Adam P, Thawley J

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At a glance

Source facts

Court

Federal Court of Australia

Decision date

2020-10-22

Before

Adam P, Thawley J

Source

Original judgment source is linked above.

Judgment (20 paragraphs)

[1]

The amended application for leave to appeal be dismissed.
The applicant pay the respondents' costs.
The parties file within seven days short minutes of order giving effect to the agreed variation of Order 3 made on 28 August 2020 in proceedings NSD 2216 of 2018. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

[2]

THAWLEY J: 1 This is an amended application for leave to appeal a decision of the primary judge adopting a report dated 1 July 2020 (hereafter referred to as "R") of a Senior National Judicial Registrar who had been appointed a referee to conduct an inquiry into two questions in the proceedings, namely: (a) whether security for costs should be granted; and (b) if so, in what amount: Gulf Conveyor Systems Pty Ltd v Gulf Integrated Systems Solutions Pty Ltd [2020] FCA 1245 (hereafter referred to as "J"). By consent, the adoption hearing before the primary judge was held on the papers. The primary judge adopted the referee's report in whole, making orders on 28 August 2020 including that the applicant provide security for the respondents' costs in the sum of $727,000. 2 The amended application for leave to appeal contained 17 grounds. During oral argument, the applicant's solicitor abandoned grounds 1, 4, 8, 11, 14. 3 The applicant relied on the following evidence: (1) an affidavit of Mr Benjamin dated 18 September 2020; (2) oral evidence given during the hearing by Mr Benjamin; (3) a Court Book of 90 pages which included, amongst other things, the referee's report and the primary judge's decision; (4) paragraph 17(c) of an affidavit of Ms Colantonio dated 5 December 2019; (5) the applicant's written submissions before the referee, dated 10 February 2020, comprising 269 pages including annexures; (6) the applicant's amended written submissions before the referee, dated 9 March 2020, comprising 288 pages including annexures; (7) the applicant's written submissions before the primary judge, dated 27 July 2020; (8) the respondents' written submissions before the primary judge, dated 31 July 2020; (9) the applicant's written submissions before the primary judge, dated 3 August 2020; (10) the respondents' written submissions before the primary judge, dated 7 August 2020.

[3]

Leave to appeal 4 An appeal cannot be brought from an interlocutory judgment of the Court constituted by a single Judge exercising the original jurisdiction of the Court, unless the Court or a Judge gives leave to appeal: s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). 5 The question of whether leave to appeal should be granted turns on whether: (1) the decision giving rise to the orders from which the applicant wishes to appeal is attended with sufficient doubt to warrant its being reconsidered by a Full Court; and (2) substantial injustice would result if leave were refused: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399. 6 As was stated in Decor at 399, quoting Sharp v Deputy Commissioner of Taxation (1988) 19 ATR 908 at 910, these two issues are interrelated: [T]he sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments. They bear upon each other, so that the degree of doubt which is sufficient in one case may be different from that required in another. Ultimately, a discretion must be exercised on what may be a fine balancing of considerations. 7 Leave to appeal is less readily given where the issue is one of practice and procedure: Decor at 400; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 (Gibbs CJ, Aickin, Wilson and Brennan JJ); United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520 at 532 (Davies, Wilcox and Gummow JJ); Minogue v Williams (2000) 60 ALD 366 at [19] (Ryan, Merkel and Goldberg JJ). In Adam P Brown at 177, Gibbs CJ, Aickin, Wilson and Brennan JJ said (footnotes omitted): Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively. Cases can be cited in support of both views: for example, on the one hand, Niemann v Electronic Industries Ltd; on the other hand, De Mestre v A D Hunter Pty Ltd. For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In re the Will of F B Gilbert (dec): ... I am of opinion that, ... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal. 8 The Court is not required to provide extensive reasons when deciding whether leave to appeal should be granted. Often "little more may be required than a short, perhaps very short, statement of the chief conclusions which the judge refusing leave has reached": Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) (2001) 207 CLR 72 at [26] (Gaudron, Gummow, Hayne and Callinan JJ).

[4]

Adoption of referee's report 9 The Court has power to refer a proceeding or questions in a proceeding to a referee, and to deal with the resulting report as it thinks fit, including by adopting it in whole or in part or varying or rejecting it: s 54A of the FCA Act; Federal Court Rules 2011 (Cth) r 28.67. 10 The principles concerning adoption were summarised by McDougall J in Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784 at [7]: (1) An application under Pt 72 r 13 [the former NSW equivalent of r 28.67] is not an appeal either by way of hearing de novo or by way of rehearing. (2) The discretion to adopt, vary or reject the report is to be exercised in a manner consistent with both the object and purpose of the rules and the wider setting in which they take their place. Subject to this, and to what is said in the next two sub paragraphs, it is undesirable to attempt closely to confine the manner in which the discretion is to be exercised. (3) The purpose of Pt 72 is to provide, where the interests of justice so require, a form of partial resolution of disputes alternative to orthodox litigation, that purpose would be frustrated if the reference were to be treated as some kind of warm up for the real contest. (4) In so far as the subject matter of dissatisfaction with a report is a question of law, or the application of legal standards to established facts, a proper exercise of discretion requires the judge to consider and determine that matter afresh. (5) Where a report shows a thorough, analytical and scientific approach to the assessment of the subject matter of the reference, the Court would have a disposition towards acceptance of the report, for to do otherwise would be to negate both the purpose and the facility of referring complex technical issues to independent experts for enquiry and report. (6) If the referee's report reveals some error of principle, absence or excessive jurisdiction, patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason for rejection. In this context, patent misapprehension of the evidence refers to a lack of understanding of the evidence as distinct from the according to particular aspects of it different weight; and perversity or manifest unreasonableness mean a conclusion that no reasonable tribunal of fact could have reached. The test denoted by these phrases is more stringent than "unsafe and unsatisfactory". (7) Generally, the referee's findings of fact should not be re-agitated in the Court. The Court will not reconsider disputed questions of fact where there is factual material sufficient to entitle the referee to reach the conclusions he or she did, particularly where the disputed questions are in a technical area in which the referee enjoys an appropriate expertise. Thus, the Court will not ordinarily interfere with findings of fact by a referee where the referee has based his or her findings upon a choice between conflicting evidence. (8) The purpose of Pt 72 would be frustrated if the Court were required to reconsider disputed questions of fact in circumstances where it is conceded that there was material on which the conclusions could be based. (9) The Court is entitled to consider the futility and cost of re-litigating an issue determined by the referee where the parties have had ample opportunity to place before the referee such evidence and submissions as they desire. (10) Even if it were shown that the Court might have reached a different conclusion in some respect from that of the referee, it would not be (in the absence of any of the matters referred to in sub para (6) above) a proper exercise of the discretion conferred by Pt 72 r 13 to allow matters agitated before the referee to be re-explored so as to lead to qualification or rejection of the report. (11) Referees should give reasons for their opinion so as to enable the parties, the Court and the disinterested observer to know that the conclusion is not arbitrary, or influenced by improper considerations; but that it is the result of a process of logic and the application of a considered mind to the factual circumstances proved. The reasoning process must be sufficiently disclosed so that the Court can be satisfied that the conclusions are based upon such an intellectual exercise. (12) The right to be heard does not involve the right to be heard twice. (13) A question as to whether there was evidence on which the referee, without manifest unreasonableness, could have come to the decision to which he or she did come is not raised "by a mere suggestion of factual error such that, if it were made by a trial judge, an appeal judge would correct it". The real question is far more limited: "to the situation where it is seriously and reasonably contended that the referee has reached a decision which no reasonable tribunal of fact could have reached; that is, a decision that any reasonable referee would have known was against the evidence and weight of evidence". (14) Where, although the referee's reasons on their face appear adequate, the party challenging the report contends that they are not adequate because there was very significant evidence against the referee's findings with which the referee did not at all deal, examination of the evidence may be undertaken to show that the reasons were in fact inadequate because they omitted any reference to significant evidence. (15) Where the court decides that the reasons are flawed, either on their face or because they have been shown not to deal with important matters, the court has a choice. It may decline to adopt the report. Or it may itself look at the detail of the evidence to decide whether or not the expense of further proceedings before the referee (which would be the consequence of non adoption) is justified. 11 In Sheehan v Lloyds Names Munich Re Syndicate Ltd [2017] FCA 1340 at [10], Allsop CJ emphasised a number of matters, including that: the Court should be reluctant to allow factual issues determined by a referee to be reargued; some error of principle, absence or excess of jurisdiction or patent misapprehension of the evidence should generally be demonstrated to justify the rejection of the referee's report; the Court will generally not reconsider disputed questions of fact where there exists factual material that is sufficient to entitle the referee to reach the conclusions that he or she did, particularly where the disputed conclusions are made in a technical area in which the referee possesses appropriate expertise; the discretion to reconsider a referee's factual findings will generally only be exercised if the findings are such that no reasonable finder of fact could have made that finding.

[17]

Grounds 3, 16 and 17 35 Ground 3 was that the primary judge erred at J[36] in rejecting the applicant's submission that the failure of the referee to address the applicant's submissions dated 9 March 2020 in the report "led to a finding that no reasonable finder of fact could have made". The applicant accepted in oral submissions that the transcript of the hearing before the referee made it clear that the referee had considered the applicant's amended submissions dated 9 March 2020. The applicant's real complaint was that the referee failed to refer to the submissions in her reasons. 36 Ground 16 asserted that the primary judge erred in adopting the report in circumstances where the referee failed to refer to the majority of the applicant's 10 February 2020 submissions and 9 March 2020 amended submissions. 37 The applicant's complaint in relation to Ground 16(a), as put in written submissions, was that the referee did not have regard to the written submissions and only had regard to the oral submissions. The complaint, as put in oral submissions, departed from the written submissions. The complaint as put in oral submissions amounted to a contention that the referee ought to have accepted what the applicant had submitted in writing or, perhaps, that the referee should have drawn inferences from the material contained in the submissions before the referee in accordance with the submissions put to the Court orally on this application. 38 Extensive oral submissions were made on this application, many of which included allegations of criminal conduct. Some of these submissions departed from those which had been made in writing on this application. The applicant did not establish that the specific matters put to the Court on this application were ones specifically put to the referee. 39 The applicant did not establish on this application that it had established before the primary judge that the referee reached conclusions which were not open or that she failed to reach a conclusion based on a submission and substantial evidence such that it could be said that the referee did not undertake the task or that she made a decision which no reasonable decision-maker could have made. The applicant did not establish any arguable error on the part of the primary judge to the extent its submissions on this application covered the same ground as that put to her Honour. 40 The applicant's written submissions on this application contended in relation to Grounds 16(b), (c) and (d) that neither the referee not the primary judge addressed the following paragraphs of its written submissions dated 9 March 2020: [28], [30], [31(e)]. The referee did consider those written submissions, as the primary judge concluded, and as the applicant conceded on this application. The applicant did not establish that the referee's reasons were inadequate. It was not the primary judge's role to address each of the submissions which the applicant had made to the referee. The primary judge's role was to consider whether the referee's report should be adopted. That did not require the primary judge to undertake again the task undertaken by the referee. 41 The applicant's written submissions on this application contended in relation to Grounds 16(e), (f) and (g) that the primary judge failed to address the following paragraphs of its written submissions dated 9 March 2020, being written submissions before the referee: [31(a)], [31(b)] and [31(d)]. It was not the primary judge's role to address each of the submissions which the applicant had put in writing to the referee. It was the referee's role to consider those submissions. The primary judge's role was to consider whether the referee's report should be adopted in whole, in part or at all. To the extent the applicant's submissions should be read as an allegation that the referee failed to consider its submissions, it is clear that the referee did consider the submissions. 42 As to Ground 17, the applicant submitted that the failure of the primary judge to make reference to the failure of the referee to address significant evidence, gives rise to sufficient doubt to warrant reconsideration of the primary judge's judgment on appeal. The applicant did not establish that there was a failure on the part of the referee to have regard to significant evidence. The primary judge stated at J[47]: On any view of the matter, the failure to specifically mention the particular allegations of criminal conduct does not warrant the rejection of the report. In any case, on the face of the report, the referee had regard to the material to which she was taken. She simply concluded that it did not support the allegations and, as a result, could not weigh against the grant of security. 43 These conclusions were not shown to be attended with sufficient doubt to warrant granting leave to appeal. 44 The applicant has not established that there is sufficient doubt about the primary judge's orders to warrant a grant of leave to appeal.

Gulf Conveyor Systems Pty Limited v Gulf Integrated Solutions Pty Limited

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