Hassett v Vrzina [2006] NSWSC 22 | Case summary

JUDGMENT 1 His Honour: The plaintiff is a solicitor. The defendant is said by him to be his former client. 2 The plaintiff purported to act for the defendant in a matter that arose from a property dispute. He gave a tax invoice to the defendant in respect of the alleged legal services. The invoice was in an amount of almost $10,000. 3 The plaintiff brought proceedings in the Small Claims Division of the Local Court to recover the alleged legal costs. 4 Proceedings in that division were then governed by Amended Practice Note 3/2001. The proceedings progressed in accordance with the procedures prescribed by that practice note (including the giving of directions for the exchanging and filing of witness statements). 5 At the pre-trial review, the plaintiff made known that he wished to cross-examine all defence witnesses. As a consequence, the Registrar made a direction that defence witnesses were to be in attendance for cross-examination at the date of hearing. The action was fixed for hearing on Monday 2 May 2005 at 2pm. 6 The defendant complied with the directions. The plaintiff did not. 7 The hearing of the proceedings came before Harvey LCM. The parties appeared in person. All defence witnesses were present for cross-examination. 8 Shortly after the commencement of the hearing, the Magistrate dealt with the question of cross-examination of witnesses. Her observations were as follows:- HER HONOUR: Look it is not about - okay, let us just stop you for a moment. It is not about the substantive matter. What I am saying is that we have a Small Claims Division matter listed for half an hour and a note from a registrar to cross-examine. I have had another matter today. Browood (?) [sic] seems to be keen on cross-examination. The latest amended practice note from the Chief Magistrate clearly states that a formal hearing is no longer available. If the parties want to cross-examine it goes off to the General Division and the incumbent costs et cetera go with it, but the Small Claims Division is not the division in which to have cross-examination, it is simple as that. Have a seat because you have got a far bigger issue to contend with which is your statements Mr Hassett were filed in this Court on 2 May 2005, that is today. [Tr p1] 9 There was no application for transfer to the General Division. 10 Her Honour heard submissions from the parties on the question of non-compliance with directions by the plaintiff. She then observed as follows:- HER HONOUR: Given the strong opposition from the defendant who has complied with the directions, the issue is of course whether there would have been a denial of natural justice. That issue was thoroughly canvassed in the decision of Olivari (?) [sic] in the Supreme Court last year where in fact Mr Olivari has simply filed his statement one day late against the directions of this Court, that is the Small Claims Division, and those statements were not allowed in. In this case we have in fact the plaintiff who has filed with the Court today and I gather with faxed copy to the defendant on Friday. Today of course is Monday. The reasons given have not satisfied me that there would be any denial of natural justice. Mr Hassett, you had ample opportunity in accordance with the directions. You initiated these proceedings in October last year. The evidence should have well been at hand at that time in commencing the proceedings. There is no reason for the statements not to have been filed in accordance with the directions and I THEREFORE DO NOT ALLOW THOSE STATEMENTS IN TODAY. ENTER VERDICT AND JUDGMENT FOR THE DEFENDANT - JUDGMENT FOR THE DEFENDANT. The parties may be excused, thank you. [Tr p4] 11 On 30 May 2005, the plaintiff filed a summons in this court. It purports to bring an appeal from the decision of the Local Court. The relief sought is, inter alia, a setting aside of the judgment. The summons puts forward the following grounds:- 1. There has not been a full hearing and/or assessment on the merits of the case. 2. The Assessor exceeded her powers. 3. The Assessor misused her powers. 4. A lack of procedural fairness. 5. A denial of natural justice. 12 The appeal was heard on 1 February 2006. The plaintiff was represented by counsel. The defendant was not legally represented. Largely, it could be said that his case was presented by his daughter. At the commencement of the hearing, counsel for the plaintiff made it clear that his client was relying in this appeal on grounds 4 and 5 only (which raise the same issue). 13 As this is an appeal brought in the case of proceedings in the Small Claims Division, an appeal lies only on the grounds of lack of jurisdiction or denial of natural justice (error of law does not assist the plaintiff). In this case, the Court clearly had jurisdiction. Therefore, the only area of challenge open to the plaintiff is denial of natural justice. 14 The Practice Note contains the following:- 3. Where a direction has not been given at the Pre-trial review by the Magistrate, Assessor or Registrar for the attendance of any witnesses at the hearing of the action, the action will be heard and determined by each party tendering the written statements of witnesses together with any other relevant documentation or material in support of the party's case. There will be no right to examine or cross-examine any witness. Parties will, however, be entitled to make comments, present arguments and make final submissions on the evidence. 4. Where a direction has been given at the Pre-trial review by the Magistrate, Assessor or Registrar, that a witness attend for cross-examination, the action will be heard and determined on the written statements and other documents and materials and the oral evidence. Submissions on the evidence will also be allowed. 5. The option of a 'formal hearing' - "the normal adversarial hearing, evidence being taken on oath, cross-examination and addresses" - will no longer be available in the Small Claims Division, such a procedure being repugnant to the Division's object of providing litigants with "a fast, cheap, informal but final resolution of their disputes" (Attorney General's Second Reading Speech, 22 November 1990). Where the court is of the opinion that the issues likely to arise in the action or cross-claim are so complex or difficult as to law or fact, or that the action or cross-claim is of such importance that it should not be heard in the Small Claims Division, the court may order its transfer to the General Division. Such an order may be made at any time before judgment on the court's own motion or on the application of any of the parties. 6. The procedure at the hearing of the action in the Small Claims Division will be determined by the Magistrate or Assessor. 15 Before proceeding further, I should mention one matter. It concerns the refusal by the Magistrate to receive the witness statements as evidence in the proceedings. Counsel has informed the court that the plaintiff intended to rely on two witness statements only. One was made by the plaintiff himself. The other was made by a barrister (Mr Baskerville). 16 These were the witness statements that were not exchanged and filed in accordance with the directions. It appears that material was not served on the defendant until the Friday preceding the Monday hearing and that all of it may not have been available to the defendant until the day of the hearing. 17 As I understand what was said by counsel in this appeal, it was the intention of the plaintiff to conduct his case by adducing the two witness statements as the only evidence in his case and to then cross-examine all of the defendant's witnesses. 18 It appears from what was said from the bar table that some pleading of the issues may have taken place. The pleadings are not before the court and the content of that material is not known to it. From what was also said from the bar table, it appears that liability was in dispute (at least one of the issues was whether or not the defendant gave instructions for the legal services which are the subject of the claim). 19 It appears from what was further said from the bar table that the claim does not relate to all of the services said to have been performed by the plaintiff, but merely to part thereof (services performed during the period 12 June 2004 to 11 August 2004). It seems to be common ground that the defendant was in hospital at some stage when the alleged services were provided and that the plaintiff was having difficulty in obtaining instructions. Indeed, on 25 June 2004, he purported to give notice of cessation of representation (see Exhibit 1). 20 In this appeal, the plaintiff does not complain that the refusal by the Magistrate to allow him to rely on the two witness statements brought about a denial of natural justice. He accepts the approach that was taken in Oliveri Legal Pty Limited v Lohning International Pty Limited [2004] NSWSC 987. This seems to me to be a proper stance to take. 21 The plaintiff had a reasonable opportunity to comply with the directions and what he offered by way of explanation for non-compliance fell short of being satisfactory. No error on the part of the Magistrate has been sought to be demonstrated in relation to what she did in respect of that matter. 22 The matters that are complained of fall into two areas. The first area concerns the refusal to allow cross-examination of the defendant's witnesses. The second area concerns what is said to be a failure to allow the plaintiff to present his case and to give him a fair hearing on the merits (inter alia, to make submissions). 23 It was argued that the Magistrate was obliged to allow cross-examination in the light of the direction that had earlier been given by the Registrar. In my view, that contention is erroneous. In any event, in the circumstances of this case, it seems to me that an entitlement to cross-examination would not have assisted the plaintiff. 24 In my view, the tenor of the Practice Note makes clear that there will be no cross-examination unless a direction has been given at the pre-trial review for the attendance of the particular witnesses that are intended to be cross-examined. 25 I do not consider that a direction given by a registrar at the pre-trial review binds the magistrate hearing the action. I consider that the procedure to be followed at the hearing is in the hands of the magistrate or assessor conducting that hearing. Paragraph 6 of the Practice Note emphasises that this is the case. 26 What is recorded in the transcript reveals that there was no hearing in the sense that the parties were given an opportunity to adduce evidence and to make submissions on the merits of the claim. There was an entry of judgment consequent upon the Magistrate refusing the plaintiff's attempt to rely on the witness statements. 27 Whilst what was done in this respect may be said to be a denial of natural justice, it seems to me that the real question is whether or not it had any effect on the result in the case. 28 The plaintiff was placed in the position where he had to prove his case. This would seem to have involved adducing evidence as to the work done and as to the value of that work. There was also a contentious issue as to whether or not he had instructions to perform the services that were the subject of his claim. 29 In the circumstances, the plaintiff was confronted with an impossible task. He had no evidence that he could adduce on these matters. He was unable to make out a prima facie case. The Magistrate did not have to have regard to the witness statements of the defendant . Accordingly, an entitlement to cross-examine the defendant's witnesses would not have assisted the plaintiff. In the context of such an evidentiary void, the plaintiff could not have made any submissions which would have affected the result. 30 It may be that the hearing should have been conducted differently. Be that as it may, the reality was that the plaintiff's claim came to be doomed to failure because he had put himself in a position where it was unsupported by evidence. In such circumstances, the Magistrate was entitled to enter judgment for the defendant. 31 The cursory entry of judgment consequent upon the non-admission of the statements into evidence did no more than effectively bring about an expeditious disposition of the case. 32 It should also be observed that this is a small claim and that the purpose of the setting up of the Small Claims Division was to provide litigants with a fast, cheap, informal and final resolution of disputes. The claim has already occupied considerable court time. It is in the interests of both the parties and the public, that this dispute be brought promptly to an end. 33 The appeal fails. The summons is dismissed. The plaintiff is to pay such costs (if any) as the defendant may be entitled to recover. The exhibit may be returned. **********

Hassett v Vrzina

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Judgment (10 paragraphs)

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Cases Cited (1)