Horman v Distribution Group Ltd [2002] FCA 219 | Case summary

3 At the time of making those orders the learned magistrate had heard no argument as to costs. He indicated, in the reasons that he published on 27 July 2001, that he was prepared to hold any order in respect of costs in abeyance for a period of 14 days, so that the parties could appear before him and argue the matter within that time. He indicated that in the event that the parties did not wish to argue the matter of costs, then the orders that he would make would be that each party should bear its own costs of the proceedings. 4 It appears that, within that period, the respondent indicated that it desired the opportunity of arguing the question of costs. The first time at which it was possible for counsel and Raphael FM to reconvene for the purpose of arguing costs was 3 September 2001. On that day, after hearing argument, and for the reasons published on that day, Raphael FM ordered the respondent to pay the applicant's costs of the proceeding up to 2 January 2001 on the party/party basis and ordered the applicant to pay the respondent's costs of the proceeding after 2 January 2001 to be taxed, if not agreed. 5 It is not clear whether any of the orders made by Raphael FM have been taken out or entered. However, it is common ground that, pursuant to Order 52 rule 15, the time for filing notice of appeal from the orders made on 27 July 2001 expired on 17 August 2001 and the time for filing notice of appeal from the orders made on 3 September 2001 expired on 24 September 2001. This application was filed on 3 December 2001. It is common ground that no notice of appeal from any of the orders was filed within the time required by Order 52 rule 15. 6 Order 52 rule 15(2) provides that notwithstanding anything in rule 15(1) the Court or a judge of the Court, for special reasons, may at any time give leave to file and serve a notice of appeal. The respondent accepts that an error by a solicitor, for example as to the date on which orders sought to be appealed from were made, may constitute special reasons. In this matter, the applicant contends that some error on the part of her legal advisers constituted the special reasons contemplated by Order 52 rule 15(2). It is necessary, therefore, to consider the circumstances relied on as constituting those special reasons. 7 When the matter first came before me reliance was placed on an affidavit of the applicant's solicitor sworn on 28 November 2001. That affidavit contained the following assertion, which was admitted without objection: "7(a) The delay in bringing proceedings was not due to any want of prosecution by the appellant but rather to a communication breakdown between counsel for the appellant and the appellant's solicitor. In particular a draft appeal paper was sent to senior counsel to settle within time. Senior counsel had urgently prepared an appeal in another matter, at about the same time, and assumed that the appeal paper in this matter had been settled and filed. Due to senior counsel's absences in Melbourne and Adelaide, after that time, there was a break in communication between myself and senior counsel." 8 Having heard argument when the matter first came before me I indicated that I was not satisfied, having regard to the generality of that paragraph, that any special reasons were established. The matter was therefore adjourned to enable further evidence to be filed on behalf of the applicant. Further evidence in the form of a second affidavit sworn 18 February 2002 by Mr Robert Stephen, the applicant's solicitor, was put before me today. I shall summarise the circumstances as gleaned from that affidavit. 9 The reasons of Raphael FM were received by Mr Stephen on or about 30 July 2001. He says that there were no orders annexed to that judgment. I have understood that to mean that there were no formal orders, although the orders proposed by Raphael FM were attached to his reasons. There is no reason to doubt that, apart from the costs order, the orders were pronounced on 27 July 2001. 10 On 1 August 2001 Mr Stephen forwarded a brief to advise on appeal to Mr Rothman SC. I observe that Mr Rothman did not appear at the trial although Mr Rothman appeared on the argument concerning costs on 3 September 2001. On that day a conference was held. The applicant, Mr Stephen, and senior and junior counsel were present at the conference. At that conference senior counsel said words to the effect "it appears orders have not yet been made in this matter; the judgment does not accord with the proper form". 11 At that conference the applicant was advised that she had good prospects on appeal. She then gave conditional instructions to Mr Stephen to proceed to appeal. Whilst giving those instructions she said words to the effect: "go ahead with the appeal if the costs orders are against me and if it seems I have good prospects, I am left with no other choice". Following that conference, which appears to have taken place after the argument on costs but before the pronouncement of orders and reasons, Mr Stephen attended to take written reasons and the costs orders were pronounced by Raphael FM. 12 On 13 September 2001 another conference took place. Present were Mr Stephen, and senior and junior counsel for the applicant. During that conference it was confirmed that the applicant had good prospects of success on appeal. Senior counsel verbally gave an outline of appeal points and further advised: "Proper orders have not yet been made. For more abundant caution in case I'm wrong draft appeal points should be prepared. Draft orders should also be prepared." 13 It is not entirely clear what senior counsel had in mind by the observations be made about orders and judgments not according with proper form. No evidence has been given by senior counsel. As I have said, however, there is no reason to doubt that the orders were pronounced on the days that I have indicated. 14 On 18 September 2001 junior counsel forwarded to Mr Stephen, by facsimile, draft grounds of appeal and a draft form of orders. Mr Stephen understood that those documents were to be submitted to senior counsel to be settled. Accordingly, on 18 September 2001, he transcribed the draft grounds into a Notice of Appeal, sent that document to senior counsel together with the draft form of orders. While the draft notice of appeal is before me, I have not seen the draft orders; that again leaves in some obscurity the question as to what troubled senior counsel about the form of the orders and why it was necessary to prepare any further orders. 15 On 25 September 2001 having heard nothing from senior counsel in relation to the matter, Mr Stephen telephoned senior counsel's secretary. He inquired as to the progress of the appeal and was advised that senior counsel had been absent from chambers and in Melbourne and Adelaide, and that the secretary would ring Mr Stephen back. 16 On 27 September 2001 Mr Stephen obtained from the applicant a signed application for fee exemption or waiver in case the decision was made to proceed to appeal. Thus it seems that at that stage no final decision had been made to appeal from any of the orders. On that day Mr Stephen received a copy of the transcript of the argument as to costs and forwarded a copy by mail to senior counsel. Mr Stephen says that at some stage it had been decided that senior counsel would consider that transcript and confirm to the applicant his opinion as to prospects of success on appeal prior to any formal decision being made to proceed with an appeal. 17 Between 28 September and 3 October 2001 Mr Stephen was engaged in relation to another urgent matter and from 3 October to 22 October he was preparing to wind down his sole practice in order to join another firm of solicitors as an employed solicitor. He has no record of any further communication with senior counsel prior to 22 October 2001, when he wrote to senior counsel asking whether or not the draft appeal paper that had been forwarded to him previously was suitable for lodging. The letter said that the applicant wished to commence the appeal as soon as possible. There was, apparently, no response to that letter and on 8 November 2001 Mr Stephen sent another communication to senior counsel referring both to a letter from Freehills dated 7 November 2001 and to Mr Stephen's earlier letter to senior counsel enclosing the draft notice of appeal. 18 In his communication of 8 November 2001 Mr Stephen asked senior counsel to settle the notice of appeal urgently and, if necessary, a leave application in the event that the matter was out of time. On the same day, Mr Stephen telephoned senior counsel's chambers and was told that his secretary was sick and that senior counsel was away from chambers. He left a message with senior counsel's clerk, requesting that senior counsel ring him. Apparently that request elicited no response from senior counsel. 19 On 12 November 2001, Mr Stephen again telephoned senior counsel's chambers. He received a message from senior counsel's secretary saying that she had been searching everywhere for the appeal but could not find it. She said that senior counsel was in Adelaide, but that "he thought it had been done". Mr Stephen asked that senior counsel ring him back. 20 Finally, on 13 November 2001 senior counsel deigned to respond to Mr Stephen's inquiries. A telephone conversation took place between senior counsel and Mr Stephen to the following effect: Mr Stephen: "I was wondering how you were going with the settling of the appeal papers in Horman?" Senior Counsel: "Hasn't that been filed?" Mr Stephen: "No." Senior Counsel: "I thought it had been." Mr Stephen: "My memory is that I sent a draft to you and you were going to settle it." Senior Counsel: "Well we could be out of time and we may need to do a leave application." Mr Stephen: "Well when we first discussed this you thought the orders had not been made as they were not in proper form." Senior Counsel: "Didn't we discuss getting the appeal on." Mr Stephen: "My memory is that you said we should get it on for more abundant caution." Senior Counsel: "Well I think you should get it on straight away, just file the one you have." Mr Stephen: "Is it okay to file?" Senior Counsel: "Well there are variations in form. It's okay, just get it on." 21 On 14 November 2001 Mr Stephen forwarded, by post, to the Registrar of the Federal Court an application for leave to appeal, a notice of appeal, a notice pursuant to Order 52 rule 15(A)(2) (which deals with the dispensing of a written case), an application for fee exemption or waiver and a statement of financial position. Some days after lodgment of those documents, Mr Stephen received a letter from the Deputy District Registrar of the Federal Court indicating that the form of the documents submitted was incorrect. Following receipt of that communication, Mr Stephen arranged for corrected documents to be filed. That appears to have occurred 3 December 2001. 22 The facts that I have described and summarised briefly indicate a sorry state of affairs so far as the legal representation of the applicant is concerned. Mr Stephen says that his usual practice is to avoid filing documents in appellate courts without first obtaining advice on the matter from senior counsel. That may well be a prudent course. It is however, not a course that could be recommended when it results in documents being filed many weeks out of time. 23 On the material before me the conduct of Mr Stephen Rothman SC appears to have been somewhat lacking. I make that observation, of course, in the absence of any indication from Mr Rothman to suggest that the inferences that might be drawn from the facts that I have described should not be drawn. They do suggest an unfortunate lack of attention on the part of senior counsel in light of the number of inquiries by Mr Stephen. 24 The circumstances that I have described go well beyond mere error. They suggest to me a lack of diligence on the part of the lawyers representing the applicant. It is one thing for a lawyer to make a mistake as to the time within which a notice of appeal should be filed. Such an error, if made reasonably, may well constitute special circumstances. Time limits for appeals are highly desirable so that successful parties can be sure of some finality in relation to litigation to which they are parties. However, justice will sometimes require that time for filing an appeal be extended in such special circumstances where a genuine mistake is made. 25 From the point of view of the respondent in this case there is no evidence of any hint or warning, prior to service of this application, that the applicant proposed to take the step of appealing from the orders of Raphael FM. I do not consider that it would be just in all the circumstances to extend the time in the absence of any attempt on the part of those advising the applicant to intimate to the respondent an intention to appeal. Nevertheless, if I were satisfied that there were some reasonable prospect of success on appeal and of the bona fides of the applicant in seeking leave to file the notice of appeal out of time, it may have been appropriate to grant an indulgence to the applicant's lawyers. 26 I observe that there has been no offer from any of her lawyers to bear the costs that might be occasioned by this proceeding. So far as the applicant is concerned, I have no doubt that this is a matter of some importance. The evidence before me indicates that, while she was successful in obtaining an order for compensation in the sum of $12,500, the effect of the Raphael FM's order for costs is that she will be very substantially out of pocket. The respondent's solicitors have written to Mr Stephen asserting that the respondent incurred legal costs from 3 January 2001 in excess of $138,000. Further, I have no reason to doubt that the applicant seeks in good faith to appeal, at least from the orders made on 3 September 2001. 27 The inference I would draw from the circumstances that I have summarised above is that, but for the costs order, there would have been no appeal from the determination of Raphael FM. I am not persuaded that the applicant genuinely seeks to appeal from the orders made on 27 September. However, having considered the proposed grounds of appeal, I am not satisfied that the appeal, if leave to file the notice of appeal out of time were granted, would have any prospects of success. 28 Thirteen grounds of appeal are specified in the draft notices of appeal annexed to Mr Stephen's affidavit of 28 November 2001. They are as follows: "2. The findings were against the weight of the evidence; 3. The Court adopted a standard of credit worthiness for the Appellant's witnesses which was inconsistent with the standard adopted for the Respondent's witnesses; 4. The Court erred in admitting the evidence of Dr Khoo for the purpose to which it was admitted; 5. The Court erred in relying on the evidence of Dr Khoo as that evidence went only to the issue of credit and should not have been admitted; 6. The Court erred in relying on the evidence of Dr Tattersall as that evidence went only to the issue of credit and should not have been admitted; 7. The Appellant was denied procedural fairness by the manner in which the notes of Dr Khoo and Dr Tattersall were admitted without the Appellant being given the opportunity to call these doctors or cross examine them; 8. The findings of fact were against the weight of evidence and were not reasonably open to have been made; 9. The Court failed to give any or any sufficient weight to the endemic environment of sexual harassment and sexual discrimination in the work place; 10. The compensation and damages awarded to the Appellant was unreasonably low; 11. The costs order made by the Court was contrary to principal; 12. The reasoning of the Court in giving the costs order was internally inconsistent; 13. The costs order was unjust in the circumstances; and 14. The effect of the costs order tends to subvert the purpose of the Acts." 29 I have had the benefit of detailed argument from senior counsel for the respondent as well as from Mr Stephen as to the possible merits of the appeal. Grounds 2 and 8 appear to overlap almost completely. There has been no attempt by the applicant in the course of argument to identify which findings are said to be against the weight of evidence. Senior counsel for the respondent clearly put that in issue in the course of argument as a basis for contending that that ground had no prospects of success. The only response was that this was a matter to be addressed in the substantive appeal by way of submissions and by the adducing of further evidence. That is of no assistance to the Court in determining whether or not there are prospects of success. 30 Mr Stephen, in the course of argument, foreshadowed that an application would be made to the appellate court for leave to adduce fresh evidence. The evidence is to be in the form of four affidavits. Three of the affidavits were sworn on 16 February 2000 by Salko Zerdo, Subba Zerdo and Glenn Horman, the respective father, mother and husband of the applicant. Those affidavits are said to go to a question that was dealt with by Raphael FM concerning evidence before him that the applicant had a relationship at the relevant time with a man called "Michael". The affidavits are suggested to support a finding that that finding by the magistrate was erroneous. 31 There was no indication given to me that any of those three witnesses was unavailable to give evidence, indeed, the applicant's husband did give evidence and was asked about the very matter to which his affidavit relates. I do not consider that it is conceivable that leave would be given to rely on any of those affidavits on the hearing of the appeal. The fourth affidavit was sworn by Dr Robert Khoo on 18 February 2002. I shall deal with that briefly when I come to deal with grounds 4, 5 and 6. 32 Raphael FM's reasons indicate that the case turned upon the applicant's credibility as a witness. No attempt has been made to advance any arguments to me on the hearing of this application to suggest that Raphael FM did not take proper advantage of the opportunity which he had to see and hear witnesses or that he failed to appreciate the weight or bearing of established circumstances or that it can be demonstrated that the decision was clearly wrong on grounds which do not depend on mere credibility. 33 In his reasons, Raphael FM recited the following propositions as those that would guide him in his findings of fact: "Tribunals and courts of law are frequently asked to decide which of two versions of a series of facts they accept. It is often a very difficult task, particularly where both witnesses are credible. The decisions are made with the benefit of a number of factors. Perhaps the most important is each witness' demeanour in the witness box, his or her method of giving the evidence, the way questions are answered in cross-examination, the willingness to acknowledge the possibility of error and changes in recollection due to the passage of time. Other matters that would be looked at would be the interest that the witness might have in the outcome of the proceedings and the inherent likeliness or unlikeliness of the evidence when considered with the background of the known facts. Finally most tribunals or courts seek to find some form of corroboration from other evidence of whatever nature. The decision that is made is not always one between believing one witness and not believing another or holding that one witness is telling the truth and the other is lying. More often than not the decision comes down to the preference of one recollection over another. Recollection is notoriously unreliable." No criticism was made of those principles and there is no reason to doubt that Raphael FM followed those principles in making his findings of fact. 34 There was what was described by Raphael FM as "a thorough and penetrating attack" upon the applicant's credibility. In the absence of any submission as to how the findings made by Raphael FM were against the weight of evidence, I do not consider that there is any prospect of success of either grounds 2 and 8. 35 I do not understand ground 3. Mr Stephen was invited to formulate the standard of credit worthiness adopted by Raphael FM in relation to the appellant's witnesses on the one hand and the respondent's witnesses on the other but was unable to do so. I regard the ground of appeal as meaningless. Having regard to the passage that I have just cited, Raphael FM made it clear that he had carefully assessed the demeanour of all witnesses, the method of giving evidence, the way questions were answered in cross-examination and the like. There is nothing in the judgment to suggest any inconsistency between his approach to the evidence given by the applicant's witnesses on the one hand and those called on behalf of the respondent on the other. Indeed, His Honour ultimately rejected much of the evidence given by one of the respondent's witnesses. 36 Grounds 4 and 5 are concerned with error in admitting the evidence comprising Dr Khoo's notes mentioned earlier. It was the respondent's case that the applicant initiated and participated in inappropriate behaviour that occurred in the respondent's premises. Three of the respondent's witnesses claimed that the applicant had made statements to them concerning the shaving of her pubic hair. That was denied by the applicant. 37 The applicant placed before Raphael FM a report of Dr Khoo, which formed the foundation for an award of damages in her favour. The respondent, on the other hand, subpoenaed Dr Khoo's notes. Access to the subpoenaed notes was available to the applicant before the hearing in the sense that there is no reason to doubt that the ordinary access would be available. The applicant was cross-examined to a number of issues raised by those notes and ultimately a small part, which concerned the applicant shaving her pubic hair, was admitted into evidence without objection. 38 The evidence comprising Dr Khoo's affidavit also included notes of Dr Tattersall. Again the whole of the document was admitted without objection. There was no possible substance and grounds for 5 or 6. It is odd for the applicant to suggest, or for it to be suggested on her behalf, that she was not given the opportunity to call Dr Khoo and Dr Tattersall. The applicant, as I have said, tendered a report from Dr Khoo. Dr Khoo was in a sense, in her camp. There is no reason why she could not have called Dr Khoo or asked Dr Khoo about the notes in order to explain them. There is no suggestion that any request was made for the opportunity of calling Dr Khoo to rebut the inferences which were clearly and fairly foreshadowed in the cross-examination of the applicant. I therefore do not see any prospect of this ground being established. 39 Similarly, I have difficulty understanding what is meant by ground 9. There has been no attempt to articulate what is meant by it or what follows from it. The respondent conceded that there was certain behaviour in its premises which was inappropriate. So much is recorded in the reasons of Raphael FM. On the other hand, His Honour found that the applicant was actively engaged in much of that conduct. Accordingly, I do not see any prosect of success of this ground. 40 Ground 10 concerns the quantum of damages. It became apparent in the course of argument that the proposition that compensation was unreasonably low was based on the assumption that the appellant would be successful in the other grounds. No submission was made as to the inadequacy of the quantum on the assumption that the applicant failed in relation to the other grounds. If the applicant was successful in the other grounds then it would be necessary for the Appellate Court either to assess damages in the circumstances of those findings or alternatively to remit the matter to the Magistrates' Court for further hearing. That is not a separate ground of appeal and I do not consider there is anything in ground 10. 41 Grounds 11, 12, 13 and 14 are all concerned with the question of costs. Raphael FM made his orders as to costs having regard to the terms of a compromise offer sent by the respondent's solicitors to Mr Stephen on 18 December 2000. By that letter the respondent offered to settle the matter on the following basis: (a) payment to the applicant of $40,000 less any amount required to be deducted for taxation purposes; (b) each party bear their own costs; (c) the applicant to discontinue certain proceedings in the Federal Court; and (d) entry by the applicant into a deed of release in a form acceptable to the respondent. The offer was expressed to remain open until 5pm on Thursday 21 December 2000. 42 On 22 December 2000 the respondent's solicitors received a response to the letter of 18 December 2000, which constituted a counter offer and, therefore, a rejection of the offer made by the respondent. One of the complaints made in relation to this matter is that the letter of 18 December 2000 could not fairly be characterised as a Calderbank offer because it gave an unreasonable time for acceptance. Clearly the fact that Mr Stephen was able to respond with a counter offer, thereby rejecting the initial offer, indicated that adequate consideration had been given to the offer. It hardly lies within his mouth now to say that there was inadequate time to consider the offer. In any event the offer was extended until 5pm on 2 January 2001. 43 The letter of 22 December 2000 constituted an offer to settle on the basis of payment of $40,000 plus one half of legal costs in the Human Rights Commission and in the Federal Magistrates' Court proceedings. The letter quantified the contribution to costs sought in the figure of $6000. An inference can fairly be drawn that, as at that time, the total costs that had been incurred were no more than $12,000. Raphael FM concluded that, having regard to the reference to taxation, the letter of 18 December 2000 was "defective as a Calderbank letter". The learned magistrate considered that, because of the reference to taxation, it was impossible for the applicant to calculate the amount which she would receive "in her hand". Nevertheless, it is apparent that those advising the applicant were able to assess that because in fact, they rejected the offer by making the counter offer of 22 December. 44 There is no technical requirement for a Calderbank letter. The question of costs is a matter for the discretion of the court. Raphael FM concluded that, notwithstanding the rejection of the offer of 18 December 2000, the applicant could have settled her case on the basis of a payment of $40,000 less costs of approximately $13,000, being twice the figure of $6,000 referred to by Mr Stephen. His Honour concluded that that money would actually be paid to her gross and that she would have to account for her own tax in accordance with a determination of the Australian Taxation office to which His Honour referred. 45 His Honour concluded that it was almost impossible for the figure, even after the payment of tax, to be reduced below the value of $12,500, plus costs to date, which was the eventual award. His Honour concluded, therefore, that the offer of 18 December 2000 was, on any calculation, better than that which the applicant eventually received in the proceeding. That, it seems to me, was a fair and rational approach to be adopted by Raphael FM in the exercise of his discretion. Nothing has been advanced to indicate that His Honour adopted a wrong principle or that the exercise of his discretion miscarried. I do not consider that there are any prospects of success on any of the grounds relating to the costs order. 46 It follows from what I have said that I am not persuaded that there is any prospect of success in this appeal if leave to extend the time for filing the notice of appeal were granted nunc pro tunc. Coupled with the circumstances surrounding the delay, which seems to sit very substantially at the feet of senior counsel, I do not consider that this is a case where leave should be given pursuant to Order 52 rule 15(2). Accordingly I consider that the application should be dismissed. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Horman v Distribution Group Ltd

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Judgment (2 paragraphs)

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