Huang v Drumm

Supreme Court of NSW|2018-08-14|Before: Davies J, Mr J

The Local Court proceedings

On 23 January 2015 the plaintiff, Biru Huang, commenced proceedings in the Local Court of New South Wales against Bernard Drumm. By a Second Amended Statement of Claim filed 14 June 2016 the plaintiff sought an order that Mr Drumm pay her the sum of $77,193.70 pursuant to an alleged oral contract, in the alternative as a result of "unjust enrichment". In a Reply dated 17 November 2016 the plaintiff alleged an estoppel arising from what was said to be an acquiescence by the defendant in the plaintiff continuing to advance money to him.
The amount of the claim was in two parts. The plaintiff claimed $34,793.70 in respect of costs and disbursements paid by the plaintiff, allegedly on the defendant's behalf, in proceedings in this Court against a Dr Mackintosh between July 2011 and September 2014. The second part of the claim was for $42,400 in respect of documents stored at the plaintiff's premises in Brisbane, allegedly on the defendant's behalf, between May 2011 and November 2014. The claim was particularised at a rate of $200 per week for 212 weeks.
The Supreme Court proceedings commenced in 2010 (the SC 2010 proceedings) involved a trust known as Corporate Consulting Services Trust which sought to recover a sum for professional services provided on behalf of the Trust by a Mr Neville James Gibson to Dr Mackintosh. The plaintiffs in that claim were Mr Gibson who was the final beneficiary of the Trust, the defendant as trustee of the Trust and a Ms Xiao Yan Huang. One of Mr Gibson's sisters, Donna Ojia, had been the trustee of the Trust until 2010. At that time the Trust was known as the Neville James Gibson Family Trust. At some time around April 2010 its name was changed to Corporate Consulting Services Trust, and the defendant was appointed trustee on the retirement of Mr Gibson's sister.

The appeal to this Court

On 30 November 2017 the plaintiff filed a summons in this Court appealing against the judgments of the Magistrate. On 18 April 2018 she filed an amended summons containing some 17 grounds in relation to the principal judgment and six grounds in relation to costs. The amended summons expressly said that it was brought under s 39 of the Local Court Act 2007 (NSW).
By a notice of motion filed 12 April 2018 the defendant sought orders that the summons be dismissed pursuant to r 12.7 Uniform Civil Procedure Rules 2005 (NSW) on the basis of a want of due dispatch of the appeal. In the alternative, orders were sought that the summons be struck out under r 14.28 on the basis that the appeal as pleaded in the amended summons was embarrassing and/or did not disclose grounds of appeal identifying errors of law.
The motion was heard by Adams J on 18 April 2018. Her Honour declined to dismiss the summons on the basis of a lack of due dispatch but struck out a large number of the grounds of appeal on the basis that they did not identify errors of law.
The remaining grounds are these: 7. His Honour in the court below was plainly wrong at law and fell into error in excluding evidence the plaintiff put forward in the form of affidavits the defendant filed in the 2010 Proceedings on the basis of implied undertaking referred to in the decision of Hearne v Street (2008) HCA 36 235 when the decision of Hearne did not apply to the evidence that the plaintiff put forward. 10. His Honour in the court below was plainly wrong at law and fell into serious error that was determinative of the decision reached by predetermining the decision and excluding evidence put forward by the plaintiff. This led to an intolerable procedural unfairness and prejudice in the decision making of the Magistrate - and a failure to fairly, justly and independently consider the evidence of each of the parties in determining the outcome that can only be corrected by setting aside the decision reached. 13. His Honour in the Court below was plainly wrong at law and fell into significant error by demonstrating a bias and an apprehended bias - against the plaintiff's primary witness James Gibson and in failing to appreciate or significantly appreciate the evidence before the court that would have led to a different result - and after advising the parties during the course of the hearing that the Court had already decided the matter before it - thereby predetermining the matter before it - and when the evidence and examination of witnesses had not yet concluded - and in the further circumstances of the Court showing actual bias - and an apprehended bias - against the plaintiff's primary witness by: [a] Criticising his evidence when his evidence was accurate, concise and based on and supported by contemporaneous documents. [b] Imbedding into the transcript reference to a historical case of the plaintiff's primary witness James Gibson in which credibility findings were made so as attention could be drawn to it on any appeal when the court ruled that no weight would be given the decision and it would not be read. [c] Linking the evidence of the plaintiff's primary witness James Gibson to his former occupation as a dentist when it had not bearing on the matters the court was requested by the plaintiff to determine and was calculated to harm the plaintiff's primary witness James Gibson in his professional capacity and in the eyes of any person reading the decision of the court and when the reference had no relevance to the matters the the court were called on to determine. The references were calculated to harm the plaintiff's primary witness as a non-practicing but qualified dentist. [d] Making inappropriate references to the plaintiff's primary witness during the plaintiff's closing submissions and in delivering an oral judgment including that the plaintiff had not yet reviewed her association with the plaintiff's primary witness. This predetermined bias, prejudice, and humiliation before the court led to an intolerable prejudice and injustice and led to a decision that is unsafe. [e] Excluding evidence of the plaintiff that revealed the correct factual position to arrive at a predetermined result. [f] Cutting short the plaintiff's re-examination of the Plaintiff's primary witness to leave uncontested cross-examination evidence adduced prejudicial to a fair, just and independent outcome - and cutting short and varying the headings the plaintiff was directed to commit to writing in concluding her cross-examination of the defendant but was prevented from cross-examining the defendant on. [i] Directing the defendant's counsel as to the form of its closing submissions and failed to consider fairly, independently and justly the submissions put forward by the plaintiff - after predetermining the outcome and result. [j] Disregarding instructions by the defendant to solicitors acting for him who at law only the defendant could instruct to reinforce a predetermined result. [k] Raising with the parties that the plaintiff's case was between two protagonists - the defendant and the plaintiff's primary witness - when the case was between the plaintiff and the defendant. [m] Raising that the defendant was a nominal plaintiff and the plaintiff's primary witness was driving the 2010 Proceedings. [n] Raising that all payments made on behalf of Drumm were made at the direction of the plaintiff's primary witness, James Gibson, when he was only the conduit between the plaintiff and the defendant and the plaintiff's primary witness on the evidence was called upon to assist Drumm in the prosecution of his claim as trustee of NJGFT/CCST and in the further circumstances that the defendant billed NJGFT/CCST for his accountancy services as trustee of NJGFT/CCST in accordance with his right to do so pursuant to the provisions of the Deed of Trust Creating the NJGFT. [o] Allowing the defendant's counsel to interpose further evidence during the re-examination of the plaintiff's primary witness and permit the defendant's counsel to put questions to the defendant which had a direct bearing on Equity Proceedings commenced by the plaintiff against the defendant and which had no relevance to the matters the court was being asked to decide - and upon which evidence that court then made findings as to the defendant's evidence being preferred to assist the defendant in those other proceedings. This led to an intolerable prejudice to the plaintiff and her case and was materially significant to its outcome - and were matters relating to the plaintiff's Equity Proceedings. [p] Excluding evidence of the plaintiff's primary witness that the parties agreed had been admitted into evidence in the proceedings. Costs 17. The court below plainly erred at law in determining that the plaintiff's notice of motion filled on 22 November 2018 seeking Gross Sum Costs Orders in relation to these costs not captured by the Gross Sum Orders sought by the defendant could be deemed an application made in accordance with Rule 36.16 (3A) of the UCPR and could be dismissed on the basis - and in the further circumstances that the plaintiff was allowed at law to bring a competing gross sum costs order pursuant to s 98(4) and s 99 of the Civil Procedure Act 2005 (NSW) ("CPA 2005 (NSW)) - to which application costs were sought against non-party solicitors pursuant to s 99 of the CPA 2005 (NSW) as to any costs awarded. 18. The court below plainly erred at law in denying the plaintiff an adjournment for 'acts of god' outside her control allowing the defendant to obtain costs orders uncontested and in circumstances that evidence had been put forward of disentiting conduct by defendant and his legal advisor's would have had a materially significant impact on the costs awarded - including the award of indemnity costs - and in the further circumstances that the plaintiff had advised the court of the cause of her being unable to attend court on 23 February 2018 and those reasons where genuine. This led to an injustice. 19. The court below plainly erred in the award of indemnity costs when evidence was before the court demonstrating that the defendant was only prepared to settle the plaintiffs claim if the plaintiff agreed to a 'global settlement' of other claims afoot between the plaintiff and defendant - such settlement offers put forward by the defendant disentitling an indemnity costs order. 20. The court below plainly erred in the award of costs in the circumstances of the evidence that the plaintiff had placed before the court - and all the surrounding circumstances - and accordingly the costs order were unjust. 21. The costs lacked proportionality on the evidence the plaintiff placed before the court. 22. The costs awarded where contrary to the interests of justice in all the circumstances. (errata in grounds as pleaded)

Procedural matters

The plaintiff was legally represented in the Local Court proceedings up to the end of the second day's hearing. Thereafter she acted for herself although she seems to have had some considerable assistance from Mr Gibson.
After the hearing before Adams J the proceedings were adjourned to the Registrar's List on 30 April 2018. On that day there was no appearance for the plaintiff. The Registrar fixed the matter for hearing commencing 14 August 2018 with a two-day estimate. Directions were made in relation to the preparation of a court book that was principally to be prepared by the defendant. However, a direction was made that the plaintiff was to serve any supplementary volume to the court book by 4 June 2018. The plaintiff was also directed to serve written submissions on the defendant by 4 June 2018.
The defendant duly prepared a court book but that court book was not supplemented by any material from the plaintiff. The plaintiff did not serve written submissions by 4 June 2018 or at all until during the hearing before me.
On the evening of 8 August 2018 the plaintiff filed and served a notice of motion seeking an order that the appeal be adjourned "pending independent investigation of corruption of court process" and an order seeking to "strike in" grounds of appeal 5, 8, 14, 15, 16 and 17 that had been struck out by Adams J on 18 April 2018. The plaintiff filed an affidavit in support which said that she had assembled some 40,000 to 50,000 documents in relation to Corporate Consulting Services Trust. She said that from an examination of those documents there was an orchestrated campaign against Mr Gibson which amounted to a criminal enterprise, with the result that the matters needed to be investigated "by the Corruption Commission and other relevant independent governmental bodies prior to my appeal being heard". The affidavit attached a large number of documents which appeared to go to the substance of the proceedings in the Local Court. The affidavit also suggested that her grounds of appeal had been unfairly and inappropriately removed from her appeal, and she sought that they be reinstated.
The plaintiff also relied on an affidavit that she had sworn on 6 July 2018. She said she made that affidavit to set out the difficulties she had encountered in preparing her submissions on the appeal. The affidavit complained of the striking out of the grounds of appeal by Adams J and sought that the matter be re-listed to have the grounds "struck back in". The affidavit said that she wished to advise that she had been in China between 5 and 29 June 2018.
The application for an adjournment was referred to the List Judge, Fagan J on 10 August 2018.
The transcript of that day relevantly discloses the following: HIS HONOUR: I have read the descriptions of the documents and I've read your affidavit, but Ms Huang, there is no justification for an adjournment of the hearing next week. This appeal occupied some 15 days in the Local Court and the judgment in it was given over eight months ago and the case has now been listed with two days set aside next week. It's not going to require two days but the judge is available to hear it commencing on Tuesday, and it simply can't be adjourned. There isn't a justification for it. Now do you intend to appear in person in the Court in Sydney next Tuesday? APPLICANT: Yes. HIS HONOUR: The case will go ahead that day. Mr Elliott has prepared some submissions in writing in opposition to your appeal. Have you prepared any submissions in writing? APPLICANT: I'm still working on it, due to the large amount of material. … HIS HONOUR: I suggest, Ms Huang, that in order to make the proceedings efficient next week and in order to get your arguments across to the judge who hears the case, you would be well-advised to complete your written submissions. You are certainly not going to be accorded two days to speak about the matter. It will be treated as quite a short hearing and it will serve you well to have everything that you want to say in writing. APPLICANT: Okay. Thank you. HIS HONOUR: Especially as you are representing yourself in person, it will be easier for you to organise your thoughts beforehand and put them in writing and ensure what you want the judge to understand about your arguments is set out clearly.
Despite what had been said by Fagan J, and instead of preparing written submissions, the plaintiff swore a further affidavit on 11 August 2018 which was filed on the morning of 12 August. In that affidavit the plaintiff said that she made the affidavit in support of the adjournment of the hearing of the appeal. She said that the affidavit was a supplement to her earlier affidavit of 8 August 2018. The affidavit, some 91 paragraphs in length, annexed with explanations a large number of documents that appeared to relate to the documents she had annexed to her affidavit of 8 August 2018.
When I received the file in this matter on 13 August, I asked my Associate to write to the plaintiff directing that her submissions be emailed to my Associate as soon as possible on 13 August 2018. On the morning of 14 August 2018 my Associate found an email sent at 10:54pm on 13 August from the plaintiff saying that she had only just seen my Associate's email. She said she was struggling "to meet time" with the body of material she had. She said she was still working on her submissions and she would send them through as soon as she was able to do so.
When the matter was called on for hearing before me on 14 August 2018 the plaintiff again sought an adjournment. I refused the adjournment. In doing so, I had regard to what Fagan J had said in response to the plaintiff's application on 10 August 2018. I also considered that there was no proper basis justifying an adjournment or any further delay in hearing the present appeal. The matter involved a claim for $77,000 which had taken 15 days to hear and determine in the Local Court. The appeal to this Court was filed on 30 November 2017 and had not been significantly advanced until the defendant's motion of 12 April 2018. The costs were already vastly disproportionate to the amount in issue.
I enquired of the plaintiff about her written submissions and she told me that she was still working on them. She thought that the hearing had been fixed for two days which, she suggested, would have enabled her to complete the submissions by the second day. I informed her, partly because of what Fagan J had told her regarding the hearing and partly because I considered that a two-day hearing in all the circumstances was out of proportion to the issues raised on the appeal, that the matter would conclude in one day.
Mr Gibson was present. The plaintiff asked if he could assist her as a Mackenzie friend. I permitted him to act in that role. Mr Gibson then sought to be added as a party to the appeal on the basis that he had been a witness in the court below. I declined to join him to the appeal. I considered that there was no proper basis on which he ought to be a party to the appeal. He had not been a party to the proceedings below and there was nothing to suggest that he had any interest in the outcome of the appeal.
The plaintiff then commenced to address me. It was apparent that she was not able to make submissions and answer my questions without constant prompting from Mr Gibson. Eventually the plaintiff requested that Mr Gibson be given leave to make submissions on her behalf. The defendant did not consent to this course. However, having regard to the fact that English was clearly the plaintiff's second language and having regard to her need constantly to enquire from Mr Gibson what she should say, I considered that the better course was that he be permitted to address me. At the conclusion of his submissions I enquired of the plaintiff if Mr Gibson had addressed me on all of the matters the plaintiff wished to raise. She indicated that he had.

Ground 7: The Hearne v Street issue

The background to this issue, as best I could understand it from what Mr Gibson told me, was that the plaintiff wished to cross-examine the defendant on affidavits he had sworn in the SC 2010 proceedings to show that there were inconsistencies between those affidavits and documents created or signed by the defendant at earlier times.
The issue particularly arose during cross-examination of Mr Drumm on 25 July 2017. Objection was taken by counsel for the defendant that the plaintiff had not been able to establish that the affidavits which she sought to put to the defendant were able to be used in that way because of the implied undertaking that they would only be used in the proceedings in which they were sworn and filed. The learned Magistrate explained to the plaintiff about the implied undertaking without mentioning Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 by name, but by simply referring to what the High Court had said. The following exchange then occurred (at court book 1367): HIS HONOUR: Now, Mr Elliot takes objection because in relation to questions about this affidavit, because he says and I don't know but it's not part, it belongs to some other proceedings or is not part of the record in these proceedings. You understand? PLAINTIFF: Yes.
A little later on, and immediately before the luncheon adjournment on that day, the Magistrate handed to the plaintiff a copy of Hearne v Street and referred her particularly to paragraphs [46]-[65].
A little later on that day the plaintiff wished to ask further questions of the defendant in relation to inconsistencies between documents and his affidavits. The following exchange occurred: ELLIOTT: I have two affidavits here of 30 October 2014, both with - the signatures are a bit cut off, they look a little bit --- HIS HONOUR: What's the situation? Do you ask questions about? With consent, may she ask questions about the documents or not? ELLIOTT: Look, I won't object. Whilst I've raised a formal objection, the matter has sort of tangentially been covered by Mr Drumm's evidence anyway, so --- HIS HONOUR: There's no objection taken and no suggestion to be made that there is a contempt being committed. Thank you, Mr Elliott. Let's go forward in this instance. ELLIOTT: I will say, it is a matter for Ms Huang. If she is tendering a document that somehow puts her in breach of obligations in another court, then that is a matter for her. I simply put that on the record. HIS HONOUR: I understand. What do you want to do? PLAINTIFF: Can I attend to --- HIS HONOUR: Do you want to show that to Mr Gibson? Sorry, give me back exhibit 9 to start with. Thanks. You want to tender that affidavit, do you? PLAINTIFF: Yes. ELLIOTT: I don't know that I accept that it's a tender. If it wants to be put to the witness and used in a particular way. HIS HONOUR: That's what I thought, but I just - Mr Elliott is saying you can't tender it, but you can ask questions about it. PLAINTIFF: Okay.
The affidavit of Mr Drumm sworn 18 October 2013 was marked MFI Y. Counsel for the defendant said: Your Honour, I haven't objected. Ms Huang can now use it. She should use it in the manner she thinks fit.
The plaintiff then continued to cross-examine Mr Drumm, and he made admissions that what appeared in certain paragraphs of that affidavit contradicted notes on his file made in October 2010. He said the file note was correct. His explanation for what was contained in the affidavit was that it had been prepared by Mr Gibson and emailed to him to have it signed urgently. He said he did not read the affidavit in great detail at the time.
Immediately before adjourning on that day the transcript discloses the following: HIS HONOUR: All right. I'm adjourning till tomorrow morning. Tomorrow morning, you need to give to Mr Elliott before the Court starts - a list of the topics that you say you have for cross-examination that you haven't finished. Do you understand? PLAINTIFF: Yes, your Honour. … HIS HONOUR: No, that is fine and I should keep my bib out of it, so don't complain. If there is in that second affidavit, Ms Huang, what you allege to be another inconsistent statement, Mr Elliott is not objecting that. I will allow you to cross-examine about that in the morning but anything further, A, you are going to have to let Mr Elliott know exactly what it's about and you will need a copy of it for me and B, you are at a point where you will be asked to justify why in the interests of justice I should allow this cross-examination to continue any further. Do you understand? PLAINTIFF: Yes, your Honour. Thank you.
The following day, the plaintiff provided to the defendant's counsel a list of topics. That document was marked AA in the court below and was marked Exhibit 1 at the hearing before me. The document did not refer to any of the affidavits sworn by the defendant in the SC 2010 proceedings. Nevertheless, the plaintiff cross-examined the defendant about inconsistencies in his affidavit of 30 October 2014 (the transcript refers to the affidavit as being sworn on 13 October but that is a transcript error). Again, the defendant agreed that his earlier notes were correct and the affidavit was incorrect. The plaintiff thereafter tendered the affidavit sworn by Mr Drumm in October 2014. It was admitted as Exhibit 10.
The Magistrate then asked the plaintiff what questions she wanted to ask the defendant. She said that she had an email. The following exchanges then occurred: HIS HONOUR: You can either cross-examine about something, or you can tender documents, but you can't stand at the bar table and tell me what you've got. PLAINTIFF: I have an email from Mr Alex Tees, direct email to Mr Drumm and Mr Yanni. ELLIOTT: If Ms Huang wants to tender individual documents, that can be dealt with at the end and she needs to reopen her case. HIS HONOUR: At the moment, look, there's two matters. Firstly, Mr Elliott has allowed you during the course of cross-examination and at other points to tender documents. When you closed your case at the end of the re-examination of Dr Gibson, in effect, without my leave or the consent or Mr Elliott, your right to introduce evidence ceased. If you wish to tender documents, individual documents, as Mr Elliott has just put it, I will deal with an application for leave to re-open your case in relation to that after you finish your cross-examination of Mr Drumm. Do you understand? PLAINTIFF: Yes. HIS HONOUR: Now, I've asked you to address the topics on your list. Either you start that, or I'll just close the cross-examination down. PLAINTIFF: I have another --- HIS HONOUR: Are you listening to me? PLAINTIFF: Yes. HIS HONOUR: I just told you, any documents that you just want to tender into evidence I will deal with after you have finished the cross-examination of Mr Drumm. If you want to show them to Mr Drumm as part of the cross-examination, you are, if it's covered by one of your topics and it is not repetitive of earlier cross-examination, then use the document in the appropriate way. But it is now a quarter to 11. Start cross-examining on the list you provided this morning. Do you understand? PLAINTIFF: Yes, I have a document about Mr Kumar to Mr Drumm, letter to Mr Drumm I want to attend (as said).
At the conclusion of the defendant's evidence the Magistrate said this to the plaintiff: HIS HONOUR: Over the luncheon adjournment, Mr Elliott hasn't closed his case yet, but he is going to consider whether there are other documents that haven't been tendered he is going to seek put into evidence. Whether he gets them into evidence or not will be a matter for me to decide, having been informed as to your attitude to such things. But you will remember when you started cross-examining Mr Drumm again this morning you tendered what is now exhibit 9, I think it became, didn't it? Then you were asked to start asking questions and you started indicating you had more documents you wanted to tender. Do you remember what I'm talking about? PLAINTIFF: Yes, your Honour. HIS HONOUR: Mr Elliott said at the time that that was a matter to be dealt with on the basis of you making an application to reopen your case and me considering the admissibility of the documents. Do you understand that? PLAINTIFF: Yes, your Honour. HIS HONOUR: The normal procedure is that a party is expected to present all the evidence in its case, particularly the plaintiff, before the defendant commences his case. However, it is open to a party, in this case you, the plaintiff, to seek the leave of the Court to be allowed to reopen your case. In the normal course of events, amongst other things, it would require you to persuade me that it's in the interests of justice that I allow you to reopen that case and that to reopen the case does not place the defendant at an unfair disadvantage. … Now, if you wish to try and tender any further documents, you are going to have to make such an application, do you understand? PLAINTIFF: Yes, your Honour. In what timeframe? HIS HONOUR: Pardon? PLAINTIFF: In what timeframe. HIS HONOUR: Today. PLAINTIFF: Before 4 o'clock? HIS HONOUR: No, just after 2 o'clock PLAINTIFF: Okay. … Now, in relation to the tendering of further documents, if you would give Mr Elliott a copy of those between now and 2 o'clock, he would form an opinion as to whether (a) he would resist the leave the application for leave to reopen; and (b) whether he would resist the tender and, if I was going to allow you to reopen, whether he would be able to indicate to you whether he intended to object to them. Do you understand? PLAINTIFF: Yes. HIS HONOUR: So you've got until 2 o'clock to do that. You've got until 2 o'clock to decide whether you've got any further evidence in your case. … LUNCHEON ADJOURNMENT Have you been handed any documents at all during lunchtime? ELLIOT: No, your Honour. HIS HONOUR: Thanks, Mr Elliot. Mr Elliot, I can't see the point of me sitting here --- ELLIOT: No, your Honour.
An issue then arose about whether documents marked as MFIs had been admitted into evidence. The transcript discloses the following: HIS HONOUR: No, the answer to your question is those documents are not part of the evidence yet because they are what's called marked for identification, which I explained to you earlier on, I thought. When a document is marked for identification, it is not part of the evidence, but it's given - all those documents, a bundle of them - an identifying letter, in this case, because it allows everybody to refer easily to it and if it's shown to somebody else at a later date, it can be referred to by that identifying letter so that people know it's the same document that had been shown to somebody or the same person earlier. I explained to you before lunch, you finished your evidence when you finished your re-examination of Dr Gibson. Before you can tender any material, you need to seek leave to reopen your case. And in relation to that, Mr Elliot is entitled to be heard, firstly as to the leave to re-open, and secondly as to the tender of the documents. These were - you did not provide these to Mr Elliot during the luncheon adjournment as I asked, am I correct? PLAINTIFF: Yes. HIS HONOUR: I'm not going to rule that that's fatal to any application you're making, but the whole purpose of it was to try to move the thing along efficiently. … So, the first thing you need to do is tell me you want to make an application to re-open your case, do you understand that? PLAINTIFF: Yes. HIS HONOUR: For what purpose do you wish to re-open the case? To tender that bundle of documents? PLAINTIFF: No, just a couple of question to Mr Drumm regarding to ---
The learned Magistrate then permitted the defendant to be recalled for further cross-examination. When that was concluded the following exchanges occurred: HIS HONOUR: I've dealt with the application to be granted, the application for Mr Drumm to be recalled in relation to that one matter. You indicated you wanted to do something with that bundle of documents that has a tag MFI Q on it. Do you wish to make an application for me to allow you to put into evidence further material? PLAINTIFF: Your Honour, through the --- HIS HONOUR: Madam, I would have thought that's a yes or no answer as you like to ask the witnesses. Do you wish to apply to be allowed to reopen your case to present further evidence? PLAINTIFF: No, your Honour. HIS HONOUR: Do you wish to apply for to do anything else before I ask Mr Elliott to start addressing? PLAINTIFF: To start? HIS HONOUR: For Mr Elliott to start placing before me his arguments as to why I would not be satisfied that Mr Drumm owes you the money. Do you have any other application you wish to make? I'm not saying any application will get granted. I'm not saying there should be, but there are matters that you have raised over the last two days which have just been left in abeyance. PLAINTIFF: Your Honour, I apply to send those file notes for forensic tests. … PLAINTIFF: Your Honour, what the witness admitted maybe it's a false representation. HIS HONOUR: What, so he's falsely admitted that - that you'd ask me to accept that he deliberately lied in his affidavit because of the inconsistency with the two other affidavits. Therefore, you now want to prove that he may have lied about the basis upon which you want me to find that he did lie. I think I've heard enough, madam. PLAINTIFF: I don't press --- HIS HONOUR: You don't press it? PLAINTIFF: Yes. HIS HONOUR: All right. Do you have any other application you wish to make before I call on Mr Elliott? PLAINTIFF: No, your Honour. HIS HONOUR: All right. You abandon any other applications by leave, do you? I'm not inviting you, I'm just making sure on the record - I don't want to have Mr Elliott start to address and then you say to me, "No, by the way, your Honour, I missed something." So just take a minute and think about it. PLAINTIFF: Can I take a minute to leave the court? HIS HONOUR: Do you mean can you have a minute to go and speak to Mr Gibson like he just indicated? Is that what you're asking, Miss --- PLAINTIFF: Yes, your Honour. HIS HONOUR: Mr Elliott. ELLIOTT: I oppose this course, your Honour. It's only --- HIS HONOUR: I think it's improper too, Mr Elliott. Sit down. Madam, without me giving you a chance to go out and talk to Mr Elliott [scil. Mr Gibson], as he just indicated, despite what he's been told on more than one occasion from the bench whilst he's in the back of the court and indeed whilst he was in the witness box, do you have any further application? PLAINTIFF: No, your Honour. HIS HONOUR: Thank you. That concludes the evidence, I believe, Mr Elliott.
His Honour then explained to the plaintiff that all the evidence in the matter had concluded. He said that evidence consisted of all the documents that had been tendered, which meant all the documents in the court books and included the exhibits tendered in her case which numbered 1-10. He said it included all of the evidence that had been given by witnesses in the witness box in the course of examination in chief, cross-examination and re-examination.
Counsel for the defendant then commenced his closing address. The matter was subsequently adjourned to 1 November 2017 so that addresses could be completed.
In the interim, the solicitors for the defendant wrote to the plaintiff on 25 September saying this: 1. We refer to the above matter. 2. We note that the hearing of this matter resumes on 1 November 2017 before Magistrate Barnett SC. 3. As you know, evidence has now closed and oral closing submissions have commenced. 4. On 1 November 2017, once counsel for Mr Drumm has finished his oral closing submissions, you will be expected to address the Court orally in respect of your case. Evidence 5. We assume that you have tendered all evidence upon which you seek to rely upon in relation to your case. 6. We enclose a copy of our record of all documents tendered by the parties and admitted into evidence. For the avoidance of doubt, documents marked "MFI", meaning "Marked for Identification" have not been admitted into evidence. 7. If you intend to seek leave on 1 November 2017 to re-open your case and tender further documents, please provide us with a copy of the documents by 5:00pm, 20 October 2017 and we will seek instructions as to whether our client consents to the documents being tendered. 8. If we do not receive any documents from you by the deadline above, we will assume that you do not propose to tender any further documents in relation to your case.
The solicitors wrote again on 20 October 2017 saying this: 1. We refer to our enclosed letter of 25 September 2017. We have not received any response from you. 2. We again draw your attention to the fact that the hearing of this matter resumes on 1 November 2017 before Magistrate Barnett SC. 3. As you know, evidence has now closed and oral closing submissions have commenced. 4. On 1 November 2017, once counsel for Mr Drumm has finished his oral closing submissions, you will be expected to address the Court orally in respect of your case. Evidence 5. We again enclose our copy of the record of all documents tendered by the parties and admitted into evidence. For the avoidance of doubt, documents marked "MFI", meaning "Marked for Identification" have not been admitted into evidence. 6. In our letter dated 25 September 2017, we requested that you provide us with any further documents that you propose to seek leave to tender into evidence by 5:00pm, 20 October 2017. We have not received any documents from you, and therefore assume that you do not intend to seek leave to tender further documents. 7. We are mindful of the fact that you have now returned to Australia after spending some time in China and as a litigant in person you may therefore require further time time to consider and attend to such matters. 8. Accordingly, in the event that you intend to seek leave to re-open your case when the hearing resumes on 1 November 2017 to tender further documents into evidence, please provide us with a copy of the documents by 5:00pm, Monday 30 October 2017 and we will seek instructions as to whether our client consents to the documents being tendered. 9. For the avoidance of doubt, our client will not necessarily consent to leave being granted to re-open your case to tender any documents provided by the above deadline. The purpose of the request is to ensure that: (a) our client is given a fair opportunity to consider the request in advance of the hearing; (b) the limited hearing time on 1 November 2017 is not utilised in the determination of this issue; (c) the proceeding is resolved in a just, quick and cheap manner in accordance with the parties obligations under the Civil Procedure Act 2005 (NSW). 10. Given the above, and the advance opportunity we have provided to you, our client puts you on notice that he will oppose leave to tender any documents that have not been provided to us by the above deadline.
When the proceedings resumed on 1 November 2017 without any notice to the solicitors for the defendant or the Court, the plaintiff sought to tender a number of affidavits sworn by Mr Drumm in the SC 2010 proceedings that had been marked for identification before the Magistrate. The Magistrate was informed of the two letters written by the solicitors for the defendant to the plaintiff and the fact that there had been no reply to them. The Magistrate sought to ascertain the purpose for which the plaintiff wished to tender the affidavits. She said that Hearne v Street did not apply to the circumstances before the Magistrate. She said that she wanted to rely on the affidavits to show the defendant's involvement in the SC 2010 proceedings and the inconsistencies between those affidavits and the other documents.
The Magistrate pointed out that she had previously been invited to make submissions, after an adjournment, about why the objection taken by counsel for the defendant in accordance with Hearne v Street was not a correct objection. It was pointed out that the objection by counsel for the defendant had been withdrawn and she had been allowed to cross-examine on the affidavits. The Magistrate reminded the plaintiff of what had transpired on 26 July and how, particularly, she had said that she did not want to re-open her case to present further evidence. He continued: Look, madam, we're going around in circles. The answer to the question is I'm not going to allow you to re-open your case to tender those affidavits. The issue of the affidavits has been canvassed very fully. Just tell me, apart from proving that he assigned [scil. signed] an affidavit which has statements inconsistent in it, two affidavits that he has signed had statements inconsistent with his evidence in relation to this matter itself, what else is it going to prove, to tender the affidavit? PLAINTIFF: To prove there is a 1 July 2011 affidavit which Mr Elliot used it to say it's the supported affidavit for the motion for Mr Drumm come to the paper, but that's not the truth. Mr Drumm come to the paper on December of 2010. HIS HONOUR: To the paper? PLAINTIFF: Yeah, come to the proceeding. ELLIOT: I think she means joined as party to the proceedings. PLAINTIFF: Joined as party to the proceedings. … HIS HONOUR: … I've asked you a number of times, what is it that these affidavits are going to prove other than that which they have already been proved about them? PLAINTIFF: Mainly for Mr Drumm's involvement --- HIS HONOUR: … As far as the affidavit is concerned, Ms Huang; you have raised nothing fresh and I do not intend to occupy any further time with it. The documents will remain marked for identification. I will not give any leave for you to reopen your case to tender those documents, which would be an extraordinary thing to do in any event because - without consent, because we have already commenced - I thought we had - addresses by counsel or by - on behalf of the parties in relation to the merits of the claim. Now, if you think you didn't have a clear ruling before, you do now. PLAINTIFF: Your Honour asked me to - whether I have finished application, if any more application I need to file on the - in July hearing --- HIS HONOUR: I didn't - I asked not whether you needed to file, whether you had any wish to make at that point and you said no. PLAINTIFF: I - my understanding is your Honour asking for another application. HIS HONOUR: Madam --- PLAINTIFF: Because I already asked your Honour, I, I, I want to attend --- HIS HONOUR: Madam, if you're talking about those two affidavits, I have just made a ruling, the topic is finished. Please understand that.
A number of things emerge from those portions of the transcript. First, the Magistrate did not reject the tender of the affidavits on the basis of the implied undertaking referred to in Hearne v Street. Secondly, the plaintiff was given a number of opportunities after explanation from the Magistrate to tender documents she wished to put into evidence at earlier times. Thirdly, she was given detailed explanations about what was and what was not in evidence before addresses began by both the Magistrate and the solicitors acting for the defendant. Fourthly, the objection based on Hearne v Street had been withdrawn and the plaintiff was permitted to cross-examine the defendant on those affidavits. Fifthly, the Magistrate was not satisfied that admitting the affidavits into evidence would prove anything more than had been admitted by the defendant in his evidence. Indeed, she tendered one of those affidavits following the cross-examination.
I put to Mr Gibson that the objection based on Hearne v Street had been withdrawn and the Magistrate had given the plaintiff a number of opportunities to tender documents that she wanted. Mr Gibson agreed that she declined to tender the documents when offered the opportunity but said that the plaintiff as a litigant in person was confused and thought that an earlier exchange between the Magistrate and the plaintiff had dealt with the tender of the affidavits. Mr Gibson was not able to point to that part of the transcript that he referred to as the "earlier exchange". My examination of the transcript indicates that nothing had earlier been finally determined because the plaintiff persisted with her desire to cross-examine the defendant on the basis of the affidavits. Moreover, after doing so in relation to the affidavit of 30 October 2014 she tendered that affidavit.
The decision of the Magistrate to refuse the plaintiff the right to re-open and tender the affidavits that were marked as MFIs was not made on the basis of the decision in Hearne v Street. It was made on the basis that the plaintiff had been given a number of opportunities, after explanation, to tender what documents she wanted, and that, by the time she came to make the application on 1 November, she could not point to any basis for those affidavits being admitted into evidence where she had obtained admissions from the defendant concerning his involvement in the proceedings and about inconsistencies in those affidavits.
This ground is not made out.

Grounds 10 and 13: Bias

I sought on a number of occasions to ascertain from Ms Huang and Mr Gibson whether they were relying on actual bias or apprehended bias. They said, without differentiating amongst the various pleaded assertions of bias in ground 13, that they relied on both. However, the way the matter was put in submissions suggested that the matters complained of when viewed together demonstrated apprehended bias. I repeatedly sought from them indications from the transcript of where actual bias was demonstrated, particularly because pre-judgment and a closed mind were asserted. I was not taken to any portions of the transcript in relation to these grounds.
The submissions in relation to bias concentrated on errors said to be have been made by the Magistrate in reaching his decision. Some or all of these errors were said to result in improbable findings or conclusions.
In the written submissions handed to me at the hearing after morning tea by Mr Gibson, the plaintiff set out various principles of law concerning the test for establishing actual bias and apprehended bias. The submissions properly identified the tests and some of the significant cases which have dealt with the principles concerning bias. However, the submissions say nothing about the way the Magistrate in this case was said to have demonstrated actual bias, nor the matters which constituted an apprehension of bias.
In Reid v Commercial Club (Albury) Ltd [2014] NSWCA 98 Gleeson JA (with whom Emmett JA and Tobias AJA agreed) said: [68] A finding of actual bias is a grave matter: Sun v Minister for Immigration and Ethnic Affairs (1997) (Sun v Minister) 81 FCR 71 at 127 per Burchett J. Authority requires that an allegation of actual bias must be distinctly made and clearly proved; that such a finding should not be made lightly; and that cogent evidence is required: South Western Sydney Area Health Services v Edmonds [2007] NSWCA 16 at [97] and the authorities there cited. [69] Where the issue is actual bias in the form of prejudgment, the appellant had to establish that the primary judge was "so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented": Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; 205 CLR 507 at [72] per Gleeson CJ and Gummow J (Hayne J agreeing at [176]). See also Kirby J at [127]. [70] As Gleeson CJ and Gummow J observed in that case at [71]: "The question is not whether a decision-maker's mind is blank; it is whether it is open to persuasion." [71] In the same case, Hayne J noted at [185] the several distinct elements underlying the assertion that a decision-maker has prejudged or will prejudge an issue, or the assertion that there is a real likelihood that a reasonable observer might reach that conclusion. The first is the contention that the decision-maker has an opinion on a relevant aspect of the matter in issue in the particular case. The second is the contention that the decision-maker will apply that opinion to the matter in issue. The third is the contention that a decision-maker will do so without giving the matter fresh consideration in light of whatever may be the facts and arguments relevant to the particular case. [72] His Honour observed at [186] that allegations of actual bias through prejudgment often fail at the third step he had identified. This was because notwithstanding whatever expression of preconceived opinions by the decision-maker, it does not follow that the evidence will be disregarded. [73] The test of actual bias in the form of prejudgment requires an assessment of the state of mind of the judge in question: Michael Wilson & Partners Limited v Nicholls & Others [2011] HCA 48; 244 CLR 427 at 437 [33]. However, actual bias need not be confined to an intentional state of mind. Bias may be subconscious, provided it is real: Bilgin v Minister for Immigration and Multicultural Affairs (Bilgin v Minister) (1997) 149 ALR 281 at 289-290 per Finkelstein J; Sun v Minister at 127 per Burchett J and 135 per North J. As Finkelstein J said in Bilgin v Minister at 290: "The wrong involved is the failure to decide a case impartially. Whether that failure was deliberate or not should be beside the point insofar as the validity of the decision is concerned." [74] The circumstances in which actual bias can be demonstrated solely from the published reasons for decision must be considered to be rare and exceptional: SCAA v Minister for Immigration and Multicultural and Indigenous Affairs [2000] FCA 668 at [38] per von Doussa J, who explained: "... Reasons for decision reflect conclusions reached at the end of the decision making process, and if the decision is against the party complaining, the expression of adverse findings on credit and fact are an inevitable part of the expression of the reasons. The mere fact of adverse findings at the end of the matter give rise to no inference as to the state of mind of the decision maker before and whilst the matter was under consideration, nor of prejudgment of the issues that fell for decision. Even where it is possible to show that the adverse findings or some of them are contrary to the evidence or unreasonable, or that the reasoning process is hopelessly flawed, that without more is unlikely to demonstrate that the decision maker had embarked on the case with a closed mind, not open to persuasion. However, where the party alleging actual bias can point not only to an adverse judgment containing demonstrable error but also to conduct by the decision maker antithetical to that party's interests such as a hostile attitude throughout the hearing or ... an inference of actual bias by prejudgment might then be more readily drawn. But even then the circumstances are likely to be rare and exceptional that the combination of factors and circumstances will clearly prove actual bias." [Citations omitted.] Apprehended bias [75] A judge should not sit to determine a case if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question to be determined: Michael Wilson & Partners Limited v Nicholls & Others at [31]. [76] The test of apprehension of bias is objective. It does not require an assessment of the state of mind of the judge, as is necessary on an inquiry about actual bias: Michael Wilson & Partners Limited v Nicholls & Others at [33]. Accordingly, this Court is not required or permitted to form a view as to whether the primary judge could be relied upon to determine the case impartially and on the evidence before her: Rouvinetis v Knoll [2013] NSWCA 24 at [24] per Basten JA (Ward and Barrett JJA agreeing). [77] An allegation of apprehended bias requires an objective assessment of the connection between the facts and circumstances said to give rise to the apprehension and the asserted conclusion that the judge might not bring an impartial mind to bear upon the issues that are to be decided. The question is not whether the judge had in fact prejudged an issue: Michael Wilson & Partners Limited v Nicholls & Others at 446 [67]. [78] It is necessary to keep in mind that claims of apprehension of bias are to be considered in the context of ordinary judicial practice. Active case management, as part of modern litigation, often requires that trial judges intervene in the conduct of cases. Judges are not expected to wait until the end of the case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. Accordingly, the expression of tentative views, which reflect a certain tendency of mind of the judge, are not on that account alone to be taken to indicate prejudgment. Moreover, counsel are usually assisted by hearing the judges' tentative opinions on matters in issue and being given an opportunity to deal with them: Johnson v Johnson [2008] HCA 48; 201 CLR 488 at [13] (a case of alleged apprehension of bias) which referred to earlier comments in Vakauta v Kelly [1989] HCA 44; 167 CLR 568 at 571 (a case where actual bias was alleged).
In Michael Wilson & Partners Limited v Nicholls & Others (2011) 244 CLR 427; [2011] HCA 48, the joint judgment of Gummow ACJ, Hayne, Crennan and Bell JJ said: [31] It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (in this case, in the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide. No party to the present appeal sought in this Court, or in the courts below, to challenge that this was the test to be applied. [32] As the plurality in Johnson v Johnson explained, "[t]he hypothetical reasonable observer of the judge's conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues." [33] Because the test is objective it is important to keep an inquiry about apprehension of bias distinct from any inquiry about actual bias. An inquiry about actual bias in the form of prejudgment would require assessment of the state of mind of the judge in question. No doubt that would have to be done, at least for the most part, on the basis of what the judge had said and done. But to allow an inquiry about whether the judge had in fact prejudged some issue to enter into a debate about what a fair-minded lay observer might apprehend is to introduce considerations that are irrelevant to the issue that is to be decided when a party submits that there is or was a reasonable apprehension of bias. The respondents did not submit in this Court or in the courts below that the trial judge had in fact prejudged any issue. … [63] In Ebner v Official Trustee in Bankruptcy, the plurality pointed out that application of the apprehension of bias principle requires two steps. First, it requires the identification of what it is said might lead the judge to decide a case other than on its legal and factual merits. And second, there must be an articulation of the logical connection between that matter and the feared deviation from the course of deciding the case on its merits. The plurality in Ebner went on to say that "[t]he bare assertion that a judge (or juror) has an 'interest' in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated". So too, in this case, the bare assertion that the judge appeared to be biased through prejudgment would be of no assistance without articulation of the connection between the events giving rise to the apprehension of bias through prejudgment and the possibility of departure from impartial decision making. … [67] As pointed out earlier in these reasons, an allegation of apprehended bias requires an objective assessment of the connection between the facts and circumstances said to give rise to the apprehension and the asserted conclusion that the judge might not bring an impartial mind to bear upon the issues that are to be decided. An allegation of apprehended bias does not direct attention to, or permit consideration of, whether the judge had in fact prejudged an issue. To ask whether the reasons for judgment delivered after trial of the action somehow confirm, enhance or diminish the existence of a reasonable apprehension of bias runs at least a serious risk of inverting the proper order of inquiry (by first assuming the existence of a reasonable apprehension). Inquiring whether there has been "the crystallisation of that apprehension in a demonstration of actual prejudgment" impermissibly confuses the different inquiries that the two different allegations (actual bias and apprehended bias) require to be made. And, no less fundamentally, an inquiry of either kind moves perilously close to the fallacious argument that because one side lost the litigation the judge was biased, or the equally fallacious argument that making some appealable error, whether by not dealing with all of the losing side's arguments or otherwise, demonstrates prejudgment.
It is apparent from what is said in Reid that an allegation of actual bias must be distinctively made and clearly proved, such a finding should not be lightly made, and cogent evidence is required.
I asked the plaintiff at an early stage of her submissions if she was saying that the Magistrate was actually biased or if there was an apprehension of bias. The plaintiff replied: There's definitely an apprehended bias, but it may be actual as well. When I pressed the plaintiff to say, beyond "maybe", if she asserted the Magistrate was actually biased she said that he was, that "he had predetermined and closed his mind". I pointed out that those were general statements, and asked where the Magistrate predetermined the matter. The plaintiff said: It's almost from the beginning he's showing he prefers - at the beginning - at the beginning, the magistrate believed Dr Gibson is the one running the trust and he - the case for the trust, and he stopping the important evidence go into the - all the evidence I want to put in didn't go in because he already make up his mind and it's Dr Gibson running the case for the trust.
During the course of submissions being made on the plaintiff's behalf I repeatedly asked Mr Gibson to identify matters in the transcript which demonstrated actual bias on the part of the Magistrate. I informed him that it was not part of my task as a judge sitting on an appeal based on error of law to read the transcript to find matters.
In Chamoun v District Court of New South Wales [2018] NSWCA 187 the Court of Appeal has said at [37], following Michael Wilson, at [63], that there is a two stage process in the application of the apprehension of bias principle: The application of the apprehension of bias principle requires two steps. The first is the identification of what it is said might lead the judge to decide a case other than on its legal and factual merits. The second is that there must be an articulation of the logical connection between that matter and the feared deviation from the course of deciding the case on its merits: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at [8]; Michael Wilson & Partners v Nicholls at [63].
Similarly, where actual bias is alleged, there is first the need to identify what has been said or done by the judge to demonstrate actual bias. At no stage was I taken to any part of the transcript at all, let alone a part which indicated actual bias on the part of the Magistrate.
Reference was made by Mr Gibson, and more indirectly by the plaintiff herself, to the opening address by counsel for the defendant, and to the fact that the Magistrate was biased from an early time in the transcript. It was suggested that the defendant's counsel's opening address shifted the focus of the case, and that the Magistrate's background in the criminal law and his supposed lack of knowledge of the Uniform Civil Procedure Rules when taken together demonstrated bias.
I have read the transcript of the first day up to the time the plaintiff commenced to give her evidence. It must first be remembered that the plaintiff was represented by her lawyer Ms Leung for the first two days of the trial. Secondly, the Magistrate's interventions during opening addresses were only to clarify matters. He did not express any views. Thirdly, the Magistrate said that he had not even read the various affidavits filed by the time of the opening addresses. Nothing that is recorded there could in any way indicate actual bias, nor could there be an apprehension of bias using the test in the authorities earlier set out.
Although my attention was not directed to it, since the plaintiff was unrepresented, I have read carefully the judgment of the Magistrate to see if there were indications of actual bias in that judgment. The Magistrate set out (at T 62, 2/11/17) the matters the plaintiff needed to prove to succeed on her claim. His Honour also needed to make findings as to the three witnesses who gave evidence: the plaintiff, the defendant and Mr Gibson. His Honour ultimately accepted the evidence of the defendant but not without some criticism. His Honour said (at T66-67): I am left with the distinct impression that Mr Drumm saw his appointment as the trustee of CCST as little more than a formal title. There were no assets other than this action Gibson was pursuing in respect of which for a quiet life he could do what he was asked. This led to some carelessness, and severe carelessness I might add, on this part as to the execution of documents, which he acknowledges. This may not commend him as one to whom you should turn professionally, however, it does [not?], in my opinion, diminish his credibility.
Counsel for the defendant submits that the word "not" was intended in that extract but was either accidentally omitted by the Magistrate or not transcribed. I agree that the context points strongly to that being the case. It is also supported by the Magistrate considering the objective evidence to assess each of the witnesses and finding that the objective evidence supported the defendant's account, but did not support the accounts of the plaintiff and Mr Gibson. It is of some significance, in that regard, that none of the matters raised in grounds 10 and 13 challenged the assessment of the support or lack of support for the credibility of the witnesses.
The criticisms made of the defendant tend against any view that the Magistrate was actually biased.
In any event, a reading of the matters set out in ground 13 that are said to demonstrate bias, points strongly against their being matters demonstrating actual bias. All of the matters set out in paragraph 13, taken at their highest, could point only to apprehended bias by the Magistrate having said or done particular things during the course of the hearing.
I reject grounds 10 and 13 insofar as they seek to establish actual bias on the part of the Magistrate.
Submissions made by the plaintiff and on her behalf distinguish no bright line between assertions of actual bias and assertions of apprehended bias. Having dealt with those matters that appeared, by what was said in the submissions, to be called in aid of the assertions of actual bias, I will now deal with other matters raised which, at their highest, could only support an apprehension of bias. The matters identified were these: (1) The Magistrate "would have been persuaded" by the arguments in "this incredible opening of Mr Elliott to his Honour"; (2) If the judgment is matched up to the opening submissions and the evidence that the plaintiff was not permitted to put forward by virtue of Hearne v Street, the whole issue is raised of whether the judgment was a safe verdict and whether it should not be set aside; (3) Rulings made by the Magistrate "keeping Ms Huang out of evidence; (4) The failure of the Magistrate to deal with a notice of motion filed in July (apparently July 2017); (5) The Magistrate's enquiries during the proceedings about the Trust and who was involved in the Trust; (6) The Magistrate intervened excessively during her cross-examination of the defendant and did not allow her to advance some issues in that cross-examination; (7) The Magistrate should not have accepted the completely untenable proposition that Mr Drumm did not know about the costs that were being incurred in the proceedings and was not running the proceedings; (8) On the balance of probabilities the Magistrate should not have come to the decision he did; (9) The defendant settled the claim because he was the only person who could settle it as the Trustee; (10) The Magistrate's finding that the defendant knew nothing about the storage of the documents was an improbable finding; and (11) The Magistrate failed to understand the Rules of Court in regard to who could act for the Trust. In that way, his view that Mr Gibson was driving the proceedings demonstrated bias.
It should be said that, as with the assertions of actual bias, I was not taken to any parts of the transcript to provide support for those assertions that I have listed, where the Magistrate was asserted to have done particular things during the course of the trial. For example, I was never taken to the notice of motion of July 2017 to understand the point being made. As far as I can ascertain, it did not form part of the Court Book.
Mr Gibson, on behalf of the plaintiff, relied upon the cumulative effect of these matters to say that the plaintiff gained the impression that the decision reached was not a fair one and that there was an apprehension of bias. Of the matters listed, two things were emphasised repeatedly. The first was said to be the refusal of the Magistrate to admit the evidence the plaintiff wished to tender. That matter has been dealt with already in relation to ground 7. Although it was accepted on behalf of the plaintiff that she failed to tender the material she wanted admitted into evidence when given the opportunity on a number of occasions, the explanation given by Mr Gibson was that she was confused and that she believed a ruling had been made already which prevented her from tendering the documents. There was no evidence to that effect. It was a statement made from the bar table. It must be seen in the light of the material set out from the transcript and from the letters from the defendant's solicitors in the discussion about ground 7 above. Even, however, if the Magistrate erred in not admitting the material into evidence, that would not form any basis for a ground of apprehended bias. It was not suggested that the Magistrate had taken unfair advantage of the plaintiff. Indeed, the extracts set out above and others demonstrate that the Magistrate probably went beyond what he was required to do to assist a litigant in person.
The second matter emphasised was the Magistrate's ultimate finding, although a finding incidental to the real issues in the proceedings, that the proceedings were effectively being run by Mr Gibson. Regardless of whether the Magistrate was right or wrong in having the view that the defendant was a nominal plaintiff, the real issues in the case were whether he had ever been party to a three-way agreement to pay back Ms Huang for the monies she paid and, secondly, whether or not he knew and/or agreed to pay her for document storage at her premises.
Mr Gibson himself admitted that he was: … running around, copying documents, delivering them to his lawyers, so the affidavit could be drawn up or working out some - analysing documents, for instance, that came in from subpoenas, which is something I did for everybody. Because I was in Sydney and I could come along to the court here and I had standing in the proceeding for the other reasons, myself.
What the Magistrate said about this matter immediately following the passage set out at [57] above was this: In the argument and during the conduct of the case the plaintiff relied heavily on the reference to the defendant, being the second plaintiff on the face of the documents relevant to the Supreme Court proceedings, including the references to the various legal practitioners as acting on his being, and the reference as such in correspondence. That, of course, would give rise to some prima facie suggestion that the defendant actively prosecuted the claim; however, it is prima facie only has to be considered in light of all the issues. When you consider the cause of action for a moment, he knows nothing personally of those facts in issue. It is not he who made the supposed agreement or arrangements with Macintosh, it is not he who did any of the work on behalf of the Trust, the hours, etcetera, all the matters of fact to which the Supreme Court claim is directed. He is reliant on Gibson for that information, as, indeed, virtually is the plaintiff in the current matter in respect of hers.
I do not consider that any of the matters identified on behalf of the plaintiff in her submissions give rise to any apprehension of bias. No fair-minded lay observer might reasonably apprehend from those matters, particularly knowing the detailed explanations given to the plaintiff about procedure, and knowing of the indulgences granted to her, that the Magistrate might not bring an impartial and unprejudiced mind to the resolution of the questions he was required to determine.
These grounds should be rejected.

Grounds 17-22: Costs

Under s 40(2)(c) of the Local Court Act a party who is dissatisfied with an order as to costs may only appeal to this Court by leave of this Court. No leave was sought in the amended summons, but I was informed by counsel for the defendant that it was agreed that the plaintiff made clear when the matter was before Adams J that she sought leave to argue those grounds. The defendant took no point that she was not permitted to argue them.
In Zelden v Sewell Henamast Pty Limited v Sewell [2011] NSWCA 56 Campbell JA (Young JA agreeing) said at [22]: It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute. Those principles are ones that, in my view, apply in the present case.
In Jaycar Pty Limited v Lombardo [2011] NSWCA 284 Campbell JA (Young and Meagher JJA agreeing), having repeated his remarks in Zelden above, went on to say at [46]: Kirby P recognised that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond what being merely arguable.
The result is that a party seeking leave to appeal must point to something more than error.
The six grounds of appeal deal, in substance, with three matters. The first is the refusal of the Magistrate to adjourn the proceedings when the plaintiff did not appear for the costs hearing on 23 February 2018. The second concerned the plaintiff's notice of motion for a gross sum costs order and the way it was dealt with by the Magistrate. The third concerned the order for indemnity costs not dealt with by the gross sum costs order.

Failure to adjourn the proceedings

On 14 December 2017, following an exchange of written submissions on costs, Magistrate Atkinson fixed the costs hearing before Magistrate Barnett on 23 February 2018. On that day at 9:24am the plaintiff sent an email to the Court which attached a document entitled "Memorandum". That document relevantly said this: 1. This matter is set down for a Special Fixture this morning, at 9:30am. 2. An act of god - in the form of a severe Rain Storm - has prevented me from attending to argue my opposition to the defendant's gross sum cost order. 3. I am booked to fly to Sydney this morning at 5:30am and I was disrupted by the aforementioned event. 4. A subsequent flight would not get me to court on time and I refuse to be late in my attendance to deal with this important matter given what costs consequences rest on it - and of course remove criticism of my lateness.
At 9:41am the plaintiff sent a further email to the Court attaching a copy of her ticket on Virgin flight VA0904 leaving Brisbane at 5:30am and arriving in Sydney at 8:05am. The defendant tendered a record demonstrating that the Virgin flight left and arrived ahead of departure time.
At 11:01am the Magistrate caused the Registry of the Local Court to send an email to the plaintiff which read: In order to allow the Court to properly assess your application for an adjournment his Honour has asked that you provide precise detail as to how it was that the "severe rainstorm" prevented you from attending Court this morning. Further can you please provide a full explanation as to your decision not to take a later flight as referred to in para 4 bearing in mind that the Court dealt with a similar situation during the course of the hearing without any prejudice to you. This communication has been sent with the knowledge of Mr Elliot who has indicated to the Court that he opposes your application for an adjournment. Your reply is required by 11:50am Australian Eastern Standard Time.
At 12:36pm no response had been received by the Court.
The Magistrate then delivered a judgment refusing to adjourn the costs hearing. He did so on a number of bases. One was the plaintiff's failure to explain adequately why she did not catch the second flight and appear late. Secondly, she did not respond to the email from the Court requiring a response by 11:50am. Thirdly, the proceedings had been delayed many times by the conduct of the plaintiff. Fourthly, the Magistrate accepted the submission on behalf of the defendant that costs proceedings were frequently dealt with on the papers in chambers. In this case written submissions had been filed. Finally, the Magistrate had regard to a notice of motion which the plaintiff had filed in relation to costs. His Honour said that that notice of motion should be treated as one under r 36.16(3A) which enables the setting aside or varying of a judgment if application is made within 14 days in respect of certain judgments, of which a costs judgment was one.
The Magistrate's decision to refuse the adjournment was a discretionary one. It would be necessary for the plaintiff to point to an error of the type discussed in House v The King (1936) 55 CLR 499; [1936] HCA 40. In circumstances where written submissions had been filed and no satisfactory explanation given for the plaintiff's non-appearance, I do not consider that the discretion not to adjourn miscarried.

Gross sum costs order

Ground 17 is expressed in a confusing way. It seems to assume that the Magistrate dismissed the plaintiff's notice of motion for a gross sum costs order. That was not the way the Magistrate dealt with the matter. His Honour made a gross sum costs order on the defendant's application and then said: The notice of motion filed on 22 February 2018 is to be treated as a motion for variation or to set aside these orders under s 36.16(3)(a) (sic) of the Uniform Civil Procedure Rules. Thereafter, the plaintiff did not agitate her motion.

Indemnity costs

On 6 December 2016, two days before the first day of the hearing, the solicitors for the defendant served an Offer of Compromise on the solicitors for the plaintiff. In the Offer of Compromise the defendant offered a judgment in favour of the defendant, that the proceedings be dismissed, and that no order be made as to costs with the intent that each party bear their own costs of the proceedings. The covering letter said that the defendant's costs to date were approximately $95,000 including counsel's costs. The letter went on to say: Of that amount, approximately $27,063.23 relates to costs thrown away in accordance with the orders made by Magistrate Atkinson on 30 May 2016 (in which an application for costs assessment has been served on Ms Huang).
The letter went on to say that if the plaintiff accepted the terms of the Offer of Compromise, she would not be required to meet any of the defendant's costs in the proceedings but that, even if she was successful at the final hearing, she would still be required to meet the costs order referred to earlier that had been made by Magistrate Atkinson. The figure of $27,063.23 was what was claimed for the costs thrown away. The costs were assessed subsequently at $16,000.
The following day the solicitors for the plaintiff wrote rejecting the Offer of Compromise, and offered to settle the proceedings on the basis that the defendant paid to the plaintiff the sum of $30,000 in full and final settlement of the Local Court proceedings, that each party was to bear their own costs of those proceedings and that the defendant consented to indemnify the plaintiff for the sum of $19,695.30 by ways of costs ordered in favour of a Mr Charles Thornley in District Court proceedings involving the plaintiff.
On December 2016 the solicitors for the defendant sent a Calderbank letter rejecting the offer from the plaintiff and offering to pay the plaintiff $15,000 to settle the matter with each party to bear their own costs of the proceedings.
The Magistrate held that the refusal of the plaintiff to accept either of the offers from the defendant to her of 6 and 8 December was unreasonable. Whilst that was a necessary determination for the Calderbank letter, it was not a necessary determination in respect of the Offer of Compromise. UCPR r 42.15 provides that, where the plaintiff obtains a judgment no more avourable to the plaintiff than the terms of the offer, the plaintiff is entitled to an order for costs assessed on the ordinary basis up to the time at which the defendant becomes entitled to indemnity costs. In relation to the offer of 6 December 2016 that time was the day following that on which the offer was made.
After I had reserved my judgment in the matter, my Associate received an email from the plaintiff in relation to the estimated amount of $27,063.23 which was reduced on assessment to $16,000 (referred to at [84]-[85] above). The email is difficult to understand, so I should set it out. It reads: This is an issue raised regarding the payment - or lack of it - regarding an amount of $27,000 which was reduced on cost assessment to $16,000 and the court raising whether it had be (sic) paid, as they were court awarded cost (sic) under consent orders entered in the court below on 30.05.16. I don't know what steps are required to disabuse the court of any misunderstanding (if any) of any payment after the matter is closed. … The issue appeared to have a bearing on any leave possibly being granted for further submissions to be put forward as well as the issue as to whether the 'Offer of Compromise' was reasonably refused. I am simply minded that the court is disabused of any misunderstanding on the issue and it may be that it would need to be dealt with in another forum if an issue.
I do not know what misunderstanding is being referred to. It was clarified during submissions that an order had been made that the plaintiff was to pay costs thrown away by reason of an amendment and the filing of new evidence that changed the way the plaintiff was putting her case. The estimate in the covering letter forwarding the Offer of Compromise of $27,063.23 was subsequently assessed by a costs assessor at $16,000. According to Mr Gibson, the plaintiff has paid that amount to the defendant.
An Offer of Compromise does not have to satisfy a test of unreasonableness. However, the Magistrate found that, having regard to what was contained in the covering letter, it was unreasonable for the plaintiff not to have accepted the offer. The defendant was not only offering to pay his own costs, he was offering to waive the requirement for the plaintiff to pay what ultimately turned out to be $16,000. Whether the Magistrate's judgment on the point was discretionary or evaluative, it cannot be said to be in error. Viewed objectively in the light of the costs ordered and those otherwise expended, the offer was a considerable compromise by the defendant.
The plaintiff, in submissions made on her behalf, did not appear to disagree that, in the ordinary course, no error could be demonstrated by the Magistrate in ordering indemnity costs, as he did, from 7 December 2016 on the basis of the Offer of Compromise. The plaintiff, however, challenged the order for indemnity costs on the basis that the Magistrate ought to have heard the plaintiff's motion whereby she received an order for costs that were payable partly by the defendant and partly by some legal advisors including the solicitor for the defendant. That submission was said to be based on disentitling conduct of both the defendant and those other persons. That was not the basis of ground 19 in the amended summons. Reference was made by the plaintiff to Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [40] and [69] and G R Vaughan Holdings Pty Ltd v Vogt [2006] NSWCA 263 as to the effect of disentitling conduct on costs.
Assertions of disentitling conduct were not put to the Magistrate in the written submissions prepared by the plaintiff which his Honour considered before delivering his judgment on costs. I note that the plaintiff filed written submissions and written submission in reply to the defendant's submissions. Further, as noted earlier, the plaintiff did not pursue the notice of motion she filed in that regard notwithstanding that the Magistrate reserved her right to do so.
At the time of the offers by the defendant on 6 and 8 December 2016 the plaintiff was legally represented. Nothing has been put forward to show error on the Magistrate's part in ordering indemnity costs from 7 December 2018. No disentitling conduct has been demonstrated.
The plaintiff suggested that the costs lacked proportionality. However, the proceedings ran for 15 days in circumstances where the plaintiff re-examined Mr Gibson over four days and cross-examined the defendant over five days. By ordering a gross sum costs order in respect of the defendant's lawyers' time in Court and the cost of the transcript, his Honour was helping to minimise the extent to which the costs were out of proportion to the amount claimed.
In my opinion, no error is shown in relation to any of the grounds arising out of the costs judgment.

Conclusion

Accordingly, I make the following orders: (1) Dismiss the amended summons filed 18 April 2018. (2) The plaintiff is to pay the defendant's costs of the proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 August 2018

Local Court Act 2007(NSW)ss 39, 40

Uniform Civil Procedure Rules 2005(NSW)rr 12.7, 14.28, 36.16, 42.15

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (11 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (23)

Cited By (1)