INCORPORATED and ORS v JONES and ORS

Court of Appeal (NSW)|1994-03-15|Before: Bryson J, Kirby P, Gleeson CJ, Mahoney JA, Like Mahoney JA, As Mahoney JA

THE FRIENDS OF THE GLENREAGH DORRIGO LINE INCORPORATED and ORS v JONES and ORS

GLEESON CJ, KIRBY P and MAHONEY JA 15 March 1994, 30 March 1994

PRACTICE and PROCEDURE - adjournment - protracted litigation in Equity Division - belated application for legal aid rejected - appeal lodged to Legal Aid Review Committee - primary judge (Bryson J) refuses adjournment and dismisses proceedings - gives no express indication of the "special circumstances" warranting that course having regard to the requirements of the Legal Aid Commission Act 1979, s57 - on appeal - held:

(1) (by the Court): In the circumstances, the provisions of s57 of the Act required the primary judge to adjourn the proceedings and the judge erred in failing to do so;

(2) (per Kirby P): semble the judge also erred in failing in his reasons to identify the "special circumstances" which warranted the refusal of adjournment;

(3) (per Gleeson CJ and Mahoney JA): But for the "technical defect" in the exercise by the judge of his discretion, the course adopted might well have been open to him having

regard to the duty of courts to ensure the pursuit of remedies with appropriate diligence and skill.

Ketteman v Hansel Properties Ltd [1987] 1 AC 189 (HL) and Ashmore v Corporation of Lloyd's [1992] 1 WLR 446 (HL) considered; (4) (by the Court): Upon the re exercise by the Court of Appeal of the discretion which miscarried at first instance, the Court would not be satisfied that the proceedings should

not be adjourned. The proceedings so adjourned should be returned to the Equity Division for trial.

WORDS and PHRASES - "special circumstances". Legal Aid Commission Act 1979, s57.

Orders made by Bryson J on 17 March 1991, set aside;

Proceedings returned to the Equity Division to determine what directions or orders should now be made;

The respondents to pay the appellants' costs of the appeal and to have, if so entitled, a certificate under the Suitors' Fund Act 1951; and

The costs of the proceedings in the Equity Division to be dealt with by the judge of that Division who determines the proceedings returned to the Equity Division.

Gleeson CJ I have had the benefit of reading in draft form the judgment of Mahoney JA. I agree with the orders proposed by his Honour, and with his reasons for those orders.

Like Mahoney JA I have concluded, with considerable regret, that the provisions of s57 of the Legal Aid Commission Act 1979 required Bryson J to adjourn the proceedings when they came before him on 17 May 1991. His Honour reached a contrary conclusion. He gave no reasons for that conclusion, and the matter does not seem to have been the subject of any substantial argument. Indeed, we were told that the point about s57 was only drawn to his Honour's attention after he had given his reasons for judgment dismissing the action, without prejudice to any right to commence a fresh action.

It is the common experience of the courts that s57 can operate, in certain circumstances, to cause further delay in proceedings which have already been the subject of unwarranted delay. However, the terms of the provision are mandatory, and I consider that in the present case they required that an adjournment be granted.

Kirby P As Mahoney JA has pointed out, the matters argued before the Court in this appeal were substantially confined to the requirements of s57 of the Legal Aid Commission Act 1979.

In these circumstances, I should prefer to express no conclusion on other issues, such as the suggested defaults of the appellants in prosecuting their proceedings and the application in this jurisdiction of the dicta of Lord Griffiths in Ketteman v Hansel Properties Ltd [1987] 1 AC 189 (HL), 219f.

Judges, by their duties of office, are obliged, in our tradition, to do justice to the litigants before them. Monetarist notions considered suitable to the operations of Executive Government cannot so readily be imported into the activities of the judicial branch where a different, and higher, standard of justice to parties obtains.

Because this appeal is disposed of by reference to the obligations of s57 of the Act, I shall retain my comments on Ketteman, and other decisions to a like effect, for another day when they are pertinent to the resolution of the case in hand. They are not here.

I agree, for the reasons given by Mahoney JA that s57 of the Act required Bryson J in the circumstances to adjourn the proceedings. If his Honour had been of the view that there were "special circumstances" which "prevented" such an adjournment having effect, I am of the opinion that he was obliged to identify those special circumstances in his reasons, in however brief an exposition, given the mandatory terms of s57 and the obvious purpose behind it.

With respect to his Honour, I have concluded with the Gleeson CJ that little attention seems to have been given to the s57 point during the primary argument. When, after orders were pronounced, the section was drawn to Bryson J's attention, there was an understandable reluctance on his Honour's part to put in reverse the course upon which he had embarked. But in my view, that is what the section, in the circumstances of the case, required.

I reach these conclusions with neither regret nor alacrity. They are simply the requirements of law binding on this Court, as they were on his Honour.

I therefore agree with the orders proposed by Mahoney JA.

Mahoney JA The parties to this proceeding are concerned, inter alia, with the Glenreagh Dorrigo Railway and with railway equipment and memorabilia. On 23 January 1990 a body described as The Friends of the Glenreagh Dorrigo Line Incorporated commenced proceedings against the defendant Keith Malcolm Jones and a number of other defendants. Its journey proceeded with less than express rapidity. It stopped on several occasions, at places other than prescribed stopping places and for reasons which, on the evidence now before the Court, appear less than adequate. Finally, on 17 May 1991 Bryson J brought its progress to an end: he dismissed the proceeding.

On 13 June 1991, the plaintiffs filed a notice of appeal against his Honour's order. On 15 March 1994, nearly three years after his Honour's order, the appeal came before this Court for hearing. It is not clear why the appeal has taken so long to come to hearing.

URE FRIENDS OF THE GLENREAGH DORRIGO LINE INCORPORATED and ORS 8% JONES and ORS (Mahoney JA)

Mr Glissan, for the plaintiffs, submitted that his Honour had erred in dismissing the proceeding. He argued, with considerable tenacity, for an examination in detail of the five hundred pages and more of the appeal papers or at least substantial portions of them: he submitted that there was considerable "public importance" in the subject matter of the proceeding, that this should be demonstrated to the Court by an examination of the various portions of the appeal papers, and that such an examination would demonstrate that the delay which had taken place at trial level did not warrant the dismissal of the proceeding. He submitted that his clients had been taken by surprise by the dismissal of the proceeding and that the proceeding should be reinstated so that it could continue along the lines and according to the timetables laid down for its progress.

There must, at least, be prima facie concern where a proceeding has, in something over four years, not yet progressed to the stage where the parties have done what needs to be done to enable a date to be fixed for the hearing of it. The tracks along which litigation proceeds are public tracks. The timetables are those fixed by the Court rules. The days when a proceeding was to be allowed to progress at the speed dictated by the parties have passed. If the metaphor may be continued, there are other proceedings upon the tracks and, if the parties do not ensure that the vehicle for the determination of their dispute proceeds timeously, the public interest requires - at least, it may warrant - that it be removed from the tracks so that others more diligent in their interests may proceed.

The attitude of the law to the conduct of litigation has, in more recent times, undergone a change. The reasons for the change are various. They include the limits which increasingly have been put upon the funds available to the justice system generally and courts in particular, the proportionate or comparative scarcity of public resources available for the determination of disputes, the cost of court proceedings, and the recognition of the effect which is produced on the operation of the justice system by the failure to pursue remedies with appropriate diligence and skill. In Ketteman v Hansel Properties Ltd (1987) AC 189, the House of Lords reviewed the circumstances in which amendments should be allowed to, as in that case, pleadings. Lord Griffiths: at 219 and 220; said:

"Tf a defendant decides not to plead a limitation defence and to fight the case on the merits he should not be permitted to fall back upon a plea of limitation as a second line of defence at the end of the trial when it is apparent that he is likely to lose on the merits. Equally, in my view, if a defence of limitation is not pleaded because the defendant's lawyers have overlooked the defence the defendant should ordinarily expect to bear the consequences of that carelessness and look to his lawyers for compensation if he is so minded.

Mr Ogden submitted that the authorities obliged a judge to allow an amendment no matter how late it was made nor for what reason provided the other party could be properly compensated by an award of costs.... Furthermore, whatever may have been the rule of conduct a hundred years ago, today it is not the practice invariably to allow a defence which is wholly different from that pleaded to be raised by amendment at the end of the trial even on terms that an adjournment is granted and that the defendant pays all the costs thrown away. There is a clear difference between allowing amendments to clarify the issues in dispute and those that permit a distinct defence to be raised for the first time.

... But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false

hopes, and the legitimate expectation that the trial will determine the issues one way or the other. Furthermore to allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence.

Another factor that a judge must weigh in the balance is the pressure on the courts caused by the great increase in litigation and the consequent necessity that, in the interests of the whole community, legal business should be conducted efficiently. We can no longer afford to show the same indulgence towards the negligent conduct of litigation as was perhaps possible in a more leisured age. There will be cases in which justice will be better served by allowing the consequences of the negligence of the lawyers to fall upon their own heads rather than by allowing an amendment at a very late stage of the proceedings."

In GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710, in considering the discretion to grant or refuse an adjournment, this Court adopted a similar approach. Samuels JA:

at 715 and 716; cited portion of the speech of Lord Griffiths to which I have referred and said:

"T might interpolate that in that more leisured age an order for costs was generally regarded as complete compensation for delay occasioned either by the grant of an amendment or the grant of an adjournment. However, the emollient effect of an order for costs as a panacea may now be consigned to the Aladdin's Cave which Lord Reid rejected as one of the fairy tales in which we no longer believe."

Samuels JA, having reconsidered the observations of Lord Griffiths and what was said in this Court in Nominal Defendant v Cameron (Court of Appeal, 2 August 1988, unreported), adopted the general approach which his Lordship indicated. His Honour said:

"Tn my view, it is correct for a judge to take into account as a significant factor in the exercise of discretion, in the fields to which I have referred, matters of general import such as the state of his list and the pressures exerted upon the court by the increasing flow of litigation."

More recently, in Ashmore v Corporation of Lloyds (1992) 1 WLR 446, Lord Templeman, in a speech with which at least the majority of their Lordships agreed, emphasised again the importance of the proper conduct of litigation. In the course of complicated litigation, the trial judge had made an order for preliminary points of law to be argued. His order was set aside by the Court of Appeal because, inter alia, it was suggested that "... it was wrong thus to take the conduct of the proceedings out of the hands of the plaintiffs and thereby to disappoint the plaintiffs in their legitimate expectation that the trial would proceed to a conclusion upon the evidence to be adduced": at 454. Lord Templeman: at 453 and 454; said:

"Tt is the duty of counsel to assist the judge by simplification and concentration and not to advance a multitude of ingenious arguments in the hope that out of ten bad points the judge will be capable of fashioning a winner. In nearly all cases the correct procedure works perfectly well. But there has been a tendency in some cases for legal advisers, pressed by their clients, to make every point conceivable and inconceivable without judgment or discrimination. In Banque Keyser Ullman SA v Skandia (UK) Insurance Co Ltd (1991) 2 AC 249 at 280, I warned against proceedings in which all or some of the litigants indulge in over elaboration causing difficulties to judges at all levels in the achievement of a just

URE FRIENDS OF THE GLENREAGH DORRIGO LINE INCORPORATED and ORS & JONES and ORS (Mahoney JA)

result. I also said that the appellate court should be reluctant to entertain complaints about a judge who controls the conduct of proceedings and limits the time and scope of evidence and argument. So too, where a judge, for reasons which are not plainly wrong makes an interlocutory decision or makes a decision in the course of a trial the decision should be respected by the parties and if not respected should be upheld by the appellate court unless the judge was plainly wrong.

... the control of the proceedings rests with the judge and not with the plaintiffs. An expectation that the trial would proceed to a conclusion upon the evidence to be adduced is not a legitimate expectation. The only legitimate expectation of any plaintiff is to receive justice. Justice can only be achieved by assisting the judge and accepting his rulings."

On the material as it is before this Court, Bryson J might well have taken the view that the tracks should be cleared. Had no more appeared, I would myself have thought that the proceeding should be shunted to one side or, as his Honour did, directed it to return to the place from which it came.

However, there was one matter which, Mr Glissan contended, prevented the proceeding being dealt with on its merits. That was s57 of the Legal Aid Commission Act 1979.

Some months after the statement of claim was filed in the proceeding, an amended statement of claim was filed indicating that a number of other persons should or might be joined as plaintiffs. On 18 October 1990, the original plaintiff, being then still the only plaintiff, lodged an application for legal aid. On 22 November 1990, Young J ordered a number of other persons to be added as plaintiffs. On 22 February 1991, they also lodged applications for legal aid. On 6 March 1991, all of the applications were refused. On 7 March 1991, the plaintiffs appealed against that refusal to a Legal Aid Review Committee. It is this appeal which Mr Glissan has called in aid.

"57. Where it appears to a court or tribunal, on any information before it:

(a) that a party to any proceedings before the court or tribunal:

(i) has appealed, in accordance with s56, to a Legal Aid Review Committee and that the appeal has not been determined; or

(ii) intends to appeal, in accordance with s56, to a Legal Aid Review Committee and that such an appeal is competent;

(b) that the appeal or intention to appeal is bona fide and not frivolous or vexatious or otherwise intended to improperly hinder or improperly delay the conduct of the proceedings; and

(c) that there are no special circumstances that prevent it from doing so, the court or tribunal shall adjourn the proceedings to such date on such terms and conditions as it thinks fit."

It is accepted that the requirements of para(a) and para(b) were satisfied. Accordingly, when the matter came before the learned judge, he was obliged to "adjourn the proceedings to such date on such terms and conditions as (he) thinks fit", provided it appeared to him "that there are no special circumstances that prevent (him) from doing so". His Honour was required by the section to adjourn the proceedings unless there were such "special circumstances".

The Court has before it a statement agreed by both counsel as to the course which events took before the learned judge. The Court has been, in effect, invited by all parties to act upon the basis of that statement. In the circumstances, I think it must do so. As far as is here relevant, what emerges is that on 12 October 1990,

Bryson J had given detailed directions as to the steps to be taken by the parties to bring the proceedings to trial. Those directions were not carried out. It was said that there was a justification for not carrying them out because, on 22 November 1990, Young J had ordered that the other plaintiffs be added as plaintiffs in the proceeding and that applications for legal aid had been made and the applications, or appeals from their refusal, were pending. It is at least arguable that these things provided no justification for the plaintiffs not carrying out the judge's directions, appropriately modified to accommodate the additional parties. But, however that be, it was clear for a considerable time that the proceeding was to come before Bryson J again on 17 May 1991 so that his Honour could - I put the matter generally - review the progress of it.

In anticipation of this, the defendants took steps to bring the delay to an end. On 8 May 1991 Mr Jones, the first defendant, swore an affidavit in support of a motion that the proceeding be dismissed or permanently stayed. The affidavit and a copy of the proposed notice of motion were served on the plaintiffs on 9 May 1991. The motion was returnable on 17 May 1991 before the learned judge.

Therefore, the plaintiffs were aware that, when the proceeding came before his Honour, an application would be made for its dismissal or permanent stay. The affidavit made by Mr Jones contained allegations which, if admissible in the form in which they were made and if true, provided material requiring serious consideration in relation to the proceeding. On one view, Mr Jones suggested abuse of process and other serious misconduct warranting the orders sought in the notice of motion.

When the proceeding came before the learned judge on 17 May 1991, Mr Glissan, for the plaintiffs, applied for an adjournment. Mr O'Gorman, for the defendants, did not consent to the adjournment but it was indicated the defendants did not oppose the adjournment. Discussion took place between his Honour and counsel during which, counsel agree, Mr Glissan informed the judge that the plaintiffs "come from all over New South Wales" and that they "needed time to provide the Legal Aid Commission of New South Wales with the information required by it", they not having "the resources to conduct these proceedings without legal aid". This was contested for the defendants. It was in that context that the judge ordered that the proceeding be dismissed.

After his Honour had made the order for dismissal, Mr Glissan referred his Honour to the provisions of s57 and submitted that that section made it "mandatory for the court to adjourn these proceedings". His Honour said: "Counsel has drawn s57 of the Legal Aid Commission Act 1979 to my attention. In the circumstances of this litigation I do not regard that section as obliging me to adjourn the proceedings."

The refusal of the adjournment was justified if there were "special circumstances". Mr Glissan submits that there was no finding in relation to "special circumstances" which would prevent the operation of s57 and that accordingly his Honour's failure to adjourn the proceeding involved a technical error, a non- compliance with the section.

It is, of course, clear that his Honour made no finding, in terms, that there were "no special circumstances" of the relevant kind. It is, in my opinion, not necessary in every case that a judge who determines that no adjournment should be given must make a finding in terms that there are no special circumstances within para(c). Such a finding may be clear by inference from what he has said and done. Were the matter left to speculation, I would be inclined to think that this Honour saw the progress, or lack of progress, of the proceeding to be such

URE FRIENDS OF THE GLENREAGH DORRIGO LINE INCORPORATED and ORS ¥ JONES and ORS (Mahoney JA)

as to constitute circumstances sufficient to constitute special circumstances warranting the order that he made. However, counsel, when asked, informed this Court that in the proceedings before the judge no attention had been directed to the question whether the relevant special circumstances existed or did not exist. The effect of what has been said by Mr O'Gorman is, I think, that the parties did not attempt to formulate for the judge anything by way of special circumstances or to deal with that issue. Counsel are essentially agreed that this is so and that neither dealt with that issue in the proceeding before the judge.

In these circumstances, upon the basis of what has been put to this Court, I think the Court should hold that what occurred produced a technical defect in the exercise by the judge of his discretion in relation to the adjournment application. I come to this conclusion with some regret but, in the circumstances, I see no proper alternative to it.

Accordingly, his Honour's order should be set aside and this Court must, if it is appropriate to do so, exercise the discretion which the judge was to exercise. The Court has been informed that on 14 May 1991, Mr Abbott, solicitor for the plaintiffs, spoke to an officer of the Legal Aid Commission in relation to the position of the Legal Aid appeal. In an affidavit of 15 May 1991, Mr Abbott said:

"On 14 May 1991 I had a telephone conversation with Mr Berry of the Legal Aid Commission. I said: 'How is the Legal Aid review proceeding for the Friends of the Glenreagh Dorrigo Line Inc v Jones Supreme Court Equity proceedings?' He said: 'The request for appeal was received on behalf of all the applicants for Legal Aid on 7 March 1991. The papers from this office to be placed before the Legal Aid Review Committee will be finalised and forwarded to the Committee this week with a request that it be dealt with by the Committee on the first available date. This office has a lot of work at the moment and we are extremely short staffed. I am not able to confirm this by letter as it is very difficult to arrange typing to be undertaken'. I said: 'Thank you, please arrange for the Committee to deal with the review for Legal Aid as soon as possible'."

Mr Abbott, by letter of 15 May 1991, forwarded a copy of that affidavit to the solicitors for the defendants. The Court does not have the account of Mr Berry of that conversation.

Were the discretion to be exercised upon the basis of the position as there stated, I do not think that the Court should be satisfied, within s57(c), that the proceeding should not be adjourned. The Court has inquired of counsel as to the present position of the Legal Aid appeals. As I understand what has been said, those appeals have been dismissed. However, it is not clear whether they were dismissed by reason of his Honour's order or without reliance upon it.

In all the circumstances, I think the appeal should be upheld, the order for dismissal set aside, and the proceeding returned to the Equity Division to determine what course should now be followed in relation to the proceeding. As I have said, on a strict view of what is to be done, it is open to this Court to exercise its discretion in place of the judge. However, the circumstances have now changed. It is appropriate that the proceeding be returned to the Equity Division to be dealt with in such a way as is appropriate in the circumstances now existing.

Before parting with this matter it is proper to say two things. First, it is proper to record that the decision of the Court is to be arrived at in the absence of full argument by counsel as to the circumstances obtaining when Bryson J made the order that he did. The Court has substantially confined the argument before it to matters relevant to s57. Counsel have ranged beyond such matters but neither Mr

Glissan nor Mr O'Gorman concluded their arguments on other matters prior to the issues arising from s57 being considered.

This is relevant in relation to what I have said as to the delay in the proceeding. What I have said is accordingly not to be seen as necessarily involving criticism of any individual concerned with the litigation. It may be that the conclusions to be drawn from the material as it presently has been put to the Court may not be those drawn following the examination of other information or argument.

But, this having been said, it is proper to record that, insofar as the matter now appears before the Court, the position in relation to the proceeding is less than satisfactory. The Court is appreciative of the cost of litigation and the constraints which that imposes. But parties to litigation, and those assisting them, are to anticipate that there may be public scrutiny of what they do in resolving their differences within the Court. The present proceeding has already involved not merely the amendment of pleadings but appearances before the Court on interlocutory proceedings on several occasions. This involves the expenditure of public and private time and money. It should be understood that it is within the power of the Court and, in certain circumstances, it will be its duty to dispose of proceedings where the parties or those assisting them have not properly utilised the facilities available to them.

In my opinion, the appeal should be upheld, the orders made on 17 May 1991 should be set aside and the proceeding should be returned to the Equity Division to determine what directions or orders should now be made. The defendants should pay the plaintiff's costs of the appeal and if entitled have a certificate under the Suitors' Fund Act. The costs of the proceeding before Bryson J should be dealt with by the judge who determines the proceeding.

Orders made by Bryson J on 17 March 1991, set aside;

Proceedings returned to the Equity Division to determine what directions or orders should now be made;

The respondents to pay the appellants' costs of the appeal and to have, if so entitled, a certificate under the Suitors' Fund Act 1951; and

The costs of the proceedings in the Equity Division to be dealt with by the judge of that Division who determines the proceedings returned to the Equity Division.

Counsel for the Appellants: PR Glissan Instructed by: De Martin and Abbott Counsel for the Respondents: GV O'Gorman

At a glance

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Judgment (82 paragraphs)

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Cases Cited (1)