Kazal v Thunder Studios Inc

The application for leave to appeal and the proposed grounds of appeal 8 The application for leave to appeal is in the following terms: 1. His Honour erred in refusing to extend from 4pm 15 September 2017 to 4pm 22 September 2017 the time for compliance with his Honour's self-executing order of 7 September 2017; 2. The consequence of his Honour refusing the extension of time sought is that the Applicant's Defence is struck out. 3. It is not in the interests of justice that the principal proceedings should proceed without the Applicant being able to rely on his Defence; 4. It would not be in conformity with the overarching purpose of the civil practice and procedure provisions that the trial proceed without the Applicant being able to rely on his Defence, with the appeal against his Honour's decision of 8 December 2017 deferred to be dealt with after the trial, because: a. The Appeal has good prospects of success; b. There is no realistic prospect of the issue on the Appeal becoming moot, with the result that the appeal will need to be dealt with after the trial, if it is not dealt with now; c. To deal with the Appeal after the trial would be likely to result in waste of costs, time and judicial and court resources. 5. Accordingly, leave should be given to agitate the appeal at the present interlocutory stage. 9 The proposed ground of appeal in Mr Charif Kazal's draft notice of appeal is as follows: His Honour Justice Rares erred in refusing to extend from 4pm 15 September 2017 to 4pm 22 September 2017 the time for compliance with his self-executing order made 7 September 2017 for the service of further verified answers to interrogatories.

Leave to appeal considerations 10 While the discretion to grant leave to appeal pursuant to s 24(1A) of the Federal Court of Australia Act and the corresponding rule for bringing such an application, being r 35.11(a) of the Federal Court Rules 2011 (Cth), is unfettered, the legislature has evinced a policy against the bringing of interlocutory appeals except where the Court, acting judicially, finds reason to grant leave. Generally speaking, a tight rein should be kept on interlocutory decisions on a point of practice. However, leave will more readily be granted on an interlocutory decision determining a substantive right: see Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 (Decor v Dart) at 399-400. Given that the effect of the orders in the present case is to maintain the position whereby Mr Charif Kazal is forced to proceed to trial without a defence, this application will be treated as at least involving something akin to a substantive right, without deciding whether it truly has that character. 11 The guidance to the exercise of discretion to grant leave to appeal approved in Decor v Dart is cast in the form of two interrelated tests that bear on each other: (1) whether, in all the circumstances, the decision is attended with sufficient doubt to warrant it being reconsidered on appeal; and (2) whether substantial injustice would result if leave were refused, supposing the impugned decision to be wrong. The correctness of those tests is not in doubt. There will continue to be cases raising special considerations and, accordingly, this Court should not regard its hands as tied by these tests. No special consideration has been suggested as applying to this case beyond the practical impact of the primary judge's decision standing. 12 Because the decision sought to be appealed is discretionary, Mr Charif Kazal needed to at least point to the real possibility of a viable argument that the primary judge erred in the manner described by the High Court in House v The King (1936) 55 CLR 499 at 504-505. Although that passage is well-known, its pithy exposition warrants reproduction because of its direct application to this case: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. 13 Particular express asserted errors were pointed to on behalf of Mr Charif Kazal, as detailed below. A faint submission was made as to some other kind of error being present by reason of the harsh result, but this was not developed to the point of being able to assist the Court. No such implied error is apparent, because the primary judge plainly recognised that the effect of his Honour's decision was harsh, but concluded, for reasons that were not shown to be wrong, that it was not unjust. It follows that nothing less than pointing to a viable express error will suffice in this case.

The asserted express errors relied upon 14 The written submissions for Mr Charif Kazal at [14] asserted the following errors: It is submitted that his Honour erred in refusing to extend the time for compliance with Order 4 because: a. He gave undue weight (at [13]) to the failure to comply with the "well-settled obligation" described by Hunt J in Palmer v John Fairfax (1986) 5 NSWLR 727. However, that obligation relates to the statutory defence of qualified privilege, the touchstone of which is reasonableness of conduct, not, it is submitted, the common law defence of qualified privilege, the touchstone of which is reciprocity of duty or interest. The First Respondent's Amended Defence pleads only common law qualified privilege. b. He mistook the import of the First Respondent's evidence that he had been "unavailable to verify the answers" as indicated that the First Respondent never intended to verify the answers while overseas. c. He applied an overly-stringent standard in considering the steps the First Respondent should have taken to ensure compliance with the Order; d. He gave insufficient weight to the natural tendency of a lay litigant to rely on his lawyers; e. He gave excessive weight to the failure of the First Respondent to give evidence in the extension application explaining earlier slippages in the timetable.

First asserted error - giving undue weight to the failure to comply with the "well-settled obligation" described in Palmer v John Fairfax (1986) 5 NSWLR 727 15 Mr Charif Kazal asserted that [13] of the primary judge's reasons, reproduced at [4] above, contained this error. It should be noted that at [15], his Honour recorded counsel for Mr Charif Kazal as having accepted that the 31 July 2017 answers to interrogatories suffered from the vice in Palmer v John Fairfax & Sons Ltd (1986) 5 NSWLR 727 at 732B- 733G that his Honour had described at [13]. 16 The parties to this interlocutory application each provided detailed reasons as to why his Honour had, or had not, erred in relation to Palmer. However, at the hearing of the application for leave to appeal, I raised the question of how any such error, assuming it was an error, had affected the decision sought to be appealed. While Palmer was referred to by his Honour in the "Consideration" part of his Honour's reasons at [34], that reference was confined to explaining the antecedent reasons why the 7 September 2017 order had been made requiring Mr Charif Kazal to provide a better answer to interrogatory question 44. Nothing turned on the reason for the conclusion that the answer given was inadequate, and the order to provide a better answer was not opposed. If it had been necessary to decide, in all likelihood I would have concluded that his Honour did not err in this respect, but, given the circumstances, there is no need to decide that either way. That is because, at most, the reference to Palmer was no more than a background explanation as to why that part of the 7 September 2017 order to provide better answers had been made. 17 Counsel for Mr Charif Kazal was unable to point to any other reason why the reference to Palmer had in any way infected the conclusions the primary judge reached in refusing an extension of time in which to comply with order 4 made on 7 September 2017. That aspect of the error sought to be agitated on appeal has no serious prospect of success. This reason for granting leave to appeal is not made out.

Second asserted error at [36] to [39] of the primary judge's reasons 18 This asserted error turns on what the primary judge said at [36] to [39] of his Honour's reasons as follows (with his Honour's original emphasis in bold): 35 Charif's evidence explaining his breach of order 4 was simply that, although he knew of the order to verify and file the answers by 15 September 2017, on that day: I was still in the United States … out of the country and unavailable to verify the Answers. 36 That evidence was not correct. He would have been able to verify the answers, had he made arrangements in New York to do so. He chose not to make any arrangements there either in advance of the time specified in order 4 or later. It is not an explanation of his default for him to assert that, by the time he and his lawyers finalised the drafting of his answers, it was in the early morning, around 2.00am, in New York, which he knew was about 4.00pm on 15 September 2017 in Sydney. Both Charif and his lawyers knew that his answers had to be verified and filed by that time. First, they did not seek an extension before 15 September 2017, despite their awareness of the consequence of non-compliance under order 5, and the difficulties that his conduct in being in New York on 14 and 15 September 2017 caused (the reason for which he did explain) in having his answers verified while he was there, particularly having regard to the then state of preparation of his draft answers. Secondly, Charif made no attempt to verify his answers subsequently while in New York. As his evidence made clear, he never intended to do so because, in his words, he was "out of the country and unavailable to verify the Answers". 37 He chose to be out of the country and his "unavailability" consisted in his failure to arrange to be with someone before whom he could verify his answers in New York, before the expiry of the time in order 4. He did not make arrangements to attend upon such a person then, or even after the expiry of the time in order 4. Indeed, he chose to wait, as I infer he always intended, until it suited him to verify his answers after his subsequent return to Australia, when he would no longer be "unavailable". In fact, he only did so, again for reasons he did not explain, two days after his return on 19 September 2017. 38 So the question that arises is: what is the injustice against which Charif is seeking relief? In my opinion, it is the consequence of his deliberate, unexplained and conscious choice to be "unavailable" in New York as a result of which he made no arrangements to comply for the third time with an order that he file and serve verified answers to the interrogatories on or before the date ordered by the Court, in this instance, 15 September 2017. 39 I am unable to see, in those circumstances, why the orders of 7 September 2017, or their operation, have created injustice to Charif. No doubt the consequence of his wilful and deliberate flouting of the Court's orders is harsh on him in this litigation, for he has presently lost his defence to the current statement of claim. But he lost that defence because he did not intend to, and did not, comply with the order to verify his answers until it suited him on his subsequent return to Australia. Nothing prevented him from putting himself into the position to verify his answers with, if need be, his own amendments to the draft he then had in New York during 14 or early on 15 September 2017 New York time, or seeking to do so, after receiving the final version, later during the day on 15 September 2017 after, perhaps, the time had passed in Sydney and then returning the verified answers promptly. 19 Counsel was unable to explain how it was not open to the primary judge, on the totality of the evidence before his Honour, including the sparse and limited evidence from Mr Charif Kazal himself, to conclude that there was no intention to verify the answers while overseas, but rather, as had happened before, initially providing them as an unverified draft and verifying them only upon return to Australia. As the passage quoted from House v The King above at [12] makes clear, it is not enough that an appeal court might reach a different conclusion. In my opinion, the inference his Honour drew was fairly available to him. Indeed, even though it was not the only conclusion open, it was a reasonably compelling inference to draw on the available evidence. No arguable case for error has been demonstrated. That aspect of the error sought to be agitated on appeal therefore has no serious prospect of success. This reason for granting leave to appeal is not made out.

Third, fourth and fifth asserted errors as to weight or emphasis given to evidence 20 In terms, the third, fourth and fifth asserted errors refer to the weight or emphasis that the primary judge gave to the facts that were established on the evidence before his Honour along with inferences his Honour drew. This language points to the difficulty in any of these arguments succeeding. As with the second asserted error, it has not been shown how it was that the conclusions his Honour reached were not open to him. The asserted errors do not rise above discontent with aspects of the reasons his Honour gave for the conclusion reached. No arguable case for establishing error has been demonstrated. Those aspects of the errors sought to be agitated on appeal therefore have no serious prospect of success. These reasons for granting leave to appeal are not made out.

Conclusion 21 None of the asserted errors sought to be agitated on appeal have been shown to be viable. The proposed appeal is doomed to fail. The application for leave to appeal must therefore be refused with costs. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromwich.