Kojima v Australian Chinese Newspapers

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

No. 12608/00 - KOJIMA AUSTRALIA PTY LIMITED v AUSTRALIAN CHINESE NEWSPAPERS PTY LIMITED JUDGMENT INTRODUCTION 1 Kojima Australia Pty Limited (the plaintiff) has appealed from a decision of the Small Claims Division of the North Sydney Local Court which on 21 August 2000 ordered the plaintiff to pay to the defendant, Australian Chinese Newspapers Pty Limited (the newspaper), an amount of $980 together with costs. The grounds of appeal included in the Summons are that there was a denial of natural justice to the plaintiff:

(a) in not allowing the director of the plaintiff, Eriko Yumikaki, to give evidence;

(b) in that the persons who gave witness statements on behalf of the defendant were not available in person to have their evidence questioned;

(c) in that the court did not give proper or adequate consideration or weight to the statement of the plaintiff's director, Eriko Yumikaki;

(d) because of the procedure adopted at the hearing. 2 During the course of the hearing before this Court the solicitor for the plaintiff sought to raise an argument which extended beyond the bases on which denial of natural justice was asserted in the summons. To permit such argument to be raised she sought an amendment to add an additional basis on which it was claimed that natural justice had been denied. It was in the following form: "The assessor denied natural justice in failing to enter into consideration as to whether the procedure should be changed." 3 In view of the decision in Shannon v Lee Chun (1912) 15 CLR 257, as applied in Longhurst-Saunders v Cooper (1956) 73 WN (NSW) 455 the amendment was allowed, notwithstanding that it was raised only in the closing stages of argument.

FACTS 4 The proceedings out of which the appeal arises involved a claim by the newspaper for $980 in respect of 14 advertisements placed in the Australian Chinese Daily between March and June 1999, at a charge of $70 for each advertisement. 5 Prior to March 1999 there had been advertisements for the plaintiff's restaurant inserted by the plaintiff. These had been paid for. However, no payment had been made in respect of advertisements inserted thereafter, despite a number of invoices which had been forwarded by the newspaper to the plaintiff in March, April, May and June, 1999. 6 The newspaper instituted an action in the Small Claims Division of the Local Court claiming the amount of the invoices submitted but unpaid, namely $980. 7 The action was the subject of a directions hearing before the Local Court on 19 June, 2000. At the directions hearing the plaintiff was represented by a solicitor who made notes of what transpired. His notes include the following: "Proceedings have been set down for hearing on Monday 21 August 2000 at 3.00 p.m. We stated that we would proceed by way of written statement by Ms Yumikake. (She will need to attend,) The plaintiff's solicitor (Mr Mark Barnes) undertook to the court to provide particulars within 14 days of the claim, in particular who from the defendant authorised the ad and how it was authorised." 8 Those parts of the solicitor's note which are shown in bold consist of handwritten insertions in the typewritten file note. The insertion concerning the time for supply of particulars is placed between the lines above a caret. There is no evidence as to the maker, or time of making, of such insertions, however, it is a fair inference that they were made by the solicitor who prepared the file note. What is clear from the note and from the subsequent conduct of the case before the Local Court is that it was agreed that the hearing of the action should proceed by way of written statements. There is no suggestion that there was any direction agreed to or given requiring any of the witnesses, whether on behalf of the plaintiff or on behalf of the newspaper, to be present at the hearing. Indeed, the Local Court's Pre-Trial Review Summary Sheet, a copy of which is given to each party, shows that no such direction was given and that the nature of the hearing agreed upon was "INFORMAL HEARING." That entry in the in the Pre-Trial Review Summary Sheethas an asterisk beside it. The asterisk relates to a notation at the foot of the Sheet. The notation states as follows: "Unless otherwise ordered, an informal hearing involves each party producing to the court and the other party on the date of the hearing the written materials set out above in part 4. Directions Given. Witnesses are not normally required to attend. Each party will then be given an opportunity to make an oral submission based on the materials submitted and to comment on the other party's case. The court will then make its decision. The recovery of legal costs is limited and there is no automatic right of appeal."

The reference to "part 4. Directions Given" is to a section of the Pre-Trial Summary Sheet in which the nature and source of evidence proposed to be called is recorded. In the instant case it showed that the evidence in each case was to be by way of "statement of facts". 9 The form of the first hand written insertion in the file note, i.e. relating to the presence of the representative of the plaintiff is consistent with there not having been a direction given or requirement imposed to that effect by the Local Court. Taken in conjunction with the rest of the file note and the Pre-Trial Review Summary Sheet, the handwritten section relating to Ms Yumikaki would seem to be no more than an aide-memoire for the solicitor for the plaintiff as to his requirement that Ms Yumikake be present. It does not present as, nor was it suggested that it recorded, any order or direction given by the Local Court at the directions hearing. 10 When the matter came on for hearing before the Assessor, the solicitor for the plaintiff was present together with Ms Yumikaki and a Japanese interpreter. A solicitor appeared for the newspaper but none of the witnesses for the newspaper was present. There is nothing to suggest that the presence of any such persons was then sought on behalf of the plaintiff or required by the court or that the absence of such persons was the subject of any comment or application on behalf of the plaintiff. 11 Written statements by three witnesses were tendered on behalf of the newspaper together with supporting documentation. So too was the written statement of Ms Yumikaki, together with a copy of one cheque butt. The evidence then closed and the representatives of the parties were given an opportunity to address. 12 The solicitor for the newspaper addressed. He was followed by the solicitor for the plaintiff. At the conclusion of the address by the solicitor for the plaintiff, the Assessor asked the solicitor for the newspaper if he wished to reply. He did so and the Assessor then gave the solicitor for the plaintiff yet another opportunity to make "any final comments" before judgment was given. It was at that stage that the solicitor for the plaintiff said that Ms Yumikaki was in Court to give evidence. There is no evidence before the court to suggest that any formal application was made for leave to reopen the plaintiff's case, nor is there anything to suggest that leave was sought to cross-examine the persons who had given statements on behalf of the newspaper or to adjourn the proceedings so as to allow their presence for that purpose. The Assessor responded to the effect that whilst he appreciated that Ms Yumikaki was present and could give evidence "that is not what was agreed." 13 The solicitor for the plaintiff did not, according to the notes of what transpired at the hearing, make any further or final comments and the Assessor then delivered his decision in which he ordered the plaintiff to pay the amount of $980 as claimed by the newspaper together with appropriate costs. APPLICABLE LAW Statutory 14 Section 69 of the Local Courts (Civil Claims) Act, 1970 (NSW) provides as follows: " 1 . Subject to sub section 2, all judgments and orders of a Court exercising jurisdiction under this Act shall be final and conclusive. 2. A party to proceedings under this Act who is dissatisfied with the judgment or order of the Court as being erroneous in point of law, may appeal to the Supreme Court therefrom. (2A) However, in the case of proceedings in the Small Claims division of a court, an appeal under subsection 2 lies only on the ground of lack of jurisdiction or denial of natural justice. 3. The provisions of s.101 to s.115, both sections inclusive, of the Justice's Act 1902, apply, to the extent to which they are applicable to appeals under subsection 2 in the same way as they apply to appeals to the Supreme Court under those provisions." 15 In December 1998 the Justices Legislation Amendment (Appeals) Act, 1998 was assented to. It deleted the then existing Part 5 of the Justices' Act, 1902, and substituted a new Part 5 of that Act. The purpose of the Justices Legislation Amendment (Appeals) Act, 1998 was to reform the appellate process from Local Courts by substituting an appeal by way of summons to the Supreme Court in accordance with the Supreme Court Rules rather than by way of Stated Case or like procedure, as had been the situation under the provisions of the previous Part 5 of the Justices Act, 1902. 16 By virtue of s 102(3) of the amending Act, Part 5 is made to apply to appeals which are not criminal or quasi criminal in nature, but for the reasons stated in Pace v Read (2000) NSW SC 823, 18 August 2000 (unreported) s.102(3) does not effect an amendment to or repeal of s.69 of the Local Courts (Civil Claims) Act 1970. As a consequence the combination of s.69(2) and s.69(2A) of that Act results in the present appeal being restricted to error in point of law on the ground of lack of jurisdiction or denial of natural justice. This means that in the circumstance of the present case ground of appeal number 4 in the summons (see paragraph 1(d) above) is not open to the plaintiff, since that ground involves a mixed question of fact and law. Furthermore, although included in the summons, this basis of denial of natural justice was not pressed. 17 The Local Courts (Civil Claims) Act 1970 (the Act) provides that for the purposes of exercising the jurisdiction conferred on courts by or under the Act, the court is divided into a General Division and a Small Claims Division (s.61). The jurisdiction of the court in its Small Claims Division may be exercised by an Assessor or a Magistrate sitting alone (s.63). The jurisdiction of the court sitting in its Small Claims Division was, at the material time, limited to $3,000 (s.12(3)). In September 2000 this jurisdictional limit was increased to $10,000. 18 The statutory basis for the procedure in the Small Claims Division is specified in s.23B of the Act as follows: "(1) Proceedings in the Small Claims Division of a court are to be conducted with as little formality and technicality as the proper consideration of the matter permits. (2) The rules of evidence do not apply to an action being heard or other proceedings in the Small Claims Division of a court. (3) An Assessor or Magistrate exercising the jurisdiction conferred on a court sitting in its Small Claims Division may inform himself or herself on any matter relating to an action being heard or other proceedings in the Small Claims Division in such manner as he or she thinks fit. (4) Proceedings in the Small Claims Division of a court (other than any judgment given or order made in respect of the proceedings) are not required to be recorded." 19 A clear legislative policy emerges from the Act in relation to small claims, namely, that there should be a quick, cheap and informal resolution of such claims. To achieve this, the proceedings should be conducted with the minimum of formality. That has many advantages. It tends to shorten proceedings. It assists in reducing costs. It makes it easier for litigants in person to understand the procedures, perhaps to appear for themselves and not be disadvantaged by excessive formality and procedural rules. Furthermore, the legislation has been so framed as to ensure to the greatest extent possible that claims before the Small Claims Division of the Local Court should begin and end in that court. The limitation on the right of appeal permitted by the statute betokens this. Such a policy is readily understandable in the light of the fact that the ceiling for claims in the Small Claims Division is so low, $3,000 at the material time. Taking up the time of superior courts with such small matters is thus avoided in the vast majority of cases. 20 It is against such a legislative framework and intent that the Small Claims Division of the Local Court has evolved procedures for dealing with small claims. These are largely the work of the late Mr K Henderson, Magistrate, and has been followed for some years. There are different forms of hearing open to the parties to accept in order to progress their claims with a minimum of expense and formality and maximum of speed, having regard to the amount involved and issues posed in each case. They are:

(a) informal hearing, that is a procedure in which written statements and relevant documentation is presented without the necessity or expense of witnesses attending. No oral evidence is given and there is no cross-examination;

(b) semi-formal hearing, that is a procedure adopted in a case in which it is considered necessary that a witness or witnesses should be questioned by the parties after their written statements have been tendered;

(c) formal hearing, that is a procedure in which evidence is taken on oath and there is cross-examination and addresses in the same way as in an ordinary adversarial proceeding in a superior court. 21 The choice is that of the parties in the first instance, although in accordance with the Act the court may determine its own procedures if the parties do not agree or where the court's assessment of the case is different from that of the parties. According to the Local Court Civil Practice (Butterworth page 20618-9) "only a handful" of litigants has opted for semi-formal hearings and none for formal hearings. That is confirmed by evidence from a practitioner conversant with the business of the court. 22 The choice as to form of hearings open to the parties is made known to them and is well known to legal practitioners who appear in the Local Courts. The decision by the solicitor for the plaintiff to opt for the informal type of hearing should be seen against the background of choices available, the amount of the claim and the basis on which the plaintiff proposed to defend the claim.

NATURAL JUSTICE 23 The requirements of natural justice (or procedural fairness as it is now commonly referred to) apply to the Small Claims Division of the Local Court. This is clear from the nature of the function to be performed by that tribunal and the statutory recognition that is afforded to natural justice by s 69 (2A) of the Act. 24 The content of the requirements of natural justice is not fixed. The content is fluctuating. The overarching requirement is that of fairness (National Companies and Securities Commission v News Corporation Limited (1984) 156 CLR 296 at 312 per Gibbs CJ with whom Brennan J agreed). For a court that normally involves a duty to:

(ii) deal with the matter for decision without bias;

(iii) give each party the opportunity of adequately presenting its case;

(iv) observe the procedural and other rules provided for in the relevant statute;

(v) come to its decision with that sense of responsibility that is the necessary accompaniment of the duty to do justice. 25 These requirements emerge from the seminal decision of The King v War Pensions Entitlement Appeal Tribunal: Ex parte Bott (1933) 50 CLR 228 at 248 per Starke J. 26 The requirements of natural justice are not a fixed body of rules applicable at all times and in all circumstances. They will depend upon the particular circumstances of a given case or class of case. The decision in The Queen v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 makes this clear. Barwick CJ, McTiernan, Kitto, Taylor, Menzies, Windeyer and Owen JJ said: "… it must be borne in mind that these principles (of natural justice) are not to be found in a fixed body of rules applicable inflexibly at all times and in all circumstances. Tucker LJ said in Russell v Duke of Norfolk (1949) 1 All ER 109 at 118 : 'The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with and so forth' This passage was approved by the Privy Council in University of Ceylon v Fernando (1960) 1 WLR 223 and was used by Kitto J in Mobil Oil Australia Pty Limited v Federal Commissioner of Taxation (1963) 13 CLR 475 at 504. There His Honour observed: 'What the law requires in the discharge of a quasi judicial function is judicial fairness … what is fair in a given situation depends upon the circumstances' We agree with the foregoing statements of the relevant law. It is plain that when it is necessary to consider a question of fairness in relation to a tribunal the whole of the circumstances in the field of inquiry are of importance. The nature of the jurisdiction exercised and the statutory provisions in the field of the inquiry are of importance." (supra at 552-553) 27 Even in a given class of case the requirements of fairness may differ from case to case because of differing circumstances. In Salemi v MacKellar (No 2) (1977) 137 CLR 396 Stephen J said that the rules of natural justice "may also vary from case to case although each be conducted before one and the same tribunal or person" (supra at 444) and this statement was adopted by Gibbs CJ in National Companies and Securities Commission v News Corporation Limited (supra at 312). 28 The requirements of natural justice do not mandate an oral hearing in every case. In White v Ryde Municipal Council (1977) 2 NSWLR 909 Reynolds JA, with whom Moffitt P agreed, said: "As a general proposition, it is plain enough that he who decides must hear. However, this must be understood in the sense that the decision maker has before him the evidence and submissions of those entitled to be heard. It is by no means a universal requirement that the decision making body must see and hear witnesses … So much appears from the leading authorities on this subject: Local Government Board v Arlidge (1915) AC 120 and Jeffs v New Zealand Dairy Production and Marketing Board (1967) 1 AC 551." (supra at 923)

(See also Jet 60 Minute Cleaners Pty Limited v Brownette (1981) 2 NSWLR 232 per Hunt J) 29 The immigration cases that have been considered by the Federal Court of Australia adopt a like approach. For example, in Chen v Minister for Immigration (1994) 48 FCR 591 it was said: "It is beyond argument that the rules of natural justice do not mandate in all cases an oral hearing for the person affected. This was recognised by the House of Lords in Local Government Board v Arledge (1915) AC 120 at 133. There have been many developments of the law in this area since Arledge but it remains clear that an oral hearing is not necessary in every case." (supra at 597); 30 In Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 the High Court considered a statutory power to warn off persons from race courses. The exercise of such a power casts serious aspersions on the character of the person warned off, exposes such person to the hazard of possible criminal sanction and may adversely affect the person's livelihood. The consequences of the exercise of the power can therefore be serious. In relation to the process involved in the making of such an order Aikin J, with whom Stephen and Mason JJ agreed, said: "I do not think that fairness requires in this context an oral hearing though in some circumstances the Commission may well find that it cannot resolve inconsistencies between its information and written submissions from the person concerned without such a hearing. It is however for the Commission itself to devise its own procedures in the light of its obligation to act fairly " (supra at 516; bold added) 31 Similarly, the requirements of natural justice may not confer on a party the right to cross-examine in a given case. Beveridge v Dontan Pty Limited (1990) 23 NSWLR 13, which was concerned with a reference pursuant to Pt 72 of the Supreme Court Rules, makes this clear. The Referee, in accordance with the Rules of Court, accepted written statements signed by the makers of the statements. The unsuccessful party moved to have the Referee's report returned for further consideration on the basis that the Referee denied natural justice to such party by depriving it of the benefit of an oral hearing and of the opportunity of cross-examining one of the witnesses on his statement. Rogers CJ Comm Div posed the question: "Does natural justice require that the referee should have held a hearing and in particular given the defendant an opportunity of cross-examining …?" (supra at 21). He answered the question by holding that the unsuccessful party had not been denied natural justice by virtue of the procedure which had been adopted, albeit that it denied an opportunity to adduce oral evidence by way of cross examination. (supra at 24). A number of the immigration cases in the Federal Court of Australia to which the court has been referred arrive at the same conclusion. 32 There may, however, be cases in which the denial of an oral hearing or of the right to cross-examine may constitute a denial of natural justice. In determining whether that is so or not in a given case, it is necessary to consider the whole of the circumstances including the legislation, the general practice as understood by the parties and any agreement as to the way in which the proceedings are to be conducted. It is for the relevant tribunal, in this case the Small Claims Division of the Local Court, to determine this in the light of its obligation to act fairly.

ANALYSIS 33 There is no suggestion that the solicitor who appeared at the directions hearing on 19 June, 2000 was unaware of the range of hearing procedures from which the parties could choose. It is clear that the solicitor for the plaintiff himself opted for the procedure of using written statements (the informal hearing) which was adopted. Whether or not he suggested such procedure or perhaps does not matter, since he acceded to such a manner of hearing. He did so well aware of his client's defence to the claim by the newspaper, which raised the issue how, when, where and by whom the advertisements in dispute were authorised. The Pre-Trial Review Summary Sheet confirms this. There was no requirement that any of the witnesses be present. This is understandable in the light of the very small claim involved. The presence of the representative of his client was of her choosing, not the result of any direction by or requirement of the Local Court. 34 There was nothing in the procedure agreed upon between the parties and adopted by the court that ran counter to the requirements of natural justice. Furthermore, the agreement between the parties as to the procedures to be adopted was an acknowledgment that the ground rules adopted for the hearing were appropriate and fair for the particular case to be tried. 35 No suggestion was made before evidence was tendered, or during the course of the evidence, that the plaintiff wished to give oral evidence. No comment was made about the absence from the hearing of the witnesses for the newspaper whose statements were tendered. The matter proceeded in accordance with the procedure that had been opted for by the solicitor for the plaintiff, agreed to by the solicitor for the defendant and adopted by the court. There was no denial of natural justice in that. 36 It was only after the evidence had closed and perhaps as a result of what transpired in the course of addresses, that the solicitor for the plaintiff advised the tribunal that a director of the plaintiff was present with an interpreter to give evidence. No formal application was made to re-open the plaintiff's case. However, because of the informality of the procedure in the Small Claims Division of the Local Court it is appropriate to consider the intervention by the solicitor for the plaintiff as constituting such an application. The Assessor, by saying: "That is appreciated but that is not what was agreed …" undoubtedly demonstrated that he considered, but rejected, the request to be implied from the statement by the solicitor for the plaintiff. 37 The case was all but over when the solicitor for the plaintiff advised the court that Ms Yumikaki was "in court with an interpreter to give evidence". Had she wanted to do so prior to that time that should have been raised and an application made to the court at the outset of the case. It was not. The sequence of events rather suggests that the course of addresses caused the solicitor for the plaintiff to become anxious about the possible outcome and because of this to want to supplement the case for the plaintiff, notwithstanding that he had been content up to that time to present the case in the way which had been agreed. 38 Far from the above circumstances indicating a denial of natural justice to the plaintiff, I am of opinion that it could well be said that had the Assessor acceded to the request inherent in the statement made by the solicitor for the plaintiff there may have been a denial of natural justice to the newspaper. Its witnesses were not there. Its solicitor would presumably have prepared the matter on the basis that it would proceed as agreed. He would not therefore have prepared a cross-examination of Ms Yumikake. An adjournment would have been necessary with its attended costs in a case in which the claim was small. No adjournment was sought on behalf of the plaintiff. 39 Giving leave to reopen a case after the close of evidence involves the exercise of a discretion. Such leave is not common and should not be given merely to permit a party to fortify evidence already given (Betts v Whittingslowe (No 1) 1944 SASR 163) per Napier CJ. It has been said that such leave should be rarely given or that it should be given only in an exceptional case (R v Bishop (1998) 1 VR 531 at 535 per Orminston JA, with whom Charles and Harper JJA agreed. That case highlighted that the court will not encourage attempts to bolster cases "with unnecessary afterthoughts" (supra at 536) and that the closing of a case in a civil matter has even greater significance than the closing of a case on a plea in a criminal matter (id). 40 In order for this court to intervene in relation to the exercise of a discretion in the court below, the case must fall within well defined categories of error. These are dealt with authoritatively in House v The King (1936) 55 CLR 499. The decision of the assessor not to permit a re-opening of the plaintiff's case after the close of evidence does not reveal error of the kind referred to in that case. 41 No application was made for leave to cross-examine the witnesses whose statements had been tendered on behalf of the defendant. Absent such an application it is difficult to see how ground 3 in the summons (see para 1(c) above) has any basis on which it could succeed. None was adverted to on behalf of the plaintiff. 42 When regard is had to the nature, limited jurisdiction and flexible procedure provided for in the relevant statutory provisions, to the nature of the case and amount involved, to the adherence to the procedure agreed to by the parties and adopted by the court, to the stage of the proceedings at which the suggestion of oral evidence was raised, and the absence of any application to cross-examine the witnesses for the newspaper, I am satisfied that there was no denial of natural justice in the instant case in the procedure adopted, or by not allowing Eriko Yumikaki to give oral evidence, or by the unavailability of the witnesses for the newspaper to be cross-examined, or at all. 43 The additional ground of appeal introduced by the amendment referred to in paragraph 2 above is without merit. It is clear that the Assessor not only considered the application made by the solicitor for the plaintiff, but rejected it for reasons which, in my opinion, were adequate and appropriate and in any event involved the exercise of a discretion which has not been shown to have miscarried. 44 For the foregoing reasons the Summons in this matter should be dismissed.

ORDERS 45 1. Summons dismissed. 2. Plaintiff to pay the defendant's costs. **********

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