Malouf v Prince [2008] NSWCA 153 | Case summary

Ex tempore 13 June 2008 John Malouf v Stephen Thomas Prince Judgment 1 HER HONOUR: The District Court of New South Wales presently has sittings at Lismore which commenced on 10 June 2008 and are to run for the balance of that week, which is the week which finishes today, 13 June 2008, together with the week that commences on 16 June 2008 for the ensuing five days. 2 The present matter was listed in those sittings. The plaintiff applied for an adjournment of those proceedings which was refused by the trial judge, his Honour Judge McLoughlin, and his Honour made orders which included that the matter be set down for hearing on Monday 16 June 2008. His Honour also ordered mediation and further ordered that the plaintiff pay the defendant's costs of 10 and 12 June 2008 on an indemnity basis. His Honour further directed the solicitor for the plaintiff to show cause as to why he should not indemnify the plaintiff for those costs. The reference to the dates of 10 and 12 June was a reference to the dates upon which the adjournment application proceeded before his Honour. 3 The District Court proceedings are defamation proceedings brought by the plaintiff who is an ear, nose and throat specialist against the defendant who is also an ear, nose and throat specialist. The adjournment was applied for in circumstances which were set out in a number of affidavits of Gavin John Mills, the plaintiff's solicitor, together with an affidavit of the plaintiff. That material, together with an affidavit of Penelope Anne Newbold, the defendant's solicitor, upon which the defendant had relied for the purposes of the adjournment application together with other correspondence, have been collected together in an affidavit of Gavin John Mills sworn 13 June 2008, which has been filed in Court today in the application before me. 4 The application before me is a Notice of Motion filed today, in which the plaintiff moves the Court for an order that the proceedings below be stayed pending the resolution of the plaintiff's application for leave to appeal and/or appeal from the orders made by McLoughlin DCJ. The matter has come before me urgently and I have heard argument in the course of the whole of this afternoon, the matter having commenced at 2.15 pm. I am now in the process of giving judgment in the matter, shortly after 6 pm. For that reason, I do not propose to set out in any detail the factual matters contained in the affidavit of Mr Mills, save to record the following salient facts. 5 Mr Mills states that he was not aware that the matter was listed for hearing in the Lismore sittings. He had given evidence before the trial judge that it was his understanding that the matter had been listed in those sittings for callover. Accordingly, he had taken no steps to prepare the matter. The plaintiff, Dr Malouf, gave evidence on affidavit before his Honour that he is the only practising ear, nose and throat surgeon at the Tweed Heads District Hospital, but that because he was not aware that the matter was on for trial, he had made no alternative arrangements for his patients and the patients of that hospital to be attended to during the period of the trial. In particular, Dr Malouf gave evidence that he was involved in the care of a critically ill patient, who was in intensive care at the Tweed Heads District Hospital and who required constant monitoring for a ruptured carotid artery. He said he was attempting to make alternative arrangements for the care of that patient, but as I understand the evidence he had not been able to do so up to the time of swearing his affidavit. 6 The other matter which was central to Mr Mills' position as to why he had not understood that the matter was for trial, was that he had understood from a status conference held on 9 April 2008 at Tweed Heads that the matter had been transferred to Lismore for trial but it was listed for callover, and that he had not received any notice for listing. Ms Newbold, the defendant's solicitor, gave evidence before the trial judge that whilst she had received correspondence from Mr Mills immediately after the status hearing, which included a statement that the matter "will be listed for callover at the civil sittings commencing 10 June 2008" subsequent to that letter, she had received a notice of listing stating that the matter was listed at 10am on 10 June 2008 for hearing. She therefore proceeded to prepare the matter for trial. 7 Because of the urgency with which this matter has been brought on for hearing, the parties were not able to obtain a copy of his Honour's judgment in the matter. However, Ms Newbold, in an affidavit sworn 13 June 2008, has set out the reasons of the trial judge so far as she remembered and recorded them in notes that she made whilst in attendance when judgment was being delivered. The following important matters emerge from his Honour's judgment. The first is that his Honour made a finding that Mr Mills was aware at the time of the status conference that the matter was being transferred to Lismore for trial. Secondly, his Honour had accepted Ms Newbold's evidence over the evidence of Mr Mills on any question of disputed fact. Thirdly, his Honour had made findings of fact that Mr Mills was dilatory and negligent in failing to take any steps to prepare for the hearing of the trial during the two weeks commencing 10 June 2008. Next, his Honour referred to a number of authorities relevant to the basis upon which he should exercise his discretion. Those authorities were Haset Sali v SPC Limited [1993] HCA 47; (1993) 116 ALR 625; State of Queensland v JL Holdings Pty Limited [1997] HCA 1; (1997) 189 CLR 146; and Menzies v CRCI Pty Limited [2007] NSWCA 118, as well as to the provisions of the Civil Procedure Act 2005 and in particular ss 56, 57, 58 and 66. His Honour made a finding, apparently, that subject to the transfer of the care of the critically ill patient to which I have referred, the plaintiff would otherwise be available to give evidence. 8 His Honour then made two findings in respect of the defendant's position. First, that he had to rearrange his practice to make himself available for the two weeks of sittings and for the preparation of the matter, and that he had cancelled operating lists and postponed surgery and approximately 200 patient consultations. His Honour observed that the postponement of those matters meant that the public hospital medical staff were also affected and the day to day processes of the hospital were disrupted. Secondly, his Honour accepted that the defendant had lost income in excess of $30,000. His Honour appears to have made a finding that this financial loss could not be covered by costs. His Honour apparently recorded that this figure was conceded by the plaintiff's counsel. I will return to this shortly. 9 His Honour, according to Ms Newbold at para 11 of her affidavit, found that: "… if the Defendant's prejudice was only in the form of costs he would have no hesitation in granting the adjournment however the Judge found that the Defendant has suffered loss which cannot be recouped, both in terms of financial and emotional loss." 10 The matter proceeded with some difficulty before me during the course of the afternoon, having regard to the inability to have access to the judgment, to a transcript and to the entirety of the evidence presented in the Court. 11 However, two particular matters emerged from the material that was before me. First, Mr Mills was cross-examined and it was undoubtedly as a result of that cross-examination that his Honour made his credit finding. Secondly, very late in the hearing before me, the Court was informed that one aspect of that cross-examination related to a communication that Mr Mills had made to a barrister which made it apparent that Mr Mills was aware that the matter was in fact listed for hearing in these sittings. 12 Upon further inquiry, it appears that the communication was an email from Mr Mills to Mr Dawson, the plaintiff's present counsel and who appeared in the matter before me today. That email was read onto the Court record as follows: "Dear Sandy,

[Logo of] Attwood Marshall Lawyers" 13 Both parties accepted that the appropriate basis upon which I was required to determine this application was on the principles stated in House v The King [1936] HCA 40; (1936) 55 CLR 499, in particular at 505. The plaintiff submits that his Honour's determination was unreasonable and plainly unjust in all of the circumstances, those circumstances in effect being that as the plaintiff's case is not ready, he would not be in a position to bring this case during the course of the present sittings, notwithstanding the fact that the matter was stood over to 16 June 2008. The result was likely to be that the plaintiff's claim would be dismissed. In this regard, it should be recorded that it is accepted by both parties that the matter is complex and there are likely to be in the order of at least 10 to 12 witnesses in the matter. Defences have been filed of qualified privilege and truth. 14 I have had the opportunity during the course of the hearing of the Notice of Motion this afternoon to give consideration first to the Country Circuits Civil Directions, which include a direction as follows: "11. Long cases will usually be offered a transfer to Sydney for early hearing with normal priority. Such cases should be listed before the Judicial Registrar for allocation of a hearing date." 15 I have also had the opportunity to consider a number of authorities which deal with the principles which govern a trial judge's discretion in ordering or refusing an adjournment. Those authorities are: Frugtniet v State Bank of New South Wales [1999] NSWCA 458, particularly at [84] ff; Menzies v CRCI Pty Limited, particularly at [30] ff; Dekkan v Picciau [2008] NSWCA 18, especially at [49] ff; and Queensland v JL Holdings, especially at [155]. 16 I have reached the conclusion that it is appropriate to grant the stay. I have done so for reasons which I will state in brief form, but I believe sufficiently for the basis of my reasoning to be understood. 17 First, notwithstanding that his Honour made a finding that Mr Mills understood that the matter was being transferred to Lismore for trial, his Honour did not, so far as is known on the record of his Honour's judgment that I have before me, make any finding as to whether or not Mr Mills received the notice of listing. If he did not receive the notice of listing, then Mr Mills' conduct is understandable. There is some confusion in some of his communications as to his understanding as to whether the matter was to be listed for trial or for mention, but the overall impression that is gained from his evidence is that his understanding was that it was listed for mention or for callover. 18 Secondly, it is likely that this is the type of matter that ought to have been granted a special fixture and for that reason it would not be unreasonable for Mr Mills to have proceeded on that basis. In this regard, there seems no doubt that he raised the matter of a special fixture with Ms Newbold. Again, so far as I can ascertain on the material before me, that was not disputed by Ms Newbold. Nor does she seem to dispute that it was an appropriate matter for there to be a special fixture. If that was the case, it would not be expected that the matter would proceed in these sittings. 19 Another matter which was important, but perhaps less important overall, was his Honour's order for mediation. That order was presumably made under s 26 of the Civil Procedure Act 2005. In the normal course, an order of that type would be made as a precursor to the matter proceeding to trial. As it was an order of the Court, it required compliance, unless the order was vacated. The order for mediation made his Honour's order that the matter be set down for hearing at 10 am on 16 June 2008 a little unusual, as there is some inconsistency in the two orders. That inconsistency may be explained, however, by the comment, which it seems both parties accept was made by his Honour from the bench but not recorded in the orders, that there should be an order for mediation if that could be attended to prior to 16 June. Accordingly, the emphasis that, at one stage, I thought should be given to the apparent inconsistency in the order for mediation and the order setting the matter down for hearing on 16 June, has effectively been dissipated. 20 The final matter, however, which is of significance and which has been the matter which has led me to the conclusion that I should grant the stay, relates to his Honour's finding which I have already referred to, as set out in para 11 of Ms Newbold's affidavit. That seems to have been the critical finding of his Honour and again, so far as I have been able to ascertain in the manner that the matter has come before me and having regard to the urgency of the matter, is in error. 21 In Law of Costs by GE Dal Pont (LexisNexis Butterworths, Australia, 2003), the author states at para 17.34 that: "The presence of parties as witnesses is clearly necessary and proper for maintaining or defending their own rights, and so on taxation the relevant allowances for witnesses are available likewise to parties as to witnesses." 22 The author footnotes a number of decisions, including the very early decision of Chanter v Blackwood (No 3) [1904] HCA 18; (1904) 1 CLR 456 at 458-9. The author also refers more extensively to a decision of Helsham J in Australian Blue Metal Limited v Hughes [1970] 2 SR (NSW) 119 at 123-4. 23 Those authorities do not, at this stage, assist me to know whether in the order for costs that his Honour made, the income that the defendant claims he lost or will lose will be recovered in full, but the order was for indemnity costs and that may be relevant to that consideration. The basic point is that his Honour did err as a matter of principle in that matter. On those authorities it appears that there can be recovery of the defendant's own expenses as witness expenses, and there may also be a question as to whether the real amount of recovery is for effectively a three week period as he was claiming or, alternatively, for some lesser period having regard to what would be allowed on taxation. 24 In the circumstances, to refuse the adjournment would effectively mean that the plaintiff would not be able to prosecute his claim. I consider that his Honour's order not only had the error to which I have referred but was unreasonable, or plainly unjust, in a House v The King sense. Accordingly, I would grant order 1 in the Notice of Motion. 25 [Discussion on costs: see separate transcript] 26 I make Order 1 in the Notice of Motion that the proceedings below be stayed pending the resolution of the applicant's application for leave to appeal and/or appeal, but I exempt from the operation of that order, Order 3 made by his Honour, that there be mediation. The costs of the Notice of Motion for the stay be costs in the cause below.

Malouf v Prince

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Judgment (11 paragraphs)

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