Malouf v Prince

DECISION: 1. Application for leave to appeal refused with costs. 2.Motion to allow further evidence dismissed. 3. Applicant to pay the costs of the application before Beazley JA, for leave to appeal and the motion to allow further evidence. 4. Respondent's motion for dismissal of the application for leave to appeal dismissed. 5.No order as to costs in respect of the respondent's motion.

CATCHWORDS: APPEAL - leave to appeal - matter of practice and procedure - refusal of adjournment and related costs orders - interference with discretion of court below - whether injustice - general principles

LEGISLATION CITED: Supreme Court Act 1970 Trade Practices Act 1974 (Cth)

Adam P Brown Male Fashions Pty Ltd v Philip Morris [1981] HCA 39; (1981) 148 CLR 170 CASES CITED: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Malouf v Prince [2008] NSWCA 153 Re Will of Gilbert (1946) 46 SR(NSW) 318

PARTIES: John Malouf - Applicant Stephen Thomas Prince - Respondent

Mr ATS Dawson - Applicant COUNSEL: Mr FG Lever SC - Respondent

SOLICITORS: Attwood Marshall Lawyers (QLD) - Applicant Walters Solicitors - Respondent

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40178/08 DC 24/2007

McCOLL JA MACFARLAN JA NICHOLAS J

Wednesday 24 June 2009 John Malouf v Stephen Thomas Prince Judgment

1 McCOLL JA: I agree with Nicholas J. 2 MACFARLAN JA: I agree with Nicholas J 3 NICHOLAS J: Before the Court were an application for leave to appeal, and to appeal, from orders made by his Honour Judge McLoughlin on 11 June and 12 June 2008 which were heard concurrently. There were also the applicant's motion for leave to admit further evidence on the appeal and the respondent's motion for orders that the application for leave to appeal be dismissed as an abuse of process, with costs on an indemnity basis. 4 The proceedings were commenced by the applicant in the District Court at Lismore by statement of claim claiming damages for the publication of defamatory imputations in letters of 6 March and 10 March 2006, and damages under s 87 Trade Practices Act 1974 (Cth) for such publications. The defence pleaded defences of common law and statutory qualified privilege, truth, honest opinion, fair comment, and an offer of amends. It was estimated that the trial would involve numerous witnesses, and would take about 10 days. 5 In due course the proceedings were listed for hearing in Lismore at the sittings commencing 10 June 2008 before the primary judge. On that day, his Honour stood over to 11 June 2008 the applicant's motion for an adjournment of the proceedings to the sittings in September 2008. The adjournment was sought because the applicant contended that neither he nor Mr Mills, his solicitor, was aware the matter had been listed for hearing in the June sittings and that he and the applicant were unprepared to proceed with the trial. 6 On 11 June 2008 his Honour heard the application. He adjourned its further hearing to 12 June 2008 to afford the applicant opportunity to provide evidence of prejudice should the application be refused and the matter be directed to proceed. He ordered the applicant to pay the respondent's costs of the day on an indemnity basis, and ordered the applicant's solicitor to indemnify the applicant for those costs. 7 On 12 June 2008 evidence of prejudice on behalf of each party was considered by his Honour. However, he refused the adjournment application, and ordered the hearing to proceed on 16 June 2008, and ordered the applicant to pay the respondent's costs of 10 June and 12 June 2008 on an indemnity basis. He directed the applicant's solicitor to show cause why he should not indemnify the applicant for those costs. 8 On 13 June 2008 Beazley JA heard the applicant's motion for an order that the proceedings below be stayed pending the resolution of his application for leave to appeal and/or appeal from the primary judge's orders. Her Honour concluded, in an ex tempore judgment, that it was appropriate to grant a stay: Malouf v Prince [2008] NSWCA 153 at [16]. She found (at [23] - [24]), for the purposes of the stay application, that the primary judge had erred in principle in finding that the respondent's financial loss occasioned by an adjournment could not be recovered by costs, and that the refusal of the adjournment in the circumstances was unjust as it effectively meant that the applicant would not be able to prosecute his claim. 9 Beazley JA ordered that the proceedings below be stayed pending the resolution of the applicant's application for leave to appeal and/or appeal, and ordered that the costs of the notice of motion be costs in the cause. 10 Beazley JA's judgment includes a summary of the District Court proceedings from which the following relevantly appears: "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 matters. 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 periods 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.

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.

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.

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.

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.'

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.

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.

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, Appeared at status conference this morning. Matter adjourned to Lismore District Court for mention at callover during sitting beginning 10 June 2008. I am informed by one of our NSW lawyers, who has matters in the list for the sittings starting on Monday, that because of the length of the list the matter is unlikely to be reached during the June sittings. In any event, the other side have indicated that they will agree to the case being given a special fixture, given the length of the trial and number of witnesses. If I don't speak to you beforehand, I'll see you at your chambers in Sydney on 9 May at about 9.30am. I have advised the client that we would like to see him at about midday. I expect John will be coming along with his wife Kath. Regards, Gavin Mills, partner. [Logo of] Attwood Marshall Lawyers'." 11 On 21 April 2009, at the conclusion of the hearing of the present applications, the applicant asked for the stay to be lifted to allow the proceedings to continue in the District Court. The request was not opposed. The Court directed that the stay ordered by Beazley JA on 13 June 2008 be lifted. 12 In his summons seeking leave to appeal, the applicant first sought leave to appeal from the whole of the primary judge's decision and orders of 11 and 12 June 2008. In other words he sought, originally, to challenge both the order refusing the adjournment and the consequential costs orders. By the further amended summons seeking leave to appeal filed 21 April 2009 he sought leave to appeal only from the orders made:

(i) on 11 June 2008 that the applicant pay the respondent's costs of the day on an indemnity basis; and

(ii) on 12 June 2008 that the applicant pay the respondent's costs of 10 June and 12 June 2008 on an indemnity basis, and that the matter be fixed for hearing in Lismore on 16 June 2008. 13 The primary judge's decisions concerned matters of practice and procedure. Thus the application for leave to appeal attracts the proposition articulated by Jordan CJ in Re Will of Gilbert (1946) 46 SR(NSW) 318 (at 323) that if a tight rein were not kept upon allowing appeals in this Court on matters which involve an exercise of discretion on points of practice and procedure the result would be disastrous to the proper administration of justice. The proposition has been accepted by the High Court of Australia in Adam P Brown Male Fashions Pty Ltd v Philip Morris [1981] HCA 39; (1981) 148 CLR 170 (at 177) in which it was said that appellate courts should exercise particular caution in reviewing decisions pertaining to practice and procedure. 14 It is generally relevant and necessary to consider the question of injustice flowing from the order appealed from: Adam P Brown Male Fashions Pty Ltd (at177). In this case any injustice occasioned to the applicant by the refusal of the adjournment was effectively remedied by the stay ordered on 13 June 2008 and which operated for almost 10 months thereafter. As the filing of the further amended summons seeking leave to appeal acknowledged, once the stay was ordered there was no useful purpose served by reviewing the primary judge's order refusing the adjournment. 15 Accordingly, the only remaining issue is his Honour's costs orders. The applicant addressed detailed arguments to the factual findings the primary judge made in refusing the adjournment application. As is apparent from Beazley JA's judgment, the primary judge's findings were based, in part, on the primary judge's credit findings in relation to the applicant's solicitor. In order to mount an arguable case for leave to appeal it would be necessary for the applicant to demonstrate that his Honour's factual findings were affected by an error of the sort identified in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118. In my view, the applicant has not demonstrated on an arguable basis that his Honour's findings of fact were inconsistent with any incontrovertible fact, glaringly improbable or contrary to compelling inference. Accordingly, in my view, the applicant has not demonstrated that he has any arguable prospect of success if granted leave to appeal from the costs orders. 16 The applicant also sought leave to adduce further evidence of what he said was a file note of a telephone conversation he had with the respondent's solicitor in February 2008 - a note which was in existence at the time of the hearing before the primary judge, but which he had not located. He also sought to give general evidence of matters concerning his conduct of litigation which went directly to the findings of fact made by the primary judge. In my view, the applicant has not established any special ground upon which the Court would receive that further evidence: see s 75A(8), Supreme Court Act 1970. 17 In all the circumstances, in my opinion, the application for leave to appeal should be refused. That makes the respondent's motion that the application for leave was an abuse of process otiose and it, too, should be dismissed.

1. Application for leave to appeal refused with costs.

2. Motion to allow further evidence dismissed. 3 Applicant to pay the costs of the application before Beazley JA, for leave to appeal and the motion to allow further evidence. 4. Respondent's motion for dismissal of the application for leave to appeal dismissed. 5. No order as to costs in respect of the respondent's motion.

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.