Mears v Sydney Anglican Schools Corporation

Judgment 1Mr Grant and Mrs Gloria Mears sent their four daughters to Roseville College for their secondary education. Mr and Mrs Mears did not regard their daughters' educational experience as a satisfactory one. 2They declined to pay the amounts that were claimed by Roseville College as properly outstanding for school fees. 3The Sydney Anglican Schools Corporation, the proprietor of Roseville College, sued Mr and Mrs Mears in the Local Court of NSW for the outstanding fees, which amounted to $20,553.55, together with interest and costs. 4Those proceedings commenced in 2007, and were ultimately disposed of by a judgment of Favretto LCM on 31 May 2011. 5His Honour concluded his judgment in the following way: "On the preponderance of the evidence, the Court is satisfied: (1) That there were four contracts between the plaintiff and the defendants. (2) It was not an express term of the contracts that the educational and pastoral care services would be provided at a standard of excellence. (3) The Court is satisfied that the plaintiff provided educational and pastoral services at a reasonable standard of care and the defendants have not established repudiating acts by the plaintiff. (4) The Court is satisfied that the defendants repudiated the contracts with XX, YY and ZZ by not giving one full term's notice, and that the plaintiff is entitled to charge 50 per cent of the applicable term fees. (5) The Court enters a verdict for the plaintiff in the amount of $20,553.55." 6Mr and Mrs Mears lodged an appeal to this Court in 2011. 7Throughout their hearing in the Local Court, and in this Court, Mr and Mrs Mears have been unrepresented. It has proved difficult in this Court to have the proceedings listed in a manageable manner. That is because it appears that, in one way or another, there were 19 days in the Local Court during which the proceedings were dealt with procedurally or else by way of a full hearing. 8Mr Curtin SC has, in this Court, in the finest traditions of the bar, provided pro bono assistance to Mr and Mrs Mears. He proposed, and counsel for Roseville College accepted, that this appeal could be heard and determined in two phases. The first phase was to enable this Court to deal with such grounds of appeal and arguments as Mr Curtin SC was satisfied could properly be advanced, and then to give a decision limited to those grounds. Depending on the outcome of that decision, it may or may not be necessary for further grounds to be argued, and it may or may not be that Mr and Mrs Mears wish to proceed further with their appeal. 9Accordingly, this judgment deals with a limited number of grounds. Shortly put, Mr Curtin SC contends that the appellants were denied procedural fairness, and natural justice, in all of the circumstances of, and surrounding two orders which were made in the Local Court. The orders were that: (b)The dismissal of their cross-claim on 2 October 2008 by Heilpern LCM; and (c)The dismissal of their further application for the reinstatement of the cross-claim as well as an adjournment on 14 October 2008, by Favretto LCM.

Pleadings in the Local Court 10Roseville College pleaded two contracts in its Amended Statement of Claim. 11The first was a contract claimed to have been made on 23 June 1993, between the College and Mr and Mrs Mears with respect to the provision of education tuition services for one of their daughters. The College pleaded that a term of the contract was: "A full college term's notice in writing to the Principal is required if a student is to be withdrawn. If adequate notice is not given, then a charge equal to 50 per cent of the applicable term fees will become payable." 12The College pleaded a second contract claimed to have been made on 7 March 2001, between it and Mr and Mrs Mears whereby it agreed to provide education and tuition services for three other daughters of Mr and Mrs Mears. The same term with respect to notice in writing was pleaded as part of that contract. 13The College pleaded that there were two breaches of these contracts. The first was that Mr and Mrs Mears failed to pay their fees within 30 days of receipt of an account, which was claimed to be a breach of an express term of the contract, and that they had failed to provide the College with adequate written notice of the withdrawal of their children from being educated at Roseville College. 14Mr and Mrs Mears in their Amended Defence, which was filed on 19 June 2008, took issue with the pleading and either denied or did not admit each of the relevant paragraphs. In particular, the defence pleaded that: (a)the College did not discharge its contractual obligations to the defendants; (b)the College had made representations which caused Mr and Mrs Mears to enter into the contract, which representations were not met; (c)the conduct of the College constituted repeated breaches of contract which caused damage and, as a consequence, the College was not entitled to be paid by the defendants; and (d)the clauses relied upon by the College constituted a financial penalty, and were void. 15On 29 September 2008, Mr and Mrs Mears filed a cross-claim in the proceedings. 16That cross-claim is 18 pages long, and can be described as being verbose, rambling and unfocussed. Given that Mr and Mrs Mears drafted it themselves, without legal advice, this is unsurprising. 17The substance of the cross-claim can be found from paragraph 39 to paragraph 48, where Mr and Mrs Mears set out the legal bases of their claim. Their claim was for damages constituted by the sums of money which they had paid to Roseville College over the many years that their daughters had attended and as well for damages for a loss which they described as non-economic loss. 18The causes of action which Mr and Mrs Mears pleaded against Roseville College were: (1)breach of s 52 of the Trade Practices Act 1974 (Cth) by engaging in conduct which was misleading, or likely to mislead or deceive. Mr and Mrs Mears also relied on s 53(aa) of that Act; (2)breach of the statutory warranties implied in the contract by s 74 of the Trade Practices Act; (3)alternate claims to 1 and 2, but in reliance on the Fair Trading Act 1987, rather than the Trade Practices Act; (4)breach of contract constituted in multiple ways by misrepresentations, misleading or deceptive conduct, supplying of services without due care and skill, negligent supply of services, breaches of various statutory duties and negligent advice; (5)breach of a common law duty of care, the particulars of which mirrored the complaints about contract; (6)various breaches of statutes including the Children and Young Persons (Care and Protection) Act 1998; Corporations Act 2001; Education Act 2005 (Cth); Education Act 2000; and Schools Assistance (Learning Together - Achievement through Choice and Opportunity) Act 2004 (Cth).

Proceedings in the Local Court 19As I have said earlier, the proceedings were before the Local Court on many days and on many different occasions. The way in which this application has been argued means that only two of those days need to be examined, at least, initially. 20The first of those was on 2 October 2008, when, at an interlocutory hearing before the final hearing had commenced, the matter came before Heilpern LCM. This was the first occasion upon which the Court had convened after the cross-claim had been filed. Counsel for the College said this to the Magistrate: "Our position is, we've seen the cross-claim, and we still think there is no defence and the cross-claim should be struck out. There are issues with the cross-claim in that it reads as if it is an affidavit, but further to that, your Honour, he claims liquidated damages and unliquidated damages. At the very highest, the liquidated damages, it takes these proceedings out of this jurisdiction." He went on to submit that the cross-claim by Mr and Mrs Mears "should be commenced in another jurisdiction". 21Counsel for the College made it plain that he wished to proceed with the Motion to strike out the Defence and cross-claim because the matter was listed for hearing the following week, and if the Defence and cross-claim were not struck out, further preparations needed to be made. 22Heilpern LCM said: "His Honour: I can't hear the cross-claim. It's impossible for me to hear the cross-claim. Counsel: No, I understand that, but your Honour still has the jurisdiction to hear in respect of the defence being struck out, and if your Honour rules that the defence be struck out and judgment in favour of the plaintiff, then Mr Mears is not estopped from commencing those proceedings in the District Court or an appropriate jurisdiction ..." 23The following exchange then took place between the Magistrate and Mr Mears who was appearing for himself and his wife: "His Honour: Now Mr Mears do you have any comment on that? So what I think [counsel for the College] is proposing is this ... The Court makes a determination today as to whether your defence should be struck out or not. If the defence is struck out, that completes the matters in the local court and you, of course, could file your cross claim in the District Court. If on the other hand, the defence is not struck out, then there would be two options. One is to vacate the hearing date upon you making an application for the whole of the proceedings to be transferred to the District Court, or for simply the substantive matter, that is the claim and the defence, to be heard next week when it's onfor hearing. Do you understand ... what's happening? Mr Mears: To some - to some degree I do, but I certainly object to the way in which it's being described. I am in a situation where until the - in your absence the last hearing before the Magistrate, indicated that I was not in a position to run a defence for breach of contract without a cross-claim which is contrary to the advice that I had previously been given. The Magistrate then indicated that if I believed I had genuine grounds for defence, to ensure that I did lodge a cross-claim, which I've done. The advice that I sought, which has been extraordinarily significant and time consuming, has indicated that there are an extraordinary number of significant heads or causes of action and [I] was given advice to lodge an unliquidated defence and unspecified amount ... His Honour: Cross-claim you mean? Mr Mears: Cross-claim I'm sorry into the Court to make sure that the other party was on clear notice as to the extent and magnitude of the case. ... ... His Honour: At any rate, all that I'm trying to determine now is how we're going to proceed today." 24Without setting out here the continuing debate recorded in the transcript, it was quite plain that counsel for the College was seeking to proceed on the Motion to strike out the Defence and obtain summary judgment. Mr Mears, on behalf of himself and his wife, was seeking to proceed on all matters in dispute including his cross-claim. He opposed proceedings on the Motion to strike out the Defence. 25Mr Mears referred, in his submissions to Heilpern LCM, to events which had occurred on a previous occasion before Madgwick LCM. On that occasion it appeared that Madgwick LCM had ordered that Mr and Mrs Mears file a cross-claim. A transcript of what occurred in Madgwick LCM's court was not tendered in evidence before this Court. 26The matter stood in the list whilst Heilpern LCM attended to some other matters. After the Magistrate read the pleadings, counsel for the College said this: "In reference to some earlier case management, and a hearing before Madgwick LCM: - 'Her Honour formed the view that Mr Mears should go away, get his cross-claim done, and then come back. The cross-claim that has been purported to be filed or has been filed, in my respectful submission, is not a cross-claim which we mounted in this Court (sic) purely on the basis that ... it takes the quantum out of this jurisdiction.' Counsel went on further to say: "Now the cross-claim is some 20 pages long and it reads as an affidavit, not the proper form of pleading. This is also liable to be struck out. It's the plaintiff's contention that your Honour should deal with the distinct and discrete issue in respect to the defence alone, and if your Honour forms a view that the defence should be struck out for whatever reason pursuant to the principles in General Steel, then if the defence is struck out the plaintiff enters its verdict for its claim. Mr Mears is not estopped from pursuing his cross-claim in the appropriate jurisdiction, and that's been conveyed to him on many occasions." (Emphasis added) 27Counsel for the College then proceeded to deal with his Motion. He tendered evidence and made submissions. In the course of the submissions, he reminded Heilpern LCM that one of the bases which had been advanced in argument on a previous occasion by Mr Mears, on behalf of himself and Mrs Mears, was that the monies were not owed because he had a cross-claim. He went on to say: "Now in my respectful submission, the relevance of the cross-claim bears no great bearing here for your Honour to place any weight on in respect of the defence. The defence on its own has no merit, and if it was said to be merit, then it would be spurious to be saying that it's too far fetched a defence." Further, counsel submitted: "The Court should be invited, and I'm inviting the Court, to find that the defence is not arguable and that the plaintiff should succeed on its claim. Mr Mears is permitted to commence his action on the cross-claim in another jurisdiction." 28Counsel later returned to a similar theme. He said: "And we have come back and it is the position where the defence, your Honour, does not disclose an arguable cause of action. The cross-claim may, if someone took it at its highest, and was repleaded by a solicitor or a lawyer. At the moment it reads as an affidavit making certain assertions and allegations. If that be the case, I mean, I don't pass an opinion on the merits of the cross claim, I don't act for the defendant, but [what] I would say is the crossclaim on its own may be mounted somewhere else, but not in this court, and most certainly not in a situation where the plaintiff states that there is no arguable defence. And where a judgment could be entered for the plaintiff and the defendant is not estopped from commencing these proceedings elsewhere, whether it be in the District Court of perhaps in a Federal Court ..." (Emphasis added) 29Mr Mears was asked to put submissions to the Court. Heilpern LCM made it plain that what he was concerned with at the moment, is "... whether your defence ought be struck out or not. That's the issue". 30Mr Mears indicated he remained confused. He pointed out that he had initially been advised that he simply needed to lodge a Defence, and that he did not need to file a cross-claim, and that was his understanding. He went on: "For various reasons, I am still conflicted as to whether that is factual or not. Magistrate Madgwick on the last occasion indicated that in her court a claim or a defence to the defective supply of work or non-delivery of services would require a crossclaim. ... so under those circumstances with Magistrate Madgwick's instructions, I then proceeded to lodge the crossclaim." 31After further discussion, Mr Mears made it plain to Heilpern LCM that it was his contention that Roseville College had not provided the environment for learning that he believed he was entitled to, and his children were entitled to, in accordance with the contract. 32After hearing counsel for the College in reply, Heilpern LCM delivered an ex tempore judgment on the Motion. His Honour held that he was satisfied that there was an arguable defence, and that he was not prepared to strike it out and grant summary judgment. 33At the conclusion of the ex tempore judgment, there was then discussion about the further management of the matter in the course of which the following exchange occurred between counsel for the College and the Magistrate: "Counsel: If the proceedings are to proceed on 14 October, is that only in respect of the plaintiff's statement of claim and defence, or is the cross-claim then to be heard and to be transferred to another Court? His Honour: Well, as I understand it, the cross claim cannot stand as it is because it exceeds the jurisdiction. There's two things that could be done in relation to that, and I'll ask Mr Mears to give me an indication now. Mr Mears, one option is that you - the cross claim can't stand because it's above the jurisdiction. You can abandon that part of the cross-claim that is above the jurisdiction, or I would give you sufficient time to lodge that cross-claim in the District Court and - the entirety of the proceedings would be transferred to the District Court as I understand." 34Counsel for the College objected to the suggestion that the whole of the proceedings should be transferred to the District Court, and insisted that the College's Statement of Claim should be maintained in the Local Court. 35The following exchange then occurred: "Counsel: Well, the problem with your Honour's comment in respect of Mr Mears foregoing part of his claim in the cross-claim so that it stays in this jurisdiction, is that the claims themselves, on each of the individual daughters that he claims a liquidated amount exceed - when summed up together, exceed the jurisdictional limit. His Honour: I see ... Counsel: In that regard, what I would be submitting to your Honour with great respect, is that - if the hearing date is to be confirmed, it will be confirmed only in relation to the plaintiffs' amended statement of claim, and the defendant's defence. Mr Mears should then be invited to commence his proceedings in the District Court. His Honour: OK ... ... His Honour: OK ... just give me a moment. Mr Mears, what I am proposing to do is maintain the hearing date only on the issue of the claim and the defence, then I am going to invite you - given that the cross-claim exceeds the jurisdiction of the Court - I'm going to indicate to you that it cannot stand in this Court and that you must institute - yes - that you must institute proceedings in respect of the matter in a different court because it is beyond my jurisdiction to hear it." (Emphasis added) 36The Magistrate indicated that he proposed to set the matter down for hearing on the issues raised in the Statement of Claim and Defence and then asked Mr Mears if he had any comment on that course. Mr Mears said: "Mr Mears: Yes, there are. I am concerned and alarmed about the basis on estoppel which I don't fully understand, and my ability to be able to prosecute my case, if I'm needing to take it to a higher court. I'm alarmed that any evidence, and all these matters are totally linked in relation to the claim for monies or penalties for unpaid fees which we believe are related to lack of supply of the services or defective services. My concern is, I'm having enormous difficulty differentiating between where the amended Statement of Claim, the amended Defence and then the cross-claim - where they start and finish given that all the events are totally intertwined. His Honour: Well they're intertwined in one sense, but in another sense they're not. The sense in which they're not is they say you owe them school fees. Mr Mears: Yes. His Honour: You say 'No, I don't, because you did something wrong'. Mr Mears: Yes. His Honour: Now, it may be that it's the same thing you did wrong that gives rise to your damages. Mr Mears: Yes. His Honour: But just because the fees issue is determined in the local court does not mean that your damages - you know, let's imagine that one of your children, I'm not suggesting this is the case, I haven't read the statement of claim with sufficient - the cross claim, with sufficient detail, but imagine if one of your children were seriously damage for the rest of her lift as a result of something that happened at the school, you know a baseball hitting her head. There would be nothing stopping you suing the school for damages whether - whatever the outcome of whatever happened, in respect of a breach of contract claim in the local court. " (Emphasis added) Counsel for the College indicated his agreement with what the Magistrate had said. 37There was then an extensive discussion about what issues could or could not be dealt with on the next occasion. That unfocussed discussion between the Bench, counsel for the College and occasionally Mr Mears, ended with this exchange: "Counsel: Your Honour, just to finalise your Honour's comments, would your Honour be minded to indicate to Mr Mears what he needs to do in respect of his cross-claim now that the orders are as your Honour stated on the Bench papers, so I don't want it to be said on the next occasion that certain things can or cannot be brought and I think it should be made quite clear to Mr Mears that he is now permitted to lodge his cross-claim in the District Court, the Supreme Court, the Federal Court ... His Honour: Well, if I understand it, Mr Mears has a choice. If he doesn't, if it's beyond the jurisdiction of the Court - and I have in effect separated the proceedings, he has this choice. If he does nothing, the cross-claim will have to be dismissed because it is beyond the jurisdiction of the Court. Counsel: That's exactly right your Honour. His Honour: If he does something, i.e. goes to some other court, it may be the Federal Court, it may be the District Court, or it may be the Supreme Court, I can't think of any others that you can go to - but if you go to those courts and lodge your cross-claim, then that has the effect of removing it from this jurisdiction and it is not dismissed. But if nothing is done in relation to the cross-claim, it is beyond the jurisdiction and would have to be dismissed for what's called 'want of jurisdiction'. Counsel: May it please the Court. Thank you your Honour." 38Mr Mears confirmed that what his Honour was saying was that he was being left free to proceed in any jurisdiction available to him.

Was any Order made about the Cross-Claim? 39There is no formal order said to have been made on 2 October 2008 with respect to the cross-claim which has been put before this Court. There is some lack of clarity about whether Heilpern LCM actually made an order on 2 October 2008, or else the cross-claim was dismissed at some time before 14 October 2008, or at all. The reasonably contemporaneous note of counsel for the College records that the order of Heilpern LCM was: "The Defendants may file their Cross-Claim in the appropriate jurisdiction. If they fail to do so, their Cross-Claim shall be dismissed." 40This note accurately conveys the sense of what had been said and what had occurred before Heilpern LCM, but it does not record any formal order of the Court. 41However, according to the transcript of the proceedings which occurred on 14 October 2008, Favretto LCM, having apparently consulted the "bench papers" (or Local Court file), said on more than one occasion that what was there written was "cross-claim is beyond jurisdiction". There was no suggestion from Favretto LCM that the file recorded any formal order which actually dismissed the cross-claim, whether on 2 October 2008 or at any other time before 14 October 2008. 42It is necessary to proceed in this judgment on the basis that, although there has not been any formal order dismissing the cross-claim, the Court proceeded on 14 October 2008, on the basis that the cross-claim had been dismissed. 43It is appropriate to note at this point that it is a necessity that formal orders are made and recorded so as to give effect to any determination of an issue made either on an interlocutory basis, or else after a final hearing. It is the obligation of counsel and the parties to ensure that the determinations of a Court are contained in a formal order which accurately records the determination. 44These proceedings are a good example of the confusion which can arise if this basic step is not attended to. It is unclear if Heilpern LCM dismissed the cross-claim or indicated that it would be dismissed at some point in the future. The notation that the cross-claim exceeded the jurisdiction was undoubtedly a correct statement (or perhaps a finding) of fact, but it is not an order. 45In this Court, neither party made submissions which sought to exploit the absence of any formal order. This Court has jurisdiction because the appeal is lodged against the final orders which were made by Favretto LCM in 2011. In those circumstances, the interests of justice are manifestly in favour of a decision being made by this Court on the issues posed for judgment. It will be a matter for the parties to formulate with precision the appropriate orders after the judgment is delivered.

14 October 2008 46The matter came on for hearing before Favretto LCM on 14 October 2008. It was fixed for a final hearing which, as a consequence of the orders of Heilpern LCM, was to consist of a hearing on the Amended Statement of Claim and the Amended defence. 47After some initial discussion and an adjournment to enable the parties to see if they could resolve the matter, the hearing of the proceedings resumed. 48Counsel for the College opened. He said: "Counsel: ... the claim in respect of a contract for provision of services - that is the services of educational services to these young women. The plaintiff's claim is mounted on the basis that there are various documentations to substantiate a contract for educational services. ... His Honour: Sorry to interrupt, a thought has occurred to me. I am conscious that the Mears are not legally represented. He may mount an action in some other jurisdiction subsequently. If you were to be successful bearing in mind the nature of his challenge, would you, in any other action subsequently by Mr Mears, be contending that in a sense there has been a res judicata? Counsel: Well, I will have to get instructions on that, because I can't meet that ... His Honour: I'm just indicating, Mr Mears - sorry, just something I should have said to you - you've spoken about your cross-claim and this court has ruled that this court doesn't have jurisdiction. You can't run it in this court. ... I'm just raising this to let you know it may well be that if you were intending to maintain those proceedings in another jurisdiction, but if you were to be unsuccessful here - well, when I say unsuccessful - the plaintiff were to be successful here bearing in mind the nature of your challenge here. You're saying that the services provider was so deficient there was a total failure of consideration. It may well be that the successful plaintiff here in any subsequent proceedings you may mount, can argue an issue of - I will generally call it abuse of process. That is, a court has already litigated the issues between the parties and has found for the other party and the courts have for centuries maintained a strong principle that once courts decide a matter, the courts will not allow that same matter to be relitigated before that same court or a different court. That is litigation must come to an end. So I'm just indicating to you that if you are unsuccessful here, or even if you were successful here, it may well mean that in any action, you may want to bring in another court, could be met by an objection by the plaintiff in these proceedings who says 'It's already been decided. It's all over. You can't do it'. Mr Mears: That's contrary to what Magistrate Heilpern and my learned friend here agreed to - have the cross-claim moved forward. His Honour: Well, I don't have that before me. My note here is from Magistrate Heilpern who says that your cross-claim is beyond jurisdiction of this court and ... Mr Mears: His words, your Honour, that he has totally separated the issues because I raised exactly the point that your raising here now with some concerns. His Honour: Well, he may have said that. ... All I am just indicating to you, there are certain principles under a broad spectrum known as abuse of process, known as res judicata, which means that it has been decided. There are variances of that principle that the courts adhere to, that if the subject matter of litigation is decided in one set of proceedings, the courts and the successful party in that court, can claim that in any other suit that the other party may seek to maintain later. I'm just indicating to you that if you were to lose here today, you could lose completely. Mr Mears: Well, we've been railroaded here your Honour, because this is - I'm sorry. His Honour: I'm just indicating, just letting you know that if that in any way influences any compromise. I don't know whether a compromise relates to any other action. I'm just indicating that you should be aware of that. Mr Mears: And I appreciate that your Honour. His Honour: I don't know what the Court decided on the last occasion, but the ruling in the past court - and I'm not going - it says beyond jurisdiction. All that means is that the Court has got no power to hear and that's not unusual for courts to make those rulings. The amount claimed is over $60,000 for instance, this court can't hear it because the civil claims legislation can't hear more than $60,000, so you have to go to a different court. There's all sorts of - there's actions under the Trade Practices Act, some of which the Court can and can't hear. I'm just indicating to you that the earlier magistrate's decision, that your cross-claim is beyond jurisdiction only decides that. It doesn't mean to say if the plaintiff is successful here, he can't then say 'we've argued this already'. I'm just letting you know that so you should be aware of that possibility." (Emphasis added) 49There was then further discussion between the Magistrate and Mr Mears. In substance, Mr Mears was protesting in moderate terms that what he was being told by Favretto LCM, was different from that which had been discussed before Heilpern LCM. Favretto LCM was being careful to point out to Mr Mears that there was a real risk of either a res judicata or an issue estoppel if Mr Mears wished to conduct his cross-claim at a time after judgment had been entered on the principal claim. 50Favretto LCM was careful to ensure that he did not allow the technical legal terms to obscure the substance of the matter he was raising with Mr Mears. He informed him that another Court may decline to hear the cross-claim on the basis that it was a re-litigation of the earlier proceedings. 51At one point in the course of that exchange, the following occurred: "Mr Mears: Well, I'm feeling ambushed, your Honour, in that there was ... His Honour: Well, I'm not trying to ambush you Mr Mears. Mr Mears: Well, not you your Honour, but there was a meeting of minds in the previous court. If we were aware that there was any possibility ... ... Mr Mears: Well, [counsel's] comments a few moments ago contradict the position that he took in front of the previous Magistrate." 52After some further discussion, Mr Mears indicated that he needed an adjournment. The following exchange occurred: "His Honour: Having said that, are we proceeding? Mr Mears: I would need to seek an adjournment your Honour. We've been ambushed and ... His Honour: Well, now, we're here for a hearing. I'm only giving you the ... if there is any prospect of compromise otherwise, the matter has been fixed for hearing and it's going to go to a hearing. Mr Mears: Despite the unrepresented defendants here being provided with information that's now totally contradictory to the - His Honour: The law is the law. I've only indicated to you because you're unrepresented, that there is that possibility. It is a matter for you, but this matter has been fixed for hearing and it's going to proceed. Mr Mears: Our cross-claim has been denied. ... Mr Mears: My learned friend here is very quiet. I'd like you to ask him in terms of what the basis of proceeding forwarded on that last occasion were. ... His Honour: I'm not going to ask [counsel] either. ... This matter is fixed for hearing. It's obviously quite a long [matter]. I'll give you 10 minutes to discuss the situation with your wife. I will not allow an adjournment. I only raise that whether there is some prospect of a compromise only on that issue so you are aware if this matter proceeds, and I make a decision that is against you, it could prejudice any other action you've got, and I use the word 'could'. I could be wrong about that. ... His Honour: ... So it just occurred to me that you should be aware because you're unrepresented. You might think, well, even if I'm unsuccessful here, I can still have my action over there. Mr Mears: Well, that's the reason Magistrate Heilpern indicated that he had totally separated the issues. ... His Honour: But [counsel] might say, 'We've already been to another court. We've already decided basically the same things; the provision of educational services, the quality of it', because your case is that it was so deficient. Another court might say 'Well, wait a second. Another court's already made this decision. I'm not going to go behind that. It's a matter of public policy'. Mr Mears: Well, your Honour, I'm feeling on behalf of my wife and I, we're feeling as if we've been painted into a corner. Our position has been entirely prejudiced here as a result of the proceedings at the previous hearing." 53Again, Mr Mears protested that he was feeling ambushed. 54In the course of the submissions which followed, Mr Mears politely enquired of Favretto LCM what avenues of appeal there would be: "... if the decision here today goes against me to be able to have this matter heard." Favretto LCM rightly told Mr Mears that it was not his role to provide legal advice, but indicated that if he made an error of law, there was a right of appeal. 55Favretto LCM then turned to counsel for the College and asked whether he was correct, that there was only an appeal on a question of law. Counsel agreed with him. 56The Magistrate then said this to Mr Mears: "His Honour: It's only on a question of law, and there doesn't seem to me that there's any question of law for me to decide in this matter. I look at the contract, I hear the evidence, I make a decision on the facts. No more. No less." 57The Magistrate was correctly identifying that the provisions of s 39 of the Local Courts Act 2007 restricted appeals as of right to matters involving only a question of law. However, neither counsel for the College, nor Favretto LCM, seem to have considered the provisions of s 40 of that Act, which permit appeals involving a question of mixed law and fact to be made to the Supreme Court by leave of that Court. 58A short adjournment ensued. Upon resumption, Mr Mears sought to abandon the monetary claims which were in excess of the Local Court's jurisdiction. The following exchange occurred: "His Honour: Are we ready to proceed? Mr Mears: Yes, your Honour, I've sought some legal advice whilst your intermission was on there. It's been indicated to me that I should request that my cross-claim be reinstated and reduced down to the jurisdictional limit that is able to be handled by this particular court, in the interests of justice, on the basis that all the matters be heard together, and if there are certain areas outside the jurisdiction, that they can be excluded from the cross-claim." The Magistrate sought a response from counsel for the College. Counsel said: "[Counsel]: I oppose, I object. The matter has been determined already by Magistrate Heilpern in respect of that quantum, and I'm here to answer a case where the plaintiff has commenced the proceedings. ... - but I'm here to answer pursuant to the evidence that's been provided by Mr Mears and the current cross-claim has been drafted by Mr Mears, claims in an amount of $109,183 plus compensatory damages. The evidence as it is at the moment, I cannot meet any of that, and its not for this - the determination has been made in respect of the cross-claim. If Mr Mears wishes to go behind the decision of a magistrate, then there are provisions in respect of appeals and that's the position Mr Mears should [take]." 59Counsel went on to protest that he was not in a position to meet any cross-claim. He submitted that the Court had no jurisdiction to deal with the cross-claim because of the decision of Heilpern LCM, and in the absence of any appeal against that decision. He then submitted that as a matter of form, the Cross-claim ought be struck out because it disclosed no reasonable cause of action, was not appropriately particularised, and did not comply with the Uniform Civil Procedure Rules. He concluded by submitting that it was an abuse of process. 60Favretto LCM then said this: "... You were aware back on 2 October that your claim and even before that you should have been aware that your claim was beyond the court's jurisdictional limit. You should at - on 2 October and certainly before then if you were going to maintain your cross claim reduce that claim to the jurisdictional limit. ... Today you said to me that you felt ambushed and misled by what the Magistrate had decided on the last occasion. I, not then knowing when you were saying that the basis of the Magistrate's orders that you were seeking an amount above the Court's jurisdictional limit and now I can certainly understand the Magistrate's reasoning. This matter has been fixed for hearing. It's been around long enough. It's going to proceed. I deny you the right to file, and I don't have one before me at the moment, and even if you were, I decline to accept the cross-claim: a number of reasons. You have had ample opportunity to do so. The Uniform Civil Procedure Act (sic) clearly requires that the civil proceedings are despatched expeditiously. There is a strong obligation by the Courts to enforce that even if you are unrepresented. This matter has been around for quite a considerable period of time. You've spoken about mounting - you could have gone off and sought proceedings in another court, you've taken certain issues with this Court. You haven't done so. Today, only because this Court indicated there may be an issue of an abuse of process in any other proceedings, that you now seek to reduce your cross-claim to the limit, and obviously [counsel] is not in a position to meet that. He's only come here on the basis of the Court's orders of 2 October. This Court will not entertain any further delay and I deny you your application to reinstitute the cross-claim." 61Further exchanges continued between Favretto LCM and Mr Mears, and the following then occurred: "His Honour: ... The matter has got to move on Mr Mears. It's been around for long enough. The Court made a decision back on 2 October I think it was ... you didn't mount any appeal against that decision of the Court. Mr Mears: We believed there was no requirement to do so Sir, in the fact that we were of the Court's opinion that we would be able to mount that action. His Honour: No, that's not what the Court ruled. It ruled the matter was beyond its jurisdiction. Mr Mears: And were advised prior to that ruling that we would be free to proceed with this matter in another Court and had no timeframe limitations prior to this hearing in making those fundamental decisions not to take any action with that between earlier this month and the14th. So we were not of the belief that time was of the essence in relation to that. His Honour: Time is of the essence. The Uniform Civil Procedure Act (sic) makes it clear. Particularly if matters are fixed for hearing. It came on 2 October. After that Court's decision, you could have made a number of steps. You could have immediately sought to file a fresh cross-claim that sought a liquidated amount to the jurisdiction limits. That hasn't been done. You decided to do that today only because this Court out of its conscious (sic), because you're unrepresented, indicated to you, you can go to another court. You might find that there be an issue of an abuse of process that could be mounted against your action. That was not legal advice. It's just the Court informing you. I could be wrong about that." 62Mr Mears protested that his wife and he had been prejudiced. The Magistrate said that he could not see any prejudice, and if there was any, it was only of Mr Mears' own choosing. 63It became plain that after all of this discussion, there was to be no adjournment, and counsel for the College commenced the proceedings by giving a short opening and calling his first witness. 64The matter then proceeded to be heard on various dates between 14 October 2008 and 31 May 2011 when Favretto LCM delivered judgment. In the course of the further hearing on 16 June 2010, Mr and Mrs Mears sought to file a Further Amended Defence and a Further Statement of Cross Claim. Those applications were refused.

Judgment of Favretto LCM 65Favretto LCM noted that the plaintiffs' claim was one pleaded on the basis of a contract and a breach by the defendant of the contract and the terms therein. He noted that Mr and Mrs Mears pleaded that the College had repudiated the contracts by failing to discharge its contractual obligation owed to Mr and Mrs Mears, and were not entitled to payment for the supply of defective services. He drew attention to a submission of the College that read: "in the absence of any pleadings seeking relief from misrepresentation, negligence, personal injury or relief under the Trade Practices Act or Fair Trading Act, that this matter is an action in debt only. If there are other causes of action, they have not been pleaded in this matter." 66Whilst this submission was strictly accurate, the context that stood behind that submission needed examination. 67Favretto LCM came to his decision. In it he said: "A distinction has to be drawn by promises made which when accepted form a term of the contract and representations which do not form part of a contract but may provide for relief by way of a suit of misrepresentation or other forms of relief such as those under the Trade Practices Act 1974 and Fair Trading Act 1987. However, as the defendants have not pleaded or cross-claimed misrepresentation (paragraph 6 of the Amended Defence does not plead misrepresentation, only that there were representations) or other forms of relief the court will limit its decision on the basis of the plaintiff's claim in debt and whether it has repudiated the contracts, which the defendants legitimately elected to accept. As the defendants have not pleaded misrepresentation the court does not propose to consider that issue." 68The judgment went on to discuss the principal submissions made by Mr and Mrs Mears, and then concluded with the paragraph, which I have set out above at [ REF _Ref355873748 \r \h 5]. In the course of the judgment, various findings of fact were made about what happened at the College, and how each of the children of Mr and Mrs Mears were treated and educated.

Submissions of Mr and Mrs Mears 69On behalf of Mr and Mrs Mears, Mr Curtin SC submits that the procedural unfairness, or denial of natural justice, arose from a combination of events that occurred during the proceedings on 2 October 2008, with events which occurred on the first day of the hearing, 12 days later, on 14 October 2008. 70In short, Mr Curtin SC submits, that on 2 October 2008, the College put to the Local Court, and Mr and Mrs Mears were told by Heilpern LCM, perhaps relying upon the College's submission, in unqualified terms, that they could prosecute their cross-claim in another Court at a subsequent time, regardless of any judgment given in relation to the Amended Statement of Claim. He submits that what was said to Mr and Mrs Mears on 2 October was legally incorrect because it had been delivered in an unqualified form, and was thus, at the least, misleading. 71Mr Curtin SC submits, that on the first day of the final hearing, a little under two weeks later, Favretto LCM observed, that the subsequent prosecution of the substance of the cross-claim in another court might be prevented by reason of the principles regarding abuse of process: Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589. 72Mr Curtin SC goes on to submit that Mr and Mrs Mears, on 14 October 2008, sought an adjournment and an order which permitted the "reinstatement" of their cross-claim in circumstances where they were prepared to abandon any damages in excess of the jurisdiction. These applications, so it is submitted, were wrongly refused in circumstances where: (a)Favretto LCM was unaware of what had been submitted by Counsel for the College, and what had been said by Heilpern LCM on 2 October 2008; (b)the College did not provide its counsel with instructions to the effect that no Anshun defence would be raised in any subsequent proceedings. 73It is submitted that, having regard to the coincidence of factual issues between the principal claim brought by Roseville College, and the issues which Mr and Mrs Mears wished to agitate on the cross-claim, it was inevitable that questions of res judicata or issue estoppel would arise. 74In the course of oral submissions, Mr Curtin SC pointed to the fact counsel for the College, when making submissions to Favretto LCM, accepted that these issues were not easy of demarcation when he said: "... so I understand what your Honour is saying in terms of the substance of the material in respect of the submission now by Mr Mears about the defective services, but it's a quite fine line, with respect your Honour, in respect of whether or not there is a liability to pay in respect of a breach of contract, and the evidence that's been mounted by Mr Mears in respect in support of his claims in the cross-claim itself." 75Ultimately, Mr Curtin SC submits that notwithstanding the number of days occupied in the hearings after 14 October 2008, the causes of action which Mr and Mrs Mears had under the Trade Practices Act have not been heard and determined. 76The claims under the Trade Practices Act were of particular importance to Mr and Mrs Mears because of the evidential presumptions in the Act which meant that representations as to future matters are deemed to be misleading unless the College satisfied the Court that there were reasonable grounds for making the representations.

Submissions of Roseville College 77Ms Needham SC, senior counsel for Roseville College, who did not appear in the Local Court, submitted that Mr and Mrs Mears, in bringing this claim for a lack of procedural fairness wrongly focussed on a very short passage of the transcript before the trial began. She submitted that Mr and Mrs Mears have not had regard to the substantial procedural fairness afforded to them over the entire period of the substantive hearing. Rather, counsel submits that Mr and Mrs Mears have, in pleading this claim taken out of the context of the entirety of the proceedings, the single passage which they have sought, she submitted wrongly to elevate it into a fundamental denial of rights. Senior Counsel submitted that the submission of Mr and Mrs Mears was not maintainable. 78She submitted that: (a)Mr and Mrs Mears were told in clear terms by Heilpern LCM how they could agitate their cross-claim; (b)they chose not to do so; (c)they were offered an adjournment (on terms) in order for them to seek to file their cross-claim in another appropriate court so as to enable it to be heard together with the Statement of Claim; and (d)they did not choose to avail themselves of that opportunity. 79Accordingly, she submits, within those circumstances and after a full hearing on all issues sought to be raised by them, it was not open to them to submit that they were denied procedural fairness. 80Senior Counsel for the College challenges the proposition that Mr and Mrs Mears were told "in unqualified terms" that they could prosecute their cross-claim in another court at a subsequent time whatever the judgment was in relation to the Amended Statement of Claim. 81She submits that the matter proceeded on the basis that Mr and Mrs Mears were free to file their cross-claim in another Court, which would have the effect of having the Local Court proceedings transferred with that cross-claim to another Court, but that they had not done so. 82She further submitted that the decision by Favretto LCM on 14 October 2008, to dismiss the application for an adjournment, and the application to reinstate the cross-claim, effectively limiting any damages in excess of the jurisdiction of the Local Court, was justified by reason of the provisions of the overriding purpose set out in s 56 of the Civil Procedure Act 2005, and the principles to be found in the decision of the High Court of Australia in AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. 83Ultimately, Senior Counsel submitted that, in all of the circumstances, Mr and Mrs Mears were not deprived of procedural fairness and natural justice. 84She submitted, as an alternative, that if the Court were to take the view that there was some error in what had occurred with respect to the events of 2 and 14 October 2008, then this Court, in exercising any discretion as to what should happen with the proceedings, and in particular whether to remit the proceedings to the Local Court for a re-hearing, should take the following matters into account: (a)that as the subject of the proceedings was a little over $20,000; (b)the proceedings were heard over nine days; (c)the appellant's cross-examined two witnesses on the factual issues arising out of the cross-claim for six days of that time; (d)Favretto LCM found against Mr and Mrs Mears not only on the law but also on the facts; (e)Roseville College was represented for all of the 33 appearances before the Court and, it may be inferred, has incurred substantial legal fees in enforcing its right to the monies found to be payable on its claim; and (f)the proceedings had commenced in 2008 and have been continuing throughout that time. 85She summarised her submission by saying that the interests of justice, as well as those of the litigants, require some degree of proportionality to be applied to the proceedings. She went on to submit: "It would not be appropriate to apply an artificially high standard of appreciation of the niceties of Anshun principles, resulting in these proceedings be relitigated to what must be, on the basis of the wide ranging hearing already undertaken, a foregoing conclusion." 86In supplementary submissions which were made in writing with the leave of the Court after the conclusion of the oral submissions, Senior Counsel added that if a breach of procedural fairness was found, relief should be withheld due to a "positive conclusion available to the Court that the breach could have made no difference to the result". Attention was drawn to the decisions of the High Court of Australia in Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 and Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82.

Discernment 87There are thus identified, two principal questions to be decided with respect to the current aspect of this appeal. 88The first is whether Mr and Mrs Mears were denied procedural fairness by reason of the two decisions to which earlier attention has been drawn, namely, the decision to, in effect, dismiss their cross-claim made by Heilpern LCM, and the decision to refuse them an adjournment and leave to file a further cross-claim by Favretto LCM. Both parties accepted that each of these decisions needed to be seen in the context of the exchanges which took place in the courtroom on each of the two days. 89The second question, is whether if Mr and Mrs Mears have established that there was a breach of procedural fairness, this Court ought conclude that no different result would have ensued, and in the exercise of its discretion not to make an order for a complete re-hearing in the Local Court.

Was there a Breach of Procedural Fairness? 90It was agreed between the parties at the relevant time, the monetary limit of the jurisdiction of the Local Court was $60,000. 91Section 30 of the Local Court Act conferred jurisdiction on the Court sitting in its general jurisdiction: "To hear and determine: (a) proceedings on any money claim, so long as the amount claimed, whether on a balance of account or after an admitted set off or otherwise, does not exceed the jurisdictional limit of the Court when sitting in that division". (Emphasis added) 92The proceedings on the Cross-claim amounted to a money claim because the proceedings constituted a claim for damages (whether liquidated or unliquidated): see s 29A Local Court Act. 93Although the provisions of s 30 of the Local Court Act could, if narrowly construed, be read as applying only to a plaintiff and not to a cross-claimant, the position is put beyond doubt by the provisions of the Civil Procedure Act 2005, which applies to the Local Court when the Local Court is hearing civil claims of the kind here in dispute. 94It is apparent from the provisions of s 3 of the Civil Procedure Act that in interpreting the provisions of the Local Court Act, a plaintiff and a cross-claimant are in identical positions. Accordingly, and the parties accepted that this was the correct approach, s 30(1)(a) of the Local Court Act, has the effect that unless there is an admitted set-off, or an abandonment of a claim above the jurisdictional limit, the Local Court has no jurisdiction to hear and determine a cross-claim where the jurisdictional limit is exceeded. This approach is correct because the words "...or otherwise" are apt to include the abandonment of a monetary sum which means that the claim is in excess of jurisdiction. Neither party submitted that there is a specific Form provided by the UCPR by which a party can announce its abandonment. The UCPR do not apparently provide for any specific mechanism for that abandonment. Accordingly, it seems that it would be open for a party to inform a Court at any time before the final hearing of a matter commences 95I note, parenthetically, although this does not seem to have been addressed by either of the parties, since there was no formal objection to the jurisdiction of the Local Court being exceeded by an amount of 20 per cent more than the jurisdictional limit, by any of the parties prior to one month before the commencement of the hearing of the proceedings, then a discretionary 20 per cent extension to the jurisdictional limit existed: see s 31(1) Local Court Act. 96However, as it seems from the detail of the sum of money actually claimed in the Cross-claim and the sum of money actually claimed by Roseville College, even if these amounts were set off, and such a set off was admitted, this discretionary extension of the monetary limit would still have been exceeded by the cross-claim. In those circumstances, it is best if this issue is put to one side. 97However, if Mr and Mrs Mears had reduced the sum claimed on the cross claim to the appropriate monetary limit by abandoning the excess over $60,000, then the Local Court had jurisdiction to hear and determine their Cross-claim. 98In Ex parte Aala, the High Court of Australia was called upon to consider whether an incorrect statement made by a Tribunal member to an applicant about materials which were before the Tribunal, constituted a denial of procedural fairness. All of the justices concluded that there had been a denial of procedural fairness. A number of different reasons were expressed for their conclusion. 99Gleeson CJ described the denial of procedural fairness in this way: "3. ...The statement in question covered a matter which had a bearing upon the credibility of the prosecutor. It misled the prosecutor, as a consequence of which he was deprived of the opportunity to answer, by evidence and argument, adverse inferences which were based in part upon a misunderstanding of his previous conduct." 100Gaudron and Gummow JJ concluded at [80] that there had been a denial of procedural fairness, concluding that it was sufficient that "the denial of natural justice deprived [the prosecutor] of the possibility of a successful outcome". 101Callinan J said at [206]: "206. This is not a case in which a Tribunal has merely misapprehended a fact and therefore has only made an error of fact within jurisdiction. At the inception of the hearing the second Tribunal mistakenly, but nonetheless prejudicially to the prosecutor, caused him to believe that a state of affairs relating to the manner in which he might choose to conduct his case existed when in fact that state of affairs did not exist. ... 208. Whilst the Tribunal might not have any obligation enforceable at law to give an application an express warning of the possibility or likelihood of adverse against him or her, it is an altogether different matter for a Tribunal to misrepresent, however innocently, an important state of affairs bearing upon the way in which a person in a prosecutor's position might proceed to present his or her case." 102Callinan J, as did all other Judges of the High Court, concluded that there had been a denial of procedural fairness. 103I am satisfied that in the factual circumstances which occurred here, there has been a denial of procedural fairness. I accept that a presiding judicial officer is not under any obligation, and should not, ordinarily give legal advice to a litigant appearing in person. During the course of a hearing, whether of a civil matter, or a criminal matter, the principal obligation of a presiding judicial officer is to ensure that the hearing is conducted fairly, and in accordance with the law: see MacPherson v The Queen [1981] HCA 46; (1981) 147 CLR 512 at 523 per Gibbs CJ and Wilson J. As Mason J said in MacPherson at 534, albeit in the context of a criminal trial: A trial in which a judge allows an accused to remain in ignorance of a fundamental procedure which, if invoked, may prove to be advantageous to him, can hardly be labelled "fair". 104The obligation of the presiding judicial officer is, where necessary and appropriate, to ensure that the litigant in person sufficiently understands the procedure of the Court and their obligations as a litigant in the presentation of their case to enable them to properly and fairly present their case. Particularly in cases of dismissal of claims without a hearing, courts need to take special care to ensure that "... there is no viable cause of action which, with appropriate amendment of the pleading and a little assistance from the court, could be put into proper form": Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536 per Kirby P. 105In this case, the conclusion is irresistible that Mr and Mrs Mears, on 2 October 2008, were by reason of a combination of the way in which submissions were put by counsel for the College, and what was said by the Heilpern LCM, left with the clear impression that they were at liberty to bring their claims against the College, which they had articulated in their Cross-claim, in another court of competent jurisdiction without any restriction, provided that the claims were properly pleaded. 106Mr Mears raised the question that whether such approach could succeed in these proceedings because the factual issues were closely linked or intertwined. The position was confirmed in the final exchange between Heilpern LCM and Mr Mears, where Mr Mears said: "Mr Mears: But the way you have separated these matters - so does that leave me free to proceed in any jurisdiction that you believe is available to me? His Honour: It certainly does." 107In association with that statement, the Local Court did not make any order, nor did it give any indication to Mr and Mrs Mears that, if they were to bring their cross-claim as fresh proceedings in a court of competent jurisdiction, then they should do so prior to 14 October 2008, which was the date upon which the hearing of the claim by Roseville College had been fixed. Nor, at that time, was there any suggestion of a likelihood, let alone a risk or a possibility of an issue estoppel, or some form of res judicata arising which would have the effect of preventing a full ventilation of the issues on the cross-claim in another Court at some time after the hearing in the Local Court. 108On the contrary, counsel for the College argued that the matters could properly be split, in the sense that the principal matters with respect to Roseville College's claim could be heard and determined without impacting upon the hearing of the proceedings in another appropriate court. 109Even after the Magistrate in delivering his judgment on whether or not it was appropriate to strike out the Defence and enter summary judgment, which he declined to do, there was no specific mention of any risk of issue estoppel or res judicata. 110Given the close relationship between the factual issues raised by the defence and the cross-claim, a failure to draw those matters to attention in the submissions by counsel for the College, when combined with statements of the kind to which I have referred by Heilpern LCM, the belief which Mr Mears expressed as to what he was free to do was entirely reasonable and justifiable. 111That belief was not then reflected in what occurred on 14 October 2008. 112On that occasion, Favretto LCM correctly, if I may say with respect, drew attention to the risk of issue estoppel or res judicata arising. Having regard to the contents of the Defence and cross-claim, it was entirely appropriate for Favretto LCM so to do. 113However, the difficulty which then confronted Mr and Mrs Mears was that they had attended at the hearing with one understanding, namely, that they were free to bring their cross-claim in another court of appropriate jurisdiction without limitation and they were being confronted by a conflicting statement by Favretto LCM who was entirely unaware of what had been said in the exchanges on the previous occasion in Court. 114That was because as Favretto LCM pointed out on 14 October 2008, they were not able to take proceedings in another jurisdiction without limitation, because of any of the risks of estoppel to which I have earlier referred. 115Confronted by that risk, and having regard to what had been said to them on the previous occasion, it is unsurprising that they sought an adjournment. Although Mr Mears attempted to convey, reasonably accurately, the substance of what had transpired in the exchanges with Heilpern LCM on the previous occasion, it appears that Favretto LCM, who did not have a transcript of the previous court hearing, did not take into account any of those matters in determining whether or not Mr and Mrs Mears were entitled to an adjournment and a consideration of the proper course to follow, including, in a timely fashion, filing their cross-claim in another court which, so they were informed by Heilpern LCM, would result in the automatic transfer of the whole of the proceedings to that Court. 116As well, by a simple oral announcement to the Court, Mr and Mrs Mears could have abandoned the excess of the sums claimed in their crossclaim, including their unliquidated claim, and proceeded with their cross-claim, subject to the unresolved issues about the adequacy of their pleading, and the readiness of the College for a hearing on all issues raised by their claim and the cross-claim of Mr and Mrs Mears. But Mr and Mrs Mears did not get that opportunity, adequately, on either 2 October, or else on 14 October. 117Rather, the decision of Favretto LCM on the issue of whether or not an adjournment ought be granted concentrated on the provisions of s 56 of the Civil Procedure Act and the dilatory nature of the approach of Mr and Mrs Mears to the hearing. 118In his reasons he said that Mr and Mrs Mears had ample opportunity to file a proper cross-claim. 119It is hard to conclude that a period of, at the maximum, 12 days between when their cross-claim was "dismissed" because it exceeded the jurisdiction of the Local Court, and the hearing, in circumstances where Mr and Mrs Mears were unrepresented and were engaged in preparing for a hearing, and were not given any warning that there was time limit within which they were to file their cross-claim in another court, or else abandon the excess of their claim, do not support the conclusion of Favretto LCM that they had an ample opportunity to file the cross-claim. 120In addition his conclusion that their late acceptance of the proposition that there may be a risk of issue estoppel or res judicata was a matter falling at their feet, was a finding which was not justified in all of the circumstances. Mr and Mrs Mears' understanding of that issue was necessarily informed by what they had been told 12 days earlier by Heilpern LCM. No question was raised on that occasion, as I have said, of the existence of any estoppel. 121As well, it is hard to see how, other than with respect to their legal costs, that, at that stage of the proceedings, the College was prejudiced by a further adjournment to enable a cross-claim to be filed in another Court, or else, a step taken in the Local Court which abandoned any excess over and above the jurisdictional limit. Having regard to the powers of the Local Court with respect to making orders as to costs, including that a gross sum of costs can be determined by the Court without a process of assessment, and ordered to be paid within a fixed period, s 98 Civil Procedure Act , it is hard to see how any prejudice on the part of the College could not be appropriately addressed if an adjournment was granted to enable the position with respect to the cross-claim to be regularised. 122It is true, as Favretto LCM pointed out to Mr and Mrs Mears, that the overriding purpose of the Civil Procedure Act with respect to the resolution of the real issues in proceedings, is to achieve the just, quick and cheap resolution of those issues. However, quickness and minimisation of cost do not automatically prevail over the interests of justice. Each factor is to be considered by the Court in determining the exercise of any discretionary power when relevant in the particular circumstances of each case. 123Here, the interests of justice plainly demanded, in light of what Mr and Mrs Mears had been told by Heilpern LCM, that they be given an opportunity, albeit for a limited period, to consider whether to commence their proceedings in another court, or alternatively, to proceed on their cross-claim by limiting the sum claimed to the jurisdiction of the Local Court. Whether this required the "re-instatement" of their Cross-claim is not presently material. That was a matter of procedure which ought not have affected any question of substance. 124It was only in one of those ways, upon the assumption which had previously been articulated, that the principal proceedings would be transferred to another court of competent jurisdiction where the crossclaim was mounted, that the risk of an issue estoppel or res judicata could have been avoided. 125As well, it was clearly in the public interest and the interest of efficiency of the administration of justice, that one court be properly seized of all of the issues, and that there should be only one hearing on all of the issues, with one judgment being delivered. 126The course insisted upon by Counsel for the College, necessarily meant that there would be two hearings by two separate courts on issues that were largely intertwined, which would undoubtedly have resulted in considerable cost and expense to all parties. It also placed an unnecessary burden on the resources of the court system. That is particularly so when there was unlikely to be any advantage to be gained by having the claim of the College heard and determined because, even if the College succeeded in obtaining judgment, it was open to Mr and Mrs Mears to seek a stay on the enforcement of that judgment pending the hearing and determination of their claim. Such a stay was a realistic prospect, having regard to the similarity of issues on both claims. 127Thus, I conclude that in addition to the denial of procedural fairness on 2 October 2008 which has arisen because they were mislead, I am sure unwittingly, by what they were told by the presiding magistrate, who himself was presented with submissions from counsel for the College which urged the course which he followed. At the leats, those submissions were incomplete and thereby misleading, as was, what the magistrate told Mr and Mrs Mears. 128I have also concluded that Mr and Mrs Mears were denied procedural fairness by the failure of Favretto LCM to grant them an adjournment in circumstances in which they found themselves, which circumstances had been largely created by what had occurred in the exchanges with Heilpern LCM on the previous occasion. They should also have been permitted to rectify the position in which they found themselves by being allowed time within which to commence their proceedings in another Court, or else abandon the excess of their cross-claim. 129These denials of procedural fairness are matters of substance because, happening as they did at the start of the proceedings, they have prevented a hearing of the merits of all of the pleaded causes of action. I do not accept that the final judgment of Favretto LCM determined all issues fully. I accept the submissions of Mr Curtin SC that, at the least, the beneficial evidentiary provisions in the Trade Practices Act causes of action have not been considered or determined. 130I should note that a question arises as to whether the Local Court had jurisdiction to determine the pleaded causes of action, and also whether the provisions of the Fair Trading Act 1987 were applicable, and whether those provisions had the same beneficial effect for Mr and Mrs Mears. However, as no submissions were made on these matters, I am not in a position to make any relevant findings as to the questions which arise in this area. 131Having determined that a number of breaches of procedural fairness have occurred, the next matter which arises is whether those breaches ought be the subject of relief in this Court. 132In Stead, the High Court of Australia held that a plaintiff had been denied procedural fairness in proceedings upon a claim for damages for personal injury. The Court, Mason, Wilson, Brennan, Deane and Dawson JJ, in considering what relief ought follow from such a finding, said at 145: "...an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial on such a case would be a futility. For this reason, not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial. Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, ... it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference. ... However, when the Full Court is invited by a respondent to exercise [its] powers in order to arrive at a conclusion that a new trial sought to remedy to a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial." 133As Mr Curtin SC's submissions make clear the credibility of Mr Mears as a witness, and the believability of his evidence was a serious issue in the judgement of Favretto LCM. By way of example, in dealing with a significant issue at [48] of his judgment, Favretto LCM accepted the evidence of an employee of the College to that of Mr Mears. 134Kirby J discussed the judgment in Stead to which I have referred in Aala at [131]. He said: "Once the applicable breach is proved, the victim of the breach is ordinarily entitled to relief. It is only where an affirmative conclusion is reached, that compliance with the requirements of procedural fairness 'could have made no difference' to the result that relief will be withheld. This Court has emphasised that such an outcome will be a rarity. It will be 'no easy task' to convince a court to adopt it ..." (footnotes omitted) 135I recognise and accept the features to which attention has been drawn in the submissions of Senior Counsel for the College about what has happened since the two hearing dates in October 2008. I recognise that significant costs have been incurred, and that many days have been occupied in the final hearing. I also recognise that the judgment of Favretto LCM, when ultimately deciding the matter, dealt with the merits of many, but not all of the matters that might ultimately fall to be determined on a Cross-claim. 136However, I am not persuaded that I could reach a conclusion that no other outcome was possible as Stead requires. It is clear that in his judgment, Favretto LCM referred to, and took into account, the failure of the defence to raise any question of misrepresentation, and the failure of Mr and Mrs Mears to have included a cross-claim dealing with many of the matters to which they referred. Equally, a cross-claim was needed to explicate the substance of their claims and to claim a remedy by way of damages. At the least, Mr and Mrs Mears did not have the opportunity of having a hearing on those matters and some of the causes of action which they wished to articulate. 137Accordingly, it seems to me that I must grant relief. The effect of that is that there must be a new trial. 138However, I would wish to receive submissions on what orders, with some precision, ought be made because it may be that the parties can by agreement, or else I can decide after further submissions, that an order can be crafted which has the effect of minimising to the greatest extent possible, the further expense to which the parties will be exposed, and the need for each point to be completely re-argued. 139I accept, as Mr Curtin SC submitted, that the best course is to provide the parties with the opportunity of considering what orders might properly be made by this Court in light of its reasons. 140Accordingly, in those circumstances, I will refrain from making any final orders about the disposition of the appeal. 141However, it will be appropriate for me to enter an order to the effect that the appeal will be allowed and that the parties are to confer and provide to the Court submissions as to what orders ought be made.

Orders 142I make the following orders: (1)Appeal allowed. (2)On or before 31 May 2013, Mr and Mrs Mears are to file in Court, and serve on the solicitors for Roseville College short minutes of order setting out the relief for which they contend. (3)On or before 14 June 2013, Roseville College is to file in Court and serve on Mr and Mrs Mears short minutes of order setting out the relief for which they contend. (4)Proceedings are listed before me for final determination of which orders may be appropriate at 9.30am on 21 June 2013. (5)Costs reserved until 21 June 2013.

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