LEGAL PROPOSITIONS
13The appellant's complaints must be evaluated in the context of the role of the Court on an appeal governed by s 75A of the Supreme Court Act 1970 (NSW), which is by way of rehearing. That, as Giles JA explained in a convenient analysis of the authorities, requires the Court to "conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons": Shimokawa v Lewis [2009] NSWCA 266 (at [176]).
14As will become apparent, much of the primary judge's reasoning towards his conclusion in the respondent's favour turned on his rejection of substantially all of the appellant's witnesses' evidence - albeit not on credibility grounds. That factor does not prelude the Court exercising its rehearing function, although it should make "due allowance" for the fact it has not seen or heard the witnesses. If, after making such due allowance, the Court concludes error has been shown and a substantial miscarriage of justice has occurred, the Court may, inter alia, order a new trial: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 (at [25] - [27]) per Gleeson CJ, Gummow and Kirby JJ; Uniform Civil Procedure Rules 51.53.
15Before embarking upon a consideration of the primary judgment and the appellant's complaints, it is appropriate to set out some fundamental propositions concerning the issue of procedural fairness the appellant identifies as at the forefront of the appeal.
16Parties to litigation are entitled to a fair trial at which they can put their case properly before the judge: Jones v National Coal Board [1957] 2 QB 55 (at 67), referred to with approval in Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 (at 145) per Mason, Wilson, Brennan, Deane and Dawson JJ. Where a party is denied a fair trial, a new trial may be ordered unless to do so would be a futility. Where a "denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference": Stead (at 145).
17"Procedural unfairness" is a convenient description of the appellant's complaint that the primary judge's approach denied it a fair trial. The appellant's complaint may also be expressed as raising a "question of practical fairness and justice" ( Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353 (at [4]) per Giles JA) or a requirement of "fair play and commonsense": Ucar v Nylex Industrial Products Pty Ltd [2007] VSCA 181; (2007) 17 VR 492 (at [32]) per Chernov JA (Warren CJ agreeing) citing Jobst v Inglis (1986) 41 SASR 399 per Jacobs J.
18Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 per Gleeson CJ (at [37]). "[T]he experience of the common law [is] that, out of fair and lawful procedures, fair and lawful outcomes will more commonly emerge": Applicant NAFF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] HCA 62; (2004) 221 CLR 1 (at [83]) per Kirby J, referred to with approval by Redlich JA in Ucar (at [57]).
19The "judicial obligation [to accord procedural fairness] is ... concerned with affording a reasonable opportunity to present or meet a case [an] opportunity [which] is vital both to the reality and the appearance of justice. Just outcomes are grounded upon the court or tribunal addressing the issues presented, particularly where litigation proceeds according to the adversary principle": Seltsam Pty Ltd v Gahleb [2005] NSWCA 208; (2005) 3 DDCR 1 (at [4]) per Mason P.
20Campbell JA (with whom Giles and Hodgson JJ agreed) discussed the application of natural justice in court proceedings extensively in Adamson v Ede [2009] NSWCA 379 (at [53] - [63]). His Honour pointed out (at [59]) that "[b]oth in a court and in a tribunal, natural justice requires that a person be given a reasonable opportunity to present his or her case", then referred to the statement by Gaudron J (with whom Dawson J agreed) in Re Architects of Australia Association; Ex parte Municipal Officers Association (1989) 63 ALJR 298 (at 305) (also known as Re Coldham; Ex Parte Municipal Officers Association of Australia [1989] HCA 13; (1989) 84 ALR 208) where, after referring to this requirement, her Honour said:
"...procedural fairness requires only that a party be given 'a reasonable opportunity to present his case' and not that the tribunal ensure 'that a party takes the best advantage of the opportunity to which he is entitled'. And it is always relevant to inquire whether the party or his legal representative should reasonably have apprehended that the issue was or might become a live issue..."
21In Chaina , Basten JA also observed after referring to Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") 51.53:
"28 The criminal cases addressing the question whether there has been a substantial miscarriage of justice distinguish between:
(a) procedural unfairness which can be shown to have led to an unjust conviction;
(b) unfairness which precludes an assessment of the justness of the outcome, or
(c) a departure from an essential requirement of a trial which itself involves a substantial miscarriage of justice without the need to consider the possible effects on the outcome.
...
29 In civil proceedings it is also helpful to consider the nature of the error asserted by reference to the categories identified above. Stead fell within the second category. In Stead the plaintiff had been denied a 'fair trial' because he had been stopped from presenting his case properly before the judge ... Because the appeal court had not heard the witness, it could not say that the lost opportunity made no difference. To come within Stead , an appellant must first demonstrate a procedural ruling capable of preventing a trial according to law. Not every refusal of an adjournment, limitation on cross-examination or refusal to allow a plaintiff to reopen which is adverse to one party's interests will be so characterised. It is necessary in each case, therefore, to consider the extent to which the alleged unfairness may have had an impact on the outcome and, where that possibility arises, whether the extent of the impact can be assessed on the appeal."
22If one transposes "unjust verdict" for "unjust conviction" in Basten JA's first category, one readily encapsulates the gist of the appellant's complaint. It can be illustrated by propositions some of which are extracted from administrative law areas, but which have been held to apply to civil proceedings.
23Thus, "[i]t is uncontroversial that an ingredient of the court's duty to accord procedural fairness involves the giving of 'a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view' ": Ucar (at [22]) per Chernov JA. His Honour expanded on this proposition (at [27]), saying:
"... the general rule [is] that a party should be given the opportunity to respond to matters prejudicial to its interests that are known only to the court and which might be taken into account in the determination of issues that may affect the party's property, rights or legitimate expectations. And, as will be explained later, subject to qualifications, failure to disclose such matters will generally result in the decision being set aside."
24Where a party is represented the focus will ordinarily be on what should in fairness and justice be made known to the representative. It is not required that the representative be apprised of the judge's views generally, although if the judge is minded to decide the case on a completely different basis from that on which the case is being conducted that should be raised: Chaina (at [4]) per Giles JA referring to Seltsam (at [78]) per Ipp JA, Mason P agreeing.
25I should not leave this discussion of principle without referring to Heydon J's reasons in International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319. Under the heading " The centrality of 'hearings' " (at [141]ff) his Honour discussed (footnotes omitted):
" ... the principle that before any judicial decision is made which has substantive consequences there generally should be a 'hearing'. A hearing takes place before a judge at a time and place of which the moving party has given notice to the defending party. At it both parties have an opportunity to tender evidence relating to, and advance arguments in favour of, the particular orders they ask for. This aspect of the rules of natural justice pervades Australian procedural law. It has several justifications, and their force is so great that exceptions to the hearing rule in judicial proceedings are very narrow."
26His Honour elaborated on this proposition, in so doing referring (at [145]) approvingly to Megarry J's decision in John v Rees [1970] Ch 345 (at 402):
"[T]hose with any knowledge of human nature who pause to think for a moment [are not] likely to underestimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events."
27Heydon JA then said (footnotes omitted):
"146 Illustrations . The courts are extremely solicitous about the interests of persons who have not been given an opportunity to be heard either at all or in respect of particular questions before judicial orders of a substantive kind are made against them. Many illustrations of the duty only to make substantive judicial orders after giving a hearing - that is, not to act ex parte or sua sponte - can be found. A court may not decide a case on a point not raised by one of the parties or by the court for the consideration of the parties. Non-compliance by a court of trial with the duty to give a hearing on a question of law which 'must clearly be answered unfavourably to the aggrieved party' will not lead to a new trial, but where no hearing is given on the question whether a finding of fact turning on witness credibility should be made, it is not easy to conclude that a new trial should be refused on the ground that even if a hearing had taken place, 'it could have made no possible difference to the result'. The court is not entitled to take into account factual material not in evidence without notice to the parties. The court is not entitled to take judicial notice of particular matters of fact after inquiry without notifying the parties of the inquiry and giving them the opportunity to controvert or comment on the source in which the inquiry is made..."
28One specific illustration pertinent to one of the appellant's damages complaints should be mentioned. It is a denial of procedural fairness to a defendant to disregard the submissions of counsel for a plaintiff and, without notice to the defendant, award substantially more than is sought for a head of damages: Seltsam (at [77] - [79]) applying Wrigley Co Pty Ltd v Holland [2002] NSWCA 109; (2002) 23 NSWCCR 463.
29As I have said, a new trial will be ordered if the appellant demonstrates that the denial of natural justice deprived him or her of the possibility of a successful outcome: Stead (at 147). The latter "principle ... at general law is often sourced to Balenzuela v De Gail [1959] HCA 1; 101 CLR 226, and [is] ... encapsulated in this jurisdiction in r 51.53 of the Uniform Civil Procedure Rules 2005 (NSW), that no new trial should be ordered unless there has been some substantial wrong or miscarriage of justice": Chaina (at [26]) per Basten JA (with whom Giles JA and Young CJ in Eq agreed).
30The penultimate proposition in the previous paragraph was explained by Gleeson CJ in Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 (at [4]) by reference to Stead in the following terms (footnotes omitted):
"It cannot be concluded that the denial of that opportunity made no difference to the outcome of the proceeding. The Tribunal's conclusion that certain information given by the prosecutor was a concoction was based, in part, upon an unwarranted assumption as to what the prosecutor had previously told various authorities; an assumption which, according to the evidence, the prosecutor could and would have corrected had he not been inadvertently misled by the Tribunal. It is possible that, even if the prosecutor had been given an opportunity to deal with the point, the Tribunal's ultimate conclusion would have been the same. But no one can be sure of that. Decisions as to credibility are often based upon matters of impression, and an unfavourable view taken upon an otherwise minor issue may be decisive. As a result of the conduct of the Tribunal, the prosecutor was deprived of a fair opportunity of presenting his case, and of correcting an erroneous and unfavourable factual assumption relevant to his credibility. The circumstance that this resulted from an innocent misstatement does not alter the position. The question concerns the nature and extent of the statutory power exercised by the Tribunal, and the condition that the power be exercised in a manner which was procedurally fair; not the good faith of the Tribunal." (emphasis added)