Plaintiff v Defendant

(a) is of the opinion that the failure to institute the appeal within the [30 day] period ... was due to exceptional circumstances; and

(b) is satisfied that the case of any other party to the appeal would not be materially prejudiced because of the delay.

2 It is not uncommon to have disputes over applications for leave to appeal out of time, and it is remarkable how much judicial attention has been given to the meaning of s 109(5). Before me were Schwerin v Equal Opportunity Board;[1] Denysenko v Dessa;[2] Hughes v Morgan;[3] Burlock v Wellington Street Investments Pty Ltd;[4] and Miao v Body Corporate SP31235U.[5] See also Adidem Pty Ltd v Cowdery.[6]

3 Leave to appeal was opposed tenaciously in this case, in the face of some deserving facts, so I thought. As I will show, there were eccentric happenings after the Magistrate reserved his decision after the trial of this case, not attributable to anything done by the appellant or the respondent. On 24 April 2015 I gave an ex tempore decision giving leave to appeal, for reasons to be published. I came to the view that exceptional circumstances existed here in abundance; that is, not only within the first 30 days but also to explain the delay after day 30. I concluded it would be unjust to refuse leave. But a point of statutory construction s 109(5)(a) was agitated which is of practical significance, and requires an analysis and explanation of some authorities.

5 The purpose of this provision is plain enough. There is a public interest to bring finality to decisions of a court burdened with a vast amount of a variety of disputes, usually involving ordinary people or smaller businesses without the means or the appetite to deal with the demands and costs of Supreme Court appellate litigation. To that end appeals are restricted by confining them to questions of law, and requiring appeals to be brought in 30 days, with the testing bar of "exceptional circumstances" to be cleared to be excused for non-compliance.

6 The point of statutory construction may be cast this way. An appellant has 30 days within which to appeal. Suppose an appellant can show there were exceptional circumstances within the 30 days that made it not possible to institute an appeal within 30 days. Say the barrier then disappears at day 60. The appeal is then instituted after day 90. Should leave to appeal out of time be granted because there were exceptional circumstances within the first 30 days as the section says literally? In my example, what test applies when looking at the delay after day 60?

7 The appellant contends that authorities support the view that the relevant time for the presence of exceptional circumstances is within the 30 days, and any question of delay thereafter comes to be assessed but not under the stringency of 'exceptional circumstances'. The facts here will elucidate the issue.

8 The appeal concerns a dispute about a contract for the sale of residential land. The appellant was the builder and the vendor. He was the defendant and counterclaimant below. The respondents were the purchasers and plaintiffs below. The purchasers signed a contract on 8 May 2014. It was countersigned the following day by the vendor. There were two dwellings on the land. The pre-contractual statement required to be provided by the vendor to the purchaser under s 32 of the Sale of Land Act did not have the plan of subdivision. The day before the purchasers signed the contract, they took legal advice about this. The purchasers were willing to sign a contract but required the insertion of an extra clause in the contract which said that the vendor would provide, amongst other things, the 'proposed subdivision plans' before 21 May 2014. That clause was inserted as a special condition. On 13 May 2014 the proposed plan of subdivision was given to the purchasers' solicitors. On 27 May 2014 the purchasers paid the balance of the deposit. The purchasers later rescinded the contract on the ground that the absence of the subdivision plan in the s 32 statement before they signed the contract entitled them to rescind under s 32(5). They sought recovery of their deposit of $29,500. The vendor re-sold and sued for loss of bargain and contended the deposit had been forfeited for a wrongful rescission.

9 It is possible for a vendor to be excused for noncompliance with s 32 of the Sale of Land Act. At the relevant time[7] section 32(7) provided that:

...the purchaser may not rescind the contract if the Court is satisfied that the vendor has acted honestly and reasonably and ought fairly to be excused for the contravention and that the purchaser is substantially in as good a position as if all the relevant provisions of this section had been complied with.

10 The vendor's case was that the willingness of the purchasers to extend the date for provision of the subdivision plan to 21 May 2014 ought lead a court to be satisfied that the vendor had acted honestly and reasonably. To that I would add it was significant that after the subdivision plan was provided, the purchasers paid the balance of deposit.

11 The Magistrate found that the vendor had acted honestly; but that he had not acted reasonably. His Honour held first that the vendor was in a position to obtain the plan before the contract was signed, and that a person in the vendor's position, acting reasonably, should have obtained the subdivision plan as part of the s 32 statement before the purchaser signed. Then his Honour held that the insertion by the purchasers of the special condition (with which the vendor complied) did not make it reasonable to excuse the vendor from the statutory requirement to provide the vendor's statement before signing. In argument I observed, without more, that no issue seems to have been raised about s 32(8) which provides in essence that a provision in a contract that excludes modifies or restricts the requirements of this Division of the Sale of Land Act is void and of no effect.[8]

12 That is all that needs to be said about the legal elements of the case. It is the events after trial that matter. What follows is taken from the two affidavits filed by the purchasers' solicitor, Mr Ananda Jayasinghe.

13 At the conclusion of the trial on 11 December 2014 the Magistrate reserved his decision. I presume to say the issue in the case called for consideration, and, in reserving judgment, the natural expectation by both parties would have been for the Court to reconvene to state its reasons in written or unwritten form, and make orders consequentially.

14 But that did not happen. On 15 December 2014 the Civil Registrar of the Broadmeadows Magistrates' Court sent an email to the lawyers for both sides saying:

I write to inform you that His Honour Magistrate Lennon has considered his decision in this matter and has found for the plaintiff in the sum of $29,500.

Parties are requested to reply to the Civil Coordinator at Broadmeadows (this email address) with agreed amounts for both interest and costs.

In default of agreement, parties are to file submissions in relation to interest and costs by 11 January 2015.

15 It is certainly unorthodox for a non-judicial officer to pronounce the Court's decision this way. I do not know if this was at all proper or authorised legally. I have not been taken to any rules of court to say it was. It was not officially judicial. It was not even an order. It was for the Magistrate to pronounce the decision, usually with some reasons. The email does not say that an order was made, or that an order was on the way. As I read the email, it implies that no final order would be made before determining costs on written submissions. And it says nothing about reasons.

16 On 18 December 2014 the vendor's lawyer rang the registrar and asked if the Magistrate had made orders. He was later told that orders had not been made. But subsequent events show that an entry of orders was made in the Court's Register on 15 December 2014. But the 'Notice of Order Made' was not dated until 30 December 2013. That notice shows the entry of an order in favour of the purchasers for $29,500 with costs and interest to be agreed, in default of which written submissions were to be submitted. The counterclaim was dismissed.

17 Still having not received an order, on 22 December 2014 the vendor's lawyer asked the registrar by email when the Magistrate would provide reasons. He says he got no reply.

18 The next event in time was that a 'Notice of Order Made' came into existence, as I have said, dated 30 December 2014. The vendor's lawyer says he received that Notice in early 2015, explained by him to say he was away on holidays until 12 January 2015. There is no evidence from the purchasers when they got such a notice. That notice says that the order was made on 15 December 2014.

19 On 13 January the vendor's lawyer rang the registrar to ask if the Magistrate was going to provide any reasons. (Up to then there had been no reply to his request for reasons on 22 December.) He was told by the registrar there would be no reasons given. On the same day, the vendor's lawyer followed that up with an email confirming that conversation, saying where relevant:

We...confirm your advice that His Honour Magistrate Lennon has decided not to provide written or oral reasons for his judgment in this matter.

We note your advice that his Honour no longer works in the Broadmeadows Magistrates' Court.

20 Then there was a change. Two days later the registrar forwarded to the parties an email that the registrar had received from the Magistrate on 15 January 2015. The Magistrate's email said:

I was not satisfied on the evidence that the Defendant acted reasonably in failing to provide the Plan of Subdivision with the section 32 Statement. It was unreasonable for him to fail to do so.

21 I cannot resist commenting that this too was another example of an unorthodox, and with respect, problematic way of doing things. I find it hard to see this as a judicial act of publishing reasons. And by this time, it was 30 days since the entry of the order on 15 December 2014.

22 What was the vendor to do? On 20 January 2015, the vendor's lawyer sent to the Senior Registrar a lengthy email. I shall not recite its contents in detail. I think it was a necessary, reasonable and measured communication. I isolate these passages:

This two sentence email is clearly inadequate and unsatisfactory. His Honour's email is not an official record. Further, it is inappropriate to consider his Honour's two sentence email as his Honour's reasons.

Our client, the first defendant, respectfully asks for you to confirm that his Honour's email dated 15 January 2015 is his judgment for the above mentioned matter, or whether his Honour is, or is not, going to provide any reasons or judgment for the parties in this matter. If his Honour is going to provide proper reasons then when will the parties likely receive those reasons?

Further, the approach to date has prejudiced the first defendant and how his lawyers can appropriately advise him going forward.

23 It does not appear there was a written response to that email. But it appears there must have been some expectation of reasons coming because on 5 February 2015 the vendor's lawyer told the purchasers' lawyer that:

We confirm our clients' instructions to appeal His Honour's decision in this matter.

As you are aware, His Honour is yet to provide reasons for his decision which we are advised by the Broadmeadows Magistrates' Court will be forthcoming. Until such time as those reasons are provided, the appeal rights of the parties continue to exist.

24 Much was made of this email by counsel for the purchasers, to say that if an intention to appeal had been so evinced, then why did the vendor not file a notice of appeal at about this time? I do not interpret the e-mail so severely, not in the circumstances. I think, if anything, it signifies an intention to reserve their rights of appeal, given the passage of time and the absence of reasons. The question whether an appeal could be responsibly instituted necessarily required reasons to be obtained. Otherwise how does a litigant appeal an order with no reasons? And was the vendor going to get reasons? The vendor could not be sure.

25 On 11 February 2015, the Magistrate provided his 'Decision' in writing. It is no part of the plaintiff's questions of law on this intended appeal that the reasons were inadequate. For what it is worth, I do not think they are inadequate.

26 I shall abbreviate the events that occurred thereafter in this way:

(a) a transcript of evidence and submissions was obtained on 16 February 2015;

(b) 20 February 2015 the vendor's lawyer was seeking funds for the appeal, in circumstances where his client was hospitalized in a serious way;

(c) the client's wife said that moneys would be provided in the week following 20 February;

(d) the vendor's lawyers sent in their submissions on costs on 3 March 2015;

(e) counsel who acted for the vendor at trial (and who appeared on this application) was absent in the Northern Territory until 11 March 2015;

(f) the notice of appeal was filed on 17 March 2015, that is, 34 days after reasons; and

(g) on 30 March the Magistrate gave his decision on costs.

27 When did the 30 day time period start to run? The Act says the appeal must be instituted 30 days 'after the day on which the order complained of was made'. Both counsel accept that the order was made on 15 December 2014 when the entry was made on the register, even though the notice was not dated until 30 December 2014. The notice was not seen by the vendor's lawyer until 12 January 2015 not due to any lack of diligence. The 30 day period was then to expire in three days. Yet the vendor could not take advice whether the order was appealable on a question of law until the reasons were given. They promptly made enquiries about the reasons, and as at 20 January 2015 were pressing for reasons more explicative than those given in the two sentence e-mail from the Magistrate to the registrar.

28 The upshot is that no assessment could be made about the appellability of the order until the reasons for the decision were given on 11 February 2015. The reasons had to be considered; advice given usually from counsel; and instructions sought. This was not an elementary case.

29 Section 109(5) says that leave may be granted if this Court is of the opinion 'that the failure to institute the appeal within the [30 day] period...was due to exceptional circumstances'. Mr Little, counsel for the vendor, submitted that the provision called for a literal interpretation, meaning it had to be shown there were exceptional circumstances in those 30 days which prevented him from filing a notice of appeal in the 30 days. On that basis, s 109(5) is taken to be understood as saying '...the failure to institute the appeal within the period...was due to exceptional circumstances [within the period]'. If there were exceptional circumstances within the 30 days then, as was submitted, that 'ticks the box' and the question of exceptional circumstances does not come to matter in the events that occur after the 30 day period. He submitted the onus shifted to the respondent to show that the delay thereafter should not be tolerated. The test, he said, was analogical to that considered by the doctrine of laches; that is prejudice caused by delay so great or detrimental that an appellant ought be deprived of the exercise of rights.

30 The authorities on this subject say that the merits of the appeal are irrelevant, and, on their face say or assume (or the parties in them assumed), that the exceptional circumstances test entails an examination of the circumstances between the time of the order and the expiry of the 30 day period: see Schwerin p287-8; Burlock [31]; Miao [29]; and Adidem [15]. Schwerin holds that facts and matters occurring after the statutory 30 day period are not relevant to the circumstances of a person's failure to appeal within time. I shall return to the cases later.

31 Counsel for the purchasers, Mr Sowden, wrestled with the effect of the authorities. He lamented with conviction there was something not right that a person could show there were exceptional circumstances in the 30 day period, but then be liberated from the exceptional circumstances test by taking time to institute the appeal outside 30 days and be in the wilderness as he put it. I am bound to say I think there is justification in his sense of injustice or anomaly of the libertine effect of the appellant's construction.

32 In the situation obtained, Mr Sowden's first submission was that the appellant should have realised there was a demonstrable error of law when the registrar told the appellant's lawyers on 13 January 2015 that there would not be any reasons. He submitted the Magistrate was under a legal duty to give reasons, and his Honour's unwillingness to do so was manifestly an appealable error of law. Counsel relied on the decision of in Soulemezis v Dudley (Holdings) Pty Ltd[9] for the proposition that the Magistrate was bound to give reasons, or at the very least, when the decision constitutes what is in fact or in substance a final order, the case must be exceptional for a Magistrate not to state reasons. He submitted that come 13 January 2015, at a time when the 30 day period had not expired, and an order was in hand, the appellant should have appealed the order on the ground of a failure to give reasons.

33 I reject that submission. The facts as I have exposed them show there was real uncertainty or perplexity not attributable to anything done by the vendor or his lawyers. The statement that there would be no reasons came not from the Magistrate but the registrar. That was odd. Two days later on 15 January 2015 the reasons were given in two sentences in an email on relay from the registrar. Those reasons were, I am afraid to say, manifestly inadequate and I think added to the perplexity and put the vendor in a most difficult or awkward position. That was exceptional; out of the ordinary.

34 If it be suggested that the vendor should have then immediately lodged an appeal for inadequate reasons I would reject that too. In the predicament that the vendor's lawyers were in, the matter required delicate handling. The right thing to do was to write, as they did on 20 January 2015 and ask for some better or explicative reasons. Otherwise, delay and expense would have been incurred if an appeal was instituted for failure to give reasons or adequate reasons, only for an appeal court to question why further or better reasons were not sought, and ultimately, only to result in an order on appeal that further reasons be provided. Ultimately, it was the careful measures taken by the vendor's lawyers that led to the same outcome, that is, to get written reasons which were not inadequate on 11 February 2015. They were exceptional circumstances.

35 Mr Sowden then submitted the Court should construe s 109 to say that the 30 day time limit should also be taken to apply, or adapted to also apply, as running from the day on which the reasons were given on 11 February 2015. It was put on the basis that applying the purposive test of statutory construction, the object of the section was promptitude and finality. If the requirement to show exceptional circumstances ended at day 30 after the order was made, then an appellant would be relieved of the onus of the exceptional circumstances test for any delay thereafter. Some test had to be applied concerning the subsequent delay. I think I was being asked to do some surgery on the section and insert 'or reasons for the order' after the word 'order'.

36 I reject that submission. But I accept the point about the need, according to principle, to overcome the apparent injustice of no statutory test after the 30th day. But for a Court to insert a 30 day time limit from the time of giving the reasons exceeds the judicial function. Of course it may be legitimate to read statutory words down or, in the appropriate case, read words into a statute to give it meaning where meaning is otherwise not apparent or to make sense of the provision: see Pearce and Geddes, Statutory Interpretation in Australia.[10] But s 109 explicitly sets the reference point for the time limit according to the date of the order, not the reasons. It is textually rigid. It is illegitimate for the Court to succumb to the suggestion and in effect legislate to insert an additional reference point, particularly where it differs from the one stipulated.

37 The next alternative argument was that the order made on 15 December was defective because there were no reasons as a concomitant to the orders. It was submitted that the order became perfected by the giving of reasons on 11 February 2015 and the 30 day time limit therefore ran from that date.

38 I reject that submission. The order is the order. It was made when it was made. There is no law to which I was taken to say that the order was therefore defective for the absence of reasons. The absence of reasons is a discrete matter.

39 I see the issue in the statute here as very much involving a matter of English expression or comprehension. I look at the phrase '...the failure to institute the appeal within the [30 day] period...was due to exceptional circumstances.' I think undue or unintended attention ought not be given to the word 'within'. As I construe the section, having regard to its evident purpose, the question 'Why didn't you file the appeal within time?' is the same thing as asking 'Why are you late?' Or, more pointedly, to return to my example: 'You had 30 days to appeal, and you took more than 90, so what is your excuse for being late?' It would be an unresponsive answer to say 'There were exceptional circumstances in the first 30 days preventing me from filing an appeal.' It would also be unresponsive to say those circumstances extended to day 60. Equally, it would be untenable to say 'I cannot point to exceptional circumstances within the 30 days, but something exceptional happened after the 30 days.' That latter example explains the decision in Schwerin.

40 I analyse it this way. This statutory provision is concerned with two matters. The first is an imposition of a time limit to appeal. The second is to allow an appeal to be brought later than 30 days if two tests are met: exceptional circumstances, and no prejudice to the respondent. And as the authorities say, the merits of the appeal are not relevant; that is the exceptional circumstances must relate solely to the explanation for the delay. I would hold just that.

41 Great care must be taken with the authorities. In Burlock[11] (J) Forrest J stated that 'The enquiry is confined to the circumstances relevant to the applicant's failure to appeal within time and whether they may be characterised as exceptional'. I think the enquiry is 'confined' in the sense that the merits of the appeal do not matter, and all that matters is the factual question why the appellant did not file in time. Further, I would not countenance a pedantic construction of 'within time' in that statement. Of course, as part of the continuum of delay, exceptional circumstances would have to be shown in the first 30 days. But I would not accept that the provision intended to stop the enquiry at day 30. On the modern approach to statutory construction (for which I would refer to Cooper Brooks Wollongong Pty Ltd v FCT[12] and CIC Insurance Ltd v Bankstown Football Club Ltd[13]), I think such an outcome does not conform to the evident intention to hold the appellant to account for delay in bringing an appeal by the measure of exceptional circumstances. The fairer or more convenient operation of the section is to impose that measure in the 30 days and beyond. In my example, that means the test of exceptional circumstances would also apply from days 31 to the date of the institution of the appeal.

42 In Burlock (J) Forrest J appears to have accepted the submission that the provision requires an examination of the circumstances between the time of the judgment and the expiry of the 30 day period.[14] That was repeated by Derham AsJ in Miao.[15] But stated in isolation, it is not something I find myself able to accept and I doubt whether their Honours can be taken as intending to say as a general proposition that the Court shuts down its enquiry into exceptional circumstances at day 30. In Burlock (J) Forrest J was, in a peculiar case, taken to telling circumstances before the commencement of day 1 in the 30 day period as showing circumstances reflecting adversely on the conviction of the explanation within the 30 days.[16] The opposing submission was that the Court was confined to the 30 days. His Honour held that in determining whether exceptional circumstances were demonstrated, the Court could properly look to events before the commencement of the 30 day period.

43 I do not regard Burlock and Miao as standing in the way of rejecting, as I do, the appellant's construction of the provision. It is this case that sharply raises the issue that was not present for determination in those cases. I prefer the uncomplicated statement of (B) Beach J in Hughes[17] that:

does not look to the merits of the appeal itself when determining whether to grant leave to a litigant to appeal out of time. The sub-section requires one to look at the circumstances giving rise to the litigant's failure to appeal within time. If those circumstances can properly be categorised as exceptional then leave to appeal will be granted. If they cannot, then leave will be refused.

44 Whatever the test, my decision to grant leave is unaffected. I assess the circumstances as manifestly exceptional not only within the 30 day period, but continuing up to the time of the proper reasons on 11 February 2015. The real focus is then on the 34 day period after reasons. In isolation, criticism could be made of the time taken to then file the appeal but I think by that time progress and mentality came to be affected by all that had preceded it. An uncontradicted explanation has been given by the vendor's lawyers about the exigencies that then arose; an explanation which I think is reasonable and genuine. The client's hospitalisation and counsel's absence were enough to say the case was exceptional. Overall, I think the facts speak for themselves to show that the appellant was put in an exceptionally difficult position from the beginning. There is no apparent prejudice to the respondent, and none asserted. All things considered, I think it would be harsh to refuse leave to appeal out of time.

45 It was for those reasons that the Court granted the application.

46 I shall make a separate order for the procedural conduct of this appeal. Mr Little suggested he may wish to amend the notice of appeal and I see no reason why I should not give liberty for that to occur. I would ask the parties to prepare a draft separate order concerning the procedural conduct of this appeal which may be submitted to my Associate to be settled and authenticated.

[1] [1994] VicRp 60; [1994] 2 VR 279.

[2] [1996] VicRp 65; [1996] 2 VR 221.

[3] [1998] VSC 147.

[4] [2009] VSC 565.

[5] [2013] VSC 380.

[6] [2014] VSC 533.

[9] (1987) 10 NSWLR 247, 278-279, 280 (NSW Ct App, per McHugh JA).

[12] [1981] HCA 26; (1981) 147 CLR 297, 394-5, 310-311 and 318-321.