14 September 2007
Alexander PRESTON v HARBOUR PACIFIC UNDERWRITING MANAGEMENT PTY LTD & ORS
Judgment
1 IPP JA: I agree with what Basten JA has stated in [2], [3] and [10] to [39] of his reasons. I express no view as to the matters raised in [4] to [9]. I agree with the orders his Honour proposes.
2 BASTEN JA: Mr Alexander Preston (the Appellant) brought proceedings for defamation against Harbour Pacific Underwriting Management Pty Ltd and five other defendants. The alleged slander involved a statement made by one of the defendants, Mr Michael Maher, who was involved in the investigation of fire and water damage which occurred at premises occupied by a company run by the Appellant.
3 The Appellant was unsuccessful at trial, a jury finding that the defamatory statements were not made. From that finding and the subsequent judgment in favour of the defendants, the Appellant appealed to this Court. However, the defendants (now Respondents) sought that the Appellant provide security for costs. On 31 May 2007 Registrar Schell ordered that the Appellant provide security in an amount of $20,000 each in respect of the costs of the First, Second and Third Respondents. The present matter is a challenge to the orders made by the Registrar.
Nature of jurisdiction
4 The first question concerns the nature of the challenge brought from the Registrar to this Court. There are two contending positions which affect the nature of the jurisdiction. The first is that the Court is exercising the power to "discharge or vary" a judgment given by a judge of appeal, pursuant to s 46(4) of the Supreme Court Act 1970 (NSW). That is said to follow from the fact that an order for security for costs is itself an order which may be made by a judge of appeal pursuant to s 46(1) or (2) and accordingly is a power which may be exercised by the registrar pursuant to Supreme Court Rules 1970 (NSW), Part 51, r 58. There are two consequences which flow from this approach: first, a challenge to the decision of a registrar can only be heard by a court constituted by three judges and not by a single judge. The second consequence is that, in accordance with the principles established in Wentworth v Wentworth (1994) 35 NSWLR 726, the nature of the review is restricted at least by the principles in House v The King (1936) 55 CLR 499 (relating to appeals from the exercise of a discretionary power) and Re Will of Gilbert (1946) 46 SR(NSW) 318 (dealing with appeals from decisions relating to practice or procedure): at 733 (Handley JA); see also Mahoney JA at 730B-731C and Powell JA at 736-737. (See also Patrick v Howorth [2002] NSWCA 285 at [10] (Heydon JA, Hodgson JA and Young CJ in Eq agreeing.)
5 The alternative construction is that the application is to "review" the exercise of discretion by the registrar, which entails a fresh consideration by this Court, of a kind sometimes referred to as a "hearing de novo". The basis for this approach is more complex. Historically, prior to the amendments made upon the introduction of the Uniform Civil Procedure Rules 2005 (NSW), the Supreme Court Rules 1970 (NSW) dealt in Part 61 with the powers of a registrar, providing that an order or decision of a registrar may be the subject of "review" by the Court: Pt 61 r 3. Pursuant to r 4, such a power in respect of the registrar of the Court of Appeal was then exercised by a judge of appeal. Accordingly, the decision of the judge may be subject to a further application for variation or discharge, pursuant to s 46(4), whereas his or her powers of review were to be found in Part 61, r 3. That appears to have been the approach adopted by Santow JA in Wentworth v Graham (2002) 55 NSWLR 638 at 641. Nevertheless, there is a degree of inconsistency between that approach and the earlier judgment of the Court in Strata Consolidated (Australia) Pty Ltd v Bradshaw [2000] NSWCA 225, a judgment given by Heydon JA (Sheller and Beazley JJA agreeing) holding that because the registrar was exercising the powers of a single judge, an application to review his decision was made pursuant to s 46(4) of the Act. On that approach, presumably only a three member bench could review the decision of the registrar. Nevertheless, Sheller JA, who had been a member of the Court in Strata Consolidated, was content to review a registrar's decision, sitting alone, in Emmett v Hornsby Shire Council [2002] NSWCA 75. His Honour noted the power to review under Part 61, r 3, at [6], which he proceeded to exercise, without further consideration of the jurisdiction.
6 Since those cases were decided, Part 61, r 3 has been repealed, with effect from 15 August 2005. The power to review a decision of a registrar is now to be found in UCPR 49.19, although, in relation to a registrar of the Court of Appeal, Part 61, r 4 is still extant. In Penrith Whitewater Stadium Ltd v Lesvos Enterprises Pty Ltd [2007] NSWCA 131 at [2]-[9] I discussed the relevant authorities, although not Strata Consolidated. I expressed doubt as to whether I had the power, sitting alone, to review the decision of the registrar. Those doubts might be confirmed by reference to Strata Consolidated.
7 If the position of the registrar is to be equated with that of a single judge for the purposes of review of any decision of the registrar, it is difficult to see how such a review could be undertaken otherwise than by a three member bench of the Court. If that were the case, Part 61, r 4 would appear to follow from a false premise as to the operation of the Act and thus to be invalid. That was not suggested. Further, the logic of Strata Consolidated may be open to challenge. Because the powers of the registrar are identified as those which a single judge of the Court may exercise under s 46(1) and (2), it does not follow that the power to review the registrar's decision is the same as that with respect to a decision actually made by a single judge.
8 There are other problems, including a constitutional argument which has been raised in other proceedings pending in this Court. Because many security for costs applications involve corporations, and the application of s 1335 of the Corporations Act 2001 (Cth), the Court is in such cases exercising federal jurisdiction. Although the point has been fully considered only in relation to registrars of the Federal Court, there is an available argument that the registrar of a State court may exercise judicial power of the Commonwealth only subject to a satisfactory level of review or appeal: see Harris v Caladine (1991) 172 CLR 84 at 195 (Mason CJ and Deane J). As a matter of construction, it may be appropriate to favour a broader, rather than a more constrained, view of the right to review or appeal decisions of a registrar, so as to ensure constitutional validity when the Court is exercising federal jurisdiction. Although that is not this case, it is appropriate, in the case of vagueness or ambiguity, to adopt a construction which will apply uniformly between State and federal jurisdiction.
9 As in Penrith Whitewater Stadium, these questions were not fully agitated in this case. Further, there was no application to reconsider Strata Consolidated. Because, as will appear below, the Appellant must fail on even the broadest view of the Court's powers, it is not necessary to resolve these questions in the present case.
Merit of application: appeal from jury verdict
10 It is convenient to review the order of the Registrar on the view most favourable to the Appellant, namely that he is entitled to a fresh consideration by this Court of the exercise of power to grant security for costs, without finally determining whether that approach is correct in law.
11 This exercise requires consideration of the nature of the appeal in relation to the substantive claim and the new material upon which primary reliance is placed. However, that exercise cannot be properly undertaken without addressing the nature of the appeal itself, a course which none of the parties undertook until invited to do so by the Court.
12 Because the appeal arises from a trial with a jury in this Court, it is not an appeal by way of rehearing pursuant to s 75A of the Supreme Court Act: see s 75A(2). Rather, the appeal is brought pursuant to s 102 of the Supreme Court Act. The power to grant a new trial will be subject to the demonstration of a "substantial wrong or miscarriage" for the purposes of Part 51, r 23. In substance, the ground relied upon in the present case was the discovery of new material.
13 Much of the modern caselaw in this jurisdiction in relation to new material depends upon the operation of s 75A. However, care must be taken in applying those authorities for the purposes of an appeal under s 106. That is because "further evidence" may be adduced pursuant to s 75A(8) even though it is not "fresh evidence", in the sense that it was neither available to the party seeking to call it at the time of the trial, nor should it have been available by the use of reasonable diligence on the part of that party. On the other hand, the evidence may only be received "on special grounds".
14 This is not a case in which error was alleged in relation to the conduct of the trial. The grounds of appeal are entirely concerned with the fresh further evidence, which the Appellant says he has now obtained. Before the universal rule requiring the establishment of a substantial miscarriage of justice, in order to justify the setting aside of a verdict and the ordering of a retrial, a clear distinction developed between those cases in which error of law had been demonstrated and those in which there were "applications for a new trial on the ground that the verdict was against the weight of the evidence or because of discovery of fresh evidence or because the judge's summing-up was, in relation to the facts, insufficient" - in which cases the demonstration of a miscarriage had always been required: see Balenzuela v De Gail (1959) 101 CLR 226 at 243-244 (Windeyer J). (The history of the civil, as well as the criminal, practice in this regard is to be found in Conway v The Queen (2002) 209 CLR 203 at [5]-[29] (Gaudron ACJ, McHugh, Hayne and Callinan JJ).
15 In relation to fresh evidence, discovered after the trial, the basic principle remains that identified by Dixon CJ (with whom Williams, Webb, Kitto and Taylor JJ agreed) in Wollongong Corporation v Cowan (1955) 93 CLR 435 at 444:
"If cases are put aside where a trial has miscarried through misdirection, misreception of evidence, wrongful rejection of evidence or other error and if cases of surprise, malpractice or fraud are put on one side, it is essential to give effect to the rule that the verdict, regularly obtained, must not be disturbed without some insistent demand of justice. The discovery of fresh evidence in such circumstances could rarely, if ever, be a ground for a new trial unless certain well-known conditions are fulfilled. It must be reasonably clear that if the evidence had been available at the first trial and had been adduced, an opposite result would have been produced or, if it is not reasonably clear that it would have been produced, it must have been so highly likely as to make it unreasonable to suppose the contrary. Again, reasonable diligence must have been exercised to procure the evidence which the defeated party failed to adduce at the first trial."
16 Wollongong Corporation was treated by the joint judgment in CDJ v VAJ (1998) 197 CLR 172 at [89] as an authoritative statement of the general law principles. Their Honours noted that some flexibility was allowed to accord with "the overriding purpose of reconciling the demands of justice with the policy in the public interest of bringing suits to a final end": McHugh, Gummow and Callinan JJ at [105] quoting McCann v Parsons (1954) 93 CLR 418 at 430-431 (Dixon CJ, Fullagar, Kitto and Taylor JJ). Although Wollongong Corporation was not applied as determinative of a statutory scheme of appeals by way of rehearing under the Family Law Act 1975 (Cth), no doubt was cast on their application under the general law. The source of appeal in the present case is found in the Supreme Court Act, but there is no reason to doubt that the general law principles properly apply, in the absence of language in the statute suggesting otherwise.
Requirement of "special circumstances"
17 The Registrar accepted that "special circumstances" were required, pursuant to Part 51, r 16, if the Court were to order security for costs. He found such special circumstances on the basis of a number of submissions by the Respondents, but primarily, it would appear, on the basis that the appeal lacked sufficient prospects of success. It was accepted that the Appellant's impecuniosity, and the failure to pay outstanding costs orders, would not by themselves create special circumstances, but might indeed militate against an order for security if such an order would effectively stifle the Appellant's right to pursue a bona fide and arguable appeal. On the other hand, the fact that the Respondents would incur costs which would probably be unrecoverable, in addition to costs already incurred, was also a relevant consideration which justified the Court undertaking some assessment of the prospects of the appeal.
18 The principles governing applications for security were helpfully set out by Beazley J in the Federal Court in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197-198. Although the factors are discussed in the context of an unfettered discretion, in contrast to the power conferred by Pt 51 r 16, the factors themselves remain relevant in assessing special circumstances. The considerations engaged by the concept of "special circumstances" in relation to security for costs were considered by this Court in Transglobal Capital Pty Ltd v Yolarno Pty Ltd (2004) 60 NSWLR 143 (Beazley, Santow and Ipp JJA), and in Porter v Gordian Runoff Ltd [2004] NSWCA 171 (Bryson JA, Sheller and Giles JJA agreeing). The following principles were identified: