75 Her Worship made no reference whatsoever during the course of her judgment to the Carden reports which formed such a significant aspect of the defence and cross-claim. Further, her Worship made no reference to the particular heads of alleged bad workmanship claimed by the defendants in their pleadings and evidence.
76 Her Worship clearly took the view that the defendants' lack of credibility (particularly that of Mr Slade) destroyed the cross-claim in toto.
77 However her Worship went much further and held that the cross-claim was prosecuted in bad faith, in order to intimidate the plaintiffs and to obviate the payment by the defendants of their debt to the plaintiffs.
78 It must be immediately noted however that (although their credibility was challenged in cross-examination) these serious allegations were never put to Mr or Mrs Slade during the course of the hearing. Thus they were denied the opportunity of responding to them. The defendants contend therefore that they were denied natural justice and procedural fairness.
79 The defendants also contend that they were denied natural justice and procedural fairness in a separate but associated respect.
80 It is contended that her Worship refused to allow defendants' counsel to call Mr Carden as a witness in their case, because she erroneously formed the view on 16 June 1999 that Mr Carden could give no relevant evidence. She expressed the view that: -
" Carden's evidence is scarcely worth the spit because your client told us all here in this Court room that he didn't call him in until 20 months after the event."
81 There was debate before this Court as to whether her Worship did in fact refuse to allow Mr Carden to be called as a witness. I am of the view, after due consideration, that this is a fair categorisation of what in fact occurred. .
82 Her Worship specifically said
"I'm saying don't call Mr Carden, it's not worth your while nor mine, that's what I'm saying. Anything he's going to say in this witness box will not assist the Court. I've already indicated that to you, will not assist the Court."
83 However, in the instant case I do not think anything really turns on this categorisation, despite the forceful submissions by Ms Healey to the contrary. No responsible counsel could have contemplated calling Mr Carden in the circumstances in which Mr Reuben found himself.
84 The defendants were, in my view, clearly entitled to call Mr Carden. His evidence would have been relevant to the question whether the delay of twenty months between the installation of the relevant works and his inspection undermined the validity of his criticisms of the plaintiffs' workmanship. Further, the defendants were entitled to the benefit of the responses by Mr Carden to Mr Gea's rejection of his criticisms in the reports. Further, the defendants were entitled to lead Mr Carden's evidence of an expert nature in relation to matters which had been ventilated during the hearing such as the qualities of timber generally and the quality of the timber provided by the defendants specifically
85 It is not without significance that her Worship expressed the following view in her judgment: -
"Much of the cross-examination of the Plaintiff was based on a misunderstanding of the nature and quality of natural timber, the effects on it of a variety of factors, especially the effect of substantial weight such as granite tops; natural earth movement, and the like."
Those are all matters upon which Mr Carden could have given relevant evidence.
86 With due respect to her Worship's views, the consequence of her refusal to allow the defendants to call Mr Carden is that they were denied a fair hearing, and consequently the trial miscarried.
87 This conclusion is reinforced by the fact that her Worship makes no reference in her judgment to the Carden reports, nor to any of the specific matters raised in the defence and the cross-claim by reference to the content of the Carden reports.
88 Indeed, as I have indicated, her Worship went further, expressing the view that the cross-claim was prosecuted by the defendants in bad faith, in order to intimidate the plaintiffs and obviate the payment of their debt to the plaintiffs.
89 This was a serious denial of natural justice as the defendants have become, by the last paragraph of the judgment, the subject of a judicial finding that they had conducted themselves in a disgraceful fashion without ever having been given the opportunity to deal with the allegations inherent in that finding.
90 It must not be overlooked in this context that if Mr Carden's evidence had been received it may well have supported the credibility of one or both defendants.
91 It is convenient now to refer to certain of the authorities.
92 A particularly relevant authority is Mahon v Air New Zealand Ltd [1984] AC 808.
93 This case arose out of the crash of an Air New Zealand (hereinafter "ANZ") aircraft into the slopes of Mount Erebus in Antarctica, resulting in the death of all persons on board. The New Zealand Government appointed Peter Thomas Mahon, who was then a Justice of the High Court of New Zealand, to act as a Royal Commissioner to enquire into the crash. Briefly stated, Mahon J found that the dominant cause of the crash was incompetence by ground personnel of ANZ. This finding differed from the conclusion reached by the Chief Inspector of Accidents of New Zealand, that the accident was due to pilot error.
94 In his report, Mahon J found that "palpably false evidence" was given by officials of ANZ as part of a pre-determined plan of deception of the Royal Commission and in an attempt to conceal a series of disastrous administrative blunders. Mahon J described their evidence as an "orchestrated litany of lies" and made an order that ANZ should pay $150,000 towards the cost of the Royal Commission.
95 ANZ applied by motion to the High Court of New Zealand for an Order of Judicial Review of the finding that ANZ officials had entered a conspiracy to commit perjury, and of the costs order. The application, very briefly stated, was based upon the assertion that certain of the alleged misconduct upon which Mahon J had relied had not been put to the ANZ witnesses during the hearing. The motion was removed from the High Court to the Court of Appeal of New Zealand, which held that in making the order for costs, the Judge had acted in breach of procedural fairness: see [1981] 1NZLR 618.
96 Mahon J appealed to the Privy Council which rejected the appeal. The judgment of their Lordships is instructive with regard to the rules of natural justice. The judgment of their Lordships was delivered by Lord Diplock: see [1984] 1 AC 808. At pages 820/821 his Lordship said: -
The rules of natural justice that are germane to this appeal can, in their Lordships' view, be reduced to those two that were referred to by the Court of Appeal of England in Reg. v. Deputy Industrial Injuries Commissioner, Ex parte Moore [1965] 1 Q.B. 456, 488, 490, which was dealing with the exercise of an investigative jurisdiction, though one of a different kind from that which was being undertaken by the judge inquiring into the Mt. Erebus disaster. The first rule is that the person making a finding in the exercise of such a jurisdiction must base his decision upon evidence that has some probative value in the sense described below. The second rule is that he must listen fairly to any relevant evidence conflicting with the finding and any rational argument against the finding that a person represented at the inquiry, whose interests (including in that term career or reputation) may be adversely affected by it, may wish to place before him or would have so wished if he had been aware of the risk of the finding being made.
The technical rules of evidence applicable to civil or criminal litigation form no part of the rules of natural justice. What is required by the first rule is that the decision to make the finding must be based upon some material that tends logically to show the existence of facts consistent with the finding and that the reasoning supportive of the finding, if it be disclosed, is not logically self-contradictory.
The second rule requires that any person represented at the inquiry who will be adversely affected by the decision to make the finding should not be left in the dark as to the risk of the finding being made and thus deprived of any opportunity to adduce additional material of probative value which, had it been placed before the decision-maker, might have deterred him from making the finding even though it cannot be predicted that it would inevitably have had that result.
97 The principles cited above have, of course, the same force in curial proceedings as in Royal Commissions and other forms of inquiry.
98 It is apt to refer to the following passage from the judgment of the Court of Appeal in Regina v Deputy Industrial Injuries Commissioner, Ex parte Moore: [1965] 1 Q.B. 456 at 490. This is a passage from the judgment of Diplock L.J. (as he then was) sitting as a member of the Court of Appeal.
99 At page 490, his Lordship said: -
"Where, however, there is a hearing, whether requested or not, the second rule requires the deputy commissioner (a ) to consider such 'evidence' relevant to the question to be decided as any person entitled to be represented wishes to put before him; (b) to inform every person represented of any 'evidence' which the deputy commissioner proposes to take into consideration, whether such 'evidence' be proffered by another person represented at the hearing, or is discovered by the deputy commissioner as a result of his own investigations; (c) to allow each person represented to comment upon any such 'evidence' and, where the 'evidence' is given orally by witnesses, to put questions to those witnesses; and (d) to allow each person represented to address argument to him on the whole of the case. This in the context of the Act and the regulations fulfils the requirement of the second rule of natural justice to listen, fairly to all sides (see Board of Education v Rice [1911] A.C. 179, 182)." (My emphasis).
100 Stead v State Government Insurance Commission (1986) 161 CLR 141, is also relevant to the instant case. The appeal in this matter to the High Court flowed from an action in negligence arising out of a motor accident which was heard in the Supreme Court of South Australia. The only issue before the trial Judge was that of damages. Part of the plaintiff's claim was for a neurotic condition, which the plaintiff claimed was a direct consequence of the defendant's negligence. The defendant called a psychiatrist, Dr. Scanlon, who gave evidence to the effect that the accident had nothing to do with the neurotic condition.
101 At the completion of the evidence the plaintiff's counsel commenced a submission that the trial Judge should not accept Dr. Scanlon's evidence that the accident had nothing to do with the neurotic condition. This elicited from his Honour the comment:
"Alright. I don't accept Dr. Scanlon on that. You needn't go on as to that."