The adjournment application
27 The Court's discretion to adjourn proceedings is extremely broad. Section 33(1)(a) of the Act permits the Court at any time to adjourn any proceeding before it.
28 To succeed on an appeal from the exercise of a discretion an appellant must show error of the kind referred to in House v The King (1936) 55 CLR 499 at 504-5.
29 Ms Tarrant made a number of complaints about the federal magistrate's decision. Many of them misrepresent what his Honour actually said. Others have no bearing on the decision. None is meritorious.
30 In many cases where the claim is less than the amount of the judgment debt it is convenient to adjourn the proceeding to enable that litigation to proceed, provided the debtor has shown that she has "a real claim" to litigate: Re Schmidt; Ex parte Anglewood Pty Ltd (1968) 13 FLR 111 per Gibbs J at 116. "A real claim" is one of "sufficient integrity to warrant the debtor being given the opportunity to have it litigated": Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No 2) (1994) 51 FCR 14 at 22E. The fundamental problem Ms Tarrant faced is that no material was put to the federal magistrate to show that she had such a claim.
31 The argument advanced by Mr Catlin was that his Honour erred by failing to have regard Ms Tarrants affidavits, at least the one filed on 22 July 2011 in opposition to the petition. A failure to take into account relevant evidence is a House v The King error. The problem with the argument is that the affidavits were not in evidence.
32 Section 64(4) of the Federal Magistrates Act 1999 (Cth) ("FM Act") provides that, if a person makes an affidavit and a party proposes to adduce evidence by the affidavit, a party may request the person to appear as a witness to be cross-examined. There is no dispute that a request was made in this case and reasonable notice given. On 6 September 2011 the parties appeared before a registrar of the Court. Ms Tarrant was present on that occasion. The registrar made consent orders relating to the filing and service of evidence and submissions. The short minutes of order appearing on the Court file contain a note to the effect that Ms Tarrant would be required for cross-examination. No evidence was called to explain Ms Tarrant's absence. Her solicitor gave an explanation from the bar table. In substance, he said she was not able to get away from work. Nothing was said about the efforts, if any, she had made to do so but the date for hearing had been specially fixed and she knew her attendance was required. It is not clear from his Honour's reasons whether he accepted the explanation.
33 Section 64(6) of the FM Act provides that if a request is made under subs (4) and the person who made the affidavit does not appear for cross-examination, the Court is to give the matters in the matter such weight as the Court thinks fit in the circumstances. Neither of the lawyers appearing for the two parties drew the federal magistrate's attention to this section. In not allowing Ms Tarrant's affidavits to be read his Honour treated them as inadmissible. To this extent it may be argued that his Honour fell into error, but in circumstances where the deponent had been required for cross-examination, yet did not appear, the material would be entitled to little, if any, weight. In the circumstances, the outcome is likely to have been the same.
34 At common law there was no "right" to cross-examine a witness: see, for example, GPI Leisure Corp Ltd v Herdsman Investments Pty Ltd (No 3) (1990) 20 NSWLR 15 ("GPI Leisure") at 18, 22 per Young J in Eq; NMFM Property Pty Ltd v Citibank Ltd (No 8) (1999) 161 ALR 581; [1999] FCA 266 at [16] per Lindgren J (following Young J in GPI Leisure); LGM v CAM [2008] FamCA 185 at [207]-[208] per O'Ryan J. As Young J put it in GPI Leisure at 22, the only right was the right to a fair trial. But s 27 of the Evidence Act 1995 (Cth) provides that a party may question any witness, except as provided by the Act. That suggests that the Parliament's intention was to legislate for such a right: cf. Moore v Wilson [2006] FCA 79 at [76] where Mansfield J queried whether the common law position had been removed by s 27.
35 The right, of course, is not unfettered. But if a party wishes to cross-examine a witness on matters in dispute in the proceeding and gives reasonable notice of its intention to do so, it is an incident of the court's duty to provide a fair trial that, in general, that wish be respected. The right to cross-examine a witness has been described as "a fundamental element of litigation when conducted on affidavits or witness statements, not lightly to be set aside", all the more so when the witness is a party: Alexander v Jansson [2010] NSWCA 176 at [11]. There is old authority that evidence given by a party affecting another party is not admissible against that other party unless there is a right to cross-examine: Allen v Allen [1894] P 248 at 253. Nevertheless, courts have a discretion to admit affidavit evidence where the deponent is not available for cross-examination, even over objection. That discretion is incorporated into r 15.29A of the Federal Magistrates Court Rules 2001 (Cth) ("FMCR"). But no application was made in this case for the discretion to be exercised.
36 Mr Catlin did not argue that the affidavit should have been read in those circumstances, merely that his Honour should have considered the material because it was relevant and it had been filed.
37 The difficulty for Ms Tarrant, however, is that on the adjournment application Mr Pope not only did not read the affidavit, he did not invite the federal magistrate to have regard to it. He did not even tell his Honour what it contained. Indeed, he said (at T2/45):
There are, as I said your Honour, a number of affidavits but I don't think your Honour needs to look at those in relation to my application….we would only ask your Honour to read the affidavits if there's some factual mater that I put to you that is in dispute between myself and my opponent.
38 No such factual dispute was identified and later, after Statewide's counsel, Mr Cutler, addressed his Honour on the factual background, Mr Pope said:
I don't cavil with my friend's description of the facts.
39 A challenge to a judgment on the ground that the primary judge failed to take into account material in an affidavit that was not read and that he was not asked to read must inevitably fail.
40 Still, in spite of the way the case was run, Mr Catlin valiantly argued that his Honour should have taken it upon himself to read the affidavit. While that course was certainly open to his Honour, I fail to see how in not doing so it could be said that he fell into appealable error, particularly when objection would certainly have been taken. Mr Catlin also argued that, after he had refused the adjournment, his Honour should have reconsidered whether he should accede to it, although he was never asked to do so. Once again, while he might have done so of his own motion, he did not fall into error by not doing so.
41 Although he said nothing in support of them, Mr Catlin did not abandon Ms Tarrant's written submissions. It therefore remains necessary for me to deal with them. Ms Tarrant alleged there were 10 alleged errors in his Honour's 10 paragraph judgment. Each of them is misconceived.
42 The first alleged error is that in para 3 of his reasons the federal magistrate referred to the wrong date of the judgment upon which the petition was founded. That is quite true. He said there that the judgment was signed on 19 June 2009, when it was in fact signed on 17 June 2009. But the error is obviously a typographical one and it is of no consequence.
43 Secondly, Ms Tarrant submitted that his Honour's statement (in the same paragraph of his reasons) that the applicant filed her notice of motion to set aside the judgment 15 months after the judgment was given was an error because there was no evidence that she knew about the judgment until she was served with the bankruptcy notice on 21 October 2010. The fact is that the application was filed 15 months after the judgment. That she may not have known the judgment until much later does not invalidate the statement. In any event, Mr Pope made no such submission. And the only evidence to support the proposition was in Ms Tarrant's affidavit of 22 July 2011 to which his Honour was not taken. As it happens, however, it is untrue that Ms Tarrant did not know about the judgment until service of the bankruptcy notice. As Garling J pointed out in his reasons at [2011] NSWSC 144 at [5], she had solicitor and counsel appear for her before Adams J a week after the judgment to seek an extension of the stay.
44 Thirdly, Ms Tarrant contended that the federal magistrate was in error in not referring to the fact that Ms Tarrant was not present at the hearing of the application for leave to appeal and "unable to present her case". The failure to refer to Ms Tarrant's absence was not an appealable error. The federal magistrate was never told that the Court of Appeal dealt with her application in her absence. She had an opportunity to be heard and, as I have already mentioned, she had invited the Court of Appeal to deal with the matter in her absence.
45 Fourthly, Ms Tarrant asserted that the federal magistrate erred by noting that she had abandoned the application in the High Court and not referring to the fact that she had filed a summons for its reinstatement. This was no appealable error. His Honour did not, as Ms Tarrant implied, proceed on the basis that her application had been abandoned. He considered the application at [9] of his reasons.
46 Fifthly, Ms Tarrant submitted that the federal magistrate erred in not referring to the fact that on 12 July 2011 she had applied for the entry of judgment on her claim against Statewide. That submission must be rejected. The evidence about that was in her 22 July 2011 affidavit which, as I have said, was not read. Ms Tarrant's solicitor did not ask his Honour to even look at it. Further, no-one informed his Honour that Ms Tarrant had applied for the entry of judgment so his Honour can scarcely be criticised for failing to take that circumstance into account.
47 Sixthly, Ms Tarrant submitted that his Honour erred in relying on Mr Cutler's submission on the Anshun estoppel point "when that is not the case and no order to that effect had been made". Yet, no argument was advanced against the submission. It is immaterial that there has been no finding on the matter in the Supreme Court. In deciding whether there should be an adjournment, his Honour was entitled to consider whether there was merit in the pending Supreme Court proceeding.
48 Seventhly, Ms Tarrant submitted that his Honour erred in accepting Mr Cutler's submission that she had no actionable claim for loss of reputation. She said there was no evidence to support the finding. But his Honour made no such finding. He merely observed that it was unlikely she could recover $2.6 million for loss of reputation and hurt feelings, which was all that remained of the claim if the Anshun estoppel argument was right.
49 Eighthly, Ms Tarrant stated that his Honour erred in finding that she had made multiple applications to adjourn the hearing of the creditor's petition. He made no such finding.
50 Ninthly, Ms Tarrant submitted that his Honour erred by finding that the Court was entitled to be sceptical about the prospects of success of the "appeal" to the High Court when he had no evidence to support his scepticism. This submission must also be rejected. There was very good reason for scepticism. Mr Pope told his Honour he was "not in a position to go into the merits of the appeal" (T2/30) and did not do so. There is no appeal. Ms Tarrant first requires special leave. The special leave application seeks to overturn a discretionary judgment refusing leave to appeal. Mr Pope did not address his Honour on the errors, if any, in the Court of Appeal judgment. Neither did Mr Catlin on the appeal. The special leave point eludes me.
51 Finally, Ms Tarrant argued that the federal magistrate erred in finding that the pending Supreme Court proceeding would not be successful when she was already entitled to judgment and there was no evidence that the judgment would not be enforceable. His Honour did not find that the proceeding would not be successful. But in substance, it is fair to say, he doubted whether it had merit. As I said earlier, however, there was no evidence that Ms Tarrant was entitled to judgment.
52 Ms Tarrant's concluding plea was that the federal magistrate should have adjourned the proceeding to enable her to conclude her appeal in the High Court. In circumstances where the basis of the proposed appeal was never identified and no argument was put to suggest it had any merit, his Honour's decision to refuse the adjournment was neither unreasonable nor plainly unjust.
53 Ms Tarrant has not established that the federal magistrate's decision to refuse the adjournment was affected by appealable error. His Honour's discretion did not miscarry.