Thomas & Anor v Nedeljkovic [2004] NSWSC 524 | Case summary

JUDGMENT (Appeal from decision of Local Court Magistrate - refusal to grant an adjournment application) 1 MASTER: By summons filed 27 November 2003 the plaintiffs seek an order that the decision of Magistrate C Forbes in the Small Claims Division of the Local Court at Manly, proceedings No 905/2003 dated 31 October 2003 be set aside on the basis that the plaintiffs were denied natural justice. The plaintiffs relied on the affidavit of Lachlan McDonald McAuley sworn 23 March 2004. The first plaintiff is Sean Thomas. The second plaintiff is Dianne Thomas. The first and second plaintiffs were the defendants in the Local Court proceedings. The defendant is Kosta Nedeljkovic who was the plaintiff in the proceedings below. For convenience I shall refer to Mr and Mrs Thomas and the plaintiffs and Mr Nedeljkovic as the defendant. 2 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 69(2A) of the Local Courts (Civil Claims) Act 1970 (NSW) (the Act) allows an appeal to this Court from the Small Claims Division of a Court only on the grounds of lack of jurisdiction or a denial of natural justice. The only ground that is pressed in this case is a denial of natural justice. Section 69(4) of the Act provides that the court may determine an appeal by either (a) setting the judgment or order aside or (b) by varying the terms of the judgment or order or (c) by setting the judgment or order aside and remitting the matter for determination in accordance with the court's directions or (d) by dismissing the appeal. The onus lies on the plaintiff to demonstrate that there has been a denial of natural justice.

Local Court proceedings 5 In the Local Court proceedings the plaintiff (defendant in the current proceedings) claimed $9,366.69 for seven months unpaid rent being for the period December 2000 and January to June 2001, less an amount of $1,250.00 paid by the defendant in April, June 2001 and March 2003. The defendants filed a notice of grounds of defence denying that there were any monies owing. On balance, the Magistrate found in favour of the plaintiff and made an order for verdict in the sum of $9.366.69, plus the issue and service fee of $122.00. Interest was to be calculated by the Registrar from 15 December 2000. 6 At t 4.39 the following exchange took place: "BENCH: Thank you. Now I've read the defence and you rely on in support of your defence the statement by you. Now it says here the defendant claims an amount. There is no document in the Court proceedings where you are claiming an amount. You can't claim it by way of statement. You have to start proceedings to claim it. Have you filed a cross-claim? DEFENDANT SEAN THOMAS: Your Honour, we were told by the registrar here on 16 September in this very room for us to come before here furnishing copies to him on 28 October with details of what we sought in the area of compensation from the plaintiff for the five reasons that we have listed there before you. Now to this very minute we have done exactly what the Court had asked us to do. He said, the registrar requested us to come before here with a figure, a claiming figure amount for what we seek in compensation for being overcharged in rent, being misrepresented under Trades Practices section 45A of the Tenancies Act. That is what we were told to do by the registrar here on 16 September to come, furnish it on 28th and be here to answer questions for it on the day of the 31st." 7 The Magistrate then proceeded to explain that a cross claim is an actual Court document like a defence or statement of claim (t 5.15). The Magistrate asked whether the defendants would like her to adjourn the matter and get some legal advice. Mr Thomas replied "You can adjourn it, and we'll put it in as a cross-claim if you want" (t 5.26). Meanwhile, while the Magistrate interposed a matter she suggested that the Thomas's go and have a chat with the Chamber Magistrate. The Thomas's were free to get some advice while the Magistrate was dealing with this other matter. Later the court officer informed the Magistrate that the Thomas's were waiting to see the Chamber Magistrate. The Magistrate asked the court officer to tell them they had to come back (t 5.58). Mr Thomas again asked for an adjournment. At t 7.50 the Magistrate informed the parties that she was not going to adjourn the matter and proceeded to hear it. There were other requests for an adjournment after the Magistrate had decided not to grant the adjournment. 8 At t 11.38 the Magistrate stated: "Well Mr Thomas, that - these are small claims hearings and there's a certain practice directions of the court that these matters should start and begin and finish within a certain amount of time. There isn't usually adjournments granted. They're meant to be small matters, less than $10,000, come through and in the court quickly. You've been here, you've had an opportunity to get legal representation, you've told the court you'd finalised your pleadings on the last occasion, that the matter was ready to be dealt with. You've been to mediation. I mean, today's the day for this claim to be dealt with. If you want to bring a separate claim, you can bring that yourself on another occasion." 9 In Kojima Australia Pty Ltd v Australian Chinese Newspapers Pty Ltd [2000] NSWSC 1153 and Wakim v Mathiew Pty Ltd t/as Dove Migration Services [2002] NSWSC 405, O'Keefe J made the following observations: "20 The requirements of natural justice (or procedural fairness as it is now commonly referred to) apply to the Small Claims Division of the Local Courts. This is clear from the nature of the function to be performed by that tribunal and the statutory recognition that is afforded to natural justice by s 69(2A) of the Act. 21 The content of the requirements of natural justice is not fixed. The content fluctuates. The overarching requirement is that of fairness (National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR at 312 per Gibbs CJ with whom Brennan J agreed). For a court that normally involves a duty to: (i) act judicially; (ii) deal with the matter for decision without bias; (iii) give each party the opportunity of adequately presenting its case; (iv) observe the procedural and other rules provided for in the relevant statute; (v) come to its decision with that sense of responsibility that is the necessary accompaniment of the duty to do justice." 10 In Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951 Grove J stated at para 25: "There is ample authority that procedural fairness is denied if a decision maker fails to adjourn proceedings where such a failure has the effect of depriving a person of adequate opportunity to prepare or present a case: Sullivan v Department of Transport (1978) 20 ALR 323; Opitz v Repatriation Commission (1991) 29 FCR 50; Humphrey v Wills (1989) VR 439." 11 And in Titan v Babic & Ors (1994) 49 FCR 546 at 554-555 the Full Court of the Court of Australian Capital Territory stated: "Where it is apparent that a party who does not have legal representation has misunderstood procedural requirements so that he or she is not in a position to complete the presentation of evidence, an adjournment might be considered in the interests of justice provided that no irreparable substantive or procedural injustice is done to the other party involved. In any such case the granting of an adjournment will be a matter of discretion." 12 In Watson v Watson [1968] 2 NSWR 647 the Court of Appeal at 652 stated: "The principle is that it is a matter for the discretion of the trial judge whether judicially and not according to whim or fancy. Primarily a case should proceed to be heard when it comes into the list for hearing. When a case has been specially fixed for hearing at a date some months in the future then it cannot be said when both parties are present with their witnesses that a judge is wrong in law in exercising his discretion to refuse an adjournment at the request of one of the parties unless to refuse an adjournment would prejudice that party to the point that he has been denied justice, Walker v Walker , supra. Equally an adjournment should not be granted that would prejudice the other party." 13 In Bloch v Bloch & Anor (1981) 37 ALR 55 at 58-59 the High Court stated: "The decision whether to grant or refuse an adjournment lies in the discretion of the trial judge, and it is indeed seldom that an appellate court will feel justified in reviewing such a decision. In Maxwell v Keun [1928] 1 KB 645 at 653; [1927] All ER Rep 335 at 338-9, Atkin LJ stated the rule in terms which have won general acceptance: "I quite agree the Court of Appeal ought to be very slow indeed to interfere with the discretion of the learned judge on such a question as an adjournment of a trial, and it very seldom does do so; but, on the other hand, if it appears that the result of the order made below is to defeat the rights of the parties altogether, and to do that which the Court of Appeal is satisfied would be an injustice to one or other of the parties, then the Court has power to review such an order, and it is, to my mind, its duty to do so." cf also, Hayes v Hayes (No 1) [1934] St R Qd 219; Myers v Myers [1969] WAR 19; Walker v Walker [1967] 1 All ER 412." 14 And finally in Scott v Handley (1999) 58 ALD 373; [1999] FCA 404, the Full Federal Court stated at [29]: "For a judge to refuse an adjournment of the hearing of proceedings sought by the applicants on the day of the hearing on the basis that they are not in a position to proceed, and thereby to dismiss those proceedings, is a most significant step, not lightly to be taken. The refusal of an application for an adjournment may, in some circumstances, involve a denial of procedural fairness. In the absence of demonstrable prejudice to the respondents, why, it might be asked, can an adjournment on appropriate terms adequately protect the interests of those parties? (cf in the context of amendment, Cropper v Smith (1884) 26 Ch D 700 at 710-11 ; Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 . " 15 The plaintiffs submitted that they were denied natural justice, firstly, by being denied an adjournment to remedy the obvious misunderstanding of the procedural requirements even though it was pressed by the plaintiffs on six occasions; secondly, by being denied an adjournment to complete the presentation of their evidence; thirdly, by disregarding that the plaintiffs appeared in person and had not been advised by the Chamber Magistrate before the matter proceeded; fourthly, by not advising and by corollary denying the ability to amend the plaintiffs' cross claim while acknowledging a document entitled statement of cross claim had been filed; fifthly, by failing to correctly assess the respective prejudices of the parties and the legal criteria to be determined; and sixthly, by shutting the plaintiffs out from having their day in Court. The defendant submitted that the Magistrate was correct and that there is no denial of natural justice. 16 From the cases cited above, it is clear that the discretion of the Magistrate in refusing to grant an adjournment is not to be lightly interfered with. It is also accepted that the Small Claims Court is obliged to deal with claims quickly, that the parties had previously been to mediation and that the defendants had previously informed the court that they were ready to proceed with the matter. However, the Magistrate was aware that they had prepared a statement but had misunderstood the procedural requirements about filing a pleading, namely a cross claim. The Magistrate suggested an adjournment and referred the plaintiffs to seek advice from the Chamber Magistrate. But due to time constraints, they did not receive any such advice. When weighing up the considerations as to whether or not to grant an adjournment the Magistrate did not consider the prejudice that the plaintiffs would suffer as a result. The plaintiffs were effectively shut out of the proceedings because they had misunderstood the procedural requirements of the Small Claims Division of the Local Court. The possibility of a separate cross claim being brought by the defendant is not an ideal course of action because it may involve issue estoppel and res judicata arguments. The Magistrate did not sufficiently define the competing prejudices and conduct the balancing exercise essential to the proper putting into effect of her discretion to grant or refuse the adjournment application. Hence, it is my view that there has been a denial of natural justice. 17 The appeal is allowed. The judgment of the Local Court dated 31 October 2003 is set aside. The proceedings are remitted to the Local Court, Small Claims Division to be heard and determined according to law. 18 Costs are discretionary. Costs usually follow the event. The defendant is to pay the plaintiffs' costs as agreed or assessed.

Thomas & Anor v Nedeljkovic

At a glance

Court

Decision date

Source

Judgment (20 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (9)

Cited By (5)