COUNCIL OF THE CITY OF SYDNEY vy EX-SERVICEMAN'S CAR LAUNDRY PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MAHONEY and MCHUGH JJA 16 May 1988 10 [1988] NSWCA 30 PRACTICE & PROCEDURE — summary dismissal of appeal — motion for proper approach to differing views expressed by members of the Court. JUDGMENTS & ORDERS summary dismissal of appeal as incompetent — motion for — proper 15 approach to — Held: per Kirby P and Mahoney JA; McHugh JA contra: Summary dismissal of appeal as incompetent is inappropriate if there is a seriously arguable issue for hearing on the appeal; per McHugh JA: Such applications should be determined on their merits. Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 91; General Steel Industries Inc y Commissioner for Railways (NSW) (1984) 112 CLR 125, 130 referred to. DISTRICT COURT — summary judgment under Ptl1A r 2(1) District Court Rules — whether appeal lies to Supreme Court — whether judgment "in an action" — whether a "new trial" could be ordered — motion for summary dismissal of appeal — held: (per McHugh JA; Kirby P and Mahoney JA reserving their concluded opinion to the hearing of the appeal): appeal is competent. Fraser Credits Pty Ltd v Osterberg Olsen [1978] 1 NSWLR 121 distinguished 25 WORDS & PHRASES — "new trial", "in an action'. District Court Act 1973, s128, s130. Supreme Court Rules, Pt51 r 17A. District Court Rules, Pt11A r 2(1); r2(3). Kirby P The claimant moves the Court pursuant to Pt51 r 17A of the Supreme Court Rules for an order that a purported appeal lodged by the opponent be 30 dismissed as incompetent on the ground it does not fall within the provisions of $128 of the District Court Act 1973 (the Act) or is otherwise incompetent. Entry of summary judgment in the District Court The claimant is a local government authority seeking to recover unpaid rates from the opponent which has premises in the area of the claimant's authority. The 35 amount of the debt is alleged to be $114,155.76. That is the amount of a judgment entered by his Honour Judge Downs in the District Court. The claimant had issued a statement of liquidated claim on 13 March 1986. It moved the District Court on 18 March 1988 for summary judgment. It sought the entry of such judgment pursuant to Ptl1A r 2(1) of the District Court Rules made under the 40 Act. The sub-rule provides;- "Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff - (a) there is evidence of the facts on which the claim or part is based; and (b) there is evidence given by the plaintiff or by some responsible person that, in the 45 belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed, the Court may, at any time, give such judgment for the plaintiff on that claim or part as the nature of the case requires. The claimant put before Judge Downs evidence to show that the rates were 50 payable by the opponent, that notice had been served, and that the rates remained unpaid. So much is recorded in his Honour's judgment. 2 UNREPORTED JUDGMENTS Belatedly the opponent was given leave by Judge Downs to file a defence to the claim. It did not seek to cross-examine any of the deponents who had sworn affidavits read in the proceedings nor to ask questions of witnesses who had given evidence before his Honour. Instead, the opponent admitted the corporate status of the claimant but otherwise neither admitted nor denied its claims. It denied that rate notices had been served but, as his Honour recorded, no cross-examination was directed to any of the claimant's witnesses on this issue. As Judge Downs put it, the opponent simply said, "Prove your case". In the face of the evidence, the statement of defence, and this conduct of the opponent's case, it was therefore perhaps not surprising that Judge Downs concluded:- Iam not satisfied with the conduct of the defendant in these proceedings and I find that the plaintiff, the applicant, has demonstrated pursuant to Ptl1A r2(1)(b) that the defendant has no defence to this claim. Perhaps I should stress that the defence before me was only presented this morning, two years approximately after the statement of claim. I therefore am satisfied that the plaintiff is entitled to summary judgment and is entitled to summary judgment in the amount claimed particularly having regard to the affidavits filed today. Judge Downs proceeded to enter judgment for the claimant in the sum of $114,155.76, He ordered interest and that the opponent pay the claimant's costs. Challenge to purported appeal as of right The opponent has appealed to this Court by a notice of appeal dated 15 April 1988. In that notice the opponent seeks an order for the setting aside of the summary judgment and that the action be remitted to the District Court. No other substantive relief is sought. The three grounds upon which the opponent rests its appeal are repetitious. However, they appear to involve the same point, namely, that there was a triable issue before Judge Downs and that his Honour erred in holding that there was evidence before him to enable summary judgment in favour of the claimant to be entered. The only present question for this Court is whether this purported notice of appeal is incompetent. The answer to that question is to be found in the provisions of the Act and the Rules of the District Court. $128(1) of the Act provides an apparently wide ambit for appeal to the Supreme Court. "128(1) Except in the case of an action in the nature mentioned in subs2, an appeal shall, subject to s129 and s130, lie to the Supreme Court from the ruling, order, direction or decision of the Judge in point of law, or upon the admission or rejection of any evidence, in an action commenced before the commencement of s3(u) of the District Court (Amendment) Act 1975." S130 of the Act provides relevantly:- (1) An application under s127 may be made or an appeal under s138(1) or (2A) lies (a) Where the application or appeal involves directly or indirectly any claim, demand or question to or respecting any property or any civil right amounting to or of the value of... (ii) in the case of an action commenced on or after Ist April, 1975, but before the commencement of Schedule 1(3) to the District Court (Amendment) Act 1982 - $3,000 or upwards; as of right; or (b) in any case - by leave of the Supreme Court. \WRQUNCIL OF THE CITY OF SYDNEY v EX-SERVICEMAN'S CAR LAUNDRY PTY LTB (Kirby P) No leave to appeal was sought by the opponent. It asserts an appeal as of right, having regard to the amount ordered to be paid by the judgment entered by Judge Downs. Is a "new trial" possible without a "trial"? The claimant's arguments on this motion are essentially two. The first is that the circumstances in which appeals lie to the Supreme Court from the District Court, whatever amount is at stake, are limited to those for which relief is contemplated as set out in s128(3) of the Act. Clearly this is not a case where a non-suit should have been ordered (para (a)) nor where the opponent was entitled, as a matter of law, to a verdict in the action (para (b)). So much was not argued by the opponent. The case therefore falls to be considered within the relief contemplated by s128(3)(c) of the Act. This provides:- (3) In an appeal under subs1, subs2 or subs2A the Supreme Court -... (c) may order that a new trial of the action or of any issue therein be had, The claimant says that by definition there has not been a "trial" of the action. Hence it was argued that there can be no "new trial". It argues therefore that s128 of the Act does not apply and consequently that an appeal does not lie to this Court. I do not agree. Although the trial before Judge Downs was attenuated in the course which his Honour took in entering summary judgment, it was nonetheless in my opinion sufficiently a "trial" to permit a new hearing pursuant to s128(3)(c) to be described as a "new trial". I do not consider that this involves a strained interpretation of the Act nor one involving any distortion of the language used. This ground of objection to the competence of the appeal therefore fails. Is this a judgment "in an action'? Secondly, the claimant asserted the the judgment of Judge Downs was interlocutory only because it was liable to be set aside under Pt11A 12(3) of the District Court Rules. That sub-rule reads:- "A judgment under this rule may, on sufficient cause being shown, be set aside, on terms, by order of the Court." This Court has held that, ordinarily, a right of appeal does not exist from rulings and orders made in the case of District Court proceedings otherwise than those disposing of "an action". Usually such orders and rulings are interlocutory. See Fraser Credits Pty Ltd v Osterberg Olsen [1978] 1 NSWLR 121, 122. Some observations have been made in decisions of this Court questioning the ambit of the principle in Fraser Credits. See eg Rogers & Anor v Council of the Sire of Eurobodalla unreported, CA, 11 August 1987; (1987) 75 WN 181. There is presently, as the Court is aware, a foreshadowed application for leave to re-argue the correctness of Fraser Credits and the scope of its application. A number of cases await that consideration. On the other hand, Fraser Credits has been applied in many cases in the Court, including recently. See eg Paraharalambous v Champion Spark Plug Co Aust) Pty Ltd, unreported, CA, 6 December 1985; (1986) NSWJB 4. In Crop and Fuel Services Pty Ltd v Ellifam & Ors, unreported, CA, 27 November 1986 (1986) NSWJB 457 the Court denied an application for leave to re-argue the principle there stated. This case would not be an appropriate vehicle to permit its reconsideration. This is so because reconsideration does not appear to be necessary in the circumstances of this case. In my present view the decision in Fraser Credits is distinguishable. That was a case where the decision was disposed of on the basis that the order challenged was ancillary to the action and not one "in an action" as explained by the Court in that case. Here, however, the order challenged is 4 UNREPORTED JUDGMENTS arguably the final disposal of the whole action and in that sense was made "in an action". Accordingly, it is distinctly arguable that Fraser Credits would not debar the appeal which the opponent otherwise has as of right having regard to the amount which is directly involved and which is much more than $3,000 provided in s130 of the Act. An arguable case makes dismissal for incompetence inappropriate As there is an arguable ground for distinguishing Fraser Credits, and a seriously arguable issue to be canvassed on appeal, the case is riot one, in my opinion, for the relief which the claimant has sought. The fact that the judgment might be classified as interlocutory, a notoriously imprecise classification, is irrelevant. This was finally conceded by counsel for the claimant. The fact that the District Court Rules provide an alternative method of review by setting aside by the District Court of judgments entered in this way cannot and does not exclude the statutory right of appeal which s128 of the Act, in concert with s130, arguably provides. Whatever may be the practice elsewhere, I do not consider that the peremptory relief provided for in PtS1 R 17A of the Supreme Court Rules should be extended unless the entry of judgment which follows dismissal of an appeal as incompetent is clearly warranted. If there is an arguable case for hearing on the appeal, that hearing should generally take its normal course. A case must always be very clear before a court is authorised to exercise its jurisdiction to deprive a party of the opportunity of submitting its case for determination on the merits in the normal way. Cf Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 91. This is as true of the relief sought by the claimant in the present proceedings as in motions for the entry of summary judgment for want of an arguable issue for trial. Argument, even extensive argument, may sometimes be needed to lay the ground for the relief sought. That fact is no disqualification for such orders. See eg Barwick J's comments in General Steel Industries Inc v Commissioner for Railways (NSW) (1984) 112 CLR 125, 130. However, in the nature of the busy motion list of this Court, there is a limit to the extent to which the Court should permit a party with a case involving a serious argument to jump the queue for the hearing of an appeal in the normal way and to deprive its opponent of the opportunity of a fully considered hearing on the merits. The course which is appropriate depends upon the particular circumstances of the case. Suffice it to say that in this case I am of the view that the claimant's objection to the competency of the opponent's appeal has not been shown to be sufficiently clear to authorise the Court to deny the opponent of the opportunity of a hearing on the merits. Accordingly the summons for dismissal of the appeal as incompetent must be refused. The claimant must pay the costs of the summons. Expedition of hearing to conclude proceedings Having said this, the record of the litigation appears to show a dilatory resistance to the claimant's claim by the opponent and an apparently limited resistance to the claimant's case. Judge Downs found the opponent's case to have no merit. Whether this is so or not will be finally determined upon the appeal. No stay has been sought of the execution of the judgment of Judge Downs. The appropriate way in this case to ensure that the matter is brought promptly to conclusion is to order the expedition of the hearing of the appeal. The parties do not seek to argue against such a course. \WRQUNCIL OF THE CITY OF SYDNEY v EX-SERVICEMAN'S CAR LAUNDRY PTY LTB (McHugh JA) The further orders which I would therefore propose are that the appeal be brought on for hearing on Wednesday 8 June 1988; that the opponent file a collection of papers in lieu of an appeal book by Wednesday | June 1988 at 4.00 p.m. and serve the same by that time and that written submissions be filed by both parties in accordance with the Rules. Mahoney JA I agree with the orders which have been proposed by the President. The only basis on which the application was put, and properly so, was that what was sought did not as a matter of construction fall within s128 of the District Court Act and so the appeal, although it may lie, cannot succeed. Whether this is so is a matter on which I express no final view. But the matter is in my opinion arguable to the extent that I do not think the appeal should be dealt with on a summary application such as this to strike out the appeal. The fact that I am of this view does not detract from the fact that the issues involved are of some complexity. The fact that the Court did not call upon the respondent to this application does not suggest otherwise. It is I think due to the fact that the matter on each side has been so fully put by counsel for the applicant. I agree with the orders proposed. McHugh JA I also agree with the orders proposed but I reach my conclusion by adifferent route from that taken by Kirby P and Mahoney JA. This is a motion to strike out an appeal on the ground of incompetence. Mr Whittle submitted, correctly in my opinion, that the matter is to be determined on its merits and not on the basis that the right of appeal was arguable. It seems to me that in principle this is correct. In the High Court applications to strike out appeals on the ground that they are incompetent under the Judiciary Act 1903 are frequently made by way of notice of motion. The notice of motion is dealt with on the merits and not on whether or not the point is arguable. Pt5 r 17A of our Rules is similar to 0.70 r8 of the High Court Rules. Approaching this motion on the basis that the case must be determined on its merits, I am of the opinion that the appeal is competent. The reasons for judgment of Judge Downs contain an order entering judgment for the plaintiff in the sum of $114,155.76 plus interest from 1 January 1987 at rates provided by the Local Government Act 1919. This seems to me to be an order "in an action" within the meaning of s128(2A) of the District Court Act 1974. In that respect the present case is distinguishable from the decision in Fraser Credits Pty Ltd v Osterberg Olsen [1978] 1 NSWLR 121, and other cases which have come before the Court of Appeal in recent years such as Paraharalambous v Champion Spark Plug Co (Aust) Pty Ltd, Court of Appeal (unreported), 6 December 1985; Crop and Fuel Services Pty Ltd v Ellis, Court of Appeal (unreported) 27 November 1986; Stuart Earl (Real Estate) Pty Ltd v Baines, 25 March 1988 (unreported) Court of Appeal. Indeed the argument for the claimant in the form in which it was finally put to the Court conceded that prima facie the present order was an order "in an action" within s129(2A). However, Mr Whittle submitted that when regard is had to s128(3), the prima facie meaning of the words "order.....in an action" in s128(2A) must be read down to exclude the present case. Mr Whittle pointed out that the only arguably relevant order which could be made in the present appeal, if it was competent, was that contained in s128(3)(c). That paragraph provides that in an appeal under subs(2A) the Court may order that a new trial of the action or any issue therein be had. 6 UNREPORTED JUDGMENTS Mr Whittle submitted that an order for summary judgment is not an order in the trial of an action and therefore it would not be possible for this Court to order a new trial of the action to take place. He pointed out that the provisions of ptl1A of the District Court Rules dealing with summary judgment distinguish between the hearing of an application for summary judgment and the trial of an action. I think that Mr Whittle's point is well taken and that a hearing in an application for summary judgment is not the trial of an action. However, it does not follow that, if this Court was to order a further hearing or a new trial of the application for summary judgment, it would not be making an order for "a new trial of the action" within the meaning of s128(3)(c). True it is that the literal meaning of the words "a new trial of the action" suggests the second trial of an action after a previous trial. By trial, I mean a contested hearing of issues of fact and law upon evidence. However, ascertaining the ordinary grammatical meaning of a legislative provision is only the first step in the process of statutory construction. If the consequences of the literal or grammatical construction raise a real doubt as to Parliament's intent, the Court is justified in refusing to give the words their literal or grammatical construction. See Kammins Ballrooms Co Ltd v Zenith Investment (Torquay) Ltd [1971] AC 850 at 879; Cooper Brooks Wollongong Pty Ltd v Federal Commissioner of Taxation (1980) 147 CLR 297 at 320-1. In the present case it seems to me that Parliament intended subs(2A) of s128 to cover a case such as the present. It would be odd indeed if Parliament intended that a case within the section was nevertheless to be excluded because of the form of the order which this Court has the power to make. It is well established that, where the purpose of legislation requires a particular meaning to be placed on words to give effect to the legislative purpose, it is legitimate for the Courts to do so. Thus in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd to which I earlier referred, the House of Lords held that the words: "No application....shall be entertained unless..." meant that some applications could be entertained although the "unless" clause was not satisfied. In Adler v George [1964] 2 QB 7 the Divisional Court held that the words: "in the vicinity of any prohibited place" meant "in or in the vicinity of any prohibited place". Illustrations might be multiplied. Fifty years ago in Sutherland Publishing Co Ltd v Caxton Publishing Co Ltd [1938] Ch 174 MacKinnon LJ said (at p 201) that when the purpose of an enactment is clear it is often necessary to put a strained interpretation upon words which have been inadvertently used. In the present case I would take the view that Parliament did not intend the words "order that a new trial of the action" be read so literally that it required that there be a trial upon evidence before the Court had power to entertain an appeal under s128(2A). There is nothing inherently wrong in construing the words "order that a new trial of the action" in, par (c) of subs(3) as meaning "order a second hearing of the action". Accordingly in my view the appeal is competent. It follows that the motion fails. I therefore agree with the orders proposed by the learned President. 1. Motion dismissed with costs. 2. Hearing of appeal expedited and set down on 8 June 1988. 3. Opponent to file a collection of papers in lieu of an appeal book by 1 June 1988 at 4.00 p.m. 4. Written submissions ordered.