HARRIS v LEANEY SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, SAMUELS and HANDLEY JJA 26 June 1991, 3 July 1991 [1991] NSWCA 145 INFERIOR COURTS — District Court — certiorari — natural justice — procedural fairness — suggested reasonable apprehension of bias in a fair-minded observer — motion for dismissal of damages proceedings in a motor accident case for want of provision of reasonable particulars to the insurer in a motor accident case — trial judge (Madgwick DCJ) finds plaintiff failed without reasonable excuse to comply with s48 Motor Accidents Act 1988 requiring compliance with a reasonable request for particulars by insurer — judge strikes out proceedings and reinstates them and orders insurer to pay costs — on summons for judicial review — held: (1) (per (Kirby P) There was power in the District Court Act and Rules for the judge to make the orders striking out and reinstating the proceedings and as to costs which he made; (2) (by the Court) But in doing so, the judge had failed to accord procedural fairness to the claimant in the conduct of the proceedings and in making orders without first giving the claimant the opportunity to be heard. Escobar v Spindelori (1986) 7 NSWLR 51, 57 applied; (3) (by the Court) It was therefore necessary to provide relief and unnecessary to determine the complaint of reasonable apprehension of bias. Vakauta v Kelly (1989) 167 CLR 568; Galea v Galea (1990) 19 NSWLR 263, 281 refd to; (4) Order for certiorari issued and orders of District Court quashed. MOTOR VEHICLES — motor accident — Motor Accidents Act 1988 as amended in 1989 and 1990 — duty of claimant to cooperate with insurer — duty to provide reasonable particulars on request — consequence of non-compliance whether reasonable excuse — purpose of provisions — criticism of provisions by trial judge — motion for dismissal of proceedings in District Court — judge strikes out proceedings but reinstates same — challenge by judicial review — held: (1) (per Kirby P) The judge had the power to make the orders he did; (2) (by the Court) However, in the circumstances he failed to accord procedural fairness and the orders must be quashed. JUDGES — duty to accord procedural fairness — reasonable apprehension of bias — robust expression of views about legislation — whether orders disposing of proceedings as to costs affected — whether interventions excessive. Galea v Galea (1990) 19 NSWLR 263, 281 — whether waiver of complaint. Wentworth v Rogers (No 12) (1987) 9 NSWLR 400, 422 consd. WORDS and PHRASES — "without reasonable excuse". District Court Act 1973, s148B(1). Motor Accidents Act 1988, s43 and s48. Motor Accidents (Amendment) Act 1990, s3, Sch1, CL17, CL18. District Court Rules, Pt1 r5A; Pt16 r6(1); Pt26 r5B. Kirby P In these proceedings for judicial review Mr Stephen Harris (the claimant) seeks orders to quash or set aside certain orders made by Madgwick DCJ in the District Court (the second opponent). Those orders were made in respect of a statement of claim filed on behalf of Mr Peter Leaney (the first opponent) claiming damages for personal injuries arising out of a motor accident. The second opponent submitted to the orders of this Court. The first opponent supported the orders made by his Honour. The claimant urged that those orders were invalidated because made (1) without power; (2) in breach of the rules of 2 UNREPORTED JUDGMENTS natural justice; and (3) in circumstances giving rise to a reasonable apprehension of bias on the part of his Honour. Particularisation of a motor accident claim. The first opponent sustained injuries on 15 April 1988. He alleges that his injuries were caused by the fault of the claimant, who is insured by the Government Insurance Office of New South Wales (GIO). At the time the first opponent was injured the Motor Accidents Act 1988 (the Act) was in force. The Motor Accidents (Amendment) Act 1990 treats the case as an intermediate transport accident". See ibid s3, Schl, CL17, CL18. The first opponent's injuries arose in a "motor accident" within the meaning of that term as defined in s3(1) of the 1988 Act. Under s43(1) of the Act, a claim in respect of such a motor accident must be made within six months after its date. By s43(2) of the Act it is provided: "43(2) If a claim is made more than 6 months after the date determined under this section, the claimant shall provide a full and satisfactory explanation for the delay in making the claim." By s43(4) of the Act notice of such a claim is required to be given to the person against whom the claim is made and his insurer. The first claim received by the GIO, as insurer for the claimant, in respect of the first opponent's motor accident was received on 26 June 1989. It was thus well outside the six months period provided by s43(1) of the Act. The GIO, on 19 July 1989 requested particulars of the claim from the first opponent's solicitors. On 2 January 1990 the GIO advised those solicitors of the obligation imposed by s43. Shortly thereafter it requested further particulars. On 9 March 1990, a still further request for particulars was sent by the GIO to the first opponent's solicitors drawing attention once again to the provisions of the section. On 20 March 1990 certain particulars were supplied by the solicitors. However, the GIO contended that these were incomplete. Notwithstanding this contention, on 20 June 1990 the solicitors filed a statement of claim on behalf of the first opponent in the District Court. This prompted a request on 1 August 1990 by the GIO for the discontinuance of the proceedings. The solicitors for the first opponent responded, advising that they were using their best endeavours to secure the particulars required. They asked the GIO to take no action to force discontinuance. Further letters were exchanged and on 30 August 1990 further particulars were supplied in response to the GIO's request. The GIO contended that these particulars were still incomplete. In furtherance of this contention, on 12 September 1990 the solicitor for the GIO (Mr B Ramrakha) filed a Notice of Grounds of Defence in the District Court. Amongst the defences was one based upon the alleged failure of the first opponent to cooperate with the GIO as the claimant's insurer. This notice was accompanied by a notice of motion for the dismissal of the proceedings upon the ground of non-cooperation. It was this notice of motion which came before Madgwick DCJ on 23 November 1990 in the motion list of the District Court. It may be inferred that this is a busy list, as motion lists typically are. The case was heard on a Friday, shortly before the luncheon adjournment. The record of what occurred covers but eight pages of transcript. It concludes with the orders which are the subject of the challenge in this Court. A Statutory duty to cooperate The linchpin of the claimant's application in the District Court was the provisions of s48 of the Act. That section as amended by the Motor Accidents (Amendment) Act 1989 reads: "48(1) A claimant must co-operate fully in respect of the claim with the person against whom the claim is made and the person's insurer. URJ HARRIS v LEANEY (Kirby P) 3 (2) In particular, the claimant must comply with any reasonable request by the other party or the other party insurer - (a) to furnish specified information (in addition to the information furnished in the claim form) or to produce specified documents or records; or (b) to provide a photograph of and evidence as to the identity of the claimant. (3) The duty under this section applies only until court proceedings are commenced in respect of the claim but if the claimant fails without reasonable excuse to comply with this section, court proceedings cannot be commenced in respect of the claim while the failure continues. " Immediately after the hearing of the motion commenced before Madgwick DCJ, it became apparent from his Honour's comments that he did not consider that the obligations imposed by s48 were sensible but believed that they were liable to be misused by the GIO to the disadvantage of unfortunate persons injured in motor accidents. He described a request for particulars of the plaintiff's employment over the last four years prior to the accident as outrageous. Before Mr Ramrakha could outline the grounds for the motion his Honour (on the first page of the transcript) observed: HIS HONOUR: This is just nonsense. Mr Ramrakha, the matter is in the hands of solicitors, they were cooperating. I mean if we are going to have this, the Court will be inundated. I do not know what the costs position will be but I thought that the GIO might have been keen to see this work in a practical and commonsense way. Now on the face of it from what I have been told it does not sound to me that there has been anything unreasonable. What are they to do? Hang around for years? Like when the GIO made a practice with inexperienced solicitors, particularly in the country, these were cases that I saw after six years negotiations, when finally the solicitors would get around to want to put on a statement of claim, the GIO would write and say 'you are out of time'." Later his Honour castigated the claimant's request for particulars as "ridiculous". He made it plain that his preliminary view was that a broad view should be taken of what constitutes a "reasonable excuse" under s48(3) of the Act. Had he persisted in that view, and given effect to it by dismissing the motion, it is unlikely that this Court would have been troubled by the present proceedings. But he did not. It is convenient to refer in passing to the object of s48(3). It emerges clearly enough from the provisions of the section. From those provisions it is tolerably plain that Parliament was endeavouring to promote pre-litigation settlement in motor accident cases. For that purpose, reasonable requests for particulars, effectively by the insurer, were to be answered. Until answered, except where a reasonable excuse justified that course, court proceedings were not to be commenced. This meaning of s48 of the Act is confirmed by the Second Reading Speech of the Attorney General (Mr Dowd) in support of the Bill which became the Act. See New South Wales Parliamentary Debates Legislative Assembly), 29 November 1988, 3827, 3831: "Pt5 seeks to continue the emphasis commenced under TransCover of making aclaim shortly after the accident. Under this scheme, it will be necessary to moke a claim on the third party insurer before proceedings can be commenced. In many cases, this will remove the need for litigation completely, as the insurer will have the opportunity to determine liability and assess the level of damages to be provided. Under CL45, there will be a duty on the insurer to endeavour to resolve the claim quickly, and once liability has been admitted the insurer must 4 UNREPORTED JUDGMENTS commence payments in respect of out-of-pocket expenses. CL48 to CLS0 seek to introduce new requirements whereby the claimant is to provide all necessary information to enable the claim to be properly assessed, and the person responsible for the accident will be required to assist the insurer to defend the proceedings if liability is to be disputed... Where Court proceedings are commenced, CL56 will provide for cost penalties in cases where an offer has been made and rejected, and the party rejecting the offer does not achieve a better result from a full hearing of the matter. Cost penalties have not operated effectively in the past, and it is the intent of this legislation that they provide a real penalty against unnecessary litigation." Given therefore such purposes of the Act it is the duty of courts to give effect to the provisions, whatever reservations individual judges may have about the policy which underlies them. An ample means of avoiding the unjust operation of the requirements of s48 is provided, as Madgwick DCJ was quick to observe, in the wide words of exception ("without reasonable excuse") contained in s48(3). It is also possible that the prohibition on the commencement of court proceedings contained in s48(3) is procedural in character and does not affect the validity of proceedings once commenced. Cf Coburn v Colledge [1897] 1 QB 702, 706 (CA). However, as this point was not fully argued in these proceedings it is inappropriate to express any final view in respect of it. In practice, it is likely that most proceedings raising compliance with s48(3) will be resolved upon purely factual questions concerned with whether there has, in fact, been a failure to comply with the section %%X7 and, if so, whether a reasonable excuse has been shown for that failure. Order striking out and reinstating an action It emerges from the transcript of the exchanges with Ramrakha, that Madgwick DCJ was proceeding to deal with the case on a purely factual basis (and determining that there had not been a failure to comply with the section or that such failure was in the circumstances reasonably excused) when he was diverted from that course. He was handed the reasons of P J Phelan DCJ in Jung Hee So v Filippo Greco, unreported, District Court, 5 October 1990. In that case Phelan DCJ had dismissed a plaintiff's statement of claim although without an order for costs. He did 80 upon the ground that the plaintiff's solicitor there had failed to provide particulars at all before commencing proceedings. For the want of any evidence of a reasonable excuse, Phelan DCJ found no basis in that case to relieve the plaintiff from the consequences of s48(3). Correctly, his Honour described the purpose of s48 as: "In part, at least, to ensure that the defendant is given the fullest possible particulars of a claim so that settlement might be achieved without delay to the plaintiff and without the expense of proceedings." Clearly, Jung Hee So was distinguishable from the present case in which certain particulars had been supplied before the statement of claim was issued. However, instead of addressing the purposes of the section and distinguishing Jung Hee So, Madgwick DCJ appears to have accepted, albeit grudgingly, that the first opponent had failed without reasonable excuse to comply with the requirements of s48. He expressed a concern that requests for particulars such as the insurer had addressed to the first opponent's solicitors could be misused (as he had earlier hinted) to put a plaintiff outside the three year time limit within which, after notice, proceedings in respect of a motor vehicle accident must be brought (see s52(4) of the Act). He said: "See you could easily keep him waiting more than three years, easily." URJ HARRIS v LEANEY (Kirby P) 5 At least in the circumstances of this case, such a suggestion was unwarranted. Reference to what was said or thought to have happened in other cases in earlier times and other places were irrelevant. Far from allowing time to pass in the hope of putting the first opponent out of court, the claimant had raised non-compliance with s48(3) in its defence and immediately taken out the motion to have the issue resolved whilst the claimant was still well within time to recommence proceedings if his first proceedings were dismissed. Bearing in mind the purpose of the Act, and particularly as expounded by the Attorney General, the action of the claimant in initiating the motion was doubtless seen by it as nothing more than an attempt to give effect to the will of Parliament and the express wish of the Government that as many cases of this land as possible should be settled before litigation was commenced. The claimant's motion sought dismissal of the statement of claim. However, instead of acceding to that motion, or rejecting it, Madgwick DCJ proceeded upon a course which he himself determined. This was to strike out the statement of claim but then to reinstate it, to make ancillary orders as a consequence and to order the claimant (although successful) to pay the costs. These are the orders which the claimant challenges. In order to understand the challenges, it is necessary to set out verbal the transcript of the exchanges between his Honour and the representatives of the parties and the reasons which his Honour gave for the orders which he made. An objection was raised to the court's going beyond the formal orders made by Madgwick DCJ and the reasons given for those orders. Cf Hockey v Yelland (1984) 157 CLR 124, 143. However, it is now the clear authority of this Court that the "record" for the purpose of proceedings in the nature of certiorari goes beyond what historically was the record of an inferior court. See Glenvill Homes Pty Limited v Builders Licensing Board [1981] 2 NSWLR 608, 610; Adams v Kennick Trading (International) Limited (1986) 4 NSWLR 503, 505; Coles and Ors v Burke and Anor (1987) 10 NSWLR 429, 433. As is often the case in the brief reasons given disposing of a motion, Madgwick DCJ's reasons cannot really be understood without incorporating at least substantial parts of the exchanges which took place between his Honour and the representatives of the parties immediately before he embarked upon the exposition of reasons for the orders which he made. In that sense, the whole transcript constitutes the revelation of his Honour's reasons. In any case, in the present proceedings, regard may be had to the whole transcript because the claimant challenges what his Honour did not only upon the basis of a want of power but also upon the ground of breach of the rules of natural justice and for the reasonable apprehension of bias. The entire transcript is relevant in that regard. Trial judge's reasons for his orders The following is that part of the transcript which culminates in Madgwick DCJ's reasons for the orders now under review: "MR RAMRAKHA: The particulars which we say were missing your Honowr... MRS TAYLOR: June I think it was your Honour. MR RAMRAKHA.....are in exhibit S to the plaintiff's solicitor's letter of 30 August 1990 which answers numbers three, four, five and six. HIS HONOUR: Well he is not failing at the present time is he Mr Ramrakha? MR RAMRAKHA: No your Honour. The Act says that if you look at the time... 6 UNREPORTED JUDGMENTS HIS HONOUR: All right. Well then what I will do is this, I will determine that the claimant did fail without reasonable excuse to comply with s48 and accordingly the statement of claim presently filed will be struck out; leave is given however, for it be refiled today in court in the same proceedings and the matter may now continue. And the defendant can pay the plaintiffs costs thrown away by the costs of these proceedings, in order to discourage the frivolous and unworthy exercise of the rights which have been given to them. MRS TAYLOR: My concern is the filing fee, is it likely that would be covered. HIS HONOUR: And the filing fee waived for today. MR RAMRAKHA: Your Honour with respect the Court's orders may be ultra vires but I... HIS HONOUR: Well why might they be ultra vires? MR RAMRAKHA: Well your Honour... HIS HONOUR: Well we will treat those orders I was proposing. Why might they be ultra vires? MR RAMRAKHA: Well with respect your Honour, if your Honour strikes this matter out then the - there are no proceedings, there are not applications. HIS HONOUR: What do you mean? MR RAMRAKHA: Well if you strike this matter out is the... HIS HONOUR: I have strick it out and I have given leave to re-file a statement of claim in this form, intituled with these numbers, in Court today because you say the failure is now over. Why should I put him up for the double expense of filing fees? MR RAMRAKHA: Well not if your Honour pleases. HIS HONOUR: Well I will say something about this. The defendant exercises his right to insist upon compliance with the letter of s48 of the New South Wales Motor Accidents Act, which I must say is a remarkably ill-thought out piece of legislation. The plaintiff had his accident in... MR RAMRAKHA: 20 April 1988. HIS HONOUR: In April of 1988. He soon repaired to some solicitors who corresponded with the Government Insurance Office were themselves acting reasonably. They lost contact with their client who was out of work and no doubt as a consequence of that had other worries. While there were some reasonable particulars outstanding the solicitors commenced action. They did that by a Statement of Claim filed on 20 June 1990. The plaintiff only has three years to get this Statement of claim in, it is the prima facie limit. By March 1990 the defendant conceded that the plaintiff had - sorry they filed this on June 1990? MR RAMRAKHA: Yes your Honour. HIS HONOUR: And you conceded by March he was right? MR RAMRAKHA: No we conceded by August, 30 August. HIS HONOUR: I am sorry. He filed the Statement of Claim in June 1990 and the defendant concedes that by 30 August 1990 any unreasonable default by the plaintiff was over. In these circumstances it does seem to me that the section is pointless unless it is interpreted as requiring that, where a Statement of Claim has been filed in breach of it, that Statement of Claim must be struck out as incompetently filed and I have no option but to do that, so I do it. On the other hand I have ample power under the Rules to avoid double expense to the hapless plaintiff and there is no injustice to the defendant, nor is there any warrant to increase the Court's coffers by my declining to do so, to allow the re-filing of that Statement of Claim in Court without payment of a filing fee today which I do now do. The Registrar URJ HARRIS v LEANEY (Kirby P) 7 will however re-number the proceedings and they will otherwise proceed as if the Statement of Claim had been filed today. I must say that the real fault is not the Government Insurance Office's for bringing these proceedings. They have to enforce the law as they understand it but the law is stupid. It is contemplated that people - perhaps out of work, perhaps very hard up for other reasons, perhaps not hard up at all, may have to expend hundreds or even thousands of dollars on legal fees, if reasonable requests, before the matter ever gets near a Court. Anyone with any broad experience of motor accident and other litigation would not have been so keen to invest such power in any bureau and in particular in the Government one in four cases, has come to me when I sit in civil work begging for adjournments which counsel tell me is frankly explained only by inordinate delay an incompetence on the part of those who have handled the legal affairs of the GIO. Further in my own knowledge some officers, by no means a majority, have been guilty in the past of such conduct as keeping inexperienced country and suburban solicitors negotiating literally for more than six years about claims by potential plaintiffs and the, when at length somebody has sought to institute proceedings, informing the plaintiff's legal advisors that period of limitation for commencing an action expired. In short it is alarming that in this day and age anybody in relation to important matters would vest such power in any of the time of a competent and honourable solicitor employed by the Government Insurance Office such as Mr Ramrakha that he must come here and devote his time to an exercise which at worst would simply mean double costs for a man who may well have a good claim. I am quite sure that Mr Ramrakha's talents would entitle him to be employed on more productive work. I would be very surprised if his own inclination were not to be doing it. MRS TAYLOR: Your Honour you did mention costs. HIS HONOUR: Yes and to mark my displeasure at what I regard as a really unnecessary exercise of rights, I am going to order the defendant to pay the plaintiff's costs. Procedural defects in the course adopted I make full allowance for the pressures which were upon Madgwick DCJ in disposing of a motion in a busy practice list. I also make allowance for the fact that his Honour's reasons appear to be unrevised, recorded just as they were uttered in the oral exchanges with the representatives of the parties. I recognise his Honour's desire to achieve a practical solution to what seemed to him to be an unmeritorious application. By the time the motion was before his Honour, the claimant had acknowledged that it had received adequate particulars, although this was after the statement of claim had been filed, and not before as the Act requires. However, instead of determining that, although there had been a failure to comply with s48(3) this was reasonably excused in the circumstances, his Honour was deflected from that course, incorrectly as I believe, by reference to the decision of P J Phelan DCJ in Jung Hee So and an apparent desire, out of comity, to conform to that opinion. Only this consideration would seem to explain his shift from his earlier expressed view that "reasonable excuse" in s48(3) of the Act should be given a broad meaning to the conclusion which he ultimately reached "that the claimant did fail without reasonable excuse to comply with s48." (at page 14) In shifting to that ultimate conclusion, in the passages set out above (reinforced by those which precede it) a number of defects of a procedural character must be recorded: 8 UNREPORTED JUDGMENTS 1. On a number of occasions his Honour interrupted the claimant's representative so that, at least as the transcript shows, the representative was unable to complete his submissions; 2. Although the motion sought dismissal of the proceedings, his Honour proceeded to strike them out upon his own initiative and without first affording the representatives of the parties the opportunity to make submissions on the appropriateness of that course; 3. His Honour then reinstated the proceedings so struck out of his own motion without there being formally before him an application for such reinstatement; 4. He said that such an application had been "orally made" - but no such oral application can be found in the transcript. Counsel for the first opponent properly conceded before this Court that she had not made such an application, unless by inference in expressing sole concern about the filing fee which will be occasioned by the course which his Honour was embarked upon; 5. Although his Honour said that he would "say something" about the want of any application to restore the matter and to reinstate it with the consequential orders which he made, his reasons did not proceed to do so; (at page 15) 6. Instead his reasons continued with the criticism of the Act as "stupid" which had previously been voiced and the references to delays and suggested incompetence of the GIO in other proceedings which were not relevant to the the exercise of the discretion called upon by the motion before him; 7. The order for costs made did not follow the event. Nor did it simply deprive the party successful in the motion (the claimant) of the costs of the motion. Instead it burdened the claimant with the costs of the first opponent although his Honour had been found that he had "failed[ed] without reasonable excuse to comply with s48 and had suffered an order striking out his statement of claim as a consequence. This order was made without first giving the representative of the claimant the opportunity to be heard before such an unusual order as to costs was made; and 8. In explaining the order for costs his Honour expressed as one reason that it was made "to mark my displeasure at what I regard as a really unnecessary exercise of rights". This suggests that he allowed an emotional consideration, derived from his repeated criticism of the Act and past experience of the GIO to be visited upon the claimant who, as he had acknowledged, had merely exercised rights under the Act and, moreover, had been held to have been justified in law to do so. The power to make the orders The first challenge to the foregoing orders was based upon the suggested want of power in Madgwick DCJ to make the order granting leave to the first opponent to refile his statement of claim in court. Originally, the claimant contested his Honour's power to order that the statement of claim be struck out, and not dismissed as the motion sought. However, Pt26 r5B of the District Court Rules made under the District Court Act 1973 provides an ample power to strike out process. Relevantly it reads: "5B(1) The Court may, if it thinks fit, strike out an action at any time on terms, and without affecting the generality of the foregoing provisions of this subrule, the Court may so strike out an action if (a) no party appears; or (b) a defendant does, but the plaintiff does not, appear. URJ HARRIS v LEANEY (Kirby P) 9 (2) Where on action is struck out under subrule (1) the Court may, an the application of any party, order that the action be reinstated on terms, and without affecting the generality of the foregoing provisions of this sub-rule, the action may be so reinstated upon such terms and conditions as to costs,... as the Court thinks fit." It is clear that the opening words of Pt26 r5B are perfectly general in their terms. They give a power to the court, to be exercised judicially, to strike out an action at any time on terms. That power is not confined to cases where parties do not appear, although such cases will be the normal circumstances in which the power to strike out is exercised. The claimant, however, complained (as Mr Ramrakha had before Madgwick DCJ) that there was no "application by any party" before his Honour, within the terms of Pt26 r5B(2), to warrant the order that the action be reinstated. The answer to that contention is twofold. First, Madgwick DCJ appears to have considered that such an application had been "orally made". It is possible that he was referring to the acquiescence of counsel for the first opponent in the "proposed" orders which he had announced. It is possible that he inferred an application for reinstatement of the action from the whole conduct of the proceedings on the part of the first opponent. Certainly, in this Court his Honour's actions have been supported and not disavowed by the first opponent. Any error on the part of his Honour in discerning an application to reinstate the action on terms as the rule permits would not amount to an error of law justifying the intervention of this Court. Another answer to this argument is provided by Pt1 r5A of the District Court Rules. This provides that proceedings commenced in accordance with directions of the Court "shall be well commenced". Accordingly, whilst s53 of the District Court Act requires that action in the Court "shall be commenced" in the manner prescribed by the Rules and those Rules (notably Pt5 r3(1)) were not complied with in the present case, the combined effect of Pt26 r5B and Ptl r5A(2) DCR would sustain, as within power, the orders which Madgwick DCJ made relating to the proceedings. On the other hand, the order for costs was unusual. It must be considered separately. The power to provide for costs is contained in s148B of the District Court Act: "148B(1) Subject to this Act and the rules and subject to any other Act - (a) costs in or in relation to any proceedings shall be in the discretion of the Court; (b) the Court has full power to determine by whom, to whom and to that extent costs are to be paid in or in relation to any proceedings. The relevant Rules include Pt16 r6: "6(1) Except where otherwise provided, the costs of any application in or for the purposes of or in relation to any proceedings shall follow the event of the proceedings unless the Court shall otherwise order." By the Rules, costs orders normally follow the event of proceedings in the District Court. Nevertheless, the power of the Court otherwise to order is acknowledged by the Rule. full discretion in the Court is provided by s148B(1)(a) and (b) That discretion must be exercised judicially, a matter to which I will return. However, the Act and the applicable Rule make clear the power of a judge of the District Court to make exceptional orders as to costs, such as the order now challenged. Cf Nicholson v Little [1956] 1 WLR 829, 831 (CA). 10 UNREPORTED JUDGMENTS The attack on what Madgwick DCJ did, on the basis of manifest error of law for want of power, therefore fails. Suggested denial of procedural fairness More substantial is the attack on the basis of the suggested denial of procedural fairness to the claimant. I have already listed the objections to the course which the proceedings took as his Honour advanced to his orders and expressed his reasons for them. With every respect to the learned judge, the course of the proceedings was unsatisfactory. An order was pronounced, different from that sought in the motion, without affording the parties affected the first opportunity to make submissions in respect of it. That order amounted to a reinstatement of the action although no clear application was made for that purpose. The promise to say how that application was inferentially made was not fulfilled. The course adopted originated in his Honour's mind. It was not the result of an application made for the first opponent. The first opponent's case was always that reasonable particulars had been supplied or that a reasonable excuse for any failure to comply with the obligation imposed by s48 of the Act had been shown. without affording the first opponent to be heard to the contrary, his Honour pronounced the conclusion that the first opponent "did fail without reasonable excuse to comply with s48". This Court has no process or contention by the first opponent before it concerning that finding. Although the power existed to permit his Honour to take the course which he did, the manner of its exercise did not conform to the requirement imposed upon judges exercising their powers to afford the parties affected the adequate opportunity first to be heard before such power is exercised. It was suggested for the first opponent that his Honour therefore retrieved the situation by regarding the announced orders as mere "proposals" and hearing the claimant's representative in contest. However, the record of what ensued, which I have incorporated in these reasons, shows that Mr Ramrakha was not really afforded a fair opportunity to put his arguments in resistance to the course which his Honour had determined to take. That course, from first to last, was clearly coloured by his Honour's adverse view of the provisions of the Act and his recorded opinions about the inefficiency and probable motivations of the claimant's insurer in other proceedings. With every respect to his Honour, neither of these considerations should have intruded into his approach to the motion which was before him. Least of all should they have done so once he concluded, as he did, that the first opponent had failed without reasonable excuse to comply with s48. Once that conclusion was reached, it was essential before making unusual orders for the continuance of the proceedings and disposing of the costs, to have announced any provisional and tentative opinion which had been reached so as to afford the claimant, by his representative, a full opportunity to dissuade his Honour from such views. The order that the claimant, though successful, should bear the costs of the first opponent was supported in this Court upon the basis that, in substance, although not in form, the first opponent had succeeded. He had secured reinstatement of his proceedings. However, the order which his Honour made was based upon an expressed conclusion that the first opponent had failed without reasonable excuse to comply with the section. If, in these circumstances, an order other than that contemplated by Pt16 r6(1) of the District Court Rules were to be made, it was necessary that the claimant should first have been afforded the opportunity to be heard on the proper order which should be made as to costs. Cf Escobar v Spindelari (1986) 7 NSWLR 51, 57. URJ HARRIS v LEANEY (Kirby P) 11 There are other objections to the order as to costs. The discretion to provide for costs in such an unusual way must be exercised judicially. The exercise of the discretion will be vitiated by a reference to irrelevant considerations. It is at least open to argument that it was an irrelevant consideration to order costs to mark a judge's personal displeasure at what he conceived to be an "unnecessary exercise of rights" which exercise has been sustained under an Act of Parliament for a purpose which Parliament apparently contemplated. Whatever doubt might exist in this respect, it is clearly irrelevant to take into account, in disposing of costs in a motion such as the present, a general feeling of dissatisfaction with the conduct of other persons in the office of the insurer for the claimant. Least of all is it permissible to take into account the thrice repeated suggestion that such insurer had, in other circumstances and at other times, misused requests for particulars in order to cause a plaintiff to get out of time. Those considerations were wholly irrelevant to the present case where the prompt action of the claimant in filing the motion contradicts any suggestion that he, or his insurer, were seeking to take an unfair advantage of the request for particulars. Indeed such a conclusion was also contradicted by his Honour's determination that the first opponent had failed without reasonable excuse to comply with s48 of the Act. In the foregoing circumstances, I do not believe that the claimant was afforded procedural fairness in the manner in which the substantive and cost orders made by Madgwick DCJ were pronounced. Those orders cannot stand. They must be quashed. The matter must be returned to the District Court to be dealt with according to law. Reasonable apprehension of bias These conclusions relieve me of the obligation to deal with the remaining argument of the claimant. This was that his Honour's remarks and the course which the proceedings took before him would indicate to a fair-minded observer a reasonable apprehension of bias on his Honour's part against the claimant and his insurer. The claimant relied, in this respect, upon the stringent standard expressed for judicial officers in Australia in Vakauta v Kelly (1989) 167 CLR 568. That standard has been applied consistently in this Court. It was applied before Vakauta (see eg S and M Motor Repairs Pty Limited v Caltex Oil (Australia Limited (1988) 12 NSWLR 358). It has been applied since (see eg Raybos Australia Pty Limited and Anor v Techtran Corporation Pty Limited and Ors [No 9]; Court of Appeal, unreported, 27 November 1990; (1990) NSWJB 158, special leave refused). For the first opponent, it was not denied that some of his Honour's observations recorded above might have caused anxiety to the fair-minded observer sitting at the back of the court reflecting upon the way in which the proceedings unfolded on the claimant's motion. Indeed, counsel for the first opponent pointed out that she had herself been afforded little opportunity to assist his Honour in reaching his conclusions on the motion. Nevertheless, the claim for relief based upon ostensible bias was resisted upon the basis that Madgwick DCJ's interventions, although robust, did not exceed proper bounds. See Galea v Galea (1990) 19 NSWLR 263, 281. Alternatively, it was argued that the right to complaint about them had been waived by the failure of the claimant adequately to take the point at first instance. (See Wentworth v Rogers (No 12) (1987) 9 NSWLR 400, 422). It is unnecessary to resolve these arguments in the light of the firm conclusion which I have reached that the orders were made in circumstances 12 UNREPORTED JUDGMENTS falling short of the requirements of procedural fairness. I therefore refrain from expressing any conclusion upon this head of complaint. Discretion and orders At once stage during argument, the Court canvassed the possibility that relief might be denied to the claimant on discretionary grounds. If, for example, the Court were of the view that "reasonable excuse" were shown on the materials before Madgwick DCJ, the orders which his Honour made, though unjustifiable in the circumstances would, in the result, occasion no injustice to the claimant save possibly as to costs. For a number of reasons, however, I do not believe that this argument (belatedly embraced for the first opponent) should succeed. It was not an argument which emanated from the first opponent. It was not the case on the summons which the claimant came to this Court to meet. Indeed, it was contrary to the first opponent's initial submission that the Court should confine itself strictly to the "record" in the sense of the reasons which Madgwick DCJ finally gave for the orders which he made. To determine the reasonableness or otherwise of the excuse for non-compliance with s48 would take the Court into a consideration of factual matters. Even upon affidavits which were not the subject of cross-examination, this is not a course which the Court should adopt in this case, particularly in the face of the generality of the language of s48, the determination which the trial judge made and the way the proceedings were mounted in this Court. No basis having been shown why the claimant should be denied the relief to which he is entitled to repair the want of procedural fairness which he has demonstrated, I would propose an order in the nature of certiorari should issue from this Court. The claimant's amended summons confined the order sought to the record "excluding the order striking out the statement of claim". However, in my view the whole record should be brought up so that all of the orders made by Madgwick DCJ may be quashed. This will permit the proceedings on the claimant's motion to be reheard ab initio. In such rehearing it is possible that another judge of the District Court may conclude that, in the circumstances, there has been no failure to comply with s48 of the Act or that, to the extent that there has been such a failure, a "reasonable excuse" is available to the first opponent in the circumstances. The orders which I would therefore propose are: 1. That the record of proceedings in matter number 70153 of 1990 be called up from the District Court; 2. That the orders made in such proceedings on 23 November 1990 by his Honour Judge Madgwick QC be quashed; 3. That the proceedings be returned to the District Court to be dealt with according to law; 4. That the costs of the proceedings in the District Court on 23 November 1990 abide the order of the judge hearing and determining the motion of Stephen James Harris in that Court; and 5. That the first opponent pay the claimant's costs of the proceedings in this Court but have, in respect thereof, a certificate under the Suitors's Fund Act 1951. Samuels JA I have had the advantage of reading in draft the judgment written by the President, which deals fully with the facts which I need not therefore recapitulate. URJ HARRIS v LEANEY (Samuels JA) 13 In my opinion the appeal can be determined upon one tolerably short point. As the President has indicated in his recital of the facts, the learned judge, in the course of argument, made this pronouncement: "Alright. Well then what I will do is this, I will determine that the claimant did fail without reasonable excuse to comply with s48 and accordingly the statement of claim presently filed will be struck out;...And the defendant can pay the plaintiffs' costs thrown away by the costs of these proceedings, in order to discourage the frivolous and unworthy exercise of the rights which have been given to them." The solicitor then appearing for the claimant attempted to make some expostulation, endeavouring to point out that the orders which he took the judge to have made a moment before might be ultra vires; but the judge overrode him before he could make the explanation which he evidently had in mind. The solicitor managed to indicate that there was no application before the learned judge to reinstate the statement of claim, and his Honour then proceeded to give further reasons in which he no doubt intended to express his final decision. In the course of those reasons, his Honour said: "In these circumstances it does seem to me that the section is pointless unless it is interpreted as requiring that, where a Statement of claim has been filed in breach of it, that statement of Claim must be struck out as incompetently filed and I have no option but to do that, so I do it." A little later, he observed: "T must say the real fault is not the Government Insurance Office's for bringing these proceedings. They have to enforce the law as they understand it but the law is stupid." There follow some criticisms of the Government Insurance Office (which had been adumbrated a little earlier in exchanges between the judge and the solicitor, Mr Ramrakha); and then counsel for the first opponent having raised the question of costs, the learned judge concluded by saying: "Yes and to mark my displeasure at what I regard as a really unnecessary exercise of rights, I am going to order the defendant to pay the plaintiff's costs." The claimant says of this aspect of the matter that the learned judge did not request Mr Ramrakha to address on the question of costs nor, indeed, did he give him any opportunity to do so, and that this omission amounted to a denial of natural justice. In my view, this submission is, with all respect, amply justified. In Escobar v Spindeleri (1986) 7 NSWLR 51 I dissented and offered the view, at 62, that a denial of natural justice is not established merely because a judge does not explicitly offer counsel the opportunity to address. The question is whether counsel has been "precluded" from addressing and I have no doubt upon the record in this case (and I interpolate that the parties are agreed that, for technical purposes, the record in the present application includes the transcript) that the judge gave Mr Ramrakha no reasonable opportunity of doing so. It is altogether unfortunate, if I may be permitted to say so, that the learned judge permitted his own emotional reactions to this legislation, and to the steps taken by the Government Insurance Office, to cloud his judgment, as I am afraid he did, and to lead him to deny procedural fairness to a practitioner whom the learned judge himself very fairly and correctly described as "a competent and honourable solicitor". In addition to the complaint of denial of natural justice the claimant also submits that the order for costs which the learned judge made was wholly erroneous and fundamentally flawed. I agree. The order was not merely that the defendant (who was, of course, a nominal defendant, the real party being the Government Insurance Office) should pay his own costs, but that he should also 14 UNREPORTED JUDGMENTS pay the plaintiff's costs. The defendant, now the claimant, had succeeded in the application which had been made; and to order a successful party to pay the other side's costs is a very strong order which may be made in the exercise of judicial discretion (148B of the District Court Act 1973) but which requires cogent justification: see Donald Campbell and Co v Pollak (1927) AC 732. In my view, the learned judge did not exercise his discretion judicially. It is obvious, I am afraid, that he was in a somewhat intemperate mood and made the order, as he himself said, to mark his displeasure at what he regarded as an unnecessary exercise by the Government Insurance Office of its rights. But it must be remembered that he had also determined that the first opponent did fail without reasonable excuse to comply with s48, and that he had, accordingly, no alternative but to strike out the statement of claim. I leave out of account whether that order was technically correct or not. Since the first opponent had therefore failed to comply with the statutory requirements and had in consequence made himself vulnerable to having his statement of claim struck out or dismissed, it seems to me impossible to describe the Government Insurance Office's conduct as "frivolous", "unworthy" and "really unnecessary". Moreover, the application of these pejorative epithets is quite inconsistent with the earlier observations that "the real fault is not the Government Insurance Office's for bringing the proceedings. They have to enforce the law as they understand it....." I therefore regard his Honour's discretion as having miscarried and, on that account also, an error is law is revealed. Tadd that I express no view as to whether Madgwick DCJ's decision that the first opponent did fail without reasonable excuse to comply with s48 was or was not well founded. It was, incidentally, pronounced without giving the first opponent's counsel any opportunity to be heard; but in all the circumstances she had little reason, perhaps, to expect any ultimate detriment. However, I do not decide that in the circumstances of this case it would be correct to conclude that there was any unreasonable failure to comply with s48. I agree with the orders proposed by the President. Handley J I agree with Samuels JA. 1. That the record of proceedings in matter number 70153 of 1990 be called up from the District Court; 2. That the orders made in such proceedings on 23 November 1990 by his Honour Judge Madgwick QC be quashed; 3. That the proceedings be returned to the District Court to be dealt with according to law; 4. That the costs of the proceedings in the District Court on 23 November 1990 abide the order of the judge hearing and determining the motion of Stephen James Harris in that Court; and 5. That the first opponent pay the claimant's costs of the proceedings in this Court but have, in respect thereof, a certificate under the Suitors' Fund Act 1951. Solicitors for Claimant: B Ramrakha (Solicitor for GIO of NSW) Counsel for Opponent: P Taylor Solicitors for 1st Opponent: Conditis and Associates Solicitors for 2nd Opponent: H Roberts, State Crown Solicitor, submitting