SHEEHAN v McDONELL [No 2] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KirBY P, CLARKE and CRIPPS JJA 1 June 1992, 21 August 1992 [1992] NSWCA 228 JURY — RIGHT TO TRIAL BY JURY — defendant within time requisitions jury and pays fee — in default of appearance of defendant's counsel, Lloyd-Jones DCJ dispenses with the jury and enters judgment for plaintiffs — motion for setting aside the judgment succeeds before Garling A-DCJ — but order dispensing with jury not set aside — purported appeal as of right to Court of Appeal — later motion for extension of time to seek leave to appeal pursuant to District Court Act 1973, s128(A) — summons for leave to appeal heard as an appeal — proceedings returned to Garling DCJ to decide whether to correct earlier orders under slip rule — later order dispensing with jury corrected under slip rule — HELD: Summons for leave to appeal dismissed — all costs to abide outcome of trial. INFERIOR COURTS AND TRIBUNALS — District Court — judgment set aside — order dispensing with jury not set aside complaint that Judge made such order without (a) affording defence right to be heard and (b) providing reasons — matter remitted to Judge to correct order under slip rule. NATURAL JUSTICE AND PROCEDURAL FAIRNESS — judgment entered in default of appearance — excuse for non appearance proved and defence on merits shown — District Court judge set aside default judgment — defendant seeks jury trial — plaintiffs will not consent to restore jury -application to Court of Appeal — proceedings remitted to District Court Judge to consider the correction of orders under Slip Rule — orders corrected — summons for leave to appeal dismissed as unnecessary. COSTS — occasioned by barrister — barrister fails to appear on District Court motion — fails to notify opponent of late arrival — telephones the Judge's Associate — matter dealt with in his absence consequential need for motion, summons and appeal to Court of Appeal — HELD: But for the absence of the barrister from the proceedings, the Court would have called on him to show cause why he personally should not pay the costs which had ensued. Regina v Secretary of State for the Home Department; Ex parte Abbassi, Times Law Reports, 6 April 1992, referred to. District Court Act 1973, s78,s128 (5A), District Court Rules Pt12 RS. Kirby P Before the Court is a summons for leave and an appeal. The parties agreed that the summons and the appeal should be heard together, to the intent that, if leave were granted by the Court, the Court could immediately dispose of the appeal. The chain of litigation which is recounted in these reasons arose out of the failure of counsel to attend before the District Court, on time, when proceedings concerning his client were before that court. Out of his default arose a second proceeding in the District Court and thereafter a motion, a summons, an appeal to this Court and applications to the trial judge which will be described. It is an unfortunate tale. It is specially unfortunate, in my view, that the Court does not have the barrister concerned before it so that it might hear him and consider ordering him to pay the costs incurred as a result of his apparent default. Cf 2 UNREPORTED JUDGMENTS Regina v Secretary of State for the Home Department; Ex parte Abbassi, Court of Appeal Eng, Times Law Report, 6 April 1992. Barrister absent; default judgement entered: Mr John McDonnell and the other opponents to the summons were retained as solicitors by Mrs Valdia Sheehan (the claimant) in connection with proceedings in the Family Court of Australia. Costs were incurred included in which were counsel's fees for Mr MD Broun QC. Subsequently a demand was made by the solicitors for the payment of such costs. The claimant did not meet the demand. Eventually, the opponents pursued the claimant for the unpaid costs. They did so by statement of liquidated claim issued out of the District Court. The total amount claimed was $35,723.71. In time, the claimant filed her verified notice of grounds of defence. She admitted that some legal work was performed for her. However, she denied the costs and disbursements claimed. She raised, by way of her defence, the fact that no proper bill of fees, charges and disbursements had been delivered to her. See Legal Practitioners Act 1898, s21(1) and Legal Profession Act 1987, s198(1). She also claimed that the opponents had been negligent in the performance of their duties. Within time, the claimant requested a jury to try her dispute with the opponents. She paid the fee prescribed by the District Court Rules. However, on 2 January 1991, the appellants filed a notice of motion seeking the entry of judgment in their favour together with interest. The motion also requested that the requisition by the claimant for a jury be struck out, or in the alternative, dispensed with, and that the hearing be expedited. In the alternative, the motion sought an order that the substantive paragraphs of the grounds of defence be struck out. P.n affidavit in support of the motion asserted a belief on the part of the opponents that the claimant had no defence to their claim. This motion came before Lloyd-Jones DCJ on 8 March 1991. The claimant, by new solicitors, retained counsel to appear to contest the motion. However, according to matters later proved in the District Court, counsel did not appear. The matter was called on before Lloyd-Jones DCJ. Counsel's absence was quite unknown to the claimant, whose solicitor was also, apparently, absent. Counsel had telephoned the Judge's Associate to inform her that he would be late and to ask her to request the Judge to delay the hearing. It appears that counsel's opponent was not contacted. He had no knowledge of this request. When the matter was called, there being no appearance for the claimant, Lloyd-Jones DCJ proceeded to deal with the motion. He ordered that the substantive paragraphs of the claimant's defence be struck out; that the hearing of suit to be expedited; that the request for the jury be struck out or, in the alternative, the jury dispensed with as requested. He then entered judgment in favour of the opponents in the sum of $47,721.30 (being the amount claimed together with interest) and costs. Execution on the judgment was stayed for a period of 28 days to allow service of the orders upon the claimant. When the claimant received these orders she immediately commenced proceedings in the District Court to have the orders set aside. Those proceedings were contested because the opponents persisted with their contention that the claimant had no defence. The new proceedings were heard by AF Garling A-DCJ (as his Honour then was). The hearing took two days in June and September 1991. On 23 December 1991, Garling A-DCJ published a reserved decision. Judgment set aside but the jury order stands: URJ SHEEHAN v McDONELL [No 2] (Kirby P) 3 Garling A-DCJ recounted the facts which I have recorded. He accepted evidence, which does not seem to have been contested, that counsel had agreed to waive the payment of his fees until the legal proceedings between the claimant and her former husband were finalised. He expressed himself satisfied that the claimant had "an arguable defence". She was also found to be quite innocent of the circumstances which had led to Lloyd-Jones DCJ proceeding in the matter in the absence of her former counsel. Garling A-DCJ concluded that the claimant should have the opportunity fully to litigate the matters raised in her amended statement of defence (which embraced the original grounds and the additional ground under the Contracts Review Act). He therefore ordered that the matter should proceed so that there could be "a decision on the merits". In the circumstances, and with respect to his Honour, these were eminently sensible and just conclusions to reach. Garling A-DCJ then made his orders. They were: "The judgment entered on 8 March 1991 is set aside. I set aside so much of his Honour Judge Lloyd-Jone's order (sic) to permit the defendant to file an amended defence within fourteen days. I order that the defendant to pay the costs of the Motion of the 8 March 1991 and... reserve costs of this Motion, pending the eventual outcome of these proceedings." It will be recalled that the claimant had originally requisitioned a jury. That was her entitlement in law. She had lost that jury only by the operation of the orders which Lloyd-Jones DCJ made in her absence. She still wanted a jury to try the case raised by her amended defence. She was therefore dissatisfied by the decision of Garling A-DCJ to omit from the order otherwise setting aside the orders of Lloyd-Jones DCJ, that order which related to striking out of the requisition for the jury or, in the alternative that the jury be dispensed with. At the outset of his reasons, Garling A-DCJ had recorded, in his narrative of Lloyd-Jones DCJ's orders, that judge's order in relation to the jury. That order, in turn, arose out of the opponent's motion which Lloyd Jones DCJ dealt with in the absence of any representatives of the claimant. The result was, following Garling A-DCJ's orders, that the claimant had lost the jury without ever being afforded an opportunity to contest such loss. The Court was informed, very fairly, by counsel for the opponents in the proceedings before Garling A-DCJ, that the issue of the jury had not assumed separate importance. So much also appears from my reading of the transcript. Never daunted, the claimant then approached this Court with a view to securing the correction of so much of the order of Garling A-DCJ has had, in effect, deprived her of her jury. It must be assumed that those representing the claimant have come to the view that she will do better in a trial before a jury than she would in a trial before a judge sitting alone. Proceedings in the Court of Appeal: Originally, the claimant purported to appeal to this Court as of right. However, it was clear to the Court that the order of Garling A-DCJ was interlocutory. For this reason an appeal could only arise in the Court of Appeal from his Honour's judgment by leave of this Court. See District Court Act 1972, s128(5A). The Registrar drew this apparent error to the attention of those who represented the claimant. The result was the filing of a motion which sought an extension of time for the lodging of a summons for leave to appeal. That motion was duly listed before the Court. On terms requiring the claimant to pay the opponents' costs of the motion, Mahoney JA, by consent of the parties made the order extending time. Thereafter, 4 UNREPORTED JUDGMENTS the summons which is now before the Court was filed. The parties agreed that the Court should hear the summons and the appeal together so that, if, leave were granted, and the Court considered that the appeal should be allowed, appropriate orders could be made to dispose of the whole proceedings in the Court of Appeal. Before the Court, the events set out above were duly proved. The claimant's case was simple. She submitted that Garling A-DCJ had erred in two respects attracting the intervention of the Court, although the order was interlocutory: 1. In failing to afford the appellant procedural fairness by determining her entitlement to a jury and disposing of her right to a jury, without affording her the opportunity to be heard as to why such an order should not be made; and 2. In failing to provide reasons which stated his ground for excising from the orders of Lloyd-Jones DCJ which were otherwise set aside, the order of that judge relating to jury trial. Counsel for the opponents acknowledged the obligation of a judge to hear a party or that party's representatives, before making an order which could adversely affect that party's interests. He also acknowledged the obligation of the Judge to give reasons providing the grounds for such a decision. See Pettitt v Dunkley (1971) 1 NSWLR 376 (CA) and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (CA). However, he urged that the Court should withhold relief on various grounds: 1. That it was open to the claimant, having lost a jury in the way described, to make application to the District Court for an order for jury trial. (See The District Court Act 1973, s78; DCR Pt12 R5.) To the extent that the claimant was now out of time she could seek relief from her time default; 2. That the claimant was still within time from the filing of her praecipe for trial to summon a jury, even after the order of Garling A-DCJ and this should be weighed, as a matter of discretion, in denying the claimant access to a jury now; 3. That the proceedings raised by the claimant in her defence were complex, most especially issues to be raised under the Contracts Review Act. Accordingly, the matter should proceed before a judge sitting alone; and 4. That so far as absence of reasons was concerned, in interlocutory proceedings detailed reasons need not be given. When the proceedings were heard before this Court it seemed to the Court that Garling A-DCJ had possibly made a slip in excising from his orders the order relating to the jury. No grounds were stated for that excision. No submission had apparently been addressed to his Honour upon it. In these circumstances, its appeared to the Court that his Honour may not have intended to make the order which he did. On its face, it was inconsistent with what he otherwise did, namely to set aside the orders of Lloyd-Jones DCJ, upon the basis that the claimant had not been represented when they were made, and that she should, in effect, be restored to the status quo ante. Accordingly, this Court ordered that the proceedings be adjourned in order to permit the parties to approach Garling DCJ (as his Honour now is) to seek correction of his earlier orders under the slip rule, if that course truly accorded with his intention. Cf Expo Aluminium (NSW) Pty Ltd v Pateman Pty Ltd (No 2), Court of Appeal, unreported, 29 April 1991; (1991) NSWJB 53. The Court has now been informed, by agreement between counsel, that Garling DCJ on 3 August 1992 made such an order; that Lloyd-Jones DCJ's orders in relation to jury have also been set aside. He restored the claimant's requisition for a jury expressing the view that the issues raised in the defence URJ SHEEHAN v McDONELL [No 2] (Clarke JA) 5 were suitable for trial by jury. Thus, the claimant has been returned to the position she would have been in had her then counsel appeared in her interest when the matter was before Lloyd-Jones DCJ. Conclusion and orders: The proceedings having been satisfactorily disposed of by the order of Garling DCJ it is now possible to proceed to conclude the proceedings in this Court. Had his Honour not felt able to correct his orders under the slip rule, I should have been inclined to grant leave to appeal and to order that his Honour's order relating to the jury be set aside. Cf Stead v State Government Insurance Commission (1986) 161 CLR 141; Jankovic v Mayoh and Anor, Court of Appeal, unreported, 11 November 1991. That order was supported by no reasons or was inconsistent with the other orders made. It affected the claimant's rights. It was apparently made without affording her the opportunity to be heard. But as it has now been made plain that this was a mere oversight, it is unnecessary to provide the relief sought in this Court. The parties agree that the summons for leave to appeal may be dismissed. I will so propose. The question of costs arises. The parties were not agreed upon this point, hence the need to state the background facts in order to explain the resolution of the proceedings in this Court. As I stated at the outset of these reasons, the real source of this problem is the barrister who failed to attend Court for a client. He compounded his error because he failed to contact his opponent to secure agreement for a short delay which could be announced to the judge with the full knowledge and authority of the representatives of both parties and in open court. The conduct of the barrister in this case, as reported to this Court, left much to be desired. It did not conform to the practice expected by the Court of counsel. If the barrister were a party or were otherwise before the Court I would have had no hesitation in calling upon him to show why he should not be ordered to pay all of the costs which resulted from his error. In a sense, the claimant has succeeded in gaining the relief which she set out to secure, namely the restoration of her right to jury trial. At least when the matter was still in the District Court, the opponents could early have consented to that course. That would have saved all of the proceedings in this Court - including the motion, the summons and the appeal which followed. The claimant sought a special order for the costs of proceedings in the Court of Appeal on 4 May 1992 when the opponents applied for an adjournment. I would not accede to that request as there was an earlier default by the claimant in purporting to appeal as of right. These errors cancel each other out. The initial default happened in the claimant's camp. It occurred apparently because the opponents and possibly the Judge were not informed. The opponents were entirely innocent of this error. The just order is that costs should abide the ultimate outcome of the trial. In these circumstances the orders which I would favour are: 1. Summons for leave to appeal dismissed; and 2. Costs of the proceedings in the Court of Appeal to be costs in the proceedings in the District Court. Clarke JA The only issue remaining to be dealt with by this Court is costs. Theclaimant seeks an order for the costs of the application for leave to appeal and the appeal upon the basis that she has succeeded in having the order for trial by jury restored and that the costs were thrown away by the stubborn opposition of the opponents. 6 UNREPORTED JUDGMENTS For their part the opponents seek the same costs on the ground that there were other means available to the claimant to gain the restoration of the order for trial by jury. It seems clear to me that his Honour did not deal with this particular aspect of the matter before him for the simple reason that neither party adverted to it in submissions. It was overlooked by all. For this reason it was an obvious case for the application of the slip rule. Such an application should have been made by the claimant. On the other hand the opponents are solicitors and should not, in my opinion, have resisted the referral of the matter to Garling ADCJ, as I think they initially did. On the contrary they should have suggested the slip rule and thereby obviated the waste of court time. In these circumstances I would concur in the order proposed by the Learned President. Cripps JA I refer to the history of this matter set out in the judgment of Kirby P. Lloyd-Jones DCJ ordered that the claimant's defence be struck out, the hearing of the suit be expedited and the request for the jury be struck out or, in the alternative, that the jury be dispensed with. That occurred because the claimant did not attend court when the matter was listed. Garling A-DCJ then heard the application to set aside the orders made by Lloyd-Jones DCJ. He made the orders referred to by the learned President. I am not persuaded that there was any denial of natural justice by Garling A-DCJ. It would appear that the order which the plaintiff now wishes, viz that her case be determined by a jury, was not the subject of any submission in terms addressed to the learned trial judge. The circumstance that Garling A-DCJ may have intended to restore to the plaintiff the right to have her case heard by a jury but did not do so because no submission was made to that effect does not reveal that he denied natural justice to the claimant. Furthermore, bearing in mind that, apparently, no submission was made to the learned trial judge with respect to this matter, I do not think there was any breach by the learned trial judge of his judicial duty of the type referred to in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. As the learned President has said, the matter is now settled. An order has been made setting aside the order of Lloyd-Jones DCJ dispensing with the jury. I would have dismissed the summons for leave upon the ground that it was open to the claimant to apply to the District Court to have the case tried by a jury. In my opinion, the present application was premature - at least until the case she wished to present, but did not, was heard by the District Court. That leaves the question of costs. As the learned President observed, the real source of the claimant's problem was the failure of her barrister or solicitor to attend court when the matter was listed. Assuming that to be so, I do not think, for present purposes, we can do otherwise than assume that he was acting under her implied instructions. If the claimant's criticism of her previous legal representatives is correct, this may seem somewhat hard on her. Any other assumption, however, necessarily imposes a great hardship on her opponent who, on any view of the matter, was morally blameless. As I have said, the claimant would not have succeeded in the motion. Accordingly, although I agree with the order of the learned President, viz that the summons for leave to appeal should be dismissed, I would order that the costs of these proceedings be paid by the claimant. 1. Summons for leave to appeal dismissed; and 2. Costs of the proceedings in the Court of Appeal to be costs in the proceedings in the District Court. URJ SHEEHAN v McDONELL [No 2] (Cripps JA) Counsel for the Claimant: JA Timbs QC Instructed by: Marshall Sheehan and Associates Counsel for the Opponent: JR Dupree Instructed by: McDonell Morgan Milne Salier