New South Wales Supreme Court CITATION : Marks-Isaacs v Dive & Anor [2000] NSWSC 162 CURRENT JURISDICTION: Administrative Law FILE NUMBER(S) : SC 30077/99 HEARING DATE(S) : 8 March 2000 JUDGMENT DATE : 16 March 2000 Simon Edward Marks-Isaacs (Plaintiff) PARTIES : Roger Dive (First Defendant) Australian and New Zealand Banking Group Limited (Second Defendant) JUDGMENT OF : Studdert J LOWER COURT Local Court JURISDICTION : LOWER COURT 166189/92 FILE NUMBER(S) : LOWER COURT Mr R. Dive JUDICIAL OFFICER : M.R. Aldridge SC (Plaintiff) COUNSEL : Submitting appearance (1st Defendant) C.R.C. Newlinds (2nd Defendant) K.M. Harkness & Co. (Plaintiff) SOLICITORS : I.V. Knight (1st Defendant) Kemp Strang (2nd Defendant) Supreme Court Act LEGISLATION CITED : Justices Act Supreme Court Rules Ex parte Greenwell re Williams (1963) 81 WN Pt 1 39 CASES CITED : O'Shannessy v Heagney (unreported, Graham A-J, 14 October 1997) Cox v Journeaux (No. 2) (1935) 52 CLR 173 Norman v Matthews (1916) 85 LJ KB 857 DECISION : See para 29 IN THE SUPREME COURT OF NEW SOUTH WALES ADMINISTRATIVE LAW DIVISION STUDDERT J Thursday 16 March 2000 30077/99 SIMON EDWARD MARKS-ISAACS v ROGER DIVE & ANOR JUDGMENT 1 HIS HONOUR: By his amended summons the plaintiff, Simon Edward Marks-Isaacs, seeks an order pursuant to s 65 of the Supreme Court Act and, alternatively, pursuant to s 104 of the Justices Act, that the first defendant, a magistrate, state a case. Australian and New Zealand Banking Group Ltd, a party to the proceedings before the magistrate in consequence of which this summons has been filed, had obtained a judgment against the plaintiff in the Local Court. 2 The first defendant has filed a submitting appearance and the second defendant, for whom Mr Newlinds appeared, has opposed the relief sought by the plaintiff. 3 As long ago as November 1992 the second defendant obtained a default judgment against the plaintiff for an amount $18,313.50. Some twelve months later the second defendant obtained a further judgment against the plaintiff in the sum of $11,056.93. Years later, in 1997, there were discussions between the plaintiff and the second defendant in consequence of which there was an exchange of letters and the plaintiff paid the sum of $7000 to the second defendant. The plaintiff's assertion underlying the proceedings to which I shall shortly refer was that this payment represented accord and satisfaction for both judgment debts. The second defendant on the other hand contended that the $7000 was received and accepted only in satisfaction of the lesser and the later of the two judgment sums. 4 Following payment of the sum of $7000 the plaintiff made an application before the first defendant for a permanent stay of the first of the default judgments for $18,313.50, relying upon the $7000 paid as amounting to accord and satisfaction. The learned magistrate rejected that application, determining that there had been no agreement on the part of the second defendant to treat the plaintiff's payment as satisfying the earlier judgment but only the later one. The plaintiff sought to challenge that decision but ultimately the learned magistrate refused to state a case and hence the present summons. 5 The decision refusing the permanent stay was made on 17 July 1998. On 18 August 1998 the plaintiff requested the first defendant to state a case. That request was made in the time prescribed. Subsequently the plaintiff entered into a recognizance as required by s 102 of the Justices Act and that recognizance was entered into in time. However Pt 32 r 13 of the Supreme Court Rules required of the plaintiff that he serve a draft case upon the Clerk of the Local Court within twenty-eight days of the time fixed for the making of the application for the stated case. This meant that the draft case was due to be served before the end of September 1998. It was not. Indeed, it was not served until 30 August 1999, so that there was gross delay in taking this essential step. However, leave to file the stated case out of time was granted by the Registrar of the Local Court on that date, upon the presentation of the draft stated case. 6 On 6 October 1999 a hearing took place before the learned magistrate who then refused to state a case. 7 The hearing on the summons proceeded upon the basis that, notwithstanding the subsequent repeal of the relevant provisions, the proceedings before the magistrate were governed by the Justices Act as in force before the amendments that commenced on 1 March 1999. 8 The magistrate, in refusing to state a case, purported to act under s 103 of the Justices Act. That section provided in sub-s (1): "If the Justice…is…of opinion that the application is merely frivolous, he…may then, but shall not otherwise, refuse to state a case…" 9 Since the magistrate determined that the application was merely frivolous and on that basis refused to state a case, s 104 has been invoked by the plaintiff. This section provides: "Where the Justice…refuses…to state a case, the Supreme Court may, on application by the appellant, order the Justice…to state the case subject to the appellant entering into the recognizance mentioned in sub-section (1) of section 102." 10 It would seem that this court has similar power under s 65 of the Supreme Court Act, but nothing turns on this for present purposes. 11 Mr Aldridge of Senior Counsel, who appeared for the plaintiff on the summons, has submitted that the plaintiff is entitled to the relief sought on a number of grounds. He submitted that the magistrate fell into error, firstly in refusing to state a case on the ground of undue delay. Other grounds were argued, but in the circumstances I find it unnecessary to consider them. 12 The first of the grounds argued involves consideration as to whether or not undue delay in filing the draft stated case can of itself merit a conclusion that the application is "merely frivolous" for the purpose of s 103. Mr Aldridge submitted that delay alone was insufficient. He referred to the decision in Ex parte Greenwell re Williams (1963) 81 WN Pt 1 39 where Asprey J considered the meaning of the expression "merely frivolous". His Honour said, at 43: "What is an application which is 'merely frivolous' in the context of this legislation? In the absence of reference by counsel to any authority binding me as to the construction of this phrase I have obtained assistance in endeavouring to ascertain its meaning in considering the meaning which eminent judges have given to the phrase 'frivolous and vexatious' and I am of the opinion that the addition of the word 'vexatious' to 'frivolous' adds little, if anything, to the meaning of 'frivolous' in this context. I think that s 103(1) is merely a statement of the power of a magistrate to prevent abuse of the process of the court. In the notes to O.25, r 4 in the current White Book are collected various cases dealing with the phrase 'frivolous and vexatious' but I believe that an excellent statement of the meaning to be attributed to it appears in Norman v Matthews (1916) 85 LJ KB 857 where Lush J said: 'In order to bring a case within the description ' (of frivolous and vexatious) 'it is not sufficient merely to say that the plaintiff has no cause of action. It must appear that his alleged cause of action is one which on the face of it is clearly one which no reasonable person could treat as bona fide, and contend that he had a grievance which he was entitled to bring before the Court. Of course it is a question of degree' (1916) 85 LJ KB 857 at 859. In my view those words of Lush J can be applied to s 103(1) to measure the power of a magistrate to refuse to state a case." 13 That decision has been followed by Graham A-J in O'Shannessy v Heagney (unreported, 14 October 1997). 14 In Ex parte Greenwell Asprey J went on to emphasise that the power conferred upon a magistrate by s 103 was a power to be exercised with great caution: "The power conferred by s 103(1) must be exercised with great caution. In Cox v Journeaux (No. 2) (1935) 52 CLR 173 Dixon J (as he then was) said: 'The principle, in general paramount, that a claim honestly made by a suitor for judicial relief must be investigated and decided in the manner appointed, must be observed. A litigant is entitled to submit for determination according to the due course of procedure a claim which he believes he can establish, although its foundation may in fact be slender. It is only when to permit it to proceed would amount to an abuse of jurisdiction, or would clearly inflict unnecessary injustice upon the opposite party that a suit should be stopped' (1935) 52 CLR 713 at 720. In Young v Holloway [1895] p 87 the President (Sir Francis Jeune) said: 'It is so important not to shut out a litigant from what may, even possibly, be the assertion of a just right, that I cannot take on myself, at this stage, to say that this part of the case is so clearly frivolous that I should stop the proceedings' [1895] P. 87, at 91." 15 The reasons which the magistrate gave for his decision refusing to state a case are annexed to an affidavit of the plaintiff's solicitor sworn on 4 November 1999. Having considered those reasons, it seems to me to be clear that the refusal was based upon the delay in presenting the draft stated case, delay which the learned magistrate plainly regarded as unacceptable. At pp 13-14 of the transcript for 6 October 1999 the magistrate said: "Mr Harkness has filed an affidavit in support of the appellant's position whereby he affectively accepts responsibility for the failure to provide the draft stated case. Mr Harkness has set out in some detail that, firstly, that there is a real issue that could be considered by the Supreme Court on a stated case, and that he did not appreciate that timeliness of stated cases appeals was an issue, and that (I think I can summarise this fairly by saying) that because there was no particular deadline that this was not a case for a file that received appropriate attention from Mr Harkness, and that other matters which had fixed deadlines were those which received his attention. Mr Harkness also tells me in that affidavit of the staffing and other difficulties he had in his office at that time which made it very difficult for him to spend a lengthy period of time with a matter such as this. Now to refuse to state a case is a step to be taken with great caution. Section 103 of the Justices Act (as it then was) provided that if the justice or justices is or are of the opinion that the application is merely frivolous he or they may then but shall not otherwise refuse to state a case, provided that the justice or justices shall not in any instance refuse to state a case where the application is made under the direction of the Attorney General (which of course is not what is the situation here). There have been a number of cases which have turned to what is meant by the term frivolous. And it has been interpreted as merely a statement of the magistrate's power to prevent an abuse of the process of the Court. (And I refer there to the decision of Asprey J in Ex parte Greenwell, re Williams, a case in 1963, 81 Weekly Notes Part 1 NSW, page 39. Now this is a case which goes beyond, in my view, substantial delay. The appellant has done nothing. The appellant has entered a recognizance to prosecute this appeal without delay and the appellant has done nothing about that whatsoever. The bank has not written to Mr Harkness asking for their stated case, but then, why would they? They were had obtained a Bankruptcy Notice which apparently remained unserved for some time and was perfectly entitled to seek and enforce that judgment if they could serve the Bankruptcy Notice given that there was no stay that applied. With substantial efficiency the registry has written to Mr Harkness on two separate occasions in November of '98 and May, 1999 (under no obligation whatsoever) and yet neither of those letters prompted Mr Harkness or his client to take any action to pursue this appeal. And it was only once the Bankruptcy Notice was served, and when that Bankruptcy Notice was about to expire, there was any response whatsoever from the appellant. In my view the delay in the prosecution of this appeal is so gross that it is an abuse of court process to allow the appeal process to continue." 16 I observe that the learned magistrate appears to have taken up, in referring to "abuse of court process" part of what Dixon J said in Cox v Journeaux in the passage above cited. 17 Upon reflection, and notwithstanding Mr Newlinds' contrary submissions, I have concluded that Mr Aldridge is correct in his submission that delay alone does not render an application "merely frivolous" so as to entitle a magistrate to refuse to state a case. Certainly delay is an element which may be considered as reflecting upon the bona fides of a request for a case to be stated, but alone it affords an insufficient reason for refusing to state a case, where the Local Court has extended the time for its filing as occurred in this case. 18 Whilst Pt 32 r 13 of the Rules of this Court imposed a time limit for serving the draft case, Pt 32 r 20 provided for an extension of the twenty-eight day period: "(1) Prior to the commencement of proceedings in the Court, any Justice may, on such terms and conditions (if any) as he thinks fit, extend any time fixed by this Division, as well after as before the time expires, whether or not an application for the extension is made before the time expires." 19 In this case the Local Court extended the time for filing the draft stated case. It seems to me that whether or not the appeal process ought to have been put to an end by reason only of delay was a matter to be considered on the application under Pt 32 r 20. If the delay was so gross as to be regarded as inexcusable, then it was open to the Local Court to refuse to extend time under Pt 32 r 20, in which event the appeal process would have been at an end. However once the stated case was accepted in the circumstances that occurred here, the delay was relevant as a circumstance to be considered in relation to the bona fides of the appeal. 20 Mr Newlinds submitted that the learned magistrate did make an overall assessment of the genuineness of the appeal, and that delay was only one factor he considered. I cannot accept that submission. The learned magistrate plainly refused to state a case because of the delay that had occurred. It seems to me that in basing his decision solely upon delay the learned magistrate fell into error. 21 The learned magistrate had before him affidavits sworn by the plaintiff's solicitor and by the plaintiff. The evidence of the plaintiff's solicitor was that he was responsible for the delay that occurred, and not the plaintiff, and that the plaintiff had given him instructions to prepare the draft stated case and had paid for senior counsel not only to appear on the motion for the stay but then to prepare the draft stated case. The plaintiff also swore an affidavit, and neither the plaintiff nor his solicitor was required for cross examination in the Local Court. The assertion that the delay was solely attributable to the plaintiff's solicitor was not put to the test by cross examination. Before determining that this request for a stated case was "merely frivolous" the learned magistrate had to consider whether, in the language of Lush J in Norman v Mathews, approved in Ex parte Greenwell, the alleged cause of action was "one which on the face of it was clearly one which no reasonable person could treat as bona fide and contend that he had a grievance which he was entitled to bring before the court." 22 The bona fides of the request to state a case does not appear to have been sufficiently addressed. 23 Mr Newlinds submitted that I should decline the relief sought in the exercise of my discretion. It was submitted firstly that the Registrar of the Local Court, by whom time was extended, should be considered to have done what he was not empowered to do. Part 32 r 20 empowered "any Justice", not the Registrar. In consequence, Mr Newlinds submitted, if time has not been duly extended, to make the order sought would be an exercise in futility because any stated case would be incompetent without a previous valid order under Pt 32 r 20. 24 I cannot assume that the Registrar was not empowered to do what he did. "Justice" is defined for the purposes of the Justices Act (s 3) as meaning "a Justice of the Peace". In the absence of any relevant evidence, I cannot assume the Registrar did not fit that description. 25 Mr Newlinds also submitted that I ought not make the order sought because an appeal by way of stated case, available only on a question of law, would be bound to fail. Reluctantly, I have decided that it is inappropriate for me to assess the likely outcome of the stated case in the present circumstances, particularly where it is not before this Court in a settled form. 26 I have decided that the learned magistrate should be ordered to state a case. 27 Mr Aldridge submitted that costs should follow the event. Mr Newlinds submitted that costs should be paid by the plaintiff's solicitor because of his responsibility for the delay in the submission of the draft stated case. 28 I propose to reserve costs. In the event that a stated case comes before this court for determination, it seems to me that it would be appropriate for the successful party on that subsequent procedure to have the costs not only of that procedure but also on the present summons. I propose to grant liberty to apply on seven days notice in case, for any reason, no further summons is brought before this Court. Formal orders 29 1. I make an order that the first defendant state a case in the matter of Australian and New Zealand Banking Group Limited v Simon E. Marks-Isaacs which was before the learned magistrate on 17 July 1998. 2. Costs of this summons are reserved. 3. I grant liberty to either party to apply for an order for costs on seven days notice. ******** Last Modified: 09/25/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.