New South Wales Supreme Court CITATION : Gregory's Transport v Ray's Haulage [2007] NSWSC 1442 HEARING DATE(S) : 7 December 2007 JUDGMENT DATE : 12 December 2007 JURISDICTION : Common Law JUDGMENT OF : Associate Justice Harrison DECISION : (1) The orders of Magistrate Brown dated 8 May 2007 are affirmed; (2) The plaintiff is to pay the defendant's costs as agreed or assessed. CATCHWORDS : Refusal of adjournment - Local Court - entry of judgment LEGISLATION CITED : Local Courts Act 1982 Allen v Kerr & Anor [1995] Aust Torts Reports 81-354 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Carr v Neill [1999] NSWSC 1263 Devries v Australian National Railways Commission (1993) 177 CLR 472 House v The King (1936) 55 CLR 499 Humphrey v Wills (1989) VR 439 CASES CITED : Menzies v CRCI Pty Ltd [2007] NSWCA 188 Optiz v Repatriation Commission (1991) 29 FCR 50 RL & D Investment Pty Ltd v Bisby (2002) 37 MVR 479 Sali v SPC Ltd (1993) 116 ALR 625 State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588 Sullivan v Department of Transport (1978) 20 ALR 323 Thomas v Nedeljkovic [2004]NSWSC 524 PARTIES : Gregory's Transport Pty Ltd (Plaintiff) Ray's Haulage Pty Ltd (Defendant) FILE NUMBER(S) : SC 12775/07 COUNSEL : Mr A J Patterson (Plaintiff) Mr B L Jones (Defendant) SOLICITORS : John Hertz & Associates (Plaintiff) Marsden's Law Group (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 1444/05 LOWER COURT JUDICIAL OFFICER : Brown LCM LOWER COURT DATE OF DECISION : 8 May 2007 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE HARRISON WEDNESDAY, 12 DECEMBER 2007 12775/2007 - GREGORY'S TRANSPORT PTY LTD v RAY'S HAULAGE PTY LTD JUDGMENT (Refusal of adjournment – Local Court - entry of judgment) 1 HER HONOUR: By summons filed on 4 June 2007 the plaintiff seeks firstly, an order that the judgment of his Honour Brown LCM at Blacktown made 8 May 2007 be set aside or stayed pending the determination of this appeal; and secondly, an order that the judgment be set aside for the denial of natural justice. There are no grounds of appeal stated in the summons. 2 The plaintiff is Gregory's Transport Pty Ltd ("Gregory's"). The defendant is Ray's Haulage Pty Ltd ("Ray's Haulage"). Gregory's Transport relies upon the affidavit of John Richard Hertz sworn 1 June 2007. As Gregory's was the defendant in the Local Court and the plaintiff in this court and Ray's Haulage was the plaintiff in the Local Court and defendant in this court, I shall, for convenience, refer to the parties by name. 3 Submissions for Gregory's state that there was a denial of natural justice because the Magistrate erred firstly, by not allowing an adjournment of the further amended statement of claim; secondly, by not allowing Gregory's witness statement in evidence, although late, as no prejudice had occurred because Ray's Haulage had been able to amend its pleadings; thirdly, by denying Gregory's the opportunity and failing to allow Gregory's to put Ray's Haulage to proof and test the case generally; fourthly, that the Magistrate had no basis for striking out the amended defence which had been orally particularised from the bar table but which in any event required the plaintiff to prove on the balance of probabilities its cause and claim; and fifthly, that the Magistrate erred in entering judgment for a sum which had not been proved on a default basis. 4 The Magistrate ordered that Gregory's defence be struck out and entered judgment in favour for Ray's Haulage in the sum of $21,031.18. 5 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 73 of the Local Courts Act 1982 permits a party who is dissatisfied with a judgment as being erroneous on a point of law to appeal to this Court. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor [1995] Aust Torts Reports 81-354; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156; Carr v Neill [1999] NSWSC 1263 and R L & D Investments Pty Ltd v Bisby (2002) 37 MVR 479; [2002] NSWSC 1082. The judicial officer cannot act on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. 6 Section 75 of the Local Court Act provides that the Court may determine an appeal either (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal. Procedural fairness and error of law 7 The decision to grant or refuse an adjournment is a discretionary one. The guiding principle is set out in House v The King (1936) 55 CLR 499 at 504-505 the High Court said: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." 8 The factors to be taken into account in considering whether to grant an adjournment are set out in State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146; Sali v SPC Ltd (1993) 116 ALR 625; Thomas v Nedeljkovic [2004] NSWSC 524; and more recently in Menzies v CRCI Pty Ltd [2007] NSWCA 118 at [27] where the Court of Appeal stated: "It was put that, in accordance with JL Holdings , the Court should grant an amendment, unless prejudice was caused to the other side that could not be met by an adjournment and costs, and that any prejudice in this case could have been so met. However, in my opinion, where an amendment would require vacation of a hearing date which was set to take place within a few days, generally there is prejudice through prolongation of the litigation that is not entirely met by costs, and the imposition of that prejudice on the other party needs to be justified by the strength of the case made for the indulgence by the party applying for it. I do not think this was made out in this case, for the reasons I have given, especially in circumstances where no explanation was given for not complying with the terms of the previous indulgence granted." 9 A denial of procedural fairness in the exercise of a discretion will result in an error of law – see Sullivan v Department of Transport (1978) 20 ALR 323; Opitz v Repatriation Commission (1991) 29 FCR 50; Humphrey v Wills (1989) VR 439. The proceedings in the Local Court 10 On 22 November 2005, Ray's Haulage commenced proceedings in the Local Court at Blacktown. 11 On 13 April 2006, the matter was referred to arbitration where Ray's Haulage, who was unrepresented at the time, was unsuccessful. On 15 June 2006, by consent, an order was made that there be a rehearing. On 1 September 2006, directions were made that Ray's Haulage was to file and serve its evidence on or before 4 September 2006; Gregory's was to file and serve its evidence in reply on or before 2 October 2006; and Ray's Haulage was to file and serve any evidence in reply on or before 16 October 2006. 12 On 1 September 2006, Ray's Haulage filed and served its evidence. Gregory's failed to comply with the directions to file its evidence. 13 On 20 October 2006, by consent, the court ordered that Gregory's was to file and serve its proposed amended statement of claim by 1 December 2006; and Ray's Haulage was to file and serve an amended defence by 12 January 2007 and affidavit evidence by 9 March 2007. The matter was listed for review on 9 March 2007. 14 On 22 November 2006, Ray's Haulage filed and served its amended statement of claim, together with a notice to admit facts and authenticity of documents on 28 November 2006. Gregory's did not respond to the notice to admit. 15 On 23 February 2007, Gregory's served its amended defence (seven weeks late). 16 On 9 March 2007, the Local Court proceedings were set down for hearing on 8 May 2007 and Gregory's was ordered to file and serve its evidence by 23 March 2007. Gregory's failed to file and serve any evidence by 23 March 2007. 17 On 4 May 2007, Gregory's sought to serve a witness statement of Michael Gaebler and informed Ray's Haulage that it would seek to withdraw admissions made as a result of the failure to comply with the notice to admit. No Motion was filed seeking to withdraw admission The Magistrate's decision 18 On 8 May 2007, the Magistrate refused Gregory's application for an adjournment (t 1.19-24); refused the filing of Ray's Haulage's further amended statement of claim (t 1.25); refused to accept Gregory's application to file the affidavit of Michael Gaebler (t 3.56; t 4.3), struck out Gregory's defence and entered judgment for Ray's Haulage (t 7.26-30). 19 The Magistrate in his extempore reasons stated (at t 7.15): "It seems to me that this matter's been to arbitration so the parties should know exactly the case that they have to meet. We are rehearing an arbitrated matter, we're not running a different case. The simple situation is you clients have been dilatory to the point of getting the matter to trial without bothering to file the evidence that they were going to rely on. It seems to me that I can't say it's the solicitor's fault. In the circumstances I have no belief that whatever orders are made are likely to be complied with for the further proceedings of this matter. The defence is struck out." (t 7.15-27) 20 In the light of the history of non-compliance with court directions by Gregory's, it was open to the Magistrate to refuse to grant an adjournment, not grant leave for the filing of an affidavit and strike out the defence. At the hearing of this appeal, counsel for Gregory's submitted that Ray's Haulage could not make out its case and had he been given the opportunity to cross examine the plaintiff's deponent, he would have been able to prove that Ray's Haulage case could not be made out. 21 Counsel for Gregory's submitted to the Magistrate in the Local Court that "the plaintiff really doesn't have a case (t 3.4) and explained that Ray's Haulage relied on tax invoices and its case was that Ray's Haulage was not allowed to raise tax invoices pursuant to an agreement. The Magistrate pointed out that none of this was pleaded in the defence. Gregory's amended defence did not raise any substantive defence but amounted to a series of denial and non-admissions that really amounted to a general denial of Ray's Haulage's case. 22 The Magistrate then stated "there is no defence indicated except you're going to put the plaintiff to proof" (t 3.30-35) and counsel replied that he was entitled to do that. The only way that Ray's Haulage could prove that there was an agreement in place which was contrary to that pleaded in the amended statement of claim would have been to cross examine Mr Sariful "Ray" Rahman and show him the document. Counsel for Gregory's did not raise the issue of cross examination with the Magistrate. In these circumstances it is my view that Gregory's was afforded natural justice. There is no error of law. The orders of Magistrate Brown dated 8 May 2007 are affirmed. 23 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. The court orders: (1) The orders of Magistrate Brown dated 8 May 2007 are affirmed. (2) The plaintiff is to pay the defendant's costs as agreed or assessed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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