Menzies, Paul --- "Appeals (by way of rehearing) from trial court to Court of Appeal" [2020] PrecedentAULA 30; (2020) 158 Precedent 26

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APPEALS (BY WAY OF REHEARING) FROM TRIAL COURT TO COURT OF APPEAL

By Paul Menzies QC

An appeal is not a common law procedure. It is a creature of statute.^[1]

There are four categories of appeal:^[2]

1. an appeal stricto sensu, where the issue is whether the judgment below was right on the material before the trial court;

2. an appeal by way of rehearing limited to the evidence before the trial court;

3. an appeal by way of rehearing on that evidence supplemented by such further evidence as the appellate court admits under a statutory power to do so; and

4. an appeal by way of a hearing de novo where the appellate court retries all the issues before the trial court.

The word ‘rehearing’ has different meanings depending on the construction of the particular statutory provision. Appeals by way of rehearing under s75A of the Supreme Court Act 1970 (NSW), and like provisions in other states and territories, fall into category 3 above. These will be the focus of the discussion of the powers and functions of appellate courts below.

Section 75A(1), save for the limitations in ss75A(2) and (3), establishes the metes and bounds of an appeal to the NSW Court of Appeal (NSWCA). Where the decision under appeal has been given after a hearing, the appeal will be by way of rehearing (s75A(5)). The NSWCA:

• has the powers and duties of the court below including powers of amendment, drawing of inferences and the making of findings of fact, and the assessment of damages and other money sums (s75A(6)); and

• may receive further evidence (s75A(7)), but only on special grounds (s75A(8)), unless the further evidence concerns matters occurring after the hearing (s75A(9)).

DRAWING INFERENCES AND MAKING FINDINGS OF FACT

The authorities distinguish between appeals which depend on inferences from facts admitted or found by the trial judge and those which depend on the view taken by the trial judge of conflicting testimony. The distinction between the two classes of case is fundamental and almost always decisive.

Facts admitted or found by the trial judge

The High Court (HC) in Fox v Percy^[3] took the opportunity to restate the well-established appeal principles, and in doing so endorsed the judgment of the majority in the NSWCA, specifically the judgment of Beazley JA. Whether it was open to the NSWCA to make the factual findings or draw the inferences it did is plainly illustrated in Fox v Percy.

The facts of the case were as follows. The plaintiff, Ms Fox, was riding a horse up a narrow, winding country road, bordered on one side by a steep drop and on the other by elevated land. Her partner was following, also riding a horse. The defendant, Ms Percy, was travelling in the opposite direction, in a Kombi van, when her van collided head-on with Ms Fox. Ms Fox was severely injured and her horse was killed. The skid marks at the scene, which extended from the rear of the van to somewhere near the point of collision, were all on the van’s correct side of the road. The trial judge found for the plaintiff, the NSWCA split 2:1 in favour of the defendant, and the HC, in a 5:1 decision, dismissed the appeal.

The HC found that the NSWCA had correctly applied the principles about when an appellate court should interfere with a trial judge’s decision.

In the NSWCA, Beazley JA^[4] referred to Abalos v Australian Postal Commission (Abalos),^[5] Devries v Australian National Railways Commission (Devries)^[6] and Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (Earthline)^[7] observing, consistent with those authorities, that the trial judge’s findings afforded ‘prima facie protection from appellate interference’.^[8]

Her Honour then considered the limitation on that protection^[9] – that the protection is lost where ‘the trial judge ... has acted on evidence ... “inconsistent with facts incontrovertibly established by the evidence”’.^[10] Her Honour found that the trial judge had so acted and accordingly allowed the defendant’s appeal.

The skid marks made by the rear wheels of the van, which ended at the rear of the van, were all on the defendant’s correct side of the road. The plaintiff said nothing about where the van was at the time of impact, but argued that all the skid marks showed was progress after impact. The majority in the NSWCA rejected that proposition and found that the available inference was that, at the time of impact, the plaintiff was on the incorrect side of the road, and the trial judge was wrong, on the facts, to reject the defendant’s argument.

As stated by Gibbs ACJ, Jacobs and Murphy JJ in Warren v Coombes:^[11]

‘... in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it’.^[12]

The application of these principles was revisited in the HC in Robinson Helicopter Company Incorporated v McDermott,^[13] where the appellant had failed in the Queensland Court of Appeal (QCA) to have the trial judge’s finding of negligence against it overturned. The facts were complex. The respondent, a passenger in a helicopter, was seriously injured in the crash of a Robinson 22 helicopter while mustering cattle in Far North Queensland. The issue was whether the manual for the maintenance of the helicopter failed to give sufficient direction as to how inspections of the rotor of the helicopter should be carried out to ensure safe operation. Expert evidence was called and the judge made factual findings and drew inferences that absolved the appellant from liability, finding no breach. The QCA allowed the respondent’s appeal. The HC subsequently overturned the QCA’s decision and restored the trial judge’s verdict. The decision is instructive because it illustrates that if there are available inferences which the trial judge accepts, it is difficult on appeal to get any traction on overturning such a finding unless an error in terms of the criteria recognised and repeated in Fox v Percy can be identified.

Conflicting testimony – the significance of demeanour

Abalos and Devries were concerned with the approach of an appellate court where the trial judge had made a finding as the result of accepting the oral evidence of a witness that other evidence contradicted.

It is a serious mistake to think that anything said in Abalos or Devries necessarily prevents an appellate court from reversing a trial judge's finding when it is based, expressly or inferentially, on demeanour. Those cases recognise – in accordance with a long line of authority – that it may be done. But there must be something that points decisively and not merely persuasively to error on the part of the trial judge in acting on his or her impressions of the witness or witnesses.

The various authorities referred to by the plurality in Fox v Percy, and in more detail by McHugh J, produce a variety of expressions which really amount to the same thing: an appeal will succeed if the appellant can show that the prima facie protection afforded to the trial judge – that the judge has the advantage over the Court of Appeal by having seen and heard the witnesses – has been lost. The protection will be lost if the trial judge has ‘palpably misused his advantage’,^[14] and has acted on evidence ‘inconsistent with facts incontrovertibly established by the evidence’^[15] or which was ‘glaringly improbable’.^[16]

In Earthline, for example, the HC held that, on the facts found, the undisputed and documentary evidence was so convincing that no reliance on the demeanour of witnesses could rebut it.^[17]

Therefore, to succeed, an appellant must be able to demonstrate that the documentary evidence is so compelling that the advantage of the trial judge in hearing all of the evidence, rather than the selected parts that an appellate court hears, has been lost. The repeated references in decisions such as Abalos emphasise how much the legal landscape has been changed by contemporary methods of recording information; the elimination, in large part, of civil juries; and the reliance on written submissions. Such cases will require a careful analysis of the reasoning of the trial judge to determine whether an appeal on this basis is worth running.

The same need arises when the trial judge is being asked to prefer objective evidence over demeanour: has the defendant failed to call witnesses to rebut unfavourable witnesses on important issues, as happened in Earthline?

Where there is documentary evidence from which an inference of fraud may be inferred, has the defendant called any evidence which would make that inference unavailable or provided a satisfactory explanation as to why such evidence was not presented? Might the trial judge have been influenced by some unconscious bias? For example, if the witness relied upon by the plaintiff is female; a person of colour; or an Aboriginal or Torres Strait Islander person. All of these issues may need to be considered.

Keep in mind that the trial judge is under enormous pressure, as is the appellate court, to deal as efficiently as possible with an ever-increasing caseload. The more you can assist to ease that burden, the more likely your analysis will be persuasive.

FRESH EVIDENCE ON APPEAL

Although it is not possible to formulate a test which should be applied in every case to determine whether special grounds exist, there are well understood general principles upon which a determination is made. These principles require that, in general, three conditions are met before fresh evidence can be admitted:

1. It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial;

2. The evidence must be such that there is a high degree of probability that there would be a different verdict; and

3. The evidence must be credible.^[18]

The Court has power to make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires (s75A(10) of the Supreme Court Act).

CHANGE OF THE LAW BETWEEN HEARING AT TRIAL AND APPEAL

This will be a matter of statutory construction in every case, principally because of the legislative habit in NSW of preserving the pre-existing law, sometimes in transitional regulations. That must always be considered. That aside, the general principle is that the law which is applied is the law at the time the appeal is heard.^[19]

DISCRETIONARY CONSIDERATIONS

An appellate court will always be cautious in exercising its discretion in favour of an appellant, principally for two reasons:

1. At an interlocutory stage it will need to be comfortably satisfied that the argument in favour of an exercise of power is so compelling that there is nothing the respondent can do that will cure the defect by a final hearing; and

2. At a final hearing, discretion is more likely to be exercised in the appellant’s favour. However, the Court will need to be satisfied that error has been plainly demonstrated in the Fox v Percy, Abalos and Devries sense.

A party is bound by the conduct of its case and cannot raise for the first time on appeal a new argument which it failed, for whatever reason, to put during the hearing.^[20]

In Coulton v Holcombe^[21] the HC accepted there were exceptional circumstances where the Court, in the exercise of its discretion, might allow a new case to be put. In this case, the HC was persuaded by the important public law issues which were raised by the appellant, and by the fact that there was another appeal, not yet heard, where similar arguments would no doubt be advanced. The Court made it clear that circumstances where the discretion would be exercised in favour of an appellant would be ‘rare indeed’.

APPEAL OR NOT?

One should resist the urge to appeal, particularly at an interlocutory stage, or when leave is necessary, unless you can satisfy yourself that an appeal will not do more harm than good. If there is a risk that your opponent will be alerted to an argument they have not considered, and are thereby given an opportunity to meet it by further evidence or argument, it is best not to appeal.

It is important to remember that a decision adverse to your client this week will not have precedential value if it comes from an inferior tribunal or a single judge of the Supreme or Federal Court. It is often better to resist the temptation to appeal, lose and thereby be stuck with an adverse precedent.

CONCLUSION

To return to the beginning: appeals are creatures of statute. The primary task is that of statutory construction. A thorough understanding of the statutory regime is essential to deal with the appeal process.

The statute informs of the circumstances in which an appeal is available, and the authorities inform on how the criteria are applied by the statute.

Paul Menzies QC worked as a solicitor from 1968–73 in Sydney and London, was called to the bar in 1973 and took silk in 1988. He practises in Sydney as a barrister, arbitrator and mediator. EMAIL [e-mail].

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^[1] Attorney-General v Sillem [1864] EngR 352; (1864) 10 HLC 704, 720; South Australian Land Mortgage and Agency Co Ltd v The King [1922] HCA 17; (1922) 30 CLR 523, 552–3; CDJ v VAJ (1998) 197 CLR 172, 196–7 [91]–[95], 230 [184]; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306, 322 [72]; DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226, 245–6 [40]; Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172, 179–80 [20]–[22], 187 [44].

^[2] Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd [1976] HCA 62; (1976) 135 CLR 616, 619–22. See also Eastman v The Queen [2000] HCA 29; (2000) 203 CLR 1, 40–1 [130].

^[3] [2003] HCA 22; 214 CLR 118.

^[4] Percy v Fox [2001] NSWCA 100, [64].

^[5] [1990] HCA 47; (1990) 171 CLR 167.

^[6] [1993] HCA 78; (1993) 177 CLR 472 (Devries).

^[7] [1999] HCA 3; (1999) 160 ALR 588 (Earthline).

^[8] Percy v Fox, above note 4, [64].

^[9] Ibid, [71].

^[10] Devries, above note 6, 479.

^[11] [1979] HCA; 142 CLR 531.

^[12] Ibid, 551 [18].

^[13] [2016] HCA 22.

^[14] SS Hontestroom v SS Sagaporack [1927] AC 37, 47.

^[15] Devries, above note 6, 479.

^[16] Brunskill v Sovereign Marine & General Insurance Co Ltd [1985] HCA 61; (1985) 59 ALJR 842, 844.

^[17] Earthline, above note 7, [90].

^[18] Akins v National Australia Bank (1994) 34 NSWLR 155 per Clarke JA, 160E.

^[19] Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 [9], applying Da Costa v Cockburn Salvage & Trading [1970] HCA 43; (1970) 124 CLR 192 at 208–9.

^[20] Ibid, applying University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481, 483; 60 ALR 68, 71.

^[21] Ibid.