Porter v Gordian Runoff Ltd & Anor [2005] HCATrans 552 (5 August 2005)

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Porter v Gordian Runoff Ltd & Anor [2005] HCATrans 552 (5 August 2005)

Last Updated: 11 August 2005

[2005] HCATrans 552

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S270 of 2004

B e t w e e n -

ROBERT ARTHUR PORTER

Applicant

and

GORDIAN RUNOFF LTD (FORMERLY KNOWN AS GIO INSURANCE LIMITED)

First Respondent

OAMPS LIMITED

Second Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 5 AUGUST 2005, AT 10.08 AM

Copyright in the High Court of Australia

MR A.E. MAROYA: May it please the Court, I appear for the applicant. (instructed by the applicant)

MR J.T. GLEESON, SC: May it please the Court, I appear with MR C.A. MOORE for the first respondent. (instructed by Ebsworth & Ebsworth)

MR P.M. BISCOE, QC: If the Court pleases, I appear with my learned friend, MR A.M. GRUZMAN, for the second respondent. (instructed by Bamford Associates)

GLEESON CJ: Yes, Mr Maroya.

MR MAROYA: Thank you, your Honour. This application raises squarely two matters of general principle. The first is the status of an applicant’s rights where an application was made at great length by his counsel at trial for the trial judge to disqualify himself on the grounds of apprehended bias where the trial judge in fact declined to do so and where the correctness of that extensive application, if I can put it that way, has not been able to be tested by an independent tribunal because of the stifling or suffocating effect of the order for security for costs. As appendant to that the second point is the significance for the law of security for costs where the party from whom that security is sought to be exacted seeks relief only or principally in the form of a new trial so that, amongst other important issues, the serious questions posed by the apprehended bias application can properly be tested.

That is the particular context of this application, your Honours, and it is with that in mind that a new trial is really the principal relief sought by the applicant. This is the aspect which, as the courts below have said, confers a definite flavour of public interest upon the outcome of the case and I need not refer your Honours to any specific examples of that other than what was said by Justice Hodgson at pages 484 to 485 of the second volume of the application book and moreover what Mr Justice Bryson said at page 599 of the application book, volume 2, lines 25 to 45, the findings will have a grave effect for the appellant and further down that they “have an obvious and prominent claim for consideration”.

Very recently, the Full Court of the Federal Court in the Parramatta Design Case [2005] FCAFC 138 at paragraph [39] observed that:

The rule [in Vakauta v Kelly] is of fundamental importance if public confidence in the administration of justice is to be maintained.

That is hardly a surprising or novel proposition but a very important one. As I said earlier, the public interest that the bias application and its refusal in themselves have is one that bears very closely upon the appropriateness, in these circumstances, of an order for security for costs.

GLEESON CJ: Now, I think a problem you have to face up to, Mr Maroya, is this, that these were discretionary decisions, were they not, of Justice Hodgson and of the Court of Appeal so interference with a decision of that kind would not be justified simply because we, for example, happen to have a different view on how the discretion ought to be exercised?

MR MAROYA: Quite so, your Honour, but - - -

McHUGH J: And the complaint that is made against your submission is that you do not identify any error on the part of the Court of Appeal.

MR MAROYA: The error, with respect your Honour, is the dismissal out of hand, if I can put it that way, by Justice Bryson of the new trial aspect of the relief sought by the applicant. We say that whereas the settled practice in England, including in the 19^th century obviously, appeared to be that a plaintiff would not be debarred from pursing his rights by an order for security, such an order would probably follow in the case of an appeal if the appellant were impecunious.

McHUGH J: But, with great respect to the English judges of the 19^th century, that rule seems almost irrational. Why would you have such a rule in relation to new trials but not otherwise?

MR MAROYA: That seems to have arisen out of the operation of Order 58 of the Rules of Court then in force which seem to make a distinction between an appeal in the sense that word is ordinarily understood and a motion for a new trial. In the case of Wightwick v Pope [1902] 2 KB 99 which we have at tab 19 of our bundle of authorities, Sir Richard Collins, Master of the Rolls, described a motion for a new trial as a “class of appeals”. That appears midway through the report at page 100.

McHUGH J: Well, that is historically wrong, of course. New trials could be obtained before appeals ever ended at common law. One could get a new trial motion from the earliest days of the common law.

MR MAROYA: With respect, your Honour, it seems in this case that a new trial motion made within the time contemplated by Order 58 would have been a motion for a new trial on the grounds that the trial, which had been carried to its conclusion, had been vitiated by some conduct of the trial judge. For example, a wrongful failure to take into account certain evidence or even, I respectfully submit, an instance perhaps where the trial judge was asked to disqualify himself on reasonable grounds and failed so to do, which, of course, casts a pall of doubt over the conduct of the trial as a whole.

McHUGH J: It seems extraordinary that if you have an application for a new trial you do not have to give security for costs. If you have an application to enter a verdict in your favour and judgment, you may be ordered to pay security for costs.

MR MAROYA: That may be so, your Honour, but, with great respect, the problem that the applicant here faces is that the application was made in the context of a trial that occupied over 60 days of hearing time. It was a very long application, elaborated at great length by senior counsel then appearing for the applicant. The applicant - - -

McHUGH J: But when you were asked what your point of discretionary error was, you referred to the way that Justice Bryson dealt with the question of security for costs in a new trial application but what his Honour said at 602 is:

In my opinion Nineteenth Century practice about new trial applications in England should have no influence on the application of Pt 51 r 16, which extends to and should be applied to appeals generally.

Now, where is the error in that?

MR MAROYA: Well, the state of the law behind the point that the applicant was trying to make, had it been properly exposed to his Honour, would have led to a different result because we seek to make a case based on a chain of these English authorities and we say, by analogy, when one turns to the Australian cases, in Fletcher v Federal Commissioner of Taxation [1992] FCA 388; (1992) 37 FCR 288, which we have at tab 6 of our bundle, Justice Hill addressed himself to the question of whether security for costs should be awarded against an impecunious litigant seeking to appeal to the Federal Court against a finding of the AAT.

In that case Mr Justice Hill at 291 declined to make the orders for security sought by the respondent Commissioner of Taxation on the basis that while referred to as an appeal, what was sought by the applicants was properly to be regarded as a trial of the issues in the original jurisdiction of the Federal Court. So it flowed from that as a matter of practicality and common sense that any order for security would have stifled the applicants’ appeal and cause what his Honour described as a “manifest injustice”.

Now, interestingly, in Citicorp Australia v Cirillo, which we have at tab 4 – that is an unreported judgment of Mr Justice Sulan in the Supreme Court of South Australia given on 30 June 2003 – his Honour at paragraph [20] stated that he did not accept that Justice Hill in Fletcher was drawing any distinction whatsoever in that case between an appeal from an administrative tribunal rather than a court of first instance. That, I respectfully submit, leaves clearly open the question of whether Fletcher v Federal Commissioner of Taxation should be adopted as authority for which the applicant contends it stands, namely that security for costs should not be awarded in respect of applications which are really for a new trial of the issues, vitiated as they are by the conduct of the trial - - -

McHUGH J: Each of these cases must turn on its own facts surely. Even in England, does not Wightwick v Pope hold that you can get security for costs even in an application for a new trial?

MR MAROYA: It does, yes, but - - -

McHUGH J: I mean here you have a situation where the respondents have already expended over $1 million in costs which they are unable to recoup, will not be able to recover. They assert that it will cost them, I think, at least $300,000 for this appeal and the security that is ordered is $150,000.

MR MAROYA: The applicant says two things about that, if I can come to this point first. One cannot, with respect, look at things through the prism of the party who will be brought to an appeal and who is - - -

McHUGH J: One can accept that but it is a factor to be taken into account and it must weigh heavily in a case where there are adverse findings of fact based on demeanour and credibility which, prima facie, are very difficult to overturn.

MR MAROYA: Unfortunately, that hinges upon the fate of the applicant’s apprehended bias application. Those questions must necessarily cast some doubt over the manner in which those issues were handled at trial. Now, if I might briefly say something about Wightwick v Pope in defence of our thesis about the new trial motion. Wightwick v Pope should be regarded with caution because, I respectfully submit, it was decided per incuriam because a number of important cases do not appear to have been cited to the Court of Appeal in that instance. For example, the case of Harlock v Ashberry nor Rickaby v Rickaby – and we have those at tab 8 and tab 13 respectively – do not seem to have been mentioned by counsel in their argument nor in the court in its very brief judgment. In 1901 not very long - - -

GLEESON CJ: There is nothing wrong with very brief judgments.

MR MAROYA: Of course not. It is probably to be commended your Honour. But in 1901 shortly before Wightwick was decided we have Lord Justice Rigby, with whom Lord Justices Vaughan Williams and Stirling concurred saying that:

It is the undoubted rule now since the Act of 1890, as was laid down in Heckscher v Crosley, that security for the costs of a motion in the Court of Appeal for a new trial . . . will not be required - - -

McHUGH J: Yes, but counsel for the defendants referred to Heckscher v Crosley and in Heckscher v Crosley, Lord Esher said that the old practice should be adopted and that we should adhere:

as nearly as possible as they were dealt with by the Divisional Court, when the motion for a new trial was made there in the first instance. As a general rule no security for costs was required to be given by a party moving for a new trial –

and the point of new principle arising from the old authorities, or the point of practice, was referred to in Wightwick and the three bench Court of Appeal said it is not an absolute rule.

GLEESON CJ: After consulting with the other members of the Court of Appeal.

MR MAROYA: Which seems to be a very irregular way of doing it, if I may say so.

GLEESON CJ: Not about a rule of practice. There were not many judges in those days and they could have probably consulted about their views of this rule of practice and whether the rule of practice ought to be altered by them – it was their rule of their practice – over lunch.

MR MAROYA: Moving from that point to the Fletcher point, the application, I respectfully submit, still leaves open the question of what is to be done when an applicant seeks to re-agitate by a new hearing very serious questions including findings of fact that have an adverse and grave effect upon him which were made, moreover, in the context of a trial in respect of which an elaborate bias application was made. I cannot say anything more about that and in most other respects the applicant relies upon the written summary of argument which has been filed with the application books.

GLEESON CJ: Thank you, Mr Maroya.

MR MAROYA: Thank you, your Honour.

GLEESON CJ: Yes, Mr Gleeson.

MR GLEESON: Your Honours, as the application has been presented this morning, there is no square challenge to the first step of the analysis of Justice Hodgson in the Court of Appeal, namely there were special circumstances. In coming to that conclusion his Honour had regard to four matters. Impecuniosity was one, but there were three other critical matters which taken together produce special circumstances. They included, as has been mentioned, an exceptionally long appeal with much cost, a very difficult appeal and a large cost burden hanging over from the trial below. Those matters were open in law taken together to constitute special circumstances.

At stage two his Honour did weigh the matters which might point in the other direction. They included the fact that the order may stifle litigation and they included the fact that there was an apprehended bias argument and his Honour concluded – and the Court of Appeal reviewed it and said there was no error – that in the discretion, weighing all those matters, it was open to his Honour to conclude that security was appropriate.

Could I say this in respect to the apprehended bias argument. One of the interesting features of the 80-page notice of appeal is that only four lines are devoted to the apprehended bias argument. No attempt has been made to crystallise what it was that is said to be the error. That is at page 491 of volume 2. There is simply a reference back to the lengthy submissions made by Mr Hayes at first instance.

Secondly, neither Mr Hayes nor Mr Hutley on appeal attempted even in a summary way within the confines of the application to indicate where the strength, if any, lay in this argument. Mr Hutley candidly said the dimensions of the complaint were too big to be able to say anything useful about the strength or weakness of it. In that circumstance, we would submit that the Court of Appeal was entitled, as they did at pages 605 and then at the foot of 607, to say that that factor can only be put as a “neutral” factor in the scales in circumstances where counsel is not able to really indicate the strength it might have.

GLEESON CJ: Thank you, Mr Gleeson. Mr Biscoe, were you supporting Mr Gleeson?

MR BISCOE: I am, your Honour.

GLEESON CJ: What do you have to say about Mr Gleeson’s submissions, Mr Maroya?

MR MAROYA: I have just a few very short points, your Honour. First, there was attempted to be tendered an affidavit sworn by the plaintiff in support of Mr Hayes’ application for bias and that was not accepted by the trial judge. That necessarily impinges upon the question of the availability of any evidence other than the circumstances and specificities adverted to by Mr Hayes while he was on his feet in support of that application.

Secondly, the problem that counsel advancing such an application in circumstances like those before Justice Hodgson in the Court of Appeal is that the time for argument is necessarily abbreviated and it is not possible to bring the court really to any appreciation of the issues other than those issues in their broadest contours. The fact that that is not able to be done does not detract, in my very respectful submission, from the gravity of the circumstances surrounding the bias application, nor can they detract from the simple fact that the bias application was made and elaborated over many pages of transcript. Thank you, your Honour.

GLEESON CJ: Thank you, Mr Maroya.

We are of the view that there are insufficient prospects of success of an appeal to warrant a grant of special leave in this matter. The application is dismissed with costs.

We will adjourn for a short time to reconstitute.

AT 10.29 AM THE MATTER WAS CONCLUDED