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Sanderson v Bank of Queensland Limited

 

[2016] QCA 137

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Sanderson & Anor v Bank of Queensland Limited [2016] QCA 137

PARTIES:

MICHAEL FRANCIS SANDERSON
PHYLLIS KAREN SANDERSON
(applicants)
v
BANK OF QUEENSLAND LIMITED
ABN 32 009 656 740
(respondent)

FILE NO/S:

Appeal No 11066 of 2015

DC No 2801 of 2014

DIVISION:

Court of Appeal

PROCEEDING:

Application for Leave s 118 DCA (Civil)

ORIGINATING COURT:

District Court at Brisbane – Unreported, 7 October 2015

DELIVERED ON:

31 May 2016

DELIVERED AT:

Brisbane

HEARING DATE:

29 March 2016

JUDGES:

Morrison and Philip McMurdo JJA and Burns J

Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

  1. Refuse the application for leave to appeal.
  2. Applicants to pay the respondent’s costs of the application.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PARTIES AND REPRESENTATION – GENERALLY – where the applicants are directors of a company to which the respondent bank alleges it advanced a sum of money – where the respondent alleges the company defaulted in repaying the loan and commenced proceedings in the District Court against the applicants as director guarantors – where the applicants are impecunious and without legal representation – where the applicants filed an interlocutory application seeking orders to ensure ‘equality of arms’ between the parties or that the respondent’s claim be dismissed – where the learned primary judge dismissed the application on the basis that Australian law does not recognise and cannot provide the orders sought – where the applicants apply for orders in similar terms ensuring ‘equality of arms’ or that the proceeding be dismissed because of inherent unfairness and injustice resulting from their lack of legal representation – whether the application for leave to appeal should be allowed

AMF15 v Minister for Immigration and Border Protection [2016] FCAFC 68, cited

Dietrich v The Queen (1992) 177 CLR 292; [1992] HCA 57, cited

Gajic v Harb [2011] VSCA 132, cited

Hamod v New South Wales [2011] NSWCA 375, cited

Jago v District Court (NSW) (1989) 168 CLR 23; [1989] HCA 46, cited

Jago v District Court of NSW (1988) 12 NSWLR 558, cited

New South Wales v Canellis (1994) 181 CLR 309; [1994] HCA 51, cited

Ragg v Magistrates’ Court of Victoria (2008) 18 VR 300; [2008] VSC 1, cited

Smith v Ash [2011] 2 Qd R 175; [2010] QCA 112, cited

Tomasevic v Travaglini (2007) 17 VR 100; [2007] VSC 337, cited

COUNSEL:

The applicants appeared on their own behalf

M Jones with B O’Brien for the respondent

SOLICITORS:

The applicants appeared on their own behalf

Thomson Geer Lawyers for the respondent

[1] MORRISON JA:  I have read the reasons of Philip McMurdo JA and agree with those reasons and the orders his Honour proposes.

[2] PHILIP McMURDO JA:  The applicants seek leave to appeal an interlocutory judgment of the District Court, given in a proceeding in which the respondent bank claims from them an amount of approximately $500,000.  The bank’s case is that it advanced an amount of $462,500 to a company called Styx Holdings Pty Ltd, the repayment of which was guaranteed by the applicants.

[3] That was a company of which the directors were the applicants.  According to the bank’s pleading, the purposes of the loan were to fund the refinancing of an existing business loan, certain property improvements and the acquisition of certain plant and equipment.

[4] The applicants are without legal representation.  This may explain some imprecision in their pleading, but one remarkable feature is its response to the allegation that this loan was made to their company.  They admit that an amount of $462,500 was advanced to the company on or about the date alleged by the bank.  And they admit that the company paid interest on that loan.  But they plead that the identity of the lender is unclear and assert that the bank has been unable or unwilling to supply evidence, to their satisfaction at least, that the bank supplied “valuable consideration” (which appears to mean that the bank made the advance).

[5] As to the allegation that they are guarantors, the applicants plead that with the passage of time since the guarantee was allegedly signed by them in 2008, they do not recall whether they did sign it.  But they also plead that there have been some alterations to the guarantee document which are “uninitialled” and “fraudulent”.

[6] The applicants plead that the respondent breached the Consumer Credit Code (Qld) in certain respects in this transaction.  However the Code would appear to be inapplicable, because the loan was not made for personal, domestic or household purposes.[1]

[7] By a counterclaim, the applicants allege that the bank has not acted in “a timely and prudent manner” and with “care and diligence” in its attempts to obtain repayment from the debtor company (which is now in liquidation).  And they allege that the bank has acted improperly in its attempts to realise the security which had been granted by the company.  By their counterclaim they seek not only to be relieved of payment under the alleged guarantees, but also damages in various sums, including a claim of more than $4 million for the effect of the bank’s conduct upon their earning capacity and another in an amount of $10 million “for past and future, mental suffering, loss of enjoyment of life, inconvenience, grief, anxiety, humiliation, emotional distress and the irretrievable loss of priceless time.”

[8] The proceeding has been the subject of several interlocutory applications and is yet to be listed for trial.  One of those applications came before Kingham DCJ last July, in which the applicants sought a stay of the proceeding unless the bank paid for the applicants to be legally represented.  Her Honour refused the application, being unsatisfied that such an order could or should be made.  She referred to the difficulties experienced by unrepresented litigants but expressed her confidence that whoever was the trial judge would be able to ensure that there was no unfairness in the trial.

[9] A few months later, the proceeding was before Butler DCJ, on the bank’s application for an order that there not be a jury trial, as the applicants had requested.  It also sought a direction that any amended defence and counterclaim, as the applicants had foreshadowed, be filed by a certain date.  The applicants’ response was to file two applications returnable on the same day as those filed by the bank.  The first effectively sought summary judgment against the bank on its claim.  The second was based upon essentially the same argument which Kingham DCJ had rejected, namely that the applicants could not have a fair trial because in this case there would not be an “equality of arms”.  Their application sought orders to ensure “equality of arms” or alternatively that the claim be dismissed.

[10] Butler DCJ adjourned the application to dispense with a jury so that it could be considered upon the basis of the proposed amended defence and counterclaim.  He made directions for the filing of that pleading and for witness summaries and disclosure of documents.  His Honour dismissed each of the applications by the present applicants.  There is no challenge to the dismissal of the application for summary judgment.  The application to this court is for leave to appeal against his Honour’s refusal to order “equality of arms” or to dismiss the proceeding if that could not be done.

[11] Butler DCJ observed, correctly, that this was a similar application to that which had been refused by Kingham DCJ (although in the case before his Honour there was an alternative claim for the dismissal, rather than a stay of the proceeding).  He noted that the applicant Mr Sanderson had addressed him “at some length, both in a written outline and in … oral submissions” and had “pointed to comments by eminent Australian legal figures that referred to the difficulty that unrepresented litigants can have before the courts”.  Mr Sanderson had also cited decisions of the European Court of Human Rights in relation to unrepresented litigants.  Butler DCJ said that those European cases were of little assistance because they did not relate to Australian law.

[12] His Honour considered the applicants’ argument that the orders which they sought could be made under r 367 of the Uniform Civil Procedure Rules, which provides that:

“The court may make any order or direction about the conduct of a proceeding it considers appropriate, even though the order or direction may be inconsistent with another provision of these rules.”

His Honour acknowledged the breadth of the rule and said that any order or direction made under it must be directed towards the just and expeditious resolution of a proceeding, consistently with r 5 of the Uniform Civil Procedure Rules.

[13] Butler DCJ said that “the specific matter that concerns the defendants here is the lack of legal representation”.  As to that matter, his Honour referred to Dietrich v The Queen,[2] in which it was held that, in the absence of exceptional circumstances, a trial of a person charged with a serious criminal offence, who through no fault is unable to obtain legal representation, should be adjourned, postponed or stayed until legal representation is available.  He also referred to New South Wales v Canellis,[3] quoting from this passage from the judgment of Mason CJ, Dawson, Toohey and McHugh JJ:[4]

“There is no suggestion in the majority judgments [in Dietrich] that a court could exercise a similar jurisdiction in civil proceedings or in committal proceedings; nor do they suggest that such a jurisdiction could be exercised in favour of an indigent person charged with a criminal offence which is other than serious.”

His Honour also referred to a decision of the Victorian Court of Appeal in Gajic v Harb,[5] where it was held that in the facts and circumstances of that civil trial, a party had not been denied procedural fairness by being without legal representation.

[14] His Honour concluded as follows:

“It’s clear from those authorities that this Court has no power either to discharge or to stay the civil proceedings on the basis that the defendant is unrepresented.  The processes before the Court to provide for procedural fairness to be available to all litigants in civil matters - that, of course, does not mean that all litigants in civil matters are going to have equal representation or equal skill in the presentation of their cases.  Of course, that’s true even where there is legal representation.  The opposing barristers or lawyers might differ in ability and knowledge.

I understand and recognise what’s been said to me by Mr Sanderson, but the simple matter is that, on the law as it stands in Australia in relation to civil proceedings such as this, there’s no power to grant an order which might meet his express concerns.  Therefore, his application in that respect – in respect of the issue of equality of arms is dismissed.”

[15] By s 118(3) of the District Court of Queensland Act 1967 (Qld), that judgment can be appealed only with the leave of this court, it being an interlocutory judgment.  Relevant to the exercise of this court’s discretion to grant or refuse leave to appeal can be the existence of an important point of law, a question of general or public importance or a substantial injustice which needs to be corrected.[6]  On the applicants’ argument, there would be a substantial injustice from the judgment of Butler DCJ, because it has the consequence that this case will proceed to a trial which they say will be unfair.  On the face of their argument, the judgment is of sufficient importance to warrant the grant of leave to appeal, if that appeal has any arguable merit.  The merit or otherwise of the proposed appeal must therefore be considered.

[16] The orders which would be sought by the applicant, should they be granted leave to appeal, are as follows:

“1.In order to ensure a fair trial and fair hearing, of the claim filed by the respondent on 23 July 2014, the appellants request that orders be made that ensures we the defendant’s human rights are not continued to be breached by ensuring “Equality of Arms” and that we the appellants:

a.have a reasonable opportunity of presenting our case under conditions that do not disadvantage us as against other parties to the proceedings.

b.are not disadvantaged by financial resources available that undoubtedly impacts.

c.are not disadvantaged by a lack of legal aid to that of the respondent that put the appellants in an unacceptable state of inequality.

2.In the event that the court is unable to make orders that ensure “equality of arms” resulting in a fair hearing and trial of the claim, the claim, all orders and all cost orders be dismissed for the following reasons:

a.there has been no “Equality of Arms” to date resulting in unfairness and injustice and this will continue.

b.an unfair hearing and trial cannot be just.

c.the rules state that the interest of justice is paramount.”

[17] The expression “equality of arms” is a reference to a principle of international human rights, deriving from Article 14 of the International Covenant on Civil and Political Rights (“the ICCPR”), an instrument to which Australia is a party.  Relevantly to the present argument, Art 14 provides as follows:

“1.All persons shall be equal before the courts and tribunals.  In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law.

3.In the determination of any criminal charge against him, everyone shall be entitled to the following minimum guarantees, in full equality …

(d)To be tried in his presence, and to defend himself in person or through legal assistance of his own choosing; to be informed, if he does not have legal assistance, of this right; and to have legal assistance assigned to him, in any case where the interests of justice so require, and without payment by him in any such case if he does not have sufficient means to pay for it … .”

[18] In a judgment upon which the applicants rely, Ragg v Magistrates Court of Victoria,[7] Bell J in the Supreme Court of Victoria explained the expression “equality of arms” as follows:[8]

“A number of important rules of law and practice apply to regulate and moderate the adversarial nature of [a criminal] trial, but it has the appearance, and often the reality, of a ritual battle.  Equality of arms is an international human rights principle that picks up the language of the battle to explain some aspects of the most important of those rules - the right to a fair trial.”

In an informative discussion of the principle, Bell J there referred to its application in civil as well as criminal cases, noting that in decisions of the European Court of Human Rights, the principle has been applied with “greater latitude” in civil cases than in criminal cases.[9]  In an earlier judgment, Tomasevic v Travaglini,[10] Bell J noted that the ICCPR had not been incorporated into Australian law so that it did not operate as a direct source of individual rights and obligations,[11] but that it could have some significance as follows:[12]

“Subject to certain limitations and to an evolving extent, the ICCPR, and … other [international] instruments, may at least inform the interpretation of statutes (so as to be consistent with and not to abrogate international obligations), the exercise of relevant statutory and judicial powers and discretions, the application and operation of the rules of natural justice, the development of the common law and judicial understanding of the value placed by contemporary society on fundamental human rights.”

[19] In Dietrich it was argued that, at least in an indictable matter, the absence of legal representation for an accused who cannot afford to engage counsel meant that the trial was unfair and that any conviction should be quashed.[13]  One suggested source for that right was said to be Art 14(3) of the ICCPR.  Mason CJ and McHugh J discussed the relevance of the ICCPR, observing firstly that its ratification had no direct legal effect upon domestic law, the rights and obligations contained in the ICCPR not being incorporated into Australian law unless and until specific legislation is passed implementing the provisions.[14]  Their Honours noted the view expressed by Kirby P in Jago v District Court of NSW,[15] that Australian judges may look to an international treaty which Australia has ratified as an aid to the explication and development of the common law where that is uncertain.[16]  But they held that there was no uncertainty or ambiguity in domestic law in any relevant respect; rather the ICCPR was being employed “to declare that a right which has hitherto never been recognized should now be taken to exist.”[17]  They continued:[18]

“Moreover, this branch of the applicant’s argument assumes that Art 14(3)(d) of the ICCPR supports the absolute right for which he contends.  An analysis of the views of the Human Rights Committee on communications submitted to it relating to Art 14(3)(d) reveals little more than that the Committee considers that legal assistance must always be made available in capital cases.  However, the European Court of Human Rights has approached the almost identical provision in the [European Convention for the Protection of Human Rights and Fundamental Freedoms] by emphasising the importance of the particular facts of the case to any interpretation of the phrase ‘when the interests of justice so require’.  As will become clear, that approach is similar to the approach which, in our opinion, the Australian common law must now take.”

[20] More generally, most of the judgments in Dietrich rejected the argument that under Australian law, an indigent accused on trial for a serious criminal offence has a right to the provision of counsel at public expense.[19]  The prevalent view in Dietrich was as stated in this passage from the judgment of Mason CJ and McHugh J:[20]

“Instead, Australian law acknowledges that an accused has the right to a fair trial and that, depending on all the circumstances of the particular case, lack of representation may mean that an accused is unable to receive, or did not receive, a fair trial.  Such a finding is, however, inextricably linked to the facts of the case and the background of the accused.”

[21] It could hardly be thought that the ICCPR could affect the common law of Australia in relation to the fairness of a trial of a civil case, although, according to Dietrich, it does not for a criminal case.  And the principle from the majority judgments in Dietrich, that a trial should proceed without representation in exceptional cases only, does not extend to civil litigation, as appears from the High Court’s subsequent judgment in NSW v Canellis in the passage which I have set out above at [13].

[22] Clearly the duty of courts to ensure that any trial is fair extends to civil as well as criminal cases.  Clearly also the absence of legal representation for a party is likely to be relevant, in an individual case, to the discharge of the court’s duty to ensure that the trial is fair.  The obligation of a trial judge to take appropriate steps to ensure that an unrepresented litigant receives a fair trial was explained by Beazley JA in Hamod v New South Wales,[21] in terms which I would respectfully adopt and which were recently adopted by the Full Court of the Federal Court in AMF15 v Minister for Immigration and Border Protection.[22]  The Full Court there considered an argument that an unrepresented applicant seeking judicial review of a decision of the then Refugee Review Tribunal had been denied procedural fairness by the Federal Circuit Court denying him “a fair hearing, the right to legal representation or equality of arms”.  The appeal was allowed by the Full Court but not on the basis of that argument, which the court found was unnecessary to decide, save that their Honours said that they rejected the contention that the applicant had a right to publicly funded legal representation as an aspect of the requirements of procedural fairness or, alternatively, that he was entitled to have the proceedings stayed.[23]  The Court (Flick, Griffiths and Perry JJ) said:[24]

“The fact that the applicant was unrepresented is a factor which may be taken into account, along with others, in determining whether there has been a denial of procedural fairness but we doubt that this factor alone would ever warrant a finding of procedural unfairness in a hearing of the present kind.”

[23] It follows that the equality of arms principle does not entitle the present applicants to legal representation or of itself, provide a basis for permanently staying or dismissing this proceeding if they remain unrepresented.  The question is whether this proceeding can be fairly determined in all the circumstances, including that the applicants are without legal representation.  In the applicants’ argument, two points of principle seem to be overlooked.  The first is that fairness is a standard which is assessed by reference to all parties of the dispute.[25]  The second is that the court’s duty is to ensure that a trial is fair, which is a different thing from what Dawson J in Dietrich described as “the attainment of perfect justice”.[26]  In Jago v District Court (NSW), Brennan J said:[27]

“If it be said that judicial measures cannot always secure perfect justice to an accused, we should ask whether the ideal of perfect justice has not sounded in rhetoric rather than in law and whether the legal right of an accused, truly stated, is a right to a trial as fair as the courts can make it.  Were it otherwise, trials would be prevented and convictions would be set aside when circumstances outside judicial control impair absolute fairness.”

Fairness does not require an outcome whereby the bank cannot prosecute its case in the absence of “perfect justice”.

[24] The applicants say that they are disadvantaged not only by being unrepresented but also by other personal circumstances.  Mr Sanderson says that he suffers from what he describes as dysgraphia.  He says that in his case “the condition manifests itself in the inability to write longhand legibly and for any length and to read and absorb long text.”[28]  But whether his disability does extend to the reading and comprehension of lengthy text is not supported by the medical evidence, such as it is, which is a document signed by a general practitioner in August 2014.  The document was a form used by a university at which Mr Sanderson was a student.  The doctor completed the form by specifying “dysgraphia” as a disability suffered by Mr Sanderson.  Against the question: “How does the disability or condition impact on the student’s ability to study?”, the doctor wrote “Patient has poor handwriting and his writing is very slow.  He has had this problem since childhood.”  Against the question: “Are there specific recommendations for reasonable adjustments … that would assist this student to enable equal participation relevant to a university learning environment?”, the doctor wrote “Access to word processor/keyboard.  Access to a software reader if possible.”  It should be noted that despite Mr Sanderson’s dysgraphia, he was able to present detailed written and oral submissions in this court and, it would appear, in the District Court.

[25] Mrs Sanderson is said in Mr Sanderson’s affidavit to suffer from depression.  However Mr Sanderson could argue her case, as he did in this court.  There is no apparent difference between their respective interests.

[26] In their filed application to this court, the applicants claimed, presumably upon the basis of Mr Sanderson’s dysgraphia and Mrs Sanderson’s illness, that the decision of Butler DCJ was in contravention of the Disability Discrimination Act 1992 (Cth).  The provision which is said to have been breached is s 3(b) of that Act.  That is a provision which sets out one of the objects of that Act, which is to “ensure, as far as practicable, that persons with disabilities have the same rights to equality before the law as for the rest of the community”.  The applicants did not attempt to explain how his Honour could be in breach of that Act and clearly a suggestion that he discriminated against them because of the disability of one or the other is without foundation.

[27] The applicants are impecunious.  But that circumstance, considered with their personal circumstances and their lack of legal representation, ought not to preclude a fair trial of this proceeding.  In this case, as in many others involving unrepresented litigants, the task of the trial judge (or a judge in a pretrial hearing) would be burdensome but not unusual.

[28] Therefore there is no demonstrated basis for this court to interfere by making orders of the kinds which are sought by the applicants.  It cannot be said that with the court’s extensive procedural powers, it could not discharge its duty to provide a fair trial.  In any case, the orders sought could not be made, because of the imprecision of their terms in that the applicants would have this court order that their “human rights are not continued to be breached by ensuring ‘equality of arms’” or that the proceeding be dismissed in the event that the court was “unable to make orders that ensure ‘equality of arms’ resulting in a fair hearing and trial of the claim …”.  In the hearing in this court, Mr Sanderson was unable to say what should be ordered “to ensure equality of arms”, beyond an order that the bank fund the applicants’ legal representation, which Mr Sanderson said would not suffice.

Conclusion and Orders

[29] The proposed appeal against the judgment of Butler DCJ has no merit.  I would refuse the application for leave to appeal and order the applicants to pay the respondent’s costs of the application.

[30] BURNS J:  I agree with the reasons of Philip McMurdo JA and the orders that his Honour proposes.

Footnotes

[1] Consumer Credit Code (Qld) s6(1)(b).

[2] (1992) 177 CLR 292; [1992] HCA 57.

[3] (1994) 181 CLR 309; [1994] HCA 51.

[4] (1994) 181 CLR 309, 328.

[5] [2011] VSCA 132.

[6] Smith v Ash [2011] 2 Qd R 175, [50]; [2010] QCA 112, [50].

[7] (2008) 18 VR 300; [2008] VSC 1.

[8] [2009] VSC 1, [45].

[9] [2008] VSC 1, [65].

[10] (2007) 17 VR 100; [2007] VSC 337.

[11] [2007] VSC 337, [72].

[12] [2007] VSC 337, [73].

[13] (1992) 177 CLR 292, 300-301.

[14] (1992) 177 CLR 292, 305.

[15] (1988) 12 NSWLR 558, 569.

[16] (1992) 177 CLR 292, 306.

[17] Ibid.

[18] (1992) 177 CLR 293, 306-307.

[19] (1992) 177 CLR 292, 311 (Mason CJ and McHugh J), 317 (Brennan J), 343, 347 (Dawson J), 360(Toohey J); cf 337 (Deane J) and 369-370 (Gaudron J).

[20] (1992) 177 CLR 292, 311.

[21] [2011] NSWCA 375, [309]-[316].

[22] [2016] FCAFC 68, [39].

[23] [2016] FCAFC 68, [51].

[24] [2016] FCAFC 68, [52].

[25] See eg Hamod v New South Wales [2011] NSWCA 375, [310].

[26] (1992) 177 CLR 293, 345.

[27] (1989) 168 CLR 23, 49; [1989] HCA 46.

[28] Affidavit of M F Sanderson sworn 22 June 2015 para 9.

Close

Editorial Notes

  • Published Case Name:

    Sanderson & Anor v Bank of Queensland Limited

  • Shortened Case Name:

    Sanderson v Bank of Queensland Limited

  • MNC:

    [2016] QCA 137

  • Court:

    QCA

  • Judge(s):

    Morrison JA, McMurdo JA, Burns J

  • Date:

    31 May 2016

  • White Star Case:

    Yes

Litigation History

Event Citation or File Date Notes
Primary Judgment - - QDC
Notice of Appeal Filed File Number: 11066/15 04 Nov 2015 DC2801/14
Appeal Determined (QCA) [2016] QCA 137 31 May 2016 -
Application for Special Leave (HCA) File Number: B41/16 27 Jun 2016 -
Special Leave Refused [2016] HCASL 218 05 Oct 2016 -

Appeal Status

{solid} Appeal Determined - {hollow-slash} Special Leave Refused (HCA)