Kalfus v Cassis

[2005] HCATrans 422

[2005] HCATrans 422

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S411 of 2004

B e t w e e n -

MARCEL ISADOR KALFUS

Applicant

and

SAMI ALFRED CASSIS

Respondent

Application for special leave to appeal

GLEESON CJ
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 17 JUNE 2005, AT 11.14 AM

Copyright in the High Court of Australia

MR G.C. LINDSAY, SC:   May it please the Court, I appear with MR A.R. RIDLEY for the applicant.  (instructed by Pateman Legal)

MR P. ROBERTS, SC:   If the Court pleases, I appear with MR M.K. MINEHAN for the respondent.  (instructed by Levitt Robinson)

GLEESON CJ:   Yes, Mr Lindsay.

MR LINDSAY:   Thank you, your Honours.  In our submission, these proceedings raise three questions which might attract a grant of special leave.  The first concerns the requirements of a fair trial after an appeal, and more particularly, whether it was open to the Court of Appeal, consistently with procedural fairness, to make findings of primary fact on critical questions as to reliance and causation, which were dependant upon the credibility of witnesses not seen by it, or in fact tested on the particular issue.

HEYDON J:   But how much of the witnesses did the trial judge see?  I mean, was not the material used before Justice Dowd re-tendered before Justice Cripps, and then some further oral evidence given?  What is the proportion?

MR LINDSAY:   I cannot answer that off the top of my head, but there was fairly extensive cross-examination, certainly of Mr Cassis, the respondent, but I cannot give your Honour any form of proportion now.  I would be fairly confident in making the submission that there was sufficient oral examination for the second trial judge to have an opportunity to assess the question of credit in relation to both the applicant and the respondent.

The second issue concerns the extent to which if at all, common law principles relating to the assessment of damages inform the assessment of equitable compensation.  The third issue concerns the question of onus of proof, in particular, relating to section 23 of the Limitation Act and the application of a limitation period in equity by analogy.

In our submission, the respondent’s appeal to the Court of Appeal should have been dismissed.  However, we say at the very least his claim for equitable compensation should have been the subject of an order for a retrial.  That was a matter which was a subject of difference between the majority judges, and Justice Giles in the minority.  In our submission, the bottom line in these proceedings is that if the Court of Appeal was correct in finding the existence of a fiduciary duty, and a finding of misrepresentation by the applicant as a fiduciary, and if the Limitation Act point is taken against us, then consistently with procedural fairness, the Court of Appeal, in our submission, could not have made the critical findings of fact that were necessary for it to make in order to found the order for compensation that it did make.

That is because the findings of reliance and causation by the majority judges were of critical significance.  They had not been the subject of any findings by the trial judge; they depended critically upon the credibility of the parties.  They were not supported by evidence from the respondent that he had relied upon the misrepresentation found by the Court of Appeal.  They were inconsistent with evidence of the applicant, which was not rejected by the trial judge, and the findings underpinned a case advanced by the respondent on appeal that was not fairly presented for determination at the trial.  Finally, there were substantial doubts about the respondent’s credibility.

The trial judge’s findings indicate really that there would be a live issue about reliance and causation, bearing in mind that the respondent was enthusiastic to go into the joint venture arrangement.  He was determined to proceed with it come what may after, for example, he had received cautionary advice about his arrangements with the applicant.  As I have said, there was no evidence from the respondent at all that he had relied upon the misrepresentation that was found against the applicant.

Before the trial judge, the respondent conducted his case on the basis that all of very many breaches that were alleged against the applicant were the cause of the damage and all of the damage that he claimed.  In our submission, that case having been run below, it becomes unfair for there to be simply a summary determination of an award of compensation against the applicant, where the Court of Appeal has identified a single breach of duty which was, as we would submit, not fairly pleaded or presented for determination at trial.

The majority judgment recognised the existence of the problem in proceeding to make an award of compensation without a retrial, but it was fortified in the judgment of Justice Hodgson by statutory injunctions found in the Supreme Court Rules as to the desirability of a just, quick and cheap resolution of disputes, and was fortified also by its reliance upon Brickenden.  The net effect of all of that, we submit, was that the Court of Appeal went beyond what could be described as a fair trial, and we submit that that is a fact which militates against the particular judgment.

I should indicate that Part 1 Rule 3 of the Supreme Court Rules which was relied upon by Justice Hodgson, that being the rule that talks about an “overriding purpose” requiring “just, quick and cheap” resolutions of disputes, is to be replaced by the new civil procedure legislation. It will be embodied almost word for word in section 56(1) of the Civil Procedure Act 2005.

GLEESON CJ:   There is a comma after the word “just”, is there not?

MR LINDSAY:   Sorry, there is a?

GLEESON CJ:   There is a comma after the word “just”.

MR LINDSAY:   Yes, I believe so, yes.  In any event, we submit that the approach that was adopted by the majority should be held to be impermissible because of the very substantial problems standing in the way of a summary determination which were identified in the minority judgment by Justice Giles.  His Honour there set out a number of the features that I have indicated which, in our submission, fairly must be regarded as standing in the way of simply dealing with these critical questions of fact on the papers.

What Justice Hodgson did in his judgment, including with his reliance on Brickenden, in effect, was to remove any real question about causation, and to reverse the onus of proof by enabling the court to presume reliance and causation in favour of the respondent.  In our submission, those factors point to what we would say is the bottom line in the proceedings, but the proceedings do raise the questions we have identified about what might be described as a content of equitable principles, and also the interaction or the operation of section 23 of the Limitation Act, which interacts with section 63 in the Limitation Act, the effect of which is to extinguish a cause of action.

Of course, in the context of section 23, we are looking at the application of rules, including section 63 by analogy, but in our submission, that is an issue which appears to be unresolved and should attract a grant of special leave.  Your Honours, we rely on our written submissions in which we articulate the various points.  Thank you.

GLEESON CJ:   Thank you, Mr Lindsay.  We do not need to hear you, Mr Roberts.

We are of the view that the present case is not a suitable vehicle for the consideration of the issues of principle sought to be raised by the applicant and we are not persuaded that the interests of justice require a grant of special leave in the case.  In those circumstances the application is dismissed with costs.

AT 11.23 AM THE MATTER WAS CONCLUDED