The wrong question

Giuseppe De Simone, property developer, ice-cream lover and human rights campaigner, has had another unsuccessful experience in the Court of Appeal.

Last Friday, in De Simone v Bevnol Constructions, the Court knocked back Mr De Simone's latest attempt to obtain a stay of civil proceedings concerning a dispute over the construction of a retirement village in Ocean Grove. The case concerns the principles from McMahon v Gould, and the power of an inferior court or tribunal to refer questions of law to the Supreme Court.

The common law
In McMahon v Gould, Wooden J of the New South Wales Supreme Court dealt with the difficult situation a person faces when confronted by civil and criminal proceedings concerning the same subject-matter. He held that in appropriate cases, the court may stay the civil claim, so that it does not prejudice the criminal proceedings. Specifically, Wooden J said that -

(a) prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court;
(b) it is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds;
(c) the burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with;
(d) neither an accused nor the Crown are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;
(e) the court's task is one of "the balancing of justice between the parties", taking account of all relevant factors;
(f) each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors;
(g) one factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused's `right of silence', and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding...;
(h) however, the so-called `right of silence' does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding;
(i) the court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings;
(j) in this regard factors which may be relevant include:

(i) the possibility of publicity that might reach and influence jurors in the civil proceedings;
(ii) the proximity of the criminal hearing;
(iii) the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses;
(iv) the burden on the defendant of preparing for both sets of proceedings concurrently;
(v) whether the defendant has already disclosed his defence to the allegations;

(k) the effect on the plaintiff must also be considered and weighed against the effect on the defendant;
(l) in an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed.

The ultimate question being -

has there been demonstrated such a real risk of injustice to the defendant that the court would be justified in denying the plaintiff his fundamental right to a hearing in ordinary course

The stay application
In 2007, De Simone instituting proceedings for breach of contract against Bevnol, the builder of the retirement village. Benvol then counterclaimed, alleging that De Simone engaged in misleading and deceptive conduct regarding Seachange's financial position and that this conduct led to loss to Bevnol. To top matters off, Bevnol reporting De Simone's conduct to police, who later charged him with a number of dishonesty offences.

De Simone, facing investigation and prosecution by Victoria Police for fraud, and a counterclaim based on the same allegedly fraudulent conduct, sought a stay of the civil proceedings so that he could concentrate on the criminal proceedings.

After a false start (due to making the application when he was merely under investigation, rather than waiting until he had been charged), Judge Ross, sitting as a vice-president of VCAT (now Justice Ross, President of VCAT), agreed to refer the following question to the Supreme Court:

Given that the Tribunal has an implied statutory power to stay a civil proceeding, whether the McMahon v Gould guidelines applicable to that power should be revised in light of the Charter of Human Rights and Responsibilities Act 2006, and in particular ss 24 and 25 of that act and, if so, how?

The Charter
Section 24 of the Charter of Human Rights and Responsibilities Act 2006 gives everyone the right to have civil proceedings determined after a fair and public hearing, and section 25 provides a number of rights relevant to criminal proceedings, including the right to silence in subsection (k).

Importantly, section 33 of the Charter states:

(1) If, in a proceeding before a court or tribunal, a question of law arises that relates to the application of this Charter or a question arises with respect to the interpretation of a statutory provision in accordance with this Charter, that question may be referred to the Supreme Court if-

(a) a party has made an application for referral; and
(b) the court or tribunal considers that the question is appropriate for determination by the Supreme Court.

The Court of Appeal
So, after a one day hearing in the Court of Appeal on 13 March 2010, the Court of Appeal decided not to answer the question on the basis that -

(a) it was not a question of law; and
(b) it was inappropriate to express an opinion on the question.

Six months later, the Court released their reasons for this non-answer. The court briefly reviewed the history of powers to refer questions of law to the Supreme Court or the Court of Appeal. The core of the court's reasons are that:

What is clear is that mere difficulty of a question, or its importance to the parties or the public, or a conflict of authorities, or that the parties have stated they will appeal whatever the decision at first instance, are but factors among others to be considered when deciding to refer a question to the Court of Appeal. As Brooking J said in Collins v Black, ‘everything depends on the circumstances of the particular case’. A further significant point, and one that is relevant in the present case, is that when a primary decision maker refers a question to the appeal court, that court is deprived of the benefit of the primary decision maker’s judgment on the issues arising for determination.

These considerations are apposite in the present case. In our view, in the circumstances that the Vice President did not rule on the stay application and having regard to the terms of the question, the reference was neither appropriate to make nor appropriate for this Court to answer.

The Court also expressed its concern that it was being asked a hypothetical question that would not determine the rights of the parties.

Conclusion
So, after waiting 6 months for reasons for the non-answer, the court stated, in brief, that:

• it did not have enough facts to answer the question,
• the question was hypothetical,

While those matters might be an excellent reason to decline to answer the question (combined with a mention of the undesirability of the fragmentation of proceedings), the Court didn't spell out why the question was not a question of law.

Whatever else it might be, it is difficult to identify what a question like "Should the existing principles of law governing a power be revised in light of another law?" is, if not a question of law (and that is essentially what Judge Ross asked). It certainly isn't a question of fact.

And while a question like "Is it open to exercise this power in light of these facts?" is a question of law, there seems to be no good reason why "What are the principles relevant to the exercise of this power?" would not be a question of law. The existence of earlier authority about the principles relevant to the exercise of the power, and hence the need to refer to those principles and the reason for revisiting the issue in the question, as occurred here, shouldn't change the nature of the question asked.

The decision risks undermining the purpose of section 33 of the Charter, which was to allow courts to refer questions of law to a body that can make a binding decision and so provide certainty for future decisions, rather than rely on the uncertainty of the appeal process. The decision also continues the Court's reluctance to provide a question on a case stated, as shown here, here and here.

Perhaps Judge Ross should have referred a different question to the Court of Appeal under section 33. He may have had the perfect question arise in another matter, such as "Is section 7 of the Serious Sex Offenders Monitoring Act 2005 compatible with the Charter"? While we know then-Judge Ross' opinion, whether the Court of Appeal would have answered that question is another matter entirely.