Saito and Li v Ngo

1. [1]

   HIS HONOUR: On 27 March 2020 the plaintiffs, Yukio Saito and Yuhai Li (hereinafter “the appellants”) applied by summons to appeal the whole of the decision of Magistrate Greenwood issued, ex tempore, on 28 February 2020. The appeal requires leave of the Court.

2. [2]

   The appellants were self-represented and some allowances are made for that aspect in the determination of the appeal. Written submissions were filed by the appellants and by the defendant on the appeal (hereinafter “the respondent”).

3. [3]

   The appellants were the defendants in the proceedings below which concerned an amount of debt said to be owed by the appellants to the respondent to the appeal, who was the plaintiff below.

Background

1. [4]

   It is necessary to set out some background to the proceedings. The first appellant was charged with various serious offences, the details of which are largely irrelevant but seem to be drug-related offences. The matter proceeded to trial, which was heard between 1 August and 23 September 2016.

2. [5]

   The first appellant retained the respondent as her solicitor in respect of those proceedings. The first appellant entered a costs agreement (executed by the first appellant on 3 June 2016), which provided for the payment of a fixed amount of $80,000 for preparation and attendance at the hearing on the assumption that the hearing would last 15 days.

3. [6]

   It became clear that the hearing would last longer than 15 days and a further agreement was executed, seemingly partly in writing and partly oral, which retained the respondent for the remainder of the trial at a rate of $20,000 per week.

4. [7]

   It appears that the first appellant's obligations under this second cost agreement were guaranteed by her son, the second appellant. The second appellant entered into a deed and provided security by way of mortgage documents, all dated 1 September 2016. The material before the Local Court attested to advice being received by the appellants from an independent solicitor and, in particular, by the second appellant in relation to the guarantee.

5. [8]

   Before the Court, there is a declaration entitled "Declaration by Borrower" signed by the second appellant on 1 September 2016, stating, at clause 2 thereof, that the second appellant received independent legal advice in relation to the Deed of Agreement and the Mortgage documents.

6. [9]

   The respondent did not attend the criminal proceedings on each day, nor did the other principal solicitor of his firm, Erica Liu. On days when he did not attend, his employed solicitor, Alice Sheng, attended. At some stage during the trial, seemingly after jury deliberations and verdicts were entered, the first appellant appears to have terminated the retainer of the defendant.

7. [10]

   The first appellant had paid for work in accordance with a payment plan in the amount of $31,000, by way of $500 weekly instalments. The payments were made between 24 October 2016 and 22 May 2017.

8. [11]

   The respondent commenced Local Court proceedings, seeking payment of an amount outstanding under the costs agreement, which amount was claimed to be $89,000, and sought to enforce the deed against the second appellant.

9. [12]

   Separately from the foregoing, the first appellant lodged a complaint to the Legal Services Commissioner. The complaint was dismissed.

10. [13]

    As already stated, the proceedings below were commenced by the respondent to the appeal and the appellants filed a defence, which, primarily, asserted:

11. [14]

    The learned Magistrate found for the respondent and dismissed the appellants’ crossclaim. The appellants' crossclaim alleged that the respondent was incompetent; and that this incompetence and/or the result of the application of the incompetence caused the first appellant mental and/or physical harm and economic loss, arising from her incarceration.

12. [15]

    The Court, as presently constituted, has noted, in unrelated proceedings, the principles that establish that a lawfully imposed period of incarceration cannot be claimed as damages. In discussing the issue, as it applies to persons under a mental impairment, the Court considered the judgment of the Court of Appeal in Presland [1] and recited extracts of the judgment of the majority in Presand at length. The Court, as presently constituted said, in Adams by her next friend O’Grady v State of New South Wales: [2]

13. [16]

    Regardless of whatever is said to be incompetence on the part of the legal representatives, the criminal conviction for which a sentence was imposed was a lawful act that reflected the law and cannot be impugned in these proceedings. No damages are occasioned by the imposition of the law by a court or tribunal with the jurisdiction to impose it.

14. [17]

    Further, there is in place a lawful order of a court that imposed a sentence. Any damage associated with the restrictions on the first appellant's liberty is the result of the lawful conduct of authorities. Even in wrongful imprisonment cases, damages are awarded only up to the point in time that there is a lawful order authorising imprisonment.

15. [18]

    Nevertheless, before the Local Court, the appellants argued that the clause in the costs agreement that identified the responsible solicitor should be construed to mean that it was the responsible solicitor, and no one else, that would have carriage of the matter and be required to attend. The learned Magistrate found that there was no evidence to suggest that the identified principal solicitor or responsible solicitor ceased having carriage of the matter. The respondent remained in charge of the conduct of the proceedings; attended most days of the trial; and was assisted by various people. There was no clause requiring the respondent to attend court every day.

16. [19]

    Further, the first appellant asserted that threats were made in respect of her and her sons' safety. The second appellant is the first appellant's son. It was said, in the Local Court, that these threats were made by the respondent and/or an employed solicitor answerable to the respondent. The respondent denied the allegations.

17. [20]

    The employed solicitor never met with the first appellant without the presence of counsel. No particulars were provided as to when the alleged threats were conveyed, and the allegation was rejected by the Local Court.

18. [21]

    Lastly, the Local Court dealt with an assertion relating to the unconscionability of the guarantee. The Local Court determined that the guarantee was enforceable and rejected any allegation of unconscionability or undue influence or duress. Further, the Local Court rejected the proposition that the second appellant did not read the guarantee. Each of these allegations were not, according to the Local Court, established.

19. [22]

    Further, there was no admissible evidence to support the contention that the second appellant suffered from a special disadvantage. The first appellant suggested that the second appellant provide a guarantee and, on the evidence before the Local Court, as it held, the second appellant received advice from an independent solicitor in relation to the guarantee.

20. [23]

    Over and above the foregoing, the Local Court made reference to a gift provided by the first appellant to the wife of the respondent, during the course of the trial, as appreciation of the work that was being done and the payment of the instalments towards the debt, neither of which is suggestive of duress or any other basis upon which the costs agreement would be rendered unenforceable. Indeed, it is suggestive of recent invention for the purpose of avoiding contractual responsibility.

Grounds of Appeal

1. [24]

   The appellants appeal from the decision of Magistrate Greenwood on the following three grounds:

   1. (1)

      Ground One: miscarriage of justice has arisen on account of the civil hearing Magistrate's abuse of power of disrespecting the Supreme Court of Criminal Appeal proceedings (sic), disrespecting the Judicial Commission's proceedings and went across boundaries to give false determination on the legitimacy issue related to the trial lawyer's action in the criminal trial;

   2. (2)

      Ground Two: “miscarriage of justice” has arisen on account of the civil hearing Magistrate's abuse of power to alter and change Yu Hai Li’s court evidence filed on 30 January 2020 and, based on that, to give false determination on the issue of the trial lawyer's action of legitimacy and on the issue of both Yu Hai Li and Yukio Saito being put under a duress situation;

   3. (3)

      Ground Three: miscarriage of justice has arisen on account of the civil hearing Magistrate's inconsistency and sudden change without providing the reason on the term of "exclusive cost agreement".

2. [25]

   I have sought to be as accurate as possible in the recitation of the grounds of appeal, but some alterations were made for the purpose of making the ground less unintelligible.

3. [26]

   The appellants filed written submissions from which, to the extent that the submissions are able to be understood fully, the appellants make the following complaints:

   1. (1)

      The Magistrate erred in not adjourning the proceedings pending the resolution of the first plaintiff's appeal to the Court of Criminal Appeal, in respect of her criminal conviction;

   2. (2)

      The Magistrate erred in not admitting certain evidence;

   3. (3)

      The Magistrate erred in switching off the first plaintiff's video link during the proceedings in the Local Court;

   4. (4)

      The Magistrate erred in not finding (or otherwise failed to provide adequate reasons for a finding) that the defendant breached his costs agreement by: his incompetence as a legal representative in the criminal trial in that the respondent and/or counsel did not advance the case in the manner desired by the first appellant; and by not attending the trial in person throughout the whole hearing; and

   5. (5)

      The Magistrate erred in not finding that the second appellant was compelled to enter the guarantee under duress or that the second plaintiff was otherwise subject to a mental incapacity.

The hearing in the Local Court

1. [27]

   The transcript of the proceedings before the Local Court are before the Court. The judgment of the learned Magistrate was provided ex tempore and is included in the transcript. The transcript of the evidence is attached to the affidavits of the respondent, dated 28 January 2020 and 14 October 2019.

2. [28]

   Essentially the respondent submits that the grounds of appeal are incomprehensible and otherwise not known to law. Further, the grounds of appeal disclose no error of law in the Court below. Nor do the grounds of appeal give rise to a mixed question of fact and law that would allow this Court to grant leave pursuant to the terms of s 40 of the Local Court Act 2007 (NSW).

3. [29]

   Lastly, the respondent submits that the findings in the Court below are totally supported and manifestly correct and are in accordance with the unchallenged evidence of the respondent below.

4. [30]

   The appellants rely upon the Local Court transcript and various affidavits of the appellants themselves. Those other documents are listed in the Court Book and p 1 of the appellants’ Written Submissions.

5. [31]

   The appellants submit, in relation to Ground One, that the criminal trial was run incompetently and assert that the criminal trial should have been terminated, once certain evidence came to light, namely, that certain search warrants were improperly obtained. The submission of the appellants seem to suggest, as is a ground of appeal, that the respondent was incompetent in not obtaining orders from the Court vacating the trial once this evidence was ascertained.

6. [32]

   Further, the appellants submit that the respondent did not attend eight weeks of the criminal proceedings, having attended only for the first two weeks. The appellants also make various allegations that her lawyers, and the judge, in the criminal trial lied to the jury. The appellants deny that the first appellant provided a gift to the respondent's wife and the first defendant states that the Magistrate did not consider the second appellant's mental health issue in respect of the guarantee.

7. [33]

   Further, the appellants argue that the lawyer advising her son was not independent and was, in fact, associated with the respondent. I do not seek to summarise all of the submissions in relation to the cross-claim.

Consideration

1. [34]

   The judicial hierarchy in civil proceedings in New South Wales is established on the basis that claims of a certain value may be argued, at first instance, in the Local Court; claims up to a certain value, greater that allowed to be argued in the Local Court, may be determined in the District Court of New South Wales; and, lastly, claims of unlimited value may be the subject of proceedings in the Supreme Court. Where proceedings are taken in the Supreme Court, for example, for a debt, the amount of which was within the jurisdiction of the Local Court, the Supreme Court has the jurisdiction to remit the matter to the Local Court and/or the District Court.

2. [35]

   There are reasons for the establishment of the judicial hierarchy in the manner established in this State. The judicial hierarchy established under law in this State reflects the judicial hierarchy throughout the common law world and beyond. Indeed, its history may be traced, at least, from the advice provided, according to Biblical passages, by Jethro to Moses, his son-in-law. [3] Archaeologists suggest that the structure also applied well before any Biblical injunction.

3. [36]

   Nevertheless, in this State and most other jurisdictions, there is a right of appeal to the Supreme Court but "only on a question of law". [4] None of the grounds raised in this appeal are confined to a question of law.

4. [37]

   Over and above the right of appeal, there is a capacity on a party adversely affected by or dissatisfied with a judgment or order of the Local Court to appeal on a ground that involves a question of mixed law and fact but, in those circumstances, the appeal to the Supreme Court is "only by leave of the Supreme Court". [5]

5. [38]

   The determination by the Court to grant leave is not automatic. In a case such as this, which involves a relatively small claim, it is important that there be early finality in determining the litigation and an end to the costs of litigation involving small amounts. Otherwise the costs of litigation will, even more than is usually the case, swamp the money sum involved. [6]

6. [39]

   Ordinarily, it is appropriate to grant leave to appeal only concerning matters that involve an issue of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond that which is merely arguable. [7]

7. [40]

   The appeal and the application for leave to appeal with which the Court is currently dealing seeks to reagitate the questions of fact that were determined by the learned Magistrate; do not raise any issues of public importance; do not raise any issues of public interest or principles; and do not raise any ground of appeal which would allow the Court, as presently constituted, to interfere with the findings of fact below or any exercise of discretion associated therewith.

8. [41]

   Nothing in the grounds of appeal or the submissions in support of the grounds of appeal satisfies the Court, as presently constituted, that leave to appeal should be granted. As a consequence of the foregoing determination at the hearing of the appeal, the Court refused leave to appeal and dismissed the appeal. An order was made that the appellants pay the respondent's costs of and incidental to the proceedings.

9. [42]

   On the application of the respondent, leave was granted to put a submission and material supporting a fixed cost order by the Court, in order to avoid any further litigation costs associated with this matter. Leave was granted to the appellants to answer any such application.

10. [43]

    Having considered the material raised on the question of the fixed cost, the Court is of the view that, given the amount involved in these proceedings, being the substantive proceedings, to make an order, the effect of which would be to add to the cost of litigation, would not be consistent with the primary purpose of the Civil Procedure Act 2005 (NSW) in that it would not achieve the just, quick and cheap resolution of the issues between the parties.

11. [44]

    I accept the material that has been submitted in relation to the costs and consider that the costs associated with the appeal, its preparation and hearing occasioned by the respondent are reasonable and appropriate. The amount prescribed in the ensuing orders will include the fixed costs; the judgment debt; interest; and court costs, being the filing fee for the statement of claim and motion, solicitors’ fees and counsel fees.

12. [45]

    In all of the circumstances, the Court varies the order originally made and makes the following orders:

    1. (1)

       Leave to appeal refused;

    2. (2)

       Appeal dismissed;

    3. (3)

       The plaintiff/appellants pay the defendant/respondent costs, being lump sum costs, and interest, which together with the judgment debt of $89,000 and interest of $33,531.96 shall be calculated at $138,532.96.

    4. (4)

       In addition to the foregoing, the plaintiff/appellants shall pay interest, pursuant to the terms of s 101 of the Civil Procedure Act 2005 (NSW), at the prescribed rate from the date of the initial judgment of this Court, being 13 July 2020.