MS THOMAS (A PSEUDONYM) v MR PETERSEN (A PSEUDONYM) [2024] SADC 131

On Appeal from DISTRICT COURT OF SOUTH AUSTRALIA (ASSOCIATE JUDGE BLUMBERG) CIV-21-009000 Appellant: MS THOMAS (A PSEUDONYM) Counsel: MS G WALKER SC - Solicitor: WEBSTERS LAWYERS Respondent: MR PETERSEN (A PSEUDONYM) Counsel: MR S ABBOTT KC WITH MR E BELPERIO - Solicitor: SYKES BIDSTRUP Hearing Date/s: 18/06/2024 File No/s: CIV-24-001804 B DISTRICT COURT OF SOUTH AUSTRALIA (Civil: Appeal Against a Master) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. THOMAS (A PSEUDONYM) v PETERSEN (A PSEUDONYM) [2024] SADC 131 Judgment of his Honour Judge Dart 15 October 2024 APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - EXTENSION OF TIME FOR APPEAL PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE JUDGMENTS AND ORDERS The appellant alleges she was sexually assaulted by the respondent - an Associate Judge stayed the proceedings on the basis that criminal charges against the respondent were on the cards - SAPOL conducted an investigation but closed the file - no charges have been laid - the appellant made a forensic decision not to appeal the decision to stay the proceedings - the appellant decided to issue an application seeking to discharge the stay - that application was dismissed - the appellant changed her position and decided to appeal the first decision well out of time - the appellant requires an extension of time to appeal the first decision - not appropriate to extend time - leave is granted for the appellant to appeal the second decision - there was an outcome error - there is no basis for the stay to remain - the stay is discharged. Held: 1. An extension of time within which to appeal the first decision is declined. 2. Leave is granted to appeal the second decision. 3. Appeal allowed in respect of the second decision. 4. The stay made by Associate Judge Blumberg on 4 October 2022 is discharged. -- 1 of 12 -- 5. The respondent is to pay the appellant’s costs of the appeal on the standard costs basis. 6. The appeal is certified fit for counsel. 7. The respondent is to file a defence within 21 days. Uniform Civil Rules 2020 (SA) rr 213.1A and 214.1(1), referred to. Provatidis v A McFarlane & Sons Pty Ltd [2021] SASC 142; Mathew (SA) Nominees Pty Ltd v Belconnen Automotive Pty Ltd (2019) 133 SASR 408; McMahon v Gould (1982) 7 ACLR 202; Washington v Titan Fan Products Australia Ltd & Ors [2021] SASC 124; Commissioner of the Australian Federal Police v Zhao [2015] HCA 5; Adelaide Brighton Cement Ltd v Burgess [2018] SASC 134; Steven Moore (A Pseudonym) v R [2024] HCA 30; Washington (by her litigation guardian Edward Michael Byrt) v Titan Fan Products Australia Ltd [2020] SASC 230, considered. -- 2 of 12 -- THOMAS (A PSEUDONYM) v PETERSEN (A PSEUDONYM) [2024] SADC 131 1 This is an appeal from two decisions of an Associate Judge. The first decision was made on 4 October 2022 and the second decision on 7 February 2024. They each related to a decision to stay civil proceedings in circumstances where it was said that the respondent may be facing criminal charges. The appeal was instituted on 26 February 2024. Background 2 The appellant is the applicant in the principal proceedings. She alleges in her pleadings that, many years ago, she was sexually assaulted by the respondent. Damages are sought arising from the factual matters pleaded. 3 In 2020 the appellant made a report to SAPOL about the facts and circumstances of the alleged sexual assault. The allegations were investigated. It was determined by SAPOL that there was no reasonable prospect of obtaining a conviction. The matter was filed pending further information. SAPOL advised by letter dated 8 September 2022 that it then had no present intention to further investigate the allegations. It seems that nothing has changed since that time. 4 These proceedings were commenced in 2021. On 4 October 2022 the Associate Judge stayed the civil proceedings on the premise that there was a prospect that the respondent would be charged with criminal offences. The second decision in February 2024 relates to an application by the appellant for the stay to be lifted. The Associate Judge declined to lift the stay. 5 No defence has been filed because of the stay. The appellant is not able to progress the matter even though no criminal charges have been brought against the respondent. An extension of time to appeal and leave to appeal 6 Two preliminary points arise for consideration. The first decision was made in 2022 and, as mentioned, this appeal was not instituted until 26 February 2024. An appeal is required to be instituted within 21 days of the date of the order the subject of the appeal.1 The Court, of course, has power to extend the time for instituting an appeal. It is a discretionary decision. 7 In Provatidis v A McFarlane & Sons Pty Ltd2 Justice Hughes discussed the relevant criteria to be considered on an application for an extension of time to appeal. Her Honour said:3 The grant of an extension of time to institute an appeal entails an exercise of the Court’s discretion. The Court has a discretion to vary the time fixed by rule 214.1 in the exercise 1 UCR 214.1(1). 2 [2021] SASC 142. 3 [2021] SASC 142 at [29]-[30]. -- 3 of 12 -- [2024] SADC 131 2 of its inherent powers as reflected in rule 12.1(2)(c) of the UCR. The factors relevant to the exercise of the discretion to extend time are settled. The primary factors relevant to the determination of an application for an extension of time in a general sense are the length of the delay, the reasons for the delay, the hardship to the applicant for an extension if it is not granted and the prejudice to the respondent if it were to be granted. Other factors may need consideration depending on the nature of the requirement in relation to which the application is brought. (footnote omitted) 8 Part of the reason for the long period of time between the first decision and the institution of the appeal lies in the fact that the interlocutory application seeking to lift the stay was filed in March 2023 but not dealt with until the second decision was delivered in February 2024. Nonetheless, the appellant made a forensic decision that, rather than appeal the first decision, she would pursue an interlocutory application seeking orders for the lifting of the stay. If that had been successful there would be no appeal of the first decision. 9 The appellant asserts that she will suffer prejudice if an extension of time to appeal is not granted. I am not sure that that is the case. The stay is an interim one and accordingly is able to be reviewed from time to time. If no extension of time is granted, she is not shut out from pursuing a further interlocutory application to lift the stay. In any event, there is a separate appeal in relation to the second decision of the Associate Judge before the Court. 10 As a general proposition, parties should be kept to their forensic decisions. After the Associate Judge made the first decision, the appellant had two choices. She could appeal or she could, after a period, apply to have the stay lifted. She chose the latter course. In the circumstances I do not regard it as appropriate to grant an extension of time to appeal. 11 The appellant needs leave to appeal the second decision. When the Uniform Civil Rules commenced in 2020, there was no requirement for leave to appeal from a Master of the District Court. There was such a requirement in relation to a Master of the Supreme Court. The situation was remedied as and from 1 January 2024. The subject decision was made after that date. Relevant is the following: 213.1A—When required: District Court (1) Subject to any statute to the contrary, leave to appeal is required in respect of any appeal to a Judge of the Court against a judgment order or decision of an Associate Judge or Judicial Registrar. (2) If leave to appeal is granted, but it later becomes evident that it ought not to have been granted, the Court may revoke the grant of leave. Notes— Section 43(3) of the District Court Act 1991 provides that an appeal lies as of right, or by permission, according to the rules of the appellate court. -- 4 of 12 -- [2024] SADC 131 3 12 In Mathew (SA) Nominees Pty Ltd v Belconnen Automotive Pty Ltd4 Doyle J considered the criteria for a grant of leave. His Honour said:5 The plaintiff’s proposed appeal is against orders granting security for costs, and declining to order costs in relation to the defendant’s jurisdictional challenge. As such, it is an appeal against interlocutory orders by the Magistrate involving the exercise of discretions in relation to matters of practice and procedure. Ordinarily, and for sound reasons, this Court will be reluctant to grant permission to appeal in such matters, let alone interfere with the exercise of the Magistrate’s discretion. Permission to appeal will not be granted unless there is not only arguable merit in the proposed appeal, but also the prospect of substantial injustice to the appellant were permission refused and the decision below allowed to stand. (footnote omitted) 13 It follows that two issues arise for consideration on the question of leave to appeal. They are whether there is arguable merit in the appeal and whether the appellant will suffer substantial injustice if permission is refused. The respondent says that leave should not be granted. 14 The appeal raises a number of issues about the approach adopted by the Associate Judge on the application to lift the stay. It is a serious appeal that is clearly arguable. 15 The respondent says that the appellant would suffer no prejudice or substantial injustice if leave is not granted. I think the substantial injustice is clear. The appellant alleges she suffered a serious sexual assault at the hands of the respondent. As things presently stand, the police say that the file is closed and that there will be no prosecution in a criminal court. If the stay remains the appellant will not be able to have her allegations tested in civil proceedings either. I regard that as a substantial injustice to the appellant. It is at least sufficient to justify a grant of leave to appeal from the second decision. Leave to appeal is granted. The legal basis for a stay 16 The starting point in the consideration of whether or not to grant a stay in a case such as this is generally the judgment of McMahon v Gould.6 His Honour Justice Wootten set out 12 matters to take into consideration. The 12 factors were guidelines and the suggestion was that the 12 factors should be weighed in the balance in determining whether or not to grant a stay. 17 The case law has moved on since McMahon and there is now a greater emphasis on the protection of an accused person’s right to silence. It follows that McMahon v Gould may not now represent the true state of the law. 4 (2019) 133 SASR 408. 5 (2019) 133 SASR 408 at [46]-[47]. 6 (1982) 7 ACLR 202. -- 5 of 12 -- [2024] SADC 131 4 18 More recently, in Washington v Titan Fan Products Australia Ltd & Ors7 Justice Stanley set out the relevant principles. In doing so, he relied partly on McMahon v Gould but also on the more recent High Court decision in Commissioner of the Australian Federal Police v Zhao.8 His Honour said:9 … In granting the stay I had regard to the following principles: 1. Courts have the power to control their proceedings and to order a stay in an appropriate case. It will be appropriate to do so where the interests of justice require such an order. 2. A plaintiff is prima facie entitled to have civil proceedings tried in the ordinary course. Accordingly, a stay requires justification on proper grounds. 3. The burden of demonstrating the existence of proper grounds for a stay is on the applicant. 4. A court will not grant a stay of a civil proceeding merely because related charges have been brought against an accused and criminal proceedings are pending. A stay of civil proceedings may be warranted if it is apparent that the accused is at risk of prejudice in the conduct of his or her defence in a criminal trial. 5. The risk of prejudice must be real, and in considering what the interests of justice require, that risk is to be weighed against the prejudice that a stay of the civil proceedings would occasion. 6. Prejudice to the accused’s right to silence or privilege against self-incrimination is a relevant and important factor in the exercise of the discretion. Some cases place this as the paramount consideration in the assessment of whether to grant a stay. 7. It may not be necessary for the applicant seeking the stay to state the specific matters of prejudice before a stay could be contemplated. As the High Court said in Zhao: To require the second respondent to do so would be to make the risk of prejudice a reality by requiring him to reveal information about his defence, the very situation which an order for a stay seeks to avoid. 8. It is not necessary for the applicant for the stay to have been charged with a criminal offence. The real risk of prejudice or injustice can relate to an actual or potential criminal proceeding. It is sufficient that a criminal charge or charges is or are “on the cards”. The expression “on the cards” has been interpreted to mean reasonably possible or a reasonable possibility. Where allegations in a civil proceeding are of a very serious nature and magnitude, the pleading alone may be sufficient to establish that there is a real risk of criminal prosecution should the matters alleged be proven. (footnotes omitted) 19 In Zhao the High Court was considering the grant of the stay in circumstances where the respondent was facing both criminal proceedings and proceedings pursuant to the Proceeds of Crime Act 2002 (Cth). The respondent sought a stay 7 [2021] SASC 124. 8 [2015] HCA 5. 9 [2021] SASC 124 at [4]. -- 6 of 12 -- [2024] SADC 131 5 of the proceeds of crime proceedings until the criminal proceedings were concluded. The High Court agreed that such a stay was appropriate. In the joint judgment they said:10 The assumptions upon which the POC Act is founded in this regard are not novel. They are reflected in s 319, but a provision of this kind is strictly unnecessary. Courts will not grant a stay of civil proceedings merely because related charges have been brought against a person and criminal proceedings are pending. More is required. To warrant a stay of the forfeiture proceedings, it must be apparent that the person whose property is in question is at risk of prejudice in the conduct of his or her defence in the criminal trial. 20 The Associate Judge had regard to the Washington judgment and also the judgment of Adelaide Brighton Cement Ltd v Burgess11 on both applications before him. 21 In general terms, a stay is granted so that a person who may be the subject of criminal proceedings does not have to disclose a defence in the civil proceedings so as to protect the person’s right to silence. The stay is not intended to be permanent. It is in place so that the criminal proceedings can progress without any prejudice arising from a respondent complying with his obligations in the civil proceedings. The prospect of criminal proceedings must be real. The authorities talk about “on the cards”. The Grounds of Appeal 22 It is not necessary to set out the grounds of appeal in relation to the first decision. I set out, in summary form, the grounds of appeal in relation to the second decision. They are as follows: 1. The Associate Judge erred in fact or law in finding that: • there were no material changes in circumstances since the first decision. • it was only necessary to consider the entirety of the available material for the purpose of identifying whether there had been a material change of circumstances since the first decision. • it was not necessary to revisit the question of whether a criminal prosecution was “on the cards”. • the fact that UCR 67.3 requires pleadings to be verified was a relevant consideration and also: i. in finding that the potential for a respondent to be cross examined on his pleadings was a relevant matter. 10 [2015] HCA 5 at [35]. 11 [2018] SASC 134. -- 7 of 12 -- [2024] SADC 131 6 ii. that the accessibility of court documents and transcript of evidence was a relevant matter. • he was bound by the decision Adelaide Brighton Cement Ltd v Burgess to the exclusion of other authorities. 2. The outcome that the decision was unreasonable or unjust in the circumstances such that there was a failure to properly exercise the court’s discretion. The Nature of the Appeal 23 The decision to grant a stay is discretionary. There are limits on a court’s ability on appeal to interfere with discretionary decisions. The parties accept that this is a House v The King appeal. The position in relation to discretionary appeals was recently explained by the High Court in Steven Moore (A Pseudonym) v R.12 The High Court said as follows:13 Two standards of appellate review of first instance judicial determinations are of present relevance, namely what has come to be referred to as the correctness standard and a "House v The King" standard involving judicial restraint affording latitude to a trial judge. Under the correctness standard, the appellate court determines for itself the correct outcome while making due allowance for such "advantages" as may have been enjoyed by the judge who conducted the trial or hearing. With House v The King, appellate intervention is limited to circumstances where the trial judge: acted upon a wrong principle, or allowed extraneous or irrelevant matters to affect the decision; mistook the facts; failed to take into account some material consideration; or made a decision that was unreasonable or plainly unjust. These grounds for intervention contemplate the appellate court accepting that intervention is not warranted even though the members of the appellate court may have decided the matter differently to the judge at first instance, a circumstance that is reflected in the language adopted by the Court of Appeal in this case when it described the trial judge's conclusion as "open" to his Honour. (footnotes omitted) 24 I also note what his Honour Justice Doyle said in Mathew (SA) Nominees Pty Ltd v Belconnen Automotive:14 Of course, in considering whether there is arguable merit in the appeal, it is relevant that the discretionary nature of the decisions means that in order to succeed on appeal, the plaintiff would need to establish error in the sense required by House v The King. That is, the appellant would need to establish that the Magistrate acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or did not take into account some material consideration. Alternatively, the appellant must establish that the result embodied in the order made is, upon the facts, unreasonable or plainly unjust, such that it can be inferred that there has been a failure to properly exercise the relevant discretion despite the precise nature or scope of the error not being identifiable. This last 12 [2024] HCA 30. 13 [2024] HCA 30 at [14]. 14 (2019) 133 SASR 408 at [48]-[49]. -- 8 of 12 -- [2024] SADC 131 7 form of error is sometimes described as an outcome error; and the earlier forms of error as process errors. It follows from the above that an allegation merely that the Magistrate attached insufficient weight to a particular consideration is not, by itself, an allegation of error in the sense required by House v The King. Unless the allegation rises as high as one that the Magistrate overlooked or gave no weight to that consideration, or misunderstood it so as to give rise to an error of principle, it is at most a submission or particular that might be advanced in support of an allegation of outcome error. (footnote omitted) Consideration 25 The first question is whether the court’s jurisdiction to reconsider a discretionary decision is enlivened. If so, the second question is how the discretion should be exercised on a reconsideration. 26 It is necessary to deal with the factual issue that underpins the decision to grant the stay. That fact is whether there is a reasonable possibility of criminal charges being laid against the respondent arising from the facts and circumstances alleged in civil proceedings. As things presently stand in this matter, there is no prospect whatsoever of criminal charges. The police investigation closed more than four years ago. There is no evidence that it has ever been reopened. It cannot presently be said that charges are “on the cards.” 27 In the cases of Washington, Burgess and Zhao, at the time of the granting of the stay, there was either an active police investigation or charges had actually been laid. This is not such a case. The respondent has what amounts to a permanent stay. The police will not investigate any further and therefore no charges will arise. The appellant is denied the opportunity to pursue her civil proceedings. That is not a result which should be arrived at lightly because of its manifest unfairness to the appellant. 28 It is important to bring a sense of reality to the consideration of this matter. Nearly all civil disputes end in a resolution without a trial. It is commonplace for resolutions to be reached with a denial of liability. There is no reason, at the moment, to think that this case will be any different to any other civil proceeding and that a resolution will likely be achieved without a trial. 29 It can be assumed that the respondent will file a defence containing denials. If the respondent was going to make admissions, they would have been made by now, and the matter would have resolved. A defence continuing denials will cause no prejudice to the respondent in any future criminal proceedings. 30 The other matter to consider, of course, is that as the civil matter proceeds, if the circumstances change, the respondent will always be entitled to make a new application for a stay. -- 9 of 12 -- [2024] SADC 131 8 31 I will deal with the last ground of appeal first. This is a rare case where the outcome is so unjust and unreasonable that it can be said that there has been an outcome error. The court can, as a result, exercise the discretion afresh. There is a need to balance the prejudice to be suffered by each party. 32 It appears that there are also some relevant process errors as well. In the circumstances I need not go into those in great detail. One ground of appeal relates to the use of material in relation to the first decision when considering the second decision. The Associate Judge indicated that he was considering the entire material but only in the context of change since the first decision.15 The stay was never more than an interim stay. It is difficult to establish clearly from the reasons the extent to which there was a complete review of the question of whether the stay should remain. 33 It is not clear that the Associate Judge gave fresh consideration to the question of whether charges remain on the cards.16 Of necessity, when considering whether an interim stay should remain in place, fresh consideration should be given to whether the possibility of criminal proceedings remains. His Honour said the effluxion of time, more than a year, was not sufficient to justify a reconsideration of the stay.17 The fact that time goes by without charges being laid must have some impact on charges being on the cards. 34 Another issue relates to the failure of the appellant to file an affidavit saying she did not want the respondent to be prosecuted.18 I do not regard it as appropriate to be critical of the appellant for not making such an election. It is not a relevant consideration but appears to have been a factor considered by his Honour. 35 A further issue is the question of balancing the prejudice to the appellant as opposed to the prejudice to the respondent in circumstances where the decision is to continue a stay or not. Justice Stanley made it clear that the process in determining whether or not to grant a stay involves the weighing up of the prejudice to be suffered by the respective parties. That process should be followed in relation to an interlocutory application to lift the stay. There should be a fresh consideration of the prejudice to each of the parties. It is not apparent from the reasons that his Honour undertook that process. 36 It follows, when the court finds there has been an outcome error, that the exercise of the discretion will produce a different outcome. 37 It is useful to consider what was said by Justice Stanley in Washington v Titan Fan Products Australia Ltd & Ors.19 In that case his Honour had previously granted 15 Reasons for Decision of 7 February 2024 at [31]. 16 Reasons for Decision of 7 February 2024 at [41]-[42]. 17 Reasons for Decision of 7 February 2024 at [45]. 18 Reasons for Decision of 7 February 2024 at [61]-[62]. 19 [2021] SASC 124. -- 10 of 12 -- [2024] SADC 131 9 a stay. He was considering an application to discharge the stay based in part on the fact that SAPOL had closed the file in the same way that they have in this matter:20 In my view the balance in weighing the prejudice each would suffer if the stay is not discharged now has shifted from the balance of the prejudice that led me to grant the stay in September 2020. At that time the risk of criminal proceedings was “on the cards”. That is no longer the case. While the risk that the criminal investigation could be reactivated cannot be entirely excluded, the risk of Julie facing criminal proceedings has significantly diminished. Eunice enjoys a prima facie entitlement to have her civil proceedings tried in the ordinary course. A court will not grant, or continue, a stay of civil proceedings merely because related charges have been brought against an accused and criminal proceedings are pending. A stay of civil proceedings may be warranted if it is apparent that the accused is at risk of prejudice in the conduct of his or her defence in a criminal trial. The risk of prejudice must be real, and in construing what the interests of justice require, that risk is to be weighed against the prejudice that a stay of the civil proceedings would occasion. … I accept the potential exists that if the stay is discharged Julie would confront this dilemma. But the significant fact remains that there is no longer an investigation into her conduct by the police. The only risk that exists if the stay is discharged is that Julie may do or say something in these civil proceedings, which may persuade the police that some proper basis then exists to reactivate the criminal investigation into her conduct. I accept the submission of Eunice that this risk is no different from that faced by any litigant in civil proceedings where the allegations in those proceedings might constitute allegations of criminal conduct. In the circumstances that now exist, where an investigation is no longer on foot and charges are no longer “on the cards”, a decision by Julie to give or not give evidence in the criminal proceedings is not a risk sufficient to warrant the continuation of the current stay. Otherwise, most civil proceedings that allege conduct that might constitute criminal offending would be at risk of being stayed, notwithstanding that a criminal investigation is not being undertaken, and charges have not been laid and are not “on the cards”. (footnotes omitted) 38 The position in this matter is the same as the position in the second Washington decision. The only risk for the respondent is if he says or does something in the civil proceedings which persuades the police to reactivate the criminal investigation. His Honour Justice Stanley found that not to be a sufficient risk to warrant the continuation of a stay. I agree with that approach. 39 Unless the approach adopted by Justice Stanley is followed, the stay in this matter will be permanent. There will be a circular argument that the stay should remain because the criminal proceedings might be reactivated by something said by the respondent. The appellant will never be able to break that circular argument. 40 It is also worth noting that in the first Washington decision21 and in Zhao, the court said the mere fact of criminal charges is not itself sufficient. Even when criminal charges are afoot, the court still needs to go through the process of 20 [2021] SASC 124 at [13] and [15]. 21 Washington (by her litigation guardian Edward Michael Byrt) v Titan Fan Products Australia Ltd [2020] SASC 230. -- 11 of 12 -- [2024] SADC 131 10 balancing the prejudice. This case is far removed from that. There are no present criminal proceedings and no present prospect of criminal proceedings being laid. The rationale for granting a stay does not exist. 41 The appeal is allowed and the orders of the court are as follows: 1. An extension of time within which to appeal the first decision is declined. 2. Leave is granted to appeal the second decision. 3. Appeal allowed in respect of the second decision. 4. The stay made by Associate Judge Blumberg on 4 October 2022 is discharged. 5. The respondent is to pay the appellant’s costs of the appeal on the standard costs basis. 6. The appeal is certified fit for counsel. 7. The respondent is to file a defence within 21 days. -- 12 of 12 --