Feigned Issues
IOL PETROLEUM LTD v JOHN O’NEILL & ORS
2334/94
THURSDAY 29 AUGUST 1996
THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
YOUNG J
JUDGMENT
HIS HONOUR: This is an application by the plaintiff by notice of motion that the proceedings be tried with a jury.
These proceedings were commenced in the Equity Division in 1994 for orders resulting from alleged loss to the plaintiff as a result of the activities of the first, second and third defendants in a corporate joint venture. It is alleged that the fourth defendant, the State Bank of New South Wales, is also liable to the plaintiff because of its involvement in those activities. As the Registrar was having difficulty getting the case ready for trial, it was referred to me for case management and has been in my list for that purpose for about ten months.
The plaintiff’s application for a jury is resisted by the first, second and fourth defendants, the third defendant not appearing.
Mr McQuillen, for the plaintiff, urges trial by jury for two basic reasons. The first is that in an issue of fraud, or perhaps generally, jury trial is the sacred bulwark of the nation and is to be preferred to other methods of trial. The second is that the flavour of ss 85 to 89 of the Supreme Court Act makes it clear that the judge has a discretion as to the mode of trial and further indicates that, with any fraud matters, trial by jury may be a preferable course.
The submissions based on the history of juries seem to have derived from what the Court of Appeal said when dealing with a Common Law judge’s order of his own motion to deny a trial by jury in a hospital negligence case; Pambula District Hospital v Herriman (1988) 14 NSWLR 387. As Mr Russell, for the fourth defendant, has pointed out that case is no real guide to the present because the court was there dealing with the situation where there was a right to a jury at Common Law in the circumstances that had happened. However, Kirby P does at pp 394-397 trace through in outline the history of jury trials and Blackstone’s phrase “sacred bulwark of a nation” occurs at the top of p 395.
The argument of history does not appeal to me very much at all. The potted version given by Kirby P in the Pambula case does not, nor was it intended to, deal with the full history of the system.
At Common Law the civil jury as we now know it evolved through a series of accidents of history. In the middle ages trial was by God not by man, and thus by ordeal or by compurgation until and indeed even after the writ of trespass came into being in about 1250. That writ provided for a superior method of trial in the eyes of more progressive thinkers, namely by the men of the locality certifying what the facts were to the Commissioner of oyer and terminer or nisi prius, who was sent out to the country to inquire into the matter. The writ to the local sheriff provided that all those local men who knew something about the matter were to come into Westminster, unless before (nisi prius) a Commissioner visited the area in the meantime. The Commissioners of nisi prius were sent out into the locality two by two during the vacations between law terms. The Commissioners may or may not have been judges of the court where the suit was pending.
Initially the Commissioners found out from the local inhabitants what the truth was, answered the question in issue for trial and awarded the postea to the successful party. At the beginning of the next term the Court in Banc then considered what judgment should be given.
As time went on the jury changed from being a group of witnesses to impartial triers of fact; the watershed being Bushell’s case in (1670) Vaughan 135; 124 ER 1006. However, the theory was still the same. A Common Law action was divided into three parts, (a) ascertainment of the issues for trial in Westminster; (b) the trial at nisi prius before a Commissioner and a jury in the country where the event had happened; and (c) judgment before the Court in Banc in Westminster.
In New South Wales trial by jury was introduced in principle by the New South Wales Act of 1823 9 George IV, chapter 96, but initially juries were military assessors and it was not until the Act 8 Victoria IV in 1844 that civil juries of four were introduced as we now know them in New South Wales.
It would seem that four were selected because there was a very limited number of free citizens of appropriate qualifications who could serve on a jury. Thereafter, until the coming in of the Supreme Court Act, the jury was the ordinary method of trial at Common Law.
However, it must be remembered that the way in which the jury system worked at Common Law up until 1972 was much the same as it worked in England last century. First, issues for trial were produced. This was by the pleading system introduced by the rules of Hilary term 1834, which were adopted in New South Wales, of the plaintiff putting out his story (called “count” after the French word “conte”, a little story) in recognisable legal form in a document called a declaration, to which the defendant would then put on a plea.
With certain exceptions, such as pleas of abatement and pleas requiring novel assignment by the plaintiff, the plea was either a confession and avoidance or a traverse. If it was a traverse the replication joined issue and would produce a question to which a jury could answer yes or no. If the plea was a confession and avoidance then either in the replication there would be a traverse and then there could be a joinder of issue in the rejoinder, or else somewhere along the line a traverse would be produced, which would allow the jury to find yes or no to a particular question.
The pleadings were then reproduced into a document called “Issues for Trial”. In England and Australia last century these were then put in the saddlebag of the judge going on circuit. However, in more modern times, whether by trial at nisi prius or whether in the Supreme Court in King Street, Sydney, they were merely put at the front of the court file, but that was the only document which the judge at nisi prius had when he was trying the matter with a jury. The jury then returned an answer yes or no, though if there was a damages trial and the plaintiff succeeded it also fixed the amount of damages.
The Supreme Court of New South Wales by the Third Charter of Justice was given all the power of the Court of Chancery, as well as the Common Law courts and the Ecclesiastical courts.
In the 1840s provision was made for a primary judge in Equity. It must be remembered that at that stage when there is a reference to the Supreme Court it meant the Supreme Court in Banc. A single judge could not sit by himself, except as a Commissioner of nisi prius, oyer and terminer or general gaol delivery. However, the Act was amended so that the power of all the judges sitting in Banc was delegated to the primary judge in Equity, later called the Chief Judge in Equity, to deal with the Equity suits that arose within the court.
Thus from 1842 onwards trials of fact at Common Law were dealt with by juries at a hearing presided over by a Commissioner of nisi prius, though in New South Wales invariably this was a judge, and trials in Equity were dealt with under the fact-finding power of the Full Court by its delegate the primary judge.
Although in New South Wales the Commissioner at Common Law was a judge who sat with a jury, on the famous occasion when Milner Stephen, J died in chambers in 1939 after the jury had retired, another judge, Pitt AJ, was able to take the jury’s verdict without there being any mistrial. This showed that the judge was really not part of the fact-finding process at all.
When the procedure in Equity was consolidated into the Equity Act of 1901, as a result of the activities of the Commissioners for Law Reform in the last five years of the nineteenth century, the rule was set out in s 51 of the Equity Act 1901, which was the consolidation of previous legislation, that:
“The evidence to be used at the hearing of any suit (in Equity) shall be taken before the judge sitting in open court without a jury.”
However, there was power for the judge to order a jury.
As far as my researches go, no jury has actually sat in Equity since 1904 and that a jury actually sat then I have on purely anecdotal evidence.
In Goodsell v National Bank of Australasia (1889) 6 WN (NSW) 55 the then Chief Judge in Equity ordered that there be a trial by jury and seemed to consider that if there was a question of fact of sufficient importance it was appropriate to order trial by jury. However, in Sullivan v The English Scottish and Australian Bank Ltd (1904) 5 SR (NSW) 52 Walker J considered that that case was not sufficiently reported to have him convinced that the then Chief Judge was laying down some general rule and although Walker J’s inclination was to let the jury have the responsibility of deciding the case rather than himself, he thought that where the application for jury was opposed the party applying to make out a case that a jury should be granted in Equity bore the onus and he had to show some good reason why the normal form of trial should be departed from. As far as my researches go that was the last time when the matter was actually considered in Equity in New South Wales.
So far as England is concerned, the last reported example which I can find of a trial by jury in Equity is Evan v Merthyr Tydfil UDC [1899] 1 Ch 241. In that case Romer J had ordered that an issue of fact, which was specified in his order, be tried before a special jury at Swansea. The matter does seem to involve the right of commons in that part of Wales. Why his Lordship ordered a trial by jury in that case is not reported.
It must also be remembered that prior to 1875 or a little before that date the fact-finding process in Equity was extremely limited. Mostly the evidence was in a written form, which was presented to the Lord Chancellor or the Master of the Rolls by a Six Clerk having put together the affidavits from statements of the witnesses. The Six Clerks seemed to be a sort of combination of Registrar in Equity and solicitors. There was no cross-examination and so the procedure was just not suitable for deciding contested issues of fact. Thus the practice grew up in Equity of having the parties put up a feigned issue at Common Law.
According to Blackstone (1857 ed vol 3 p 523), feigned issues were borrowed from the sponsio judicialis of the Roman Law. Feigned issues were employed not only to try disputed facts arising in equity proceedings, but also, by consent, to determine other disputed questions of fact without the formality of pleading.
The procedure for trying a feigned issue was that the plaintiff would bring an action at law and declare, fictitiously, that he had a wager of [sterling]5 with the defendant that the fact that needed to be proved was true. He averred that this fact was true so that he was entitled to the [sterling]5. By his plea, the defendant admitted the feigned wager but traversed the allegation of fact. Issue would thus be joined and a question framed which the jury could answer yes or no. Feigned issues were previously dealt with under the General Legal Procedure Act, 1902, and, when that Act was repealed by the Supreme Court Act 1970, feigned issues were considered to be abolished.
However, in New South Wales there has never been any need for a special procedure in Equity because the primary judge has never been limited by the fact-finding machinations of the Six Clerks. We never had the equivalent of the Six Clerks or the Sixty Clerks in New South Wales and judges in Equity have been able to hear and decide matters of fact just as any other judge. The need, accordingly, for questions of fact to go out to Common Law juries was very much more limited in New South Wales than it was in England last century. When it did happen, it happened by way of feigned issue.
Indeed, in New South Wales the feigned issue was, so far as reported cases show, used not for fact-finding in equity, but to try facts where a statute referred a problem to the Full Court or where facts needed to be found for the Full Court to consider whether it would make a prerogative writ absolute. See Re Rundle (1894) 11 WN (NSW) 159 (Stamp Duties Act); Ex parte Saunders (1900) 16 WN (NSW) 166 (Real Property Act); Ex parte Keegan (1907) 24 WN (NSW) 72 (Public Works Act) and Ex parte Rae; Re Hartigan (1940) 40 SR (NSW) 438 (Mandamus under Government Railways Act).
One of the reasons why the feigned issue was adopted was that it is necessary to isolate questions for a jury. At Common Law, as I have said, that question was isolated by the procedure laid down in the rules we got from England, being the rules of Hilary term 1834. The feigned issue procedure picked up those rules or else special orders could be made under s 11 of the General Law Procedure Act.
Accordingly, I do not really consider that Mr McQuillen’s excursus into history assists him because since 1842 these questions have ordinarily been heard by a judge sitting alone in Equity or in the Equity Division.
Looking at the Statute, the general rule is that there should be trial by judge alone. In Common Law there is an exception where fraud is involved, but the Statute limits this to Common Law trials. The flavour of the Statute is there however.
I consider that the submission of Mr McClellan QC, who appeared with Mr McGovern for the first and second defendants, is correct, that that provision is there not for the benefit of plaintiffs who attack someone else’s character, but rather for the benefit of a person whose character is attacked to have a chance of vindication by a jury of his or her peers on the subject matter of that attack. That is why s 88 deals with a seemingly heterogeneous list of fraud, defamation, false imprisonment and seduction. The provision as to breach of promise of marriage has been superseded by Commonwealth legislation prohibiting such actions.
Mr McClellan QC says that there is no discretion to order trial by jury in Equity. I reject that submission. However, it seems to me that when considering whether to exercise the discretion the judge takes into account the fact that the normal method of trial is by judge alone, and he also takes into account the sort of factors mentioned by Mr Russell, for the fourth defendant, namely, length of trial by judge compared with trial by jury, the cost, the fact that commercial factual matters are involved and that the factual matters are complex.
Mr McClellan QC’s response to that is that judges at Common Law and in criminal trials are constantly directing juries on complex matters of fact and that the Pambula Hospital case shows that these are really irrelevant considerations.
I know that judges do have to direct juries on complex matters, but I think the general feeling in the legal profession is that despite the quality of the judges who do that direction, the trial by jury of such issues is second best.
Accordingly, I do not consider that there is sufficient reason to grant trial by jury and the notice of motion filed by the plaintiff on 23 August 1996 is dismissed with costs.
I now have to consider what directions should be made to get the trial ready for hearing.