Ajay Chand and Shashi Chand v Lifestyle Homes New South Wales Pty Limited

[2008] NSWDC 354

CITATION:	Ajay Chand and Shashi Chand v Lifestyle Homes New South Wales Pty Limited [2008] NSWDC 354
JUDGMENT DATE:	28 October 2008
JURISDICTION:	District Court of New South Wales
JUDGMENT OF:	Cogswell SC DCJ
DECISION:	I refuse to set aside the judgment and I order a stay on the judgment entered on 6 August 2008 in case number 2984 of 2008 pending determination of the proceedings. Each party to bear their own costs of the motion.
CATCHWORDS:	Appeal of proceedings brought in Home Building Division of Consumer, Trader and Tenancy Tribunal - application to set aside judgment of Tribunal - entry of judgment - stay of judgment
LEGISLATION CITED:	Consumer, Trader and Tenancy Tribunal Act 2001 Uniform Civil Procedure Rules 2005
CASES CITED:	Kalokerinos v HIA Insurance Services Pty Limited [2004] NSWCA 312 The Owners - Strata Plan No 53094 v Fair Trading Administration Corporation [2007] SWSC 249
PARTIES:	Ajay Chand Shashi Chand
FILE NUMBER(S):	4049/08
COUNSEL:	Ms Painter (respond)
SOLICITORS:	Mr Ho (app)

JUDGMENT

1. Mr Ajay Chand and Mrs Shashi Chand are home owners. Lifestyle Homes New South Wales Pty Limited is a builder. Work was done by Lifestyle for the Chands. Lifestyle claimed that it was not paid for the work and proceedings were brought in the Home Building Division of the Consumer, Trader and Tenancy Tribunal. Lifestyle won the case and the Chands lost. The Tribunal ordered the Chands to pay Lifestyle an amount of about $125,000.

2. The Chands wanted to appeal that determination by the Tribunal. At the same time Lifestyle, understandably, wanted to be paid the money which the Tribunal had ordered that it be paid. Lifestyle took steps to register the judgment and order of the Tribunal as a judgment of this court. Once that judgment was obtained Lifestyle brought bankruptcy proceedings against the Chands.

3. The Chands have now approached me asking for orders that the judgment be set aside. An alternative order is that the judgment be stayed. For reasons which I will briefly give I propose to refuse the first order and to grant the second order.

4. The evidence discloses this sequence of events. On 12 June 2008 the Tribunal gave its judgment. On 16 June 2008 the Tribunal, pursuant to that judgment, ordered the Chands to pay Lifestyle $124,939.30 immediately. On 19 June 2008 the Chands were notified of the Tribunal’s decision. On that day Mr Chand approached the Tribunal registry. According to exhibit B, a letter written by Mr and Mrs Chand to the Registrar of the Supreme Court, when they approached the Tribunal registry on that day they asked for advice about appealing from the decision. They also asked specifically about what they needed to do to obtain a stay of the orders made by the Tribunal. In exhibit B, which is dated 24 September 2008, the Chands say that they were advised by an officer in the registry that:

“Upon filing of the summons the Supreme Court or the Tribunal will suspend the operation of the orders pending the determination of the appeal.”

5. On 30 June 2008 Lifestyle solicitor sought the registration of a certificate of the judgment of the Tribunal in the District Court. That application was successful and the certificate of the Tribunal’s order was registered in the District Court on 3 July 2008. In the meantime on 2 July 2008, according to exhibit B, Mr or Mrs Chand was in contact with the Supreme Court registry. Exhibit B claims that they were advised by the Supreme Court registry “that I was not required to file any other separate application for suspension of the orders. The orders would be suspended without any further application.”

6. Although parts of exhibit B were objected to on the grounds of relevance and hearsay, I overruled the hearsay objection upon the basis that the truth of the assertions made in both registries was not being relied upon, but what was being relied upon were the fact that the words were said. This means that the account of what the Chands were told in each registry was not being tendered for a hearsay purpose. I regard the assertions as relevant to the exercise of my discretion to both set aside the judgment and to order a stay. Mr Chand who was called by Mr Ho, who appears for the Chands on this application, was not challenged by Ms Painter, who appears for Lifestyle, as to the assertions he made about what he was told by either registry. I accept those assertions. That is an important determination for me in resolving this case.

7. The Chands filed by way of summons their appeal from the Tribunal’s determination on 7 July 2008. There was a callover on 17 July 2008 at which the Chands were represented. In exhibit B the Chands claimed that “the solicitor acting for me, also did not have full grasp of the matter and particularly overlooked to make any particular mention regarding the suspension of the Tribunal’s orders until further orders of the court.” That assertion was not challenged.

8. On 6 August 2008 Lifestyle obtained judgment in this court pursuant to s 51(3) of the Consumer, Trader and Tenancy Tribunal Act 2001 against both Chands in the sum of $124,939.30. On 16 September 2008 both the Chands were served with bankruptcy notices. It is clear that the bankruptcy notices were served on behalf of Lifestyle.

9. On 16 October 2008 the registrar of the Tribunal wrote to the Chands a letter containing the following paragraph:

“Pursuant to section 67(5) of the Consumer, Trader and Tenancy Tribunal Act 2001, the operation of the orders made on 12 June 2008 in file number HB07/24668 and HB07/43165 is suspended until the appeal is determined, or until further order of the District Court.”

Earlier in the same letter the following appeared:

“On 16-JUN-2008 the following orders were made: STAY OF PROCEEDINGS ORDER MADE PURSUANT TO SECTION 67(5) OF THE CONSUMER, TRADER AND TENANCY TRIBUNAL ACT 2001.”

On one reading of that document, which is an annexure to the affidavit of Mr Ho dated 23 October 2008, the stay order was made on 16 June 2008. However, I accept the submission of Ms Painter that the correct intention of that letter is contained in the earlier paragraph which I quoted, which asserts that the operation of the orders “is suspended”. I reach that conclusion because I accept her argument that had the order been made on 16 June 2008 that would be inconsistent with the issue of the certified copy of the order from the Tribunal dated 25 June 2008, which provided that the Chands were to pay Lifestyle “immediately”. Hence I conclude that a stay has been made, but made on 16 October 2008.

10. Mr Ho argued that the judgment should be set aside. He relied on r 36.15 of the Uniform Civil Procedure Rules 2005. He had no argument which supported that the judgment was entered “illegally or against good faith” and I do not find that it was so entered. He argued that it was entered irregularly by arguing that an interpretation of the letter from the Tribunal dated 16 October 2008 was that the stay was ordered by the Tribunal on 16 June 2008. For the reasons which I have already given I reject that submission, finding as I have that the stay was not ordered until 16 October 2008.

11. Ms Painter argues that there is nothing demonstrably irregular about the entry of the judgment in this case. The circumstances of the Chands not knowing about it and, as she argued, even accepting that they may have been misled about the stay, does not impact objectively on the obtaining of the judgment. I accept her submission. I do not find that any irregularity attended the entry of the judgment.

12. However, I gave Mr Ho leave to amend his notice of motion to claim a stay of the judgment as an alternative to setting it aside. Ms Painter argued that the stay ought not to be given. She argued that her clients had obtained their judgment from the Tribunal and were out of funds and that there was no reason why an otherwise enforceable judgment of the Tribunal heard after a determination on the merits ought not to produce for her client its results of immediate payment. In addition she focused on the grounds of appeal by the Chands against the judgment arguing that they lacked merit.

13. I turn first to the consideration of that second argument about the merits of the grounds of appeal. I think that Ms Painter’s argument itself has a lot of merit. She points to the provisions of s 67 of the Consumer, Trader and Tenancy Tribunal Act which provide the appeal mechanism including the grounds. She points to the terms of the section and to two authorities which restrict the right of appeal conferred by s 67 to a question of law and have not treated the words of the subsection as giving a wider right of appeal. I take that summary from [56] of the judgment of the Court of Appeal in Kalokerinos v HIA Insurance Services Pty Limited [2004] NSWCA 312. The passage appears in the judgment of Bryson JA with whom Santo JA agreed. As his Honour earlier says at [41]:

“Section 67 makes a careful delimitation of what the court on appeal may do. It provides that the appeal court ‘may only deal with a decision on a question with respect to a matter of law which is appealed against’”.

It is clear from that case and from the other case Ms Painter referred me to, The Owners - Strata Plan No 53094 v Fair Trading Administration Corporation [2007] SWSC 249, a decision of Associate Justice Malpass, that the available grounds of appeal are narrowly confined.

14. I think that there is a good deal of merit in Ms Painter’s submissions that the appeal grounds specified in the summons instituting the appeal in this case do not raise the kinds of legal issues which the authorities say such an appeal is limited to. However, I do not determine that submission regarding it as appropriate for the court on appeal. The one ground which seems to me to raise a question of law is ground 2, which claims that the Tribunal erred in law in failing to apply correct principles of law in reaching its finding and its ultimate conclusion that the builder had in fact suffered the amount of damage for the breaches alleged and that he was entitled in law to the amount of damages as assessed and awarded by the Tribunal. Ms Painter argues that that ground is expressed in terms of law but that is mere window dressing for a review of factual conclusions concerning damages. Such a submission may well be made out on appeal but the ground specifically argues a failure by the Tribunal to apply correct principles of law in reaching a particular finding and conclusion. I do not have before me the judgment of the Tribunal. It may well be that certain principles of law have been applied which are incorrect or that no principles of law were applied and that there has been a failure to apply the correct principles. That ground on the face of it saves the grounds of appeal from a determination for my limited purposes that the grounds lack merit. There is at least in my view one ground which should arguably be agitated on appeal.

15. The principle reason for which I favour a stay is the circumstances in which the judgment was entered. I hasten to add that I direct no criticism whatsoever towards the solicitors for Lifestyle who acted at all times it seems to me appropriately and in their client’s interests. However, on the unchallenged evidence before me it does seem that the Chands received misleading advice from both the Tribunal registry and the Supreme Court registry. Once again I hasten to add that there is no evidence from either registry on that point. The evidence as it stands is an assertion by the Chands of facts about what they were told. Based upon that evidence it seems to me to be clear that the Chands were alert early in the piece to the need to stay the judgment which had been entered against them. The advice they received from sources which they were entitled to consider reliable was that nothing need be done. They therefore found themselves with a judgment against them for some $125,000.

16. A consequence of not granting a stay could be that the Chands become bankrupt based upon the judgment. If that were the case then decisions regarding the prosecution of their appeal may well be taken out of their hands and made by the trustee or receiver in bankruptcy. It seems to me to be unfair that they would find themselves in the circumstance where they are deprived from making those decisions because of advice they received some months ago and relied upon which was, accepting their account, wrong. If the advice had been correct they would probably have applied for and perhaps been granted a stay. In that case the judgment could not have been entered and they would be able to prosecute their appeal. There is therefore in my view some prejudice which they will suffer as a result of receiving wrong advice from both registries.

17. On the other hand Ms Painter forcefully argues that her client ought not to be deprived of the proceeds of judgment obtained after a hearing on the merits and after judgment was regularly entered. I accept the force of that argument. Although Ms Painter’s client can be compensated by way of interest for lost time, I propose to hear the parties on why I ought not to direct that this appeal be expedited so that the issue of the sufficiency of the grounds of appeal and the result of the appeal can be determined sooner rather than later.

18. For the reasons which I have just given, the orders which I make on this motion are: I refuse to set aside the judgment and I order a stay on the judgment entered on 6 August 2008 in case number 2984 of 2008 pending determination of the proceedings. I do not regard it as necessary to make any order in respect of number 2.

Mr Ho and Ms Painter, that leaves expedition and costs. If I’m inclined to order expedition I think both of you have indicated you’re--

HO: We’re happy to do that.

HIS HONOUR: Happy with that.

PAINTER: Yes, your Honour.

HIS HONOUR: I direct that these proceedings be expedited. Costs of the motion. Costs should follow the event?

HO: Yes.

PAINTER: Depends on how you determine the event.

HIS HONOUR: Just the motion. Yes, I see what you mean.

PAINTER: Your Honour, I do make an application for my client’s costs in these proceedings. The primary relief that was sought was to set aside the judgment. Your Honour’s refused that. Secondary relief arose during the course of argument as an indulgence, if I might put it that way and in those circumstances in my submission the proper order is that my client’s costs of the motion be paid by the plaintiffs.

HIS HONOUR: I can see force in that but I think the relief I will provide your client is not to order costs against your client and I am going to order that each party bear their own costs of the motion.

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