Attard v Rutkowski

[2023] NSWCA 314

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Attard v Rutkowski [2023] NSWCA 314

Hearing dates:

13 December 2023

Decision date:

15 December 2023

Before:

White JA at [1]; Adamson JA at [3]

Decision:

(1)   Leave to appeal refused.

(2)   Order the first applicant to pay the respondents’ costs of the application for leave to appeal.

Catchwords:

LEAVE TO APPEAL — PRACTICE AND PROCEDURE — appeal against dismissal from appeal in Local Court — accountant sued for payment of outstanding fees claimed in invoices — amount in issue does not warrant grant of leave to appeal — evidence not adduced to prove basis of amounts claimed in invoices — whether plaintiff needs to do more to establish right to sums depends on whether quantum challenged by defendant — issue whether lump sum claimed in invoice with no explanation as to calculation is evidence of amount owing on invoice does not give rise to issue of principle or question of public importance in circumstances where quantum of invoices not challenged by defendant in defence and raised for the first time in closing submissions

Legislation Cited:

Supreme Court Act 1970 (NSW), s 101

Civil Procedure Act 2005 (NSW), ss 56, 58, 60

Cases Cited:

Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164

Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69

PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48

Roude v Helwani [2020] NSWCA 310

Smits v Roach (2006) 227 CLR 423; [2006] HCA 36

Category:

Principal judgment

Parties:

Anthony Attard (First Applicant)
Advanced Property Investments Pty Ltd (Second Applicant)
Advance Pallets Pty Ltd (Third Applicant)
Attard Family Holdings Pty Ltd as Trustee for the Attard Investment Unit Trust (Fourth Applicant)
Anthony Attard as Joint Trustee for the Attard Family Superannuation Fund (Fifth Applicant)
Jason Paul Rutkowski (First Respondent)
Carmen Attard as Joint Trustee for the Attard Family Superannuation Fund (Second Respondent)

Representation:

Counsel:
J Horowitz (Applicants)
P Boncardo (First Respondent)

Solicitors:
Benjamin Lawyers (Applicants)
Celtic Legal (First Respondent)

File Number(s):

2023/241130

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

Attard v Rutkowski [2023] NSWSC 784

Date of Decision:

7 July 2023

Before:

Harrison AsJ

File Number(s):

2022/317719

JUDGMENT

1. WHITE JA: I agree with Adamson JA.

2. The principal issue on this application is not whether the invoice is evidence that the amount claimed in the invoice is due, but whether that was an issue sufficiently raised in the Local Court. Both the magistrate and the primary judge held that it had not been clearly raised. That does not give rise to a question of principle that warrants the grant of leave in a case where the costs exceed the amount at stake.

3. ADAMSON JA: The applicants are Anthony Attard and associated entities. Mr Attard seeks leave to appeal against the dismissal of his appeal in the Supreme Court by Harrison AsJ (the primary judge) against a judgment in the sum of $16,610 entered against him in the Local Court by Greenwood LCM (the magistrate) in favour of the first respondent, Jason Rutkowski, in respect of accountancy services provided by Mr Rutkowski. The second respondent, Carmen Attard, is a joint trustee of the Attard Family Superannuation Fund and did not take an active part in the appeal. The remaining applicants seek leave to appeal only against the dismissal of their appeal against the quantum of damages, $8,800, which the magistrate ordered Mr Rutkowski to pay to the third cross-claimant, Advance Pallets Pty Ltd (Advance Pallets), on the cross-claim.

4. The orders sought by the applicants, if leave is granted, are that the appeal be allowed; the judgment in the sum of $16,610 in favour of Mr Rutkowski against Mr Attard be set aside and that the judgment in favour of Advance Pallets be reduced from $8,800 to $4,400. In the Court below, the latter claim was explained on the basis that the applicants conceded that if the judgment in favour of Mr Rutkowski was set aside, the damages claimed on the cross-claim would be reduced by $4,400. Hence the amount at issue is $12,210.

The context of the application for leave to appeal

The proceedings in the Local Court

5. In the Local Court, Mr Rutkowski sued Mr Attard for $16, 610, being fees alleged to be outstanding in respect of accounting services provided by Mr Rutkowski to Mr Attard and associated entities. Mr Attard denied that he had signed an agreement for the provision of the services or that he had agreed to the terms. Further, and in the alternative, he alleged that the services provided by Mr Rutkowski had not been provided with due skill and care.

6. In the cross-claim, Mr Attard sought a set-off and his associated entities, including Advance Pallets, claimed damages for losses alleged to have been suffered as a consequence of the alleged failure to provide the services with due skill and care. Mr Attard claimed an amount of $20,900 by way of set-off and damages. Advance Pallets claimed an amount of $8,800.

7. Until closing submissions before the magistrate, Mr Attard did not challenge the amounts claimed in the invoices rendered by Mr Rutkowski, which formed the basis of Mr Rutkowski’s claim.

8. Mr Rutkowski succeeded on his claim and obtained judgment against Mr Attard in the sum of $16,610, which comprised the total of the outstanding invoices. Advance Pallets obtained judgment on the cross-claim in the amount of $8,800. The cross-claim was otherwise dismissed. The magistrate ordered the parties to pay their own costs of the cross-claim.

The proceedings in the Supreme Court

9. Mr Attard appealed (and, to the extent necessary, sought leave to appeal) to the Supreme Court against the judgment of $16,610. He sought orders setting aside the judgment in so far as it claimed an amount outstanding for work performed. He also sought (in ground 4 of his appeal to the Supreme Court) that the judgment on the third cross-claim in favour of Advance Pallets should be reduced to $4,400.

10. Mr Attard submitted to the primary judge (reiterating his submission to the magistrate) that he ought not to have been found liable in circumstances where Mr Rutkowski had not adduced evidence to prove the basis of the amounts claimed in the invoices (by, for example, proving the agreed hourly rate, the hours spent and the identity of the person who performed the work).

11. The primary judge said, of the way Mr Attard had conducted the proceedings in the Local Court, at [28]:

“Mr Rutkowski’s affidavit evidence (which was not relevantly challenged) was that he had, in July 2020, provided accounting services as detailed in invoices issued to Mr Attard. Each of the invoices was directed to Mr Attard and specified, relevantly, that the work involved was, variously, the ‘preparation and lodgement’ of accounts and/or taxation returns, including schedules required by the Australian Taxation Office (Ex A, pp 154-159). An amount was claimed for work specified in each invoice. Particulars of the time spent performing the work were not set out on the invoices. No request was ever made by Mr Attard for particulars of time spent on the work detailed in the invoices or the identity of the person who performed the work and their hourly rate either during the proceedings or before the proceedings were commenced nor after he had been served with the invoices.”

12. The primary judge dismissed Mr Attard’s challenge to the judgment against him and said:

“85   So far as ground 1 is concerned, Mr Attard had not pleaded or raised that it was a term of agreement between the parties that Mr Rutkowski was permitted to only charge amounts for agreed hourly rates for members of his firm who provided the work. The [sic] was an issue raised for the first time in final submissions. The magistrate correctly made a finding that the claim had not been pleaded. In any event, her Honour did consider this issue as I have previously stated in this judgment. To repeat, her Honour stated:

‘In submissions, Mr Attard says that agreement means that the hourly rates were to be agreed between the parties. This was not pleaded. UCPR 14.14 require parties to specifically plead any matter which may take the opposite party by surprise. In accordance with the recent Court of Appeal cases of Bryant v Quinn [2022] NSWCA 163, I will not consider this argument. For the first time in final written submissions, the defence raises an issue about the nature of the claim. Was this a claim for liquidated damages or unliquidated? For the same reason, I will not consider this issue.’

86   Her Honour clearly turned her mind to this issue that arose in final submissions. It follows that the authorities cited by Mr Attard are not applicable, particularly where it appears that the issue of the lack of detail in the invoices was not pleaded.”

Whether leave to appeal ought be granted

13. Leave to appeal is required as the appeal is from a final judgment in proceedings of the Court which does not involve a matter at issue amounting to $100,000 or more: s 101(2)(r) of the Supreme Court Act 1970 (NSW).

The relevant principles pertaining to leave

14. An applicant for leave to appeal is required to demonstrate an issue of principle, a question of public importance or a reasonably clear injustice going beyond something which is merely arguable: see the authorities referred to in PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 at [6] (Bell P and Simpson AJA).

15. Section 58 of the Civil Procedure Act 2005 (NSW), which requires the Court to act in accordance with “the dictates of justice”, applies to leave applications: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [36] (Basten JA, Tobias AJA agreeing). So, too, does s 60 of the Civil Procedure Act which provides:

“60 Proportionality of costs

In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.”

16. Where leave to appeal is required because the amount in issue is below (and in the present case, significantly below) the statutory limit, leave will only be granted in an exceptional case. Early finality and determination of litigation involving relatively modest amounts of money is desirable to avoid the costs exceeding the amount in issue: Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69 at 3 (Cole JA). Section 60 is a statutory endorsement of these principles.

The proposed appeal ground

17. Mr Attard seeks leave to appeal on the following ground:

“The judge below erred in holding that the lump sum invoices for services rendered tendered by the First Respondent [Mr Rutkowski] at the hearing of the Local Court proceedings – with no explanation of how those lump sums were calculated – constituted evidence of the First Respondent’s damages in the amount of $16,610.”

18. A party is generally bound by the conduct of litigation: Smits v Roach (2006) 227 CLR 423; [2006] HCA 36 at [46] (Gleeson CJ, Heydon and Crennan JJ). In civil proceedings, parties are obliged to assist the Court to further the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings: ss 56(1) and (3) of the Civil Procedure Act. Their legal representatives are prohibited from causing their clients to breach that obligation: s 56(4)(a) of the Civil Procedure Act.

19. Thus, if there had been a real dispute as to the quantum of the invoices, it was Mr Attard’s obligation to identify the dispute in his pleadings and in the conduct of the litigation (by not admitting that the amount alleged to be owing was referable to work performed, seeking particulars of how the amounts were calculated or issuing a notice to produce for the underlying documents). When this did not occur, Mr Rutkowski was entitled to conduct the case on the basis that the quantum was not in dispute and that, accordingly, he need not spend time and resources in proving how the matters claimed in the invoices were arrived at.

20. Further, Mr Attard had not, prior to his closing submissions in the Local Court, disputed the reasonableness of the quantum of the invoices. In Roude v Helwani [2020] NSWCA 310, this Court said at [33]:

“… A failure to respond to a demand for payment may amount to an admission if there are circumstances which render it more reasonably probable that a person who denied liability for the claim would answer the claim than that he would not (L Shaddock & Associates Pty Ltd v Parramatta City Council (No. 1) (1981) 150 CLR 225 per Gibbs CJ at 230; [1981] HCA 59; Thomas v Hollier (1984) 156 CLR 152 per Gibbs CJ at 157; [1984] HCA 35; J D Heydon, Cross on Evidence at 33,435).”

21. Mr Attard has sought to characterise the question whether a lump sum claimed in an invoice, with no explanation as to how it has been calculated, is evidence of the amount owing on the invoice, as a question of public importance. The difficulty with this characterisation is that whether a plaintiff whose suit depends on invoices rendered to the defendant needs to do more to establish the right to sums charged in the invoices than tender the invoices depends on a number of factors. These factors include the following:

1. whether the defendant, on receipt of the invoices, has challenged their quantum;

2. if not, whether the defendant’s lack of challenge amounts to an implied admission as to the quantum (as referred to in Roude v Helwani, extracted above); and

3. whether the defendant has challenged the quantum in the proceedings, usually in the pleaded defence so as to put the plaintiff on notice that it is in issue and must be proved to make out the plaintiff’s claim.

22. As referred to above, the first time Mr Attard challenged the reasonableness of the quantum of the invoices was in closing address in the Local Court. Both the magistrate and the primary judge found that by that time it was too late to put in issue the quantum claimed in the invoices.

23. In light of these matters, I am not persuaded that the present case gives rise to any issue of principle or question of public importance. Nor am I persuaded that there has been any reasonably clear error of principle beyond that which is merely arguable. Further, the amount in issue does not warrant this Court granting leave to appeal.

Proposed orders

24. For the reasons given above, I propose the following orders:

1. Leave to appeal refused.

2. Order the first applicant to pay the respondents’ costs of the application for leave to appeal.

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Decision last updated: 15 December 2023