Bell Corp Victoria Pty Ltd v Stephenson
[2003] VSC 255
•4 July 2003
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 4244 of 2003
| BELL CORP VICTORIA PTY LTD (ACN 070 026 925) AND ORS | Plaintiffs |
| v | |
| CHRISTINE ESSIL STEPHENSON | Defendant |
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JUDGE: | ASHLEY J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 June 2003 | |
DATE OF JUDGMENT: | 4 July 2003 | |
CASE MAY BE CITED AS: | Bell Corp Victoria Pty Ltd and Ors v Stephenson | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 255 | |
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Appeal – decision of Victorian Civil and Administrative Tribunal in exercise of discretion – question of law – whether Tribunal in exercise of discretion committed an error of law justiciable on appeal under s. 148(1), Victorian Civil and Administrative Tribunal Act 1998.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr M. Shand, QC and Mr P. Baker | Wilmoth Field Warne |
| For the Defendant | Mr M. Dreyfus, QC and Mr D. Flynn | McMahon Fearnley |
HIS HONOUR:
The circumstances of the Appeal
This is an appeal by leave under s. 148 of Victorian Civil Administrative Tribunal Act 1998 (“the Act”) against the whole of the orders made by a deputy president of the Victorian Civil and Administrative Tribunal on 10 December 2002.
Extant before the Tribunal on the morning of 10 December 2002 was a claim by the first plaintiff, Bell Corp Victoria Pty Ltd against Mrs Christine Stephenson; and a counterclaim by Mrs Stephenson against Bell Corp and three members of the Bell family[1]. The claim and counterclaim arose out of a contract entered into between Bell Corp and Mrs Stephenson in October 1998 by which Mrs Stephenson purchased, apparently off the plan, a penthouse apartment and accessory lots at 184 Albert Road, South Melbourne for $1.1M. Bell Corp alleged that it was owed money under the contract; and was additionally entitled to money on a quantum meruit. Mrs Stephenson alleged that she was entitled to damages under a variety of heads. The damages were partly quantified at a total of about $400,000, and were otherwise unspecified. Later I will describe the claim and counterclaim in more detail and provide a chronology of events with respect thereto.
[1]It was in part a set off against the claim by Bell Corp; but it is convenient to describe the whole as a counterclaim.
So matters stood on the morning of 10 December. On that day the Tribunal made these orders:
“1. The claim is struck out.
2.The amended counterclaim is determined in favour of the respondent (Stephenson) as against all and each of the respondents (Bell) to the Counterclaim.
3.The hearing date of 24 February 2003 is cancelled.
4.I make no determination as to quantum or as to costs.
5.I set aside for separate hearing the question of quantum on the amended counterclaim and the question of costs of this day and otherwise in respect of the proceeding to a date to be fixed after 31 January 2003 to be notified to the parties.”
The orders were made in reliance on s. 78 of the Act.
By this appeal Bell Corp and the messrs Bell (conveniently, " the plaintiffs", even though that description will not be quite apt when referring discretely to the claim and aspects of the counterclaim) appeal, as I noted a little earlier, by leave. Leave was granted by a Master on 28 February 2003. Because the application for leave had been late made, and because the Master was of opinion that he could not extend time, the matter was referred to me on a consent application for extension of time – that is, after the Master had decided that leave should be granted assuming that time was extended. In short reasons given on 28 February I extended time. I expressed misgivings about the question of law described by the Master. I said then, and it is still my opinion, that the question of law which he identified did not make clear the error of law complained of in the Tribunal’s decision. The notice of appeal, however, gave some clarity to the issues which the plaintiffs sought to agitate; and the area of debate was refined in argument. In the event, particular areas of contest became clear, and questions of law were identified.
Section 78 of the Act and the grounds of appeal shortly described
Section 78(1)(a) of the Act reads relevantly as follows:
“(1)This section applies if the Tribunal believes that a party to a proceeding is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding by conduct such as –
(a)failing to comply with an order or direction of the Tribunal without reasonable excuse;”
Where the requirements of sub-s. (1) are satisfied the Tribunal is invested with a discretion under sub-s. (2), which pertinently reads:
“(2) If this section applies, the Tribunal may –
(a)order that the proceeding be dismissed or struck out, if the party causing the disadvantage is the applicant; or
(b)if the party causing the disadvantage is not the applicant –
(i)determine the proceeding in favour of the applicant and make any appropriate orders; ”
The Tribunal, as will be seen, found that the requirements of sub-ss. (1)(a) were made out. It did not express itself in terms of belief, but that must necessarily have been the criterion. Then it exercised the sub-s. (2) discretion.
According to the plaintiffs, the exercise of discretion was infected by error of law: the decision was so unreasonable or plainly unjust that the Court should infer that there had been a failure to properly exercise the discretion; the decision involved denying the plaintiffs a reasonable opportunity to be heard, and so both infringed the rules of natural justice and put case management before the attainment of justice; and in reaching its decision the Tribunal acted on wrong principles, failed to take into account relevant matters and took into account irrelevant matters.
It is necessary to sketch the history of the proceeding in the Tribunal in order to understand aspects of the competing submissions. To that history I now turn.
The circumstances of the claim and counterclaim as revealed by formal documents
The Tribunal file as at 10 December 2002 necessarily revealed the following circumstances:
· The plaintiffs initiated proceedings between it and Mrs Stephenson (the defendant). They did so by application filed 12 October 2001. The application alleged that the 1998 contract amount of $1.1M had been varied in about May 2000 by an increase to $1.23M in order to account for variations. It alleged that a certificate of occupancy had issued on 15 June 2000, but that the parties agreed soon thereafter that works were incomplete; and further agreed that the works must be completed and that in the interim the defendant would retain $78,208.97 from the contract price. It alleged that the works were now complete but that $71,948.97 was still retained. It claimed an additional $55,541 on a quantum meruit.
· The defendant delivered a defence dated 6 February 2002 – that is, about three and a half months after service of the application[2]. By the defence the contract was admitted, retention of moneys was admitted, completion of works was denied, the plaintiff's entitlement to any moneys was denied, and an allegation was made that there was a “good set off and/or counterclaim", details of which would be provided when reports were to hand.
[2]It was served on 17 October 2001.
· On 4 March the Tribunal granted an interim injunction against Bell Corp, restraining disposition by it of certain of its assets. The order was continued, in more limited form, from 12 March.
· A counterclaim was filed, against Bell Corp only, on 8 March – that is, about a month after the defence had been delivered, and about four and a half months after service of Bell Corp’s application. The counterclaim alleged that works had been carried out defectively and incompletely. Reliance was placed on two reports which the defendant's lawyers had obtained.
The counterclaim further alleged that the 1998 contract had been varied in 2000 so as to require grant of an easement over another lot in the development in favour of the defendant, or alternatively to secure her ample access from the car spaces to the lift lobby. A breach of that contractual variation was alleged. The same subject matter was relied upon, in the alternative, as a representation rather than a contractual term.
The counterclaim alleged, next, that there had been an agreement or representation as to the height of the apartment and the roof top. There had been breach thereof.
The counterclaim alleged, further again, that there had been an agreement or representation as to the nature of the lift that would be installed. This had been breached.
In consequence of all these matters the counterclaim alleged the following entitlements by way of set off or counterclaim.
“A. Damages.
B.A Declaration that the Respondent is entitled to an easement from the Car Spaces to the lift lobby and an order that the Applicant register such easement on title.
C.Costs of rectifications and/or completion of the Works $290,725.00.
D.Diminution in value of the Property $110,000.00.
E.Damages for inconvenience, nuisance and diminution in value in such sum as the Tribunal deems fair and reasonable.
F.Costs of alternative accommodation and storage.
G.Interest.
H. Costs."
· On 8 March 2002 the plaintiff gave discovery. So did the defendant.
· The defendant gave amended discovery on 30 April. She now identified 645 documents.
· Bell Corp delivered points of defence to the counterclaim dated 21 May – that is, about two and a half months after the date on which the counterclaim had been filed. It put in issue the allegation that works had been defectively and incompletely performed. Reading between the lines, it did not really dispute that there had been some agreement or representation about an easement; but it alleged that the same had been impossible of performance. It denied an agreement or representation as to height and view; likewise any agreement or representation about a lift. It put the allegations of loss and damage into dispute.
· On 7 June a summons was filed on behalf of the defendant seeking leave, inter alia, to join the messrs Bell to the counterclaim, for leave to file and serve a fresh counterclaim, and for leave to file and serve a request for further and better particulars of Bell Corp's application. An affidavit sworn 7 June 2002 by Eleftheria Carageorgos, solicitor for the defendant, exhibited experts reports obtained by the defendant and by Bell Corp. They showed, inter alia, that Mr Hegarty, one of the defendant's experts, estimated the cost of rectification of works and the obtaining of interim alternative accommodation at $290,725; and that Mr Lorich, Bell Corp's expert, estimated rectification costs, not requiring the owner to temporarily vacate, at $34,314.
· On 13 June the leave sought was granted. The Tribunal referred the matter to an on-site compulsory conference on 16 August.
· On or about 13 June - that is, about eight months after Bell Corp's application had been served – the defendant’s solicitors delivered a request for further and better particulars.[3]
[3]I note, however, that less formal requests had been made in November 2001; and that Bell Corp had refused them.
· On or about 11 July – that is, within a month of the request – further and better particulars were provided.
· Amended points of set-off and counterclaim were delivered on or about 14 June – that is, approximately eight months after service of Bell Corp application, and more than four months after the defence had first flagged a set-off and/or counterclaim. The document, of 44 paragraphs and 28 pages, and raising claims not only against Bell Corp but the messrs Bell, may be compared with the counterclaim of 8 March, a document of 18 paragraphs and 15 pages.
By the new document particulars of defective and incomplete works were identified by reference to four reports, respectively dated August 2000 and January, February and March 2002.
By her amended counterclaim the defendant sought to implicate the messrs Bell as persons who had engaged in conduct making them personally liable either under statute or at common law. Careful examination of the counterclaim would have revealed that the allegations which were made raised not only likely factual issues but legal questions of some complexity.
Also by the amended counterclaim a fresh complaint was raised – that there had been an agreement or representation that an opaque screen would be placed between the spa and the services area. That agreement or representation had allegedly been breached.
· On or about 8 August – that is, within two months of the delivery of the amended points of set-off and counterclaim - each of Bell Corp and the messrs Bell delivered points of defence. In essence, the denials by Bell Corp to the earlier set-off and counterclaim were repeated, the newly raised claim was denied, and the messrs Bell denied the allegations raised against them as individuals.
· On 16 August an on-site conference was held in accordance with the Tribunal’s orders made 13 June. There was no settlement. The Tribunal then gave directions, inter alia, as follows:
“2.By 18 November 2002, each party must file and serve a statement of the evidence in chief to be given at the hearing by each of their witnesses. Each statement must consist of a narrative of the evidence to be given in chief by the witness concerned.
3.By 9 December 2002 each party must file and serve a statement of any evidence in chief to be given by each of their witnesses in reply to the evidence of another party.
4.A party will not be allowed to present any evidence in chief at the hearing which is not contained in a witness statement or witness statement in reply without leave of the Tribunal. A party wanting to call such additional evidence in chief orally may be ordered to pay the actual costs of the other parties for the time taken to illicit (sic) such oral evidence.
…
6.This proceeding and any counterclaim is set down for hearing on 24 February 2003, commencing at 10 am at 55 King Street, Melbourne with an estimated hearing time of 20 days. Costs may be ordered if the hearing is adjourned or delayed because of a failure to be fully prepared or to comply with previous directions of the Tribunal.”
· Bell Corp made further discovery by affidavit sworn 9 October.
Circumstances disclosed by the affidavit in support of directions sought on 10 December 2002
Ms Carageorgos swore an affidavit on 6 December 2002 in support of the application made on 10 December. It was to the following effect:
· On 25 November the deponent contacted the plaintiffs’ solicitors requesting a time for exchange of witness statements.
· On 27 November she received a letter from the plaintiffs’ solicitors. It sought an extension of time. The reason given was that “our client is in the process of formulating an all encompassing offer of compromise”. Reference was made to “the interests of mitigating both parties’ costs”.
· On 28 November the deponent faxed a letter to the plaintiffs’ solicitors stating that a compromise offer could be made at any time; and that the parties must comply with the Tribunal’s orders. She said in the letter that if an arrangement was not made by 29 November an immediate application would be made to VCAT to enforce compliance with the orders made on 16 August and to confirm the hearing date.
· On 29 November the defendant’s statements of evidence were filed with the Tribunal and served on the plaintiffs’ solicitors.
· Also on 29 November the deponent faxed a letter to the plaintiffs’ solicitors foreshadowing that she would seek to have the matter listed for directions in relation to the plaintiffs’ failure to file and serve their statements of evidence.
· On 2 December the plaintiffs’ solicitors made an open offer of settlement. On the same day they faxed a letter saying that their clients did not intend to file and serve witness statements until the expiry of the period for which the offer was open.[4]
[4]The offer was open, I think, until 16 December.
· The defendant was prejudiced by the plaintiffs’ failure to file and serve statements as ordered. This “flows from the difficulty now created in making replies to the evidence (if any) of [the plaintiffs], and by the veiled threat to the hearing date”. The defendant was experiencing continuing “water ingress problems to her apartment”. An expert’s report dated 31 October 2002 was exhibited in relation to the alleged problems.
· The defendant sought orders under s. 76 of the Act; alternatively self-executing orders to ensure that the hearing proceeded on 24 February 2003.
The history of the application dealt with on 10 December 2002
· The defendant’s solicitors sought a directions hearing by letter of 2 December, citing the plaintiffs’ failure to serve their evidence in chief.
· The Tribunal listed a directions hearing for 10 December 2002. By Notice headed “Non Compliance with VCAT Orders”, dated 4 December 2002, it said that at such hearing the Tribunal might:
“(a)vacate any hearing date or compulsory conference date already fixed;
(b)amend the timetable set out in previous directions;
(c)if the defaulting party is the Applicant, dismiss the application or if the defaulting party has filed a counterclaim dismiss the counterclaim;
(d)if the defaulting party is not the Applicant, determine the proceeding in favour of the applicant or order a party be struck out of the proceeding;
(e)order the defaulting party or the party’s representative to pay costs, including where appropriate, solicitor and client costs;
(f)require any order as to costs to be complied with before continuing the proceeding; or
(g)make any other order that is just.”
The notice added, in bold type, that “it would be in the interests of all parties to remedy any default before the directions hearing”.
· By letter dated 6 December delivered to the Tribunal and copied to the plaintiffs’ solicitors Mrs Carageorgos forwarded her affidavit sworn that day and a memorandum of the directions sought by the defendant. The letter asked the Tribunal to confirm that the matter would be listed before a presidential member, “as the respondent is seeking, inter alia, an application (sic) pursuant to s. 76” of the Act in respect of the plaintiff’s claim and that the plaintiff’s defence to counterclaim be dismissed. The memorandum sought, alternatively, an order under s. 76 or self-executing orders.
The application made on 10 December
According to the submissions made by counsel for the defendant on 10 December:
· The principal issues were those of water ingress and height of the premises.[5]
· He sought relief “under s. 78, principally, of the ….. Act.[6] That was the first occasion upon which anything had been said about s. 78.
· The expert’s report dated 31 October 2002 made good his submission that the water ingress problem was a major issue.
· There was an analogy between s. 78 and R. 24.02 of Chapter 1 of the Rules.
· Section 78 provided a lower threshold than did s. 76, an application under the latter of which could not be maintained.[7]
· The defendant and her husband had been put to great cost in connection with the preparation of witness statements; and the inconvenience of exploratory openings being made in their premises: “…they have got the pipes running down in their bedrooms and bowls located under the house”.[8]
· As an alternative to orders under s. 78, self-executing orders should be made, and the hearing date confirmed – that is, in the event of compliance with the orders.
[5]See part of Ex 8 to affidavit of Anthony Desiderio sworn 31 January 2003, transcript of application 10 December 2002, p. 3.
[6]Tribunal T 9.
[7]Tribunal T 15.
[8]Tribunal T 19.
Counsel for the plaintiffs also made submissions to the Tribunal on 10 December. His submissions may be summarised this way:
· Statements admittedly had not been delivered.
· His clients had been devoting some of their efforts in attempting to settle the matter and to avoid costs.
· This was not an attempt to put off the hearing date. “There is still a possibility of the hearing date of 24 February 2003 being maintained.”[9] There was still time for witness statements and statements in reply to be provided before that date.
· He was not instructed what witness(es) the plaintiffs proposed to call.
· The orders made on 16 August did not compel production of witness statements. They imposed a potential sanction if statements were not provided in accordance with orders then made.
· The application under s. 78 came as “somewhat of a surprise”. What had been considered was the operation of s. 76.
· In response to the Tribunal’s question:
“It pains me to follow out the example of an unqualified Member of the Tribunal, but what has been done by your client, your instructors, in respect of compliance with the directions to this point? Do you know?[10]
his answer:
“I am not - I don't know. All I know, sir, is that I understand and I am instructed that there have been meetings to discuss the preparation of witness statements and to formulate an offer of compromise with the intention of having that offer of compromise pitched at such a level to complete this matter.”[11]
[9]Tribunal T 22.
[10]Earlier the Tribunal had said that citing to it the decision of a member of the Tribunal who was not legally qualified was “like quoting to me a Magistrate’s decision”: Tribunal T 16.
[11]Tribunal T 23.
· His instructions were to the effect that statements could be prepared by 27 January 2003.[12] That would allow for statements in reply by 17 February, and for the hearing date of 24 February to be maintained. He did not have instructions as to the number of witnesses to be called.
· Dismissal for want of prosecution would be unjustified on the authorities.[13]
[12]That is the gist of what he said, on a fair reading of the relevant Tribunal transcript.
[13]The Tribunal indicated its familiarity with the principles, saying “I used to lecture on it”.
The Tribunal’s decision
The Tribunal delivered oral reasons on 10 December. On 13 December, it published revised reasons on the Tribunal’s website.[14] The revised reasons added greatly to what had been said on 10 December. No complaint was made by counsel for the plaintiffs about the extent of the revision, if complaint could have been made.[15] Counsel was content to address his submissions upon the reasons as revised.
[14]Ex AD9 to Mr Desiderio’s affidavit sworn 31 January 2003.
[15]See the Guide to Judicial Conduct, 2002, published by AIJA on behalf of the Council of Chief Justices at paragraph 4.5; and Fletcher Construction Australia Ltd vLines Macfarlane & Marshall Pty Ltd [2001] 4 VR 28 at [48]-[51].
The Tribunal:
· Noted the commencement of the proceedings in October 2001 by the plaintiff; but not the sequence of events, involving apparently substantial delay by the defendant, thereafter.
· Noted the directions given on 16 August 2002.
· Said that counsel for the plaintiff:
“Was not able, in my view, to provide…. an excuse or reasonable excuse for the failure to comply with the direction…. up to the time due for compliance. No explanation at all was offered for the delay from 16 August until 18 November.”
For that reason it was satisfied there was conduct of the kind referred to in s. 78(1)(a) of the Act.
· Said that no explanatory affidavit material had been provided to the Tribunal. No offer was made to pay costs or apologise for disregard of the Tribunal’s unambiguous directions.
· Noted that counsel for the plaintiffs had been unable to specify the number of witnesses that might be called or the length of witness statements that might be filed.
· Opined that the plaintiffs faced a daunting task to be able to answer the statements filed by the defendant “either at or in proper time for the hearing"; and continued:
“The (sic) should have set about doing that much earlier than 18 November which is the outside date specified in the directions. Nothing otherwise persuades me that I should adjourn the hearing off to take into account this failure of the Applicants (sic) and the individuals.”
· Concluded that s. 78 where it applied authorised a departure from the rules of natural justice which would otherwise apply. See s. 98(1), (4).
· Opined that Mrs Stephenson had been denied the opportunity to find out about and meet the plaintiff’s claim and the defence to counterclaim. This was “a denial of the very principles of natural justice that they would maintain a right to claim for themselves”.
· Noted that “a striking out is of course not the same as a dismissal and I would note I have made no adjudication on the merits”.
· Said that an element in the exercise of his discretion was “the overall justice of the situation”.[16]
· Said this:
“I am satisfied, considering the submissions of the Respondent, that the Respondent has experienced and continues to experience hardship and inconvenience by reason of the condition of the premises. If I was to allow the Applicant and the individuals any further opportunity to comply with Directions (bearing in mind that they have had nearly four months to do so to this point) there is likely to be a very great delay in the hearing of the case. I have no faith that the Applicant and the individuals could comply with Directions relating to Witness Statements by 27 January 2003 or at all otherwise. Any adjournment of the proceedings will, in view of what I have been told, have a profound impact on the Respondent's quality of living at the premises in question. The fairness mentioned by s.97 must work both ways and it would be unfair to the Respondent to require her or her family to endure conditions any longer than necessary or reasonable. Apparently, apart from water seepage or leaks, distractive testing has taken place leaving large holes in the roof or ceiling.
Accordingly I make the Orders which I have made. I decline to exercise any discretion to formulate self-executing orders as I have no belief as to when or how they might be complied with. I should not make orders which I consider could be futile. Under s.78 I am not required to specify self-executing orders before I exercise my discretion. The section does not require the giving of a 'second chance'. In any event, I might ask otherwise, why should I do so when given the nature of the failure in this case? Further, if self-executing orders were complied with, the impact on the hearing would be very great and the Respondent would suffer significant hardship beyond that already undergone by her and family members. Often, of course, it is appropriate to give a 'second chance' but the failure in this case does not warrant that opportunity if I consider overall the interest of justice. I would feel differently perhaps if at least some activities were evident in purported compliance with the directions. But nothing of the sort appears to have happened. Nor, considering that the Directions not complied with in this case were made nearly four months ago, have I a belief that self-executing orders, if made, would not be a futile exercise. The fact is that the Applicant and the individuals have had quite sufficient time to adequately prepare but have chosen not to do so despite clear directions of the Tribunal. I should add, I did not make those directions in August 2002 with a view to them being only casually followed or not followed at all.
There are, in my view, no circumstances at all persuading me to give the Applicant and the individuals a 'second chance'. There has been no compliance; no reasonable explanation given for the failure; no offer to pay costs; no apology; and no apparent effort yet to do anything about compliance. It is not even known who might be called or how long it might be, in reality, before compliance could be expected. On the other side of the ledger, I have a case of clear prejudice, or likely prejudice, and hardship."[17]
[16]Citing s. 97 and Queensland v JL Holdings Pty Ltd (1996) 189 CLR 146.
[17]The underlining represents sections in the Tribunal's reasons added between 10 and 13 December.
Error of law in the context of an exercise of discretion by the Tribunal
Counsel for the plaintiffs submitted that the exercise of the statutory discretion conferred by s. 78 was “subject to general legal principles governing the exercise of a discretion”.[18] The Court will interfere with the exercise of that discretion in the circumstances described by Dixon, Evatt and McTiernan JJ in House v The King;[19] see also Australian Coal and Shale Employees’ Federation and anor v The Commonwealth and ors[20]. The decision-maker must give genuine and realistic consideration to relevant matters: Hindi v Minister for Immigration and Ethnic Affairs.[21]
[18]Written submissions, paragraph 27.
[19](1936) 55 CLR 499 at 504-505.
[20](1956) 94 CLR 621 at 627.
[21](1988) 20 FCR 1 at 13, citing, inter alia, the unreported judgment of Gummow J in Khan v Minister for Immigration and Ethnic Affairs (judgment 11 December 1987).
Counsel for the defendant submitted that s. 148 permits only appeal on a question of law.[22] No real question of law had been identified, let alone disclosed. The complaint was really about the exercise of a discretion.
[22]Where leave is given.
Concerning the nature of the appeal under s. 148 counsel for the defendant referred to Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue.[23] Concerning what is a question of law, as described in relation to similar provisions, he referred, inter alia, to Transport Accident Commission v Hoffman[24] and Roads Corporation v Dacakis[25]. Concerning the investigation of the exercise of a discretion he cited Transport Accident Commission v O’Reilly[26].
[23](2001) 207 CLR 72 at 81.
[24][1989] VR 197 at 199.
[25][1995] 2 VR 508 at 517-519.
[26][1999] 2 VR 436 at 449, 452, 458-9, 460.
Counsel submitted that there must be caution in recourse to House and to Australian Coal and Shale. The discretion conferred by s. 78 must be exercised judicially in the context of the statute[27]. The context was one in which the Parliament has conferred what lawyers and others would recognise as an “extraordinary power” on the Tribunal; an “extensive power”; exercisable if the Tribunal formed a particular belief, and relieving the Tribunal of the need to have regard to the rules of natural justice.[28]
[27]T 44.
[28]T 45.
It might be thought, considering the submissions thus far, that there was a substantial dispute as to what could constitute a question of law amenable to appeal under s. 148 in the case of a Tribunal decision involving the exercise of a discretion. But in fact differences in the position of the parties, conceptually, were at least small, and perhaps non-existent. The main dispute was as to the application of principles in the particular case.
So, considering the matter conceptually, counsel for the defendant conceded in argument that if an exercise of discretion was manifestly unreasonable in the Wednesbury sense[29] there would be error of law; likewise if the Tribunal had not taken into account a matter which it was obliged to take into account; or had taken into account an irrelevant consideration.[30]
[29]Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230, 233-234.
[30]T 56.
In my opinion the applicable law stands this way: In Roy Morgan four judges of the High Court[31] said this in a joint judgment:
“Section 148 of the VCAT Act is concerned with the invocation of judicial power to examine for legal error what has been done in an administrative tribunal. Although s. 148 uses the word ‘appeal’, it is clear that the Supreme Court is asked to exercise original, not appellate jurisdiction and to do so in proceedings which are in the nature of judicial review. That is not to say that there are no other avenues for judicial review. The VCAT Act makes no express provision excluding the general supervisory jurisdiction of the Supreme Court. It may, therefore, be doubted that s.148 should be understood as doing more than providing, in some cases, an important discretionary reason for not permitting resort to that general supervisory jurisdiction on the basis that s. 148 provides a suitable alternative remedy. Nevertheless, it is important to recognise that the essential character of s. 148 is that it provides for the institution of proceedings in the Supreme Court, by leave, in which the legal correctness of what the Tribunal has done can be challenged.“[32]
[31]Gaudron, Gummow, Hayne and Callinan JJ.
[32]At 79-80.
Their Honours contrasted the case of judicial review sought on an application for certiorari with the judicial review available under s. 148:
“The kind of judicial review for which leave was sought in this case is narrower than the general supervisory jurisdiction which was invoked in Kemper.”[33]
[33]At 81; Kemper Reinsurance Co v Minister of Finance [2000] 1 AC 1 was a case in which leave to apply for an order of certiorari was refused.
It is clear that their Honours regarded the Tribunal as an administrative body exercising an administrative decision-making function; not only from the first passage cited above, but also by their observation that “(a)n application for leave under s. 148(1) is the first engagement of judicial power.[34] To the same effect, Kirby J referred in a separate judgment to s. 148(1) “providing an ‘appeal’ from an administrative tribunal which, for the first time, enlivens the judicial power of a court…”;[35] see also his Honour’s observation that the order of the Tribunal referred to in s. 148(1) “is an administrative decision brought for the first time under the scrutiny” of a Court.[36]
[34]At 83.
[35]At 91.
[36]At 93.
In Victorian WorkCover Authority v CE Heath Underwriting and Insurance (Australia) Pty Ltd[37] there was an appeal to this Court from the former Administrative Appeals Tribunal under s. 52(1) of the Administrative Appeals Tribunal Act 1984. Section 129J(4) of the Accident Compensation Act provided for review by the Tribunal of a determination of the Accident Compensation Commission concerning contribution, and for determination by the Tribunal of the “amount of any refund that it considers is just and equitable”. Involved in such a determination was an exercise of discretion.[38] One of the questions said to be raised by the appeal was whether the Tribunal had taken into account irrelevant matters or had failed to take into account relevant matters in determining the amount of any refund which was just and equitable.
[37]Full Court of Supreme Court, judgment 23 May 1994, unreported.
[38]All the judges proceeded on that footing; Eames J after expressing some initial doubt.
Brooking J said this:
“(That question) is not necessarily a question of law: it is stated in such a way as not to show that it is a question of law. For one does not know whether the question is what matters the Tribunal in fact took into account or on the other hand whether matters which were in fact taken or not taken into account were relevant or irrelevant. If the latter is the intended meaning, then the notice of appeal does not set out the question or questions of law said to be involved in the decision; for the notice as framed is not sufficiently specific.”[39]
[39]ibid 35 at p. 11.
It is implicit in that passage that it would be a question of law whether in the exercise of the discretion some matter which the Tribunal had taken into account was irrelevant – that is, irrelevant in the sense established by the authorities; likewise whether it had failed to take into account a matter which it was bound to do.
Brooking J concluded, having regard to the way in which the matter had been conducted before the Tribunal and the uncertainty even on appeal of the appellant’s position, that the question sought to be raised should not be entertained. But Byrne and Eames JJ went further. They considered the exercise of discretion, and concluded that it exhibited error. It had proceeded upon an wrong footing.
Transport Accident Commission v O’Reilly and three related cases[40] also involved appeals under s. 52(1) of the Administrative Appeals Tribunal Act 1984 – the precursor of s. 148(1) – challenging the exercise of a costs discretion. In two cases the former Administrative Appeals Tribunal had exercised that power by not awarding costs in favour of the Transport Accident Commission, which had been successful. In the other two cases the Tribunal had exercised its power by awarding costs in favour of applicants who had discontinued their applications. The Court of Appeal relevantly held that where the Tribunal was invested with power to award costs, the power conferred upon it carried a wide discretion.[41] In the particular cases there was no basis for concluding that there had been error of law constituted by failure to take relevant considerations into account, by the taking into account of irrelevant considerations, or by the making of findings unsupported by evidence.[42]
[40]Cavanagh, Moore and Davy.
[41]See, for example, Tadgell JA at [9].
[42]See, for example, Tadgell JA at [23], [27]-[28].
O’Reilly and the related cases support a conclusion that, on an appeal confined to an error of law from an administrative tribunal, failure to take relevant considerations into account, the taking into account of irrelevant considerations, or the making of findings unsupported by evidence[43] will constitute such an error.
[43]See per Tadgell JA at [33].
In fact, in O’Reilly and the related cases, the Court rejected the Transport Accident Commission’s principal argument that in exercising the costs discretion the Tribunal should take as a starting point the proposition that, as in a court, costs should ordinarily follow the event; and it further decided that, in the particular circumstances of each case, there was either no error or no vitiating error. Those circumstances do not affect the conceptual position.
Counsel for the defendant relied upon passages in O’Reilly and the related cases showing that it is not for this Court to allow an appeal on a question of law from a discretionary decision simply because it would have found facts differently.[44] The point was rightly made and should certainly be accepted. But it does not preclude investigation and determination whether there was any such error. I should add that in O’Reilly and the other cases what was involved was a costs discretion; and that discretion has long been regarded as very wide.[45]
[44]See, for example, per Tadgell JA at [33] and [41]; Ormiston JA at [50], [52]; Callaway JA at [57].
[45]See, for example, per Ormiston JA at [44]-[46].
I should finally refer in connection with O’Reilly to the judgment of Callaway JA at [58]. His Honour said, pertinently for presently purposes, that the question whether a “verdict” is “perverse or unsafe” was not a question of law in the sense intended by s. 52(1) of the Administrative Appeals Tribunal Act. His Honour used those words, as I understand his judgment, to express his opinion that an appeal on a question of law is not to be equated with an appeal against a jury verdict. As an extension or variation of that proposition, his Honour cited Mason CJ in Australian Broadcasting Tribunal v Bond[46] where the Chief Justice said that “want of logic is not synonymous with error of law”.
[46](1990) 170 CLR 321 at 356.
Accepting, of course, what Callaway JA said, his Honour’s observations were not directed to the question whether an absence of any evidence to support a finding upon which an exercise of discretion depended would constitute an error of law; nor the question whether there would be error of law if the exercise of a discretion was, in the language of Wednesbury, manifestly unreasonable.
It follows from the authorities to which I have referred that an exercise of discretion under s. 78(2) would involve error of law if the Tribunal failed to take into account a matter which it was bound to take into account; or if it took into account an irrelevant consideration. It also appears to me to follow from Roy Morgan, having regard to authorities dealing more generally with judicial review of administrative decisions, that a decision which was manifestly unreasonable would involve such an error.
To the extent that there was disagreement in counsel’s submissions, it focussed mainly upon identification of matters relevant and irrelevant; upon the relevance and application of Hindi; and to an extent, perhaps, upon the readiness or otherwise with which a court should conclude that an exercise of discretion was manifestly unreasonable. As to the first of those matters, I think counsel agreed that pertinent considerations must be discerned from the legislation which created the discretion. Counsel for the plaintiffs also relied upon a principle applicable in the law generally; but in my opinion the principle relied upon is in any event comprehended by the statute.
Insofar as counsel agreed upon the way in which the matters relevant and irrelevant to the exercise of discretion should be identified, I consider that their agreement was well-founded. It is consistent with what Mason J said in Minister for Aboriginal Affairs and anor v Peko-Wallsend Ltd and ors[47]. That was an application for judicial review of an administrative decision under the Administrative Decisions (Judicial Review) Act 1977 (C’th). But once it is apparent that error of law for the purposes of s. 148(1) may be constituted by conduct of the kind under consideration, what his Honour said becomes relevant.
[47](1986) 162 CLR 24 at 39-40.
A number of aspects of what was said by Mason J in Peko-Wallsend need to be kept clearly in mind. First, failure to take into account a relevant consideration can only be made out if the decision-maker fails to take into account a consideration which he is bound to take into account. Second, failure to take such a matter into account will not vitiate the exercise of discretion if that failure could not have materially affected the decision. Third, questions of weight are generally a matter for the decision-maker; but that is subject to the decision being manifestly unreasonable. In the last connection, mere preference for the obverse result will not suffice.
What I have said thus far meets the third point of disagreement between counsel, if disagreement there really was upon the matter. Counsel for the defendant emphasised the reluctance of courts to be satisfied that a decision was manifestly unreasonable. That there is such a reluctance, conceptually, is clear enough. The more difficult task, in practice, is to apply the reluctance where the exercise of discretion appears to the reviewing court to have been aberrant without being manifestly unreasonable.
I mentioned that there was disagreement between counsel as to the relevance of Hindi. The issue in that case was, in effect, whether the exercise of discretion was appearance and not substance. Counsel for the defendant did not submit that the principle relied upon by counsel for the plaintiffs was bad law. He rather argued that it could have no application in this case; for here there was genuine, proper and realistic consideration of the situation. Counsel for the plaintiffs submitted, to the contrary, that the Tribunal had failed to give proper consideration to imposing an alternative remedy for the plaintiffs’ default because it had acted on a wrong principle concerning that remedy.
I find it unnecessary to decide whether the principle in Hindi could have application in this appeal. It is possible to dispose of the point raised by counsel for the plaintiffs in another way.
The framework of the dispute at a practical level is illuminated by the submissions made for the parties.
Counsel for the plaintiffs submitted that the decision was manifestly unreasonable. This, he argued was disclosed by the following considerations:
· As at 10 December there was sufficient time for the plaintiffs to provide witness statements, for the delivery of statements in reply, and for the matter to proceed on 24 February 2003. The orders made on 16 August contemplated three weeks for the preparation of statements in reply. That was achievable even if the plaintiffs did not deliver statements until 27 January.
· An explanation for the default had in fact been provided. The plaintiffs were making a genuine attempt to settle the claim and counterclaim.
· The plaintiffs were late notified of the drastic remedy sought by the defendant; the gist of the defendant’s position, until 6 December, was that she would seek orders requiring delivery of statements, and for costs.
· The orders deprived the plaintiffs the opportunity of recovering a substantial sum, or setting it off against any amount recovered by the defendant.
· The orders deprived the plaintiffs of the opportunity of defending a substantial counterclaim, in part for unspecified damages.
· The plaintiffs had not defaulted in any interlocutory step but this. Further, the plaintiffs had served an expert’s report in April 2002 which dealt with the defective/incomplete workmanship claim.
Concerning the identification of matters relevant and irrelevant, plaintiffs' counsel submitted that the exercise of discretion was necessarily subject to the influence of other provisions of the Act: specifically ss. 97 and 98. The former requires the Tribunal to act fairly and according to the substantial merits of the case in all proceedings. The latter provides, pertinently, by sub-s. (1)(a) that the Tribunal is bound by the rules of natural justice; and by sub-s. (4) that sub-ss. (1)(a) does not apply to the extent that the Act or an enabling enactment authorises, expressly or by implication, a departure from the rules of natural justice.
Counsel argued that for two reasons the Tribunal was bound to take into account, in determining whether to make an order under s. 78(2), the fact that to make an order would deny the plaintiffs a reasonable opportunity to be heard on the substance of the dispute. First, there is the principle which emerges from Queensland v JL Holdings (see also Smith and anor v Gannawarra Shire Council and anor[48] and Erhard v Bhatia[49]) that the paramount consideration for a tribunal is the justice of the circumstances of the case, a matter not subservient to principles of case management.[50] Even assuming that justice to a party in default may not necessarily be a paramount consideration, it was at least a relevant consideration in the context of a provision which permitted a proceeding to be dismissed otherwise than on the merits.[51] Second, there is the hearing aspect of the rules of natural justice.
[48][2002] 4 VR 344.
[49][2002] NSWCA 388.
[50]See JL Holdings at 154, 155; Smith at [20], [21], [33], [35]; Bhatia at [46], [54]-[59].
[51]Bhatia at [58]. There the provision was a Rule of Court.
Counsel argued that the Tribunal had by its reasons treated a consideration of great importance – that ordinarily a party should be heard upon the merits of litigation – as a "right" which was illegitimate because of non-compliance with directions; as a "right" – in effect – of no value. The Tribunal had precluded itself from considering the prejudice to the plaintiffs which would result from the making of an order under s. 78(2). That understandably but wrongly had led on to the Tribunal’s conclusion that there were in its view “no circumstances at all persuading it to give Bell Corp and the individuals a ‘second chance’.” Reference by the Tribunal in its reasons[52] to “the other side of the ledger” was really meaningless; for what was involved was a series of debits on the plaintiffs’ side and a credit on the defendant’s side.
[52]Paragraph 16.
Counsel for the plaintiffs further submitted that in exercising its discretion the Tribunal had acted upon wrong principles, had not considered relevant matters and had considered irrelevant matters. Concerning wrong principles, counsel submitted that the Tribunal had apparently considered whether or not it should make self-executing orders by reference to a need to be satisfied that, if made, they would be complied with. It had further decided, in the absence of evidence, that it would be futile to make self-executing orders. Finally, it had considered that the plaintiffs by their conduct had brought about, in effect, a denial of the very principles of natural justice that they would maintain a right to claim for themselves.
Upon the question of alleged failure of the Tribunal to take account of relevant considerations, counsel relied upon most of the matters said to make the Tribunal’s decision manifestly unreasonable. As well, counsel relied upon the history of the plaintiffs’ conduct of the proceeding up to the time of the default.
Counsel for the defendant submitted, inter alia, in response to matters raised for the plaintiffs, that:
· The Tribunal had considered the impact that the making of an order would have on the plaintiff’s opportunity to be heard.
· It was not a question whether the Court was startled by the Tribunal’s decision[53]. Parliament had conferred an extreme remedy upon the Tribunal, and the Tribunal had exercised it.
[53]I had referred to “the startle factor” in the course of argument: T 10.
· The plaintiff was put on notice of the possibility of a s. 78 Order – by the Tribunal’s notice dated 4 December and received on 6 December by the plaintiff. Micallef v ICI Operations Pty Ltd and anor[54] was an instance of a pro-forma notification being considered to act as a stark warning.
[54][2001] NSWCA 274.
· The Reasons of the Tribunal should not be subjected to over zealous scrutiny.
· The elements of s. 78(1) were properly considered by the Tribunal; see paragraphs 7-14 of its Reasons. In fact there were few elements for consideration.
· The Tribunal had not misapplied Queensland v JL Holdings, which in any event did not purport to set down binding rules for the exercise of discretion.
· No point was available about the Tribunal’s failure to make a self-executing order. The matter had been raised as an alternative by the defendant, and not at all by the plaintiffs. In any event, it was for the Tribunal to decide whether that was the appropriate remedy in the particular case.
· There was obvious continuing disadvantage to the defendant by reason of the state of the premises. The Tribunal had rightly said that the fairness required by s. 97 must work both ways.
In my opinion, bearing in mind the submissions of counsel directed to the provision here under scrutiny, the subject matter, scope and purpose of the Act show that if the Tribunal forms a belief concerning the matters required by s. 78(1)(a) of the Act the following matters must be considered in the exercise of the discretion under sub-s. (2):
· The subject matter of the belief formed by the Tribunal for the purposes of sub-s. (1).
· The nature of the power conferred by sub-s. (2) in the context of the armoury of power conferred upon the Tribunal by ss. 75-77. By this I mean, particularly, that s. 78(2) operates in circumstances which at least do not require that the proceeding be frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process; and which at least do not require that the circumstances demonstrate want of prosecution. Put another way, the sub-section contemplates the making of an order with very serious consequences in circumstances that very probably would not fit the templates set up by ss. 75 and 76. Whilst it can rightly be said that the creation of such a remedy in the situation contemplated by s. 78(1) shows that an intention that orders be made in some cases where the situation exists, it should also be firmly concluded, in statutory context, that the remedy should be of last resort and not first resort.
· The requirement imposed upon the Tribunal by s. 97. That section should be considered to import the concept that, ordinarily, the interests of case management should not be employed so as to shut a party out of litigating its case. The ultimate aim of the Tribunal, as much as of a court, must be the attainment of justice in respect of issues joined.
· The requirement imposed by s. 98(1)(a), to the extent that a party should ordinarily be given an opportunity to be heard upon the merits. That opportunity is not absolute. It may be lost without breach of the rules of natural justice. But the consequence that the making of an order under s. 78(2) will deprive a party of an opportunity to be heard upon the merits is surely relevant to exercise of the discretion whether to so order.
· The power to make costs orders conferred by ss. 109(2)(3) and 78(2)(c). The last-mentioned, it appears, might be exercised even though no order is made under s. 78(2)(a) or (b).
It may be that in a particular case the Tribunal will consider some other matter to be relevant. It does not follow from the fact that only some matters must be considered that other matters are necessarily irrelevant. Other matters will only be irrelevant if they infringe an implied limitation on the factors to which regard may legitimately be held. Any such limitation must be found in the subject matter, scope and purpose of the statute.
Resolution of the Appeal
I have described in some detail the course of the proceeding in the Tribunal, have expressed my opinion as to the boundaries of question of law in the context of appeal under s. 148 from a discretionary decision, have identified matters which the Tribunal must consider in the exercise of the s. 78(2) discretion and have set out the plaintiffs’ challenge to exercise of the discretion and the defendant’s response in some detail. In the end, however, I consider that the appeal may be disposed of by reference to two aspects only of the Tribunal’s reasons. Before addressing those aspects, however, some preliminary matters require comment.
First, the Tribunal ordered in part that the plaintiffs’ claim be struck out. The language of s.78(2), and a decision of the Tribunal, suggest that in such circumstances the disappointed litigant may start again. Subject to any problem created by s.71(1)(b) that would seem to be so. In the event, subject to any such problem, if the Tribunal's orders stood I consider that the plaintiffs could start again. It could not be supposed that the plaintiffs’ claim would be determined apart from the defendant's counterclaim having regard to their interrelationship and to the estimated length of the hearing. Presumably, in a new proceeding, the plaintiffs would be able to adduce evidence in support of their claim.
Again, the Tribunal ordered that the counter-claim was determined in favour of the defendant against Bell Corp and the messrs Bell; but it left open the question of quantum of the counter-claim. It made no new order in respect of evidence. Did it contemplate that the plaintiffs would, upon the counter-claim, have a right to cross-examine the defendant's witnesses but call no positive evidence? How did paragraph 4 of the orders made on 16 August 2002 operate in such a case? What would happen if the plaintiffs commenced afresh and could call evidence on their own claim?
It follows from what I have said about the orders made by the Tribunal on 10 December that a quite uncertain position was thereby created. But that is not a reason for my not considering whether the decision then made contained error of law. If error there was, and the orders were set aside, uncertainty would vanish. Moreover, at least with respect to the counterclaim the orders deprived the plaintiffs of a hearing on the merits; and so deprived the plaintiffs of an opportunity of meeting claims which, quantum apart, raised potentially difficult legal questions.
Second, I agree with the submissions of the defendant’s counsel that the Reasons of the Tribunal should not be over zealously scrutinised, as if the Court’s function was to find error somewhere.
Third, the Tribunal is a body with particular expertise. That provides cause for giving careful regard to its reasons, particularly in respect of matters where its expertise could be expected to come into play.
Fourth, a consequence of the orders made on 10 December is that the hearing of the counterclaim has been delayed – that is, by this proceeding. That is so quite apart from the consequences for the plaintiffs. The situation is very undesirable, particularly as it appears from experts’ reports which were exhibited to affidavits filed in the Tribunal that it is at least common ground that there were problems in construction which need remedy. The fact remains, however, that there is a proceeding before this Court; and it must be determined.
Fifth, the Tribunal’s reasons are, with respect, not easy to follow. At least partly that is because they were so substantially supplemented between oral pronouncement and final version. It may fairly be said also, I consider, that circumstances relevant to sub-s. (1) are first referred to in the course of the Tribunal’s resolution of the sub-s. (2) discretion. Notwithstanding difficulties, however, an understanding must be reached of the Tribunal’s reasoning.
Sixth, the Tribunal presumably formed a belief that the plaintiffs had failed to comply with a direction which it had given without reasonable excuse. The plaintiffs did not dispute that the Tribunal had formed such a belief. Nor was it denied that there was material to found such a belief. Nor again was it said that the Tribunal has misdirected itself when it said that “no explanation at all was offered for the delay from 16 August until 18 November”. In the event, it must be accepted that the Tribunal formed a belief complying with paragraph (a) of s. 78(1).
The Tribunal built upon that assumed belief by concluding, on what it was told about the volume of the defendant’s material, and what it was told about the plaintiffs’ unpreparedness, that the plaintiffs faced “a daunting task to be able to answer such material either at all or in proper time for the Hearing which is to take place early in the new year”. It went on: “Nothing otherwise persuades me that I should adjourn the hearing off to take into account this failure of the plaintiff”. Upon those additional conclusions, the Tribunal expressed itself satisfied “that s. 78 applies and is attracted”. Presumably it meant by that s. 78(1).
The plaintiffs did not submit that the conclusions reached by the Tribunal were not available, that they were founded upon a misconception, or that they were inadequate to found the belief made necessary by the opening portion of s.78(1) and paragraph (a) in combination. Such a submission might well have been made. Some of the matters which would have pertained to it were raised in connection with the exercise of discretion. Several points may be made in passing. Plaintiffs’ counsel at no stage applied for adjournment of the trial; and the question whether the late delivery of statements by the plaintiffs would occasion any difficulty for the defendant proceeding on 24 February 2003 was never more than a matter of speculation. Yet the Tribunal had to form a belief under sub-section (1)(a), if sub-section (2) was to come into play, that the plaintiffs were conducting the proceeding in a way that unnecessarily disadvantaged the defendant.
Assuming, then, that the Tribunal's formation of belief under s.78(1)(a) was unimpeachable, an exercise of discretion was required. That takes me to the matters particularly addressed by counsel.
In my opinion the Tribunal erred in law by failing to take into account, in the exercise of its discretion, the important consideration that a party should ordinarily be heard upon the merits of matters in issue. An aspect, inter alia, of the rules of natural justice made applicable by s.98(1)(a) and not excluded from consideration by s.98(4), this important consideration did not simply vanish because the plaintiffs failed to obey the direction. It was a necessary matter to put into the balance. Yet I agree with plaintiffs’ counsel that the Tribunal treated that consideration, running in the plaintiffs’ favour, as lost to them by reason of the fact only that the order for witness statements had not been obeyed without reasonable excuse.
The Tribunal separately considered "the overall justice of the situation". In that connection it referred to Queensland v JL Holdings and to s.97. This ought to have raised, in a slightly different context, consideration of a party's right, ordinarily, to be heard upon matters in dispute. But the Tribunal's focus was only upon disadvantage, as it perceived it, to the defendant. There was no balancing exercise at all. That was quite consistent with the Tribunal's earlier conclusion, in substance, that the conception that a party should ordinarily be heard upon matters in dispute – and here it was evident not only from the court documents but from the experts’ reports that there were matters in dispute – could not be a discretionary factor running in the plaintiffs’ favour simply because the plaintiffs had disobeyed the direction given on 16 August. By the Tribunal’s orders, as I pointed out earlier, the plaintiffs were at least deprived of a hearing on the merits of the liability aspects of the counterclaim – they being numerous.
I agree with counsel for the plaintiffs that the passages in the Tribunal's reasons to which I have referred explain the entirely one-sided ledger exercise at paragraph 16 of the reasons. The exercise was useless because it wrongly failed to consider a matter which must have been considered and which ran in the plaintiffs’ favour.
I consider that the Tribunal's exercise of discretion was infected with error in a second way. In short, it considered and dismissed an alternative discretionary remedy on a wrong principle; and further, upon speculation rather than any factual material or available inference. I need not go so far as to say that it was incumbent upon the Tribunal to consider the alternative remedy. It is arguable that it should do so, having regard to the structure of the Act which leads to the conclusion that the making of an order under s.78(2)(a) or (b) should be a last resort and not a first resort. In the present case it is enough to say that the Tribunal in fact had regard to the alternative remedy.
That remedy was the making of self executing orders. It is of the essence of such orders that there is uncertainty whether they will be abided. If they had been made on 10 December and not abided, then the effect of the orders made on 10 December would have been, more or less, replicated. If they had been made and were abided, it did not at all follow that the trial date must have been lost. Yet the Tribunal seems to have considered that doubt whether such orders would be abided was decisive that they should not be made. That was misconceived. No counsel suggested on 10 December, I add, that the time for compliance with any such orders should be a date after the date fixed for hearing. Indeed, the only date suggested for the plaintiffs was some 4 weeks before the trial date.
Further, running through the Tribunal's reasons was a thread that to give the plaintiffs any indulgence spelt doom for the trial date. So the Tribunal said that:
· "Nothing otherwise persuades me that I should adjourn the hearing off."
· “There is likely to be a very great delay in the hearing of the case."
· "Any adjournment of the proceedings will… have a profound impact on the [defendant's] quality of living…."
· "… if self executing orders were complied with, the impact on the hearing would be very great."
Granted the Tribunal's expertise, its acquaintance with the particular matter was not great. This was the first time that the Tribunal thus constituted had considered the matter. It was no more than speculation that provision by the plaintiffs of statements in January would delay the trial date. The original orders had allowed only 3 weeks for statements in reply. Nor, as I have said, did the plaintiff seek to vacate the trial date. The time for consideration by the Tribunal of an asserted need to vacate the trial date was when, and not before, any application to adjourn was made.
I have found it unnecessary, as I said earlier, to deal with many of the arguments agitated by counsel. I should, however, make observations about several of those arguments.
First, the plaintiffs' submission that the decision was manifestly unreasonable was not without substance. The strongest circumstance standing against the plaintiffs was their brazen defiance of the Tribunal’s orders. Yet that was not without some explanation. Moreover, it was speculative as at 10 December that the trial date would be lost, or that the defendant would be otherwise disadvantaged in presenting her case if the plaintiffs delivered witness statements in late January 2003. Again, consideration of the counterclaim revealed likely complexities. The orders of 10 December removed them from the arena. Further, the history of the proceeding showed no prior default by the plaintiffs; and it revealed very slow progress by the defendant in getting her counterclaim in order. To be brought into account, again, was – contrary to the Tribunal’s approach – the fact that to make an order under s. 78(2) would deprive the plaintiffs of the ordinary right to a hearing on the merits – at least, as it turned out, with respect to aspects of the counterclaim; and that there was an alternative remedy available, the application of which would have been compatible with the concept that orders under s. 78(2) are a last resort and not a first resort.
Second, the plaintiffs would not have persuaded me, as at present advised, that the Tribunal’s actual or assumed failure to take into account the matters referred to in paragraph 11 of the notice of appeal was – to the extent that I have not dealt with those matters in disposing of this proceeding – a failure to take into account matters which the Tribunal was bound to take into account. That is not to say that the Tribunal might not have taken some or all of them into account as being relevant; but simply that it was not bound to do so.
Orders
The appeal, then, succeeds. The orders made on 10 December must be set aside. The relief sought by the defendant on the application made that day has been overtaken by time. Nonetheless, the plaintiffs were in breach of the orders made on 16 August 2002, and the defendant was well entitled to seek relief from the Tribunal. I consider that the Tribunal was at least empowered to make an order for costs under s.109(3)(c). I say nothing about the power conferred by ss 109(3)(a) and 78(2)(c) . In the event, I consider that I should make an order under s148(7)(b) in favour of the defendant in respect of the costs of the application made on 10 December. Other than that, I consider it appropriate to order, under s.148(8), that the Tribunal constituted to hear the proceeding in the future not be constituted as it was on 10 December 2002.
Subject to anything that counsel may say as to form I shall make orders in accordance with the following minutes.
1. Appeal from orders made by the Tribunal on 10 December 2002 allowed.
2. Orders referred to in paragraph 1 hereof set aside.
3.In lieu thereof order that the plaintiffs pay the defendant's costs of and incidental to the application made on 10 December 2002 on a party and party basis; and that the application made that day is otherwise dismissed.
4.In the further hearing of the claim and counterclaim, the Tribunal not be constituted by the member who made the orders the subject of this appeal.
I will hear counsel on the question of costs.
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