Chiswell Pty Ltd v The Proprietors - Units Plan 24/84 - [2008] NTSC 48

Chiswell Pty Ltd v The Proprietors – Units Plan 24/84 [2008] NTSC 48
PARTIES:CHISWELL PTY LTD
(ACN 080 354 570)
v
THE PROPRIETORS – UNITS PLAN 24/84

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING APPELLATE JURISDICTION
FILE NO:LA 2 of 2008 (20801155)
DELIVERED:  27 November 2008
HEARING DATES:  24 November 2008
JUDGMENT OF:  RILEY J
CATCHWORDS:

APPEAL against decision of Magistrate – access to documents – s 37(2)(b) Unit Titles Act – application of Local Court Rules – jurisdiction – proceedings commenced in ordinary division of the Local Court
Local Court Act
Local Court Rules
Small Claims Act
Unit Titles Act
REPRESENTATION:
Counsel:
Appellant:G Clift
Respondent:  A Wyvill
Solicitors:
Appellant:De Silva Hebron
Respondent:  Ward Keller
Judgment category classification:    C
Judgment ID Number:  Ril0815
Number of pages:  10

IN THE SUPREME COURT

OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Chiswell Pty Ltd v The Proprietors – Units Plan 24/84 [2008] NTSC 48

No. LA 2 of 2008 (20801155)
BETWEEN:

CHISWELL PTY LTD
(ACN 080 354 570)

Appellant

AND:

THE PROPRIETORS – UNITS PLAN 24/84

Respondent

CORAM: RILEY J
REASONS FOR JUDGMENT
(Delivered 27 November 2008)

At all relevant times the appellant was the owner of five units within the Marrakai Apartment complex in Darwin. The respondent is the Body Corporate with responsibility for the Marrakai Apartments pursuant to the provisions of the Unit Titles Act.
On 10 January 2008, the appellant commenced proceedings in the Local Court seeking a restraining order to prevent the respondent from in any way disposing of what was described as the "Rental Pool Business" within the Marrakai Apartments, being the business which manages a short-term rental pool for owners who wish to participate in the scheme. In addition, the appellant sought various additional orders including that the respondent provide it with: minutes of an annual general meeting; "information" regarding the basis upon which the Rental Pool Business was being run; access to books and records of the respondent for the purposes of inspection; and copies of two draft agreements prepared by the respondent. Further, the appellant sought an order that the respondent obtain an independent valuation of the value "of the long-term rights to conduct the Rental Pool Business”.
On 12 February 2008 the appellant applied for an interim order restraining the respondent from disposing of the management rights to operate the Rental Pool Business.
On 7 March 2008 the solicitors for the respondent wrote to the solicitors for the appellant offering "access to the books and records of the respondent for the purposes of inspection in accordance with section 37(2)(b) of the Unit Titles Act". On 13 March 2008 the solicitors for the respondent repeated the offer in a letter to the solicitors for the appellant. On the same day the respondent filed an application seeking an order that the proceeding be struck out for failure to disclose a cause of action.
On 14 March 2008 the proceedings were heard in the Local Court and the application for an interim restraining order was dismissed. At the same time the proceedings commenced by the originating application were "struck out" on the basis that they were premature. An order was made that the appellant (applicant) pay the respondent’s costs of the originating application and the application of 12 February 2008 at 100% of the Supreme Court scale.
The appellant has lodged an appeal from that part of the decision of the learned Magistrate "striking out the appellant’s originating application filed on 10 January 2008 and ordering the appellant to pay the respondent's costs of the application at 100% of the Supreme Court scale to be agreed or taxed".
There is no appeal against the dismissal of the application for a restraining order. There is no appeal against the failure of the learned Magistrate to order that the respondent obtain an independent valuation of the Rental Pool Business. There is no appeal relating to the request for a copy of the minutes of the Annual General Meeting. Finally, there is no appeal against the refusal of his Honour to order the respondent to provide "information" regarding the basis upon which the Rental Pool Business was being run or any other matters in relation to which "information" was requested.
The grounds of the appeal are that the learned Magistrate erred in law in determining that the application did not disclose a cause of action and in failing to take into account relevant matters.
At the time of the appeal this Court was informed that it was agreed by the parties that the relevant documents had been provided to the appellant and, in effect, the only matter continuing in dispute and the subject of challenge on appeal, was the order for costs made by his Honour. Necessarily, that raised the issue of the basis upon which the order for costs was made in the court below.
Subsection 37(2)(b) of the Unit Titles Act
In seeking access to the documents and "information" the appellant relied upon the provisions of subsection 37(2)(b) of the Unit Titles Act which is in the following terms:
(2) A person to whom this section applies may request the relevant corporation:
(a) ...
(b)to make, as soon as is reasonably practicable after the request is received by the corporation, the books and records of the corporation available for his inspection and to give him reasonable opportunity to inspect those books and records.
It is readily apparent that the requirement imposed upon the corporation is to make the books and records of the corporation available to an authorised person for inspection. It is not to provide copies of the documents although, if it should choose to do so, it may, by operation of section 37(4), charge an appropriate fee.
What the appellant sought in its requests made to the respondent went well beyond access to the books and records of the respondent for the purposes of inspection. In its first letter of demand dated 15 October 2007 the appellant sought a wide range of information and advice along with "copies" of the two draft agreements referred to above. The other letter of demand, which was dated 7 November 2007, did not repeat the request for copies of the two draft agreements but, rather, made a fresh demand for information and advice regarding the "ongoing or future right to operate a rental pool business from the Marrakai Apartments", and then demanded of the respondent that "you provide us with all relevant documentation" relating to the matters set out in the request for information and advice. At no time did the appellant seek access to the books and records of the respondent for the purposes of inspection.
In the course of the hearing before the learned Magistrate, counsel for the respondent advised that the respondents had, in fact, already agreed to provide the appellant with access to the books and records for the purposes of inspection. The proceedings were therefore unnecessary. In any event, his Honour correctly observed that the letters of 15 October 2007 and 7 November 2007 did not constitute requests to inspect the books and records. They demanded information, advice and copies of documents but not access for the purposes of inspection. In his ex tempore reasons for decision the learned Magistrate went on to conclude:
"…[i]n my view there has been (on the) information before me, no proper request for the applicant to have access to the books and records of the respondent in accordance with s 37(2)(b). Thus the time for making an order has not yet arisen".
The conclusion was correct. No error on the part of his Honour has been demonstrated.
The proceedings be "struck out"
It was submitted on behalf of the appellant that the use by his Honour of the expression that the proceedings were "struck out" meant that he must have been applying r 28.02 of the Local Court Rules and not r 28.01. It was submitted that his Honour must therefore have been ordering the striking out of a pleading and, that being so, should have allowed the appellant to amend the pleadings. This submission is unsustainable. There were no pleadings in the case before his Honour. There was nothing to amend. The summons issued by the respondent made it apparent that the respondent relied upon r 28 .01. Plainly, the learned Magistrate was giving judgment in relation to the whole of the proceedings when he directed they be struck out and, if anything, the use of that expression incorrectly described, in the course of his ex tempore reasons, the process he was undertaking.
The discretion to award costs
There was no challenge to the award of costs made by the learned Magistrate save that it was contended that the respondent should not have succeeded in its application for judgment. There was no challenge to the manner in which his Honour exercised his discretion. In the circumstances the awarding of costs by his Honour should not be the subject of interference.
Jurisdiction
The appellant brought this appeal pursuant to s 32 of the Small Claims Act claiming that, at the time of making the orders, the learned Magistrate was exercising jurisdiction under that Act. To the contrary, the respondent contended that the proceedings were commenced under the Local Court Act and, in accordance with the Local Court Rules, and were never conducted under the Small Claims Act or in accordance with the Small Claims Rules. The respondent submitted that, as the appeal was lodged and pursued under s 32 of the Small Claims Act and not under s 19 of the Local Court Act, it must be dismissed.
The proceedings before the Local Court were commenced in reliance upon rights established under s 106 of the Unit Titles Act which provides a method for resolution of disputes. Relevant disputes are to be dealt with by "the Court" which expression is defined to mean the Local Court. Section 106(2) then provides:
(2) Subject to this section, an application shall be made to the Court and dealt with by the Court within its small claims jurisdiction as if the proceedings were proceedings under the Small Claims Act, and the Local Court Act and the Small Claims Act and the Rules made under those Acts shall apply accordingly.
In these proceedings it is clear that the appellant commenced proceedings in the Local Court exercising its ordinary jurisdiction and not its jurisdiction under the Small Claims Act. The Local Court had power to deal with the matters arising pursuant to its ordinary jurisdiction by virtue of s 106(10) of the Unit Titles Act. The title to the proceedings identified them as being in the Local Court and did not refer to the Small Claims Act at all. When the issue of jurisdiction was raised before the learned Magistrate it was in the context of a complaint by the respondent that "the applicant did choose to initiate proceedings in the Local Court" and this amounted to an abuse of process. It was submitted that the proceedings had been "brought in the wrong jurisdiction". In response, the appellant did not contend that the proceedings were being pursued in the Small Claims jurisdiction of the Court but, rather, referred to s 107 of the Unit Titles Act which confers jurisdiction on the Local Court “in all applications made to it under this Act”. When the learned Magistrate pointed out that the Local Court has two divisions, being the ordinary division and the Small Claims division, counsel maintained that the manner in which the proceedings were commenced was "entirely appropriate" suggesting that the proceedings were correctly commenced in the ordinary jurisdiction of the Local Court.
Although the learned Magistrate made it clear to counsel for the appellant that, in his view, the appellant "chose not to bring" the proceedings in the Small Claims division of the Local Court there was no application to rectify the position. Counsel for the appellant was aware of, and referred to, s 24 of the Small Claims Act which permits the transfer of proceedings so as to be dealt with under the Small Claims Act "at any stage of proceedings." No such application was made. It seems that a conscious decision was made on behalf of the appellant to continue the proceedings under the ordinary provisions of the Local Court Act and not under the Small Claims Act. Counsel in the court below must clearly have understood that both the learned Magistrate and the respondent had treated, and were treating, the matter as being heard in the ordinary jurisdiction of the court and not in the Small Claims jurisdiction. Counsel for the appellant elected to proceed on that basis.
When the notice of appeal was lodged it was plain that the orders had been made in the Local Court exercising its ordinary jurisdiction. Further, by letter dated 18 September 2008, the respondent expressly alerted the solicitors for the appellant to the fact that the appeal had been "inappropriately commenced, as it purports to be an appeal under s 32 of the Small Claims Act, when, in fact, the proceedings from which the appeal originates were heard under the Local Court Act". At the time of the commencement of the hearing of the appeal, and despite having been alerted to the problem some two months earlier, there was no immediate application to rectify matters to reflect the fact that the appeal should have been brought pursuant to the provisions of s 19 of the Local Court Act rather than s 32 of the Small Claims Act. Part way through the hearing a belated application was made to rectify the position by seeking to commence an appeal under the Local Court Act in the same terms as were before the Supreme Court under the Small Claims Act. However, the time limit for commencement of such an appeal had expired and an extension of time was required. Counsel for the appellant was unable to explain why the appellant had issued an appeal under the wrong Act and was unable to identify any "exceptional circumstances" which may permit leave to be granted to proceed with the appeal after the expiration of the 28 day time limit provided for in the provisions of s 19 of the Local Court Act.
Had it been necessary to address this issue the appeal would have been dismissed in any event.
Conclusions
The appeal is dismissed. The appellant will pay the costs of the respondent of the appeal to be taxed or agreed.

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