Colonial Range Pty Ltd v Akritidis
[2017] VSC 337
•15 June 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2016 05299
BETWEEN:
| COLONIAL RANGE PTY LTD | Plaintiff |
| - and - | |
| ARISTIDIS AKRITIDIS | Defendant |
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JUDGE: | Mukhtar AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 February 2017 |
DATE OF JUDGMENT: | 15 June 2017 |
CASE MAY BE CITED AS: | Colonial Range Pty Ltd v Akritidis |
MEDIUM NEUTRAL CITATION: | [2017] VSC 337 |
NATURAL JUSTICE — Rule against bias — Reasonable apprehension of bias — Private building surveyor appointed under Building Act — Application by appointor for demolition permit — Notification process — Disagreement by adjoining owner about appropriate protection work — Statutory procedure for determination of appropriate work by surveyor ― Surveyor’s ‘advice’ to appointor about permit process ― Whether reasonable grounds for apprehension of bias — Legal and statutory and factual context of decision making.
DISCOVERY — Pre action discovery from prospective defendant — Beneficence of rule — Condition to be satisfied that applicant ‘has reasonable cause to believe’ it may have the right to obtain relief in the Court’ — ‘May have’ — Objective test on the evidence — Inadequacy of mere assertion or suspicion or conjecture — Apprehension that private building surveyor was not impartial in performing statutory functions — Whether apprehension of bias is reasonably based — Discovery sought to reveal communications with permit applicant — Application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J D Pizer QC with Mr R Chaile | SBA Law |
| For the Defendant | Ms S M C Fitzgerald | Dandanis & Associates |
HIS HONOUR:
This application for pre-action discovery of documents against a prospective defendant under rule 32.05 is ancillary or referable to a remarkably combative state of disputations in the Building Appeals Board and the Supreme Court. It concerns a major building demolition in central Melbourne. The prospective defendant is a private building surveyor. The applicant who owns an adjoining building apprehends the surveyor is actually or apparently biased in favour of his appointor, the building owner. It wants documents from him to make an informed decision whether to sue him. At the outset, the Court will state its decision.
The application for discovery will be refused. It will be refused because the objective evidence is insufficient to establish the rule’s precondition that requires the Court to be satisfied, objectively on the evidence, that the applicant ‘has reasonable cause to believe that it has the right to obtain relief.’ The strict applicant is making far too much of a slight and explicable statement made by the respondent from which to create for itself a concern that he has not been impartial, or as I would put, has not distanced himself from the permit process. The respondent’s statement must be understood in a wide context; a context which prevails. By reference to the principles of the rule against bias, the regime in the Building Act, the nature of the decision, the identity of the decision maker, and the pragmatism of processing permit applications for a building site — all of which inform the flexibility of the rule against bias — there is objectively in my view an inadequate foundation for the application.
This application concerns a demolition and building project site on the corner of Bourke Street and Queen Street in Melbourne’s central business district. The address is 150 Queen Street. The site is an office building. It has one basement level; a lower ground floor; a ground floor; 11 upper floors and a two level plant and lift motor room on the roof. The building façade is made from concrete panels and infill windows. The building owner is CES Queen (Vic) Pty Ltd. It has obtained a planning permit to build a 71 storey residential tower to be known as ‘Tower Melbourne’. The existing building has to be demolished.
The applicant (‘Colonial’) owns adjoining buildings at 140 Queen Street and 21-27 McKillop Street. Those buildings are adjoining property within the meaning of the Building Act, being ‘so situated in relation to the site on which building work is to be carried out to be at risk of significant damage from the building work’.[1] ‘Building work’ includes work for the demolition or removal of a building.
[1]See s 3(1).
Colonial apprehends that unless adequate protection works or measures are taken by the owner, vibrations from the demolition work will cause the façade of its own building at 140 Queen Street to collapse. The Building Act 1993 and the Building Regulations 2006 have procedures to ensure that the owner does works to protect an adjoining property from damage. Regulation 602(1) states that ‘Protection work must be provided in respect of an adjoining property, before and during the carrying out of any building work, if required by the relevant building surveyor.’ The Building Act permits an owner to appoint a private building surveyor to carry out functions under the Act such as issuing of permits for building work.[2]
[2]Section 76 ff.
The respondent to this application, Mr Ari Akritidis is the building surveyor as appointed by the owner CES Queen (Vic) Pty Ltd. He was appointed in December 2014. He is the third building surveyor to have been appointed in succession (about which, a little more later.) Colonial has here applied under rule 32.05 of the Court’s procedural rules for pre-action discovery of documents from Mr Akritidis. Colonial says it is ‘concerned’ that he might be either actually biased, or, be the object of a reasonable apprehension of bias. It has to be said, as a matter naturally affecting mentalities or apprehensions all round, that this application occurs in a fractious relationship between Colonial and the owner, that has played out in a tangled web of various proceedings in the Building Appeals Board (‘the Board’), the Trial Division of this Court, and the Court of Appeal. As an isolating matter though, this application is predicated on a transcribed statement made by Mr Akritidis at the main directions hearing in November 2016 in the Building Appeals Board in an appeal brought by Colonial from a protection works determination made by Mr Akritidis in August 2016. That appeal concerned protection works for the demolition of the two-storey rooftop plant and lift motor room of the building as the initial demolition works.[3] In the locution of this greater dispute, that (fifth) appeal by Colonial to the Board is known as BAB 5. Reference elsewhere in this judgment to BAB 2, BAB 3, BAB 4 and BAB 5 means the second, third, fourth and fifth appeal by Colonial to the Board.
[3]Exhibit MEB 7 to the affidavit of Miranda Ellen Bordignon sworn 23 December 2016.
Mr Akritidis’ words or statements on which the plaintiff relies so heavily do not mean much without an understanding of the context and the internal references to other events and appeals, and certainly not without an exposure of the statutory processes to understand his function as a decision maker. However, this is what Mr Akritidis said to the Board, as a party, at a directions hearing on 24 November 2016 in a pending appeal BAB 5 between Colonial and the owner against a determination by him (and the emphasis is as made by Colonial on this application) ―
Thank you, Mr T [i.e. Mr Thomas, the Presiding Member]. Just in relation to the matter of amending the grounds of appeal, reference was made to BAB 2. Just for the sake of good order and the record, I wasn’t a party to that. That was the previous RBS [i.e. relevant building surveyor], and when I was appointed, my advice to the applicant, the permit applicant, that this process needs to start again. So I didn’t rely on any information, witness statements and the like that came before the board as part of BAB 2, and I actually used the determination of BAB 2 as the starting point.
So the information submitted to me both for level 12 to ground, and for the rooftop plant room, had regard for all of the recommendations, guidance reasons in BAB 2 as a starting point, and they were fresh application, fresh information, and a completely independent decision that implemented everything I perceived to be BAB 2 requirements, including things such as (indistinct).[4]
[4]Ibid exhibit MEB 8.
I shall refer to that as the ‘Advice Statement’. Colonial contrasts this with earlier statements made by Mr Akritidis to the Board at a directions hearing in an earlier appeal BAB 4 on 17 September 2015. That was an earlier appeal by Colonial to the Board concerning his determination for the demolition of the building from the roof down to the ground (but not the slab); that is, excluding the rooftop plant and lift motor room. On that earlier occasion, in September 2015 Mr Akritidis said (with my underlining) ―
At the time of lodgement and based on a cursory review of the documents I said to Michael [i.e. from the building owner] that you will need to serve protection notices to the adjoining owner for the demolition of the level 12 down to ground level. The CES [i.e. the building owner] proceeded to serve those notices on 24 December. There’s another important point I want to make here under 4.4 and that is that I didn’t prepare those notices and I don’t have any involvement in them. I don’t even see them before they go out because RBS [i.e. the relevant building surveyor] is not allowed to be involved in design. He has to be independent to the process.
So those notices are served without my viewing, knowledge or input.[5]
[5]Ibid exhibit MEB 9.
Colonial says it is not concerned about that earlier statement but uses it to show a recognition by him of the necessity for a building surveyor to be independent. Colonial has seized on his later Advice Statement, more particularly his choice of the word ‘advice’ as carrying, at face value, a meaning of an opinion or recommendation given about future action or a course to be taken by the owner. Colonial say that his ‘advice’ to the owner that ‘this process needs to start again’ has the building surveyor telling the owner what should happen or what it should do, which is contrary to his impartial and independent role as decision maker in the permit process. That now arouses in Colonial a need to know exactly what was said in those communications and from there, to decide whether or not to sue.
This application was, on the affidavit material, launched on a concern that Mr Akritidis had breached s 79 of the Building Act. That does not seem to be apposite. Section 79 is concerned with conflicts of interest or situations where the surveyor has a special or other interest personal to the surveyor which creates the possibility of deviation from proper decision making, thus creating an incompatibility of roles. Section 79 is a penal provision that disqualifies a private building surveyor with such an interest from accepting an appointment, and I would think that the regulating authority is the one with standing to enforce such a penal provision. However, as presented in Court, Colonial’s application proceeded not at all on such a statutory disqualification, but on Colonial’s concern that Mr Akritidis might be either actually biased, or, might be the object of a reasonable apprehension of bias.
A claim of actual bias requires cogent evidence that the decision maker was in fact biased. That carries a very high evidentiary burden. A claim of apprehended bias does not. What must be proved in that case is a reasonable apprehension of bias. Without having to refer to the well-known authorities and discourse on the subject, the ‘two mights’ test is framed as requiring a Court to be satisfied that a fair minded and informed observer might conclude that the decision maker might not be impartial.[6] Such a claim is one of perception rather than reality, thus permitting of some degree of speculation. But, even so, what really matters is that the apprehension must be soundly or reasonably based. And there must be specificity in articulating how the source of the alleged bias may give rise to the reasonable apprehension.[7] Before then, and for present purposes, rule 32.05 requires the applicant to show at the threshold ‘a reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court…’ That does not require showing a prima facie case. Indeed, Colonial does not have one. It has a ‘concern’. Its very contention is that it may have a case depending on what it can discover in the documents it seeks. But to obtain an order for documents it must demonstrate on the evidence that there is reasonable basis for the belief. As its counsel put it (in a way that shows the real caution the Court must take in this application) Colonial has an apprehension of an apprehension.
[6]See generally Aronson and others, Judicial Review of Administrative Action and Government Liability
(Sixth ed) 652-7. See lately Isbester v Knox City Council (2015) 255 CLR 135.
[7]See Aronson at [9.40].
Colonial says, in essence, that a building surveyor is required to be independent and impartial in the exercise of functions under the Building Act. It says that, depending on the terms of the advice or the content of the communications, the giving of advice or speaking to the owner about the protection work process may violate the independence or impartiality that is required of the building surveyor in discharging his functions, particularly the function of making a determination under s 87 of the Act. Colonial says that despite making reasonable enquiries, it does not know what ‘advice’ Mr Akritidis actually gave to the owner and therefore does not have sufficient information to enable it to determine whether to commence proceedings in Court. As the object of rule 32.05 is to prevent speculative litigation and enable the making of informed decision to litigate on proper material, Colonial says it is entitled to be cautious and proceed first to obtain pre action discovery from Mr Akritidis. The proceedings it has in mind are to restrain him from making any further protection work determinations for this project (which is to effectively remove him), or taking any further part in the pending BAB 5 appeal proceedings before the Building Appeals Board. It also contemplates judicial review of his determination made in August 2016 (even though that same decision is being appealed de novo in BAB 5).
Colonial seeks an order for discovery against Mr Akritidis for three types or classes of documents ―
(a) communications between him and the building owner or Delta Group [i.e. the demolition company] ‘relating to the preparation of protection work notices dated 24 December 2014 and served on Colonial … ‘;
(b) communications between him and the owner and Delta ‘relating to the preparation of the protection work notice dated 10 June 2016 and served on Colonial by Delta by letter dated 10 June 2016’; and
(c) ‘all documents recording or referring to the advice to CES-Queen referred to by Mr Akritidis during the directions hearing before the Board [i.e., the Building Appeals Board] on 24 November 2016.’
It is elementary that bias means a predisposition or prejudice against a party for reasons unconnected with the merits of the issue. Under the Building Act there is an unavoidable association of sorts between the owner as permit applicant and the building surveyor as its appointee. The disqualification provisions of s 79 are an incipient means of preventing the appointment of those with a disqualifying interest. The sanction of disciplinary proceedings against surveyors and the availability of de novo appeals to the Board are the statutory measures to ensure that determinations in this field of building and construction are made on the merits and unaffected by an association. The issue on this application is whether the source of the applicant’s concern based on Mr Akritidis’ statement to the Board at the directions hearing is a sufficient basis ― objectively ― to give it a ‘reasonable cause to believe’ that it has or may have a right to relief based upon him being actually biased or being the object of a reasonable apprehension of bias. Or is it mere allegation, suspicion or assertion?
There are some subsidiary issues raised in opposition based on the legislative regime, the nature of the process, the character of the decision maker, and some going to discretion. There is the question whether the surveyor’s role and the statutory process is not truly adjudicative according to the paradigm of the adversarial model, but rather one akin to an expert determination or professional assessment, which is then subject to a merits review hearing before the Board. Thus, it is said, a denial of the application here is not creative of any practical injustice, which is after all the concern of the law,[8] because Colonial can, and has, appealed the determination to the Board anyway and it will be decided at a hearing de novo.
[8]See Lam (2003) 214 CLR 1, 13-14.
These issues relate to a more general issue, dependant on the statute, of the flexible content of the legal rule against bias that recognises that as matter of practicality decision makers (including Judges) who are appointed by reason of their professional knowledge and experience ‘cannot and should not be devoid of experience and inevitable preconceptions that their professional and personal work may bring’ and that prior knowledge and experience can be useful and proper influences.[9]
[9]Aronson p 645.
For all issues, the first step is an examination of the statute.
The statute
Regulation 602(1) states that ‘Protection work must be provided in respect of an adjoining property, before and during the carrying out of any building work, if required by the relevant building surveyor.’ Under the Building Act, notice of the proposed protection work has to be given by the owner to the adjoining owner and to the relevant building surveyor. The notice, which the Building Regulations call a Form 3 notice, must include prescribed details of the proposed building work and the nature, location, time and duration of the protection work.[10] In response, the adjoining owner may give a Form 4 notice to the owner agreeing with the proposed protection work, in which case the owner may proceed to carry out the protection work.[11] Or, the adjoining owner may give a notice (also in the prescribed Form 4) to the owner and to the relevant building surveyor that it disagrees with the proposed protection work, or, that it requires ‘… more information to be given to enable the proposal to be considered by the relevant building surveyor.’[12] If there is disagreement, or a requirement for more information, the building surveyor becomes active as a functionary.
[10]Section 84(2).
[11]Section 85(1), s 86.
[12]Section 85(1)(b).
Under the Building Act, the building surveyor’s mandatory function is to ‘examine the proposal for the protection work and determine the appropriateness or otherwise of the work’.[13] If the adjoining owner’s Form 4 required more information, then the building surveyor may, if considered appropriate, ask the owner to give more information before making a determination and to also make that information available to the adjoining owner. If there is disagreement about the appropriateness or otherwise of the work, the ultimate task for the building surveyor under s 87(4) of the Act is to make a determination and to give the owner and the adjoining owner notice in writing of the determination.
[13]Section 87.
Section 87(3) is especially important for present purposes. It states that ‘In determining a matter under this section, the relevant building surveyor may make any enquiries he or she thinks fit but is not required to give any person a hearing.’ The hearing rule, when not excluded by statute, is part of the package of procedural rules to be observed under the requirements of procedural fairness or natural justice where the decision-making process in question emulates the adjudicative model.
An owner or adjoining owner can appeal a building surveyor’s determination to the Building Appeals Board. The appeal ‘is in the nature of a rehearing’ that is a rehearing de novo.[14] The Authority can affirm, quash, or vary the decision under appeal. Or, it can set it aside the decision and substitute its own decision or remit the decision to the decision maker for reconsideration in accordance with any directions.[15]
[14]Section 141 and 148.
[15]Section 149.
It seems right in principle for the applicant to say that although the surveyor as decision maker is a party to the proceeding in the Board, the surveyor cannot be active, or perhaps proactive, as presenting substantive arguments.[16] The appealing party is the active contradictor. But the surveyor is a party nonetheless, and the statute says a party has a right to make submissions, and the Board can inform itself in any matter as it thinks fit and must proceed with as little formality and technicality as a proper consideration of the matter permits.[17] It does not call for a rigid view to be stated here, but there was no exception taken to the submission that the surveyor is expected to take on a neutral role on appeal of assisting the Board and that would include an informative role on factual or documentary matters as identified on the face of the determination.[18]
[16]Cf the Hardiman approach in judicial review: (1980) 144 CLR 13.
[17]Section 15.
[18]See exhibit MEB 3 to the affidavit of Miranda Ellen Bordignon sworn 23 December 2016.
But the respondent did, in another way, make the submission that concerned the surveyor’s role viz a viz an appeal. Although the building surveyor’s role is activated when an adjoining owner disagrees on the question of the appropriateness of the protection works, the statute leaves the surveyor to his own enquiries and the application of his own knowledge and experience, without the necessity for a hearing. He makes up his own mind without arguments form the disputants. Therefore, it was said, the building surveyor (who is appointed by the owner) truly cannot be regarded as acting in an adjudicative or dispute resolution function in making a determination, but should be seen as carrying out the function of making a professional assessment of the appropriateness of the works. It was submitted the adjudicative function was performed by the Board on appeal in a de novo hearing.
This submission went in aid of an argument that the rule against bias had questionable application to a surveyor who was called on not to adjudicate a dispute, but to intervene and give an opinion applying his own knowledge and experience. I can see some sense in this if the surveyor is able, under the statute, to make enquiries as he thinks fit. That could include I suppose making private enquiries or communications with the owner, or with the adjoining owner in a way that might be inappropriate or attract perceptions of bias if the adjudicative model applied strictly. Or, the submission may have gone incidentally to the point of practical justice that a refusal of this application caused no possible injustice to Colonial or had no real benefit because there was an appeal de novo from the opinion anyway.
This is not the occasion for a process value analysis. It can be safely assumed that the absence of a hearing does not of itself excuse the decision maker from observing the rule against bias. The absence of a hearing may make any apprehended bias less detectable. Although acting independently and by his own devices, a surveyor is there to give a determination on a matter in dispute as identified. It is clear that in carrying out his functions and obligations, a building surveyor plays a critical role in maintaining public safety and protection in design, demolition and construction of buildings; and that responsibility requires an independence and impartiality.[19] Impartiality engenders confidence or an acceptance of the decision. An aberration exists in that a surveyor is appointed by the building owner, but that is to carry out a statutory function under which the surveyor is called on to give an independent opinion on a matter in dispute.
[19]See Colonial Range Pty Ltd v VBA and others [2014] VSC 272 at [16], [27] – [29], [36], [37].
The statement made by Mr Akritidis on which the application is based occurred in a directions hearing for an appeal. I turn now to that body of facts. The appeals and litigation was described correctly as a tangled web. But it is a necessary part of the context and must be considered.
The facts
Deponents for each party have filed a chronology, but there was even controversy about that. Colonial says Mr Akritidis’ use of his chronology for this application was improper and a demonstration of his apparent loss of impartiality because Colonial had objected to its accuracy and its use before the Board, and asked for it to be removed from the Board file. The level of detail in both chronologies goes beyond what is needed for this application. I shall proceed selectively and diffidently by drawing from the chronologies where they do not differ, the affidavits, and from facts stated in the judgments of Vickery J in Colonial Range Pty Ltd v Victorian Building Authority and others,[20] CES Queen (Vic) Pty Ltd v Thomas and others,[21] CES Queen (Vic) Pty Ltd v Thomas and others[22] and CES Queen (Vic) Pty Ltd v Thomas and others,[23] and the Court of Appeal in Colonial Range v CES Queen (Vic) Pty Ltd.[24] This will be an expurgated account.
[20][2014] VSC 272.
[21][2014] VSC 602.
[22][2015] VSC 120.
[23][2015] VSC 564.
[24][2015] VSCA 356.
The first building surveyor to be appointed by the owner for its building works was Mr Stasi Galanos of Gardener Group Pty Ltd. In 2013 the owner applied to him for a permit to demolish the whole of the building, that is, demolition down to the ground level, and including the rooftop plant and lift motor room. After the exchange of notices between the owner and Colonial, Mr Galanos made a determination requiring protection works to be carried out for Colonial’s adjoining properties at 140 Queen Street and 21-27 McKillop Street. In July 2013, Colonial appealed that determination to the Board. That appeal has become known as BAB 1. In that appeal, a Mr Shane Leonard of Phillip Chun and Associates Pty Ltd had been retained by the owner to give evidence in opposition to Colonial’s appeal.
I gather that in December 2013 the owner had requested Mr Galanos to revoke his protection works determinations, to which Colonial objected. (I am not sure, but there might have been a question about alleged defects in the Form 3 notices). Mr Galanos would not do as the owner asked, and chose to neither confirm nor revoke his determination for as long as the appeal in BAB 1 was pending before the Board. I am not sure, but it appears the appeal in BAB 1 did not proceed because the owner decided in about November 2013 to withdraw its Form 3 notices.
On 5 December 2013 Mr Galanos applied to the Victorian Building Authority (‘the Authority’) under s 81(1) of the Building Act for its consent to a termination of his appointment as the building surveyor. Neither the owner nor the builder as permit holder objected. But the Authority’s statutory powers do not extend to appointing a replacement building surveyor. It is confined to giving directions to facilitate the transfer of functions to another private building surveyor or municipal building surveyor. To that end, the owner proposed that if the Authority consented to Mr Galanos’ application, it would appoint Mr Shane Leonard to accept a transfer of the functions of relevant building surveyor.
On 23 December 2013, the Authority gave its consent to the termination of Mr Galanos’ appointment. Colonial requested reasons for that decision. On 14 January 2014, Mr Leonard was appointed by the owner as the relevant building surveyor. The Authority’s reasons were given by letter on 18 February 2014 and included a statement that ‘…the continuation of Mr Galanos as the private building surveyor for this site would, more probably than not, impact on his ability to perform the functions as the RBS with impartiality.’[25] The Authority directed Mr Galanos to provide material to Mr Leonard and for him to inspect the site. Colonial’s solicitor had made written submissions to the Authority that the Authority ought not have consented to the termination of Mr Galanos’ appointment if Mr Leonard was to be appointed as the relevant building surveyor, seeing as Mr Leonard already had a relationship with the owner beyond the statutory role and had been engaged to give evidence against Colonial. For the same reason, it had contended the appointment of Mr Leonard was invalid.
[25][2014] VSC 272 [86].
After Mr Leonard’s appointment, I gather the owner then decided to demolish the building in two stages. First, it would demolish the rooftop plant and lift motor room at 150 Queen Street which is in direct contact with the roof structure of 140 Queen Street. Secondly, it would demolish the remaining structure to the ground floor but not including the slab. After the exchange of notices which produced a disagreement by Colonial to the stage 1 protection works (plant and lift motor room), Mr Leonard made a determination dated 5 February 2014. He determined that the proposed protection works for stage 1 were appropriate. On 21 February 2014 Colonial appealed to the Board against that determination. That appeal is known as BAB 2. There was still an issue for Colonial about the validity of Mr Leonard’s appointment, so Colonial also referred that ‘other dispute’ to the Board under s 155 of the Building Act as well as other matters that are not relevant here.
Then, on 12 March 2014, Colonial brought proceedings in this Court under the Administrative Law Act for an order to review the Authority’s decision to consent to the termination of Mr Galanos’ appointment (and therefore the consequential appointment of Mr Leonard). That application led to an adjournment of BAB 2. It contended that prior to the Authority giving its consent to the termination of Galanos’ appointment, the Authority had not been told, as was the fact, that the proposed replacement, Mr Leonard, had been retained to give evidence against Colonial’s interests by one or more of the respondents in an appeal brought by Colonial against the issue of protection works determinations made by Galanos on 3 July 2013 for works at 150 Queen Street. The case seems to have been put on the basis of a denial of natural justice to Colonial, as a party affected, from being heard by the Authority on such adverse matters. Colonial contended that had there been proper disclosure to the Authority, it would not have consented to Galanos’ termination or it would have consented to his termination on condition that another surveyor be appointed to take over the functions, other than Mr Leonard.
On 4 April 2014 Vickery J dismissed Colonial’s application for review under the Administrative Law Act.[26] His Honour held that on a proper construction of the Building Act, there was no obligation on the Authority to give Colonial as adjoining owner the right to be heard as a matter of natural justice when deciding whether to consent to the termination of an appointment of a private building surveyor under s 81(1) of the Act. In refusing Colonial, it is worth noting that Vickery J added something that formed a definite part of Ms Fitzgerald’s submissions for Mr Akritidis in this case about the absence of a practical injustice when it comes to the residual exercise of discretion, saying ―
I am not satisfied that practical injustice is likely to be caused to Colonial as a result of this appointment. The Act provides for a number of protections for adjoining owners including the right to be heard and to appeal to an independent statutory body, the Building Appeals Board, from any determination made by Mr Leonard.[27]
[26]See Colonial Range Pty Ltd v Victorian Building Authority [2015] VSC 272.
[27]At [135].
On 22 April 2014 Colonial commenced an appeal to the Board against the determination of Mr Leonard concerning the Stage 2 demolition of the building from the roof and down to the ground floor slab. That is appeal BAB 3. That appeal was put on hold pending the appeal in BAB 2 and later, the challenges brought by the owner in this Court under BAB 2.
The appeal in BAB 2 was heard by the Board in April 2014. (That concerned Mr Leonard’s determination for Stage 1.) The Board made a determination dated 30 June 2014 stating that ‘The Board was not satisfied that the appointment of Mr Leonard …was valid’.[28] It had reached that decision on the basis that Mr Leonard accepted the appointment in breach of the conflict of interest provisions in s 79 of the Building Act. The Board quashed his determination, and assumed jurisdiction to determine the appropriateness of the protection work as determined by him for Stage 1. The Board made a finding, and it substituted its own decision, that the protection works were not appropriate.
[28]See Colonial Range Pty Ltd v CES-Queen (Vic) Pty Ltd [2015] VSCA 356, [4] (Ct App)
On 31 July 2014 the owner brought proceedings in this Court contending that in BAB 2, the Board, in conducting an appeal under s 141(a) against a building surveyor’s protection work determination, had no jurisdiction to determine collaterally the validity of the building surveyor’s appointment, and therefore exceeded its jurisdiction in quashing Mr Leonard’s determination.[29] Vickery J ordered a trial of three preliminary questions the upshot of which was to determine on 3 December 2014 that the Board had the jurisdiction to determine that Mr Leonard’s appointment was invalid; and that his protection works determinations be quashed; and that the Board’s determinations were a valid substitute for that of Mr Leonard.
[29]CES Queen (Vic) Pty Ltd v Thomas and Others [2014] VSC 602.
I come now to the appointment of Mr Akritidis in December 2014 as Mr Leonard’s successor. I bring forward, as chronologically relevant, the salient part of the statement on which Colonial relies for this application which was made later in November 2016:
… and when I was appointed, my advice to the applicant, the permit applicant, that this process needs to start again. So I didn’t rely on any information, witness statements and the like that came before the board as part of BAB 2, and I actually used the determination of BAB 2 as the starting point.
The fact is, the process did start over again. On about 30 December 2014 the owner served on Colonial and Mr Akritidis two Form 3 protection works notice for demolition of the building down to but not including the ground floor slab.[30] On 5 January 2015 Colonial served Form 4 notices disagreeing with the protection works and requested further information. That called for a determination.
[30]Exhibit MEB 1 to the affidavit of Miranda Ellen Bordignon sworn 23 December 2016.
Before Mr Akritidis made a determination the parties were back in the Supreme Court. This time the owner sought a declaration concerning the Board’s determination of 30 June 2014 in BAB 2 which substituted the quashed determination of Mr Leonard. Vickery J found there was ‘a level of uncertainty in the expression of its determination as to what the Board actually intended to do’ and declined to make a declaration.[31] His Honour stated that it was within the Board’s power to re-constitute itself and make ancillary orders or exercise power under its equivalent of the ‘slip rule’ to give effect to its determination.
[31][2015] VSC 120.
On 4 May 2015, Mr Akritidis made two protection works determinations under s 87 of the Building Act. He determined that the proposed method of protection works was appropriate subject to numerous matters.[32] Colonial appealed those determinations to the Board in an appeal known as BAB 4. That appeal was heard on 17 September 2015 . It was at that hearing that Mr Akritidis made his uncontroversial statement that the surveyor has to be independent of the process.
[32]Exhibit MEB 3 to the affidavit of Miranda Ellen Bordignon sworn 23 December 2016.
Before the Board determined the appeal in BAB 4, there was another Court proceeding brought by the owner against the Board and Colonial.[33] After the last judgment of Vickery J, the owner asked the Board to ‘correct’ its determination under the slip rule or other power to make incidental or ancillary orders. The Board declined to do so. The owner then sought orders from the Court in the exercise of its supervisory jurisdiction. His Honour decided that unless a protection work order is made by the Board with necessary certainty, the important obligations of the owner will not be defined. As the Board had declined to give precision to its determination, it failed in its statutory function and committed jurisdictional error. His Honour upheld the Board’s determination that the appointment of Mr Leonard was invalid; declared the Board’s determination about the appropriateness of the protection works to be void; and remitted the appeal the Board for rehearing on the appropriateness of the protection works. On further appeal, the orders of Vickery J were set aside by the Court of Appeal on December 2015.[34] That Court held on appeal that his Honour had misconstrued the Board’s determination, and there was no uncertainty in its determination.
[33]CES Queen (Vic) Pty Ltd v Colonial Range Pty Ltd (Orders) [2015]VSC 564.
[34]Colonial Range Pty Ltd v CES-Queen (Vic) Pty Ltd [2015] VSCA 356.
That is all that need be said about BAB 2 for present purposes.
On 28 April 2016, in BAB 4, the Board affirmed Mr Akritidis’ two determinations.[35] Colonial then commenced proceedings in this Court seeking judicial review and a quashing of the BAB 4 determination. That was dismissed by Digby J in a judgment very recently published to the parties.
[35]Exhibit MEB 4 to the affidavit of Miranda Ellen Bordignon sworn 23 December 2016.
The protection works notification process continued. On 10 June 2016, the owner served a second set of two Form 3 notices of protection on Colonial and Mr Akritidis, this time for the demolition of the roof top lift motor room and the plant room.[36] Colonial disagreed. That led eventually to a works determination by Mr Akritidis dated 16 August 2016.[37] Colonial has appealed that determination to the Board and seeks to quash the determination. That appeal is known as BAB 5. It was at a directions hearing of BAB 5 on 24 November 2016 that Mr Akritidis made the statement about his ‘advice’ to the owner at the time of his appointment, on which this application for pre-action discovery is made. As things stand, BAB 5 is pending.
[36]Exhibit MEB 5 to the affidavit of Miranda Ellen Bordignon sworn 23 December 2016.
[37]Ibid exhibit MEB 7.
Amidst all those facts, Colonial propounds three grounds for its reasonable cause to believe that it may have a right to obtain relief against Mt Akritidis for his alleged bias. The first, and it appears foremost, is based on his ‘advice’ to the owner that ‘the process needs to start again’. That means starting again the notice process for stage 1 and stage 2. For Colonial, much seems to depend on Mr Akritidis use of the word ‘advice’. To a lawyer, that word, and the word ‘advise’, might implicitly convey a relationship in which someone assumes responsibility for recommending a course of action in the recipient’s interests. It could just as easily, and more likely, be an example of commercialese or unnecessary formality which in ordinary discourse or in trade or commerce could be easily replaced with ‘tell’ or ‘let know’ outside such a relationship.
In an affidavit sworn in opposition to this application, Mr Akritidis says this about his statement:[38]
19.I understand that the Plaintiff takes issue with the statement I made at a directions hearing of BAB 5 on 24 November 2016 that ‘when I was appointed my advice to the applicant, the permit applicant, that this process needs to start again… I actually used the determination of BAB 2 as the starting point’ on the basis that this somehow indicates that I have a conflict of interest. When I made that statement I simply meant that the last decision that had been made in relation to the relevant protection works was BAB 2. The decision in BAB 2 was to the effect that the last protection works were inappropriate and that was the backdrop against which I was considering matters. That is what I meant by that BAB 2 was the ‘starting point’.
20.It is not clear to me what aspect of this statement involves a conflict of interest. As indicated in the BAB 5 directions hearing, when I was appointed I told the building owner words to the effect that my approach to the assessment of any protection works notices would be that the process would need to start again (despite there having been previous notices and approvals by previous building surveyors) and I would start afresh following the decision of the BAB in BAB 2. Although I used the phrase ‘my advice’, the ‘advice’ was simply a statement to the building owner about how I would approach the matter. A less ambiguous way of saying it may have been to say ‘I told the permit applicant that … ‘.
[38]Affidavit of Aristidis Akritidis sworn 16 February 2017, para 19-20.
On this application Colonial not only seizes on his choice of the word ‘advice’ but says that even if ‘advice’ means the same as ‘what I told the owner’, his statement to the owner that ‘the process needs to start again’ is advice in substance and was bound to be taken that way, coming as it did from a building surveyor. Colonial says the Building Act does not confer upon a building surveyor the function of giving information or advice of that kind; it is not for Mr Akritidis to tell the owner to start the process again; it is for the owner to conceive of what to do in the predicament it obtained. Moreover Colonial submitted, there was no necessity for the process to start again. The Board’s substituted determination in BAB 2 had the validation of the Court. As for BAB 3, Colonial submits the owner had options such as allowing BAB 3 to continue and to run its course at the Board because, so Colonial asserts, the fact that Mr Leonard’s appointment was invalid as a result of BAB 2 did not deprive the Board of jurisdiction to entertain the de novo appeal from Mr Leonard’s determination in the BAB 3 appeal.
Thus, Colonial’s belief is that in giving advice that the process ‘needs to’ start again (and ‘needs to’ can be idiomatic, and does not have to mean necessary), there might be a case that he did not or would not bring an impartial mind if there was disagreement about the works from Colonial which would then require a surveyor’s determination.
I do not see how that follows, and I think a puritanical approach is being taken to words and phrases. I can see why he or others looking to restore order or stability, would say that if the BAB 2 litigation experience culminated in an invalidation of Mr Leonard’s appointment and his determinations, it therefore became necessary to start all over again. The appeal in BAB 3 concerning Mr Leonard’ determination about protection work for the demolition of floor 1 to 12 was still on hold as the parties conducted their disputes over BAB 2. As Mr Leonard’s appointment and determination were invalidated in BAB 2, then that could affect the validity of his appointment and determination that was subject to appeal in BAB 3. The question of the validity of Mr Leonard’s appointment and determination in BAB 3 had not yet arisen for determination, but Colonial had always contended Mr Leonard’s appointment was invalid. The outcome of BAB 2 was a validation of the Board’s substitute determination so to that extent the demolition could proceed. But that left the dispute for Stage 2 works.
In all that had occurred in this dispute up to the time of his appointment, as I have exposed, I think it is a reasonable construction of Mr Akritidis’ statement to the Board, and certainly one wholly faithful to the circumstances, that he as new appointee would embark on his responsibilities afresh and BAB 2 would be the timely or convenient starting point or demarcation point to realign stage 1 and stage 2 and start again. On the objective facts, I do not see how that might compromise impartiality or show a predisposition or prejudice against one party for reasons unconnected with merits of the matter. For my part, even applying judicial norms, there can be situations where the modern expectation of judicial intervention and case management in a troublesome case lead a Judge to suggest or even induce a litigant to ‘start again’ or mend matters in some procedural way in order to stabilise and advance things. I think this is what has happened here.
Mr Akritidis deals with his statement in his affidavit, not before informing the Court of his noticeable credentials. He has been a member of the Australian Institute of Building Surveyors for 20 years. He has been a member of the Building Appeals Board for approximately seven years; a member of the Victorian Government’s Building Regulations Advisory Committee; and has served on an Australian Standards committee as a representative of the Australian Institute of Building Surveyors. He tells the Court in 2016 he received the Private Building Surveyor of the Year Award from the Australian Institute of Building Surveyors. In essence his opposition to this application starts with saying:
The role of RBS necessarily involves me communicating with the building owner who is responsible for appointing me and paying for my services under the Act. That payment does not require me to do what the building owner wants. To the contrary, my contract with the building owner is for the provision of professional services that are not subject to dictation by the building owner.[39]
[39]Ibid para 17.
He exhibits Practice Notes issued by the Building Commission by which he says he is guided. Those Notes expressly say, amongst other things, that he as relevant building surveyor ‘…should discuss with the applicant the reasons for requiring protection work, so that they can address those issues in the details they provide to accompany’ the notice to the adjoining owner.[40] More explicitly the Practice Notes say ‘The RBS may provide advice to the owner and adjoining owner to ensure sufficient details are provided with the protection works notice’ and served in the proper manner but ‘It is not appropriate for the RBS to prepare or serve these documents.’ As for his role and function the Notes say:[41]
The RBS acts as an independent decision maker in relation to protection work. The owner should provide the RBS with information that will enable the RBS to determine the appropriateness of the proposed protection work if the adjoining owner disagrees with the proposal or requests further information.
The RBS should refrain from acting as an arbiter where there is disagreement. If the determination is challenged via an appeal to the BAB, then the RBS should provide the BAB whatever evidence and/or information is necessary in order for the BAB to resolve the situation.
[40]Ibid exhibit AA 4, p 3 of 15.
[41]Ibid exhibit AA 4, p 2 of 15.
As for the legal function or role of the RBS in the event of a disagreement, Mr Akritidis cites this part of the Practice Notes concerning s 93 to s 100 of the Building Act:[42]
The RBS can play no role in the administration of these provisions. It is recommended that the RBS resist any request or temptation to assist in resolving any differences of opinion between the owner and the adjoining owner, particularly in relation to ss 93 to 98. The Building Appeals Board is the appropriate body for dispute resolution under these sections. Sections 99 and 100 are matters to be referred to the civil courts.
[42]Ibid exhibit AA 4, p 5 of 15.
The Practice Notes do not have the force or quality of law. But they are part of the practical consideration of the matter. In considering the nature of the decision and the identity of the decision maker, in the context of the appointment by the owner, it is unreasonable I think not to see his role as one which unavoidably involves some interaction with the owner about the process, be it on site or on the notices and the documentation. I think this goes to the question of the statutory regime, the nature of the decision, and the identity of the decision maker as informing the flexibility of the bias rule. The nature of the process and the character of the decision maker matters when it comes to considering the rule against bias, and the importance of appearances ― and the law’s reference in bias cases to the standards of the hypothetical observer who is fair minded and informed of the circumstances.
The Advice Statement’ is Colonial’s foundation for this application. I would hold the Advice Statement of itself or by ramification does not give the applicant a reasonable basis for believing it may have grounds for relief for bias.
But Colonial advances additional limbs to the argument, said to add to the creation of an apprehension of bias.
The second limb is that Mr Akritidis’ explanation in his affidavit is ‘backpedalling’ or ‘shifting ground’. Again, seizing on the ipsissima verba (the exact or very words) Colonial says the language has shifted from ‘I will start again’ to ‘my approach to the assessment of any protection works notices would be that the process would need to start again’. Colonial says that only adds to its apprehension. I think that is an unmeritorious submission, and I would reject it. The statement made to the Board was hardly elaborate. What is said by Mr Akritidis in his affidavit is not a shift, or shifty. It is an explication. And it is consistent with the statement to the Board. So much seems to be turning puritanically on the choice of words or their nuance, and without any regard to the context and the situation that had been obtained by Mr Akritidis.
I would say the same for the allied third submission that Mr Akritidis has taken a ‘very defensive’ stance in his affidavit and in his decision to hire a lawyer to represent him at the Board. I take this to arouse suspicion that he is to be seen as fortifying the owner’s defences in the battle at the Board in not maintaining a stoic line more becoming of an impartial functionary despite having his words and conduct called into question. I see nothing defensive in the affidavit, in a compromising sense. There is no objection to the admissibility of his affidavit, and he is entitled to explain the usage of the words to which Colonial gives such scrutiny. ‘Bias is both a loaded and open word. It is loaded because any finding of bias is a damning one.’[43] His affidavit is explanatory and has a reasonable purpose. I would reject this part of Colonial’s submission too.
[43]Aronson, p 644.
I would say the same or similar for the fourth element of Colonial’s case on this application. It also shows, I think, a predisposition to find a cause for concern about Mr Akritidis. Colonial isolates some actions and statements made at some directions hearings before the Board in BAB 5 at which Mr Akritidis was legally represented. The first was his act in seeking to adopt the owner’s written chronology in the appeal. Colonial had objected to the contents of that affidavit and asked for it to be disregarded. Yet, Colonial complains, Mr Akritidis adhered to it even though he did not have personal knowledge of its contents as it concerned events before his appointment. He exhibited it to his affidavit in this application. By those acts, Colonial says he is showing himself to be aligned with the owner. I think that to be a shallow basis to support the application. I do not know the precise basis of the controversy about the chronology, but he was a co respondent to the appeal and the adoption, if that is what it was, of the owner’s chronology of itself does show him to be partisan. He had made his determination and it became a matter for the Board.
To add to that concern, Colonial asserts he stepped into the arena. At a directions hearing in BAB 5 on 24 November 2016 and 19 January 2017 his lawyer made these statements to the Board:[44]
[44]MEB 16, 17 to the affidavit of Miranda Ellen Bordignon sworn 13 February 2017.
…we want this matter set down for hearing as soon as possible…
We’re seeking a timely administration of justice in this matter…
My clients are very concerned about what we perceive to be a change of position by the applicant…
We believe, and I have to emphasise again, we believe this matter’s been unduly delayed, and it’s appropriate the matter be set down for hearing…
And my client is quite firm in his resolve in saying that there should be sanctions imposed upon Colonial as a result of not complying with the – what is clearly a valid decision of the board…
…what we seek is, in essence, a quasi-guillotine order to the effect that, if there is noncompliance with these matters within seven days of today’s date, then the appeal should be dismissed…
And we also request the board, for due consideration, to make an order as to costs against Colonial, the appellant…
I reject this as reasonable grounds for apprehending there might be an apprehension of bias. Of course, decision makers may create an apprehension of bias by conduct. And these things are judged usually in the context of a hearing by reference to professional or judicial norms where, for example a reasonable bystander might see or detect favouritism to one party.[45] The reference to the Judge who descends into the dust of the litigation and gets the dust in the eyes is by reference to the fairness of the hearing rather than bias, and even then the tests become diluted in Tribunals and other non-judicial bodies when there is a statutory charter to act informally with expedition and become informed in any manner as is seen fit.
[45]See generally Aronson, [9.160]
Here, the conduct of Mr Akritidis is not referable to him as decision maker and the statements were not made in carrying out his role in making a determination. Indeed in making a determination, without a hearing, and applying his own knowledge and experience, he truly must descend into the dust. The issue here, as I see it, is based on an apprehension that his lawyer’s statements about Colonial’s delay show he has not distanced himself from the controversy. From there, the contention is that in complaining about the delay, and asking for the appeal date to be fixed, and requesting sanctions against Colonial for delay, and using the owner’s chronology, he has aligned himself with the owner which is behaviourally repugnant to his impartial role. It would be said he should be indifferent to the delay; and the owner can take up the cudgels in that regard.
In my view this does not bespeak or suggest a subsisting apprehended bias. I, and I think the reasonable bystander, cannot ignore the turbulent history of the case and the intensity of the disputations. Mr Akritidis is a neutral party on the appeal but given his involvement in the subject matter he is I think reasonably entitled to express his concerns about procedural delay.
Questions concerning apprehended bias are not appraised in the abstract or in a legal laboratory. And the process under the Building Act is a distance from the judicial paradigm. As was said in Isbester v Knox City Council (omitting citations):[46]
The question whether a fair-minded lay observer might reasonably apprehend a lack of impartiality with respect to the decision to be made is largely a factual one, albeit one which it is necessary to consider in the legal, statutory and factual contexts in which the decision is made.
…
It was observed in Ebner that the governing principle has been applied not only to the judicial system but also, by extension, to many other kinds of decision-making and decision-makers. It was accepted that the application of the principle to decision-makers other than judges must necessarily recognise and accommodate differences between court proceedings and other kinds of decision-making. The analogy with the curial process is less apposite the further divergence there is from the judicial paradigm. The content of the test for the decision in question may be different.
How the principle respecting apprehension of bias is applied may be said generally to depend upon the nature of the decision and its statutory context, what is involved in making the decision and the identity of the decision-maker. The principle is an aspect of wider principles of natural justice, which have been regarded as having a flexible quality, differing according to the circumstances in which a power is exercised. The hypothetical fair-minded observer assessing possible bias is to be taken to be aware of the nature of the decision and the context in which it was made as well as to have knowledge of the circumstances leading to the decision.
[46](2015) 255 CLR 135, 146 (per Kiefel, Bell, Keane and Nettle JJ).
The numerous authorities in State and Federal Courts establish that rule 32.05 is a tool of justice and to be construed beneficently.[47] But it must be on principle. An applicant does not have to show that it has a prima facie case that it has the right to obtain relief. But an application must not be based upon a mere hunch. There must objectively be reasonable grounds for a belief. Belief requires more than mere assertion and more than suspicion or conjecture and the evidence must incline the mind towards the matter or fact in question. The assent of belief is given on more slender evidence than proof, and the grounds which can reasonably induce the required inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture.
[47]See Plzen Pty Ltd v P & O Wharf Management Pty Ltd [2007] VSC 318 and Australian Gift and Homewares Association Ltd v Melbourne Convention and Exhibitions Australia Pty Ltd [2014] VSC 481.
Colonial’s case on this application is not only based on exiguous evidence but I think is unrealistically avoiding the practical situation at hand based as it is on an apprehension of an apprehension. I accept the owner’s submission that the evidence does not provide a sufficient foundation for Colonial’s belief that it has the right to obtain relief for bias. Further, I see no injustice in a refusal. Mr Akritidis has applied his mind and made a decision which Colonial has appealed and it will be heard de novo by the Board as if it were the original decision maker. Even if Colonial obtains pre-trial discovery and decides is able to sue for bias, and if it succeeds in quashing the determination regardless of merits, the outcome will be a recommencement of the process by another surveyor on its merits. And that is what is, in effect happening. The Board is hearing the protection works application anew.
For those reasons I propose to order that the application be dismissed with costs.
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