Donabray Pty Ltd v Wardman

[2000] WADC 27

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

LOCATION:   PERTH

CITATION:   DONABRAY PTY LTD -v- WARDMAN & ANOR [2000] WADC 27

CORAM:   BLAXELL DCJ

HEARD:   30 AUGUST, 19 NOVEMBER 1999

DELIVERED          :   4 FEBRUARY 2000

FILE NO/S:   CIVO 129 of 1999

BETWEEN:   DONABRAY PTY LTD (009 108 561)

Applicant

AND

SIMON PETER WARDMAN
PENI LAVERN WARDMAN
Respondents

Catchwords:

Appeal - Building Disputes Committee - Application for extension of time to apply for leave to appeal - Non-attendance by applicant at hearing of complaint - Decision by applicant not to attend following legal advice that unnecessary to do so - Factors to be considered in determining whether to exercise discretion to extend time

Legislation:

Builders Registration Act 1939 s41

Home Building Contracts Act 1991 s17

Result:

Application for extension of time refused

Representation:

Counsel:

Applicant:     Dr P R MacMillan

Respondents                 :     Mr P W Nichols

Solicitors:

Applicant:     E M Stanley & Co

Respondents                 :     Black & Co

Case(s) referred to in judgment(s):

Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196

Jackamarra v Krakouer (1998) HCA 27

Palata Investments Ltd v Burt and Sinfield Ltd (1985) 1 WLR 942

Wilson v Metaxas (1989) WAR 285

Wing Luck Foods v Lay Choo Lim (1989) WAR 358

Case(s) also cited:

Gallo v Dawson (1990) 64 ALJR 458

Lord v Australian Safeway Stores Pty Ltd [1996] 1 VR 614

Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146

Vilenius v Heinegar (1962) 36 ALJR 200

1. BLAXELL DCJ:  This is an application for an extension of time to file and serve an originating summons seeking leave to appeal from a decision of the Building Disputes Committee ("the Committee"). 

2. The applicant company conducts a business constructing swimming pools and spas, and trades under the name of "Phoenician Pools & Spas".  On 1 October 1997 it entered into a written contract with the respondents for the construction of a swimming pool at the latters' house in Como.  The contract was subsequently varied on three occasions to allow for the additional construction of a retaining wall, a spa, and a paved area.  The applicant commenced but did not complete the swimming pool and associated works, and by late 1998 there were disputes between the parties as to the standard of workmanship, whether or not payments were due, and whether or not the contract had "lapsed" or had been terminated. 

3. On 13 October 1998 the respondents filed a complaint with the Committee alleging that there had been faulty or unsatisfactory building work and breach of contract by the applicant.  The respondents claimed moneys allegedly pre‑paid for work not done by the applicant, together with damages for breach of contract. 

4. The applicant received a "notice of hearing" in respect of the complaint and was advised that the Building Disputes Committee would convene to hear the matter on 24 March 1999.  The managing director of the applicant (Mr Raymond Said) sought legal advice on the matter, but decided not to attend the hearing because he believed that "it was not necessary" for him to do so.  The Committee heard the complaint in the absence of the applicant and made orders for payment in favour of the respondents totalling $16,305. 

5. The applicant wishes to appeal from this decision but requires the leave of this Court in order to do so (pursuant to s41(2) of the Builders Registration Act 1939).  Pursuant to O8, rr5 and 29 of the Rules of the District Court an application for leave to appeal must be filed and served within 21 days of the decision in question or within such further time as a Judge or Registrar shall allow.  The present application for an extension of time in which to seek leave to appeal was filed on 20 May 1999 (ie approximately two months after the decision). 

The proposed grounds of appeal

1. If the applicant is successful in obtaining an extension of time and a grant of leave, its grounds of appeal will be as follows: 

   "(1)That the order to pay made by the Building Disputes Committee on 24th March 1999 was made in the absence of the Appellant. 

   (2)That the Appellant did not attend the hearing before the Building Disputes Committee on 24th March 1999 because the Appellant was under the misapprehension that the Building Disputes Committee could not make any order for payments but that it could make findings only on matters relating to workmanship. 

   (3)That further, the Appellant was misled by the contents of the 'Important Notice' on the back of the Building Disputes Committee's Notice of hearing dated 22nd December 1998 stating under the heading 'Attendance' that 'It is not compulsory that you attend the hearing' inducing the Appellant to believe that attendance was optional and that any decision of the Building Disputes Committee would not be enforceable as an order of a Court of Law. 

   (4)That legal advice received by the Appellant as to the effect of the Building Disputes Committee's orders or decisions were erroneous and had misled the Appellant into believing that such orders and decision were not enforceable but that proceedings had to be instituted in a Court of Law. 

   (5)That the Appellant has a complete defence to the Respondents' complaint in that the Respondents had breached the terms of four contracts respectively dated 1st October 1997, 14th November 1997, 18th November 1997 and 24th July 1998 entered into between the Appellant and the Respondents by preventing the Appellant and its agents and workmen from entering the work site at 42 Clydesdale Street, Como to complete the construction of a swimming pool and the installation of a spa. 

   (6)Consequent upon the breach of contract on the part of the Respondents as set out in paragraph (4) hereof the Appellant has suffered loss and damage entitling the Appellant to make a counterclaim against the Respondents. 

   (7)That the Appellant will suffer an injustice if the Building Disputes Committee's order to pay of 24th March 1999 is not quashed and the Appellant is not given the opportunity to pursue his claim against the Respondents. 

   (8)In order to deal with the questions in issue between the parties and the real merits of the disputes between the parties, it is appropriate that the matter as a whole be referred back to the Building Disputes Committee for a re‑hearing of the Respondents' claim against the Appellant and for a hearing of the Appellant's counterclaim against the Respondents." 

The principles governing the discretion to extend time

1. In Palata Investments Ltd v Burt and Sinfield Ltd (1985) 1 WLR 942, 946, the Court of Appeal held that there are four major factors to be considered in the exercise of the discretion to extend time for appealing. These factors are firstly, the length of the delay, secondly, the reasons for the delay, thirdly, whether there is an arguable case and, fourthly, the extent of any prejudice to the respondent. Depending upon the particular case there may also be additional factors.

2. In Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196 the Full Court applied these same factors when deciding not to extend time for the entry of an appeal for hearing. Although the majority of the High Court in Jackamarra v Krakouer (1998) HCA 27 has thrown doubt on the Esther decision, the principles as set out in Palata are still relevant to applications for extensions of time that seek to put at risk the substantive rights of a respondent. 

3. In the present instance the respondents have a substantive and vested interest in the decision made by the Committee.  Accordingly, and as the time limited for an application for leave to appeal has expired, that time should not be extended unless the proposed application for leave has some prospects of success (see Brennan CJ and McHugh J in Jackamarra at 3).

4. However, when assessing such prospects of success and whether or not the applicant has an arguable case, the Court should not go into "much detail on the merits" because it is not appropriate to conduct a full rehearsal of the appeal.  The merits of the proposed application for leave must necessarily be determined in a "fairly rough and ready way" (Brennan CJ and McHugh J ibid at 4). 

5. By enacting that an appeal could only lie by leave of this Court, Parliament obviously intended to minimise the number of appeals from decisions of the Committee.  Similar statutory provisions have been considered by the Supreme Court in Wilson v Metaxas (1989) WAR 285, and in Wing Luck Foods v Lay Choo Lim (1989) WAR 358. In Wilson (at 294) it was held that:

   "The jurisdiction to hear the appeal is founded upon the grant of leave.  The grant of leave lies in the discretion of the court.  In general, however, it must be shown that the decision in respect of which lave is sought was wrong, or at least attended with sufficient doubt to justify the grant of leave and, in addition, that substantial injustice would be done by leaving the decision unreversed …  The requirement that substantial injustice be shown is no more than a guideline for the exercise of what must necessarily be and remain a broad discretion to grant or withhold leave.  What is substantial injustice must depend on all the circumstances of the case." 

6. In Wing Luck Foods the Full Court emphasised (at 361) that:

   "It will not normally be sufficient that the decision appealed from is apparently wrong or attended with doubt.  Something more will need to be shown.  It may well be that in some cases it will be sufficient to show that there is a significant question of law to the considered.  In others it may be possible to point to some other feature which requires the consideration of this Court to avoid a substantial injustice if leave is not granted." 

7. In my view these various authorities govern the exercise of my discretion in the present case and require me to have regard to the length of the delay, the reason for the delay, the prospects of success of the proposed application for leave, and the extent of any prejudice which would be suffered by the respondent.  I should only conclude that the application for leave has some prospects of success if it has been shown that the decision of the Committee is wrong or attended with sufficient doubt, and that additionally there will be a substantial injustice if it is left unreversed. 

The applicant's prospects of success

1. It is not in issue that the applicant deliberately chose not to attend the hearing conducted by the Committee on 24 March 1999.  The reasons for this decision are set out in affidavits sworn by Mr Said (on 20 May and 15 September 1999) and by the applicant's solicitor, Mr E M Stanley (on 18 November 1999).  In essence those reasons have been summarised in the second, third and fourth of the proposed grounds of appeal referred to above. 

2. It is nevertheless clear that the applicant and its solicitor at all material times realised that the Committee would be making "findings on matters relating to workmanship".  In this regard it is also relevant to observe that the "important notes" (on the back of the notice of hearing) which Mr Said considers to have been misleading stated (inter alia): 

   -"If you do not attend the Committee will not have the benefit of hearing the full version of your side of the dispute … ."

   -"Generally, a complainant will present their case first.  They will tell their side of the dispute on oath and may be questioned.  They may call witnesses to give evidence.  The respondent may then present their case in much the same way … ." 

   -"When a decision is made written orders will be provided to both parties." 

   -"An application for a summons to witness should be made in writing to the Committee … ." 

3. In these circumstances, the applicant will face some obvious difficulties in persuading the Court that it reasonably believed that the Committee's findings would not be in some way binding.  Furthermore, with regard to the claimed misunderstanding that the findings would only be enforceable in a court of law, there is no assertion anywhere in the affidavits that the applicant intended to defend those matters in the Local Court.  There is reference only to an intention (at the material time) to "make a counterclaim in the Local Court".  All in all, the assertions made on behalf of the applicant in the affidavits are very perplexing. 

4. In Mr Said's second affidavit he raises issues of fact which are said to be the basis of a defence to the respondents' claims if there is ultimately a successful appeal.  Without going into all of the details of these issues, it seems to me that they do not address the primary findings of fact on which the Committee's decision was based.  In essence the Committee found that during a telephone conversation on 30 September 1998 and in correspondence dated 1 and 6 October 1998 the applicant repudiated its contract with the respondents.  The respondents in turn by facsimiles dated 1 and 7 October validly terminated the contract.  On the face of this correspondence, and in the absence of any alternative explanation being proffered, there can be no basis for questioning the findings as made by the Committee.  In this regard the contents of the applicant's letters speak for themselves. 

5. It follows in my view that regardless of the material that has come to light as a result of the present application, it cannot be reasonably argued that the Committee's decision was wrong or attended with sufficient doubt.  Even if all of the evidence before me had been presented to the Committee, the essential findings would almost certainly have been the same.  In these circumstances, and notwithstanding that the applicant acted as it did in reliance upon erroneous legal advice, it cannot be said that there will be substantial injustice if the Committee's decision is left unreversed. 

Conclusion

1. Given my above findings it is unnecessary to consider the issues arising from the delay in applying for leave to appeal and the extent which the respondent will be prejudiced if leave is granted.  For the reasons stated, the application for an extension of time in which to apply for leave to appeal must be dismissed.