Jones v Dalcon Construction Pty Ltd

[2006] WASCA 205 (S)

JURISDICTION	:	SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :	THE COURT OF APPEAL (WA)
CITATION	:	JONES & ANOR -v- DALCON CONSTRUCTION PTY LTD & ANOR [2006] WASCA 205 (S)

CORAM : WHEELER JA

McLURE JA PULLIN JA

HEARD	: 11 MAY 2006
DELIVERED	: 10 OCTOBER 2006
SUPPLEMENTARY
DECISION	: 17 NOVEMBER 2006
FILE NO/S	:  FUL 7 of 2005
BETWEEN	: TREVOR JONES

CHRISTINE JONES

Appellants

AND

DALCON CONSTRUCTION PTY LTD
(ACN 009 239 589)

First Respondent

PHIL D FAIGEN

Second Respondent

Catchwords:

Costs - Suitors' Fund Act 1964 (WA) - Indemnity certificate

[2006] WASCA 205 (S)

Legislation:

Suitors' Fund Act 1964 (WA), s 10(1)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Appellants	:	Mr G M Abbott
First Respondent	:	Mr N W McKerracher QC & Ms S B Armstrong
Second Respondent	:	No appearance

Solicitors:

Appellants	:	Stephen Josland
First Respondent	:	Zilkens & Co
Second Respondent	:	No appearance

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

Richards v Faulls Pty Ltd [1971] WAR 129

Case(s) also cited:

Nil

[2006] WASCA 205 (S)

WHEELER JA

1. WHEELER JA: At delivery of judgment in this matter on 10 October 2006, the first respondent sought a certificate pursuant to s 10(1) of the Suitors' Fund Act 1964 (WA). Pursuant to leave granted at that time, the first respondent has now supported that application with a written outline of submissions.

2. Section 10(1) relevantly reads:

"(1) Where an appeal against the decision of a Court in any
proceedings -

(a)	to the Supreme Court;
...

on a question of law succeeds, the Supreme Court may ... grant to the respondent to the appeal ... an indemnity certificate in respect of that appeal."

3              I accept that the appellants were successful on a question of law, that

question being the proper construction of the contract between the appellants and the first respondent. The fact of success of the appellant on a question of law is a precondition to the grant of an indemnity certificate to the respondent. However, the question which then arises is whether the power which the fulfilment of that precondition prefers upon the Court, to grant a certificate, should be exercised.

4              The principles governing the exercise of the discretion are, as the

first respondent accepts, contained in Richards v Faulls Pty Ltd [1971] WAR 129, at 137 - 139. The discretion, as the Court pointed out in that case, is a discretion to grant, rather than a discretion to refuse. It is therefore necessary for the unsuccessful respondent to show some ground calling for the exercise of the discretion in the respondent's favour. It should be borne in mind, in considering what might call for the exercise of the discretion in that way, that while the intention of the Act is to relieve a litigant from the burden of costs in an appeal which has been lost because the Court below erred on a question of law, the purpose of the Act is neither to promote litigation nor to provide legal aid.

5              In Richards v Faulls, the Court considered that, in broad terms, the discretion might be exercised where there is a question of law which might reasonably be resolved in different ways, "so that in a sense the unsuccessful party may be thought to have suffered some 'misfortune' owing to a doubt about the correct rule of law to be applied" (at 138). I

[2006] WASCA 205 (S)

WHEELER JA
McLURE JA
PULLIN JA

accept that in the present case, the question of law might at least reasonably be resolved in different ways. The dissent of Pullin JA in the present case demonstrates that more than one view is open concerning the construction of the building contract.

6              However, the question identified in Richards gives rise to a broad assessment of the conduct of the case, the issues arising, and the role of the unsuccessful respondent. In the present case, the first respondent was the unsuccessful party to an arbitration, in which the Arbitrator resolved a number of questions of fact, unfavourably to the first respondent, and based upon a view of the law which the first respondent did not accept. It was the first respondent which chose to invoke the appellate process, in order to contend for a view of the Arbitrator's decision which was ultimately not upheld. Further, as all members of the Court noted in the present case, the first respondent was found by the Arbitrator to have wrongly claimed as variations matters which were not capable of being claimed as variations at all. The first respondent does not challenge that finding, and it was ultimately that conduct which precipitated the dispute, the arbitration, and the appeals. The "misfortune" in this case is one of which the first respondent may be regarded as substantially the author.

7              An additional matter to which the Court turned its attention in

Richards was the question of the degree to which the question of law involved was some question of general application, or was of a more "particular" nature. In one sense, there was involved in the present case an issue concerning the proper construction of a building contract which was, we were informed, in wide use. However, the primary contention of the appellant, and the contention which led to the appeal succeeding, rested upon a particular aspect of the first respondent's conduct in failing to reduce to writing certain matters which were claimed to be variations. This was not so much, then, a case involving a doubt about the "rule of law" which should be applied, but rather one which involved the application of well understood rules of law, not only to a particular contract, but to particular conduct.

1. I would therefore not grant the certificate.

2. McLURE JA: I agree with Wheeler JA.

3. PULLIN JA: Wheeler JA has set out the section which authorises the grant of a certificate under the Suitors' Fund Act 1964 (WA). Her Honour has also referred to Richards v Faulls Pty Ltd [1971] WAR 129 which states the principles which govern the grant of a certificate.

[2006] WASCA 205 (S)

PULLIN JA

11             In my opinion the question before this Court was one of general

importance. It would be of interest in the building industry for builders to know whether a builder is entitled to insist upon payment of a progress claim in circumstances where the owner raises a contention that part of the progress claim is in dispute. It would be of some significance to builders to know whether a builder may insist upon payment in full or whether it must wait for a determination of the dispute before taking action to terminate the contract due to non-payment on a progress certificate.

12             It is very common in the industry to see disputes about variation

claims and about whether they have been processed or authorised in accordance with the particular contract. It is true that the situation depends upon the wording of the particular contract but the contract here was one commonly used in the industry.

1. I would therefore grant the certificate.