Kang and R and D Regional Construction Pty Ltd; (Civil Dispute Appeal) - [2013] ACAT 24

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

KANG & R & D Regional Construction Pty Ltd
(Civil Dispute Appeal) [2013] ACAT 24
AA 13/02
Catchwords: CIVIL DISPUTE APPEAL – contract to build pergola – default judgment – setting aside of default judgment administratively – non compliance with tribunal order to obtain transcript – limits to tribunal’s powers in relation to non-regulatory matters – power to order payment to territory is not clear – whether the application to set aside default judgment is vexatious

List of Legislation: ACT Civil and Administrative Tribunal Act 2008
, ss. 32,

56, 74 & 79

List of Cases: Allesch v Maunz [2000] HCA 40; 203 CLR 172
The Legal Practitioner & Council of the Law Society of the ACT [2010] ACAT 19
Thornthwaite & Commissioner for Social Housing in the ACT [2012] ACAT 11

Tribunal: Mr W G Stefaniak, Appeal President

Date of Orders: 21 March 2013

Date of Reasons for Decision: 23 April 2013

AUSTRALIAN CAPITAL TERRITORY )
CIVIL AND ADMINISTRATIVE TRIBUNAL )
NO:AA 13/2, XD 12/1456
RE:ALICIA KANG
Appellant

AND:R & D REGIONAL CONSTRUCTION PTY LTD
Respondent

ORDER
Tribunal:Mr W.G. Stefaniak, Appeal President

Date of Order: 21 March 2013

The Tribunal Orders that:

The appeal is dismissed.
The original application is remitted to the general division of the ACAT for a hearing at 2.00pm on Tuesday 9 April 2013.
Parties are to file and serve any witness statements or extra documentation they wish to rely on by close of business Friday 5 April 2013.
A transcript of the proceedings will be sent to the Attorney General and the Law Society of the ACT
Signed..............................
Mr W.G. Stefaniak
Appeal President
REASONS FOR DECISION
This is an appeal from Registrar Thompson on 9 January 2013 to set aside a default judgment made on 2 November 2012 in the above matter.
The facts of the matter were somewhat confused until well into the appeal hearing when having heard from both parties under oath and following a detailed perusing of the file of the proceedings in the tribunal below I was satisfied of the following:
a)The appellant Alicia Kang contracted with the respondent to build a pergola.
b)She was not satisfied with the work and ultimately commenced proceedings to be repaid the $4,200.00 she had paid to the respondent.
c)After several attempts to file a proper debt application a correct debt application with the necessary amendments was filed on 28 September 2012.
d)On that day a letter was sent to the appellant (The applicant in the tribunal below) which became exhibit A in the appeal. A copy of that letter was not on the ACAT file. This letter indicated to the applicant that the application for a dispute would be served on the respondent by pre-paid post and it advised her of certain things, including a paragraph setting out what would occur if the respondent failed to respond. That paragraph read “if the respondent does not file a response form within 21 days after the service of the application, you may complete and file a default judgment application and obtain a judgment in your favour. You can find this form on our website at under applications/forms or contact the registry.” It went on to say “you may apply for a default judgment after the 29 October 2012”. The letter was dated 28 September 2012 and was signed by a Deputy Registrar.
e)On 2 November 2012, Alicia Kang, not having received notice of any response, duly filed an application for default judgment in the sum of $4,348.00 [the $4,200.00 claimed plus $21.00 out of pocket expense (being a company search) and her filing fee of $127.00 an amount totaling $4,348.00].
f)As a result of the filing of the above application, on the same day the tribunal issued a default judgment notice in which it ordered that the applicant recover against the respondent the amount of $4,348.00 and that the respondent pay $4,348.00 to the applicant. The order was dated Friday 2 November 2012 and signed by a Deputy Registrar.
g)Unbeknownst to ACAT and the applicant, on 22 October 2012 the respondent prepared and posted a response. The respondent included his own details but did not have the applicant’s name and details in his response. He stated in evidence, and I have no reason to disbelieve him, that he did this with his accountant at Lyneham and they looked up what they needed from the website. He attached a document to the response which stated that Alicia Kang had engaged him to install a suntuff corrugated roof to an existing pergola at the cost of $3,000.00, Alicia then changed her mind and wanted to use a different type of roofing, macrolon twin wall roofing system which was more expensive. He indicated that he had not previously used this product and told her that but he agreed to adhere to her request to use this new product at a cost of $4,000.00. He then went on to indicate that the new product was not suitable on a flat surface. There were leaks and water flowing over the edges and onto the front gutter. He explained that the flat structure was causing the problem but he did persevere to rectify it. Alicia was dissatisfied with the product. He said he would order another type of sheet structure, a product called sunturf. He did this at a further cost to him personally of $600.00. Again he stated that this was not to the satisfaction of the applicant. He stated he had a meeting on 22 June 2012 to discuss the matter with the applicant. He stated he did not agree to refund 100 percent of the money. He stated he had spent 25 hours of labour and money spent over and above the original contact agreed amount. He also stated that he had difficulties with the job including limited access to the property during business hours because the applicant wished to be present. He requested an opportunity to rectify the problems and indicated a willingness to do so. He indicated that the applicant did not want this to happen.
h)The respondent stated he posted off his response with a cheque for $256.00. I do not know why he posted a cheque. When asked, he indicated he thought he had to from what he got from the website. The response form clearly indicates “DO NOT SEND ANY MONEY WITH THIS RESPONSE OTHER THAN THE FILING FEE FOR ANY COUNTERCLAIM”. Perhaps he felt the money was for a counter claim for $600.00 but this is unclear as he did not appear to be claiming that actual amount when questioned.
i)He further stated that he would have received the application in early October 2012 and he responded within the 21 day period. Given that the application was sent just before the October long weekend I am satisfied that he most likely would have received it on or around 2 or 3 of October, assuming the postal service was efficient.
j)The appellant/applicant could not advance any reason as to why the respondent would not be telling the truth and there was nothing on file to indicate that the document and response he sent were ever received by ACAT.
k)Shortly after 2 November 2012 it would seem the respondent was served by post the default judgment. He went to ACAT. There is a date on an ACAT document of 20 November 2012. The document is a document which is addressed to ACAT which states “please find enclosed a copy of a Response to a Civil Dispute in relation to file number XD 12/1456 forwarded on 22 October 2012 yours faithfully Robin Rowly, Director R & D Regional Constructions Pty Ltd”. It is unsigned but date stamped 20 November 2012 by ACAT. This is consistent with the respondent indicating that once he did get the default judgment he then took steps to contact ACAT and file this document and also ask what he needed to do.
l)The respondent indicated that the staff at ACAT told him that he could seek to set aside the judgment. They went through suitable dates with him and settled on the 9 January 2013.
m)On 9 January 2013, Registrar Thompson dealt with the matter. By all accounts it was a very short matter. The appeal tribunal is not in a position to say exactly how long it would have taken as the appellant’s solicitor did not provide, pursuant to the directions hearing orders, a copy of the transcript. However, I am satisfied having questioned on oath both the respondent and the appellant that the matter would have gone from somewhere between 2 minutes to 5 minutes. It was very short.
n)It would seem from questioning the appellant and the respondent that Registrar Thompson had certain documents before him. He looked at those documents, the appellant’s solicitor, attempted to make some argument in opposing the setting aside of the default judgment and Mr Thompson either did not pay due attention to that argument, possibly didn’t listen to it and at any rate certainly did not accept it.
o)I felt the appellant had a better recollection of the sequence of events of 9 January 2013 than the respondent. I am satisfied that neither party could say exactly what Mr Thompson said although the respondent indicated that Mr Thompson said what he had before him was “fine” or words to that effect.
As I commented in the appeal hearing, a transcript would have certainly indicated with absolute clarity what was actually said. However, that was not supplied and I had to merely go on what was before the tribunal in terms of papers and also relying on what both parties said. Whilst I would not accept what the solicitor for the appellant said at the bar table in terms of what occurred before Mr Thompson because, (1) it is not appropriate; and (2) I was quite satisfied with the attempts made by the appellant herself and the respondent to fill me on what happened. I was certainly satisfied that it was a quick hearing and that Mr Thompson did have documents before him including the response by the respondent. I would accept the solicitor for the appellant’s contention that the Registrar did not read out the defence or indicate exactly what the defence was during the brief hearing. I would further accept that it appears likely that Mr Thompson would have perused the defence filed, whether before or during the hearing I cannot say, and the fact that he said words to the effect that “Its fine” would indicate that he was satisfied that it was a defence to the claim and would satisfy a setting aside of the default order.
On the same day the appellant appealed. The appeal appears to be written by her solicitor and signed by herself. The appeal stated that the application form was not completed, the Registrar had already made his mind up and was biased, the Registrar would not let the solicitor for the applicant make a submission thus denying his client natural justice, and the tribunal refused to even hear an application pursuant to section 32 of the ACT Civil and Administrative Tribunal Act 2008 and another appeal point which don’t appear to have been pressed. He concluded by appealing against the fact that the Registrar had been rude, dismissive and completely ignored his client’s case.
A directions hearing was held quickly afterwards on 24 January 2013. Amongst directions to file and serve various documents was a direction noting that the respondent’s documents filed with the tribunal and dated 17 January 2013 was accepted as part of their response. (This was a similar document to the one filed in the respondent’s response date stamped 20 November 2012.)
Direction number 1 stated: “1. The appellant is to file and serve any submissions she wishes to make and provide a written transcript of the proceedings of the 9 January 2013 to the ACT Civil and Administrative Tribunal and the Respondent by close of business 14 February 2013.”
There were further orders that the respondent were to file and serve any response by close of business Thursday 28 February 2013; and thirdly the appellant was to file and serve any further response by close of business Thursday 7 March 2013.
No transcript was received on the 14 February 2013 and indeed no transcript was sought at all. The appellant’s solicitor indicated, when asked why, that he simply did not have time. I did not accept that excuse. I also made comment during the hearing of the appeal that the document he did file on the 14 February 2013 which was his written submissions was also not sent as it should have been to the respondent. The respondent was self represented.
Both the rules governing the tribunal in relation to appeals and section 74 of the ACAT Act give the tribunal power to strike out an application by an applicant if that party fails without reasonable excuse to comply with a tribunal order. The rules also enable the tribunal to hear the matter without the benefit of the documents requested by the order. As there appeared to be no desire to adjourn the matter further to enable a transcript to be obtained, I proceeded to deal with the appeal.

Limited power of the tribunal

In the tribunal’s view, the powers available to a tribunal in non regulatory matters when a party fails to abide by a tribunal order are somewhat limited.
My powers would have been to (i) adjourn the matter further and order that the appellant pay costs for the respondent for the day, or (ii) dismiss the appeal, or (iii) continue hearing the matter without the benefit of the transcript which is what I did.
Section 74(1) of the ACAT Act provides that a party to an application must not without reasonable excuse fail to comply with a tribunal order. Section 74(2) states that if a party contravenes subsection (1) the tribunal may do one or more of the following: a) order the person to pay to the Territory a stated amount (not more than any amount that is prescribed by regulation); b) if the party is the applicant – strike out the application in relation to the dispute. The section then goes on to deal with occupational matters.
The powers of the tribunal in relation to occupational discipline are significant, for example, if a penalty is imposed on a liquor licensee of say $2,000 and the licensee does not pay, the licence will be suspended until such time as the person pays. There is a real deterrent factor there.
It is the view of this tribunal that there is no clear power in the ACAT Act to enable a tribunal to order a person to pay the territory a stated amount. The stated amounts of the regulations only deal with occupational discipline. The tribunal has in the past assumed a stated amount of up to $5,000.00. I am uncertain as to whether this has ever been used. I certainly have not.
I declined to order the appellant to pay anything. In my view she is merely doing or not doing what she was advised by her solicitor. At any rate I believe I did not have power to order a monetary penalty, If I had the power I would have imposed a monetary penalty of $500.00 on the solicitor for the appellant as a result of his totally inadequate reason for not supplying a transcript pursuant to the orders made. It is also of worthy to note, although of much lesser importance, that he had also not sent the documents he was meant to send to the respondent. He breached a further order of the Tribunal is not doing so.
I have referred the issue of section 74 of the ACAT Act to the Attorney General and I would urge the ACT Government to either amend subsection 74(2)(a) by putting in a stated amount (for example not more than $5,000.00); or insert a new rule clearly indicating that the tribunal can order a person who is representing a party or a party to pay a prescribed amount for failing to abide by a tribunal order.
This matter and, indeed, several other matters that I have heard highlighted the fact that a number of people and even a few practitioners do not take the tribunal seriously and feel that orders are discretionary and can be ignored at a whim. This is not conducive to the administration of justice and accordingly, I commend to the ACT Government and the professional bodies such as the Law Society and the Bar Association the need for clarity in relation to the tribunal’s powers to penalise parties who do not comply with orders. A simple penalty provision of up to $5,000.00 in my view would suffice here and enable it to be brought home to parties that an order of the tribunal is something that has to be obeyed and can only be ignored at the offending party’s peril.

Issues raised by the appellant

I turn now to the legal issues in relation to points raised by the appellant to the setting aside by Registrar Thompson of the default judgment. At the outset I reiterate that no transcript was available of what Registrar Thompson actually said on 9 January 2013 and so I am merely going from what the parties said. Registrar Thompson may have said certain things missed by the parties and any comments I make hereafter take that into account
One of the appellant’s points, appeal point 4, is that the tribunal refused to even hear an application pursuant to section 32 of the ACAT Act. Section 32 deals with frivolous and vexation applications, I cannot really comment without seeing the transcript as to what transpired here except this point, apart from in a roundabout way being touched on in submissions, did not seem to be pressed and no reference was made by the appellant’s solicitor to section 32, in his submissions.
I might say on the facts as found by me there is, in my view, nothing about the respondent’s application that was vexatious. I found that the respondent on the balance of probabilities attempted to post his response within the 21 days allowed. 22 October 2012 was a Monday. Australia Post indicates that matters posted within Canberra to a Canberra address should be received the following day, i.e the 23 October 2013. ACAT should have received the response on 23 October being a Tuesday. Even allowing for the vagaries at the postal system one could confidently assume that by 24 or 25 of October 2012 (being a Wednesday or a Thursday) ACAT should have received the response.
The notice to the applicant of 28 September 2012 indicated that she could apply for a default judgment after 29 October 2012, that is, one week after the respondent had posted it on 22 October 2012. ACAT should have received it by then. It was not until 2 November 2012 that the applicant quite properly turned up and sought default judgment, that is, some 9 working days after the response was posted.
The fact that ACAT did not receive the response is no reflection on the respondent. I cannot see there is any argument to be made that the respondent’s application to set aside is frivolous or vexatious. Here, we have a respondent who posts off within the period of time a response. It is not received. He next receives a default judgment. He quickly takes steps to set that aside. He attends the tribunal on 20 November 2012. The matter was set down for 9 January 2013. He attended and the matter is set aside.
I also find on the face of his application that it contained a defence and that he had a very good reason for not attending the tribunal, namely, that he sent off by post his response which was apparently never received by the tribunal.
The respondent put into evidence before me that he was taking up the matter with Australia Post to receive reimbursement for his $256.00 paid. It is worthy to note that the respondent also provided proof to the satisfaction to this tribunal that he in fact paid that amount (a receipt from Australia Post dated 22 October 2012.). It is clear that he need not have paid it but he was under the misapprehension that he should and that amount has obviously never been received by ACAT and he is quite right to now seek reimbursement from Australia Post.
Much was made by the appellant’s solicitor, that Registrar Thompson had misapplied section 56 of the ACAT Act in that section 56 of the ACAT Act provides, inter alia, that the tribunal may set aside a tribunal order if certain criteria is satisfied and if the Registrar is going to make such an order he needs to address his mind to the requirements of Section 56.

Section 56 simply provides as follows:
The tribunal may, by order—
(a)hear an application jointly with another application that arises from the same or similar facts; or
(b)make other orders with the consent of the parties to the application or as the tribunal considers necessary or convenient; or

(c)amend or set aside a tribunal order if—
(i)the order was made after hearing an application in the absence of a party; or
(ii)the order is in error in relation to an amount or the name or address of a party, and the tribunal proposes to amend or set aside the order only to correct the error; or
(iii)extraordinary circumstances make it appropriate to amend or set aside the order; or

(d)take any other action in relation to an application—
(i)that the tribunal considers appropriate; and
(ii)that is consistent with this Act or an authorising law.

The requirement of the Act are therefore very simple - the tribunal has a discretion to set aside an order if it was made after hearing an application in the absence of a party.

Setting aside ex parte judgments

The appellant’s solicitor is correct in relation to the general power of the tribunal to set aside an order that is made ex parte and, that is, a tribunal will set aside an order made exparte if the applicant has a good reason for not turning up and, secondly, if the applicant’s response indicates a defence to the matter that has merit. It does not have to be a brilliant defence. It does not have to, on the face of it, satisfy a tribunal that it has a good chance of being successful. It merely has to satisfy a tribunal that it warrants a hearing. It is not a particularly onerous test. It is a test that has been enshrined by the High Court in Allesch v Maunz [2000] HCA 40; 203 CLR 172. It has been adhered to by this tribunal in the recent appeal matter of Thornthwaite & Commissioner for Social Housing in the ACT [2012] ACAT 11.
Thornthwaite follows the high court and at paragraph 43 found as follows:
“That test is the standard test in terms of dealing with ex parte matters and applications to set aside ex parte matters. The first test is, is there a good reason why the applicant did not turn up at the original hearing? And secondly, if that is the case, is there then a reasonable case? Does the applicant actually have a reasonable case which indicates that the matter should be set aside and the case be heard?It goes on to say it is a two prong test and both parts need to succeed before a judgment can be set aside.”
It goes on to say it is a two prong test and both parties need to succeed before a judgment can be set aside.
In this case the respondent had a good excuse for not turning up. He simply did not receive the application. The first document he received was a default judgment, a default judgment issued by a Deputy Registrar of ACAT. The matter had not gone before a member, default judgments and civil claims like this do not. He then took steps to have it set aside.
Registrar Thompson had before him the documentation. I put aside at this stage whether Registrar Thompson did conduct the hearing as best he could. I am satisfied that he had, and even the appellant’s solicitor concedes in his written submissions that he appeared to have in front of him, the documentation, however inaccurately filled out, that stated a good reason why the respondent did not put in a response and further a defence to the claim that was deserving of hearing.
The test alluded to by the appellant’s solicitor is a test which is commonly used and as indicated in Thornthwaite is based on superior court decisions.
Whilst it is impossible for this tribunal to comment on exactly what was said before the Registrar as there was no transcript provided as ordered, it does seem that the Registrar dealt with the matter fairly quickly. It does seem from the evidence of the parties that he had something in front of him, namely, the documentation referred to above and, clearly to me, that he was satisfied with, firstly, the excuse given by the respondent for not responding, and, secondly, the fact that the respondent had a reasonable case that deserved to be heard. It would certainly have assisted, if perhaps he had read out the response by the respondent which was not terribly long (it was one page) and indicated that in his view it was a good defence and the matter should be heard.
It is also not clear for me whether the applicant was on 9 January 2013 absolutely certain as to what exactly the respondent had filed. It appears that the applicant’s solicitor had not received from ACAT the response that clearly had been copied and filed on 20 November 2012. This should have happened. The appellant’s solicitor indicated in his submission that was provided on 14 February 2013 that “the respondent provided a defence to the Registrar, the Registrar did not however read the defence in order to establish whether it is or is not a good defence. The respondent indicated that he had tried to lodge the defence earlier but for some reasons it did not reach ACAT.
I am therefore satisfied that as of 9 January 2013, the appellant’s solicitor was well aware that the respondent had attempted to lodge a defence and that also he had provided a defence to the Registrar. It is clear to me, as far as it can be from the evidence of the appellant and the respondent, that it appears unlikely that Registrar Thompson read out this defence. I think it would have been prudent for him to do so, although I cannot conclusively say whether he did or not because I do not have a transcript before me. However, it does seem to be unlikely and I am inclined to accept the evidence of both the appellant and the respondent in relation to that.
I would urge members in the general division of ACAT in situations like this to read out or summarise the defence made by a party so that the other party can be assured that it is a defence worth hearing and therefore the matter is being set aside for a good reason. I really cannot say more than that because again I do not have the benefit of the transcript and I may be doing Registrar Thompson an injustice, but I do think as a general rule that the above should occur. That makes it quite clear to all parties, firstly, there appears to be a good reason to set it aside in that the respondent or appellant has a good reason for not turning up; and secondly, that there is a defence worth hearing.

Default judgments as opposed to ex parte judgments

As I indicated to the parties at the appeal there is another legal issue involved in this case. The matter covered in Thornthwaite deals with when an application has clearly been decided by the Tribunal because it has actually been set down for hearing, the parties have been sent notices to attend a hearing, a party does not turn up, a judgment is made either dismissing the matter or accepting what the applicant says. It deals with ex parte judgment. Thornthwaite dealt with a housing eviction. It is common practice in this tribunal for some tenants not to turn up when the applicant is seeking a termination of the lease. The respondents only file documents after they have received notice that they are going to be evicted or in some occasions when the police turn up to evict them.
It is quite clear that in all those circumstances the original application has been decided by the tribunal. Thornthwaite goes into this matter in some detail. There are other appeals too where this is touched on.
There is a view in ACAT in relation to default judgments such as Ms Kang’s that an appeal such as hers cannot be a true appeal when one looks at section 79 unlike appeals from ex parte judgments such as in Thornthwaite.
Section 79 states:
(1)This section applies if—
(a) the tribunal has decided an application (the original application); and
(b) the original application was not an appeal from a decision by the tribunal.
Clearly, the original application in this matter was not an appeal from a decision by the tribunal. This is an appeal from an order to set aside a default judgment entered administratively. The application has been decided in the absence of any response by the respondent. It has been decided by a Deputy Registrar upon proper application for default judgment on 2 November 2012 by the applicant. It is not like the ex parte judgment in the Thornthwaite matter where a party did not turn up, evidence was taken and the matter was dealt with in the absence of the party, thus deciding the matter.
This matter has not been decided, it has not gone before a member and no evidence to substantiate the application has been taken. I believe this is the first appeal in relation to a matter such as this, where an appellant who was an applicant who has received a default judgment which then has been set aside has appealed the matter. There is a very strong case to say that the tribunal has not decided an application. It is the tribunal registry, following administrative procedures when a response is not forthcoming that issued a default judgment.
I accept the argument that this is a matter where the original application has not actually been decided for the reasons stated above. In such instance The Legal Practitioner & Council of the Law Society of the ACT [2010] ACAT 19, decided on the 31 March 2010 applies.
In that matter, the legal practitioner appealed where a finding had been made against him of unprofessional conduct, but prior to the original tribunal hearing argument as to penalty. His appeal was rejected as incompetent. That authority cites the various authorities about interlocutory appeals. The only chance an interlocutory appeal would really have is if the appeal showed that the person hearing it at the tribunal hearing was biased or for some other reasons should not actually hear it. In such instances, a new tribunal would then be established to deal with the substantive matter if the appeal on the grounds of bias etc succeeded.
Registrar Thompson merely decided this appeal it seems on the papers, after hearing some argument albeit in a perfunctory way. Even if he was biased (and there is no evidence of that) it still would not matter as, firstly, that matter was merely set down for a hearing on the merits and, secondly, the fact of the case clearly indicted the respondent had a good reason for not responding in time and had a case that should be heard and, thirdly, he would not be hearing the case.
I can find no legal error in what Registrar Thompson did because of the nature of this particular appeal as I find that section 79(1)(a) is not satisfied. I also find that even if I am wrong there, clearly there was a good excuse for a response not being received in time and a defence lodged by the respondent that deserved to be heard.
Accordingly, the appeal is dismissed and the matter is remitted to the general division of the ACAT for a substantive hearing.
………………………………..
W.G Stefaniak – Appeal President

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A

FILE NUMBER:	AA 13/02 , XD 12/1456
PARTIES, APPLICANT:	Alicia Kang
PARTIES, RESPONDENT:	R & D Regional Constructions Pty Ltd
COUNSEL APPEARING, APPLICANT
COUNSEL APPEARING, RESPONDENT
SOLICITORS FOR APPLICANT	Mr H. Ford, Solicitor
SOLICITORS FOR RESPONDENT
TRIBUNAL MEMBERS:	W.G Stefaniak, Appeal President
DATES OF HEARING:	21 March 2013
PLACE OF HEARING:	ACAT CANBERRA

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS: