Khoury v Kassim

[1999] NSWSC 762

CITATION:	Khoury v Kassim [1999] NSWSC 762
CURRENT JURISDICTION:	Administrative Law
FILE NUMBER(S):	30103 of 1998
HEARING DATE(S):	26 July 1999
JUDGMENT DATE:	26 July 1999
PARTIES :	Michael Khoury & Ors v Malek Kassim trading as Kassim Constructions & Anor
JUDGMENT OF:	Carruthers AJ at 1-27

COUNSEL :	Mr McCluskey for the plaintiffs Z. Naef for the first defendant Mr Singleton for the second defendant
SOLICITORS:	Photios Vouroudis & Co for the plaintiffs Naef & Associates for the first defendant Mr Singleton, I.V. Knight, Crown Solicitor for the second defendant
CATCHWORDS:	Decision and order of referee of a consumer claims tribunal quashed for failure to give a ruling after jurisdiction of tribunal disputed - whether plaintiff entitled to order for costs against the referee.
ACTS CITED:	Consumer Claims Tribunals Act 1987 (this Act was repealed by the Consumer Claims Act 1998 as from 1.3.99)
CASES CITED:	State Rail Authority of New South Wales v Consumer Claims Tribunal & Ors (1988) 14 NSWLR 473 ex parte Blume, re Osborn (1958) S.R. (NSW) 334 at 339
DECISION:	Refer paras 26 and 27

- 12 -

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

CORAM : CARRUTHERS AJ

MONDAY, 26 JULY 1999

030103/98- MICHAEL KHOURY & ORS v MALEK KASSIM- T/AS KASSIM CONSTRUCTIONS & ANOR

JUDGMENT

1 HIS HONOUR: When I delivered judgment in this matter on 20 July 1999, I fixed today for the purpose of hearing argument on the question of costs. The argument has been an interesting one and although I would be able to express my views in a more lucid fashion if I were to deal with the matter by way of a reserved judgment, there is more than one reason why the matter should be dealt with now in an ex tempore fashion.
2 It is first necessary to trace a little of the background of this matter. By these proceedings the plaintiffs, Michael Khoury, Mary Khoury and David Khoury sought prerogative relief against the first defendant, Malek Kassim trading as Kassim Constructions and the second defendant whom they named in the summons as "Consumer Claims Tribunal".
3 The first defendant carries on business as a carpenter and the proceedings in the consumer claims tribunal arose out of disputes between him and the plaintiffs in relation to certain work carried out at the residence in which the plaintiffs live.
4 When Mr Kassim commenced proceedings in the tribunal he named each of the three plaintiffs as respondents to his claim. Mr George Vardas was appointed referee and the hearing was conducted over four separate days.
5 In my judgment dated 20 July 1999, I quashed the decision handed down by Mr Vardas on 24 August 1998 on the ground that the plaintiffs had been denied natural justice. There were two points involved here as I found. Firstly, that although two of the plaintiffs, Michael and David Khoury had objected to the jurisdiction of the tribunal, the referee failed to rule upon the matter as he was required to do under s 26 of the Consumer Claims Tribunals Act 1987, to which I shall hereinafter refer as “the Act”.
6 The second basis was perhaps an unusual point. Rather reluctantly, as I held, the plaintiffs proceeded with a cross-claim before the tribunal. I say “reluctantly” because they made it clear on a number of occasions to the referee that they wished to proceed with their cross-claim in the Local Court. However, as Mr Kassim was adamant that his claim was to proceed before the tribunal and the plaintiffs did not wish to be disputing with Mr Kassim in two jurisdictions, they reluctantly stayed in the tribunal so far as their cross-claim was concerned.
7 On 20 November 1997 the referee reserved his decision. On 8 July 1998 the registrar of the Consumer Claims Tribunals wrote to each of the plaintiffs and Mr Kassim stating, inter alia, that as Mr Vardas was overseas and his return date was unknown, their matter had been listed before another referee for rehearing. The registrar attached to this letter a fresh hearing notice specifying a hearing date of 4 August 1998.
8 The plaintiffs were unhappy about this and instructed their solicitors to write to the registrar expressing concern about the costs which they had already incurred and stating that they objected to the matter proceeding to a rehearing, that their cross-claim exceeded the jurisdiction of the tribunal which was $25,000 and that they intended to initiate civil proceedings in the Local Court at Burwood. The letter concluded, "Kindly confirm that the hearing date of 4 August 1998 is now vacated". The registrar did not reply to that letter from the plaintiffs’ solicitors but, thereafter, forwarded a document entitled "Notice of order" to the various plaintiffs stating: "At Hurstville on 24 August 1998 the following reserved decision was made: I order that the respondents pay to the claimant the sum of $7,500 within one month". It is not necessary to refer to the detail of the reserved decision except to note that there was an award in favour of Mr Kassim (covering both the claim and cross-claim) in the sum of $7,500.
9 The plaintiffs were dismayed with this result and commenced proceedings in this Court, by summons dated 15 October 1998, seeking to have the decision of Mr Vardas quashed.
10 I held that in addition to the failure to rule upon jurisdiction being a denial of natural justice, there was a failure to afford natural justice to the plaintiffs by the registrar declining or failing to respond adequately to the solicitor's letter to which I have referred, and, in the circumstances, the plaintiffs were presented with an adverse decision of doubtful validity. My judgment explains why I was of the view that the decision of the referee was of doubtful validity and I need not repeat those reasons here.
11 When the matter came before me for hearing this morning, Mr McCluskey of counsel appeared for the plaintiffs, Mr Naef appeared for the first defendant and Mr Singleton appeared for the second defendant, described, as I have said, Consumer Claims Tribunal.

It is to be noted that, relevantly, the notice of appearance filed for the second defendant is in the following terms:
"The second defendant Consumer Claims Tribunal, level 7 Stocklands House, 175 Castlereagh Street, Sydney appears and submits to the orders of the Court save as to costs",

The address for service was given as that of Mr I.V. Knight, the State Crown Solicitor who filed the notice of appearance. The notice of appearance gave rise to an interesting debate in this Court.

12 Mr Singleton submitted that there is no legal entity, the Consumer Claims Tribunal, capable of being sued and that in fact the Crown Solicitor's appearance was for Mr George Vardas who was, for the purposes of this litigation, the Consumer Claims Tribunal. I might add for the sake of good order that, strictly speaking, Mr Vardas was the building disputes tribunal but nothing really turns on that, and I shall continue to refer to the Consumer Claims Tribunal. Mr Singleton submitted that to refer to the Consumers Claims Tribunal instead of Mr Vardas in the appearance was simply a matter of description and not substance.
13 Mr McCluskey submitted that I should order the second defendant to pay the costs of all parties of the proceedings because it was as a consequence of the combined fault of the referee and the administration of the tribunal that the decision of the referee had to be quashed.

Mr Naef made the same submissions in relation to the first defendant's costs.

14 Mr McCluskey and Mr Naef submitted that, on the true construction of the Act, there was an entity designated the Consumer Claims Tribunal and it was open to this Court to make a costs order against it. As I have already intimated, Mr Singleton put a contrary submission I should also note that Mr Singleton also submitted that no order could be made against Mr Vardas because of the immunity afforded to him by the provisions of s 45 of the Act, which I set out hereunder:

"45 Protection of things done under this Act
Except as expressly provided by this Act, neither the registrar, a deputy registrar, a referee, claimant, supplier nor any other person is liable in any legal proceeding on account of:
(a) any proceedings, publication or other thing:
(i) taken, made or done under the authority of this Act or the regulations, or
(ii) taken, made or done in good faith under the purported authority of this Act or the regulations, or
(b) any act or thing that in good faith has been omitted to be done in respect of the administration of this Act or the regulations."

15 It seems to me, having carefully listened to the submissions by the parties, that Mr Singleton's submission is the correct one. It seems that the structure of the Act is that each consumer claims tribunal is in fact an ad hoc tribunal and that there is no legal entity or corporation designated Consumer Claims Tribunal which could sue in its own name or be sued in its own name or, ex hypothesi, against which a costs order could be made. Section 3 (Definitions) defines “referee” to mean a “person who is holding office under this Act as a referee of consumer claims tribunals”. Section 3 defines “tribunal” to mean “a consumer claims tribunal constituted under this Act”. Section 5 deals with the “Constitution of tribunals”: subsection (1) provides that "A tribunal is constituted by a referee sitting alone". Subsection (2) provides "The senior referee may constitute a tribunal to hear and determine consumer claims anywhere in New South Wales". Section 8 is concerned with the setting up of the office of registrar, deputy registrars and staff of tribunals. Section 12, on which counsel for the plaintiffs and the solicitor for the first defendant rely, deals with the immunity of a tribunal from judicial review except in the circumstances set out in subsection (2) of s 12.
16 Section 12 need not be set out verbatim here but it is to be noted that it refers to claims being heard and determined by “a tribunal”, and rulings being given by “a tribunal” and orders being made by “a tribunal”. However, I am not satisfied that the terminology of s 12 is sufficient to undermine the effect of the early provisions of the Act which are directed, as I read them, only to establishing ad hoc tribunals, and the persons appointed to administer the work of the tribunals are appointed to assist and administer each ad hoc tribunal as it comes into existence. And of course there is no provision in the Act setting up a separate legal entity which is stated to be capable of suing or being sued.
17 It is convenient to note at this time that I granted leave to Mr Singleton to file in court an affidavit solely relevant, he submitted, to the question of costs. Realistically, it seems to me that the material contained in such affidavit does not have any significant bearing on the question whether a costs order should be made against the second defendant or whether it is open to the Court to make one in law or not. Although I must add, parenthetically, that the affidavit contains documentation of the tribunal which was not tendered before me at the hearing, which might be thought to provide additional support for the view which I expressed in my judgment that the decision of Mr Vardas was of doubtful validity, However, that is not a matter of immediate concern.
18 I have found s 45 to be difficult to construe. One wonders, for example, why it includes (if its ambit is as wide as suggested by Mr Singleton) a "claimant" and a “supplier”". I have some doubt whether the referee's omission to rule upon jurisdiction would necessarily fall within the strict words of the section. One must bear in mind that because of its purported exculpation of certain persons from liability (subject to the exercise of good faith) it must be construed strictly. However, the construction of s 45 has not been fully debated before me.
19 Mr Singleton submitted that if I were not satisfied that Mr Vardas (whom he submits is the only person against whom any costs orders could be made) is entitled to the statutory protection afforded by s 45 then, nevertheless, it would be inappropriate to make a costs order against him under the general law. Mr Singleton drew my attention to the judgment of the Court of Appeal (Hope, Samuels and Clarke JJA) in State Rail Authority of New South Wales v Consumer Claims Tribunal & Ors (1988) 14 NSWLR 473 which is authority for the proposition that a consumer claims tribunal is a court exercising judicial power with regard to disputes before it.
20 In the light of that authority, and other submissions, Mr Singleton has persuaded me that the same common law principles which apply to magistrates are applicable to referees exercising jurisdiction as a consumer claims tribunal, insofar as the question of whether they are amenable to orders for costs or not.
21 The position of magistrates is conveniently set out in the judgment of the Full Court in ex parte Blume, re Osborn (1958) S. R. (NSW) 334 at 339, where the Court said:

"If misconduct is charged against a magistrate he is entitled to appear but even where prohibition is ordered an order for costs is not ordinarily made against him unless there is a clear case of serious misconduct: Ex parte Cox (1896) 12 W.N. (N.S.W.) 172. The rule has been stated that the magistrate must have been perverse or guilty of corruption or gross ignorance: Re Starr (1859) 12 W.N. (N.S.W.) 172 (note). But even if he falls into what the Court characterized as an astonishing blunder, he does not necessarily act perversely: Ex parte Vincent (1900) 16 W.N. (N.S.W.) 215.”

22 There are of course powerful policy considerations which would persuade one that such principles should be applied to referees exercising the jurisdiction of consumer claims tribunals. They are conducting difficult and important judicial work and as a matter of principle they should be immune from orders for costs unless they have failed to comply with their obligations to the extent explained in ex parte Blume. The omission by the referee in the instant case to rule upon jurisdiction, as he was required to do under the Act, could not, upon the evidence so far as is available to me and upon which I based my judgment, justify a finding that he acted perversely or as a consequence of gross ignorance or that he committed an astonishing blunder.
23 Thus having given the matter consideration in light of competing the submissions that have been put to me, I reject the application on behalf of the plaintiffs and the first defendant for orders against Mr Vardas who is, I am satisfied, the person (and I use that word in its strict legal term) in respect of whom the Crown Solicitor filed the notice of appearance. There was a procedural and administrative irregularity in the circumstances leading up to the delivery of what I have referred to as Mr Vardas's decision and order of doubtful validity. The registrar must, if I may say so, without meaning any disrespect or criticism, accept responsibility for that aspect of the plaintiff's case in this Court. However, no proceedings have been brought against the registrar and indeed, on the face of it, one would consider in any event that the registrar would be entitled to the immunity provided by s 45 despite the difficulties of construction involved in that section.
24 As I said during the course of the original hearing of this matter, it is most unfortunate that bearing in mind the relatively small amount of money in dispute, so far as the jurisdiction of this Court is concerned, that the matter has reached this Court. Further that having reached this Court the parties were still unable during the course of the hearing to reach some compromise of their dispute. Now the position is exacerbated by the fact that an order for costs has to be made.
25 In light of the views which I have expressed in relation to the second defendant's position, the only alternative is to order that the first defendant pay the plaintiffs’ costs of the proceedings. That would involve the normal principle that costs follow the event. Reasonably, Mr Singleton has indicated to the Court that the Crown Solicitor does not seek an order for costs of the day; that has made the burden on the parties easier. I think in all the circumstances however, that I should order that each party pay their own costs of today. That does impose some burden upon the plaintiffs but nevertheless they have been unsuccessful in persuading me that the second defendant should pay their costs and they have had the benefit of that argument.
26 In summary therefore, so far as the proceedings generally are concerned, I order the first defendant to pay the plaintiff's costs. So far as the costs of to-day are concerned I order each parties to pay their own costs.
27 The costs orders which I have just made are of course subject to the order for costs made by Dunford J on 8 December 1998 that the plaintiffs pay the first defendant's costs of that day. I respectfully confirm the order which Dunford J made on that occasion.

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Last Modified: 07/29/1999