Knight v Mackay
[2008] VSC 602
•22 December 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 6466 of 2008
| CHRISTOPHER KNIGHT | Plaintiff |
| v | |
| SYLVIA BEATRIZ MACKAY, CRAIG JAMES MACKAY and THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL | Defendants |
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JUDGE: | WILLIAMS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 December 2008 | |
DATE OF JUDGMENT: | 22 December 2008 | |
CASE MAY BE CITED AS: | Knight v Mackay and ors | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 602 | |
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APPEAL – Victorian Civil and Administrative Tribunal – Domestic Building dispute – Orders for damages and indemnity costs made in absence of builder - Refusal of application for review under s 120 Victorian Civil and Administrative Tribunal Act 1998 – Tribunal finding that no “reasonable excuse” for non attendance provided – Whether Tribunal erred in construction of term “reasonable excuse”.
ADMINSTRATIVE LAW – Relief in nature of certiorari – Whether denial of natural justice by failure to consider issue of notice and service – Discretionary considerations – Effect of unsuccessful application for review – Delay – Comparative hardship – Uncompleted domestic building works - Family living in shed on site
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C Hanson | Waters Timms Pty Ltd |
| For the Defendants | Mr A Kirby | Moray & Agnew |
TABLE OF CONTENTS
The proceeding before the Court.................................................................................................... 7
The appeal from the 6 May 2008 orders......................................................................................... 7
The amended notice of appeal.................................................................................................... 8
Conclusion..................................................................................................................................... 9
The application for review of the 14 March 2008 orders........................................................... 10
Should the time for bringing the application under O 56 be extended?............................ 10
Conclusion................................................................................................................................... 12
Should the relief be granted?.................................................................................................... 13
Conclusion................................................................................................................................... 15
HER HONOUR:
These proceedings arise in the context of a domestic building dispute between the plaintiff builder, Mr Knight, and the first and second defendants, Mrs and Mr Mackay. They were the parties to a written building contract dated 4 August 2005 under which Mr Knight agreed to construct a brick veneer dwelling on the Mackays’ land at 40 Finsbury Road, Devon Meadows, for a price of $297,000. Mr Knight’s address in the contract was stated to be “4 Lady Nelson Crt Corinella”.
The Mackays and their four children suffer from varying degrees of deafness. Mr Knight also suffers from a hearing difficulty. At the time of the building contract, Mr Mackay was conducting an earthworks business and Mr Knight’s evidence is that he was “handy” and agreed to carry out some of the building work himself in order to save money, with the result that they agreed a cheap “lockup stage if needed” price. Mrs Mackay receives a disability pension.
Mr Knight says that Mr Mackay told him that before he could proceed with the building, he needed to complete the sale of a property at Pearcedale. He said that he would buy a caravan for his family to live in on site whilst the house was being built. Between about January and October 2006, the Mackays and their four children did live in a caravan at the property. The children were then aged from about five to fourteen.
In about mid December 2005, according to Mr Knight, Mr Mackay told him that he was thinking of building a large shed at the property in which the family would live temporarily and which would be used as an office by him later. He would fund the shed building by Mr Knight raising invoices for the materials and providing him with the monies. This occurred and materials were provided and works done in the construction of the shed. The family has been living in the shed since about October 2006.
It is common ground that Mr Knight stopped work at the property in about May 2006. Mr Knight maintains that, towards the end of March 2006, he had become concerned about the amounts outstanding on his accounts for the shed materials. He states that Mr Mackay and he agreed that he would leave the site. He says that, some three months later, a person he thinks was a building inspector and a solicitor met him at the site and they discussed the state of the works. Mr Knight informed them of his concerns about the amounts remitted to Mr Mackay and booked up on account. He asserts that the others indicated surprise and said that they would raise the matter with Mr Mackay. Mr Knight maintains that he did not hear from them again or have any indication that the Mackays had instituted proceedings against him in the Domestic Building List at VCAT.
On 27 November 2007 the Mackays filed points of claim in a proceeding against Mr Knight in the Domestic Building List at VCAT. Ms Eleftheria Ritsa Carageorgos was the solicitor with the conduct of the VCAT proceeding.
VCAT advised the Mackays’ solicitors by a letter received on 20 December 2007 that their application had been posted to Mr Knight at 4 Lady Nelson Court, Corinella, (the address Ms Carageorgos had provided to it). The VCAT letter instructed the Mackays’ solicitors to contact Mr Knight to confirm that he had received the application and it advised that a directions hearing had been scheduled for 7 February 2008.
On 21 December 2007, Ms Carageorgos wrote to Mr Knight, also at the Corinella address, serving a quotation from another builder for the cost of completion of works to lockup stage, asking for confirmation of service of the application and advising of the 7 February 2008 directions hearing. The letter was not returned and she received no response to it.
The 7 February 2008 directions hearing went ahead. There was no appearance by Mr Knight or on his behalf. There is no evidence that either VCAT or the Mackays’ solicitors attempted to telephone him or contact him in any other way.
Mr Knight deposes that the Corinella address is his residential address, but that he also lives at Cannons Creek which is near Cranbourne, where he does much of his building work. He returns to Corinella where his family lives, at weekends. Mrs Knight periodically forwards business mail to 27 Rhur Street Dandenong South which has been his business address since about March 2007. Mrs Knight has sworn an affidavit to the effect that she does not recall receiving correspondence addressed to her husband from VCAT or the Mackays’ solicitors between December 2007 and March 2008.
Mr Knight is also involved in a geothermal heating and cooling business conducted by Energycore Australia Pty Ltd which is the lessee of the Dandenong South premises. Energycore employed an administrator, Ms Kuan, who took annual leave between 13 February 2008 and 3 March 2008 and who states that she does not recall receiving any correspondence from VCAT or the Mackays’ solicitors between December 2007 and March 2008.
A VCAT Senior Registrar wrote to the Mackays’ solicitors on 25 February 2008 advising them that Mr Knight had failed to comply with the 7 February 2008 directions that he file points of defence by 21 February 2008. The letter stated that any counterclaim was overdue and that the documents were required to be served immediately. The letter went on to state that costs might be ordered against a non- complying party at a compliance hearing at which the file would be listed. The letter stated that a copy of it had been sent to all parties.
On 26 February 2008, Ms Carageorgos sent a letter to VCAT confirming that her firm’s clients, the Mackays, were hearing impaired and that they had asked that two people be allowed to attend to assist them. Ms Carageorgos’ letter confirmed that a hearing date of 14 March 2008 had been fixed in the matter. She forwarded a copy of her letter to Mr Knight at the Corinella address.
On 4 March 2008, Ms Carageorgos enclosed a copy of an expert’s report to a letter “by way of service” to Mr Knight at the same address.
By a facsimile transmission on 12 March 2008, VCAT advised Ms Carageorgos that it had attempted to arrange for an independent sworn interpreter in Auslan, but that it had been unable to do so before 28 March 2008. It noted that one of the people attending might interpret, if she had relevant experience and was prepared to take the oath. The letter went on to state that the hearing would need to be adjourned if the Member did not consider the interpreting arrangements appropriate. The letter made no mention of a hearing date. It showed the facsimile number of the Mackays’ solicitors and mentioned Mr Knight as follows:
CC: Christopher Knight
Fax: Via Exp post
On 14 March 2008, a Senior Member of VCAT awarded the Mackays damages against Mr Knight in the total sum of $242,229, which included some $20,000 by way of general damages, and also made an order for indemnity costs against him, in his absence.
Mr Knight was called outside the hearing room. There is, however, no evidence of any attempt to contact him by telephone by VCAT or the Mackays’ solicitors. Ms Carageorgos deposes in this proceeding that Mr Knight had not previously appeared or communicated with her in the VCAT proceeding. Further, the written submissions of counsel for the Mackays supporting their application raised the issue of service before the Senior Member by stating that Mr Knight had not appeared in relation to the application nor filed any material. The submissions also asserted that Mr Knight had no defence to the claim and had therefore filed no points of defence. It is significant in all the circumstances that the Senior Member’s reasons for decision make no reference to any consideration by him of the issue of service of notice of the hearing upon Mr Knight or even of the question as to whether there had been any confirmation of service of notice of the 7 February 2008 directions hearing.
Ms Carageorgos wrote to Mr Knight by express post on 27 March 2008, advising him of the VCAT decision and demanding payment of the amounts ordered. The letter was not returned and Mr Knight telephoned Ms Carageorgos on the following day. He told her that he had just returned from the USA to find out about the decision. He said that he did not live at the Corinella address and that the mail he had been sent had been “sitting there”. He claimed to live at Ruhr Street Dandenong South. He said that he was in Tasmania in November or December 2007. He was advised to obtain legal advice.
Mr Knight wrote to VCAT on the same day. His letter stated that he had only just become aware of the dispute between himself and the Mackays. He said that he was “unfortunately, … only made aware of this 2 weeks ago by documentation being forwarded to my new address at 27 Ruhr Street Dandenong South.” He informed the Tribunal that he had been in America “through the month of January & February 2008”. His letter also referred to having rented a house in Ulverstone in Tasmania since June 2007 and to having been residing there. He requested a re‑hearing.
A Senior Registrar of VCAT then notified Mr Knight that he had 14 days to apply for a rehearing and forwarded a form of statutory declaration. Mr Knight completed the form, declaring on 3 April 2008 that mail had been forwarded to his workplace at the Dandenong South address and that staff had misplaced it.
Mr Knight was represented by counsel on 6 May 2008, before another Senior Member of VCAT for the hearing of his application for a review of the 14 March 2008 orders. He gave oral evidence in that application. The Senior Member determined that he did not have a “reasonable excuse” under s 120(4)(a) for his non–attendance on 14 March 2008, with the consequence that he was not able to proceed with his review application.
Some days later, on about 8 May 2008, Mr Knight and his son, Mr Damien Knight, located a small storage box in a shed at the Dandenong South property which contained an letter sent by express post from VCAT, addressed to Mr Knight at his Corinella address. They did not open the letter and forwarded it to Mr Knight’s former solicitors. The original sealed letter is an exhibit to Mr Knight’s affidavit. There is no evidence as to the letter’s contents and it is only the envelope which is tendered.
Mr Knight found more correspondence on about 16 May 2008 in the same shed at Dandenong South. This included a 19 December 2007 letter from VCAT advising of the 7 February 2008 directions hearing and the 21 December 2007 letter from the Mackays’ solicitor. Mr Knight said that he did not find any additional correspondence for the period up to 28 March 2008.
The proceeding before the Court
Mr Knight seeks relief in the nature of certiorari, quashing the 14 March orders, under s 3 of the Administrative Law Act 1978 or, alternatively, under O 56 of the Supreme Court (General Civil Procedure) Rules 2005. He alleges that he was denied natural justice by reason of procedural unfairness at the hearing.
Mr Knight also appeals on questions of law from the 6 May 2008 orders under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”). A Master granted him leave to appeal on 18 July 2008.
The appeal from the 6 May 2008 orders
I shall deal first with the appeal from the Senior Member’s decision under s 120 of the VCAT Act.
Section 120 is and was at all relevant times in the following form :
120. Re-opening an order on substantive grounds
(1) A person in respect of whom an order is made
may apply to the Tribunal for a review of the
order if the person did not appear and was not
represented at the hearing at which the order was
made.
(2) An application under sub-section (1) is to be made
in accordance with, and within the time limits
specified by, the rules.
(3) The rules may limit the number of times a person
may apply under this section in respect of the
same matter without obtaining the leave of the
Tribunal.
(4) The Tribunal may—
(a) hear and determine the application if it is
satisfied that the applicant had a reasonable
excuse for not attending or being represented
at the hearing; and
(b) if it thinks fit, order that the order be revoked
or varied.
(5) Nothing in Division 3 of Part 3 applies to a review
under this section.
It is common ground that s 120(4)(a) requires an applicant for an order under s 120 to first establish that they had a “reasonable excuse” for failing to attend the hearing where the impugned orders were made.
The amended notice of appeal
Mr Knight’s amended notice of appeal filed on 25 July 2008 identifies the questions of law in the appeal with which he has persisted as follows:
1.The appellant brings the appeal upon the following question of law:
What is the proper meaning of the phrase “had reasonable excuse”, as found in s 120 of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”)?
2.Should the phrase “had a reasonable excuse” as found in s 120(4) of the VCAT Act:
(a)be construed in light of all the circumstances surrounding the failure of an applicant to appear at or be represented at a hearing at which the order was made; and
(b)be considered a phrase of wide compass, and not be given a narrow meaning?
3.Did the Tribunal proceed upon an incorrect construction of s 120 of the VCAT Act?
4.Whether the meaning of a “reasonable excuse” for the purposes of s 120 of the VCAT Act is of the nature: The [applicant] went to hospital, the [applicant] had a car accident, there was one letter only “to the applicant” and the [applicant] did not receive it because it was “returned to the Tribunal” (“the formulation”).
5.Whether the formulation is too rigid and/or strict an interpretation.
Essentially, counsel for Mr Knight contends that the Senior Member misconstrued the expression “reasonable excuse” in s 120 (4)(a) of the VCAT Act by interpreting it too narrowly.
Mr Knight relies upon a passage from the transcript of the review application hearing to demonstrate that the Senior Member erred in her construction. Immediately before counsel for Mr Knight began to address the Tribunal on his behalf, the following exchange took place :
[Counsel]: The current situation, ma’am, is that Mr Knight is subject to an order of this Tribunal in the sum of $242,329, plus costs, on a matter in which he took no part whatsoever. Didn’t attend a directions hearing, didn’t put in points of defence, and most relevantly, he didn’t appear at the hearing of the matter. Now, it’s that situation, in my submission, that s 120 is inserted in the Act to address. [Senior Member]: No, s 120 is inserted into the Act to address situations like, the person went to hospital, the person had a car accident, there was one letter only, and the person did not receive it because it was returned to the Tribunal, but go ahead.
The learned Senior Member, however, subsequently gave reasons for her decision dated 17 June 2008. She specifically said at [14]:
14.I agree with [Counsel for the Respondent] that s 120 should be [construed] broadly. I have rarely declined to re‑open where there has been an application under s 120. Unfortunately, today is the day when I do so decline. I found Mr Knight’s evidence absolutely unbelievable, and I do not accept the truth of his statutory declaration. I do not accept that he has given a basis upon which he has a reasonable excuse for not being present at the hearing which took place on 14 March.
Counsel for Mr Knight argues that his contention that the Senior Member erroneously limited the ambit of “reasonable excuse” is borne out by her failure to find that Mr Knight had such an excuse, despite her failure to find that he knew of the 14 March hearing.
Conclusion
I am not persuaded by the argument that the Senior Member construed s 120(4)(a) narrowly, despite her statement to the effect that the provision should be construed broadly. The cited exchange between the learned Senior Member and counsel relied upon by Mr Knight does not persuade me to the contrary.
In any event, I consider the question whether Mr Knight’s circumstances fall within the relevant statutory description and constitute a “reasonable excuse” for his non‑appearance is a question of fact involving a value judgment on the evidence.[1] I am not persuaded that it was not open to the learned Senior Member to conclude that Mr Knight had no “reasonable excuse” for his non‑attendance on 14 March 2008.
[1]See S v Crimes Compensation Tribunal [1998] 1 VR 83 at 89 per Phillips JA.
I am not persuaded by counsel for Mr Knight’s argument that, once there is evidence that a person did not know about a hearing date, whether because they deliberately avoided finding out about it or because they were reckless in that regard or for any other reason, it would not be open to the Tribunal to find that they did not have a “reasonable excuse” under s 120(4)(a).
Counsel for Mr Knight relied upon the Court’s decision in Alesci v Salisbury[2] where Bongiorno J upheld an appeal from a VCAT decision dismissing an application under s 120 stating:
6.Section 120 is a section which is to be construed liberally. It will be difficult, I think, to put forward a case where a blameless non‑attending defendant would not be entitled to a review of the order made in his or her absence.
[2][2002] VSC 475.
In this case, the learned Senior Member did not find Mr Knight “blameless”, rather she rejected his account of the events leading up to his non‑attendance as “absolutely unbelievable”. The facts are distinguishable from those in Alesci.
The application for review of the 14 March 2008 orders
Should the time for bringing the application under O 56 be extended?
Mr Knight sought relief in the nature of certiorari quashing the original 14 March 2008 orders under s 3 of the Administrative Law Act and alternatively under O 56 of the Rules by the 2 June 2008originating motion. He does not press for relief under the Administrative Law Act because the requisite procedure under that legislation has not been followed within the mandatory time limits.
In order to proceed under O 56, Mr Knight must, however, establish the requisite “special circumstances” for a grant of extension of time under r 56.02 because the originating motion was not issued within 60 days of the order. Rule 56.02 is in the following form:
56.02 Time for commencement of proceeding
(1) A proceeding under this Order shall be
commenced within 60 days after the date when
grounds for the grant of the relief or remedy
claimed first arose.
(2) Where the relief or remedy claimed is in respect
of any judgment, order, conviction, determination
or proceeding, the date when the grounds for the
grant of the relief or remedy first arose shall be
taken to be the date of the judgment, order,
conviction, determination or proceeding.
(3) The Court shall not extend the time fixed by
paragraph (1) except in special circumstances.
It is clear from the authorities that what constitutes “special circumstances” under r 56.02(3) is to be determined in the circumstances of each case.[3]
[3]See: Lednar v Magistrates’ Court [2000] VSC 549 at [143] per Gillard J; Prencipe v Nisselle [1998] VSC 137.
Counsel for the Mackays resists the application for an extension of time. He refers to the fact that the Mackays were awarded general damages on the grounds that they were physically impaired and of limited financial means. He notes that the Senior Member recorded in his reasons that the Mackays had deaf children with other health problems and that they had all been forced to live in cramped and unsanitary conditions in a caravan and a shed on their property for a long time after Mr Knight stopped work on their house on 4 May 2006.
When ordering indemnity costs against the builder, the Senior Member referred to the couple’s vulnerability and Mr Knight’s “choice” to force them into litigation. Counsel argues that the Court should take these matters into account when considering whether there are the requisite “special circumstances” and more generally, in relation to the ultimate relief sought.
Conclusion
I am satisfied that the requisite “special circumstances” justifying an extension of time exist in this case. There are a number of circumstances relied upon by counsel for Mr Knight which I consider, in combination, can properly be described as “special”. First, and most significantly, the evidence does not satisfy me that Mr Knight was served with material notifying him in advance of the 14 March 2008 hearing date or that he knew of it or of the 7 February 2008 directions hearing or that the issue of service of notices or confirmation of their receipt was considered by the Tribunal before the orders were made.
Secondly, the Senior Member made an order against him for a significant amount of $242,229 by way of damages, which included some $20,000 by way of general damages, as well as an order for indemnity costs in a domestic building dispute and in his absence.
Thirdly, Mr Knight states that he learnt of the orders only on about 28 March, which is only some 65 days before he commenced the proceeding seeking judicial review. In the interim he had taken the course open to him under s 120 of the VCAT Act and sought a review of the decision. He commenced this proceeding almost four weeks after failing to persuade the Tribunal that he had a “reasonable excuse” for failing to appear.
Finally, there would be prejudice to Mr Knight in allowing the order to stand in circumstances in which his uncontradicted evidence is that he does not have the necessary funds to meet it and would have to sell properties, causing hardship to his wife and other co-owners. Whilst delay would cause further hardship to the Mackays, that hardship could be minimised by an appropriate award of interest if they are successful in their claim. In relation to the issue of the effects of delay, I bear it in mind that although Mr Knight stopped work in May 2006, it was not until November 2007 that the Mackays commenced the VCAT proceeding against him.
I will extend the time for the commencement of the proceeding under r 56.02 to 2 June 2008.
Should the relief be granted?
Counsel for Mr Knight asserts that Mr Knight was denied natural justice in the 14 March 2008 hearing. He cites the fact that the orders, made in Mr Knight’s absence, included orders for a substantial amount of damages and what counsel describes as extraordinary orders for general damages and indemnity costs. Counsel submits that there is no evidence that Mr Knight was aware of the VCAT proceeding, let alone that he had decided not to appear. He then argues that the Senior Member failed to satisfy himself that proper service had been effected and that Mr Knight did not propose to appear.
Counsel for Mr Knight argues that the Mackays’ claim contained material which was internally inconsistent and that Mr Knight had an arguable defence to some, if not all, of their claims. He also maintains that the materials indicate a lack of candour on their part at the hearing.
Counsel for the Mackays responds that Mr Knight was not entitled to relief by way of judicial review because of the alternative relief available under s 120 and s 148 of the VCAT Act. He relies upon Kuek v Victoria Legal Aid[4] where Phillips JA said:
In my opinion, this Court should now affirm that, unless there are indeed exceptional circumstances, a litigant may not raise for determination under O 56 – or at all events may not raise with any real chance of success – a matter or thing which is proper for determination on an appeal where that very litigant has a right of appeal under s 109 [Magistrates’ Court Act 1989].[5]
[4](2001) 3 VR 289.
[5](2001) 3 VR 289 at 293.
Counsel refers also to Perkins v Victorian Bar Inc[6] where Smith J said :
[17]It is reasonably clear, in my view, that the principle enunciated by Phillips JA in Kuek should guide the exercise of the discretionary power to dismiss the originating motion in this case as an abuse of process on the ground that, at its hearing, it will be dismissed because the plaintiff chose not to use the statutory appeal procedure.
[6](2007) VSC 70.
Counsel also cites Garde‑Wilson v Legal Services Board[7] where Nettle JA observed:
8.Further, as authority makes clear, the existence, and a fortiori the exercise, of a statutory right of appeal or review before a tribunal with jurisdiction to determine all questions of fact and law within the remit of the original decision maker is a powerful discretionary consideration against the grant of prerogative relief.
[7][2008] VSCA 43.
Relief was nevertheless granted in Garde-Wilson. Dodds‑Streeton JA delivered the leading judgment. Her Honour stated:
99.There is a discretion to refuse relief by way of judicial review. The opponent bears the onus of persuading the Court to exercise the discretion against the applicant for relief. There are some established grounds which might justify the exercise of the discretion to deny the relief. In particular, as his Honour recognised, the existence of an adequate alternative remedy is such a factor. The existence of an adequate alternative remedy is not, however, necessarily determinative. Circumstances might nevertheless indicate that judicial review should proceed.
100.One such factor is the involvement of an important legal question, which can only be determined finally by the Court. Another factor is that the original decision was, or may have been, attended by a breach of natural justice. In such circumstances, an applicant for judicial review may be entitled to a fair decision below, together with the full panoply of appellate recourse which would ordinarily apply. To deny judicial review to a plaintiff who did not obtain natural justice in relation to the original decision may be to deprive her of at least one level of appeal. Although the alternative tribunal may accord the plaintiff natural justice and afford in all other respects an adequate alternative remedy, a significant appellate option could be lost.
Counsel for the Mackays responds that the Court should assume that the Senior Member did address the issue of service before he made the orders against Mr Knight in his absence.
As far as the question of notification of the hearing is concerned, he refers to the evidence in the affidavits sworn by his instructing solicitor, Ms Carageorgos, deposing to the letters she sent to Mr Knight at his residential address without them being returned. Counsel urges the Court to infer that the principal registrar at VCAT complied with the obligation under s 99(1)(a) of the VCAT Act to notify Mr Knight of the hearing by post. Counsel further contends that the thrust of Mr Knight’s arguments to the Senior Member in the s 120 application and to the Court is that his affairs were in a mess and that he did not receive relevant documents; he says that Mr Knight has not raised the issue of service as such. Ultimately, he was not able to point to any evidence of the requisite notice having been given by VCAT.
I note that the VCAT transcript of the s 120 application hearing records the following exchange between counsel for Mr Knight and the Senior Member:
[Counsel]: And it seems from the material provided to me there is a letter from the Registrar to Mr Knight of that same date [7 February 2008]. And it sets it down for – those orders made at the directions hearing set it down for 14 march 2008, which is a fairly short period of time from the directions hearing. And they set it down for a proposed one day which seems somewhat odd in itself because clearly, if his proceeding were to be defended, it is going to take a number of days.
[Senior Member]: Let me tell you, in circumstances like this, when somebody doesn’t show for a directions hearing it’s not unusual to say, to mentally say, “Perhaps this is one of those cases where the respondent is not ever going to appear”. And so, the matter is set down for a single day in the expectation that they respondent will probably not appear but if they do that day is turned into a directions hearing instead.
[Counsel]: You have satisfied my curiosity.
Counsel for the Mackays, nevertheless, did not seek to contend that it was clear that Mr Knight had no arguable defence to the claim. Whilst arguing that Mr Knight had incorrectly suggested that there was a complicated dispute between the parties, counsel fairly conceded that there were some issues in contest, albeit he characterised them as being “around the edges on some of the figures”. Counsel rejected the allegations by counsel for Mr Knight that the Mackays were less than frank with the Tribunal.
Conclusion
I am satisfied that the 14 March 2008 VCAT orders should be quashed on the grounds that Mr Knight was denied natural justice because there is no evidence that the Senior Member addressed the issue as to whether or not VCAT had given Mr Knight notice of the hearing. The Senior Member’s reasons for his decision were only requested in July 2008. They are dated 17 July 2008 and the Senior Member notes that he had very little recollection of what happened at the hearing some four months earlier. It may be the case that the issue of notice to Mr Knight was considered by him and that he did not recall it or that he simply failed to mention it.
The fact that other letters were sent to Mr Knight’s residential address and were not returned does not persuade me that he was notified of the hearing so that he could have attended and presented his defence to the Mackays’ claim. A substantial order for damages was then made against him in his absence and he was subjected to an unusual order for costs calculated on an indemnity basis. I respectfully agree with what was said as to the importance of service in Wright v VCAT & Anor[8] :
117.One can not over-emphasise the importance of complying with the rules of natural justice and acting fairly. Except in the case of an interim injunction, the Tribunal must not proceed without notice against another party making findings and making orders and without giving that party an opportunity to be heard.
118.The Tribunal must, as a first step, where a party fails to attend, be satisfied that proper service has been effected on that person and that person does not propose to appear.
[8][2001] VSC 35.
I am not persuaded to infer that the Registrar complied with his obligation to give notice to Mr Knight under s 99 of the VCAT Act. I note in this regard that it seems to be implicit in Ms Carageorgos’ evidence to the effect that Mr Knight had not appeared in the VCAT proceeding or communicated with her, that she had not contacted him in any way other than by post, to try to confirm his receipt of the VCAT correspondence. Further, (although this is only a minor point), I consider the VCAT letter about the unavailability of an Auslan interpreter before 28 March 2008 to be capable of possibly misleading a recipient into thinking that the hearing may not take place as scheduled on 14 March 2008.
Mr Knight did make an application for review. He fell at the first hurdle, however, and because he did not persuade the Senior Member that he had a reasonable excuse for not attending, he was not permitted to make his application for a re-hearing. Notwithstanding that there is no suggestion that he was denied natural justice at that hearing, he should not be denied the opportunity to contest the original decision on the grounds that he was not accorded natural justice because he unsuccessfully sought to obtain an order for a re-hearing under s 120 or a right of appeal under s 148 of the VCAT Act. The existence of an alternative remedy is not conclusive in this case, just as it was held not to be in Garde-Wilson. The issue of natural justice at the hearing was not in a direct sense the subject of the s 120 application and the denial of natural justice is such that the existence of a right to appeal under s 148 should not result in Mr Knight being denied the alternative level of appeal in all the circumstances. I bear in mind that leave is required for an appeal under s 148 and that the time for that application had expired before 2 June 2008 when the originating motion was filed. The authority of Kuek does not mandate the refusal of relief.
Nor am I persuaded that the discretionary relief should be refused for any other reason. I am conscious of the unfortunate position of the Mackays and their children, but note the unchallenged submissions of counsel for Mr Knight to the effect that any delay could be compensated by appropriate orders for damages or interest. I also take it into account that there was a lengthy period of almost two years between Mr Knight ceasing to work and the matter reaching the hearing stage at VCAT.
As far as the utility of the relief is concerned, I am persuaded that there are issues to be tried and counsel for the Mackays fairly declined to argue that the situation was one in where it would be futile to quash the original order, because the evidence established that the Mackays would necessarily achieve the same result again.
I will grant the relief sought and make orders quashing the 14 March 2008 decision.
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