Lorena Severi t/as Lorena Severi Beaute v Double Bay Newspapers Pty Limited

[2007] NSWSC 1132

CITATION:	Lorena Severi trading as Lorena Severi Beaute v Double Bay Newspapers Pty Limited & Ors [2007] NSWSC 1132
HEARING DATE(S):	11 October 2007
JUDGMENT DATE :	11 October 2007
JUDGMENT OF:	Harrison J
DECISION:	Plaintiff's summons dismissed with costs.
CATCHWORDS:	APPEAL from magistrate - Local Courts Act - failure to attend arbitration - award made in absence of party - no application made for rehearing within time - application for rehearing refused by magistrate - whether denial of natural justice
LEGISLATION CITED:	Civil Procedure Act 2005 - ss 40, 41, 43 Local Courts Act 1982 - s 73 Local Courts (Civil Claims) Act 1970 - ss 18, 21H Supreme Court Act 1970 - s 75A Uniform Civil Procedure Rules - r 50.14
CASES CITED:	Adair v Morahan (1986) 5 NSWLR 147 El Ali v GIO of New South Wales (1988) 15 NSWLR 303 Jackson v Sterling Industries Limited (1987) 162 CLR 612 Majetic v Brough (1986) 5 NSWLR 393
PARTIES:	Lorena Severi Beaute (Plaintiff) Double Bay Newspapers Pty Limited (First defendant) General Newspapers Pty Limited (Second defendant) Suburban Publications Pty Limited t/as FPC Magazines (Third defendant)
FILE NUMBER(S):	SC 12807 of 2007
COUNSEL:	G P George (Defendants)
SOLICITORS:	Youth and Enterprise Legal Centre (Plaintiff) David R Purvis & Co (Defendants)
LOWER COURT JURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	71812/05
LOWER COURT JUDICIAL OFFICER :	Lulham DCM
LOWER COURT DATE OF DECISION:	10 May 2007

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HARRISON J

11 October 2007

12807 of 2007 Lorena Severi t/as Lorena Severi Beaute v Double Bay Newspapers Pty Limited & Ors

JUDGMENT

1 HARRISON J: The defendants sued the plaintiff in the Local Court for the recovery of the balance of moneys owing pursuant to a contract. The contract was made on or about 31 August 2004. The plaintiff purchased advertising space in magazines published by the defendants. The total contract price was $51,480 of which the plaintiff paid all but $10,130. The matter came before Arbitrator Armstrong on 7 November 2006. There was no appearance on behalf of the plaintiff. Following attempts to locate her the arbitrator proceeded to hear the matter in her absence. Arbitrator Armstrong found in favour of the present defendants and gave judgment for them in the amount claimed plus costs.

2 The Local Court received the arbitrator's award on 8 November 2007. The evidence does not disclose with precision the date upon which the plaintiff received notice of the award but no suggestion is made before me that she applied for a rehearing within 28 days after it was sent to the parties. That period is important for reasons that will shortly emerge.

3 On 3 April 2007 the plaintiff filed a notice of motion in the Local Court together with an affidavit sworn by her on 30 March 2007 in support of an application for a rehearing and for an order that the time for applying for a rehearing be extended until 14 April 2007.

4 On 10 May 2007 his Honour Magistrate Lulham dismissed the plaintiff's notice of motion with costs. There is no transcript of his Honour's reasons for judgment or of the proceedings before him presently available. In those circumstances the plaintiff could not comply with rule 50.14. Notwithstanding that fact, neither the plaintiff nor the defendants applied to have the proceedings before me adjourned until that transcript became available.

5 The plaintiff applied to this Court by summons filed on 5 June 2007 appealing against the decision of his Honour Magistrate Lulham. The present proceedings come before me pursuant to s 73 of the Local Courts Act 1982. Subsection (1) is in the following terms:

(1) A party to proceedings under this Part who is dissatisfied with the judgment or order of a Court sitting in its General Division may appeal to the Supreme Court against the judgment or order, but only as being erroneous in point of law.

6 In accordance with the Civil Procedure Act 2005, ("the Act") an award of an arbitrator in the Local Court is taken to be a judgment of the court. Section 40 of the Act is in the following terms:

40. Subject to section 41 Division 3, an award is final and conclusive, and is taken to be a judgment of the referring court:


(a) if it is expressed to be made by consent of all the parties, on the date on which it is received by the referring court, or

(b) in any other case, at the expiry of 28 days after it is sent to all of the parties.

7 Two other provisions of the Act should be noted. Section 41 of the Act provides as follows:

41(1) No relief lies:

(a) under section 69 or 101 of the Supreme Court Act 1970, or


(b) by way of declaratory judgment or order, or

(c) by way of injunction, or

(d) …

(e) under section 73 or 74 of the Local Courts Act 1982, in relation to proceedings under this Act on referred proceedings.

(2) Subsection (1) does not apply if the relief is sought on the ground of a lack of jurisdiction or a denial of natural justice.

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43(1) The referring court must order a rehearing of proceedings the subject of an award if an application for hearing is made before the award takes effect.

(2) …

(3) An order for rehearing need not be made if it appears to the court that the applicant failed to attend a hearing before an arbitrator without good reason.

(4) …

8 In her affidavit sworn 30 March 2007 the plaintiff deposed to the following matters:

"8. We did not attend the Arbitration hearing because my husband and I cannot speak, read or write fluent English. Mu husband and I did not understand the process of Arbitration and or anything in relation to Arbitration. In addition we thought our solicitor would be attending the Arbitration.

9. After carefully reading the reasons handed down by the Arbitrator and having it explained to me by the Youth and Enterprise Legal Centre, I feel disadvantaged because neither I nor anybody was present at the arbitration to provide evidence on my behalf. Annexed to this affidavit and marked with the letter C is a true copy of the Arbitrator's decision with reasons.

10. Due to my poor English I truly did not understand the process of Arbitration and believed that my previous solicitor was attending the Arbitration."

9 It is submitted on behalf of the plaintiff that the learned Magistrate fell into error to the extent that he interpreted s 40 as wholly foreclosing on his discretion to grant the plaintiff's application before him. It was not in dispute before him and it remains uncontroversial before me that the plaintiff did not make an application for a rehearing pursuant to s 43(1) of the Act before the award of the arbitrator took effect. It is also not in dispute that the award of the arbitrator took effect at the expiry of 28 days after it was sent to all of the parties in accordance with s 40(b).

10 The qualified stipulation that the award is final and conclusive indicates an intention to preclude any right of appeal in relation to the award; see Adair v Morahan (1986) 5 NSWLR 147. That intention is made unambiguously effective by the exclusion of the supervisory or appellate jurisdiction of this Court. Section 41(2) of the Act permits challenges to the arbitration proceedings on the basis of either lack of jurisdiction or denial of natural justice. Other sections of the Act specifically provide for rehearing of proceedings determined by an arbitrator. Furthermore, the finality provided for in s 40 applies to the award itself rather than to any judgment to which it gives rise. By analogy with similar wording in ss 18 and 21(H) of the Local Courts (Civil Claims) Act 1970, s 40 would not preclude the exercise of a statutory power to set aside judgments for "sufficient cause"; see Majetic v Brough (1986) 5 NSWLR 393. A similar interpretation of the present section would attract the powers in the rules to set aside or vary judgments.

11 In El Ali v GIO of New South Wales (1988) 15 NSWLR 303 at 315 Clarke JA said:

"The clear thrust of the appellants' submission is that the terms of s 18 of the Act disclose a legislative intent to restrict applications, which have the drastic effect of setting awards at nought, to cases in which an application is made within the strict time-limit. This argument would have much to recommend it if the legislature had fixed the period of twenty-eight days in the District Court Act , s 63(a) there would then be disclosed an intention to fix an inflexible period which was not alterable under the District Court Rules , Pt 3 r2."

12 Counsel for the defendants also referred me to Jackson v Sterling Industries Limited (1987) 162 CLR 612 at 638.

13 In my opinion the final and conclusive nature of the arbitrator's award did not prevent an application by the plaintiff to the referring court where the relief sought was a challenge to the judgment made on the ground of an alleged denial of natural justice. Although the plaintiff's notice of motion did not in terms suggest that a denial of natural justice underpinned the application in the Local Court, the material to which the plaintiff deposed in her affidavit of 30 March 2007, which included, but which was not limited to, the material set forth above, clearly bespeaks the making of an application on that ground.

14 In support of her application before me the plaintiff relies upon the same grounds as those argued before the learned Magistrate. First, the plaintiff argues that by reason of her limited English and limited understanding of the arbitration process she failed or neglected to attend. Moreover, the plaintiff says, in effect, that she put the matter in the hands of her solicitor who either failed to attend on her behalf or to inform her to do so in the solicitor's absence. The plaintiff also deposed to the fact that she was suffering financial and emotional hardship at the time that the matter was listed for arbitration and that this affected her ability to comprehend the need for her to attend.

15 There was no satisfactory evidence before the learned Magistrate concerning the plaintiff's physical or emotional ability to attend the arbitration. Insofar as she contended that difficulties with the English language precipitated her non-attendance, there is a significant tension between that submission and the opening sentence of paragraph 9 of her affidavit. In addition, it may fairly be inferred from the whole of the evidence that the plaintiff was the proprietor of a business in the course of the conduct of which she might reasonably have been expected to converse in English on a daily basis with her customers.

16 Although the plaintiff's submissions in the following respect were less than satisfactory, the plaintiff contended that she had a reasonably arguable defence for which she should be given an opportunity to prosecute. If the plaintiff filed the defence in the Local Court, it was not in evidence before me. The affidavit of the plaintiff sworn 30 March 2007 appears to have annexed to it a defence prepared for filing in the Local Court by the plaintiff's present solicitor Ms Paraska. Although the document purports to plead a breach by the defendants of the original contract in that they failed to comply with all of its terms, no particulars of that contention are included in it. Moreover, it is to some extent inconsistent with the payment by the plaintiff of the sum of $41,900 to the defendants in partial satisfaction of the obligation upon her for which the contract provided. Other material annexed to her affidavit, including a series of letters written by the plaintiff's husband Stefano Bassanese between April 2005 and June 2005, suggests that the significant basis for the plaintiff's complaints about the defendants' performance of the contract consisted more in a concern with the level of response to the advertising campaign than with performance of its terms by the defendants.

17 Finally, the plaintiff submitted that on an assessment of competing prejudices, the prejudice suffered by the plaintiff if she were not given an opportunity to be let in to defend far outweighed any prejudice which the defendants might suffer if she were given an opportunity to contest the defendants' claim. I agree with this submission.

18 The application before me is by way of rehearing; see s 75A(5) Supreme Court Act 1970. By s 75A(10) of that Act, the Court may make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made, or which the nature of the case requires.

19 I am not satisfied that the plaintiff failed to attend the hearing of the arbitrator without good reason; see s 43(3) of the Act. This Court may make an order for a rehearing even if it appears that the plaintiff failed to attend the hearing before the arbitrator without good reason. I am not satisfied on the material before me that the plaintiff's failure to attend at the arbitration has been satisfactorily explained or that an order for a rehearing should be made in any event based upon the explanation that has been given. There is collateral material which clearly demonstrates that the plaintiff knew enough about the process to instruct solicitors in the proceedings generally. If the plaintiff's solicitors at the time failed properly or adequately to represent her in the proceedings, she will presumably not be left without appropriate remedies.

20 I am also not satisfied that a rehearing of the proceedings the subject of the arbitrator's award would not be futile. No defence has been put forward before me which suggests that the plaintiff could have resisted the defendants' claim for the balance of the contractual sum. The plaintiff's complaint that the defendants failed to perform the contract in accordance with its terms is unexplained beyond a mere assertion of the fact, and flies in the face of a substantial and unconditional performance by the plaintiff of her obligations.

21 Finally, the plaintiff has not offered any satisfactory explanation as to why she failed within the period of 28 days referred to in s 40(b) of the Act to make an application for a rehearing of the proceedings pursuant to s 43(1) of the Act. This is not a case in which the plaintiff applied to the referring court for a rehearing in a timely way. As the defendants point out, the application filed on 3 April 2007 was approximately 116 days after the award was made and approximately 93 days after the day on which the award took effect; see s 43(1) of the Act.

22 In my opinion, the summons should be dismissed with costs.

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