Lynch v Bagala Bros Pty Ltd

[2022] NSWDC 136

District Court

New South Wales

Medium Neutral Citation:

Lynch v Bagala Bros Pty Ltd [2022] NSWDC 136

Hearing dates:

28 April 2022

Date of orders:

28 April 2022

Decision date:

28 April 2022

Jurisdiction:

Civil

Before:

Gibson DCJ

Decision:

Order:

(1)   Appeal dismissed.

(2) Pursuant to s 98 of the Civil Procedure Act 2005, the defendant’s costs of the appeal are assessed in a gross sum of $4,000 and the plaintiff is to pay in instalments of $1,000 per month over the next 4 months.

Catchwords:

APPEAL - appeal from decision of Assessor in the Small Claims Division of the Local Court pursuant to s 39(2) Local Court Act 2007 (NSW) - whether lack of procedural fairness - appeal dismissed with costs

Legislation Cited:

Civil Procedure Act 2005 (NSW) s 98(4)

Local Court Act 2007 (NSW) ss 35, 39(2) and 40

Cases Cited:

Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863

Duraisamy v Sydney Trains [2019] NSWCA 269

Kioa v West (1985) 159 CLR 550

Mahaffy v Mahaffy (2018) 97 NSWLR 119

Poulsen v Harrison [2021] NSWCA 23

Category:

Principal judgment

Parties:

Plaintiff:
Ms Mary Athena Lynch (self-represented)
Defendant:
Bagala Bros Australia Pty Ltd

Representation:

Counsel
Plaintiff:
Ms Mary Athena Lynch (self-represented)
Defendant:
Mr A Friedlander (Solicitor for the Defendant)

Solicitors:
Defendant:
O'Neill Partners Commercial Lawyers

File Number(s):

2021/00257778

Judgment

The proceedings before the court

1. The plaintiff appeals an order made by the Local Court on 16 August 2021, pursuant to which judgment was entered against her in the sum of $6,261.79.

2. These are my reasons for dismissing her appeal, brought pursuant to s 39(2) of the Local Court Act 2007 (NSW) (“the Act”), and for making a gross sum costs order on a party/party basis pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW).

The circumstances leading to the appeal

3. The plaintiff and defendant both sell flowers in the Sydney Flower Market at Flemington, which the plaintiff told me had been founded by her grandfather in Haymarket prior to the Market’s transfer to Flemington in 1975. There was a long trading relationship between the plaintiff and the defendant, but disputes arose as to the amounts of money the plaintiff was to pay the defendant for flowers she had purchased from them.

4. The defendant brought proceedings for the recovery of sums due and owing for outstanding invoices for payments for the purchase of flowers. The plaintiff disputed the quantum of those invoices but her efforts to reconcile her account with the defendant’s records was “difficult” (affidavit of 19 March 2022, paragraph 15) because, she told the court, her financial records were stolen.

5. The plaintiff’s response to these proceedings was to advise the Assessor that she wanted to negotiate the sums owing and that she would like assistance in doing so.

6. Examination of the transcript of the hearing before the Assessor confirms that while the Assessor sought to obtain information from the plaintiff as to the extent and veracity of the assertions within the scope of the evidence provided, the plaintiff was not able to answer those questions beyond acknowledging that she owed money to the defendant and the Assessor was to work out how much that sum was. Examination of the documents tendered by the defendant demonstrates that these were detailed business records in relation to the disputed transactions, where the plaintiff was unable to disprove these because, as she acknowledged, she had few if any of her own records to produce. I note that the plaintiff did point to certain discrepancies in relation certain of the invoices, which discrepancies were carefully considered by the Assessor. An amount for the sum due and owing was then the subject of careful reasons and orders, including appropriate costs orders.

7. The plaintiff was not satisfied with the assessment of the sum, or the manner in which it was arrived at by the Assessor, and brings an appeal from the decision on the basis of lack of procedural fairness.

The pleadings and evidence

8. The grounds of appeal, in the plaintiff’s own words, are as follows:

1. On the 17^th of December 2020, the legal representative for Bagala Bros stated during a hearing with the Registrar that her client did not know exactly what is owing and what has been paid.

2. The Assessor failed to accord myself Mary Athena Lynch with procedural fairness in the hearing of the matter and quoted that “the amount that is being claimed for so they must be true and that what has been paid”.

3. The Assessor was infected with actual bias against myself Mary Athena Lynch beforehand thereby causing the assessment to fail and be in breach of rules of natural justice.

4. The Assessor failed to have regard to the evidence of the appellant myself Mary Athena Lynch in the assessment, and the concessions made by Bagala Bros that their records were accurate were not a true record of transactions between parties.

5. The Assessor failed to determine that Bagala Bros in the assessment could not establish that amount owing and therefore should have dismissed the application as incompetent.

6. The Assessor quoted at the end of the Hearing that “this was a matter for the Registrar”.

9. The plaintiff relies upon her affidavit of 22 March 2022, which attaches part of the transcript but no financial records of her own.

10. The defendant relies upon an affidavit of Megan Zhou sworn on 29 March 2022, which exhibits the affidavit of Michael Bagala sworn on 27 May 2021 and filed in the Local Court proceedings, as well as the transcript of the hearing before the Assessor on 16 August 2021.

The relevant principles of law

11. While s 39(1) permits the bringing of an appeal to the Supreme Court on a question of law, the jurisdiction of this court is much narrower. Section 39(2) provides:

“39 Appeals as of right

…

(2) A party to proceedings before the Court sitting in its Small Claims Division who is dissatisfied with a judgment or order of the Court may appeal to the District Court, but only on the ground of lack of jurisdiction or denial of procedural fairness.”

12. The Act carefully distinguishes between errors of law, errors of mixed law and fact, appeals requiring leave of the Supreme Court (in ss 39(1) and 40) and the very limited right of appeal to this court in the specific circumstances set out in s 39(2). The right of appeal from the Small Claims Division to this court does not involve errors of law or errors of fact, or errors of mixed fact and law, but only orders made where there has been a lack of jurisdiction in the court below (which is not claimed here), or there has been an asserted denial of procedural fairness.

13. Fairness of procedure will depend upon the nature of matters in issue, including fairness in permitting a party a reasonable opportunity to present its arguments and evidence: Kioa v West (1985) 159 CLR 550 at 585.

14. As is set out in s 35 of the Act, proceedings before the Small Claims Division are conducted in a very informal fashion, and this is a relevant factor to take into account. In addition to the degree of informality arising from the nature of the court hearing itself, the Assessor must also take into account the needs of a litigant in person, while at the same time seeking to preserve the balance between the parties referred to by Bell P (as his Honour then was) in Duraisamy v Sydney Trains [2019] NSWCA 269.

15. There are two general requirements for procedural fairness. The first of these is the fair hearing rule and the second is the rule against bias. The fair hearing rule requires a decision-maker to afford a person an opportunity to be heard before making a decision affecting their interests. Such issues are generally determined by careful analysis of the transcript. The issue of bias requires consideration of the factors set out by the Court of Appeal in Poulsen v Harrison [2021] NSWCA 23 at [44] - [47].

The application of these principles to the grounds of appeal

16. By way of general overview, it is clear from the whole of the transcript that the Assessor carefully and courteously sought to elicit from the plaintiff both the nature of her defence and the extent of her evidence. I note the plaintiff consistently acknowledged she owed money to the defendant (T 14 – 15) and was essentially asking the Assessor to determine how much.

17. Ground 1 of the appeal asserts that the defendant’s legal representative said she did not know exactly what amount was owing and what amount had been paid. However, this is not what was said; moreover, the affidavit of Mr Bagala sets this information out clearly, by reference to the date, invoice number and amount for each of the items as well as details of payments made and to which invoices those payments were applied. The plaintiff’s response was that she no longer had many of the invoices in question (T 18). The transcript demonstrates that the Assessor carefully considered each of the claims made by the plaintiff in particular some discrepancies which required a ruling.

18. Ground 2 asserts that, rather than work out the sum involved, the Assessor merely stated that the full sum must be owing because it was claimed to be unpaid. This is contradicted by the contents of the transcript. In fact, the Assessor went to considerable lengths to consider such minor issues as whether one receipt was for a bunch of sweet peas or for a bunch of freesias.

19. Ground 3 asserts actual bias against the Assessor. I was unable to find anything in the transcript demonstrating bias of any kind, let alone actual bias, and the plaintiff was unable to point to any specific extract of the transcript in question. There were occasions when the Assessor explained to the plaintiff how the legal system worked, how she needed to provide evidence and how she needed to state the amounts she was satisfied she had paid with some specificity (T 34 - 35), but this is advice of the kind commonly given in such tribunals, especially where there is a litigant in person requiring assistance.

20. Ground 4 asserts that the Assessor disregarded the evidence. What the Assessor in fact said was that, with the exception of the transaction involving the sweet peas, there was no evidence from the defendant (such as bank records, invoices or some other form of written or oral evidence) to make out a successful defence; all that the plaintiff had done was to make generalised assertions. In circumstances where Bagala Bros provided detailed records which supported their claim, the Assessor was of the view that the defence could not be made out. Looking at the material provided to the Assessor, this is a fair and accurate description of the evidence.

21. Ground 5 is an attack on the quality of the evidence provided by Bagala Bros; however, the company was entitled to rely upon its business records as proof in relation to each of the transactions in question.

22. Ground 6 is a misunderstanding of what the Assessor said. She was not saying that the result was a matter for the Registrar; she was correctly informing the plaintiff that the plaintiff could make an application to the Registrar to pay the judgment debt by instalments, which was important and relevant information for the plaintiff.

Conclusions concerning the grounds of appeal

23. Each of the grounds of appeal must fail.

Costs

24. The defendant seeks an order for indemnity costs in a gross sum costs order pursuant to s 98 of the Civil Procedure Act 2005. The costs on an indemnity basis are as follows:

Solicitor/client costs from 9 September 2021 to 31 March 2022:    $ 5,198

Estimated further costs to conclusion of the hearing:                      $ 1,815

Total                                                                                                 $ 7,733

If such costs were awarded on a party/party basis, that would be 70% of this sum, being $5,413.10.

25. In Mahaffy v Mahaffy (2018) 97 NSWLR 119 at [275], Payne JA stated that s 98 conferred on the court a wide discretion with respect to costs, in relation both to the making of an order for costs on an indemnity basis and the allowance of those costs in a gross sum costs order.

26. The circumstances relied upon for an order for indemnity costs are that the plaintiff’s appeal was always “doomed to fail” (submissions, paragraph 16). The plaintiff has caused the defendant to incur unnecessary legal costs and has failed to pay any amount (including any undisputed amount) of the judgment sum.

27. While I agree that the appeal is misconceived, it was evident to me that this arose from misunderstandings by the plaintiff of the role of the court in relation to assisting her to establish the amounts which were owing. She was frank in her admissions both to the Assessor and to me that she owed money, and was expecting assistance with the determination of how much. This is not, in such circumstances, an appropriate matter for costs on an indemnity basis.

28. As to the sum to be awarded on a party/party basis, I accept the estimate of 70% of the solicitor/client total, but note that a further discount (Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863) should also be made to accommodate the potential reduction on assessment as well as the advantage of speed and finality of a gross sum costs order. Taking that into account, the sum I propose to award of costs pursuant to s 98 is $4,000. I have made an order for payment by instalments as part of that order, at the plaintiff’s request, having regard to my discretionary powers under s 98.

29. I thank Mr Friedlander for his helpful submissions and for his assistance in the conduct of the hearing of this matter, in circumstances where the plaintiff was clearly in a distressed state.

Order:

1. Appeal dismissed.

2. Pursuant to s 98 of the Civil Procedure Act 2005, the defendant’s costs of the appeal are assessed in a gross sum of $4,000 and the plaintiff is to pay in instalments of $1,000 per month over the next 4 months.

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Decision last updated: 02 May 2022