McGrath v Rebuild Now Pty Ltd

[2016] NSWSC 636

Supreme Court

New South Wales

Medium Neutral Citation:	McGrath v Rebuild Now Pty Ltd [2016] NSWSC 636
Hearing dates:	22 April 2016
Decision date:	18 May 2016
Jurisdiction:	Common Law
Before:	Button J
Decision:	(1) Appeal dismissed. (2) Costs reserved.
Catchwords:	APPEAL – Local Court appeal – identification of capacity of plaintiff on title page of originating process – failure of Magistrate to deal with legal submission in judgment – legal question to be determined rather than remitted to Local Court – disjunction between name of respondent on title page and name of respondent in contracts of no substance – appeal dismissed
Legislation Cited:	Local Court Act 2007 (NSW), ss 39(1), 41(1)
Cases Cited:	Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Category:	Principal judgment
Parties:	Brian McGrath (First Applicant) Natalie McGrath (Second Applicant) PWA Engineering Pty Ltd (ACN 164 409 572) (Third Applicant) Rebuild Now Pty Ltd (ACN 159 680 047) (Respondent)
Representation:	Counsel: B Le Plastrier (Applicants) G Stapleton (Respondent)   Solicitors: Lynch Andrews Lawyers(Applicants) Savage Defence Lawyers (Respondent)
File Number(s):	2015/302352
Decision under appeal	Court or tribunal: Local Court of New South Wales Date of Decision: 18 September 2015 Before: Lucas LCM File Number(s): 2014/89880

Judgment

Introduction

1. This is an appeal from a judgment in a civil matter in the Local Court of New South Wales which was delivered on 18 September 2015. The order to which the judgment relates was entered on 23 September 2015. A costs order was made on 30 October 2015.

2. The appeal is brought to this Court pursuant to s 39(1) of the Local Court Act2007 (NSW), and focuses upon a single ground said to give rise to a question of law alone (an application by counsel to rely upon a further proposed ground at the hearing that had been identified neither in the summons commencing the appeal nor in his written submissions was rejected by me).

3. In the Local Court, Rebuild Now Pty Ltd was identified as the plaintiff, and Mr Brian McGrath, Ms Natalie McGrath and PWA Engineering Pty Ltd (PWA) were the defendants. For ease of comprehension, I shall refer to the latter three parties as the appellants, and to Rebuild Now Pty Ltd as the respondent.

4. The plaintiff is an insolvency specialist accountant. PWA is engaged in engineering, and Mr and Ms McGrath are associated with that company.

Ground and submissions in support of it

5. The ground of appeal, as helpfully refined by counsel for the appellants at the hearing, may be very shortly stated.

6. The respondent sued in the Local Court by way of a statement of claim dated 12 March 2014. In a nutshell, the claim asserted that there had been a contract between the respondent and the appellants whereby the respondent would do accountancy work for them and they would pay for it. The claim asserted that the work was done but the payment was not received in full. On the title page of that originating process, the plaintiff in the Local Court was identified as “Rebuild Now Pty Ltd”.

7. However, as is pleaded in para 1 of the statement of claim, the respondent was suing upon two written agreements, the first dated 21 June 2013 and the second dated 17 October 2013. In those documents, the relevant contracting party is identified as “Rebuild Now Pty Ltd ATF the RRR Trust”. There was no dispute before me that the letters “ATF” were to be understood as shorthand for “as trustee for”.

8. Counsel for the appellants submitted that there was a significant disjunction between the title page of the statement of claim, which identified the respondent simpliciter as the moving party, and the contracts, which identified the respondent as trustee for another entity as the contracting party.

9. It was submitted that what was accepted to be a “pleading point” was nevertheless a point of substance. That was said to be the case especially since there was a degree of confusion arising as to the identity of various entities, not least because the two contracts concluded with the title “Rebuild Now Pty Ltd” rather than the title “Rebuild Now”, which was the abbreviation established at the beginning of the contract as referring to the contracting party.

10. Furthermore, counsel submitted that there was also confusion in relation to certain invoices, which were issued in the name of “RRR Trust”, despite the fact that the payment details on the invoices identified the recipient of the funds as “Rebuild Now Pty Ltd”.

11. Counsel also submitted that the point was raised by counsel then appearing for the appellants before the learned Magistrate, albeit briefly. It was said that that was done chiefly in oral submissions, and, to some degree, in the context of other related but discrete submissions about asserted legal problems with the claim.

12. In short, because of the characterisation of the respondent on the title page of its statement of claim, the primary position of counsel for the appellants was that the appeal should be allowed; judgment should be entered for the appellants; costs orders made against them in the Local Court reversed; and the respondent left to pursue its remedies in new proceedings as it sees fit.

13. The ancillary position of counsel for the appellants was that the order made against them in the Local Court should be quashed; costs orders made in that court should be set aside; and the matter remitted to that court for further hearing, thereby giving the respondent a chance to amend its pleadings in order to overcome the legal error identified.

14. Counsel for the respondent submitted that the point had had no significance in the proceedings below; that the appellants had never properly raised it for consideration there; and that, in any event, it is trivial and of no consequence. His position was that it could not found a successful appeal based on an error of law.

Determination

15. To my mind, this appeal can be determined very succinctly by me.

16. Contrary to the submissions of counsel for the respondent, I am prepared to proceed on the basis that, although the position is unclear, this point was raised sufficiently by counsel then appearing for the appellants for it to be required to be dealt with in the reasons of the Magistrate, albeit very briefly. It was not dealt with; for that reason, I am prepared to proceed on the basis that that failure to deal with a submission about a legal question constituted an error of law on the part of his Honour: see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 279.

17. But to my mind, having had the benefit of the entirety of the documents relevant to the proceedings at first instance placed before me; the benefit of a half-day hearing; and the benefit of the extensive written and oral submissions of two counsel, there is no question of me remitting this simple legal question to the Local Court for further hearing. I am convinced that, pursuant to s 41(1) of the Local Court Act, it is appropriate for me to deal with the question myself, and I proceed to do so.

18. I respectfully consider that the submission that there was a significant disjunction between the description of the plaintiff in the Local Court on the title page of the statement of claim as “Rebuild Now Pty Ltd” and the description of the plaintiff in the two contracts that founded that claim as “Rebuild Now Pty Ltd ATF the RRR Trust” is devoid of merit. That is so for the following reasons.

19. First, para 1 of the statement of claim is as follows:

“The Plaintiff performed work for the Defendants pursuant to agreements dated 21 June, 2013 and 17 October, 2013 (“Agreeents”).” [sic]

20. To my mind, the very first paragraph of the originating process made it perfectly clear to the respondents and to the court that the plaintiff was suing pursuant to the written agreements of 21 June 2013 and 17 October 2013. In turn, those documents made perfectly clear the capacity in which the respondent was entering into the agreements with the appellants. In those circumstances, the asserted disjunction is immaterial.

21. Secondly, counsel for the appellants was unable to point to any authority derived from any court within the common law world, promulgated in the many hundreds of years since the concept of a trust first entered into English jurisprudence, in support of the proposition that specification that a plaintiff is suing as a trustee on the title page of the originating process is an essential precondition to the validity of any such claim.

22. Thirdly, the evidence before me shows that particulars were requested by the solicitor acting for the appellants in the Local Court, and in due course they were provided by the solicitor for the respondent. No query was raised in that request by the solicitor for the appellant with regard to the identity or the capacity of the respondent in the Local Court.

23. Fourthly, despite the (literal) primacy of the paragraph in the statement of claim that made clear the foundation upon which the claim was made, no traversal with regard to identity or capacity was made in the defence of the appellants filed in the Local Court.

24. Fifthly, it was not disputed by counsel for the appellants before me that there was evidence before the Magistrate that the appellants paid a number of invoices pursuant to the contracts to which I have referred. That strongly suggests, if nothing else, that there was no issue in the minds of the appellants about the identity of the respondent, and its ability to rely upon the two contracts, whatever terminology or title was used in them or on the title page of the statement of claim.

25. Sixthly, if (contrary to my opinion) there can be some controversy as to the basis upon which the respondent will receive funds pursuant to the judgment of the Local Court (that is, either as a trustee of the funds for the beneficiary or in its own right), it is a matter for the beneficiary whether it desires clarification of that basis of receipt. It is not a matter upon which the appellants may rely in resisting the claim of the respondent.

26. In summary, for all of the preceding reasons, I accept the characterisation by counsel for the appellants of the underlying legal issue as being a “pleading point”. But I reject the submission that it is a pleading point of substance; indeed, I am of the contrary view.

27. For those reasons, although I have proceeded on the assumption that the appellants have identified legal error by way of inadequacy of reasons, I propose to dismiss the appeal.

Costs

28. Having come to that determination, there is no basis upon which I should interfere with the costs orders made at first instance.

29. As for the costs of the proceedings before me, I accept the submission of counsel for the respondent made at the hearing that they should be reserved.

30. I invite the parties to contact my Associate in order to find a mutually convenient time for a hearing of no more than 45 minutes with regard to costs.

31. Once that time and date is settled, I would be obliged to receive from the parties (unless the question of costs is notified as having been agreed between them) no more than 5 pages of written submissions about the question of costs, to be filed electronically with my Associate no later than 48 hours before the time and date of the hearing.

Orders

32. I make the following orders:

1. Appeal dismissed.

2. Costs reserved.

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Decision last updated: 19 May 2016