Owners Corp SP51652 v CTTT

[2003] NSWSC 739

CITATION:

Owners Corp SP51652 v CTTT & Anor [2003] NSWSC 739

HEARING DATE(S):

1 August 2003

JUDGMENT DATE:

13 August 2003

JURISDICTION:

Common Law, Administrative Law List

JUDGMENT OF:

Master Harrison

DECISION:

(1) The decision of Tribunal Mrember Durie dated 16 August 2002 is affirmed; (2) The sumons is dimissed; (3) The plaintiff is to pay the second defendant's costs as agreed or assessed.

CATCHWORDS:

Appeal decision of CTTT - adjournment application

LEGISLATION CITED:

Consumer, Trader and Tenancy Tribunal Act 2001 - s 65
Judicial Review of Administrative Act, 2nd Ed

CASES CITED:

House v King (1936) 55 CLR 499
Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951
Kioa v West (1985) 159 CLR 550
Maxwell v Keun [1928] 1 KB 645
Rodgers v East Coast Mortgages [2002] FCA 181
Sali v SPC Ltd & Anor 16 ALR 625
State of Queensland v JL HOldings (1997) 189 CLR 146
Sydney City Council v Ke-su Investments Pty Ltd (1985) 1 NSWLR 246

PARTIES :

Owners Corporation SP51652
(Plaintiff)

Consumer, Trader & Tenancy Tribunal
(First Defendant)

QA Constructions Pty Limited (ACN 067 410 664)
(Second Defendant)

FILE NUMBER(S):

SC 30082/2002

COUNSEL:

Mr G A Sirtes
(Plaintiff)

Ms P Koroknay
(Second Defendant)

SOLICITORS:

Norman Waterhouse Lawyers
(Plaintiff)

I V Knight
Crown Solicitor
(First Defendant - Submitting Appearance)

Morgan Lewis Alter Lawyers
(Second Defendant)

LOWER COURTJURISDICTION:	CTTT
LOWER COURT FILE NUMBER(S):	HB02/12293
LOWER COURT JUDICIAL OFFICER :	Tribunal Member Durie

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

WEDNESDAY, 13 AUGUST 2003

30082/2002 - OWNERS CORPORATION SP51652 v
CONSUMER, TRADER & TENANCY
TRIBUNAL & ANOR
JUDGMENT (Appeal decision of CTTT
- adjournment application)

1 MASTER: By summons filed 13 September 2002 the plaintiff seeks firstly, a declaration that it was denied procedural fairness in the hearing conducted by the first defendant: the Consumer, Trader and Tenancy Tribunal (CTTT), in proceedings HB02/12293 between the plaintiff and the second defendant QA Constructions Pty Limited (ACN 064 410 684) (QA Constructions) on 16 August 2002 (the proceedings); secondly, an order setting aside the determination of the CTTT; thirdly, an order that the proceedings be remitted to the CTTT to be determined according to law; fourthly, an order that the orders made on 16 August 2002 be stayed pending this appeal; and fifthly, an order that QA Constructions pay the costs of the proceedings including any costs of the first defendant. The plaintiff relied on the affidavit of Elizabeth Cox sworn 6 May 2003 and an affidavit of Ian Alexander McKnight sworn 30 May 2003. The second defendant relied on the affidavit of David Geoffrey Le Page. The first defendant has filed a submitting appearance. The List Judge referred this matter to a Master for hearing.

2 On 30 September 1999, approval was granted by the Department of Fair Trading to the plaintiff for building rectification work to the value of $124,470.00 due to faulty workmanship performed at the property known as 20-22 Isabella Street, North Parramatta (the property). On 23 November 1999, the plaintiff and second defendant entered into a contract for the rectification of works at the property. On 21 March 2002, the second defendant filed an application with the CTTT seeking orders in relation to the payment of outstanding progress claims against the Owners Corporation. The Owners Corporation is the plaintiff in these proceedings and was the second defendant in the CTTT proceedings. QA Constructions is the second defendant in these proceedings and the plaintiff in the CTTT. I shall refer to QA Constructions as the second defendant and the Owners Corporation as the plaintiff in this judgment.

3 On 16 August 2002, the Tribunal Member refused an adjournment application by the plaintiff. The Tribunal Member then proceeded to hear the matter. He made orders that the plaintiff was to pay the second defendant the sum of $60,232.40 and that the plaintiff pay the second defendant’s costs.

4 Section 65(3)(b) Consumer, Trader and Tenancy Tribunal Act 2001 (the Act) provides that relief can be granted by way of a judgment or order in the nature of prohibition, mandamus, certiorari, and a declaratory judgment or an injunction if in relation to the hearing or declaration of the matter, a party had been denied procedural fairness.

5 Section 67 of the Act allows for an appeal to be made to this court on a question of law. An appeal may only be made with leave of the court. A reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal. The onus lies on the plaintiff to demonstrate that there has been an error of law. Section 67(3) of the Act provides that after deciding the question of the subject of an appeal the court may, unless it affirms the decision of the Tribunal on the question that should have been made by the Tribunal, remit its decision on the question to the Tribunal and order a rehearing of the proceedings before the Tribunal.

6 At the outset, it is helpful to set out some of the provisions of the Act. The function of the Tribunal is to adjudicate disputes between consumers and commercial disputes between landlords and tenants. The Tribunal is not constrained by the rigour of the court room. Its objects are to ensure that it is accessible, its proceedings are efficient and effective, its decisions are fair and to enable proceedings before it to be determined in an informal, expeditious and inexpensive manner. The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (s 27(3)).

7 Evidence must be given on oath or statutory declaration (s 39(1)) but the Tribunal is not bound by the rules or practice of evidence and the Tribunal may inform itself on any matter in such manner as it considers appropriate (s 28(2)). The Tribunal must conform to the rules of natural justice, but broadly speaking, has control of and responsibility for its own procedures (s 28(1) and (2)). Its business is conducted in public (s 33). Section 35 provides that the Tribunal must ensure that each party in any proceedings is given a reasonable opportunity to call or give evidence and otherwise present the party’s case (whether at a hearing or otherwise); and to make submissions in relation to the issues in the proceedings. Normally a party to the proceedings has carriage of his or her own case and is not entitled to be legally represented (s 36(1)). The Tribunal has the power to award costs (s 53), but usually each party bears its own costs. Pursuant to s 54 of the Act, the Tribunal is obliged to use its best endeavours to bring the parties to a settlement before making an order. The Tribunal has a power to correct its decision (s 50) and the registrar can issue a certificate which operates as a judgment (s 51).

Grounds of appeal

8 The plaintiff submitted firstly, that the Tribunal Member raised issues for the first time which prevented the plaintiff from effectively answering the case it was then required to meet; secondly, the Tribunal Member in determining the second defendant’s application for an adjournment failed to give the plaintiff adequate notice of the basis upon which the first defendant proposed to determine the matter, depriving the plaintiff of any opportunity, or reasonable opportunity, to meet that case or advance its own; thirdly, the Tribunal Member, in refusing the plaintiff’s application for an adjournment, thereby deprived the plaintiff of an adequate opportunity to prepare or present a case; fourthly, the Tribunal Member denied the plaintiff procedural fairness by failing to give the plaintiff adequate notice that, on that day, it proposed to conduct the proceedings, particularly the plaintiff’s application for an adjournment, in a way which was fundamentally different to the course of conduct adopted by the first defendant prior to that date and inconsistent with the dictates of the Act; and fifthly, the Tribunal erred in refusing the plaintiff’s adjournment application on the basis that the defence of equitable set-off was not available to the plaintiff.

9 The principles according to which this court is to decide whether the Member’s discretionary decision to adjourn proceedings should have been exercised are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them. They are as follows:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

Denial of natural justice

10 In relation to natural justice, Professor S A de Smith, Judicial Review of Administrative Act, 2nd ed., pp 180-181 has stated:

“Natural justice generally required that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed, so that they may be in a position: (a) to make representations on their own behalf; or (b) to appear at a hearing or inquiry (if one is to be held); and (c) effectively to prepare their own case and to answer the case (if any) they have to meet.”

11 In Kioa v West (1985) 159 CLR 550 the High Court held that the duty to accord natural justice is a duty to act fairly. In the normal course, a party to judicial proceedings (as are those in a tribunal) could expect to be apprised of the nature of the case sought to be made against it, and of the date and time fixed for hearing such as to give it a reasonable opportunity to meet that case and to advance its own. These statements are similar to those expressed by Professor de Smith and referred to earlier. Brennan J (as he then was) at 628 stated:

“A person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters adverse to his interest which the repository of the power proposes to take into account in deciding upon its exercise.”

12 In relation to procedural fairness, Mason J stated in Kioa that the law had now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. Procedural fairness is a notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case (pp 454 and 455).

13 In Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951 Grove J stated at para 25:

“There is ample authority that procedural fairness is denied if a decision maker fails to adjourn proceedings where such a failure has the effect of depriving a person of adequate opportunity to prepare or present a case: Sullivan v Department of Transport (1978) 20 ALR 323; Opitz v Repatriation Commission (1991) 29 FCR 50; Humphrey v Wills (1989) VR 439.”

14 However, whether there is a denial of procedural fairness depends on the circumstances in each case.

15 On 16 August 2002, the matter was listed for hearing. Both parties had prior notice of the hearing date. At the outset the plaintiff sought an adjournment for a period of two weeks. The adjournment was sought on the basis that the plaintiff was yet to receive an engineer’s report which it has commissioned but had not yet received.

16 The plaintiff submitted that s 35 of the Act required the Tribunal to give the Owners Corporation a reasonable opportunity to present its case (at the hearing or otherwise) and to make submissions in relation to the issues in the proceedings and this did not occur. The plaintiff further submitted that the Member simply descended upon Ms Cox, the solicitor appearing for the plaintiff, with a barrage of cases, concepts and documents of which she was unaware and unable to respond to.

17 The Tribunal Member’s decision referred to the history of the proceedings; relevantly, that the applicant filed an application in the Tribunal on 2 March 2002 and there was an amended application received on 9 April 2002, and a copy of that was sent to the respondent on 16 April 2002. The matter was subsequently listed and went before a Tribunal Member after both parties requested an adjournment. On 4 June 2002, directions were given. On 8 July 2002, Mr McKnight a solicitor who appeared for the plaintiff was present when the directions were given. Those directions were that both parties were granted leave to be represented by solicitors and they were directed to advise the registrar no later than 4.00 pm on 15 July 2002 of such details as would normally appear in a notice of appearance filed in this court. Both parties had to provide to the registrar the documents upon which they were to rely and a chronology. Expert’s reports were to be exchanged and filed by 29 July 2002. The plaintiff did not comply with any of those directions.

18 The hearing commenced by the solicitor for the second defendant saying that they had two witnesses present to give evidence and then he gave a short summary of what the proceedings were about. Ms Cox then said:

“I don’t know whether this is an appropriate time. We only received instructions late yesterday afternoon and as foreshadowed to the Tribunal yesterday afternoon we had instructions to apply for an adjournment of today’s hearing on the basis that the expert report, or the expert engaged by our client hadn’t yet completed the report. Though the inspection itself had been carried out and a draft report prepared, it hadn’t yet been finalised. We sought the ……. of the applicants to be adjourned on the basis that we would pay the costs thrown away by reason of the adjournment. That consent was rejected. We are therefore in a position where we are still applying this morning to have the hearing adjourned and I don’t know whether this is an appropriate time in which to make that application.”

19 The Tribunal Member considered the merits of the case that was to be argued.

20 The following exchange took place:

MR DURIE: And your client was previously represented by other solicitors and is not ready, although this is an application that was filed with the Tribunal as long as 2 March and has been through several hearings before today to give directions and get the matter ready to run. Don’t you have problems in the light of what has been said in the Federal Court in East Coast Mortgages?
MS COX: Mr McKnight is I understand a solicitor. However he is ….. and he is who we have received instructions from as of late yesterday afternoon. I cannot make any comment in terms of a defence in light of the contract. I haven’t had the opportunity to even look at the contract and it is the first time I have seen this this morning. The instructions were in terms of the expert’s report that we just – it would take two weeks for that to be ready.”

21 The Tribunal Member concluded that there had been a real lack of action on the plaintiff’s part (t 6). When the plaintiff’s solicitor was then asked what the plaintiff’s defence would be she replied that she had no instructions. The Tribunal Member adjourned for a short while to allow the plaintiff’s solicitor to obtain those instructions. After the short adjournment, the solicitor informed the Tribunal Member she had instructions that there was to be a cross-claim in relation to the work not done and if it was done it was not done properly. He considered a number of factors including the merits of the case and the conduct of the parties.

22 The solicitor for the plaintiff, after seeking instructions during the short adjournment, had the opportunity to inform the Member that there were defects in relation to eight shower recesses. The solicitor for the applicant said the previous claims were in relation to four shower recesses. There was also a dispute in relation to the driveway where the applicant had carried out remedial work to cracking and damages were sought on the basis that there had been a breach of the statutory warranties necessarily implied by the provisions of the Home Building Act.

23 The Tribunal Member gave reasons for refusing the adjournment. The Tribunal Member also referred to the High Court decision of State of Queensland v JL Holdings (1997) 189 CLR 146, and stated that it was to be remembered that in JL Holdings the court was dealing with an application to amend pleadings made six months after the date of hearing. It was the Member’s opinion that the Victorian Court of Appeal decision in Sali v SPC Ltd & Anor 116 ALR 625 was more relevant where it was held that there should not be an adjournment granted because the reasons for the adjournment were simply inaction and delay on the part of the appellant. The Member also referred to the decision in Rodgers v East Coast Mortgages [2002] FCA 181 where the Federal Court drew distinctions between JL Holdings and Sali and stated that where the delay or the failure to be ready was due to an act or default of a party then the court should look very closely to whether an adjournment should be granted. The Tribunal Member also considered the merits of the case. He referred to the plaintiff’s rights under the contract and whether there could be a cross-claim or set-off.

24 In JL Holdings, the appellants had been refused leave to amend their defence in a long running commercial dispute concerning a lease to develop certain land. The estimated length of the trial was four months. After a number of interlocutory hearings and several amendments to the defence, the appellants applied again to amend their defence. The judge, Keifel J, refused leave to add a defence which, though arguable, was likely to result in the vacation of the date which had been fixed for the trial six months ahead. Keifel J considered that maintaining that date was a more pressing consideration than a party's right to present a further defence.

25 The Full Court of the Federal Court upheld the primary Judge’s decision, adding that procedure and efficient case management outweighed the potential injustice that might arise from a refusal to allow the appellants to amend their defence. However, on appeal to the High Court this finding was reversed unanimously. In their judgment Dawson Gaudron and McHugh JJ, at 154, stated that case management, while a important consideration, was not “an end in itself” and that:

“[I]t ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim.”

After considering that neither party would be placed under an undue strain if the amendment were allowed, their Honours concluded, at 155, that costs were an adequate remedy for any prejudice caused by it.

26 In his separate judgment, Kirby J reiterated these findings and, at 169-70, set out a number of factors which might be relevant when determining whether to allow an amendment. Such factors included: that the oversight which occurred is adequately explained as, for example, that it arose out of sudden and unexpected events; that the proposed amendment is of considerable importance to the rights of a party, particularly where it provides a complete answer to a claim; that any fault is that of the party's legal representatives; that the oversight was wholly accidental; that it was simply the product of unavoidable human error or even the outcome of the application to the case of fresh legal minds who perceived an important new point; that costs orders or the imposition of other conditions could adequately rebalance the competing claims to justice; and that the hearing date is sufficiently in the future to permit a party to meet the amendment, taking into account any consequences for the gathering of fresh evidence, the conduct of discovery or like pre-trial procedures and the loss of assigned hearing dates.

27 In Sali, Brennan, Deane and McHugh JJ cited Maxwell v Keun [1928] 1 KB 645 at 650, 657, 658 where the English Court of Appeal held that, although an appellant court will be slow to interfere with the discretion of a trial judge to refuse an adjournment, it will do so if the refusal will result in a denial of justice to the applicant and the adjournment will not result in any injustice to any other party. That proposition has since become firmly established and has been applied by the appellate courts on many occasions. Moreover, the judgment Atkin J in Maxwell has also been taken to establish a further proposition: an adjournment which, if refused, would result in a serious injustice to the applicant should only be refused if that is the only way that justice can be done to another party in the action. However, both propositions were formulated when court lists were not as congested as they are today and the concept of case management had not developed into the sophisticated art that it has now become.

28 In Sydney City Council v Ke-su Investments Pty Ltd (1985) 1 NSWLR 246 Kirby P, in relation to an adjournment application stated:

“If not granted, although appeals courts will rarely intervene to review the refusal of an adjournment, they will do so if the discretion had not been exercised judicially or where its exercise was based upon the wrong principle or resulted in gross injustice.”

29 It is my view that where a matter has been listed for hearing and the parties have been given adequate notice of that hearing, a legal representative or client cannot expect that an adjournment will be granted as of right on the day of the hearing. Neither the solicitor nor Mr McKnight, who himself was a solicitor and had carriage of the matter on behalf of the Owners Corporation, should have assumed an adjournment would be granted as a matter of course where there was an outstanding report to be served. Both the client and solicitor should have ensured that their legal representative was in a position to proceed with the hearing on the evidence they had available in the event that the adjournment application was refused. The client instructed a solicitor at a very late stage, namely the day before the hearing. The plaintiff’s solicitor had the opportunity to put her submissions before the Tribunal. It is my view that in these circumstances there has not been a denial of procedural fairness. The discretion has been a proper exercise of judicial discretion. This is not a case where this Court would interfere with the discretionary decision of the Tribunal Member. The decision of the Tribunal Member is affirmed. The summons is dismissed.

30 Costs normally follow the event. The plaintiff is to pay the second defendant’s costs as agreed or assessed.

31 The Court orders that:

(1) The decision of Tribunal Member Durie dated 16 August 2002 is affirmed.

(2) The summons is dismissed.

(3) The plaintiff is to pay the second defendant’s costs as agreed or assessed.
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Last Modified: 08/18/2003