Stegbar Pty Ltd v Piscioneri

[2016] SADC 47

District Court of South Australia

(Civil: Minor Civil Review)

STEGBAR PTY LTD v PISCIONERI

[2016] SADC 47

Judgment of His Honour Judge Tilmouth

29 April 2016

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - NATURE OF RIGHT - SCOPE AND EFFECT OF APPEAL

Judgment given in the Minor Civil Claims Jurisdiction rescinded on the basis of erroneous advice as to a limitation of time bar available in the proceedings.

Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487; FAI Insurance Ltd v Winneke (1982) 151 CLR 342; Dixon v Commonwealth (1981) 61 ALR 173; Koutalis v Pollett [2015] FCA 1165; Limitations of Actions Act 1936 (SA) s 35(a), s 48(3), s 48(3)(b)(i) & (ii), s 48(3a), s 48(3b); Lovett v Le Gall (1975) 10 SASR 479; Seas Sapfor Forests Pty Ltd v Electricity Trust of South Australia (1993) 171 LSJS 163; Finlay v Silicon Industries Pty Ltd (2003) 229 LSJS 14; Magistrates Court Act 1991 (SA) s 38(6), s 38(7)(d)(i), s 38(7)(d)(ii), s38(5); District Court Civil Rules 2006 (SA) 6DCR 279A(2), DCR 279A(10)(g); District Court Act 1991 (SA) s 42B(1); Wilczynski & Anor v District Court of South Australia & Ors [2016] SASC 51, referred to.
Uelese v Minister for Immigration and Border Protection (2015) 89 ALJR 498; Harradine v District Court of South Australia (2012) 280 LSJS 572, applied.

STEGBAR PTY LTD v PISCIONERI
[2016] SADC 47

An application for review

1. This is an application to review a judgment given in the Port Adelaide Magistrates court sitting in its Civil (Minor Claims) Jurisdiction on 20 November 2015.  The order giving judgment as endorsed on the court file, reads as follows:

   Defendant agrees to pay $8,000 to the plaintiff within 30 days in full and final settlement of the claim – claim dismissed.

2. The application for review complains that the Magistrate ‘incorrectly advised the applicant that there was no limitation period for civil claims’, and incorrectly advised the applicant that [it] ‘had no case’.  Further bases are that the claim by the respondent Mr Piscioneri was ‘time barred’, and that the Magistrate failed to determine a bona fide defence on the merits.  For reasons to follow the application for review must succeed on procedural grounds, the action re-heard on the merits and the judgment rescinded.

   The underlying action

3. Mr Piscioneri became a sub-contract installer to the applicant Stegbar Pty Ltd (Stegbar) in April 2005.  He attended a sub-contractors meeting convened by Stegbar on 18 November 2005.  During that meeting he claims he and the other sub-contractors were promised a retention bonus of $8,000 plus GST, to entice them to remain contractors between 1 June and 31 December 2006.  The consideration for the bonus was to secure their services with Stegbar, rather than risk them moving to a competitor which had won a major builders contract in preference to Stegbar.

4. When the time came to receive the bonus, Mr Piscioneri claims the ‘CEO informed us that the installers that were not Pty Ltd registered and only sole traders would not be eligible’.

   In support of this contention he produced a one page document on Stegbar letterhead entitled ‘Installer Meeting Friday 18 November 2005’ given to him during this meeting. This is not directed to any particular person or organisation.  Even so it appears at face value to be a genuine agenda for the meeting.[1]  The final item of this one page document reads:

   [1]    The entire document is annexed to this Judgment.

   Retention

   1.Retention Bonus of $8,000 will be honoured.  Payable @ 31 12 06 for all installers who work here at 1 6 05.

5. In its defence filed on 8 July 2015, Stegbar admitted the meeting of 18 December 2005, whilst denying ‘an offer was put in writing … offering a retention bonus of $8,000 plus GST be paid to the plaintiff’.  The defence went on to claim the ‘meeting notes were prepared for internal purposes only’, that it only made the offer of retention bonus to contract installers ‘who were incorporated’, and that as Mr Piscioneri was a sole unincorporated trader, he was not paid the bonus.  The defence further referred to the fact that he continued to provide services to Stegbar for eight and a half years after the retention bonus was paid to incorporated contract installers, and accordingly that the action was out of time.

   Trial proceedings

6. The proceedings before the Magistrate were rather short, taking just ten minutes.  At the outset the Magistrate at first indicated to Mr Piscioneri that as there was no written contract ‘you haven’t got a claim it is as simple as that’.[2]  Mr Howard, the General Manager of Stegbar Pty Ltd, advised the Magistrate there were twenty such contractors, 13 of whom were incorporated and paid the bonus.  He acknowledged the Stegbar document referred to earlier said nothing about that requirement.  He advised the Magistrate as he did to this court, that he was not present at the meeting in 2005, but that he became involved at the end of 2006 and early 2007, when the incorporated contractors were paid the bonus.  He further acknowledged that he had no ‘specific evidence’ advising Mr Piscioneri of the qualified arrangement.

   [2]    T2.14 -.15, 20 November 2015.

7. After these exchanges, the Magistrate advised Mr Howard:[3]

   So it seems to me that if this matter goes to trial he is going to get his money … I don’t think you can rely on [the limitation] bar…to get out of this.  You are hanging your whole case on the fact that he wasn’t incorporated.  You cannot prove that he left [sic] definitely told that he should be incorporated.

   His Honour then pointed out to Mr Howard that Mr Piscioneri ‘acted in good faith, had relied upon his representations as far as they went as far as he was concerned’,[4] before adding:[5]

   So for all intents and purposes the offer was to all your contractors’…. ‘it seems to me he is entitled to his money.  We can go to trial about this and call evidence and whatever but that is the conclusion we are going to reach’.

   [3]    T3.33 - 4.8, 20 November 2015.

   [4]    T4.6 -.4.8.

   [5]    T4.10 -.117. 

8. His Honour next queried Mr Howard ‘so are prepared to consent to the claim?’, causing Mr Howard to ask for some time to get some advice.[6]  However his Honour insisted ‘we will hear a trial now … this should have been considered well before now’.[7]  He then pressed Mr Howard for a second time:[8]

   [6]    T4.19 -.21.

   [7]    T4.22 - .24.

   [8]    T4.36 - 5.5.

   His HonourAlright are you prepared to pay him the $8,000. And we will just call it a day?

   Mr Howard      No

   His HonourSo you still want to defend the matter?

   Mr HowardWell I have no evidence that he wasn’t, it wasn’t explained or wasn’t portrayed at the original meeting. I don’t believe he has any evidence to say that it wasn’t explained to him

   Almost immediately afterwards the following exchange took place:[9]

   His HonourSo on the balance of probability he will win this, because you can’t rebut it

   Mr HowardWell it seems to be that we will have to capitulate

   His HonourWell I can’t tell you what to do but I am telling you how it is going to go.

   [9]    T5.9 - .20.

9. His Honour then explained that falling short of judgement, there could be an agreement resolving the matter by Stegbar paying $8,000, in which event ‘no judgment against the company [it] doesn’t show up in any of your credit circumstances later on … up to you?’[10]  As a consequence Mr Howard literally capitulated ‘We’ll pay’, hence the endorsement on the Magistrates Court file as quoted earlier.[11]

   [10] T5.26 - .34.

   [11] T5.35.

   The application for review

10. In his affidavit filed in support of the application for review, Mr Howard explains that he was expecting the Magistrate would hear evidence and arguments from both parties before making a decision about the claim.  In it he further explains that he ‘felt like I had been railroaded into saying that I would pay the amount’, on the understanding the Magistrate was correct in stating there was no time limit and telling him ‘there was no defence to the respondent’s claim’.[12]  He deposes to having internal discussions about the outcomes before seeking legal advice on 21 December 2015, following which Stegbar determined to issue the application for review and therefore to seek an extension of time in which to do so.

    [12] Affidavit 24 12 2015, para 12, FDN 10.

11. In a written submission filed in the review process, a solicitor for Stegbar argued amongst other things, that the action was statute barred, as an action founded upon any simple contract.

    The small claims trial process 

12. Magistrates are required to conduct proceedings in minor civil claims by means of an enquiry ‘rather than as an adversarial contest, and they are neither bound by the rules of evidence, nor technicalities and legal forms’: Magistrates Court Act 1991 (SA) s 38. The Minor Civil procedures envisage an ‘informal and practical approach’ ensuring ‘proceedings are conducted in an efficient manner, commensurate with the limited size (in financial terms) of those issues at stake’: Wilczynski & Anor v District Court of South Australia & Ors.[13]

    [13] [2016] SASC 51, [43].

13. Even so, the fundamentals of a fair trial are not thereby displaced, as the court remains ‘subject to the requirements of procedural fairness’: Uelese v Minister for Immigration and Border Protection.[14]  Amongst other things, the fundamental precepts of natural justice include the opportunity to be confronted with material upon which a party is proposed to be contradicted, and the right to be given an opportunity to explain any matter upon which the court might make adverse findings: Heatley v Tasmanian Racing and Gaming Commission,[15] FAI Insurance Ltd v Winneke,[16] Dixon v Commonwealth.[17]  Equally giving reasons for judgment is an essential requirement of the small claims procedure: Koutalis v Pollett.[18]  

    [14] (2015) 89 ALJR 498, [102], and the authorities referred to in footnote 64.

    [15] (1977) 137 CLR 487, 499.

    [16] (1982) 151 CLR 342, 383-384.

    [17] (1981) 61 ALR 173, 179.

    [18] [2015] FCA 1165, [40].

    The review process

14. The right of review against decisions given in the small claims jurisdiction, is conferred by s 38(6) of the Magistrates Court Act 1991 (SA). Section 38(7)(d)(i) and (ii) thereof, furnish the District Court with powers of affirmation and rescission, as well as the capacity to ‘substitute a judgment … [it] … considers appropriate’. The Magistrates Court Act is otherwise silent as to the period in which such applications must be duly instituted.  However Chapter 6DCR 279A(2) of the District Court Civil Rules 2006 (SA) deals with reviews by the District Court, principally those under s 38 of the Magistrates Court Act, by requiring that ‘applications must be commenced within 21 calendar days after the date of the judgment or decision subject to the review’.  The present application for review was filed on 24 December 2015, that is to say approximately 10 or so days out of time.

15. There is on the other hand no power of remission, except in respect of reviews against default or summary judgments: s 38(7)(d)(iii) of the Magistrates Court Act. These rights of review are not governed by the administrative and disciplinary sections contained in Part 6 Subdivisions 1-3 of the District Court Act 1991 (SA), because the Magistrates Court Act itself comprehensively provides for review procedures and powers of dispossession: s 42B(1) of the District Court Act.  The application for review therefore stands to be determined according to the principles summarised by Blue J in Harradine v District Court of South Australia.[19]

    [19] (2012) 280 LSJS 572; [2012] SASC 96, [53].

16. Should this court conclude in the review process that a Magistrate made an error vitiating the judgment or order, it becomes necessary to re-hear the evidence pertaining to the flawed findings, given that it does not enjoy the power to remit for re-hearing: Harradine v District Court of South Australia.[20]  For reasons given later, this is what was done in this instance.

    [20] Ibid [53] (5).

17. Putting aside other aspects of the course of the proceedings below, the review must succeed because his Honour clearly erred when stating that Stegbar was not entitled to raise the limitation issue.  It is obvious from the transcript quoted at length above that Mr Howard reluctantly succumbed to an order on the strength of this assertion.  Section 35(a) of the Limitations of Actions Act 1936 (SA) provides actions ‘founded upon any simple contract express or implied’, must be ‘commenced within six years next after the cause of action accrued and not after’.  The underlying proceedings were such an action.  Assuming in favour of Mr Piscioneri that his cause of action accrued on 31 December 2006 rather than in November 2005, his originating action filed in the lower court on 19 June 2015, was quite obviously significantly out of time, by some two and a half years in fact.

    Review on the merits

18. Mr Piscioneri was however entitled to apply for an extension of time pursuant to s 48(3) of the Limitations of Actions Act.  The circumstances of the case must be such that it is just to grant an extension of time.  The twin foundations for extensions arise if there exist facts material to his case not ascertained by him until some point of time occurring within twelve months before the expiration of the period of limitation under s 48(3)(b)(i), or his failure to institute the action within time resulted from representations or conduct of Stegbar, under s 48(3)(b)(ii) thereof.

19. When considering the grant of an extension of time in either instance, the court is required to assess the matters set forth in s 48(3b) of the Limitations of Actions Act, namely:

    (3b)In determining whether it is, in all the circumstances of a case, just to grant an extension of time, the court should have regard to—

    (a)the period of extension sought and, in particular, whether the passage of time has prejudiced a fair trial; and

    (b)the desirability of bringing litigation to an end within a reasonable period and thus promoting a more certain basis for the calculation of insurance premiums; and

    (c)the nature and extent of the plaintiff's loss and the conduct of the parties generally; and

    (d)any other relevant factor.

20. Before reaching that stage of the extension process, Mr Piscioneri must first satisfy one or other of the limbs under ss 48(3)(b)(i) or (ii) of the Limitations of Actions Act.  Satisfaction of either is a condition precedent to the exercise of the discretion to extend which once satisfied, the Court may take into account the entire conduct of the parties, whether before or after the limitation period expires: Lovett v Le Gall,[21] Seas Sapfor Forests Pty Ltd v Electricity Trust of South Australia.[22]  There are no material facts of the kind contemplated by the former, still less any that could fall within the descriptions of comprising an essential element of his cause of action, or having a major significance on an assessment of his loss as required by s 48(3a) thereof.

    [21] (1975) 10 SASR 479, 489.

    [22] (1993) 171 LSJS 163, 165.

21. That brings the inquiry to consider if the failure to institute the action resulted from representations or conduct on Stegbar’s part.  Despite the refusal to honour the agreement, Mr Piscioneri remained with Stegbar as a sub-contractor until the beginning of 2014.[23] He frankly told this court he remained with Stegbar ‘Cos everything else seemed all right … I was getting paid every week…’,[24] and ‘I didn’t think it was viable to take someone to court while you’re working for them’.[25]

    [23] T8.37-9.1, T17.4, T18.18, 11 April 2016 (all transcript references hereafter are to this date, the transcript on review).

    [24] T18.22-.28.

    [25] T9.37-.38.

22. In Finlay v Silicon Industries Pty Ltd,[26] a trial Judge’s decision to grant an extension of time was upheld on the basis of ‘deliberately obstructive’ conduct by the defendant.  Nothing remotely of the kind emerges here.  Admittedly Mr Piscioneri seems to have been told early on that ‘I don’t need to worry about that … cos I was asking for it while I was working there, it should still be open’, and that he may have kept raising the issue ‘probably every year, year and a half, reminding them, yet Stegbar ‘just always pushed it under the carpet’ by telling him that ‘you need to become a company’.[27]  That stance would however only serve to promote action rather than inaction.  Furthermore it appears tolerably clear the offer remained open on the contingency of incorporation.  In any case Mr Piscioneri accepted that when Mr Howard became involved, he was consistently told thereafter ‘(Y)ou have to … become a company’.[28]  Furthermore Mr Howard recollected the last time the issue was raised was in March 2007.[29]

    [26] (2003) 229 LSJS 14 at [88]-[89].

    [27] T9.29-30 18.18-21.

    [28] T9.33-35, 18.12-.13.

    [29] T10.11-.18, 17.2-.5.

23. There is simply nothing to enliven the threshold requirement to satisfy the court that anything in the conduct of Stegbar led Mr Piscioneri to forbear from bringing proceedings any sooner.  As seen above, he did so for his own reasons.  In point of fact he only did so well after ending his relationship with Stegbar.

24. It can be acknowledged that in acting on the understanding that he would be paid the bonus, Mr Piscioneri stayed with Stegbar as he promised, when he might have secured better conditions with a competitor.  However as things stand, there is simply no sufficient basis to allow him an extension of time in which to bring his originating process, despite the underlying merits.

25. Given this conclusion there it is strictly unnecessary to embark upon the merits of the claim, although as the parties were unrepresented, it is perhaps desirable to deal with it.  The record of the meeting of November 2005 has every appearance of a genuine Stegbar business record.  As such it refers to the bonus issue in the nature of admissions.  It marries in style and graphics with an advertisement produced by Mr Piscioneri during the review dated 2013, stating Stegbar would ‘take proprietary limited or sole traders’.[30]  It is not admissible as evidence of the truth of a latter statement, as policy in 2013 could have been very different in 2005-2007.  It is on the other hand, admissible as supporting the provenance of the record of the meeting in 2005.  The minute of the meeting is relatively exhaustive of the matters to which it refers.  There is no mention in any guise of the bonus offered on qualified terms.

    [30] T13.22-.23.

26. There was good reason from Stegbar’s point of view to offer a bonus in the circumstances, as ‘poaching’ sub-contractors as Mr Howard volunteered, was ‘always’ a problem.[31]  It appears that the decision to insist on payment to corporate contractors later sprung from advice given around the time the payments fell due and when coincidentally there was a change in management at Stegbar.[32]  At this time Mr Howard ‘approached management’ to be told it was ‘in the hands of head office … and they’ll get back to us.’  This recollection resonates with Mr Piscioneri’s own memory, which was that he was telephoned by an accountant of Stegbar’s, only to be told ‘the bonus will not be paid to yourself as you are not a proprietary limited’.[33]  Upon immediately querying this stance he was advised ‘… it’s out of my hands, that’s what I’ve been instructed to tell you by head office’.[34]

    [31] T11.28-.35.

    [32] T8.5-.7.

    [33] T8.10-.16.

    [34] T8.17-.20.

27. This policy was understandable enough.  It served to avoid the appearance of an ‘employee/employer’ relationship by putting ‘a distinct line between Stegbar and sub-contractors for taxation purposes’, as Mr Howard expressed it.[35]  Nevertheless, despite the claim that there may be other documents which cannot now be found relating to the subject meeting,[36] the dovetailing of accounts in the way events unfolded strongly indicates a distinct change of policy by the company with the advent of new management, and correspondingly that the qualification concerning the bonus payment was not in place in November 2005, and even if it was, that it formed no part of this contingency arrangement.

    [35] T5.3.13.

    [36] T4.33-.34, 11.5-.9.

1. Had this issue been raised at the meeting with the sub-contractors, it is highly likely to have created resistance from the affected contractors.  More than that, it was not in Stegbar’s interests to raise the qualification then, as they were already vulnerable to poaching, which was the very reason why the bonus was offered in the first place.  To have brought it up during the November 2005 meeting was inherently likely to act as a counter-productive inducement to the disaffected sub-contractors to leave.  Whatever the situation, there could not have been any meeting of minds about the supposed qualification, even if raised at the meeting, which is to be doubted for the reasons given.

2. On this understanding of matters, had Mr Piscioneri brought his action within time, he was more likely to be successful than not.  Even so, should he have persuaded this court of an entitlement to an extension of time and the payment of $8,000, he would nevertheless have struggled to secure an award of interest as a discretionary exercise, given the abject delay and his own considered reasons for it.  Expressed in lay terms, he cannot have it both ways.

3. Nothing herein should be taken as expressing one way or the other, any view as to whether the selective practice of paying sub-contractors amounts to unconscionable conduct or unconscionable conduct in connection with goods or services within the meaning of ss 21 and 22 of the Competition and Consumer Act 2010 (Cth), Schedule 2 of the Australian Consumer Law, or an unlawful restraint of trade, as no such issues were raised at any stage of the proceedings.

   Conclusion and orders

4. The Magistrate erred in advising Stegbar that it could not rely on its plea in bar under the statute of limitations. As Mr Howard’s submission to the order recording a consent determination was premised on the correctness of an erroneous legal proposition, the application for review must succeed. Accordingly there will be orders giving Stegbar an extension of time in which to bring the application for review, rescinding the judgment dismissing Mr Piscioneri’s action and recording the agreement to pay pursuant to s 38(7)(d)(ii) of the Magistrates Court Act.  As the only power of disposition is that of substituting ‘a judgment that the court considers appropriate’ thereunder, the order on review is simply that the action instituted by Mr Piscioneri in the small claims jurisdiction of the Port Adelaide Magistrates Court on 19 June 2015, is dismissed.

5. In keeping with s 38(5) of the Magistrates Court Act and DCR 279A(10)(g) of the District Court Civil Rules, there will be no order for costs in the lower court or on review.

   Annexure