The Owners of Strata Plan 2699 v Irving

[2003] NSWSC 1172

CITATION:	The Owners of Strata Plan 2699 v Irving [2003] NSWSC 1172
HEARING DATE(S):	8 December 2003
JUDGMENT DATE:	11 December 2003
JURISDICTION:	Common Law
JUDGMENT OF:	Master Harrison
DECISION:	(1) The appeal is dismissed; (2) The amended summons filed 8 December 2003 is dismissed; (3) The applicant is to pay the respondent's costs as agreed or assessed.
CATCHWORDS:	Appeal decision of Local Court assessor - denial of natural justice
LEGISLATION CITED:	Local Court (Civil Claims) Act 1970 - s 69 Strata Management Act 1996 - s 62
CASES CITED:	Australian Broadcasting Tribunal v Bond Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 Kojima v Australian Chinese Newspapers [2000] NSWSC 1153 Re Minister for Immigration and Multicultural affairs; Ex Parte Lam (2003) 77 ALJR 699 Wakim v Mathiew Pty Ltd [2002] NSWSC 405
PARTIES :	The Owners of Strata Plan 2699 (Plaintiff) Cameron Mackie Irving (Defendant)
FILE NUMBER(S):	SC 11580/2003
COUNSEL:	Mr F Assaf (Plaintiff) Mr H Packer (Defendant)
SOLICITORS:	McCulloch & Buggy (Plaintiff) Messrs Stuart & Mills (Defendant)

LOWER COURTJURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	3587/2002
LOWER COURT JUDICIAL OFFICER :	Assessor Roberts

- 10 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

THURSDAY, 11 DECEMBER 2003

11580/2003 THE OWNERS OF STRATA PLAN 2699 v CAMERON MACKIE IRVING

JUDGMENT (Appeal decision of Local Court assessor - denial of natural justice)

1 MASTER: By amended summons filed 8 December 2003, the applicant appeals by way of s 69 of the Local Court (Civil Claims) Act 1970 (the Act) against the decision of Assessor Roberts of 10 June 2003 that it was liable for damage to the repondent’s vehicle in the amount of $1,375.00 and seeks an order that an award be entered in its favour in respect of those proceedings. The appeal is made on the grounds of a denial of natural justice. The applicant relied on its affidavit sworn 29 August 2003. The respondent is Mr Cameron Mackie Irving. The List Judge referred this matter to a Master for a hearing.

2 Section 69(2A) of the Act allows an appeal to this Court from the Small Claims Division of a Court only on the grounds of lack of jurisdiction or a denial of natural justice. Section 69(4) of the Act provides that the court may determine an appeal by either (a) setting the judgment or order aside or (b) by varying the terms of the judgment or order or (c) by setting the judgment or order aside and remitting the matter for determination in accordance with the court’s directions or (d) by dismissing the appeal.

3 The applicant, who was the defendant in the Local Court proceedings, appeals against a claim made by the respondent for the cost of the damage to his car caused by an awning on the applicant’s property falling onto the respondent’s car during storms in December 2001. He claimed the sum of $1,375.00, which was the cost of repairs to his vehicle. The respondent had paid for those repairs and sought reimbursement from the owners of the Strata Plan 2699. They refused to reimburse him. The applicant submitted that there was denial of natural justice in that the Assessor, firstly, failed to act judicially and, secondly, failed to give the applicant the opportunity of adequately presenting its case by granting an adjournment.

Failure to grant an adjournment

4 Mr Phillips provided statements to both the plaintiff (2 June 2003) and the defendant (6 July 2003). The difficulty arose because his statements were inconsistent in one crucial matter, namely whether or not he observed any damage to Mr Irving’s motor vehicle. In the statement of 2 June Mr Phillips relevantly stated at [4]:

“In about December, 2001, I saw an awning on the ground outside the building entrance at the above strata plan. I also saw that the awning that had been located over the building entrance was missing. I picked up the awning from the ground and put it in a corner so that it would not cause any damage. I saw 3 vehicles in the car park outside the entrance and Mr Irving’s vehicle was one of them. I checked all of the 3 vehicles and did not see any damage.”

5 In the statement of 6 June, however, Mr Phillips stated at [2]-[3]:

“I recall that following a storm which occurred in the week of 17 December 2001, an awning situated above the main entrance to the building at 49B Upper Pitt Street, Kirribilli, together with pieces of roof flashing, became dislodged and fell to the ground.
Immediately after the storm, I recall inspecting damage caused to the vehicle which I knew was the property of Mr Irving, that damage being caused by either the fallen awning or the pieces of roof flashing which were lying in close proximity to the vehicle.”

6 Earlier (namely on 14 May 2003) Mr Phillips provided a statement, this time to the Strata Manager. In this statement Mr Phillips stated that, along with a husband and wife from unit 4, he inspected the four cars in the driveway and they remarked that: “lucky no damage was done to any of the cars.” In this statement he continued “…so I can only assume the damage to the car in question was done the night after, or at a later day, because the storm that brought down the canopy was not a one off, we had metal capping 3 metre long blown from the roof along with asphalt roof covering membrane approx 100 sq metre.”

7 The applicant submitted that the procedure adopted by the Assessor was manifestly unfair and referred to Re Minister for Immigration and Multicultural Affairs; Ex Parte Lam (2003) 77 ALJR 699, where Gleeson CJ said at 706:

“Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of law is to avoid practical injustice.”

8 The applicant submitted that in the present case, the decision by the Assessor to admit the second statement of Mr Phillips on the day of the hearing coupled with the decision to refuse an adjournment for the purposes of obtaining further evidence/instructions resulted in “practical injustice” and that the Assessor's decision to refuse an adjournment for the purposes of obtaining further evidence and/or instructions from Mr Phillips adversely effected the entitlement of the applicant to make submissions on a crucial issue of fact, namely whether the evidence of Mr Phillips should be accepted. It is further submitted that the applicant was denied an opportunity to confer with its own witness who had given inconsistent evidence, which was particularly important given the weight attached to Mr Phillips’ evidence in the case.

9 When the statement of 6 June 2003 was put to the applicant’s counsel in the Local Court proceedings the following exchange took place as recorded at p2-3 of the transcript:

“Can I just alert everyone to this, that if in fact I decide that Mr Phillips's evidence is so unreliable because of the contradictory - and I refer you specifically to paragraph 4 and 5 of Mr Phillips's statement to the defendant dated 2 June, and if you compare that to paragraph 3 of Mr Phillip's statement to I just alert you to the fact the defendant in fact has no evidence at all to present to the Court. I have now done what the case of Ford v Queensland Housing Commission says. I've told you what I've noted. It's up to the parties as to how they react to that. I have no problem dealing with this but at the moment I think I would have a greater concern for the defendant perhaps than the plaintiff because Mr Phillips in his statement to the defendant says that he inspected the vehicle and there was no damage, and he tells Mr Irving that in fact he inspected damage to the vehicle. So therefore if I decide Mr Phillips is so unreliable because of the contradictory nature of his evidence, let alone what he's now said in defence of Mr Mifsud, well it's not my job to run the defendant's case but that leaves the defendant without any evidence at all basically. Do you two wish to talk about this before I decide what I do next?

KOZLOWSKI: Well I'd like to object to the plaintiff's statements of Mr Irving and Mr Phillips.

ASSESSOR: That's alright, as long as you understand ma’am that if I rule out Mr Phillips’s statement for the plaintiff, I’m concerned that Mr Phillips is such an unreliable witness because of the contradictory nature of his evidence, I’m concerned that I should give his evidence any weight at all. I’ve already pointed out the Court sees that paragraph 4 and 5 of his statement to your client is a direct contradiction.


KOZLOWSKI: Well we've been caught by surprise by the statements Mr Phillip gave to the plaintiff.

ASSESSOR: Well ma'am, I'm alerting everyone to this.

KOZLOWSKI : I haven’t even read this statement only my supervisor has read it.

ASSESSOR: Your supervisor shouldn't send you to Court ma'am if you haven't read the evidence.

KOZLOWSKI: Well I was in Court all morning.
ASSESSOR: That doesn't help your client.


KOZLOWSKI: I haven't been provided with a copy...

10 Later in the proceedings the Assessor (t 3) referred once more to Mr Phillips’s contradictory statements, to which counsel replied:

“KOZLOWSKI: Well Mr Stewart has told me about it just half an hour before the hearing. He has read the statement Mr Stewart for the plaintiff faxed through to him and my instructions are that Mr Stewart wants to object to the statement.

ASSESSOR: I'm not worried about what Mr Stewart wants to do, ma'am. I apologise for this, but you've been sent down here so what do you want to do, ma'am?

KOZLOWSKI: Well I object to the statement of Mr Phillips as provided to the plaintiff.

ASSESSOR: On what basis, ma'am?

KOZLOWSKI: On the basis that it raises new allegations and the plaintiff hasn't complied with the rules because it's been served out of time, and the statement is prejudicial to our case.

ASSESSOR: But he's your witness, ma'am...”

11 At t 3.55 the assessor stated “No-one is asking for this case to go over …everyone is happy for the case to proceed.” The solicitor for the applicant was served with the statement of Mr Phillips on the morning of the hearing. The case was not reached until midday.

12 In Wakim v Mathiew Pty Ltd [2002] NSWSC 405, the plaintiff challenged the decision of a Magistrate on the basis there had been a denial of natural justice in the Small Claims Division of the Local Court. The denial of natural justice asserted was that the proceedings were heard and determined on the basis of a written statement from the plaintiff and a written statement from the defendant without allowing the legal representatives of either party to cross-examine the makers of the statements. It was argued that, in the absence of the calling of witnesses and their cross-examination, the learned magistrate was required to speculate on the issue of the factual conflict between the parties as set out in the written statements produced and read by the magistrate and the pleadings filed and submissions made on behalf of the parties to the proceedings. At call-over, the Registrar had directed that the action proceed on the basis of written statements and not on oral evidence. Both parties had exchanged written statements on the day of the hearing.

13 O’Keefe J found that there had been no denial of natural justice. In reaching his decision O’Keefe J referred, at [27], to the decision of Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487. In that case, Aickin J (Stephen J concurring) said at 516:

“I do not think that fairness requires in this context an oral hearing though in some circumstances the Commission may well find that it cannot resolve inconsistencies between its information and written submissions from the person concerned without such a hearing. It is however for the Commission itself to devise its own procedures in the light of its obligation to act fairly.”

14 O’Keefe J stated that the requirements of natural justice may not confer on a party the right to cross-examine a witness. His Honour then said at [30]:

“There may, however, be cases in which the denial of an oral hearing or of the right to cross-examine may constitute a denial of natural justice. In determining whether or not that is so in a given case, it is necessary to consider the whole of the circumstances including the legislation, the general practice as understood by the parties and any acceptance by them as to the way in which the proceedings are to be conducted. The Practice Note to which reference has been made is material in this regard. It is for the relevant tribunal, in this case the Small Claims Division of the Local Court, to determine such matters in the light of its obligation to act fairly.”

15 In these Local Court proceedings, the solicitor appearing for the defendant was offered the opportunity to consult with her supervisor to obtain instructions as to the contradictory statement of Mr Phillips (t 3.8-12). The solicitor could have taken the opportunity to contact Mr Phillips during the morning after she had been appraised of the contents of the second statement by her supervising solicitor and prior to the matter being called on for hearing at noon. She did not elect to do so. The solicitor did not seek an adjournment. She could have done so. In these circumstances there has been no denial of natural justice.

Failure to act judicially

16 The applicant referred the court to Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, where at 367, Deane J explained what is meant by "acting judicially" as follows:

"If a statutory tribunal is required to act judicially it must act rationally and reasonably. Of its nature, a duty to act judicially (or in accordance with the requirements of procedural fairness or natural justice) excludes the right to decide arbitrarily, irrationally or unreasonably ... When the process of decision making is disclosed, there will be a discernible breach of the duty if findings of fact upon which a decision is based are unsupported by probative material and if inferences of fact upon which such a decision is based cannot reasonably be drawn from such findings of fact. Breach of a duty to act judicially constitutes an error of law which will vitiate the decision."

17 The applicant submitted that, while the respondent’s statement of claim did not disclose an action in negligence or breach of statutory duty, this was, however, presumably the case advanced by the respondent. According to the applicant, there was an absence of evidence in respect of negligence/breach of statutory duty of breach (such as s 62 of the Strata Management Act 1996) and in relation to causation. The respondent submitted that, although negligence was not pleaded by it, there was ample and compelling evidence, much of it evidence of the applicant, in support of the case brought by the respondent.

18 In Kojima v Australian Chinese Newspapers [2000] NSWSC 1153 O’Keefe J helpfully referred to the objectives of the Small Claims Division. I have reproduced paragraphs 17 to 20 of his Honour’s judgment below.

“17 The Local Courts (Civil Claims) Act 1970 (the Act) provides that for the purposes of exercising the jurisdiction conferred on courts by or under the Act, the court is divided into a General Division and a Small Claims Division (s.61). The jurisdiction of the court in its Small Claims Division may be exercised by an Assessor or a Magistrate sitting alone (s.63). The jurisdiction of the court sitting in its Small Claims Division was, at the material time, limited to $3,000 (s.12(3)). In September 2000 this jurisdictional limit was increased to $10,000.

18 The statutory basis for the procedure in the Small Claims Division is specified in s.23B of the Act as follows:
“(1) Proceedings in the Small Claims Division of a court are to be conducted with as little formality and technicality as the proper consideration of the matter permits.
(2) The rules of evidence do not apply to an action being heard or other proceedings in the Small Claims Division of a court.
(3) An Assessor or Magistrate exercising the jurisdiction conferred on a court sitting in its Small Claims Division may inform himself or herself on any matter relating to an action being heard or other proceedings in the Small Claims Division in such manner as he or she thinks fit.
(4) Proceedings in the Small Claims Division of a court (other than any judgment given or order made in respect of the proceedings) are not required to be recorded.”

19 A clear legislative policy emerges from the Act in relation to small claims, namely, that there should be a quick, cheap and informal resolution of such claims. To achieve this, the proceedings should be conducted with the minimum of formality. That has many advantages. It tends to shorten proceedings. It assists in reducing costs. It makes it easier for litigants in person to understand the procedures, perhaps to appear for themselves and not be disadvantaged by excessive formality and procedural rules. Furthermore, the legislation has been so framed as to ensure to the greatest extent possible that claims before the Small Claims Division of the Local Court should begin and end in that court. The limitation on the right of appeal permitted by the statute betokens this. Such a policy is readily understandable in the light of the fact that the ceiling for claims in the Small Claims Division is so low, $3,000 at the material time. Taking up the time of superior courts with such small matters is thus avoided in the vast majority of cases.

20 It is against such a legislative framework and intent that the Small Claims Division of the Local Court has evolved procedures for dealing with small claims. These are largely the work of the late Mr K Henderson, Magistrate, and has been followed for some years. There are different forms of hearing open to the parties to accept in order to progress their claims with a minimum of expense and formality and maximum of speed, having regard to the amount involved and issues posed in each case. They are:

(a) informal hearing, that is a procedure in which written statements and relevant documentation is presented without the necessity or expense of witnesses attending. No oral evidence is given and there is no cross-examination;

(b) semi-formal hearing, that is a procedure adopted in a case in which it is considered necessary that a witness or witnesses should be questioned by the parties after their written statements have been tendered;

(c) formal hearing, that is a procedure in which evidence is taken on oath and there is cross-examination and addresses in the same way as in an ordinary adversarial proceeding in a superior court.”

19 In his reasons for judgment the assessor stated:

“…The statement of claim pleads at all material times Mr Irving was a resident and had parked his vehicle in a parking space on the north side of the common property. That has never been refuted or denied. Then in December 2001 a metal and canvas awning affixed to the common property became attached from the building and fell onto the plaintiff’s motor vehicle. The defendant’s own evidence concedes that. The evidence of Strata Master Pty Limited is precisely to that effect. The evidence of Mr Phillips to the plaintiff is to that effect. As a result the plaintiff’s vehicle was damaged. The evidence of Mr Teesdale is to that effect.”

20 There was evidence to show that the awning broke and the windscreen of the respondent’s car was damaged and that the cost of repair was $1,375.00. No appeal on a question of law lies in this matter. The parties were given an opportunity to present their cases and make submissions. In my view there has been no denial of natural justice.

21 There has been no denial of natural justice. The appeal is dismissed. The amended summons is dismissed.

22 Costs are discretionary. Normally costs follow the event. The applicant is to pay the respondent’s costs as agreed or assessed.

23 The court orders:

(1) The appeal is dismissed.

(2) The amended summons filed 8 December 2003 is dismissed.

(3) The applicant is to pay the respondent’s costs as agreed or assessed.
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Last Modified: 12/12/2003