Zanjani v Sutcliffe
[2002] VSC 282
•23 July 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 7273 of 2001
| SOHILA ZANJANI | Appellant |
| v | |
| PHILIP SUTCLIFFE and RUTH SUTCLIFFE | Respondents |
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JUDGE: | Balmford J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 June 2002 | |
DATE OF JUDGMENT: | 23 July 2002 | |
CASE MAY BE CITED AS: | Zanjani v Sutcliffe | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 282 | |
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FAIR TRADING – appeal from the Victorian Civil and Administrative Tribunal – appeal dismissed – claim to recover legal costs under the appellant’s guarantee – question in the Notice of Appeal not raised below – the jurisdiction of the Tribunal under the Fair Trading Act – application to vary the Tribunal’s order to include barrister’s fees not allowed
Fair Trading Act 1999 – sections 107, 108
Victoria Civil and Administrative Tribunal Act 1998 – section 148
City of Greater Geelong v Herd (1997) 94 LGERA 149
Coulton v Holocombe (1986) 162 CLR 1
Geelong Building Society (in liq) v Encel [1996] 1 VR 594
Mond v Lipshut [1999] 2 VR 342
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr J D Mattin | Jamie King & Associates |
| For the Respondents | Mr J P Moore | Not applicable |
HER HONOUR:
Introduction
This is an appeal on a question of law under section 148 of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”) against a decision of the Victorian Civil and Administrative Tribunal (“the Tribunal”), constituted by Mr Peter Eggleston, Member, made on 25 July 2001 in its Civil Claims List. The appellant (“Ms Zanjani”) was the respondent before the Tribunal, and the respondents (“the Sutcliffes”) were the applicants before the Tribunal. The firm of Kelly & Chapman, solicitors, was joined pursuant to section 60 of the VCAT Act on the basis that it was a “sufficiently interested party”.
Leave to appeal out of time was granted on 27 September 2001 by this Court and on the same date Master Wheeler ordered that the questions of law to be included in the Notice of Appeal were:
(a)In circumstances where the applicant made a recommendation as to the retention of a firm of solicitors (to wit Kelly & Chapman “the sufficiently interested party”) on 31 May 1999, did the Tribunal have jurisdiction to entertain a complaint for a claim for damages pursuant to the Fair Trading Act 1999 [“the Fair Trading Act”] proclaimed on 1 September 1999.
(b)Having found that Downtown Access Pty Ltd [“Downtown”] was the client (see paragraph 7(b) of the exhibit SZ-11 to the affidavit of Sohila Zanjani sworn 31 August 2001) of Kelly & Chapman in respect to the domestic building dispute, was it open to the Tribunal to order that the applicant pay to the respondents damages calculated by reference to fees paid in respect of such dispute.
A third question of law was included in the Notice of Appeal, apparently by oversight, and, properly, was not pressed.
Ms Zanjani conducts a business under the name “Prime Law Brokers”. An advertisement for that business appearing under the heading “Solicitors” in the Melbourne Yellow Pages Telephone Directory, presumably in the edition current at 31 May 1999, as to which see [14] below, reads as follows, so far as relevant:
Call us for FREE 24 hr. instant, confidential advice, cost estimate & professional assistance in choosing the right lawyer at the best price in all legal matters (inc. “No Win No Fee” cases).
We GUARANTEE you’ll be totally satisfied with the lawyer we recommend, or WE’LL PAY FOR YOUR LEGAL COSTS
The order of the Tribunal (including its reasons, see section 117(6) of the VCAT Act) reads in full:
The Tribunal orders:
That after hearing evidence and submissions from Mr and Mrs Sutcliffe the Applicants, Ms Zanjani for the Respondent and Mr Chapman for the Sufficiently Interested Party, I find as follows –
1.The Applicants’ company Downtown Access Pty Ltd was involved in litigation in the Domestic Building List at Victorian Civil and Administrative Tribunal. The litigation was being conducted by solicitors with whom the Applicants were not happy.
2.The Applicants through the Respondent sought to obtain a different firm of solicitors to act upon their behalf. Previously, according to the Applicants they had sought to obtain another lawyer through the Law Institute of Victoria who were only prepared to provide a list of lawyers. The Applicants were attracted to the Respondent through the Respondent’s advertising. The pertinent aspect of the Respondent’s advertisement was –
“We guarantee you’ll be totally satisfied with the lawyer we recommend or we’ll pay your legal costs.”
3.As a result of discussions with the Respondents, the Applicants subsequently engaged the Sufficiently Interested Party to act upon their behalf in June 1999 in reference a matter at the Domestic Building List of Victorian Civil and Administrative Tribunal.
4.That matter proceeded at Victorian Civil and Administrative Tribunal to a stage where it became apparent that a considerable amount of money had to be obtained by the Applicants in order to be able to proceed with the Victorian Civil and Administrative Tribunal hearing. The Sufficiently Interested Party on the Applicants’ behalf sought to obtain fund backing through a Mr Ian Lock of Sheahan and Coope Accountants.
5.The Applicants after meeting with Mr Lock agreed to place their company into Administration. Subsequently, the company went into liquidation with the Victorian Civil and Administrative Tribunal legal rights of action with the liquidator.
6.The liquidator obtained an independent legal opinion as to the merits [of] proceeding with the action and as a result of obtaining that opinion indicated to the Applicants that they were not able to get funding.
7.I find on the evidence the following –
(a)that Messrs Kelly and Chapman did not through their actions cause the Domestic Building claim to be stayed.
(b)that I accept that Downtown Access Pty Ltd were the Sufficiently Interested Party’s client in respect to the Domestic Building claim but that specially in reference to the request for outside funding Messrs Kelly and Chapman were also acting for the Applicants in their capacities as directors of the company.
(c)that the efforts of Messrs Kelly and Chapman in attempting to obtain funding for the Victorian Civil and Administrative Tribunal claim was not improper or unreasonable.
(d)I accept that Messrs Kelly and Chapman were creditors of the company at the time the company went into liquidation.
(e)I accept that the Sufficiently Interested Party has provided the Applicants with reasonable and proper advice as to the prospects of success of the Applicants’ Domestic Building List application.
8.(a)I find on the evidence therefore that the Sufficiently Interested Party carried out their instructions properly and reasonably. I do however find that there was a perception from the Applicants that they believed that they were not properly informed of the full situation and had the legal intricacies explained to them in sufficient detail so as to have them make an informed decision at each step.
(b)Given the Applicants’ perception and their level of disappointment with their solicitors and the reliance by the Applicants on the initial advertisement by the Respondent. I find that the Applicants are entitled to invoke the clause contained with the Respondent‘s advertisement and have the Respondent refund their money in respect to their lawyers costs. There has been no disappointment expressed by the Applicants with their barristers and I therefore order that the Respondent pay to the Applicants the sum of $9,000.
9.I dismiss the claim against Sufficiently Interested Party.
Point not raised below
Mr Moore, for the Sutcliffes, submitted that neither of the questions raised in the Notice of Appeal had been raised before the Tribunal, and accordingly they were not available to be raised in this Court, given that each could have been the subject of further evidence.
Batt J in City of Greater Geelong v Herd[1] found the following often-quoted passage from the judgment of Gibbs CJ and Wilson, Brennan and Dawson JJ in Coulton v Holcombe[2] to be apposite to an appeal on a question of law from a tribunal:
It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. . . . The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise. In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this court has firmly maintained the principle that the point cannot be taken afterwards. . . .
In our opinion, no distinction is to be drawn in the application of these principles between an intermediate court of appeal and an ultimate court of appeal.
Their Honours went on to cite with approval the summary by the Court of Appeal of New South Wales in the matter before them as to the relevant principles:
[T]he finality of litigation; the difficulty of inducing an appeal court to consider new facts; the undesirability of encouraging tactical decisions not to present an issue at first instance, keeping it in reserve for appeal; and the need for vigilance to avoid injustice to a party having to meet new facts and new issues of law for the first time at the appeal court. [3]
[1](1997) 94 LGERA 149 at 167-8
[2](1986) 162 CLR 1 at 7
[3]at 8
Mr Moore submitted that the onus was on the appellant to satisfy the Court that no evidence could have been led which by any possibility could have prevented the point from succeeding in the Tribunal. In support of that submission he relied on the judgment of Ashley J in Mond v Lipshut[4] , where, after setting out the proposition in similar terms to those of the High Court in Coulton v Holcombe, his Honour continued [5] :
In the present case counsel urged me to conclude that the evidence was clear in relevant respects; and that its import could not have altered. I cannot agree. Had the point been to the forefront the examination of the respondent and her husband may well have had a different emphasis.
Mr Moore further submitted that, in any case, there was evidence which could have been led below which could have prevented the point from succeeding.
[4][1999] 2 VR 342
[5]at [37]
Given the manner of expression of the principle in the authorities which I have cited and elsewhere, it seems to me that, as Mr Moore contends, its operation must depend on the appellant who seeks to raise a point not raised below bearing the onus of satisfying the appeal court that no “evidence could have been given which by any possibility could have prevented the point from succeeding”, to use the words of the High Court in Coulton v Holcombe.
Mr Mattin, for Ms Zanjani, referred to the discussion in Williams, Civil Procedure Victoria [6] of the authorities as to when a court will allow a point to be raised which was not taken below. However, those authorities generally relate to circumstances where there is no possibility that relevant evidence could have been led. In the course of consideration of the cases in Geelong Building Society (in liq) v Encel[7] Tadgell J emphasised that the ultimate question is whether it is in the interests of justice to permit the appellant to rely upon the point [8] .
[6]at 64.01.365
[7][1996] 1 VR 594
[8]at 608
Mr Mattin submitted that in this case it was in the interests of justice that the questions be entertained. Neither party had been legally represented at the hearing before the Tribunal, although he conceded from the Bar table that the Member was an experienced solicitor, that Mr Chapman, a partner in the firm of Kelly & Chapman had been present representing his firm, and that Ms Zanjani was a law student. He submitted that there would be no unfairness to the Sutcliffes in raising the questions now. The second question had been raised at the Tribunal hearing by Mr Chapman, although not by either of the parties to the present appeal.
Having considered the matter, I would be inclined, with some hesitation, to accept the submission of Mr Moore that it is inappropriate to raise the points before this Court, bearing in mind all the considerations set out in the authorities to which I have referred.
However, I indicated at the hearing that I would not rule that day on the submission of Mr Moore, and accordingly the issues raised by the two questions in the Master’s order were argued before me. I have formed firm views as to the manner in which the two questions should be answered. Those views being what they are, the effect of my decision will be the same, whether or not I deal with them in these reasons for judgment. In all the circumstances, and in case I am wrong in accepting the submission of Mr Moore, I propose to give consideration to those two questions.
The first question
Section 108 of the Fair Trading Act confers on the Tribunal jurisdiction to hear and determine a “fair trading dispute”, relevantly defined in section 107 as “a dispute or claim arising between a purchaser . . . of goods or services and a supplier . . . of goods or services in relation to a supply . . . of goods or services”. The dispute between the parties clearly is a dispute of that kind. The relevant provisions of that Act came into operation on 1 September 1999 [9] .
[9]Victorian Government Gazette 19 August 1999 at 1901
The Tribunal made no finding as to the date on which Ms Zanjani recommended the retainer of Kelly & Chapman. However, in her affidavit Ms Zanjani deposes that she gave evidence to the Tribunal that Mr Sutcliffe first contacted her on 31 May 1999, and that on 25 June 1999 Mr Sutcliffe complained to her of the rudeness of Mr Kelly of that firm, but expressed approval of Mr Chapman. The recommendation was presumably made on some date between 31 May and 25 June 1999.
It appears from that affidavit that Mr Sutcliffe made no further complaint until 25 June 2000 when he rang Ms Zanjani “and said that he is very angry with Kelly and Chapman, Lawyers. That he has spent $15,000 and wants us to pay his legal costs pursuant to our guarantee.” A number of letters from Mr Sutcliffe to Ms Zanjani expressing dissatisfaction with Mr Chapman and his firm were before the Tribunal, the earliest of which is dated 4 July 2000. The first specific reference in the letters to a claim under the guarantee contained in Ms Zanjani’s advertisement is dated 26 July 2000. In that letter Mr Sutcliffe expressly relies on the guarantee, claiming $15,000 being his “legal costs to date with Kelly and Chapman”. That claim is repeated in subsequent correspondence. Having received no compensation from Ms Zanjani, the Sutcliffes made an application in the Civil Claims List of the Tribunal on 2 September 2000 claiming $15,000 from her under the Fair Trading Act.
The Fair Trading Act, as has been said, confers jurisdiction on the Tribunal in respect of “a dispute or claim . . . arising between a purchaser . . . and a supplier”. The dispute or claim between the parties arose when the Sutcliffes became dissatisfied with Kelly & Chapman, and made an unsuccessful claim under the guarantee contained in the advertisement. Whenever that dispute or claim can be said to have arisen, it was clearly in June or July 2000, i.e. much later than 1 September 1999, the date of coming into operation of the relevant provision of the Act. At the date when Ms Zanjani recommended Kelly & Chapman to the Sutcliffes, a date which may well have been 31 May 1999, as stated in the question, there was no dispute, and no grounds for a claim. Whether the Act was in operation at that date is of no relevance to the jurisdiction of the Tribunal. That jurisdiction arose when the dispute or claim arose. The answer to the first question is accordingly Yes.
The second question
The Tribunal did indeed find in paragraph 7(b) of its order (inconsistently with paragraph 3) that Downtown was a client of Kelly & Chapman with regard to the domestic building dispute. However, it went on to find that the Sutcliffes were also clients of that firm in respect to the request for finance; in any case, the firm of Kelly & Chapman is not a party to this appeal, and was not a party to the dispute as to which this appeal was brought, that is, the claim by the Sutcliffes against Ms Zanjani.
Ms Zanjani deposes that she told the Tribunal in evidence that it was Mr Sutcliffe who approached her and to whom she gave a recommendation, and that she did not know anything about Downtown. Mr Chapman deposes that he gave evidence to the Tribunal that “the Sutcliffes approached Kelly and Chapman having been given its name by Prime Law Brokers on 31 May 1999”. Mr Chapman exhibits a letter of 3 June 1999 addressed to Mr and Mrs Sutcliffe, which begins “Re Building Dispute: Thank you for consulting us about the above matter. We look forward to acting for you”. The letter goes on to say “Please note that you, as well as Downtown Access Pty Ltd, will be jointly and severally responsible for payment of our memoranda of costs and disbursements.”
Mr Sutcliffe deposes that he and his wife paid all the legal fees charged by Kelly & Chapman, as Downtown was not in a financial position to do so. Mrs Sutcliffe told the Tribunal in evidence that the Sutcliffes had paid Kelly & Chapman $15,000, and Mr Chapman agreed that that was so. The letters from Mr Sutcliffe expressing his dissatisfaction with Mr Chapman and his intention to rely on Ms Zanjani’s guarantee (see [15] above) are not expressed to have been written on behalf of Downtown. Accordingly, the dispute arose under the guarantee, it was the Sutcliffes who had relied on the guarantee, it was the Sutcliffes who had paid the fees to Kelly & Chapman, it was the Sutcliffes who were dissatisfied with that firm, and it was open to the Tribunal to order that Ms Zanjani pay damages calculated by reference to the fees which they had paid to that firm. The answer to the second question is accordingly Yes.
Variation of Tribunal order
Mr Moore sought an order that the decision of the Tribunal be varied. Given the finding in paragraph 8(b) of the Tribunal’s order, he submitted that the Tribunal ought to have ordered the applicant to refund to the respondents all of their legal costs in the amount of $15,000, including the fees paid by them in respect of barristers briefed by Kelly & Chapman. It is to be assumed from paragraph 8(b) of the Tribunal’s order that those fees constitute the difference between the $15,000 which the Sutcliffes paid to Kelly & Chapman and the $9,000 which the Tribunal ordered Ms Zanjani to pay to them under the guarantee. It is clear that the Court, on an appeal under section 148 of the VCAT Act, has power to vary the decision appealed from (see section 148(7)(a) of that Act).
Mr Chapman deposed that he told the Tribunal in evidence that in or about October 1999, shortly before his firm ceased acting for Downtown, he became aware that a deed of assignment of Downtown’s building contract (on which the domestic building dispute was founded) had been entered into on 3 October 1998. He exhibited a letter to the Sutcliffes of 17 September 1998 from Messrs Jerrard & Stuk, the firm of solicitors who had previously acted for the Sutcliffes, which they had provided to him after Kelly & Chapman ceased acting for them, setting out the difficulties to which this assignment gave rise.
Mr Moore submitted that if that situation had been discovered at or shortly after the time when Kelly & Chapman were retained, no barristers would have been briefed, because the pointlessness of the proposed case would have been exposed. The fees paid to barristers formed part of the Sutcliffes’ “legal costs” in terms of the guarantee, and accordingly, he submitted, the Sutcliffes are entitled to a repayment of the barristers’ fees as well as the fees charged directly by Kelly & Chapman. I am prepared to accept that the barristers’ fees were comprised in the expression “legal costs” in the guarantee. However, it is not possible to be satisfied, on the material before the Court, as to who is responsible for Mr Chapman’s lack of knowledge of the situation. Accordingly, that submission fails.
For the reasons given, the appeal is dismissed. Counsel may wish to make submissions as to costs.
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