Double Eight Limited v Disputes Tribunal at Manukau
[2014] NZHC 1862
•8 August 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-0545 [2014] NZHC 1862
UNDER the Judicature Amendment Act 1972 IN THE MATTER OF
an application for judicial review of a decision to decline a rehearing application and a subsequent decision to decline to hear a cross-demand/counterclaim both made under the Dispute Tribunals Act
1988
BETWEEN
DOUBLE EIGHT LIMITED Applicant
AND
THE DISPUTES TRIBUNAL AT MANUKAU
First Respondent
AND
BRIGHT SPARKS CHILDCARE LIMITED
Second Respondent
Hearing: 30 July 2014 Appearances:
R S Pidgeon for the Applicant
No appearance for the First or Second RespondentJudgment:
8 August 2014
JUDGMENT OF THOMAS J
This judgment was delivered by me on 8 August 2014 at 11.30 am pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date:………………………….
Solicitors:
Pidgeon Law, Auckland
DOUBLE EIGHT LIMITED v THE DISPUTES TRIBUNAL AT MANUKAU & ORS [2014] NZHC 1862 [8
August 2014]
Introduction
[1] The applicant (Double Eight) is a company which, at the relevant time, owned the premises from which the second respondent (Bright Sparks) ran a childcare business. The parties were in a dispute relating to problems with drainage pipes at the premises. Both parties alleged that the other breached obligations under the lease. Bright Sparks filed a claim against Double Eight in the Disputes Tribunal.
[2] Mr Engel is the managing director of Double Eight. Essentially, Mr Engel claims that he was not notified of the substantive hearing date at the Tribunal. He applied for a re-hearing on this basis and also filed a counter-claim.
[3] The Tribunal referee dismissed the application and counter-claim in two separate decisions (7 November 2013 and 29 November 2013).
[4] Double Eight seeks to review those two decisions.
[5] Bright Sparks and the Tribunal abide the Court’s decision.
Facts
[6] The initial hearing in the Tribunal was due to be held on 30 July 2013.
[7] On 8 July 2013 Bright Sparks requested an adjournment and suggested 6
September as a preferred new date.
[8] On 10 July, a case manager at the Tribunal emailed Mr Engel informing him of the adjournment request and asking that he indicate whether he consented to the request.
[9] Mr Engels did not respond.
[10] On 27 July, a Notice of Hearing for the rescheduled date of 30 August 2013 (the Notice) was posted to Bright Sparks and Double Eight at its registered address (its accountant’s address: BDO Spicers, 29 Northcroft Street, Takapuna).
[11] From 28 July – 27 August 2013, Mr Engel was overseas.
[12] On 20 August, the case manager emailed Bright Sparks asking that it confirm its attendance at the hearing. Double Eight alleges that Mr Engel was not emailed.1
Bright Sparks replied confirming that the director was overseas but a representative would be present.
[13] On 30 August the hearing took place. The Referee released a decision requiring Double Eight to pay $12,105.54 to Bright Sparks.
[14] Double Eight applied for a rehearing on the basis that:
a. it did not receive the Notice; and
b. even if he had, Mr Engel would not have been able to attend since he was overseas at the time of the hearing.
[15] The hearing of the rehearing application was scheduled for 5 November
2013. However the matter was not on the Referee’s list. Mr Engel, in his affidavit evidence, says that he was kept waiting for 45 minutes, when the case was called the Referee was assertive and “on the offensive”, and he was given no chance to explain the non-receipt of the Notice.
Decision to decline application for rehearing (7 November 2013)
[16] Bright Sparks objected to the application for a rehearing.
[17] On 7 November 2013, the Referee issued a decision declining to grant a rehearing.
[18] The Referee held that Double Eight had been appropriately and timely notified of the scheduled date of the hearing. He noted that Mr Engel did not provide
any evidence to support his submission that he did not receive the Notice, other than
1 Double Eight points out at footnote 30 of its submissions that the email itself, given in evidence
at 36 of Mr Engel’s affidavit dated 21 July 2014, does not show who the recipients were.
stating that the accountants’ building was being renovated. The Referee also noted that Mr Engel made written submissions prior to the hearing, which indicated that the Notice did reach him.
[19] In response to Mr Engel’s point that he was overseas, the Referee stated that the fact a party chooses to be overseas at the scheduled date is not by itself a reason for a rehearing to be granted. He noted that under the Disputes Tribunal Act 1988 (the Act), an incorporated legal entity may request to be represented by another person.2
[20] Finally, the Referee noted that evidence of Mr Engel’s travel indicated that he
was back in New Zealand by the hearing date (30 August) in any event.
Decision not to hear counter-claim (29 November 2013)
[21] At the same time as applying for a rehearing, Mr Engel filed a counter-claim. [22] Mr Engel emailed the case manager on 6 November and 27 November
enquiring as to the progress of the claim.
[23] On 29 November the case manager replied, pasting into the email the
Referee’s “direction”.
[24] The Referee noted that the counter-claim was filed on a date after the hearing of the claim had taken place. He stated that, to allow the counter-claim to be heard, would result in the same matter (the application for a rehearing) being re-litigated. This would be inconsistent with the final and binding Order of the Tribunal on Bright Sparks’ claim.
[25] The Referee referred to Mr Engel’s right to appeal the Tribunal’s original decision of 30 August. He noted that, if the appeal were upheld and the matter referred back to the Tribunal, Double Eight could raise the matters which it should have raised at the first hearing by way of defence and/or counter-claim.
Amended Statement of Claim
[26] Under the combined heading “Breach of Natural Justice/Legitimate Expectation (procedural)”, Double Eight claims that the Tribunal breached its obligation to act in accordance with the principles of natural justice and the objectives of the Act by:
a. failing to adequately consider the reasons given by Double Eight for not attending the hearing and the strength of its counter-claim against Bright Sparks;
b. the Referee fettering his discretion by “not being sufficiently responsive to the applicant’s individual situation”;
c. failing to consider the merits of the application in respect of the counter-
claim. This was “wrong at law and in breach of natural justice”;
d. failing in its duty of care to ensure the terms of the Act and its principles were adhered to;
f. narrowly [and wrongly] construing the broad discretion vested in the
Tribunal against Double Eight to Double Eight’s detriment.
[27] Double Eight claims that the decisions were a breach of its legitimate expectations to be dealt with in a procedurally fair way in keeping with the objectives of the Act and the supporting body of law. The Tribunal was:3
…put on notice to take into consideration the substantive opposition and counter-claim arguments to show the strength of its case but in breach of its duty, [the Tribunal] failed to entertain these submissions or to take them into account.
[28] Double Eight seeks orders:
a. rescinding the refusal to grant a rehearing;
b. rescinding the refusal to hear the counter-claim;
c. directing the Tribunal to reconsider the application for a rehearing; and
d. directing the Tribunal to reconsider the application to hear the counter-claim.
[29] Double Eight also seeks costs.
Double Eight’s submissions
Complaints regarding alleged lack of service
[30] Double Eight cites Rule 11 of the Disputes Tribunals Rules:
11 Service on corporations
In the absence of any statutory provision prohibiting service in the following manner, any document that is to be served on any corporate body in any proceedings before a Tribunal may be served by delivering the document—
(a) to the mayor, chairman, president, town clerk, managing director, secretary, treasurer, or other similar officer of the corporate body; or
(b) to any person purporting to have charge of the affairs or business of the corporate body at its principal office or principal place of business or at the office or place of business nearest to the Tribunal from which the document issued.
[31] Double Eight submits that its accountants’ (BDO Spicers) address is Double Eight’s “address for service” for the purposes of the Companies Act 1993, not the Act. The BDO Spicers address was not Double Eights’ principal place of business. Furthermore, even if service were deemed to be effected by service on the BDO Spicers’ address, it would only be effective when BDO Spicers passed it on to Mr Engel.
[32] In Double Eight’s submission, the case manager should have emailed the Notice to Mr Engel as she had done in relation to the original request for adjournment.
[33] BDO Spicers has said that they did not receive the notice. Double Eight states that BDO Spicers’ physical address was undergoing significant refurbishment at the time the Notice was posted and suggests that the scaffolding may have prevented the Notice from being received.
[34] Double Eight says that it was contrary to natural justice and the appearance of fairness for the case manager to email the confirmation of attendance only to Bright Sparks.
[35] Double Eight concedes that Mr Engel did arrive back in the country before 30
August 2013. However, he was not aware that the hearing had taken place until he
received a copy of the Referee’s decision.
Rehearing decision
[36] Double Eight refers to the merits of its case in the substantive dispute. In Double Eight’s submission, the substantive merits of the case were a “necessary ingredient” in the application for a rehearing. It complains that Mr Engel was not given an opportunity to present these arguments to the Referee when he applied for a rehearing. The Referee failed to take them into account and thus failed to take into account a relevant consideration.
Judicial review principles
[37] In X v Bovey, MacKenzie J reiterated the difference between a judicial review and an appeal:4
An application for judicial review is not an appeal against the challenged decision. The function of the Court is to review the lawfulness of the decision making process, not the merits of the decision itself. In reviewing the lawfulness of the decision making process, the Court operates within a framework of quite well developed but flexible principles about categories of situations in which the Court may intervene.
[38] To be successful on review, Double Eight must show that the Tribunal’s
decisions were unreasonable in the Wednesdbury sense or, that in making the
decisions, the Referee made an error of law, failed to take into account relevant considerations, took into account irrelevant considerations, was biased or breached Double Eight’s right to natural justice.
Analysis
[39] The majority of Double Eight’s submissions concern the merits of the Referee’s decision not to allow it a rehearing. There is no appeal against a decision not to grant a rehearing.5 Double Eight did not appeal the substantive decision.
[40] Double Eight was entitled to apply for a rehearing under s 42(2) of the Act:
42 Tribunal may act on evidence available
(1) Where the case of any party is not presented to the Tribunal, after reasonable opportunity has been given to that party to do so, the issues in dispute in the proceedings may be resolved by the Tribunal, or relief in respect of an undisputed claim may be granted by it, on such evidence or information as is before it, including evidence or information obtained pursuant to section 40(2).
(2) An order made by the Tribunal in the circumstances described in subsection (1) shall not be challenged on the ground that the case of the party was not presented to the Tribunal, but the party may apply for a rehearing under section 49 on the ground that there was sufficient reason for that party's failure to present that party's case.
(emphasis added)
[41] The Tribunal’s discretion to order a rehearing is contained in s 49(1) of the
Act:
(1) Subject to subsection (2) a Tribunal may, upon the application of a party to any proceedings, order the rehearing of a claim, to be had upon such terms as it thinks fit.
Failure to take into account relevant considerations?
[42] Double Eight submits that the Tribunal should have considered the substantive merits of the case.
[43] The case of United Carriers Ltd v Jones is analogous.6 United Carriers had inadvertently missed the substantive hearing. It applied for a rehearing. In the hearing of that application, United Carriers was heard on the reasons why it had failed to attend the earlier hearing but was not given the opportunity to address the Tribunal on the merits of the substantive case. Its application for a rehearing was refused.
[44] United Carrier sought a review of the referee’s decision not to grant a
rehearing. The High Court dismissed the application for judicial review. It held:
[10] Under s 42(2) an application for a rehearing under s 49 can be made on the ground that there was “sufficient reason” for United Carriers’ failure to present its case. This must mean that the question of whether there was sufficient reason for failure to attend is a threshold matter.
(emphasis added)
[45] The Court considered that there is nothing in the Act requiring the interests of justice to be taken into account on a rehearing application:7
Parliament obviously considered the interests of justice (perhaps rough justice) were served by giving a party reasonable opportunity to present its case and in the event of failure to do so allow it to apply for a rehearing if that failure was sufficiently explainable.
[46] The Court held that, as it was a judicial review proceeding, there had to be an error of law or unreasonableness.
[47] I concur with that approach. The Tribunal did not fail to take into account a relevant consideration by not considering the substantive merits when declining the rehearing application.
Unreasonableness
[48] I am however, satisfied that the Tribunal fell into error to the extent that the application must succeed. My reasons are set out in the subsequent paragraphs.
6 United Carriers Ltd v Jones (2001) 16 PRNZ 1 (HC).
7 At [17].
[49] I am satisfied that there was a breach of natural justice because Mr Engel was not given the opportunity to explain the reason for his non-receipt of the Notice or failure to attend the hearing. Mr Engel deposed that was the case by his affidavit evidence. That allegation is support by the factors referred to and relied upon in the Referee’s decision.
[50] Paragraph [5] of the decision states:
For a rehearing to be granted it is necessary to establish that principles of natural justice have not been or would not be complied with if the matter was not reheard. This does not generally include a situation where a party voluntarily absents himself from the hearing without the appropriate application for an adjournment having been made providing valid reasons for the application.
[51] A similar observation is made in paragraph [7] of the decision where the
Referee says:
…the simple fact that a party prefers to travel overseas at the scheduled time or elects to attend at or give a high priority to other activities is not a reason for a rehearing to be granted unless valid reasons justify this.
[52] Clearly the Referee made his decision on the basis that Double Eight was aware of the rescheduled hearing date but Mr Engel choose to give priority to overseas travel without making a request for an adjournment or alternative arrangements. That cannot have been the case. The Tribunal posted the Notice to Double Eight’s accountants on 27 July 2013. Mr Engel left the country on
28 July 2013. The earliest date on which Double Eight’s accountants could have received the Notice was 28 July, the day Mr Engel departed, flying out at 1.00 pm. It would therefore have been virtually impossible for Mr Engel to have been made aware of the Notice before he departed the country.
[53] In paragraph [6] of the decision the Referee records his finding that Double Eight was appropriately and timely notified of the date of the hearing. He notes that the Notice was sent Double Eight’s registered address at the office of its accountants. He says:
There are no other means for the Tribunal to ascertain the address of a company.
[54] Bright Sparks had made the claim in the Disputes Tribunal. It provided the details of Double Eight by noting Mr Engel as the company’s contact and recording the physical address as being care of the accountants. The form also requires contact details to be provided. Bright Sparks provided Mr Engel’s mobile telephone number and his email address. When Mr Engel received the original notice of hearing he emailed the Tribunal on 11 July 2013 raising an issue as to jurisdiction. The email noted that he was the director of Double Eight. It requested the Tribunal to reply to him by return on the issue he had raised. The Tribunal was therefore aware of Mr Engel’s email address and indeed previously contacted him on that address when Bright Sparks requested an adjournment of the original hearing date. Given that the Claims Form requests contact details, it is reasonable for a party to assume that contact will be made by using the details given on the Claims Form, particularly when a party has communicated to the Tribunal and received communication from the Tribunal using those contact details.
[55] More importantly however, is the second part of paragraph [6] of the decision when the Referee says:
However he made written submissions to the Tribunal prior to the hearing. This indicates that the Notice reached him and that he was aware of the claim. I therefore do not accept that this ground establishes that there has a miscarriage of justice.
[56] The only communication from Double Eight to the Tribunal which could be
considered written submissions was Mr Engel’s email to the Tribunal of
11 July 2013 raising the issue of jurisdiction. That email was sent prior to the adjournment of the first hearing date. The Notice was posted on 27 July 2013. Mr Engel’s submission of 11 July 2013 cannot possibly show that Double Eight was aware of the new hearing date.
[57] Finally the Referee made reference to the fact that Mr Engel was back in New Zealand by the hearing date. He returned to the country on 27 August, the hearing date being 30 August. The fact that Mr Engel might have been back in the country does not assist however, if Mr Engel were not aware of the new hearing date.
[58] The combination of these factors, whether considered as taking account of irrelevant considerations, a material error of law being an unreasonable finding of fact, a mistake of fact, breach of natural justice or unreasonableness in the Wednesbury sense means the application must succeed. The best approach may well be simply to consider the decision an unreasonable one for the reasons outlined above while being cognisant that the test for unreasonableness is a stringent one.
Result
[59] For the reasons given the application is granted and the decision dismissing Double Eight’s application for a rehearing is quashed. The matter is remitted back to the Tribunal for consideration.
[60] Double Eight has also applied for a review of the decision in respect of the counter-claim. I am not satisfied that any grounds of review in respect of that decision have been made out. In any event, as the decision on the rehearing is quashed, the counter-claim may well be able to revived, depending upon the outcome of the decision on the rehearing application.
Costs
[61] Double Eight seeks costs. The first respondent seeks to be heard on the question of costs. If the parties are unable to reach agreement, Double Eight is to file a memorandum within 21 days of this decision with any response from the first
respondent 14 days thereafter.
Thomas J
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