Atkinson v Crowley

Court of Appeal (NSW)|2011-07-07|Before: Giles JA, Basten JA, Young JA, Smart AJ

Ltd [2004] HCA 16; 216 CLR 515 Texts Cited: Building Services Corporation Legislation Amendment Bill, Hansard, Legislative Assembly, 30 October 1996, p 5543, col 1 Category: Principal judgment Parties: Clifford Atkinson - Applicant Lisa Anne Atkinson - Cross-Applicant

Cameron Crowley - First Respondent Eleanor Crowley - Second Respondent Consumer, Trader and Tenancy Tribunal - Third Respondent Representation: Counsel:

Submitting Appearance - Third Respondent Solicitors:

Prime Lawyers - Applicant Somerville Legal - Cross-Applicant

I V Knight, Crown Solicitor - Third Respondent File Number(s): 2009/298140 Decision under appeal Citation: Atkinson v Consumer, Trader and Tenancy Tribunal [2010] NSWSC 426 Date of Decision: 2010-05-11 00:00:00 Before: Smart AJ File Number(s): SC 2009/298140

HEADNOTE [This headnote is not to be read as part of the judgment] After purchasing a property in 2006, Cameron and Eleanor Crowley, the first and second respondents, discovered what they believed to be defects in certain building works undertaken by the previous owners of the property, Clifford and Lisa Anne Atkinson, the applicant and cross-applicant. The Crowleys commenced proceedings against the Atkinsons in the Consumer, Trader and Tenancy Tribunal ("the Tribunal"), seeking damages assessed as the cost of the rectification works. They could not locate the Atkinsons and obtained an order for substituted service. On 9 June 2009 they obtained a default judgment in the amount of approximately $43,000. In September 2009 the Atkinsons said they became aware of the judgment; they brought proceedings by way of judicial review in the Common Law Division. The principal ground of challenge was that the Atkinsons had been denied procedural fairness because they had had no opportunity to resist the proceedings in the Tribunal. It was also contended that the material available to the Chairperson of the Tribunal did not justify an order for substituted service. The summons was dismissed with costs: Atkinson v Consumer, Trader and Tenancy Tribunal [2010] NSWSC 426 (Smart AJ). In this Court, Mr and Mrs Atkinson divided their challenges, with Mr Atkinson seeking leave to appeal and Mrs Atkinson to cross-appeal. The issues for determination on the appeal were: (i) whether the Tribunal had jurisdiction to consider the claim against Mr Atkinson, and (ii) whether the Tribunal had jurisdiction to determine the claim, if the limitation period had expired. The issues for determination on the cross-appeal were: (iii) whether, in respect of the order for substituted service, the primary judge had failed to distinguish between Mrs Atkinson's position and that of her husband, and (iv) whether, if the orders made by the Tribunal were bad as against her husband, they were not capable of severance and must be bad against her. The Court held dismissing the applications for leave to appeal and cross-appeal: In relation to (i)

The Tribunal has jurisdiction to determine a building claim. Even if the Crowleys had no cause of action against Mr Atkinson under Part 2C of the Home Building Act 1989 (NSW) , for breach of statutory warranty, it did not follow that they did not have a "building claim", as defined in s 48A, maintainable against Mr Atkinson: [22]. Bryan v Maloney [1995] HCA 17; 182 CLR 609; Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 206 CLR 515 referred to. In relation to (ii)
The factual premises, not made good on the evidence, was that the claim was out of time. As this argument was not raised below, Mr Atkinson should be refused leave to rely upon this point at this late stage in the proceedings: [30]. Coulton v Holcombe [1986] HCA 33; 162 CLR 1 applied. Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; 59 CLR 369 considered. In relation to (iii)
The Chairperson had to be satisfied that the service approved was "appropriate". She needed to take into account the obligation for the Tribunal to ensure "that each party in any proceedings is given a reasonable opportunity" to participate in the hearing: Consumer Trader and Tenancy Tribunal Act 2001 (NSW), s 35. In the absence of any reasons revealing that a wrong test had been applied, the challenge was reduced to the proposition that, on the assumption that the Chairperson applied the correct test, the result was nevertheless so unreasonable that the assumption is shown to be false. That challenge was not made good: [35]-[36]. Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26; 78 CLR 353 at 360 (Dixon J) applied.
Substituted service must be "likely" to result in the defendant learning of the proceedings. The primary judge was not satisfied that the material before the Chairperson was inadequate to permit the direction to be given. No error was shown in his Honour's reasoning: [35]-[38]. Chappell v Coyle (1985) 2 NSWLR 73; Bradvica v Radulovic [1975] VR 434 applied.
Before the primary judge no separate case was put in respect of Mrs Atkinson. Mrs Atkinson was likely to obtain notice of the proceedings if her husband had knowledge of them. Once a finding was made that Mr Atkinson had the relevant knowledge, it was probable that Mrs Atkinson was informed. The primary judge disbelieved Mrs Atkinson's denial of knowledge. There was no independent objectively assessable material which suggested that such a finding was erroneous. Accordingly, there was no basis upon which this Court could properly interfere with the finding: [40]-[41]. Fox v Percy [2003] HCA 22; 214 CLR 118 applied. In relation to (iv)
A money judgment made against two persons, but invalid against one, is not be valid against the other. In any event, because the order against Mr Atkinson stands, the issue did not arise: [42]-[44].

Judgment 1GILES JA : I agree with Basten JA. 2BASTEN JA : The applicant and cross-applicant (respectively, Clifford and Lisa Anne Atkinson) are the former owners of a house in Castle Cove; the second and third respondents (Cameron and Eleanor Crowley) are the current owners. After purchasing the property in 2006, the Crowleys discovered what they believed to be defects in certain building works undertaken by the Atkinsons. They commenced proceedings against the Atkinsons in the Consumer, Trader and Tenancy Tribunal ("the Tribunal"), seeking damages assessed as the cost of the rectification works. On 9 June 2009 they obtained a default judgment in an amount fractionally under $43,000. The judgment was registered in the Local Court. 3The Atkinsons each stated in affidavits that in September 2009 they became aware of the judgment (how, is unclear) and commenced proceedings by way of judicial review in the Common Law Division of this Court, seeking to set aside an order for substituted service made in the Tribunal on 30 January 2009 and the subsequent default judgment. The principal ground of challenge below was that the Atkinsons had been denied procedural fairness because they had had no opportunity to resist the proceedings in the Tribunal. It was also contended that the material available to the Chairperson of the Tribunal did not justify an order for substituted service. The summons was dismissed with costs: Atkinson v Consumer, Trader and Tenancy Tribunal [2010] NSWSC 426 (Smart AJ). 4In this Court, Mr and Mrs Atkinson divided their challenges. The principal application, brought by Mr Atkinson, asserted an entirely fresh ground, namely that the Tribunal had no jurisdiction to consider the claim against him because the allegedly defective building works were undertaken by his wife, as the holder of an owner-builder permit. 5This issue was not raised below, and leave to appeal on this ground should be refused. 6In his draft notice of appeal, accompanying the summons for leave, Mr Atkinson identified as his second ground, the lack of jurisdiction of the Tribunal to make the order for substituted service. No separate argument was put in relation to this ground. As will be explained below, in relation to the cross-application by Mrs Atkinson, the primary judge rejected his evidence that he had no knowledge of the proceedings before default judgment was given in the Tribunal on 9 June 2009, a finding which effectively precluded success on any argument involving lack of procedural fairness. Leave should be refused on this ground also. 7In the course of submissions in reply, counsel for Mr Atkinson raised a fresh issue, asserting that the proceedings in the Tribunal were commenced out of time. He required leave to raise this new ground: it should be refused. 8Mrs Atkinson was concededly the holder of the owner-builder permit in respect of the building work said to have been defective. She could not, and did not, seek to rely upon the challenge now raised by her husband. The focus of her submissions was that the primary judge had failed to distinguish between her position and that of her husband, in considering whether the order for substituted service had resulted in procedural unfairness and should be set aside. Similarly, she asserted that his Honour had failed to deal separately with her evidence that she did not know of the proceedings before the default judgment. 9The short answer to these complaints is that the case was run before the primary judge on behalf of both Mr and Mrs Atkinson, jointly represented, without attempting to distinguish their positions. Once that factor is taken into account, the way in which the primary judge dealt with the material before him is readily understandable and the challenge is unwarranted. 10Mrs Atkinson also submitted that if the orders made by the Tribunal were bad as against her husband, they were not capable of severance and, therefore, must be bad against her. This submission was without substance and must also be rejected.

Procedural issues 11Two points of practice, of no consequence for the outcome of the cases presented for the Atkinsons, can conveniently be noted at this stage. First, the respondent first named in the summons is the Tribunal: this is wrong in principle, the first respondent properly being an active respondent. It is appropriate that the second respondent, Mr Cameron Crowley, be named as the first respondent in this Court. 12Secondly, it is commonplace for courts and tribunals to operate subject to rules providing for substituted service and permitting default judgment where one or other party does not appear. It may seem curious that, where these procedures have been invoked in the Tribunal, proceedings to set aside the default judgment are brought in the Supreme Court. Where there is alleged to be a breach of the rules of procedural fairness, the allegation must involve contravention of the requirements of s 28(2) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) ("the CTTT Act "). Where there is a failure to comply with a provision of the CTTT Act , "the failure to comply is to be treated as an irregularity and does not nullify the proceedings or any decision in the proceedings unless the Tribunal otherwise determines": s 32(3). Whether or not that description can affect the supervisory jurisdiction of this Court, the Tribunal is empowered, in dealing with such an irregularity, to set aside the proceedings or a decision in the proceedings: s 32(4). Further, a party may be entitled (though not in all cases), to seek a rehearing, if he or she has suffered a substantial injustice because the decision of the Tribunal in completed proceedings "was not fair and equitable": s 68(2)(a). Finally, the Tribunal may, subject to the CTTT Act , determine its own procedure: s 28(1). 13Although the operation of these provisions was not the subject of submissions in this Court, it would be surprising if they did not permit the Tribunal to set aside a default judgment in circumstances where it was thought appropriate to allow a party in to defend the proceedings. A failure to seek such relief in the Tribunal, not being this case, would undoubtedly be a weighty consideration in favour of dismissing the proceedings in the Common Law Division, were grounds for review otherwise made good. The application for a rehearing under s 68 was rejected because, perhaps surprisingly, such a power was only available where the amount in issue was well below the judgment in this case: s 68(13)(a) and the Consumer, Trader and Tenancy Tribunal Regulation 2002 (NSW), cl 24(1), or, from 1 September 2009, the Consumer, Trader and Tenancy Tribunal Regulation 2009 (NSW), cl 25(1). However, it is likely that the Tribunal has power to reopen its own decision if persuaded that the unsuccessful party was denied procedural fairness: see Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; 209 CLR 597. In fact, the primary judge considered the case in part on the basis that it was an application, such as might have been made in a court to set aside its own judgment, obtained in default of appearance. As his Honour made clear, the application would have been rejected.

No 'building claim' 14Mr Atkinson's primary submission assumed that the jurisdiction of the Tribunal turned upon his liability in respect of a breach of a statutory warranty implied under Part 2C of the Home Building Act 1989 (NSW). However, to approach the matter in that way is to commence the inquiry part way through the proper analysis of the statutory scheme. 15The jurisdiction in relation to building claims is identified in Part 3A, Division 4 of the Home Building Act . In particular, s 48K provides: " 48K Jurisdiction of Tribunal in relation to building claims (1) The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 ...." 16The term "building claim" is defined in s 48A, which, so far as relevant, provides: " 48A Definitions (1) In this Part: building claim means a claim for: (a) the payment of a specified sum of money ... ... that arises from a supply of building goods or services whether under a contract or not.... building goods or services means goods or services supplied for or in connection with the carrying out of residential building work ..., being goods or services: (a) supplied by the person who contracts to do, or otherwise does, that work .... (2) Without limiting the definition of building claim , a building claim includes the following: ... (b) a claim for compensation for loss arising from a breach of a statutory warranty implied under Part 2C." 17The express inclusion in sub-s (2) of a claim for breach of statutory warranty, demonstrates that a building claim is not restricted to such circumstances. However, because the respondents sought to uphold the jurisdiction of the Tribunal, in part, by reference to a claim based on ss 18B-18D of the Home Building Act , it is convenient to explain why those provisions do not appear to assist the respondents in the present case. The relevant provisions, which commenced in 1997, are in the following terms: " 18B Warranties as to residential building work The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work: (a) a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used .... 18C Warranties as to work by others A person who is the immediate successor in title to an owner-builder, a holder of a contractor licence, a former holder or a developer who has done residential building work on land is entitled to the benefit of the statutory warranties as if the owner-builder, holder, former holder or developer were required to hold a contractor licence and had done the work under a contract with that successor in title to do the work. 18D Extension of statutory warranties (1) A person who is a successor in title to a person entitled to the benefit of a statutory warranty under this Act is entitled to the same rights as the person's predecessor in title in respect of the statutory warranty." 18While it is clear that, for the purposes of s 18C, the Crowleys were "immediate successors in title" to Mrs Atkinson, as owner-builder, Mr Atkinson did not fall within any of the four categories of persons to whom they were successors in title. Mr Atkinson accepted that the Crowleys satisfied the first limb of the provision, so that the second limb identifies how they become entitled to the benefit of the statutory warranties: that is, there is a deemed contract between the person in one of the four categories who did the work and the successors in title. Accordingly, Mr Atkinson argued, the Crowleys may have had a valid claim in respect of breach of the statutory warranties as against his wife, but not as against him. The position was not advanced by s 18D, which merely provided that, if he had rights in respect of the statutory warranty, those rights would pass to his successor in title. However, his rights, if he had any, would be against some other person, and not against himself. Nor was it apparent that he had any rights against his wife: there was no suggestion that they were in a contractual relationship. 19While this reading of s 18C was available, the respondents submitted that it should be rejected because it failed to give effect to the clear intention of the Home Building Act read as a whole; the statutory warranties provided in s 18B were implied in any contract to do residential building work, whether entered into by the holder of a contractor licence or any other person who was "required" to hold a contractor licence before entering into a contract. The clear intent was to provide warranties which were to be good, not only against those who complied with the licensing requirements in respect of residential building work, but also those who did not: see second reading speech, Building Services Corporation Legislation Amendment Bill, Hansard, Legislative Assembly, 30 October 1996, p 5543, col 1. It would, the Crowleys submitted, make a nonsense of the scheme of the Act if the benefits of the warranties were not available to those who were successors in title in respect of work done by unlicensed contractors. 20The Crowleys also sought to support their contention as to the structure of the Home Building Act by reference to the requirements that no person could do residential building work, whether under a contract or otherwise, without a contract of insurance complying with the Act which must enure for the benefit of successors in title to the person on whose behalf the work is done: ss 92, 96, 99 and 101. An owner-builder is also required to take out such insurance for the benefit of successors in title: ss 95 and 101. 21It is possible to understand the scheme for home warranty insurance, despite its complexity, more readily than the scheme of statutory warranties in Part 2C. Section 18B is entirely clear: the person against whom the warranties may be enforced are persons who do residential building work, whether as the holder of a contractor licence, or as a person required to hold such a licence. The beneficiary of the warranty would usually be the person on whose land the work is undertaken. Section 18D, understandably within this scheme, provides that the rights held by the beneficiary will enure to the benefit of a successor in title to that beneficiary, namely a subsequent landowner. The purpose and operation of s 18C is, however, obscure. Leaving aside the question of the owner-builder, it is not clear who is a successor in title to a holder of a contractor licence nor, even if there be such, why that person would be entitled to the benefit of a statutory warranty, which will be enforceable against his or her predecessor in title. 22If s 18C has some operation, not revealed in the course of argument in the present case, that can be left for another day. As the Crowleys accepted, their case did not depend on the operation of s 18C alone, or necessarily at all. A person who carries out building work on his or her own land may well owe a duty of care to the purchasers to whom the land is sold, in respect of the quality of the building work. That is not precisely the result of the reasoning in Bryan v Maloney [1995] HCA 17; 182 CLR 609, but that case allows for the operation of an analogous principle. In Bryan v Maloney , the High Court held that the builder of a dwelling house owed the current owner, and a subsequent purchaser, a duty to take reasonable care to avoid causing economic loss, in circumstances where the footings of the building were inadequate, causing the building to crack. 23Thus, the Crowleys may have had an arguable claim against the Atkinsons in tort. Such a claim might have tested the limits of Bryan v Maloney , doubts about which were expressed in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515, particularly at [14] (Gleeson CJ, Gummow, Hayne and Heydon JJ). The existence of a relevant duty of care might require determination of questions of law. Nevertheless, that alone would not render the Tribunal without jurisdiction. That the Tribunal has jurisdiction to determine questions of law for the purposes of determining a building claim is inherent in the availability of an appeal to the District Court from its decision with respect to a matter of law: CTTT Act , s 67(1). Nor was there any contrary suggestion in the present case. Thus, accepting for present purposes that the Crowleys had no cause of action against Mr Atkinson under Part 2C of the Home Building Act , it by no means followed that they did not have a "building claim", as defined in s 48A, maintainable against Mr Atkinson. Whether or not such a claim was good on the merits would depend upon questions of both fact and law. Mr Atkinson's challenge to the jurisdiction of the Tribunal must fail. 24Additionally, the Crowleys asserted that they had a contractual claim under the contract of sale over which the Tribunal had jurisdiction, as they were entitled to rely upon s 48K(5) of the Home Building Act. This argument was not fully developed and it is not necessary to explore it further.

Limitation period for building claims 25It is convenient to deal at this stage with the issue, raised belatedly by Mr Atkinson, that the Tribunal was without jurisdiction because the 3-year limitation period prescribed under s 48K with respect to certain kinds of building claims had expired. (The submission was not adopted by counsel for Mrs Atkinson.) 26Even if it were a pure question of law, the issue being raised at the heel of the hunt, it is doubtful whether the Court should entertain it. However, far from being a pure question of law, it is not even clearly made out on the facts before this Court. The factual premises were twofold, namely that the building work was completed no later than 25 October 2005, when the Willoughby City Council, which was the principal certifying authority for the development, issued a final occupation certificate. The second factual element was that the only copy of the application to the Tribunal in the papers appeared to bear a date stamp of the Tribunal on 29 December 2008. Mr Atkinson contended that if a three-year limitation period applied, the claim was out of time and the Tribunal had no jurisdiction to entertain it. 27Section 48K of the Home Building Act prescribed limitation periods in respect of different classes of building claim. For this purpose, it was assumed that the claim was not for a breach of statutory warranty under Part 2C, because there the limitation period was seven years: s 48K(7). Rather, the claim must have been one which fell within either sub-s (3) or sub-s (8), which provided as follows: "(3) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than 3 years after the date on which the supply was made .... ... (8) The Tribunal does not have jurisdiction in respect of a building claim relating to: (a) a contract for the supply of goods or services to which none of subsections (3) ... applies, or (b) a collateral contract, if the date on which the claim was lodged is more than 3 years after the date on which the contract was entered into." 28Each of these provisions has its own complications. First, while it is arguable that sub-s (3) was engaged, because the claim related to "building goods or services", it is unclear whether they were services "supplied to or for the claimant", the claimant being the Crowleys, who did not undertake the building work, nor arrange for it to be undertaken. Secondly, in respect of sub-s (8) it is not clear whether the Crowleys' claim relates to "a contract for the supply of goods or services", nor whether the provision is engaged at all where the claimant is not a party to the contract. 29Further, the submission assumed that because the limitation provisions were expressed in terms depriving the Tribunal of jurisdiction, any facts relevant to the engagement of those provisions were themselves jurisdictional facts, that is facts which could not be finally determined by the Tribunal, but only by a court exercising powers of review for jurisdictional error. As Dixon J remarked in Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; 59 CLR 369 at 391: "It cannot be denied that, if the legislature see fit to do it, any event or fact or circumstance whatever may be made a condition upon the occurrence or existence of which the jurisdiction of a court shall depend. But, if the legislature does make the jurisdiction of a court contingent upon the actual existence of a state of facts, as distinguished from the court's opinion or determination that the facts do exist, then the validity of the proceedings and orders must always remain an outstanding question until some other court or tribunal, possessing power to determine that question, decides that the requisite state of facts in truth existed and the proceedings of the court were valid. Conceding the abstract possibility of the legislature adopting such a course, nevertheless it produces so inconvenient a result that no enactment dealing with proceedings in any of the ordinary courts of justice should receive such an interpretation unless the intention is clearly expressed." 30While his Honour's comments were addressed to the jurisdiction of inferior courts, rather than quasi-judicial tribunals, there remains a large question with respect to the correct construction of s 48K in relation to the limitation period. For the purposes of s 48K(3), the date on which a supply was made is unlikely to involve any issue of law and is very much the kind of fact which one would expect to be resolved by the Tribunal. Similarly, the date on which a claim is lodged with the Tribunal is something peculiarly within its knowledge. Whatever the correct answer to these questions, the issue was raised far too late for them to be addressed without an adjournment of the proceedings: none was sought. 31Finally, and fatally, the factual premise was not established. Both Mr and Mrs Crowley swore affidavits which asserted, amongst other things, that the application to the CTTT was made on or about 8 August 2008. Neither copy of the application (as annexed to the separate affidavits of the Crowleys) bore a date. As suggested by counsel for the Crowleys, each copy showed that an address given for the Atkinsons had been crossed out and a new postal address supplied. A possible inference was that the document had been refiled in December 2008. Whether or not that occurred, the evidence does not reveal. Nevertheless, Mr Atkinson is faced with a factual assertion made in the evidence of the Crowleys that the document was filed on a date in August, which would have been during the three year period. If the point had been raised below, no doubt it would have been addressed in cross-examination. It was not. If there had been a challenge to their statements as to the date, it may have been open to the Crowleys to produce supporting evidence. There was no challenge and hence no supporting evidence was provided. This is a clear case in which the principle in Coulton v Holcombe [1986] HCA 33; 162 CLR 1 should be applied. Mr Atkinson should be refused leave to rely upon this point at this late stage in the proceedings.

Challenge to order for substituted service 32Mrs Atkinson's claim, unlike that of her husband's, took issue with the finding of the primary judge that the challenge to the order for substituted service, on the basis of procedural unfairness, had not been made good. 33By January 2009, despite substantial efforts to identify where the Atkinsons were living, Mr Crowley had only been able to establish a business address in Australia Square at which, as it appeared, Mr Atkinson operated a business. Mr Crowley obtained an email address for him in January 2009 (which identified Mr Atkinson as the manager of a soccer club) and made contact with him on the email address. The email gave his occupation and work address as the chief executive officer of a company having an office (with telephone and fax numbers) at Level 42, Australia Square. Sydney. Shortly prior to 2 February 2009 the Chairperson of the Tribunal directed that the application be sent to Lisa and Clifford Atkinson, care of the company's address. 34Section 78 of the CTTT Act provided: " 78 Notices, service and lodgment of documents (1) For the purposes of this Act, a notice or document may be given to a person (and a document may be served on a person): (a) in the case of a natural person-by: (i) delivering it to the person personally, or (ii) leaving it at, or by sending it by post to, the residential or business address, or other address for service, of the person that was last known to the person giving or serving the document .... ... (3) Nothing in this section affects the operation of any provision of any law ... authorising a document to be served in a manner not provided for by this section. (4) The regulations may: (a) provide for additional means of serving, giving or lodging any notice or document, and (b) provide that a notice or document of a class specified by the regulations be served, given or lodged only in the prescribed manner." 35The Consumer, Trader and Tenancy Tribunal Regulation 2002 (NSW) (as in force in January and February 2009) made provision for service of documents as follows: " 46 Service of documents (1) An application for the purposes of any proceedings must be served on each of the other parties within a reasonable time before the return date endorsed on the application by the Registrar or in accordance with directions under subclause (6). ... (6) The Chairperson, a Deputy Chairperson or the Registrar may, without hearing from the other parties, do any one or more of the following: ... (b) direct substituted service to be effected in such manner as the Chairperson, Deputy Chairperson or Registrar considers appropriate ...." 36Although the directions for service of the documents were treated as "substituted service" before the primary judge, it is by no means clear that service on Mr Atkinson at his last known business address was not adequate service for the purposes of s 78(1)(a)(ii). In any event, the primary judge rejected the challenge to the direction given by the Chairperson. His Honour stated at [47]: "The Direction given by the Chairperson as to substituted service was open to her on the materials before her and it is reasonably probable both that the method of service adopted would have brought the proceedings to the attention of the plaintiffs and that they had knowledge of the proceedings." 37Leaving to one side the question of actual knowledge, before the primary judge the Atkinsons do not appear to have formulated with any precision the ground upon which they sought to set aside the direction given by the Chairperson as to the proper form of service. According to the regulation, she had to be satisfied that the service approved was "appropriate". In giving her direction, she no doubt needed to take into account the obligation for the Tribunal to ensure "that each party in any proceedings is given a reasonable opportunity" to give evidence, call evidence, present a case and make submissions: CTTT Act , s 35. That is consistent with the obligation of the Tribunal to accord procedural fairness: s 28(2). However, in the absence of any reasons revealing that a wrong test had been applied, the available ground of challenge was reduced to the proposition that, given the material known to have been before the Chairperson, on the assumption that the Chairperson applied the correct test, the result was nevertheless so unreasonable that the assumption is shown to be false, so that the proper conclusion is that the Chairperson did not apply the correct test: Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26; 78 CLR 353 at 360 (Dixon J). 38Whether the ground was properly presented is doubtful, if reference be had to the written submissions before the primary judge. The legal analysis stated that it was necessary for the Tribunal (or the Chairperson?) to be satisfied that the mode of service would "in all reasonable probability, if not certainty" bring the proceedings to the attention of the Atkinsons. Reference was made to Porter v Freudenberg [1915] 1 KB 857 at 889. The test, however, was somewhat differently stated on the previous page in Porter and the parties in this Court accepted that it was sufficient that the service would be "likely" to result in the defendant learning of the proceedings, being the test applied by Yeldham J in Chappell v Coyle (1985) 2 NSWLR 73 at 77 and by Gillard J in Bradvica v Radulovic [1975] VR 434 at 439(45). 39The suggestion that the material before the Chairperson was inadequate to permit the direction to be given was dismissed by the primary judge. No error has been shown in his Honour's reasoning in that regard. In any event, at least in relation to Mr Atkinson, the challenge to the direction for substituted service is rendered immaterial by the finding of his Honour at [47], referring to Mr Atkinson's denial that he had received any notice of the proceedings. His Honour stated: "In the present case Mr Atkinson's evidence cannot be regarded as reliable. I am not satisfied that he had no knowledge of the proceedings. Indeed, it is probable that the notices sent by the CTTT reached him and that the plaintiffs had knowledge of the proceedings despite their denials and assertions." 40Mr Atkinson did not challenge this finding of fact in respect of his state of knowledge. It was supported by the reasoning set out by his Honour at [39]-[45], which need not be repeated. Mrs Atkinson's complaint was that she had not been cross-examined on her denial, nor had her evidence been separately examined by the primary judge. Accordingly, it was submitted, the unreasoned rejection of her evidence could not be supported. 41As already noted, the reason why the primary judge gave little separate attention to Mrs Atkinson's circumstances was that no separate case was put in respect of each before him. The critical steps in the chain by which Mrs Atkinson was intended to obtain notice of the proceedings was by sending the material to her husband's business address. That was not because her interests or whereabouts were disregarded, but because that was the only known means which was likely to bring notice of the proceedings to her attention. It did not mean, as her counsel submitted, that knowledge of her husband was treated as sufficient knowledge for her. What it meant was that, on the probabilities, if her husband had knowledge of proceedings involving each of them, he would have conveyed that information to her. 42So far as the material before his Honour was concerned, they lived together on the premises when the building work was undertaken, Mrs Atkinson held the owner-builder permit, her husband undertook some of the work, they lived together for a period in France and they ran the proceedings before the primary judge jointly. Neither gave evidence of any absence of communication between them. In those circumstances, once a finding was made that Mr Atkinson had the relevant knowledge, the probability that Mrs Atkinson was also informed was inescapable. Although she was not cross-examined on this point, she was cross-examined. The primary judge expressly disbelieved her denial of knowledge. There was no independent objectively assessable material which suggested that such a finding was erroneous. Accordingly, there was no basis upon which this Court could properly interfere with the finding: see Fox v Percy [2003] HCA 22; 214 CLR 118.

Severance 43Finally, Mrs Atkinson asserted that, if the order made against her husband were not validly made, the order to the extent that it found her liable was also invalid. In other words, liability was not "severable". 44To support this proposition, Mrs Atkinson relied upon two authorities. The first was the decision of the High Court in Ruhani v Director of Police [2005] HCA 42; 222 CLR 489, which rejected the contention that if the conditions attaching to a licence were invalid the licence nevertheless remained valid but unconditional. The second case upon which counsel relied was Coco v The Queen [1994] HCA 15; 179 CLR 427. Neither of these cases has any bearing on the present circumstance. No authority was proffered for the proposition that a money judgment made against two persons, but invalid against one, could not be valid against the other. 45In any event, the order against Mr Atkinson must stand, so the issue does not arise.

Conclusions 46For these reasons, the proceedings must be dismissed. The appropriate orders are: (1) Direct that the proceedings brought by Clifford Atkinson be reframed so that the first and second respondents are Cameron Crowley and Eleanor Crowley. (2) Refuse Clifford Atkinson leave to appeal against the judgment of Smart AJ in the Common Law Division of 11 May 2010. (3) Order the applicant, Clifford Atkinson, to pay the costs of Cameron Crowley and Eleanor Crowley on the usual basis, and the costs of the Tribunal on a submitting basis. (4) Dismiss the application of Lisa Anne Atkinson for leave to cross-appeal against the judgment of Smart AJ delivered on 11 May 2010. (5) Order Lisa Anne Atkinson to pay the costs of Cameron Crowley and Eleanor Crowley of her leave application on the usual basis, and the costs of the Tribunal on a submitting basis. 47YOUNG JA : I agree with Basten JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 July 2011

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)

Consumer, Trader and Tenancy Tribunal Regulations 2002(NSW)

Consumer, Trader and Tenancy Tribunal Regulations 2009(NSW)

Consumer Trader and Tenancy Tribunal Act 2001(NSW)

Consumer, Trader and Tenancy Tribunal Regulation 2002(NSW)

Consumer, Trader and Tenancy Tribunal Regulation 2009(NSW)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (15 paragraphs)

Parties

Legislation Cited (7)

Cases Cited (11)