De Simone v Bevnol Constructions & Developments Pty Ltd & Ors

[8]

On 16 April 2009 the applicant, Mr Giuseppe de Simone, applied to the Tribunal for referral of certain questions of law to the Supreme Court of Victoria, pursuant to s 33 of the Charter of Human Rights and Responsibilities Act 2006 (the Charter Act). The referral application is related to an application by Mr De Simone for a partial stay of a counterclaim. I propose to briefly deal with the substantive proceedings to which these matters relate before turning to Mr De Simone's stay and referral applications.
The substantive proceeding concerns a dispute about the development of a retirement village at Ocean Grove in Victoria ('the site'). Seachange Management Pty Ltd ('Seachange') is the registered proprietor of the site and is in the property development business. It commenced proceedings against Bevnol Constructions and Development Pty Ltd (Bevnol), a builder.
It is common ground that in May 2006 Seachange and Bevnol entered into an agreement for the construction of 11 units on the site for the sum of $1,809,827.80. Seachange alleges that the agreed works were not completed within the period specified in the contract and that the work undertaken by Bevnol was deficient. Seachange claims damages, interest and costs.
Bevnol filed a counterclaim against Seachange and Mr De Simone, its sole director, and against the third and fourth respondents.[1] Bevnol claimed loss and damages by reason of Seachange's wrongful termination of the contract.
The counterclaim also alleged that Seachange and the third respondent had engaged in misleading and deceptive conduct contrary to s 9 of the Fair Trading Act 1999 (the Fair Trading Act). Alternatively Bevnol alleged that Mr De Simone, as a director of Seachange, was involved in such conduct. Insofar as Mr De Simone is concerned the substance of Bevnol's claim against him is that contrary to s 159 of the Fair Trading Act he aided, abetted or procured conduct which was misleading and deceptive, and/or unconscionable.
Mr De Simone has also been the subject of a police investigation involving allegations of obtaining a financial advantage by deception. The police investigation and Bevnol's claim against Mr De Simone arise from the same factual substratum. Mr De Simone has recently been charged with a number of offences.
In the proceedings before me the parties agreed upon certain facts relating to these matters, as follows:

[10]

The complaint concerned the circumstances in which financial assistance was sought or obtained in relation to the Seachange development and in particular the 'Construction Finance Letter' dated 24 July 2006.
Mr De Simone was charged with eight offences including obtaining financial advantage by deception.
Mr De Simone has sought a stay of the Bevnol counterclaim insofar as it relates to him (ie. paragraphs 9-12, 27-30 and 36-44 of the counterclaim).
In support of the stay Mr De Simone submitted that defending Bevnol's counterclaim may require him to forego or waive his right to silence such that his interests may be adversely affected in the subsequent criminal proceedings. He also contends that he would be denied a fair hearing in the substantive civil proceedings because he would be constrained as to the evidence he could lead in his defence lest he be disadvantaged in the criminal proceeding.
Mr De Simone has previously made an application to stay that part of Bevnol's counterclaim which relates to him and to refer certain questions to the Supreme Court pursuant to s 33 of the Charter Act.
In a decision dated 25 November[2] 2008 I dismissed Mr De Simone's application for a stay and referral. My reasons included consideration of the relevant principles and, in particular, I applied what Wootten J in McMahon v Gould[3] called guidelines for determining whether to grant a stay application where criminal proceedings are on foot or threatened. The McMahon v Gould guidelines have previously been applied by the Tribunal in determining whether to grant a stay[4].
I refused the referral application as the issues raised by the questions sought to be referred had been fully ventilated in the proceedings and the most expeditious course was to determine the application. Importantly, at the relevant time, Mr De Simone had not been charged with any offence.
On 23 December 2008 Mr De Simone lodged an application in the Supreme Court of Victoria for leave to appeal against my decision of 25 November 2008.
Mr De Simone's application for leave to appeal was heard on 20 March 2009. In a decision handed down on 3 April 2009 the Court refused leave to appeal. In the intervening period, on 23 March 2009, eight criminal charges were laid against Mr De Simone.
The Court of Appeal summarised the key issues raised as follows:

[21]

Does the requirement of VCAT to afford a speedy hearing under section 98(1)(d) of the VCAT Act affect the balance to be struck in considering a stay of proceedings that would otherwise be afforded under sections 24 and 25 of the Charter?
Does the decision in Reid v Howard (1995) 184 CLR 1 elucidate the rights recognised under the Charter in section 24 to a fair hearing and in section 25 to the guarantees provided to persons charged and if so what modification if any is warranted because of section 105 of the VCAT Act?
Given (i) the rights set out in the Charter in sections 24 and 25 as interpreted in accordance with section 32 and the mandates of sections 6(2)(b), 38 and 39 and (ii) the decision of the High Court in Reid v Howard as modified if necessary by the specific terms of section 105 of the VCAT Act, is the decision in McMahon v Gould still operative in Victoria? If it is still operative what modifications if any need to be made to the guidelines expressed therein? If it is not operative, what guidelines if any ought be applied by courts and tribunals when considering applications for a stay of civil proceedings when (a) criminal charges have been laid or (b) there is a formal investigation that may lead to charges (including further charges)?"
During the course of oral argument it was generally agreed that the questions posed may not be appropriately phrased and as such may not specify a relevant question of law relating to the application of the Charter or a question which arises with respect to the interpretation of a statutory provision in accordance with the Charter.
Mr Reid, Counsel for Bevnol, submitted that if the referral was to be granted then the questions to be referred should be as follows:
- (i) In what way, if any, are the principles in McMahon v Gould to be modified given the rights expressly recognised in the Charter, particularly in ss 24 and 25?
- (ii) How should ss 80(1), 97, 98(3) and 105 of the Victorian Civil and Administrative Tribunal Act 1998 be interpreted in light of ss 6(1)(b) and 32 of the Charter Act?
Mr De Simone accepted Mr Reid's proposed formulation of the referral questions but submitted that ultimately the appropriate formulation was a matter for the Tribunal. In Mr De Simone's submission the question(s) should be formulated in a way that resolved the legal issues relating to the application of the Charter to his stay application.
Mr De Simone advanced three points in support of the referral:
- ➢ The intention of the referral power in s 33 is that questions of law which were important and have general applicability ought to be authoritatively determined by the Supreme Court.
- ➢ The questions proposed are live issues in the proceeding.
- ➢ The referral process would be more expeditious than the Tribunal dealing with the question, with a consequent right of appeal.
In reply, Mr Reid's written submissions were largely directed at the four particular questions Mr De Simone originally sought to refer. In the course of oral argument Mr Reid submitted that if the Tribunal was satisfied that there was now a real argument as to whether ss 24 and 25 of the Charter Act required that the McMahon v Gould guidelines be revised, then I should refer an appropriately formulated question to the Court.
I am satisfied that a question of law has arisen that relates to the application of the Charter. The particular question is whether the McMahon v Gould principles should be revised in light of the Charter, and in particular ss 24 and 25 of the Charter Act.
Section 24 of the Charter provides that a person charged with a criminal offence or a party to a civil proceeding has a right to have the charge or proceeding decided by a competent, independent and impartial court or tribunal after a fair and public hearing.
Section 25(1) provides that a person charged with a criminal offence has the right to be presumed innocent until proven guilty according to law. Section 25(2) sets out a number of minimum guarantees which apply to a person charged with a criminal offence, including the right 'not to be compelled to testify against himself or to confess guilt' (s 25(2)(k) of the Charter).
Mr De Simone has now been charged with a number of criminal offences which arise from the same factual substratum as Bevnol's counter claim against him. The fact that Mr De Simone has been charged with a criminal offence enlivens ss 24 and 25.
Further, in deciding to refuse leave to appeal in relation to my earlier decision the Court of Appeal considered that Mr De Simone had 'a real argument that the McMahon principles should be modified in light of ss 24 and 25 of the Charter' (see paragraph 17 above).
I am satisfied that it is appropriate to refer such a question to the Supreme Court for determination. The relevant issue has not been the subject of prior determination by the Tribunal or by a court and raises an important issue of general application. I have also had regard to the Court of Appeal's observation that there is a 'real argument' as to whether the McMahon v Gould guidelines should be modified in light of ss 24 and 25 of the Charter Act. The position taken by the parties is also relevant and I have taken that into account. I now turn to the formulation of the question to be referred.
I have considered the formulations advanced by Mr Reid (and accepted by Mr De Simone) and have decided to refer the following question to the Supreme Court for determination pursuant to s 33 of the Charter Act:

De Simone v Bevnol Constructions & Developments Pty Ltd & Ors - [2009] VCAT 888 - VCAT 2009 case summary — Zoe

At a glance

Court

Decision date

Before

Source

Judgment (31 paragraphs)

De Simone v Bevnol Constructions & Developments Pty Ltd & Ors (Domestic Building) [2009] VCAT 888 (13 May 2009)

Parties

Legislation Cited (1)

Cases Cited (2)