Golden Mile Realty Pty Ltd v Owners Strata Plan 39734 & ors; Gilbey Burgess Strata Management Pty Ltd v Golden Mile Realty Pty Ltd & ors; Gilbey Burgess Strata Management Pty Ltd v Conway-Thau & Associates Pty Ltd

The Application in Proceedings 13073/2004 32 On 21 September 2004 Golden Mile filed in the Registry of this Court a Summons claiming the following relief: "1. An order that the terms of the whole of the decision (the Decision) of Magistrate C J Barkell given on 24 August 2004 in the Local Court (Civil Claims), General Division issued at Downing Centre Sydney in File No 5452 of 1998 be varied. 2. A declaration that the Decision was erroneous in points of law in its entirety. 3. An order that the Defendants pay the Plaintiff damages in the sum of $40,000.00. 4. An order that the Defendants pay the Plaintiff compensation for exemplary damages pursuant to Part 7 rule (4) of the Supreme Court Rules 1970. 5. An order that the Defendants pay the Plaintiffs interest pursuant to S 39 A (1) of the Local Courts (Civil Claims) Act 1970 from 6 October 1997 to the date judgment takes effect. 6. An order that the Defendants pay costs." 33 This Summons is intended, obviously, to institute an appeal to this Court against the whole of the judgment given by Barkell LCM on 24 August 2004. Such an appeal is incompetent unless it satisfies the relevant provisions of section 69 of the Civil Claims Act which are: "(1) Subject to sub-section (2), all judgments and orders of the court exercising jurisdiction under this Act shall be final and conclusive. (2) A party to proceedings under this Act who is dissatisfied with the judgment or order of the court as being erroneous in point of law, may appeal to the Supreme Court therefrom. ……………………….. (3) A party to proceedings under this Act who is dissatisfied with the judgment or order of the court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court, but only by leave of the Supreme Court. (4) The Supreme Court may determine an appeal made under this section: (a) by 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 to the court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal. ……………………………………………… " 34 Appellate proceedings of the foregoing character are governed by SCR Part 51A. R 2 of that Part requires that the originating Summons state: "………… the judgment, order or determination which the party instituting the appeal seeks in place of the decision of the tribunal below". R 5 of that Part requires that the plaintiff: "………… shall file and serve with or subscribe to the Summons instituting the appeal a brief but specific statement of the grounds relied upon in support of the appeal and as to whether the appeal is from the whole or part only and what part of the decision in the tribunal below". 35 The Summons of 21 September wholly fails to satisfy the requirements of Rules r 2 and 5. The Summons, in order to comply with Rule 2, ought to have claimed an order that the whole of the judgment of the Local Court given on 24 August 2004 be set aside, and that the plaintiff's action in the Local Court be remitted to that Court, there to be dealt with according to law; together with an appropriate order respecting the costs of the appeal. The Summons fails completely, and on its face, to satisfy the requirements of Rule 5. 36 On 29 September 2004, Golden Mile filed a document which is entitled: "Supplementary Notice of Summons"; and which includes in its body a notification that the document is: "…………… made and filed pursuant to Part 51A rule 11(1) of the Supreme Court Rules 1970". 37 The other contents of the body of the document are central to the present application. They are in this form: "1.1 Finding that the erected hoarding in front of the Plaintiff's shop front provided safety to the public. 1.2 Finding that the erected hoarding complied with safety requirements where the facts or inferences could not be supported if the provisions and the application of the WorkCover Code of Practice had been properly construed and understood. 1.3 Failing to explain and give consideration to the detrimental effects created by the erected hoarding. 1.4 Not taking into account the existence of a retail lease between the Plaintiff and the owner of a strata lot, and hence the mutual obligations between the Plaintiff and the Defendants. 1.5 Finding that the Plaintiff was not vulnerable to the acts or omissions of the Defendants. 1.6 Finding inferences without evidence to justify the erection of an inappropriate and non complying class B hoarding. 1.7 Finding that the time taken to carry out the works by the Defendants was not excessive when there was no evidence to support such finding's inferences, nor could such finding be reasonably supported if the licences and the letters issued by the Council had been properly understood. 1.8 Finding that the Defendants were constrained and therefore had no control over the type of class B hoarding which was erected. 1.9 Finding that the Plaintiff's premises were not damaged." 38 This document, also, seems to me to be quite misconceived. It does not in truth amend the Summons filed on 21 September, since it does not claim any substantive relief. It does not amend a previous Rule 5 Statement of Grounds, because there was none. What the document seems to be attempting is to avoid the consequences of an antecedent failure to comply with Rule 5, by employing the device of a purported amendment made pursuant to Rule 11(1). Indeed, paragraph 4 of an affidavit sworn by Mr. Lengyel on 9 November 2004, and read by him in support of the Summons, says so in terms. 39 On 27 October 2004 Gilbey Burgess filed a Notice of Motion claiming principally the following orders: "1. That the originating Summons be dismissed pursuant to SCR Part 13 r.5; and 2. That Mr. Lengyel pay the costs of the Motion." 40 The Notice of Motion claimed alternative relief by way of orders: "1. That Grounds 1.1 - 1.5, 1.8 and 1.9 of the Summons be struck out as incompetent: SCR Part 15 r.26; 2. That Golden Mile provide security for costs; and 3. That Mr. Lengyel himself pay the costs of the Notice of Motion: SCR Part 32A r.4." 41 On 11 November 2004 the Corporation, and Bonacci Rickard, filed separately Notices of Motion seeking relief that was, in substance, the same as that sought by Gilbey Burgess. 42 The course of events thereafter is not completely clear. The conventional records of any hearing which are kept by the relevant Associate suggest that Master Malpass, ex parte and in chambers, ordered that the "Notice of Motion" be referred to Registrar Howe for hearing, the "proceedings" to be listed at 9.00 a.m. on 25 November 2004 before that Registrar. 43 It can be deduced similarly that, when the "proceedings" so came on for hearing before Registrar Howe on 25 November 2004, the Registrar referred the "matter" to that day's Common Law Division Duty Judge, who was Simpson J. The note made by, presumably, the Registrar on the Record of Proceedings is: "Master declined to hear matter. Referred to D/Judge". 44 Simpson J ordered, according to the Record kept by her Honour's associate: "Return matter to Registrar for determination of issues he has power to deal with". 45 The "matter" returned, thereupon, to Registrar Howe. It seems to be clear that the Registrar heard thereupon the Notice of Motion of 27 October 2004 and the two Notices of Motion of 11 November 2004. Judgment was reserved; and was delivered in writing on 10 December 2004. The Registrar made the following orders: "1. Pursuant to Part 13 rule 5 the proceedings are dismissed. 2. The plaintiff is to pay the defendants' costs of the proceedings including the costs of these applications. 3. The question of Ferdinand Lengyl (sic) being personally liable to indemnify the plaintiff for the costs it has been ordered to pay is stood over generally with liberty to restore on giving seven days' notice." 46 On 30 December 2004 Golden Mile filed a Notice of Motion seeking the following orders: "1. That the Registrar's decision "………… be discharged in its entirety, pursuant to Part 61 rule 3(1) of the Supreme Court Rules 1970; and 2. That the Corporation, Gilbey Burgess and Bonacci Rickard, the respondents nominated in the Notice of Motion, pay Golden Mile's "……costs on an indemnity basis to reflect the way in which the defendants conducted the case" . 47 The application thus made is the application which was heard before this Court on 3 August instant. 48 The Registrar says in paragraph 2 of his judgment: "Schedule E to the SCR defines the jurisdiction of a registrar. The power to dismiss proceedings is not included in Schedule E. On 19 November 2004, Master Malpass referred the motions to a registrar for determination pursuant to paragraph 11 of Part 2 of Schedule E. Accordingly, that part of the hearing took place under delegated jurisdiction." 49 I have assumed that this correctly states what happened on 19 December 2004; although I cannot locate within the Court file now before me any associate's Record to that effect. 50 Given that assumption, the nature of the application which has now to be adjudicated is that it is a review application within the purview of SCR Part 61 r 3. The relevant provision of r 3 is: "(1) Where a Registrar …………. makes an order or decision or does any other act in any proceedings, the Court may, on motion by any party to the proceedings or application as the case may be, review the ……………… order, decision or act, and may make such order by way of confirmation, variation, discharge or otherwise as the court thinks fit." 51 What is entailed in such a review process is the subject of settled authority in this Court. It suffices to quote from the judgment of Santow J in Westpac Banking Corporation v Abemond Pty Ltd [unreported, 28 October 1994]: "I deal first with such authority as is directly applicable to Part 61 Rule 3 itself, or its predecessor, Part 78 Rule 88. The latter was the subject of a decision by Helsham J in re: The Will of Sheppard (1972) 2 NSWLR 714 at 716-7. Part 78 Rule 88 in its relevant part, reads as follows: "88 (1) Where the proceedings are heard by the registrar, any party may apply to the court for review of any order made by the registrar on the hearing. (2) The court may make such order by way of confirmation, variation, discharge or otherwise as the court thinks fit. At 716-7 Helsham J made clear that the Court is enabled to review all aspects of the finding; that is to say to re-hear the matter de novo, thought desirably with a report from the Registrar as to his or her reasons so the Court "may have … access to all material available to the Registrar". His Honour said: "I am satisfied that the proper role of the Court enables it to review all aspects of the finding of the Registrar. The Court will not restrict itself to interfering only if the Registrar acted upon some mistaken principle." Indeed such a broader scope for review, in comparison to appeal from the Master, reflects a distinction which may properly be made, without disrespect to the critical work carried out under daily pressure by skilled and experienced Registrars of this Court. That is to say, the distinction between judicial review of an administrative official's decision in carrying out a quasi-judicial function, compared to judicial consideration by way of appeal from a judicial officer's exercise of a judicial function, under s75A of the Supreme Court Act . In the latter, there are inhibitions both as to the introduction of fresh evidence, only permitted with leave and the necessary requirement for finding an appealable error in exercising discretion, not merely an inclination to exercise it differently. Neither such inhibition apply to review of a Registrar's decisions (sic). This is so, though there remains the desirability, in practice, "to look for some proper basis for disturbing the decision under challenge; as well as the natural inhibition on unrestrained substitution of the reviewing court's views for the body with the advantage of having seen any witnesses and having dealt with the matter at the outset. But that is very different from concluding that such a review may not be a re-hearing. Compare in the context of a review under s36 of the Compensation Act 1984 (NSW) Kirby P in Boston Clothing Co Pty Ltd v Margaronis , who rejected any notion of a restricted review and the decision, there approved and made in the same legislative context, of Burke CCJ in Mansini v Director General of Education 30 January 1990, (unreported) earlier quoted. Burke CCJ considered the word "review" permitted in law "an unfettered re-consideration or re-evaluation of the decision below and the material upon which it was based." 52 I approach the present review in accordance with the principles there stated. 53 I have set out earlier herein and at paragraph 54, the nine "grounds" that are set out in the so-called "Supplementary Notice of Summons". The Registrar dealt with each in turn of those "grounds", and ruled in respect of each "ground" that it raised no error in point of law. The Registrar then considered whether he should deal with the Summons by striking it out: SCR Part 15, r 26; or by dismissing it outright: SCR Part 13 r 5; and opted for the second of those alternatives. 54 It seems to me to accord with practical convenience to structure my own consideration of the Registrar's reasoning by following the scheme of the Registrar's approach. 55 I should add that the Registrar considered, in paragraph 10 of his Reasons, the notion of an error of law; and various of the characteristics that distinguish a ruling on a point of law from a finding of fact. That analysis of the Registrar is, in my respectful opinion, plainly correct; and I adopt it for present purposes. · Ground 1.1: Finding that the erected hoarding in front of the Plaintiff's shop front provided safety to the public 56 Mr. Lengyel swore in support of his present application for review an affidavit of 30 December 2004. In that affidavit Mr. Lengyel summarises his case upon each of the "grounds" 1.1 through 1.9. It is convenient to use the relevant parts of that affidavit as outlining the substance of Mr. Lengyel's contentions as to the errors allegedly made by the Registrar. 57 As to Ground 1.1 Mr. Lengyel deposes: "Safety is a crucial issue. All the defendants' submissions were based on the allegation that the hoarding provided safety. Had the Registrar taken into account F Lengyel's affidavit dated 9 November 2004, paragraphs 18 to 37, he would have realised that there was no evidence to sustain that the "falling bricks penetrated the awning", nor was there any evidence that the hoarding provided safety viz, it was not a question that the Magistrate got the facts wrong. There was simply no evidence." 58 What Barkell LCM actually says about this matter is: "The hoarding that was built provided protection for pedestrians using the footpath outside Gowrie Gate from any harm occasioned by falling bricks which penetrated the awning. It did not provide protection for persons using the road from bricks which might fall onto the road. The plaintiffs acknowledge that public safety concerns are paramount, but say that these concerns would have been more effectively addressed by another design of hoarding that would not have obscured their window displays." 59 In my opinion it is quite misconceived to read this paragraph as conveying that bricks had actually penetrated the awning. It seems to me to be clear that what the learned Magistrate is finding is that the hoarding which was actually built, whatever its shortcomings might have been, did in fact provide protection for pedestrians using the footpath, in that should further bricks fall and actually penetrate the awning, then the hoarding would at least stop the falling bricks from striking pedestrians who might be standing or walking beneath the path of the falling material. 60 The folder, Exhibit P1, tendered by Mr. Lengyel, contains a copy of a report from an engineer, Mr. David Smee. The report was Exhibit 23 in the Local Court hearing. Mr. Smee says, among other things: "3.2 In this case "biscuit bricks" were the concern, heavier than painting equipment but not of particularly great weight. The brick pieces that had already come loose had damaged the sheeting on the awning, but not the soffit, and it is unlikely that even if another piece had come loose, damage would have been more significant." "3.5 It has been suggested by Bedrossian that the hoarding did not provide adequate protection for pedestrians nor for motorists. The configuration noted in 3.4 above would certainly provide adequate protection for pedestrians on the footpath, as in effect they were in an enclosed tunnel. In relation to protection for traffic on the street, while it is unlikely that (biscuit) bricks would bounce off the awning, with the awning sheeting taking impact and deforming, and if penetrating the awning, being stopped by the hoarding, it is still possible that a small brick or piece of brick could bounce or be deflected onto the road as there was no fascia barrier to the road above the awning. I note also in relation to the safety issue, it would appear that as the hoarding was in existence for 3 months and with the extension given by Council, it would seem that Council was satisfied with the safety aspects of the hoarding or alternatively had not inspected it." 61 The exhibit contains also a statement from Mr. G. W. Fairbairn, the scaffolder who actually erected the hoarding. Mr. Fairbairn says: "12. The hoarding was erected providing for the following: (i) decking underneath the awning to catch any bricks or debris falling from the building and breaking through the awning (10 kpa) (ii) mesh guards between the awning and the decking (iii) the plywood planks were erected to a height of about 2.4 metres at the edge of the footpath where the garden bed commenced (instead of flush against the building alignment). (iv) concrete counterweights held the structure down. (v) the plywood planks had a structural significance apart from providing protection to the public from falling and ricocheting building material and debris. (vi) mesh guards were installed below the awning to protect against falling and ricocheting debris. (vii) cladding was fixed to various structural supports to prevent people being injured if walked into. For example - the uprights to which the planking was attached had bolts protruding. This was covered with cladding. 13. The hoarding had to provide both safety for the public as well as security for the occupants of the building. It was therefore built with the aim of preventing the public climbing up the hoarding onto the awning and access to the residential units." 62 I have not had the benefit of seeing the transcript of the oral evidence given before the learned Magistrate. Mr. Lengyel provides, in various parts of various affidavits and submissions, selected excerpts taken from that transcript. I am in no position to say whether the selected quotations are accurate; or whether, if accurate, they might convey something different if set fairly into the context of which they form a part. 63 The report of Mr. Smee, and the statement of Mr. Fairbairn, were part of the evidence before the learned Magistrate. That being so, it is in my opinion untenable to propound "that there was simply no evidence" to support what the learned Magistrate finds in paragraph 22. That being so, the finding itself is, in my opinion, plainly a finding of fact. The Registrar was, in my opinion, correct so to rule. · Ground 1.2 Finding that the erected hoarding complied with safety requirements where the facts or inferences could not be supported if the provisions and the application of the WorkCover Code of Practice had been properly construed and understood. 64 Mr. Lengyel deposes: "Reference is made to F. Lengyel's affidavit dated 9 November 2004, paragraphs 38 to 45. In brief, the WorkCover Code of Practice is prima facie evidence that the hoarding breached statutory safety requirements. There was no evidence to the contrary. The question then is whether it was open for the Magistrate to make the findings that Council required a hoarding which did not meet safety standards. From the Council's alleged requirement, her Honour drew the inferences that the defendants were constrained. Golden Mile contends that the Registrar and the Magistrate, by overlooking the meaning and significance of the terms "tunnel effect" in clause 3.7 (c) and "protective fence" in clause 6.3 of the Code of Practice, committed an error of construction and therefore erred in law - Hope v Bathurst City Council [1980] HCA 16 paragraphs 8-10, Malcolm Carr v Trevor Neill [1999] NSWSC 1263 at [19] quoting Mahony v Industrial Registrar . Further, it is a question of law if the facts lead to only one legal conclusion viz. there was no evidence that the hoarding in either side of the "protective fence" or vertical planks, provided safety." 65 What Barkell LCM actually says on this topic is: "21. Mr. Fairbairn, who gave evidence for Emu, was contracted by BMP to build the hoarding. He was informed that council required a Class B hoarding, obtained a licence from council to erect a standard Class B hoarding and, on the same day, constructed the hoarding. He said that a standard Class B hoarding is built with planking against the construction site. At Gowrie Gate that standard would have required the planking to be flush against the shop windows. Mr. Fairbairn said that he was approached by a shopkeeper who expressed concern that the windows of his shop would be completely obscured. Mr. Fairbairn thereupon decided to reverse the usual construction and place the planking at the kerb edge of the hoarding. In so doing, he breached the WorkCover Code of Practice. 22. The hoarding that was built provided protection for pedestrians using the footpath outside Gowrie Gate from any harm occasioned by falling bricks which penetrated the awning. It did not provide protection for persons using the road from bricks which might fall onto the road. The plaintiffs acknowledge that public safety concerns are paramount, but say that these concerns would have been more effectively addressed by another design of hoarding that would not have obscured their window displays. 23. The plaintiffs led evidence of differently designed hoardings that would provide proper protection without obscuring their window displays. One such Class B hoarding is illustrated in Exhibit 24. The hoarding is open to the street and has a fascia at awning level the purpose of which would be in this case to contain any falling bricks. I am satisfied such a hoarding would have been more effective in protecting the public from any further brick fall than was the hoarding used. I am also satisfied that such a hoarding would have involved a design element which would have required some time to produce: estimated by the plaintiffs' building expert to be about 48 hours. Mr. Smee, an engineer called by the plaintiff to give expert evidence, said that such a hoarding would take about one week to build. Such a hoarding would also require the plans to be submitted to council before a licence was issued." 66 The first thing to be said about Mr. Lengyel's contentions is that they do not challenge any of the findings of fact actually made by the learned Magistrate in paragraphs 21, 22 and 23. 67 The second thing so to be said is that Mr. Lengyel does expressly challenge the finding made in the concluding sentence of paragraph 64; but he does not seem to me to articulate a reasoned argument to the contrary; and even had he done so, the finding would still stand as a finding of fact that was open, to say the least, on the evidence. 68 The third thing so to be said is that Mr. Lengyel clearly sees the acknowledged breach of the relevant Code of Practice as being, so to speak, a killer-blow against all of the parties whom he has sued. As at present advised, I cannot fathom that reasoning. To regard the Code of Practice as somehow establishing a fixed and immutable standard from which there may never be any departure of any kind is, in my opinion, inconsistent with the introductory material that prefaces the substantive provisions of the Code. It will suffice for present purposes to quote the opening four paragraphs of that material: "An approved industry code of practice is a practical guide to achieving the standard of health, safety and welfare required by the Occupational Health and Safety Act 1983 and Regulations for a particular area of work. An approved industry code of practice should be followed, unless there is an alternative course of action which achieves the same or a better standard of health, safety and welfare in the workplace. An industry code of practice is approved by the Minister for Industrial Relations and Employment. It comes into effect on the day the notice of this approval is published in the NSW Government Gazette or on the day specified in the Gazette notice. An approved industry code of practice is designed to be used in conjunction with the Act and Regulations but does not have the same legal force. A person or company cannot be prosecuted for failing to comply with an approved industry code of practice ." [emphasis added] 69 I see no reasonable basis upon which it could be said that the learned Magistrate erred in law in the present connection. · Ground 1.3 Failing to explain and give consideration to the detrimental effects created by the erected hoarding 70 Mr. Lengyel deposes: "15. Ground 1.3 - I reaffirm paragraphs 47- 49 of my affidavit dated 9 November 2004. The "detrimental effects" have been created by the hoarding built by the defendants, namely the vertical planks which effectively created risk to safety and trade. Without the vertical planks, there would have not been any concern about safety between the shop front and the planks. In my oral submission, I also made reference to paragraph 14 in Coshott v Shipton Lodge Cobbity Pty Ltd [2004] NSWSC 353 where Simpson J states that once a contract has been established, that is essentially a question of law. The Strata Scheme Management Act provides the covenants between the Owners corporation and a lessee to the extent that there is an incontrovertible Contract between the parties." 71 A reference to paragraphs 47 - 49 of the earlier affidavit discloses that those paragraphs are prefaced by this heading: "This covers GROUND OF APPEAL 1.3 - there were substantial factors against Her Honour's drawing the inference that the defendants had no control over the type of hoardings." 72 The short answer to that proposition is that the learned Magistrate made no such findings. The relevant findings have been earlier quoted. The findings, all of them findings of fact, were that in the situation then existing it was necessary for all concerned to move with urgency; that what was chosen as the actual method of providing some practical protective hoarding cut some corners from what might have been thought a better method; but the choice was justified by the need to provide some protection immediately rather than to choose an alternative that would take, in comparative and practical terms, too long to accomplish, with all that was thereby entailed as to the obvious risk of injury to pedestrians who might walk, unprotected, beneath the faulty façade. 73 Ground 1.3 identifies no error of law. · Ground 1.4 Not taking into account the existence of a retail lease between the Plaintiff and the owner of a strata lot, and hence the mutual obligations between the Plaintiff and the Defendants 74 Mr. Lengyel deposes: "Ground 1.4 - In my oral submissions, I referred to the Strata Schemes Management Act 1996 which imposes mutual obligations between the owners corporation and a lessee of a strata lot - see paragraph 50 of Affidavit of 9 November 2004. I should add that the Owners Corporation, the first defendant, is the owner of the common property and has a vested responsibility for the management, control and administration of the strata scheme. The duty of care must arise out of the defendants' occupation, control and management of the common property. Similarly to the Ground of appeal 1.2, this ground, by virtue of a retail lease of a strata lot, the facts are such as to bring this case within the provisions of the Strata Act. The question is therefore one of law only - Lord Parker of Waddington in Farmer v Cotton's Trustees (1915) AC 922 at P 932 - see also paragraph 14 above where the key word here is control ." 75 The learned Magistrate actually dealt as follows with this argument: "The second and third defendants had a responsibility to maintain the common property of the strata plan, whether or not a particular lot was occupied by an owner or a lessee. Hence Mrs. Lake said that she would take action to fix a water leak in the plaintiffs' leased premises as she would in any other part of the building. The plaintiffs seek to draw from this responsibility a special relationship of care owed by these two defendants to protect the interests the plaintiffs have in the visibility of their window display. In my view the second and third defendants' responsibility for maintenance of the building does not extend to the protection of that interest." 76 This is, in my respectful opinion, clearly correct. The relevant common property is constituted by the windows themselves, not by what is displayed in the windows. 77 This ground identifies no legitimate error of law. · Ground 1.5 Finding that the Plaintiff was not vulnerable to the acts or omissions of the Defendants 78 Mr. Lengyel deposes: "Ground 1.5 - Additionally to my affidavit dated 9 November 2004 referring to paragraphs 51 to 61, I tendered written submissions at the hearing in respect of Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16 and pages 48 to 52 of 58 entitled "Vulnerability and Control" which were part of Golden Mile's submissions in the local court proceedings. Further, in my oral submissions, I stated that on question of vulnerability, there are two separate questions: (a) the application of the appropriate principles of law and (b) the findings of fact to support a conclusion based on these principles. The fundamental question must be, what could have the plaintiff done to protect itself from the consequences of an inappropriate hoarding which was built without notice, noting that economic loss occurs at the instant of its presence - McHugh J at [55], Woolcock v CDG , quoting Lord Lloyd of Berwick. It is clear that the Registrar was influenced by the owners' tendered copy of Allen v Kerr and Anor when stating in paragraph 17: "Vulnerability is a concept akin to the proximity of a person to the effects of a tort, or the foreseeability by a person of a duty of care to his neighbour" . Notwithstanding that the seven justices in Perre v Apand and Woolcock Street v CDG would not agree with such proposition, the facts are that the Magistrate at paragraph 66 of her Reason for Decision acknowledged that the plaintiffs showed "……………some salient features, or some indicia of proximity indicating their entitlement to recover in a claim in negligence for damages for economic loss, in my view they have failed to show they were vulnerable and have failed to persuade me that any one of the defendants had the measure of control which would allow the plaintiffs to recover the damages they claim". (emphasis added)" 79 It is appropriate to consider separately the two issues thus raised of vulnerability and of control. 80 I take the relevant principles of law to be those that are established by the decision of the High Court of Australia in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] 216 CLR 515. It suffices to quote as follows from the joint judgment of Gleeson CJ, Gummow, Hayne and Heydon JJ at [23]: "Since Caltex Oil and most notably in Perre v Apand Pty Ltd the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed. 'Vulnerability', in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, 'vulnerability' is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant." 81 The learned Magistrate deals in paragraphs 53, 54, 55 and 56 with the issue of vulnerability as thus defined. The paragraphs are lengthy, and I need not reproduce them in detail. Suffice it to say that the learned Magistrate makes a number of findings of fact on the issue of vulnerability; and I see no justification for holding that there was no evidence capable of supporting each of those findings. 82 I read paragraph 17 of Mr. Lengyel's affidavit as submitting that the learned Magistrate fell into error of law in connection with the correct definition of what the law requires in the matter of vulnerability. I do not agree. In paragraphs 26 through 43 of the Reasons for Decision of the learned Magistrate, there is a careful analysis of the individual judgments of the Justices of the High Court who decided Perre v Apand Pty Ltd (1999) 198 CLR 180, the then leading High Court case on the topic of civil liability in damages for negligence when the damage claimed is pure economic loss rather than damage to person or property. I can see no error in that analysis. I can see no error in the way in which the learned Magistrate applied the principles derived from that analysis to the given facts. 83 The learned Magistrate deals in paragraphs 57 through 65 of the Reasons for Decision with the issue of control as defined in Woolcock. These paragraphs, also, constitute a large body of material; and it is not I think necessary to set out here the fine detail of what is there said. Suffice it to say that the learned Magistrate examines carefully, and makes clear and logical findings about, each aspect of the issue of control as it had been canvassed at the hearing in the Local Court. I do not see that any such finding is erroneous either in law or in fact. · Ground 1.6 Finding inferences without evidence to justify the erection of an inappropriate and non complying class B hoarding 84 Mr. Lengyel deposes: "Ground 1.6 - is relevant to the crucial finding whether the hoarding provided or did not provide the required safety to the public. Also crucial is the erection of the planks and what evidence existed to justify their presence. No Court can make a decision whether this ground of appeal is an issue of fact or an error of law, without referring to the facts inferred by the Magistrate and what was the evidence to support the inferences." 85 It seems to me that this ground adds nothing of substance to Grounds 1.1 and 1.2; and I see nothing that can be added usefully to what has been said previously herein about those two grounds. · Ground 1.7 Finding that the time taken to carry out the works by the Defendants was not excessive when there was no evidence to support such finding's inferences, nor could such finding be reasonably supported if the licences and letters issued by the Council had been properly understood. 86 Mr. Lengyel deposes: "Ground 1.7 - I repeat paragraphs 63 to 64 of my affidavit dated 9 November 2004. It was simply not open for the Magistrate on the evidence available to find that the time taken by the defendants to carry out the façade rectification was reasonable. If the Magistrate's conclusion is accepted, there cannot be possibly a finding that the defendants were not in control, since the defendants' actions were in breach of the Council's Emergency Order issued under the Local Government Act and the Licences. - See also letter from Council threatening legal action. " 87 I do not agree that the learned Magistrate was not entitled to accept Mr. Smee's evidence; and to accept it either in whole or in part. The assessment of Mr. Smee's credit, and the assessment of the weight to be given to his evidence as a whole, or to any part of his evidence, were issues of fact for the learned Magistrate. No issue of law arises from the learned Magistrate's acceptance of the relevant parts of Mr. Smee's evidence. 88 As to the second sentence of paragraph 19, I have difficulty in understanding what submission it is intended to convey. The relevant facts appear to be:

The Application in Proceedings 13913/2004 106 By an Ordinary Summons for Leave to Appeal filed on 24 November 2004 Gilbey Burgess claims against Golden Mile, the Corporation, Bonacci Rickard, and BMP the following relief: "1. An order granting leave to appeal against the costs orders made by Magistrate Barkell in the Local Court at Sydney (plaint number 5454 of `1998) on 11 November 2004 ('the Local Court proceedings') that Golden Mile Realty Pty Limited ('Golden Mile'), the plaintiff in those proceedings and first defendant in the current proceedings, is liable to pay the costs of the Local Court proceedings. 2. An order that the third defendant in the current proceedings, Rickard Hails Moretti Pty Limited (formerly known as Bonacci Rickard (NSW) Pty Limited), pay the costs of the Local Court proceedings of the plaintiff in the current proceedings, Gilbey Burgess Strata Management Pty Limited ('Gilbey Burgess'), except those costs solely referable to Golden Mile's statement of claim against Gilbey Burgess, and the Third Party notices against it by The Owners - Strata Plan 39734 and BMP Industrial Pty Limited." 107 The general principles which govern the grant of leave to appeal are stated as follows, and in terms with which I respectfully agree, by Associate Justice Harrison in Ermsdorf Holdings v Yuyucuoglu [2004] NSWSC 681 at [3]: "In general, to grant leave two thresholds have to be satisfied, namely firstly whether in all the circumstances the decision attracts sufficient doubt to warrant its re-consideration on appeal, and secondly, whether substantial injustice would result if leave was refused supposing the decision is wrong. It is important to bear in mind that the purpose of the leave requirement is that it is intended to act as a filter to ensure unsuitable appeal proceedings are not able to be brought with the attendant demands which that places upon the resources of the court, the burden which it places upon other parties and the delays which it causes to other litigants. …………….. ." 108 The relevant reasoning of the learned Magistrate appears at pages 20 - 22 of the transcript of 11 November 2004. I have, as it happens, the transcript for that particular day: it is part of the materials constituting Exhibit P1 in the present proceedings. 109 It is expedient to quote from that transcript the concluding paragraphs of the exposed process of reasoning: "What I am in fact left with, in my view, is the argument that the third defendant was brought here only because it came to answer the claim of the fourth defendant. The matter that I heard was a matter commenced by statement of claim and in fact I heard the statement of claim and the defences to it. The fact that incidentally I heard evidence which would be useful in a cross-claim is quite clearly not impossible, it is quite clearly a fact that I did, but what I heard was the statement of claim. The fact that the third defendant was initially brought into this by the cross-claim of the fourth defendant does not alter the fact that what I heard was the plaintiff's claim against the defendant and the speculation one of the parties in their submissions raised - either a submission or an inference - as to why the plaintiffs had joined the third defendant. [emphasis added] It may well be as a result of the cross-claim, on the other hand it may well be as a result of the defence that the fourth defendant had put on and I can't speculate about that. I don't know that the plaintiffs would have joined or not joined the third defendant were it not for that cross-claim. It certainly seems to me that the event that the costs should follow is the event of the plaintiffs failing to prove either of the claims and that should be the order. And I do intend to make that order." 110 The material emphasised in the preceding quotation, if read literally, suggests to me that the nine day hearing before the learned Magistrate concerned only the concurrent claims of the two plaintiffs in the Local Court against each of the defendants sued by those plaintiffs. If that was in truth what happened, then the costs orders made by the Magistrate were, in my opinion, correctly made. 111 In the absence of the entire transcript, or at least of all of the relevant parts of it, it is impossible to be sure of quite what basis was accepted by those concerned as being the basis at the Local Court hearing: that is to say, whether the basis was that the concurrent claims of the plaintiffs would first be adjudicated; or whether the basis was that there would be what I might call a rolled-up hearing of the principal claims and of the maze of Third Party cross-claims. Doing the best I can with material that is unhelpfully ambiguous, I propose, in the interest of achieving a proper finality, to deal with the present application upon the footing that the learned Magistrate was presented with a mass of evidence undifferentiated as between the principal claims and the Third Party proceedings, so that had the plaintiffs succeeded against any defendant, then the learned Magistrate could have dealt, upon the basis of the totality of the evidence then in hand, with any Third Party claim of that unsuccessful defendant. 112 The gravamen of the submissions now put for Gilbey Burgess can be stated by citing paragraphs 23 and 24 of its Part 51A rule 2A Statement: "23. Gilbey Burgess submits that in so doing, the learned magistrate made a clear error of legal principle. The learned magistrate found that the decisions in Johnson and Swisstex were distinguishable. Her reasoning was that, ultimately, Golden Mile did join all the parties as defendants, and that she was really hearing Golden Mile's claims against the defendants. 24. But it did not matter that Golden Mile ultimately also joined Gilbey Burgess as a defendant, because when Gilbey Burgess was joined as a defendant it was already in the proceedings, having been initially joined by Rickard. Rickard's claim against Gilbey Burgess was never withdrawn - to the contrary, it was pressed and submissions in support of it were made by Rickard. The allegations of negligence made by Rickard against Gilbey Burgess were in fact wider than Golden Mile's allegations of negligence against Gilbey Burgess. With the exception of the costs of filing defences to Golden Mile's claim, and the owners' and BMP's cross claims, all the costs incurred by Gilbey Burgess were occasioned by its joinder to the proceedings by Rickard." 113 Johnson v Ribbins (1977) 1 All ER 806, and Swisstex Finance Pty Ltd v Lamb (1993) 2 Qd R 463, the two cases cited in paragraph 23 of the Part 51A Statement, are in my opinion distinguishable upon their facts from the present case. Neither of those cases had the particular feature of the present case that is presented by the joinder by the two principal plaintiffs of each Third Party as a defendant in the principal proceedings. 114 Legg v J J Craig Ltd & anor (1954) NZLR 258, a decision of a single Judge of the New Zealand Supreme Court, to which I was referred, is closer to the present case. But even that case is not quite identical with the present one. In Legg the plaintiff sued a defendant who joined a third party; and the plaintiff subsequently joined the Third Party as a defendant. The plaintiff succeeded against the original defendant, and failed against the third party/second defendant. In those circumstances the original defendant was ordered to pay direct to the second defendant the latter's costs. The issue to be decided, however, was one governed by the principle summarised as follows at (1954) NZLR, 259: "The principle on which the Court acts in deciding whether an unsuccessful defendant should be ordered to pay the costs of a successful defendant is whether these costs have been reasonably and properly incurred as between the plaintiff and the unsuccessful defendant." 115 In the present case there is no issue of the liability of an unsuccessful defendant to pay the costs of a successful co-defendant. In the present case all of the co-defendants were successful against the particular plaintiffs. That entails, in my view, that Legg, also, is distinguishable on its facts from the present case. 116 The true issue in the present case is whether the learned Magistrate had, in effect, no justifiable way of exercising her undoubted statutory powers and discretions other than to order that Bonacci Rickard pay Gilbey Burgess the latter's costs attributable to the third party proceedings brought by the former against the latter; and then to order that Bonacci Rickard be entitled to recover those costs from Golden Mile in addition to any other costs recoverable by Bonacci Rickard from Golden Mile. 117 The case which was put on that issue by Gilbey Burgess was a very black-and-white affair. Costs, it was put, should normally follow the event. The relevant "event", it was put, was the failure of Bonacci Rickard's Third Party proceedings against Gilbey Burgess. There was therefore, so it was submitted, really nothing about which to argue. The normal order should have been made in favour of Gilbey Burgess against Bonacci Rickard; and it was a simple, manifest and incontrovertible error on the part of the learned Magistrate to have made any other order respecting those Third Party proceedings. 118 The first thing to be said about those submissions is that it is not at all clear to me, from a reading of T 23 and following, quite what other order the learned Magistrate is said to have made in respect of any of the multiple Third Party pleadings. It seems clear from T 23 (41) that the learned Magistrate thought that the appropriate order was that there be no specific order as to any of the costs of any of the third party proceedings. I see no warrant for treating what was in fact ordered as having been intended to achieve any different outcome respecting the various Third Party proceedings. 119 The issue now to be decided reduces, therefore, to this issue: is there some clear and reasonable basis for thinking that the statutory powers and discretions as to costs which the learned Magistrate undoubtedly had, miscarried, thereby causing such a potential injustice as would justify a grant of leave to appeal? 120 Part 31A rule 5 of the Rules made pursuant to the Civil Claims Act provides that costs must be ordered so as to follow the relevant event, "except where it appears to the Court that some other order should be made as to the whole or any part of the costs". 121 In determining how most fairly to define the relevant "event", it is in my opinion necessary to take an approach that is fair in a sensible and practical way having regard to how the particular hearing has actually been conducted. My impression from what I have read in connection with the present application is that what really happened at the particular Local Court hearing was that all of the then defendants in the principal proceedings concentrated upon defeating comprehensively the concurrent claims of the two plaintiffs in those principal proceedings. No doubt the various counsel representing the various defendants tried to keep open some useful Third Party recourse should the plaintiffs succeed against some one or more of their respective clients; but I infer, in particular, from the learned Magistrate's repeated references to the topic, that the real focus throughout the hearing was upon the plaintiffs' concurrent claims. I think that such an inference is strengthened by the seeming absence of any application for, or any discussion about the need to have, formal orders disposing of the various Third Party proceedings. The learned Magistrate referred repeatedly to there being no practical way of disentangling the evidence at the hearing into evidence wholly or almost wholly referable to the principal claims; and evidence wholly or almost wholly referable to the multiple Third Party proceedings. 122 In all of those circumstances, I do not see that the learned Magistrate dealt with the question of costs in a way that falls in any way foul of the guidance given by the High Court of Australia in House v The King (1936) 55 CLR 499, especially per Dixon, Evatt and McTiernan JJ at 504, 505. 123 It is, I apprehend, a perception that Golden Mile cannot meet any costs order made against it that has fuelled the attempts to fix Bonacci Rickard with Gilbey Burgess' costs of the particular Third Party proceedings. Such impecuniosity would be, certainly, a factor relevant to be considered in the exercise of the relevant discretion. 124 The learned Magistrate took the view that she was in no position to adjudicate the proposition that the impecuniosity of Golden Mile made it just to fix Bonacci Rickard with Gilbey Burgess' Third Party costs. In my opinion it was open to the learned Magistrate to take that position, given the exiguous evidence available on the point. 125 There is, I apprehend, a further practical consideration. If the present argument of Gilbey Burgess be accepted, then:

At a glance

Court

Decision date

Before

Source

Judgment (17 paragraphs)

Legislation Cited (3)

Cases Cited (10)