Guss v Aldy Corporation Pty Ltd & Anor

Guss v Aldy Corporation Pty Ltd & Anor - [2008] VCAT 912 - VCAT 2008 case summary — Zoe

[53]

An interpretation of section 120 of the Act that permits a party who fails to attend or be represented at a compulsory conference, and finds the proceeding determined adversely to that party, to have a right under that section to apply for a review and re-hearing of the order making the adverse determination, is an interpretation which is comparable with the right to a fair hearing of the proceeding as a whole on its merits. "Common justice demands", in Jenkins L.J's phrase, that a party whose failure to attend or be represented is the result of "some mischance or accident", or of something for which there is a reasonable excuse, should be allowed to take advantage of the remedial provision, section 120, available to a person who has not attended or been represented at a "hearing" at which order was made. A narrow interpretation of section 120, excluding a compulsory conference from the scope of the word "hearing", so that the party in question has no recourse other than an appeal, is not an interpretation which is comparable with the right enshrined by the Charter to a fair hearing of the proceeding. An application of the Charter compels the more generous interpretation in my opinion.
Mr Shaw relied upon two decisions of the Tribunal which, he submitted, supported his argument that an order made at a compulsory conference is not an order made at a "hearing" because they decided that an order made by a mediator was not an order made at a "hearing." He very properly referred me to a third decision of the Tribunal which, on the contrary, decided that an order made at a compulsory conference was an order made at a "hearing".
The first decision was that of the President, Justice Morris: Raspa v City of Port Phillip and Kyrkilis [2004] VCAT 1863, decided on 16 September 2004. A proceeding in the Planning and Environment List was referred to mediation. The mediator was a Tribunal member. The second respondent, who was an objector to an application for a permit, did not attend the mediation. In fact the objector had never been sent a notice to attend the mediation, although the Member was apparently unaware of that fact. In purported exercise of a power under section 78 of the Act, the Member made an order striking out the second respondent as a party. Section 78 provides that if the Tribunal believes that a party to a proceeding is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding by conduct such as failing to attend a mediation (amongst other examples) the Tribunal may (amongst other things) order that the party causing the disadvantage be struck out of the proceeding. The Member then proceeded to make an order under section 93 of the Act giving effect to a settlement achieved by the other parties. Apparently those orders were made on the very day of the mediation even though no hearing of any application for an order under section 78 had been listed or notified to the parties.
The second respondent applied under section 120 for an review of the order. The President, hearing the application, made an order the effect of which was to set aside the Member's order. In doing so, however, his Honour emphasised that he was not exercising a power conferred by section 120 because he considered that that section was not available in the context of an order made following a mediation. Instead his Honour relied upon sections in the Act relating to declarations and injunctions. On the subject of section 120 his Honour stated:

[55]

For two reasons I consider that Raspa is not authority for the proposition that an order made at a compulsory conference is not an order made at a "hearing".
First, Raspa is distinguishable from the present case. It dealt with an order made following a mediation, in purported exercise of a power conferred by section 78. I have referred earlier to points of difference between a compulsory conference and a mediation. For a mediation the Act does not contain any counterpart to section 87, which expressly authorises the presiding Member at a compulsory conference, then and there, to determine the proceeding adversely to an absent party "and make appropriate orders" or to direct that the absent party be struck out of the proceeding. There is no need for the presiding Member to call section 78 in aid. I pass over the question of whether a Member who exercises the judicial function of making an order under section 78, as distinct from performing a mediator's function, automatically sets in train a "hearing." My point is that what a presiding Member at a compulsory conference is empowered to do when a party does not attend is something that a mediator, acting as such, is not empowered to do.
Secondly, Raspa was decided before the Charter was enacted and came into operation. For reasons I have given above, the Charter probably requires a different view of section 120 than was expressed in Raspa and I venture to suggest that his Honour might have expressed that different view if the Charter had been in operation at the time he decided the case.
Nor is Raspa authority for the existence of an inherent jurisdiction in the Tribunal to set aside an order made by default. His Honour did not claim to exercise any inherent jurisdiction. Rather, his Honour relied on the Tribunal's declaratory and injunctive powers, to declare the Member's order invalid and to restrain the responsible authority, the first respondent, from acting upon the order. With respect, I observe that his Honour did not explain how one Member (for his Honour was hearing the matter in that capacity) has power to declare another Member's order invalid or to restrain a party from acting upon another Member's order. The only explicit power in the Act to set aside a Member's order is the power conferred by section 120 when the circumstances described in that section exist.
The second decision relied upon by Mr Shaw was that of Deputy President Gibson: Appleby v Drakulic v Moonee Valley City Council and Tan [2007] VCAT 1662, decided on 19 September 2007. Again, a proceeding in the Planning and Environment List was referred to mediation. Again, the mediator was a Tribunal member. Again a party failed to attend. This time it was the applicant for a permit, who was the second respondent in the proceeding commenced by objectors as applicants in the proceeding. Again, the mediator, a Senior Member, purported to exercise the power conferred by section 78. The Senior Member determined the proceeding adversely to the second respondent and in favour of the applicant objectors by setting aside the responsible authority's decision to grant a permit. Again, there was no explanation of how a Member acting as mediator was exercising a power conferred by section 78 immediately following a mediation and without a separate hearing having been listed and notified to the parties. Again, the absent party, the second respondent, applied under section 120 for a review of the order.
The Deputy President dismissed the application for review. She gave several reasons. First, the second respondent did not attend the hearing of the application for review. Secondly, she was not satisfied on the material filed by the second respondent that he had had a reasonable excuse for not attending the mediation. Thirdly, for the reasons given by Justice Morris in Raspa, section 120 was not available to the second respondent.
Either of the first two reasons was sufficient to dispose of the matter. The third reason was not essential to the Deputy President's decision. Even if it had been essential, the case is distinguishable from the present case for the same reason as Raspa is distinguishable. Again the decision pre-dated the Charter. For those reasons I consider that the case does not support Mr Shaw's argument.
The third decision, which is against Mr Shaw's argument, was that of Deputy President Aird: Matan Properties Pty Ltd v Waterson [2007] VCAT 2435, decided on 17 December 2007. At a compulsory conference in a proceeding in the Domestic Building List, the respondents failed to attend. The presiding Senior Member exercised the power conferred by section 87 and determined the proceeding in favour of the applicant. The respondents made an application under section 120 for a review of the order.

[63]

In the annexures to her statutory declaration the applicant deposed that she had thought that the compulsory conference had been adjourned to 23 November 2007 and that her non-attendance on 22 November 2007 was the result of a mistake. In her affidavit she deposed that she had diarised the compulsory conference as being for 23 November 2007. Neither in her statutory declaration nor in her affidavit did she explain how the mistake was made. She had attended the compulsory conference on 3 September 2007 when, no doubt, the presiding Senior Member orally pronounced the order adjourning it to 22 November 2007 at 9.30am. She has not said that she did not receive a copy of the order. She has not said that she did not receive a notice from the registry of the date and time for the adjourned compulsory conference; she has said merely that she did not specifically recall receiving the notice. She deposed that both her husband and her Counsel also believed the adjourned date to have been 23 November 2007 and had diarised that date, although whether they believed that because she told them so, or vice versa, did not appear from the material.
All of that was not particularly satisfactory, and again Mr Shaw in his written submission justifiably made criticisms of its adequacy. I had no reason to doubt, however, that somehow a mistake was made about the date and that the non-attendance was not deliberate but was the result of the mistake. As the applicant did not assert that the mistake was somebody else's fault, I had to conclude that the mistake was her own fault, and that although she ought to have been aware of the right date she negligently noted the wrong date.
The applicant did not act reasonably, but section 120 does not require that an applicant for review has acted reasonably. It requires that the applicant for review has had a reasonable excuse for not having attended or having been represented. The futility of attempting to specify what is a reasonable excuse is obvious. What is a reasonable excuse will depend upon the circumstances of the case. The same reasons for giving a beneficent, liberal construction to the word "hearing" in section 120 apply for giving a beneficent, liberal construction to the phrase "a reasonable excuse" in the same section. I consider that generally a proferred excuse ought to be accepted as reasonable unless it is incredible or unless there is something about it which indicates bad faith. A deliberate failure to attend may (but need not necessarily) demonstrate bad faith. Negligence is not bad faith. It is inherently unlikely that an applicant in a proceeding will deliberately fail to attend a hearing or a compulsory conference in the proceeding. I have accepted that there was no deliberation in the present case. The applicant acted negligently, but I have accepted that she had intended to attend the adjourned compulsory conference and would have attended it had she not mistaken the date. Her excuse was reasonable.

[64]

In the affidavit material filed by the respondent and by the interested party, and in the written submission of Mr Shaw, there was emphasis upon the history of the proceeding and the numerous instances of the applicant's non-compliance with procedural directions. Despite that emphasis, it was not made clear how that history was said to bear upon the discretion that the Tribunal has to refuse an application for review under section 120 even when a reasonable excuse for non-attendance at a hearing has been given. I have already said that the history is deplorable. If the history had included previous omissions to attend or be represented at a hearing, the history would have been directly relevant to a determination of an application for review after a non-attendance, although the relevance would probably have been to the issue of whether a reasonable excuse for the latest non-attendance had been made out rather than to wider discretionary considerations.
I think that the most that could be said for the relevance of a history of other kinds of procedural defaults is that it tended to indicate a want of seriousness. An applicant who appears not to be serious about pursuing a proceeding might be thought to be less entitled to the exercise of a discretion in that applicant's favour than the applicant who had been diligently pursuing an apparently genuine claim.
The strength or weakness of the applicant's case in the proceeding generally is a relevant discretionary consideration, notwithstanding the difficulty in assessing strength or weakness of the case when dealing with an interlocutory application. There was no submission that the applicant's case was so weak that the discretion should be exercised in favour of refusing the application for review so that the other parties should not be put to the trouble of defending a weak case. So I have had no occasion to form any impression of how strong or weak the applicant's case is. She has filed witness statements. In volume they are substantial. Whether they have weight, as distinct from volume, remains to be seen. Although they have been filed tardily, their filing tends against a conclusion that the applicant is not serious about pursuing this proceeding.
A common reason for a court's refusal to set aside a default judgment is the prejudice that has been proved would occur to the party in whose favour the judgment has been given, or to strangers, who have acted upon the faith of that judgment, if the judgment were to be set aside. Similarly, evidence of such prejudice would be a very relevant discretionary consideration upon the hearing of an application for review under section 120. There is no evidence of prejudice in this case. It is true that at the same time as the order was made dismissing this proceeding an order was made striking out a related proceeding no. C4714/2005, in which Aldy Corporation Pty Ltd (the respondent in this proceeding) claimed indemnity from Ms Howard (the interested party in this proceeding) in relation to any monetary order made in favour of the applicant in this proceeding. That proceeding, however, may be reinstated. Prejudice in the form of costs wasted at the compulsory conference can be compensated for by an order for costs against the applicant. I made such an order for costs.
There was no good reason for exercising a discretion against the granting of the application for review and thus shutting out the applicant from exercising her prima facie right to have her case heard and determined on its merits. Accordingly I granted the application for review and made the orders on 1 April 2008 which have been set out in the authenticated order.

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Judgment (64 paragraphs)

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Cases Cited (4)

Guss v Aldy Corporation Pty Ltd & Anor (Civil Claims) [2008] VCAT 912 (1 May 2008)