Hills Side Excavations Pty Ltd v Residential Lifestyles Pty Ltd

Supreme Court Appeal

1. The orders sought by Hills Side in this Court are reproduced at [1] above.
2. Rather than setting out grounds for the appeal, the Summons noted the following errors in the judgment below: "… 3. Her Honour Magistrate Robinson erred in finding that there was no contract between the plaintiff and the defendant. 4. Her Honour Magistrate Robinson erred in finding that the issue of price and pricing structure was not discussed and agreed between the applicant and the respondent. 5. Her Honour Magistrate Robinson erred in finding that there was not a quantum meruit claim open to the applicant. 6. Her Honour Magistrate Robinson provided insufficient reasons for [her] decision and by doing so erred in relation to finding against the applicant as to the quantum meruit claim. 7. Her Honour Magistrate Robinson erred in applying the principle from the authority of Elmomax Pty Ltd v Russell Kennedy (a firm) [2009] VSC 615 in relation to the issue of principal and agent. 8. Her Honour Magistrate Robinson erred in the calculus of an offset in circumstances where there was a paucity of evidence."

Issues in the Supreme Court

1. Hills Side accepts that its Summons was filed considerably out of time and it requires leave of this Court to extend that time.
2. Hills Side also accepts that the questions which it seeks to agitate with respect to the decision of Robinson LCM are mixed questions of fact and law and that, accordingly, it needs leave under s 40 to appeal against those findings.
3. As noted above, this matter came before me in order to resolve the issue as to whether leave ought be granted to extend time. This issue was the subject of considerable evidence and oral and written submissions.
4. I set out now a chronology of events referrable to the grant of leave, the details of which are obtained from the evidence put before the Court. DATE EVENT October 2016 Earthmoving works, the subject of the claim, carried out. 8 November 2018 Hills Side commenced proceedings in the Local Court at Blacktown. 11 April 2019 Hills Side filed an Amended Statement of Claim in the Local Court. 29 April 2019 Residential filed an Amended Defence in the Local Court. 25 November 2019 Matter heard in the Local Court at Blacktown. 5 February 2020 Solicitor for Residential applied for a copy of the transcript. 26 February 2020 Solicitor for Residential received a copy of the transcript from the Local Court at Blacktown. 20 March 2020 Residential filed its written submissions, which contained extensive references to the transcript of the oral evidence, in addition to other evidence. 14 April 2020 Magistrate Robinson delivered a written judgment to the parties. The judgment included references to pages in the transcript. 1 May 2020 Hills Side instructed their current solicitor, Mr Emanual Refenes, "… to look into appealing the decision". Mr Refenes said he would need to obtain "… the paperwork including the decision and the transcript from the hearing". 11 May 2020 Hills Side provided their solicitor with a copy of the judgment. Hills Side's solicitor conferenced with Hills Side and identified the relevant date for filing an appeal or seeking leave to appeal, indicating that without the transcript he could not express an opinion as to any basis for the appeal. 12 May 2020 Date by which a summons commencing an appeal must have been filed: Uniform Civil Procedure Rules 2005 ("UCPR") r 50.12. 13 May 2020 Hills Side's solicitor forwarded a copy of the Local Court's judgment to counsel for Hills Side. 18 June 2020 Hills Side provided to its solicitor a copy of the transcript of the Local Court proceedings. Hills Side's solicitor forwarded a copy of the transcript to counsel for Hills Side. June - September 2020 Hills Side's solicitor engaged in "unrelated matters" with the result that he "[was] delayed in progressing this matter on behalf of the applicant". 12 October 2020 Hills Side filed the Summons seeking, among other orders, leave to appeal in the Court of Appeal of the Supreme Court of New South Wales. 4 November 2020 The Supreme Court Registrar ordered Hills Side to file any evidence on the issue of extension of time to file an appeal by 17 November 2020. Hills Side did not comply with the order. 4 December 2020 The Supreme Court Registrar transferred the proceedings from the Court of Appeal to the Common Law Division of the Supreme Court. 11 March 2021 The Supreme Court Registrar listed the matter for hearing before the duty judge on 26 April 2021 on the issue of extension of time.

Relevant Legal Principles

1. It is undoubted that this Court has the power to extend time within which a Summons Seeking Leave to Appeal is to be filed: UCPR r 50.12(1)(c).
2. In exercising the discretionary power given to the Court by that rule, the Court is obliged to give effect to the provisions of s 56 of the Civil Procedure Act 2005 and other relevant provisions contained in Div 1 of Pt 6 of that Act.
3. In Jaycar Pty Limited v Lombardo [2011] NSWCA 284, the Court of Appeal considered the issue of whether to grant leave to appeal to that Court against a judgment of the District Court in respect of a claim involving the sum of $46,400. Because of the value of the sum in dispute, leave to appeal to the Court of Appeal was required. In considering that aspect of the appeal, Campbell JA said this: "[46] In Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69 (followed in Zelden v Sewell Henamast Pty Limited [2011] NSWCA 56 at [22]), Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole J relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute. Kirby P recognised that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond what [is] merely arguable. [47] The present case involves no question of principle that is subject to any doubt, and no issue of general public importance. The dispute has already consumed significant time, and no doubt significant costs, in the court below. It is not 'reasonably clear' that the judge's conclusion about liability is wrong. The damages in question are not close to the $100,000 cut off point below which leave is needed. …"
4. His Honour expressed the view that it was not appropriate to grant leave to appeal.
5. Rothman J in Saito v Ngo [2021] NSWSC 49 said this in respect of an appeal from the Local Court to this Court: "[36] Nevertheless, in this State and most other jurisdictions, there is a right of appeal to the Supreme Court but 'only on a question of law'. None of the grounds raised in this appeal are confined to a question of law. [37] Over and above the right of appeal, there is a capacity on a party adversely affected by or dissatisfied with a judgment or order of the Local Court to appeal on a ground that involves a question of mixed law and fact but, in those circumstances, the appeal to the Supreme Court is 'only by leave of the Supreme Court'. [38] The determination by the Court to grant leave is not automatic. In a case such as this, which involves a relatively small claim, it is important that there be early finality in determining the litigation and an end to the costs of litigation involving small amounts. Otherwise the costs of litigation will, even more than is usually the case, swamp the money sum involved. [39] Ordinarily, it is appropriate to grant leave to appeal only concerning matters that involve an issue of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond that which is merely arguable. [40] The appeal and the application for leave to appeal with which the Court is currently dealing seeks to reagitate the questions of fact that were determined by the learned Magistrate; do not raise any issues of public importance; do not raise any issues of public interest or principles; and do not raise any ground of appeal which would allow the Court, as presently constituted, to interfere with the findings of fact below or any exercise of discretion associated therewith."
6. There have been a number of High Court decisions dealing with questions of extension of time. Of particular relevance here is the decision of the High Court in Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27. At [66], Justice Kirby said: "66. … 7. In Esther Investments [(1989) 2 WAR 196 at 198], the Full Court of the Supreme Court of Western Australia embraced, as relevant to applications for an extension of time, the four 'major factors' which had been identified in Palata Investments Ltd v Burt & Sinfield Ltd [[1985] 1 WLR 942 at 946; [1985] All ER 517 at 520], viz, the length of the delay, the reasons for the delay, whether there is an arguable case and the extent of any prejudice to the respondent. It was those principles which the Full Court applied in the present case. I would point out that Palata Investments was concerned with an application for an extension of time for appealing, not for extending the period within which an appeal, already lodged within time, might be entered for hearing. The distinction is important. In the latter case, the scope for review of the merits is necessarily more limited. The main object of the scrutiny is to obviate a hearing which would clearly be futile or to reinforce a preliminary view that a time default should be cured because of the apparent merits or arguability of the matter. I do not doubt that the four considerations mentioned in Esther Investments are relevant. But they are by no means exhaustive. Several others have from time to time been thought relevant. These include whether the delay was intentional or contumelious; or merely the result of a bona fide mistake or blunder; and whether the delay is that of the litigant or of its lawyers, with which the litigant should not be saddled. It may also be relevant, where the default is that of a party's legal representatives, to take into account any considerations personal to the party which might have affected its ability to safeguard its own interests, for example, by applying pressure to its lawyers. Similarly, the extent to which any such prejudice may be remedied by an appropriate costs order is another consideration that has sometimes been treated as relevant." (some citations omitted)

Plaintiff's Submissions

1. Hills Side submits that the Court, in granting an extension of time to file the Summons Seeking Leave to Appeal, would consider the nature of the litigation, the conduct of the parties, and the consequences of the Court either granting the extension of time or not. It submits that the discretion to extend time is given for the purpose of enabling the Court to do justice between the parties: Gallo v Dawson (1990) 93 ALR 479 at 480; [1990] HCA 30.
2. Hills Side submits that the only prejudice occasioned to Residential is one of time if the Court granted leave to extend the time to lodge the Summons Seeking Leave to Appeal.
3. Hills Side submits that it is relevant for the Court to consider the merits of the appeal in respect to the application to extend time. It submits that it has an arguable appeal on the grounds which are articulated in its written submissions.
4. Hills Side accepts that there are no issues of public importance that arise.
5. In its written submissions, Hills Side submitted that the starting point for the Court in considering whether to extend the time for appeal was to consider whether or not a grant of leave to appeal would be made. It then made submissions in writing arguing that leave to appeal ought be granted.
6. Putting it in summary, Hills Side contended that the evidence before the Court provided an adequate explanation for the delay in filing the Summons Seeking Leave to Appeal and leave to extend time within which to lodge that Summons; that Hills Side had a reasonably arguable case on the application for leave to appeal; and that it was in the interests of justice for time to be extended.

Residential's Submissions

1. Counsel for Residential expressly conceded, for the purposes of the application dealing with the extension of time, that the grounds being pressed on the application for leave to appeal were arguable.
2. Residential submits, having regard to the length of the delay, here about six months, prior to the Summons Seeking Leave to Appeal being filed, the absence of any satisfactory reason for the delay, and the general principles relating to the finality of litigation, that although there may be an arguable case for leave to appeal, the Court should not extend time. In so doing, it points to the small amount of money involved, namely: on the Local Court's assessment, a sum a little under $1,000; or else, at the maximum, $18,000 - which is the totality of the claim by Hills Side.
3. In oral submissions, Residential examined the particular features of the delay and the absence of any explanation for it.
4. As well, Residential drew attention to the fact that, even after Hills Side commenced proceedings in this Court, Hills Side failed to comply with a variety of the Court's orders with respect to providing answers to requisitions, filing affidavits and other documents on time, and failed to file them otherwise within a reasonable time.
5. Residential points to the fact that Hills Side has not proffered any explanation at all for its delay in this Court.
6. Both in writing and orally, Residential sought to examine claims made by Hills Side in the Local Court which, it submitted, were obviously erroneous and unsustainable claims. In oral submissions, Residential's solicitor submitted in respect of these claims (which were not found in favour of the plaintiff below and were not the subject of any summons to appeal) that this Court ought hold the conduct of Hills Side in making those claims as "… certainly unbecoming of a litigant to make claims not only exaggerated but [also] simply wrong".
7. It seemed, ultimately, that Residential was submitting that this Court on this application should conclude that those claims, which were obviously wrong, affected the real amount in dispute between the parties which this Court would be being asked to consider if time was extended.
8. In circumstances where the claims are not being pressed and there is no ground of appeal being pressed which directs attention to any error in the Magistrate's contingent assessment of damages in the event that a quantum meruit was found, and in the absence of all of the material from the Local Court being put before this Court on this application, Residential was not able to identify any connection between the conduct of the claim in the Local Court and in the considerations relevant to an extension of time.

Discernment

1. The substance of the Summons Seeking Leave to Appeal is that Hills Side challenges the findings of the Magistrate that: there was not a concluded and enforceable agreement; and, further, if there was no such agreement, Hills Side was not entitled to claim payment for work on a quantum meruit basis. The Magistrate, as was entirely appropriate, addressed the value of the quantum meruit claim in her judgment. She noted that Hills Side claimed a total of $16,139.97.
2. In that contingent damages evaluation, the Magistrate concluded that prior to dealing with a set-off, the maximum allowable value of the work to which the plaintiff would be entitled was $3,841.97. Her Honour allowed a cost of $2,970 to be deducted from that amount being costs of rectification and arrived at a total benefit obtained by the owner of the land (or the defendant if a quantum meruit was found) of $871.97.
3. The contingent damages finding was not the subject of any ground of appeal. In those circumstances, if Hills Side was successful in this Court, and as Orders 4 and 5 sought in the Summons to which I have made reference above at [1] demonstrate, it was seeking that this Court, having allowed the appeal, would enter judgment in its favour.
4. Without any challenge to the contingent assessment of the Magistrate, it seems to me that if Hills Side were successful, this Court, not being a court which has the authority to make findings of fact separately and apart from those made in the Local Court (see Lesley-Swan v Owners SP 32735 [2013] NSWSC 1635 at [71]; Pearson v Jamaica Blue Pty Ltd [2019] NSWSC 1737 at [25]), would either have to remit the matter to the Local Court for further hearing or, alternatively, depending upon how the appeal might be upheld, enter judgment for the maximum sum which the Magistrate would have found by way of a quantum meruit, namely, a little under $4,000, or the net sum of $897.97.
5. In approaching this application, I will approach it on the basis that the sums in dispute, as a matter of substance in this appeal, are small sums. This is a matter relevant to the grant of an extension of time, and also relevant to whether leave to appeal may be granted.
6. The delay between the judgment being delivered and the Summons filed in this Court was in the order of six months. That delay occurred in circumstances where the transcript of the hearing in the Local Court was available at a time no later than 26 February 2020. That transcript was a necessary document to be obtained and considered if Hills Side or its solicitor was to take up the opportunity to make written submissions, which included references to the evidence, to the Magistrate before she gave her judgment. It was also a necessary document to be obtained and considered if a Summons Seeking Leave to Appeal or a Summons Commencing an Appeal was to be filed against the Magistrate's judgment. All that is known with respect to the obtaining of the transcript is that a copy was first obtained by the principal of Hills Side from its previous solicitor on 17 June 2020. The evidence does not disclose when that previous solicitor, who had appeared for Hills Side in the Local Court hearing, actually obtained the transcript.
7. Given that a copy of the transcript had been prepared (because Residential and the Magistrate both used it for the purpose of their submissions and the decision respectively), I would infer that a copy of that transcript could have been made available promptly in February 2020 upon payment of the relevant fee. There is no evidence at all as to why, between February 2020 and June 2020, a copy of the transcript was not obtained by Hills Side - particularly in the period from 1 May 2020 when Mr Refenes (Hills Side's current solicitor) informed his client that a copy of the transcript was needed to enable a determination of the proper basis for an appeal from the Magistrate's decision.
8. Further, Mr Sultana, the principal of Hills Side, gives evidence in his affidavit of 9 October 2020 that he instructed Mr Refenes to lodge an appeal on behalf of Hills Side. However, that affidavit does not disclose when those instructions were given.
9. I observe in this respect that in the affidavit of Mr Refenes, sworn 6 October 2020, paragraph 10 says: "On [insert day] October 2020, I received instructions to lodge an appeal against the decision of her Honour Magistrate Robinson."
10. When that affidavit was read, the following interchange occurred between counsel for Hills Side and the Bench: "Counsel: I hand up the affidavit of Emanuel Refenes sworn 6 October 2020 your Honour. Your Honour sees it's a three-page document with 10 pages. His Honour: Yes. What do I do about the fact that paragraph 10 is incomplete? Counsel: I don't have those instructions your Honour. I have tried to procure those instructions as to the date, but what your Honour does certainly know is that the appeal was filed on 12 October 2020. That is the highest I can put it."
11. I accept that the Summons Seeking Leave to Appeal was filed on 12 October 2020. As to when instructions were given for that to occur is a fact which is not specifically addressed by the evidence. I am not in a position to speculate when instructions may have been given. The issue of when instructions were actually given by Mr Sultana to Mr Refenes to file the Summons is relevant to the question of whether the delay was attributable only to the solicitors and not to the party itself.
12. The evidence does not suggest that there was any further conversation or other communication between Mr Refenes and Mr Sultana of Hills Side, between 11 May 2020, when Mr Refenes telephoned Mr Sultana to indicate that the final day for lodging a Summons Seeking Leave to Appeal was the following day and that it was not possible until the transcript was obtained for Mr Refenes to consider and inform Mr Sultana as to whether there was a proper basis for the appeal, and October 2020 around when the Summons was eventually filed.
13. The only explanation given with respect to the delay between 12 May 2020 (when the Summons ought to have been filed) and 12 October 2020 (when it was filed) is that contained in paragraph 9 of Mr Refenes' affidavit, which is in the following terms: "During the months June to September 2020, I [was] engaged in unrelated matters. As a result I have been delayed in progressing this matter on behalf of the applicant."
14. Equally, however, if the matter was of any significance to Hills Side, I would have expected Mr Sultana to have made contact with his solicitor either by telephone or email, enquiring about the progress of the matter, and ensuring that all proper steps were taken to have the matter commenced as soon as was possible. If Mr Refenes was, due to pressure of work, unable to attend to the matter, on the material before me there is no reason why Hills Side could not have sought the advice and assistance of the solicitor who acted in the matter before the Local Court and who had a degree of familiarity with those proceedings.
15. I accept, for the purposes of this decision, the concession that the grounds of appeal relied upon by Hills Side are arguable. However, that is not the only matter relevant to a grant of leave to appeal.
16. In considering whether to grant an extension of time for the filing of a Summons Seeking Leave to Appeal, it is appropriate for me to have regard to the prospects of Hills Side obtaining leave to appeal.
17. Accepting that there are arguable grounds of appeal, if the appeal was successful, as I have discussed above, the sums which are in issue are small. On the part of the plaintiff, assuming that leave to appeal was granted, the appeal upheld, and the matter returned to the Local Court, the claim is in the order of $18,000. On the other hand, even assuming that leave was granted, the Court (in the absence of any challenge to the quantification contingently made by the Magistrate) is confronted with whether it would be appropriate to grant leave on a claim which, if leave was granted and the appeal upheld, would justify entry of judgment in a maximum sum of about $4,000, and more likely a sum in the order of $900.
18. Put differently, assuming leave was granted, the sum in issue would be somewhere between $900, $4,000 and $18,000.
19. Accepting that there are reasonable grounds for appeal, a grant of leave to appeal is by no means certain. That is because Hills Side accepts there is no question of general principle to be referred to in the proceedings, rather the questions involve at best mixed questions of fact and law, and the sums of money involved are quite small.
20. In the absence of any matter of general principle, then I conclude that there is no substantial merit in the application for leave to appeal having regard to the monetary sum involved.
21. In that respect, I draw attention to the remarks of Rothman J in Saito at [38], that there is an importance to a finality in the determination of litigation and putting an end to the costs of litigation which only involves small amounts of money.
22. In my view, there is prejudice to Residential, contrary to the submissions of counsel for Hills Side. Hills Side submitted that the only prejudice was one of time. In my view, that is not correct. Residential is prejudiced by a pending claim against it, in circumstances where its principal, Mr Stacey, was personally involved in the negotiations and the events surrounding the work being carried out in 2016 and was the principal witness whose evidence as to what occurred was accepted by the Local Court. Residential and its principal, Mr Stacey, are confronted by the continuation of the litigation, in addition to any extended time occasioned by an appeal to this Court, and an ongoing challenge to the credibility of Mr Stacey as a witness and the reliability of his evidence.
23. I accept that in considering whether or not to extend time, this Court is making a determination which may result in an adverse conclusion to Hills Side's ability to challenge the judgment of the Local Court.
24. I readily accept that any decision which I make must have regard to the interests of justice. However, the interests of justice are those of both of the parties concerned and not just one and, as the authorities show, there is an interest of justice in the finality of litigation.
25. If a party seeks an indulgence to extend time within which the commence proceedings by filing a Summons Seeking Leave to Appeal against a Local Court judgment in circumstances where the sums are relatively small then, at the very least, it must give an adequate explanation of sufficient substance which justifies the delay to persuade the Court that it should exercise its discretion.
26. Here, there is no explanation of any sort given as to the delay which would explain, let alone justify, that delay. On the one part, Hills Side chose not to instruct the solicitor familiar with the matter who had conducted the litigation but to instruct a new solicitor to consider whether there was any basis for an appeal. Of course, Hills Side was free so to do. But, by changing to a solicitor who had no previous knowledge of the matter, it was imperative that Hills Side take all steps promptly to put that solicitor in possession of all of the relevant documents to obtain advice on an appeal against the judgment. The evidence does not suggest that this occurred in any way.
27. The evidence of Mr Sultana on behalf of Hills Side does not suggest that he regarded the matter as at all urgent, nor that he took steps as quickly as he could to obtain the relevant documentation and give appropriate instructions. Nor is there any explanation why he did not, at any time, follow up with his current solicitor the progress of the matter.
28. Equally, whilst the current solicitor explains that he was attending to other matters in the requisite period, that does not explain any inattention to this matter. If the fact was that he was quite unable to attend to this matter in the period of time between 1 May (when he was first contacted) and then after 17 June (when he obtained the transcript), then his obligation was to let his client know that and to seek to have other practitioners address the issue. There is no evidence that he did so. Nor is there any evidence that the solicitor's engagement with other matters was so extensive that he had no time to address this matter.
29. This is not a matter, as it seems to me, where any adequate explanation has been given. It is not a matter in which the client, Hills Side, is being deprived of a right because only of the conduct of its solicitor which thereby causes prejudice to it.
30. On the contrary, there has been a failure by both Hills Side and its principal, Mr Sultana, and its solicitor, to take any requisite steps to ensure that the proceedings were commenced as soon as was possible after the judgment was delivered and certainly, once time had expired to commence proceedings, in as short a time as was reasonably possible after that point in time.
31. In my view, the inexorable conclusion of all of the factors discussed is the refusal of the order seeking an extension of time for the filing of a Summons Seeking Leave to Appeal.
32. The Summons must be dismissed.

Orders

1. I make the following orders: 1. Summons filed 12 October 2020 be dismissed. 2. Plaintiff pay the defendant's costs.

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: 24 June 2022