K & J Vision Pty Ltd v Jows Construction Pty Ltd

Consideration

As the Appeal Panel has already stated, it was common ground that, as the decision under appeal was an interlocutory decision, the Homeowner required the leave of the Appeal Panel to bring an appeal to the Tribunal's determination to dismiss the Homeowner's Application. The principles applicable to the grant of leave to appeal in respect of an interlocutory decision were considered by the Appeal Panel in Champion Homes v Guirgis [2018] NSWCATAP 54 at [31]-[35]. The Appeal Panel stated at [34]-[35]: 34.… there is no specification in the NCAT Act as to the circumstances in which leave should be granted in respect of interlocutory decisions. Rather, there is a discretion to be exercised and general principles apply to the grant of leave to appeal such decisions. 35. As stated in various decisions of the Tribunal and its predecessor, the Administrative Decisions Tribunal, the principles to be applied are to be derived from the principles applicable to leave applications in courts: see for instance, Johnston v Department of Education and Training (GD) [2007] NSWADTAP 6 and BHM v BHN & Ors [2014] NSWCATAP 26. These principles include the following: 1. It is unnecessary and unwise to lay down rigid rules of practice or exhaustive criteria governing the grant of leave to appeal: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 175; [1981] HCA 39; 2. However, the requirement for leave is a filter restricting access to the appeal process: Coulter v R (1988) 164 CLR 350; [1988] HCA 3 at 359 per Deane and Gaudron JJ; 3. Leave should only be granted where there are substantial reasons to allow an appellate review: Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] 104 FCR 564; 4. Circumstances justifying leave may be an error of principle resulting in substantial injustice: Minogue v Williams [2000] FCA 125. However, these concepts may not be cumulative; 5. There is a difference between the exercise of a discretion concerning a matter of practice and procedure and an exercise of a discretion that determines substantive rights: Adam P Brown per Aickin, Wilson and Brennan JJ at 177 citing with approval Jordan CJ in In re Will of FB Gilbert (dec) (1946) 46 SR (NSW) 318 at 323; 6. Where an interlocutory decision effectively determines the substantive rights of the parties, that may be a significant factor in favour of granting leave to appeal: Eltran Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 195 per Spender J at [14]-[15], referring to Ex parte Bucknell (1936) 56 CLR 221 at 225-6; 7. In connection with a matter of practice and procedure, restraint should be applied in reviewing such decisions, especially if an application for leave is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21], referring to Adam P Brown and in In re Will of FB Gilbert (dec); 8. Leave should not be granted unless a substantial injustice would result and the decision is attended with sufficient doubt to warrant it being reconsidered by the appeal body. What is sufficient is dependent on the particular case: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-9; 9. Lastly, subject to the above, the matters set out in Collins at [84 (1)-(2)] are also relevant to the exercise of a discretion to grant leave.
The matters set out in Collins v Urban [2014] NSWCATAP 17 at [84 (1) to (2)] were: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed,
The considerations relevant to the exercise of the power provided by s 55(1)(d) of the NCAT Act to dismiss an application for want of prosecution were addressed by the Appeal Panel in Bousgas v HD Constructions at [27]-[34] as follows: [27] The power to dismiss a proceeding for want of prosecution is found in s 55(1)(d) of the NCAT Act. This power is discretionary in its nature. [28] The principles applicable in deciding whether proceedings should be dismissed for want of prosecution were summarised by the Supreme Court of New South Wales in Hoser v Hartcher [1999] NSWSC 527. In that case, Simpson J said at [19] and following: 19. It seems to me that the following principles are relevant to the exercise of the discretion to strike out for want of prosecution. The list is not intended to be exhaustive: (1) the ultimate question is whether, on balancing the prejudice to the respective parties by making or not making an order, justice demands that the action be dismissed: Stollznow v Calvert(1980) 2 NSWLR 749 at 751 F (Court of Appeal); Razvan v Berechet , unreported Court of Appeal, 23 February 1990; Vilo v John Fairfax and Sons Ltd , unreported, 19 November 1995, per Sperling J; (2) the discretion should be exercised only in a clear case where it is manifestly warranted; Razvan, per Kirby P; as is generally the case with discretionary decisions, each case depends upon its own facts. Rigid formulae should not be applied to the exercise of the discretion: Stollznow v Calvert at 751 D; (3) any explanation offered by the plaintiff for the delay in proceeding must be considered: Burke v TCN Channel Nine Pty Ltd , unreported, 16 December 1994, per Levine J; (4) personal blamelessness on the part of a plaintiff(as distinct from any tardiness or other fault on the part of his/her/its legal representative) is relevant: Stollznow, p 73. (5) a defendant who takes no steps to secure progress in the proceedings, or to activate an apparently inactive plaintiff or who stands by in the hope that the passage of time will ensure the quiet death of the proceedings or that the longer delay will strengthen the case for striking out, runs the risk that that very behaviour will operate to his/her/its disadvantage. A defendant has two choices: to attempt to prod the plaintiff into action, or to stand by, doing nothing, trusting that time will bring about the slow death of the action. Either choice represents something of a gamble, dependent upon future events that the defendant is unable with any degree of confidence to predict. If the defendant opts for the former course, of prodding the plaintiff into action, it may succeed in doing so, precluding an application to strike out. On the other hand, if the plaintiff remains inert, the defendant's case for striking out strengthens with passing time. If the defendant chooses the latter option and takes no action, the plaintiff may take no further steps, or may take no further steps until such irremediable prejudice is caused to the defendant that the application to strike out will succeed; if, however, some other event galvanises the plaintiff into action the defendant, having done nothing to progress the matter, can hardly be heard to complain of the plaintiff's earlier inactivity: Calvert v Stollznow, 1 April 1980, Ritchie's Supreme Court Procedure, (NSW) Vol 2, para 13, 022, per Cross J (at first instance); and in the Court of Appeal per Moffitt J, p 753; Vilo, p 10; McBride v Australian Broadcasting Corporation , unreported 6 November 1998, per Levine J; Bass v TCN Channel Nine Ltd , unreported 25 July 1997, per Levine J; Hart v Herron , unreported, 3 June 1993, Court of Appeal per Priestley JA; (6) delay between the date the cause of action arose and the commencement of the proceedings may be a relevant factor: Calvert v Stollznow, per Cross J; Burke v TCN. But in my view, this circumstance must be treated with some caution. The weight that can be accorded to that delay is limited. Where an action is commenced within the period provided for by an applicable statute of limitations, it would not ordinarily be appropriate to take that period into account. However, if a plaintiff has delayed significantly in the commencement of the proceedings, and that delay is followed by further lethargy in the advancement of the proceedings, the effect of the initial (but permissible) delay is compounded. The real question is not the length of the delay, but the impact that delay has upon the defendant's capacity properly to defend the plaintiff's claim. That will be a question of fact in each case. While there may be some prejudice presumed by reason of the passage of time, much will depend upon the nature of the proceedings, and the identification of the issues involved in the litigation. Where, for example, at the close of pleadings it can be seen that there are disputed questions of fact dependent upon the oral evidence of witnesses, or their recollections, the prejudice will plainly be greater than in cases that depend essentially upon the application of legal principle to largely undisputed facts, or upon disputed questions of fact that will be resolved by reference to documentary or other objective evidence not likely to be affected by the effluxion of time; (7) the onus lies on the defendant to establish any prejudice upon which reliance is placed. The disappearance or death of witnesses, the fading of their recollections, or the destruction of records, are some obvious examples of the kind of prejudice that might arise; (8) prejudice to a defendant caused by delay has to be balanced against prejudice to a plaintiff deprived of an otherwise valid claim; delay in the commencement of proceedings by a plaintiff is sometimes taken as evidence contra-indicating prejudice to the plaintiff in the sense that he/she/it has evinced no interest in his/her/its own case: Burke, supra. Such an inference may be contra indicated by explanatory evidence; in this regard the plaintiff's personal responsibility for the delay is an important factor as is any explanation provided for the delay; (9) what the defendant has (or has not) done by way of preparation for trial may be a factor. This is a distinct question from that concerning any steps taken (or not taken) by the defendant in prompting the plaintiff to action. A defendant who has not interviewed witnesses, taken statements or collected documents, after being served with the claim, has a less meritorious complaint about the effect of prejudice caused or presumed by reason of delay: McBride v ABC , unreported, 6 November 1998, per Levine J; (10) the plaintiff's prospects of success is a relevant factor. If it appears that the prospects are minimal, the discretion is more likely to be exercised in favour of the defendant. Conversely, where the plaintiff's case is strong (absent the kind of prejudice to the defendant to which I have referred) it is less likely that justice will be done by striking the action out: Razvan, per Kirby P; (11) the exercise of the discretion to strike out should not incorporate any element of punishing a tardy plaintiff, or of excluding one who may appear to have some unworthy characteristics: Razvan, per Kirby P. The ultimate aim of a court is the attainment of justice: Queensland v J L Holdings Pty Ltd(1997) 189 CLR 146. To adapt the words of the High Court in that case, discretions such as that presently invoked ought not to be used to supplant the overall aim of the attainment of justice. [29] This decision was made before the introduction of the Civil Procedure Act, 2005 (CP Act) and s 56 of that Act which require a court to "facilitate the just, quick and cheap resolution of the real issues in the proceedings". [30] In Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27 ; (2006) 227 ALR 425 ; (2006) 80 ALJR 1100, the majority of the High Court of Australia said at [65]-[69]: 65. The "right" of the plaintiff with a common law claim to institute an action is not at large. It is subject to the operation of the whole of the applicable procedural and substantive law administered by the court, whose processes are enlivened in the particular circumstances. This includes the principles respecting abuse of process. 66. Birkett v James concerned a second action commenced in anticipation that a strike-out motion, for want of prosecution, would dispose of the first action. Lord Diplock said that in such a situation [93]: [E]xceptional cases apart, where all that the plaintiff has done has been to let the previous action go to sleep, the court in my opinion would have no power to prevent him starting a fresh action within the limitation period and proceeding with it with all proper diligence notwithstanding that his previous action had been dismissed for want of prosecution. 67. What those "exceptional cases" might include was not explored beyond the possible example given by Lord Diplock of Spring Grove Services Ltd v Deane [94], but it is apparent from other passages [95] that "contumelious disregard" by a plaintiff in observance of the more important steps in the preparation of the action for trial could enliven the exercise of the inherent power of the court. Such default was not relied on in Birkett v James [96] itself. However, it is upon this footing that the present plaintiff points to a requirement of "oppressive conduct", to its conceded absence in this case, and to consequent error in principle by the Court of Appeal. 68. The decisions in England since Birkett v James were analysed recently and in detail by the New Zealand Court of Appeal in Bank of New Zealand v Savril Contractors Ltd [97]. It is unnecessary to repeat what is there said, beyond making one point. This is that, as exemplified by the decision of the English Court of Appeal in Securum Finance Ltd v Ashton [98], the new Civil Procedure Rules have been taken in England as giving a wider scope for the use of principles of abuse of process in dealing with dilatory plaintiffs. It has been suggested that the significance of Birkett v James has been "overtaken" by the strictures of the new procedural code [99]. 69. The descriptions, rather than definitions, given in this Court and set out earlier in these reasons post-date Birkett v James and do not provide any ground for a requirement of oppressive conduct by the plaintiff. Rather, as in the circumstances of the present case, attention must be directed to the burdensome effect upon the defendants of the situation that has arisen by lapse of time. The Court of Appeal held that this was so serious that a fair trial was not possible. The result was that to permit the plaintiff's case to proceed would clearly inflict unnecessary injustice upon the defendants. [31] Subsequently, in New South Wales v Plaintiff A [2012] NSWCA 248, Basten JA said at [17]-[18]: 17. Although there is authority for the proposition that a court should be reluctant to exercise the power of summary dismissal without a hearing on the merits absent intentional and contumelious default on the part of the plaintiff, or inordinate or inexcusable delay, giving rise to a substantial risk that a fair trial would not be possible - see Birkett v James[1978] AC 297 at 318 - the stringency of that principle has been diminished by the enactment of ss 56-60 of the Civil Procedure Act. Further, a proceeding will involve an abuse of process in circumstances where the objective effect of the lapse of time since the cause of action arose is to render a fair trial impossible, despite the absence of any moral delinquency, oppressive conduct or misconduct on the part of the plaintiff: Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27 ; 226 CLR 256 at [69]-[70]. 18. Despite the fact that misconduct on the part of a plaintiff is not a precondition to a finding of abuse of process, the reasons for any delay are relevant considerations. Thus, it would be a rare case in which a defendant could complain of unfairness where the delay was in large part due to the defendant's own behaviour. By parity of reasoning, a court is likely more readily to find an abuse of process where there is culpable misconduct on the part of a plaintiff. [32] As is clear from these comments, the requirements of s 56 of the CP Act is itself a matter to be taken account of in determining whether proceedings should be dismissed for want of prosecution. [33] Similarly, s 36(1), (3) and (4) and s 38(5)(c) of the NCAT Act impose obligations on the Tribunal and the parties which must be taken account of in considering whether to make an order to dismiss proceedings for want of prosecution under s 55(1)(d) of the NCAT Act. [34] It is in the context of these principles that the decision of the Tribunal must be evaluated.
The Builder correctly submitted, as that the Tribunal's decision to dismiss the Homeowner's Application was a discretionary decision of the Tribunal, the Homeowner had to establish a House v The King error. In that case (House v The King (1936) 55 CLR 499 at 504-505) the Court said: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
The Appeal Panel has concluded that leave to appeal should be granted and that the decision to dismiss the proceedings should be set aside. The reasons for that decision are explained in what follows.
The Appeal Panel accepts that in light of the provisions of s 36 of NCAT Act, following the Appeal Panel's earlier statements on the same issues in Bousgas, it is not necessary before the discretion to dismiss for want of prosecution may be exercised that an applicant's conduct has been deliberate and contumelious. However it is in the Appeal Panel's view necessary before the power is exercised that the Tribunal must find that the conduct of the applicant was such as to constitute an abuse of process, or was such as to have caused such prejudice to a respondent that it would not be fair to permit the matter to go to trial.
As Basten JA suggested in NSW v Plaintiff A, the Tribunal may more readily dismiss an application for want of prosecution where the applicant's conduct leading to delay has been deliberate and culpable.
The Senior Member exercised his discretion in two ways, each unfavourably to the Homeowner. The first was in refusing the Homeowner's application for an adjournment to allow the Homeowner to obtain legal representation. The second was to dismiss the Homeowner's Application for want of prosecution.
The proceedings were part heard, the Builder was ready to proceed with the hearing and had expert witnesses available. The Homeowner, in the person of Mr Changizi, failed adequately to explain the reasons why it had been unable to get ready for the hearing or obtain legal representation to enable the Homeowner's case to be properly prepared. In the absence of detailed explanation of the circumstances in which the Homeowner had terminated the retainer of its former solicitors and full details of the steps taken to obtain alternative representation, the Tribunal was entitled to be sceptical of Mr Changizi's adjournment application and his failure to be prepared or obtain legal representation. In addition, the Appeal Panel considers the Senior Member was entitled to take into account the fact that the Homeowner's Application had been in the Tribunal for a long period, as indicated by the red sticker. The Senior Member weighed the relevant factors in refusing the Homeowner's adjournment application. The Appeal Panel finds no error in the Senior Member's determination at that point.
The Appeal Panel is of the view that the Senior Member's discretion in dismissing the Homeowner's Application miscarried.
To warrant the Homeowner's claim being struck out for want of prosecution it was necessary for the Tribunal to be persuaded that the Homeowner had engaged in an abuse of process or that the Builder would be unduly prejudiced if the hearing proceeded. As Simpson J held in Hoser v Hartcher (at [19(11)]) the exercise of the discretion to strike out for want of prosecution should not incorporate any element of punishing a tardy plaintiff or of excluding one who may appear to have some unworthy characteristics.
The Appeal Panel accepts the Homeowner's submission that there was no basis to conclude that the Builder would have been prejudiced if the hearing had proceeded. Indeed, given that the Homeowner's experts were not available for cross examination, and the Senior Member's correct observation that this was likely to have diminished the weight the Tribunal could afford to the Homeowner's expert evidence, or to have prevented the Homeowner from relying on it, the Tribunal could have permitted the Homeowner's Application to proceed on the day rather than summarily dismiss it without more.
In the final analysis, the Appeal Panel has concluded that the evidence before the Senior Member was not sufficient to establish that the Homeowner had engaged in the type of conduct to which Simpson J referred in Hoser v Hartcher (at [19(11)]), namely an abuse of process. The only "evidence" before the Tribunal was the statements made by Mr Changizi from the Bar table and, perhaps, what the Senior Member observed in relation to the volume of documentation which Mr Changizi had with him. In this latter respect we note that the Senior Member made no findings and did not explicitly record exactly what he observed Mr Changizi had brought with him.
The statements by Mr Changizi from the Bar table did not, in the Appeal Panel's view, amount to an admission that the Homeowner had dismissed its solicitors for inappropriate reasons, that the Homeowner was to be faulted for parting ways with its solicitors, or that Mr Changizi had "deliberately sabotaged" the hearing. Mr Changizi's explanations for the termination of the retainer of the Homeowner's solicitors were not detailed or explicit, but Mr Changizi did explain that the separation was related to other proceedings. There was no basis in that statement to found any inference that the termination had been inappropriate or brought about in order to delay the proceedings in the Tribunal.
Mr Changizi's statements from the Bar table likewise did not indicate an intent on Mr Changizi's part to sabotage the hearing, or deliberately bring about the result that the Tribunal had no option but to adjourn. Mr Changizi had clearly not been as diligent in the prosecution of the Homeowner's Application as he should have been, but he was not a legal practitioner and should not have been held to the standards expected of legal practitioners. Ultimately, the Tribunal had to consider the overall interests of justice in that context, particularly having regard to the great prejudice suffered by the Homeowner on one side when weighed against any prejudice to the Builder, and particularly where the sanction of costs was available to the Tribunal.
In the Appeal Panel's view, contrary to the conclusion set out in paragraph [24] of the Senior Member's reasons (set out above), Mr Changizi did not say "I am naked, and not ready to proceed" or words to that effect. The transcript of the hearing on 9 April 2018, which the Appeal Panel have reviewed carefully, clearly discloses that Mr Changizi stated that he was ready to proceed if required to do so.
We have concluded that the Senior Member erred in dismissing the proceedings without clearly putting the Homeowner (through its representative, Mr Changizi) to its election whether to proceed with the matter without legal representation or to have the proceedings dismissed for want of prosecution. In circumstances where the Homeowner may have been able to recommence its action, it may be that the Homeowner would have been better advised to elect to have the proceeding dismissed. Nevertheless Mr Changizi was not given that option. He explicitly stated that he was willing to proceed if required to. The consequences of the adoption of that course, that is proceeding with the hearing, may very well have been that the Homeowner's case was fatally damaged by the unavailability of its expert witnesses, but that likely consequence did not warrant the dismissal of the proceedings if Mr Changizi was prepared to proceed.
The Appeal Panel do not accept the Builder's submission, that proceeding with the hearing of the Homeowner's case was not a practical option.
Accordingly the Appeal Panel consider that the order dismissing the proceedings should be set aside and the application remitted to the Tribunal for determination.
As we conclude that the Senior Member failed to apply the correct test in determining to dismiss the proceedings for want of prosecution, it is not necessary to address the other grounds of appeal. It is sufficient for the Appeal Panel to note that it is not persuaded that the Senior Member failed to accord procedural fairness or that there was any basis upon which it could find there was apprehended bias.
The Appeal Panel tends to the view that the Senior Member's reasons did not adequately set out the findings on material questions of fact or refer to the evidence on which the findings were based. However the Appeal Panel does not reach a final conclusion on this issue.
The Appeal Panel recognises that the effective result of the order it proposes to make is that the Homeowner will have the opportunity to rely upon its expert evidence and will effectively have obtained the benefit of the adjournment it was properly refused. However, that result was, at least in part, a consequence of the Builder's decision to make an oral application for the dismissal of the Homeowner's Application and to press for dismissal. The Builder was represented by experienced Counsel who, no doubt, considered it was in the client's interest to take that course. Had the Builder declined to support or actually opposed the Tribunal's proposal to dismiss the proceedings and rather press for the hearing to proceed on the day, we have no doubt that the Tribunal would have followed that course.
The Builder indicated that it sought to be heard on the question of costs in the event that the appeal were upheld. Accordingly the Appeal Panel will make orders providing for the parties to provide written submissions in respect of costs.
Our orders will be: 1. Grant leave to appeal. 2. Allow the appeal. 3. Set aside the orders made by Senior Member G Meadows on 9 April 2019 dismissing the application. 4. Remit the application to the Consumer and Commercial Division of the Tribunal for hearing on such evidence as the Tribunal may permit. 5. Any application in respect of the costs of the appeal to be made by written submissions filed and served within 14 days of the date of publication of this decision. Such submissions should address the question whether the application for costs can be dealt with on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act. 6. If either party files submissions in accordance with order 5 above the other party may file and serve submissions in response within a further 14 days. Such submissions should address the question whether the application for costs can be dealt with on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act.

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