Consideration
40 The Opponents' concern, expressed during the Tribunal hearing, that the company had no assets to meet any order appears to have been treated by the Tribunal as an application to join the Claimant personally. The Claimant accepts that that is an appropriate characterisation of that exchange. It was open to the Tribunal to entertain that application, albeit in the Claimant's absence. However cl 28 of the 2002 Regulation required that if he were joined as a party, notice of the proceedings should have been served on him. The Claimant was not served personally with notice of the proceedings prior to the orders being made.
41 The proceedings before the Tribunal and the Master on the joinder issue were clearly flawed by their failure, respectively, to appreciate that when Ms Longbottom said she represented "Peter Maconachie Pty Limited, the corporate entity only", she meant it, as a matter of both fact and law.
42 The Tribunal commented in its reasons that "[t]he Solicitor for the First Respondent did not take issue with the Tribunal's joinder of P Maconachie as Second Respondent". That may be correct as a statement of fact, but to the extent it impliedly asserts that Ms Longbottom had a right, let alone an obligation, to take up the cudgels on the Claimant's behalf when she had made it plain to the Tribunal he was not her client, demonstrates a manifest failure to appreciate the significance of her statement. The Tribunal appears to have succumbed to the legal error, also apparent in the Opponents' submissions, that because the company appeared to be the Claimant's alter ego, Ms Longbottom's appearance on the company's behalf was tantamount to an appearance for him.
43 This was a fallacy (the representation fallacy). A company is a separate legal entity from its directors. The Tribunal misdirected itself because of the representation fallacy that, through Ms Longbottom's presence, the Claimant had notice of the proceedings. That was clearly wrong.
44 The Master perpetuated the representation fallacy. He accepted Ms Longbottom's failure to object to the Claimant's joinder had the significance the Tribunal attached to her silence. He also assumed it was open to Ms Longbottom to take whatever steps she considered to be necessary to deal with the joinder question and any potential orders, but observed, critically, that she appeared "to have done nothing and allowed the joinder and order for payment of money to be made without opposition".
45 In Italiano v Carbone Mr Italiano received a document purporting to make him a party to proceedings in the Tribunal that Mr Carbone had brought against his company. He was present at the hearing. The Tribunal ordered him to pay $74,500 to Mr Carbone without making an order joining him as a party.
46 Section 48Q of the Home Building Act 1989, which was relevant for the purposes of that case, provided that:
"If, at any time before or during proceedings before it in relation to a building claim, the Tribunal is of the opinion that a person should be joined as a party to the proceedings, the Tribunal may, by notice in writing given to the person or by oral direction given during proceedings, join the person as a party to the proceedings."
47 Both Spigelman CJ and Einstein J held that the Tribunal's failure to comply with s 48Q invalidated its decision. Spigelman CJ concluded (at [9]) that he was "unable to identify anything capable of answering the statutory description in s 48Q". He said:
"11 …[P]ersons who are subject to orders of this character are entitled to at least some minimum compliance with the formalities set down by the legislative scheme. Here there was, in effect, no compliance at all.
12 The Tribunal is a body which has been granted important powers, including powers which are not limited to small disputes in which speed and economy are entitled to determinative weight. It has a jurisdiction with respect to building claims up to $500,000 and the amount awarded in this particular case is almost double the jurisdiction of the Local Court. There are real limits to the extent to which this Court should countenance the Tribunal ignoring the basic requirements for its proper functioning, as laid down by the Parliament directly, or indirectly through Regulations which are capable of being disallowed by Parliament.
13 In this case the Tribunal proceeded with a level of informality which Parliament did not intend to countenance. Indeed a level, in my opinion, that Parliament intended to lead to invalidity of any decision reached in this manner. (See Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [93].)
14 Reliance was placed on s 32(3) CTTT Act. This is in the traditional form of an irregularity provision which has been a feature of legislation creating courts since the Judicature Acts. (See e.g. Supreme Court Act 1970, s81; District Court Act 1973, s159; and see the analysis in Rust v Barnes [1980] 2 NSWLR 727 at 729-731 and Australian Coastal Shipping Commission v Curtis Cruising Pty Ltd (1989) 17 NSWLR 734 at 752-753.)
15 Section 32 of the CTTT Act appears to be directed to the Tribunal and the Tribunal only. Indeed, the concluding words of subs (3) and the introductory words of subs (4) of s 32, may suggest that the section does not bind the Supreme Court in any manner, whether on appeal or exercising its supervisory jurisdiction. Nevertheless, the effect of a provision of this character is to render non-compliance voidable rather than void as may once have been the case.
16 It is by no means clear to me that s 32(3) applies under any circumstances if s48Q were the requisite power. It does, however, apply to a failure to comply with the Regulations for a formal application to be made and, accordingly, could apply to the alternative manner in which the Respondent states its case on the issue of joinder.
17 Provisions of this character must be construed widely and generously. (See e.g. Harkness v Bell's Asbestos & Engineering Ltd [1967] 2 QB 729 at 735.) Nevertheless, the issue remains whether or not a matter which, by statute, is to be treated as an irregularity, should be avoided pursuant to the clear reservation of a discretion to do so in provisions of this character. (See generally Vickers v Mayne (Unreported, Supreme Court of Western Australia, Full Court, Kennedy, Franklyn and Walsh JJ, 17 July 1998)."
48 Einstein J concluded (at [169] - [171]) that compliance with s 48Q was mandatory and that an act done in breach of s 48Q should be invalid. He concluded that failure to comply with that requirement meant the Tribunal did not discharge its statutory function.
49 Although nothing turns on it for present purposes, it should be noted that s 32(3) of the CTTT Act, which is referred to in the judgment of the Chief Justice (at [14]-[16]), is in similar (though not identical) terms to s 81(3) of the Administrative Decisions Tribunal Act 1997. Each provision provides that certain failures to comply with the requirements of the respective Acts are to be "treated as an irregularity" and are not to "nullify" the proceedings. The effect of the provision in the Administrative Decisions Tribunal Act was given more extensive attention by the Court in Attorney-General (NSW) v World Best Holdings Ltd [2005] NSWCA 261 at [83] ff (Spigelman CJ), [156]-[178] (Mason P) and at [190]-[198] (Tobias JA). The scope of s 32(3) of the CTTT Act does not govern the outcome of the present case, because it does not override basic requirements of procedural fairness.
50 Basten JA concluded in Italiano (at [74] - [79]) that in the light of s 28 of the CTTT Act, failure to comply with s 48Q did not render the proceedings a nullity in relation to the person intended to be joined but not expressly joined in circumstances where what was not done was, or should have been, understood by those present at the Tribunal hearing and participating in its proceedings.
51 However, in his Honour's view (at [115]) failure to comply with the ss 28(2) and 35 requirement in the CTTT Act to give a party a reasonable opportunity to be heard, should be treated as invalidating the conclusion of the Tribunal.