Maxwell-Smith v S & E Hall Pty Ltd

Judgment 1HIS HONOUR: By a Notice of Motion filed on 4 November 2013, the applicants, Inge Maxwell-Smith and Eugene Maxwell-Smith, seek referral for pro bono assistance pursuant to the Uniform Civil Procedure Rules 2005 ("UCPR"), r 7.36, in connection with their appeal against a decision of Kearns DCJ of 9 May 2013. The applicants also seek directions that they be assisted by the Court in preparing the Appeal Books and that Court fees be postponed or waived in respect of that appeal. The respondents do not oppose the application.

Background 2The proceedings arise out a contract for the building of a house on the applicants' land at Tura Beach. The first respondent, S & E Hall Pty Ltd ("Hall"), was the building contractor. The second respondent, Hugh White ("Mr White"), was the solicitor retained by Mr and Mrs Maxwell-Smith on their purchase of the Tura Beach property. Hall's alleged breaches of the building contract, and Mr White's alleged breach of his retainer and his fiduciary duties, have been the subject of protracted litigation, involving a multiplicity of applications to this Court, the Consumer Claims Tribunal, the District Court, the Federal Court, the Supreme Court and the High Court. 3The background and part of the procedural history of the case is summarised in the judgment of Jacobson J in Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825; 233 ALR 81, as follows: [13] By an agreement dated 3 August 1995, S & E Hall agreed with Mr and Mrs Maxwell-Smith to construct a residential home for them on their land at Surf Circle, Tura Beach. The agreement was not signed by Mrs Maxwell-Smith, but only by Mr Maxwell-Smith, who appears to have signed on behalf of himself and his wife as the owners of the land on which the house was to be built. [14] The building work appears to have been completed in 1996, although Mrs Maxwell-Smith contends that it was not carried out in a proper and workmanlike manner. As a result, Mr and Mrs Maxwell-Smith brought proceedings against S & E Hall in 1996 and 1997 in the Consumer Claims Tribunal concerning the construction of the house. [15] On 25 February 1998, the Consumer Claims Tribunal handed down its decision and ordered that Mr and Mrs Maxwell-Smith pay to S & E Hall the sum of $6745.55 by 1 April 1998. In its reasons for decision, the Consumer Claims Tribunal found that, subject to a number of minor exceptions, the building work had been completed in a workmanlike fashion and that all the work was properly accounted for. The Consumer Claims Tribunal made allowances against the amount claimed to cover the items of poor workmanship or incorrect accounting. [16] In 1998 Mr and Mrs Maxwell-Smith made an application for judicial review of the decision of the Consumer Claims Tribunal in the Administrative Law Division of the Supreme Court of New South Wales. The application was heard by Greg James J. On 8 December 1998, his Honour ordered that the summons be dismissed. He ordered Mr and Mrs Maxwell-Smith to pay S & E Hall's costs on an indemnity basis. [17] On 7 April 1999, the New South Wales Court of Appeal refused leave to appeal from the judgment of Greg James J. The reason why leave was refused was that Powell and Giles JJA were satisfied that there was no jurisdictional error in the decision of the Consumer Claims Tribunal. [18] Special leave to appeal to the High Court was refused by McHugh and Kirby JJ on 30 November 1999. Mr and Mrs Maxwell-Smith appeared in person on the special leave application. [19] On 15 September 2003, a registrar of the Federal Court made sequestration orders against Mr and Mrs Maxwell-Smith. The debt which gave rise to the orders was the certificate of assessment of the costs order made by the Supreme Court of New South Wales on 8 December 1999. However, on 2 July 2004 Moore J annulled the bankruptcies of Mr and Mrs Maxwell-Smith under s 153B of the Act: see Maxwell-Smith v S & E Hall; Re Maxwell-Smith [2004] FCA 840. His Honour was satisfied that the sequestration orders ought not to have been made, on the basis of an "unwitting" denial of procedural fairness before the registrar: see [20]. [20] Moore J observed (at [24]) that the annulment application was not made upon the basis that Mr and Mrs Maxwell-Smith were solvent when the orders were made. Nevertheless, his Honour recorded an acknowledgment of counsel for the trustee that "probably" Mr and Mrs Maxwell-Smith were solvent when the sequestration orders were made. His Honour also noted that counsel for S & E Hall did not dispute this proposition. [21] Moore J went on to say that there was insufficient evidence before him to make a positive finding that Mr and Mrs Maxwell-Smith were solvent. But he said that they may well be solvent, and may well have been when the sequestration orders were made: at [24]. He took this into account in the exercise of his discretion to make the annulment order. .... [25] In or about October 2004, S & E Hall garnisheed Mr and Mrs Maxwell-Smith's bank to recover an amount of $9700 which satisfied, in part, Mr and Mrs Maxwell-Smith's liability for costs in the Supreme Court proceedings. 4The appeal in respect of which the applicants seek pro bono assistance arises out of proceedings in which they sought damages from Hall and Mr White. The applicants alleged that Hall committed the tort of abuse of process by issuing bankruptcy notices against them in 2002 and 2006, for improper reasons. They alleged that Mr White breached duties he owed to them as their solicitor. The primary Judge, Kearns DCJ, found that both of the bankruptcy notices were issued for a proper purpose, and that there was no abuse of process by Hall or Mr White: Maxwell-Smith v S & E Hall Pty Ltd (District Court of New South Wales, 9 May 2013, unreported). His Honour also found that Mr White's retainer did not extend to advising on a contract with Hall. Thus the claim against him for breach of his contractual and fiduciary obligations failed.