Woodcrest Homes Pty Ltd v Fair Trading Tribunal & Ors

Woodcrest Homes Pty Ltd (Plaintiff) PARTIES : Fair Trading Tribunal (1st Defendant) Tavaceen Pty Limited (2nd Defendant) JUDGMENT OF : Bell J at 1

COUNSEL : V. Stefano (Plaintiff) P. Merity (Sol) (2nd Defendant) SOLICITORS : Williams & Co (Solicitors) (Plaintiff) Peter Merity, Solicitor (Defendant) DECISION : Extend the time within which to institute this appeal pursuant to Pt 51A r (3)(3) of the SCR; Affirm the orders made by the Tribunal in each of proceedings BU 2000/2762 and BU 2000/6761 on 6 August 2001; Dismiss the plaintiff's summons; The plaintiff is to pay the defendant's costs as agreed or assessed

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

13084/01 Woodcrest Homes Pty Limited v Fair Trading Tribunal (1st Defendant) and Taveceen Pty Limited (2nd Defendant)

JUDGMENT 1 BELL J: By summons filed on 2 October 2001 the plaintiff appeals from the whole of the decisions of Mr Patrick Griffin, a member of the Fair Trading Tribunal ("the Tribunal"), made on 21 February 2001 and 6 August 2001. 2 The appeal is brought pursuant to s 61(1) of the Fair Trading Tribunal Act 1998 ("the FTT Act") which, relevantly, provides that a party to proceedings before the Tribunal may appeal to this Court on a question of law against any decision of the Tribunal in the proceedings. The orders that this Court on appeal may make include an order affirming or setting aside the decision of the Tribunal. 3 The appeal was not commenced within time. The plaintiff seeks an extension of time in which to bring its appeal pursuant to Part 51A rule 3 of the Supreme Court Rules 1970 (the "SCR"). The grant of an extension of time was not opposed. I propose to grant the extension sought. 4 The plaintiff ("Woodcrest") filed an application in the Tribunal's Building Division on 24 June 2000 seeking an order that the second defendant, Taveceen Pty Limited ("Taveceen"), pay to it the sum of $284,650.91 said to be owing under a building agreement entered into between the two in December 1998. 5 In August 2000 Taveceen made application to the Tribunal that Woodcrest provide security for costs. 6 Taveceen's application for security for costs was heard on 11 October 2000. On 21 February 2001 the Tribunal ordered that Woodcrest provide security for costs in the proceedings in the sum of $25,000 by 5:00 pm on Friday 23 March 2001. 7 On 20 March 2001 an application was filed pursuant to s 63 of the FTT Act for an order directing that the Tribunal rehear the matter. That application was successful and a rehearing was conducted before Mr Griffin on 9 July 2001. The rehearing was expressed to be limited to a consideration of the threshold issue of whether the Tribunal had the power to make an order for security for costs. On 6 August 2001 the Tribunal published its decision holding that there was no reason to depart from it earlier reasons and made an order that Woodcrest provide security for costs in the proceedings in the sum of $25,000 by 5:00 pm on Friday 21 August 2001. All proceedings were, by the order, stayed until the security was provided.

8 Section 63(4) of the FTT Act provides that a re-hearing of an application before the Tribunal is to be dealt with as a hearing de novo. 9 The plaintiff appeals against both decisions and seeks orders setting aside the orders made in the Tribunal in each of proceedings BU 2000/2762 and BU 2000/6761 on 21 February 2001 and 6 August 2001. The operative order the subject of this appeal is that made on 6 August 2001 following the rehearing of the proceedings. The law as it stood at that date governed the orders which the Tribunal was empowered to make upon the rehearing; Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 109; Attorney-General v Vernazza [1960] AC 965.

10 The Tribunal is established pursuant to s 6 of the FTT Act. Section 48 of the FTT Act deals with the Tribunal's power to make orders for costs. It provides: "(i) The parties to a matter before the Tribunal are to bear their own costs, except as provided by this section. (ii) In cases where an amount is claimed or disputed, costs are not to be awarded if the amount does not exceed $10,000 (or such other amount as may be prescribed by the regulations) unless the Tribunal is of the opinion that the exceptional circumstances of the case warrant an award of costs. (iii) Except as otherwise provided by the regulations or by any other Act or law, in cases where an amount is claimed or disputed in the Commercial Division or the Home Building Division, the Tribunal may award costs if: (a) The amount claimed or disputed exceeds $10,000 (or such other amount as may be prescribed by the regulations), and (b) The parties were granted the right to legal representation. (iv) The Tribunal may, however, in any case award costs in relation to proceedings before it in any Division: (a) In respect of expenses incurred in obtaining professional or expert services (other than legal services), if the amount ordered to be paid by the Tribunal exceeds the amount prescribed for the purposes of this paragraph, or (b) In respect of expenses incurred in a manner or in circumstances prescribed by the regulations, or (c) In respect of any particular expenses, if it is satisfied that there are special circumstances warranting an award of costs in respect of them. (v) If costs are to be awarded, the Tribunal may: (a) Determine by whom and to what extent costs are to be paid, and (b) Order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on any other basis. (vi) In this section, costs includes: (a) Costs of or incidental to proceedings in the Tribunal and (b) The costs of or incidental to the application." 11 No power is conferred on the Tribunal by s 48, or any other section of the FTT Act to make an order requiring that security for costs be given by an applicant. 12 In the proceedings before the Tribunal Taveceen contended that the power to make an order for security for costs against Woodcrest was to be found in s 1335(1) of the Corporations Law ("the Law"). That section provided: "1335(1) Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given." 13 Woodcrest sought to contend that the Tribunal it was not a "court" for the purposes of s 1335(1) of the Law in the proceedings before Mr Griffin. It drew attention to a number of features of the Tribunal that were said to be inconsistent with it being a "court". These included that the members of the Tribunal are not necessarily legally qualified and it lacks the power to enforce its own orders. 14 In his reasons for decision delivered on 21 February 2001 Mr Griffin determined that at [5.11]: "taking into account all the relevant factors, it is reasonable to characterise the Tribunal as a court for the purposes of s 1335 of the Corporations Law ". In his reasons for decision upon the rehearing delivered on 6 August 2001 Mr Griffin at [26] stated that he saw no reason to depart from the reasons given on 21 February 2001 in this respect.

15 The Tribunal is given jurisdiction to hear and determine building claims pursuant to s 89B of the Home Building Act 1989. Section 89C(1)(a) of that Act provides that the Tribunal may make an order: "That one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by any specified person." 16 The Tribunal has been vested with the power to determine disputes between citizens settling for the future the existence of rights and obligations. It approaches the determination of claims before it by ascertaining the law and applying it to the facts as it finds them to be. Its determinations are immune from traditional forms of review pursuant to s 60 of the FTT Act. These factors indicate that the Tribunal is exercising judicial power and is properly characterised as a court: see R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Limited (1970) 123 CLR 361 at 374-375 per Kitto J: see also State Rail Authority v Consumer Claims Tribunal & Ors (1988) 14 NSWLR 473 at 478 per Hope JA (with whom Samuels and Clarke JJA agreed) finding that the Consumer Claims Tribunal is a court exercising judicial power. 17 On the hearing of the appeal Mr Stefano, who appeared on behalf of Woodcrest, did not seek to challenge the determination that the Tribunal was a "court" in the sense that it is a body exercising judicial power. A somewhat different point was the sole issue agitated on Woodcrest's behalf on the hearing of this appeal. Mr Stefano referred me to the definition of a "court" provided by s 58AA(1) of the Law: "court' means any court when exercising the jurisdiction of this jurisdiction".

"Jurisdiction" is defined in s 9 of the Law: "jurisdiction" means a State or the Capital Territory and, in the case of a State, includes the coastal sea of the State". 18 Mr Stefano next took me to the decision in Brian Rochford Ltd (Administrator Appointed) v Textile Clothing & Footwear Union of NSW (1998) 47 NSWLR 47 in which Austin J gave consideration to the definition of a "court" for the purposes of s 58AA(1) of the Law. His Honour observed: "The jurisdiction of this 'jurisdiction' is not defined, but in my opinion the word 'jurisdiction' where it first appears in this phrase cannot have the meaning given in the definition in s 9. It would be nonsensical to employ the definition a second time, given that the definition applies to the words 'this jurisdiction' in a natural and obvious way. My view is that the word 'jurisdiction' where it first appears refers to the curial jurisdiction conferred by the corporations legislation on courts (as defined) with respect to the geographical jurisdiction of the relevant State or the Capital Territory. In other words, 'court' is defined in s 58AA(1) to mean any court when exercising jurisdiction in civil matters under the corporations legislation of the State or Capital Territory whose corporations legislation is applicable in the geographical circumstances. I use the expression 'corporations legislation' so as to encompass the Corporations Act 1989 (Cth), the Australian Securities and Investments Commission Act 1989 (Cth) and the relevant State application legislation (for example, Corporations (New South Wales) Act 1990), as well as the Corporations Law itself." 19 The short point advanced by Mr Stefano was that the principal proceeding was a building claim brought pursuant to the Home Building Act and not a proceeding under the corporations legislation of this State. The Tribunal was not exercising the curial jurisdiction conferred by the corporations legislation and, thus, was not exercising "jurisdiction within the jurisdiction" within the meaning of s 58AA(1) of the Law. It flowed from this, in Mr Stefano's submission, that the Tribunal was not empowered pursuant to s 1335(1) of the Law to make an order requiring security to be given for the costs of the proceedings since the reference in that section to "the court having jurisdiction in the matter" is a reference to a "court" as defined in s 58AA(1) of the Law; Merribee Pastoral Industries Pty Limited v Australia and New Zealand Banking Group Limited [1998] HCA 41; 193 CLR 502 per Kirby J at [21] & [22].

20 It seems to me that as at 6 August 2001 when the operative order the subject of the appeal (the order matter upon the determination of the re-hearing) was made, the Law, which had been repealed, was not the source of power to require a corporate plaintiff to give security for costs. Such a power, if there was one, was to be found under the Corporations Act 2001 (Cth) ("the Act"). The plaintiff's point does not run with respect to the equivalent provision under the Act. However, in the light of the way the parties invited me to approach the matter I record my reasons for concluding that the plaintiff's challenge based upon the definition of "court" for the purposes of s 58AA(1) of the Law would not succeed in any event. 21 The point taken by the plaintiff was rejected by the Queensland Supreme Court in Hansens Pty Limited v Adco Constructions Pty Limited (1991) 4 ACSR 347 to which Mr Stefano properly drew my attention. In that case the Master held at 352: "I therefore come to the conclusion that a construction of s 1335 which confers jurisdiction to make an order for security for costs in proceedings not under the Corporations Law as well as pursuant to it is to be preferred to the narrower interpretation." 22 While the decision is not binding on me I consider that the Master's analysis of the provision to be persuasive. He noted that the expressions "plaintiff" and "action" appear to have no special meaning in the context of the Law and could only be given sensible meaning if considered in the context of litigation commenced not pursuant to it. 23 The provision with which Master White was concerned was in these terms: "(1) Where a body corporate is plaintiff in any action or other legal proceedings under this Law, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the body corporate will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given." 24 Prior to amendment, s 1335(1) of the Law provided: "where a body corporate is plaintiff in any action or other legal proceeding under this Law the court having jurisdiction in the matter …".

By Act 110 of 1991, which commenced on 27 June 1991, the words "proceeding under this Law" were deleted from s 1335(1). Mr Stefano acknowledged that the legislative history in this respect did not assist his argument.

25 At the time of bringing its claim Woodcrest was a company incorporated under the Law. The Law made provision in s 1335(1) in cases involving a corporate plaintiff (being any action or other legal proceeding) for the court having jurisdiction to require that security for costs be given. The subject matter of the present appeal is the Tribunal's determination of Taveceen's application that Woodcrest be required to give security for costs. Accepting that the Tribunal is a "court" in the sense of a body exercising judicial power (the contrary was not contended on this appeal) I consider that in determining an application that a corporate plaintiff be required to give security for costs in respect of a claim before it, the Tribunal to be exercising curial jurisdiction conferred on it by the corporations legislation. I do not understand Austin J's reasoning in Brian Rochford to lead to a contrary conclusion. This construction is one which to my mind supports the object and purpose of the legislation and is to be preferred to a construction which does not have that effect; s 109(H) of the Law. 26 The rehearing proceeded before the Tribunal on 9 July 2001. As at that date the Law was in force. As I have noted, the Tribunal's order upon the determination of the rehearing was made on 6 August 2001. On 15 July 2001 the Law was repealed pursuant to the Corporations (Repeals, Consequentials and Transitionals) Act 2001. On the same date the Act came into force. 27 On the hearing of the appeal neither party addressed any submissions to the circumstance that, at the date of the making of the order the subject of the appeal, the Law had been repealed. 28 The plaintiff's contention (that the Tribunal is not a "court" within the terms of s 58AA of the Law) is not open under the equivalent provision of the Act. Section 1335(1) of the Act is in like terms to its predecessor. Section 58AA(1) of the Act defines "court" in these terms: "'Court' means any court." 29 I invited the parties in written submissions to address the significance, if any, of the circumstance that as at the date of the determination of the re-hearing the Law was repealed and the Act had commenced. Mr Stefano responded to that invitation by contending: "The plaintiff submits that the repeal of the Corporations Law has no effect on the issues the subject of the appeal because of s 1384B(1) of the Corporations Act ." 30 Mr Merity, who appeared on behalf of Taveceen, in a short written submission stated: "The defendant agrees with the conclusion in the plaintiff's additional submission dated 1 May 2002 which is that the repeal of the Corporations Law has had no effect on the issues the subject of the appeal." 31 Section 1384B(1) is in Division 4 of Part 10.1 of the Act which contains the transitional provisions which govern court proceedings and other orders. It is in these terms: "1384B(1) [continued effect of decisional order] for the avoidance of doubt, if: (a) A proceedings was started in a court before the commencement; and (b) The proceedings was a Federal corporations proceeding that related to a matter to which a provision of the old corporations legislation of a State or Territory in this jurisdiction applied; and (c) A decision was made or an order given in the proceeding before the commencement; the decision or order continues to have effect after the commencement despite the provision of the old corporations legislation ceasing to have effect." 32 It is not apparent that s 1384B(1) of the Act applies to these proceedings. It is expressed to relate to a proceeding which is a "Federal corporations proceeding". Such a proceeding is defined for the purposes of Part 10.1 Division 4 in s 1382(1) of the Act. The proceedings before the Tribunal do not seem to me to be a "Federal corporations proceeding" within the meaning of that expression as defined. Further, s 1384B(1) operates (in respect of a Federal corporations proceeding) such that a decision made or given in the proceeding before the commencement of the Act, to which a provision of the old corporations legislation of a State or Territory applied, continues to have effect after the commencement despite the provision of the old corporations legislation ceasing to have effect. 33 I am not bound by the parties' agreement as to the effect of the transitional provisions of the Act upon the question the subject of this appeal; Accident Towing & Advisory Committee v Combined Motor Industries Pty Ltd [1987] VR 529 per McGarvie J at 547 citing Wilberforce LJ's observations in Saif Ali v Sydney Mitchell & Co [1980] AC 198 at 212. I do not accept s 1384B(1) of the Act to have the operation for which the parties contend. 34 It might be contended that s 1383 of the Act which deals with court proceedings under or related to the old corporations legislation, being proceedings other than Federal corporations proceedings, has application to the subject proceedings. That provision operates such that upon the commencement of the Act a proceeding equivalent to the proceeding under the old corporations legislation of a State is taken to have been brought in the same court, exercising Federal jurisdiction under the provision of the new corporations legislation that corresponds to the relevant provision of the former; s 1383(3) of the Act. 35 Section 1383 of the Act has application if the proceeding before the Tribunal was a proceeding under a provision of the old corporations legislation of this State; s 1383(1)(b)(i). It may be that an application for security for costs in a proceeding in which a corporation is a plaintiff would come within the section. 36 Section 1383 does not apply in respect of a proceeding that is an "appeal or review proceeding". Such proceedings are defined in s1382(1) in relation to an order of a court to mean "a proceeding by way of appeal, or otherwise seeking review, of the order". I am inclined to think that the proceeding determined by the order made on 6 August 2001 is properly characterised as an "appeal or review proceeding" and that accordingly s 1383 does not apply.

37 In the event that the provisions of s 1383 do not catch the rehearing of Taveceen's application for security for costs, I nonetheless consider that the Tribunal had the power to make the order that it did on 6 August 2001 requiring Woodcrest to give security for costs pursuant to s 1335(1) of the Act. It seems to me proper to characterise s 1335(1) of the Act as a procedural provision.

38 In Jackman v Dandenong Sewerage Authority [No 2] (1967) 20 LGRA 413 Barber J held that the removal of the discretion whether or not to award costs under the Valuation of Land Act 1960 (Vic) was procedural and applied to proceedings commenced prior to the amendment to the Act. At 415 his Honour observed: "where the general rule is that a statute changing the law will not be given retrospective effect in the absence of the clearest language demanding such an interpretation, there is a well recognised exception in regard to statutes affecting procedure or costs merely, which are always retrospective unless the opposite effect is clearly stated. There is no vested right in procedure or costs. See Craies on Statute Law , 6th ed. (1963) p 400. In Maxwell v Murphy ((1957) 96 CLR 261 at 286), Fullagar J restates the rule in the clearest terms and discusses all the important authorities to that date. The weight of authority is so great that it is impossible at this date to question the rule, and I am satisfied that the section does have the retrospective effect which Mr Phillips contends."

In Australian Iron & Steel Pty Ltd v Nadjovska (1988) 12 NSWLR 587 it was held that an amendment to the Anti-Discrimination Act 1977 which increased the limit on the award of damages which might be made under that Act was a procedural provision that applied to a claim commenced before the amendment. 39 As at 6 August 2001 when the Tribunal made the order requiring Woodcrest to give security for costs I am persuaded that it had the power to do so pursuant to s 1335(1) of the Act. That the Tribunal may have mistakenly considered that its power was conferred by s 1335(1) of the Law would not invalidate its order provided that it did have a source of power; Johns v Australian Securities Commission (1993) 178 CLR 408 per Brennan J at 426. In the event that I am wrong in my view that the legislation governing the orders made by the Tribunal on 6 August 2001 was the Act and not the Law I consider that for the reasons earlier given the plaintiff's challenge is, in any event, without merit. 40 For these reasons the orders that I make are:

1. Extend the time within which to institute this appeal pursuant to Pt 51A r (3)(3) of the SCR ;

2. Affirm the orders made by the Tribunal in each of proceedings BU 2000/2762 and BU 2000/6761 on 6 August 2001;

4. The plaintiff is to pay the defendant's costs as agreed or assessed. **********

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