NEW SOUTH WALES SUPREME COURT

CITATION: Bower v Goth [2006] NSWSC 805

CURRENT JURISDICTION: Common Law

FILE NUMBER(S): 11574/2006

HEARING DATE{S): 4 August 2006

DECISION DATE: 17/08/2006

PARTIES:

Lawrence Bower [Arthitects] Pty Ltd - Plaintiff

James Goth - Defendant

JUDGMENT OF: Associate Justice Harrison

LOWER COURT JURISDICTION: Local Court

LOWER COURT FILE NUMBER(S): 645/2005

LOWER COURT JUDICIAL OFFICER: Railton LCM

COUNSEL:

SOLICITORS:

Mr L Bower - Plaintiff in person

Mr J Goth - Defendant in person

CATCHWORDS:

Appeal - Local Court Small Claims Division - outstanding architect's fees

ACTS CITED:

Local Courts Act 1982 (NSW) - ss 70, 73

Uniform Civil Procedure Rules 2005 - Part 50.5

DECISION:

(1) The appeal is dismissed

(2) The decision of His Honour Magistrate Railton made on 13 March 2006 is affirmed

(3) The summons filed 6 April 2006 is dismissed

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

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

ASSOCIATE JUSTICE HARRISON

THURSDAY, 17 AUGUST 2006

11574/2006 - LAWRENCE BOWER [ARCHITECTS]

PTY LTD v JAMES GOTH & ANOR

JUDGMENT (Appeal – Local Court Small Claims

Division – outstanding architect’s fees)

1 HER HONOUR: By summons filed 6 April 2006 the plaintiff seeks firstly, an order granting leave to appeal the decision of His Honour Magistrate Railton LCM made on 13 March 2006; secondly, an order that the decision of the Magistrate be set aside; and thirdly, and order that the first defendant pay to the plaintiff the sum of $4,625.54.

2 The plaintiff is Lawrence Bower [Architects] Pty Ltd. The defendant is James Goth. Ms Baker from the Crown Solicitor appeared for the Magistrate and requested that pursuant to Part 50.5 of the Uniform Civil Procedure Rules 2005 ( UCPR ) that he be removed as a party. The order was made. The plaintiff relied on his affidavits sworn 11 April 2006, 23 May 2006 and 2 June 2006. Both parties appeared in person, unrepresented in the Local Court and in this Court. As these affidavits are voluminous, the plaintiff was requested to identify the documents before the Magistrate so as to assist the Court. For convenience, I shall refer to the plaintiff as Mr Bower and the defendant as Mr Gower in this judgment.

3 Mr Bower sought payment of $4,195.95 being outstanding fees for architectural work. On 6 March 2006 the hearing took place. On 13 March 2006 the Magistrate dismissed Mr Bower’s claim.

4 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by Mr Bower. Section 73(2) of the Local Courts Act 1982 (NSW) allows an appeal to this court on the grounds of lack of jurisdiction or denial of natural justice.

5 Section 75 of the Act provides that the Court may determine an appeal by either (a) varying the terms of the judgment or order or (b) setting the judgment or order aside or (c) setting the judgment or order aside and remitting the matter for determination in accordance with the Court’s directions or (d) dismissing the appeal.

Grounds of Appeal

6 The grounds of appeal are firstly, the denial to the plaintiff of natural justice by the second defendant by act and/or omission; secondly, the second defendant failed to allow the plaintiff to present relevant evidence, therefore, resulting in a denial of procedural fairness; and thirdly, the second defendant made an error of law in making his determination on 13 March 2006 being contrary to available evidence.

7 In Kojima Australia Pty Ltd v Australian Chinese Newspapers Pty Ltd [2000] NSWSC 1153 and Wakim v Mathiew Pty Ltd t/as Dove Migration Services [2002] NSWSC 405, O’Keefe J (at [23]-[24] and at [20]-[21] respectively) made essentially identical observations on natural justice. In Kojima he stated:

“The requirements of natural justice (or procedural fairness as it is now commonly referred to) apply to the Small Claims Division of the Local Court. This is clear from the nature of the function to be performed by that tribunal and the statutory recognition that is afforded to natural justice by s 69(2A) of the Act.

The content of the requirements of natural justice is not fixed. The content is fluctuating. The overarching requirement is that of fairness (National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR 296 at 312 per Gibbs CJ with whom Brennan J agreed). For a court that normally involves a duty to:

(i) act judicially;

(ii) deal with the matter for decision without bias;

(iii) give each party the opportunity of adequately presenting its case;

(iv) observe the procedural and other rules provided for in the relevant statute;

(v) come to its decision with that sense of responsibility that is the necessary accompaniment of the duty to do justice.”

Overview of the Small Claims Division of the Local Court

8 The legislative policy in relation to small claims is that there should be a quick, cheap and informal resolution of these claims. To achieve this, proceedings are conducted with a minimum of formality. According to O’Keefe J in Wakim at [16], the quick, cheap and informal resolution of claims:

“…has many advantages. It tends to shorten proceedings. It assists in reducing costs. It does this in a number of ways, one of which is to make it easier for litigants in person to understand the procedures, perhaps to appear for themselves and not be disadvantaged by excessive legality, formality or procedural rules. Another is to give finality to decisions made in respect of small claims. This has been done by so framing the legislation as to ensure to the greatest extent possible that claims before the Small Claims Division of the Local Court should begin and end in that court. The limitation on the right of appeal permitted by the statute betokens this. Such a policy is readily understandable in the light of the fact that the ceiling for claims in the Small Claims Division is $10,000. Taking up the time of superior courts with such small matters is thus properly avoided in the vast majority of cases.”

9 In determining whether Mr Bower was denied procedural fairness it is necessary to consider the nature of the jurisdiction exercised in the Small Claims Division. This is because the content of procedural fairness varies depending upon the nature of the tribunal and the jurisdiction it exercises. Section 70 of the Act provides:

“Procedure generally in Small Claims Division

(1) The jurisdiction conferred by or under this Act on a Court sitting in its Small Claims Division is to be exercised by a Magistrate or an Assessor.

(2) Proceedings in a Court’s Small Claims Division are to be conducted with as little formality and technicality as the proper consideration of the matter permits.

(3) The rules of evidence do not apply to proceedings being heard or other proceedings in a Court’s Small Claims Division.

(4) Witnesses may not be cross-examined except in circumstances in which, and to the extent to which, the cross-examination of witnesses is authorised by a practice note.

(5) An Assessor or Magistrate exercising the jurisdiction of a Court sitting in its Small Claims Division may inform himself or herself on any matter relating to proceedings being heard or other proceedings in the Small Claims Division in such manner as he or she thinks fit.

(6) Proceedings in a Court’s Small Claims Division (other than any judgment given or order made in respect of the proceedings) are not required to be recorded.”

10 Practice Note 2 of 2005 at [10.1] - [10.4] reads:

“10.1 There is no right to call witnesses to give evidence, to give evidence on oath/affirmation or to cross-examine a party or witnesses on oath/affirmation or otherwise in the Small Claims Division

10.2 Where a direction had not been given at the Pre-trial review by the Magistrate, Assessor or Registrar for the attendance of any witness at the trial of the proceedings, the proceedings will be heard and determined by each party tendering the written statements of witnesses together with any other relevant documentation or material in support of the party’s case. There will be no right to examine or cross-examine any witness. Parties will, however, be entitled to make comments, present arguments and make final submissions on the evidence.

10.3 Where a direction has been given at the Pre-trial review by the Magistrate, Assessor or Registrar, that a witness attend for cross-examination, the proceedings will be heard and determined on the oral evidence and the written statements and other documents and materials which have been tendered. Submissions on the evidence will also be allowed.

10.4 The procedure at the trial of the proceedings in the Small Claims Division will be determined by the Magistrate or Assessor as he or she thinks fit.”

11 Mr Bower referred to a document he received from Wyong Local Court entitled “Small Claims Information Package” (Aff 07/01/2006 – Annexure “A”). Under the heading “What happens at the hearing” it states:

“On the day of the hearing your case will be called before the Magistrate. He/she will read the file and the statements which have been filed usually (but not always) before coming into court. The Magistrate will try to find out what the case is all about, what is in dispute and what is agreed by the parties. He/she will talk to you and your opponent about your respective version of events and may ask you questions.

The Magistrate will ask each party to sum up his/her case and give each of you a chance to explain why your argument should be successful.

After the Magistrate has heard from each party and considered all the evidence he/she will announce the result. Usually this is done on the day at court, but, if there are questions of law which need to be researched, the Magistrate may reserve the decision for another day.

If you do not understand something at the hearing, you should tell the Magistrate and ask for an explanation.”

12 In Wende v Finney [2005] NSWSC 927 Howie J at [27] and [28] made some pertinent observations about the proceedings in the Small Claims Division which I respectfully reproduce here. They are:

“Of course informality and the abandonment of the normal rules of evidence and procedure should not be allowed to give rise to unfairness even where the justice being administered is in relation to relatively trivial claims. Rather in such matters the court might need to be particularly astute to ensure that the lack of formality and the speedy resolution of claims does not become an end in itself at the expense of the appearance of fairness to the parties within the court’s jurisdiction. After all the formal rules of procedure that normally attend a hearing are generally aimed at producing fairness to the parties, sometimes at the expense of efficiency in the exercise of the court’s jurisdiction. So where those rules are displaced by the need to provide cheap, efficient and expedient justice to the parties, the advantages can sometimes be obtained at too high a price so far as a particular litigant is concerned.

No doubt one of the reasons why the proceedings in the Small Claims Division are conducted with the informality required is that the parties before the court are, in advance of the hearing, aware of the material upon which the determination is to be made. There are procedures laid down and referred to in the Practice Note that require the parties to identify to each other the material they intend to rely upon. The material upon which each side relies, including statements of witnesses and the actual documents at the heart of the dispute, are in a form where they can be reviewed by the court assisted by such submissions that the parties wish to make upon those documents without the need to formally tender and prove the relevant material. …the intention of the scheme of the relevant legislation is that the dispute can generally be resolved on the documents.”

13 In Wende a party tendered documents that were produced on subpoena during the hearing. Those documents alleged dishonesty and misconduct. Wende requested the opportunity to call witnesses to rebut that evidence. This request was refused. As it turned out, much of what the Magistrate read into his judgment from these documents was highly prejudicial to Wende. It was held that the failure to give Wende an opportunity to rebut the documents alleging dishonesty and misconduct, constituted a denial of procedural fairness.

The Local Court proceedings

14 Mr Bower claimed $4,195.95 for fees outstanding pursuant to an oral agreement made on or about 21 April 2004, for architectural advice in respect of potential drainage problems arising out of filling and construction work on a neighbouring property. Mr Goth admitted that there was a contract between the parties but pleaded firstly, that the contract was terminated by conversation on 13 September 2004; and secondly, that all outstanding moneys had been paid on 8 October 2004.

15 On 27 April 2004 Mr Bower forwarded a letter to Mr Goth which stated amongst other things, that his fee was $150 per hour. Mr Bower forwarded two invoices to the defendant. The first bill dated 29 October 2004 sought the sum of $1,800 being a progress payment which was paid by Mr Goth. This much was common ground before the Magistrate.

16 It is the second bill dated 29 March 2005 that was the subject of dispute before the Magistrate. That bill claimed fees for work done in April, May, September and October 2004 and sought payment in the sum of $4,195.95.

17 Mr Bower’s submissions, as I understand them, was that he was denied natural justice because the Magistrate refused to allow him to rely upon further evidence to rebut the allegations. Mr Bower submitted:

“The Magistrate said there was too much to read in the statements and said he would read and send us a written award. I asked if we could respond to each others statements and was told there was no time. I advised the Magistrate that I had written a response to the defendant’s statement and the two statutory declarations and requested I be permitted to hand him a copy but was told that the documents submitted were all I was entitled to submit. The document handed me when I took out the Statement of Claim advised that both parties were to submit statements and on the date of the hearing we could speak to the other parties statement otherwise, not having seen the statements prior to submission how could the parties advise the Magistrate of any flaws in the statements.”

18 Mr Bower, in oral submissions, stated that in his view the Magistrate did not read the documents properly.

19 The parties agreed that they had attended a settlement conference before the Chamber Magistrate. They agreed a timetable was set; Mr Bower was to file his statements by a certain date and then Mr Goth was to file a defence and his statements by a certain date. Mr Goth (from the bar table) informed me that he received Mr Bower’s statement three days prior to the date listed for hearing.

20 The bundle of documents before the Magistrate contained a letters dated 7 Aril 2005, 29 April 2005, and 4 June 2005 from Mr Goth to Mr Bower.

21 On 29 April 2004 Mr Goth advised Mr Bowers that the inspection of the drainage construction at 1001 The Entrance Road lasted for a period of 45 minutes including the time spent in Mr Goth’s home, and on 12 May 2004 their meeting at his home [Mr Goth] took only 15 minutes. Mr Goth had also informed Mr Bower that he [Bower] had failed to present an acceptable report in a timely manner. This lead Mr Goth to subsequently obtained another report which cost him only $660 not $5,999.45.

22 Mr Goth in his letter dated 4 June 2005 once again advised Mr Bower that:

“Your invoice five months later detailing the claim for hours spent is not correct.

I have witnesses of your visits to the site and have notified you about the errors in your invoice.

All claims after 1st November 2004 are in error.”

23 At [5] the Magistrate in his reasons stated:

“This court does not and cannot claim to be an expert in the plaintiff’s field. Matters such as this where there is a dispute as to the “value” of work done, in whatever field, largely depend on issues of credit and the available evidence before the court. In accordance with the Registrar’s directions statements were filed by both parties prior to the hearing date. I refused both parties the opportunity of filing further documents in reply in accordance with the practice directions. The advantage which the defendant has over the plaintiff is that he is able to draw on the evidence of two witnesses to corroborate his version of what occurred on the 29.4.04 and 12.5.04. Admittedly these witnesses are not independent but their statements are before the court in the form of statutory declarations and as such have to be given some weight.”

24 The two witnesses were Mrs Goth (Mr Goth’s wife) and his daughter.

The Magistrate decided at [6]:

“The plaintiff bears the onus of proving his case on the balance of probabilities. The issue here is whether I can the plaintiff’s evidence (sic) over that of the defendant as to the fact that the account submitted by him is fair and reasonable. I am not sitting as a Professional body which has the skills to assess an account and the appropriateness of work undertaken and the time claimed to have been taken to undertake certain tasks. On the facts of this case I am not in a position to accept some or part of what was claimed and disallow others. There are live issues as to credit which leaves this court unable to determine what was done pursuant to the contract and what time was appropriately spent undertaking that work. I am not in a position to accept the evidence of the plaintiff over the defendant. Having regard to the onus on the plaintiff to prove his case I have to find for the defendant.”

25 Some months prior to the hearing taking place, Mr Bower was on notice that Mr Goth was disputing the work done in relation to the second invoice. Mr Goth had informed Mr Bower that he had witnesses who could vouch that they had observed Mr Bower’s visits to the site. On 29 April 2005 Mr Goth informed Mr Bower by letter that he disputed the time charged by Mr Bower on certain days. Mr Goth stated that on 12 May 2004 Mr Bower spent 45 minutes on site, on 12 May 2004 Mr Bowers spent 15 minutes at his [Goth’s] home, and on 8 October 2004 there was a 10 minute meeting between them. In Mr Bower’s bill, which uses the time costing method, on 12 May 2004 he claimed 5.75 hours, and on 8 October 2004 he billed 0.75 hours (45 minutes). Mr Bower was on notice of the issues in dispute prior to preparing his statement. On one of these days, Mr Bower says that he was at a meeting and sought to produce the minutes of that meeting at the hearing. Mr Bower could have addressed these issues in his statement.

26 It was open to the Magistrate to disallow further evidence from both parties. The decision was in accordance with the procedure outlines in the practice note. The parties had a reasonable opportunity to present their evidence and make submissions. There has been no denial of natural justice. The appeal is dismissed. The decision of His Honour Magistrate Railton made on 13 March 2006 is affirmed. The summons filed 6 April 2006 is dismissed.

27 Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant’s costs as agreed or assessed.

The Court orders:

(1) The appeal is dismissed.

(2) The decision of His Honour Magistrate Railton made on 13 March 2006 is affirmed.

(3) The summons filed 6 April 2006 is dismissed.

(4) The plaintiff is to pay the defendant’s costs as agreed or assessed.

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LAST UPDATED: 17/08/2006