Supreme Court New South Wales Medium Neutral Citation: Arjunan v Neighbourhood Association DP No 285853 [2022] NSWSC 746 Hearing dates: 26 May 2022 Decision date: 26 May 2022 Jurisdiction: Common Law Before: Rothman J Decision: (1) The plaintiffs Amended Motion of 19 April 2022 is dismissed, except to the extent that leave is granted for the plaintiffs to amend the Summons to include an order for the costs of the proceedings. (2) The plaintiffs shall pay the defendant's costs of and incidental to the Motion. Catchwords: CIVIL PROCEDURE – Motion to determine issues on a preliminary basis that are part of substantive proceedings – Motion to re-open previous interlocutory judgment – Motion to amend Summons to appeal judgment of Local Court to include substantive relief other than determination of appeal – Motion dismissed Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 83 Community Land Management Act 1989 (NSW), s 62 Uniform Civil Procedure Rules 2005 (NSW), r 12.7 Cases Cited: Lambidis v Commissioner of Police (1995) 37 NSWLR 320 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 51 Category: Procedural rulings Parties: Kannapiran Chinna Arjunan (First Plaintiff/Applicant) Thangnam Kannapiran (Second Plaintiff/Applicant) Neighbourhood Association DP No 285853 (Defendant/Respondent) Representation: In person (First and Second Plaintiffs/Applicants) Grace Lawyers, D Radman (Defendant/Respondent) File Number(s): 2021/368684 EX TEMPORE Judgment 1. HIS HONOUR: Before the Court is a Motion seeking relief in circumstances where the substantive proceedings purport to be an appeal from the Local Court. It is necessary to deal with some of the factual circumstances of the proceedings. 2. The first plaintiff is Mr Kannapiran Chinna Arjunan, the second plaintiff is Thangnam Kannapiran, and the defendant is the Neighbourhood Association relevant to the property to which this dispute relates. 3. Initially, proceedings were brought in the Local Court seeking the recovery of a debt. The initial debt claimed by the defendant in the Local Court proceedings, on behalf of the Neighbourhood Association, was for an amount of $2,795.91. The plaintiffs claim that the debt was in fact $459 plus expenses. The Local Court Summons suggests the amount of the initial claim to be $2,106.34. The Local Court ordered the debt and interest. 4. The origin of the debt, whatever be its amount (because the Court is not here dealing with the substantive appeal), appears to be that the plaintiffs' own property in Epping, New South Wales, for which the defendant levied contributions. Those contributions were required to be paid to the administration, or sinking fund, of the defendant. 5. The plaintiffs, according to the Local Court, failed to pay some of the contributions, or all of them, and the defendant then sought interest plus recovery expenses. 6. The defendant filed a Summons, as already stated, in the Local Court Small Claims Division on 20 January 2020 seeking recovery for the debt of $2,795.91. It seems that the matter was referred away from the Small Claims Division, although I am not absolutely certain of the process. In any event, ultimately the Local Court ordered the plaintiffs to pay the defendant the amount of $28,414.96 as recovery expenses for the initial debt. 7. That decision — being the decision ordering payment of the debt and recovery expenses — is the subject of the appeal and the substantive proceedings. As earlier stated, the substantive proceedings are not before the Court today. 8. The Summons for the appeal was filed on 29 December 2021. The Summons seeks to appeal against the whole of the decision made by the Local Court. The plaintiffs seek that the appeal from the Magistrate be allowed, the ordered judgment be set aside, and the costs claim awarded below be dismissed. 9. On 24 March 2022, Hamill J of this Court heard a Motion by the plaintiff, on notice of 16 February 2022, relating to the validity of the appointment of the lawyers now acting for the defendant. His Honour delivered judgment ex tempore on 24 March 2022. [1] No appeal has been lodged against that judgment. 10. His Honour found that the plaintiffs' contention that the defendant was "defunct" or "dysfunctional" since 2018 is an issue to be determined in the substantive proceedings. 11. His Honour also found that there were a series of valid resolutions made at various meetings which appointed Grace Lawyers to act for the defendant. It is Grace Lawyers that is now acting, and acted before Hamill J, and in the Local Court proceedings. 12. For the Motion of 19 April 2022, the plaintiffs rely upon two Affidavits sworn by the first plaintiff. The first plaintiff appears in person for both plaintiffs. Those Affidavits were sworn on 19 April 2022 and 23 May 2022. Written submissions were filed by the first plaintiff on 13 May 2022. The Court also has on file, and has had regard to, the material relied upon by the plaintiffs in their motion before Hamill J, namely the Affidavit sworn by the first plaintiff on 16 February 2022; written submissions dated 30 January 2022; written submissions dated 29 November 2021, and filed 16 March 2022 and again on 18 March 2022, and marked MFI 1 in the proceedings before Hamill J. 13. Essentially, the plaintiffs submit that the law firm representing the defendant is not properly authorised to act in these proceedings. This is based upon a contention that the Annual General Meeting (hereinafter "the AGM") of the defendant, which resolved to appoint the firm, was not attended by the plaintiffs and only one out of 11 strata members provided their vote. Further, it is submitted that none of the AGMs had a chairperson appointed and was therefore invalid. The plaintiffs claim the defendant made a false and misleading statement to the Court on 24 March 2022 regarding this information. 14. The plaintiffs submit that leave should be granted to amend the Summons, noting that the directions hearing for case management has not yet taken place and the amendments proposed are minor and do not change the grounds of appeal. 15. The Court has also had read before it on behalf of the defendant two Affidavits of Kathleen O'Hea, affirmed on 9 March 2022 and 22 March 2022. 16. Written submissions were filed by the defendant on 21 May 2021. Apparently that was the second time that the written submissions were filed, the plaintiffs having received the written submissions prior to 20 May 2021. Notwithstanding that, the plaintiffs complain, at least for a time, that the written submissions are invalid because they were filed later than the direction given for the filing of submissions. Apparently, the plaintiffs no longer press that aspect of the Motion. 17. The Amended Motion of 19 April 2022 seeks essentially six orders. There was also a further order sought purportedly by email sent on Friday 20 May 2022. 18. The orders that are sought in the Motion are: first, to grant the motion and vary the orders made on 24 March 2022 by Hamill J; second, a declaration that Grace Lawyers has acted without authority since 2019; third, a declaration that legal costs claimed against Grace Lawyers, who acted without authority, could not be made for the proceedings with the Courts subject to the decision of the substantive hearing. I am paraphrasing. The fourth order is for the Court to grant leave to the plaintiffs to amend the Summons and to dismiss the objection by the defendant. The objection is not before the Court today. The fifth order seeks for the Court to make an order that the defendant pay the plaintiffs' costs of and incidental to the Motion dated 16 February 2022 and the Motion heard today. The sixth order is the decision of 24 February 2022 on costs, reserved for the defendant, be dismissed. 19. The matter that was sought by email on 20 May 2022 is that the Court strike out the Defence pursuant to r 12.7 of the Uniform Civil Procedure Rules 2005 (NSW) because it was filed late. 20. There is no evidence that the late filing of the Defence causes any party prejudice. 21. The substantive issue that is concerned in the appeal is whether or not the plaintiffs owe $2,795.91 and the recovery costs of $28,414.96, and presumably there is an issue of interest from the date of the order. 22. To the extent that the applicants claim that there was a particular purported AGM which resolved to appoint Grace Lawyers and to sue for the debt recovery owed by the plaintiffs; that is a matter that is plainly, as the plaintiffs concede, in dispute between the plaintiffs and the defendant relating to the operation of the defendant. As a consequence of that, pursuant to the terms of s 62 of the Community Land Management Act 1989 (NSW) (now repealed), the jurisdiction to deal with such a dispute is given to the Civil and Administrative Tribunal of NSW (hereinafter "the Tribunal" or "NCAT"). 23. I understand from the Bar table, and from some of the documents that have been filed in these proceedings, that there have been a number of proceedings relating to the internal operation of the Neighbourhood Association. Those proceedings to which I am now referring were commenced by the plaintiffs in these proceedings against the Neighbourhood Association (being the defendant in these proceedings) before NCAT. The Tribunal found that a variety of annual general meetings that were said to be invalid were, in fact and in law, validly held, and the resolutions passed at them were valid resolutions. 24. No proceedings have been taken in relation to the AGM that was held which purported to authorise the debt recovery about which the plaintiffs complain. Notwithstanding that, according to the judgment of Hamill J, the defendant has held a number of valid annual general meetings which have authorised the lawyers currently acting for the defendant to act on behalf of the defendant. 25. It seems that the plaintiffs now seek to re-agitate issues that were agitated before Hamill J, on the basis of what is said to be new evidence that was not taken into account or was not tendered before his Honour. In large measure, the substantive issue that was before Hamill J was stood over to be argued at the time that the substantive appeal would be heard. 26. There is no suggestion that the evidence that is sought to be relied upon now was not available to the plaintiffs at the time that the matter was heard by Hamill J. Of course, the hearing before Hamill J and the decision of his Honour was an interlocutory hearing. Nevertheless, his Honour determined to finality the issue of the validity of the AGM. 27. To the extent that his Honour was wrong, there is a right of appeal to the Court of Appeal. There has been no appeal from his Honour's judgment. 28. I deal firstly with the issue of the amendment of the Summons. 29. The pleadings have closed. There has been more than 28 days since the filing of the original Summons. As a consequence, in order to amend the Summons, it is necessary for the plaintiffs to obtain the leave of the Court. Even though leave has not formally been sought, an order has been sought which is in or to the same effect. 30. The amendments — a draft of which is attached to the plaintiffs' written submissions of 23 May 2022 — purports to add the following orders. It purports to seek, as Order 3 in the proposed Summons, to have the Court make an order to the following effect: "Grace Lawyers purported to act for the respondent without authority and therefore all their legal cost claim be dismissed including the legal costs for this proceeding and the proceedings with the Local Court." 1. That is not an order of the Court. If it is anything, it is a ground for the making of orders in relation to the substantive appeal. The application to amend the Summons, to the extent that it deals with the proposed Order 3, is refused. 2. Three further amendments are sought, the first being proposed Order 5: that the defendant to pay the plaintiffs' costs of and incidental to the Summons and Motion. That amendment is allowed. Leave is granted to file that amendment. 3. The amended Order 6 is sought in the following terms: "That the defendant be restrained from claiming against the plaintiff[s] any legal costs other sources (NCAT) as all the legal costs were already recorded and claimed with Local Court (sic)" 1. It is not clear, nor has it been made clear, whether such an order could be made even ancillary to the appeal that is sought. If, as is suggested, the proceedings in the Local Court were commenced irregularly because the lawyers were not properly appointed (about which argument I make no comment) that would not stop subsequent proceedings being commenced which would seek to obtain any debt that was owed. 2. The substantive issue in the appeal is whether the debt was owed and whether the discretion to order recovery costs to that extent miscarried. Therefore, the amendment sought in Order 6 is not allowed and leave is not granted to seek that amendment. 3. The last amendment that is sought, being Order 7, is such further or other orders as the Court considers appropriate and necessary. 4. I have often wondered about Summonses that have such a provision. The Court has the jurisdiction to make ancillary orders pursuant to the judgment of the High Court in St Martins Investments. [2] That is, they can make orders that are necessary for the full efficaciousness of the orders sought to be made and the issues that are agitated. 5. The amendment that is sought in relation to Order 7 of the proposed Amended Summons is disallowed. As a consequence, that deals with the Motion insofar as it deals with the leave sought to amend. 6. No good reason has been given as for why the issues of evidence that are now sought to be relied upon to alter the orders that were made by Hamill J were not provided to Hamill J, and no good reason has been given upon which to grant leave to reargue that aspect. 7. If leave to appeal is sought, albeit now, presumably out of time, so be it. But leave to appeal would not be granted by the Court as presently constituted, nor indeed by anyone at this point other than the Court of Appeal. There would also need to be an extension of time. 8. Consequently, Prayer 1 in the Amended Motion of 19 April 2022 is dismissed. 9. Prayer 2 relates to the authority of Grace Lawyers. It is, in effect, a challenge to retainer. It has been dealt with by Hamill J. To the extent that the plaintiffs seek to re-agitate it, it should not be done by a Notice of Motion on a preliminary basis. Rather it should be done in the substantive appeal. I do not, by that, take the view and express any view as to whether it could appropriately be dealt with in the substantive proceedings. But in terms of the Motion now before the Court, that prayer is dismissed. 10. Ancillary to that is that the Court would not make an order, as sought by Prayer 3, being a declaration that the legal costs were made without authority, and that has already been dealt with in any event. I make it clear that is the substantive appeal and must be dealt with in the substantive appeal, not as part of a preliminary Motion. 11. I have dealt already with the leave for the amendment of the Summons sought by Prayer 4. That is, in part, granted, and I have to say it is granted to a lesser extent than was the consent of the defendant. 12. The Court is not in a position to grant an order, as is sought by Prayer 5, that the defendant pay the costs of the Motion of 16 February 2022, heard 24 March 2022, and is not in a position, except as otherwise stated later in these reasons, to deal with the costs of the proceedings related to this Motion. 13. The decision of 24 February 2022, which the plaintiffs seek to be dismissed as relief at Prayer 5 of the Motion, is dealt with in the same way as the reopening or purported attempt to reopen the judgment of Hamill J. 14. Nothing has been put to warrant the striking out of the Defence, which was the order purported to be sought by the plaintiffs by email on 20 May 2022. That prayer, insofar as it purports to form part of the Motion or whether or not it forms part of the Motion, is dismissed. 15. For obvious reasons, I do not deal with any adjournment of the proceedings that occurred today. 16. The net effect of all of the foregoing — except to the extent that I have allowed the Summons to be amended to claim costs of the substantive proceedings — is that the Motion heard today is dismissed. 17. The plaintiffs, and the applicants on the Motion, will pay the costs of the defendant of and incidental to the Motion. 18. One other matter should be dealt with in this proceeding. 19. Earlier in the reasons I mentioned that the dispute as to the operation of the annual general meeting and the validity of its resolutions is a matter that is capable of being resolved by the NSW Civil and Administrative Tribunal, otherwise known as NCAT. No attempt has been made to deal with it in that way. There are three sets of proceedings that could occur. That would be held far less expensively and far less formally than proceedings in this Court. 20. Those proceedings are proceedings before a single member of NCAT; internal appeal proceedings within NCAT to an appeal panel; and ultimately, I think, by leave of the Court, on appeal to this Court on a question of law, pursuant to s 83 of the Civil and Administrative Tribunal Act 2013 (NSW). 21. The previous proceedings relating to the validity of annual general meetings about which the plaintiffs have complained were determined by NCAT. I do not have the judgments of NCAT before me or their decisions. I do not know whether the issue raised in relation to the validity of prior AGMs is the same issue that is sought to be agitated in these proceedings. If it were, it may well be subject to arguments about estoppel and, in particular, issue estoppel. The Court of Appeal has held that prior determinations of some State administrative tribunals give rise to an issue estoppel. [3] 22. Nothing has been put on this Motion to warrant the Court expressing a view about issue estoppel, but it may be an issue at the substantive hearing if the plaintiffs were minded to run the argument about the validity of the annual general meetings. I only say that in order to assist the plaintiffs and, to a lesser extent, the defendant in relation to the matters that need to be prepared for the substantive appeal. 23. The matters that have been sought to be agitated on the Motion are not appropriate matters to be dealt with on a preliminary basis. They are either matters that ought to be resolved, if at all, at the substantive hearing of the appeal from the Local Court, or resolved by NCAT; and, if they make an error of law, ultimately by this Court on appeal. 24. The Motion is dismissed except to the extent that the Summons may be amended to include an order for the costs of the proceedings. 25. The plaintiffs shall pay the defendant's costs of and incidental to the Motion. ********** Endnotes 1. Arjunan v Neighbourhood Association No DP 285853 (Supreme Court (NSW), Hamill J, 24 March 2022, unrep). 2. Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 51 (Mason J, with Barwick CJ, Gibbs, Stephen and Aickin JJ agreeing). 3. Lambidis v Commissioner of Police (1995) 37 NSWLR 320, at 331-332. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 June 2022