District Court New South Wales Medium Neutral Citation: Rainbow Holding 1 Pty Ltd t/as SOMA Collection v INKArchitects Pty Ltd t/as INKArchitects [2020] NSWDC 942 Hearing dates: 3 December 2020 Date of orders: 3 December 2020 Decision date: 03 December 2020 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) The extension under r 50.3 of the Uniform Civil Procedure Rules 2005 is not allowed. (2) The summons for leave to appeal and the appeal are dismissed. Catchwords: APPEALS — leave to appeal — appeal from Local Court to District Court – Small Claims Division - procedural fairness – lack of jurisdiction - delay in commencing appeal – 12 month-delay – lack of explanation Legislation Cited: Civil Procedure Act 2005, s 56 Local Court Act 2007, s 39 Uniform Civil Procedure Rules 2005, r 50.3 Category: Principal judgment Parties: Rainbow Holding 1 Pty Ltd trading as SOMA Collection (appellant) INKArchitects Pty Ltd trading as INKArchitects (respondent) File Number(s): 2020/00261247 Publication restriction: None Decision under appeal Court or tribunal: Local Court Jurisdiction: Civil Date of Decision: 16 September 2019 Before: Assessor E Keir File Number(s): 2019/00093652 Judgment 1. The appellant, Rainbow Holding 1 Pty Ltd trading as SOMA Collection, seeks leave to appeal from a decision of Assessor Keir given on 16 September 2019 in the Small Claims Division of the Local Court. 2. In that decision, the Assessor stated: "I find that there was a contract between the plaintiff [INKArchitects] and the defendant [Rainbow] for works, as described. The defendant terminated that contract on 5 December 2018. Work was done by the plaintiff, and he is entitled to be paid for that work. The plaintiff is entitled to moneys owed for work performed up to termination, being the sum of $8,800 plus $1,212.75, which I note is the amount of the claim. In these matters, I would also direct the plaintiff, if they have not done so, ensure that the defendant is given everything that has been done for the defendant up to the termination of the contract on the claim, the amount of $10,012.75, which is the sum of the two invoices. I will be entering verdict and judgment for the plaintiff in that sum." 1. JusticeLink records the judgment sum and interest, and also states: "The Assessor directed the plaintiff to give to the defendant everything that has been done for the defendant as at the termination of the contract". [1] 1. The Assessor gave some detailed reasons prior to making the orders. 2. Before me, both parties are represented by lay person directors of the respective companies. The respondent is INKArchitects Pty Ltd trading as INKArchitects. 3. Appeals to this Court from a decision in the Small Claims Division of the Local Court are governed by, and only available in accordance with, s 39(2) of the Local Court Act 2007. That subsection provides: "(2) A party to proceedings before the Court sitting in its Small Claims Division who is dissatisfied with a judgment or order of the Court may appeal to the District Court, but only on the ground of lack of jurisdiction or denial of procedural fairness." 1. Rainbow relies upon both of these grounds. 2. The decision of the Assessor made on 16 September 2019 was not the subject of an appeal until early in September 2020. An appeal from such a decision is also subject to the Uniform Civil Procedure Rules 2005, and r 50.3 provides that: "50.3 Time for appeal (1) A summons commencing an appeal must be filed— (a) within 28 days after the material date, or … (c) within such further time as the higher court may allow." 1. As the summons for leave to appeal was filed almost 12 months after the decision of Assessor Keir, leave is required in order for the appeal to be commenced. This is the first question before me: whether I should grant this leave and extend the period of time for an appeal. 2. The judgment is for a sum just over $10,000, which is relatively modest, although these proceedings concern an appeal from the Small Claims Division, which, in all cases, would not involve a substantial amount of money. 3. The second point is that the period of delay of one year is a substantial period. The significance of that is increased by the circumstance that there is no proper explanation or reasons given for the delay in lodging an appeal. 4. Rainbow submitted that it was waiting on the receipt of the documents referred to in the second part of the Assessor's order, thinking that perhaps an appeal might prove to be unnecessary once those documents had been provided. However, there was nothing in the Assessor's orders that indicated that the judgment was, in any way, subject to the provision of the documents. The Assessor made "the usual order.. that payment is to be made within 28 days," but specified no particular time for the provision of the documents, indicating both that the documents were intended to be provided in a reasonable time, and that there was no intention by the Assessor to link the direction about the provision of the documents to the judgment, or make the judgment conditional upon the provision of the documents. 5. Rainbow also submitted that the provision of the documents may have rendered the appeal unnecessary because if the documents were provided, then Rainbow would have what it needed, and that it may have made some forensic decision not to proceed with an appeal. However, other evidence that Rainbow has put before the Court indicates that it obtained final construction documents from another party in about February 2020. Once that event had occurred, the provision of documents by INKArchitects would not have been helpful to the progress of litigation. This reason for why an appeal was not lodged provides no satisfactory explanation for the substantial delay. 6. Other matters relevant to whether leave to appeal should be granted are prejudice, and whether the case is reasonably arguable. 7. No prejudice has been raised by INKArchitects, and since post-judgment interest is available, I accept that there is no specific prejudice. However, the principle of finality of judgments, and the interest expressed in s 56 of the Civil Procedure Act 2005 that litigation be finalised as quickly as reasonably possible means that the absence of prejudice is not an answer to a long delay in making an appeal. Parties are entitled to assume that, ordinarily, appeals will be made in the period mandated by the rules, and are entitled to conduct their affairs on that basis. 8. The merits of the case is another factor informing whether an extension of time should be granted. This requires that I consider the appeal proper. 9. There are two substantive challenges made by Rainbow. The first is that in relation to the issue of a denial of procedural fairness, Rainbow asserts that because INKArchitects did not produce the construction documents at the time of the termination of the arrangement, nor at the hearing a year later, the Assessor gave Rainbow no fair opportunity to rebut the argument of INKArchitects that 80% of the work had been done. 10. The Assessor decided in favour of INKArchitects. She had material comprising emails and invoices from INKArchitects. She explored, in the transcript, whether this was sufficient to establish that 80% of the work had been done. She also considered whether there was a lump sum contract for the provision of construction documentation, and whether Rainbow had terminated the arrangement before the provision of that documentation. Her decision was informed by a responsive email from Rainbow to an email from INKArchitects (the email including an invoice for a large component of the judgment sum) where Rainbow indicated that the invoice would be paid. There is also the evidence that Rainbow received the construction documents from another source, as mentioned above. 11. The circumstance that plans and drawings were not tendered by INKArchitects may be a matter that would weaken INKArchitects' claim, even one for a relatively modest sum, but that was a point that could have been taken by Rainbow before the Assessor, and indeed seems to have been taken. Rainbow argued that INKArchitects had not proved its case. Whilst that argument is not without some merit on the facts, it does not establish an absence of procedural fairness in the conduct of the hearing before the Assessor. The Assessor considered the emails and the invoices, evidence of the parties, and submissions, and found against Rainbow. 12. The limited right of appeal in s 39(2) does not enable this Court to substitute an alternative verdict on the evidence in the absence of procedural unfairness or a lack of jurisdiction. The absence of all the available evidence from the moving party, or even a substantial gap in the evidence of the moving party, does not establish procedural unfairness, only that the moving party might not have had a strong case. 13. The second part of the appeal, in reliance upon the "lack of jurisdiction ground", asserts that the Assessor mistakenly found that she did not have jurisdiction to stay the judgment. It is submitted that she could have stayed the judgment on the basis that either documents had not been provided in accordance with her order, or that the documents provided did not establish INKArchitects' claim. 14. I do not find this argument convincing. 15. First, that the Assessor doubted she had jurisdiction to make any order does not establish that she made an order that she lacked jurisdiction to make, so as to satisfy the requirement in s 39(2). There is no order that is said to be beyond jurisdiction. Nor do I think the Assessor was in error. It may be that the Assessor could have stayed the judgment whilst ever Rainbow asserted documents were not produced. But it remained open to her to do otherwise, especially since INKArchitects' claim had already been the subject of a favourable judgment. Rainbow retained its right to enforce the order for production of the documents. It would have been anomalous for the Assessor to stay judgment until documents established the claim, once she had found the claim established. That is why the orders do not contemplate that judgment was conditional upon the provision of documents. 16. Secondly, documents were provided by INKArchitects. There was no evidence to indicate non-compliance with the direction for provision of documents. 17. Thirdly, unless the judgment is set aside, there is no basis to stay its enforcement. 18. For these reasons, I am not satisfied that there is real merit in the appeal. It follows that each of the bases for a grant of leave is absent. 19. It may be thought unfortunate, but the limitations on an appeal imposed by s 39(2) of the Local Court Act mean that an error by a decision‑maker in the Small Claims Division can often not be corrected by an appeal. The legislature has determined that only in limited circumstances can an appeal from the Small Claims Division proceed. Those limited circumstances manifest a judgment by the Parliament involving weighing the benefits of an appeal against the cost and expense of an appeal, in a matter involving a modest sum. 20. Here the judgment sum is small, the delay in filing an appeal is substantial and unexplained, and, in my view, the appeal is not reasonably arguable given the restrictions in s 39(2) of the Local Court Act. I would not grant leave to appeal. 21. Accordingly, the orders of this Court are: 1. The extension under r 50.3 of the Uniform Civil Procedure Rules 2005 is not allowed. 2. The summons for leave to appeal and the appeal are dismissed. ********** Endnote 1. JusticeLink outcome on 16 September 2019. 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: 21 October 2022