Newman v Langhorn [1999] NSWSC 116

New South Wales Supreme Court CITATION : Newman v Langhorn [1999] NSWSC 116 CURRENT JURISDICTION : Administrative Law Division FILE NUMBER(S) : 30002/98 HEARING DATE(S) : 10 February 1999 JUDGMENT DATE : 10 February 1999

BARBARA LESLEY NEWMAN - Plaintiff PARTIES : JOHN EWIN LANGHORN - First Defendant KEVIN WILSON - Second Defendant KEV WILSON ENTERPRISES PTY LIMITED - Third Defendant JUDGMENT OF : Rolfe J

Plaintiff in Person COUNSEL : First Defendant in Person Ms E. Olssen - Second and Third Defendants Plaintiff in Person SOLICITORS : First Defendant in Person Snelgrove & O'Brien - Second and Third Defendants CATCHWORDS : Discontinuance by plaintiff.; Costs. ACTS CITED : Consumer Claims Tribunal Act 1987 DECISION : Application by plaintiff to discontinue. Plaintiff ordered to pay defendants' costs.

10

JUDGMENT

1 HIS HONOUR: On 12 January 1998 the plaintiff, Mrs Barbara Lesley Newman, filed a summons in the Administrative Law Division list, whereby she sought an order that the Court determine whether the Consumer Claims Tribunal has the jurisdiction to determine the issue of costs between her as the plaintiff and a builder, namely, Kev Wilson Enterprises Pty Ltd. Mrs Newman also sought an order for costs. 2 The summons did not name a defendant and this obviously raised problems for the judge administering the matter, namely Dunford J. The reason for that is that basically the Court must have before it not only the moving party but a contradicting party, and the summons of 12 January 1998, which was obviously prepared by Mrs Newman who does not have legal training, did not name a defendant. 3 When the matter came before his Honour on 3 February 1998, Mrs Newman appeared in person and there was representation on behalf of the Consumer Claims Tribunal. His Honour granted Mrs Newman leave to amend the summons generally, which she did, and she joined, as defendants, Mr Langhorn, who is the arbitrator in a pending arbitration between herself and the builder, by which phrase I mean Kevin Wilson and Kev Wilson Enterprises Pty Ltd. Mrs Newman sought an order that arbitration between herself and the builder be quashed and that Mr Langhorn and the builder be joined as defendants. 4 The matter nextly came before Dunford J on 3 March 1998, when there was no appearance by any party for reasons which, so far as I am concerned, are adequately explained in the letter from Mrs Newman to his Honour's associate, and I do not need to go into that matter any further. 5 It nextly came before his Honour on 5 May 1998 and I think it is probably in consequence of that appearance that the amended summons dated 12 May 1998 was filed. 6 The matter next came before his Honour on 9 June 1998, when Mrs Newman and Mr Langhorn appeared in person and Mr Snellgrove, solicitor, appeared for the builder. Mrs Newman was granted leave to further amend the summons, I think the purpose of that being twofold, namely, to identify the basis pursuant to which she sought to have the arbitration terminated and in the document filed on 12 June 1998, she sought to have the arbitration set aside pursuant to section 42(1) of the Commercial Arbitration Act 1984. She also sought orders that Mr Langhorn and the builder be joined as defendants and that the Consumer Claims Tribunal be joined as a defendant. 7 On 7 July 1998 the matter again came before the Court and Mrs Newman and Mr Langhorn appeared in person and Miss Olsson of counsel, who appears today for the builder, appeared on the builder's behalf. It was noted that the matter was ready to proceed on the issues formulated and the matter then came before the list Judge, Barr J, on 13 November 1998, when his Honour specially fixed it for hearing today. 8 When the matter was called on for hearing today Mrs Newman appeared in person and sought leave, which was not opposed, to file a notice of discontinuance. Mr Langhorn appeared in person and Miss Olsson appeared on behalf of the builder. The issue which has to be determined is whether Mrs Newman should pay, firstly, the costs of the builder, for which Miss Olsson seeks an order for costs. 9 Mrs Newman has made the following submissions: Firstly, she has submitted that the proceedings were instituted to determine whether the Consumer Claims Tribunal was obliged to determine certain issues. On 24 December 1997 that Tribunal wrote to Mrs Newman advising her that it had ruled that it did not have that jurisdiction and that her right to challenge that decision was conferred by section 12(2) of the Consumer Claims Tribunal Act 1987, which would require action to be initiated in this Court. A statement of brief reasons, pursuant to section 34A, was provided to Mrs Newman by letter dated 7 January 1998. 10 It is quite clear that initially Mrs Newman's intention was to seek the intervention of the Consumer Claims Tribunal in respect of the dispute, which gave rise to the arbitration. The arbitration arose out of a written contract entered into between Mrs Newman and the builder for the carrying out of certain works at premises owned by Mrs Newman at 73 Campbell Drive, Wahroonga. Mrs Newman has stated from the Bar table that the subsequent amendments to the summons were brought about in consequence of some suggestions or attempts by the Court to assist Mrs Newman in the further prosecution of her claim. Clearly, it would be necessary and the Court would require that there be a contradictor to the claim which she wished to propound and obviously a Judge of the Court administering the list, whilst not obliged, would feel some desire to ensure that the proceedings were brought forward properly. 11 I think in these circumstances it is necessary to note that on 22 May 1998 Mrs Newman filed her affidavit in support of her claim, in which she made clear, in paragraph 2, that she was seeking an order that the arbitration be quashed, and in paragraph 3 she set forth the basis on which she was seeking that order, namely, that "the arbitrator misconducted himself and was partial, biased and conducted the arbitration in breach of the rules of natural justice." Allegations of this sort, clearly enough, gave rise to the claim being identified as one pursuant to section 42(1) of the Commercial Arbitration Act 1984. Of course, this affidavit would indicate that by 22 May 1998 the issue had changed dramatically from one involving the jurisdiction of the Consumer Claims Tribunal to one where the arbitration was being attacked, and on quite serious grounds. 12 Prima facie, and I do not need to go further than to say prima facie, the appropriate defendant would have been the builder. An attack on the partiality of the arbitrator does not necessarily or, indeed in most cases, require the arbitrator to be joined as a party. In saying that I think it is also relevant to note that annexed to the affidavit of Mrs Newman was an interim award of the arbitrator, Mr Langhorn, signed on 2 February 1998, which was substantially favourable to Mrs Newman. I say substantially favourable, because I appreciate she has a complaint or had a complaint about that award, but a reading of the arbitrator's reasons indicate, if may say with respect to the arbitrator, that he directed his attention carefully to the matters in issue, to the evidence before him and to various relevant legal principles and gave an interim award which, as I have said, was substantially favourable, although not entirely favourable, to Mrs Newman. 13 I think I should add in this context that the allegation of partiality and bias was alleged to have arisen out of either the preliminary meeting, when Mrs Newman was not represented, or perhaps one other meeting after that. 14 I have dealt with these matters in some little detail because I think it is important to record the change in the nature of the litigation, not only at pleading level, but also at the level where Mrs Newman had reshaped her case to make the allegations to which I have referred. Of course, there is nothing wrong with that happening, but obviously such allegations could not have gone forward without at least the builder being a defendant to the proceedings. 15 In order to make the chronology clear, I will note that on 4 June 1998 Mr Langhorn filed an affidavit sworn by him on that day. Miss Olsson has informed me that Mr Snellgrove has sworn two affidavits; neither are on the file, although Mr Langhorn has a copy, but Mrs Newman has stated that she has not and I am informed that there is nothing on the face of the copy, which Mr Langhorn has, which would indicate that the original was filed in court. On the other hand, it is possible that that happened and that the originals have become mislaid. 16 I think I have said sufficient, subject to one matter, to enable me now to deal with the question of costs as between Mrs Newman and the builder. 17 The further matter to which I should refer is that prior to coming on to the Bench I had run through the file in the normal way and read most of the papers in it and, therefore, I have included in these reasons certain material from the affidavit of Mrs Newman, which affidavit as such was not formally read in open court. However, I do not think that any party will take any objection to that and if they do, I will deal with the objection in due course. 18 The issue I therefore have to determine, is whether Mrs Newman should pay the costs of the builder as a price of discontinuing the proceedings. As I have said, leaving aside the way in which the case was pleaded, there remained, supported by her oath, the allegation of partiality and bias, which had to be answered. That was the issue she propounded at an evidentiary and pleading level, for the determination of the Court, and that was an issue which required the builder to be joined as a defendant. 19 In those circumstances, it seems to me that the prima facie rule to which I referred Mrs Newman, and on which she has addressed me, namely, that a party who institutes proceedings and then seeks to discontinue them should pay the costs of other parties should be adhered to in the present case. I have explained to Mrs Newman that the costs of the builder will be assessed by a cost assessor, unless there can be agreement between the parties and that the costs assessor will be required to take into account at least the following matters: Firstly, the extent to which the builder has put on any evidence; secondly, when it was that the builder was given notice that Mrs Newman proposed to discontinue, and thirdly the extent to which the builder has incurred costs which are properly the subject of assessment. In making these observations I wish to make it very clear that I am not to be taken as in any way binding the costs' assessor in the proper discharge of his or her function. 20 There is a fourth matter that I should mention, and that is that Miss Olsson, who appears on behalf of the builder, agrees that Kevin Wilson and Kev Wilson Enterprises Pty Ltd should only have one set of costs because the work for the one has been work for the other. I think it appropriate that that should be expressly noted as a concession made and it is one of the bases that I have taken into account in determining that Mrs Newman should pay the costs of those parties. 21 In all the circumstances, and for the reasons I have given, I consider that in the exercise of my discretion the proper order to make is that Mrs Newman pay the costs of Kevin Wilson and Kev Wilson Enterprises Pty Ltd of these proceedings and I so order. 22 Mr Langhorn also seeks an order for costs. I do not propose to reiterate what I have said. The fact of the matter is that Mr Langhorn has appeared in person. So far as the record of the Court shows, the affidavit he filed on 4 June 1998 was obviously prepared by him in the sense that his name and address appears on the cover sheet. The extent to which, if at all, he is entitled to any legal costs will therefore have to be determined according to the principles which apply to a party who appears in person. It may well be, and I say nothing more about this, that the only amounts to which Mr Langhorn is entitled are such expenses as he may have incurred and the extent to which he is entitled to any such expenses will have to be determined appropriately. I am not disposed to make an order that Mrs Newman pay Mr Langhorn's legal costs because, as I have just said, there is nothing on the face of the record which would indicate that he has incurred any legal costs as such. 23 I will have it noted, and if I may say so I think Mr Langhorn has acted with total propriety in this respect, that he does not seek an order for any expenses such as attending court and such other matters. Mr Langhorn has told me that he has had some legal assistance in preparing his affidavit, but it may well be that he will never receive an invoice in respect of that, and I think in the circumstances that I should refuse, so that there is no doubt about matter, Mr Langhorn's application for costs and expenses, noting as I do, that he does not seek an order for his expenses in any event. 24 As between Mrs Newman and Mr Langhorn, I order that there be no order for costs or expenses of Mr Langhorn in relation to the proceedings. _________________