New South Wales Supreme Court CITATION : McAlinden v Danks & Bourke [2003] NSWSC 86 HEARING DATE(S) : 17 February 2003 JUDGMENT DATE : 3 March 2003 JURISDICTION: Common Law JUDGMENT OF : Master Harrison DECISION : (1) The order of Madgwick LCM dated 18 July 2002 is affirmed; (2) The summons is dismissed; (3) The plaintiff is to pay the defendant's costs as agreed or assessed CATCHWORDS : Appeal decision of Local Court Magistrate - rehearing refused Local Court (Civil Claims) Act 1970 (NSW) LEGISLATION CITED : Arbitration (Civil Actions) Act 1983 (NSW) Supreme Court Rules Allen v Keer & Anor (1995) Aust Torts Reports 81-354 CASES CITED : Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Ceil Comfort Insulation Pty Limited v ARM Equipment Finance Pty Limited [2001] NSWSC 619 The State of Queensland v J L HOldings Pty Limited (1997) 189 CLR 146 Colm Martin McAlinden (Plantiff) PARTIES : Pedr Danks and Craig Bourke (Defendants) FILE NUMBER(S) : SC 12161/2002 Mr M P Cleary (Plaintiff) COUNSEL : Ms F Clark (First Defendant) E Berman & Co (Plaintiff) SOLICITORS : John Byrnes & Associates (First Defendant) LOWER COURT Local Court JURISDICTION : LOWER COURT 3878/01 FILE NUMBER(S) : LOWER COURT Madgwick LCM JUDICIAL OFFICER : - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER HARRISON MONDAY, 3 MARCH 2003 12161/2002 - COLM MARTIN McALINDEN v PEDR DANKS & CRAIG BOURKE JUDGMENT (Appeal decision of Local Court Magistrate - rehearing refused) 1 MASTER: By summons filed 6 August 2002, the plaintiff seeks an order that the decision of LCM Madgwick dated 18 July 2002 dismissing the notice of motion dated 10 May 2002 with costs, be set aside and in lieu thereof seeks orders that, firstly, the time for filing and serving of an application for a rehearing of the action in proceedings 3878/01 be extended; secondly, the plaintiff file an application for rehearing within seven (7) days of the date of the order in paragraph (a); and thirdly, the costs of the plaintiff's notice of motion dated 10 May 2002 be costs in the cause. Alternatively, the plaintiff seeks that the proceedings be remitted to Madgwick LCM to be decided according to law. The plaintiff relied on his affidavit sworn 11 October 2002. 2 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the appellant/defendant. Section 69(2) of the Local Courts (Civil Claims) Act 1970 (NSW) permits a party who is dissatisfied with a judgment as being erroneous on a point of law to appeal to this court. The onus lies on the appellant to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156. 3 As Sully J stated in Ceil Comfort Insulation Pty Limited v ARM Equipment Finance Pty Limited [2001] NSWSC 619, at para 35: "The principles according to which this Court is to decide whether the learned Magistrate's discretionary decision to refuse the adjournment application did indeed miscarry are not in doubt. They are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them as follows: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." The local court proceedings 4 By statement of claim filed in June 2001 in the local court, the plaintiff Colin Martin McAlinden sought the sum of $20,494.00 from Pedr Danks and Craig Bourke for money due and owing pursuant to a lease of premises Lockup Shop D, 996 Pittwater Road, Collaroy. The lease commenced on 6 October 1999 and terminated on 5 October 2002. The rent was for the sum of $2,708.00 per month plus GST (with yearly increases). 5 On 6 March 2000, the defendants vacated the premises. They failed to pay rent from 13 March 2000. The plaintiff terminated the lease on 17 August 2000. The plaintiff sought to recover rent from 13 March 2000 until such time as the premises were re-let (apparently they were not re-let). The defendants filed a defence and cross-claimed against the plaintiff. The defendants admitted that the plaintiff terminated the lease but they alleged that the parties entered into a subsequent agreement. By cross- claim the defendants pleaded that the plaintiff wrongly refused to permit them to remove their chattels from the premises and sought damages for conversion. The items that were converted were particularised and the quantum was given at $13,462.00. 6 On 8 April 2002, the matter was referred to arbitration. The plaintiff did not attend the arbitration. On 8 April 2002, the matter proceeded in the plaintiff's absence and the arbitrator gave an award in favour of the cross- claimants in the sum of $23,548.38 inclusive of costs. 7 On 10 May 2002, the plaintiff sought a rehearing by way of notice of motion as the time to lodge a rehearing had expired by one day. On 18 July 2002, Madgwick LCM heard the rehearing application and dismissed it. The plaintiff relied upon his affidavits dated 10 May 2002 and 16 July 2002. At the hearing, the plaintiff was cross-examined. 8 The plaintiff's counsel submitted that the Magistrate did not examine the merits of the plaintiff's case nor did she ascertain whether any prejudice that the defendants suffered could have been overcome by an order for the costs thrown away by the arbitration in favour of the defendants being made. The plaintiff's counsel also submitted that the Magistrate considered irrelevant matters and did not properly consider the strength of the plaintiff's case. The defendant referred to The State of Queensland v J L Holdings Pty Limited (1997) 189 CLR 146 at 155 and Ceil Comfort. Ceil Comfort involved an application for an adjournment on the first day of a trial. 9 In Ceil Comfort, a plaintiff's solicitor had mis-diarised the hearing date and once this was discovered the solicitor wrote to the other side and offered to pay the costs thrown away by the vacation of the hearing date. However, the plaintiff had not complied with prior directions, namely the filing and service of witnesses' statements. The Magistrate refused to grant the adjournment. Sully J held at para 55 that a fair reading of the learned Magistrate's reasons indicated that he did take either wrongly or disproportionately into account extraneous matters; that he did not sufficiently define for himself the competing possible prejudices; and that he did not, therefore, perform in respect of those competing prejudices, properly defined, that balancing exercise essential to the proper putting into effect of his discretion to grant or refuse the adjournment application. 10 The relevant provision under which the local court exercised its discretion in the proceedings before me are found in the Arbitration (Civil Actions) Act 1983 (NSW) (the Act) and Part 4 r 2 of the Local Court (Civil Claims) Rules 1988. Part 4 r 2 relates to extension of time and is in similar terms to Part 2 r 3 Supreme Court Rules. The relevant section of the Act states: "18A. Order for rehearing (1) The court by which an action was referred to an arbitrator, or the registrar of that court, must order a rehearing of the action if an application for a rehearing of the action is made before the award becomes enforceable as a judgment or order of the court. (2) … (3) An order for rehearing need not be made if it appears to the court or registrar that the applicant failed to attend a hearing before an arbitrator on the action and the applicant fails to satisfy the court or registrar that there was good reason for the failure to attend the hearing. " 11 The plaintiff gave inconsistent evidence in relation to the receipt of a letter and a fax - both of which if received advised him of the arbitration date - both in affidavit evidence and during cross-examination. In cross- examination the plaintiff, having confirmed his fax number, agreed that a fax sent to his fax number was unlikely to go missing yet he had no recollection or record of receiving the fax (t 11). The plaintiff later admitted that he received the fax (t 12.33). There was also an original letter (Ex 1) by the plaintiff's former solicitor to the plaintiff dated 1 February 2002, which informed the plaintiff that his solicitor was intending to file a notice of ceasing to act. This letter also stated that the proceedings were listed for arbitration on 8 April 2002. The plaintiff admitted that he may have received that letter. He proffered an explanation that, although the letter may have been sent to him, it went to his letterbox, which is permanently locked and never used by him. The only thing "its received for is trash mail and everything else goes to my PO Box". (t 13.25-30). It would be most unlikely for the former solicitor to retain the original letter particularly with fold marks, which indicated that the letter had been placed in an envelope, on his own solicitor's file. The accompanying notice of intention to cease acting as a solicitor is similarly folded. Not surprisingly, the Magistrate stated that she had concerns as to the plaintiff's evidence in relation to the receipt two documents notifying him of the arbitration date. 12 In her reasons the Magistrate stated: "The application in this matter is before the Court in relation to a notice of motion seeking an extension of time within which to file an application for a rehearing from an arbitrator's award dated 8 April 2000. He has sworn two affidavits and given sworn evidence in support of his application. There are some facts not disputed, that the plaintiff received his file at least on 9 April. He says that he did not know about the arbitrator's award or the arbitration until he received the notice of the arbitrator's award on 8 May. There is a notice of ceasing to act on the Court file which was filed on 8 February and there is a letter on the file of Mr McCarthy dated 1 February from the defendant's solicitors addressed to Mr McCarthy advising the matter had been listed for arbitration on 8 April 2002. Now that is not disputed and that was on the file that was produced to the Court today. The plaintiff's evidence is that he never looked at the file. He also said he never received the fax, nor did he receive the letter, despite the letter's appearance of having been folded and having no marks to indicate that it had been left on the file. He sent the file at least on 9 April. If he had looked at it properly as one would expect a businessman to do, then he would have been aware of the hearing and something could have been done about it. Bearing in mind at that time he had Mr Berman acting for him in other matters. He had a solicitor, in a way, on hand. And I gather now Mr Berman has become the family solicitor. It would have been a simple matter to lodge the necessary documents. I have concerns as to the plaintiff's evidence in relation to not receiving two letters and in this matter I am going to find against the application." 13 The Magistrate was not satisfied that there was a good reason the plaintiff failed to attend the arbitration so hence she proceeded to dismiss the plaintiff's application for rehearing. The plaintiff was ordered to pay the defendants' costs. 14 It is my view that the Magistrate was, in the light of her concern about the plaintiff's evidence of not receiving two letters, not satisfied that there was a good reason for the plaintiff's failure to attend the hearing (s 18A). It was open to the Magistrate to come to this conclusion. In my view, the Magistrate has properly exercised her discretion. There is no error of law. The order of Madgwick LCM dated 18 July 2002 is affirmed. The summons is dismissed. Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. 15 The court orders: (1) The order of Madgwick LCM dated 18 July 2002 is affirmed. (2) The summons is dismissed. (3) The plaintiff is to pay the defendant's costs as agreed or assessed. ********** Last Modified: 03/05/2003 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.