New South Wales Court of Appeal CITATION : GRYGIELv BAINE & ORS [2004] NSWCA 377 HEARING DATE(S) : 11 October 2004 JUDGMENT DATE : 12 October 2004 JUDGMENT OF : Mason P at 1 DECISION : Application dismissed with costs CATCHWORDS : Review of Registrar's decision - whether appeal incompetent - whether relevant decision was interlocutory - appeal from decision rejecting appeal to Supreme Court from Consumer, Trader & Tenancy Tribunal rejecting pleading amendment - whether appeal concerns a value of $100,000 or more - practice when competency challenged and appellant wishes to seek leave in the alternative. (D) PARTIES : Christopher Andrew GRYGIEL Anthony BAINE & ORS FILE NUMBER(S) : CA 40373/04 Claimant: J Simpkins SC COUNSEL : 1 & 3 Opponents: R Colquhoun 2 Opponent: E M Davies Claimant: The Builders Lawyer SOLICITORS : 1 & 3 Opponents: Massey Bailey 2 Opponent: Pricewaterhouse Coopers Legal LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT SC 30088/03 FILE NUMBER(S) : LOWER COURT Master Malpass JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40373/04 MASON P Tuesday 12 October 2004 Christopher Andrew GRYGIEL v Anthony BAINE & Ors JUDGMENT 1 HIS HONOUR: This is a motion to review a decision of Registrar Schell dismissing an appeal as incompetent. The appeal was filed by the claimant Mr Grygiel, who is a builder. The appeal was from the order of Master Malpass dismissing with costs the claimant's summons filed in the Common Law Division Administrative Law List. 2 The defendants to the summons that was dismissed by the Master were: - first defendant, the husband of the second defendant, a member of the firm of Carroll & O'Dea, solicitors, and an alleged party to the building contract with the claimant; - second defendant, the owner of the Vaucluse house at which building work was performed and an alleged party to the building contract. The first and second defendants together are the first opponents in the present motion and shall hereafter be referred to as the proprietors; - third defendant, Albion Design and Construction Pty Limited, the second opponent in the present motion. This company (hereafter referred to as the architect) was involved in design work for the Vaucluse job; - fourth defendant, Blakemore Electrical Services Pty Limited: this company is not involved in the motion; -- fifth defendant, the members of the firm of Carroll & O'Dea, solicitors (hereafter the solicitors). These persons are collectively the third opponent in the motion; - sixth defendant, the Consumer, Trader and Tenancy Tribunal (hereafter the Tribunal). 3 According to the allegations in the further amended statement of claim that the claimant wishes to file in the Tribunal, the claimant did building work for the proprietors on a "do and charge" basis and pursuant to an oral contract. A building dispute left the claimant claiming unpaid progress payments and damages as on a repudiation of contract. The proprietors were claiming that the work was defective, in consequence of which they had overpaid the claimant and/or had a claim for damages against him. 4 The claimant made a monetary claim in the Tribunal against the proprietors. He sought to recover $39,739, either pursuant to a contractually-based progress claim or as reasonable remuneration. By their response or defence in the Tribunal the proprietors invoked s92 of the Home Building Act 1989 (that requires home warranty insurance to be obtained), pleaded a defence under s 10 of that Act based on the absence of a written contract, asserted a right to set off by reason of incomplete or defective works and otherwise denied the claimed entitlement. By a cross claim filed in the Tribunal the proprietors alleged that the claimant or alternatively Eastermead Pty Limited had entered into the building contract, had negligently, fraudulently or misleadingly misrepresented certain matters and had breached various terms of the building contract. Eastermead Pty Limited is owned and controlled by the claimant. The proprietors' cross claim is supported by a Scott Schedule claiming $121,752 made up by a claim for $34,315 for defects and $87,437 for overcharging. 5 The claimant applied for various orders in the Tribunal. The hearing of that application took three days and the summons to the Common Law Division sought to challenge the Tribunal's refusal to grant the orders sought. The orders sought in the Tribunal that are still pressed were as follows. 6 First, the claimant sought to join Eastermead Pty Limited as a co-applicant so that the various claims by the claimant either in contract or the claims hereafter referred to could be pleaded in the alternative by the company. The application was prompted by the proprietors having joined the company in the alternative to the claimant in the above-mentioned cross-claim in the Tribunal. The claimant maintains that he is the proper contracting party. According to pars 10 to 12 of the Master's reasons the proprietors now share this view. Why the matter is still being pressed is completely unclear. 7 Secondly, the claimant sought to bring additional claims in the Tribunal against the architect and the solicitors. These were the claims which the Tribunal held were outside its jurisdiction. 8 The architect had provided drawings to the proprietors. Its retainer by them was terminated before the claimant was engaged to do the building work. The claimant nevertheless claims that the architect owed him a duty of care that was breached. Alternatively, he seeks contribution under the Law Reform (Miscellaneous Provisions) Act 1946. 9 As indicated above, the claimant's failure to have taken out home owners warranty insurance is pleaded by the proprietors as a defence to the claimant's claim in the Tribunal. The claimant asserts that he did not take out insurance because of advice given to him by the solicitors either directly or via the proprietors. I infer that the agent who allegedly gave this advice was the first respondent, Mr Baine. The Tribunal refused leave to join Eastermead Pty Limited for a variety of reasons including findings of fact to the effect that the company was not a party to the building contract. It is therefore far from clear how a challenge to this ruling could possibly attract the Supreme Court's appellate jurisdiction which, as indicated below, is limited to questions with respect to matters of law. 10 The applications to join the architects and the solicitors were rejected by the Tribunal on jurisdictional grounds. Its only relevant jurisdiction arises under the Home Building Act and the Consumer Claims Act 1998. The Tribunal followed earlier Supreme Court decisions in holding that for jurisdiction in a matter with the monetary sum involved the claim must be in respect of physical construction or alteration of a dwelling. 11 Section 67 of the Consumer Trader and Tenancy Tribunal Act 2001 provides: 67 Appeal against decision of Tribunal with respect to matter of law (1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the Supreme Court against the decision. (2) An appeal is to be made in accordance with the rules of the Supreme Court. The rules of the Supreme Court may provide that an appeal (or such classes of appeal as may be specified in the rules) may be made only with the leave of the Court. (3) After deciding the question the subject of such an appeal, the Supreme Court may, unless it affirms the decision of the Tribunal on the question: (a) make such order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or (b) remit its decision on the question to the Tribunal and order a rehearing of the proceedings by the Tribunal. (4) If such a rehearing is held, the Tribunal is not to proceed in a manner, or make an order or a decision, that is inconsistent with the decision of the Supreme Court remitted to the Tribunal. (5) If a party has appealed to the Supreme Court against a decision of the Tribunal on a question with respect to a matter of law, either the Tribunal or the Supreme Court may suspend, until the appeal is determined, the operation of any order or decision made in respect of the proceedings. (6) If the Tribunal suspends the operation of an order or a decision, the Tribunal or the Supreme Court may terminate the suspension or, where the Supreme Court has suspended the operation of an order or a decision, the Supreme Court may terminate the suspension. (7) If a rehearing is held, fresh evidence, or evidence in addition to or in substitution for the evidence on which the original decision was made, may be given on the rehearing. (8) A reference in this section to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal (9) The regulations may exclude the making of an appeal under this section in such classes or description of cases as may be prescribed. 12 This was the jurisdiction invoked by the claimant by way of appeal to the Supreme Court. There was no invocation of the prerogative jurisdiction of the Supreme Court. In so observing, I am not implying any view on that matter (in fact see s 65 of the Consumer Trader and Tenancy Tribunal Act 2001). 13 Master Malpass dismissed the summons on various grounds. The claimant filed a notice of appeal with appointment asserting that the Master erred in various respects. The orders sought in that notice of appeal are: 1. That the appeal be allowed. 2. That the order of Master Malpass dismissing the summons be set aside. 3. That the orders of the Tribunal made on 29 August 2003 in paragraphs 1.7, 4.12 and 7.2 be set aside. 4. That in lieu thereof the appellant be granted leave to join the company, the architect and the solicitors to the proceedings before the Tribunal and to file a further amended statement of claim incorporating such claims. 5. That the costs orders consequential upon the dismissal of the summons by Master Malpass and of the Tribunal in respect of the motion for joinder and amendment be set aside. 6. That the respondents pay the cost of this appeal, of the Court below and of the proceedings before the Tribunal in respect of the motion for joinder and amendment. 14 This appeal was supported by an affidavit under part 51 rule 8. In July 2004 motions to dismiss the appeal as incompetent were filed by each of the proprietors, the solicitors and the architects. 15 The appeal was dismissed as incompetent by Registrar Schell on 19 July 2004, this is the order now under review. 16 The Registrar held that leave to appeal was required because of s 101(2)(e) of the Supreme Court Act and because in any event the rule 8 affidavit was inadequate because it deposed to the "potential" as distinct from the real or actual impact of the appeal. The Registrar held that s 101(2)(e) was applicable because the decisions of the Tribunal and the Master were interlocutory. The effect of their orders is to exclude various parties from the Tribunal proceedings, but they do not finally determine the rights between the existing parties in the Tribunal. Hall v Nominal Defendant (1966) 117 CLR 423 was cited. 17 Before me, the claimant challenged this reasoning. His counsel Mr Simpkins SC accepts that the order in the Tribunal was interlocutory in nature, but he contends that this is irrelevant because it is the order in the Supreme Court that is under appeal in this Court. The Master's order is said to have finally disposed of the claim in the Supreme Court. The claimant cited A-pak Plastics Pty Limited v Merhone Pty Limtied (1995) 17 ACSR 176. 18 In my view, a close reading of A-pak and its discussion of the earlier authorities of Becker v City of Marianne Corporation [1977] AC 271 and A Hudson Pty Limited v Legal and General Life of Australia Limited [1985] 1 NSWLR 701 do not assist the claimant. The passages relied upon show that a separate issue at first instance can be litigated to finality even though other distinct issues remain to be determined. In this sense, one needs to decide whether the relevant judgment finally determines the rights of the parties in the substantive dispute or lis chosen by them. 19 But it does not follow that every application in protracted litigation is of that nature. A dispute about particulars is interlocutory and it remains so even if severed off and taken on appeal. In Hall v Nominal Defendant Windeyer J said at 443: In most cases the test that seems to be most satisfactory and the one that accords most nearly with what has been said on the subject in this Court is it seems to me to look at the consequences of the order itself and to ask does it finally determine the rights of the parties in a principal cause pending between them. It is never enough to ask simply does the order finally determine the actual application or matter out of which it arises because, subject to the possibility of an appeal, every order does that unless it be an order that is expressly declared to be subject to variation. 20 I emphasise Windeyer J's reference to "a principal cause pending between them". 21 An order by an intermediate appellate Court will be interlocutory if the nature of the relief granted or refused by that Court is interlocutory according to these tests. Thus, in Carr v Finance Corporation of Australia Limited (1981) 147 CLR 246 the High Court allowed an objection to the competency of an appeal from this Court to the High Court. This Court's order dismissed an appeal against a Master's refusal to set aside a default judgment, itself an interlocutory order. Under s35 of the Judiciary Act 1903 (Cth) as it then stood there was an appeal as of right to the High Court from an order of the Court of Appeal, but an appeal only by leave if the appeal to the High Court was from an interlocutory judgment. The decision in Carr was that the Court of Appeal's order was an interlocutory judgment. 22 This reasoning is in my view capable of application to the interpretation of s101(2)(e) of the Supreme Court Act. That provision stipulates that an appeal shall not lie to the Court of Appeal except by leave of the Court of Appeal from an interlocutory judgment or order in proceedings in the Court. The Master's judgment or order was in my view "an interlocutory judgment or order in proceedings in the [Supreme] Court" even though it was a decision disposing of an appeal to the Supreme Court from the Tribunal. 23 I would therefore reject the first arm of the claimant's challenge to the reasoning of the Registrar. 24 If, contrary to this view, the claimant were correct and if the Master's judgment is to be regarded as a final one, the claimant would in my view then be impaled upon s101(2)(r). That provides that an appeal shall not lie to the Court of Appeal except by leave of the Court of Appeal (r) a final judgment or order in proceedings of the Court, other than an appeal: (i) that involves a matter at issue amounting to or of the value of $100,000 or more, or (ii) that involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more. 25 The claimant has not demonstrated that this appeal satisfies either arm of paragraph (r). Mr Simpkins relies upon subparagraph (ii) and supports the reasoning set out in the rule 8 affidavit of Mr J F C Cheung sworn 22 June 2004. The claimant points to the cross claim in the Tribunal and its associated Scott Schedule, that shows, as I have indicated, that the proprietors are suing the claimant for $121,752 comprising $34,315 for defects and $87,437 for overcharging. Next, the claimant states his intention to claim indemnity against the proprietors, the architects and the solicitors should the proprietors be successful in establishing the cross claim against the claimant. 26 The notion of an indemnity directly against the party whose claim triggers the indemnity is incomprehensible to me. I do not understand how the claimant could possibly have a basis for seeking indemnity against the proprietors with respect to the proprietors' claim against the claimant. More to the point, I can see no basis upon which success in the appeal to this Court would give rise to any such claim. If the proprietors or either of them have a good cross claim against the claimant in the Tribunal, the issues raised in the notice of appeal will not change or detract from that, even if the claimant's company became a joint applicant in the Tribunal. 27 The claim foreshadowed against the architect in the proposed further amended statement of claim in the Tribunal is for indemnity or alternatively statutory contribution in respect of the alleged defective work performed by the claimant in respect of which the proprietors seek damages. The only evidence as to the value of this allegedly defective work is the Scott Schedule which shows defects valued at $34,315. 28 The foreshadowed claim against the solicitor stems from the claim that the proprietor, Mr Baine, who is a member of the solicitors' firm, gave negligent legal advice that led to the building contract not being in writing and to the claimant not taking out home owners warranty insurance. Because the claimant acted as he did, his conduct enabled the proprietors to set up the defences under the Home Building Act that are pleaded in their response or defence and/or their cross claim in the Tribunal. The claimant seeks indemnity and/or damages from the solicitor if and to the extent that the proprietors succeed in these defences. There is no quantification of the claim against the solicitors. The proposed amended pleading merely speaks about indemnity with respect to the effect of the proprietors succeeding in their defences raised under the Home Building Act and to the costs of "the present litigation" which would have been avoided otherwise. 29 Mr Cheung's affidavit does not attempt to put a figure on these items of the claimant's alleged loss. It is to be remembered that the sum claimed in the Tribunal by the claimant from the proprietors is $39,739. None of the $87,434 claimed in the Scott Schedule by the proprietors on the basis of overcharging by the builder appears to relate to any problems stemming from the defences raised under the Home Building Act that are said to stem in turn from the negligent legal advice. 30 The basis upon which the claimant seeks to justify the competency of his appeal monetarily speaking shows that he and his lawyers have misconceived the impact of s 101(2)(r). That paragraph enacts a blanket prohibition on appeals from final judgments or orders in the Supreme Court, subject to a gateway. The gateway requires the appellant to demonstrate that the appeal as distinct from the underlying proceedings has a particular character with a particular minimum financial impact. See generally Gillard v Hunter Wire Products Pty Limited t/as Hunter Screen Products No 2 [2001] NSWCA 450. 31 Mr Cheung's rule 8 affidavit avers the loss of the right to claim indemnity against the proprietors, the architect and the solicitor as the matter at issue in the appeal. It asserts that such an indemnity claim totals $121,752 with respect to a "potential cross claim" made up of $34,315 for defects and $87,437 for overcharging, these being the claims made by the proprietors against the claimant for which the claimant seeks indemnity. 32 $121,752 may be the bottom line in the proprietors' cross claim as fleshed out in the Scott Schedule. But the proprietors capacity to press that claim in the Tribunal and the claimant's potential exposure to that claim are unaffected by the issues sought to be raised by the amendments sought in the Tribunal and the summons that the Master dismissed. If the Tribunal erred in law in rejecting the amendments and if the amended claims sought to be pressed by the claimant in the Tribunal succeeded in their entirety, the claimant would not be better off by $121,752 or anything approaching $100,000. The potential claim against the architect would net only an indemnity worth $34,315. The value of the potential claim against the solicitor is unknown but it certainly bears no relationship to the proprietors' claims against the claimant in their cross claim in the Tribunal. 33 The Master was therefore correct to dismiss the appeal as incompetent in so far as it depended on the rule 8 affidavit. That of course assumes that one is dealing with an appeal with reference to a final judgment and which one is not, for the reasons I have already given. The application to review his order should therefore be refused with costs. 34 Before disposing of the matter I wish to venture some additional remarks stemming from my concern that this hapless claimant seems to be being drawn (presumably on legal advice) from one costly forensic adventure into another. 35 I observe that on 16 August 2004, that is well after the Registrar had heard and disposed of the challenge to the competency of the appeal, the claimant filed a summons for leave to appeal against the orders of the Master. That summons is returnable on 18 October 2004 for directions. The separation of that application from the challenge to competency first raised by the respondents in early 2004 should not have occurred. In Woollahra Municipal Council v Sved NSWCA unrep, 24 July 1998 this Court pointed out that if an appellant is faced with a formal objection to the competency of its appeal and nevertheless intends to seek leave to appeal, the application for leave should be made before the hearing of the contested competency application. The reason for that is to enable the Court to decide to list the competency challenge and the leave application concurrently, with the possibility that the competency issue would fall away if the leave were to be granted or vice versa. The decision is noted in Ritchie's Supreme Court Practice at par [51.25.1]. Regrettably this did not occur in the present case. I was persuaded to embark on the hearing of the present application because the parties turned up ready to argue it and because it seemed to me that the competency issue if pressed by the claimant, would have to be decided if only because of its costs implications. 36 I would urge the claimant and his legal advisers to step back, take stock, and consider whether it is really necessary to prosecute the application for leave to appeal, at least at this stage. In doing this, I am not concerned merely from the claimant's point of view. Unless limitation issues have intervened and/or are unable to be accommodated by agreement between the parties, I question whether the claimant needs to press his indemnity claims against the architect and the solicitors before he sees the fate of his substantive proceedings in the Tribunal. The Tribunal is not bound by the strict rules of evidence or law. (see ss 3 and 28 of the Consumer Trader and Tenancy Tribunal Act 2001). Is it clear, I ask, that the true merits of the position as between the lay claimant and the proprietors cannot be addressed in the presently constituted proceedings in the Tribunal? One of the proprietors is the lawyer through whom, as I perceive it, the legal advice was allegedly given that forms the basis of the proposed claim against the proprietor's firm of solicitors. If advice from the proprietor who was a lawyer led the claimant to enter into an oral contract or to fail to take out warranty insurance, is it clear that that issue is outside the proper resolution of the presently constituted proceedings? Is it clear also, I ask, that resort to the asserted claim against the architect will be necessary in all of the circumstances? Will anything be lost if those matters are not kept in reserve pending the determination of the substantial issues in the Tribunal? 37 I emphasise that I am only asking questions. I am not seized of all of the issues and clearly the parties will have to take their own advice on the issues. I do however remind all parties and their legal advisers of the overriding purpose of the Supreme Court rules as set out in Part 1 thereof. 38 Finally, before I leave my admonitory mode, I draw to the attention of the claimant's solicitors the fact that the currently filed white books in the leave proceedings have neither dividers or an index. They will not be appealing to any Court that is faced with determining a question of leave if that matter proceeds. 39 For these reasons I make the following orders. The application is dismissed with costs. ********** Last Modified: 10/25/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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