New South Wales Supreme Court CITATION : Dust v Fekonia & Anor [2005] NSWSC 793 HEARING DATE(S) : 4 August 2005 JUDGMENT DATE : 15 August 2005 JURISDICTION : Common Law Division JUDGMENT OF : Associate Justice Malpass at 1 DECISION : The summons is dismissed; the plaintiff is to pay the costs of the summons. CATCHWORDS : Application for rehearing - plaintiff and her solicitor fail to attend arbitration hearing - failure to satisfy that there was good reason for non-attendance - court need not make an order - discretionary power and legislative intention. Arbitration (Civil Actions) Act 1983, ss18, 18A LEGISLATION CITED : Local Courts (Civil Claims) Act 1970, s69 CASES CITED : Carne v United Medical Protection Ltd [2005] NSWSC 556 Sharon Lee Dust (Plaintiff) PARTIES : Robin Fekonia & Margaret Campbell (Defendants) FILE NUMBER(S) : SC 11116/05 Mr A Porthouse (Plaintiff) COUNSEL : Mr S A Benson (Defendants) Herbert Weller (Plaintiff) SOLICITORS : Ramensky Lawyers (Defendants) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 1168/04 LOWER COURT JUDICIAL OFFICER : Burdett LCM - 9 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Associate Justice Malpass 15 August 2005 11116 of 2005 Sharon Lee Dust v Robin Fekonia & Anor JUDGMENT 1 His Honour: The defendants were the owners of a property known as 41 Regent St, Riverstone (the property). The property was leased to the plaintiff. The defendants contended that she had caused damage to the property during the tenancy. 2 On 9 June 2004, the defendants brought proceedings in the Local Court claiming damages. The proceedings were referred to arbitration. An arbitration hearing was fixed for 25 November 2004. 3 At the time, the plaintiff had instructed a solicitor (Mr Weller) to act for her and defend the claim. Neither he nor the plaintiff attended the arbitration hearing. An ex parte hearing took place before the Arbitrator (Mr Eagle). He awarded the defendants the sum of $25,119.95 plus costs. 4 On 13 December 2004, Mr Weller applied for an order under s18(2) of the Arbitration (Civil Actions) Act 1983 (the Act) for the rehearing of the proceedings. 5 On 25 February 2005, the application for rehearing came before Burdett LCM. The Magistrate did not make an order for rehearing. 6 The plaintiff has brought proceedings in this court. She now proceeds on a further amended summons filed on 18 July 2005. Her process purports to bring an appeal against the decision of the Magistrate. It alleges error of law. 7 An appeal lies from a decision of the Local Court where there has been error in point of law. The plaintiff bears the onus of satisfying the court that there has been such error and that it justifies the disturbing of the decision. 8 In this case, the plaintiff accepts that the appeal is being brought against an interlocutory order and that the appeal only lies if leave is granted pursuant to s69(2B) of the Local Courts (Civil Claims) Act 1970. 9 The appeal was heard on 4 August 2005. All parties were represented by counsel. 10 Before proceeding further, I should mention one matter that would seem to confront the plaintiff with a near-insurmountable hurdle. Whilst certain of the transcript is available, that part which is relevant to the disclosure of the Magistrate's reasoning process, is not available. It appears that the cassette used to record that part of the proceedings may have been lost. 11 The power to order a rehearing is conferred by s18A of the Act. The section contains, inter alia, the following:- 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) An order for rehearing cannot be made if the amount claimed in the action, or the value of the property to which the action relates, does not exceed the amount prescribed by the regulations for the purposes of this section. (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. 12 In the present case, it is not said that subs (2) is applicable. It seems to be common ground that the application was made as required by subs (1). It is said by the plaintiff that the Magistrate erred in the performance of the exercise required by subs (3). 13 The intention of the section seems to be that, save for what may be seen as a qualification imposed by subs (3), where application is made that satisfies subs (1), the court must order a rehearing. 14 The effect of subs (3) is that, where it appears that the applicant failed to attend the hearing before the Arbitrator and he or she fails to satisfy that there was good reason for the failure to attend the hearing, an order for rehearing need not be made. 15 The provision imposes what may be regarded as two threshold requirements. If and when these are met, there is a discretionary power to not make an order. 16 In the present case, there is no issue that the plaintiff failed to attend the hearing before the arbitrator. The disputed questions are whether or not there was good reason for the failure to attend the hearing and whether or not there was error in not making an order for a rehearing. 17 The decision of the Magistrate is consistent with the plaintiff failing to satisfy him that there was good reason for the failure to attend the hearing and it does not seem to be suggested that he was not so satisfied. If he was so satisfied, the Magistrate was empowered to not order a rehearing. 18 The court has before it the material that was placed before the Magistrate. The plaintiff was represented by her solicitor, Mr Weller. The defendants were represented by their solicitor (Mr Vahl). 19 I shall now refer to that part of the material which was regarded by the parties as being significant. It threw up conflicting evidence which was left untested because there was no cross-examination. This made the fact finding process more difficult. 20 There was an affidavit sworn by Mr Weller (it was sworn on the date of the hearing before the Magistrate, 25 February 2005). There was an affidavit sworn by Mr Vahl (it was sworn on 3 February 2005). It contained a number of annexures (including a copy facsimile dated 29 September 2004 from Mr Vahl to Mr Weller, a letter from Mr Woods to Mr Vahl dated 25 November 2004 (Mr Woods was the counsel who appeared for the defendants at the arbitration) and a copy of the notes made by the Arbitrator). 21 The affidavit sworn by Mr Weller contained the following:- 2. I believed that these proceedings were listed for Call Over on the 25th November 2004. 3. On that morning I telephoned the Solicitor for the Plaintiff for the purpose of requesting that he mention my appearance at the Call Over and obtain a mutually convenient hearing date. I was informed that he had left for Court. 4. Not long after the telephone call in paragraph 3, I spoke to Mr Harry Woods Barrister, with whom I am acquainted. He informed me that the matter was listed for an Arbitration hearing. I said: "I did not know that, nor did the Defendant. Would you have any problem with me filing a Notice of Rehearing of the Arbitrated Action". He said: "No, you can do that". The affidavit did not mention the facsimile dated 29 September 2004. It did not depose to having relied on what he deposes to as having been said by Mr Woods. It did not mention any communication had with the Arbitrator. 22 The facsimile dated 29 September 2004 advised Mr Weller, inter alia, that the matter had been fixed for hearing at Parramatta Local Court at 9.30am on 25 November 2004. 23 The letter from Mr Woods contained, inter alia, the following:- 1. I received a telephone call from Mr Weller during which he indicated that he thought the matter was listed for pre trial conference, that he had your fax advising that the matter was listed for hearing and that he would not be attending. … … … 3. The arbitrator spoke to Mr Weller and was informed by Mr Weller that he knew the matter was listed today but thought it was listed for pre trial conference. Further, in response to the arbitrators enquiry as to whether there was any reason why he should vacate the arbitration date, Mr Weller replied "No". … … … I note that because there was no appearance there is not an automatic right of rehearing and you should be vigilant to ensure that a rehearing is not granted without the matter being referred to the court for argument. 24 The notes of the Arbitrator contain, inter alia, the following:- A note on the Court file indicates that matter was set down for Arbitration at call-over at Blacktown Local Court on 17.9.2004. There is a note by M. Chamont of Blacktown Local Court that Defendant's former solicitor Mr Craig Saunders could not continue in the matter and that Mr Weller would be taking over conduct. Mr Weller asked for an adjournment for 1 to 4 weeks. The facsimile of 29.9.2004 was addressed to Mr Weller. The Plaintiff has received no response. Mr Woods of Counsel appears for the Plaintiff advised that he had telephoned Mr Weller advised him that he was aware the matter was before the Court today but did not intend to appear. I spoke with Mr Weller by telephone. He advised that he was aware that the matter was before the Court but thought it was listed for Pre-Trial Conference. I put it to Mr Weller that he could have instructed an agent to apply for the adjournment. He stated that he did not intend to instruct an agent. I asked Mr Weller if there was any reason why I should not proceed on an ex parte basis. He said "No". On the Plaintiff's application the matter proceeded ex parte. 25 This appeal rests heavily on the contents of the affidavit sworn by Mr Weller and the fact that he was not cross-examined. 26 The failure to cross-examine him may well be explicable, having regard to circumstances pertaining to the hearing that took place before the Magistrate. For present purposes, it is not a matter that needs to be explored. 27 In particular, the plaintiff places great significance on what is said to have passed between Messrs Weller and Woods concerning the matter of the filing of the notice of rehearing. It is said that what so passed either gave rise to an agreement or a representation upon which Mr Weller acted or relied and that the defendants were in some way estopped from opposing a rehearing. 28 An analysis of the material placed before the Magistrate could lead to a view that the affidavit of Mr Weller contains material that is not true. By way of illustration, it would not be easy to accept that he was of the understanding that the matter was listed for a call over or a pre-trial conference. For present purposes, I put that consideration aside. 29 Assuming that his affidavit records what passed between himself and Mr Woods on the matter, I do not accept that such version can be categorised in the manner submitted on behalf of the plaintiff. 30 The legislation entitled Mr Weller to file a notice of rehearing on behalf of his client following the arbitration. He did not require any consent from the defendants to do so. It seems to me to be absurd to suggest that Mr Woods would commit his clients to any such arrangement (it would be a matter upon which it could be expected that both consideration and instructions would be required). He was briefed to attend and to present their case at the arbitration. In these circumstances, it could be regarded as being unlikely that he would enter into some arrangement that rendered the arbitration a futility and see the costs incurred by his client in respect of the hearing thrown away. The Weller version can be more rationally construed as of the nature of inconsequential conversation. I consider that this is how it should be viewed. 31 It needs to be borne in mind that the question of whether or not there was good reason for the failure to attend the arbitration was a matter of fact for determination by the court. Any arrangement reached between the parties, to the extent that it was relevant, did not bind the court. The court itself had to be satisfied that there was good reason for the failure to attend. In addressing that task it would look to all of the relevant circumstances. 32 In my view, there were powerful considerations to lead the Magistrate to not being satisfied that there was good reason. 33 Mr Weller had to be aware that the court had referred the matter to arbitration for the purpose of resolving the dispute between the parties. He should have been aware that such arbitration was fixed for hearing on 25 November 2004. He was aware, at least prior to the commencement of the hearing, that an arbitration had been fixed for hearing later on that day. 34 Mr Weller did not intend to make an attendance at the court on 25 November 2004. This is clear from his affidavit and the other material. He later came to take other steps consistent with that stance. He told the Arbitrator that he did not intend to instruct an agent to appear and/or to apply for an adjournment. He was unable to give the Arbitrator any reason why the arbitration should not proceed ex parte (surprisingly, he did not mention to the Arbitrator that he had made any arrangement with Mr Woods). He had to be aware that the matter may proceed ex parte. Rather than seek an adjournment or make arrangements for an appearance by or on behalf of his client, he took the course which he hoped would abort the arbitration. 35 For completeness, I should add that although the plaintiff has sworn an affidavit in support of the rehearing application, there is nothing in it to suggest that Mr Weller was acting otherwise than on instructions. 36 In my view, the plaintiff faced a very difficult task in satisfying the Magistrate that there was good reason for failure to attend the arbitration. Not surprisingly, she failed to do so. In the making of the decision, the Magistrate was engaged in a fact-finding exercise and I see no error in the performance of that exercise. 37 In the circumstances, the Magistrate was not required to order a rehearing. The reasoning process that led him to the decision to not make such an order is not before the court. However, having regard to the material before him and what has been put in argument (including the contentious matter of the plaintiff having a defence to the claim), I am not satisfied that any error has been shown in the making of the decision not to order a rehearing. 38 Again, there were powerful reasons that could have led the Magistrate to this decision. 39 The court had provided an arbitration process to resolve the dispute. The plaintiff chose, for no good reason, to not participate in that process. Instead, a course was taken which was intended to render it futile. If successful, it would see costs incurred by the defendants in respect of the hearing thrown away (in the order of $5,000). No offer to meet those costs was made in this court (or, presumably, before the Magistrate). 40 The Act manifests an intention that it is not necessary for the court to order a rehearing where the applicant is given the opportunity to have a dispute resolved by arbitration and without good reason does not participate in the process. Hearing time is valuable and the court has to have regard to the other litigants and the public interest. 41 In the present case, further obstacles confront the plaintiff. She also had to satisfy the court that leave should be granted to bring the appeal. I am not satisfied that a case has been made out for the granting of leave (see Carne v United Medical Protection Ltd [2005] NSWSC 556 ). 42 The appeal fails. The summons is dismissed. The plaintiff is to pay the costs of the summons. ********** 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.