DUBOW v FITNESS FIRST AUSTRALIA PTY LTD [2007] NSWSC 935

New South Wales Supreme Court

CITATION : DUBOW v FITNESS FIRST AUSTRALIA PTY LTD [2007] NSWSC 935 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 31.10.06, 1.11.06, 20.11.06

JUDGMENT DATE : 24 August 2007

JUDGMENT OF : Hulme J at 1

DECISION : Orders deferred

Yolande Dubow PARTIES : Fitness First Australia Pty Limited Consumer Trader and Tenancy Tribunal

FILE NUMBER(S) : SC 30095/2005

COUNSEL : Dr M Perry QC (Plaintiff) Ms P Thew (1 & 2 Defendants)

P: Gillard Consulting Lawyers SOLICITORS : D1: Kent Attorneys D2: IV Knight Crown Solicitor

LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW

LOWER COURT JUDICIAL OFFICER : Ms Borsody

- 25 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

HULME J 30095/2005 Friday, 24 August 2007

Yolande DUBOW v FITNESS FIRST AUSTRALIA PTY LIMITED AND THE CONSUMER TRADER TENANCY AND TRIBUNAL

JUDGMENT 1 HIS HONOUR: In July 2004 the Plaintiff instituted proceedings in the General Division of the Consumer Trader and Tenancy Tribunal (hereinafter referred to as the CTTT) against the First Defendant, Fitness First Australia Pty Limited (hereinafter referred to as "FFA"). 2 In August 2004 one or more – a topic to which I shall return – orders were made in the Tribunal giving leave to FFA to be represented by a Solicitor. 3 On 1 and 2 March 2005 the proceedings were heard. At the conclusion of the Plaintiff's case there was a submission of no case to answer but before that submission was ruled upon, the Plaintiff withdrew her application to the CTTT as Section 28(5)(viii) of the CTTT Act 2001 permitted her to do. 4 FFA sought an order for costs. Written submissions were provided and on 5 May 2005 a member of the Tribunal, Ms Borsody, ordered that the Plaintiff pay 75% of FFA's costs. Reasons were provided and to these I shall also return. 5 On 29 September 2005 the Plaintiff instituted these proceedings against FFA and the CTTT seeking the following orders:- (i) Leave to appeal the decision of member Borsody of CTTT dated 5 May 1005. (ii) A stay of the costs decision. (iii) An order on the nature of certiorari setting aside the decision of the CTTT allowing legal representation for the First Defendant. (iv) Such further and other order as the Court deems appropriate. 6 Insofar as in her Summons the Plaintiff sought to appeal, the Summons was well outside the 28 days from the date of the decision limited by UCPR 50.3 for the time to appeal. Of course, insofar as prerogative relief was being sought, there is no particular time limit. The Summons contained no prayer for an extension of time although there was filed with it, and presumably served, an affidavit entitled "Affidavit as to Delay". 7 On 18 October 2005 the Tribunal filed an Appearance submitting to "the making of all orders that have been sought, and the giving and entering of judgment in respect of all of the claims that have been made, save as to costs." 8 On 27 October 2005 the Plaintiff filed an Amended Summons seeking orders to the effect:- (i) That the time for filing "this Summons" be extended to 5pm, 29 September 2005. (ii) An order that member Borsody of the CTTT erred in her decision and order made on 5 May 2005. (iii) A declaration that the Plaintiff was denied natural justice in relation to the decision and order… made on 5 May 2005. (iv) An order that the decision and order… made on 5 May 2005... as to costs be set aside. (v) In the alternative… an order that the matter be remitted to the CTTT for a hearing as to costs de novo. (vi) An order that the decision and order of the CTTT made on 23 August 2004 granting leave for the First Defendant to be represented by a solicitor be set aside. (vii) In the alternative to the orders sought at paragraphs (iv), (v) and (vi), an order that the costs of the Defendant be limited to $10,000. (viii) An order that the registration and enforcement of the order… made on 5 May 2005 be stayed pending further order of this Court. (ix) The Defendant pay the Plaintiff's costs of the proceedings. (x) Such further and other order as the Court deems fit. 9 By reference to a number of affidavits the Amended Summons contained an identification of the grounds relied upon for an extension of time and some of the grounds relied on in support of the contention that the decision and order of 5 May were erroneous. Other grounds for the latter contention were specified in the Amended Summons and were to the effect:- (i) That the order of 5 May was "ultra vires" having been made after the withdrawal of the proceedings by the Plaintiff. (ii) Ms Borsody misdirected herself in applying the test of "special circumstances" rather than the test of exceptional circumstances set out in Regulation 20(3)(a) of the CTTT regulations. (iii) Ms Borsody erred in adopting the perceptions of the Defendant as to the need to call 13 or 14 witnesses. (iv) Ms Borsody erred in finding that the Plaintiffs' requirement to have those witnesses available for cross-examination justified the making of a costs order. (v) Ms Borsody erred in finding the Plaintiffs' withdrawal of the proceedings justified the making of a costs order. (vi) Ms Borsody erred in failing to consider FFA's repeated breach of directions. (vii) Ms Borsody erred by making a finding as to costs contrary to the weight of evidence. (viii) The Plaintiff was denied natural justice in relation to the order of 5 May in that the Defendant failed to serve its submissions on the Plaintiff prior to the making of the order "and in breach of the directions therefore". (ix) The Defendant made a representation to the Tribunal on 2 March 2005 to the effect that its costs were "nowhere near the amount claimed by the (Plaintiff)." 10 Grounds of the application or appeal evident in the affidavits included statements to the effect :- (i) That at the time of the institution of proceedings in the CTTT the Plaintiff was employed in the Supreme Court but did not hold a practising certificate; (ii) That when leave was given to FFA to have legal representation, none of the requirements for legal representation was met; (iii) The stated basis for the costs order was the existence of "special circumstances, rather than "exceptional circumstances" as required by the regulations. 11 On 12 May 2005 Mr Gillard, the solicitor for the Plaintiff, provided to the Court a "Statement of Facts and Contentions" and served a copy of that on the Solicitors for the FFA. The "Statement of Facts and Contentions" does not in fact bear any notation that it was filed and the evidence bearing on the conclusion expressed in the first sentence of this paragraph is by no means as satisfactory as it might be and is not all one way. Nevertheless Mr Gillard gave evidence on the topic and I accept what he said. His evidence derives some support from the fact that on 12 May there was no order made, as there had been on some occasions previously, for the service of such a Statement. I accept also the evidence of Mr Orlizki, the solicitor for FFA, to the effect that at the time of preparation of the case for trial he was not conscious of having, or of having received, such a Statement of Facts and Contentions and no such document was in his file. 12 It is not necessary that I attempt to summarise the contents of that document. To an appreciable extent it reiterates the issues reflected in earlier documents the Plaintiff had served although it also raises a number of matters the sole relevance of which relates to the merits of the issue whether an order for costs should or should not have been made. 13 When the matter came before me for hearing on 31 October last, senior counsel appearing for the Plaintiff sought to file and rely upon a Further Amended Summons, a copy of which had been provided to the Defendant 11 days earlier. In that document the orders the Plaintiff claimed included:- (i) An extension of time up to 29 September 2005. (ii) That the order of the CTTT made on 5 May 2005 as to costs is invalid. (iii) An order under s65(3) and/or s67 of the CTTT Act that the order as to costs made on 5 May 2005 be set aside. (iv) A declaration under s65(3) and/or s67 of the CTTT Act that the CTTT had no jurisdiction to make an order for costs against the Plaintiff in the proceedings. (v) … (vi) An order under s67(3) of the CTTT Act that the question of costs be remitted to the CTTT for rehearing according to law. (vii) That a determination of costs made by the Review Panel on 9 March 2006, affirming the assessment of costs by the Costs Assessor John Hope Gibson, issued on 30 October 2005, be set aside. (viii) An order pursuant to s67(5) of the CTTT Act that the order made on 5 May 2005 be stayed pending the final determination of these proceedings. 14 The grounds relied on included the contentions that the CTTT acted beyond its jurisdiction and/or made an error of law in that:- (i) the order giving the First Defendant leave to be legally represented had been made:- (a) Despite a failure to comply with Regulation 13(iv) of the Regulations requiring the Plaintiff be given an opportunity to make submissions in respect of the application; and/or (b) On a ground not permitted by Regulation 14 of the Regulations. (ii) These failures to comply with Regulation 13(4) and Regulation 14 were not mere irregularities for the purposes of Section 32 of the Act and the Tribunal erred in so treating them. (iii) The Tribunal failed to determine whether there were "exceptional circumstances that warranted the awarding of costs". (iv) The Tribunal erred in concluding that the Plaintiff's mode of conduct of the hearing was a "special circumstance" for the purposes of Regulation 20(3)(a) of the Regulations. (v) The circumstances upon which the Tribunal relied in making the costs order were not capable of constituting "exceptional circumstances" for the purposes of Regulation 20(3)(a) of the Regulations. 15 The filing of the Further Amended Summons was opposed, as was the Plaintiff's application for an extension of time. 16 Given the nature of the issues which arose, I took the view that the answer to both of those questions should be deferred pending a hearing on at least the principal issues which the Plaintiff sought to canvass and that occurred. The conclusion at which I have arrived is that both of these applications should be granted albeit the application to extend time only on terms. 17 Relevant in this connection is that counsel for the Defendant advanced no reason of substance suggesting that the Further Amended Summons created any prejudice. Particularly relevant also is the fact that, although to the extent to which the proceedings constitute an appeal against a decision of the Tribunal, they are subject to the 28 day time limit imposed by UCP Rule 50.3, the Plaintiff at the time of filing the original Summons filed an affidavit expressly directing attention to the topic of delay; that Summons sought prerogative relief; there are reasonable grounds for seeking such relief; and in respect of such relief there is no such time limitation. 18 Of course in that prerogative relief is discretionary questions of delay are relevant but the circumstances are not such as would incline me to simply refuse relief on that ground. 19 In this connection I am also influenced by what I see as the number, nature, and extent of errors made by the Tribunal and by the fact that, between 5 May 2005 when the challenged order for costs was made and 29 September when proceedings in this Court were commenced, the Plaintiff took steps, albeit inappropriate, to challenge and have reviewed the decision of 5 May. 20 I am of course not unconscious that FFA incurred costs both before and after 29 September. An affidavit by the solicitor for FFA reveals that, inter alia:- (i) On 5 September 2005 an application for assessment of party/party costs was filed in this court. It extended to something of the order of 50 pages, many of which appear from their nature to be photocopies of other documents but the bill and its explanation extended to about 19 pages; (ii) On 18 September 2005 a letter from the costs assessor asking for copies of accounts and for submissions was received; (iii) On 21 September 2005 the Plaintiff wrote indicating objections in relation to various items and the application for assessment; (iv) On 17 October 2005 the solicitors for FFA wrote to the costs assessor making submissions, providing documents he had requested, making a number of assertions and providing other documents. The submissions and assertions extended to some 6 pages, the total to about 155 pages; (v) On 30 October 2005, the costs assessor made his determination in the amount of $14,067.70. On the same day he also issues an assessment of his own costs in an amount of $2,213.75; (vi) On 15 or 28 November 2005 the Plaintiff made application for review of the assessment; and (vii) On 9 March 2006, the Costs Review Panel affirmed the decision of the costs assessor and made an order for its own costs. FFA paid some $900 to obtain Certificates as to these matters (viii) On 6 June 2006, the Certificates were registered as judgments in the Local Court. 21 The Defendant also relies on failures on the part of the Plaintiff to comply with the time limits in various directions made during the course of these proceedings, including directions to file and serve a Summary of Facts and Contentions. In this connection it is clear that directions made on 14 December 2005, 15 February and 15 March 2006 were not complied with and that the same can be said of a direction made on 12 May for service of the transcript of proceedings in the CTTT. It may be that there is at least some reasonable excuse for this last mentioned default. 22 However, nothing was put before me to indicate that the Defendant has been significantly prejudiced in any way that cannot be compensated for by an order for costs or the imposition of conditions on the extension of time. During the hearing I raised with counsel for the Plaintiff that this might be my approach. Counsel submitted that I should not impose such terms but indicated the Plaintiff preferred the imposition of a condition rather than the refusal of an extension of time. The condition suggested was one of:- "The Plaintiff paying the costs of the application for the assessment of costs insofar as they were incurred after the expiry of the 28 day period within which (the Plaintiff) could have instituted proceedings as of right and prior to 29 September 2005 when these proceedings were instituted with such costs being agreed or taxed." 23 The details of the term suggested meet the justice of the case. Costs incurred on the First Defendant's behalf either before or after the period suggested were incurred with notice of the risks of an application or appeal such as this. I would also add that at least some errors in the reasons of 5 May must have been obvious to the First Defendant's legal advisers and that the affidavit as to delay must have put those advisers on notice that the mere fact the summons was filed out of time would not necessarily be fatal to the Plaintiff's success. 24 Given the Plaintiff's acceptance of the term quoted, it seems to me that the matter can be dealt with more cleanly if, at the time I order an extension of time, I also order the Plaintiff to pay the costs contemplated by that term. 25 I turn then to the substantive complaints as to what occurred in the Tribunal. 26 The Plaintiff, as has been said, instituted proceedings there in July 2004. On 11 August 2004 FFA faxed a request to the Tribunal which included the following:- "We have received a Notice to Appear at the CTTT on Monday 23 August in regards to the above file number. As the amount claimed by the applicant is in excess of $10,000, we request your approval to be legally represented at this hearing. Our reasons for this request are as follows:- 1. The amount claimed, $25,000 is a significant amount of money, and we feel it is necessary for us to be legally represented due to the substantial amount of the claim; and 2. The Applicant, Yolande Dubow, is herself a qualified legal practitioner (please refer to the attached email where she advises of this) and does not appear on the NSW Roll of Legal Practitioners because she is currently employed with the Attorney-General's Department as a Deputy Registrar of the Supreme Court. We would be unfairly disadvantaged should we be denied legal representation. Could you please advise if this request has been accepted by return to fax to…" 27 In the attached email the Plaintiff had observed that she had been a lawyer for 20 years. 28 In the Tribunal's file, that letter is followed by a sheet of handwritten notations:- "Respondent is requesting permission to be legally represented. Please consider. Thanks (signature) 11/8/04. As Ms Dubow is legally qualified the Resp may be legally represented. Please do not list before me – I know Miss Dubow. (initial) Graham Durie… 11 August 04." 29 The first three lines of the above were in handwriting different from the balance. 30 Following this in the file is a copy of a letter from the Tribunal to FFA advising that "As Miss Dubow is legally qualified, the Respondent may be legally represented." The original of this letter may or may not have been received. 31 The Plaintiff gave evidence that was not the subject of challenge to the effect that she had received no notice of the letter of 11 August or of Mr Durie's decision prior to 23 August 2004. 32 On 23 August 2004 the parties appeared before the Registrar of the CTTT. A number of directions were made concerning the provision of particulars and the supply of documents. What appears to be a standard form of orders (for making, altering, supplementing or deleting) together with handwritten changes and additions and which, it seems likely, was made during the hearing on 23 August contains the following:- "Leave is granted to applicant/respondent to be represented by a solicitor. The Respondent's representative shall advise the Registrar and other party in writing by no later than 4pm on 30/8/04 of the Representative's name, office, address for service, telephone and facsimile numbers. The Applicant's objection to legal representation by an office (sic) other than the legal counsel of the Respondent is noted. Also noted is the fact that the Applicant will not be independently legally represented." 33 While the first 2 of these paragraphs were substantially printed, the third was a handwritten addition to the form. The document also contains other directions and dates by which various steps in the proceedings were to be taken. Subject to matters referred to herein, neither the Tribunal's file nor any other evidence includes any expression of reasons for the Tribunal's orders just quoted. 34 Something over six pages of reasons were given for the decision on 5 May 2005 ordering the Plaintiff to pay FFA's costs. Included in those reasons was a reference to the letter of 11 August, CTTT Regulations 13 and 14 which were quoted, and the following:- "Another member of the Tribunal gave leave, in Chambers, for the Respondent to be represented. It appears that the Applicant was not given the opportunity to make submissions in relation to the application, despite Reg 13(4)." Leave was granted "as Ms Dubow is legally qualified". I note that this is not the same wording as the regulation, which is based on being entitled to practise as a legal practitioner. I note Ms Dubow's own letter to the respondent, copy provided to the Tribunal in which she states "I am entitled to the privileges of a practicing certificate from both the Law Society of New South Wales and the New South Wales Bar Association…". I further accept that issues as to whether Ms Dubow was entitled to practise were raised and agitated at the hearing. Nonetheless, bearing in mind section 32 of the Act, set out below, I accept that the irregularity in granting leave does not nullify the decision to grant leave.