Araise Group Pty Ltd v Residential Lifestyles Pty Ltd [2010] NSWCA 187

New South Wales Court of Appeal

CITATION: Araise Group Pty Ltd v Residential Lifestyles Pty Ltd [2010] NSWCA 187

HEARING DATE(S): 2 August 2010 JUDGMENT OF: Giles JA at 1; Hodgson JA at 16

EX TEMPORE JUDGMENT DATE: 2 August 2010

DECISION: Application for leave to appeal dismissed with costs.

CATCHWORDS: APPEAL - civil - leave to appeal - insufficient prospects of success - small amount involved - leave refused.

CATEGORY: Principal judgment

PARTIES: Araise Group Pty Ltd ACN 125 013 370 - Applicant Residential Lifestyles Pty Ltd - Respondent

FILE NUMBER(S): CA 2010/20655

COUNSEL: R W Tregenza - Applicant F F F Salama - Respondent

SOLICITORS: Harper Wood Marshall Williams - Applicant Parisi & Assciates, Dee Why - Respondent

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): SC 2009/295224

LOWER COURT JUDICIAL OFFICER: Harrison AsJ

LOWER COURT DATE OF DECISION: 12 February 2010

LOWER COURT MEDIUM NEUTRAL CITATION: Araise Group v Residential Lifestyles [2010] NSWSC 46

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 2010/20655 SC 2009/295224 LC 7746/08

GILES JA HODGSON JA

Monday 2 August 2010 ARAISE GROUP PTY LTD ACN 125 013 370 v RESIDENTIAL LIFESTYLES PTY LIMITED Judgment

1 GILES JA: This is an application for leave to appeal from the decision of Harrison AsJ dismissing an appeal from the judgment of Magistrate Tabbaa. The appeal lay on a question of law only. Three errors of law were urged as appropriate for grant of leave. 2 The first was that the applicant had been denied natural justice because the learned magistrate had taken into account evidence concerning negotiations for what was called the first consultancy agreement, an agreement for the preparation of documentation for a construction certificate submission, which had been admitted as background only and on the basis that it would not be taken into account in construing the first consultancy agreement. It was submitted that, contrary to that basis, it had been taken into account for that purpose. If so, it may be that the error was not simply one of denial of procedural fairness, but one of error in taking into account material which could not in law be taken into account. 3 As explained to us, the matter arose in this way. Under the first consultancy agreement, which was in writing, the documentation to be prepared was listed. One item was, "Complete architectural plans and specifications on the plans." Another was, "Complete internal only Plumbing and draining design." We were informed that the applicant's case before the magistrate had been that the work required under the first consultancy agreement had not all been carried out, because what was required for the, "Complete internal only Plumbing and draining design" was not by way of a separate plan, but was included in the architectural plans. This was said before us to have raised a matter of construction of the first consultancy agreement. 4 The difficulty is that I cannot see that the magistrate did take into account what I will call the objectionable material. 5 It was material in an affidavit of Mr Summerville sworn on 9 March 2009. The magistrate did refer to what Mr Summerville had said, particularly in paragraph 39 of her reasons in which she described the negotiations to which Mr Summerville was a party as "very telling". The 'tellingness' appears to have been that her Honour took from Mr Summerville's evidence that what was to be provided by the respondent was basic schedules for electrical and plumbing requirements, and that detailed design plans would not be provided for the fee which they were negotiating: in other words, that the agreement was for what might be described as a low level of services commensurate with a low fee. 6 However, I am unable to see how that formed any part of her Honour's reasoning to the conclusion, not clearly expressed, but clearly enough to be found in para 32 of the reasons, that the plans prepared by the respondent complied with the contractual requirements. It is certainly not evident to me that provision of a plumbing and draining design, a design being different from a plan, could not be met by the necessary information being included in the architectural plans, as it seems occurred. It is very difficult for the applicant to point to an error of law in the respect for which it contends. 7 In my view, the prospect of success in making out that error would be very small. The amount involved is also small. I am not sure whether it is only some $1,500, or a figure towards $3,000 to $4,000, but in either case it does not seem to me that leave to appeal in relation to this complaint is warranted. 8 The second was appropriately described as a no evidence point, appropriately in recognition of the necessity to show an error on a question of law. It was concerned with what was called the second consultancy agreement. The relevant issue was whether that agreement was made with the respondent's company, or with Mr Stacey, the principal of that company. It was submitted that when one looked at the negotiations for the second consultancy agreement, they began with an offer of employment to Mr Stacey and it was said that thereafter nothing really changed so that the agreement which was ultimately reached was also with Mr Stacey. It was submitted that there was no evidence supporting agreement with Mr Stacy's company. 9 However, there was other evidence. The conversations included Mr Stacey saying that he did not wish to be an employee but would provide his services as a consultant. The negotiations followed entry into the first consultancy agreement, which was so described, and which was with the respondent. They were followed by invoicing for what was done under the second consultancy agreement by the respondent, and payment of the invoices. These matters provided some evidence, indeed evidence of some strength, to support the conclusion that the second consultancy agreement was entered into between the applicant and the respondent, with the parties at the time, in the circumstances in which they were negotiating, both understanding that by being a consultant Mr Stacey meant undertaking an engagement through his company, the respondent. In my view, there was evidence on which it was open to the learned magistrate to come to the conclusion that the second consultancy agreement was made with the respondent and not Mr Stacey. 10 This issue was not explicitly considered in the magistrate's reasons, nor was any of the grounds of appeal apparently referable to it, but it is not necessary to explore either of those considerations further. 11 The third was concerned with a bonus payable on the issue of the construction certificate for the Forestville job. Both the magistrate and Harrison AsJ said that the bonus, if payable, was payable under the second consultancy agreement. It appears, although it is not entirely clear, that what was called the third consultancy agreement may in some manner have supplanted the second consultancy agreement, and possibly the bonus came to be payable under the third consultancy agreement: I do not think it is necessary to explore this. The argument was that the third consultancy agreement had terminated on or about 15 February, some months prior to the issue of the construction certificate, and that because of the termination prior to the issue of the construction certificate there was no entitlement to the bonus. 12 Assuming for present purposes that the third consultancy agreement is the relevant agreement, it was not sufficient to simply show the temporal sequence of that agreement coming to an end and, after some lapse of time, the issue of the construction certificate. Whether or not there was an entitlement to the bonus depended on at least two other matters. One was whether there was work required of the respondent under the agreement as a condition of entitlement to the bonus, which work the respondent did not do. If that were so, the other was whether it was because the respondent failed or refused to do what it should have done or whether the applicant did not let it do what it should have done. 13 The problem for the applicant is that there was no finding, and the applicant was unable to refer us to appropriate evidence, that the respondent failed to do what was required of it. The applicant relied on no more than termination and a temporal gap before the issue of the construction certificate. That does not show disentitlement to receipt of the bonus. The learned magistrate explicitly found that "all milestones had been achieved", and that finding stands in the way of an error of law. 14 On each of the second and third asserted questions of law, in my view, there are minimal or no prospects of success in an appeal. Larger amounts are involved, towards $30,000 in all, but nonetheless the prospects of success in an appeal are such that in my opinion a third tier of appeal is not warranted. 15 For these reasons I would dismiss the application for leave to appeal with costs.