District Court New South Wales Medium Neutral Citation: Owners Corporation SP 69106 v Impression Developer Pty Ltd (ACN 095 022 192) [2015] NSWDC 79 Hearing dates: 22 April 2015 Date of orders: 22 April 2015 Decision date: 22 April 2015 Jurisdiction: Civil Before: Gibson DCJ Decision: (1) First defendant called outside Court 13D three times at 10:05am – no appearance. (2) Judgment for the plaintiff against the first defendant for the sum of $465,792.75, plus pre-judgment interest of $84,076.33 pursuant to s 101 Civil Procedure Act 2005 (NSW), totalling $549,869.08. (3) The first defendant is to pay the plaintiff's costs of the proceedings. (4) Exhibits retained for 28 days. Catchwords: CONTRACT – breach of statutory warranty – jurisdiction – assessment of damages Legislation Cited: Civil Procedure Act 2005 (NSW), s 101 District Court Act 1973 (NSW), ss 4(1) and 44(1) Supreme Court Act 1970 (NSW), s 53 Cases Cited: Abbott v Klein [2015] NSWDC 45 Beynon v Wongala Holdings Pty Ltd (1999) 9 BPR 16,781 Forsyth v Deputy Commissioner of Taxation (2004) 62 NSWLR 132 Category: Principal judgment Parties: Plaintiff: Owners Corporation SP 69106 First Defendant: Impression Developer Pty Ltd (ACN 095 022 192) Second Defendant: Lucky Developments Pty Ltd (ACN 054 849 786) Third Defendant: Vero Insurance Ltd (ACN 005 297 807) Representation: Counsel: Plaintiff: Ms W Bure First Defendant: No appearance Solicitors: Plaintiff: Mills Oakley Lawyers First Defendant: No appearance File Number(s): 2012/286858 Judgment 1. The plaintiff had commenced proceedings against three defendants for damages arising out of the circumstances in which work performed on the common property amounted to breaches of statutory warranties. The proceedings were commenced in this Court on 4 February 2013, having previously been commenced before the Consumer, Trader and Tenancy Tribunal ("CTTT"), from which Court it was transferred to this Court. 2. Only the proceedings against the first defendant are before me for assessment, as the proceedings against the other two defendants and a cross-claim were resolved some time ago. On 17 February 2015 the Court granted judgment in favour of the plaintiff against the first defendant. 3. I should note that I have read the first defendant's defence, filed on 28 February 2013. As this is an assessment of damages, it is not necessary for me to trouble myself further about issues of liability, but for one point which has been of concern to the court when the proceedings were first listed for assessment of damages. 4. That point is as follows. Section 4(1) of the District Court Act 1973 (NSW) provides that the jurisdictional limit of the District Court is $750,000, and s 44(1) additionally provides that this Court has jurisdiction for sums under that amount where the action is of a kind which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court: s 44(1)(i). This section needs to be read in conjunction with s 134, which provides that the Court should have the same jurisdiction as the Supreme Court in certain proceedings in equity, but only in certain circumstances where the relief sought is the sum nominated, namely $20,000. 5. As Taylor SC DCJ, in Abbott v Klein [2015] NSWDC 45 at [33] to [50], carefully explains, this puts the Court in the cumbersome position of having to determine whether, s 44(1)(a) having been enacted on 2 February 1998, these proceedings would be assigned to the Common Law Division of the Supreme Court, this being a matter determinable by s 53 of the Supreme Court Act 1970 (NSW). As Taylor SC DCJ notes, the language of that section has been interpreted by the New South Wales Court of Appeal, in Forsyth v Deputy Commissioner of Taxation (2004) 62 NSWLR 132 at [45], as having a "fixed in time", rather than an ambulatory, construction. This accordingly requires the Court to have regard to whether or not these proceedings would have been commenced in the Equity Division, as opposed to the Common Law Division; if so, the issue of this court's jurisdiction is problematic. 6. In the helpful written submissions provided to me by the plaintiff's legal representatives, I am informed: "A dispute arising from a breach of statutory warranty used to be commenced in the common law list of the Supreme Court, and by virtue of that, the District Court has jurisdiction. Further, a case brought for breach of statutory warranties is also fundamentally a case for breach of the building contract, and as such is also a common law claim. In practical terms, proceedings for breach of statutory warranties are commenced and pursued in the District Court on a regular basis." 1. However, I was unable to find any decisions of the Supreme Court to support that submission. Examination of cases in the Supreme Court, and in particular in the Court of Appeal, not only in the late 1990s but since that time (see, for example, Beynon v Wongala Holdings Pty Ltd (1999) 9 BPR 16,781 at [24]) suggest that when proceedings for breach of statutory warranty were commenced outside the Equity Division (or, in Beynon v Wongala Holdings Pty Ltd, in the Commercial Division) they were generally transferred to the Equity Division, as happened in those proceedings. 2. These matters are matters which are relevant to liability and I note from my examination of the defence of the first defendant that no challenge to jurisdiction was ever brought. I mention the issue for two reasons. The first is when the matter was first before this Court it came before Taylor SC DCJ who raised the issue of jurisdiction, and the second is that this is yet another example of the need for reconsideration of the basis of the jurisdiction of this Court; in this regard, I respectfully adopt and commend the observations of Taylor SC DCJ in Abbott v Klein. 3. The legal representative for the plaintiff is quite correct in saying that applications of this kind come before this Court on a regular basis, and it ought not to be the case that there is any doubt about the jurisdiction of this Court. Reconsideration of jurisdictional issues of the District Court, including its jurisdiction in matters where the claim may arguably amount to an equitable claim, such as a claim for breach of statutory warranty, is long overdue. 4. Having noted those matters, I now turn to the issue of the assessment of damages in the proceedings before me. I first briefly note that the defendant, who was notified of these proceedings by the Court, in a letter dated 23 February 2015, which is exhibit E in these proceedings, and has not appeared. That letter stated: "The matter is listed for assessment hearing on 24 March 2015 at 10am, District Court Civil, Sydney. Default judgment has been entered in this matter in favour of the plaintiff against the defendants. The Court will assess the amount claimed by the plaintiff on the above date." 1. According to the file, that was the day when the matter came before Taylor SC DCJ, when his Honour directed that the matter be listed for hearing today, and directed the plaintiff to give notice to the first defendant of the directions, which I am satisfied has taken place. 2. I also note that in fact the first defendant has not taken any active part in these proceedings since the very early stages of the litigation when, in circumstances set out in earlier affidavits in the file, such as the affidavit of Holly Rayfield of 5 February 2015, a Mr Zhou attended Court in his capacity as the "sole director" of Impression Developer Pty Ltd, the first defendant. 3. The issue of quantum is dealt with in two comprehensive affidavits. The first of these, exhibit A, is the statement of Nicholas Johnson dated 13 July 2012 concerning defects. This is a straightforward summary of costs and disbursements, identifying out of pocket expenses which consist of a series of amounts set out in para 9 as totalling $54,866.08 inclusive of GST. Documentary support for all of that information, in the form of receipts and invoices, is attached. Secondly, there is Exhibit B, the affidavit of Matthew Spicer. He has set out that he calculates the current value of the defects rectification to be $608,639.3, inclusive of GST. Additionally, I have been provided with a breakdown of the damages (exhibit C) and a schedule of interest (exhibit D) which I am satisfied are consistent with the sum sought. 4. I also note that a bank cheque in the sum of $380,000 in full and final settlement was received from the second defendant in the course of this litigation subsequent to mediation. There were some problems in the past in relation to an order of discontinuance against the second defendant which, I am informed, have since been resolved. 5. The precise sum sought has helpfully been identified in the short minutes of order for judgment handed up to me in Court today. I am also satisfied that the plaintiff is entitled to interest pursuant to s 101 Civil Procedure Act 2005 (NSW) from 21 November 2013, as well as to an order for costs. No special order for costs (in the form of a gross sum, or other order) is sought. Orders 1. The orders that I make in these proceedings are as follows: 1. First defendant called outside Court 13D three times at 10:05am – no appearance. 2. Judgment for the plaintiff against the first defendant for the sum of $465,792.75, plus pre-judgment interest of $84,076.33 pursuant to s 101 Civil Procedure Act 2005 (NSW), totalling $549,869.08. 3. The first defendant is to pay the plaintiff's costs of the proceedings. 4. Exhibits retained for 28 days. ********** 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. Decision last updated: 27 May 2015