Atkinson v CTTT

The plaintiffs, Mr and Mrs Atkinson, seek an order in the nature of certiorari to set aside the decision and order of the Consumer, Trader and Tenancy Tribunal (“CTTT”) dated 9 June 2009 which ordered the plaintiffs to pay Mr and Mrs Crowley $42,700.00 on or before 23 June 2009. The CTTT has filed a submitting appearance.

The plaintiffs contend that they were denied natural justice and procedural fairness in that they were unaware of the proceedings brought by Mr and Mrs Crowley in the CTTT. The plaintiffs submit that, both at common law and pursuant to s 35 of the CTTT Act 2001, they should have been given the opportunity to adduce evidence and make submissions in defence of the claim.

Central to the proceedings was a direction or order for substituted service made by the Chairperson of the CTTT on 30 January 2009 pursuant to cl 46(6) of CTTT Regulation 2002 in these terms: “1. The Registrar is to list matter 08/62234 for a directions hearing. 2. A copy of the Notice of hearing and the application to the Tribunal are to be sent to the respondents C/- QuaestorLevel 42 Australia Square264 George StreetSydney NSW 2000”

The plaintiffs challenged this direction on the basis that they and Quaestor were different entities, had no sufficient connection and the method of substituted service adopted was unlikely to bring the proceedings to their notice.

In July 2006 the Crowleys purchased a property in Castle Cove from the plaintiffs for nearly $1.5 million. The property had been recently renovated. Substantial defects appeared.

About 23 September 2004 the plaintiffs submitted a development application to the local council with this description: “Extend First Floor Over Existing Ground Floor, Attic Bedroom/Ensuite. Extend Existing Garage.” The estimated cost of the work was stated to be $100,000.00. Detailed plans were submitted with the application and revealed substantial extensions, alterations and renovations.

On 24 March 2005 the Office of Fair Trading issued an Owner Builder Permit. That provided: “Should the property be sold within six years of completion of the work, it will be necessary to obtain home warranty building insurance … if the value of the work was greater than $12,000 a certificate of insurance must be attached to any contract for sale.”

No home warranty building insurance was obtained and no certificate of insurance was attached to the contract for sale to the Crowleys.

The plaintiffs arranged for various tradesmen to carry out the works the subject of the development application. Serious defects developed.

About February 2008 Mrs Crowley spoke to Mr Atkinson and told him of the water problems and asked him to help her contact the builder responsible. Mr Atkinson replied that he did not know how to get in contact with the builder, that the builder went back to Ireland and that he would get back to her.

Mr Atkinson did not do so. Mr Crowley spoke to Mr Atkinson in about March 2008 and Mr Atkinson reiterated that he thought that the builders had gone back to Ireland, stated that he did not have the number, that he would look into the matter and get back to Mr Crowley. Mr Atkinson did not do so.

About 5 May 2008 Mr Crowley lodged a complaint with the Office of Fair Trading. An officer from that Office made this diary entry: “Lisa phoned back and I relayed the nature of my call. … Lisa stated that her husband and herself have moved to France, and whilst they are hoping it will be permanently, it may not be a viable option. C is unsure how long they will be in France for because of this reason … she will arrange for her husband, Clifford, to phone me back.”

According to Mr Atkinson, he and his wife were in France at the time of the telephone call from the officer.

Mr Crowley contacted the real estate agent through whom he and his wife purchased the Castle Cove property and the solicitor who acted for the plaintiffs on the sale, but each declined to supply contact details of the plaintiffs to Mr Crowley.

Mrs Crowley made an electoral roll search and found an address for Lisa Atkinson of 53 New Beach Road, Darling Point. On visiting that address with her husband they found that it was a building site.

Mr Crowley has detailed in his affidavit the many steps which he took to locate the address of Mr and Mrs Atkinson. Mrs Crowley has also detailed the steps taken by her.

Mr Crowley said that during January 2009 he conducted an internet search during which he determined that a person named Clifford Atkinson was the manager of the North Sydney over 35’s soccer club, that via the internet he made contact on the email address shown on the club website as “cliff@Xactsolutions.net” and asked for details as to how he would go about joining the club. Mr Crowley said he subsequently received an email from Clifford Atkinson and was included on the distribution list for the team. The address shown on the emails was: “Cliff Atkinson CEO Xact Solutions Ltd Level 42, Australia Square Sydney NSW 2000 Tel: +61282593004 Fax: +61282593099 Mob: +61 …”

Mr Crowley said that during January 2009 he telephoned the administration office of Australia Square and spoke with the receptionist who stated that Clifford Atkinson worked on the 42 nd floor but not at Xact Solutions, that Xact Solutions were not shown in the building and that it was believed that the office was leased to a company named “Quaestor”. On searching the internet for “Quaestor” its website showed the following: a) The address was level 42, Australia Square. b) The fax number was 61 2 8259 3099. (This was identical to the fax number on Mr Atkinson’s emails.) c) The telephone number was 61 2 8259 3000. (The number shown on the emails of 612 8259 3004 was probably Mr Atkinson’s direct telephone line.)

On 23 January 2009 Mr Crowley appeared in person before the CTTT and sought an order for substituted service. He was told to apply in writing with all the supporting reasons. About 28 January 2009 the Crowleys applied in writing for substituted service and supplied the supporting material set out in the Schedule.

In my opinion this material was sufficient to support the direction given by the Chairperson of the CTTT. The 2008 and 2009 Law Almanacs show that Kay Ransome was the Chairperson in those years.

The Tribunal is not bound by the rules of evidence and may inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness: s 28(2) of the CTTT Act. The notations in the CTTT file indicate that the staff of the CTTT carried out the Chairperson’s direction. See also s3, s 24(3) and s 28(5) of the Act.

The Chairperson had before her material that Mr Atkinson was the CEO, Xact Solutions, Level 42, Australia Square, that a company called Quaestor was on Level 42, with phone and fax details which matched those supplied by Mr Atkinson in his emails. Australia Square is well known in Sydney and has a tower building which, inter alia, contains many floors of office space between the lower floors and the top floor.

With the matching telephone and facsimile details it would be safe to draw the inference that Quaestor and Mr Atkinson shared the same office on Level 42. It would also be safe to draw the inference that any letter or notice addressed to Lisa Atkinson and Clifford Atkinson C/- Quaestor, Level 42 Australia Square, 264 George Street Sydney NSW would in all reasonable probability come to the plaintiffs’ attention. It was open to the Chairperson to draw both inferences and it would have been surprising if she had not done so.

It appears from the CTTT file, consequent upon the direction of the Chairperson, that probably about 5 February 2009 by post the CTTT sent notice of a directions hearing before it on 11 March 2009 addressed to “Lisa Atkinson and Clifford Atkinson, C/- C/- Quaestor, Floor 42 Australia Square, 264 George Street Sydney NSW 2000”. The notice warned Mr and Mrs Atkinson that if they did not appear “the Tribunal may decide the matter in their absence and that the decision made would be binding on them”. On the bottom of the notice this stamp appears: “Received10 February 2009Consumer, Trader &Tenancy TribunalSydney” That appears to be part of an internal note by the staff of the CTTT as to the date on which the copy notice was received in the Records Section of the CTTT and where the records relating to the claim were kept.

About 11 March 2010 the Tribunal issued and sent by post a Notice of Order made that day addressed to Lisa Atkinson and Clifford Atkinson, C/- C/- Quaestor, Floor 42 Australia Square 264 George Street Sydney advising that the hearing of the application of the Crowleys was adjourned to a date to be fixed by the Tribunal’s registry on the basis that the hearing would proceed in the absence of Lisa and Clifford Atkinson. The presiding member at the hearing stated in his written Notice: “Noting that the respondents [Lisa and Clifford Atkinson] have been served with notice of today’s hearing in accordance with the order made by the Chairperson directs that notice of the formal hearing be given in the same manner. The Tribunal notes that the documents sent by the Applicants [the Crowleys] by Express Post to the Respondents have been returned to them by Australia Post. A separate written notice of the new hearing date will be sent to you in the near future.”

The reference to the documents sent by the applicants by Express Post refers to a bundle of documents sent by the applicants about 20 February 2009. That bundle contained a copy of the Crowley’s application and the documents on which they proposed to rely in proof of their claim, including details of the rectification work carried out and the cost of such work, photographic evidence of the defects and copies of documents issued by the local council. In all, the bundle comprised some 83 pages.

The express post envelop was addressed thus: To: Company Name Quaestor (Xact Solutions) For urgentAttention of Cliff Atkinson 8259-3004Telephone 041840935 PO Box NumberOr Street Address Lv 42, Australia Square264-278 George Street Suburbor Town Sydney State NSW Postcode2000

Mr Crowley said that on 6 March 2009 he received in the mail the above Express Post envelope. He continued: “The envelope had been marked in texta ‘UNDELIVERABLE RETURN TO SENDER’ and appeared to me to have been opened.”

The CTTT file indicates that about 20 March 2009 the CTTT sent a Notice of Hearing addressed to “Lisa Atkinson & Clifford Atkinson C/- C/- Quaestor Floor 42 Australia Square, 264 George Street, Sydney NSW 2000: That Notice advised that the Crowleys’ application had been listed before the Tribunal on 9 June 2009 “for formal hearing – Bring Witness”. The words last quoted were in bold type. The Notice warned Mr and Mrs Atkinson that if they did not appear the Tribunal may decide the matter in their absence and that the decision made would be binding on them.

On the bottom of this Notice the following stamp appears: “Received25 March 2000Consumer, Trader &Tenancy TribunalSydneyRSU”

That appears to be part of an internal note by staff of the CTTT as to the date on which the copy notice was received in the Records Section and where the records relating to the claim were kept. Thus when the documents were required they could easily be located. A Tribunal handling a large number of matters and receiving many documents needs a system for keeping its records.

The plaintiffs were not present before the CTTT on 9 June 2009, so the proceedings were heard ex-parte. The plaintiffs contend that they were unaware of the proceedings and that they never received notice of the Crowleys’ application, the directions hearing or the hearing. The Tribunal making the order mentioned stated: “Brief Reasons The Tribunal is satisfied that service of notices on the respondent has been effected in accordance with the order for substituted service of 30 th January, 2009. The Tribunal is satisfied that the applicants were the purchasers of the property at … Castle Cove. The Tribunal is satisfied that the respondents were the vendors of the property and had completed works at the property under an owner/builder permit within the previous 7 years. The respondents are liable to the applicants for building defects arising out of that building work pursuant to the Home Building Act statutory warranty provisions. Defects Garage The Tribunal accepts the evidence of the lack installation of proper drainage and waterproofing and the amount of claim in the sum of $14000.00. First Floor Balcony The Tribunal accepts the evidence of the failure of waterproofing of the first floor balcony and subsequent impact on plasterboard ceilings and the amount of the claim in the sum of $15000.00. Further Repairs The Tribunal accepts the evidence of the defective building work on the installation of the French doors and the failure to properly weatherproof the doors and the impact on timber surrounds and plaster ceilings and cornices in the amount of $13700.00. Tribunal makes a money order in the sum of $42700.00.”

In their affidavits of 3 November 2009 each of the plaintiffs stated that such plaintiff was unaware of the proceedings commenced by the defendants in CTTT, had not been served with any documentation in respect to the matter and had no knowledge of the claim against her or him.

In his affidavit of 13 December 2009 Mr Atkinson made statements which needed to be expanded and amended. He said that between about January 2005 and July 2006 his wife and he were living at the Castle Cove premises, that during 2005 they had a building application approved for the construction of concrete stairs on the premises. In paragraph 5 he stated: “My wife and I did not arrange for any other building work on the premises (other than the construction of a swimming pool) apart from the concrete stairs … All other work was carried out by myself.”

In cross-examination Mr Atkinson agreed that he submitted a development application to the local council in relation to the Castle Cove property about 23 September 2004. He agreed that the application involved extending the first floor over the existing ground floor, altering the attic and converting it into a bedroom with an en suite. He agreed that the estimated cost of the work in the application was said to be $100,000.00.

The plaintiffs were given a Notice to Admit Facts by the Crowleys about 2 February 2010, and in particular the following: “3. That in the period between 1 January 2009 and 11 March 2009 the second plaintiff was the Chief Executive Officer and/or was associated with Xact Solutions Ltd. 4. In the alternative to 3 above the second plaintiff represented that he was the chief executive officer of Xact Solutions Ltd.”

Both facts were disputed in the plaintiff’ Notice Disputing Facts (Exhibit 1).

Xact Solutions Ltd was said to have finished trading in about 2001 and 2002 and to have been deregistered in 2006.

The plaintiffs disputed that paragraph 4 of the Notice to Admit Facts was correct. Mr Atkinson agreed that in his email of 27 January 2009 he described himself as CEO, Xact Solutions Ltd.

In paragraphs 10 and 11 of his affidavit of 13 December 2009 Mr Atkinson stated: “10. I am self-employed as an individual consultant to a number of companies. From December 2006 to 22 November, 2009 I conducted business at Level 42 Australia Square where I had an arrangement with a leaseholder on that level, Gamma Capital. I paid no rent. In return for my financial advice, Gamma Capital furnished me with a desk and office facilities. 11. At no time have I ever had a business connection ‘Quaestor’, though I have seen signs indicating that it occupies premises on the same floor as Gamma Capital.”

The reference in paragraph 11 to a “business connection” is limiting. Since the institution of these proceedings, Mr and Mrs Crowley have undertaken further investigations. These confirm the information which was before the Chairperson when she gave the direction for substituted service and that the Chairperson took the correct course in doing so. A company search as at 11 November 2009 revealed that from 19 May 2005 the registered office of Quaestor Financial Services group Pty Ltd was at Level 42, 264 – 278 George Street Sydney NSW 2000 and that its director since 7 June 2004 was John George Mitchell. On 11 December 2009, Ms Linda Duong, the Tenant Liaison Officer for Australia Square sent this email: “ … I can confirm that Quaestor and Gamma Capital were located in the same tenancy on level 42, suite 4202. Our direct lease was only to Gamma Capital … Both tenants have since moved from the Australia Square … Mitchell J McGeorge, the director of Quaestor, contacted me when they were arranging to move out of suite 4202.”

About 14 December 2009 the Crowleys went to level 42 Australia Square. Suite 4202 was vacant. It consisted of a small single room with a single entrance. There were only five suites on all of level 42. Mrs Crowley estimated that the room was about 10 metres by 20 metres.

In paragraph 16 of his affidavit of 13 December 2008 Mr Atkinson stated: “… I have nothing to do with ‘Quaestor’, I do not understand how an order for ‘substituted service’ was made against me or my wife and the ‘defects’ noted have nothing to do with any building work carried out whilst my wife and I owned the premises at Castle Cove.”

I make these comments as to Quaestor: a) Mr Atkinson is not a shy person. He would have made himself known. b) The material before the chairperson suggested that Quaestor and Mr Atkinson used the same office. That appears to have been a small office. c) It is inconceivable that the Notices from the Tribunal of about 5 February 2009, 11 March 2009 and 20 March 2009 addressed to Lisa and Clifford Atkinson did not reach him even though addressed care of Quaestor. Mr Atkinson would have been known to those who conducted the business of Quaestor and vice versa. The building operator was aware of both Gamma Capital and Quaestor. I have not overlooked Mr Atkinson’s evidence that these were serviced offices without the services. d) Mr Atkinson said that Quaestor had moved out when he was offered a desk in 2006. That is not what the company search, Ms Duong’s email and the telephone and facsimile numbers suggest. e) Mr Atkinson (T 14) agreed that the address shown in the email was his business address. f) Mr Atkinson agreed that a web page showed him as the Managing Director of Gamma Capital. Mr Atkinson said he did not hold that position and that the actual managing director allowed him to put the name of his company on the web site of Mr Atkinson.

As to Mr Atkinson’s assertion about defects in paragraph 16 of his affidavit, this is incorrect. The Crowleys’ complaints did not relate to the stairs but to the defects in the other work carried out under the owner-builder permit.

In Watt v Barnett & Ors 1878 3QB 183 a Divisional Court comprising Cockburn CJ and Mellor J was dealing with an application to set aside a judgment and the construction of Order IX, rule 2. The Chief Justice posed the question whether an order under that provision is final and conclusive. At p 185 he held that the judgment was signed regularly. His Lordship continued: “All I hold is that the order for substituted service is not finally binding and conclusive, if the Court are satisfied that through that order injustice will be done if the defendant is not let in to defend, he never having had any knowledge of the action. To apply this view to the present case. Before letting the defendant in to defend we must consider whether he give us any grounds for thinking that he has a substantial case which he desire to try. If he does not we are not bound to set aside a judgment which we may think ought in the interests of justice to stand.” Mellor J came to the same conclusion but expressed his reasons thus: “I think that the object of the 2 nd rule of Order IX was to obviate the difficulties that the plaintiff might be exposed to by reason of a defendant’s going abroad and keeping abroad, and it being impossible to effect personal service, and to prevent the plaintiffs’ right being entirely defeated by reason of these difficulties. It was intended, in my opinion, in such cases to enable the Court to order substituted service, and that when such substituted service is directed it should have all the effects of personal service. Under these circumstances the judgment in this case was perfectly regular; and though I think it is competent to us to let the defendant in to defend, the defendant can, in my opinion, only be so let in on satisfying us that he has merits, and that he had no knowledge of the proceedings. The proceedings being regular, if he had known of them, I think he would have been in the same position as if he had been served with the writ.”

In the present case Mr Atkinson’s evidence cannot be regarded as reliable. I am not satisfied that he had no knowledge of the proceedings. Indeed, it is probable that the notices sent by the CTTT reached him and that the plaintiffs had knowledge of the proceedings despite their denials and assertions. The Direction given by the Chairperson as to substituted service was open to her on the materials before her and it is reasonably probable both that the method of service adopted would have brought the proceedings to the attention of the plaintiffs and that they had knowledge of the proceedings.

Counsel for the plaintiffs stressed the terms of section 35 of the CTTT Act which provides: “The Tribunal must ensure that each party in any proceedings is given a reasonable opportunity: (a) to call or give evidence and otherwise present the party’s case (whether at a hearing or otherwise), and (b) to make submissions in relation to the issues in the proceedings.”

I have also considered ss 65(3) and s 78. My attention was directed by counsel for the Crowleys not only to s 78(6) but s 78(1)(b) which provides that a notice or document may be served on a person by sending it by post to the business address of the person that was last known to the person serving the document. Mr Atkinson conceded that his business address was as set out in his email of 27 January 2009, namely, Xact Solutions Ltd, Level 42, Australia Square Sydney with the telephone, fax and mobile phone numbers he gave. He also gave his email address. Of course, Xact Solutions Ltd had been de-registered and Quaestor occupied the same office as Gamma Capital and Mr Atkinson.

Counsel for the plaintiffs asked the Court to accept the plaintiffs as witnesses of truth when they asserted that they had no knowledge of the proceedings. I did not do so.

Counsel for the plaintiffs also submitted that the rules of procedural fairness had in any event not been complied with in that only the materials of the Crowleys had been considered and that the plaintiffs had neither led nor been able to lead their evidence. Further, they had not been able to make submissions. With their knowledge of the proceedings the plaintiffs had the opportunity to do so but neither availed themselves of that opportunity nor utilised it.

The Crowleys submitted that the plaintiffs should be refused relief in the exercise of the Court’s discretion in that they had not shown that they had an arguable defence on the merits. The Crowleys pointed out that, in paragraph 5 of his affidavit of 13 December 2009, Mr Atkinson said that the plaintiffs “did not arrange for any other building work on the premises (other than the construction of a swimming pool) apart from the concrete stairs … All other work was carried out by myself.” This does not come to grips with other quite extensive work done and the alleged defects.

Counsel for the plaintiffs contended that it was not appropriate to explore the question, at this stage, whether the plaintiffs had a defence on the merits as that could lead to the primary complaint of a denial of procedural fairness being sidetracked.

I did not envisage a lengthy enquiry as to the merits of any defence, but it would have been useful to have been told what arguable defence on the merits the plaintiffs had. At first blush it seemed that the plaintiffs as owner-builders were liable for any defects in the work done and that the materials advanced by the Crowleys suggested that there were substantial defects to be remedied at a cost which appeared to have been substantiated. Relief must also be refused on this alternate ground.

I dismiss the summons. I order the plaintiffs to pay the costs of the defendants of the summons.