Namoi Sustainable Energy Pty Limited v Buhren and anor.

Namoi Sustainable Energy Pty Ltd (the applicant) seeks leave to appeal from an interlocutory decision of her Honour Magistrate Soars delivered in the Local Court at Tamworth on 17 June 2021. The orders sought by the applicant are pleaded in the following terms:

With the consent of the parties, a Court Book (CB) containing all relevant material was admitted as exhibit A.

It is common ground between the parties that the decision of the Magistrate which is the subject of these proceedings is an interlocutory decision and that the applicant requires leave to appeal. In this regard, s 40(2)(a) of the Local Court Act 2007 (NSW) is in the following terms:

At the conclusion of the hearing on 17 February 2022, having given counsel for each party the opportunity to make oral submissions, I made an order dismissing the proceedings, along with a special order as to costs. At that time, I indicated that I would publish my reasons in due course. Those reasons now follow.

By a statement of claim filed in the Local Court at Armidale on 31 October 2019, Wolf Buhren, in both a personal and a representative capacity (collectively, the respondents) brought proceedings against the applicant arising from the supply and installation, by the applicant, of a solar power unit (the goods) at premises in the New South Wales township of Niangala. In bringing the proceedings, the respondents asserted that the goods:

The applicant filed a defence in which it accepted that a contract was entered into for the supply and installation of the goods, but asserted (inter alia) that:

In their case against the applicant, the respondents sought to rely on an affidavit of James Alan Goodwin of 18 February 2020 [1] for a number of purposes, including as expert opinion evidence pursuant to s 79 of the Evidence Act 1995 (NSW) (the Act). In that affidavit, Mr Goodwin described himself as a “Communications Technical Officer”. He set out his qualifications [2] and annexed a report [3] detailing the cost of his rectification of the work which, in his opinion, had been necessary. He also expressed a number of opinions as to what he considered were shortcomings in the supply and installation of the goods by the applicant [4] and which, if accepted, were capable of supporting the respondents’ case. The Magistrate’s determination that Mr Goodwin had the requisite training, study and experience to give expert opinion evidence is the subject of the present application for leave to appeal.

The hearing commenced before Magistrate Holmes at the Armidale Local Court on 5 November 2020. The transcript of the proceedings on that day is not before me. However, what occurred is summarised in the written submissions of counsel for the applicant. [5] In short, when the matter came before his Honour, counsel for the applicant objected to the admission of Mr Goodwin’s affidavit on two bases, one of which was that it was not admissible as expert evidence having regard to s 79 of the Act. Because of time pressures on that day, the matter could not proceed beyond hearing submissions, at the conclusion of which his Honour expressed some misgivings about the admissibility of Mr Goodwin’s affidavit and indicated that he would, on the next occasion, provide detailed reasons if he were asked to do so. The matter was then adjourned for further hearing until February 2021. Although his Honour did not express any definitive conclusion, it is apparent that he was minded to reject Mr Goodwin’s affidavit, at least insofar as it was relied upon as expert evidence.

Unfortunately, his Honour became unwell in the intervening period and the hearing could not resume on its allocated date. On 9 February 2021, the proceedings came before Magistrate Prowse in the Armidale Local Court for directions, who expressed the view that the appropriate venue for the hearing was the Local Court at Walcha. His Honour listed the matter for further hearing at that Court on 19 February 2021. [6]

On 19 February 2021 the matter came before Magistrate Soars at the Local Court at Walcha. Again, the transcript of the proceedings is not before me but what occurred on that day is set out in the applicant’s written submissions. [7] It is apparent that due to other (presumably criminal) matters taking priority, the hearing did not re-commence until part way through the day. When it did, her Honour reviewed the transcript of the proceedings before Magistrate Holmes. However, it was agreed between the parties that the matter would start afresh without regard to the views expressed by Magistrate Holmes, and that her Honour would address, and rule upon, the admissibility of Mr Goodwin’s affidavit. Beyond that, little progress was made and the matter was adjourned, part heard before Magistrate Soars, to the Local Court at Tamworth on 17 June 2021.

A transcript of the proceedings before her Honour on 17 June 2021 forms part of the evidence before me. Her Honour commenced by addressing an application brought by the respondents to amend the statement of claim. After lengthy argument, that application was withdrawn.

Her Honour then turned to the issue of the admissibility of Mr Goodwin's affidavit. In light of one of the matters raised by counsel for the applicant during the hearing before me, it is necessary at this point to set out some extracts from the transcript which reflect what occurred leading up to her Honour’s interlocutory determination which is the subject of the present application for leave.

In the context of discussing with the parties the most expedient way in which to resolve the issues arising from Mr Goodwin’s affidavit, her Honour observed: [8]

A short time later, the following exchange took place between the Magistrate and counsel for the applicant (who was also counsel for the applicant before this Court): [9]

A short time later, the following further exchange took place between the Magistrate and counsel for the applicant: [10]

That was followed by this exchange: [12]

Counsel’s statements in each of these exchanges make it clear that he agreed that her Honour would initially determine the question of Mr Goodwin’s expertise, and that he would reserve his position in relation to other objections which might be open to be made in the event that his challenge to such expertise was unsuccessful.

Mr Goodwin gave evidence on the voir dire. [13] Her Honour then heard oral submissions from the parties [14] before delivering the following ex-tempore reasons: [15]

In other circumstances, her Honour's determination to “decline to reject the tender” of Mr Goodwin's evidence might be viewed as having been expressed in somewhat curious terms. However, it is evident from those extracts from the transcript I have set out above that her Honour expressed her conclusion in that way in order to leave the opportunity open for counsel for the applicant to raise further objections to Mr Goodwin’s evidence if he wished to do so. So much is clear from her Honour’s reference to objections being taken on what she described towards the conclusion of her reasons as a “paragraph by paragraph basis" [16] . What must be emphasised is that her Honour’s determination that Mr Goodwin had the necessary training, study and experience to give expert evidence was made following the adoption of an approach with which counsel for the applicant had unequivocally agreed, a fact which was expressly confirmed by her Honour at the conclusion of her reasons. [17]

Immediately following her Honour’s determination, the transcript records this exchange between her Honour and counsel for the applicant: [18]

After a short adjournment, counsel for the applicant made an application that the entirety of Mr Goodwin’s affidavit be excluded pursuant to s 135 of the Act, before going on to articulate a number of specific objections to particular parts of the affidavit. [19] Some of those objections were dealt with by her Honour, with the consent of the parties, in a “shorthand” way. [20] Mr Goodwin then gave further oral evidence [21] at the conclusion of which counsel for the applicant indicated that he required an opportunity to obtain instructions before he commenced any further cross-examination. [22] Her Honour then heard submissions from counsel for the respondents in respect of the objection to Mr Goodwin’s evidence based on s 135 of the Act, at the conclusion of which she indicated that she wished to consider some of the authorities to which she had been taken in argument before making a determination. [23] A short time later the hearing was further adjourned.

I interpolate at this point that the summons commencing the proceedings which are now before me was filed in this Court on 13 July 2021, slightly less than one month after her Honour’s determination as to Mr Goodwin’s expertise, and at a time when the proceedings remained part heard before her. For reasons to which I will come, it is important to emphasise that as at the date of the filing of the summons, the only substantive interlocutory determination that her Honour had made was that Mr Goodwin had the requisite training, study and experience to express the opinions he had set out in his affidavit. That remained the case at the time of the filing of the summons.

The hearing resumed before her Honour on 5 November 2021 and continued on 8 November 2021. Once again the transcript of the proceedings on those days does not form part of the evidence before me, although the written submissions of the respondents [24] indicate that Mr Goodwin's affidavit was admitted into evidence on 5 November 2021 following further argument. The evidence finally concluded on 8 November 2021, following which the proceedings were adjourned until 20 January 2022 for addresses, with her Honour making orders for the filing and service of written submissions. [25]

The addresses were delivered before her Honour on 20 January 2022, at which time her Honour reserved judgment. I was informed at the commencement of the hearing before me that her Honour has since published her reasons, finding in favour of the respondents.

It is necessary at this point to address two preliminary matters, the first of which concerns the ambit of the present application for leave. I have set out above the terms of the orders sought by the applicant. I have also set out those extracts from the transcript setting out the approach which was adopted by the Magistrate for the purposes of determining the primary issue arising from Mr Goodwin’s evidence. Notwithstanding that such approach was entirely clear, and was one which had been expressly agreed to by counsel for the applicant at the time, counsel effectively sought to depart from it before this Court. In doing so, he sought to broaden the ambit of the application for leave by attempting to impugn the Magistrate’s decision on bases over and above those arising from her Honour’s determination of Mr Goodwin’s expertise. [26]

Specifically, counsel sought to rely on the orders sought in paragraphs (4) and (5) in the summons, [27] along with paragraphs (11) and (12) of the pleaded grounds of appeal, [28] to support an argument that in addition to the asserted errors arising out of the determination as to Mr Goodwin’s expertise, her Honour had also erred by failing to engage with, and determine, submissions that had been put to her regarding the respondents’ lack of compliance with various provisions of the Uniform Civil Procedure Rules 2005 (NSW) with respect to Mr Goodwin’s affidavit.

In my view, to have permitted that course would have been entirely inappropriate. The summons seeks (inter alia) an order granting leave to appeal “from the whole of the interlocutory decision below” (my emphasis). As I have pointed out, the only substantive interlocutory decision her Honour had made at the time that the summons was filed was that relating to Mr Goodwin’s expertise. That decision had been made following an approach which was adopted with the express acquiescence of counsel for the applicant. The intention of the applicant to seek leave to appeal against that decision and no other is clear from the fact that immediately upon her Honour concluding her reasons, counsel sought an adjournment, and in doing so informed her Honour that there would be an appeal “against that decision” (my emphasis). Consistent with that, no application to amend the summons to encompass an application for leave to appeal against any other interlocutory decision made by her Honour has ever been filed. In all of these circumstances, I have proceeded on the basis that the application for leave to appeal which is before me relates solely to her Honour’s determination of the issue of Mr Goodwin’s expertise.

The second preliminary matter arises from counsel for the applicant seeking to read the affidavit of Daniel Campbell, Solicitor, of 16 February 2022, to which objection was taken by counsel for the respondents on the grounds of relevance. Firstly, counsel for the applicant submitted that the affidavit was relevant to a proposed amendment to the summons. [29] Secondly, in circumstances where the affidavit annexed the reasons of the Magistrate, counsel submitted that it was relevant because it would enable me to “assess the ultimate gravamen of allowing the evidence of Mr Goodwin in”. [30]

The affidavit is not relevant on either basis. First, as I pointed out to counsel for the applicant in the course of argument, there is no application before me for an amendment of the summons. Secondly, for the reasons that I have already given, the application for leave centres solely on the Magistrate's determination that Mr Goodwin had the relevant expertise to express his opinions. What the Magistrate may ultimately have made of Mr Goodwin’s evidence having admitted it is irrelevant to any determination I am required to make.

Counsel for the applicant submitted that the Magistrate's determination involved an “issue of principle” which he identified as “the application of s 79 of the Evidence Act”. [31] Counsel further submitted that there was a question of “general public importance” arising from her Honour’s determination, which he articulated as an expectation on the part of the community that “the Courts of New South Wales will apply the Evidence Act and case law consistently and uniformly at all levels”. [32] Counsel submitted that the requirement on the part of Local Court Magistrates to properly apply the law was no less in a case in which the amount in issue might be regarded as relatively modest. Counsel went so far as to submit that the decision of the Magistrate had the capacity to “shake the public's confidence” [33] in the administration of justice in Local Courts in New South Wales.

Counsel emphasised that in determining whether to grant leave, it was necessary for this Court to give consideration to the merits of the case. In this regard, he submitted that on a number of bases the Magistrate had erred in her determination that Mr Goodwin had the necessary training, study and experience to satisfy the requirements of s 79 of the Act. Counsel accepted that a grant of leave involved a discretion, and that the matters which informed the exercise of that discretion included the provisions of s 60 of the Civil Procedure Act 2005 (NSW) (the CPA). However, he submitted that the entirety of the circumstances of the case weighed in favour of a grant of leave because if leave were not granted, a substantial injustice would be visited on the applicant.

Counsel for the respondents emphasised that the application for leave to appeal was limited to a proposed appeal against the decision of the Magistrate concerning Mr Goodwin’s expertise, and described the application as having been brought prematurely. Counsel submitted that there was no matter of principle or public importance which justified a grant of leave.

Counsel further submitted that it was necessary for the applicant to identify something more than the fact that the Magistrate was arguably wrong in her determination as to Mr Goodwin's expertise. Counsel also submitted, with some emphasis, that the costs incurred in the proceedings were disproportionate to the issues in dispute and that all of the relevant discretionary factors weighed against a grant of leave.

The general principles which govern an application for leave to appeal include the following.

First, the jurisdiction which the Court exercises in determining an application for leave to appeal is not a proceeding in the ordinary course of litigation. It is a preliminary procedure which is recognised by the legislature as a means of enabling a Court to control, in some measure, the volume of appellate work requiring its attention. [34]

Secondly, it is appropriate to grant leave only in those matters that involve issues of principle, questions of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. [35]

Thirdly, it is necessary for the Court to examine the merits of the arguments advanced in support of the appeal, and pay attention to whether any injustice had been occasioned to either party, such that the intervention of the Court is required. [36]

Fourthly, the intention of the Local Court Act 2007 (NSW) is that this Court should have supervision over Local Courts in matters of law. Where small claims are involved, it is important that there be early finality in the determination of litigation. [37]

Fifthly, there is a need for legal costs to be proportionate to the amount in issue. [38] The Local Court has a limited monetary jurisdiction in civil cases. Left unchecked, appeals from its decisions, especially interlocutory decisions, could lead to there being a significant risk that the overall costs of proceedings would be completely disproportionate to the matters in dispute. [39] Accordingly, a relevant consideration in the exercise of the discretion to grant leave is the proportionality between the amount in issue and the legal costs which have been expended. [40] Disproportion between the two may be a further reason for refusing leave, particularly having regard to case management principles and the appropriate allocation of court resources. [41]

In my view, the relevant discretionary considerations weigh overwhelmingly against leave being granted in this case. I have reached that view for a number of reasons.

To begin with, and as I have noted, counsel for the applicant submitted that the question of principle in the present case was “the application of s 79 of the Evidence Act”. Identifying a question of principle for the purposes of an application for leave to appeal requires something substantially more than just vaguely restating a general complaint of error. If the requirement to identify a question of principle could be met by doing no more than articulating such question in the somewhat bald terms put on behalf of the applicant, a grant of leave would be favoured in almost every case. Such an outcome would be absurd, not only because it would have the effect of imposing an unacceptably low threshold, but because it would be completely at odds with the nature of the Court’s jurisdiction to grant leave. [42] In the terms in which it was articulated, there is no question of principle in the present case.

Further, the submission that the Magistrate’s determination had the capacity to “shake the public’s confidence” in the administration of justice in the Local Court, and that this gave rise to a question of general public importance, is one which should be rejected in the strongest possible terms. Having read the transcript of the proceedings, it is clear, with respect, that her Honour applied considerable diligence to the need to deal with the issues before her efficiently, expeditiously, fairly and according to law. On any sensible view, her Honour’s approach to the making of her determination, as well as the determination itself, are likely to enhance, rather than “shake”, public confidence.

Having read her Honour’s reasons, I have come to the view that the applicant has failed to demonstrate an error which is more than merely arguable. To begin with, her Honour’s reasons were delivered ex-tempore, immediately following the conclusion of submissions. It has been repeatedly acknowledged that a Court exercising an appellate function must read reasons delivered in such circumstances with a proper consciousness of the pressures under which Magistrates in the Local Court work when dealing with large volumes of cases in busy lists, and the practical problems they face in making important and difficult decisions with great speed in order to facilitate the progress of proceedings, and the administration of justice. [43]

Moreover, it is evident that her Honour identified, and gave careful consideration to, the issues before her, and the submissions of the parties. She devoted a considerable part of her reasons to identifying the nature and extent of Mr Goodwin’s training, study and experience. Having done so, she applied those qualifications to the subject matter about which Mr Goodwin had expressed his various opinions. In my view, her Honour’s ultimate conclusion was arguably open to her.

Further, it is relevant that in circumstances where the amount claimed by the respondents in the Local Court was $37,917.00, [44] the proceedings have been:

It is also worth noting that from the date of their commencement in the Local Court, the proceedings took more than two years to be completed.

In setting out those matters, I accept that on a number of the days on which the matter came before the Local Court for hearing, there were other cases which took priority. That resulted in this matter not having had the benefit of a full hearing day on some occasions on which it was listed. That is not the fault of either party, much less the fault of the Magistrate. However, even in the absence of any direct evidence, the history of the matter that I have set out sustains the inescapable inference that there is a significant disproportion between the amount in issue and the amount of costs which have already been expended. The authorities make it clear that this is a factor which weighs heavily against a grant of leave. It is also a factor which, in a procedural sense, is reflected in s 60 of the CPA which is in the following terms:

For all of these reasons, leave to appeal should be refused and the proceedings should be dismissed. There are, however, some final observations I wish to make regarding the manner in which these proceedings have been conducted on behalf of the applicant, both in this Court and the Local Court.

The appellate rights of parties to proceedings in the Local Court are fully protected by statute. [45] Civil proceedings in that Court, particularly those in which the costs expended are disproportionate to the amount in issue should, in the normal course, be allowed to proceed to finality without being fragmented by applications being made to this Court seeing to challenge interlocutory determinations. Whilst recognising that each case must obviously be determined according to its own facts and circumstances, bringing an application for leave to appeal against the interlocutory decision of a Magistrate in the Local Court in the middle of proceedings, and then allowing the proceedings in that Court to be finally determined before the application for leave to appeal had been heard and determined by this Court, is not a course which should be encouraged.

Any decision to bring an application for leave to appeal against an interlocutory decision of a Magistrate in the Local Court is one that requires careful consideration. If such an application is brought, the potential consequences of the decision to do so must be carefully managed and addressed by those who have made it. Unfortunately, such management was sadly lacking in the present case. It is apparent that when the summons seeking leave to appeal was filed in this Court, there was no simultaneous application made in the Local Court seeking that the proceedings be adjourned pending the determination of whether leave should be granted. I understand that at some later point (it is not entirely clear when) the applicant sought that the hearing dates of 5 and 8 November 2021 be vacated. That application was apparently refused by the Magistrate, for reasons to which I am not privy. Irrespective of what her Honour’s reasons may have been, the more important fact is that after the summons had been filed in this Court, the proceedings came before the Registrar on no less than 5 occasions, at least some of which were for the purposes of directions. In circumstances where it must have become increasingly apparent that there was a real possibility that the Local Court proceedings would be finally determined in advance of the determination of any application for leave to appeal, no application for expedition of the hearing of the application for leave was even foreshadowed, much less brought. In my view, the primary responsibility for doing so rested with the applicant as the party who had commenced the proceedings in this Court.

The end result of this constellation of factors is that by the time the matter came before me to hear the application for leave to appeal, the Magistrate had made her ultimate determination in the proceedings and had delivered her reasons. In those particular respects that I have identified, the conduct of the proceedings by those representing the applicant has, in my view, been the antithesis of efficiency, and at odds with the just, quick and cheap resolution of the issues referred to in s 56 of the CPA.

Finally, it should be noted that at the conclusion of the hearing, and upon asking the parties for any submissions as to costs, I was informed that the respondents had made an offer to resolve the proceedings in this Court in accordance with the principles set out in Calderbank v Calderbank. [46] Counsel for the applicant made no substantive submission against the application of those principles in making any order for costs. Those circumstances explain order (2) below.

For all of these reasons the following orders were made at the conclusion of the hearing: