Interpretation mandate applied

In what appears to be a Charter first, a judgment is now on Austlii showing an application of the Charter’s interpretation mandate, Charter s. 32(1), to reject a previous interpretation of a provision. The actual decision was made on 1st April, but the reasons were only announced on 1st May and only appears on Austlii very recently. (VCAT seems to be tardy in assigning judgment numbers and seems to be doing so in reverse chronological order.)

Guss v Aldy Corporation Pty Ltd & Anor (Civil Claims) [2008] VCAT 912 is a procedural ruling as part of a long-running dispute about misleading and deceptive conduct in relation to a sale of a Docklands apartment. (The nature of the dispute is not specified, but it’s well known that there have been lots of disputes of this sort in relation to the Docklands, where a fall in property prices has left many off-the-plan purchasers owing more than they own.) Joanne Guss hasn’t made herself popular by being very tardy in pursuing her claim, missing many case management deadlines. The last straw as that she didn’t show up to her latest ‘compulsory conference’ on 22 November last year. The respondents convinced the tribunal member to put the action out of its misery using this provision:

87 If a party does not attend a properly convened compulsory conference-

(a) the conference may proceed at the appointed time in the party’s absence; and

(b) if a member of the Tribunal is presiding and all the parties present agree, the Tribunal, constituted by that member, may- (i) determine the proceeding adversely to the absent party and make any appropriate orders; or (ii) direct that the absent party be struck out of the proceeding.

All the other parties happilly agreed that the claim should be dismissed with costs.

Alas, for Aldy Corporation, that wasn’t the end of the matter. Guss sought to use this statutory provision to revive her claim:

120 (1) A person in respect of whom an order is made may apply to the Tribunal for a review of the order if the person did not appear and was not represented at the hearing at which the order was made.

(4) The Tribunal may- (a) hear and determine the application if it is satisfied that the applicant had a reasonable excuse for not attending or being represented at the hearing; and (b) if it thinks fit, order that the order be revoked or varied.

Aldy resisted the application on the ground that the compulsory conference that Guss missed wasn’it a ‘hearing’. In making this argument, Aldy had some powerful arguments on its side:

  • Compulsory conferences are designed to promote settlement. VCAT’s main role in such hearings is adminstrative
  • The VCAT Act has one division for ‘hearings’ and another for ‘compulsory conferences, mediation and settlement’
  • The provisions on compulsory conferences assume that they take place ‘before’ hearings
  • Pizer’s Annotated VCAT Act takes the view that conferences aren’t hearings
  • There were two decisions of VCAT (including one by its President in 2004 and another in September 2007) holding that mediations (different from compulsory conferences but in the same division) aren’t hearings for the purposes of s. 120

VCAT member Alan Vassie gave three reasons for rejecting these arguments. First, although VCAT mainly plays an administrative role in conferences, its exercise of s. 87 is a judicial function that involves hearing evidence and so forth. Second, s. 120 is a remedial provision and should be interpreted broadly. And, third, the Charter:

Section 32(1) of the Charter provides that, so far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights. One of the human rights enshrined in Part 2 of the Charter is a right to a fair hearing. Section 24(1) (within Part 2) provides that a party to a civil proceeding has the right to have the proceeding decided by a court or tribunal “after a fair and public hearing.”

The following passage from the judgment of Jenkins L.J. in Grimshaw v Dunbar [1953] 1 Q.B. 408 at 416 (cited with approval by Gibbs J in Taylor) seems to me to encapsulate what is meant by a “fair hearing” of a proceeding as a whole:

Be that as it may, a party to an action is prima facie entitled to have it heard in his presence; he is entitled to dispute his opponent’s case and cross-examine his opponent’s witnesses, and he is entitled to call his own witnesses and give his own evidence before the court. Prima facie that is his right, and if by some mischance or accident a party is shut out from that right and an order is made in his absence, then common justice demands, so far as it can be given effect to without injustice to other parties, that that litigant who is accidentally absent should be allowed to come to the court and present his case – no doubt on suitable terms as to costs.

An interpretation of section 120 of the Act that permits a party who fails to attend or be represented at a compulsory conference, and finds the proceeding determined adversely to that party, to have a right under that section to apply for a review and re-hearing of the order making the adverse determination, is an interpretation which is comparable with the right to a fair hearing of the proceeding as a whole on its merits. “Common justice demands”, in Jenkins L.J’s phrase, that a party whose failure to attend or be represented is the result of “some mischance or accident”, or of something for which there is a reasonable excuse, should be allowed to take advantage of the remedial provision, section 120, available to a person who has not attended or been represented at a “hearing” at which order was made. A narrow interpretation of section 120, excluding a compulsory conference from the scope of the word “hearing”, so that the party in question has no recourse other than an appeal, is not an interpretation which is comparable with the right enshrined by the Charter to a fair hearing of the proceeding. An application of the Charter compels the more generous interpretation in my opinion.

Vassie added that the Charter is a reason to distinguish the two earlier VCAT rulings (which could also be distinguished because they involved mediations and because of a still later judgment, in December last year, which applied s. 120 to a compulsory conference, citing VCAT’s statutory obligations to act fairly and in accordance with the rules of natura justice. Note that VCAT is not bound by the Charter’s obligations mandate when making decisions under either s. 87 or s. 120 because of stupid Charter s. 4(1)(j).)

Nice work, for the most part, but, as always, I have some quibbles. First, Vassie didn’t consider whether or not a more restrictive reading of s. 120 would be a reasonable limit on the right to a fair hearing in accordance with Charter s. 7(2). The interpretation mandate only kicks in if a provision is incompatible with a human right; the best NZ authority says that incompatibility only arises – in the case of a statutory provision – if the non-Charter reading of the statute isn’t a reasonable limit on human rights. Second, Vassie also didn’t consider the operation of Charter s. 49(2). This proceeding started in 2004, just when Hulls was musing about the possibility of a Charter in his Justice Statement. I’m no fan of s49(2), of course, but you have to wonder whether or not it’s fair for Guss to rely on the interpretation mandate when the proceeding only got to 2008 because of Guss’s own tardiness in following case management rules. But for Charter s. 49(2), she now gets the full benefit of the Charter in her case agains Aldy Corp, who in turn gets nothing because it’s a corporation. A bit rich?

In case you’re wondering, Guss’s excuse for not turning up to the conference was that she had mis-diarised the conference on the next day. Although she didn’t really explain how that happened – and was tardy in making her s. 120 order too, blaming her lawyers – Vassie made the order re-instating the action. Guss, however, will pay the costs of the s.87 and s.120 matters. Let the conciliation begin!

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