Vettese & Anor v Kemp & Ors A25/2000 [2001] HCATrans 390 (17 August 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A25 of 2000

B e t w e e n -

FIORENDINO VETTESE

First Applicant

LISA ANN VETTESE

Second Applicant

and

KEITH CHARLES KEMP

First Respondent

LOUISA BERUITE KEMP

Second Respondent

FENWICK ENNIS PTY LTD

Third Respondent

COLIN VINCENT

Fourth Respondent

Application for special leave to appeal

GLEESON CJ

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON FRIDAY, 17 AUGUST 2001 AT 9.15 AM

Copyright in the High Court of Australia

__________________

MR D.M. QUICK, QC: May it please the Court, I appear for the applicants. (instructed by Carabelas & Co)

MR S.W. TILMOUTH, QC: May it please the Court, I appear with my learned friend, MR P.G. D'ANGELO, for the first and second respondents. (instructed by D'Angelo Kavanagh)

MS R.A. LAYTON, QC: May the Court please, I appear for the third and fourth respondents with MR R. BONIG. (instructed by Fountain & Bonig)

GLEESON CJ: Yes, Mr Quick.

MR QUICK: May it please the Court, the Full Court in these proceedings proceeded on the basis that the decision of this Court in Bryan v Maloney applied to the claim in particular in respect of allegations of negligence in construction. This appears from paragraph 50 and 51 of the judgment, the reasons for judgment, particularly of Justice Duggan, in whose judgment Justice Bleby agreed. In our submission, that was erroneous. It is erroneous for two reasons. Bryan v Maloney is distinguishable in two material respects. First, it is distinguishable on the basis that a substantial reason for deciding that a duty of care existed in Bryan v Maloney was the existence of a contract for construction between the original owner and the builder. That was an essential part of the reasoning in Bryan v Maloney and the factor is absent in the present case.

HAYNE J: But was the relationship between plaintiff and defendants in this case closer or more remote?

MR QUICK: Some would say closer. Some would say more remote. It is more remote in the relevant respect, that respect being the existence of a duty of care arising out of the obligations undertaken by a builder under contract for an owner. In that respect it is more remote.

HAYNE J: The principal complaint founding this action was, was it not, that misrepresentations had been made on sale?

MR QUICK: That is so, your Honour, but, in our submission, that does not go to the duty of care of a builder in construction.

HAYNE J: But if we were to give leave, why would we ever get to the issue you have just identified?

MR QUICK: Your Honour, because it is still one basis - if, for example, the Court found that there was misrepresentation, the Court would then have to consider the claim for indemnity against the third party. If it found that there was no misrepresentation or that there was a defence under section 7(2) of the Misrepresentation Act, then it would find that there was no cause of action under misrepresentation and the only cause of action left would then be the cause of action as against the builder as a constructor pursuant to - in this case in the absence of a contract for construction, with all that that entails.

HAYNE J: So the point emerges if, but only if, a series of earlier points are resolved in a particular way; is that right?

MR QUICK: No, your Honour. With respect, it emerges from the outset. Those are alternative causes of action which need to be dealt - or alternative cause of action and defence which need to be dealt with in order for the parties that I represent to be successful. They are individually very brief points to be made and one of them, that concerning the Misrepresentation Act, is probably, in our submission - or, in our submission, is a question requiring or deserving of special leave by this Court.

GLEESON CJ: Am I right in thinking that the only division of opinion in the Full Court concerned the claim for contribution by the vendors against their agents?

MR QUICK: No, consequentially it also concerns the defence under the Misrepresentation Act. If the claim for contribution against the - I am sorry, Justice Debelle decided - and this is at page 98, I believe, your Honour - Justice Debelle considered, first of all, the issue of misrepresentation. He then found that there was negligence, indeed - this is at page 99 "probably recklessness by the agent Vincent" He then went on to find that as a consequence he disagreed with the finding that the defence under section 7(2) of the Misrepresentation Act did not apply. So that, in essence, the only division of opinion on fact is the issue of whether or not Mr Vincent did know of the correctness or incorrectness or did make a representation.

GLEESON CJ: That turned on the finding of fact on the bottom of page 94 and the top of 95; is that right?

MR QUICK: It does, your Honour.

GLEESON CJ: Accepting that finding of fact as correct, where do you go from there?

MR QUICK: If that finding of fact is correct, then the applicants would have a defence under section 7(2) of the Misrepresentation Act and they would have a defence, we would submit - well, not so much a defence, but there would be a finding that there is no liability in negligence because there should have been found no duty of care in the circumstances. So we have to win either on the Misrepresentation Act to avoid liability to the plaintiffs or, alternatively, but not cumulatively - alternatively, we get an indemnity from the third party if we fail in the defence against the plaintiffs.

Your Honour, I may not have made myself crystal clear. Your Honour, in order to succeed, that is to escape the liability imposed on the defendant by the judgment, it may either escape liability vis-a-vis the plaintiffs. In that case it needs to win the defence in the action in negligence and the defence in the action under the Misrepresentation Act. If it does not win under the defence under the Misrepresentation Act, it will then succeed in its claim for indemnity as against the third party and thus at least obtain some assistance in meeting the claim of the plaintiffs.

GLEESON CJ: I am interested in something slightly different, although related, and that is I want to identify the point of departure between the majority and the minority in the Full Court.

MR QUICK: It is on the issue of fact as to whether or not the agent knew or made - - -

GLEESON CJ: The issue of fact at pages 94 and 95?

MR QUICK: It is, your Honour.

GLEESON CJ: That was the only point of division?

MR QUICK: I believe so, your Honour.

GLEESON CJ: Yes.

MR QUICK: May it please the Court. There is a second matter arising from the decision, or the reasons for decision, particularly of the majority, including Justice Toohey, in Bryan v Maloney, and that is that case is concerned with a latent defect. It is not the major point that is argued here as to special leave but it is a matter that also distinguishes Bryan v Maloney and the present case. There were sufficient findings as to the latency of the defect and as to the nature of the defect. They appear in the trial judge's reference in his discussion of the facts at pages 3, 4 and 5 of the judgment, pages 6, 7 and 8 of the application book.

It is our submission that the case is worthy of special leave, first, because it in its conclusion differs from conclusions reached, particularly by Justice BrookingMinister for Immigration and Multicultural Affairs v Singh In Zumpano v Montagnese, which is referred to in paragraph 2 of our argument on page 5. It is also inconsistent with expressions of opinion by two members of the Court of Appeal of the Supreme Court of New South Wales in Woollahra Municipal Council v Sved and with reservations as to the extent of Bryan v Maloney by the Court of Appeal of the Supreme Court of Queensland in Fangrove's Case, also referred to on page 5 in paragraph 2 of our outline.

The judgment of the Full Court in this court, that is in the Supreme Court of South Australia, therefore may lead to two consequences. First, it may lead to cases in the other jurisdictions to re-examine the correctness of those decisions, particularly because the extent of the discussion in Bryan v Maloney in Zumpano's Case is limited principally to that of the judgment of Justice Brooking, albeit that it is a very extensive discussion, and because the findings in Sved's Case and Fangrove's Case, or decisions in those cases, are not unanimous statements but are by individual members of those courts.

The effect of this, in our submission, is likely to give instability to the situation as it was emerging in the other three jurisdictions to which I have referred. Moreover, in this jurisdiction in South Australia judges at first instance and other courts of appeal, unless convinced that Bryan v Maloney is wrong in the first case are bound by and in the second case will need - - -

HAYNE J: Not much to the point whether they are convinced it is wrong or not. They are duty bound to follow it.

MR QUICK: The Full Court, your Honour - that is certainly the case with respect to single judges.

HAYNE J: And the Full Court, Mr Quick, and the Full Court.

MR QUICK: I am happy to adopt what your Honour says and I certainly do not have any reservations about the correctness of what your Honour says, but I adopt it and that is an extremely good reason why this Court should now resolve this case as a means to determining the scope of Bryan v Maloney in cases where there is no building contract as between owner and builder and possibly as well in cases involving what might or might not be described as a latent defect.

Your Honours, I expect it to be put against the application that the issue is one which only lately emerged. That is true. It was not argued in the same way in which I am putting it forward to this Court. It was not argued in that way in the Full Court or at trial. But it is the case that the issue of the existence of a duty of care as in construction arose on the pleadings and the issue which is involved is one - - -

HAYNE J: But the reason it did not emerge earlier is, is it not, that the focus was on misrepresentation? This case was run as a misrepresentation case.

MR QUICK: No, with respect, your Honour, I am not able to say that from personal observation - I was not counsel in either of the two courts below - but, in my respectful submission, that could not be the case, your Honour, because of the extent to which the learned trial judge and the Court of Appeal have examined the physical situation and examined and found in the cause of action on negligence. Both arose and there is sufficient evidence for the matter now - and findings unchallenged and uncontroversial now to go before this Court as a suitable vehicle. Your Honour, I submit that there was no election not to raise these matters before. It was, so far as I am aware, a matter of oversight.

If the Court pleases, the matters involved are, in our submission, pure questions of law. They are therefore matters which do not involve any prejudice to a party in the conduct of the proceedings and, in particular, the trial. They can be dealt with at this stage. When this point was taken, I had quick resort to decisions of this Court in connection with the circumstances in which this Court will entertain an appeal on a point which has not been raised below. I am comforted in my submissions to the Court by drawing attention to the principle that the Court will now take too narrow or technical a view of the matter where it involves particularly a matter of law.

If it is of assistance to the Court, I will proceed briefly with the misrepresentation point as a separate point. What is involved is interpretation of a local statute, albeit that it is one which differs from a statute in the ACT to somewhat of the same effect. It is a short point and a point of construction of the statute. There are no decisions of the Supreme Court of higher standing than the decision in this case and what is involved is a very brief examination of one section of a statute. May it please the Court, those are the submissions for the applicants.

GLEESON CJ: Thank you, Mr Quick.

This case turned upon the application to the facts of settled principles. The only relevant division of opinion in the Full Court of the Supreme Court concerned the claim for contribution by the vendors against their agents, but that also turned ultimately on the facts and, in particular, on the finding of the majority that the vendors had misled the agent. The case does not raise an issue suitable for a grant of special leave.

Insofar as the applicant seeks to raise in this Court arguments not advanced in the courts below, because of the way the case was conducted and the findings of fact made, the case is not a suitable vehicle for the consideration of the issues the applicant now seeks to raise. The application will be dismissed with costs.

AT 9.32 AM THE MATTER WAS CONCLUDED