Appellant v Respondent

(a) The proprietors were permitted to assert new claims and to rely on evidence, notice of which had not been given to the builder.

(b) The Tribunal did not provide an equal opportunity to the builder to present its case.

4 There was no issue before me that, notwithstanding the statutory requirement to conduct its proceedings in an informal manner, the Tribunal is under a legal obligation to act fairly, to comply with the rules of natural justice and to give each party a reasonable opportunity to call evidence relevant to the issues before it and to examine, cross-examine or re-examine witnesses and to make submissions.[1] Furthermore, when, as here, the parties were not represented, there is a special burden upon the Tribunal to ensure that these obligations are complied with.[2] It was accepted, too, that an appeal will succeed on such a ground only where it is demonstrated that a denial of procedural fairness by the Tribunal could have caused a real injustice to the appellant by affecting the outcome of the proceeding.[3]

The Factual Background

5 The directions given by the Tribunal on 12 February 2004 included orders that by certain specified dates Mr Stevens and the builder file and serve points of claim or points of defence together with a copy of every document that he or it intended to use to establish his claim or its defence and file and serve any expert reports and outlines of evidence for each of the witnesses to be called at the hearing. On 14 April 2004 further directions were given by the Tribunal which, in part, amended the times for the exchange of expert reports and witness outlines.

6 The proprietors filed their points of claim on 9 March 2004 in which they claimed the sum of $31,690.40 as the cost of the rectification work. A schedule to the points of claim contained particulars of the defective work by way of an unpriced list comprising 28 items ("the Particulars List"). In its points of defence, filed on 25 May 2004, the builder denied all allegations and then set out its response to each of the 28 items in the Particulars List.

7 Mr Stevens filed and served outlines of evidence for both his wife and himself, but no expert reports. The builder filed and served outlines of evidence for its director, Dominic Ambrogio, and its construction supervisor, Peter Mills, and expert reports by Charles Lee and Thomas Brown. Mr Lee, a registered builder, a building consultant since 1991 and a claims inspector and inspections administrator with the Housing Guarantee Fund Ltd for 16 years, had prepared a report in which he had considered and dealt with each of the 28 items in the Particulars List. Mr Lee concluded that only eight of the 28 items required further work to be carried out by the builder at a cost which he estimated to total $613.75. Mr Brown's report related to the finish of the plaster work which he said was satisfactory.

8 At the hearing before the Tribunal neither party was legally represented. Mr Stevens, who is a panel beater by trade and in July 2004 was employed as a truck driver, represented himself and his wife. The builder was represented by Mr Ambrogio. It appears from the transcript of the hearing before the Tribunal that Mr Stevens failed to understand the need to call expert evidence to prove the cost of rectification. When this was explained to Mr Stevens he produced a quotation prepared by a builder, Gary Barber, showing an itemised cost of rectification work. At the suggestion of the Tribunal Mr Stevens called Mr Barber on the second day of the hearing to give evidence by telephone.

9 As it happened, the quotation handed to the Tribunal on the first day of hearing was not the correct document. Mr Stevens rectified this error at the start of the second day of the hearing by replacing it with another quotation dated 16 February 2004 which contained a list of 22 items of rectification work at a cost totalling $31,690.40 ("the Barber Rectification List"). Not only did the 22 items in the Barber Rectification List not accord with the 28 items in the Particulars List, it also contained an extra six items from the quotation "tendered" the previous day. Whilst the extra six items were relatively minor, totalling only $739.23, this change of position during the course of the hearing only aggravated what was already a quite unfair situation for the builder. Mr Ambrogio's complaint after lunch on the first day when he was cross-examining Mr Stevens that he had not had "time to analyse" the first Barber quotation, had been simply brushed aside by the Tribunal:

"You have got it now, ... ask the questions you want to ask about that ... You have had lunch."

10 Mr Stevens gave evidence by reference to a video he had taken at various intervals during and after the work and as recently as the weekend preceding the hearing. Mr Ambrogio complained about the lack of prior opportunity to view the video. There was no reference to the video in Mr Stevens' outline of evidence nor was it mentioned in the list of documents he intended to rely on, which he had been directed to provide to the builder. However, Mr Stevens had mentioned a video in correspondence to the builder in January 2003, well before the application to VCAT, and had offered to make it available for viewing. This offer had not been taken up by the builder. As part of his case Mr Stevens also "tendered" several other documents, none of which had been mentioned in the list of documents on which he intended to rely.

11 When Mr Ambrogio was attempting to cross-examine Mr Stevens, and when he came to give evidence himself, he expressed some doubts about the authenticity of the video and more particularly that it could have been taken in such a way as to distort or exaggerate or inaccurately portray the alleged defects. In response to a question from the Tribunal, Mr Ambrogio agreed that he was saying that the video was "fabricated". The Tribunal was highly critical of this allegation. Counsel for the builder submitted that thereafter the issue of "fabrication" took on a life of its own in the mind of the Tribunal and that the course of the hearing became side-tracked into investigating whether or not the video was a "fabrication" rather than the Tribunal deciding whether or not the alleged defects existed and if so what was the reasonable cost of rectifying them. It was submitted that Mr Lee's evidence, for example, was dominated by the Tribunal continually asking him whether he considered the part of the video relating to each particular item was "fabricated".

12 There were other complaints about the way in which the Tribunal conducted the hearing. Given the view I have reached in this matter, it is unnecessary to detail these complaints.

13 The Tribunal accepted Mr Barber's evidence and held that Mr Lee's evidence did not assist greatly "because of the way in which it was elicited." As previously stated, the Tribunal's decision was that the builder had to pay Mr Stevens the sum of $31,690.40, which was the exact amount of Mr Barber's second quotation. This would indicate that the claim was entirely successful. It is not strictly correct, however, as it appears that Mr Stevens also sought to recover an additional $4,623 for the replacement of the fascia. Although a copy of a quotation for the amount from Jim's Roofing and Guttering was "tendered" by Mr Stevens handing it to the senior member constituting the Tribunal, there was no reference to this claim in the Tribunal's reasons. It is not clear whether this was because the Tribunal rejected the additional claim because it went beyond the amount sought in the points of claim, or because the Tribunal held that the quantum of the claim had not been proved, or because of some other unstated reason. Alternatively, it may have been simply overlooked. In any event, the quotation for the replacement of the fascia had not been included in the list of documents on which Mr Stevens intended to rely.

The New Claims

14 In the builder's notice of appeal it was alleged that 14 of the 22 items in the Barber Rectification List were new claims of which no notice had been given to it. In his affidavit in support of the application for leave to appeal sworn on 1 September 2004, Mr Ambrogio repeated that 14 of the 22 items were new claims although he conceded that in respect of four of them only part of the item was new. Mr Stevens responded to this issue in an affidavit sworn on 23 September 2004. He attempted a reconciliation of the two lists by setting out which of the 28 items in the Particulars List he said related to the alleged new items in the Barber Rectification List. However, he did not dispute that item 21 in the Barber Rectification List was new.

15 Counsel for the appellant submitted that analysis of Mr Stevens' attempted reconciliation showed that it was clear that there were new items in the Barber Rectification List. His table comparing the alleged new items with the items said by Mr Stevens to be the same item or items in the Particulars List demonstrated that this was the case. For example, complaints about damaged cupboards and drawers in the kitchen and about the inadequate depth of the kitchen cupboards causing other defects in the kitchen were said to be sufficient notice to the builder that the proprietors were claiming the cost of removing and replacing the whole of the timber kitchen. Further, despite the valiant efforts of the respondent's counsel to support his client's attempted reconciliation, he had to concede that there was no reference to tiling in the Particulars List.

16 Accordingly, I am satisfied that seven of the 22 items in the Barber Rectification List were new claims and that a further two were partly new claims. The seven new items were as follows:

Supply tiles, grout, glue (existing tiles discontinued)

Remove and replace 89 square metres of tiles, old tiles are discontinued

These seven items totalled $18,375.68 or 58% of the amount ordered to be paid to Mr Stevens.

17 The two partly new claims were:

Repair ceilings in master bedroom, kitchen and meals x 3 coats, seal, undercoat and top coat

Paint lounge bay window, dining window and bedroom 3 window

Obviously, it is not possible to state the cost of the partly new claims in items 5 and 18 (complaints about the ceilings in the kitchen and meals area and the bedroom 3 window were not mentioned in the Particulars List), but allowing a small amount for these items takes the cost of the new items to nearly 60% of the amount ordered to be paid to Mr Stevens.

18 Although counsel for the respondent disputed that Mr Barber was giving expert evidence, it seems to me to be quite clear that, in expressing the view that these were the defects which needed to be rectified and that the stated costs of each item were fair and reasonable, Mr Barber was purporting to give expert evidence. This meant that his report, which should have been filed and served prior to the hearing, was required to comply with Practice Note VCAT 2: Expert Evidence. The Barber Rectification List failed to do this in numerous respects, including failing to state Mr Barber's qualifications and experience, failing to set out his instructions, failing to refer to other documents which he had taken into account in preparing his report, failing to give the reasons why the rectification works were recommended and failing to state whether other remedies were "a reasonable alternative". In any event, even if Mr Barber was not giving expert evidence, the proprietors were still required by the Tribunal's directions to file and serve prior to the hearing an outline of his evidence.

19 In my opinion, it is clear that the proprietors (or Mr Stevens), by withholding the Barber Rectification List and not providing any expert report (or outline of evidence) by Mr Barber, were in flagrant breach of the Tribunal's earlier directions. It is difficult to understand how it was that the proprietors did not provide the builder with a copy of the Barber Rectification List or why they listed the defects in their points of claim in a way that did not accord with Mr Barber's report. They had, after all, received it only three weeks prior to filing the points of claim. This breach of the Tribunal's direction may have been due to a want of appreciation by them of the significance of the document, but, even so, the builder should not have been required to answer a case of which it had no notice.

20 It is clear that, both before courts and tribunals, a party is entitled to a fair trial at which he, she or it can put his, her or its case properly.[4] It has been held to be a:

"fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him."[5]

At its most basic, this involves a party knowing "what case it must meet before the hearing commences."[6] In the words of Gillard J:

"The statutory right to conduct the proceeding informally ignoring rules of evidence and the practices of [sic] procedures applicable to courts of record, does not entitle the Tribunal to completely ignore the basic principles of natural justice which are designed to give a party affected by a decision the opportunity to be heard after being apprised of the allegations that are put against him and being given a reasonable opportunity to prepare himself."[7]

Therefore, in my opinion, the Tribunal ought to have given the builder the opportunity to investigate the new allegations and to make such response to them as might be appropriate. Instead, it required the builder to continue without any adjournment when a large part of the claim against it was new.

21 I am, therefore, satisfied that the builder was so disadvantaged by the non-production of the Barber Rectification List that the proceeding before the Tribunal has miscarried. Specifically, I find that the builder was not allowed a reasonable opportunity to call evidence or to examine and cross-examine witnesses in respect of the Barber Rectification List contrary to s.102(1)(a) and (b) of the Victorian Civil and Administrative Tribunal Act 1998 and that the withholding of the Barber Rectification List and the failure to provide any expert report by Mr Barber was a breach of the rules of natural justice contrary to s.98(1)(a) of the same Act. The appeal must, therefore, be allowed.

22 In the circumstances, it is not necessary that I consider the many other issues raised by the grounds of appeal. Since there is to be a re-hearing, I will refrain from expressing any view upon these matters.

23 The order of the Tribunal must therefore be set aside and the matter remitted to the Tribunal, differently constituted, for rehearing.

[1] Sections 97, 98 and 102 of the Victorian Civil and Administrative Tribunal Act 1998

[2] See, for example, Winn v Blueprint Instant Printing Pty Ltd [2002] VSC 295 at [9] per Byrne J; Collection House Ltd v Taylor [2004] VSC 49 at [26]- [32] per Nettle J (as his Honour then was).

[3] Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 at 145 per Mason, Wilson, Brennan, Deane and Dawson JJ

[4] Jones v National Coal Board [1957] EWCA Civ 3; [1957] 2 QB 55 at 67 per Denning, Romer and Parker LJJ; Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 at 145 per Mason, Wilson, Brennan, Deane and Dawson JJ; Palmer Tube Mills (Aust) Pty Ltd v Semi [1998] 4 VR 439 at 452 per Brooking JA, with whom Tadgell and Buchanan JJA agreed.

[5] Gould v Mount Oxide Mines Ltd (In liq.) [1916] HCA 81; (1916) 22 CLR 490 at 517 per Isaacs and Rich JJ. See also Banque Commerciale SA (In liq.) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J.

[6] Barbon v West Homes Australia Pty Ltd [2001] VSC 405 at [16] per Ashley J

[7] Francis-Wright v Victorian Civil and Administrative Tribunal [2001] VSC 35 at [109] per Gillard J