Appellants v Respondent

1 The appellants contracted for the respondent to manufacture a set of windows for a house they were building. They were dissatisfied with the result. They therefore brought proceedings in the Victorian Civil and Administrative Tribunal. A senior member heard the complaint. He found against the respondent on the question of liability. It was, accordingly, necessary to decide upon an appropriate remedy. The appellants assert that it was here that the senior member fell into error.

2 The appellants had, in their form of application to the Civil Claims List of VCAT, put a value on their claim of $23,182.90. This was made up in part of the sum of $17,860 being, first, "full reimbursement of cost of windows" and, secondly, the sum of $560 being the cost of replacement of the flyscreens. The Tribunal allowed these amounts and, thus, on 14 February 2005 ordered that the defendant pay "forthwith" the sum of $18,420, which is their combined total. The Tribunal further ordered that within seven days of payment the appellants return to the respondent the windows and flyscreens originally delivered by that company.

3 The appellants were paid, not forthwith but eventually, the amount that the Tribunal ordered they receive. It seems that the delay resulted from the respondent's fear (justified, as the evidence shows) that when paid the appellants would not include the window frames in the materials to be exchanged following their receipt of the purchase price. This (the purchase price) was paid to them only after both the registration of the Tribunal's order as a judgment of the Magistrates' Court at Ringwood, and the issue of a warrant of seizure and sale. The appellants thereafter returned or sought to return all the glass but not the window frames. They claimed that the Tribunal never intended to order such return and did not in fact so order. They adopted this position, according to a statement made to the Tribunal on 4 July, because the frames were fixed into the building to such an extent that removing them within seven days was totally out of the question, and the Tribunal was not to be taken as ordering the impossible; whereas removing the glass alone could be done within the time allowed by the Tribunal's order.

4 That aspect of the dispute went back to the Tribunal on 4 July last year. The Tribunal then directed, pursuant to s.119 of the Victorian Civil and Administrative Tribunal Act 1998 (i.e. the "slip rule" provision) that the orders made on 14 February be amended. By the amendment it was made clear that the return of the windows included not only the return of the glass but also of the frames. Ignoring the appellants' claim that the excision of the frames from the building would take months rather than days, the Tribunal without any reference to this potential problem made no change to the time of compliance. The order of 14 February was simply amended to read as follows:

"2. Order the [appellants] to return to the respondent the 'Comfort Plus' windows (including glass and frames) and flyscreens within seven days of this order".

5 The appellants have obtained leave to appeal against this order. Several versions of the notice of appeal have been put forward. That presently before me was amended by leave granted by me today. The question of law upon which the appeal is now brought is formulated in the further amended notice of appeal as follows:

"The Tribunal failed to act fairly and according to the substantial merits of the case as required by s.97 of the Victorian Civil and Administrative Tribunal Act 1998 in failing to inform the appellants that in seeking full reimbursement of the cost of windows and flyscreens, if successful, they would be required to return the windows including frames and flyscreens."

6 Section 97 of the Victorian Civil and Administrative Tribunal Act provides that in all proceedings the Tribunal must act fairly and according to the substantial merits of the case. The present position is that the respondent - having paid over the $18,420, plus interest plus costs plus fees; a total of $18,984.73 - requires (as it is entitled pursuant to the Tribunal's orders to do) the return of the frames. The appellants contend that this would be unjust and, accordingly, a result of the kind which s.97 seeks to avoid, because the frames cannot now be detached from their surroundings without causing considerable damage to the building. The first appellant made this point to the Tribunal on 4 July when he said: "This latest claim by the respondent for the return of intact frames which are an integral part of the cottage, the cost of taking down curtains, removing floor tiles and taking off the arches is $40,000". The senior member then said "So these frames are part of your building?" The first appellant responded:

"They're part of our building. They have curtains attached to them. They have tiles attached up to the architraves. You have to take off the curtains, break out the tiles ... lift the carpets, take off floor and wall tiles and we'd have to strip all the arches and replace them. We would have to saw ... the frames out and ... we'd have electricity running through them, grooves, and moulding put over it and painted extensively".

7 The respondent submits that the appellants never asked for any relief other than rescission, and are now stuck with their choice. There is no mistake at law because the Tribunal did precisely what the appellants asked it to do. Nor, in these circumstances, was the Tribunal bound - by s.97 or otherwise - to do anything in order to act fairly and in accordance with the substantial merits of the case but follow the appellants' expressed wish.

8 The appellants put the matter very differently. They disclaim any settled intention to seek any particular form of relief. When the form of application to bring the dispute into the Civil Claims List of VCAT was made out, they completed the box marked "Payment of damages" and the box marked "Loss, injury or damage because of a contravention of the Fair Trading Act 1999". They also completed the box marked "Order that a party has to do or does not have to do something". They added as part of their completion of that box "Either refund moneys in full or comply with original request for double-glazed windows".

9 Further support for this aspect of the appellants' case is to be found in the transcript of the proceedings of 14 February. The first appellant was asked by the senior member:

"Q. You have also indicated in your claim form you received a quote for replacement of clear laminated safety glass, $9,500 and replacement double-glazing, $12,5000? A. Yes. Q. That's part of your claim, is it? A. Well, that's the quotes that I've had so far."

10 This, in my opinion, is clearly inconsistent with a claim for repayment of the purchase price. It is consistent with a claim for damages, not with a claim for restitution.

11 The respondent relies on the following exchange between the senior member and the first appellant on 4 July:

"Q. In your history of dispute you specify reimbursement of cost of windows, $7,000 from 16 April 2004? A. Yes. Q. And $1,095 on 12 July 2004? A. Yes. Q. And $8,910 on 24 May 2004, totalling $17,860? A. That's the amount. Q. These are the amounts you paid, are they? A. Yes ... . Q. So, in all, you've paid to the respondent that amount, have you, $17,860? A. No ... we ordered them [I interpolate to say "the flywire screens"] in brown. We accepted that as our mistake. I rang up and asked what a new set of white flywire screens would cost and it was $560 and I ordered them."

12 It is to be noted that the final question in this exchange was not "And this is your claim, is it?". It was "So, in all, you've paid to the respondent that amount, have you?" It is also to be noted that this passage immediately precedes the senior member's question referring to the quote for replacement of clear laminated safety glass where the senior member asked "That's part of your claim, is it?"

13 Given the exchanges revealed in the passages to which I have referred above, I reject the submission that the appellants sought one form of relief, restitution, to the exclusion of all other forms. I also think that it was in the particular circumstances of this case incumbent on the Tribunal to explain to the appellants the alternative forms of relief available; to explain what restitution entailed; and to enquire of the appellants whether that was the relief which they sought.

14 The respondent submitted that this is to place too great a burden on the Tribunal. I disagree. The form of relief to be granted to a successful claimant must always be addressed by the court or tribunal whether or not that aspect of the case is in issue in the sense of being in contest. It is not difficult and it involves no necessary element of partisanship to explain any alternatives in the possible forms of relief, and to enquire of an unrepresented party what relief it seeks and of the other (represented or not) whether the grant of that relief is opposed.

15 In this case, it ought to have been clear, it seems to me with respect, that an order to return the windows might cause difficulty. Even if in February the Tribunal was not aware that the windows were fixed to the building, that possibility clearly remained. As the senior member himself commented on 4 July, "They [the appellants] perhaps should have foreseen that in seeking a refund they would have to return the goods if they were successful and that this might mean disengaging the frames from their premises". It seems to me, with respect, that the senior member ought equally to have foreseen the same problem himself. He, after all, is what the appellants were not: a lawyer with presumably an adequate or better knowledge of the law relating to restitution and an appreciation of the problems which arise if restitution in integrum cannot be effected.

16 In coming to the conclusion that the Tribunal failed to act in accordance with s.97 of the Victorian Civil and Administrative Tribunal Act 1998, I also take into account the fact that on 4 July the Tribunal failed to make any allowance for the circumstance, put clearly to it by the appellants, that an order to return the window frames within seven days could not be complied with. The Tribunal gave no reason for its failure to address this aspect of the case and no reason for providing in its order that the windows be returned within seven days. That in itself, it seems to me, was a result which was not fair; and accordingly was not in accordance with s.97. More substantially, it seems to me that a result which in the circumstances might be unjust to the appellants by requiring them to return window frames, which in turn would necessitate damage to their building, would not be in accord with the substantial merits of the case. It also seems to me that because the Tribunal is bound to act in accordance with those substantial merits, any failure to do so must involve a failure to act in accordance with law and therefore be the proper subject of an appeal.

17 There is not sufficient evidence before me to enable me to decide what is now the proper form of relief. That decision must, it seems to me, remain with the Tribunal; and this matter must be remitted to it for the determination of that question. It may be that the parties will need to call evidence when the matter does go back to the Tribunal so that a proper and properly informed decision about the appropriate relief can be made. There is nothing before me to indicate that the failure to return the window frames would cause the respondent an injustice; but it is certainly open to the respondent to argue that such would be the result. It seems to me that I should require of the Tribunal that it consider the arguments put to it by both sides on the question of the appropriate remedy and, having regard to the relevant evidence and submissions, come to a decision which accords with s.97.

18 For those reasons I propose to allow the appeal and direct that the matter be remitted to the Tribunal for determination of the appropriate relief to which the appellants are, in the circumstances, entitled.