Solicitors:
Not applicable
File Number(s): AP 16/23175
Decision under appeal Court or tribunal: Civil and Administrative Tribunal
Jurisdiction: Consumer and Commercial
Citation: Not applicable
Date of Decision: 14 April 2016
Before: M Dicker, Senior Member
File Number(s): HB 15/66475
[2]
Background
This appeal arises out of a decision published in the Consumer and Commercial Division of the Tribunal on 14 April 2016. The appellant is the homeowner and the respondent to the appeal is a company which agreed to undertake a bathroom renovation to the appellant's premises. At the hearing of the appeal the appellant represented herself. The respondent was represented by Mr P Occhiuto, a director.
The appeal was filed on 16 May 2016 and the appellant says that she received notice of the decision on or about 21 April 2016. Accordingly, the appeal appears to have been filed in time.
It is necessary to explain what occurred previously in these proceedings.
The respondent filed an application in the Tribunal in 2015. That application resulted in consent orders being made by the Tribunal on 9 October 2015. Order 1 provided that the applicant (now the respondent to the appeal) is to carry out "the following work on or before 20 November 2015 in a proper and workmanlike manner". A number of items were then specified under the heading "Details of Work Order". By order 2 the Tribunal ordered by consent that the appellant was to pay to the respondent $13,875.00 on or before 10 October 2015 and $449.00 on completion of the work specified in order 1. In addition the orders made by the Tribunal state that the sum of $14,324.00 is in "full and final payment in settlement of the contract price and the works carried out".
Bardon v Occhiuto Enterprises Pty Ltd [2016] NSWCATAP 191 | Case summary | Zoe
The parties both acknowledge that the relevant contract referred to above is a contract in writing dated 6 December 2014 which has the heading "Caracolla Design and Renovation". It also contains the heading "Quotation" and "Bathroom Renovation". The contract then lists items which are to be undertaken under the headings Demolition, Plumbing, Electrical, Construction, Preparation, Finishes and Completion. Each of these items are further detailed including a description of the scope of works.
On 14 December 2015 the appellant filed a notice to Renew Proceedings in the Tribunal. The appellant sought compensation in the sum of $5,000.00 and claimed that the order of 9 October 2015, referred to above was not fully complied with. Particulars of non-compliance were supplied.
The appellant's application to renew the proceedings was dismissed at the hearing which occurred on 13 April 2016. The reasons for decision were published the following day, 14 April 2016. This is the decision under appeal and we shall refer to it as "the Decision".
The Decision referred to the fact that the parties discussed the matter with the help of a mediator and prepared a written agreement which was signed by both parties. That agreement commences with the words:
The respondent agrees to allow Occhiuto Enterprises to access the site to complete the bathroom in accordance with...
Then followed a list of items to be undertaken. The agreement also stated that the respondent will make a payment by 10 October 2015 of $13,875.00 equal to 85% of the outstanding $16,324.00 to be paid. The balance of $449.00 was to be paid later.
We were provided with a transcript of the hearing before the Tribunal on 9 October 2015. It is apparent that the following occurred at the hearing:
1. Mr Phillip Occhiuto represented the applicant (the respondent in the appeal);
2. The appellant was present and assisted by Mr Chris Holmes (who we are informed by the appellant is her brother in law);
3. The Member was handed the agreement reached by the parties before the mediator and using that agreement typed up the orders of the Tribunal;
4. The orders were the subject of discussion between the Member and the parties and as the Member typed up the items in the work order obtained the parties consent to the proposed wording;
5. There was discussion as to the terms of order 2 and it was agreed by the applicant that there was a discount of $2,000.00 (page 7, line 16 of the transcript) and that the respondent (now the appellant) agreed with the proposed figures and the discount (page 9, line 21 of the transcript);
6. The order was then read out by the Member in full and the Member asked whether the parties agreed. Both parties stated that they consented to the orders (page 10, line 39 to 46 of the transcript);
7. Mr Holmes raised the question of the tap (page 10, line 50 of the transcript) and Mr Occhiuto initially agreed to "put it on there" but then stated that he would not put that on the order (page 11, line 30 of the transcript). However, he agreed to have the plumber "have a look" (page 11, line 31 of the transcript);
8. The respondent (now the appellant) asked whether she could come back and the Member replied that she could not come back (page 12, line 22 of the transcript). The Member then said the following: "If he does not do the job, you can come back, and if he does this work you cannot come back for anything else, or change your mind". The respondent replied "okay". The Member also said: "after November you will not have anything further to do with it" (page 12, line 40 of the transcript);
9. The Member then made the orders which were stated to be by consent.
The essence of the Decision was that the terms of the handwritten agreement and the terms of the consent order both indicated that the parties had agreed that the only items for the respondent to complete were those specified in the orders of 9 October 2015. The appellant's contention that the respondent was obliged to complete the bathroom entirely, not just the items specified in the 9 October 2015 order was rejected. The Member found that on the balance of probabilities the appellant had failed to prove that the respondent was in breach of the orders made on 9 October 2015. The Decision referred to the respondent's submission that only the items specified in the order of 9 October 2015 had to be completed and found that that interpretation of what had been agreed was correct.
[3]
Notice of appeal
In the notice of appeal the appellant lists eight items which the appellant says are required to be undertaken by the respondent in order to complete the bathroom. These are items two to nine in an attachment to the notice of appeal. The appellant also seeks compensation of $5,000.00.
The notice of appeal may be summarised in the following way:
1. The appellant referred to the Decision which in part said: "Why would an agreement be made to pay most of the sum sought where a list of items was included but there was no express statement that in addition the respondent had to complete all original aspects of the bathroom renovation agreement? Something as important as that would be expected to be reflected expressly in any agreement reached and orders made. It was not in the present case";
2. The appellant the stated in the Notice of Appeal: "I propose insufficient knowledge before the court, the mediation hearing not sufficiently noted in the scope of works presented to the Court";
3. An injustice has been allowed to take place and should be rectified;
4. At the hearing on 9 October 2015 the sum of $2,000.00 compensation was granted for the faulty workmanship, the floor height coming up too high, making the steps into the bathroom a health hazard and thus making the wall toilet too low;
5. The respondent "apart from not completing the bathroom contract as I believe he had to do, Mr Occhiuto did not complete the work orders laid down by the Court. The vanities were installed with no waterproofing (silicone around the vanities against the walls)";
6. The scope of works was inadequate and did not reflect the mediation proceedings; and
7. The Member on 9 October was very agitated.
The appellant states that the decision was not fair and equitable because of "insufficient evidence (knowledge) before the Court. The mediation hearing not sufficiently noted or explained in the scope of works".
The grounds of appeal repeat the appellant's assertion that it was understood between the parties, notwithstanding the terms of the consent order and the prior agreement of the same day reached between the parties, that the parties intended that the respondent would complete all the original aspects of the bathroom renovation agreement. The appellant states that it was intended that the agreement set out the "additional rectification work to be carried out". The appellant notes that the agreement included a reduction in the price of $2,000.00 representing "compensation being granted for the faulty workmanship, the floor height coming up too high, making the step into the bathroom a health hazard and thus making a wall toilet too low".
[4]
Appellant's submissions
The appellant states that the consent orders made by the Member contained a mistake and that the orders did not represent what had in fact been agreed.
At the appeal hearing we sought clarification from the appellant as to the work which she states remains incomplete or defective. She agreed that that work was described in an attachment to the notice of appeal which we have referred to above. That attachment contains nine items. The first states "to complete bathroom". The remaining items, numbered two to nine are more specific. The appellant agreed at the hearing that in relation to items two to nine only item two was included in the work order. Items three to nine were not included in the work order.
The appellant also submitted that the consent orders contained an inaccuracy in stating that what had been agreed was in full and final settlement. The appellant states that the consent orders were not intended to affect the respondent's obligation to otherwise complete the bathroom in accordance with the agreement. The appellant has since caused much of the work about which she complains to be undertaken and therefore seeks compensation from the respondent for the losses she has incurred.
[5]
Reply and respondent's submissions
The respondent has filed a reply and the respondent's position is that the appeal should be dismissed. The respondent submits that the terms of the work order have been fully complied with and that the terms of the settlement required the respondent to only complete those items. The respondent submits that the respondent negotiated a reduction in price of the sum remaining to be paid by the appellant on the basis that the only work the respondent would perform was the work itemised in the work order.
[6]
Appellant's reply
At the hearing the appellant submitted that the reduction in price of $2,000.00 negotiated for the specific purpose of providing compensation for the faulty workmanship in respect of the floor height coming up too high, making the step into the bathroom a health hazard and thus making the wall toilet too low. The reduction was not intended to have the effect of relieving the respondent of the respondent's obligations to comply with the contract to complete the works and rectify defective works.
[7]
Item 2
It is relevant to make specific reference to item 2 of the list of items attached to the notice of appeal. This item asserts states:
Waterproofing to be finished (shower not waterproofed) edging around walls not complete. Waterproofing around hand basins.
The appellant argued that this item did form part of the work order in so far as the work order referred to the installation of vanities and shaving cabinet but the installation had not included waterproofing. The respondent argued that that item (i.e. waterproofing) was not included in the work order and, in any event, waterproofing is not included within the requirement to install. In other words, the respondent argued that it had complied with the obligation to install and compliance was achieved without the necessity to include waterproofing. The respondent stated that his practice is to use silicon seal but that is not a requirement of the work order.
[8]
The tap
At the hearing the appellant submitted that the respondent had an obligation to fix the tap which had been the subject of discussion at the hearing on 9 October 2015. The appellant argued that the respondent had agreed to have a plumber look at the tap. That agreement was outside the terms of the work order and was made orally during the course of the hearing before the Tribunal. The respondent replied to the effect that the issue never arose during the course of the work he undertook pursuant to the consent order and that the appellant made her own arrangements to have that issue addressed by the plumber who was on site engaged by the respondent.
[9]
Our decision
The Decision found that the work agreed to be undertaken by the respondent as listed in the work order of 9 October 2015 had been undertaken and that the appellant had accepted that that work had been completed (apart from the removal of rubbish).
The appellant's application commenced by the "Notice to Renew Proceedings filed 14 December 2015" was an application made pursuant to the provisions of cl 8 Sch 4 of the Civil and Administrative Tribunal Act 2013 (the Act). In brief terms that clause makes provision for a party to renew proceedings if an order was made but not complied with. When proceedings have been renewed in accordance with the clause the Tribunal may make any other appropriate order under the Act or enabling legislation as "it could have made when the matter was originally determined" or may refuse to make such an order.
Accordingly, at the hearing on 13 April 2016 the Tribunal's order making power was limited by cl 8 to the making of such appropriate orders as it could have made when the matter was determined on 9 October 2015. The only orders the Tribunal could have made on 9 October 2015 were:
1. An order in favour of the respondent requiring the appellant to pay the amount sought by the respondent; or
2. An order in favour of the respondent requiring the appellant to pay some of the amount sought by the respondent on the basis the appellant was entitled to set off an amount to compensate her for defective or incomplete work; or
3. An order dismissing the respondent's claim on the basis that the appellant was entitled to set off the full amount of the respondent's claim to compensate her for defective or incomplete work.
By 13 April 2016 the amount due to the respondent had been paid by the appellant as required by the consent order made on 9 October 2015. If the Tribunal had been minded to set off an amount claimed by the appellant, it could have ordered the respondent to return to the appellant any excess monies paid. However the Tribunal could not entertain any claim by the appellant for compensation, in addition to an amount to be set off against the respondent's claim, because the appellant had not filed any application for compensation, and nor had the appellant filed any cross claim in the proceedings brought by the respondent.
These limitations in the Tribunal's order making power in the context of dealing with a renewal brought under cl 8 of Sch 4 of the Act do not have any practical impact in these proceedings for the reasons which will become apparent. In short this is because we are of the view that the Decision is correct and that the appeal should be dismissed. Our more detailed reasons follow.
An appeal from a decision made in the Consumer and Commercial Division of the Tribunal is governed by s 80 of the Act and by the provisions of cl 12 of Sch 4 of the Act. In summary the appellant may appeal as of right on any question of law or with leave pursuant to the provisions of cl 12. Clause 12 provides that an Appeal Panel may grant leave only if the Appeal Panel is satisfied that the appellant may have suffered a substantial miscarriage of justice because:
1. The decision of the Tribunal under appeal was not fair and equitable, or
2. The decision of the Tribunal under appeal was against the weight of evidence, or
3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In our view the Decision does not display any error of law. The Senior Member found that the agreement had the effect that the respondent was required only to undertake the work listed in the work order. In our view this is a correct interpretation of the agreement. It was also the interpretation explained to the appellant and her representative at the hearing on 9 October 2015. As quoted earlier, the appellant asked whether she could come back. The Member replied to the effect that if the respondent did not do the work in the order, she could come back and if the respondent does the work in the work order she could not come back.
In our view, as the consent orders expressly stated, the agreement was in full and final settlement. That means that the only work to be undertaken was the work itemised in the work order. In consideration for that agreement the parties agreed to a reduction in price. If that reduction has proven to be inadequate it does not have the consequence that the appellant is entitled to a further remedy.
There is a further reason why the appellant is not able to bring a further application against the respondent. In the decision of the New South Wales Court of Appeal in Honeywood v Munnings (2006) 67 NSWLR 466; [2006] NSWCA 215 the Court dealt with a claim by homeowners who had obtained an order in their favour with respect to defects in a building from a Tribunal. They then discovered defects subsequently and brought a second set of proceedings. The Court cited and approved cases which had held that where there was a judgement or order in favour of a homeowner in respect of some defects the homeowner could not bring a second claim based on different defects. Here the Tribunal made orders consented to by the parties. There is no reason to treat such orders any differently from a judgment. The principle which the Court was upholding was that where there is an alleged breach of a contract to build or provide something (e.g. a renovated bathroom) then the action brought is one alleging a breach. Once that action alleging a breach is brought and decided then the decision has resolved the breach and the homeowner is thus barred from bringing subsequent claims for breach of the same contract. This principle does not bar a second action for a later breach of the same contract because in such a case there are breaches at different times and separate causes of action. In the Honeywood v Munnings case all the defects were due to poor workmanship and the use of poor materials at different times during construction and they formed part of one composite breach of contract.
This principle may seem harsh in circumstances where some of the breaches are not known to the homeowner at the time they take the first action against the builder. The principle has been modified by a provision of the Home Building Act, 1989 (HBA) - see s 18E(2). The effect of that section is that the fact that a person entitled to a benefit of a statutory warranty specified in the HBA has enforced the warranty in relation to a particular deficiency in the work does not prevent the person from enforcing the same warranty for a deficiency of a different kind in the work (the other deficiency) if:
1. The other deficiency was in existence when the work to which the warranty relates was completed;
2. The person did not know, and could not reasonably be expected to have known, of the existence of the other deficiencies when the warranty was previously enforced; and
3. The proceedings to enforce the warranty in relation to the other deficiency are brought within the period referred to in subsection (1) [that is six years for a major defect and two years in other cases].
The appellant has not asserted anywhere that she did not know or could not reasonably be expected to have known of the existence of the other deficiencies and accordingly the above section cannot apply.
It is our view that in respect of work not identified in the work order, the Decision was correct in stating that the respondent had no obligation to undertake such work and secondly, even if the consent order was not a settlement of all defects, the appellant would be precluded from now bringing a second action in respect of other defects or incomplete work because of the principle in Honeywood v Munnings.
The only item in the work order which the appellant asserted was not fixed by the respondent was part of item 2 namely the requirement to include waterproofing to the vanities and shaving cabinet. There is no specific requirement in the work order requiring waterproofing and we were not taken to any aspect of the work order which might arguably include the requirement to include waterproofing. We raised with the respondent the question of whether subparagraph (e) of the work order (relating to the installation of vanities and a shaving cabinet) might include the requirement to waterproof. The respondent denied such a requirement.
The difficulty with dealing with this aspect is that at the hearing on 13 April 2016 the appellant accepted that the work under the work order had been completed apart from removing some rubbish left on the site. The appellant did not argue or provide evidence that that finding was inaccurate. The Courts have held (see in particular Suttor v Gundowda Pty Ltd [1950] HCA 35) that where a party to proceedings could have raised an issue at the first instance hearing but did not do so they cannot raise the issue on appeal. The appellant did not argue at the hearing in April that there was no waterproofing in respect of the vanities and shaving cabinet. Accordingly, the appellant is precluded from raising that issue on appeal. The purpose behind the rule is to ensure that the appeal is conducted fairly to both parties. If an issue is raised on appeal (in this case the issue was whether the installation of the vanities and shaving cabinet included waterproofing) but was not raised at the first instance hearing the issue cannot be fairly met by the respondent to the appeal without the opportunity of providing fresh evidence and the Appeal Panel cannot properly decide the issue without permitting fresh evidence. To allow new evidence would mean the proceedings would not be finalised without further delay. This would be contrary to s 36(1) of the Act which states:
(1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
Accordingly, it is our view that there is no basis for deciding that the failure to provide waterproofing is a breach of the work order.
In relation to the other points raised by the appellant our view is:
1. The transcript does not reveal that the Member was "very agitated" or that the appellant had not consented to or had not understood the consent order;
2. The respondent had not agreed in the work order or at the hearing to fix the tap. The most the respondent agreed to do was to have a plumber look at it;
3. The appellant has not established that the Decision has resulted in her suffering a substantial miscarriage of justice.
Accordingly, the appeal must be dismissed.
[10]
Orders
The Appeal Panel makes the following orders:
1. The appeal is dismissed.
[11]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 26 August 2016