Chand v Azurra Pty Ltd

Court of Appeal (NSW)|2011-07-12|Before: Hodgson JA, Basten JA, Macfarlan JA

Judgment 1HODGSON JA : I agree with Macfarlan JA. 2BASTEN JA : I agree with Macfarlan JA, that the summons must be dismissed and the applicants must pay the respondents' costs. Subject to one qualification in relation to the absence of Mrs Chand from the Tribunal room on the second day, I also agree with his reasons. There are, however, aspects of the procedure adopted by the Tribunal which give rise to a degree of concern, although not providing a basis for setting aside the orders of the Tribunal. 3First, there was an appearance of inequality in the manner in which the Tribunal dealt with expert evidence tendered by the respective parties. The Chands' tender of a report from a quantity surveyor appears to have been assessed (though not rejected as inadmissible) by a precise application of the principles identified in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705 at [85]: see Macfarlan JA at [22] below. By contrast, in considering the builder's lost profits, the Tribunal acted on the basis of a single page described as a "costing schedule", prepared by the builder, and without any reference to the principles identified in Makita , or those apparently set out in the direction in respect of expert evidence given by the Chairperson of the Tribunal (which was not before this Court): see at [48] below. 4The Evidence Act 1995 (NSW) does not apply in the Tribunal: see s 4(1), stating that the Act applies to "all proceedings in a NSW court", the term "NSW court" being defined to include any person or body required to apply the laws of evidence, together with Consumer, Trader and Tenancy Tribunal Act 2001 (NSW), s 28(2), which states that the Tribunal is not bound by the rules of evidence. The purpose of the exclusion is to provide a degree of informality and flexibility, which might not enure from an application of the rules of evidence. The wisdom of that approach may be seen to be confirmed by the present case: neither party seems to have fully understood the principles derived from Makita . However, the present concern is rather the apparent inconsistency in approach. 5Secondly, I agree with Macfarlan JA that the course of excluding a party from the hearing in the Tribunal was an extreme step: at [43] below. Accepting that the Tribunal member was entitled to take the step of excluding her on the first day, because of her disruptive conduct, it was important that the reason for her exclusion be made clear, and that her entitlement to return upon the completion of her husband's cross-examination was also made clear. I would not be satisfied that either step was taken in the present case. She was entitled to be in the room when the builder made final submissions and when her husband made final submissions. Indeed, she was entitled to an opportunity to make submissions herself, had she wished. The builder's evidence was quite equivocal as to whether Mrs Chand was in the hearing room on the second morning. In the circumstances, I see no reason to reject her evidence that she was not. Her absence from the room on the second morning should have invited at least an inquiry from the Tribunal member as to where she was and whether she wished to attend. 6However, for the purpose of determining whether she (or she and her husband) was denied procedural fairness, the question is not whether her understanding of what had happened on the previous day was reasonable but rather whether she had a reasonable opportunity to return, if she so wished. She was present in the vicinity of the Tribunal room on the second morning and could, had she wished, have inquired whether she would be permitted to enter and remain. If she felt inhibited in taking that step, she could have invited her husband to make the inquiry on her behalf. She took neither step and was, therefore, not denied a reasonable opportunity to be present and participate in the proceedings on the second day. 7MACFARLAN JA : By written "Cost Plus" contract dated 26 April 2006 Lifestyle Homes NSW Pty Ltd contracted to construct a home for Mr Ajay and Mrs Shashi Chand, the applicants in the present proceedings. Lifestyle Homes NSW Pty Ltd later changed its name to Azurra Pty Ltd and went into liquidation. The liquidator effected an assignment of that company's rights to Lifestyle Homes NSW* Pty Ltd, the second respondent in the present proceedings. The proceedings have been conducted upon the basis that the second respondent can be treated as if it had been the builder under the contract of 26 April 2006. I accordingly hereafter refer to it as such.

PROCEDURAL HISTORY 8Disputes occurred between the Chands and the builder as a result of which the builder and the Chands commenced proceedings against each other in the Consumer, Trader and Tenancy Tribunal (the "CTTT"). Mr G J Durie, Senior Member of the CTTT, heard the two sets of proceedings on 29 and 30 May 2008. Mr Chand presented the Chands' case and Mr Craig Bennett, a director of the builder, represented the builder. 9By decision of 12 June 2008 the Tribunal upheld the builder's claim and dismissed the Chands' claim. 10The Chands appealed against that decision to the District Court in exercise of the right of appeal conferred by s 67 Consumer, Trader and Tenancy Tribunal Act 2001 (the "CTTT Act"). That section permits appeals on questions "with respect to a matter of law" (s 67(1)). 11By judgment dated 14 December 2009 Hungerford ADCJ dismissed that appeal ( Chand v Lifestyle Homes NSW* Pty Ltd [2009] NSWDC 335). A purported appeal by the Chands from the decision of Hungerford ADCJ to this Court was dismissed on 16 May 2011 upon the basis that it was incompetent because no right of appeal existed ( Chand v Lifestyle Homes NSW* Pty Ltd [2011] NSWCA 129). 12By Summons filed in the Common Law Division of the Supreme Court on 4 June 2010 the Chands sought an order in the nature of certiorari pursuant to s 69 Supreme Court Act 1970 quashing the decision of the CTTT, which is the third respondent named in the Summons. The Summons was subsequently transferred to the Court of Appeal. This is the proceeding with which this judgment deals. 13During the hearing of the Summons in this Court the Chands were granted leave to amend it to seek an order under s 69 Supreme Court Act quashing the decision of Hungerford ADCJ. As a result the District of Court of New South Wales was joined as a respondent. It subsequently filed a submitting appearance. 14As the builder objected to the Chands being granted leave to amend the Summons and as leave was granted prior to the conclusion of the hearing, the Court indicated to the parties at the hearing that it would in its final judgment consider whether or not that leave should be revoked. In my view leave should not be revoked as the Chands' earlier failure to seek relief in relation to the District Court decision resulted from a misunderstanding on their part and the grant of leave has not prejudiced the builder. As to the latter consideration, it became apparent from the arguments put by Mr Corsaro SC, counsel for the Chands, that substantially the same points were sought to be put in respect of both of the decisions the Chands seek to quash. In any event the builder's position was protected by this Court's grant to it of leave to file further written submissions.

NATURE OF RELIEF SOUGHT 15As indicated in Kirk v Industrial Court of New South Wales [2010] HCA 1; (2010) 239 CLR 531, the two principal grounds for relief in the nature of certiorari are error of law on the face of the record and jurisdictional error (at [56]). The Chands recognised that the bases upon which they could seek prerogative relief in relation to the decision of the CTTT were however restricted by s 65 CTTT Act, which contains a general prohibition on the grant of prerogative relief against orders of the CTTT save upon the ground that: "(a) the Tribunal had no jurisdiction to make the order, or (b) in relation to the hearing or determination of the matter, a party had been denied procedural fairness" (s 65(3)). 16The exception stated in s 65(3)(a) encompasses the ground of relief known as jurisdictional error ( Scicluna v NSW Land and Housing Corporation [2008] NSWCA 277; (2008) 72 NSWLR 674 at [33]). For constitutional reasons, the right to relief upon that ground would be preserved even if the express statutory exception had not been enacted ( Kirk v Industrial Court of New South Wales at [55]). 17As no restriction comparable to that contained in s 65 CTTT Act is applicable to prerogative orders concerning District Court decisions, relief in relation to these decisions may be granted on the ground of error of law on the face of the record, as well as jurisdictional error. Section 69(4) Supreme Court Act makes it clear that the "face of the record" for this purpose includes the court's reasons for judgment. In Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390, the High Court held that a question as to whether there was any evidence upon which a CTTT factual finding could have been made raised a question with respect to a matter of law for the purpose of founding a right of appeal from the CTTT to the District Court under s 67 CTTT Act (at [90]). It follows that a factual finding made by the CTTT in the absence of any evidence to support it would constitute an error of law (see ibid at [91]) which, if apparent from the Reasons for Decision, would justify the grant of prerogative relief.

GROUNDS FOR RELIEF SOUGHT 18On the appeal the Chands confined their case to the matters set out in their written Supplementary Submissions dated 6 July 2011 and such parts of earlier written submissions that they lodged as were by reference incorporated into the Supplementary Submissions. 19The Chands submitted that there were five matters that warranted this Court granting an order in the nature of certiorari in relation to the CTTT decision and/or the District Court decision. Two of these matters concerned a finding of the CTTT that the Chands were liable to pay damages to the builder in respect of the builder's loss of profit; one related to the finding of the CTTT that the Chands repudiated the building contract; and two alleged that the CTTT denied procedural fairness to the Chands. I shall deal first with the contentions that the Chands were denied procedural fairness (see [22] - [47] below). 20The Chands' challenge to the District Court decision related only to the alleged errors of the CTTT in awarding the builder damages for loss of profit and in finding that the Chands repudiated the building contract. Their counsel indicated that the only reason that the Chands challenged the District Court decision on these points was a concern that their challenges to the CTTT decision in relation to the same matters might be precluded by s 65 CTTT Act (see [15] above) because these points did not raise questions as to jurisdictional error or procedural fairness. As I have concluded below that the points do not in any event have merit, it is unnecessary to consider whether s 65 would have precluded relief with respect to the CTTT decision being granted in relation to these points. It also follows that it is unnecessary to consider the Chands' challenge to the District Court decision. 21At this point I record that, regrettably, there is no transcript of the hearing before the CTTT available. This has resulted from an administrative error of the CTTT in not ensuring that the sound recording of the hearing was transferred to a DVD for permanent storage. The absence of that transcript has rendered resolution of the issues in the proceedings considerably more difficult as the Court has had to receive evidence concerning what occurred at the hearing before the CTTT. That evidence was conflicting.

PROCEDURAL FAIRNESS ISSUE - EXPERT EVIDENCE 22The Tribunal said the following concerning a report of a quantity surveyor that the Chands tendered: "bb. I now turn to consider the claim by the Owners in relation to what was said to be an overcharge by the concreter. The evidence for this was principally that of a quantity surveyor, ACP. There was a strong attack on this by Mr Bennett, based upon Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 (14 September 2001) as well as upon the requirements set out in the Chairperson's Direction in relation to expert witnesses. There is a substantial overlap. The principles are to be found in Makita at paragraph 85. Mr Bennet[t] went through these seriatim and submitted that none had been satisfied. In particular, he drew attention to a lack within the report [of identification of] the basis upon which the calculations had been made. To some minor extent, that had been made up by an e-mail introduced late into the evidence by Mr Chand. It asserted that the calculations had been based 'upon our pricing knowledge with, as necessary, a check reference being made with Rawlinson'. The problem is that the e-mail still does not show how the 'pricing knowledge' had been derived, or the relationship between that knowledge and the Rawlinson check. An examination of the ACP report shows, that, with the exception of the acknowledgement of the Chairperson's Direction it fails all the Makita tests". 23The Tribunal did not reject the tender of the report, either at the hearing or in its decision, but said, no doubt for the reasons just quoted, that it gave it no weight (Reasons for Decision [cc]). 24In affidavit and oral evidence adduced before this Court, Mr Bennett said that he submitted to the Tribunal, and the Tribunal accepted during the hearing, that by reason of Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705, the expert report should be rejected because the author was not available for cross-examination. This is curious because this is not the principle for which Makita stands and the Tribunal refers in its decision (see [22] above) to Makita , not for this principle, but for its true principle, that is, the need for expert evidence to satisfy certain requirements for it to be admissible, in particular, so far as is relevant to this case, that the basis upon which the opinion of the expert has been arrived at needs to be stated. 25In my view the terms of the Tribunal's decision should be regarded as a reliable record of the nature of the submission concerning Makita that was put to it. It is not a matter of any particular surprise that Mr Bennett, a lay person, in seeking to recall some eight months after the Tribunal hearing, the nature of the submission that he put to the Tribunal might be confused as to the legal principle that he advanced. Mr Bennett said that such points as he had made had been suggested to him prior to the hearing by a solicitor whom he had consulted. 26The Chands submitted to this Court that the Tribunal denied them procedural fairness by: " ... giving the ACP report no weight without affording the [Chands] an adjournment and/or an opportunity to remedy the defects the Tribunal perceived with the ACP report in circumstances where the author of the ACP [report] was not cross-examined ... [and by failing] ... to put its concerns about the ACP [report] to the [Chands] during the course of the hearing and it was not obvious to what extent (minor or otherwise) those perceived defects had been addressed by emails relied on by the [Chands]" (Plaintiffs' Supplementary Submissions [22] incorporating White Appeal Book p 51). 27The Chands relied upon SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 and Uszok v Henley Properties (NSW) Pty Limited [2007] NSWCA 31 in support of these submissions. 28SZBEL was concerned with a review by the Refugee Review Tribunal of a decision of the relevant Minister's delegate to refuse to grant a visa. The principal point made by the High Court was that: "if the Tribunal takes no step to identify some issue other than those that the delegate considered dispositive, and does not tell the applicant what that other issue is, the applicant is entitled to assume that the issues the delegate considered dispositive are 'the issues arising in relation to the decision under review'" (at [35]). 29The present is a different case as the Tribunal's Reasons for Decision reveal that the builder objected to the Chands' reliance upon the report upon the basis subsequently given by the Tribunal for deciding not to afford it any weight. The Chands were thus on notice at the hearing of the issue that was subsequently decided against them and were accordingly not denied procedural fairness. 30The Chands also relied upon the following observations of Beazley JA (with whom Basten JA agreed) in Uszok : "147 This leads to a further question as to what was required of the trial judge in dealing with a claim presented by an unrepresented party. 148 This issue arises most frequently in relation to tribunals, which are under a duty to accord procedural fairness to an applicant. A tribunal will frequently have to take affirmative steps to ensure that it understands the issues presented to it and that the applicant understands the nature of and limitations on its powers. These principles may operate differently in the context of adversary litigation, but they remain apposite". 31Those observations do not in my view assist the Chands in the present case. 32The Chands argued that Mr Bennett's evidence demonstrated that, the Tribunal rejected the expert report upon the ground that the expert was not available for cross-examination. As I have said above (see [25]) I do not accept that this was the basis upon which the Tribunal dealt with the report. The Reasons for Decision indicate that the report was not rejected but that it was given no weight and that this occurred, not for the reason that the expert was not available for cross-examination, but because of perceived non-compliance with the Makita principles, in particular that the report did not disclose the basis of the opinions expressed in it. The Chands submitted that if the Court accepted that this was what occurred, the Tribunal should have advised them at the hearing that the report was not "incurably wrong" and that they might have to apply for an adjournment, albeit with cost consequences (Appeal Transcript p 51). 33I do not consider that the circumstances of this case required the Tribunal to do that. It is of particular relevance that long prior to the hearing, in fact some 10 months prior to it, Mr Bennett (on behalf of the builder) advised the Chands that he was concerned that the expert report did not sufficiently identify the bases for the opinions expressed in it. This is evidenced by an email that Mr Chand sent to the expert on 22 July 2007 referring to Mr Bennett's concern. That email indicated that the Chands were at that stage obtaining legal advice, as Mr Chand said in his email that he was getting "my lawyers to start putting a log of claims" to the builder. 34When at the Tribunal hearing Mr Bennett took an objection of the same nature as the concern he had earlier expressed, Mr Chand responded by tendering his email of 22 July 2007, a response from the expert and further emails between himself and the expert that followed in an attempt to overcome Mr Bennett's concern. Thus not only did the approach that the Tribunal took to the report in its decision reflect an objection that was taken at the hearing, but the Chands also had notice of the nature of the problem to which the objections were directed well prior to the hearing. I cannot see that in these circumstances the Tribunal had any duty to do other than determine the objection on its merits. It cannot be assumed that the Chands were unaware that it was possible for them to apply for an adjournment of the hearing (albeit that such an application would have had only poor prospects of success) when neither gave evidence before this Court to that effect.

PROCEDURAL FAIRNESS ISSUE - EXCLUSION OF MRS CHAND FROM THE HEARING 35Mr Bennett gave evidence before this Court that at the hearing in May 2008 Mr Chand informed the Tribunal that he would be presenting the Chands' claim and that during Mr Chand's opening statement and cross-examination of Mr Bennett, Mrs Chand was sitting next to Mr Chand and providing assistance to him orally and by passing notes. Mr Bennett then described what followed: "vi) I then cross-examined Mr Chand. At this point Mrs Chand passed notes to Mr Chand and was speaking to him in another language. I objected to this. I remember the Member saying 'You can not prompt or assist your husband whilst he is under oath and being cross examined. Will you be giving a statement under oath Mrs Chand?' Mrs Chand: 'No' vii) I continued my cross examination of Mr Chand and Mrs Chand kept interrupting and prompting her husband. The Member then said ' Please stop. You will need to sit at the back of the courtroom.' viii) Mrs Chand then moved to the back of the courtroom however continued to make comments whilst her husband was under cross-examination. The Member then said 'I'll warn you again. Stop talking whilst your husband is under cross-examination' ix) I then proceeded with the cross examination and Mrs Chand kept prompting her husband in a different language. x) Near the end of the first day the Member said to Mrs Chand 'Please leave the room' xi) Mrs Chand then left the room. xii) On the second day of the hearing there was no mention by the Member that Mrs Chand could not be present in the courtroom. I cannot remember exactly where she was seated. xiii) On the second day both Mr Chand and I gave our summaries to the Member. I believe the hearing finished no later than 11.00am. xiv) It is my clear recollection that Member Durie gave Mrs Chand at least two (2) warnings not to speak whilst her husband was being cross-examined by me and Mrs Chand ignored those warnings". 36Mrs Chand gave evidence along similar lines but with the important difference that she said that Mr Bennett's objections to her role and the Tribunal's direction to her to leave the hearing room occurred whilst Mr Chand was cross-examining Mr Bennett rather than whilst Mr Bennett was cross-examining Mr Chand. 37Mrs Chand gave the following evidence concerning the second day of the hearing: "On 30 May 2008 I accompanied my husband to attend the Tribunal for further hearing. As I was ordered to stay out of the room I sat outside. The proceedings did not last long. The door of the room was open and my husband gestured me to come in. When I entered the hearing room the [Tribunal Member] asked me and said words to the effect 'the proceedings have been concluded do you want to say anything' I was angry with him for wrongly accusing me for passing documents to my husband when I had not done any such thing and for treating me like a criminal. I held back my anger and simply said 'No'". 38In my view the evidence that Mr Bennett gave should be accepted as the more reliable account of what occurred on the first day of the hearing. First, the effect of Mrs Chand's evidence was that the Tribunal excluded her from the hearing because she was assisting Mr Chand in his cross-examination of Mr Bennett. That would have been a quite irrational course for the Tribunal to have taken. There is no reason why Mrs Chand should not have assisted her husband in that cross-examination. The situation depicted by Mr Bennett was quite different. That was one in which a non-witness was helping a witness to respond to questions in cross-examination. It would have been completely rational for the Tribunal to have taken steps to ensure that that conduct ceased. 39Secondly, although he gave evidence on other topics, Mr Chand did not give any evidence concerning Mrs Chand's exclusion from the hearing, despite the fact that he was the person who presented the Chands' case at the CTTT hearing and thus could be expected to have a better recollection than Mrs Chand as to the stage of the hearing at which the exclusion occurred. It cannot be inferred from the absence of evidence from Mr Chand on this topic that that evidence would have been adverse to the Chands' interests but it can be inferred, as I do infer, that that evidence would not have assisted them ( Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11 at [63] - [64]; referring to the principle in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298). 40As the judgment of Campbell J (with whom Beazley JA and Pearlman AJA agreed) in Manly Council v Byrne [2004] NSWCA 123 demonstrates, the failure of a party to call an available eyewitness may sometimes properly be used as part of the reasoning leading to the rejection of the evidence of an eyewitness in fact called by that party (at [58] - [59]). The present is a strong case for application of the Jones v Dunkel principle in that way because the witness not called was himself a party and was arguably in a better position to give evidence about the matter in question than his co-party, Mrs Chand, who did give evidence. The present is thus not a case where it would be inappropriate to make a Jones v Dunkel inference because the evidence not called would be "comparatively unimportant , or cumulative , or inferior to what is already utilised" ( Manly Council v Byrne at [64] citing Wigmore on Evidence (Chadbourn Rev 1979), Vol 2 at [287]). 41Having accepted that Mr Bennett's version of what occurred on the first day of the hearing is to be preferred, it follows in my view that the Chands suffered no procedural unfairness by reason of Mrs Chand's exclusion from the hearing during Mr Bennett's cross-examination of Mr Chand on that day. It was not suggested that anything other than that cross-examination occurred on that day after Mrs Chand's exclusion. 42The Tribunal Member had the right and duty to control the conduct of the proceedings before him. It was not unreasonable for the Tribunal Member to take the view that when Mr Chand was giving evidence, his wife should not assist him. This reflects the way in which court proceedings are normally conducted. It also reflects the common sense proposition that the resolution of proceedings is likely to be rendered more difficult if the court or tribunal does not know the extent to which evidence given by a witness represents that witness' own knowledge or recollection. 43Although it is an extreme step, the making of a direction that a person, even a party, leave a hearing room is one option available to a court or tribunal seeking to control proceedings before it. There is nothing in the version of events that I have accepted to indicate that the power to give such a direction was in this case exercised improperly. Whether this Court would have exercised the power in the same circumstances is not to the point. Having given the warnings that I find he did, it was in my view open to the Tribunal Member to direct Mrs Chand to leave the hearing room. 44A further question arises as to whether the Chands suffered any procedural unfairness on the second day of the hearing. 45Mr Bennett's affidavit evidence (see [35] above) did not suggest that on the second day of the hearing Mrs Chand was excluded from the hearing room or that she acted as if she had been. In cross-examination before this Court Mr Bennett said that his recollection was that Mrs Chand was in the hearing room on the second day of the hearing, although he did say that he thought that she was sitting in the back of the room (Appeal Transcript p 44.14 - .23). 46Mr Bennett's evidence was consistent with the Tribunal Member having on the previous day communicated to Mrs Chand, expressly or impliedly, that she was not to be in the hearing room during the cross-examination of her husband. The warnings that the Tribunal Member gave clearly related to Mrs Chand's interference in her husband's cross-examination. The direction for her to leave the room (of which Mr Bennett gave evidence) could not reasonably have been understood as preventing her from returning to the hearing room after that cross-examination concluded. It would not have been rational for the Tribunal Member to impose any such broader exclusion as his only complaint, which was the only complaint that could reasonably have been made, related to Mrs Chand's interference in the cross-examination of her husband. 47The effect of Mrs Chand's evidence was that on the second day she assumed that the exclusion imposed on the first day was still operative (see [37] above). This was not a reasonable assumption for her to make if Mr Bennett's description of what occurred on the first day of the hearing is accepted as accurate. On that version the Tribunal Member made it plain that the matter concerning him related to Mrs Chand's interference in Mr Chand's evidence in cross-examination. For the same reasons that I gave in relation to the evidence as to what occurred on the first day of the hearing, I would accept the evidence of Mr Bennett as more reliable than that of Mrs Chand as to what occurred on the second day. In these circumstances I do not consider that the Chands have demonstrated that they were denied procedural fairness on the second day of the hearing.

DAMAGES ISSUE - CALCULATION OF LOST PROFITS 48In its decision of 12 June 2008 the Tribunal commenced its consideration of the builder's loss of profits claim as follows: "pp. The larger amount of the Builder's claim was for a loss of profits. The effect of Mr Bennett's evidence is that the company was a small builder, operating in the medium sector of the market. There would only be 2 or 3 jobs on at any time, and before each contract was entered into, there was a series of discussions with owners and their architects or draftsmen. When this job came to its end, there was no replacement contract until February of the following year. qq. His evidence is that before the Chands entered into this contract, they had seen the house which he had built for himself, and in which he was then living. They liked the house with its level of finish, and sought a similar result. However, the Chand house was considerably larger. Mr Bennett estimated that the cost to have built his own house would have been a bit above $500,000.00. He estimated that had the Chand house been built to completion, as the Builder was required to do under the contract, its overall cost would have been approximately $1,055,000.00. I refer to the costing schedule at Tab A18. He made a deduction for sums received, and on which he had received his 15% margin, and then taken 15% of the resulting sum. This method produced his claim for a loss of profit of $134,700.30". 49The Tribunal then referred to evidence that the Chands had argued indicated that the cost of the completed home would have been less than that estimated by the builder. For reasons that the Tribunal gave, it decided not to accept Mr Bennett's estimate in full but concluded that the total cost would have been the lesser sum of $950,000. 50The Chands submitted to this Court that there was no evidence that provided any foundation for the figure of $950,000 at which the Tribunal arrived. I do not agree. The builder was in a position to, and did, give evidence of the estimated cost. The Tribunal was entitled to form a view as to whether that evidence was in a form that justified it being given weight and to accept that evidence in whole or, as it did, in part. Whether it was in error in doing so is not a question that arises in the present proceedings as they are judicial review proceedings which are not concerned with the merits of the Tribunal's decision (see SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 at [25]). My conclusion that there was some evidence upon which the Tribunal's decision could have been based is sufficient to preclude judicial review upon the "no evidence" ground relied upon by the Chands. 51The Chands also submitted that there was no evidence "that the 15% [see [qq] quoted in [48] above] represented a pure profit component for the builder's work. Typically the margin payable to the builder represents a composite fee for overheads and profit" (Applicants' Supplementary Submissions [10(b)]). 52My response to this submission is similar to that which I gave to the previous submission. It is apparent from [qq] (see [48] above) of the CTTT's decision that Mr Bennett gave evidence which involved the assertion that, if the building work had proceeded to completion, the builder's costs would have been 15 per cent less than the total cost to the Chands of construction of the home, that is, that 15 per cent of that total cost would have represented its profit. In my view this was evidence capable of justifying the Tribunal's conclusion that 15 per cent of the total cost would have represented the builder's profit. The Chands' submission to this Court must therefore be rejected.

DAMAGES ISSUE - MITIGATION OF LOSS 53The Tribunal's award of damages to the builder for loss of profit related to the period of seven months during which the builder did not enter into a replacement contract. The Chands submitted to this Court that it was erroneous for the Tribunal to calculate loss of profit in this way without considering whether the builder had in this period taken all reasonable steps to mitigate its loss by seeking out new work. 54I do not accept this submission. The builder was prima facie entitled to damages for the period during which it did not have the work that performance of the subject building contract would have provided. The Chands bore the onus of proving that the builder unreasonably failed to mitigate its loss and was therefore not entitled to damages on that prima facie basis ( Wenkart v Pitman (1998) 46 NSWLR 502 at 523; CJD Equipment Pty Limited v A&C Constructions Pty Limited [2011] NSWCA 188 at [87] - [94]). The Chands did not suggest to this Court, or prove, that there was any evidence before the Tribunal of such a failure or that they made any submission to the Tribunal that such a failure had occurred. In these circumstances the absence of a reference in the Tribunal's reasons to the question of mitigation of loss and the award of damages upon the basis that the builder did not obtain a replacement contract for a period of seven months does not indicate that there was any error of law on the part of the Tribunal.

THE REPUDIATION ISSUE 55The Tribunal made the following findings on this topic. The builder was slow to commence work but this was for reasons that the Tribunal appears to have found justifiable. The builder committed breaches of contract by over-excavating and omitting to install certain reinforcing bars. These breaches were the subject of a breach notice dated 6 June 2006 that the Chands issued to the builder. The breaches were not substantial. The builder acknowledged the breaches and offered to rectify them within periods that the Tribunal found to be reasonable. The Tribunal preferred the evidence of Mr Bennett to that of Mr Chand on the question of when it was reasonable for the rectification work to be done. By email of 28 June 2006 the Chands effectively indicated that they considered that they were no longer bound by the contract because it had been abrogated by a settlement agreement that they alleged had been made between themselves and the builder. As a result, the Chands took possession of the building site and thereby excluded the builder. These actions amounted to a repudiation of the building contract. 56The Chands submitted to this Court that: " ... the defects in over-excavating the site and failing to place reinforcements combined with the excessive delay in completing the contract deprived the plaintiffs of substantially the whole benefit of the contract in a reasonably timely fashion" (White Book Vol 1 p 50 incorporated into Submissions dated 6 July 2011 by [14]). 57The Chands complained to this Court that the Tribunal erred in law "by failing to consider the effect of delay" when considering whether the Chands had repudiated the contract (ibid). However, their counsel did not refer this Court to any evidence led before the Tribunal or submission put to the Tribunal on the issue of delay beyond such as is implicit in the Tribunal's reasoning to which I have referred at [55] above. It is apparent from the terms of that reasoning that it did to some extent involve consideration of delay and the timing of events. 58In my view the Chands have not demonstrated that the Tribunal erred in failing to consider significant evidence or submissions that were relied upon before the Tribunal. I do not consider therefore that they have in this respect demonstrated any error of law on the part of the Tribunal. Again their submissions amounted to an attempt to argue the merits of the Tribunal's decision.

ORDERS 59For the reasons that I have given, the Chands' Summons should be dismissed with costs.

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: 05 August 2011

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (19)