Brown Brothers v Pittwater Council [2015] NSWCA 215
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Brown Brothers v Pittwater Council [2015] NSWCA 215
Judgment (3 paragraphs)
[1]
Respondent: In person
File Number(s): AP 15/56453
Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales
Jurisdiction: Consumer and Commercial Division
Date of Decision: 14 September 2015
Before: M Cohen, General Member
File Number(s): HB 15/41988
HB 15/46471
[2]
Judgment
This is an appeal from a decision in the Consumer and Commercial Division of the Tribunal determining two applications brought pursuant to the Home Building Act 1989 (NSW).
In proceeding 15/41988 the Appellant ("Builder") sought orders for payment by the Respondent ("Owner") in respect of moneys claimed to be due for gyprocking and related work which the Builder asserted it had performed pursuant to a contract or contracts with the Owner.
In proceeding 15/46471 the Owner sought damages against the Builder for defective and incomplete work.
By the original decision the Tribunal Member dismissed the Builder's claim and upheld the Owner's claim in the amount of $14,522.44 to be paid immediately.
By order made on 16 October 2015 and extended on 12 November 2015 the decision was stayed until the hearing of this appeal.
At the conclusion of the hearing of the appeal on 27 January 2016 the stay was extended until further order.
The work the subject of both proceedings involved the installation of gyprock walls and ceilings to two townhouses in Ashfield.
The work was the subject of a quote from the Builder dated 22 March 2013 [sic, 2015] in the amount of $21,800.00. The Owner acknowledged in his submissions on the appeal that "'the quotation…formed part of the agreement".
The Builder claimed that it had been asked to perform and had performed further work at a cost of $4,000 to rectify damage caused by water penetration. The Owner disputed any such further agreement.
It was common ground between the parties at the hearing of the appeal that the Owner had paid the Builder a total of $15,000.
The Owner appeared in person at the original hearing and on the hearing of the appeal. The Builder was represented both on the original hearing and at the hearing of the appeal by Mr Dong, a director, assisted by an interpreter.
The Appellant's rights of appeal are limited by s80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) which provides that an appeal against a decision other than an interlocutory decision of the Tribunal may be made:
"As of right on any question of law, or with the leave of the Appeal Panel, on any other ground".
As this appeal is brought from a decision of the Consumer and Commercial Division of the Tribunal, by virtue of clause 12(1) of Schedule 4 of the Act, leave may only be granted under s80(2)(b):
"if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:
(a) the decision of the Tribunal under appeal was not fair and equitable, or
the decision of the Tribunal under appeal was against the weight of evidence, or
(b) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)."
In Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarized at par [71] and par [79] as follows:
[71]. . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . .
[79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result . . . it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred."
The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban an Appeal Panel of the Tribunal conducted a review of the relevant cases at pars [65]-[79] and concluded at par [84]:
"The general principles derived from these cases can be summarised as follows:
(1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];
(2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed."
In its Notice of Appeal the Appellant stated that it sought leave to appeal both because the decision was not fair and equitable and because significant new evidence is now available that was not reasonably available at the time of the hearing.
In support of its application for leave to appeal on the ground that the decision was not fair and equitable the Appellant identified the following "Reasons why I apply for an appeal (Ground of Appeal)":
1. The judgement is unfair. Because the judge only listened to one side of the story, I am the applicant asking for unpaid money owed by the owner ROY SALANITRO-CHAFEI.
2. During the hearing, I was not given the opportunity to put forward my written response to the documents provided by the other party.
3. During the hearing, I was not given the opportunity to cross-examine the summary and evidence made by the home owner which I believe are full of lies.
4. The summary made by the respondent is made up pieces by pieces; he mixed some details to favour his story. And he did not put them in chronological order. If I was given opportunity to cross testify his summary in hearing, the member could have found out his lies.
5. The judge did not ask QLZ PTY LTD who issued the report come to the court to testify the statement made by them and I did not have the chance to cross-examine the expert. And
6. QLZ PTY LTD who is doing the default report is also the company who did the repair job for them. So it is not impartial.
7. I was not given an opportunity to provide my expert report because the owner did not allow our people go into his house in the end.
8. I seriously question the credibility of the so-called 'expert report'. From my point of view, the company is not an expert approved by the government to do the expert report and it is just a builder company as I do. We are just competitors.
9. During the hearing, I did not know what questions judge have asked the owner and did not know what the owner has answer, whether he was telling the lies because the interpreter did not interpret what was going on."
In support of the application for leave to appeal on the ground that there was evidence now available that was not reasonably available at the time of the hearing the Appellant listed the following:
"Bank statement for money paid by the respondent
Extra invoices copy
Extra material purchased copy for extra work
Photos to prove the water leakage
Response to the respondent document
I have enclosed some photos in my original application
And I don't know why it is not in the file during the hearing"
The Appellant adduced no evidence at the hearing of the appeal to establish its claim that it had not been given an opportunity to cross examine the Owner or the Owner's expert. The Owner disputed that the Appellant had been denied such opportunity. The Appellant also adduced no evidence at the hearing of the appeal to establish that the interpreter had not translated the questions asked of the Owner by the Tribunal Member or the Owner's responses. The Owner stated to the Appeal Panel that as far as he was aware the interpreter had been translating during those questions and answers.
In the absence of evidence to establish the Appellant's complaints concerning the conduct of the hearing we are not able to be satisfied that any of those complaints are justified.
Insofar as the Appellant complains of the Tribunal's reliance upon a report from QLZ Pty Ltd, the Appellant failed to put that report before the Appeal Panel. The directions for the preparation of the appeal made on 12 November 2015 required the Appellant to prepare an agreed bundle "including the relevant documents that were before the Tribunal at first instance". The Appellant failed to comply with this direction.
However, at the hearing of the appeal the Owner put forward a bundle of documents which included a document said to be an updated version of the report relied upon by the Owner at the original hearing. The Owner stated to the panel, and Mr Dong did not dispute, that the document put forward at the original hearing was in substantially the same terms. This proposition is supported by the Member's decision which sets out the defects identified in the report tendered before him in similar terms to the "updated" report. Although it would have been preferable to have the document which was before the Tribunal at first instance, we are prepared to rely upon the document produced by the Respondent Owner as indicative of the evidence before the Tribunal Member.
Although the report of QLZ Pty Ltd before the Appeal Panel does not comply with the Tribunal's Procedural Direction 3, Expert Witnesses, and it appears from the Tribunal Member's reasons that the report before him did not comply either, the Tribunal Member excused that non-compliance "given the limited nature of the claim". That decision was open to him and we see no error in the exercise of his discretion to admit the report, nor in his acceptance of the report as evidence supporting the Owner's claims concerning defects and incomplete work. That QLZ Pty Ltd may be a competitor of the Appellant and has been retained by the Owner to carry out rectification work are matters which might affect the evidentiary weight of the report. They do not establish that the Tribunal Member's decision, founded upon the report, was not just and equitable.
The Appellant was refused leave to file further documents at the hearing below because he had failed to comply with directions that he file such documents in advance of the hearing. We find no error in the Tribunal's refusal to admit those documents.
The documents identified by the Appellant as new evidence appear to be the same documents the Appellant was refused leave to file at the original hearing. Certainly, there is nothing in those documents or in any material put before the Appeal Panel by the Appellant to suggest those documents were not "reasonably available at the time of the hearing".
The foregoing disposes of the grounds identified in the Notice of Appeal. However, the Appeal Panel has other concerns regarding the Tribunal Member's consideration of the Appellant's claim and the calculation of damages. These concerns were raised by the Appeal Panel at the hearing of the Appeal. For the reasons which follow the Appeal Panel has determined that the Appeal should be allowed in part.
The Tribunal Member considered and dismissed the claim by the Appellant Builder in paragraphs 14 to 22 of his decision as follows:
"14. First, as to the builder's claim, such evidence as is available from the applicant within Ex.A, discloses that a quotation for work dated 22 March 2015 was provided to the homeowner, but advances nothing else.
15. Moreover, the homeowner advances evidence by Ex.1 that demonstrates that claims made by the builder totalling $18,000.00 were served - see Ex.1, pp.7-10 - and have been paid in the amount of $14,000.00 - see Ex.1, pp.12-13.
16. The explanation for the difference is the explanation by the homeowner that the builder performed a certain amount of the work, and then 'disappeared' and left the homeowner 'stranded' - see Ex.1, summary, p.2, third dot point.
17. In relation to the claim made, when asked what the builder disputed in the narrative advanced by the homeowner, it was contended by the builder by its director on oath that the claims made by the homeowner were a consequence of water damage to the structure and that his evidence was not to be accepted.
18. The builder's director went on to testify that water damage to the structure was demonstrated by the homeowner's own photographs - see Ex.1, pp.21-41.
19. The Tribunal has examined those photographs, and can find in them no evidence of water damage.
20. The Tribunal, when it has regard to that testimony advanced by the builder's director, finds that it can place no confidence in the testimony of the builder's director unless it is corroborated by contemporaneous documentary evidence.
21. That being so, the Tribunal prefers the evidence of the homeowner, and relies upon it to find the facts in the proceedings.
22. On that footing, the Tribunal finds that the builder fails to prove its allegations on the balance of probabilities, and that its claim in proceeding HB 15/41988 must be dismissed."
The Tribunal Member went on to consider the evidence which the Owner put before the Tribunal of defective work, and of the costs of rectification of defective work and completion of the gyprocking work required on the premises. The Tribunal Member found the Owner's allegations of defective work to be proved, assessed the cost to rectify the defective work at $14,422.44, and awarded damages in that amount.
The Respondent Owner's bundle also included the quotes and invoices put before the Tribunal at the original hearing. It is clear from these documents that the amount allowed by the Tribunal Member for defective work included the cost of completing the work the subject of the Appellant's quote of 22 March 2015.
We find no error in the Tribunal Member's acceptance of the evidence put forward by the Owner, or the calculation of the cost of rectification and completion. Nor do we find that the decision in those respects was in any way not fair and equitable.
We consider, however, for the reasons which follow, that there is an error of law in the Tribunal Member's dismissal of the Builder's claim. We also conclude, for the same reasons, that the decision was not fair and equitable and that in consequence the Builder may have suffered a substantial miscarriage of justice.
It does not appear from his reasons for dismissing the Builder's claim (which are set out in full above) that the Tribunal Member gave any real consideration to the Builder's claim. The claim was for $10,000, which reflected the unpaid proportion of the quoted price of $21,800 and the $4,000 claimed to be owing for the additional work.
The Tribunal Member dismissed the quote dated 22 March 2015, the authenticity of which was not disputed, as disclosing "that a quotation for work dated 22 March 2015 was provided to the homeowner, but advances nothing else."
The Tribunal Member did not give consideration to the question, what was the agreement pursuant to which the Builder performed the work. As noted above, on the appeal the Owner acknowledged that the quote dated 22 March 2015 formed part of the agreement. The materials available to the Appeal Panel do not enable a determination whether that concession was made at the original hearing. It is hard to imagine that, if the question what was the relevant agreement (and in particular what was the contract price, or on what terms the price was to be determined) had been canvassed at the original hearing, the Owner would not have conceded that the quote reflected the agreed contract price.
However, even if the quote did not form part of the agreement, it remained essential, in order to resolve the Builder's claim, to determine the essential terms of the agreement by which the Builder had performed the work, that is the work the Builder had agreed to perform and the price the Owner had agreed to pay, and to determine the extent to which the Builder had completed that work so as to be entitled to payment of the agreed price, or any part of the agreed price.
The Tribunal Member having failed to address these issues, his decision contains an error of law, or, alternatively, is not fair and equitable in that the Appellant Builder's case was not given adequate consideration. The injustice to the Builder is reasonably clear, in the sense of going beyond merely what is arguable [1] .
We also find there is an error of law in the Tribunal Member's approach to the Owner's claim. That error arises in the Tribunal Member's approach to the calculation of the damages to which the Owner was entitled. As noted above, it was common ground before the Appeal Panel that the Builder had contracted to do the relevant work for a price of $21,800 and that the Owner had paid the Builder a total of $15,000 [2] .
The correct measure of damages for breach of contract is the amount necessary to put the party not in breach in the same position as if the contract had been performed. Putting to one side the Builder's claim that the Owner agreed to pay a further $4,000 for further work to remedy water damage, the calculation of damages must make allowance for the fact that the Owner had paid $6,800 less than the full contract price. To the extent that the Owner is required to pay another contractor to rectify and complete the work, it is the amount the Owner is required to pay in excess of the balance of the contract sum that correctly represents the Owner's loss.
The sum awarded to the Owner at first instance did not make allowance for the unpaid portion of the contract price and in failing to make such allowance the Tribunal Member assessed the damages on an erroneous basis and thereby made an error of law.
If, on the other hand, the quote of 22 March 2015 did not constitute the contract or reflect the terms of the agreement between the Owner and Builder, then there was no basis in the evidence before the Tribunal upon which the Owner could be found entitled to payment of the cost of completing the work. In such circumstances, in the absence of a determination of the basis upon which the Builder was entitled to be paid for the work it had performed and of the value of the work the Builder had performed, there would have been no basis for assessing the damages payable by the Builder.
When asked at the hearing of the appeal whether there was any reason why the unpaid portion of the contract price should not be deducted from the cost of rectification and completion, the Owner referred to the losses he said he was incurring through delays in the completion of the project. While such losses might indeed be recoverable, if properly proved, it does not appear from the decision of the Tribunal Member that the Owner had sought to establish such losses either in his original claim or at the original hearing.
We therefore consider that the Builder's claim must be remitted for rehearing in full and the Owner's claim must be remitted for rehearing to determine the extent to which, in calculating the damages payable to the Owner for incomplete and defective work, allowance should be made in respect of the extent to which the Owner has not paid the contract price.
As the Tribunal Member, in paragraph 20 of his reasons quoted above, has made strong findings of credit against Mr Dong, it is appropriate to direct that the proceedings be heard before a differently constituted Tribunal [3] .
Accordingly we make the following orders:
1. In respect of proceedings HB 15/41988 -
1. Leave to appeal is granted, if necessary;
2. The appeal is upheld;
3. The order for dismissal of the proceedings is set aside; and
4. The proceedings are remitted to the Consumer and Commercial Division differently constituted to be re-heard.
1. In respect of proceedings HB 15/46471 -
1. Leave to appeal is granted, if necessary;
2. The appeal is upheld in part;
3. The order for payment of the sum of $14,522.44 is set aside;
4. The proceedings are remitted to the Consumer and Commercial Division differently constituted for re-hearing limited to the question of the extent, to which, in calculating the damages payable to the Applicant (Respondent to the Appeal) for incomplete and defective work, allowance should be made in respect of the extent to which the Applicant has not paid the contract price.
[3]
Endnotes
Collins v Urban [2014] NSWCATAP 17 at [84].
The Tribunal Member recorded in his decision that the Owner adduced evidence of payment of $14,000, however the evidence in fact established payments of $15,000 and the Builder's own submissions acknowledge payment of a total of $15,000.
See Walker Corporation v Sydney Harbour Foreshore Authority (2009) 168 LGERA 1 at 121; Brown Brothers v Pittwater Council [2015] NSWCA 215 at [214].
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
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Decision last updated: 16 February 2016