List of legislation: ACT Civil and Administrative Tribunal Act 2008, s.82

Tribunal: Mr C. G Chenoweth, Acting Presidential Member

CIVIL & ADMINISTRATIVE TRIBUNAL ) AA 35 of 2010

TRIBUNAL: Mr C.G Chenoweth, Acting Presidential Member

1. Orders 2 and 3 of the order made on 29 September 2010 are set aside.
2. The appeal is otherwise dismissed.

1. This is an appeal from a decision of Appeal President Stefaniak made on the 29 September 2010. The decision dismissed an application from the Appellant for compensation allegedly arising from a breach of contract by the Respondent relating to the installation of an air-conditioning system in the Appellant's home. The contract was dated 11 November 2009 and was between the Appellant and A&A Heating and Airconditioning Pty Ltd. ("the Company") In the original application, Mr Afshin Ayat was named as first respondent and the Company was the second respondent. Mr Ayat was the only director of the Company at the time that the contract was made.

2. At the hearing below, in addition to dismissing the application, an order was made for the payment of some money by the Appellant to the Respondent for work done and not paid for.

3. The appeal notice is dated 25 October 2010. It comprises a lengthy document setting out a number of reasons why the Appellant believes that the original decision is incorrect. It also seeks to have the matter reheard so that the appeal can be constituted as a complete rehearing of the matter. It annexes a substantial number of documents, which (apart from the decision itself) were available at the original hearing and were considered by the Appeal President. The appeal also seeks the right to call all of the original witnesses again, with a view to re-examination and cross examination of them. The appeal disputes the order for payment by the Appellant to the Respondent.

4. The grounds of appeal (in summary) are as follows:

(4.1) The decision that there had not been a breach of contract was wrong;

(4.2) The finding that there had been a variation of contract was wrong;

(4.3) The respondent's witnesses lacked credibility;

(4.4) Whether any adverse finding should have been made about a failure by the Appellant to provide certain emails;

(4.5) The extent of work completed by the Company and outstanding work;

(4.6) That the counterclaim by the Respondent should not have been allowed;

(4.7) That the Appellant was entitled to have a third party to complete the

(4.8) That there had been breaches of the Building Code of Australia.

On 10 September 2010, the Appellant took out a subpoena in the Tribunal directed to both the Company and Mr Ayat. This required extensive details of the bank accounts, assets, contractual details with other clients, contracts entered into between the Respondent and other parties, the debts of the Company, together with details of the corporate structure of the Company and a number of other matters.

On the 17 September 2010, Mr Ayat in his capacity as a respondent made an application to the Tribunal that he should be removed as a respondent, and that the subpoena taken out by the Appellant on 10 September 2011 should be set aside. The grounds for setting aside the subpoena were that it was claimed to be oppressive, unreasonable and irrelevant to the proceedings, and sought material that was not a proper matter for a subpoena. Mr Ayat also sought that he be removed from the proceedings on the grounds that all contractual arrangements were between the appellant and the Company, and not Mr Ayat personally.

On the 20th September 2010, the Registrar of the Tribunal ordered that a number of clauses of the subpoena be set aside, and that with certain others the Company should answer in writing within one week. He also ordered that "upon there being no objections, Mr Afshin Ayat is removed as a Respondent." Neither the Appellant nor the Respondent attended at the hearing of the return of the subpoena.

By letter dated 23 September 2010, the Appellant notified the Tribunal that the order of the 20 September 2010 had been made in his absence and that he had received no letter from the Tribunal requiring him to appear on that date. He said that he was not aware that there would be an order made on that day. As the matter was already in hearing list of the Tribunal for a hearing on the

29 September 2010, the matters dealt with in the letter of complaint about the return of the return of subpoena were not set down for any separate rehearing. The Appellant had the opportunity to raise the matter as part of the hearing of the substantive issue.

As indicated above, on 29 September 2010 the matter was heard. Both the Appellant and his wife and Mr Ayat and his wife gave evidence, and substantial documentation was produced to and considered by the Tribunal. The Appeal President made his decision with the benefit of having seen the witnesses and making judgements about their credibility, and after considering all of the evidence that the parties wished to bring. It is from this decision that the Appellant appeals in the Appeal Division of the Tribunal.

1. On 7 January 2011, the Appellant by application sought an order that Mr Ayat be restored as a respondent to the appeal. The grounds for that were as follows:

"Mr Afshin Ayat is the owner of his company, A& A Heating and Air-conditioning Pty Ltd and he was actively engaged in dealing with me in this contract work including providing the quote, signing the contract and all subsequent correspondence in relation to this matter. Therefore it is reasonable that have Mr Ayat be included as a respondent in this matter."

1. On 11 January 2011, the Appellant took out a further subpoena seeking documents from the Respondent. The subpoena also sought information concerning the affairs of Mr Ayat and his wife. On 17 January 2011, the Company objected to having Mr Ayat reinstated as a party and applied for the subpoena to be set aside. On 24 January 2011, the Registrar of the Tribunal dismissed the application to rejoin Mr Ayat as a respondent. He also directed the Respondent to provide cost estimates of providing material, and struck out other clauses of the subpoena.

2. The matter was relisted for consideration on 17 March 2011. Subsequently, by order in chambers dated 10 March 2011, the matter was relisted for

30 March 2011. The reason for this was that the Respondent was unable to attend on 17 March 2011.

3. On the 30th March 2011, the Appellant was present but the Respondent was not. The Registrar determined that the Respondent was unable to produce certain of the material requested by the subpoena, that there was no evidence to support a claim in relation to the lease of the business premises of the Respondent and that the matter should be listed for hearing of the appeal.

4. On 4 May 2011, the Appellant filed an application that the order of

20 September 2010 made by the Registrar be set aside. This was the order that the original subpoena for documents and information be partially set aside, and that Mr Ayat be removed from the proceedings as a party. The grounds given for the application were that the order was made when the applicant was not present or able to object, and that no party had made the request to remove Mr Ayat as a respondent.

Under section 82 of the ACT Civil and Administrative Tribunal Act 2008 ("ACAT Act"), the appeal tribunal may deal with an appeal as either a new application, or as a review of all or part of the original decision. The discretion as to how the matter is to be dealt with is one for the appeal tribunal as it considers appropriate.

I do not consider that the option of hearing an appeal as a new application under section 82 (a) is one that should be adopted lightly. The purpose of the appeal process is not to allow an appellant to try and have a matter reheard because they do not like the previous decision: if that were so, there would be no point in the original hearing. In my opinion, the purpose of the section and the way that it ought to be applied is that appellants should be able to identify particular issues that arose in the conduct of the previous hearing, and then persuade the appeal tribunal that there was some fundamental flaw in the way that these issues were dealt with in the original hearing. It is only where such a flaw, and not just an outcome that the appellant disagrees with, that an appeal on those issues should be upheld.

It is only if the previous hearing was conducted in such a way that it cannot be said to have substantially delivered justice between the parties, and that it may be said to have failed as a hearing, that the alternative of a complete rehearing should be adopted.

The Appeal President had the opportunity to view of the witnesses, and to consider all of the documents that the parties wished to bring before him. He was critical of the way in which the Appellant conducted the proceedings, although the Appellant contended that as he was unfamiliar with the processes in the Tribunal, this provided some justification. I make no comment on this beyond noting it.

It may also be that on an appeal, evidence is available which was not available at the initial hearing and which had it been, is likely to have resulted in a different result. Notwithstanding the length and broad range of the appeal document and the grounds for appeal filed by the Appellant, I do not consider that the initial hearing should be set aside and the matter re-heard in its entirety on these grounds.

Having determined that the matter should proceed as an appeal under

section 82(b) of the ACAT Act, I determined that the only new evidence which could be admissible if a party proposed to bring it would be that which was not available at the previous hearing, to support argument on the issues set out in the notice of appeal.

I deal firstly with the application dated 4 May 2011, in which the Appellant argued that the order of 20 December 2010 made by the Registrar should be set aside. The decision of 20 December 2010 set aside a number of clauses of the earlier subpoena, and also removed Mr Ayat as a respondent. It was pointed out to the Appellant that these issues could have been raised at the hearing on the 29th September 2010. The appellant indicated that he was confused about these aspects at the hearing and it was not appropriately raised. While the Tribunal seeks to be helpful to the parties, it cannot be expected to make a party's case for it in a hearing, particularly where there is no or scant evidence to support an argument.

Having reviewed the subpoena which was the subject of the decision on

20 September 2010, I can see no basis for disturbing the decision of the Registrar made on that date. In addition to this, there was no evidence either in the earlier hearing or in hearing before me that would support an argument that Mr. Ayat consented to be a party to the contract or in some way had accepted personal liability for the obligations of the Company. The existence of a corporate structure with a single director and shareholder does not of itself impose a liability on the director. Accordingly, the appeal against the decision on the application of 4 May 2011 is dismissed.

As indicated above the Tribunal has the discretion to deal with an appeal as a new application, or as a review of all or part of the previous decision. Having regard to the substantial interlocutory steps in this matter, and to the fact that the Appeal President who heard the original matter had the benefit of hearing all of the witnesses and considering the written material produced by the parties, I determined that it was not appropriate that the matter being reheard as a new application. There was nothing said on the appeal that would lead me to the view that the intial proceedings had failed.

While a substantial amount of material had been filed by the Appellant relating to the installation of the heating and air-conditioning system at his home by the Respondent, at its heart the issue was whether the Company had undertaken the work in accordance with its contract. Included in this was whether there had been a variation to the written contract, or some oral agreement, between the Appellant and Mr Ayat on behalf of the Respondent that the final piece of equipment that had to be installed would be paid for by the Appellant before delivery to the house. This issue had been substantially ventilated in the earlier hearing, and there had been a divergence of evidence on it between the Appellant and the Respondent. As indicated above, I was not prepared to have all of the evidence on this point reheard and re-interrogated before me. I may, or may not, have come to a different view from the Appeal President; but that is not the function of the appeal tribunal. Nothing was raised by the Appellant on that point which satisfied me that the Appeal President had acted incorrectly in assessing that evidence and coming to his decision.

Even if I had taken the view that there had been no oral agreement for the Appellant to provide the costs of the machine, to allow it to be installed in spite of the cash flow problems of the Respondent, I consider that by failing to do so the Appellant did not mitigate the potential losses that could have arisen from a threatened or impending breach of contract. While the Appellant had the work completed at his house by another contractor at a much greater expense, had he shown some flexibility to work with the Respondent in financing the purchase of the necessary equipment (which he would have paid for anyway in the final payment), the losses that the Appellant has suffered through the use of a more expensive contractor could have been avoided. In my view this outcome is predictable, for the reasons outlined by the Appeal President in his original decision.

In relation to appeal grounds 4.1, 4.2 and 4.3, I am not satisfied that the grounds for appeal have been made out. The findings of fact required in making those decisions are essentially ones of assessment of witnesses and the credibility of those witnesses. As indicated above, the Appellant has not satisfied me that these findings should be overturned. There was appropriate evidence before the Appeal President to support those findings.

Ground 4.4 was one that criticised the findings in the original reasons for decision where the Appellant acknowledged that there were e-mails that had not been sent. Essentially this was a finding on credibility that I do not propose to disturb for the reasons set out in relation to the preceding three grounds.

Ground 4.5 argued that information that the Appellant had obtained after the initial hearing showed that the Respondent had been overpaid. There was no reason given as to why this information could not have been obtained in a lengthy period up to the initial hearing itself. Nor was there any third-party evidence to support the Appellant's claim as to the extent of the alleged overpayment in this regard. I decline to uphold the appeal on this ground.

Ground 4.6, contesting the award of $297 to the Respondent for on-site work completed and not paid for, is upheld on appeal. While there may have been such work done, the original claim of the Respondent was based on "the time spent in administering and replying to Mr Suman's e-mails and phone calls --

3 1/2 hours at $90 per hour." I do not consider that as the basis of the counterclaim has been spelt out by the Respondent as compensation for administrative time, it should be allowed on the different basis of work done on site.

Ground 4.7 goes to the issue of the obligations of the Appellant to minimise his losses, and his entitlement to have a third-party complete the work. Part of the obligation to minimise losses is the process of exploring whether the work can be completed by the existing contractor on a basis which does not increase the contract price. In this case, had the Appellant being prepared to fund the outstanding equipment to enable it to be installed within the contract price, the loss under this head would not have occurred. I agree with the comments of the Appeal President on this matter and disallow the appeal on this ground.

The final ground of appeal relates to an alleged failure to comply with the Building Code of Australia. This was not a matter raised in the original hearing, nor was there any evidence as to whether, and if so to what extent, it would have or had caused damages to the Appellant. The appeal cannot be upheld on this ground. It is a matter for the building regulatory authorities to take action over it if they see fit.

RESPONDENT: A&A Heating & Airconditioning Pty Ltd

DATE/S OF HEARING: 9 May 2011 PLACE: CANBERRA

DATE/S OF DECISION: 10 August 2011 PLACE: CANBERRA

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )