David Falzon t/as The Tilers Floor and Wall Specialists v Brian Tedman & Janelle Tedman

REASONS FOR DECISION Introduction 1This is an internal appeal from the decision of the Consumer and Commercial Division of the Tribunal made on 10 February 2014 ordering that Mr Brian Tedman and Mrs Janelle Tedman were entitled to recover $23,821 from Mr David Falzon, trading as the Tilers Floor and Wall Specialists, for defective waterproofing work. 2Mr and Mrs Tedman were the applicants in proceedings commenced in the former Consumer, Trader and Tenancy Tribunal (CTTT) in December 2012 and are the respondents to this appeal. Mr Falzon was the respondent to the original claim and is the appellant. 3This claim has a long history. Mr and Mrs Tedman obtained orders against Mr Falzon on 13 September 2013 following an uncontested hearing at which Mr Falzon did not appear. On application by Mr Falzon, the CTTT set aside the decision and directed that there be a re-hearing. On 1 January 2014, the NSW Civil and Administrative Tribunal (the Tribunal) was established and by cl 7 of Schedule 1 of the Civil and Administrative Tribunal Act 2013 (NSW) (the CAT Act), the proceedings were taken to have been duly commenced in the Tribunal and eligible to be heard and determined by the Tribunal.The hearing was listed on 10 February 2014. Mr Falzon did not appear at the scheduled time and the hearing proceeded in his absence. 4The parties were provided with reasons for decision on 9 April 2014 and on 6 May 2014 Mr Falzon filed an appeal. 5The claim which is the subject of the orders arose out of the supply of waterproofing services by Mr Falzon to Mr and Mrs Tedman on or about 3 September 2008. Prior to providing these services, Mr Falzon submitted a quotation to provide tiling services, including waterproofing. Mr and Mrs Tedman did not proceed with the tiling and made alternative arrangements with another supplier. Importantly, Mr Falzon entered into a contract to perform the waterproofing only and on 3 September 2008, he invoiced Mr and Mrs Tedman $1000 for these services. He provided a "certificate of waterproofing" to Mr Tedman as owner-builder. These matters are not in dispute. 6Four years later, Mr and Mrs Tedman filed an application with the Consumer Trader and Tenancy Tribunal (CTTT) dated 20 December 2012. 7Procedural directions were made by the Tribunal for the conduct of this appeal and submissions were made by Mr Falzon and lodged with the Tribunal on 3 November 2014, but apparently not received by Mr and Mrs Tedman until the day before the appeal. The issue of whether the Tribunal had jurisdiction to make the orders on 10 February 2014 was raised for the first time in these submissions. 8There is significant dispute between Mr Falzon and Mr and Mrs Tedman about whether there was compliance with directions made by the CTTT and by this Tribunal. The application, including the appeal, was plagued by non-compliance with directions and confusion about service of documents, principally on Mr Falzon's part; however, many of the key factual matters were not in dispute. 9Having regard to the submissions of the parties and the critical questions for determination by the Appeal Panel were whether the Tribunal had jurisdiction to hear and determine the issues between the parties, and if the Tribunal is vested with jurisdiction, whether Mr Falzon was denied procedural fairness by the Tribunal in proceeding with the hearing in his absence. Mr Falzon raised a number of further issues, which the Appeal Panel determined were not questions of law. The late notice of the jurisdictional issue itself raised procedural fairness issues. 10The Appeal Panel decided that the appeal should be allowed and the decision set aside. Our reasons follow. Statutory framework 11Mr and Mrs Tedman made their original claim in the General Division of the CTTT as a consumer claim under the Consumer Claims Act 1998 (NSW) (the Consumer Claims Act). 12The Consumer Claims Act provides that the Tribunal does not have jurisdiction to hear and determine a consumer claim if the cause of action giving rise to the claim first accrued more than three years before the date on which the claim was lodged (s 7(4)(a)). 13Relevantly Mr and Mrs Tedman completed a General Division Application form dated 20 December 2012 and answered a series of questions concerning jurisdiction on the form: "Check these before submitting your application: Are you making the application within the time limit? (refer to No 5 in the Guidelines)." Mr and Mrs Tedman answered "NO." The guidelines refer to the three-year time limit imposed by the Consumer Claims Act. 14As the matter was outside the three-year time limit imposed by the Consumer Claims Act, the matter was transferred to the Home Building Division and proceeded before the Tribunal under the Home Building Act 1989 (NSW) (the Home Building Act). The limitation period for claims made under the Home Building Act at the relevant time was seven years from the date of the contract. 15The Home Building Act provides for the regulation of residential building and specialist work, the resolution of building disputes and statutory warranties in respect of residential building work. 16Section 18B of the Home Building Act provides: The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work: (a) a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new ...................... [emphasis added] 17Section 3(1) relevantly provides that "residential building work" means any work involved in the making of alterations or additions to a dwelling but "does not include work that is declared by the regulations to be excluded from this definition." 18Regulation 9 of the Home Building Regulation 2004 provides that "any work (other than specialist work) the reasonable market cost of the labour and materials involved in which does not exceed $1,000 (inclusive of GST)" is excluded from the definition of residential building work. "Specialist work" is defined in s 3(1) of the Home Building Act and does not include waterproofing work. 19Part 3A deals with the resolution of building disputes and claims. Division 4 sets out the jurisdiction of the Tribunal in relation to building claims. Under section 48K of the Home Building Act "the Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations)." Section 48L provides that the Tribunal is to be "chiefly responsible for resolving building claims." "Building claim" is defined in s 3(1) to mean, relevantly, a claim for "the payment of a specified sum of money...that arises from a supply of building goods or services" which in turn means "goods or services supplied for or in connection with the carrying out of residential building work or specialist work." 20Thus, where the reasonable market cost of the labour and materials, including GST, does not exceed $1000, the statutory warranties in s 18B do not apply and the Tribunal does not have jurisdiction to hear and determine the claim. 21Under subs 80(2)(b) of the CAT Act an internal appeal may be made as of right on any question of law but with the leave of the Appeal Panel on any other grounds. Relevantly, cl 12 of Schedule 4 of the CAT Act provides that the Appeal Panel may grant leave to appeal in respect of a decision made by the Consumer and Commercial Divisions but only if satisfied that the appellant may have suffered a "substantial miscarriage of justice" because the decision was not fair and equitable, against the weight of evidence or significant new evidence is available that was not available at the hearing. 22In determining an internal appeal, the Appeal Panel has broad powers under s 81 of the Civil and Administrative Tribunal Act (the CAT Act) and may make such orders as it "considers appropriate in light of its decision" on the appeal. Those orders include, but are not limited to orders that the appeal be allowed or dismissed, the decision under review be confirmed, affirmed or varied, the decision under appeal be quashed or set aside, the decision under appeal be quashed or set aside for another decision to be substituted or that the whole or part of the case be reconsidered by the Tribunal, either with or without further evidence, according to the directions of the Appeal Panel. Relevantly, s 81(2) provides, The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other leislation on the Tribunal at first instance when varying, or making a decision in substitution for, the decision under appeal. 23The Appeal Panel may also decide to deal with the appeal by way of a new hearing and permit new evidence, in addition to or in substitution for, the evidence heard by the Tribunal at first instance (s 80(3) of the CAT Act). Grounds of appeal and submissions of the parties 24Mr Falzon set out five grounds in his notice of appeal. First, he contended that the Tribunal erred in finding that he should pay the compensation sum ordered. He gave no other particulars for this ground. Secondly, he contended that the Tribunal erred in finding there was no appearance by him at the hearing and, thirdly, in finding that it was in the interests of justice that the hearing proceed in his absence. Fourthly, he contended that the Tribunal erred in finding that the waterproofing membrane failure and consequential damage was due to a failure on his part to supply the waterproofing service in a proper and workmanlike manner and, fifthly, that the materials used by him were faulty and not suitable for purpose. 25In his written submission filed prior to the hearing, Mr Falzon contended that while he had provided a quotation to cover both the waterproofing and tiling work, Mr and Mrs Tedman did not contract him to undertake tiling work. He undertook the waterproofing in anticipation of doing the tiling but was not retained for any further work. He invoiced Mr and Mrs Tedman $1000 for the waterproofing. He could not be responsible for any damage because he did not complete the tiling work. Mr Falzon contended the Tribunal fell into error as it determined the issues between the parties when it had no jurisdiction to do so as the work performed was not residential building work for the purposes of the Home Building Act. Mr Falzon further contended that he had fully intended to defend the matter at the hearing on 10 February 2014 but attended the incorrect venue and therefore arrived after the end of the hearing. The Tribunal erred in failing to allow him to defend the matter. 26Mr and Mrs Tedman contended that there was no error of law by the Tribunal. The hearing was due to commence at 9:15am, the Member delayed the hearing then proceeded in Mr Falzon's absence when he did not arrive. Given the history of non-appearance by Mr Falzon it was reasonable for the Tribunal to proceed with the hearing. There was sufficient evidence for the Tribunal to conclude Mr Falzon's workmanship and/or materials were faulty, causing the water damage. Mr and Mrs Tedman accepted that the cost of the services and materials supplied by Mr Falzon did not exceed $1000. They did not make any submission about whether the Tribunal had jurisdiction to hear and determine their claim. 27Mr Falzon sought orders that the decision be set aside, that he be permitted access to the premises to conduct an inspection, that he be permitted to file and serve evidence and that the matter be listed for a new hearing. Mr and Mrs Tedman requested that the appeal be dismissed. Does the appeal raise a question of law? 28The threshold issue for determination is whether the Tribunal had jurisdiction to hear and determine the matter on 10 February 2014. The nature and extent of the Tribunal's jurisdiction and whether it had power to make an order under legislation is a question of law. It is clear the Tribunal has jurisdiction to determine jurisdiction (Griffin v Ingram [2014] NSWCATAP 5 at 16 per Wright, President). If the Tribunal did not have jurisdiction, that is the end of the matter. 29If the Appeal Panel rejects this contention and finds there was jurisdiction for the Tribunal to make the order, Mr Falzon nonetheless contends that the order should still be set aside on the grounds that he was denied procedural fairness in the circumstances of the case. He did not have the opportunity to defend the claim as the Tribunal unfairly proceeded in his absence. 30The third issue raised by Mr Falzon was that the Tribunal erred in finding that the water damage resulted from Mr Falzon's poor workmanship and/or his use of faulty materials. As Mr Falzon explained this ground of appeal in his oral submissions, the Tribunal should have rejected the quotations of the builders. The quotations were based on self-interest and have not been tested. They were not filed "in accordance with evidence rules." In the absence of the quotations there was no evidence before the Tribunal, apart from the assertion of Mr and Mrs Tedman that the waterproofing was faulty. 31We reject this submission. One quotation did not refer to the damage or opine on the cause but was relied on by the Tribunal to quantify Mr and Mrs Tedman's loss. The second quotation from P and R Lawrence opined as follows: After an inspection of the property we found water damage to flooring in the ensuite and bathroom. The timber floor frame appeared to be in reasonable condition. We have the opinion that waterproofing in both areas has not been installed properly or has failed. 32In the reasons for decision it is clear that the Tribunal relied on the sworn evidence of Mr Tedman given during the course of the hearing and the opinion of P and R Lawrence. While the basis for the opinion is not articulated or tested, there was no evidence to the contrary. The Tribunal is not bound by the rules of evidence (s 38(2) of the CAT Act) and there was material before the Tribunal on which the findings of the Tribunal that waterproofing by Mr Falzon was the cause of the damage was based. This is not a case where there was no evidence to support the findings and conclusions of the Tribunal (Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Mason CJ at 355-56). Accordingly, this issue does not raise a question of law and is not relevant to our deliberation. 33If Mr Falzon's appeal raises a question of law, it is not necessary for us to determine the question of leave. Did the Tribunal have jurisdiction to make the orders? 34There is no dispute that the invoiced services supplied by Mr Falzon did not exceed $1000. Accordingly, not only are the statutory warranties in s 18B of the Home Building Act not available to Mr and Mrs Tedman but, importantly, the Tribunal did not, at the relevant time nor does it now, have jurisdiction to hear and determine Mr and Mrs Tedman's claim under the Home Building Act. 35There was no claim available to Mr and Mrs Tedman under the Consumer Claims Act because the application was filed outside the three-year time limit as prescribed by that Act. This was explained in the guidelines and acknowledged by Mr and Mrs Tedman when they ticked the box indicating that the application was NOT made within the time limit prescribed. 36Relevantly, the application form itself stated "the answer to all the questions must be YES or otherwise the application may be dismissed." As such, the Tribunal did not have jurisdiction to consider the application as a consumer claim when Mr and Mrs Tedman commenced the proceeding in 2012. 37The Tribunal may only exercise functions as conferred by statute. Mr Falzon's submission is therefore correct. The Tribunal did not have jurisdiction to make the order on 10 February 2014 and, indeed at the time the proceedings were commenced by Mr and Mr Tedman, the Tribunal did not have jurisdiction to hear and determine this matter. Nor did Mr and Mrs Tedman have any entitlement to make a claim under the statutory warranties provided under the Home Building Act. This was not identified at the time Mr and Mrs Tedman lodged their claim because proceedings were commenced in the General Division of the CTTT, rather than in the Home Building Division, and the contract price, the key information alerting the Tribunal to the jurisdictional limit, did not need to be recorded on the application form. Furthermore, the invoice for the service was not attached to the application. 38It is unclear whether the Tribunal had evidence of the invoice at the hearing on 10 February 2014 and whether the Tribunal could have been on notice there was a jurisdictional flaw in Mr and Mrs Tedman's claim. However, we note that the Tribunal specifically addressed jurisdiction in the reasons for decision under the specific heading, stating as follows: It was clear that the application was a building claim within the meaning of the Home Building Act 1989 and that the proceedings were brought within the time limits for breaches of the statutory warranties applying to work carried out in 2008. 39It is also unclear whether Mr Falzon would have raised the jurisdiction of the Tribunal if he had participated in the hearing at first instance given he did not raise this issue in in his notice of appeal and did not particularise this ground of appeal until his submissions were filed. As already noted, Mr and Mrs Tedman did not have a notice of this submission until they were served with a submission by email the day before the hearing and, on their account, not until the commencement of the hearing when the submission was drawn to their attention by the Appeal Panel. The Appeal Panel briefly adjourned the hearing to allow Mr and Mrs Tedman to read the submission. 40While it is unfortunate Mr and Mrs Tedman were not on notice that Mr Falzon was seeking to raise this issue, the lack of notice is immaterial to the merits of the submission. There is no prejudice to Mr and Mrs Tedman because there is no available argument or evidence that can be, or could have been, raised in response. The matter cannot be rectified by evidence or further investigation. Mr and Mrs Tedman's claim was fundamentally flawed from the outset. Even if Mr Falzon had not raised the question of jurisdiction, it would have been incumbent on the Tribunal to dismiss Mr and Mrs Tedman's claim once the issue of the contract price, which is not disputed, was identified. Furthermore, there is no utility in remitting the matter for reconsideration on the merits as the claim cannot succeed, either as a claim in the Home Building Division of the General Division. 41The comments of the Court of Appeal (Bathurst CJ, Beazley P and Tobias AJA) in Warkworth Mining Limited v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105 at [41] - [43] is apposite: 41.Another aspect of procedural fairness was argued in the present case, namely, that where a court determines a matter on a basis that was not in issue or argued in the proceedings, there will have been a denial of procedural fairness: see Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141. This is a basic requirement of a fair trial. See also Re Minister for Immigration and Multicultural Affairs; Ex parte Miah in the context of administrative decision-making. 42.That general principle is, however, subject to an important qualification, stated at the practical level, by asking, "Would further information possibly have made any difference [to the decision]?": Stead v State Government Insurance Commission at 145; Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S154/2002 [2003] HCA 60; (2003) 77 ALJR 1909 at [28]. An appellate court will not order a new trial where the inevitable result would be that the same order would be made on a retrial. Or, as McHugh J observed in Muin v Refugee Review Tribunal, stating the obverse of this principle, an appellate court should not refuse relief unless it is confident that the breach could not have affected the outcome of the case. 43.In Ucar v Nylex Industrial Products Ltd [2007] VSCA 181, Redlich JA, at [75], identified a further circumstance where relief would be refused, namely, where there is an incontrovertible fact or point of law which provides a discrete basis for the decision which cannot be affected by the procedural unfairness. 42In the present case, there is no further information that could have made any difference to Mr and Mrs Tedman's claim. Once the contract price for the waterproofing was established, it was inevitable that Mr and Mrs Tedman's claim would fail. This was the position at the time of the hearing on 10 February 2014 and remains the case. As the Tribunal does not have jurisdiction, there is no utility in setting aside the order and listing the matter for a rehearing. 43The appeal must therefore succeed and it is not necessary for the Appeal Panel to consider the question of whether Mr Falzon was denied procedural fairness. 44However, as the matter was commenced in 2012, which was within the limitation period for commencing a claim for breach of contract, the parties may wish to have the matter transferred to a court of competent jurisdiction to have the matter determined as a contract claim. . 45While the Appeal Panel would have power to transfer the proceedings pursuant to s 81(2) of the CAT Act, given the late notice of the jurisdictional issue, this was not an issue raised with, or by, the parties at the hearing of the appeal. As such, the most appropriate course is to set aside the decision and remit the proceedings to be reconsidered in accordance with our reasons on this question alone. This will give the parties adequate opportunity to decide whether they wish to have the proceedings transferred to a court of competent jurisdiction and to make submissions on this issue to the Tribunal. Outcome and orders 46The appeal is allowed. 47The orders made on 10 February 2014 are set aside. 48Mr and Mrs Tedman are to prepare submissions to indicate whether they wish to have the matter transferred to a court of competent jurisdiction. Such submissions are to be filed with the Registry and served on Mr Falzon on or before 31 December 2014. 49In the event Mr and Mrs Tedman seek a transfer, Mr Falzon shall prepare submissions to indicate whether the transfer is consented to or opposed. Such submissions shall be filed with the Registry and served on the respondents by no later than 15 January 2015. 50The proceedings are remitted for consideration of whether they should be transferred to a court of competent jurisdiction in accordance with our reasons and any submissions filed and served by the parties. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar