Elgun v Green Line Excavations Pty Ltd

Jurisdiction

1. The claim originally filed on 16 June 2015 by Mr Elgun was commenced as a home building claim and appropriately transferred to the General Division and dealt with as a consumer claim brought pursuant to s 7 of the former Consumer Claims Act 1998 (NSW). The Consumer Claims Act was repealed effective from 22 October 2015 with the equivalent provisions now incorporated into Fair Trading Act 1987 (NSW).
2. At the relevant time, the Tribunal had jurisdiction to hear and determine any "consumer claim" brought before it: Consumer Claims Act, s 7(1). Section 3A(1) of that Act provided that a "consumer claim" included a claim by a consumer for the payment of a specified sum of money that arises from a supply of goods or services by a supplier to the consumer. Mr Elgun was a consumer within the meaning of s 3 of the Act and the claim arose out of the supply of goods and services by the respondent.
3. The Tribunal was empowered under s 8(1) to make an order requiring a supplier to pay the claimant a specified sum of money. Section 8 also permitted the Tribunal to make orders relieving the consumer from having to make payments to the respondent that may arise under the contract.
4. In exercising this power, the Tribunal was required to "make such orders as, in its opinion, will be fair and equitable to all the parties to the claim": Consumer Claims Act, s 13(1). The claim made by Mr Elgun was based on alleged breaches of the contract, not on any alleged statutory breach.

Factual basis for Tribunal's findings on repudiation and/or termination

1. Set out below are extracts from Mr Elgun's original application to the Tribunal which tell the story from his point of view: We engaged 'Green Line Excavations Pty Ltd trading as NSW Asbestos Removals to carry out Asbestos Removal and also non-asbestos demolition work on our property (address deleted). On Friday 22nd May 2015, Green Line Excavations Pty Ltd commenced with the removal of insulation BATs from the roof cavity. Raymond Ager, the Director of the company had verbally assured us that the removal would be carried out externally via the roof. However, on the day it was sprinkling a little and we contacted Raymond to see if he was still going to commence work. He responded saying, "I'm already here at your property and I'm going to do it through the house instead whether you like it or not." This was not part of our agreement and we were not comfortable with the insulation to be brought down from the roof cavity and into our house as it was and still is a major health concern for us. When we explained this to Raymond (Ager) he said, "I've got workers here so if you want me to send them home I will, but you will still pay for the days work." His attitude was extremely rude, arrogant and condescending towards us. He wasn't at all concerned about our needs and the level or quality of work he had promised us before we signed a contract with him. … I believe Raymond has contaminated my property with hazardous materials and that our home is no longer safe to enter. We believe this because the bats that entered our living space have been exposed to years and years of hazardous material as advised by Raymond. This is why we didn't want it to enter our living space and wanted it removed through the roof, which Raymond had promised us he would do. We therefore contacted NSW Workcover and informed them of our concerns. … On Wednesday 27th May 2015 Raymond emailed us an invoice for $3817.35. This invoice is based on rates for removing asbestos and includes other ridiculous charges that aren't even applicable to the work actually carried out. This invoice should not be more than $500 as the only works conducted was removal of insulation and ceiling of two rooms. We had a previous quote from him for some asbestos work that totals $2695. Please note that this price is to remove all insulation bats, remove gyprock, fibrous plaster ceilings from all internal rooms and bathroom. Remove kitchen cupboards and ALL carpets. This quote included removal and disposal costs. Raymond has partially conducted 2 out of the 10 components of this quote as we have 7 separate ceilings throughout the house and he has only removed two. The carpet remains where it is (component eight), as does the kitchen (component nine). No disposal carried out (component 10) as they have been dumped in our garage. (Words in brackets and emphasis added.)
2. In the notice of appeal Mr Elgun amended the amount he said was due from $500 to $800.
3. There was an email exchange between Mr Elgun and Mr Ager on the evening of 22 May 2015. In the first email Mr Elgun wrote: Hi Ray, if I was to cancel the contract as of tonight how much would I owe you? Cheers Alex
4. Mr Ager's response was: Dear Alex, please advise your reasons for cancelling the contract.
5. Mr Elgun replied: At the moment I'm not asking to cancel. I'm asking how much I would owe you if I did cancel as of tonight.
6. Mr Elgun wrote the following text message which Mr Ager received at 8.39 pm on 22 May 2015: Hi Ray, I haven't received a response to my email. No work is to commence at my property at this point in time. If you need to discuss further please contact me. Thank you Alex
7. Mr Ager filed a statement dated 2 November 2015. He gave evidence that in April 2015 he was contacted by Mr Elgun to obtain a quote to carry out the asbestos material and also to perform non-asbestos related demolition to his property. After submitting numerous quotes Mr Elgun accepted a quotation for $11,208 for the removal of the ceiling insulation bats and other internal works. In addition Mr Elgun wanted the asbestos fibro garage removed and an asbestos fibro sunroom at the back of the house removed.
8. On 22 May 2015 Mr Ager said that he attended the premises and discussed with Mr Elgun that the bats would be removed through the interior of the house. He says that Mr Elgun agreed to that course. According to Mr Ager, there was never any written or oral agreement with Mr Elgun that the bats would be removed through the roof. Mr Ager agreed that the email correspondence set out above was sent and received. Mr Ager denies contaminating the interior of the house.
9. Mr Ager said that he took the view that Mr Elgun terminated the contract otherwise than in accordance with the terms of the contract.

Tribunal's decision

1. The Tribunal found that Mr Elgun terminated the contract illegally, that is, not in accordance with the terms of the contract. Alternatively, the Tribunal found that Mr Elgun repudiated the contract by preventing the respondent from returning to the site and continuing the work. The Tribunal also found that Mr Ager accepted the termination by removing himself and his tools from the site and sending an invoice for $3,817.35 on 25 May 2015.
2. The Tribunal concluded that Mr Elgun had not demonstrated that any particular item of the invoice was unreasonable. His only objection was said to be the use of and charging for asbestos labourers and supervision. The Tribunal found that the site was registered as an asbestos site and that it was reasonable for the respondent to use asbestos labourers in those circumstances.
3. In relation to Mr Elgun's submission that Mr Ager was aggressive, overbearing and intimidating, the Tribunal found that this perception was the main reason he terminated or repudiated the contract. According to the Tribunal, whether or not the insulation material was removed safely was not the issue. The Tribunal added that it was obvious from the respondent's evidence that it was intended that the work be done quickly in one period of five or six days and that Mr Elgun prevented that from happening. The Tribunal concluded that the amount of $3817.35 remains due and payable by Mr Elgun.

Grounds of appeal

1. Mr Elgun has a right to appeal on a question of law but must obtain the Appeal Panel's permission to appeal on any other ground: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2)(b). Mr Elgun appealed both on questions of law and sought leave to appeal on other grounds. Of the three grounds of appeal, grounds 1 and 2 are on questions of law and ground 3 requires leave.

Ground 1 - breach of procedural fairness

1. Mr Elgun says he was denied procedural fairness because he was not given copies of photographs relied on by the respondent prior to or during the hearing. He says that the respondent and the Tribunal referred to the photographs but he was not given access to them. Mr Elgun also said that he was not aware of any photographs taken of his property and the legitimacy of those photos needs to be examined.
2. Mr Ager gave evidence that he sent the photos to Mr Elgun's by registered post. He provided a signed document from Australia Post confirming that a parcel had been sent to Mr Elgun's address on 4 August 2015. He says that that parcel contained the photographs.
3. The Tribunal is required to comply with the rules of procedural fairness which are sometimes called the rules of natural justice: NCAT Act, s 38(2). Those rules require that a person be given a fair hearing before decisions are taken which affect their interests: Re Refugee Tribunal; ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 at [101]. Pursuant to s 38(5)(c) of the NCAT Act, the Tribunal is "to ensure that parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings".
4. The rules relating to the service, giving and lodgement of notices or documents are found in cl 13 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules). If documents are served by post, addressed to the person, it is taken to have been served, given or lodged at the end of the fourth working day after the date on which it was posted. That is the case regardless of whether the documents are actually received: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87 at 96; Deputy Commissioner of Taxation v Meredith [2007] NSWCA 354 at [78] (Basten and Ipp JJA). On the basis of the evidence given by Mr Ager, we are satisfied that the photographs were delivered and are therefore deemed to have been served.
5. Even if that finding is incorrect, and the Tribunal did breach procedural fairness by taking into account the photographs without giving Mr Elgun a reasonable opportunity to respond to them, none of the issues relate to the photographs. The only issues the Tribunal dealt with were who repudiated the contract and whether $3,817.35 was a reasonable price for the works carried out. The photographs are not relevant to either of those questions. A party who alleges procedural unfairness "must demonstrate that they have in a practical sense lost an opportunity to make some submission material to the question in issue because they did not have access" to the photographs: CSR Ltd v Eddy (2008) 70 NSWLR 725 at [38] Basten JA. Mr Elgun has not done so.

Grounds 2 - respondent repudiated the contract, not the appellant

Appellant's submissions

1. Mr Elgun submitted that it was not open for the Tribunal on the basis of the evidence before it, to find that he had repudiated the contract. The correct finding was that the respondent had acted in a way that evinced an intention to no longer be bound by the terms of the contract, thereby repudiating the contract. According to Mr Elgun, the respondent was unwilling to render substantial performance of the contract, entitling him to accept the repudiation and to terminate the contract.
2. In his original application to the Tribunal Mr Elgun had said that the respondent had verbally assured him that the removal of the insulation bats would be carried out externally through the roof. However he alleges that the respondent told him that he was intending to remove the bats through the house whether he liked it or not.
3. The second basis on which Mr Elgun said that the respondent had evinced an intention not to be bound by the terms of the contract was by failing to provide information, not answering any of his phone calls, text messages and voice mails and not returning the last email regarding works carried out and costing.

Consideration

1. Regardless of whether the appellant or the respondent repudiated the contract, the issue was the appropriate measure of payment for work performed until the date the contract ended. Both parties agree that the contract ended on or about 22 May 2015 when Mr Elgun wrote an email stating "no work is to commence at my property". The respondent did not charge Mr Elgun for work done after that date. The issue before the Tribunal and on appeal is whether or not the respondent is entitled to payment of $3817.35 for one day's work.
2. As this ground of appeal cannot affect the outcome, we decline to entertain it: Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145.

Ground 3 - $3817.35 was not a reasonable price for the works

Principles applicable to appeals on questions other than questions of law

1. This ground does not identify a question of law so leave is required. In order to grant leave, the Tribunal must be satisfied that Mr Elgun may suffer a "substantial miscarriage of justice" because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with): NCAT Act, Sch 4, cl 12(1).
2. The expression "miscarriage of justice" was considered by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17. There the Appeal Panel stated at [71] 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.
3. No "significant new evidence" that was not reasonably available at the time of the hearing below, has arisen in this appeal. Therefore cl 12(1)(c) does not apply. As to whether the decision being appealed was not fair and equitable or was against the weight of evidence, guidance is also given in the decision of Collins v Urban. In that case the Appeal Panel stated at [77] - [79]: 77 As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that: (1) If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12]. (2) The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]. If in either of those circumstances the appellant may have been deprived of a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence. 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 because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable …

Evidence as to damages

1. The invoice for $3817.35 was comprised as follows: 4 asbestos labour by eight hours by $62 per hour +1 hour travel $2250.60 1 asbestos supervisor eight hours by $72 +1 hour travel $712.80 10 pairs of overalls $59.80 10 dust masks $26.66 to one role of 2 mm plastic $138.60 two roles silver duct tape $117.48 hire of two HEPA vacuum $88 six vacuum bags $335.41 removal of two ceilings, ceiling insulation and vacuuming of ceiling $88
2. Mr Elgun relies on a document he provided to the Tribunal which was a quote from the respondent for non-asbestos internal works for the sum of around $2700. He says that the actual work carried out on 22 May 2015 is a fraction of the work included in this quote but the respondent is seeking $3817.35. According to Mr Elgun, the Tribunal should have given substantial weight to the quote for around $2700 as it is indicative of the worth of the works carried out. That quote was received two or three weeks before the works were carried out on his property. Furthermore the works were for non-asbestos work and the schedule of rates used by the respondent to determine the $3817.35 amount is based on the schedule of rates for additional asbestos works.
3. The Tribunal found that the site was registered as an asbestos site and that it was reasonable for the respondent to use asbestos labourers in those circumstances. No evidence put either at the hearing or on appeal to suggest that that finding is incorrect.
4. The first quote for $2695 dated 29 April 2015 was to "remove installation bats from ceiling, remove gyprock, fibrous plaster ceilings from all internal rooms and bathroom. Remove kitchen cupboards and all carpets". This quote includes removal and disposal costs including "Dispose of asbestos at an EPA approved facility".

Consideration

1. The respondent and Mr Elgun agreed to a total contract price of $11,208.00 for the demolition and removal of asbestos fibro cladding. The respondent stated in his response filed on 5 November 2015: The contract price for the work the homeowner wanted carried out at his premises amounted to the sum of $11,200. In relation to the homeowner's, I utilised asbestos labourers as the homeowner's premises were registered as an asbestos site and it was reasonable and necessary to use them. The amount I claimed from the homeowner in sum of $3817.35 is in fact less than was due pursuant to our schedule of rates. By signing the contract the appellant was fully aware of the rates and he accepted them.
2. The Tribunal's decision considered and cited the documents tendered by Mr Elgun and concluded that "there was no evidence whatsoever that the works undertaken on the first day were unprofessional or not in a tradesman like manner or not in accordance with the contract". In circumstances where the site was registered as asbestos registered premises, the Tribunal did not make a finding that was against the weight of the evidence or that was not fair and equitable.

Orders

1. Leave to appeal is refused.
2. The appeal is dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 May 2016