Emmery v Smith

Notice of Appeal

1. A Notice of Appeal was filed on 25 June 2014. An Amended Notice of Appeal was filed on 26 August 2014, by leave of the President given on 6 August 2014.
2. The grounds of appeal stated in the Amended Notice of Appeal are: 1. The Tribunal erred as a matter of law to find that the [appellant] was not entitled to a quantum meruit claim on a just and equitable basis due to the fact that no insurance was in place in circumstances where insurance was in place. 2. The Tribunal erred as a matter of law to find that the [respondent] was entitled to rectification work that included work not performed by the [appellant].
3. Leave to appeal is also sought. In section 12A of the Amended Notice of Appeal, the reasons why the Appeal Panel should grant leave to appeal are not specified. However, in section 12B of that document, which specifically deals with an appeal from a decision of the Consumer and Commercial Division, allegations are detailed concerning the decision not having been fair and equitable and against the weight of evidence, said to be based on the two grounds of appeal and a miscellany of documentation comprising Annexure B to the Amended Notice of Appeal. Within that documentation the appellant relied, in particular, on a letter from Jacobs Builders of 28 March 2011 setting out restoration costs of $16,195.00 with endorsements from the Appellant to the effect that he alleges that $8,404.00 relates to work which was not the subject of the contract, and the argument is made that the sum awarded should accordingly be reduced to $7,791.00, and a letter dated 13 June 2014 from the appellant's solicitors to the Registrar of the Tribunal referring to that material and evidence concerning it which the appellant had given at the hearing.
4. In written submissions the appellant has raised three principal contentions: 1. The Tribunal erred in finding that the appellant had failed to obtain insurance and to provide a copy of the certificate of insurance. Therefore the Tribunal incorrectly refused to find that it was just and equitable to allow the appellant a quantum meruit claim. As the a result of this error of the Tribunal and the incorrect application of the s 94 of the HBA Act the $12,000.00 should not have been ordered to be refunded. 2. The Tribunal erred in that it did not find that the appellant wrongfully repudiated the contract and therefore the respondent is not entitled to claim for incomplete works but only rectification works. There were works listed by Mr Jacobs which, the appellant said, were not rectification work caused by the appellant and which totalled $8,404.00. The appellant submits that it is the difference between $16,195.00 and $8,404.00 that should be awarded to the respondent, that is, $7,791.00. 3. As to the order that the appellant pay 75% of the respondent's costs, the appellant submits that the position would be different had the respondent been awarded an amount of $7,791.00. It is submitted that the percentage would have been reduced substantially, to approximately one-eighth of the claim.
5. The Amended Notice of Appeal also seeks leave to appeal out of time, but Dr Dean, Counsel for the respondent, advised at the appeal hearing that that application was not opposed. Accordingly, we will extend the time for lodging the Notice of Appeal to 25 June 2014. We note, that prior to the lodgement of the Notice of Appeal, application had been made by the appellant for a rehearing under s 68 of the Consumer Trader and Tenancy Act 2001 (NSW) (CTTT Act), and that this Tribunal on 20 June 2014 dismissed that application on the ground that the right to make such an application was not one which was preserved by the transitional provisions in the NCAT Act.

Consideration

1. Section 80(2)(a) of the NCAT Act states that an appeal may be made as of right on any question of law, or with leave of the Appeal Panel on any other grounds (s 80(2)(b)).
2. The second ground of appeal, as Mr Adams, Solicitor for the Appellant, conceded at the appeal hearing, does not raise any question of law, but questions of fact. Nor does it seem to the Appeal Panel that the first ground of appeal raises any question of law, and is principally based on a question of fact, namely whether there was insurance in place at the time the subject work was undertaken.
3. To the extent that questions of law are not involved in the appeal, the application for leave to appeal has to be dealt with. Schedule 4, clause 12 of the NCAT Act states that in an appeal from the Consumer and Commercial Division an appeal panel may grant leave to appeal only if the appeal panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable, or 2. the decision of the Tribunal under appeal was against the weight of evidence, or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
4. In Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarised at [71] and [79]: [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.
5. As to the principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted, Collins v Urban reviewed relevant cases and concluded at [84]: 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.
6. It was explained in Pholi v Wearne [2014] NSWCATAP 78 at [32] that: Even if the appellant establishes that [they] may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel then retains the discretion whether to grant leave under s 80(2) of the Act (see Collins v Urban, supra at [80]-[84]). [The appellant] must demonstrate something more than that the Tribunal was arguably wrong. Leave is ordinarily granted only where the matter involves an issue of principle, questions of public importance, where the injustice is reasonably clear or where the Tribunal has gone about its fact finding process in such an unorthodox manner that it is likely to have produced an unfair result.
7. For the purpose of the appeal hearing each party relied on some further evidence. Neither party objected to the other's evidence and, particularly as it was not of great volume and basically recapitulated matters covered in the appealed decision, we received that material (s 80(3)(b), NCAT Act).
8. As to the first ground of appeal the appellant, in particular: 1. produced a certificate of insurance from QBE Insurance (Australia) Ltd dated 26 August 2010, addressed to the respondent, in respect of a contract of insurance said to be complying with ss 92 and 94 of the HBA and apparently referring to the subject works and contract except that the declared contract price was $85,000.00; 2. said that he was under the belief that the respondent had been provided with the certificate by QBE and, in effect, that he had been mistaken in believing that it had been attached to his statements lodged in the subject proceedings; and 3. said that at a directions hearing in the subject proceedings at North Albury Community Centre on 11 November 2010, when he had no legal representation, he had given a copy of the QBE certificate to the then Tribunal member.
9. Sections 92(1) and 94 of the HB Act relevantly deal with insurance: 92 Contract work must be insured (1) A person must not do residential building work under a contract unless: (a) a contract of insurance that complies with this Act is in force in relation to that work in the name under which the person contracted to do the work, and (b) a certificate of insurance evidencing the contract of insurance, in a form prescribed by the regulations, has been provided to the other party (or one of the other parties) to the contract. Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case. 94 Effect of failure to insure residential building work (1) If a contract of insurance required by section 92 is not in force, in the name of the person who contracted to do the work, in relation to any residential building work done under a contract (the "uninsured work" ), the contractor who did the work: (a) is not entitled to damages, or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, in relation to that work, and (b) is not entitled to recover money in respect of that work under any other right of action (including a quantum meruit). (1A) Despite section 92 (2) and subsection (1), if a court or tribunal considers it just and equitable, the contractor, despite the absence of the required contract of insurance, is entitled to recover money in respect of that work on a quantum meruit basis. (1B) A contractor who applies to a court or tribunal for a remedy under this section, or who is awarded money under this section, is not guilty of an offence under section 92 (2) by virtue only of that fact. (1C) Without limiting the factors that a court or tribunal may consider in deciding what is just and equitable under subsection (1A): (a) in relation to any contract-the court or tribunal may have regard to the impact on the resale price of the property if no contract of insurance is provided, and (b) in relation only to a contract entered into before 30 July 1999-the court or tribunal is not to be limited by the fact that the required contract of insurance was not obtained until after the date of the contract. (2) However, the contractor remains liable for damages and subject to any other remedy in respect of any breach of the contract committed by the contractor. (3) Residential building work that is uninsured work at the time the work is done ceases to be uninsured work for the purposes of this section if the required contract of insurance for the work is subsequently obtained. (4) If a person commenced residential building work before 30 July 1999 and entered into a contract of insurance that complies with this Act in relation to that work after the contract for the residential building work was entered into, that contract of insurance is, for the purposes of this section or any previous version of this section, taken to have been in force in relation to the residential building work done under the contract for the residential building work whether that work was done before or after the contract of insurance was entered into. Note : If a contract of insurance is in force in relation to part of the residential building work, this section applies only in relation to the part of the work that is not insured.
10. It is convenient to also note at this point s10(1) of the HB Act dealing with the licence situation: 1. A person who contracts to do any residential building work, or any specialist work, and who so contracts: 1. in contravention of section 4 (Unlicensed contracting), or 2. under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or 3. in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.
11. There can be no gainsaying that the appealed decision's findings concerning insurance under the HB Act which we have sought to summarise above were correct on the basis of what had been placed before the Tribunal during the hearing in the subject proceedings. Essentially, those findings were that the subject work was not insured. The certificate of insurance was not produced during the hearing. It is not sufficiently to the point that for the appellant now to produce a copy of a certificate of insurance and say that he had produced the certificate at an early directions hearing. Even in proceedings where the Tribunal is not bound by the rules of evidence and is to act without formality (s38 NCAT Act), a party should at least identify at the hearing all the evidentiary material on which the party relies and particularly when, as was the case here, the appellant had legal representation, this document should have been produced or referred to at some stage during the drawn-out hearing. In any event, the certificate of insurance, which has now been produced does not achieve sufficient compliance with the HB Act in that: 1. The contract was dated 15 April 2010 and the certificate was dated 26 August 2010 , by which time the appellant had substantially done such work as he attempted to do under the contract; 2. The contract price in the contract was $120,000.00 whereas the contract price specified in the certificate was $85,000.00; 3. Apart from the fact that the certificate was addressed to the respondent there is no evidence that the appellant provided the certificate to the respondent.
12. Thus, we see no error, whether of law or otherwise, in the findings in the appealed decision as to the existence of insurance of the subject work under the HB Act.
13. The reference to quantum meruit in the first ground of appeal requires additional consideration. Quantum meruit was canvassed particularly in the appealed decision thus: 72. The effect of s 94(1), implicit in the quote above, is to remove any right by a builder to a claim in quantum meruit (even if otherwise meritorious) if the necessary insurance is not in place. Section 94(1A) reinstates the right in circumstances where it is "just and equitable" to do so. 73. The circumstances are that the builder was aware of the requirement for insurance and requested the initial deposit from the owner in part to pay for the insurance. 74. To that end the builder requested payment for insurance before commencing work, but rather than purchasing the necessary insurance he simply retained the sum paid and dishonestly advised the owner and his daughter that the certificate would take about three weeks to be sent out when asked about its existence. 75. The purpose of the insurance, to provide protection for the owner in the event of any insolvency, death or disappearance of the builder means the failure to obtain it at all is significant. Ignorance or oversight is in a different category to here where the conduct was wilful and deliberate. I am not satisfied the builder in the circumstances to be deserving of recovery of a quantum meruit on the basis that it was just and equitable to be so entitled.
14. Findings by the Tribunal concerning insurance, which we have quoted above included conclusions that the appellant's behavior had been wilful, deliberate and dishonest. The Tribunal's conclusion, based on those findings that it was not just and equitable that the appellant be entitled to a quantum meruit recovery cannot be seen to be contestable whether on a question of law or otherwise. By reason of ss 92 and 94 of the HB Act the circumstances were such that the appellant had no entitlement to seek money in respect of such work as he had attempted.
15. Other factors are appropriate to be considered in relation to the order for recovery of the $12,000.00: 1. As we have noted above in the Subject Proceedings section of this decision, in the appealed decision the Tribunal member accepted expert evidence that such work as the appellant had attempted to do "was sub-standard, unnecessary and had to be removed and rebuilt to an acceptable standard"; effectively, that finding was that the work was useless and of no value to the respondent. 2. The $12,000.00 comprised the deposit of $6,000.00 and a first progress payment of $6,000.00, each of which was probably claimed by the appellant, and paid by the respondent, before the appellant took over any step, evidently commencing around 18 August 2010, towards retrieval of the appellant's defaults in respect of the licence and insurance aspects of the job; and 3. A dominant finding by the Tribunal member, as set out above in the Subject Proceedings section of this decision, was that "the conduct viewed objectively shows that neither party had any intention to perform the contract after 10 September 2010"; that is suggestive of a mutual abandonment of the contract.
16. When the whole situation concerning the $12,000.00 is thus considered, there is not in our opinion any viable complaint involving a question of law that requires the overriding of the order for its recovery by the respondent.
17. We turn to the application for leave to appeal. In relation to the first ground of appeal what we have set out above in pars 20 and following, includes a sufficient appraisal of factual issues. There is nothing in the evidence and the appealed decision's treatment of it, that, in our opinion, approaches any case requiring leave to appeal on any basis, let alone on the basis of any substantial miscarriage of justice, as we have sought to explain that concept above. As to the second ground of appeal, we note in particular the length of the hearing of the subject proceedings, the fact that the appellant had legal representation, the length and apparent comprehensiveness of the appealed decision and the resolution, adverse to the appellant, of the conflicts in the evidence on building construction issues between the respondent's expert, Mr Jacobs, and the appellant. Those factors emphasise to our minds that the second ground of appeal does not suggest that any case for leave to appeal has been made out and that the appellant is inappropriately seeking, essentially, another hearing on quantum issues. In our opinion there is no reason for such a re-hearing.

Costs

1. The decision on costs of 8 July 2014 ordered that the respondent (that is, the present appellant) is to pay 75% of the applicant's (that is, the present respondent's) costs as agreed or assessed on the basis set out in Division 11 Part 3.2 of the Legal Profession Act. The reasons in that decision dealt particularly with cl 7 of Schedule 1 of the NCAT Act dealing with "pending proceedings before existing tribunals transfer to NCAT", s 53 of the CTTT Act and cl 20 of the Consumer Trader and Tenancy Tribunal Regulation; also with principles as to the exercise of a discretion to award costs, especially by reference to ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd [2003] NSWSC 867. We detect nothing on the face of those reasons or in what has been to put to us on behalf of the appellant that suggests any error in the exercise of the discretion as to costs. In any event, as we have indicated above, we do not see that any situation exists that would warrant any reduction in the amount of $28,195.00 which had been awarded to the respondent; such a reduction was central to the appellant's argument on costs.
2. The respondent has sought an order that the appellant pay his costs of the appeal in the event that, as will be the case, the appeal fails. Section 60 of the NCAT Act each party to proceedings (including an appeal) is to pay the party's own costs but that the Tribunal may award costs only if it is satisfied that there are special circumstances warranting an award of costs. The section includes a non-exhaustive list of matters to which the Tribunal may have regard in determining whether there are special circumstances warranting an award of costs including "whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings" and "the relative strengths and claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law". Here, the appellant retained new solicitors after the appealed decision and they sought to articulate grievances which the appellant apparently felt with the decision and to prosecute a challenge to it on his behalf. The appellant objected to the appeal being decided "on the papers" (s 50 NCAT Act). The Tribunal sought to reduce inconvenience to the parties by hearing the appeal in Albury. During the hearing of the appeal we were informed that the monetary order in the appealed decision had been enforced by a Local Court judgment (s 78 NCAT Act) which the appellant has been paying off by instalments allowed by the Local Court. While the appeal has failed totally, we are not persuaded that the appellant inappropriately exercised his rights in relation to this appeal to an extent that there are special circumstances which would warrant an award of costs against him in respect of the appeal.

Stay

1. During the hearing of the appeal the appellant sought an order from the appeal panel staying the orders, including the costs order, in the appealed decision. We declined to do so on an interim basis and no stay is now appropriate.

Orders

1. The Appeal Panel accordingly makes the following orders: 1. Extend time for lodging Notice of Appeal to 25 June 2014. 2. Application for leave to appeal dismissed. 3. Appeal dismissed. 4. No award of costs in respect of the appeal.

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

Amendments 01 October 2015 - First names from both parties removed from case title. 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: 01 October 2015