Homeark Constructions v Hillside Excavations

Grounds of appeal 23The appellant sets out five "grounds" of appeal (Notice of Appeal item 11 B): (i)The Tribunal failed to take account that the works are not completed in that certification for Sydney Water has not been provided; (ii)The appellant has in fact paid $21,850.00 not $18,000.00 as found by the Tribunal in the original decision. Therefore any order for payment should be not more than $16,210.00; (iii)The works should only have cost approximately $15,000 having regard to the expert evidence provided; (iv)The Tribunal failed to take account of the evidence of Mr Huang "regarding (the respondent) initiating claims against Reece based on an overinflated quote"; and (v)Additional statement from Mr Jason Huang dated 22 July 2014 claiming defective works. 24In addition, in seeking leave to appeal, the appellant says that: (i)it has had "no opportunity to provide evidence" (see item 12 B ii of Notice of Appeal); (ii)the expert evidence upon which it wishes to rely "was determinative and would corroborate affidavit of Jason Huang regarding overcharging from the respondent" (see item 12 B iii of Notice of Appeal); and (iii)there is additional evidence "discovered in the last weeks regarding defective workmanship carried out" (see item 12 B iii of Notice of Appeal). In this regard a further statement of Mr Huang dated 22 July 2014 filed in the appeal is relied upon. 25Despite the application to set aside filed in May 2013 stating that "evidence we seek to rely upon has now been finalised and is now attached to this application", the appellant submitted in the appeal a further statement of Mr Huang dated 22 July 2014, which attaches a written quotation for the works (excluding any design work) provided by the respondent to the appellant dated 20 September 2012. This quotation is signed by Mr Huang on behalf of the appellant underneath the printed words "I have read these terms and conditions on rear and understand it, I accept this quote."

Conduct of the appeal 26As indicated above, in its Notice of Appeal the appellant only sought to appeal the set-aside decision, not the original decision. 27At the commencement of the hearing of the appeal, the appellant sought to make submissions about why the original decision was incorrect. The Appeal Panel noted that the appellant also needed to address why the Tribunal was in error in respect of the set-aside decision because the Notice of Appeal was limited to challenging the set-aside decision. In doing so, the Appeal Panel noted that any appeal against the original decision was out of time and would require leave if this matter was to be pursued. 28The Appeal Panel adjourned the hearing of the appeal for a short period of time to enable the appellant to consider whether it wish to make any application. Ehen the hearing of the appeal resumed the appellant confirmed that the appeal was in relation to the set-aside decision only. The hearing of the appeal continued on this basis. 29During the course of the hearing of the appeal, the appellant conceded that no explanation had been provided in the set-aside application, or as part of this appeal (other than a limited explanation in respect of expert evidence and the site inspection), as to why the orders of the Tribunal had not been complied with or why evidence of the appellant was not provided prior to the hearing on 6 May 2014. 30Also during the course of the hearing, after submissions had been completed, the respondent conceded that the amounts claimed to have been paid by the appellant totalling $21,850.00 had in fact been paid. Therefore, the amount of 18,000.00 allowed for payments made by the appellant in the original decision was incorrect 31One final matter should be recorded in relation to the appeal. That concerns an apparent agreement between the parties that consent orders be made to allow the appeal and set-aside the original decision for the purpose of a rehearing. The parties had separately written to the Appeal Panel on this topic. The Appeal Panel constituted by Deputy President Hennessey M declined to make orders by consent noting that "there had been an application to set aside the orders below which had been refused" and that "the appeal needs to be considered by the Appeal Panel on 14 October 2014". 32When the matter came before the Appeal Panel for hearing, the Appeal Panel was informed by the respondent that it no longer consented to the orders setting aside the original decision and remitting the matter for rehearing. On this basis the Appeal Panel determine to hear the appeal.

Decision 33This appeal is limited to the issue of whether or not the Tribunal was in error in failing to grant the application to set aside the original decision. 34The appeal relates to the circumstances in which a decision of the Tribunal may be set aside pursuant to Regulation 9 and the exercise by the Tribunal of a discretion to set aside orders made at a hearing at which the appellant failed to appear. 35Regulation 9 is in the following terms: 9 Additional power to set aside or very decision determining proceedings (1) In addition to any power that is expressly conferred on the Tribunal by the Act or enabling legislation to set aside or vary its decision, the Tribunal may order that a decision it has made that determines proceedings be set aside or vary in either of the following circumstances: (a) if all the parties to the proceedings have consented to the making of the order to set aside or vary the decision, (b) if the decision was made in the absence of a party and the Tribunal is satisfied that the parties absent has resulted in that party's case not being adequately put to the Tribunal. (2) The Tribunal may make an order under this clause of its own motion or on the application of a party." 36Absent consent, the party seeking to set aside a decision under Regulation 9 must demonstrate that it is their absence which has resulted in their case not being adequately put rather than some other cause. Regulation 9 does not permit the Tribunal to set aside a decision for an unexplained default unrelated to the party's absence from a hearing. 37Where a party's absence has resulted in that party's case not being adequately put, the Tribunal has a discretion whether or not to set aside the decision. As pointed out in CMT [2014] NSWCATGD 11 at [65] and following, this will require consideration of: (a)why the party was absent from the hearing; and (b)whether the party's presence may have resulted in a different outcome. 38 Also relevant to the exercise of this discretion is: (a)the operation of the guiding principle provided in section 36(1) of the Act, namely the obligation of the Tribunal to facilitate the just, quick and cheap resolution of the real issues in the proceedings; (b)the obligation of the Tribunal in interpreting the Act to give effect to the guiding principle is provided in section 36 (2) of the Act; and (c)the duty of each of the parties and their representatives "to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal": see section 36 (3) of the Act); (d)A party is obliged to comply with directions of the Tribunal. 39The Tribunal is obliged to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings: see section 38 (5) (c) of the Act. However, where a party is absent from a hearing and: (a) the obligations of the Tribunal under the Act have been met; (b)the parties have been directed to file and serve their evidence prior to the hearing and have failed to do so; (c)a hearing has been conducted after appropriate notice to the parties; and (d)it is the failure to file and serve evidence which is the cause of the case not being put before the Tribunal, a party seeking to be excused from their failure to participate on a timely basis in the resolution process, including in complying with the Tribunal's directions, is required to provide an adequate explanation: see eg Aon Risk Management Services Australia Limited v Australian National University (2009) 235 CLR 175 at [103]. 40Where a party fails to comply with directions and provide to the Tribunal evidence at a time required before the hearing, the mere fact of absence from the hearing will not entitle the defaulting party to have orders set aside under Regulation 9. Without an adequate explanation and consistent with the Tribunal's obligations under section 36 of the Act, the proper administration of justice would ordinarily mean that such an application to set aside a decision should be dismissed. This is because: (i)The absence of the party is not the cause of that party's case not being adequately put; and (ii)To allow a defaulting party to avoid the consequences of its default and to order a rehearing would work an injustice or disadvantage to the other party and prevent the Tribunal from bringing proceedings to a conclusion. 41Inter alia, this view is consistent with the provisions of Schedule 4 clause 10 of the Act which enables the Tribunal to make orders against a party causing disadvantage, including because a party fails to comply with directions of the Tribunal. In the case of a respondent to an original application (the appellant in this case) clause 10 enables the Tribunal to "determine the proceedings (or part of the proceedings) in favour of the applicant and make any appropriate orders". 42It is in this context that the evidence and conduct of the appellant is to be evaluated. 43The appellant does not appear to assert that the error made by the Tribunal in refusing the application to set aside constituted an error of law. Rather, the appellant asserts the Tribunal failed to take account of various factual matters in determining the set-aside application. While an assertion is made in relation to the application for leave to appeal that the appellant had "no opportunity to provide evidence" (Notice of Appeal item 12 B ii), the Appeal Panel has treated this statement as a submission that, having regard to the evidence upon which the appellant now seeks to rely, leave to appeal should be granted. 44Therefore, leave is required to appeal. The decision of Urban v Collins [2014] NSWCATAP 17 sets out the principles to be applied when considering an application for leave. 45The application to set-aside was refused by the Tribunal because: (a)the Tribunal was not satisfied that the absence of the appellant at the hearing resulted in the appellant's case not being adequately put, (b)the appellant had failed to comply with procedural directions of the Tribunal for the filing and service of its evidence; and (c)the appellant had failed to explain why it did not attend the hearing on 6 May 2014. 46At all times the appellant was represented by a legal practitioner and no suggestion was made that the appellant was unaware or unable to comply with its obligations under the Act and/or to comply with the Tribunal's directions. 47In the present case the appellant relies on the following facts in support of its appeal: (a)the solicitor had been ill from 4 May 2014 until 7 May 2014 and was unable to attend the hearing; (b)expert evidence was relevant to corroborate the position of the appellant that the value of the works performed by the respondent was approximately $15,000; (c)the expert evidence was not available until the report was signed on 7 May 2014, after the hearing had concluded; (d)evidence is now available that the works completed by the respondent were not in accordance with the agreement; and (e)the amount paid to the respondent was in fact $21,850.00. Lawyer's illness 48In relation to the lawyer's illness, the medical certificate provided is not adequate evidence of the matters asserted: see AHB v Trustees and Guardians [2014] NSWCA 40 at [4]- [5]. Further, even if accepted as appropriate evidence of an illness preventing the solicitor from attending the hearing on 6 May 2014, there is no explanation as to why: (a)another lawyer or a representative of the appellant could not have attended the hearing on 6 May 2014; or (b)the appellant could not and/ or did not apply for an adjournment on the basis of ill health at or prior to the hearing. 49No evidence is provided of any attempt to communicate the fact of ill health to the Tribunal at or before the hearing on 6 May 2014 or, for that matter, to take any steps to inform the Tribunal or the respondent that the appellant was unable to appear on 6 May 2014. 50There is no suggestion that the appellant did not have notice of the hearing. The Tribunal made clear in its orders of 2 May 2014 that any application in connection with extending time was a matter to be dealt with by the Tribunal at the hearing on 6 May 2014 and that directions should otherwise be complied with as soon as possible.

Non-compliance with directions and service of evidence 51In relation to the evidence proposed to be adduced from the expert, Mr Bournelis, the failure to serve this report on a timely basis has not been adequately explained. As recorded in paragraph 1.1 of the report, instructions were provided to the expert on 27 March 2014. No evidence is provided of the date upon which the expert first sought access to the site, what were the communications with the current landowner of the site and when did they occur. Nor is any other information provided to the Appeal Panel which would explain why the Tribunal's directions in relation to the filing and service of evidence had not been complied with. 52Further, the Tribunal's direction made 2 May 2014 records that the appellant was seeking an extension of time until 2 May 2014 to provide evidence, that is the appellant indicated the evidence would be provided on or before 2 May 2014. This did not occur and as with the non-compliance with earlier Tribunal directions, the circumstances of delay and non-compliance remain unexplained. 53The substantial dispute in the respondent's claim was the price payable under the contract and the amount the appellant had paid. 54Evidence of the expert is not relevant, let alone determinative, of the issue of the terms of the contract between the parties in the present case. The relevant issue was whether or not the quotation dated 20 September 2012 had been accepted by the appellant. The fact that the reasonable cost of the works might be less than the amount in the quotation based on an opinion from an expert provided well after the works have been completed would not have assisted the Tribunal in determining what was the contractual arrangement between the parties. The delay in obtaining such expert evidence does not explain why relevant evidence from the appellant (Mr Huang) in relation to the question of the contractual negotiations and formation of the contract could not have been provided in a timely manner in accordance with the Tribunal's directions. 55As, to Mr Huang's evidence, the statement signed 7 May 2014 suggests that it was available and could have been served (at the latest) on about 1 May 2014, being the date recorded on the first page of the statement. This date was three days before the lawyer became ill and the day before the date sought for a second extension of time to serve evidence, namely 2 May 2014. 56In relation to the evidence of Mr Huang concerning the formation of the contract (found in the statement signed 7 May 2014 and the one signed 22 July 2014), he accepts that his signature appears on the quotation found by the Tribunal to constitute the terms of the contract (at a price of $31,350.00) but says that the quotation was signed for an ulterior purpose and did not reflect the price agreed for the works. In this regard he asserts that his purpose in signing the document was to assist the respondent make a claim against an entity called Reece. Reece had apparently undertaken various works in a defective manner on behalf of the appellant, which works the respondent was asked to correct. Inferentially the appellant appears to contend this quotation was prepared for an improper purpose and signed by Mr Huang to support this purpose. 57Whether or not this is correct, the Appeal Panel notes that no evidence has been provided to suggest this issue was ever raised with the Tribunal prior to 6 May 2014 and no explanation has been provided as to why the evidence could not have been served and/or was not served in accordance with earlier directions of the Tribunal. 58In relation to the alleged defective and incomplete work, again no explanation is provided as to why evidence of these matters could not have been provided at an earlier time. For example, whether or not the certificate under section 73 has been provided does not require expert evidence. In relation to the missing bracket for the sewer pipe (referred to in paragraph 8.4 of the expert report dated 7 May 2014) no explanation is provided as to why this defect could not have been the subject of earlier evidence, at least by way of identification of a defect. In relation to the pipework said to be incomplete (see paragraph 1 (d) of the further statement dated 22 July 2014), again no explanation is provided as to why this evidence could not have been served at an earlier time. In any event the issue of the alleged incomplete work was not dealt with by the expert. 59Further, there is no suggestion by either party that the appellant could not now file a separate application in respect of any claim for defective or incomplete work. 60Finally, insofar as the appellant might now wish to rely on this evidence to challenge the original decision, such a challenge might be made by way of an appeal against the original decision, perhaps on the basis that the appellant could establish the decision was not "fair and equitable" and that leave to appeal should be granted because there was a substantial miscarriage of justice: see Schedule 4 clause 12 and Urban v Collins (supra) as to the circumstances of when leave should be granted . Whether or not such a challenge could be made, it is sufficient to record that: (a)the appellant did not seek to appeal the original decision; and (b)the failure to appeal the original decision does not mean that the refusal to set aside the original decision was in error. 61The last evidentiary matter advanced by the appellant concerned a claim that the appellant had in fact paid the respondent $21,850.00. 62Again, the appellant failed to explain why this evidence could not have been served at an earlier time. However, at the conclusion of the hearing of the appeal the Appeal Panel asked the respondent whether the sum of $21,850.00 had in fact been paid. The respondent, by its solicitor, conceded to the Appeal Panel that the amount of $21,850 had in fact been paid and that the conclusion of the Tribunal in the original decision allowing for payments of $18,000.00 only was incorrect. Conclusion 63Having regard to the above, the Appeal Panel is satisfied that: (1) There was no error in the Tribunal concluding in the set-aside decision that the appellant had failed to comply with the Tribunal's directions nor was there an error in concluding the appellant had failed to adequately explain the delay in providing its evidence; (2)The cause of the appellant's evidence not being available to the Tribunal on the day fixed for hearing arose from the failure of the appellant to comply with the Tribunal's directions for the filing and service of evidence, not by reason of the solicitor being ill or the absence of the appellant from the hearing; and. (3)The appellant has not adequately explained why it could not have appeared by an alternative representative, for example Mr Huang. 64These findings mean that, subject to one matter, the application for leave to appeal should be refused and the appeal dismissed. 65It is agreed between the parties that the appellant in fact paid $21,850.00 not $18,000.00 as found by the Tribunal in the original decision. There was no such agreement when the Tribunal determined the set-aside application. While it is clear that the appellant asserted this fact in support of the set-aside application, the respondent did not, until the appeal, concede the payment. 66By reason of the concession, the Appeal Panel is satisfied the appellant paid to the respondent an amount of $3850 more than was allowed by the Tribunal in the original decision in discharge of the appellant's obligations under the contract with the respondent. That is, against a contract price of $38,060.00 (being $6710.00 plus $31,350.00 as found by the Tribunal in the original decision) the appellant paid a total of $21,850, leaving a balance of $16,210 unpaid. 67The Appeal Panel is satisfied that if the concession had been made to the Tribunal when considering the set-aside application, the Tribunal would have made an appropriate order so as to correct this error either on the application of a party or of its own motion. Further, a failure to do so now would constitute a substantial miscarriage of justice. 68Therefore, consistent with the obligations of the Tribunal under section 36 of the Act, it is appropriate that the Appeal Panel grant leave to the appellant to appeal the set-aside decision in relation to the issue of whether the original decision was correct in determining the appellant had only paid $18,000 to the respondent pursuant to the contract as found in the original decision. Further, because this matter is now an agreed fact, there is no need to remit this issue to the Tribunal for rehearing. Rather, the Appeal Panel should exercise in this appeal the power available to the Tribunal pursuant to Regulation 9 and vary the original decision so that the sum in order 1 made 6 May 2014 is amended to $16,210.00. Orders 69The Appeal Panel makes the following orders: (1)The appellant has leave to appeal the decision of the Tribunal made 27 June 2014 in relation to whether or not the order made 6 May 2014 should be set aside or varied by reason of the fact that the Tribunal, in its decision of 6 May 2014, incorrectly allowed an amount of $18,000.00 rather than $21,850.00 as the total amount paid by the appellant pursuant to its contract with the respondent as found by the Tribunal. (2)The appeal in relation to the issue identified in order 1 is allowed; (3)Order 1 of the Tribunal made 6 May 2014 is varied by substituting the amount of $16,210.00 for the amount of $20,060.00. (4)Save as provided above, the appeal is dismissed. 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

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: 06 November 2014