Johnson v CTTT & Anor

Supreme Court of NSW|2004-09-13|Before: Mr P

Background 3 In late August 2002 the second defendant entered into a works agreement with the plaintiff to carry out concreting and other related work at her home at Macquarie Fields. The contract price was $11,550.00. The work was completed in early October 2002. The second defendant regarded the work as defective as a crack appeared in the driveway. On 29 November 2002 she commenced proceedings against the plaintiff in the CTTT. On 30 January 2003 the matter was listed for hearing and heard by Tribunal Member Simon Hennings. The Tribunal Member made an order that "Eddie John t/as Eddie's Budget Care Landscaping is to pay Barbara Pudo the sum of $10,350.00 on or before 20 February 2003."

Extension of time to appeal 4 The summons was filed 4 days out of time but no prejudice arises. It is my view that an extension of time to lodge this appeal should be granted. Both Johnson and Pudo are now in possession of an expert's report that establishes that Johnson has an arguable case on the concreting issue. The second defendant has also furnished an expert's report showing she has an arguable case on the concreting issue.

Tribunal proceedings - the notices and hearing 10 On 29 November 2002, Ms Pudo in her application form to the Tribunal claimed that the dispute was about cracks in the concrete and the stencilling on the driveway being out of alignment. She sought to have the job repaired or replaced. The complaints were further explained in her accompanying letter dated 29 November 2002. Mr Johnson received this letter with the application. 11 Mr Johnson was born in Chile on 25 September 1956. He migrated to Australia in 1989 and became an Australian citizen in 1991. His first language is Spanish. He can read English but cannot write it. Ms Manee Anekthanasub is Mr Johnson's partner and bookkeeper for his business. Ms Anekthanasub was born on 2 May 1964 in Thailand. She migrated to Australia on 5 December 1987 and became an Australian citizen on 19 April 1994. She can read and write English. However, Thai is her first language and she says that she often does not understand English when she is nervous or stressed or in unusual circumstances such as in Court proceedings. At home Ms Anekthanasub and Mr Johnson communicate in the English language. Ms Anekthanasub attended the Tribunal on 30 January 2003 and her version of events is almost the same as that of Mr Johnson. I observed Ms Anekthanasub carefully while she was being cross-examined and I formed the view that she demonstrated a very good understanding of the questions asked of her. 12 Mr Johnson and Ms Anekthanasub both deposed that on 18 December 2002 Mr Johnson received Ms Pudo's application from the CTTT together with a notice from the CTTT dated 16 December 2002 advising him that the application had been listed before the Tribunal for hearing on Thursday, 30 January 2003 at 9.30am at Campbelltown. The CTTT document was headed "Notice of Conciliation and Hearing" and it said "Do not bring any witness to the first hearing. However you should bring with you all relevant documents or materials to support your case". Ms Anekthanasub read this form and highlighted those words on the form and then had the following conversation with Mr Johnson. "Me: We do not have to bring witnesses to the first hearing. The Tribunal will tell us to bring witnesses to a later hearing. Eddie: That's okay. The Tribunal is arranging for an expert to go out and inspect the site. Everything will be okay." 13 When cross-examined Ms Anekthanasub said that she was sure that the above discussion took place between her and the plaintiff on that day. When it was drawn to her attention that Mr Johnson had deposed that the conversation with Mr Harrison took place later, namely on 15 January 2003 (Johnson aff para 11) she then explained that the conversation must have taken place after 15 January 2003. 14 Johnson then received a further letter from the CTTT (also dated 16 December 2002) which advised him that Robert Harrison from the CTTT had been appointed as a case co-ordinator with a view to attempting to resolve the dispute. Mr Johnson has had prior experience with the Tribunal's procedures. He deposed that in May 2002 another person made a claim against him and the CTTT organised for an independent building consultant to go and do an inspection at the site. As a result of that inspection he was paid the money outstanding to him, being $5.500.00. After speaking to Robert Harrison the plaintiff formed the view that the same procedure would be followed. Mr Johnson deposed that it was his understanding after talking with Robert Harrison, that Harrison had arranged for an independent building expert to inspect the site and that the expert's evidence would be available to the Tribunal. However during cross-examination Johnson admitted that prior to the matter being heard by the Tribunal Member he knew that no independent expert report had been obtained. 15 According to Johnson, on 15 January 2003 he received a phone call from his CTTT case co-ordinator, Robert Harrison. After 15 January 2004 Johnson had another phone conversation with Mr Harrison at which point Harrison told Johnson that he had not been able to contact Pudo but when he did so he would make arrangements for an independent building consultant to look at the site with both parties being present. So after that conversation took place, Johnson would have known if an independent expert's report was to be prepared, as he would have been required to attend the site. 16 On page 2 of Ms Pudo's application (which was attached to the Notice of Hearing) there is a box which states: "When you attend a hearing you should bring the original contract or agreement, including warranties and receipts where available, expert reports, any written authority if you seek to represent a party and other relevant documents, e.g. any correspondence between the parties. A copy of this application and any attachments will be sent to the other party with the Notice of Conciliation & Hearing." 17 Thus, as at 18 December 2002 Johnson had received two documents from the CTTT each of which said something different about what he should bring along to the 30 January 2003 hearing. Nevertheless both documents stipulated that Johnson should bring along all relevant documents or materials to support his case. The form also stipulated that an interpreter could be requested if Mr Johnson needed one. Johnson also admitted that he knew that he could request the Tribunal to provide an interpreter. He elected not to avail himself of an interpreter. The only area of conflict between the notices was whether Johnson should bring witnesses. 18 A further notice from the CTTT dated 21 January 2003 relevantly stated: "The Home Building Legislation Amendment Act 2001 sets out specific provisions for the resolution of disputes, the first step being an attempt to resolve the dispute informally through the Building Conciliation Service. Matters that cannot be resolved are then referred to a formal hearing. After preliminary assessment of this matter the Building Conciliation Service considered it unsuitable for resolution procedures. This matter has now been referred for hearing on 30/1/03." 19 A fair reading of this later document, in my view, makes it clear that a decision had been made that the matter was unsuitable for resolution procedures and so had been listed for hearing on 30 January 2003. Even if Johnson did not appreciate that it was to be a full hearing he would have been aware that he needed to bring the documents and materials he wished to rely upon to the Tribunal, which he did do.

The Tribunal hearing 20 On 30 January 2003, the Tribunal Member spoke to the parties and explained to them what was going to happen. There were five matters to be heard by him that day. Three of the parties went outside to try to resolve their disputes and the other two stayed in the hearing room. The other matter was dealt with first and resulted in an adjournment by consent. After that, the plaintiff and the second defendant's version of what occurred at the hearing diverge. The tape of the proceedings is unavailable. 21 When being cross-examined during this appeal Mr Johnson had noticeable difficulty understanding the questions asked of him and in answering them in English. This Court requested an interpreter to be present to ensure that the questions would be asked of Mr Johnson in a consistent manner fair to both parties. Mr Johnson's evidence was then given with the benefit of an interpreter. Mr Johnson says that he has a good understanding of the written English language and I accept this to be so. 22 Ms Pudo deposed that at the outset of the Tribunal hearing the Member stated: "Mr Hennings: Do you wish to try and resolve the matter. I said: No. Mr Johnson said: No. Member: If your matter is heard today only one person would be happy and one unhappy. Do you wish to have more time to obtain further information, documentation or witnesses? Do you wish to obtain legal advice or adjournment to have any other witnesses present to give evidence or obtain legal advice? Mr Johnson said: No. I said: No. I would like to finish it today. Member: You understand that the decision will be made today. It would be binding both parties. Do you understand that the woman has a crack in the concrete that has only been laid down for three months? If this is correct you have a problem. Do you wish to continue with this matter? Mr Johnson said: Yes." 23 In his reasons for decision, the Tribunal Member records: "The matter was then listed for hearing at the CTTT on 30th January 2003. On that day an explanation was given to both parties of the process, and an opportunity was given to both parties to attempt further conciliation at the venue. Both parties had an opportunity to inspect the other party's evidence. Once again that process did not resolve or settle the matter. Following that opportunity both parties were asked whether they sought an adjournment to further prepare for the hearing, obtain evidence (expert or otherwise), seek the attendance of any witnesses, or seek any legal advice. Both parties stated they understood all of the issues and were happy for the hearing to proceed and sought the matter be finalised on that day." 24 Although the Tribunal member records in his reasons that both parties had the opportunity to inspect the other party's evidence, the fact is that the parties did not do so. Johnson and Pudo agree that they were not asked to inspect each other's documents at the outset. I accept that the Tribunal Member referred merely to the opportunity to inspect the other party's evidence but in the next line then says that the process did not resolve the matter. The parties did not inspect the documents. During the hearing, one party was shown the other party's evidence as it arose (with the exception of the invoices, which I will discuss later in this judgment). 25 In cross-examination Ms Pudo agreed that Mr Johnson did say to the Tribunal Member that he wanted to go home and get the invoices relating to the purchase of the crack inducer and Ms Anekthanasub said, "I'll go and get them". Mr Johnson was given an opportunity to inspect the other party's evidence with the exception of the quotes. The Tribunal Member explained to Mr Johnson that the quotes ranged between $7,000.00-$15,000.00 but he did not actually show him the quotes. At the hearing before me, Mr Johnson stated that the invoice was not available as it was with his accountant. Yet Ms Anekthanasub said the invoice was at home and she asked the Tribunal Member permission to go home and get it [para 8]. The Tribunal Member did not adjourn the proceedings to allow Ms Anekthanasub to obtain the invoice. 26 The Tribunal Member recorded what Ms Pudo said about her case and that she produced evidence namely nine photographs of the area (Ex 1), a video recording of the area (Ex 2) and a rough sketch map of the site indicating up to 15 locations of cracking (Ex 3). The Tribunal Member recorded what Mr Johnson said about his case and the evidence of a document from Connolly Key Joints Pty Ltd (Ex 4), a sample of a Connolly Key Joint (Ex 5) and four photographs of the worksite taken during construction (Ex 6). A reading of the Tribunal Member's summation of Mr Johnson's version of events indicates that Mr Johnson was able to put forward his case in a manner that was understood by the Tribunal Member. 27 Returning to the Tribunal hearing, Ms Pudo when she was called to give evidence said words to the effect: "I am not happy with the way the concrete was poured. I have some photographs and a video. Can I hand it to you? Member: Has Mr Johnson seen the photographs? If not, show it to him." 28 Ms Pudo then showed the photographs and the video taken of the building work to Mr Johnson. "Mr Johnson said: These photographs have been dummied. I don't believe the photos. I said: I have not dummied the photos. Member: Show me the photos." 29 Johnson's version is that the Tribunal Member showed the plaintiff the photos and the video and asked him some questions in words to the following effect: "Member: Have a look at these photos and we will show the video." 30 After looking at the video Johnson recounts that at this point he said words to the effect: "Me: 'We need to get the expert to look at the site. I don't believe what's in this video or the photos'. Member: 'Its too late.' Me: The CTTT was organising for an independent person to look at the site but that hasn't happened.' Member: ' it is too late, today is the final day' Me: 'I didn't think it would be final. We need to have expert evidence in relation to it' Member: 'No it will be final. I am not your consultant or adviser.' Me: She says that I didn't do the concrete in the right way. But I did, I used a crack inducer. Member: Have you got an invoice for the crack inducer. Me: No, it's at home. I can go and get it. Member: It's too late. Today is the final day." 31 Towards the conclusion of the hearing Ms Pudo deposes that Mr Johnson said: "Mr Johnson: I did nothing wrong I have never been to the CTTT before, I want an engineers report. I said: What about the costs of removal. Member: You do not have a quote and you will have to pursue it later. Mr Johnson: I want to get an engineer's report. Member: The matter has been heard and a decision has been reached. No, it's too late the matter is finalised, you were given the opportunity at the beginning of the hearing to adjourn the matter to obtain further evidence and you said you wanted it heard to day. You can appeal if you want my decision to be overturned." 32 Thus, on Ms Pudo's version of events, Mr Johnson having elected to proceed with the hearing did not mention that he wanted to obtain an engineer's report until the Tribunal Member had heard all the evidence and was about to give his reasons for his decision.

Procedural fairness 33 In relation to natural justice, Professor S A de Smith, Judicial Review of Administrative Act, 2nd ed., pp 180-181 has stated: "Natural justice generally required that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed, so that they may be in a position: (a) to make representations on their own behalf; or (b) to appear at a hearing or inquiry (if one is to be held); and (c) effectively to prepare their own case and to answer the case (if any) they have to meet." 34 In Kioa v West (1985) 159 CLR 550 the High Court held that the duty to accord natural justice is a duty to act fairly. In the normal course, a party to judicial proceedings (as are those in a tribunal) could expect to be apprised of the nature of the case sought to be made against it, and of the date and time fixed for hearing such as to give it a reasonable opportunity to meet that case and to advance its own. These statements are similar to those expressed by Professor de Smith and referred to earlier. Brennan J (as he then was) at 628 stated: "A person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters adverse to his interest which the repository of the power proposes to take into account in deciding upon its exercise." 35 In relation to procedural fairness, Mason J stated in Kioa that the law had now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. Procedural fairness is a notion of a flexible obligation to adopt fair procedures, which are appropriate and adapted to the circumstances of the particular case (pp 454 and 455). 36 In Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951 Grove J stated at para 25: "There is ample authority that procedural fairness is denied if a decision maker fails to adjourn proceedings where such a failure has the effect of depriving a person of adequate opportunity to prepare or present a case: Sullivan v Department of Transport (1978) 20 ALR 323; Opitz v Repatriation Commission (1991) 29 FCR 50; Humphrey v Wills (1989) VR 439." 37 However, whether there is a denial of procedural fairness depends on the circumstances in each case. 38 The Tribunal Member's reasons largely accord with the version of events given by Ms Pudo with the exception of the inspection of each other's documents at the outset of the hearing. Mr Johnson disagreed with this version of events. It is my view that Mr Johnson made a conscious decision to have his matter heard on 30 January 2003. Before the hearing commenced he knew that there was no independent expert evidence available. He had brought along a crack inducer, photographs and documents that provide information about crack inducers (Exs 4-6). He had understood that he had to take relevant documents and materials to the hearing to support his case. Mr Johnson had also made a prior decision not to avail himself of the services of an interpreter, which he knew he could request to be present for the hearing. 39 If Mr Johnson was under a misunderstanding that the matter was to proceed to a full hearing, it was surprising that when the Tribunal Member asked whether an adjournment was sought to obtain evidence (expert or otherwise), seek attendance of witnesses or legal advice, Mr Johnson did not say he did not understand that this was the actual hearing and that he still needed to obtain an expert report. From the Tribunal Member's summation of Mr Johnson's case, Mr Johnson was able to make his version of events and his arguments understood, although it is difficult to reconcile Mr Johnson's understanding of English (as reported by the Tribunal Member and Ms Pudo) and his understanding of English in this Court. With the exception of the invoices, each party was shown the other's evidence before use was made of it in the parties respective cases. Neither party relied on an expert's report. In the end, the Tribunal Member did not assess damages on the basis of the invoices. Nor when the Tribunal Member explained the invoices to him did Mr Johnson say anything. 40 In my view, in these circumstances there has not been a denial of procedural fairness.

Alleged error of law Connelly Key Joints or crack inducer - workmanlike manner 41 The plaintiff submitted that the Tribunal erred in law in finding that Mr Johnson had not carried out his work in a proper and workmanlike manner because of not using correctly, failing to use, or using when inappropriate Connolly Key Joints (p 4). The plaintiff submitted that the Tribunal entirely misunderstood or misapprehended the nature of the evidence before it. The second defendant submitted that the Tribunal Member referred to a "crack inducer" (made by Connolly Key Joint Pty Ltd) as a "Connolly Key Joint". The second defendant further submitted that even if the Tribunal Member mistook a crack inducer for a Connolly Key Joint, this is a finding of fact and cannot be disturbed on appeal.

42 According to the manufacturers of the Connolly key joint, "the location of contraction joints is an important part of overall slab performance and should be considered early in the design stage. The use of Connolly key joint gives designers greater control over the placement of contraction joints". As noted in Annexure 'B' to the further affidavit of Mr Johnson sworn 6 May 2004 at p.5: "The installation of Connolly key joint prior to concrete placement is one of the best methods of providing a contraction joint. Unlike tooled joints or saw cutting which can be ineffective if not done correctly or in the narrow timeframe required, Connolly key joint makes a definite break in the slab and virtually eliminates many of the problems associated with concrete shrinkage. Generally speaking, if key joints are installed at appropriate spacings and the joints are sealed or permanent capping applied expansion joints can be minimised and spaced further apart. This is because concrete will contract or shrink more than it will expand due to thermal variations, unless the temperature variations are extreme". 43 Before it, the Tribunal had in evidence an example of the crack inducer used by the plaintiff. The Tribunal Member made a finding that (whatever method was used) the work was not of a proper and workmanlike manner. The Tribunal Member stated: "Fifteen cracks were visible in different locations throughout the property. The video evidence clearly displayed a number of those cracks were 3-5 mm in width. They were also not straight cracks, as would be expected if above expansions joints." 44 Additionally the Tribunal Member had regard to photographs of the defects in the work, the videotape and the evidence of the defendant that indicated that the finding made by the Tribunal Member was clearly open to him.

Stencilling 45 The plaintiff further submitted that the Tribunal erred in finding that the direction of his laying of the stencil pattern was not done in a good and workmanlike manner as there was no evidence to support that finding and that fact did not exist. At page 4 of his reasons for decision the Tribunal Member found that the stencilling pattern on the side pathway was not parallel to the side of the house and fence. Many instances were shown where the stencilling was not completed or overlapped on other patterns. There was also evidence of mottling of the pavement colour, very poor finishing and a lack of expansion joints around the pool, storm water cover and drain holes. The Tribunal Member found that it was extremely relevant that all the identified problems had occurred within only three months from the time of the completion of the work.

Alleged error in method of calculation of damages 46 The plaintiff submitted that the Tribunal Member erred in ordering Mr Johnson to pay the second defendant the sum of $10,350.00 because firstly, there was no evidence to support the finding that rectification was not appropriate; secondly, there was no evidence to support the finding that Ms Pudo had received no value; and thirdly, the Tribunal failed to apply the correct legal principles appropriate to ascertaining the damages recoverable by Mr Johnson upon the finding of any alleged specific breach or breaches of the contract. 47 The plaintiff submitted that the quotes tendered by the second defendant at the Tribunal hearing, do not purport to provide rectification or remedial services for, or in respect of any particular defect in work but rather they are quotes to redo the entire job. The plaintiff further submitted that there was no evidence to support a finding that Ms Pudo had received no value and that the works performed by the plaintiff could not be used for their intended purpose. The plaintiff submitted that the Tribunal Member failed to apply the correct legal principles applicable to cases of this kind - see Bellgrove v Eldridge (1954) 90 CLR 613. The second defendant submitted that the Tribunal Member did not order the plaintiff to pay the defendant damages rather the Tribunal Member ordered the plaintiff to refund to the defendant the amount she paid for the concreting work. 48 Section 48O of the Home Building Act 1989 (NSW) provides: "48O Powers of Tribunal

(1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate: (a) an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person,

(b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings,

(c) an order that a party to the proceedings: (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or (ii) do or perform, or refrain from doing or performing, any specified act, matter or thing. (2) The Tribunal may make an order of a kind referred to in subsection (1) (a) or (b) even if the applicant asked for an order of a kind referred to in subsection (1) (c). …" 49 Under s 48O the Tribunal Member has a discretion as to what remedy he considers appropriate, he duly recorded: "Following that decision the Tribunal must turn its mind to whether rectification is possible, or alternatively in regard to compensation what, if any value has the applicant received from the work or finally whether a refund is appropriate. It is evident that rectification requires substantial work with large costs. No other company will guarantee that resurfacing will fix the problem of the potential underlying construction of the concrete and prevent any further cracking. Given the breakdown of the relationship and the animosity that exists between the parties, it is not an idea that the Tribunal could entertain, to allow the respondent to attend the property to carry out any rectification. It is also clear that any rectification work to the surface will not resolve the cracking issues. The Tribunal finds that rectification is not appropriate in this matter, the applicant would not be placed in the position that she would have expected to have been in, if the respondent had performed under the contract." 50 The Tribunal Member also made a finding of fact that Ms Pudo received no value from the work. 51 In Bellgrove v Eldridge, Dixon CJ, Webb J and Taylor J turned their minds to the question of the measure of damages in respect of a deficient building project. They held [at 617] that: "In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she sustained by the failure of the appellant to perform his obligations to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract."

52 They continued at 618: "Indeed - and such was held to be the position in present case - there may well be cases where the only practicable method of producing conformity with plans and specifications is by demolishing the whole of the building and erecting another in its place. In none of these cases is anything more done than that work which is required to achieve conformity… The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt." 53 In the present case, the Tribunal Member made a finding of fact that Ms Pudo received no value from the work. Thus, it was open to him to order Mr Johnson to refund the moneys paid. There is no error of law. 54 The appeal is dismissed. The orders of Tribunal Member dated 30 January 2003 are affirmed. The amended summons is dismissed. 55 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed.

(2) The orders of the Tribunal Member dated 30 January 2003 are affirmed.

(4) The plaintiff is to pay the defendant's costs as agreed or assessed. **********

Last Modified: 10/21/2004 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.

Tenancy Act 2001(NSW)

CITATION : Johnson v CTTT & Anor [2004] NSWSC 974 HEARING DATE(S) : 13 September 2004 JUDGMENT DATE : 20 October 2004 JURISDICTION: Common Law Division - Administrative Law List JUDGMENT OF : Master Harrison DECISION : (1) The appeal is dismissed; (2) The orders of the Tribunal Member dated 30 January 2003 are affirmed; (3) The amended summons is dismissed; (4) The plaintiff is to pay the defendant's costs as agreed or assessed.

CATCHWORDS : Appeal decision of CTTT - procedural fairness - adjournment - error of law Consumer, Trader & Tenancy Act 2001 (NSW) - s 67 LEGISLATION CITED : Home Building Act 1989 (NSW) - s48O Judicial Review of Administrative Act, 2nd ed., 180-181 Bellgrove v Eldridge (1954) 90 CLR 613 CASES CITED : Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951 Kioa v West (1985) 159 CLR 550 Eddie Johnson t/as Eddie's Budget Care Landscaping (Plaintiff)

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