Koma v CTTT & Anor

CATCHWORDS : Appeal decision of CTTT - amend claim after 3 days of hearing to raise new issue

LEGISLATION CITED : Consumer Trader and Tenancy Act 2001 (NSW) ss 28, 32, 35, 65 & 67

Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456 Italiano v Carbone & Ors [2005] NSWCA 177 CASES CITED : Kalokerinos & Anor v HIA Insurance Services P/L & Anor [21004] NSWCA 312 Ketteman v Hansel Properties [1987] AC 189 State of Queensland v J L Holdings (1997) 189 CLR

Jalal Koma - Plaintiff PARTIES : Consumer Trader & Tenancy Tribunal - First Defendant Brunet Development and Construction Pty Ltd - Second Defendant

Hopper & Co Lawyers - Plaintiff SOLICITORS : Submitting Appearance - First Defendant Mr P J Adams, Adams & Partners Lawyers - Second Defendant

LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW

LOWER COURT JUDICIAL OFFICER : Senior Tribunal Member Durie

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30104/2005 - JALAL KOMA v CONSUMER TRADER & TENANCY TRIBUNAL & ANOR

JUDGMENT (Appeal decision of CTTT - amend claim after 3 days of hearing to raise new issue) 1 HER HONOUR: By summons filed 25 November 2005 the plaintiff seeks firstly, a declaration that the orders by the Consumer Trader and Tenancy Tribunal (CTTT) on 27 April 2005 and 28 October 2005 in proceedings HB03/40937 be set aside; secondly, an order in the nature of certiorari setting aside the orders made on 27 April 2005 and 28 October 2005; thirdly, an order quashing the decision and orders by the CTTT in HB03/40937; and fourthly, an order that leave be granted to extend the time for filing of the summons in particular to order made on 27 April 2005. 2 The plaintiff is Jalal Koma (Mr Koma). The first defendant is the CTTT who has filed a submitting appearance. The second defendant is Brunet Development and Construction Pty Ltd (Brunet). Mr Koma relied his affidavit dated 14 August 2006 and the affidavit of Saba El-Hanania dated 20 February 2006. Brunet relied on the affidavit of Ghazwan Asmaro dated 27 March 2006 and the affidavit of Peter John Adams dated 20 October 2006. For convenience I shall refer to the parties by name.

The relevant statutory provisions 3 Section 65(1) of the Consumer Trader and Tenancy Tribunal Act 2001 (NSW) (the Act) provides: "(1) Except as provided by this section, a court has no jurisdiction to grant relief or a remedy by way of: (a) a judgment or order in the nature of prohibition, mandamus, certiorari or other relief, or

(c) an injunction, in respect of any matter that has been heard and determined (or is to be heard or determined) by the Tribunal in accordance with this Act or in respect of any ruling, order or other proceeding relating to such a matter." 4 Section 65(3) however provides: "(3) A court is not prevented from granting relief or a remedy of a kind referred to in subsection (1) in relation to a matter in respect of which the Tribunal has made an order if the ground on which the relief or remedy is sought is that:

(a) the Tribunal had no jurisdiction to make the order, or

(b) in relation to the hearing or determination of the matter, a party had been denied procedural fairness." 5 Section 67 of the Act allows for an appeal to be made to this court on a question with respect to a matter of law. A reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal. The onus lies on the plaintiff to demonstrate that there has been an error with respect to a matter of law. 6 The width of s 67 was discussed in Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456. Hodgson JA (with whom Beazley and Tobias JJA agreed) stated succinctly [at para 33]: "… in my opinion, to establish an error of law by the Senior Member, it was necessary to show that he applied a wrong principle of law. That could be shown either from what he said, or because the ultimate result, associated with the facts that he expressly or impliedly found, indicates that he must have applied the wrong principle of law". 7 See also Kalokerinos & Anor v HIA Insurance Services P/L & Anor [2004] NSWCA 312 at paragraphs [39], [40], [41], [47] and [59]. 8 Section 67(3) of the Act provides that, after deciding the question, the subject of an appeal, the court may affirm the decision of the Tribunal, or it may make an order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or may remit its decision on the question to the Tribunal and order a rehearing of the proceedings by the Tribunal.

The Tribunal generally 9 At the outset, it is helpful to set out some of the provisions of the Act. The functions of the Tribunal are to adjudicate disputes between consumers and commercial disputes between landlords and tenants. The Tribunal is not constrained by the rigour of the courtroom. Its objects are to ensure that the Tribunal is accessible, its proceedings are efficient and effective, its decisions are fair and to enable proceedings before the Tribunal to be determined in an informal, expeditious and inexpensive manner. The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (s 28). 10 Evidence must be given on oath or statutory declaration (s 39(1)) but the Tribunal is not bound by the rules or practice of evidence and the Tribunal may inform itself on any matter in such manner as it considers appropriate (s 28(2)). The Tribunal must conform to the rules of natural justice, but broadly speaking, has control of and responsibility for its own procedures (s 28(1) and (2)). Its business is conducted in public (s 33). Normally, a party to the proceedings has carriage of his or her own case and is not entitled to be legally represented (s 36(1)). The Tribunal has the power to award costs (s 53), but usually each party bears its own costs. Pursuant to s 54 of the Act, the Tribunal is obliged to use its best endeavours to bring the parties to a settlement before making an order. The Tribunal has a power to correct its decision (s 50) and the Registrar can issue a certificate, which operates as a judgment (s 51). Section 35 provides that the Tribunal must ensure that each party in any proceedings is given a reasonable opportunity to call or give evidence and otherwise present the party's case (whether at a hearing or otherwise); and to make submissions in relation to the issues in the proceedings. I will refer in more detail to s 35 later.

Grounds of appeal 11 The grounds of appeal are that firstly, the CTTT misconstrued and misapplied s 32 of the Act by not permitting the plaintiff to amend documents in proceedings HB03/40937; secondly, the CTTT misconstrued s 35 of the Act by not permitting the plaintiff to present his case according to law; thirdly, the CTTT failed to correctly interpret and apply the law by failing to identify and implement the legal requirements pursuant to ss 32 and 35 of the Act; fourthly, the CTTT failed to appreciate that it has both the power and an obligation under the Act to do so and thereby constructively failed to exercise its jurisdiction which then amounted to an error of law; and fifthly, the plaintiff alleges that the building is defective, nevertheless the CTTT failed to entertain these allegations although the allegations are within the original application for an order pursuant to the Home Building Division of the CTTT.

Leave for an extension of time to lodge an appeal 12 The plaintiff applies for leave for an extension of time in relation to the orders of the CTTT made on 27 April 2005. The appeal essentially relates to the decision of 28 October 2005 when Mr Koma's application to amend his claim was refused. 13 This appeal and claim for relief arise from directions made by Senior Tribunal Member Durie on 28 October 2005 when the homeowner's application to amend his claim was disallowed. In my view it is not necessary to grant an extension of time. 14 On 21 November 2002 Brunet entered into a building contract to construct a new home on land owned by Mr Koma at Ashcroft, New South Wales. A dispute arose between Brunet and Mr Koma over construction of the building works on the property and payment of moneys owing by Mr Koma to Brunet.

History of proceedings 15 Both Mr Koma and Brunet commenced proceedings in the CTTT. In proceedings HB 03/40935 Brunet sought the sum of $80,297 plus interest and costs. In proceedings HB 03/40937 Mr Koma sought the sum of $190,000. Mr Koma's application stated the complaint to be "defective house built where $80,000 has so far been paid and stop work request needs to be finalised." The claims were ordered to be heard together. 16 Prior to the hearing, the parties, through their legal representatives, agreed firstly, that Brunet would accept the defective work/incomplete work claim of Mr Koma as detailed in the report of David Hall an expert engaged by Mr Koma; secondly, both parties' expert reports would be tendered without objection and that there would be no cross examination of the experts; and thirdly, Brunet would rectify all the defects described in the David Hall report. The issue to be decided by the Tribunal Member was whether there was an oral variation to the contract in relation to the type of bricks that were to be used. This took place on 16 September 2004, 6 December 2004 and 7 December 2004. These transcripts have not been made available. 17 On 16 September 2004, both parties were legally represented and Mr Koma had the services of an interpreter. Over the three days of the hearing eight witnesses gave evidence and were cross examined. As previously stated, Mr Koma relied on a report of Mr Hall which apparently stated that minor work needed to be done. Brunet relied upon an expert report. Although Mr Koma had previously obtained a report by (Top Q's), a decision was made sometime earlier than the hearing in Mr Koma's camp not to rely upon the Top Q report at the hearing. The Top Q report appears on the CTTT file. At the conclusion of the hearing the parties agreed on the conduct of the balance of the proceedings in determining Brunet's claim. 18 Mr Koma in his affidavit does not really explain if the decision to rely solely upon Mr Hall's report was made by him or by his solicitors. The explanation may be that his solicitor never discussed it with him. However, Mr Koma also does not make mention of the Top Q report and why it was obtained, placed on the CTTT file and relied upon. Brunet's solicitor says in the transcript that Mr Koma sacked Top Q. An explanation of this matter is, in my view, essential. All that Mr Koma says is that at no time had he given any instructions to his previous solicitors that the defects of the building were not to be disputed. According to Mr Koma, it was only after the hearings on 6 and 7 December 2005 that he was "altered to the notion that the hearing did not relate to the defects in any way and in the circumstances". He then instructed another firm of solicitors to act for him namely, Penhall and Co Lawyers at Burwood. These solicitors are not his current solicitors. 19 On 7 December 2004 Tribunal Member Durie gave an extempore judgment on the oral variation to the contract in favour of Brunet. After discussions between the Tribunal Member and the legal representatives it was agreed firstly, that the parties' experts would meet and determine the value of works carried out by Brunet and the experts were to provide a joint report by 17 January 2005; secondly, Brunet would forego its loss of profits claim; and thirdly, the matter would be set down for a hearing not to exceed three hours. This hearing has not yet taken place as the Tribunal is awaiting the outcome of these proceedings in this Court. The matter was then adjourned to 27 April 2005. 20 On 27 April 2005 Mr Koma the new solicitor Mr Penhall of Penhall & Co sought an adjournment, made an application to amend Mr Koma's claim and sought leave to admit new evidence. Mr Penhall had advised Mr Koma that he needed expert reports by structural engineers and Mr Koma agreed with these instructions. Two reports were obtained, one from Cantali and Associates dated 21 April 2005 and the other from Partridge and Partners dated 20 May 2005. At that hearing not surprisingly Brunet's solicitor objected to the tender of the new evidence. 21 In February 2005 the joint report (which in reality is not a joint one) was forwarded to the Tribunal. That report contained two separate calculations of the builder's quantum meruit claim. Mr Penhall submitted to the Tribunal Member that they now had a new expert report which indicated that there were structural defects in the brick walls which would need to be completely taken down and redone. The solicitor for Brunet objected to their tender. The Tribunal Member stated that that issue had not been raised at all in any of the sittings to date (t 5.17-26). The hearing was further adjourned. 22 On 27 April 2005 the Tribunal Member made the following directions: "1. The owner is to pay the builders costs of today on an indemnity basis, those costs to be agreed or failing agreement to be assessed pursuant to the provisions of the Legal Profession Act Part 11, and to be payable forthwith; 2. The owner is to pay the Builder's costs for the proceedings of 16 and 17 September and 6 & 7 December 2004, including the preparation for those hearings, on a party/party basis. More costs to be agreed or failing agreement to be assessed pursuant to the provisions of the Legal Profession Act Part 11 and payable forthwith; 3. The owner is to file and serve all further expert reports, including reports relation to costs, on or before 25/5/05; 4. The owner is to file and serve Points of Defence on or before 25/505; 5. The builder is to file and serve all further expert reports in reply on or before 22/6/05; and 6. The application be adjourned for directions." 23 On 15 July 2005, the Tribunal Member made directions for Mr Koma to file and serve experts' reports and amend his points of defence. Mr Korma had been unsuccessful on the oral variation of the contract issue, so was ordered to pay the costs of the prior hearing on a party/party basis. He was also ordered to pay the costs of 15 July 2005 on an indemnity basis. 24 On 28 October 2005 the leave to amend defence was heard by Senior Tribunal Member Durie. Both parties turned up on that day ready to argue this issue. While directions had been made to file and serve the points of defence and the experts' reports, the leave question was the subject of argument. Once again, Mr Koma's Counsel submitted that the basic issue was that Mr Koma had not been given the opportunity to present his case to it fullest, namely that the building was defective as set out in his original application and that consequential orders should have flowed from a decision that the building was defective. It was further submitted that in about December 2004 the Tribunal heard certain issues in relation to the claims by the parties but did not deal with the particular issues in its absolute form. 25 Counsel for Mr Koma stated to the Tribunal that the only issue that had a substantive airing was the oral variation one where the amount in issue was between $2,500 to $3,000 (t 4). The Tribunal Member disagreed with this proposition. The Tribunal Member's his recollection was that it was close to $40,000 with the demolition of the brickwork and the reinstatement of other brickwork. In my view, it would have be most unlikely that the parties would have agreed to spend three days of hearing time in the Tribunal over a dispute involving $3,000, as Counsel for Mr Koma had asserted. 26 The Tribunal Member pointed out that because of the agreement reached the builder litigated the matter in a particular way which he well may not have done without that agreement (t 12). The builder, the conclusion of the three day hearing, altered his position in that he agreed to forego his loss of profits claim. 27 Brunet's solicitor submitted to the Tribunal that to reopen the case was prejudicial to the builder because during the substantive hearing, Mr Koma had a barrister, a solicitor, an interpreter and other friends in the courtroom who were interpreting what was being said. He also submitted that had the Top Q report been relied upon the hearing would have been run differently. The builder submitted that he had been prejudiced as he has not been paid for the work done and over three years had now elapsed. 28 The Tribunal Member stated: "What I think is the hub of the case before me this afternoon is not a question of whether there are defects in the brickwork. It is question of how the parties agreed that the matter would proceed and it seems to me to be the proper conclusion, from what I've set out above, that the owner knowing of his claim for defective brickwork agreed to give up that claim in return for that builder accepting the other David Hall pleadings and that leads me to the conclusion that there should not now be leave given to the owner to amend his claim so as to seek brickwork defects." 29 Mr Koma's Counsel submitted that the Tribunal Member has not taken into account all relevant considerations and has reached a result that is plainly unjust or unreasonable and in so doing did not consider the relevant issues as set out in State of Queensland v J L Holdings (1997) 189 CLR 146. Further, Counsel for Mr Koma submitted that the Tribunal Member gave too much weight to the prejudice that would be suffered by Brunet and that he could take proceedings against his former solicitor. 30 In J L Holdings the High Court (per Dawson, Gaudron and McHugh JJ) at 155 referred to the position of a litigant and quoted from Ketteman v Hansel Properties [1987] AC 189 where Lord Griffiths said at 220: "…justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasions by facing new issues, the raising of false hopes…" 31 Their Honours in J L Holdings continued at 155:

"In this case, which is of a commercial nature, the litigants are on the one side a developer and on the other side government, and there is nothing which would indicate any personal strain which would justify the conclusion that costs are not an adequate remedy for prejudice caused by the amendment sought to the pleadings.

In our view, the matters referred to by the primary judge were insufficient to justify her Honour's refusal of the application by the applications to amend their defence and nothing has been made to appear before us which would otherwise support that refusal. Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an applications not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion." 32 In J L Holdings, the hearing had not yet taken place. In this case, Mr Koma had obtained a report from Top Q prior to the hearing taking place. The report stated that "the brickwork as inspected had no true vertical alignment consistent with photos taken…therefore current walls does exceed the established dimensional tolerance as permitted by Australian Standards building accepted guidelines". The Scott Schedule , attached to Top Q's report, calculated the total defective workmanship of materials claim to amount to $13,269.00 with Extras Claimed amounting to $9,716.00. 33 A decision in the plaintiff's camp was made not to rely upon this report. Mr Koma has not properly explained how this situation came about. It is my view that the Tribunal Member took into consideration all the relevant factors including that Mr Koma may take action against his former solicitors and applied the correct test. It was open to the Tribunal Member to come to the decision that he did. There is no error of law. 34 Finally, it was submitted that Mr Koma was not given a reasonable opportunity to call and give evidence and present his case and he was denied procedural fairness. The last submission is that the Tribunal Member gave directions for Mr Koma to amend his claim and then unreasonably and without any additional evidence or new circumstances withdrew the right for Mr Koma to have a hearing on those matters.

Procedural fairness in Tribunal 35 Section 28 of the CTTT Act reads: "28 Procedure of Tribunal generally

(1) The Tribunal may, subject to this Act, determine its own procedure.

(2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness.

(3) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

(4) The Tribunal is to take such measures as are reasonably practicable to ensure that the parties in any proceedings understand: (a) the nature of the assertions made in the proceedings and the legal implications of those assertions, and

(b) the procedure of the Tribunal and any decision or ruling made by the Tribunal that relates to the proceedings." 36 Section 32 of the Act provides: "(1) The Tribunal may, in any proceedings, make any amendments to any document (for example, an application) filed in connection with the proceedings that the Tribunal considers to be necessary in the interests of justice.

(2) Any such amendment may be made: (a) at any stage of the proceedings, and

(b) on such terms as the Tribunal thinks fit, but may only be made after notifying the party to whom the amendment relates.

…" 37 Section 35 of the Act reads: "Opportunity for parties to present case

The Tribunal must ensure that each party in any proceedings is given a reasonable opportunity:

(a) to call or give evidence and otherwise present the party's case (whether at a hearing or otherwise), and

(b) to make submissions in relation to the issues in the proceedings. …" 38 Section 35 provides that the CTTT "must ensure" that each party is given "a reasonable opportunity" to present its case. There are provisions which allow the CTTT a significant degree of flexibility in adapting its procedures to the exigencies of the case in determining the manner in which the proceedings will be conducted. Nevertheless, those provisions should not be construed so as to derogate from other provisions cast in obligatory language which constitute core elements of procedural fairness - see Italiano v Carbone & Ors [2005] NSWCA 177 at [105] and [106]. 39 Mr Koma had the benefit of legal representation and an interpreter during the hearing in the Tribunal. The case was conducted a certain way due to the agreements made by the solicitors for both parties. It would be most unusual for Mr Koma's solicitor to disregard a report favourable to his case and agree to conduct his case in a certain manner without his client's instructions. As previously stated, Mr Koma has not adequately explained why the Top Q report was not relied upon. While an order was made for Mr Koma to file his amended defence and the additional reports on 15 July 2005 it was at a later date that the parties argued whether the amendment should be allowed. The fact that the issue of whether leave should be granted took place at a later date does not mean that Mr Koma was denied procedural fairness. What was important was that Mr Koma was given an opportunity to fully ventilate why he should be allowed to amend his claim. 40 The appeal is dismissed. The summons filed 25 November 2005 is dismissed. The orders of Senior Tribunal Member Durie dated 28 October 2005 are affirmed. 41 Costs are discretionary. Costs usually follow the events. The plaintiff is to pay the defendants' costs as agreed or assessed.

(2) The summons filed 25 November 2005 is dismissed.

(3) The orders of Senior Tribunal Member Durie dated 28 October 2005 are affirmed.

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

26/02/2007 - Date on judgment incorrect - Paragraph(s) Heading

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