These appeal proceedings were remitted to the Appeal Panel by the decision of Davies J. in the Supreme Court of New South Wales in John Maiolo t/as M & N Peninsular Kitchens Joinery v Chiarelli [2017] NSWSC 982.
Order 4 of the orders made by Davies J. was:
'Remit the proceedings to the Appeal Panel to vary its judgement to provide for payment by the Defendants to the Plaintiff for carrying out the order of the Appeal Panel to install the kitchen.'
The judgement of the Appeal Panel as referred to in order 4 was its decision in John Peter Maiolo v Frank Chiarelli and Anor [2016] NSWCATAP 81 where we ordered, among other things:
'Pursuant to section 81(1)(d) of the Civil and Administrative Tribunal Act 2013 the appellant must install the kitchen which was previously stored in the respondents' garage at 1 Vale Avenue Dee Why in a proper and workman like manner, including returning and installing the respondents' hot plate and under bench sinks on or before 9 May 2016.'
The remittal was heard by us on 20 November 2017.
[2]
The parties' submissions
In accordance with directions made by the Appeal Panel, the appellant served written submissions and an affidavit which was accepted as evidence in the remittal. The appellant also filed and served 5 volumes of documents relevant to the proceedings.
The respondent's submissions and the documents that were attached to them were filed 11 days late and 3 days before the hearing. These submissions were received by the Appeal Panel on the morning of the hearing.
The appellant's submissions address the history of the transactions between the parties which involved the appellant fabricating and installing kitchens in the upstairs and downstairs of the respondents' residence and the history of the dispute between the parties concerning the fabrication and installation of the downstairs kitchen.
The downstairs kitchen dispute was heard in the Consumer and Commercial Division of the Civil and Administrative Tribunal (the 'Tribunal'), the Appeal Panel of the Tribunal and in the Supreme Court.
In these remittal proceedings the appellant seeks orders that the respondents pay him:
1. the full price of the downstairs kitchen and the cost of the installation of the downstairs kitchen;
2. interest in accordance with the contract made between the parties; and
3. the costs of the remittal proceedings and the previous proceedings in the Appeal Panel.
The respondents' submissions are that the contracts for the upstairs and downstairs kitchens at their residence were 'interdependent' and that total price of the work to be carried out by the appellant was $34,375.00.
The respondents' submissions as developed by their solicitor at the hearing are to the effect that they are not required to pay the appellant for the fabrication and installation of the downstairs kitchen because the appellant failed to provide them with Home Owners Warranty Insurance pursuant to section 92(1) of the Home Building Act 1989 (the 'Act'). The respondents rely on section 94(2) of the Act to support a submission that the upstairs and downstairs kitchen work was carried out in stages and that the contract price for the work is taken to be sum of the contract prices under each of the contracts for the upstairs and downstairs kitchen work
In addition the respondents submit that in installing the downstairs kitchen the work performed by the applicant was in breach of section 18B(1)(a) of the Act. The respondents attached a number of very poor black and white photographs to their submissions in an attempt to establish a breach of the statutory warranties set out in section 18B(1)(a) of the Act. The solicitor for the respondents did not press this issue at the hearing, given that the photographic evidence attached to their submissions was so poor and that expert evidence, not provided by them, is usually required to support a case for breach of the statutory warranty contained in section 18B(1)(a) of the Act. The respondents' solicitor indicated that their complaints regarding the quality of the downstairs kitchen would be pursued in separate litigation which is unfortunate considering the protracted disputation which has accompanied this work.
Despite order 4 made by Davies J., the respondents conclude that the Appeal Panel was correct not to make an order requiring them to pay for the downstairs kitchen and submit that the Appeal Panel should make an order that the appellant refund them the sum of $34,375.00.
In submissions developed at the hearing the respondents contended that the contracts entered into by the parties did not comply with sections 7 or 7AAA of the Act with the consequence that pursuant to section 10 of the Act the appellant is not entitled to damages or to enforce any other remedy in respect of a breach by the respondents of the downstairs kitchen contract.
[3]
Evidence in the Remittal
The respondents' submissions attached a number of documents which we accepted as evidence in the remittal.
This evidence in the remittal was:
1. Exhibit A, the appellant's affidavit sworn 17 October 2017;
2. Exhibit B, a copy of an order form dated 14 November 2014 for the downstairs kitchen. The total amount payable by the respondents to the appellant for the fabrication and installation of what was described as the 'cabinetry' was $15,950.00;
3. Exhibit C, a copy of an order form dated 31 July 2014. The total amount payable by the respondents to the appellant for the fabrication and installation of what was described as the 'cabinetry' was $9,432.00;
4. Exhibit D, a copy of an order form dated 31 July 2014. The total amount payable by the respondents to the appellant for the fabrication and installation of what was described as the 'cabinetry' was $8,575.00; and
5. Exhibit E, a copy of a hand written reconciliation sheet signed by the appellant.
The order forms referred to in exhibits B, C and D contained a clause 14 for the payment of interest at the rate of 18% if there was late payment by the respondents.
[4]
Jurisdiction of the Appeal Panel on the remitter
Division 3 of the Civil and Administrative Tribunal Act 2013 deals with Appeals from the Tribunal to courts. The appellant's appeal to the Supreme Court was brought under that Division. Section 83 of the Civil and Administrative Tribunal Act provides that the court hearing such an appeal may make orders including remitting the case to be heard and decided again by the Tribunal with or without the hearing of further evidence in accordance with the directions of the court.
The orders made by Davies J in the Supreme Court did not provide for the filing of further evidence. However his Honour's judgement discloses that he was minded to remit the proceedings to the Appeal Panel with evidence to be given.
At [71] of the judgement his Honour stated:
'Although I consider that the parties and/or their lawyers have lost perspective in the way these proceedings have been conducted both in this Court and in the Tribunal, I do not see that I have any proper basis for doing other than remitting the matter to the Appeal Panel for the matter to be resolved there on any further evidence that will need to be given.'
At [72] his Honour further stated:
'However, as the Defendants accept that they should make a payment when the kitchen is installed, I consider that the matter should be remitted for the Appeal Panel to make an order for payment in favour of the Plaintiff subject to the evidence that is adduced before the Panel in relation to that payment.'
We have come to the conclusion that having regard to the order of Davies J, what was stated by him in the passages cited and section 83(3) of the Civil and Administrative Tribunal Act, we are required to vary the orders made in our decision given on 11 April 2016 in John Peter Maiolo v Frank Chiarelli and Anor [2016] NSWCATAP 81 to provide for payment by the respondents to the appellant for the installation of the downstairs kitchen. So far as additional evidence is concerned we will proceed on the basis that the parties are permitted to adduce any evidence already tendered in the proceedings and any further evidence that bears on the issue of the payment to be made by the respondents.
We are of the view that his Honour's orders and what he stated in his judgement does not permit the question of whether the respondents are under an obligation to make payment to the appellant to be agitated.
Acting strictly in accordance with the orders of Davies J, and what was stated by him, we are of the view that we have no jurisdiction to deal with what we see as the additional issues raised by the parties namely:
1. The appellant's claim for the costs of the previous appeal proceedings which we have already determined; and
2. The respondents' claim that no order should be made in the appellant's favour because of Home Owners Warranty Insurance issues; and
3. Subject to what is stated below, the respondents submission that the contracts entered into by the parties did not comply with sections 7 or 7AAA of the Act with the consequence that pursuant to section 10 of the Act the appellant is not entitled to damages or to enforce any other remedy in respect of a breach by the respondents of the downstairs kitchen contract.
[5]
The appellant's claim for payment
As ordered by Davies J, we will determine the amount to be ordered in favour of the appellant.
In his affidavit which is exhibit A in these proceedings, the appellant at paragraph 17 states that he installed the kitchen and is entitled to the contract price of $15,950.00 for it. He also states that the respondents have refused to pay for the kitchen or for the costs of installation. This evidence, so far as the sum of $15,950.00 is concerned, is supported by exhibit B which is the order form for the kitchen, which states that the total to be paid by the respondents is $15,950.00.
The respondents' submissions do not dispute that the kitchen was both provided and installed. However they rely on other matters, as we have referred to above, to support submissions that they ought not be ordered to pay for the kitchen.
We find that the evidence to which we have referred supports a finding that an order should be made that the respondents pay the appellant the sum of $15,950.00 for the fabrication and installation of the downstairs kitchen.
[6]
The appellant's claim for interest
We are of the view that the appellant's claim for interest should be viewed as part of his claim for payment and determined by us.
The order form which is exhibit B contained clause 14 for the payment of interest at the rate of 18% if there was late payment by the respondents. The appellant claims that since there has been a failure by the respondents to pay the sum of $15,950.00 for the kitchen, he is entitled to interest on that amount in accordance with clause 14.
The respondents solicitor developed a submission before us that the appellant was not entitled to rely on the order/contract for the downstairs kitchen, because of non-compliance with the Act.
While this submission was to the effect that non - compliance with the Act prevented recovery at all, which we find is a matter which does not come within the remitter ordered by Davies J, we are of the view that the submission is relevant to the appellant's claim for interest and it will be considered by us on that basis.
Section 10 of the Act deals with enforceability of contracts. It states that a person who contracts to do any residential building work 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 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.
The effect of the respondents submission so far as it relates to interest is that if the appellant having contracted to do residential building work under a contract to which section 7 of the Act applies, has done so in a contract that is not in writing, or which does not have a sufficient description of the work, will not be entitled enforce any remedy in respect of a breach of the contract, in this instance the remedy of interest enlivened by the respondents' failure to pay the contract price.
Section 7 applies to a contract in the circumstances set out in section 7(1A) which states:
'This section applies to a contract only if the contract price exceeds the prescribed amount or (if the contract price is not known) the reasonable market cost of the labour and materials involved exceeds the prescribed amount. The prescribed amount is the amount prescribed by the regulations for the purposes of this section and is inclusive of GST.'
We find that section 7 of the Act applied to the order form/contract for the downstairs kitchen, exhibit B, since the amount prescribed by the regulations was $5,000.00 and the contract price of $15,950.00 exceeded that amount.
It is clear that the contract was in writing. There is no dispute between the parties that the subject matter of the contract related to residential building work as defined by the Act.
As regards the issue of whether the contract had a sufficient description of the work to which the contract related, we are of the view that it is arguable that exhibit B does not contain a sufficient description of the work. All that is referred to is 'cabinetry'. However, the appellant's counsel referred us to another copy of exhibit B at page 883 of the appellant's appeal books which has attached to it a plan of the kitchen which contains a detailed description and depiction of the work to be carried out by the appellant. This document was attached to the appellant's costs submissions sent to us in connection with the costs of the appeal. We accept that the copy of the contract at page 883 of the appellant's appeal books, Part B - Folder 4 is a true copy of the contract between the parties for the supply and installation of the downstairs kitchen.
The order form/contract was we find in writing and contained a sufficient description of the work to which it related.
By reason of the finding above, we further find that there is no basis for the respondents' submission that section 10 of the Act prevents the appellant from relying on clause 14 of the order form/contract to claim interest.
The appellant has calculated interest from 11 April 2016 to 31 December 2017 at the rate of 18% per annum to be in the sum of $4,950.66. This calculation is not disputed by the respondents.
We find that by reason of the respondents failure to pay for the downstairs kitchen the appellant is entitled to interest in the sum of $4,950.66 in accordance with clause 14 of the of the order form/contract relating to the downstairs kitchen.
[7]
Costs
At the remittal hearing we indicated that we would deal with the question of the costs of the remitted proceedings and reconsider the issue if a party requested us to do so.
Section 60 of the Civil and Administrative Tribunal Act deals with costs stating that each party is to pay their own costs unless there are special circumstances warranting an award of costs. In considering whether special circumstances exist, section 60(3) sets out a range of matters which the Tribunal may have regard to.
Rule 38A of the Civil and Administrative Tribunal Rules 2014 states:
'38A Costs in internal appeals
(1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of:
(a) enabling legislation, or
(b) the Division Schedule for the Division of the Tribunal concerned, or
(c) the procedural rules.
(2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.'
The appellant's internal appeal the subject of our decision of 11 April 2016, was lodged on 28 October 2015. Rule 38A of the Civil and Administrative Tribunal Rules therefore has no application.
We are of the view that the respondents should pay the appellants costs of the appeal. The special circumstances that are required in order to justify such an order are as follows.
First, order 4 made by Davies J was clear that the proceedings were remitted to us for the purposes of varying our judgement to provide for payment by the respondents to the appellant for carrying out our order to install the kitchen.
Secondly, the judgement of Davies J. made it clear that evidence would be permitted in relation to the payment.
Thirdly, the orders and judgement of Davies J. did not permit the respondents to raise issues that, if accepted, would result in an order that no payment be made by the respondents to the appellant for the supply and installation of the kitchen. Despite the fact that the orders and judgement of Davies J. did not permit the respondents to raise issues going to whether they should pay for the downstairs kitchen, the respondents' main purpose at the hearing was to ventilate those issues.
Fourthly, the respondents did not produce evidence that went to the issue of the payment to be made by the respondents to the appellant for the supply and installation of the kitchen. To the extent that the respondents sought to do that by evidence of defective work, such evidence was ineffective and ultimately not pressed by the respondents. In the absence of any evidence relating to the payment issue, it was almost inevitable that the appellant would be successful in obtaining an order in his favour for the sum of $15,950.00.
Fifthly, so far as the respondents relied on section 10 of the Act to submit that the appellant was 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, that submission failed because it was plain that the contract for the downstairs kitchen was in writing and did contain a sufficient description of the work to which it related.
The appellant seeks an order for the costs of the earlier proceedings before the Appeal Panel. We dealt with those costs in our decision dated 26 September 2016. In his decision Davies J. considered that decision at [48] - [70] and at [62] stated that he did not consider the appellant had demonstrated anything to warrant the granting of leave to set aside our decision on costs. On that basis we will not vary or change our costs decision.
[8]
Orders
In accordance with the orders made by Davies J on 26 July 2017, we will vary our decision in John Peter Maiolo v Frank Chiarelli and Anor [2016] NSWCATAP 81 to include an order that:
'Frank Chiarelli and Vicki Woodward must pay John Peter Maiolo the sum of $20,900.66 immediately'
We will make an order in these remitted proceedings that:
'Frank Chiarelli and Vicki Woodward must pay John Peter Maiolo's costs of and incidental to these remitted proceedings, such costs, if not agreed, to be assessed on the basis set out in the legal costs legislation as defined in section 3A of the Legal Profession Uniform Law Application Act 2014'
We will also make the following orders in the event that a party requests us to reconsider our costs decision:
'Any application for a reconsideration of our costs order must be lodged in the Tribunal and served on the other party within 21 days of the date of these orders either attaching or referring to any documents relied upon in support of the application.
The costs respondent will have 21 days after the date it receives the application referred to in the preceding paragraph to lodge in the Tribunal and serve on the other party its submissions in response to the costs application, such submissions either attaching or referring to any documents relied upon.
Subject to the right of the parties to make submissions under section 50(3) of the Civil and Administrative Tribunal Act 2013 for a hearing on costs (which should be made in conjunction with the submissions referred to above), the Appeal Panel will determine any request for a reconsideration of our costs order on the basis of the papers lodged in the Tribunal.'
[9]
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: 22 January 2018