Manny v Burmester [2002] ACTSC 44

2. An appeal to the Supreme Court against a decision of the Small Claims Court can be brought only by leave of the Supreme Court, and then only if the Supreme Court is satisfied that the decision of the Small Claims Court was wrong on a question of law or that the conduct of the proceedings in the Small Claims Court was unfair to the applicant: Magistrates Court (Civil Jurisdiction) Act 1982 (the Act) s 387A.

3. For reasons which follow, the document filed on 30 November 2001 will be treated as an application for leave to appeal.

4. The decision challenged is the order of the Small Claims Court that judgment be entered for the respondent (Mr Burmester) in the sum of $2,005.80 in proceedings commenced by originating application dated 7 August 2001. In that application Mr Burmester claimed damages from Mr Manny being the cost of rectifying an air-conditioning system which had been installed in Mr Burmester's house by Mr Manny pursuant to contract.

5. The response filed in the Small Claims Court on 7 September 2001 admitted that a contract was entered into in July or August 1998 and raised essentially the following issues:

* A defence that the system was supplied and installed in accordance with the terms of the contract and that the current deficiencies in the system are the result of alterations made by or at the request of Mr Burmester.

* A counterclaim for $4,158 being the cost of modification work done to the system by Mr Manny at the request of Mr Burmester.

6. The facts as found by the Magistrate presiding over the inquiry in the Small Claims Court were as follows. Mr Burmester as the customer was reliant upon the expertise of Mr Manny to identify a suitable air-conditioning system for installation in Mr Burmester's home to heat a common zone and one of two alternative zones in the home at any one time. In reliance on such expertise (and after installation and removal of other units) Mr Burmester specified for installation a Teco 3 horsepower unit by acceptance of a quotation dated 19 August 1998. The unit and associated ducting were installed. Subsequently, when Mr Burmester complained of insufficient air flow in some ducts and too much air flow in some others, Mr Manny enlarged the return ducts. The air flow continued to be unsatisfactory and Mr Manny replaced a compressor. The air flow still continued to be unsatisfactory into the summer months when the unit was on the cooling cycle and into the autumn of 1999 when it was starting to operate on the heating cycle.

7. Mr Manny advised Mr Burmester that the compressor was faulty and ordered a further replacement compressor. In the meantime, Mr Burmester sought advice elsewhere and received such advice from Ecowise, Teco, and Spry Associates, beginning in about May 1999. The unit remained "off line" until October when Ecowise advised that the controller in the ceiling was faulty. Mr Manny did not replace or rectify the controller. According to Mr Burmester, Mr Manny claimed that the motor was faulty. Ecowise stuck to its original view and advised Mr Burmester that there was nothing wrong with the motor. Eventually Mr Burmester brought the proceedings in the Small Claims Court.

8. According to the ex tempore reasons given by the Magistrate, Mr Manny conceded that the system was unsatisfactory in that it cut out and failed to operate in very cold weather but denied that the defects were his responsibility and denied that reasonable steps could be taken to remedy those defects.

9. Mr Paul Spry gave expert opinion in the Small Claims Court that the ducts were too narrow and not in compliance with the manufacturer's recommendations in that regard. The Magistrate accepted that evidence and concluded that Mr Manny was in breach of his obligations under the contract to supply and install an air-conditioning system which would adequately heat Mr Burmester's home as agreed.

10. The Magistrate turned to the assessment of damages and, accepting the written quotations of Allan Gee to the effect that the cost of work reasonably required to rectify the system by work associated with the ducting was $1,669.80, the Magistrate then entered judgment for that amount together with certain costs being $336, total $2005.80. No order was made in relation to the counter-claim, but the transcript of the proceedings records that it was withdrawn by the solicitor for Mr Manny.

11. The grounds on which an appeal would be based are set out in the notice of appeal. It is convenient to paraphrase those grounds. The first is that the Magistrate's decision was wrong in law in that it was based upon "additional facts", contained in documents not placed in evidence, in particular a narrative statement purporting to be by Mr Burmester annexed to the originating application. The further or alternative ground of appeal is that in not giving the parties the opportunity to address the issues raised by the additional facts, Mr Manny was denied procedural fairness.

12. As to the first ground of appeal, I do not consider that it was an error of law for the Magistrate to take into consideration the statement of Mr Burmester annexed to the originating application. Clearly, the Magistrate presiding over an inquiry in the Small Claims Court in accordance with the Act was not bound by the rules of evidence. Furthermore, the procedure to be followed was as might be directed by the Small Claims Court, which could inform itself in any manner it thought fit: s 431.

13. Mr Kildea, solicitor for Mr Manny in the Small Claims Court and in the present application, conceded during the hearing in this Court that "quasi evidence" may be relied upon by a party to an inquiry in the Small Claims Court. He submitted that nevertheless there must be some mechanical means whereby the parties know what is under consideration by the Small Claims Court and what is not, so that submissions may be put as to the weight of such evidentiary material as there is and so that rebutting evidentiary material may be presented if so desired.

14. I accept this submission. It means that the first ground of the appeal in effect merges with the second ground based on alleged denial of procedural fairness.

15. Mr Kildea further submitted that the gravamen of Mr Manny's complaint as to denial of procedural fairness is that the Magistrate took into account the contents of a number of documents that were not admitted into evidence in the usual way and which were not properly before the Magistrate in any other way. However in the ex tempore reasons, the Magistrate made clear that the narrative statement by Mr Burmester attached to his originating application (but not marked as an exhibit) was to be treated as part of the evidentiary material before the Small Claims Court. The Magistrate also referred by description to a number of other documents which also accompanied the originating application. Those documents are:

* Three contracts admitted into evidence as exhibit 1.

* Chronological summary of reports and assessments relating to the work.

* Report from Ecowise to Teco Australia Pty Ltd 7 May 1999.

* Report from Teco Australia Pty Ltd to Mr Burmester dated June 2000.

* Report from Teco Australia Pty Ltd to Mr Burmester dated 14 May 2001.

* Report from Paul Spry dated 25 June 2001, with curriculum vitae.

* Floor plans showing outlets and return air outlets of system installed.

* Handwritten notation of the new duct layer of Allan Gee undated.

* Tax Invoice dated 26 July 2001 from Spry Associates.

16. These documents were in the Supreme Court file, apparently forwarded by the Small Claims Court for the purpose of the present application. They will be marked appropriately as a schedule to these reasons for judgment and are available for inspection in the Supreme Court file.

17. The Magistrate did not expressly say whether or not the documents in the schedule would be treated as part of the evidentiary material before the Small Claims Court. However, having read the whole of the transcript, I find that it is to be inferred from what is said in the reasons as well as what appears from various remarks and references in the transcript of what took place during the hearing that the Magistrate considered that the documents in the schedule should be given whatever probative weight they deserved.

18. I am not convinced that Mr Manny or his solicitor was taken by surprise when the Magistrate referred in the reasons to the documents in the schedule. The possibility that the Magistrate might give them or some of them material weight was apparent from the way the inquiry was conducted. In the absence of protest by Mr Manny's solicitor during the hearing or at the end of the Magistrate's delivery of the decision I further infer that copies of those documents had been served on Mr Manny at the same time as service of the originating application, or that they came to his knowledge before or early enough in the hearing as not to cause him any surprise or prejudice.

19. In any event, it also appears from the Magistrate's reasons that in fact no substantial weight was put on any of the documents, except the report from Mr Paul Spry. The contents of that report were clearly available to the solicitor for Mr Manny, if not to Mr Manny himself, during the hearing in the Small Claims Court. Furthermore, Mr Spry gave oral evidence, again without objection as to the use of his report, and was cross-examined.

20. It was the evidence of Mr Spry which persuaded the Magistrate that the system installed by Mr Manny failed to provide adequate heating to the Burmester home as provided for in the contract and further persuaded the Magistrate that it was probable that the deficiency in the system might be made good by installation of extra dampers, renewing one of the Y connectors, replacing certain sections of ducting by ducting of a wider diameter and other relatively minor works. The evidence of Mr Spry also tended to confirm that the reasonable cost of rectification would be as appeared in the quotations supplied by Allan Gee. The estimated cost of that work was not put in issue in the hearing in the Small Claims Court.

21. Mr Manny's solicitor had the opportunity to cross-examine Mr Spry on the issues and that was done. Mr Manny was entitled to call independent opinion evidence on the same issues but did not do so.

22. The issue raised by Mr Manny in his own evidence was not so much an assertion that the system worked adequately (although he did claim that Mr Burmester, contrary to the terms of the contract, expected it to heat the whole of his house at once, instead of only half the house at any one time) as a denial that the recommendations of Mr Spry would be effective in solving the problem. Mr Manny also claimed in his evidence that Mr Burmester contributed to the problem by shutting the doors in that half of the house not being currently heated and thereby preventing the air from circulating properly. Where Mr Manny's evidence as to facts and events conflicted with that of Mr Burmester and where as to opinion it conflicted with that of Mr Spry, the Magistrate was entitled to reject the former and accept the latter. Indeed, a decision to the contrary would have been surprising.

23. Mr Manny was not deprived of the opportunity to meet the case presented on behalf of Mr Burmester. There is no prospect of an appeal being successful either for error of law or procedural unfairness.

24. The application for leave to appeal is dismissed. The judgment and orders of the Small Claims Court are confirmed. Mr Burmester appeared for himself in the application for leave to appeal. There will accordingly be no order as to the costs of the application.

25. I take the opportunity to add that the way this application was conducted meant that a number of unnecessary issues have taken up time and attention but in the end have not needed to be exhaustively explored or discussed, let alone decided, in these reasons. For the future, some of these difficulties might be avoided if parties in the Small Claims Court, especially those legally represented, took care to identify the evidentiary material on which they sought to rely and that on which they did not. The ordinary courtroom procedure of marking documents for identification when they are not regarded as part of the evidence and marking them as exhibits when they are is a useful model even for the informality of the Small Claims Court. Further, the Registrar of the Small Claims Court might give consideration to not allowing documents to be filed unless they are authorised to be filed, such as affidavits. Generally, documents should not be accepted for filing in order to provide evidence.

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour Chief Justice Miles.

Counsel for the respondent: Mr H Burmester in person