Micron Constructions P/L v Goodridge & Anor

Supreme Court of NSW|2005-09-06|Before: Micron Constructions P, Insurance Services P, Hodgson JA, Harrison J

CITATION : Micron Constructions P/L v Goodridge & Anor [2005] NSWSC 1224

Common Law Division JURISDICTION : Administrative Law List

DECISION : (1) The appeal is upheld; (2) The decisions of the CTTT dated 11 February 2004 and 17 December 2004 are set aside; (3) The matter is remitted to the CTTT to be determined according to law; (4) The first defendant is to pay the plaintiff's costs as agreed or assessed; (5) The first defendant is to have a certificate under the Suitors' Fund Act.

CATCHWORDS : Appeal decision of CTTT - adjournment - denial of procedural fairness

Consumer Tenancy Tribunal Act 2001 (NSW) LEGISLATION CITED : - ss 65 & 67 Suitors' Fund Act 1951 (NSW)

Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456 Kalokerinos & Anor v HIA Insurance Services P/L & Anor [2004] NSWCA 312 Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951 Kioa v West (1985) 159 CLR 550 CASES CITED : Krslovic Homes v Sparkes & Ors [2004] NSWSC 374 Sali v SPC Ltd & Anor (1993) 116 ALR 625 State of Queensland v J L Holdings (1997) 189 CLR 146 Thomas & Anor v Nedeljkovic [2004] NSWSC 524

Micron Constructions Pty Limited ACN 066 338 252 (Plaintiff)

Ross Goodridge PARTIES : (First Defendant)

Mr R Zikmann (Plaintiff) COUNSEL : Ms M Allars (First Defendant)

Mr Marc Hutchings, Marc Hutchings & Associates (Plaintiff)

Mr Julian Sefton, Snelgroves SOLICITORS : (First Defendant)

Submitting Appearance Mr I V Knight, Crown Solicitor (Second Defendant)

LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW

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

30005/2005 - MICRON CONSTRUCTIONS PTY LIMITED ACN 066 338 252 v ROSS GOODRIDGE & ANOR

JUDGMENT (Appeal decision of CTTT - adjourment - denial of procedural fairness) 1 HER HONOUR: By amended summons filed 20 May 2005 the plaintiff seeks firstly, an order of certiorari in proceedings No. HB 03/23377 in the Consumer Trader & Tenancy Tribunal (CTTT); secondly, an order quashing the decision of the CTTT on the ground that it was denied procedural fairness; and thirdly, an order that the decisions of the CTTT be set aside pursuant to s 67 of the Consumer Tenancy Tribunal Act 2001 (NSW) (the Act). 2 The plaintiff is Micron Constructions Pty Limited (the builder). Ross Goodridge (the owner) is the first defendant. The CTTT is the second defendant and has filed a submitting appearance. The builder relied on the affidavit of Peter Snelgrove sworn 31 May 2005 and Marc Hutchings sworn 30 June 2005. Goodridge relied on the affidavit of Julian Peter Sefton sworn 15 June 2005. 3 The plaintiff relies upon both ss 65 and 67 of the Consumer Trader and Tenancy Act 2001 (NSW) (the Act). 4 Section 65(3) provides that a court is not prevented from granting relief or a remedy of a kind referred to in a judgment or order in the nature of prohibition, mandamus, certiorari or other relief, or a declaratory judgment or order, or an injunction, in relation to a matter in respect of which the Tribunal has made an order if (1) the ground on which the relief or remedy is sought is that the Tribunal had no jurisdiction to make the order, or (2) in relation to the hearing or determination of the matter, a party had been denied procedural fairness. 5 Section 67 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 (s 67(8)). 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 of 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 it may remit its decision on the question to the Tribunal and order a rehearing of the proceedings before the Tribunal.

Grounds of appeal 9 The grounds of appeal and seeking prerogative relief are numerous and overlap. Firstly, it is submitted that the Tribunal Member denied the plaintiff procedural fairness and natural justice at various stages of the proceedings, namely, when the Tribunal Member, in deciding to sever the builder's cross claim against Daniel Thomas Talbot t/as Talbot Creative Colours (the painter) when its applications for adjournment were refused on 11 February 2004 and 12 February 2004; secondly, when the Tribunal Member proceeded to hear the matter in the absence of the plaintiff and its legal representatives; thirdly, when the Tribunal Member did not allow the builder to cross examine Mr Goodridge when the Tribunal Member did not permit objections to experts reports; and fourthly, when the Tribunal Member sought submissions and that the owner was permitted to change the nature of his claim. 10 The alleged errors of law are that the Tribunal Member erred when she stated that the builder could have summonsed the painter to give evidence. The Tribunal Member made ten assumptions regarding the absence of any evidence in rebuttal in assessing the defective painting work, the plaintiff was denied the opportunity to make objections to the expert evidence, and no basis was disclosed that the exterior building work was of no value. It is also alleged that the Tribunal Member erred in law in making a finding that the owner was entitled to a reduction in the amount of $16,595.00.

Notice of contention 11 The notice of contention put at issue the time by which this appeal should have been filed. The owner contended that the appeal was lodged out of time. It contended that the appeal should have been lodged 28 days after the decisions made on 6 February 2004, and 11 or 12 February 2004. The written reasons were not handed down until 17 December 2004. It is my view that the plaintiff was entitled to receive the reasons before lodging the appeal. The summons was filed on 14 January 2005. I should also add that the builder also relied on s 65. Delay is a factor to be considered if relief is to be granted under s 65, but I would reach the same conclusion that the builder was entitled to examine the reasons for the decision of the CTTT before making a challenge to that decision.

The CTTT proceedings 12 On 29 May 2003 the owner commenced proceedings against the builder, the builder, in the CTTT (HB 03/23377). For convenience I shall refer to the plaintiff as the builder and the defendant as the owner. The claim was in regard to building work undertaken by the builder at the owner's residence (the premises). The owner's claim HB 03/23377 included claims against the builder on account of alleged defective painting. The painting had been undertaken by a sub-contractor of the builder, Daniel Thomas Talbot t/as Talbot Creative Colours (the painter). 13 On 15 December 2003 the builder commenced proceedings against the painter in the CTTT (HB 03/53612). The builder alleged defective painting by the painter at the premises and the owner's claim against the builder in HB 03/23377. On 15 December 2003 the CTTT directed that HB 03/53612 should be heard together with proceedings HB 03/23377. 14 It is common ground that the matter was set down for hearing on 11 February 2004. Whether the matter was originally listed for hearing for one day, namely 11 February 2004, or two days, namely 11 February 2004 and 12 February 2004, was disputed both before the Tribunal Member and on appeal. 15 On 18 September 2003 the Tribunal sent a notice to the parties. Paragraph 5 of that notice stated: "The parties to notify the Tribunal as to the dates upon which they are available for a 2-day hearing of the application by 17/9/03." 16 I might add, it was estimated that the hearing was to last two days prior to the painter's matter being ordered to be heard with this matter. 17 On 26 November 2003, the Tribunal forwarded a Notice of Listing to the parties. It stated that the application had been listed before the Tribunal on "Wednesday, 11 February 2004 at 9.15 am. For formal hearing - bring witnesses." The owner's solicitor forwarded his correspondence to the barrister briefed. He was in no doubt that the hearing was to take one day plus. A contemporaneous note of the owner's solicitor dated 6 February 2004 records an entry "hearing date to proceed on 11 & 12th " and a letter dated 6 February 2004 from the solicitor to Counsel records that the hearing date of 11 and 12 February 2004 has been confirmed and that only matters to be dealt with at the hearing will be the claim against Micron Constructions Pty Limited. 18 The plaintiff's counsel referred to ten occasions throughout the Tribunal hearing where he submitted that there was a denial of procedural fairness. In essence it is what occurred at the directions hearings on 6 February 2004 which dictated the course the hearing adopted. It led to the adjournment application being made on 11 February 2004.

The directions hearing on 6 February 2004 19 On 6 February 2004 a telephone directions hearing (the directions hearing) took place in both matters. 20 Mr Snelgrove made an application that the proceedings should not be heard separately because it would prejudice the builder who relied upon the painter to appear as a witness at the hearing of proceedings HB 03/23377. The Tribunal Member ordered that two proceedings were to be heard separately. According to Mr Snelgrove when he sought to ask the Tribunal Member if she would hear him on the orders she said "This telephone directions is at an end." (aff [11]) 21 The Tribunal Member subsequently made orders that the tribunal proceedings HB 03/23377 and HB 03/53612 be heard separately, and that the owner's claim HB 03/23377 should proceed to hearing on 11 February 2004, which was five days hence. 22 The builder's solicitor, Mr Snelgrove deposed (aff [13]) that after the orders made by the Tribunal Member on 6 February 2004, it was not possible to summons the painter to appear at the hearing on 11 February 2004 due to time constraints. There were only two business days in which to issue a summons seeking the painter to appear before the Tribunal at the hearing. Mr Snelgrove could, however, have sought an order at the directions hearing that Mr Talbot appear at the hearing on 11 February 2004 (see Regulation 30 (aff [14])). On 9 February 2004 he wrote a letter to the solicitor acting for the owner placing them on notice of his intention to make an application to have the hearing date vacated (aff [14]). 23 The builder's solicitor deposed that in the course of the telephone directions hearing the Tribunal Member stated that the painter Mr Talbot would not be required to attend the hearing of 11 February 2005.

The hearing on 11 February 2004 24 On 11 February 2004 the hearing of HB 03/23377 commenced. At the outset Counsel for the builder renewed the builder's application that the severance of HB 03/53612 was prejudicial to the builder and had denied it the opportunity to have the painter give evidence in the proceedings. Counsel for the builder sought an adjournment of the matter to enable the two matters to again be heard together with the painter being present. The application was rejected by the Tribunal Member who ordered matter HB 03/23377 proceed to hearing on that same day. 25 The builder submitted that by the Tribunal Member rejecting the applications both at the direction hearing, and on the first day of hearing, the Tribunal Member erred in law by denying it procedural fairness.

Tribunal Member's reasons for refusal of adjournment 26 The Tribunal Member stated: "Given that both parties knew well in advance that the matter was to proceed on 11 February 2003, I consider that there was no reason why the painter could not have been summoned by the Respondent to give evidence in his, the Respondent's case, if this is what the Respondent wanted.

It was open for the Respondent to summon the painter as a witness in the case before me, but it chose not to do so.

I completely reject Ms Domenec's suggestion to me that the Respondent was denied the opportunity to have the painter present to give evidence, and that the Respondent's case would be prejudiced in any way if the matter proceeded in his absence. The Applicant opposed the application for adjournment. I note from the file that a number of adjournments had been granted to enable the Respondent to comply with directions of the Tribunal.

I consider that, given this, to grant the adjournment application would have unfairly prejudiced the Applicant.

"client expected that he would have an opportunity to have the painting claim determined as between all parties because it was the subcontractor's work that is in issue, so there are two fundamental grounds for the basis of the application."

Clearly, whilst the Respondent may have a claim against his subcontractor, this does not and cannot form part of the claim brought by the Applicant against the Respondent, for the simple reason that there was no contract between the painter and the Applicant.

The Respondent has not been denied the opportunity to proceed with his claim against the painter at a time to be fixed by the Registry. In my refusing the adjournment application, it cannot be said that the Respondent has been denied natural justice in these proceedings.

In the alternative, Ms Domenec sought an adjournment so that the defendant could appeal to the Supreme Court, the decision of Member Thane to split the claims.

This Application was refused." 27 After the Tribunal Member had refused the adjournment application the matter was adjourned for a short time to enable the parties to attempt negotiate a settlement. Settlement was not achieved and a decision was made that the matter would continue on the following day (12 February 2004).

Denial of natural justice 28 In relation to natural justice, Professor S A de Smith, Judicial Review of Administrative Action, 2nd ed., 180-181 has stated: "Natural justice generally requires 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." 29 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..." 30 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 as a notion is a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case (584-585). 31 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." 32 However whether there is a denial of procedural fairness depends on the circumstances in each case. The decision to grant an adjournment is a discretionary one and factors to be taken into account are set out in State of Queensland v JL Holdings (1997) 189 CLR 146; Sali v SPC Ltd & Anor (1993) 116 ALR 625; Thomas & Anor v Nedeljkovic [2004] NSWSC 524. 33 As the Tribunal Member pointed out there had been a number of adjournments granted to enable the builder to comply with directions. But the Tribunal Member at the commencement of her judgment said that both parties knew well in advance that the matter was to proceed on 11 February 2003. However, the effect of severing the builder's claim against the painter, which would be heard at a future date, had a serious consequence for the builder. The expectation of the builder prior to 6 February 2003 would have been that the painter as a party would have been present on 11 February 2003 and could have given evidence. Because the painter was no longer a party to the proceedings he would not be present at the hearing. That in turn meant that the builder would have to summons the painter to attend the hearing. The builder in effect had two working days to obtain this order from the CTTT and serve the summons. The painter may have given evidence as to the nature of work carried out or not carried out by the builder when he was on site. 34 In my view the builder was prejudiced by the refusal to grant an adjournment. The owner could have been awarded a costs order in his favour if an adjournment was granted. The builder in effect was denied the real opportunity to call the painter to give evidence. While an appeal court does not interfere in a decision such as a contested adjournment application lightly, in this case by denying the builder the real chance of calling the painter to give evidence there has been a denial of procedural fairness which in my view constitutes an error of law. 35 The appeal is upheld. That being so, the decisions of the Tribunal Member dated 11 February 2004 and 17 December 2004 are set aside. This matter is remitted to the CTTT to be determined according to law. 36 Costs are discretionary. Costs normally follow the event. The first defendant is to pay the plaintiff's costs as agreed or assessed. The first defendant is to have a certificate under the Suitors' Fund Act 1951 (NSW) - see Krslovic Homes v Sparkes & Ors [2004] NSWSC 374 Shaw J.

(2) The decisions of the CTTT dated 11 February 2004 and 17 December 2004 are set aside.

(3) The matter is remitted to the CTTT to be determined according to law.

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

(5) The first defendant is to have a certificate under the Suitors' Fund Act . **********

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.

Consumer Tenancy Tribunal Act 2001(NSW)

Suitors' Fund Act 1951(NSW)

Consumer Trader and Tenancy Act 2001(NSW)

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Cases Cited (10)