Moussa Enterprises Pty Ltd v David Stanford and Kelly Stanford

Notice of appeal

1. Moussa in its notice of appeal sets out eight grounds of appeal which we summarise as follows. 1. The Tribunal failed to acknowledge that home owners' warranty insurance had been issued. 2. The claims for the replacement of the verandah (or deck) were considered by the Tribunal, when this had not been included in Mr and Mrs Stanford's claim. 3. An invoice relied on by the Tribunal was incorrect. 4. The Tribunal relied on evidence which was not provided by an independent witness. 5. Mrs Standford misled the Tribunal in her evidence in relation to the subfloor to the decking. 6. The Tribunal made findings not supported by the evidence. 7. The Tribunal failed to consider a reduction of $3,960 for the incomplete and unfinished deck (or verandah). 8. During the oral reasons the member stated that "this case was open to an appeal".
2. The appellant submits that the decision of the Tribunal was not fair or equitable, and that the decision and was against the weight of the evidence. The appellant also refers to a number of exchanges between the Tribunal member and the parties at the hearing of 16 June 2014, and provided brief transcripts of those exchanges.

Reply to the Appeal

1. The respondents also dispute the decision of the Tribunal. At page 4 of their submissions they state that the order of 16 June 2014 should be reviewed and that the Appeal Panel dismiss or amend that order. Alternatively, they seek that new orders should be made whereby Moussa is ordered to pay them $6,350.00. They also seek an order that the $3,387.00 that they have already paid pursuant to the order of 16 June 2014 be returned to them in full.
2. In relation to the substance of the appellant's appeal they state that leave to appeal should not be granted. They also provided submissions in relation to exchanges which occurred during the course of the hearing, in respect of which the appellant provided short extracts of a transcript. However, the respondents submit that the short extracts provided by the appellant should be disregarded as evidence, and the entire transcript should be reviewed for context and clarity.

Nature of the Appeal

1. The Act sets out the basis upon which appeals from decisions of the Consumer and Commercial Division of the Tribunal can be made. Section 80(2)(b) of the Act provides that an appeal may be made as of right on any question of law, or with leave of the Appeal Panel on any other grounds.
2. The appellant does not identify any of the grounds of appeal as constituting a question of law. In fact the appellant, as we have noted, states that it is asking for leave to appeal, the decision being appealed from being not fair and equitable, and against the weight of the evidence.
3. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, the Appeal Panel considered the requirements for establishing an "error of law" giving rise to an appeal as of right. The Appeal Panel stated at [12] that, in circumstances where an appellant is not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally, and that it is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent.
4. Without expressing exhaustively possible questions of law, the Appeal Panel in Prendergast referred at [13] to a failure to provide proper reasons as constituting an error of law. The Appeal Panel considered this, in relation to written reasons for decision, in Murnane Carpentry Pty Ltd v Kalinovski [2015] NSWCATAP 30. At [14] the Appeal Panel concluded that a failure by a Tribunal to comply with s 62(3) of the Act will constitute a failure to provide proper reasons, and thus be an error of law for the purposes of s 80 of the Act. Section 62(3) sets out what a written statement of reasons must contain.
5. We note the observations of the Appeal Panel, in speaking generally about the requirement to give reasons, stated in Collins v Urban [2014] NSWCATAP 17 at [49] that: One reason why reasons are generally required, notwithstanding a provision such as s 62, is that if reasons for decision are neither sought nor prepared and an appeal or application for leave to appeal is lodged, the findings of fact and legal reasoning of the decision maker at first instance would not be available to the appellate body by way of written reasons. In many instances not having findings of fact and legal reasoning explicitly available may render effectively worthless any appeal right because the appellate body does not have a statement of the findings of fact, the relevant law and explanation of how the law was applied to the facts as found, by the decision maker at first instance.
6. The Appeal Panel in Prendergast concluded at [57] that the following propositions could be derived from the authorities concerning the nature and extent of the duty to give reasons: 1. notwithstanding that there have been many cases (some of which are collected in De Iacovo v Lacanale (1957) VR 553, at pp 558-559) in which it has been held that it is the duty of a judge, magistrate or other relevant decision maker to state reasons, that does not mean that a decision maker must give his or her reasons in every case. There is no "inflexible rule of universal application" that reasons should be given for judicial decisions. Whilst it is no doubt right to describe the requirement to give reasons as "an incident of the judicial process", it is subject to the qualification that it is a normal but not a universal incident - Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 667 per Gibbs CJ; 2. the content and detail of the reasons for decisions to be provided will vary according to the nature of the jurisdiction which the body in question is exercising and the particular matter the subject of the decision - Wainohu v New South Wales (2011) 243 CLR 181 at [56] per French CJ and Kiefel J; 3. the administration of justice in this regard requires a pragmatic and functional approach to the obligations imposed upon decision makers at first instance - Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [46] per Basten JA; 4. not only is the obligation not universal in nature, but it is variable in its content and whilst transparency in decision-making is an important value, it is not cost free, and may involve separate parameters of quantity and quality - Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] per Basten JA.
7. Murnane Carpentry was also a Home Building Act dispute. The Appeal Panel stated at [17]: In its reasons for decision of 12 August 2014, the Tribunal below makes no mention of fundamental facts such as the ambit and the content of the obligations undertaken by the appellant. The first step in the decision-making process of the Tribunal should have been to make findings of fact as to the terms of the contract between the appellant and the respondent. It appears that the appellant was in fact correcting the mistakes of other contractors. In our view it was necessary for the Tribunal to make clear findings as to the work that was undertaken by those other contractors, and then to make clear findings as to the work required to be undertaken by the appellant. Only once those findings were made would the Tribunal be in a position to determine whether or not there had been a breach of the terms of the appellant's obligations and any resultant damages. The Tribunal refers at length in its reasons to the failure of the appellant's expert to attend a meeting with the respondent's expert for the purpose of narrowing issues in dispute and to compile a joint Scott Schedule. Nonetheless, it decided to proceed with the hearing and, once it did so, was obliged to make the findings and give the reasons, required by s.62. With all due respect, it failed to do this, and this was an error of law.
8. We see no reason why the same principles should not apply to oral reasons delivered by the Tribunal; that is, we consider it a necessary part of the Tribunal's task, in giving oral reasons in a home building dispute such as the present, to make findings as to the following matters. 1. Who were the parties to the contract. 2. When the contract was formed. 3. What were the relevant terms of the contract. 4. Whether the contract was terminated and, if so, when. 5. What allegations of breach of contract the applicant is making, and what evidence, lay and expert, is relied on. 6. Whether the evidence establishes any of the alleged breaches and, where there is an evidential contest, the evidence preferred and the reasons for preferring that evidence. 7. Whether there are any available defences and, if so, what those defences are. 8. Whether the evidence establish any of the available defences and, where there is an evidential contest, the evidence preferred and the reasons for preferring that evidence.

Oral reasons for decision

1. We indicated above that we had listened to the sound recording of the hearing.
2. Neither party provided the Appeal Panel with the sound recording of the hearing, or a transcript of what occurred at that hearing. However, each party in their submissions referred to remarks made by the Member at the hearing, and to specific issues he considered, or did not consider. To take but one contentious example, we noted above that the Member stated in his written reasons that he had allowed $1,500, "on a fair and equitable basis", for the rectification of the verandah (or deck). The appellant's notice of appeal states that during the hearing the Member asked Mrs Stanford whether there was a monetary claim on the deck. The appellant says that Mrs Stanford replied no, but that when the Member started delivering his oral reasons for decision at the conclusion of the hearing Mrs Stanford "brought the decking topic up again and the member adjusted his judgement based on her comments". The appellant claims that Mr Moussa, who represented his company at the hearing, was not prepared for this (having understood that the claim had been abandoned) and was at a disadvantage. The respondents, in their submissions, submit that the Member misunderstood their cross claim, and that Mrs Stanford "respectfully corrected the Tribunal member and clarified what she had proposed during an earlier point matter what discussion in the hearing" in relation to the deck. In other words she submitted that at all times she was pursing that particular claim.
3. The appellant provided brief transcript evidence of certain exchanges which occurred during the hearing, which Mr and Mrs Standford responded to in their submissions. As both parties referred to what transpired during the hearing and have made references to what the Member said and did, we thought it appropriate we listen to a sound recording of the hearing, particularly the oral reasons for decision. Without the provision of the transcript of the proceedings or the sound recording it is impossible for the Appeal Panel to form a view about some of the submissions made. The "brief [written] reasons" accompanying the order are not the reasons for the decision, the oral reasons delivered at the conclusion of the hearing are the reasons for the decision made. Examination of the "brief [written" reasons] shows that the those reasons were simply a summary of the conclusions reached by the member; properly understood, these were not the Tribunal's reasons for decision.
4. In those circumstances we thought it appropriate to listen to the sound recording of the hearing and the oral reasons given by the Member. If we are incorrect to have done so, then the only record of the reasons for the order made is the "brief [written] reasons" accompanying the order. Those brief reasons, in light of the principles we have referred to above, are completely inadequate for their purpose. That alone would have constituted an error of law and we would have allowed the appeal.

Sound recording of the hearing

1. At the commencement of the delivery of the oral reasons the member stated "I will give a summary of my reasons with the sound recording, but my reasons are what I give here", (that is, orally). This oral statement confirms our view that that the reasons for decision were not the "brief [written] reasons" accompanying the order.
2. We note the following statements of the Member during the course of delivering his oral reasons. 1. The member "starts off" (his words) by stating that Moussa was in breach of ss 7, 10 and 92 of the Home Building Act. He then states that the "upshot" is that Moussa has a quantum meruit claim "at best". The Member does not give any reasons for those conclusions, save for saying "the provisions are absolute and you've got the trifecta". 2. The Member stated "this'd probably be about the worst judgment I've ever given". 3. The Member stated "I rather suspect my decision is not the end of the road". 4. The Member stated, on at least two occasions, that "my notes have let me down". 5. In reference to the claim for damages for the failure to provide home warranty insurance the Member stated "How do I assess that? I don't know". He then proceeded allow to $500 for this claim. 6. Initially, the Member made no allowance for any claim in relation to the verandah (or deck). Mrs Stanford asks about this and the Member initially comments that he had a "clear recollection" that she had abandoned that claim. Mrs Stanford disputed this. Initially the Member indicates that he can not now consider this issue, but then proceeds to do so, stating "you've put me in a terrible position", and that his decision was "going to be wide open to challenge" and "wide open to appeal". He then goes to allow "about $1,500", "on a fair and equitable basis", commenting that he had "gone back completely to the start". 7. After stating that "my reasons are what I give here", he says that those reasons were "muddled", that he agreed that that they were "muddled", and "rushed", although "originally, but not at the end".
3. When the sound recording is listened to objectively it is understandable that all parties might lack confidence in the Member's reasoning process. This is exacerbated by the failure of the Member to make the type of basic findings to which we have referred.
4. We also note there appears to be a clear error made by the Tribunal in relation to its conclusion that $500 should be allowed for the failure to obtain home warranty insurance. We also note that there seems to be arguable claims that some of the other allowances were against the weight of the evidence. However, it is not necessary to deal with these matters as we are of the view that the oral reasons are so inadequate that the appeal must be allowed.
5. In Akkari v Sartor [2015] NSWCATAP 79 at [48] the Appeal Panel noted the observations of Johnson J in Moloney v Collins [2011] NSWSC 628 at [63] to [64], made in the context of a civil hearing in the Local Court. His Honour said: 63 Failure to give reasons as required by law may itself disclose error of law: Pettitt v Dunkley [1971] 1 NSWLR 376; Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 at 278-279. However, the extent and content of the reasons required will depend upon the particular case and the issues under consideration. 64 The duty does not require the trial Judge to spell out in minute detail every step in the reasoning process or refer to every single piece of evidence. It is sufficient if the reasons adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings: Stoker v Adecco Gemvale Constructions Pty Limited [2004] NSWCA 449 at 41. It is essential to expose the reasoning on a point critical to the contest between the parties: Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 at [58].
6. In Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 McColl JA, with whom Ipp JA and Bryson AJA agreed, noted the following relevant principles. 1. The giving of adequate reasons lies at the heart of the judicial process. Failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice. 2. The extent and content of reasons will depend upon the particular case under consideration and the matters in issue: 3. While a judge is not obliged to spell out every detail of the process of reasoning to a finding, it is essential to expose the reasons for resolving a point critical to the contest between the parties. 4. The reasons must do justice to the issues posed by the parties' cases. Discharge of this obligation is necessary to enable the parties to identify the basis of the judge's decision and the extent to which their arguments had been understood and accepted. 5. Because a primary judge is bound to state his or her reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried. See paragraphs [57] to [59] and [66] and the various authorities there cited.
7. We are mindful that the role of the Civil and Administrative Tribunal is different to that of a Court. 1. An object of the Tribunal is to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible (see s 3(d)) of the Act. 2. The guiding principle to be applied the Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings (s 36(1)). 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 (s 38(4)).
8. Nevertheless, we consider that, fundamentally, the reasons, be they oral or written, must do justice to the issues posed by the parties' cases. For the reasons given above, we are unable to conclude that this occurred on this occasion.

Decision

1. For the above reasons, the Appeal Panel makes the following orders. 1. The appeal is allowed, and the orders made below quashed. 2. Remit the matter to the Consumer and Commercial Division of the Civil and Administrative Tribunal constituted by a member other than the member who made the original decision, to be determined in accordance with these reasons and otherwise according to law. 3. The appellant is to repay the $3,387.00 already paid to it by the respondents within 14 days of the publication of these reasons. 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: 25 May 2015