Applicant : Alan Rumsley Commercial Disputes Lawyer

Bulstrode v Trimble [1970] VicRp 104; [1970] VR 840

Filimon and Rimmer [2013] WASAT 13

Fox v Percy [2003] HCA 22; 214 CLR 118

Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272

1 On 11 September 2012, the Tribunal, constituted by Ms L Ward, a full time member, and Mr P Mittonette, a sessional member (original Tribunal), determined a complaint made by Mr Christopher Bombak and ordered Myran Holdings Pty Ltd (Myran), trading as Solomons Flooring, O'Connor, to pay Mr Bombak an amount of $14,150 by way of compensation for failing to carry out a building service in a proper and proficient manner. Myran now applies for leave to review that decision pursuant to s 58(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act).

2 As the reasons which follow disclose, the Tribunal has concluded that Myran should be granted leave to review the basis of assessment of the compensatory order that was made but that the application for leave should otherwise be dismissed.

3 Mr Bombak entered into a contract with Myran for the supply and installation of Polyflor Camaro Vinyl Plank flooring dated 26 February 2010. At that stage, the construction of Mr Bombak's dwelling into which the flooring was to be installed had not been completed. The installation was carried out during April 2011. Myran's case is that its installers warned Mr Bombak that the concrete slab substrate was not level and that Mr Bombak had the option of having the floor levelled before installing the flooring, but he chose not to do so. Mr Bombak disputes having been told anything about the unsuitability of the substrate until after the flooring installation was virtually completed.

4 Mrs Dawn Maree Bombak gave evidence of the dealings with the installers. The original Tribunal preferred her evidence, and specifically placed no weight on the evidence on one of the installers, Mr Daniel Hopkins. The original Tribunal accepted a quotation provided by Mr Bombak for the cost of removing the floor covering, sanding the subfloor to remove adhesive, levelling the subfloor and reapplying a vinyl plank flooring in an amount of $16,200, but deducted from that amount an estimate given by Myran's installer that the subfloor could have been levelled at the outset for a cost of $2,500. The deduction was made because, under the contract, if the issue had been raised, Mr Bombak accepted the responsibility for levelling the floor. The Tribunal added an amount of $450 to cover the cost of accommodation, taking the total amount awarded to $14,150.

5 Counsel for Myran contends that the original Tribunal erred in its assessment of the evidence and should have accepted Myran's version. Further, that, in assessing the compensatory award, the original Tribunal erred in relying on information provided by Mr Bombak by way of an explanation of the quotation when the original Tribunal had indicated that it would decide whether evidence would be required from the contractor who had provided the quotation, but did not do so, and simply acted upon the quotation. Further, that the original Tribunal had failed to follow established contractual principles for the assessment of damages.

6 Consequently, the determination of the leave application will depend upon whether the criteria for the grant of leave are met in relation to the following main issues.

1. Did the original Tribunal err in:
   1. deciding that little weight should be placed on the evidence of the witness, Mr Daniel Raymond Hopkins, and
   2. preferring the evidence of Mrs Bombak to that of Myran's witnesses?
2. Did the original Tribunal err in the assessment of monetary compensation awarded:
   1. by failing to apply contractual principles, and
   2. by relying on the explanation provided by Mr Bombak of the quotation relied on by him without the contractor who provided the quotation being called?

7 It will also be necessary to consider the criteria for the grant of leave to review the decision of the original Tribunal, and this, together with the above issues, will be discussed further below.

8 The following principles can be gleaned from the discussion of the applicable criteria for the grant of leave to review under s 58(2) of the BS(CRA) Act as discussed in Filimon and Rimmer [2013] WASAT 13:

1. It is necessary to show that the decision of the original Tribunal was wrong or attended with sufficient doubt.
2. It must be shown that if leave were not to be granted, the applicant would suffer a substantial injustice.
3. It will normally not be sufficient that the decision appealed from is apparently wrong or attended with doubt. Something more will need to be shown, such as that there is a significant question of law to be considered, or some other feature, which requires the consideration of the Tribunal to avoid a substantial injustice of leave were not to be granted.
4. The decisions of the original Tribunal are not to be read minutely and finely with an eye keenly attuned to the perception of error.
5. A broad view should be taken of all the material before the original Tribunal, and this Tribunal should be slow to grant leave to review or to allow reviews except in cases where, clearly, there is no discernible basis for the decision or, for example, where fundamental rules of natural justice have been breached.
6. Leave may be granted in respect of only some and not other grounds of the proposed review.
7. Having regard to the objects of the Tribunal, and because any review is by way of a hearing de novo, there is all the more reason to be particularly discerning about whether sufficient doubt exists to open the possibility of leave being granted.
8. In considering challenges to the weight of evidence, regard must be given to the expertise of the members of the original Tribunal.

Did the original Tribunal err in placing little weight on the evidence of Mr Daniel Hopkins?

9 The installers who carried out the work were Mr Mark Hopkins and his son, Mr Daniel Hopkins. Mr Mark Hopkins gave oral evidence at the hearing and, at the conclusion of that evidence, there was discussion about whether it was intended to call Mr Daniel Hopkins. The purpose of his evidence was obviously to corroborate the evidence of Mr Mark Hopkins. The discussion reflected a concern on the part of Mr Aveling, the representative of Myran, and Mr Mark Hopkins, about calling Mr Daniel Hopkins because it was explained that he had a slight mental incapacity (T:43­44; 11.09.12). The decision was made to call Mr Daniel Hopkins, and reliance was placed on his signed witness statement included in the book of documents (BOD). Mr Aveling then endeavoured to amplify that evidence by way of additional questioning. He was subjected to very limited cross­examination by Mr Bombak. The entirety of Mr Daniel Hopkins' evidence, after being called, warned about his obligation to give truthful evidence and, after referral to his witness statement, is set out below (T:45­46; 11.09.12):

WARD, MS: So you're 22 years of age and you signed a statement on 30 August. Mr Aveling, did you have any questions for Mr Hopkins?

AVELING, MR: Yes.

Daniel, can you tell us the truth what's happening on 5 April when you came to the house of Mr and Mrs Bombak who were there in the house, what the floor condition looks like, just gentle, slowly, can you tell them. Did you meet these people?

Did you meet the people, the two people there?­­­Yes, I did.

So when you came to the house how did you ­ did you see the floor condition? How it looks, the floor condition, was it good or bad, the floor condition, the concrete floor?

WARD, MS: If you can't remember - - -?---Sorry.

MITTONETTE, MR: Just say what happened that morning.

AVELING, MR: That morning. Actually went into the solicitor. Just say what happened that day. Don't be afraid. Just say something. Just tell the truth as you always told me the whole story. You can't?---The day we got there the concrete floor was pretty bad.

Pretty bad? So what did Mark ­ did he talk to the customer what's happening?---Yes.

Did he mention that the floor is no good, that there had to be extra screeding and all these things?­­­Yes.

So did Mark explain how much it will cost?­­­Yes.

What was the answer from Mr Bombak or Ms Bombak who were there, because I don't [know] who is there[?] Did they say that they have no funds to ­ the extra cost?­­­They had no extra money on them for the extra screeding and they said, 'Go ahead with the job and it may be (indistinct) vacant.'

Move in as soon as possible, yes, all right. Look, it's now up to Mr Bombak. I think that's enough for me to tell the truth.

WARD, MS: Mr Bombak, do you have any questions for Mr Daniel Hopkins?

BOMBAK, MR: Do you remember what day you started, Daniel, whether it was Monday or a Tuesday or a Wednesday or Thursday?­­­It was the Monday.

Do you remember seeing any electricians on the job?---No.

Would they have normally ­ allowed to have been there, any other tradies, while you and your dad are doing the work? Like, do you generally have tradies coming in and running amok on the concrete while you're trying to sand and screed it?

I'll rephrase it. If you're screeding the floor, you wouldn't allow anyone else to walk on it?­­­No.

Do you recall the carpet layers being there on the Friday?

Do they work for Henry as well? There was two carpet - - -

AVELING, MR: The last day of the week when we finished?­­­Saw no other contractors there.

BOMBAK, MR: Right. Nothing else from me.

WARD, MS: Thanks very much, Mr Daniel Hopkins. You're now free to go. Thank you.

10 The signed witness statement of Mr Daniel Hopkins corroborated the evidence of Mr Mark Hopkins in respect of aspects essential to Myran's case that he and his father had met Mr and Mrs Bombak on site on the first day on which work was to commence, that his father had informed Mr and Mrs Bombak that the floor needed to be levelled and that it would cost extra money to do so.

11 Both Mr Mark Hopkins and Mr Daniel Hopkins stated in their oral evidence that the work had commenced on a Monday morning.

12 Mr Bombak conducted the case in the role of an advocate. He chose not to give evidence. He called Mrs Bombak to give evidence. Her version differed from that of Mr Mark Hopkins and Mr Daniel Hopkins. She stated that the work commenced on Tuesday, 5 April 2011. She was certain of that because she said that she had an appointment south of the river that morning and was not able to be at the site for long (T:23; 11.09.12).

13 Later, during the cross­examination of Mr Mark Hopkins, Mr Bambok put to him that the work could not have commenced on Monday, 4 April 2011 because electricians were busy on that day installing downlights. An electrical safety certificate was provided to the original Tribunal dated 4 April 2011 describing the installation of lighting throughout the dwelling and which reflects the date of completion as being 4 April 2011.

14 Mr Aveling, under cross­examination by Mr Bombak, acknowledged that the date on which Myran had been requested to commence installation was 5 April 2011 (T:49; 11.09.12) and it will be observed that his first question to Mr Daniel Hopkins above was premised upon work having commenced on that date.

15 Mrs Bombak also testified that there had been no discussion during the first meeting between her and the installers concerning the finish of the concrete slab, and it was not until Friday, 8 April 2011, when Mr Bombak attended the site at the completion of the flooring installation, that Mr Mark Hopkins raised with him concerns about the finish of the concrete slab.

16 Counsel for Myran submits that the evidence of Mr Daniel Hopkins could not be rejected by the original Tribunal once it accepted his witness statement as effectively constituting his evidence in chief and in circumstances in which he had not been cross-examined on the detail of that statement.

17 In oral reasons for decision given shortly after the conclusion of the hearing, the original Tribunal stated as follows, in relation to this aspect of the matter:

Mr Mark Hopkins' son, Mr Daniel Hopkins, gave some evidence which tended to support his father's evidence. The Tribunal attaches little weight to Mr Daniel Hopkins' evidence, mainly because of the way in which matters were put to him. It appeared to the Tribunal that he was not speaking from his own independent recollection but rather being effectively led in relation to his evidence and in relation to his recollection of the events in April 2011.

18 When reference is made to the evidence given by Mr Daniel Hopkins, the following can be observed. Firstly, Mr Aveling put a leading question concerning whether he had met 'the people, the two people there?' Mr Aveling received an affirmative answer. When attempts were then made for Mr Daniel Hopkins to describe the floor condition or to say in his own words what occurred that morning, he was unable to say anything beyond that the concrete floor was pretty bad. Mr Aveling then resumed leading questions to which he received affirmative answers.

19 Mr Daniel Hopkins' inability to give independent evidence was self­evident. Mr Bombak limited his cross­examination to having the witness commit himself to the version that the work had commenced on the Monday, and that there were no electricians working on the day on which the work commenced.

20 In these circumstances, I do not consider that there is any error demonstrated in the conclusion reached by the original Tribunal to place little weight on the evidence of Mr Daniel Hopkins. His inability to describe in his own words what had occurred casts a real doubt on the extent to which any reliance could be placed on his written statement. Further, it is not the case that a court or tribunal must accept evidence which is not the subject of cross­examination, particularly if the evidence is contradicted by other evidence: Bulstrode v Trimble [1970] VicRp 104; [1970] VR 840 at 848 and the discussion in Cross on Evidence by JD Heydon (8th Australian edition, 2010) at paragraph 17460.

Did the original Tribunal err in preferring the evidence of Mrs Bombak to that of Myran's witnesses?

21 The essence of the submissions made on behalf of Myran is that the original Tribunal erred because its preference for the evidence of Mrs Bombak was not based on an assessment of the evidence against a consideration of contemporary materials, objectively established facts and the apparent logic of events consistent with the decision in Fox v Percy [2003] HCA 22; 214 CLR 118.

22 The original Tribunal's reasons for decision reflect that the Tribunal accepted that the installation commenced on 5 April 2011 based on the evidence of Mrs Bombak and Mr Aveling (page 6). The original Tribunal also found that only Mrs Bombak was present at the meeting with the installers on that date. In that regard, it was held that Mrs Bombak's evidence was clear that she was there for a period of just 10 ­ 15 minutes at around 7.30 am, and that the levelling of the floor was not discussed. Her evidence was accepted in its entirety because the original Tribunal found that she was a credible witness who gave her evidence clearly and in a straightforward manner, and because she did not seek to embellish any of her evidence and her evidence was consistent.

23 It is true that the original Tribunal did not base its findings on any contemporaneous objective material. However, it is clear that the electrical certificate referred to above establishes that electrical work was completed on 4 April 2011. It is of note that Mrs Bombak did not refer to the electrical work being undertaken on that date, which is perhaps an example of how she did not embellish her evidence. It was Mr Bombak who raised that issue through cross­examination and the certificate was tendered. Mrs Bombak's evidence is consistent with that objective material.

24 Further, during the course of the hearing, the original Tribunal confirmed that it had before it an email from Mr Rocky Rozario of Myran's, dated 25 October 2011 (BOD page 16 ­ T:34; 11.09.12). The date of that email is, of course, not contemporaneous, but it sets out a response to Mr Bombak's complaint at a much earlier date than the date of the hearing. That version differs in a number of important respects to the evidence which was given by Mr Mark Hopkins. It reflects that Mr Mark Hopkins had a lengthy discussion with Mr Bombak about the concrete pad which he described as one of the worst he had seen. The concrete pad had several large cracks right through it and was extremely uneven. Mr Mark Hopkins' exact comment was 'it looks like a BMX track'. This discussion was said to have occurred prior to the works commencing. No mention is made in this response of Mr Mark Hopkins going out to his motor vehicle to get a 2 metre straight edge in order to demonstrate to Mr and Mrs Bombak how unlevel the floor was, as stated in his written witness statement.

25 It is a matter for comment that both installers were adamant that the work had commenced on Monday, 4 April 2011, which was clearly demonstrated not to be the case.

26 The original Tribunal was not bound by the rules of evidence (s 32(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) and that its obligation in providing reasons for decision is to include the findings on material questions of fact, referring to the evidence or other material on which the findings are based (s 77(2) of the SAT Act). The degree of formality in which hearings are conducted will always depend on the nature of the case, whether the parties have legal representation and, if not, the sophistication of the parties. The parties had no legal representation in this case and information was provided to the Tribunal ­ such as the electrical safety certificate ­ without any formal proof. There was no challenge to the authenticity of that document.

27 It can therefore be concluded, firstly, that there was a sufficient basis on which the original Tribunal could reject the evidence of Mr Mark Hopkins based entirely on the evidence of Mrs Bombak and Mr Aveling of Myran, given that there was no objective material in the way of any contemporaneous record of when the job started and ended against which to test the evidence. Once that discrepancy was established and it became a choice of accepting either the evidence of Mr Mark Hopkins or that of Mrs Bombak, it was open to the original Tribunal to accept the latter's evidence. I am not satisfied, therefore, that any error on the part of the original Tribunal in respect of this matter has been demonstrated. In any event, examination of other material reveals significant discrepancies in the evidence of Mr Mark Hopkins as outlined above, so that even if any sufficient doubt could be demonstrated, there is a discernible basis for the Tribunal's decision which supports a conclusion that no substantial injustice would result if leave were to be refused on the basis under discussion.

Did the original Tribunal err in the assessment of monetary compensation by failing to apply appropriate contractual principles?

28 On behalf of Myran, it is emphasised that the express terms of the contract entered into between the parties placed the risk of increased costs for preparation of the substrate upon Mr Bombak. Yet the compensation order, it is submitted, goes beyond the ruling principle established in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272 that, where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation with respect to damages as if the contract had been performed.

29 It is then submitted that, for Mr Bombak to be put in the position he would have been, had the contract been performed, by being given the opportunity to consider options or alternatives to the flooring being installed on an uneven slab, Myran should be required to remove the vinyl planks, clean the floor (presumably a reference to removal of adhesive) and refund the price paid by the respondent of $7,055.

30 With respect, this proposed ground of review is misconceived on several bases.

31 The complaint determined by the original Tribunal was not a contractual claim for breach of contract. A contractual claim could only be made under the Home Building Contracts Act 1991 (WA) (HBC Act). The contract in question did not fall within the definition of a home building works contract under that legislation because the contract sum of $7,055 is below the prescribed amount of $7,500 (see s 3(1) of the HBC Act read with reg 2A of the Home Building Contracts Regulations 1992 (WA)). The complaint was one which therefore could only be dealt with under s 5(1) of the BS(CRA) Act in respect of a regulated building service as defined under s 3 thereof to include home building work carried out by a person for another person under a home building work contract or other contract or arrangement for gain or reward.

32 In those circumstances, common law principles for the award of damages do not apply, although they may be a guide to the extent appropriate, having regard to the circumstances of each case: see Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302 (Doric) at [22].

33 Further, there is no evidence upon which to base a conclusion that if the contract had been performed by Myran, giving Mr Bombak the opportunity to decide whether or not to proceed with the installation (because of the cost of levelling the substrate), the parties would have agreed not to proceed, so that compensation should be limited to the cost of removal of the vinyl planks, cleaning the floor and refunding the price paid. The course which has been followed by Mr Bombak in commencing these proceedings, if anything, points to the likelihood that he would have elected to have the floor levelled.

34 There is, on the face of it, nothing wrong with the methodology adopted by the original Tribunal in assessing compensation, save that it may be open to argue that there should be no deduction for the cost of levelling the substrate. This is arguable, because the finding of the original Tribunal stands that the option to consider levelling was not given to Mr Bombak and it could therefore be contended that he was entitled to a performance of the contract which resulted in the installation of a floor to an acceptable standard. It is also submitted on behalf of Myran that the compensatory order is based on the cost of installing a different product, resulting in betterment, for which there should be an adjustment to the award. The evidence before the original Tribunal did not establish that the product was any better. While the original Tribunal has not erred in any relevant respect, this is a matter which can be explored because of the basis on which leave will be granted, as discussed further below. Although, based on the principle discussed in Doric above, it will not necessarily follow that any betterment will result in a reduction of the final amount awarded. It will depend upon whether it is appropriate to make a deduction, having regard to the facts of the case.

35 As no error has been demonstrated on the part of the original Tribunal, leave will be refused in respect of this aspect of the matter.

Did the original Tribunal err in the assessment of monetary compensation by relying on the explanation provided by Mr Bombak of the quotation tendered by him without the contractor who provided it being called?

36 After Mrs Bombak had given her evidence, Mr Bombak indicated that he did not intend to give evidence so that he was able to close his case. The original Tribunal raised with him the need to address the compensation claimed. An exchange then occurred between the original Tribunal and Mr Bombak during which he provided information concerning the quotation from Joondalup Carpet Court dated 20 June 2012 (BOD page 104). The quotation is for $16,200 inclusive of GST and, by its terms, covers the supply of Harmony Artisan vinyl planks, adhesive and screed, and includes installation involving:

• taking up and removing the existing floor coverings;
• sanding the subfloor to remove adhesive;
• levelling the subfloor;
• application of the vinyl planking; and
• removal of furniture.

No breakdown was provided. The presiding member then informed Mr Bombak that it might be necessary to hear from whoever gave the quotation (T:30; 11.09.12). A further exchange then ensued during which Sessional Member Mr Mittonette endeavoured to clarify certain aspects of the quotation, and again, at the conclusion of that discussion, the presiding member stated:

WARD, MS: Perhaps we'll just leave it at the moment and we'll decide whether we need to hear from Carpet Court at a later stage. All right.

37 As already pointed out, the original Tribunal is entitled to act on information provided to it. But, in this instance, it was not clear to the parties that it intended to do so and, consequently, Mr Aveling had no say at all on the matter. If it was known that Mr Bombak was to give evidence, Mr Aveling was aware that he had a right to cross­examine Mr Bombak and no doubt he could have exercised that right as he had done with Mrs Bombak.

38 It is submitted on behalf of Myran that there was consequently no evidence before the Tribunal on which to properly determine the compensatory order. In circumstances in which it was not clear to either party that the original Tribunal would rely on the information provided, the criticism is justified in the sense that although there is information before the Tribunal, it is information upon which the original Tribunal could not fairly act without clear notice to the parties and, in particular, to Myran.

39 In the original Tribunal's reasons for decision, the point was made that Myran had been given the opportunity to provide evidence in relation to costings and had failed to do so. While that precludes Myran from putting forward any positive case concerning the appropriate cost, it did not prevent a proper testing of the costs claimed by Mr Bombak.

40 As the original Tribunal did not raise the matter again with the parties and simply proceeded to make its own assessment of the quotation in order to arrive at the amount to be awarded as compensation and, in doing so, relied on other information provided informally by Mr Bombak, it has denied natural justice to Myran. As the original Tribunal has erred in this respect and as the error goes to the entire amount of compensation ordered, it is clear that Myran will suffer a substantial injustice if leave to review this aspect of the decision is not granted.

41 For the above reasons, the Tribunal will cause an order to issue as follows.

1. The applicant is granted leave to review the decision of the Tribunal made on 11 September 2012 limited to the assessment of the compensatory order to which the respondent is entitled.
2. The application for leave to review the decision made on 11 September 2012 is in all other respects dismissed.
3. The matter is listed for a further directions hearing to program the review proceedings on 22 February 2013 at 2.30 pm.

I certify that this and the preceding [41] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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