On 29 October 2014 the Consumer and Commercial Division of the Tribunal (the Tribunal) dismissed the application of the applicant Palm Homes Pty Ltd (Palm Homes) against the respondent Kav's Constructions Pty Ltd (Kavs). The Tribunal found it had no jurisdiction to determine the matter.
Palm Homes seeks to leave to appeal from that decision. For the reasons that follow, we consider that leave to appeal should be granted, the appeal allowed, and in lieu of the order below dismissing the application an order made whereby Kavs pays Palm Homes $1,300.
[2]
Background
Palm Homes is a builder. The reasons below record that it brought proceedings against its subcontractor, Kavs, about the correct positioning of a concrete slab. Palm Homes claimed that the slab was in the correct position. Kavs claimed that it was not. Kavs proceeded to install the framework. Palm Homes then realised that termite treatment was required, which had not been applied prior to securing the bottom plate of the framework. After the bottom plate was firmly secured, it was lifted by a pest inspector. The Tribunal considered that this action rendered the work of Kavs defective. Therefore, the Tribunal reasoned Palm Homes had no evidence to demonstrate that Kavs' work was defective or not carried out with due skill and care.
Palm Homes sought only one order at the hearing below; an order for the return of a Honda generator, alleged to be in the possession of Kavs. The Tribunal found it had no power to make that order and dismissed the claim.
In addition to the proceedings commenced by Palm Homes, Kavs commenced proceedings against Palm Homes. In those proceedings Kavs sought an order that it be paid $3,500 for its work. Palm Homes had refused to pay the invoice on the basis that the work was defective. There being no evidence to substantiate the assertion of Palm Homes that Kav's work was defective, the Tribunal declined to make the order sought. Consequently Palm Homes was ordered to pay $3,500 to Kavs.
[3]
Notice of appeal
In its notice of appeal Palm Homes seeks to challenge the finding that Kavs' work had been rendered defective by the pest controller. In addition it sought that the order ordering it to pay Kavs $3,500 be struck out. Palm Homes says that the decision was against the only objective evidence available. It seeks leave to appeal on the basis that the decision was against the weight of the evidence.
Attached to the notice of appeal was a statutory declaration of John Smith, a statutory declaration of Glen Smith, a "to whom it may concern" letter, titled "statutory declaration" of Rod Walker. All these documents are dated 21 October 2014. In addition there is an invoice from Smithie's Carpentry Pty Ltd, number 0002, dated 3 July 2014.
The written submissions of Palm Homes address three issues: the defective works of Kavs; the quantum meruit claim of Kavs; and the generator. As to the first issue Palm Homes relevantly submits that there was no evidence before the Tribunal from a pest controller or Kavs as to which part of the frame was lifted to apply the pest treatment, and that Kavs was negligent in bolting down the frame prior to the final inspection. Palm Homes also says that as a result of the frame being laid incorrectly building was delayed by a month and that Palm Homes incurred extra expense in rectifying the defect.
As to the second issue, Palm Homes submits that Kavs had agreed to do all the carpentry work for $7,524. Palm Homes submits that if it is required to pay the $3,500 as ordered the total cost of the carpentry work will be $11,524, which is significantly above the budget. Palm Homes submits that it should not have to pay the $3,500 as the initial work was defective and the further work which Kavs had orally contracted to do was never completed.
As to the third issue, Palm Homes submits that "the Tribunal did have jurisdiction to make orders in relation to the generator. Its legal representative Mr Johnson noted that section 11 of the standard Home Building Application provides for an applicant to seek "an order to deliver, return or replace the specified goods as stated below to the approximate value of . . .".
He also notes that s 48A(1)(d) of the Home Building Act 1989 provides that:
"building claim" means a claim for:
(a) the payment of a specified sum of money, or
(b) the supply of specified services, or
(c) relief from payment of a specified sum of money, or
(d) the delivery, return or replacement of specified goods or goods of a specified description, or
(e) a combination of two or more of the remedies referred to in paragraphs (a)-(d).
We note that, in any event, the powers of the Tribunal in relation to home building claims relevantly are set out in s 48O(1) of the Home Building Act as follows:
(1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate:
(a) an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person,
(b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings,
(c) an order that a party to the proceedings:
(i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or
(ii) do or perform, or refrain from doing or performing, any specified act, matter or thing.
(2) The Tribunal can make an order even if it is not the order that the applicant asked for.
In our view these powers are sufficiently broad to encompass an order for the return of the subject generator. As it transpired, Mr Kavanagh, Kavs' director, gave evidence before the Tribunal that he no longer had possession of the generator. Accordingly, the question of the Tribunal ordering replacement or return of the generator did not arise.
[4]
Respondent's submissions
At the appeal hearing there was no appearance by Kavs. It had filed a Reply to Appeal which relevantly stated that leave to appeal should not be granted.
Kavs did not otherwise file any submissions.
[5]
Requirements for Leave to appeal
Schedule 4, cl 12 of the NCAT Act provides that an Appeal Panel may grant leave only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:
1. the decision of the Tribunal under appeal was not fair and equitable, or
2. the decision of the Tribunal under appeal was against the weight of evidence , or
3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 the requirements to establish a "substantial miscarriage of justice" were explained at [71], [79] and [84] as follows:
[71]. . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . .
[79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result . . . it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred."
If satisfied the appellant may have suffered a substantial miscarriage of justice the Appeal Panel still has a general discretion whether or not to grant leave. As was said in Collins v Urban at [84] ff:
The general principles derived from these cases can be summarised as follows:
(1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];
(2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
In its notice of appeal Palm Homes recognises that it requires the leave of the Appeal Panel for its appeal to proceed. It states that it is seeking leave to appeal as the decision was not fair and equitable, that the decision of the Tribunal was against the weight of the evidence, and also because evidence was not available that was not reasonably available at the time of the hearing. The evidence in this last category was said to be "[a] statutory declaration of carpenters; [a] letter from pest controller; [and an] invoice from Smithie's Carpentry Pty Ltd". This appear to be references to the statutory declarations of John Smith and Glen Smith both dated 21 October 2014 (the carpenters), a letter of Enviropest Pty Ltd dated 20 October (the pest controller) and an invoice of Smithies Carpentry Pty Ltd (Smithie's)dated 3 July 2014 in the sum of $7,500.
No reason was advanced why that evidence was not reasonably available at the time of the hearing. We note that "the carpenters" had both worked on the site, as had the pest controller. Smithie's apparently rectified the allegedly defective work of Kavs. The explanation may lie in the fact that the appellant Palm Homes did not seek any order at the hearing below other than an order for the return of the generator.
Further to the evidence attached to the notice of appeal, on 5 February 2015 Palm Homes filed a statutory declaration of Josip Purgar sworn 29 January 2015. In that statutory declaration Mr Purgar, a director of Palm Homes, who represented Palm Homes at the hearing below, stated in summary, that after Kavs commenced
"lifting the frame Kav's would come and go to do the job as they were working on other jobs at the same time. After Kav's had finished the frame and bolted it down they called me and I came to inspect it. When I got there and inspected it I noticed that on part of the frame I could see space between the frame and the slab. This alerted me that there was a problem.
6. On or about 9 June 2014 I called a surveyor, Barry Hughan of Landmark Surveying Services (Landmark) to survey the frame. He advised me that that frame was 50mm out on one side and 325 mm out on the other side on half the premises."
Mr Purgar goes on to say that while the frame was being laid by Kavs, Enviopest Pty Ltd attended to apply a termite treatment. In doing so he says that it lifted part of the frame "but that the part of the frame they lifted was on the half of the Premises that the frame was not out of alignment". Mr Purgar then sets out the costs of rectifying what he says is the defective work of Kavs. Attached to Mr Purgar's statutory declaration were various documents corroborating these assertions.
Again, we note that no explanation was given as to why Mr Purgar, who had represented Palm Homes below, did not give that evidence at the hearing. As we have noted, the explanation may lie in the fact that the appellant Palm Homes did not seek any order at the hearing below other than an order for the return of the generator.
We note that Mr Purgar also attached a copy of the sound recording to his statutory declaration. We have listened to that sound recording. It is clear that, as we have observed, the only order sought at the hearing by Palm Homes was an order in relation to the generator. The question of compensation for defective work was never raised.
Be that as it may, in the interests of fairness and justice we decided and stated during the appeal hearing that any fresh evidence sought to be relied on by Palm Homes should be admitted.
[6]
Consideration
Palm Homes asked the Appeal Panel was asked to consider three issues: the allegedly defective works of Kavs; the quantum meruit claim of Kavs; and the generator.
[7]
Defective work of Kavs
As we have noted, this issue was never raised at the hearing before the Tribunal. We do not think it fair to consider it now. As the plurality of the High Court of Australia noted in Coulton v Holcombe [1986] HCA 33 at [9]:
". . . in a recent decison of six Justices of this Court - University of Wollongong v. Metwally (No. 2) [1985] HCA 28; (1985) 59 ALJR 481, at p 483; [1985] HCA 28; 60 ALR 68, at p 71 - the Court said:
"It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so".
See too Drivas v Burrows [2014] NSWCATAP 87 where the Appeal Panel observed:
"32. The considerations favouring finality of litigation are at least as strong, and probably stronger, in the case of the Tribunal given the importance attached to the expeditious and inexpensive disposition of proceedings [under the] Civil and Administrative Tribunal Act (the Act).
33. Generally, a new point will not be allowed where the consequence would have to be a new trial because "evidence could have been given which by any possibility could have prevented the point from succeeding": Suttor v Gundowda [[1950] HCA 35; (1950) 81 CLR 418] at 438.3."
(emphasis in original)
In the circumstances we decline to consider whether any compensation ought to be awarded to Palm Homs on account of allegedly defective work of Kavs.
[8]
Quantum meruit claim of Kavs
Palm Homes submitted that it ought not to have to pay this order, as the work of Kavs was defective. This submission must be rejected. A party is entitled to recover payment for their work on a quantum meruit basis; that is reasonable payment for the services he or she provided or performed. In this respect we refer to Pavey & Matthews Pty Ltd v Paul [1987] HCA 5 at [158] per Deane J, who said that quantum meruit involved:
the payment of an amount which constitutes, in all the relevant circumstances, fair and just compensation for the benefit or "enrichment" actually or constructively accepted. Ordinarily, that will correspond to the fair value of the benefit provided (eg remuneration calculated at a reasonable rate for work actually done or the fair market value of materials supplied).
The relevant principles for a quantum meruit claim were explained in B P Exploration Co (Libya) Ltd v Hunt (No.2) [1979] 1 WLR 783 at pp 784-785. The Court (in this case the Tribunal) has first to ascertain whether the defendant (this case the respondent) has, by reason of something done by the plaintiff (in this case the appellant) in, or for the purpose of, the performance of the contract, obtained a valuable benefit. If so, then the Court, or Tribunal has to assess a just sum to award to the plaintiff in respect of his performance. Applying these principles, we see no reason to disturb the order made by the Tribunal.
[9]
Generator
We consider that the Tribunal erred in finding that there was no jurisdiction to make an order regarding the return of the generator or the payment of compensation for its replacement. Exhibit 1 tendered at the appeal hearing was an ebay advertisement downloaded on 20 March 2015 showing that a generator similar in age and condition to that of Palm Homes was available for sale for $1,300. At the hearing below Mr Purgar made it clear that the sole order he was seeking was an order that his generator be returned. Mr Kavanagh indicated that he no longer had possession of the generator. He did not dispute that the generator had been lent to Kavs by Palm Homes as claimed. We have set out above those sections of the Home Building Act which, in our view, authorize the Tribunal to make orders regarding the replacement of goods. In the circumstances, we consider that it is appropriate to grant Palm Homes leave to appeal in so far as the order concerning the generator is concerned, and to order that in lieu of the order of the Tribunal dismissing the application, order that the respondent pay the appellant the sum of $1,300.
[10]
Orders
The Appeal Panel makes the following orders:
1. Leave to appeal is granted in relation to the claim regarding the generator.
2. In lieu of the orders of the Tribunal dismissing the application, order that the respondent pay the appellant the sum of $1,300.
3. Otherwise dismiss the appeal.
4. The stay of the orders of 29 October 2014 is revoked.
We note that the effect to these orders is that Palm Homes is to pay the respondent $3,500 in respective of its quantum meruit claim, and that Kavs is to pay the Palm Homes $1,300 in respect of the generator. Both amounts should now be paid immediately. It is a matter for the parties whether they wish to reach an agreement offsetting one amount against the other.
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: 18 June 2015