Pollara v Mohammed (Civil Claims) [2015] VCAT 1748

1. The Respondents' application under section 75(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) is granted.

1. Ms Pollara filed her Application to commence this proceeding C2913/2015 on 9 June 2015. The Respondents are Suhail Mohammed and Amela Mahmic.

1. Mr Mohammed and Ms Mahmic had been the Applicants in proceeding D1030/2013, in which Ms Pollara was Respondent. That proceeding has been completed.

1. The commonality of parties in the two proceedings was noticed by Registry after C2913/2015 was filed, and on 15 June 2015 I made an Order to the effect that any objection by Mr Mohammed and Ms Mahmic to the proceeding continuing should be made promptly. On 29 July 2015 Mr Mohammed and Ms Mahmic filed an application for C2913/2015 to be dismissed under section 75(1) of the Victorian Civil and Administrative Tribunal Act 1998 ("VCAT Act"). That section provides:

(1) At any time, the Tribunal may make an order summarily dismissing or striking out all, or any part, of a proceeding that, in its opinion -

(a) is frivolous, vexatious, misconceived or lacking in substance; or

1. In substance Mr Mohammed and Ms Mahmic submit that proceeding C2913/2015 purports to be an appeal against the order of the Tribunal made in D1030/2013, which the Tribunal is unable to entertain.

1. After the s75 application was filed and served, Ms Pollara wrote to the Tribunal on 31 July 2015 seeking to clarify her application in C2913/2015 and in particular to state that the application was not an appeal, but that it contained new issues, namely an application for the imposition of a fine under section 136 of the VCAT Act, and a claim for damages for breach of a contract for the sale of land.

1. In these circumstances, in order to determine the s75 application it is necessary for me to analyse the issues that were determined in D1030/2013, and the issues which Ms Pollara seeks to raise in C2913/2015.

1. I note at the outset that at the hearing before me Ms Pollara attended in person, and made submissions with the assistance of her son who described himself as an architect who was also studying law. I asked Ms Pollara on several occasions whether she had obtained legal advice in relation to the s75 application and the matter generally, and she assured me that she had. I express my concern that, despite Ms Pollara's submission that C2913/2015 was not purporting to be an

appeal against the outcome of D1030/2013, Ms Pollara and her son asserted that there were deficiencies in that proceeding (which would give one the impression that she was seeking to appeal from D1030/2013) and made many sweeping allegations of fraud, corruption and unlawful conduct by various people. As I said in the hearing, I listened to the latter allegations to ensure that Ms Pollara had a reasonable opportunity to be heard but that my listening to them was not to be taken as an indication that I accepted any of the allegations as having any substance.

1. I also note that one of Ms Pollara's criticisms of the conduct of D1030/2013 was an allegation that the presiding member did not take certain issues into account, when my perusal of Ms Pollara's Points of Defence in D1030/2013 shows that she had not raised those issues.

1. The manner in which Ms Pollara's defence in D1030/2013 and her intended claim in C2913/2015 is expressed in documents filed with the Tribunal is somewhat obscure, which does not assist the process.

1. The claim of Mr Mohammed and Ms Mahmic was set out in Points of Claim dated 9 September 2013. In that document they alleged that Ms Pollara had owned the land and dwelling at 43 Henshaw Road Strathmore prior to 4 August 2009, that as an owner builder she had carried out domestic building work on the dwelling between 18 June 2007 and 3 August 2009, that pursuant to a contract of sale made 4 August 2009 she sold the property to them, that Ms Pollara was bound by warranties in respect of the domestic building work under section 137C of the Building Act 1983, and that she was in breach of those warranties. Mr Mohammed and Ms Mahmic claimed that there were defects in the building work which would cost $53,261.00 to rectify, and they claimed damages.

1. Ms Pollara's defence to the claim was set out in Points of Defence dated 22 December 2013. In this document Ms Pollara admitted that she had been the owner of the land and dwelling, that she obtained a building permit in 1994 and completed work in 1995, that she obtained a new permit in 2006 and completed a building extension in 2007, and obtained an Occupancy Permit in 2008. She admitted that she sold the property to Mr Mohammed and Ms Mahmic on 4 August 2009.

1. In paragraph 5 of the Points of Defence she said

(She) accepts that the property was sold and a contract of sale of real estate was entered into on the 4 August 2009 and (Mr Mohammed and Ms Mahmic) did indeed purchase the property after obtaining a full inspection and certification on behalf of (their) bank the National Australia Bank, known as a pre-purchase inspection report conducted by mortgage institutions prior to the issue of unsecured loans exceeding $550,000.00.

1. In paragraph 6(b) she pleaded that she warranted that all materials used in 2006 2007 and upon settlement in 2010 were good and suitable for the purpose for which they were used, and in paragraph 6(c) she said

(She) accepts without issue that all works carried out by them the owner builder and associated contractors complied with all legal requirements including the generality of this warranty, this act and regulations.

1. In the balance of the Points of Defence Ms Pollara referred to an expert report from Mr Simpson of Build Check, and she denied that the works were defective.

1. In the particulars subjoined to paragraph 7(c) Ms Pollara stated

As a consequence of the existence of the extensive amount of alterations and works initiated by (Mr Mohammed and Ms Mahmic) and (their) contractors we have determined that the building structure has been modified to the extent that warranty limitations now apply. Water egress as outlined in our report has evidently been caused by (Mr Mohammed and Ms Mahmic's) non-compliance to our warranty / the implied warranties and to standard building regulatory requirements. ... The certified balcony at the time of contract of sale has extensively been demolished and removed and as identified in (Mr Simpson's) report is now in breach of all building regulations as identified.

1. Ms Pollara alleged that the work on the balcony was done in October 2010, and that the balcony area was approximately 65% of the total building area. She asserted that this in effect voided the statutory warranty.

1. In a subsequent paragraph, mistakenly numbered "(a)", Ms Pollara denied the alleged cost of rectification.

1. This same document also purported to contain a counterclaim, however no counterclaim was recognised. This is because Ms Pollara failed to pay the filing fee on a counterclaim, despite correspondence from the Registry advising her of the need to do so, and because the document did not properly plead a counterclaim. That is, in the area where a legal practitioner would set out the "prayer for relief", Ms Pollara said she was claiming damages including defamation against the architectural draughtsman, and costs incurred, printing, copying, transportation to site and VCAT. This was a list of claims or expenses, with no explanation as to the facts alleged or legal principles relied upon. These were not counterclaims at all. Ms Pollara had the opportunity to pay the filing fee on a counterclaim, and to file a proper pleading if she sought to bring a counterclaim, but she did not do so.

1. Proceeding D1032/2013 was determined in favour of Mr Mohammed and Ms Mahmic on 22 July 2014. The Tribunal issued orders with written reasons and, particularly because Ms Pollara says she is not seeking to appeal, there is no need to set out the reasons in any detail. Suffice to say that on 22 July 2014 the Tribunal determined the proceeding under section 78 of the VCAT Act for an amount of damages to be assessed, that on 17 October 2014 ordered Ms Pollara to pay $32,231.55, and that after a hearing in relation to costs and interest conducted on 19 December 2014, by Order made 20 January 2015 the Tribunal ordered Ms Pollara to pay interest and costs fixed at the modest sum of $1,567.58. It is common ground between the parties that Ms Pollara has paid the sums.

1. In the hearing before me Ms Pollara said that she applied in this new application for orders to be made against of Mr Mohammed and Ms Mahmic under section 136 of the VCAT Act, and for damages of $78,500.00 for breach of the contract of sale.

1. I should dispose of the section 136 matter first. It is misconceived. The section provides that a person must not knowingly give false or misleading information to the Tribunal or a registrar, and then sets out the relevant penalties. Clearly, the section creates a criminal offence. If a charge was brought under that section it would be heard and determined by a Court. The Tribunal does not have jurisdiction to hear such a criminal charge. It is a misunderstanding of section 136 to say that Ms Pollara can bring an application under it. The decision of Judge McNamara of the County Court, then sitting as a Deputy President of the Tribunal, in Nellaton Pty Ltd v Donawa Pty Ltd [2009] VCAT 828 was referred to me and I accept His Honour's comments in paragraph 6 of that decision.

1. Ms Pollara said that her claim for damages arose as follows. She had obtained an appraisal of value of Henshaw Road at $1.45 million, but she had agreed to accept the lower price of $1.22 million under a special condition in which Mr Mohammed and Ms Mahmic released her from the statutory warranties in consideration of that price reduction.

1. The manner in which this is put in Ms Pollara's Points of Claim filed in C2913/2015 is quite unclear, as it is buried within other text. Nevertheless by giving the document a very generous reading I can discern the claim in the following paragraphs of the document:

1. (Mr Mohammed and Ms Mahmic ) entered into a contract to purchase the real estate below the appraisal asking price of $1.45 million. (They) negotiated the amount to reflect (their) own building inspection report and (Ms Pollara's) defect insurance notification report, which identified areas that due to wear would require regular maintenance, (Mr Mohammed and Ms Mahmic ) have misled the Tribunal and others to stake a claim against a contract amount.
2. (Mr Mohammed and Ms Mahmic) are now in breach of the contract of sale since the contract under section 31 Sale of Land Act 1962 advises that a signed contract entails [sic] both parties to seek remedy if one party is in breach either directly or indirectly, in which case (Ms Pollara) has a right to claim the negotiated sale price due to further losses incurred by [ie, because of] (Mr Mohammed and Ms Mahmic's ) failure to follow the rules of the contract and the rules of the courts by declaring all information and not deceiving the Tribunal or other parties to obtain a financial gain through deceptive means.

1. In other words, it is said, Ms Pollara having accepted $78,500.00 less in return for being released from the statutory warranty, she says she is entitled to be paid the $78,500.00 because Mr Mohammed and Ms Mahmic did not honour that release.

1. I asked Ms Pollara to show me the special condition in the contract of sale containing the release, and she explained that she had not brought the document with her. She said that it was contained in the section 32 statement under the Sale of Land Act 1962, which I said would be surprising as section 32 statements are usually prepared long before the sale price is agreed. To this Ms Pollara replied that the section 32 statement and contract of sale were prepared on the same day. Counsel for Mr Mohammed and Ms Mahmic produced what he said he understood to be the section 32 statement, but it was an incomplete copy and was not of assistance. I will assume for present purposes that the contract of sale did contain the special condition. That said, section 137C(3) of the Building Act 1993 would only allow such a special condition to have effect as a release, in relation to defects of which Mr Mohammed and Ms Mahmic were aware, or ought reasonably to have been aware, at the date of the contract of sale.

1. I am satisfied that this claim for $78,500.00 was not articulated in the Points of Defence in D1032/2013, so that Ms Pollara is not literally re-litigating an issue. That said, there is a question as to whether "Anshun estoppel" would prevent Ms Pollara from now bringing the claim. Briefly, Anshun estoppel refers to the principles enunciated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589. A final judgment by a Court or Tribunal may affect subsequent proceedings between the same parties in the following ways:

(a) The judgment extinguishes any cause of action which is the subject of the decision. If established, the cause of action merges in the judgment, so that no further proceedings may be brought as between the parties to enforce that particular course of action. This is referred to as res judicata.

(b) The judgment is also a conclusive determination not only of the ultimate finding in the case but also of all the issues necessary to the decision. As such, an issue of fact or law so determined cannot afterwards be raised between the same parties in subsequent proceedings brought to pursue some other claim or cause of action. This is referred to as issue estoppel.

(c) The decision may preclude the parties from raising in future proceedings causes of action or issues which they could and should have raised in the former litigation. This extension of the doctrines of res judicata and issue estoppel is referred to as Anshun estoppel.

(d) An attempt to re-litigate an issue resolved in earlier proceedings may, depending on the facts, involve an abuse of process by re-litigation, even in the absence of an estoppel or res judicata.

1. The Tribunal does not have inherent jurisdiction. It only has jurisdiction which is conferred upon it by statute.

1. Jurisdiction is not conferred in respect of this intended claim for $78,500.00 by Australian Consumer Law & Fair Trading Act 2012 (Vic) ("ACL&FTA"), because that claim is not a "consumer and trader dispute" within the meaning of sections 182 - 185.

In this Chapter a consumer and trader dispute is a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to a supply or possible supply of goods or services.

1. The sale of an interest in land, such as took place as between Ms Pollara and Mr Mohammed and Ms Mahmic, is the supply of a "service". Significantly, for a dispute arising from the sale of a service to be a "consumer and trader dispute", and thus within the Tribunal's jurisdiction, the service must fall within the definition of that word, which - in section 2 of the Australian Consumer Law (Vic) - requires it to be conducted "in trade or commerce".

1. The relevant part of the definition of "services" is as follows

(a) any rights (including rights in relation to, and interest in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce...

1. Case law makes it clear that a private citizen (such as Ms Pollara), as opposed for example to a 'developer' of land, does not act in trade or commerce when selling their own home. In Argy v Blunts and Lane Cove Real Estate Pty Ltd (1990) 26 FLR 112, Hill J said, at page 129

The question to be determined is whether the owner of a house by selling it does so in trade or commerce. It could scarcely be said that a person who sells his home, whether by private treaty or by auction and whether he conducts the negotiations personally or through a real estate agent, is undertaking what he does in the course of trade or business, or in a business context.

1. It follows that Ms Pollara's intended claim for $78,500.00, based on an alleged breach of the contract of sale of land by Mr Mohammed and Ms Mahmic, is not a "consumer and trader dispute" and so is not a claim which the Tribunal has jurisdiction to hear under the ACL & FTA.

1. The Tribunal does have jurisdiction to hear the claim, though, under the Domestic Building Contracts Act 1995, section 53(1) of which confers jurisdiction on the Tribunal where there is a "domestic building dispute". That expression is defined in section 54, relevantly as follows

(1) A domestic building dispute is a dispute or claim arising -

(2) For the purposes of subsection (1), a dispute or claim includes any dispute or claim in negligence, nuisance or trespass but does not include a dispute or claim related to a personal injury.

(3) A reference to a building owner in this section includes a reference to any person who is the owner for the time being of the building or land in respect of which ... domestic building work was carried out.

"Builder" is defined in section 3(1) as follows

builder means a person who, or a partnership which -

(b) manages or arranges the carrying out of domestic building work; or ...

1. In proceeding D1030/2013, Mr Mohammed and Ms Mahmic were the "building owners" and Ms Pollara was the "builder", within the above definitions, and the claim arises in relation to "the carrying out of domestic building work".

1. In proceeding C2913/2015 Ms Pollara claims that in breach of a special condition of a contract of sale of land, Mr Mohammed and Ms Mahmic have not honoured a release of a statutory warranty. Even though the claim is based on a contract of sale it is still between Ms Pollara, to whom the statutory warranty applies, as the "builder" of "domestic building work", and Mr Mohammed and Ms Mahmic as the "building owners." The words "in relation to" in s54(1)(a) are wide, and I am satisfied that this claim is "in relation to" the carrying out of domestic building works.

1. It becomes necessary, then, to consider whether Ms Pollara is prevented by Anshun estoppel from continuing with proceeding C2913/2015.

1. Ms Pollara could have made her claim of breach of the contract of sale of land in proceeding D1032/2013. The contract was made in August 2009. The defects which Mr Mohammed and Ms Mahmic alleged were clear, and Ms Pollara had even obtained her own expert's report in relation to them. Nothing prevented Ms Pollara, in 2013, of alleging the breach of the contract of sale of land in her Points of Defence, or by way of Counterclaim.

1. As liability was not determined in proceeding D1032/2013 until July 2014, it can be assumed that for at least some months after December 2013 Ms Pollara could have applied for leave to amend her Points of Defence to include that matter, or to pay the filing fee to enliven the Counterclaim. Yet she did not do so.

1. In Anshun, Gibbs CJ, Mason and Aickin JJ[1] said that a person seeking to bring a new proceeding (like Ms Pollara in C2913/2015) could not do so if it was unreasonable. Their Honours expressed themselves in the negative, saying: "... we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it". I point out that it matters not that in C2913/2015 Ms Pollara is seeking to make a claim in the second action, rather than to argue a defence. The quoted passage is better understood as meaning that if it was unreasonable of Ms Pollara not to raise the claim of breach of the contract of sale of land in proceeding D1032/2013, then she is prevented ("estopped") from doing so in C2913/2015.

1. As to how the Tribunal is to decide whether or not Ms Pollara acted unreasonably, their Honours said: "Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding".

1. Their Honours said that it was important that the Court not be put in the position where it might give conflicting judgments and they said: "The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgements is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the

same matter as a foundation for a cause of action in a second proceeding. By "conflicting" judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction".

1. Their Honours said the following, in relation to the particular case they decided, and their statement is of equal application to Ms Pollara: "The matter now sought to be raised... was a defence to Anshun's claim in the first action. It was so closely connected with the subject matter of that action that it was to be expected that it would be relied upon as a defence to that claim...".

1. There is no doubt that Ms Pollara's allegation of breach of the contract of sale of land was closely connected with the subject matter of proceeding D1032/2013. I conclude that it was unreasonable of Ms Pollara not to raise it in that proceeding and accordingly I find that she is estopped from raising it in proceeding C2913/2015.

1. In addition, a plain reading of Ms Pollara's Points of Claim filed in C2913/2015 show that she does purport to appeal from the outcome of D1032/2013. Her submissions in today's hearing to the contrary are unconvincing. I refer to the allegations in these paragraphs as examples. Some of them seem to me to imply an assertion that the Tribunal erred in law by being misled, and one of them expressly calls the proceeding an "appeal":

1.1, 1.2, 4 and 5 Mr Mohammed and Ms Mahmic misled the Tribunal.

1.3 "The evidence at hand" is contrary to the evidence given by Mr Mohammed and Ms Mahmic.

2 "The appeal lodged is to remedy the contract of sale breach and prevent any further vexatious and misleading claims by (Mr Mohammed and Ms Mahmic), which is the purpose of this application".

1. The Tribunal simply cannot hear an appeal from its own decision. To the extent that Ms Pollara has purported to appeal in C2913/2015, the proceeding is misconceived.

1. There is one more point. In the hearing Counsel for Mr Mohammed and Ms Mahmic produced a copy of the Magistrates Court Complaint issued by Ms Pollara against Mr Mohammed and Ms Mahmic, numbered F12638606. In accordance with Magistrates Court procedure the Complaint contains a Statement of Claim and whilst it again is not clearly expressed, it does cover the same ground as Ms Pollara's intended claim for $78,500.00. I quote the following paragraphs of the Statement of Claim

1. (Ms Pollara) seeks the amount of $78,500.00 plus penalty interest on interest incurred as a consequence of (Mr Mohammed and Ms Mahmic's) now Breach $53,256.34 as identified part two of the standard form of contract...

1. (Mr Mohammed and Ms Mahmic) entered into a contract of Sale for the sale of land, the negotiated contract amount was pending the satisfaction of the subsequent inspections and required by law documentation.

1. It is under these conditions that we claim that (Mr Mohammed and Ms Mahmic) have breach the contract negotiated amounts to reclaim those amounts through another jurisdiction. Therefore the amount in default is the deductions in contract of sale listed amount.

1. (Mr Mohammed and Ms Mahmic) deliberately orchestrated and misled others courts to gain a financial advantage through deceptive means by not disclosing the special conditions of a contract of sale ...

1. Ms Pollara cannot bring two sets of legal proceedings in relation to the same claims. Were Ms Pollara to continue to prosecute her Magistrates Court proceeding, it would be appropriate for the Tribunal to strike out C2913/2015 as being an abuse of process.

1. In these circumstances I am satisfied that proceeding C2913/2015 is frivolous, misconceived, lacking in substance and an abuse of process and that it is appropriate to summarily dismiss the proceeding.

[1] Passages are quoted from paragraphs 37 - 42 of the report published on Austlii