Stevanovski v CLK Plumbing Pty Ltd

NCAT Appeal Panel|2016-09-09

REASONS FOR DECISION

On 11 November 2015 Zora Stevanovski and Mario Stevanovski (the applicants) lodged with the Tribunal a home building application which sought the following work orders: 1. An order to do work or services as stated below to the approximate value of $2,000 - $ ……. 2. An order to supply the specified services (listed below) to the approximate value of $2,000 - $10,000. 3. An order to deliver, return or replace the specified goods as stated below in the approximate value of $2,000 - $5,000.
The work or services sought by the applicants were:

Completion of work as per contract.
Rectify any defects caused.
Certify all work.

We have left a blank in the approximate value of the first work order as it is difficult to read that handwritten amount. It may have been $7,000, it may have been $10,000.
Attached to the home building application was the specification of 7 orders sought by the applicants and the reasons why those orders were sought. Those reasons were as follows: In 2011 CLK Plumbing entered into an agreement with my-self an owner builder to carry out plumbing works for a new house (creating a detached dual occupancy). CLK Plumbing did works in stages and also received progressive payments to the stage worked. Please note that the last stage paid for and worked on by CLK plumbing is incomplete with respect to the payment made and in addition my understanding is that it has been completed in a poor workmanlike manner clearly falling short of an acceptable standard. I made several attempts to call the plumber in order to complete the job after he did some work at the sewer stage. Every time he replied that he is way too busy at the time to come back right now and or he is going on a long holiday. The last time I spoke to him prior to this year he instructed me to complete everything else first and then he would come and complete whatever he had remaining. This was due to everything he had remaining was external wouldn't affect/impede anyone else's work. However, after getting in contact with him earlier this year to come and complete the work he stated he couldn't for a number of reasons. Firstly, he had a problem with connecting the sewer to the junction; secondly that he is way too busy and finally that he doesn't work in the Rockdale area anymore. Apparently he only comes out as far as Padstow only. Further clarifying the problem that CLK Plumbing is referring to the point above. CLK Plumbing attempted to complete the stage relating to the sewer. He has found that this could not be achieved due to the fact that his fall on the sewer pipe fell well below the pipe of a storm water easement that exists between the house and the boundary trap. At the time he stated that he will fix the problem next time he comes out and that there are other ways to sought (sic) out the problem. I have now recently found out that this is not the case and that the stormwater pipe will be an issue when connecting to the sewer. A new sewer boundary trap was installed by another plumber several years before CLK Plumbing started work on site and the location of the trap is on the properties rear boundary line.

Notice of appeal

On 9 June 2016 Mr Stevanovski (the appellant) lodged a notice of appeal with the Tribunal. On 10 June he lodged another notice of appeal. Written on one of the copies of this later notice of appeal were the words "Amended notice of appeal. Please use this version." Written on another copy of the later notice of appeal were these words: "Version 2 use this document."
The first notice of appeal is apparently signed by the appellant and is dated 4 June 2016. The second notice of appeal is also apparently signed by the appellant and it is also dated 4 June 2016.
The two versions are identical except for some minor additions to the second document. Those minor additions are not presently relevant in this appeal.

Grounds of appeal

The grounds of appeal run for approximately five pages. For present purposes it is unnecessary to set out the detail of the grounds of appeal. It is sufficient to set out the following summary.
The orders challenged were that the contract was abandoned and that the respondent was released from its obligations under the contract.
It was said in the grounds of appeal that there was an error in law and that the Tribunal had found that the contract was abandoned. It was also said that if it were accepted by the Appeal Panel that the contract was abandoned, then it was voidable as opposed to void ab initio and that the appellant was entitled to be heard "on the grounds of defective or incomplete works due to the negligence or lack of diligence on the part of" the respondent.
In the alternative it was submitted that the decision of the Tribunal should be set aside and reconsidered on the basis of compensation for incomplete and negligent work.
It was said there was an error in fact and the following part of paragraph [56] was then quoted: The evidence establishes that there was no contact between the parties in the period from 5 November 2011 until June/July 2015. Mr Stevanovski's evidence was that he tried to contact Mr Kairouz by telephone in early 2012 but was unsuccessful. In June/July 2015 he tried again but was unable to speak with him. He decided to send him an email on 8 July 2015 to which Mr Kairouz responded on the same day. The grounds of appeal continued as follows: Mr Stevanovski's evidence in fact was that he attempted to contact Mr Kairouz and get him back to rectify the sewer connection and completion of the house. He was only unsuccessful in getting him back not in contacting him. Mr Stevanovski submitted phone records into evidence where there was contact by himself.
The grounds then set out what the appellant claimed to be relevant evidence and it is unnecessary for the Appeal Panel to detail that evidence at this time.
The grounds then referred to two other paragraphs in the Tribunal Member's reasons for decision and set out submissions as to why those paragraphs should not be accepted.
The next ground of appeal was described as "error in weight" and the appellant set out reasons why evidence relied upon by the appellant should have been given more weight by the Tribunal Member.
The last ground of appeal was to the effect that leave to appeal should be granted on the basis of evidence which was not led by the appellant in the initial application before the Tribunal.
The notice of appeal then set out the orders that the appellant said the Appeal Panel should make. They were to the effect that the contract remained on foot and that the respondent failed to perform its obligations thereunder. In the alternative it was submitted that an order should be made that an amount of compensation/damages/costs should be made in favour of the appellant due to the alleged negligence of the respondent.
The notice of appeal alleged that the decision was not fair and equitable and the reasons why that submission was made were set out.
The notice of appeal alleged that the decision was against the weight of evidence and set out what the appellant submitted was the evidence which the Tribunal should have given more weight to and the reasons why.
The new evidence referred to above was described in more detail on page 13 of the notice of appeal and the reasons why the appellant submitted that that evidence was not available at the time of the hearing before the Tribunal Member were set out.
The respondent did not take any issue with the fact that two notices of appeal had been lodged by the appellant.

S38 (4) Civil and Administrative Tribunal Act and the grounds of appeal

As a result of directions given by the Appeal Panel on 18 April 2017, the appellant provided two further copies of the transcript of the hearing before the Tribunal Member on 8 February 2016 and a copy of the recording of the hearing before the Tribunal Member. The Appeal Panel has read the transcript and there is no reference in it to the question whether the contract between the parties had been abandoned. This is consistent with the statements made by the appellant during the appeal hearing on 9 September 2016 to the effect that abandonment was not raised by the Tribunal Member during the hearing of the application. Mr Kairouz, who represented the respondent before the Tribunal Member and the Appeal Panel, when asked by the Appeal Panel, when was abandonment first raised, said he did not recall.
The question of what grounds of appeal can be discerned in a particular case has been recently considered by Appeal Panels of the Tribunal (see for example Kahn v Kang [2014] NSWCATAP 48 and Cominos v Di Rico [2016] NSWCATAP 5).
Those cases involved self-represented appellants and in each of them reference was made to the obligation imposed upon the Tribunal by s 38 (4) of the Civil and Administrative Tribunal Act 2103 (NSW) (the Act), 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.
In Cominos reference was also made to the guiding principle in s 36 (1) of the Act. In that case the Appeal Panel said, at [13]: It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal.
When the Appeal Panel takes into account its obligations referred to in ss 36 (1) and 38 (4) of the Act and the statements made by the appellant to the Appeal Panel on 9 September 2016 to the effect that abandonment was not raised by the Tribunal Member during the hearing of the appeal (see par [23] above), the Appeal Panel is of the view that the statement in the notice of appeal that the appellant challenged the order that the contract was abandoned, is sufficient to raise as a ground of appeal that the Tribunal denied the appellant procedural fairness when it found that the contract was abandoned without giving the appellant notice that it was considering making such a finding.
A denial of procedural fairness is an error of law. The appellant may appeal as of right on a question of law (s80 (2)(b) of the Act) and does not require the leave of the Appeal Panel to rely upon such a ground.
The question whether there had been an abandonment of the contract was not a question raised by the home building application nor was it raised during the hearing of that application. The parties had not been given notice that the Tribunal Member was giving consideration to the question whether the contract had been abandoned. In basing his decision on the finding of abandonment of the contract, which was not a ground relied upon by any of the parties nor raised at the hearing, the Tribunal Member denied the parties procedural fairness (Kioa v West (1985) 159 CLR 550 at 587, Mason J; [1985] HCA 81).

What follows from the denial of procedural fairness?

That there has been a denial of procedural fairness does not necessarily mean that the appellant succeeds on this appeal. If it were to be concluded by the Appeal Panel that the denial of procedural fairness made no difference to the outcome of the proceedings, the appeal on that ground would be dismissed (Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57 at [4], Gleeson CJ. See also at [131] where Kirby J said that once the applicable breach of procedural fairness was proved, the victim of the breach was ordinarily entitled to relief and it is only where an affirmative conclusion is reached, that compliance with the requirements of procedural fairness could have made no difference to the result, that relief will be withheld. His Honour also said that the High Court had emphasised that such an outcome will be a rarity; it will be no easy task to convince a court to adopt it; and this will especially be so where the issue concerns the acceptance or rejection of the testimony of a witness at the trial).
All that the appellant needs to show in order to succeed on the appeal because of a denial of procedural fairness is that the denial deprived him of the possibility of a successful outcome. In order to negate that possibility it would be necessary for the Appeal Panel to find that a properly conducted application could not possibly have produced a different result (Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145 and 147; [1986] HCA 54).

Abandonment

Although the parties did not put evidence before the Tribunal Member directed to the question whether the contract was abandoned, there was in fact evidence in the telephone records tendered by the appellant, in the evidence given by the appellant and in the statutory declarations made by Nikola Stevanovski, also tendered by the appellant, which show that the denial of procedural fairness deprived the appellant of the possibility of a successful outcome on the issue of abandonment.
Page 9 of the transcript of the hearing before the Tribunal Member records the appellant informing the Tribunal Member that: he made several attempts to get the respondent to come and finish the work, but the respondent was always too busy; the appellant had family issues at home; the respondent instructed the appellant to finish up everything and if he had a chance to come over he would come over and do it. At page 48 of the transcript the appellant gave evidence that the respondent was stalling and referred to the telephone calls he had made to the respondent. At page 81 the appellant gave evidence that he kept trying to get in contact with the respondent on multiple occasions. Also at page 81 the appellant gave evidence that the most recent occasion he had asked the respondent to come back would have been "April, May this year" (he must have meant April, May 2015) but Mr Kairouz was just delaying until Fair Trading got involved midyear.
In the statutory declaration of Mr Nikola Stevanovski declared on 3 January 2016 he, in effect, stated that after the new year (which the Appeal Panel takes as being January 2012) Mr Kairouz kept saying that he was still busy and that this kept on going for about six months before Mr Kairouz told Mario Stevanovski that Mario should keep going on with the build due to it not affecting anything that he (Mr Kairouz) had left to do. Mr Nikola Stevanovski declared that Mr Kairouz stated that when it was all completed, Mr Mario Stevanovski should call him and he would come and finish connecting what was left to do - the sewer, gas connections plus gas and water to the front connection points. The declaration went on to state that this all happened telephonically in Mr Nikola Stevanovski's presence and that before Mr Kairouz got off the telephone he had assured the two Mr Stevanovskis that this was the case and that his friend had checked and the pipe could go under the stormwater pipe. Mr Nikola Stevanovski stated they all agreed to what Mr Kairouz recommended only due to the family going through some hardship at the time whilst this was all happening. He said the severity of this issue outweighed the plumbing issue and "due to us not being in a hurry to complete the house being owner-builders we accepted what Charlie proposed."

Unfinished and defective work

So far as the appellant's claim in respect of alleged unfinished and defective work is concerned, page 3 of the transcript records the appellant alleging defective and incomplete work and page 4 of the transcript records the appellant alleging unfinished work.
Whether the work on the sewer is properly described as incomplete or defective, is not presently to the point. The appellant's claim is that the sewer work has not been completed.
The appellant had produced at the hearing before the Tribunal Member two quotations from C.N.R. Civil Pty Ltd one dated 28 December 2015 and the other 15 January 2016. In each the quoted sum was $11,000 plus GST. The quotation dated 28 December 2015 did not give a breakup of the price of the individual items whereas the quotation dated 15 January 2016 did do so. Each quotation included the following opening words: "Call out to install house plumbing works to finish off existing plumbing by other plumber." The work involved in each case included connection to a new sewer sideline but not construction of the sideline itself.
The appellant had also produced at the hearing before the Tribunal Member another quotation by C.N.R. Civil Pty Ltd dated 28 December 2015 to "Supply and install New 150 mm sideline from the rear lane of property. Install new line under existing stormwater pipe." The price quoted was $9,750 plus GST.
At pars [51] - [55] of his reasons for decision, the Tribunal Member dealt with what he described as incomplete works and the opposing submissions made by the appellant and Mr Kairouz in relation to those incomplete works.
In par [55] the Tribunal Member recorded, referring to the quotation from C.N.R. Civil dated 28 December 2015 in the amount of $11,000: The Tribunal is unable to determine from quote whether all work identified by C.N.R. Civil as incomplete was covered in the contract with respondent, if the cost to complete the works is reasonable and whether the quote includes additional works. The respondent says that the C.N.R. Civil quote includes allowances for items which were not included in the original price given to the applicants. He submitted that inspection fees were included in the quote from C.N.R. Civil whereas they are specifically excluded from the respondent's quote. Mr Kairouz disputes the figures in the C.N.R. Civil quote but he has not produced any other quote or evidence from which the Tribunal could make assessment as to the reasonableness of the cost.
We do not express a view as to what may be the ultimate findings on any reconsideration of the case. However we are of the view that the evidence and the information before the Tribunal Member do not permit us to find that a properly conducted application could not possibly have produced a different result. In coming to that view we have taken into consideration the comments of Gleeson CJ in Aala at [4] on questions of credibility. It appears that the credibility of the appellant, Mr Nikola Stevanovski and Mr Kairouz could well arise in the reconsideration of the case by the Tribunal. Their credibility might well arise on the questions of alleged unfinished and defective work and also on the question of abandonment of the contract, if the respondent seeks to rely upon an alleged abandonment.
We are therefore of the view that the appeal should be allowed. It will be necessary for the case to be reconsidered by the Tribunal and we are of the opinion that it is appropriate that it be reconsidered with further evidence.

Orders

The Appeal Panel makes the following orders: 1. The appeal is allowed. 2. The decision of the Tribunal made on 27 April 2016 is set aside. 3. The application is remitted to the Consumer and Commercial Division of the Tribunal for determination. 4. The application is to be listed before the Tribunal for directions including setting a timetable for the filing of further evidence.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar

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: 28 August 2017

Civil and Administrative Tribunal Act 2103(NSW)

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