The appeal was lodged on 6 November 2015. Ms Tuck, the consumer, is appealing a decision of the Tribunal in which the following orders were made on 7 October 2015:
The consumer Meagan Tuck is to pay the contractor David Glenn White the sum of $2,327.60 pursuant to section 8 (2) (b) Consumer Claims Act by instalments of $1,163.80 per fortnight first payment 9 October 2015.
[2]
History
Ms Tuck made an application to the Tribunal on 27 May 2015 seeking an order that she did not have to pay Mr White, the respondent, an amount of $2,877.60. That amount had been invoiced by the respondent for roofing works he undertook and Ms Tuck alleged the works were defective.
The application had initially been made in the home building list of the Tribunal, to be determined as a building claim. The Tribunal has jurisdiction to deal with building claims: see s 48K of the Home Building Act, 1989 (HBA). However, as a result of the amendments to the HBA, work not exceeding the reasonable market cost of $5000 is excluded from the definition of "residential building work" (Clause 2 (3) (a) of schedule 1 of the HBA) and is therefore not a building claim within the meaning of s 48A of the HBA. However, being a claim by a consumer against a supplier, the Tribunal had jurisdiction to determine Ms Tuck's claim under the Consumer Claims Act, 1998 (CCA), being the then applicable legislation.
The proceedings were heard by the Tribunal on 27 August 2015. Orders were made and reasons were published on 7 October 2015 (Decision). In its Decision the Tribunal made the following findings:
1. The respondent contractor provided a quote to the appellant for the carrying out of roofing work to her premises: Decision [9] - [10];
2. There were conversations concerning the start date of the works and the Tribunal accepted the contractor advised the consumer that he would start on a particular day and that these communications gave rise to a binding contract: Decision [11] - [12];
3. Even if there was no concluded agreement on 16 March 2015, by 1 April 2015 the contractor had done some preparatory work and the appellant thereafter "authorised completion of what had been started" whereby a contract had been formed to undertake work pursuant to the written quotation provided: Decision [13].
4. Various of the works undertaken by the respondent were defective and were required to be rectified: see for example Decision [16], [18] and [24];
5. Having regard to the breaches as found, the consumer was entitled to compensation: Decision [4];
6. The quotation provided by Mr Wicker, the appellant's expert, in the sum of $2,700.00 plus GST included work "to complete and restore (the appellant's roof) to a professional standard" and these costs included works which were beyond the scope of the contract between the parties such as re-bedding, replacing numerous broken tiles and replacing fibro areas. Further the estimated costs provide no itemised invoice of quotation setting out each element of work which is recommended. Consequently this evidence did "not greatly assist the Tribunal in determine the quantum": Decision [40].
7. The Tribunal consequently assessed the amount of time and cost to carry out the identified rectification work by reference to the original quotation, concluded a deduction of $550.00 as compensation for the established breaches should be made from the amount otherwise payable to the respondent pursuant to the quotation; and
8. The Tribunal therefore made an order in favour of the respondent in the sum of $2,327.60, payable by two instalments of $1,163.80 each: Decision [41].
The Appeal Panel was advised that the appellant has in fact paid the sum of $2,327.60 in satisfaction of the order made.
It should be noted at this point that while the Tribunal had no jurisdiction under the HB Act to hear and determine any application (if made) by the respondent builder, for any amount unpaid in respect of the quotation. However, in determining the appellant's application the Tribunal did have jurisdiction under s 8(2)(b) of the CC Act to make an order for the appellant to pay a specified sum of money to the respondent. Therefore the question of jurisdiction of the Tribunal was not in dispute in the appeal.
[3]
Grounds of appeal and the parties' submissions
The appellant filed a notice of appeal dated 6 November 2015, having received the Decision on 16 October 2015. The appeal was lodged in time.
The appellant seeks to have the orders of the Tribunal set aside and an order made in her favour that she is not required to pay the appellant any amount. Her grounds of appeal, as explained in submissions to the Appeal Panel, can be summarised as follows:
1. The Tribunal was in error in concluding that the provision of the quotation, the discussions between the parties and the respondent's text advising when he would commence work gave rise to a binding contract between the parties;
2. Her subsequent instruction to complete the work, given after the works had been commenced, did not give rise to a binding contract. Rather, she was under "undue influence" and "backed into a corner" to authorise completion due to the preparatory work that had been undertaken. This did not amount to an authorisation to carry out the work as she had, in effect, no other option available to her;
3. The appellant accepted that the Tribunal was correct in concluding that the works only required the re-pointing of tiles and related work and not the complete restoration of the roof as provided in the estimated rectification costs prepared by Mr Wicker. However the appellant said the Tribunal Member was not qualified to make an assessment of the amount of damages in respect of the defects as found by the Tribunal;
4. Further, in relation to the assessment of damages, the appellant submitted that there was only one person working for the respondent on site and therefore the Tribunal's method of calculating damages using more than one person was incorrect.
During oral submissions the appellant also raised a challenge to the Tribunal's Decision at [39] where the Tribunal rejected the expert evidence that it was necessary for all mortar to be removed from valleys and for the tiles to be set professionally. This challenge was based on an assertion that if the mortar was not taken away there was a possibility of components of the roof rusting. However when questioned by the Appeal Panel, the appellant agreed that there was no evidence before the Tribunal or the Appeal Panel to support this statement, a concession consistent with the Tribunal's findings at Decision [39] that there was no basis for the opinion of the expert provided in his report.
The appellant also said she had not been given leave to issue a summons to obtain evidence relevant to her claim. However the Appeal Panel notes that her request to issue a summons was not made in the original proceedings, but rather to the Appeal Panel, an application which the Appeal Panel had previously refused.
The respondent filed a reply to appeal which simply said he was relying on the evidence originally before the Tribunal and that the decision should not be set aside. The respondent did not challenge the Tribunals findings in relation to the defects nor the manner in which the Tribunal determined the appropriate reduction from the amount otherwise due to the respondent for works carried out.
In short, the respondent's position is that the Tribunal correctly concluded there was a contract.
In reply, the appellant summarised her position as follows:
1. The orders made by the Tribunal on 7 October 2015 should be set aside and an order made that the invoice issued by the respondent was not payable;
2. The respondent should pay her costs of the applicant, including an amount of $191.50 being the costs she had to pay the sheriff, apparently when the sheriff attended to execute enforcement proceedings commenced by the respondent. The appellant also sought her costs of the filing fee of the appeal for $396.00 and her airfare costs of $180.00 to attend the original hearing. In this regard she submitted that there were special circumstances warranting an award for costs in her favour. On the other hand the respondent did not seek costs if he was successful in the appeal.
[4]
Consideration
As stated above, the appeal was lodged in time namely 28 days from the date of the receipt of the Decision: see Rule 25(4)(c) of the Civil and Administrative Tribunal Rules, 2014.
There is no dispute that the Tribunal had power to make the original orders which were a consumer claim within the meaning of the Consumer Claims Act, 1998, the proceedings having been commenced on 22 May 2015 in the Consumer and Commercial Division.
The Decision of the Tribunal is a general decision for which the Appeal Panel has internal appeal jurisdiction pursuant to s 32 of the Civil and Administrative Tribunal Act, 2013 (NCAT Act). Consequently, there is a right of appeal on a question of law and otherwise a right of appeal with leave: see s 80(2) of the NCAT Act.
Because the Decision was made by the Consumer and Commercial Division in the exercise of a Division function, there is a limitation in relation to the grant of leave to appeal where required. Clause 12 of Sch 4 provides that the appellant must establish she may have suffered a substantial 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 new evidence that was not reasonably available at the time the proceedings under appal were to be dealt with.
The circumstances in which leave may be granted under cl 12 was considered by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17. The applicable principles are set out in Collins at [65] and following.
The appeal essentially raises three issues for determination:
1. Was there a contract formed between the parties prior to the respondent commencing work on site?
2. If no, was a contract subsequently entered into or should such a contract be inferred? and
3. If there was a contract, having regard to the defects found by the Tribunal, was the Tribunal in error in finding that an amount of $550.00 constituted the appropriate deduction from the amount payable under the contract as compensation to the appellant for the defects as found?
In relation to the first two questions, these are principally questions of law. In relation to the last question, this is a mixed question of law and fact.
It is appropriate to deal with each question in turn.
[5]
Was there a contract formed between the parties prior to the respondent commencing work on site?
In order for there to be a binding contract, there must be offer, acceptance and consideration and an intention of the parties, objectively determined, to create a legal relationship.
A contract may also be inferred. In this regard McHugh JA said in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd [5] BPR 11,110 at [16]:
It is often difficult to fit a commercial arrangement into the common lawyers analysis of a contractual arrangement. Commercial discussions are often to unrefined to fit easily into the slots of "offer", "acceptance", "consideration" and "intention to create legal relationship" which are the benchmarks of contract of classical theory. In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relation. Cf Atiyah, "Contracts, Promises and the Law of Obligations" 94 Law Quarterly Review at 194. A bilateral contract of this type exists independently of and indeed proceeds what the parties do. Consequently, it is an error "to suppose that merely because something has been done and there is therefore some contract in existence which has thereby become executed". Howard, Contract, Relines and Business Transaction" [1987] Journal of Business Law at 127. Nevertheless, a contract may be referred from the acts and conduct of parties as well as or in the absence of their words: Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd [Court of Appeal] [11/11/88]. The question is this class of case is whether the conduct of the parties viewed in the light in the surrounding circumstances shows a tacit understanding or agreement. The conduct of the parties, however must be capable of proving all the essential elements of an express contract: cf Baltimore and Ohio RR Co v US 261 US 592 [1923], Fince v US 675 F2d 289 [1982] care must also be taken not to infer anterior promises from conduct which represents no more than an adjustment to their relationship in light of the changing circumstances.
His Honour then said at [18] that "in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contact had been fulfilled".
The Tribunal concluded that the contractor subsequently notifying the consumer he would start work on a particular date and that this proposed date was "within the scope of the contract formed between the parties" meant that the parties had entered into a binding contract prior to the respondent commencing work. The evidence found by the Tribunal to support this conclusion was that:
1. The respondent had provided a quotation for the work;
2. The respondent gave evidence that he indicated that he could start at the end of the next week/the beginning of the next week and that he would ring and let the appellant know;
3. The Tribunal preferred the evidence of the respondent over the evidence of the appellant;
4. The Tribunal rejected the appellant's evidence that consisted of two inconsistent versions of events, the effect of which was that the appellant was asserting she had made no commitment to the works or the timeframe for the work to be commenced because she was not in a financial position to proceed.
In the Appeal Panel's opinion the findings of fact identified by the Tribunal were not sufficient to support the conclusion that there was a binding contract between the parties. In this regard it is clear that there was an offer to undertake the roofing work being the written quotation dated 16 March 2015. A copy of this document is found in the material provided by the appellant on appeal. However, this quotation does not specify a date for commencement of the work nor is there any marking on the document to suggest it has been accepted by the appellant.
While there is evidence from the contractor recorded in [10] of the Decision about when he could start work, there is no finding that would lead to the conclusion that the appellant in fact accepted the quotation and requested the respondent to commence work. Rather, the inquiry seems to have been about a possible date for commencement, not acceptance by the appellant for the respondent to commence work.
Accordingly, the facts as found by the Tribunal as set out in [9] - [12] of the Decision are not sufficient to establish that a contract had been formed prior to the commencement of work by the appellant requesting the respondent to commence work.
It should be noted at this point that while it may be there was evidence provided at the original hearing of acceptance, no findings of fact have been made sufficient to justify the conclusion that the parties had entered into contractual relations prior to commencement of the work. Further, no party has provided the sound recording of such evidence in this appeal.
Accordingly, in so far as the Tribunal found there was a binding contract entered into between the parties prior to the commencement of work in our view it was in error because there was no concluded contract.
However, that is not an end of matter by reason of the Tribunal's conclusion at [13] of the Decision.
[6]
Was a contract subsequently entered into or should such a contract be inferred?
As set out above, the Tribunal found that at the latest date of 1 April 2015, after the respondent had done some preparatory work, he spoke to the appellant who by then had accessed email messages which she had denied receiving prior to commencement of the works. The Tribunal accepted the appellant's evidence that she "authorised completion of what had been started" no later than 1 April 2015. Consequently, the Tribunal determined in the alternative that the parties had in any event entered into a contract for the performance of the works set out in the written quotation to which we have referred.
During oral submissions in the course of hearing the appeal, the appellant accepted that she had told the respondent to complete the work but said that this statement was made under circumstances of "undue influence". The appellant also said to the Appeal Panel that she did not issue any instruction to the respondent to stop doing the work.
In these circumstances, the Appeal Panel is satisfied that the appellant expressly directed the respondent to continue with the works.
Notwithstanding the appellants assertion of "undue influence", a matter that does not appear to have been raised at the original hearing, it was open to her to direct the respondent to cease working if, as she contended, there was no contract and she did not wish the contract to be performed. She did not do so. Rather, having provided a direction to the contrary, namely that the respondent complete the work in question, she thereby became bound by the contract and obliged to pay the price set out in the quotation.
It follows that the Tribunal was not, in its final conclusion, in error in finding that there was a contract between the parties to perform works in connection with the appellant's roof as set out in the quotation dated 16 March 2015.
Accordingly the appeal on the basis there was no contract must fail.
[7]
Having regard to the defects found by the Tribunal was the Tribunal in error in finding that an amount of $550.00 constituted the appropriate deduction from the amount payable under the contract as compensation to the appellant for the defects as found?
The final matter to consider is whether or not the Tribunal was in error in assessing the deduction to be made in connection with that part of the work carried out by the respondent which was found to be defective. It should again be noted that the sound recording of the hearing and the oral evidence provided by various witnesses was not material provided to the Appeal Panel. This is despite the directions made on 25 November 2015 by Principal Member Redfern for the preparation of the appeal, particularly order 2 (c). The appellant asserts in the appeal that the Member was not qualified to calculate the loss in the manner in which occurred and that the Tribunal should have cross examined the respondent regarding the question of who was on site and when for the purpose of determine the costs of rectifying the defective work.
The Appeal Panel notes that no contention was put forward by the appellant that she was denied an opportunity to ask questions. Otherwise, it is not a usual requirement of the hearing process that the Tribunal itself undertakes a process of cross examination to assist a particular party to improve their case.
In any event, it is difficult to understand what relevance this cross examination could have had in determining the amount, if any, to be allowed in respect of the defects as found as a reduction from the amount otherwise payable to the builder in accordance with the written quotation.
What is clear in the present circumstances is that the Member correctly determined that the quotation for the rectification work totalling $2,700.00 provided by the appellant's witness Mr Wicker included work for which the respondent was not contractually responsible, whether or not the works the respondent actually performed were defective. At [40] of the Decision the Tribunal found that Mr Wicker in fact provided an estimate to carry out works "beyond the scope of the contract between the parties". Consequently, the Tribunal was correct to reject this evidence in determining the reasonable cost of rectifying the defects as found.
However, having found there were defects, it was incumbent upon the Tribunal to estimate the amount, if any, which was to be deducted from the amount payable under the quotation so as to make due allowance for rectifying the defects as found.
In Baak v Concrete Services Group Pty Ltd [2016] NSWCATAP 42 at [17] and following the Appeal Panel set out various cases which cast upon a tribunal or court the obligation to assess the loss or damage arising by reason of a breach of contract. Of the authorities referred to, it is sufficient to set out the decision of Dixon and McTiernan JJ (with whom Latham CJ and Williams J agree) in Fink v Fink [1946] HCA 54; (1946) 74 CLR 127. At page 143 their Honours said:
Where there has been an actual loss of some sort, the Common Law does not permit difficulties of estimating the loss in money to defeat the only remedy it provided for breach of contract, an award of damages.
The Appeal Panel in Baak then referred to the decision of Mason CJ and Dawson J in Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54 where their Honour said at [31]:
The settled rule, both here and in England, is that mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can: Fink v. Fink [1946] HCA 54; (1946) 74 CLR 127, at p 143; McRae v. Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377, at pp 411-412; Chaplin v. Hicks (1911) 2 KB 786, at p 792. Indeed, in Jones v. Schiffmann [1971] HCA 52; (1971) 124 CLR 303, Menzies J. went so far as to say that the "assessment of damages ... does sometimes, of necessity involve what is guess work rather than estimation": at p 308. Where precise evidence is not available the court must do the best it can: Biggin and Co. Ltd. v. Permanite Ltd. (1951) 1 KB 422, per Devlin J. at p 438.
In the present case, the appellant failed to adduce sufficient or relevant evidence as to her loss. As stated above, the evidence she provided was for a gross sum amount for carrying out both defect rectification work and further works not within the original scope of the building contract. This quote was dated 22 July 2015. As found by the Tribunal at [40], the quote was not itemised and did not outline what work was included or each element of the work required to be undertaken.
The Tribunal found that it was not possible, by reference to the quotation provided, to determine the cost of carrying out the necessary rectification work to be offset against the price payable to the contractor. Consequently, the quotation could not be used for the purpose of assessing such a deduction and the Tribunal was correct in its determination in rejecting the quotation as evidence as to the amount to be offset.
However, the Tribunal also had before it evidence in the form of the original contract and evidence from the respondent as to the cost of carrying out the original work and evidence from the respondent as to the estimate of time to fix the various defects identified. These findings are recorded in the decision at [41]. The Tribunal used these facts to provide an estimate of the loss suffered by reason of the respondent's breaches so as to make an assessment of the deduction to be made from the unpaid contract sum and thereby determine what award was fair and equitable as required by s 13 of the CC Act. In our opinion, this was both a proper and reasonable basis to assess the deduction to be made from the unpaid contract sum for the defects as found by the Tribunal.
As is clear from the authorities to which we have referred above, the fact there is some estimation involved does not mean that the Tribunal erred in law in fixing the amount of the deduction at $550.00. Insofar as the appellant challenges the fact that the proper allowance is $550.00, the appellant must obtain leave to appeal the assessment. This requires the appellant to demonstrate that she may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or was against the weight of the evidence.
It is clear to us that having:
1. Correctly (in our opinion) rejected the evidence in the form of Mr Wicker's quotation; and
2. otherwise relied on evidence from the contractor and the original contract price to determine the time and costs issues involved in rectifying the identified defects,
there was no factual error made, let alone a basis to conclude the decision was against the weight of evidence or not fair and equitable. It follows there is no basis to conclude that the appellant may have suffered a substantial miscarriage of justice.
Accordingly, this ground of appeal fails and insofar as necessary, leave to appeal should be refused.
[8]
Orders
The Appeal Panel makes the following orders:
1. Leave to appeal is refused;
2. The appeal is otherwise dismissed; and
3. Each party is to pay their own costs.
[9]
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: 17 June 2016