PUPO and ANOR (t/as PUPO BUILDERS AND DECORATORS) v BUILDERS LICENSING BOARD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY ACJ, CLARKE JA and GILES AJA 13 September 1996, 13 September 1996 [1996] NSWCA 416 NATURAL JUSTICE — WHETHER TRIAL JUDGE FAILED TO GIVE DUE CONSIDERATION TO DEFENCES PLEADED OR ERRED IN TREATING CERTAIN DEFENCES AS HAVING BEEN ABANDONED Clarke JA As long ago as February 1982 the Builders Licensing Board sued Francesco Pupo and Saverio Pupo, the appellants, in respect of moneys which the Board had paid to house owners pursuant to the provisions of the Builders Licensing Act 1971 and, in particular, s34. The statement of claim included eighteen allegations of fact including a claim that moneys had been paid to each of the four house owners in question. The appellants filed lengthy grounds of defence which had been prepared for them by a firm of solicitors in Leichhardt. Those grounds of defence were filed in May 1985. In them the appellants admitted all but five of the allegations in paral to para18 in the statement of claim. On each occasion that the assertion was made that a sum had been paid to a house owner, the appellants declined to admit the fact. They also denied an assertion that they were liable for the sum claimed which was $17,197. In addition, they filed lengthy defences in respect of the allegedly individual payments, the effect of which I will return to. Between the filing of the grounds of defence and the matter coming on for hearing, it would seem that the appellants had dispensed with the services of their solicitors. The case came before McCredie DCJ on 17 March 1992 and his Honour gave judgment in the matter on the next day. It is possible to discern from the appeal book and the oral and written evidence referred to therein that a very large amount of material was put before his Honour. Because the appellants were not represented by lawyers but were in fact represented solely by one of the Messrs Pupo, his Honour spent a great deal of time trying to understand what it was that the appellants wished to contest. In the course of those discussions his Honour was at pains to elicit from Mr Pupo the full extent of the materials which he challenged and the range of defences he raised. It is, I think, fair to say that the effect of what Mr Pupo said on those occasions was that the building work which had been carried out by his brother or himself or both of them had been of high quality and the assertion that it was defective was denied. When his Honour came to give judgment he outlined the character of the proceedings and then he said: "There were notices of grounds of defence filed in the matter some years ago. They appear to allege various technical matters, but there has been nothing made out in relation to those matters. The 'defences' as propounded by Mr Saverio Pupo in this Court, and which in the circumstances I have allowed to be put forward as 'defences' are: firstly, a denial that there were any defects or delay or 2 UNREPORTED JUDGMENTS default on behalf of the Pupos at any relevant time; and secondly, some allegation was put forward by the defendant of 'conspiracy' by various officers of the Board and the owners concerned." Could I interpose the observation at this stage that although there was no allegation of a conspiracy in the grounds of defence, his Honour in fact dealt with the claim which had been advanced at the oral hearing. His Honour also dealt with the denial of the existence of delay or defective work and concluded that the Board had made out its case. Accordingly, his Honour directed the entry of judgment. Within a month the appellants filed a notice of appeal. This document was not drafted by lawyers but broadly conforms with the form set out in the Rules of the Court. In that notice they reiterated their claim that there had been no defective building work and that the Board had fabricated the allegations against them. They said that the Board's claims were not founded on fact and that they were fit and proper to hold a builder's licence. Pausing there, it is relatively clear that they were concerned to challenge those particular findings and they did not suggest that his Honour had erred in other ways or had denied them natural justice. Approximately six months later a supplementary notice of appeal was filed. This document had been prepared by solicitors and it contained, in all, twenty-three grounds of appeal, of which we have been told today twenty-one are pressed. The grounds three to twenty-one assert error in his Honour in failing to make findings in conformity with a particular paragraph in the original ground of defence. These grounds have, however, been treated as ancillary to the major grounds which have been agitated in the hearing. They are, one, his Honour erred in failing to give due consideration to the defences pleaded in the notice of grounds of defence filed in the action and, two, his Honour erred in regarding the defences pleaded in the notice of grounds of defence as having been abandoned. Mr De Meyrick, who argued the question on behalf of the appellants and said all that could be said on their behalf, asserted that there had been, in substance, a failure by his Honour to accord the appellants natural justice. He pointed out that an interpreter had been present at the hearing and, while that interpreter had not been used a great deal, there was a clear indication that the appellant had some difficulty with the English language. He said also that, as must have been apparent to his Honour, the appellants were not legally qualified persons. It was therefore incumbent upon his Honour to deal with all of the defences which they had formally raised and his Honour was not entitled to treat any of them as impliedly abandoned. Although his Honour did not, as I have already recorded, say that he treated them as abandoned, Mr De Meyrick said that the effect of what he did was to treat them as abandoned. He submitted that the clear import of those grounds of defence was to put in issue pre-conditions to the entitlement of the Board to recover moneys pursuant to the provisions of the Builders Licensing Act and that, insofar as the evidentiary material was not capable of discharging the onus of proof cast upon the Board to satisfy those pre-conditions, his Honour was in truth obliged either to give the Board an opportunity to prove the necessary facts or to dismiss the proceedings. Furthermore, insofar as the grounds of defence denied the existence of facts necessary to ground the Board's entitlement to sue, his Honour was in error in deciding that because nothing had been brought forward in relation to the defences, they did not need to be considered. WRIPO and ANOR (t/as PUPO BUILDERS AND DECORATORS) v BUILDERS LICENSING BOARD (Clarke JA) It seems to me that, quite apart from the inherent difficulty in maintaining the grounds of appeal which have been advanced because of the course of the trial, there in fact is nothing of substance in them. I deal by way of example with ground of defence four which relates to a contract which was entered into in 1975. That ground recites the effect of s34(3) of the Builders Licensing Act and then goes on to plead by way of defence a number of matters in answer to the claim for $795. The first defence is that the damage was not caused by a major defect and the fourth is that the claim is excessive. Evidence was led as to the basis of the claim which showed, to his Honour's satisfaction, that the claim was soundly based insofar as the relevant defect had been proved and his Honour was also satisfied as to the quantum of the claim. There are two additional paragraphs dealing with the quite separate pieces which are probably the type of matters his Honour described as technical. Those two were alternative claims. On the one hand it is said that the house owners did not comply with cl8 of the House Purchasers Agreement or, in the alternative, that the Board had failed to make a necessary, determination. Under the provisions of the Builders Licensing Act a House Purchasers Agreement in a prescribed form is deemed to have been entered into between the Board and the relevant house owners. The agreement which the appellants' counsel informed the Court governs the present case was a document described in Schedule 4 to the Regulations under the Builders Licensing Act as House Purchasers Agreement No 1. C18 of that document provides: "A purchaser shall not be entitled to recover unless notice in writing of the damage is received by the Board within one month after the purchaser has become aware of that notice or such longer period as the Corporation may, in a particular case, determine." It will be understood that the broad effect of the Act is to enable a house owner to recover compensation in respect of defects from the Board which is given a statutory right to recover the amounts paid from the builder in question. The Boardis not, however, entitled to pay claims received out of time unless it, at its discretion, determines it will accede to the claim. Not surprisingly in this case there was no evidence as to whether the claims had been made within the prescribed time, nor whether there had been an expressed exercise of the discretion by the Board. However, even if one allows that the matter was somehow properly in issue, it would seem to me that in the absence of some material to demonstrate that the claim had been made out of time or that the discretion had not been exercised, the obvious inference should be drawn that one or other conditions had been satisfied. In other words, unless there was something in the evidence to suggest otherwise, that inference should be drawn as a matter of course. Not all the grounds of defence were in the same terms but, broadly speaking, they covered the same technical type of claim about which there was no evidence led by the appellants. If, therefore, as it seems to me, his Honour had turned his attention to these matters, the high probability is that he would have found there was nothing in any of the defences in the light of the factual material before the Court. However, I do not find against the appellants on that ground. The substantial ground on which I do find against them is that they have failed to demonstrate his Honour did not accord them natural justice. It is always difficult for a trial judge who is confronted with a litigant in person but his Honour behaved, in this case, in the finest traditions by going to great lengths in his endeavour to determine just what it was that the appellants contested. His 4 UNREPORTED JUDGMENTS difficulty was compounded by their course of conduct in having lengthy and detailed defences prepared by lawyers and then coming to Court totally unequipped to advance those defences. Indeed an inference may be drawn, although I would not draw it in this case, that they were themselves concerned only to rebut the suggestion that they had been in breach of the contract. In my opinion the appellants have failed to show that his Honour in any way denied to them a full and fair hearing and I would propose that the appeal be dismissed with costs. Mahoney ACJ I agree with what has been said by Clarke JA. The defences that were raised admitted the substantial part of the claim but, as Mr De Meyrick has said, a number of, as he described them, technical defences were raised. When the matter came before the Judge he was faced with the difficult situation to which Clarke JA has referred. He had a person appearing for himself who was making use of an interpreter to some extent and who was making statements, some of which as the transcript discloses, were untranscribable. There were various portions of what took place which do not appear in the transcript, presumably because the defendant said what he did in a way which was, as the shorthand writer recorded, "not transcribable"'. In these circumstances it was understandable that the Judge endeavoured to find out what were the defences which were actually being pressed by the defendant on behalf of himself and his brother. I have looked carefully through the transcript. It appears that the Judge, in respect of individual claims made by the Board, identified the defences that were raised. He identified those defences as being that there were no defects and that there was the conspiracy to which Clarke JA referred. I refer, by way of example, to p21, p22, p25, p61, p72, p73, p75, p113, p114 and p124 of the appeal papers as illustrating the steps taken by the Judge to confirm that in fact the defences that were relied upon at the hearing were the two to which Clarke JA and I have referred. I think the Judge was careful to ensure that Mr Pupo knew what he defending and what he was putting forward. I would add one further matter. At 114 of the transcript reference was indeed made to what has been described as the technical defences, that is the defences which are set out at length in the statement of defence. I think it became clear that his Honour, having been referred to these matters, went to the defendant to ascertain what it was that he was actually pressing as defences. As his Honour there records, having received a tender of documents which amounted merely to the notice of grounds of defence (see at 114 of the appeal papers), his Honour then said to the defendant: "Well, I take it you maintain your defence that there are no defects - that there were no defects and that there were no slow work? Is there anything else you want to say about that?" The defendant said: "No, this is the true which I have to say, I don't have to say nothing - I have a conspiracy against us." I think it is clear from what was said, whether transcribed or not, that the two defences presented were those to which I have referred. It is accepted, I think, that when a Judge describes what took place at the trial before him, then subject to anything being established to the contrary, the Judge's statement of what occurred is to be taken as accepted by the Court. No attempt WRIPO and ANOR (t/as PUPO BUILDERS AND DECORATORS) v BUILDERS LICENSING BOARD (Giles AJA) has been made to establish that matters not transcribed or not appearing in the transcripts lead to a conclusion to the contrary of what the judge said. His Honour (at 124 of the transcript) again referred to, as they have been described, the technical defences and he said: "T'm not sure whether it's been expressly abandoned about s34(3) of the Builders Licensing Act." He referred Ms Olsson's attention that matter and having been addressed upon the matter said: "So if all of that evidence is accepted then there's adequate evidence to indicate all of those requirements have been carried out, is that right?" The Judge was careful to cover all of the aspects of the matter in deference to the position of an unrepresented litigant. Having done that, the Judge then, in the course of his judgment, referred to the grounds of defence as they had been filed and to the technical matters that had been referred to and said: "There's been nothing that's been made out in relation to those matters. The defence as compounded"-- I believe the Judge meant 'propounded' -- "by Mr Saverio Pupo in this Court and which, in the circumstances, I've allowed to be put forward as defences. Firstly, a denial..." The judgment went on to refer to the defence of conspiracy to which reference has been made. I do not think the Judge overlooked anything but dealt with the matter in a way which was fair to the defendants. I agree with the orders which have been proposed by Clarke JA. Giles AJA I agree with both judgments and with the orders that have been proposed. The orders of the Court are, therefore, that the appeal is dismissed and I think it must be with costs Mr De Meyrick. Representation: Counsel for the Appellant: RH de Meyrick Solicitors for the Appellant: D' Angelo Solicitors, Burwood Counsel for the Respondent: E Olsson Solicitors for the Respondent: Building Services Corporation, St Leonards