New South Wales Supreme Court CITATION : Giardina v Cupri & 2 Ors [2007] NSWSC 156 HEARING DATE(S) : 20 February 2007 JUDGMENT DATE : 6 March 2007 JURISDICTION : Common Law Division - Administrative Law List JUDGMENT OF : Associate Justice Harrison DECISION : (1) The appeal is upheld; (2) The decisions of Tribunal Member Leotta dated 27 October 2005 and 21 December 2005 are set aside; (3) The matter is remitted to the Tribunal to be determined according to law; (4) The defendants are to pay the plaintiff's costs as agreed or assessed. CATCHWORDS : Appeal decision of CTTT - unlicensed contractor, doors and windows LEGISLATION CITED : Consumer, Trader & Tenancy Tribunal Act 2001 - ss 28, 35, 65, 67 Home Building Act 1989 - ss 4, 10, 92 Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456 CASES CITED : De More Constructions Pty Ltd v Garpace Pty Ltd (2001) 53 NSWLR 132 Italiano v Carbone & Ors [2005] NSWCA 177 Kalokerinos & Anor v HIA Insurance Services P/L & Anor [2004] NSWCA 312 Paula Giardina - Plaintiff PARTIES : Michael Cupri - First Defendant Decoporte Pty Ltd - Second Defendant Consumer Trader & Tenancy Tribunal - Third Defendant FILE NUMBER(S) : SC 30006/2006 COUNSEL : Mr D Accoto - Plaintiff Mr R Pearson - First & Second Defendants Turnbull Bowles Lawyers - Plaintiff SOLICITORS : Creagh & Creagh - First & Second Defendants Crown Solicitor - Submitting Appearance - Third Defendant LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW LOWER COURT FILE NUMBER(S) : HB 03/00636 LOWER COURT JUDICIAL OFFICER : Tribunal Member Leotta LOWER COURT DATE OF DECISION : 27 October 2005, 21 December 2005 LOWER COURT MEDIUM NEUTRAL CITATION : Giardina v E Decoporte P/L & Ors (Home Building) [2005] NSWCTTT 705 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST ASSOCIATE JUSTICE HARRISON TUESDAY, 6 MARCH 2007 30006/2006 - PAULA GIARDINA v MICHAEL CUPRI & 2 ORS JUDGMENT (Appeal decision of CTTT – unlicensed contractor, doors and windows) 1 HER HONOUR: By summons filed 17 January 2006 the plaintiff seeks firstly, a declaration that the Tribunal Member denied procedural fairness in relation to the determination dated 21 December 2005; secondly, an order in the nature or certiorari that the decision of the Tribunal Member dated 21 December 2005 be quashed; thirdly, an order that the first and second defendants pay to the plaintiff the sum of $44,921.50; fourthly, an order that the plaintiff retain all doors and windows supplied by the first and second defendant; fifthly, a declaration that the first and second defendants are not legally capable of performing rectification works to the subject property; sixthly, a declaration that the plaintiff is not indebted to the first or second defendants for moneys either pursuant to the contract entered into by the parties or on a quantum meruit basis; seventhly, an order for costs in the proceedings in the Tribunal; eighthly, in the alternative, this Court make such order in relation to the proceedings as, in its opinion, should have been made by the Tribunal; and finally, that the matter be remitted to the Tribunal for rehearing or determination. The plaintiff relied on two affidavits of Stephen O'Connor dated 2 June 2006 and 11 August 2006. 2 The plaintiff is Paula Giardina (Ms Giardina). The first defendant is Michael Cupri (Mr Cupri). The second defendant is Decoporte Pty Ltd (Decoporte). The third defendant is the Consumer Trader and Tenancy Tribunal (the CTTT) who has filed a submitting appearance. For convenience, in the judgment, I shall refer to the parties by name. Appeal and relief sought 3 Section 65 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (the CTTT Act) provides: "(1) Except as provided by this section, a court has no jurisdiction to grant relief or a remedy by way of: (a) a judgment or order in the nature of prohibition, mandamus, certiorari or other relief, or (b) a declaratory judgment or order, or (c) an injunction, in respect of any matter that has been heard and determined (or is to be heard or determined) by the Tribunal in accordance with this Act or in respect of any ruling, order or other proceeding relating to such a matter." 4 Section 65(3) however provides: "(3) A court is not prevented from granting relief or a remedy of a kind referred to in subsection (1) in relation to a matter in respect of which the Tribunal has made an order if the ground on which the relief or remedy is sought is that: (a) the Tribunal had no jurisdiction to make the order, or (b) in relation to the hearing or determination of the matter, a party had been denied procedural fairness." 5 Section 67 of the CTTT Act allows for an appeal to be made to this court on a question with respect to a matter of law. A reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal (s 67(8)). The onus lies on the plaintiff to demonstrate that there has been an error with respect to a matter of law. 6 Section 67(3) of the CTTT Act provides that, after deciding the question of the subject of an appeal, the court may affirm the decision of the Tribunal, or it may make an order in relation to the proceedings in which the question arose as it, in its opinion, should have been made by the Tribunal, or it may remit its decision on the question to the Tribunal and order a rehearing of the proceedings before the Tribunal. 7 The width of s 67 was discussed in Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456. Hodgson JA (with whom Beazley and Tobias JJA agreed) stated succinctly [at para 33]: "… in my opinion, to establish an error of law by the Senior Member, it was necessary to show that he applied a wrong principle of law. That could be shown either from what he said, or because the ultimate result, associated with the facts that he expressly or impliedly found, indicates that he must have applied the wrong principle of law". 8 See also Kalokerinos & Anor v HIA Insurance Services P/L & Anor [2004] NSWCA 312 at paragraphs [39], [40], [41], [47] and [59]. The Tribunal generally 9 At the outset, it is helpful to set out some of the provisions of the CTTT Act. The functions of the Tribunal are to adjudicate disputes between consumers and commercial disputes between landlords and tenants. The Tribunal is not constrained by the rigour of the courtroom. Its objects are to ensure that the Tribunal is accessible, its proceedings are efficient and effective, its decisions are fair and to enable proceedings before the Tribunal to be determined in an informal, expeditious and inexpensive manner. The Tribunal is 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 (s 28). 10 Evidence must be given on oath or statutory declaration (s 39(1)) but the Tribunal is not bound by the rules or practice of evidence and the Tribunal may inform itself on any matter in such manner as it considers appropriate (s 28(2)). The Tribunal must conform to the rules of natural justice, but broadly speaking, has control of and responsibility for its own procedures (s 28(1) and (2)). Its business is conducted in public (s 33). Section 35 provides that the Tribunal must ensure that each party in any proceedings is given a reasonable opportunity to call or give evidence and otherwise present the party's case (whether at a hearing or otherwise); and to make submissions in relation to the issues in the proceedings. Normally, a party to the proceedings has carriage of his or her own case and is not entitled to be legally represented (s 36(1)). The Tribunal has the power to award costs (s 53), but usually each party bears its own costs. Pursuant to s 54 of the CTTT Act, the Tribunal is obliged to use its best endeavours to bring the parties to a settlement before making an order. The Tribunal has a power to correct its decision (s 50). For the purpose of recovery of any amount the Registrar can issue a certificate, identifying the person liable and operates as a judgment (s 51). I shall refer to ss 28 and 35 in more detail later in this judgment. Grounds of appeal 11 On 7 and 8 March 2005 the Tribunal heard proceedings HB 03/00636. An interim order was made on 27 October 2005. A final decision was made on 21 December 2005. 12 The plaintiff appeals from the whole of the decision of the Tribunal on the grounds that firstly the Tribunal denied the plaintiff procedural fairness by failing to allow her sufficient time to provide the Tribunal with evidence as to quantum; secondly, the Tribunal erred in allowing the costs to the plaintiff of Item I of the list of defective works in the interim order dated 27 October 2005 then omitting it from its calculations in the final decision and referring to Item 2 which was of much lesser value, as Item 1; thirdly, the first and second defendants do not hold the appropriate licenses to perform residential building works in New South Wales and pursuant to s 4 of the Home Building Act 1989 (HBA) cannot comply with the order that they carry out rectification works; and fourthly, the first and second defendants do not hold the appropriate licenses to perform residential building works in New South Wales nor have Home Owners Warranty insurance and are not entitled to payment for work done, pursuant to s 92 of the HBA. The proceedings in the Tribunal 13 In the Tribunal the applicant was Ms P Giardina who is a homeowner. Her husband (who is not a party to these proceedings) held an owner/builder licence. Eureka Building Works is not named as a party in the appeal to this Court. Mr Cupri (the second respondent) is the director of Eureka Building Works (the third respondent) who trades under the name E Decoporte Pty Ltd (the first respondent). The respondent is the supplier of Italian doors and windows as agent for the importer. 14 On 7 and 8 March 2005 the substantive hearing took place. The issues in dispute before the Tribunal Member were whether firstly, Cupri and Decoporte were liable to pay the sum of $137,457.00 for a breach of statutory warranty and/or contract; secondly, the supplier/installer was an unlicensed contractor in breach of s 10 of the HBA; thirdly, the construction work was uninsured in breach of s 92 of the HBA, which would entitle Cupri to the return of moneys paid for the supply of unique imported Italian windows. 15 On 27 October 2005 the Tribunal Member provided written reasons and made numerous interim orders. They are that: "1. The respondent to carry out the rectification of items referred to on pages 24-25 and 26 within 42 days of the date of this decision. 2. The applicant to return the defective doors set out on page 27 to the respondent within 42 days of the date of this decision. 3. The applicant is to pay the respondent the final payment for the Contract Works as varied in the amount of $ 21,545.00 less a setoff to be advised to the Tribunal. 4. I require the applicant to supply an agreed signed schedule of the price paid for items set out on page 27, referred to the quote dated 3 December 2001 above in order to assess the amount of the refund to be paid to the applicant by the respondent. 5. The first respondent is 100% liable in contract to the applicant. 6. The first respondent is agent for the importer/manufacturer principal. The principal is a concurrent wrongdoer pursuant to the Civil Liability Act 2002 with the first respondent to the extent of 50%. The final orders are subject to agreement on quantum. Any costs orders will be dealt with in the final determination. Alternatively: 7. I allow a sum to be advised to the applicant for rectification of items identified on page 24-26 above. The Tribunal awaits agreed signed minutes of order as to the cost of rectification of: a) the tilt and turn function of windows identified on page 26, as to be advised and b) the refund of the cost of the windows not fit for purpose identified on page 27 in order to determine a proper sum to be allowed to the applicant." Procedural fairness in Tribunal 16 Ms Giardina submitted that she was denied procedural fairness as she was not given sufficient time to provide the Tribunal with evidence as to quantum. 17 Section 28 of the CTTT Act reads: "Procedure of Tribunal generally (1) The Tribunal may, subject to this Act, determine its own procedure. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness. (3) The Tribunal is 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. (4) The Tribunal is to take such measures as are reasonably practicable to ensure that the parties in any proceedings understand: (a) the nature of the assertions made in the proceedings and the legal implications of those assertions, and (b) the procedure of the Tribunal and any decision or ruling made by the Tribunal that relates to the proceedings." 18 Section 35 of the CTTT Act reads: "Opportunity for parties to present case The Tribunal must ensure that each party in any proceedings is given a reasonable opportunity: (a) to call or give evidence and otherwise present the party's case (whether at a hearing or otherwise), and (b) to make submissions in relation to the issues in the proceedings. …" 19 Section 35 provides that the CTTT "must ensure" that each party is given "a reasonable opportunity" to present its case. There are provisions which allow the CTTT a significant degree of flexibility in adapting its procedures to the exigencies of the case in determining the manner in which the proceedings will be conducted. Nevertheless, those provisions should not be construed so as to derogate from other provisions cast in obligatory language which constitute core elements of procedural fairness - see Italiano v Carbone & Ors [2005] NSWCA 177 at [105] and [106]. 20 In her decision dated 21 December 2005 the Tribunal Member records: "On or about October 2005 the Tribunal handed down an Interim Decision with regard to these proceedings. In that decision the Tribunal made clear that it required certain information to be supplied by the applicant to the respondent and jointly to the Tribunal as to a matter of quantum which was unclear in the experts' agreed joint report. The matter was re listed on 7 December 2005 given that no information had been received from any of the parties, particularly the applicant who was in breach of the Tribunal's orders. The Member made directions and extended an indulgence to the applicant to provide the information requested in the Interim Decision on or before 14 December 2005. I note that Mr Acotto informed the Tribunal on 7 December 2005 that he appeared for the applicant direct as there was no longer an instructing solicitor. It was on that basis that the indulgence was granted to the applicant in extending time to comply with the previous directions. On 15 December 2005, the Tribunal was informed that the applicant was not able to comply with the order to supply the quantum information requested as information had to be obtained from Italy. Be that as it may, the applicant's evidence at hearing had included a quote for certain window/doors which were not separately itemised on that quote. However, I find it difficult to understand that the applicant has no knowledge of the breakdown of the global price quoted for those window/doors. There is some indication and breakdown on the quote as to other windows and doors and other items. Accordingly, the Tribunal grants no further time for the applicant to supply that information because of the applicant's non compliance with the orders and the need to do justice to the parties. The Tribunal issues its final orders utilising, to the best of its ability, the information set out in the joint agreed experts' report, vague as it might be. Those experts were not required for any cross examination by either party to these proceedings. I set out the allowed sums in this final decision with some amendment to the figures in the Interim Decision which were incorrect as they were not based on the final figures but on a guess estimate." 21 On 27 October 2005 Ms Giardina was directed to supply further information to the Tribunal. On 7 December 2005 the matter was relisted by the Tribunal. On that day Ms Giardina's Counsel informed the Tribunal Member, given that neither party had complied with the Tribunal's directions and sought an extension of time to comply. An extension was granted to 14 December 2005. There was no compliance with those directions. 22 On 15 December 2005 the Tribunal was informed that the quantum information had to be provided from Italy. Apparently, the information required was a breakdown of the global price quoted for certain windows and door. There was no affidavit evidence provided as to what attempts had been made to obtain this information. It is expected that parties comply with Court directions and if they are unable to do so, at the very least the non-complying party is obliged to demonstrate what efforts they have made to do so. In my view Ms Giardina was given a reasonable opportunity to provide the information sought by the Tribunal member but she did not do so. Whether the Tribunal Member erred by referring to Item 1 as Item 2? 23 The Tribunal member made the following finding: "Item 1 – the Respondent to replace affected sections as required in the agreed price of $1,250.00." 24 It is Item 2 in the joint experts' report that refers to an agreed rectification cost of $1,250.00. Item 1 relates to the doors to the family room with no agreed amount. Elsewhere, the Tribunal Member referred to the doors to the family room in her reasons and noted that the sum to be allowed to Ms Giardina was unknown. The Tribunal Member ordered that the parties were to provide her with an agreed sum after an interim decision was handed down. This could be done by written submissions forwarded to Chambers. No agreed sum was reached and no written submissions were furnished. As the parties did not comply with the Tribunal's directions, the Tribunal Member made an order that Ms Giardina was to return the defective doors. Ms Giardina had an opportunity to clarify the interim orders if he was in any doubt about them but he did not do so. 25 The Tribunal Member, in her interim reasons, considered both Items 1 and 2. In relation to the family room doors, as Ms Giardina did not provide the Tribunal Member with the information required, she calculated rectification costs from the incomplete material that had been provided. While it was open to the Tribunal Member to adopt that approach, there are difficulties with the order for rectification. I have referred to these difficulties in more detail under the next heading. The Home Building Act 26 On 21 December 2005, the Tribunal Member entered verdict for the respondent in the amount of $21,545.00 on the cross application (Final order 3) and ordered that the applicant to pay the sum of $527.50 to the respondent upon completion of the work set out in order 2 above. 27 Ms Giardina submitted that in relation to these orders, firstly, that the plaintiff is incapable of making payment to a party insufficiently identified as the decision of the Tribunal Member does not identify which of the two respondents the order is made in relation to; and secondly, as neither of the respondents are properly licensed and have no home warranty insurance they are not entitled to payment for work. For the purposes of dealing with this argument, I shall assume that the Tribunal Member was referring to all respondents. 28 On the issue of whether the respondents were licensed, the Tribunal Member stated: "Cupri stated that he informed the applicant that he did not have a building licence and that Verzeroli, the managing director of GMP Building Supplies would look after the installation when the goods arrived at the premises. This is contrary to what the applicant says but Cupri was not tested on this evidence in cross examination and I accept it. Initially the sub frame work installation was carried out by a Mr. M Angeloca, also a director of GMP Building Supplies." 29 The installer, who had a licence, was Mr Verzeroli the managing director of GMP Building Supplies. The actual installation work was subcontracted by GMP Building Supplies to Woodhill Timber Windows and Joinery who in turn subcontracted the installation to Samaras Industries Pty Ltd. 30 The Tribunal Member continued: "This question of unlicensed contracting by the supplier/installer Cupri arising out of the contract between the parties is to be determined upon the evidentiary facts. I accept the evidence that the Contract was a supply and install one and that the actual installer was licensed for that work. There is no evidence to the contrary from the applicant. I also accept Cupri's evidence that he informed the applicant that he did not have a licence but the installer did. Cupri is the agent for the importer who, on the evidence, is also the installer but in fact subcontracted the actual work of installation to another contractor." 31 Thus, the Tribunal Member made a finding that the contract between Ms Giardina and Mr Cupri was for both the supply and the installation of goods. The Tribunal Member referred to De More Constructions Pty Ltd v Garpace Pty Ltd (2001) 53 NSWLR 132. 32 The Tribunal Member stated: "…the applicant's husband and the actual installer held an appropriate permit and licence respectively for the Works. In my view that is sufficient compliance with the aim of the Act and section 10 of the Act. In different circumstances to this case it may be that the importer principal, rather than the agent Cupri, requires a contractor's licence before entering into any supply and install contracts for residential building work." 33 Notwithstanding the finding that Cupri required a licence to enter the supply/install contract, the Tribunal Member concludes, "It follows from my findings that the respondent Cupri is not precluded from enforcing a claim to be paid the full price of the Contract sum plus variations." It is upon these findings that Final Orders 2 and 5 are based. 34 It is necessary to consider ss 4(1) and 10(1)(a) of the HBA. They read: "4 Unlicensed contracting (1) A person must not contract to do: (a) any residential building work, or (b) any specialist work, except as or on behalf of an individual, partnership or corporation that is the holder of a contractor licence authorising its holder to contract to do that work. 10. Enforceability of contracts and other rights (1) person who contracts to do any residential building work, or any specialist work, and who so contracts: (a) in contravention of section 4 (Unlicensed contracting), is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person." 35 Section 4 of the HBA provides a general prohibition on unlicensed individuals and corporations from contracting to do residential building work. In De More, Fitzgerald AJA held [21] that s 4: "…prohibits any person, other than those exempted from that prohibition, from contracting to do any residential building work. The words introduced by the word "except" exempt from the general prohibition on contracting to do residential building work those who contract "as or on behalf of an individual, partnership or corporation that is the holder of a licence authorising its holder to contract to do the work."" 36 These are the only exemptions to the requirement of holding a building licence to contract to perform residential building work. Mr Cupri, who is unlicensed and a party to the contract (and the other respondent) cannot overcome s 4 by sub-contracting to a licensed installer. 37 Section 10 of the HBA generally prohibits unlicensed contractors from seeking relief under a home building contract. This section reflects the general tone and intendment of the act by protecting consumers and by discouraging unlicensed contracting. Under s 10(1)(a) a party in breach of s 4 of the HBA is barred from relying on the contract in an action for damages and the contract is unenforceable by the person who contracted to do the work. In addition, the section protects the rights of the consumer by allowing them remedy in respect of a breach of the contract. 38 In light of s 10(1)(a) of the HBA, Final Orders 2 and 5 of the Tribunal Members Final Orders dated 21 December 2005 so far as they relate to residential building work or specialist work are inconsistent with the plain wording of the section and with protection this section seeks to afford to consumers. These orders should be set aside. The matter is remitted to the Tribunal to be dealt with according to law. Final Order 3 39 Final Order 3 from the 21 December 2005 hearing is as follows: "The Respondent to carry out the agreed and ordered rectification works within 28 days of the date of this decision." 40 This order was made by the Tribunal Member in relation to a number of deficiencies found in the quality and installation of the doors and windows installed at the plaintiff's residence. In relation to Final Order 3, Ms Giardina submitted that, as the respondents do not hold the appropriate licenses to perform residential buildings works they could not comply with the order to carry out rectification works. 41 In De More the NSWCA stated, "s 4 and s 10(3) are directed to contracts to do work, while s 12 and s 13 are directed to physical performance of the work." In respect to the physical performance of the work, s 12 of the HBA provides: "Unlicensed work An individual must not do any residential building work, or specialist work, except: (a) as, or as a member of a partnership or an officer of a corporation that is, the holder of a contractor licence authorising its holder to contract to do that work, or (b) as the holder of an owner-builder permit authorising its holder to do that work, or (c) as an employee of the holder of such a contractor licence or permit." 42 Furthermore, s 13 of the HBA provides: "Unqualified residential building work (1) An individual must not do any residential building work, except: (a) as the holder of an endorsed contractor licence, a supervisor or tradesperson certificate or an owner-builder permit, authorising its holder to do that work, or (b) under the supervision, and subject to the direction, of the holder of an endorsed contractor licence or supervisor certificate authorising its holder to supervise that work." 43 The Tribunal Member, made a finding that neither of the respondents held a valid contractor licence. That being so, the Tribunal cannot order the unlicensed respondents to carry out the rectification work at Ms Giardina's residence. 44 The appeal is upheld. To set aside the unlicensed installation work, it is necessary to set aside the orders made on 27 October 2005. The decisions of Tribunal Member Leotta dated 27 October 2005 and 21 December 2005 are set aside. The matter is remitted to the Tribunal to be determined according to law. 45 Costs are discretionary. Costs usually follow the event. The defendants are to pay the plaintiff's costs as agreed or assessed. The Court orders: (1) The appeal is upheld. (2) The decisions of Tribunal Member Leotta dated 27 October 2005 and 21 December 2005 are set aside. (3) The matter is remitted to the Tribunal to be determined according to law. (4) The defendants are to pay the plaintiff's costs as agreed or assessed. ********** 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.