Brincat v Consumer, Trader and Tenancy Tribunal and Anor [2011] NSWSC 82

Supreme Court New South Wales

Medium Neutral Citation: Brincat v Consumer, Trader and Tenancy Tribunal and Anor [2011] NSWSC 82 Hearing dates: 2 June 2010 Decision date: 28 February 2011 Before: RS HULME J Decision: Orders deferred Legislation Cited: Consumer Trader and Tenancy Tribunal Act Consumer Trader and Tenancy Tribunal Regulations Category: Principal judgment Parties: Andrew James John BRINCAT Deborah Anne BRINCAT CONSUMER, TRADER AND TENANCY TRIBUNAL Wayne SCHNEIDER Kylie SCHNEIDER (trading as ALPINE HOMES) Representation: Counsel: Mr A Martin Mr M Weightman Solicitors: Sid Hawach & Co IV Knight Crown Solicitor Dignan & Hanrahan File Number(s): 2009/297123

Judgment 1RS HULME J : In these proceedings the Plaintiffs seek to challenge a number of decisions of the Consumer, Trader and Tenancy Tribunal (hereinafter referred to as the "CTTT") dealing with the issue of costs in proceedings before it. The decisions challenged are of 16 October 2008, 20 May 2009, and 5 November 2009. The first two of these decisions are challenged on the basis of a denial of procedural fairness, the last is challenged on that basis, jurisdictional error and/or error of law on the face of the record, and that the CTTT was functus officio at the time. In part this latter claim is based upon the decision of 20 May being allowed to stand. 2In this Court the CTTT has filed a submitting appearance except as to costs, and it will be convenient to generally refer to Mr and Mrs Schneider as "the Defendants". 3As much turns on the history of proceedings before the Tribunal, it is desirable to set out the salient events that led to or occurred in those proceedings:- (i) The Plaintiffs were landowners. The Defendants were a firm of builders who entered into a contract with the Plaintiffs to build a house on the Plaintiff's land. Shortly prior to completion of the house disputes arose. (ii) In early 2007, the Plaintiffs commenced proceedings in the CTTT against the Defendants. The Defendants defended that claim and cross-claimed against the Plaintiffs. A number of events occurred during the course of the proceedings including amendment and the service of Calderbank letters but the detail of these and of the various claims can be either ignored or at least deferred for the moment. (iii) On 8 and 9 May and 28 and 29 July 2008 the CTTT proceedings were heard by a CTTT Member, Dr Smith. It would seem that at the conclusion of the hearing, Dr Smith ordered that the Plaintiffs file submissions by 19 August and the Defendants file theirs by 9 September and that no orders were made for submissions in reply. There is no evidence before me that any request to file submissions in reply was made at that time. (iv) The Plaintiffs' submissions were filed and served on 26 August 2008. Apart from some 25 pages being reports of 2 previous Court of Appeal decisions, the submissions extended to some 13 pages. Save and except for what was said in the 2 concluding paragraphs, there was no reference to legal costs. What was said in those paragraphs was:- 81. It is submitted overall as a result of the above, that the builder should pay the Applicants $105,965 plus the legal costs of this hearing, together with the costs of the engagement of the various experts by the Appellants. A schedule as to the cost of engaging experts is attached. 82. It is further submitted that the Respondents' application against the Applicants should be dismissed in its entirety with costs awarded to the Applicants. (v) The schedule of the cost of experts referred to 3 persons, broke the costs of 2 of them down into 4 categories and made a total claim of around $17,600. (vi) The Defendants' submissions were filed and served on 26 or 29 September 2008. They extended to some 22 pages in addition to copies of 4 previous decisions and an extract from a text book, all of which were relied on in the body of the submissions. Again, it was only in the last paragraph of those submissions that there was any reference to costs. The submissions concluded:- It is submitted that the claim by the Owners as to defects would be limited to the defects agreed to by the experts and at the costs as agreed to by the Builder or that the Builder be able to remedy the defects. The Builder is entitled to succeed in his claim for the final progress payment in the sum of $18,674.30, the variations claimed in the sum of $24,491.73 plus interest in accordance with the Contract, and costs. (vii) Mr Jurd, the solicitor for the Plaintiffs, thought that some submissions in reply should be made on behalf of the Plaintiffs. On 2 October 2008 he wrote seeking, and on the following day obtained, the consent of the solicitor for the Defendant, Mr Hanrahan, to approach the CTTT to obtain permission to make submissions in reply. (viii) On 7 October 2008 Mr Jurd wrote to the CTTT seeking that permission. (ix) On 13 October Mr Jurd wrote again to the CTTT, referring to his letter of 7 October and asking whether submissions could be made within 7 days. (x) 16 October 2008 is the date of a document containing reasons and orders of Dr Smith. The parties were not informed of this until some time later. (xi) On 22 October, 12 November and 26 November, Mr Jurd wrote again, asking for permission to make the submissions or for the matter to be re-listed. He repeated the request in a phone call to the CTTT on 26 November. (xii) On 1 December in another phone called he was advised by an employee of the CTTT that the CTTT would only consider one submission on costs from each party. Also on 1 December the CTTT wrote saying that on 27 November the Member had given a direction to the CTTT registry to let the parties know to that effect. (xiii) On 1 December Mr Jurd wrote to the CTTT asking whether the CTTT Member had asked for submissions on costs and repeating his earlier request for the matter to be re-listed. (xiv) On 5 December 2008, Mr Jurd wrote again, asking when costs submissions were required and again raising his prior, and still unanswered, correspondence. (xv) On 22 December 2008, Mr Jurd wrote yet again to the CTTT complaining that he had received no response to earlier correspondence, expressing concern that he was being denied an opportunity to address all submissions made by on behalf of the Defendants and seeking a response to the matters he had previously raised. Again his request was in vain. (xvi) Mr Jurd seems to have kept the Defendants' solicitor generally informed of the communications he was having with the CTTT. On 13 January 2009, he faxed to the Defendants' solicitor copies of the CTTT notice of 1 December referred to in sub-paragraph (xii) above and his letters referred to in sub-paragraphs (xiii), (xiv) and (xv). (xvii) The next event seems to have occurred on 26 May 2009 when the CTTT wrote enclosing "a copy of the Final Determination of Costs". That document, signed by Dr Smith and dated 20 May 2009, was in the following terms:- FINAL DETERMINATION OF COSTS When written reasons were handed down in December 2008 my preliminary determination on the question of costs was indicated. I allowed the parties time to file submissions on costs if they were not satisfied with my preliminary determination. I have considered the submissions, including one to make further submissions or submission in reply. I do not think my adjudication would be assisted by hearing further from the parties. Having considered all of the material, I confirm my initial findings and lift the stay on the orders handed down with the written reasons. (xviii) In response to a letter of 27 May from Mr Jurd saying in effect that he had not previous knowledge of "written reasons" or a "preliminary determination", on 28 May the CTT wrote enclosing a copy of the "reserved decision and orders from the hearing of the application on 28 and 29 July 2008". The enclosed document containing reasons and what purported to be "orders" was signed by Dr Smith and dated, not in December as the CTTT letter of 26 May indicated, but 16 October 2008. (xix) In the reasons Dr Smith referred to what one may infer were the various items the subject of claim or counterclaim, indicating the extent to which they were allowed and providing some brief explanation of why. His conclusion and "orders" were expressed as follows:- Conclusion The final result is this. The only item I allow in favour of the owner is $26,481.71 for the defects and incomplete works in the Scott Schedule. The fireplace, brickworks, drainage and PC items and other claims do not succeed. In favour of the builder I award the final progress payment of $18,674.00 and $7,744.80 of the variations claimed, a total of $26, 418 80. The difference is $62.91 payable by the builder to the owner. The claims all but cancel each other out. Nevertheless many of the claims brought by the owners have not succeeded. In the circumstances the appropriate order would seem to be that the owners pay one half of the builder's costs as agreed or assessed. Orders 1. Wayne Schneider and Kylie Schneider are to pay Andrew Brincat and Debbie Brincat $62.91 immediately. 2. Andrew Brincat and Debbie Brincat are to pay one half of the costs of Wayne Schneider and Kylie Schneider as agreed or assessed. 3. Order 2 stayed till 1 December 2008 pending receipt of submissions from parties on costs. (xx) On 3 July 2009, Mr Hanrahan, the Defendants' solicitor, wrote to the CTTT pointing out that the decision of 16 October was not made available to the parties until 29 May, by which time Order 3 had expired, and asking that Order 3 be extended to enable the parties to make submissions on costs. (xxi) On 15 July, an employee of the CTTT phoned Mr Jurd about Mr Hanraha's letter. Mr Jurd indicated he did not consent - it may be inferred to the time under Order 3 being extended. (xxii) On 20 July, Mr Jurd wrote to Mr Hanrahan, inter alia, objecting to the course that Mr Hanrahan was endeavouring to pursue. (xxiii) A letter from the CTTT of 13 August advised that on 11 August 2009, the CTTT made the following orders:- 1. Timetable made by the Tribunal on 16 October 2008 is amended. 2. Time for compliance with order number 3 is extended to 31 August 2009. (xxiv) On 11 September the CTTT wrote again, advising that on 8 September 2009, the following procedural directions were made:- 1. Timetable made by the Tribunal on 11/8/09 is amended. 2. Time for compliance with direction 3 is extended to 14/9/09. It seems that these orders were made at the Plaintiffs' request, their solicitor and counsel being out of the country at the time. (xxv) On 14 September Mr Jurd filed and served the Plaintiffs' submissions on costs. (xxvi) On 15 September the Defendants' solicitors forwarded to Mr Jurd a copy of the costs submissions made on behalf of the Defendants. In these submissions the Defendants sought to rely on a letters of 18 January and 16 August 2007 which were headed "Without prejudice except as to costs" and contained proposals for settlement. The Defendants' submissions contended that the second accorded with the form suggested in Calderbank v Calderbank [1975] 3 All ER 333 and that the Plaintiffs should be ordered to pay the Defendants' costs on an indemnity basis or, in the alternative the (whole of) the Defendants' costs as agreed or assessed. (xxviii) The submissions advanced on behalf of the Plaintiffs had not canvassed the topic of Calderbank letters - the Plaintiffs had served one too. Feeling the need again to respond to submissions of the Defendants, Mr Jurd on 21 September 2009 forwarded supplementary submissions. (xxvi) On 6 November 2009, the CTTT wrote to the Plaintiffs' solicitors advising that on 5 November the Tribunal had made a further order and enclosing a copy of the order and reasons. The order was:- Andrew Brincat and Debbie Brincat are to pay the costs of Wayne Schneider and Kylie Schneider as agreed or assessed. 4Dr Smith's reasons for that decision were as follows:- On 16 October 2008, a decision was published on the substantive claim. Interim costs orders were made with an invitation to the parties to make submissions on costs. After some extensions of time costs submissions were filed for both parties. On behalf of the home owners, it was suggested that the Tribunal was functus officio and that no further adjudication on costs was possible. I do not accept that submission as it was clear that the costs component of the reasons was interim and indicative only. There would have been no point is setting out a timetable for submissions if it were not so. On behalf of the builder, it was submitted that indemnity costs should be ordered as from August 2007 when a Calderbank letter was delivered. Of course, as the Tribunal of law and fact I had no knowledge of the letter until costs submissions were received. The builder asserts that the offer therein was not less advantageous than the final result and that, in accordance with principle, indemnity costs should be awarded from that date. The problem with that submission is that the Calderbank principle is not easy to apply to a case such as this where (a) the builder substantially amended his claim after the letter was forwarded and (b) the settlement and offer (sic) and final result cannot be completely reconciled because of the differences of work orders and monetary award. Nevertheless, the principles underlying the settlement and costs question both at common law and under Uniform Civil Procedure Act are such as to amount to a heavy emphasis on encouraging settlement before hearing. In the present case in the light of the submissions received, I find that the appropriate final costs order is that Andre Brincat and Deborah Brincat are to pay the costs of Wayne Schneider and Kylie Schneider as agreed or assessed and I order accordingly. 5The history I have set out records what is, I think, the most extraordinary litany of failures by a court or tribunal that I have experienced in nearly 50 years in the legal profession. Numerous letters from the solicitor for one of the parties were not answered or even acknowledged and the parties not informed of a decision made until months afterwards. How these failures came about is not my concern but they should be considered by whoever is ultimately responsible for the administration and conduct of the CTTT. 6A convenient starting point for present purposes are the "orders" made in the Member's decision of 16 October 2008, whether made then or in December 2008 as is asserted in the "Final Determination of Costs". When regard is had to both order 3 made at that time and, although I would not regard this matter as decisive, Dr Smith's statement "In the circumstances the appropriate order would seem to be that the owners pay one half of the builder's costs as agreed or assessed" and despite the terms in which it is expressed, it is clear that the "order" " Andrew Brincat and Debbie Brincat are to pay one half of the costs of Wayne Schneider and Kylie Schneider as agreed or assessed", was intended only as an indication of what Dr Smith thought at that time - a tentative conclusion liable to change. The form of expression was an "obvious error" that the CTTT was entitled to change pursuant to the terms of s 50 of the Consumer, Trade and Tenancy Tribunal Act 2001 . 7The same cannot be said of the decision dated 20 May 2009. It was clearly intended to be, as its name made clear, a "Final Determination of Costs", whatever error or deficiencies there may have been in Dr Smith's arriving at it. 8In this Court, the Defendants unequivocally urged that there were such errors. Although a declaration as to invalidity of the 20 May 2009 determination is sought in the Amended Summons, the Plaintiffs' preferred position is that the 20 May 2009 determination, with its endorsement of order 2 of 16 October 2008 be allowed to stand. 9Much of the argument of both parties revolved around the question of whether, following the decision dated 16 October, there had been a denial of procedural fairness by the CTTT, as to the consequences thereof, and whether the CTTT had, by revisiting the matter of costs and affording the parties an opportunity to make further submissions, overcome any earlier lack of procedural fairness. Although it was not suggested that the section was the exclusive source of an obligation on the part of the CTTT to afford such procedural fairness, attention was directed to the terms of s 35 of the Consumer, Trader and Tenancy Tribunal Act. The section provides:- 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. 10While it is understandable that the unusual course of events after 16 October should have led to attention being concentrated on these events, it is clear from paragraphs 3 (iv) and (vi) above that the topic of costs was addressed by both parties in their original submissions. What each said was brief and no attention was given to what costs order(s) should be made in the event that there was limited or very limited success in one or both parties' principal claims or to any Calderbank letters. Neither party suggested that the question of costs should be deferred pending a decision on the principal claims. However there is nothing to suggest, either in the terms of the submissions or in other evidence in the case, that at that time either the Plaintiffs and Defendants were in any sense prevented from making whatever submissions they wanted. 11It may accepted that in cases where there are a multiplicity of claims, it is commonly more convenient to defer submissions on costs until after decisions are made on the principal issues. However, while in this case, as commonly is the situation in disputes involving building work, there were a number of separate items said to be defective or not done or variations, there is nothing to suggest that the consequences of partial success could not have been dealt with adequately in the submissions of August and September 2008. 12Certainly, it would have been inappropriate at that time to inform the CTTT Member of the terms of any Calderbank letter. However he could easily have been asked to defer the question of costs or informed that there were such letters that made it essential that postponement of any decision on costs occur. As I have said, this was not done. Nevertheless, in light of the matters to which I have referred, it is impossible to conclude otherwise than that, in the August and September submissions, the parties were given a reasonable opportunity to make submissions in relation to the issue of costs in the proceedings. That, with the benefit of hindsight they may have wished to say more is nothing to the point. 13Thus had Dr Smith, in his decision of 16 October 2008 simply made an order for costs, either in the form of Order 2 in that document or in the form of the order made on 5 November 2009, neither party could have complained of a breach of s 35 or a denial of natural justice so far as costs are concerned. Did anything occur thereafter, particularly before 20 May 2009, to change things? 14(Before addressing that question I should say this. The only evidence that the decision of 16 October was ever delivered or handed down are Dr Smith's statements to that effect in the "Final Determination of Costs" and in the first paragraph of the reasons given on 5 November. The two statements are irreconcilable as to the time that decision of 16 October was published. Notwithstanding that the history of events also casts doubt on the accuracy of those statements, the hearing before me proceeded upon the basis that there was some publication of the decision in 2008. It may be noted that s 46 and s 49 of the Act envisage that reserved decisions may be delivered without prior notice to the parties. Regulation 35 of the Consumer Trade and Tenancy Tribunal Regulations 2002 (since repealed), envisaged that notice could be given within 7 days thereafter.) 15In summary, the only things possibly relevant for present purposes that seem to have occurred before 20 May was the formulation of the decision of 16 October, its handing down on some unknown date in 2008 without notice to or knowledge of the parties, and the communication to them of a message from Dr Smith of 27 November that he would only consider one submission on costs from each party. The decision included "Order" 2 as I have construed it and a "stay" of that "order" until 1 December in contemplation that the parties would make further submissions on costs. 16The mere affording of a further opportunity to make submissions on costs could not convert what had been a reasonable opportunity to make submissions on costs prior to 16 October into an absence of the same. However the question arises whether the handing down of the decision, its terms, including the intimation of the Member's views on costs, and the expression of willingness to entertain further submissions increased the standard by which a reasonable opportunity should be judged, or created new issues in respect of which a fresh reasonable opportunity had to be afforded. 17I am not persuaded that either of these circumstances arose. The matter can be tested this way. Assume that the parties were in fact formally notified of the decision and "orders" of 18 October well in advance of 1 December; assume also that, prior to receiving any submissions canvassing Order 2, the Member had further thought about the matter and reached a concluded view. It does not seem to me that "orders" 2 and 3 of made at that time created any entrenched rights that could not be varied by the Member. "Order" 2 was, as I have indicated, only an expression of a tentative view and order 3 was at most an order for a stay - inherently capable by reason of its very nature of being varied - and of willingness to receive further submissions. Furthermore, insofar as order 3 created any rights, it was limited by its own terms to 1 December. 18In these circumstances, "Orders" 2 and 3 of the decision of 16 October 2008 did not create any rights or obligation to afford any further opportunity to make further submissions, and certainly none that extended beyond 1 December 2008. Thus the Member was entitled to make the orders he did on 20 May without breaching s 35 of the Act. By parity of reasoning, there was no denial of natural justice in what he did prior to, and by making, those orders. 19The point should also be made that, insofar as the Defendants were notified of an opportunity to make further submissions, they seem to have elected not to make any. I appreciate that the fax of 13 January 2009 from Mr Jurd did not, and indeed given his own state of ignorance, could not, inform the Defendants' solicitor of the orders of 16 October 2008 or of any time limit for such submissions. However, the copy of the notice of 1 December 2008 from the CTTT clearly indicated that some further submissions were contemplated. 20The next issue that arises is whether the decision of 20 May precluded the Tribunal from revisiting the matter as it purported to do by its decision of November 2009. There is no express statement in the Act as to when decisions of the Tribunal become final. Some guidance is afforded by the terms of s 32 which deals with amendments and irregularities, s 50, s 51, s 52 and s 68. It is not necessary that I set out s 32. So far as is presently relevant the other sections provide:- 50 Power to correct decisions of Tribunal (1) If, after the making of a decision by the Tribunal, the Tribunal is satisfied that there is an obvious error in the text of a notice of the decision or a written statement of reasons for the decision, the Tribunal may direct the Registrar to alter the text of the notice or statement in accordance with the directions of the Tribunal. (2) If the text of a notice or statement is so altered, the altered text is taken to be the notice of the Tribunal's decision or the statement of its reasons, as the case may be, and notice of the alteration is to be given to the parties in the proceedings in such manner as the Chairperson may direct. (3) Examples of obvious errors in the text of a notice of a decision or a statement of reasons for a decision are where: (a) there is an obvious clerical or typographical error in the text of the notice or statement, or (b) there is an error arising from an accidental slip or omission, or (c) there is a defect of form, or (d) there is an inconsistency between the stated decision and the stated reasons. (4) The powers of the Tribunal under this section may be exercised by the Chairperson or by the member who presided at the proceedings to which the decision relates. 51 Recovery of amounts ordered to be paid (other than penalties) (1) For the purposes of the recovery of any amount ordered to be paid by the Tribunal (including costs, but not including a civil or other penalty), the amount is to be certified by the Registrar. (2) ... (3) A certificate of the Registrar that: (a) is given under this section, and (b) is filed in the registry of a court having jurisdiction to give judgment for a debt of the same amount as the amount stated in the certificate, operates as such a judgment. 52 Compliance with order of Tribunal (1) A person must not wilfully contravene or fail to comply with an order of the Tribunal made under this or any other Act. ... (2) Subsection (1) does not apply to or in respect of: (a) an order for the payment of any money, or (b) ... 68 Rehearings by Tribunal (1) A party in any proceedings that have been heard and determined by the Tribunal ( " the completed proceedings " ) may, in the manner and within the time prescribed by the regulations, apply to the Chairperson to have the completed proceedings reheard by the Tribunal. (2) The grounds on which such an application may be made are that the applicant may have suffered a substantial injustice because: (a) the decision of the Tribunal in the completed proceedings was not fair and equitable, or (b) the decision of the Tribunal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the completed proceedings were being heard). (3) ... (7) The Chairperson is not to grant the application unless it appears to the Chairperson that the applicant may have suffered a substantial injustice. 21Although it is implicit in s 51 that an order of the CTTT does not operate as a judgment with whatever is to be implied in consequence, it is a necessary inference from the terms of s 50 that the CTTT is not free to alter a decision merely because it forms the view that the decision contains error. In that s 68 provides for a rehearing in the circumstances defined, it also provides a compelling indication that a Member is not entitled in other circumstances to himself re-hear a matter. 22It follows that the re-consideration of the matter by Dr Smith after 20 May 2009 was something he had no jurisdiction to undertake. His only valid decision on costs is that embodied in Order 2 of the document of 16 October 2008 as confirmed in his decision of 20 May 2009. 23This conclusion makes it unnecessary for me to consider other arguments advanced on behalf of the Plaintiffs. It may not be inappropriate however to add the following. In rejecting a submission made on behalf of the Plaintiffs that the CTTT was functus officio , Dr Smith said that "it was clear that the costs component of the reasons was interim and indicative only." That statement is to ignore his decision of 20 May which clearly was not. 24Secondly, while recognising some of the difficulties inherent in the Calderbank letter relied on by the Defendants and not awarding indemnity costs on the basis of the letter, it seems to me to be a necessary inference from the penultimate paragraph of his reasons of 5 November 2009 that Dr Smith relied on that letter as a reason for making the costs order he then made. Having regard to the fact that implementation of the proposal contained in it required a continued relationship between adverse litigants and that the offer in the letter was open for acceptance for only 1 day it seems to me impossible to say that offer was one that it was unreasonable for the Plaintiffs not to accept - see Elite Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [99]. In that situation, the letter should have played no part in the costs decision and, the letter being referred to in Dr Smith's reasons of 5 November 2009, there is an error of law on the face of that record. 25There was not debate during the hearing as to the most appropriate form of relief. Subject to any further submissions that the parties may wish to make it seems to me that it is sufficient if, without making any declaration as to the orders of 16 October 2008 and 20 May 2009, I simply make:- An order in the nature of certiorari that the decision of the Consumer, Trader and Tenancy Tribunal dated 5 November 2009 in matters HB 07/07613 and HB 07/13269 be quashed. 26There remains the question of costs in this Court. Prima facie, as the successful parties, the Plaintiffs should have an order in their favour. Although the Defendants chose to oppose the Plaintiffs' claim in this Court, there is however something to be said for the view that, in light of the history of proceedings before it, the CTTT should have to bear some of the costs in this Court. What I propose to do is stand over the matter and give the CTTT notice I am considering such an order. 27At this stage the matter will stand over until a convenient date at 9.30am for mention before me.