Civil and Administrative Tribunal New South Wales Medium Neutral Citation: SHH Ltd v Woodorth Plumbing Services Pty Ltd [2014] NSWCATAP 46 Hearing dates: 11/08/2014 Decision date: 05 September 2014 Jurisdiction: Appeal Panel Before: M Schyvens, Deputy President S Thode, Senior Member Decision: 1. The appeal be upheld. 2. The orders 1 and 2 made on 26 February 2014 in both matters HB13/55515 and HB13/57683 be set aside. 3. The whole of the proceedings in matters HB13/55515 and HB13/57683 be remitted to the Consumer and Commercial Division for rehearing before a differently constituted Tribunal. Catchwords: ADMINISTRATIVE LAW - Civil and Administrative Tribunal NSW - appeal panel - residential building work - tribunal decided on a basis that was not in issue or argued in the proceedings - denial of procedural fairness Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Cases Cited: Warkworth Mining Limited v Bulga [2014] Category: Principal judgment Parties: SHH Ltd (Appellant) Woodorth Plumbing Services Pty Ltd (Respondent) File Number(s): AP 14/0041 Decision under appeal Jurisdiction: 150003 Date of Decision: 2014-02-26 00:00:00 Before: G Meadows (Senior Member) File Number(s): HB13/55515 HB13/57683 reasons for decision Introduction 1The appellant is the owner of a property which is used as a training facility and accommodation for artists and is also the residence of one of the owner's directors. The owner retained the respondent, a licensed plumbing company, to carry out work on a bathroom at the property in or about August 2013. The owner was, however, dissatisfied with the quality of the plumbing building work and did not pay for it. On 22 October 2013 the respondent plumbing company commenced proceedings in the Home Building Division of the Consumer Trader and Tenancy Tribunal, seeking payment of $3408.35 (HB13/55515). On 7 November 2013 the owner commenced proceedings seeking relief from payment for the work as claimed and damages for defective and incomplete residential building work (HB13/57683). 2The matters were heard together on 12 February 2014 in the Consumer and Commercial Division of this Tribunal under cl 7 of Schedule 1 of the Civil and Administrative Tribunal Act 2013 (the Act). The Tribunal delivered its decision on 26 February 2014 and made orders as follows: 1. In matter No HB 13/55515, the respondent is to pay the applicant the sum of $3408.35 within 30 days of the date of these orders. 2. Application number HB13/57683 is dismissed. 3The owner has appealed against the decision under s 80(2)(b) of the Act. 4For the reasons which follow, we have concluded that the appeal should be allowed and the whole of both proceedings should be remitted to be reheard in the Consumer and Commercial Division by a differently constituted tribunal. 5The reasons why we have concluded that the appeal should be allowed can be stated relatively briefly. There was, however, a certain amount of confusion on the part of the Appeal Panel and among the parties as to what was actually being determined at the Appeal Panel hearing on 11 August 2014 and consequently we shall also explain what occurred and the reasons why, in the interests of facilitating the just, quick and cheap resolution of the real issues in the proceedings, we took the course we did. 6These reasons deal with the appeal first and then address the procedural confusion and how it was resolved. The Appeal The Grounds of Appeal 7The grounds of appeal were set out in a seven page document, attached to the notice of appeal form, entitled "Grounds of Appeal" together with a "short summary of each reason why the appellant considered the Tribunal was wrong". 8The appellant identified its grounds of appeal as follows: [the Tribunal] made an error in law by having ordering the full amount of money to be paid...for defective work; made factual findings when there is no evidence; applied the wrong law; took into account an irrelevant consideration; [the Tribunal] has made enormous error ordered the applicants to pay a full invoice for defective contractors work on "quantum meruit basis" which have been not claimed by the contractor where: a. The contract has not been signed; b. Mr Gifford James [xxx] is the unlicensed plumber who worked at [xxx] Granville, without any supervision and he himself supervised an apprentice which he is not allowed to do; c. Hours worked by the unlicensed plumber and apprentice are in dispute. Please note that Woodorth Plumbing Services Pty Ltd did reduce the invoice for four hours work to accommodate for the SSH Limited claim. d. Work is defective and the cost for reparation of the defective work exceeds several times the original bill... ...[the Tribunal] has made the error dismissing the SSH Limited claim that the contractor's work is defective insisting on Ms Imielska's and Mr Imielski's to clarify all aspects of plumbing work by asking leading questions, confusing completely Ms Imielska when he has spoken about a cistern and Ms Imielska has talked about the plumbing system ... [the Tribunal] has made the error by assuming facts which have been not written in the statement where there have been not factual basis for these statements... It has to be clarified that the Woodorth Plumbing Services Pty Ltd did acknowledge work done by them is defective. Therefore, that was not intended by the applicant to prove their claim but to show that the necessary repairs would cost several times more than the original Woodorth Plumbing Services Pty Ltd bill. ... [the Tribunal] has made the error talking about the two independent "licensed plumbers" insisting that they need to provide reasons for needed repairs, where in fact, defective work has been acknowledged by the Woodorth Plumbing Services Pty Ltd and partly rectified by other contractors; majority has to be performed to have a working bathroom at [xxx] Granville. ...The reasons for the provided quotes is no need for documentation of the defective work which has been already acknowledged by the contractor but to provide the evidence of the extensive cost according to market value of the needed repairs to be carried on.. Woodorth Plumbing Services Pty Ltd has the opportunity to provide own evidence of the needed repairs cost. The company has failed to provide any evidence of the needed repairs cost to be carried out or offered their rectification by its licensed plumbers." 9The accompanying 30 paragraphs referred to as the "short summary" are not set out here but have been included in the Appeal Panel's consideration. 10As the Appeal Panel understands it, the owner/appellant's attack on the decision at first instance had 2 principal bases: (1)the Tribunal erred in ordering that the respondent was entitled to recover the full amount sought on a quantum meruit basis, when such a claim was not made by the respondent and the appellant did not have the opportunity to address such a claim; and (2)the Tribunal made errors of law in reaching its conclusion that the full amount claimed should be paid for what was said to be admittedly defective work, including making factual findings unsupported by evidence, applying the wrong law and taking into account irrelevant considerations. 11In addition, there were other grounds of appeal raised by the appellant. These grounds included whether the Tribunal at first instance erred in giving little or no weight to the evidence contained in the quotations for repair relied upon by the appellant in circumstances where the work was, on the appellant's case, acknowledged to be defective, failing to cancel the respondent's licence, failing to order that the respondent make an apology and failing to afford the appellant procedural fairness because it was precluded from raising arguments as a consequence of a misunderstanding between the Tribunal and the appellant about the words "cistern" and "system". 12These grounds of appeal raise, or arguably raise, questions of law and accordingly the appellant was entitled to bring these aspects of its appeal as of right under s 80(2)(b). Indeed, the respondent accepted that the appellant did not require leave to appeal in the reply to appeal which the respondent filed in this matter. In so far as there were other grounds raised by the appellant that may not have been limited to questions of law, in the circumstances of this case it will not be necessary to deal with those grounds and consider whether leave should be granted as the appeal should be allowed on the first ground set out above. 13In its reply to appeal, the respondent set out its response to the grounds relied upon by the appellant as follows: 1. The Tribunal member made no error in law. 2. The respondent claims the Tribunal made no factual findings where there was no evidence to support those findings. ...the Tribunal member did not take into account any irrelevant consideration. ...the Tribunal considered all relevant considerations and evidence before it and made no errors in this regard. 14Given the conclusions we have reached on the quantum meruit ground of appeal, it is not necessary to address any of the grounds of appeal relied upon. The Decision based on Quantum Meruit 15As to the quantum meruit issue, the reasons for decision given by the Tribunal at first instance included the following: As the Contractor [the respondent plumbing company] has breached section 7AAA of the Act, [Home Building Act 1989] he [sic] is not entitled to rely on the contract: section 10 of the Act. However by section 94(1A), if the Tribunal considers it "just and equitable" the Contractor is entitled to recover monies on a quantum meruit basis. This application was not originally brought on a quantum meruit basis. The evidence provided by the Contractor in accordance with Tribunal directions did not include quantum meruit evidence. Neither party raised this issue in their evidence at the hearing itself (the owner's claim being limited to licensing issues). During the hearing, in relation to a dispute over the hours worked by the Contractor's employees or subcontractors, the respondent presented time sheets prepared in the accordance with the Contractor's usual business practice. That evidence, together with the unchallenged evidence that the Contractor carried out certain plumbing works (necessary as the basis to bringing a claim for defective works by the owners) is sufficient to demonstrate quite clearly, in my view, that the Contractor has proved his claim on a quantum meruit basis in the amount of $3,408.35. I allow that claim. (underlining added) 16The Tribunal below relied upon time sheets presented by the respondent in relation to an issue other than a quantum meruit claim and the undisputed fact that the respondent did some plumbing work for the appellant. On this basis it was concluded "the Contractor has proved his claim on a quantum meruit basis in the amount of $3,408.35. I allow that claim". In fact, no such claim had ever been made by the respondent. The appellant had not addressed such a claim in its evidence nor was it put on notice that it should do so. 17On the basis of the reasons for decision and the applications the subject of the two proceedings at first instance, the Appeal Panel finds that the respondent did not bring its claim for payment on a quantum meruit basis and its evidence did not include the evidence which would normally be relied upon in a quantum meruit claim. Furthermore, when the Tribunal below stated that neither party raised this issue in their evidence at the hearing itself, we understand this to mean that the Tribunal did not raise the possibility with the parties that it might decide the matter on that basis nor did any of the parties raise such a possibility. 18The Appeal Panel concludes that neither party made, or was given the opportunity to make, submissions on whether a claim based upon a quantum meruit was available or should be upheld. Nonetheless the Tribunal proceeded to uphold the respondent's application on the basis of a quantum meruit claim. 19It is well established that it is a denial of procedural fairness, and thus an error of law, to determine a claim on a basis that was not in issue or argued in proceedings. In Warkworth Mining Limited v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105 at [40] and [41] Bathurst CJ said: There will be procedural unfairness where information is used by a decision maker in a way that could not reasonably be expected by one party and that party is not given an opportunity to respond to that use... Another aspect of procedural fairness was argued in the present case, namely, that where a court determines a matter on a basis that was not in issue or argued in the proceedings, there have been a denial of procedural fairness: see Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141. This is a basic requirement for a fair trial. 20This is what occurred in the present case. The Tribunal at first instance determined the matter on a basis that was not in issue or argued in the proceedings. Accordingly, the appellant's appeal should be upheld. 21There is a complication in that there were two proceedings which were the subject of the orders appealed from, the respondent's claim under a contract for plumbing services provided (HB13/55515) and the appellant' s claims based on defective or deficient work done by the plumber (HB13/57683). The issues in these two proceedings were interrelated. The respondent's claim for payment for the work involved consideration of whether the work was defective or incomplete. In the circumstances of this matter, it was clear to the Appeal Panel that these remitted proceedings cannot be meaningfully decided without reference to the owners' allegations as to defective work. The appellant's claim for defective and incomplete work obviously included the same issues. 22It is necessary and appropriate having regard to both practicality and fairness to set aside the orders made in both proceedings. Doing so will avoid the possibility of inconsistent findings being made in relation to whether or not the plumbing work was defective or incomplete, as alleged by the appellant. If, instead, the decision in respect of the respondent's claim were set aside and the decision in relation to the appellant's claim was allowed to stand, the possibility of inconsistent findings is manifest. This should be avoided. 23On these bases, the Appeal Panel proposes to order that: (1)The appeal be upheld; (2)The orders 1 and 2 made on 26 February 2014 in both matters HB13/55515 and HB13/57683 be set aside; (3)The whole of the proceedings in matters HB13/55515 and HB13/57683 be remitted to the Consumer and Commercial Division for rehearing before a differently constituted Tribunal. The Procedural Confusion 24As noted at the outset, there was some unfortunate confusion as to what was actually being heard by the Appeal Panel on 11 August 2014. 25At the beginning of the hearing, it was the Appeal Panel's understanding and apparently that of the respondent that the hearing related to the substantive appeal. In contrast, the appellant understood that the hearing was limited to the questions of what further directions should be made for the preparation of the appeal and whether a stay should be granted. As a consequence, the appellant sought an adjournment of the hearing on the basis that it had not come prepared to argue the substantive appeal. 26The confusion arose out of the circumstances leading up to the listing on 11 August 2014. In its notice of appeal, the appellant had sought a stay of the orders requiring it to pay money. 27On 24 April 2014 the Appeal Panel, constituted by Mr S Westgarth, Deputy President, ordered as follows: The appellant's request for a stay of the operation of the orders made on 26 February 2014 is refused. No basis for the request for the stay has been given other than the implicit basis that the appellant believes that the orders made were wrong. The respondent is entitled to the benefit of the orders already made until and unless the Appeal Panel makes orders upholding the appeal. 28The matter was listed for directions before Mr S Westgarth, Deputy President, on 6 May 2014 who made the following directions: (1)The appellant is to file and serve submissions on or before 22 May 2014. (2)The respondent is to file and serve submissions on or before 5 June 2014. (3)The appellant is to file and serve a transcript of the hearing on 12 February 2014 on or before 22 May 2014. (4)The submissions must include copies of the documents relied upon at the hearing on 12 February 2014. 29Two letters complaining about those directions, which had been made in the appellant's absence, were sent by email to the Registry by the appellant on 2 and 20 May 2014. 30The Appeal Panel, constituted by the President, Wright J, proceeded to list a further urgent telephone directions hearing for 26 June 2014 to address the concerns raised in the letters of 2 and 20 May. Notice of that telephone hearing was not issued, however, until 24 June 2014. At the appeal hearing, the appellant asserted that it did not receive that notification until less than 24 hours before the appointed date and were unable to attend. In their absence, Wright J directed that: (1)The appellant's emails of 2 May 2014 and 20 May 2014 be treated as a fresh application for a stay and an application to vacate directions made on 6 May 2014 respectively. (2)The appellant to file and serve any evidence and submissions on which it relies in relation to each of those applications on or before 17 July 2014. (3)The respondent to file and serve any evidence or submissions on which it relies in relation to each of those applications on or before 31 July 2014. (4)The applications be set down for hearing for two hours on Monday 11 August 2014. 31These directions indicate that what was proposed to be heard on 11 August 2014 were the applications for further directions and the application for a stay not the substantive appeal. 32Unfortunately, these directions were not brought to the attention of the Appeal Panel, as constituted on 11 August 2014, until the matter was raised by the appellant on that date. 33In these circumstances, the Appeal Panel might ordinarily have been minded to adjourn the proceedings. It decided not to do so, however, having regard to the unusual circumstances of this case and the duty on the Tribunal to facilitate the just, quick and cheap resolution of the real issue in proceedings under s 36 of the Act and the requirements of ss 36(4) and 38(4) of the Act. 34The Appeal Panel was aware and took into account when considering the appellant's application for an adjournment that the appellant had a very strong argument that there had been a breach of the obligation to afford procedural fairness as a result of the Tribunal's deciding the matter on a basis that had not been raised in or argued in the proceedings. Therefore, if the Appeal Panel decided to uphold the appellant's appeal after hearing from the respondent on 11 August 2014, the appellant would not be prejudiced by the refusal of an adjournment and, indeed, would save the time and expense involved in a further hearing. 35The Appeal Panel also took into account that it was not in dispute that the money payable under the first order made by the Tribunal below had already been paid by the appellant and, accordingly, there was no order in relation to which a stay would be appropriate or necessary. 36Finally, it took into account that the respondent had come prepared to argue the substantive appeal and accordingly the respondent would not be prejudiced if an adjournment were not granted. 37On this basis, the Appeal Panel determined that it should not adjourn the hearing but should proceed to hear the substantive appeal. 38After hearing full submissions for the respondent, the Appeal Panel was satisfied that it should allow the appellant's appeal and make the orders outlined above. If it had not been so satisfied, it could have granted the adjournment at that point. That course, however, was not necessary. 39By refusing the appellant's adjournment in the circumstances and upholding the appellant's appeal after receiving all the submissions that the respondent wished to make, the Appeal Panel believes that it achieved a result whereby the parties were saved the waste and expense of a further hearing, the appellant has not been prejudiced as its appeal has been upheld and all the orders below have been set aside, the respondent has not been prejudiced as it has had a full opportunity to put its case on the appeal and the real issue in the proceedings was determined justly, quickly and cheaply. 40It is unfortunate that such confusion arose in the first place and it cannot be attributed to any fault on the part of the parties. Orders 41In these circumstances, the Appeal Panel makes the following orders: (1)The appeal be upheld. (2)The orders 1 and 2 made on 26 February 2014 in both matters HB13/55515 and HB13/57683 be set aside. (3)The whole of the proceedings in matters HB13/55515 and HB13/57683 be remitted to the Consumer and Commercial Division for rehearing before a differently constituted Tribunal. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar ******** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 September 2014