Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Merrick v Zhu & Ye [2020] NSWCATAP 35 Hearing dates: 5 February 2020 Date of orders: 05 March 2020 Decision date: 05 March 2020 Jurisdiction: Appeal Panel Before: P. Durack SC, Senior Member D Goldstein, Senior Member Decision: (1) Grant an extension of time until 4 October 2019 for the filing of the Notice of Appeal. (2) Allow the appeal. (3) Set aside the orders made by the Tribunal on 13 August 2019 in renewal proceedings number HB 19/33594. (4) Remit the renewal proceedings number HB 19/33594 for redetermination by a differently constituted Tribunal at first instance. (5) As to Order 4, the Tribunal at first instance is to make directions for the provision by the parties of such evidence and submissions as they now wish to rely upon. Catchwords: APPEALS---notice of hearing – procedural fairness Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Cases Cited: None cited Texts Cited: None cited Category: Principal judgment Parties: Michael Merrick (Applicant) Yun Zhu (Respondent) Dayong Ye (Respondent) Representation: Applicant (Self Represented) Respondents (Self Represented) File Number(s): AP 19/44930 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not Applicable Date of Decision: 13 August 2019 Before: D Harvey, General Member File Number(s): HB 19/20087 REASONS FOR DECISION Background and relevant events before the decision now appealed from 1. Mr Merrick, the appellant, who is involved in the building industry, appeals from a decision made in his absence on 13 August 2019 ordering him to pay $10,000.00 to the respondents. 2. The respondents, Ms Zhu and Mr Ye, are a couple who own a home in Woolongong. 3. At various times in 2016, 2017 and 2018 Mr Merrick carried out building work at the respondents' home. Precisely, what Mr Merrick originally contracted to do at the home is matter in issue between the parties. We have been shown two tax invoices for the original work each dated 2 December 2016 and each for the sum of $5,000.00. Each invoice refers to a payment "for maintained work including front veranda, leak repairs, screw replacement." It is fair to say that work to fix a leak into a living area underneath the veranda was, at least, a significant part of the work Mr Merrick was to carry out. The respondents say it was the sole objective of all of the work. 4. Differences between the parties reached the point where, in October 2018, the respondents commenced proceedings in the Tribunal for a refund of the $10,000.00 they had come to pay Mr Merrick. This was matter number HB 18/45224. In their application, the respondents set out, shortly, the history of the dealings about the work, including the lack of success in fixing the leak (although this history revealed that there were substantial periods of time between leaks). 5. In the application, it was said that the respondents just wanted their money back. Nevertheless, on 13 November 2018, consent orders were made which required Mr Merrick to " (a) rectify the source of any water ingress" and to make good any water damage. Under those orders it was specified that the respondents could seek to renew their proceedings on or before 15 February 2019 if the orders were not complied with. 6. There is no dispute that before on or about 30 November 2018, Mr Merrick carried out further work on the property and in this connection was at the respondents' home on 3 occasions. Mr Merrick told us that in this period the work he did included applying polyurethane to areas surrounding door to ceiling windows facing the veranda because it was from this area that he believed the leak into an area below was occurring rather than through the tiles on the veranda. From, at least, what Ms Zhu told the Tribunal at a subsequent hearing on 13 August 2019, to which we refer in more detail below, there is a dispute between the parties as to the extent of the rectification work that Mr Merrick actually carried out in this period in purported compliance with the consent orders made on 13 November 2018. 7. According to Mr Merrick, after checking with the respondents on a couple of occasions about any leak following rain and being informed that there was no leak, the next he heard about the matter was a text from the respondents on or about 13 August 2019 telling him that they had obtained an order from the Tribunal requiring that he pay them $10,000.00 8. The respondents accept that after heavy rain in July 2019 they did not inform Mr Merrick of a leak that occurred but instead, on 23 July 2019, commenced renewal proceedings and, ultimately, proceeded to obtain the order that he pay them $10,000. They took this approach, they say, because they believed Mr Merrick had had his chances to rectify the leak and what he should now do was compensate them. 9. However, in the renewal proceedings that the respondents issued (HB 19/33954), they did not claim payment of $10,000.00, which was the amount that the Tribunal came to order be paid, but instead claimed an amount of $4,268 based upon a quote they had obtained from LZ Construction for the rectification of the leak. That quote described the work to be carried out as involving the removal of the existing tiles on the veranda, applying a waterproof treatment and laying new tiles. 10. Although a notice of hearing on 13 August 2019 would have been sent by the Tribunal by post to the correct residential address of Mr Merrick, Mr Merrick is emphatic that he never received such notice. There is no evidence to the contrary and we accept what Mr Merrick says about this. 11. However, as it was entitled to do (see Rule 35 (2) of the Civil and Administrative Tribunal Rules 2014), the Tribunal on 13 August 2019 proceeded to hear and determine the claim the subject of the renewal proceedings in the absence of Mr Merrick. 12. In this regard, we note that documents may be served by post sent to a person's residential address (Rule 13 (2) (b) of the Civil and Administrative Tribunal Rules 2014), they are taken to have been served by the seventh working day after posting (Rule 13 (4) (a)) and there is no suggestion that the document was returned to sender unopened. 13. We have been shown a transcript of what occurred at that hearing prepared by Merrick from the sound recording – the respondents have raised no issue as the accuracy of this transcript. From the transcript, and what we were told by the respondents at the hearing of the appeal, it appears that they presented material in support of their claim for the lower amount of $4268.00 and that at the initiative of the Tribunal the award in their favour became one for the amount of $10,000.00, being the total amount they had, originally, paid Mr Merrick. 14. The award for this amount followed exchanges between the Tribunal and Ms Zhu concerning the claimed lack of any value whatsoever that the respondents had obtained in return for the payment of $10,000.00. 15. This change in the claim was embraced by the Tribunal even though the only renewal claim that had been, apparently, notified to Mr Merrick was the different claim for the lesser amount founded upon the alleged cost to rectify the leak. 16. As we return to below, this step was procedurally unfair to Mr Merrick in circumstances where the Tribunal was entitled to proceed to hear and determine the matter in the absence of Mr Merrick on the basis that it appeared that he had been given a reasonable opportunity to be heard in relation to the claim for $4,268.00. 17. The written reasons of the Tribunal for this decision were, relevantly: 1. The period for bringing the renewal proceedings was extended because the applicants had a reasonable explanation in that the balcony did not leak again until after the heavy rains in June 2019. 2. The applicants paid the respondents $10,000.00 to repair the leak from their balcony into the room below. 3. Based upon statements from the applicants and some photographs, the Tribunal found: 1. Following the consent work order, Mr Merrick did attend the premises and again applied a surface coating to the balcony (as he had done when first carrying out the job), 2. After the recent heavy rains the water leak reappeared in the exact same location, 3. It was satisfied that the applicants did not receive any value for the $10,000.00 paid and the service provided by Mr Merrick was entirely ineffective. Appellant's application to set aside the 13 August 2019 decision 1. Having received the text message notifying him of the order to pay $10,000.00, Mr Merrick moved swiftly, and on 15 August 2019, made an application to the Tribunal at first instance under Regulation 9 of the Civil and Administrative Tribunal Regulation 2013 to set aside the Tribunal decision. 2. In his application to set aside, which he says he filled out at NCAT' s Registry in Wollongong, Mr Merrick said that he had not received notice of the hearing and that he would like to have a hearing at which he could represent himself. Unfortunately, whilst he ticked the box in the application form saying that the decision occurred in his absence which resulted in his case not being adequately put to the Tribunal, he did not complete the section of the form (Section E (ii)) which sought a summary description of the case he would have put to the Tribunal if he had not been absent. 3. Presumably, it was because of this failure that the Tribunal determining the set aside application, on the papers, came to decide on 2 September 2019 that the application would be refused because: "Although the orders….were made in the absence of the applicant the Tribunal is not satisfied that the party's absence resulted in their case not being adequately put to the Tribunal". 4. We are satisfied that the failure to complete this part of the form was through inadvertence rather than the absence of any real case against the order that was made. 5. At the hearing of the appeal, when questioned about this deficiency with the application, Mr Merrick said that he was not familiar with the requirements and he received an indication from a staff member at the Registry that what he had done was sufficient. Whether or not he did receive such an indication, it is sufficient, for present purposes, that we regard this as a mistake rather than, as we have said, an indication of the absence of any real case against the order that was made. 6. In considering the matter on the papers, the Tribunal did not, apparently, identify the discrepancy between the amount sought in the renewed claim and the amount awarded by the Tribunal. Notice of Appeal 1. Having had his set aside application refused, on 4 October 2019, Mr Merrick filed the Notice of Appeal commencing this appeal. 2. In the Notice of Appeal Mr Merrick requested that he be given an opportunity to present his side of the case, as to which he made four points. First, that the $10,000.00 was a price for work that went beyond work solely to fix the particular leak in question but included roof repairs and external cladding repairs which he had carried out. Second, that the quote to fix the leak in question was only for $4268.00 (not the amount of $10,000.00) and even this amount he considered to be excessive. Third, after the repairs, he had had contact with the respondents after several big rains and at no time did they indicate that the leak had re-occurred. Fourth, it was his opinion that the leak was not occurring from the veranda tile repairs but was occurring through another point of entry. Consideration 1. After hearing much of the oral argument and debate at the hearing of the appeal we gave the parties an opportunity to see if they could reach an agreed settlement of the matter. They were unable to do so. 2. We have decided that the appeal should be allowed and that Mr Merrick should be given an opportunity at a hearing to present his case against the money order sought by the respondents. In this connection, we are satisfied that Mr Merrick should be granted the necessary extension of time in which to bring the appeal 3. In filed documents and orally at the hearing the parties provided their submissions on the appeal. We have considered all of this material. 4. In our consideration we have been conscious of the central provision in the Civil and Administrative Tribunal Act 2013 No 2 concerning this appeal, namely s 38 (5) which, relevantly, provides: 5) The Tribunal is to take such measures as are reasonably practicable: …. (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. 1. We also regard the present case as distinguishable on the facts from other decisions of the Appeal Panel in this area such as Simcoe v Bate [2019] NSWCATAP 216; Chowdery v Hossain [2017] NSWCATAP 109; and Hammond v Ozzy's Cheapest Cars T/As Ozzy Car Sales [2015] NSWCATAP 65. 2. The respondents have put various arguments against allowing the appeal, including that Mr Merrick has had sufficient opportunity already to present his case, including in his application to set aside the decision. Their submissions also included that he should not have an extension of time – in this regard they pointed out that even after the refusal of his application to set aside he still took longer than the permitted 28 days in which to bring the appeal. They also believed that he had no case to be given a further opportunity to rectify the leak ,after all this time and the various unsuccessful attempts, and that the Tribunal had been correct in finding that they had received no benefit at all from the original contract because that contract had been solely concerned with fixing the leak that they still continued to experience. 3. However, in the events that have occurred, Mr Merrick has not had an opportunity to present his side of the case at a hearing in which he was able to present evidence and argument and to question the witnesses for the respondents. 4. We are satisfied that Mr Merrick has arguable defences that have not yet been put and considered by the Tribunal. We are satisfied that at a new hearing there would be a real issue, at least, as to whether the respondents are truly entitled to a refund of the $10,000.00 they were paid or whether they should be entitled to some considerably lesser sum reflecting the cost to rectify the leak. It seems to us that determining this issue would include deciding issues as to the scope of the original contract, the original work done by Mr Merrick, the source of the leak and how it can be rectified. 5. In our opinion, in, at least, one respect there has been procedural unfairness to Mr Merrick in the making of the present money order against him. This has meant that there has been an error of law affecting that outcome. He has a right of appeal with respect to such a question: s 80 (2) (b) of the Civil and Administrative Tribunal Act 2014. 6. As to this, he was not provided with any notice that a different and increased claim from that set out in the renewal application was to be taken as being made against him and dealt with at the hearing on 13 August 2019. Regardless of the availability of the set aside procedure in Regulation 9, he should have been informed of such an increased claim giving him an opportunity to defend that claim. 7. Furthermore, the Regulation 9 procedure did not operate to cure the problem. As we have already mentioned, due to the non-completion of a section of the form, the Tribunal dealing with the set aside application was not given a summary of the appellant's case. In the particular circumstances of this case, we do not think it would be fair or just to now preclude the appellant, an unrepresented party unfamiliar with legalities, from obtaining a new hearing of the renewal application because he was or may have been at fault in failing to bring the nature of his defence to the attention of the Tribunal. 8. Given this ground of procedural unfairness which we have upheld, it is unnecessary for us to decide whether independently of the failure to notify him of the increased claim before making the money order there was a breach of procedural fairness to Mr Merrick arising from his absence from the hearing on 13 August 2019. 9. Given the merits of the appeal, the delay occasioned by his unsuccessful application to set aside and the shortness of the delay after the decision on the that application before lodging an appeal (four days), the necessary extension of time for filing of the notice of appeal should be granted. In this case, the delay resulting from making the application to set aside should not be counted against Mr Merrick. ORDERS For the above reasons, we order as follows: 1. Grant an extension of time until 4 October 2019 for the filing of the Notice of Appeal. 2. Allow the appeal. 3. Set aside the orders made by the Tribunal on 13 August 2019 in renewal proceedings number HB 19/33594. 4. Remit the renewal proceedings number HB 19/33594 for redetermination by a differently constituted Tribunal at first instance. 5. As to Order 4, the Tribunal at first instance is to make directions for the provision by the parties of such evidence and submissions as they now wish to rely upon. ********** 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. 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