Argentieri v TUDORSHINE Pty Ltd

[2000] WADC 157

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   ARGENTIERI & ANOR -v- TUDORSHINE PTY LTD [2000] WADC 157

CORAM:   NISBET DCJ

HEARD:   13 JUNE 2000

DELIVERED          :   23 JUNE 2000

FILE NO/S:   CIVO 232 of 1999

BETWEEN:   NAZZERENO ARGENTIERI

STEPHANIE ARGENTIERI
Applicants

AND

TUDORSHINE PTY LTD
Respondent

Catchwords:

Appeal from Building Disputes Committee - Application for leave - Turns on own facts

Legislation:

Builders' Registration Act 1939

Result:

Leave refused

Representation:

Counsel:

Applicants:     Mr B W Ashdown

Respondent:     Mr P Walton

Solicitors:

Applicants:     Ilbery Barblett

Respondent:     Jackson McDonald

Case(s) referred to in judgment(s):

Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566

Nationwide News Pty Ltd v Bradshaw (1986) 84 FLR 49

Re Will of Gilbert (1946) 46 SR (NSW) 318

Wilson v Metaxis [1989] WAR 285

Case(s) also cited:

BHP Petroleum Pty Ltd v Oil Basis Ltd [1985] VR 756

Cardinal Constructions Pty Ltd v Argo (1996) 16 SR (WA) 344

Coulton v Holcombe (1986) 162 CLR 1

Cranley v Medical Board of Western Australia, unreported; SCt of WA; Library No 8610; 27 November 1990

Devries v Australian National Railways Commission (1993) 177 CLR 472

Goldfield Homes Pty Ltd v Blacker, unreported; DCt of WA; Library No D970379; 2 December 1997

Luton Holdings Pty Ltd v Lloyd (1995) 14 SR (WA) 139

Monash University v Burg [1984] VR 383

Niemann v Electronic Industries Ltd [1978] VR 431

Orr v Holmes (1948) 76 CLR 632

Perry v Smith (1901) 27 VLR 66

Stanley-Hill v Kool [1982] 1 NSWLR 460

Sutton v Gundowda Ltd (1950) 81 CLR 418

Watson v Wallington [1999] WADC 84

Wing Luck Foods v Lay Choo Lim [1989] WAR 358

1. NISBET DCJ: Section 41 of the Builders' Registration Act 1939 permits an appeal from the decision of the Building Disputes Committee to this Court subject to leave being granted.

2. In Nationwide News Pty Ltd v Bradshaw (1986) 84 FLR 49 O'Leary CJ set out (55-56) guidelines for the exercise of the discretion to grant or withhold leave to appeal which were summarised by the Full Court in Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566 at 571 with approval, as follows:

   "1.The legislation providing that there is no appeal from an interlocutory judgment other than by leave, the prima facie presumption is that the decision sought to be appealed is correct.

   2.If leave is to be granted some prima facie case must be made out that the primary judge's exercise of discretion miscarried and, if it appears prima facie that the order appealed is clearly wrong, that the judge's discretion has miscarried in the sense that 'it has or must have been substantially effected by wrongful application of principle, or misunderstanding or erroneous assessment of the factual material … leave will generally be given'.  Even if it does not appear prima facie that the primary judge's order was clearly wrong but it does appear that some injustice will result, the court will also generally give leave to appeal.  It does not follow, however, that in either such case leave will be given as there may be other good reason for non‑interference with the order.

   His Honour the Chief Justice agreed with the guidelines set out by O'Leary CJ save "to the extent that this passage would indicate that the disjunctive approach might be favoured", a reference, as I understand it, to his statement in Metaxisthat generally for leave to be granted there must exist both error or substantial doubt and injustice."

3. The reference in Jingellic to Metaxis is a reference to Wilson v Metaxis [1989] WAR 285.

4. Decisions such as Jingellic and others of that ilk involve applications for leave to appeal the Full Court of a Supreme Court from judgments of single judges on points of practice and procedure.  Courts have long acted to protect themselves from interminable interlocutory appeals which could be used by a party with deep pockets to the disadvantage of an impecunious litigant and the like.  In this regard the statement of Jordan CJ in Re Will of Gilbert (1946) 46 SR (NSW) 318 at 323 is oft repeated where it recognised the necessity of appeal courts keeping a "tight rein" on such appeals.

5. Whilst it seems to me that the rationale behind decisions such as those discussed above is a little different from that which applies to a statutory provision which provides a mechanism for appeal from a specialist tribunal only upon leave of the appellate tribunal, the criteria by which such applications are to be judged should be the same.  It seems to me also that these criteria have more compelling reasons to be applied in the instant case and cases of this type than in respect of interlocutory appeals on matters of practice and procedure because in cases such as appeals from the Building Disputes Committee, the appeals are invariably from findings of fact made by a specialist tribunal and the presumption that the ruling of the tribunal is correct is in those circumstances, it seems to me, a little stronger.  Parliament has provided for disputes between builders and their clients to be resolved by reference or a tribunal which is chaired by a legal practitioner and comprises an experienced builder and a consumer representative.  It is instructed to go about its business without reference to legal forms and technicalities, s 36.  It is expected to and does call upon its own expertise in the resolution of the dispute and the legal practitioner chairman is to ensure that the proceedings whilst conducted informally are nevertheless conducted in a manner that is transparently procedurally fair.  It is an eminently sensible way of dealing with disputes of this type in an industry which is one of the State's biggest and, in the ordinary run of things, deals with what will be most people's biggest commercial undertaking, ie the construction of their home or in the case of minor works, alterations and additions to it.

6. Accordingly, for the applicants to obtain leave to appeal they should demonstrate that the decision of the committee is wrong, or at least attended with sufficient doubt, and that substantial injustice would be done by leaving the decision intact.  The court's discretion in deciding the leave application is broad and unfettered.

7. Turning to the dispute in the instant case the Building Disputes Committee heard a dispute between the applicants as complainants and owner and the respondent as builder on 16 June and 26 August last year.  It made orders on 26 August and published its reasons on 16 September.  The parties were unrepresented and from the time of the first reference to the committee it was obvious that the committee was working under difficulty in that the expressions of complaint and cross‑complaint by the applicants and the respondent lacked a certain amount of precision, or were not presented or disputed in an orderly fashion.  This required the committee to become quite involved with the parties in trying to sort out what were the real issues between them.  To this end the committee very sensibly convened a preliminary hearing on 4 May 1999, and it seems, after discussion with the parties, the Deputy Chairman of the Committee, Mr Nichols, issued certain directions which were noted by the Registrar of the Committee and sent to each of the parties under cover of a letter dated 11 May 1999 (p76 of the applicants' affidavit sworn 15 November 1999 - "the first affidavit" refers).  Part of those directions was to arrange for an inspection in the presence of both of the parties and a report of such inspection by one of the building inspectors in the service of the committee.  This was done by Inspector W Lees.  His report was placed before the committee on 14 June 1999.  Notwithstanding Direction 3 of the directions of 11 May 1999 previously referred to, when the inspector arrived at the applicants' premises they would not allow the builder onto the premises for the purpose of conducting the joint inspection directed by the committee.  In any event Inspector Lees was able to complete a comprehensive report which the committee treated as heads of claim by the complainant the applicants, and heads of counterclaim by the respondent builder.

8. As the committee's reasons disclose, the committee then proceeded to work through the claims and counterclaims dealing with the respondent's claim first.  The committee concluded that the respondent had proved its claim to the extent of $17,585.  It then dealt with the applicants' claim and found that the applicants had established a claim in the sum of $6499 representing a balance due to the respondent of $11,086.

9. The committee then looked to see if it could determine the state of account between the parties, that is moneys paid by the applicants the receipt of which was acknowledged by the respondent.  On the material before the committee on the first day of the hearing this was obviously impossible for the committee to do.  The committee correctly determined that the respondent was the accounting party and was obliged to account to the applicants for the moneys received as and by way of progress payments and the like.  The committee determined to award the respondent the sum of $11,086 but suspend the operation of its award until after the respondent had accounted appropriately for the moneys received.

10. As the application for leave to appeal did not involve any attack on the committee's determination in respect of each of the applicants' and respondent's claims and cross‑claims in respect of the works actually undertaken or wrongfully omitted from the works, the committee's decision in this regard is of course final.  The applicants based their case for leave to appeal on the committee's decision in respect of the accounting between the parties and accordingly I shall have to go into a little more detail in respect of the decision and the evidence which led to it in order to properly explain the issues raised by the applicants.  The starting point is the building contract itself.  The committee found:

    "The parties had entered into two contracts.  The first could be treated as a dead letter but the second, of the 26th October 1996 (document 31 on the papers) was in force.  The parties however, chose to observe none of the vital terms and found it convenient to make various ad hoc deals, 'gentlemen's agreements' and the like.  An inevitable result was that they quarrelled and that the builder walked off the job.  We decided to examine that matter on a quasi contractual or restitutionary basis and we determined each disputed item on the facts."

11. One of the bases upon which the applicants seek leave to appeal is the committee's failure to make a determination as to what the original agreement between the parties was.  As I understood the applicants' submissions, the applicants did not dispute the committee's categorisation of the parties' dealings each with the other but the failure to make a determination as to what the original agreement was meant that the accounting between the parties couldn't proceed on any acceptable basis because it had no starting point.  None of this makes much sense until one appreciates that the parties' second contract, that of 26 October 1996 which the committee found to be in force, provides in para 6 of the schedule of particulars for a contract price of $145,000 but in the next paragraph of the schedule dealing with deposits and progress payments the total of $145,000 is crossed out and substituted with a handwritten sum of $150,000.  The applicants' argument was that the extra $5000 in fact encompassed some agreed extras or variations decided upon by the parties before the works commenced such that, so the argument ran, when the committee found for the respondent that it was entitled to be compensated for additions and variations totalling $17,585, that sum was really inclusive of $5000 of extras and additions which had been agreed upon before the works commenced.  It seems to me, however, that before the committee the parties actually proceeded on the basis that the original contract sum was $150,000.  There were plenty of reasons why I think this represents a fair reading of the committee's view of the matter.  The applicants in their letter of 4 December 1998 in which they gave notice of their claim against the respondent described the contract as being for $150,000 of which they had paid $152,000 and claimed that they were obliged to pay $17,133.41 to complete the contract.  The transcript shows that the parties were working on the basis that the contract was originally for the sum of $150,000.  See for example pp36, 37 and elsewhere.  It is a pity that the committee did not make this express finding in its reasons but having regard to the way in which these proceedings were conducted and the disputed evidentiary material before it I do not think that this gives rise to an error such that of itself it would ground leave to appeal.

12. This then leads to an examination of what in fact was paid by the applicants to the respondent.  The applicants' evidence in this regard was, it would appear, at best contradictory and at worst deliberately deceitful.  I am not in a position to make any judgment about this not having had the committee's opportunity of seeing and hearing the witnesses and so I confine myself to an examination of the documents and the transcript.  In a document exhibited to the applicants' first affidavit at p62 is a schedule in the applicants' handwriting entitled "Payments to above builder for work at 5 Roseberry Avenue, South Perth".  This demonstrates a total of claimed payments to the builder of $272,000 to which is added the claim for $17,133.41 for the cost of works to be completed by the applicants having regard to the respondent's failure to complete in accordance with the contract.  Being charitable, at first glance one might think that this is simply a list of all the receipts but such is not the case.  As the transcript at pp31 and 32 demonstrate, the applicants were actually claiming before the committee that these receipts demonstrated that they had paid $272,000.  The committee was clearly bewildered by this claim of the applicants.

13. After the committee had told the parties that it could not decide the matter without there being an accounting and adjourned the proceedings, the applicants obtained the services of a firm of chartered accountants, BDO Nelson Parkhill, which prepared a report which is Exhibit NA5 to the applicants' first affidavit.  The applicants then reduced the total of the amount that they claimed they had paid the respondent to $187,000.  As the report makes plain, of this sum of $187,000 there were two principal areas of dispute namely the payments made on 12 December 1996 and the payments made 18 February 1997.  The applicants' case for leave to appeal is based upon the committee's findings in respect of these matters (and on the committee's failure to make any determination as to what the original contract sum was, as discussed earlier).

14. The basis of the dispute about the payments made 12 December 1996 is firstly that it is common ground between the parties that on 26 October 1996 the applicants paid the respondent the sum of $5000.  On 12 December 1996 the applicants claimed to have paid the respondent $45,000 and the respondent claims to have received only $30,000.  The applicants point to three receipts being a receipt numbered 9 dated 12 December 1996 for $15,000, a receipt by way of acknowledgement of a progress payment of the same date for $15,000 and a receipt for $30,000 written on the reverse side of the progress claims certificate.  These documents may be seen at pp64, 69 and 73 of the applicants' first affidavit.  Initially, before the committee, the applicants insisted that these receipts demonstrated payment by them of the total sum of $60,000 as can be seen from the document I have previously referred to at p62 of their first affidavit.  What the respondent said about this was that the applicants were going to pay the total sum of $30,000 then due, by $15,000 in cash and a cheque for $15,000 and in anticipation of this being the case the two receipts were prepared the one on the progress claim and the other being receipt number 9, but when the time came to actually hand over the money the applicants handed over $30,000 in cash and the applicants insisted upon a separate receipt for the whole $30,000 which was then written out on the back of the progress claim certificate, which accounts for document at p72 of the first affidavit.  Pressed for an explanation of this before the committee the applicants finally admitted at that they only received $30,000 on 12 December 1996 (transcript p50).  What is all the more remarkable about this is that the applicants had obviously not told their accountant about this and allowed him to go before the committee to press a claim for $187,000 as having been paid to the respondent and it is obvious that he was unaware of the applicant's admission in this regard when he appeared before the committee - see T58.  This had an important effect upon the committee.  It obviously felt that it could not longer trust the applicants and based on the material before it this was a view which was entirely open to it.

15. Before leaving this issue I should record that the applicants sought to rely on a document to establish they had paid $50,000 to the respondent by 20 December 1996, from which it could be inferred that they had indeed paid over $45,000 on 12 December 1996.  This document is a letter dated 20 December 1997 from the respondent to the applicants.  The respondent objected to me taking the letter into evidence, suggesting that it was "fresh evidence" and that the conditions usually attaching to the admission of fresh evidence on appeal had not been complied with.  In my opinion the letter is not fresh evidence.  It was referred to during the course of the proceedings, which were conducted informally and without legal representation.  It could fairly be said that the letter was before the committee.  That being said, I found the letter unhelpful.  It is dated a year after the events of 12 December 1996.  There is no explanation as to why it was mis-dated as argued by the applicants, and it refers to "extras" of $25,000 - a surprising amount at that stage of construction.

16. The next and final matter of controversy was the payments made 18 February 1997.  On this day the applicants claimed to have paid the respondent $30,000.  The respondent says it only received $10,000.  The receipt relied on by the applicants is to be found at p69 of the applicants' first affidavit.  It was called in the proceedings the "Randall" receipt because it was written on some notepaper of Mr Randall's.  As can be seen from the copy (more clear on the original, which I viewed during the course of the hearing of the application) the sum of "$30,000" there written has been over-written.  The respondent claimed in essence that the applicants had forged what was originally a receipt for $10,000 by altering the $10,000 to $30,000.  Looking at other of the applicants' evidence in relation to this matter it is again difficult to reconcile with their claim that this receipt is truly a receipt for $30,000.  As p73(b) of the applicants' first affidavit discloses, not only did they say that the contract price was $150,000 in this document but they also claimed to have paid only the amount of $152,000.  As the respondent argued, and I accept, claiming to have paid $152,000 can only be consistent with a payment of $10,000 on 18 February 1997.  Additionally if one goes to p63 of the applicants' first affidavit, this is a document prepared by the applicants (although for what purpose is not clear) where they have listed progress payments to include a payment on 18 February 1997 of $10,000 but in the very page preceding it claim that the receipt is for $30,000.

17. Having regard to the applicants' lack of credibility in respect of the payment made 12 December 1996 as found by the committee, the committee was more than entitled to reject the evidence of the applicants and choose instead the evidence of the respondent.

1. In my opinion therefore the decision of the committee is entirely supportable on the material it had before it, it discloses no arguable error of fact or law and I would refuse leave to appeal to the applicants save for this:  the respondent admits that it received $152,000 and the committee does appear to have overlooked this admission in its calculations.  Accordingly I would grant the applicants leave to appeal against the findings and order of the Building Disputes Committee to the extent only of varying the order so as to take account of the extra $2000 the respondent admits having received from the applicants which will mean that the balance due to the respondent is the sum of $9086 in lieu of the $11,086 found by the committee.  I will hear the parties as to costs.