| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : CONTENT LIVING PTY LTD and ROBERTS [2013] WASAT 5 MEMBER : MR C RAYMOND (SENIOR MEMBER) MR R MACHELL (SESSIONAL MEMBER)
HEARD : 18 DECEMBER 2012 DELIVERED : 9 JANUARY 2013 FILE NO/S : CC 767 of 2012 BETWEEN : CONTENT LIVING PTY LTD Applicant
AND
MICHELE ROBERTS
Respondent
Catchwords: Building Services (Complaints Resolution and Administration) Act 2011 (WA) Review hearing Grounds of review limited to whether any loss suffered, and if so, the amount of loss Turns on own facts Legislation: Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 41(2)(b), s 43
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Home Building Contracts Act 1991 (WA), s 15A, Pt 2
State Administrative Tribunal Act 2004 (WA), s 27
Trade Practices Act 1974 (Cth), s 52, s 82
Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 (Cth), (formerly Trade Practices Act 1974 (Cth)), s 52, s 82 Result: Review upheld
Summary of Tribunal's decision: The applicant was granted leave on limited grounds permitting a review of a decision awarding the respondent compensation for misleading or deceptive conduct. The grounds of review were limited to consideration of whether the respondent had suffered any loss, and if so, the amount thereof.
In the original hearing compensation had been awarded on the basis of what it would cost to obtain performance of the representation made which was that a residential dwelling would be constructed with eaves on the front elevation.
The Tribunal found that there was no evidence to establish that but for the misleading or deceptive conduct the respondent would have entered into a contract that would have returned the benefit represented. Further, there was no evidence to establish that a similar contract providing for the construction of the relevant eaves could have been entered into for the same or any lesser sum. In the circumstances the question of assessment did not arise. The Tribunal accordingly set aside the decision under review and substituted a decision consistent with its findings.
Category: B
Representation: Counsel:
Applicant : Mr P Hassett
Respondent : Self-represented
Solicitors: (Page 3)
Case(s) referred to in decision(s):
Content Living Pty Ltd and Roberts [2012] WASAT 194
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
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REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 On 14 May 2012 the Tribunal, as then constituted (original Tribunal), ordered the applicant (builder) to pay to the respondent (Ms Roberts) an amount of $5,709. By the time of the hearing the respondent had married but all orders and the leave decision continued to refer to her under her former name. In the circumstances we continue to refer to her in these reasons for decision as Ms Roberts. 2 The amount awarded related to the determination of two separate claims referred to the Tribunal under the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act). An amount of $684 was awarded in respect of a claim for the remedial costs relating to two doors found to be defective. The balance of $5,025 represented compensation for misleading or deceptive conduct contrary to s 15A of the Home Building Contracts Act 1991 (WA) (HBC Act). On 26 September 2012 the Tribunal granted the builder leave to review the decision of the original Tribunal but limited the grounds of review to consideration of whether Ms Roberts had suffered loss as a result of the misleading or deceptive conduct, and if so, the amount of such loss. This decision is reported as Content Living Pty Ltd and Roberts [2012] WASAT 194 (leave decision).
The issues on review 3 It follows that the only issues to be determined on the review are: The review hearing and relevant facts 4 Under s 27 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) a review hearing is by way of a hearing de novo and is not confined to matters that were before the decisionmaker but may involve the consideration of new material whether or not it existed at the time the decision was made. There had been no evidence before the original Tribunal about what Ms Roberts might have done had the misleading or deceptive conduct not occurred. (Page 5)
5 This deficiency in the evidence was addressed at a directions hearing on 8 November 2012. The builder's representative indicated that it did not wish to provide any further evidence unless Ms Roberts did so. Consequently, orders were made granting leave to Ms Roberts to file any witness statements upon which she wished to rely at the final hearing, otherwise the review would be based on the transcript of evidence before the original Tribunal. 6 Ms Roberts failed to file any further witness statements. 7 At the review hearing, and over objection from the builder, the Tribunal ruled that it required Ms Roberts to give evidence of what she would have done if the representation constituting the misleading or deceptive conduct had not been made. The Tribunal indicated that if, as a result of this evidence, the builder required an adjournment an application would be entertained. 8 As a result, the Tribunal on review has had regard to all the evidence which was before the original Tribunal and the oral evidence given at the review hearing by Ms Roberts. The builder did not seek an adjournment to put any further evidence before the Tribunal. 9 The background facts, as found by the original Tribunal, are not in contention in the review, in part due to the limited grounds in relation to which leave was given. Other background facts, not referred to in the reasons for decision of the original Tribunal, and as summarised below, were never in dispute. For convenience, we repeat the following from the leave decision. (Page 6)
ordinarily provided, were to the front elevation and the one side (presumably, the lefthand side). The total price agreed was $184,506 as set out in Annexure 1. [14] It appears that Annexure A is an annexure to an Agreement for Preparation of Drawings, which was also signed by the parties on 30 June 2008. Relevantly, cl 5 of the Agreement for Preparation of Drawings provides: Content Living will carry out the Preparation of Drawings Work based on the Sales Sketch and the Pricing in Annexure 1. Any representation, written or oral, as to the content of the building works or the price for the building works not contained in the Sales Sketch and Pricing is of no effect and will not be considered. [15] On 29 October 2008, Ms Roberts received a number of documents together with the Cover Letter flowing from Content Living's performance of the Agreement for Preparation of Drawings. The documents enclosed were the plans, addenda and specifications, and a letter of quotation of the same date (Quotation Letter). … [16] The Quotation Letter listed the additions and variations to the basic house price, although the final price was $184,862, approximately $300 more than previously quoted. The two quotations are not easily reconciled. Item 24 of the Quotation Letter also includes provision of eaves to the rear and righthand side of the house, 'as per plan', for $2,480. [17] The additional eaves which Ms Roberts had discussed with Tyrone and for which she had agreed to pay $2,480 were not constructed on the front elevation. A consequence of this is that a bulkhead ceiling had to be provided along the wall of the bedroom forming the front elevation. The contract drawings forwarded with the Cover Letter did not show any eaves on this elevation and did reflect that a bulkhead was to be constructed in the bedroom concerned. [18] The representation relied on by Ms Roberts is not clearly formulated. In Ms Roberts' statement of issues, facts and contentions, it was alleged: (Page 7)
plans), and did not advise the client of this omission for her approval, or even make contact with the client for clarification. Not in accordance with the sales contract. … … [20] In evidence, Ms Roberts was asked by the Tribunal whether she had checked any of the items that she and Tyrone had discussed and which had resulted in an amendment to the original sketch plan (which she had been requested to do in the Cover Letter). Ms Roberts replied: 'No, because it said, "As per plan"'. The reference here must be understood to be to the Quotation Letter and item 24, which specifically stated that eaves were provided as per the plan (T:16; 14.05.12). [24] … It is perhaps unfortunate in this case that the precise representation relied upon was never clearly formulated. Given the manner in which the case was conducted by both the parties and the Tribunal, the representation or representations relied upon must be gleaned from the totality of evidence. 10 When Ms Roberts discovered that eaves had not been provided over the front elevation and that a bulkhead was being constructed in the front bedroom, she raised the matter with the builder. Some issue was made about the precise terms in which the issue was raised. However, we are satisfied that Ms Roberts raised the issue with one purpose in mind only and that was to have it rectified. 11 The builder insisted on proceeding with the construction in accordance with the contractual drawings which did not include the eaves and bulkhead in question. Ultimately, in order to resolve Ms Roberts' complaint, the builder offered a credit of $552 and prepared a variation to the contract 'credit eave to front bedroom 1 not drawn on the final plan as per the sales sketch (part consultant discount) credit $552'. Ms Roberts initially refused to accept the variation but eventually was forced to do so in order to take possession upon practical completion. The original Tribunal rejected the builder's reliance on the variation as a defence to the proceedings and that finding was not challenged. Reference will be made later to the submission made by counsel for the builder contending that, as no cost had ever been included in the contract for the provision of eaves to the front elevation, any order in favour of the builder should not be reduced by this credit. (Page 8)
12 The evidence given at the original hearing for the builder established that the credit was based upon a linear rate costing for the provision of eaves (T:32; 14.05.12). 13 In evidence given at the review hearing Ms Roberts stated that, but for the continued advice on which she relied that eaves would be provided (which would have the effect of removing the bulkhead which was her main concern) and that eaves were provided in the construction drawings, she would not have entered into the contract. She was adamant that she did not like ceiling bulkheads and that was why she had raised the matter with the builder's salesman at the outset. Ms Roberts also stated that she had made attempts to get evidence to show that she would have been able to have the dwelling constructed for the same price, or a lower price, excluding the bulkheads and with the provision of eaves as shown on the amended sketch drawings which she signed on 30 June 2008. However, she advised that she had been unable to procure this evidence because the people she contacted advised that it would be too difficult an exercise to compare pricing having regard to the time which had elapsed. 14 Consequently, the only evidence relating to damages or misleading and deceptive conduct is that which was before the original Tribunal. Evidence from the builder on this issue was that alterations to the roof and removal of the bulkhead would cost between $2,500 and $3,000. The evidence relied on by Ms Roberts and which was accepted by the original Tribunal was a quotation from Clark Metal Roofing dated 21 April 2012 for an amount of $5,577, inclusive of GST, in respect of the same necessary work. Compensation was therefore awarded on the basis of what it would cost to achieve what had been represented, similar in effect to an award to achieve conformity with a contract.
Has loss been suffered, and if so, in what amount? 15 Part 2 of the HBC Act includes s 15A which proscribes a person who is a builder or an owner from engaging in conduct that is misleading or deceptive in connection with, the formation or execution of a contract, negotiations to vary a contract after execution, or the circumstances in which the parties enter into a contract or variation of contract. Section 41(2)(b) read with s 43 of the (BS(CRA) Act empowers the Tribunal to order payment of compensation for loss or damage caused by a breach of Pt 2 of the HBC Act. 16 As the proscribed remedy is the payment of compensation for loss or damage there is an obvious requirement that the loss or damage be caused by the prohibited conduct. We consider that considerable guidance can be (Page 9)
found in the decided cases dealing with the award of compensation for loss or damage under s 82 of the former Trade Practices Act 1974 (Cth) and now the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth) for breach of s 52 thereof which proscribes misleading and deceptive conduct by a corporation in trade or commerce. 17 It is clear from those authorities, and there being no indication to the contrary in the HBC Act, that it is for an applicant for relief to establish what he or she has lost. 18 In Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 the appellants had entered into loan facilities with a public company financier in reliance on written representation that interest would be at a specified base rate plus a margin set at 1.25% per annum. Contrary to the representations, the loan contract enabled the interest rate to be varied on notice. Gaudron J, who formed part of the majority in dismissing the appeal, although on different grounds, explained the principle as follows: 19 In this case, Ms Roberts does not assert that she would have been able to enter into a contract with any other builder that would have provided the benefit represented at the same or a lesser cost. She does assert that if the initial representation had not been made by the sales representative she would not have entered into the contract. This creates potential difficulty in disposing of the matter because as the reasoning in the leave decision reflects, the representation changed over time. Leave was refused in relation to related issues because the Tribunal concluded that there could be no substantial injustice if leave were refused relating to those issues because on a proper consideration of the evidence it was difficult to conceive that any rehearing might result in an identification of the representation as not including a statement in the subsequent quotation letter that the eaves were shown on the final plans and consequently that the house would be constructed so as to include the eaves. (Page 10)
Other correspondence received by Ms Roberts on the same day in the form of what is referred to as a cover letter may well have had the effect of preventing reliance on the earlier representation by the sales representative. In the result, we consider that little turns on this because there is no evidence to show that Ms Roberts has suffered loss as a result of proceeding with the contract. She paid the agreed price and there is nothing to suggest that the market value of the dwelling was less than that amount. 20 In any event, in closing submissions, Ms Roberts made it plain that by the time she had paid a fee for the preparation of plans she would not have walked away from entering into the building contract. This was because she could not afford to risk losing the preparation of plans agreement fee for no benefit and did not wish to risk forfeiting the deposit paid on the land. Further, she did not wish to be delayed by commencing the whole process again. 21 It follows that Ms Roberts has not demonstrated that she has suffered any loss as a result of the builder's misleading or deceptive conduct and the question of assessment therefore does not arise.
The appropriate order 22 We mentioned earlier that we would revert to the submissions made on behalf of the builder concerning the effect of the credit of $552 given by way of a variation dated 1 September 2009. We were referred to evidence given by Mr Trewren for the builder commencing at T:32; 14.05.12. Mr Trewren stated in evidence that the price variation for adding additional eaves of $2,480 related to the eaves to the right hand side of the house and the rear elevation only and not to the front elevation. It appears from Mr Trewren's evidence that the credit was given merely to settle the issue and that the builder did not accept that it was obliged to construct eaves to the front elevation. There is no doubt that in terms of the contract drawing this was correct. 23 The builder's submission is that as the pricing never included the front eave, the amount which Ms Roberts should be ordered to repay should include the $552 and that if this did not occur there would in effect be a double credit. 24 We have a number of difficulties with the builder's position. Firstly, the original Tribunal found in its oral reasons for decision (T:62; 14.05.12) that Ms Roberts and the salesman had agreed on certain changes to the sketch plan. An agreed amendment was to run an eave (Page 11)
around the entire perimeter of the house. As reflected in an amended plan, marked as such and dated 30 June 2008, an eave overhang was to be constructed at the front of bedroom 1 in the location of the parents' retreat. The amendment was recorded in the precontract quotation document as item 26 as 'provide eaves to RHS and rear of house as per plan $2,480'. The original Tribunal expressly noted that this notation is somewhat at odds with the concept of a full perimeter eave overhang and that this did not appear to have been the subject of any discussion between Ms Roberts and the salesman. 25 It is therefore clear that the genesis for the increased price of $2,480 was for the additional eaves including the front elevation, notwithstanding the obviously incorrect way in which this was recorded in item 26 of the quotation document. We are therefore unable to accept Mr Trewren's evidence that the pricing of the front eave was not included in the additional cost of $2,480. It appears to us that Mr Trewren has based his evidence on the wording of the notation in item 26, which was repeated in the final quotation letter, but which was clearly incorrect. 26 The original Tribunal was correct to deduct the $552 from the compensation it awarded in order to avoid double compensation being provided. It follows that the orders to issue should include provision for repayment of that amount of the original order which related to compensation for misleading or deceptive conduct, namely $5,025. 27 We understand that the builder has paid Ms Roberts the sum of $5,709 in accordance with the order made by the original Tribunal on 14 May 2012. It follows that the orders to be made should require Ms Roberts to repay that sum less the $684 included in it which related to the cost of remedying the defective doors. There should therefore be an order for repayment of $5,025.
Orders 28 The Tribunal will accordingly cause orders to issue as follows: (Page 12)
3. The claim for compensation in respect of misleading or deceptive conduct is dismissed. 4. Michele Roberts, now known as Michele Brookes, is ordered on or before 7 February 2013 to repay to Content Living the sum of $5,025. |