DE SANTIS and SMITH

[2008] WASAT 204

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

STREAM:   COMMERCIAL & CIVIL

ACT: BUILDERS' REGISTRATION ACT 1939 (WA)

CITATION:   DE SANTIS and SMITH [2008] WASAT 204

MEMBER:   MR P McNAB (MEMBER)

HEARD:   19 JUNE 2008

DELIVERED          :   Edited reasons delivered orally on 19 JUNE 2008

FILE NO/S:   CC 241 of 2008

BETWEEN:   GUISEPPE DE SANTIS

Applicant

AND

JULIAN GREGORY SMITH
Respondent

Catchwords:

Building and construction ­ Procedural fairness ­ Faulty or unsatisfactory building work ­ Whether work done in a proper and workmanlike manner ­ Bathroom renovation ­ Application for leave to review a decision of the Building Disputes Tribunal (BDT) leading to an order to pay against builder ­ Preliminary and then informal notice of proceedings given to builder by owner ­ Builder declining to advise owner of the intended closure of his business ­ Builder aware of unresolved consumer complaints but made no special arrangements in winding up of his business ­ Business closed but rent still paid on premises ­ Registered mail sent by owner returned to sender during period when rent paid ­ BDT mail to this business address not returned to BDT ­ Proceedings in BDT conducted in builder's absence ­ Owner and BDT assuming builder had waived his rights to appear ­ No practical injustice found leading to a denial of procedural fairness ­ Leave refused ­ Application dismissed ­ Words and phrases "practical injustice"

Legislation:

Builders' Registration Act 1939 (WA), s 41

Result:

Leave refused and application dismissed

Category:    B

Representation:

Counsel:

Applicant:     Self-represented

Respondent:     Self-represented

Solicitors:

Applicant:     Self-represented

Respondent:     Self-represented

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

Melmint Pty Ltd and Cummings [2008] WASAT 76

Minister for Resources; Ex parte Cazaly Iron Pty Ltd (2007) 34 WAR 403

Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1

REASONS FOR DECISION OF THE TRIBUNAL: 

Summary of Tribunal's decision

1. The applicant, Mr Guiseppe De Santis, was a builder.  He was in dispute with Mr Julian Smith, the respondent, concerning some building work, namely a bathroom renovation, done for Mr Smith.  Mr Smith rang the builder on 9 March 2007 saying that he was taking his complaint to the Building Disputes Tribunal.

2. In the State Administrative Tribunal, Mr De Santis eventually accepted that such a call had taken place on that date (having earlier said that his mobile phone had been "dropped into a pond" in February), but he contended that the parties had only talked about resolving the dispute.  Mr De Santis had, in fact, closed his business as at the date of the call, but was still paying rent on a business office and address to the end of March 2007.  Importantly, he did not mention these matters to Mr Smith.

3. As foreshadowed in the telephone call and an earlier preliminary notice, Mr Smith applied to the Building Disputes Tribunal by written application dated 26 March 2007.  On that date, he also sent a copy of his application by registered mail to the builder at his office.  It was eventually returned unopened to Mr Smith on 18 April 2008, but would have been received at Mr De Santis' business address in the ordinary course  before the end of March 2007.

4. The Building Disputes Tribunal sent out various letters and notices to the builder, none of which were returned to the Building Disputes Tribunal.  At least one telephone message was left by the Building Disputes Tribunal for the builder in April 2007, and in June 2007, a "number disconnected" message was noted by the Building Disputes Tribunal.  It was unclear whether the Building Disputes Tribunal received notice of the returned registered envelope sent by the owner.

5. It was accepted that Mr De Santis did not receive formal notice of the claim from the Building Disputes Tribunal.  The proceedings nevertheless had continued in Mr De Santis' absence and eventually had resulted in an order to pay which was adverse to him.  He only became aware of that order when, in February 2008, a bailiff arrived to recover the debt.

6. It was contended by the owner that, in all the circumstances, Mr De Santis could not say that he did not know of the proceedings and that it was reasonable for the Building Disputes Tribunal to have continued in his absence, the owner and Building Disputes Tribunal both assuming that the builder had waived his right to participate in the matter.

7. The State Administrative Tribunal agreed and refused Mr De Santis leave to seek a review of the Building Disputes Tribunal's decision on the basis of a denial of procedural fairness.  The State Administrative Tribunal said that the rules of procedural fairness were concerned with avoiding practical injustice.  Here, in all of the circumstances, no such practical injustice could be found.  The State Administrative Tribunal said: "In short, [the builder's] own conduct denied him the opportunity to be heard".

8. The application was therefore dismissed.

9. What follows is an edited, and formally revised, version of the reasons for decision of the State Administrative Tribunal which has been taken from the transcript of proceedings.

Background to the application

1. By an application received by the State Administrative Tribunal (Tribunal) on 25 February 2008, the applicant, Mr De Santis (builder), sought a review of a Building Disputes Tribunal (BDT) decision dated 1 November 2007.  This decision was an order to pay, made by the BDT, in the sum of $7,098.41 (decision) in respect of alleged faulty and unsatisfactory workmanship arising from a bathroom renovation.

2. The review was sought upon the following basis, so far as is material:

   I have never received any claim of dispute from the BDT because I had moved business address.

3. Thus, in short, the builder contends that he was denied procedural fairness by the BDT because he never received notice of the proceedings in the BDT.  He seeks leave to review the decision upon this basis.

4. The reasons of the BDT from the hearing on 31 October 2007 were supplied to the Tribunal and the parties on or about 28 May 2008.

5. They disclose fully the reasons for the making of the order to pay and the evidence relied upon by the BDT.  I note that there was sufficient material available to the BDT, including inspectors' reports, which could have led them to the making of the order to pay.  Those reasons record the following (at page 2):

   The respondent [builder] did not attend the hearing before the [BDT] on 8 August 2007 or 31 October 2007.  There was no explanation of his non­appearance and the Tribunal was satisfied that the hearing notices had been sent to the correct address (unit 5, 229 Bank Street Welshpool -  see letter from the respondent to the complainant [owner] dated 15 January 2007 indicating his address as stated).

6. The decision of the BDT did not come to the builder's attention until much later - around February 2008 - when he received a notice of enforcement proceedings issued by the Magistrates Court.  That notice sought to enforce the order to pay of 1 November 2007.

7. The debt was, in effect, stayed by consent orders made in this Tribunal until 29 May 2008, when the respondent, Mr J Smith (owner), withdrew his consent for further stays, and the Tribunal, after considering an application for a stay, refused to make such an order.

Issues for decision

1. The issues in this matter are relatively confined.  They are whether leave should be granted to review the BDT's decision - that is, in all of the circumstances, can a denial of procedural fairness by the BDT be established because it proceeded to hear and determine the matter in the absence of the builder?

2. This question arises in the context of the need for the builder to obtain leave under s 41 of the Builders' Registration Act 1939 (WA) (BR Act). If leave were to be granted then the matter would be reargued fully in this Tribunal or, possibly, the matter could be remitted back to the BDT for rehearing.

3. The test for leave has been previously discussed with the parties in directions, and for convenience of reference, I refer to my own decision in Melmint Pty Ltd and Cummings [2008] WASAT 76, at [13] - [16], which sets out the relevant tests for the grant of leave and refers to the relevant authorities. I rely upon and adopt that analysis of the test for leave in this matter.

Denial of procedural fairness

1. I turn to the principal question before the Tribunal, which is the issue of an alleged denial of procedural fairness.

2. Chief Justice Gleeson, in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1, at 14, said this in relation to the rules of procedural fairness:

   Fairness is not an abstract concept.  It is essentially practical.  Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.

3. That dictum is frequently referred to and applied by the courts and tribunals of Australia: see, for example, Minister for Resources; Ex parte Cazaly Iron Pty Ltd (2007) 34 WAR 403 at [329].

4. There are, of course, many formulations of the requirements of rules of procedural fairness.  It is unnecessary to set them out for the purposes of these proceedings.  However, there is no principle that a decision­maker must fully suspend the making of a decision until both parties are actually present or represented.  Of course, if this were a rule of procedural fairness (or a rule of substantive law) then all litigation and hearings could grind to a halt by the absence of either party, whether intended or not.

5. Dr Forbes, in his Justice in Tribunals (Federation Press, 2002) says at [12.10] (emphasis added):

   Natural justice [procedural fairness] insists on an opportunity to be heard; it does not stand in the way of a decision if the defendant waives or rejects that opportunity.  If a party fails without reasonable cause to appear at the appointed time and place then, subject to proof of service, the tribunal may proceed in his or her absence.  Judgment in default of appearance in civil cases and in criminal courts of summary jurisdiction is a common event and may even occur on the trial of an indictable offence.

6. In my view, a decision-maker (such as the BDT) must adjourn, or make appropriate inquiries or take analogous steps, if there is anything brought to its attention, or which otherwise appears from the circumstances, that reasonably suggests that a party who has a right to be heard has not been informed of the circumstances in which that right may be exercised.  That is a "practical" solution to the problem presented when a party who, having been served or notified, does not show at a hearing.

The BDT's approach

1. At some point, after the commencement of the proceedings in the BDT, the only objective material that could possibly have led to the BDT becoming aware of circumstances where notice had failed, was the return of a registered post document sent on 26 March 2007 by the applicant/owner, not the BDT, and returned to the owner on or about 18 April 2007.  This document contained a copy of his application to the BDT. 

2. The return to sender (RTS) note from the post office records "Left address/Unknown".  It is to be noticed that both the date that the document was posted and the date on which in the ordinary course that the document would have been delivered, were within the period where, on the builder's own evidence, he was still paying rent for the addressee business premises.  Indeed, the envelope shows "28-3" as the date that the RTS process commenced, indicating that delivery was attempted on 28 March 2007.

3. It is unclear from the record, however, whether the BDT actually received a copy of this document or information about it (that is, the returned envelope with these annotations upon it).  It does not appear in the letter from the BDT referred to below.

4. Later, well into the proceedings, other unsuccessful contacts by the BDT could possibly have suggested - and this is part of the builder's case in this matter - that the builder had moved on from his premises.  For example, an actual disconnected telephone number is noticed by the BDT in relation to a notice of hearing of 19 June 2007. 

5. However, at the commencement of the BDT process (that is, the Builders' Registration Board Inspection notice dated 17 April 2007 - see below), there was nothing on the record (other than something sent by the owner and returned to him after that notice, that is, on 18 April 2007) to suggest that the builder had not received notice of the BDT proceedings.

6. This returned document was, in any event, arguably superseded by the BDT's own correspondence (albeit not registered), none of which was returned from the builder's business address.  The difference between this BDT correspondence (which, I understand, is the usual procedure of the BDT) and the owner's registered document, which requires a signature of the recipient or special collection, must be seen, however, in the context of earlier communications between the two parties (discussed below).

7. The parties' respective positions on the various matters in issue are set out in their documents, in the form of letters from them, which have been received by the Tribunal.  The parties also spoke to these documents at the hearing.

Applicant's case

1. So far as material, after giving an explanation of the closure of his business, the builder says:

   So, although the rent was paid until the end of March, I had vacated the office by the end of February 2007.

2. The builder goes on to say:

   In February I dropped my mobile phone in a pond, losing all my contacts.  I did not replace the phone until the middle of March, with a new number, as I wanted to put "Trade Select" [his business] behind me.

3. He reiterates that he did not receive any notice that the owner had approached the BDT in March 2007, and that the first notice that he had of these proceedings was when the bailiff came to seize his goods.

Respondent's case

1. The owner's version of events is that he spoke to the builder on his mobile phone on 9 March 2007 in a conversation lasting about 11 minutes, where he placed him expressly on notice of the BDT proceedings ("I explained to him [that] he would receive documents in the mail regarding [an] application to the [BDT]".)  Thereafter, he assumed, in effect, that the builder had further failed to cooperate (from his point of view) by refusing to accept his letter (that is, the registered post document).  The owner says:

   The [builder] still had his business phone operational at that time and gave no indication to the inspector or myself that he had ceased business or changed his address.

2. The reference here to "the inspector" is a suggestion that there was a telephone call to the builder by a building inspector on or about 26 April 2007, when an inspection of the owner's house was to take place.  The owner reports that the inspector left a message for the builder.

3. As the Tribunal understands the situation, the owner accepts that there is no evidence that the builder actually received formal notice of any of the BDT proceedings; but his case is that there were other equivalent communications with the builder placing him on notice of the proceedings.

4. The conversation is alleged to have taken place on 9 March 2007.  The owner has produced his mobile phone records to show that such a conversation took place.  There is a dispute between the parties as to what was said in this conversation.

5. As the Tribunal understands it, the builder is now prepared, based on this material, to accept that a conversation did take place on 9 March 2007, but he maintains a different version of events from that proffered by the owner.

6. The builder denies that he had any such notice from the owner in that conversation, but he concedes that they talked about settling the matter generally.  (This concession might have important consequences concerning the arrangements that ought to have been put in place upon the winding up of the business where there were unresolved matters between the business and its former customers - see below.)

7. There is, of course, an anomaly here, because the builder says (see above) that his mobile phone had been "dropped in a pond" in February and it was not replaced until March, and then with a new number.  The mobile phone records show, however, that the conversation took place at his "previous" business telephone number on 9 March 2007.  It similarly seems to be the case that the telephone service (or, at least, the message bank) was operational when the inspector telephoned on or about 26 April 2007.

Discussion of the case and findings

1. The builder's case is, essentially, that he did not know about the proceedings; that the BDT should have adjourned until he was located; and, as I further understand his case, he is suggesting that the BDT should have reasonably known - or suspected, in all of the circumstances - that he had moved from his business address and did not know of the proceedings.

2. The owner, to summarise, submits that the builder was on notice of the BDT matter from the telephone call at least, or that it was otherwise reasonable in all of the circumstances for him (and the BDT) to presume that the builder was either avoiding the proceedings or voluntarily taking no part in the proceedings.

3. The BDT eventually supplied this Tribunal, after several orders to do so, a copy of the material documents from its file focused on the question of what material was sent out to the then respondent builder, and in particular, whether there was any material suggesting that any documents from the BDT had been returned to it.

4. That summary and those attachments are set out in a letter from the BDT dated 13 June 2008.  That material has been made available to the parties and they have both made short submissions on it.

5. In summary, the material sent from the BDT (and not returned to the BDT) is as follows:

   •there was an inspection notice of 17 April 2007 (referred to above);

   •there was then a notice of assessment dated 2 May 2007;

   •there was a BDT letter to the builder dated 18 May 2007;

   •there was then a notice of hearing dated 19 June 2007; (There is a note in connection with this event - and the builder relies upon this in particular - that attempts were made to telephone the builder; however, his mobile phone number and work telephone number were both disconnected and there were no other telephone numbers available in the White Pages web site.);

   •a fax was sent on 7 August 2007 with a notice of hearing, and that was unsuccessful as there was "no answer";

   •there were orders sent on 9 August 2007;

   •there was a further letter sent on 13 August 2007;

   •a notice of reconvened hearing dated 14 September 2007 was sent; and, finally,

   •an order to pay was sent dated 1 November 2007.

6. What should be particularly emphasised is that, until around, it appears, June 2007 - that is, well after the BDT proceedings commenced - there was no indication to the BDT (from its own records) to indicate that there were any problems with communication to the builder as regards to the then understood business address for him.

7. If the owner is to be believed, then he, in his own telephone call in March 2007, firmly placed the builder on notice that he, the owner, was to seek relief in the BDT, which he did shortly thereafter.

8. The Tribunal accepts the evidence of the owner, as it is consistent with the other material before the Tribunal, particularly that a long course of negotiations between the parties had got nowhere, and therefore, amongst other things, it was reasonable to infer that proceedings would take place in another place, as the owner was continuing to pursue the matter further.  (See also, the BDT's reference, at page 2 of its reasons, to the "preliminary notice" given by the owner to the builder on 27 December 2006.)

1. Also, in the Tribunal's view, the builder was relatively weak as to his recollection of events, particularly as to when the telephone call actually took place.  The anomaly as to the mobile phone which had by then allegedly disappeared "into a pond" has not been fully explained.

2. The owner struck the Tribunal as fairly measured and generally plausible in both the giving, and the substance, of his evidence.  That is, of course, not to say that the Tribunal disbelieves the builder.  The Tribunal's task is to decide which of the competing versions of events is more probable and, on balance, I take the owner's evidence to fall into that category.

3. Therefore, I find as a fact that the builder was on notice - not then in a formal or official way, but was nevertheless precisely on notice - that there would be proceedings in the BDT.  I should emphasise that there is no suggestion from the builder that he told the owner in this important conversation that he had closed his business office or that he was winding up the business.  Moreover, the telephone call came on top of the preliminary notice given to him in December 2006.

4. The BDT had no correspondence returned to it and had no contact from the builder.  The owner thereafter presumed - as, in effect, did the BDT - that the builder was refusing to participate in the resolution of his consumer dispute.  This situation was in all of the circumstances a belief as to a state of affairs which, even if it was actually erroneous, rested upon reasonable grounds in the light of the combined information available to both the BDT and to the owner.

5. Further, or in the alternative, even if the owner were incorrect in his recollection of putting the builder precisely on notice (which I have found is not the case), arguably it would nevertheless be the case that it was reasonable for both the owner and the BDT to proceed as they did, given the circumstances presented to them.

6. This is because, amongst other things, in the Tribunal's view, it may be expected that, in the ordinary course of business, a business which winds up will make appropriate arrangements for receiving business correspondence for a reasonable period thereafter.  (Here, as appears above, the builder was still paying rent on his business premises for March - that is, when the application was posted by the owner to the builder's then known business address.)

7. Such arrangements may also involve advertising or notifying the same to past customers, especially where, as here, disputes are still unresolved between previous clients.  And, a business which does not take such steps may find that it loses debts owed to it, or, as here, being on the receiving end of legal proceedings which have been finalised in its absence.

Conclusions

1. In my view, no practical injustice to the builder is evident in the particular circumstances of this case.  In short, his own conduct denied him the opportunity to be heard.

2. Therefore, there are no reasonable grounds for the granting of leave on the basis of a denial of procedural fairness.  The application for leave will be refused.  (In the circumstances, it is unnecessary to consider any application for an extension of time to seek a review.)

Orders

1. For the reasons given above, the Tribunal makes the following orders:

   1. Leave is refused to review the decision of the Building Disputes Tribunal dated 1 November 2007 (order to pay 82/2007-08) for the reasons given ex tempore on 19 June 2008.

   2. Consequently, the application for leave is dismissed.

   I certify that this and the preceding [60] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

   ___________________________________

   MR P McNAB, MEMBER