Giblin v Jammal

[1999] NSWSC 216

CITATION:	Giblin v Jammal [1999] NSWSC 216
CURRENT JURISDICTION:	Administrative Law Division
FILE NUMBER(S):	30091/98
HEARING DATE(S):	19 March 1999
JUDGMENT DATE:	19 March 1999
PARTIES :	Alan Giblin and Ester Imelda Giblin (Plaintiffs) Samir Jammal (First Defendant)
JUDGMENT OF:	Dunford J

LOWER COURT JURISDICTION:	Consumer Claims Tribunal
LOWER COURT FILE NUMBER(S) :	BSY 97/540
LOWER COURT JUDICIAL OFFICER:	Cornish (Referee)

COUNSEL :	A Ridley (Plaintiffs) A Ogborne (First Defendant)
SOLICITORS:	Somerville & Co. Solicitors, North Sydney (Plaintiffs) Williams Hussain, Solicitors, Strathfield (First Defendant)
CATCHWORDS:	ADMINISTRATIVE LAW - Consumer Claims Tribunal; building contract; claim by builder for unpaid balance; cross-claim for defective workmanship; cross-claim allowed in part; no reasons given; no indication of which parts of cross-claim allowed; whether denial of natural justice; ADMINISTRATIVE LAW - Consumer Claims Tribunal; building contract; claim by builder for unpaid balance; cross-claim for defective workmanship; evidence in support of some items in cross-claim; cross-claim summarily dismissed; no notice of intention to consider summary dismissal; no reasons given; whether denial of natural justice; ADMINISTRATIVE LAW - Consumer Claims Tribunal; objection to jurisdiction; manner of taking objection; what constitutes objection; ADMINISTRATIVE LAW - Consumer Claims Tribunal; jurisdiction limited to orders not exceeding $25,000; whether amounts established in cross-claim can be set off against amounts established in claim to bring order within jurisdiction.
ACTS CITED:	Consumer Claims Tribunal Act 1987, ss 12, 17, 32, 34A
CASES CITED:	Hutley v Meigan & Ors (SC NSW - unreported - 19 December 1996) Hales v The Consumer Claims Tribunal & Anor [1990] ASC para 55-975 Sandford v Marjen Building Contractors Pty Ltd & Ors [1992] ASC para 56-148 Archcom Pty Limited v Consumer Claims Tribunal & Ors (SC NSW - unreported - Simpson J - 29 September 1995) Ciciwill Pty Ltd v Consumer Claims Tribunal & Ors (1997) 41 NSWLR 737
DECISION:	Decision of Tribunal quashed, remitted back to Tribunal for further hearing.

THE SUPREME COURT
OF NEW SOUTH WALES
ADMINISTRATIVE LAW DIVISION
DUNFORD J
19 MARCH 1999
30091/98 - Alan GIBLIN & Ester Imelda GIBLIN v Samir JAMMAL & Anor
JUDGMENT

1 HIS HONOUR: In these proceedings the plaintiffs seek to set aside an order made in the Consumer Claims Tribunal (sitting as a building disputes tribunal) on 19 June 1998, such order being that the plaintiffs pay to the second defendant the sum of $3,162. Before proceeding further, it must be observed that the costs involved in these proceedings must exceed such amount, to say nothing of the expense involved incurring the services of building consultants in the proceedings before the Tribunal and in the two previous claims brought in the Tribunal, by the present plaintiffs all in respect of the building of one house. Nevertheless, the plaintiffs having instituted the proceedings, it is my duty and responsibility to resolve them in accordance with the relevant law.
2 The Consumer Claims Tribunal Act 1987 (the Act) in s 3 defines a "claimant" and a "consumer claim", but in respect of building matters the combined effect of ss 12A and 12B provides a much wider definition, and it is s 12D that provides that in hearing and determining a building claim a tribunal is to be known as a building disputes tribunal. The Act provides for the making of consumer claims: s 13 and see also Regulation 11 and Form 1. Section 17 provides that except as expressly provided by the Act or Regulations the Tribunal has control of and responsibility for its own procedures but in exercising its functions under the Act must conform to the rules of natural justice.
3 The procedure before the Tribunal is set out in ss 21-34A and it is only necessary to refer specifically to s 26, which provides for the procedure to be followed where a Tribunal's jurisdiction is disputed, s 32 and reg 6(1) which limit the Tribunal's jurisdiction to make orders to amounts not exceeding $25,000, s 34A which provides for the giving of reasons which are to be as brief as reasonably practical, s 34 which provides for the order of the Tribunal to be final and without appeal, subject, inter alia, to s 12(2) which provides for a limited right to prerogative, declaratory and injunctive relief in respect of matters going to jurisdiction or where it is shown that in the hearing and the determination of the claim a party to the claim has been denied natural justice.
4 In the present case it has been submitted that the Tribunal erred in three respects in relation to its jurisdiction and attention has been drawn to a number of matters which it is said demonstrated a denial of natural justice.
5 It is not necessary to refer to the facts in any great detail except to record that the first defendant was engaged as a builder for the building of a house for the plaintiffs at 4 Glenayr Grove, West Pennant Hills, and the building commenced in November 1995. A number of disputes arose between the parties and on 19 October 1996 the plaintiffs made a claim against the first defendant. That matter was apparently resolved but a second claim was lodged by the plaintiffs in July 1997. Mediation apparently failed but there was some agreement between the parties in that the papers contained what purports to be an agreement dated 8 November 1996 whereby the plaintiffs agreed to pay the first defendant the sum of $15,352 in respect of extras up to that date.
6 On 26 September 1997 the first defendant lodged the present claim against the plaintiffs in which he claimed the said sum of $15,352 together with some other amounts, making a total of $22,750. That claim is dated 26 September 1997 and is Ex. E before me. In respect of this claim the plaintiffs sought assistance from Mr Roger Thornton, a building consultant, and it has been submitted on behalf of the first defendant that he, in effect, became their agent. It appears no order was made for him to present the case on their behalf pursuant to s 21 of the Act, and I am not satisfied that at any stage he occupied any position other than that of the plaintiffs' expert witness.
7 The Tribunal conducted hearings on 30 October, on 26 November 1997 and on 21 January 1998 and finally a further hearing and on-site inspection on 26 February 1998. On 26 February the referee said, "I am going to be delivering a judgment on (a specified date), and if you wish to put any submissions please do so on or before 21 March".
8 Previously a Scott Schedule had been submitted on behalf of the plaintiffs by their expert, Mr Thornton, claiming an amount of $80,024 for defective workmanship and such like (Ex. G); but following the site inspection the plaintiffs themselves submitted a further Scott Schedule on their own behalf claiming an amount of $189,907 (Ex. F).
9 Subsequently it appears that Mr Thornton conferred with Mr King, the first defendant's expert and they each prepared independent reports referring to their discussions, the matters on which they had agreed and not agreed, and their respective valuations of the allegedly deficient work; and these were forwarded to the referee and also to the plaintiffs personally.
10 In relation to the Scott Schedule prepared by the plaintiffs themselves, this was also referred by the referee to the two experts, and Mr Thornton submitted an opinion/valuation on three items claimed in that schedule by letter dated 29 May 1998.
11 By notice dated 19 June 1998 (Ex. H), the Tribunal ordered the plaintiffs to pay to the first defendant the sum of $3,162 in full and final settlement of the claim and annexed to it was a document headed "Brief Reasons as Required by Section 34A". I will not set out those reasons in full. There was reference to the agreement, the prior agreement for payment of $15,532, a statement that the claimant's evidence was accepted, that there remained a contract liability of $22,751.

The Reasons also stated:
"(4) I accept the joint expert reports of Mr R W Thornton and Mr N G King as to the extent of defective work and as to the cost of rectification which equates to $19,589. . . . .
(7) I calculate that the Claimant is entitled to payment of $3,162 after deducting rectification costs.
(8) I note for the record that the expert acting for the Respondent has advised the Tribunal that Item 5 and 6 of the Scott Schedule has been rectified.
(9) I dismiss the cross claim for damages totalling $189,907 pursuant to the provisions of Section 27A of the Consumer Claims Tribunal Act 1987 as presented to the Tribunal after the on-site hearing."

12 In relation to jurisdiction, Mr Giblin has given evidence that at the first hearing on 30 October 1997 he said to the referee, "Your Honour, I think this matter is out of the jurisdiction of this court because our claim for repairs is going to total more than $25,000", to which the referee replied, "No, sit down. I am going to hear it in this court".
13 This version of what occurred is disputed by Mr Jammal, but it is not necessary for me to determine which, if either, version is correct because the matter can be resolved on the basis of the version most favourable to the plaintiff, namely his own.
14 The first claim in relation to jurisdiction is that the Tribunal failed to give a ruling on the matter. To this it seems to me there are a number of answers.
15 Firstly, no proper objection was taken to the jurisdiction, but Mr Giblin merely made a suggestion that the matter may be outside the Tribunal's jurisdiction. Even allowing for the fact that Mr and Mrs Giblin are not lawyers I am satisfied that something more positive was required to amount to a challenge to the jurisdiction pursuant to s 26.
16 Secondly, it was, in my view, not open to the plaintiffs to object to the jurisdiction at that stage because there was then no claim before the Tribunal except the defendant's claim for $22,750 (Ex. E).
17 Although the practice appeared to have grown up which was considered by Rolfe J in Hutley -v- Meigan & Ors (SC NSW - unreported - 19 December 1996) of treating, in building disputes, documents headed "Scott Schedule" as cross-claims, at the time this interchange occurred there was no Scott Schedule before the Tribunal and, the only claim before it was the first defendant's claim. Although for reasons which appear hereunder when discussing s 32, the limitation of jurisdiction relates to the making of orders and not to the hearing of claims, there was at the time no claim for $80,024 or $189,907 being the amounts specified in the Scott Schedules. At the most there was the threat of a claim.
18 Thirdly, even if these Scott Schedules which were later presented, be treated as claims, I fail to see how the person alleging the claims could object to the jurisdiction. If on reflection the person lodging those so-called cross-claims considered that they deprived the Tribunal of jurisdiction, their remedy was simply to withdraw such cross-claims.
19 Finally, if what Mr Giblin said is to be treated as an objection to the jurisdiction, he got a response, namely a negative one. If his informal objection was sufficient, then I would regard the informal over-ruling of his objection equally sufficient.
20 It was next submitted that in so far as the Tribunal made a ruling, it erred or, alternatively, that if it did not make a ruling, the jurisdiction was in any event exceeded. Firstly, it was submitted that the claims for $80,024 and $189,907 were both in excess of the $25,000 prescribed by Reg 6 for the purposes of s 32 of the Act. The short answer is that at the time neither of these claims had been made, and when they were, they were not made as separate claims, but by way of set-off or cross actions in mitigation of so much of the first defendant's claim as he could establish.
21 The other objection to the jurisdiction bears on the terms of s 32 and it was submitted that the Tribunal exceeded its jurisdiction in making its determination because, having found the first defendant was entitled to $22,751 and that the plaintiffs were entitled to $19,589, these two amounts together exceeded the $25,000 limitation imposed by s 32. Reliance was placed on the words of the section to the effect that the Tribunal has no jurisdiction to make an order or orders in favour of the claimant or, where there are more than two claimants, in favour of those claimants, where the total exceeds the prescribed amount. It was submitted if one added those two amounts together, the $25,000 was exceeded. This argument has already been considered and over-ruled in Hales -v- The Consumer Claims Tribunal & Anor [1990] ASC ¶55-975, which was followed in Sandford -v- Marjen Building Contractors Pty Ltd & Ors [1992] ASC ¶56-148. The effect of those cases is that it is the final order that is made which is determinative of whether the matter is within the Tribunal's jurisdiction or not; and here the only order made was a payment of $3,162.
22 For these reasons the claim that the Tribunal exceeded its jurisdiction fails.
23 I turn now to consider the claim that there was a denial of natural justice and it was submitted that the Tribunal failed to observe the rules of natural justice in a number of respects.
24 Firstly, it was submitted that the Tribunal determined the matter by reference to a report of an expert, namely the first defendant's expert's report dated 9 March 1998, in which the plaintiff had no input or opportunity to provide input. I am satisfied on the evidence that Mr King's report of 9 March, which is the report referred to, was provided to the plaintiffs - this appears from Ex. G1 - and, having received it, they took no steps to make any further submissions to the referee about it although they had been informed that there was intention to proceed to a determination.
25 Secondly, it has been submitted that the Tribunal failed to provide reasons as required by s 34A. The difficulty about this ground is that it is extremely difficult to decide just what the Tribunal did decide. Mr King's report of 9 March was followed by a report of Mr Thornton of 13 March in which a number of the items in the Scott Schedule (Ex. G) prepared by Mr Thornton, were considered, but there was nothing by way of a joint expert report or, to use the words of the Reasons for Judgment, "joint experts' reports". It would appear that what the referee meant was that he considered the two separate reports of the experts whom he had directed to confer, and somehow from that arrived at a figure of $19,589 but we have no idea precisely how he arrived at that figure.
26 If one takes Mr Thornton's report of 13 March 1998 and adds up the various amounts specified therein, one arrives at a total of $21,395. There are other combinations of items or amounts which can produce an amount considerably less, but nowhere did the referee indicate which items he allowed, which items he did not allow, and why not. Certainly s 34A does not require detailed reasons, but in a claim of this nature where there are a large number of items one would at least expect an indication as to what items were allowed and which items were not, and preferably a short statement as to why those items not allowed were not allowed. It may be that they were considered to be part of the contract; it may be he did not consider the work was defective, and where there was a dispute as to the amount, the referee may have found one valuation preferable to the other; but without him saying so, the parties have no idea on what items they have been successful and on what items not.
27 It has been held, for example, in Archcom Pty Limited -v- Consumer Claims Tribunal & Ors (SC NSW - unreported - Simpson J - 29 September 1995), that generally speaking the rules of natural justice do not include an obligation to give reasons even though the Act specifically requires reasons to be given, and in Ciciwill Pty Ltd -v- Consumer Claims Tribunal & Ors (1997) 41 NSWLR 737 at 752, Hulme J, whilst expressing general agreement with the former case, expressed the view that where the failure to give reasons might indicate that a relevant matter has not been considered, such failure may amount to a denial of natural justice.
28 The matter is further complicated in the present case because of Ex. F, which was the further Scott Schedule submitted by Mr and Mrs Giblin personally without reference to their expert. Some of the items appear, at first reading, to be repetition of items in Mr Thornton's Scott Schedule, Ex. G, and some of them, for example a claim for $100,000 for loss of enjoyment, pain, stress and suffering, appear to be, at first glance at any rate, outside the powers of the Consumer Claims Tribunal; but at least some of them appear to have some validity. On receipt of this further Scott Schedule the referee referred it to the experts and was furnished with two reports, one from Mr King dated 28 May and one from Mr Thornton dated 29 May. Mr King appears to have been of the view that no further amount should be allowed, but Mr Thornton provided a report suggesting a further $5,388 should be allowed in favour of the plaintiffs.
29 This was dealt with by the referee in paragraph 9 of his reasons where he purported to dismiss the whole of that claim under s 27(a) of the Act which provides for the dismissal of claims where the claim is frivolous, vexatious, misconceived or lacking in substance.
30 In view of the evidence contained in the report of Mr Thornton, lastly referred to, I fail to see how the whole of that claim could have been dismissed under that section. In any event, not only are there no reasons given explaining how and why that further claim was considered to be frivolous, vexatious, et cetera, but I am satisfied that at no time did the referee indicate to the plaintiffs that he was considering summarily dismissing that part of their claim and giving them an opportunity to make submissions in respect thereof. His failure to hear them on that point, in my view, clearly amounted to a denial of natural justice.
31 There is also a dispute relating to paragraph 8 of the Reasons as to whether the repairs had been done or whether the Tribunal had been informed that the repair work had been carried out. It appears that an application was made in a rather informal way to have the matter rectified under the slip rule pursuant to s 33 but, in the light of the letter from Mr King, this was not a case of an application under the slip rule, but rather an application for a re-hearing of that part of the claim under s 25. This however, will not now be, in view of the failure to indicate how the amount of $19,589 was arrived at, and in summarily totally dismissing the claim in the plaintiffs' own Scott Schedule, Ex. F, particularly without giving the plaintiff an opportunity to be heard on the matter, I am satisfied that the order of the Tribunal must be set aside and the matter remitted to it for further hearing.
32 I therefore make an order in the nature of certiorari removing the proceedings of the Tribunal BSY 97/540 into this Court, quashing the order of 18 June 1998, and I order the proceedings be remitted to the Tribunal for further hearing.
33 Having regard to the fact that the attack on the Tribunal's order was twofold and the plaintiffs have only succeeded on one issue, I consider the appropriate order is for the first defendant to pay one half of the plaintiffs' costs of the proceedings, and I so order.
34 I order that the first defendant have a certificate under the Suitors Fund Act.

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Last Modified: 04/01/1999