Havaylar v Cagilgan - [2015] VSC 91

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2014 04351

HAKAN HAVAYLAR	Appellant
v
HUSEYIN AVENI CAGILGAN	Respondent

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JUDGE:	KAYE JA
WHERE HELD:	Melbourne
DATE OF HEARING:	17 March 2015
DATE OF JUDGMENT:	17 March 2015
CASE MAY BE CITED AS:	Havaylar v Cagilgan
MEDIUM NEUTRAL CITATION:	[2015] VSC 91

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CONTRACTS — Set-off — Appeal from decision of Victorian Civil and Administrative Tribunal — Fixed price contract for painting work — Cost of rectification exceeding contract price — Tribunal member awarding painter difference between cost of rectification and fair and reasonable contract price — Error of law.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr M Waugh	John X Smith
For the Respondent	No appearance

HIS HONOUR:

The appellant brings this appeal against a decision of a Member of the Victorian Civil and Administrative Tribunal (‘the Tribunal’) dated 24 July 2014. By that decision, the tribunal ordered that the appellant pay the respondent the sum of $4,000.

Pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998, the appeal may only be brought on a question of law. On such an appeal, the court is not empowered to determine the merits of the proceeding that was before the tribunal. Rather, the court only has jurisdiction to interfere with the decision of the tribunal if that decision involved a material error of law.

The appeal from such a decision is by leave by an Associate Justice. In this case, the amount awarded against the appellant was relatively small, in proportion to the amount of legal costs involved in such an appeal. However, as was observed by Associate Justice Mukhtar in granting leave, the amount involved is not inconsequential, and, importantly, the decision of the member involved a clear error of law.

In reaching that conclusion, I am mindful of the difficulties that confronted the member in the hearing. I have had the opportunity to read the transcript of the proceeding. The evidence given before the member was confusing. It would appear that neither the appellant nor the respondent were particularly fluent in the English language. Neither party was represented by legal practitioners. The witnesses did not consistently address questions put to them. In those circumstances, the difficulties confronting the tribunal member should not be understated.

It is not necessary for me to rehearse, in detail, the evidence given before the tribunal member. There were a number of areas of common ground. In addition, some of the findings made by the tribunal member are sufficiently supported by evidence, and may not be the subject of review on appeal.

The appellant is a concreter and the respondent is a painter by occupation. In the proceeding before the tribunal, the respondent claimed the sum of $9,990 against the appellant in respect of painting works carried out by him at premises at 47 Essex Road, Surrey Hills. The head contractor in respect of that work was Eastern…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Havaylar v Cagilgan

Details

AGLC: Havaylar v Cagilgan [2015] VSC 91
Case: [2015] VSC 91
Decision Date: 17 March 2015

CaseChat Overview and Summary

Havaylar v Cagilgan was a case heard in the Supreme Court of Victoria, where the painter, Havaylar, sought to appeal a decision of the Victorian Civil and Administrative Tribunal (VCAT) that had ruled in favour of the homeowner, Cagilgan. The primary dispute was about a fixed price contract for painting services. After Havaylar completed the painting, Cagilgan was dissatisfied with the work, leading to a rectification process. The costs incurred in the rectification exceeded the original contract price. The Tribunal found that Havaylar's work was defective and awarded Cagilgan the difference between the rectification costs and what was deemed to be a fair and reasonable contract price. Havaylar's appeal centred on whether the Tribunal had correctly applied the law in awarding the difference as a form of set-off.

The central legal issue before the Supreme Court was whether the Tribunal erred in law by awarding the difference between the cost of rectification and the fair and reasonable contract price as a form of set-off. Havaylar contended that the Tribunal should have limited the set-off to the contract price, whereas Cagilgan argued that the Tribunal had correctly exercised its discretion in determining the fair and reasonable contract price. The court had to consider whether the Tribunal's decision fell within the scope of its powers under the relevant statutory framework and whether it adhered to the principles of set-off and rectification in contractual disputes.

In its decision, the Supreme Court held that the Tribunal had indeed erred in law. The Court found that the Tribunal had misapplied the principles of set-off by awarding an amount beyond the contract price, which was not permissible under the statutory provisions governing such disputes. The Court emphasised that the Tribunal should not have awarded more than the contract price as a fair and reasonable price. Consequently, the appeal was allowed, and the matter was remitted to the Tribunal for reconsideration in light of the Court's findings. The Court clarified that the Tribunal should limit its award to the contract price unless there were exceptional circumstances justifying a higher amount, which were not present in this case.

The final orders of the Court were that Havaylar's appeal was allowed, and the decision of the Tribunal was quashed. The matter was remitted to the Tribunal for reconsideration, with directions that the Tribunal should limit its award to the contract price unless there were exceptional circumstances justifying a higher amount. The Court did not specify the exact amount to be awarded but directed that the Tribunal should follow the principles of set-off and rectification correctly in its future deliberations.

Orders