Havaylar v Cagilgan
[2015] VSC 91
•17 March 2015
| 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 Properties. That company was involved in constructing two units at the property. Mr Bill McKenzie, the construction manager for Eastern Properties, had the role of supervising the work carried out at the Surrey Hills property.
One question before the tribunal member was whether the respondent was engaged by the appellant, or by Eastern Properties, to carry out the painting works at the Surrey Hills property. The respondent’s evidence was that he was engaged to carry out that work by the appellant. It would appear that the appellant, in his evidence, did not dispute that proposition. However, Mr McKenzie gave evidence that his company needed to engage a painter, since the painter normally used by it was busy. The appellant therefore introduced the respondent to Mr McKenzie for the purposes of providing a quotation for that work. The respondent did not have an ABN, and therefore it was arranged that his account would be sent to the appellant, and not to Eastern Properties. Despite those differences in the evidence, the tribunal member, at least implicitly, found that the relevant contract, for the painting works, was between the appellant and the respondent. In my view, there was sufficient evidence before the tribunal member to support that finding of fact.
The next issue before the tribunal member concerned the amount of the quotation provided by the respondent for carrying out those works. The respondent, in his evidence, stated that he quoted $6,500 for the Surrey Hills work, and $1,500 for another project at Glenroy. On the other hand, the appellant stated that the respondent agreed to paint the Surrey Hills property for $10,000. Mr McKenzie also stated that the respondent provided a quotation for $10,000 for the painting work at Surrey Hills. The tribunal member, in her brief ruling, found that the agreement was for the respondent to conduct the painting work at the Surrey Hills property for $10,000. Again, clearly, that finding of fact was well supported by the evidence before the tribunal member.
The respondent, his stepson and a nephew, then proceeded to carry out the work. Mr McKenzie gave evidence that the quality of the work was poor, and that it was not up to standard. Accordingly he obtained a quotation from his usual painter, Mr Tony Skirovski, for the rectification works. The quotation was for the sum of $12,128. In turn Mr Skirovski gave evidence. He said that the work was unsatisfactory, and he described it as a ‘disaster’. He said it appeared that the respondent had had a second attempt to rectify the gloss work, and had made it worse. He said that the work standard was ‘terrible’, and it would probably be cheaper to remove and replace the woodwork, rather than attempting to rectify the painting work carried out by the respondent on it. The tribunal member accepted that the painting work had not been completed to a satisfactory standard, and that the remedial works would cost $12,000.
The tribunal member then recalled Mr McKenzie, and confirmed with him that the cost to rectify the work carried out by the respondent would be the sum of $12,128. The member asked Mr McKenzie how much, in his experience, would a painting job normally cost like the job for which the respondent was engaged. Mr McKenzie stated that he would expect a painter to quote probably $8,000 per unit. He confirmed that there were two units at the Surrey Hills property.
The tribunal member, after a short delay, stated her decision as follows:
Everyone said everything they want to say. Alright. I’ve listened to all of you and I’ve heard everybody. Now I accept that there is an existing agreement between the respondent (the present appellant) and Eastern Properties Pty Ltd in relation to the townhouses at 47 Essex Road, Surrey Hills. I accept the evidence that there was a verbal agreement between the applicant (the present respondent) and the respondent, that the applicant would conduct painting works at the Surrey Hills property for $10,000. I accept the evidence that the painting works at the property have not been completed to a satisfactory standard. I accept the evidence that an alternative quotation to perform the relevant works to an acceptable standard would have been $16,000, and that the remedial works will cost $12,000. I therefore order the respondent to pay the applicant the sum of $4,000 and I am not going to make an order as to fees. That order will be sent to you in the mail by the tribunal, alright.
The grounds of appeal
The Associate Justice gave leave to the appellant to appeal the decision of the tribunal on the following questions of law:
(a)Whether the decision of the tribunal was manifestly unreasonable in that:
(i)there was no evidentiary basis for making an order in favour of the defendant;
(ii)on the evidence before the tribunal the order against the plaintiff for $4,000 was not open to the tribunal;
(iii)there was no legal basis for the tribunal to order, or it was illogical for the tribunal to order, payment of $4,000 against the plaintiff given the tribunal’s finding that the defendant agreed to complete the painting works for $10,000 and given the tribunal’s finding that the painting works were defective and given that the tribunal’s finding that the costs of the remedial work required would be $12,000; and
(b)Whether it was open to the tribunal to find that a contractual relationship existed between the plaintiff and the defendant or whether it was evidently more a case of the plaintiff being a conduit or mere agent between the defendant and the third party building contractor.
Conclusion
In my view, the question of law identified in paragraph (a)(iii) of the order of the Associate Justice clearly identifies an error of law made by the member of the tribunal in her decision.
On the findings by the tribunal member, there was a contract between the appellant and the respondent whereby the respondent would paint the two units at Surrey Hills for the sum of $10,000. The tribunal member accepted that the work was defective, and that it would cost $12,000 to remedy that work. Based on those findings, the appellant had established a set off against the claim by the respondent which, in fact, exceeded the amount claimed by the respondent. As a matter of law, the only conclusion from those two facts, as found by the member, was that the respondent failed to prove his claim.[1]
[1]Morgan & Sons Ltd v S Martin Johnson & Co Ltd [1949] 1 KB 107; Edward Ward & Co v McDougall [1972] VR, 433, 438-9 (Gowans J); Clark v Loftus [2005] VSCA 155, [6] (Buchanan JA).
The fact that an alternative quotation to perform the works, which the respondent agreed to perform, would be for $16,000, was irrelevant to the issues before the tribunal member. The respondent made a claim based on a fixed price contract with the appellant. It was not to the point that, ordinarily, another painter might have quoted a higher sum than that quoted by the respondent to carry out that work. Rather, the agreed contractual consideration, for the work which the respondent was to perform, was the sum of $10,000. The contract fixed the rights and liabilities of the parties, namely, the appellant and the respondent. On the findings made by the tribunal member, the cost of repairing the works undertaken by the respondent exceeded the agreed contract sum. Accordingly, as a matter of law, it followed that the respondent failed in his claim against the appellant.[2]
[2]See also Bellgrove v Eldridge (1954) 70 CLR 613, 617 (Dixon CJ, Webb and Taylor JJ).
Accordingly, I am persuaded that the tribunal member made an error of law in ordering the appellant to pay the respondent the sum of $4,000. It follows that the appeal should be allowed, and the order by the tribunal set aside.
Subject to hearing from counsel, I shall make the following orders:
(1)The appeal by the appellant from the order and decision of the Victorian Civil and Administrative Tribunal dated 24 July 2014 is allowed.
(2)The orders made by the tribunal dated 24 July 2014 are set aside.
(3)In lieu of those orders, it is ordered that the application by the respondent to the tribunal be dismissed.
(4)The respondent pay the appellant’s costs of the appeal, including any reserved costs.
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