J-CORP Pty Ltd and Salazar & Anor

JURISDICTION	:	STATE ADMINISTRATIVE TRIBUNAL
STREAM	:	COMMERCIAL & CIVIL
ACT	:	BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION	:	J-CORP PTY LTD and SALAZAR & ANOR [2007] WASAT 265
MEMBER	:	DR B DE VILLIERS (MEMBER)
HEARD	:	9 OCTOBER 2007
DELIVERED	:	15 OCTOBER 2007
FILE NO/S	:	CC 1952 of 2006

BETWEEN

: J-CORP PTY LTD

Applicant
AND
JORGE LEWIS SALAZAR
SANDRA LORENA SALAZAR
Respondent

Catchwords:

Leave to review - Was a settlement agreement reached - Does payment of a final invoice constitute acceptance of a settlement offer

Legislation:

Builders' Registration Act 1939 (WA), s 41(1)

Result:

The application is dismissed

[2007] WASAT 265

Category: B

Representation:

Counsel:

Applicant	:	JT Bishop
Respondent	:	Self-represented

Solicitors:

Applicant	:	Hotchkin Hanly
Respondent	:	Self-represented

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

Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988)

14 NSWLR 523

Tangent Nominees Pty Ltd and Edwards & Anor [2005] WASAT 119
Wilson v Metaxas [1989] WAR 285

[2007] WASAT 265

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 The applicant seeks leave to review a decision of the Building
Disputes Tribunal pursuant to s 41(1) of the Builders' Registration Act 1939 (WA). The question upon which the application for review is focused is whether the respondents had accepted an offer of $900 from the applicant as full and final compensation for the late completion of their house. The applicant contended that the BDT did not take into account all the available information when it found that no agreement had been reached. The respondents contended that the BDT came to the right decision since there was never an intention on their part to enter into an agreement and nothing they did could be construed as having accepted the offer.

The Tribunal found that none of the grounds to justify leave to review has been met. The application was therefore dismissed.

Background

3              The application was lodged with the State Administrative Tribunal
(Tribunal) on 24 November 2006. The first directions hearing took place on 1 March 2007 due to the unavailability of the parties prior to that date. At the directions hearing the Tribunal adjourned the proceedings to enable the applicant to obtain a copy of the transcript of the proceedings before the Building Disputes Tribunal (BDT). The matter was again adjourned on 12 April 2007 since the transcript had not yet been obtained. On 2 August 2007 the Tribunal made programming orders for the matter to be heard.
4              The Tribunal explained to the parties that the application would be
progressed in two phases. This was done particularly to assist the respondents since they were not legally represented and English is their second language.
5              The first step of the review is aimed solely on the question whether
leave to review the decision should be granted. If leave is granted, the second step is taken whereby the parties are invited to make further submissions regarding the merit of the matter. If leave is refused, the matter is concluded. It is only when leave is granted that additional evidence and information may be submitted to the Tribunal since the hearing will be de novo.
[2007] WASAT 265

6 Orders were made for the applicant to make further submissions to
the Tribunal to explain why it believes the BDT erred in law or in fact by coming to the conclusion that no settlement agreement had been reached between the parties. The respondents were invited to file submissions are to why they were of the view that the BDT had not erred and that it came to the correct decision.
7 Both parties made additional submissions. The applicant, through its
counsel, made further submissions at the hearing and the respondents also made a combination of submissions and evidence during the hearing. The Tribunal took all of the submissions and evidence into account before making its decision.

Grounds for review

In its application, the applicant contended that leave for review should be granted on the following grounds:

(a) The BDT erred in law or in fact by finding that there was no evidence of an agreement being reached between the parties to settle the respondent's claim by a one-off payment of $900.
(b) The evidence before the Tribunal shows that a train of events justify a conclusion on fact that the parties had reached agreement. Negotiations had occurred on 5 July 2005 and 6 July 2005 which culminated in the acceptance of the reduced amount on 8 July 2005 when the final account was settled. The acceptance of the respondents is reflected in the fact that they paid the final amount claimed by the applicant, of which $900 had been deducted.
(c) The Tribunal should have employed the test as per the matter Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 535. In that matter it was held that the "ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted."

The respondents opposed the application for leave to review for the following reasons:
[2007] WASAT 265

(a)

The matter was dealt with in detail by the BDT and its decision should be accepted since the BDT had taken into account all the available evidence.

(b)

They conceded that settlement discussions had occurred, but insisted that they never accepted the offer of $900, nor did they sign any agreement or document that could be interpreted as acceptance. According to their evidence and submissions the settlement discussions were unsuccessful.

(c)

They lodged their application with the BDT on 6 July 2005, which is indicative that no settlement had occurred prior to that date. It was their understanding that if the BDT awarded more compensation that $900, the $900 would be deducted from the amount awarded.

(d)

According to the respondents they made it clear throughout that, if settlement was not reached, they would present their complaint to the BDT for it to determine how the calculation of damages should occur.

(e)

The reason why they paid the final invoice minus the $900, was (i) that they wanted access to the house, (ii) they realised that, if they refused payment, penalties would be incurred since they would be acting in breach of the contract, and (iii) they were hopeful that the BDT would ultimately determine what amount of compensation is payable.

(f)

They therefore paid the claimed amount knowing that the BDT would make a final determination regarding compensation.

Principles for successful review

10 As explained to the parties during the directions hearing, the
following principles must guide the decision of the Tribunal in regard to an application for leave to review. These principles are set out in Tangent Nominees Pty Ltd and Edwards & Anor [2005] WASAT 119 and follows a previous Supreme Court decision in Wilson v Metaxas [1989] WAR 285 at 294.
[2007] WASAT 265

11 Leave can therefore not be granted on the mere basis that an

applicant is not satisfied with the decision of the BDT or that this Tribunal
may have come to a different conclusion.

A higher test is applied, as indicated in the following principles:

(a) it must be shown that the decision of the Board in respect of which review is sought is wrong, or at least attended with sufficient doubt to justify the grant of leave;
(b) a substantial injustice would be done if the decision is unreversed. What constitutes substantial injustice depends on the circumstances of each case;
(c) there is a significant question of law to be considered.

13 The Court also noted that the intent and purpose of the legislation
may be frustrated if ordinary principles of appeal are applied. The Tribunal must therefore be slow to grant leave, unless in cases where there is no discernible basis for the decision, or where the rules of natural justice have been breached.

Consideration

The Tribunal was provided with a copy of the reasons for decision of the BDT and a transcript of the proceedings.

15 The Tribunal will now apply the above criteria to the reasons for

decision to determine if there is a basis to grant leave to review the
decision:

(a)

The Tribunal is satisfied that the BDT considered all the evidence before it prior to it coming to a decision. The BDT heard that negotiations about a possible settlement had taken place, that no agreement had been signed, that the proposed variation and written settlement of 6 July 2005 had not been signed, and that the respondents insisted throughout negotiations that if the matter did not settle they would approach the BDT for relief. The applicant could not provide any evidence of a written agreement of any sort, save for the fact that the respondents paid his invoice which had $900 deducted from the total amount. Although the BDT used the words "there is no evidence", this should not, if read properly with the rest of the reasons for decision, be construed as if
[2007] WASAT 265

the BDT had ignored information before it. The word "no" it seems, is merely the use of plain English to find that there was not sufficient or conclusive evidence of an agreement. Account must be taken that the BDT is not necessarily made up of legally trained persons, and in any event, it is not a court of law. The way in which reasons are formulated may therefore not be with the same precision as in a court of law, but it is nevertheless clear to this Tribunal what the BDT had found. Although the applicant may have a different opinion and may feel aggrieved that its contentions were not accepted by the BDT, the Tribunal is not satisfied that the applicant has shown that the decision was wrong or attended with sufficient doubt as to justify leave to review. In regard to the first principle, the Tribunal concludes that the finding of the BDT is not wrong or attended with sufficient doubt to justify the grant of leave.

(b)

The Tribunal is not satisfied that a substantial injustice would occur if the decision is left unreversed. The BDT took account of all the evidence before it and came to a decision which was properly explained and motivated. The Tribunal understands that the applicants may feel aggrieved, but that cannot be equated to a "substantial injustice". The BDT acted on the information before it. The transcript shows that the respondents had consistently denied that an agreement had been reached. Nothing they did or said supported the notion that an agreement had been reached. The applicant did not call any witness with whom the respondents may have had discussions, to testify that an agreement had been reached. The BDT therefore found that there was insufficient evidence to come to the conclusion that the respondents, by payment of the final invoice (from which $900 had been deducted), in effect accepted the offer to settle of the applicant. As explained by Ms Salazar during the application for review proceedings before this Tribunal, they paid the invoiced amount since they were under a contractual obligation to do so and any delay might have brought penalties. They realised, however, that the BDT proceedings would in due course determine what quantum of damages they were entitled to. This is
[2007] WASAT 265

consistent with the evidence given by the respondents during the BDT proceedings. Although English may be their second language, it was clear to the Tribunal that the respondents knew exactly what they were doing and that there was no intention on their behalf to enter into a settlement agreement when they paid the amount invoiced to them by the applicant. Although the applicant may have believed that an agreement had been reached, the question is whether the facts objectively support his conclusion. Ms Salazar, in her evidence before the BDT, said as follows in regard to the events of 8 July 2005: "So on the 8th of July when we went to pay the full amount we were surprised that they gave us this $900." This cannot reasonably be construed as an "agreement" to settle. The BDT found that it did not and this Tribunal cannot find reason to re-open that conclusion. The Tribunal is therefore not satisfied that a substantial injustice flows from the decision of the BDT.

(c) There is not a significant question of law to be considered. The applicant contended that, if the events are assessed objectively, it is reasonable to conclude that an agreement to settle had been reached. Counsel for the applicant relied on the following dictum by McHugh JA in the Empirnall matter:
"… However, the question is one of fact. A more accurate statement is that where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms ... The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted."

The BDT found that there was insufficient evidence to justify a finding that an agreement to settle had been reached. The applicant had opportunity to cross-examine the Salazars to demonstrate to the BDT that an agreement
[2007] WASAT 265

had in fact been reached. He could have called witnesses who had dealings with the respondents to testify that an agreement had been reached. He failed to convince the BDT. This Tribunal does not, from the transcript of proceedings or the reasons of the BDT, find any error in law that would justify a reopening of the matter. The evidence of the Salazars has been consistently that no agreement had been reached. It is not as if they remained silent and that some conclusion can be construed. They did not sign the formal offer dated 6 July 05, they made it clear that they would not accept $900, they lodged the application with the BDT, they expressed surprise that the final invoice had $900 deducted, they made it clear that the final compensation would have to be determined by the BDT. The applicant was ambivalent as to when exactly the purported agreement came into being. The BDT found that no agreement came into being on 5 July 2005. In its concluding remarks during the hearing the BDT found that –
"The Tribunal has to make an assessment according to law which is on the evidence and the information. The objective evidence indicates there is no agreement by the owners, there was no execution of the variation order and there was no formal position noted on the 5th July.
Looking at the witness statements, the evidence of Mr Clarke in the Tribunal's view is wholly inadequate to establish that there was a meeting of minds or a consensual arrangement between the party such as to uphold an agreement in full and final satisfaction of the claim that the owners would accept $900" (Tribunal emphasis).

The BDT then went on to consider the events of 8 July and accepted the evidence of the Salazars that they did not expect to find a $900 credit nor did they sign the variation order since they knew that if they did it, their rights would be affected.
[2007] WASAT 265

This Tribunal finds that, if all of the information contained in the transcript of proceedings and further submissions are taken into account, the "reasonable bystander" would not have concluded their actions as consistent with a settlement. There is insufficient evidence to support a finding that the BDT had erred in its reasoning or that a significant question of law needs to be considered.

(d) The Tribunal is satisfied that the rules of natural justice were adhered to by the BDT. The parties had opportunity to make submissions, to call witnesses, to give evidence and to cross-examine witnesses. The Tribunal therefore finds that no breach of the rules of natural justice had occurred.

16 On grounds of the above consideration of the submissions and the

application of the principles for review thereto, the Tribunal finds that the
application for leave to review should be dismissed.

Order

1. The application fails.
2. The application for review of the decision of the Building Disputes Tribunal (dated 31 October 2006 complaint number 17008) is dismissed.

I certify that this and the preceding [16] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
DR B DE VILLIERS, MEMBER

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Citations

J-CORP Pty Ltd and Salazar & Anor [2007] WASAT 265

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(a)	The BDT erred in law or in fact by finding that there was no evidence of an agreement being reached between the parties to settle the respondent's claim by a one-off payment of $900.
(b)	The evidence before the Tribunal shows that a train of events justify a conclusion on fact that the parties had reached agreement. Negotiations had occurred on 5 July 2005 and 6 July 2005 which culminated in the acceptance of the reduced amount on 8 July 2005 when the final account was settled. The acceptance of the respondents is reflected in the fact that they paid the final amount claimed by the applicant, of which $900 had been deducted.
(c)	The Tribunal should have employed the test as per the matter *Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd* (1988) 14 NSWLR 523 at 535. In that matter it was held that the "ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted."

(a)	The matter was dealt with in detail by the BDT and its decision should be accepted since the BDT had taken into account all the available evidence.
(b)	They conceded that settlement discussions had occurred, but insisted that they never accepted the offer of $900, nor did they sign any agreement or document that could be interpreted as acceptance. According to their evidence and submissions the settlement discussions were unsuccessful.
(c)	They lodged their application with the BDT on 6 July 2005, which is indicative that no settlement had occurred prior to that date. It was their understanding that if the BDT awarded more compensation that $900, the $900 would be deducted from the amount awarded.
(d)	According to the respondents they made it clear throughout that, if settlement was not reached, they would present their complaint to the BDT for it to determine how the calculation of damages should occur.
(e)	The reason why they paid the final invoice minus the $900, was (i) that they wanted access to the house, (ii) they realised that, if they refused payment, penalties would be incurred since they would be acting in breach of the contract, and (iii) they were hopeful that the BDT would ultimately determine what amount of compensation is payable.
(f)	They therefore paid the claimed amount knowing that the BDT would make a final determination regarding compensation.

[2007] WASAT 265

15 OCTOBER 2007