Keith v Florida Kitchen Centre Pty Ltd

[2015] NSWCATCD 131

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:	Keith v Florida Kitchen Centre Pty Ltd [2015] NSWCATCD 131
Hearing dates:	28 September 2015
Date of orders:	28 September 2015
Decision date:	04 November 2015
Jurisdiction:	Consumer and Commercial Division
Before:	M Harrowell, Principal Member
Decision:	Written reasons pursuant to Section 62(2) of the Civil and Administrative Tribunal Act 2013.
Legislation Cited:	Civil and Administrative Tribunal Act 2013 Home Building Act, 1989
Category:	Procedural and other rulings
Parties:	John Robert Keith (Applicant) Florida Kitchen Centre Pty Ltd (Respondent)
Representation:	Counsel: Not applicable Solicitors: Applicant: B Hoffman, Bradbury Legal Respondent: G Elias, Cadmus Lawyers
File Number(s):	HB 14/61674
Publication restriction:	Nil

reasons for decision

1. These reasons relate to directions made by the Tribunal on 28 September 2015 and a request for written reasons made by Florida Kitchen Centre Pty Ltd, the respondent in application HB 14/61674.

2. The application for request for written reasons was made pursuant to s 62 of the Civil and Administrative Tribunal Act 2013 (NCAT Act). That section provides:

62 Tribunal to give notice of decision and provide written reasons on request

(1) The Tribunal (including when constituted as an Appeal Panel) is to ensure that each party to proceedings is given notice of any decision that it makes in the proceedings.

(2) Any party may, within 28 days of being given notice of a decision of the Tribunal, request the Tribunal to provide a written statement of reasons for its decision if a written statement of reasons has not already been provided to the party. The statement must be provided within 28 days after the request is made.

(3) A written statement of reasons for the purposes of this section must set out the following:

(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,

(b) the Tribunal’s understanding of the applicable law,

(c) the reasoning processes that lead the Tribunal to the conclusions it made.

3. Section 5 defines a decision to including making, suspending, revoking or refusing to make an order or determination (s 5(1)(a)) and the doing or refusing to do any act or thing (s 5(1)(g)).

4. The request for written reasons was made by email from the solicitor for the respondent dated 9 October 2015. That email was in the following terms:

We refer to the above matter. We confirm that we act for the Respondent Florida Kitchen Centre Pty Ltd. We note that the matter was listed on 28 September 2015, whereby Orders were made by the Tribunal Member M Harrowell.

We have been instructed to seek written reasons for the orders made on 28 September 2015, in particular Order No 5 relating to the inspection of the premises. We are further instructed to seek written reasons as to why our client’s Application for Leave to issue Summons to Produce was refused.

Our client intends to review the decision relating to the inspection, in particular of the premises and the refusal to grant Leave to issues Summonses to Produce.

5. These reasons set out the reasons for the Tribunal in making the directions.

6. For the purpose of providing these reasons it is necessary to set out a brief history of the dispute between the parties which is relevant to understanding what directions have been made and why.

7. It is also relevant to record the Tribunal has accessed the audio recording of the directions hearing in preparing these reasons which has not been formally transcribed.

History 

8. The applicant (Keith) is, apparently, the owner of residential property located at [****] Woolloomooloo (Premises). He filed an application in the Tribunal on 22 December 2014 seeking an amount of $95,700.00.

9. The applicant asserts in the original application that:

1. The respondent failed to complete the contracted works by the required completion dates;

2. The respondent failed to provide home owners warranty insurance;

3. The respondent failed to manufacture, perform and deliver works and materials with the required finishes;

4. The deposit sum requested by the respondent and paid by the applicant exceeds 5% of the contract value; and

5. The respondent failed to issue a copy of the Consumer Building Guide.

10. In general terms, the applicant asserts that the works in question are regulated by the Home Building Act, 1989 (HBA), that the contract does not conform with the requirements of that legislation and that the respondent has variously failed to comply with the contractually and statutory obligations that arise in relation to that contract.

11. The applicant also requests that the contract be cancelled and a full refund of the deposit ordered and seeks costs and damages arising from delay and non-performance by the respondent.

12. These matters are generally set out in the applicant’s home building application form, particularly at item 12 and the attachments thereto. The application was first listed for directions at the Tribunal on 30 January 2015. There have been subsequent directions hearing on 17 April 2015, 11 June 2015, 20 July 2015 and 7 August 2015 with the matter originally being listed for final hearing to occur on 13 October 2015.

13. For reasons that will become apparent the original hearing date was vacated due to an appeal on an interlocutory decision.

14. The matter first came before the Tribunal on 30 January 2015. The directions made on this date can be summarised as follows:

1. The applicant was to serve points of claim and its evidence by 27 February 2015;

2. The respondent was to file and serve points of defence, any cross application and a copy of all documents and evidence by 27 March 2015; and

3. The applicant was to serve any evidence in reply, including in relation to the respondents cross application by 10 April 2015.

15. A copy of these directions is Annexure A to these reasons.

16. The second directions hearing occurred on 17 April 2015. A copy of these directions is Annexure B to these reasons. When the directions hearing occurred, the presiding Member made new directions in consequence of the applicant failing to comply with the directions of 30 January 2015. The new directions provided as follows:

1. The applicant was to file and serve points of claim and lay evidence by 8 May 2015;

2. The respondent was to file and serve points of defence and lay evidence in reply by 5 June 2015;

3. The respondent was to allow the applicant’s expert to attend its factory to inspect the subject joinery between the hours of 9:00am and 5:00pm on Monday 27 April 2015;

4. The applicant was to file and serve expert evidence by 8 May 2015;

5. The respondent was to file and serve expert evidence in reply by 19 June 2015; and

6. The applicant was ordered to pay the respondents costs right away.

17. The matter was next listed for directions on 11 June 2015. At this time both parties were represented by legal practitioners, those practitioners having been involved in the proceedings since at least 17 April 2015 which is the first directions hearing at which both parties appeared to have been represented by legal practitioners.

18. Prior to the directions hearing in June, it would appear that the applicants filed various documents including a report from his expert, Mr Peter Sarlos, points of claim and a statement from the applicant. However, it is evident from the directions made on 11 June 2015 that there was an issue about access to the manufacturing premises of the respondents and/ or whether access had been provided on an adequate basis. Consequently the Tribunal made a direction providing for the respondent to allow the applicant reasonable access to the premises at a mutually convenient time and date for the purposes only of carrying out an inspection of the alleged defective work or incomplete work. At that time the applicant was entitled to be accompanied by an expert and up to two other persons as requested by the expert or the applicant, such access to be provided no later than 11 July 2015. The direction also drew attention to the parties of cl 8 (sic-cl 10) of Sch 4 of the NCAT Act which relates to dismissal of proceedings or of a defence if a party does not act in a manner consistent with the terms of that clause.

19. On 11 June 2015 the Tribunal also granted leave to either party to request in writing for the issue of summonses no later than 18 June 2015. It is noted that no party filed such applications for summonses in the time permitted.

20. The Tribunal refused an application for a preliminary hearing in relation to jurisdictional issues which the respondent sought to raise.

21. A copy of the orders made on 11 June 2015 is Annexure C to these reasons.

22. The matter was again listed for directions on 20 July 2015. It would seem on that day that the Tribunal had before it an application by the applicant to exercise powers under cl 10 of Sch 4 of the NCAT Act on the basis that the proceedings were being conducted by the respondent in such a way as to unreasonably disadvantage the applicant. The application was adjourned for hearing on 7 August 2015 in circumstances where the respondent objected to the hearing date on the basis of unavailability of counsel. However, the Member notes indicate that the respondent had not in fact retained counsel. A copy of the directions is Annexure D to these reasons. At that time the applicant’s claim was based on the respondent’s failure to comply with orders for access made by the Tribunal.

23. The application under cl 10 Sch 4 was listed for hearing on 7 August 2015. A copy of the orders made on that day and the reasons for decision is Annexure E to these reasons.

24. On that day the Tribunal made various orders including in relation to the reimbursement of the sum of $95,700.00 by the respondent to the applicant.

25. The orders made by the Tribunal on 7 August 2015, in particular order 3 requiring the payment of the sum of $95,700.00 was appealed to the Appeal Panel, being application AP 15/50865. The stay application was dealt with by the Appeal Panel that made orders and published reasons dated 21 September 2015. The Appeal Panel’s reasons are Annexure F to these reasons.

26. It will be necessary to set out relevant parts of these reasons however it is sufficient to record at this point that on 21 September 2015 the Tribunal, in its Division function, made directions in Chambers listing the matter for a directions hearing on 28 September 2015. In doing so the Tribunal noted that the application remained listed for a formal hearing on 13 October 2015 as advised by notice dated 14 August 2015, which notice had issued in consequence of the Tribunal’s decision on 7 August 2015. The Tribunal also made the following direction:

3. On or before 25 September 2015 the parties are to meet and file an agreed statement of facts and issues for determination.

27. Thereafter the matter was listed on 28 September 2015 when the following directions were made:

1. By Determination of member, on 28 September 2015 the hearing was

adjourned to a date to be fixed by the Registrar.

2. On or before 2/10/15 the parties are to file an agreed statement of facts and issues for determination. The statement of issues is to include a Scott Schedule setting out the claims that are to be the subject of the joint report referred to below.

3. On or before 16/10/15 the respondent is to file and serve any lay evidence in reply.

4. On or before 26/10/15 the applicant is to file and serve any lay evidence in reply.

5. On or before 26/10/15 the parties experts are to meet at 2-4 Warren Avenue, Bankstown to inspect the works and materials and manufacturing facilities and are to file an agreed joint report on or before 11/11/15 setting out:

a) the defects in relation to the work performed by the respondent;

b) the quality and suitability of the materials purchased for the purpose of performing the work;

c) having regard to the extent of the work performed, the reasonable time estimated to complete the works.

6. In so far as there is a disagreement about the matters above, each expert is to record against each item of claim a summary of their opinion and the reasons for disagreement with the other expert. The experts are to include in the report their opinion on each matter of disagreement. The joint report and the experts are to comply with Procedural Direction 3- Expert Witnesses.

7. If either party defaults in complying with these directions they are to immediately write to the Tribunal and have the matter relisted for directions.

8. The application is listed for hearing in the week commencing 23/11/15.

9. The application is listed for directions on 12/11/15. At that time the Tribunal will make directions for the preparation of an agreed bundle and exchange of submissions.

10 On or before 6/10/15 the applicant is to provide to the respondent a copy of the Development Approval for the works, the subject of the dispute.

11. Liberty to apply.

12. The hearing of 13/10/15 is vacated.

28. Relevantly, as set out in the request for written reasons above, reasons are sought in relation to order 5 and in relation to why the Tribunal did not make directions to allow the respondent to issue summonses.

Applicable principles

29. The Tribunal, exercising its Division functions lists claims under the HBA in various directions lists which are known as the “Building List”.

30. When listed for directions, the parties, or their representatives if appointed, appear and make submissions concerning the preparation of evidence and the conduct of the case. In exercising its powers at directions hearings, the Tribunal is to have regard to various principles which apply to Tribunal proceedings.

31. Firstly, the Tribunal is obliged to apply the guiding principle set out in s 36 of the NCAT Act and the parties and their representatives are under a duty to co-operate with the Tribunal to give effect to the guiding principle.

32. It is appropriate to set out those parts of section of s 36 which are relevant to the directions that were made:

36 Guiding principle to be applied to practice and procedure

(1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(2) The Tribunal must seek to give effect to the guiding principle when it:

(a) exercises any power given to it by this Act or the procedural rules, or

(b) interprets any provision of this Act or the procedural rules.

(3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal:

(a) a party to proceedings in the Tribunal,

(b) an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal.

(4) In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings.

33. Secondly, s 38 of the NCAT Act sets out the following procedural provisions which are relevant to the directions that were made:

1. The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms: see s 38(4);

2. The Tribunal is to take such measures as are reasonably practicable:

1. to ensure that the parties to the proceedings before it understand the nature of the proceedings, and

2. if requested to do so to explain to the parties any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceedings, and

3. to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings: see s 38(5)(a), (b) and (c);

3. The Tribunal:

1. is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings, and

2. may require evidence or argument to be presented orally or in writing: see section 38 (6)(a) and (b).

34. In relation to the issue of summonses, a registrar may issue a summons on the application of a party to proceedings or at the direction of the Tribunal: see s 48 of the NCAT Act.

Conduct of the directions hearing and the reasons orders made

35. As if evident from the above history, the proceedings were commenced in December 2014 and have not been finally heard and determined.

36. An earlier decision made 7 August 2015 by the Tribunal is the subject of an appeal to the Appeal Panel which, at 28 September 2015, had not been finally heard and determined.

37. However, by that time the application of the stay of Order 3 made on 7 August 2015 had been the subject of a contested hearing before the Appeal Panel which published reasons on 21 September 2015. Relevant to the directions hearing on 28 September 2015 was paragraph 4 of the Appeal Panel’s reasons. The Appeal Panel was constituted by Deputy President Westgarth who said:

4   The proceedings in the Consumer and Commercial Division have been the subject of a number of directions hearings in the last few months largely concerned with the question of whether the homeowner’s representative should have access to the premises of the builder for the purposes of inspecting the goods which were the subject of the contract between the two parties. It was explained to me today that the homeowner is of the opinion that he needs to have evidence of the state of the products which were the subject of the contract in order to assist in his claim that the goods were defective. I raised with the representative for the homeowner whether an inspection was in fact required but as things presently stand the homeowner’s representatives are still of the view that a further inspection is required. On the other hand, the representative for the builder has argued quite strongly that an inspection has occurred and there has been no unreasonable lack of cooperation. It is not possible for me today to adjudicate on those issues between the parties. Everybody agrees (i.e. the representatives for both parties and I certainly am of this opinion) that the proceedings in the Consumer and Commercial Division need to be listed for a hearing as soon as possible. I therefore decided that those proceedings should be listed for directions as soon as possible and I will arrange for that to occur. It may occur later this week or early next week. I will not include this as part of the formal orders but I would expect the representatives of both parties to attend that directions hearing with a clear view as to what further evidence they require and whether the homeowner really needs a further inspection, the builder’s attitude to that inspection and how much time they need to put on the balance of their evidence. I also expect them to come with a reasonable number of available dates for hearing. Normally the Tribunal will accommodate available days but if they cannot, a hearing date will nevertheless be appointed.

38. As those reasons made clear, the matter was listed for directions so as to enable the Tribunal to consider what further directions needed to be made in connection with the preparation of the matter for final hearing, including in relation to the filing and service of any further evidence.

39. When the matter was listed on 28 September 2015 the applicant indicated that it wished to call expert evidence in relation to at least two matters for which he required a further inspection of the respondent’s manufacturing facility by his expert.

40. It should be remembered that at the time the Tribunal was making directions in connection with this further evidence that the parties, through their legal representatives, had failed to file an agreed statement of facts and issues in contention.

38. However, the effect of the applicant’s submissions was that he wanted to provide further opinions about:

1. Whether the work performed to date by the respondent in constructing various cabinet work and/or the materials proposed to be used were in storage and or of suitable quality to comply with the contractible obligations; and

2. Whether the respondent was capable of manufacturing high end cabinetry work at all.

42. The applicant said that this evidence was relevant to the question of whether or not the respondent had capacity to do the relevant work and/or whether the particular work in question was defective. The applicant also said this evidence was relevant to whether or not the respondent was in breach of a fundamental obligation of the contract or had otherwise repudiated its obligations, a matter relevant to the applicants assertion that it was entitled to and did properly terminate the relevant contract, a matter apparently done by notice of termination dated 5 January 2015 which forms part of the material filed by the applicant and apparently served on the respondent in this application.

43. The Tribunal formed the view that the incapacity of the respondent to manufacture high quality cabinetry work may amount to a breach of contract and may entitle the applicant to claim damages. Further, the Tribunal formed the view that the manufacture by the respondent in a manner and at a time which did not conform with the terms of the contract is a matter that might entitle the applicant to terminate the contract.

44. Accordingly, the Tribunal was satisfied that the real issues in dispute included:

1. Whether the work performed by the respondent was defective;

2. Whether the materials purchased for the purpose of performing the work were of appropriate quality and suitability; and

3. What was the extent of the work already performed and what was the reasonable time estimate to complete those works.

45. These were matters that the Tribunal considered may properly be the subject of expert evidence and that directions should be made to afford the applicant an opportunity to adduce this evidence. The Tribunal accepted the applicant’s submission that this required a further inspection by the applicant’s appointed expert, Mr Sarlos.

46. Further, the Tribunal considered that any expert proposed to the appointed by the respondent should have an opportunity to attend the manufacturing facilities with the applicant’s expert for the purpose of filing an agreed joint report recording areas of agreement, areas of disagreement and any relevant opinions in relation to matters not agreed.

47. The Tribunal was satisfied that a joint report would provide the parties and the Tribunal with appropriate assistance from their respective experts so as to ensure:

1. Any inspections undertaken by experts were done at the same time, of the same manufacturing facilities and of the same materials and cabinetry work already manufactured;

2. The respondent’s expert would not be disadvantaged because that expert was not present to make the same observations about which the applicant’s expert might opine if separate reports were prepared; and

3. A joint report, prepared in accordance with Procedural Direction 3 – Expert Witnesses and in accordance with order 6 made on 28 September 2015 would ensure that the work undertaken by the experts facilitated the just, quick and cheap resolution of the real issues in dispute.

48. Relevantly, in relation to Procedural Direction 3 – Expert Witnesses, the Tribunal had regard to the following provisions of that Procedural Direction:

11.   An expert witness has an overriding duty to assist the Tribunal    impartially on matters relevant to the expert witness’s area of    expertise.

12.   An expert witness’s paramount duty is to the Tribunal and not to any    party to the proceedings (including the person retaining the expert    witness).

13.    An expert witness is not an advocate for a party.

14.   An expert witness must abide by any direction given by the Tribunal.

15.   An expert witness, when complying with any direction of the Tribunal    to confer with another expert witness or to prepare a joint report with    another expert witness in relation to any issue must:

(a) exercise his or her independent, professional judgment in relation    to that issue;

(b) endeavour to reach agreement with any other expert witness on    that issue; and

(c) not act on any instruction or request to withhold or avoid    agreement with any other expert witness.

49. In circumstances where the respondent had not, by 28 September 2015, filed any expert evidence and where the applicant’s evidence was otherwise said to be complete, the Tribunal was therefore satisfied that the making of an order for a joint experts report by 11 November 2015, following a site inspection by the experts on 26 October 2015 constituted directions which would facilitate a final hearing of this dispute on a date to be fixed in the week commencing 23 November 2015.

50. In do so, the Tribunal listed the matter for a further directions hearing on 12 November 2015, for the purpose of making directions for the preparation of an agreed bundle and/or the exchange of submissions.

Application for the issue of summonses

51. The respondent sought leave to issue various summons.

52. The application was made at a time when the parties had failed to comply with the Tribunal’s directions in respect of filing an agreed statement of issues and in circumstances where the respondent had failed to exercise the leave given on 18 June 2015 to issue summonses.

53. The respondent asserted that it should be entitled to issue various summonses including to:

1. The Local Council, to seek production of any Development Approval in respect of the work;

2. To various contractors and others apparently doing other work for the applicant at the Premises where the cabinetry work was to be installed, apparently to require production of documents in relation to the progress of hose other works at the Premises;

3. To the applicant to require production of any quotations which the applicant may have sought from alternative suppliers.

54. In relation to the summons to the Council, the Development Application was sought because the respondent appeared to submit that it would record, inter alia, who the builder was. In this regard respondent appears to assert the applicant, who is apparently a builder, undertook the work as a builder and subcontracted the work to the respondent. On the other hand, the applicant appears to assert that he contracted with the respondent as a homeowner, not as an owner builder or by way of a subcontract.

55. The relevance of this factual dispute is that the respondent may have different obligations as a subcontractor as opposed to a principal contractor under the HB Act. These different obligations relate to the requirements for any written contract and insurance: see s7(8) of the HB Act re requirements for written contract and sections 92(1) and 98 of the HB Act re insurance requirements.

56. The Tribunal formed the view that there was a proper basis for the respondent to request the Development Approval, if any, relating to the works. However the Tribunal also formed the opinion that the issue of a summons to the Council was unnecessary as the applicant would have made the application for development approval and should therefore be able to produce the necessary documents without the need for the respondent to go to the trouble and expense of applying for a summons.

57. Consequently, the Tribunal made order 10 requiring production of the relevant document, by 6 October 2010.

58. In relation to the documents requested concerning the work of other contractors carrying out work for the applicant at the Premises, the Tribunal formed the opinion that summonses to the identified persons should not be issued at that time.

59. The reasons for this view were that the summonses appeared to seek documents concerning the progress of works by other people at the Premises. This may be relevant to an issue of whether the respondent had been delayed. However the respondent had not, as at 28 September 2015 filed any evidence that it had been delayed in carrying out work at the Premise, evidence that the respondent’s own witnesses should, in first instance, be able to provide without access to third party documents.

60. Further, and in any event, the applicant’s case relating to termination arises from the failure of the respondent to manufacture cabinetry work on time and to a satisfactory standard, a matter which appears wholly unrelated to the progress of other works at the Premises. In this regard neither party appears to assert that the respondent in fact commenced work at the Premises, some of the cabinetry work had been delivered to the Premises but rejected by the applicant and otherwise the cabinetry work was in its “raw material” state at the respondent’s manufacturing site and still to be manufactured into the required goods.

61. Accordingly, the Tribunal formed the view that the issue of the proposed summonses at that time was not appropriate, that directions should be made for the respondent to file its lay evidence concerning the events of termination and that the need for summonses could be reviewed at the next directions hearing then scheduled for 12 November 2015: see order 9 made 28 September 2015.

62. The final matter for which summonses were sought related to the respondent’s wish to seek production of any documents being quotations or other communications between the applicant and third party suppliers who may have been approached as alternative suppliers to provide the services for the cabinetry work about which the applicant was complaining. The respondent appeared to submit that these documents would be relevant to whether the applicant was obstructing the respondent from undertaking its work or might be indicative of an attitude by the applicant to simply terminate the contract with the respondent and seek alternative suppliers without just cause.

63. Upon questioning by the Tribunal, the respondent was unable to point to any evidence that alternative suppliers had in fact been approached. Consequently in the absence of any proper basis for issuing the summons the Tribunal formed the opinion that that the request, on its face, amounted to fishing. Further, the Tribunal formed the opinion that the fact alternative quotes may have been sought from other suppliers was not relevant to what then appeared to be the real issue in dispute, namely whether the applicant was entitled to and did properly terminate the contract by reason of the respondent’s failure to perform the contract according to its terms.

64. Accordingly the request to issue this summons was refused.

65. However, again in the absence of a joint statement of issues and the respondent’s lay evidence, the Tribunal formed the view that an application could subsequently be made in writing. Further, as the matter was listed for directions on 12 November 2015 and the directions made on 28 November 2015 provided for the filing of the joint statement of facts and issues in contention and the filing and service of lay evidence and expert evidence, the need for summons or the making of orders for the applicant to produce necessary documents could be otherwise dealt with at the subsequent directions hearing.

66. Accordingly, the Tribunal determined to exercise its discretion and make directions in the manner set out in the Orders made 28 September 2015.

M Harrowell

Principal Member

Civil and Administrative Tribunal of New South Wales

4 November 2015

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Amendments

07 January 2016 - attached additional files

Decision last updated: 07 January 2016