Martin v Gosdschan
[2011] QCATA 224
•23 August 2011
| CITATION: | Martin v Gosdschan (No 2) [2011] QCATA 224 |
| PARTIES: | Bradley Martin (Applicant/Appellant) |
| v | |
| Petra Gosdschan (Respondent) |
| APPLICATION NUMBER: | APL251-10 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | 15 June 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Kerrie O’Callaghan, Senior Member Barry Cotterell, Member |
| DELIVERED ON: | 23 August 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] Leave to appeal is granted. [2] The appeal on the ground of procedural fairness is allowed. [3] That part of the respondent’s counter claim relating to the cost of rectification of defects be returned to the Tribunal for rehearing. [4] The decision of the Tribunal made in BD439-09 is stayed pending the outcome of the rehearing or other order of the Tribunal. [5] BD439-09 is listed for directions on a date to be notified. |
| CATCHWORDS: | PROCEDURAL FAIRNESS – Procedure – whether appellant denied procedural fairness in the way in which the application was heard – failure to allow cross-examination Queensland Civil and Administrative Tribunal Act 2009, ss 28, 95 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act2009 (QCAT Act).
REASONS FOR DECISION
Senior Member Kerrie O’Callaghan:
In this matter the Appeal tribunal was comprised of QCAT Member Barry Cotterell and me. I have had the advantage of reading his reasons in draft. I agree with them, and with the orders he proposes.
Member Barry Cotterell:
Background to the Hearing
The applicant, Bradley Martin, (Mr Martin) initially claimed the sum of $20,030 in his application filed 2 October 2009. He was granted leave at a compulsory conference on 23 March 2010 to amend his claim to include a claim in quantum meruit and was to deliver an amended claim and response to the counterclaim, and statements in support, by 21 April 2010. At the hearing of this matter his amended claim by way of quantum meruit was for $12,268.74.
Mr Martin delivered his documents on 22 April 2010.
The Respondent, Petra Gosdschan, (Ms Gosdschan) in her Defence and Counterclaim filed on 9 November 2009 had requested that the Claim be dismissed for the following reasons.
3.1 The Application relates to domestic building work as defined in section 8 of the Domestic Building Contracts Act 2000, (hereinafter referred to as the DBC Act).
3.2 As the amount claimed is for more than $3, 300, it is a regulated amount as defined in Schedule 2 of the DBC Act.
3.3 The Applicant's application, at Items 2 and 7 of Form 1BD admits that the contract was verbal.
3.5 No documentation has been issued by the Applicant, in particular no contract as required by the DBC Act.
3.6 No documentation has been signed by either the Applicant or the Respondent, in particular no contract as required by the DBC Act.
3.7 As there was no contract in writing, the Applicant is in breach of sections 26, 27, 28, 29 and 30 of the DBC Act.
3.8 The contract is therefore void and ineffectual by operation of sections 30 and 93 of the DBC Act.
Ms Gosdschan then counterclaimed:
“9.1.1 $4,260 for overpayments to the Applicant;
9.1.2 $330 for payment to Handovers.com Pty Ltd for the Building Report;
9.1.3 $12,411.90 for payment to Abode Constructions (Qld) Pty Ltd ACN 109 198 923 – BSA licence No. 1111817 for work conducted;
9.1.4 $19, 588.10 for payment to Abode Constructions (Qld) Pty Ltd ACN 109 198 923 – BSA licence No. 1111817 for work conducted for work still to be conducted.”
(Tribunal’s highlighting)
In summary, Ms Gosdschan sought that Mr Martin be ordered to pay her the amount of $36,590 in accordance with her Counterclaim.
Mr Martin subsequently, in his amended statement of claim, accepted Ms Gosdschan’s arguments that the contract was void and ineffectual by operation of sections 30 and 93 of the DBC Act and amended his claim to include a claim in quantum meruit. This resulted in his claim for $12,268.74 being his reasonable value of the works of $92,268.74 less the $80,000 paid by Ms Gosdschan.
Ms Gosdschan applied to be legally represented on 17 December 2009. This was opposed by Mr Martin but the Tribunal approved this on 12 May 2010. Ms Gosdschan was legally represented at the hearing by Ms Wallace. Mr Martin represented himself.
At the hearing, Ms Wallace sought leave to amend Ms Gosdschan’s counterclaim from $4,260 for overpayments to $80,000 which was the amount the parties agreed had been paid by Ms Gosdschan to Mr Martin. This was subsequently approved by the Tribunal although no formal application had previously been filed. Mr Martin did not object to this amendment.
Background to the Dispute
The work proceeded on the basis of a quotation by Sideview Developments, an unregistered business name used by Mr Martin, in the sum of $98,000 and dated 10 November 2008. The relevant period for this work was from 10 November 2008 to 31 March 2009.
Mr Martin was licensed as a builder by the Building Services Authority but during this period Mr Martin’s licence was suspended from 23 February 2009 to 24 March 2009.
However, at the hearing it came to notice that Sideview Developments Pty Ltd was a company controlled by Mr Martin to which all monies received were paid and from which all monies were paid by cheque and cash was drawn. Mr Martin stated that he did not have any bank accounts in his name (Transcript page 15).
When Mr Martin referred to cheque butts at the hearing, he was referring to cheque butts relating to Sideview Developments Pty Ltd’s bank account. Sideview Developments Pty Ltd was not licensed as a builder by the Building Services Authority which would explain why it was not able to bring any claim for this building work. Likewise, Sideview Developments is not a legal entity and cannot bring any claim.
The grounds of appeal
Mr Martin (the Appellant) raised 5 grounds of appeal:
a. the original decision maker (the member) used facts available to him to construct the value of the work in error;
b. the original decision maker (the member) used facts available to him to construct the terms of the claim in error;
c. the member conducted an exercise in "judicial re-writing" of the terms and the value of the agreement to the detriment of the Appellant and without giving the Appellant the opportunity to either adjourn or cross-examine and thereby did not afford the Appellant the opportunity to have a proper hearing of the matter;
d. the Respondent was allowed to call evidence which was filed late and the Appellant was not afforded the opportunity to either:
i adjourn the hearing;
ii cross-examine that witness;
e. the member allowed substantial amendments prior to the hearing without affording the Appellant the opportunity to make amendments or provide further material.
The grounds of appeal raise questions of mixed law and fact, so leave is necessary (s 142(3) of the Act).
Grounds a, b and c raise questions of fact. The Appellant concedes that the member “used facts available to him” but claims that he constructed the value of the work and the terms of the claim “in error” and “conducted an exercise in “judicial rewriting” of the terms and value of the agreement based on these available facts. The parties were required to place the facts before the Tribunal and the member is entitled and required to decide the matter on the basis of the “available facts”. It would be an error for the member to decide the matter on other facts than those presented to the Tribunal but that is not alleged.
The claim in the appeal application that not all the facts supporting the quantum meruit claim were before the Tribunal does not justify grounds a, b and c as the Applicant had adequate opportunity to file his material.
In the appeal application there is insufficient explanation of how the member was in error. We do not give leave to appeal on those grounds.
Grounds c, d and e all raise the issue of procedural fairness and the Appellant also specifically raises procedural fairness as an additional ground for review and states that in this matter such a requirement has been breached. These grounds raise questions of law.
Specifically it is claimed:
“In this particular instance the Appellant was unrepresented and on a number of occasions was criticised for not having the appropriate evidence. The validity of the decision could be challenged simply on the basis that the member allowed amendments which substantially changed the quantum of the Respondent's case despite the Appellant asking on a number of occasions, as indicated above for an adjournment.”
It is then claimed that:
“the decision could also be challenged on the basis that a proper hearing needs to be conducted. The cross-examination of the witness (Adobe Constructions) and the instances where the member did not allow ample opportunity for a self-represented party to obtain the evidence he would need to prove his costs or challenge the case against him should be of some concern in relation to the validity of the decision. If the credibility of a witness is in question or a party seeks to prove some elements of this case through cross-examination of a witness that party should be entitled to cross examine the evidence provided, as such evidence will invariably be given weight by the member.”
With respect to the first procedural fairness ground, the Appellant’s amended claim had pleaded that $80,000 had been paid and because of the way that the Appellant had accepted this $80,000 and then sought to claim the additional $12,268.74 which had not been paid, the Respondent chose to put the payment of the $80,000 in dispute. While the Respondent’s application to amend should have been filed before the hearing the Appellant would not have been taken by surprise and the Appellant did not seek an adjournment or object to the amendment of the counter-claim by the increasing of the amount claimed as an overpayment from $4,260 to $80,000. The Appellant’s request for an adjournment did not relate to this amendment but to his perceived need to obtain the cheque butts to prove his case. No cheque butts had been filed by the Appellant prior to the hearing.
As the Respondent points out in response to this appeal:
a) The Statements delivered and filed by the Appellant on 24 June 2010 were allowed despite being late. They were required to be filed by 11 June 2010 which was then extended to 19 June 2010.
b) The Affidavit of the Appellant delivered on 14 July 2010 (the day prior to the hearing) was allowed despite being late. It was required to be filed by 11 June 2010 which was then extended to 19 June 2010.
c) The Amended Claim delivered and filed by the Appellant on 29 June 2010 was allowed despite being late. It was required to be filed by 7 April 2010 but was prepared and filed by Sawford Voll, Solicitors, then acting for the Appellant.
d) The Appellant was allowed to argue a defence to the Counterclaim at the hearing, despite the fact that no defence had been filed or served.
The Tribunal agrees with the Respondent’s submission that the Appellant brought the case and should have been prepared to run his case on the day set down for the hearing and have all relevant material presented prior to the hearing.
The Appellant was given numerous opportunities by the Tribunal, over a period of time, to provide all material and to amend his claim.
The Tribunal notes that the bank statements provided were all in the name of Sideview Developments Pty Ltd. They were not in his name. The Appellant at page 49 of the transcript admitted that the money went through the company, not to or from himself. Further, at pages 56 to 57 of the transcript, the Appellant admitted that the money went into a company account and he never transferred it into his own account. At page 61 of the transcript, the Appellant admitted that where credit accounts were required to be opened (for example with a supplier), those accounts had to be under the company name.
The Tribunal agrees with the Respondent that “It is reasonable to assume then that the cheque butts referred to are related to this company bank account.” Because the claim is not made on behalf of the Appellant’s company, but on his own behalf, the Tribunal also agrees with the Respondent’s conclusion that: “Therefore any cheque butts for a company account are irrelevant.”
The Tribunal agrees that the provision of cheque butts would not have assisted the Appellant in his claim in relation to the labour portion. At pages 86 to 87 of the transcript the Appellant admits that he paid his labourers in cash (with the exception of one cheque payment in the amount of $240). In relation to the one cheque payment, the Appellant admits at page 88 that it came from a company account. Therefore the Tribunal agrees with the Respondent that there would be no cheque butts proving payment for labour.
Further to the above, the Tribunal notes that where a credit account was required for the purchase from a supplier that account had to be under the company name of Sideview Developments Pty Ltd and, therefore, the Tribunal concludes that all materials were paid for by Sideview Developments Pty Ltd and not by the Appellant. At the hearing, the Appellant stated that “all my business is paid out of the bank account (referring to the Sideview Developments Pty Ltd account) it’s the only bank account I have”.
Turning now to the second procedural ground being the member’s failure to allow the Appellant to cross-examine the witness from Abode Constructions (Qld) Pty Ltd (Abode). The Tribunal notes the amounts in the Scott's Schedule total up to the quotation from Abode dated 25 November 2009 (which lists 27, (not 58), separate items) in the amount of $32,000. There was an earlier quote provided by Abode on 19 August 2009 (listing 13 items) in the amount of $12,411.90. The amount in this earlier quote was stated by the respondent to be included in the quote of $32,000. Therefore, the Tribunal finds that a significant amount of the Respondent’s counterclaim depended upon the evidence from Abode.
The Appellant stated that the Abode quotation in the amount of $32,000 was greatly inflated as confirmed by his response in the Scott's Schedule. The Appellant's answers to the Scott’s Schedule accepted only to claims totalling $591.72 which were later increased by a further $810.00. The response was prepared by Matthew Lynch of Wise Property Developments Pty Ltd, who gave evidence that he could do this work for $810. However, his evidence, which vastly differed from the quotes from Abode, was not preferred by the member who had not heard from Abode.
While the Appellant had not filed a Defence to the Counter-claim there could have been no doubt that he was defending the Counter-claim because in the Directions of 23 March 2010 the following direction was made:
2. The respondent will allow the applicant access to the site for the purposes of assessing the counterclaim and his quantum meruit claim at 8:00am on 7 April 2010.
This access resulted in a statement from Mr Lynch of Wise Property Developments Pty Ltd and the incorporation of his estimates in the Scott’s Schedule completed by the Appellant. In addition, Mr Lynch gave evidence at the hearing and he was taken through his evidence item by item. Pleadings are not necessarily required in the Tribunal. In this case, a directions hearing was held on 12 May 2010, and Mr Martin was directed to file in the Tribunal and deliver to the Respondent “his response and any material he intends to rely on”. A Defence to the Counter-claim was not directed to be filed. The material filed and served by Mr Martin made it clear to the Respondent that he was disputing the Counter-claim.
In the transcript (at page 200) it is noted that the Appellant wanted to cross examine Abode in relation to their quotation of $32,000, but was not permitted to do so. The Respondent initially had said that Justin Andrews from Abode was not available (at page 190). However when it became apparent that Mr Corn of Handover.com, who prepared the defects list used by Abode to quantify the cost of rectification, could not substantiate the individual amounts claimed for the items that he had suggested were defects, the Respondent told the Tribunal that Justin Andrews of Abode was available to give evidence if needed (at page 199). Despite this, the Appellant was not able to cross examine Justin Andrews of Abode. The Appellant submits that this, as well as the failure to grant the adjournment, is a fundamental mistake of law.
At page 208 of the transcript, the member found it indisputable that the amount of $12,411.90 had been paid for the repair of defective work and that the Respondent should be compensated for that. The member simply accepted Abode’s quotation of $12,411.90 because this work had been carried out. Both the need for the work and the cost was being challenged by the Appellant who stated e.g. that the work was approved by the certifier and did not require rectification.
Abode was not required to explain and justify its quotation of $32,000 for rectification which included the $12,411.90. The member then discounted the $32,000 quotation by $12,000 and excluded the painting to arrive at $15,545 which he then halved to arrive at an award of $7,770.50 for the rectification.
Procedural Fairness Requirements in QCAT
The requirements of procedural fairness in a case must be adjusted to the statutory framework governing the Tribunal in question. In Kioa v West (1985) 159 CLR 550 at 584-585, Mason J observed:
“Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute. In Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation[1963] HCA 41; (1963) 113 CLR 475, Kitto J pointed out [at pp 503–4] that the obligation to give a fair opportunity to parties in controversy to correct or contradict statements prejudicial to their view depends on “the particular statutory framework”. What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject-matter, and the rules under which the decision-maker is acting (Reg v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group[1969] HCA 10; (1969) 122 CLR 546 at 552–3; National Companies and Securities Commission v News Corporation Ltd[1984] HCA 29; (1984) 156 CLR 296 at 311, 319-321).
It is necessary then to consider the practices of QCAT and the circumstances of the case. Whilst QCAT is required to observe natural justice (s 28 (3)(a)) it is obliged to “act with as little formality and technicality and with as much speed as the requirements of this Act, an enabling Act or the rules and a proper consideration of the matters before the tribunal permit” (s 28 (3)(d)). It is not bound by the rules of evidence (s 28 (3)(b)), and still less by the rules of pleading. It may inform itself “in any way it considers appropriate” (s 28(3)(c)) and “The procedure for a proceeding is at the discretion of the tribunal, subject to this Act, an enabling Act and the rules” (s 28 (1)).
At a hearing before QCAT, there is no automatic right to cross-examine a witness but the Tribunal is required to comply with section 95 which states:
“95 Evidence
(1) The tribunal must allow a party to a proceeding a reasonable opportunity to--
(a) call or give evidence; and
(b) examine, cross-examine and re-examine witnesses; and
(c) make submissions to the tribunal.
(2) Despite subsection (1)--
(a) the tribunal may refuse to allow a party to a proceeding to call evidence on a matter if the tribunal considers there is already sufficient evidence about the matter before the tribunal; and
(b) the tribunal may refuse to allow a party to a proceeding to cross-examine a witness about a matter if the tribunal considers--
(i) there is sufficient evidence about the matter before the tribunal; and
(ii) the evidence has been sufficiently tested by cross-examination; and
(c) ...
(3) Also, the tribunal may place time limits on the giving of evidence and on the examination, cross-examination and re-examination of witnesses.
(4) …”
Here the member allowed the Respondent a reasonable opportunity to cross-examine Mr Lynch on his estimate of the cost of rectification but denied the Appellant any opportunity to cross-examine Abode on its estimate. Section 95(2)(b) did not apply even if the member considered that there was sufficient evidence before the Tribunal about the cost of rectification because (ii) required that that evidence had been sufficiently tested by cross-examination. Section 95(3) was not cited by the member and would not have been relevant under the circumstances.
As Justice Alan Wilson, President, and Susan Gardiner, Member, said in Re TG[2011] QCATA 97:
“…the expression ‘procedural fairness’ more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case.”
Here without the cross-examination of Abode, how did the member decide to give more weight to Abode’s evidence than to that of Mr Lynch who was extensively cross-examined? Abode’s evidence was completely untested. To not allow the Appellant to cross-examine Abode under those circumstances was not a fair procedure.
Glass JA in Seymour v ABC (1990) 19 NSWLR 219 at 225C said:
"In normal circumstances, a court will be inclined to disregard a submission on evidence that was not tested by cross-examination”.
Here the member clearly preferred the evidence of Abode which was not tested by cross-examination.
Conclusions
The Appeal Tribunal finds that the failure of Abode to be required to attend for cross-examination on such a significant part of the Respondent’s Counter-claim, which was clearly being contested by the Appellant, was a breach of the rules of procedural fairness. Leave to appeal on that ground is granted.
The Appeal Tribunal finds that the way the member conducted the hearing without giving the Appellant the opportunity to cross-examine Abode did not afford the Appellant the opportunity to have a proper hearing of the matter.
The Appeal Tribunal therefore allows the appeal against the decision on the question of law, namely that there was a breach of procedural fairness. Under section 146 of the Act the Appeal Tribunal may:
(c) Set aside the decision and return the matter to the Tribunal who made the decision for reconsideration-
(i)with or without the hearing of additional evidence as directed by the Appeal Tribunal;
(d) make any other order it considers appropriate, whether or not in combination with an order made under paragraph (a), (b) or (c).
As we have found that the breach of the rules of procedural fairness related only to the member’s failure to allow the appellant to cross-examine Abode, we intend to return that part of the counterclaim for the cost of rectification of defects to the Tribunal for re-hearing, with the only additional evidence being the Appellant’s cross-examination of Abode.
The outcome of that rehearing may result in a variation of the Tribunal’s decision of 15 July 2010 which requires the appellant to pay to the respondent the sum of $48,020.07 by 24 August 2011. In those circumstances we consider it appropriate to stay that decision until the outcome of rehearing or other order of the Tribunal.
Rather than the Appeal Tribunal fashioning directions without hearing from the parties, the matter is referred for directions at the earliest available date to be advised by the Registrar after consultation with the parties and with the Senior Member with responsibility for this jurisdiction.
ORDERS
Leave to appeal is granted.
The appeal on the ground of procedural fairness is allowed.
That part of the Respondent’s counter claim relating to the cost of rectification of defects be returned to the Tribunal for rehearing.
The decision of the Tribunal made in BD439-09 is stayed pending the outcome of the rehearing or other order of the Tribunal.
BD439-09 is listed for directions on a date to be notified.
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