MENER GROUP PTY LTD and HIPPYDAYZE PTY LTD
[2019] WASAT 58
•31 JULY 2019
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINTS RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: MENER GROUP PTY LTD and HIPPYDAYZE PTY LTD [2019] WASAT 58
MEMBER: MS C WALLACE, SENIOR MEMBER
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 31 JULY 2019
FILE NO/S: CC 943 of 2019
BETWEEN: MENER GROUP PTY LTD
Applicant
AND
HIPPYDAYZE PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) - Application for leave to apply for internal review under s 58(2) - Criteria on application for leave - Whether there was a breach of s 54(10) of the State Administrative Tribunal Act 2004 (WA) - Whether there was a breach of the principles of natural justice where mediator also presided on final hearing - Whether errors of law made in formulation of final order - Whether reasons of the Tribunal were inadequate - Whether in the circumstances a substantial injustice will be suffered
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 5(2), s 11(1)(d), s 38, s 41(2)(b), s 43, s 43(1)(a), s 49(1), s 58(2)
Home Building Contracts Act 1991 (WA), s 17
State Administrative Tribunal Act 2004 (WA), s 25(2), s 32(1) s 54, s 54(6), s 54(10), s 60(2), s 77
Result:
Leave to review granted
Summary of Tribunal's decision:
The applicant applied, under s 58(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA), for leave to be granted to review the decision of Member de Villiers made on 28 May 2019. The decision of Member de Villiers was made in respect of applications made by the applicant seeking a Home Building Works Contract Remedy Order (HBWC Remedy Order) claiming amounts outstanding in respect of practical completion invoices issued to the respondent in respect of the construction of three units in the suburb of Gosnells. Although Member de Villiers found partially in favour of the applicant that money was owing under the relevant home building works contracts, a final order was issued ordering the applicant to pay the amount of $16,374.06 to the respondent.
The Tribunal granted leave to review the decision of Member de Villiers on the basis that if leave was not granted, a substantial injustice may be suffered by the applicant due to the following findings:
(a) Member de Villiers breached s 54(10) of the State Administrative Tribunal Act 2004 (WA) by both mediating the matter and then presiding at final hearing without the consent of the parties being sought or obtained. The Tribunal found that this also constituted a breach of the principles of natural justice.
(b) Errors of law were made given that Member de Villiers made findings that outstanding amounts were owing to the applicant but no HBWC Remedy Order was made. In addition, in the absence of any legal authority, Member de Villiers produced a final order which included the requirement to pay an amount by the applicant to the respondent which had been ordered in a previously concluded Tribunal proceeding, differently constituted.
(c) The misinterpretation of contractual provisions in the home building works contracts by Member de Villiers particularly in relation to how provisional sums are dealt with.
(d) Inadequate reasons for the decision were given which failed to explain the actual path of reasoning.
Category: B
Representation:
Counsel:
| Applicant | : | In Person |
| Respondent | : | In Person |
Solicitors:
| Applicant | : | N/A |
| Respondent | : | N/A |
Case(s) referred to in decision(s):
Centex Australasia Pty Ltd v Commissioner for Consumer Protection [2017] WASCA 79
Filimon and Rimmer [2013] WASAT 13
Mener Group Pty Ltd and Hippydayze Pty Ltd [2019] WASAT 37
REASONS FOR DECISION OF THE TRIBUNAL:
The application for leave to review
On 13 April 2018 the Building Commissioner received three home building work contract (HBWC) complaints made by Mener Group Pty Ltd (Mener Group), the applicant, against Hippydayze Pty Ltd (Hippydayze), the respondent, pursuant to s 5(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) and s 17 of the Home Building Contracts Act 1991 (WA) (HBC Act) claiming amounts outstanding in respect of practical completion invoices issued plus interest (the Mener Group HBWC complaints). The applicant lodged three separate complaints with the Building Commissioner on the basis that it had constructed three separate units for the respondent at 126 Fremantle Road in the suburb of Gosnells in the State of Western Australia.
On 23 April 2018 each of the Mener Group HBWC complaints were referred to the Tribunal pursuant to s 11(1)(d) of the BSCRA Act. The referral was made promptly on the basis that the Tribunal was already case managing six related complaints lodged by Hippydayze against Mener Group in respect of the same three units. Three of the complaints were referred to the Tribunal in July 2017, being proceedings CC 1436, 1438 and 1439 of 2017, which raised various allegations of breach of contract and misleading and deceptive conduct against Mener Group. Three further referrals were made to the Tribunal in February 2018, being proceedings CC 708, 709 and 710 of 2018 which also alleged various breaches of contract by Mener Group but which also included a number of building service complaints alleging that Mener Group had performed a regulated building service which had not been carried out in a proper and proficient manner or which was faulty or unsatisfactory pursuant to s 5(1) of the BSCRA Act.
The first order made by the Tribunal in respect of the Mener Group HBWC complaints was that they would be listed for mediation concurrently with proceedings CC 1436, 1438 and 1439 of 2017 and proceedings CC 708, 709 and 710 of 2018.
As per the order made by the Tribunal on 23 April 2018, the Mener Group HBWC complaints were mediated concurrently with the six related proceedings by Member Bertus de Villiers and Sessional Member Paul Marshall on 13 September 2018 and then again by Member de Villiers on 24 October 2018.
Whilst certain complaints brought by Hippydayze were resolved at mediation, none of the Mener Group HBWC complaints were resolved and ultimately were heard by Member de Villiers over a number of days on 20 and 22 March, 3 April and 22 May 2019.
Member de Villiers delivered oral reasons on 28 May 2019 which were subsequently published on 11 June 2019; Mener Group Pty Ltd and Hippydayze Pty Ltd [2019] WASAT 37 (Mener Group). Member de Villiers made the following final order:
1.The applicant shall pay to the respondent by not later than 7 June 2019 the amount of $16,374.06 in full and final settlement of matters CC 829/2018, CC 830/2018, CC 831/2018, and in compliance with order dated 26 March 2019 in regard to matter CC 1439/2017.
On 1 July 2019 the applicant filed an application pursuant to s 58(2) of the BSCRA Act seeking leave to review the decision of Member de Villiers in its entirety. The review application was addressed briefly with the parties at a directions hearing on 1 July 2019. Reference will be made shortly to the oral submissions made by the parties on that occasion.
On 19 July 2019 the Tribunal made a number of programming orders including an order staying the operation of Member de Villiers' order pursuant to s 25(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) and programming the question as to whether the applicant should be granted leave to review Member de Villiers' decision to be determined entirely on the documents pursuant to s 60(2) of the SAT Act.
The proposed grounds of review
The applicant filed with the Tribunal detailed written submissions setting out its grounds of review together with a bundle of documents. The applicant also supplemented the grounds at the directions hearing held on 1 July 2019. The following sets out the grounds of review in summary form:
1)Member de Villiers made an error of law by failing to make an order in the applicant's favour despite clearly finding in favour of the applicant in the Member's reasons for decision.
2)Member de Villiers erred in fact and law by failing to properly consider the applicant's claim in respect of provisional sums. In particular Member de Villiers failed to properly construe the relevant contractual provisions contained in the WA HBCA Lump Sum Building Contract (the building contract) entered into by the parties on 22 May 2015 in respect of each unit.
3)Member de Villiers erred in law by applying a 'set-off' against the amount that ought to have been ordered in the applicant's favour, by deducting the amount of $7,878.02 which had been ordered to be paid by the applicant to the respondent in final orders made by the Tribunal on 26 March 2019 in proceeding CC 1439 of 2017.
4)Member de Villiers erred in fact and law by deducting amounts from monies found to be owing to the applicant by the respondent in respect of air conditioning and hot water systems which were removed from site by the applicant on the basis of a refusal to pay by the respondent.
5)Member de Villiers erred in fact and law by ordering legal costs in favour of the respondent in the proceeding. The applicant effectively submits that there was no basis upon which to make the order in respect of legal costs and nor could the order be 'off-set' against the order which ought to have been made in the applicant's favour.
6)Lastly, the applicant submits that there was generally a failure to afford procedural fairness to the applicant during the course of the proceeding. Related to this ground, on 1 July 2019 the applicant informed the Tribunal that Member de Villiers ought not to have presided on the matter given that he was in breach of s 54(10) of the SAT Act which prevented him from taking any further part in the proceeding after mediating without consent of all of the parties, such consent which was never sought or given; ts 109, 1 July 2019.
It is important to note at this point that although the respondent does not accept that there is merit in the above grounds of review, with the exception of the last ground, the respondent supports the application for review and submitted to the Tribunal that leave ought to be granted; ts 111, 1 July 2019.
The criteria for the grant of leave
In Myran Holdings Pty Ltd and Bombak [2013] WASAT 20 at [8], the Tribunal set out the following criteria to be considered when deciding whether to grant leave for review and which were adopted from a consideration of that matter in the earlier decision of Filimon and Rimmer [2013] WASAT 13:
1)It is necessary to show that the decision of the original Tribunal was wrong or attended with sufficient doubt.
2)It must be shown that if leave were not to be granted, the applicant would suffer a substantial injustice.
3)It will normally not be sufficient that the decision appealed from is apparently wrong or attended with doubt. Something more will need to be shown, such as that there is a significant question of law to be considered, or some other feature, which requires the consideration of the Tribunal to avoid a substantial injustice of leave were not to be granted.
4)The decisions of the original Tribunal are not to be read minutely and finely with an eye keenly attuned to the perception of error.
5)A broad view should be taken of all the material before the original Tribunal, and this Tribunal should be slow to grant leave to review or to allow reviews except in cases where, clearly, there is no discernible basis for the decision or, for example, where fundamental rules of natural justice have been breached.
6)Leave may be granted in respect of only some and not other grounds of the proposed review.
7)Having regard to the objects of the Tribunal, and because any review is by way of a hearing de novo, there is all the more reason to be particularly discerning about whether sufficient doubt exists to open the possibility of leave being granted.
8) In considering challenges to the weight of evidence, regard must be given to the expertise of the members of the original Tribunal.
The above criteria of course is not exhaustive and the Tribunal is able to consider other relevant matters.
Relevant procedural history
As mentioned earlier in these reasons, at the time of the referral of the Mener Group HBWC complaints the Tribunal was already case managing six related complaints initiated by Hippydayze against Mener Group. Not unusually therefore given that the new applications were in respect of the construction of the same properties and as between the same parties, they were listed for mediation with the related matters.
All nine related matters were case managed by Member de Villiers during the period from at least April 2018 onwards.
During April to early September 2018 Member de Villiers held a number of directions hearings at which time various programming orders were made for filing of statements of issues, facts and contentions, expert reports and bundles of documents in respect of the Mener Group HBWC complaints.
On 13 September 2018 Member de Villiers, together with Sessional Member Marshall, being a registered builder, mediated all nine related proceedings on site at 126 Fremantle Road in Gosnells. The Mener Group HWBC complaints did not resolve at this mediation and the matters were listed for further mediation, this time before Member de Villiers alone, on 24 October 2018. The proceedings again did not successfully resolve on this occasion.
Member de Villiers continued to preside on the matters following the concluded mediations. Indeed, Member de Villiers made a further 10 sets of programming orders from October 2018 to April 2019, some of which were made at various directions hearings presided on by Member de Villiers with others simply made 'in chambers'. Those various orders comprised a number of programming orders but also effectively reminders and notes in the form of orders, to the parties.
On 8 February 2019 Member de Villiers listed the Mener Group HBWC complaints for final hearing before himself on 20 and 22 March 2019.
On 13 March 2019 Member de Villiers made the following orders on the documents:
1.In order to assist the parties to prepare and present their respective evidence and submissions in regard to the claim by the builder, the hearing will principally address the following questions:
(a)Was the date of practical completion 22 January 2018, and if not, what was the date of practical completion?
(b)Were the amounts owed by the owner to the builder on the date of practical completion the following:
Unit A ($16,409.13);
Unit B ($16,409.13); and
Unit C ($18,601.39)?
If these were not the amounts owed, what was owed on each respective unit?
(c)Should penalty interest be awarded, and if so, at what rate?
(d)What amount, if any, is owed by the owner to the builder?
2.Each party must refer to the relevant pages in the Bundle to support their position. No additional material will be accepted into evidence at the hearing since adequate opportunity has been given to both parties to file and serve the documents they wish to rely on.
The reference in the order to 'builder' and 'owner' are taken by this Tribunal to be a reference to the applicant and respondent respectively.
It seems that the matter proceeded to final hearing on 20 and 22 March 2019 and then was adjourned to 3 April 2019 at which time the matters were listed for further final hearing dates on 22 and 24 May 2019.
No evidence was accepted as an exhibit in the proceedings. It is therefore difficult to identify, from an evidentiary perspective, what Member de Villiers relied upon in reaching his decision. However, it may be assumed in this regard that Member de Villiers relied upon the number of hearing books which were produced by the Tribunal. In this respect a two volume hearing book was prepared by the Tribunal for the purposes of the two days of hearing which took place on 20 and 22 March 2019. A further hearing book was prepared for the purposes of the hearing which took place on 9 April 2019 which simply comprised 'Applicant's costings submissions dated 20 March 2019'. Then a further hearing book was prepared by the Tribunal for the purposes of the additional hearing dates listed on 22 and 24 May 2019.
The hearing books included copies of witness statements, expert reports, costings evidence, various relevant documentation including contractual documents together with written submissions prepared by the parties and copies of letters prepared by their legal representatives at various stages of the proceedings.
As mentioned previously, Member de Villiers delivered brief oral reasons on 28 May 2019 which were then published on 11 June 2019. Relevantly, Member de Villiers made the following findings:
a)That the applicant was only entitled to the amount of $6,833.34 in relation to 'provisional costs' for site works in respect of each unit on the basis that the schedule to the building contract only allowed that amount and the 'builder may not exceed the provisional sum' because the 'builder' did not seek 'a variation of the contract'; Mener Group at [11] [13].
b)Having deducted the excess amount claimed for provisional sums Member de Villiers found that the final progress payment owing in respect of each of the three units was $26,423.96; Mener Group at [18].
c)Member de Villiers then deducted from the final progress payment in respect of each unit the amount of $1,000 'due to the incorrect claim in the provisional cost for "Water and Gas Run"'. Member de Villiers noted in his reasons that the 'builder consents' to this deduction; Mener Group at [19].
d)Member de Villiers then made a further 'setoff' to the final progress payment in respect of each of the three units in the amount of $10,920 for the installation of hot water system and air conditioning which was paid for by Hippydayze. Again, Member de Villiers noted that 'the builder agrees' to the set-off to be made in favour of the 'owner'; Mener Group at [21].
e)Member de Villiers then made a further 'setoff' by deducting the amount of $7,878.02, which was ordered to be paid by the applicant to the respondent in proceedings CC 1439 of 2017 by a differently constituted Tribunal. Member de Villiers noted, in this regard, in his reasons for decision:
'[t]he builder, without leave of the Tribunal or a court, decided not to pay the amount on the due date which was 10 April 2019. The builder proposed that the amount be set off in this proceeding against any amount that is owed to the builder by the owner.’
(Mener Group at [22])
f)Lastly, Member de Villiers awarded costs in favour of the respondent in the amount of $21,000; Mener Group at [26].
Member de Villiers then made the final order referred to at [6] above. It ought to be noted that the claim by the applicant for interest on the amounts owing was not a matter dealt with by Member de Villiers and no order was made in respect to that aspect of the claim.
Consideration of review grounds
Breach of s 54(10) of the SAT Act
The Tribunal intends to deal with this ground of review prior to turning to a consideration of the other grounds for reasons which will become selfevident.
The Tribunal's conduct of mediations is dealt with in s 54 of the SAT Act. Relevantly, s 54(10) of the SAT Act provides as follows:
If the mediator is a Tribunal member, the member cannot take any further part in dealing with the proceeding after the mediation unless all parties agree to him or her doing so.
It is not in dispute between the parties that Member de Villiers mediated the matters on two occasions, being 13 September and 24 October 2018. Member de Villiers also mediated concurrently the other interrelated proceedings between the parties.
Mediations at the Tribunal are held in private; s 54(6) of the SAT Act. They are therefore not recorded. In addition, commonly the mediator or mediators will meet in private with one party or the other in the absence of the other party and will have confidential discussions which are not disclosed to the other party. Such discussions are commonplace in the context of the mediation process and are commonly referred to as 'private sessions'.
The purpose of mediation ought to be well understood. The intention is ultimately to resolve the matter so as to avoid the need for a hearing. The mediator's role is to robustly discuss issues with the parties and to 'reality test' their positions. The process therefore requires the mediator to question the parties on the relative strength of their positions, the risks associated with proceeding to hearing, and identifying the reasons why they ought to consider making particular concessions in order to reach a resolution with the other party. These matters are raised during the course of mediation rather than on the record because concessions may be explored by a party which they may wish to depart from if the matter does not resolve.
During the course of mediation, the mediator will often develop a trust relationship with the parties so as to facilitate their ability to encourage compromise. If there is no element of trust between the parties and the mediator, the mediation is less fruitful because a lack confidence in the mediator will diminish the mediator's ability to successfully reality test each party's position and suggest possible solutions for their consideration.
In the vast majority of cases, it would rarely if ever be appropriate for a Tribunal member who has mediated the matter, to then preside in the proceeding, particularly at any substantive final hearing. This is because, at the very least, the Tribunal member who has mediated has had private, unrecorded conversations with the parties and explored concessions with them in a context where the parties understand that any such concessions will not have any bearing on the matter if it proceeds to final hearing.
In light of the above considerations in respect of the process of mediation, the reasons for the inclusion of s 54(10) in the SAT Act ought to be selfevident.
Policies and express requirements prohibiting a judicial officer from acting as both mediator and adjudicator are common place across many jurisdictions within Australia and overseas and is a position which has been commented on by various academics including in the leading text by Laurence Boulle, Mediation Principles, Process, Practice (3rd Ed 2011) where at 14.57 page 607, the following is noted:
Where judges, magistrates or tribunal members serve as mediators and settlement is not reached, their subsequent involvement in the same dispute raises concerns. In some contexts it is expressly stipulated that they cannot have any further involvement, for example a judge who has mediated is precluded from presiding over a subsequent trial. Policies of this nature apply in several overseas jurisdictions[.]
It is usually contended that the preferable arrangement is one in which a judge or court official who has mediated has no further involvement in the same dispute … This is based on fairness and natural justice considerations and concerns that judges who have had confidential access to the parties could have conflicts of interests during later hearings. This view supports a strict separation of personnel between those who mediate and those who adjudicate[.]
In the current proceeding, Member de Villiers not only mediated for the parties but also heard the matter and made final substantive orders. This Tribunal accepts the parties' joint oral submission that Member de Villiers did not at any time inform the parties of the existence of s 54(10) of the SAT Act and therefore did not seek their consent; ts 109 109, 1 July 2019. It is also clear to this Tribunal that if Member de Villiers had sought consent from the parties, such consent would not have been forthcoming.
In this regard at the directions hearing before this Tribunal on 1 July 2019, in relation to this issue, the following exchange took place with Mr Buckley, the Director of the applicant and Mr Wilkens, the Director of the respondent:
BUCKLEY MR: … I had been made aware previously that obviously if a member … is in mediation, they can't do a final hearing, and it's something that was never addressed or brought up Member de Villiers to myself or, I believe, to Mr Wilkins to state that if we object to him being the the person during the final hearing, and I would because, of course, he has got a, I would assume, a preconceived idea of certain situations, given the history of both parties.
WILKINS MR: There was a because when I put my concerns with that, when it happened, I sent in off I can't remember if I sent it to the Executive Officer or to de Villiers, but an urgent directions hearing was called by de Villiers. He didn't let any of us speak; he just but he basically called out all the points that I made and just blanked them all off and then and then that was it. So we weren't allowed to speak or say anything.
WALLACE MS: So neither of you consented, then?
WILKINS MR: No.
BUCKLEY MR: No.
(ts 109 110, 1 July 2019)
It appears to this Tribunal that there has therefore been a clear breach of s 54(10) of the SAT Act by Member de Villiers. The breach is of a most serious kind in that it has resulted in a breach of procedural fairness being afforded to the parties. The parties were entitled to have a member or members presiding on the final hearing in respect of whom it could not be alleged they had 'preconceived ideas' due to private confidential discussions having occurred with the parties. In this Tribunal's view, a breach of the fundamental requirements of natural justice and procedural fairness in this manner is sufficient to undermine the hearing process itself and result in final orders being made which are inherently unreliable. It is clear that the Tribunal is bound by the rules of natural justice; s 32(1) of the SAT Act.
In this Tribunal's view this ground in and of itself is of such gravitas to necessitate leave to review being granted. Indeed, if the findings and decision were not open to review, in this Tribunal's opinion a substantial injustice would be suffered by both the applicant and the respondent.
However, it is important to address a number of other matters of concern raised by the grounds of review, particularly because the reasons and order of Member de Villiers have been published and are accessible to parties appearing generally in the Tribunal and to the public.
Errors in final order
The applicant raised a number of concerns in respect to the final order made by Member de Villiers and also in respect of an order which was omitted to be made by Member de Villiers. The Tribunal intends to deal with these grounds together.
In the Tribunal’s view there are two significant errors of law made by Member de Villiers in the final order made on 28 May 2019. Firstly, Member de Villiers clearly found in favour of the applicant by finding that the respondent had failed to pay the final practical completion invoice; Mener Group at [23].
Section 43(1)(a) of the BSCRA Act, empowers the Tribunal, if satisfied that an order is justified, to make a HBWC remedy order. Section 41(2)(b) of the BSCRA Act empowers the Tribunal to make a HBWC remedy order that a person pay a specified amount due and payable under a HBWC.
Despite making a finding that a specified amount was due and payable under the HBC Act and therefore being satisfied that 'the order is justified' Member de Villiers made no such order. Indeed, the final order made by Member de Villiers makes no reference to any section of the BSCRA Act or any other piece of legislation which would identify the relevant exercise of power.
In this Tribunal's view the failure of Member de Villiers to make a final order in accordance with the findings made constitutes a significant error of law.
Secondly, and as significantly, is the error of law made by Member de Villiers to 'setoff' an amount ordered by the Tribunal differently constituted in proceeding CC 1439 of 2017. Member de Villiers does not identify in his reasons for decision or in the wording of the order itself any legal basis upon which such a 'setoff' could occur.
This Tribunal has not been able to find any precedent where such a 'setoff' has been made previously. There are no provisions in the enabling legislation nor in the SAT Act which empowers the Tribunal to make such an order. Indeed, the only recourse ordinarily pursued in a matter once a final order for payment is made which has not been satisfied, is for the party to enforce the order in the appropriate competent court of jurisdiction.
Undertaking such a setoff without any legal basis is a further reason as to why the final order made by Member de Villiers is inherently unreliable.
3. Errors in findings in respect of provisional sums and contractual setoffs
The applicant raises in respect to a number of grounds of review alleged errors made by Member de Villiers in respect of his consideration and determination in respect to, in particular, provisional sum claims but also in respect to various setoff amounts.
This Tribunal wishes to make some brief comments in relation to these grounds of review.
Firstly, this Tribunal accepts the applicant's contention that Member de Villiers' comments in relation to how provisional sums are provided for in the building contract evidences an error in the interpretation and application of the relevant contractual provisions. In particular, the statement by Member de Villiers that a builder cannot exceed the provisional sum provided for in a HBWC (Mener Group at [12]) is clearly incorrect. A provisional sum, by its very nature, is a provisional allowance which may increase once the work the subject of the provisional sum has been performed. Clause 11(d) of the building contract therefore provides for the adjustment of provisional sums. Therefore, to suggest that a provisional sum cannot be adjusted simply flies in the face of the relevant provisions of the contract which apply to these payments.
In addition, the reference by Member de Villiers to the requirement of the applicant to seek a variation is also a clear error in the interpretation of the relevant contractual provisions. Adjustment of provisional sums does not require a variation to be issued. This is because clause 11(d) of the building contract provides that upon completion of the work the subject of the provisional sum or at the next progress payment an itemised statement is to be provided to the owner and the 'Contract Price will be adjusted accordingly'.
In relation to the other concerns raised by the applicant in respect to various findings made by Member de Villiers as to amounts owing or not owing by the respondent, the Tribunal wishes to make the following comments.
It has been difficult to identify whether there was any proper basis on which Member de Villiers made certain findings. This is because the reasons of Member de Villiers, other than referring to the contract itself, identifies no evidence on which findings of fact are made. As previously mentioned, no documents or witness statements or expert reports were received into evidence as exhibits. Nevertheless, Member de Villiers had various hearing books before him during the course of the hearing yet his reasons do not refer to any particular page of the hearing books so as to identify the basis upon which particular findings of fact are made.
In addition, Member de Villiers notes in a number of sections of his reasons that the applicant made concessions, which the applicant clearly refutes in this review application. However, Member de Villiers has not referred to any written concession made by the applicant. If the concession was made orally during the course of the hearing, Member de Villiers does not identify any particular transcript reference where such a concession was in fact made.
In this Tribunal's view, the position in this regard is most unsatisfactory.
The requirements to provide reasons for a final decision is set out in s 77 of the SAT Act:
Reasons for final decision
(1)The Tribunal is to give its reasons for a final decision.
(2)Reasons that the Tribunal gives for a final decision have to include the Tribunal’s findings on material questions of fact, referring to the evidence or other material on which those findings are based.
In the context of a consideration of s 77 of the SAT Act, the Court of Appeal in Centex Australasia Pty Ltd v Commissioner for Consumer Protection [2017] WASCA 79 set out the following propositions at [103]:
The statutory terminology used to define the obligation to provide reasons can and should be construed in the context of a line of decisions which, notwithstanding their dependence upon particular statutory provisions, inform the approach taken to the construction of particular statutory provisions such as those applicable to this case. The propositions established in those cases include the following:
(a)the primary function of reasons is to allow an appeal court to determine whether the decision involved appellable error and to provide procedural fairness to the litigants who are entitled to know why they have been successful or unsuccessful;
(b)the statement of reasons must explain the actual path of reasoning in sufficient detail to enable a court to see whether the decision is vitiated by error;
(c)reasons need not be lengthy and elaborate, nor do they require a reference to all of the evidence led or to every submission advanced by the parties;
(d)there is no mechanical formula which can be applied to determine whether reasons are adequate in any particular case - much will depend upon the particular circumstances of any individual case;
(e)usually it will be necessary to look at the reasons as a whole, viewed in the context of the evidence;
(f)where one set of evidence is accepted over a conflicting set of significant evidence the trial judge must set out his or her findings as to how it is that one has been accepted over the other;
(g)inadequacy of reasons does not necessarily amount to appellable error - rather, an appeal court will only intervene when the inadequacy is such as to give rise to a miscarriage of justice;
(h)appellable error arising from inadequate reasons does not necessarily result in a new trial - in an appropriate course the appeal court may itself determine the matter.
In this Tribunal's view, the reasons of Member de Villiers are seriously inadequate and do not reveal the process of reasoning undertaken particularly in relation to the various 'setoffs'. For example, the basis on which the provisional cost for water and gas was found to be 'incorrect' is not discernible at all; Mener Group at [19]. In addition, the basis on which Member de Villiers found that amounts ought to be deducted from the practical completion invoice for the installation of a hot water system and air conditioning is entirely unclear; Mener Group at [21].
In this Tribunal's view the inadequacy of Member de Villiers reasons has resulted in a miscarriage of justice. This Tribunal is unable to discern the path of reasoning undertaken by Member de Villiers and although there is no requirement to refer to all of the evidence, the reasons of Member de Villiers are devoid of any reference to evidence.
Given that the Mener Group HBWC complaints were heard over four days and the parties expended over $100,000 between them, the brevity of the reasons is inexplicable; Mener Group at [26] and pages 9 28 of the Tribunal Hearing Book dated 22 and 24 May 2019.
Erred in fact and law by ordering legal costs in favour of the respondent in the proceeding
In relation to the grounds of review in relation to the costs order made by Member de Villiers this Tribunal notes that there is no jurisdiction which empowers the Tribunal to internally review an order made in respect to costs. Although Member de Villiers did not make reference to the relevant statutory provision, the order awarding costs in favour of the respondent was made pursuant to s 49(1) of the BSCRA Act.
Section 58(2) of the BSCRA Act only authorises the Tribunal to internally review a decision of the Tribunal, when constituted without a judicial member, in exercise of jurisdiction given under s 38 or s 43 of the BSCRA Act.
Conclusion
In light of the above matters the Tribunal has decided to grant leave to the applicant to review the decision of Member de Villiers made on 28 May 2019 other than as to costs. As mentioned previously, the application in this regard was uncontested by the respondent, who for different reasons is also of the view that the decision of Member de Villiers is unreliable.
It is unfortunate that the parties find themselves in this situation because of the length of time it took the matter at first instance to be finalised, and the significant costs incurred by both in reaching that resolution. Having regard to those considerations the Tribunal intends to list the hearing de novo as expeditiously as possible.
Orders
The Tribunal makes the following orders:
1.The applicant is granted leave to review the order made by Member Bertus de Villiers dated 28 May 2019 pursuant to s 58(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) except as to costs.
2.By 9 August 2019 the applicant is to file with the Tribunal and give to the other party all documents on which they wish to rely at the final hearing not already filed with the Tribunal, including any expert reports, photographs, quotations or other documents relevant to the costings of the complaint items to be determined by the Tribunal.
3.By 30 August 2019 the respondent is to file with the Tribunal and give to the other party all documents on which they wish to rely at the final hearing not already filed with the Tribunal, including any expert reports, photographs, quotations or other documents relevant to the costings of the complaint items to be determined by the Tribunal.
4.The Executive Officer is to prepare six copies of a hearing book containing the relevant documents filed with the Tribunal by the parties. The hearing book will be available for the parties to collect it three days prior to the hearing.
5.The matter is listed for final hearing to commence at 10 am on 9 September 2019 for the duration of five days.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS C WALLACE, SENIOR MEMBER
31 JULY 2019
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