Mercuri v TCM Building Group Pty Ltd - [2018] VSC 604

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2017 03260

KRISTINE MERCURI	Applicant
v
TCM BUILDING GROUP PTY LTD (ACN 139 290 618)	Respondent

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	3 May 2018
DATE OF JUDGMENT:	18 October 2018
CASE MAY BE CITED AS:	Mercuri v TCM Building Group Pty Ltd
MEDIUM NEUTRAL CITATION:	[2018] VSC 604

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ADMINISTRATIVE LAW – Application for leave to appeal from VCAT decision with respect to interest and costs – Domestic building dispute – Builder issued VCAT proceeding to recover monies said to be owed by owner – Owner counterclaimed for cost of rectification of defects and for credits said to be owed – Consideration of principles relevant to the exercise of a discretion with respect to costs – Pong Property Development Pty Ltd v Strangio (2015) 23 VAR 128, referred to – Whether the Senior Member erred in law by ordering the owner to pay the builder’s costs – Whether the Senior Member had regard to an irrelevant consideration – Whether the Senior Member failed to have regard to the relative strengths of the parties’ claims when considering whether to make an order for costs – Frugtniet v Law Institute of Victoria [2012] VSCA 178, applied – Whether Tribunal erred in law by ordering owner to pay builder’s costs on indemnity basis – Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435, referred to – Duggan v MGS Products Pty Ltd [2002] VCAT 1764, referred to – Metricon Homes Pty Ltd v Sawyer [2013] VSC 518, referred to – Whether the Senior Member erred in law by awarding damages in the nature of interest under s 53 of the Domestic Building Contracts Act 1995 (Vic) – Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 3) [2003] VSC 244, referred to –Whether the Senior Member’s conduct gave rise to a reasonable apprehension of bias – Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, referred to – VCAT Act s 109, 112 and 119 – Supreme Court (General Civil Procedure) Rules 2015 – Leave to appeal granted in part – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Andrew	Jeremy Johnson & Associates
For the Defendant	Mr M H Whitten QC with Mr G F Hellyer	Telford Story & Associates

TABLE OF CONTENTS

Background.................................................................................................................................... 1
The proceeding at VCAT............................................................................................................. 2
The Application for leave to appeal........................................................................................ 12
General observations.................................................................................................................. 15
Ground 1 – departing from the rule that there be no order as to costs............................... 17
Submissions........................................................................................................................ 17
Conclusion.......................................................................................................................... 21

Ground 2 – making an order for indemnity costs.................................................................. 29
Submissions........................................................................................................................ 29
Conclusion.......................................................................................................................... 33

Ground 3 – award of interest..................................................................................................... 38
Submissions........................................................................................................................ 38
Conclusion.......................................................................................................................... 40

Ground 4 – apprehended/actual bias..................................................................................... 43
Submissions........................................................................................................................ 43
Conclusion.......................................................................................................................... 46

Disposition................................................................................................................................... 49

HER HONOUR:

Background

This is an application for leave to appeal from a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] VSC 604
Decision Date: 18 October 2018

CaseChat Overview and Summary

Mercuri was the owner of a residential property, and TCM Building Group Pty Ltd was the builder. Mercuri commenced proceedings in the Victorian Civil and Administrative Tribunal (VCAT) against TCM, seeking the cost of rectification of defects and credits said to be owed. TCM, in turn, issued a cross-claim to recover monies said to be owed by Mercuri. The dispute involved issues of costs and interest under the Domestic Building Contracts Act 1995 (Vic). The primary issues before the court were whether the Senior Member of VCAT erred in law by ordering Mercuri to pay TCM's costs, whether the Senior Member had regard to irrelevant considerations or failed to consider the relative strengths of the parties' claims, whether VCAT erred in ordering Mercuri to pay TCM's costs on an indemnity basis, whether the Senior Member erred in awarding damages in the nature of interest, and whether the Senior Member's conduct gave rise to a reasonable apprehension of bias.

The court found that the Senior Member erred in law by ordering Mercuri to pay TCM's costs without considering the relative strengths of the parties' claims. The court also found that the Senior Member failed to have regard to relevant considerations and had regard to irrelevant considerations when making the order for costs. The court found that VCAT did not err in ordering Mercuri to pay TCM's costs on an indemnity basis. The court found that the Senior Member did not err in awarding damages in the nature of interest. Finally, the court found that the Senior Member's conduct did not give rise to a reasonable apprehension of bias.

The court granted leave to appeal in part and dismissed the appeal. The orders made by the court included that the appeal be dismissed, and that the parties bear their own costs of the appeal.

Orders