MULVAY PTY LTD and PETERS
[2009] WASAT 200
•19 OCTOBER 2009
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION: MULVAY PTY LTD and PETERS [2009] WASAT 200
MEMBER: DR B DE VILLIERS (MEMBER)
HEARD: 12 OCTOBER 2009; DECISION RESERVED ON THE SAME DAY
DELIVERED : 19 OCTOBER 2009
FILE NO/S: CC 296 of 2009
BETWEEN: MULVAY PTY LTD
Applicant
AND
RICHARD PETERS
FELICITY PETERS
Respondents
Catchwords:
Review of decision - Grounds for review - Request for Tribunal to specify what remedial action to take - The implications if the remedial action outweigh the scope of work that would result from doing the work - Failure of the Tribunal to comply with the rules of natural justice when an order to pay was made - Must all complaints be specified when the dispute is declared?
Legislation:
Builders' Registration Act 1939 (WA), s 12A(1), s 12A(2), s 38(3), s 41(1)
Result:
The application for leave to review the decision of the Building Disputes Tribunal is dismissed
Category: B
Representation:
Counsel:
Applicant: Mr AM Prime
Respondents : Self-represented
Solicitors:
Applicant: McCallum Donovan Sweeney
Respondents : Self-represented
Case(s) referred to in decision(s):
Brodun Construction and Love [2008] WASAT 174
Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294
Devereaux-Warnes v Hall [2006] WASCA 268
Tangent Nominees Pty Ltd and Edwards [2005] WASAT 119
Wilson v Metaxas [1989] WAR 285
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
Mulvay Pty Ltd sought a review of a decision of the Building Disputes Tribunal to order it to do remedial work on timber floors and to contribute to the costs of an expert witness called by Mr and Mrs Peters.
Mulvay Pty Ltd contended that the Building Disputes Tribunal erred in its reasoning for the following reasons: the problem with orange peel and extrusion of glue/sealer were not highlighted in the preliminary notice or the complaint form; the hearing mainly focused on the cupping of the timber floor and not on orange peel; the remedy ordered would require work that is completely out of proportion with the problem; the Tribunal should have made detailed orders as to the preferred remedy; and the order for costs was handed down without Mulvay Pty Ltd having had an opportunity to review the invoices or to make submissions about the merit of the costs application.
Mr and Mrs Peters contended that: it was known all along that the orange peel and the extrusion of glue/sealer formed part of the problem; the matters were raised during the hearing and at the site inspection; there was ample opportunity for Mulvay Pty Ltd to make submissions and to lead evidence about it; there was no legal obligation on the Building Disputes Tribunal to order a specific remedy; the remedy to resand and seal would not be out of proportion since a large part of floor is affected; and the order to pay was within the powers of the Tribunal since Mulvay Pty Ltd was aware that a costs order had been sought.
The Tribunal found that the Building Disputes Tribunal is not limited to consider only those disputes that were formally included in the notification. The orange peeling and extrusion of glue/sealer were part of the problem from the day of practical completion, and it received attention from the expert during the hearing and at the site inspection. The Tribunal further found that although the Building Disputes Tribunal may specify a specific remedy, it is not statutorily required to do so and it would not be proper to conclude that the Building Disputes Tribunal erred by not specifying a remedy. The appropriate remedy to fix the problem is within the discretion of Mulvay Pty Ltd since it was the builder. Finally, the Tribunal found that although the Building Disputes Tribunal erred by not giving Mulvay Pty Ltd an opportunity to reply to the application for costs, the granting of leave would not necessarily lead to a different outcome since the Building Disputes Tribunal only awarded a relatively small amount. Mulvay Pty Ltd was aware that a costs order would be sought and, according to the evidence of Mr and Mrs Peters, the invoices were submitted to Mulvay Pty Ltd. The Tribunal therefore found that leave for review should not be granted.
The application for review was dismissed.
Issue
Mulvay Pty Ltd (applicant) is seeking leave to review a decision of the Building Disputes Tribunal (BDT) pursuant to s 41(1) of the Builders' Registration Act 1939 (BR Act) (WA). The applicant was ordered by the BDT to rectify and make good all areas of a timber floor suffering from orange peel and extrusion of glue/sealer, and to pay an amount of $861.66 towards the cost of the expert called by Mr and Mrs Peters (respondents) during the proceedings before the BDT. The complaint of the respondents about floor cupping was dismissed by the BDT.
Background
The application for leave to review was lodged on 27 February 2009 and the first directions hearing took place on 12 March 2009. The proceedings were adjourned to allow time for the BDT to submit its reasons for decision. The next directions hearing was held on 30 April 2009, at which programming orders were made for the submissions to be filed. The hearing was adjourned to enable the parties time to obtain a copy of the transcript of proceedings. On 10 September 2009, a further directions hearing took place, at which time the matter was set down for a hearing on 12 October 2009. The hearing took place on 12 October 2009 and the Tribunal reserved its decision on the same day.
The parties made detailed written submissions and also gave an overview during the hearing of the main elements of their respective contentions. The submissions of the parties were of a very high standard and the Tribunal expressed its appreciation to both parties at conclusion of the hearing for the care they took to prepare clear and concise submissions which were supported by the necessary documents.
The Tribunal explained to the parties that the application for leave to review the decision of the BDT would be progressed in two phases. The first step is aimed solely on the question of whether leave to review should be granted. If leave is granted, the parties would be invited to make further submissions regarding the merit of the matter and the hearing will be de novo. If leave is refused, the matter is concluded. It is only when leave is granted that additional evidence and information that were not before the BDT may be submitted to the Tribunal.
Ground for review
The applicant, in summary, contends as follows in support of its application for leave to review the decision of the BDT:
•The items the subject of the order to remedy, were not part of the preliminary notice or the complaint form.
•The main complaint, which was received and properly considered by the BDT, relates to the cupping of the floorboards. The complaint was dismissed in its entirety. The BDT did not make a sufficient enquiry into the complaints on which it ordered remedial work to be done.
•The order to remedy did not take account of the scope of work that would be required. The extent of the work is completely out of balance with the problem of orange peel and extrusion of glue/sealer since the entire floor would have to be sanded and re-sealed.
•The BDT should have specified the type of remedial action required, especially in light of its finding that the complaint about cupping of the timber floors had been dismissed.
•The order to contribute to the costs of Dr Zurhaar, an expert called by the respondents, was made without the applicant having been made aware of the application for costs; without the applicant having had access to the invoices; without the applicant having been given an opportunity to make submissions; and without the BDT taking into account the offers of settlement that had been made.
The respondents, in summary, contend as follows in support of their opposition to the application for leave to review:
•The applicant had known from the date of practical completion that the orange peel and extrusion of glue/sealer were part of the problem. That is why the certificate of practical completion was not signed. The record of proceedings before the BDT also shows that these issues were raised in the hearing and were also the subject of a site inspection by the BDT.
•It is not the duty of the BDT to specify what remedial work should be done. The fact that the applicant had waited so long to deal with the complaint has necessitated more extensive remedial work. If they had acted immediately, the work required would not have been so wide ranging.
•The orange peel is not limited to a small section of the floor. At least 25% of the floor is affected by it. It is therefore not excessive to require from the applicant that the entire floor be sanded if that is the only remedy available.
•The respondents sent a copy of the invoice of Dr Zurhaar to the applicant, and at the opening of the hearing the respondents made it clear that they would seek a costs order. The applicant therefore knew that a costs order would be sought but did not make any submissions about it.
Principles for successful review
As explained to the parties during the directions hearing and prior to the hearing, the following principles must guide the decision of the Tribunal in regard to an application for leave to review. These principles are set out in Tangent Nominees Pty Ltd and Edwards [2005] WASAT 119 and follow a previous Supreme Court decision in Wilson v Metaxas [1989] WAR 285 at 294.
Those principles are:
a)it must be shown that the decision in respect of which review is sought is wrong, or at least attended with sufficient doubt to justify the grant of leave;
b)substantial injustice would be done if the decision is unreversed. What constitutes substantial injustice depends on the circumstances of each case;
c)if there is a significant question of law to be considered; and
d)the intent and purpose of the legislation may be frustrated if ordinary principles of appeal are applied, and that the Tribunal must therefore be slow to grant leave unless in cases where there is no discernable basis for the decision or where the rules of natural justice have been breached.
Consideration
The Tribunal was provided with a copy of the reasons for decision of the BDT, dated 12 March 2009, as well as a transcript of the proceedings that took place on 16 October 2008 and 2 February 2009. The Tribunal has considered the evidence and submissions of the parties, as well as the reasons for decision of the BDT and the content of the transcript of the proceedings.
The Tribunal concludes, for reasons set out below, that leave for review should not be granted and the decision of the BDT should be affirmed.
a) The Tribunal is not satisfied that the decision of the BDT is wrong or attended with sufficient doubt so as to justify the grant of leave for the decision to be reviewed.
The applicant contends that the decision of the BDT is attended with sufficient doubt on the basis, firstly, that the BDT did not make sufficient enquiries as to what the appropriate remedy would be to fix the orange peel and extrusion of glue/sealer and, secondly, that the BDT failed to prescribe a particular remedy to fix the orange peel.
The Tribunal rejects both of these contentions.
It is clear from the transcript of the proceedings and the reasons for decision that the BDT had ample regard for the merit of the complaint. In fact, the BDT spent substantial time, as reflected on the several pages of transcript, on examining the evidence of Dr Zurhaar and it undertook a site inspection to familiarise itself with the problem, including the orange peel. The parties had the further opportunity after the site inspection to make further submissions to the BDT. The Tribunal is therefore satisfied that the BDT took all of the information before it into account and that the parties had sufficient opportunity to make submissions, give evidence and call experts to give evidence.
There is no legal obligation of the BDT to prescribe what remedial action should be taken by the applicant. In the matter of Brodun Construction and Love [2008] WASAT 174 (Brodun), which was relied on by the applicant, the issue in dispute was whether the BDT had the power at all to prescribe a specific remedy. In that matter, the builder contended that the BDT exceeded its powers by prescribing a remedy. The Tribunal found in the Brodun matter that the BDT indeed, in accordance with s 12A(1) of the BR Act, had the power to prescribe a remedy, although the power was not exercised frequently. The applicant now seeks to construe the decision of the Tribunal in Brodun as if the BDT can be ordered to prescribe a remedy. There is no such legal obligation on the BDT and the reviewing authority cannot order the BDT to prescribe a remedy.
The Tribunal commented at [42] of the Brodun matter as follows:
The Tribunal acknowledges that it may not be common for the BDT to prescribe a specific methodology to a builder to remedy a problem. The usual course of action is for the BDT to order that remedial work must be done, but for the specific method to be at the choosing of the builder. This is, however, a practice of the BDT but should not be interpreted as a legal constraint on its powers. …
The BDT has the discretion whether it orders a builder to rectify in a way the builder sees fit, or whether it prescribes a specific remedy for the builder to follow. In the case of the applicant, the BDT decided to order the builder to remedy without prescribing a specific remedy. The BDT did not err in doing so.
The applicant now seeks, in effect, to introduce new evidence by contending that the remedy of re-sand and seal of a large part of the floor would be excessive. Such new information cannot be used to sustain an application for leave to review. The applicant had an opportunity to present to the BDT all information of relevance to the dispute. If it were of the view that a particular remedy would not be practicable, it should have raised it in the BDT proceedings. Refer in this regard to DevereauxWarnes v Hall [2006] WASCA 268, in which the Court concluded, at [26(e)] that:
Finality in litigation is a powerful policy consideration. Except in the most exceptional circumstances, a party is bound by the conduct of his or her case at trial. …
The Tribunal further rejects the contention of the applicant that the BDT should have made an enquiry into what remedies were available to the builder. The obligation of the BDT is to consider the merit of a dispute and, if necessary, to order a builder to rectify it. The contention of the applicant that the remedial work would be disproportionate to the problem is rejected. The evidence before the Tribunal is that a substantial area of flooring is affected and it is the duty of the builder to fix it. The fact that part of the floor that bears no deficiency may have to be sanded and re-sealed in order to address the complaint, is not relevant.
In conclusion, the applicant has failed to convince the Tribunal that the decision of the BDT is wrong or attended with sufficient doubt on the basis that the BDT did not prescribe a particular remedy, or that the only remedy available would be disproportionate to the scope of the problem.
b) The Tribunal is not satisfied that a substantial injustice would occur if the decision is left unreversed.
The Tribunal does not accept the contentions of the applicant that it was not aware of the complaint of orange peel, and that the complaint could not be dealt with by the BDT because it had not been referred to in the preliminary notice or in the complaint form.
It is apparent, from the evidence before the BDT, that the concern of orange peel and extrusion of glue/sealer was part of the general complaint from the moment the work on the floor had been completed. In the report dated 21 February 2008, Mr Gary Green, who did a report at practical completion, noted that 'the sealer had "orange peel" and "crater" distortions in numerous locations'. For the applicant to contend they were not aware of the dispute is clearly erroneous.
Although the respondents may not have listed the orange peel as a specific item, the documents before the BDT clearly showed that it was an issue. The transcript of the proceedings also refers with regularity to the orange peel. Refer, for example, to T:22, 16.10.08 where the expert witness, Dr Zurhaar, comments as follows:
So the polyurethane finish, there shouldn't be entrapped grit in it, there shouldn't be orange peel in it, there shouldn't be what we call quilting …
The orange peel and related issues were also considered during the site inspection by the BDT.
The contention of the applicant that it had not been aware that the orange peel and extrusion of glue/sealer were issues in dispute before the BDT is therefore rejected.
In regard to the contention that the orange peel had to be explicitly referred to in the preliminary notice and complaint form before the BDT could deal with it, the Tribunal finds that it also lacks merit. The Tribunal is satisfied that due to the nature of processes before the BDT, a dispute that is linked to the works may be identified in the course of proceedings. Although s 12A(2) of the BR Act requires that a dispute must be the subject of a preliminary notice prior to a complaint being lodged, it would be too restrictive to require from parties to lodge a new notification each time a new dispute arises in the proceeding that is already on foot in the BDT. The most appropriate way would be for the BDT to deal with the issue as part of the matter before it. Preference for such an approach was clearly expressed by the Tribunal in the matter of Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294 when it concluded at [53] as follows:
… There is no benefit in requiring one or more subsequent preliminary notices to be given, as further problems with a building work become known. Whenever a new issue is raised, and a party seeks to have it introduced into the dispute, the builder will still have an opportunity to indicate that there is no issue with it and that he will remedy the matter. …
The Tribunal is therefore satisfied that no substantial injustice occurred when the BDT dealt with the complaint of orange peel and extrusion of glue/sealer as part of the general complaint in regard to cupping. The applicant was clearly aware of the issue; it had ample opportunity to reply to it; it participated in the site inspection and it could make submissions and give evidence about it.
c) There is not a significant question of law to be considered and the rules of natural justice have been adhered to.
The Tribunal has already rejected the applicant's contention that the BDT had erred by not prescribing a remedy and by not conducting an enquiry into the remedies that were available. The parties had ample opportunity to make submissions to the BDT, to give evidence and to call experts to give evidence. The BDT further undertook a site inspection and gave the parties a further opportunity to make additional submissions. There is nothing in the transcript of the proceedings, or in the BDT's reasons for decision, that suggests a failure to adhere to the rules of natural justice as far as the complaints were concerned. The procedures followed by the BDT may not be as formal and detailed as what is usually experienced in a court of law, but the BDT dealt with all the issues before it in a fair and equitable manner according to procedures that are consistent with a specialist tribunal.
d) In regard to the order for the applicant to contribute costs to an amount of $861.66 towards the expert Dr Zurhaar, the Tribunal finds that although the BDT had erred by not affording the applicant an opportunity to make a submission in reply to the application for costs, the injustice is not so substantial that leave to review the order to pay should be given.
The Tribunal's reasoning for this finding is as follows:
•The BDT did not fail, as is contended by the applicant, to identify under which section of the BR Act it can make a costs order. As recognised by the applicant during the hearing before the Tribunal, the BDT can, under s 38(3) of the BR Act, make a costs order. There is no need for the BDT to explicitly refer in its reasons for decision to the section of the Act when it makes such an order.
•The Tribunal rejects the contention of the applicant that it was not aware that a costs order had been sought. The transcript of proceedings before the BDT shows that on the first day of the hearing on 16 October 2008 when the proceedings commenced, Mr Peters indicated that they would seek an 'order for us to be reimbursed for the costs we've incurred in providing an expert witness …' (T:2, 16.10.08). The applicant was therefore fully aware that a costs order would be sought.
•The evidence of Mrs Peters is that prior to the commencement of the proceedings, she mailed to the applicant a copy of the invoice of Dr Zurhaar. The applicant says it did not receive the invoice. The Tribunal is satisfied that the applicant could have raised the issue during the hearing when the presiding offer said, 'All right. Are there any further claims … you said something about costs' (T:8, 2.02.09). Ideally, the BDT should have given the applicant an opportunity to speak, but at the same time the applicant could have indicated to the BDT that it sought an opportunity to make a submission.
•The Tribunal rejects the contention that the BDT did not utilise the expertise of Dr Zurhaar. It is clear from the transcript of proceedings that a substantial part of the hearing was spent on Dr Zurhaar giving expert evidence. The applicant had ample opportunity to crossexamine him or to call its own expert evidence.
•The Tribunal agrees with the applicant that the BDT should have given it a formal opportunity to reply to the application for costs at the conclusion of the proceedings. The way in which the presiding officer dealt with the costs application was not in accordance with the rules of natural justice. The Tribunal does, however, not agree that the failure by the BDT justifies an order for leave to review the costs order. The courts have accepted that the award of costs is discretionary. The amount of $861.11 awarded by the BDT is substantially less than claimed by the respondents and it is most unlikely that, on review, the decision of the BDT would be substituted with a lower amount. The evidence shows that Dr Zurhaar filed an expert report, he gave evidence and he was available for cross‑examination. The BDT relied on his evidence and the respondents were in part successful due to his evidence. The Tribunal concurs that the BDT could have been clearer as to how it calculated the amount. It is, however, not extraordinary for an amount of $860 to be awarded for such a contribution.
The Tribunal therefore does not believe there is justification for the costs order to be re-opened.
Conclusion
In conclusion, the Tribunal finds that there are no grounds upon which leave to review the decisions of the BDT regarding the order to remedy and the order to pay should be given. The application for leave to review the decisions of the BDT should therefore be dismissed and the decisions should be affirmed.
Orders
1.The application for leave to review the decisions of the Building Disputes Tribunal is dismissed.
2.Order to Remedy 223/2008-09 and Order to Pay 132/2008-09 of the Building Disputes Tribunal are affirmed.
I certify that this and the preceding [35] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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DR B DE VILLIERS, MEMBER
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