Pastrovic & Co Pty Ltd v Farrington - [2011] NSWDC 94

District Court

New South Wales

Medium Neutral Citation: Pastrovic & Co Pty Ltd v Farrington [2011] NSWDC 94
Hearing dates: 7 July 2011
Decision date: 11 August 2011
Jurisdiction: Civil
Before: Judge Peter Johnstone
Decision:
Appeal partly allowed

Catchwords: CTTT - appeal from a decision of the CTTT in relation to a building dispute - whether there was any error on a question with respect to a matter of law - adequacy of reasons - failure by Tribunal to consider and if appropriate apply the proportionate liability provisions in the Civil Liability Act 2002
Legislation Cited: Civil Liability Act 2002
Consumer, Trader & Tenancy Tribunal Act 2001
Home Building Act 1989
Cases Cited: Beale v Government Insurance Office of New South Wales [1977] 48NSWLR 430
Eastside Scaffolding v Kazic [2008] NSWCA 148
Levy v Bergseng [2008] NSWSC 294
Permanent Custodians Limited v King [2010] NSWSC 509
VCT v JM [2011] NSWCA 89
Category: Principal judgment
Parties: Pastrovic & Co Pty Limited (Plaintiff)
Bernard Joseph Farrington (Defendant)
Representation: Ms M Fraser of counsel (Plaintiff)
Mr M F Galvin of counsel (Defendant)
MBA Lawyers (Mr Collins)
RMB Lawyers (Ms J Bennett)

File Number(s): 2010/00126416
Publication restriction: None

Judgment

The defendant was the owner of a house constructed by the plaintiff, a builder. On 16 June 2007, following heavy rain, the retaining walls constructed by the builder at the rear of the premises failed to contain the slope behind, with the result that there was significant slumping of soil into the rear of the premises.

This appeal concerns the decision of a member of the Consumer Trader and Tenancy Tribunal (the Tribunal) on 29 April 2010 in relation to the construction of the retaining walls in which he decided that the builder was liable to the owner for the damage caused.

The Tribunal held that the builder had failed to comply with statutory warranties under the Home Building Act 1989 , and that the builder was negligent in its construction of the retaining walls.

The house had been constructed pursuant to a contract between the builder and the owner's predecessor in title, Berkeley Road Developments Pty Limited, which company sold the house to the owner prior to the land slump episode on 16 June 2007.

The owner alleged that the retaining walls did not comply with the specifications in the contract and that they were not suitable for the purpose of retaining the material behind them, especially after the builder had carried out excavation work into a highly reactive site.

The builder complains that the Tribunal member wrongly decided various questions with respect to matters of law.

The grounds of appeal are set out in the Summons Commencing an Appeal. They will be addressed in turn.

The Reasons for Decision of the Tribunal Member

The relevant passages of the Reasons for Decision of the Member of the Tribunal read as follows:

"The applicant (owner) is a subsequent purchaser from a developer who, in turn, contracted with the respondent (builder) to build the house…

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: [2011] NSWDC 94
Decision Date: 11 August 2011

CaseChat Overview and Summary

This appeal involves a dispute between Pastrovic & Co Pty Ltd and Farrington, originating from a decision by the Civil and Administrative Tribunal of New South Wales (CATT). The primary issue at hand was whether the Tribunal had made any errors concerning legal matters, specifically regarding the apportionment of liability under the Civil Liability Act 2002. The builder, Pastrovic & Co, raised the defence of proportionate liability, arguing that its liability should be limited according to its responsibility for the damage caused. The Tribunal, however, rejected this defence outright, primarily due to the builder's failure to provide notice as required by section 35A of the Civil Liability Act 2002. The appeal questioned whether the Tribunal's decision to dismiss the defence without consideration of the proportionate liability provisions constituted an error of law.

The legal issues that the court needed to decide included whether the Tribunal erred in law by failing to consider the proportionate liability provisions and whether the rejection of the defence was appropriate given the circumstances. The court needed to determine if the builder's failure to give the requisite notice was fatal to its defence and whether the Tribunal had the discretion to grant an adjournment if the owner was prejudiced. The court also needed to examine whether the owner's lack of representation affected the fairness of the Tribunal's decision. The central question was whether the Tribunal's decision to dismiss the defence without proper consideration of the relevant statutory provisions was legally sound.

The court found that the Tribunal's dismissal of the builder's defence was indeed an error of law. The court reasoned that the Tribunal should have considered the proportionate liability provisions, as the issue was clearly litigated during the hearing, and the owner did not seek an adjournment. The court emphasized that the failure to provide notice under section 35A was not necessarily fatal to the defence, especially in a tribunal setting where formal pleadings are not required. The court held that the Tribunal was obligated to consider whether the builder's liability should be limited according to its responsibility for the damage, and an adjournment could have been granted if necessary. The court concluded that the Tribunal's peremptory rejection of the defence without considering these factors constituted a wrong decision on a question of law. Consequently, the appeal was partly allowed, and the decision on the builder's defence was remitted to the Tribunal for a rehearing. The plaintiff was awarded the costs of the appeal, subject to any application by the parties within 14 days.

Orders

Orders of the court

Appeal partly allowed

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In my view, the decision of the Supreme Court in Permanent Custodians Limited v King was quite different from the present case. In that case the defendant sought to amend the defence to rely upon the apportionment provisions after judgment had been given. In the present case the issue was clearly litigated during the hearing, and the owner did not seek an adjournment. It was not irretrievably late for the defence to be raised. I agree with the builder's submission that the failure to give notice in accordance with s 35A in respect of other potential concurrent wrongdoers is not, of itself, fatal to the defence, particularly in a jurisdiction such as the Tribunal, in which formal pleadings are not required. The import of s 35A is to make provision for costs in the event that the requisite notice is not given and the other party unnecessarily incurs costs. The effect of the Member's decision was to reject the defence altogether, without considering it, solely because the builder failed to give the requisite notice in advance of the hearing. In those circumstances, given the mandatory nature of s 35, it seems to me that the Member was bound to consider whether the builder's liability should be limited having regard to his responsibility for the damage or loss. If necessary, if the owner was prejudiced, an adjournment could have been granted. In my view, it is immaterial that the owner was unrepresented at the Tribunal hearing. None of these matters was addressed by the Member. The Member's decision was a decision with respect to a matter of law. For these reasons, I am satisfied that the Member's peremptory rejection of the builder's defence under the apportionment provisions of the Civil Liability Act 2002 involved a wrong decision on a question with respect to matters of law. Grounds 13 and 14 of the appeal therefore succeed. For these reasons, the appeal is partly allowed. The decision of the Tribunal on the question of the defence raised by the builder under the apportionment provisions of the Civil Liability Act 2002 is not affirmed. This is not an outcome that should be addressed by this court on appeal. The decision of the District Court on the question should be remitted to the Tribunal, and an order is made for a rehearing of the proceedings by the Tribunal consistent with the decision of the District Court. The plaintiff has succeeded. The usual rule is that costs follow the event. I therefore order the defendant to pay the plaintiff's costs of the appeal. I give the parties leave to apply in regard to the costs order, provided such application is made within 14 days.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Pastrovic & Co Pty Ltd v Farrington [2011] NSWDC 94
Hearing dates:	7 July 2011
Decision date:	11 August 2011
Jurisdiction:	Civil
Before:	Judge Peter Johnstone
Decision:	Appeal partly allowed
Catchwords:	CTTT - appeal from a decision of the CTTT in relation to a building dispute - whether there was any error on a question with respect to a matter of law - adequacy of reasons - failure by Tribunal to consider and if appropriate apply the proportionate liability provisions in the Civil Liability Act 2002
Legislation Cited:	Civil Liability Act 2002 Consumer, Trader & Tenancy Tribunal Act 2001 Home Building Act 1989
Cases Cited:	Beale v Government Insurance Office of New South Wales [1977] 48NSWLR 430 Eastside Scaffolding v Kazic [2008] NSWCA 148 Levy v Bergseng [2008] NSWSC 294 Permanent Custodians Limited v King [2010] NSWSC 509 VCT v JM [2011] NSWCA 89
Category:	Principal judgment
Parties:	Pastrovic & Co Pty Limited (Plaintiff) Bernard Joseph Farrington (Defendant)
Representation:	Ms M Fraser of counsel (Plaintiff) Mr M F Galvin of counsel (Defendant) MBA Lawyers (Mr Collins) RMB Lawyers (Ms J Bennett)
File Number(s):	2010/00126416
Publication restriction:	None