Pinnacle Homes (NSW) P/L v Zekusic

[2001] NSWSC 515

CITATION:

Pinnacle Homes (NSW) P/L v Zekusic & Anor [2001] NSWSC 515

CURRENT JURISDICTION:

Administration Law

FILE NUMBER(S):

SC 30079/2000

HEARING DATE(S):

15 June 2001

JUDGMENT DATE:

22 June 2001

PARTIES :

Pinnacle Homes (NSW) Pty Limited
(Plaintiff)

Mark Zekusic and
Vanessa Zekusic
(First Defendants)

Fair Trading Tribunal
(Second Defendant)

JUDGMENT OF:

Master Harrison

LOWER COURT JURISDICTION :	Fair Trading Tribunal
LOWER COURT FILE NUMBER(S) :	BU 1999/92
LOWER COURT JUDICIAL OFFICER :	Tribunal Member Christine Paull

COUNSEL :

Mr P A Fury
(Paintiff)

Mr R W Seton
(First Defendants)

Submitting Appearance
(Second Defendant)

SOLICITORS:

Coudert Brothers
(Plaintiff)

Colin Daley Quinn
(First Defendants)

Crown Solicitor
(Second Defendant)

CATCHWORDS:

Appeal decision of Fair Trading Tribunal

LEGISLATION CITED:

Fair Trading Act 1998
Fair Trading Tribunal Act

CASES CITED:

Devries v Australian National Railways Commission (1993) 177 CLR 472
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588

DECISION:

(1) The plaintiff's time to appeal is extended up to and including 26 October 2000; (2) The decision of the Tribunal members dated 13 April 2001 and 28 September 2000 are affirmed; (3) The appeals are dismissed; (4) The further amended summons filed 18 January 2001 is dismissed; (5) The plaintiff is to pay the defendants' costs.

16

THE SUPREME COURT
OF NEW SOUTH WALES
ADMINISTRATIVE LAW DIVISION

MASTER HARRISON

FRIDAY, 22 JUNE 2001

30079/2000 - PINNACLE HOMES (NSW) PTY LIMITED
v MARK ZEKUSIC and VANESSA ZEKUSIC & ANOR

JUDGMENT (Appeal decision of Fair Trading Tribunal)

1   MASTER: By notice of motion filed 12 February 2001 the plaintiff seeks that time be extended until 26 October 2000 to appeal a decision made on 13 April 2000 by the Fair Trading Tribunal in matter BU 1999/92. On 3 May 2000 the application for rehearing was filed. On 28 September 2000 the Tribunal declined to grant a rehearing. Hence the reason that the extension is sought is because in the intervening period the plaintiff unsuccessfully sought a rehearing at the Tribunal. The first defendants accepted this explanation. The court also regards this explanation as satisfactory. The plaintiffs time to appeal is extended up to and including 26 October 2000.

2 By further amended summons filed 18 January 2001 the plaintiff seeks firstly an order that the appeal be allowed; secondly, that the decision of the Fair Trading Tribunal (the Tribunal) be set aside; thirdly, that the decision made on 28 September 2000 by the Tribunal be set aside; fourthly, an order that the proceedings be remitted to the Tribunal for the rehearing de novo of the matter, or alternatively that the proceedings be remitted to the Tribunal for the determination in accordance with law of the plaintiff’s application for an order directing that the matter be reheard by the Tribunal; and fifthly, an order that, for a rehearing pursuant to either order 4 or 5, the constitution of the Tribunal be determined by the Chairperson in accordance with s 63(3) of the Fair Trading Tribunal Act. The plaintiff relied on the affidavit Marion Moe Bailey sworn 22 January 2001. The Fair Trading Tribunal, the second defendant, filed a submitting appearance.

3   The plaintiff is Pinnacle Homes (NSW) Pty Limited. The first defendants are Mark Zekusic and Vanessa Zekusic. The second defendant is the Fair Trading Tribunal. The second defendant has filed a submitting appearance. The plaintiffs built a house for the first defendants. The plaintiff and first defendant entered into an agreement in July 1999 for the sum of $140,000. At the hearing before this court the plaintiffs conceded that there was some water damage caused to the carpet and some damage was incurred during the process of cleaning the bricks. The plaintiffs also conceded that the cleaning process has not yet been completed.

4   At the outset it is helpful if some general observations of the function of the Tribunal are made. The Fair Trading Act 1998 established a Tribunal to adjudicate consumer and commercial disputes. The objects of the Act are set out in s 3. They are to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair, and to enable proceedings before the Tribunal to be determined in an informal, expeditious and inexpensive manner.

5   According to s 27 of that Act the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. The Tribunal may dismiss at any stage any proceedings before it for want of prosecution by the applicant or at the request of the applicant.

6   An appeal to this court from the Referee’s decision is only in relation to a question of law, (s 61 Fair Trading Act 1998). A party to proceedings before the Tribunal may appeal to this court on a question of law which includes (but is not limited to) an order affirming or setting aside the decision of the Tribunal, and an order remitting the case to be heard and decided again by the Tribunal (either with or without the hearing of further evidence) in accordance with the directions of this court.

7 On 13 April 2000 the Tribunal ordered the plaintiff to pay to the first defendants the sum of $87,747 on or before 12 May 2000. On 28 September 2000 Tribunal Member Christine Paull, pursuant to s 63 of the Fair Trading Tribunal Act, refused an application by the plaintiff for an order directing a rehearing of the matter by the Tribunal. The plaintiff seeks to appeal both of these decisions. Firstly, I shall deal with the Tribunal member’s decision and then the decision not to grant a rehearing.

Grounds of appeal in relation to decision of 13 April 2000

8   The plaintiff submitted that the Tribunal erred in making findings with regard to the following issues:

(1) In assessing damages in respect of the damaged carpet at the first defendants’ home on the basis that the carpet be replaced by an entirely different carpet to the damaged carpet.

(2) In finding that many of the bricks in the brickwork at the first defendants’ home were damaged.

(3) In assessing damages in respect of the damaged brickwork at the first defendants’ home on the basis that all of the brickwork be replaced after finding that only the damaged brickwork should be replaced.

(4) In assessing damages in respect of the brickwork at the first defendants’ home in that it failed to pay any or any proper regard to the fact that some of the brickwork was damaged and some of it only required cleaning.

(5) In ordering that the plaintiff should pay damages to the first defendants for the damaged brickwork at the first defendants’ home rather than ordering that the plaintiff should repair this brickwork.

9   Firstly, the plaintiff submitted that there was an agreement between the parties in relation to the rectification work and that the Tribunal member did not consider this in his judgment. There is no evidence to suggest this was raised before the Tribunal member. Even if it was the correspondence shows that an offer was made to carry out rectification work but this was never completed (see Ex 2). This submission fails.

10   The defendants sought the costs of recarpeting and the cost of replacing the brickwork. The cost of fixing the brickwork formed the major part of the award. If the brickwork was to be replaced, the defendants would have to move out of their house for a month and remove and store their furniture and this was quoted as costing $9,200 (Ex E). These removal costs follow the outcome of the ground of appeal relating to the brickwork.

11   In relation to the brickwork, the Tribunal member in his reasons stated:

“Finally, there is the oral evidence as to the manner of cleaning, and in particular the cleaning carried out after some 42 bricks were removed in June/July 1999. The bricks were then to be hand washed - see the letter of 3 July 1999 - but the evidence from each Applicant was that pressure cleaning had been adopted. Mr Pierce did not really deny this. His evidence was that the cleaner had started to use a high pressure hose, and then noticed pitting and stopped. He had an invoice from the cleaner, but no direct evidence. The indirect evidence of the method used by the cleaner tends to support the Applicants’ case. The conclusion I have reached overall is that many of the bricks were damaged by incorrect cleaning and that again constitutes a breach of contract. These bricks should be replaced. The cleaning was carried out by sub-contractors of the Respondent and the Respondent should be held liable for the faulty work.
The quotation relied upon by the Applicants is that from Fugen Holdings Pty Limited dated 27 September 1999, this is for substantially more than the amount originally claimed, but the Applicants gave notice of the increased amount being sought and with no objection from the Respondent (who was not otherwise prejudiced) I gave leave to amend to the higher figure. There was no quotation from the Respondent.
…
It is fair and equitable that the Respondent should pay these damages? The obligation upon the Tribunal is to make such order as is fair and equitable between the parties. In my opinion, the relevant issue to consider here is whether or not I should simply order damages, or else require the Respondent to perform the work.
During the course of the hearing of this matter, it became clear that there was little confidence between the Owners and the Builder. On the first occasion the matter was before me I made an order that the Builder carry out some remedial work. That work was done, but at the resumed hearing the Owners said that it was not done in a manner which was totally satisfactory to them. On that basis, I consider that the better solution is to order payment of damages.”

12   The plaintiff submitted that the Tribunal member made a quantum leap from recommending by Mr Westwood (Ex A) to award the costs of replacing the bricks as outlined in the Fugen Holdings report. The Tribunal member had two expert reports on the brickwork, namely those of Westwood Group Pty Limited tendered by the owners and Mr John Eccles’ report tendered by the defendant.

13   The Tribunal member commented that Mr Eccles was reporting on a different issue namely the quality of the workmanship of the laying of the bricks. The issue in dispute was the quality of the bricks used and the effect of cleaning. Mr Westwood’s report (Ex A) reported on each section of the house namely, the left hand side facing; the rear of house; right hand side facing; the front of house and garage; the window sills and surrounds; and the down pipes. In some areas, such as the right hand side facing, 75-80% of this side was damaged or had dirty brickwork. There was some damaged brickwork at the rear of the house. The amount of damaged and unclean brickwork varied from area to area. The Tribunal member referred to Mr Westwood’s opinion that the brickwork had not been cleaned in a satisfactory manner and that there were various areas of damaged brickwork and that he recommended that all damaged brickwork be replaced after which the house was to be recleaned.

14   The Tribunal member, having noted the divergence of opinion between these two experts looked at the photographs (both close up and distant views). He stated the close up photographs show rough brickwork, but against that must be set the fact that they are rustic bricks and as such, one would expect some rough surfaces. The Tribunal member was entitled to look at the photographs. It was open to him to prefer Mr Westwood’s evidence and/or come to his own view on the amount of brickwork to be replaced and the cleaning of it.

15   It cannot be said that the Tribunal member acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of Wales South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. There is no error of law that arises when the Tribunal member examined a number of the photographs, preferred one expert’s view over another and essentially arrived at his own conclusion.

16   As previously stated, Fugen Holdings Pty Limited (Ex D) was the only quote before the Tribunal member in relation to quantum. Item 11 of that quote refers to demolishing existing brickwork of 230m² but item 19 refers to a larger area to “brick clean” namely 272m². Thus, it appears that Fugen did not intend to have all the brickwork replaced as the area to be cleaned was larger than the area of brickwork that has to be demolished. In any event the Tribunal member referred to Mrs Zekusic’s evidence that the bricks were no longer available. On that basis the Tribunal member could have decided that all the bricks needed to be replaced. It is my view that it was open to the Tribunal member to accept the opinion of Fugen. There is no error of law.

The carpeting

17   The Tribunal member accepted the evidence of Mr Attard and the plaintiffs to the effect that rainwater came under a balcony door and damaged the new carpet. The Tribunal member then referred to the quotation from Lockwood Carpets, together with the report from Clive Disberry tendered by the owners and the quotation from Accent which was tendered by the builders. The Tribunal member considered that the quote from Lockwood was to replace the carpet which the plaintiff originally laid and the Tribunal member considered that they (the owners) were entitled.

18   The Accept Carpet report (Ex 1) is a quote for the sum of $2,770 plus $112. The quote appears to cover to be for all the bedrooms on the upper floor. Mr Disberry (Ex G) stated that the water intrusion damaged the carpet. The carpet had a jute backing which when wet would lead to mildew and bacterial effects not to mention the odour and shrinkage. Mr Disberry recommended that the underlay should have been replaced immediately. He also identified an area of the carpet on the stairs that had been flattened due to people attempting to fix the problems. Lockwood quoted two figures, the sum of $1,150 to lay new carpet in bedroom one or the sum $3,963 which covered four bedrooms, robe, hall and stairs. However the quoted figure Lockwood does not include the cost of underlay. There was little difference between the builder’s quote of $3,963 and the owners’ quote of $2,770 plus a sum to be allowed for replacement underlay. It was open to the Tribunal member to accept the larger quoted price by Lockwood. There was no error of law.

19   I turn now to the final appeal point, the rehearing.

Decision of 28 September 2000 - “the rehearing ”

20   The plaintiff submitted that the Tribunal erred in making findings with regard to the following issues:

(6) In having regard to matters other than those which appeared on the face of the plaintiff’s application when determining whether the plaintiff may have suffered a substantial injustice.

(7) In holding that s 63 of the Fair Trading Tribunal Act imposes a “stringent test” upon an applicant in order for the applicant to succeed on an application for a rehearing of a matter.

(8) In holding that s 63 of the Fair Trading Tribunal Act imposes a “heavy” test upon an applicant if the applicant is to establish a likelihood of having suffered substantial injustice.

(9) In failing to ensure, as far as practicable, that all relevant material was disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in relation to:

(a) the plaintiff’s contention that the original decision of the Tribunal was not fair and equitable because the plaintiff’s representative did not have the opportunity to be heard in the original hearing of the matter;
(b) the plaintiff’s contention that the original decision of the Tribunal was not fair and equitable because the plaintiff’s representative was not given the opportunity to cross examine a Mr Westwood, the first defendants’ expert witness at the original hearing of the matter.
(c) the plaintiff’s contention that the original decision of the Tribunal was not fair and equitable because the plaintiff’s representative did not have the opportunity to lead evidence that there are similar bricks available to replace the defective bricks;
(d) the plaintiff’s contention that the original decision of the Tribunal was not fair and equitable because at the original hearing there was a witness for the plaintiff who was only available to give evidence on that day and was prevented from giving evidence;
(e) the plaintiff’s contention that the original decision of the Tribunal was not fair and equitable because the plaintiff was not aware that the plaintiff was entitled to legal representation at the hearing;
(f) the plaintiff’s contention that the original decision of the Tribunal was against the weight of evidence because the Tribunal failed to take into account the “wear and tear” component on the brickwork between the time of completion of the work and the time of the hearing when considering whether the brickwork ought to be replaced;
(g) the plaintiff’s contention that the original decision of the Tribunal was against the weight of evidence insofar as it awarded to the first defendants an amount of money for carpet to be replaced in accordance with a quote from Lockwood Carpets, being a completely different carpet from that originally laid in the premises by Accent Carpets; and
(h) the plaintiff’s contention that there is now evidence available that was not reasonably available at the time of the hearing, namely evidence from Austral, the brick supplier, and an alternative quote to that supplied by Fugen Holding Pty Limited.


(10) The Tribunal erred in failing to act according to equity, good conscience and the substantial merits of the case and without regard to technicalities or legal forms in relation to each of the matters set out in paragraphs 9(a) to 9(h) above.

(11) The Tribunal erred in failing to consider properly any of the matters set out in paragraphs 9(a) to 9(h) above when determining whether the plaintiff may have suffered a substantial injustice.

(12) The Tribunal erred in holding that at the original hearing the Tribunal awarded to the first defendants the costs of rectification of the brickwork.

(13) The Tribunal erred in holding that it was reasonable and open to the Tribunal on the evidence at the original hearing to award to the first defendants the costs of rectification of the brickwork.

(14) The Tribunal erred in holding that the sum awarded to the first defendants by the Tribunal at the original hearing for the costs of rectification of the brickwork was not out of all proportion.

(15) The Tribunal erred in holding that it was open to the Tribunal on the evidence at the original hearing to find that the damage to the brickwork was caused solely by incorrect cleaning at the time when the cleaning was done.

21 The Tribunal member commenced her written reasons by referring to s 63. It states:

“63 Rehearings
(1) Except where the regulations preclude the making of an application under this section, a party to proceedings before the Tribunal may, in the manner and within a time prescribed by the regulations, apply to the Chairperson for an order directing that the matter be reheard by the Tribunal, on the ground that the applicant may have suffered a substantial injustice because:

(a) the decision of the Tribunal was not fair and equitable, or
(b) the decision of the Tribunal was against the weight of evidence, or
(c) evidence that is now available was not reasonably available at the time of the hearing.
(2) The Chairperson is not to grant the application unless, on the face of the application, it appears to the Chairperson that the applicant may have suffered a substantial injustice.
(3) …
(4) The matter is to be dealt with as a hearing de novo by the Tribunal as constituted under subsection (3).
(5) …”

22 The Tribunal member carefully considered that the builders had not established any of the grounds set out in s 63(a) to (c). It is not necessary for them to be reproduced here. The plaintiff submitted that the Tribunal member should have advised them on how to present their case and sought additional information in relation to the deficiencies in the rehearing application. The plaintiff appeared at the Tribunal hearing and tendered reports. Section 27(5)(b) requires the Tribunal to ensure, as far as practicable, that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings. It does not however cast an obligation upon the Tribunal member to advise the parties on how to present at its highest their case at either the hearing or upon rehearing. The Tribunal member concluded by stating:

“Section 63 imposes a stringent test through which an Applicant must pass, in order to succeed in being granted a rehearing. The test of establishing a likelihood of substantial injustice is a heavy one which has to be discharged by showing that the substantial injustice arises from one of the three grounds specified under that Section.
For the reasons given above, I am not satisfied that Pinnacle Homes has satisfied this stringent test. I therefore dismiss the Application for Rehearing.

23 Even though the Tribunal member may have misstated the test, it is clear that she had the test firmly fixed in her mind when she commenced writing the judgment. As the Tribunal member held none of the grounds in s 63(a) to (c) had been established, there could not be any grounds to form the basis for the Tribunal member to decide the applicant may have suffered substantial injustice. Hence even if the test was not correctly stated, it was correctly applied because there were no grounds upon which the applicants may have suffered a substantial injustice. There is no error of law.

24   The decision of the Tribunal members dated 13 April 2000 and 28 September 2000 are affirmed. The appeals are dismissed. The further amended summons filed 18 January 2001 is dismissed.

25   Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the first defendants’ costs.

26   The court orders:

(1) The plaintiff’s time to appeal is extended up to and including 26 October 2000.

(2) The decisions of the Tribunal members dated 13 April 2000 and 28 September 2000 are affirmed.

(3) The appeals are dismissed.

(4) The further amended summons filed 18 January 2001 is dismissed.

(5) The plaintiff is to pay the first defendants’ costs.
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Last Modified: 06/26/2001