| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDERS' REGISTRATION ACT 1939 (WA) CITATION : RODRIGUES and GOLDWEST DEVELOPMENTS PTY LTD [2011] WASAT 123 MEMBER : MR S ELLIS (SENIOR SESSIONAL MEMBER) HEARD : 23 MAY 2011 DELIVERED : 11 AUGUST 2011 FILE NO/S : CC 1366 of 2010 BETWEEN : STEPHEN RODRIGUES RITA MALIK
Applicants
AND
GOLDWEST DEVELOPMENTS PTY LTD
Respondent
Catchwords: Leave to review decision of Building Disputes Tribunal - Rule in Browne v Dunn - Limiting grounds of leave Legislation: Builders Registration Act 1939 (WA), s 12A, s 12A(1), s 41, s 41(1), s 41(2)
State Administrative Tribunal Act 2004 (W), s 12A, s 12A(1), s 27
(Page 2)
Result: Leave granted Category: B
Representation: Counsel:
Applicants : Mr P Monaco and Ms K Whitehead
Respondent : Ms K Roach
Solicitors:
Applicants : GV Lawyers
Respondent : Roach Legal Consulting Services
Case(s) referred to in decision(s):
Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1
Bulstrode v Trimble [1970] VR 840
Cardinal Constructions Pty Ltd v Argo (1996) 16 SR (WA) 344; BC9640109
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47
Gaunt v Hooft [2009] WASC 36; BC 200900955
Jack Brabham Engines Ltd v Beare [2010] FCA 872; BC 201005917
Roberts v Roberts (1992) 8 WAR 170
Tangent Nominees Pty Ltd and Edwards and Anor [2005] WASAT 119
Tangent Nominees Pty Ltd v Edwards [2006] WASC 45
Well Holdings Pty Ltd v Agostino [2001] WADC 174
(Page 3)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision 1 This matter was primarily an application for leave to review a decision of the Building Disputes Tribunal issued on 14 September 2010. In that decision, the Disputes Tribunal held that the respondent was 'the person who carried out the building work' on a house at No 4A Menora Road, Dalkeith up to and including June 2005, but was not the person who carried out the building work on the property on and after June 2005. 2 The applicants, who are now the owners of No 4A Menora Road, Dalkeith, contended that the decision was wrong. They argued that the Disputes Tribunal should have held that the respondent was the person who carried out building work until the house was practically complete or, alternatively, up to the lock-up stage. The respondent admitted it carried out some building work for the former owner of the property, Mr James Zhang. However, Mr Thomas Cheng Kee Tan, a director of the respondent, gave evidence that the respondent had not had anything to do with the project after June 2005. Mr Tan was not crossexamined on his evidence. 3 The Disputes Tribunal did not evaluate the evidence of Mr Tan in light of all the circumstances of the case. It proceeded on the basis that it was obliged to accept the evidence of Mr Tan because he was not crossexamined, and found that the respondent ceased to be the person who carried out building work in June 2005. 4 The Tribunal considered that the Disputes Tribunal did not approach Mr Tan's evidence correctly and that this, combined with other evidence before the Disputes Tribunal, gave rise to sufficient doubt about the correctness of the decision to warrant the grant of leave to review under s 41 of the Builders Registration Act 1939 (WA). Substantial injustice would result if the decision was not reviewed because the decision of the Disputes Tribunal was final and a substantial sum was affected by the decision. 5 The Tribunal granted leave to review the decision.
Introduction 6 This matter is primarily an application for leave to review a decision of the Building Disputes Tribunal (Disputes Tribunal) issued on 14 September 2010 (Decision). The application was made under s 41(2) (Page 4)
of the Builders' Registration Act 1939 (WA) (BR Act) on 28 September 2010. The application also sought orders that the Decision be set aside, but the applicants' written submissions dated 10 May 2011focused on the application for leave. 7 The Disputes Tribunal found that the respondent was 'the person who carried out the building work' within s 12A(1) of the BR Act at No 4A Menora Road, Dalkeith (Property),but onlyuntil June 2005. The Disputes Tribunal found that the respondent ceased to carry out building work in June 2005, after which the building work was carried out by Mr James Zhang, who was then, together with his wife, the owner of the Property. The applicants contend that the respondent was the person who carried out the building work right up until practical completion, or, alternatively, up until the works reached the lock-up stage. They contend that the works reached the lock-up stage in about August 2008. 8 Whether the respondent was the person who 'carried out the building work' is important to the applicants because they bought the Property after the work had been done. The applicants allege that the Property has very significant defects. The applicants did not enter into a contract with the respondent and so do not have a claim for breach of contract against the respondent. The applicants may have rights against the respondent under s 12A of the BR Act but only to the extent that the respondent was the person who 'carried out the building work'.
General principles 9 Section 41(1) of the BR Act provides that a party to proceedings before the Disputes Tribunal may apply to this Tribunal for review of a decision of the Disputes Tribunal. Section 41(2) of the BR Act provides that such an application cannot be made unless leave is given by this Tribunal. 10 The principles applicable to the grant of leave under s 41(2) of the BR Act were not a matter of controversy between the parties. They were discussed by the Tribunal in Tangent Nominees Pty Ltd and Edwards and Anor [2005] WASAT 119 (Tangent), which has subsequently been regularly applied by the Tribunal. Tangent,and the cases referred to therein, establish that the decision of the Disputes Tribunal must be attended with sufficient doubt to justify the grant of leave and, in addition, that substantial injustice would be done by leaving the decision unreversed (Tangentat [37]). (Page 5)
11 There have been various formulations of the circumstances in which a decision is attended by sufficient doubt to warrant the grant of leave. In Well Holdings Pty Ltd v Agostino[2001] WADC 174, Jackson DCJ was considering an application for leave which was being heard at the same time as the appeal itself. At the time, building disputes under the BR Act were determined by a body named the 'Building Committee' (Committee). Jackson DCJ noted that the Committee was comprised, as the Disputes Tribunal is now, of consumer and builder representatives and that it could be expected to build up a body of expertise. He said: In my view, taking a broad view of all of the material before the Committee, the District Court should be slow to grant leave to appeal or to allow appeals except in cases where clearly there is no discernible basis for the decision of the Committee or, for example, where fundamental rules of natural justice have been breached by preventing a party adequately being heard. 12 In Cardinal Constructions Pty Ltd v Argo (1996) 16 SR (WA) 344; BC9640109 (Cardinal Constructions), the District Court said at 351: In general therefore it is clear that the object of a requirement that leave be obtained is to act as a filter to prevent hopeless appeals and also that the applicant for leave has to demonstrate that the decision appealed from is, at least, arguably wrong. There is no requirement however that the decision be obviously wrong: Qantas Airways Ltd v Joseland & Gilling (1986) 6 NSWLR 327. 13 Both Well Holdings and Cardinal Constructions were referred to in Tangent Nominees. 14 The difference in emphasis between the two passages may perhaps be explained by the fact that in Well HoldingsJackson DCJ was considering both an application for leave to appeal and the merits of the substantive appeal in that case. That case concerned technical issues about which the Committee might be expected to have expertise or knowledge. Cardinal Constructions dealt only with the application for leave to appeal, not the substantive appeal itself. 15 In deciding whether there would be substantial injustice if the Decision was not reviewed, the final nature of the Decision is a relevant consideration.
Factual error Ground 1 16 The primary basis for the application was that the Disputes Tribunal made an error in concluding that the respondent was not the person (Page 6)
who carried out the building work within s 12A of the BR Act after June 2005. This appears at Ground 1 of the application. 17 The findings of the Disputes Tribunal are set out in [37]: … the [Disputes] Tribunal makes the following findings: 1. That the builder carried out building work at 4A Menora Road, Dalkeith pursuant to a written cost-plus contract between September 2004 and June 2005. 2. The builder ceased building work at the site in June 2005 after which time the building work was undertaken by Zhang using labour and materials supplied by Zhang. 3. The building contract between the builder and the Zhangs was terminated by mutual agreement in or about June 2005. 4. To the extent that the builder had control of the building site until June 2005, any work undertaken by employees of the Zhangs up to the date of termination of the contract was 'building work' carried out by the builder in accordance with section 12A(1) of the Builders' Registration Act 1939. 5. The builder is not responsible for any building work undertaken by the Zhangs from and after June 2005. 6. The Tribunal will determine the issue of responsibility for the owners' various items of complaint based upon the findings that the builder is responsible for any works that were undertaken up to and including June 2005. 7. The Tribunal determines the preliminary issue as to whether Goldwest Developments Pty Ltd is the builder of the works listed in the owners' Scott schedule for the purposes of the Builders' Registration Act 1939 in the following manner: 18 There was evidence which supported the conclusion that the respondent ceased to be the person who carried out the work at the Property from June 2005. That evidence took the form of an unsworn witness statement from a director of the respondent, (Page 7)
Mr Thomas ChengִKee Tan, which was provided to the applicant a couple of days before the hearing. Mr Tan attended at the hearing before the Disputes Tribunal and affirmed that statement on oath. Part of the statement is set out at [21] of the Decision: Mr Tan gave the following evidence in relation to the cessation of works '33. Throughout May 2005, only minimal works were undertaken as Jim Zhang was waiting for materials to be supplied from China, including the timber flooring, the marble flooring, the kitchen cabinets and the balustrading. During this time, I was working on other projects and I did not do any work on the site. During this time, it was all Jim Zhang's workers on site[;] I did not supply any of the workers in May 2005. 34. In midJune 2005, the material Jim Zhang had obtained from China arrived at the site. When the material arrived, I inspected it. I said to Jim Zhang words to the effect: I said: "The glass is not Australian Standard, it isn't stamped. The balustrading isn't Australian Standard either the spacing is too big. I can't supervise this work, even if you put it in yourself because it's not Australian Standard." Jim said: "Don't worry, I'll do it all myself with my workers. I'm going to live in the house permanently so there's no problem. I said: "It's not my responsibility if it isn't Australian Standard, you can't come and complain to me later if there's [sic] problems because I haven't supplied the materials and I'm not installing these ones that you've got. I don't have any responsibility for whatever you put in yourself." Jim said: "That's fine. You don't have to get involved, I'll install it myself with my own workers and I won't come back to you if there's [sic] any problems with it." 35. After that conversation, I left the site, and I had no further involvement with the building works. 36. I did not advise the council that I had been removed from the site in midJune 2005. At that time, I did not think it was necessary to do so, as Jim Zhang was the owner of the site and was going to live in the house permanently after it was completed.' 19 Mr Tan was not crossexamined by counsel for the applicants on these issues. He was crossexamined only about the extent of his links with Mr Zhang. It appears that both Mr Tan and Mr Zhang were directors (Page 8)
of a company for a number of years, including the period when the works were done. 20 The applicants identified a number of matters which they say should have led the Disputes Tribunal to conclude that the respondent was the person who carried out the building work after June 2005: (a) the respondent and Mr Zhang entered into a contract pursuant to which the respondent agreed to carry out building works at the Property; (b) the respondent applied for and was granted a building licence by the City of Nedlands to carry out the construction of a new home at the Property. The specifications of the work were for the whole job. The respondent must be taken to have been aware of the terms of the licence; (c) at no time did the respondent inform the City of Nedlands, the Builder's Registration Board, Vero Insurance or neighbours that it had ceased to be the builder responsible for carrying out the works. Vero Insurance provided home indemnity insurance; (d) the respondent took no steps to correct the perception that it was the registered builder and, in particular, failed to remove its sign from the Property; and (e) the respondent received its full fee of $25,000 for supervising the works. 21 These matters were not disputed by the respondent. 22 In addition to these undisputed matters, the applicants also relied on: 23 These matters were disputed by the respondent: (a) Mr Tan gave evidence of conversations with Dr Malik about defects in the works. Those conversations took place after the work was complete and after the applicants had purchased the Property. The effect of Mr Tan's account of these conversations is that he agreed to repair defects which had had become apparent, but made statements which identified Mr Zhang as the person really responsible for fixing them up. Mr Tan's account of these conversations was not contradicted by evidence from Dr Malik. (Page 9)
Mr Tan gave evidence that he discussed the repairs with Mr Zhang. Some repairs were carried out. (b) The evidence which supported the contention that Mr Tan visited the Property after June 2005 came from a neighbour, Mr Ross Griffin. Mr Griffin swore an affidavit in the proceedings below in which he deposed that Mr Tan continued to visit the site after June 2005, that the respondent's sign remained outside the Premises after June 2005 (which is not presently in dispute), that Mr Zhang did not appear to take over the works from Mr Tan and that Mr Tan met with Mr Zhang on site after lock-up. Mr Griffin was not crossexamined on his affidavit, although it was inconsistent with Mr Tan's evidence. The Disputes Tribunal rejected Mr Griffin's evidence. The Disputes Tribunal stated that it was 'not confident' that Mr Griffin's evidence was accurate. It noted a lack of specific times in Mr Griffin's evidence, spoke of an assumption that four workers were employed by the respondent rather than Mr Zhang and asserted that this 'impacted' on Mr Griffin's evidence that Mr Tan returned to site after June 2005. The Disputes Tribunal eventually rejected Mr Griffin's evidence that Mr Tan returned to site after June 2005 even though the respondent did not crossexamine Mr Griffin on his evidence. 24 A final matter relied upon by the applicants was that the respondent was said to have changed its position during the course of the proceedings. A letter from Mr Zhang dated 2 March 2010 was annexed to Mr Tan's statement. It states that the contract between Mr Zhang and the respondent was only for the respondent to complete work up to the lockup phase. The letter does not mention early termination of the contract. 25 The Disputes Tribunal dealt with Mr Tan's evidence at [28]: … In the absence of Mr Tan being crossexamined by counsel for the owners on his statements that he had no further involvement with the building work after the meeting with Mr Zhang in June 2005, and his statement that the only moneys paid to him were in accordance with the progress payment invoices attached to his statement, the Tribunal considers itself bound to come to the conclusion that neither Mr Tan [nor] his company had anything further to do with the building work after June 2005. 26 The statement that the Disputes Tribunal 'considers itself bound' to come to a particular conclusion appears to set out the Dispute Tribunal's understanding of the rule in Browne v Dunn(1893) 6 R 67 (Browne v Dunn). The rule in Browne v Dunnwas formulated by Hunt J in Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation[1983] 1 NSWLR 1 at 16 (Allied), as follows: (Page 10)
It has in my experience always been a rule of professional practice that, unless notice has already clearly been given of the crossexaminer's intention to rely upon such matters, it is necessary to put to an opponent's witness in crossexamination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings. Such a rule of practice is necessary both to give the witness the opportunity to deal with that other evidence, or the inferences to be drawn from it, and to allow the other party the opportunity to call evidence either to corroborate that explanation or to contradict the inference sought to be drawn. … 27 A second aspect of the rule is the consequences that flow where, as here, a witness has not been crossexamined. The consequences of noncompliance were discussed by Newton J in Bulstrode v Trimble[1970] VR 840 (Bulstrode v Trimble). At page 848, he said: In its second aspect the rule in Browne v Dunnis, in my opinion, as I earlier said, a rule relating to weight or cogency of evidence … In this aspect the rule says no more than that if a witness is not cross-examined upon a particular matter, upon which he has given evidence, then that circumstance will often be very good reason for accepting the witness's evidence upon that matter. … I have used the word 'often' advisedly, because if a witness's evidence upon a particular matter appeared in his evidenceinchief to be incredible or unconvincing, or if it was contradicted by other evidence which appeared worthy of credence, the fact that the witness had not been crossexamined would, or might[,] be of little importance in deciding whether to accept his evidence. 28 There were suggestions in Allied,at page 18, that a person charged with deciding factual questions is obliged to accept evidence that is not incredible and which has not been challenged in crossexamination. However, in Gaunt v Hooft[2009] WASC 36; BC 200900955 (Gaunt v Hooft), Johnson J examined the authorities and held that the second part of the rule related to weight of evidence, in accordance with Bulstrode v Trimble. She said, 'it does not automatically follow that the absence of crossexamination will result in acceptance of the appellant's evidence …' (see alsoJack Brabham Engines Ltd v Beare[2010] FCA 872; BC 201005917 at [89] (Jagot J)). 29 The statement at [28] of the Decision is inconsistent with the approach laid down in Bulstrode v Trumbleand Gaunt v Hooft. While the failure to crossexamine Mr Tan on this issue might well be regarded as a 'very good reason' to accept Mr Tan's evidence, the failure to crossexamine did not relieve the Disputes Tribunal of the obligation to evaluate all the material relevant to the veracity of Mr Tan's evidence. (Page 11)
That material included the failure of the applicants' counsel to crossexamine Mr Tan, but also the circumstances identified at [21] above, the evidence of Mr Griffin and the differences between the terms of the letter from Mr Zhang to the respondent dated 2 March 2010 on the one hand, and the case advanced by the respondent in Mr Tan’s witness statement on the other. The letter of 2 March 2010 is not on all fours with the evidence given by Mr Tan in his witness statement. Further, the approach of the Disputes Tribunal to Mr Tan's evidence can be contrasted with the approach the Disputes Tribunal took at [29] and [30] of the Decision to Mr Griffin's evidence, where it evaluated and rejected Mr Griffin's evidence, even though he was not crossexamined. 30 There is a real possibility that the Disputes Tribunal would have rejected the evidence of Mr Tan if it had evaluated Mr Tan's evidence in light of all the circumstances of the case, rather than simply accepting it because he was not crossexamined. Well Holdings,and Cardinal Constructions at page 353, suggest that it is not appropriate to grant leave in a case where there is a conflict of evidence upon which the Disputes Tribunal has reached a conclusion. However, that principle does not govern this case because the Disputes Tribunal did not evaluate the competing evidence and reach a conclusion on the merits. It is not appropriate for me to form or express any more concluded view of the effect of the evidence on the preliminary issue, because that issue will be determined by the Tribunal on the substantive review of the Disputes Tribunal's decision (see Roberts v Roberts(1992) 8 WAR 170 at 174). Further, it is not necessary for a decision of the Disputes Tribunal to be obviously wrong in order for leave to be granted. The matters identified above are sufficient to justify the conclusion that the Decision is attended by sufficient doubt to warrant the grant of leave. 31 In order for leave to be granted, I must be satisfied that substantial injustice would result if leave were not granted. The damages complained of by the applicants are substantial. The applicants assert that the total cost of repairing all the defective work runs into hundreds of thousands of dollars. However, the present application only affects that part of the work on the Property which was done after June 2005. The parties did not clearly identify what work is alleged to have been done after June 2005. However, the statement of Mr Tan indicates that the windows were at the root of the dispute between Mr Tan and Mr Zhang and that the dispute between them occurred before the windows were installed. It appears that the amount claimed in respect of repairing the windows is $186,505. The ability of the applicants to recover this sum from the respondent depends on the correctness of the Decision. The decision of the Disputes Tribunal (Page 12)
is a final decision, subject to the possibility of review under the BR Act. I am satisfied therefore that substantial injustice would ensue if leave were not granted.
Other grounds 32 The applicants also advanced three other grounds upon which leave to review should be granted: a) they were prejudiced at the hearing before the Disputes Tribunal by the late delivery of a statement from Mr Tan, a director of the respondent, which prevented them obtaining and providing to the Disputes Tribunal evidence relevant to the preliminary issue (Ground 2); b) the respondent failed to put appropriate corroborative evidence before the Disputes Tribunal, in particular, evidence from Mr Zhang (Ground 3); and c) there was additional evidence which contradicts the evidence given on behalf of the respondent at the hearing of this issue before the Disputes Tribunal (Ground 4). It appears from the applicants' statement of issues facts and contentions that Ground 4of the application arises from evidence which Mr Tan gave at a further hearing before the Disputes Tribunal. 33 I do not propose to deal specifically with these grounds. Each of Grounds 2, 3 and 4 is directed to the evidence that ought to have been available to the Disputes Tribunal at the hearing on 2 September 2010. Once leave has been granted to review the Decision, the preliminary issue will be determined by the Tribunal in accordance with s 27 of the State Administrative Tribunal Act 2004 (WA) on the basis of the evidence put before it at the review hearing (Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission(2000) 203 CLR 194; [2000] HCA 47 at [13] (Gleeson CJ, Gaudron and Hayne JJ)). The Tribunal will not be bound by the findings made by the Disputes Tribunal (including the finding that the respondent was the person who carried out the work up until June 2005). The fact that the Disputes Tribunal did not have the benefit of particular evidence will not affect the decision to be made by the Tribunal on the review. In these circumstances, it is not appropriate for me to preempt the decisions at the rehearing on the relevance of the additional evidence referred to in Grounds 2 and 4. As to Ground 3, it would be premature to comment on (Page 13)
any failure by the respondent to call witnesses when it is not yet clear what evidence will be called by the respondent at the rehearing. 34 It is possible for the Tribunal to limit the grounds upon which a decision of the Disputes Tribunal may be reviewed. This was done in Tangent(upheld on appeal as Tangent Nominees Pty Ltd v Edwards[2006] WASC 45). However, that case involved a number of discrete issues in respect of which the applicant sought to review the decision of the Disputes Tribunal. The Tribunal limited the issues that would be reheard to the single issue of jurisdiction. In the present case, there is only a single issue whether the respondent was the person who carried out the relevant work. It is not appropriate to alter the nature of the review by limiting the case which the applicants can put on that single issue. Consequently, the appropriate course is simply to grant leave under s 41(2) of the BR Act to review the Decision.
Relief 35 As indicated in paragraph [to be inserted], the applicants' submissions dated 10 May 2011 were directed to the grant of leave to review and did not address the merits of the review itself. The applicants' approach was appropriate because this is not a case in which it the Tribunal might properly determine the substance of the review application at the same time as the application for leave. A significant part of the difficulties for the Disputes Tribunal arose from a failure to adequately explore factual issues in crossexamination. This Tribunal has not had the benefit of crossexamination of Mr Tan (or any of the other witnesses for that matter). 36 The applicants sought orders that the draft grounds of review accompanying the application do stand as the grounds of review in the substantive review proceedings. That order is not appropriate because the draft grounds of review were directed to identifying error in the decision of the Disputes Tribunal. As indicated in paragraph [to be inserted] above, the review will be by way of rehearing under s 27 of the SAT Act, rather than by a process directed primarily to identifying errors made by the Disputes Tribunal. There should, therefore, be a directions hearing at which directions can be made leading to a fresh trial of the preliminary issue identified by the Disputes Tribunal.
Orders 37 The Tribunal orders that: (Page 14)
1. Leave be granted to the applicant under s 41(2) of the Builders' Registration Act 1939 (WA) to review the decision of the Building Disputes Tribunal issued on 14 September 2011. 2. The matter be listed for a directions hearing on a date to be fixed in consultation with the parties. 3. The question of costs of the application for leave to review be reserved to the substantive hearing of the review. |