Slade v Gea

[2001] NSWSC 38

CITATION:	Slade v Gea [2001] NSWSC 38
CURRENT JURISDICTION:	Common Law Division
FILE NUMBER(S):	SC 1098/2000
HEARING DATE(S):	16 November 2000 15 December 2000
JUDGMENT DATE:	9 February 2001
PARTIES :	Leslie Slade (Appellant 1),T/as Galaxy Furtniture Roslyn Slade (Appellant 2), T/as Galaxy Furniture Luis Gea (Respondent 1) Katalina Gea (Respondent 2)
JUDGMENT OF:	Carruthers AJ at 1

LOWER COURT JURISDICTION :	Local Court
LOWER COURT FILE NUMBER(S) :	7958/96
LOWER COURT JUDICIAL OFFICER :	Dr. P. O'Shane LCM

COUNSEL :	S Y Reuben (Appellants) A P Healey (Respondents)
SOLICITORS:	Forbes-Smith and Company (Appellants) Michie, Shehadie and Company (Respondents)
CATCHWORDS:	NATURAL JUSTICE - Whether defendants denied right to call a relevant witness - whether defendants denied natural justice by adverse findings on matters not put to them during the trial.
LEGISLATION CITED:	Home Building Act 1994 Justices Act 1902 Suitors' Fund Act 1951 Supreme Court Act 1970
CASES CITED:	Board of Education v Rice [1911] AC 179 Jones v National Coal Board [1957] 2 QB 55 Mahon v Air New Zealand Ltd [1948] AC 808 Regina v Deputy Industrial Injuries Commissioner; Ex parte Moore [1965] 1 QB 456 Stead v State Government Inssurance Commission (1986) 161 CLR 141 Vakauta v Kelly (1989) 167 CLR 568
DECISION:	See paragraph 120

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

CARRUTHERS AJ

Friday, 9 February 2001

No. 10908/2000 Leslie SLADE and Roslyn SLADE, Appellants (Defendants) v Luis GEA and Katalina GEA t/as Galaxy Furniture, Respondents (Plaintiffs)

JUDGMENT

1    HIS HONOUR: This is an appeal by Leslie Slade and Roslyn Slade pursuant to the provisions of s 104(5) of the Justices Act 1902 and s 69 of the Supreme Court Act, 1970, against a judgment by her Worship Dr. P. O’Shane A.M in the Local Court Sydney, delivered on 21 March 2000.

2    For the sake of convenience I shall refer to Mr and Mrs Slade as the defendants, as they were in the Local Court. They reside at 1 Shortland Ave, Strathfield.

3    The respondents to the appeal are Luis Gea and Katalina Gea

who trade as Galaxy Furniture, of Roseland. Mr Gea is a carpenter and joiner, and Mrs Gea performs certain secretarial duties in the business. Again, for the sake of convenience, I shall refer to Mr and Mrs Gea as the plaintiffs, as they were in the Local Court.

4    There was an oral agreement made between the parties in August 1995 under which the plaintiff would carry out certain carpentry and joinery work in the kitchen of the defendants’ home. After some work had been carried out by the plaintiffs, disputes arose between the parties in 1996, and the plaintiffs thereupon refused to complete any further work for the defendants.

5    The plaintiffs claimed that the defendants owed money to them, and on 17 July 1996 the plaintiffs commenced proceedings by way of an Ordinary Statement of Claim in the Local Court (Civil Claims) Sydney

6    The cause of action was pleaded as:

“1. Work done and materials provided by the plaintiff for the defendant at the defendant’s request from 1 September, 1995 to March 1996”.
2. The plaintiff claims $6,992.90 plus interest and costs.”

7    At the hearing the claim was amended to $6,642.90, and the period was amended to 8 August 1995 to March 1996.

8    The defendants filed a Notice of Grounds of Defence on 29 November 1996, which was later amended. On 12 October 1998 a Notice of Amended Grounds of Defence was filed in the following terms: -

The Defendants intend to defend this action upon the following grounds: -
1. As to paragraph 1: The defendants admit an agreement between the plaintiffs and the defendants but deny the period of such work as alleged.
2. As to paragraph 2: The defendants deny that the plaintiff did work and provided materials to the defendants to the value of the amount claimed.
3. As to paragraph 2: the defendants deny that they are indebted to the plaintiffs for the amount claimed of for any amount and claim that the plaintiffs have been paid for all work done and for all materials provided.
Particulars
Part Payment September 1995 - deposit $400.00
Part Payment October 1995 $2,500.00
Pallet Jack agreed set-off $350.00
Jarrah timber for kitchen cupboards All supplied by the defendants.
Hinges All supplied by the defendants.
4. The defendants further claim: -
(a) That no written agreement was provided by the plaintiffs for the manufacture and installation of a kitchen at the defendants premises at 1 Shortland Ave., as a consequence thereof any agreement or claim by the plaintiff pursuant thereto is unenforceable pursuant to sections 7, 7A, 7B, and 10 of the Home Building Act 1994 (previously the subject of the Building Services Corporation Act 1989).
(b) The parties agreed verbally that the work would be carried out to a high standard, that the work would be completed in about 6 weeks i.e. around mid-October 1995, that the plaintiffs would charge a far (sic) and reasonable amount and that all of the timber would be supplied by the defendants.
(c) Partial installation of the kitchen took place in October 1995.
5. In breach of the agreement, the plaintiffs failed to: -
(a) Install the kitchen in a proper and workmanlike manner,
(b) Carry out certain work and supply and install the remainder of the kitchen and complete its installation.
6. As to the Defence generally, the defendants deny they are indebted to the plaintiffs for work done and materials provided in that:
(a) Any work done by the plaintiffs for the defendants has been paid for by the defendants, and
(b) That any materials provided by the plaintiffs have been paid for by the defendants.
7. In the alternative, the defendants deny they are indebted to the plaintiffs at all in that there was no agreement.

8. In the alternative, the defendants deny they are indebted to the plaintiffs in that if there was any agreement between the plaintiffs and the defendants, such agreement is unenforceable and was too vague and uncertain.

9    The defence under the Home Building Act 1994 appears to have been abandoned, during the course of the hearing, although this is not entirely clear.

10    The defendants had earlier, on 30 June 1998, filed a Notice of Cross-Claim, claiming the sum of $12,069.89 plus interest. That cross-claim is in the following terms: -

“The Cross Claimants intend at the hearing of this action to bring against the Cross Defendants a Cross-claim, particulars of which are as follows: -
1. In late August 1995 an oral agreement was reached between the Cross Claimants (the Slades) and the Cross Defendants (Galaxy) that a new Jarrah timber kitchen would be manufactured and installed in the Slade’s home at 1 Shortland Avenue, Strathfield, New South Wales, by Galaxy.
2. Terms of the agreement included:
(a) The work would be carried out to a high standard, and
(b) The work would be carried out in two stages, and
(c) The work would be completed in about six (6) weeks - i.e. about mid-October 1995, and
(d) That Galaxy would charge a fair and reasonable amount based on the average going rate for comparable labour, and
(e) The Slades would provide all timber and other materials as needed for the work to be completed.
3. Partial installation of the first part took place on one day in October 1995.
4. The second part of the kitchen was never installed.
5. In breach of the Agreement, Galaxy failed to manufacture, fit, and install the first part of the kitchen in a proper and workmanlike manner, thus causing irreparable damage. The Slades will incur expense in completely replacing the partially installed kitchen.
6. In breach of the Agreement, Galaxy failed to manufacture, fit, and install the second part of the kitchen, for which timber was supplied.
7. In order to rectify paragraphs 5 and 6 above, the Slades seek rescission of the Agreement, where: -
(a) All moneys and other items paid or supplied to Galaxy for the first part of the kitchen are returned, and, in addition, damage to existing structures are reimbursed, at a value of $10,226.32.
(b) All timber, or value thereof, supplied for the second part of the kitchen are returned, at a value of $1,843.57

8. The Slades claim a sum of $12,069.89 , including interest.

11    On 5 August 1998, the defendants filed a Notice of Defence to Cross-Claim in the following terms:

The Plaintiff/Cross Claimant intends to defend this action upon the following grounds:
1. The agreement as alleged in paragraphs 1 and 2 of the Cross Claim is denied.
2. In answer to paragraph 3 of the Cross Claim the Plaintiff/Cross Defendant says that the first stage was completed and partly paid for.
3. In answer to paragraph 4 of the Cross Claim the Plaintiff/Cross Defendant says that the second stage of the work to be carried out was manufactured and was not delivered as the Defendant/Cross Claimant refused to make payment of monies due and owing to the Plaintiff/Cross Defendant.
4. Paragraphs 5 and 6 of the Cross Claim are denied.
5, It is further denied by the Plaintiff/Cross Defendant that the Defendant/Cross Claimant is entitled to the relief or sum as claimed in paragraphs 7 and 8 of the Cross Claim, or at all.

12    The case occupied six hearing days before her Worship, namely, 3 February, 29 March, 30 March, 15 June, 16 June and, 15 September 1999.

13    On 21 March 2000 her Worship delivered judgment, finding for the plaintiffs in the totality of their amended claim of $6,642.90, together with interest from 1 September 1995, in the sum of $3,181.77, being a total of $9,824.67. Her Worship dismissed the cross-claim, and accordingly judgment was entered for the plaintiffs in the sum of $9,824.67, with costs to be assessed.

14    I note that the judgment states: -

“This particular decision is late. Unfortunately, an earlier version of the decision went astray, and the file papers were despatched to the State Repository. The inconvenience to the parties is very much regretted, and in view of the delay, it is deemed that the decision was given on
31 October 1999.”

15    Mr and Mrs Gea gave evidence at the trial and her Worship accepted both of them, in her judgment, as witnesses of truth. Mr and Mrs Slade also gave evidence. Her Worship found that they both discredited themselves as witnesses, and that

“the evidence of each of them was inherently contradictory, manifestly wrong, and downright untrue”.

16    The nature of the plaintiffs’ case before the Local Court, which as I have indicated was accepted in its entirety, may for present purposes be outlined briefly. Mr Gea made contact with the defendants through a mutual acquaintance in the business world. Mr Slade carries on business as a trader. Mr Gea went to the defendants’ home on 9 August 1995, at their request, and discussed with them the carpentry and joinery work which they required to be done. This involved manufacturing new doors to fit into existing carcasses (as they are called) in the defendants’ kitchen. Certain ancillary work of a minor nature was also discussed. Mr Slade said that he would supply the Jarrah timber which was to be used for the work.

17    Mr Gea indicated that he was not really interested in that kind of work because he normally installed kitchens in their entirety. However, because of their mutual acquaintance, he was prepared to do the work. This may explain the lack of formality and certainty in the arrangements between the parties.

18    In any event, Mr Gea said that depending upon the availability of materials he would expect the job to be completed in about six to seven weeks.

19    The parties discussed the likely cost. Mr Slade made it clear that he did not mind if the plaintiffs costed the job on an hourly basis, as long as he got a “good job”.

20    Mr Gea claimed (and the defendants deny) that he would charge on an hourly basis being $30 for a tradesperson, and $15 for a labourer.

21    The defendants provided the timber and the manufacturing work was carried out at the St Peters factory of the plaintiffs.

22    The defendant contended that $400 was paid by him in September 1995 as a deposit and that there was an agreed set-off in relation to a pallet jack in the sum of $350.00

23    On or about 17 and 18 October 1995, the plaintiff installed the cabinet doors and certain skirtings which had been the subject of the August agreement. At that time Mr Gea claimed (and the defendants deny) that he asked for about $4000, but received a cheque for only $2500 from the defendants.

24    In any event the plaintiffs agreed to carry out further carpentry and joinery work in the defendants’ home, and Mr Gea measured-up for that work about 18 October 1995.

25    That additional work was referred to during the course of the trial by the defendants as “stage two”. The plaintiffs’ case was that the defendants were prepared to go ahead with stage two because they were happy with the quality of work carried out in stage one.

26    There was confusion and disputation in the evidence about which work constituted stage two - as the defendants categorised it. However, for present purposes it is sufficient to note that it involved further carpentry and joinery in the kitchen area.

27    The plaintiffs embarked upon the work in their St. Peters factory. It was not completed, however, when Mr and Mrs Gea went overseas from 23 December 1995 to 11 February 1996.

28    In February 1996, it would appear that a request was made by the plaintiffs to the defendants for the provision of further timber for the completion of stage two.

29    On 4 March 1996 a telephone conversation took place between Mrs Slade and Mrs Gea which, according to the plaintiffs, was in the following terms: -

“R. Slade: Where is my kitchen?
K.Gea: We are painting it.
R. Slade: What are you painting do you know who it is?
K. Gea: Yes it is Mrs Slade from Strathfield.
R. Slade: Yes that’s right why are you painting my kitchen
its Jarrah, you should be varnishing it not painting it, do you know who you are talking to?
K. Gea: Yes.
R. Slade: Well when am I going to get my kitchen?
K. Gea: We need some more money.
R. Slade: I beg your pardon. You are not getting one cent
until you have delivered and installed my kitchen the way I want it and you fix the other doors up properly.
K. Gea: We have got to pay our workers.
R. Slade: Listen you went away for two months. You
found money to go away and you still have my kitchen. The first part of it has not been installed. It is defective. It has been seven and a half months and I still don’t have all the first part of my kitchen let alone anything to show for all this timber that we have been supplying you. Strathfield council is on our back because we have all this stuff on the front yard. I want my kitchen and you are not getting one cent until it is delivered and I am going to sue you if I have to.”

30    The upshot of the stance taken by the plaintiffs in this conversation was that Mr Gea said that he would not install the completed joinery work which was in his workshop until he had received some payment (an amount was not specified) from the defendants. The defendants, on the other hand, contended that they were not liable for payment in relation to the goods in the workshop until they had actually been installed. They also contended (and the plaintiffs denied) that the plaintiffs had been paid in full for stage one of the work.

31    The defendants then consulted a solicitor who wrote to the plaintiffs on 3 April 1996. That letter was not in evidence before the learned Magistrate.

32    In response, the plaintiffs sent an invoice to the defendants’ solicitor. That invoice, which was the basis of the plaintiffs’ claim, involved a calculation of labour performed in relation to the work for both stage one and stage two at the rates to which I have already made reference.

33    Following the severance of relations between the parties, the defendants referred the matter to the Department of Fair Trading (Building Services Corporation).

34    In support of that complaint the defendants retained Tyrells Property Inspections NSW to prepare a technical report for the Department of Fair Trading. The property was inspected by Mr Alan Browne (Building Technician to the Department of Fair Trading) on 2 August 1996 and he prepared a report which listed workmanship which, in his opinion, was defective

35    The defendants did not proceed with the complaint before the Department of Fair Trading, presumably because legal proceedings had been commenced by the plaintiffs.

36    In 1997 the defendants retained Mr Raymond Carden of Carden and Carden Pty Ltd, Building Consultants, to report upon the plaintiffs’ workmanship.

37    Mr Carden has had vast experience in the building industry with particular emphasis on carpentry and joinery. He is an Accredited Consultant to the Master Builders Association and a Grade 1 consultant to Housing Industry of Australia. The Tyrells’ report was made available to Mr Carden who inspected the subject premises on 6 June 1997 and prepared a report, to which photographs taken by him were annexed, on 23 June 1997.

38    The report deals separately with Nailholds; Cupboard doors not yet hung; Method of hanging cupboard doors, and Corner unit shelves.

39    With regard to the quality of workmanship, the conclusion relevantly reads as follows: -

“Based on a visual inspection and available evidence at time of my inspection, it is my opinion that the workmanship is of poor quality and is totally unsatisfactory, and in some locations materials of the finished surfaces are of sub-standard quality.
The filler does not match in colour to the finished timber colour
Blemishes to the finished surface of the cupboard doors and drawers exist.
The hanging of the cupboard doors has not [been] completed or adjusted in a tradesmanlike manner.
………
The contracted works undertaken have been carried out to a standard far below that which would be expected of a licensed tradesman.
Overall, I found workmanship and building practices, to be totally unacceptable.”

40    Subsequently the defendants requested Mr Carden to examine two particular kitchen cupboard doors manufactured by the plaintiffs. In a report dated 17 July 1998 Mr Carden said: -

“I consider that the kitchen cupboard doors are of poor quality, particularly considering the other materials used in the kitchen - i.e. granite bench tops and stainless steel Zanussi gas cooking appliances.

41    A face beading was removed from each door. Mr Carden observed, according to his report, that: -

“… the beading and timber panelling has been glued into position, as well as being fixed with 15mm bright steel nails at two locations - top and bottom rails, and [at] three locations down the side rails.”

42    Mr Carden reported that the mitred joints of the beading on the two doors examined, had gaps of up to 0.3mm. Further, the beading did not fit tightly to the timber framing, leaving gaps of up to 1mm. Also, it could be observed on the mitred beading that a filling compound had been applied to close up the gaps of up to 0.5mm.

43    As to panelling to cupboard doors, Mr Carden commented: -

“The panelling to the doors has been installed butting tightly to the timber framing, thus providing no allowance for expansion of the timber panelling against the framing.”

44    When the case came on before her Worship on 3 February 1999, Mr Reuben of Counsel for the defendants informed her that it was not intended to rely on the Tyrells report of 2 August 1996, other than to the extent that it was material to which Mr Carden made reference in the preparation of his reports. However the defendants made it clear that they were relying on Mr Carden’s reports and counsel for the plaintiffs indicated that Mr Carden would probably be required for cross-examination. Mr Carden’s reports had been filed in the Court prior to the commencement of the proceedings and they were marked as exhibits in the trial. The Tyrells report was also marked as an exhibit.

45    Ms Healey of Counsel for the plaintiffs, informed her Worship that the plaintiffs were relying upon the principle of quantum meruit to establish their claim.

46    Mr Reuben indicated that the defendants were relying upon the Carden reports as a defence to the claim in quantum meruit on the basis that the work was so defective that the plaintiffs would be unable to establish that they were entitled to a reasonable remuneration. Secondly, the defendants relied upon the Carden reports as the foundation for their cross-claim. The defendants’ cross-claim had been quantified in a Scott Schedule which had earlier been filed in the Court. Appropriate responses were made by the plaintiffs to the various items in that schedule.

47    A convenient summary of the defendants’ case is set out in the document headed “Defendants’ Statement of Facts” which was before her Worship. Relevantly, paragraphs one to nine of that statement provide as follows: -

“ 1. On or about 11 August 1995 the Plaintiff agreed with the Defendant to do work on a ‘do and charge’ basis for the installation and manufacture of kitchen cupboards with doors and some joinery at the defendants’ home at 1 Shortland Avenue, Strathfield.
2. It was agreed that:
(i) The Plaintiff would do a high quality job.
(ii) the job would be delivered and installed in two stages.
(iii) that on delivery of each stage payment was to be made on installation.
(iv) that the Defendant would supply materials at the Defendants’ cost.
(v) delivery of the first stage of the job would take six weeks.
3. On or about 18 October 1995 the Plaintiff gave partial delivery and installation of stage one of the job as agreed and promised that stage two installation and delivery would take place in a further six weeks.
4. The Defendants’ delivery and installation was defective in that:
(i) installation was incomplete.
(ii) the whole of the work being cupboard doors that were delivered were either too short or of incorrect width for the pre-existing cabinet carcasses.
(iii) the materials supplied by the defendant (namely the kitchen cabinet carcasses) where (sic) damaged during installation.
(iv) the woodwork was cracked or was cracking, gaps appeared therein.
(v) incorrect putties, glues and sealers were used.
(vi) defects existed as outlined in the experts report of the Defendant filed and served herein.
5. The work done by the Plaintiff was wholly defective and not to the standard agreed and rendered the materials provided by the Defendant and at their expense totally useless. The Defendants paid for the job up to and including the end of stage one.
6. The Plaintiffs failed to deliver stage two as agreed or at all or complete the unfinished installation of stage one or rectify any defects from stage one.
7. The Plaintiffs abandoned their contractual obligations owed to the Defendant.
8. There was a total failure of consideration provided by the Plaintiff.

9. As a result thereof the Defendants have suffered loss and damages.

48    During the course of the trial, the defendants, by cross-examination and the tender of oral and documentary evidence, sought to rely upon each of the matters raised under the above Statement of Facts.

49    It is necessary to deal specifically with regard to the extent to which the Carden reports were the subject of reference during the course of the trial.

50    The Carden reports featured prominently in the examination-in-chief and the cross-examination of Mr Gea. During the course of Mr Gea’s examination-in-chief, counsel for the plaintiffs asked him to address each aspect of the criticisms contained in the reports which related to the quality of workmanship, and to make comment upon such criticisms. Mr Gea rejected each of the criticisms.

51    During the course of the cross-examination of Mr Gea, with regard to the criticisms in the Carden reports, her Worship stated that relevant matters also to be considered were the quality of the timber supplied by the defendants, the natural qualities of timber, the length of time that the cabinets had been in situ, and their exposure to sunlight, and the like.

52    Certain comments by her Worship during the cross-examination should be noted.

BENCH: “I’m not familiar with timber but if we are going to embark on that course then I am going to need to hear some expert evidence on the qualities of timber.”
(30/3/99, T. 13)

And later: -
BENCH: “Now as to the quality of timber supplied quite clearly your client is going to have to get expert evidence to present to the Court on qualities of timber because my understanding of timber which (sic) is very limited and I am not going to apply, attempt to apply an expert’s knowledge of timber to this case…” (T.14)

53    And later, referring specifically to Mr Carden’s first report: -

“BENCH: Except Mr Reuben I want you to be clear about this. Where he makes observations and comments at page 5 which is what you now seek to rely upon in relation to this particular door, he does not offer an opinion as to how that might have occurred and he certainly doesn’t draw any conclusions specifically in relation to those matters.
Furthermore, he doesn’t even start to address the quality of timber used. Now what I have heard through from Mr Gea is that the quality of timber used was not good. I think you put it to him, I’m not sure I haven’t canvassed my notes, but I think at one stage you did put it to him that he was dealing with good quality timber and he denied that yesterday specifically.” (T. 16-17)

Then later: -
BENCH: “Because Mr Carden doesn’t tell you, does he? He makes an assertion that the work is of poor quality but I don’t know whether he was told that in fact the timber was of a certain quality initially and he might have made that report on a misunderstanding. I simply don’t know. Because he doesn’t actually tell us so. He was told certain things by your client but so what. After all he makes this report a couple of years after the event.” (T.17)

Then later: -
“BENCH: You are quite clearly going to have to get an expert along here. If that is part of your case.” (T. 21)

Then later: -
“BENCH: Mr Reuben, in fact - do you have an expert witness to come along and give evidence in respect of these matters?”

To which Reuben replied: -
“I do have Mr Carden, yes” (T. 24)

54    Later her Worship said: -

“He says the filled nail holes are obvious due to the poor matching of the colour but that doesn’t tell us anything. He is making this report two years after the event. Now what I am asking you is have you taken specific instructions from him with regard to these particular matters that you are now putting to Mr Gea. And if you have not, then I suggest you actually have him here and sit in the Court room whilst Mr Gea is giving this evidence. Because if he is an expert witness then he ought to be hearing this.
REUBEN: Mr Carden I believe is here, so I can [have] him brought in.
BENCH: He’s an independent expert on these sorts of matters or he should be. What Mr Gea is saying is that timber is a natural product. It will naturally change colour. It will do that over time. You must know that from your own experience. We all know that. Like any other natural substance in fact.” (T. 24)

55    At that stage Mr Carden was not apparently in the precincts of the court. Whilst his attendance at the court was awaited, the discussion between her Worship and Mr Reuben continued. Her Worship said: -

“BENCH: Mr Reuben just one moment. I mean I’d like to have these proceedings move along expeditiously even more than you would. But it seems to me that you are making certain assumptions and I am not sure that you have - I don’t mean any disrespect to you but I’m not sure that you have taken clear instructions from your expert witness on these points, but I am following the evidence of Mr Gea. That is the only evidence I have at present. Apart from my own knowledge of - because I am a house owner and I’ve had internal furniture made for me. I’ve had kitchens supplied to me and I’ve had cupboards supplied in other rooms in other house. I’ve had them hand made on the job for me. I’ve had them installed for me on the job.
REUBEN: Exactly your Worship and your Worship can take that into account. (T.26)

56    After further discussion her Worship adjourned, apparently pending Mr Carden’s arrival. Although it is not noted on the transcript, it is evident that Mr Carden arrived during the short adjournment and he was present in court whilst Mr Reuben’s cross-examination of Mr Gea continued (T.28)

57    At the conclusion of the cross-examination her Worship said: -

“Mr Carden can quit the Court room now. You certainly won’t be required today Mr Carden” (T.54)
Mr Reuben then requested that Mr Carden stay for the re-examination:
“because it may be that there may be some aspects while he is here I think” (T. 55)

58    It is necessary now to consider certain aspects of Mr Slade’s evidence.

59    Prior to the commencement of the hearing, a witness statement of Mr Slade was filed. That statement became evidence in the trial (EXHIBIT 4). Paragraph 14 is in the following terms: -

“Although the job was incomplete the Plaintiff commenced measuring up for the second part of the job. I provided the Plaintiff with a cheque for $2,500.00 which I understood covered the amount required by stage one although I had never been provided with any invoice.”

60    Paragraph 21 is in the following terms:

“I say that the work which has been supplied by the Defendant is defective in that the following defects are apparent to me.
(i) the doors were not properly finished, with inconsistency in their colouration.
(ii) the doors which were supplied appear to have been filled with the wrong colour putty or filler.
(iii) the corner units are split, the wood has split.
(iv) there was splitting in the doors.
(v) the joins in the cupboard doors were opening up.
(vi) lacquer was peeling off the doors.
(vii) the finish on the doors was not smooth.
(viii) the doors were not in alignment.
(ix) the special hinges to be supplied by the Plaintiff were never supplied.
(x) each door was short by approximately five millimetres.
(xi) not all doors were supplied to the first stage as required.
(xii) the doors were up to ten millimetres too narrow so that gaps were exposed within the doors.

61    Mr Slade was cross-examined in relation to these matters at the hearing on 15 June 1999.

62    Reference having been made to a complaint form which was completed by Mr Slade, for the purposes of the complaint to the Department of Fair Trading, the cross-examination took the following form: -

“HEALEY: Q. I’ll just ask this question. When you filled in that form, I appreciate you can’t remember when, one of the questions was, on which date did you first become aware of the disputed items? And you have written, next day 19 October 1995, do you agree with that?
A. That’s correct
Q. And that is in fact not the case is it Mr Slade?
A. It was the case.
Q. Mr Slade you were not aware of - I withdraw that. Apart from the split in the bench which you solicitor has made some comment about in his letter, these other supposed defects that you have listed, were not something that you were aware of?
A. I was aware of each and every one of them the day after that he installed the kitchen cupboard doors.
Q. And you say that despite that, you went ahead with allowing Mr Gea to continue to build the rest of the job?
A. Correct.” (T. 31)

63    Mr Slade was further cross-examined about the answers in the complaint form as follows: -

“HEALEY: Would you agree with me, and obviously if you say it’s not your writing and it’s your wife’s writing I’ll accept that for you, but the complaint was lodged by yourself, is that right?
A. Correct.
Q. So you and your wife discussed the complaint and you had input into this form, didn’t you?
A. That’s correct.
Q. Your wife didn’t just make it up without speaking to you, did she?
A. She could have.
Q. Did you read the complaint form before it was sent into the Building Services Corporation?
A. I can’t say.
Q. What about this. Do you agree, and again I’m reading from the document, did you read this after your wife wrote it: -
‘The problems associated with stage 1 were not brought to Luis Gea’s attention to date as yet because I felt that the integrity of the tradesmen to rectify the matter was at the end of stage 2’?
Do you remember reading that?
A. That probably would be more likely the way that I thought on the day.
Q. Certainly even though your wife has written it it’s how you felt when you’re making the complaint on 10 July 1996, is that right?
A. That statement that you made in the last - the last statement you made would have been correct; that would have been the way that I would have thought

… …
Q. Mr Slade, what I’m putting to you is that you made no complaint to Mr Gea about these alleged defects because they did not exist ?
A. I would say that was totally incorrect. ” (My emphasis), (T.38)

64    The matter was pursued later in the cross-examination: -

“HEALEY: Q. You asked me to get to the point and of course I am. You didn’t complain to Mr Gea when you had an opportunity up until March 1996 because there were no defects?
A. I would say that was totally incorrect. I had every opportunity, every day of the week, every second of the day to complain to Mr Gea but when you understand Mr Gea’s personality and when - and I’m passing the word yes and no - when Mr Gea rang me very irate that I went to his factory to see what was going on, I’m also a businessman and I also know how to handle people of this calibre. There seems to be no point to argue with a person like this. At the end of the day he is responsible for his work and that is the reason why I didn’t complain.” - (T. 43)

65    In re-examination, Mr Slade was asked: -

“REUBEN: Q. Mr Slade, do you recall that yesterday you were asked some questions by my learned friend to the effect that you never complained about the quality of the job or the lack thereof, notwithstanding that you first became aware of some matters on or about 19 October 1995. Could you give the Court an explanation as to why you did not make a complaint?
A. Yes, I can. I was waiting for Mr Gea to return to install part 2 of the kitchen and also complete part 1 of the kitchen. And I thought that the - at the time, because of my skill, I thought that the defects were simply cosmetic.
(16/6/99, T. 1-2,)

And later: -
“REUBEN: Q. I’m asking you, did you have any other concerns which you did not give in your last answer?
A. Yes, I did.
Q. What were they?
A. That this job was in fact in two parts. Mr Gea was aware of both parts at the time when he came to us on his initial appointment, he knew that I could not continue with the second part of the kitchen for two reasons. One being that the floor in the next room which adjoins the room that Mr Gea worked into, was not prepared. Also that the granite bench top - -
Q. Mr Slade I just want - could I just stop you there. I just want to ask you, when I asked you before you were excused from the Court room?
A. Yes.
Q. And I asked you to give the Court the explanations as to why you did not complain to Mr Gea?
A. Yeah.
Q. About what you perceived to be the defects in the job, and in broad terms you gave evidence to the effect that you expected Mr Gea to come back to do part two of the job, but you - that there was some incompleted parts to part one, which you perceived to be the case?
A. Yes.
Q. And that you thought that the defects were cosmetic?
A. That’s true.
Q. Now is there any other reason why you did not complain?
BENCH: Q. Did you have any other concerns?

REUBEN: Q. Did you have any other concerns?
A. Yes I did, I believed if I complained at the time, I believed that Mr Gea would not return to complete the job.” (T. 2-3)

66    At the conclusion of the defendants’ case, plaintiffs’ counsel tendered two exhibits.

67    At that stage, although it is not recorded on the transcript it is common ground that Mr Reuben informed her Worship that he wished to call Mr Carden. Thereafter the transcript contains the following: -

“DISCUSSION REGARDING FURTHER WITNESS MR CARDEN

EXHIBIT #1 CHEQUE BOOK PAGES TENDERED, ADMITTED WITHOUT OBJECTION

EXHIBIT #12 PHOTOCOPY OF FOUR PAGES TENDERED, ADMITTED WITHOUT OBJECTION.

HEALEY: Your Worship while my friend is looking at those pages, I did have a submission to make to your Worship in the absence of Mr Carden if I may?

BENCH: Mr Carden could you step outside?

HEALEY: Your Worship my proposition is this, and I’ll say it very quickly, your Worship has heard from Mr Slade that the kitchen that Mr Carden photographed in June 1997, this evidence occurred today, was not the same as when it was installed. No further questions were asked by anybody else, but that is the evidence that we state. That is the state of the evidence. We have a report that is based on information from Mr Slade and certainly my cross-examination would go to some of that information being inaccurate that your Worship would see, for example installation of the carcasses et cetera. It would be my ultimate submission that you would not place very much weight on that report because it is made some 20 months after the installation of this. Now your Worship it may be, that’s why I raise it at this stage, that the Court has no choice, but to go through the process of Mr Carden being called and my cross - otherwise I’ll be accused of not being fair to the witness and the case of Browne v Dunne will come in, but I just thought I’d raise it with your Worship, in terms of if your Worship had a view in terms of the weight given the evidence, then that might be a course of ending it today. Otherwise I’m content to cross-examine as your Worship would expect me to do on the reports.

BENCH: Thank you. Mr Reuben do you have a response to that submission?

REUBEN: Well your Worship has heard evidence I think that the kitchen has not been used, that the kitchen, the evidence and the submission that Ms Healey would wish to put is that in some way that what has transpired in the time has affected Mr Carden’s ability to comment on the quality of workmanship. In my submission that’s a matter which needs to be put to the witness before the Court can make any findings as to weight.

BENCH: Well what we heard is that indeed this witness did not carry out any investigation of the kitchen until some very considerable time after 18 October 1995. How can his evidence then assist the Court in relation to the matters which stand to be determined about in these proceedings?

REUBEN: Your Worship the witness is an expert, he can give evidence of - he has extensive qualifications as an expert in relation to carpentry and joinery, he’s qualified to give evidence, and he’s been qualified to give reports under the Fair Trading Act. He has examined the work that has been done by Mr Gea, he has examined the doors, he has examined the doors as they were hung in the kitchen, he’s examined the kitchen with the granite bench top placed on it in situ, he has - it’s not suggested as I understand it or apprehend it that there was anything that would have interfered with that examination of doors such as we have here in Court today, that would cast doubt on the question of whether those doors were in some way interfered with between then and the time of the examination. Your Worship it’s quite properly the subject of expert report, for the expert to comment on the matters that he observed, that he observed in relation to the doors, the method of manufacture, the quality of workmanship. He can give evidence about what is perceived from the wood used, what he did when he looked at a particular door in question. These are matters which the expert can give evidence about in my submission, and that they are contained in his report.

BENCH: Mr Reuben it’s a matter of common sense and common experience that deterioration of structures such as the one that is subject of these proceedings, will take place even if the thing has never been touched over a period of a couple of years, and it is 20 months on the basis of what I heard from your own client today in the witness box between the time when the installation occurred and the time when Mr Carden has a look at it. Now quite clearly anything he says in respect of his observation of the structure at that time does not assist the Court with respect to the condition of the structure at the time when it was installed. Because it is almost two years after the event.

REUBEN: Your Worship in my submission that’s a matter which an expert can give evidence about.

BENCH: Well I’m just telling you it’s a matter about which an expert give no relevant evidence. If he was called in on the day or called in the day after, indeed according to your client he became aware of defects in the work on the day after the installation, but he’s not called in at that time. According to your client who had concerns about the quality of the work right up to Christmas time, and certainly up to March the following year, but this person was not called in at all during the time, he’s called in almost two years after the event, and he simply cannot as a matter of common sense, give evidence which is going to assist the Court about the condition of that structure as at the time that it was installed, he simply can’t do that, it doesn’t matter how much of an expert he is.

REUBEN: Well your Worship could I show you one of the doors?

BENCH: By all means, I saw them the last time.

REUBEN: Now the witness - that these were doors which were hung, on one door which was hung in Mr Slade and Mrs Slade’s property, now it’s evident by looking at this door that there are hole marks that have been filled, that one can see that these have been built, Mr Gea agreed in evidence that these were putty fillers, there’s been suggestion made about the tongue and groove material that’s been placed in the doors, and whether that’s caused some question of buckling on the mouldings on the doors and how that’s been fitted. There are matters concerning the manufacture of the doors and the machining of the doors which the expert can give evidence about by looking at the doors, notwithstanding that some time has elapsed between the time that the doors were so called hung in the premises.

BENCH: And what weight do you imagine that the Court would give to that evidence Mr Reuben? Or what weight would your be inviting the court to give to that evidence, because I can tell you now, that the weight that could be accorded to that evidence would be very very small. It does not assist the Court whatsoever. I don’t know - we don’t know where those doors have been, we can see that they are certainly disjointed now, I don’t know whether they were ever placed on the cupboard, and where they’ve been kept for x amount of time, but whatever evidence Mr Carden can give about the quality of these doors today or when he saw them 20 months after they had been installed, has very little bearing if any at all, and I’m saying to you it has no bearing on the quality of the workmanship at the time.

REUBEN: Well your Worship in my submission an expert can give evidence about the quality of workmanship if he’s qualified to give that evidence which he is. And if he says that he can say that the work was done in a defective fashion, he can give that evidence. Now your Worship’s specifically asked for Mr Carden to be here while Mr Gea was giving evidence, and he was actually introduced into the Court room so he could hear Mr Gea’s evidence on matters which call for comment, and there are matters which Mr Gea gave which was directly based upon the expert report that Mr Carden had filed in the proceedings, which his own counsel took him to. Now for your Worship to suggest that for some reason the Court would not be assisted by the maker of the report, really is beyond something which I understand, because his own counsel, Mr Gea’s own counsel took Mr Gea to the report, asked him to comment on matters. Mr Gea expressed his disagreement, and Mr Carden was here for at least part of that evidence and should be in a position, and no doubt is in a position to give expert evidence about the quality of workmanship.

BENCH: I don’t recollect that we had at that stage the evidence of your client which was given today, that he called on the services of this person 20 months after the installation Mr Reuben. Now that happens to be a fairly significant admission on his part.

REUBEN: Well your Worship has the reports in evidence.

BENCH: Yes I know. I know all of that Mr Reuben, I’m just telling you that your client told us today from the witness box that he didn’t call in this person until 20 months after the event.

REUBEN: Well there was a prior report from Tyrells which has been referred to by—

BENCH: Which is not being relied on as I understand it.

REUBEN: Well not as to the contents of—

BENCH: Not being relied on is it?

REUBEN: Your Worship it’s been relied upon as to the basis of the instructions given to Mr Carden as o the matters that he looked at at the time.

BENCH: So what? The fact of the matter is Mr Reuben as your client told us this very day from that very witness box, he did not call this person in until almost two years after the event, therefore he has already discounted this next witness’s evidence. That’s not my doing, it’s not some fancy that the Court takes Mr Reuben, contrary to your submission a few moments ago, it is something which your client told the Court. Now that is evidence in these proceedings. I’m already telling you that by that evidence there is no point in your calling Mr Carden, because his evidence can be of no assistance to the Court.

REUBEN: Well it seems that you Worship has pre determined the matter having not heard Mr Carden’s evidence.

BENCH: I’m sorry, I am not pre determining the matter. I had determined the matter on the basis of evidence which I have heard given in this Court today. That evidence was from your client, the defendant in these proceedings, and what he told the court I will remind you, is that this person Carden was called in 20 months after 18 October 1995. Now you’d better attend to the list clerk’s office to obtain a date for further hearing.

REUBEN: The report was dated your Worship—

BENCH: I don’t care when the report was dated Mr Reuben, don’t cavil with my ruling any longer thank you I’ve heard enough. What I heard was that he called in this person 20 months after the event. Do you have other witnesses that you wish to call?

REUBEN: No your Worship.

BENCH: Thank you. We will put this matter over for decision, unless ma’am you have anything in reply, yes or no?

HEALEY: No thank you your Worship.

BENCH: Well I can’t make a decision until I’ve heard submissions, we’ll put it over for submissions. You can go to the list clerk’s office and get a date for further hearing.

REUBEN: Your Worship—

BENCH: Don’t cavil with my ruling on a point Mr Reuben. This matter which is worth what, $12,000 at the very outside, and that’s stretching it, has already consumed five entire Court sitting days, however you want to look at it, that is bad economics.

REUBEN: I understand that your Worship—

BENCH: All right now I’m saying to you on the basis of your client’s stated evidence in this Court room this very day, Carden’s evidence is scarcely worth the spit because your client told us all here in this Court room that he didn’t call him in until 20 months after the event.

REUBEN: Well then how is it that his counsel, Mr Gea’s counsel examined his—

BENCH: It is not your position to question me Mr Reuben.

REUBEN: Well I’m asking the question rhetorically your Worship. But it’s a situation that the evidence has been referred to before your Worship, the expert’s reports have been filed, and yet your Worship will not admit the tender of the reports. I’m not sure that they have been tendered.

HEALEY: Your Worship they have been tendered, and I’m not saying don’t tender it, I’m saying I will be submitting on the weight. I agree with your Worship. I wasn’t objecting to the tender but I’ll just be submitting that there won’t be any weight.

BENCH: I have made a ruling in relation to this matter Mr Reuben, I have said to you don’t cavil with my ruling on that, and I have said to you, you will attend to the list clerk’s office to obtain a date for further hearing. When you come back on the next occasion be prepared with your submissions to present to the Court.

REUBEN: Is your ruling then that I’m not permitted to call Mr Carden?

BENCH: I’m saying don’t call Mr Carden, it’s not worth your while nor mine, that’s what I’m saying. Anything he’s going to say in this witness box will not assist the Court, I’ve already indicated that to you, will not assist the Court.

REUBEN: In my view your Worship has pre determined the matter and that’s a submission that I would have to make.

BENCH: That’s rubbish, I have not pre determined any matter, I have heard from your client that Carden was not called in before 20 months or immediately at the time of, or shortly after the installation, 20 months after the event he was called in, now I am not pre determining the matters Mr Reuben, that is the evidence that I heard here in this Court room today. Perhaps you ought to think about the import of it, he’s your witness not mine.

REUBEN: Your Worship in my submission, I’ve spoken to Mr Carden extensively, and there are matters which as an expert he can give in response to the matters given by Mr Gea in commenting upon his report.

BENCH: I’m sorry Mr Reuben but it is for the Court to weigh the evidence given by Mr Gea, not Mr Carden, you may make submissions on Mr Gea’s evidence, but it’s up to the Court to weigh Mr Gea’s evidence, thank you very much.

REUBEN: And it’s up to counsel to call the witnesses.

BENCH: Not if the evidence is not going to assist the Court, you don’t have a right simply to use up Court time by calling irrelevant evidence.

REUBEN: So your Worship--

BENCH: Thank you Mr Reuben, you will attend at the list clerk’s office to obtain a date for further hearing, and on the next occasion you will make your submissions, thank you.”
(T. 42-48.)

68    The matter was adjourned to 15 September 1999 for the hearing of submissions. On that date both counsel referred in their submissions to the Carden reports. In substance, counsel for the plaintiffs submitted that they carried little weight, whilst counsel for the defendants submitted that they carried much weight.

69    At the conclusion of submissions, her Worship adjourned the matter to 15 October 1999 for judgment. For reasons already explained, judgment was in fact delivered on 21 March 2000.

70    Against the background outlined, it is important to note certain aspects of her Worship’s judgment. Her Worship noted, when referring to the pleadings, the terms of the cross-claim without specifically referring to the specific defects alleged by the defendants.

71    After outlining certain aspects of the plaintiffs’ evidence, her Worship turned to the defendants’ evidence and specifically referred to the following passage from Mr Slade’s statement: -

“As at 18 October I did not realise that the work that had been provided was defective as per the experts reports provided in this matter or that the cupboard doors were incorrectly hung and that the woodwork was cracked or that the carcasses had been damaged in the installation, or that the cupboard doors were installed out of alignment. I understood that the Plaintiff would be returning to the site to complete the delivery of stage one and to rectify any problems in relation to installation.”

72    Her Worship then referred to some specific aspects of the evidence of Mr Slade to demonstrate what she contended to be the unreliability of his evidence.

73    The line of reasoning which led her Worship to reject the cross-claim in toto may be discerned from the following passages in her judgment: -

“By October 1995, although he had not mentioned to the Plaintiff that he was unhappy with aspects of the job done, he formed the view that the Plaintiff was misappropriating some of the timber supplied by him.
BSB complaint form completed, indicating that the Defendants had not discussed the complaint with the ‘contractor’ ‘because there was ongoing work to be completed and the matter should have been on completion of work’. Mr Slade told the Court that the document had been completed by his wife.
Further, complaint form notes: ‘the problems associated with stage 1 were not brought to Luis Gea’s attention to date as yet because I felt that the integrity of the tradesmen to rectify the matter was at the end of stage 2’. However, shortly after that the Defendant stated that it was ‘totally incorrect’ that he did not complain to Mr Gea about the alleged defects at the time.”

And later: -

“Further questioned in re-examination as to why he did not complain about the quality of the job, even though he stated he had become aware of it about 19 October, he stated that he was waiting for Mr Gea to install “part 2” of the kitchen, and to complete “part 1”, that, in any event, he thought the defects were simply cosmetic”
Further, he later expounded, he formed the belief that Mr Gea was a very aggressive person. He went on:
“I was quite prepared to wear because of - to keep the peace and continuity of our job to just allow him to do whatever he wanted to do and on completion we would satisfy the remaining problems associated with the kitchens in a nice and peaceful manner.”

In so saying, in my view, the Defendant has destroyed his own case.”

74    The judgment concludes: -

“The Court accepts the Plaintiffs’ evidence and finds as a matter of fact that no complaint was made by the Defendant/Cross Claimant about the work done. Indeed their own evidence refutes that claim.
Again, the Court rejects the evidence of Mr Slade that he
‘provided the [Plaintiff] with a cheque for $2500 which […] covered the amount required by stage one although I had never been provided with any invoice.’ In particular, the Court rejects the Defendants’ evidence that the work was unsatisfactory, and that irreparable damage was caused. The evidence of Mr Slade himself specifically refutes that claim. (My emphasis).
Altogether then the Court is satisfied on the balance of probability that the Plaintiffs have proved their case, and accordingly, verdict and judgment are entered for the Plaintiffs in the amount claimed together with Interest charged in accordance with s.39A of the Civil Claims Act, and Costs to be assessed.
Likewise, the Court is not satisfied on the balance of probability that the Cross-Claimants have proved their case. Indeed, the Court formed the view that the Cross-Claim was prosecuted in bad faith, as a means by which to intimidate the Cross-Defendants and obviate payment of their debt to the Plaintiffs/Cross-Defendants. Accordingly verdict is entered for the Cross-Defendants, with Costs to be assessed.”

75    Her Worship made no reference whatsoever during the course of her judgment to the Carden reports which formed such a significant aspect of the defence and cross-claim. Further, her Worship made no reference to the particular heads of alleged bad workmanship claimed by the defendants in their pleadings and evidence.

76    Her Worship clearly took the view that the defendants’ lack of credibility (particularly that of Mr Slade) destroyed the cross-claim in toto.

77    However her Worship went much further and held that the cross-claim was prosecuted in bad faith, in order to intimidate the plaintiffs and to obviate the payment by the defendants of their debt to the plaintiffs.

78    It must be immediately noted however that (although their credibility was challenged in cross-examination) these serious allegations were never put to Mr or Mrs Slade during the course of the hearing. Thus they were denied the opportunity of responding to them. The defendants contend therefore that they were denied natural justice and procedural fairness.

79    The defendants also contend that they were denied natural justice and procedural fairness in a separate but associated respect.

80    It is contended that her Worship refused to allow defendants’ counsel to call Mr Carden as a witness in their case, because she erroneously formed the view on 16 June 1999 that Mr Carden could give no relevant evidence. She expressed the view that: -

“ Carden’s evidence is scarcely worth the spit because your client told us all here in this Court room that he didn’t call him in until 20 months after the event.”

81    There was debate before this Court as to whether her Worship did in fact refuse to allow Mr Carden to be called as a witness. I am of the view, after due consideration, that this is a fair categorisation of what in fact occurred. .

82    Her Worship specifically said

“I’m saying don’t call Mr Carden, it’s not worth your while nor mine, that’s what I’m saying. Anything he’s going to say in this witness box will not assist the Court. I’ve already indicated that to you, will not assist the Court.”

83    However, in the instant case I do not think anything really turns on this categorisation, despite the forceful submissions by Ms Healey to the contrary. No responsible counsel could have contemplated calling Mr Carden in the circumstances in which Mr Reuben found himself.

84    The defendants were, in my view, clearly entitled to call Mr Carden. His evidence would have been relevant to the question whether the delay of twenty months between the installation of the relevant works and his inspection undermined the validity of his criticisms of the plaintiffs’ workmanship. Further, the defendants were entitled to the benefit of the responses by Mr Carden to Mr Gea’s rejection of his criticisms in the reports. Further, the defendants were entitled to lead Mr Carden’s evidence of an expert nature in relation to matters which had been ventilated during the hearing such as the qualities of timber generally and the quality of the timber provided by the defendants specifically

85    It is not without significance that her Worship expressed the following view in her judgment: -

“Much of the cross-examination of the Plaintiff was based on a misunderstanding of the nature and quality of natural timber, the effects on it of a variety of factors, especially the effect of substantial weight such as granite tops; natural earth movement, and the like.”

Those are all matters upon which Mr Carden could have given relevant evidence.

86    With due respect to her Worship’s views, the consequence of her refusal to allow the defendants to call Mr Carden is that they were denied a fair hearing, and consequently the trial miscarried.

87    This conclusion is reinforced by the fact that her Worship makes no reference in her judgment to the Carden reports, nor to any of the specific matters raised in the defence and the cross-claim by reference to the content of the Carden reports.

88    Indeed, as I have indicated, her Worship went further, expressing the view that the cross-claim was prosecuted by the defendants in bad faith, in order to intimidate the plaintiffs and obviate the payment of their debt to the plaintiffs.

89    This was a serious denial of natural justice as the defendants have become, by the last paragraph of the judgment, the subject of a judicial finding that they had conducted themselves in a disgraceful fashion without ever having been given the opportunity to deal with the allegations inherent in that finding.

90    It must not be overlooked in this context that if Mr Carden’s evidence had been received it may well have supported the credibility of one or both defendants.

91    It is convenient now to refer to certain of the authorities.

92    A particularly relevant authority is Mahon v Air New Zealand Ltd [1984] AC 808.

93    This case arose out of the crash of an Air New Zealand (hereinafter “ANZ”) aircraft into the slopes of Mount Erebus in Antarctica, resulting in the death of all persons on board. The New Zealand Government appointed Peter Thomas Mahon, who was then a Justice of the High Court of New Zealand, to act as a Royal Commissioner to enquire into the crash. Briefly stated, Mahon J found that the dominant cause of the crash was incompetence by ground personnel of ANZ. This finding differed from the conclusion reached by the Chief Inspector of Accidents of New Zealand, that the accident was due to pilot error.

94    In his report, Mahon J found that “palpably false evidence” was given by officials of ANZ as part of a pre-determined plan of deception of the Royal Commission and in an attempt to conceal a series of disastrous administrative blunders. Mahon J described their evidence as an “orchestrated litany of lies” and made an order that ANZ should pay $150,000 towards the cost of the Royal Commission.

95 ANZ applied by motion to the High Court of New Zealand for an Order of Judicial Review of the finding that ANZ officials had entered a conspiracy to commit perjury, and of the costs order. The application, very briefly stated, was based upon the assertion that certain of the alleged misconduct upon which Mahon J had relied had not been put to the ANZ witnesses during the hearing. The motion was removed from the High Court to the Court of Appeal of New Zealand, which held that in making the order for costs, the Judge had acted in breach of procedural fairness: see [1981] 1NZLR 618.

96 Mahon J appealed to the Privy Council which rejected the appeal. The judgment of their Lordships is instructive with regard to the rules of natural justice. The judgment of their Lordships was delivered by Lord Diplock: see [1984] 1 AC 808. At pages 820/821 his Lordship said: -

The rules of natural justice that are germane to this appeal can, in their Lordships’ view, be reduced to those two that were referred to by the Court of Appeal of England in Reg. v. Deputy Industrial Injuries Commissioner, Ex parte Moore [1965] 1 Q.B. 456, 488, 490, which was dealing with the exercise of an investigative jurisdiction, though one of a different kind from that which was being undertaken by the judge inquiring into the Mt. Erebus disaster. The first rule is that the person making a finding in the exercise of such a jurisdiction must base his decision upon evidence that has some probative value in the sense described below. The second rule is that he must listen fairly to any relevant evidence conflicting with the finding and any rational argument against the finding that a person represented at the inquiry, whose interests (including in that term career or reputation) may be adversely affected by it, may wish to place before him or would have so wished if he had been aware of the risk of the finding being made.
The technical rules of evidence applicable to civil or criminal litigation form no part of the rules of natural justice. What is required by the first rule is that the decision to make the finding must be based upon some material that tends logically to show the existence of facts consistent with the finding and that the reasoning supportive of the finding, if it be disclosed, is not logically self-contradictory.
The second rule requires that any person represented at the inquiry who will be adversely affected by the decision to make the finding should not be left in the dark as to the risk of the finding being made and thus deprived of any opportunity to adduce additional material of probative value which, had it been placed before the decision-maker, might have deterred him from making the finding even though it cannot be predicted that it would inevitably have had that result.

97    The principles cited above have, of course, the same force in curial proceedings as in Royal Commissions and other forms of inquiry.

98    It is apt to refer to the following passage from the judgment of the Court of Appeal in Regina v Deputy Industrial Injuries Commissioner, Ex parte Moore: [1965] 1 Q.B. 456 at 490. This is a passage from the judgment of Diplock L.J. (as he then was) sitting as a member of the Court of Appeal.

99    At page 490, his Lordship said: -

“Where, however, there is a hearing, whether requested or not, the second rule requires the deputy commissioner (a ) to consider such ‘evidence’ relevant to the question to be decided as any person entitled to be represented wishes to put before him; (b) to inform every person represented of any ‘evidence’ which the deputy commissioner proposes to take into consideration, whether such ‘evidence’ be proffered by another person represented at the hearing, or is discovered by the deputy commissioner as a result of his own investigations; (c) to allow each person represented to comment upon any such ‘evidence’ and, where the ‘evidence’ is given orally by witnesses, to put questions to those witnesses; and (d) to allow each person represented to address argument to him on the whole of the case. This in the context of the Act and the regulations fulfils the requirement of the second rule of natural justice to listen, fairly to all sides (see Board of Education v Rice [1911] A.C. 179, 182).” (My emphasis).

100    Stead v State Government Insurance Commission (1986) 161 CLR 141, is also relevant to the instant case. The appeal in this matter to the High Court flowed from an action in negligence arising out of a motor accident which was heard in the Supreme Court of South Australia. The only issue before the trial Judge was that of damages. Part of the plaintiff’s claim was for a neurotic condition, which the plaintiff claimed was a direct consequence of the defendant’s negligence. The defendant called a psychiatrist, Dr. Scanlon, who gave evidence to the effect that the accident had nothing to do with the neurotic condition.

101    At the completion of the evidence the plaintiff’s counsel commenced a submission that the trial Judge should not accept Dr. Scanlon’s evidence that the accident had nothing to do with the neurotic condition. This elicited from his Honour the comment:

“Alright. I don’t accept Dr. Scanlon on that. You needn’t go on as to that.”

The appellants counsel understandably did not develop the submission and addressed no further argument on the acceptability of Dr Scanlon’s evidence on the issue of causation.

102    However, in a reserved judgment his Honour ultimately accepted Dr. Scanlon’s evidence on this particular issue, holding that there was no relation between the subject accident and the neurotic behaviour.

103    The Full Court of the Supreme Court of South Australia rejected the appeal, holding that there had been no miscarriage of justice because, had the trial Judge not made the comment which he did, it could not have made any difference to the end result in the proceedings.

104    The High Court upheld the appeal. The Court (Mason, Wilson, Brennan, Deane and Dawson JJ) said that the general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer, and Parker, L. JJ) in Jones v National Coal Board [1957] 2 Q. B. 55 at 67, where their Lordships said: -

“There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the Judge… No cause is lost until the Judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.”

105    It was accepted by the parties before the High Court that there had been a denial of natural justice but the relevance of the decision is that the High Court concluded that all an appellant needs to show is that the denial of natural justice deprived him or her of the possibility of a successful outcome. To negate that possibility it is necessary for the appellate court to find that a properly conducted trial could not possibly have produced a different result.

106    I could not possibly conclude, sitting as an appellate Judge, that if Mr Carden had been permitted to give his evidence it could not possibly have produced a different result. I take into account in this regard that the defendants have not sought to lead evidence in this Court of the evidence which Mr Carden would have given if he had been called in the Local Court.

107    One further matter should be specifically addressed. In her careful address on behalf of the plaintiffs Ms Healey submitted that, to the extent that there may have been a denial of natural justice on the part of the presiding Magistrate (which was not conceded), counsel for the plaintiffs should have asked the Magistrate to discharge herself on the grounds of ostensible bias. This submission was based upon the judgments of the High Court in Vakauta v Kelly (1989) 167 CLR 568. That case is, indeed, authority for the view that by not objecting to remarks by the presiding Judge which demonstrated ostensible bias, a party may waive any right to appeal against an adverse decision on the ground of what had been said at the hearing.

108    In the instant case, a very strong and persistent objection was taken by Mr Reuben to her Worship’s refusal to receive the evidence of Mr Carden. However, Mr Reuben did not go as far (Ms Healey stressed) as to submit that her Worship should discharge herself. Rather, he accepted her ruling, and proceeded with the litigation to its ultimate conclusion which was, of course, wholly unfavourable to his clients.

109    Having carefully re-read the various judgments in Vakauta I am far from persuaded that Mr Reuben’s conduct on this occasion could be construed as a waiver of the impartiality demonstrated in the conduct of this trial by the presiding Magistrate.

110    However, if I am wrong in this view, it is really of no consequence because the denial of natural justice complained of was revived in her Worship’s judgment, in the manner explained in the various judgments in Vakauta: see per Brennan, Deane and Gaudron JJ at 573; per Dawson J at 579; per Toohey J at 588.

111    I would consequently reject the plaintiffs’ submission based upon a lack of an asserted objection by Mr Reuben.

112    Thus the plaintiffs have established a clear case of denial of natural justice and the judgment cannot be allowed to stand. The matter must therefore be remitted to the Local Court.

113    In the event that the parties cannot now resolve their dispute and the matter is heard for a second time, consideration should be given to a question of law which was raised in the appeal.

114    The Statement of Claim is pleaded as a cause of action for work done and materials provided. It is certainly not pleaded as a cause of action based on a quantum meruit.

115    However, counsel for the plaintiffs informed the learned Magistrate at the commencement of the case that the plaintiffs’ case was based on a quantum meruit. Nevertheless no amendments were made to the pleadings.

116    The asserted failure by her Worship to make findings appropriate to a claim in quantum meruit was raised as a ground of appeal in this Court. Further, her Worship’s judgment made no reference at all to the plaintiffs’ claim being based on quantum meruit or considered whether the necessary elements of such a claim had been established. Her Worship appears to have treated the matter simply as a claim for work done and materials provided.

117    There is really no point in considering the detail of this ground of appeal in light of my findings with regard to the denial of natural justice. As the matter will be the subject of a re-trial (unless settled), the question of pleadings will necessarily have to be carefully addressed at the outset of those proceedings.

118 I do not consider that it was obligatory for me to remit this matter to Dr. O’Shane pursuant to the provisions of s 109(d) of the Justices Act 1902 as the Court is effectively granting relief which would have formerly been the subject of a prerogative writ.

119    For the reasons set out above I make the following orders: -

1. The appeal is allowed.

2. The judgment and orders of the learned Magistrate delivered on 21 March 2000 are set aside.

3. The matter is remitted to the Local Court to be dealt with by such Magistrate as the Chief Magistrate nominates.

4. The respondents are to pay the appellants’ costs of these proceedings.

5. The respondents are to have a certificate under s 6 of the Suitors’ Fund Act 1951 .

Last Modified: 01/03/2002