Thompson and Anor v Jedanhay Pty Ltd
[2012] QCATA 246
•27 November 2012
| CITATION: | Thompson and Anor v Jedanhay Pty Ltd [2012] QCATA 246 |
| PARTIES: | Alan Thompson Annette Thompson (Applicant/Appellant) |
| v | |
| Jedanhay Pty Ltd t/as Spraycon (Respondent) |
| APPLICATION NUMBER: | APL051-12 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Richard Oliver, Senior Member Michael Howe, Member |
| DELIVERED ON: | 27 November 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The appeal is refused. |
| CATCHWORDS: | Appeal – procedural fairness – surprise – failure to abide order of the Tribunal – oral evidence refused at hearing – expert evidence – no pleadings in QCAT – the Tribunal not experts decide issues – builder breach of contract specifications – assessment of damages – unreasonable costs of rectification Plaintiff 157/2002 v Commonwealth (2002) 211 CLR 476 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Richard Oliver, Senior Member
In this matter the Appeal Tribunal consisted of Mr Howe, QCAT Member and me. I have had the benefit of reading his reasons in draft. I agree with his reasons, and his conclusions, and the order he proposes.
Michael Howe, Member
Background
In July 2009 Mr and Mrs Thompson engaged Spraycon to build a pool shell for them at their home.
Spraycon built it, but the Thompsons complained that the work had been done poorly and not to plan. They refused to pay for the work.
Spraycon sued them for $15,518.19, the cost of the job. Mr and Mrs Thompson not only opposed their claim, denying Spraycon was due any money at all, but they also counterclaimed for $14,673.17, their claimed costs of rectification.
During hearing there was a dispute about what evidence could be led. On the admissible evidence the learned Member hearing the matter decided the pool shell as constructed was sound, the Thompsons should pay Spraycon for their work and their claim for the costs of remedial work failed. They were ordered to pay $12,611.94 to Spraycon, its claim being reduced by an amount calculated as the savings to the builder by it not building the shell precisely to specification.
Mr and Mrs Thompson now appeal that decision. The issues on appeal may effectively be reduced to three major complaints, and a fourth that should be commented on. This is disregarding the matters of ancillary comment that do not go to any real grounds of appeal.
Excluded Evidence
Both parties had engineers give evidence. Some of the evidence Mr and Mrs Thompson’s engineer proposed to give was not allowed in by the learned Member. That, say the Thompsons, was an error of law. Though not precisely stated as such, the assertion may be taken to be that this was procedurally unfair, and procedural unfairness amounts to an error of law[1].
[1] Plaintiff 157/2002 v Commonwealth (2002) 211 CLR 476 at 489-90.
What took place leading up to the actual hearing on 30 January 2012 is important.
The parties' experts met in conclave, as ordered, and produced a joint report dated 3 February, 2011. At a directions hearing on 25 May, 2011 the Tribunal ordered all statements of evidence of the parties be filed and served on the other party by 14 July 2011. At a directions hearing on 24 August 2011 the Tribunal extended the time for filing statements of evidence to 14 September 2011 and ordered that no party would be allowed to present any evidence at the hearing that was not contained in the statements without providing written justification to the Tribunal.
The matter came on for hearing on 26 September, 2011. On the day however Mr and Mrs Thompson tried to call evidence from a builder. His evidence was not contained in any statement before the Tribunal, and no statement of his evidence had been provided to Spraycon. Spraycon called foul and surprise and the hearing was abandoned.
The Tribunal tried again. It reiterated by fresh order that day that all statements of evidence be filed and exchanged between the parties by 11 November 2011 and again warned that no party would be allowed to present any evidence at the hearing that was not contained in the statements without providing written justification to the Tribunal.
A new date of 30 January, 2012 was set for the hearing.
At the new hearing, an engineer, Mr Lindsay, gave evidence for Spraycon. He had prepared two reports and was also a party to the joint expert report. His evidence was contained in statements of evidence filed and copies served on the Thompsons.
Mr and Mrs Thompson wanted to call their engineer, Mr Smyth, to give evidence. He had been a party to the joint experts report. He had not prepared any other statements however.
The Thompsons wanted Mr Smyth to give additional oral evidence. Mr Smyth had evidently prepared fresh calculations virtually the night before the hearing. Mr Seaton for Spraycon hadn’t needed to ask Mr Smyth any questions on the material he had seen prior to the day. Spraycon again called foul. They said they had again been taken by surprise – again.
The learned Member referred Mr Thompson to the orders of the Tribunal requiring all statements of evidence to be filed and exchanged before hearing. She refused to allow the additional evidence in save she allowed Mr Smyth to give evidence on one narrow evidentiary point.
Mr and Mrs Thompson now maintain in this appeal that there was nothing novel about what Mr Smyth would have said other than he would have given fresh calculations on the overstressing of the concrete reinforcing in the pool shell. Mr Smyth had already mentioned this in the compulsory conference, they say. Everybody, including Mr Lindsay had been present for that, they say. Leaving aside the issue about confidentiality of discussions in compulsory conferences, Mr and Mrs Thompson, in a second set of submissions to the Appeal Tribunal, say they now believe Spraycon was aware on the day of the problems they, the Thompsons, had with the further evidence of Mr Smyth, and they took an unfair advantage on the day in taking issue with the problematical evidence. Accordingly, they say, it was unfair not to let Mr Smyth give the oral evidence. Their submission is somewhat hard to follow.
Mr and Mrs Thompson ignored the directions of the Tribunal made on 24 August, 2011 and 26 September, 2011. The orders were clear. One wonders what might be said to make them any clearer. All evidence had to be reduced to writing and a copy filed in the registry and a copy given to Spraycon before the hearing. The orders were made to prevent surprise.
Mr and Mrs Thompson were ordered not once, but twice to make sure all the evidence they wanted to rely on at hearing was reduced to statement form filed and a copy given to the other party.
Further, the hearing on 26 September, 2011 was abandoned because Mr and Mrs Thompson ignored that direction. It is inconceivable that they did not understand what to do, particularly given they caused the first hearing to abort on precisely the same point.
Additionally, the proposed witness was an expert witness. By Practice Direction 4 of 2009, which Mr Smyth said in his evidence he was familiar with, it was the required practice of the Tribunal that expert evidence be based on written reports filed and given to the other party. It says that very clearly in the Practice Direction.
QCAT does not use pleadings to narrow the issues. The parties’ cases and the evidence a party will need to prepare for a hearing is based on the statements of evidence filed by the parties. If that is not done a party may be surprised at the hearing and that is not fair.
It is a fundamental requirement of procedural fairness that any person appearing be given appropriate notice of the case he or she must meet. Appropriate prior notice allows a party to prepare and present a case effectively. Inadequate notice either in respect of time or substance prevents a party from being able to do so and is a breach of procedural fairness[2].
[2] Lyons v Building Services Authority & Anor [2011] QCATA 240 at [13].
The Tribunal controls its own process, not the parties.[3]
[3] Stainton v Footlong Subs Employment Services Pty Ltd [2011] QCAT 186.
There was nothing unfair in requiring Mr and Mrs Thompson to comply with the orders of the Tribunal as all other parties are obliged to do. What was required of them was clearly set out in the orders. It is not acceptable for them to now say they didn’t understand what was necessary. They must fail on this aspect of the appeal.
The Expert Evidence
Mr and Mrs Thompson have filed additional affidavit material in this appeal. There is no suggestion that the additional evidence could not have been brought forward at the time of hearing if brought forward in the appropriate way. Some of it is the evidence that the learned Member correctly rejected on the ground set out above.
In particular their engineer, Mr Smyth, has prepared an additional report concerning the engineering issues. That additional report is dated 19 March, 2012, nearly two months post-hearing.
Many of the issues raised in the appeal by Mr and Mrs Thompson are simply an attempt to re-litigate the issues already determined at hearing. That isn’t what an appeal is for. What they must do in this appeal is point to some error of law on the part of the learned Member. That error may be that no reasonable person could have reached the conclusions reached by the learned Member on the evidence before her. But the Appeal Tribunal does not substitute its own decision on the evidence. An appeal is not an opportunity for the parties to reargue their trial positions[4].
[4] Snell v Morgan [2011] QCATA 316 at [10].
Whilst an expert expresses an opinion about a matter within his expertise, it is the responsibility of the Tribunal to weigh and determine the conclusions to be reached from such evidence. The task of determining the issues at hearing always remain the responsibility of the Tribunal[5] conducting the hearing.
[5] Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 per Hayden J.
The learned Member considered the evidence of the engineers for both parties. She preferred the evidence of Mr Lindsay, the engineer for Spraycon, to that of Mr Smyth and concluded in end result that the pool shell was structurally sound. That was a conclusion open to her on the evidence presented.
There is nothing to indicate the conclusion of the learned Member was against the weight of evidence. Accordingly the appeal fails on this point.
Breach of the Terms of Contract by the Builder
Whilst the pool was found to be structurally sound, the learned Member concluded the pool was not constructed in accordance with the approved plans. Therefore Mr and Mrs Thompson say they should have been awarded damages sufficient to put them in the position they would have been in had the contract been performed. I take it what they mean is their claimed costs of rectification of $15,518.19 should have been awarded to them as the costs necessary to give them exactly the pool to the exact specifications they had contracted for.
Mr and Mrs Thompson also submit that the learned Member erred in law in deciding that they sought only costs of rectification when they also sought relief from payment. In fact the decision they got gave them exactly that, relief from payment for that part of the work that wasn’t done.
The learned Member found four points where the completed pool shell varied from the specifications. She concluded on the evidence that such variations were not fundamental to the efficacy of the shell. Accordingly, Mr and Mrs Thompson had got what they had contracted for, a pool shell, but they had paid too much for what they had got. The learned Member decided Spraycon's charges should be reduced by $500. That amount represented relief from payment for those aspects of the shell that were not supplied or lacking the standard agreed[6]. The learned Member’s reasoning in reaching that value was not unreasonable in the circumstances. She had only the evidence led by the parties to act on and the Thompsons had not specifically addressed the issue.
[6] Hungerfords v Walker (1989) 63 ALJR 210.
There was nothing wrong with the basis of the assessment of damages. The costs of "rectification" proposed by Mr and Mrs Thompson were unreasonable. The difference between what was stipulated in the contract and what they got was not significant according to the expert evidence accepted by the learned Member.
Breach of contract damages is, as generally all damages, based on calculating the loss suffered as a result of the parties' failure to perform.
There is a qualification to the rule that the measure of damages recoverable by a building owner for the breach of the building contract is the difference between the contract price of the work and the cost of making the building conform to the contract. The qualification is that the work undertaken to produce conformity must be work that it is reasonable in all the circumstances to have done[7]. That must be a reasonable course to adopt.
[7] Bellgrove v Eldridge (1954) 90 CLR 613 at 618.
Where remedial work necessary to produce conformity to contract is an unreasonable method of dealing with the situation, the true measure of the building owner’s loss is the diminution in value caused by the departure from plans and specifications, or defective workmanship[8].
[8] Bellgrove at 619.
What remedial work is necessary and reasonable in any case is a question of fact. In the present case, given the finding that the pool was structurally sound, Mr and Mrs Thompson's claim to $15,518.19 to rectify the minor departures from plan and specifications was unreasonable and the course adopted by the learned Member entirely appropriate.
QBSA
Finally, it is appropriate to consider Mr and Mrs Thompson’s submission that the learned Member erred in law in drawing an adverse inference against them by saying that they ought to have waited for amended plans and complained to the Queensland Building Services Authority when there was no justification for so holding.
The learned Member did make comment on these points, however the comments were directed at the unnecessary expensive remedial work undertaken by Mr and Mrs Thompson and was suggesting that perhaps that unnecessary work could have been prevented if advice from the QBSA had first been sought and approved plans had been held by both builder and owner. The statements did not taint or affect the conclusion as to structural integrity of the pool shell which was the basis of the learned Member’s decision, even had they not been warranted, which in the circumstances they probably were.
The appeal should be refused.
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