Tom Builder Pty Ltd v Duong
[2012] QCATA 167
•3 September 2012
| CITATION: | Tom Builder Pty Ltd v Duong [2012] QCATA 167 |
| PARTIES: | Tom Builder Pty Ltd |
| v | |
| Quan Duong |
| APPLICATION NUMBER: | APL160-12 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Senior Member James Allen, Member |
| DELIVERED ON: | 3 September 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | [1] Leave to appeal granted. [2] Appeal allowed. [3] Tom Builder Pty Ltd will file in the Tribunal 2 copies and give to Quan Duong one copy of: (a) Tom Builder Pty Ltd’s statement of evidence, which must be page numbered; (b) The statement from each witness to give evidence for Tom Builder Pty Ltd at the hearing including any experts; and (c) Any documents referred to in a statement of evidence which must be identified, explained and attached to the appropriate witness statement by 4:00pm on 24 September 2012. [4] Quan Duong will file in the Tribunal 2 copies and give to Tom Builder Pty Ltd one copy of: (a) Quan Duong’s statement of evidence, which must be page numbered; (b) The statement from each witness to give evidence for Quan Duong at the hearing including any experts; and (c) Any documents referred to in a statement of evidence which must be identified, explained and attached to the appropriate witness statement by 4:00pm on 15 October 2012. [5] No party will be allowed to present any evidence at the hearing that is not contained in the statements without justifying the need for such additional evidence to the Tribunal. [6] Unless the Tribunal otherwise orders all witnesses must attend the hearing in person for cross examination. Any application for a witness to attend the hearing by a remote means or by remote conferencing must be made prior to 14 days before the hearing. [7] The application is listed for a directions hearing in Brisbane on a date to be fixed. |
| CATCHWORDS: | APPEAL – BUILDING DISPUTE – where appellant failed to attend hearing – whether proper notice of hearing – whether tribunal should accept new evidence – measure of damages – where homeowner demolished building in anticipation of building contract commencing – where building did not commence – whether cost of demolition recoverable from builder – where homeowner paid deposit – whether deposit recoverable – where homeowner connected electricity for builder – whether cost of connection recoverable Queensland Civil and Administrative Tribunal Act2009, ss 92, 137 Robinson v. Harman[1848] EngR 135 Underwood v Queensland Department of Communities (State of Queensland) [2012] QCA 158 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
Mr Duong owned a house in South Brisbane. He wanted to demolish the house and build three townhouses on the land. He signed a building contract with Tom Builder Pty Ltd for the construction of the townhouses in March 2010.
Mr Duong understood that construction would be finished by 28 October 2010. On 11 December 2010, he terminated the contract on the grounds that Tom Builder had suspended or abandoned the works.
Tom Builder started proceedings in the tribunal in March 2011, claiming a reasonable amount of expenses incurred under the contract. That seems to be the end of Tom Builder’s active involvement in the proceedings. Mr Huynh, the sole director of the company did not attend the compulsory conference. Tom Builder did not file material in compliance with tribunal directions, even though the tribunal granted an extension of time for that purpose.
Because Tom Builder had not filed material in compliance with a tribunal direction dated 20 October 2011, its claim was dismissed and the hearing proceeded only on Mr Duong’s counterclaim for loss he suffered through breach of contract. No one on behalf of Tom Builder appeared at the hearing of the dispute. The learned Member heard some brief submissions and then, effectively, determined the dispute on the papers.
Mr Huynh says that the learned Member should not have been satisfied that Tom Builder was properly notified of the hearing. He says that the learned Member erred in his finding about when the works were to be completed. He also says that the amount awarded to Mr Duong does not represent the actual losses he suffered.
In support of its application for leave to appeal, Mr Huynh has, at last, filed an affidavit.
The issues for determination by the appeal tribunal are:
a) Whether we should accept the evidence contained in Mr Huynh’s affidavit filed in the appeal proceedings.
b) Whether Tom Builder was properly notified on the date for hearing.
c) Whether the learned Member erred in his findings that the works were to be completed by 28 October.
d) Whether the learned Member erred in finding that Mr Duong had suffered loss through an act or omission of Tom Builder.
Should the appeal tribunal accept the evidence contained in Mr Huynh’s affidavit?
This issue was recently considered by the Court of Appeal[1] in a case where the appeal tribunal had applied the test found in s 137 of the Queensland Civil and Administrative Tribunal Act2009:
…the party would suffer a substantial injustice if the proceeding was not reopened because significant new evidence has arisen and that evidence was not reasonably available when the proceeding was first heard and decided.
[1]Underwood v Queensland Department of Communities (State of Queensland) [2012] QCA 158.
Muir JA accepted that this test[2]:
… as a general proposition, is a useful enough guide for the Appeal Tribunal to apply on an application for leave, but it would not be correct in law for the Tribunal to fetter its discretion by rigidly applying a test which expressly applies to proceedings at first instance but not to appeals.
[2] At [39].
The material that Mr Huynh wants to put before the appeal tribunal is not new. If Tom Builder had complied with the directions of the tribunal, all of this information could have been before the learned Member at the hearing. In the absence of an exceptional circumstance, we can see no reason why Tom Builder should be allowed to rely on this evidence.
Mr Huynh says that there are exceptional circumstances. He says that his wife died in December 2010 and that around the same time, his mother became very ill. Because of these two matters, Mr Huynh says that he was preoccupied with family matters and did not give the tribunal proceedings much attention in 2011. He also states that he was living in Vietnam for significant periods of 2011 and early 2012. In particular, Mr Huynh says he was in Vietnam on the date of the compulsory conference and when the notice of hearing was sent.
While we have some sympathy for Mr Huynh’s personal circumstances, we are not persuaded that they amount to exceptional circumstances that would justify the receipt of new evidence at this late stage. Mr Huynh has not told the appeal tribunal why he needed to stay in Vietnam for such long periods of time. He has not explained why he did not make arrangements for someone to look after the company’s affairs while he was away. He has not explained why he did not give the tribunal an alternative address for the service of notices. He has not explained why he applied for an extension of time for compliance with directions of 12 October 2011 but did not then advise the tribunal of an alternative address for service of documents.
The evidence Mr Huynh wants to put before the tribunal was reasonably available to him at the time of the hearing. He has not shown any good reason to allow that evidence at this late stage. We will not rely on his affidavit when considering the application for leave to appeal.
Was Mr Huynh properly notified of the date for hearing?
Mr Huynh says that the only notification of the time and place for hearing was the tribunal’s notice of 19 January 2012. He says that he could not have received the notice at that time because he was in Vietnam and that this is a breach of the tribunal’s obligation[3] to give notice.
[3] Section 92 Queensland Civil and Administrative Tribunal Act 2009.
It is not for the tribunal to second-guess whether a party will be at the address for service at a particular time. As we have previously noted, if Mr Huynh knew that he would be absent for a significant period of time, it was up to him to make alternative arrangements. The notice was sent to the address for service. That is sufficient for the tribunal’s purposes.
Mr Huynh also complains that there was only one attempt to notify Tom Builder of the date for hearing. Mr Huynh says that this was not enough, given the tribunal knew that Mr Huynh’s wife had died and that he was visiting his sick mother in Vietnam.
The information about Mr Huynh’s personal circumstances was revealed in an application in October 2011. The tribunal had no way of knowing that these difficulties continued unless Mr Huynh informed the tribunal. He did not do so. Once again, it is not for the tribunal to make inquiries about a party’s circumstances. Similarly, there was no reason for the tribunal to send anything other than its normal hearing notice, once, to the parties involved.
We are satisfied that the tribunal has given notice of the hearing as required.
The date for completion of the works
At the hearing, the learned Member had a copy of a residential building contract schedule signed by both parties. The date for practical completion is nominated as 28 October 2010. The learned Member accepted that this was the date for practical completion.
Mr Huynh says that the date for practical completion was 180 days from the date of commencement and that the date for commencement was the later of 28 March 2010 or 10 days after Tom Builder received the necessary approvals. He says that Tom Builder never received approvals, therefore the contract never commenced and the learned Member erred in accepting that the date for completion was 28 October 2010. Mr Huynh relies on clause 8 of the general conditions of contract.
There are two problems with this argument. The first is that Mr Duong says he has exhibited the whole contract to his statement of 21 September 2011 and the general conditions of contract are not included as part of that document. While that may seem a little odd, it might be explained by the fact that both Mr Duong and Mr Huynh were of Vietnamese origin and neither was fluent in English. In any event, we are not persuaded that the general conditions of contract formed part of the contract between Mr Duong and Tom Builder.
The second problem with Mr Huynh’s argument appears on the face of the document itself. Item 9 – the date for commencement – states that it is either a fixed date or to be determined by clause 8. If the commencement date is to be determined by clause 8, the parties are required to “Tick if applicable”. The parties did not tick the relevant box. Instead, they inserted a specific date, which was 14 days from the date the contract was signed. It is clear that the parties intended the contract to commence on 28 March 2010. The learned Member was correct in finding that the date for commencement was 28 March 2010 and, therefore, that the date for practical completion was 28 October 2010.
Did Mr Duong suffer loss through an act or omission of Tom Builder?
The learned Member ordered that Tom Builder pay Mr Duong $39,636.21. That amount was made up by a deposit of $20,000, $14,190 for demolition of an existing dwelling on the property, $4,290 for asbestos removal, and $1,156.21 for an electricity connection. The learned Member has not given reasons for his assessment of Mr Duong’s loss and damage.
Mr Huynh says that the costs of demolition and asbestos removal: were not part of the contract; were paid to a third party; and were paid for work carried out for which Mr Duong received a benefit. He also says that the demolition works enhanced the value of Mr Duong’s property.
The learned Member was alive to this argument at the hearing. He asked Mr Duong’s representative why Mr Duong should be entitled to recover the cost of the work. The response was[4]:
It could be argued that he has benefited from that, but the demolition work was supposed to be a precursor to the building of three residences for which we obtained approval. He might have obtained some benefit from demolition to include the block of land but at the same time he paid that for (sic) in the expectation that the building work could proceed, so he only paid for that on the understanding that the building work would carry on. It wasn’t demolition for its own sake. He really didn’t wish to have an empty block of land which he has since sold, so he has really obtained no benefit from that.
[4] Transcript, page 4 at lines 32-43.
Mr Duong now argues that his position is analogous to the plaintiff’s position in Commonwealth v Amann Aviation Pty Ltd[5] in that, because he was unable to prove the value of the benefit expected from the performance of the contract, he is entitled to recover the expenditure incurred in reasonable reliance on the contract being performed.
[5] (1991) 174 CLR 64.
The Chief Justice and Dawson J, in a joint judgment, expressly stated[6] their comments were merely a restatement of the general rule[7]:
…that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed".
[6] At [27].
[7] Robinson v. Harman[1848] EngR 135.
Their Honours also stated[8], however, that the corollary to the general rule is that:
… a plaintiff is not entitled, by the award of damages upon breach, to be placed in a superior position to that which he or she would have been in had the contract been performed.
[8] At [28].
Mr Duong’s position is very different from the facts in Commonwealth v Amann. In that case, the plaintiff had purchased aircraft on the basis that it had won a Commonwealth contract for aerial surveillance. The aircraft could not be sold for anywhere near the purchase price and the Commonwealth had argued that Amann suffered no loss because, had it performed the contract, it would have done so at a loss. There was no suggestion that Amann had accrued a benefit in preparing itself for the performance of the contract.
Mr Duong always intended to demolish the dwelling on his land.[9] Demolition necessarily involved the removal of asbestos. He may have intended a different time frame for the work but the cost of demolition must have been within his contemplation. If Tom Builder had performed the contract, Mr Duong would have spent the money demolishing the dwelling. By awarding damages to Mr Duong for this amount, the learned Member has placed Mr Duong in a better position than he would have been in if the contract had been performed.
[9] Transcript page 3 at line 6.
We find that the learned Member did err in ordering Tom Builder to pay the cost of demolition and asbestos removal.
In addition, Tom Builder argues that Mr Duong should not be entitled to recover the deposit paid because Tom Builder has expended that money in obtaining architectural, engineering, landscaping, sewage, stormwater and hydraulic plans and a building approval. He has now provided copies of invoices which show an expenditure of $29,062.05 on these items.
We have considered the arguments of both parties about the capital loss on the sale of the land and the alternative measures of damages that might be available to Mr Duong. None of that evidence was available at the hearing.
The learned Member cannot be called into error if he did not know that Mr Huynh had incurred costs in the performance of the contract. However, this was a claim for damages, not a debt due. The learned Member was required to satisfy himself that the damages claimed were properly claimed by examining the evidence. Because the learned Member did not give reasons for his decision, and did not question Mr Duong’s representative at the hearing, we are not persuaded that the learned Member was able to be satisfied that the amounts claimed were properly claimed.
The application for leave to appeal does not directly challenge the dismissal of Tom Builder’s claim but it is implicit in the submission “there is more than a reasonable prospect that [Tom Builder] will obtain substantive relief”.
Tom Builder’s claim was dismissed through its failure to comply with the tribunal’s directions. Although the learned Member formally dismissed the claim in his decision of 1 March 2012, the effect of the directions of 20 October 2012 was that the claim was dismissed in November 2011. This aspect of the application for leave to appeal has been filed too late.
Conclusion
Leave to appeal will ordinarily only be granted where there is some question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage; or, there is a reasonably arguable case of error in the primary decision and a reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is: is leave necessary to correct a substantial injustice to the applicant, caused by some error?
We have found that there is a reasonably arguable case of error by the learned Member in that he found that the cost of demolition and asbestos removal was a loss to Mr Duong. Correcting that error will reduce the amount that Tom Builder must pay to Mr Duong by $18,480. Further, we are not satisfied that the learned Member adequately addressed the issue of damages. Therefore, it is appropriate to grant leave for appeal, allow the appeal, vacate order 2 of the learned Member’s decision and remit the dispute for hearing subject to the following orders:
1. Tom Builder Pty Ltd will file in the Tribunal 2 copies and give to Quan Duong one copy of:
(a)Tom Builder Pty Ltd’s statement of evidence, which must be page numbered;
(b)The statement from each witness to give evidence for Tom Builder Pty Ltd at the hearing including any experts; and
(c)Any documents referred to in a statement of evidence which must be identified, explained and attached to the appropriate witness statement by 4:00pm on 24 September 2012.
2. Quan Duong will file in the Tribunal 2 copies and give to Tom Builder Pty Ltd one copy of:
(a)Quan Duong’s statement of evidence, which must be page numbered;
(b)The statement from each witness to give evidence for Quan Duong at the hearing including any experts; and
(c)Any documents referred to in a statement of evidence which must be identified, explained and attached to the appropriate witness statement by 4:00pm on 15 October 2012.
3. No party will be allowed to present any evidence at the hearing that is not contained in the statements without justifying the need for such additional evidence to the Tribunal.
4. Unless the Tribunal otherwise orders all witnesses must attend the hearing in person for cross examination. Any application for a witness to attend the hearing by a remote means or by remote conferencing must be made prior to 14 days before the hearing.
5. The application is listed for a directions hearing in Brisbane on a date to be fixed.
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