Ugwumba and anor v Shance Constructions Pty Ltd ACN 119 533 532
[2019] ACAT 29
•4 March 2019
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
UGWUMBA AND ANOR v SHANCE CONSTRUCTIONS PTY LTD ACN 119 533 532 (Civil Dispute) [2019] ACAT 29
XD 854/2017
Catchwords: CIVIL DISPUTE – extended jurisdiction of the Tribunal – nature of an agreement to extended jurisdiction – claim subsequently enlarged beyond the scope of the claim when agreement given – consideration of appropriate jurisdiction for claim and counter-claim with same factual issues
Legislation:ACT Civil and Administrative Tribunal Act 2008 ss 18, 21
Building Act 2004 s 42
Tribunal:Senior Member A Anforth
Date of Orders: 4 March 2019
Date of Reasons for Decision: 4 March 2019
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 854/2017
BETWEEN:
ISAAC UGWUMBA
First Applicant
CHIZOBA UGWUMBA
Second Applicant
AND:
SHANCE CONSTRUCTIONS PTY LTD
ACN 119 533 532
Respondent
TRIBUNAL:Senior Member A Anforth
DATE:4 March 2019
ORDER
The Tribunal orders that:
1.There is no agreement between the parties for the Tribunal to exercise its extended jurisdiction in relation to the applicants’ claim as presently framed.
2.The matter is listed for directions on Tuesday 26 March 2019 at 10:30am.
………………………………..
Senior Member A Anforth
REASONS FOR DECISION
Summary
1.This matter concerned a dispute between the homeowners (applicants) and the builder (respondent). The homeowners alleged a range of building defects which the builder denied.
2.The homeowner commenced proceedings in the tribunal in 2017 and claimed the maximum amount permitted of $25,000. At an early point in the process, the parties reached agreement that the tribunal could exercise its extended jurisdiction to hear and determine the claim even if the amount in question exceeded $25,000. There was no specific increased limit agreed, but the nature of the claim and documents filed at the time of the agreement suggested that the claim may be as high as $31,800.
3.After the agreement for the extended jurisdiction was reached, the applicants enlarged their claim to $188,500 plus fees and costs. The respondent objected to this course of action and said it never agreed to the tribunal hearing a claim of this magnitude. The respondent indicated that it intended to lodge its own counter-claim that was also likely to exceed the tribunal’s jurisdictional cap and that this counter-claim would not be lodged in the tribunal.
4.The Tribunal had to determine this jurisdictional dispute before the matter could proceed.
5.For the reasons given below the Tribunal finds that there was no true agreement between the parties for the applicants’ claim as presently framed to proceed in the tribunal.
History of proceedings in the tribunal
6.On 17 July 2017 the applicants lodged a claim with the tribunal claiming $25,000 for building defects.[1] The applicants annexed:
(a)particulars of their claim and the rectification and damages sought;
(b)invoices rendered by the respondent;
(c)email correspondence between the parties; and
(d)the building contract and floor plans.
[1] Exhibit A1
7.On 19 July 2017 the applicants emailed the tribunal asking for an expedited processing of their claims. The applicants said that they were in temporary paid accommodation, a new baby was due, and their children were being inconvenienced. The construction was apparently in its ‘last stage’ and if the present dispute was dealt with in the next few weeks the applicants could move into their new home.
8.On 14 August 2017 the respondent filed its response.[2] It contained no details of the respondent’s case beyond annexing emails and letters between the parties.
[2] Exhibit R1
9.On 11 September 2017 the matter came before a differently constituted tribunal. The applicants appeared in person and Mr Ayat (director of the respondent company) appeared for the respondent. The tribunal made orders by consent of the parties for:[3]
(a)the extended jurisdiction of the tribunal under section 21 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) to apply;
(b)the respondent to complete the outstanding work by 30 October 2017 and a Certificate of Occupancy to then issue;
(c)abandonment of certain items of the applicants’ claim; and
(d)the applicants to pay $10,308 in satisfaction of all claims by the respondent except for the kitchen, laundry and appliances (invoice #446).
[3] Exhibit A8
10.A dispute then arose between the parties concerning the discharge of these orders.[4] On 7 November 2017 the first applicant emailed the tribunal advising that: the respondent had not complied with the orders of 11 September 2017; the applicants had not received any correspondence from the respondent; and they were experiencing “a huge financial burden (rent, mortgages, etc), inconvenience and frustrations, and prevailing uncertainty around date of completion.”[5]
[4] Exhibits A9 and A11
[5] Exhibit A11
11.The applicants requested that the dispute be resolved in its entirety at the upcoming conference on 16 November 2017.[6]
[6] Exhibit A11
12.On 15 November 2017 the first applicant emailed the tribunal advising that the respondent had provided a Notice of Practical Completion[7] with an account for $37,201 but had refused the applicants the right to inspect.
[7] Exhibit A12
13.On 16 November 2017 the matter came before the same differently constituted tribunal. The following orders were made:
In full and final consideration of and in order to settle all issues between the parties, the parties agree to the following:
1. The house inspection by the applicant, the respondent and Handovers.com Pty Ltd, pursuant to clause 23.2 at [sic] the contract dated 5/1/2016 shall be conducted on 21 November 2017 at 12:15pm.
2. The applicants shall give to the respondent, a list of defective or unfinished work, in accordance with clause 23.2 of the contract dated 5/1/2016 on or before 22 November 2017 at 5:00pm.
3. Should the applicants fail to provide the list as set out in Order 2 above, the applicants shall pay the respondent's final invoice, in the amount of $37,201.00 by 27 November 2017 at 5:00pm.
4. The respondent shall complete the work required by the list of defective and unfinished work, by 1 December 2017. However providing that any outstanding work has been arranged for and a time is set for the doing of the work by the respondent, this deadline can be extended to 4 December 2017.
5. When the respondent has rectified the listed defective or unfinished work necessary to reach the stage of practical completion, in accordance with the contract dated 5/1/2016, the builder must notify the applicants.
6. The applicants shall pay to the respondent the final invoice amount of $37,201.00 within 5 days of receiving the notice for the respondent in Order 5 above.
14.A dispute then arose concerning the alleged ‘practical completion’.[8]
[8] Exhibits R2 and A14
15.On 6 December 2017 the applicants filed an Application for Interim or Other Orders to set aside the previous orders and for the matter to be urgently re-heard. In that application the applicants alleged that they had fully complied with the tribunal’s orders but the respondent had not. In the application, the applicants said their family was “on the verge of homelessness” as they were required to vacate their current accommodation on 10 December 2017. The applicants annexed a report of 21 November 2017 from Handovers.com Pty Ltd, building inspectors, outlining the various defects in the building. The report expressed the view that practical completion had not been obtained and that the applicants could not live in the house whilst rectification work was undertaken.
16.The matter was listed before the presently constituted Tribunal on 8 December 2017 at 4pm. The applicants appeared in person. There was no appearance of the respondent on that date. The matter was adjourned to 12 December 2017.
17.On 12 December 2017 the applicants appeared and Mr Ayat appeared for the respondent. The applicants advised that they would be homeless within days.
18.The respondent indicated its disagreement with the report from Handovers.com and that it had no intention of arranging for the certification of the work or the issue of the Certificate of Occupancy until it was paid the outstanding account for $37,201. Only then would possession be given to the applicants.
19.After discussion the following orders were made by consent. Under these orders, the applicants would obtain access to their home before their eviction from their current accommodation, the respondent would be paid for the outstanding work and the issue of the quality of the work would remain open for resolution in the near future, as follows:
1. The applicant is to pay the respondent $37,201.00 on 13 December 2017.
2. Upon receipt of the money, the respondent is to have a certifier attend on 13 December 2017 and issue all necessary certifications.
3. Upon the issue of the certifications, the respondent is to give over possession of the premises to the applicant.
4. The outstanding dispute over defects is to be resolved by the Tribunal.
5. The parties are to give an MBA approved expert report to the Tribunal on the defects as soon as possible - the cost of the expert is to be shared by the parties.
6. The matter will then be listed for hearing on the issue of the defects.
7. The matter is listed for directions and progress on Friday 9 February 2018 at 10:00 am.
20.On 8 February 2018 the applicants emailed the tribunal and advised that they had paid the $37,201 to the respondent. It was said that the respondent had refused to pay its half of the joint report fee to Peak Consulting who were not prepared to release their report until paid. The applicants said that they had paid the whole of the fee and sought recovery from the respondent of half that cost.
21.On 8 February 2018 the parties jointly filed a report from Peak Consulting relating to the defects.[9]
[9] Exhibit A18
22.On 9 February 2018 both parties again appeared before the Tribunal. The applicants advised that they had moved into their home and so some of the urgency had been removed from their circumstances. The applicants indicated their intention to press for rectification in line with the report from Peak Consulting.
23.The respondent indicated that it may withdraw its previous consent to the extended jurisdiction of the Tribunal under section 21 of the ACAT Act.
24.The respondent tendered a document from Certified Building Solutions dated 13 December 2017 which declined to certify that the building complied with section 42 of the Building Act 2004.[10]
[10] Exhibit R3
25.Orders were made for the respondent to have all work done necessary for the issue of building certification and a Certificate of Occupancy by 26 February 2018, and to pay half the Peak Consulting account.
26.The respondent was given to 10 March 2018 to take legal advice and advise whether any application was to be made to withdraw its consent to the extended jurisdiction of the Tribunal. The matter was adjourned to 16 March 2018.
27.On 16 March 208 there was no appearance on behalf of the respondent. The matter was listed for hearing on 19 June 2018. Orders were made for the parties to file and serve any further documents or submissions relied upon. An order was further made that the matter proceed to hearing in the extended jurisdiction of the tribunal.[11]
[11]Exhibit A20
28.On 14 May 2018 the applicants filed their documents and submissions via their newly appointed solicitor, Mr Pasi of Prudential Legal Solutions. Annexed were a range of documents including a quote from Konstrukt Building Group Pty Ltd for the rectification work.
29.The applicants further enlarged and defined their claim to be $180,500 plus tribunal filing fees and legal costs, comprising:
(a)$139,250 for rectification work;
(b)$27,000 for the costs of the applicants’ alternative accommodation;
(c)$14,250 in liquidated damages;
(d)$150 for the Tribunal filing fee;
(e)$148 for the Tribunal hearing fee; and
(f)$2,600 for legal costs.
30.On 18 June 2018 the applicants filed a further statement[12] that included the amount of the claim set out above and a report from MPR Constructions for rectification costs of $144,250.
[12] Exhibit A22
31.On 19 June 2018 Mr Pasi appeared for the applicants and Mr Herrald, solicitor, appeared for the respondent. Mr Herrald indicated the respondent’s intention to file a cross-claim.
32.There was discussion about the extended jurisdiction issue. Mr Herrald said that the respondent should not be taken to have agreed to the applicant’s claim as presently defined. At the time the consent was originally given before the previous differently constituted tribunal, the claim had only been $25,000, with reference to a dispute up to or around $31,800, compared with the present claim for $180,500.
33.The matter was stood down for the parties to have discussions on the jurisdictional issue. There was no agreement reached. Orders were made for the parties to advise the tribunal within seven days if either party sought the revocation of the orders for the matter to proceed in the extended jurisdiction of the tribunal, in default of which the matter would proceed to hearing.
34.On 25 June 2018, Mr Pasi advised that the applicants wished to continue in the extended jurisdiction of the tribunal. On 26 June 2018 Mr Herrald advised that the respondent sought to have the extended jurisdiction order revoked. They each gave their reasons. The matter was listed for a jurisdictional hearing on 1 August 2018.
35.On 1 August 2018 Mr Pasi and Mr Herrald both appeared and advised that negotiations were underway to settle the matter. The tribunal adjourned the matter to a date to be fixed for allow those negotiations to continue.
36.Unfortunately the matter did not settle and the matter was relisted for hearing on 4 January 2019 on the extended jurisdictional issue. After some oral submissions on the issue, a timetable was fixed for final written submissions after which the Tribunal would determine whether the original consent to the extended jurisdiction remained valid.
37.On 8 January 2019 the respondent filed its final submissions. Leaving aside the submissions on the merits of the dispute, the respondent’s argument was simply that it had never consented to the claim as presently quantified. At the time of its consent the claim was $25,000 or possibly a little more.
38.On 29 January 2019 the applicants filed their final submissions. In summary, the applicants submitted that the respondent had always known that the claim would substantially exceed the $25,000 initially claimed. It was said that this should have been apparent from the report provided by Handovers.com Pty Ltd in November 2017.
Legislative scheme
39.Section 18 of the ACAT Act provides:
18(1)A civil dispute application cannot be made to the tribunal for an amount greater than the tribunal's jurisdictional limit, unless section 20 (Abandoning excess to come within jurisdiction) or section 21 (Jurisdiction by agreement—amounts over $25 000) allows the application to be made.
(2)The tribunal's jurisdiction is limited to—
(a)civil dispute applications claiming amounts of not more than $25 000; or
(b)in relation to debt declarations—applications for declarations for debts of not more than $25 000.
Note For working out an amount to decide whether the tribunal has jurisdiction—see s 19.
40.Section 21 of the ACAT Act provides:
21(1) This section applies if—
(a)a civil dispute application could be made to the tribunal but for section 18 ($25,000 limit on civil dispute applications); and
(b)the parties agree to the application being decided by the tribunal; and
(c)the tribunal is satisfied that the parties understand that the amount of the claim in excess of $25,000 is not being abandoned.
(2) The civil dispute application may be made, and the tribunal has jurisdiction to hear the application, despite section 18.
Consideration of the issues
41.The tribunal’s civil jurisdiction under section 18 of the ACAT Act, which includes building disputes, is limited to $25,000.
42.The issue is whether the agreement on 21 September 2017 by the respondent to the extended jurisdiction of the tribunal is an agreement that is binding in the present instance. The claim as lodged was for $25,000, with a suggestion that it might be a little more, around $31,800. This is the context in which the respondent agreed to the extended jurisdiction.
43.The applicants, claim is now in excess of $188,500 and includes various claims that did not form part of the original claim as lodged.
44.The applicants say that once the agreement to the extended jurisdiction was given it was given for all purposes and not limited to any particular amount or subject matter as long as it arose out of the building dispute between the parties. The respondent takes issue with this and argues that the agreement was contextually limited to the state of the applicants’ claim at the time the agreement was given.
45.There are many cases dealing with the meaning of ‘agreement’ in different legal contexts, including in the law of contracts where it is a pivotal concept that has taken on particular meanings. In the present case, section 21 of the ACAT Act uses the word in its ordinary English meaning.
46.In ordinary English, the word ‘agree’ is a verb (part of the verb ‘to agree’). The word ‘agreement’ is a noun and refers to the fact and content of that which is agreed between the parties.[13]
[13]Macquarie Dictionary (Pan McMillan, 7th edn, 2017)
47.As with any verb, ‘to agree’ has no content or context per se. The verb requires a noun for its operation: ie who is agreed (the subject of the verb) about what (the object of the verb)?
48.In its noun form, the word ‘agreement’ again is per se contentless. It indicates that an agreement of some form has been reached but says nothing else including the parties to and the subject matter of the agreement.
49.The result of the above is that an ‘agreement’ per se is a purely abstract concept and does not exist (or has no reality) independently of its content. What is real is an ‘agreement’ by certain parties to certain propositions. Similarly, a person can only be taken to ‘agree’ to certain propositions with certain other parties.
50.Turning to the agreement to extended jurisdiction made on 21 September 2017: in relation to this agreement, there is no issue concerning the identity of the parties; the issue is the about the content of the agreement.
51.A party cannot be taken to ‘agree’ to a proposition that has not been put to them either explicitly or implicitly.
52.At no point in their dealings up to 21 September 2017 had the applicants said (or even suggested) that their claim would be of the present magnitude. The claim made was only for $25,000 and the extended jurisdiction allowed for the possibility that it might be a little higher.
53.The applicants submitted that the inference could and should be drawn from the report of 21 November 2017 prepared by Handovers.com Pty Ltd that their claim was likely to be much higher. The Tribunal accepts that the existence of an agreement can be inferred from the words and conduct of the parties but in the present case this submission is without merit, because the report from Handovers.com post-dated the agreement on 21 September 2017 and causal inference does not work in reverse time. The Handovers.com report also contained no costings for the work it indicated needed to be done.
54.The respondent denies that it was on notice of the potentially unbounded nature of the applicants’ claim and denies that it consented to this proposition. It also did not appear to the Tribunal that the applicants were labouring under a misapprehension that they could amend their claim to any amount and still remain in the Tribunal.
55.The Tribunal finds as a fact that the parties only agreed to the extended jurisdiction to the extent that it may facilitate the applicants’ claim possibly going $6,000 to $7,000 over the jurisdictional cap. This is all the respondent is taken to have agreed to.
56.A second consideration also arises. Independently of the applicants’ claim, the respondent has foreshadowed lodging a counter-claim which will itself exceed the jurisdictional limits of the tribunal. The respondent does not wish to bring this claim in the tribunal.
57.The claim and counter-claim raise the same factual issues, namely the quality of the work and who was in the wrong. The claim and counterclaim cannot be split and run in different forums: for example, the applicants’ claim in the tribunal and the respondent’s counter-claim in the Magistrates Court. The same issue between the same parties cannot be litigated twice and in different forums. Issues of res judicata, Anshun estoppel and issue estoppel arise in these circumstances.
58.Given that the respondent intends to lodge a counter-claim in the Magistrates Court, and cannot be compelled to lodge it in the tribunal with its jurisdictional cap and ‘no costs’ rules, then if that counter-claim is lodged in the Court there is one possible outcome, namely the whole matter, claim and counter-claim, will need to go to the Magistrates Court.
59.At this point in time the respondent has not lodged the counter-claim and so this second consideration does not apply at present.
Conclusion
60.There is no agreement to the extended jurisdiction of the tribunal in relation to the applicants’ claim as presently framed.
61.The applicants’ claim as presently framed is outside the jurisdictional limit of the tribunal and so the applicants will need to either abandon the excess over $25,000 or discontinue the matter in the tribunal.
62.If the respondent does file a counter-claim in the Magistrates Court then the tribunal will have to further review the matter.
………………………………..
Senior Member A Anforth
HEARING DETAILS
FILE NUMBER XD 854/2017 PARTIES, APPLICANT Isaac Ugwumba
Chizoba Ugwumba
PARTIES, RESPONDENT Shance Constructions Pty Ltd
ACN 119 533 532
COUNSEL APPEARING, APPLICANT N/A COUNSEL APPEARING, RESPONDENT N/A SOLICITORS FOR APPLICANT Prudential Legal Solutions SOLICITORS FOR RESPONDENT Jack C Herrald Solicitors TRIBUNAL MEMBERS: Senior Member A Anforth DATES OF HEARING: 12 December 2017
19 June 2018
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