Ung v Ng & Ors and Ng & Anor v Ung

[2009] NSWDC 106

Reported Decision: 8 DCLR (NSW) 389

District Court

CITATION:	Ung v Ng & Ors and Ng & Anor v Ung [2009] NSWDC 106
HEARING DATE(S):	19 & 27 February 2009
JUDGMENT DATE:	16 June 2009
JURISDICTION:	Civil
JUDGMENT OF:	Levy SC DCJ
DECISION:	1. In proceedings numbered 4311 of 2008 leave to appeal is granted; 2. Both appeals are allowed; 3. The orders made by the Tribunal are set aside; 4. The proceedings are to be remitted to the Consumer, Trader and Tenancy Tribunal to be determined according to law; 5. Each party is to bear their own costs in relation to the appeals.
CATCHWORDS:	ADMINISTRATIVE LAW – statutory appeals – power of Consumer, Trader and Tenancy Tribunal to make substantive amendments to its orders after its decision was communicated to the parties – whether proceedings should be remitted for determination according to law – MEDIATION – desirability of parties attempting to mediate and resolve matters in dispute prior to entry of judgment.
LEGISLATION CITED:	Consumer, Trader and Tenancy Tribunal Act 2001 Courts and Crimes Legislation Amendment Act 2008
CASES CITED:	House v The King (1936) 55 CLR 499
PARTIES:	Carlos Ung (First Appellant/Defendant in the Tribunal) Michael Ng & Lai Ying Ng (Second Appellants/Plaintiffs in the Tribunal) The Consumer Trader and Tenancy Tribunal entered a submitting appearance
FILE NUMBER(S):	4311 of 2008; 4657 of 2008
COUNSEL:	Ms M Dolenec (First Appellant/Defendant in the Tribunal) Ms K Welshman (Second Appellants/Plaintiffs in the Tribunal)
SOLICITORS:	Sachs Gerace Lawyers (First Appellant/Defendant in the Tribunal) JA Buda & Associates (Second Appellants/Plaintiffs in the Tribunal)

JUDGMENT

Nature of the case – Appeals from Consumer Trader and Tenancy Tribunal

1. These two summonses raise statutory appeals brought pursuant to s 67 of the Consumer,Trader and Tenancy Tribunal Act 2001 in respect of three decisions made by the Home Building Division of the Consumer Trader and Tenancy Tribunal. There were two related proceedings in the Tribunal comprising a claim for damages brought by homeowners in respect of alleged faulty and defective workmanship carried out by a builder and a counter-claim by the builder for monies claimed to be owed to him by the homeowners.

Ambit of the appeals

2. These appeals are limited to questions of law. The appeals have arisen because of the complicated progress and unusual manner of disposition of the original proceedings before the Tribunal, as is evident from the procedural history which has led to these appeals.

Issues for determination

3. The following four issues arise for determination.

(a) Whether the Tribunal had jurisdiction to make the orders pursuant to s 50 of the Consumer, Trader and Tenancy Tribunal Act 2001;

(b) Whether there was an obvious error in the text of a notice of a decision or a statement of reasons of the Tribunal, including but not limited to an inconsistency between the stated decisions and the stated reasons;

(c) If there was an obvious error, was there a discretion to refuse to amend the reasons;

(d) If there was such a discretion, was it exercised validly or reasonably.

Facts

The relationship between the parties

4. Carlos Ung is a builder who, at the relevant time, was unregistered and uninsured. He is the Plaintiff in the first appeal in proceedings numbered 4311 of 2008. He is also the First Defendant in the second appeal in proceedings numbered 4657 of 2008.

5. Michael and Lai Ying Ng are homeowners who engaged Mr Ung as the builder for their home building works. They are the Defendants in the first appeal and they are the Plaintiffs in the second appeal.

6. Each of these parties was represented by counsel. The Second Defendant in each of the appeals is the Consumer Trader and Tenancy Tribunal which entered a submitting appearance in these proceedings.

The underlying transaction giving rise to the original proceedings and the appeals

7. On 9 March 2004 the homeowners and the builder entered into a building contract that provided for the builder to carry out some home building works. The works were carried out over the course of 2004 and 2005.

8. In 2005 a dispute arose between the parties concerning alleged defective workmanship and a related disagreement over monies owing under the contract after balancing the respective claims, rights and entitlements of the parties.

9. The determination of these appeals does not require a detailed re-examination of the subject matter of the underlying works nor does it require a re-examination of all of the details of the underlying dispute.

The hearing before the Tribunal

10. The parties took their dispute to the Consumer, Trader and Tenancy Tribunal for adjudication. That Tribunal was established to simplify the resolution of such disputes and to reduce the associated cost and delay to the parties. The hearing in the Tribunal took place over the course of a three day hearing on 2, 3 and 4 July 2007. During the course of the hearing before the Tribunal the parties agreed to narrow the ambit of their dispute to seven issues for determination. The Tribunal, constituted by its member Dr S F Smith, reserved its decision.

11. The Tribunal delivered three discrete decisions in the proceedings. The dates of those decisions were 29 November 2007, 21 February 2008 and 15 September 2008.

12. In the first decision the Tribunal made findings and invited the parties to prepare short minutes of order to reflect its first decision.

13. In the second decision the Tribunal made its orders.

14. In the third decision the Tribunal purported to vary its orders in a manner that conflicted with and which was inconsistent with the findings of the Tribunal in one material respect.

15. These appeals are concerned with determining the legitimacy of the cumulative effect of these three decisions.

The first decision – 29 November 2007

16. In its Reasons For Decision delivered on 29 November 2007 (“the first decision”) the Tribunal made findings on the seven issues the parties had presented to it for adjudication. The effect of the adjudication was that the homeowners succeeded in their defects claim against the builder in the sum of $126,321 and the builder succeeded in his quantum meruit claim against the homeowners in the sum of $27,886.

17. The Tribunal ordered the parties to file short minutes of order to reflect the findings made. It remains unclear as to why short minutes were required as the findings made were readily amenable making consequential orders at the time the decision was delivered. It is possible that the need for short minutes arose because of the need to give effect to the agreement of the parties when they narrowed the issues for the Tribunal to determine however the evidence does not permit a concluded view to be reached on this point.

18. At the time short minutes were ordered, the Tribunal gave the parties leave to make submissions on costs. The proposed short minutes and submissions on costs were ordered to be filed by 7 December 2007.

19. One of the critical factual issues that fell to be decided by the Tribunal was whether the homeowners had paid the builder a cash progress payment in the sum of $40,000. The homeowners alleged that they made a cash payment to the builder from cash taken from a tin containing some $70,000 in cash.

20. The Tribunal found that it was not satisfied that the payment of $40,000 was made by the homeowners as was alleged. In this regard the Tribunal gave the following unequivocal reasons:

“One aspect of the matter bordering on bizarre touched an alleged progress payment under the contract. The owner contended that a payment of $40,000 had been made to the builder at the builder’s request. No receipt for this amount was received. The builder alleged that he had requested the payment, had signed a receipt for it but never actually received the money. No receipt was in evidence from either party. With respect to the parties, both accounts are implausible. It is hard to believe that an owner would pay $40,000 in cash and not ask for a receipt and at least equally incredible that a builder would sign a recept (sic) for cash he had not received.

In this case it seems to be agreed that the burden of proof of the payment lies on the homeowner. On the evidence as it came out before me I am not able to be satisfied on the balance of probabilities that payment was made by the owners as alleged. Accordingly, the account between the parties must be adjusted on the basis that the $40,000 was not paid .”

[Emphasis added]

21. Thereafter the parties were unable to agree on the composition of the short minutes that were ordered to be filed to reflect the decision reached by the Tribunal. The reasons for the absence of agreement as to the composition of short minutes was not fully explored in evidence. Subsequently, in view of the absence of any agreement on the form and content of the required short minutes, each of the parties then filed their own versions of the proposed short minutes in the expectation that the Tribunal would choose to adopt one or the other or an amalgam of both of these draft orders.

22. Surprisingly, given the Tribunal’s earlier finding on the matter of the alleged payment of $40,000 which I have quoted with emphasis in the above extract of the Tribunal’s reasons, the homeowners filed a tabulated form of short minutes which included an allowance of the sum of $40,000 described as a payment made by the homeowner to the builder with the object of obtaining a credit for that payment. This was so notwithstanding the earlier finding made by the Tribunal that it was not satisfied that such a payment in fact had been made.

23. Notwithstanding the above quoted findings, and fundamentally unreflective of a key portion of the Tribunal finding to the effect that the homeowners had not paid $40,000 as they had alleged, the homeowners made a written submission to the Tribunal in the following terms:

“1. In this matter, both parties have succeeded to an extent in their claims. The Homeowners have succeeded in their effects claim in the amount of $126,321. and the Builder has succeeded in his quantum meruit claim in the amount of $27,886. The orders that reflect the decision delivered on 29 November 2007 will include an order that the Builder pay the Homeowners the difference between their awards, an amount of either $98,435 or $58,435, depending on whether an amount of $40,000 is taken to be part of the Builder’s claim .”

[Emphasis added]

24. The portion of the submission made on behalf of the homeowner and to which I have added emphasis in effect sought a credit for the homeowners in the amount of $40,000 notwithstanding the earlier finding.

25. On the face of the Tribunal’s Reasons for Decision that claim for a credit appears untenable in view of the Tribunal’s earlier express findings which did not accept that a progress payment of $40,000 had been made by the homeowners.

26. In conformity with the findings of the Tribunal, the short minutes filed on behalf of the builder made no reference to the disputed sum of $40,000 that was referred to in the short minutes filed on behalf of the homeowners. The short minutes prepared on behalf of the builder were reflective of the reasoning within the first decision of the Tribunal.

27. In the appeals in this court the homeowners submitted that the reasoning behind the submission concerning the contended adjustment of $40,000 was a function of the manner and form of agreement on the issues that fell for determination by the Tribunal, whilst that position may be correct, there was no evidence tendered in this regard and that position was not apparent on the face of the Tribunal’s Reasons for Decision.

The second decision – 21 February 2008

28. On 21 February 2008, following a consideration of the submissions from the parties in respect of the first decision, the Tribunal ordered the builder to pay the homeowners the sum of $92,935 immediately. The Tribunal also ordered the builder to pay the homeowners costs as agreed or assessed (“the second decision”). The Tribunal gave the following reasons for making those orders:

“Having considered the submissions of the parties and noting that the builder cannot enforce the contract but may only claim a quantum meruit for works done, the Tribunal awards to the homeowner agreed defects of $123,564.00 plus drainage works of $2,667.00, a total of $126,321.00 and to the builder, $5,500.00 double counted for rendering and, pursuant to s.94(1A), $27,887.00 on a quantum meruit, a total of $33,387.00. The net amount is $92,935.00 to be paid by the builder to the homeowner.

As the homeowner has achieved substantial success and the builder was, save for a statutory discretion, barred from bringing a claim, the builder is to pay the homeowner’s costs as agreed or assessed.”

29. Following receipt of the second decision the parties made submissions to the Tribunal concerning proposed final orders, including a submission as to what effect should be given to the alleged payment to the builder of $40,000, a contention that the Tribunal had rejected in its first decision.

The third decision – 9 September 2008 – purported amendment of the second decision

30. On 9 September 2008, after receiving submissions from the parties, the Tribunal amended its orders of 21 February 2008 and in doing so it reduced the amount payable by the builder to the homeowners by the sum of $40,000 with the result that the builder’s liability to the homeowners was thereby reduced to $52,935 (“the third decision”).

31. The Tribunal gave Amended Reasons for varying its previous orders. The jurisdiction for the purported amendment was identified as being founded upon s 50 of the Consumer, Trader and Tenancy Tribunal Act 2001. The Amended Reasons were stated in the following terms:

“Having considered the submissions of the parties and noting that the builder cannot enforce the contract but may only claim a quantum meruit for works done, the Tribunal awards to the homeowner agreed defects of $123,564.00 plus drainage works of $2,667.00, a total of $126,321 and to the builder, $5,500 double counted for rendering and, pursuant to s.94 (1A), $27,887.00 on a quantum meruit, a total of $33,387.00. The amount to be paid by the builder to the homeowner is thus $92,935.00.

In the reasons relating to the substance action I was not satisfied that a progress payment of $40,000.00 had been made to the builder. The effect of that finding is that the payment is also to be dealt with under s.94(1A). The discretionary factors relating to quantum meruit for the other works are similarly relevant. Consistent with the reasons of December 2007 the $40,000 will have to be factored into the balance of account between the parties. This means that $40,000 was owed to the builder for works done but not paid. As a result the net amount payable by the builder to the home owner is $52,935.00.

I amend the reasons dated 29 November 2007 in the light of the above pursuant to s 50. The costs orders are not affected.”

32. The Tribunal’s third decision arose only because of the terms of the submissions made for the homeowners which sought to incorporate a claim for credit for an alleged progress payment of $40,000 in cash when the Tribunal had already found that it was not satisfied that such a payment had been made.

33. It appears that this circumstance was the source of some confusion for the Tribunal which then made a further order regarding the disputed $40,000 payment. That order had the effect of reducing the builder’s liability to the homeowner.

34. That further order was clearly inconsistent and conflicted with the Tribunal’s earlier finding and it became a source of dissatisfaction for the homeowners.

35. The end result was that having concluded the proceedings and having made final orders in the proceedings the Tribunal had fulfilled its function subject to any residual power vested in it to make corrections to its decisions.

Certification of Orders – 10 September 2008

36. On 10 September 2008 the Registrar of the Tribunal certified that the outstanding balance payable to the homeowners by the builder was in the sum of $52,935 with interest being payable on that sum.

Filing of Supreme Court proceedings by the builder to appeal the Tribunal’s finding

37. On 10 July 2008 the builder filed a Summons in the Supreme Court of New South Wales. That summons sought leave to appeal from the second decision of the Tribunal. Leave was sought because the originating process was filed outside the time limit required for the commencement of such an appeal. The reasons advanced by the builder concerning the delay in filing the summons were, essentially, impecuniosity. The Supreme Court proceedings were allocated the number 30088 of 2008.

38. In those proceedings the builder contended that the Tribunal had erred at law, had made orders inconsistent with its earlier findings, had failed to make orders in relation to matters in respect of which it had made findings and had erred in relation to the corrective orders made in its third decision.

39. On 15 July 2008 the Tribunal entered a submitting appearance in the Supreme Court proceedings. After several directions hearings in the Supreme Court the builder’s summons was transferred to this court.

Transfer of builder’s appeal proceedings from the Supreme Court to the District Court

40. On 4 September 2008 the Supreme Court proceedings initiated by the builder were transferred to the District Court pursuant to the provisions of the Courts and Crimes Legislation Amendment Act 2008 which conferred jurisdiction on the District Court with respect to such appeals. Following the transfer those proceedings they were allocated the proceedings numbered 4311 of 2008 in the District Court.

Subsequent procedural history of the litigation in the District Court

The builder’s appeal in the District Court

41. On 10 October 2008 the builder filed an Amended Summons in this court seeking leave to appeal from the first decision of the Tribunal and appealing the second decision of the Tribunal and sought a stay of the first and second decisions pending the hearing of the appeal. The builder’s appeal sought a statutory review of the decisions of the Tribunal.

42. Leave was granted to appeal the first decision. The stay was conceded pending the hearing of the appeal.

43. The builder’s appeal raised several complaints. The first complaint was that in arriving at the first decision in which it was determined that the builder was entitled to a quantum meruit payment, the Tribunal failed to make any award for the quantum meruit value of the builder’s work to the value of $89,552. The second complaint was that in balancing the respective interests and entitlements of the parties the Tribunal also failed to make an order that reflected the builder’s entitlement to an unpaid sum of $40,000 in respect of which the Tribunal had, in its first decision, found to have been not paid to the builder as had been claimed by the homeowner. The third complaint was that the Tribunal had failed to exercise its powers under s 50 of the Act to correct its orders so as to reflect the required outcome of its decisions.

The homeowner’s appeal in the District Court

44. Beforehand, and independent of the builder’s appeal, on 3 October 2008 the homeowners filed a summons in this Court seeking orders in the nature of prerogative relief by which he sought to quash the orders made by the third decision of the Tribunal including the subsequent consequential orders as well as seeking a declaration that the third decision and the consequential orders that flowed from it were a nullity, invalid and / or of no legal effect. In the alternative, the homeowners appealed the whole of the second decision and sought that it and the consequential orders be set aside. The homeowner’s appeal was allocated proceedings numbered 4657 of 2008 in the District Court.

45. On 17 October 2008 the homeowners filed an amended summons seeking a more limited range of relief and orders, namely that the third decision of the Tribunal and the consequential orders that flowed from that decision be set aside and that the application by the builder seeking relief under s 50 of the Act be dismissed on the ground that the Tribunal had completed and discharged its functions and therefore lacked the power to further amend its orders as sought by the builder.

Evidence

46. There was no oral evidence. The parties tendered relevant correspondence to the Tribunal and the judgment of the Tribunal. The only affidavits filed in the appeal proceedings were those of Mr Brian Vincent Duong, the solicitor for the homeowners. Those affidavits were respectively sworn on 8 September 2008, 8 December 2008 and 12 December 2008.

47. I set out a brief overview of the effect of the correspondence.

48. On 11 April 2008 the builder’s solicitor wrote a letter to the Tribunal, purporting to be ‘an application brought under section 50 of the Consumer, Trader and Tenancy Tribunal Act 2001 seeking to make corrections to the decision made by the Tribunal on 21 February 2008’. There was a difference in the content of the Reasons for Decision dated 29 November 2007 and the Reasons for Decision dated 21 February 2008.

49. On 16 April 2008 the homeowners’ solicitor responded to the letter from the builder’s solicitor indicating opposition to any correction under section 50 of the Consumer, Trader and Tenancy Tribunal Act 2001, pointing out that there was no inconsistency between the Reasons for Decision and the Orders made, and asserting that the matter at issue had already been argued before the Tribunal in December 2007.

50. On 9 September 2008, the Tribunal delivered Amended Reasons and Orders, which reduced the judgment debt owed to the homeowners by the builder by an amount of $40,000. The Tribunal purported to take this step pursuant to s 50 of the Consumer, Trader and Tenancy Tribunal Act 2001 which is by its terms a power to make slip rule type amendments to orders by the Tribunal.

51. By the time the Tribunal had delivered the third and final Reasons and Orders, the builder had filed a summons commencing an appeal in the Supreme Court.

Issue 1 – Whether the Tribunal had jurisdiction to make the orders pursuant to s 50 of the Consumer, Trader and Tenancy Tribunal Act 2001

52. Section 50 of the Consumer, Trader and Tenancy Tribunal Act 2001 provides:

“ 50 Power to correct decisions of Tribunal

(1) If, after the making of a decision by the Tribunal, the Tribunal is satisfied that there is an obvious error in the text of a notice of the decision or a written statement of reasons for the decision, the Tribunal may direct the Registrar to alter the text of the notice or statement in accordance with the directions of the Tribunal.

(2) If the text of a notice or statement is so altered, the altered text is taken to be the notice of the Tribunal’s decision or the statement of its reasons, as the case may be, and notice of the alteration is to be given to the parties in the proceedings in such manner as the Chairperson may direct.

(3) Examples of obvious errors in the text of a notice of a decision or a statement of reasons for a decision are where:

(a) there is an obvious clerical or typographical error in the text of the notice or statement, or

(b) there is an error arising from an accidental slip or omission, or

(c) there is a defect of form, or

(d) there is an inconsistency between the stated decision and the stated reasons.

(4) The powers of the Tribunal under this section may be exercised by the Chairperson or by the member who presided at the proceedings to which the decision relates.”

53. The statutory grounds upon which the Tribunal could make the order which gave effect to the submission made on behalf of the homeowner seeking a credit of $40,000 are stated in s 50 (3) of the Act. I consider those stated examples to be illustrative examples rather than exhaustively defining the circumstances in which such orders could be made. The relevant circumstances for making a corrective order include an obvious error in the text of its earlier decision or reasons, see s 50(1). The exercise of that statutory power was at all times subject to the requirements of procedural fairness.

54. In my view section 50(3) provides a non-exhaustive list of obvious errors which includes a textual clerical or typographical error : see s 50(3)(a); an error arising from an actual slip or omission : see s 50(3)(b); a defect of form : see s 50(3)(c), as well as where there is an inconsistency in the stated reasons of the Tribunal and the decision of the Tribunal : see s 50(3)(d).

55. The jurisdiction of the Tribunal to alter the text of its reasons for decision is limited to the foregoing matters and also matters in the same nature and class to the foregoing matters. In my view the power to correct does not extend to making new and substantive findings. Once a decision has been delivered the Tribunal had no power or jurisdiction to order substantive changes to its reasons. In my view the alteration of the earlier reasons embodied in the first decision which had the effect of changing the relative rights and liabilities of the parties by an amount of $40,000 was a substantive matter and was not a matter of obvious error as contemplated by s 50 of the Act. The alteration made was not in a category that was in the same nature and class with the examples cited in s 50(3) of the Act.

56. The additional question calling for decision in respect of Issue 1 is whether or not the Tribunal made its alteration orders at a time when the Tribunal had concluded its task when it had given its decision.

57. In my view when the Tribunal gave its first and second decisions it had concluded its function except for making consequential orders. In doing so, I find that it did not have the residual power to make the further substantive orders it purported to make in respect of its third decision.

Issue 2 – Whether there was an obvious error in the text of a notice of a decision or a statement of reasons, including (but not limited to) an inconsistency between the stated decisions and the stated reasons

58. The question of whether there was an obvious error in the Tribunal’s decision or reasons is a question of fact. In my view there was no error of that character, rather, the Tribunal erroneously purported to change its substantive orders in relation to the accountability of the sum of $40,000 contrary to its earlier decision by which it found that the sum of $40,000 had not been paid, contrary to the claim of the homeowners.

Issue 3 – If there was an obvious error, was there a discretion to refuse to amend discretion to or to amend

59. Where there was an obvious error made by the Tribunal in expressing its reasons there was an undoubted discretion for the Tribunal to either amend or to refuse to amend its reasons. That position is plain on the most cursory examination of s 50 of the Act.

60. However, consistent with my earlier stated view, in my opinion there was no obvious error in the decision or in the reasons for decision that called for alteration in the manner in which the Tribunal purported to act.

Issue 4 – If there was a discretion, was it exercised validly or reasonably

61. The ultimate question becomes whether the Tribunal exercised its discretion in a valid or reasonable manner : House v The King (1936) 55 CLR 499. In my opinion the Tribunal acted invalidly and therefore unreasonably because it created a substantive wrong in adjusting the result of its determination in a manner that was inconsistent with its earlier reasons for decision.

Summary and effect of findings on the issues for determination

62. In summary, I have found that the Tribunal made invalid final orders that were inconsistent with its earlier stated findings. In view of this conclusion the result of these proceedings must be that they be remitted to the Tribunal for rehearing according to law as the evidence before me does not permit a full consideration of the matters in issue between the parties to permit a determination of the issues in this Court.

Mediation

63. At the conclusion of the hearing the parties were concerned at the prospect of an order for remittal for re-hearing in view of the costs associated with such a course. Accordingly, they acceded to the suggestion for a mediation so I made an order that a mediation take place. I took the unusual course of deferring the delivery of my judgment in this matter until a mediation had been concluded. Appropriately, I was not informed of the details of the mediation. On 10 June 2009 the Solicitor for the homeowners advised that the mediation had been unsuccessful in resolving the dispute between the parties so the matters were listed for judgment.

Costs

64. After receiving submissions on costs, having regard to the confusion as to the orders in the Tribunal with regard to the ultimate result below, I consider that the appropriate order should be that each party should pay their own costs in respect of these appeals.

Orders

65. In proceedings numbered 4311 of 2008 leave is granted to the builder to file his appeal albeit out of time.

66. In proceedings numbered 4311 of 2008 and in proceedings numbered 4657 of 2008 I make the following orders:-

(a) The orders made by the Tribunal are set aside;
(b) The proceedings are to be remitted to the Consumer, Trader and Tenancy Tribunal to be determined according to law;
(c) Each party is to bear their own costs in relation to the appeals;
(d) The exhibits may be returned;
(e) Liberty to apply on 7 days’ notice if further orders are required.