Harrison v Meehan[2017] QCA 315

SUPREME COURT OF QUEENSLAND

1. SOFRONOFF P:  On 1 February 2013, Mr and Mrs Harrison (the “applicants”) engaged Mr Meehan (the “respondent”) to build their new home at Camp Hill in Brisbane.  The parties signed a written contract which purported to describe the works as follows:

“Construction of new dwelling at the above address.  Works include site preparation, foundations, slabs, all walls (exterior/interior), decks, windows, roof, guttering, stormwater, sewer hook up to main, water to house points, electrical rough in only.”

2. The contract price was stated to be $195,000.
3. Despite the terms of that written contact, the parties agreed at trial that the respondent would be required to do the carpentry work only, which included the supply and fixing of external cladding and internal plasterboard, and would supervise the other trades on site.
4. The parties agreed that the agreed sum of $195,000 was to be paid to the respondent on his tendering invoices on a weekly basis for his labour charges.
5. The applicants and the respondent came to a disagreement about the quality and quantity of work that had been performed and that had been paid for.  In the result, the respondent walked off the site on 26 August 2013.  He never returned.  The applicants’ solicitor gave notice to the respondent that he was in breach of the contract and that the applicants would terminate the contract unless he resumed work within 10 days after receiving the letter.  He did not do so and by letter dated 10 September 2013 the applicants terminated the contract.
6. Mrs Harrison promptly sought and obtained qualifications as an owner builder.  On 15 October 2013 the applicants entered into a contract with Inspired Constructions Pty Ltd which commenced and completed work to finish the dwelling.
7. By application dated 26 May 2014, the applicants commenced proceedings in the Queensland Civil and Administrative Tribunal to recover damages from the respondent which they claimed that they had incurred by reason of his breach of contract.
8. At first instance the Tribunal found, as a fact, that the respondent had agreed to do the work that I have referred to above for the agreed price of $195,000.  The Tribunal also found that the respondent had breached his contract and was liable to the applicants for damages.
9. It appears to have been common ground at the hearing at first instance that the damages had to be calculated by reference to the reasonable cost of completing the building work in accordance with the contract.^[1]  In order to assess damages in this way it was necessary for the Tribunal to find what work remained to be done under the contract, what defective work had been done under it, the cost of the completion of such work as remained undone under the contract, the cost of rectifying such defects as were proved to have existed and the extent to which such costs were reasonable or, alternatively, what proportion of costs expended were reasonable.
10. The applicants acted for themselves at trial.  They tendered invoices, their bank statements and other documents which proved amounts that they had paid to the new builder to complete construction of the dwelling.  However, the learned member found that there was an “absence of clear and detailed evidence of what the second builder, Inspired Construction, was asked to do and did, and the reasonableness of its charges for what it did”.^[2]  That being the position, he concluded that it was “unsafe to base an award of damages on the work done and the charges made for that work by that builder”.^[3]
11. The parties also called experts to give evidence.  Mr Sim was an architect who gave evidence on behalf of the applicants.  Mr Haines was a builder who gave evidence on behalf of the respondent.  Neither of them gave evidence about the reasonable cost of the works that the respondent actually had to do as found by the Tribunal.  Rather, each of them had proceeded upon the basis of the assumptions with which they had been instructed and, upon those assumptions, they had attempted to calculate the reasonable costs of completing the building work under the contract between the applicants and the respondent.  Those assumptions were each unfounded.  Their evidence was, therefore, irrelevant.
12. The applicants had also claimed some modest damages in respect of matters like crane hire and skip bin hire and the like.  Had matters remained in that state, it would have followed that the applicants would have been entitled to a judgment against the respondent for damages for breach of contract for those minor sums but nothing in respect of the substantial loss caused by the need to have the work completed by another builder.^[4]
13. Section 28(3)(d) of the Queensland Civil and Administrative Tribunal Act 2009 (“the Act”) provides that, in conducting a proceeding, the Tribunal must act with as little formality and technicality as the requirements of the Act and a proper consideration of the matters before the Tribunal permit.  Section 29 of the Act obliges the Tribunal to take all reasonable steps to ensure that each party to a proceeding understands the nature of assertions made in the proceeding and the legal implications of those assertions.  None of that permits the Tribunal to assist parties to prove their respective cases or to give advice to parties about how to conduct the proceedings.  To do so would necessarily involve unfairness to one of the parties.  Notwithstanding the desirability for informality in proceedings before the Tribunal, the need for impartiality remains paramount.
14. In this case it appears (although this is not entirely clear) that the applicants had paid $122,026.98 to Inspired Constructions for completion of the works.  There was evidence that the amount paid to the respondent before the contract was terminated was $160,392.46.^[5]  The original contract sum for $195,000 means that, at the trial, there emerged a real possibility that the applicants had suffered a not insubstantial loss despite their failure to prove it.  In those circumstances consistently with s 28 and s 29 of the Act, and consistently with one of the objects of the Act being that the Tribunal should deal with matters in a way which is “just, economical, informal and quick”,^[6] the member decided to take evidence from the two experts concurrently upon their being asked to assume the actual scope of works was as he intended to find.  The possibility of taking evidence concurrently had been raised at the outset of the hearing and neither party had objected to that course.^[7]
15. Proceeding in this way, the experts were invited to consider items of work by reference to the actual scope of works and to give their assessment of the reasonable cost of such work.  There was no reason to suppose that any of this was misunderstood by the applicants.^[8]
16. On this footing, the learned member assessed damages in the sum of $54,740.68.  He declined to order interest on that sum or costs.
17. The applicants appealed his decision to the Appeal Tribunal seeking an order that the judgment for damages in the sum of $54,740.68 be set aside and substituted with an order that the respondent pay the applicants’ damages in the sum of $117,708.84 together with costs and some additional consequential damages for rent paid during the delayed construction.
18. The applicants raised 13 grounds of appeal.  The Appeal Tribunal considered that 11 of those grounds involved questions of law and that the remaining grounds raised questions of mixed fact and law.  Pursuant to s 142 of the Act an appeal on a question of fact or upon a question of mixed law and fact may only be made with leave of the Appeal Tribunal.  Pursuant to s 146, in deciding an appeal against a decision on a question of law the Appeal Tribunal is not engaged in a rehearing of the matter.  Rather, the result of its conclusion on the question of law will determine whether it is appropriate to confirm or to amend the decision, to set it aside and to substitute the Appeal Tribunal’s own decision or to return the matter to the Tribunal at first instance with appropriate orders.  Obviously, upon such an appeal the outcome will depend upon whether, having regard to the Appeal Tribunal’s determination about the question of law, any findings of fact remain intact or not.  That will determine whether the Appeal Tribunal can proceed to make final orders or whether there remains room for further litigation before the Tribunal at first instance.
19. Appeals by leave that involve disputed questions of fact or questions of mixed law and fact require different treatment.  Such an appeal must be decided by way of rehearing.^[9]
20. The Appeal Tribunal concluded that it was evident that the applicants had deliberately and carefully decided upon the way to prove their case on damages.  This was to be done upon two alternate bases.  First, they sought to prove and to recover the actual costs that they had incurred in completing the building work.  Second, they sought, in the alternative, to recover the reasonable cost of completing the building work based upon the expert evidence of Mr Sim.  In relation to the first basis they had failed to prove the scope of the actual work that had been done by the new builder.  It was impossible to relate the work done to the work that the respondent had agreed to do but had failed to do.  In this way the applicants were unable to show what part, if any, of the moneys that they had paid to the new builder had been paid in respect of work that the respondent, in breach of his contract, had failed to do or had performed defectively.  In relation to the alternative basis for the claim, the reasonable sums estimated by Mr Sim were irrelevant because they had been calculated upon factual assumptions that were wrong.
21. It was in these circumstances that the learned member decided to hear evidence from the experts concurrently.  They were invited to consider the cost of items of work done by reference to the scope of work which the member anticipated he would find.  They were invited to offer their opinion about the reasonable cost of such work.  The parties were given an opportunity to ask questions of their respective witnesses and they participated in that process.  As a result of that process the learned member assessed damages in the sum that I have already mentioned.  This course was one that favoured the applicants, who would otherwise have failed to prove their case.
22. On appeal to the Appeal Tribunal that course was approved but the damages were increased.
23. The respondent had cross-appealed for the sum of money that, on his case, remained owing to him under the contract.  During the course of the appeal hearing it became common ground that there remained a sum that was due to him for work that he had already done.  This was an amount of $18,940.68.  There was also a balance of $31,749.17 which had been held back by the applicants under the contract.  The net result was that the respondent was liable to the applicants in the sum of $26,015.99.  The Appeal Tribunal ordered that the respondent pay interest on that sum at the rate of 10 per cent per annum from the day after the date of the original decision until the date the amount is paid.
24. The applicants have sought leave to appeal to this Court.  Such an appeal is only possible upon a question of law and only if the Court grants leave to appeal.
25. The applicants’ application for leave to this Court states the reasons which are said to justify the grant of leave as follows:

“1. The [applicants] raise 10 grounds of appeal relating to errors of law which are said to arise in respect of the hearing of appeals APL273-15 and APL375-15.

2. The first ground of appeal argues that the Appeal Tribunal erred by failing to consider all the grounds of appeal. The second ground of appeal argues that the Appeal Tribunal erred by failing to consider the [applicants’] submissions.

3. The [applicants] raised 13 grounds of appeal however the Appeal Tribunal only proceeded under 1 ground of appeal. It is submitted that an error of law arises accordingly.

4. Whilst the Appeal Tribunal indirectly considered some of the arguments raised by the remaining grounds of appeal in the context of a rehearing, it did not address submissions which were seriously advanced by written and oral submissions. For example, the 5^th ground of appeal argued before the Appeal Tribunal that the learned Member at first instance misdirected the experts as to the relevant enquiry to be undertaken within respect to the calculation of damages. In the absence of any address to those submissions, an inference arises that the submissions were overlooked: Dennis Willcox Pty Limited v Federal Commissioner of Taxation (1988) 79 ALR 267 at pp.276-7; applied in Sydney Water Corporation Ltd v Aqua Clear Technology Pty Ltd [1996] NSWSC 640.

5. In John Urquhart t/a Hart Renovations v Partington & Anor [2016] QCA 87 the Court of Appeal made clear at [45] to [47] that when deciding a QCAT matter, whether at first instance or on appeal, the Tribunal should address all the arguments raised by the parties, at least briefly. The Court of Appeal held that a failure to do so would inevitably lead to the proceeding being remitted.

6. In the premises, it is in the interests of justice that leave be granted and inevitable that the appeal be allowed.”

26. The power to grant leave is a discretionary one.  The discretion conferred by s 150 is unfettered by any specific provisions in the Act.  Consequently, the discretion must be exercised according to the nature of the case in which leave is sought.  In a case such as the present one, it is material that an appeal is sought in circumstances where an applicant has already had the benefit of two hearings – a trial and an appeal.  This itself must be considered in the context of the jurisdiction in which each of those proceedings took place.  As I have already said, one of the objects of the Act in s 3 is to have the Tribunal deal with matters “in a way that is accessible, fair, just, economical, informal and quick”.  Persistent attempts at litigation conflicts with several parts of that object.  In that connection it must be remembered that, while in this case the parties are private citizens, the limitation upon liberty to appeal will also operate when the jurisdiction is sought to be invoked by a corporation, perhaps an insurer with access to ample resources to pursue litigation.  An appeal to this Court can only be justified if fairness and justice warrant the trouble and expense of a further appeal to this Court.
27. Accordingly, it is common to find statements that the discretion to grant or to refuse to grant leave to appeal under various statutes is exercisable only if the applicant establishes that the case is one involving an important point of law or some question of general or public importance.  Sometimes an established error of law may demonstrate that the proceedings have miscarried and that an applicant has thereby suffered an injustice.
28. Merely to demonstrate that the judgment from which an appeal is sought involves an evident error of law will not, at least in most cases, be sufficient on its own to justify the grant of leave.  To demonstrate only that would not even justify success on an appeal.  The error must be material and, to warrant the grant of leave to appeal, must give rise to a consequence beyond merely an asserted erroneous outcome.  What that might be will vary from case to case.
29. The applicants’ stated reasons why leave to appeal should be granted do not articulate anything other than the two asserted errors of law referred to in paragraphs in 3 and 4.  These two grounds really amount to a single ground, namely that the Appeal Tribunal did not consider all of the grounds of appeal.
30. Assuming that proposition to be well founded, no consequence is said to follow from it.  No substantial injustice to the applicants is alleged to have been occasioned as a result and the errors are not said to have resulted in the wrong orders being made.
31. It would be sufficient, in my respectful opinion, to dismiss the application for that reason alone.  However, the application has been argued more broadly and I proceed to consider the arguments that have been offered.
32. Paragraphs 15 to 18 of the applicants’ written outline of argument deal with what is said to have been the failure of the Appeal Tribunal to deal with grounds other than the eleventh and twelfth grounds of appeal.  Those two grounds, as articulated in the applicants’ written outline before the Appeal Tribunal, asserted that the Tribunal at first instance had erred in failing to award damages that the applicants had “incurred in respect of toilet hire, skip bins, scaffold hire and fence hire” and for “additional rent incurred by the Owners as a result of delays”.  The Appeal Tribunal considered those two grounds, assessed an award of damages in respect of the first group of matters and refused to award damages in respect of the claimed additional rent.
33. The first and second grounds of appeal, as explained in the same document, relate to a purported failure on the part of the Tribunal to “consider evidence and/or failure to provide adequate reasons”.  The evidence that is said to have been ignored consists of the building contract entered into with Inspired Constructions, the invoices issued by that company and the bank statements of the applicants.  The submission before the Appeal Tribunal to that affect, after asserting that failure, takes the matter no further.  Nothing is said to flow from that failure.  It is not contended that, had the Tribunal not “failed to consider” the building contract, something might have flowed in favour of the applicants.  The same applies to the submission in relation to the invoices and the bank statements.  The contention that the learned member failed to consider these documents is not correct.  At paragraph [64] he specifically referred to one of these invoices and to the bank records.^[10]  The criticism he made about these documents was as follows:

“There is an invoice from Nardia Plumbing to that effect dated 22 November 2013.  The owners entered into the poorly documented and entirely careless agreement with the builder to save money.  At hearing Mrs Harrison admitted she paid cash to the builder to avoid GST.  I am not persuaded she paid the invoice from Nardia in full either.  There is no record of any payment to Nardia for this in her bank records which are otherwise fairly complete.”

34. The Appeal Tribunal dealt with this matter in a little more detail:

“[42] …The evidence presented by the Harrisons as to the actual completion costs is confusing and incomplete.  It is not possible to rely upon the various spreadsheets, unexplained invoices and unexplained bank statements as evidence of the costs incurred in completing the incomplete work.  There is no statement of evidence of any person from Inspired Construction who might be able to explain exactly what work Inspired Construction carried out and what they were paid for.  The fact that the scope of the works to be performed by Mr Meehan was ill-defined only highlights the deficiencies in the way in which the Harrisons presented their case.

[43] Ultimately, it is a question of the relevance and weight to be given to the evidence contained in the various invoices and bank statements.  The Harrisons chose to present their claim in a particular way.  We conclude, as did the learned member below, that any assessment of damages cannot be undertaken on the basis of the amount claimed by the Harrisons for the costs they paid to have the works completed.”

35. It is not surprising, therefore, that the submission is incapable of linking that alleged failure to any consequence because there was no such failure.
36. The third ground of appeal concerned an asserted “failure to take all reasonable steps to ensure that a party understands the practices and procedure of the Tribunal and/or failure to give due weight to evidence (in the absence of an objection)”.
37. The second part of that ground can be put to one side; as paragraph 21 of the Applicants’ written outline demonstrates, it is nothing more than a repetition of the first and second grounds of appeal.  As to the first part of that ground of appeal, beyond asserting again in paragraph 20 that there has been such a failure, the applicants say nothing more.  The nature of that failure, how it affected the proceedings and the way in which any such effect manifested itself in any irregularity, much less an injustice to the applicants, is unstated.  There is nothing in this ground.
38. The fourth and fifth grounds of appeal assert an error of law “as to [the] appropriate test used for the determination of quantum”.
39. As the written outline reveals, in part this is a complaint that the Tribunal was unfair in permitting the experts to give evidence jointly about the reasonableness of costs associated with completion of the work.  This is mischievous ground because, far from raising an irregularity in the procedure of the Tribunal giving rise to an injustice, but for the learned member’s initiative in permitting this course, the applicants’ claim would rightly have been substantially dismissed.  But for this procedure, they would have failed to prove the substantial part of their damages because of the flawed way by which they chose to approach the conduct of the case.
40. Further, contrary to the applicants’ submissions that the Appeal Tribunal failed to deal with this matter, the Appeal Tribunal expressly considered this ground and disposed of it in paragraphs 57 to 64 of the Appeal Tribunal’s reasons.^[11]
41. The sixth, seventh, eighth, ninth and tenth grounds of appeal which, the applicants contend, the Appeal Tribunal failed to consider, assert failures on the part of the Tribunal to have regard to relevant evidence.  Each of those submissions, as outlined in the applicants’ written outline to the Appeal Tribunal are flawed in the same way as the application for leave to this Court is flawed.  They assert an error but then fail to identify any consequence of that error.  On this application the applicants have failed to demonstrate that any failure on the part of the Appeal Tribunal to consider those matters has led to any material result.  In particular, none of these alleged errors are said to relate to any error in the order that resulted.
42. In short, the applicants’ application for leave to this Court involves nothing more than assertions, some of them wrong, that the learned member at first instance or the Appeal Tribunal made errors of law, errors of fact or failed to consider some arguments that were put up.  The applicants have not demonstrated that which was fundamental, namely that the resulting order of the Appeal Tribunal was wrong.  They have not demonstrated that they have suffered any injustice as a result.
43. For these reasons I would refuse leave to appeal.
44. I would order that the applicants pay the respondent’s costs of the application.
45. McMURDO JA:  I agree that this application for leave to appeal should be refused with costs.  I substantially agree with the reasons of the President.
46. The applicants took their case to the Appeal Tribunal of QCAT upon many grounds.  Some involved questions of law only.  Others involved questions of mixed law and fact.  Questions of the latter kind could be raised only with the leave of the Appeal Tribunal.^[12]  If leave is granted in such a case, the appeal must be decided by way of a rehearing, with or without the hearing of additional evidence as decided by the Appeal Tribunal.^[13]  In deciding such an appeal, the Appeal Tribunal may confirm or amend the decision or set it aside and substitute its own decision.^[14]
47. Where there is an appeal to the Appeal Tribunal on a question of law only, the Tribunal may confirm or amend the decision, set it aside and substitute its own decision or set it aside and return the matter to the Tribunal or other entity which made the original decision.^[15]
48. In this Court it is argued that the Appeal Tribunal should have first considered only the questions of law, and if satisfied that there was such an error, remitted the case for a further hearing, without considering the questions of mixed fact and law.  Indeed it was argued that it ought to have remitted the matter for an entirely new hearing.  Those submissions cannot be accepted.
49. The Appeal Tribunal considered whether leave should be given to appeal for the questions of mixed fact and law.  It decided that there was an error of that kind and that a substantial injustice might be suffered by the applicants if leave to appeal was not granted.  Having concluded that leave should be granted, it proceeded to conduct a rehearing in the way which was described in these paragraphs of its decision:^[16]

“[20] As required by s 147(2) of the QCAT Act we will now proceed to decide the appeal by way of rehearing. Appeals by way of rehearing involve a new determination of the rights and liabilities of the parties, rather than a mere correction of the errors in the determination of the Tribunal below.

[21] An appeal by way of rehearing under s 147 of the QCAT Act is not a rehearing de novo. The Appeal Tribunal must make its own determination on the material before the Tribunal below (supplemented, if necessary by additional evidence if permitted under s 147(2)) with due respect for the findings of fact of the primary Tribunal, and due consideration of the advantages enjoyed by it.

[22] In rehearing the matter we have adopted the learned member’s primary findings of fact other than where those findings have been challenged in these appeals or where there is some doubt as to the findings made. We have otherwise formed our own views on the evidence consistently with the principles applicable in appeals by way of rehearing on the record of proceedings before a primary tribunal.”

(footnotes omitted)

50. The Tribunal was correct to proceed in that way.  This meant that all of the questions raised by the applicants’ appeal were to be considered in the rehearing by the Appeal Tribunal.  However in giving its reasons for the disposition of the appeal, the Appeal Tribunal did not have to discuss distinctly each of those questions, if the reasons sufficiently explained how the Appeal Tribunal reached its conclusion.
51. The applicants had some success in the Appeal Tribunal.  Their award of damages was increased.  But they had sought yet a higher sum, which they wish to pursue by an appeal to this Court.  Their difficulty was that the evidence, in the view of the Appeal Tribunal, did not prove that they had suffered a loss of the extent which they had claimed.  That was a conclusion of fact, which this Court has no power to review.^[17]
52. It is argued that the Appeal Tribunal erred in refusing to allow the applicants to lead further evidence.  They applied for leave to call evidence from the director of the company which had completed the construction.  Neither that person nor anyone else from the company was a witness at the original hearing, for which there was offered no explanation.  Further, the content of the proposed evidence from the director was not disclosed to the Appeal Tribunal.  Not surprisingly, the Appeal Tribunal refused to allow them to call that further evidence.  The Appeal Tribunal’s reasons for the decision, where they explain the refusal to allow further evidence, reveal no error in the exercise of the Tribunal’s discretion.
53. The applicants say that they should have been given an oral hearing by the Appeal Tribunal.  Again, that is a challenge to the exercise of a discretion.  No error is demonstrated in that respect.  In particular, no injustice to the applicants could have been caused by the absence of an oral hearing.  It should be noted that the applicants were not refused leave to call further evidence because the Appeal Tribunal had decided that there was to be no oral hearing.  It was directly the result of the way in which they had conducted their case.^[18]
54. Lastly, it is necessary to say something of the argument that there was a legal error in the award of interest on the applicants’ damages.  Interest was awarded upon the net amount to be paid to them ($26,015.99) from the day after the date of the original decision.  One of the proposed grounds of appeal to this Court was that interest should have been awarded from the date of accrual of the applicants’ cause of action.  As the Appeal Tribunal recognised, the entitlement to interest in this case came from Regulation 34B of the Queensland Building and Construction Commission Regulation 2003 (Qld), which relevantly provides:

“(2) The interest is payable on and from the day after the day that amount became payable until and including the day the amount is paid.”

55. This being a claim for unliquidated damages, an amount became “payable” only when there was an amount which had been fixed by an assessment of damages.^[19]  Regulation 34B is in different terms from s 58(3) of the Civil Proceedings Act 2011 (Qld), which provides that the court may order that there be included, in the amount for which judgment is given, interest at the rate the court considers appropriate for all or part of the period between the date when the cause of action arose and the date of judgment.
56. There being no arguable error of law affecting the decision of the Appeal Tribunal, the application for leave to appeal should be refused.
57. DOUGLAS J:  I agree with the reasons and orders proposed by the President and with McMurdo JA’s reasons.