Nicholls v Kline Industries International Pty Ltd
[2018] QCATA 123
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- Unreported Judgment
- Nicholls v Kline Industries International Pty Ltd[2018] QCATA 123
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Nicholls v Kline Industries International Pty Ltd[2018] QCATA 123
Nicholls v Kline Industries International Pty Ltd[2018] QCATA 123
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Nicholls & Anor v Kline Industries International Pty Ltd [2018] QCATA 123 |
PARTIES: | LYN NICHOLLS (first applicant/appellant) SERENA NICHOLLS (second applicant/appellant) |
| v |
| KLINE INDUSTRIES INTERNATIONAL PTY LTD T/AS KLINE HOMES (respondent) |
APPLICATION NO/S: | APL356-17 |
ORIGINATING APPLICATION NO/S: | BDL056-16 |
MATTER TYPE: | Appeals |
DELIVERED ON: | 23 August 2018 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Senior Member Howard |
ORDERS: |
|
CATCHWORDS: | APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – FROM INTERLOCUTORY DECISIONS – where leave sought to file evidence at hearing – where leave was refused – whether evidence is ‘fresh evidence’ – whether denial of procedural fairness Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 28(2), s 28(3)(e), s 28(3)(a), s 142 |
REPRESENTATION: |
|
Applicant: | Self-represented |
Respondent: | R Duncan, Duncan Solicitors |
APPEARANCES: |
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
REASONS FOR DECISION
- [1]The Tribunal has yet to hear and determine a domestic building dispute in BDL056-16 Kline Industries International Pty Ltd t/as Kline Homes v Lyn Nicholls and Serena Nicholls (the building dispute). Although it has been listed for hearing on several occasions, for reasons that are largely irrelevant to this appeal, the hearing has been adjourned on each occasion.
- [2]It is relevant that the building dispute was listed for a Tribunal hearing for two days commencing 5 October 2017. On 5 October 2017, the Tribunal granted leave to Kline Industries International Pty Ltd t/as Kline Homes (the builder) to amend its application and made directions, including for an Experts Conclave and the disclosure of documents as between the parties. The matter was listed for a five day hearing a later time.
- [3]As a preliminary matter on 5 October 2017 and before the adjournment of the hearing, Lyn and Serena Nicholls (the homeowners) applied for leave to file an affidavit of a Mr Mathew Marshall sworn on 29 September 2017. The affidavit had not been filed in accordance with the Tribunal’s earlier directions for filing of the homeowners’ evidence to be relied upon at hearing. The learned Member made an order on 5 October 2017 refusing the homeowners application to rely upon the ‘fresh evidence’ contained in Mr Marshall’s affidavit.[1]
- [4]Mr Marshall is a licensed builder of some 20 years of experience. He had not met the homeowners until 17 September 2017 when they knocked on his door, (two doors from their home) and introduced themselves. He deposes to when and how he met them and explains that the builder also built his home. He deposes to discussion he had with Mr Kline, wherein Mr Kline told him about difficulties concerning the construction of the homeowners’ house and the finishing of their yard. He deposes to comments made by the builder about the scaffolding costs for the homeowners because their house is on the same side of the street, on similar terrain, two houses down, in negotiating the scaffolding costs for Mr Marshall’s home.
- [5]The homeowners now seek leave to appeal the Tribunal’s interlocutory decision refusing leave to rely upon the evidence of Mr Marshall. Leave to appeal is required because the decision is interlocutory in nature.[2]
- [6]For the reasons explained in the subsequent paragraphs, leave to appeal is granted; the appeal is allowed and the order of the Tribunal refusing leave to the homeowners is set aside.
The grounds of appeal: alleged error of law
- [7]The homeowners essentially argue that although the learned Member had (earlier on 5 October 2017) informed the parties he would determine whether Mr Marshall’s evidence should be admitted following the conclusion of the builder’s evidence, he later made orders refusing its acceptance without affording the homeowners procedural fairness.
Relevant background
- [8]In March 2016, the builder filed an application for a domestic building dispute, asking the Tribunal to make various declarations and orders in its favour relating to the recovery of various amounts totalling $81,761.16 it alleges are owed by the homeowners. The amount includes $29,215.00 for additional scaffolding costs.[3] In essence, the builder contends that the work performed to date satisfies the definition of ‘practical completion’, and accordingly is entitled to the final stage payment under the contract. As discussed earlier, on 5 October 2017, that is, the date the hearing was to commence, the Tribunal granted leave to the builder to amend his original application to include a claim pursuant to s 84 of the Domestic Building Contracts Act 2000 (Qld) to recover an amount for variations including the scaffolding costs claimed.
- [9]The homeowners’ filed a response and counter-application in April 2016, and subsequently, an amended response and counter-application in October 2017 as directed by the Tribunal.[4] The homeowners claim in their counter-application totals some $179,640.00, including $81,000.00 for the completion of building work and other amounts. The homeowners’ refute the builder’s contention that the property has reached ‘practical completion,’ claiming for defective and incomplete works.[5] They also refute the builder’s claim for the additional scaffolding costs. It is contended that by failing to advise the homeowners within a reasonable time of the requirement for additional scaffolding at a further cost, no such claim may be made by the builder and that the contract does not allow for any excess scaffolding fees to be claimed from them.
The Tribunal’s decision
- [10]The hearing on 5 October 2017 was adjourned after some 54 minutes, including an adjournment of 17 minutes during that time.
- [11]Shortly after the hearing commenced the Tribunal raised the preliminary issue concerning Mr Marshall’s affidavit. The brief exchange about it between the Tribunal and the parties is extracted:[6]
MEMBER: … Now, the next matter was you sought leave to file further material, an affidavit by Matthew Marshall and the exhibits to that affidavit.
MS S. NICHOLLS: Yes. Yes, Member. SO the issue with Matthew Marshall’s affidavit is that obviously it was fresh evidence and we had no way of obtaining it. It happened to be that on the 17th of September, he has come forward and identified issues that go directly to the respondent’s matter. In particular, it identifies that Mr Kline, who’d already made some reference to this in previous correspondence, had told Mr Marshall that he made a conscious decision not to complete the build because he thought that it was a waste of his time due to my disability and unable to utilise the - - -
MEMBER: I’ve read that. I’ve read the affidavit. The bulk of it goes to matters of credit which - - -
MS S. NICHOLLS: Yes, and that can be dealt with at cross and closing.
MEMBER: - - - which you can’t call – you can put to Mr Kline.
MS S. NICHOLLS: Yes.
MEMBER: And if he denies, that’s the end of the matter.
MS S. NICHOLLS: Yes. But the other - - -
MEMBER: All right? I - - -
MS S. NICHOLLS: Sorry.
MEMBER: I don’t want to expand on that at the moment. But I will – again, after Mr Kline’s given evidence, I’ll determine whether that affidavit will be admissible. I can’t – don’t see very much in the way of direct evidence that Mr Marshall can give, other than - - -
MS S. NICHOLLS: What about the evidence in which Mr Kline was referring to – and in fact, email correspondence whereby he’s comparing my house to his house - - -
MEMBER: Well, I was going to say - - -
MS S. NICHOLLS: - - - where we’re only two houses apart?
MEMBER: - - - that the evidence as to the similarity of the house and what Mr Marshall did in respect of – sorry, what Mr Kline did in respect of the [indistinct] might be relevant. It’s on the same incline – so - - -
MS S. NICHOLLS: Same incline, two - - -
MEMBER: But certainly - - -
MS S. NICHOLLS: Two houses down.
MEMBER: - - - the bulk of the affidavit is - - -
MS S. NICHOLLS: Turfed.
MEMBER: - - - goes to matters of credit, which – I wouldn’t allow it in on that basis. So I’ll leave that for the moment and we’ll try and get on to the start of the hearing. Anything else?
- [12]Thereafter, other issues were canvassed. Later, after the adjournment of 17 minutes, the Tribunal stated:[7]
MEMBER: That’s not going to happen. All right. I’m going to adjourn this matter and I’ll make some directions about the way it will be conducted in the future. Firstly, vacate that decision I made in respect of Mr Marshall’s affidavit; I am not going to allow that to be filed. I don’t consider it’s relevant to the issues. Any matter that Mr Marshall raises can be put – are issues of credit which can be put to Mr Kline. Other matters that might arise in Mr Marshall’s affidavit can be dealt with by an expert.
Secondly, I will order and direct Mr Kline and his companies to provide financial disclosure for the last three financial years in response to the application under section 84 by him under the Domestic Building Contracts Act 2000. I should preface that – I will allow that application for leave and I will require that disclosure. How I deal with the issue will be determined when I hear the matter.
In respect of the amended response and counter-application or cross-claim by Ms Nicholls, I won’t allow it at this stage. I’ll direct Ms Nicholls to identify the amended parts of that document by underlining it in red and filing two copies in the registry and serving a copy on Mr Kline, so that the amendments – amended part of the claim - - -
MS S. NICHOLLS: Yes, Member.
MEMBER: - - - is clearly identified. It’s impossible to compare the documents at the moment. I’ll direct that the parties’ experts – that’s Mr Simm and Mr Dwyer – attend a conclave at a date to be determined. If they can agree upon a date, all the better. It’s to – the purpose of the conclave will be to identify and clarify areas of agreement and disagreement in respect to the issues in dispute, and the reasons for any disagreement. And following that conclave, they will submit a joint report.
Now, the usual direction will be made that other than the joint report evidence and anything done or said or an admission made at the conclave is inadmissible at any stage of the proceeding…
…
MEMBER: All right. Well, I’ll adjourn this matter to a date to be fixed. Thank you. And I’ll make the formal directions [indistinct] thanks.
- [13]The Tribunal’s brief reasons for refusing to grant the homeowners leave in relation to Mr Marshall’s affidavit reveal that the Tribunal determined that it was not relevant, although the learned Member went on to say that it went to Mr Kline’s credit and that other issues it raised could be dealt with by an expert.
Did the Tribunal observe the requirements of natural justice?
- [14]The relevant events
- [15]The learned Member read the affidavit[8] of Mr Marshall. He considered it was relevant to Mr Kline’s credit about some issues.[9] He also appears to accept that it may have some relevance because of the similarities between building work conducted on Mr Marshall’s property and that of the homeowners given their similar construction style, terrain and close co-location.[10] In particular, the homeowners contend that it is helpful, given the issues they raise about the foreseeability of the scaffolding costs claimed at their property. While apparently acknowledging that the affidavit contained some (although limited) direct evidence,[11] the learned Member indicated that he would not give leave if it went only to Mr Kline’s credit.[12] At one point, he seems to suggest that the evidence can’t be ‘called’, but that it could be put to Mr Kline but that if he (Mr Kline) denied it, then that was the end of the matter.[13]
- [16]Having made those comments and having advised the parties that he didn’t want to expand on that ‘at the moment’ when cutting short the homeowners submissions about whether they should be granted leave, (suggesting more opportunity later for submissions), said he would decide whether to give leave after the builder’s evidence concluded. Instead, the learned Member, without inviting further submissions from the parties stated that he vacated the order earlier made about it and refused the homeowners’ application for leave on the basis that Mr Marshall’s affidavit was not relevant, although proceeding then to explain that matters of credit arising from it could be put to Mr Kline in cross-examination and other matters that might arise from it could be dealt with by way of expert evidence. At the same time, he allowed amendment of the builder’s application to include a claim for variations under the then Domestic Building Contracts Act 2000 (Qld) (the DBC Act).
- [17]What does natural justice require?
- [18]The Tribunal must observe natural justice.[14] The requirements are flexible and the steps required will depend upon the applicable statutory framework.[15] In essence, parties must be given a fair hearing and the decision must not be tainted by bias, either actual or apprehended. The rule against bias is not relevant here. The fair hearing rule requires relevantly, in essence, that a party has the opportunity to know the case upon against him/her, the opportunity to present his/her case, and to make submissions.
- [19]Further, in context, the Tribunal is not bound by the rules of evidence, other than to the extent it adopts them.[16] It must act fairly and according to the substantial merits of the case.[17] It must act with as little formality and technicality as a proper consideration of the matter permits.[18] It must ensure, so far as practicable, that all relevant material is disclosed to it to enable it to decide the proceeding with all relevant facts.[19]
- [20]Was the fair hearing rule complied with?
- [21]The fair hearing rule here applies to the decision to refuse leave in its context. The dispute before the Tribunal was a domestic building dispute. The decision sought to be appealed is an interlocutory decision about whether to admit evidence sought to be filed at what would have been a late stage had the final hearing proceeded on that day. However, the final hearing did not proceed on that day. It was adjourned. The builder was that day given leave to amend his application to include a claim under s 84 of the DBC Act about variations, in particular for the scaffolding.
- [22]For a variation not originally sought by the building owner, the DBC Act provides for the Tribunal’s leave to be sought by a builder to recover an amount for a variation if the building contractor has complied with the requirements of the DBC Act and the ground of unforeseen circumstances (that is, if the variation became necessary because of circumstances that the builder could not reasonably foresee when the contract was formed)[20] applies;[21] or alternatively, only with the Tribunal’s approval.[22] The Tribunal may only approve recovery if it is satisfied either that there are exceptional circumstances or the builder would suffer unreasonable hardship as a result of its non-compliance with the requirements for variations, and that it would not be unfair to the building owner for the builder to recover the amount.[23]
- [23]Mr Marshall’s affidavit deposed among other things to the discussions he had with the builder about scaffolding costs at the homeowners’ site. The homeowners submit that his evidence is relevant to the foreseeability of the circumstances occasioning the additional scaffolding costs. Although the submission was not made, if foreseeability is ultimately not relevant to the Tribunal’s determination, Mr Marshall’s evidence may be relevant to fairness to the homeowner. The Tribunal stopped the homeowners from completing their submissions, indicating that it did not want to hear more submissions at that point because it did not intend to make its decision about the application until after Mr Kline’s evidence concluded. By inference, the homeowners’ further submissions would be heard later.
- [24]Since the Tribunal is not bound by the strict rules of evidence, it may receive into evidence documents that may not be allowed in evidence in a court where those rules apply. Parties in QCAT often represent themselves. They are not acquainted with the rules of evidence. They often file witness statements and documents that would not be acceptable in a court that is bound by the rules of evidence. In the usual course, in determining any proceeding, the Tribunal assesses the information placed before it and attaches weight to the particular evidence received having regard to its relevance and probity to the issues to be determined. Although formal objections to evidence are sometimes taken by lawyers acting for parties, the Tribunal would rarely exclude evidence on the basis that it is objectionable, absent the application of the rules of evidence, except on the basis that it is irrelevant. Relevance is determined by logic.[24] Evidence is relevant if it may affect the assessment to be made by the Tribunal about the existence of the probability of a fact in issue, but relevant facts may also provide context for understanding the story told.[25]
- [25]On what basis was leave refused?
- [26]In the building dispute, the rules of evidence have not been explicitly adopted by the Tribunal and nor are they likely to be. The transcript suggests that the learned Member initially considered whether to exclude the affidavit of Mr Marshall on the basis of the rules of evidence, in that he said it would not be allowed if it was directed to the credit of the builder alone. Broadly speaking, the law or rules of evidence, include rules about the manner in which issues of credit may be dealt with.[26] It is not necessary to consider those rules. Those rules did not apply in the Tribunal proceedings.
- [27]According to the learned Member’s brief reasons for decision, he refused leave on the basis that the affidavit was not relevant because issues of credit[27] could be put to Mr Kline and other matters that might arise can be dealt with by expert evidence. It is implicit from the learned Member’s reasons for decision that he considered the affidavit of Mr Marshall relevant to the credit of the builder and other issues, although those other matters could be dealt with by expert evidence. In respect of the latter, it appears that the Tribunal referred to the costs of scaffolding relevant to the claim for variations by the builder. For the reasons already explained, it was not fresh evidence. Mr Marshall is not an expert witness for the purposes of the proceedings. However, his evidence about the scaffolding appears to be relevant, or potentially, relevant to the issues the Tribunal must decide under s 84 of the DBC Act. It also appears that the builder’s credit is, or may be, in issue.
- [28]Had the homeowners filed the affidavit of Mr Marshall in compliance with the Tribunal’s directions to file evidence, there is no question that it would have been accepted for filing, (although at hearing its relevance may, of course, have been objected to/challenged at the hearing by the builder). If the events had unfolded in this manner, the Tribunal may have struck it out or more likely simply noted the objection but allowed the affidavit to remain in evidence, but attached weight as it saw fit in determining the proceeding.
- [29]For the reasons explained, although the affidavit may ultimately add little to the homeowners’ case, it is not irrelevant - as the learned Member’s reasons for decision acknowledge.
- [30]In the overall circumstances discussed, the decision to refuse leave to rely upon Mr Marshall’s affidavit, and after indicating further submissions would be allowed without providing a further opportunity for submissions to the homeowners, it is reasonable to conclude that the learned Member erred in observing natural justice by refusing to allow the homeowners the an opportunity to file the affidavit of Mr Marshall in the usual course. I find that the Tribunal so erred.
- [31]As an aside, I make the observation that the homeowners’ oral submissions and Tribunal’s order refer to refusing leave to rely upon ‘fresh evidence.’ It seems that consequently, the homeowners’ submissions on appeal refer to principles set out by the Court of Appeal in relation to the introduction of fresh evidence on appeal. However, the building matter was not on appeal. It was then yet to be determined, and remains so. The affidavit of Mr Marshall is not fresh evidence, but evidence sought to be filed other than in compliance with the Tribunal’s earlier directions, in the building dispute to be heard in the Tribunal’s original jurisdiction. To the extent the learned Member considered Mr Marshall’s affidavit was fresh evidence, he was in error. That said, it is not apparent that he applied the principles applicable to deciding whether to grant leave for fresh evidence on appeal. If he did so, that would also be an error of law in applying the incorrect test.
Orders
- [32]For the reasons discussed, leave to appeal the interlocutory decision is granted and the appeal is allowed. Order 7 of the Tribunal’s orders dated 5 October 2017 (as amended on 17 November 2017) is set aside. The proceeding is remitted to the Tribunal for it to make directions for the filing of Mr Marshall’s affidavit.
Footnotes
[1] Orders and directions dated 5 October 2017 and later amended on 17 November 2017.
[2] Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 142.
[3] Application for a domestic building dispute in BDL056-16 filed 9 March 2018.
[4] Direction 5 of the Tribunal directions in BDL056-16 dated 5 October 2017.
[5] AL Builders Pty Ltd v Fatseas [2015] QCAT 166 [88].
[6] Transcript of Proceedings, Kline Industries International Pty Ltd t/as Kline Homes v Serena Nicholls (Queensland Civil and Administrative Tribunal, BDL056-16, 5 October 2017) I-3, line 39 – I-5, line 3.
[7] Transcript of Proceedings, Kline Industries International Pty Ltd t/as Kline Homes v Serena Nicholls (Queensland Civil and Administrative Tribunal, BDL056-16, 5 October 2017) I-11, lines 9-40; I-14, lines 42-43.
[8] Ibid I-4, lines 4-5.
[9] Transcript of Proceedings, Kline Industries International Pty Ltd t/as Kline Homes v Serena Nicholls (Queensland Civil and Administrative Tribunal, BDL056-16, 5 October 2017).
[10] Ibid.
[11] Ibid I-4, lines 21-24.
[12] Ibid I-5, lines 1-3.
[13] Ibid I-4, lines 4-13.
[14] QCAT Act s 28(3)(a).
[15] Kioa v West (1985) 159 CLR 550 at 584-585.
[16] QCAT Act s 28(3)(b).
[17] Ibid s 28(2).
[18] QCAT Act s 28(3)(d).
[19] Ibid s 28(3)(e).
[20] DBC Act s 84(5).
[21] DBC Act s 84(3)(a).
[22] DBC Act s 84(3)(b).
[23] DBC Act s 84 (4).
[24] Piddington v Bennett and Wood Pty Ltd (1940) 63 CLR 533, 558-9.
[25] HML v R (2008) 235 CLR 334, per Gleeson CJ.
[26] Wren v Emmett Contractors Pty Ltd (1969) 43 ALJR 213, 221.
[27] Transcript of Proceedings, Kline Industries International Pty Ltd t/as Kline Homes v Serena Nicholls (Queensland Civil and Administrative Tribunal, BDL056-16, 5 October 2017) I-11, line 13.