| | | | | NCAT Legal Bulletin Issue 7 of 2019
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| The NCAT Legal Bulletin provides a summary of relevant and interesting case law of significance to the work of the NSW Civil and Administrative Tribunal.
This issue of the Legal Bulletin features summaries of recent decisions from the High Court of Australia and the NSW Court of Appeal, including: - Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29
- Mann v Paterson Constructions Pty Ltd [2019] HCA 32
- New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231
In addition, it contains links to recent bulletins published separately by the Court of Appeal, providing summaries of the following cases in New South Wales and other Australian appellate jurisdictions:
- Cappello v Road and Maritime Services [2019] NSWCA 227
- Ah-Chee v Stuart [2019] FCAFC 165
- Awabdy & Anor v Electoral Commission of Queensland & Anor [2019] QCA 187
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| Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29
4 September 2019 - Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ
In brief: The High Court unanimously allowed the appeal from the Court of Appeal of the Supreme Court of New South Wales, holding that the first respondent, a barrister, was not entitled to have the appellant pay her costs for the first instance proceedings.
As a general rule, a self-represented litigant cannot obtain any recompense for the value of his or her time spent in litigation. The decision in London Scottish Benefit Society v Chorley (1884) 13 QBD 872 gave rise to the ‘Chorley exception’, which provides that a self-represented litigant who happens to be a solicitor may recover his or her professional costs of acting in litigation ([1]). Here, the High Court unanimously held that the Chorley exception should not be extended to barristers. Further, a majority (Nettle J dissenting) held that the Chorley exception should not be recognised as part of Australian law.
The majority, comprised of Kiefel CJ, Bell, Keane and Gordon JJ, noted that the Chorley exception had ‘rightly been described’ by the High Court as ‘anomalous’ (Cachia v Hanes (1994) 179 CLR 403 at 411) and found that, given this, ‘it should not be extended by judicial decision to the benefit of barristers’ ([2]-[3]). More broadly, their Honours found that the Chorley exception ‘is an affront to the fundamental value of equality of all persons before the law’, and ‘cannot be justified by the considerations of policy said to support it’. Accordingly, they found ‘it should not be recognised as part of the common law of Australia’ ([2]-[3], Gageler and Edelman JJ agreeing at [63] and [93] respectively).
In a separate decision, Nettle J agreed with the plurality that the Chorley exception should not extend to barristers ([70], [79]), but qualified that he did not consider ‘that there is need or justification to decide as part of this matter that the Chorley exception should be abolished’ ([70]). His Honour described the exception as an ‘undesirable’ rule of ‘long standing’, but not ‘anomalous’ or an ‘affront to the equality of litigants before the law’ ([71]-[72]). Further, his Honour considered the potentially wide ramifications of abrogating the exception to the general rule as ‘of a nature and extent that only Parliament is competent to measure and balance’ ([72]-[73]).
Read the decision on the High Court of Australia website.
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| Mann v Paterson Constructions Pty Ltd [2019] HCA 32
9 October 2019 - Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ
In brief: The High Court unanimously allowed the appeal from the Court of Appeal of the Supreme Court of Victoria, which itself was an appeal from the Victorian Civil and Administrative Tribunal (VCAT). The appeal concerned remuneration for work done under a contract to which the Domestic Building Contracts Act 1995 (Vic) (the DBC Act) applied.
Facts
Mr and Mrs Mann (the Owners) entered into a ‘major domestic building contract’ (DBC Act, s 3) with Paterson Constructions Pty Ltd (the Builder) to construct two townhouses on the Owners’ land for a fixed price of $971,000. At various points while the work was being done, the Owners orally requested 42 variations to the work, which the Builder carried out. Neither party gave written notice for any of the variations under s 38 of the DBC Act ([120]). That section requires that, should a building owner wish to vary the plans or specifications set out in a major domestic building contract, they give the builder a notice outlining the variation (s 38(1)). In response, the builder, unless it reasonably believes the variation will not ‘cause any delay’ or ‘add more than 2% to the original contract price’ (s 38(2)), must give a notice either stating the ‘effect the variation will have on the work as a whole’ and estimating any delay or effect on the contract price, or stating that it refuses or is unable to carry out the variation (s 38(3)). Section 38(6) further provides that builders are not entitled to recover any money in respect of a variation unless the notice requirements are complied with (s 38(6)(a)), or VCAT is satisfied (s 38(6)(b)):
- that there are ‘exceptional circumstances’ or the builder ‘would suffer a significant or exceptional hardship’; and
- that ‘it would not be unfair to the building owner for the builder to recover the money’.
If the conditions in s 38(6) are met, s 38(7) provides that a builder is entitled to recover ‘the cost of carrying out the variation plus a reasonable profit’.
VCAT claim and appeals
A dispute between the parties prompted the Builder to claim that the Owners had repudiated the contract, and to purport to terminate the contract by accepting that repudiation ([1], [126]). The Builder brought a claim in VCAT for damages for breach of contract or, alternatively, restitution for work and labour done and materials supplied on a quantum meruit basis (meaning the ‘reasonable value of work performed’) ([1], [5], [135]). VCAT found that s 38 did not apply to a claim for restitution, and ordered that the Owners pay the Builder for the reasonable value of the work and materials associated with the variations and the benefit the Owners received ([138]-[139]). The Owners’ appeals to the Supreme Court of Victoria, and then to the Court of Appeal, were dismissed ([144]-[148]).
High Court finding
The High Court allowed the appeal, finding that s 38(6) excludes restitution for variations not implemented in accordance with ss 38(2) and (3). As articulated in the judgment of Nettle, Gordon and Edelman JJ (at [160]) (with which Kiefel CJ, Bell and Keane JJ agreed at [4]):
‘Upon the proper construction of these provisions, they exclude the availability of restitutionary relief for variations implemented otherwise than in accordance with s 38. In the event of failure to comply with the requirements of either s 38(1) and (3) or s 38(1) and (2), a builder's only right of recovery for variations under a domestic building contract is under s 38(6)(b) (if VCAT is satisfied of the matters for which it provides) for the amounts prescribed by s 38(7).’
In this matter, there had been no compliance with s 38(1), (2) or (3), and, though their Honours acknowledged the possibility that the Builder ‘could have satisfied VCAT of the matters referred to in s 38(6)(b)’, VCAT did not undertake the exercise required by that subsection ([161]).
Although they agreed with this reasoning regarding the application of the DBC Act, Kiefel CJ, Bell and Keane JJ allowed the appeal on a separate ground, namely, that ‘the Court of Appeal erred in holding that the respondent builder, having terminated a major domestic building contract upon the repudiation of the contract by the [appellants], was entitled to sue on a quantum meruit for the works carried out by it’ (at [2]-[4]).
In particular, Kiefel CJ, Bell and Keane JJ noted the Builder’s claim for restitution was based on a Privy Council case, Lodder v Slowey [1904] AC 442, previously applied by a number of Australian intermediate appellate courts ([5]). Their Honours found that Lodder v Slowey should no longer be applied, given its reliance on the ‘rescission fallacy’ – the notion that, when a contract is repudiated and the repudiation accepted, the contract is rescinded ‘ab initio’, and a plaintiff is entitled to recover restitution for the reasonable value of services regardless of the contract price (or any other terms of the contract) ([5]-[6], [50]). Their Honours found this principle to be inconsistent with the High Court’s previous finding in McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-477 (cited at [9]), where Dixon J (Rich and McTiernan JJ agreeing) said:
‘When a party to a simple contract, upon a breach by the other contracting party of a condition of the contract, elects to treat the contract as no longer binding upon him, the contract is not rescinded as from the beginning. Both parties are discharged from the further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected […] [W]hen a contract, which is not void or voidable at law, or liable to be set aside in equity, is dissolved at the election of one party because the other has not observed an essential condition or has committed a breach going to its root, the contract is determined so far as it is executory only and the party in default is liable for damages for its breach.’
In this case, the Builder’s rights to be paid some instalments of the contract price had accrued before the contract was terminated and, although the Builder was entitled to be paid those instalments for that work, it was not entitled to claim greater payments by way of a restitutionary claim for quantum meruit ([27]).
Kiefel CJ, Bell and Keane JJ accepted that there may be some cases in which ‘justice will not be done without a restitutionary claim’. However, they noted (at [53]):
‘"There will generally be no need to have recourse to a remedy in restitution" where a claim in contract is available (Goss v Chilcott [1996] AC 788 at 797). In the present case, there is no good reason to consider that damages for breach of contract would fail to meet the justice of the case such that a restitutionary claim for quantum meruit should be available. It is not necessary to consider the position in other contexts or with respect to other restitutionary claims as the present case is concerned only with a claim for remuneration for work and labour done under a contract terminated for repudiation or breach.’ (emphasis added)
As a result of the High Court decision, the matter was remitted to VCAT, where the Builder’s right of recovery in respect of the variations would be limited to the circumstances in s 38(6)(b) and the amount determined by s 38(7) ([219]). In respect of the remainder of its claim (excluding variations), the Builder would be entitled to recover, for the completed stages of the contract, the amount due under the contract for the completion of each stage or damages for breach, and for the uncompleted stages, damages for breach or restitution for work and labour done and materials supplied (not exceeding a fair value calculated in accordance with the contract price or the appropriate part thereof) ([177], [215]).
Read the decision on the High Court of Australia website.
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| | New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231
19 September 2019 - Bell P, Ward JA and McCallum JA
In brief: The Court of Appeal, by majority (McCallum JA dissenting), allowed the appeal from the Supreme Court of New South Wales, which itself was an appeal from a decision of the Appeal Panel of the New South Wales Civil and Administrative Tribunal (NCAT or the Tribunal). In the course of its reasoning, the Court of Appeal provided guidance highly relevant to the adequacy of reasons in the NCAT context. President Bell’s is the primary judgment.
Facts
The appellant landlord and respondent tenant were parties to a social housing tenancy agreement within the meaning of the Residential Tenancies Act 2010 (NSW) ([2]-[3]). The appellant was convicted of cultivating cannabis at the property, prompting the landlord to apply to NCAT to have the tenancy terminated ([11]-[12]). However, the Tribunal found that s 154D(3)(b) of the Residential Tenancies Act was engaged, as the tenant suffered from a disability (namely, post-traumatic stress disorder) within the meaning of the Anti-Discrimination Act 1977 (NSW) and a termination order would likely result in undue hardship ([14]). This meant that s 154D(1) and (2) did not apply, and the Tribunal was not required to make a termination order. While the Tribunal still had discretion to make a termination order under s 91 for use of the premises for illegal purposes, it declined to terminate the tenancy at that time. The tenant was subsequently convicted of further offences of the same nature, prompting another application to NCAT for termination ([15]-[16]). On this occasion, the Tribunal found that s 154D(3)(b) was not engaged, as the tenant would not suffer undue hardship if the tenancy was terminated ([18]). Further, NCAT found that even if that section was engaged, it would exercise its discretion under s 91 to terminate the tenancy, having regard to the ‘whole of the circumstance’ ([25]).
NCAT claim and appeals
The tenant appealed the decision, first to the NCAT Appeal Panel and then to the Supreme Court. The primary judge found it was not apparent from the Tribunal’s reasoning that it had taken ‘hardship’ (a mandatory consideration under s 91) into account, nor how it took ‘hardship’ into account in exercising the s 91 discretion ([41]). Moreover, the primary judge agreed with the Appeal Panel that the Tribunal erred in its interpretation of ‘undue hardship’ in s 154D(3)(b), and that it was questionable whether the Tribunal could have exercised its s 91 discretion unaffected by this error ([47], [49]).
The landlord sought leave to appeal to the Court of Appeal. The issues on appeal were ([56]):
- whether the Tribunal had failed to consider a mandatory relevant consideration such that the exercise of the s 91 discretion miscarried;
- whether the Tribunal failed to indicate that the process of evaluation for the purposes of s 91 had been properly carried out such that the discretion miscarried; and
- whether the Tribunal’s reasons were inadequate for failing to indicate whether the errors in (1) or (2) occurred.
Court of Appeal finding
The Court unanimously granted leave to appeal and, by majority, allowed the appeal, holding that:
- the Tribunal’s reasons showed that it did take hardship into account as a mandatory relevant consideration ([79], [109]);
- the Tribunal’s reasons did sufficiently explain how hardship was taken into account ([79], [94]-[98], [109]); and
- the Tribunal’s reasons were not inadequate ([99], [109]).
In addition, the Court found that, while the Tribunal’s consideration of ‘fault’ in assessing ‘undue hardship’ under s 154D(3)(b) was erroneous, fault was a relevant consideration in the exercise of the discretion under s 91 ([33], [84]-[99], [109]).
In his judgment, Bell P provided the following guidance on what constitutes adequate reasoning on the part of tribunals:
- The appellate function does not consist of inspecting reasons with a fine tooth-comb to identify any error, and there should be a degree of tolerance for loose language and minor mistakes in phrasing ([77]).
- What is required is to consider whether the text of the reasons, read fairly and as a whole, conveys what needs to be conveyed (see generally [77], [88]-[93]).
- While all decision makers should aspire to high-quality decision-making, the standard of ‘adequate’ reasons is not perfection. Rather, the question to be asked is whether the minimum acceptable standard in the circumstances has been met (see [66], [77]).
- The quantity and quality of reasons required will depend on circumstances such as the nature of the decision maker (e.g. whether a court or tribunal), the nature of the case, and the nature of the power being exercised ([67]-[68]).
- In particular, the quantity of reasons required of NCAT members must be considered in light of the substantial workload and time pressures of NCAT. In these circumstances, a ‘more relaxed standard of review of reasons’ by appellate bodies is generally considered appropriate ([70]).
Bell P and Ward JA also made remarks in obiter about the source of the obligation to provide reasons, expressing some doubt that there is a duty to provide reasons unless expressly required by statute (see [54]–[55], [71]-[72] and [111]-[114]). While agreeing to leave the question of the source of a general obligation on NCAT to provide reasons, outside a request under s 62 of the NCAT Act, open (as the issue was not argued before them):
- Bell P observed that s 62, on its proper construction, might be thought to imply that reasons are not required, absent a request for reasons by a party under that section. The President indicated that, nonetheless, s 62(3) supplies ‘important guidance’ as to what the Tribunal should set out in reasons it chooses to give without a request ([54]-[55]).
- Ward JA left open whether there is a common law obligation for NCAT to give reasons (as was found in Collins v Urban [2014] NSWCATAP 17). However, her Honour remarked that s 62 ‘does not in terms contemplate that reasons will necessarily be given’ in the absence of a request, and in those circumstances, noted it ‘should not be assumed that […] there is an implied statutory obligation (let alone an obligation at common law) on the part of the Tribunal to do so’ ([111]-[114]).
The obiter remarks from Bell P and Ward JA put the Appeal Panel decision in Collins v Urban (to the extent that decision indicates there is a common law duty to provide reasons outside a s 62 request) in doubt.
Read the decision on the NSW Caselaw website.
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| | The Court of Appeal publishes a regular bulletin containing summaries of its latest decisions of interest, as well as those of other appellate courts in Australia and the Asia Pacific. Below are links to several such decisions from recent bulletins.
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| Cappello v Road and Maritime Services [2019] NSWCA 227
ADMINISTRATIVE LAW – compulsory acquisition of property for the purpose of the construction of a tollway – validity of proposed acquisition notices issued – statutory authority of RMS to acquire land under s 177 of the Roads Act 1993 (NSW)
STATUTORY INTERPRETATION – Roads Act 1993 (NSW), s 177 – meaning of “the purposes of this Act” – whether “the purposes of this Act” are confined to the objects described in s 3 of the Act
Read the decision on the NSW Caselaw website.
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| New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231
LEASES AND TENANCIES – Social Housing Tenancy Agreement – Agreement terminated by order of NCAT pursuant to s 91 of Residential Tenancies Act – whether termination would occasion undue hardship to tenant – meaning of undue hardship in context of Residential Tenancies Act – discretion to terminate notwithstanding undue hardship – whether NCAT had regard to hardship in exercise of its discretion – adequacy of reasons for exercising discretion
ADMINISTRATIVE LAW – requirement for NCAT to give reasons – adequacy of reasons for making of a discretionary decision to terminate a social housing tenancy agreement – whether NCAT had regard to hardship to the tenant of termination – whether reasons for decision adequately disclosed how hardship was taken into account
TRIBUNALS – New South Wales Civil and Administrative Tribunal – required to give reasons – adequacy of reasons – reference to “all of the circumstances of the case”
Read the decision on the NSW Caselaw website.
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| Ah-Chee v Stuart [2019] FCAFC 165
PRACTICE AND PROCEDURE – application for leave to appeal from interlocutory judgment of primary judge in which orders were made, based on cultural and customary concerns of claimant groups, in relation to the evidence in proceedings for the determination of overlapping claims of native title – insufficient doubt in correctness of the orders and supporting reasons of the primary judge to warrant leave to appeal being granted – no arguable House v The King (1936) 55 CLR 499 error identified – no question of general principle identified to warrant appellate intervention on a matter of practice or procedure – leave to appeal refused.
Read the decision on the Federal Court of Australia website.
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| Awabdy & Anor v Electoral Commission of Queensland & Anor [2019] QCA 187
CONSTITUTIONAL LAW – OPERATION AND EFFECT OF THE COMMONWEALTH CONSTITUTION – INCONSISTENCY OF LAWS (CONSTITUTION, S 109) – GENERALLY – TEST FOR INCONSISTENCY – where the primary judge made a declaration that ss 290 and 291 of the Electoral Act 1992 (Qld) are not inconsistent with ss 314AB and 314AB of the Commonwealth Electoral Act 1918 (Cth) within the meaning of s 109 of the Constitution – where the provisions concern the disclosure to officials of payments made to political parties – where the Court has to consider the meaning and effect of the Queensland and Commonwealth provisions – whether the Queensland and Commonwealth provisions are directly or indirectly inconsistent with each other.
Read the decision on the Australasian Legal Information Institute (AustLII) website.
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| | DISCLAIMER: This publication has been prepared for information purposes only. The NCAT Legal Bulletin should not be relied on as legal advice nor is it a substitute for reading the decisions in full. NCAT does not accept any liability to any person for the information (or the use of the information) which is provided in this publication.
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