Dona Homes v Stevens [2005] VSC 499
In the Supreme Court of Victoria, Habersberger J allowed a builder's appeal from an order made in the Domestic Building List of the Victorian Civil and Administrative Tribunal, holding that the builder was not allowed a reasonable opportunity to call evidence or to examine and cross-examine witnesses in respect of a rectification quotation, contrary to section 102(1)(a) and (b) of the Victorian Civil and Administrative Tribunal Act 1998, and that there was a breach of the rules of natural justice contrary to section 98(1)(a), where the quotation raised new claims and was expert evidence (or at least evidence requiring an outline) not filed and served as directed [13], [16], [18], [20], [21].
What the court decided
The builder agreed with Mr and Mrs Stevens to build a house at Tarneit for a contract price of $167,270 [1]. The Tribunal ordered the builder to pay Mr Stevens $31,690.40, and the builder appealed by leave granted by a Master [2]. It was not in issue that, despite its informal procedure, the Tribunal must act fairly and give each party a reasonable opportunity to call evidence and examine witnesses [4]. Where, as here, the parties were not represented, there was a special burden on the Tribunal to ensure that those obligations were complied with [4]. It was also accepted that such an appeal succeeds only if the denial of procedural fairness could have caused real injustice by affecting the outcome [4].
The Tribunal's directions required each party to file and serve its documents, any expert reports and outlines of evidence of its witnesses [5]. The proprietors' points of claim particularised the defects in an unpriced list of 28 items [6]. Mr Stevens served no expert reports, while the builder served expert reports from Mr Lee and Mr Brown [7]. Mr Lee concluded that only eight of the 28 items required further work, at an estimated total cost of $613.75 [7]. At the hearing, where neither party was legally represented, Mr Stevens produced a quotation from a builder, Mr Barber, who gave evidence by telephone [8]. On the second day Mr Stevens replaced that quotation with another listing 22 items totalling $31,690.40 [9]. The Tribunal accepted Mr Barber's evidence and ordered payment of exactly that amount [13].
Habersberger J found that seven of the 22 items were new claims and that a further two were partly new [16]. The seven new items totalled $18,375.68, or 58% of the amount ordered to be paid [16]. His Honour held that Mr Barber, in saying which defects needed rectifying and that the costs were fair and reasonable, was purporting to give expert evidence [18]. His report, which should have been filed and served before the hearing, was therefore required to comply with Practice Note VCAT 2: Expert Evidence, and it failed to do so in numerous respects [18]. In any event, even if Mr Barber was not giving expert evidence, the Tribunal's directions still required an outline of his evidence to be filed and served before the hearing [18]. By withholding the list and providing no report or outline from Mr Barber, the proprietors were in flagrant breach of the directions [19]. Even if the breach arose from a failure to appreciate the document's significance, his Honour said, the builder ought not to have had to meet a case it had not been told about [19].
Adopting earlier authority, his Honour said that at its most basic a fair trial involves a party knowing "what case it must meet before the hearing commences" [20]. The Tribunal ought to have given the builder the opportunity to investigate and respond to the new allegations [20]. Instead it required the builder to continue without any adjournment when a large part of the claim against it was new [20]. The proceeding had therefore miscarried and the appeal was allowed on the statutory grounds [21]. His Honour found it unnecessary to detail the builder's other complaints about the conduct of the hearing, or to consider its other grounds of appeal [12], [22]. Since there was to be a rehearing, he expressed no view on those matters [22]. The Tribunal's order was set aside and the matter remitted to the Tribunal, differently constituted, for rehearing [23].
Why it matters
Directions in the Domestic Building List are not mere formalities, and a party that produces new defect items or an unfiled expert costing at the hearing risks having any order in its favour set aside. The obligation to give the other side a fair opportunity to meet such material rests on the Tribunal itself, which should allow time to investigate and respond, if necessary by an adjournment [20]. The decision proceeds on principles that were not in dispute, including the accepted requirement that the unfairness could have affected the outcome [4].
Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.