Kostas & Anor v HIA Insurance Services Pty Limited t-as Home Owners Warranty

[2010] HCATrans 57

[2010] HCATrans 057

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney     No S273 of 2009

B e t w e e n -

PETER KOSTAS

First Applicant

CHRISTINE KOSTAS

Second Applicant

and

HIA INSURANCE SERVICES PTY LIMITED T/AS HOME OWNERS WARRANTY

First Respondent

CONSUMER, TRADER AND TENANCY TRIBUNAL

Second Respondent

Application for special leave to appeal

GUMMOW J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 MARCH 2010, AT 10.26 AM

Copyright in the High Court of Australia

MR J.T. GLEESON, SC:   May it please the Court, I appear with MR R.J. CARRUTHERS for the applicants.  (instructed by Pryor Tzannes & Wallis)

MR M.S. JACOBS, QC:   May it please your Honour, I appear together with my learned friend, MS J. OAKLEY, for the first respondent.  (instructed by Mills Oakley Lawyers)

GUMMOW J:   There is a submitting appearance for the Tribunal, which is the second respondent.  Yes, we will be assisted to hear first from you, Mr Jacobs.

MR JACOBS:   Your Honour, the issues that were determined on appeal in the Court of Appeal are summarised in the headnote of the judgment.  May we just take your Honours to that.  This is the judgment of the Court of Appeal.  That would be at application book 98 and 99, lines 45, 10 to 20.  May we take your Honours to that.  It is our submission that in order to enable the appellants to succeed in this appeal, if leave is granted, the appellants must succeed on all the issues (ii), (iii), (iv) which is the gateway point, and (v) on page 99 of the application book.  The holdings of the Court of Appeal are summarised at page 99, line 30 and page 101, line 30.  It is our submission that they are correct and they do not reflect any error of law or sufficient error to attract the special leave jurisdiction of this Court.

The Kostas summary of argument your Honours will find at application book 163 and consists of four points.  Now, they are four points only and, in our submission, there is no substance in any of them.  May we take your Honours to page 163.  Your Honours will see that the four points in the applicants’ summary of argument are those listed on that page.  There are no other issues which the applicants seek to have agitated in this Court.  Now, we say that each one of these points flies in the face of established principles of law.

Point No 1 refers to the submission that a question with respect to a matter of law is confined strictly to a matter of law.  However, there was no issue of law identified in the grounds of appeal before Justice Rothman.  It is an established principle in New South Wales that in an appeal under section 67 the points of law are to be identified, particularly in the notice of appeal.  May we, with respect, take your Honours to the notice of appeal before Justice Rothman.  Your Honours will find this at page 167, lines 20 to 30.  Your Honours will not find any point of law whatsoever identified in that notice of appeal and, in our respectful submission, that is the end of the matter. 

All the issues taken at page 167, lines 20 to 30 are arguments in regard to facts which were specifically retained by the legislature for determination by the Tribunal.  It is important for your Honours to understand that section 67 deals with a question of law and not issues of fact.  The points of law have to be identified in the appeal.  Your Honour will see that not one ground of appeal before Justice Rothman related to any question of law.  They all took issue with the findings of fact of the Tribunal.  In our respectful submission, that would have been the end of the matter and Justice Rothman really would have had no jurisdiction to deal with it.  What Justice Rothman did is he set about an odyssey of fact determination and that was not within his Honour’s powers. 

We make the submission that there is no substance in the gateway point.  We draw your Honours’ attention respectfully to paragraphs [39] and [48] of B & L Linings and also paragraph [68] where Patrick Operations Pty Ltd v Comcare is cited.  The identified point of law, as your Honour presiding held in the Skypak Case, is the point on appeal but there were no such points identified.  The gateway point is really, with respect, an academic point within the context of this application because fundamentally there were no points of law identified in the grounds of appeal before Justice Rothman.

In other words, even if a wide view is the correct view of the powers of the New South Wales Court of Appeal, its jurisdiction to exercise the wide power by revisiting all other points of law and findings of fact is predicated upon an error of law by the Tribunal.  No error of law, as such, is identified in the grounds of appeal.  It is our submission that consequently the appeal was incompetent.

HEYDON J:   Is it not an error of law in resolving a contractual dispute they ought to take into account a relevant clause of the contract?

MR JACOBS:   Yes, but that point was never taken, as Justice Basten held in his ‑ ‑ ‑

HEYDON J:   Does that matter?

MR JACOBS:   It does, your Honour, because there is a line of authority which says that if a point is not raised within the context of the Tribunal hearing either directly or indirectly, there is no point of law decided by the Tribunal.  The Tribunal has to decide the point.

HEYDON J:   The Tribunal mentioned the point, did it not?

MR JACOBS:   But it did not decide the question as to whether or not clause 27 had been complied with in the sense that the notice for an extension of time fell within the provisions of that clause.  That was not a point taken in the Tribunal.  The Tribunal did not decide that issue and, with respect, Justice Basten’s decision that therefore that point did not arise is correct.  In any event, your Honour, let us assume I am wrong on that point, let us assume that the clause 27 point was alive and well before the Tribunal, Justice Rothman was bound by the findings of the Tribunal that in any event there was no breach of the contract by the builder and those findings of fact were not challengeable before Justice Rothman.  May we just list those points.

At application book page 122, line 30, the Tribunal rejected the evidence of Mr Kostas.  That was a question of fact.  At application book page 123, lines 30 to 40, the Tribunal found that there were 42 building items that were outstanding.  Five were fixed within a few days, leaving only three.  So the argument was about three building items.  At application book page 123 the contract, so found the Tribunal, had four months to run and they had four months, therefore, to attend to the three items that were left outstanding.  That was a finding of fact by the Tribunal and the legislation did not allow a challenge on a point of law in regard to those findings of fact.

At application book page 123, the Tribunal found that major progress was dependent upon the owner fulfilling the owner’s obligations under the building contract.  On the same page, the Tribunal found that the builder was on site attending to matters within his responsibility.  On the same page, the Tribunal found that the builder intended to proceed with the work.  On page 125, your Honours will see a further finding of fact at lines 30 to 40.  We say that the whole of this exercise before your Honours today is really of academic interest only.  In order to enable my learned friends to get to base one, they have to challenge those findings of fact, and they cannot.  They are bound by them. 

The purpose of the Act and the appeal provisions under section 67 was never to have a revision of that fact‑finding competence of a specialised Tribunal.  That would defeat the entire purpose of this kind of legislation which is designed to provide a quick and cheap resolution to building disputes.  Again I repeat, with respect, your Honour, there were three building items left that had to be attended to.  The builder was on site, he was attending to it.  He could not attending to it because the owner had not fulfilled the owner’s obligations under the contract.  My learned friend is bound by those findings of fact and he cannot elevate a challenge in regard to those findings of fact into some decision of the Tribunal on a point of law.

GUMMOW J:   The findings stated at page 9 of the application book in the decision of the Tribunal were:  one, the owners did not validly terminate; two, to the contrary, they repudiated.

MR JACOBS:   Yes, but your Honour has to go further, with respect, and have a look at the findings at page 122, line 30.  Perhaps I have gone over these too quickly.  These are Justice Basten’s summaries of the findings of fact of the Tribunal.

GUMMOW J:   I know that.  I am looking at what the Tribunal said.

MR JACOBS:   Your Honour, it is not contended at Justice Basten’s summary of the findings of the Tribunal is wrong in any way whatsoever.  There is no such suggestion.

GUMMOW J:   One can read pages 2 to 9 without a great deal of trouble.  Why does not one just read pages 2 to 9?

MR JACOBS:   Your Honours, I read the findings of the Tribunal.  What his Honour Mr Justice Basten was to extract the findings of the Tribunal and put them in his judgment; no more, no less.  How does my learned friend overcome the point that in the notice of appeal before Justice Rothman there are no points of law that are taken?  We have addressed that issue in our principal submissions.  With regard to the gateway point, as your Honour presiding held in the Skypak Case ‑ ‑ ‑

GUMMOW J:   That was on different legislation.  It was on tax legislation.

MR JACOBS:   Yes, but we say the same principle obtains here.  Those are our submissions.

GUMMOW J:   We do not need to hear from you, Mr Gleeson.  There will be a grant of special leave in this matter.  It will be a one‑day appeal.  The parties again should be prepared to be ready for a listing in May.  That may not necessarily happen, but it may happen.

AT 10.41 AM THE MATTER WAS CONCLUDED