Roude v Helwani

1. [1]

   HER HONOUR: This is an appeal from the decision of a Local Court Magistrate.

2. [2]

   By amended summons filed 5 September 2019, the first and second plaintiffs seek orders, firstly, that to the extent leave is required, leave be granted; secondly, that the appeal be allowed; thirdly, that the judgment of the court below dated 9 November 2018 be set aside; fourthly, that orders 1, 2, 3 and 4 of the orders made on 30 November 2018 be set aside; and finally, that the defendant’s amended statement of claim filed 4 July 2018 in the Local Court be dismissed.

3. [3]

   By notice of contention filed 18 December 2018, the defendant contends that the decision of the Magistrate should be affirmed on grounds other than those relied on by the Local Court, but does not seek a discharge or variation of any part of the decision.

4. [4]

   I will consider firstly whether leave should be granted to file the amended summons; secondly, the appeal; and finally, if necessary, the notice of contention.

5. [5]

   The first plaintiff is Ali Roude. The second plaintiff is Susan Roude. They are husband and wife (“the Roudes”). They are homeowners, and were the defendants in the Local Court proceedings. The defendant is Adib Helwani (“Mr Helwani”). He is a plumber and electrician, and was the plaintiff in the Local Court proceedings. The parties relied upon two court books.

6. [6]

   In the Local Court proceedings on 9 November 2018, Atkinson LCM (“the Magistrate”) found in favour of Mr Helwani and entered judgment that the Roudes pay Mr Helwani the sum of $86,071.50.

Appeals generally

1. [7]

   Section 39(1) of the Local Court Act 2007 (NSW) provides that a party to proceedings before the Local Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law.

2. [8]

   Section 40(1) of the Local Court Act provides that a party to proceedings before the Local Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court, but only by leave of the Supreme Court.

3. [9]

   Section 41 of the Local Court Act provides that this Court may determine an appeal made under ss 39(1) or 40(1) by either (a) varying the terms of the judgment or order, (b) setting aside the judgment or order, (c) setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court’s directions, or (d) dismissing the appeal.

Background

1. [10]

   The proceedings in the Local Court arose out of electrical and plumbing works carried out by Mr Helwani in the course of the construction of the Roudes’ new dwelling in Greenacre, a suburb of Sydney. There was no issue in the Local Court, nor on appeal, that the work was “residential building work” within the meaning of s 3 of the Home Building Act 1989 (NSW).

2. [11]

   The relevant background of the case is set out in the Magistrate’s judgment [7]-[24] as follows.

3. [12]

   Mr Helwani is a licenced plumber and electrician, and has been for many years. He carries on his business under the name “Essential Trades”.

4. [13]

   The Roudes had decided to demolish the existing structure on their Greenacre property and construct a 5 bedroom, 2 storey house with a basement garage. The total area of the dwelling was to be approximately 500 square metres.

5. [14]

   Mr Helwani and the Roudes were friends, and Mr Helwani had previously carried out work for the Roudes on another property. In around December 2008, Mr Helwani agreed to carry out the electrical and plumbing work on the Roudes’ new house. There was only ever an oral contract between the parties for the works.

6. [15]

   In about April 2009, Mrs Roude gave Mr Helwani a copy of the house plans, but did not give him a document outlining the scope of the works.

7. [16]

   Mr Helwani did not give the Roudes a quote for the work that was to be carried out. He says that he was unable to do so because the Roudes had not given him a scope of works document. Mr Helwani did not obtain home warranty insurance in his name in relation to the building work, and as such did not provide a copy of a certificate of insurance to the Roudes. Mrs Roude obtained an owner builder permit and owner/builder insurance for the project.

8. [17]

   Mr Helwani commenced plumbing work on the site on or around 20 May 2008 and electrical work on or around 19 December 2008. He said that the main aspects of the electrical work commenced around September 2009.

9. [18]

   Mr Helwani stated that over the course of the works, he carried out 98% of the plumbing work, which he finished in or around February 2013, and all of the electrical work, which he finished in or about September 2013.

10. [19]

    The Roudes moved into the house in or around January 2013 and obtained an occupancy certificate in August 2015.

11. [20]

    Mr Helwani said that during the course of the building works, he gave invoices to the Roudes, which they paid. These invoices totalled $37,500. He said that he no longer had copies of the invoices. Mrs Roude denied that Mr Helwani provided the Roudes with invoices, saying instead that he simply asked them for payment from time to time and that they paid him what he asked for.

12. [21]

    Mr Helwani did not give the defendants any invoices after he completed work on the house.

13. [22]

    Around the time Mr Helwani completed the works, the Roudes became involved in unrelated Supreme Court proceedings. In January 2015, the Roudes asked Mr Helwani to provide them with an invoice for the works to inform the Court of their financial position for the purposes of reaching a settlement figure in their case. On 21 January 2015, Mr Helwani provided the Roudes with three single-page invoices totalling $123,571.50. Mr Helwani did not provide the Roudes with documents setting out how those invoices were calculated until after the commencement of these proceedings in the Local Court. Mr Helwani gave evidence before the Magistrate that he had in fact created the more detailed invoices in 2015, but that he only provided the single-page invoices to the Roudes because that was all they had requested.

14. [23]

    The Roudes used the invoices to prepare statements that were annexed to statutory declarations as to their assets and liabilities.

15. [24]

    The unrelated Supreme Court proceedings were resolved when the parties entered into a deed of settlement. The statements of the Roudes’ assets and liabilities, along with their statutory declarations, were annexed to the deed of settlement, which contained a confidential provision preventing the parties from disclosing its contents.

16. [25]

    Sometime after the deed was executed, Mr Helwani was anonymously given an envelope containing a copy of the statutory declarations, along with a newspaper article in Arabic and an English translation. The envelope contained no information enabling him to identify its sender.

17. [26]

    On 29 September 2017, Mr Helwani filed a statement of claim commencing proceedings against the Roudes in the Local Court for the balance of the monies due under the invoices, being $86,071.50.

The Magistrate’s decision dated 9 November 2018

1. [27]

   The proceedings in the Local Court were heard on 25 July 2018. On 9 November 2018, the Magistrate gave the written reasons for her decision.

2. [28]

   In her decision, the Magistrate summarised the issues in dispute as:

   1. (1)

      Should the court exclude the statutory declarations and certified statements of assets and liabilities pursuant to s 138 of the Evidence Act 1995 (NSW)?

   2. (2)

      In relation to the account stated claim:

   3. (3)

      What is the consequence under the Home Building Act of the contract not being in writing and the plaintiff not holding home building insurance?

   4. (4)

      In relation to the quantum meruit claim:

3. [29]

   Having set out the background of the case, the Magistrate turned to consider the first issue in dispute, which was whether the Court should exclude the statutory declarations and certified statements of assets and liabilities pursuant to s 138 of the Evidence Act.

4. [30]

   The Magistrate concluded at [39] to [42]:

5. [31]

   The Magistrate then turned to consider the second issue at [42]:

6. [32]

   The Magistrate then addressed the third issue, which concerned the consequence under the Home Building Act of the contract not being in writing, and Mr Helwani not holding home building insurance.

7. [33]

   At [54]-[57], the Magistrate concluded:

8. [34]

   Finally, the Magistrate considered the fourth issue, which was whether Mr Helwani could successfully bring a claim in quantum meruit. The Magistrate stated at [64] to [65], [67] to [70], [73] and [74]:

9. [35]

   For those reasons, the Magistrate found on the balance of probabilities that Mr Helwani had not established his claim for an account stated, but that he had established his claim in quantum meruit. The Magistrate ordered the Roudes to pay Mr Helwani the amount of $86,071.50.

Leave to file the amended summons

1. [36]

   By summons filed 6 December 2018, the Roudes commenced an appeal as against part of the Magistrate’s decision dated 9 November 2018. The summons stated two grounds of appeal. The first was that the Magistrate erred at law in that she found that a claim for quantum meruit was proven when there was no evidence of the fair and reasonable cost of performing the work. The second ground of appeal related to the Roudes’ limitation defence. At the hearing of these proceedings, counsel for the Roudes indicated that they no longer wish to press the second ground (T 15.33-35).

2. [37]

   By notice of motion dated 30 August 2019, the Roudes sought to file an amended summons dated 5 September 2019 commencing an appeal which introduced two new grounds of appeal, in addition to the first ground from the summons filed 6 December 2018. Those two new grounds were that the Magistrate erred firstly, by failing to give any, or any adequate, reasons for her decision that Mr Helwani’s quantum meruit entitlement was to be in the amount of $86,071.50; and secondly, by failing to apply the correct standard of proof as to the quantum meruit entitlement, or alternatively, by failing to require sufficient evidence to discharge Mr Helwani’s standard of proof as to the quantum meruit entitlement.

3. [38]

   Mr Helwani opposed the filing of the amended summons. At the hearing of these proceedings, counsel for Mr Helwani submitted that the Roudes provided no explanation for the delay in filing, no affidavit in support and no warning of the content of the new grounds until the receipt of submissions. As such, Mr Helwani argued that the Roudes should not be heard on the second and third grounds of appeal.

4. [39]

   At the hearing of these proceedings on 5 September 2019, I allowed the filing of the notice of motion and granted leave to file the amended summons commencing an appeal (T 20.5-15). This was because it was my view that the Roudes’ submissions were filed on 12 August 2019, giving Mr Helwani ample time to address the matters raised. Although there was no affidavit in support, counsel for the Roudes gave evidence from the bar table explaining that the delay was due to his oversight in not realising the two additional grounds until the drafting of the submissions. In my view, this explanation was satisfactory.

5. [40]

   In order to afford Mr Helwani procedural fairness, I granted him leave to file written submissions in answer to the two new grounds. Those submissions have been filed.

6. [41]

   I also made an order that the Roudes are to pay Mr Helwani’s costs incurred in relation to the notice of motion filed 30 August 2019.

Grounds of appeal

1. [42]

   The Roudes appeal from the whole of the decision of the Magistrate dated 9 November 2018 on three grounds. They are that her Honour erred firstly, in finding that a claim for quantum meruit was proven when there was no evidence of the fair and reasonable cost of performing the work; secondly, by failing to give any, or any adequate, reasons for her decision that Mr Helwani’s quantum meruit entitlement was to be in the amount of $86,071.50; and thirdly, by failing to apply the correct standard of proof as to the quantum meruit entitlement, or alternatively, by failing to require sufficient evidence to discharge Mr Helwani’s standard of proof as to the quantum meruit entitlement.

2. [43]

   I will consider the three grounds in order.

3. [44]

   The first ground of appeal relates to the Magistrate’s finding as to the assessment of Mr Helwani’s quantum meruit entitlement in the amount of $86,071.50. The Roudes submitted that the Magistrate erred in law by making a finding in the absence of evidence.

4. [45]

   The Roudes referred to Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141 (“Sopov”) as authority for the proposition that the valuation of a quantum meruit claim can be made by reference to the builders’ cost of materials, goods and profit. In Sopov, the owner raised the following arguments to oppose the builder’s quantum meruit claim:

   1. (1)

      the builder’s only remedy was for damages consequent on the owner’s breach of the contract, and not quantum meruit;

   2. (2)

      if the builder had an entitlement to elect to claim on a quantum meruit, the amount recoverable by the builder was limited to the contract price; and

   3. (3)

      if the amount which the builder could recover was not limited by the contract price, the contract price was, nevertheless, the best evidence before the Court of the value of the benefit received by the owner.

5. [46]

   In Sopov, the Victorian Court of Appeal considered that the value of the work done could be established by evidence of the actual costs incurred by the builder. To account for the builder’s profit margin, the Court stated that it was appropriate to determine what it would have cost to have the works carried out by another builder in comparable circumstances.

6. [47]

   The Roudes also referred to Council of the City of Sydney v Woodward [2000] NSWCA 201, in which Heydon JA (Priestley and Meagher JJA both agreeing) referred at [12] to the following proposition as a matter of principle:

7. [48]

   In Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; (1987) 69 ALR 577 (“Pavey”), Deane J stated at ALR 609:

8. [49]

   However, in Pavey, Deane J went on to make the following observation at ALR 610:

9. [50]

   The Roudes submitted that the way in which a Court approaches the valuation of a quantum meruit claim will depend on the circumstances and context in which the claim arises. The Roudes referred to K Mason, J W Carter and G J Tolhurst, Mason and Carter’s Restitution Law in Australia (LexisNexis Butterworths, 3rd ed, 2016), where the learned authors state at [1416]:

10. [51]

    The Roudes submitted that awarding market value assessed by reference to the cost of rendering services or doing work is not the starting point, if the obligation is to make restitution for an incontrovertible benefit. Mr Helwani’s claim is limited to the money sum which has been realised (or which is realisable, unless that amount is in fact greater than the market value of the work done or other services rendered).

11. [52]

    The Roudes also eferred to Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221 (“Brenner”). In Brenner, Byrne J applied a presumption of the quantification of a quantum meruit claim based on what the respondent would have had to pay for the work carried out under a “normal commercial arrangement” for the services rendered. In Brenner, there was a lack of reliable evidence on what a comparable person providing the services may have charged. Byrne J, in the absence of that evidence, took the cost of rendering the services into account to arrive at an appropriate remuneration.

12. [53]

    In these current proceedings, the Roudes characterised the Magistrate’s reasoning in assessing the quantum meruit claim to be $86,071.50 as follows:

    1. (1)

       the plaintiff had tendered “detailed material” showing what work he had carried out, and how his invoices “were broken down in terms of activities that were carried out and costings” ([64]);

    2. (2)

       there was no other evidence “going to the value of the work” ([65]);

    3. (3)

       although there was less evidence before the Court than it would have preferred, the Court still had the obligation to do the best it could to assess whether the amount claimed by Mr Helwani was fair and reasonable ([69]); and

    4. (4)

       having considered “all of the evidence” ([70]):

13. [54]

    The Roudes submitted that the Magistrate’s reasons fail to identify or analyse the material to which the Magistrate referred, except the two invoices for electrical and plumbing works dated 21 January 2015. According to the Roudes, the electrical works invoice did no more than refer to works which Mr Helwani claimed had been carried out, and claimed payment of the amount of $62,480.00 including GST. When provided, the invoice was not accompanied by any material. When tendered, Mr Helwani relied on the following additional evidence to establish his entitlement:

    1. (1)

       a legend of the location of equipment installed;

    2. (2)

       a summary of the parts of the building in which works were carried out, and a claimed amount against each item;

    3. (3)

       a diagram of the work in question; and

    4. (4)

       what appeared to be an itemised breakdown of the amounts referred to in the summary.

14. [55]

    Although the Magistrate referred to this body of material as “costings”, the Roudes submitted that this material did no more than set out the work allegedly carried out, and the price Mr Helwani proposed to charge for it. In all of the circumstances, the Magistrate merely adopted his price, presumably because her Honour had no other evidence to consider. There was no evidence that the itemisation of the charges on the invoice were made at the time the work was carried out. The Roudes submitted that the inference is that they were not prepared at the time. They were not provided to the Roudes at the time the works were carried out, and do not provide evidence of the cost of labour or materials. Mr Helwani claimed payment for the work involved at prices that he determined, without assessment or explanation of the charges in question, or how they related to rates or prices that were fair and reasonable.

15. [56]

    The Roudes further submitted that under the circumstances, the Magistrate erred in law. Her Honour’s finding that the Roudes were unjustly enriched by receiving the benefit of electrical and plumbing works valued in the sum of $86,071.50 was not open on the material before the Court below. There was no evidence to justify that finding.

16. [57]

    Mr Helwani also referred to Mason and Carter’s Restitution Law in Australia at [1415]-[1417]:

17. [58]

    Mr Helwani’s evidence, which the Magistrate accepted, was that he did effectively all of the electrical work, and all but a “tiny” portion of the plumbing work for the mansion, which was 674 square metres in size and rose three stories. The final house had 5 bedrooms, 5 bathrooms, 5 car spaces with a turning bay, storeroom, 2 internal kitchens, an outdoor kitchen, an entertainment area, laundry and more.

18. [59]

    Mr Helwani submitted that the house, from an electrician’s perspective, was also far more complex than other houses of a comparable size, having 38 sub-circuits rather than the standard 6 to 8. Mr Helwani set out the drawings and specifications of his work in detail in his affidavits.

19. [60]

    Mrs Roude gave evidence for the Roudes. She admitted that Mr Helwani worked on the house during its construction in every year from 2008-2013, and that he had done all of the electrical work and 98% of the plumbing work.

20. [61]

    Mr Helwani’s evidence to the effect that his detailed tabulated costings of the work were not unreasonable or excessive was all before the Magistrate and was all unchallenged (except for an allegation that he fabricated the costings, which was not accepted by the Magistrate).

21. [62]

    On this point, Mr Helwani referred to Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, where Starke J stated:

22. [63]

    At the hearing in the Local Court, the Magistrate was taken to the executive summary and the detailed invoices in evidence during cross examination and in submissions. After cross-examination of Mr Helwani, her Honour accepted Mr Helwani’s costing as fair and reasonable.

23. [64]

    The Magistrate also considered it relevant that there was not a single complaint about the invoice amounts until the proceedings were commenced. In his affidavit of 19 July 2018, Mr Helwani stated:

24. [65]

    Mr Helwani’s statement was not challenged in cross examination.

25. [66]

    Mrs Roude admitted that she did not question or object to Mr Helwani’s invoices when she received them. Her evidence was, “No, I didn’t say anything to him at the time” (T 37.29). There is also no evidence that Mr Roude complained about the value of the invoices. Mr Helwani submitted that the only reason the Roudes refused to pay him was because of their financial difficulties. Messages annexed to Mr Helwani’s affidavit from Mr Roude read, “No change of circumstances. Still having financial problem. Be assured and as I told you before when I am in a better position, you will be the first one to be contacted.”

26. [67]

    Mr Roude also made payments in respect of the invoices, for example on 24 October 2015 and on or about 19 May 2016. Mr Helwani submitted that these payments are inconsistent with the Roudes’ suggestion that they were unsatisfied with the works.

27. [68]

    At the hearing in the Local Court, Mrs Roude admitted that in January 2015 she asked Mr Helwani what was owed for the electrical and plumbing works for the property in the following exchange (T 35.7-12):

28. [69]

    Mr Helwani submitted that the Court should draw an inference that Mrs Roude would not have asked what she owed if she believed nothing was owing by the Roudes to Mr Helwani.

29. [70]

    Mr Helwani submitted that there was no evidence, other than his own, about how much the works should have cost. This was a deliberate forensic decision made by the Roudes in the proceedings. They chose not to tender their own quotes for the value of the works, then objected to Mr Helwani’s tender of both his quotes and theirs. The Roudes also chose not to put to Mr Helwani in cross examination that the quotes in his tabulated invoices were unreasonable or excessive.

30. [71]

    Mr Helwani submitted that the evidence supports the Magistrate’s finding that his charges were reasonable for the following reasons:

    1. (1)

       he is a very experienced electrician, plumber and builder, and gave evidence that what he charged was in no way unreasonable or excessive;

    2. (2)

       he was never challenged on a single item in his detailed tabulated invoices being incorrectly, unreasonably or unfairly priced;

    3. (3)

       he was never challenged on his qualifications to give the above opinions;

    4. (4)

       he was never challenged in cross examination to the effect that he did not do the work that he invoiced; and

    5. (5)

       there is no evidence to say that there were any issues with the quality of work that he did or the time in which he did it.

31. [72]

    Mr Helwani further submitted that this Court can bring to bear its experience in normal life and building claims when assessing whether a defendant has been unjustly enriched. When asked whether “Mr Helwani did the electrical work for almost your whole house”, Mrs Roude stated, “Mr Helwani did the electrical and the plumbing” (T 40.1). The house in question was enormous. In that context, Mr Helwani claimed only $123,571.50. Given the sheer enormity of the work Mr Helwani did as set out in his affidavit, the sum appears prima facie reasonable. This is particularly so when supported by his evidence in chief, the invoices and statutory declarations. The $37,500 that the Roudes already paid him is out of proportion to the work he did over the course of six years.

32. [73]

    The Roudes received all the electrical and plumbing benefits at Mr Helwani’s expense. He bought items for the Roudes expecting to be repaid and completed works for them expecting to be paid. The only specific issue Mrs Roude raised with any of the invoices was that she found a water tank advertised for $999, and Mr Helwani procured a water tank for $1,155.23, which was $156 more than the price Mrs Roude says she found. Putting aside that the price Mr Helwani bought the tank for was a reasonable price, it should be noted that had Mrs Roude had other issues with other work, she should have raised them. Mr Helwani submitted that a failure to do so ought to raise a Jones v Dunkel (1959) 101 CLR 298; [1959] ALR 367 inference to the effect that Mrs Roude’s lack of evidence means that such evidence would not have assisted her case.

33. [74]

    Moreover, Mr Helwani submitted that the fact that the Roudes produced no evidence at all to controvert the reasonableness of the amounts charged also should draw such an adverse inference, especially when the Roudes had such evidence and deliberately chose not to tender it and took a hearsay objection to prevent Mr Helwani tendering it.

34. [75]

    The Magistrate was asked to make a decision as to quantum. Her Honour had the unchallenged quantification evidence of Mr Helwani, which was presented in detailed tables. Mr Helwani was an experienced builder, plumber and electrician, and her Honour had extensive evidence of how much work was actually done. Mr Helwani’s evidence that what he charged was not unreasonable or excessive was never challenged.

35. [76]

    The Roudes put on no evidence to suggest the work was of poor quality, was charged at an unreasonable price or was done in an untimely fashion. In those circumstances, it was open to the Magistrate to conclude that what Mr Helwani charged was reasonable.

36. [77]

    Mr Helwani submitted that the Roudes may wish to argue that the Magistrate’s calculation was simply too high, rather than one made on no evidentiary basis. However, the defendant submitted that that argument suffers from its own flaws. Firstly, there is no basis in evidence to suggest that Mr Helwani’s charge was too high. The price he charged is the only price led in evidence by any party, and no item he billed was challenged in cross examination. Furthermore, such an argument would be engaging an appeal on the facts, and no leave has been granted for such an appeal.

37. [78]

    On this point, Mr Helwani referred to Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (“Bond”) at 356, where Mason CJ stated:

38. [79]

    Mr Helwani submitted that there was no want of logic in the Magistrate’s decision below, but that even if there was, the Roudes must show that her Honour made her decision on the basis of “no evidence”. In that respect, they cannot succeed.

39. [80]

    This ground of appeal alleges that the Magistrate reached her determination to award Mr Helwani $86,071.50 without evidence of the fair and reasonable cost of performing the work. The question of whether there is any evidence of a particular fact is a question of law: see Bond at 355 per Mason CJ, citing McPhee v S Bennett Ltd (1934) 8 WCR 372; (1934) 52 WN (NSW) 8 at [46]; Australian Gas Light Co v Valuer-General (1940) 40 S.R. (NSW) 126 at 137-138.

40. [81]

    As outlined earlier, the cost of Mr Helwani’s works were set out in two sets of invoices. The first set were three executive summary invoices of one page, with one page for supply of items totalling $9,091.50 (CB 98), one for electrical works totalling $62,480.00 (CB 99) and one for plumbing works totalling $52,000.00 (CB 100). Together, the invoices totalled $123,571.50, of which $86,071.50 was unpaid. Mr Helwani provided the Roudes with those invoices in January 2015.

41. [82]

    The second set of invoices, which Mr Helwani produced after instituting proceedings against the Roudes, were detailed tabulated invoices which broke down the work that was done and the cost of each piece of divisible work.

42. [83]

    The Roudes submitted that Mr Helwani’s delay in producing the detailed invoices until after instituting proceedings leads to the inference that he fabricated them for the purposes of litigation. However, the Magistrate made a finding at [6] of her judgment that she accepted Mr Helwani’s evidence that he had the invoices in 2015. That finding of fact is not one which is subject to appeal.

43. [84]

    There appear to be two main objections from the Roudes to Mr Helwani’s evidence. The first is that the charges on the invoices are not fair and reasonable. The second is that Mr Helwani alone cannot give evidence of the fair and reasonable value of the works.

44. [85]

    As to the first issue, the Magistrate’s consideration of whether the amount claimed in the invoices was fair and reasonable begins at [64] of her reasons, where her Honour wrote:

45. [86]

    The Roudes took issue with the Magistrate’s use of the word “costings” at [64] to describe the second set of detailed tax invoices.

46. [87]

    At the hearing of these proceedings, counsel for the Roudes pointed to two examples from the electrical invoice by way of illustration. Firstly, on the breakdown of “Internal Sub-Board” billed at $9,020.00, Mr Helwani wrote that for Item 1, “Price Includes Supply & Install Sub-Board, Sub-Circuit Protections and Wiring from Sub-Board to Designated parts of the house” (CB 138). Counsel for the Roudes argued that this is not a price at all, but merely “what the builder wants [to be] paid” (T 10.27-28).

47. [88]

    Secondly, on the breakdown of “Ground Floor” billed at $20,700.00, Mr Helwani included that for Item 17, “Price includes wiring, installation, and the supply & installation of 2 way light switching” (CB 143). Counsel for the Roudes noted that this work is claimed as an “item”, although nothing is included to distinguish time or cost, or how Mr Helwani arrived at that price (T 10.46-47). The Roudes submitted that Mr Helwani’s plumbing invoices were set out in the same way.

48. [89]

    Counsel for Mr Helwani explained the costings in the invoices differently. He acknowledged that, for example, it would be unfair for Mr Helwani to rely only on a generalised item such as “Wall lights”, as listed under “Basement” on the general electrical works invoice provided to the Roudes in January 2015 (CB 134). However, on the breakdown of “Basement” billed at $7,710.00, Mr Helwani included that for wall lights, the “[p]rice includes wiring, installation, and the supply & installation of light switches and installation of light fitting supplied by owner” (CB 144). Mr Helwani then listed the quantity as 14, and price per unit as $150.00. Counsel for Mr Helwani explained that this “unit” includes installation of the switch, the wiring through the wall and the wall light itself.

49. [90]

    Counsel for Mr Helwani also addressed the detailed invoice for the “Internal Sub-Board” billed at $9,020.00 (CB 138). The invoice refers to 38 sub-circuits and a reference to the sub-board legend (CB 135). There, Mr Helwani set out the location and description of all 38 switches installed as part of those works. Counsel for Mr Helwani noted that the invoices reveal that, when priced out per switch, Mr Helwani charged the Roudes roughly $237.00 for the installation and wiring of the 38 switches in the legend.

50. [91]

    As to the plumbing invoice, counsel for Mr Helwani pointed to Item 8, “Supplied and Installed Hot Water Reticulation Services”. Mr Helwani billed the Roudes $5,500.00, writing “Price includes all pipe work & junctions & Welding, and also chasing and rendering of internal work, and fixing to ceiling concrete slab” (CB 146). Also before the Magistrate were Mr Helwani’s as-built drawings of the house, which reveal at least 15 hot water outlets across multiple rooms. The installation included two water tanks, as well as all piping and faucets. Priced out per outlet, the works amounted to roughly $367.00 for each of the 15 outlets.

51. [92]

    It is Mr Helwani’s case that the references to such works, and their costs, are “common sense” from the details provided on the invoices (T 23.33). Counsel for Mr Helwani also submitted that the Magistrate was entitled to take notice of her own general life experience in determining whether an electrician charging $150.00 or $237.00 (or a plumber charging $367.00) for those respective efforts and materials was reasonable (T 23.41).

52. [93]

    I note that Mr Helwani was not challenged at the hearing in the Local Court as to the reasonableness of his costings, nor asked with any specificity by counsel for the Roudes to justify the prices listed. Apparently both parties attempted to tender quotes from various experts at the hearing in the Local Court, but none was admitted after objections. It is in this context that Mr Helwani provided the only evidence of the value of the works.

53. [94]

    The second issue raised by the Roudes is that Mr Helwani’s invoices cannot alone constitute evidence of the fair and reasonable cost of the works. As authority, the Roudes referred to Horley v Sector 7G Architecture Pty Ltd (in liq) [2011] NSWSC 827 (“Horley”), another case in which the respondent advanced a quantum meruit claim.

54. [95]

    In Horley, Schmidt J stated at [117]:

55. [96]

    In Horley, Schmidt J continued at [121]:

56. [97]

    However, the facts in Horley are different to those in this appeal. In Horley, the invoice provided no explanation of the work to which it related, the hours involved, the rates by which it was calculated or how the total sum had been calculated ([101]). The builder in Horley had also created the invoices years after the works were completed, and only after proceedings were commenced. In these proceedings, the Magistrate accepted Mr Helwani’s evidence that he created the detailed invoices in 2015 and not for the purposes of litigation. Mr Helwani’s invoices and relevant documents are also 32 pages in length, with charges and works set out in great detail.

57. [98]

    The Magistrate acknowledged at [69] of her decision that there was “less evidence before the court than would be preferred”. However, her Honour continued:

58. [99]

    The evidence on which the Magistrate based her assessment included the invoices, plans and photographs of the house in Mr Helwani’s affidavit. Those documents show the house to be 674.3 square metres, comprising 5 bedrooms, 5 bathrooms, and an underground garage for 2 cars with a turning bay and storeroom. Mr Helwani, who had 30 years of experience, gave uncontested evidence that the house had around 5 times the sub-circuits of an ordinary house that size, and twice as many air conditioning units. The Magistrate referred to these details at [64] of her decision. Her Honour was also aware that it took 6 years between 2008 and 2013 for Mr Helwani to complete the plumbing and electrical works in the house. Having considered this evidence, the Magistrate was satisfied that Mr Helwani’s “detailed workings show[ed] the work that was carried out and how he calculated the invoices in relation to that work” ([70]). It was her view that his claim was fair and reasonable on the balance of probabilities.

59. [100]

    I will consider the adequacy of the Magistrate’s reasons in more detail under the second ground of appeal. However, for the purposes of this ground of appeal, it is my view that the Magistrate did not err by making her determination without evidence of the fair and reasonable cost of performing the work. On the contrary, she made the finding on the ample evidence available to her through Mr Helwani’s affidavits, detailed drawings and invoices showing the breakdown of his charges for various items and labour. It was open to her Honour to consider the scope and value of the works, and accept the invoices as representing their fair and reasonable cost. This ground of appeal fails.

60. [101]

    The Roudes submitted that the judicial process requires reasons: see Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 (“Osmond”). This involves the requirement to set out the material facts and any conclusions and ultimate findings of fact made. Rather than reject the Mr Helwani’s quantum meruit claim where there was no evidence as to the fair value of his price or charges, the Magistrate simply accepted Mr Helwani’s charges as being fair and reasonable. In doing so, the Magistrate failed to explain why she came to that determination. Her Honour did not state the body of evidence and the rationale for why Mr Helwani’s charges or prices represented the fair value of the work done, except to the extent of indicating that there was no expert evidence to the contrary.

61. [102]

    The Roudes conceded in their submissions that the Magistrate based her decision on the “detailed material showing what work he had carried out, and how his invoices ‘were broken down in terms of activities that were carried out and costings’”. Accordingly, her Honour took into account the detailed invoices.

62. [103]

    In the hearing of these appeal proceedings, the Court was also taken through the 32 pages of materials in the court book detailing works completed and the breakdown of their costs.

63. [104]

    Mr Helwani gave the following evidence in his reply affidavit at [62] (Tab 18, CB 303), stating “I deny that my charges for work carried out at the property are excessive or unreasonable”.

64. [105]

    As submitted in relation to the previous ground of appeal, Mr Helwani was challenged on that that statement at the hearing in the Local Court. It was put to him by counsel for the Roudes that the invoices did not reflect the true cost of the work, which he denied. At [6] of her judgment, the Magistrate accepted his evidence. The defendant submitted that her Honour was entitled to do so, and her finding as to credibility has not been challenged on the appeal. Accordingly, her Honour accepted the evidence of Mr Helwani that his invoice reflected the true cost of performing the work.

65. [106]

    Mr Helwani submitted that the thrust of the Roudes’ two new appeal grounds appears to be that her Honour was not entitled to rely on Mr Helwani’s 32 pages of detailed materials, even in circumstances where she believed his evidence and no contrary evidence was put forward. Mr Helwani submitted that this submission is wrong at law.

66. [107]

    The Roudes rely on Horley, which was a decision involving an invoice which “provided no explanation of the work to which it related” ([101]), and in which “the defendant’s case rested entirely on evidence it called from Mr Howieson, as to his assessment, made after the proceedings below were commenced” ([118]). In Horley, there was no evidence at all as to the fair or reasonable value of the services rendered ([117]), and there was a real question whether the work done was in fact requested.

67. [108]

    However, Mr Helwani submitted that in the present case, none of the same relevant factors are present. Mr Helwani put on detailed invoices running to 32 pages; his invoices were made as soon as Mrs Roude requested an invoice, which was well before the proceedings were commenced; Mr Helwani gave evidence in chief that the invoices were not unreasonable in amount and gave evidence under cross examination that they represented the true cost of the work he did, which her Honour accepted; and there was no evidence that any work Mr Helwani did was not requested.

68. [109]

    Mr Helwani further submitted that there is no legal reason why a plaintiff cannot give evidence in his own case as to the fair value of the work he has done. In Local Court proceedings, this is not only common but should be encouraged in line with ss 56 and 60 of the Civil Procedure Act.

69. [110]

    By way of example, Mr Helwani referred to Tagget v McLean Austquip Pty Limited [2014] NSWSC 1310 (“Tagget”). In Tagget, Hidden J stated at [26]:

70. [111]

    Counsel for Mr Helwani referred to Maksim (NSW) Pty Limited v Jantune Pty Limited [2013] NSWSC 1634 (“Maksim”). In Maksim, I heard an appeal from a Local Court Magistrate who awarded $91,535.67 on a quantim meruit basis. The defendant in Maksim was Jantune. The Magistrate accepted that there was a “do the work, then send invoices later” methodology for billing. Despite there being independent quantity surveyor experts, the Magistrate accepted at [32] of her judgment the evidence of Mr Glew, from Jantunes, who had given evidence that the value of the work was $91,535.670. On appeal, I also accepted the evidence of Mr Glew, with this Court finding at [65] “the only evidence that is straightforward is that of Mr Glew who had calculated the amount Jantune was owed on a ‘do and charge’ basis”.

71. [112]

    In Maksim at [68]-[69], I stated:

72. [113]

    In Maksim, I did not accept that the amounts claimed by Mr Glew of Jantunes were unreasonable and said the Local Court was entitled to accept Mr Glew’s evidence as to reasonableness.

73. [114]

    Mr Helwani noted that both he and Mr Glew gave evidence in their own cases of the amount charged and the basis on which it was charged. Both were experienced in their respective fields. Both had their evidence accepted at first instance. Moreover, Mr Helwani submitted that his situation is even stronger, because his evidence was never contradicted by other evidence.

74. [115]

    Counsel for Mr Helwani submitted that in a quantum meruit case, a decision maker must provide a minimum of two reasons. The first is that they have evidence before them that is said to represent the true or reasonable cost of services rendered or goods supplied. The second is that that evidence is accepted by the decision maker.

75. [116]

    The Magistrate had the detailed materials, and the plaintiffs have conceded that her Honour based her decision on them. Her Honour also accepted the evidence of Mr Helwani, who gave evidence in chief that his charges were not unreasonable and gave evidence in cross-examination that his charges represented the true cost of the works he completed for the Roudes.

76. [117]

    Counsel for Mr Helwani submitted that the Magistrate’s path of reasoning in this case was clear. The Magistrate was taken to Mr Helwani’s detailed materials; heard evidence from Mr Helwani that those costs were the true costs of performing the work and were not unreasonable; made a credibility finding that she believed Mr Helwani’s evidence; and so ultimately found that what Mr Helwani charged was a reasonable amount.

77. [118]

    The defendant further submitted that an inference can be made that the Magistrate’s credibility finding meant that she accepted the amounts on Mr Helwani’s invoices as representing the true costs of performing the work, which is to say that the amounts were not unreasonable. From this finding, she determined to award Mr Helwani the precise amount of those invoices. There was no other evidence of this, other than Mr Helwani’s evidence, from which her Honour could have made her finding to award that amount.

78. [119]

    It is well established that a court’s failure to to give sufficient reasons for its decision constitutes an error of law: see Wang v Yamamoto [2015] NSWSC 942; and Jung v Son [1998] NSWCA 120.

79. [120]

    In Pettitt v Dunkley [1971] 1 NSWLR 376 (“Pettitt”), Moffitt JA (with whom Manning JA agreed) cited with approval the following remarks of Jordan CJ in Carlson v King (1947) 64 WN (NSW) 65 at 387:

80. [121]

    In Pettitt, Moffitt JA concluded that a failure to give reasons comprised an error of law, observing at 388 that:

81. [122]

    In Pettitt, Asprey JA agreed with these conclusions at 382, which have since been cited with approval by the High Court in Osmond at 666-667.

82. [123]

    Where “one set of evidence is accepted over a conflicting set of significant evidence, the trial judge should set out his findings as to how he comes to accept the one over the other”: see Beale v Government Insurance Office (1997) 48 NSWLR 430; (1997) 25 MVR 373 (“Beale”) at 390. As Campbell JA (Allsop P and McColl JA agreeing) stated in Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [116]:

83. [124]

    Finally, in Bradley v Matloob [2015] NSWCA 239 (“Matloob”), the Court of Appeal per Beech-Jones J (with McColl and Leeming JJA agreeing) stated at [17] and [18]:

84. [125]

    The Magistrate’s decision should be considered in the context of her Honour providing reasons for judgment in a busy Local Court. Any other approach imposes an intolerable burden on Magistrates: see Acuthan v Coates (1986) 6 NSWLR 472 at 479 at 479; 24 A Crim R 304 at 310 per Kirby P. Taking these circumstances into account and reading the judgment as a whole, I must consider whether the Magistrate engaged, grappled or wrestled with the cases presented by each party, such that the Roudes can understand why they lost.

85. [126]

    The Magistrate’s reasoning is set out in full earlier in this judgment. At [56] of her decision, her Honour referred to the “scale of work that [Mr Helwani] carried out”, which included “the vast majority of work on what would be an enormous home in most people’s minds”. The Magistrate stated that she was satisfied on the balance of probabilities that Mr Helwani “has only been paid for a portion of that work”.

86. [127]

    Under the heading, “Is the amount being claimed fair and reasonable?” the Magistrate stated at [64] and [65]:

87. [128]

    At [70], the Magistrate stated that having considered the “detailed working showing the work that was carried out and how [Mr Helwani] calculated the invoices in relation to that work,” it was her finding that the amount he was claiming was fair and reasonable.

88. [129]

    The Roudes have submitted that by so doing, the Magistrate “did not state the body of evidence and the rationale” for why the charges represented the fair value of the work. I do not agree. As outlined earlier, the Magistrate acknowledged at [69] of her decision that there was less evidence before the Court than would be preferred. I have set out the available evidence in detail in relation to the first ground of appeal. It comprised of Mr Helwani’s affidavits, including 32 pages of materials setting out the works done and their costings. Those materials showed the scope of the works, house plans, materials provided and which works corresponded with various charges.

89. [130]

    Mr Helwani was a builder with 30 years of experience. He was not challenged in any detail as to whether and in what manner his charges may have been excessive. The Roudes did not tender any evidence of what the works should have cost, and objected to Mr Helwani tendering his own quotes. As such, this is not a case as in Matloob quoted earlier, where there is a “real conflict in the evidence” with which the Magistrate needed to engage in her reasons. Rather, the issue relevant to the Magistrate was whether the available evidence, being Mr Helwani’s detailed invoices and affidavit evidence outlined earlier, was credible. It was open to her Honour to accept this evidence. This ground of appeal fails.

90. [131]

    The Roudes submitted that the Magistrate erred in law by effectively shifting the onus of proof. Instead of Mr Helwani bearing the onus of establishing that the price claimed was fair and reasonable, the Magistrate at [70] of her decision seemed to state that the Roudes bore the onus of proving that the price claimed was not fair and reasonable.

91. [132]

    Mr Helwani submitted that the only basis for the Roudes’ third ground of appeal is that her Honour indicated that there was no expert evidence to contradict that of Mr Helwani, which the Roudes argue “effectively shift[ed] the onus of proof” to them. The impugned paragraph in her Honour’s reasoning is at [70] of her decision, where her Honour stated, “the amount that [Mr Helwani] is claiming is fair and reasonable noting that there is no expert evidence to contradict this finding”. Mr Helwani submitted that this statement does nothing more than did the Court of Appeal in Sopov at [31]:

92. [133]

    Mr Helwani submitted that in these proceedings, the Magistrate was entitled to note there was no expert evidence to contradict Mr Helwani’s evidence, and that in doing so, her Honour noted no more than a statement of fact.

93. [134]

    At [70] of her Honour’s decision, the Magistrate stated:

94. [135]

    The Roudes submitted that this statement reversed the onus of proof from Mr Helwani, who was bringing the claim, to the Roudes. I do not agree.

95. [136]

    In her reasons, the Magistrate assessed the available evidence of the fair and reasonable cost of the works. Due to objections to various quotes from other experts at the hearing in the Local Court, the evidence before her Honour comprised chiefly of Mr Helwani’s invoices, which her Honour stated at [70] “included detailed working showing the work that was carried out and how he calculated in the invoices in relation to that work”. The Magistrate made a finding that that evidence was credible. Read as a whole and fairly, it is my view that her Honour’s statement at [70] “noting” that the Roudes adduced no expert evidence to contradict that finding does not reverse the standard of proof, but merely reiterates that contrary evidence was not adduced. This ground of appeal fails.

96. [137]

    The result is that the appeal is dismissed.

97. [138]

    In their notice of motion filed 5 September 2019, the plaintiffs further sought an order that orders 1, 2, 3 and 4 made by the Magistrate on 30 November 2018 be set aside. Neither party made submissions in relation to those orders. As the plaintiffs’ appeal has failed and the Magistrate’s judgment dated 9 November 2018 has been affirmed, it is not necessary for me to consider the Magistrate’s orders made on 30 November 2018.

The notice of contention

1. [139]

   By notice of contention filed 18 December 2018, the defendant contends that the decision of the Magistrate should be affirmed on grounds other than those relied on by the Local Court, but does not seek a discharge or variation of any part of the decision.

2. [140]

   As the Roudes’ appeal has failed, it is not necessary for me to consider the notice of contention, as the Magistrate’s decision has already been affirmed.

Costs

1. [141]

   Costs are discretionary. Costs usually follow the event. The plaintiffs are to pay the defendant’s costs on an ordinary basis.

   1. (1)

      The appeal is dismissed.

   2. (2)

      Magistrate Atkinson’s decision dated 9 November 2018 is affirmed.

   3. (3)

      The amended summons dated 5 September 2019 is dismissed.

   4. (4)

      The plaintiffs are to pay the defendant’s costs on an ordinary basis.