02 Property Marketing and Management Pty Ltd t/as Oasis Project Management v Blewman - [2015] NSWCATAP 206 - NSWCATAP 2015 case summary — Zoe

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02 Property Marketing and Management Pty Ltd t/as Oasis Project Management v Blewman

[2015] NSWCATAP 206

NCAT Appeal Panel|2015-03-09

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At a glance

Source facts

Court

NCAT Appeal Panel

Decision date

2015-03-09

Source

Original judgment source is linked above.

Judgment (17 paragraphs)

[1]

Background

In 2012 Mr and Mrs Blewman engaged the services of 02 Property Marketing and Management Pty Ltd, trading as Oasis Project Management (Oasis) in relation to alterations and additions to their home at Frenchs Forest. A verbal arrangement existed between the parties evidenced by emails and invoices. Mr Gavin McPherson represented Oasis in this regard. Mr Scott Hayward undertook much of the practical work.
Mr and Mrs Blewman were dissatisfied with the work and in August 2013 applied to the Consumer Trader Tenancy Tribunal (CTTT) alleging breach of statutory warranties for residential building work and resultant loss and damage. They relied on a report prepared by Tyrrells Property Inspections dated 29 April 2013.
The application was made to the CTTT, prior to the enactment of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) but was heard after its commencement date. After 1 January 2014 the CTTT ceased to exist and its functions were vested in the NSW Civil and Administrative Tribunal (NCAT). There was no dispute that NCAT was the appropriate forum in which the application should be determined.
On 4 March 2014, NCAT, in its Consumer and Commercial Division, considered as a preliminary issue, whether or not the parties entered into a contract for the provision of residential building work within the meaning of the Home Building Act 1989 (HBA).
On 26 September 2014 Senior Member Buckley determined that a contract was entered into between the parties for the provision of residential building work as defined in the HBA and in performance of that contract Oasis provided 'residential building work' for Mr and Mrs Blewman. The Senior Member concluded that NCAT had jurisdiction and an order was made for Oasis to pay the Blewmans' costs in relation to the preliminary hearing.
By way of a Notice of Appeal lodged on 27 October 2014, Oasis now appeals that decision. This is a concurrent hearing of an application for leave to appeal, and if that succeeds, the hearing of the appeal itself.

[2]

Leave to Appeal

Section 80 of the NCAT Act deals with the making of internal appeals. It relevantly provides: (2) Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.
Schedule 4 of the NCAT Act deals with the Consumer and Commercial Division. Clause 12 deals with limitations on internal appeals against Division decisions and provides: (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
The expression "substantial miscarriage of justice" was considered by an Appeal Panel of the Tribunal in Collins v Urban [2014] NSWCATAP 17, and summarised as follows: It can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . . In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result . . . it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred.
The principles applicable to the granting of leave to appeal were also summarised by the Appeal Panel in Collins v Urban as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact. (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed
Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the Act: Pholi v Wearne [2014] NSWCATAP 78.
Oasis argues that the appeal relates to both questions of law and questions of fact. Oasis characterises the finding that the Tribunal has jurisdiction, based on the finding that there was a contract for residential building work, as a question of law. The question of whether there was apprehended bias is both a question of law and fact and in this regard Oasis argues that the decision of the Tribunal was not fair and equitable, because of bias on the part of Senior Member Buckley and that the decision was against the weight of evidence, given the way the evidence of various witnesses was managed. Oasis argues that if leave to appeal is required it should be granted.
Mr and Mrs Blewman argue that the question of jurisdiction rests on the determination of various facts and accordingly it is primarily a question of fact rather than law. They argue that leave is required in relation to all aspects of the appeal and that it should not be granted, as Oasis has failed to demonstrate a substantial miscarriage of justice, in that it has not established that the Tribunal decision is not fair and equitable or against the weight of evidence.
The Appeal Panel considers that the appeal raises mixed questions of fact and law, and deals with the issue of the granting of leave, as it arises in respect to the various Grounds of Appeal.

[4]

Was there a contract for residential building work within the meaning of the HBA between Oasis and the Blewmans?

The HBA defines residential building works in section 3 as "any work involved in, or involved in co-ordinating or supervising any work involved in: 1. the construction of the dwelling, or 2. the making of alterations or additions to dwelling, or 3. the repairing, renovation, decoration or protective treatment of the dwelling."
Clause 9 of the Home Building Act Regulation 2004 (HBAR), being the provision in force at the relevant time, sets out matters that are excluded from "residential building work" under the HBA.
As far as is relevant here, clause 9(1)(g)(iii) of that Regulation excludes "Supervision only of residential building work….by any other person if all of the residential building work is being done or supervised by the holder of a contractor licence authorising its holder to contract to do that work".
Oasis says it did not contract with the Blewmans to do "residential building work". Oasis also denies that it supervised any building work, and says that even if it did, supervision is excluded from the operation of the HBA by virtue of clause 9(1)(g)(iii) of the HBAR. The Blewmans allege there was a contract for residential building work and assert that even if Oasis was not supervising the building work, it was co-ordinating such work and coordination is not exempted by clause 9(1)(g)(iii) of the HBAR.
Oasis asserts that the building work was done by Mr Scott Hayward, and that Mr Blewman, as owner-builder, was personally involved in co-ordinating and supervising the works by liaising directly with Mr Hayward. Oasis argues that it was Mr Blewman's obligation to ensure that Mr Hayward was appropriately licensed and that the liability in relation to any building defects rests with Mr Blewman as an owner-builder within the meaning of the HBA.
The Blewmans say that there was no direct relationship between them and Mr Hayward. Their agreement was with Oasis and on this basis there was no need for them to verify the credentials of Mr Hayward.
Oasis says that Senior Member Buckley erred by failing to take into account that, as a condition precedent to the agreement between Oasis and the Blewmans, Mr Blewman was required to obtain an owner-builder permit. They assert this was significant in determining the liability of Oasis and the Tribunal gave insufficient weight to this consideration. The Blewmans assert that obtaining the owner-builder permit was not a condition precedent to the agreement with Oasis and note that it was only by obtaining an owner-builders permit, that they were able to obtain a construction certificate.
Senior Member Buckley found that there was a contract between Oasis and Mr and Mrs Blewman, namely that Oasis, in consideration of a project management fee, agreed to project manage an extensive renovation of the Blewmans' property at Frenchs Forest. According to the contract Oasis was required to facilitate, organise and co-ordinate the planning arrangements, arrange subcontractors and technical services, purchase materials and manage all other financial and compliance requirements, during the planning and construction stages of the home renovation.
Senior Member Buckley also found that Mr Scott Hayward was the person who contracted with Oasis to undertake various building and construction duties at the Blewmans' property. Mr Hayward was a bricklayer and was not a holder of an appropriate license under the HBA. When they entered into the contract with Oasis, Mr and Mrs Blewman were not aware that Mr Hayward was not appropriately licensed to carry out home renovation work.
Senior Member Buckley accepted Mr Blewman's evidence that there had been no mention of him needing an owner-builder permit when the agreement with Oasis was made or indeed when the renovation work began. It was not until some weeks after the work began that Mr Blewman was advised of the need for an owner-builder permit, which he obtained on 15 September 2012. Senior Member Buckley found that from that date Mr and Mrs Blewman did not knowingly contract with an unlicensed entity to perform residential building work and remained entitled to the protection afforded by the Act as they did all that was reasonably required to prevent contravention of section 32AA (2) of the HBA.
Senior Member Buckley concluded, The assertions and submissions made on behalf of Oasis that it adopted a hands off role and merely served as an introductory service and accounts manager, with the ongoing co-ordination and supervision in the hands of the owner-builder is hardly consistent with what is actually being said by Mr MacPherson in his email correspondence with the applicants (Blewmans).
Oasis says Senior Member Buckley, by focusing on the emails between the parties, overlooked other pertinent evidence, such as the personal relationship between the parties.
Senior Member Buckley found that the builder, Mr Haywood, contracted with Oasis and was directed by them as to what, where and when his building and construction duties were carried out. Mr Hayward was paid for his work by Oasis.

[5]

The Appeal Panel's decision

We find that Oasis must fail on its first two grounds of appeal. The Senior Member did not err in finding that Oasis engaged in "residential building work" as defined under the HBA; or in finding that Oasis entered into a contract with the Blewmans for the provision of "residential building work" as defined under the HBA.
There was no dispute that Oasis introduced Mr Hayward to the Blewmans and that Mr Hayward carried out building work on the subject site. Senior Member Buckley found that Oasis was the party who contracted with the Blewmans and it was Oasis who employed Mr Hayward and we see no error in the manner in which he arrived at this conclusion.
The Tribunal Member did not err in taking account of emails between the parties. Those emails established that Oasis directly invoiced the Blewmans for Mr Hayward's work, describing it as "labour" and charged a 15% margin on Mr Hayward's labour costs. The emails provided evidence of Oasis describing Mr Hayward as its employee.
Oasis argues that even if it is found that it carried out "residential building work", that work, at the very most, could be categorised as "supervision only". As such, it falls within the exemption from the HBA under clause 9(1)(g)(iii) of the HBAR.
For the reasons stated above, we agree with the findings of Senior Member Buckley, that Oasis' role was not restricted to "supervision only". Oasis was the party who contracted with the Blewmans to do the subject work. In any event, as already stated, under clause 9(1)(g)(iii) of the HBAR, a person who provides "supervision only" is excluded from the HBA only if "all the residential building is being done or supervised" by another person who is " the holder of a contractor licence authorising its holder to contract to do that work". The undisputed evidence is that Mr Hayward was not licensed as required under the HBA.
Oasis further contends that it would be wrong if the fact Mr Hayward was unlicensed, prevented the exemption under clause 9(1)(g)(iii) from being triggered, when, as owner-builders, the Blewmans are obliged, pursuant to s32AA of the HBA, to contract only with licensed persons.
The correspondence between the parties also sheds light on the appellant's contention that there was a condition precedent to the agreement, requiring Mr Blewman to obtain an owner-builder permit. Senior Member Buckley examined in considerable detail both the documentary material on this point as well as considering and evaluating the oral evidence provided by Mr MacPherson, Mr Akle and Mr and Mrs Blewman. In relation to Mr Akle he said, The evidence of Mr Akle does not support the proposition that the respondent commenced the project management of the applicant's home renovation on the condition that one or other of the applicants would become an owner-builder. Insofar as his evidence sought to downplay the extent and involvement of the respondent in the project, it is inconsistent with the respondent receiving $11,765.00 in project management fees and a further $156,816.50 in construction fees.
Further we do not understand Oasis to directly refute the Blewmans' case that as neither Mr Hayward nor Oasis were licensed (as required under the HBA) it was only by obtaining an owner-builders permit under that legislation, that the Blewmans were able to obtain a construction certificate.
We are satisfied that it was open to Senior Member Buckley, on the evidence before him to find that the Blewmans entered into a contractual arrangement for the subject building work with Oasis and that it was Oasis who engaged/employed Mr Hayward in relation to that work.
We are also satisfied that Senior Member Buckley did not err in his findings regarding Mr Blewman's owner-builder permit. It follows from this that the Senior Member was correct in finding that the HBA applied to Oasis and that Oasis was not exempted from that Act under clause 9(1)(g)(iii) of the HBAR.
As such we find that the appeal must fail on these grounds and in so far as leave to appeal is required, it should be refused. In relation to seeking leave we note the appellant must demonstrate something more than that the Tribunal was arguably wrong. Simply seeking to reargue the findings of the Tribunal is not sufficient.

[6]

Apprehended bias

The third and fourth grounds of appeal allege that Senior Member Buckley was biased in his conduct, comments, treatment of the evidence and ultimately his findings and orders. Ground 3 is that the Tribunal Member erred in failing to recuse himself from hearing the proceedings on the basis of apprehended bias against the Appellant. Ground 4 asserts that the findings made by the Tribunal Member, his treatment of the Appellant's evidence and the final decision is indicative of bias against the Appellant.
An application was made during the proceedings requesting that Senior Member Buckley recuse himself on the basis that the comments he made and the body language observed, indicated he had formed a view in relation to the credit of Mr Gavin McPherson, a key witness for Oasis, without giving him an opportunity to give his evidence. Senior Member Buckley refused this application.
Counsel for Oasis pointed the Appeal Panel to various passages in the transcript of evidence, which they allege reveal Senior Member Buckley's bias. Many of these instances show Senior Member Buckley questioning Mr McPherson and sometimes interjecting or interrupting counsel's questioning to do so. On some occasions Senior Member Buckley's questions were based on incorrect assumptions, which he did acknowledge (and for which he apologised) when corrected. It was also suggested that Senior Member Buckley's tone and manner was inappropriate, giving the overall impression that he neither liked nor believed Mr McPherson.
The Blewmans characterise Senior Member Buckley's involvement with Mr McPherson as an effort to get a straight answer out of a difficult witness. They point to the fact that Mr McPherson's oral evidence was contrary to his written statement.
The Blewmans submit that tribunal members have the right to ask questions in an effort to make sound findings of fact and assess the credibility of witnesses. They say that Senior Member Buckley's questioning was not inappropriate, he was procedurally fair and rather than being biased was "simply doing his job".
As well as suggesting Senior Member Buckley erred in failing to recuse himself, Oasis also argues that the findings and final decision he made and his treatment of the appellant's evidence generally is indicative of bias. Senior Member Buckley was critical of the evidence of Mr MacPherson. He was also critical of the evidence of Mr Akle, another Oasis witness and he placed no weight on the statutory decorations of tradesmen working for Oasis.
Oasis asserts that the way Senior Member Buckley dealt with the evidence, as a whole, reveals that rather than bringing a fair and objective mind to the merits of the case, he pre-judged the case made by Oasis. They say his view of the credit of Mr McPherson coloured his assessment of the rest of the evidence provided by Oasis.
Complaint was also made about the time allocated for cross-examination. Oasis claims that strict time limits were set in relation to its cross-examination of the Blewmans' witnesses, while the Blewmans were permitted considerable flexibility with no time limitations on the cross examination of Mr McPherson.
Mr and Mrs Blewman note that at a preliminary hearing in November 2013 an order was made about the total time for cross examination of all witnesses by each party is limited to 2 ½ hours. They say that, although there was some delay in starting and time was taken by various applications, as a result of which the hearing did continue past 4 pm, overall each party had approximately the same time for cross examination.
The Blewmans also argue that Senior Member Buckley's findings reflect his logical and reasonable analysis of the evidence, particularly given the inconsistencies between the oral and documentary evidence provided by some of the witnesses for Oasis.

[7]

The Appeal Panel's decision

Section 36 of the NCAT legislation are sets out the guiding principle to be applied to the practice and procedure of the Tribunal, (1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings."
Section 38 relates to the procedure of the Tribunal generally and amongst other things, states: (1) The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedure rules do not otherwise make provision. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.
This statutory framework gives the Tribunal considerable leeway in terms of the manner in which it conducts its proceedings. Tribunal members may intervene in terms of questioning a witness to a far greater extent than judges in more formal court proceedings might do. Of course, there are challenges in terms of maintaining neutrality and the appearance of neutrality when a tribunal member asks extensive questions and also acts as the decision maker.
The Appeal Panel was referred to the decision in Michael Wilson & Partners Limited v Robert Colin Nicholls & Ors [2011] HCA 48 where the High Court stated the test for apprehended bias to be, whether a fair-minded lay observer might reasonably apprehend that the judge might not bring and impartial and unprejudiced mind to the resolution of the question the judge is required to decide
Senior Member Buckley was clearly perplexed by some aspects of Mr McPherson's evidence and tested his evidence rigorously. He ultimately found Mr McPherson to be an unreliable witness and explained, in his written Reasons for Decision, the basis for this conclusion (paragraphs 44 - 77). His language or approach may have revealed frustration with the witness, however the Appeal Panel does not consider that Senior Member Buckley's conduct or questioning of Mr McPherson demonstrated bias.
Nor does the Appeal Panel consider that Senior Member Buckley's assessment of the whole of the evidence reveals a prejudgement against Oasis. His conclusions concerning the reliability and ultimately the weight to be afforded to the evidence provided by Oasis is properly explained by his analysis of the inconsistencies between the oral and documentary evidence provided and the demeanour and credibility of its key witnesses.
As we noted above, leave is ordinarily granted only where the matter involves an issue of principle, questions of public importance, where the injustice is reasonably clear or where the Tribunal has gone about its fact finding process in such an unorthodox manner that it is likely to have produced an unfair result. None of these matters have been made out and no error of principle is apparent.
We accept that the time allocated for cross-examination was appropriately divided between the parties and there was no unfairness in respect of this issue.
We are not satisfied, in all the circumstances, that the appellant may have suffered a miscarriage of justice and in so far as it is required, refuse leave on this ground of appeal.

[14]

The Appeal Panel's decision

Section 60 of the NCAT Act deals with costs and provides, (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
Rule 38 of the Civil and Administrative Tribunal Rules 2014 relates to costs in Consumer and Commercial Division of the Tribunal and states, (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if: (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10 (2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000
The amount claimed by the Blewmans was in excess of $30,000 and the Appeal Panel accepts that Rule 38 would operate to modify the general principle in section 60 of the NCAT Act.
There is no dispute that the Tribunal had jurisdiction to make such an order and it is the case that general principles were followed, as the Blewmans were successful in relation to the preliminary determination. However, a question arises in relation to procedural fairness.
Both parties sought costs and neither party addressed the Tribunal on the issue. The Appeal Panel considers that while a "technical" breach of the principles of procedural fairness occurred, in the circumstances it is not appropriate to vary the order made by the Tribunal or remit the matter back for rehearing.

[15]

Application for Costs in relation to the appeal

The Appeal Panel considered the application for costs made in relation to the hearing of the appeal. Both Oasis and the Blewmans sought an order for costs, although in oral submissions Oasis did not press its application.
The relevant statutory provision is section 60 of the NCAT Act and is referred to above.
According to section 60, the usual rule is that each party is to pay their own costs, but the Tribunal may award costs only if it is satisfied that there are "special circumstances" warranting such an award. In determining whether there are special circumstances, s 60(3) provides that the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
The Blewmans argue that subsection 3(b) applies as the appeal itself has prolonged the proceedings. They further argue in relation to subsection 3(c) that the appeal points raised by Oasis were weak, the appeal should not have been made and that it resulted in additional costs to the Blewmans. Brief submissions were also made in relation to subsection 3 (e) and (g).
Oasis referred the Appeal Panel to the decision in CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 where consideration was given to what constitutes special circumstances in relation to an appeal. Oasis argues that there is no evidence to indicate special circumstances in this case. This was a bona fide appeal involving complex legal and factual matters and it was conducted without delay and without any improper conduct on the part of the appellant.

02 Property Marketing and Management Pty Ltd t/as Oasis Project Management v Blewman

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Judgment (17 paragraphs)

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Cases Cited (4)