Access Housing Pty Ltd v Rayfield

Judgment

1. HIS HONOUR: By Summons, the Plaintiff, Access Housing Pty Ltd ("Access Housing") seeks to appeal the decision of an Appeal Panel of the New South Wales Civil and Administrative Tribunal ("NCAT"). The Appeal Panel dismissed an appeal to it from a decision of Senior Member Boyce (the "Senior Member"). According to the Amended Summons seeking leave to appeal, the Plaintiff seeks orders: 1. Granting leave to appeal from the whole of the decision below; 2. Allowing the appeal; 3. Setting aside the decision or orders of the Appeal Panel dated 6 January 2017 and, in lieu thereof, making the following orders: 1. Appeal allowed; 2. Setting aside the decision of the Civil and Administrative Tribunal (Senior Member Boyce) dated 6 May 2016; 3. Application HB 14/49387 be dismissed; 4. The Defendants to pay the Plaintiff's costs in respect of the proceedings in the Tribunal in application HB 14/49387; and 5. The Defendants to pay the Plaintiff's costs of the appeal to the Appeal Panel. 1. The Defendants are to pay the Plaintiff's costs of the proceedings in the Supreme Court.
2. In summary, the dispute between the parties arises from a contract between the Plaintiff and the Defendants to build a home. Two contracts were executed: one between the homeowners, Mr and Mrs Rayfield, the Defendants in these proceedings, and Access Housing; and a second contract between the Defendants and Country Kit Homes for the construction of a kit home at their property in Lalor Park. Country Kit Homes supplied the kit home and Access Housing was to supply the management services for the construction and/or erection of the kit home. Country Kit Homes and Access Housing have at least some common directors.
3. The contract between Access Housing and the Defendants was a cost-plus contract. The contract was purportedly terminated by Access Housing on 6 October 2012 for failure by the Defendants to pay an invoice.
4. The contract between Country Kit Homes and the Defendants was entered into on 8 May 2012 and was terminated by consent in 2014.
5. Essentially, the dispute between the Defendants and Access Housing arises from the claim by the Defendants that necessary site certifications were not able to be obtained because of the performance of Access Housing in relation to critical steps. As a consequence, the Defendants brought an application against Access Housing in NCAT claiming breach of the statutory warranties contained in s 18B of the Home Building Act 1989.
6. The Construction Certificate issued on 14 May 2012 outlined mandatory critical stage inspections, one of which was said to be the third inspection. The third inspection was described as an inspection being the certification of the concrete piers or footings prior to pouring the slab for the floor that was to occur "prior to pouring of an in situ reinforced concrete element".
7. There is a dispute as to whether this critical inspection took place. If it did take place, no certification was executed.
8. It is contended by Access Housing that it was carried out by FBC Certifications on 29 June 2012, but they cannot clarify who, on behalf of FBC Certifications, was said to perform the inspection. There is no written evidence of the result of the alleged inspection.
9. There is also a dispute as to whether the Plaintiff or Defendants undertook the responsibility to organise the inspections and the certification required as a result of them.
10. Further, certification of the concrete encasement of the main sewer line was also required. This certification was completed. However, Sydney Water, which performed the encasement, did not receive notification of the certification of the concrete piering.
11. The Defendants submit that once the concrete floor was poured onto the footings, it was impossible to obtain certification of the footings that was required for the third inspection.
12. An expert engineer qualified by the Defendants, Mr Maglis, expressed the opinion that, if the building could not be certified and an Occupation Certificate granted, then it was necessary to demolish the house. However, he qualified that opinion by suggesting that a structural design engineer could be consulted to perform load testing. Such testing is difficult, intrusive and may not result in certification of the piers or footings. Absent either of those courses, certification could not be granted and an Occupation Certificate would not be forthcoming.
13. The Senior Member, at first instance, decided that the only remedy for the defective certification process was demolition of the building. The Appeal Panel upheld this decision. From that decision of the Appeal Panel, the matter was brought to the Court.

Grounds of Appeal

1. The Plaintiff raises four grounds of appeal (two of which have sub paragraphs), which are in the following terms: 1. The Appeal Panel erred in law in holding that the Senior Member at first instance (the "Primary Member") found correctly that demolition of the building was the only remedy, or a necessary and reasonable course to adopt, in circumstances where that finding was contrary to legal principle, was not supported by evidence, or alternatively was not reasonably open on the whole of the evidence. 2. The Appeal Panel erred in law in concluding that the Plaintiff was liable to the Defendants because of the absence of an Occupation Certificate or some other certificate for the building in circumstances where: 1. it did not identify any contractual, statutory or other legal obligation on the part of the Plaintiff to obtain an Occupation Certificate or some other certificate for the building; 2. the case made against the Plaintiff by the Defendants in the proceedings before the Primary Member was not that the Plaintiff had an obligation to obtain an Occupation Certificate or some other certificate for the building but rather an obligation to arrange for critical stage inspections to take place; and 3. it was a denial of procedural fairness for the Appeal Panel to hold that the Plaintiff was liable to the Defendants on the basis of an obligation to obtain an Occupation Certificate or some other certificate for the building when such [a] case had not been put against the Plaintiff by the Defendants in the proceedings before the Primary Member. 1. The Appeal Panel erred in law in holding that the Primary Member had afforded the Plaintiff procedural fairness in circumstances where: 1. the Primary Member gave weight to the statutory declaration of Matthew Bodley dated 11 August 2015; and 2. the Primary Member failed to ensure that the Plaintiff had an opportunity to cross-examine Matthew Bodley. 1. The Appeal Panel erred in law in failing to hold that the Primary Member erred in finding that the critical stage inspection of the footings did not take place in circumstances where that finding was not reasonably open on the whole of the evidence.

Legislative Provisions

1. The Home Building Act 1989 contains warranties in relation to residential building work, which are appropriate to recite. Section 18B of the Home Building Act is in the following terms: "18B Warranties as to residential building work (1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work: (a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment. (2) The statutory warranties implied by this section are not limited to a contract to do residential building work for an owner of land and are also implied in a contract under which a person (the principal contractor) who has contracted to do residential building work contracts with another person (a subcontractor to the principal contractor) for the subcontractor to do the work (or any part of the work) for the principal contractor."
2. It is also necessary to recite the basis upon which an appeal may be brought to the Court. Section 83 of the Civil and Administrative Tribunal Act 2013 allows an appeal on "a question of law", and not of right but only, "with the leave of the Supreme Court", against a decision of the kind made here by the Appeal Panel.
3. The Plaintiff relies upon the judgment of the High Court in Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32. While the judgment in Kostas, supra, informs an analysis of the issues, or some of them, with which the Court must presently deal, the legislative scheme for appeals examined by the High Court in Kostas was different from that contained in s 83 of the Civil and Administrative Tribunal Act.
4. Most importantly, an appeal under the then Consumer, Trader and Tenancy Tribunal Act 2001 (with which appeal provisions the High Court was dealing) allowed an appeal "with respect to a matter of law", whereas the Civil and Administrative Tribunal Act allows an appeal "on a question of law".
5. The High Court found that the words "with respect to" were significant in the grant of jurisdiction in relation to the appeal in Kostas. It is necessary to examine whether the grounds raised in this case are "a question of law", not whether they are a question "with respect to a matter of law".

A Question of Law

1. The distinction between an issue of law and an issue of fact has been expressed in a number of ways. However it is expressed, it is often difficult to apply the distinction. The classic and long-standing expression of the difference between a question of law and question of fact is that of Sir Frederick Jordan CJ in Australian Gas Light Co v Valuer General (NSW) (1940) 40 SR (NSW) 126, in which his Honour said: "In cases in which an appellate tribunal has jurisdiction to determine only questions of law, the following rules appear to be established by the authorities: (1) The question what is the meaning of an ordinary English word or phrase as used in the Statute is one of fact, not of law. This question is to be resolved by the relevant tribunal itself, by considering the word in its context with the assistance of dictionaries and other books, and not by expert evidence; although evidence is receivable as to the meaning of technical terms; and the meaning of a technical legal term is a question of law: Commissioners for Special Purposes of Income Tax v Pemsel. (2) The question whether a particular set of facts comes within the description of such a word or phrase is one of fact. (3) A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences. (4) Such a finding can be disturbed only (a) if there is no evidence to support its inferences, or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences. Thus, if the facts inferred by the tribunal from the evidence before it are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law. If, however, the facts so inferred are capable of being regarded as either within or without the description, according to the relative significance attached to them, a decision either way by a tribunal of fact cannot be disturbed by a superior Court which can determine only questions of law. (Citations omitted.)"
2. The distinction between questions of law and questions of fact has been the subject of many subsequent judgments: Collector of Customs v Agfa-Gaevert (1996) 186 CLR 389; [1996] HCA 36; Ormwave Pty Ltd v Smith (2007) 5 DDCR 180; [2007] NSWCA 210; Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280; [1993] FCA 456; Haider v JP Morgan Holdings Aust Ltd (2007) 4 DDCR 634; [2007] NSWCA 158; Krishna v DPP (NSW) (2007) 178 A Crim R 220; [2007] NSWCCA 318.
3. In the context of the Criminal Appeal Act 1912 which confines the right of appeal against conviction to grounds which "involve a question of law alone", see also Williams v The Queen (1986) 161 CLR 278; [1986] HCA 88; Morris v The Queen (1987) 163 CLR 454; [1987] HCA 50; M v The Queen (1994) 181 CLR 487; [1994] HCA 63 and, in relation to civil proceedings, as already mentioned, Kostas, supra.
4. In Agfa-Gaevert, supra, the High Court summarised the taxonomy to which the Federal Court referred in Pozzolanic, supra, in the following terms: "[1] The question whether a word or phrase in a statute is to be given its ordinary meeting or some technical or other meaning is a question of law. [2] The ordinary meaning of a word or its non-legal technical meaning is a question of fact. [3] The meaning of a technical legal term is a question of law. [4] The effect or construction of a term whose meaning or interpretation is established is a question of law. [5] The question whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law."
5. After referring to the Pozzolanic taxonomy, the High Court said: "In Pozzolanic, the Full Court qualified the fifth proposition [recited above]. The Court said that, when a statute uses words according to their ordinary meaning and it is reasonably open to hold that the facts of the case fall within those words, the question as to whether they do or do not is one of fact."
6. Nevertheless, each taxonomy is useful as a guide only and the distinction between a question of law and a question of fact is one that is often difficult to discern and, sometimes, even more difficult to express.

Tribunal Decisions

1. The Senior Member, sometimes referred to by the Plaintiff as the Primary Member, analysed the jurisdiction of NCAT and referred, expressly, to the warranties under s 18B of the Home Building Act (extracted above). The Senior Member referred expressly to the terms of the contract, its repetition or reiteration of certain statutory warranties and, particularly, that the works performed by the Plaintiff being works "associated with the construction of the dwelling" were "to comply with the Building Code of Australia and all other relevant codes and Australian Standards that ensured the works would be suitable for occupation".
2. Much of the evidence was adduced jointly, including the evidence in the Statutory Declaration of Matthew Bodley on 11 August 2015. One of the issues before the Tribunal was which of the parties had responsibility for obtaining the certification of the footings and piers. In some respects that issue is peripheral.
3. As the works, performed by the Plaintiff, were required to be performed in a manner that was to comply with the Building Code that "ensured the works would be suitable for occupation", this required works to be performed in a manner that allowed for an Occupation Certificate to be granted.
4. Assuming for the purposes of this paragraph only, and not deciding, that the Defendants were responsible for obtaining the relevant certificate, the Plaintiff, as the builder, must have been aware at the time that it performed the work of pouring the slab, without having seen or obtained a certificate as to the footings, that pouring the slab would render the footings and piers unable to be certified and an Occupation Certificate unable ever to be granted. In other words, the difficulty with the assertion by the Plaintiff that it was the Defendants who were required to obtain the certification of the footings and piers is that, until such certification was obtained, pursuant to the Plaintiff's obligations under the contract, it could not have performed work which rendered the obtaining of that certificate impossible.
5. Access Housing was required to perform the work in a manner which "ensured" the home was "suitable for occupation" by complying with Code and allowing an Occupation Certificate to be obtained. The home would never be suitable for occupation and would not be allowed to be occupied without an Occupation Certificate. That is the reasoning process, in this regard, of each of the Senior Member, at first instance, and the Appeal Panel.
6. The Appeal Panel dealt expressly and directly with each of the grounds of appeal raised by the Plaintiff before them. More importantly, the Appeal Panel found, as a matter of fact, that the Statutory Declaration of Matthew Bodley, a person who it was claimed by the Plaintiff, was not available for cross-examination by them, was tendered by the Plaintiff. It is unnecessary to repeat or recite at length the terms of the Appeal Panel decision.

Ground 1: The Appeal Panel erred in law in holding that the Senior Member at first instance found correctly that demolition of the building was the only remedy, or a necessary and reasonable course to adopt, in circumstances where that finding was not reasonably open on the whole of the evidence

1. As was made clear by the High Court in Kostas, supra, and many other judgments, the issue of whether there is "no evidence" of a fact that was determined by a court or tribunal is an issue of law. In other words, if a court or tribunal determines a fact upon which there is no evidence, the error is an error of law.
2. However, once there is some evidence upon which the court or tribunal may act, the circumstance that a court or tribunal (or member thereof) chooses some evidence over other evidence is not, without more, a question of law.
3. The ground of appeal expressed as Ground 1 suggests that the Appeal Panel erred in law by finding that the Senior Member at first instance found correctly in relation to a factual issue. There is little doubt that the Senior Member at first instance had evidence before him that suggested demolition of the building was a remedy (the most convenient remedy and the only remedy that would guarantee that an Occupation Certificate could issue).
4. Undoubtedly, on the material before the Court, the Senior Member had evidence before him that demolition was "a necessary and reasonable course to adopt". Whether the finding was "reasonably open" does not, itself, raise a question of law. It is not said to be an irrational conclusion and could not be so described.
5. In truth, the issue sought to be raised by the ground of appeal, expressed as Ground 1, is that the finding of fact should have been different and that there was another available course, namely the testing by a structural engineer. However, we are dealing with a Tribunal with significant expertise in these areas. The determination by the Senior Member at first instance that the most convenient remedy was demolition does not raise a question of law. Rather, it is a question of fact which ought not be disturbed by this Court on appeal.

Ground 2: The Appeal Panel erred in law in concluding that the Plaintiff was liable to the Defendants because of the absence of an Occupation Certificate for the building

1. The second ground of appeal reverses the reasoning process of the Appeal Panel.
2. I accept and agree with the view that carrying out the works to "ensure" the works would be suitable for occupation did not necessarily require the builder to obtain such certificates as were necessary to obtain an Occupation Certificate. However, Ground 2 is misconceived.
3. It is not that the Plaintiff had a contractual, statutory or other legal obligation to obtain an Occupation Certificate; it is that the Plaintiff had a contractual, statutory and, possibly, other obligation to perform the works in a way that an Occupation Certificate could be obtained. The Plaintiff was required to ensure the works were carried out in a manner that allowed for the Occupation Certificate to issue.
4. Thus, the distinction between Grounds 2(a) and 2 (b) does not amount to an error of law and is a misunderstanding of the reasoning of the Senior Member at first instance and of the Appeal Panel. The same reasoning applies to any other certificate.

Ground 3: The Appeal Panel erred in law in holding that the Primary Member had afforded the Plaintiff procedural fairness

1. As has been made clear, the Appeal Panel (and the Senior Member at first instance), received the evidence of Matthew Bodley because it was tendered, at least jointly, and possibly only, by the Plaintiff. It is not a denial of natural justice or procedural fairness to deny to a party, who adduces evidence, the capacity to cross-examine the witness on the statement adduced.
2. Indeed, the rules of evidence would suggest that, having adduced the Statutory Declaration as evidence of Mr Bodley, the Plaintiff would be denied the capacity to cross-examine Mr Bodley: see Evidence Act 1995 ss 11, 26(a), 28, 29 and 37. It is unlikely that a party would be given leave to cross-examine a witness on whose statement the party relies.
3. Further, even in relation to witnesses not called by a party, a denial of the right to cross-examine is not always a denial of procedural fairness: T.A. Miller v Minister for Housing [1968] 1 WLR 992 at 995; [1968] 2 All ER 633. Nevertheless, if evidence is adduced against a party, a court or tribunal required to act judicially is required to ensure that the party against whom the evidence is tendered is to be informed of the evidence adverse to its interests in order to have the opportunity to controvert it. Often, the only practicable means of controverting evidence is to cross-examine on it: see Australian Postal Commission v Hayes (1989) 23 FCR 320 at 324-327; [1989] FCA 176.
4. In this instance, the evidence was adduced, at least in part, by the Plaintiff. There is no requirement on the Tribunal to inform the Plaintiff, in those circumstances, that the evidence has been adduced and there is no requirement on the Tribunal to allow cross examination by the Plaintiff on the Plaintiff's own evidence.
5. As has been said, a tribunal required to act judicially is required to afford to each party an appropriate opportunity to prepare and to present that party's case. It is not a requirement of the rules of procedural fairness to ensure that the party given such an opportunity utilises it to best advantage: Sullivan v Department of Transport (1978) 20 ALR 323 at 343; (1978) 1 ALD 383.
6. As is clear from the foregoing summary Ground 1 raises no question of law. Ground 2 of the appeal misstates the approach of the Appeal Panel. The Appeal Panel required the works to be performed in a workmanlike manner and to have been concluded in a way that ensured it was capable of occupation. In order to ensure it was capable of occupation, the works had to be completed in a manner that ensured that an Occupation Certificate was capable of being issued.
7. The manner in which the works were performed by Access Housing was, according to the Appeal Panel, with whose conclusion I agree, carried out in a manner which prevented the granting of an Occupation Certificate, in that by continuing to carry out works without possession of an Inspection Certificate for the footings and piers, Access Housing prevented anyone from obtaining the Occupation Certificate and prevented the Defendants from occupying the house.
8. Ground 3, the denial of natural justice or procedural fairness in relation to the Senior Member, at first instance, not affording the Plaintiff the right to cross-examine Matthew Bodley, has already been dealt with. There was no requirement to allow such cross-examination.

Ground 4: The Appeal Panel erred in law in failing to hold that the Primary Member erred in finding that the critical stage inspection of the footings did not take place in circumstances where that finding was not reasonably open on the whole of the evidence

1. Lastly, the Plaintiff relies upon an alleged error by the Appeal Panel in failing to hold that the Senior Member erred in finding that the inspection of the footings did not take place. It is said by the Plaintiffs that that finding was not reasonably open on the whole of the evidence. The evidence was contradictory. There was evidence that an inspection occurred. There was also evidence by the person who, in the earlier mentioned evidence, was said to have inspected the footings, that no such inspection occurred.
2. First, there is no reason not to prefer the direct evidence of the person who was said to have performed the inspection.
3. Secondly, the preference for some evidence over other evidence does not make the preferred evidence "not reasonably open".
4. Thirdly, whether the inspection took place or not is only marginally relevant. Assuming that the inspection took place, one would then need evidence that the inspection showed that the footings and piers were satisfactorily constructed. There is no suggestion of any such finding or certification.
5. Fourthly, it is not whether the inspection occurred that is crucial. It is the fact that work continued and concrete was poured which prevented the certification of the footings and piers and, thereby, prevented the issuing of an Occupation Certificate. The builder, in performing that work, performed work that failed to perform the work in a manner that complied with the Codes and Regulations that ensure the house "would be suitable for occupation".
6. The evidence before the Tribunal, both at first instance and on appeal, was that in the absence of the certification of the footings and piers, no Occupation Certificate could issue. Further, the evidence was that the house would need to be demolished and rebuilt before such a certificate would issue.
7. There may have been another means by which, retrospectively, that certificate would issue, but such an issue may only go to the quantification of damage and, even if it went beyond that issue, was a question of fact. The Occupation Certificate would not, according to the certifiers, issue without certification of the footings and piers. That evidence is to the effect that, without the certification of the piers and footings, the house would require demolition and rebuilding, before occupation.
8. The view of the Court is that there is no, or no substantial, question of law raised by any of the grounds upon which the Plaintiff relies. The decision of the Senior Member is, as a matter of law and principle, one that was open to him. Similarly, the decision of the Appeal Panel is not tainted by any error of law.
9. The description of these errors as errors of law is not arguably open. Further, there has been no denial of procedural fairness, nor any reason why the issues of fact ought not to be left to NCAT and for the parties to abide by the well-reasoned and competent adjudication of the factual issues between them.
10. In those circumstances the Court makes the following order: 1. Leave to appeal denied; 2. Summons dismissed; 3. The Plaintiff shall pay the Defendants' costs of and incidental to the proceedings.

Amendments 25 February 2019 - Publication restriction removed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 February 2019