PRACTICE AND PROCEDURE - Section 80(3) of the Civil and Administrative Tribunal Act 2013 (NSW) - determination of appeal by way of rehearing
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PRACTICE AND PROCEDURE - Section 80(3) of the Civil and Administrative Tribunal Act 2013 (NSW) - determination of appeal by way of rehearing
Judgment (9 paragraphs)
[1]
Introduction
This is an appeal from the decision of the Consumer and Commercial Division of the Tribunal made 1 May 2017 in matter GEN 17/51976 (the Decision).
The respondent, Ms Li, had filed an application on 7 December 2017. She asked the Tribunal to order the appellant to pay her $6,200 in respect of flooring services it had provided to her in November 2017. Those services were the installation of floorboards to the ground and first floor of her home.
The respondent was named as Silver Trading Timber Flooring, with an Australian Company Number (ACN) of 31 600 067 712. That ACN belongs to the appellant, a matter to which we will return below.
The matter was first listed for conciliation and hearing on 9 February 2018. Conciliation was not successful, and the matter adjourned for hearing. A representative of the appellant appeared on this day. The Tribunal made directions for the filing of evidence. The respondent filed her evidence. The appellant did not.
The final hearing was held on 1 May 2018. There was no appearance by the appellant. The Tribunal was satisfied that it had been sent notice of the hearing and proceeded to determine the matter in the absence of the appellant. Based on the evidence before it, including the evidence of the applicant and a report of Future Home Builders Pty Ltd (Expert Report) dated 20 February 2018, the Tribunal ordered the appellant to pay the respondent a full refund, being $6,200.00. The Tribunal decided that the appellant had breached the Australian Consumer Law (NSW) (ACL) by not providing goods (that is, the floorboards) of acceptable quality, and that the services it rendered in installing the floorboards were not provided with due care and skill.
The appellant appeals from that decision. For the following reasons, we have decided:
1. to deal with the internal appeal by way of a new hearing; and
2. to confirm the original order of the Tribunal.
[2]
Preliminary
There are two preliminary issues to address. The first is the identity of the appellant. The second is why we have decided to deal with this appeal by way of a new hearing.
[3]
The identity of the appellant
The matter commenced when Ms Li filed an online application on 7 December 2017. In her application, Ms Li named Silver Trading Timber Flooring, ACN 600 067 712, as the respondent. However, in its reasons for decision, the Tribunal ordered Silver Trading Timber Flooring Pty Ltd (emphasis added) to pay her $6,200, as a refund of the costs of the floorboards and their installation.
At the appeal hearing, we raised the issue of the different names. Mr Yu, the director of the appellant, provided details about the proprietor of the registered business name Silver Trading Timber Floor and the acquisition of that business name from Silver Trading Timber Flooring Pty Ltd, a company apparently deregistered in 2014.
We did not have the file for matter GEN 17/51976 before us, so we do not know the circumstances in which the name of the respondent was changed to Silver Trading Timber Flooring Pty Ltd. However, it was apparent from what we have been told by the parties that the order made was not in conformity with who were the actual parties to the dispute and the original supply of goods and services. In this regard, the Appeal Panel noted to the parties that the order made at first instance in its present form appeared unenforceable. The Appeal Panel also noted that the order could be amended by consent to reflect the actual position and that if the amendment was agreed to, the appellant would become liable, subject to the determination of the issues raised on appeal. In this way, future proceedings could be avoided and the real issues in dispute resolved.
Quite sensibly, both parties agreed that the name of the respondent in matter GEN 17/51976 needed to be amended to correct the error, as did the name in the appeal proceedings. Consequently, orders were made by consent to amend the appellant's name in the proceedings at first instance and on appeal to Andy and Patrick Floor Covering Pty Ltd t/as Silver Trading Timber Floor.
[4]
Appeal to proceed by way of rehearing
We now turn to why we have dealt with the appeal by way of rehearing.
Section 80(3) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) provides that the Appeal Panel may:
(a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and
(b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances.
It is appropriate at this point to set out the procedural background to the matter. There is no dispute that:
1. Ms Li filed her application on 7 December 2017;
2. the parties attended a conciliation and hearing on 9 February 2018 but were unable to resolve the dispute;
3. the Tribunal adjourned the application for a formal hearing, and made directions for the exchange of documents by both parties;
4. Ms Li provided a report of Future Home Builders Pty Ltd dated 20 February 2018 (the Expert Report) to the Tribunal and to the appellant;
5. the appellant provided no documents. Here we note that Mr Yu told us that the appellant had sent a number of documents to Ms Li, but there was a finding by the Tribunal that they were not filed, a finding not challenged in the appeal;
6. the appellant did not attend the Tribunal hearing on 1 May 2018, and the Tribunal made an order and published reasons the subject of the appeal;
7. on 14 May 2018 the appellant filed a Notice of Appeal. It identifies two grounds of appeal. The first ground is that the appellant did not receive the notice of hearing on 1 June 2018. The second ground is that "the main evidence the Tribunal accepted is from Future Home Builders Pty Ltd. As a private owned company, we did not accept it to be the third party in this case";
8. the Appeal Panel held a directions hearing for the management of the appeal on 22 May 2018. Amongst other orders, the Appeal Panel directed the appellant to lodge with the Appeal Panel and provide to Ms Li by 1 June 2018:
1. all evidence provided to the Tribunal on which the appellant intended to rely at the appeal hearing;
2. any fresh evidence on which the appellant intended to seek leave to rely at the appeal hearing;
3. written submissions in support of the appeal;
1. the only document filed by the appellant was a one page of submission, titled "grounds of appeal". Those submissions were filed on 1 June 2018 and relate to the accuracy and reliability of the Expert Report;
2. similar directions were made in respect of Ms Li. However, she provided no documents to the Appeal Panel.
It is against that background the Appeal Panel was asked to consider the appeal.
The Appeal Panel commenced the hearing by identifying the documents that we had received in relation to the appeal and Ms Li's response to the appeal, but the only relevant document we had was the appellant's document titled "grounds of appeal". However, at the hearing, the appellant provided us with a copy of the Expert Report, some email correspondence between the parties and a copy of its warranty for laminated flooring products.
We discussed the appropriate approach to the appeal with the parties. They agreed that the critical issue was whether or not the Expert Report provided was sufficient evidence for the Tribunal to make the order it did. We indicated that one approach could be to conduct a rehearing pursuant to s 80(3) of the NCAT Act, but the Appeal Panel indicated it would only do so with the agreement of the parties on the basis that the only question to be determined was whether the Expert Report was sufficient to prove Ms Li's claim and with no new evidence on the point.
In this regard, it was noted this approach would preclude either party providing new evidence or cross-examining the expert, the hearing being limited to submissions in relation to the Expert Report.
After discussion, both parties agreed as follows:
1. the Appeal Panel was to determine whether the report of Future Home Builders Pty Ltd dated 22 February 2018 is sufficient to prove the flooring supplied and installed by the appellant is defective;
2. if yes, the appellant is to pay the respondent the sum of $6200.00 by way of refund;
3. if no, the appeal was to be allowed, the original order set aside and the original application dismissed.
Consequently, it became unnecessary to consider the first ground of appeal, namely the denial of procedural fairness in that the Tribunal's decision was made in the absence of the appellant.
[5]
The Expert Report
The Expert Report is relatively brief so we will set out its wording in full below. We will underline certain portions to which we will make further reference.
The Expert Report is an 8 page document consisting of commentary and photographs. It was prepared by Mr Mubin Bayat, a director of Future Home Builders Pty Ltd. The Expert Report states that Future Home Builders Pty Ltd has a builder's licence, number 287551C. There was no evidence to suggest the company was not a licensed builder and neither party challenged this fact.
The Expert Report relevantly states (we have added paragraph numbers for ease of reference and omitted the web page link and page numbers of the report):
[1] A site inspection was carried out on the 11/02/2018 at [XXXXX] Kellyville for inspecting 12.mm Uniclic laminate floating floor supplied and installed by [the appellant].
[2] The laminate flooring was laid on the entire ground floor living area and the whole first floor living area.
[3] The defect in laminate floor panels considered is as follows
• The click system of the supplied floor boards looks 'inappropriate and poor' compared to approved Uniclick™ system. For the approved click system please refer to the link below …
Photos of supplied laminate planks
[3 photos]
[5] None of the laminate planks had wax applied on the groove section of the panels to avoid any cracking noise.
The defect in laminate floor panels installation
[6] • Subfloor needs to be cleaned professionally by vacuum before laying underlay, and top of underlay needs to be kept clean to lay the floor boards, It seems that subfloor not cleaned properly also top of underlay is not cleaned and as a result of this negligence the floor boards make noise when walking on and that's in around 80% of the floor boards when someone walk on the floor
[7] • Due to poor quality of the clicks system on the edges of the floor boards, there are already gaps between the laid floor boards on ground floor and first floor
[8] • There are 10 floor boards already popping up due to poor quality of the click and lock system on the ground and first floor.
See attached photos
[5 photos]
[9] • maximum installation of floating laminate floors in lengths should not exceed more than 9 meters and in width 6 meters. The means when laying floating laminate floors, you can lay it in length to a maximum of 9 meters and when reaches to 9 meters in lengths the floor boards needs to stop, leave 10mm gap and start installing the new floor boards to cover any shrinkage and extension.
[10] On the first floor the floor boards are laid and did not stop when it reached the maximum allowance of 9 meters, the floor boards are laid in one piece of 15 meters in length, as a result the floor boards might pop up.
See attached photos
[1 photo]
Overall inspection result
[11] • The overall condition of the floorboards supplied and installed identified as 'poor in quality'
[12] • There is strong possibility that gaps between the floorboards could go bigger
[13] • Possibility of floor boards pop up due to quality of click and lock system
[14] • Possibility of the dust not cleaned before laying the underlay to raise health issue
Any enquiries please do not hesitate to contact me.
[6]
Consideration
The question the Tribunal had to determine was whether Ms Li was able to establish on the balance of probabilities that the floorboards and their installation were defective.
The Tribunal found that:
1. the parties had entered into an agreement on 15 September 2017 for the supply and installation of a timber floor;
2. the work was completed by November 2017;
3. Ms Li paid $6,200 to the appellant;
4. By December 2017 Ms Li began to experience difficulties with the floor, including peeling of the laminate, and creaking noise when walking on the floor;
The Tribunal then referred to the Expert Report, and set out explicitly those paragraphs set out above at 22 [11], [12], [13] and [14] and paraphrased paragraphs 22 [6], [7], [8] and [9].
In Forster v Hunter New England Area Health Service [2010] NSWCA 106, Macfarlan JA, referring to Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705, set out the requirements for expert evidence in order for it to be probative of a matter in issue. At [30]-[31] his Honour said:
30 As Heydon JA (as his Honour then was) indicated in Makita, for an expert report to be useful it is necessary for it "to comply with a prime duty of experts in giving opinion evidence: to furnish the trier of fact with criteria enabling evaluation of the validity of the expert's conclusions" (at [59]). Heydon JA referred to the observations of Lord President Cooper in Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh [1953] SC 34 at 39-40 which included the following:
"The scientific opinion evidence, if intelligible, convincing and tested, becomes a factor (and often an important factor) for consideration along with the whole of other evidence in the case, but the decision is for the Judge or jury. In particular the bare ipse dixit of a scientist, however eminent, upon the issue in controversy, will normally carry little weight, for it cannot be tested by cross-examination nor independently appraised, and the parties have invoked the decision of a judicial tribunal and not an oracular pronouncement by an expert" (cited in Makita at [59]).
31 To like effect are the statements, also quoted by Heydon JA, in Makita of Sir Owen Dixon in an extra-judicial address that "[c]ourts cannot be expected to act upon opinions the basis of which is unexplained" (Makita at [60]) and of the authors of Phipson on Evidence, 15th edition (2000) London Sweet & Maxwell, that "[i]n general, an expert may give evidence in chief as to the grounds on which he has reached his opinion, and it may be said that, without the grounds, the opinion is valueless" (Makita at [63]).
The appellant submits that no reliance should be placed on the Expert Report, and that the Appeal Panel should not be satisfied that it is sufficient to prove Ms Li's claim. The appellant relied on the six grounds set out in his written submissions. These submissions fall into three categories, namely:
1. Future Home Builders Pty is not independent;
2. Future Home Builders Pty is not suitably qualified;
3. the Expert Report does not provide sufficient reasoning and is not persuasive of the matters about which an opinion is offered.
We shall consider each submission in turn.
First, the appellant submits that Future Home Builders Pty Ltd is a competitor, and that it could not give a "fair report". The appellant submits that the Australian Timber Flooring Association should be the "third party" to provide a report.
There is no evidence, save for the unsworn statement of Mr Yu (for the appellant) and the unsigned submission on which he relies; being material provided in this appeal, that Future Home Building Pty Ltd is a trade competitor. Even if it was, there is no evidence whatsoever to support a submission that it would not be able to give a "fair" report to the Tribunal.
Secondly, there is no evidence to support a submission that Future Home Builders Pty Ltd lacks expertise to prepare the report. As we have noted, Future Home Builders Pty Ltd holds a current builder's certificate. This is some evidence of qualifications.
In this respect, we note that the Tribunal's Procedural Direction 3, Expert Evidence, does not apply to proceedings in the Consumer and Commercial Division of the Tribunal involving claims under the Home Building Act 1989 (NSW) with a value less than $30,000. In Khan v Kang [2014] NSWCATAP 48 the Appeal Panel said at [50] and [53] that:
50. A quotation from a supplier willing to rectify defects or complete incomplete work can, depending on the circumstances and the nature and content of the quotation, constitute evidence of the defects or incomplete work and of the amount required to remedy the defective work or complete any incomplete work. For example, if the person providing the quotation was suitably qualified or experienced, inspected the work, identified defects or incomplete work on that inspection, recorded his or her observations in the quotation and gave a price to rectify or complete the work, it is difficult to understand why that quotation would not provide evidence in support of a claim for defective or incomplete work. The weight to be given to the evidence would, of course, depend upon many factors. Nonetheless, it would be wrong to conclude that simply because an applicant relied only upon a quotation or quotations for the rectification or completion of work that there was no evidence to support the claim that the work was defective or incomplete.
53. As to the implicit premise that in order to establish a claim for defective or incomplete work in a home building matter there must be a building inspection report by an independent builder to demonstrate any liability of the respondent, such a premise is wrong. Whilst a building inspection report by an independent builder may be very helpful in establishing liability, such a report is not always necessary in a case such as the present. To suggest that an applicant in a home building matter involving only a small monetary amount must engage an independent builder to provide a building inspection report before the applicant can succeed in his or her claim is also inconsistent with the principles set out in ss 36(1) and (4) which require the Tribunal to facilitate the just, quick and cheap resolution of the real issues in proceedings and to conduct proceedings so as to facilitate the resolution of the issues in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject matter.
In other words, the Appeal Panel concluded that evidence from a person who might otherwise be engaged to rectify defects might be relevant and given some weight in determining questions of liability and damages for defective work.
Here of course, there was an independent building report, in the form of the Expert Report. In this regard, there is no evidence to suggest this builder was contracted to carry out the rectification work or had a commercial relationship with the respondent other than as a person providing expert evidence.
Thirdly, the appellant criticises the qualified language of the Expert Report such as:
"The click system of the supplied floor boards looks inappropriate and poor";
"It seems that subfloor not cleaned properly",
and also criticises the use of the word "possibility" in the conclusion.
These statements need to be considered in the context of the report when read as a whole.
The standard of proof applicable to the present claim is that an applicant must prove her claim on the balance of probabilities. In Halsbury's Laws of Australia (online) (Halsburys) the rule is stated as follows:
[195-330] Rule In civil cases, the standard of proof is the balance of probabilities.1 The strength of the evidence necessary to establish a matter on the balance of probabilities may vary according to the nature or gravity of the fact to be proved.2 If the probabilities are equal, the burden is not discharged.3 nor is it discharged if the tribunal of fact cannot decide one way or the other.4 However, the existence of contrary possibilities is not conclusive against proof on the civil standard but rather, one fact which, with others, must be taken into account in deciding whether the onus of proof has been discharged.5
The evidence required to satisfy the standard of balance of probabilities may depend on the relevant matters, including the nature of the cause of action or defence, the nature of the subject matter and the gravity of the matters alleged.6
(footnotes removed)
One of the authorities cited in footnote 3 in Halsburys is Davies v Taylor [1972] 3 All ER 836. There, Lord Reid said at 838:
"When the question is whether a certain thing is or is not true - whether a certain event did or did not happen - then the court must decide one way or the other. There is no question of chance or probability. Either it did or it did not happen. But the standard of civil proof is a balance of probabilities. If the evidence shews a balance in favour of it having happened then it is proved that it did in fact happen.
Similarly, the Appeal Panel said in Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [18]:
A court or tribunal is informed and persuaded only by the presentation of evidence. Evidence is material which tends to persuade the court or tribunal of the truth or probability of the facts being alleged. Evidence may be photograph[ic], documentary or testimonial. But it will only succeed in persuading the tribunal if it appears as being truthful, reliable and cogent. In civil cases the standard or proof depends on the balance (or preponderance) of probabilities. This simply means that a party must prove that their case is more likely than not to be true. If the scales tip in favour of the party, however slight, they have proved their case. But if the probabilities are equal, they have failed to prove their case. ...
The evidence to which we have referred above establishes the following matters:
1. The floor boards were not properly waxed and were therefore causing noise. Eighty per cent of the floor was affected: Expert Report at [5] and [6];
2. The floor boards laid are of excessive length, namely greater than 9 metres maximum: Expert Report at [9] and [10];
3. The subfloor had not been properly cleaned prior to laying the floor boards: Expert Report at [6];
4. The "click system" connecting the floor boards was of poor quality on the edges of the floor boards, gaps were already appearing on the ground and first floors: Expert Report at [7];
5. Ten floor boards on the ground and first floor had already "popping", due to the click and lock system being inadequate: Expert Report at [8].
[7]
Orders
The Appeal Panel makes the following orders:
1. By consent, pursuant to s 80(3) of the Civil and Administrative Tribunal Act 2013 (NSW) the appeal is to be dealt with by way of a new hearing.
2. Order 1 made 1 May 2018 in application GEN 17/51976 is confirmed, subject to the name of the respondent in that order being amended to Andy and Patrick Floor Covering Pty Ltd t/as Silver Trading Timber Floor.
[8]
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Principal Registrar
[9]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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: 18 July 2018
Parties
Applicant/Plaintiff:
Andy and Patrick Floor Covering Pty Ltd t/as Silver Trading Timber Floor
There is no reason to reject this evidence. To the contrary, the author of the Expert Report identifies the inadequacies in the goods (the click system being inadequate to prevent floor board popping), the inadequacies of the installation services (lack of wax lubrication causing noise in eighty per cent of the floor boards, the failure to properly prepare the subfloor dust free and the installation of floorboards of excessive length) as causing the failure of the flooring system and the loss of amenity. His reasoning is concise and enables evaluation by the Appeal Panel of why the expert held the opinions he has expressed.
The Tribunal at first instance concluded that the appellant had breached the Australian Consumer Law (NSW) (ACL)by providing goods that were not of acceptable quality, and that the services provided by the appellant had not been rendered with due care and skill. In this respect the Tribunal was referring to the consumer guarantees found in the ACL including that the goods be of acceptable quality and are fit for their purpose, and that the services be carried out with reasonable care and skill: see ss 54, 55 and 60 of the ACL.
There is no challenge in this appeal that the appellant was a person who supplied goods and services in trade and commerce and is a person to whom these provisions of the ACL apply. Consequently, the provisions of the ACL which we have identified apply to the goods and services provided by the appellant in the present case.
In our view, our findings of fact establish that there have been contraventions of these provisions of the ACL by the appellant in respect to the supply and installation of the flooring system. It follows that the respondent is entitled to compensation as agreed and the appellant's challenge to the Expert Report as being inadequate fails.
The parties agreed that the appeal would be conducted by way of rehearing, the sole question to be determined being whether or not the Expert Report was sufficient to prove Ms Li's claim. For the above reasons, we consider that the Expert Report was sufficient to do so. It follows that the order of the Tribunal made 1 May 2018, as previously varied on appeal to correct the error in the name of the respondent, should be confirmed.