Bui v DB Homes Australia Pty Ltd

NCAT Appeal Panel|2017-08-15

R 303 Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11 Lettau v Artwork Transport Pty Ltd [2017] NSWCATAP 14 Macquarie Grove Homes Pty Ltd v Tony Aylott & Glen Aylott t/as T & G Bricklaying; Tony Aylott & Glen Aylott t/as T & G Bricklaying v Macquarie Grove Homes Pty Ltd [2016] NSWCATAP 142 Mielczarek v Commissioner of Fair Trading [2016] NSWCATAP 217 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 Nanschild v Pratt [2011] NSWCA 85 PTM Corporate Advisory v Temple [2015] NSWCATP 218 Re Anasis; Ex parte Total Australia Ltd (1985) 11 FCR 127 Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 The Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Tomko v Palasty (No 2) (2007) 71 NSWLR 61 Whipps v Caravan & RV Central Pty Ltd [2017] NSWCATAP 163 White v Alto Artarmon Pty Ltd [2017] NSWCATAP 164 Yuen v Thom [2016] NSWCATAP 243 ZAU v Public Guardian [2016] NSWCATAP 53 Category: Principal judgment Parties: Huy Bui and Suzanne Bui (Appellants) DB Homes Australia Pty Ltd (Respondent) Representation: In Person (Appellants) R Sidey of Johnsons Solicitors (Respondent) File Number(s): AP 17/22767 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal (NSW) Jurisdiction: Consumer and Commercial Division Citation: [2017] NCATCD 28 Date of Decision: 11 April 2017 Before: G Kinsey, General Member File Number(s): HB 16/22637

Background

The underlying dispute concerns a building contact between homeowners ('the appellants') and a builder ('the respondent'). By application filed in the Tribunal on 12 May 2016 and amended 2 December 2016, the appellants sought orders for the rectification of certain building works associated with the construction of a "granny flat" and compensation from the respondent for loss of income due to the delay in completion of the building works and for loss associated with what was described as "insufficient insulation". The loss of income was said to arise because the appellants were delayed, due to the delay in completion of the building works, from renting out the flat. The loss associated with the insulation was said to arise from the fact that the builder installed insulation inferior to that specified in the contract and wrongly installed the insulation, resulting in anticipated increased heating and cooling costs.
The parties successfully settled their dispute relating to some of the claims, with the parties agreeing that the respondent would carry out certain rectification works and the appellants would pay the balance of the contract price. The parties, however, did not by consent resolve the claims with respect to the loss of income or the claims associated with the alleged inferior insulation and improper installation of the sisalation. This appeal arises from the Tribunal's decision with respect to those claims: 11 April 2017 ("the Decision").

At first instance

The Tribunal at first instance found: 1. That the appellants had three main claims (at [28]-[32]): 1. The "rectification of defects and completion of outstanding works". 2. A claim for the recovery of loss of rental income due to the failure to complete the project within 16 weeks, as allegedly represented. 3. A claim for compensation for the installation of incorrect insulation, in breach of contract. 1. The first claim, as mentioned, was resolved by consent. 2. The Tribunal determined that the appellants were not entitled to recover lost rental income (at [40] - [45]), on the basis that the contract did not stipulate a completion date and that the damages were too remote, being not in the usual course, nor being in the contemplation of the parties (per the rule in Hadley v Baxendale (1854) 9 Exch 341). In any event, the Tribunal found that the appellants failed to prove their loss, for instance, by demonstrating that a tenant was ready to move in to the granny flat. Further, the Tribunal found that their evidence of lost rental, in the absence of an appraisal by a real estate agent, was not a reliable indicator (at [49]). 3. With respect to the insulation, the respondent conceded that R2 batts had been installed in the walls (at [64]) and the Tribunal accepted that this was in breach of the contract, which stipulated R3 batts be used (at [65]). There was an additional issue about whether the sisalation had been incorrectly installed. This arose from a report by the appellants' expert builder. However, the respondent's expert subsequently attended the site to perform an "invasive inspection" of the wall and concluded that the sisalation had not been improperly installed, which the Tribunal accepted (at [55]). Nevertheless, the respondent's expert concluded that the overall rating of the insulation in the walls was equivalent to 2.7R, which was, on any view, lower than that stipulated in the contract (which had stipulated R3 batts and R1.5 sisalation). In this regard, the Tribunal found that there had been a breach of contract (at [65]). 4. The Tribunal rejected the proposed orders of the appellants, that the non-conforming batts be replaced or that compensation should be calculated by reference to the costs of replacing the batts. The Tribunal followed the reasoning of Bellgrove v Eldridge (1954) 90 CLR 613; [1954] HCA 36: a plaintiff is entitled to the amount required to rectify the defects complained of, subject to the qualification that the course to remedy the defects must be a reasonable course to adopt (at [69]-[70]). To the Tribunal's mind, the demolition of the plaster board to reinstall the insulation was not a reasonable course to adopt as it resulted in "economic waste" (at [71]). 5. After considering the general principles of damages extracted by the Appeal Panel in Macquarie Grove Homes Pty Ltd v Tony Aylott & Glen Aylott t/as T & G Bricklaying; Tony Aylott & Glen Aylott t/as T & G Bricklaying v Macquarie Grove Homes Pty Ltd [2016] NSWCATAP 142, from a summary in Baak v Concrete Services Group Pty Ltd [2016] NSWCATAP 42, the Tribunal determined that the appellants had suffered a loss, but that there was no precise evidence quantifying that loss, and so the Tribunal was required to determine the quantum of loss as best it could: at [74]-[75]. 6. The Tribunal noted that the appellants had put on no evidence from an expert as to the anticipated increased cost of heating and cooling and that there was otherwise "insufficient evidence" from which to determine that over a period of time, the "homeowners will pay additional heating and/or cooling costs". The Tribunal therefore rejected the appellants claim for payment of additional heating and/or cooling (at [76]). 7. On the other hand, the Tribunal accepted that there was likely a cost differential between R2 and R3 batts (or perhaps more precisely, R3 equivalents, because both parties accepted (at [57]) that R3 batts were not available for external walls). Accordingly, the Tribunal accepted that this loss occurred. Neither party provided evidence of that cost differential, yet, as the Tribunal found that there was a loss (the difference between the cost of R2 and R3 batts), the Tribunal, following the authority referred to above in Macquarie Grove Homes, accepted that it was incumbent upon the Tribunal to determine the quantum of that loss. The Tribunal did this by taking, as a starting point, the expert report of Mr Drexler (who assessed the costs of replacing the sisalation to be $2,000) and estimating that the cost of replacing insulation would be greater than the cost of replacing sisalation. Without making a precise finding as to that difference in costs, the Tribunal awarded the appellants $5,000 in damages based upon an assessment of the difference in the costs of the batts and the labour costs required to install them: at [78] and [79].

Notice of Appeal

The appellants challenge, in effect, the following of the Tribunal's conclusions: 1. Loss of income has not been established. 2. The claim for damages for ongoing increased heating costs has not been established. 3. $5000 was adequate compensation for the installation of R2 batts instead of R3 batts.
The appellants raise the following matters to ground the appeal: 1. Delay caused by the builder: the appellants contend that contrary to the findings of the Tribunal, there was an agreed time for the completion of the contract and that even if there was not an agreed time, then under the Home Building Act 1989 (NSW) (s 18B(d)), the work must be completed within a reasonable time and the failure to do so led to loss of rent and unrecouped borrowing costs. 2. Breaches of the Home Building Act: the appellants point to breaches of the Home Building Act including that the work was not insured (contrary to section 92(1)) and that an unreasonable demand for payment had been made (contrary to section 92(2)). 3. Misleading and deceptive conduct: the appellants contend that they were deceived by the respondent who represented in the written contract and in oral discussions that the insulation used in the walls would be R3 rated batts in addition to R1.5 sisalation, when the respondent installed R2 batts plus an unrated sisalation. The appellants contend that the respondent's refusal to correct the mistake contributed to the delay which led to the loss of income and loss of unrecouped borrowing costs. The appellants further contend that this constituted a breach of the Competition and Consumer Act 2010 (schedule 2, s 18(1)). 4. Heat loss: the appellants contend that the Tribunal erred in concluding that the claim for damages to compensate for heat loss had not been made out when it was accepted by the Tribunal that insulation inferior to that specified in the contract was installed. It was submitted that heat loss due to "insufficient building insulation" is a "known fact" which the Tribunal ought to have taken into account and in any event, evidence of the fact that insulation reduces average heating and cooling costs by around 30% was before the Tribunal by way of the respondent's expert's second report and also the appellants had supplied to the Tribunal technical specifications from a government website along with the appellants' calculations to quantify the loss.

Extension of time

The general rule is that an appeal must be lodged within 28 days from the day on which the appellants were notified of the decision appealed against or was given reasons for the decision (whichever is later): rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2013 (NSW). As indicated by the appellants on their Notice of Appeal, the notice of decision was received by the appellants on the 11th of April 2017. This appeal was filed on the 10th of July, 62 business days, or 90 calendar days, late.
The Appeal Panel in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [22] articulated the test for when the Appeal Panel might exercise its discretion to grant an extension of time. The discretion "can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant": Gallo v Dawson 93 ALR 479; [1990] HCA 30 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]. The respondent may be thought of as having a "vested right" to retain the benefit of the earlier decision: Jackamarra v Karkouer (1998) 195 CLR 516; [1998] HCA 27 at [4], affirmed in Jackson v NSW Land and Housing Corporation at [22]. The Appeal Panel should normally consider the length of delay, reason for delay, the appellants' prospects of success, and the extent of any prejudice suffered by the respondent: Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [55] per Basten JA, cited in Jackson v NSW Land and Housing Corporation at [23].
The reasons why the appellants say that an extension of time is warranted include: the appellants are unrepresented; the appellants' first language is not English; the appellants made enquiries about the decision by mail and by telephone, which took time; the respondent did not comply with the Tribunal's orders; there is no prejudice to the respondent; and the appellants have prospects of success.
The respondent submitted that the extension should not be granted because the reasons for delay are not compelling enough to warrant the extension. The respondent submits the Tribunal advised the appellants to retain legal representation, and that there are minimal prospects for success and no new evidence.
In this case, whilst the respondent has pointed to no prejudice caused by the delay and it may be accepted that the reasons proffered by the appellants for the delay may have contributed to some delay in filing the appeal, the delay itself is not insignificant and the Appeal Panel is not satisfied that, in the circumstances, the reasons sufficiently explain the length of the delay. A review of some of the decisions in this context indicates that the person seeking the extension must make out a case for the extension. See for example the matters of ZAU v Public Guardian [2016] NSWCATAP 53, Dusanovski v Xiao [2015] NSWCATAP 254, Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22, Hadid v Owners Corporation Strata Plan [2015] NSWCATAO 74, PTM Corporate Advisory v Temple [2015] NSWCATP 218.
Since prospects of success are relevant to determining an extension of time application, the Appeal Panel first considered the appellants' grounds of appeal, as if an extension of time were to be granted. However, for the reasons set out below, the Appeal Panel, ultimately, is not satisfied that the appellants have made out their grounds of appeal and therefore is not satisfied that strict compliance with the time limits would work a prejudice on the appellants. Accordingly, an extension of time to appeal is refused.

Questions of law

This is an internal appeal: s 32 of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"). Internal appeals are governed by the operation of section 80 of the NCAT Act, extracted below (notes omitted): 80 Making of internal appeals (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. (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. (3) 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.
A right to appeal only arises on a question of law, otherwise, there must be a grant of leave to appeal: s 80(2)(b) of the NCAT Act.
As noted in John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12], the task of the Appeal Panel when the parties are not represented is to determine whether the grounds of appeal, fairly read, raise a question of law, subject to any procedural fairness considerations that might arise to the respondent.
Possible questions of law include, whether there has been a failure to provide proper reasons, whether the Tribunal identified the wrong issue or asked itself the wrong question, whether a wrong principle of law was applied, whether there was a failure to afford procedural fairness, whether the Tribunal failed to take into account mandatory considerations, whether the Tribunal took into account irrelevant considerations, whether there was no evidence to support a particular finding of a fact, or whether the decision was so unreasonable that no reasonable decision-maker could make it: John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd at [13].
Whilst not expressly articulated in the grounds of appeal, the appellants' first two grounds, whilst ostensibly challenging findings of fact, raise the following questions of law: 1. With respect to the challenge to the finding that loss of income had not been demonstrated, the appellants contend that the Tribunal failed to take into account the provision in the Home Building Act (s 18B(1)(d)) that work be carried out in a reasonable time. This raises the question of law of whether the Tribunal failed to have regard to a relevant consideration (Grounds 1, 2 and 3): Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40. In the event that this question of law was answered in their favour, the appellants sought to supplement their evidence from the first instance hearing with evidence from a real estate agent, as to the estimated income that could be achieved from the granny flat. We discuss this aspect below. 2. With respect to the Tribunal's decision that the claim for damages for ongoing increased heating costs had not been established, the appellants contended that the Tribunal's finding was not open in circumstances where it was accepted by the Tribunal that insulation inferior to that specified in the contract was installed. Where the contention is that the finding was not open on the uncontested facts or the findings of the Tribunal, this raises a question of law: Australian Gas Light Co v Samuels (1993) 9 NSWCCR 616; per Hill J in Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 at 16. Another way of seeing this ground of appeal is that the decision of the Tribunal was unreasonable: Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18. 3. In addition to this, the appellants contended that the Tribunal failed to, in effect, take notice of a "known fact" that inferior insulation leads to increased heating and cooling costs. This too raises a question of law as to whether the Tribunal unreasonably required the appellants to prove a generally known fact: see, by analogy, section 144 of the Evidence Act 1995 (Cth) and Holland v Jones (1917) 23 CLR 149; [1917] HCA 26 at 153, per Isaacs J who said: 'The only guiding principle - apart from Statute - as to judicial notice which emerges from the various recorded cases, appears to be that wherever a fact is so generally known that every ordinary person may be reasonably presumed to be aware of it, the court "notices" it, either simpliciter if it is at once satisfied of the fact without more, or after such information or investigation as it considers reliable and necessary in order to eliminate any reasonable doubt.' 1. Further still, the appellants contend that their evidence going to the effect of inferior insulation was ignored by the Tribunal. A failure to consider a "substantial, clearly articulated argument relying upon established facts" may amount to a failure to accord procedural fairness: Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 73 ALD 321 at [24], cited in Whipps v Caravan & RV Central Pty Ltd [2017] NSWCATAP 163 at [27]. It might also amount to a constructive failure to exercise the jurisdiction: Dranichnikov at [25]; Ali v AAI Limited (2016) 75 MVR 502; [2016] NSWCA 110 at [66].
As the above grounds raise questions of law, (had an extension of time been granted) the appellants may have appealed as of right in relation to the first 2 grounds.
As explained in Prendergast (at [11]) once it is established that a question of law is raised, it is that question or those questions which are the subject of the appeal. Any other grounds must be the subject of a grant of leave, if they are to be considered by the Appeal Panel.
With respect to the contention that the damages awarded were insufficient, the appellants sought to rely on evidence that was not adduced at the first instance hearing. In effect, they sought merits review for this ground of appeal. This will be considered below under the heading "leave to appeal".

Loss of income

The appellants contend that the Tribunal failed to have regard to essential requirements of the Home Building Act, that the building be completed within a reasonable time. They also rely on other breaches of the Home Building Act to ground their claim that the respondent was unreasonably late in finishing the project, which led to their loss of income. Even assuming that these were mandatory considerations that the Tribunal failed to have regard to, the appellants will only succeed in disturbing the decision below in the event that they demonstrate two other things: that loss flowed from the breach and that that type of loss was in the contemplation of the parties: Hadley v Baxendale.
With respect to the quantum of loss, the appellants sought to supplement the evidence received by the Appeal Panel with the evidence from a real estate agent as to the rental value of the "granny flat". The evidence was a letter from Elders Real Estate dated 4 April 2017 stating that the author (a property manager) estimated that "the property" would achieve a rental value in the vicinity of $400 - $420 per week. The appellants submitted that, at the hearing, there was evidence of comparable rentals which the appellants had prepared from the internet and at the time it was not feasible to have persons coming into the property to value it, as it was a construction site.
The respondent objected to the Appeal Panel receiving such evidence on the basis that it was not "fresh" (i.e., it was not evidence that was not reasonably available at first instance). As mentioned, the appellants contended that the evidence was not available previously as the premises were under the control of the builder and it was not appropriate to have real estate agents coming to see the property at the time of the first instance hearing. The respondent submitted that the Appeal Panel should reject the appellants' suggestion that the evidence was not available due to the respondent's occupation of the premises, since the works have still not finished and yet the evidence has now been produced.
Further it was submitted for the respondent that the evidence was only sought to be tendered at the Appeal to counter the factual findings made by the Tribunal and to address some of the Tribunal's stated concerns with the evidence at first instance and that this supports a contention that the evidence was led to "fix" their case and not because it was not reasonably available. In the alternative, should the Tribunal accept the evidence, the respondent submitted that it ought to be given little weight.
The Appeal Panel is not satisfied that the evidence of estimation of rent was not reasonably available at the time of the hearing. The Appeal Panel is persuaded by the respondent's submission that the respondent still has not completed the works (a matter which the appellants did not cavil with) and so the site is still a construction site, yet this evidence has been produced. Accordingly, the Appeal Panel is not satisfied that the evidence was not reasonably available at the first instance hearing. In any event, the Appeal Panel is not satisfied that the additional evidence assists. Even assuming that the estimate provided is one in respect of the granny flat as opposed to the whole of the residence, no basis is set out for the property manager's estimate of rent and it is therefore difficult to assess the evidence and give it much weight. Further, perhaps most relevantly, the Tribunal held that the reason damages for loss of income was not made out was for the reason that the appellants had not established that the future rental of the property was in the contemplation of the parties to the contract; and so, was not a foreseeable loss. The appellants did not contend that the Tribunal erred in finding that it had not been expressly made known to the respondent that the granny flat was to be rented out. Accordingly, we do not see that this evidence would affect the outcome of the appeal.
Although the Appeal Panel is not satisfied that the evidence is "fresh", in a case where leave to appeal is not sought, the evidence need not necessarily be "fresh" in order for it to be admitted. With respect to s 80(2) of the NCAT Act, the Appeal Panel recently articulated the test for when it might be appropriate for an Appeal Panel to receive new evidence on an appeal (leaving aside for the moment the question of receiving new evidence for the purpose of granting leave to appeal).
Receiving new evidence on an appeal was discussed in Lettau v Artwork Transport Pty Ltd [2017] NSWCATAP 14 affirming Yuen v Thom [2016] NSWCATAP 243. Appeals on questions of law rarely warrant the receipt of new evidence: Yuen v Thom at [20] - [21]; Clements v Independent Indigenous Advisory Committee (2003) 131 FCR 28 at [13]. However, an exception may be made where the evidence is necessary to prove the circumstances to prove a breach of procedural fairness: Re Anasis; Ex parte Total Australia Ltd (1985) 11 FCR 127 at 129. Whether it is likely the new evidence would have produced a different result at the Tribunal is relevant: BCL v NSW Trustee and Guardian [2014] NSWCATAP 18 at [26]-[28]; Mielczarek v Commissioner of Fair Trading [2016] NSWCATAP 217. Any potential prejudice to the other party upon the receipt of the new evidence is also relevant: Lettau v Artwork Transport Pty Ltd at [25].
In the result, the Appeal Panel rejects the tender of the evidence from the real estate agent. First, the evidence falls well short of being a reasoned opinion as to the value of the rental premises that the Appeal Panel might rely on. No reasoning at all is disclosed for the opinion and other than the fact it is on a real estate agent's letterhead, no basis is provided to justify the Appeal Panel giving it any weight. Secondly, the Appeal Panel does not consider that the evidence will assist the appellants for the reason that we are not satisfied that, ultimately, the Tribunal erred in holding that the appellants were not entitled to recover for loss of rental. Irrespective of whether the quantum of the loss could be proved and irrespective of whether the Tribunal ought to have concluded that there was an implied time for completing the building work, the Appeal Panel is not satisfied that the appellants established that the loss of rental was in the contemplation of the parties.
The appellants did not establish, at first instance, that this type of loss was foreseen by the parties. In the words of Hadley v Baxendale, this damage was not "in the contemplation of both parties" (at 151). It cannot be assumed that the mere fact someone is building a granny flat is for the purposes of rental. The appeal grounds do not directly challenge the Tribunal's findings in this regard and the Appeal Panel sees no basis upon which to disturb that finding of the Tribunal. Consequently, even if the Tribunal erred in relation to the time for completion of the contract and even if the Appeal Panel accepted the new evidence of quantum of loss, this appeal ground must fail.

Ongoing heating costs

The appellants' contentions in this regard hinge on the fact that the Tribunal accepted that inferior insulation to that stipulated in the contract had been installed and therefore the Tribunal concluded that there had been a breach of contract. The appellants contend that in light of that conclusion, it was irrational or not open to the Tribunal to conclude that loss for ongoing heating and cooling costs had not been demonstrated.
In effect, the appellants' submission is that it inexorably follows that inferior insulation leads to ongoing heating and cooling costs. Accordingly, the Tribunal ought to have, doing the best it could, quantified the damages based on the "known fact" of this phenomenon, or the appellants' technical evidence of this.
The difficultly with the appellants' contention is that the Tribunal did not reject the proposition that there would be additional heating and cooling costs and did not ignore the appellants' evidence of the quantum. At the first instance hearing, the appellants lead evidence of their calculations of their increased electricity expenses, over the course of a 50-year period due to the installation of lower R-rating insulation, based on technical specifications obtained from a variety of websites including Wikipedia and online brochures from YourHome (an Australian Government guide to sustainable building), the insulate manufacturer, and ICANZ (the Insulation Council of Australia and New Zealand). The Tribunal declined to accept that the evidence was sufficiently precise in order to determine damages by that method (at [76]).
The Tribunal accepted that it was required to work out the damages for the breach of contract, being the installation of the wrong insulation. However, the Tribunal concluded that there was "insufficient" evidence (at [75]) as to the quantum, to determine the loss by way of calculating the additional heating and cooling costs. The Tribunal did not suggest that there was no evidence upon which to calculate the loss, but only that the evidence it did have was insufficient.
Accordingly, the Tribunal turned to a different methodology by which to calculate the loss associated with the breach of contract being the installation of the wrong insulation. The Tribunal turned to assessing damage by way of estimation of the difference in costs between R2 and R3 batts. Accordingly, it is not correct to say that the Tribunal found on the one hand that there was a breach of contract and on the other hand that there was no loss. The Tribunal accepted that there was loss but determined that loss by a method that did not involve estimating ongoing future heating and cooling costs.
A review of the authorities on the method by which costs may be calculated, when there is difficultly in determining the loss, indicates that the Tribunal did not fall into error in the way it went about calculating the damages for the breach of contract it had identified.
Where the precise quantum of damage is not known, mere difficulty in estimating damages does not relieve a court (or the Tribunal) from the responsibility of estimating them as best it can (Fink v Fink (1946) 74 CLR 127, 143 (Dixon and McTiernan JJ); [1946] HCA 54). It has been acknowledged that assessing damages in this manner may involve more guesswork than actual estimation (Jones v Schiffmann (1971) 124 CLR 303, 308 (Menzies J); [1971] HCA 52). However, such guesswork or estimation should only be exercised where precise evidence is not available (Biggin and Co Ltd v Permanite Ltd [1950] 2 All ER 859 at 870 per Devlin J).
Acknowledging that a court (or the Tribunal) can estimate damages, for a plaintiff to receive more than nominal damages they must demonstrate, on the balance of probabilities, "assessable damage" that is capable of being assessed in monetary terms (The Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64, 118 (Deane J); [1991] HCA 54). Consequently, if a plaintiff proves that damage has occurred but has led evidence that is not sufficient for a court (or the tribunal) to use as a basis for the estimation of damages, then that plaintiff cannot be awarded substantial damages (JLW (Vic) Pty Ltd v Tsiloglau and Anor [1994] (Vic) Rp 16 per Brooking J at [9]).
The general rule then is as follows: where the Tribunal has concluded that more than nominal damages is appropriate and where the Tribunal does not have sufficient evidence before it to determine the exact quantum of damages, it must, on the basis of the evidence that is available, come to an estimation, as to the likely quantum of damage. Here the Tribunal did this by way of consideration of the cost differential between the different batts. No error has been demonstrated.
Accordingly, this ground of appeal fails.

Leave to appeal

We turn now to consider the appellants' ground of appeal that the Tribunal erred in calculating the loss by way of estimating the difference between R2 and R3 batts. As noted above, this ground requires leave.
In this instance, despite the appellants having ticked the box in the Notice of Appeal, that stated they were not seeking leave to appeal, it was apparent at the hearing, that their application, in fact, sought leave to appeal if necessary. In order to ground the leave application, the appellants sought to rely on evidence that was not adduced at the first instance hearing.
As this matter involves an appeal from the Consumer and Commercial Division of the Tribunal, Schedule 4 Part 6 cl 12 of the NCAT Act applies. That provision relevantly provides: 12 Limitation of internal appeals against Division decisions 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 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.
"Clause 12 does not require that the Appeal Panel must be satisfied that the appellant has actually suffered a substantial miscarriage of justice. All that is required is that the appellant 'may' have suffered such a miscarriage": Collins v Urban [2014] NSWCATAP 17 at [68]. "[T]he 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": Collins v Urban at [71].
Relevantly, as the appellants sought to rely on new evidence, "…there will be a substantial miscarriage of justice where the fresh evidence was such that there was a 'significant possibility' that a different, more favourable result would have been achieved if the evidence had been before the Court": Collins v Urban at [74], affirming Gibbs CJ in Gallagher v R (1986) 160 CLR 392, 399; [1986] HCA 26.
As noted in White v Alto Artarmon Pty Ltd [2017] NSWCATAP 164, per L Pearson & J Kearney at [44] "Clause 12(1)(c) requires that the new evidence is significant, and that it was not reasonably available at the time the proceedings … were being heard. That is an objective test, and requires that the evidence be unavailable because no person could reasonably have obtained it; a party's incapacity to procure that evidence is not sufficient" (citing Al-Daouk v Mr Pine Ltd t/as Furnco Bankstown [2015] NSWCATAP 111; Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11). Further, as noted in Al-Daouk v Mr Pine Ltd t/as Furnco Bankstown: "the test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence" (at [23]) and "…something more than a party's incapacity to procure evidence is necessary to satisfy the requirements of cl 12(1)(c)" (at [24]).
The appellants sought to rely on two additional pieces of evidence.
The first piece of evidence is the letter dated 4 April 2017 written by a property manager from Elders Real Estate Bankstown, referred to above, estimating the possible rental rate of the granny flat at $400-$420 per week.
With respect to the letter from the Real Estate Agent, the respondent reiterated the objections to receiving the additional evidence on the same grounds as discussed above, and, in effect, the appellants reiterated their bases for why the Appeal Panel should accept this evidence.
The Appeal Panel is not satisfied that the evidence from the Real Estate Agent is "new" and that piece of evidence is rejected and accordingly does not ground the grant of leave to appeal.
The second piece of evidence is a quote from All Sydney Constructions Pty Ltd for rectification of defects dated 2 May 2017. The total cost of rectification is calculated to be $57,178. Part of this quote is $25,810 (plus GST), which is purely for the rectification of the insulation work.
In effect, similar arguments are raised by the parties in respect to this piece of evidence as for the first piece of additional evidence. The Appeal Panel is not satisfied that this evidence is "new" and so does not ground the grant of leave.
Turning to other potential bases for the grant of leave, authorised by cl 12, the Appeal Panel is not satisfied that the appellants have demonstrated that they may have suffered a substantial miscarriage of justice as a result of the manner by which the Tribunal conduced the matter or the manner by which the Tribunal dealt with the evidence.
Accordingly, leave to appeal on this ground is refused.

Costs

The respondent did not, in terms, make a claim for a costs order in its Reply, its written submissions or oral submissions at the hearing of this appeal. However, in sections 4 and 5 of its Reply and paragraph 14 of its written submissions it asserted that the appellants have pursued their claims whilst self-represented throughout the entire proceedings (despite repeated advice of the Tribunal to retain legal representation); that this has caused the respondent to incur unnecessary costs and the respondent is suffering prejudice (particularly in relation to its legal costs) by reason of these facts.
These assertions now need to be viewed in light of the complete success of the respondent in relation to the appeal.
In these circumstances and in light of the possibility that the respondent intended to preserve its right to seek a costs order, it is appropriate and fair to allow the respondent some time to lodge any formal costs application. In our view that is a course which is consistent with the guiding principle set out in section 36 of the Civil and Administrative Tribunal Act and one which is fair and reasonable in all the circumstances.
It is also appropriate that we give directions as to the filing of submissions on costs, in the event that any such costs application is made.

Orders 1. Extension of time to appeal refused. 2. Leave to appeal refused. 3. The Appeal is otherwise dismissed. 4. Within 28 days of the publication of these Orders, the respondent is to give to the Tribunal and the appellants any application it makes for costs of the appeal and any written submissions in support of that application including as to whether an oral hearing is necessary. 5. If the respondent makes a costs application in accordance with Order (4), then within 21 days of service upon them of that application and any submissions by the respondent, the appellants are to give the Tribunal and the respondent any reply to the application and any written submissions including as to whether an oral hearing is necessary. 6. Within 21 days of its receipt of any reply or submissions by the appellants, the respondent is to give the Tribunal and the appellants any written submissions in response.

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: 28 November 2017

Civil and Administrative Tribunal Rules 2013(NSW)

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