BuildPlatinum Pty Limited v Micaleff

APPEAL MATERIALS AND GROUNDS OF APPEAL

1. The builder lodged the appeal within the time period set out in Reg 25 (4) of the Civil and Administrative Tribunal Rules 2014 (NSW).
2. Prior to the hearing of the appeal, the Appeal Panel granted a stay of the decision of the Tribunal (and a subsequent costs decision) subject to the builder depositing $20,000 to be held on trust in its Solicitors account.
3. The parties relied on an Amended Joint Tender Bundle at the appeal hearing. Relevantly, the tender bundle included the documentary evidence before the Tribunal; the email of the builder to the Tribunal dated 1 April 2020; and a written transcript extract of the evidence of Mr Zakos (and his questioning by Mr Bray) regarding the issue of the roof sheeting.
4. The parties also filed and served written submissions and submissions in reply.
5. The builder's grounds of appeal were set out in detail in written submissions dated 10 November 2020. The grounds were identified as: 1. Misconstruing relevant provisions of the Building Code of Australia ('BCA') and as a consequence, erroneously finding the builder had breached s 18B of the HB Act. 2. Failing to determine "for itself" the "critical matter" of the meaning of "breaking surf" in the BCA. 3. Not admitting into evidence an email of the homeowners' architect dated 3 February 2016 and a "screen shot" from the Bluescope Steel website. 4. Misconstruing the provisions of s 18F of the HB Act in dismissing the builder's contention that it had a relevant defence.

SCOPE AND NATURE OF APPEALS

1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80 (2) NCAT Act.
2. Internal appeals involve consideration of whether there has been any error of law; or any error other than an error of law sufficient to grant leave to appeal under Sch 4 Cl 12 of the NCAT Act.
3. An appeal is not simply an opportunity for a dissatisfied or aggrieved party to re-argue the case they put at first instance: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].
4. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons. 2. Whether the Tribunal identified the wrong issue or asked the wrong question. 3. Whether a wrong principle of law had been applied. 4. Whether there was a failure to afford procedural fairness. 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations. 6. Whether the Tribunal took into account an irrelevant consideration. 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
5. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act'). In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. The decision of the Tribunal under appeal was not fair and equitable; or 2. The decision of the Tribunal under appeal was against the weight of evidence; or 3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
6. In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
7. Even if an appellant from a decision of the Consumer and Commercial Division requiring leave to appeal has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
8. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

CONSIDERATION

1. We are satisfied that the grounds of appeal relied on by the builder identify purported errors of law. To the extent that the grounds additionally raise errors which are not errors of law, we will deal with the issue of leave to appeal in the reasons below.

Ground 1- Misconstruing the BCA and the Finding of Breach of Statutory Warranty

The Roofing Specifications Contained In The Contract

1. The written contract(s) were attached to an affidavit of Ms Micallef dated 8 August 2019 and formed part of the evidence before the Tribunal.
2. The building plans specified the roof sheeting as "Trimdeck roof sheeting over R 1.5 anti-con blanket".
3. The specifications prepared by the designer and incorporated into the contract identified the roofing material as follows: "1.2 MATERIALS Sheet metal roofing Standard: to AS 1562 1 Corrosion protection: To BCA Table 3.5.1.1 a"

The Evidence of Mr Zakos

1. At para [50] of the decision, the Tribunal noted that the builder submitted that Mr Zakos was "not sufficiently qualified" to express the opinions set out in his two reports. The Tribunal found that Mr Zakos had the "relevant expertise" to provide the opinions expressed; and that Mr Zakos complied with the NCAT Expert Witness Code of Conduct.
2. In his first report (dated 17 October 2019) one of the defects identified by Mr Zakos was that the roof to the premises did not have adequate sealing; and that capping and flashings had gaps that allowed water ingress. Mr Zakos stated that this was inconsistent with the requirements of the Building Code of Australia ('the BCA) (relevantly Part 2.2.2; Part 3; and Section 3.5); and the NSW Fair Trading Guide to Standards and Tolerances.
3. Mr Zakos identified the appropriate scope of works to rectify this defect involved work to seal the gaps at a cost of $6,950 (plus preliminaries; contingencies; builder's margin; and GST).
4. In his second report of 28 February 2020 Mr Zakos stated that he had returned to the premises to "identify/verify the sources (of) water entry to the house". Mr Zakos conducted water testing of the roof, and set out his findings after conducting such testing.
5. Mr Zakos at pp 23-27 of his report discussed the "roof sheeting to the building".
6. He stated at p 23 (paras 9.2-9.4) that the residential premises: "… is located within 100m of a breaking surf beach. The diagram below confirms this".
7. The report then set out a Google Earth Pro photograph/screen shot of the premises located in the context of Jervis Bay with a "ruler" measurement. Mr Zakos stated: "It can be seen from figure 9.1 that the linear distance from where the house would be is approximately 45m".
8. A table included in the Google Earth Pro photograph/screen shot stated the following: "Map length: 87.5 metres"
9. At pp 23-25 of his report, Mr Zakos discussed the manufacturer's recommendations for roof sheeting. He included in his report extracts from a Bluescope Steel publication for "Choosing The Right Grade Of Colourbond Steel".
10. That publication stated that stainless steel roof sheeting: "…is the recommended roofing material for coastal areas where there is a constant salty smell and salt spray in the air-within 100 meters from breaking surf…
11. According to that publication, galvanised steel sheeting: "…is the recommended roofing material for environments where there may still be a smell of salt or spray in the air-approximately 100m to 200m from breaking surf".
12. Mr Zakos additionally included a Bluescope Steel "Product Selection Guide (indicative only) which identified "Colourbond stainless steel as suitable for buildings within 100m of "surf" conditions; and Colourbond ultra steel as suitable for buildings within 100m of "calm" conditions.
13. In the document "surf" is identified as "areas exposed to breaking surf and ocean spray" and "calm" is identified as "protected areas of salt or brackish water, including harbours, ports, bays and river estuaries".
14. The manufacturer's publication referred to by Mr Zakos does not contain any definition of "breaking surf", but as referred to previously the publication refers to stainless steel as being recommended where "there is a constant salty smell and salt spray in the air".
15. Mr Zakos stated that the galvanised steel sheeting was not a product recommended by the manufacturer for use "within a marine environment within 100m of surf marine conditions". Mr Zakos stated: "…the appropriate roof sheeting, as recommended by the manufacturer, is COLORBOND stainless steel. This product has not been installed and a product that is not suitable for the location of the house has been installed".
16. At p 26 of his second report, Mr Zakos discusses the provisions of the National Construction Code of Australia, and stated as follows: "I also note that there is no reference to metal roof sheeting on the roof for a Class 1 building in the National Construction Code of Australia. Table 3.5.1 (a) suggests that for buildings typically within 100m of breaking surf which is defined as (see Part 1.1.1 of the NCC): Breaking surf means any area of salt water in which waves break on an average of at least 4 days per week but does not include white caps or choppy water. Explanatory information Breaking surf normally occurs in areas exposed to the open sea. Breaking surf does not normally occur in sheltered areas, such as that which occurs around Port Phillip Bay, Sydney Harbour, Swan River, Derwent River and similar locations". there is no suitable metal material in aluminium, zinc or the like. It is obvious that the material selection is critical when building adjacent to saltwater and in this instance within 100 m of breaking surf. In this instance the builder has selected and used an inappropriate product".
17. At the hearing, the following relevant evidence was given by Mr Zakos: Bray: I was just wondering how you came to the conclusion that Ultra steel was not used. Zakos: No, I didn't say Ultra steel. I think I said it should be stainless steel. … You'll see there at item 9.13 the Building Code of Australia requires that any property that is within 100m-sorry, I'll go back a step. At 3.5.13 of the Building Code of Australia it describes metal roof sheeting and what types of metal roof sheeting are applicable for the environment that it's going to be used in. When you get to-when you get to the very high which is this situation which is typically within 100 m of breaking surf no-no traditional Zincalume sheeting, zinc coated sheeting, galvanised sheeting is appropriate. The Building Code of Australia says it is just not suitable. Bray: Yes Zakos: So no traditional coating is suitable. What you've used-sorry I do apologise. What is installed is Ultra steel. Ultra steel is not suitable for houses and roof sheeting within 100 m of breaking surf and that's actually as per Bluescope Steel Technical Bulletin 1 a and the extract I've used out of Bluescope. They actually don't recommend it. What they recommend is that we should use Colorbond Stainless steel and that his shown at page 847 of the table that I've included in my report at the top. You've said you've used Ultra steel. Bray: Yes, correct. Zakos: Ultra steel according to the Lysaght recommendation product selection guide, which aligns with the Building Code of Australia, says on the very top line, for 0 to 100 metres in surf conditions, which is what this is in my opinion, you should use Colourbond Stainless steel. You'll notice that Colorbond Ultra steel, which is what you have used, is available and appropriate for anything within 0 to 100 meters in calm water and by calm water I take that to mean harbours, lakes, inlets, something like that. Now, on p 845 (sic) of my report you'll see an extract I've got out of Google Earth Pro and you'll see the distance from the breaking surf, and you can see white foam there, the distance is actually 87.75 meters which is closer than a hundred meters so that's why in my opinion the correct roof sheeting to have used would have been the stainless steel product issued by Lysaght. Bray: I totally agree with everything you've said despite the fact that the property is 120 meters from breaking surf. Ultra steel is not a standard product. It is the next tier up and we've provided full home warranties through our handover kit for that. Zakos: Mr Bray, I don't-all I'm just making is an observation. I went to the site. It's near the surf. I've been involved in hundreds of matters like this and one of the issues is less than 100 meters you have to use the-the stainless steel product issued by Lysaght and that's what the BCA aligns up as well. Mind you, if it was more than 100m you could probably go to Ultra steel. You could go to Ultra steel but as this Google Earth map shows, this diagram, the 87 metres is actually taken well into the surf, al litter further into the surf and certainly where the house is located. The way you actually operate the distance from the surf to the house is actually the average mean, the average mean water tide between high tide and low tide, so the average tide and this line, this yellow line in my diagram goes well into the surf, well past this, so technically it might be even said that it is closer than 87 meters to the breaking surf but be that as it may, that is the opinion I've expressed and that's how I've based it. Bray: No worries, Mr Zakos.

Breach of Statutory Warranty-Applicable Principles

1. Section 18B of the HB Act states as follows: 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. In Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd [2017] NSWCATAP 185 the Appeal Panel stated at [46]: Although objective standards such as Australian Standards, the Building Code of Australia and the Guide are of significant relevance in establishing whether work has been performed in a proper and workmanlike manner (Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61 at [10]), the absence of such evidence does not automatically mean a homeowner has failed to establish breach of statutory warranty. In our view, the relevant principle was succinctly stated by Senior Member Goldstein in G MacFayden and Anor v G Tadrosse [2014] NSWCATCD 194 at [46] as follows: …[E]vidence that work does not comply with the Building Code of Australia would establish a basis for a finding that sub section 18B(c) of the Act has been breached. Evidence of the details in which work does not comply with the contractual plans and specifications would form the basis for a finding that sub section 18B(a) of the Act has been breached. Evidence of work not being carried out in a proper and workmanlike manner would in my view involve identification of the work in question, a statement of how the expert would expect it to be carried out in in a proper and workmanlike manner and then identification of the factors which establish that the way in which the work has been carried out falls short of it being carried out in a proper and workmanlike manner. Evidence of this nature, if accepted, would form the basis for a finding that sub section 18B(a) of the Act has been breached.

Builder's Submissions

1. The builder submits that: 1. Mr Zakos opinion on the location of the residential premises and its proximity to "breaking surf" within the meaning of the BCA was inadmissible or should have been given no weight because it was not within his field of expertise. 2. The manufacturer's product guide referred to by Mr Zakos was "nothing more than a guide" and the opinion of Mr Zakos in referring to that publication was "not an expert opinion". 3. The Tribunal should have "determined for itself" where the premises was located and whether it was located in proximity to "breaking surf" under the BCA rather than merely accepting the opinion of Mr Zakos. Failing to make such a finding constituted failure to "grapple" with the evidence. The Tribunal also failed to "grapple" with the "explanatory information" in the BCA definition of "breaking surf". 4. The Tribunal "misconstrued" whether the roof sheeting used complied with the BCA because there was "no evidence" to establish a finding that waves break on an average of at least 4 days per week; whether the body of water included or excluded white caps or choppy water; or whether the house was exposed to open sea or a sheltered area.

Homeowners Submissions

1. The homeowners submit: 1. "Breaking surf" in the BCA does not have a special meaning, it is a term of common English usage. Its interpretation does not involve a question of law but findings of fact. 2. Mr Zakos, as an experienced and suitably qualified building consultant, was able to express an opinion as to the location of the premises and whether it was located within 100 m of breaking surf. He was also suitably qualified and experienced to express an opinion on the type of roof sheeting that the builder should have used in construction of the dwelling, and whether or not such materials were in accordance with manufacturer's recommendations and the BCA.

Consideration

1. When expressing an opinion on whether or not the builder had breached the statutory warranties in s 18B of the HB Act, Mr Zakos was referring to two separate issues.
2. The first was whether the builder had used roof sheeting materials consistent with manufacturer's recommendations and the specifications in the contract. Failure to comply with manufacturers recommendations; and failure to comply with the specifications under the contract is evidence of breaches of ss 18B(1) (a) and 18B (1) (b) of the HB Act.
3. The second was whether the roofing materials used complied with the BCA. Failure to comply with the BCA is evidence of breach of s 18B (1) (c) of the HB Act.
4. It is not in dispute that under Table 3.5.1.1 of the BCA definitions an environment has a "very high" corrosion rate if it: "Typically extends from 100 m inland from "breaking surf" to 200 m inland from "breaking surf", or within 200 m of aggressive industrial areas; or Typically extends within 100 m of "breaking surf".
5. In respect of the operation of rules of evidence in the Tribunal, the Appeal Panel stated in Deacon at [36]-[37]: The builder submits that although rules of evidence do not apply in the Tribunal (s 38(2) of the NCAT Act), rules of evidence provide a guide to assessment of the probative value of evidence, within the context of the duty to provide procedural fairness to the parties: Chi Building Pty Ltd v Wedgwood [2016] NSWCATAP 64 at [40]-[41]; Head Mod Nominees Pty Ltd v Macken [2016] NSWCATAP 106 at [69]. It is clear that the rules of evidence are relevant to the operation of procedural fairness. In a home building dispute where both parties are represented and the amount in dispute is significant, a relatively strict consideration of rules of evidence may at times be appropriate to ensure procedural fairness, in comparison to a dispute involving a small amount of money and in which the parties are not legally represented.
6. In the often cited judgement of Heydon JA in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at [85], the principles applicable to expert evidence were summarised as follows: "In short, if evidence is tendered as expert opinion evidence is to be admissible, -It must be agreed or demonstrated that there is a field of 'specialised knowledge'; -There must be an identified aspect of that filed in which the witness demonstrates that by reason of specified training, study, or experience, the witness has become an expert; -The opinion proffered must be 'wholly or substantially based on the witnesses' expert knowledge'; -So far as the opinion is based on facts 'observed' by the expert, they must be identified and admissibly proved by the expert; -And so far as the opinion is based on 'assumed' or 'accepted' facts, they must be identified and proved in some other way; -It must be established that the facts on which the opinion is based form a proper foundation for it; -And the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert's evidence must explain how the field of 'specialised knowledge in which the witness is expert by reason of 'training, study or experience' and on which the opinion is 'wholly or substantially based', applies to the facts assumed or observed so as to produce the opinion propounded. If all of these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is, strictly speaking not admissible, and, so far as it is admissible, of diminished weight. An attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ's characterisation of the evidence in HG v The Queen [(1999) 197 CLR 414] (at 428 [41]), on a "combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise".
7. However, although the principles expressed in Makita are important, they have been distinguished and refined in subsequent decisions. Often, the applicable principles go to the weight to be given to the expert evidence, not whether or not the evidence is admissible.
8. In Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11, Beazley JA (with whom Giles JA and Tobias JA agreed) stated at [68]-[78]: Heydon JA referred to the requirements for expert evidence to be admissible in less extensive terms, which are nonetheless relevant to this case, in Rhoden v Wingate [2002] NSWCA 165, at [61], as requiring that the expert gives evidence of what the expert personally observed, what the expert assumed, but did not personally observe, and, in the light of that material and the witness' expertise, what the witness' opinions were. This observation reflects the practical application of the principles governing expert evidence in circumstances where, for example, the witness' expertise is not in issue or where there is no issue that the opinion given is in an area of accepted expertise. Similar practical approaches to the admissibility of expert evidence are to be found in the authorities. Thus, in Paino v Paino [2008] NSWCA 276; (2008) 40 Fam LR 96, Hodgson and McColl JJA noted, at [66], that it is inherent in the process of preparing many expert reports that the factual basis for the opinion expressed is derived from third party information. Their Honours pointed out that what the courts require is that the factual bases of opinions be clearly laid out so that the opinion of the expert may be properly tested. See also Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Limited [2002] FCAFC 157; (2002) 55 IPR 354; Adler & Anor v ASIC [2003] NSWCA 131; (2003) 46 ACSR 504. In ASIC v Rich & Ors [2005] NSWCA 152; (2005) 218 ALR 764, an issue arose as to the basis upon which an expert could express an opinion. In that case, the respondent had submitted that the principles stated in Makita required that, for expert evidence to be admissible, it must be based on facts set out in the report and on no other facts, and that the opinion expressed be arrived at by the process of reasoning set out in the report and by no other process of reasoning. The alternative approach, advanced by the appellant, was that it was sufficient if the expert identified the facts and reasoning process which the expert asserted to be an adequate basis for the opinion expressed in the report. The resolution of this issue involved Spigelman CJ (with whom Giles and Ipp JJA agreed) undertaking a detailed analysis of the underlying basis of Heydon JA's reasoning in Makita , by reference, in particular, to the reasoning of Gleeson CJ in HG v R [1999] HCA 2; (1999) 197 CLR 414 to which Heydon JA had made extensive reference. At [99], Spigelman CJ observed that the observations of Gleeson CJ did not represent the ratio of HG in a manner that was binding on the Court of Appeal. Nonetheless, his Honour proceeded on the basis that the reasoning of Gleeson CJ was correct and expressed his agreement with that reasoning in any event. The analysis is lengthy. It is sufficient for the purposes of my reasons to refer only to the limited passages set out below. At [39], Gleeson CJ accepted that an expert's report may be based on assumed facts. His Honour said: "An expert whose opinion is sought to be tendered should differentiate between the assumed facts upon which the opinion is based, and the opinion in question. Argument in this Court proceeded upon the basis that it was possible to identify from Mr McCombie's written report some facts which he either observed or accepted, and which could be distinguished from his expressions of expert opinion. Even so, the provisions of s 79 will often have the practical effect of emphasising the need for attention to requirements of form. By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question." (footnotes omitted) Of particular importance to the present case is the acceptance by Spigelman CJ of the following statement of Gleeson CJ in HG as to what is required for expert evidence to be admissible. Gleeson CJ stated, at [41], that such expert evidence: "...required identification of the facts [the expert] was assuming to be true , so that they could be measured against the evidence; and ... demonstration or examination of the scientific basis of the conclusion." (Spigelman CJ's emphasis) This is a principle of long standing. It was referred to by the High Court in Paric v John Holland (Constructions) Pty Ltd [1985] HCA 58; (1985) 62 ALR 85, at [9], where the Court (Mason CJ, Wilson, Brennan, Deane and Dawson JJ) said: "It is trite law that for an expert medical opinion to be of any value the facts upon which it is based must be proved by admissible evidence: Ramsay v Watson [1961] HCA 65; (1961) 108 CLR 642. But that does not mean that the facts so proved must correspond with complete precision to the proposition on which the opinion is based. The passages from Wigmore on Evidence ... to the effect that it is a question of fact whether the case supposed is sufficiently like the one under consideration to render the opinion of the expert of any value are in accordance with both principle and common sense." (emphasis added) Gleeson CJ referred to Ramsay v Watson in his reasons in HG , and in Makita Heydon JA also expressly adopted the reasoning in Ramsay v Watson . As Heydon JA said, at [66], that case was a classic illustration of the principle that the " assumed facts " need not be itemised by the expert witness in an artificial way. His Honour referred to the High Court's observation in Ramsay v Watson that: "... it was permissible for a doctor to narrate the history obtained from a patient as part of the foundation of the doctor's opinion on the patient's health, even though the narration was not admissible to prove the facts of the history unless some exception to the hearsay rule were satisfied." Notwithstanding that an expert may give an opinion on assumed facts, the High Court in Ramsay v Watson observed, at 649, that if the history obtained by the doctor and upon which the doctor based her or his expert opinion is not supported by admissible evidence, the opinion " may have little or no value, for part of the basis of it is gone ". Spigelman CJ's analysis in ASIC v Rich of Heydon JA's reasoning in Makita concluded that it conforms with the statement of Gleeson CJ in HG , at [39], set out at [72] above. As Spigelman CJ stated, at [105]: "Although expressed in terms of 'usefulness', the starting point for Heydon JA's detailed analysis of the case law on admissibility does not suggest any focus on the true historical process by which the expert first formed the relevant opinion. The focus of attention - the 'prime duty' - is to ensure that the court, as the tribunal of fact, is placed in a position where it can examine and assess the evidence presented to it. That can occur without adopting the true factual basis approach . What Heydon JA identified as the expert's 'prime duty' is fully satisfied if the expert identifies the facts and reasoning process which he or she asserts justify the opinion. That is sufficient to enable the tribunal of fact to evaluate the opinions expressed ." (emphasis added) I accept this analysis, which I consider to be clearly correct.
9. Further, in the context of s 79 of the Evidence Act 1995 (NSW)), expert opinion evidence is not excluded solely because the factual basis upon which the opinion is proffered is not established by other evidence (Fuller v Avichem Pty Ltd t/as Adkins Building & Hardware [2019] NSWCA 305 at [80], citing Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588).
10. In this matter, Mr Zakos was a suitably qualified and experienced building consultant. He had "specialist knowledge" and "specialist training, knowledge or experience" in the construction of residential dwellings.
11. The builder submits that Mr Zakos was not suitably qualified and experienced to express an opinion about "coastal regions, geography; and calm waters versus surf conditions". We do not accept that submission.
12. Mr Zakos was giving opinion evidence about whether the roofing materials used were defective, in the context of the requirements of s 18B of the HB Act. Relevantly, that involved evidence dealing with whether the building had been constructed in accordance with the specifications under the contract; whether it had been constructed with due care and skill; whether the materials used were reasonably fit for purpose; and whether the materials used complied with the BCA.
13. In that context, Mr Zakos was giving evidence in respect of what a builder constructing a house at Vincentia in proximity to Jervis Bay should have used as appropriate roof sheeting. He did not require qualifications in geography or oceanography to express such an opinion, nor is the evidentiary weight to be given to his opinion to be reduced because he did not have such qualifications.
14. In respect of the provisions of the BCA, Mr Zakos gave evidence clearly setting out how he came to the opinion the house was within 100 m of "breaking surf" as defined in the BCA and within 100 m of "surf" conditions in the context of the manufacturer's recommended roof sheeting product.
15. The builder submits that Mr Zakos did not give evidence that Jervis Bay had waves that broke "on an average of 4 days per week" rather than was a body of water such as a lake, harbour, river, or bay.
16. We accept that Mr Zakos did not state in his evidence that the waves at Vincentia proximate to the location of the house broke "on an average of 4 days per week". However, he did clearly state that the Google Earth photo of the property showed waves breaking and he had been to the site and there was "breaking surf". The oral evidence of Mr Zakos at pp 57-58 of the transcript contains several references by Mr Zakos to "breaking surf".
17. To assert that Mr Zakos did not give evidence about the distance of the property from "breaking surf" in the context of the BCA is an artificial interpretation of the substance of his evidence.
18. Further, the definition of "breaking surf" in the BCA refers to waves breaking as distinct from mere white caps or choppy water. The definition does not state how high the waves must be. The definition refers to breaking surf "normally" being areas exposed to the open sea and "not normally" occurring in "sheltered areas" as bays, harbours and rivers. However, the definition in the BCA does not state that breaking surf must exclusively be areas exposed to the open sea.
19. Additionally, the "Choosing the Right Grade of Colourbond Steel" document referred to by Mr Zakos refers to stainless steel sheeting being the recommended roofing material for "coastal areas where there is a constant salty smell and salt spray in the air-approximately 100 m from breaking surf".
20. Mr Zakos was suitably qualified and experienced to give evidence that the house had been constructed within 100 m of breaking surf and set out in his evidence how he formed that opinion. As discussed previously, he stated he had been to the premises, and it was, in his opinion, within 100 m of "breaking surf" conditions.
21. Accordingly, there was evidence before the Tribunal to establish the factual basis for Mr Zakos' opinion that: 1. The house had been constructed within 100 m of "breaking surf". 2. The BCA provisions for a house located within 100 m of "breaking surf" required stainless steel roof sheeting; and 3. The manufacturer's recommendations for roof sheeting in an area within 100m of "surf conditions" was that stainless steel sheeting be used.
22. Further, we note that at the hearing in the relevant part of the transcript provided, Mr Bray never put to Mr Zakos in cross examination that the conditions at the Vincentia area of Jervis Bay in proximity to the house did not involve "breaking surf" (within the meaning in the BCA) or "surf conditions" (within the meaning of the manufacturer's recommendations). The only factual issue Mr Bray appeared to disagree with was whether the house was located within 100m of the shore, not the wave conditions occurring at the shore.
23. The builder, in support of its submission that the Tribunal should have determined "for itself" whether waves breaking at the shoreline at Vincentia was "breaking surf" rather than merely choppy water or still water conditions referred to a Western Australian State Administrative Tribunal ('WAST') decision in Payne v Allegretta [2010] WAST 36 ('Payne'). In that decision, on its particular facts, the Tribunal held that Safety Bay in Western Australia was not an environment exposed to "breaking surf" under the BCA.
24. However, this decision was not provided to the Tribunal by the builder at first instance, and no submissions were made upon it at the hearing. It is a decision of the Western Australian State Administrative Tribunal that was an "on the papers" review of a decision of the Western Australia Building Disputes Tribunal, and is not a binding precedent NCAT must follow.
25. Further, the decision in Payne depends on its own facts, and the WAST referred in the decision to the fact that Bluescope Steel had referred in a technical bulletin specifically to Safety Bay as an "exposed marine" environment (i.e. not typically prone to breaking surf) rather than a "surf marine" environment (i.e. exposed to breaking surf and ocean spray).
26. We are not satisfied any error of law has been established in respect of Ground 1 of the appeal.

Ground 2-Failure of the Tribunal to Determine Critical Matters for Itself

1. Ground 2 of the appeal is, in substance, a repetition of aspects of Ground 1 of the appeal.
2. The builder submits that there was "no evidence" from Mr Zakos upon which the Tribunal could have made the factual findings to support a conclusion that the builder had breached the statutory warranties in s 18B of the HB Act in respect of the roof sheeting used.
3. We have previously set out why we are satisfied that Mr Zakos was appropriately qualified and experienced to express an opinion on whether the roof sheeting was compliant with the BCA and whether the roof sheeting was in accordance with the manufacturer's specifications. The "no evidence" ground fails.
4. The builder submits that the Tribunal was not bound to accept the evidence of Mr Zakos, and that the Tribunal failed to "grapple" with the issue of whether the BCA had been breached.
5. There is nothing in the decision of the Tribunal or the transcript of evidence to indicate that the Member failed to apply the principle that the homeowner bore the onus of establishing tha the work was defective and the method of rectification (Catapult Constructions Pty Ltd v Denison [2018] NSWCATAP 158 at [59]).
6. We are satisfied that the evidence of Mr Zakos was sufficient to prove, on the balance of probabilities, the factual matters necessary to make the findings that the builder had breached the statutory warranties in s 18B of the HB Act.
7. The builder failed to provide any independent expert witness evidence to challenge the opinions of Mr Zakos. The mere fact that a party does not adduce independent expert evidence does not mean that the Tribunal must accept the expert evidence of the other party if that expert evidence is insufficient to establish the factual basis for breach of s 18B of the HB Act (or any other relevant matter). However, for the reasons expressed earlier, we are satisfied the evidence of Mr Zakos was sufficient, and there was no error of law in the Tribunal accepting it.
8. This is not a situation where the Member merely set out evidence and failed to explain why that evidence was accepted and why the evidence established breach of s 18B of the HB Act (there being no challenge on appeal to the findings of the Member in respect of method of rectification and cost of rectification). It is not a situation such as where reasons merely set out the evidence of both parties and, without any analysis whatsoever, accept the evidence of one party (Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; (2006) 66 NSWLR 186 at [28]); nor a situation where a Member inappropriately used judicial notice to make factual findings unsupported by the evidence (Strinic v Singh [2009] NSWCA 15).
9. Rather, the evidence of Mr Zakos in this matter was sufficient for the Tribunal to find that the builder was in breach of the statutory warranties in s 18B of the HB Act. In the absence of any independent expert evidence from the builder or any clear challenge to the opinion of Mr Zakos that the residence had been constructed within 100 m of "breaking surf" (within the meaning of the BCA) or "surf conditions" (within the meaning of the manufacturer's recommendations) it was unnecessary for the Tribunal to set out an expansive explanation as to why it accepted the evidence of Mr Zakos, or identify in minute detail the evidence of Mr Zakos on the issue of what constituted "breaking waves" and "surf conditions".
10. The submissions of the builder also criticise the Tribunal for the lack of detail in its reasons. However, no ground of appeal was raised that the reasons were inadequate, and in any event we are satisfied that they were sufficiently adequate (NSW Land and Housing Corporation v Orr [2019] NSWCA 231 at [71]-[77]).

Ground 3-Failure to Admit Evidence

1. The evidence that the builder submits should have been admitted by the Tribunal was attached to the builder's email to the Tribunal dated 1 April 2020 (sent after the hearing had concluded other than in respect of written submissions on the issue of whether there had been 'double counting' of the method of rectification of the roof in the two reports of Mr Zakos).
2. The evidence included: 1. Extracts of the Bluescope Steel website regarding warranties for its products that set out "example locations" of regional NSW "surf"; "exposed" and "calm" conditions; and 2. An email from the homeowner's architect dated 3 February 2016 in regard to the type of roof sheeting material that the builder proposed to use.
3. The builder submitted that the evidence was clearly relevant to the issues of whether builder had breached s 18B of the HB Act in respect of the roofing material used (the Bluescope Steel website extracts); and whether the builder could raise a defence under s 18F of the HB Act (the email exchange with the architect).
4. However, the submissions of the builder are fatally flawed for a simple reason. They make no reference to the reasons of the Tribunal at paras [11]-[20].
5. Those reasons set out in detail why the Tribunal decided it was not granting leave to the builder to re-open its case and tender the further evidence contained in the email of 1 April 2020. It was not raised as a ground of appeal that the Tribunal had committed an error of law by refusing the builder leave to re-open its case.
6. Determination of whether a party is granted leave to re-open its case to adduce further evidence is a discretionary decision that involves consideration of the interests of justice (Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471). In Matson v Attorney-General (Cth) [2021] FCA 161 White J (after referring to relevant authorities) identified matters bearing on the issue of justice as including (at [180]): 1. The public interest (and the interests of the particular parties) in litigation being conducted efficiently and expeditiously; 2. The public interest in the finality of litigation, with the consequent expectation that litigants will present all their evidence and submissions at the one hearing; 3. The significance of the proposed new evidence and submissions in the context of the hearing 4. The explanation for the evidence not having been led at the trial; 5. The likely prejudice to the opposing party if the application is allowed; 6. the potential detriment to the applying party if the application is refused; and 7. Any delay by an applicant in seeking leave to reopen.
7. The Tribunal's reasons at paras [11]-[20] set out in detail why the Tribunal determined it was not in the interests of justice for the builder to be allowed to re-open its case and tender further evidence. There was no error of law in the Tribunal having refused the builder leave to re-open its case. Accordingly, there was no error of law in the Tribunal not considering the further evidence sought to be relied upon by the builder.

Ground 4-Section 18F of the HB Act

1. Section 18F of the HB Act states: 18F Defences (1) In proceedings for a breach of a statutory warranty, it is a defence for the defendant to prove that the deficiencies of which the plaintiff complains arise from - (a) instructions given by the person for whom the work was contracted to be done contrary to the advice of the defendant or person who did the work, being advice given in writing before the work was done, or (b) reasonable reliance by the defendant on instructions given by a person who is a relevant professional acting for the person for whom the work was contracted to be done and who is independent of the defendant, being instructions given in writing before the work was done or confirmed in writing after the work was done. (2) A relevant professional is independent of the defendant if the relevant professional was not engaged by the defendant to provide any service or do any work for the defendant in connection with the residential building work concerned. (3) A relevant professional is not independent of the defendant if it is established that the relevant professional - (a) was engaged on the basis of a recommendation or referral of the defendant to act for the person for whom the work was contracted to be done, or (b) is, or was within 3 years before the relevant instructions were given, a close associate of the defendant. (4) In this section, relevant professional means a person who - (a) represents himself or herself to be an architect, registered design practitioner or registered principal design practitioner (within the meaning of the Design and Building Practitioners Act 2020), engineer or surveyor, or (b) represents himself or herself to have expert or specialised qualifications or knowledge in respect of residential building work or any particular aspect of residential building work, or (c) represents himself or herself to be engaged in a profession or to possess a qualification that is recognised by the regulations as qualifying a person as a relevant professional.
2. The current version of s 18F of the HB Act came into effect on 15 January 2015.
3. The builder submits that the Tribunal's reference at para [125] of the reasons to the NSW Court of Appeal decision in The Owners-Strata Plan No 66375 v King [2018] NSWCA 170 ('King') was distinguishable because the Court of Appeal was dealing with the predecessor version of s 18F of the HB Act.
4. In respect of the operation of s 18F of the HB Act, the builder relies on the email exchange between the builder and the homeowner's architect that the builder unsuccessfully attempted to tender as evidence on 1 April 2020 after the evidence had closed. No other evidence is pointed to that would give rise to a defence under s 18F of the HB Act.
5. The homeowner submits that the substance of the email exchange, even if admitted, would not give rise to a defence under s 18F of the HB Act.
6. It is unnecessary to consider the effect of the changes to s 18F of the HB Act to the principles set out in King because no evidence was referred to other than the email exchange sought to be tendered as evidence on 1 April 2020 that would give rise to a potential s 18F HB Act defence. As the Tribunal was not in error by refusing the builder leave to re-open its case, it committed no error by not considering the email exchange.
7. Concomitantly, it was not in error by finding that the builder had no s 18F HB Act defence, irrespective of whether the legislative changes to s 18F of the HB Act affected the principles in King.

LEAVE TO APPEAL

1. As discussed previously, we are satisfied that there was evidence for the Tribunal to find the builder had breached the statutory warranties in s 18B of the HB Act in respect of the roof sheeting material used.
2. To the extent that the appeal grounds go to the weight to be given to such evidence; or errors of fact have occurred; the issue of leave to appeal must be considered.
3. We are not satisfied the builder may have suffered a substantial miscarriage of justice because the decision was not fair and equitable; nor that it was against the weight of evidence; nor that any significant new evidence has arisen (that was not reasonable available at the time the proceedings under appeal were being dealt with).
4. The decision was consistent with the evidence and the findings made by the Tribunal were reasonably open to it based on that evidence.
5. Leave to appeal is refused.

THE ISSUE OF COSTS

1. Under Reg. 38A of the NCAT Rules the Appeal Panel is to apply the same costs principles in the appeal as were applicable at first instance. By reason of Reg. 38 of the NCAT Rules the amount, a successful party is entitled to its costs if the amount claimed or in dispute in the appeal exceeds $30,000 then the Tribunal does not have to be satisfied that 'special circumstances' exist under s 60 (2) of the NCAT Act to make a costs order (Strata 778 Pty Ltd v Enright (No 2) [2020] NSWCATAP 71).
2. In this matter, it is abundantly clear that there is a realistic prospect the wealth of the appealing party would be changed by more than $30,000 depending on the outcome of the appeal.
3. In circumstances where s 60 (1) and (2) of the NCAT Act do not apply, the usual principle is that the unsuccessful party pays the successful party's costs of the appeal proceedings (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72).
4. The homeowner was clearly the successful party in the appeal. Subject to any submissions of the parties, the appropriate order is that the builder pay the homeowner's costs of the appeal as agreed or assessed.
5. We acknowledge that either, or both, of the parties may wish to be heard in respect of an application for a different costs order.
6. In our view, the appropriate course of action is to order the builder pay the homeowner's costs of the appeal as agreed or assessed, but give both parties liberty to apply to the Tribunal in writing if they seek any different or other costs order.

ORDERS 1. Leave to appeal is refused. 2. The appeal is dismissed. 3. Stay orders of the Appeal Panel dated 30 September 2020 are lifted. 4. Buildplatinum Pty Ltd is to pay the costs of Carol Micalleff and Lawrence Micallef in Appeal Panel proceedings AP 20/39176 as agreed or assessed on the basis set out in the legal costs legislation (as defined in s 3A of the Legal Profession Uniform Law Application Act 2014 (NSW)). 5. If either party applies for a different costs order, order 3 above ceases to have effect and the following orders apply: 1. Any application for a different costs order, together with evidence and submissions in support of the application is to be provided to the Tribunal and the other party within 7 days after of the date of publication of these orders. 2. Evidence and submissions in response to the application for a different costs order are to be provided to the Tribunal and the other party within 14 days of the date of publication of these orders. 3. Any evidence and submissions in reply in respect of the application for a different costs order are to be provided to the Tribunal and the other party within 21 days of the date of publication of these orders. 4. Subject to the parties' submissions in relation to this issue, the Tribunal proposes to determine any application for a different costs order on the basis of the written material provided.

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: 12 May 2021