C G Constructions Pty Limited v Hanson Constructions Materials Pty Limited

NCAT Appeal Panel|2016-12-16

rEASONS FOR DECISION

The dispute underlying this appeal arises from the supply of concrete by Hanson Construction Materials Pty Limited (Hanson), the Respondent, to C G Constructions Pty Limited (CGC), the Appellant. That concrete was ordered by CGC for use in residential building work being undertaken by it. CGC alleges that the concrete supplied by Hanson did not meet the colour specification of the concrete ordered by CGC for that building project.
On 27 June 2016, CGC commenced proceedings in the Consumer and Commercial Division of the Tribunal against Hanson, seeking to recover the sum of $10,000. That sum was said to reflect the cost of removing and rebuilding a concrete stairway built with the ready mixed concrete delivered by Hanson that did not meet the colour specified by CGC for that concrete.
CGC's claim was dismissed by the Tribunal on 5 September 2016.
For the reasons that follow, we have determined that the appeal should be upheld. As the reasons disclose, it is necessary that the proceedings be remitted for further hearing in the Consumer and Commercial Division of the Tribunal.

Background

CGC is a building contractor. It was engaged to construct duplex units at a site in the Sydney suburb of Gymea ("the Gymea site" or "the Gymea project"). Coloured concrete was required for the ground floor slab and stairs within each duplex unit. Other concrete to be used for that project was not required to be coloured.
In the course of its business, Hanson supplied and delivered ready mixed concrete, including a product called "Imagecrete". That company published a colour chart for concrete it supplied under that product title. One of the colours shown on the "Imagecrete" colour chart was identified as "Gunmetal".
CGC obtained a quote from Hanson for the supply of all concrete, including the coloured concrete component, required for the Gymea project. That quote was accepted by CGC and its acceptance acknowledged by Hanson in the form of a document headed "Project Confirmation", dated 22 June 2015. The latter document included reference, in terms, to the "Imagecrete Gunmetal" component of the total quantity of concrete ordered.
A ready mixed concrete load of "Imagecrete Gunmetal" was delivered to the Gymea site on 7 August 2015. That load was used to pour ground floor slabs for the units. No issue arises in respect of that load.
A further load of ready mixed concrete ordered from Hanson by CGC was delivered to that same site on 17 December 2015. The delivery docket for that load described the concrete as "Imagecrete Gunmetal". That load was poured into formwork for stairs leading from the ground floor slabs. When the pour was complete, the stairs were covered while the concrete cured and also to protect the stairs before being polished.
When the covering from the stairs was removed, CGC claims that not only did the colour of the stairs not match the colour of the ground floor slab, the concrete did not match the colour identified as "Gunmetal" on Hanson's colour chart for its "Imagecrete" products. Because CGC required "Gunmetal" coloured stairs for the Gymea project, it was necessary to demolish the stairs constructed with the concrete delivered by Hanson on 17 December and then provide a new set of stairs.

The hearing at first instance

The hearing before the Tribunal Member took place on 5 September 2016. CGC was represented by its sole Director, Mr C Gear. There was no appearance on behalf of Hanson although that Company had apparently indicated its intention to defend the claim against it. To that end, it had filed documents in support of its case in accordance with pre-trial directions given by the Tribunal. Nonetheless the hearing proceeded, the Member being satisfied that Hanson had notice of the hearing date.
At the hearing, Mr Gear relied upon a bundle of documents that he had provided to the Tribunal. That bundle included a copy of emails exchanged between CGC and Hanson concerning the order for coloured concrete, both before and after 17 December 2015; the quote from Hanson and its Project Confirmation for the supply of concrete to CGC, as well as delivery dockets and invoices for concrete supplied to the Gymea site. Also included among the documents provided by Mr Gear were photographs of both the ground floor slab and stairs. A copy of the Hanson "Imagecrete" colour chart, identifying the colour "Gunmetal", was also included among those documents. That is not a comprehensive description of all documents provided by and relied upon by Mr Gear but is a sufficient description of documents for present purposes.
After being taken by Mr Gear through his documents and discussing their content with him, the Member adjourned to consider her decision. Later that day she ordered that CGC's application to the Tribunal be dismissed and provided short written reasons for so doing.

The decision at first instance

After briefly stating the facts directed to the order for and delivery of the "Imagecrete Gunmetal" concrete, the Member found that the Tribunal had jurisdiction to determine the claim because it was framed as a "claim in contract". The Member then described that claim, according to her understanding, as being framed in two ways: "1. The Applicant entered into a contract with the Respondent to provide concrete for the stairs. A specific term of the contract was that the gunmetal grey which he was ordering for internal stairs (Lot 2) was to match the gunmetal grey which he had previously ordered for the internal slabs (Lot 1). In breach of the contract the Respondent provided concrete which did not match. 2. The Applicant entered into a contract with the Respondent to provide gunmetal grey concrete for the stairs. In breach of the contract the Respondent provided concrete which was not gunmetal grey."
The Member accepted that Mr Gear, on behalf of CGC, had ordered and that Hanson had purported to deliver "Imagecrete Gunmetal" for both the ground floor slabs and the stairs. She also accepted by reference to photographs provided by Mr Gear that the colour of the two areas did not appear to match.
In addressing the first way in which the Member perceived CGC's claim to be framed, she stated that establishing a mismatch in colour between the two areas was insufficient as the Tribunal "would need to be satisfied that it was a specific term of the contract that the 2 lots matched." Accepting that CGC may have wanted that match to occur, the Member continued: "…there is nothing in the evidence to confirm that the Applicant ever conveyed to the Respondent either orally or in writing that the two lots of concrete ordered on 2 separate occasions, some four months apart were to be poured next to each other and that they were required to match. When asked about this in the hearing the Applicant confirmed that when he ordered the concrete he did not say that the two lots had to match."
After making reference to the onus of proof falling upon CGC, the Member could not be satisfied "that the Respondent breached a specific term of the contract" being the term to which she earlier referred. That determination disposed of the first way in which she understood the claim by CGC to have been framed.
In addressing the second way in which the Member understood the claim to be framed, she referred to an observation made by Mr Gear during the course of the hearing to the effect that he believed Hanson "had forgotten to put the colour in" the concrete supplied on 17 December. He sought to compare photographs of the stairs poured using that concrete with other areas of the building for which uncoloured concrete had been ordered from and supplied by Hanson. Focusing upon that evidence, the Member stated that, in the absence of expertise by Mr Gear and based upon photographs that were "not of the best quality" she was not satisfied "on the balance of probabilities that the Respondent supplied the wrong concrete."
Founded upon the reasons expressed in addressing each of the two ways in which the claim by CGC was framed, the Member determined that CGC had failed to make out its claim.

The grounds of appeal

The Notice of Appeal was prepared by Mr Gear on behalf of CGC. The grounds of appeal in that Notice are framed in a narrative form rather than a succinct statement of a ground or grounds. As expressed in the Notice, CGC appears ultimately to assert that the Member's decision was against the weight of evidence. However, the narrative appears to isolate or identify two bases for that assertion: 1. that the Project Confirmation evidences a term of the agreement between the parties to be that the colour of concrete to be supplied by Hanson would be "Imagecrete Gunmetal", being evidence not addressed by the Member in her reasons; and 2. that the concrete supplied by Hanson for the stairs did not conform to the colour "Gunmetal" as shown in Hanson's colour chart for "Imagecrete".
The Notice of Appeal did not, in terms, identify a question of law arising from the Member's decision. Leave to appeal was also sought in the Notice. Those matters are relevant because the appeal was brought pursuant to s 80 of the Civil and Administrative Tribunal Act 2013 (the Tribunal Act) as the decision of the Member was a "general decision" within the meaning of s 29 of the Act and was therefore an "internally appealable decision" within the meaning of s 32(4).
By s 80(2) of the Tribunal Act, an appeal on a question of law is able to be brought as a right. Any other ground requires leave. The correct characterisation of the grounds of appeal when determining whether leave is required is a matter addressed later in these reasons.
Rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 fixes the time within which an appeal is to be commenced. Hanson raises no issue as to the time within which the present appeal was commenced by CGC.

Reply by Hanson

No formal Reply to Appeal was filed by Hanson. However, it did provide a case summary with supporting documents. In essence, the summary contended that the appeal should be dismissed because the claim could not succeed having regard to: 1. the terms and conditions of a credit application signed by CGC whereby the entitlement to make a claim of the present kind was excluded; 2. the terms and conditions of sale of concrete products by Hanson excluded, in the events that occurred in the present case, the entitlement to make such a claim; 3. the failure of CGC to specify that the "Imagecrete Gunmetal" supplied for the stairs was to match that product of the same colour supplied for the ground floor slabs; 4. the statement in the published material for "Imagecrete" stated that colour variations from those depicted in the colour chart could occur; and 5. the "Imagecrete" supplied for the stairs at the Gymea site was within the "acceptable Gunmetal" colour variation.

Hearing of the appeal

Mr Gear represented CGC on the hearing of the appeal. Hanson was represented by Ms J Walsh and Mr R Satongi, both employees of that Company. Ms Walsh explained that Hanson had not appeared at the hearing below through "administrative error".
Each party accepted that the documents appended to their respective submissions or case summaries constituted the documentary evidence to be considered for the purpose of the appeal. In the case of CGC, those documents were the documents considered by the Member. Without objection from Mr Gear, Ms Walsh referred to the documents appended to Hanson's case summary, being documents said to have been filed with the Tribunal for the purpose of the hearing at first instance. There is no suggestion that the Member relied upon the latter documents in making her decision.
At the outset of his oral submissions, Mr Gear submitted that the Member had misconceived and not addressed the case presented by him on behalf of CGC. That case, so he submitted, was not that the "Imagecrete" supplied by Hanson for the stairs did not match that supplied for the ground floor slabs. Rather, the case that he sought to make before the Member was that the concrete ordered was specifically referable to the colour identified as "Gunmetal" on Hanson's "Imagecrete" colour chart. Accepting the possibility of some colour variation from batch to batch of concrete, he contended that the concrete supplied could not reasonably or rationally be said to fall within the "Gunmetal" colour identified in that chart.
While Ms Walsh sought to elaborate upon the contentions earlier summarised, responding to the case made against Hanson, she acknowledged that in the absence of any Hanson representative at the hearing below, no comment could be made upon the submission by Mr Gear that the basis upon which the case for CGC had been argued before the Member was not addressed by her.
On 4 November 2016, directions were given to the parties for the conduct of the appeal. Relevantly, each party was directed to lodge with the Tribunal and to provide the other party "the sound recording of the hearing at first instance, if oral reasons were given and/or what happened at the hearing is being relied upon." Neither the sound recording of the hearing nor a transcript of the proceeding was provided to us at the hearing of the appeal.
In light of the submissions made by Mr Gear, the absence of any record of the proceedings before the Member was most unfortunate. The documents filed by Mr Gear for the purpose of the appeal, being the documents relied upon by him before the Member, did not enable us to determine the precise basis upon which he had articulated his claim before the Member. That understanding was a necessary prerequisite to the consideration of his submission.
Ultimately, it was agreed by the parties that we should obtain and listen to the sound recording of the hearing before the Member for the purpose of addressing Mr Gear's primary argument. They also agreed that we should do so without the necessity to reconvene the hearing for the purpose of listening to and addressing the sound recording, when received. We have since obtained that recording and listened to it.

A question of law is raised

Although not articulated by Mr Gear as raising a question of law arising from the Member's decision, his submission that the decision did not address the case he sought to make does potentially give rise to such a question. As the Appeal Panel in Prendergast v Western Murray Irrigation Limited [2014] NSWCATAP 69 observed at [12], where an appellant is not legally represented it is appropriate to determine whether a question of law arises by taking a general overview of the grounds of appeal as stated or argued in order to determine whether "a question of law has in fact been raised" by the appellant. The identification and consideration of a question of law distilled from an appellant's grounds of appeal first requires that fairness be afforded to the Respondent in so doing. Hanson does not raise any issue of that kind, being content, as we have said, for us to determine the issue after listening to the sound recording.
In Prendergast at [13] the Appeal Panel identified, by reference to authority, a number of examples of questions of law that would qualify as such under s 80(2)(b) of the Tribunal Act. One such example arises where the Tribunal decision is made on a wrong issue or has posed the wrong question for determination. That may also be expressed as involving a circumstance where the decision-maker fails to engage with and determine the case that a party seeks to make.
The authority cited for identifying an error of law of that kind is found in a number of decision of the High Court including Craig v South Australia (1995) 184 CLR 163 at 179; [1995] HCA 58; Re Minister for Immigration and Multicultural Affairs; Ex Parte Miah (2001) 206 CLR 57; [2001] HCA 22 at [80]-[81]; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30 at [82]. In Miah the error of law of the kind that we have identified is described as a "constructive failure to exercise jurisdiction."
In Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088, Gummow and Callinan JJ (Hayne J agreeing) said at [24] that a failure to respond "to a substantial, clearly articulated argument relying upon established facts was at least" a failure to accord an applicant natural justice. A failure of that kind has also been described as a constructive failure to exercise jurisdiction (see, for example, MZAES v Minister for Immigration and Boarder Protection [2015] FCA 113 at [66]). Such a failure will constitute an error of law.
Having listened to the sound recording of the proceedings before the Member, we find that the decision does manifest an error of law of the kind discussed. Mr Gear spoke clearly at the hearing and articulated his case to the effect that the concrete of the stairs did not match or even resemble the "Gunmetal" colour identified on Hanson's colour chart.
We can, with respect, well understand that the Member may have been distracted by the material relied upon by Mr Gear, providing background to his agreement with Hanson as well as other documents, particularly photographs of the ground floor slap and other areas of the Gymea site where uncoloured concrete had been poured. Clearly, the fact that CGC had taken delivery of a load of Gunmetal coloured concrete from Hanson on 17 December 2015 was not in issue. It is not an issue raised by Hanson in this appeal.
The photographs relied upon by Mr Gear at the hearing before the Member were, in a sense, of only marginal relevance, if relevant at all, other than as evidence of the fact that the stairs have been poured. As a self-represented litigant, it is understandable that he may not have appreciated the marginal relevance of the comparison being made among the photographs of the ground floor slabs, those of the stairs and those of non-coloured concrete components of the Gymea project. Our appreciation of his evidence, gained from listening to the sound recording of the proceedings, is that he was using those photographs to illustrate why he contended that the stairs did not resemble the "Gunmetal" coloured concrete that he had ordered. The floor slab colour was referred to as indicating the colour that he considered was consistent with that shown on Hanson's colour chart.
Importantly, his tendered documents before the Member included a copy of the Hanson colour chart. In the course of giving his evidence to the Member, Mr Gear made a number of references to that chart. In response to a question from the Member he said, "I expected the colour to come close to the chart. It is nowhere near it." A further statement to that effect was repeated in his concluding statement to the Member.
The Member's reasons make no reference to the colour chart, nor, importantly, to the claim articulated orally that remedial work on the stairs was required because the concrete delivered on 17 December 2015 was "nowhere near" the "Gunmetal" colour that was ordered by reference to the colour chart. In addressing the claim as she did, the Member failed to consider a "substantial, clearly articulated argument" relying upon uncontested facts adduced before her that was fundamental to the case advanced by CGC. On that account, the decision is infected by a material error of law and should therefore be set aside.
Self-evidently, the error of law that we have identified means that there has been no finding of fact necessary for the determination of CGC's claim. Although s 80(3) of the Tribunal Act would enable us to conduct "a new hearing", if warranted, the evidence available to us does not enable that to occur. Further, the necessary finding of fact to determine the claim on the basis advanced by CGC is likely to require more than the visual comparison of a colour chart as supplied at the relevant time by Hanson (rather than the repeatedly photocopied version that we have) with poor photographs of the stair as poured on 17 December 2015.
Therefore, it is necessary that we remit the matter to the Consumer and Commercial Division of the Tribunal for re-hearing. Whether, having regard to the amount claimed by CGC, the time and cost involved in re-hearing is justified, as distinct from the parties seeking an appropriate resolution of the dispute, is a matter upon which only they can decide.

Conditions and Orders

For the reasons stated, the decision under appeal does disclose a material error of law. That decision did not engage with and determine the basis of the claim made by CGC, namely that the concrete supplied to it by Hanson on 17 December 2015 for the Gymea project did not accord with the "Gunmetal" coloured concrete identified in Hanson's "Imagecrete" colour chart and as a consequence Hanson was in breach of its agreement with CGC to supply concrete that met the colour specification.
As the proceedings are to be remitted, it will be for the Tribunal, on remitter, to direct what evidence, or further evidence, may be led by either party at the final hearing of the proceedings.
We make the following orders: 1. Appeal upheld; 2. Set aside the decision of the Tribunal given on 5 September 2016; 3. Remit the proceedings to the Consumer and Commercial Division of the Tribunal for determination according to law.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar 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: 15 June 2017

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