Galdona v Peacock

NCAT Appeal Panel|2016-06-28

Reasons for Decision

The appellants appeal against a decision in the Consumer and Commercial Division of the Tribunal dated 15 March 2016 which required them to pay $17,257.90 to the respondent. The proceedings at first instance were lodged in the Tribunal on 16 June 2015.
The Notice of Appeal commencing these proceedings was filed on 14 April 2016, 30 days after the orders appealed against were made, namely 15 March 2016.
Rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 states: 'Unless the Tribunal grants an extension under section 41 of the Act, an external or internal appeal must be lodged: (a) in the case where the enabling legislation specifies the period within which the appeal is to be made - within the period specified, or (b) in the case of an internal appeal against a decision made in residential proceedings - within 14 days from the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later), or (c) in any other case - within 28 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision (whichever is the later).'
The appellants were required to lodge their appeal within 28 days and therefore require an extension of two days to file their appeal. We consider it appropriate to grant the extension of time required given that the appellants were only two days late.
The Reasons given on 15 March 2016 in support of the orders made in favour of the respondent were short. The Tribunal Member stated: '$17257.90 Determined compensation arising from the supply and placement of concrete and payment of a sum of $617.10 on the invoice issued on 29-Dec-2015.'
Section 80(2)(b) of the Civil and Administrative Tribunal Act 2013 states: '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.'

Grounds of Appeal

The Notice of Appeal stated the following Grounds of Appeal. 'We rely on section 48MA of the Home Building ACT 1989 and the principal that the rectification of defective work is the preferred outcome in any proceedings. The Appellant provided evidence that rectification was a reasonable outcome, most notably in the form of the Department of Fair Trading Building Inspection Report which recommended rectification of the defective works. There was no evidence before the Tribunal that rectification was not possible. The appellant provided evidence that rectification could be carried out at a cost significantly below the cost of replacement, for a sum of $6,539.50. The Respondent provided no evidence on the cost of rectification. The Tribunal has made orders for the full replacement of the defective works. The reasons for decision do not address why replacement has been preferred over rectification or why section 48MA has not been applied. We submit that the Tribunal has erred in not applying s48MA in this instance where rectification is a reasonable alternative to replacement of defective works.'
The appellants stated that their Grounds of Appeal related to an issue of law and that leave was not required, but that if the Appeal Panel thought that leave was required, then in that case they sought leave to appeal.
The appellants challenged the order made by the Tribunal on 15 March 2016, as extracted above and sought orders to be made that they should pay the respondent the sum of $5,925.40 which was calculated by taking the rectification cost which they stated was $6,539.50 less an amount of $617.10 which had been found to be owing from the respondent to them. We calculate that amount to be $5,922.40.
Insofar as the appellants raise as a ground of appeal that the Tribunal's reasons were inadequate, that will be a question of law for which no leave is required. In John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel stated at [14] that questions of law would include whether there had been a failure to provide proper reasons.
In addition if there was a failure by the Tribunal Member to consider section 48MA of the Home Building Act 1989, we find that would also be a question of law for which no leave is required. At [26] in John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd the Appeal Panel stated that 'Failure to take into account a relevant consideration which the decision maker was bound to take into account is an error of law' citing in support of that proposition Minister for Aboriginal Affairs v Peko-Wallsend Ltd 162 CLR 24 at 39 per Mason J.
Insofar as the appellants state that if leave is required then they seek leave to appeal, we will as also stated at [12] in Prendergast since the appellants are not legally represented, look at the appeal generally.
Clause 12(1) of Schedule 4 of the Civil and Administrative Tribunal Act states: '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 under appeal 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).'
The appellants Grounds of Appeal state that: 'The Appellant provided evidence that rectification was a reasonable outcome, most notably in the form of the Department of Fair Trading Building Inspection Report which recommended rectification of the defective works. There was no evidence before the Tribunal that rectification was not possible. The appellant provided evidence that rectification could be carried out at a cost significantly below the cost of replacement, for a sum of $6,539.50. The Respondent provided no evidence on the cost of rectification.'
Insofar as the appellants seek leave to appeal against the decision of the Tribunal Member, we will proceed on the basis that they seek leave to appeal on the basis that they may have suffered a substantial miscarriage of justice on the grounds that the decision of the Tribunal under appeal was against the weight of evidence.

Reply to Appeal

The respondent who was also unrepresented supports the orders made by the Tribunal on 15 March 2016. A number of his comments in his Reply to Appeal deal with issues relevant to the hearing before the Tribunal at first instance. In addition he states that the appellant is seeking to delay or avoid the Tribunal orders.
In his Reply to the Appeal the respondent also stated that rectification work was not possible suggesting that the extent of the defective work was such to require the defective work to be demolished and replaced.

Appeal directions

On 28 April 2016 directions were made by the Appeal Panel which required the parties to lodge with the Tribunal and to serve each other: 'The sound recording or transcript of the hearing at first instance, including the oral reasons given and what happened at the hearing. Relevant parts of the sound recording must be typed out and provided with the submissions'
There was limited compliance with this direction.
On or about 22 June 2016 the Appeal Panel made the following direction: 'Before the hearing on 28 June 2016, the Appellant must provide to the Tribunal and the respondent an informal transcript of the Reasons for Decision given by the Tribunal Member on 15 March 2016 when the decision being appealed against was given.'
The appellants did not comply with the direction.
The material that the parties provided to the Tribunal in accordance with the Appeal Panel's directions included discs containing sound recordings of the hearings before the Tribunal Member, including a disc of the hearing on 15 March 2016 when the Tribunal Member read out his decision. We have listened to that disc which establishes that the Tribunal Member read out his decision paragraph by paragraph stating the number of each paragraph as he proceeded.
The parties provided partial transcripts of the hearing on 15 February 2016. We find that those transcripts have no relevance as they related to the hearings in the Tribunal when the Member heard the evidence.
We have been provided with partial transcripts of the hearing on 15 March 2016 quoting what the Tribunal Member stated at paragraphs 21, 24, 25 and 28 of his oral reasons. Those paragraphs are repeated as follows: '21. I find that the residential building work performed on 1st of September 2014 has not been carried out with due care and skill. The work generally is of a poor standard, some specifics are: - The cove finish is very consistent and has been poorly applied The great drains are severely bowed The concrete finish to the pool fence is terrible There is severe splashing of concrete to the face brickwork of the house The concrete is not 100 mm thick as the quote indicated The placement and alignment of the formwork has been poor in a number of locations. These issues show very poor attention to detail and finish by the contractor. I accept the Department of Fair Trading report as an accurate assessment of the works. 24. I determine it inappropriate to make a work order for the following reasons - A The relationship between the parties has broken down B The contractor does not acknowledge the poor standard of the work carried out C I have severe reservations as to the contractor's ability to rectify the work with due care and skill 25. I cannot be satisfied on the evidence that the work can be satisfactorily addressed by the works quoted by 'Macs Cobblestone'. I conclude the work installed on 1 September 2014 be removed and replaced. The owner has provided 2 quotations of this in the following sums. One from Paul Murray Building for $18,342.50 and one from Beechwood Building Constructions for $17,875 I am going to allow the owner compensation in the sum of the lesser of these quotations, $17,875. 28. It is my position that much of the invoice dated 29th of December 2014 has been fabricated by the contractor and is without merit.'

The Contract

The respondent's application in the Tribunal arose out of a contract between the parties that required the appellants to carry out concreting work at the respondent's residence.
The respondent originally sought an order that the appellants do work or services to the approximate value of $10,000.00 in relation to defective work. The respondent also sought an order that the work carried out by the appellants be removed and replaced by an alternative contractor.
In any event it is clear that the respondent's application was brought under the Home Building Act and sought relief against the appellants for defective work they had carried out in the performance of the contract.
The documents filed in the Appeal disclose that there was another application involving the parties to this appeal before the Tribunal Member. In that application HB 15/50098, the appellants were the applicants and the respondent to this appeal was the respondent. The appellants were in that application seeking an order that the respondent pay them money for work carried out.

The procedural background

The proceedings at first instance were heard on: 1. 1 December 2015; and 2. 15 February 2016.
On 15 March 2016 there was a further hearing when the Tribunal Member gave oral reasons in support of his decision.
The Tribunal's Member's decision of 15 March 2016 failed to disclose that when he gave his decision he read out reasons for decision that seemed to have been prepared in advance. Regrettably the reasons for decision were, we infer, not in a state to be incorporated into the Tribunal's decision. In addition the Tribunal Member did not indicate that his decision was based on detailed oral reasons which he had provided to the parties. In our view to state that oral reasons have been given is desirable as it puts the parties (and the Appeal Panel) on notice that oral reasons were provided and should a party request written reasons pursuant to section 62(2) of the Civil and Administrative Tribunal Act, the oral reasons would be supplied in written form.
The order made on 15 March 2016 in the proceedings the subject of this appeal incorporated a finding made in HB 15/50098 that the respondent pay the appellant $617.10 which was credited against the amount found in favour of the respondent. No complaint is made about crediting an amount found in one application against an amount found in another application.

Lack of Reasons

We discern that there are in fact two aspect to this ground of appeal: 1. 'The reasons for decision do not address why replacement has been preferred over rectification or' 2. 'why section 48MA has not been applied'
For the appellants to establish that the Tribunal Member failed to provide adequate reasons to support his decision, it was in our view incumbent upon them to provide, as they were ordered to do, a transcript of the relevant extracts of the oral reasons given on 15 March 2016 upon which they relied.
The Tribunal's written decision of 31 March 2016 satisfied section 62(1) of the Civil and Administrative Tribunal Act which required the Tribunal to give the parties notice of the decision. Section 62(2) of the Civil and Administrative Tribunal Act entitled the appellants to request the Tribunal to provide a written statement of the reasons for its decision. The appellants did not avail themselves of that opportunity.
To the limited extent that both parties have provided extracts of the oral reasons given on 15 March 2016, the reasons given by the Tribunal Member preferring a money order for the replacement of the defective work over rectification by the appellants are : 1. The relationship between the parties had broken down; 2. The appellants did not acknowledge the poor standard of the work carried out; 3. The Tribunal Member had severe reservations as to the appellant's ability to rectify the work with due care and skill; and 4. The Tribunal Member could not be satisfied on the evidence that the work could be satisfactorily addressed by the works quoted by 'Macs Cobblestone'.
The reference to 'Macs Cobblestone' was a reference to a quotation tendered by the appellants is support of their case concerning the proper cost of rectification.
Although we have not been provided with an informal transcript of the hearing, the extracts of the oral reasons provided establish that the Tribunal member did provide reasons, albeit brief, to support his decision that: 'the work installed on 1 September 2014 be removed and replaced.'
We therefore conclude that the appellants have not established that the Tribunal Member failed to give reasons for deciding that replacement of the defective work was preferred over rectification of the defective work. This ground of appeal is dismissed.
Section 48MA of the Home Building Act states: 'A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome'
The section was introduced into the Home Building Act by section 62 of Schedule 1 to the Home Building Amendment Bill 2014.
The Home Building Amendment Bill 2014 was proclaimed on 10 December 2014 and commenced on 15 January 2015, except in respect of some provisions which commenced on 1 March 2015 which are not relevant to this Appeal.
The proceedings were commenced after the introduction of section 48MA became effective and thus the section was in force at the time the proceedings were commenced and at the time the decision was made.
It is clear that the Tribunal Member considered the rectification of the defective work by the responsible party, in this case the appellants who were the builders.
The oral reasons disclose that rectification of the defective work by the responsible party was considered and the Tribunal member decided that it was not appropriate because: 1. The relationship between the parties had broken down; 2. The appellants did not acknowledge the poor standard of the work carried out; and 3. The Tribunal Member had severe reservations as to the contractor's ability to rectify the work with due care and skill
The Tribunal Member's oral reasons establish that while he did consider a work order which he was entitled to make pursuant to section 48(1)(c)(i) of the Home Building Act, he did not refer to the requirements of section 48MA of the Home Building Act .
At [15(a)] of his decision in Minister for Aboriginal Affairs v Peko-Wallsend Ltd Mason J. stated: 'The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which he is bound to take into account in making that decision (Sean Investments Pty Ltd v. MacKellar [1981] FCA 191; (1981) 38 ALR 363,at p 375; CREEDNZ Inc. v. Governor-General (1981) 1NZLR 172, at pp 183, 196-197; Ashby v. Minister of Immigration (1981) 1 NZLR 222, at pp 225, 230,232-233). The statement of Lord Greene M.R. in Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223, at p 228, that a decision-maker must take into account those matters which he "ought to have regard to" should not be understood in any different sense in view of his Lordship's statement on the following page that a person entrusted with a discretion "must call his own attention to the matters which he is bound to consider".
In our view the statement in section 48MA of the Home Building Act 'A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to' made it a mandatory requirement for the Tribunal Member to have regard to 'the principle that rectification of the defective work by the responsible party is the preferred outcome'.
Applying what was said by Mason J as cited above in in Minister for Aboriginal Affairs v Peko-Wallsend Ltd, we find that by reason of the Tribunal Member's failure to have regard to the principle 'that rectification of the defective work by the responsible party is the preferred outcome' the appellants have made out an error of law in the Tribunal Member's decision.
The appellants have established that the Tribunal Member erred in law by failing to have regard to section 48MA of the Home Building Act in awarding compensation in favour of the respondent when he determined his building claim which involved an allegation of defective residential building work.

Application for leave to Appeal

We stated above that insofar as the appellants seek leave to appeal against the decision of the Tribunal Member, we will proceed on the basis that they seek leave to appeal on the basis that they may have suffered a substantial miscarriage of justice on the grounds that the decision of the Tribunal under appeal was against the weight of evidence.
The Appeal Panel considered the principles that apply on an application for Leave to Appeal in Collins v Urban [2014] NSWCATAP 17 on the basis that a appellant may have suffered a substantial miscarriage of justice on grounds that the decision of the Tribunal under appeal was against the weight of evidence. At [76] - [78] the Appeal Panel stated the principles which apply as follows: 'Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) 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. As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that: (1) If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12]. (2) The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]. If in either of those circumstances the appellant may have been deprived of a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence.'
The issue on which the appellants Seek leave to Appeal is, so far as we are able to discern from their Notice of Appeal, that they provided evidence that rectification was a reasonable outcome and there was no evidence before the Tribunal that rectification was not possible and that they provided evidence that rectification could be carried out at a cost significantly below the cost of replacement when the respondent provided no evidence on the cost of rectification.
In order to establish that the decision of Tribunal was against the weight of evidence the appellants must persuade us, as was stated in the passage from Collins v Urban as extracted above, that their evidence regarding the fact that rectification of the defective work was both a reasonable and possible outcome which came at a cost below the cost of replacement, preponderated so strongly against the conclusion found by the Tribunal Member that it could be said that the conclusion reached was not one that a reasonable tribunal member could reach.
From the extracts of the oral reasons for decision provided to us, the Tribunal Member had regard to the fact that the appellants had provided evidence of the cost of rectification in the form of a quote from 'Macs Cobblestone' but had, after consideration of that quote, come to the conclusion that he could not accept on the evidence that the work could be satisfactorily addressed by the work quoted by 'Macs Cobblestone'.
The appellants attached the quote from Macs Cobblestone to their Notice of Appeal. It is a short quote of some 15 lines which describes the work to be carried out and states a lump sum to carry out the work quoted. The Tribunal Member inspected the site and the work the subject of the dispute before him. His oral reasons set out some of the specifics of what he described as the poor standard of the appellants' work. In addition the Tribunal Member had the benefit of a Department of Fair Trading report which he described as an accurate assessment of the works. In our view, the Tribunal Member was in the best position to assess the defective work and to form a conclusion about whether the rectification work described in the Macs Cobblestone quote was adequate to rectify the defective work. His conclusion was that it was not. It is on this basis that we find that the Macs Cobblestone quote does not preponderate so strongly against the conclusion found by the Tribunal Member such that it could be said that the conclusion he reached was not one that a reasonable tribunal member could reach.
Based on this finding we conclude that the appellants have not been deprived of a significant possibility or a chance which was fairly open that a different or more favourable result would have been achieved.
For the reasons expressed in the preceding paragraphs we are not satisfied that the appellants have suffered a substantial miscarriage of justice because the decision of the Tribunal was against the weight of evidence. It follows from these findings that the appellants have not established an entitlement to Leave to Appeal.
The appellants have not made out a case for Leave to Appeal. We will therefore order that their application for Leave to Appeal be refused.

Determination of the Appeal

We have found that the Tribunal Member erred at law in not having regard to section 48MA of Home Building Act and the preferred outcome referred to in that section when he determined the respondent's building claim on 15 March 2016.
Section 81 of the Civil and Administrative Tribunal Act deals with the orders that we may make in light of our decision on the appeal. The section states: '(1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following: (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when varying, or making a decision in substitution for, the decision under appeal.'
We have had regard to the Tribunal Member's decision and the passages of his oral reasons for decision that the parties have referred us to. We also note the procedural history and the fact that the Tribunal Member inspected the site and the work the subject of the dispute before him.
Having regard to the findings of fact made by the Tribunal Member (referred to below) and the other material available, the Appeal Panel has decided to exercise its power under section 81(1)(b) of the Civil and Administrative Tribunal Act to confirm the Tribunal decision given on 15 March 2016 despite the fact that at [50] we found that the appellants have established that the Tribunal Member erred in law by failing to have regard to section 48MA of the Home Building Act in his determination of the claim.
The basis upon which we have decided to confirm the Tribunal decision is that even if the Tribunal Member had considered section 48MA of the Home Building Act and had commenced his consideration of a work order under section 48(1)(c)(i) of the Home Building Act with due regard to the principle that rectification of the defective work by the appellants was the preferred outcome, we have come to the conclusion that his decision would have been no different. We reach this conclusion by having regard to the fact that the Tribunal Member made the following findings. First, the relationship between the parties had broken down. Secondly, the appellants did not acknowledge the poor standard of the work they had carried out. Thirdly, the Tribunal Member had severe reservations as to the appellant's ability to rectify the work with due care and skill. These findings were in our view sufficient to justify a decision that the preferred outcome of rectification by the appellants should not be ordered.
Finally, we observe that section 48MA of the Home Building Act only required the Tribunal Member to have regard to the principle that that rectification of the defective work by the appellants was the preferred outcome. Section 48MA did not make the preferred outcome the mandatory outcome.
It is on this basis that we dismiss the appeal and confirm the Tribunal decision given on 15 March 2016.

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: 24 March 2017

At a glance

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Judgment (10 paragraphs)

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Cases Cited (9)

Cited By (36)