This is an appeal by a builder (appellant) from a decision of the Tribunal awarding the homeowners (respondents) $53,117.21 in relation to incomplete or defective works done pursuant to consent orders entered into by the parties which resolved competing claims made by each against the other in separate proceedings commenced by each in the Tribunal.
[2]
Background
The appellant and respondents entered into a contract for the appellant to construct a domestic dwelling for the respondents. Work commenced but disputes arose between the parties before it was completed.
Both parties commenced proceedings against the other(s) in the Tribunal, and both parties were legally represented in those proceedings.
The appellant commenced proceedings numbered HB 18/06036 seeking an order that the respondents pay it certain monies alleged to be owed to it by the respondents.
The respondents commenced proceedings numbered HB 18/37950 seeking orders that the appellant undertake certain work (to complete the building works) and an order that they were not liable to pay any amounts claimed to be owed by them to the appellant.
Both matters were listed for hearing on 15 January 2019. On that day a settlement agreement was reached between them and orders agreed to by them were made by the Tribunal.
There is no need to set out the consent orders in full, but the salient features of the consent orders relevant to this appeal were that:
1. the appellant was ordered to carry out (and complete) certain work specified in paragraphs 1 - 15 of the document marked Annexure A to the consent orders on or before 16 May 2019 (the "rectification work") "subject to rain delay of roofing and external works" (sic);
2. the respondents were to provide vacant possession of the premises to allow the appellant to undertake the work, and to deliver keys to the premises to the appellant no later than 12 February 2019;
3. each party was to pay its and their own costs;
4. the proceedings were otherwise dismissed; and
5. the orders were made in both proceedings.
The Tribunal also noted the agreement between the parties recorded in paragraphs 16, 17 and 19 of Annexure A.
Paragraph 16 of Annexure A said that the parties were to agree on an appropriately qualified superintendent for the supervision and approval of the works within 7 days of the issue of a rectification order.
Paragraph 17 is not relevant to this appeal and need not be further mentioned.
Paragraph 19 said that all communications between the parties were to be made through their respective legal representatives.
Thereafter, the appellant commenced but did not complete the work agreed upon in the consent orders by the due date.
The respondents therefore filed a renewal application (HB 19/24517) seeking compensation of $122,753.40 said to be necessary to complete the rectification work, and also sought $100,832 for costs and lost rent.
The appellant also filed a renewal application (HB 19/24519). In that application the appellant conceded that the rectification work had not been completed but asserted that the non-completion was caused by the following four matters:
1. the respondents' failure to provide vacant possession;
2. the delay (caused by the respondents) in providing keys to the premises to the appellant;
3. the inability to commence the rectification work until a superintendent had been engaged (and that did not occur until 4 March 2019);
4. delays caused by wet weather.
The appellant says he sought an extension of time from the respondents in relation to the agreed date of completion due to these factors, but this request was denied.
The appellant also sought orders in its renewal application allowing it to prosecute its original claim and also seeking compensation for alleged lost income caused by the non-renewal of its builder's licence.
In response the respondents said that the appellant was not entitled to commence its renewal application because there were no orders made in the appellant's favour [a condition arising from the terms of cl 8(1) and (2) of Sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act")].
Both renewal proceedings were heard together, and the Tribunal delivered a single decision from which the appellant now appeals.
[3]
The Tribunal's Decision
The Tribunal decided that the respondents were entitled to renew their original proceedings. There is no appeal from that decision, and we can see no error in it.
As to the appellant's submission that it had been prevented from completing the rectification work by the due date because of the four factors mentioned at [14] above, the Tribunal made a number of findings of fact adverse to the appellant.
The Tribunal found that the keys to the premises were delivered to the appellant's legal representative on 11 February 2019. That was one day before the last day for delivery contained in the consent orders. In making that finding the Tribunal relied upon the uncontradicted evidence of a witness called by the respondents, Ms Arthur.
The Tribunal found that vacant possession as required by the consent order had been provided. The Tribunal rejected the appellant's submission that vacant possession was not given because of the presence of a dishwasher and some items in the garage and outside the premises. The Tribunal found that the presence of those items did not prevent the appellant from commencing the rectification work and that there had been no contemporaneous complaint about the presence of those items made by the appellant to the respondents.
The Tribunal said that it was not satisfied that rain delayed the roofing (or other external) works (being part of the rectification work). The Tribunal noted that the appellant did not make any contemporaneous request for an extension of time in relation to the occurrence of rain, nor did it make any request for an extension of time on the date due for completion of the works (being 16 May 2019). The Tribunal said that there was no evidence that the appellant was prevented by rain from undertaking the roofing or external part of the rectification work.
In relation to the appointment of a superintendent, the Tribunal noted that there was no agreement between the parties as to who that superintendent would be within the seven days specified in the consent order. However, the Tribunal accepted the evidence given by the respondents, not disputed by the appellant, that the appellant's legal representative would source an appropriate person. The Tribunal found that the respondents' communicated their agreement to the proposed superintendent on 19 February 2019 but noted that there was no evidence as to when the appellant's legal representative put forward that superintendent to the respondents' legal representative. Therefore, the Tribunal could not say whether any delay in agreeing the superintendent was caused by one party or the other or both.
The Tribunal also noted that the consent orders did not link the engagement of the superintendent with the time for completion of the works and said that there was no evidence that the absence of an appointed superintendent caused any delay in commencement of the work.
The Tribunal then turned to the question whether the the appellant was entitled to renew its original proceedings. The Tribunal said that it was not so entitled because none of the consent orders were made in the appellant's favour. We interpolate here that Clause 8(1) and (2) of Sch 4 of the NCAT Act provide:
(1) If the Tribunal makes an order in exercise of a Division function in proceedings, the Tribunal may, when the order is made or later, give leave to the person in whose favour the order is made to renew the proceedings if the order is not complied with within the period specified by the Tribunal.
(2) If an order has not been complied with within the period specified by the Tribunal, the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with.
[Our emphasis]
The Tribunal said that, although the consent orders were expressed to be made in both matters, it was clear that the orders related to the respondents' application and it was that application which was renewed by the respondents. The Tribunal noted the appellant's submission that because the orders were made by consent, the Tribunal had not made any order in favour of either party. The Tribunal said that this submission misunderstood the nature and enforceability of consent orders. The Tribunal said that the fact that the parties consented to the making of orders did not mean that they were not orders made by the Tribunal in favour of one party or the other.
The Tribunal then held that the appellant was therefore not entitled to renew its proceedings (because no orders had been made in its favour per cl 8 of Sch 4 of the NCAT Act).
The Tribunal then said that the real issue was the extent to which the consent orders acted as an estoppel precluding the respondents from pursuing rectification otherwise than in accordance with the agreed scope of work. The Tribunal cited Robert Symes and Kim Louise Filmer v Mick Fabar Constructions Pty Ltd [2015] NSWCATCD 77 in support of the existence of an estoppel.
The Tribunal held that because the appellant, in agreeing to the consent orders, had "abandoned" its (larger) claim from its original proceedings, the respondents were estopped from claiming rectification in accordance with their original claim. We do not understand how this statement fits with the fact that in their renewal application the respondents expressly sought orders in relation to the rectification works (as specified in the consent orders), and not the works the subject of their original claim. However, nothing turns on this in this appeal and the respondents have not appealed from that holding as to the existence of an estoppel.
In saying that the respondents were estopped from claiming rectification in accordance with their original claim it appears the Tribunal relied upon the reasoning in Symes found at [47]. In that paragraph the Tribunal said:
"I agree, and it is not disputed by the parties, that in the case of consent orders an estoppel is created, but I also agree with the respondent's submission that it may be necessary to consider the extent of such estoppel. In my opinion, an estoppel is created only to the extent that it can be determined what is the content of the parties' agreement. If, on a proper view of the evidence relied upon in the original hearing, the experts agree that a particular item is to be constructed but it later becomes obvious that it is physically impossible to do so, such impossibility not being known to the experts or any other person at the time the agreement was made, then it cannot be the case that an estoppel has been created because the party who promised to do the agreed work did not know it could not be done. Furthermore, if the party getting the benefit of the proposed work did know it could not be done but allowed the other party to make the agreement, then the party with knowledge will not be permitted to take advantage of that estoppel. Logically, the original consent order cannot be implemented and nor can a money order be made - the Tribunal cannot make an assessment of the cost of performing an impossibility, and neither can anyone else."
We have reservations whether that reasoning in Symes, and the holding of the Tribunal below in this case (which followed that reasoning) that an estoppel arose from the consent orders in the circumstances of this case, are correct. One reason for our reservation is that cl 8 of Sch 4 provides, in terms, that if an order is not complied with the original proceedings may be renewed. To suggest that a party is estopped from pursuing its original claim (at least in part) in renewal proceedings is to say there is a qualification to the plain words of cl 8 of Sch 4, a qualification which is not expressed in that statutory provision. We therefore doubt the correctness of the Tribunal's holding on this point.
Be that as it may, we are not required to decide that point in this appeal although the holding needed to be mentioned because it is relevant to one of the appellant's grounds of appeal to which we will later come in these reasons. Having we did not wish to be seen to agree with that holding by our need to refer to it.
Returning to the summary of the Tribunal's decision and its background, the respondents sought a money order (in their renewal application) by reference to the scope of work referred to in the consent orders (the rectification work). They produced a report authored by Mr Thorpe (from YBI Solutions Pty Ltd), an appropriately qualified building expert who described the rectification work done and not done by the appellant.
That report did not attempt to quantify the cost of completing that work. Rather, the respondents relied upon a report of Mr Shepherd filed in their original proceedings which quantified the cost of completing the original works. The appellant similarly relied upon an expert retained by it in the original proceedings, Mr Lewer. That expert also addressed himself to the costs of completing the original work rather than the rectification work.
The Tribunal then proceeded to determine what of the rectification work had been completed (including consideration of the evidence given by one of the respondents and the director of the appellant, Mr Bower), what work remained outstanding and what was the cost to complete the rectification work.
The task of quantifying the cost of completing the uncompleted work was not without its difficulties because the parties' evidence was directed to the original work and not to the rectification work. Nevertheless, with commendable fortitude, the Tribunal did the best it could with the material with which it had been provided by the parties. This was what the law required the Tribunal to do. McColl JA, with whom Campbell JA and Handley AJA agreed, summarised some general principles in this area in McCrohon v Harith [2010] NSWCA 67 at [118]. In that paragraph her Honour said that there are cases in which courts will estimate damages despite a dearth of evidence. Difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can and that sometimes the assessment of damages, of necessity, involve what is guess work rather than estimation. Her Honour said that where precise evidence is not available the court must do the best it can. Those statements apply equally to the Tribunal as they do to courts.
In carefully considered reasons the Tribunal examined each of the 15 items of work set out in the consent orders, decided what was complete and incomplete, and did the best it could with Mr Shephard's and Mr Lewer's reports to arrive at a monetary figure for the cost of completing any incomplete item.
The result was an order that the appellant pay the respondents the sum of $53,117.21 being the Tribunal's assessment of the cost of completing the rectification work.
The Tribunal dismissed the respondents' claim for the costs and fees incurred by them in the original proceedings, although it allowed them to make an application for costs of the renewal proceedings.
The Tribunal dismissed the respondents' claim for lost rent.
[4]
The Appeal
The appellant appeals on four grounds:
1. the Tribunal erred in refusing to allow the appellant to renew its original proceedings;
2. the Tribunal erred in failing to find the completion of the rectification work had been delayed by rain;
3. the Tribunal erred in failing to find the completion of the rectification work had been delayed by the delay in the appointment of a supervisor;
4. the Tribunal erred in its decision as to costing the incomplete work.
[5]
Ground 1
We doubt the correctness of the Tribunal's holding on this point. The consent orders represented a bargain made between the parties under which each gave consideration in exchange for the promises of the other. The consent orders were a settlement of two proceedings in either of which one party or the other may have lost completely or may have gained less than they received under the terms of the consent orders. In that sense, the bargain reached by them and reflected in the agreed consent orders was in each party's favour being a compromise agreement which the parties considered to be preferable to continuing their litigation. In that sense, it seems to us, the orders made were in made in each party's favour.
But we do not need to decide this point given the combined effect of this holding and the doubtful holding of the existence of an estoppel to which we have earlier referred.
The latter holding worked in the appellant's favour, and the combined effect of the two holdings was that the Tribunal limited itself to consideration of the rectification work which was the subject of the consent orders.
There was no dispute that some of the rectification work had not been done. The appellant's position was that the failure to complete that work was not its fault (and is the subject of Grounds 2 and 3). But the appellant's position was, necessarily, that should its appeal be dismissed it would be liable for the cost of completing the rectification work. The appellant was content with this result in that its original claim had been, in substance, offset by the respondents being limited to their claim for the cost of completing the rectification work.
In other words, as a matter of substance, no injustice was done. Accordingly, we dismiss Ground 1.
[6]
Ground 2
The appellant submitted that the Tribunal erred in not being satisfied that rain delayed the roofing works, and in finding that there was no evidence that rain delayed any other external work.
We are prepared to assume that this ground raises a question of law in that the appellant submits (in substance although not in terms) there was evidence that rain delayed work.
The appellant's submissions on this appeal are to the effect that the rain did delay the work, but the submissions are not evidence. The appellant did not identify any evidence given to the Tribunal (contained in a document or contained in the testimony of a witness who could link any rain with delay) that rain did delay the work, and no such evidence is apparent to us. Accordingly, this ground must be dismissed.
[7]
Ground 3
The appellant complains that the Tribunal erred in failing to find the completion of the rectification work had been delayed by the delay in the appointment of a supervisor.
This ground does not raise any question of law that is apparent to us, and so the appellant must seek leave to argue this ground as required by s 80(2)(b) of the NCAT Act.
We are not inclined to grant leave as the appellant has not identified any error, or potential error, in the Tribunal's decision.
The insuperable obstacle faced by the appellant was the finding that there was no evidence that any delay in appointing a supervisor caused any delay in the work. The appellant has not identified any evidence given to the Tribunal which provided any link between the lack of a supervisor and the inability to commence the work. Accordingly, this ground must be dismissed.
[8]
Ground 4
In substance the appellant complains that the Tribunal erred in assessing the costs to complete the rectification work when it had no evidence before it which would entitle it to do so.
The appellant submits that the experts' reports given to the Tribunal did not comply with the Tribunal's procedural direction regarding expert reports, and in particular cl 19 of that direction, and did not address the rectification work (but, rather, the original works).
Clause 19 of NCAT Procedural Direction 3, Expert Evidence, says:
19. An expert's report must, either in the body of the report or in an annexure, include the following:
(a) an acknowledgement that the expert has read the experts' code of conduct and agrees to be bound by it;
(b) the expert's name, address and qualifications as an expert on the issue the subject of the report;
(c) the facts, and assumptions of fact, on which the opinions in the report are based (a letter of instructions may be annexed);
(d) the expert's reasons for each opinion expressed;
(e) if applicable, that a particular issue falls outside the expert's field of expertise;
(f) any literature or other materials used in support of the opinions;
(g) any examinations, tests or other investigations on which the expert has relied, including details of the qualifications of the person who carried them out;
(h) in the case of a report that is lengthy or complex, a brief summary of the report (to be located at the beginning of the report).
No objection to the tender of the reports was taken before the Tribunal, and the appellant should not be permitted to raise this point for the first time on appeal. Had the point been taken before the Tribunal the respondents may have been able to remedy the omission by obtaining the relevant acknowledgements and other matters or sought to be excused from compliance with that Direction pursuant to cl 5. Clause 5 of the Direction says:
The Tribunal may excuse a party or an expert witness from complying with this Procedural Direction before or after the time for compliance.
Further, cl 7 of the Direction provides that non-compliance with the Direction in a case such as the present (being a "non-Evidence Rules Proceedings" as defined) does not render any expert report or evidence inadmissible but may, depending on the circumstances, adversely affect the weight to be attributed to that report or evidence. Thus, there was no error in admitting the reports.
For those reasons Ground 4 is dismissed.
[9]
Orders
We make the following orders:
1. Leave to appeal in relation to Ground 3 refused.
2. The appeal is dismissed.
[10]
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
[11]
Amendments
05 March 2020 - Typographical Error
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Decision last updated: 05 March 2020