J Evers Pty Ltd t/as The Plumbing and Electrical Doctor v Rolt

Tribunal Proceedings and Decision

1. The appellant's claim before the Tribunal was to recover $14,785 from the respondent for work done under the agreement between the parties dated 24 July 2017. The Application described the work as follows: 1. Renew entire sewer system replacing all earthen ware with PVC from bathroom to council main 2. Backfill drain with 10 - 14 gravel 3. Remove all excess spool 4. Level yard to as near condition
2. At the hearing the claim was reduced to $13,185, representing the appellant's initial quotation of $14,650, less a 10% deposit of $1,465 paid by the respondent. The Tribunal dismissed the application. It was accepted by the parties that their 24 July 2017 agreement was a contract for home building work. The Member found that the appellant had breached the warranty contained in s18B(f) of the Home Building Act 1989 (HB Act), which is implied into every contract for home building work.
3. Section 18B(f) of the HB Act provides that: 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 other 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 skill and judgment.
4. The Member found at paragraph 4 of her reasons that: The Tribunal accepts the evidence of Ms Rolt's expert that, on the balance of probabilities, there was a blockage between the vanity/shower recess and the toilet. This blockage could have been cleared without replacement of the entire sewer line.
5. Ms Rolt's expert was Jason William Curry, a licensed plumber, who provided a statement dated 7 November 2017. He said that he had inspected the property on 5 November 2017 and (at paragraph 20 of his Statement) that: On the information given to me and from observations made I would be quite certain the original blockage which Ms ROLT reported was within the DWV (Plastic) pipework which extended from both shower and vanity waste, through the floor waste then into the commencement and the earthenware piping See Annexure 7. I make this judgment due to the fact that the next fixture along the main drain was the toilet and it was not suffering from any blockage issues. See Annexure 7.1. Having this evidence the blockage must have been between the toilet junction and vanity/shower. See Annexure 7.2 & 7.3.
6. Mr Curry stated at paragraph 21 that to attend and unblock the original job he would have charged approximately $200, or $600 if the pipework could not be unblocked and required replacement.
7. The Member then held in paragraph [6] of her reasons that: The Tribunal is satisfied that, whilst there is no evidence of any breach of the warranty implied by s18B(a) (the warranty that the work will be done with due care and skill), there is a breach of the warranty implied by s18B(f). The Tribunal is not satisfied that the replacement of the sewer line was necessary to clear the blockage between the vanity/shower recess and the toilet. The work carried out was unnecessary to achieve the purpose communicated to the Plumbing Doctor, that is, the prevention of the backing up of water in the shower recess and vanity.
8. We will refer to the Member's other findings and the evidence before her when we deal with the appellant's grounds of appeal.

Nature of Internal Appeals

1. Appeals to the Tribunal's Appeal Panel may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s80(2) of the NCAT Act. 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 cl12(1) of Schedule 4 of the NCAT Act.
2. These are that the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: (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).
3. If the appellant can establish that subparagraphs (a), (b) or (c) of cl12(1) in Schedule 4 apply to the decision appeal against, the Appeal Panel must then consider whether it should exercise its discretion to grant leave to appeal: Collins v Urban [2014] NSWCATAP 17.

Submissions and Evidence

1. The following documents had been filed for the appeal: 1. Notice of Appeal 2. Reply to Appeal 3. The appellant's written submissions, which also attached two affidavits and a document headed Specialist Report from Andrew Druvins dated 4 April 2018. The appellant's legal representative foreshadowed that he wished to tender these documents in support of the appeal 4. The respondent's written submissions, which attached a bundle of documents and a statement from Ms Rolt.
2. The Notice of Appeal contained the following grounds: There had been a significant miscarriage of justice. The Applicant was unaware they were able to obtain legal representation to assist with the matter and in particular, to assist with the hearing. The Applicant did not understand or appreciate the importance of supporting their claim with substantive, independent evidence. The Senior Member did not received (sic) a proper explanation and written report detailing the nature of the rectification works and why they were required. As a result the Senior Member erred in its (sic) reasoning that the replacement sewer line was not necessary to clear the blockage between the shower/vanity recess and in other words, that the services provided were unnecessary to achieve the purpose required. The Senior Member does (sic) not have a full, holistic understanding of the rectification works. The Senior Member also erred in determining that the Respondent was not unjustly enriched by the decision and that the maximum amount for quantum meruit would be $800. The Tribunal subsequently determined no further payments towards the Applicant's outstanding invoice of $12,721.70 had to be made.
3. The Reply denied each of these grounds in general terms and added that: 4 The right to legal representation before the Tribunal is published on the NCAT website and the appellant's ignorance of that right is not grounds for the appeal; 5 The appellant failed to submit evidence of the CCTV footage to support the need to replace the sewer line.

Does the Appeal Involve a Question of Law?

1. Although it was not stated expressly in the Notice of Appeal, we asked the appellant's legal representative whether he submitted that any of the appellant's grounds of appeal involved a question of law. We were told that the Member should not have relied on Mr Curry's expert report because Mr Curry had not referred in his statement to the Expert Witness Code of Conduct set out in Schedule 7 to the UCPR, and had not agreed to be bound by it. This constituted an error of law.
2. It was accepted by the appellant's legal representative that there was no challenge to Mr Curry's credentials to give expert evidence as a plumber, nor was there anything in his statement which suggested he had approached the task other than as an independent expert. In other words there was no submission that Mr Curry had not in fact complied with the Expert Code of Conduct, even if he had not said so. Nevertheless the submission was pressed that in accepting and placing weight on Mr Curry's report when he had failed to refer to the Expert Code of Conduct and to agree to be bound by it in his report, and when that report was based on an inspection after the event, constituted an error of law.
3. We do not accept that submission. In Prendergast v Western Irrigation [2014] NSWCATAP 69, the Tribunal's Appeal Panel set out a list of matters which could be considered to amount to errors of law. The only matter from the Prendergast list which might support the submission was that expressed as taking into account an irrelevant consideration, or possibly a challenge to the Member's findings based on that evidence. .
4. The appellant's argument fails to appreciate that the application of the Expert Witness Code of Conduct to NCAT proceedings was at the time of the application and decision under appeal subject to NCAT Procedural Direction 3, effective from 7 February 2014. Under the former NCAT Procedural Direction 3 the Tribunal could excuse an expert witness from complying strictly with its terms, including the requirement for an acknowledgement that the expert agrees to be bound by the code of conduct: the primary concern is that the Tribunal could rely on expert opinion that was soundly based, complete and reliable.
5. In proceedings in the Consumer and Commercial Division where the rules of evidence are not binding, the approach to be adopted to the provision of expert evidence is that stated in Allen v TriCare (Hastings) Ltd [2016] NSWCATAP 216 at [191], namely that the question of the acceptability of expert evidence in the Tribunal will be one of weight not admissibility, and the Tribunal is required to be satisfied that expert evidence provides a satisfactory basis upon which it can make its findings. That is clear from the terms of Mr Curry's report, which of necessity had to be based on an inspection after the work had been completed and the parties were in dispute as to payment. .In these circumstances no error of law arises from the Member relying on Mr Curry's report.

Should Leave to Appeal be Granted?

1. We now consider whether any of the matters raised in the Notice of Appeal constitute grounds for our granting leave to appeal.

The First, Second, and Third Grounds of Appeal

1. It was submitted that the first, second, and third paragraphs of the grounds of appeal, that the appellant had suffered a significant miscarriage of justice because of its lack of understanding or appreciation of the need for independent evidence and because it did not appreciate that it could be legally represented. This had the result that the evidence presented to the Tribunal was not balanced. The appellant's legal representative applied to tender further evidence of the kind that the appellant should have tendered to the Tribunal had it been properly advised.
2. These grounds, it was argued, resulted in the decision not being fair and equitable which is a basis for granting leave to appeal under cl12(1)(a) of Schedule 4 of the NCAT Act. Also the foreshadowed further evidence was described as significant new evidence not reasonably available at the time of the hearing, which under cl12(1)(c) is a further basis for granting leave.
3. We will deal with the new evidence first. This consisted firstly of a report dated 4 April 2018 from Mr Druvins, a licensed plumber and drainer. Mr Druvins had been provided with a statement of relevant events by the appellant and with Mr Curry's report. He came to a conclusion contrary to that reached by Mr Curry. Clause 12(1)(c) of Schedule 4 specifies that new evidence must be significant evidence that was not reasonably available at the time of the hearing before the Tribunal. That is an objective test, and requires that the evidence be unavailable because no person could reasonably have obtained it; a party's incapacity to procure that evidence, or failure to appreciate that it was needed, is not sufficient: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111; Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11. Mr Druvins' report could have been prepared before the proceedings were heard in November 2017. The only reason that it was not available at that time was because the appellant did not appreciate that independent evidence was required.
4. The appellant chose to initiate these proceedings in the Tribunal, and its principals should have been made themselves aware in general terms of the procedure to be adopted. Mr Curry's report was available two weeks before the hearing date, and at the latest, that should have alerted the appellant to the need to obtain a report in response. If this could not be prepared in time, it could have applied for an adjournment of the hearing. The Tribunal's procedures are designed to enable parties in the Consumer and Commercial Division to represent themselves, and most parties do so.
5. In the circumstances we did not accept that there was proper basis to treat Mr Druvins' report as significant new evidence, and we rejected its tender. It followed that Mr Curry's report in response was also not considered by us.
6. The appellant's legal representative also sought to tender affidavits from Sean Cullen and Benjamin Najdecki, both sworn on 11 April 2018. Both deponents stated that they were employees of "The Plumbing Doctor Pty Limited" rather than the appellant. In the face of this defect, the text of the affidavits was not pressed, and only their annexures were relied upon.
7. In the case of Mr Cullen's affidavit, the annexures consisted of extracts from the contract between the parties which were before the Member in the Tribunal hearing. They did not constitute new evidence. Mr Najdecki had given evidence in the Tribunal hearing. His new affidavit, however, annexed photographs showing the trenches dug by the appellant partially filled with sea water, together with a quotation obtained from a subcontractor to carry out dewatering works to the site. None of these documents were before the Tribunal.
8. The appellant's written submissions, but not its Notice of Appeal, had raised this dewatering issue as an additional claim against the respondent. The submission was that the parties had agreed to share the cost of $3,600 for these works equally. However in her decision, the Member had recorded that the appellant was not seeking to recover the dewatering costs. In the circumstances we did not accept the tender of the documents annexed to Mr Najdecki's affidavit as they were not relevant to the matters to be considered in the appeal.
9. We did not allow the tender of Mr Druvins' report on the basis that it could have been prepared before the Tribunal hearing. We also did not accept the appellant's reasons for it not being available at that time. We also did not allow the tender of the annexures to Mr Najdecki's affidavit and Mr Cullen's affidavit annexed only extracts from the contract between the parties. There was no other material before us to justify granting leave to appeal under the first, second or third of the appellant's grounds of appeal, and we are not satisfied that they have been made out.
10. The appellant's apparent failure to appreciate that it could have applied to be legally represented, adds no weight to these grounds. We agree with the respondent's submission that the appellant's principals could have informed themselves from the NCAT website of their entitlement to seek leave for legal representation. Also, if the appellant's representatives were unsure about the Tribunal's procedures, they could have requested advice from a law firm, which presumably would have identified the need for independent evidence, without the need to make a formal application to be legally represented.

The Fourth Ground of Appeal

1. We now turn to the fourth ground, characterised as a submission that the decision was made against the weight of the evidence. Even without an expert report contradicting Mr Curry's conclusion, it was submitted that the Member should have concluded that the replacement of all the sewer pipes was the appropriate response by the appellant to the respondent's plumbing issues.
2. We therefore need to consider the other evidence before the Tribunal. The appellant had submitted a Statement of Relevant Events which appears to have been accepted by the Member. Most of these events are reproduced in paragraph [4] of the Member's reasons. In summary, in March 2017 Ms Rolt's toilet first blocked up. The appellant attended and advised her that a sewer line sleeve at a cost of $8,500 was required to deal with misaligned pipes and tree roots. The respondent declined to proceed with those works.
3. On 19 July 2017 Ms Rolt informed the Appellant that her shower recess and vanity were now blocking up. On 21 July the appellant's employee Mr Carmichael attended and cleared the blockage with a plunger. Then, with the use of a CCTV camera device, he identified tree root intrusion and breaks in her sewer pipes as the cause of the problem. A quote of $14,650 was provided to her for the replacement of the sewer line. This CCTV footage had not been retained for the Tribunal hearing.
4. Ms Rolt accepted the quote, signed a contract form provided to her by the appellant and paid a 10% deposit. The works commenced and the sewer line had been replaced by 8 August 2017, though the dewatering works to which we have referred above, had not been completed. However on 8 August Ms Rolt noticed that the shower recess and vanity were still blocking up. The appellant's workmen again cleared this blockage with a plunger. This work took approximately 2 hours to complete and the problem has not reoccurred. Mr Curry's opinion was that this limited work would have cost between $200 and $600.
5. The Member concluded from these events, supported by Mr Curry's report that the replacement of the sewer pipes was unnecessary to achieve the purpose communicated by Ms Rolt to the appellant, which was to prevent the backing up of water in her shower recess/vanity. It was therefore work which was not reasonably fit for the specified purpose, in breach of the implied warranty contained in s18B(f) of the HB Act.
6. The appellant submitted that the Member should have given far more weight to the evidence of the tree root intrusions and breakages in the sewer pipes, rather than the immediate blockage behind the shower recess/vanity, and come to the view that the only means of achieving a permanent solution to the problem was to replace all the pipes.
7. In our view the Member was justified on the evidence before her, in coming to the view that the work carried out by the appellant was unnecessary to achieve the respondent's purpose. In particular: 1. there was the evidence that the immediate blockages had been removed by the use of a plunger on two occasions; 2. there was no evidence of the actual root intrusion or pipe damage observed by Mr Carmichael on 21 July, either from the CCTV footage or from photographs taken subsequently when the pipes were being replaced; 3. there was no evidence as to when this intrusion and damage had occurred and whether the condition of the pipes was stable or deteriorating; and 4. there was the evidence that Ms Rolt was only presented with the pipe replacement solution, and not presented with what might be described as the simple solution to her problem, that is, clearing the blockage with a plunger, and given the opportunity to elect between them.
8. The contract signed by Ms Rolt does not assist the appellant. It did not contain even a basic description of the scope of works that the appellant proposed to carry out on her behalf, only the contract price. A statement of the scope of works was only received from the appellant on 3 August 2017, following a request from Ms Rolt's son.
9. For leave to be granted on the basis of a substantial miscarriage of justice the appellant would need to demonstrate that it 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 because the decision was against the weight of the evidence, by establishing that 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: Collins v Urban at [77]. There was evidence on which the Member reached her conclusion, and this ground of appeal has also not been established.

The Fifth Ground of Appeal

1. It was submitted that the Member should have held that the respondent was unjustly enriched by the appellant's replacement of all of the pipes, and should have allowed the balance of the contract price on a quantum meruit basis. We understood this also to be a submission that the decision appealed against was not fair and equitable under cl 12.1(a) in Schedule 4.
2. The Member held [at paragraph 7 in her reasons] that: The principles to be considered in respect of a quantum meruit claim have recently been discussed in Bradshaw v Complete Coating Commercial Pty Limited [2017] NSWCATAP 20. In the current matter, the Tribunal is not satisfied that a quantum meruit claim is warranted. The applicant's inability to recover the quoted amount does not arise from a failure to comply with the Home Building Act in respect of licencing, contracting or insurance, but because they have provided services which were unnecessary to achieve the purpose required. In these circumstances the Tribunal is not satisfied that a quantum meruit award is appropriate. The respondent paid $1465 for the job. Her expert estimates that a maximum amount of $800 would have been charged for the required work (we take this to be a reference to Mr Curry's estimate of between $200 and $600).
3. The appellant submitted that the matter resembled the factual situation in Pavey & Matthews v Paul (1997) 162 CLR 221, where the High Court allowed a contractor to recover the cost of its work on a quantum meruit basis, although there was only an oral, and therefore unenforceable, building contract between the parties.
4. There is an important distinction between the position in Pavey & Matthews and in Bradshaw, to which the Member referred in her decision and the situation in this case. In both those cases the contract was unenforceable and the contractors elected to bring restitutionary claims to recover the cost of their work on a quantum meruit basis. In this instance the appellant elected to sue on the contract for the price of the works. It was ultimately not successful because the Member found that the appellant was in breach of the implied warranty in s18B(f) of the HB Act, but the contract nevertheless remained on foot. We understood the Member to be making this distinction when she distinguished Bradshaw on the basis that the matter before her did not involve a failure to comply with the HB Act in relation to licensing, contracting or insurance.
5. There are other circumstances where a contractor can bring a quantum meruit claim. Where the contractor has carried out additional works not covered by the contract works, a quantum meruit claim is available. Similarly, a claim will be available where the building owner has repudiated the contract and the contractor has elected to terminate - that was the situation in Sopov v Kane Constructions [2009] VSCA 216, referred to in Bradshaw.
6. However we are not aware of any authority for the proposition that a contractor can bring a quantum meruit claim in circumstances where it has elected to sue on the contract for the agreed price of the works and has not been successful. Even if this be permissible, the Member had found that the pipe replacement works were not necessary, and was therefore entitled to limit the consideration of any quantum meruit claim to the actual cost to the appellant of unblocking the shower recess/vanity on 8 August 2017. In this respect she correctly noted that the appellant's claim was likely to be less than the deposit of $1,465 already paid by Mrs Rolt, and that this was a further reason not to allow the appellant to recover more than the deposit it had already received.
7. Also, if a broader quantum meruit claim were available to the appellant, there was no evidence before the Tribunal which would have enabled the Member to assess the claim. The Tribunal's Appeal Panel in Bradshaw at paragraph [39] referred to the well accepted proposition that it is not sufficient just to rely on the contract price as evidence of the fair market value when bringing a quantum meruit claim.
8. In Bradshaw at paragraphs [30] and [31], the Appeal Panel, citing Sopov, also set out the evidence that would be required to make out the claim - for example, details of the hours worked and hourly rates, the cost of materials and the profit component claimed. Also important, would be evidence of what a comparable contractor might charge for the same works. None of this material was available to the Member.
9. In this case the appellant also needed to establish that the respondent was unjustly enriched by the appellant's works. This may be self-evident in unenforceable contract quantum meruit claims, but it was not so in this case where the issue was whether or not the work was necessary. Independent evidence of the long term additional benefits to the respondent as a consequence of the pipe replacement works was also lacking.

Our Findings and Exercise of Discretion

1. In summary, no error of law has been established, and we are not satisfied that there has been a substantial miscarriage of justice because none of the grounds requiring leave to appeal have been established. Thus we do not need to consider whether we would have exercised our discretion to grant leave.

ORDERS

1. We make the following orders: 1. J Evers Pty Limited trading as The Plumbing and Electrical Doctor be substituted as the appellant. 2. Leave to appeal refused. 3. Appeal dismissed.

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: 14 June 2018