Lucien v Mullally

Scope and nature of internal appeals

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

Submissions and evidence

1. In deciding the appeal, we have had regard to the following: 1. The Notice of Appeal lodged on 21 December 2022 and attachments constituting an appeal bundle spanning 2 volumes, including the evidence filed before the Senior Member below; the documents included: 1. NCAT Decision dated 25 November 2021. 2. Transcript of hearing dated 29 April 2021. 3. MBA Lawyers email to NCAT registry dated 28 September 2021. 4. Respondent's application for amendment under the slip rule dated 8 December 2021. 5. A court book at a dropbox link. 6. A hard copy of the appeal bundle. 1. The appellant's written submissions; 2. The respondent's written submissions lodged on 29 March 2022; and 3. The appellant's outline of submissions in reply to the respondent submissions dated 29 March 2022.

Notice of Appeal

1. The Notice of Appeal was lodged on 22 December 2021, which is within the time prescribed by cl 25(3) of the Civil and Administrative Tribunal Rules 2014 (the Rules). The appellant proceeds on the Amended Grounds of Appeal filed and dated 7 March 2022.

Amended Grounds of Appeal

1. Ground 1. The Tribunal erred in finding that the appellant had failed to proceed with the works diligently in breach of the contract as at 5 April 2019, and which was found to justify the respondents termination of the contract in circumstances where: 1. The respondent in the period from 5 April through to 19 April 2019 was herself contributing to the delay by not providing important final items necessary to complete the building works; 2. The Tribunal was not satisfied that the original works were seriously incomplete as of 5 April 2019 (reasons 155); 3. the Tribunal positively found that in the period between 7 December 2018 and 24 April 2019 the appellant had carried out a substantial amount of building work (reasons 151); 4. the Tribunal positively found that as of 5 April 2019 out of a total contract sum of $812,770 the value of works not completed or supplied was $26,963 (reasons 155); 5. by necessary implication, as a percentage of the total work remaining to be completed the Tribunal found that it represented no more than 3.3% and in consequence of which ought to have concluded that the appellant had proceeded diligently with the works from January 2019 until 24 April 2019.
2. Ground 2. The finding that the appellant failed to proceed with the works diligently as at 5 April 2019 was not fair and equitable in circumstances where: 1. the respondent in the period from 5 April through to 19 April 2019 was herself contributing to the delay by not providing important final items necessary to complete the remaining building work. 2. The Tribunal was not satisfied that the original works were seriously incomplete as of 5 April 2019 (reasons 155); 3. the Tribunal positively found that in the period between 7 December 2018 and 24 April 2019 the appellant had carried out a substantial amount of building work (reasons 151); 4. the Tribunal positively found that as of 5 April 2019 out of the total contract sum of 812,770 value of works not completed or supplied was $26,963 (reasons 155); 5. by necessary implication, as a percentage of the total work remaining to be completed the Tribunal found that it represented no more than 3.3% and in consequence of which ought to have concluded that the appellant had proceeded diligently with the works from January 2019 until 24 April 2019.
3. Ground 3. The Tribunal was in error finding that the respondent validly terminated the contract under the general law on 24 April 2019 because the finding was against the weight of evidence in circumstances where: 1. the appellant had not failed to proceed diligently with the building works in the period from 5 April 2019 through to 19 April 2019; 2. the appellant was denied an opportunity to attend to any outstanding defects in the works in the usual manner under the Defects Liability Period provided for in the contract; 3. the Tribunal failed to adequately consider or give any sufficient weight to the evidence that the appellant had carried out a substantial amount of building work in the period between 7 December 2018 and 24 April 2019; 4. in further support of this ground the appellant repeats the particulars set out in grounds 1 and 2 of the notice of appeal
4. Ground 4. It was against the weight of the evidence for the Tribunal to find that in the period from 7 December 2018 to 24 April 2019 any perceived delay in completing the work in the factual circumstances that existed was sufficient to support a factual finding and/ or a positive inference that there had been a lack of due diligence by the appellant in bringing the building work to finality.
5. Ground 5. The Tribunal failed to find that the respondent's conduct caused or contributed to the further delay in the progress of the works because 1. the respondent changed the locks on 16 December 2018, thereby excluding the appellant from the building site; 2. by calling the police to site on 14 December 2018 it necessarily interfered with the progress of the remaining works because there was an impending Christmas shutdown and trades could not be immediately rescheduled and brought back to site; 3. the respondent made a number of changes to the works to be performed and did not provide timely instructions regarding a number of items all of which impacted on the ability of the appellant to complete the works in a timely manner.
6. Ground 6. The Tribunal did not have jurisdiction to hear and determine the respondent's claim in circumstances where the claim exceeded the jurisdictional limit of $500,000 and such claim was never reduced below the statutory threshold such that the tribunal was ceased of jurisdiction. We understand this ground of appeal was not pressed.
7. We note that the notice of appeal does not differentiate between grounds of appeal based on an error of law and grounds of appeal for which the leave of the appeal panel may be required. This will be addressed further below in these reasons.

Reply to Appeal

1. We have had regard to the reply to appeal filed on 17 January 2022. The solicitor for the owner states as follows: "the respondent supports the original orders made by the Tribunal for the reasons given and for other reasons identified in the respondent submissions to the Tribunal regarding the circumstances of termination of the contract."

The appellant's submissions

1. We refer to written submissions and the amended notice of appeal filed on the morning of the hearing. As no objection was raised by the respondent the Appeal Panel granted leave to the appellant to rely on the amended notice of appeal.
2. It was submitted that the "nub" of the appeal is that the Senior Member misdirected himself when he found the owner has established that the builder failed to proceed with the works diligently and was in breach of the contract as at 5 April 2019.
3. It is submitted that the Tribunal failed to have regard to two of the builder's timesheets contained at pp 612 - 614 of the court book and reproduced at pp 832 and 834 of the appeal book. It is submitted that the time sheets establish that the builder's foreman, Mr Tengstrom, was on site between 5 April 2019 through to 19 April 2019, being the relevant or key period, and that the timesheets establish that the builder's site foreman performed work on site for not less than 40 hours per week during the key period. The timesheet also establishes that Mr Archer, also an employee of the builder, remained on site for 40 or so hours during the key period.
4. Having regard to the hours spent on site by the builder's employees or subcontractors, it is submitted that the Senior Member erred when he decided that the builder had not diligently proceeded during the key period because: 1. he failed to consider the builder's timesheet, and 2. if had he had done so the finding that the builder did not proceed diligently would not have been open to the Senior Member.
5. The appellant submits "that if the Tribunal was wrong to conclude that the [appellant] had failed to proceed diligently in the period from 5 April 2019 through to 19 April 2019 "as a matter of law" then the respondent would not be entitled to an award of $50,436.69 for incomplete works and any payments made by the respondent on behalf of the [appellant] amounting to $23,923.90 (decision at #575). If the [appellant] is correct, he would be entitled to judgement (sic) in his favour in the amount of $42,702.94" (see submissions at [3]).

The respondent's submissions

1. In the reply to appeal it is submitted that the premise of Ground 1 is incorrect and that the value of incomplete works, plus works completed by the owner post termination, was found at paragraph 575 of the judgment to be $54,462.70.
2. It is submitted that the appellant requires leave in respect to Grounds 1 - 5 inclusive as the appellant seeks to impugn findings of fact for which the leave of the Appeal Panel is required. It is further submitted that the appellant has failed to provide any submission satisfying cl 12(1) of Schedule 4 of the NCAT Act. In order to grant leave to appeal the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
3. It is submitted that there is no miscarriage of justice or error requiring correction. It is also submitted that the builder's challenge, even if successful would not make any difference to the outcome. This is submitted because the builder did not identify any loss or damage caused by the owner's alleged repudiation of the contract. He did not adduce evidence of loss of profits or establish any other claim for damage flowing from the alleged repudiation re-conduct of the owner. There is therefore no miscarriage of justice or error requiring correction
4. In respect of the sixth ground of appeal, "jurisdiction", the owner's claim as filed was for the amount of $198,819.51. The amount owed by the owner to the builder was found to be $110,889.79 and in light of the claim "as made" the Tribunal clearly had jurisdiction to hear and determine the matter.
5. The owner seeks an order that the builder pay the costs of the owner's appeal as agreed or assessed.

No error of law identified

1. Although six (6) grounds of appeal are set out in the amended notice of appeal, the written submissions do not address or differentiate between the first five grounds of appeal.
2. We note that the first and fifth ground of appeal did not identify an error of law or an error for which the leave of the Appeal Panel is required. The second to fourth grounds of appeal state that the findings were against the weight of evidence. We are satisfied that the first five grounds of appeal are sufficiently similar that in the disposition of this appeal we may proceed on the basis of a singular ground of appeal by considering whether the finding of fact that the builder did not proceed diligently during a critical period was against the weight of evidence. A finding of fact made against the weight of evidence, if found, is an error for which the leave of the Appeal Panel is required.
3. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl. 12(1) of Sch. 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. The decision of the Tribunal under appeal was not fair and equitable; or 2. The decision of the Tribunal under appeal was against the weight of evidence; or 3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
4. At the hearing of the appeal the parties supplemented their written submissions with oral submissions.
5. The appellant's proposition was helpfully reduced to the submissions provided between paragraphs 32 to 34 above. It is submitted that the Tribunal erred in finding that the builder did not complete work diligently during the critical period between 10 and 19 April 2019. Had the Tribunal evaluated the time sheets of Mr Tengstrom, foreman, and Mr Archer, employee, the Tribunal would have come to different conclusion. Had those timesheets been considered, the Tribunal could not have concluded that the builder had repudiated the contract. The failure by the Tribunal to consider the timesheets has resulted in the Tribunal making findings against the weight of evidence.
6. During oral submissions the Appeal Panel enquired of the appellant whether the critical time sheets contained at pp 832 and 834 of the appeal book were brought to the Senior Members' attention. It was conceded that the timesheets were not addressed during argument about whether the builder completed work during the critical notice period. Regardless, the appellant submits that the finding that the builder did not proceed diligently as at 5 April 2019 was not open to the Tribunal.
7. It is submitted that the builder's foreman was on site at the critical time for up to 40 hours per week and that therefore it was not open to the Tribunal to find that the builder had failed to proceed diligently, thereby repudiating the contract.
8. In respect of Ground 1 of the appeal, we are of the view that this ground of appeal must fail. The builder was legally represented. He did not, at first instance, argue that the two time sheets were the critical evidence capable of establishing that the builder addressed all defects in the notice of default during the critical period. A notice of default was served on 5 April 2019 and the builder had 10 days to rectify any defects. The items outstanding were listed at page 510 of the appeal bundle. The evidence was capable of establishing that the only defect that was rectified by the builder in the 10 day period was the rectification of the front door. All other defects that formed the basis of the notice of default remained.
9. The two timesheets now relied upon in support of the appeal demonstrate that, taken at their highest, employees of the builder remained on site during a 10 day period for about 40 hours per week each. The timesheets are not themselves capable of proving that the defects set out in the notice of default were rectified. The owner is required to notify the contractor in writing of any omissions or defects which need to be made good within 10 business days after the expiry of the 13 week contract period. Having given notice of default the owner was entitled to terminate the contract because if the builder failed to remedy the defective work and remove faulty and unsuitable materials, in addition to being entitled to terminate the contract on the ground that the builder was failing to proceed diligently with the work. The time sheets do not establish that the notice of default was invalid.
10. The claim in respect of the time sheets was not made before the Tribunal, and the appellant cannot now raise that claim in the appeal, as a party is bound by the case they ran at first instance and cannot raise matters that were not raised (either deliberately or by inadvertence) at the hearing unless there are the "most exceptional circumstances" (Coulton v Holcombe [1986] HCA 33 at [9]). No such "exceptional circumstances" exist.
11. The builder submits that he carried out a substantial amount of work for the respondent in the period from 14 December 2018 through to the asserted date of termination on 24 April 2019. The fact that the builder carried out work was not disputed. However, the Tribunal arrived at a finding that the builder did not, diligently, carry out the completion of defective work in the ten day period or rectify the critical defects, being the defects under the notice of default. As was enunciated in Hometeam: [169] It might be accepted that the appellant's failure to complete the Works by the date for practical completion might be some evidence of delay (see Westminster Corporation v J Jarvis & Sons Ltd and Another [1970] 1 WLR 637 at 643 per Lord Hodson, at 645 per Viscount Dilhorne). However, whether delay is of itself sufficient to raise an inference or lack of due diligence must depend on the circumstances.
12. At paragraphs [178] to [179] Her Honour Justice McColl stated: 178 There were, in my view, in the context of the Contract, at least two ways the respondent could have established that the appellant had failed to perform the works with due diligence. 179 First she could have proved: (a) the work the appellant was required to carry out under the Contract; as events transpired this included the original contract works and the rectification work;

(b) what, in addition to the contract period, was a reasonable time within which the appellant ought to have executed the original contract works and the rectification work;

(c) that the appellant had failed to execute the work within that reasonable time;

(d) that, to the extent the appellant proffered explanations of why the work had not been executed within that reasonable time, those explanations were unacceptable.

1. The Tribunal concluded that the builder failed to execute the work subject of a notice of default with due diligence. The work the builder was required to perform was not carried out and he did not carry out any further work in the critical ten day period available under the notice. He provided no reasonable explanation other than to rely on an email sent on 16 April 2019 at 8.37am by Mr Tengstrom to the owner and the builder, requesting her to get Sydney Tap to contact her when they received the handle so that he could book in the plumber. The Tribunal concluded this was not sufficient evidence to establish compliance with the notice. We are not persuaded that the Tribunal erred or came to the conclusion that the contract was validly terminated against the weight of evidence.
2. In support of his contention that the appeal was decided against the weight of evidence, the builder submits that the Tribunal failed to take into account the following factors: 1. the works were not seriously incomplete; 2. communications with the respondent about important items such as tap ware and lighting caused delay; 3. the Tribunal failed to take into account that the respondent contributed to the delay; 4. the appellant was making progress in the period from January 2019 until April 2019; 5. the site foreman was in continual contact with the respondent was actively progressing the work; 6. an extension of time was made by the appellant's solicitor; 7. the respondent called the police just before the Christmas shutdown thereby causing delay; 8. the Tribunal having noted that the works were substantially complete failed to adequately consider the builder's removal from site in the period when the default notice was issued on 5 April 2019; 9. the Tribunal placed too great an emphasis on the fact that various requests for extensions of time were not made in accordance with the terms of the contract which distracted the Tribunal from the notion that in the period from 14 December 2018 through to 19 April 2019 a substantial amount of work was carried out.
3. The appellant's grounds of appeal did not isolate specific findings sought to be impugned or how they might demonstrate the Senior Member fell into error by reference to specific evidence, other than the timesheets. We consider that the Senior Member carefully substantiated from page 95 onward how he arrived at the critical finding that the builder failed to remedy the default after he was issued a notice to comply under the contract.
4. In particular the Senior Member decided that the builder did not comply with the owner's request to remedy the default of failing to proceed with the works diligently within 10 business days of 5 April 2019, being the period ending on 19 April 2019 having regard to the definition of "business day" in cl 30 of the general conditions. The reason of this finding was that the only evidence of any further progress with the works was the request made to the owner in the 16 April 2019 email. The Senior Member was satisfied that this request was inadequate to demonstrate that the builder had remedied this defect. He found that the other communications by the builder in this period in the 11 April 2019 email did not constitute any further progress with the works (see paragraph [211] of the decision).
5. No submission has been made why the finding at paragraph [211] was against the weight of evidence. We are satisfied that the Tribunal considered each of the factors set out in subsections (1) to (8) above, but that it was open to the Tribunal, on the balance of probabilities to arrive at the decision that the notice of default was valid, entitling the builder to terminate that contract. The appellant has not persuaded us that the Tribunal's conclusions concerning termination were against the weight of evidence.
6. In respect of (9) above, we are of the view that the extension of time claims are not determinative of whether the work was carried out with due diligence.
7. The Senior Member found that the builder's extension of time claims made on 31 January 2019, 12 March 2019 and 8 April 2019 were not justified except to the extent accepted by the expert, Mr Jamieson. Mr Jamieson rejected all of the extension of time claims save for noting that he would need more information in respect to the claim for rain days and for the front door before he could determine those claims. The Tribunal noted that the builder did not adduce expert evidence to contradict the opinion of Mr Jamieson in respect of the extension of time claims.
8. We are not of the view that the critical findings of the Tribunal that the builder failed to proceed diligently are impugned. The Senior Member reasoned that a reasonable time in which to complete the works was 9 February 2019; the builder failed to execute the works within a reasonable time and the builder's explanation for delay was unacceptable because of the absence of evidence to demonstrate that the various reasons for delay affected the critical path for the performance of work (see Reasons for Decision at 156).
9. We consider that there is no inconsistency in the Tribunal's finding that the builder, while substantially completing the contract work, did nevertheless fail to rectify the defects as set out in the notice of default during the critical period. The Tribunal set out the appellant's evidence at pages 63 to 65 of the decision and found it lacking (paragraph 155). The Tribunal carefully considered the effects of delays at paragraphs 154 and following and concluded that delay was not a significant contributing factor. The appellant does not complain that the Tribunal failed to consider the builder's evidence. It appears to be the gravamen of the appeal that, having considered all of the evidence the Tribunal should have reached different conclusions.
10. To succeed on appeal, the appellant must establish that either: 1. there was no evidence to support the factual finding (an error of law), or 2. the finding was substantially against the weight of the evidence in the sense that the evidence in its totality preponderates so strongly against the conclusion found that it can be said that it was not one a reasonable Tribunal member could have reached (Collins v Urban at [77]).
11. We are satisfied there was evidence to make the factual finding that the appellant did not proceed diligently and we are not satisfied that the finding was substantially against the weight of evidence such that leave to appeal should be granted.
12. Grounds 1 to 5 of the appeal must be dismissed.

Ground 6

1. In respect of Ground 6 of the appeal, the appellant contends that the Tribunal lacked jurisdiction as the respondent claimed more than $500,000 which "exceeds the jurisdictional limit of the Tribunal". The legal basis for this ground of appeal is not developed further in the amended grounds of appeal or the written submissions. The Tribunal's jurisdictional limit is prescribed in the enabling legislation, the Home Building Act 1989. The Tribunal has jurisdiction to hear and determine any building claim brought before it in which the amount claimed does not exceed $500,000 as provided by section 48K of the Act). The amount claimed by the applicant in her application dated 19 December 2019 was for the amount of $127,516. In opening submissions the claim was amended and the respondent sought a money order in the sum of $198,819. The Tribunal ordered the builder to pay $31,660.65 to the owner. None of the amount as pleaded or the amounts ordered by the Tribunal exceed the jurisdictional limit as set out in section 48K of the Act. The Tribunal clearly had jurisdiction to hear and determine the issues.
2. This ground of appeal is dismissed also.

Orders

1. The Appeal Panel makes the following orders: 1. Leave to appeal refused. 2. The appeal is dismissed.

Costs

1. The respondent seeks an order for the costs of the appeal.
2. On the question of costs of the appeal, the Appeal Panel makes the following orders and directions. As the builder was unsuccessful in the appeal, costs should follow the event. 1. The builder is ordered to pay the owner's cost of the appeal as agreed or assessed on the ordinary basis. 2. If the parties do not agree with costs order (1) above, the order ceases to have effect. 3. Any party seeking a different costs order must file and serve submissions on the question of costs within seven (7) days of the publication of these reasons for decision. 4. Any submissions in response must be filed and served within fourteen (14) days of the publication of these reasons for decision. 5. The documents provided to the Tribunal must be identical to those that are provided to the other party, and must be provided in an indexed and paginated bundle contained in a ring binder or similar device.

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: 04 August 2022