Menaker v Adambuilt Pty Ltd

Availability of appeal

1. An internal appeal may be brought as of right on a question of law or, with the leave of the Appeal Panel, on other grounds: s 80(2)(b) NCAT Act. As the appeal is brought from a decision of the Consumer and Commercial Division of the Tribunal, by virtue of cl 12(1) of Sch 4 to the NCAT Act leave to appeal may only be granted under s 80(2)(b) 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).
2. In Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarised at [71] and [79] as follows: [71]. . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . [79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result . . . it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred.
3. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).

Extension of time

1. The first issue in the appeal was to clarify which of the decisions in the Consumer and Commercial Division was the subject of the appeal. The Notice of Appeal stated that the appeal was from "HB 18/24908", which was the matter number for the original application made by Mr Menaker. The Notice of Appeal stated that the date the decision was received was "24.10.18", which was the date of the dismissal of the renewal application in HB 18/41731. Mr Menaker confirmed at the appeal hearing that his appeal is from the orders in HB 18/24908.
2. Those orders were made on 3 September 2018, and the Notice of Appeal was lodged on 13 November 2018, outside the period allowed under rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014. Leave may be granted under s 41 of the NCAT Act to extend the time. That application was opposed by the respondent.
3. Mr Menaker stated that he lodged the appeal late because the tiler took almost a month to come, and because he lodged a renewal application on 2 November 2018 and was told that he had to lodge an appeal.
4. Mr Montanari opposed the extension of time, stating that he had adhered to everything he was supposed to do and he did not cause any of the delay.
5. In considering whether to extend the time to lodge the appeal, the Appeal Panel has had regard to the factors identified in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22: 21. Time limits, including the specification of the time within which an appeal from an internally appealable decision to the Appeal Panel of the Tribunal must be lodged, are established by legislation for the purpose of promoting the orderly and efficient conduct of proceedings in the Tribunal, providing certainty for the parties to proceedings, especially the party in whose favour orders have been made, and achieving finality in litigation. For these reasons, these time limits should generally be strictly enforced. That is not to say, however, that exceptions should not be made where the interests of justice so require. The express power in s 41 of the Act to grant extensions of time allows the Tribunal to prevent the rigid enforcement of time limits becoming an instrument of injustice. As the decision in Gallo v Dawson quoted above makes clear, it is generally the case that in order for the power to extend time to be exercised in an appellant's favour there must be material upon which the Appeal Panel can be satisfied that to refuse the application for an extension of time would work an injustice. 22. The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include: (1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant; (2) The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success; (3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a)The length of the delay; (b)The reason for the delay; (c)The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d)The extent of any prejudice suffered by the respondent (to the appeal), and (4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable.
6. The appeal was lodged some six weeks out of time, which is not a short delay. However, during that period Mr Menaker had made the renewal application in HB 18/41731. The Appeal Panel accepts his explanation that he was confused about what he could achieve in the renewal application, and he lodged this appeal within three weeks of the dismissal of that application. The respondent did not identify any prejudice or disadvantage arising from the delay. While for the reasons below the Appeal Panel would regard his case as lacking merit, in the absence of prejudice and in circumstances where Mr Menaker did not unreasonably defer taking action to remedy what he regarded as an unsatisfactory outcome in his original claim, the Appeal Panel is satisfied that it is appropriate to extend the time to lodge the appeal.

The Appeal

1. The Grounds of Appeal as stated by Mr Menaker were: 1. The decision was not fair and equitable, because: 1. The Tribunal allowed the builder to be joined without his consent. The builder and the respondent were not in a contractor/subcontractor relationship and both were employed by him separately. The report by Mr Drexler stated that the defective tiling was the fault of the tiler; and 2. He consented to the agreement under pressure or duress from the respondent and the builder; 1. Significant new evidence has arisen, namely: The terms agreed during the conciliation were not going to fix the problem. On 24 September 2018 three people from the respondent washed the tiles, taking 4.5 hours, and it was a waste of time because the calcium deposits are still there, the grout between the tiles is mouldy, and new calcium deposits are appearing. The respondent is trying to avoid responsibility for defective work by making him wash the floor regularly.
2. Mr Menaker wants the orders changed to orders that Adambuilt Pty Ltd re-tile the balconies; re-tile the skirting; and pay $1,000 for tiles, $500 for the building report, and $240 for a plumber to disconnect and re-connect the water heater.
3. In the Reply to the Appeal Mr Montanari states that the conciliation was attended by him, Mr Menaker, and the builder's representative Mr Nagle. Mr Menaker was not pressured by himself or by the builder, and the conciliator explained the terms in a reasonable manner. In a statement in support of the Reply Mr Montanari states that he was not contracted for the supply or installation of the primary or secondary membranes, which was undertaken by the builder, and he is not responsible for the formation of the efflorescence problem. He relies on a report by Colin Cass of Techtile Consulting Pty Ltd which states that the efflorescence is due to an insufficient or no fall in the waterproofing sheet membrane towards the rain water outlets, and that the efflorescence is not caused by the actions of the tiler. Neither that report nor the report by Dan Drexler recommend that new tiles are installed. He carried out the conditions of the order, attending on 24 September rather than 20 September because of inclement weather. He notes that Mr Menaker has not complied with the orders requiring him to thoroughly hose down the balconies at least once a week.

The Appeal Hearing

1. The Appeal Panel has been provided with a written submission by the appellant, together with photographs of the balcony tiles dated 27 September 2018, 24 October 2018, 26 October 2018, 8-9 November 2018, and 10 December 2018. In his reply submission the appellant provides a copy of a quote by Adambuilt Pty Ltd dated 28 July 2014, tax invoice dated 10 June 2015, and a brochure produced by the Australian Competition and Consumer Commission.
2. The respondent provided a statement by Mr Montanari, and a report by Colin Cass dated 11 May 2018.
3. Both Mr Menaker and Mr Montanari explained to the Appeal Panel what took place at the conciliation where the orders of 3 September 2018 were agreed. The Appeal Panel offered to adjourn the hearing of the appeal to obtain the Divisional file to confirm the signed orders, however Mr Menaker did not consider that necessary.

Consideration

1. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13] the Appeal Panel provided 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.
2. As discussed in Prendergast at [12], in circumstances where the appellant is not legally represented, the Appeal Panel should determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise.
3. The Appeal Panel considers that while framed in the language of cl 12(1)(a), Mr Menaker's first ground of appeal may be asserting a denial of procedural fairness, which would raise a question of law. The second ground appears to fall squarely in cl 12(1)(c) as a basis on which Mr Menaker would be seeking leave to appeal.

Whether there was a denial of procedural fairness

1. Mr Menaker contended that the builder should not have been joined without his consent, and he was not consulted. He was not able to identify any disadvantage to him in having the builder joined, and maintained that the builder had done his job and was not involved.
2. Mr Montanari stated that the builder had been joined to the proceedings at his request, and that there was no disadvantage to Mr Menaker in having the builder as a party.
3. The power of the Tribunal to join a party to proceedings is conferred by s 44 of the NCAT Act, which states that the Tribunal may order that a person be joined as a party "…if the Tribunal considers that the person should be joined as a party". Section 44 is stated in general terms, and does not specify any criteria for the exercise of that power. The Court of Appeal confirmed in Commissioner of Police, New South Wales Police Force v Fine [2014] NSWCA 327 that s 44(1) should be read in conformity with the power of removal conferred by s 44(2), so that a party who is "a proper or necessary party" to the proceedings ought to be joined.
4. While Mr Menaker's complaint was in relation to the tiling work undertaken by Adambuilt Pty Ltd, there was an issue as to whether the defect was attributable to the tiler or to the builder. Joinder of the builder would enable the Tribunal to make orders binding on the builder. The builder was subject to order 4 relating to the cost of any further building inspector's report. The Appeal Panel is satisfied that there was no disadvantage to Mr Menaker in having the builder joined, and that had the matter proceeded to a hearing and determination by the Tribunal, there was an advantage to Mr Menaker in having the builder as a party. While Mr Menaker did not request that the builder be joined, and maintained his opposition to the request by Adambuilt Pty Ltd that it be joined, the decision as to whether the builder was a proper or necessary party to the proceedings was for the Tribunal. There was no error of law in the joinder of the builder.
5. The only possible qualification to that conclusion is in Mr Menaker's assertion that it was the presence of two professionals (the builder and the tiler) that pressured him into agreeing to the terms of the orders made. Mr Menaker told the Appeal Panel that the builder had some influence on him. That is denied by Mr Montanari, who states that the discussion in the conciliation room was reasonable, and the conciliator was coming in and out of the room.
6. The Tribunal's power to make consent orders is conferred by s 59 of the NCAT Act: 59 Powers when proceedings settled (1) The Tribunal may, in any proceedings, make such orders (including an order dismissing the application or appeal that is the subject of the proceedings) as it thinks fit to give effect to any agreed settlement reached by the parties in the proceedings if: (a) the terms of the agreed settlement are in writing, signed by or on behalf of the parties and lodged with the Tribunal, and (b) the Tribunal is satisfied that it would have the power to make a decision in the terms of the agreed settlement or in terms that are consistent with the terms of the agreed settlement. (2) The Tribunal may dismiss the application or appeal that is the subject of the proceedings if it is not satisfied that it would have the power to make a decision in the terms of the agreed settlement or in terms consistent with the terms of the agreed settlement.
7. Rule 37 of the Rules also requires the Tribunal, in deciding whether to give effect to a settlement, to take into account the interests of a "vulnerable person" as that term is defined, namely a person who is totally or partially incapable of representing themself in proceedings before the Tribunal because of a disability. There is no indication that Mr Menaker is such a person.
8. The principles applicable to setting aside a consent order were outlined by an Appeal Panel in McDonald v McDonald [2016] NSWCATAP 252: 59. A review of the authorities dealing with when a consent order can be set aside can be found in the recent Appeal Panel cases of Prenc v Stojcevski [2016] NSWCATAP 244 at [43]-[45], [53]-[57] and Yuen v Thom [2016] NSWCATAP 243 at [36]-[54]. From those cases, the following principles can be discerned (omitting authorities): (1) At common law, a consent order may be set aside on the same basis as the underlying agreement may be set aside; (2) Whether the agreement constituting the compromise can be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence and the like; (3) In order to set aside a consent order on one of the above bases, it must be possible to point to some contumelious conduct on behalf of the respondent for instance: (a) with respect to duress, it must be shown that illegitimate pressure was placed on the appellant such that there was no reasonable alternative but for her to submit; (b) with respect to undue influence, not only must there be a source of power to deprive the other person of free and voluntary consent, but it must be shown that the agreement was the result of the actual influence; (4) With respect to mistake: (i) the misapprehension must arise in relation to a fact, law or circumstances that affects the substance of an obligation or the mistaken party's motives for entering into the contract; (ii) a common mistake arises when the mistaken belief is held by both parties; (iii) a unilateral mistake is where one party is mistaken but where there are no other vitiating circumstances, such as misleading or deceptive conduct, fraud or misrepresentation, a unilateral mistake will not generally constitute a basis for setting aside an agreement unless the mistake is a serious mistake in relation to a fundamental term of the agreement and the other party knew of, or contributed to, the mistake. (5) With respect to other doctrines which may be applicable, such as unconscionable dealing, it must be shown that one party to the transaction was at a special disadvantage in dealing with the other party because of illness, ignorance, inexperience, impaired faculties, financial need or other circumstances that affect their ability to conserve their own interests, and the other party takes unconscientious advantage of the opportunity. It must be emphasised that the disadvantage must be "special" to disavow any suggestion that the principle applies whenever there is some inequality of bargaining power between the parties. What must be present is some disabling condition or circumstance which seriously affects the ability of the innocent party to make a judgment in their own interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party. (6) There may be other factors which arise such as non est factum which defence would arise in very limited circumstances to persons who, through circumstances such as blindness or illiteracy, are unable to have any understanding of the meaning of the document evidencing the agreement and who signed it in the belief it was radically different to what was in fact signed.
9. Section 59(1) requires both that there be an agreed settlement, and that the Tribunal be satisfied that it would have the power to make a decision in the terms of that agreed settlement.
10. The orders made on 3 September 2018 were within the range of orders which the Tribunal is empowered to make under s 48O of the Home Building Act 1989. Mr Menaker acknowledges that he consented to the agreement: his issue is with his understanding of his right to renew the proceedings within two years. Mr Menaker states that he did not understand that the order concerning renewal meant he could only take the parties back to the Tribunal if the work order was not complied with, rather than that he retained the right to have the Tribunal determine his claim as set out in the original application.
11. There is no evidence in the form of any sound recording or transcript as to what occurred when the Member made the orders reflecting the conciliated agreement. Those orders clearly state that they are made in full and final settlement of the matters raised in the application. There is no evidence of illegitimate pressure having been placed on Mr Menaker such that he had no alternative but to agree, as discussed in McDonald. If Mr Menaker's misunderstanding as to what the right to renew the proceedings meant was a mistake, in the sense discussed in McDonald, there is no evidence of misleading or deceptive conduct, fraud or misrepresentation, or that either the respondent or the builder knew of or contributed to the mistake. There was no special disadvantage in the sense discussed in McDonald. What occurred was that Mr Menaker decided after the first cleaning that the approach to dealing with the efflorescence issue, which required action both by the tiler and by himself to hose the area at least once a week, would not work.
12. The Appeal Panel is not persuaded that there has been demonstrated any denial of procedural fairness. Mr Menaker obtained orders that Adambuilt Pty Ltd carry out work intended to remedy the efflorescence problem. That he is now dissatisfied with the approach reflected in those orders is not a sufficient basis on which those orders could be set aside.

Whether there is significant new evidence

1. Mr Menaker contends that after the cleaning of the tiles on 24 September 2018 it was obvious that that approach was not going to work. The new evidence on which he wishes to have leave to rely is the photographs taken in September, October, November and December 2018.
2. For Mr Menaker to be granted leave to rely on that evidence he would need to establish that that evidence was not reasonably available at the time the orders were made. That is an objective test, and requires that the evidence be unavailable because no person could reasonably have obtained it: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. The photographs post-date the date of the orders, and are relied upon by Mr Menaker to establish that the orders should be changed. However, even if cl 12(1)(c) is met, to grant leave to appeal would require that the Appeal Panel be satisfied that Mr Menaker may have suffered a substantial miscarriage of justice. As discussed in Collins v Urban at [71], that "…refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred". At [76] the Appeal Panel in Collins v Urban concluded that it is necessary for an appellant to establish that there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved if the fresh evidence under para (c) had been before the Tribunal at first instance.
3. The difficulty for Mr Menaker is that there was no determination by the Tribunal of the question of whether remedying the problem required, as Mr Menaker contended relying on Mr Drexler's report, that the balconies be retiled, or whether it could be managed by regular cleaning over a period of time both by the tiler and by Mr Menaker, as Adambuilt Pty Ltd contended relying on Mr Cass' report. Mr Menaker agreed to orders reflecting the latter approach. The Appeal Panel is not satisfied that he has established that having engaged in only a limited implementation of that approach he can be said to have suffered a substantial miscarriage of justice because he does not now think that it will work.
4. Clause 12(1)(c) is not met, and leave to appeal should be refused. That conclusion makes it unnecessary to consider whether leave should be granted having regard to the factors discussed in Collins v Urban at [84].

Orders

1. The Appeal Panel notes that under rule 29(b) of the Civil and Administrative Tribunal Rules, as a party to the proceedings below the builder, Globe Abode Projects Pty Ltd, is a party to the appeal. The builder was not named in the Notice of Appeal as a respondent, and it appears no notice of the appeal has been given to the builder. However, given the outcome on the substantive issues in the appeal there would be no disadvantage to the builder in not having participated in the appeal.
2. The orders of the Appeal Panel are: 1. The time to lodge the appeal is extended to 13 November 2018. 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 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: 06 May 2019