Mick Fabar Constructions Pty Ltd v Robert Symes & Kim Louise Filmer

Issue 1: Work Order

1. The Tribunal Member concluded that the Appellant breached the contract by failing to embed the water tanks in compliance with the manufacturer's installation instructions. As a result, there was a failure to comply with clause 1(b)(i) of the contract. There was also an associated issue raised, namely whether drainage from the tanks was adequate. In this respect, the Appellant's expert, Mr Broune provided evidence, and the Respondents' expert, namely Mr Percy, provided conflicting expert testimony. Having considered the evidence, the Tribunal Member, for reasons stated in the decision found that, by failing to allow adequate drainage from the area behind the water tanks, the builder breached the provisions of the contract and in particular clauses 1(c)(i)(a) and (c).
2. Pursuant to s 48O(1)(c) of the Act, the Appellant sought an order to enable it to attend to the rectification of the defects. The Tribunal Member noted that the making of such an order is discretionary. The Tribunal Member considered the competing submissions in favour of making an order raised by the Appellant, and the arguments against the making of an order, and then concluded that it was not appropriate to make a work order. The Tribunal Member reached such conclusion taking into consideration the inability of the parties to co-operate and the fact that the making of such an order was likely to be productive of further disputation.
3. The Appellant submits that the Tribunal Member erred in declining to make a work order because of the parties' anticipated failure to co-operate. The Appellant submits that the Tribunal Member took into account irrelevant considerations, namely the fact that the Respondents had commenced a renewal application in respect of a work order; the fact that the parties had been engaged in litigation; the existence of animosity between the parties; the fact that there had been a previous order made.
4. With regard to the renewal application, the Appellant submits that no finding on liability has yet been determined with respect to such application: the existence of the renewal application merely suggests, at its highest, that the work performed to date by the builder pursuant to an existing order has not been carried out satisfactorily. However, the Appellant submits that it may be found to have been blameless of any wrongdoing under the order for which complaint is made in the renewal application.
5. As to the finding that the parties had shown a preparedness to engage in lengthy litigation, the Appellant submits that there is no basis for suggesting that it was responsible for unreasonably engaging in lengthy litigation. The Appellant submits that unless it was shown to have been unreasonable, this is an irrelevant consideration in the exercise of the Tribunal's discretion.
6. As to the animosity which the Tribunal Member existed between the Appellant and the Respondents, the mere fact that the renewal proceedings have been instituted establishes no liability on the part of the Appellant, and such consideration is irrelevant in the exercise of the Tribunal's discretion. Accordingly, the essential issues raised related to the work order at the hearing can be summarised as follows:- 1. An error of law resulted from the Tribunal taking into consideration the renewal application; 2. The merits of the renewal application were irrelevant, and the fact that the Tribunal took such matter into account constituted an error of law; 3. There was a denial of procedural fairness to the Appellant, who was not afforded any opportunity to address in evidence or submissions, the circumstances surrounding the renewal application; and 4. How such is seen as the basis for a finding of animosity between the parties and their willingness to engage in lengthy litigation.
7. Since the question of whether a work order should be made is a discrete issue, the Appeal Panel will state its finding before proceeding to deal with the other principal issue raised at the hearing.
8. It is obvious that the extracts from the decision relied upon by the Appellant do not reflect the full reasons why the Tribunal Member declined to make the work order. The Tribunal Member had referred to the extensive litigation which had been on foot over several years. A letter before the Tribunal Member recorded that practical completion was achieved on 9 April 2009 subject to defects and unfinished work. The defect rectification period extended to at least 16 February 2010. Whilst the Tribunal Member noted that the Appellant claimed that he was not asked to return to the site by the Respondents, the Tribunal Member found that "for a period of approximately 11 months, the builder was free to attend at the premises to attend to defect rectification": see Decision at [154].
9. The Tribunal Member further found that the Appellant had ample time to return to the site to attend to defect rectification and that there was no evidence to show that the Respondents' actions prevented the builder from attending to rectification work.
10. The question of whether a work order should be made was considered by the Tribunal Member at considerable length. The Tribunal Member took into account the fact that there had been a Tribunal sponsored mediation on 24 July 2013, and that the Appellant agreed to a work order which required the Appellant to attend to certain items. However, a new dispute has now been caused by the renewal application.
11. The Tribunal Member took into account the submissions of the builder, noting as follows:- "The builder submits that I should not make assumptions against making a work order in these proceedings based on the renewal proceedings."
12. The Tribunal Member also took into account the following submission of the builder:- "The builder has submitted that the conduct of the owner should be taken into account in my consideration of making a work order."
13. The builder's submissions on this issue were considered by the Tribunal Member, who was entitled to exercise his discretion in determining whether a work order would be "an appropriate means of bringing finality to a dispute between the owner and builder". The Tribunal Member then continued to observe the animosity that had been generated between the parties, noting the lengthy litigation, and the fact that a work order would require co-operation of the parties, which he found to be lacking. The Tribunal Member said: "The discretion given to me to order a work order is in my view to be exercised when that would be an appropriate means of bringing finality to a dispute between owner and builder. When there is a degree of animosity between the parties, evidenced in this case by their preparedness to engage in lengthy litigation, and renewal proceedings connected with prior work orders, one of the requirements for a successful work order, which in my view is the ability of the parties to co-operate to some degree to allow the successful completion of the work, is lacking. Having regard to what I see as the parties inability to co-operate and to the fact that previous work orders in these proceedings have not finally resolved disputes and since the making of a work order has a reasonable probability of producing further disputation, rather than bringing about finality to disputed items, I have decided not to make a work order."
14. In its submissions, the Appellant states that "the sole reason given for refusing the work order was the existence of the renewal application brought by the Respondents in relation to the previous work order…". This statement simply ignores the other considerations which the Tribunal Member took into account. In his decision, the Tribunal Member considered the long history that had existed between the Appellant and the Respondent arising out of the contract for the construction of the dwelling. In particular, he found that whilst practical completion was achieved on 9 April 2009, there were defects and unfinished work; that the defect period continued until 16 February 2010; that the Appellant had, for a period of 11 months, not attended at the site to attend to rectification; that the mediation had taken place on 24 July 2013, and that even though a work order was then made by consent, there were ongoing issues between the parties leading to a renewal application. The Tribunal Member did not attempt to attribute blame to either party in respect of the renewal application; rather, his attention rested on the fact that such an application had been made.
15. In addition, the ongoing litigation had resulted in a hearing before the Tribunal. Taking into account these matters, they obviously form the basis of his conclusions that co-operation between the parties in the future was unlikely, taking into account the past history of the matter.
16. Secondly, it is apparent that, contrary to the submissions made, namely that the Tribunal took into account the merits of the renewal application, there is no basis for such assertion.
17. The Appellant also submits that the failure to give reasons constitutes an error of law. However, the fact is that the Tribunal Member did give clear reasons for his decision not to grant a work order in respect of the outstanding defective building work.
18. Next, in respect of the submission made that the builder was not given an opportunity to make submissions concerning the renewal application and why they should not be seen as the basis for a finding of animosity and their willingness to engage in lengthy litigation, the Tribunal Member took into account the submissions made by the builder as set out above.
19. To challenge successfully the exercise of discretion, it must be shown that there has been a fundamental error in the exercise of that discretion: see House v R [1936] 55 CLR 499, 44 at 74-75. No such error exists in the present circumstances. The Appeal Panel acknowledges that the mere fact of a renewal application made by the Respondents does not establish that there has been defective work carried out under the order, as this matter is yet to be determined. Nevertheless, the fact that a renewal application was made indicates that there is at least a dispute concerning the work performed by the Appellant under the order. The facts show that irrespective of the renewal application, the parties had a long history of litigation, and, as indicated above, there was clear animosity between the parties. The Appeal Panel infers from the making of the order that the Tribunal Member was motivated to ensure that the opportunity for ongoing disputation be minimised. The making of a work order was clearly considered to be productive by the Tribunal Member of yet further litigation.
20. The Tribunal Member's finding is clear from his following statement:- "While I have not assumed that any work performed by the Builder under a work order would be unsatisfactory, I have had regard to the possibility that making a work order would have the potential, in these proceedings, to lead to further disputation between the parties which in my view would be undesirable, costly, and counter-productive."
21. Accordingly, we reject the contention that the fact of the making of a renewal application was an irrelevant consideration. Similarly, we conclude that the Tribunal Member was entitled to take into consideration the animosity between the parties which was patent.
22. For the above reasons, we reject the contention that the refusal to make the work order constitutes an error of law because of the Tribunal Member's considerations.

Issue 2: Water tanks and rectification

1. The Appellant's expert, Mr Percy, disagreed with the Respondents' expert, Mr Broune, concerning the rectification method for the water tanks. The Tribunal Member considered the matters raised by both experts and by Mr Finnane, and found that a retaining wall should be constructed in consequence of the builder's breach of contract. The Tribunal Member allowed an amount of $31,836 for this sum.

Appellant's submission

1. The Appellant submits that the Tribunal Member erred in finding that the method of rectification proposed was necessary and reasonable and for ordering compensation to carry out the work method, which the Tribunal Member considered was justified.
2. In support of this submission, the Appellant submits that the Tribunal Member failed to give adequate reasons; and that the evidence of Mr Broune was to the effect that a thrust block was potentially required to be built in rock which would constitute a more difficult method of rectification than that proposed by the Appellant.
3. The Appellant submits that Mr Broune's method may prove to be an unworkable solution, that the thrust block design was unworkable and required redesign; and that Mr Broune's method potentially required the use of jackhammers or similar excavation. Further, that there was no evidence as to the cost of the rectification proposed.
4. Mr Finnane provided an alternative and much more conservative rectification method. The Appellant submits that Mr Finnane's evidence was ignored. The Appellant submits that the Respondents bore the onus of proving its case and that the cost of rectification of the tank issue needed to be proved, including its costing. Its failure to do so constitutes an error of law.
5. The Appellant submits that the Tribunal Member ignored a document which came known to be Exhibit K. Exhibit K comprised a document which resulted from a conclave between Mr Roe and Mr Broune, and in fact, no mention whatsoever was made of Mr Roe's testimony.

Water tank rectification: findings

1. The Tribunal Member considered extensively issues concerning the excavation of the water tank area, the ground embedment and water tank area drainage.
2. With regard to embedment, the Tribunal Member considered the competing expert opinions relating to the requisite rectification required following the finding that the water tanks were embedded in the ground deeper than the maximum specified by the manufacturer. Evidence of Mr Broune, expert for the Respondents, was that the tanks had been embedded up to 0.45 metres deeper than the depth specified by the manufacturer. The consequence was that the tanks were likely to be damaged by collapse, when horizontal loads of retained earth were placed upon the tank when empty.
3. The Tribunal Member considered the evidence adduced by the Appellant, stating that he preferred the evidence of Mr Broune, finding that the Appellant's evidence lacked precision. The Tribunal Member also considered the evidence of the Appellant's expert, Mr Percy, before concluding that Mr Broune's evidence was to be preferred.
4. The Tribunal Member found that the breach of contract lay in the fact that the Appellant had failed to excavate ground in readiness for the tanks in accordance with the relevant provision of the BCA. The Tribunal Member considered the Appellant's proposed method of rectification option of re-grading the batter of the slope behind the water tanks. The Tribunal Member rejected such solution, stating that it "goes beyond making the work conform to the contract and in effect delivers a solution which is different to the contractual requirement".
5. For these reasons, the Tribunal Member said:- "I have come to the conclusion that the owners' rectification methodology will produce a result that will comply with the contract. I also find that the owners' rectification methodology is not unreasonable, in the sense of not being an exceptional rectification solution."
6. It is to be observed at the outset that Mr Finnane and Mr Percy were building experts but that they were not structural engineers. The only structural engineers who were concerned in the proceedings were Mr Broune and Mr Roe. Mr Roe, following a conclave with Mr Broune, agreed to the rectification method proposed by Mr Broune, including the retaining wall. Mr Percy also accepted that a retaining wall was necessary if the tanks remain in their current location. Although Mr Percy had proposed moving the water tanks 2 metres east, it was not until the hearing in October 2013 that this proposal came to the attention of Mr Roe, the appellant's structural engineer. Mr Roe was asked, during the hearing, to consider the feasibility of Mr Percy's proposal and Mr Roe proposed moving the tanks 3 metres east and raising them 450mm. The Tribunal ordered Mr Broune and Mr Roe to confer and prepare a joint opinion setting out the advantages and disadvantages of the Percy/Roe proposal compared to the Broune proposal (the second conclave).
7. The transcript records Mr Broune relevantly stating to the Tribunal: "…Mr Roe and I very quickly worked out that we were in agreement about most, of all of the aspects so we slightly modified for form (sic) of the document to just be a list of advantages and disadvantages in each case." (see transcript p1370 joint tender bundle).
8. Exhibit K represents the joint findings of Mr Roe and Mr Broune. At no stage did Mr Roe prepare an outline of costs for his proposed method. Whilst the Appellant submits that there was no opportunity for Mr Roes' proposal to be properly costed, the issue of costing was raised during his oral evidence and he declined to give an opinion on costs.
9. Importantly, nor did Mr Roe resile from the position adopted at the first conclave, that he agreed with the method of rectification proposed by Mr Broune. Mr Broune prepared an extensive report on the issue concerning the tanks, and of his method for ensuring appropriate rectification. Significantly the homeowner also costed the method proposed by Mr Broune.
10. The document (Exhibit K) was provided to the Tribunal Member. Amongst the advantages that were agreed between Mr Roe and Mr Broune was the fact that Mr Broune's method did not require the tanks to be moved from their existing situation; they were not visually prominent, and there would be no need to modify the plumbing and electrics already installed. The disadvantages involved removal of decking, difficulty of access, temporary support being required, and manual labour being engaged and excavation by hand.
11. The alternative proposed by the Appellant would not require deck removal, temporary support, complex concrete footings and walls and would involve fewer building trades. However, the disadvantages were also nominated, namely difficulty of access to carry out the necessary excavation for the removal of the tanks, the risk of damaging the tanks (although this was considered to be minor to moderate), the tanks would be visually prominent and there would be the need to relocate plumbing and electrics.
12. Other issues were also referred to in Exhibit K. However, the significant of Exhibit K is that both Mr Roe and Mr Broune agreed upon the advantages and disadvantages of each alternative method considered, leaving it to the Tribunal Member to weigh out the attributes of these methods. The tanks were located beneath the deck and were effectively hidden from view whereas the method proposed by the builder would have resulted in the tanks becoming visually prominent in land, which the photographs demonstrated to be of scenic beauty. The additional evidence given by Mr Roe did not reframe the question to be determined by the Tribunal. Mr Roe's evidence arose because he was asked to comment on the Percy method of relocation. The competing views of Mr Broune and Mr Percy were the views that required determination by the Tribunal. Exhibit K setting out advantages and disadvantages, was available to the Tribunal for its consideration upon the question as to the most appropriate method to be adopted for the rectification of the water tank issue.
13. The decision of the Tribunal Member records his careful deliberation concerning the competing views. In his decision, he concluded that the appropriate method of rectification was proposed by Mr Broune and that damages would be calculated on the basis that this method was one which would result in the building works being carried out to conform with the contract. The Tribunal Member also considered the builder's rectification method and specifically rejected it for the reasons stated in the decision. Significantly, Mr Roe did not suggest that the method proposed by Mr Broune was impractical.
14. It is correct that the Tribunal Member did not refer to Mr Roe's evidence nor to Exhibit K. However, following the first conclave, there was unanimity between those two experts, and the reference to Mr Roe would have added nothing to support the Tribunal Member's conclusions. It is not the case that Mr Roe disputed the method proposed by Mr Broune: he merely lists the advantages and disadvantages of each method. Whilst it may have been appropriate for the Tribunal Member to have referred to Mr Roe, we are not satisfied in the circumstances, that the omission to do so, adversely impacts upon the decision.
15. Whilst the appellant submits that because the evidence had closed there was no opportunity to obtain a report from Mr Roe, Exhibit K, which was formulated after he provided his testimony, represents the embodiment of his opinion. The Roe evidence is referred to only cursorily in the builder's submissions to the Tribunal Member (see appeal bundle p.1569). At its highest the submissions state "both experts agree in Exhibit K that the moving of the tanks is a simpler solution." The builder in submissions seeks to explain why it was unable to obtain a written expert opinion from Mr Roe and concedes the evidence was "somewhat on the run". This was not the subject of an adjournment or other application to adduce fresh evidence. The fact remains that the Roe method of relocation, only different from the Percy method in minor respects, was not costed. The import that the appellant now seeks to attribute to Mr Roe' evidence is not apparent from the transcript nor from the submissions nor from the general conduct of the case below. The contest remains, as stated elsewhere in these reasons, between relocation of the tanks or their repair in situ and these were the issues determined by the Tribunal.
16. It is therefore clear that whilst the Tribunal Member may not have referred to Mr Roe by name in its decision, the Tribunal Member did consider the alternative methods proposed by that expert, namely the relocation of the tanks and rejected it. Accordingly, we find that there is no error as claimed.
17. Quite apart from our finding above, relating to the omission of Mr Roe's name from the reasons for decision, it makes no difference to the ultimate question for determination of this appeal namely whether there has been a substantial miscarriage of justice within the meaning of Collins v Urban [2014] NSWCATAP 17 and for the three grounds specified in cl 12 of Schedule 4 of the Act. The Appeal Panel's discretion to grant leave to appeal is not enlivened.

Were the reasons adequate?

1. The Appellant claims that the Tribunal failed to give adequate reasons for the rejection of the evidence of Mr Roe. In respect of decisions provided by the Administrative Decisions Tribunal, it has been held that adequate reasons for a decision must be provided: see Sydney Supermarkets Pty Ltd v Xu [2009] NSWADTAP 28 at [56]-[60]. The same requirements exist in this Tribunal: see Collins v Urban [2014] NSWCATAP 17 at [53]-[56].
2. However, as was stated in Collins v Urban at [57], the content and detail of the reasons for decision "will vary according to the nature of the jurisdiction which the body in question is exercising, and the particular matter the subject of the decision - Wainohu v The State of New South Wales (2011) 243 LR 181 at [56] per French CJ and Kiefel J."
3. Ultimately, it is a matter for the Appeal Panel to determine whether the Tribunal Member has provided adequate reasons.
4. The Appeal Panel finds, contrary to the assertions that the Tribunal Member has explained in his reasons, his selection of the expert opinion of Mr Broune. A plain reading of the decision demonstrates the Tribunal Member's consideration of these matters.
5. The decision of a Tribunal is not one which should be construed minutely and finely with an eye keenly attuned to the perceptions of error: Polites v Commissioner of Taxation (Cth) (1988) 16 ALD 707 at 708, see Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287 (Full Federal Court). Whilst such observations were made in relation to decisions of a Federal Tribunal, there is no reason why such observations should not be applied to the decisions of a Tribunal Member, especially taking into consideration the objective of the creation of the Tribunal, namely to administer quick, cheap and effective justice.
6. Accordingly, the Appeal Panel concludes that there is no error or unfairness as claimed and no substantial miscarriage of justice

Orders

1. The Tribunal orders that: 1. The application for leave be dismissed. 2. The appeal be dismissed. 3. Each party pay its own costs of the appeal, unless, within 21 days, either party makes an application for a different order, in which event the costs will be reserved. 4. In the event that either party seeks an order as to costs in its favour, the following is to apply: 1. The party of such application is to file a short submission of no more than three pages stating why costs should be paid by the other party. A party claiming costs shall file and serve submissions in support of such claim within 7 days of the making of these orders. 2. Each party is to respond, in no more than three pages, to any application for costs within 7 days of receipt of the other party's application. 3. The Appeal Panel will then determine the issue of costs on the papers. 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

Amendments 26 June 2015 - file number 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: 26 June 2015