Murnane Carpentry Pty Ltd v Kalinovski

Nature of the Appeal

1. The Act sets out the basis upon which appeals from decisions of the Consumer and Commercial Division of the Tribunal can be made. Under s80 of the Act an appeal may be made as of right on any question of law (s80(2)(b)), or with leave of the Appeal Panel on any other grounds (s80(2)(b)).
2. In the Notice of Appeal the appellant does not identify any of the grounds of appeal as constituting a question of law. In fact the appellant states that it is asking for leave to appeal, the decision being appealed from being not fair and equitable, and against the weight of the evidence.
3. The Appeal Panel in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 considered the requirements for establishing an "error of law" giving rise to an appeal as of right. The Appeal Panel stated at [12] that in circumstances where an appellant is not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally, and that it is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent.
4. Without expressing exhaustively possible questions of law, the Appeal Panel in Prendergast referred at [13] to the following as constituting errors 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 has been applied. 4. Whether there was a failure to afford procedural fairness. 5. Whether the Tribunal failed to take into account a relevant (mandatory) consideration. 6. Whether the Tribunal took into account an irrelevant consideration. 7. Whether there was no evidence to support a finding of fact. 8. Whether the decision was so unreasonable that no reasonable decision-maker would have made it.
5. In this context we note that s.62 of the Act provides that: 1. The Tribunal (including when constituted as an Appeal Panel) is to ensure that each party to proceedings is given notice of any decision that it makes in the proceedings. 2. Any party may, within 28 days of being given notice of a decision of the Tribunal, request the Tribunal to provide a written statement of reasons for its decision if a written statement of reasons has not already been provided to the party. The statement must be provided within 28 days after the request is made. 3. A written statement of reasons for the purposes of this section must set out the following: 1. the findings on material questions of fact, referring to the evidence or other material on which those findings were based, 2. the Tribunal's understanding of the applicable law, 3. the reasoning processes that lead the Tribunal to the conclusions it made.
6. In our view a failure by a Tribunal to comply with s.62(3) will constitute a failure to provide proper reasons, and thus be an error of law for the purposes of s.80 of the Act. Regrettably we have come to the conclusion that in this instance there was such an error.
7. This dispute involved the provision of carpentry services. We have noted above that the ground of appeal 1(c) states that the member constituting the Tribunal below failed properly to take into account the evidence of the appellant and its expert Carl Le Breton that defective works had already been undertaken prior to the appellant's works, and that the appellant's works were undertaken only in an attempt to minimize the damage suffered by the respondent as a result of those defective works.
8. This is amplified at paragraph [9] of the appellant's submissions of 17 November 24. There the appellant's solicitors state that Mr Murnane, the director of the appellant, was a friend of the respondent, and first attended the respondent's home following multiple requests by the respondent, as the respondent's then contractors had carried out defective works and substantial rectification works were now required. The defective works were extensive and Mr Murnane made a list of approximately 50 defects. He was reluctant to carry out any of the works because of the extensive nature of the defects, but eventually agreed to carry out rectification works for the respondent only because he felt sorry for the respondent and as a result of their existing friendship. The appellant submits that agreed works were carried out on the instructions of the respondent and/or his architect. The appellant provided services on the basis it would be paid for those services on an hourly rate. The appellant submits that the respondent did not raise any objection to the works carried out by the appellant until such time as the appellant demanded payment of a tax invoice which had been outstanding for more than six months.
9. In its reasons for decision of 12 August 2014, the Tribunal below makes no mention of fundamental facts such as the ambit and the content of the obligations undertaken by the appellant. The first step in the decision-making process of the Tribunal should have been to make findings of fact as to the terms of the contract between the appellant and the respondent. It appears that the appellant was in fact correcting the mistakes of other contractors. In our view it was necessary for the Tribunal to make clear findings as to the work that was undertaken by those other contractors, and then to make clear findings as to the work required to be undertaken by the appellant. Only once those findings were made would the Tribunal be in a position to determine whether or not there had been a breach of the terms of the appellant's obligations and any resultant damages. The Tribunal refers at length in its reasons to the failure of the appellant's expert to attend a meeting with the respondent's expert for the purpose of narrowing issues in dispute and to compile a joint Scott Schedule. Nonetheless, it decided to proceed with the hearing and, once it did so, was obliged to make the findings and give the reasons, required by s.62. With all due respect, it failed to do this, and this was an error of law.
10. As a consequence, we have reached the conclusion that the appeal should be upheld and there should be a rehearing of the matter at first instance. In the circumstances we consider that the appropriate course is to set aside the decision of the Tribunal and to remit the matter to a differently constituted Tribunal for rehearing. A directions hearing should be held to deal with issues of the evidence to be relied on at the rehearing.

Other matters

1. There are two other matters that should be mentioned. The first is that in its reasons the Tribunal refers to s.18F of the Home Building Act 1989 (NSW). The Tribunal noted that Mr Murnane gave evidence that both the respondent and his architect would give him verbal instructions, on a daily basis, of the work required to be performed. The Tribunal noted that Mr Murnane claims he brought to the attention of the respondent and his architect that there would be problems with the installation of the cladding, if the cladding rectification work was to be undertaken as they required.
2. Section 18F of the Home Building Act relevantly provides that it is a defence for the defendant to prove that the deficiencies of which the plaintiff complains arise from (a) instructions given by the person for whom the work was contracted to be done contrary to the advice of the defendant or person who did the work, being advice given in writing before the work was done, or (b) reasonable reliance by the defendant on instructions given by a person who is a relevant professional acting for the person for whom the work was contracted to be done and who is independent of the defendant, being instructions given in writing before the work was done or confirmed in writing after the work was done.
3. In its reasons the Tribunal found that it was "extraordinary" that Mr Murnane, a very experienced professional, would perform work knowing that there would be future problems with defects, against his advice to the contrary, and not to have sought instructions in writing from either the respondent, or the respondent's architect. However, the Tribunal does not mention whether the conversations alleged by Mr Murnane were denied by the respondent, nor make a finding as to whether or not they occurred. In this respect also we consider that the reasons of the Tribunal do not comply with s.62 of the Act.
4. The second, and final, matter is the failure of the appellant to comply with directions of the Tribunal, in particular that its expert attend a meeting to participate in the preparation of a joint Scott Schedule. Given the conclusion we have reached it unnecessary to comment on this, save to observe that it is incumbent on all parties to litigation to comply with directions of a Tribunal or Court.

Decision

1. For the above reasons, the Appeal Panel makes the following orders: 1. The time in which the notice of appeal is to be lodged is extended to 15 September 2014. 2. The appeal is allowed, and the orders made below quashed. 3. Remit the matter to the Consumer and Commercial Division of the Civil and Administrative Tribunal constituted by a member other than the member who made the original decision, to be determined in accordance with these reasons and otherwise according to law. 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. 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: 03 March 2015