This is an internal appeal by Perfax Builders Pty Ltd (Perfax) from a decision of the Tribunal's Consumer and Commercial Division which awarded the applicant in the original proceedings, Vanita Narain, a sum of $11,407 for defective building work. Perfax argues that the decision was not fair and equitable, was against the weight of the evidence and that new evidence is now available.
[2]
Background
In about June 2014 Prakash Maharaj and Ms Narain entered into a contract with Perfax for extensions and alterations to their home in Rooty Hill. The contract price was $177,000 plus GST. Work commenced in early August 2014. Part way through the works a heavy storm caused damage to the site which required rectification. The works were completed in about March 2015 but in June 2015 the contract was terminated by Perfax as monies had not been paid and access to the site had been refused.
Perfax was successful before the Tribunal in July 2016 in a claim for unpaid progress claims, variations on a quantum meruit basis and unpaid costs to make good the storm damage. An appeal against the Tribunal's orders was lodged but was later dismissed for want of prosecution. It also seems that there had been a counterclaim by the homeowners but that had been withdrawn. Perfax instituted bankruptcy proceedings against Prakash Maharaj and Ms Narain for failure to pay the monies ordered by the Tribunal.
Ms Narain was released from bankruptcy in February 2018. On 2 August 2019 she filed an application in the Tribunal seeking payment of a sum of $50,000 together with a claim that work be carried out to the approximate value of $60,000.
Directions were made by a Senior Member setting a timetable for the filing of documents and for Ms Narain to provide reasonable access to Perfax to enable an inspection to be carried out accompanied by a building consultant or other expert if appropriate. It appears there were two extensions of time for the filing of documents with, ultimately, Perfax to file its evidence by 31 January 2020. The matter came before the Tribunal for hearing by telephone on 23 March 2020. Each party relied upon an expert report.
Ms Narain relied upon a report and a Scott Schedule prepared by Mr Joseph Ovidi of Sydney Building Inspections following an inspection which took place on 2 November 2019 at the premises in Rooty Hill. For its part, Perfax submitted a report by Mr Yucel Haydardedeoglu dated 9 January 2020. Mr Haydardedeoglu stated that the purpose of his inspection of the premises was to review and provide an expert opinion and responses to the report prepared by Sydney Building Inspections. In his report he noted that all inspections were visual only without the use of invasive or destructive investigations, flood tests (except where noted otherwise) and specific diagnostic equipment.
Due to the lapse of time between the completion of the work and the application to the Tribunal, in accordance with s 18E of the Home Building Act 1989 Ms Narain could only bring a claim against Perfax in relation to major defects as that term is defined in the Act. In his decision the Member set out the relevant legislative provisions concerning a major defect. Perfax argues that the Member's decision that certain items were major defects was not supported by the evidence.
The Member identified three claims which could be said to be major defects. These were:
1. bathroom waterproofing within the shower;
2. the omission of sarking which was required under the contract; and
3. repairs to roof flashing.
At the conclusion of the hearing, the Member made orders that Ms Narain was to provide the Tribunal and Perfax with colour copies of the black-and-white photos referred to as figures 11 and 12 in the report of Mr Ovidi concerning the bathroom waterproofing membrane. The Member also indicated that a joint Scott Schedule could be provided to include a breakdown of costs for waterproofing for the bathroom, sarking and flashing. The Member records that after the hearing Perfax sought to file material, including copies of floorplans, which were well outside the scope of the directions that had been made at the conclusion of the hearing. The Member did not accept this material.
Ultimately, the Member did not accept that the failure to install sarking in accordance with the plans constituted a major defect. He found, however, that the waterproofing in the upper level bathroom was defective as were parts of the roof flashing and allowed sums for the rectification of these defects.
[3]
The Appeal
In its appeal Perfax stated that the decision made by the Tribunal was not fair and equitable, was against the weight of the evidence and that new evidence is now available.
In relation to the waterproofing, Perfax, in essence, argues that the report of its expert, Mr Haydardedeoglu, should have been preferred by the Member. In his report Mr Haydardedeoglu states that "there is no evidence that the waterproofing is breaking down", in particular because there was no evidence of any water damage to the ceiling directly below the bathroom and because a 40 mm reducer had been installed into the top of the 100 mm drainage pipe which the waterproofing would have been turned down into.
Perfax states that it bears no responsibility for the roof flashing as this is from an existing pergola roofing area which was not part of the contract between the parties. Perfax states this only became apparent when it received the colour copies of photographs in Mr Ovidi's report. That the roofing relates to existing work is said to be made clear on the floor plan of the dwelling which was received by the Member after the hearing but not allowed into evidence. Perfax seeks to rely on this new evidence which it states was not reasonably available at the time of hearing.
[4]
Applicable legal principles - internal appeals
Section 80(2)(b) of the NCAT Act states:
Any internal appeal may be made:
(a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and
(b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.
Clause 12 of Schedule 4 to the NCAT Act states with respect to decisions made in the Consumer and Commercial Division that:
An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only 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).
In the present appeal Perfax states it seeks leave to appeal on the grounds set out in clause12 and has not raised any questions of law.
Obtaining leave to appeal is a two-stage process. At the first stage Perfax must persuade us that it may have suffered a substantial miscarriage of justice under clause 2 of Schedule 4, because of one or more of the matters referred to in its grounds of appeal. Should it persuade us that it may have suffered a substantial miscarriage of justice it must then, at the second stage, persuade us that we should exercise our discretion to grant leave to appeal on one or more of those grounds. The principles applicable to the granting of leave were set out in Collins v Urban [2014] NSWCATAP 17 at [65] - [84].
For the reasons which appear below we are not persuaded that Perfax has suffered a substantial miscarriage of justice.
[5]
Consideration
In its appeal, Perfax states that, in relation to the issue of the bathroom waterproofing, the report of its expert should have been preferred over the report of the expert engaged by Ms Narain. Perfax submits, in effect, that the Member's decision was against the weight of the evidence. The expression "against the weight of evidence" in the Tribunal means that the evidence in its totality preponderates so strongly against the conclusion favoured by the Tribunal that it can be said that the conclusion was not one that a reasonable Tribunal member could reach: Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33; [1991] HCA 23 at [153], followed in Collins v Urban at [77].
In his report for Ms Narain, Mr Ovidi found that the upper level bathroom appeared to have water ingress from the shower and that waterproofing to the drain had disintegrated. He provided detailed photographs and concluded that the bathroom had a failing waterproofing membrane. Mr Haydardedeoglu in his report simply stated that there was no evidence that the waterproofing was breaking down and no evidence of any water leakage into the area below the bathroom. He did say that a reducer had been installed on top of a 100 mm diameter drainage pipe and speculated that the waterproofing would have been turned down into the pipe. It is apparent from his report that he did not conduct any tests or investigations to dispute any finding by Mr Ovidi that the membrane was defective.
At the hearing of the appeal Mr Henry Janicky, who appeared for Perfax, asserted that because there was no leak there was no defect. However, as appeared from Mr Ovidi's expert report referred to below, the work can be defective without proof of a leak.
In his decision the Tribunal Member referred to the evidence of both experts, including the photographs provided by Mr Ovidi of the defective work, as well as a certificate provided by Ms Narain noting that a critical stage inspection was missed and in particular that a waterproofing inspection was missed as the tiler unexpectedly started tiling before the certifier had a chance to call for the inspection. He was satisfied that the waterproofing has been breached and required rectification.
We are not satisfied that any error has been established in the manner in which the Member considered the evidence. The fact that the Tribunal preferred the evidence of one expert over another is not sufficient to establish any error, particularly when this finding was supported by the fact that there had been no waterproofing inspection and the builder's expert did no more than assert that there had been no failure. In our view the findings made by the Member were reasonably available on the evidence put forward by both parties at the hearing.
In his report Mr Ovidi provides photographs and commentary to the effect that upon inspection the flashing above the garage was found to be defective in that there were cracks which allowed water ingress which had damaged the ceiling below. Mr Ovidi also provided a photograph of flashing over a rear metal roof which he advised leaks in heavy rain. In his opinion the flashing at the front and back needed to be replaced. Mr Ovidi allowed a sum of $1,570 to repair the flashings. Mr Haydardedeoglu was of the opinion that the silicon sealing of the junction between the first floor balcony and the garage roof had come away from the wall allowing water to penetrate. He allowed a sum of $210 to replace the flashing silicon. It was apparent from the Member's reasons for decision that he preferred the more detailed evidence of Mr Ovidi to that of Mr Haydardedeoglu and found that the sum allowed by Mr Ovidi for repairs was appropriate.
Perfax seeks to argue on the appeal that it is not responsible for repairs to flashing at the rear of the building as the failing flashing at the rear of the building was part of existing works unrelated to the works carried out by Perfax. According to Perfax, it appears that this flashing is between an existing covered area and the extensions carried out by Perfax. In order to support its position Perfax seeks to rely on a site plan of the property in order to demonstrate the location of the works and flashing at the rear. It was this document that Perfax submitted to the Tribunal following the hearing but which was not allowed into evidence by the Member.
There is nothing before us to indicate that this issue, namely, that the builder was not responsible for the flashing at the rear of the building, was raised at the hearing before the Member. Perfax states that the copy it had of the report of Mr Ovidi only contained black-and-white photographs and it therefore could not identify the exact location of the flashing depicted. According to Perfax, it was only when it was provided with a colour copy of the report in accordance with the directions made by the Member at the conclusion of the hearing that it became aware that part of the flashing concerned was in relation to work not carried out by Perfax.
The explanations by Perfax for why it could not obtain this evidence at the time of the hearing are unsatisfactory. In Al-Daouk v Mr Pine Pty Ltd [2015] NSWCATAP 111 at [23]-[25] the Appeal Panel explained that the test of whether evidence is reasonably available within the meaning of clause 12(1)(c) is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained it.
Perfax was in possession of Mr Ovidi's report for some time and its own expert, Mr Haydardedeoglu, provided a response to that report. Mr Janicky told us that he had not been permitted to attend the site. That statement, however, flies in the face of the direction that was made by a Senior Member in preparing the matter for hearing that Ms Narain was to provide reasonable access to the builder "to enable an inspection to be carried out accompanied by a building consultant or other expert if appropriate". The order expressly permitted the builder to attend the site. Furthermore, the description of the photographs contained in Mr Ovidi's report clearly indicate that two relate to the flashing above the garage and one concerns the flashing over the rear metal roof.
In our opinion the evidence which Perfax now seeks to rely on concerning the flashing is evidence which could have been obtained with reasonable diligence prior to the hearing in the Tribunal and indeed at a time when raising the issue would not have disrupted the hearing. It was evidence clearly within Perfax's possession and knowledge. We see no error in the Member's decision not to admit the evidence following the hearing in circumstances where both parties had had ample time to prepare their cases and the evidence sought to be relied upon by the builder fell well outside the direction given by the Member at the conclusion of the hearing.
A party is bound by the manner in which it conducted its own case. There is nothing before us to suggest that the evidence now sought to be relied upon could not have been obtained at an earlier point in time if Perfax had paid sufficient attention to the matters raised in the Mr Ovidi's report. There can be no dispute that it was provided with ample opportunity to do so. We find that the new evidence was objectively available at the time of the hearing and, with due diligence, could have been relied upon at the time of the hearing. In any event, we consider that there is considerable force to the submissions made by Ms Narain that it is the builder's responsibility, when adding an extension to ensure that all aspects of the final building are completed to a manner adhering to Australian building standards. It was therefore the responsibility of the builder to ensure that the flashing joining the existing structures with the extensions built by the builder was satisfactory.
For these reasons, cl 12(1)(c) of Schedule 4 to the NCAT Act does not provide a basis upon which we may grant leave to appeal.
Perfax also submits that it has suffered a substantial miscarriage of justice as the decision was not fair and equitable. There is no doubt that Perfax has genuinely held views about the decision which it believes should have been made by the Tribunal. It is clear that there is a history of bad relations between the builder and the homeowner and that Perfax feels aggrieved that its reputation as a builder may be affected by the Tribunal's orders. That is, however, not a basis upon which we may conclude that the decision was not fair and equitable.
In all the circumstances we are unable to find that the builder has suffered a substantial miscarriage of justice. There was no real possibility or fair chance of a different result on the state of the evidence before the Tribunal.
None of the grounds of appeal have been established. Leave to appeal is therefore refused and the appeal is dismissed.
[6]
Orders
We make the following orders:
1. Leave to appeal refused.
2. Appeal dismissed.
3. The stay order made on 3 September 2020 in matter HB 19/35235 is lifted.
4. The time for compliance with order 1 made on 23 July 2020 in matter HB 19/35235 is extended to 24 December 2020.
[7]
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
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Decision last updated: 27 November 2020