PJ Cook Building Pty Ltd v Reid

The Tribunal proceedings and decision

1. The matter was heard and determined on 6 September 2023 and the Tribunal Member delivered oral reasons for decision. The reasons were transcribed by the appellant, and we have set out the critical parts of the decision: The applicant claims that there was a breach of the statutory warranties by the builder in respect to the construction services provided in relation to the gutters and fascia. The breach of the statutory provisions section 18B (1) that the work was carried out without due care and skill is the allegation put forward by the applicant. It is not in dispute that there were touch-up paint areas on the gutters, and roofing panels. The issue between the parties was with respect to who applied the touch up paint on the roof. Now, the applicant says that this wasn't done by her and that it must have been done by the builder's contractor and Mr Cook's evidence is that had touch up paint been used by the roofer, which is denied, it would have faded and been evident within a very short period of time and noticed by Mr Fowler the person who carried out the new build post-handover report. The respondent also points to three statements from the roofing contractor used by the respondent which deny the use of touch-up paint. In consideration of the competing positions of the parties and the evidence I find that whilst I accept that Mr Cook truly believes that his roofing contractors did not use touch-up paint, the evidence of the scratches that are evident was the touch-up paint removed [paints] to the fact that the most likely scenario was that the touch-up paint was used at the time of installation. Therefore, the use of touch-up paint to cover the scratches is more probable than not and I find that, that is the case that it occurred at the time of installation. In these circumstances and noting that no one from the roofing contractors attended to give evidence and be cross-examined I find that I cannot accept the evidence that they provide and I find that the roofing contractors would have most likely than not have been the persons who had used the touch-up paint in the circumstances. I cannot accept the evidence as I said of the three personnel nor is there any expert evidence to support the contentions regarding the fading of the paint made by the respondent.
2. The appellant filed a notice of appeal on 29 September 2023.

Scope and nature of internal appeals

1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
2. A question of law may include not only an error in ascertaining the legal principle, or in applying it to the facts of the case, but also taking into account an irrelevant consideration or not having regard to a relevant consideration. This includes not making a finding on an element or central issue that is required to be made out in order to claim an entitlement to relief: see CEO of Customs v AMI Toyota Ltd (2000) 102 FCR 578; [2000] FCA 1343 at [45], applying the statement of principle in Craig v The State of South Australia (1995) 184 CLR 163 at 179.
3. In John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 (Prendergast) the Appeal Panel, at [13], set out a series of common 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? 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it?
4. The circumstances in which an Appeal Panel may grant leave to appeal from decisions made in the CCD 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 (cl 12(1)(a)); or 2. the decision of the Tribunal under appeal was against the weight of evidence (cl 12(1)(b)); 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) (cl 12(1)(c)).
5. The test of whether evidence is reasonably available is not considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test which asks whether the evidence in question was unavailable because no person could reasonably have obtained it: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [23]; see too, Elsayed v Tassone [2022] NSWCATAP 69 at [18].
6. In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel said at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 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.
7. Even if an appellant from a decision of the CCD 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). In Collins, at [84], the Appeal Panel said that ordinarily it is proper 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.
8. In the NCAT Act, s 81 deals with the determination of internal appeals, and provides that: 81 Determination of internal appeals (1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following - (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.
9. In circumstances where an appellant is not legally represented, the Appeal Panel should look at the grounds of appeal generally in order to find whether a question of law has in fact been raised, but must ensure that procedural fairness is given to the respondent before considering it: Prendergast at [12]. In Cominos v Di Rico [2016] NSWCATAP 5, the Appeal Panel explained at [13]: 13. It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]- [316]). Relevantly, s 38(2) provides that that Tribunal "may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.
10. Importantly, in Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 an Appeal Panel said at [10]: An appeal does not provide a losing party with the opportunity to run their case again except in the narrow circumstances which we have described. Mr Ryan has not satisfied us that those circumstances apply to his case and we refuse permission for him to appeal.

Notice of Appeal and Submissions

1. The notice of appeal was filed on 29 September 2023 and was filed within the time required by r 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW).
2. The builder's grounds of appeal raise both questions on errors of law and errors of fact for which the leave of the Appeal Panel is required. These grounds may be summarised as follows.
3. Ground 1: the Member erred in fact in concluding that it was more probable than not that the touch up paint occurred at the time of installation.
4. Ground 2: the Member erred in law by not giving appropriate or any weight to the statements provided by the builder's roofing contractors.
5. Ground 3: the Member ignored the builder's evidence, specifically the report produced by Mr Fowler.
6. Ground 4: the Member failed to consider that someone other than the builder attended to the roof after practical completion and could be responsible for scratches and touch-up paint.
7. Ground 5: the Member placed undue weight on the builder for its failure to produce expert evidence in circumstances where the onus rested with the owner who did not tender expert evidence, thereby reversing the onus of proof.
8. Ground 6: the Member erred because there is no expert evidence supporting the owner's claim that the use of touch up paint occurred at the time of installation and was caused by the builder or its roofing contractors.

Reply to Appeal

1. In her Reply to Appeal filed on 11 October 2024, the owner supports the orders made on 6 September 2023 for the reasons given.

Consideration

1. We have considered the grounds of appeal and conclude that the appellant's grounds do not raise errors on questions of law (such as that they may be categorised in any of the Prendergast categories as set out above). Rather the errors may be more appropriately referred to as "errors of fact" or errors for which the leave of the Appeal Panel is required.
2. The principles for leave to appeal are well established: see Collins at [84]. They were also recently summarised by the NSW Court of Appeal in Maclean v Brylweski [2023] NSWCA 173 as follows at [24]: It is not disputed that leave to appeal is necessary. In determining whether leave to appeal should be granted, something more must be demonstrated than that the primary judge's decision was arguably wrong. What is ordinarily required to be demonstrated is that the matter involves a question of principle or of public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable (see Clarke v State of New South Wales [2015] NSWCA 27; Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69; Jaycar Pty Limited v Lombardo [2011] NSWCA 284 at [46]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[34]). Moreover, where, as here, the decision the subject of the application for leave to appeal involves an exercise of discretion, what is required to be demonstrated is error in the House v The King sense.
3. For the reasons that follow, we are not of the view that the appellant has demonstrated an error in the House v The King (1936) 55 CLR 499; [1936] HCA 40 sense and we do not grant leave to appeal.

Grounds 1, 2, 3 and 4

1. We consider that grounds 1, 2, 3 and 4 should be addressed together as they raise the same issue of fact: did the Member err when he concluded that the touch up paint was applied by the builder?
2. As stated, the issue between the parties required the Tribunal to determine whether the builder breached the statutory warranties as set out in s 18B of the HB Act. The Tribunal concluded that the work was not carried out with due care and skill. It is the builder's contention that the evidence strongly preponderated against that finding.
3. The Tribunal found in favour of the owner on the basis of the owner's evidence that she herself had not touched up the paint or touched the roof since the builder left the site in August 2021. The Tribunal relied on the evidence given by the owner during the hearing that "I had originally thought that it was dust that would just wash off, I had not personally or had any other person or contractors spray the fascia, gutters or roof. Or anyone up there as that is all new property". …. "I would have no reason to touch up the corners of my roof with any material or spray paint. [Transcript 25:50] …. "
4. The builder denied that it used touch up paint, and in support tendered three statements from employees of its subcontractor Ryans Metal Roofing (Ryans) which provided that none of Ryans' employees had used touch up paint. The builder itself tendered no evidence from its employees or other contractors.
5. The Tribunal's relevant findings of fact were based on its assessment of the reliability and credit of the witnesses, in circumstances where it was the Tribunal's task to weigh the owner's evidence that she had not applied the paint against the builder's evidence that it was not its custom to apply touch up paint. We note that the owner was not cross-examined nor challenged on her position that she had not applied touch up paint, or that she had allowed or caused a third party to attend to the roof. The Tribunal was therefore left with the fairly uncontroversial position that touch up paint had been applied, it had been applied contrary to the manufacturer's recommendations, and the touch up paint had caused the Colourbond roof to fade, requiring replacement, based on the quote provided by PMD Metal Roofing Pty Ltd. It was, in our view, open to the Tribunal to accept the owner's unchallenged evidence that no-one, other than the builder and its roofing contractors, had accessed the roof.
6. The High Court has held that appellate restraint is appropriate, reflecting the natural limitations of the appellate process, in relation to "factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence": Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 at [55]. In relation to such findings - as opposed to conclusions drawn from them (see Lee v Lee at [56]) - the appeal court must consider whether "incontrovertible facts or uncontested testimony" demonstrate error by the trial judge, or that the finding is "glaringly improbable" or "contrary to compelling inferences" in the case: Lee v Lee at [55]; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28]-[29]. Put simply, a compelling basis is needed to overturn such a finding.
7. Natural limitations of an appeal court were identified in Fox v Percy (at [23], citations omitted): These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the "feeling" of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
8. We must consider whether the Tribunal embarked on the weighing of the evidence in an orthodox fashion or whether the Tribunal made a finding that was "glaringly improbable". We consider that the conclusion of the Tribunal that the builder, applied the touch up paint and thereby failed to perform its work with due care and skill was a finding could be made, albeit from "very slight" evidence, namely the evidence of the owner, that no-one had had access to the roof other than the builder or its subcontractors. The evidence was sufficient because the builder did not prove that access to the roof had been given to other persons, nor did the builder establish the alternative case theory that the paint must have been obvious to the building inspector in 2021, but as no mention is made of it in the inspection report, an inference must be drawn that the touch up paint had been applied after October 2021. The latter alternative theory, that touch up paint would have resulted in immediate and obvious fading of the Colourbond product, was not supported by evidence.
9. It is the builder's case that the Member should have applied more weight to three letters of Ryans' employees tendered by the builder. The three letters provided in summary that: 1. Ryans does not touch up paint on minor scratches as it is the recommendation of BlueScope Steel not to use touch up paint because there can be a reaction from different paint, and paint solutions may fade differently. Spray paint touch up would have been visible immediately and not manifested slowly over time as is alleged by the owner (letter dated 3 August 2023); 2. Zac Ryan, an employee of Ryan's, stated that he was involved in the construction of the roof and that "at no stage touch up paint was used" (letter dated 29 August 2023); 3. Tarnae Mahon, another employee of Ryans, stated that he also was involved in the construction of the roof and that touch up paint was not used by him after the construction of the roof (letter dated 29 August 2023).
10. In a further submission, the builder also relies on a post building inspection report of Mr Fowler dated 25 October 2021. In short, the report notes six defects in the roof exterior, in particular the report notes creases to roof sheets, joints to guttering being open and poorly finished, and insufficient gutter brackets installed. It is the builder's contention that the report, although detailed, makes no mention of touch up paint.
11. We do not consider that the Member erred in finding a breach of the statutory warranties established. It was for the owner to show that touch up paint was applied to the roof which she did, and in the absence of explanation, the application of spray paint on a Colourbond roof was more consistent with application on the part the builder or its subcontractor.
12. We consider that the Member correctly found the presence of touch up paint and found correctly against the builder. That is, the builder knew that touch up paint should not be used on a Colourbond roof but that, contrary to the manufacturer's recommendations, touch up paint was applied, more probably than not, by the builder or its subcontractors as the last persons present on the roof. Once the owner has established that, the builder could have rebutted the finding of breach, by establishing on balance that it could not have applied the paint, if necessary with third party evidence. It was for the builder to show that, on the balance of probabilities the paint was more likely than not applied by the owner or someone on her behalf in the intervening two year period because any paint applied by the builder would have reacted with the Colourbond immediately, and the discolouration would have been immediately obvious.
13. We do not consider that the three letters from Ryans prove the builder's contention that it, or other subcontractors, did not apply touch up paint, on the balance of probabilities. Ryans' evidence cannot be said to be conclusive and the Member was entitled to give it less weight. There are no other considerations that establish the builder's defence. We also note that the builder itself did not tender an affidavit stating that none of its employees applied touch up paint, and that it is at least possible that someone in the builder's employ applied the paint. We also note the owner's submission that there were many people working on the site other than the three Ryans' employees.
14. While the builder did not bear the burden of proof, we are persuaded that the findings made by the Member are not such that they demonstrate an error in the House v The King sense.
15. These grounds of appeal are dismissed.

Grounds 5 and 6

1. It is submitted that the Member erred because he rejected the builder's evidence on the basis that there had been no expert evidence provided, yet accepted the owner's assertions without the support of expert evidence, thereby reversing the onus of proof.
2. We consider grounds 5 and 6 raise identical contentions, that is, whether the Member reversed the onus of proof or whether the owner failed to discharge her onus of proof.
3. We are of the view that these grounds raise questions of law. The owner's case was in large measure accepted without the need for expert evidence as the facts giving rise to the critical findings were not in dispute. The owner tendered a detailed quotation/ report of PMD Metal Roofing Pty Ltd of 2 August 2023. The description of the defects is compelling and contains the following description: On inspection of the new roof completed have found multiple defects: 1. the incorrect use of touch up paint sprayed on multiple areas of the fascias, gutter and roof sheets. The incorrect use has resulted in big area of the new fascias, gutter and roof sheets to have faded and discoloured patches . Needs to be replaced. 2. Incorrect fixings in barge flashings. As seen in the photos there are missing fixings and incorrect colour of rivets. The barge capping laps are only fixed at the top and bottom of laps with large amounts of silicon used to waterproof, Australian standard for fixing spaces is 50 millimetres apart and rivets in the laps not screws. 3. Sheets turned up the wrong end then turned back down to try and hide the mistake. As a result the ends of the sheets are holding water when morning condensation is falling off the roof. Recommend replace 3 sheets. 4. 1 x sheet painted with touch up paint and is discoloured now as a result. Recommend replacement. 5. Small barge capping on right hand side needs back tray to waterproof instead of roof screws in the pans of sheets with silicon seal. Barge cap will need replacement as it's incorrect size and mail add water into eaves in rainfall stop as result of having to replace fascia and gutters will need new eve sheets will also need to be painted.
4. The builder contends that the owner's case was not supported by evidence and in particular, the owner failed to provide expert evidence. However, the quotation set out in full above clearly demonstrates that the roof had many defects, among them the careless application of touch up paint. The owner relied on a number of photographs that were not challenged and that supported the obvious inference that the builder or its contractors applied the touch up paint during the construction process, or near its finish.
5. What is to be made of the photographs tendered by the applicant is a matter about which reasonable minds might differ, but it was not submitted that the quotation and the photographs did not reveal the defects alleged, but rather that in the absence of an expert report the Tribunal could not have concluded that it was the builder who applied the paint. However, it was the totality of the evidence, the quotation, the photos and the text messages, including the applicant's oral evidence as set out in the transcript, that allowed the Tribunal to reach its conclusion that the builder was more likely than not responsible for the application of the touch up paint.
6. The Appeal Panel finds that it was open to the Tribunal to accept the totality of the evidence and to find, on the basis of that evidence, that the paint was applied by the builder and that the work was not carried out in a workmanlike manner. The fact that the owner discharged her onus of proof without reliance on expert evidence cannot be described as a reversal of the onus. It merely demonstrated that the Member concluded that on the balance of probability the builder had applied the touch up paint, and not the owner. The Member's reasons do not disclose an error on a question of law and do not disclose an error on a question of fact.
7. We are not satisfied that the Tribunal committed an error of a type under House v The King principles, and find that leave to appeal should not be granted.

Orders

1. Accordingly, we make the following orders: 1. Leave to appeal is refused and the appeal is otherwise 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: 25 March 2024