Quigg v O'Leary trading as Building Habitats

NCAT Appeal Panel|2018-08-20

Introduction

This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 against a decision made in the Consumer and Commercial Division of the Tribunal on 30 April 2018.
The application to the Tribunal was originally brought by the appellants, Mr Quigg and Ms Parke against the respondents, Mr O'Leary, Mr Greig and Mr Zimnowoda. We will refer to Mr Quigg and Ms Parke as the owners, to Mr O'Leary as the builder, to Mr Greig as the waterproofer and to Mr Zimnowoda as the tiler.
At the appeal hearing, the owners and the builder each represented themselves, Ms Olsen, solicitor, appeared for the waterproofer and there was no appearance by the tiler.
For the reasons set out below, we have decided to refuse leave to appeal and dismiss the appeal. We have also refused the waterproofer's application for costs.

Background

In 2015 the owners bought and moved into a house in Tathra. In early 2016 the owners separately contracted with each of the respondents to undertake work on the external deck area of their home, which was leaking into the area below. The builder was contracted to repair the deck structure, install sheeting on the surface of the deck and install a balustrade. The waterproofer was engaged to waterproof the deck surface and the tiler was engaged to tile the deck surface.

Tribunal proceedings and decision

The application to the Tribunal was lodged on 21 December 2017. The matter was first listed before the Tribunal on 22 January 2018. The matter came back before the Tribunal for hearing on 30 April 2018.
The owners claimed that the builder had failed to perform work with due care and skill, in breach of the warranties in s 18B of the Home Building Act 1989. They relied on reports from NSW Fair Trading and from Sapphire Coast Property Inspections. According to the reasons for decision, the latter report noted that water had penetrated the membrane and that there were no expansion joints in the tiles. The report did not provide an explanation of the cause of the problems identified.
The tiler provided a report from Peak Consulting. According to the Tribunal's reasons for decision, the report concluded that water penetration was the result of the failure of the waterproofing membrane, which had not been adequately detailed at the balustrade posts. The report concluded that the tiles failed as a result of the water penetration and that the tiling was initially defect-free.
According to the reasons for decision, the owners claimed that the builder should have ensured that the post installation was waterproofed, that the builder had told them that the post installation was a new system and that they presumed it was waterproof.
The builder's evidence was that he had told the owners they needed to have the waterproofer return to undertake the second stage of waterproofing. He stated that the owners had noted that the tiler and waterproofer were brothers-in-law and would be able to work together to achieve this. The owners denied this. The waterproofer's evidence was that he would normally be called back to do the second stage of waterproofing prior to the tiling work. The Tribunal recorded that the tiler had advised the owners of the need to undertake a second stage of waterproofing, but they told him that the post installation system was new and that they believed that further waterproofing was not necessary.
The Tribunal relevantly found that:

The owners did not understand the requirement to have the waterproofer return to undertake a second stage of waterproofing.
The owners failed to turn their minds to the requirement to have the waterproofer return to have second stage of waterproofing done before the tiling was completed.
The builder told the owners that they needed to get the waterproofer to return to undertake a second stage of waterproofing.
The tiler advised the owners of the need to get the waterproofer to return to do a second stage of waterproofing.
The owners failed to check their assumption that the post installation was waterproof, even when alerted to the issue by the tiler.
The issues in dispute related to the scheduling and programming of the work by the owners and their failure to check their assumption that the post installation was waterproof. In relation to this, the Tribunal noted the report from Peak Consulting, which stated "fundamentally the issue related to scheduling and programming of the work", and further noted the lack of evidence to establish that the builder's work was not done with due care and skill.

Scope and nature of internal appeals

Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, with the permission) of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] 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 has 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.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 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; or 2. the decision of the Tribunal under appeal was against the weight of evidence; 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).
In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 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.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 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 v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate 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.
In cases involving a self-represented litigant who cannot clearly articulate grounds of appeal and distinguish between questions of law and errors of fact in relation to which leave to appeal is required, it is appropriate for the Appeal Panel to consider the material provided on the appeal to identify the grounds of appeal (Prendergast at [12]).

Submissions and evidence

In deciding the appeal, we have had regard to the following:

The Notice of Appeal lodged on 31 May 2018;
The Reply to Appeal lodged by the builder;
The Reply to Appeal lodged by the waterproofer;
Two bundles of documents filed by the appellants, in chief and in reply;
The bundle of documents filed by the builder;
The Tribunal's reasons for decision;
The application to the Tribunal; and
The oral submissions made by the parties at the hearing.

Extension of time

The Notice of Appeal was lodged on 31 May 2018, which is outside the 28 day time period specified in cl 25(4) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules).
We have considered whether to extend time to lodge the appeal under s 41 of the NCAT Act. In doing so we have considered in particular the length of the delay in lodging the appeal, the reasons for the delay and any prejudice to the respondents that may arise from the delay.
As the owners were notified of the Tribunal's decision on 30 April 2018, they had until 28 May to lodge the appeal. The delay of two days is very short and does not weigh against extending time.
In relation to the reasons for the delay, the owners cited stress and health problems, the impact of bushfires in the Tathra region and the fact that they were "blindsided" by the result of the Tribunal proceedings. None of these reasons are particularly compelling reasons for not lodging an appeal within time, particularly given the lack of evidence supporting the owners' assertions about health problems. However, the lack of a compelling reason for lodging an appeal is not of critical importance in circumstances where the appeal was lodged only two days late.
In relation to prejudice, the builder and the waterproofer conceded that the delay in lodging the appeal had not caused them any prejudice.
Overall, we conclude that in light of the very short delay and the lack of prejudice to the respondents it is appropriate to extend time for the lodgement of the appeal, despite our conclusions concerning the merits of the appeal.

Grounds of Appeal

The grounds of appeal specified in the Notice of Appeal are: 1. The builder stated at the hearing that he was not qualified to do waterproofing but he also said that he could have managed the whole job. 2. The Tribunal Member failed to provide reasons why she believed the builder over them. 3. During the hearing, the builder and the waterproofer said that they had not met to discuss the job. The waterproofer stated that he had not spoken to the builder about returning to do a second stage of waterproofing. The owners now seek to rely upon a text message, which was not tendered at the original hearing, referring to both the waterproofer and the builder meeting one of the owners on site. 4. The Tribunal stated that the builder was not engaged to do waterproofing but he was equally not engaged to do permanent damage to completed work. If damage is caused during the process of the job it is the responsibility of the person who caused the damage to repair it. 5. The Tribunal was biased.
The owners seek leave to appeal on the basis that the decision is not fair and equitable, that it is against the weight of evidence and that significant new evidence is now available that was not reasonably available at the time of the hearing.
In relation to the decision not being fair and equitable, the owners contest the Tribunal's finding that there was no evidence of the owners' assumption that the post installation was waterproof.
In relation to the decision being against the weight of evidence, the owners state that more weight should have been given to their evidence. They suggest that they would not have ignored advice from the builder if he had given such advice.
In relation to new evidence, the owners refer to the recording of the hearing, the text message communication which they submit shows that the builder's and waterproofer's evidence "was not entirely accurate", and an insurance assessment that identifies that there are health concerns regarding mould under the deck. They state that they did not think text messages would be required at the hearing and that they did not at the time of the hearing have the recording or the insurance assessment.

Ground 1

This is not a proper ground of appeal, as it does not identify any question of law. In any event, there is no inconsistency between a builder not being qualified to do waterproofing and a builder being able to supervise a waterproofing sub-contractor. In this case, the builder was not engaged to do waterproofing. That work was the subject of a separate contract between the owners and the waterproofer. There was no obligation on the builder to offer to undertake all of the work involved in repairing, waterproofing and tiling the deck. If the owners wanted a builder to take on the whole job, that was a matter that they could have negotiated.

Ground 2

This appears to raise adequacy of reasons as a ground. If established, that raises a question of law.
The requirement that reasons for decision be adequate has been extensively considered both judicially and by Appeal Panels of the Tribunal.
In Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 McColl JA, with whom Ipp JA and Bryson AJA agreed, identified the principles relevant to the adequacy of reasons. Those observations were summarised as follows in Moussa Enterprises Pty Ltd v Stanford [2015] NSWCATAP 99 at [30]: (1) The giving of adequate reasons lies at the heart of the judicial process. Failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice. (2) The extent and content of reasons will depend upon the particular case under consideration and the matters in issue. (3) While a judge is not obliged to spell out every detail of the process of reasoning to a finding, it is essential to expose the reasons for resolving a point critical to the contest between the parties. (4) The reasons must do justice to the issues posed by the parties' cases. Discharge of this obligation is necessary to enable the parties to identify the basis of the judge's decision and the extent to which their arguments had been understood and accepted. (5) Because a primary judge is bound to state his or her reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried.
In this case, the Tribunal's reasons are economical. While it is true that the Tribunal Member did not specifically identify why she accepted the builder's evidence that he had told the owners that second stage waterproofing was required, the Tribunal Member did record that the owners denied that the builder had given them that advice. The Tribunal Member also recorded that the tiler gave evidence that he had advised the home owners to undertake second stage waterproofing, that there was no evidence to establish that the owners' assumption that the post installation was waterproof was a reasonable assumption on their part, and that the assumption was "not supported by common sense".
It appears clear from the transcript and the evidence generally before the Tribunal that there was a factual dispute about conversations the parties had engaged in. However, we are persuaded that the weight of evidence clearly favours the builder's case that he did advise the owners of the need to undertake the second stage waterproofing. In such circumstances, even if we were to conclude that the Tribunal's reasons were arguably inadequate, there is no utility in allowing an appeal on this ground. This is not a case when evidence given at a fresh hearing of who said what in conversations that occurred some years ago could be more reliable than the evidence given at the hearing.
This ground is not made out.

Ground 3

This is not a proper ground of appeal. It identifies no question of law. The new evidence the owners refer to is considered below.

Ground 4

This ground in effect takes issue with the Tribunal's finding of fact in relation to the cause of the water penetration complained of by the owners; that is, that it was the responsibility of the owners, who failed to have second stage waterproofing done. There is nothing in the material before us to suggest that the balustrade posts could have been installed without penetrating the waterproof membrane. Had the builder been engaged to do the waterproofing, then a failure to undertake second stage waterproofing could be sheeted home to the builder. However, in this case, the owners had entered into separate contracts and were in effect managing the project. It was their responsibility to arrange for second stage waterproofing.
This ground has not been established.

Ground 5

While the owners claim that the Tribunal was biased, this assertion has not been particularised. Nor was it the subject of oral submissions. We are not satisfied that this assertion has been made out. An examination of the transcript provided does not suggest that the Tribunal failed to listen to the owners. Nor does the decision lead us to conclude that the Tribunal did not consider the evidence or that the Tribunal acted with partiality.
We are not satisfied that the owners have established this ground of appeal.

The decision was not fair and equitable.

In essence, this ground for leave to appeal concerns the process rather than outcome. If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable": Collins v Urban at [77], citing Hutchings v CTTT [2008] NSWSC 717 and Atkinson v Crowley [2011] NSWCA 194.
For this ground of leave to appeal to be successful, we would have to be satisfied that the owners may have suffered a substantial miscarriage of justice because a failure in the way a matter was conducted or decided deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred: Collins v Urban at [71].
We are not satisfied that the owners have established that this is the case. The owners submit that the tiler did not tell them that second stage waterproofing needed to be done and therefore did not alert them to the issue, as found by the Tribunal. However, at page 14 of the transcript summary provided by the owners (which at the hearing the builder and the waterproofer accepted was essentially accurate) the following exchange is recorded. (In this extract, JL is the Tribunal, SG is the waterproofer and NZ is the tiler.) [JL]: Can I ask the tiler and the waterproofer at any stage did either of you ask the owner about the second stage waterproofing. Did either of you inform the home owner. SG: No that is obvious. Duty of care of a licensed tiler would know that here is no waterproofing membrane. Make the owner aware. Tiler at least asks the question. Everyone is different. At least ask the question. Myself I would ask the question. JL: Why didn't you ask? NZ: I did. I asked why isn't there waterproofing around it. They said to me that the builder told the homeowners it was a new system.
While we accept that the tiler's evidence was not that he had told the owners they needed to undertake second stage waterproofing, the Tribunal's conclusion that this had occurred does not constitute a denial of procedural fairness. At most it is a mistake of fact. In any event, we are satisfied that the transcript is consistent with the Tribunal's finding that the owners had "failed to check their assumption that the post installation was waterproof, even when alerted to the issue by the tiler". This is because, according to the transcript, the tiler put the owners on notice about the waterproofing issue.
We are not satisfied that the owners have established that the decision was not fair and equitable for this or for any other reason.

Decision against the weight of evidence

In Collins v Urban, the Appeal Panel stated at [77] that a decision can be said to be against the weight of evidence "where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach".
We are not satisfied that the Tribunal's decision in this matter can be characterised as being against the weight of evidence. There was evidence before the Tribunal, in particular a report from Peak Consulting, that justified the Tribunal's conclusion that the fundamental issue was the scheduling and programming of the work. As the owners had entered into three different contracts, it was open to the Tribunal to conclude that they were responsible for the scheduling and programming of the work. It was also open to the Tribunal to conclude that they were on notice of the need for second stage waterproofing, even if they had misunderstood what was required, and that their failure to arrange the second stage waterproofing was the cause of the water penetration.
This ground for leave to appeal is not made out.

New evidence

The recording of the hearing and the resultant transcript prepared by the owners are not evidence. We have considered the transcript in deciding the appeal.
In relation to the other documents on which the owners seek to rely - that is, text messages, an email and an insurance report - we are not satisfied that these documents are "new" in the sense required, that is, that they were not reasonably available at the time of the hearing. If the owners had thought to do so, they could have obtained those documents and made them available at the Tribunal hearing.
This ground for leave to appeal is not made out.

Conclusion on appeal and application for leave to appeal

We are not satisfied that the owners have established any of their grounds of appeal.
We are also not satisfied that they owners have established any grounds for which leave to appeal may be granted. Even if they had done so, we would not grant leave to appeal because we are not satisfied that this is a case in which leave to appeal should be granted in accordance with the principles discussed in Collins v Urban at [84], which are set out at [18] above.
We accept that the owners are very distressed about the situation they find themselves in. We also accept that they were unaware of the possible pitfalls of not engaging a builder to undertake all of the works and instead separately contracting with the builder, the waterproofer and the tiler. However, neither their distress, nor the expense they will be put to in having rectification work undertaken is a basis for allowing their appeal or granting them leave to appeal.

Costs

The waterproofer seeks an order for the costs of the appeal. In general terms, parties in proceedings before the Tribunal bear their own costs, unless special circumstances warrant an order for costs: s 60(1) and s 60(2) NCAT Act. Although Rules 38 and 38A provide an exception to that position, it was not argued that those provisions apply in this case.
The term "special circumstances" is not defined in the NCAT Act. It has been interpreted to mean circumstances that are out of the ordinary but not necessarily extraordinary or exceptional. The discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
In Alexander James Pty Ltd v Pozetu Pty Ltd (No. 2) [2016] NSWCATAP 75 at [14] the Appeal Panel stated: 14. An assessment whether circumstances are "special" involves the exercise of a value judgement carried out by way of comparison between what is not "special", and what is special. There are no scientific means by which the former can be ascertained. The evaluative process is necessarily one of impression informed by the particular provisions of section 60, which by sec 60(3)(f) incorporates also a consideration of section 36(3) of the Act.
The waterproofer submits that the special circumstances arise from a request made in writing to the Tribunal on 16 July 2018 to excuse him from any further involvement in the proceedings. This letter was copied to the owners. In essence, the waterproofer sought to be removed from the proceedings on the basis that the owners' dispute was with the builder rather than with him. At the hearing it was submitted that the owners would only agree to withdraw the appeal against the waterproofer if he signed an affidavit supporting their case against the builder. The owners responded that they only wanted the waterproofer to tell the truth.
We are not satisfied that special circumstances have been established that warrant an order for costs. It is true that the owners' dispute was essentially with the builder and not the waterproofer. However, given these circumstances, the waterproofer could have represented himself or provided written submissions rather than appear at the appeal hearing. We are not satisfied that the proper exercise of the costs discretion in this case is to order the owners to pay the waterproofer's costs.

Orders 1. Time to lodge the appeal is extended to 30 May 2018. 2. Leave to appeal is refused. 3. The appeal is dismissed. 4. The second respondent's costs application is refused.

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: 13 December 2018

At a glance

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Judgment (19 paragraphs)

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Legislation Cited (3)

Cases Cited (8)