RSK Construction Pty Ltd v Caruana [2019] NSWCATAP 246 | Case summary

NCAT Appeal Panel|2019-07-31

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 29 April 2019.
At the appeal panel hearing the Appellant (for convenience "the builder") was represented by Mr Kirsten who is the owner and operator of the Appellant company and the Respondent (for convenience "the homeowner") represented himself. We note the same appearances occurred in the original Tribunal hearing.
For the reasons set out below, we have decided to refuse to grant leave to appeal, to dismiss the appeal, lifted the stay order made 11 June 2019 and dismiss the Homeowners application for costs.

Background

The Homeowner wished to construct a concrete slab under a carport at his home in western Sydney. The Builder provided a quote for $3,850 which was accepted. The work was done in July 2018 which involved site excavation, formwork and placing of the concrete.
Afterwards, both parties brought applications in the Tribunal which were heard together. The Tribunal ordered the Builder pay compensation to the Homeowner of $4,500. The Builder brings this appeal against that order.

Tribunal proceedings and decision

The original application to the Tribunal was lodged by the Builder alleging the Homeowner failed to pay in full for the works (HB 18/38380). The Homeowner filed an application alleging the concreting work performed by the Builder was defective and a fence was damaged by the Builder during the work (HB 18/40597). Both matters were heard and determined by the Tribunal on 29 April 2019 (HB 18/40597).
Although the matters were allocated numbers in the Home Building list of the Consumer and Commercial Division, it appears the matter was decided as a consumer claim within the Fair Trading Act 1987 because the Tribunal member said in the reasons that the matter "..probably did not satisfy the requirements of the Home Building Act..". That is likely to be correct because the amount in issue was less than the $5,000 threshold in the Home Building Act 1989 (refer to Cl. 2(3)(a) of Sched. 1 of the Home Building Act).
Although the reasons do not refer to the Fair Trading Act, the reasons are consistent with the claims being determined on that basis (rather than the Home Building Act) and we will approach the determination of this appeal on that basis. When brought to the attention of the parties at the appeal hearing, neither party submitted that interpretation was wrong.
The Tribunal relevantly found that: 1. The Homeowner relied on quotes from concrete contractors and an inspection report from an experienced concreting contractor, Edward Robar, as well as photographs 2. The Builder did not rely on any independent expert evidence (we will return to this aspect below). 3. The Homeowner alleged the concrete was defective. The Builder did not concede this but said the Homeowner interfered with the concrete as it dried and asserted that this is the cause of the defective result. 4. The Tribunal was not satisfied that anything done by the Homeowner had a significant effect on the outcome of the job. 5. The Tribunal found the concrete work was defective and the Builder was liable for the defective work, even if faulty products were supplied to him by 3rd parties, such as the concrete supplier. 6. Replacement was necessary (we will return to this below) 7. The quotes for repair supplied by the Homeowner were unreasonably high and the Tribunal accepted the Builder's original quote as a reasonable measure of damages to re-lay the concrete slab. 8. After allowing for the cost of removal ($1,820) and cost to re-lay the slab ($3,800), noting excavation work had already been done, then deducting the amount still owing to the Builder, the Tribunal determined replacement costs at $4,270 9. The Tribunal was also satisfied that an amount of $230 for the repair and cleaning of a fence damaged by the Builder, making the total amount ordered to be paid of $4,500.

Scope and nature of internal appeals

Internal appeals may be made as of right on a question of law, and otherwise with permission (that is, the "leave") of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (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 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; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.

Submissions and evidence

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

The Notice of Appeal lodged on 27 May 2019 and attached documents. The Builder did not provide any further submissions.
The Reply to Appeal lodged on 5 June 2019
A large bundle of documents supplied by the Homeowner on 17 July 2019
An application for "additional costs" made by the Homeowner and filed 17 July 2019
Significantly, neither party provided a copy of the sound recording or transcript of the hearing on 29 April 2019, despite Directions being made to that effect on 11 June 2019 by the appeal panel constituted by M Harrowell Principal Member. On the same date the order made 29 April was stayed until further order of the Tribunal.

Notice of Appeal

The Notice of Appeal was lodged on 27 May 2019, which is within 28 day time period specified in cl 25(4) of the Civil and Administrative Tribunal Rules 2014 (the Rules).
As the Appeal Panel noted in Prendergast at [11], it is necessary that a question of law be stated with precision, as an appellant's right to appeal arises from the question of law. However, in circumstances where the appellant is not legally represented, as is the case for the Builder here, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally: Prendergast at [12]. Therefore, 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.
In Cominos v Di Rico [2016] NSWCATAP 5, the Appeal Panel stated 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.
After lengthy discussion during the appeal hearing, the Appeal Panel, with the agreement of the Builder, distilled the following three (3) elements in its appeal.

First Ground of Appeal - Evidence admitted in error

The Builder said the Homeowner's expert evidence was admitted in error because the evidence did not comply with NCAT Procedural Direction 3 relating to expert evidence.
In the course of the hearing, the appeal panel drew to the attention of the Builder that pursuant to clause 11 of NCAT Procedural Direction 3, the Direction applies to only certain limited proceedings in NCAT. The proceedings appealed from arguably do not come within Clause 11 and so it might follow that the Procedural Direction did not apply in this matter, so any breach of it could not found an error.
The Builder withdrew this ground of appeal during the appeal panel hearing.

Second Ground of Appeal - denial of procedural fairness

The Builder argued that he had been denied procedural fairness because the Homeowner had denied him reasonable access to the work site in order to inspect it, take photographs and if necessary, to engage an expert to support his case.
It was common ground between the parties that at a Directions Hearing on 29 January 2019, in preparation for the Tribunal hearing, an order was made that the Builder be given access with 24 hours notice. On the same day, the Builder sent an email to the Homeowner seeking access. The Homeowner replied saying the only time he would allow access was 8pm. The Builder complained that it was too late with too little light to see properly or take photos and offered to come at 7pm. The Homeowner refused.
The Builder did not attend at 8pm. It appears the Builder was then discouraged and did not seek access again from the Homeowner, believing it had been denied access. It did not bring the matter back to the Tribunal to complain of the lack of access (or reasonable access) and to seek appropriate directions because it did not have legal advice and was unaware that was the correct procedure.
The Appeal Panel are satisfied that the ultimate failure to obtain reasonable access (if that is what occurred) does not amount to a failure by the Tribunal to provide procedural fairness as it had given the Builder had the opportunity for access by the order at the directions hearing but failed to take appropriate steps to secure it.
The then Builder then says it complained of this at the hearing on 29 April but did not seek an adjournment saying, again, that he was unaware that he could do so. Importantly, the Homeowner did not concede that the allegation of a failure to provide reasonable access was raised as an issue at the trial on 29 April 2019, saying he could not remember.
The failure of the Builder to seek an adjournment does not end the matter since in some circumstances, the Tribunal is obliged to offer a party an adjournment in order to provide procedural fairness Jackson v NK Tiling [2017] NSWCATAP 106.
However, in this case the Appeal Panel did not have the transcript or sound recording of the hearing on 29 April. As mentioned, directions had been made on 11 June 2019 regarding the provision of a transcript or sound recording, if relevant.
The parties were unable to agree on what occurred at the trial. In the absence of the sound recording or a transcript, we are unable to determine if the circumstances were of a kind where the member should have raised the issue of an adjournment with the Builder.
Accordingly, we are of the view that in accordance with the principles referred to above, we cannot be satisfied that, in order to comply with its obligations under s 38(5) of the CAT Act, the Tribunal ought to have offered the appellant an adjournment even though it did not ask for one.
We cannot identify an error of law relating to procedural fairness and this ground of appeal fails.

Third Ground of Appeal - compensation was ordered rather than rectification

The Appeal Panel noted that as the Home Building Act did not apply to this claim so s. 48MA of that Act, which provides that rectification is the preferred outcome, also does not apply.
The question then is whether, as a matter of general law, there was evidence to support the conclusion that removal of the slab was justified in this instance.
The Builder said there was not enough evidence that the existing slab should be removed and replaced. The Homeowner said that there was evidence at the hearing that grinding and resealing would not work and that he submitted to the Tribunal that it was appropriate to rip up the slab and re-lay it.
The Tribunal noted the expert Mr Robar did not say the whole job needs to be replaced but the Tribunal did make a finding that the "work will continue to deteriorate" and that replacement was reasonably necessary.
The Homeowner did provide to the Appeal Panel copies of his evidence provided to the Tribunal. This included photographs, quotes from various contractors relating to the two alternatives, namely grinding back and re-sealing or complete replacement.
The Appeal Panel notes that the quotes for resealing refer to the necessity to repeat the resealing at intervals of between two and eight years (refer pages 131 to 138 of the Homeowner's bundle), apparently for an indefinite period in the future as no limit is placed upon it.
We accept that it was against the background of potentially repeated re-sealing costs over an indefinite time in the future, that the Tribunal has found full replacement as the preferred option. On that basis we find there was evidence to justify replacement. As the Tribunal observed, the evidence in this case was not strong on either side, nevertheless, there was some evidence upon which the finding was based and therefore there was no relevant error.
We conclude that the Builder has not demonstrated the Tribunal made any errors of law.

Leave to Appeal

Because, in our view, there are no Grounds of Appeal raising questions of law, we now give consideration as to whether leave to appeal should be granted.
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.
For the reasons which follow, we are of the opinion that leave to appeal should not be granted. Essentially, this is because it is our view that the Builder has not demonstrated that there is a significant possibility that it has been deprived of a chance that was fairly open of achieving a better outcome than occurred. Nor would we exercise the discretion to grant leave to appeal under s 80(2)(b).
To elaborate upon the above conclusions, the Builder argued first that the outcome was against the weight of evidence and was not fair and equitable. In support the Builder raised the same arguments for leave as it has raised in its submissions on errors of law in Grounds 2 and 3 above. We are satisfied for the reasons given above that the Builder did not suffer a substantial miscarriage of justice as a result.
The Builder also argued that significant new evidence has arisen since the Tribunal hearing. He said this was a report from an expert concerning the appropriate amount of compensation if rectification were ordered (allegedly $1,700) being significantly less than the amount ordered by the Tribunal ($4,500). The Builder said this report had been obtained recently, only since the Directions hearing on 11 June 2019. He did not have a paper copy of the report but provided details verbally to the Appeal Panel from his phone. The issue was first raised during the Builder's submissions in reply.
The reason why this submission fails is that there is no evidence or explanation as to why it was not reasonably available at the time the proceedings under appeal were being dealt with, apart from the issue of access which for the reasons above, has been determined against the Builder. We are not satisfied that the new evidence is evidence that was not reasonably available at the time of the Tribunal hearing.
We are not satisfied that, even if there has been a miscarriage of justice on one of the grounds identified in cl 12(1) that we should grant leave. This is because we are of the opinion that there are no issues of principle, no questions of public importance or matters of administration or policy which concern this appeal. Nor are we satisfied that the Builder has suffered an injustice which is reasonably clear.

Homeowners application for "additional costs"

By a document filed 17 July 2019 the homeowner sought an order for "additional costs" incurred by him since the Tribunal decision. We understand this application to be the homeowner seeking his costs of the appeal. The amount claimed is $318.80 is made up of travel costs and lost wages.

Relevant principles

The relevant costs rule appears in s 60 of the Civil and Administrative Tribunal Act 2013 (NSW). That section provides: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
Rule 38 of the Civil and Administrative Tribunal Rules 2014 (the Rules) modifies the application of s 60 in proceedings before the Consumer and Commercial Division of the Tribunal and Rule 38A modifies the position in respect of appeals. The effect of Rule 38 is that where what is claimed or in dispute in the proceedings before the Consumer and Commercial Division exceeds $30,000, an award of costs can be made in the absence of special circumstances. The effect of Rule 38A is that on appeal, the same costs provisions apply as applied in the Tribunal below. However, as the amount claimed in this matter does not exceed $30,000 so s. 60 applies, unmodified by Rules 38 or 38A.
Section 60 has been considered in many cases. In Flat Glass Industries Ltd v MCS Builders Pty Ltd [2015] NSWCATAP 148 the Appeal Panel stated at [43]: Section 60 has been considered in many recent decisions: see for instance CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21; Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120; Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48; and Rose Nettis Pty Ltd v Three Tall Trees Pty Ltd [2015] NSWCATAP 51. As the Appeal Panel noted in eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]: The authorities considering the meaning of the expression "special circumstances" were recently reviewed in CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]- [31]. From those authorities, it can be seen that "special circumstances" are circumstances that are out of the ordinary, they do not have to be extraordinary or exceptional. Further, the discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. Each situation must, of course, be assessed on a case by case basis to see whether or not special circumstances exist so as to warrant the award of costs.

Are there special circumstances warranting an award of costs?

The homeowner's submissions identify and particularise the costs for travel and lost wages. The Homeowner's submissions do not identify any "special circumstances".
We are not able to identify any special circumstances of the kind mentioned in S. 60. For instance, the trial and appeal were conducted with reasonable efficiency and fairness by the Builder, while the ultimate decision was not favourable to the Builder, the appeal could not be said to lack substance or to lack a tenable basis in law. We are unable to identify any other matters which might give rise to special circumstances in this case.
The discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. Each situation must be assessed on a case by case basis to see whether or not special circumstances exist so as to warrant the award of costs: eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48].
We are not satisfied that there are special circumstances warranting an order for costs in this matter.

Orders

In light of the above, the appropriate orders are 1. Leave to appeal is refused; 2. The appeal is dismissed; 3. Stay order made 11 June 2019 is lifted; and 4. The application for costs is 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: 04 October 2019

RSK Construction Pty Ltd v Caruana

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Judgment (15 paragraphs)

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Legislation Cited (1)

Cases Cited (13)