Scoular v Ostle

NCAT Appeal Panel|2018-07-31

Introduction

This is an appeal by John and Susan Scoular who carry on a business known as Industrial Electrical Services.
The appellants supplied a solar panel system to the respondent which was installed at the respondent's property located in northern New South Wales. The work was carried out pursuant to a quotation dated 6 December 2016 for an amount of $11,883.00.
The appellants had commenced proceedings in the Local Court of New South Wales No 2017/283399 in which they claimed for materials supplied and work done at the premises of the respondent and completed in about May 2017. The Local Court proceedings were commenced on 18 September 2017. These proceedings were transferred to the Tribunal and were heard by the Tribunal on 1 May 2018.
The Tribunal made an order in favour of the appellants that the respondent pay to them a total of $8584.05 This amount was made up of the cost of labour and materials for the supply of the solar system of $12,084.05 (being the amount in the quotation of $11,883.00 together with additional amounts for a power point, disconnecting off-peak metering, installing a service fuse and for the supply of an 80 amp service fuse) less an amount of $3000 for a government rebate for the solar system which was unable to be claimed and an amount of $500 being the assessed cost of labour and materials to rectify defective works.
The appellants appealed this decision by way of notice of appeal filed 14 May 2018. The grounds of appeal were that the Tribunal was in error in deducting an amount of $3000 in connection with a rebate and deducting an amount of $500 for defective work.
The appeal was lodged in time.

Consideration

There is a right of appeal on a question of law and otherwise leave to appeal is required: see s 80(2)(b) of the Civil and Administrative Tribunal Act, 2013 (NSW). To be granted leave to appeal a decision of the Consumer and Commercial Division, an appellant must show they may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, against the weight of evidence, for there was significant new evidence that was not reasonably available at the time of the original hearing: see Sch 4 cl 12 of the NCAT Act. The principles in Collins v Urban [2014] NSWCAPAP 17 are applicable in deciding whether or not leave should be granted.
In its reasons, the Tribunal reached the following conclusions: 1. One would expect that if there was a significant matter raised in relation to a contract for the supply of goods and services "it would be clearly incorporated in any quote an notation": time mark 1:05:25. 2. There would be difficulty in accepting that a person purchasing solar system for which a rebate of $3000 was available would not avail themselves of an opportunity to claim that rebate. Consequently, it was appropriate to reduce the amount claimed by the sum of $3000: time mark 1:05:25. 3. The respondent had not brought any cross claim for the costs of fixing any defects in the solar system. There were no costings of the cost of repair which is "a matter of law": time mark 5:07 and 5:39. 4. There was no real evidence that the work was so defective it could not be repaired and the respondent "could and certainly in law should have left all the material there and given the [appellants] the opportunity to repair it": time mark 1:06:43.
It is convenient to deal with the grounds of appeal under the following headings: 1. Deduction for rebate; 2. Deduction for defective work.

Deduction for rebate

As stated above, the appellants' primary contention is that the quotation was accepted by the respondent prior to the carrying out of the work. Consequently, there was no term of the contract requiring that a rebate be available to the respondent. Amongst other documents, the appellants relied on the contents of the quotation together with the statement of the first appellant dated 14 February 2018.
The appellants said the work was not illegal, being performed by a qualified electrician, however the rebate could not initially be claimed because the appellant was not relevantly accredited with the agency providing the rebate. While the appellants were not obliged to do so, after the work was carried out they had agreed to obtain accreditation and to disconnect and reconnect the solar system so as to qualify for the rebate scheme. However, at the end of the day they were not able to carry out this proposal because the respondent chose to disconnect the system and have it replaced with a system from an alternative supplier.
In oral submissions in reply, the respondent said that there had been no discussion of the rebate prior to or at the time she accepted the quotation, nor had the appellants otherwise indicated to her that a rebate would be available. She did not identify any documents by which the appellants otherwise represented she would receive a rebate. Rather, she said she had an "understanding" that she would be entitled to a rebate if the solar system was installed.
The respondent also submitted that the installation of the solar system without being accredited was "illegal". However, she did not point to any legislation or other requirement indicating that a solar system could be supplied without the offer of a rebate.
There is no suggestion in the present appeal that the claim made by the appellants was not a building claim within the meaning of the Home Building Act, 1989 (NSW) (HB Act). Rather, the issue was whether or not it was a term of the contract that the respondent would be able to claim a rebate in connection with the system installed and/or have the price of the goods and services supplied reduced by an amount equivalent to such a rebate.
In this appeal, the respondent said to the Appeal Panel that the issue of the rebate was not discussed prior to her oral acceptance of the quotation and she did not refer us to any documents to suggest that any representation was made about its existence or about whether the appellants were accredited installers for the purpose of the rebate scheme.
We do not have all the relevant evidence of both parties, or a full transcript of the reasons of the Tribunal. However, this concession by the respondent cannot be correct having regard to the paragraph 2 of the first appellant's statement dated 14 February 2018, which was part of the evidence at first instance. In that statement, the first appellant said: 2. December 2016 a quote was supplied (Exhibit 1) and Susan Ostle accepted the quote, at that time I told Susan Ostle that she would better off to use someone else as I was not accredited to claim government solar rebate (REC) but she insisted I do the work. I told her that I would look into the government rebate scheme and see how it operated
Clearly the issue of the rebate was discussed at or before the time the quotation was accepted. The Tribunal, in its reasons, appears to have accepted that there was no provision for a rebate in the quotation: time mark 1:03:40. This was obviously correct having regard to the content of the quotation. However, the Tribunal found at time mark 1:05:25: There are two reasons that I find in favour of the respondent. 1 Because if that significant matter had been raised you would have expected it to be clearly incorporated in any quote and notation. That being a very relevant matter for people purchasing solar equipment. 2 I have difficulty in accepting they could save $3000 on a $12,000 job would not avail themselves (sic) of that opportunity. So in relation to the solar credit I am going to reduce the amount of the claim by the applicant of $3000 being the available solar credit.
In effect, the Tribunal appears to have rejected the appellants' submission that the offer of a rebate was not part of the original contract. Rather, the Tribunal appears to have accepted that the offer made by the appellants was partly oral on terms that the appellants would be paid in part by the rebate to be claimed after the works were completed.
In doing so, insofar as the appellants were asserting a subsequent agreement to claim a rebate was first raised after the work was carried out (and therefore not part of the terms of the contract), the Tribunal appears to have rejected the evidence of the first appellant at paragraph 8 of his statement dated 14 February 2018. This evidence was to the effect that the rebate was discussed in the context of the appellants requesting payment on 20 June 2017 (after the work had been completed) and saying that the appellants would seek accreditation to enable the rebate to be subsequently claimed, subject to a "$250 charge" in order to secure payment for work already performed.
The conclusion of the Tribunal is consistent with the subsequent written document prepared by the appellants dated 29 June 2018 which forms part of the respondent's bundle in this appeal and was in evidence before the Tribunal. This document was prepared by the appellants and, relevantly, says: 1 5KW solar system. Total cost being $11,883.00 as per quote. Dated 6/12/16. This does not include any deduction from total price for the Government rebate. This rebate will be applied for after installation and proceeds paid to S Ostle directly from the Australian Government Clean Energy Regulator. … This contract also incorporates our terms and conditions of sale. … This quote was accepted by Susan Ostle on or about December 2016.
In this regard we note there is no reference in the written agreement to deduction of a "$250 charge", a fact inconsistent with the statement of the first appellant at paragraph 8 as to what were the terms of the contract and the conversation between the parties on 20 June 2017.
It follows that we find no error in so far as the Tribunal concluded it was a term of the contract that the appellants would take steps to carry out the work in a manner that would enable an application for a rebate to be made by either the appellants or the respondent and applied against the contract price of $11,833 plus certain other costs.
However, the Tribunal does not explain why a deduction for the rebate should be made from the price for the goods and services which were delivered in circumstances where the respondent decommissioned the solar system and installed an alternative system. In this regard, neither party submitted to us that the rebate was recoverable whether or not the system was installed and completed. Rather, both parties appeared to accept that the rebate was only payable when the system was installed by an accredited installer. This required the respondent to allow the appellants to complete the work so the rebate could be claimed.
The Tribunal found at time mark 1:06:43: I then had to come back and look at the claim as it has been brought in taking into account the evidence of the respondent concerning defective work. There is no real evidence that the defective work, there is no evidence at all that there was any defective materials so the major part of the installation costs would remain. The respondent could and certainly in law should have left all that material there and given the applicant the opportunity to repair it.
It seems to us that the actions of the respondent in not allowing the appellants to complete the work, as found by the Tribunal, prevented the appellants from completing the installation and commissioning work. In this regard, on the Tribunal's findings, there were some defects which the appellants should have been given an opportunity to repair. However, the defects were not such to constitute a fundamental breach of the contract by the appellants so as to enable the respondent to terminate the contract and be relieved of paying any amount under the contract.
The respondent variously submitted that the work carried out was a "terrible job" or "just a joke". In this regard, reference was made to the statement of the first appellant at paragraph 5 where he says: 5. There were a few minor jobs to complete due to lack of materials that were listed on our job schedule. (S/Steel cable ties, earthing clips and some labelling adhesive).
The respondent also referred to the reports of Namoi Sustainable Energy dated 19 September 2017 and 1 February 2018. The report dated 1 February 2018 said: To fully rectify the problem, we suggest the original DC cable be removed from underground and replace properly sized AC cable due to the amount of incorrect installation procedures present. … Our recommendation to Susan was to remove 100% of the original installers equipment at start fresh (sic) due to the multiple installation errors, returning all equipment to the original installer also so he could remove his statement of claim for payment.
In our view, neither the statement of the first appellant nor the reports provided by Namoi Sustainable Energy Pty Ltd support a conclusion that the solar system supplied by the appellants could not be relevantly rectified. Rather, the evidence suggests there were defects which could be rectified or incomplete work which could be carried out to bring the solar system into a state of completion.
It follows that there is no basis to conclude the Tribunal's finding that the respondent failed to allow the appellants to carry out necessary repairs was in error.
The question remains as to whether, in these circumstances, the Tribunal was correct to deduct the amount of the rebate from the amount due to the appellants.
It seems clear to us that it was not possible to obtain a rebate in circumstances where the solar system supplied by the appellants was decommissioned prior to any claim being made. Neither party suggested to the contrary.
If the contract had been performed, the appellants would have received the amount of the quotation plus other costs, namely $12,084.05, of which $8584.05 would have been paid by the respondent, the balance funded from the proceeds of the rebate.
Because the respondent decided to purchase a new solar system, despite the fact the one supplied by the appellants could be completed or made good, this meant that the rebate could never be claimed. Consequently, the appellants would never be paid the full purchase price for goods supplied and delivered.
The Tribunal does not explain why a deduction was made by it in these circumstances. The failure to provide adequate reasons constitute an error of law: see eg Collins at [56]-[60] and the cases referred to therein and Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 443-4.
In our view, the Tribunal was in error in making a deduction of $3000 from the amount due to the appellants for the unrecovered rebate. This is because the sole reason why the rebate could not be recovered was the respondent deciding to decommission the solar system and engage Namoi Sustainable Energy Pty Ltd to provide a new and different system. In these circumstances, not allowing the work to be completed constituted a breach of the agreement by the respondent and there is no reason to deprive the appellants of an amount equivalent to the rebate which could not be recovered due to the actions of the respondent.
While the respondent asserted the rebate could never be claimed because the appellant was not accredited, there was no finding by the Tribunal to which we have been referred to the effect that accreditation could not subsequently be obtained, nor any evidence presented in the appeal to support a conclusion that accreditation could not be retrospectively obtained.
Accordingly, the amount of the award made by the Tribunal should be increased by $3000 to $11,584.05.

Deduction for defective work

The respondent submitted that the system was defective and needed to be removed. For the reasons outlined above, we do not accept this submission. In this regard we also note the respondent provided no evidence to support the costs of undertaking any defect rectification work. While she relied upon correspondence from Namoi Sustainable Energy Pty Ltd to which we have referred, this material contained no evidence about the cost of rectifying or completing the solar system supplied by the appellants.
The appellants challenge the conclusion of the Tribunal to allow a deduction for defective work in the sum of $500. In doing so, they pointed to the Tribunal's conclusions at time marks 5:07 and 5:39 and 1:06:43 where the Tribunal found there was "no real evidence" of the cost of fixing any defects. However, in the course of the hearing, the Appeal Panel drew to the attention of the appellants paragraph 5 of the statement of the first appellant dated 14 February 2018. There, the appellants accepted that there were "a few minor jobs to complete due to lack of materials". At the hearing of the appeal, the first appellant conceded $500 should be allowed for this work.
In these circumstances, and in the absence of any other evidence to prove the cost of repairing defects or incomplete work to the solar system supplied by the appellants, there is no basis to alter this allowance of $500 made by the Tribunal.
Accordingly, this aspect of the appeal should be dismissed.

Orders

The Appeal Panel makes the following orders: 1. The appeal is allowed in part. 2. The order 1 made 2018 is varied from $8584.05 to $11,584.05. 3. Save as provided above, the appeal 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: 06 August 2018

At a glance

Court

Decision date

Source

Judgment (7 paragraphs)

Parties

Cases Cited (3)