Shakiri v Holland

NCAT Appeal Panel|2023-12-06

Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 Mann v Patterson Constructions Pty Ltd [2019] HCA 32; 267 CLR 560; 93 ALJR 1164 Pavey & Matthews Pty Ltd v Paul [1987] HCA 5, 162 CLR 221 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Sengos v Hassan [2022] NSWCATAP 366 Southwestern Sydney Area Health Service v Edmonds [2007] NSWCA 16 The Owners - Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWSC 116 Vujica v TNM Roofing Pty Ltd [2022] NSWCATAP 305 Whear v Kids on Hayes Street Pty Ltd [2021] NSWCATAP 123 Texts Cited: (Australian Building Codes Board) (2016) National Construction Code NCAT Procedural Direction 3 - Expert Evidence Category: Principal judgment Parties: Sam Shakiri (First Appellant) Libarda Shakiri (Second Appellant) Matt Holland (Respondent) Representation: P Matters (agent) (Appellants) Respondent (self-represented) File Number(s): 2023/00261710 Publication restriction: None Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: NA Date of Decision: 31 July 2023 Before: R Titterton, Senior Member File Number(s): HB23/05934 HB23/26657

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, the permission) of the Appeal Panel: s 80(2) of the NCAT Act.
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 (Full Fed Ct), [2000] FCA 1343 at [45], applying the statement of principle in Craig v The State of South Australia (1995) 184 CLR 163 at 179.
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?
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: (a) the decision of the Tribunal under appeal was not fair and equitable; or (b) the decision of the Tribunal under appeal was against the weight of evidence; or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
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 have 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].
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 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 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.
In the NCAT Act, s 81 deals with the 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.
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.
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.

Outline of the appealed decision.

As already noted, the decision determined two applications. First, the builder's application for payment of moneys due for work done. The second, the homeowners' application for substantial rectification orders, and that they did not have to pay the builder for the work done.
In written reasons the Tribunal provided a brief summary of materials filed by both parties and noted that both the builder and the male homeowner gave evidence. The list of materials provided by the builder included copy invoices and: 7 an email of Adrian Naulty of Bass Point Quarry dated 2 February 2023 stating "I can confirm the concrete inspected by me and referred to in the below report did not show any structural cracking at the time of inspection". 8 an email from Mr Abdel Alkherebi to Mr Holland dated 6 February 2023 relevantly stating: "After a quote requested by owner of the address [XXX] Berekely to re do (remove existing driveway and pathways) due to minor cracks on his new concrete driveway that been completed by another concrete contractor and I've been advised by the owner that concrete work caused the cracks, although after taking measurements and checking levels, falls and depth of concrete slab I found all work is neat and done correctly. Unfortunately cracks can be caused by low quality mix from concrete supplier". 8 another email of Mr Abdel Alkherebi to Mr Holland dated 6 February 2023 stating: "On Monday 16th of January 2023 Sam Shakiri owner of address [XXX] Berkely requested quote /advise for is (sic) recently poured driveway and pathways to discuss wither the concrete work was done correctly or not, client mentioned that M.T.L concreting were unable to commence the job correctly and that he would go visit previous work done by M.T.L to check quality, he also mentioned that he visited a few locations in Kembla grange and spoke to residents
The Tribunal also noted with respect to the homeowners' claim that: At the hearing, as the Shakiris had no evidence establishing the costs of the rectification of any defect, instead of seeking a money order in relation to the defects they sought rectification of the alleged defects related to their driveway, concrete paths, water tank, side fence and retaining walls.
The Tribunal's decision addressed three broad issues. They were: 1. The nature of the contract between the parties. 2. The builder's claims. 3. The homeowners' claims.

The nature of the contract between the parties.

The Tribunal reviewed the evidence relating to the formation of the contract between the parties, and noted that there were gaps in that evidence, especially due to the absence of a statement from the builder. The Tribunal also noted that the builder had produced his quotation for the works which was not accepted as correct by the homeowners. They relied on another quotation, which was said to include the construction of a front retaining wall, but a copy of that quotation was not produced. The Tribunal found that: 1 On or about 13 April 2022, Mr Holland attended the Shakiris' property for the purpose of providing a quotation for a driveway and concrete paths around their house. 2. On or about 15 April 2022, Mr Holland sent the Shakiris a quotation dated that day in the amount of $30,936.40 for the following work: New driveway and paths Supply list Concrete charcoal colour Steel Expansion joint Excavations Road base Council permit Form ×2 sets of stairs Form drop edge Saw cutting of concrete when finished Removal of all dirt All labour" 3. On or about 17 April 2022, Mr Shakiri accepted the quotation when he telephoned Mr Holland and told him that "the job was his". 4. The scope of works to be undertaken by Mr Holland is set out in the paragraph numbered [2] above. It is to be noted that I do not find that construction, repair and/or changes to retaining walls formed part of the contract between the Shakiris and Mr Holland. This is for a number of reasons. First, clearly enough, there is no reference to retaining walls in the quotation accepted by Mr Shakiri. Secondly, it was common ground that the retaining walls were in fact built by another contractor. Thirdly, the only evidence of the Shakiris on the issue was as follows (and here I take Mr Shakiri's affidavit evidence as an example): "3. On 13 April 2022, I and [my wife] met with [Mr Holland] to engage him to concrete the front driveway, side and rear paths and to construct a front retaining wall. 4. On the 23rd April 2022, [Mr Holland] emailed a quote of costs for the work for the work I and [my wife] had specified to him. ... 8. On 15 August 2022, [Mr Holland] with some workers commenced work on the retaining wall. 9. To this day of making this affidavit the work on the retaining wall is not completed". On this issue I entirely accept the evidence of Mr Holland, who forcefully and persuasively denied the propositions put to him by Mr Matters that he had constructed the wall, and/or paid his employees or sub-contractors to do so. I find that Mr Holland, acting on Mr Shakiri's request, provided an introduction for certain labourers to work on the retaining wall as requested by Mr Shakiri, and while Mr Holland provided monies to those labourers, that was Mr Shakiri's money which Mr Holland was simply passing on. To this extent, I accept Mr Holland's descriptions that he was acting as some sort of "middle man". I reject Mr Matters' proposition that these unnamed persons were employees or sub-contractors of Mr Matters, and there is no probative evidence from the Shakiris on the matter. Finally, the quotation refereed (sic) to by Mr Matters and put to Mr Holland in cross-examination was not referred to or attached to either Mr or Mrs Shakiri's affidavit, and Mr Matters did not tender (or attempt to tender) that quotation which was never sighted by the Tribunal. … 4. The work was completed in two tranches. The first tranche, which consisted of the concrete paths around the Shakiris' home, was completed on 26 October 2022. 5. On 26 October 2022, Mr Holland sent the Shakiris invoice no 40 dated 26 October 2022 for "plac[ing] and concrete around house" in the amount of $14,300.00. 6. It is common ground that that amount was paid by the Shakiris to Mr Holland shortly afterwards. 7. The second tranche of work, being the driveway, was completed on 20 December 2022. Here I note that the Shakiris each say in their affidavits that Mr Holland completed the work on the front driveway, side and back paths "as agreed". 8. On 20 December 2022, Mr Holland sent the Shakiris invoice no 49 dated 20 December 2022 in the amount of $16,638.34 for: poured new driveway Supply labour(concrete) Pump (sic) all labour Place and finish concrete. 9. On 22 December 2022, Mr Shakiri rang Mr Holland and told him that he would not be paying the invoice as his work was defective. Apparently, cracks had already developed in the driveway, although there was no probative evidence before me, photographic or otherwise, establishing that there [were] cracks on this date. However, Mr Holland accepted accepted (sic) that "shrinkage cracks" could manifest themselves in as little as two days after a pour. 10. The Shakiris did not then, and have not since, paid invoice no 49.
It is important to note that the Tribunal found a contract between the builder and the homeowners for concreting works, for the quoted price of $30,936.40, which contract was not in writing, but was evidenced by the quotation.

The builder's claim.

The Tribunal then considered Mr Holland's claim for the outstanding sum of $16,638.34.
The homeowners argued that the defective nature of the completed work performed by the builder was such they should not have to pay him. In addition, the homeowners submitted that because the builder had not complied with s 37 of the Design and Building Practitioners Act 2020 (NSW) (the BDP Act) they were not obliged to pay him.
With respect to the first argument that Tribunal said: As I explained at the hearing, but [was] `apparently not accepted by the Shakiris, if the work has been completed (which the Shakiris admit in their affidavits it was), Mr Holland is entitled to be paid the contract sum agreed to. If the work is defective, they are entitled to rectification or a money order - but Mr Holland is still entitled to be paid. (our emphasis)
With respect to s 37 of the BDP Act, the Tribunal noted that the purpose of the section was to create a statutory duty of care, on persons who carry out construction, to exercise reasonable care to avoid economic loss to subsequent owners caused by defects in the building. As the Tribunal noted, this overturned the effect of the High Court decision in Brookfield Multiplex Ltd v Owners Corporation Strat Plan 61288 (2014) 254 CLR 185, as discussed in The Owners - Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWSC 116 at [15]. The Tribunal concluded: I see no basis in s 37 operating to prevent Mr Holland's being paid for his completed work.
The Tribunal therefore ordered the homeowners to pay the builder the amount outstanding for the contracted works of $16,638.34.

The homeowners' claims.

The Tribunal then turned to consider the homeowners' application for rectification orders. The Senior Member rejected all claims for rectification apart from those relating to the driveway and pathways. He explained: As noted above, I am not satisfied on what scant evidence there is that the retaining wall formed part of Mr Holland's contracted works. And as for the water tank and side fence, there is not an atom of evidence in the Shakiris' evidence to support any claim.
With respect to the driveway and pathways, the Tribunal noted that the dispute between the parties was as to the extent of the rectification work required and its causes. The homeowners wanted the works to be demolished and redone. The Tribunal noted that the builder: … says that the cracking in the concrete is caused by shrinkage is superficial, common (sic) and not a structural issue. In those circumstances, he is prepared to fill any gap with concrete crack filler (which is specifically designed for the purpose) and to colour seal all the concreted areas.
The Tribunal then went on to outline and consider a report relied on by the homeowners from RK Knightley, a consulting structural engineer from RJK Consulting Engineers, dated 19 June 2023 (the RJK Report). It addressed structural issues relating to the concrete driving and pavement, and the retaining wall construction. As the Tribunal had found that the retaining wall was not within the scope of the contracted works, those parts of the RJK Report were irrelevant.
The Tribunal described the content of the RJK Report: At 10.1.1 the RJK Report states, by way of introduction, that: "the concrete drive way has considerable cracking and slumps which increase the structural inadequacy of the driveway to resist loads over a long term due to deterioration whilst the pavement areas have cracking and incorrect falls allowing water to be directed to the house". After setting out in Section 10 observations of the driveway's location and size and placement, the RJK Report then states: "10.3.7 Observations were also noted in regard to the numerous horizontal cracks in the concrete pavement. These were measured using a crack gauge and found at the widest point to be in excess of 1mm and in most cases up to 1.4 mm wide. These cracks where measured to extend up to 1000mm in length with the majority of the length being at a width of greater than 1 mm. These cracks also were noted to be proceeded down slope by an [sic] slump in the concrete which was measured to be 5 to 15 mm at the max dip in some cases as seen in Photo 6 & Photo 7". That is the totality of the description of the alleged defects to the driveway. As for the pathways, the RJK Report states: "10.3.8 Observations were made of the pathway around the eastern northern and western side of the house. These paths where measured and found to either be flat in grade or slope towards the dwelling in most cases which in turn resulted in water ponding beside the dwelling or entering through weep holes. ... 10.3.9 Observations were also noted that at numerous locations the pathway around the building covered weep holes or restricted their ability to vent the wall cavity. It was also observed that termite barrier systems is [sic] also compromised. 10.3.10 It was also observed that termite barrier systems is [sic] also compromised by the concrete path". The RJK Report then sets out various provisions of the National Construction Code and Australian Standards and states: "10.7.1 The driveway and pathways cited in Paragraphs 10.3 of this Report are required to support the load of vehicles, maintenance loads, pedestrian and pressures applied to the [sic - ?] as a result of the action of soil movement. 10.7.2 It then follows, in my opinion, that the driveway and pavements have a structural function and hence must comply with the requirements of NCC Performance Requirement Paragraph P2.1.1, as set out at Paragraph 10.4 of this Report. 10.7.3 It then follows, in my opinion, that the pavements including the driveway must perform adequately under all reasonably expected design actions and withstand extreme or frequently repeated design actions, including forces that can be reasonably expected to act on the pavements during its design life. 10.7.4 It then follows, in my opinion, from NCC Paragraph 3.1 [sic - P3.1???], as set out at Paragraph 10.4 above, that the pavements must satisfy BCA Performance Requirement Paragraph P2.1.1 if they comply with the requirements of AS3727.1 - Part 1 Residential". The RJK Report then states: 10.8.1 Based on the facts, observations and opinions set out in Paragraphs 10.3 to 10.7 above, it is my opinion that the consequences are that, without rectification: (a) The driveway and pathways will become unstable and be lifted by the reasonably expected soil forces. Additionally, the driveway will become vulnerable to corrosion of the steel due to the large cracks allowing water to enter, in turn, allowing further cracking to occur due to steel corrosion. (b) The driveway will not satisfy the requirements of Paragraph P2.1.1 of the NCC that they perform adequately under all reasonably expected design actions and withstand extreme or frequently repeated design actions, hence breaching HBA Section 18B. (c) The path will not satisfy the requirements of Section 3.1.2.1 of the NCC due to the slope draining back towards the building, hence breaching HBA Section 18b (c).
The Tribunal then turned to consider the RJK Report.
The Senior Member first turned his attention to the expert's reliance of the National Construction Code (the NCC) and accepted that both a driveway and a pathway could constitute a structure for the purposes of the NCC. The Tribunal noted that the RJK Report was based on the 2016 NCC, not the current 2022 version, and questioned whether the applicable standards under the two versions were the same.
With respect to the expert's conclusions the Senior Member wrote: I have concerns about the whether the factual findings in the RJK Report actually support the Report's conclusions, and I have concerns about the conclusions themselves. … The RJK Report says there are two key reasons why the driveway and pathways need complete replacement. The first reason is that the driveway and pathways will become unstable and be lifted by reasonably expected soil forces. In my view the statement that the driveway and pathways will become unstable is but a bare assertion and not supported by any reasoning - this is an ipse dixit of the type so criticised by Lord President Cooper in Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh [1953] SC 34, noted by Macfarlan JA in Forster v Hunter New England Area Health Service [2010] NSWCA 106, when referring to Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705. The Lord President said: "The scientific opinion evidence, if intelligible, convincing and tested, becomes a factor (and often an important factor) for consideration along with the whole of other evidence in the case, but the decision is for the Judge or jury. In particular the bare ipse dixit of a scientist, however eminent, upon the issue in controversy, will normally carry little weight, for it cannot be tested by cross-examination nor independently appraised, and the parties have invoked the decision of a judicial tribunal and not an oracular pronouncement by an expert". Nor is it explained just how the driveway or the pathways will be lifted by "soil forces". As to the statement that the driveway will become vulnerable to corrosion due to the large cracks, quite apart from this also being a bare assertion, there is no statement of how deep these cracks actually are, and no analysis of any projected progress of the depth developing to such an extent that the reinforced steel within the concrete will corrode. As to the pathways draining back towards the building, the highest the evidence is that in 10.3.8 set out above. It is to be noted that no measurements are stated. Despite the length and detail of the RJK Report, I am not persuaded by its reasoning or its conclusions in relation to the issues before me.
The Tribunal then made the rectification order proposed by the builder, which was made conditional on payment of the money owing to the builder by the homeowners, as the Tribunal had, "considerable concerns that this amount will not be paid."

Material before the Appeal Panel.

We were provided with the following material when considering the appeal. 1. The builders Home Building application lodged 7 February 2023. 2. The homeowners' Home Building application filed on 2 June 2023. 3. The decision under appeal made on 31 July 2023. 4. Notice of Appeal filed 15 August 2023 with attachments. 5. Reply to Appeal received 28 August 2023 with attachments. 6. Directions made by the Appeal Panel on 21 and 30 August 2023 and on 8 and 29 September 2023. 7. Letter dated 30 August 2023 to Mr Holland from another customer and filed by him on 22 September 2023 8. Bundle of documents filed by the builder on 7 November 2023. 9. Bundle of documents filed by the homeowners on 26 October 2003 including outline of submissions and numerous attachments consisting of 346 numbered pages (the large bundle). 10. Affidavit of Sam Shakiri of 4 December 2013 with attachments (filed 6 July 2023).
Some of these contained material and evidence that was not before the Tribunal when making the appealed decision, and some postdated the hearing. As is discussed below, we did not admit it all into evidence on the appeal.
It is to be noted that we were not provided with an audio recording or transcript of the hearing. This is so despite the parties being ordered to provide a recording and relevant transcript if what occurred at the hearing was in issue.

Issues in the appeal.

The homeowners' outline of submissions relied on a series of questions of law. In summary these were: 1. Whether the Tribunal failed to take into account a mandatory consideration when it failed to give weight to the RJK Report because that report complied with the Tribunal's Procedural Direction 3 - Expert Evidence (PD -3) and, therefore, was entitled to, "presumptive weight"? 2. Whether the Tribunal took into account an irrelevant consideration by admitting into evidence and giving weight to the opinions expressed by Mr Naulty and Mr Alkhereibi in their emails (see par 18 above) when their expertise was not established, when they were not available to give evidence and be cross-examined, and when their emails did not comply with PD-3? 3. Whether the Tribunal applied the correct legal test when it rejected the RJK Report because the report's conclusion that "the driveway and pathways will become unstable" was "but a bare assertion and not supported by any reasoning"? 4. Whether by allowing the builder to "provide a defence" to the homeowners' claims relating to the retaining walls, orally, at the hearing, when he had not filed a statement in his defence, the Tribunal failed to afford the homeowners procedural fairness. 5. Whether the decision of the Tribunal with respect to the rectification required was groundless, in that it was based on no evidence. The homeowners explained that there was "no admissible evidence" before the Tribunal upon which it could make the findings it did, apart from "self-interested and self-serving submissions" from the builder.
During the course of the hearing a new issue arose which we identified and explained to the parties, and sought their submissions on. This was whether, in making the monetary order in favour of the builder, the Tribunal enforced a contract which s 7 of the Home Building Act 1989 (NSW) (the HBA) requires be in writing, and which s 10 provides is unenforceable, if not in writing?
In addition, the homeowners sought to rely on new evidence on appeal, both predating and post-dating the hearing. This required that we grant leave to appeal under cl 12(1)(c) of Sch 4 of the NCAT Act. The builder also sought to introduce new evidence on appeal.

Consideration of new materials sought to be relied on in the appeal.

Both parties sought to rely on materials that were not considered by the Tribunal when making its determination.
We heard oral submissions about the admission of new evidence from the parties when hearing the appeal.
The new evidence which the homeowners sought to rely on included: 1. Quote from Lagana Landscaping dated 23 October 2023 (after the hearing) - p 247 of the large bundle. 2. Quote from DMS Building Group for removal and reconstruction of driveway and pathways, dated 23 February 2023 (before the hearing) - p 248 of the large bundle. 3. Quote from Fasson Concrete & Formwork Pty Ltd dated 22 October 2023 (after the hearing) - p 250 of the large bundle. 4. The affidavit of Sam Shakiri dated 4 December 2023 with attachments.
Upon inquiry, the homeowners acknowledged that the affidavit of Sam Shakiri had not been served on the builder prior to the appeal hearing. This was so despite the Appeal Panel having set a timetable, which sought to ensure that each party was fully on notice of the other's case. The builder had not had an opportunity to consider the new evidence.
The same problem confronted the builder who had not served the homeowners with the bundle of documents he had filed on 7 November 2023, consisting of a mixture of documents already attached to his reply, and some new evidence. The homeowners initially sought an adjournment, if the Appeal Panel were minded to admit these materials, so that they could have time to consider them. This adjournment request was later withdrawn.
We decided not to admit Mr Shakiri's affidavit and the new elements of the builder's bundle filed on 7 November 2023 in the appeal. Neither party had been served with the material relied on by on the other party. They would each need time to consider them, if admitted. Both parties had previously been given ample time in which to serve the other with any materials they sought to rely on, but had failed to do so. In those circumstances we refused to admit that evidence before the Appeal Panel.
That left the documents specified in par 43 (1) to (3) to consider.
The quote from DMS Building Group for removal and reconstruction of driveway and pathways for $23,500, dated 23 February 2023, was in existence well before the hearing. It is addressed to Mr Shakiri. It was clearly reasonably available to him at the time of the initial hearing. The other two quotes for landscaping and remedial work have been obtained since the hearing. They, or similar quotes, could have been obtained prior to the hearing. They were not. This appeal does not provide the homeowners with an opportunity to have another go, by adducing fresh evidence, which might remedy the defects in their case and address the deficits found in it by the Tribunal.
As the Appeal Panel stated in Chapman v McLaughlin [2016] NSWCATAP 212 at [37]: ... The point of limiting fresh evidence to that which was not reasonably available at the first hearing is to ensure finality of proceedings. This means that it is in the interests of justice for parties to put forward all of their evidence as best they can at the hearing, as otherwise, if they were free to add fresh evidence after a case was decided, the proceedings would run the risk of not being finalised until after many hearings. This principle is of particular importance in the Tribunal because of the provisions of s 36 of the Act. That section requires the Tribunal to proceed to decide cases justly, quickly and cheaply.

Consideration of the homeowner's appeal against the money order

This relates to the order that the homeowners pay the builder $16,638.34 claimed by him at the hearing in application HB23/05834.
The homeowners did not make any significant new submissions in support of their claim that the builder should not be able to recover the amount owning to him. The focus of their appeal was on the Tribunal's conclusion with respect to the rectification needed.
As noted above, we raised with the parties the question of whether the contract was not enforceable because it was not in writing. This resulted in the homeowners adopting the position that it was unenforceable and that the Tribunal should not have made the money order. The builder did not address the issue, despite being given the opportunity to do so.
Section 7 of the HBA specifies the form of contracts required under the Act, where the contract is for an amount exceeding a specified amount. The specified amount is $20,000: see cl 5(1)(b) of the Home Building Regulation 2014 (NSW) (the HBR). In this case the amount quoted for the work by the builder was $30,936.40, with the result that the contract was required to comply with the requirements of s 7.
Relevantly, s 7 provides: (1) A contract must be in writing and be dated and signed by or on behalf of each of the parties to it. (2) A contract must contain - (a) the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and (b) the number of the contractor licence, and (c) a sufficient description of the work to which the contract relates, and (d) any plans and specifications for the work, and (e) the contract price if known, and (f) any statutory warranties applicable to the work, and (f1) the cost of cover under Part 6 or 6B (if insurance is required under Part 6), and (g) in the case of a contract to do residential building work - a conspicuous statement setting out the cooling-off period that applies to the contract because of section 7BA, and (h) in the case of a contract to do residential building work (other than a construction contract to which the Building and Construction Industry Security of Payment Act 1999 applies) - details of any progress payments payable under the contract, and (i) in the case of a contract to do residential building work - a statement that the contract may be terminated in the circumstances provided by the general law and that this does not prevent the parties agreeing to additional circumstances in which the contract may be terminated, and (j) any other matter prescribed by the regulations for inclusion in the contract. (3) The contract must comply with any requirements of the regulations. (4) If the contract price is known, it must be stated in a prominent position on the first page of the contract. (5) If the contract price is not known or may be varied under the contract, the contract must contain a warning to that effect and an explanation of the effect of the provision allowing variation of the price. The warning and explanation must be placed next to the price if the price is known. (6) A contract must not include in the contract the name of any person other than the holder of a contractor licence as, or so it may reasonably be mistaken to be, the holder's name. (7) …
The Tribunal found that the contract between the parties was not in writing, with the result that it did not comply with s 7.
Section 10 of the HBA then provides that: (1) A person who contracts to do any residential building work, or any specialist work, and who so contracts - (a) … (b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or (c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.
As a result, the contract between the parties was unenforceable by the builder: see Vujica v TNM Roofing Pty Ltd [2022] NSWCATAP 305 at [70] (Vujica), Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSWDC 507 at [141], and Anjoul v Anjoul [2021] NSWSC 592 at [209].
In Dyjecinska v Step-Up Renovations (NSW) Pty Ltd; Step-Up Renovations (NSW) Pty Ltd v Dyjecinska [2023] NSWCATAP 36 (Dyjecinska) there was a divergence of views between Thode PM and Molony SM as to the applicability of the principles in Vujica to a contract that was fully compliant with s 7 of the HBA and set out the terms of the agreement, other than it not being signed by the parties. It is unnecessary to explore that issue in the circumstances of this appeal. An unsigned quotation that simply contains a proposed scope of works and a proposed price cannot be a contract in writing for the purpose of s 10(1)(b) of the HBA as it does not set out the terms of the agreement, nor comply with the requirements of s 7 of the HBA (Vuijca at [70]-[76]).
This, however, would not prevent the builder from seeking to recover for the work and labour done and materials supplied on a quantum meruit, seeking fair value for the work done on the basis of unjust enrichment: see Pavey & Matthews Pty Ltd v Paul [1987] HCA 5, 162 CLR 221 and Mann v Patterson Constructions Pty Ltd [2019] HCA 32; 267 CLR 560; 93 ALJR 1164. There is, however, no evidence before us that the builder has at any time sought to recover on a quantum meruit basis. He has instead sought to enforce the contract.
That, however, is something he is unable to do by virtue of s 10(1)(b) of the HBA.
It follows that the Tribunal fell into error when it made the money order enforcing the contract in the builder's favour, when that contract was not enforceable by him.
We note that there was nothing referred to in the Tribunal's reasons, nor in the appeal documents, as to whether the builder was suitably licensed to perform the work; or whether home warranty insurance had been taken out by the builder for the work. Such issues may also have precluded the builder from being able to enforce the contract by reason of ss 4; 10(1)(a); 92; 94 and 99 of the HBA. It is unnecessary to explore such issues.
The appeal against the order that the homeowners pay the builder $16,638.34 claimed by him in application HB23/05834 will be allowed.

Consideration of homeowners' appeal against the rectification orders made by the Tribunal.

Failure to give the RJK Report the weight required by PD - 3.

The homeowners argued that the Tribunal had to give weight to the RJK Report because it complied with PD-3, which applied in the proceedings pursuant to cl 11(b) of PD-3, as their claim was worth more than $30,000. That clause provides: 11. This Procedural Direction applies in: (a) … (b) proceedings in the Consumer and Commercial Division involving claims under the Home Building Act 1989 (NSW) where the amount claimed or in dispute is more than $30,000; (c) … (together referred to as "Subject Proceedings").
The proceedings brought by the builder at all times sought a monetary amount significantly less than $30,000.
The homeowners' cross claim initially sought $80,500 by way of damages, but was later amended to seek a rectification order concerning which there was no costing provided by the parties. The Tribunal observed that it was the absence of evidence concerning the cost of rectification that led the homeowners to seek a rectification, rather than a money order.
As a result, at the time the proceedings were heard, the amount claimed in the builder's application was less than $30,000 and no value was attached to the rectification orders sought by the homeowners. While the homeowner's application had initially sought an amount well in excess of $30,000, by the time the matter reached hearing the homeowners were unable to quantify their damages and sought rectification orders instead. The rectification orders sought, among other things, the removal and reconstruction of the driveway and pathways, as well as rectification of the retaining walls.
Given that the evidence established that the builder's original quotation was for $30,936.40, we think it reasonable to infer that the costs of rectification claimed by the owners, involving removal and reconstruction of the quoted works only, would exceed $30,000. We therefore agree that the claim brought by the owners are proceedings to which PD-3 applied.
On its face the RJK Report purported to comply with and referred to PD-3. The Tribunal's criticism of the RJK Report goes to the limited observations it contained, unexplained assumptions core to its analysis (e.g. the nature and effect of "soil forces") and the absence of an explanation of the reasoning which led the expert to reach the conclusions he did. This resulted in the Tribunal finding that the opinions he expressed were a, "bare ipse dixit": i.e. an unsupported assertion.
When PD-3 applies, it requires an expert witness in proceedings before the Tribunal to comply with the Experts Code of Conduct set out in in PD-3 from par 18 on. Among other things, the code of conduct sets out the general duty experts have to the Tribunal. General duty to the Tribunal 14. An expert witness has an overriding duty to assist the Tribunal impartially on matters relevant to the expert witness's area of expertise. 15. An expert witness's paramount duty is to the Tribunal and not to any party to the proceedings including the person retaining the expert witness. 16. An expert witness is not an advocate for a party. 17. An expert witness must abide by any direction given by the Tribunal.
With respect to the content of expert reports the code of conduct says: Experts' reports 19. An expert's report must, either in the body of the report or in an annexure, include the following: (a) an acknowledgement that the expert has read the experts' code of conduct and agrees to be bound by it; (b) the expert's name, address and qualifications as an expert on the issue the subject of the report; (c) the facts, and assumptions of fact, on which the opinions in the report are based (a letter of instructions may be annexed); (d) the expert's reasons for each opinion expressed; (e) if applicable, that a particular issue falls outside the expert's field of expertise; (f) any literature or other materials used in support of the opinions; (g) any examinations, tests or other investigations on which the expert has relied, including details of the qualifications of the person who carried them out; (h) in the case of a report that is lengthy or complex, a brief summary of the report (to be located at the beginning of the report). 20. If an expert witness who prepares an expert's report believes that it may be incomplete or inaccurate without some qualification, the qualification must be stated in the report. 21. If an expert witness considers that his or her opinion is not a concluded opinion because of insufficient research or insufficient data or for any other reason, this must be stated when the opinion is expressed. 22. If an expert witness changes his or her opinion on a material matter after providing a report, the expert witness must immediately provide a supplementary report to that effect containing any relevant information referred to in paragraph 19.
The homeowners submitted that the RJK Report complied with the code of conduct.
While the Senior Member did not specifically refer to PD-3, his criticisms of the report went directly to the inadequacy of the expert's reasons for the opinions he expressed. He observed that the expert's conclusion that: 1. the "driveway and pathways will become unstable and be lifted by reasonably expected soil forces" did not explain: 1. the nature of the "reasonably expected soil forces" he relied on; or, 2. how and why the defects found in both the driveway and the pathways would lead to them becoming: 1. unstable; 2. lifted by the soil forces; 1. the "driveway will become liable to corrosion due to large cracks" given the absence of evidence as to the depth of the cracks and their projected development, to the point where the reinforced steel within the concrete would corrode.
Both were bare assertions without reasoned, expert explanation.
The Tribunal's criticisms reflect on the reports compliance with par 19(c) and (d) of PD-3. We also note that the report did not contain details of the expert's instructions.
The homeowners submitted that the RJK Report complied with the requirements of PD-3. They assert that its reasoning is sufficient and it does not contain bare assertions. We will address those issues below.
Before doing so, however, it is necessary to deal with the homeowners' submission that: The status of the RJK Report [as] as Expert Witness Report and the presumptive weight that should have been accorded to the Report under the Expert Witness Rules of NCAT was not even acknowledged and was not part of the of the consideration of the report by the Senior Member.
When asked to clarify this in oral submissions Mr Matters, representing the homeowners, relied on par 3 of PD-3 which says: In proceedings where the Tribunal is not bound by the rules of evidence, the acceptability of expert evidence is a question of weight not admissibility. Nonetheless, if those proceedings involve complex or difficult expert issues, it is appropriate to require expert evidence to be prepared and presented in a manner which seeks to ensure its usefulness.
The homeowners relied on this to make the submission that the author of the RJK Report was the Tribunal's witness, and that a report complying with the code of conduct was deserving of "presumptive weight", which the Tribunal had failed to acknowledge or give to the report. This also included a submission that the Tribunal had a duty to draw to its expert witness's attention to any deficits in the expert's report, so that those concerns could be addressed.
We reject each of these submissions. There is nothing in PD-3 which says that a report that complies with it is to be given "presumptive weight". Rather PD-3 sets out requirements for expert reports that are likely to make them useful to the Tribunal. This does not necessarily affect their weight, which is dependent on the Tribunal's analysis and acceptance of the report's content. PD-3 seeks to ensure that the content is useful, but does not provide that compliance with its form requirements will result in reports being given weight or not.
Similarly, there is nothing in PD-3 that makes an expert who provides a report compliant with PD-3 the, "Tribunal's witness", as submitted by the homeowners. While experts have a paramount duty to the Tribunal, that does not make them the Tribunal's witness. They are the witness of the party who selects and engages them, instructs them, and pays them. If there is conflict between the expert's duty to his or her client, and to the Tribunal, par 13 of PD-3 provides that the expert's paramount duty is to the Tribunal, meaning it should be given preference in cases of conflict. An expert witness who complies with PD-3 is not the Tribunal's witness and his or her report is not automatically deserving of weight. The weight a report deserves with depend on its content. The Tribunal is not obliged to point out the deficits it sees in an expert report, but may do so.
The Tribunal's failure to refer to PD-3 in the reasons is not an error of law.

Taking into account the emails produced by the builder.

The Tribunal referred in its decision to the emails from Mr Naulty and Mr Alkhereibi, which expressed conclusions regarding the standard of the work done by the builder. Their emails did not comply with PD-3. The homeowners assert that Mr Naulty and Mr Alkhereibi were not available for cross-examination. There is no evidence of the homeowners making an objection to the emails on that grounds that they did not comply with PD-3, or that the authors were not available to be cross-examined.
The homeowners submit that the Tribunal took into account an irrelevant consideration by admitting these emails into evidence and giving them weight.
Once again, we are unable to accept these submissions. The Tribunal was not bound by the rules of evidence in these proceedings: s 38(2) NCAT Act. While the emails clearly did not comply with the requirements of PD-3, failure to follow PD-3 in non-Evidence Rules Proceedings, such as these, does not make any such reports inadmissible but is likely to adversely affect the weight given to them: see cl 7 of PD-3. Failure to comply with PD-3 did not affect the admissibility of the emails, but could affect their weight.
A careful reading of the decision reveals that, aside from noting the emails and their contents, the emails appear to have played no role in the Tribunal's deliberations. The Tribunal did not rely on them in considering the extent of the defects in the driveway and pathways, or the preferred method of rectification. Rather, the Tribunal had regard to the builder's concessions as to the rectification work needed, as against the opinions expressed, and removal and reconstruction recommendations in the RJK Report.

Was the correct legal test applied when the Tribunal decided it could not rely on the RJK Report?

In rejecting the RJK Report the Tribunal relied on the decision in Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh [1953] SC 34, which was noted by Macfarlan JA in Forster v Hunter New England Area Health Service [2010] NSWCA 106, when referring to Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 (Makita). All of these decisions relate to the admission of expert evidence in cases before Courts in which the rules of evidence apply. The relevant principles for the admission of expert reports under s 79 of the Evidence Act 1995 (NSW) were explained by Heydon JA in Makita at [85] 743-4: "... if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of 'specialised knowledge'; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be 'wholly or substantially based on the witness's expert knowledge'; so far as the opinion is based on facts 'observed' by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on 'assumed' or 'accepted' facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert's evidence must explain how the field of 'specialised knowledge' in which the witness is expert by reason of 'training, study or experience', and on which the opinion is 'wholly or substantially based', applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ's characterisation of the evidence in HG v R [1999] HCA 2; (1999) 197 CLR 414 at 428 [41], on 'a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise'."
In ASIC v Rich & Ors [2005] NSWCA 152; (2005) 218 ALR 764 Spigelman CJ considered whether the basis for an expert's report is restricted to facts set out in the report, or whether it is sufficient if the expert shows the facts and reasoning process that leads to the conclusion. Spigelman CJ relied on the judgment of Gleeson CJ in HG v R [1999] HCA 2; (1999) 197 CLR 414 that, at [39]: 39. "An expert whose opinion is sought to be tendered should differentiate between the assumed facts upon which the opinion is based, and the opinion in question. Argument in this Court proceeded upon the basis that it was possible to identify from Mr McCombie's written report some facts which he either observed or accepted, and which could be distinguished from his expressions of expert opinion. Even so, the provisions of s 79 will often have the practical effect of emphasising the need for attention to requirements of form. By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question."
Such evidence, at [41]: ...required identification of the facts [the expert] was assuming to be true, so that they could be measured against the evidence; and ... demonstration or examination of the scientific basis of the conclusion."
In Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11; 80 NSWLR 43 Beazley JA pointed out that while the facts upon which an expert opinion is made must be clearly stated, this does not mean that they must exactly correspond to those proved by in the case by admissible evidence. Quoting Spigelman CJ in HG v R at [105] her Honour concluded that: The focus of attention - the 'prime duty' - is to ensure that the court, as the tribunal of fact, is placed in a position where it can examine and assess the evidence presented to it. That can occur without adopting the true factual basis approach. What Heydon JA identified as the expert's 'prime duty' is fully satisfied if the expert identifies the facts and reasoning process which he or she asserts justify the opinion. That is sufficient to enable the tribunal of fact to evaluate the opinions expressed."
The principles above apply to the admission of expert evidence before a Court in accordance s 79 of the Evidence Act.
Here the rules of evidence do not apply, and the Tribunal is instructed by s 38(4) of the NCAT Act to "act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms." As a result, compliance with s 79 of the Evidence Act is not needed.
What is needed was considered by the Court of Appeal in the context of the Workers Compensation Commission (the WCC), in Southwestern Sydney Area Health Service v Edmonds [2007] NSWCA 16 (Edmonds) and Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11 (Hancock). The WCC was not bound by the rules of evidence. Relevantly, r. 70 (a) of the then Workers Compensation Commission Rules 2003 (NSW) (Repealed) included a requirement that evidence "before the Commission be logical and probative".
In Edmonds, McColl JA explained: 129 Where the rules of evidence do not apply, in order to find error of law based on absence of evidence there must be an absence of material, whether strictly admissible according to the rules of evidence or not: Smith & Anor v Collings Homes Pty Ltd & Anor [2004] NSWCA 75 at [32] per Mason P (Handley JA and Campbell J agreeing) 130 In Hevi Lift (PNG) Ltd v Etherington at [84] I said (Mason P and Beazley JA agreeing) that "[a] court should not act upon an expert opinion the basis for which is not explained by the witness expressing it". In so saying, I referred with approval (inter alia) to Heydon JA's analysis of the admissibility of expert evidence in Makita (Australia) Pty Limited v Sprowles (at [59] - [82]). In that case (at [59]) Heydon JA cited with apparent approval Lord President Cooper's statement in Davie v The Lord Provost, Magistrates and Councillors of the City of Edinburgh (1953) SC 34 at 39-40 that: "… the bare ipse dixit of a scientist, however eminent, upon the issue in controversy, will normally carry little weight, for it cannot be tested by cross-examination nor independently appraised, and the parties have invoked the decision of a judicial tribunal and not an oracular pronouncement by an expert." 131 This statement is apposite in the context of Commission hearings, and, indeed, is implicitly recognised in r 70. While it must be recognised that "[t]here is no legal right to cross-examine an applicant or other witness in the Workers Compensation Commission and decisions whether to allow cross-examination or to limit it are discretionary" (Aluminium Louvres & Ceilings Pty Limited v Xue Qin Zheng [2006] NSWCA 34 at [37]), the fact that cross-examination of an expert witness may be permitted indicates the desirability of expert reports conforming as far as possible to common law standards of admissibility designed to ensure they have probative value. Even if that is too stringent an approach in the face of s 354, as the rules recognise, evidence must be "logical and probative" and "unqualified opinions are unacceptable".
In Hancock, Beazley JA explained that: 83. In the case of a non-evidence-based jurisdiction such as here, the question of the acceptability of expert evidence will not be one of admissibility but of weight. This was made apparent in Brambles Industries Limited v Bell [2010] NSWCA 162 at [19] per Hodgson JA. …
With respect to what is required of a report her Honour said that, at [88] … the principle in Makita do not require that there be an exact correspondence between the assumed facts upon which an expert opinion is based and the facts proved in the case. Accordingly, the absence of any express reference to those specific incidents did not mean that the facts upon which Dr Summersell based his opinion, including falls and instability of the knee, did not form a proper foundation for his assessment as required by the principle in Makita.
It is evident that the legal principles to be applied when considering the admissibility of expert evidence under s 79 of the Evidence Act are similar to those to be applied in non-Evidence proceedings before this Tribunal, where the question is not the admissibility of an expert opinion, but the weight to be given to it. The content of an expert report, its form, the relevance and sufficiency of the expert's demonstrated expertise, the adequacy of the report's explanation of the facts (both demonstrated and assumed), and the clarity of the reasoning leading to its conclusions, will all be central to the ultimate weight given to it by the Tribunal.
The homeowners point to a number of aspects of the decision regarding the Tribunal's rejection of the RJK Report as being in error.
First, is the Tribunal's comment about the relevant National Construction Code used to assess the work by the expert in the report. The Tribunal noted that the code used was the 2016 Code - (Australian Building Codes Board) (2016) National Construction Code - rather than the 2022 one. The Senior Member questioned whether they were the same but did not draw any conclusion on that issue. The homeowners assert that this is an error, "as the construction occurred in 2021." This is not correct. The work in issue began on 15 August 2022. There was no error made by the Tribunal. If there had been, it would have an error of fact concerning which there is nothing to suggest it was a material error.
Secondly, the homeowners submitted that the Tribunal's criticism of the report for not explaining how the driveway or the pathways will be lifted by "soil forces" is "a breach of the Makita rule," and is in error. The outline of submissions said: This is a misconception as to how the driveway will be lifted. The opinion that the driveway was unstable was reached due to its manifest inadequacies as set out in 10.3 to 10.7. The NCAT objection is not in regard to reasoning but that a fact, that soil forces can lift the concrete in the driveway, is assumed, that is the effect soil forces have. The objection of NCAT is precisely the kind of error set out by the Hancock rule.
This is incorrect.
The expert's observations of the driveway were set out at par 10.3.1 to 10.3.7 of the RJK Report with accompanying photos. The pathways are dealt with in pars. 10.3.8 to 10.3.10 and accompanying photos. Paragraphs 10.4 to 10.6 contain extracts from the National Construction Code relating to structural stability of structures; drainage requirements; how the Code may be used to show compliance with Part B1 of the Building Code of Australia; section 2 of Australian Standards 1170.0, and sections 1, 2, 3 and 5 of AS3727.1. All up, these dense, scanned extracts run for 11 pages, without any explanation of their relevance to the expert's opinion, or to his observations of the work done. At pars 10.7.1 to 10.7.4 (see par 31 above) the expert concludes that the provisions of National Construction Code and the Australian Standards apply to the pavements and driveway. He then provides a statement as to what performance requirements he believes that the driveway and pavements should fulfill.
The report then concludes with the expert giving three opinions.
First, that "the driveway and pathways will become unstable and be lifted by the reasonably expected soil forces." No explanation is given as to how and why the driveway and pathways will become unstable. The is no explanation as to the nature of the soil forces, or how, and why, they will interact with the concreting works. The expert does not explain the nature of the soil forces that he assumes to exist, nor is there any reference in the report to expert learning or material explaining the nature of such forces. There is also no discussion or explanation of the likely damage. This means that the opinion is not supported by any explanation as to how the defects described in the report breach the applicable standards, or why they will lead to instability and lifting requiring removal and replacement. In those circumstances, the conclusions reached by the Senior Member were clearly open to him. We can see no error in the Tribunal's finding that the experts' conclusions in this regard are mere assertions.
Secondly, the expert concluded that the driveway will be vulnerable to corrosion due to "large cracks allowing water to enter corroding the internal steel". It does not explain how this will occur. There is no evidence as to the depth of the apparently narrow, but long, cracks. There is no explanation as to how the cracks will allow water to penetrate to the depths of the reinforcing steel, and no evidence as to the depth of the steel, or of the cracks. In those circumstances, the Tribunal's conclusion that the expert's opinion with respect to likely corrosion being a bare assertion was clearly open.
Thirdly, the expert concluded that the pathway will not satisfy the requirements of Section 3.1.2.1 of the NCC due to the slope draining back towards the building. As the Tribunal noted, this conclusion was not supported by the provision of any measurements showing the existence of the slope. This is so despite the reports saying that "the pathways had been measured." There is one photograph of water pooling on an unidentified area of a concrete pathway in the report. Its location around the house in not stated. A spirit level to demonstrate the alleged slope is not included in the photograph. There was, therefore, no evidence before the Tribunal to demonstrate that pooling in the pathways was caused by a "slope", or as to whether it affected all the pathways, or only portions of them. In those circumstances the report did provide the factual basis underlying the expert's opinion, and was, once again, a bare assertion.
The homeowners' submitted at par 42(iii): As to the NCAT objection and the implication that strict non-compliance with Makita is fatal to giving any weight to the Expert Report, the Senior Member erred in regard to requiring the facts to be proven and that namely if the facts are not proven to substantiate the opinion, the opinion is accorded little or no weight.
This led on to a submission that the Tribunal failed to apply Hancock when considering the expert report, and wrongly applied Makita. It was submitted that strict compliance "with each and every feature required by Heydon JA in Makita is not required".
A reading of the Tribunal's reasons demonstrate that it did not require strict compliance with Makita and at all times considered the experts report, not on the basis of whether it was admissible (Makita), but on the basis of the weight to given it (Hancock). Hancock makes it clear that an exact correspondence between proved facts, and those stated or assumed in the expert reports, is not necessary for a report to be given weight. This does not mean that a failure by an expert report to refer to essential facts, or a reliance on facts in conflict with those found, will not affect the weight to be given to the report. Thus, in Kirzner v Jetmaster Fireplaces Aust Pty Ltd [2021] NSWCATAP 255 an expert report was deserving of no weight because the method of work assumed by the expert in writing his report, which he said led to the defect in issue, was proved not to be the method used (following evidence from the person who actually did the work). This is an example of what Heydon JA meant in Makita when he said there must be a "a proper foundation" for the opinion expressed.
What all the cases make clear is that an expert report must, among other things, state the facts on which it is based, including assumed facts as well as observed facts, explain the expert's understanding of those facts and the issues arising, and provide a reasoned and logical explanation for the conclusions reached, based on that understanding. In the present case, as explained above the expert report did not do so.
The homeowners' submission that the Tribunal's decision to give no weight to the RJK Report is contrary to the decision in Hancock is rejected. The existence of a difference between facts in a report, and facts found by a Court or Tribunal, is entirely different to an expert not providing a sufficient factual basis to found a report's conclusion, as occurred here with respect to the pooling issue. Similarly, the assertion of an assumed fact (such as the operation of soil forces), without any explanation of its genesis or nature, will undermine any conclusions based on it, especially when those conclusions are unexplained. The absence of necessary facts and explanations in those circumstances is vastly different to the factual differences discussed in Hancock. So too, any assertion in a specialist opinion that certain facts will result in a breach of nominated standards, which breach is unexplained and not obvious, cannot be remedied by resort to Hancock. If the breach of the standards form part of the expert's chain of reasoning, the report should explain not only how the standards apply (which the RJK Report did), but how they have been breached (which the RJK Report did not). Failure to adequately expose the expert's reasoning will prove fatal whether in a Court of Tribunal.
What will be sufficient evidence to prove, on the balance of probabilities, that works are defective will depend upon the particular facts and circumstances of each case, including whether the amount claimed or in dispute is relatively small (Khan v Khan [2014] NSWCATAP 48 at [49]-[53]). The homeowners bore the onus of proving on the balance of probabilities the work was defective. The mere fact they relied on an expert report, and the builder did not, does not automatically result in the Tribunal accepting the contents of the RJK Report and the homeowners succeeding in their case. It was open to the Tribunal to find that the RJK Report (considered with all other relevant evidence) was not sufficient for the owners to discharge their onus of proof.
It follows that the Tribunal did not misdirect itself as submitted and that it applied the correct law in assessing the weight to be given to the RJK Report. This ground of appeal fails.

Did the Tribunal fail to afford the homeowners procedural fairness?

The homeowners say they were denied procedural fairness when the Tribunal allowed the builder, who had not filed a statement, to give oral evidence of a defence to their claim with respect to the retaining walls, which defence surprised them.
There is no evidence before us that the Tribunal had at any time made an order that all evidence be by way of statement or affidavit. The builder was at all times self-represented and plainly not a sophisticated litigant. There is nothing unusual about the Tribunal allowing a self-represented litigant in person to give his or her evidence orally.
There is no evidence that the homeowners, who were represented by Mr Matters at the Tribunal hearing, objected to the builder giving evidence or sought an adjournment when the builder disclosed a defence to the retaining wall claim. We note that Mr Matters made a number of such applications to us when considering late material filed by the builder.
There is no transcript or audio recording of the hearing which would enable us to clarify what occurred. Mr Matters told us there was difficulty obtaining a recording. Nonetheless, the homeowners, as appellants, bear the onus of proving their case, including the consequences of the failure to provide a sound recording or transcript of the hearing (Whear v Kids on Hayes Street Pty Ltd [2021] NSWCATAP 123 at [25]; Sengos v Hassan [2022] NSWCATAP 366 at [42]-[43]).
In those circumstances, we are not satisfied that the Tribunal denied the homeowners procedural fairness. This ground of appeal fails.

Was there "no evidence" for the Tribunal's conclusion as to the rectification work needed?

The Tribunal ordered rectification in accordance with concessions made by the builder. The order was made in circumstances in which the Tribunal had rejected the conclusions as to the rectification work required, and the extent of defective work, found in the RJK Report.
The builder had agreed to remedy the cracking in the driveway, which he said was non-structural, and could be readily seen in the photographs in the RJK Report.
The Tribunal took the builder's concession, which was an informal admission, and made a rectification order based on it. It did not rely on the emails (to which the Senior Member gave no weight and which did not deal with rectification) or the RJK Report in doing so.
The builder's admission was part of the evidence before the Tribunal. It was the evidence upon which the Tribunal made the rectification order.
This ground of appeal is therefore without merit.

Leave to appeal.

The homeowners sought leave to appeal based on the availability of the new evidence, relating to their rectification claim, as set out in par 44 above. As we have declined to admit that evidence because it is not significant new evidence, leave to appeal will be refused.

How should we dispose of these appeals.

It follows from all of the above that the homeowners have been successful in their appeal against the order that they pay the builder $16,638.34. That appeal will be allowed.
The builder, in theory, may have a claim against the homeowners to recover money owing for work done and materials supplied on a quantum meruit basis, but no such claim has been made to the Tribunal. The builders claim before the Tribunal was for money owning under a contract, The Tribunal should have dismissed that application. We cannot make orders in respect to a quantum meruit claim that was not made.
As the $16,638.34 ordered by the Tribunal has been paid to homeowners by the builder on the erroneous basis that it was owed under contract, the homeowners are entitled to get their money back. We will therefore make an order that builder repay $16,638.34 within 14 days.
With respect to the homeowners' appeal against the rectification order, the homeowners have been unsuccessful. In theory, their appeal against the rectification orders should simply be dismissed.
A complicating matter is how the rectification order is to have effect, given that it was contingent on the money order being paid to the builder "on or before 14 August 2023." The Tribunal, when making that order, explained that it was concerned "that this amount will not be paid". It, therefore, made the rectification order subject to the money order being complied with.
While that money has now been paid to the builder, it is clear that payment was made after the due date. This is so because a stay was applied for on 15 August 2023, with a conditional stay order (until further order or the finalisation of the appeal) made on 8 September 2023. The money order had not been paid then. As we understand it from Mr Matters, it was only when the owners could not comply with the conditions of the stay that the order was paid. They did so on the basis that the stay was no longer in effect.
Because that money order will cease to exist when we allow the appeal against it, the Tribunal's rationale for requiring the builder to be paid, prior to starting the rectification work, will also cease to exist. No money will have been owed by the homeowners to the builder.
Rather, the builder will owe the homeowners a refund of money paid under that order.
In the absence of such a rationale, we will vary the rectification order so that it is no longer subject to the homeowner's owing paying the builder money outstanding under the contract. This will result in the rectification order becoming unconditional. We will include a date by which the work is to be done, to provide some finality to that order.

Orders

The Appeal Panel makes the following orders. 1. The appeal against the decision in HB23/05934 is allowed. 2. Order 1 made by the Tribunal on 28 July 2023 in HB23/05934 is set aside and, in its place, the following order is made: Application dismissed. 1. The respondent Matt Holland is to pay the appellant Sam Shakiri the sum of $16,638.34, being the return of money paid under an order that has been set aside on appeal, within 14 days of this order. 2. With respect the appeal against the decision in MH23/26657: 1. Leave to appeal based on the availability of new evidence is refused. 2. Order 2 made by the Tribunal on 28 July 2023 in HB23/05934 is varied to read: Mr Holland is to rectify the driveway only by to filling any gaps in the driveway with concrete crack filler and to colour seal the concrete by 8 April 2024, and the application is otherwise dismissed. 1. 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: 27 February 2024

Workers Compensation Commission Rules 2003(NSW)

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