Tan v Champion Homes Sales Pty Ltd

The scope and nature of internal appeals

1. By virtue of s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), internal appeals from decisions of the Tribunal may be made as of right on a question of law, and otherwise with leave of the Appeal Panel.
2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question. 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
3. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. The decision of the Tribunal under appeal was not fair and equitable; or 2. The decision of the Tribunal under appeal was against the weight of evidence; or 3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
4. In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
5. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
6. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. 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; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. 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.

Grounds of Appeal

1. The owners did not suggest that the decision involved any error of law. Rather, the owners sought leave to appeal on each of the grounds that the decision was against the weight of evidence, that the decision was not fair and equitable, and that there was significant new evidence now available that was not reasonably available at the time of the hearing.
2. It is convenient to address in turn each of the items in respect of which the appellants seek leave to appeal.

1. Contract price adjustment
2. Under clause 44.4 of the building contract, the builder was entitled to a contract price adjustment of 2.5% if the commencement period (350 days after the date of the tender) expired without all conditions governing commencement being satisfied.
3. Demolition was not completed until 21 February 2019, that is well after the expiry of the 350 days within which the building work was required to commence if the builder was not to be entitled to the contract price adjustment.
4. We note that the Tribunal identified the date on which demolition was completed as 21 January 2019. This appears to have been an inadvertent error, but it is not significant as that date was still 3 days after the date on which the contract price adjustment became operative.
5. Before demolition could commence, a construction certificate was required. The owners asserted that the builder had deliberately delayed the obtaining of the construction certificate. The circumstances in which that allegation is made are set out in the decision at [18]-[23] as follows: 18. DC [Development Consent] condition 47 required a Sydney Water s 73 compliance certificate under the Sydney Water Act 1994 (NSW). 19. On 2 November 2018 a Sydney Water Servicing Co-ordinator (RAR) issued a s 73 works proposal for works to obtain the required approval for a dual occupancy. On 9 November RAR emailed asking that the builder arrange for peg out report and structural engineering plans. Peg out was finished on 12 November. On 12 November the builder said that it requested from its engineer (Donovans) Building Over/Adjacent to Sewer (BOS) detail and enclosed a purchase order. 20. On 23 November 2018 Donovans, in response to an email from the builder, told the builder that the request was not received and if resent would be completed that day. The email was immediately resent with the 12 November email appearing in the chain. The structural engineering detail including BOS detail was emailed 7 December 2018 to the builder, 14 days later, who forwarded it to RAR on 10 December 2018 with the comment "This one has taken forever!" 21. On 12 December 2018 RAR sought from the builder confirmation that the rear fence/retaining wall was part of the approval. The builder confirmed that was part of the works 18 minutes later and also said that the builder co-ordinator had advised that the stormwater (OSD) may impact on Sydney Water assets. 22. On 14 December 2018 RAR requested Donovans to include the retaining wall on the engineering plans. Donovans used that revised detail on 17 December which also included BOS. 23. Sydney Water issued building plan approval and sewer encasement conditions on 8 January 2019 and the PCA (a private certifier) issued the CC [construction certificate] dated 10 January 2019. The builder "duly advised" the owners who were doing their own demolition. … The completion of demolition was when the builder obtained vacant possession of the site to commence works under cl 48.5.
6. The owners asserted that the builder did not send an email to the engineer on 12 November 2018. The owners asserted that the email bearing that date, produced by the builder in response to a summons, was not genuine.
7. The email bearing the date 12 November 2018 also appeared in an email chain, which included an email from Mr Francis of the builder to the engineer dated 23 November following up the earlier email, and a response from the engineer stating that that email had not been received.
8. The owners' position, as articulated at the oral hearing of the appeal, was that the email had been sent by Mr Francis on 12 November 2018, but not to the engineer. The owners submitted that Mr Francis had deliberately misdirected the email to ensure it was not received by the engineer, in order to delay the obtaining of a construction certificate, so as to ensure the builder obtained the benefit of the price increase, and had then inserted the correct address into the email, so as to make it appear it had been sent to the engineer on 12 November 2018.
9. The Tribunal dealt with that submission in the decision under appeal at paragraphs [32] to [35] as follows: 32. There was no independent expert evidence to substantiate the allegation that the builder effectively forged the email chain on 23 November 2018. There was a document on how to create a forged email which in itself established a methodology, not that it had been used. Such would have required analysis of the builder's computers and Donovan's computers, the latter to see if there was non-receipt (and if so for what reason) or whether it had been received and overlooked or inadvertently deleted. It would also have required analysis of the alleged anomaly in the way the recipient was styled. There was no evidence on such analysis. 33. Without independent expert analysis and in the face of the builder's denials I cannot accept that such a serious allegation is established. 34. Further, there is an email from an employee of the builder to the owners on 23 November 2018 that the Sydney Water approval relied upon the engineering plans "that are due back any day now". This is consistent with either an elaborate fraud for no clear reason at that point in time (some 56 days before the commencement period ran out) or that the plans had been requested when the builder said. 35. I consider the latter inference is the correct one on the evidence. At this point there was no reason to engage in a cover-up of delays which may or may not - with about eight weeks of time to go - impact the issue of the CC and hence demolition. If the email to the owners was sent before Donovans advised that the 12 November email had not been received, then the sending employee of the builder would not know of the alleged non-receipt (or misplacement). If the email to the owners was sent after Donovans advised, then the employee could reasonably expect a rapid turnaround given Donovan's response.
10. We agree with the Tribunal's characterisation of the owners' submission and with its conclusion.
11. The evidence relied upon by the owners to establish that the email was not genuine was a statement prepared by Mr Hua Yong Tan which described how it was possible to do what Mr Tan asserted Mr Francis had done. However, there was no evidence to demonstrate that Mr Francis had actually done what Mr Tan asserted he had done.
12. When this proposition was put to Mr Tan in the course of the appeal hearing, he stated that certain features of the email disclosed that it was not genuine, in particular a change in the way the email address of the engineer was disclosed between the various versions of the email.
13. Mr Tan submitted that emails did not work that way, but he acknowledged that he could only say that was the case with the email system he used, and he could not say that the builder used the same email system.
14. A finding that a person has engaged in fraud is a serious allegation, which is not to be made on the basis of "inexact proofs, indefinite testimony, or indirect references": Briginshaw v Briginshaw (1938) 60 CLR 336 at 362.
15. Although Mr Francis did not give evidence to confirm that he had sent the email on 12 November or to deny that he had forged the copy produced on summons and included in the email chain, and there was no explanation for his failure to do so, in our view that is not sufficient to lead to an inference that he did forge the email, in circumstances where there is nothing to suggest that he did so which rises beyond speculation.
16. Where a witness, who might be expected to be able to give evidence about a matter and might be expected to be called by one party rather than the other, is not called to give evidence, and no explanation is provided for their absence, that may lead to an inference that the uncalled evidence would not have assisted the party's case: Jones v Dunkel (1959) 61 CLR 298. However, "the rule in Jones v Dunkel cannot be employed to fill in gaps in the evidence or to convert conjecture and suspicion into inference": Seven Network Ltd v News Ltd [2007] FCA 1062 per Sackville J at [472].
17. The owners also suggested that the builder had not "accepted the engineer's offer", to provide the required "BOS detail" by the close of business on 23 November if the request was re-sent that day.
18. It appears the Tribunal concluded that the email was immediately re-sent.
19. Although Mr Vardas, who represented the builder on the appeal, stated that he could show it had been sent, he could not point to evidence before the Tribunal to establish that proposition. To that extent, it does appear that the Tribunal made the finding that the email was immediately re-sent without evidence. A finding made without evidence is an error of law (see Prendergast, cited at [13] above).
20. If the email was not immediately re-sent, it might be said that the builder was responsible for two weeks delay in obtaining the BOS, between 23 November and 7 December. However, as the Tribunal found, it was not sufficient for the owners to demonstrate that the builder had been responsible for some delay. To avoid liability for the price increase, the owners needed to establish that the builder's delay had been the cause of the fact that the work had not started by the relevant date.
21. There was no evidence before the Tribunal to establish that a two week delay in the provision of the BOS was responsible for the owners not completing demolition until 21 February (or even 21 January) 2019. Even if the builder was responsible for a two week delay in obtaining the construction certificate, the owners did not establish that that delay caused the owners to incur liability for the cost adjustment. Accordingly, any error of law involved in the Tribunal's finding that the email of 12 November 2018 was immediately re-sent was immaterial to the outcome of the proceedings.
22. The owners sought to rely upon evidence which had not been before the Tribunal at first instance to establish: 1. That the email of 12 November 2018 was forged; and 2. That the delay in the provision of the BOS had caused the appellants to incur liability for the contract price adjustment.
23. Mr Tan did not provide any reason why that evidence was not available at the initial hearing, beyond the proposition that he did not think it was necessary because he was confident that the Tribunal would accept his argument on the evidence he did provide.
24. The question when evidence is reasonably available was addressed in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [19]-[26]. At [23] the Appeal Panel held: … the test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence.
25. It is clear from that decision that the fact that Mr Tan did not realise the evidence was necessary does not satisfy the requirement that the evidence not have been reasonably available at the time of the initial hearing.
26. The Appeal Panel is not satisfied that the fresh evidence sought to be relied upon by Mr Tan was not reasonably available at the time of the initial hearing and accordingly we refuse the owners leave to rely upon it.
27. We note that the builder submitted that the proposed further evidence did not overcome the deficiencies in the owners' case, but we do not need to determine that question.
28. We find no error in the Tribunal's conclusion that the owners were liable for the cost price adjustment and refuse leave to appeal in respect of that finding.

2. Traffic management charges
3. The owners' second ground of appeal was that they should not have been held liable for traffic management charges. The owners' challenge to variation 13 dated 7 February, in respect of traffic management costs, was on the basis that the variation was not fair and reasonable.
4. As the Tribunal noted, variation 13 included "similar narrative" to variation 12, which the Tribunal observed included "additional narrative of what the costs on a particular day related to in terms of work on site". Variation 13 was also substantiated by invoices from the third-party traffic control company, and all but one of those third party invoices had a job time-sheet supporting the invoices.
5. The Tribunal rejected the owners' submissions and held that the builder was entitled to the amount claimed in variation 13. The Tribunal's reasons were expressed in paragraphs [49] to [52] of the decision as follows: 49. This is a contract-based claim for work that is specified as within the scope of entitlement to rely upon an invoiced variation. It is up to the recipient owners to establish a basis for showing that the invoiced work was not done or was otherwise not entitled to be invoiced. It is different from where the contract entitlement requires proof by the builder, not only that the work was charged for by a third party, but also of the reasonableness of the charge and the amount of work done, as in a cost-plus contract or where progress payments are based on a percentage of work completed rather than a defined stage of work being reached. It is also not a quantum meruit claim where the reasonable cost of labour and materials needs to be established by the claimant builder. 50. In the present claim, it was up to the owners to seek from the relevant third parties the substantiation sought, by way of summons if it was not produced voluntarily. Further, if the third party charge could not be substantiated, the builder had incurred it as a liability and was entitled to claim it unless the degree of discrepancy between the charge and the work done was so significant that in exercising due care and skill the builder ought to have challenged the third party invoice rather than simply passing on the charge. 51. The facts are a long way from that position in the present case, given the constraints of an urban corner block in a busy locality with constrained access and with limited onsite space for storage and rubbish skip disposal that did not interfere with construction. The owners advanced no independent expert evidence to challenge the number and timing of traffic movements that occurred or to suggest that a more efficient works programme or scheduling would have reduced these and, if so, by how much. 52. In contrast, there was detailed evidence from the responsible employee in the builder concerning site constraints on access and storage and the effect on deliveries and traffic management. That evidence directly responded to the owners' calculations of available surface area for storage which inferred that more could be delivered at one time. I accept the builder's evidence that the owners' calculations were on a purely mathematical basis that took inadequate account of the dynamic nature of a building site where storage is but one element and many trades with their equipment, including scaffolding, interact differently at different times, but with serious overarching WHS obligations on the head contractor. [Emphasis added]
6. Mr Tan did not dispute the Tribunal's finding that the owners' calculations were a purely mathematical exercise. Mr Tan relied upon the proposition that on one occasion 8,000 bricks had been unloaded in four hours. He submitted that that rate should have been maintained generally. However, the owners provided no evidence to justify the extrapolation of that one event to all occasions.
7. As the Tribunal noted, the owners did not issue any summons to the traffic manager for documents substantiating its charges. Mr Tan suggested he had sought to do so when he had become aware of the issue but had not been permitted to do so.
8. The owners did not raise as a ground of appeal any assertion that they had been improperly denied leave to issue a summons.
9. We do not consider that Mr Tan's assertion that he had not been permitted to issue a summons to the traffic manager warrants any further consideration.
10. Mr Tan finally relied upon a photograph of the site which, he asserted, showed there was sufficient space for a 10 cubic metre skip bin when the builder had used only a 2 cubic metre skip bin. The owners tendered no other evidence that it was appropriate to use a 10 cubic metre skip bin or that it was unreasonable of the builder not to have done so.
11. We are not persuaded that the Tribunal's findings regarding Variation 13 or the traffic management charges were against the weight of evidence or not fair and equitable, and we refuse leave to appeal against those findings.

3. Structural steel
4. The owners' argument in relation to the amount they had been charged in Variation 14 in respect of structural steel was founded upon the submission that there had been a substitution of the structural steel from that outlined in the plans and that the owners had not been aware of that until the hearing.
5. The owners argued that there must have been revised engineering plans which might disclose that the owners had been over-charged.
6. Mr Tan acknowledged that the owners' case in this respect was founded upon no more than suspicion in relation to the amount charged.
7. The owners expressed particular concerns in relation to a charge of $1,000 for the installation of the steel.
8. Mr Vardas pointed out that the owners had conceded in their own submissions to the Tribunal that $1,000 for installation was not unreasonable.
9. The Tribunal dismissed the owners' challenge to the builder's claim in respect of structural steel. The Tribunal's reasons for doing so are set out at paragraphs [57] to [58]: 57. The owners said that they were not given the opportunity to have sufficient information to verify that the amount of $1,000 was fair and reasonable. There was no request by the owners for the third party installer who dissected that amount out of his total invoice to attend for cross-examination. As said in respect of variation 13, the owners carried the burden of establishing a basis for contesting the invoiced amount. 58. The owners said that the crane supplier's invoice had entries misaligned which indicated possible tampering. They said that the steel supplied did not match the engineering specification dated 7 November 2018. There was no independent expert evidence to support these allegations. The builder produced the handwritten invoice which correlated with the computer-generated version subsequently sent by the supplier. The builder pointed to the certification of the private certifier in respect of the steel.
10. We find no error in the Tribunal's findings. Accordingly, we refuse leave to appeal in relation to the Tribunal's findings concerning variation 14 in respect of structural steel.
11. As noted above, the fourth ground of appeal relating to damage to the footpath does not require determination.
12. Accordingly, our orders will be: 1. Leave to appeal is refused. 2. 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 2021