Ultimo Developments Pty Ltd v Wilson

Reply to Appeal

1. The Homeowners filed their Reply to Appeal on 14 August 2024.
2. In relation to the first ground of appeal, the Homeowners submit that no error of law or of fact is disclosed, particularly in circumstances where the fact of the floors having been installed out of level was not in dispute.
3. In relation to the second ground of appeal, the Homeowners submit: 1. there was no evidence nor suggestion of any direct communications between the parties, establishing a defence under s 18F of the Home Building Act 1989 (NSW) (HB Act) in relation to the installation of floor boards; 2. Contract term 1(d)(ii)(a) could not, by itself, operate to relieve the Builder of its obligations in connection with the warranties at s 18B of the HB Act in relation to the installation of floorboards 3. any such contention was not raised before the Senior Member; 4. any such contention was flawed in any event, given that the Contract Specification required the remediation of any unsuitable floor sub-base surfaces prior to the installation of flooring; 5. the Senior Member's finding at [222] was specific in relation to one existing undulation at one area of the roof, and was otherwise of no general application in the determination of the contentious facts or issues, particularly in relation to floorboards given (4) above.

Nature of an appeal

1. Section 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) sets out the basis upon which appeals from decisions of the Tribunal may be brought. That section states that an appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds (s 80(2)(b)).

A question of law

1. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, without listing exhaustively possible questions of law, the Appeal Panel considered the requirements for establishing an error of law giving rise to an appeal as of right. These included: 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 (that is, 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 was so unreasonable that no reasonable decision-maker would make it.
2. These matters were recently expanded by the Appeal Panel Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 where the Appeal Panel stated (references omitted): 32 To the above list [referring to the list in Prendergast extracted above] might be added the following (some of which are nuanced aspects of the categories in Prendergast): (1) Whether the Tribunal drew inferences that were not available from the facts as found (an extension of item 7 [of Prendergast]) … (2) Whether the construction of a statute or contract arrived at by the Tribunal at first instance was wrong in some identified way: … (3) Whether the Tribunal's decision was vitiated by bias, or a reasonable apprehension of bias, relates to and intersects with the fair hearing rule, and may encompass or be related to the procedural fairness question: … (4) Whether the Tribunal failed to respond to substantial, clearly articulated arguments based on established facts which may constitute a failure to accord natural justice, that is, procedural unfairness. Alternatively, it may also constitute a constructive failure to exercise jurisdiction: … (5) Whether the facts as found necessarily satisfied the statute or necessarily did not: … … 33 Plainly, the categories are not closed.

Leave to appeal

1. Clause 12 of Sch 4 of the NCAT Act provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal only if 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).
2. The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel conducted a review of the relevant cases at [65]-[79] and concluded at 84 that: Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) Issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
3. Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the Act. An appellant must demonstrate something more than that the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32].

The Decision

1. It is common at this point in appeal decisions for the Appeal Panel to broadly summarise the Decision itself. In doing so, briefly, we note that the Decision was 110 pages in length consisting of 477 numbered paragraphs. It is an extremely detailed, thorough and carefully written decision.
2. That said, after setting out the relevant law, the parties' evidence and the submission, from p 98 onwards the Tribunal sets out its findings of fact in relation 13 topics, being:

• Item 1: "status of owners residing";
• Item 2: practical completion;
• Item 3: "did the owners refuse access?";
• Item 4: termination by owners;
• Item 5: termination by builder;
• Item 6: defective work;
• Item 7: work order or money order;
• Item 8: cost of rectification;
• Item 9: cost to complete;
• Item 10: variations - liability;
• Item 11: variations - quantum;
• Item 12: builder's claim for damages;
• Item 13: owners' claim for damages.

1. In essence, the appeal relates to the Tribunal's consideration of ``Item 6 of the Homeowners' claim. The Tribunal relevantly stated (footnotes added by the Appeal Panel) that: 206 Item 6 raised matters regarding the floorboards. The allegations were that they were not installed in accordance with the manufacturer's instructions, and that their installation breached the obligation to carry out work with due care and skill. Those claims were based on Mr Frizzell's [1] evidence (A516) that (1) the floorboards were not fully glued, (2) they were installed out of level, (4) they were not adhered to the substrate, and (3) there were pencil marks on them, (4) there were excessive gaps at wet area doorways, and (5) there was a different coloured floorboard in the media room. 207 The response of Mr Fittinghoff [2] (A1395) was that the photos upon which reliance was placed did not prove the owners' case and that the media room flooring was a temporary measure until a matching floorboard could be obtained. It was also contended that "the whole house was severely out of level, out of plumb and out of square". It was disputed that the floorboards moved, either vertically or horizontally. Further, that scuff marks and pencil marks may have been the result of use by the owners and that those matters could be easily resolved. Gaps not filled with sealant were said to be incomplete work. 208 The joint report (A2032) revealed agreement that acoustic underlay was used but disagreement as to whether there was vertical movement in the floorboards and whether they were detaching. 209 When cross-examined, Mr Frizzell agreed that he perceived movement and inferred detaching but did not accept there was movement in the substrate. During his cross-examination, Mr Fittinghoff agreed that the glue had not been applied in accordance with the manufacturer's instructions (A652). 210 There is no need to summarise counsel's submissions because it is clear (1) the floor was not levelled before the floorboards were laid, as specified in the installation guide for any difference in level exceeding 3mm over a 3m distance (A656), and (2) the floorboards were not affixed in accordance with the manufacturer's installation guide (A659). Both those matters were conceded by Mr Fittinghoff during his oral evidence, and they provide a sufficient basis for finding that the floorboards were installed without due care and skill, contrary to s 18B(1)(a) of the HBA. It is not necessary to refer to other alleged aspects. 211 As there is evidence of the difference in levels in multiple rooms (A518), and of how the glue was applied in more than one location (A689, photos 6.1 and 6.2, and A2048-2051), it is a reasonable inference that the same method of applying the glue was used throughout the work. In relation to the difference in levels, it is noted that the builder did not avail of the defence provided by s 18D of the HBA by raising a matter and obtaining written instructions to proceed. 212 In these circumstances, the rectification method proposed by Mr Frizzell has been adopted and included in Appendix A. The suggested cost of rectification is $76,835.13 (A876), but that amount includes an "Additional allowance ... to match specified flooring type" of $11,460 which is an opinion that is devoid of any factual foundation or reasons/reasoning. No explanation has been provided as to why an allowance should be made for marching when all the floorboards are being replaced. Hence, the amount the Tribunal considers reasonable to allow for this item is the difference between those two amounts, which is $65,375.13. (emphasis added by the Builder in its written submissions)
2. The first ground of appeal relates to [210].
3. The second ground of appeal relates to [209] and [210].

Preliminary matter - evidence not before the Tribunal

Evidence sought to be relied on by the Builder

1. At the appeal hearing, the Builder sought leave to rely on affidavits of Mr Yong Hooi Tan sworn 7 September 2024, Mr Gerard Aronstan sworn 7 September 2024, and Mr Evan Fittinghoff sworn 15 September 2024.
2. Mr Tan is the sole shareholder and director of Adrian Lux Timberflooring Pty Ltd (ALT). ALT carried out the flooring installation at the subject property at the request of the Builder. Mr Tan states in his affidavit that he had been asked to prepare his affidavit because the Tribunal found that the flooring installation was defective. Mr Tan had not provided an affidavit for the Tribunal proceedings.
3. Mr Aronstan is the Builder's solicitor. Mr Aronstan explains that the hearing was held on 5, 6 and 8 February 2024, but that the sound recordings for 5 and 6 February 2024 contained a "constant hissing, making it impossible to hear what was being said". There was no problem with the sound recording of the hearing on 8 February2024, which was held in a different Tribunal room.
4. Mr Fittinghoff is the Builder's expert. He prepared an expert report for the Tribunal hearing, and a joint expert report together with the Homeowners' expert Mr Frizzell. The two experts also participated in a "hot tub" at the Tribunal hearing.
5. Mr Fittinghoff says that he had been informed that the sound recording of his evidence at the Tribunal hearing was unintelligible such that no transcript could be produced.
6. He then states that he read [206] to [212] of the Decision, and then reproduces [209] and [210], which are set out above.
7. Mr Fittinghoff says that the "manufacturers instructions" referred to at [2069] and the "Installation Guide" referred to at [210] is a document titled "Tongue & Groove Installation Guide", being the manufacturer's installation guidelines (Installation Guide).
8. Mr Fittinghoff then says that he did not, during the Tribunal hearing or at any time, resile from the opinion he expressed in his report and in the joint expert report, and remains of the opinion expressed in those reports.
9. The Homeowners' opposed the tender of the affidavits of Mr Tan and Mr Fittinghoff. They submit that that this evidence is not "new" evidence in the requisite sense. In relation to Mr Fittinghoff''s evidence, this the Homeowners submit is "a second bite of the cherry", Mr Fittinghoff having prepared a report, a joint expert report and given evidence at the Tribunal hearing.
10. We agree. We adopt the words of a recent decision of the Appeal Panel, Abdallah v Paco Nominees Pty Ltd [2024] NSWCATAP 259, where the Appeal Panel said at [25]: We refuse the tender of these materials given the long-standing decision of the Appeal of Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 which has been followed and applied on many occasions. To paraphrase that decision, the issue is whether, objectively, the evidence has arisen since the hearing and was "not reasonably available" at the time of the hearing (Al-Doauk at [27]), being documents that were before the experts briefed by the parties.
11. Clearly that test is not satisfied in relation to either the affidavit of Mr Tan nor Mr Fittinghoff.
12. For these reasons, we rejected the appellant's application to rely on these two affidavits. As to the solicitor's affidavit, this we allow as it was relevant to the production of a transcript of the Tribunal hearing at the appeal hearing.

Evidence sought to be relied on by the Builder

1. For their part, the Homeowners sought to rely on an affidavit of their solicitor Mr Job Yeob (Jon) Na sworn 15 October 2024. Annexed to Mr Na's affidavit were transcripts of the sound recording of the Tribunal hearing sought to be relied on by the Homeowners.
2. Given the orders of the Appeal Panel made at a directions hearing on 7 August 2024, namely that the parties lodge and serve a typed transcript of the relevant parts of the Tribunal hearing on which they proposed to rely, together with a sound recording of the entire hearing, we allowed that material to be tendered.

The parties' submissions

1. We were assisted by very helpful written submissions from both parties' counsel, which submissions were supplemented orally at the appeal hearing.

Builder's submissions

1. The Builder submits that the question of law raised by Grounds 1 and 2 is whether the factual finding concerning the applicability of the installation guide was made without evidence to support it. In short, the Builder submits that there was no evidence to support the Tribunal's finding that the floorboards were not affixed in accordance with the Installation Guide. That the Builder submits this raises a question of law: Kosta v HLA Insurance Services Pty Ltd (2010) 251 CLR 390 at [91].
2. The Builder submits that the "fundamental" errors in the Tribunal's reasoning were: 1. the assumption that the Installation Guide specified how the floorboards were to be installed at the property; and 2. that Mr Fittinghoff had conceded, in his oral evidence, that the floorboards were to be installed in accordance with the Installation Guide.
3. Elaborating on these contentions, the Builder submits that: 1. the Tribunal did not have an evidentiary basis for the adoption of the assumption by the Homeowners' expert, Mr Frizzell, that the floorboards were to be installed in accordance with the Installation Guide, and there was is no basis for that assumption in either the contract or statute; 2. there is no basis in the contract or statute for a requirement that the floorboards be installed in accordance with the Installation Guide; 3. the Builder warranted that it would perform the work with due care and skill and it was an error to find that "the floorboards were installed without due care and skill" (Decision, at [210]) on the basis of a noncompliance with the Installation Guide which was not contractually specified or was not applicable in the circumstances.
4. The Builder further submits that the Tribunal's finding that Mr Fittinghoff conceded, in his oral evidence, that the floorboards were to be installed in accordance with the Installation Guide failed to have regard to the totality of Mr Fittinghoff's evidence which was to the effect that: 1. the engineered floorboards were adhered to Regupol sound proofing (an acoustic underlay the installation of which was specified in the Interior Design Schedule, which was, in turn, laid upon the substrate); 2. there was a layer of acoustic underlay between the floorboards and the substrate; and that 3. in those circumstances, the Installation Guide did not apply because it was concerned with adhering floorboards directly to the substrate which was not the case at the property.
5. The Builder submits the finding that the "concession" provided a "sufficient basis for the finding that the floorboards were installed without due care and skill, contrary to s 18(1)(a) of the HBA" was in error: Decision, at [210]. A proper understanding of Mr Fittinghoff's evidence, and the irrelevance of the Installation Guide to the circumstances at hand, ought to result in the Appeal Panel setting aside Order 1. [3]

Homeowners' submissions

1. The Homeowners' submissions may be summarised as follows.
2. The submissions commence with the Homeowners submitting that the Decision discloses no error of law, and cannot be said to involve any question of principle, issue of public importance, clear injustice factual error or anomaly in fact-finding such as to justify a grant of leave.
3. The "fundamental question" for the Tribunal was simply whether the floorboard installation represented work that did not conform with the statutory warranty ins 18B(1) of the HB Act that the work would be done with "due care and skill and in accordance with the plans and specifications set out in the contract".
4. The Owners relied upon the evidence Mr Frizzell, in whose opinion the floorboard installation had been performed in breach of the statutory warranties on two distinct bases: 1. "As the floorboards have not been fully glued down and are detaching from the substrate the work has not been carried out in accordance with the manufacturer's installation instructions"; and 2. "As there are damaged floorboards, out of level flooring, floorboards not adhered to the substrate and floorboards with pencil mark, the work has not been carried out with due care and skill."
5. For the Builder, Mr Fittinghoff addressed these issues by saying: 1. in relation to adhesion, that the photographs referred to by Mr Frizzell that he had seen did not, in his opinion, "prove anything"; and in relation to the floorboards not being level, that he had been instructed that "the whole house was severely out of level" and that "rebuilding the whole house would have been necessary" to address that problem; 2. the contract did not require the Builder to comply with the "manufacturer's specification" and that the specification did not apply in circumstances where any acoustic underlay had been laid on the substrate.
6. The Builder further submits that it appears that the Tribunal's attention was not directed to item 11.03 of the contract specification which relevantly provided: "Inspection of Sub-Base 11.03 Flooring sub-contractors shall examine floor sub-base surfaces for acceptability. Unsuitable surfaces shall be remedied, dampness, undulations, hollows, projections and the like which will render the sub-bases unsuitable are to be rectified prior to the installation of the flooring. NOTE: Commencement of work will signify acceptance of sub-surfaces for satisfactory laying of finishes. Accordingly, no variations in relation to sub-surface will be allowed once work has commenced.
7. The Homeowners submit that item 11.03 of the specification, in conjunction with Mr Fittinghoff's evidence militates conclusively in favour of a finding that the floorboard installation was not undertaken with due care and skill, nor in accordance with the plans and specifications set out in the contract.
8. The Homeowners submit that that matter is sufficient to render any further consideration of appeal grounds 1 and 2 "entirely academic", and then advances further submissions in case that submission is not accepted.
9. Those submissions may be summarised as follows.
10. Ground 1 mischaracterises the basis for the finding that the installation was undertaken without due care and skill by suggesting that the Tribunal proceeded on the assumption that the Installation Guider was mandatory in its application. This is because this ground conflates two distinct questions, namely: 1. whether the Tribunal was correct to consider the Installation Guider was mandatory; and 2. whether the Tribunal was correct to assess the question of due care and skill informed by relying on the content of the Installation Guide.
11. The Homeowners submit that no such conflation is warranted, and that there was no express indication anywhere in the Decision to the effect that the Tribunal assumed the mandatory application of the Installation Guide, either as a contract term or as the sole touchstone on the question of "due care and skill". On the contrary, the Homeowners submit that the Tribunal was "acutely aware" of the distinction between the mandatory application of the Building Code and the relevant Australian Standards when considering whether a s 18B warranty had been breached. As such, the Homeowners submit that there is no basis to believe that the Tribunal misapprehended the status of the manufacturer's installation guide.
12. Further, the Builder's submission that the Tribunal did not have any evidentiary basis for the adoption of the assumption that the floorboards were to be installed in accordance with the Installation Guide is wrong because: 1. there is no express basis anywhere in the reasons to suggest that the Tribunal accepted or assumed as a basis for his decision that by law or contractual agreement the manufacturer's installation guide had primacy or set out the only means by which an installation could be undertaken with "due care and skill"; and 2. in the context of the consumer protection regime of the HBA, the objective standard incorporated by the phrase "due care and skill" must be informed by "all of the facts and circumstances": Liu v Zaccaria trading as Precision Automotive Engineers [2017] NSWCATCD 59 from [71], noting that: 1. the phrase "due care and skill" as used in consumer protection legislation is equivalent to the common law duty to take reasonable care: Let's Go Adventures Pty Ltd v Barrett [2017] NSWCA 243 at [6]); and 2. the duty of care at common law is objective - that is the degree of care and skill required will be objectively assessed by the standards and procedures adopted in the relevant field: Rogers v Whitaker (1992) 175 CLR 479.
13. Accordingly, the Homeowners submit that the Tribunal was entitled to, and clearly did, inform itself by reference to the Installation Guide as to what the manufacturer suggested was an appropriate an installation method, and not that Mr Fittinghoff himself gave evidence that builder should do exactly that.
14. Finally, in respect of floorboards, admittedly installed out of level and without any prior remediation of sub-surfaces, the Tribunal was entitled to have regard to what a builder exercising due care and skill should have done in the circumstances, Mr Fittinghoff confirming that the builder should consult the manufacturer's guidelines when installing floorboards.
15. With respect to ground 2, the Homeowners submit, in summary: 1. Mr Fittinghoff clearly conceded (and these concessions were attributed to him in the Decision) that: 1. it did not appear that the Builder had laid the floorboards in accordance with the manufacturer's installation guide; 2. the sub-surfaces were out-of-level and had not been levelled prior to the installation of the floorboards 1. the Tribunal did not suggest any concession by Mr Fittinghoff to the effect that the floorboard installation was to be strictly in accordance with the manufacturer's installation guide, and there was no suggestion by the Senior Member he considered that no other method of installation could have been acceptable.
16. While Mr Fittinghoff may not have resiled from the evidence in his written report, it remains the case that his only answer in relation to the floorboards having been laid out-of-level was that to "correct this situation, rebuilding the whole house would have been necessary. It appears the Owners were not prepared to do this."
17. In this regard: 1. any suggestion that the contract did not call for the remediation of the sub-surfaces is demonstrably wrong; 2. Mr Fittinghoff's written evidence must be considered in light of his evidence at the hearing of what "should" have been done to level the sub-surfaces; 3. the Tribunal considered and dealt with the contention that the Owners' had elected to proceed with laying floorboards on an uneven sub-surface: see Decision at [211].
18. In the circumstances, the Homeowners submit that no error in law or fact arises.

Consideration

1. The Builder's submissions "roll up" Grounds 1 and 2 together. Its submissions are amply set out above. The Builder submits that the question of law raised by those grounds is whether the factual finding concerning the applicability of and failure to comply with the Installation Guide was made without evidence to support it.
2. If that is the way the Builder wishes to frame the two grounds, considered together, then we accept this raises a question of law: Kostas.
3. But we see no error on this question of law. This is for the following reasons.
4. The two grounds deal with Item 6 of the claimed defects, being the floorboards. It was alleged (Points of Claim par [28]), that in breach of the contract, the Builder did not carry out and complete the contracted works in accordance with the contract and that the works contained defects which amount to breaches of the express terms of the contract and of the statutory warranties implied into that contract by operation of s 18B of the HB Act. Particulars of that allegation included: damaged floorboards, out of level flooring, floorboards not adhered to substrate.
5. The Builder's fundamental proposition is that the Tribunal proceeded on the basis that the obligation of due care and skill was determined by the content of the manufacturer's Installation Guide, an approach not warranted by the contract or the law.
6. We consider that proposition to be misconceived.
7. Prior to considering each of the 17 items claimed by the Homeowners as defective works, the Tribunal set out some relevant principles. The Tribunal stated: Issue 8 - cost of rectification … 159 It is necessary to note that, for there to be a defect, the owners must satisfy the onus of proof which they bear by establishing a breach of one or more of the warranties implied into their building contract by s 18B of the [HB Act], which were set out in cl 1(b) of the contract. 160 A breach of the Building Code of Australia (BCA), which is part of the National Construction Code (NCC), would involve a breach of s 18B(1)(c) because the BCA is given the force of law by the Environmental Planning and Assessment Act 1979 (NSW) and the associated regulations. Where the BCA sets a performance requirement, the question becomes whether that performance requirement has been met. 161 On the other hand, while a failure to comply with an Australian Standard is a relevant consideration (Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61 at [10]), that is not necessarily determinative. It is necessary to consider matters such as whether the relevant provision is mandatory or only provides guidance. 162 The status of the NSW Guide to Standards and Tolerances is specifically governed by cl 26(a) of the contract (A1200), the effect of which is that failing to satisfy that guide will not, of itself, be sufficient to render work defective. 163 For the sake of completeness, for each proven defect, the Tribunal has determined both the wording of a scope of work (set out in Appendix A) and the reasonable cost of rectification, thereby catering for the alternatives of a work order or a money order.
8. True it is, that in its general statement of principles, the Tribunal did not refer to the manufacturer's Installation Guide. Nevertheless, the Tribunal's approach was clear; the onus was on the Homeowners to satisfy the onus of proof that, in respect of any claimed defect, there was a breach of one of other of the implied warranties. This could not be done by failing to comply with an Australian Standard or failing to satisfy the NSW Guide to Standards and Tolerances.
9. Applying that logic, nor would a breach of the statutory warranty be established by not complying with the Installation Guidelines. Nevertheless, in the circumstances of this matter, the Tribunal found that the failure to level the floor before the floorboards were laid and the floor boards not being affixed (or installed) in accordance with the manufacturer's installation guide provided a sufficient basis to find that the floorboards were installed without due care and skill, contrary to s 18B(1)(a) of the HB Act: Decision at [210].
10. Thus, we accept the Homeowners' submission that, by reference to [160] - [162] and [209] [4] , the Tribunal was aware of the distinction between the mandatory application of the Building Code of Australia and the "somewhat lesser status" of the relevant Australian Standards when considering whether a s 18B warranty had breached. There is therefore no basis to believe that the Tribunal misapprehended the status of the Installation Guide.
11. For the avoidance of any doubt, we also accept the Homeowners' submission that the Tribunal was entitled to inform itself by reference to the Installation Guide as to what the manufacturer suggested was an appropriate an installation method.
12. As the Tribunal stated in Glen MacFadyen and Heidi MacFadyen v George Tadrosse [2014] NSWCATCD 194 at [46] (in a passage relied on by the Homeowners): … evidence that work does not comply with the Building Code of Australia would establish a basis for a finding that sub section 18B(c) of the Act has been breached. Evidence of the details in which work does not comply with the contractual plans and specifications would form the basis for a finding that sub section 18B(a) of the Act has been breached. Evidence of work not being carried out in a proper and workmanlike manner would in my view involve identification of the work in question, a statement of how the expert would expect it to be carried out in in a proper and workmanlike manner and then identification of the factors which establish that the way in which the work has been carried out falls short of it being carried out in a proper and workmanlike manner. Evidence of this nature, if accepted, would form the basis for a finding that sub section 18B(a) of the Act has been breached.
13. In summary, the Homeowners were correct to submit that the "fundamental question" for the Tribunal to decide was whether the floorboard installation represented work that did not conform with the statutory warranty ins 18B(1) of the HB Act that the work would be done with "due care and skill and in accordance with the plans and specifications set out in the contract".
14. We discern no error in the Tribunal's statements of principle or its application of those principles to the facts before it.
15. For completeness, we note that the Builder submitted that the Tribunal made two fundamental errors in its reasoning.
16. The first such error was that the Tribunal wrongly assumed that the Installation Guide specified how the floor boards were to be installed.
17. We reject that submission. The Installation Guide appears at pp 659 to 665 of the Appellant's Bundle of Documents. It gives detailed instructions over almost three pages how the floor boards were to be installed, including instructions as to the "glue-down method" of installing flooring". The Installation Guide also gives guidance when laying flooring over timber joists (in the case of Grande boards), over timber battens (again in the case of Grande boards), and the floating method of installation (for Piccolo boards).
18. The second claimed error is that the Tribunal's conclusion that Mr Fittingshoff had conceded, in his oral evidence, that the floorboards were to be installed in accordance with the Installation Guide.
19. We also reject that submission. During the hearing Tribunal hearing on 5 February 2024, the transcript records the following: Homeowners' Counsel: … so you would agree that the builder should consult the manufacturer's guidelines when installing floorboards, correct? Fittinghoff: Correct. Homeowners' Counsel: So you would agree that the steps that should have been taken are those outlined on this page 5, that's the 656 of the court Book, which outlines the levelling of the flooring, correct. Fittinghoff: Correct …
20. After taking Mr Fittinghoff to that portion of the Installation Guide dealing with the "glue down" method of installation, the exchange continues: Homeowners' Counsel: So you would agree wouldn't you, that the builder['s] client would have installed the floorboards in accordance with the glue down method outlined here? Fittinghoff: Correct. In accordance with that, that's how he would have done it.
21. Given that evidence, we see no error in the Tribunal's finding that Mr Fittinghoff conceded that the floorboards had not been affixed in accordance with the Installation Guide.

Conclusion

1. On the basis that the Builder has raised a question of law, we see no error on a question of law and dismiss the appeal.

Costs of the Appeal

1. The Builder has been unsuccessful. Our preliminary view is that the Builder should pay the Homeowners' costs as agreed or as assessed.
2. Either party contending for some other order should filed and serve submissions (and, if necessary, evidence) on costs within 14 days of the publication of these reasons.
3. The other party may respond within a further 14 days.
4. Submissions are to be limited to five pages.
5. We propose to deal with costs "on the papers". Any party opposing that course should address that issue in their submissions. We draw the parties' attention to the observations of the Appeal Panel in Westweller v The Owners Strata Plan No 18482 [2023] NSWCATAP 113 at [85] that "costs decisions … on appeal (unless dealt with at the time of the hearing) are routinely considered 'on the papers', and without a hearing".

Costs of the Tribunal proceedings

1. As noted above, the Builder indicated that, following the publication of these reasons, it wished to be heard on the costs of the Tribunal proceedings.
2. We do not think that course is appropriate.
3. In its orders of 20 June 2024, the Tribunal indicated that each respondent in the proceedings before it was to pay the applicant's costs, subject to receipt of further submissions.
4. As far as we are aware, no further costs order have been made. Regardless of whether further costs orders have been made, the Builder should raise any further issues about costs with the Tribunal (if that is appropriate, for instance by way of amendment to an order pursuant to s 63 of the NCAT Act), or otherwise by way of appeal to the Appeal Panel.

Orders

1. The Appeal Panel orders: 1. The appeal is dismissed. 2. The preliminary view of the Appeal Panel is that the appellant should pay the respondent's costs of the appeal as agreed or as assessed. 3. Either party contending for some other order should file and serve submissions (and, if necessary, supporting evidence) on costs within 14 days of the publication of these reasons. 4. The other party may respond within a further 14 days. 5. In their submissions the parties are to address whether the costs of the appeal may be determined without a hearing in accordance with s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).

Endnotes

1. Mr Frizzel was the Homeowner's expert.
2. Mr Fittinghoff was the Builder's expert.
3. Being the order in proceedings 2023/00382515 hat the Builder pay the Homeowners $166,228.53.
4. Inadvertently referred to as [219] in the Homeowners'' submissions 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: 20 February 2025