Wilson v Dash

NCAT Appeal Panel|2017-05-17

Date of Decision: 23 December 2016 Before: C Paull, Senior Member File Number(s): HB 15/34814 and HB 15/59593

Reasons for decision

This appeal arises out of a home building case heard in the Consumer and Commercial Division of the Tribunal in July 2016.
There were two applications heard by the Tribunal Member. First, the appellants claimed for incomplete and defective work, refund of money alleged to have been overpaid to the respondent, lost rent and costs. Secondly, the respondent claimed for variations.
In these Reasons for Decision we will refer to the appellants as the owners and to the respondent as the builder.
On 23 December 2016 the Tribunal Member made the following orders: '(1) In application HB 15/59593 the Homeowners/Cross respondents are liable to pay the Builder /Cross applicant $52,792.86. (2) In application HB 15/34814 the Builder /respondent is liable to pay the homeowners/applicants $179,408.00 for defective and incomplete work. (3) In off-setting order 2 against Order 3 the Builder is to pay the Homeowners $126,615.14 by 9 January 2017. (4) The Builder is to provide to the Homeowners by 9 January 2016 with all the certificates referred to at point 9 in Annexure A (attached to this decision) (5) The parties have leave until 30 January 2017 to have the proceedings listed for any costs application or any issues arising in relation to compliance with Order 5.'

We will consider each of the owners' Grounds of Appeal.

Ground 1

The owners submit that the Tribunal Member erred in law in making a finding of fact when there was no evidence to support the finding. This is the only basis advanced in support of ground 1. We agree that if the submission can be made good, the owners will have established an error of law.
Ground 1 relates to 4 items in a Scott Schedule, items 3, 4, 7 and 8. Before the hearing the parties' experts had met in an experts' conclave and agreed as follows in connection with these items: '3. Agree $600 to trim around even wall surfaces. *Assumes engineer will certify wall is located on footing and is unconcerned about wall being out of plumb. 4. Agree Nil *Assumes engineer will certify wall is located on footing. 7. Agree $33,282 If the retaining wall can't be certified by a practicing structural engineer. 8. Agree $4,160 If the post foundations can't be certified by a practicing structural engineer.'
The owners submit that the parties' experts agreed that items 3, 4, 7 and 8 were defective. It is then submitted by the owners that it was further agreed that if there was no certification by an engineer, that the rectification costs of items 3 and 4 would be $17,115.00 and $26,064.00 respectively and the rectification costs of items 7 and 8 would be as stated above. The owners appeal bundle does not support this submission. The evidence which pre-dated Annexure A attached to the decision, was that in a signed record of conclave the owners expert stated that the estimate of loss for items 3 and 4 would be $17,115.00 and $26,064.00 respectively while the builder's expert's position in relation to those items was 'Defect disputed. Quantum disputed.'
The owners further submit that on the second day of the hearing the builder adduced evidence from a structural engineer, Dr Zhang, which purported to be the necessary certification for the above scott schedule items.
The Tribunal Member dealt with Scott Schedule item 3 as follows: '60. In annexure A the experts state "Agree $600" and "Assumes Engineer will certify wall is located on footing and is unconcerned about being out of plumb". 61. Annexure A represents the joint opinion and indeed the joint agreement of the expert witnesses in these proceedings, being the persons who met on site, held a conclave and who reached some agreement at that conclave and who, with the benefit of further discussions, were able to reach the further agreement set out in Annexure A, relation to this item. For these reasons I am of the view it is the best evidence before the Tribunal on this item 62. Clearly the agreed opinion is based on an assumption. There is nothing surprising in that. All expert evidence is based on assumptions. In this instance the assumption is that an engineer "will" certify that the wall is located on footing and is "unconcerned" about it being out of plumb. 63. There was no cross-examination of the experts to challenge or further investigate that assumption. There was no application made to the Tribunal to call further evidence to challenge or investigate that assumption. 64. The only evidence put before the Tribunal after the tender of Annexure A was the first Zhang letter and the evidence of Dr Zhang given on the second hearing day. This evidence does not diminish the agreement reached by the experts and the assumption on which that agreement is based. Whilst Dr Zhang's first letter and evidence may not amount to certification, neither this evidence nor any other evidence before the Tribunal rebuts the assumption of the experts. 65. I therefore accept the experts evidence and the assumption on which it is based. I allow the $600.'
Item 4 was dealt with on the same basis and no amount was found in the owners' favour.
Items 7 and 8 were rejected by the Tribunal Member because she was not satisfied that the items 'can't' be certified by a practising structural engineer.
As a result the owners obtained an order in their favour in the sum of $600.00 in relation to scott schedule items 3, 4, 7 and 8.
The owners submit that the Tribunal did not accept that Dr Zhang's evidence amounted to certification as indicated by paragraphs [64] and [73] of the decision. Paragraph [73] of the decision states: 'While the first Zhang letter may not go so far as to amount to the requisite certification, this evidence does not shake the premise that the required certification "can't" be obtained.'
The submission in support of this ground of Appeal is that the Tribunal's conclusions about items 3, 4, 7 and 8 was predicated upon it being justified in accepting the experts 'assumption' about certification of works, but the Tribunal Member rejected the only evidence before it concerning certification, namely the evidence of Dr Zhang. The owners submit that the Tribunal: 'Impermissibly converted the experts' 'assumptions of fact' into its own 'findings of fact'. That it did so is clear from paragraphs [62] to [64] with reference to item 3, but is emblematic of the Tribunal's approach to … all four items.'
The builder's Reply to Appeal linked the issue raised by this ground of appeal to the Tribunal's order 4 which was: 'The Builder is to provide to the Homeowners by 9 January 2016 with all the certificates referred to at point 9 in Annexure A (attached to this decision)'
The builder's counsel referred us to paragraph [78] of the Tribunal Member's Reasons and orders 4 and 5 submitting that this material made it clear that the certification referred to by the experts would be forthcoming.
Paragraph [78] of the Tribunal Member's Reasons states in concluding that part of the decision which dealt with 'The Homeowners' Claim For Defective Work': 'Before concluding this part of the homeowners' application I turn to Item 9 in Annexure A "Agree Certification Required Includes": which is then followed by a number of specified items. From the parties submissions there appears to be an issue of what has been and indeed, what can be provided. I propose to make an order requiring the builder to comply with item 9 in Annexure A and allowing a right of relist to the parties if there is non-compliance with this order or if compliance cannot be implemented.'
Orders 4 and 5 are: '4. The Builder is to provide to the Homeowners by 9 January 2016 with all the certificates referred to at point 9 in Annexure A (attached to this decision) '5. The parties have leave until 30 January 2017 to have the proceedings listed for any costs application or any issues arising in relation to compliance with Order 5.'
There is an obvious error in order 5 in that it should refer to order 4.
We were provided with a copy of Annexure A attached to the decision. Item 9 of Annexure A stated that the experts agreed that certification required in relation to defective items included issues such as certification from a structural engineer in relation to subjects including footings and slabs, retaining walls and wall construction.
It is submitted on behalf of the builder that the combination of paragraph [78] and orders 4 and 5 made it clear that the certification referred to by the experts would be forthcoming by the making of an order requiring the builder to comply with item 9 in Annexure A and allowing a right of relist if there was non-compliance with the proposed order or if compliance could not be implemented.
We do not accept the builder's submission because the Member's reasons at [78] do not make that intention clear. Items 3 and 4 depend upon an engineer certifying that the walls are located on a footing and in connection with item 4, being unconcerned with the wall being out of plumb. Order 4 provides no guarantee or assurance that such certificates will be forthcoming. Items 7 and 8 assume certification cannot be obtained.
In dealing with items 3 and 4, at [65] the Tribunal Member made no reference to a need for the future provision of an engineer's certificate. She found that the experts had agreed a rectification cost and had as part of their agreement jointly assumed that an engineer would provide the necessary certification.
In relation to item 7, the Member recorded that the experts had agreed that $33,282.00 was the measure of the owners' damages if the retaining wall could not be certified by an engineer. Put another way, if the builder was able to obtain such a certificate, the owners would not recover the sum of $33,282.00. The Tribunal Member at [73] of the Reasons for Decision interpreted the experts agreement in relation to item 7 as being that the required certification could not be obtained. This interpretation was repeated at [74] when the Tribunal Member stated that she accepted 'the experts premise', namely that the required certificate could not be obtained.
In our view the Tribunal decision establishes that the Member did not as submitted by the owners convert the expert's assumptions into her own findings of fact. What occurred was that the Tribunal Member interpreted or construed the experts' agreements. In so doing she found that they had made an assumption in each of their agreements which had not been challenged. She then accepted and made orders based on their agreements which included the assumptions which she found they had expressed.
In so doing the Tribunal Member was not making findings of fact, without supporting evidence.
Even if the conclusion drawn by the Tribunal Member were to be said to have been 'illogical', an illogical inference does not in itself constitute an error of law. As Mason CJ stated in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 356, [89]: 'So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.'
For the reasons set out above we reject this ground of appeal.

Grounds 2 and 3

These grounds of appeal relate to the fact that the parties entered into a standard Department of Fair Trading written building contract which contained clause 13 relating to the variation of work done or materials used under the contract. It is common ground that the builder claimed for variation of work done or materials used and his claims did not comply with clause 13. Clause 13 provides as follows: 'The work to be done all materials used under this contract maybe varied: at the request of the owner; or at the request of the contractor. If the necessity for the variation due to the fault of the contractor the owner will not be liable for any increase in the contract price, or due to such other matters that could not reasonably be expected to be foreseen by an experienced competent and skilled contractor for the completion of the work at the date of the contract, or due to a requirement of a council or other statutory authority relating to the work if at the date of this contract such requirement could not reasonably have been foreseen by the contractor. Procedure for variations Before commencing work on a variation, the contractor must provide to the owner a notice in writing containing a description of the work and the price (including GST). If not otherwise specified, the price will be taken to include the contractor's margin for overheads supervision and profit. The notice must then be signed and dated by both parties to constitute acceptance. If the time for completion will be delayed by the variation the contractor must include in the notice an estimate of the additional time required. Any extension of time must be dealt with in accordance with Clause 7. The requirement for variations to be in writing does not apply if there is likely to be a danger to any person or damage to property, and the work could not be done promptly if the variation had to be put in writing before commencing the work. Variations shall be subject to the overall conditions of this contract. Adjustment of contract price The cost of deletions from the contract will be deducted from the contract price. The price of any variation specified in the notice signed and dated by both parties will be added to the contract price. Any adjustment to the contract price due to an agreed variation will be taken into account at the time of the next progress payment or paid as agreed by the parties. '
The builder's claim for variations was made on a quantum meruit basis apparently with reference to the situation in Liebe v Molloy [1906] HCA 67: (1906) 4 CLR 347.
The owners not only resist the claim by the builder for payment for variations (being extra work) but also seek to be repaid money which they had previously paid to the builder for variations. During his oral submissions in this appeal, counsel for the owners said that there were 'many variations' and 'about 50 variations'.
The owners submit that the Tribunal erred in law in holding that the builder was entitled to recover on a quantum meruit basis for variations where the builder did not comply with or follow clause 13, and further erred in law in not considering their submissions.
The owners submit that the Tribunal Member erred in law in stating at paragraph [129]: 'In relation to the first of these submissions, there is no dispute that the builder was required, under clause 13 of the contract, to reduce the variations to writing and failed to do so. There is nothing in the submissions, evidence or case law put to the Tribunal, however, to suggest that this precludes the builder from prosecuting a quantum meruit claim.'
The basis of this ground of appeal lies in a submission that the owners made relying on the decision of the Court of Appeal in Trimis v Mina [199] NSWCA 140 in which the court stated at [54]: 'No action can be brought for restitution while an inconsistent contractual promise subsists between the parties in relation to the subject matter of the claim.'
The owners submitted to the Tribunal Member that clause 13 of the contract was an inconsistent contractual promise and the builder was not entitled to rely on or claim in quantum meruit where clause 13 'subsists'. The owner referred to the decision of the Court of Appeal in Trimis v Mina and the cases referred to therein at [54]. The owners also referred to the decision of the Court of Appeal in Built Interiors Pty Limited v Three Dinosaurs Pty Limited [2003] NSWCA 290.
The owners' submissions both to the Tribunal Member at first instance and in support of these grounds of appeal seem to us to pay insufficient regard to the situation referred to in paragraphs [56] - [64] of Mason P.'s judgement in Trimis v Mina with which Priestley JA and Handley JA agreed. Mason P. referred to the decision of the Court of Appeal in Update Constructions Pty Limited v Rozelle Child Care Centre Limited (1990) 20 NSWLR 251 and Priestley JA's discussion of Liebe v Molloy stating at [60] and [61]: '60 Priestley JA (at 271-2) discussed the early High Court decision of Liebe v Molloy, a case which (like the present) involved a claim for extras for which there was no order in writing in the context of a lump sum written contract that stipulated that such claims should be disallowed. The High Court held that if the proper inferences for the facts were (i) that the employer had actual knowledge of the extra works as they were being done, (ii) knew that they were outside the contract and (iii) knew that the builder expected to be paid for them as extras then a contract to pay them could properly be implied. If however the fact was that the owner did not know the particular works were extras or did not know or believe that the builder expected to be paid for them, then it would be proper to conclude that no contract to pay for them should be implied. In the light of those considerations, Griffith CJ (who gave the judgment of the Court) said (at 354): When a man does work for another without any express contract relating to the matter, an implied contract arises to pay for it at its fair value. Such an implication arises from an express request to do work made under such circumstances as to exclude the idea that the work was covered by a written contract. So it would arise from the owner standing by and seeing the work done by the other party, knowing that the other party, in this case the contractor, was doing the work in the belief that he would be paid for it as extra work... 61 Priestley JA continued (at 272): One point which seems to me to be basic to the decision in Liebe is that if the work claimed for had been work required by the contract to be done, then the builder could not recover for it, because he had not complied with the contractual requirements. If however the work was work which the builder was not required to do by the contract ("outside the contract" in the words of the High Court) then, if certain further facts were found, the builder could recover. It may be that the basis of such recovery would these days be referred to ideas of restitution rather than implied contract.'
The Court in Trimis v Mina was, as stated at [63] of the decision, content to follow the majority in Update Constructions Pty Limited v Rozelle Child Care Centre Limited which followed the decision of the High Court in Leibe v Molloy: 'that if the proper inferences for the facts were (i) that the employer had actual knowledge of the extra works as they were being done, (ii) knew that they were outside the contract and (iii) knew that the builder expected to be paid for them as extras then a contract to pay them could properly be implied'
As stated by Priestley JA, 'the basis of such recovery would these days be referred to ideas of restitution rather than implied contract'.
In our view the Tribunal Member was appropriately referring to what was discussed in these decisions and authorities when she stated at [130]: 'However, I accept the homeowners other submissions that the builder must show that the homeowners were aware of the work, approved it, knowing it to be outside the contract and that the builder would expect to be paid for it.'
Further, in our view the Tribunal Member did not err at law by not specifically referring to the owners written submissions as referred to by them in their written submissions in this Appeal. In Quan Pham v Legal Services Commissioner [2016] VSCA 256 at [88] the Court stated in connection with the requirement to give reasons: 'The principles relating to the obligation of a judge, or judicial officer, to provide adequate reasons for a decision, are well established and are not in dispute. In essence, the reasons must be sufficient to enable the parties to understand the extent to which their arguments have been understood, and either accepted or rejected, and to understand the basis of the judge's decision. In addition the reasons must be sufficient to enable an appeal court to ascertain the reasoning upon which the decision has been made.[41] However, that obligation does not require the judge to expressly deal with each and every argument that might have arisen in the course of the case'
Consistently with that passage from Quan Pham v Legal Services Commissioner it is our view that the Tribunal Member was not required to deal with each and every argument and submission advanced by the owners.
For these reasons we reject these combined grounds of appeal.

Ground 4

This ground of appeal goes to the findings made by the Tribunal Member in connection with what we would describe as the Liebe v Molloy basis for finding in favour of the builder for variations which were not documented in accordance with clause 13 of the contract.
The owners submit that in order to recover for variations not documented in accordance with clause 13 of the contract the builder was obliged to and had the onus of establishing in compliance with what was stated by the High Court in Liebe v Molloy that the owners: 1. had actual knowledge of the extra works as they were being done, 2. knew that the extra works were outside the contract; and 3. knew that the builder expected to be paid for them as extras.
The owners further submit that the Tribunal Member failed to consider the builder's claimed variations separately to establish whether the criteria referred to in the preceding paragraph had been made out, but instead considered the builder's variation claims 'globally'.
The Tribunal Member referred particularly at [137] to [144] to a number of factors which supported her statement at [135] that the builder 'mounted a persuasive case' that the owners knew of, or that there was sufficient evidence that they knew of, the matters referred to in [53] above. Those factors were: 1. The active role the homeowners played in preparing spreadsheets and tracking the cost of the ongoing building work. as acknowledged by one of the owners; 2. The specific and detailed instructions from the owners to the builder appearing in text messages from 2013 - 2015 on a variety of matters integral to the building process; 3. Email evidence from the builder in the 2013-2015 period including an email of 8 March 2015 in which the builder wrote to the owners about payments referring to variations supporting the builder's case that variations and financing of variations were matters discussed between the parties; and 4. That a majority of the matters is issue were of a physically visible and conspicuous nature.
At paragraphs [145] - [146] the Tribunal Member stated: 'Given what I have found, on the evidence before the Tribunal, to have been the active and involved role the homeowners played in the building work, it is difficult to accept that the homeowners did not request, agree or sanction the items in issue and in so doing, were unaware of the financial repercussions. I am therefore satisfied, on balance, that the homeowners approved the variations, knowing them to be additional to the contract work and to the contract sum.'
Counsel for the owners states in his written submissions that the generalised fact finding approach by the Tribunal to the Leibe v Molloy criteria, rather than enquiring about the existence of those criteria separately for each variation claimed by the builder was an error of law such that no reasonable decision maker would adopt such an approach. The owners rely on Associated Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223, Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86 and Minister for Immigration and Citizenship v Li (2013) 249 CLR 332.
In oral submissions counsel for the owners stated that there was a failure of fact finding by the Tribunal Member.
As regards the owners submissions that attack the process of fact finding by the Tribunal, we note that in the High Court in Australian Broadcasting Tribunal v Bond (to which we have already referred to above in relation to Ground 1) Mason CJ stated at [88] -[89]: 'But it is said that "(t)here is no error of law simply in making a wrong finding of fact": Waterford v. The Commonwealth [1987] HCA 25; (1987) 163 CLR 54, per Brennan J. at p 77. Similarly, Menzies J. observed in Reg. v. The District Court; Ex parte White [1966] HCA 69; (1966) 116 CLR 644, at p 654: "Even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound, this would not amount to an error of law on the face of the record. To establish some faulty (e.g. illogical) inference of fact would not disclose an error of law." 89. Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.'
In Bull v NSW Land and Housing Corporation [2016] NSWCATAP at [58] the Appeal Panel stated in context of a discussion regarding fact finding: 'An explanation of the interaction of these various bases for challenge to decisions and whether or not a question of law arises was concisely set out in the decision of Beech-Jones J in Insurance Australia Limited v O'Shannessy [2015] NSWSC 1047. At [57]-[59]: 57 A review of the authorities reveals that supervisory courts apply one of three standards of review to facts found by inferior courts and tribunals depending on the jurisdiction exercised by both. 58 The first is applicable to facts the objective determination of which was a matter upon which the inferior court or tribunal's jurisdiction depended …….. 59 The second standard is applicable where the facts being challenged form part of the determination of a state of satisfaction or an opinion upon which the exercise of power or jurisdiction of the inferior court or tribunal depended……. 60 The third standard is applicable if the challenged facts do not constitute part of the formation of such an opinion or satisfaction. Depending on the basis for judicial review such findings can only be challenged if there was no evidence to support them (Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 at p 355-356 per Mason CJ ("Bond"); Eshetu at [138] per Gummow J; Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; 199 CLR 135 at [59] per Gaudron J; "Enfield"). In Bond Mason CJ stated (at p 356): "Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place." 61 Similarly in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Glass JA explained that a finding of fact for which there was some evidence to support it revealed no error of law even though it was made by "ignor[ing] the probative force of the evidence which is all one way" or could be described as "perverse" or one which "no reasonable person could have made" (at pp 155 to 156). In L & B Linings Pty Ltd v WorkCover Authority of New South Wales [2012] NSWCA 15 at [34] Basten JA noted that one consequence of this approach was that "where an evaluative judgment is to be formed on the basis of conflicting indicators, it will be difficult if not impossible to establish a 'no evidence' ground of review".
The process of fact finding in connection with this ground of appeal in our view falls within the third standard as referred to in the extract from Bull v NSW Land and Housing Corporation. As such we can see no basis for stating that there was an error of law regarding the findings of fact made by the Tribunal Member. There is no complaint made by the owners that the Tribunal Member's findings were made in the absence of evidence.
Rather it is asserted that the Tribunal decision on what we would as describe as the existence of the Leibe v Molloy criteria was unreasonable such that no reasonable decision maker would make it in assessing actual liability in respect of each variation.
For us to find that the Tribunal Member's decision was so unreasonable that no reasonable decision maker would make it would require, as Lord Greene MR stated in Associated Picture Houses Limited v Wednesbury Corporation, 'something overwhelming'.
In Marrickville Metro Shopping Centre Pty Limited v Marrickville Council [2010] NSWCA 145, Tobias JA referred to the Wednesbury formulation in the following terms at [104] - [106]: 'Finally, as her Honour noted at [115], in Murrumbidgee Groundwater Preservation Association Inc v Minister for Natural Resources [2005] NSWCA 10; (2005) 138 LGERA 11 Spigelman CJ, with whom Beazley JA and myself agreed, stated at [129]: "Perhaps the most appropriate formulation [of Wednesbury unreasonableness] is whether the decision is 'illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds' ". This formulation was adopted by myself in Westfield Management Ltd v Perpetual Trustee Co Ltd [2006] NSWCA 245 at [71]. It was also adopted and applied by myself, with the agreement of Mason P and Hodgson JA, in Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 at [122]. In Notaras I cited (at [124]) [31] of the judgment of Biscoe J in Save Our Streets Inc v Settree [2006] NSWLEC 570; (2006) 149 LGERA 30 where his Honour drew a distinction between a decision which the court considers is unreasonable and a decision which the court considers is so unreasonable that no reasonable body could have come to it. The latter required "something overwhelming": Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 at [44]. In Wednesbury itself, Lord Greene MR at 229 referred to the relevant unreasonableness as "something so absurd that no sensible person could ever dream that it lay within the power of the authority". In Bromley London Borough Council v Greater London Council [1983] 1 AC 768 at 821, Lord Diplock defined Wednesbury unreasonable decisions as those which "looked at objectively, are so devoid of any plausible justification that no reasonable body of persons could have reached them". In Puhlhofer v Hillingdon London Borough Council [1986] UKHL 1; [1986] 1 AC 484 at 518, Lord Brightman said that the unreasonableness must be "verging on an absurdity".
In Aavelaid v J.A. Hayek t/as Laing & Simmons [2015] NSWCATAP 130 an Appeal Panel stated at [57] in connection with Wednesbury principles: 'Further, courts have repeatedly found that where there might be "mere preference for a different result, when the question is one on which reasonable minds may come to different conclusions, this is not a sufficient reason for overturning a judicial decision on review", see Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 48.'
We are unable to find that the Tribunal Member's decision was illogical, irrational or lacked a basis in findings of fact. We have already expressed the view that the Member's findings of fact are not asserted to have been made, and were not, made in the absence of evidence and are not susceptible to challenge on that basis.
We reject this ground of appeal.

Ground 5

This ground of appeal is that the Tribunal Member erred in law in finding on no evidence that the builder had proved the value of the variations claimed.
We confirm that it would be an error of law for a Tribunal Member to make a finding of fact in the absence of evidence. Refer John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13.7].
At paragraph [147] of the Reasons the Tribunal Member dealt with the owners' submission that the builder's quantum meruit claim must fail because there was no proper proof of the value of the variations.
The Tribunal Member at [148] referred to the costing of the variations by a witness, Mr S Vivers who was called on behalf of the builder and gave evidence on variations as well defective and incomplete work.
Mr Vivers evidence was exhibit R6 in the proceedings at first instance which is at tab 19 of Volume 2 of the owners appeal bundle of documents. After considering Mr Vivers evidence, including his cross examination, the Tribunal Member stated at [165] - [168] in allowing $83,334.21 for variations: 'I therefore accept the evidence of Mr Viviers as set out in R6 and I allow the $65,584 minus the $2,452 (for items 10 & 11 which were deleted by consent at the hearing) being $63,132. Mr Viviers has also added a 20% builder's margin and GST. I have considered the argument and authority put to the Tribunal as to these matters. In so doing and in considering the circumstances of this case I am satisfied that it is appropriate to allow the builder's margin and GST which is in keeping with what it would have cost the homeowners to have the work carries out by anther builder. I therefore allow $83,334.21 for the Variations in R6.'
The owners primary submission at [24] of its written submissions is: 'If there is a basis for the payment of the unapproved variations, then the ultimate element is determination of value. That is, a determination, based on proper proof, of the value of the extra work and that the extra work was costlier to the builder than contractual performance (see Trimis at [64]).'
We will deal with the submission that the extra work was costlier to the builder than contractual performance later in these reasons.
The owners also submit that there was no evidence of reasonable value of the extra work claimed because Mr Vivers only asserted value and does not expose his reasoning or the basis for the asserted value.
The expert report of Mr Vivers as referred to, addressed variations in a schedule which is at pages 608 - 612 of the owners appeal book. The Tribunal Member considered this evidence, noting at paragraph [164] that it was less than perfect, but observed that it had not been rebutted, discredited or contradicted by evidence tendered by the owners.
The owners' submissions suggest that this ground of appeal is not based on a lack of evidence, rather it is based on the quality of the builder's evidence.
Insofar as this Ground of Appeal is, as stated, that there was no evidence to support the Tribunal Member's finding, we reject that ground. The Tribunal Member's finding in favour of the builder in the sum of $83,334.21 for variations was not made in the absence of evidence as the Reasons for Decision at [165] - [168] establish.
The owners' submissions at [25a] are that the reasonable value of the variations have not been proved because Mr Vivers only asserted value and does not expose his reasoning or the basis for the asserted value.
In Riana Pty Ltd v The Owners - Strata Plan No 22336 [2007] NSWSC 1033 an issue before the court, on an appeal from the predecessor of the Civil and Administrative Tribunal, was whether an expert report tendered in the proceedings should be relied upon. The plaintiff was critical of the use of the report on the basis that it did not comply with the principles in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705.
The substance of the owners' submissions at [25a] that Mr Vivers did not expose his reasoning or the basis for the asserted value is substantially the same complaint as made in Riana Pty Ltd v The Owners - Strata Plan No 22336, namely that there was a failure by the expert to disclose his reasoning.
At [42] of the judgement Rothman J. stated: 'As a consequence of the above, together with the fact that Makita is clearly a rule of evidence, expert opinions which do not strictly comply with the rules in Makita are admissible before the Tribunal and the Tribunal is entitled to give them such weight as is appropriate. If, as is submitted by Riana, the Tribunal gives the evidence too much weight, that, of itself, is not an error of law. Nor, if there is no evidence to the contrary, is it an error of fact. Lack of logic is not synonymous with error of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 356 (per Mason CJ).'
In our view the same situation applies in these proceedings. The Tribunal Member was entitled to take into account Mr Vivers' report and to accept it, especially since as she stated it was not discredited or rebutted. Nor had the owners filed evidence to contradict it.
In these circumstances in our view no error of law is established by reason of the owners' submission at [25a] that the reasonable value of the variations has not been proved because Mr Vivers only asserted value and does not expose his reasoning or the basis for the asserted value.
In reliance on paragraph [64] of Trimis v Mina, the owners submit that there was no evidence that the extra work claimed by the builder must have been or was costlier than contractual performance.
While there is a reference in paragraph [64] of Trimis v Mina to the lack of a finding that the variations were 'costlier to the builder than contractual performance', it is our view that statement must be considered in context. We think that phrase is intended to refer to the position that where a contractual item of work is deleted and replaced by additional work. We accept that in such a case there must be a credit given for the deleted work and the variation work must be costlier than the deleted work in order for the builder to recover the excess over and above the cost of performing the deleted work. In any event , it is apparent from the comments made by the Member in the Reasons for Decision at [158] to [174] that she made an at least adequate scrutiny of Mr Vivers' evidence, which clearly enough would have included attention to the issue of additional cost to the builder.

Determination of the Appeal

For the reasons provided, we dismiss the appeal. In the event either party wishes to make an application for costs, the orders below deal with that.

Costs

So far as the costs of the appeal are concerned, any costs application must be lodged in the Appeal Division of the Tribunal and served on the costs builder within 21 days of the date of these orders either attaching or referring to any documents relied upon in support of the application.
The costs builder will have 21 days after the date it receives the application referred to in the preceding paragraph to lodge in the Appeal Division of the Tribunal and serve on the costs applicant its submissions in response to the cost applicant's costs application, such submissions either attaching or referring to any documents relied upon.
Subject to the right of the parties to make submissions under section 50(3) of the Civil and Administrative Tribunal Act (which should be made in conjunction with the submissions referred to above), the Appeal Panel will determine any costs application on the basis of the papers lodged in the Appeal Division of the Tribunal.

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: 19 April 2018

(2007) 161 LGERA 230

At a glance

Court

Decision date

Source

Judgment (10 paragraphs)

Parties

Cases Cited (35)

Cited By (1)