Woodward v D J & T L Mellross Pty Ltd

Practical Completion

1. The home owners' submissions challenged the Senior Member's finding, that the building works achieved practical completion on 24 May 2016 with the result that the builder was entitled to claim the progress claim due on practical completion.
2. The home owners submitted that the Senior Member had improperly relied upon extrinsic evidence and/or improperly implied a term providing that practical completion was deemed to have taken place upon the home owners entering into occupation of the premises.
3. In our view, the home owners' submissions involve an incorrect characterisation of the Senior Member's findings. The Senior Member's findings, set out in paragraphs [38] to [40] of the first decision, involved acceptance of the builder's submission that the home owners' action of occupying the residence was evidence that the home owners accepted that the building works had reached the stage of practical completion.
4. The contract made provision in relation to practical completion in clause 21. Clause 21.1 required the builder to give the owner notice of practical completion at least 5 working days prior to practical completion being reached. The Senior Member found no such notice of practical completion had been served. In those circumstances the express provisions of clause 21 do not indicate when practical completion is achieved. However, other provisions of the contract remain applicable.
5. Clause 1 of the contract defines practical completion as: "'Practical completion' means when the building works are complete except for minor omissions and defects that do not prevent the building works from being reasonably capable of being used for their usual purpose."
6. That definition does not require service of any notice. It is entirely contingent upon the works having reached the relevant state of completion.
7. "Date of practical completion" is defined as follows: "'Date of practical completion' means the date that is deemed to be the date of practical completion under clause 21 except where the date is determined by dispute resolution (including litigation) then it is that date."
8. In circumstances where a notice had not been served and a dispute had arisen as to whether the works had achieved practical completion, the date of practical completion was left to be determined by dispute resolution, in this case the proceedings in the Tribunal.
9. The question the Senior Member was required to determine was whether the works had achieved "practical completion" within the definition of that term in clause 1. As noted above, the Senior Member held that the home owners taking occupation was sufficient evidence that practical completion had been achieved and therefore determined that practical completion, as defined in clause 1, had been achieved on that date. We find no error of law in the Senior Member's reasoning.
10. In seeking leave to appeal against the Member's decision that practical completion had been achieved, the home owners assert: "The Tribunal Member placed excessive weight to the gate of the property being locked on 24 May 2016 and failed to consider that the builder had already refused to comply with dispute resolution clauses in the contract".
11. We do not find that the Member gave excessive weight to the fact that the home owners had placed a lock on the gates. That was one fact that was considered by the Senior Member and it is clear from the Senior Member's reasoning that he relied upon other evidence that the home owners had actually taken occupation of the residence. That evidence included a letter dated 10 June 2016 from solicitors acting for the home owners which confirmed that the home owners had taken occupation of the residence.
12. We are not persuaded that the home owners may have suffered a substantial miscarriage of justice because the decision in this respect was not fair and equitable or was against the weight of evidence.

Failure to remove spoil

1. The home owners' claim in respect of the removal of spoil did not rely upon any provision of the contract. Rather, the home owners relied upon evidence given by Mr Woodward of a discussion with the operator of a bobcat clearing the site in the week after the work commenced. Mr Woodward stated: "The bobcat operator told me that topsoil would be spread back around the house when the building has been finished and the sub-soil would be taken away or spread out if I wanted to keep it. We agreed that the placement of the soil was good, considering it was only temporary and it would prevent my sons from riding close to the house".
2. The builder relied upon clause 14 of the tender document, which was part of the contract, which stated: "Any excess soil from site excavation is to be removed by owners if required, unless otherwise mentioned in this tender. If soil can't be removed by owner, and is required to be removed by local authorities, Mellross Homes will remove and charge to final account."
3. The Senior Member found at [85] of the second decision: "I do not accept and am not persuaded that the person who was operating the bobcat as referred to by Mr Woodward had any authority to contract with him on behalf of the builder that excess soil would be spread or removed at the owner's discretion."
4. We see no flaw in the Senior Member's conclusion. There was no evidence that the bobcat driver was an agent of the builder authorised to vary the contract or to enter into contractual obligations on behalf of the builder.
5. On the appeal the home owners sought to raise an argument relying on an estoppel, arguing that they had relied upon the representation by the bobcat operator.
6. The home owners were not able to demonstrate that this argument was raised before the Senior Member. In those circumstances it would be inappropriate to permit the argument to be raised on appeal. Significant factual issues relating to the bobcat driver's authority to make the representation and the home owners' reliance upon the representation would have arisen. The home owners were not able to point to any evidence which was before the Senior Member of reliance by the home owners on any representation by the bobcat driver which would make it unconscionable for the builder not to fulfil any promise made by the bobcat driver.
7. In written submissions to the Appeal Panel in relation to the appeal the home owners also sought to raise an argument relying upon the alleged vicarious liability of the builder for the actions of the bobcat driver. Even acknowledging that the builder might be vicariously liable for breaches by its agents or employees of a duty of care owed to the home owners, the home owners did not identify any duty of care which the bobcat driver might have breached. Nor is it apparent that this argument was raised before the Senior Member.
8. We find no error of law in the Senior Member's rejection of the home owner's claim in respect of the removal of excavation spoil. We are also not persuaded that the home owners may have suffered a substantial miscarriage of justice by reason that the decision in this respect was not fair and equitable or was against the weight of evidence.

Water tanks

1. The home owners asserted that the contract required the builder to supply and install two 120,000 litre water tanks. The builder asserted that the contract only required the installation of one 120,000 litre water tank. The builder had installed one 110,000 litre water tank.
2. The Senior Member found that the contract required the installation of only one 120,000 litre water tank. The Senior Member declined to award compensation to the home owners in respect of the builder's installation of a 110,000 litre water tank rather than a 120,000 litre water tank as required by the contract. In doing so the Member referred to the High Court decisions in Bellgrove v Eldridge (1954) 90 CLR 613 and Tabcorp Holdings Pty Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272.
3. The home owners challenged both the Senior Member's construction of the contract and the failure to award compensation for the provision of a smaller water tank than contracted for.

(a) Number of water tanks

1. The correct construction of a contract is a question of law: Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 at 279 [82] fn 88.
2. The home owners' argument that the builder was obliged to install two 120,000 litre tanks was founded upon the following statement in the builder's tender, which was incorporated into the contract: "supply and install of two (1) 120,000 litre Pioneer water tanks (standard colour) including: [excavation, sand base, pump, power and 10,000 litres of water]".
3. On the following page (page 8) of the same document, under the heading "New items as from 1/4/2014", the document stated: "Now we will install 120,000 water tank".
4. The home owners asserted that the contract therefore specified two 120,000 litre water tanks. The builder asserted that, if the tender initially provided for two water tanks, it was clear that that was amended in a revision of the tender, as indicated by the statement on page 8 of the tender, and that, as from 1 April 2014, the builder's tender only provided for the installation of one water tank. The builder also relied upon the site plan included in the contract which showed only one 120,000 water tank.
5. The Member recorded that the contract provided a procedure to apply in the event either party becomes aware of an error, ambiguity or inconsistency between the contract documents. The Senior Member determined that there was an inconsistency and noted that there was no evidence that either party had given notices under the contract to resolve the inconsistency. The Senior Member noted that clause 8 of the contract also provided an order of precedence for the contract documents and concluded that, on the proper construction of the contract, the discrepancies between contract documents were to be resolved in accordance with the order of precedence contained in that clause. The Senior Member determined that the site plan took precedence over the tender and therefore resolved the ambiguity in favour of the builder's position, that is that the obligation was to install only one water tank.
6. The Senior Member concluded nevertheless that even if the tender should have taken precedence over the site plan, the tender itself provided for one water tank. The Senior Member found that: "The statement in the tender on page 8…was a later amendment to the tender which clarified the earlier provisions and provided an up to date indication of what the builder would provide so far as in the items in that section of the tender were concerned."
7. In their written submissions the home owners submit that the Senior Member incorrectly identified the order of precedence of the critical documents. The order of precedence set out in clause 8 provided that "specifications" took precedence over the "plans". The home owners submit that the tender document constituted the "specifications" and took precedence over the site plan.
8. We consider there may be some validity in the home owners' argument. As the home owners pointed out, the tender document was the only description in the contract of the specifications which the contract work was required to meet, including identifying the quality and dimensions of various elements of the building work.
9. However we do not consider that the Senior Member misconstrued the contract in determining that the contract only provided for the provision of one water tank. We agree with the Senior Member's conclusion that the statement on page 8 of the tender document, which clearly post-dates the earlier provision relating to "two (1) 120,000 litre" water tanks, makes it clear that, even if the tender originally provided for two water tanks, that was subsequently varied to require the builder to provide only one water tank.
10. The home owners' Notice of Appeal alleges "the Tribunal Member failed to consider contra proferentem". The contra proferentem rule or principle of contractual construction provides that, in case of ambiguity, a contractual provision should be construed against the "proferens" that is the party responsible for drafting the relevant provision. However, the rule is one of last resort: McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at 602 per Kirby J. The contra proferentem rule is not a principle that must be taken into account in circumstances where the construction of a contract can be determined without reference to it.
11. We do not consider that the contract is so ambiguous that resort to the principle is necessary or warranted. For the reasons set out above we do not consider that there is any ambiguity in the contract which should be resolved adversely to the builder who drafted the tender.
12. The home owners also relied in support of their preferred construction upon "their reliance on the installation of two water tanks" which they alleged they had given evidence of in their statutory declarations which were in evidence before the Senior Member. The home owners did not in the course of argument on the appeal seek to identify where in their statutory declarations they had identified the alleged reliance on having two water tanks. It is not immediately obvious.
13. The home owners relied upon that alleged reliance as a surrounding circumstance which would be admissible to assist in the interpretation of the contract. We do not accept that submission. Even if established, the home owners' "reliance" could amount to no more than a subjective intention or expectation that two water tanks would be supplied. Such subjective intention or expectation is not a matter that is admissible to support the home owners' preferred construction of the contract: Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, at 352-353 per Mason J.
14. Accordingly we consider that the Senior Member's construction of the contract was correct.

(b) Water tank capacity

1. It was common ground that, although the contract required provision of a 120,000 litre water tank, the builder had installed only a 110,000 litre water tank.
2. However the Senior Member declined to award compensation in respect of the provision of a water tank of lesser capacity than specified, on the basis that: "Exceptional circumstances provides a qualification to the rule in Bellgrove v Eldridge that the measure of damages for breach of contractual stipulation in a building contract is the cost of rectification provided that the rectification is a reasonable course to adopt."
3. The Senior Member held at [45]: "Where the amount claimed by the owners cannot be understood by reference to the work that they contend must be carried out because that is not described or explained, when they have been provided with a 110,000 litre water tank and when they have not provided any evidence of how they are disadvantaged by the loss of storage of 10,000 litres of water, I find that these matters constitute exceptional circumstances, namely being out of the ordinary course and uncommon in a complaint where what has been provided in breach of contract, is close to what was required and there is no explanation of how the damages claimed are made up or any disadvantage to the owners."
4. In Bellgrove v Eldridge a builder who had built a house which, in breach of contract, contained defective concrete and mortar, contended that the measure of damages was limited to diminution in value and did not extend to costs of rectification. The High Court held (at 617): "In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she has sustained by the failure of the appellant to perform his obligation to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract."
5. The Court noted (at 618) a qualification or proviso to the rule stated above that "not only must the work undertaken be necessary to produce conformity, but … also, it must be a reasonable course to adopt" and gave the following example of unreasonableness: "No one would doubt that where pursuant to a building contract calling for the erection of a house with cement rendered external walls of second-hand bricks, the builder has constructed the walls of new bricks of first quality the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks."
6. In Tabcorp Holdings v Bowen Investments (at 288 [17]) the High Court set out that example and stated: "That tends to indicate that the test of 'unreasonableness' is only to be satisfied by fairly exceptional circumstances."
7. In our view the Senior Member did not apply the correct approach to the application of the proviso in Bellgrove v Eldridge. The test for whether the cost of rectification is the appropriate measure of damages is not whether there are exceptional circumstances but, as stated in Bellgrove v Eldridge, whether rectification is a reasonable course to adopt. We do not understand the decision in Tabcorp v Bowen Investments to have altered that position.
8. The application of Bellgrove v Eldridge was discussed in the decision of the Full Court of the South Australian Supreme Court in Stone v Chappel (2017) 128 SASR 165, in particular the judgment of Kourakis CJ at [54] to [55]. At [55] Kourakis CJ listed eight considerations which the authorities suggest are relevant in determining whether the exception to the rule in Bellgrove v Eldridge applies. Those considerations were: [55] Rectification damages are awarded for a breach of a building contract unless there is good reason to adopt another measure because the award of rectification damages would be manifestly disproportionate to the attaining of the contractual benefit. That rule entrenches rectification costs as the primary measure of damages and emphasises the exceptional nature of any lesser award. In determining whether good reason exists, the authorities suggest that the following are relevant considerations: (1) the degree of departure from the contractual stipulation; (2) the adverse effect of the departure on the functional utility, amenity and aesthetic appearance of the building; (3) the reasons, objectively ascertained and commonly known, for which the innocent party made the stipulation which was breached; (4) the practical feasibility of rectifying the work, including the effects on third parties of attempting to do so; (5) whether or not the innocent party intends to carry out the rectification work; (6) the absolute cost of the rectification work and the disproportion between that cost and • the value of the building and contract price; • the diminution in commercial value of the building; • the effect of the departure on the functional utility, amenity and aesthetic appearance of the building; (7) the nature of the wrongdoer's fault for the defect; and (8) the public interest in reducing economic waste.
9. We do not disagree with the Senior Member's conclusion that the removal of the 110,000 litre water tank and its replacement with a 120,000 litre or larger water tank would not be a reasonable course to adopt. However we do not consider that that is the end of the matter.
10. The builder has failed to comply with the contractual stipulation and, contrary to the Senior Member's conclusion, we do not consider it was necessary for the home owners to supply evidence of "how they are disadvantaged by the loss of storage of 10,000 litres of water". Ten thousand litres is not an insignificant amount of water. The builder may conceivably have demonstrated that a 120,000 litre water tank was so large that, if located on the home owners' property, such a tank could never conceivably have been filled in ordinary use and that, therefore, the home owners were not disadvantaged by the provision of 110,000 litre water tank rather than a 120,000 litre water tank, but we do not consider that it was incumbent upon the home owners to establish the contrary.
11. The builder's explanation for the failure to provide a 120,000 litre tank was that 120,000 litres is not a standard size and it would have been necessary to supply a 130,000 litre tank or have a 120,000 litre tank specially manufactured. The builder's decision to supply instead a 110,000 litre tank may be understandable on that basis, but it does not mean that the builder was not in breach of contract or that the builder should not be liable to pay compensation for the breach.
12. In our view the home owners are presumptively entitled to compensation for the failure to provide the appropriate sized water tank.
13. The evidence before the Senior Member included a price list from the manufacturer of the water tank which disclosed that the difference in price between a 110,000 litre water tank and the next largest standard size water tank (of approximately 130,000 litres) was about $1,320. That amount is the lower limit of the compensation to which the home owners were entitled in respect of the provision of a water tank which did not comply with the contract.
14. In the course of the hearing the Appeal Panel raised with Mr Woodward the question whether the shortfall in capacity could be satisfied by the provision of an additional water tank of approximately 10,000 litres capacity. Mr Woodward pointed out that that would take up more land than the 120,000 litre water tank, but acknowledged that he had argued both at first instance and on appeal that he was entitled to two 120,000 litre water tanks so he could not suggest that the loss of an area of 17 square metres (which is, according to the price list, the size of the pad necessary to support a 12,000 litre water tank) would cause undue disadvantage. Mr Woodward did not suggest that he would oppose an order that required the builder to supply a 12,000 litre water tank (which is the closest standard size tank produced by the manufacturer, according to the price list in evidence).
15. We find that the Senior Member erred in failing to provide a remedy in respect of the provision of an under-size water tank and propose to order that, unless the home owners elect otherwise within 28 days of the date of this decision, the builder within 120 days of the date of this decision supply and install to the home owners' property a minimum 10,000 litre Pioneer water tank in standard Colorbond colour to match the existing tank, on a position adjacent to the existing tank as directed by the home owners, including the excavation of the site, supply of sand base, supply of stone wash around the outside of the tank and supply of all appropriate plumbing to enable the tank to operate concurrently with the existing tank.
16. If the home owners elect not to have the additional tank installed, the order will be that the builder must the pay the home owners the sum of $1,320 as compensation for the provision of a smaller water tank than contracted for.

Air conditioner

1. The contract provided for the provision of a ducted heating and cooling system specified as "Mitsubishi 18kw refrigerated unit, suited to size of home". The home owners complained that the builder had installed an LG air conditioner and claimed the cost of replacing that air conditioner with a 20 kw Mitsubishi model.
2. The evidence before the Senior Member was that Mitsubishi does not manufacture an 18kw reverse cycle air conditioning unit and that the builder supplied and installed a 20kw LG reverse cycle ducted air conditioning unit. The Senior Member found that the builder did not seek a variation under the contract and accordingly did not comply with the contract in providing a unit that did not meet with the specification in the contract. The Senior Member again referred to Bellgrove v Eldridge and stated: "The first issue of whether the action proposed by the owners is necessary to ensure compliance with the contract must be answered in the negative since the air conditioning unit proposed exceeds the capacity of the air conditioning unit stated in the contract".
3. It is not clear whether the Senior Member intended to find that the builder had in fact complied with the contractual specification by supplying a larger capacity air conditioner or whether he was determining that the home owners had not suffered loss because the air conditioning unit that had been provided was larger than the specified capacity. The Senior Member also concluded that the replacement of the air conditioning unit was not a reasonable course to adopt.
4. Whether or not the home owners were strictly entitled to a Mitsubishi unit rather than an LG unit of larger capacity than that specified, we agree with the Senior Member that the home owners have not established any entitlement to compensation in respect of the air conditioning unit.
5. Although the home owners contended that the LG system was inferior to a Mitsubishi unit, they adduced no evidence to establish that proposition. Presumptively, a larger capacity air conditioning unit is not inferior to a smaller capacity air conditioning unit.
6. In the absence of evidence that the LG unit was inferior to a Mitsubishi unit or that there was another reason to prefer a Mitsubishi unit to an LG unit, we agree with the Senior Member that the replacement of a functioning air conditioning unit with a different brand would not be a reasonable course to adopt. The home owners did not establish that the air conditioning unit supplied was any less expensive than a Mitsubishi unit or that they have sustained any other loss by reason of the provision of an LG air conditioning unit. Accordingly we find no error in the Senior Member's conclusions in relation to the air conditioning unit and we are not persuaded that the home owners may have suffered a substantial miscarriage of justice by reason that the Senior Member's decision in this respect was not just and equitable or was against the weight of the evidence.

Concrete

1. The Senior Member referred to an expert report provided by Mr Bowland, a civil and structural engineer, which identified that the external verandah slabs around the home owners' house were "seen to have transverse cracks at approximately two metre intervals". Mr Bowland stated that in his opinion the cracking of the verandah concrete was an appearance defect but considered "not to have structural deterioration consequences".
2. The Senior Member concluded, at [65]: "Mr Bowland has stated that the existence of the cracking poses an aesthetic concern. There was no term or condition of the contract that required the builder to construct the works to avoid aesthetic concerns. Mr Bowland's evidence does not provide a reasoned basis for asserting or otherwise persuade me that any one of the provisions of clauses 39 or 40 of the contract have been breached".
3. Clause 39 of the contract restates the statutory warranties set out in Section 18B of the Home Building Act 1989. Clause 40 requires that the works will comply with the Building Code of Australia and all other relevant codes, standards and specifications and the conditions of any relevant development consent.
4. In the Notice of Appeal the home owners assert that "the Tribunal Member failed to consider the home owners' reliance on promises by the builder". In their submissions the home owners assert that the builder had promised prior to entering into the contract that it would install "dummy joints" in the verandah. In paragraph 10 of Mr Woodward's statutory declaration he states that during an inspection of display homes with the principal of the builder he pointed to cracks in the concrete on the patio areas of the display homes and stated that "they could have been avoided had there been dummy or control joints used". Mr Woodward states: "I expressly stated that I would not accept concrete in my patio areas that cracked so soon and that do not have control or dummy joints and I expected the patio areas to be of a higher standard because our front patios were large".
5. Mr Woodward's evidence in this respect was corroborated by Belinda Woodward's evidence.
6. It was not in issue that the builder had not installed control joints in the concrete around the verandah. As the Senior Member noted, the home owners' expert did not suggest there was any structural defect in the concrete or any failure to carry out the work with due care and skill. However the Senior Member does not appear to have given consideration to whether there had been a breach of section18B(1)(f) of the Home Building Act, which is repeated in clause 39.1(f) of the contract and provides: (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment.
7. We consider that Mr Woodward's evidence was sufficient at least to raise the question whether clause 39.1(f) of the contract and section 18B(1)(f) of the Home Building Act were breached by the failure of the builder to provide concrete around the verandah which did not incur the surface cracking to which Mr Woodward asserts he had taken exception during his inspection of the display homes.
8. However it emerged during the course of the hearing of the Appeal that, as control joints had to be installed at the time concrete was poured, it is now too late to install control joints. Mr Woodward asserted that the only appropriate method of rectification was the pouring of a topping layer over the verandah concrete. However there was no satisfactory evidence before the Senior Member of the likely cost of such rectification. The only evidence was Mr Woodward's oral evidence that he had spoken to a concreter and had been told that the installation of a topping layer would cost about $10,000. This was not evidence upon which the Tribunal could properly have acted.
9. Accordingly, although on the evidence before us we cannot resolve the issue of whether the failure to install control joints in the concrete had been a breach of section 18B(1)(f) of the Home Building Act and clause 39.1(f) of the contract, we conclude that there was no error in the Senior Member's failure to award compensation in respect of the concrete, as there was no acceptable evidence before the Senior Member of the cost of rectification and therefore there was no proper basis upon which the Senior Member could have undertaken an assessment of the compensation to be awarded.
10. Accordingly we do not find that the home owners were entitled to compensation in respect of the cracking in the concrete around the verandah, although we reach that conclusion through a slightly different route to the Senior Member. We are not persuaded that the Senior Member's conclusion was not fair and equitable or was against the weight of evidence.

Loss of enjoyment

1. The home owners asserted that by reason of the incorrect siting of the house there had been a large reduction in the amount of usable space surrounding the house. The Senior Member dealt with the home owners' claim at [91] as follows: I am not persuaded that the owners have suffered a loss of enjoyment as claimed by them. Their evidence asserts a loss of enjoyment of their land and refers to a large reduction in the amount of usable space between the new residence and a pre-existing shed which causes that result. The owners did not establish that this state of affairs exists.
2. The Senior Member also noted that no case had been made out pursuant to section 16 of the Civil Liability Act 2002 (NSW) that the home owners had suffered personal injury arising out of any stress arising by reason of the alleged loss of land surrounding the house.
3. In their submissions the home owners assert: 171 Member Goldstein erred by finding the owners did not suffer a loss of use and enjoyment of land surrounding the house. 172 Member Goldstein in awarding damages for the defective drainage work accepted that the land immediately surrounding the house required excavating and a retaining wall erected. 173 The excavation of the land amounts to the land immediately surrounding the house to the retaining wall to be lower than the land past the retaining wall, creating a two-tiered or split-level parcel of land, where the house had been built at a proper height, not creating defective draining work, the land surrounding the house would have remained the one flowing level. 174 The loss is clearly demonstrated and the only correct decision available to Member Goldstein was that the owner suffered a loss of the use and enjoyment of the land surrounding the house.
4. The home owners also submitted that the split-level, which they asserted was a consequence of the construction of the retaining wall referred to in paragraph 172 of their submissions, had reduced the value of the house.
5. There was no evidence before the Senior Member of any diminution in value of the property. There was no specific evidence before the Senior Member of the precise consequences which, the home owners now assert in their submissions, were the result of the drainage work. The home owners did not point in the course of the Appeal hearing to any evidence that was before the Senior Member which established in any specific or detailed way the extent or consequences of the drainage work or retaining wall.
6. The home owners sought at the hearing of the Appeal to rely upon further evidence that was not before the Senior Member. That evidence included: "the original house plan drafted by the builder that illustrates changes required by the owners"; "photographs that demonstrate the house was not built in accordance with site plan A-02"; and a further statutory declaration from Mr Woodward dated 21 November 2017 in which he gave evidence concerning the siting of the house and its distance from an existing shed, the water tank and the rear fence of the property.
7. As this evidence could not be said to be evidence that was not reasonably available at the time of the hearing, the Appeal Panel declined to receive that evidence.
8. We are not persuaded that there was any error of law in the dismissal of the home owners' claim for compensation in respect of the loss of usable space. We agree with the Senior Member that there was no appropriate evidence to establish the existence or value of any such claim.
9. We are not persuaded that the home owners may have suffered a substantial miscarriage of justice by reason that the decision of the Senior Member in this respect was not fair and equitable or was against the weight of evidence.

Conclusion and Costs

1. The home owners' application for leave to appeal is refused. We have allowed the appeal in part. Neither party was legally represented at the appeal hearing and neither party made an application for costs. As this is an appeal from the Consumer and Commercial Division of the Tribunal and the amount in issue both at first instance and on appeal was greater than $30,000, by virtue of rules 38 and 38A of the Civil and Administrative Tribunal Rules, we would not need to find special circumstances before making an award of costs.
2. As the appeal has succeeded in one respect but was otherwise dismissed we would be minded not to award costs in relation to the appeal to either party. However we will give either party an opportunity to make an application for costs of the appeal and provide an opportunity, if such an application is made, for the other side to respond.
3. If neither party makes such an application there will be no order as to costs.

Orders

1. The orders of the Appeal Panel are as follows: 1. By consent Belinda Woodward is joined as an appellant. 2. Leave to appeal refused. 3. Appeal from the decision in HB 16/42636 dismissed. 4. Appeal from the decision in HB 17/52751 allowed in part. 5. The orders made on 19 September 2017 in proceedings HB 16/52751 are varied by the addition of Orders 10 and 11: 6. (10) Unless Nigel and Belinda Woodward elect otherwise within 28 days of the date of this decision, DJ & TL Mellross Pty Ltd shall within 120 days of the date of this decision supply and install to the Woodwards' property a minimum 10,000 litre Pioneer water tank in standard Colorbond colour to match the existing tank, on a position adjacent to the existing tank as directed by the Woodwards, including the excavation of the site, supply of sand base, supply of stone wash around the outside of the tank and supply of all appropriate plumbing to enable the tank to operate concurrently with the existing tank. 7. (11) Should Nigel and Belinda Woodward elect not to have DJ & TL Mellross Pty Ltd install a further water tank, DJ & TL Mellross Pty Ltd shall pay Nigel and Belinda Woodward the sum of $1,320 within 28 days of being notified of the Woodwards' election. 8. Either party may file written submissions within 14 days seeking an order in relation to the costs of the appeal. 9. If either party files submissions in accordance with order (6), the other party may file submissions in response within a further 14 days. 10. Any submissions filed in accordance with orders (6) and (7) should address whether the question of costs may be determined on the papers and without a hearing pursuant to s50(2) of the Civil and Administrative Tribunal Act. 11. If no submissions are filed in accordance with orders (6) and (7), there will be no order in relation to the costs of the appeal.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar

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: 25 July 2018