Xu v Ling

Scope and nature of internal appeals

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

Submissions and evidence

1. In deciding the appeal, we have had regard to (1) the Notice of Appeal, dated 6 June 2022, (2) the Reply to Appeal, dated 20 June 2022, (3) the Appellant's submissions, dated 25 July 2022, (4) the Respondent's submissions, dated 28 July 2022, and (5) the Appellant's submissions in reply, dated 4 August 2022.

Notice of Appeal

1. The Notice of Appeal was lodged on 6 June 2022, within of the 28-day period required by cl 25 of the Civil and Administrative Tribunal Rules 2014 (the Rules).

Grounds of Appeal

1. The Notice of Appeal listed the grounds of appeal as set out below, which it is convenient to refer to as issues 1 to 4: (1) Applying a Jones v Dunkel inference on matters in which the Applicant's expert did not address to in its expert report; (2) Making its decision based on hearsay evidence; (3) Making its decision based on a statement by the Respondent's witness which is not in affidavit form, the author of which was not verified and that the evidence was not tested at hearing; (4) Making a decision based on contradicting evidence

Matters requiring leave

1. It was contended that the decision as not fair and equitable in three respects, which will be referred to as issues 5, 6 and 7: (5) The Senior Member erred by applying the Jones v Dunkel inference when reaching its decision on matters which the Applicant's expert evidence did not directly respond to the Respondent's expert evidence (e.g. Paragraph 46) (6) The Senior Member failed to note that there were multiple occasions in which the Applicant's evidence supported a claim of higher value in favour of the Respondent than his own expert witness (e.g. Paragraph 47, 7, 98) (7) The Senior Member also erred by making a decision based on facts not proven on the balance of probabilities (e.g. Paragraph 66, 68, 71)
2. Further, the basis upon which it was suggested the decision of the Tribunal was against the weight of the evidence was expressed as follows, which will be referred to as issue 8: The Senior Member erred by making a decision based on a statement allegedly provided by a third party witness of the Respondent which 1. Was in the form of a statement but not an affidavit; 2. The identity of the author of the statement was not verified; 3. The alleged witness's evidence was not tested under cross-examination; 4. It is unknown whether the statement was a contemporaneous document. (Paragraph 55-57)

Appellant's submission.

1. The initial submissions began by indicating the finding as to liability, i.e. that the appellant breached provisions in the Home Building Act 1989 (the HBA), was not contested: only some of the findings as to quantum were challenged.
2. It was contended there was a failure to draw a Jones v Dunkel inference in relation to the failure to call the appellant's former worker, Lijun He, and that it was an error to accept his evidence (at [6]) as confirming the opinion of the respondent's expert (Mr Xue).
3. Secondly, it was suggested it was an error to award quantum in relation to three aspects of the work, namely: 1. a joinery cover for the ventilator in the kitchen, 2. the installation of plasterboard ceiling, and 3. incomplete window trim, without first making "a finding of fact of whether the work breached the Act".
4. Thirdly, it was said it was an error of law to accept Mr He's evidence as it was not in the form of a statutory declaration or affidavit and that the appellant was denied procedural fairness as his evidence was not tested by cross-examination.
5. Fourthly, it was said that there was an error of law in that hearsay evidence was accepted. This related to the question of whether the carpet was replaced by the appellant.
6. In conclusion, it was suggested the amount awarded should be reduced to $34,843.28.
7. Submissions in reply contended that there "is no evidence on record" that Mr He was not required for cross-examination. Objection was taken to the affidavit of Mr He dated 27 July 2022 that was submitted by the respondent in this appeal. It was contended that Mr He's statement, even if accepted as evidence, is not an expert opinion and that no weight should be placed on it.
8. It was also submitted that any failure of Mr Hall to respond to the evidence of Mr Xue did not mean his evidence should be accepted. Further, that it was inappropriate to make a finding of fact based on hearsay evidence in circumstances where the respondent bore the onus of proof and did not prove her case on her own evidence.
9. After noting that costs would follow the event in relation to the appeal, any request by the respondent for an order for costs in respect of the first instance proceedings was opposed.
10. When provided with an opportunity to make oral submissions at the hearing of the appeal, reliance was placed on the written submissions. The only additional matter was an indication that the claim in relation to the carpet, in the appellant's written submissions at [12], was not pressed. That was what has been referred to as Issue 2. After the respondent's oral submissions, the appellant's solicitor did not wish to make any additional submission.

Respondent's submissions

1. The submissions of the respondent expressed the view that Mr He was not required for cross-examination and that a Jones v Dunkel inference was only warranted where a party was required to explain of contradict a matter in issue. After referring to Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18 at [51], it was suggested that the appellant had not specified what it was that Mr He's attendance was required to explain or contradict.
2. On the second point, it was submitted that there was a finding on liability by reason of the finding that the appellant was carrying out work beyond the scope his painter and decorating licence and was thus in breach of s 12 of the HBA and was thereby in breach of s 18B(1)(c). Further, that the appellant's expert (Mr Hall) had not provided evidence on the three aspects of the work upon which the appellant's complaint was based, despite being instructed to reply to Mr Xue's report. It was noted that Precision Plastics Pty Ltd v Demir [1975] HCA 27 (Precision) provided support for the proposition that evidence which is not inherently incredible, and which is not challenged, ought to be accepted.
3. As to Mr He's statement, the response was that it was in a permitted form, was signed and witnessed, and was not challenged.
4. Finally, as to the acceptance of hearsay evidence, it was noted that the Tribunal was not bound by the rules of evidence (s 38(2) of the NCAT Act) and that the appellant had failed to lead evidence to the contrary of what was found in relation to the carpet.
5. Oral submissions for the respondent covered a limited number of points. First, that the mobile telephone number of Mr He was in his statement. However, that statement is not before the Tribunal. Secondly, that it was not in the reasons that the was a request to cross-examine Mr He. Thirdly, in response to the appellant's submissions in reply, Mr He's statement was not expert evidence but was lay evidence that did not more than recall the directions he received. Thirdly, it was noted that the Notice of Appeal suggested that liability was in issue but the submissions in reply, at [4], indicated that the appellant was only challenging quantum in this appeal.

Consideration

1. The subject matter of this dispute was residential building work carried out by the Appellant in respect of which the Respondent alleged incomplete work and defective work on his property at Dural.
2. At the outset of the hearing, the respondent's solicitor sought leave to rely on the affidavit of Lijun He. Although acceptance of that affidavit would serve to put before the Tribunal a copy of the statement which was a matter raised in the appeal, the appellant's solicitor opposed the admission of that evidence and indicated that, if it was admitted, he would wish to cross-examine Mr He.
3. Admitting that affidavit would permit the respondent to rely on additional evidence and would involve re-running an aspect of the first instance hearing. As there was no adequate basis for that affidavit to be added to the material considered in the appeal, the respondent was not permitted to rely on that affidavit.

Issue 1

1. The first ground of appeal was said to be: "Applying a Jones v Dunkel inference on matters in which the Applicant's expert did not address to in its expert report".
2. In Jones v Dunkel [1959] HCA 8 the wife of a deceased driver sought damages, claiming that her husband's death was caused by the driver of the other vehicle involved in the collision who made a statement to the Police but was not called to give evidence.
3. The High Court held that the unexplained failure to call a witness who could reasonably be expected to shed light on the facts in issue enables an inference to be drawn that the evidence of that uncalled witness would not have assisted that party.
4. Three points need to be noted. First, there must be an unexplained failure to call a witness. Secondly, that it may reasonably be expected that the uncalled witness could be expected to shed light on the issues. Thirdly, that the inference is only that the party's failure to call that witness would not have assisted the case of that party.
5. The inference is not that the evidence of the uncalled witness would have been adverse to the party failing to call the witness, and is not that such evidence would have assisted the case of the other party: Dilosa v Latec Finance Pty Ltd (1966) 84 WN (Pt 1) (NSW) 557 at 582, [1966] NSWR 259. The nature of the inference was recently restated in Jagatramka v Wollongong Coal Limited [2021] NSWCA 61 at [49] where, in a joint judgement, Bathurst CJ, Bell P and White JA noted that: "The failure cannot fill gaps in the evidence, as distinct from enabling an available inference to be drawn more comfortably."
6. There is nothing in the reasons now challenged that refers to Jones v Dunkel. That is a decision which can apply when there is no evidence from a witness whose may be reasonably expected to be called and whose absence was not reasonably explained. Any failure of the builder's expert to deal with a matter in response to evidence from the owner's expert does not create a situation where Jones v Dunkel applies. Accordingly, this ground is rejected.

Issue 2

1. The second ground of appeal was: "Making its decision based on hearsay evidence". Although this ground was withdrawn at the outset of the hearing, for the sake of completeness it is dealt with in these reasons.
2. It is sufficient to observe that s 38(2) of the NCAT Act provides that "The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice." As a result, the Tribunal can rely on hearsay evidence (as can a court by reason of ss 59 -75 of the Evidence Act 1995), at least where the rules of natural justice would not impede the acceptance of such evidence.
3. In the reasons now challenged, under the heading "Internal Carpet", the Tribunal took into consideration, at [91], that the owner told her expert that the work of replacing the carpet was not completed, being a matter not mentioned in the owner's affidavit. However, the Tribunal is entitled to do that.
4. Secondly, that cannot be said to be procedurally unfair as it was open to the builder to challenge that evidence in cross-examination of the owner and/or her expert witness. Thirdly, this issue is of no moment since, at [92], it was recorded that: [The builder's expert] also states that he was told by the owner that the work was not completed by the builder.

Issue 3

1. "Making its decision based on a statement by the Respondent's witness which is not in affidavit form, the author of which was not verified and that the evidence was not tested at hearing" was the third ground of appeal.
2. There are three forms in which the Tribunal receives evidence in chief. First, an affidavit, which is sworn or affirmed specifically for the proceedings. Secondly, a statutory declaration, which is a written statement which a person swears, affirms, or declares to be true in the presence of an authorised witness - usually a Justice of the Peace (JP) or a lawyer. Thirdly, a witness statement which is no more than a signed document which sets out the evidence the person wishes to give to the hearing. It is not necessary for a witness statement to be verified.
3. The appellant did not place the statement the subject of this issue before the Tribunal and opposed an attempt by the respondent to do so. However, it is not necessary to have a copy of any such statement to be able to say that the respondent relying on a witness statement, even if that witness statement was not verified, is not out of the ordinary and there is no error of law in reliance being placed on such a statement.
4. The fact that the evidence was not tested at the hearing appears to be due to the appellant not requesting the author of that statement to be available for cross-examination. There is nothing in the documents provided for this appeal which suggests there was a request for cross-examination of Mr He which, if refused, could provide the basis for an appeal. This issue does not raise any error of law. Accordingly, this ground of appeal fails.

Issue 4

1. The last ground of appeal was expressed as: "Making a decision based on contradicting evidence". As it is part and parcel of the work of the Tribunal to make decisions when there is contradicting evidence, this ground must be taken to mean that a decision was made despite there being evidence to the contrary. However, as no details of any such instance was raised, this ground has not been made out.

Issue 5

1. The first reason given as to why the decision was not fair and equitable was: The Senior Member erred by applying the Jones v Dunkel inference when reaching its decision on matters which the Applicant's expert evidence did not directly respond to the Respondent's expert evidence (e.g. Paragraph 46).
2. As indicated above, Jones v Dunkel does not have any application to a contest between the evidence of the experts. In a situation where one party's expert gives evidence on a matter and the other party's expert does not directly respond, the position is as stated in the respondent's submissions, by reference to the decision in Precision: the Tribunal was entitled to accept uncontradicted evidence provided it was not inherently incredible. Of course, as a necessary consequence of the obligation on courts and tribunals to provide adequate reasons for decisions, such reasons must contain a rational basis for rejecting evidence that is neither challenged nor contradicted.

Issue 6

1. The second reason given for why the decision was not fair and equitable was: The Senior Member failed to note that there were multiple occasions in which the Applicant's evidence supported a claim of higher value in favour of the Respondent than his own expert witness (e.g. Paragraph 47, 97, 98).
2. At [47], in relation to the installation of the gas stove and associated work, the respondent's expert contended for an amount of $880 while the appellant's expert suggested a higher amount which was accepted, as the details provided for that amount were more comprehensive. That outcome is the result of orthodox reasoning that the more details reasons for the higher amount resulted in more persuasive evidence. In other words, the weight of the evidence favoured the higher amount.
3. When the Tribunal considered the installation of laundry cabinets, at [97] - [98], it found that the lower amount, as suggested by the respondent's expert, should be accepted. It is difficult to see how that finding was against the weight of the evidence when the reason given for adopting the lower amount was that the appellant's expert including relining the laundry walls, which was determined not to be part of the work covered by the contract.

Issue 7

1. The final basis upon which it was contended that the decision was not fair and equitable was said to be that "The Senior Member also erred by making a decision based on facts not proven on the balance of probabilities (e.g. Paragraph 66, 68, 71)".
2. When considering the plasterboard ceiling, the first instance decision was based on (1) the opinion of the respondent's expert, (2) that was based on a supporting photo, and (3) the absence of any evidence to the contrary from the appellant's expert. The decision that this ceiling was not level was inferred from there being visible angulation which is a reasonable inference. Those matters were sufficient to justify a finding on the balance of probabilities, ie more likely than not.
3. The situation in relation to the window trim was similar. From what appears at [69] - [71] of the reasons it is clear the outcome was based on the same three matters as listed in the preceding paragraph. Again, the decision cannot be said to be based on facts not proven on the balance of probabilities.

Issue 8

1. Finally, it was the appellant's claim that the decision was against the weight of the evidence on the following basis that there was an error by making a decision that was based on Mr He's statement which was (1) a statement rather than an affidavit, (2) unverified as to its author, (3) not tested by cross-examination, and (4) not known to be contemporaneous.
2. Reference was made to the decision at [55] - [57] which are some of the paragraphs which considered painting, an issue that spanned [53] - [57]. It is clear, from what appears at [53] and [54], that the evidence of the respondent's expert was considered to have provided a sufficient basis for the finding as to liability. At [55] - [56] reference which made to the evidence of Mr He which was said to provide support for the opinion of the respondent's expert. As a result, even if the evidence of Mr He were to be disregarded, the finding as to liability would remain. What appears in [57] goes only to quantum and does not refer to the evidence of Mr He.
3. Of the first three matters listed in [60] above, the first three have been dealt with earlier. It remains to consider the suggestion that the statement was not known to be contemporaneous. The Tribunal is unable to determine this aspect as the statement does not form part of the documents. It is difficult to understand what is intended by the suggestion that it was not contemporaneous.
4. Regardless of whether the appellant's complaint was that the statement was not contemporaneous to the events or was not contemporaneous to the hearing, that does not render the decision against the weight of the evidence. If that was an issue the appellant wished to raise, then it should have been raised, at least, in the closing submissions at first instance and, ideally, by cross-examining Mr He.
5. This issue does not raise any cause for concern in relation to either the decision made or the reasons that were delivered following the hearing.

Conclusion

1. As none of the eight issues raised by the appellant have provided any basis for interfering with the decision at first instance, no error of law has been demonstrated and no basis for leave to appeal has been established.

Costs

1. The costs of the proceedings at first instance were addressed in the orders made on 9 May 2022. Such costs were not made an issue in this appeal and there is no basis for belatedly revisiting that topic. However, it is noted that the amount claimed or in dispute exceeded $30,000 with the result that it was not necessary to show special circumstances warranting an order for costs since, s 35 of the NCAT Act operated to render costs governed by r 38 rather than s 60.
2. As to the costs of this appeal, the appellant's submissions appear to concede that costs should follow the event (ie the outcome) of this appeal. In the Rules, r 38A provides: (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of- (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
3. Since the requirements of r 38A(1) are met, r 38A(2) is applicable to the costs of this appeal. As a result, it appears that the costs of this appeal follow the event (ie outcome) unless there is disentitling conduct on the part of the respondent as the successful party.
4. The practical course is to make an order in favour of the respondent as to the costs of this appeal but include provision for the appellant to contend for a different order if he so desires.

Orders

1. Accordingly, the following orders are made: 1. Leave to appeal is refused. 2. The appeal is dismissed. 3. Subject to order 4, the appellant is to pay the respondent's costs of the appeal, on the ordinary basis, as agreed or assessed. 4. If either party seeks a different costs order, the following orders apply: 1. Order 3 above ceases to have effect. 2. Any application for a different costs order is to be filed and served, supported by evidence and submissions not exceeding five pages in length, within 14 days of the date of these orders. 3. Any response to an application for a different costs order is to be filed and serve, with evidence and submissions not exceeding five pages in length, within 14 days thereafter. 4. Any material in reply is to be filed and served within 7 days thereafter.

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: 12 August 2022