Civil and Administrative Tribunal New South Wales Medium Neutral Citation: X-Build Construction Services Pty Ltd v O'Rourke [2020] NSWCATAP 181 Hearing dates: 21 July 2020 Date of orders: 1 September 2020 Decision date: 01 September 2020 Jurisdiction: Appeal Panel Before: G Curtin SC, Senior Member J McAteer, Senior Member Decision: (1) Appeal upheld part. (2) Vary Order 1 of the Tribunal so that it reads: (3) "Order that the builder is, by three calendar months from the date of these orders, to attend at the property and, at his own expense, to rectify with due care and skill and in a proper and tradesman like manner using materials fit for purpose, Item 24 in relation to the staining along the veneer join in the joinery to the kitchen and identified in photograph 41 of the report of Mr O'Mara dated 21 December 2018, and Item 25, of the alleged defective building works in accordance with the scope of works of Mr O'Mara set out in the Second Scott Schedule which is Exhibit J2." (4) Liberty is granted to any party to restore to the Tribunal below (as originally constituted, or, if that is not possible, differently constituted) on seven days notice, such notice to include notice of the orders the re-listing party proposes to seek. (5) If any party desires to make an application for costs: (a) that party is to so inform the other party within 14 days of the date of these reasons; (b) the applicant for costs is to lodge with the Appeal Panel and serve on the respondent to the costs application any written submissions of no more than five pages on or before 14 days from the date of these reasons; (c) the respondent to any costs application is to lodge with the Appeal Panel and serve on the applicant for costs any written submissions of no more than five pages on or before 28 days from the date of these reasons; (d) any reply submissions limited to three pages are to be lodged with the Appeal Panel and served on the other party within 35 days of the date of these reasons; (e) the parties are to indicate in their submissions whether they consent to an order dispensing with a hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted. Catchwords: APPEALS – constructive failure to exercise jurisdiction – absence of a necessary finding of fact – Appeal Panel in as good a position as the Tribunal to make that finding of fact – consequential variation of the Tribunal's orders EVIDENCE — interpretation of photographs — whether photographs may be used as substantive evidence or merely demonstrative evidence – restraint on use of photographs Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), Schedule 4 cl 12(1)(c) Cases Cited: Beaton v McDivitt (1985) 13 NSWLR 134 Blacktown City Council v Hocking [2008] NSWCA 144 Goode v Angland [2017] NSWCA 311; (2017) 96 NSWLR 503 Tran v Nominal Defendant [2011] NSWCCA 220 Texts Cited: Nil Category: Principal judgment Parties: X-Build Construction Services Pty Ltd (Appellant) Aaron O'Rourke (First Respondent) Sally O'Rourke (Second Respondent) Representation: Counsel: C Lambert (Appellant) Solicitors: Michael Green Legal (Appellant) Nexus Law Group (Respondents) File Number(s): AP 20/20383 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 22 April 2020 Before: G Blake AM SC, Senior Member File Number(s): HB 18/41504 and HB 18/49409 REASONS FOR DECISION 1. The appellant is a builder and the respondent are homeowners. 2. On 14 February 2016, the parties entered into a contract (the "Contract") for the appellant to undertake various alterations and additions to a residential building in Bronte, New South Wales for the respondents. 3. On or about 1 March 2016, the appellant commenced the building works. 4. On 30 October 2016, the appellant issued a notice of practical completion. 5. Approximately two years later, on 25 September 2018, the respondents commenced proceedings no. HB 18/41504 against the appellant claiming breaches of statutory warranties, work orders to the approximate value of $25,000 and a money order for $20,000 for alleged overcharging under the Contract. 6. On 16 November 2018, the appellant commenced proceedings no. HB 18/49409 against the respondents claiming a money order of $28,114.14 allegedly owing under the Contract. 7. The two proceedings were heard together over three days and the Tribunal delivered detailed and considered reasons being 34 pages and 92 paragraphs long. 8. This appeal concerns a single alleged defective item and the Tribunal's orders in relation to that item. The item was numbered Item 24 in the parties' Joint Scott Schedule ("JSS"). The JSS utilised at the hearing contained a column which briefly described each particular item, a column for comments by the respondents, a column for the respondents' estimate of loss, a column for the appellant's comments, a column for the appellant's estimate of loss, a column for "Expert Conclave Comments" and a column for the Tribunal Member's comments. 9. Item 24 was described as "Kitchen / sunroom / family room joinery defects". 10. The sunroom and family room joinery defects are not relevant to this appeal. 11. There were a number of different types of defects the subject of Item 24. One was that it was alleged the the timber veneer was book-matched rather than slip-matched horizontal grain, another was that the dishwasher was not properly aligned with the joinery, a third was poor jointing and the fourth, which is the sole type of defect relevant to this appeal, was "staining". In the JSS column for comments by the respondents it was described as follows: "Carefully remove and salvage the joinery component in the kitchen …where defective including …where joinery veneer is stained at the veneer joins. …" (Our emphasis) 1. The Tribunal found in favour of the respondents on that issue and made the following order: "Order that the builder is by 30 July 2020 to attend at the property and, at his own expense, to rectify with due care and skill and in a proper and tradesman like manner using materials fit for purpose, Item 24 so far as the staining along the veneer joins in numerous areas of the joinery to the kitchen … in accordance with the scope of works of Mr O'Mara set out in the Second Scott Schedule which is Exhibit J2." (Emphasis is ours and highlights what is in dispute) 1. That order has its origin in the finding at [77] of the Tribunal's reasons in which the Tribunal found: "I am satisfied that the explanation of the staining is a contaminant or some other defect in the manufacturing process. It is likely (that if) the stains were a result of a natural defect then the marks would be randomly throughout the veneer in a natural process rather than confined to the edges. Neither cl 14.1 nor 14.2 of the building contract on their proper construction has any application to this defect." 1. The words "that if" in brackets in the quote above are ours. It appears they were omitted by mistake from the reasons. There is no dispute between the parties that the Tribunal was attempting to express its reasons for rejecting the submission that the staining was the result of a natural process rather than being the result of a contaminant or some other defect in the manufacturing process. Ground 1 1. In this appeal the appellant's first ground was: "The Tribunal erred both in law and in fact when it found there was 'staining along the veneer joins in numerous areas of the joinery to the kitchen' in that such a finding was not open to it there being no or insufficient evidence to support this finding." 1. The appellant contends that the problem arises out of the phrasing of Order 1, but what the problem really is, on the appellant's case, is that there was no finding as to how many stains there were, and there was only evidence of one stain in the kitchen and not stains (plural) in "numerous areas". 2. Some explanation of the evidence is necessary in order to explain our reasons for finding in favour of the appellant on this ground. 3. Both parties retained builder experts who gave evidence to the Tribunal. 4. The respondents' expert, Mr O'Mara, produced a report dated 21 December 2018. In that report he said: "I observed throughout the kitchen, sunroom and family rooms there are stains which appear at the joins in the veneers (refer to photographs 40 and 41). It is my opinion that the stains out the veneer joins are defective and replacement of the affected panels is required." 1. The photocopies of the photographs provided to us on this appeal were virtually indecipherable. 2. The caption to photograph 40 says: "Item 24 – Staining along the veneer joins evident in numerous areas of the joinery to the kitchen, sunroom and family rooms." 1. The caption to photograph 41 says: "Item 24 – Staining along the veneer joins evident in numerous areas of the joinery to the kitchen, sunroom and family rooms (refer red oval highlight)." 1. We are, just, able to see a red oval on the copy of photograph 41 provided to us, although we are unable to tell what is inside it. It seems to be common ground that the red oval circles what is said to be one stain in a veneer join in the kitchen joinery. 2. The respondents essentially say that although there is only photographic evidence of one stain in the kitchen, Mr O'Mara's use of the plural "stains", "joins", "veneers" and the words "numerous areas" meant that Mr O'Mara was referring to multiple stains in the kitchen, with the photographic evidence simply being provided as an example. 3. The problem with that submission, of course, is that Mr O'Mara was also speaking of multiple rooms, and so the use of plurals may be a reference to, for example, only one stain in the kitchen together with other stains in the other rooms. 4. In response to Mr O'Mara's report, the appellant served a report by Mr Hickey dated 1 May 2019. In that report Mr Hickey said: "I observed a stain in the eastern cupboard door of the kitchen adjacent to the wall oven. A similar stain is apparent in the sunroom at the lower drawer unit. 1. There followed a photograph, being his photograph 65 (being as indecipherable as Mr O'Mara's photographs 40 and 41). The caption to photograph 65 said: "Photograph No 65 showing the 'stain' on the door adjacent to the wall oven". 1. Under the heading "Opinion", Mr Hickey said: "I concur that there are two stains visible in the grain one being in the kitchen and the other in the sunroom." 1. The two building experts provided a joint report, but the joint report did not directly address the point whether they agreed, or disagreed, on how many stains there were to the joins in the kitchen joinery. 2. The two experts gave evidence concurrently. Each gave their own evidence on each item in the JSS which remained in dispute, which was followed by cross-examination. 3. A fair reading of the transcript from p.32 through to p.61 reveals that when speaking of the kitchen stain, there was only ever one stain spoken of in evidence, and that was the stain appearing in Mr O'Mara's photograph 41. That is, although Mr O'Mara used the plural "stains" in his captions (which applied to three rooms), when speaking of the kitchen he only ever spoke of one stain. 4. In its reasons the Tribunal dealt with Item 24 under the heading "Whether Item 24 constitutes defective building works" from [57]-[80]. 5. The relevant part of the Tribunal's reasons commenced (at [57]) with the statement that Item 24 (the reasons say "Item 3" but this is obviously a typographical error) includes a claim for defects being "stains" (plural) at joins in the veneer in the kitchen. 6. At [60] the Tribunal records the first respondent's evidence in his first affidavit in which he refers to a single "dark patch" to the kitchen joinery. 7. At [76] the Tribunal said: "I am not satisfied that the staining along the veneer joins in numerous areas of the joinery to the kitchen was caused by the application of harsh cleaning liquids or colour texture to the veneer. … 1. And at [77]: "I am satisfied that the explanation of the staining is a contaminant or some other defect in the manufacturing process. …" 1. The Tribunal's reasons have the flavour of repeating Mr O'Mara's opinion but without separating out, at that point, the number and approximate location of the stains in the kitchen veneer joins as distinct from the stains in the other two rooms. 2. The appellant appeals in relation to this ground on the basis that there was either no evidence or insufficient evidence for the Tribunal's order that "the veneer joins in numerous areas of the joinery to the kitchen" be rectified. 3. However, we prefer to uphold this ground on the basis of a constructive failure to exercise jurisdiction in that the Tribunal failed to make a finding of fact as to the number (and approximate location) of the relevant stains in the kitchen to be rectified, keeping in mind that Mr Hickey's evidence is clearly to the effect that there is only one, and if that evidence were to be rejected, no reasons were given by the Tribunal for doing so. 4. As we have said earlier, in his oral evidence Mr O'Mara only referred to one stain or mark in the kitchen, and that was the one shown in photograph 41. His use of the expression "veneer joins evident in numerous areas of the joinery" in the captions to his photographs needs to be read with the words that follow, namely "to the kitchen, sunroom and family rooms". When read with his oral evidence it seems his evidence was that there was one stain in the kitchen, and similar stains in the other rooms, and thus there was no dispute of fact between he and Mr Hickey as to how many stains there were in the kitchen joinery. 5. In those circumstances we uphold this ground and would vary Order 1 made by the Tribunal so that it refers to the singular stain shown in Mr O'Mara's photograph 41. Ground 2 1. Ground 2 was: "The Tribunal erred both in law and in fact when it held 'I am satisfied that the explanation of the staining is a contaminant or some other defect in the manufacturing process' in that before drawing that inference it did not sufficiently consider the preliminary question as to whether the evidence reasonably admitted of a different conclusion and did not reasonably consider whether the staining and changes in the timber veneer in the kitchen were the result of a natural process." 1. The appellant's contention had two parts: a significant new evidence point and a no evidence point. Significant New Evidence 1. The appellant said that leave to appeal on a ground other than an error of law should be granted on the basis of cl 12(1)(c) of Schedule 4 of the NCAT Act. The appellant submitted that the appellant may have suffered a substantial miscarriage of justice because significant new evidence had arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 2. The significant new evidence fell into two types. First, a series of photographs taken by the appellant on 29 April 2020 (one week after the Tribunal's decision at first instance was published) which the appellant says show "more marks and blemishes in the kitchen joinery" which first appeared after various defects list were prepared and which were not referred to by either expert (because, says the appellant, the marks and blemishes did not appear at that time). 3. The subsequent appearance of these marks and blemishes, the appellant says, supports its hypothesis that the staining found by the Tribunal was more likely to have been caused by the joinery being exposed to sunlight rather than some contaminant or other defect in the manufacturing process. 4. The second type of significant new evidence consisted of a document described as "Aged Veneer Specification" which contained a clause referring to, amongst other things, the possibility of timber fading or changing colour over time. 5. The appellant submitted this new evidence was relevant because it went to the question of whether, as found by the Tribunal, the stain (or stains) were caused by a contaminant or some other defect in the manufacturing process, or was the result of a natural defect or natural process (such as exposure to sunlight). 6. The appellant submitted that this evidence was not reasonably available at the time of the hearing. 7. In relation to the Aged Veneer Specification, the appellant said that it had been "out of the joinery loop" and it had no communication with the respondent or the joiner regarding the defects in the joinery until late 2018 and thus was unable to obtain a copy of the Specification. 8. The hearing before the Tribunal took place on 24 and 25 June, and 28 November 2019, so the "out of the loop" explanation does not account for the period between late 2018 and June 2019, and does not account for the possibility of issuing a summons under s 48 for the production of documents by the joiner (who was said to have had a copy of the Specification). 9. In oral submissions the appellant submitted that the Aged Veneer Specification was not reasonably available because the idea that the staining was caused by a contaminant arose for the first when Mr O'Mara gave oral evidence at the hearing. 10. However, the issue of whether the staining was or was not the result of some defective work, as opposed to being the result of some natural process, was in issue before that time. No objection was taken to the evidence of Mr O'Mara on the basis that the appellant had been taken by surprise. Mr Hickey did not say in his oral evidence that the Specification may be a relevant or useful piece of evidence (and it is notorious that Specifications are common documents in relation to building materials), and there is no evidence from either expert now that the Specification would alter their opinions expressed at the hearing. 11. Particularly given the absence of any expert evidence as to the significance of the Specification, we are not persuaded that the Specification is significant new evidence. Further, and for the reasons we have given immediately above, we are not persuaded that the Specification was not reasonably available at the time. 12. Similarly for the photographs. 13. There is no evidence from either expert that the photographs would cause them to alter their opinion. 14. The copies provided to us are photocopies of photographs, and so, although less indecipherable that the earlier photographs to which we have referred, they are not sufficiently clear to allow us to discern much from them. Further, how a court or tribunal may use photographs is the subject of restraint, although there is some uncertainty as to precisely how much restraint. 15. In Beaton v McDivitt (1985) 13 NSWLR 134 Young J, as his Honour then was, said at 142-3: "I must say that I made this statement because it seems to me that the law is a little unclear as to just what use may be made of photographs tendered at a trial. In a criminal trial, photographs of the victim may be tendered to enable the jury to understand the medical evidence: see, eg, R v Lobendahn (1980) 5 Petty Sessions Review 2484. Even if photographs are tendered in a motor car accident case, it may be that without concession the photographs can only be used by the judge as descriptive of what the witness who tendered them saw, and that the judge cannot himself make deductions from them: see, eg,Schmidt v Schmidt [1969] QWN 3. However, in R v Ames [1964-5] NSWR 1489 at 1491, the Court of Criminal Appeal seems to me to have made a greater use of the photograph than merely to use it to understand the evidence because their Honours said: '… the photographs … did have some probative value, as distinct from an oral description of what they depicted …. They depict the direction of the flow of blood on to the clothing and establish the presence of blood on the mouth ….' Very often in equity, photographs are tendered from the Bar table without a witness in the box to give complementary oral evidence, and in my view, when this happens, consistently with R v Ames, the judge treats the(1985) 13 NSWLR 134 at 143photographs as evidence and not merely as material to understand the evidence. However, because the point is arguable I took the precaution of making it clear what status I would give to the video tape in this case, which statement was accepted without demur by the parties." 1. In Blacktown City Council v Hocking [2008] NSWCA 144, which was decided by a bench of five justices, Spigelman J (at [8]) quoted the passage from Beaton which we have set out immediately above, discussed some further authorities, and then said at [13]: "It appears that Schmidt, which relied on the older version of Wigmore's text, may need reconsideration, as suggested by Young J in Beaton." 1. Beazley and Campbell JJA agreed with the Chief Justice. Campbell JA added: "I agree with the reasons of Spigelman CJ. The modern proliferation of surveillance cameras and closed circuit television cameras that record events that nobody sees, or sees properly, provides a reason why Schmidt may need reconsideration." 1. Tobias JA, with whom Giles JA agreed, said at [167]: "[167] The use of photographic evidence has been the subject of discussion in this Court. Its admissibility as a visual reproduction is beyond doubt: R v Travers (1958) 58 SR (NSW) 85 at 108. However, in Short v Barrett, Court of Appeal, 5 October 1990 (unreported), Meagher JA, with the concurrence of Clarke and Handley JJA, observed that in relying on his own interpretation of photographic evidence, the trial judge had overlooked the "sage advice" of Lord Reid in C Van der Lely NV v Bamfords Ltd [1963] RPC 61 at 71. His Lordship said: 'Lawyers are expected to be experts in the use of the English language, but we are not experts in the reading or interpretation of photographs. The question is what the eye of the man with appropriate engineering skill and experience would see in the photograph, and that appears to me to be a matter for evidence. Where the evidence is contradictory the judge must decide. But the judge ought not, in my opinion, to attempt to read or construe the photograph himself; he looks at the photograph in determining which of the explanations given by the witnesses appears to be most worthy of acceptance.'" 1. And at [169]: "It should be noted that the use by a trial judge of photographs is nothing new. They can, as the authorities to which I have referred confirm, be descriptive of what a witness says he or she saw, being a representation of the witness' knowledge and observations. But they should not be used by a judge to make findings of fact which are otherwise unsupported by the evidence and are therefore no more than conjectural: Schmidt v Schmidt [1969] QWN 3 at 6; Beaton v McDivitt (1985) 13 NSWLR 134 at 142." 1. In Tran v Nominal Defendant [2011] NSWCCA 220 McColl JA, with whom Campbell JA and Sackville AJA agreed, said at [172]: "… Although, as Spigelman CJ has commented, '[i]t is not entirely clear in what circumstances photographs can be used as direct evidence, as distinct from explicating the evidence otherwise given' (Blacktown City Council v Hocking [2008] NSWCA 144 (at [7])), the prevailing view appears to be that photographs cannot trump the testimonial evidence, but, rather, can be used by the tribunal of fact to determine 'which of the explanations given by the witnesses appears to be most worthy of acceptance': C Van der Lely NV v Bamfords Ltd [1963] RPC 61 (at 71) per Lord Reid cited with approval by Tobias JA in Blacktown City Council v Hocking (at [167]); see also Angel v Hawkesbury City Council [2008] NSWCA 130 (at [71]–[72]) per Beazley and Tobias JJA (Spigelman C Giles and Campbell JA agreeing). 1. In Goode v Angland [2017] NSWCA 311; (2017) 96 NSWLR 503 Beazley P, with whom Meagher and Leeming JJA agreed, said: [93] A matter that frequently arises in the use of photographs is that they can be deceptive, particularly in relation to perspective and distance. This was the subject of observation in Angel v Hawkesbury City Council (2008) Aust Torts Reports 81-955; [2008] NSWCA 130 where the court (Beazley and To­ bias JJA, Spigelman CJ, Giles and Campbell JJA agreeing) said, at [69]–[72], that photographic evidence could not trump the direct evidence of witnesses that compelled acceptance. [94] I had cause to review the use of photographic evidence again in Yarrabee Coal Company Pty Ltd v Lujans (2009) Aust Torts Reports 82-024; [2009] NSWCA 85 at [20]–[27] and concluded, at [28]: '[28] … much will depend upon the photograph in question, the circumstances in which it was taken and what the evidence, if any, is in relation to the photograph. Thus, in Angel v Hawkesbury City Council [2008] NSWCA 130 the Court rejected that the photographs should have trumped the eyewitness evidence which, the Court held, was compelling: see at [69]-[70].' [95] In Townsend v O'Donnell (2016) 78 MVR 283; [2016] NSWCA 288, there were photographs in evidence, taken after a motor accident, which depicted the place where the accident occurred and from which it was sought to estimate how long the respondent had had to take evasive action. Sackville AJA, with whom I and McColl JA agreed, said, at [52]: '[52] … great care must be taken in interpreting photographic evidence. This is particularly the case where there is no evidence as to the precise position of the camera when the photographs were taken and the photographs themselves are indistinct.' (Footnotes omitted) See also Warren v Gittoes [2009] NSWCA 24 at [54]–[55]. [96] In Herne Investments (NSW) Pty Ltd v Don Watson Pty Ltd [2016] NSWCA 72, which concerned a motor accident, the appellant contended that the primary judge had failed to give adequate weight to video footage taken from a camera in a vehicle travelling behind the vehicles involved in the accident. Sackville AJA, Ward JA and Garling J agreeing, said, at [42]: '[42] The authorities warn that care must be taken in relying on photographic evidence, bearing in mind that photographs are not always easy to interpret for forensic purposes. Most of these warnings have been given in relation to photographs taken after the relevant events have occurred. Photographs taken or videos filmed contemporaneously with the relevant events may provide cogent evidence that enables a court to resolve disputed factual issues. The probative value of the contemporaneous evidence of this kind will, however, depend on the nature and quality of the photograph or video evidence and the issues which need to be resolved.' (Footnote omitted) See also, again in the context of video evidence, Asim v Penrose [2010] NSWCA 366 at [57]; QBE v Orcher [2013] NSWCA 478. 1. In this case there is no evidence from the experts as to what the photographs depict, or their significance. The copies of the photographs provided to us are indistinct. We are asked, in effect, to interpret the photographs and, on the authorities to which we have referred, we are unable to do so. 2. Therefore, we are not persuaded that the photographs are significant new evidence within cl 12(1)(c) of Schedule 4. 3. For those reasons we reject the submission that significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with), and therefore reject the application for leave to appeal on a ground other than an error of law. No Evidence 1. The second submission made in relation to this ground was a no evidence point, namely that there was no evidence of "contamination" and no evidence that the marks (staining) was found on the "edges". 2. The appellant submitted that Mr O'Mara never referred to contamination in his report, the respondents bore the onus of proof and the appellant had served expert evidence to the effect that what was alleged to be staining was not staining but was a natural variation. 3. The appellant submitted it was taken by surprise by the claim of staining, it was never raised before the proceedings and the appellant was not given the opportunity to put on expert evidence in reply and to address this claim. 4. The appellant submitted that the Tribunal's finding of contamination was simply the acceptance of a submission made by the respondents. 5. The appellant also submits that at no time did any witness say in evidence that the marks on the veneer were confined to the edges of the veneer, and that the marks being on the edges was the premise for the Tribunal's reasoning that, if the marks (staining) was the result of a natural process, the marks (staining) would have appeared in other places besides the edges. 6. We do not accept these submissions. 7. Mr O'Mara's report referred to stains and staining. Mr Hickey used the same terms in his report. 8. When giving concurrent evidence Mr O'Mara said that the black markings "along the line of the join in the veneer" he could see in his photographs 40 and 41 was "some form of contamination or residue of sorts" (T 32.37-.41). At T 34.38 Mr O'Mara said that he did not think that black marking was natural. He referred to the fact that the mark had no reflection above, which he would have expected to have been there had the veneer been book-matched. At T 43.15 he said that, in his opinion, the black mark was not part of the timber, it was a later contaminant and thus part of the finish rather than the timber. 9. It is apparent that everyone understood that the black mark spoken of was what was described elsewhere as "staining". 10. Mr Hickey said that he didn't agree that the black mark was "necessarily a contaminant" and that it "may be an occlusion or some sort of marking or veining from the outside of the tree" (T 42.31). That evidence, using the expressions "(not) necessarily" and "may" is hardly a direct repudiation of Mr O'Mara's hypothesis as to the origin of the stain. 11. At T 59 Mr Hickey took up the point that there was no evidence as to when this stain first appeared, and referred to cl 14 of the Contract which contained a statement to the effect that timber may exhibit variations in texture, shade, colour, surface, finish, markings veining and may contain natural fissures, occlusions and indentations. 12. When read in context, Mr Hickey was not offering an opinion that the stain was, more probably than not, caused by some natural process. Rather, he was asserting that Mr O'Mara could not rule out a natural process as a possible cause of the stain, a fact Mr O'Mara agreed with. 13. But in a civil case it is probabilities which determine the outcome on disputed facts, not possibilities, and Mr O'Mara's evidence was that more probably than not the staining was caused by non-natural contamination. Mr Hickey did not offer any opinion on what was more probably the cause of the staining, but only referred to possible natural causes. 14. In our opinion the finding of the Tribunal that the staining was the result of a contaminant or other defect in the manufacturing process was somewhat inevitable given there was no issue of credit against either expert, Mr O'Mara giving evidence of a probable cause supported by some rational reasoning (albeit not extensive) in support of that hypothesis and Mr Hickey's evidence being confined to mere possibilities. 15. Further, no objection was taken at the time Mr O'Mara gave his evidence of "contamination", no point was taken that the appellant was taken by surprise or suffered any prejudice. Mr Hickey was giving evidence concurrently with Mr O'Mara and directly addressed the issue, so what prejudice the appellant suffered from the word "contamination" being used for the first time in oral evidence is not evident, nor was any prejudice identified in the appellant's oral or written submissions. 16. As for the Tribunal's use of the word "edges" at [77] of its reasons, we do not see any error. That word was obviously a synonym for the words "join", "joint" and "seam(s)" used elsewhere in the evidence to describe the location of the stain with reference to a physical feature evident in the photographs, just as "staining" and "black mark" were used interchangeably to mean the same thing. Ground 3 1. Ground 3 was: "Having not reasonably considered whether the staining was a natural process the Tribunal further erred in law when it failed to properly consider whether the staining and changes in the timber veneer in the kitchen came within the exclusions of Clause 14.3 of the building contract between the owner and the builder." 1. What the appellant means is that the Tribunal erred in failing to find that the stain fell within cl 14 of the Contract, and cl 14 excluded liability for it. 2. Clause 14 was in the following terms: "14. Timber Risk 14.1 Timber is a natural product and as such may exhibit variations in texture, shade, colour, surface, finish, markings, veining, and contain natural fissures, occlusions and, and indentations. Whilst the Contractor will make every effort to match sales samples to the finished Materials the Contractor accepts no liability whatsoever where such samples differ to the finished Materials supplied. 14.2 Timber is a hydroscopic material subject to expansion and contraction, therefore the Contractor will accept no responsibility for the gaps that may appear in the flooring during prolonged dry periods. 14.3 The Owner acknowledges that Materials supplied may: (a) fade or change colour over time; and (b) expand, contract or distort as a result of exposure to heat, cold, weather; and (c) Mark or stain if exposed to certain substances; and (d) be damaged or disfigured by impact or scratching." 1. The appellant fairly and properly conceded that if the staining was caused by a contaminant or some other defect in the manufacturing process then cl 14 of the Contract would not apply (as found by the Tribunal). As we have dismissed the ground asserting error in the finding of a contaminant, the applicability of cl 14 is no longer relevant. 2. However, even if we were wrong, we would still not need to decide whether cl 14 applied because, had the finding been that the stain was caused by some natural process, there would have been no liability in the builder in any event. 3. Further still, cl 14 would not apply because the only exclusions the clause speaks of are where the finished materials do not match a sample, and where gaps in the flooring appear. Neither are applicable here. The statements referring to timber being a natural product etc do not, in terms, exclude anything. Ground 4 1. Ground 4 was: "The Tribunal erred both in law and in fact when it improperly took into consideration evidence of a 'Kitchen Dark patch to the veneered panel' in a defects list provided by the owners' designer Form Follows Function whilst failing to consider the uncontested evidence of the Builder that proved that the alleged defect had previously been rectified and that the alleged defect was not a defect in dispute at Item 24 of the Joint Scott Schedule." 1. No claim was made for rectification of a dark patch in the kitchen (see [104]-[105] of the respondent's written submissions dated 7 July 2020]. 2. Therefore, this ground fails. Conclusions 1. We find in favour of the appellant on ground 1 but dismiss its appeal in relation to grounds 2 - 4. 2. As the Tribunal granted the appellant approximately three months to do the work referred to in Order 1, we shall allow a similar time from the date of these orders. We shall also allow for liberty to apply to the Tribunal against the event some variation to that order is required or agreed. Orders 1. We make the following orders: 1. Appeal upheld part. 2. Vary Order 1 of the Tribunal so that it reads: "Order that the builder is, by three calendar months from the date of these orders, to attend at the property and, at his own expense, to rectify with due care and skill and in a proper and tradesman like manner using materials fit for purpose, Item 24 in relation to the staining along the veneer join in the joinery to the kitchen and identified in photograph 41 of the report of Mr O'Mara dated 21 December 2018, and Item 25, of the alleged defective building works in accordance with the scope of works of Mr O'Mara set out in the Second Scott Schedule which is Exhibit J2." 1. Liberty is granted to any party to restore to the Tribunal below (as originally constituted, or, if that is not possible, differently constituted) on seven days notice, such notice to include notice of the orders the re-listing party proposes to seek. 2. If any party desires to make an application for costs: 1. that party is to so inform the other party within 14 days of the date of these reasons; 2. the applicant for costs is to lodge with the Appeal Panel and serve on the respondent to the costs application any written submissions of no more than five pages on or before 14 days from the date of these reasons; 3. the respondent to any costs application is to lodge with the Appeal Panel and serve on the applicant for costs any written submissions of no more than five pages on or before 28 days from the date of these reasons; 4. any reply submissions limited to three pages are to be lodged with the Appeal Panel and served on the other party within 35 days of the date of these reasons; 5. the parties are to indicate in their submissions whether they consent to an order dispensing with a hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted. ********** 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: 01 September 2020