Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Bryson v The FPC (NSW) Pty Ltd [2021] NSWCATAP 415 Hearing dates: 26 July 2021 Date of orders: 22 December 2021 Decision date: 22 December 2021 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President J Currie, Senior Member Decision: (1) The appeal is dismissed except to the extent of the orders that follow. (2) Orders 1 to 4 (inclusive in proceedings HB20/13402 incorrectly stated as 20/00638) are affirmed except that the amount in order 1 is increased to $15,531.72. (3) Orders 1 and 2 made in proceedings HB 20/00638 are set aside. (4) Proceedings HB 20/00638 are remitted to the Consumer & Commercial Division for a rehearing based upon the evidence filed and served in those proceedings and without any new evidence being relied upon (unless both sides so consent) for the sole purpose of considering the amount of the claim for variations brought by the Builder but otherwise based upon the figures in [99] of the decision under appeal, (namely contract sum, adjusted contract sum, agreed credits, disputed credits, amount payable and less amount paid) which are not to be the subject of further dispute between the parties. (5) Either party may file and serve submissions with respect to costs of the appeal, provided that such submissions are filed and served within 14 days. (6) A party receiving submissions claiming costs has a further period of 14 days to file and serve submissions in reply. (7) The submissions with respect to costs of the appeal should include submissions as to whether the Appeal Panel may determine costs of the appeal on the papers and dispense with a further hearing. Catchwords: APPEAL- whether leave to appeal should be granted-inadequate reasons-assessment of damages-whether allowance to be made for betterment-remittal of claim for variations. Legislation Cited: Civil & Administrative Tribunal Act 2013 NSW Home Building Act 1989 NSW Cases Cited: Bellgrove v Eldridge[1954]HCA36 Collins v Urban[2014NSWCATAP17 Haines v Bendall [1991] HCA 15 House v R (1936) HCA 40 Hyder Consulting( Australia) P/L v Wilh Wilhelmsen Agency P/L and Anor [2001]NSWCA313 Liebe v Molloy [1906] HCA 67; 4 CLR 347 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 Texts Cited: Nil Category: Principal judgment Parties: Todd Bryson and Sarah Bryson (Appellants) The FPC (NSW) Pty Ltd (Respondent) Representation: L Stojanovski, Keystone Lawyers (Appellants) -br-S Green, a Director (Respondent) File Number(s): AP 21/132814 Publication restriction: Nil Decision under appeal Court or tribunal: New South Wales Civil & Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 12 April 2021 Before: G Ellis SC (Senior Member) REASONS FOR DECISION Introduction 1. This appeal arises out of a decision of the Consumer & Commercial Division of the Tribunal in respect of which the Tribunal was exercising its jurisdiction under the Home Building Act (NSW) (HB Act). There were two sets of proceedings (the Tribunal proceedings) heard together. The first application was filed by the Respondent (who we will refer to as the Builder) and the second application was filed by the Appellants (who we will refer to as the Homeowners). The dispute arose out of a contract entered into between the parties concerning building work involving the renovation of pool and patio areas. 2. The decision under appeal (the Decision) was published on 5 April 2021 and orders were made to the following effect: 1. The Homeowners are to pay the Builder $2,978.30. 2. The Builder is to pay the Homeowners $15,260.52. 3. In addition to the above, orders were made for the parties to make submissions with respect to costs. 1. The basis for the order requiring the Homeowners to pay $2,978.30 is set out at [99] of the Decision and it represents the calculation of the balance of monies due to the Builder having regard to the contract sum, variations, credits and amounts already paid. The basis for the order requiring the Builder to pay $15,260.52 to the Homeowners is also explained the same paragraph and is the aggregate rectification costs incurred by the Homeowners in remedying defects for which the Builder was found responsible. 2. In the appeal, the Homeowners seek to have the order in their favour of $15,260.52 set aside and in its place an order that the Builder pay to the Homeowners $119,166.87 (inclusive of GST and Builder's profit margin). The Homeowners also seek to have the order in the Builder's favour requiring payment of $2,978.30 set aside and in its place that there be an order that the Builder pay to the Homeowners $5,845.60. 3. In essence the dispute in the Tribunal proceedings concerned whether and to what extent the Builder should be liable to the Homeowners for defects and to what extent the Builder was entitled to claim for variations. 4. In order to understand the Homeowners' appeal, a summary of the Decision is helpful, and is set out in the following paragraphs. References in square brackets are to paragraphs in the written reasons for the Decision. Summary of the Tribunal Proceedings and the Decision 1. The only lay witness for the Homeowners was Mr Bryson who was not cross-examined [7]. The Builder's lay witnesses were Mr Bullock and Mr Osborne who were both cross-examined [7]. Expert evidence was given by Mr Kyle for the Homeowners and Mr Ledgerwood for the Builder [8]. They also provided a joint report [8]. Relevantly to this appeal the Decision dealt with four defects described as item 1, item 4, item 5 and item 6, as well as an issue concerning Termimesh (a termite barrier), and issues concerning variations. Each of these matters are the subject of the appeal. 2. Item 1: this concerned alleged defects to the pool fence. At [26] the Tribunal found that there were defects and, therefore breaches of s 18B(1)(a) of the HB Act. At [27] the Decision records that the Homeowners sought to rely upon a quotation for $8,590 and the Tribunal held that the amount claimed was excessive going "beyond what is reasonably required and does not contain the detailed itemisation of the cost of the aspects of this item". The particular defects were described in [26] and in [24]. The Tribunal allowed the costings contained in Mr Ledgerwood's evidence, namely $1,150. As will be seen later the Homeowners claimed an amount in the region of $10,000. 3. Item 4: this concerns alleged damage to the pool surface as a result of the pool being emptied of water for a period. The issue with respect to this item was not whether the pool surface had been installed defectively by the Builder but rather whether the "already installed surface" was damaged by the conduct of the Builder" [38]. The Tribunal noted a discrepancy between the evidence of Mr Bryson and the evidence of Mr Kyle. At [38] the Tribunal found that the discrepancy "warrants the Tribunal not accepting what Mr Kyle claims the owners told him unless that corresponds with evidence from Mr Bryson". The Tribunal found that there was unchallenged evidence from Mr Bullock that there was crazing of the pool surface before the Builder had commenced its work [41]. The Tribunal found that crazing was not a matter for which the Builder should be held responsible [41]. With respect to the Homeowners' allegation that the Builder had been responsible for causing the pool to leak the Tribunal found that there was "insufficient evidence to warrant findings that there is a leak and that such a leak was caused by the Builder" [42]. 4. With respect to the Homeowners' allegation that there was damage caused to temporary fencing, the Tribunal found at [43] that it was satisfied that there had been a breach of s 18B(1)(a) by the Builder. The Tribunal referred to the evidence of Mr Kyle that the cost of rectification would be $11,840. At [45] and [46] the Tribunal briefly dealt with the legal principles relevant to the assessment of damages referring to Haines v Bendall [1991] HCA 15 and Bellgrove v Eldridge [1954] HCA 36. At [47] the Tribunal found that it was not satisfied that it would be reasonable to provide the Homeowners with "new for old" by requiring the Builder to "shoulder the cost of resurfacing the entire pool when its existing surface is well over a decade old and where the matters for which the Builder is responsible are isolated and not extensive". The Tribunal also removed two aspects of the claim, namely the claim for the leak (which Mr Kyle had assessed would cost $2,000 to rectify) and the claim for dealing with the leak (which Mr Kyle assessed would cost $400). The Tribunal then said that the claim totalled $9,440 and at [48] the Tribunal allowed $1,000 in respect of this item noting that that amount is about 10% of the cost of resurfacing the entire pool. In the appeal, the Homeowners submit that the full amount claimed should have been allowed. 5. Item 5: this item concerned alleged defects to external pavements. The evidence of Mr Kyle was that the pavements were defective in a number of respects and the Decision outlined the respective opinions of Mr Kyle and Mr Ledgerwood. With respect to the claim of lippage (which we take to mean the resulting uneven surface of the tiles occurring because they were not laid to a uniform level) there was a dispute between the two experts. At [52] the Tribunal recorded that Mr Ledgerwood found only one tile defective in respect of lippage and that Mr Kyle had only provided one photo which the Tribunal said did not "clearly show such lippage". The Tribunal found that the evidence did not establish lippage beyond the single tile considered by Mr Ledgerwood. 6. There was also an allegation that the pavements had been laid with an inadequate fall. The Tribunal found at [53] that this item had not been proven to the satisfaction of the Tribunal. There was an allegation of efflorescence and the Tribunal found that it was not supported by photographs. Mr Ledgerwood's evidence described efflorescence as the existence of salt on the surface of tiles (p 489 of the Appeal Book) and his evidence was that splashing from the saltwater pool could have been the cause. The Tribunal found that this aspect had not been proven [54]. There was also an allegation that half of 730 tiles were drummy. Mr Ledgerwood disagreed with Mr Kyle in that respect. He found only 76 to be drummy and that only six were completely drummy requiring to be replaced. At [56] the Tribunal found that there was a lack of detail in Mr Kyle's evidence as to what constituted a drummy tile and as a consequence his evidence did not establish that half the tiles were drummy to the point where they are defective. The Tribunal adopted the concession made by Mr Ledgerwood in relation to six tiles. 7. There was also an allegation of variances in the thickness of the grout. At [57] the Tribunal found that these variances were not evidence of defects but were rather a consequence of variations in the length, width and thickness of the tiles selected by the Homeowners. In this respect, the Tribunal accepted the evidence of Mr Ledgerwood [57]. In subsequent paragraphs, the Tribunal dealt with further allegations concerning the tiles and in particular considered the conflicting evidence of the two experts. At [72] the Tribunal found that a "close consideration of the individual aspects revealed that much less rectification work was required [than contended for by Mr Kyle] and that replacing all the paving was neither required nor reasonable." At [73] the Tribunal noted the Builder's estimate for rectification of the conceded aspects was $1,016 and then in the following paragraphs the Tribunal considered the cost estimates of the two experts in respect of the various specific defects contended for and at [80] the Tribunal awarded the sum of $2,225 rather than the sum of $55,230 contended for by the Homeowners. 8. Item 6: at [81] the Tribunal noted that the parties appeared to concede that the Builder should pay to the Homeowners compensation with respect to posts or poles with incorrect dimensions installed as part of a shade sail structure. The Tribunal awarded $600 to the Homeowners. They had contended that they were entitled to $871.20 and the Tribunal held that there was no evidence as to how that amount had been calculated. 9. The Tribunal considered a claim in respect of "Termimesh". The Tribunal found that Termimesh had been installed before the Builder commenced work and that after the works had commenced it was noticed and the Builder advised Homeowners that it would need extending. The Homeowners' contention was that the need to extend the Termimesh was something that the Builder should have included in its own costing and that it should not have been a cost for the Homeowners to bear. The Tribunal found that the existence of the Termimesh was not disclosed to the Builder and, as a result, the need to extend it had not been included in the quote. The Tribunal found that it was not satisfied that the Homeowners are entitled to be reimbursed for the cost of extending the Termimesh. The Homeowners seek a sum in the order of $794 as compensation for this alleged oversight. 10. The Decision dealt with eight disputed variations totalling $8,826.97 claimed by the Builder. At [84] the Tribunal recorded that the variations were disputed by the Homeowners on the basis that under the HB Act the Builder was not entitled to a variation unless it is in writing and is signed by the Homeowners. The Tribunal then proceeded to consider the claim on a quantum meruit basis and at [84], [85] and [87] the Tribunal referred to the legal principles applicable to a quantum meruit claim. 11. At [88] the Tribunal stated that having reviewed the evidence, including but not limited to the documents to which the Homeowners' lawyer referred to in his closing submissions, the Tribunal was satisfied that the tests referred to in the cases cited in relation to variations had been satisfied. The variations were allowed in full. The Notice of Appeal 1. The grounds identified in the Notice of Appeal may be summarised as follows: 1. The Decision was against the weight of evidence. 2. The reasons were inadequate. 3. The Tribunal erred in its application of the law, namely the principles in Bellgrove v Eldridge. 4. The Tribunal's discretion miscarried in the exercise of its discretion in determining matters within the principles of House v R (1936) HCA 40 in that the Tribunal allowed extraneous or irrelevant matters to guide or affect it, mistook the facts, did not take into account material considerations, and the Decision was unreasonable or plainly unjust. The Appellants' submissions – Defects 1. The Homeowners' written and oral submissions are summarised in the following paragraphs: 1. Defect item 1: the rejection of the quotation submitted by the Homeowners was made without proper reasons being given and there was no basis for accepting the evidence of Mr Ledgerwood. 2. Defect item 4: the Tribunal identified apparent inconsistencies in the evidence of Mr Bryson. At [38] the Tribunal stated that the evidence of Mr Bryson differed substantially from the evidence of Mr Kyle. Mr Bryson's evidence was that the leak was 2 cm over 10 to 14 days, whereas the evidence in Mr Kyle's report is that the leak was 20 mm per day. The submission of the Homeowners is that the Tribunal misconstrued the evidence of Mr Kyle who had merely reported what the Homeowners had advised him. We divert to note that in [36] of the Decision the Tribunal quoted Mr Kyle's report and expressly included the quotation that the Homeowners had advised him that the pool currently leaks approximately 20 mm per day. The Homeowners referred to Mr Bryson's statutory declaration which included evidence that there had been an increased water loss of 20 mm per day. Accordingly, there was no discrepancy in the evidence. The Tribunal found that there was no evidence of leak tests but the Homeowners claimed that there was such evidence on pages 296 to 298 of the appeal bundle. We divert to note that those pages do not identify the extent of a leak. They do confirm the existence of leak tests. The Decision refers to the evidence of Mr Bullock whose evidence was that Mrs Bryson had told him that during the summer she needed to top up the pool at least once a week. The Tribunal found that this was consistent with the existence of evaporation. The Homeowners submit that the Tribunal allowed extraneous or irrelevant matters to guide it and acted beyond its authority in applying evidence concerning a technical issue. 3. With respect to the cost of resurfacing the pool the Homeowners submit that the estimated costs of $8,000 were supported by detailed evidence. We pause to note that this claim was in fact accepted by the Tribunal (see [47]) but the amount was discounted for reasons which we will consider in subsequent paragraphs. 4. The Homeowners submit that the Tribunal failed to properly apply the principles set out in Haines v Bendall and Bellgrove v Eldridge and in particular no reason was given as to why 10% of the total amount found was considered to be a reasonable percentage. The Homeowners submit that the question of what is necessary and reasonable remedial work in any particular case is a question of fact: See Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272. Here, the relevant facts had been ignored, namely the overriding objectives of the contract, the owners' expectation and the likely recourse in the event of defective and non-performing conforming works. 5. Defect item 5: the Homeowners submit that the Decision contained findings against the weight of evidence. The Homeowners referred to the finding in [52] of the Decision that Mr Kyle provided only one photo showing lippage over 5 mm. The Homeowners submit that the Tribunal overlooked photographs forming part of Mr Bryson's statutory declaration. Further, the Homeowners submit that the evidence of Mr Ledgerwood should not have been preferred because he conceded that his opinion as to lippage was based upon a single photograph. The Homeowners relied upon a portion of the transcript, particularly at line 1532. We pause to state that our understanding of Mr Ledgerwood's evidence is that he did more than base his report on a single photograph. At line 1539 he says that he tested "every tile in that upper bit, and from that lip area". 6. With respect to the claim concerning efflorescence the Homeowners submit that there was evidence throughout the statutory declaration of Mr Bryson supporting the existence of efflorescence. The Tribunal appears to have accepted evidence that efflorescence may have been caused from splashing from the saltwater pool. The Tribunal accordingly could not have considered the declaration of Mr Bryson in which there was evidence that, given the distance, it was not possible for splashing to have caused efflorescence. 7. With respect to the issue concerning drummy tiles, Mr Ledgerwood did not test all tiles and his evidence could not constitute evidence of "extensive testing" as he had alleged in his report. In addition, the Decision referred to the Australian Standard AS2958.1 and noted that neither expert had referred to that standard in their reports. The Homeowners submit that to the extent that the Decision relies upon that standard, the Tribunal has been guided by a consideration outside the scope of the Tribunal's expertise. Further, Mr Ledgerwood in fact conceded that there were 76 tiles that were drummy and therefore the Tribunal erred in determining that there were only two tiles found to be drummy. Mr Ledgerwood's concession as to 76 drummy tiles can be found at line 1629 of the transcript. We pause to say that in our view there is no such concession at line 1629. Rather counsel for the Homeowners asked a rather lengthy question and at the end of it Mr Ledgerwood said "correct". That reply seems to us to have been in response to counsel stating that there is a standard which states that tiles are defective if they become loose within 24 months. Mr Ledgerwood agreed to that suggestion by Counsel. Later at lines 1658 and 1659 Mr Ledgerwood says that he found 76 tiles with "some drumminess; only six of those 76 were drummy and loose, and they are the ones I propose to remove or repair". 8. With respect to the allegations of differences in grout joints, the Decision was against the weight of evidence. The Tribunal did not consider certain photographs identified by the Homeowners in their submissions. The submissions also take issue with findings made in the Decision with respect to the other criticisms concerning the pavers and for reasons which will become apparent later in these reasons, there is no need to specifically refer to the detail of those submissions. 9. The Homeowners submissions also complain that the Tribunal's conclusions and findings were against the weight of evidence in relation to the following matters: grout staining, the risk of white ants, compensation for weepholes, lack of expansion joints, a defective PVC drain, and an inconsistent overhang of pavers. The evidence of Mr Bryson was unchallenged and the failure to accept the opinions of Mr Kyle not adequately explained. The Appellant's Submissions - Variations 1. The Homeowners submit that, in order for a builder to succeed in a quantum meruit claim, it is necessary for the builder to be able to establish that the homeowner had actual knowledge of the extra works as they were being done, that they knew that the extra works were outside the contract and that they knew that the builder expected to be paid an additional amount for the extra work. The Homeowners submit that these principles are set out in Liebe v Molloy [1906] HCA 67; 4 CLR 347. They say these matters were not established here. Rather, they contend that they had knowledge that the works were being done, but did not know that those works were outside the contract or that they were required to pay further or additional amounts with respect to such work. The claims for variations (other than the first) were in fact made after the proceedings in the Tribunal had been commenced. 2. The Homeowners' submissions refer to [88] of the Decision in which the Tribunal stated that having "reviewed the available evidence, including but not limited to the documents to which the owners' lawyer referred to in his closing submissions on this topic, the Tribunal is satisfied that those tests are satisfied in relation to the variations claimed in this case". The Tribunal's reference to "tests" was tothe tests identified in Liebe v Molloy. 3. The Homeowners submit that that conclusion contained in [88] constitutes reasons which are inadequate. The Homeowners submit that their evidence tendered in the proceedings under appeal dealt with each of the variation claims and references were made to that evidence at the hearing as is evidenced from the transcript: see the transcript from 3235 onwards. The submissions contain a schedule of transcript references with respect to each variation. 4. The Homeowners submit that they thought the work was being conducted within the scope of the contract. Reliance was placed upon the statutory declaration of Mr Bryson (who was not cross-examined) and we were taken to submissions made by the Homeowners at pages 208, 209 and 210 of the appeal bundle. Further, the Homeowners contended that the work claimed for under the variations was work that was in fact within the scope of the contract. Reply and Builder's submissions 1. The Builder has filed a Reply supporting the Decision in some respects by opposing the Homeowners' submissions, and in other respects, arguing that it should not be liable for some of the amounts awarded to the Homeowners by the Tribunal. As there is no cross-appeal brought by the Builder, we cannot and do not propose to consider those submissions made by the Builder seeking to alter aspects of the orders made in favour of the Homeowners. 2. The Builder's written submissions are summarised in the following paragraphs. 3. Defect item 1: the Builder submitted that the order against it was excessive and the submissions go into some detail as to why it should not have been held liable as found by the Tribunal. As there is no cross-appeal we do not propose to consider reducing the amount that the Tribunal ordered to be paid for this item. 4. Defect item 4: the Builder has submitted that it has already paid the amount awarded in respect of this amount and that that amount is "more than sufficient". The balance of the submissions explain why, in the Builder's opinion, the evidence supported the fact that the pool had a pre-existing leak. 5. Defect item 5: the Builder submitted that the amount awarded ($2,225) is appropriate and that the evidence does not support any further amount. The Builder's submissions state that lippage is a consequence of natural stone (chosen by the Homeowners) which differs in thickness. So far as efflorescence is concerned the Builder submitted that the evidence of Mr Ledgerwood (see page 489 of the appeal bundle) states that the cause of efflorescence could be from water splashing. In respect of drummy tiles, the Builder submitted that the evidence of Mr Kyle did not establish that "at least half of the installed paving tiles were found to be drummy in all installed pavement areas". Other complaints concerning the pavers are also disputed by the Builder. 6. Defect item 6: under this ground the Homeowners claim an additional $271.20 over and above the amount awarded. The Builder does not oppose such an increase. 7. Termimesh: the Builder supports the Decision in respect of this item. 8. So far as variations are concerned the Builder's submissions may be summarised as follows: 1. The Homeowners had actual knowledge of the extra works as they were being done, knew that the extra works were outside the contract and knew that the Builder expected to be paid an additional amount for that extra work. All costs were agreed by the Homeowners either via email, text or verbal conversations. 2. Variation 1: see email at page 443 of the appeal bundle which constitutes evidence that Builder informed the Homeowners that this item would be the subject of a variation invoice. 3. Variation 2: the email at page 443 also relates to this claim. 4. Variation 3: this concerns labour to "remove old and lay new tile line on pool step" and the claim is for $375. The Builder's submission is that the contract (page 405) and the quote (page 409) do not list this labour. 5. Variation 4: the Builder's submission is the same as for variation 3. 6. Variation 5: the Builder's submission is that the email on page 443 refers to core drilling for the fence and relates to the extra gate that the Homeowners requested. 7. Variation 6: this relates to a claim for extra glass and the Builder's submission is that page 443 refers to core drilling for the fence. 8. Variation 7: this concerns labour for cleaning and sealing of natural stone pavers. The Builder's submission is that the initial quotation (page 409 of the appeal bundle) specified porcelain tiles and the Homeowners chose natural stone that requires sealing. 9. Variation 8: this concerns a claim for a sealant for natural stone pavers. The Builder's submission is the same as for variation 7. 10. Variation 9: this concerns a claim for weekly hire of a temporary fence. The Builder's submission is that they notified the Homeowners of the hire as soon as they had been locked out of the site. 1. In respect of the defect claims, the oral submissions of the Builder's representative were: 1. Item 5: natural stone naturally produces lippage and efflorescence. 2. Item 4: the Builder claims that the pool had originally been installed in 2006. 3. Item 1: the Builder submitted that the pool fence only became defective because the location of the pump house was changed at the Homeowners' request. Appellants' Submissions in Reply 1. In respect of the claim for variations, the Homeowners submit that the Builder's submissions do not identify the evidence in support of the claim that each variation was agreed by the Homeowners via email, text or verbal conversations. The Homeowners submit that the fact that a certain scope of work is not in a quotation or contract is not sufficient to support the argument that the Homeowners knew that the work being conducted was outside the scope of the contract. The email at page 443 was sent after the fencing work was completed stating that they will prepare a variation invoice. It does not satisfy the test that the Homeowners knew about the work and knew that they would have to pay an additional amount for it. 2. The Homeowners submit that their evidence at first instance (see pages 208-215 of the appeal bundle) sets out the Homeowners' evidence concerning the claims for variations. In the Tribunal proceedings that evidence was not contested by the Builder. 3. To the extent that the Builder seeks to introduce fresh evidence in the appeal, the Appeal Panel should reject such evidence. The general position is that parties to an appeal are not allowed to rely on new evidence that was not given to the Tribunal at the original hearing. Consideration 1. Orders made in proceedings in the Consumer & Commercial Division may be subject to appeal as regulated by s 80 of the Civil & Administrative Tribunal Act 2013 (NSW) (the NCAT Act). Essentially this means that an appeal lies as of right on a question of law or with leave on the grounds set out in clause 12 schedule 4 of the NCAT Act. Clause 12 provides: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80(2)(b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because-- (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). Note: Under section 80 of this Act, a party to proceedings in which a Division decision that is an internally appealable decision is made may appeal against the decision on a question of law as of right. The leave of the Appeal Panel is required for an internal appeal on any other grounds. (2) Despite section 80(2)(b) of this Act, an internal appeal against a Division decision may only be made on a question of law (as of right) and not on any other grounds (even with leave) if-- (a) the appellant is a corporation and the appeal relates to a dispute in respect of which the Tribunal at first instance had jurisdiction because of the operation of Schedule 3 to the Credit (Commonwealth Powers) Act 2010, or (b) the appeal is an appeal against an order of the Tribunal for the termination of a tenancy under the Residential Tenancies Act 2010 and a warrant of possession has been executed in relation to that order. 1. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel dealt with the matters required to be addressed in determining whether leave should be given under clause 12. 2. Clause 12 requires the Appeal Panel to be satisfied that the Appellants may have suffered a substantial miscarriage of justice. That expression refers to a failure in the way a matter was conducted or decided which deprived the Appellants of a chance that was fairly open of achieving a better outcome than occurred: see [71] Collins v Urban. At [76] in Collins v Urban it was held that it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in clause 12(1)(a), (b) or (c) 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 Appellants had the relevant circumstance in paragraph (a) or (b) not occurred, or if the fresh evidence under paragraph (c) had been before the Tribunal at first instance. 3. In this case, the Appellants rely upon paragraph (b), namely that the Decision was against the weight of evidence. This refers to a case where the evidence "in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach: see [77] in Collins v Urban. 4. If the Appeal Panel is satisfied that the Appellant for leave to appeal may have suffered a substantial miscarriage of justice, then the Appeal Panel "may" grant leave under s 80(2)(b) of the NCAT Act. However, in order to be granted leave to appeal, the Appellants must demonstrate something more than that the primary decision-maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: see [84] in Collins v Urban. In the same paragraph, the Appeal Panel held 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 manner that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. 1. In this appeal the Appellants either require leave under clause 12, for reasons which we will elaborate upon later, or do not require leave because they assert that there has been an error of law. Ground 1 (concerning the assertion that the Decision was against the weight of evidence) requires leave. The other grounds assert errors of law. 2. It is necessary to deal with the grounds of appeal by reference to each of the individual matters raised by the Appellants. We will firstly deal with the defects claims, then with the variation claims, then the claim concerning Termimesh and finally Item 6. 3. Item 1: in relation to this defect, the Tribunal preferred the evidence of Mr Ledgerwood (the Builder's expert) over the evidence of Mr Kyle (the Homeowners' expert). One reason given was that Mr Kyle's evidence "does not contain the detailed itemisation of the costs of the aspects of this item"[27]. In our view the reason given for preferring the opinion of Mr Ledgerwood is adequate and no error of law arises. This ground does not otherwise raise a question of law and is an appeal on a question of fact regulated by the provisions of cl 12 (set out earlier in this decision). In our view the requirements of clause 12 of have not been satisfied. There is no clear injustice and the other criteria referred to in the Collins v Urban have not been met. Accordingly, this ground of appeal is rejected. 4. Item 4: in relation to this claim, the Tribunal accepted the evidence of the Homeowners' expert and accepted most (but not all) of the components of that evidence: see [44] and [47]. The Tribunal rejected the claim for the pool leak test ($2,000) and the sum of $400 for treatment of the leak when found. The Tribunal was not persuaded that there was in fact a leak or that such leak (if it existed) was caused by the Builder [42]. To the extent that the appeal objects to the rejection of those two items no error of law arises and leave to appeal is required on the basis set out in clause 12. For the same reasons as are applicable to item 1, this aspect of item 4 is also rejected as a basis for appeal. 5. The second aspect of the Appellants' appeal concerning item 4 concerns the reduction in the amount awarded to $1,000 (being 10% of the cost based upon the rest of Mr Kyle's evidence). The reduction was explained in [47] in which the Tribunal said it would not be reasonable to provide the Homeowners with "new for old". It is commonly accepted that when assessing damages, the requirement is to attempt to put the claimant in the same position as they would have been in had the breach of contractual obligations not occurred. When the damaged property (in this case the surface of the swimming pool) is old and the cost of rectification would have the effect of providing to the claimant a new surface, as opposed to a surface that was of the same age as the damaged surface, then a reduction in the award may be appropriate and reasonable. The relevant principles are explained in Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency P/L and Anor [2001] NSWCA 313.In that case at [40] the Court cited an earlier judgment in which Moffitt P said that the assessment of damages is a question of fact in each case. The Court said that there will be cases where some reduction in the amount of damages awarded is appropriate as otherwise the plaintiff will receive new for old (that is, betterment ).See [28]. In our view the Tribunal applied the correct approach to the calculation of damages in that the Tribunal considered facts relevant to the assessment of damages. Those facts were: the fact that the surface of the pool was well over a decade old and the matters for which the Builder was responsible were isolated and not extensive [47]. 6. To the extent that the Homeowners complain about the extent of the reduction (namely 90%), that can be explained by the age of the pool. The older the pool, the less future life it has and the percentage reduction is justifiably greater than would be the case had the same damage occurred with respect to a much newer pool (having a commensurately longer life before it). This approach to the assessment of damages was approved in Hyder at [52] and [55].The Court was not in favour of making a percentage discount [55] and[107] as occurred here. However in our view the Tribunal here was limited, as to how it should reduce the amount awarded for betterment, by limitations in the available evidence [48] and therefore the reduction in the amount to 10% of the cost was a finding that was open to it. Again, there is no error of law in the Tribunal's approach to the calculation of damages. Nor is there a basis under cl12 to grant leave. This ground of the appeal is rejected. 7. Item 5: this item concerns the external pavements and, as the Decision records, it involved the consideration of several different aspects such as lippage, an alleged inadequate fall, efflorescence, drummy tiles, thickness of grout and colour differences in grout. At [74] the Tribunal recorded that it proposed to consider the cost of the aspects making up the defective work under this item that were found to have been proven. The Tribunal then compared the evidence of Mr Ledgerwood and Mr Kyle and, on balance, preferred the components of the claim put forward by Mr Ledgerwood. In our view the contentions of the Appellants do not raise any question of law and are rather complaints about the acceptance of evidence and the rejection of other evidence by the Tribunal. Again, an appeal on such a basis requires leave under clause 12. For the reasons applicable in relation to the other claims it is our view that there is no basis to grant leave. The criteria referred to in Collins v Urban have not been met. 8. We will now deal with the contentions concerning variations. 9. It was said in Liebe v Molloy that in order to establish a claim in quantum meruit three findings of fact need to be made: first, that the Homeowners had actual knowledge of the extra work as it was being done , secondly that the Homeowners knew that the extra work was outside the contract and thirdly that the Homeowners knew that the Builder expected to be paid for the extra work. Here the Homeowners concede the first element but dispute the remaining two. 10. The Decision makes reference to these requirements at [87]. At [88] the Tribunal found that the "tests" above referred to are satisfied in relation to the claimed variations. The Homeowners contest those findings of fact and, in addition, assert that the Decision is inadequate in its articulation of the reasons. We agree with the Homeowners. In our view, it is insufficient for the Tribunal to have concluded that, based upon its review of the "available evidence, it is satisfied that the tests in Liebe v Molloy have been satisfied. The factual basis for that satisfaction is not articulated and therefore, in our respectful view, the reasons are inadequate. We are not in a position to make findings of fact in relation to the two categories of factual matters in contention. It follows from this conclusion that the claim for variations will need to be remitted to the Consumer & Commercial Division for rehearing. 11. Termimesh: The basis for the Homeowners appeal is that the Tribunal ignored evidence from the Homeowners that the Termimesh was visible. The Tribunal's findings on this issue are at [96]. The Tribunal found that the Termimesh was not disclosed to the Builder. There was no evidence that the Termimesh was so visible or so obvious that disclosure by the Homeowners was unnecessary. In our view notwithstanding the Homeowners' evidence, the finding of non-disclosure made by the Tribunal was still open to it. There is no error of law in relation to the Tribunal's conclusions on this issue, nor any cl12 ground. 12. In conclusion, the order requiring the Homeowners to pay to the Builder the sum of $2,978.30 should be set aside because it is the result of a number of calculations including giving credit to the Builder for the claim for variations totalling $8,826.97. However, in respect of the Homeowners' claim against the Builder which has resulted in an order requiring the Builder to pay to the Homeowners $15,260.52, it is our view that the Homeowners have not succeeded in establishing any ground for that amount to be increased. The Builder conceded that in respect of item 6 the Homeowners should receive an additional $271.20. Therefore the order in favour of the Homeowners must be increased by that amount to $15531.72. 13. The orders made by the Tribunal below contain a typographical error in that in relation to orders (1) to (4) in the Tribunal proceedings the proceedings were incorrectly referred to as numbered "HB 20/00638" , whereas those proceedings were in fact bore the number HB20/13402. ORDERS 1. The orders that we make having regard to the above conclusions are these: 1. The appeal is dismissed except to the extent of the orders that follow. 2. Orders 1 to 4 (inclusive in proceedings HB 20/13402 incorrectly stated as 20/00638) are affirmed except that the amount in Order I is increased to $15531.72. 3. Orders 1 and 2 made in proceedings HB 20/00638 are set aside. 4. Proceedings HB 20/00638 are remitted to the Consumer & Commercial Division for a rehearing based upon the evidence filed and served in those proceedings and without any new evidence being relied upon (unless both sides so consent) for the sole purpose of considering the amount of the claim for variations brought by the Builder but otherwise based upon the figures in [99] of the decision under appeal, (namely contract sum, adjusted contract sum, agreed credits, disputed credits, amount payable and less amount paid) which are not to be the subject of further dispute between the parties. 5. Either party may file and serve submissions with respect to costs of the appeal, provided that such submissions are filed and served within 14 days. 6. A party receiving submissions claiming costs has a further period of 14 days to file and serve submissions in reply. 7. The submissions with respect to costs of the appeal should include submissions as to whether the Appeal Panel may determine costs of the appeal on the papers and dispense with a further hearing. ********** 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: 22 December 2021