Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Brennan v Building Zone Constructions Pty Ltd [2022] NSWCATAP 96 Hearing dates: 28 March 2022 Date of orders: 31 March 2022 Decision date: 31 March 2022 Jurisdiction: Appeal Panel Before: G Ellis SC, Senior Member P Molony, Senior Member Decision: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. Order 2, made by the Tribunal on 22 December 2021 in matter HB 21/07056, is set aside. 4. The matter is remitted to the Consumer and Commercial Division of the Tribunal for determination by another member, confined to the issue of quantum in relation to the respondent's quantum meruit claim. 5. The respondent is to pay the appellants costs of the appeal. 6. If any party wishes to contend that a different order should be made in relation to the costs of the appeal then: (a) Order 5. shall no longer apply. (b) Any submissions in support of that different order are to be provided, to the other party and the Tribunal, within two (2) weeks of the date of these orders. (c) Any submissions in reply are to be provided, to the other party and the Tribunal, within two (2) weeks thereafter. (d) The parties are to indicate in any such submissions whether they agree that costs should be determined on the papers, ie without a further hearing. Catchwords: APPEAL – Failure to consider evidence of one party on the issue of quantum – Decision not fair and equitable Legislation Cited: Civil and Administrative Rules 2014 Civil and Administrative Tribunal Act 2013 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 Mann v Paterson Constructions Pty Ltd [2019] HCA 32 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWVATAP 39 Category: Principal judgment Parties: Gabrielle Brennan and Garin Clarke - Appellants Building Zone Constructions Pty Ltd - Respondent Representation: Colin Biggers & Paisley (Appellant) Mr D Murray (Respondent) File Number(s): 2022/0016187 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 December 2021 Before: R Notley, Senior Member File Number(s): HB 21/07056 reasons for decision Introduction 1. This appeal arises from an application that was lodged in the Commercial and Consumer Division of the Tribunal on 16 February 2021 and heard on 22 July 2021. Orders were made and reasons were published on 22 December 2021. The Tribunal ordered the owners to pay the builder $126,542.16 within twenty-eight (28) days. 2. Accordingly, the owners, who were the respondents at first instance, are now the appellants and the builder, who was the applicant at first instance, is now the respondent to this internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act). 3. There are three issues raised in this appeal: (1) whether the decision at first instance was not fair and equitable, (2) whether that decision was against the weight of the evidence, and (3) if either or both those issue are decided in favour of the appellant, whether leave to appeal should be granted. 4. For the reasons set out below, we have decided to allow the appeal and remit the proceedings for determination on quantum only (not liability) by a differently constituted Tribunal. With a view to avoiding delay, the orders include directions to prepare for that rehearing in addition to order to enable the question of the costs of the appeal to be considered. Background 1. On or about 24 March 2015 the appellants (the owners) entered into an agreement with RBL Industries Pty Ltd as trustee for the RLE Family Trust trading as Oxide Design (Oxide) for Oxide to provide services in connection with the design and construction of the appellants' new home. This agreement included contract administration and, specifically, a provision that Oxide would act as the owners' agent during the construction phase. 2. Around 9 August 2016 the owners entered into an agreement with Modulum Homes Pty Ltd (Modulum) for the supply of a kit home for $296,965.68 which agreement did not include construction of that kit home at the owners' Rozelle property. On or about 1 September 2016 the owners entered into an agreement with Davines Pty Ltd (Davines) for the construction of that kit home for $405,966.99. At about that time the then existing home was demolished so that construction of the kit home could commence. 3. On 27 April 2019 the owners received a text message from Oxide's Mr Little, advising that another builder, had been engaged to take over the work from Davines, namely Building Zone Constructions Pty Ltd, the respondent. 4. Subsequently, the respondent issued three invoices which were paid: (1) invoice F42 for $20,301.27 dated 28 May 2019, (2) invoice F43 for $44,019.41 dated 28 May 2019, and (3) invoice F44 dated 3 June 2019 for $45,895.19. The total of those three amounts is $110,215.87. 5. Four further invoices were issued by the respondent: (1) invoice F45 dated 17 June 2019 for $32,895.88, (2) invoice F44 dated 1 July 2019 for $35,261.30, (3) invoice 1864673 dated 15 July 2019 for $37,413.77, and (4) invoice 46 dated 27 July 2019 for $11,362.70. The total of those four amounts is $116,933.65. 6. It is noted that each of the amounts set out above is inclusive of GST. 7. On 14 September 2019 the respondent stopped work due to non-payment of invoices and the owners had the work completed by another builder. The respondent commenced proceedings claiming $116,933.65 in respect of those four unpaid invoices. 8. However, as there was no written contract between the owners and the respondent, the builder was only entitled to recover on a quantum meruit basis. An amount of $126,542.16 was awarded. That amount was based on Mr Madden's assessment of what he considered to be a reasonable cost for the work performed by the respondent less the total amount paid in respect to the three invoices listed above. 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. As the notice of appeal in this instance did not allege any errors of law, it is only necessary to consider matters which may warrant granting leave to appeal. 2. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited by cl 12(1) of Schedule 4 of the NCAT Act. The Appeal Panel must be satisfied the appellant may have suffered a substantial miscarriage of justice in 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). 1. 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. 1. 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). 2. In Collins, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. 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; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. 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 the following: * The Notice of Appeal lodged on 19 January 2022. * The Reply to Appeal lodged on 25 January 2022. * Submissions for the appellant lodged on 7 March 2022. * Submissions for the respondent lodged on 4 March 2022. * Submissions in reply for the appellant lodged on 18 March 2022. Notice of Appeal 1. The Notice of Appeal was lodged on 19 January 2022, which is within of the 28-day period specified in cl 25(4) of the Civil and Administrative Tribunal Rules 2014 (the Rules). Grounds of Appeal 1. The grounds of appeal specified in the Notice of Appeal are: 1. The Tribunal's decision was not fair and equitable as the Tribunal did not consider any of the quantum evidence put forward by the Appellants. 2. The Tribunal's decision to award the Respondent $126,542.16 was against the weight of the evidence. 3. There are mathematical errors and other errors in the calculation of the $126,542.16. 1. For convenience, those matters will be referred to as Grounds 1, 2 and 3. 2. The orders sought in the Notice of Appeal are: 1. The appeal be allowed. 2. The Appellant's (sic) owe Building Zone Constructions $0. 3. Alternatively, the proceedings are to be remitted to NCAT for determination. 4. Costs of the appeal and the proceedings are to be awarded to the Appellant. 1. Owner's submissions 2. It was contended that the respondent was not entitled to recover on a quantum meruit basis, being an issue going to liability and not just quantum. However, as that point was not raised either at first instance or in the Notice of Appeal, it is not necessary to further consider that contention other than to note that the Tribunal is satisfied there was an ample evidentiary basis for the finding and that no error of law is evident on that issue. 3. An appeal to the Appeal Panel does not provide a losing party in the Tribunal below with the opportunity to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWVATAP 39 at [10]. As the Tribunal's Guideline 1, Internal Appeals (which can be found on the Tribunal's website) relevantly states: "an appeal is not an opportunity to have a second go at a hearing". 4. The Tribunal notes that the purpose of an appeal is to either establish an error of law of a miscarriage of justice which warrants a grant of leave to appeal, not to re-run the hearing by either revisiting issues which were raised and found against the appellant without any basis for appeal or raising issues which could and should have been raised at the first instance hearing. 5. Reference was made to paragraphs in the reasons published on 22 December 2021, which notably contain, in [67], the words: "The Homeowners adduced no evidence with respect to quantum and Mr Madden was not required for cross-examination." 6. The Tribunal's attention was directed to evidence going to quantum which the owners had provided at first instance, namely: 1. a report from MDA Australia Pty Ltd dated 6 December 2019, 2. the appellant's record of costs, and 3. a letter from Northern Beaches Constructions Lawyers dated 17 September 2019 and emails said to have been attached to that letter. 1. Reference was also made to a report from MDA Australia Pty Ltd dated 25 February 2022 which was said to constitute fresh evidence in that it provided "more detail". However, in the context of an appeal, fresh evidence is not evidence which a party obtains after the hearing with the aim of supporting its case on appeal: fresh evidence is evidence that only came to a party's attention after the hearing that was not reasonably obtainable prior to that hearing. 2. The Appeal Panel did not consider the 25 February 2022 report of MDA Australia Pty Ltd as it does not constitute fresh evidence but new evidence and represents an attempt by the appellants to rerun their case, this time with the benefit of additional evidence. 3. Builder's submissions 4. Mr Murray told the Tribunal that recovery on a quantum meruit basis was raised by the respondent during the hearing and was not something which was raised for the first time in the Tribunal's reasons published on 22 December 2021. 5. He referred not only to the report from Mr Madden, upon which the respondent relied as to quantum, but also to the quantity surveyor's report which formed part of the appellants' evidence at first instance. 6. Mr Murray complained that the respondent had been subject to three hearings: the initial hearing, the hearing of the stay application, and the hearing of the appeal. Consideration 1. The position in relation to this appeal is clear because there was evidence upon which the appellants relied in relation to quantum that was placed before the Tribunal and there can be no doubt that such evidence was not considered by the Tribunal at first instance. 2. Accordingly, the decision at first instance with respect to quantum cannot be allowed to stand as it is plainly not fair and equitable for a decision to be based on the evidence of one party when the evidence of the other party does not form part of the decision-making process upon which the outcome is based. 3. It is therefore not necessary to consider whether the decision was against the weight of the evidence, and it is not for the Appeal Panel to weigh up the evidence of the parties on quantum. In other words, it is not that the decision was against the weight of the evidence in that the appellants' evidence carried more weight than that of the respondent: rather, that there was a failure to consider the evidence of the appellants on quantum. 4. The matters raised by Mr Murray in his oral submissions for the respondent, notably comparing the evidence of the parties on the issue of quantum, are matters which should have been covered in the reasons upon which the order for the payment of $126,542.16 was based. 5. Although it was also suggested "There are mathematical errors and other errors in the calculation of the $126,542.16", it is not necessary to consider that aspect. 6. In short, Ground 1 has been established and it is therefore not necessary to consider either Ground 2 of Ground 3. However, it remains to consider whether leave to appeal should be granted. By reference to what was said in Collins, there are three reasons why leave should be granted: (1) it would ne unjust to allow the finding on quantum to stand, (2) there was a factual error, namely that there was no evidence on quantum from the appellants, and (3) the failure to consider the appellants' evidence on quantum has created a situation the unfairness of which is such that the interests of justice warrant its review. 7. It is also clear the Appeal Panel is not able to determine the question of quantum with the result that it will be necessary for there to be a rehearing before a different member of the Tribunal. It is desirable that the documents upon which the parties rely at that hearing be confined to the issue of quantum. The Tribunal has that the respondent will need three weeks to prepare its documents and the appellants will need two weeks to prepare their documents. 8. There are observations that should be made for the assistance of the parties. First, that any expert report should provide an indication that its author has read and agrees to be bound by the Tribunal's code of conduct for expert witnesses (found in Procedural Direction 3, available on the Tribunal's website). Secondly, that any expert report should indicate the author, be signed, dated, and contain details of his qualifications and experience. Thirdly, that an expert witness should state both the factual matters upon which any opinion is based and either the reasons or process of reasoning which led to that opinion: being matters covered in the judgement of Heydon JA (as he then was) in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305. Fourthly, that the decision of the High Court in Mann v Paterson Constructions Pty Ltd [2019] HCA 32 warrants consideration as it suggests the contract amount, in this case the total of the four invoices, provides an upper limit to the amount recoverable on a quantum meruit basis. 9. It is also necessary to make orders to enable the question of the costs of the appeal to be finalised. 10. Conclusion 11. For the reasons indicated above, the orders that will be made are as follows: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. Order 2, made by the Tribunal on 22 December 2021 in matter HB 21/07056, is set aside. 4. The matter is remitted to the Consumer and Commercial Division of the Tribunal for determination by another member, confined to the issue of quantum in relation to the respondent's quantum meruit claim. 5. The respondent is to pay the appellants costs of the appeal. 6. If any party wishes to contend that a different order should be made in relation to the costs of the appeal then: 7. (a) Order (5) shall no longer apply. 8. (b) Any submissions in support of that different order are to be provided, to the other party and the Tribunal, within two (2) weeks of the date of these orders. 9. (c) Any submissions in reply are to be provided, to the other party and the Tribunal, within two (2) weeks thereafter. 10. (d) The parties are to indicate in any such submissions whether they agree that costs should be determined on the papers, ie without 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: 31 March 2022