Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Life Structures Pty Ltd v Burton [2022] NSWCATAP 272 Hearing dates: 8 August 2022 Date of orders: 23 August 2022 Decision date: 23 August 2022 Jurisdiction: Appeal Panel Before: G Ellis SC, Senior Member J S Currie, Senior Member Decision: 1 Leave to appeal is refused. 2 The appeal is dismissed. 3 Subject to order 4, the appellant is to pay the respondent's costs of the appeal, on the ordinary basis, as agreed or assessed. 4 If either party seeks a different costs order, the following orders apply: (1) Order 3 above ceases to have effect. (2) Any application for a different costs order is to be filed and served, supported by evidence and submissions not exceeding five pages in length, within 14 days of the date of these orders. (3) Any response to an application for a different costs order is to be filed and serve, with evidence and submissions not exceeding five pages in length, within 14 days thereafter. (4) Any material in reply is to be filed and served within seven days thereafter. Catchwords: BUILDING AND CONSTRUCTION – Whether s 18G of the Home Building Act 1989 (NSW) operated to render void or read down a contractual provision APPEAL – Whether decision against the weight of the evidence – whether to grant leave to appeal Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2013 (NSW) Home Building Act 1989 (NSW) Cases Cited: Antico v CE Heath Casualty & General Insurance Ltd (1996) 38 NSWLR 681 at 696 Australian Broadcasting Commission v Australian Performing Rights Association Ltd [1973] HCA 36 Bellgrove v Eldridge [1954] HCA 36 Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302 Browne v Dunn (1893) 6 R. 67, HL Cappello v Hammond & Simonds NSW Pty Ltd [2020] NSWSC 1021 Cappello v Hammond & Simmonds (NSW) Pty Ltd [2021] NSWCA 57 Collins v Urban [2014] NSWCATAP 17 Cypressvale Pty td v Retail Ship Leases Tribunal [1996] 2 Qd R 462 Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7 Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206 Trustees Executors and Agency Co. Ltd v Riley [1941] VLR 110 Whisprun Pty Ltd v Dixon [2003] HCA 48 Texts Cited: None cited Category: Principal judgment Parties: Appellant – Life Structures Pty Ltd Respondent – Craig Burton Representation: Counsel: A Awad (Appellant) G Farland and P Lin (Respondent) Solicitors: Holman Webb (Appellant) HWL Ebsworth (Respondent) File Number(s): 2022/00050869 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 23 January 2022 Before: G Burton SC, Senior Member File Number(s): HB 20/50617 reasons for decision Introduction 1. This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 23 January 2022. The application to the Tribunal was brought by the respondent-owner, against the appellant-builder. 2. The issues in the appeal are (1) whether there was an error of law, (2) whether the decision was not fair and equitable, (3) whether the decision was against the weight of the evidence, and (4) if either (2) or (3) are established, whether leave to appeal should be granted. 3. For the reasons set out below, we have decided that no error or law has been demonstrated and that leave to appeal should be refused. Background 1. The application to the Tribunal was lodged on 4 December 202. The matter was listed for final hearing on 6 August 2021 but required a second hearing day. After the hearing was completed on 5 October 2021, the Tribunal's reasons for decision were published on 23 January 2022. 2. The Tribunal relevantly found that the cost of remediation was $59,763.20 which, after the addition of 15% for preliminaries, a builder's margin of 25% and GST became $94,500.56. Amounts of $3,838 for mirror glass repairs and $1,200 for rent increased that amount to $99,538.56. Deducting the balance owing to the appellant of $10,162 resulted in a money order being made against the appellant, in favour of the respondent, for $89,376.56 plus costs. Scope and nature of internal appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2) NCAT Act. 2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it. 1. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 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: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. Submissions 1. In deciding the appeal, we have had regard to the following: * the Notice of Appeal, received on 21 February, * the Reply to Appeal received on 28 February, * the amended grounds of appeal and submissions, received on 30 May, * the respondent's submissions, received on 18 July, and * three folders of documents submitted by the appellant on 4 August. Notice of Appeal 1. The Notice of Appeal was lodged on 21 February 2022, which within the 28-day period specified in r 25 of the Civil and Administrative Tribunal Rules 2014 (the Rules). Grounds of Appeal 1. The grounds of appeal specified in the amended grounds of appeal are: (i) The Senior Member erred on a question of law by reading down the terms of Cl 36.2(C) and (e) by reference to s18G of the Home Building Act 1989 (NSW). (ii) The Senior Member erred (on a question of law) in a process of reasoning in finding at [88] competing hypothesis of water ingress causing water damage. Particulars a. The Senior Member found that it was more probable than not that the water entry through the agreed defective work in respect of the roof decking was a cause of the internal damage even if there was another possible and pre-existing cause. b. The Senior Member also found that inadequate sealing of the flue was also a cause of water damage. c. Insofar as the Senior Member concludes that the inadequate sealant around the flue was a cause of the internal water damage, the finding such liability is sheeted home to the Builder is without evidence. d. Insofar as the Senior Member concludes that water entry was the result of the defective roof flashing that is against the weight of the evidence. (iii) In the alternative to (i), by way of leave, the findings made were against the weight of the evidence. (iv) The Senior Member erred on a matter of law, by awarding damages in respect of water damage to the floor when the claim was abandoned by the respondent. Particulars a. See points of claim and transcript Qn 417 CB153 (v) In the premises: 1. The Senior Member erred in awarding $16,420 in respect of the Entertainment unit. 2. The Senior Member erred in awarding $10,006 in respect of the indoor flooring in front of the Entertainment unit. (vi) The Senior Member erred by making the following findings without evidence, or in the alternative against the weight of the evidence in awarding a. $10,476 in respect of the Outdoor flooring; b. $11,840 in respect of the Bifold glass doors; c. damages for a damaged mirror in the amount of $3,838; and d. 60 hours of labour costs by reference to the allowance for tradesman (sic) to park their vehicles. (vii) The Senior Member erred in awarding temporary accommodation costs and the amount should be reduced if the grounds are successful. 1. It is convenient to refer to those matters as paragraphs 1 to 7. In the appellant's submissions in reply, it was said that "the issues underpinning the appeal are as follows": First, the implication of s18G on the terms [of] clauses 36.2(C) and (e) of the Contract. Second, the Tribunal's finding with respect to the source of water ingress and the consequential implications on (i) The award of $16,420 in respect of the Entertainment unit; (ii) The award of $10,006 in respect of the indoor flooring in front of the Entertainment unit Third, the Tribunal's evidentiary findings with respect to: $10,746 in respect of the Outdoor flooring; $11,840 in respect of the Bifold glass doors; damages for a damaged mirror in the amount of $3,838; and an allowance of 60 hours of labour costs by reference to the allowance for tradesman (sic) to park their vehicles. Fourth the Senior Member erred on a matter of law, by awarding damages in respect of the water damage to the floor in front of cabin when the claim was abandoned by the respondent. 1. It is convenient to refer to those matters as Grounds 1 to 4 respectively. Appellant's written submissions 1. In relation to Ground 1, it was submitted that there was misplaced reliance on what was said in Cappello v Hammond & Simonds NSW Pty Ltd [2020] NSWSC 1021 (Cappello) and that the effect of paragraphs (c) and (e) in clause 36.2 of the contract was not to convert a substantial right of damages into a nominal one and that those contractual provisions had "a legitimate basis in the freedom of contract". 2. It was suggested that error affected the awards made in respect of (1) the entertainment unit, (2) the indoor flooring, (3) outdoor marble tiling, (4) northern bifold doors, and (5) internal wall issues. 3. Under the heading "Summary of findings", reference was made to findings that defective work in respect of the roof decking was a cause of internal damage and that inadequate sealing of the flue caused damage to the plasterboard ceiling. It was submitted that the findings at [88] did not reveal the process of reasoning with the result that such findings were not supported on the balance of probabilities. A finding that defective roof flashing was a cause of water ingress was said to be against the weight of the evidence. Further, that the conclusion that inadequate sealant around the flue caused internal water damage could not be attributed to the appellant and was thus either without evidence or was against the weight of the evidence. 4. After referring to the evidence of Mr Burton (the respondent) and Mr Farrugia (the appellant's representative), the Tribunal's attention was directed to the first instance decision at [72], [77], [83] and [84]. It was then submitted that, despite the evidence referred to, the decision had "concluded that the agreed roof defect was the cause of water entry, notwithstanding that there might be an additional cause". Further, in relation to the flue, that "there was no evidence to suggest that cause of the water leaks from the flue was inadequate sealant, being a problem caused or contributed by the builder". 5. It was contended, following reference to aspects of the evidence, that the first instance finding overlooked evidence of the appellant's expert that "the water damage to the entertainment unit seems to be more likely from the flue as opposed to what has been entering around the stair shaft" and that the respondent's expert agreed with that conclusion. 6. In the appellant's written submissions, at [4.34], there appears what purport to be a lengthy quotation from the appellant's closing submissions at first instance. However, there are areas, denoted by "?", where what was said is unclear and the last sentence of the quotation appears to be a sentence that should instead be part of the appeal submissions. 7. It was said that Ground 2 affected the conclusion in relation to both the entertainment unit and (indoor) flooring. 8. As to Ground 3, it was submitted the factual findings in relation to the mirror, outdoor tiling, bifold doors, and labour costs for the rectification work were either without evidence of were against the weight of the evidence and that those aspects were resolved by "inferential leaps bound up in speculation". 9. Submissions in reply addressed the question of leave. Grounds 1 and 4 were said to involve questions of law. It was contended that, by reference to what was said in the respondent's closing submissions at first instance, there could be no ambiguity that Ground 4 related to a claim that was abandoned. 10. As to Grounds 2 and 3, it was suggested that, since it was contended the challenged findings were made without evidence, being a question of law that did not require leave, and alternatively that they were against the weight of the evidence, which did require leave, "the Appeal Panel must embark on a detailed assessment of the evidence and findings to establish whether or not the gateway requirement of leave is required." 11. The appellant's case was summarised in the following propositions that there was no basis either that water ingress was due to inadequate sealant or that any such inadequacy was due to the appellant's conduct, and that the findings in relation to 60 hours of labour cost, the mirror and the bifold doors were speculative and without foundation. It was contended that the appellant was entitled to rely on the respondent bearing the onus of proof. 12. On the question of the relationship between s 18G of the HBA and paragraphs (c) and (e) of clause 36.2 of the contract, it was said that paragraph (c) was only concerned with the cost of repainting the plasterboard ceiling which was not being challenged and that it was submitted at first instance that the only impact of paragraph (e) was to render the appellant not responsible for (1) colour matching the entertainment unit, (2) providing new for old indoor flooring, (3) providing new for old outdoor flooring, and (4) providing extensive, new for old, repairs to the bifold doors. On that basis, it was submitted that those two paragraphs did no more than restate the common law principle of betterment. Appellant's oral submissions 1. The oral submissions for the appellant, after referring to the summary set out in the reasons at [5], suggested that the only application of paragraph (c) of cl 36.2 was in relation to repainting and that paragraph (e) only operated to prevent 'new for old' by putting the onus of proof on the respondent to establish that it was not possible to repair, only replace. It was indicated there was no challenge in relation to the plasterboard ceiling, only to the entertainment unit and the indoor flooring. 2. By referring to the photo at A843 (ie page 843 in the three volumes of documents submitted by the appellant on 4 August 2022), it was made clear that the appellant's case is that the work agreed to be defective was in the vicinity of the area of damaged plasterboard ceiling and that the damage to the entertainment unit and indoor flooring, by reason of it being in a separate location, was the result of either a pre-existing condition or the flue. It was submitted that, in the reasons at [88], the second sentence was contrary to an agreed fact and was a conclusion which contained an error in reasoning and/or a failure to give adequate reasons. Further, that any finding that water entering through the flue was a second cause was either without evidence or was against the eight of the evidence. 3. By reference to the respondent's statement, it was conceded that there was some water behind the entertainment unit on 10 April 2019 (A465 at [18] and A521) but it was noted there was nothing to suggest that was communicated to the appellant at that time, unlike in June 2019 (A465 at [19]-[20]). The Tribunal was taken to the evidence of the appellant's Mr Farrugia in response (A601-602 at [38]-[46]). The finding that the appellant had not sealed the flue prior to 10 April 2019, in the reasons at [72], was contested. It was noted that the respondent agreed that water had entered through the flue (A536 at [31]). 4. Further, it was submitted there was a disconnect between the finding at [72] of the reasons and the evidence of the respondent (A233 at [1131]-[1135]) and Mr Farrugia (A255-258 at [1535]-[1593]), the distinction advanced being that Mr Farrugia worked near the flue but did not touch the flue with the result that a finding that there was inadequate sealant was a finding made either without evidence or against the weight of the evidence. Reference was made to the appellant's written submissions at [4.13]-[4.34]. 5. It was suggested that Ground 4 should be uncontroversial as the audio recording of Mr Burton's cross-examination had been circulated and as the Points of Claim did not allege water damage to the indoor flooring. In relation to that item in the joint report, it was said that while the experts had dealt with that claim, they provided no details as to the cause of that damage. 6. There was also a submission that the appellant was denied procedural fairness because no questions were asked of Mr Farrugia in relation to water damage to the floor and reference was made to what was said in closing submissions at first instance by the appellant's counsel A385 at [3650]). 7. As to the scratches on the indoor floor, reference was made to photos taken before and after the subject work (A653-657 cf A711-712). After referring to the report of the appellant's expert (at A799), it was contended (1) it was not possible to discern a before v after difference, (2) the entire floor did not need to be replaced, and (3) paragraph (e) of cl 36.2 operated to require the respondent to show it was not possible to repair to justify replacement. 8. The next topic addressed was Ground 3 and the Tribunal was taken to the reasons at [135]-[142]. It was said that, at [141] it was accepted there was a possibility a beam slipped but no finding that occurred. Further, that the proposition that a beam slipped was never put to Mr Farrugia when he gave evidence. Reference was made to the submissions of the respondent (at A379) which appeared to be in the form of evidence, and to what was said during the closing submissions for the appellant (A393-394 at [3781] and [3820]). The evidence of Mr Farrugia on the outdoor flooring was also referenced (A260 et seq and A270-271) and it was submitted that there was no evidence to support a finding that there were cracks attributable to the appellant. 9. As to quantum, again an award of damages of $10,476, based on replacing all tiles, was questioned and paragraph (e) of cl 36.2 was also referred to, the appellant's case being that the amount awarded was extravagant and disproportionate. 10. The position in relation to the bifold doors was said to be similar and that the finding appeared to be based on inferences drawn from what might be termed before and after photos (A77-579, A671-673, A731-732). It was contended that the respondent agreed the doors were not in ideal condition, that it was no difference was evident and that the amount awarded was disproportionate. 11. In relation to the mirror, it was suggested that it had been in the same position for six months, that cl 36 of the contract (dealing with access) applied, and that no reason was provided as to why the respondent moved the mirror. 12. On the topic of the entertainment unit, it was submitted that a consideration of colour matching offended paragraph (e) of cl 36.2 and there was no reasoned basis provided in relation to this item. 13. The allowance of 60 hours of labour for roof deck repairs was also said to be extravagant, even having regard to the reason provided (A339 at 2987). 14. It was suggested that the total of the reductions that should be applied was $49,012. However, since that appeared to be an amount that did not include allowances for preliminaries, builder's margin and GST, counsel for the appellant was asked to clarify that figure, its composition being neither apparent nor explained. Respondent's written submissions 1. The chronology suggested in the respondent's written submissions was that on 14 November 2018 preparatory work began, on 26 February 2019 the work on the deck was commenced, on or about 20 November 2019 the work was completed, and on 4 December 2020 the application was lodged. A table was provided, setting out the issues, the findings, and the page references. 2. As to Ground 1, it was contended the reasons now challenged did not rely on Cappello but only referred to it. It was noted the reasoning at first instance as to s 18G of the HBA was not challenged when that case was taken to the Court of Appeal. 3. Reference was made to Antico v CE Heath Casualty & General Insurance Ltd (1996) 38 NSWLR 681 at 696 which approved what was said Trustees Executors and Agency Co. Ltd v Riley [1941] VLR 110: The words "in respect of" are difficult of definition, but hey have the widest possible meaning of any expression intended to convey some connection or relation between the two subject matters to which the words refer. 1. It was submitted that the fact that cl 36.2 of the contract would operate to constrain a right in relation to the breach of a statutory warranty provided by s18B of the HBA was sufficient for s 18G to operate. Further, that the first instance decision on this point was correct since (1) the finding that there was defective work was the result of the appellant's failure to take reasonable care, (2) paragraph (c) of cl 36.2 operated to limit the appellant's responsibility for defective work performed without due care and skill, and (3) the same reasoning applied to paragraphs (b) and (e) of cl 36.2. 2. The Tribunal was reminded that decisions, such as Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7 and Australian Broadcasting Commission v Australian Performing Rights Association Ltd [1973] HCA 36, indicated the need to consider the entire contract, notably cl 39, cl 40 and cl 43, and not just cl 36.2. Reference was also made to Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302 in which the operation of s 18G of the HBA was considered. 3. Turning to the matters which required leave, what was said in Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206 at [27] were quoted (with citations omitted): Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is reasonably arguable. It is well established that it is not sufficient to show that the trial judged was arguably wrong. 1. It was observed that the appellant took issue with the reasons at [88], which are quoted below: When that is done, I conclude that it is more probably than not that water entry through the defective work in respect of the roof decking was a cause of the internal water damage even if there was another possible and pre-existing cause. I also find that inadequate sealing of the flue by the builder at or shortly after 10 April 2019 was also a cause of water entry and damage to the plasterboard ceiling, but the first reason is sufficient in itself. 1. The submissions noted the following findings relevant to that conclusion, inserting the relevant paragraph references: a. There appeared to be photographic evidence that the builder had worked on the roof before the 10 April 2019 and had not sealed the flue [72], b. At the time of hearing, it was an agreed fact between the experts that the roof deck flashing was defective work [73], c. The experts agreed that defective roof flashing allowed rainwater to enter the dwelling below at the two locations where the structural support beams intersected the stairwell [74], d. both sides' experts agree[d] that the ceiling was sagging due to water damage [81], e. the builder's expert could not exclude the possibility that the water entry causing the interior damage was from the stair shaft and roof deck defective sealing, even if there was another source of water ingress [86]. 1. It was the respondent's contention that the process of reasoning was outlined, the balance of probabilities was considered, and a reasoned determination was reached. 2. In relation to the appellant's contentions on the topic of fact-finding and reasoning concerning water ingress, two further matters were put. First, no error of reasoning had been shown and it was open for the respondent's evidence to be preferred to that of the appellant. The relevant sequence was said to be: (1) on 26 February 2019 the work began, (2) prior to 10 April 2019 there was no pre-existing water damage to the entertainment unit, and (3) on 10 April 2019 the respondent noticed water ingress behind that unit and took photos which formed part of the evidence. It was said that it was in those circumstances that the conclusion, at [72], was reached that the appellant had work on the flue prior to 10 April 2019 and had not sealed the flue. 3. Secondly, it was submitted that, to the extent that the appellant's submissions pointed to another potential source of water ingress in the unsealed flue, any such water ingress was due to the appellant's failure to seal the flue. 4. Submissions were also made in relation to the four components of Ground 3. 5. As to Ground 4, which suggested the claim for water damage to the floor had been abandoned, the response was that: 1. the relevant portion of the transcript has not been completely transcribed, 2. it is not clear that the respondent comprehended the questions put to him in relation to the floor, 3. in those circumstances, it could not be said that clam was abandoned, 4. both experts agreed there was water damage to the flooring, and 5. the finding that damage to the flooring was caused by both water damage and scratches was supported by the joint evidence. 1. On this topic, the Tribunal's attention was directed to the reasons at [105] which record that: The photographs sent by text to the builder supported the complaint of scratches to the bedroom flooring from inadequate drop cloths at all relevant times. It elicited an acknowledgement and apology from the builder. 1. In relation to paragraph (vii) in the Amended Grounds of Appeal, namely "The Senior Member erred in awarding temporary accommodation costs and the amount should be reduced if the grounds are successful", it was noted that the reasons recorded that no issue was taken to temporary accommodation being raised (at [78]), and that the evidence of the appellant's expert as to the cost of $1,200 for four days was accepted (at [206]). It was submitted that no reason had been advanced as to why it was an error to accept the evidence of the appellant's witness. 2. The suggestion that the costs order made at first instance should be set aside was disputed on the basis that the appellant was contending for a reduction in the amount awarded to the respondent which, if made, would still leave the respondent with an entitlement to an order for costs at first instance. Respondent's oral submissions 1. Counsel for the respondent referred to general principles before addressing individual items. It was first contended that the appellant had no established an error of law in either its written or oral submissions. Further, that there are no findings that were either without evidence or against the weight of the evidence. 2. It was noted that there was extensive expert evidence from Mr Pickering for the appellant, (A763) from Mr Sims for the respondent (A692). Further that there was a completed Scott schedule (A900) and a joint report (A902) to which the appellant had not taken the Tribunal. 3. The challenged reasons (A114) were noted to be 57 pages or 226 paragraphs in length and were said to contain an item-by-item consideration. With two detailed expert reports, a joint report, and extensive reasons, it was noted that there was not a 'broad-brush' approach but a clear and measured outcome with the respondent claiming more than $130,000 and being awarded less than $90,000. 4. By reference to Collins, it was noted that matters requiring leave involved a two-stage process of first being satisfied there had been a miscarriage of justice and then exercising discretion. It was submitted the appellant's case in this appeal did not satisfy either of those criteria. 5. As to the conclusion expressed in the reasons at [88] in relation to water ingress should not be read in isolation but in conjunction with [66]-[80] and [87] and the Tribunal was urged to bear in mind what was said by the plurality in Whisprun Pty Ltd v Dixon [2003] HCA 48 (Whisprun) at [62]: A judge's reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge's failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party's case. 1. Examples of evidence not referred to in the reasons was said to be on A327 at [2794] and A237 at [1197] and the Tribunal's attention was directed to the respondent's closing submissions at A397 and to the fact that the respondent was self-represented at first instance. It was contended that the suggestion the claim for water damage to the indoor floor was abandoned was plainly wrong and noted that the joint report, at A902, recorded: Defect: Both experts agreed with water damage to the flooring. 1. The position was said to be that there were differences of opinion and the presiding member found in favour of the respondent. It was observed that the respondent was not cross-examined in relation to water damage to the flooring and that if it was considered that what he said during closing submissions was evidence then an application could have been made to re-open for the purpose of dealing with that. Any suggestion there was no evidence on this topic was disputed, based on what appeared at A711-712. 2. It was submitted the amount awarded for damage to the indoor flooring was not extravagant and replacement rather than repair was usual and proper, having regard to what was said in Bellgrove v Eldridge [1954] HCA 36. 3. Turning to the outdoor flooring, which was considered in the reasons at [135]-[144], it was submitted that the outcome was the result of a reasonable inference from the evidence, was not against the weight of the evidence, and that it was not sufficient to suggest there could be a different conclusion. 4. As to the bifold doors, dealt with in the reasons at [149]-[155], the Tribunal's attention was directed to the 'before and after' consideration recorded at [153]. The Tribunal was reminded that an appeal is not a rehearing and that errors need to be found. It was submitted that no such errors had been demonstrated. In response to the suggestion that the amount awarded was extravagant, reference was made to the joint report at A902 where the appellant's expert agreed not only with the scope of works but also with the amount suggested by the respondent's expert, both on an 'if found' basis. 5. It was said that the mirror should have been rehung by the appellant as part of the contract works and it is noted that the mirror was considered in the reasons at [193]-[195]. 6. The 60 hours of labour that was allowed was said to have been the subject of extensive consideration, from A337 at [2941] to A342 at [3026]. The relevant portion of the reasons is [75]-[78], the last of those paragraphs indicating that the evidence of the respondent's expert was preferred. Appellant's oral submissions in reply 1. It was submitted, with reference to the indoor flooring, the outdoor flooring and the bifold doors, that even if the presiding member's reasoning was satisfactory, it was necessary for there to be an identification of the breach and an indication of how that caused loss or damage. Further, that even if the joint report recorded agreement as to the scope of works, that did not get around paragraph (e) of clause 36.2 of the contract as to the repair or replacement issue. 2. As to the indoor flooring and water damage, reference was made to the Points of Claim at A411 and A412. It was contended that, while the respondent said in his closing submissions that he relied on the expert evidence, that did not form part of the claim. 3. In response to the Tribunal's question of what reduction in the amount awarded the appellant was seeking, the amount was said to be $83,906. In summary, it was indicated that the appellant relied on its written submissions and suggested the reasons were such as to warrant cause for concern. Consideration 1. It is convenient to deal with Grounds 1 to 4 in turn, noting that, at first instance, the presiding member had to labour under the difficulty created in a situation where one side is self-represented and the other has counsel. Ground 1 1. This ground raises the question of what impact, if any, s 18G of the HBA has on clause 36.2 of the contract, which was the Housing Industry Association (HIA) standard form contract that is headed "NSW Residential Building Contract for Renovations and Additions". The focus of attention in this instance is paragraphs (c) and (e). 2. In the contract between these parties, cl 36, which is titled "Risk", contains cl 36.2 which is set out in full below: The builder is not responsible for: (a) loss or damage to the owner's property or property for which the owner is responsible that is left on the site; (b) subject to Clause 36.2(c) any defect, structural deficiency, settlement or deterioration in the existing building except to the extent that it is caused by the builder failing to take reasonable care in carrying out the works; (c) damage to ceilings in the existing building except to the extent that it is caused by the builder failing to take reasonable care in carrying out the building works, but then only to the extent of repairing and excluding any repainting; (d) damage to paths, gardens, driveways, trees, lawns and other landscaping; and (e) the restoration of areas affected by the building works to their original condition. 1. It is also relevant to note cl 43, headed "Severance", which provides: 43.1 Any provision in this contract which is illegal, void or unenforceable will be ineffective to the extent only of such illegality, voidness or unenforceability and will not invalidate any other provision of this contract. 1. In the HBA, s 18G is in the following terms: A provision of an agreement or other instrument that purports to restrict or remove the rights of a person in respect of any statutory warranty is void. 1. That section was considered in Cappello v Hammond & Simmonds (NSW) Pty Ltd [2020] NSWSC 1021 (Cappello) where the operation of the liquidated damages clause for the HIA form costs plus contract was in issue. 2. It is noted that, on appeal, it was specifically recorded that what was said in relation to s 18G was not challenged: Cappello v Hammond & Simmonds (NSW) Pty Ltd [2021] NSWCA 57 at [69]. 3. When a liquidated damages clause is not found to be void by reason of being a penalty, it can operate either as a floor or as a ceiling in relation to damages: as a floor when it operates to provide an amount that can be awarded without the need for proof and as a ceiling when it operates to limit the amount that may be awarded. In Cappello, at [31]-[32], the liquidated damages clause held to be void if it operated as a ceiling but was read down, so as not to be caught by s 18G, by permitting it to operate as a floor. 4. Importantly, in Cappello, s 18G was held to apply not only to liability but also to quantum. That is not surprising, since s 18G refers to the rights of a person in respect of any statutory warranty. Those statutory warranties, contained in s 18B(1), are implied by law and thereby create an entitlement to damages if they are breached. Each of those warranties is set out below: (a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this and any other law, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract or, if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the marking or alternations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes know to the holder of the contractor licence or person required to hold a contractor's licence, or another person with express or apparent authority to enter into or vary any contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires that work to achieve, so as to show that the owner relies on the holder's or person's skill or judgment. 1. Dealing first with paragraph (c) of cl 36.2, its words purport to restrict the rights of an owner in three ways. First, by confining liability to a failure to take reasonable care, which is clearly much narrower than the ambit of the warranties provided by s 18B(1), set out above. Secondly, by confining any work order or money order to repair, which could be said to disentitle replacement. Thirdly, by excluding any repainting. 2. The words of paragraph (e) of cl 36.2, when combined with the prefatory words of that clause, provide that: The builder is not responsible for … the restoration of areas affected by the building works to their original condition. 1. When dealing with repairs or restoration arising from a breach of a statutory warranty implied by s 18B(1), the common law position is clear: the fundamental principle as to the amount payable is that the party affected by the breach of the statutory warranty should be put in the same position as if the breach had not occurred: Haines v Bendall [1991] HCA 15 (Haines). Further, where there has been defective work, the rectification method must be both necessary and reasonable and the rectification cost must be reasonable: Bellgrove v Eldridge [1954] HCA 36 (Bellgrove). 2. The position in relation to damages for a breach of contract is that the affected party is entitled to be put in the same position as if the contract had been performed without any breach. However, the position in relation to damages for a tort is that that the affected party is entitled to be put in the same position as if the tort had not occurred. 3. The use of the words "failing to take reasonable care" in paragraph (c) of cl 36.2 suggests paragraph (e) of that clause may be intended to apply in relation to a claim in tort, most commonly negligence. However, regardless of what was intended by the inclusion of paragraph (e), if it is alleged to restrict a claim in circumstances where replacement rather than repair is considered appropriate then it operates to restrict a right provided by s 18B(1) of the HBA. 4. The appellant's submission that the effect of paragraphs (c) and (e) of cl 36.2 is not to convert a substantial right to damages to a nominal one, reflects the compensatory principle of damages, and falls legitimately within the realm of freedom of contract, is rejected. Those paragraphs can have the effect of restricting the rights of a person in respect of a statutory warranty and, in circumstances where they do, they are void. 5. By reason of cl 43.1, paragraphs (c) and (e) can be read down to the extent that they are impermissible, as was done in Cappello. It is not possible to make a general pronouncement as to the validity of those paragraphs: whether the operate in a limited manner, as in Cappello, or do not operate at all will depend on the circumstances of the case in which their application is considered. 6. As paragraph (b) of cl 36.2 also purports to confine liability to "the extent that it is caused by the builder failing to take reasonable care in carrying out the building works", it suffers the same fate as paragraph (c). There does not appear to have been any reference to paragraph (d). 7. That leaves paragraph (a) which purports to render the appellant not responsible for loss or damage to property of the owner that is left on site. It is clear paragraph (a) could restrict or remove the right provided by a statutory warranty and may thus be rendered void by s 18G of the HBA. 8. As a result, we consider Ground 1 fails since a consideration of the relevant paragraphs in the reasons reveals that the presiding member correctly found the appellant could not escape responsibility by relying on cl 36.2. Ground 2 1. This ground challenges the conclusion that the appellant was responsible for water ingress in the region of the flue that resulted in amounts being awarded in relation to damage to the entertainment unit ($16,420) and to the flooring in front of that unit ($10,006). 2. The challenge was made on the basis that there was no supporting evidence, alternatively, that the decision was against the weight of the evidence. It was suggested that, since the former allegation did not require leave, unlike the alternative allegation, it was necessary for the Tribunal to reconsider all the evidence to determine whether leave was required. 3. However, once any evidence is identified, the former contention fails. As to the latter contention, since leave is required in respect of any allegation that the decision is against the weight of the evidence, the appellant must satisfy one of the tests suggested in Collins at [84], set out above at [12]. 4. The evidence to which reference was made included photos, suggesting the appellant has worked on the roof prior to April 2019 (at [72]), photos showing an absence of sealant after the removal of roof sheets by the appellant in early April 2029 and photos showing inadequate sealant at mid-June 2018, noting in the next sentence that they were congruent with the experts' agreed position (at [68]). There was also consideration of the sequence of relevant events (at [68]-[71]) which provide inferential support. By reason of those matters, it cannot be said there was no evidence to support the conclusion made in relation to the flue and a resulting effect on the entertainment unit and the floor in front of that unit. 5. While the appellant's written submissions suggested that a detailed assessment of the evidence and findings was required, it must be borne in mind that an appeal to the Appeal Panel does not simply 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] NSWCATAP 39 at [10]. Likewise, 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". 6. The appropriate course, especially when both parties to an appeal are represented by counsel, is to consider the evidence to which they have directed the Tribunal's attention. 7. Having considered the whole of the presiding member's reasons, and the evidence to which reference was made in the written and oral submissions (referred to earlier), we are not satisfied that the decision now challenged was against the weight of the evidence. It appears that the appellant's case on this ground rises no higher than that the decision was arguably wrong. 8. Even if it could be said that the decision was against the weight of the evidence, should leave to appeal be granted? There is no issue of principle and no question of public importance or matter of general application. The fact-finding was orthodox with the only potential criticism is that the reasons could have been better organised and that what appears at [88] could have been better expressed. 9. There is no injustice in the sense of something that goes beyond what is arguable. The presence of evidence that provides a basis for conclusion reached and does not reveal a factual error that was unreasonably arrived at and clearly mistaken. As a result, this ground is rejected both as to the decision being against the weight of the evidence and as to it raising a matter which warrants a grant of leave to appeal. Ground 3 1. The third ground questioned the evidentiary findings in relation to four items for which damages were awarded: the outdoor flooring, the bifold doors, the mirror, and the labour hours. 2. To the succinct statement of the High Court in Whisprun (quoted above), should be added what was said by Allsop P (as he then was) in Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [2]: [A] judge may, in dealing with large bodies of evidence, be forced to economise in expressions and approach in order to be coherent in resolving the overall controversy. The need for coherent and tolerably workable reasons sometimes requires a truncation of reference and expression. Judgement writing should not become a process that is oppressive and produces unnecessary prolixity. Not every piece of evidence must be referred to. That said, central controversies put up for resolution by the parties must be dealt with. The competing evidence directed or relevant to such controversies must be analysed or resolved ... 1. Further, in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 (Orr) at [71] Bell P (as he then was) suggested that the minimum characteristics that a Tribunal's decision must possess are: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, and (c) the reasoning processes that lead the Tribunal to the conclusions it made. 1. In Orr, at [73], it was noted that, in Cypressvale Pty td v Retail Ship Leases Tribunal [1996] 2 Qd R 462 at 477, it had been observed that while a tribunal: might not be required to 'submit the material before [it] to the most meticulous analysis and carry into [the reasons for its decisions] a detailed exposition of every aspect of the evidence and the arguments ...' or '... incorporate an extended intellectual dissertation upon the chain of reasoning ...', at least 'a basic explanation of the fundamental reasons which led the [Tribunal] to [its] conclusion ...' is necessary. 1. In relation to the outdoor flooring, the reasons at [135]-[144] reveal the evidence upon which the outcome was based and the reasons for that outcome, the first eight of those paragraphs dealing with liability and the last two with quantum. 2. While there is the use of the word "possibility" in [141], that paragraph records a concession by the experts that what was inferred was plausible. It is tolerably clear that the outcome on liability was based on the experts agreeing there was damage, photos taken before the work began, photos revealing a lack of adequate protection of the outdoor floor under the building material, the fact that there were 20 beams, each weighing 200 kg which had to be manhandled on a step ladder up one level onto the roof. 3. That being the evidence, it was a reasonable inference that the observed damage was caused during the work carried out by the appellant. There was also adequate explanation for the amount awarded, including a rejection of the appellant's attempt to rely on paragraphs in cl 36.2. 4. As to the bi-fold doors, which were considered in the reasons at [149]-[155], again the experts agreed there was damage. There was a concession as to some of the damage by the appellant and there were photos prior to the construction which showed only minor damage before the work commenced on 26 February 2019 and photos showing severe damage after that date. Again, it is a reasonable inference that the appellant bears responsibility for that damage. It was noted that the experts had agreed on the scope of work and the amount to be awarded, the appellant's expert making those concessions on an 'if found' basis. Thus, with both damage and damages agreed, the only issue was causation and there was both a sufficient evidentiary basis for the outcome and adequate disclosure of the reasoning. 5. Turning to the mirror, the basis for the finding as to liability is recorded in the reasons at [194] and as to quantum at [195]. Those paragraphs are considered sufficient to deal with that claim. 6. It is clear that each of those three claims was being considered as defective work, being breaches of the statutory warranties provided by s 18B(1) of the HBA, mirrored in cl 39 of the contract. The consideration of s 18G and s 48MA reinforces that view. The rejection of the defence based on cl 36 of the contract reflects an application of s 18G which preserves the respondent's rights under s 18B. While it is preferable to have specific reference to which of the statutory warranties is considered to have been breached in relation to each defect, it was made sufficiently clear in the reasons that the items now being considered were found to involve a failure to carry out residential building work with due care and skill. 7. Finally, the allowance of 60 hours' labour which topic was covered in the reasons at [75]-[78] where the differing amounts of $3,160 and $6,830, as suggested by the experts, were considered. Both experts suggested two people would be required. The difference was that the appellant's expert suggested 2 days and 27 hours while the respondent's expert suggested 5 days and 87 hours. The reason for preferring the assessment of the respondent's expert was said to be the more detailed evidence revealing greater consideration of the topic. Again, the reasons contain details of the evidence upon which the decision was based and the reason for that decision. The appellant's case in relation to this item does not rise higher than a suggestion that the decision was arguably wrong which does not provide a sufficient basis for granting leave to appeal. 8. Thus, none of the four items which were included within Ground 3 have been established to be matters which warrant disturbing the decision that was made in relation to those items: they do not appear to be against the weight of the evidence, nor can it be said those decisions were not fair and equitable, and there is no adequate basis for granting leave to appeal on this ground. 9. It is also relevant to note that reading the reasons in their entirety reveals claims which were rejected which provides support for the view that the evidence of both parties was given due consideration. Ground 4 1. The fourth ground of appeal suggested that the claimed for water damage to the indoor floor was abandoned with the contended result that awarding damages for that claim constituted an error of law. 2. That claim was included in the report of the respondent's expert (A711-712) and the Points of Claim expressed reliance on that report (A412 at [27]-[31(a)]). Accordingly, the claim for water damage to the indoor floor was made in the Points of Claim. In addition to the report of the respondent's expert, there was supporting evidence in the joint report (A902): Both experts agree with water damage to the flooring. 1. While there were different amounts suggested by the experts: $10,006.80 and $1,827.00. The fact that the appellant's expert suggested any amount, plus the comments made in relation to this item, provide support for the view that there was a defect for which the appellant should be considered responsible. It is clear from the respondent's closing submissions (A397, last paragraph) that he was pursing that claim. 2. The suggestion that claim was abandoned was based on his cross-examination (A196 at [414]-[418]) does not present as sufficient to amount to abandonment, notably at [416] which appears to suggest the respondent had in mind a distinction between "the concrete floor" and "the concrete paved floor". 3. Any suggested failure of the respondent to cross-examine carries little weight when the respondent was self-represented and thus cannot be expected to be familiar with the rule in Browne v Dunn (1893) 6 R. 67, HL. 4. The fact that the appellant's counsel may have suggested in closing submissions that this claim had been abandoned is of little moment as would set too high a standard for a self-represented litigant too suggest that there should have been a response to that closing submission during submissions in reply. 5. In such circumstances, we do not accept that a conclusion that the claim for water damage to the indoor floor was abandoned has been established. Accordingly, this ground also fails. Costs 1. The costs of the proceedings at first instance were addressed in the orders made on 24 January 2022. There is no valid reason why that topic should be revisited in this appeal. It is noted that the amount claimed or in dispute exceeded $30,000 with the result that it was not necessary to show special circumstances warranting an order for costs since, s 35 of the NCAT Act operated to render costs governed by r 38 rather than s 60. 2. As to the costs of this appeal, r 38A provides: (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of- (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal. 1. Since the requirements of r 38A(1) are met, r 38A(2) is applicable to the costs of this appeal. As a result, it appears that the costs of this appeal follow the event (ie outcome) unless there is disentitling conduct on the part of the respondent as the successful party. 2. The practical course is to make an order in favour of the respondent as to the costs of this appeal but include provision for the appellant to contend for a different order if he so desires. Orders 1. For the reasons set out above, we make the following orders: 1. Leave to appeal is refused. 2. The appeal is dismissed. 3. Subject to order 4, the appellant is to pay the respondent's costs of the appeal, on the ordinary basis, as agreed or assessed. 4. If either party seeks a different costs order, the following orders apply: 1. Order 3 above ceases to have effect. 2. Any application for a different costs order is to be filed and served, supported by evidence and submissions not exceeding five pages in length, within 14 days of the date of these orders. 3. Any response to an application for a different costs order is to be filed and serve, with evidence and submissions not exceeding five pages in length, within 14 days thereafter. 4. Any material in reply is to be filed and served within seven days thereafter. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar Amendments 06 September 2022 - Representation changed from "A" Lin to "P" Lin 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: 06 September 2022