Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Austral Built Pty Limited v Khan & Sultana [2022] NSWCATAP 403 Hearing dates: 5 December 2022 Date of orders: 23 December 2022 Decision date: 23 December 2022 Jurisdiction: Appeal Panel Before: I R Coleman SC ADCJ, Principal Member G Curtin SC, Senior Member Decision: 1. The appeal is allowed in part. 2. Order 2 of the Orders of 29 August 2022 is varied to provide that, in lieu of the sum of $385,001.50 the sum of $168,251.50 be substituted. 3. The appeal is otherwise dismissed. 4. Leave to appeal is refused. 5. Any party seeking an order for costs of the appeal file and serve written submissions not exceeding 5 pages in length in support of such application within 21 days. 6. A party resisting any order for costs file and serve written submissions not exceeding 5 pages in length within 42 days. 7. Any part opposing the making of an order pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 dispensing with an oral hearing of any application for costs file and serve written submissions not exceeding 3 pages in length in opposition to such order within 42 days. Catchwords: APPEAL - whether error of law demonstrated - whether grounds for leave to appeal demonstrated - whether new evidence should be admitted Legislation Cited: Civil and Administrative Tribunal Act 2013 Home Building Act 1989 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Micallef v ICI Australia Operations Pty Limited [2001] NSWCA 274 New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 Prendergast v Western Murray Irrigation Limited [2014] NSWCATAP 69 Category: Principal judgment Parties: Austral Built Pty Ltd (Appellant) Muhammad Anisur Rahman Khan (Respondent) Silvia Sultana (Respondent) Representation: Counsel: B Anderson (Respondents) Solicitors: Md N Islam (Director of Austral Built Pty Ltd)(Apellant) Sarvaas Ciappara Lawyers (Respondents) File Number(s): 2022/00287853 Publication restriction: Nil Decision under appeal Court or tribunal: New South Wales Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 29 August 2022 Before: G K Burton SC, Senior Member File Number(s): HB 21/40368 REASONS FOR DECISION 1. By Notice of Appeal filed 26 September 2022, Austral Built Pty Limited (Appellant) appealed against orders made by the Tribunal on 29 August 2022 in proceedings brought against the Appellant by Muhammad Anisur Rahman Khan and Silvia Sultana (Respondents) in the Consumer and Commercial Division of the Tribunal. 2. The Tribunal's orders relevantly provided that the Appellant pay to the Respondents the sum of $385,001.50. The order was subsequently stayed on conditions. The conditions having not been met, the stay was discharged on 12 October 2022. 3. By their Reply to Appeal, the Respondents resisted the Appellant's appeal, and, save in one respect, have continued to seek to maintain the orders of the Tribunal. 4. By its Notice of Appeal, the Appellant also sought leave to appeal and leave to rely upon purported "new" evidence, each of which the Respondents opposed. 5. The Appellant did not file an outline of submissions in accordance with the Tribunal's directions. On 28 November 2022, pursuant to the appeal directions, the Respondents filed an outline of their submissions. 6. The Appellant was represented at the hearing of the appeal by Mr Nazrul Islam, a Director of the Appellant. The Respondents were represented by Counsel. The Reasons for the Decision of the Tribunal 1. The proceedings before the Tribunal arose from a building contract between the Appellant builder and the Respondent homeowners dated 23 September 2020. Pursuant to the contract the Appellant was to build a house for the Respondents for a price of $405,000. 2. Problems were encountered during the build. On 20 September 2021 the Respondents issued a notice of breach to the Appellant, which was followed by a termination notice on 11 October 2021. The Tribunal found [7] that it was not in dispute that the contract had then been terminated. That finding is not controversial in the appeal. 3. Relevantly for present purposes, the Tribunal identified the substantial issue on damages arising from the Respondents' claim in the proceedings filed by them on 24 September 2021 as being that the site had been: "abandoned and left unprotected against weather by the builder for 5 months, with consequent deterioration of the unprotected timber and the need for substantial demolition to slab and rebuild. They sought money orders for alleged incomplete and defective work". 1. The Tribunal accepted that it had jurisdiction to determine the Respondents' claim pursuant to the provisions of the Home Building Act 1989 (NSW) (HBA) to which it referred [9]. No part of the appeal involves any challenge to the jurisdiction of the Tribunal to determine the proceedings. 2. The Tribunal referred to the expert evidence on behalf of each party which was before it, and the outcome of the conclave of experts, before determining the matters in dispute between the experts. The Tribunal recorded at [2] that the appellant did not seek that a work order be made pursuant to s 48MA of the HBA. No part of the appeal involves any suggestion that such an order should have been made or should now be made. 3. Under the heading "Alleged defective and incomplete works", the Tribunal determined each controversy which emerged from the evidence of the experts before it. The Tribunal concluded [118] that: "With contested incomplete works found at $239,290.26, agreed incomplete works at $134,137.33 on the experts' agreement with no significant competing source of evidence, and the value of incomplete works conceded by the owners at the builder's expert's figure of $5,013.91, the total for incomplete works is $378,441.50". 1. The Tribunal recorded a number of "conceded and agreed items". The Respondents conceded a number of items which totalled $5,013.91 [23]. The experts agreed on a number of items requiring completion and the cost of such completion [24]. The Tribunal's asserted erroneous addition of the sums agreed to by the experts gave rise to one of the Appellant's grounds of appeal. 2. The Tribunal found [25] that the Respondent's claim for $10,068.33 with respect to "glass thickness" was made out. The Tribunal referred [26] to the agreed net roofing cost of $12,525. The Tribunal found [28] that the agreed items to which it had referred totalled $134,137.33. By its Notice of Appeal, the Appellant submitted that the Tribunal had erroneously added those sums, the correct figure being asserted to be $105,255.20. 3. The Tribunal considered [32]-[37] the different basis upon which each party's expert calculated the costs on rectification or completion works, and concluded [37] that it: "accepted the owners' expert's costings below, where items were not agreed, unless there was a specific criticism for the item that cast doubt upon the particular costing". 1. Although no ground of appeal asserted an "inadequate reasons" challenge, we record that the Tribunal adequately revealed the reasons which led to its decision with respect to the disputed items of work (New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231). 2. For the reasons which it set out [39]-[49], the Tribunal allowed $15,520.32 for the cost of scaffolding. The Appellant's expert had asserted a figure of $4,039. For the reasons which it recorded the Tribunal preferred the Respondents' expert's evidence to that of the Appellant with respect to the need for and cost of the hire of scaffolding and crane hire. The Tribunal accordingly allowed $22,580.32 net with respect to the cost of scaffolding and crane hire. 3. With respect to "timber frame removal and replacement", for the reasons which it recorded [51]-[56], the Tribunal found [57] that the Respondents had made out their claim "to remove and replace all the timber on site at net trade cost of $48,040". 4. With respect to "wet areas and plasterboard linings including cornices, skirtings, architraves, painting", for the reasons which the Tribunal recorded [58]-[67], the Tribunal accepted [68] the Respondents' expert's net trade cost totalling $51,027. That finding does not assume significance in the appeal. 5. With respect to "fit outs", for the reasons which the Tribunal recorded [69]-[71], the Tribunal accepted [72] the Respondents' expert's net trade cost of $4,000 for other fit out having excluded the quotation upon which the Appellant sought to rely. Earlier in its decision, the Tribunal gave reasons for excluding the quotations [12]-[15]. 6. With respect to "intercom", for the reasons which the Tribunal recorded [73], the Tribunal accepted the Respondents' expert's figure of $2,000 for that item. With respect to "electrical", the Tribunal accepted [76] the figure of $11,595 asserted on behalf of the Respondents, for the reasons which the Tribunal recorded [74]-[75]. With respect to "air conditioning", the Tribunal accepted [77] the figure of $9,899 asserted by the Respondents' expert for the reasons there recorded. With respect to "rendering", the Tribunal accepted the figure of $4,840 asserted by the Respondents' expert [81] for the reasons which it recorded [78]-[80]. 7. With respect to "roof, roof insulation and other insulation", the Tribunal accepted the evidence of the Respondents' expert for the reasons it recorded [82]-[86] in the sum of $15,000, less the agreed deduction of $2,475. 8. The Tribunal further accepted [89] the sum of $3,240 asserted by the Respondents with respect to "other insulation" for the reasons it recorded [87]-[88]. The Tribunal found with respect to "disputed brickwork" that the sum of $10,459.10 should be allowed [95] for the reasons which it recorded [90]-[94]. 9. With respect to "external windows, sliding doors, flyscreens, glass thickness", the Tribunal found for the Respondents in the sum of $10,068.33 for the reasons which it recorded [97]-[102]. 10. The dispute with respect to "balcony" was considered by the Tribunal [103]-[110] which, for the reasons there recorded, accepted the Respondents' expert's net trade costing of $6,500. 11. The Tribunal determined the dispute between the experts with respect to a "porch" [112]-[115], and accepted [116] the Respondents' expert's net trade costing. 12. The Tribunal's "conclusion on contested incomplete works" [117] was that the total net trade cost found by it was $180,706.26 which, with a 20% margin, became $216,847.51. With the addition of GST, the sum became $238,532.26. The Tribunal then concluded that "adding the item with margin and GST already included at $758 brings the total to $239,290.26". Save with respect to one ground of the Appellant's Notice of Appeal, the calculation performed by the Tribunal is not contentious. 13. The Tribunal's "conclusion on incomplete works" [118] was that: "With contested incomplete works found at $239,290.26, agreed incomplete works at $134,137.33 on the experts' agreement with no significant competing source of evidence, and the value of incomplete works conceded by the owners at the builder's expert's figure of $5,013.91, the total for incomplete works is $378,441.50." 1. Under the heading "Justification for termination", the Tribunal considered [119]-[120] whether the Respondents were entitled to terminate the building contract for breach. The Tribunal concluded [120] that the Respondents were entitled to do so and "to claim the loss arising from the defective and incomplete works found above, subject to any mitigation discussed in the following section of these reasons". 2. Under the heading "Mitigation and proportionality", the Tribunal considered in detail the dispute between the parties with respect to whether, as the Appellant contended, the Respondents had failed to mitigate the damage and consequential loss with respect to exposed timbers after terminating the building contract or, as the Respondents contended, in the circumstances that responsibility should remain with the Appellant. The Tribunal's findings assume significance in the light of one of the two substantive complaints raised by the Appellant in the appeal. 3. The Tribunal recorded the competing contentions with respect to the issue. The Tribunal recorded [121] that the dilapidation of the timber frame occurred after the experts' first inspection "possibly during the heavy rain periods in 2021 including at the end of 2021, and early 2022". For the reasons which it recorded the Tribunal found [139] that there was no basis to reduce the Respondents' damages and money order reflecting them by reason of their alleged failure to mitigate their loss. 4. The Tribunal found [142] that the Respondents were entitled to delay damages in the sum of $560. That sum is not controversial in the appeal. The Tribunal found [141] that the Respondents were entitled to a money order for a refund of $6,600 with respect to a variation for which they paid for which there was no evidence that the work had been done [140]. That sum is not controversial in the appeal. Principles governing the appeal 1. The principles governing the Appellant's appeal are not in doubt and do not require extension reiteration. Pursuant to s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) the Appellant may appeal as of right on any "question of law". 2. In Prendergast v Western Murray Irrigation Limited [2014] NSWCATAP 69 at 13 the Appeal Panel recorded a non-exclusive list of "questions of law", being (citations omitted): "(i) whether there has been a failure to provide proper reasons; (ii) whether the Tribunal identified the wrong issue or asked the wrong question; (iii) whether a wrong principle of law has been applied; (iv) whether there was a failure to afford procedural fairness; (v) whether the Tribunal failed to take into account relevant (i.e. mandatory) considerations; (vi) whether the Tribunal took into account any irrelevant consideration; (vii) whether there was no evidence to support a finding of fact; and (viii) whether the decision is so unreasonable that no reasonable decision maker would make it." 1. One of the Appellant's grounds of appeal involves an asserted material arithmetical error. If so, that could be corrected. The main thrust of the Appellant's complaints (grounds 3 and 4) involve the Tribunal preferring the evidence of the Respondents' expert to that of the Appellant. 2. Ground 3 assertedly involves challenge to findings of fact made by the Tribunal with respect to whose obligation it was to preserve the timber frame after the termination of the building contract. 3. As the authorities also make clear, the fact that the appellate Tribunal may have exercised the jurisdiction differently had it decided the case at first instance is immaterial (Micallef v ICI Australia Operations Pty Limited [2001] NSWCA 274). 4. In the Tribunal, an appellant may only appeal as of right (i.e. without permission) on issues which give rise to a question of law. This is not the place to set out all possible questions of law, but Prendergast (quoted above) sets out a number of such questions of law. Unsurprisingly, the appellant, not being legally trained, did not identify any questions of law. However, we have examined the material and no questions of law are apparent to us. Simply arguing, as the appellant did, that the Tribunal should have, for example, preferred his expert to the respondents' expert, does not give rise to a question of law. Appeals are not a second hearing. On an appeal the appellant must show that the Tribunal made some type of mistake (a question of law) that lead the Tribunal to the incorrect conclusion. Such mistake is apparent to us in how the Tribunal reached its conclusion. 5. The principles governing the application for leave to appeal, and to adduce "new" or further evidence in appeals from the Consumer and Commercial Division of the Tribunal are not in doubt. Clause 12 of Schedule 4 to the CAT Act provides that leave to appeal pursuant to s 80(2)(b) of the CAT Act may be granted if the Appeal Panel is satisfied that 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). 1. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel accepted that: "in order to be granted leave to appeal, the applicant 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". 1. The Appeal Panel in Collins accepted, by reference to the authorities to which it referred that: "ordinarily it is appropriate to grant leave to apply 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." The grounds of appeal Ground 1 1. Ground 1 of the Appellant's Notice of Appeal asserted that the sum of $222,750 unpaid by the Respondents should have been deducted from the order made by the Tribunal. Albeit for different reasons, the Respondents agreed that, if the appeal were dismissed, and leave to appeal refused, the sum due and payable by the Appellant to the Respondents was $168,251.50 (48). The Appellant did not dispute that, if it were unsuccessful, the sum payable by it should be amended to that sum. We perceive that, pursuant to s 81(1)(d) the appeal should be allowed in part and the sum payable by the Appellant amended to $168,251.20 on that basis if the Appellant is otherwise unsuccessful. Ground 2 1. Ground 2 of the Appellant's Notice of Appeal asserted that the Tribunal's calculation of the total of the sums allowed with respect to paragraphs [23], [24], [25] and [26] of its reasons, which were themselves not disputed, was $105,255.20, and not the sum of $134,137.33 found by the Tribunal [28]. The Respondents submitted [54], correctly in our view, that the agreed items (reasons paragraph [12], [23], [24], [25], [26]) total $139,151.25 less the sum of $5,013.91 subsequently deducted from that figure (reasons [118]) meant that the Tribunal did not err in finding that the agreed items total $134,137.33. 2. Having redone the calculation, we agree with the Respondents that the Tribunal did not err in its calculation. This ground fails. Ground 3 1. Ground 3 potentially involves two components although, in view of the Appellant's oral submissions, it ultimately involves one substantive issue only. To the extent that the ground involved conflicting expert opinion evidence, nothing to which the Appellant referred persuades us that the Tribunal erred in preferring the opinions of the Respondents' expert to those of the Appellant's expert where there was disagreement. Each expert was amply qualified to give the evidence he gave. The evidence was tested before the Tribunal, which had the advantage over the Appeal Panel of seeing and hearing the witnesses give their evidence. The Tribunal published detailed and cogent reasons for preferring the evidence of the Respondents' expert to the evidence of the Appellant's expert. The Appellant has raised nothing which causes the Appeal Panel to perceive error in the Tribunal's decision. 2. The real thrust of the ground emerged from the hearing as being a challenge to the finding of the Tribunal that the Appellant should be responsible for the deterioration in the exposed framing timber, and the consequences of such deterioration. Having recorded its findings with respect to the dispute in relation to the cause of the deterioration of the timber, the Tribunal accepted [57] that the Appellant was responsible for the cost of removing and replacing all timber on site. The Tribunal's findings on "termination and mitigation" which were pivotal to that decision were set out in detail later in its reasons. At [119]-[120] the Tribunal recorded its reasons for finding that the Respondents were entitled to terminate the building contract. To the extent that this ground impliedly challenges that finding, nothing to which the Appellant has referred establishes that the Tribunal erred in law or fact in making the finding it did with respect to the termination of the building contract. 3. Under the heading "Mitigation and proportionality", the Tribunal recorded the rival contentions with respect to whether the Appellant or the Respondents should be responsible for the cost of rectification of the timber framework. The Tribunal provided detailed and cogent reasons for finding [139] that there was no basis to reduce the Respondents' damages and money order reflecting them by reason of their failure to mitigate the damage resulting from the timber framework being exposed to the elements after termination of the building contract in October 2021. 4. The appellant submitted that it was the respondents' obligation to protect the timber. That is not so (in this case). As the Tribunal said [132] the question is whether the respondents acted unreasonably and cited authority to that effect. The Tribunal applied the correct law and the appellant's submission is incorrect. 5. Nothing else to which the Appellant has referred establishes that the Tribunal erred in finding as it did with respect to that issue. This ground fails. Ground 4 1. Ground 4 asserts that: "The owners' expert did not provide any quotation and also he used Cordells weekly rates. The scaffold required 4,000 brickwork to do and roof tile to complete. All bricks can be layed [sic] in less than a week and then roof tiler and gutter can be done in a week. So why do you need the scaffold more than 3 weeks. The owners' expert allowed 8 weeks which is unrealistic. Also as per the SafeWork Australia roof guard rail does not required [sic] where scaffold installed. Handrail required when 3 meter [sic] above or more. However the platform of the scaffold will establish 600mm below of the gutter level and if someone fall from the roof he will fall on the platform. Also there is no need for the crane. The owners' expert wants to remove timber and steel beam from the site and redo it agin [sic]. But it was owners' responsibility to project [sic] them and I mentioned it item 3. This is the reason crane does [sic] not required to remove steel frame." 1. To the extent that this ground challenges the Tribunal's preference for the opinion evidence of the Respondents' expert to those of the Appellant's expert, nothing to which we have been referred establishes error by the Tribunal. 2. The Tribunal gave detailed and cogent reasons for its determination of this issue [38]-[49]. Significantly, both with respect to this ground of appeal, and the Appellant's application for leave to appeal and/or rely upon "new evidence", the Tribunal referred [41] to the SafeWork NSW Code of Practice Safe Work on Roofs Commercial and Industrial Buildings 2009. In what way the Tribunal erred in having regard to that Code has not been suggested by the Appellant. This ground fails. Leave to appeal 1. No ground of appeal having been established, it is necessary to consider the Appellant's application for leave to appeal. As is apparent from its Notice of Appeal, the Appellant's application for leave to appeal in part reiterated the grounds of appeal. Nothing raised by the Appellant with respect to whether the decision of the Tribunal was "not fair and equitable" or "against the weight of evidence" succeeds having regard to our conclusions with respect to the grounds of appeal. 2. With respect to the Appellant, its case both in the appeal and application for leave to appeal is that the Tribunal erred by not preferring its expert opinion evidence to that of the Respondents and/or in erroneously finding that responsibility for the deterioration in the framing timbers rested with the Appellant rather than with the Respondents. With respect to the Appellant, beyond that assertion, it has not referred the Appeal Panel to anything which establishes that the Tribunal erred in any way recognised by the law. 3. The further "new" evidence sought to be relied upon by the Appellant comprised a schedule of progress payments, indicating those which had not been paid. The concession by the Respondents with respect to the figure which the Tribunal should have awarded after allowing for unpaid payments removes that schedule of any possible relevance. The page of calculations with respect to the addition of the sums found at paragraphs [23]-[26] of the Tribunal's reasons has been dealt with in the context of ground 2. It cannot have an independent incarnation in the context of a leave to appeal application. 4. The quotations from HZ Scaffolding and Titan Building Services were available, and sought to be relied upon by the Appellant at the first instance hearing. For the reasons which the Tribunal provided, they were "excluded" from evidence in the proceedings. No ground of appeal asserts that the Tribunal erred in refusing to receive those quotations in evidence. In those circumstances, there is no basis for receiving them in the appeal. 5. The "Safe Work on Roofs Part 1: Commercial and Industrial Buildings" Code of Practice issued by the WorkCover New South Wales in 2009 was before the Tribunal at first instance, was referred to and considered by it (at [41]). Apart from the fact that the Code was readily available at the time of the hearing, the Tribunal considered it and it cannot assist an application for leave to appeal. Conclusion 1. No contested ground of appeal having been made out, and no basis for leave to appeal having been established, the only success to which the Appellant is entitled is that properly conceded by the Respondents. Order 1. The appeal is allowed in part. 2. Order 2 of the Orders of 29 August 2022 is varied to provide that, in lieu of the sum of $385,001.50 the sum of $168,251.50 be substituted. 3. The appeal is otherwise dismissed. 4. Leave to appeal is refused. 5. Any party seeking an order for costs of the appeal file and serve written submissions not exceeding 5 pages in length in support of such application within 21 days. 6. A party resisting any order for costs file and serve written submissions not exceeding 5 pages in length within 42 days. 7. Any part opposing the making of an order pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 dispensing with an oral hearing of any application for costs file and serve written submissions not exceeding 3 pages in length in opposition to such order within 42 days. ********** 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 January 2023 - Coversheet amendment, typographical error 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 January 2023