Civil and Administrative Tribunal New South Wales Medium Neutral Citation: TCM Construction Group Pty Ltd v Neich [2024] NSWCATAP 4 Hearing dates: 19 December 2023 Date of orders: 08 January 2024 Decision date: 08 January 2024 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President G Ellis SC, Senior Member Decision: 1. Leave to appeal refused. 2. Appeal dismissed. Catchwords: APPEAL- appeal from orders requiring the appellant to remedy defective work-whether a question of law arises- whether there is a ground for leave to appeal to be granted-conflicting evidence of expert witnesses. Legislation Cited: Civil & Administrative Tribunal Act 2013 (NSW) Home Building Act 1989 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Texts Cited: Not applicable Category: Principal judgment Parties: TCM Construction Group Pty Ltd (Appellant) Wayne Neich and Liane Neich (Respondents) Representation: (Appellant) Self-represented (Respondents) Self-represented File Number(s): 2023/00290075 Publication restriction: Nil Decision under appeal Court or tribunal: New South Wales Civil & Administrative Tribunal Jurisdiction: Consumer & Commercial Division Citation: N/A Date of Decision: 18 August 2023 Before: M Tibbey (Senior Member) File Number(s): HB 23/16154 REASONS FOR DECISION Introduction 1. This appeal arises out of a decision published to the parties on 17 August 2023 (and amended on 18 August 2023) when the Tribunal was exercising its jurisdiction under the Home Building Act 1989 (NSW) (the HB Act). We will refer to the decision under appeal as the "Decision". 2. Proceedings were commenced in the Consumer & Commercial Division by the current Respondents for orders requiring work to be done by the current Appellant, the parties having previously entered into contracts for building work to be undertaken at the residential premises of the Respondents by the Appellant. The Respondents alleged that some of the work undertaken suffered from a number of defects. 3. The parties engaged experts who had provided a joint report which was tendered in evidence before the Tribunal. The expert for the Respondents was Mr Spratling and the expert for the Appellant was a Mr Drexler. The joint report dealt with a number of items the subject of the Respondents' claims. 4. In the result the Tribunal ordered that certain work (as set out in the Decision) be undertaken in respect of items 3, 4, 6, 7, 8, 14, 19 and 21. 5. The Appellant has lodged an appeal in respect of the work orders applicable to items 3, 4 and 21. There is no appeal with respect to the orders concerning the other items. 6. It is necessary to summarise the Decision with respect to the above three items the subject of this appeal. In doing so we incorporate some evidence from the joint report of the experts. The Decision 1. Item 3 concerned paintwork showing cracks where paint had been applied to walls on "waterfront stairs". 2. We note that in the joint report Mr Spratling's opinion was that there were "surface cracks in the paintwork. Therefore, the works are defective." He referred to the New South Wales Guide to Standards and Tolerances and the report sets out paragraph 13.2 of that guide which briefly describes when paintwork is defective. 3. On the other hand, the view of Mr Drexler, as recorded in the joint report, was that it is necessary to have regard to the Australian Standard "AS2970-1196 Residential Slabs and Footings" which states that hairline cracks (which are defined) do not require repair. Mr Drexler recorded that both experts agreed that the cracks are hairline cracks. During the hearing of the appeal this assertion was queried by the Appeal Panel and the Appellant could not identify where Mr Spratling had recorded that, in his opinion, the cracks were hairline cracks. 4. As recorded at [11] of the Decision the Tribunal found that there were "visibly large cracks in the paintwork within a relatively short period after extensive paintwork" and that that is "not consistent with painting where due skill and care has been used". The Tribunal found that it was satisfied that the whole wall on the waterfront stairs will need to be repainted to avoid a patchy appearance. 5. Item 4 concerned a ceiling in a "summer house". The joint report records that Mr Spratling's opinion was that there was a particular gap more than 2mm acknowledged by Mr Drexler, and that there were other gaps as well. Mr Spratling's opinion was that it was necessary to repaint the whole external ceiling in order to achieve a consistent colour and that painting one single board would not result in a colour match with the rest of the ceiling. In summary, his view was that there were a number of gaps and that the ceiling required to be completely repainted. 6. Mr Drexler recorded his opinion in the joint report and, in summary, he disputed the necessity to require the whole ceiling to be repainted. His view was that one should have regard to the New South Wales Guide to Standards and Tolerances 2017 and in particular to paragraph 11 which deals with internal fixing. That Standard described gaps existing at handover as defective as well as gaps exceeding 1 mm in width within the first 12 months of completion. After the first 12 months gaps are defective if they exceed 2 mm in width and are visible from a normal viewing position. He stated that both he and Mr Spratling agreed that there was only one gap exceeding 2 mm in width. With the exception of the one gap, Mr Drexler's opinion was that the other gaps did not exceed 2 mm within the first 12 months and that the Appellant was therefore not required to undertake any repairs. His view was that the Appellant should paint the 2 mm gap by using paint matching the remaining paint as closely as possible. Mr Spratling's opinion was the ceiling needed to be completely repainted to achieve a matching colour. 7. At [13] the Tribunal found that there is one gap of more than 2 mm and that there are other narrower gaps in the ceiling boards. The Tribunal found at [14] that the gaps between the ceiling boards are significant and that the boards ought to be repainted over the whole ceiling with new paint to achieve a uniform colour across the ceiling. 8. With respect to item 21, which concerned lead flashings between the lacework on the ground and first floor levels, the two experts agreed that the work was defective but disagreed on the nature of the work required to remedy the defect. In the joint report Mr Spratling states that the "failed and defective flashings allow water to penetrate below them and this water has effectively entered the internal area of the dwelling". Mr Spratling's opinion contained criticism of Mr Drexler's proposed remedial work. Mr Spratling wrote that installing a flexible sealant (as suggested by Mr Drexler) would not be appropriate as the expansion and contraction of the lead exceeds that which a sealant can accommodate and the sealant would fail. 9. Mr Drexler's opinion was to the effect that the Appellant should adjust the lead flashing to prevent ponding on the flashing and that that can be achieved by inserting wedges below the flashing. He also proposed to seal the joints between the flashing. 10. At [23] the Tribunal recorded that the Respondents' view was that the Appellant's proposal would not be durable and that the flashing needed to be removed and the lacework taken up so that the flashing could be properly angled and reinstalled with the lacework. The Tribunal referred to the Appellant's proposal of inserting wedges in places so that water would fall away from the house. The Tribunal found that it was not satisfied that the solution offered by the Appellant would be durable and the Tribunal said that it took into account the fact that photographs in Mr Spratling's report showed that flashing is lifting in places even though fairly recently installed and that pieces of it have fallen off. The Tribunal found that the proposed solution offered by Mr Spratling was appropriate and durable and an order that such work be undertaken was made. Notice of Appeal 1. The Appellant lodged a Notice of Appeal on or about 6 September 2023. The Appellant submitted that the order with respect to item 3 should not have been made, the order with respect to item 4 should be modified so that remedial work only concerns the 2 mm gap in the boards which should be filled and painted and further, that with respect to item 21, the order should be modified so that the Appellant's obligation is limited to the method of rectification proposed by Mr Drexler. 2. In an attachment to the Notice of Appeal, the Appellant contended: 1. In respect of item 3, the Tribunal made an error of law by not accepting Australian Standard AS 2970-1196 Residential Slab and Footings. 2. With respect to item 4, the Appellant contended that the Tribunal made an error of law by not accepting the NSW Guide to Standards and Tolerances 2017. 3. With respect to item 21, the Appellant contended that the Tribunal erred by accepting the opinion of Mr Spratling who did not state that the solution offered by the Appellant would not be durable and that, in any event, there is no provision in the Building Code or any Australian Standard regarding the durability in the rectification of defects. Other Material 1. The Respondents have filed a Reply to Appeal opposing the appeal. Both parties have filed folders of material in support of their respective positions. Consideration 1. The Civil & Administrative Tribunal Act, 2013 (NSW) (the NCAT Act) provides for the regulation of appeals from the Consumer & Commercial Division of the Tribunal. Essentially an Appellant has an appeal as of right "on any question of law" (s 80(2)(b)) or with leave (that is, permission) on the grounds described in cl 12 of sch 4 of the NCAT Act. Clause 12 provides: 12 LIMITATIONS ON INTERNAL APPEALS AGAINST DIVISION DECISIONS (1) An Appeal Panel may grant leave under section 80(2)(b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because-- (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). Note: Under section 80 of this Act, a party to proceedings in which a Division decision that is an internally appealable decision is made may appeal against the decision on a question of law as of right. The leave of the Appeal Panel is required for an internal appeal on any other grounds. (2) Despite section 80(2)(b) of this Act, an internal appeal against a Division decision may only be made on a question of law (as of right) and not on any other grounds (even with leave) if-- (a) the appellant is a corporation and the appeal relates to a dispute in respect of which the Tribunal at first instance had jurisdiction because of the operation of Schedule 3 to the Credit (Commonwealth Powers) Act 2010, or (b) the appeal is an appeal against an order of the Tribunal for the termination of a tenancy under the Residential Tenancies Act 2010 and a warrant of possession has been executed in relation to that order. 1. In this case, the Appellant has contended that the appeal raises questions of law and has not expressly relied upon the grounds set out in clause 12. 2. Nevertheless, in fairness to the Appellant, we have considered whether the appeal raises grounds which would attract the provisions of clause 12. For reasons which are set out in the subsequent paragraphs of this decision we are of the opinion that there was no error made by the Tribunal. As a result, we do not think that the Decision could be described as "not fair and equitable" or "against the weight of evidence" (being two of the grounds upon which leave might be granted under clause 12). 3. To the extent that the parties attempted to rely upon new evidence ( being the third ground provided for in cl 12), we are of the opinion that such evidence is not new evidence of the kind addressed by cl 12(c) in that the evidence to which the parties referred in the appeal was not significant new evidence being evidence that was not reasonably available at the time of the hearing of the proceedings under appeal. 4. Even if we were of the opinion that the Decision was not fair and equitable or was against the weight of evidence, it would still be necessary to consider whether leave should be granted. The principles for granting leave have been set out in previous Tribunal decisions (the main and most quoted one being Collins v Urban [2014] NSWCATAP 17) where the Tribunal held 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 or an error that is plain and readily apparent which is central to the Tribunal's decision; 4. a factual error that was unreasonably arrived at and clearly mistaken; 5. the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it that it was likely to produce an unfair result so that it would be the interests of justice for it to be reviewed. 1. None of the criteria identified above are applicable in this case. In this case the member was faced with the competing views of two experts. The Tribunal considered the competing views and was satisfied with the opinions of Mr Spratling in preference to those of Mr Drexler. The Tribunal gave reasons for its preference. There is no basis for the view that the decision involves an issue of principle, a matter of public importance or an injustice which is reasonably clear or a factual error that was unreasonably arrived at or any other matter required to be considered under cl 12. 2. We will now turn to each of the three items for the purposes of considering whether a question of law arises as the Appellant submits. 3. Item 3: We are not satisfied that the Australian Standards AS 2970-1196 Residential Slabs and Footings regulates the standard of skill and care required for paintwork. The Appellant has not been able to point to anything in that Standard which specifically states that it applies to paintwork and, indeed, on its face, it applies to slabs and footings. The Tribunal's decision to adopt the opinion of Mr Spratling was open on the evidence and does not display any error of law. Accordingly, the appeal concerning item 3 is rejected. 4. With respect to item 4, the Appellant's contention was that the Tribunal ignored the provisions of the Guide to Standards and Tolerances 2017. It is not clear that the guide applies to paintwork. Rather, it appears to concern gaps between mouldings or between mouldings and other fixtures. Again, it was open on the evidence for the Tribunal to have accepted the opinion of Mr Spratling. Accordingly, the order that the boards be repainted over the whole ceiling with new paint to achieve a uniform colour across the ceiling does not display any error of law in and, in particular, does not constitute an order in conflict with the Guide to Standards and Tolerances relied upon by the Appellant. This ground is also rejected. 5. Item 21 concerns flashing below the lacework on the ground and first floors. The two experts agreed that the Appellant's work was defective, but they disagreed as to the nature of the remedial work. The Tribunal gave its reasons for preferring the opinion of Mr Spratling over that of Mr Drexler. The Tribunal was concerned not only with the fact that work needed to be undertaken to avoid ponding but there was also the issue of Mr Spratling's evidence that the flashing is lifting and that pieces of it have fallen off. 6. The Appellant took issue with the Tribunal's apparent requirement for the remedial work to be "durable" pointing out that there is no specific legal requirement of "durability". The Tribunal was faced with evidence to the effect that flashing was lifting and falling off and that the proposed solution of Mr Drexler (which was to install wedges to address the ponding) did not appear to address the fact that flashing should not be falling off. Whilst there may not be any specific requirement in a Standard requiring flashing to be durable, nevertheless, there is a general requirement for work to be undertaken with due care and skill. This carries with it the notion that components of building work will last for a reasonable period. In the circumstances, the Tribunal's preference for the solution proposed by Mr Spratling was open on the evidence before the Tribunal. In addition, there was no evidence that the work proposed by Mr Spratling was excessive or luxurious or going well beyond that which was reasonably required. 7. An issue between the two experts was whether applying sealant to the flashing would be effective. Mr Drexler's opinion was that sealant would prevent water penetration. Mr Spratling's opinion was the expansion and contraction of the lead flashing would exceed that which sealant could accommodate. The Tribunal found that it was not satisfied that the solution by Mr Drexler would be durable, which we take to mean that the Tribunal was not satisfied that that solution would be effective for a reasonable period having regard to future expansion and contraction. In preferring the opinion of Mr Spratling over that of Mr Drexler the Tribunal has not fallen into error because the opinion of Mr Spratling was open and preferable having regard to all the evidence. 8. The Appellant contended that because it is a licenced builder it is entitled to undertake rectification of defects as it sees fit. In our view the Appellants view as to its entitlements in this regard is mistaken. Here the Tribunal had before it the opinion evidence of two experts whose expertise was not questioned. The Tribunal accepted the opinion of the Respondents expert (Mr Spratling ) as to the nature of the remedial work required to rectify the defective work and rejected the remedial work proposed by the Appellant's expert. Accordingly, the Tribunal ordered remedial work to be undertaken in accordance with the opinion of Mr Spratling. The Tribunal's power to make such an order is derived from s48O(c) of the HB Act. It also follows from the rejection of the proposal put forward by the Appellant's expert that the Tribunal could not have made an order to the effect that the Appellant undertake such work as it sees fit. 9. For the above reasons, we are of the opinion that the following orders should be, and are, made: 1. Leave to appeal refused. 2. Appeal dismissed. ************ 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: 08 January 2024