New South Wales Supreme Court CITATION : Bignell P/L v Edenden t/as Everdry Waterproofing [2003] NSWSC 77 HEARING DATE(S) : 13 February 2003 JUDGMENT DATE : 24 February 2003 JURISDICTION: Common Law Administrative Law List JUDGMENT OF : Master Harrison DECISION : (1) The proceedings against the third defendant, Ison & Co Pty Limited are dismissed. The plaintiff is to pay the third defendant's costs of the motion and of the proceedings; (2) Leave is granted to file both an amended notice of appeal, the grounds being restricted to paragraph 7(e) and the amended summons; (3) The plaintiff is to pay the first and second defendants' costs thrown away by the amendments. CATCHWORDS : Strike out - Appeal decision of Consumer, Trader and Tenancy Tribunal - Amendments to summons and notice of appeal Supreme Court Rules - Part 13 r 5; Part 15 r 26 LEGISLATION CITED : Consumer Trader and Tenancy Tribunal Act 2001 - s 67 Fair Trading Tribunal Regulation 1999 - cl 27(1) A J Bignell Pty Ltd (Plaintiff) PARTIES : EG Edenden & P A Edenden t/as Everdry Waterproofing & Coatings & 3 Ors FILE NUMBER(S) : SC 30042/2002 Ms M Tzannes (Plaintiff) Mr T Bland (First & Second Defendants) COUNSEL : Mr G A Seib (Third Defendant) Mr MBJ Lee (Fourth Defendant) Ms L DuRen of Atkins Jones (Plaintiff) Lindsay Brien Solicitor (First & Second Defendants) SOLICITORS : PricewaterhouseCooper Legal (Third Defendant) Ms H Roberts Crown Solicitor's Office (Fifth Defendant) LOWER COURT CTTT JURISDICTION : LOWER COURT BU 00/78406 FILE NUMBER(S) : LOWER COURT Tribunal Member Mallam JUDICIAL OFFICER : - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST MASTER HARRISON MONDAY, 24 FEBRUARY 2003 30042/2002 - A J BIGNELL PTY LTD v EG EDENDEN & PA EDENDEN T/AS EVERDRY WATERPROOFING & COATINGS & 3 ORS JUDGMENT (Strike out - Appeal decision of Consumer, Trader and Tenancy Tribunal; amendments to summons and notice of appeal) 1 MASTER: Two notices of motion have been filed. On 15 October 2002 the plaintiff filed a notice of motion seeking leave to amend the grounds of appeal. Paragraph 3 of that motion is not being pressed. An order was made in accordance with paragraph 2, so it is unnecessary to deal with paragraph 4. The fifth defendant and the Tribunal appeared at the hearing to oppose any orders for costs. I made an order that the fifth defendant be excused and noted its submitting appearance. This matter has been referred by the list judge to a Master for hearing. The plaintiff relied on the affidavit of John Wilson sworn 11 October 2002, Robert Jones sworn 11 October 2002 and Lillian May DuRen sworn 4 October 2002 and 14 October 2002 (two affidavits). The defendants oppose the amendments to the notice of appeal on the grounds that the appeal is futile. If I find that the appeal is not futile, the defendants do not otherwise oppose the amendments being made on the basis the plaintiff pays the costs thrown away by the amendment. 2 By notice of motion filed 15 October 2002, the third defendant seeks an order that the proceedings be dismissed or stayed pursuant to Part 13 r 5 of the Supreme Court Rules (SCR), or, in the alternative, that the plaintiff's summons be struck out pursuant to Part 15 Rule 26 of the SCR. The third defendant relies upon the affidavit of Tanya Harris-Roxas sworn 4 October 2002. Tribunal proceedings 3 The plaintiff is A J Bignell Pty Ltd (Bignell). Bignell was the builder of a 16 unit development at Penguin Head Road, Culburra on the South Coast. The first respondent was S G Eden trading as Everdry Waterproofing & Coatings and the second respondent was P A Edenden t/as Everdry Waterproofing & Coatings (Everdry). Everdry was contracted to render units 3 to 6 for Bignell. All materials used by Everdry, namely sand, Plaster Master and Blue Circle South Builders Cement were supplied by Ison. Ison was joined as the second respondent in the Tribunal proceedings. Ison purchased the sand from Dunmore Sand & Soil Pty Ltd (Dunmore) (third respondent). 4 In late 1998, the owners of the strata plan (the owners) contacted the Department of Fair Trading about the rendered surfaces. On 27 March 2002, the site meeting with the owners, Mr Bignell and a representative of the Fair Trading Tribunal took place. At the meeting, it was noted that in the affected areas paint was blistered and render crumbling. There were pop-outs with brown rust like stains in the wall throughout the rendered surfaces. Bignell carried out remedial work in about May 1999 to the north wall of unit 4, but not the other affected areas, namely the remainders of unit 4 and units 3, 5 and part of 6. Bignell lodged a claim in the FTT seeking an order that Everdry carry out remedial work to those areas not already repaired at an estimated value of $35,000. 5 On 12 December 2000, Ison & Co Pty Limited was joined as a respondent and on 19 January 2001 Dunmore Sand & Soil Pty Limited (Dunmore) was joined as a respondent. 6 On 21 December 2001, Bignell and Everdry agreed that Ison may be released from attendance and participation of the hearing until further notice. There was no further notice given and Ison seeks to have the amended summons and amended notice of appeal struck out as against it. Ison was released from the hearing at the Tribunal. As the plaintiff agreed that Ison should be released from the Tribunal proceedings, it cannot now maintain an appeal against it. Ison should not be a party in any appeal in this court. It is my view that proceedings should be dismissed against it. I make an order in accordance with paragraph 1 of the third defendant's notice of motion filed 15 October 2002. The plaintiff is to pay the third defendant's costs of the motion and of the proceedings. The decision of the Tribunal Member 7 At the Tribunal hearing, the parties remaining were Bignell, the builder, Everdry, who performed the rendering, and Dunmore, who supplied the sand. Both the builder and renderer's experts reports agreed that the cause of the pop-outs was the pyrites in the sand 8 Member Mallam, in his reasons dated 30 May 2002, stated that a number of possibilities existed as to why the render failed. They were: firstly, incorrect materials used in the render mix; secondly, incorrect proportioning of materials used in the render mix; thirdly, contaminated materials used in the render mix and fourthly, poor mixing of the render mix. The Tribunal Member made a finding that, on the balance of probabilities, he was not satisfied that the pop-outs occurred as a result of pyrites in the sand [para 38]. That is, the plaintiff was unsuccessful in its case against Dunmore. The Tribunal member continued under the heading "Poor mixing of the render mix": "39. The third respondent has alleged that the Plaster Master additive was not mixed properly resulting in concentrations of it occurring in the render mix. It is alleged by the third respondent that Plaster Master contains shale. 40. I am not persuaded by this argument. I have heard from Mr Edenden that he took especial care as this was the first time he used the Plaster Master product. It seems from the evidence of Ms McNulty who examined the size of the particles in the Plaster Master that there were shale particles up to 5 mm in size in it whether or not it was mixed properly. 41. The principle cause of the pop-outs in areas above the damp course is particles of shale up to 5mm in diameter in the Plaster Master additive used by the first respondent and not from pyrites in the sand. 42. The applicant and first respondent have indicated they have no issues between them. Accordingly, I make no findings as to whether the cause of the render failure at the base of the wall has resulted from improperly brining the damp course with render, or from the shale in the Plaster Master. 43. The sand supplied by the third respondent, whilst it did contain small quantities of pyrites, did not contain a sufficient quantity, or particles of pyrites of sufficient size to cause the pop-outs." 9 The plaintiff did not join the supplier of Plaster Master as a party in the Tribunal proceedings. 10 On 30 March 2002, the tribunal member delivered reasons for his judgment and dismissed the claim by the plaintiff against all the defendants. 11 Section 67 of the Consumer Trader and Tenancy Tribunal Act 2001 (the Act) allows for an appeal to be made to this court on a question of law. An appeal may only be made with leave of the court. A reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal. The onus lies on the plaintiff to demonstrate that there has been an error of law. Section 67(3) of the Act provides that, after deciding the question of the subject of an appeal, the court may, unless it affirms the decision of the Tribunal on the question that should have been made by the Tribunal, remit its decision on the question to the Tribunal and order a rehearing of the proceedings before the Tribunal. Grounds of appeal 12 The first ground in the amended notice of appeal is that the tribunal Member failed to consider and take into account the following evidence: Mr Bignell's observations of the render blistering and flaking with brown rust-like stains in the wall throughout the rendered surfaces. Mr Spindler's observations of brown rust-like stains in the wall, crumbling and fretting of the render, peeling of paint and efflorescence to the lower sections of the wall, and that there was no deterioration to the repaired/reinstated render. Mr Trinh Cao's observations of black particles of up to 2 to 3 mm in diameter. 13 Similarly, the second ground of appeal is that the Tribunal Member came to the conclusion that the principle cause of the pop-outs in areas above the damp course is particles of shale up to 5mm in diameter in the Plaster Master without there being any evidence or, alternatively, sufficient evidence to support such a finding. 14 Thirdly, the plaintiff submitted that, in coming to the conclusion that the cause of the pop-outs was caused by shale in the Plaster Master and not pyrites in the sand supplied by Dunmore Quarries, the Tribunal Member failed to consider the fact that there was no deterioration of the repaired or reinstated wall, which used different sand not supplied by Dunmore Quarries, yet used Plaster Master and the observations made by Mr Mark Bignell and Mr John Spindler that there were brown rust like stains in the walls. In addition, the plaintiff also submitted that the Tribunal Member failed to consider the expert testimony from Mr Cao that such brown rust like stains were consistent with pyrites and the expert testimony from Mr Cao that there were no pyrites detected in a bag of renderer's clay. The Tribunal member considered each of the experts' reports, namely those of Mr Cao, Ms McNulty and Mr Spindler. Ms McNulty was the only expert who actually analysed the materials used in the rendering. Her view was preferred. These findings were reasonably open to the Tribunal Member. These grounds of appeal seek to relitigate findings of fact made by the Tribunal Member. There is no place for judicial review because no error of law has taken place. 15 The plaintiff further submitted that the Tribunal Member, having ordered that the second and third defendant be joined as defendants pursuant to cl 27(1) of the Fair Trading Tribunal Regulation 1999, erred in not finding the second and third defendants liable; ordering that the plaintiff pay the second and third defendants' costs and not giving the plaintiff the opportunity to be heard on the Tribunal's direction that such parties be joined to the proceedings. The obligation was upon the plaintiff to request an adjournment if it considered that Plaster Master was responsible for the pop-outs. It had released the supplier of Plaster Master, Ison & Co Pty Ltd from attendance and participation in the Tribunal proceedings. Grounds 7(a) to 7(d) inclusive of the amended notice of appeal are doomed to failure and should be dismissed. 16 The fifth ground of appeal in the amended appeal is in a different category. The plaintiff submitted that in coming to the conclusion that there were no issues between the plaintiff and the first defendant the Tribunal Member failed to consider firstly, that the parties were originally jointly represented as the plaintiff was in agreement with the first defendant as to the cause of the defective render; secondly, when a subsequent cause of the defective render was alleged by the third defendant, the plaintiff believed there would be a conflict if joint representation continued; thirdly, on the second day of hearing, the Tribunal Member was expressly advised by both the plaintiff's and first defendant's legal representatives that each party would retain their own and separate legal representation; and fourthly, the Tribunal Member failed to consider advice from the parties' legal representatives that the parties were separately represented due to the conflict of interest. The plaintiff's affidavit evidence establishes that on the first day of the hearing, Counsel Mr Wilson who was jointly representing Bignell and Everdry, found himself in a position of a conflict of interest when it became apparent that Dunmore was alleging that the materials used by Everdry were the cause of the pop-outs. At the second day of the hearing, the plaintiff and first respondent were separately represented. 17 At paragraph 42, the Tribunal Member in his reasons indicated that the plaintiff and first respondent had no issues between them, which the plaintiff submitted is an error at law. Both the first respondent's and plaintiff's experts evidence had opined that the cause of the pop-outs was pyrites in the sand supplied by Dunmore. The Tribunal Member rejected the sand pyrites as the cause of the pop-outs. 18 Aside from stating at paragraph 42 that Bignell and Everdry had indicated that they had no issues between them, the Tribunal Member stated that he made no findings as to whether the cause of the render failure at the base of the wall had resulted from improper bridging of the damp course with render or the shale from the Plaster Master. However, the Tribunal Member, at paragraphs 39 and 40, stated that he was not persuaded by the argument that the Plaster Master additive was not mixed properly. Rather, the Tribunal Member was of the view that the cause of the pop-outs was the shale particles of up to 5 millimetres in size which were in the product Plaster Master, and these particles would have caused the pop-outs, whether or not the render mix was mixed properly. However, it is at least arguable that the Tribunal Member's statement in paragraph 41 did not accurately reflect the position of the plaintiff and first respondent and he could have proceeded to make findings against Everdry, at least in relation to the bridging of the damp course with render. 19 It is my view that the issues raised in the grounds of appeal in paragraph 7(e) of the amended notice of appeal should be permitted to be ventilated at trial. I grant leave for the plaintiff to file the amended notice of appeal limited to paragraph 7(e). 20 The court orders that: (1) The proceedings against the third defendant, Ison & Co Pty Limited are dismissed. The plaintiff is to pay the third defendant's costs of the motion and of the proceedings. (2) Leave is granted to file both an amended notice of appeal, the grounds being restricted to paragraph 7(e) and the amended summons. (3) The plaintiff is to pay the first and second defendants' costs thrown away by the amendments. ********** Last Modified: 02/27/2003 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.