Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Kapetanellis v Hatem [2016] NSWCATAP 41 Hearing dates: 22 July 2015, 13 November 2015 Date of orders: 16 February 2016 Decision date: 16 February 2016 Jurisdiction: Appeal Panel Before: L Robberds QC, Senior Member D Goldstein, Senior Member Decision: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act, the hearing of the appellant's application to amend his notice of appeal is dispensed with. 2. Leave is granted to the appellant to amend his notice of appeal by adding a further ground of appeal in these terms: "There was a failure on the part of the Tribunal Member to provide adequate reasons for her findings in paragraph 42 of her reasons for decision." 3. The notice of appeal will be treated as having been amended to include that ground. 4. The appellant is ordered to pay the respondent's costs incurred in connection with the appellant's application to amend the notice of appeal. If those costs are not agreed then they are to be assessed under the legal costs legislation as contained and defined in the Legal Profession Uniform Law Application Act 2014….. . 5. The appellant's appeal in relation to the ground of appeal referred to in orders (2) and (3) above, is allowed. 6. The appellant's appeal in relation to the Tribunal's findings concerning item 12 – the retaining wall, is dismissed 7. The balance of the appellant's application under the Home Building Act filed in the Home Building Division of the Consumer Trader and Tenancy Tribunal on 27 September 2012 is remitted to the Consumer and Commercial Division of the Tribunal for hearing by a differently constituted Tribunal. 8. The matter is to be listed on a date to be fixed by the Registrar for further directions and the obtaining of a date for hearing. 9. The costs of the hearing of the appeal are reserved. If either party seeks an order for costs of the hearing of the appeal they should file and serve written submissions in support of the order within 21 days from the date of these orders. The other party should file and serve written submissions in reply within 21 days after service of the first written submissions. If the parties or one of them seek a hearing on the application for an order for costs, then they should list the proceedings before the Registrar to obtain a date for the hearing. Otherwise the application will be heard on the papers. Catchwords: Home Building Act 1989 – dispute as to method and cost of rectification of work carried out by owner-builder – damages to be assessed on a once and for all basis – whether leave to appeal should be granted – alleged threat to the stability of part of the work – obligation of Tribunal to give adequate reasons for decision – amendment of grounds of appeal Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Home Building Act 1989 (NSW) Cases Cited: Aon Risk Services Limited v Australian National University [2009] HCA 27 (2009) 230 CLR 175 Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 Bellgrove v Eldridge [1954] HCA 36 (1954) 90 CLR 613 Collins v Urban [2014] NSWCATAP 17 Khan v Kang [2014] NSWCATAP 48 Kirkby v Coote [2006] QCA 61 Makita (Aust) Pty Ltd v Sprowles (2001) 52 NSWLR 705 The Owners Strata Plan 57504 v Building Insurer's Guarantee Corporation [2008] NSWSC 1022 Category: Principal judgment Parties: Chris Kapetanellis (Appellant) Sharyn Hatem (Respondent) Representation: Counsel: J S Drummond (Appellant) J Young (Respondent) Solicitors: Laliotis Lawyers (Appellant) Gavel and Page (Respondent) File Number(s): AP15/15563 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 3 March 2015 Before: C Paull, Senior Member File Number(s): HB/12/49674 REASONS FOR DECISION 1. On 27 September 2012, Mr Chris Kapetanellis (the appellant) filed an application under the Home Building Act 1989 in the Home Building Division of the Consumer, Trader and Tenancy Tribunal against Sharyn Hatem (the respondent). The amount claimed was $232,608.72. 2. The application showed that the dispute was about water leakage. Documents lodged with the application included a Certificate of Insurance which showed that a contract of insurance complying with s 95 of the Home Building Act 1989 had been issued by QBE Insurance (Australia) Limited in respect of residential building work carried out by the owner-builder, Sharyn Hatem in a suburb in Sydney. In the Tribunal's reasons for decision it was stated that in essence the application was brought by a successor in title against the owner-builder, as provided for under the Home Building Act and within the time stipulations of the legislation thus giving the Tribunal jurisdiction to determine it. It was also stated that no argument to the contrary was raised and that the application alleged defective building work. 3. On 3 March 2015, after a contested hearing, the Tribunal ordered the respondent to pay the appellant $135,338.96. 4. The Civil and Administrative Tribunal was established on 1 January 2014. The Tribunal was given jurisdiction over matters, such as the present matter, that had been commenced in the Consumer Trader and Tenancy Tribunal. While this matter was heard on 3 November 2014 the proceedings were nevertheless "unheard proceedings:" Civil and Administrative Tribunal Act, Sch 1, cl 6 and 7. As such, while the Tribunal has jurisdiction to determine the application, the provisions of any Act, statutory rule or other law that would have applied to or in respect of the proceedings continue to apply: Civil and Administrative Tribunal Act, Sch 1, cl 7(3)(b).' Notice of Appeal 1. The appellant filed a notice of appeal which set out eight grounds of appeal. They can be summarised as follows: 1. The Member erred in admitting and accepting the opinion of Mr O'Mara, the expert relied upon by the respondent as contained in a plan to rectify the drainage system and his report which set out his estimate of the costs of installing the drainage system contained in that plan. It was said that the member erred on the basis that Mr O'Mara was not qualified as a hydraulic engineer, but a plumber and therefore, not a person suitably qualified to express the opinions contained in the plan and the report. 2. Mr O'Mara did not, prior to the preparation of the plan and the report, have regard to, take into consideration or cause the plan and the report to comply with Australian Standard ASNZ 3500.3: 2003, or the Kogarah Council Code, and/or good hydraulic engineering practice. 3. Mr O'Mara did not, nor did he cause others, for the purposes of preparing the plan and the report, calculate as required by the Standard, the Code or good hydraulic engineering practice, the overland flow rate of surface water, and/or the capacity of the pit located in the garage premises to cater for the water flowing from the adjacent driveway in a 1 in 20 year storm. 4. The plan and report did not include the provision or costing for five additional downpipes, notwithstanding that Mr O'Mara had conceded at a conclave that five additional downpipes were required, three being located along the eastern side of the building. 5. By reason of the above matters, the plan and the report did not set out the necessary rectification works to the existing drainage system so that it complied with the Standard, the Code and good hydraulic engineering practice. 6. It was said that the Member erred: 1. By accepting the opinion and costing of Mr O'Mara and in holding that the hydraulic system to be installed in accordance with the plan, at a cost of $42,000 was reasonable and appropriate. 2. In failing to accept the evidence of Mr Daher, he being a suitably qualified hydraulic engineer, that his hydraulic plan was based upon calculations for the overland flow and the pit size in the garage to accommodate the 1 in 20 year storm in compliance with the Standard, the Code and good hydraulic engineering practice. 3. In failing to accept the evidence of Mr Daher that his proposed hydraulic plan, complied with the Standard, the Code and good hydraulic engineering practice. 4. In holding that it was reasonable to rectify the pool surrounds at the western end by relaying only the tiles at a cost of $2,100.00. 5. In failing to hold that due to compaction of the sub soil the pool surrounds at the western end required removal of the overlaying concrete slab, rectification of the supporting retaining wall, and relaying of the surface tiles at a cost of $28,814. 6. By reason of the grounds set out above in awarding the appellant the sum of $135,338.96. 7. By reason of the grounds set out above in failing to enter an award for the appellant in the sum of $241,283.67. 1. The notice of appeal also sought leave to appeal for the following reasons: The issues raised in the Appeal raise both Questions of Law and Questions of mixed Fact and Law. On the issue of Questions of Law the learned Senior Member erred in admitting and relying upon an expert who was not qualified and whose Hydraulic Plan did not comply with AS NZ 3500 of 2003 or the Kogarah Council Storm Water Code. On the issue of mixed Questions of Fact and Law the learned Senior Member preferred the Hydraulic Plan and costings as proposed by Mr. O'Mara the expert called by the Respondent and not that of Mr Daher a suitably qualified Engineer whose Hydraulic Plan complied it (sic) the standard and code. 1. In support of his claim for leave to appeal, the appellant completed the notice of appeal by filling in paragraph 12B claiming that the decision was not fair and equitable. In describing why the decision was said not to be fair and equitable, the form repeated what had been stated above as to the reasons why leave to appeal should be granted. 2. The appellant responded to the questions in the printed notice of appeal form – what evidence did you give at the hearing? – What documents did you show the Tribunal? – by giving the following response: Mr Daher, a Hydraulic Engineer gave evidence and produced a hydraulic plan that: (a) was based on calculations of both overland flow rate and the required capacity of the Pit in the Garage; (b) complied with both good engineering practice and in addition AS NZ 3500 of 2003 and the Kogarah Council Stormwater Code, and (c) the cost to install his hydraulic system was $133,269.39. 1. In answer to the questions in the form – What evidence did the other party give? – What documents did the other party show the Tribunal? - the appellant responded: Mr O'Mara gave evidence that: (i) He had performed no calculations of the overland flow nor the capacity of the Pit in the Garage; (ii) That his Hydraulic Plan was not based upon; (a) any calculations referred to in 12B (ii) above and; (b) did not comply with or have regard to AS NZ 3500 of 2003 or the Kogarah Council Stormwater Code. 1. It was said in the form that the Member should have preferred the evidence of Mr Daher over the evidence of Mr O'Mara as the former's hydraulic plans and costs complied with AS NZ 3500 of 2003 and the Kogarah Council Storm Water Code whilst the later did not, nor was it based on any calculations regarding overland flow or capacity of the Pit in the Garage. Reply to Appeal 1. In the respondent's reply to appeal, the respondent disputed the grounds of appeal, denied there were any errors as alleged by the appellant and disputed that Mr O'Mara was not qualified to express his opinion. Brief History of the Tribunal Proceedings 1. After the application was filed, the parties' experts attended an onsite conclave at which a tribunal member presided. As a result of that conclave almost all of the matters in dispute were resolved. There were only two issues not resolved, namely the method and cost of rectification of what was described as item 12 (replacement of tiles along the pool edge) and the method and cost of rectification of what was described as item 20 (hydraulic issues). 2. The appellant sought orders for the amount agreed to in the conclave and the amounts he claimed for rectification of items 12 and 20. 3. The signed conclave schedule (excluding items 12 and 20) allowed $51,424.40 plus 12% margin, 15% overheads and profits and 10% GST, for the cost of rectification of the items, the subject of the proceedings. The Retaining Wall (Item 12) 1. Both parties called expert witnesses. Mr Alan Browne, a building consultant since 1988 was called by the appellant. Mr Glen Sim who had participated in the building construction and building consultancy industries since 1991, was called by the respondent. 2. Mr Browne was engaged by the solicitors for the appellant and one of the matters on which he was asked to report was described as follows: 8. Pool Area – failed retaining wall: and cracked tiles. Can you please address this, it has been suggested that the retaining wall adjacent to the tiling at the eastern end of the pool has moved away from the pool, hence causing tiling to subside. Please provide procedure to rectification and costs. 1. Another expert called by the appellant was Mr Angelo Antidormi, a qualified building consultant and practising quantity surveyor with approximately 33 years' experience in the building industry. One of the things he was asked to do was prepare a Scott Schedule setting out the listed defects by the parties together with the estimate to rectify those defects appearing in three reports which were identified. 2. Item 12 in that schedule listed an item in these terms:- Pool Area Failing Retaining Walls & Cracked Slab and Tiles 1. The schedule was completed showing a cost to carry out the work itemised in the schedule to rectify this defect at $24,814.40. 2. Pars 30 and 31 of the appellant's written submission dated 19 June 2015 described the issues as to the alternative methods of rectification in the following terms:- 30. At the conclave Mr Browne …. and Mr Sim …. agreed as to two alternative methods to rectify this defect as follows: (i) remove the tiles and insert a thicker screed then replace the tiles $2,100.00. (ii) remove and replace the concrete slab and tiles $7,110.00. 31. Prior to the conclave, Mr Antidormi gave evidence that the cost to remove and replace the tiles, concrete slab and retaining wall was $24,814.00. 1. The appellant concluded his written submissions with a submission that the Tribunal should award the appellant the sum of $24,814.00 to rectify the defects to the slab and tiles located at the eastern end of the swimming pool. The Tribunal's Reasoning on the Retaining Wall – Item 12 1. The Tribunal Member noted that following the conclave, the only point of difference between Mr Browne and Mr Sim was whether to carry out the agreed method of rectification at the agreed cost of $2,100.00, it was also necessary to go further and remove the existing slab or the retaining wall. 2. The Member noted that Mr Sim's view was that the retaining wall had ceased to move and there was no need to remove the slab or retaining wall. 3. The Member noted that Mr Browne was of the opinion that an engineer should be engaged and further exploratory work undertaken, so as to ascertain whether movement had ceased. 4. The Member went on to say that if she accepted Mr Sim's view then both experts agreed that a further $2,100.00 should be added to the total amount agreed at the conclave and that they agreed that if she accepted Mr Browne's suggestion to engage an engineer and undertake inspections, the figure should be $7,110.00. 5. The Member noted that at the hearing the appellant sought $24,814.00 for the removal and replacement of the retaining wall and alternatively, the appellant at the very least sought $7,110.00 to remove the concrete slab to inspect and ensure that the fill was properly compacted. 6. The Member then recorded that ultimately she was persuaded by the respondent's submission that Mr Browne had not stated that movement was still occurring. Mr Browne put the matter no higher than that further investigation was required, to ascertain if movement had ceased and that an engineer be retained to opine on the matter. In the light of that and the opposing view of Mr Sim, the member was not satisfied that the appellant had proved his case and therefore only allowed $2,100.00 being the agreed cost to lay a new cement screed and relay tiles. That brought the cost of rectification (when added to what was agreed to in the conclave schedule) to $58,623.80 (see pars 18 – 20 of the Member's reasons for decision). 7. On its face, that finding of the Tribunal Member allowing the sum of $2,100.00 was a finding of fact. It was supported by the evidence referred to in the following pars. 8. Mr Sim, in cross examination, agreed that until one properly examined the retaining wall and the nature of the fill supporting the slab, one could not accurately predict whether or not the slab would deviate further in the future. (Appeal Book B, tab 22, page 446 / 40-44). However Mr Sim went on to say that he believed "it's settled". He was asked what he based that on and he said the number of inspections he had on the property over a period from November 2012 to approximately December 2013 and there appeared to be no difference, (see page 447 / 6 – 19). 9. Mr Sim denied that the slab needed to be replaced and said that the problem could be rectified by simply putting a thicker screed on top of the slab and then re-affixing the tiles on top of the screed – page 445 / 39–446 / 1. He also gave evidence that what he was proposing was not a stop gap measure – page 446 / 9-11. However he agreed that until one properly examined the retaining wall and the nature of the fill supporting the slab one could not accurately predict whether or not the slab would deviate further in the future – page 446 / 40-44. He also said that he could not really say what was going to happen in the future – page 447 / 24 and he could not tell how it was going to deflect in the future – page 448 / 1. 10. Mr Sim gave evidence that a lot of this was assumptions because you cannot see what is actually down underneath the slab. He was using his experience that he has had within the construction industry and what would happen to it – page 446 / 17-19. He agreed that in order to work out whether the fill was properly compacted you would need to remove the slab (page 448 / 3-7). He gave evidence that if the retaining wall was then in an adequate position you would need to compact the fill before you re-laid the slab and you would then at least have it compacted to the required standard, not subject to subsoil water movement eroding it and that one would then have a reasonable prediction about the future. He agreed that if the retaining wall was rotating out, to properly inspect the fill you would at least need to remove the slab and replace it – page 448/13 – 42. Although it is not abundantly clear from the transcript, it would appear that Mr Sim may have given evidence in cross-examination that if the slab were removed you could work out whether the fill was properly compacted and at the same time you could examine and satisfy yourself about the retaining wall – page 448/3 – 449/12. 11. In written submissions dated 21 July 2015, the appellant relied upon the evidence at transcript page 448/17 – 42 for a submission that Mr Sim, notwithstanding his "belief" that deflection of the concrete slab had ceased, however conceded that inspection of the supporting subsoil could not be inspected without removing the concrete slab and that therefore before anyone could provide ; any reasonable prediction about what deflection may exist in the future one would need to at least remove the concrete slab to inspect the fill." 1. We have had regard to transcript page 448/17 – 42 and note that the quoted concession attributed to Mr Sim by the appellant in the preceding paragraph does not exist in the transcript that we have been provided with. 2. It was further submitted that that the evidence makes clear that each expert required further investigation before "reasonable prediction" could be made regarding the likelihood of any further deflection of the concrete slab. It was said that that evidence was contrary to the finding made by the Tribunal Member. 3. The Appeal Panel does not see that the evidence relied upon at page 448/17 – 42, supports those submissions. It is clear to us that Mr Sim's evidence was that the slab had settled and that this opinion was based on the number of inspections he had on the property from November 2012 to December 2013. Refer transcript page 447/4 – 19. His evidence regarding the removal of the concrete slab as referred to in the appellant's submissions of 21 July 2015 was in our view to be understood in context of ascertaining whether the fill was properly compacted. We are of the view that this evidence did not nullify his clear evidence that in his opinion the slab had settled. In our view the Member was entitled to accept that evidence as she did in paragraph 19 of her Reasons. Mr Browne's Evidence 1. Mr Browne reported on 16 October 2013 on the question from the appellant's solicitors concerning the failed retaining wall and cracked tiles as follows:- 6.49 I observed that there is subsidence and cracking to the tiles at eastern and western sides of the pool with apparent movement to the timber retaining wall supporting this area … 6.50 I suggest a report and opinion by the structural engineer as to the cause and scope for remedial works necessary and the cost provided by the Quantity Surveyor be sought. 1. On page 10 of that report, Mr Browne set out two recommendations, one of which was to seek a report from a structural engineer to address structural issues. 2. In cross examination Mr Browne was taken to his suggestion that a report be obtained by a structural engineer and he agreed that he made that suggestion because he did not consider himself qualified to form his own opinion of the cause and scope for remedial works necessary in the pool area / failed retaining wall and cracked tiles. He also agreed that he did not consider himself qualified to form an opinion as to whether or not the retaining wall had ceased movement – page 449 / 14-29. 3. There was no evidence called by the appellant from a structural engineer, as suggested by Mr Browne. 4. The Appeal Panel is of the view that it can be seen from this evidence of Mr Sim and Mr Browne that it supported the findings made by the Tribunal Member in pars 18-20 of her reasons for decision. Leave to Appeal 1. The appellant did not make any written submissions as to whether the Tribunal Member's decision on this item 12 – the retaining wall - involved a question of law and if it did not, whether leave to appeal should be granted. It appears that the Tribunal Member's decision on item 12 involved only a question of fact. The High Court in Bellgrove v Eldridge [1954] HCA36 [1954] 90 CLR 613 at 619, stated, in relation to damages for breach of a building contract, that what remedial work is both necessary and reasonable in any particular case is a question of fact. 2. If the issue on item 12 involves only a question of fact, the appeal may only be made with leave of the Appeal Panel (s 80 (2) (b) of the Civil and Administrative Tribunal Act 2013) (the Act). As the application to the Tribunal was heard in the Consumer and Commercial Division, the Appeal Panel may only grant leave under s 80 (2) (b) if the Appeal Panel is satisfied that the appellant may have suffered a substantial miscarriage of justice because, relevantly here, the decision of the Tribunal was not fair and equitable. 3. Furthermore, the dispute over item 12 is not a matter which falls within the summary of the principles and examples given in Collins v Urban [2014] NSWCATAP 17 at [84], which ordinarily must be satisfied for a grant of leave to an applicant. 4. We are of the view that it cannot be said that the decision of the Tribunal on item 12 was not fair and equitable. The decision was one which was open on the evidence for the Member to make. 5. However in paragraph 39 of the appellant's written submissions dated 19 June 2015, reference is made by way of footnote to Kirkby v Coote [2006] QCA 61 at [59] and to The Owners Strata Plan 57504 v Building Insurer's Guarantee Corporation [2008] NSWSC1022 at [140]. 6. Kirkby, at [59] was relied upon to support the submission that because damages for breach of contract are assessed on a "once and for all" basis, the Tribunal was required to assess damages on the basis that the award accurately reflected the real and likely cost of restoring the innocent party to the position that that party would have been had the guilty party not breached the terms of its contract. 7. The strata plan case at [140] was relied upon to support the submission that it was not unreasonable for the respondent to bear the cost of removal of at least the concrete slab to provide some level of certainty that the slab would not continue to deflect as the supporting fill further compacts or is eroded by subsurface water flow. It was submitted that the reasonable cost of those works was at least $7,110.00. 8. The Kirkby case concerned a "pole house" [13]. The house was supported by ten wooden poles and forty steel posts [18]. In heavy rain, the footings under eleven of those poles or posts subsided, causing substantial damage to the house [13]. The trial judge found that the design of the footings was negligent because it did not comply with the recommendations of a geologist that the footings be founded into "dense basalt or onto interlocking boulders" [16]. Five of the failed footings were exposed and none of them was founded on rock [19] and [23]. 9. The defendants conceded that if the eleven failed footings had been founded on rock they would not have failed [18]. The question for decision was whether the other footings were performing and would continue to perform, in a satisfactory way, or whether they remained a risk of movement. The defendants contended that the only rectification required was the reasonable cost of underpinning the house where the footings had failed [64]. The plaintiffs claimed that they were entitled to the reasonable cost of demolishing and rebuilding the house with footings that conformed to the geologist's recommendations. 10. The trial judge awarded as damages the cost of demolition and reconstruction. He did so because the lesser scope of remedial works proposed by the defendants would leave the plaintiffs with an unacceptable continuing risk of structural failure. His decision was upheld by the Court of Appeal. 11. Keane JA with whom Williams JA agreed, referred at [39] to the contention of the appellants (defendants) that the 39 footings which did not fail during the downpour had not exhibited any sign of failure since the house was constructed in 1994. They submitted, as his Honour recorded, that "a possibility that the footings are not down to rock, in the presence of satisfactory performance over a long period of time, is not evidence of a defect giving rise to a risk of failure". 12. Keane JA said at [50] that having regard to the findings of the trial judge, "the threat to the stability of the building may not be "grave" in the sense of the obvious and immediate, but it is real". His Honour referred at [51] to the further finding of the trial judge "that partial underpinning would be a doubtful remedy in the sense that it would be unlikely to remove the threat to the stability of the building posed by the footings even though they have not yet failed". 13. At [58] his Honour said that the present case was not one concerned with a breach of duty which resulted only in aesthetic disappointment. The plaintiffs had not been given a "perfectly serviceable" house; "one which is effectively free of risk of slipping". Thus, his Honour said at [59], the plaintiffs should recover the amount of damages necessary to enable them to own a house free of risk so far as its stability is concerned. (See also The Owners Strata Plan 57504 v Building Insurer's Guarantee Corporation [2008] NSWSC 1022 at [132] – [138]). 14. The Appeal Panel is of the view that the Kirkby case is distinguishable from the facts in this appeal. The onus was upon the appellant to lead evidence that the threat to the stability of the slab and retaining wall was real. Mr Browne, the expert called by the appellant did not give evidence from which such a conclusion could be drawn. He recommended that a structural engineer be engaged to provide a report and an opinion as to the cause and scope of remedial works necessary for the failed retaining wall. No such evidence was placed before the Tribunal Member. 15. On the other hand, Mr Sim, while acknowledging that he could not tell whether the wall would deflect in the future, his opinion, based on the fact that for 13 months the wall had not moved and his experience that he has gained in the construction industry as to what would happen to the wall, was that the wall had settled. 16. In Kirkby the experts called by the respondents said there was a risk of movement. No such evidence was given in this matter. 17. The Appeal Panel is of the view that there is nothing stated in the Owners Strata Plan 57504 case at [140] which assists the case sought to be made by the appellant. 18. No submissions in writing were made on behalf of the appellant that leave to appeal should be granted in respect to item 12. In the above circumstances the Appeal Panel is of the view that no grounds have been shown for overturning the Tribunal member's findings in relation to item 12 – the retaining wall. Hydraulic issues (item 20) 1. In the respondent's written submissions dated 13 July 2015, reference was made to the fact that the appellant sought to challenge the decision of the Tribunal in relation to what was described as the stormwater claim and the swimming pool claim. It was submitted that in respect of each challenge, the appellant had not clearly identified the legal bases upon which he was entitled to appellate intervention. In particular, it was said that there was no clear articulation of any question of law for the purposes of s 80 (2) (b) of the Act or the grounds upon which leave to appeal should be granted under that section. 2. It was submitted that it appeared from the appellant's submissions that the challenge in relation to the stormwater claim was effectively to the fact that the Tribunal accepted the respondent's evidence over that of the appellant. It was said that that was not an error of law, and to the extent that leave was required, none of the circumstances justifying leave have been established. 3. In the following 28 pars those submissions were expanded. For the reasons which appear below, it is unnecessary for the Appeal Panel to deal in detail with those submissions. 4. Paragraph 42 of the reasons for decision of the Tribunal Member is the critical paragraph and it is appropriate that we here set out pars 37 - 43 of those reasons: 37. Notwithstanding this, it is not clearly apparent whether the system Mr Daher advocates was required when the local council issued development consent for the residential dwelling on 28 June 2005, or when the final occupation certificate was issued in May 2007 or indeed, became relevant any time in between. 38. Secondly, Mr Daher puts the matter no higher than that "This plan is typical of what is normally (my emphasis) installed to service a residence built at the time in 2007". 39. Finally, there is no doubt that the current pump system needs to be upgraded and its capacity increased. Both parties advocate this. It stands to reason that when this is done the capacity of the pumps to dispose of water will be increased. 40. Mr O'Mara has put forward a proposal to implement the increase in the pump capacity for $42,000.00. 41. Mr Daher's proposal, which in addition to increasing the pump capacity, also involves increasing the pit size, requires $133,269.39. 42. I am not satisfied the evidence shows that increasing and upgrading the pit will result in an additional improvement in the system, proportionate to the $133,269.39 required to implement the Daher proposal. 43. In light of the above, I award the $42,000.00 as put forward in the O'Mara proposal. 1. In the respondent's submissions dated 13 July 2015, it was said that it would appear that the primary challenge was to par [42] of the decision, namely, that the Tribunal was not satisfied that the evidence shows that increasing and upgrading of the pit would result in an additional improvement in the system proportionate to the $133,269.39 required to implement it. It was said that this finding should be read having regard to the context of the immediately preceding pars, and, in particular, the Tribunal's findings at pars [37] and [38]. Amendment of the grounds of appeal 1. During the hearing of the appeal, the Appeal Panel referred to par 42 of the Tribunal Member's reasons for decision and to the decision of Meagher JA in Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 and asked counsel for the parties whether the Tribunal Member was obliged to provide better reasons. 2. The question whether the Tribunal Member failed to provide adequate reasons was not a ground of appeal. At the conclusion of the hearing of the appeal on 13 November 2015, the Appeal Panel granted leave to the appellant to make an application to amend the notice of appeal. A direction was given that if such an application were made it was to be supported by written submissions. A direction was also given that if such an application were made, the respondent was to file and serve submissions in reply. It was noted that the parties had indicated that it was appropriate for the Appeal Panel to deal with the leave application on the papers. 3. On 20 November 2015 the appellant made application to amend the notice of appeal to include an additional ground in the following terms: 4A. Further and in the alternative to Grounds 1 to 3 of the Notice of Appeal, the Learned Senior Member erred in failing to provide adequate reasons in support of the determination made by her in paragraph 42 of the judgment on the following matters: (i) to address and determine the existence of admissible evidence to support the finding that each of the seven requirements found in Makita (Aust) Pty Ltd v. Sprowles (2001) 52 NSWLR 705 (Makita) had been satisfied thereby permitting the opinion evidence of Mr O'Mara to be relied upon; (ii) address and determine the basis upon which the O'Mara proposal complied with the relevant Australian Standard, good engineering practice and would protect the building from a 1 in 20 year event; (iii) address and determine the basis upon which the finding of increasing the pit size alone (at a cost of $11,312 excluding builder's margin and GST) supported the conclusion that those costs alone did not result in an additional improvement in the system proportional to the additional cost of $133,269.39; and (iv) address and determine how the following additional components of the Daher proposal: namely (a) increasing downpipes from 6 to 11 in number; and (b) installing a 1 150mm PVC pipe along the eastern boundary; did not provide by themselves and/or in conjunction with increasing the size of the pipe sufficient additional improvement in the system to justify the additional cost" set out in (iii) above. 1. The appellant supported that application with written submissions dated 19 November 2015. One of the submissions was to the effect that separate and apart from the alleged failure of the Tribunal Member to address and determine the requirements of Makita (Aust) Pty Ltd v Sprowles (2001) 52 NSWLR 705, that failure gave rise to a failure on the part of the Tribunal Member to provide adequate reasons in support of her determination to accept the opinion evidence of Mr O'Mara. 2. The respondent filed written submissions dated 27 November 2015 submitting that the application should be dismissed with costs because the appellant had not identified any legislative rule, principle or authority governing the grant of leave to amend the notice of appeal. 3. The respondent also submitted that no submission or evidence was relied upon identifying any reason for the appellant raising the proposed amendments so late. Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [5], [30] and [53], was relied upon to support that submission. It was submitted that for that reason alone, the amendment application should be dismissed with costs. 4. It was further submitted that the amendment should not be granted because it did not identify any clearly articulated arguable point. 5. It was submitted that to the extent that the appellant submitted that there were inadequate reasons going beyond the Tribunal Member's dealing with the Makita principles, the appellant had not identified in its application what matters were omitted from the proper reasoning of the Member. It was said for example that the appellant did not identify what evidence or other matters the Member ought to have addressed but failed to address adequately. It was said that the appellant had not identified the inadequacies of Mr O'Mara's evidence that were allegedly not addressed adequately in the reasons. 6. It was submitted that these were crucial steps so as to enable the Appeal Panel to determine the merits of the amendment application and whether the alleged absence of reasons was in any way material. It was submitted that the Appeal Panel cannot be satisfied that the amendments would be anything other than futile. 7. It was submitted that the respondent would have made additional submissions in relation to the question of the adequacy or otherwise of the Member's reasons as now sought to be submitted if the issue had been raised before. 8. One of the written submissions made by the appellant was that the failure by the Tribunal Member to address and determine the Makita principles was but one of two parts of the one issue, being the failure to give in support of that determination, adequate reasons regarding the application of the principles in Makita and to determine how, on the evidence, they have been applied. It was submitted that in that sense, the failure of the Tribunal Member to provide adequate reasons was a corollary to the failure to apply the relevant principles found in Makita. 9. The respondent replied to that submission by saying that if the proposed amendments were nothing more than a corollary to the submissions of the appellant already made in relation to Makita principles, then the amendments were unnecessary. If the proposed amendments were only a corollary to existing grounds of appeal then they did not take the matter any further and should be refused. 10. Finally it was said that if the amendment was granted, it should be on the condition that the appellant pay the respondent's costs of and incidental to the application on the basis that the matters identified in the submissions were special circumstances within the meaning of s 60 (3) of the Act. 11. This is a case where the Tribunal Member was obliged to give adequate reasons for her decision (Collins v Urban [2014] NSWCATAP 17 at [56] – [60]). Paragraph 42 of the reasons for decision of the Tribunal Member is the critical paragraph in those reasons. In that paragraph the Tribunal Member in effect dismissed the appellant's case which was based on the evidence of Mr Daher. Apart from the questions whether Mr O'Mara was an expert and whether his evidence complied with the Makita principles, the issue between the parties was whether an order for the payment of money should be made based upon Mr O'Mara's proposal or on Mr Daher's proposal. 12. The obligation to give reasons therefore required the Member to explain how she arrived at the conclusion in par 42. This was the critical conclusion in the decision. But no explanation or reasoning process was given as to how the conclusion was reached. There is no analysis of the evidence. No reason was given as to why the Member was not satisfied. There was no attempt made to explain what were the relevant legal principles to be applied. No explanation was given as to what was meant by "an additional improvement in the system proportionate to the $132,269.99 required to implement the Daher proposal." There was no reference to the evidence to support the conclusion that the proposal put forward by Mr O'Mara should be accepted in preference to the proposal put forward by Mr Daher. 13. A reason for the obligation to give sufficient reasons is that a failure to do so can and often does lead to a real sense of grievance that a party does not know or understand why the decision was made (Beale v Government Insurance Office of New South Wales at page 442). 14. In par 67 above we have referred to one of the written submissions made by the appellant in support of his application to amend the grounds of appeal. Another written submission was: "The primary challenge as contained in the Notice of Appeal was therefore directed to the omission of the Learned Senior Member to apply the correct principles, not the wrong application of the correct principles. Inherent in that approach was the issue that once it had been demonstrated that the Learned Senior Member had failed to apply or determine those principles, that inexorably led to the conclusion the judgment did not contain adequate reasons to support the final determination as found in paragraph 42 of that judgment." Having regard to the Appeal Panel's obligation to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicality or legal forms (s 38 (3) of the Act), we are of the view that we should treat these two submissions as a submission that the notice of appeal be amended to include a ground: "There was a failure on the part of the Tribunal Member to provide adequate reasons for her findings in paragraph 42 of her reasons for decision" (cf Khan v Kang [2014] NSWCATAP 48 at [15]). 15. For the reasons set out below, we do not accept the submissions made on behalf of the respondent opposing the application for leave to amend. 16. Section 53 (1) of the Act enables the Tribunal to make any amendments to any document (for example, an application or an appeal) filed in connection with the proceedings that the Tribunal considers to be necessary in the interests of justice. It is true that the appellant did not provide any submission or evidence as to why the application was made so late. However apart from the submission in par 73 above and the question of costs, the respondent has not drawn our attention to any prejudice that she will suffer if the notice of appeal is amended. We deal with the par 73 submission below. 17. The appellant did not provide any reason for raising the matter the subject of the proposed amendment so late. However the Appeal Panel is of the view that the passages from the decision in Aon Risk Services Limited v Australian National University [2009] HCA 27 (2009) 230 CLR 175 at [5], [30] and [53] do not mean that the Appeal Panel should refuse the amendment. In par 5, French CJ makes the point that the application for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. There was also an irreparable element of unfair prejudice in unnecessarily delaying proceedings. His Honour referred to the time of the Court being a publicly funded resource and that inefficiencies in the use of that resource arising from the vacation or adjournment of trials, are to be taken into account. 18. In par 30 his Honour stated that the decision in JL Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions. His Honour further stated that also to be considered was the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes. 19. In par 53 his Honour referred to the fact that it was pointed out to the solicitor for the ANU, in cross examination that his affidavit did not offer any explanation for the need to amend. 20. There will be additional costs incurred in dealing with this application to amend, but the matters raised by his Honour in pars 5 and 30 do not arise here. The hearing of the appeal has concluded. No further days are required for hearing time as a result of the application for the amendment. 21. At par 106 in the Aon decision, Gummow, Hayne, Crennan, Kiefel and Bell JJ stated that given the requirements of the relevant rule and the effects associated with delay, it was incumbent upon the ANU to tender an explanation as to why the matter had been allowed to proceed to trial in its existing form. Their Honours stated that the statements made by counsel foreshadowing leave to amend were not evidence and that the ANU's solicitor's later affidavit did not support them. 22. We are of the view that because the application for leave to amend has not brought about any adjournment of the appeal, the statements made by the High Court in pars 5, 30, 53 and 106 do not indicate that the application to amend the notice of appeal should be refused. 23. In our view the respondent's submissions recorded in pars 71 and 72 are answered by what we have recorded in par 78. We are of the view that the deficiencies in par 42 of the Tribunal Member's reasons are recorded in par 78 and are obvious. 24. The respondent has been given the opportunity to make all submissions she wishes to make on this question of the proposed amendment. We are unable to see how it can be said that the respondent is prejudiced because she would have made additional submissions if the matter had been raised before it was raised. 25. The application to amend has resulted in the respondent incurring additional legal costs which would not have been incurred had the proposed new ground of appeal been included in the notice of appeal. The Appeal Panel considers that is a relevant matter and amounts to special circumstances within s 60 (2) of the Act. There should be an order that the appellant pay the respondent's costs incurred in connection with the application for amendment. 26. We consider that it is necessary in the interests of justice to grant leave to the appellant to amend the notice of appeal (cf Bajramovic v Calubaquib [2015] NSWCA 139 at [41] and [44]). We have come to that conclusion because: 1. The decision awards the appellant $42,000 in connection with item 20, Hydraulic Services, when the appellant was claiming $133,269.39 ; 2. Considerable time and legal costs have been expended on whether the award should be $42,000 or $133,269.39 ; 3. The reasons for decision do not give adequate reasons for the award of $42,000; and 4. The notice of appeal does not include a ground of appeal that the Tribunal's reasons were inadequate. 1. For the above reasons the Appeal Panel is of the view that leave should be granted to the appellant to amend his notice of appeal to add as a ground: "There was a failure on the part of the Tribunal Member to provide adequate reasons for her findings in paragraph 42 of her reasons for decision." The notice of appeal will be treated as amended to include that ground. 2. For the reasons set out in pars 77 and 78 above, the Appeal Panel is of the view that the appeal should be allowed. 3. Having regard to the fact that we have upheld the Appeal on the hydraulic issue for a lack of reasons, and having regard to the order set out below which remits the hydraulic issue to the Consumer and Commercial Division of the Tribunal for hearing by a differently constituted Tribunal, we do not think that it is necessary that we deal with the question of whether Mr O'Mara can be treated as an expert as contended for by the appellant. That issue is best left with the Member who hears the remitted application. Orders 1. The Appeal Panel makes the following orders: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act, the hearing of the appellant's application to amend his notice of appeal is dispensed with. 2. Leave is granted to the appellant to amend his notice of appeal by adding a further ground of appeal in these terms: "There was a failure on the part of the Tribunal Member to provide adequate reasons for her findings in paragraph 42 of her reasons for decision." 3. The notice of appeal will be treated as having been amended to include that ground. 4. The appellant is ordered to pay the respondent's costs incurred in connection with the appellant's application to amend the notice of appeal. If those costs are not agreed then they are to be assessed under the legal costs legislation as contained and defined in the Legal Profession Uniform Law Application Act 2014….. . 5. The appellant's appeal in relation to the ground of appeal referred to in orders (2) and (3) above, is allowed. 6. The appellant's appeal in relation to the Tribunal's findings concerning item 12 – the retaining wall, is dismissed 7. The balance of the appellant's application under the Home Building Act filed in the Home Building Division of the Consumer Trader and Tenancy Tribunal on 27 September 2012 is remitted to the Consumer and Commercial Division of the Tribunal for hearing by a differently constituted Tribunal. 8. The matter is to be listed on a date to be fixed by the Registrar for further directions and the obtaining of a date for hearing. 9. The costs of the hearing of the appeal are reserved. If either party seeks an order for costs of the hearing of the appeal they should file and serve written submissions in support of the order within 21 days from the date of these orders. The other party should file and serve written submissions in reply within 21 days after service of the first written submissions. If the parties or one of them seek a hearing on the application for an order for costs, then they should list the proceedings before the Registrar to obtain a date for the hearing. Otherwise the application will be heard on the papers. ********** 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: 16 February 2016