Civil and Administrative Tribunal New South Wales Medium Neutral Citation: MGB Building Pty Ltd v Hammond [2016] NSWCATAP 92 Hearing dates: 27 November 2015 Date of orders: 28 April 2016 Decision date: 28 April 2016 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President T Simon, Senior Member Decision: (1) The appeal is dismissed Catchwords: Whether sufficient findings of fact, whether evidence supported findings. Legislation Cited: The Civil and Administrative Tribunal Act 2013 Home Building Act 1989 Civil and Administrative Tribunal Act 2013 Cases Cited: Bellgrove v Eldridge [1954] HCA 36 Ruxley Electronics and Construction Ltd v Forsyth (1999) AER 268 Collins v Urban [2014] NSWCATAP 17 Texts Cited: Nil Category: Principal judgment Parties: MGB Building Pty Ltd (Appellant) Michael Bee (Appellant) Roger and Simone Hammond (Respondent) Representation: Counsel: T Davie (Appellant) G Carolan (Respondent) Solicitors: Grant Spedding (Appellant) Harris and Harris (Respondent) File Number(s): AP 15/51663 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Citation: Unrestricted Date of Decision: 11 August 2015 Before: J Smith, Senior Member File Number(s): HB 13/13821 and HB 13/63879 Reasons for decision Background 1. This is an appeal from a decision made in the Consumer and Commercial Division of the Tribunal published on 11 August 2015 (the Decision). The Decision concerned two applications in the Tribunal's Home Building list. The first application was brought by the respondent to this appeal (who we shall refer to as the homeowners) against the appellant (who we shall refer to as the builders). The second application was brought by the builders against the homeowners. The result of the Decision was to require the builders to pay to the homeowners the sum of $357,843.59 and for the homeowners to pay one of the builders (namely Mr Bee) the sum of $8,819.93. The builders appealed the Decision. 2. The applications arose out of a contract between the parties requiring the builders to perform residential building work being renovations and extensions to an existing home. A significant issue was whether water proofing works (which had been conducted by a Mr Jones and which the parties agreed was defective) was work for which the builders were responsible or was work for which Mr Jones' responsibilities were to the homeowners. Grounds of appeal 1. The Civil and Administrative Tribunal Act 2013 (NSW) (the Act) sets out the basis upon which appeals from decisions of the Consumer and Commercial Division of the Tribunal can be made. Section 80(2)(b) of the Act provides that an appeal may be made of right on any question of law, or with leave of the Appeal Panel on any other grounds. The grounds upon which leave to appeal may be provided are regulated by cl 12 of Sch 4 of the Act. In summary cl 12 provides that an Appeal Panel may grant leave under section 80(2)(b) of the Act only if the Appeal Panel is satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable; 2. the decision of the Tribunal under appeal was against the weight of evidence, or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. The Decision may be summarised as follows: 1. Waterproofing and tiling work carried out at the premises was agreed between the parties to be defective for reasons other than materials or workmanship provided by the builders (# 23); 2. The builders conceded that the central door to the northern facing deck leaked and that rectification costing $17,110.00 (according to the builders' expert) was required (# 32); 3. The parties entered into a standard form Master Builders Association "Cost Plus" contract on or about 9 December 2005 (# 36); 4. One of the builders (Michael Bee) held a licence to do the subject work and the other builder (MGB Building Pty Ltd) did not hold a licence (#37); 5. A Mr Jones (who became bankrupt) performed certain work. This included laying waterproofing membrane over the decking. That work was defective and substantial damage and wood rotting resulted (# 39). Mr Jones was named in the contract at Schedule 3(d) as a nominated subcontractor to carry out floor and wall tiling (# 43); 6. The homeowners paid some $350,000 directly to various subcontractors with the knowledge and consent of the builders (# 47); 7. There was no other evidence on which the builders are able to rely to substantiate their argument of an agreement between the homeowners and Mr Jones in relation to waterproofing (# 49); 8. Mr Jones carried out the waterproofing as a subcontractor by mutual agreement of the parties to do the tiling (and by extension the waterproofing). Mr Jones was subcontracted by the builders to carry out the waterproofing (# 51); 9. The builders owed a warranty under s 18B of the Home Building Act 1989 (HBA) to the homeowners for the waterproofing conducted by Mr Jones (# 51) and the builders should compensate the homeowners for losses arising from the breach of the warranties in respect of the work performed by Mr Jones (# 52); 10. The builders submitted that the homeowners' claim was initially described as a claim for a repayment of $35,000.00 paid to the builder for remedial works and was never characterised during the hearing as a claim in damages. The builders submitted that had they been aware that the homeowners' claim was in damages the evidence would have been tested in cross examination. The builders submitted that it was unfair to change the nature of the claim (# 56). The Decision rejected the builders' arguments on the basis that the actual sum paid was agreed by the parties and represented a fair assessment of the value of the work performed and failure to cross examine would not alter the quantum (# 59); 11. The builders are liable for all of the defects whether the work was performed by Mr Jones or not. The homeowners are entitled to the sum of $104,402.98 for rectification work (# 60 and # 68); 12. In relation to the pool decking the Decision found the builders liable for the defects (# 66); 13. In respect of item 1 (concerning the pool deck) the homeowners are entitled to compensation in the sum of $41,971.21 (# 77); 14. In respect of item 2 (water ingress to ground floor living area), the builders' expert conceded rectification was required (# 79). The homeowners were awarded $205,090.60 (# 83). In coming to this conclusion the Tribunal accepted the evidence of Mr Hall (the homeowners' expert) that more extensive remedial work was required than the work proposed by Mr Hickey (the builders' expert) (# 80); 15. In respect of item 3 (sub-floor ventilation and storm water ingress) the homeowners were awarded $6,377.80 (# 86); 16. In respect of item 4 (front fence) the claim was rejected (# 92 and 93); 17. In respect of item 5 (efflorescence and cracking of masonry wall) the claim was rejected (# 98 and 99); and 18. The builders' claim for the costs of rectifying defects was rejected (# 103) but the claim for $8,819.93 being an amount outstanding under the contract was not in dispute (# 105). 1. The amount awarded to the homeowners totalled $357,843.59 made up as follows: Defective work $104,402.98 Item 1 (pool deck) $41,972.21 Item 2 (water ingress ground floor) $205,090.60 Item 3 (sub-floor etc.) $6,377.80 Total $357,843.59 1. In order to understand the basis for the appeal it is necessary to summarise the grounds of appeal set out in the notice of appeal as well as the submissions of the builders. This is undertaken in the following paragraphs. Grounds of appeal 1. The grounds of appeal are to the following effect: Water proofing contract 1. The builders submit that the Tribunal wrongly found that there was no "other evidence other than direct payments having been made to the water proofing subcontractor (ie. Mr Jones) that substantiated the builders' argument that there was an "agreement" between the homeowners and Mr Jones. Front deck 1. In considering whether or not the builders were entitled to claim payment for remedial works, the Tribunal failed to take account of the builders' argument based upon clause (g) of Part A of Schedule 1 of the contract. 2. In addition the builders submit that the Tribunal failed to afford the builders natural justice in awarding damages for remedial work when the builders assumed, and were entitled to assume, that the claim was for a refund of money paid. 3. There was no evidence to support the finding that the sum of $104,402.08 represented the cost of rectifying the defective work on the front deck. 4. There was no evidence to suggest that the works could not be remedied for $17,110.00 and no reason to reject the evidence of the builders' expert to that effect. 5. The Tribunal failed to take into account evidence that much of the rectification work costed by the homeowner's expert was not shown to be causally related to the relevant breach. Pool Deck 1. The Tribunal found that the builders were liable for water proofing work without finding that the water proofing work formed part of the builders contracted work. 2. The Tribunal found that the builders were liable for water proofing work in the absence of any evidence that the water proofing work formed part of the builders contracted work. 3. The Tribunal failed to take into account the evidence that much of the rectification work costed by the homeowner's expert was not shown to be causally related to the relevant breach. Sub floor area 1. There was no evidence that water ingress to the sub floor area was caused by any defect for which the builders could be considered responsible. Section 48 MA 1. The Tribunal failed to have regard to the builders' submission that s 48 MA of the HBA was applicable and the evidence that the builder was ready, willing and able to attend the site to rectify any defects found. This point was not repeated in the builders' submissions. In any event s 48 MA is not applicable to this dispute because the application was made prior to that section becoming operative. 2. In addition the builders seek leave to appeal on the basis that the Decision was not fair and equitable because it had the effect of imposing substantial liability on the builders for work that they did not do, were not asked to do and for which they were not paid. 3. The builders seek orders from the Tribunal that the homeowners pay to them the sum of $2,446.23 and the builder's costs of the appeal and below. The appellants' (builders) submissions 1. The builders' written and oral submissions are summarised below. 2. The builders' written and oral submissions state that the primary issue is whether the builders should be responsible for work that "it did not carry out and for which they were not paid". The submissions state that the appeal raises questions of law concerning the obligation upon the Tribunal to have regard to a party's submissions and a separate obligation to give adequate reasons. Item 1 – Pool deck surround 1. The builders submit that tiling but not waterproofing of the new deck extension formed part of the contract works. There was no evidence that waterproofing to the new deck was part of the contract works, or that a variation included such work or that the builders carried out such work. Rather, the builders submit that there was uncontradicted evidence that the waterproofing was carried out by Mr Jones. 2. The builders submit that in the Decision there was no express finding that the waterproofing was the cause of the defects. That submission, in our view, appears not to have regard to paragraph 23 (summarised earlier) or to the finding that the builders' expert wrote a report "predicated on the assumption" that "Jones was responsible for the defects arising from the waterproofing issues" (# 62 of the Decision). 3. The builders submit that the bases for the conclusion in paragraph 51 of the Decision (namely that the builders owed a warranty pursuant to s 18B of the HBA to the homeowners for waterproofing) was insufficient. The builders identify those bases as being: 1. Clause 3(d) of the contract, which in summary provides that the entire terms of the contract are set out in the contract, drawings and specifications apart from terms implied by statute; 2. The fact that the contract named Mr Jones as a nominated subcontractor to carry out floor and wall tiling; 3. Payments were made to Mr Jones directly resulting in the homeowners saving a considerable sum and the builders received no benefit but the payments were made with the knowledge and consent of the builders; and 4. That Mr Bee (one of the builders) acknowledged he had discussions with Mr Jones in relation to waterproofing, and he knew Mr Jones was to carry out that work, and he knew in some detail how he intended to carry out the waterproofing. 1. The builders submit that it was necessary for the homeowners to prove that the waterproofing had been done under a contract with the builders, but there was no evidence of such a subcontract. 2. The builders submit that the Tribunal erred in law by deciding or appearing to decide the issue of responsibility for the waterproofing on the basis that it was not sufficient for the builders to prove that the works did not form part of its contract but that the builders had to prove that the works were part of "someone else's contract". 3. The builders submit that Mr Hammond (one of the homeowners) conceded in cross examination that he had an arrangement with Mr Jones, and that he would pay him. That, it is submitted, is evidence of a contract. The transcript reveals that Mr Hammond conceded that he had an arrangement with Mr Jones that Mr Jones would "carry out the works for you under an arrangement with you and you would pay him". The transcript also reveals that Mr Hammond sued Mr Jones because "he was the right person to sue". 4. The builders submit that the Tribunal erred in law in finding that the builders (or one of them) was liable under the statutory warranties. Item 2 – North Elevation Water Ingress 1. The builders submit that this item concerned work undertaken by the builders not as part of the original work but rather work undertaken by the builders to rectify work performed by Mr Jones. 2. The builders submit that there was no evidence identifying which item of rectification related to which defect, or identification of a causal link between each alleged defect and the rectification work carried out. 3. The builders further submit that there was a conflict in the evidence given by Mr Hickey (the builder's expert) and that given by Mr Hall (the homeowner's expert) and that conflict was required to have been "dealt with by the Tribunal" but was not dealt with. It was also submitted that there was no evidence of defective waterproofing beyond the fact that Mr Hall had detailed elevated moisture levels which was contrary to Mr Hickey's evidence. 4. It was submitted that the conflict in evidence was required to be dealt with but was not dealt with. 5. The builders further submit that the findings of Mr Hickey on these issues do not appear to have been considered by the Tribunal. 6. The builders then submit that there were three errors of law made by the Tribunal. The first was that the Tribunal did not address the question of what would have been the reasonable amount to put the homeowners in the position they would have been in had the defects not occurred. The builders submitted such an approach was the correct approach having regard to the decision in Bellgrove v Eldridge [1954] HCA 36 (paras 618-9) and in Ruxley Electronics and Construction Ltd v Forsyth (1999) AER 268 at 284. 7. The second error of law, it was submitted, was that the Decision did not provide adequate reasons. There was also a "muddling up of the experts" (the expression used by Mr Davie) in that the Decision referred to an error by Mr Hickey and the fact that the Member preferred the evidence of Mr Hall as a consequence. In fact the error was made by Mr Hall. 8. The third error of law, it was submitted, was that the Tribunal linked items said to require rectification with the alleged defects in the absence of evidence as to causation. Item 3 – sub-floor ventilation and stormwater ingress 1. The builders submit that the Tribunal erred in law in making a finding of liability in the absence of any evidence or finding of contractual responsibility. The builders also submit that there was unchallenged evidence from Mr Hickey that an "ag line" and pit were holding water and "likely allowing water to drain beneath the subfloor". Repayment of money 1. The builders submit that they have been denied natural justice because part of the homeowners' claim had been described as a claim for a refund and not a claim in damages. The Decision in this respect has been summarised earlier in these reasons and appears in paragraphs 53 to 60 of the Decision. The homeowners' claim was that they had paid the builders $104,402.98 to rectify work that ought to have been covered under the builders warranty and they were to entitled to recover that amount. The Decision included the conclusion that whether the claim "be characterised as a claim for repayment of money paid or payment for damages from breach, I am satisfied that the actual sum paid was agreed by the parties and represented a fair assessment of the value of the work performed" (# 59). The Decision further decided that failure to have the opportunity to cross examine would not have altered the quantum. 2. The builders submit it was necessary to cross examine to test evidence to determine whether the amounts expended arose naturally from the breach of contract said to have taken place. The builders submit it would be unjust and a breach of natural justice for the homeowners to now be permitted to advance the claim as a claim for damages. 3. Part of the claim for $104,000.00 was an amount of $35,022.00 which was paid to the builders. The builders submit that they should not have to refund that amount because they were not responsible for Mr Jones' work. The contract (schedule 1 Part A subclause (g)) gave the builders an entitlement to be paid for correcting work which is defective for reasons not attributable to the builders. 4. The builders also submit that the errors described above are sufficient having regard to the authorities (see Collins v Urban [2014] NSWCATAP 17) to justify the Appeal Panel granting leave to appeal under the Act. Respondents' (homeowners) submissions 1. The homeowners did not file a reply but filed written submissions and made oral submissions at the appeal hearing. The effect of these submissions is summarised in the following paragraphs. 2. The homeowners submitted that the Tribunal found as matters of fact that: 1. The tiling and waterproofing performed by Mr Jones was always the responsibility of the builders (see # 50, 51 and 64); and 2. The builders were liable for defects to the pool decking, whether they resulted from defects in structure or whether they related to the fall of the deck, the flashing issues or the waterproofing issues (# 66). 1. The homeowners submit that no work described in the drawings which were incorporated into the contract was excluded from the contract work (schedule 3(b)), although the homeowners did nominate a subcontractor for floor/tiling, Paul Jones, and a subcontractor for the kitchen installation (schedule 3(d)). 2. The homeowners submit that the contract provided that the builders were responsible for the Works (clauses 1(a) and 1(c) amongst others), including in respect of supervision, management and control (clause 8). 3. The builders warranted the Works in accordance with the obligation under the Home Building Act 1989 (NSW) (the HBA) (clause 1(b)). 4. The contract drawings approved with the development application included "new deck extension FRC sheeting and tiled". The legend to the plan identified the area as "new waterproof deck FRC sheeting". By the time the contract scope was negotiated the parties clearly contemplated the work to be performed by the builders included tiling around all of the pool area – and hence waterproofing. This is confirmed in the evidence of Mr Bee (see T159.9. at first instance). 5. In reaching a decision as to who was responsible for the waterproofing work in the context of the building contract, the Tribunal referred to the evidence of the builders and the homeowners and to the cross examination of Mr Bee. The Tribunal found correctly that evidence of payment is not conclusive of the existence of a contract. There was no evidence that waterproofing was ever excluded from the builders' contract. Contrary to the submissions of the builders, waterproofing was clearly a part of the contract works identified on the contract drawings. 6. The Tribunal rejected the evidence of Mr Bee that he had not discussed the waterproofing work with Mr Jones and found that he knew in some detail how Mr Jones intended to carry out the waterproofing work (# 50 of the Decision). In the circumstances the Tribunal was satisfied that the work was completed at Mr Bee's request and under his supervision. The Tribunal accepted the evidence of the homeowners that they had not discussed the waterproofing part of the contract with either Mr Jones or Mr Bee. 7. The builders rely on a passage from the cross examination of Mr Hammond to support the proposition that he believed that he had a contract with Mr Jones by virtue of the fact that they initially commenced proceedings against him. The homeowners submit that in re-examination the evidence of Mr Hammond was firstly that Mr Hammond had an arrangement with Mr Jones that he would come on site and do the tiling but no other arrangement. The evidence was also that the homeowners initially sued Mr Jones because the builders advised them that the waterproofing was the problem and that that work needed to be redone. In short, the re-examination of Mr Hammond produced the evidence that Mr Hammond had been informed by Mr Bee that the waterproofing was defective and that Mr Jones was primarily responsible for that work (T 55 – 56). 8. The homeowners submit that the explanation as to why the homeowners initially commenced proceedings against Mr Jones, rather than against the builders is hardly surprising given the conversation between Mr Hammond and Mr Bee. 9. In respect of item 1 (pool deck) the Decision allowed the sum of $41,972.21 for the cost of rectification of the defective work. The homeowners submit that a proportion of this amount was made up of costs which were agreed between the experts as disclosed in the Scott Schedule. That amount totalled approximately $20,000.00. In addition there was the sum of $7,300.00 which was an amount proposed by the builders' expert, Mr Hickey and which was accepted by the homeowners. There was a further sum of $2,000.00 which the homeowners submit was an amount accepted by the Tribunal for electrical work as estimated by the homeowners' expert. In these circumstances, the homeowners submit that it is unclear what error flows from this aspect of the Decision given the finding of liability and the acceptance by the Tribunal of the agreed cost of rectification. 10. In respect of item 2 (water ingress ground floor) the homeowners submit that the Tribunal considered the respective opinions of the experts and their cross examination. The scope of work proposed by Mr Hall (the homeowners' expert) was found to be the preferred opinion (# 81 of the Decision). 11. The homeowners submit that the reasons identified by the Tribunal in the Decision constitute adequate reasons in that there is a reference to relevant evidence, the setting out of material findings of fact and conclusions and the reasons for making relevant findings of fact (and conclusions) including the reasons for applying the law to the facts found. 12. In respect of item 3 (sub-floor) the homeowners submit that there was a finding that there was a defect requiring rectification and there was a finding that the cost of works was a compromise between the amounts allowed by both experts. The homeowners submit that the reasons are clear and adequate under the circumstances. 13. The homeowners then made submissions concerning the claim made by the homeowners for the recovery of monies expended by them in respect of payments to the builders or payments made at their request. Although, this claim had been referred to as a claim for "repayment" rather than as a claim for "damages" the homeowners submit that the true character of the claim was apparent. The homeowners point to the fact that the amended points of claim filed on 24 July 2014 correctly referred to the claim as a claim in damages. The homeowners submit that the builders were not misled at all. 14. The homeowners submit that there is no basis established for the grant of leave to appeal. 15. In essence the homeowners submit that the contract documents contemplated waterproofing. The relevant documents to which the Appeal Panel were taken consist of the plans referred to in the witness statement of Michael Bee (see volume two of the tender bundle under tab marked MB1). The contract incorporates the plans (see volume two of the tender bundle under tab marked MB3). 16. The homeowners' counsel acknowledged at the appeal hearing that there was an error made by the Member in the Decision in the characterisation of the evidence of the experts. In paragraph 75 of the Decision it is said that the builders' expert acknowledged his considerable error in the calculation of quantum. Homeowners' counsel acknowledged that this was an error and that the expert who made the mistake was in fact the homeowners' expert, Mr Hall. Nevertheless, the homeowners submit that the process of reasoning in the Decision still stands scrutiny and reaches a correct conclusion. With respect to item 2 (water ingress) the homeowners submit that the Member correctly acknowledged the error made by Mr Hall but remained satisfied with the sum calculated by Mr Hall. The builders' submissions in reply 1. The builders referred to the homeowners' submission that the contract documents included the requirement for tiling. The builders drew attention to the finding of the Member as recorded in paragraph 65 and 66 of the Decision. In paragraph 65 the Tribunal finds that the contract did not specifically require the tiling of the pool decking but that the parties agreed as a variation that the builders would remove the existing timbers, check and replace as necessary the supports and prepare the deck for tiling by Mr Jones. Decision 1. It is clear that the Decision included the finding that the waterproofing was part of the scope of works which the builders contracted to undertake for the homeowners. This is apparent from the following: 1. The finding in paragraph 6 of the Decision that the contract incorporated the architectural drawings by Conway. Those drawings make reference to "new waterproofing"; 2. The finding that Mr Bee knew that Mr Jones was to carry out the work and knew in some detail how he intended to carry out the waterproofing (# 50); 3. The findings in paragraph 51 of the Decision which was in effect that the waterproofing was carried out by Mr Jones as a subcontractor by the mutual agreement of the parties or was carried out by Mr Jones by a subcontract made directly with the builders. Either way the builders were liable for defective waterproofing performed by Mr Jones; and 4. The finding that tiling and waterproofing performed by Mr Jones were always the responsibility of the builders (# 64). 1. The Appeal Panel is of the view that the evidence before the Tribunal at first instance was a sufficient basis for the Member to make the findings described in the above paragraph. 2. The Decision dealt with the evidence concerning the fact that the homeowners paid Mr Jones directly and found that that evidence was not sufficient to establish that the homeowners and Mr Jones had a contract with each other. The Decision does not appear to have dealt with the evidence that the homeowners initially sued Mr Jones. In our view nothing turns on that as the evidence of Mr Hammond was a sufficient explanation. 3. The builders submit that there was no express finding that the waterproofing was the cause of the defects. However, the Appeal Panel notes that the Decision recorded that the waterproofing was agreed by the parties to be defective (paragraph 23 of the Decision) and that the builders' expert had produced a report predicated on that assumption (paragraph 62 of the Decision). 4. Given the findings made by the Member that the builders were liable for defects in waterproofing it was reasonable in our view to conclude that the builders owed a warranty pursuant to the HBA. The Appeal Panel does not agree with the builders contentions that the Decision was based upon the principle that the builders had to prove that the works (i.e. the waterproofing) was part of "someone else's contract". 5. In seeking to establish that the Decision failed to consider all relevant evidence the builders point to the evidence of Mr Hammond that he had an "arrangement" with Mr Jones. That "arrangement" was clarified in re-examination of Mr Hammond as the homeowners' submissions reveal. In the view of the Appeal Panel, the evidence of Mr Hammond does not disclose that there was a contract between the homeowners and Mr Jones. There was, in the Appeal Panel's view, no error in the Decision concerning the findings of the builders liability for the defective work of Mr Jones. 6. To reiterate, the evidence of Mr Hammond concerning the circumstances leading up to the decision of the homeowners to sue Mr Jones does not constitute evidence establishing the existence of a contract between the homeowners and Mr Jones. The evidence of Mr Hammond discloses the circumstances which lead the homeowners to form the view that they should commence proceedings against Mr Jones but that evidence does not disclose the existence of a contract between them and Mr Jones. 7. It follows that the builders' appeal in respect of defective work fails. 8. In respect of items 1 and 2 there was a considerable difference of opinion between the two experts as to the scope of works and the quantum of the works. The Decision records in paragraph 75 that the builders' expert had acknowledged an error in the calculation of quantum and that, as a consequence, where agreement was not reached by the experts in regard to quantum, the Member preferred the evidence of the homeowners' expert Mr Hall. 9. At the appeal hearing counsel for the homeowners candidly acknowledged that those conclusions made by the Member are mistaken. Counsel stated that the mistake was in fact made by Mr Hall and that therefore paragraph 74 of the Decision should have stated that to the extent that an agreement was reached on quantum a considerable concession was made by the homeowners' expert, and in paragraph 75 the Decision should have stated that the homeowners' expert acknowledged his considerable error. However those mistakes concern item 1 (pool deck) and the builders counsel did not press any argument concerning the calculation of the quantum of item 1. 10. When one comes to item 2 (paragraphs 78 to 83 of the Decision) it is clear that the Decision preferred the evidence of Mr Hall notwithstanding Mr Hall's concession that he had made an error in regard to pricing of tiles "for example". The Appeal Panel therefore does not accept the submission of the builders to the effect that the Tribunal failed to deal with the conflict in the evidence between the two experts. Further, the Tribunal gave reasons for its preference for Mr Hall's evidence. Mr Hall was described as being "unshaken" in his opinion under cross examination that the water ingress was not limited to ingress through the door. The Decision referred to photographic evidence and evidence of moisture readings. In the view of the Appeal Panel the specific criticisms of the Tribunal's findings in this respect are not justified. Firstly, contrary to the builders' submissions the Tribunal did address what would have been a reasonable amount and deducted amounts for mould treatment. The preference for Mr Hall's evidence is explained by reference to Mr Hall withstanding cross examination as well as the photographic evidence and the evidence of moisture reading. The third criticism was that the Tribunal linked items said to require rectification with alleged defects. In the view of the Appeal Panel this ground has no basis. The evidence of Mr Hall identified the rectification works and its cost and that evidence was substantially accepted. 11. Item 3 concerned the sub-floor ventilation and storm water ingress. Again there was a conflict of evidence between the two experts and the Decision makes it clear that the evidence of Mr Hall was accepted. The builders submit that that evidence was accepted without a finding that the builders had contractual responsibility. Although not specifically stated it is clear that the Member formed the view that the defects to sub-floor ventilation and storm water ingress were a consequence of the work for which the builders were responsible. In the view of the Appeal Panel there is no error with respect to this aspect of the Decision. 12. In respect of the claim concerning the "repayment" of $104,402.98, it is the view of the Appeal Panel that the submission that there was a denial of natural justice has not been substantiated. The Builders' submission that they were denied the opportunity to cross examine for the purposes of testing evidence to determine whether the amounts expended arose naturally from the breach of contract is not persuasive. The amounts claimed represented amounts paid to the builders and it is difficult to understand how it can be said that the amounts sought by the builders and paid to the builders should not be fully recovered given the finding that the amounts were agreed by the parties and represented a fair assessment of the value of the work performed (see paragraph 59 of the Decision). In other words, we are of the view that even if the words "repayment" had never been mentioned the result would have been the same. 13. The Appeal Panel's conclusion is that no errors have been identified and that there is no basis for any finding that the provisions of cl 12 of Sch 4 of the NCAT Act have been attracted so as to justify the granting of leave for this appeal. Accordingly the appeal will be dismissed. 14. Both parties sought costs of the appeal. The Appeal Panel may award costs if satisfied that special circumstances warrant an award of costs (s 60(2) of the Act). These proceedings involved a substantial sum of money, were complex and both parties required the assistance of legal representation. However the Appeal Panel does not find that these matters constitute special circumstances warranting an award of costs in favour of the respondents. The homeowners' counsel did not identify any special circumstances. Accordingly, there will not be any costs order. Orders 1. Accordingly the Appeal Panel makes the following order: 1. The appeal is 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: 28 April 2016