Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11 Hearing dates: 2 December 2016 Date of orders: 16 January 2017 Decision date: 16 January 2017 Jurisdiction: Appeal Panel Before: Hon B Tamberlin QC, Principal Member M Harrowell, Principal Member Decision: Leave to appeal is refused and the appeal is dismissed Catchwords: Procedure- Failure to comply with directions, refusal to adjourn hearing. Evidence- Sufficiency of evidence where no competing evidence, lump sum quotation prepared by reference to detailed scope of work. Leave to appeal- new evidence not reasonably available at the time of the hearing Legislation Cited: Civil and Administrative Tribunal Act, 2013 Cases Cited: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 Khan v Kang [2014] NSWCATAP 48 Mesiha v Murrell [2017] NSWCATAP 1 Category: Principal judgment Parties: Leisure Brothers Pty Ltd (Appellant) Aaron Smith (Respondent) Representation: Appellant in person Respondent in person File Number(s): AP 16/33270 Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 28 June 2016 Before: D Goldstein, Senior Member File Number(s): HB 15/49018 reasons for decision Introduction 1. This is an appeal from a decision of the Tribunal made on 28 June 2016 which ordered the appellant to pay the respondent the sum of $102,800 immediately, as damages for defective building work, and which granted liberty to make a costs application in the proceedings together with other incidental orders. 2. At the substantive hearing of the matter on 17 June 2016 after having regard to the procedural history of the matter, the Tribunal refused an application by the appellant for an adjournment. The purpose of the adjournment was to provide some expert evidence. The Tribunal gave detailed reasons for the refusal. Grounds of Appeal 1. In substance, the grounds of appeal contend that the Tribunal made the following errors: 1. there was a failure to give effect to the guiding principle as set out in section 36 of the Act; 2. there was a failure to correctly apply the principles set out in the case of Khan v Kang (citation below); 3. the Tribunal wrongly applied a procedural direction to excuse non-compliance by an expert with Procedural Direction 3- Expert Witnesses; 4. the Tribunal wrongly accepted a quotation as to the amount of damage; 5. there was a failure to apply the correct burden of proof to the respondent's claim; 6. there was a failure to consider evidence relevant to the making of the order awarding damages; 7. there was a failure to properly consider whether it was appropriate to order rectification rather than damages as the preferred outcome; 8. the order requiring payment of the damages "immediately" was manifestly unreasonable and unjust; 1. The appellant's adjournment application essentially was based on the fact that in breach of directions it had not furnished an expert report and was not ready to go ahead on the hearing with evidence to challenge the respondent's case. The appellant's director contended that he was unfamiliar with the Tribunal procedures and for this reason did not provide an expert report in accordance with the directions 2. In addition, the appellant sought leave to rely on fresh evidence in the appeal being report it subsequently received from its expert Mr Nowlan of Techton Building Services (Techton). The report was initially prepared on 24 August 2016 and was revised on 3 October 2016. Circumstances in which Techton was engaged are dealt with below as is the content of the the report. History of Tribunal Proceedings 1. The proceedings were commenced on 24 August 2015. On 23 October directions orders were made setting out a timetable leading to a hearing requiring provision of evidence including expert reports from the parties. The appellant was ordered to file and serve its evidence by 18 December 2015. It filed some of its evidence on 27 November 2015. 2. The matter came again before the Tribunal on 22 January 2016 and the earlier timetable was varied. The appellant was ordered to provide its documents in response to the applicant's documents by 26 February 2016. It was ordered that if the appellant failed to provide documents by 26 February it would not be permitted to rely on documents at the hearing without leave of the tribunal. The appellant did not appear at this hearing. The appellant was clearly on express notice of the consequences of non-compliance. 3. On 2 February 2016 the appellant wrote to the Tribunal stating that it had received the 22 January 2016 orders and knew that it had until 26 February 2016 to respond to the applicants bundle but alleged that it had not received the applicant's bundle. 4. The appellant sought an extension of time on 1 March 2016 which was granted so that the time for the appellant to comply with the order that it provide all of its evidence was extended to 22 April 2016. Orders were made that the experts appointed by the parties for the purpose of preparing Scott Schedules and replies were to prepare a joint report by 3 June 201 5. On 11 March 2016 both parties were provided with a Tribunal notice that the hearing would occur on Friday, 17 June 2016. 6. On 30 May 2016 the appellant requested Techton Building Services to provide a fee proposal for an expert witness report in response to the claim in the Tribunal for damages for alleged defects. On 31 May Techton responded stating that it had reviewed the respondent's building inspection report prepared by East Coast Building Consultants of 27 May 2015 and considered that that it was not properly prepared in accordance with the direction of the Tribunal and criticised the Scott Schedule because it failed to itemise the costs associated with each of the alleged defects. The letter of 31 May stated that Techton was unable to provide an effective response to the allegations until the expert report from the client was provided in a proper format. This was despite the fact that the appellant's expert had a Scott Schedule and report from the respondent's expert that identified the defects, what was claimed by the respondent and otherwise provided sufficient information for the appellant's expert to independently review and offer an opinion in respect of the identified defects. 7. It was not until 7 October 2016, four months after the hearing below had taken place, that a final expert witness report was sent by Techton. Significantly, nothing in this report would suggest the expert could not have prepared the report and an earlier time, or that any new information was provided by the respondent since the respondent's evidence was provided at the original hearing that would have prevented preparation of the Techton report prior to the original hearing. 8. It was conceded on the hearing of 17 June 2016 that the appellant had received the respondent's Scott schedule and expert's report in late November 2015, that is to say, five months before the hearing. 9. The appellant's position below was that it did not know how to conduct its case in the proceedings and was unsure about what documents were contained in the applicant's bundle. 10. In reaching its decision to refuse the appellant's application made on the hearing for an adjournment to enable it to put on expert evidence, the Tribunal noted that 1. the hearing of this matter had been adjourned on a previous occasion to enable the appellant to put on its evidence; 2. The appellant had received the orders of 23 October 2015, 22 January 2016 and 1 March 2016 which informed the appellant of the need to file and serve its evidence including its expert evidence in time. 3. On 10 May 2016 the appellant was informed that it should obtain legal advice. 4. No sound reason was advanced for not obtaining an expert report. 5. The only reason given was that it acted too late and was unfamiliar with Tribunal procedure. 6. The consequence of the adjournment would have been to vacate the hearing and allow further evidence from both parties involving delay inconvenience and expense. 1. The Tribunal concluded that the respondent has been given ample time to comply and having breached directions the application for an adjournment should be refused and the matter should proceed. Appellant's Submissions and Consideration 1. The first submission for the appellant is that the Tribunal erred in its application of S 36 of the Civil and Administrative Tribunal Act, 2013 (the Act). 2. That provision reads: 36 Guiding principles to be applied to practice and procedure (1) The "guiding principle" for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules. (3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal: (a) a party to proceedings in the Tribunal, 1. The appellant concedes that its actions caused delay in the proceedings but says that, in circumstances where the appellant was ignorant of the procedures and was inexperienced, it should be entitled to present evidence which it considered crucial to the determination of proceedings in order to enable a just outcome. We do not accept that there was any error on the part of the Tribunal in relying on and applying the guiding principle in this case. Section 38(5)(c) of the Act requires the Tribunal "to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings". Principles of case management are also relevant in the determination of whether adjournments or extensions of time should be granted to a party in default or tribunal orders. See eg Mesiha v Murrell [2017] NSWCATAP 1. The appellant has had a full opportunity to provide all necessary evidence and has been granted indulgences from time to time in order to do so. In these circumstances it could not be said that there was any failure to comply with the basic principles of procedural fairness in this case. The letter of 2 June 2016 from Techton clearly indicates that the appellant was aware that there was a need for some expert evidence to counter the evidence of the respondent yet it failed to provide it as directed. It is important to note that the preliminary request in relation to fees for obtaining an expert report was written less than three weeks before the date fixed for hearing and well after the times for compliance with the varied direction. To have granted an adjournment in this case would have been counter to the quick and cheap resolution of the issues and would have been unjust to the respondent in causing yet further delay expense and inconvenience as a result of the respondent's failure to comply. 1. The second submission is that the Tribunal erred in relying on the quotation furnished by Byron Design & Construction as a basis for reaching its decision as to the amount of damages which should be awarded. The submission refers to the duty of scrutinising and weighing evidence in its role as a tribunal of fact in the proceedings. In this case it is said that the weight of the evidence was not sufficient to justify the finding. 2. In the case of Khan v Kang [2014] NSWCATAP 48 at [50] the Tribunal said: A quotation from a supplier willing to rectify defects or complete incomplete work can, depending on the circumstances and the nature and content of the quotation, constitute evidence of the defects or incomplete work and of the amount required to remedy the defective work or complete any incomplete work. For example, if the person providing the quotation was suitably qualified or experienced, inspected the work, identified defects or incomplete work on that inspection, recorded his or her observations in the quotation and gave a price to rectify or complete the work, it is difficult to understand why that quotation would not provide evidence in support of a claim for defective or incomplete work. The weight to be given to the evidence would, of course, depend upon many factors. Nonetheless, it would be wrong to conclude that simply because an applicant relied only upon a quotation or quotations for the rectification or completion of work that there was no evidence to support the claim that the work was defective or incomplete. 1. We understand the Tribunal to be stating that what amounts to sufficient proof depends on the specific circumstances in each case and there is no universal guideline so that in some circumstances a quotation may provide sufficient proof. In this case the Tribunal had detailed evidence from East Coast Building Consultants referring to numerous building defects which are referred to in the decision below and which were accepted. As the Tribunal noted this evidence was not contradicted by counter evidence. 2. In addition, the Tribunal also accepted a detailed report from Mr Englert dated 17 June 2015 who is a member of Master Painters Australia Queensland, as to the standard of paint finish. 3. Further, there is a quotation from Byron Design & Construction which notes that the author had visited the property and inspected the residence and noted the contents of reports by East Coast Building Consultants and Master Painters Australia and on the basis of these quoted a lump sum figure of $102,800 to perform the necessary work. 4. The contents of the reports referred to above were not subject to any contradictory evidence on the hearing below. 5. In these circumstances we consider that there was sufficient evidence to justify the findings made as to defects and the amount which should be awarded as damages. 6. The third submission is that the Tribunal erred in relying on the report of East Coast Building Consultants because it did not comply with the NCAT procedural and excused compliance. 7. In all the circumstances of this case we do not consider that failure to comply with this direction and the decision of the Tribunal to excuse compliance indicates any error or injustice of any kind. Specifically, we do consider that there is any substance in the complaint that the author of the East Coast Building Consultant's report did not attach his CV or state the basis of his expertise in assessing the weight of the evidence. 8. The fourth submission is that there was an error of law in failing to apply the law to the quotation because there is no reference to any process of reasoning in regard to weighing of the quotation as evidence in proceedings and that acceptance of the quotation was not reasonable, fair or appropriate in the circumstances. 9. For reasons given above we consider that the combination of the reports and the quotation and the fact that they were not the subject of contrary evidence, despite a full opportunity to furnish such evidence in a timely manner, amounted to sufficient evidence to support the conclusion reached by the Tribunal. 10. The fifth submission is that the Tribunal did not apply the correct burden of proof to the respondent's claim. 11. We do not accept the submission because on a fair reading of the reasons given by the Tribunal it is clear that the evidence was carefully weighed and considered with respect to its cogency and sufficiency. We consider that the Tribunal gave ample reasons for accepting the respondent's evidence and properly considered the evidence. 12. The sixth submission is that the Tribunal erred in failing to make an order for the rectification of defective building work and did not properly take into account that the appellant had failed to permit the respondent to rectify the work. The submission is closely related to the seventh submission which is that the Tribunal failed to have regard to the provisions of s. 48MA of the Home Building Act 1989 which requires the Tribunal to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome. This is a discretionary principle and it does not mandate rectification. 13. In the reasons the Tribunal specifically deals with the issue of rectification and notes that the appellant did not attend the premises to carry out any rectification work during the defects liability period and he also refers to the fact that the premises had been occupied since October 2014 without any actual rectification work having been carried out. On the basis of these considerations he concluded that in the circumstances of the case the preferred outcome was not preferable because it would most probably be productive of further disputation between the parties rather than a final determination of the applicant's claim and for that reason he did not implement the preferred outcome. 14. On the evidence before the Tribunal we consider that the question of rectification was properly considered and that there is no error omission or injustice is to be found in ordering damages in the present case. 15. Finally, the appellant submits that the order to pay $102,800 "immediately" was unreasonable and unjust in that it did not have regard to the capacity of the appellant to pay such a large amount and on the basis that there was no evidence that the subject property was at imminent risk of damage from failure to immediately rectify the defects. 16. We note that the respondent had taken possession of the property in October 2014 and that these proceedings commenced in August 2015 with a hearing in June 2016. Having regard to all the circumstances and to these time periods over which there has been no rectification work we do not consider that the requirement for immediate payment is in any way unreasonable or unjust. 17. The last matter to deal with is the application to adduce fresh evidence. 18. Clause 12(1)(c) of Schedule 4 of the Act, 2013 provides that leave to appeal may be granted where the appellant may have suffered a substantial miscarriage of justice because the Appeal Panel is satisfied "significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)". 19. The meaning of this clause was considered by the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. At [23] – [24] the Appeal Panel said: 23 Unlike the WIM Act, the expression "reasonably available" is not qualified by the words "to the party". This difference suggests that the test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence. For example, in Owners SP 76269 v Draybi Bros [2014] NSWCATAP 20 at [114] the Appeal Panel refused leave because, although the appellant may not have been aware of the evidence (being an email), it could have obtained the evidence by summons. In Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81 at [17] the Appeal Panel granted leave because the respondent to the appeal had fraudulently altered evidence. The party seeking leave under cl 12(1)(c) could not reasonably have had available to them the evidence that the report in question had been fraudulently altered at the time the proceedings were being dealt with by the Tribunal. That fact was not known to the appellant at the time of the hearing and could not reasonably be known due to fraud. 24 Each of these cases illustrates that something more than a party's incapacity to procure evidence is necessary to satisfy the requirements of cl 12(1)(c). 1. As stated above, there is no evidence that the report could not reasonably have been obtained prior to the original hearing and there are no features of this case that would otherwise justify the grant of leave to appeal on this ground. Rather, this is a case where the appellant has failed to comply with the directions of the Tribunal on repeated occasions through no fault but his own. Conclusion 1. For the above reasons the appeal should be dismissed. Accordingly, the order is that this leave to appeal is refused and 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: 16 January 2017