Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Girgis v Makinadjian [2017] NSWCATAP 19 Hearing dates: 10 November 2016 Date of orders: 31 January 2017 Decision date: 31 January 2017 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member R Titterton, Senior Member Decision: (1) Leave to appeal is refused (2) The appeal is otherwise dismissed. Catchwords: Leave to appeal- requirements for leave, evidence not reasonably available Contract- interpretation of obligations, required standard of work, quotation not requiring particular standard of visual finish, whether obligation to provide a "visually acceptable and improved finish" can be inferred Legislation Cited: Civil and Administrative Tribunal Act 2013 Home Building Act 1989 Cases Cited: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 Collins v Urban [2014] NSWCATAP 17 Texts Cited: Nil Category: Principal judgment Parties: Isis Girgis (Appellant) Vahram Makinadjian t/as Pure Painting and Decorating Services (Respondent) Representation: Each party appeared in person File Number(s): AP 16/ 38088 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 22 July 2016 Before: G Meadows, Senior Member File Number(s): GEN 1612160 REASONS FOR DECISION Introduction 1. This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal (the Tribunal) dated 22 July 2016. 2. The Tribunal had heard the claim of the appellant Ms Isis Girgis against the respondent, Mr Vaham Makinadjian t/as Pure Painting and Decorating Services. The appellant had sought an order that the respondent pay her $2,500.00. In summary, her application states that the respondent's workmanship was "appalling", and "shocking" ", and that she needed to have the "whole job", for which the respondent was paid $4,920.00, redone. 3. The Tribunal dismissed the appellant's claim. The Tribunal's "main finding" appears in the penultimate paragraph of its reasons for decision as follows: The main finding I make is that the respondent performed the work for which he provided his quotation and there is no complaint that his work is not to a reasonable standard. The complaint is actually that the applicant expected the walls to be sanded or otherwise treated so as to present a smooth surface rather than the undoubted and obvious uneven surface they had. But that is not contained within the scope of works for which the respondent provided his quotation. 1. For the following reasons, we have decided to dismiss the appeal. The Notice of Appeal 1. By Notice of Appeal filed 23 August 2016, the appellant states that the Tribunal erred in the following ways. 2. The first ground of appeal relates to the Tribunal's criticism of the property inspection report prepared by Mr Paul Cavallo of Independent Building Inspections (the expert report). The report is not dated, but its contents note that the appellant's property was inspected on 5 May 2016 and the report was prepared in the period 8 May to 12 May 2016. The appellant submits that the expert report was provided in accordance with the directions of the Tribunal and was in the proper form as required by the Tribunal in Procedural Direction 3 - Expert Witnesses. The appellant says that the Tribunal seemed very critical of the photographs which appeared in the expert report. In particular, the appellant notes that the Tribunal was critical of the expert in that when describing the works to be undertaken by the respondent, he referred to the "intended installation", rather than the terms of the quotation provided to, and accepted by, the appellant. 3. The appellant's complaint of the Tribunal's treatment of the expert report is further amplified in the Notice of Appeal in the section titled "decision not fair and equitable". The appellant submits that she paid a lot of money for an independent expert report and it should not be wholly discounted. She does not believe that the Tribunal took an objective view of the report, but made subjective judgements without looking at its detail or content. She does not think the Tribunal was fair or reasonable in its assessment of this evidence. 4. The second ground of appeal relates to the number of days that were taken to paint the ceiling. She says that the evidence of the respondent at the hearing that this took six days was not true. This matter was not pursued at the hearing of the appeal, so we will not consider this ground in these reasons. 5. The third ground of appeal is that the appellant does not agree that the work undertaken by the respondent, as found by the Tribunal, was to a reasonable standard. She says that the paragraph in the Tribunal's reasons (which we have set out above in par [3]), is "fundamentally wrong". 6. The fourth ground of appeal is that the Tribunal "was swayed" by the fact that the "Calvins quote" she obtained, and tendered at the hearing, specified sanding and preparation of the walls. The appellant submits that it is unfair to use that "quote" to determine a matter that ultimately should be looked at in the context of the expert report and the relevant statutory requirements. 7. The appellant filed with the Notice of Appeal a large bundle of documents which, on the whole, had been evidence before the Tribunal. The exception was certain photographs taken after the hearing which were not before the Tribunal. As we explained to the appellant, she could not rely on the material without leave and to be granted leave she must demonstrate that the evidence was not reasonably available at the time of the hearing by the Tribunal. The appellant indicated that she understood this. The other relevant material filed by the appellant includes various text messages between her and the respondent. We shall refer to this evidence below. Reply to Appeal 1. The respondent filed a Reply to Appeal dated 31 August 2016. He states that he supports the original orders made by the Tribunal, as he performed the work according to his quotation. He attaches to the Reply a copy of his educational qualifications, a copy of his contractor's licence and various references attesting to the quality of his work. He also attaches a document bearing the heading "statutory declaration". Relevantly, he describes his undertaking of the works the subject of the appellant's claim. He states that, a few months after the works were completed, he received a message from the appellant that she was not happy with the "old walls", and that under the cornice the wall was not even. The respondent says that this was not the subject of the quotation. He says that over the years he has painted many old houses in a similar condition, and that his customers realise that they needed a plasterer to correct certain faults. The respondent says that he is not a plasterer and never mentioned in his quotation that he was qualified to do that work. The respondent states that he has done nothing wrong, and is the first time in 20 years that he has ever had a dispute with a customer. The Tribunal's reasons 1. It is useful to set out a summary of the relevant facts as found or otherwise referred to by the Tribunal. These are as follows. 1. In about June 2015, the appellant was conducting extensive renovations to her Federation home. That work included repainting a large part of the interior of the house. 2. Several painters were invited to inspect the home and provider quotation. 3. The respondent's quotation (dated 10 June 2015) was in the following relevant terms (we shall set this out in full, the reasons of the Tribunal only set out part of the quotation): Prep: all the gaps, cracks, holes need to be fixed before painting All ceilings in the house to be painted two coats of acrylic ceiling paint. All the walls in the house need to be repaired where necessary and painted 2 top coats low sheen acrylic antique white USA except 2 bedroom that need to be painted different colour. All the wodwork [sic] - needs to be sanded, painted two coats high-gloss oil based painting. Paint and material $720 Labour $3200 total Price inclusive of GST $3920 OUTSIDE: front entry ceiling, door, window need to be sanded and painted 2 coats. Gutter and Eaves need to be sanded, any cracks filled with no more gaps and painted 2 coats. Back of the house, pergola, walls, gutter and eaves - need to be prep and painted as above Labour $1900 Painted material $400 total Price inclusive of GST $2300 WARRANTY: All work to be carried out to the Australian Standard Guide to the Painting Buildings (Bolding as in original) 1. The respondent's quotation was accepted by the appellant. 2. The work included the preparation and painting of the ceilings. The respondent stated that, when he finally got a close-up view of the ceilings, he realised they were all affected by numerous cracks. As he had quoted to repair cracks and holes, the respondent spent six days doing that preparatory work, including sanding after the cracks were repaired. 3. The appellant agreed that the ceilings were completed to a satisfactory standard by the respondent, and no claims were made in that respect. 4. The amount paid in respect of all the work appears to be $4,370.00, which is higher than the original quotation, because of the necessity to purchase extra paint to attempt colour match and for which the respondent charged an additional $1,000.00. The Appeal Panel notes that the Tribunal observed that the figures given in evidence did not match the figures in the adjusted quotation. 5. Several months after the painting was completed, the appellant was dissatisfied with the quality of the painting of the walls. She subsequently obtained the expert report, which states that the cost to rectify the work was $14,508.80.00. 6. During the hearing, the appellant stated that she and her husband had decided to sell the home. As an agent had advised the appellant that the walls "needed work", she retained another painter who repainted all the walls painted originally by the respondent, including sanding. He charged $8,000.00. This amount included the cost of painting the exterior of the house. 7. The applicant's evidence included a quotation from Calvins Painting dated 8 April 2016. The Tribunal said that it was not clear whether that was the second painter who had repainted the house. The "Calvins quote" was $4,800.00 plus GST for interior work, and $5,800.00 plus GST for exterior work. The Tribunal noted that that quotation included, in the preparation section, "scrape, sand and clean all surfaces", in addition to fixing and patching cracks and holes. The Tribunal noted that the respondent's quotation did not include such work. 8. The Tribunal did not accept the expert's opinion, as the expert did not state that he was given the respondent's quotation but rather, stated that the "intended installation" was "to adequately prepare the surface of the painting as required … to achieve a visually acceptable and improved finish". Importantly, in the Tribunal's opinion, the quotation did not specify the work on those terms and specifically did not refer to sanding. Consequently, the Tribunal found that the respondent completed the agreed work (that did not include the requirement to sand or produce a smooth or improved finish) and that there was no evidence that the work was not to a reasonable standard. 9. Even if the Tribunal did accept the expert's opinion, his cost estimate was "extremely exaggerated". 10. The second painter did not do the work the respondent quoted for doing; it was "obvious" that the respondent did not quote to sand or otherwise prepare walls to a smooth finish. The respondent's work on the ceilings demonstrated that he would apparently have been able to do so, but he did not include that in his quotation. 11. The appellant was seeking a full refund of all moneys paid, even though she agreed that the ceilings were unsatisfactory. The Tribunal stated that even if it found that the walls were not done to a reasonable standard, it would not be appropriate to order a full refund. The hearing 1. The appellant told the Appeal Panel that when she had originally brought the matter to the Tribunal, she was advised that she should obtain an expert's report. She did so, paying $1,200.00 for the report and thought she had done "the right thing". She said that the Tribunal was critical of the report, particularly the light in which the photographs had been taken. The appellant said that the expert followed "normal protocols", and that the Australian Standard required that the walls be repaired. She submitted that having agreed to pay $4,370 for the original work, she was entitled to the reasonable costs of having the work brought "into conformance". She submitted that it was not fair to end up paying over $15,000 for a "paint job". The appellant submitted that the Tribunal spent no time looking at the photographs, and it was clear the Tribunal was minded to dismiss her application. 2. The respondent, who told the Appeal Panel that he had not read the expert's report, said that he did not understand how it could be submitted that he did not meet the expectations set out in the quotation for the work. Nature of the Appeal 1. The Civil and Administrative Tribunal Act 2013 (the Act) sets out the basis upon which appeals from decisions of the Consumer and Commercial Division may arise under s 80 of the Act. That section states that an appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds (s 80(2)(b)). 2. Schedule 4, cl 12 of the Act says that an Appeal Panel may grant leave only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. The appellant relies on each of these matters in her Notice of Appeal in seeking a grant of leave. 2. We note that in Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarized at [71] and [79] as follows: 71 . . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . . 79 In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result . . . it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred." 1. The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted set out in Collins at [84]: 84 The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. 1. What is meant by the expression "significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)" was considered by the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. At [23] the Appeal Panel said: … 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 Consideration 1. The essential question which the Appeal Panel has to determine is whether or not the Tribunal erred in finding that the respondent failed to carry out the work which the parties agreed. The Tribunal was required to determine the objective intention of the parties and the proper meaning of the terms of the contract. 2. Relevantly, the work described in the quotation, in relation to the walls, was that: All the walls in the house need to be repaired where necessary and painted 2 top coats low sheen acrylic antique white USA except 2 bedroom that need to be painted different colour. with "all work to be carried out to the Australian Standard Guide to the Painting Buildings". 1. The proper construction of the contract is a question of law. The contract 1. The contract was the written quotation. 2. The appellant did not suggest any part of the contract was oral. The appellant did not suggest that a particular quality of finish was requested nor was there any evidence that she specified a particular level of finish. 3. The appellant's expert report at page 8 refers to the Australian Standards 2311 2009 Guide to Painting of Buildings (the Australian Standard). The expert expressed the contractual obligation of the respondent and the issue of what constitutes a defect in the following terms: INTENDED INSTALLATION: To adequately prepare the surface for painting as required, then applying adequate coats of paint to achieve a visually acceptable and improved finish. ISSUE: The surfaces were inadequately repaired then painted over as if acceptable to paint. The works are now a clear visual defect. 1. The expert said there were breaches of the Building Code of Australia, Australian Standards and the Home Building Act, 1989 (HB Act). However, the only details provided were extracts from the Australian Standard. 2. We asked the respondent whether what was set out in the expert report was in fact the Australian Standard. He said it was. The Australian Standard was in the following terms: Sect 3.1 General: p27 Preparation of Unpainted Surfaces Premature paint failure usually occurs if surfaces are not adequately prepared before painting. Surface assessment and preparation are particularly important as the painter may be held liable for any future failure because the very act of painting a surface may be interpreted as accepting that surface as being suitable for painting. NOTE: Unacceptable service imperfections may be undetectable until one or more coats of paint have been applied. Variability in on site applied substrates eg render/plaster may also not be evident until one or more coats of paint have been applied. Preparation of previously painted surfaces covered in section 7. …. 7.5.4 Masonry and Concrete surfaces. P93 The following faults in surfaces of concrete, cement render or brick masonry should be treated as indicated before painting (see also section 3). a) Rake out crumbling mortar, make good with fresh mortar and allow to dry thoroughly before painting d) filling of cracks and crevices – remove all loose matter from cracks and crevices and fill with an appropriate compound. Clean out deep holes in masonry, wet with water and fill with mortar no stronger than the existing substrate or an appropriate patching compound and allow to dry. 1. These requirements do not provide a specification for the finish to the repaired surfaces of the standard stated by the expert. Rather, they provide a specification for preparation relevant to the adhesion of the paint to the substrate and the requirement that the paint will not subsequently delaminate or fail. Further, the quotation could not be regarded as requiring the sanding of the wall or otherwise imposing a particular level of finish in a visual sense. Finally, an obligation to provide a "visually acceptable and improved finish" could not be inferred to be or implied as a term of the contract from the provisions in the quotation and the Australian Standard. 2. No part of the Building Code of Australia was identified that otherwise might specify the level of finish. 3. Lastly, the reference to a breach of the HB Act provides no assistance. In this regard, the warranties in s18B provide: (a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment. 1. However, the expert does not indicate in his report which warranty was breached or the manner in which this occurred. Nor does the expert otherwise identify a particular specification or obligation in the contract that would constitute a breach of the particular warranty. 2. The specification for the work required in respect of the walls must be contrasted with the specification with the work required for the woodwork, and the front entry ceiling, door and window, and the gutters and eaves, which included sanding. Unlike those works, the contract did not require the walls to be sanded. 3. Lastly, the evidence of the respondent, which was accepted by the Tribunal, recorded that the ceiling area was subject to extensive cracking requiring the filling of such cracks and sanding to produce a surface suitable for painting. Nothing in that work suggested that what was done to the ceiling was other than a repair process to make the ceiling suitable for painting so that the painted surface performed as required by the Australian Standard. 4. It is in these circumstances that the grounds of appeal need to be considered. The first ground of appeal 1. The first ground of appeal relates to the Tribunal's criticism of the expert report. In particular, the appellant submits that the Tribunal was critical of the expert in that when describing the works to be undertaken by the respondent, the expert referred to the "intended installation", rather than the terms of the quotation provided to, and accepted by, the appellant. 2. We do not consider that this complaint is justified. We have set out the terms of the quotation above. The quotation, which was accepted by the appellant, clearly sets out the respondent's obligations. His obligation in relation to the walls did not include sanding (unlike the gutters and eaves, and the outside front entry ceiling, door and window for which the specification required sanding). This can be contrasted with the "Calvin's quote", which specifies scraping sanding and cleaning and filling of all surfaces. The respondent's quotation did not include scraping and sanding of the walls, just filling of holes and cracks (repairs). 3. Otherwise, there was nothing in the quotation that required "a visually acceptable and improved finish" as stated by the expert under the heading "Intended Installation". The third ground of appeal 1. The third ground of appeal is that respondent's work, contrary to the finding of the Tribunal, was not to a reasonable standard. We are unable to agree with the appellant. We consider that the respondent did in fact carry out his obligations to the appellant under the contract. As we have explained, the Tribunal found, correctly, that the respondent did not quote to sand or otherwise prepare walls to a smooth finish. There is otherwise no evidence that the paint delaminated or otherwise failed. 2. There is reference in the experts report to "Sections of paint as seen below dusted of [sic] when rubbed by hand". However, the nature of the failure and its cause is not explained, other than that a rubbing process had removed paint. 3. Otherwise, as we said above, there is no basis to conclude that the works were required to meet the standard specified by the appellant's expert. The fourth ground of appeal 1. The fourth ground of appeal is that the Tribunal "was swayed" by the fact that the "Calvins quote" the appellant obtained, and tendered at the hearing, specified sanding and preparation of the walls. The appellant submits that it is unfair to use that "quote" to determine a matter that ultimately should be looked at in the context of the expert report and the relevant statutory requirements. 2. We agree that, save for the possibly of providing some guidance as to the cost of repainting, the "Calvins quote" is not relevant to the issues which were determined by the Tribunal, namely what were the terms of the contract between the appellant and the respondent and what were the requirements for the work. However, that is not what the Tribunal decided. 3. The Tribunal determined that the Calvins quote provided no assistance in determining whether or not the respondent breached his obligations to the appellant. As the Tribunal observed, "the ["Calvins quote"] states that the 'intended installation' was to 'adequately prepare the surface for painting as required . . . to achieve a visually acceptable and improved finish'", whereas the respondent's quotation "does not specify the work in those terms and it specifically does not refer to sanding". That is the contractual obligation of the respondent was different to that of in the Calvins quote. 4. Consequently, this ground of appeal is not made out. Leave to appeal 1. The final issue to deal with is the application for leave to appeal. 2. The appellant's submission is that the decision of the Tribunal was against the weight of the evidence. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel stated at [77]: The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]. 1. The appellant states: The photographs of the rectified work which was taken after the documents were lodged with the Tribunal. These have been taken with the same light, by the same expert who prepared the original report in order to provide the Tribunal with a like for like comparison. 1. The appellant says that this evidence (that is the photographs to which she refers) was not available at the hearing as the work was not completed until after the deadline for the evidence to be sent in support of the application. These photographs were photographs of what the appellant describes as "the rectified work", that is work completed by another tradesperson and not the subject of the appellant's original complaint to the Tribunal, 2. There is no evidence before the Appeal Panel that this material could not reasonably have been obtained for the original hearing. To the contrary, as the work from the second contractor had been carried out by the time of the hearing on 22 July 2016 pursuant to the quotation from Calvin's Painting Pty Ltd dated 8 April 2016, it is clear it could have been obtained before the hearing. This is so even if time had passed to serve evidence as directed as an extension of time could have been requested. 3. Otherwise, for the reasons set out above, we are not satisfied the decision was against the weight of the evidence. Conclusion 1. We have set out above the circumstances in which leave to appeal can be granted. 2. We have considered the grounds of appeal advanced by the appellant together with her submissions both individually and cumulatively. We do not consider that appellant has raised an issue of principle, or a question of public importance or matters of administration or policy which might have general application. Nor do we consider that she has established an injustice which is reasonably clear, that the Tribunal made a factual error that was unreasonably arrived at or clearly mistaken, or that the Tribunal went about its fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. 3. In the circumstances, the application for leave to appeal should be refused, and the appeal otherwise dismissed. Orders 1. The Appeal Panel orders that: 1. The application for leave to appeal be refused. 2. The appeal is otherwise 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: 31 January 2017