Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Pfeffer v Driftwood Constructions Pty Ltd [2017] NSWCATAP 133 Hearing dates: 2 June 2017 Date of orders: 20 June 2017 Decision date: 20 June 2017 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President G K Burton SC, Senior Member Decision: (1) Appeal upheld; (2) Proceedings below to be remitted to the Consumer and Commercial Division for a rehearing before a Senior Member; and (3) The order made on 7 February 2017 is set aside. Catchwords: adequacy of reasons; variations; quantum meruit Cases Cited: Antworks Pty Ltd and Brendon Chhong Lee v Shixin (Cindy) Lee [2015] NSWCATAP 53 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Category: Principal judgment Parties: Leanne and Michael Pfeffer (Appellants) Driftwood Constructions Pty Ltd (Respondent) Representation: Appellants in person J and E Howard (Respondent) File Number(s): AP17/11006 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 9 December 2016 Before: R Harris, General Member File Number(s): HB16/35564; HB16/39875 reasons for decision 1. This appeal was heard on 2 June 2017 and at the conclusion of the appeal hearing, we made orders and gave reasons orally. The respondent has requested a written statement of reasons. These are those reasons. 2. The matters below were heard together and determined on 9 December 2016. In HB16/35564 the homeowner applicants (the appellants in the current proceedings) sought compensation in the amount of $7,624.54 from the respondent builder (the respondent to the current appeal) arising out of the construction of the appellants' home at Casuarina in northern New South Wales which was completed in July 2016. In HB16/39875 the respondent (the builder) sought to recover compensation from the appellants (the homeowners) of $4,936.44 alleged to be owing to the builder under invoices after deleting credits and late payment fees. 3. The member dismissed the homeowners' claim and found, after various deductions and set offs (some in favour of the homeowners), a balance owing to the builder on its claim of $3,725.57. The member found for the builder on the basis of a quantum meruit, applying Antworks Pty Ltd and Brendon Chhong Lee v Shixin (Cindy) Lee [2015] NSWCATAP 53 and the principles there stated derived from earlier high authority. The member found that the claim for variations was not in writing and signed as required by clause 15(b) of the contract and therefore could not be claimed under the contract. This latter finding is not disputed on appeal. 4. The homeowners appeal on the following grounds: 1. The findings of extra work comprising excavation, steelwork, and brick wall and window were incapable of arising on the evidence and as such constituted an error of law. 2. The finding that the builder's evidence was internally consistent and supported by the documents relied upon was against the evidence. 3. There were otherwise no detailed reasons for the preference of the evidence of the builder over the evidence of the homeowner. 4. There was an error in the finding of quantum meruit including an absence of evidence of reasonable cost. 5. Other matters were raised in the hearing which were not in the written appeal grounds set out above. Some depended on the outcome of the written appeal grounds, as did the final balance between the parties. 1. Although there was some confusion in the wording of the final written ground of appeal, analysis of it in the context of the other written grounds and what was said in support of them distils the written grounds overall into a complaint of an absence of adequate reasons for the general preference of the builder's evidence. That general preference appears to be the basis on which there was an inference of approval by the homeowners of the extra works described above, so as to support a basis for a quantum meruit claim. It also appears to be the basis for the finding that the builder's invoiced amounts were reasonable, without further supporting evidence. 2. We say "appears to be the basis" because the reasons given for the conclusions do not set out clearly and comprehensively those matters. The reasons also do not, in our view, spell out the basis for the conclusions reached. 3. Thus, at [9] of the member's reasons: 1. The general preference of the builder's evidence was said to be because the principals of the builder gave evidence that was "logical and internally consistent and supported by the documents and invoices relied upon". 2. There was then (correct) reference to the quotation making an allowance for earthworks of only $2,200 and for no provision of engineering, which (at least as to items in the allowances section of the quotation) appeared to be part of the contract, although the reasons to reach this conclusion were not spelled out. There was no spelling out of why the quotation was preferred over the specification; both were contract documents and the latter mentioned engineering drawings showing steelwork. 3. There was then a repetition of the same point about engineering by saying the quotation made no mention of steelwork which had the same problem as just mentioned concerning the specification. The absence of reference to steelwork in the plans referred to in the quotation was then called in aid, but why the approved plans referred to (which did not include engineering details) would have included such reference was not said, particularly when the specification mentioned engineering drawings as said earlier. 4. The builder's evidence was then said to be found in relation to the amounts claimed to be logical and persuasive, without saying why by reference to that evidence. 5. The view was expressed that the plan did not support the homeowners' assertion and came to a positive opposite conclusion without analytical reference to the features of the plan and also without analysis of matters canvassed at today's hearing about the features of the ground floor plan and the elevation plan. 6. The absence of expert evidence in support of the homeowners' claim was called in aid when neither side called expert evidence. In any event, the force of that absence to support a general preference for the builder's evidence was not demonstrated. 7. There were then several statements about preference of either the builder's or, in one instance, the homeowners' evidence without reasoning for that preference. Such an approach continued on matters dealt with in [10]. 1. Paragraph [11] then repeated the analysis given above in respect of the quotation and plans and added (correctly) that the quotation was given on the basis of no engineering and to that extent at least was part of the contract, even if the engineering plans had been available prior to the quotation, again without reference to the specification. But how this then linked to and supported the finding that followed – satisfaction that the homeowner had the benefit of extra work outside the contract carried out by the builder and the invoiced cost of that work being reasonable in itself in this case and without more on a quantum meruit – was not spelled out, particularly the vital element that the work was required to be requested by the homeowners. 2. In our view the above matters showed an absence of, or defects in, provision of reasons so as to constitute a clear error of law. In Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 the Court of Appeal said that the giving of adequate reasons lies at the heart of the judicial process and the reasons must do justice to the issues posed by the parties' cases. For the reasons given, the decision under appeal does not meet such requirements.. We therefore allow the appeal. 3. Certain of the matters could have been resolved by us on appeal on the documents, such as the priority between specification and quotation. This could have resolved two of the matters raised on appeal. However, those matters plus the remaining matter also depended on the member's preference for the evidence of the principals of the builder, which are difficult to deal with on appeal. We are also not clear what out of the material on appeal before us was before the member apart from some photos before us which were during the hearing acknowledged to be material not before the member. 4. Accordingly, the matter must, unless resolved between the parties, be remitted for re-hearing in its entirety. We consider it requires re-hearing by a senior member of the Division. Orders 1. The Appeal Panel makes the following orders: 1. Appeal upheld; 2. Proceedings below to be remitted to the Consumer and Commercial Division for a rehearing before a Senior Member; and 3. The order made on 7 February 2017 is set aside. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar 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: 20 June 2017