Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Matterson v Sunrise Pools Australia Pty Ltd [2017] NSWCATAP 211 Hearing dates: 28 June 2017, further written submissions dated 17July, 27 September, and 18 October, 2017. Date of orders: 09 November 2017 Decision date: 09 November 2017 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member D Charles, Senior Member Decision: (1) Leave to appeal is refused. (2) The appeal is allowed in so far as it relates to the claim based upon an alleged defect that the concrete structure of the spa leaks. (3) Order 3 of the orders made by the Tribunal on 15 February 2017 be set aside. (4) The claim made by the Appellant based upon an alleged defect that the concrete structure of the spa leaks, but only that claim, be remitted to the Tribunal for redetermination, with the opportunity to be given to the parties to present further evidence in respect of this claim. (5) The matter be listed for a directions hearing in the Tribunal for the making of directions fixing a date for a new hearing of the claim referred to in Order (4), for the parties to give each other and the Tribunal further evidence in advance of a new hearing, and for the identification of the material to be relied upon by each party from the material already provided by the parties for the purposes of the hearing on 24 November 2016. (6) All claims made by the Appellant in proceedings HB 16/15856, other than the claim referred to in Order 4, be dismissed. (7) Within 14 days of the date of these orders, the Appellant is to give to the Respondent and to the Registry written submissions as to: (a) the orders that should be made on the appeal concerning Orders 1 and 2 of the orders made by the Tribunal on 15 February 2017, (b) the costs order made on 27 April 2017, (c) the costs of the appeal, (d) the stay application heard on 28 July 2017. (e) whether decisions about the matters referred to in (a), (b), (c) and (d) of this Order are to be made on the papers and a hearing in respect of those matters is to be dispensed with. (8) Within 14 days of receipt by the Respondent of the submissions referred to in Order 7, the Respondent is to give to the Appellant and the Registry its written submissions in reply. (9) Within 7 days of the receipt of the submissions referred to in Order 8, the Appellant is to give to the Respondent and the Registry any written submissions in reply to those referred to in Order 8. Catchwords: APPEAL- home building contract-new evidence from tests about defects carried out after the hearing– tests damaging to works - whether new evidence reasonably available- adequacy of reasons as to one issue- lack of proof of defects – construction of the contract concerning the height of the spa. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Home Building Act 1989 (NSW) Cases Cited: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 11 Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 Collins v Urban [2014] NSWCATAP 17 Hadid v Redpath [2001] NSWCA 416 Khan v Kang [2014] NSWCATAP 48 Mifsud v Campbell (1991) 21 NSWLR 725 Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 Port Macquarie-Hastings Council v Diveva Pty Limited [2017] NSWCA 97 Category: Principal judgment Parties: Brett Matterson (Appellant) Sunrise Pools Australia Pty Ltd (Respondent) Representation: Counsel: B Lloyd (Appellant) DP O'Connor (Respondent) Solicitors: Grifoni Legal (Appellant) Adams Partners Lawyers (Respondent) File Number(s): AP 17/12640 Publication restriction: None Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 15 February 2017 Before: J Smith, Senior Member File Number(s): HB 16/15856 REASONS for decision Overview 1. The parties to this appeal are in dispute about the construction of a spa as an addition to a pool at the Appellant's home in Oyster Bay, Sydney. The Respondent built the spa at the Appellant's home in 2015. We refer to the Appellant as the Home Owner and to the Respondent as the Builder. 2. The Home Owner appeals from a decision of the Tribunal dismissing most of his claim. Amongst other issues, the claim had raised two alleged problems with the spa that were the focus of the appeal, namely that the spa leaked and that the spa had been built to a height that was substantially higher than had been agreed. 3. On the appeal, the Home Owner raised a variety of criticisms about the Tribunal's reasons in relation to each of these two aspects of the Home Owner's claim. 4. For the reasons set out below, we agree with what became one of the grounds of appeal, namely that the Tribunal erred in not giving adequate reasons for its rejection of the claim that the spa leaked. In the circumstances, we have decided that the Home Owner's claim in respect of that issue will need to be reconsidered by the Tribunal, preferably, by the Member who heard the matter, and that the Tribunal should give both parties the opportunity to provide further evidence on this issue. Some background facts 1. On the appeal, there was no dispute about the facts and matters outlined below. 2. On or about 3 February 2015, the Home Owner and the Builder entered into a written contract for the Builder to construct a spa adjacent to an existing pool at the Home Owner's home in Oyster Bay. Between 23 March 2015 and 30 July 2015 the spa was constructed at this site. 3. This contract was a contract for residential building work within the meaning of the Home Building Act 1989 (NSW) (the HBA). The Tribunal had jurisdiction to hear and determine the building claim made by the Home Owner that arose out of this contract. 4. The contract price to build the spa was $31,400.00 (inclusive of GST). 5. The contract included the terms and conditions set out in Part A and Part B of a form of building contract used by the Builder. Part A of that contract included particulars that were completed by handwritten additions to standard provisions. 6. In Part A of the contract (on page 3) provision was made for the "pool concrete structure" (a reference to the spa) to be finished 600mm above the "datum point". Provision was made for the datum point to be specifically identified by adding words in the space provided. In this case, the handwritten words "Existing Pool" were added in this space. 7. During the course of the construction of the spa, in an email from the Home Owner to the Builder dated 24 April 2015, the Home Owner complained about leaking of water through the concrete walls of the spa following recent heavy rain. At this point, the construction was incomplete. Subsequently, it seems that some work was carried out by the Builder directed at rectifying the leaking issue. However, despite such work, a Rectification Order, dated 7 August 2015, was issued by a Building Inspector, appointed by the Commissioner of Fair Trading under s 48E of the HBA, ordering the Builder to complete the work set out in the Schedule to the Order by 7 September 2015. The work to be completed included to rectify "Water leaks through the spa wall". 8. So far as the leak issue is concerned, we did not understand the Builder to rely upon any rectification work done by it on the spa after the issue of the Rectification Order. However, at the hearing in the Tribunal, the Builder relied upon an expert report it obtained from a Mr Fong, based upon his inspections of the spa on 23 February 2016 and 23 September 2016, in support of the Builder's contention that the spa no longer leaked. 9. The Home Owner commenced proceedings in the Tribunal on 4 April 2016 and the application was heard on 24 November 2016. The Tribunal's decision 1. In view of the scope of the appeal, we need only address the reasons concerning the leak and height issues. 2. As to the leak issue, the Tribunal concluded: 93. The applicant's allegation that there are leaks in the spa is not supported by current evidence. Mr Down inspected the spa in February 2016 and was not provided with a copy of Mr Fong's subsequent report and did not return to site to re-inspect. On the evidence available I am not satisfied that the leaks reported by Mr Down are still evident. 94. An explanation was given by Mr Fong as to how any leaks identified by Mr Down may have resolved by a process of "calcification". Under cross-examination Mr Down did not disagree with that explanation. 95. Other than the problem of water "tracking" from the weir, on which the experts agree, I am not satisfied the applicant has established that there are leaks in the spa requiring rectification. 1. As to the height issue, the Tribunal said: 75. There was a disagreement between the parties (and their experts) as to where the datum point, from which the height of the spa was to be calculated, was located. 76. Mr Moore, Mr Wiesman (sic) and Mr Fong for the respondent all stated that the datum point was the top of the existing pool pavers. However, Mr Matterson and Mr Down stated that the datum point was the top of the pool structure. Necessarily the top of the pool structure must be a point at some (unspecified) depth underneath the level of the top of the pool pavers. 77. The contract (at page 3 of Part A) provides that the datum point is the "existing pool". There is also an explanation of what is meant by a datum point in the following terms 'The datum point is a fixed point or mark used for determining levels for the pool structure. It should be easily identified. It can be part of an existing structure or created by fixing a designated marker on site.' 78. I am satisfied from this description that the datum point must be a fixed point that is identifiable and must be visible. A datum point that is located at some indeterminate depth below the surface of an existing structure would be unidentifiable and not capable of being used for determining levels. 79. In this case therefore I am satisfied the respondent's contention is correct. The datum point for measurement of the height of the spa is the top of the pool coping. 80. Mr and Mrs Matterson both agreed that the contract called for an approximate height of 600mm and Mr Matterson acknowledged that he was aware the height was to be measured from the pool structure to the underside of the coping. 81. It was common ground that the height of the spa was 750mm above the paving of the pool. The evidence was that the topping was 80mm in depth. Hence, the height of the spa as constructed was 670mm. 82. The contract at clause 8.7 of Part B deals with acceptable tolerances. There are differing tolerances for water depth, agreed length, agreed width and agreed height. In regard to height the contract provides for + or – 70mm of the agreed height in relation to the datum point. 83. I am therefore satisfied that the height of the spa, as constructed, is 670mm and is within the tolerances for height agreed to by the parties. 84. I am therefore not satisfied that the applicant has established a case for demolition or partial demolition and reconstruction of the spa based on a failure of the builder to construct to the agreed height. 1. The Tribunal dismissed the Home Owner's application, save for orders for the carrying out of some minor works to the spa, namely to install a Perspex strip to prevent overflow of water from the spa on to the pool concourse and to clean and chemically balance the spa and pool water and provide instructions on correct operation and maintenance. Grounds of appeal 1. By the Notice of Appeal, the Home Owner challenged Order 3 made by the Tribunal by which the application was "otherwise dismissed". By Orders 1 and 2, the Tribunal made orders for the carrying out of some minor works. The Notice of Appeal stated that Orders 1 and 2 were affected by the challenge to Order 3 and would require amendment if Order 3 was successfully challenged. 2. In the Notice of Appeal, the Home Owner contended that the Tribunal had erred in respect of many of the contract and defect issues dealt with in the reasons, including issues other than spa leakage and the height of the spa. 3. At the hearing of the appeal, Mr Lloyd, Counsel for the Home Owner, made it clear that the only grounds of appeal that were pursued were those described in the written submissions. Those submissions only addressed spa leakage and height issues. 4. With some justification, Mr O'Connor, Counsel for the Builder, complained that it was not clear what grounds of appeal were being pursued. Part of the problem in that regard arose from the written submissions of the Home Owner, which referred to numbered Grounds of Appeal that did not match the six grounds stated in the Notice of Appeal. The Notice of Appeal was also difficult to interpret. 5. As we have mentioned, at the hearing of the appeal, it was made clear that all grounds of appeal that did not concern the height and leakage issues (referred to in the Notice of Appeal as Defect 1 and Defect 2, respectively) were no longer pursued. Furthermore, except in one respect, the written submissions of the Home Owner on the appeal concerning these two alleged defects fell within the ambit of the grounds of appeal in the Notice of Appeal concerning these two alleged defects, being those numbered 1, 2 and 5, when read in conjunction with the additional material set out in Section C of the Notice of Appeal concerning these grounds, which addressed both errors of law and errors for which leave to appeal was required. The exception was a new ground of appeal raised in the written submissions in respect of the leakage issue, namely that there was significant new evidence obtained since the hearing showing that the spa leaked. 6. It became sufficiently clear that the grounds of the appeal concerning these two alleged defects were: 1. With respect to the leak issue, 1. the Tribunal's conclusion that leaking had not been established was against the weight of the evidence (Ground 5 in the Notice of Appeal). In support of this ground of appeal, the Home Owner gave prominence to the evidence as to leaking given by Mrs Matterson in an affidavit and in cross-examination at the hearing. One aspect of the explanation of this ground of appeal in the Notice of Appeal is relevant to the ground of appeal referred to in (b). This was the reference to the absence of any reasons from the Tribunal for finding that the Tribunal preferred the evidence of Mr Fong over Mrs Matterson (assuming this was what the Tribunal had found) and that there was no indication in the reasons that the Tribunal did not find Mrs Matterson to be a credible witness (paragraph 42 of the Notice of Appeal). Other evidence concerning the leak was referred to. Leave to appeal on this ground was sought; 2. in arriving at the conclusion that leaking had not been established, the Tribunal had made an error of law in failing to give any or any adequate reasons for the conclusion. At the hearing of the appeal, we gave leave for the Appellant to file and serve an Amended Notice of Appeal raising this as a new ground of appeal; 3. there was significant new evidence that the spa leaked, which was not reasonably available at the time of the hearing. Leave to appeal on this ground was sought. 1. With respect to the height issue, 1. the Tribunal erred in law by misconstruing the contract as providing that the datum point was the top of the pavers sitting on top of the existing pool structure (Ground 1 in the Notice of Appeal); 2. the Tribunal's decision that the height of the spa, as constructed, was 670mm and, therefore, within the contractual tolerance for height was against the weight of the evidence because the evidence as to the height of the "topping" that needed to be deducted to arrive at the height required by the contract was insufficient to warrant that conclusion (Ground 2 in the Notice of Appeal). Leave to appeal in respect of this ground was required; 3. there was significant new evidence, which was not available at the time of the hearing, that the correct height of the spa was not as found by the Tribunal. Leave to appeal on this ground was sought. 1. At the hearing of the appeal, the Builder opposed the Home Owner's application for leave to file and serve an amended Notice of Appeal to include the ground concerning inadequate reasons, referred to in paragraph 23(1)(b). At the hearing, we granted such leave because it seemed to us to raise a point of potential merit in respect of the absence of reasoning concerning Mrs Matterson's evidence about leakage, which had been given prominence in the Home Owner's written submissions on appeal. It was also a criticism that had been referred to in the Notice of Appeal, although not characterised as a separate error of law, and that, if needed, the Builder could be given time to provide written submissions on the point. In those circumstances, it seemed to us that permission to rely on this ground of appeal accorded with s 38(4) of the Civil and Administrative Tribunal Act 2013 (NCAT Act) and with the guiding principle in s 36(1). 2. The Builder made an application for costs of the Home Owner's application for leave to amend the Notice of Appeal. We rejected that application and ordered that there was to be no order as to the costs of the application. We so ordered because we could not see how any costs of the Builder had been wasted or thrown away by permitting the amendment and because of the matters we have already referred to for allowing the amendment. 3. We gave directions in respect of the filing and service of the amended ground of appeal and for the Builder to provide any written submissions in respect of the new ground of appeal. We did not include a direction for the Home Owner to provide written submissions in support of the new ground of appeal because it seemed to us from the oral submissions of Mr Lloyd at the hearing that the Home Owner's submissions on this new ground had already been made. The emphasis in those oral submissions was on the absence of any reference to Mrs Matterson's evidence about leakage. Mr Lloyd did not ask for an opportunity to provide written submissions in support of this new ground. We also gave directions for the parties to provide written submissions as to the orders to be made on appeal in the event that the new ground of appeal was upheld. 4. Those directions were complied with. The amended ground of appeal was in terms: The Tribunal erred at law in failing to give reasons or, in the alternative, adequate reasons for its finding that the spa does not leak. 1. In the Builder's written submissions on this new ground of appeal made after the hearing, the Builder complained of a lack of procedural fairness because, as it submitted, it did not understand the case that was being made about a lack of reasons and that the amended ground of appeal did not contain any explanation of the basis of the contention concerning a deficiency of reasons. In light of that submission, we made further directions for the provision of written submissions from the Home Owner in support of the new ground of appeal and for written submissions in reply (letter from the Tribunal to the parties dated 14 September 2017). Those additional submissions have now been supplied. Consideration – leave to appeal on the basis of new evidence 1. Firstly, we deal with the application for leave to appeal based upon significant new evidence. The Builder opposed the applications. 2. The power to grant leave to appeal in such circumstances is contained in cl12(1)(c) of Schedule 4 to the NCAT Act which provides: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: … (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 new evidence relied upon was an affidavit sworn by Mr Matterson dated 24 May 2017. This affidavit contained evidence of investigations, carried out after the Tribunal's decision, relating to both the leak and height issues. For the purpose of the application for leave, we assume, without deciding, that what Mr Matterson says in his affidavit is correct. We recognise that what Mr Matterson says in the affidavit has not been tested by any cross-examination. 2. We accept that the evidence contained in the affidavit about these two issues is significant. 3. As to the leak issue, Mr Matterson deposes to a dye test he carried out in April 2017 and to the results of that test, which he says conclusively prove that the spa is leaking. 4. As to the height issue, Mr Matterson deposes that new measurements of height, with the top of the concrete structure of the spa now exposed, reveal that the height from the top of the pool pavers to the top of the concrete structure of the spa (before the "topping", being the spa paver and mortar immediately underneath the spa paver) was 700mm. In arriving at this measurement, Mr Matterson deposes that the depth of the mortar between the paver on top of the spa and the top of the concrete structure of the spa was only 10mm. The height of 700mm exceeds the allowable contractual height of 670mm. The significance of this evidence is apparent when considered in the context of the height issues on appeal dealt with below. 5. However, these were investigations that could have been carried out by the Appellant before the hearing in the Tribunal in November 2016 and the evidence about them prepared and provided at that hearing. What the Appellant submits is that the evidence was not "reasonably" available because, as he knew would be the case, the investigations were damaging to the spa. At one point, Mr Lloyd for the Appellant submitted that the leak test, which had involved the use of dye, had destroyed the spa by red staining. 6. The Home Owner referred us to the decision of the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 11, which states that the test concerning availability of evidence is an objective one (at [19]) – a statement with which we agree and apply. 7. We do not accept that this new evidence was not reasonably available for the hearing before the Tribunal. As Mr Matterson's affidavit makes clear, what occurred is that having lost on the leak and height issues in the Tribunal the Appellant decided that the facts as found by the Tribunal could be shown to be incorrect by better evidence: at [4] and [6] of the affidavit. He explains this step by saying that he was very surprised by the decision that the spa was not too tall, and that it did not leak, and that he had not wanted to carry out the further investigations before the hearing because it would cause damage to the spa, "some of it permanent": at [6]. 8. The first point we make is that these facts were controversial at the time of the hearing at first instance. Mr Matterson's evidence indicates that he expected to succeed in establishing the facts in his favour, but he does not give evidence that there was a basis for thinking that these facts were not really in issue. Accordingly, he needed to prove his case. Secondly, as troubling as it may have been to damage the spa in order to find the better evidence, such a course is sometimes required in order to obtain proof of a defect. Thirdly, we are not concerned with investigatory steps causing damage to an item of unique or special value such as an artistic work. Fourthly, Mr Matterson's evidence does not establish that it will be impossible to rectify the damage said to have occurred, even if such rectification work could be quite extensive, as would appear to be the case in respect of the red staining. 9. Finally, we do not accept that the investigatory steps have destroyed the spa. So far as the height issue is concerned, the investigative work involved chiselling away a portion of a spa paver, a spa tile and a section of the underlying mortar, the removal of a pool paver and scraping away some underlying mortar. Measurements were then able to be made of now exposed areas. The description of this work does not establish that there would be any great difficulty restoring the spa to its condition before the work was done, let alone that such damage was permanent. 10. So far as the leak issue is concerned, Mr Matterson deposes (and produces photographs) to fairly extensive red staining of spa tiles and adjacent pavers. He says that "it is unlikely" that he will be able to remove these stains: at [21]. However, that does not exclude the carrying out of work to replace the stained tiles and pavers, albeit that such work might be extensive. 11. For these reasons, we do not agree that the new evidence was not reasonably available at the time the proceedings were being dealt with, as required by cl 12(1)(c). We refuse leave to appeal on this ground. Consideration – leak issue – adequacy of reasons 1. We have set out in paragraph 15 that part of the reasons in which the Member explains the basis of the finding about leaking. 2. It is the absence of any reference to Mrs Matterson's evidence about leaking that is the basis of the Home owner's complaint of a lack of reasons. 3. The Builder takes issue with this complaint and contends that there was no error by the Tribunal in circumstances where: 1. The findings of the Member were clearly based upon the expert evidence of Mr Fong, which was seven and a half months after the Home Owner's expert had inspected the spa, and he had given evidence that he did not witness any leakage through the spa walls, nor was there any evidence of wet spots around the spa pool walls or base. 2. It would seem curious for there to be a complaint that the Tribunal did not specifically discount the evidence of Mrs Matterson in circumstances where the parties had chosen to advance their cases through competing expert evidence. 3. It would be even more curious for the evidence of Mrs Matterson to be preferred over the evidence of an expert in circumstances where it was doubtful that her evidence that the spa still leaks could be even described as evidence and, in any event, did not go beyond bald assertion, giving no basis given for her statement. Also, it was an opinion for which no basis was given. 4. It was implicit in the conclusion that Mr Fong's evidence was the most "current evidence" that the Member was discounting the evidence of Mrs Matterson because that of an expert was to be preferred over that of an interested party. 5. Accordingly, the Home Owner can hardly be said to have a real "sense of grievance", as he contended. 1. The Builder also submits that should the Appeal Panel decide that there was an absence of reasons, the Appeal Panel should "redress such concerns themselves" rather than send the matter back to the original Member for rehearing. 2. In view of these submissions, it is necessary for us to examine reasonably closely the evidence from Mrs Matterson and Mr Fong. But, as we explain later, we do so in a limited way because we are not in a position to express any final view about their evidence and the findings that should be made. 3. Before we come to the evidence of the experts and Mrs Matterson on the leak issue, it is relevant to note that the material before the Tribunal, including the Rectification Order, tended to indicate that at a point in time, not long after the spa was built, there was a leaking problem. The issue before the Tribunal, on the material before it, seemed to be more about whether the leaking problem had disappeared by the time of the hearing. Some material presented by the Builder referred to the prospect that leaking was capable of being cured over time by calcification. Hence, up to date evidence about leaking at the time of the hearing was of particular interest. 4. In that context, we turn to the evidence of the experts and Mrs Matterson on this subject, which was as follows: 1. The Home Owner's expert - Report from Mr Down dated 5 July 2016 (based upon an inspection on 5 February 2016) … 1 SITE OBSERVATIONS The new spa structure has been constructed on a large flat step/ledge in the corner of an existing concrete pool. It extends above the coping height of the pool. At the time of the inspection the spa was complete with all tiling and cladding installed. I note that the pool and spa were full with water at the time of the inspection which limited access to all sides of the spa. After examining the spa structure on site, it was clear that the spa walls were wet and leaking on at least 2 of the 4 sides. The pavers around the base of the spa also appeared damp from water leaks. I note that there is some minor brown staining and calcification occurring to the finishes on the spa. … It is now clear from our observations that the repairs were not adequate. The spa structure as viewed now leaks considerably and further rectifications are required to prevent the leaking water. … The leaking water has the potential to compromise the durability and lifespan of the structure. As noted in the earlier section other than the starter bars, the reinforcement bars do not have any protective coatings. The leaking water is now most likely coming into contact with this unprotected reinforcement in numerous locations. I believe there would be a high probability that the corrosion process will begin in the future if it hasn't already. Potential future problems associated with corrosion are corrosion/brown staining to the spa finishes where the water leaks out and at worst possible spalling of concrete from corroding bars. This water infiltration and associated reinforcement corrosion would potentially compromise the durability and lifespan of the structure. 1. The Builder's expert – report by Mr Fong dated 25 September 2017 (based upon inspections on 23 February 2016 and 23 September 2016) … Site Observations 5. The spa was full of water but not operating at the time of my inspections. Hence I could not observe the water overflow from the spa wall tracking around the stone finish to the outside wall of the spa onto the pool concourse. A vertical cut was observed through the stone finish on the left side of the spa, but no Perspex strip had been embedded as recommended by Manfred Wiesemes. 6. I could observe no other leaks, damp or wet spots around the spa wall finish. In particular near the base of the back wall it felt dry. … [The following sentence appears in Mr Fong's first report dated 3 March 2016 at the end of paragraph 6, but not in the same paragraph in the above second report: "However, there was no opportunity to observe the spa in operation to determine whether leakage through pipework within the spa walls was evident]. … Comment on report by Anthony Downs (AD) of Jones Nicholson Consulting Engineers 9. The reported leakage in item 1 of the report states "the spa walls were wet and leaking on at least 2 of the 4 sides." It is not clear if the spa was operational at the time of this inspection. I did not observe any leakage or wet spots. … 1. Mrs Matterson's affidavit dated 12 October 2016 … 27. Despite the repairs undertaken during the project and on completion the spa still leaks and Sunrise Pools was ordered to fix the leaks. Numerous times Sunrise pools have stated they will return to fix the leaks but are yet to do so. The leaks are now causing mould growth on the pavers and I am concerned mould will continue to grow and cause this areas (sic) to become slippery and dangerous when my children are playing around the pool. Attached at "SM4 Photo 20" is the photo I took of the mould growing under the locations of the spa leaks. 1. Mrs Matterson's cross-examination on 24 November 2016 (page 28, line 40 to page 29, line 12) So you say there's a leak still occurring to that spa? --- Definitely. Where's that leak? --- It's not just one. Well, where's the leak at? --- Okay. There's one on the back of the spa wall that leaks onto the pavers. There's one that leaks into the pool when you step in. And also on the cut edge, where the stone was cut, water drips through there and leaks everywhere. So basically on all four sides, if you like. And you read your expert report about that? --- Which one? Jones Nicholson. --- As I said, I read it briefly. Yeah, I've read bits of it. And he mentions only two leaks. --- Okay. Well, I live there. I see the leaks. I know where they are. So the two other leaks happened since February? --- They – no, they've always been there. 1. In the first expert report about the spa dated 10 November 2015, which was from the Builder's expert, Mr Wiesemes, it was stated (on page 6): FINDINGS … I noted two places where there was evidence of a small amount of water leakage. One was near the overflow at one side of the spa wall, the other was on the other side wall of the spa. OPINION … The leak near the edge of the overflow appears to be travelling along the tiles, and can be repaired by placing a strip of Perspex into the cut provided to prevent water travelling around the corner. The other side should be investigated and be repaired as required. It is only a minor leak and it has been my experience that this type of leak often calcifies and seals. 1. In light of the above submissions from the Builder, we make some, but not comprehensive, observations about the evidence of Mrs Matterson and Mr Fong. In doing so, we recognise that we did not have the Tribunal's benefit of hearing from the witnesses. We note: 1. Mrs Matterson was not a disinterested witness. 2. Nevertheless, she was in a better position that Mr Fong to make continual and up to date observations as to leakage from the spa, which to a considerable extent did not depend upon expertise, including when the spa was operational and being used. She expressly said in her cross-examination that her evidence was based upon what she saw. Her evidence was given in emphatic terms. 3. Her evidence included evidence of the most recent observations of the spa in the material before the Tribunal. 4. Her evidence, including, as expanded upon in cross-examination, contained some specifics as to the nature and location of the leaks and of mould in the vicinity of the leaks. We do not agree that it did not go beyond bald assertion. 5. Her evidence was not attacked in cross-examination on the basis that she was giving false evidence, nor were specific matters put to her that might explain that the specific matters she referred to were not referable to leaks through the structure of the spa. 6. On the face of it, Mr Fong's evidence had its limitations. His opportunity for observation was limited in time and as to what was being done with the spa. Also, his evidence pre-dated that from Mrs Matterson and it does not in terms deal with her evidence about mould. 1. Furthermore, we are unable to accept that the parties advanced their cases solely through the evidence of experts. The Home Owner presented the evidence from Mrs Matterson at the hearing. We have not been shown any basis for a conclusion that there was some express or implicit recognition by the Home Owner at the hearing at first instance that her evidence should be disregarded or that little weight should be attributed to her evidence. 2. In these circumstances, in our opinion, Mrs Matterson's evidence was sufficiently significant that the reasons for decision on this central controversy as to leakage needed to refer to her and explain what the Tribunal made of it and why it was not to be accepted, if that was to be the case. In our opinion, the Tribunal erred in law in not doing this: Collins v Urban [2014] NSWCATAP 17 at [46] – [57]. As to dealing with conflicting evidence, see: Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 443.7; Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 per Allsop at [2]; Mifsud v Campbell (1991) 21 NSWLR 725 per Samuels JA at 728; Hadid v Redpath [2001] NSWCA 416 per Heydon JA at [53]; Khan v Kang [2014] NSWCATAP 48 at [41]. 3. In the passage from Collins v Urban to which we have referred reference is made to part of the judgment of Samuels JA in Mifsud v Campbell (1991) 21 NSWLR 725 at 728 in which His Honour referred to a "sense of grievance" that can arise, and that a litigant may not just be disappointed but "disturbed" by a decision which fails to refer to evidence "critical" to an issue in the case and contrary to an assertion accepted by the trial judge. We see those remarks as pertinent to the problem that arises in this case. 4. In this regard, we adopt the following remarks from Allsop P (as he then was) in Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [2]: There are ample statements of this Court and of the High Court to express the duty upon judicial officers as to the giving of reasons. Many of those expressions state the matter by reference to general principle, rather than by reference to the facts of the particular case. The cases referred to by Campbell JA at [116] are examples of the former. I do not intend to express any doubt or qualification about them. In many cases, however, a judge may, in dealing with large bodies of evidence, be forced to economise in expression and approach in order to be coherent in resolving the overall controversy. The need for coherent and tolerably workable reasons sometimes requires truncation of reference and expression. Judgment writing should not become a process that is oppressive and that produces unnecessary prolixity. Not every piece of evidence must be referred to. That said, central controversies put up for resolution by the parties must be dealt with. The competing evidence directed or relevant to such controversies must be analysed and resolved…. 1. Of course, we recognise that not all the evidence concerning a disputed issue needs be referred to and analysed. 2. The parties provided written submissions concerning the course that we should take in the event that we found that the Tribunal had erred in relation to the adequacy of reasons. The Home Owner pointed out that its first position was that there was ample evidence for the conclusion that the spa leaked and that the Appeal Panel should proceed to so find. He also submitted that given the evidence as to the number and nature of the leaks, it was open to the Appeal Panel to order that the Builder demolish and rebuild the spa. Nevertheless, the Home Owner accepted that there were difficulties for the Appeal Panel in proceeding in this way, given that more than one conclusion was available as to leaking, the Appeal Panel had not heard the oral evidence and had not heard the debate about relief. 3. The Builder submitted that there seemed little reason why the Appeal Panel could not make whatever finding it deemed necessary. The Builder also submitted that if the Appeal Panel was minded not to arrive at its own conclusion it should remit that issue alone to the Tribunal for redetermination on the evidence as it stood at the hearing. 4. From our analysis of the differences between Mrs Matterson's evidence and Mr Fong's evidence, and our remarks about that, it will be apparent that we do not agree that we should proceed to decide the issue for ourselves. Whilst we could expand upon the remarks we have already made about strengths and weaknesses of the evidence from Mrs Matterson and Mr Fong, we could not satisfactorily arrive at a conclusion on the factual question whether or not the spa was leaking. 5. Given the competing evidence on the issue, it would be necessary for us to hear all the witnesses on the leakage issue and their cross-examination, including additional evidence from witness(es) that we assume the parties will or may wish to present about the current state of leaking and, if there is leaking, the nature and extent of it, and the steps needed for rectification. We do not regard that as an appropriate course for the Appeal Panel to take. 6. We refer to additional evidence because, in our opinion, now that the leakage issue has to be re-determined, it would be artificial for that issue to be decided upon the original evidence without regard to evidence concerning the current state of the spa. Some period of time has now passed since the hearing in November 2016. We are conscious of the untested, fresh evidence sought to be relied upon by the Home Owner. There are a number of possibilities that could affect the overall result, or the extent of the relief to be ordered. For example, we have already referred to material suggesting that the situation with leaking may change over time. Even if it were to be established that there is some leaking (and we make no comment upon the merits of that contention), there is scope for evidence as to its precise extent and as to what is necessary and reasonable to fix any problem and, for example, whether a complete rebuild should be ordered. 7. Accordingly, we have decided that the claim based upon the spa allegedly leaking is to be remitted to the Tribunal for redetermination, with the parties to be given the opportunity to present further evidence on this issue, and for directions to be given by the Tribunal fixing a date for a new hearing, a timetable for the provision of further evidence in advance of that hearing and for the identification of the evidence already provided to the Tribunal upon which each party relies. 8. Furthermore, it is more efficient that the redetermination be made by the Tribunal Member who has already heard the evidence on this issue. No party suggests otherwise. Consideration – leak issue – finding against the weight of the evidence 1. We do not uphold the Appellant's submission that the finding concerning leakage was against the weight of the evidence. In the first place, our conclusion as to adequacy of reasons presents an obstacle to a proper consideration of the weight of the evidence. Secondly, in the context of deciding not to determine the issue ourselves we referred to the difficulties confronting the Appeal Panel in resolving the conflicting evidence. The same difficulty exists in assessing the weight of the evidence. Consideration – height issue – other grounds of appeal 1. Error in construing the contract 1. The Appellant did not challenge the Tribunal's conclusion that the contract included a term permitting an allowance of plus or minus 70mm in measurements, including measurement of the height of the pool. 2. However, the Appellant contends that the Tribunal erred in law in construing the term about height to mean that the "datum point" was at the level of the top of the pool pavers. The Appellant submitted that on the proper construction of the contract the agreed height of the spa had to be measured from the level of the top of the pool structure, excluding the pool pavers and mortar attaching those pavers which were immediately above the pool structure. The Appellant acknowledged that this level was not visible when the contract was made and could only be identified after a paver and the underlying mortar was removed, but says, correctly, that removal of some pavers and mortar was part of the contract works in building the spa. 3. It is uncontroversial that if the correct level for measurement was the top of the pool structure then the spa was too high. 4. The part of the contract with which we are concerned was as follows: 5. The datum point is a fixed point or mark used for determining levels for the pool structure. It should be easily identified. It can be part of an existing structure or created by fixing a designated marker on site. The datum point is: EXISTING POOL [inserted in hand writing] SELECT  The pool concrete structure will be level with the datum point; or The pool concrete structure will be finished …600 mm above below  the datum point. The coping will be placed on the achieved level. CONFIRM ON SITE 1. The ticks, the entries "600mm" and "CONFIRM ON SITE" were also inserted in hand writing. 2. In construing this contractual provision, the Appellant submitted that the Tribunal erred in two respects. First, it erred by adding in an unexpressed requirement that the datum point "must be visible": at [78]. Secondly, in failing to construe the provision contra proferentum against the Respondent. Both of these points raised questions of law. 3. The Respondent submitted that it was entirely reasonable for the Tribunal to find as it did. 4. We do think that the Tribunal erred in its approach to the construction of the term by, apparently, imposing a requirement that the datum point be visible. 5. However, for the reasons below, we agree with the Tribunal's conclusion as to identification of the datum point as the top of the pool pavers. In essence, it seems to us, looking at the matter objectively, that is the meaning that reasonable persons would understand the datum point to be, having regard to the language used in the contract and the physical setting known to both parties at the time when the contract was made. 6. We accept that, on the face of it, there was ambiguity about the meaning of "existing pool" in this provision as a reference point for the measurement of the height of the spa. We note that no party contends that this meaning is too uncertain to be ascertained. 7. Looking first at the text of the provision, we note, in particular, these four aspects: 1. In contrast to the typewritten references to the pool "structure" and "pool concrete structure", which were applicable to the spa itself, the words used for the datum point, namely "EXISTING POOL", did not include the "structure" element. That tends to suggest that something other than the concrete structure of the existing pool was intended as the reference point. 2. As to what that something other might be, a height for a spa that is to be above an "existing pool" is more sensibly seen as a height above a place where one stands to enter the pool rather than the level of the water in the pool, which is variable. 3. Strictly speaking, the guiding words concerning the identification of the datum point do not make it mandatory that the datum point be easily identified, but they do, at least, provide a strong indication that the point chosen by the parties is likely to be of that nature. 4. The parties have not deferred the selection of the precise height to a future date when the necessary removal of some pavers to fit and build the spa has occurred. This suggests that the height can be readily discerned and appreciated by, for example, placing a measuring tape or stick on a known level at the time the contract was entered into. 1. The "existing pool' was known to both parties at the time when the contract was entered into. The level of the pavers was clear to all. It was the level from which one entered the pool and was also the level from which the spa was to be entered. No one suggests that the level below the pavers was exposed or that the 600mm measurement was the result of any actual attempt by the parties to make a measurement from the level below the pavers. 2. Having regard to these surrounding circumstances and the text of the provision, in the context of the contract as a whole, in our opinion, the meaning of the provision is that the datum point is to be the top of the pool pavers. 3. We do not agree with the Home Owner's submissions that rely upon contra proferentum. First, it is a rule of last resort: Port Macquarie-Hastings Council v Diveva Pty Limited [2017] NSWCA 97. For the reasons already given, we are able to discern the meaning of the provision by reference to the text and the surrounding circumstances. 4. Furthermore, the Home Owner submitted that it may be inferred that Sunrise Pools drafted the words "existing pool". It may well be that the handwritten entry "existing pool" was made by a person acting on behalf of the Builder. However, we are not dealing with a standard, typewritten clause. Nor is it a clause that is concerned with defining the liability of the Builder, or a clause in the interest of the Builder, that one might expect the Builder to unilaterally prepare and then proffer for acceptance. It is a clause to record the height wanted by a customer and accepted by the Builder. The subject matter, and the provision for a handwritten entry, suggest that the entry would be variable depending upon prior dealings with the customer and mutual consent. In the circumstances, we are not in a position to say whether or not the words "existing pool" reflect a specific agreement with the Home Owner expressed in language for which each party is equally responsible. Accordingly, we are not persuaded that the rule is, in any event, applicable. 1. (b) Errors in fact finding about height 1. The Appellant sought to challenge aspects of the fact finding by the Tribunal about the height of the spa. Mr Lloyd for the Appellant submitted that the Tribunal erred in finding that the "topping" above the top of the spa structure was 80mm: at [81]. He went further and submitted that on the "available evidence" the Tribunal should have concluded that the height of the spa was greater than 670mm and, therefore, was built to a height that was in breach of contract. 2. For the reasons below, we do not accept these challenges to the Tribunal's fact finding. 3. It is important to keep in mind that the Appellant bore the onus of establishing that the height of the spa was above the contractual height. It should also be kept in mind that it was within the power of the Appellant to have provided precise evidence about this issue. 4. We also must apply the limitations with respect to obtaining leave to appeal contained in cl 12 of Schedule 4 of the NCAT Act, which provides: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision 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 Tribunal's finding that the height of the "topping" was 80mm was a significant finding because it was common ground that the contractual height of the spa was to be measured to the top of the unfinished spa before the "topping", the latter consisting of both the coping on the spa and the mortar beneath the coping. This meant that in identifying the contractual height of the unfinished spa, in circumstances where that height was not visible, the height of the "topping" had to be deducted from the agreed height measurement of 750mm taken from the top of the pool pavers to the top of the coping placed on the spa. 2. From what we were referred to on the appeal, the state of the evidence concerning the height of the "topping" consisted of: 1. Expert evidence from Mr Wiesemes, the Respondent's expert, in his report dated 10 November 2015, which was the source of the 80mm measurement, stating: On measuring the finished height of the spa coping I found it to be 750mm above the pool level. This indicates to me that the spa concrete structure finish level is approximately 670mm above the existing pool level … 1. An absence of evidence from the Appellant's expert (Mr Down), and from Mr and Mrs Matterson, taking issue with this evidence from Mr Wiesemes. Mr Down's focus was on measurements from the level of the unexposed top of the pool structure and not from the level of the top of pool pavers. He then took a measurement to the height of the underside of the spa coping, but gave no measurement of the depth of that coping or of the mortar underlying the spa coping. 2. Some oral evidence given in chief by Mr Wiesemes to the effect that it was very hard to estimate the height of the unfinished level of the spa, followed by an unclear answer, interrupted by an objection from Mr Matterson, about possible differences of "40, 50, 60mil" – this may have been part of an answer about the height of the material below the spa coping. Then, at the instigation of the Tribunal, Mr Wiesemes corrected an answer he gave about a height of 725mm, which appeared to suggest he had forgotten the evidence he had given in the report. Thereafter, he gave evidence consistent with that referred to above in his report, including that he had deducted an allowance of 80mm for the coping and "the adhesives or whatever" upon which the spa coping sat: transcript page 68.30 to 70.25. 3. Some cross-examination of Mr Wiesemes as follows (transcript, page 72.32-72.42): So just going over the page and I'll just take you to page 8 of your, your report. You say the height above the existing pool level was 750 millimetres. That's correct isn't it? --- Ah hmm. Now – and you were making an allowance there of 80 millimetres for a paver and whatever materials underneath? --- Yep. That material could be as thin as 10 mil if it was adhesive couldn't it? --- Yes, it could yes. You didn't open it up to find if it was cement or adhesive? --- No, I didn't 1. A provision of the contract stating that the coping on the spa was to be 20mm thick: clause S2.2.1. However, there was no specific evidence as to the thickness of the coping as installed. 1. It is, at least, questionable whether there was any or sufficient probative material provided to the Tribunal to enable it to make a positive finding as to the height of the spa. A conclusion for which there was no probative material would involve an error of law. 2. However, as we have already indicated, the unsatisfactory state of the evidence about this issue was a problem for the Appellant, once it was concluded that the height of the spa was to be measured from the level of the top of the pool pavers. There was, in our opinion, no evidence upon which the Tribunal could have concluded that the height of the spa measured from the top of the pool pavers to the top of the unfinished spa was greater than 670mm. 3. For those reasons, in our opinion, we are not satisfied that the Home Owner may have suffered a substantial injustice by the rejection of this claim (see cl12(1) of Schedule 4 of the NCAT Act). Stay application after the hearing of the appeal 1. After the hearing on 28 June 2017, the Appellant applied for a stay of the orders made by the Member dated 15 February 2017 pending the decision on appeal. Those orders included orders for the carrying out of some additional minor works to the spa within 21 days. That additional work had not been carried out at the time of the hearing of the appeal or at the time of the stay application. 2. The stay application also sought a stay of a costs order in the proceedings at first instance made by the Member on 27 April 2017. The costs order was that the Home Owner was to pay 90% of the Builder's costs as agreed or assessed. 3. No issue of a stay was raised by either party before the hearing of the appeal, or in the appeal papers, or at the hearing of the appeal. 4. One matter relevant to the stay application was that there was to be a hearing on 31 July 2017 of renewal proceedings commenced by the Builder on 30 May 2017 in respect of the orders made by the Member on 15 February 2017 for outstanding minor works to be carried out. Those renewal proceedings had the file number HB 17/24720. 5. At the request of the Appeal Panel, the Home Owner explained the background to, and basis for, the stay application in a letter dated 24 July 2017. The letter included submissions that if the Home Owner was successful on the appeal the minor works the subject of the orders made on 15 February 2017 may no longer be required or, at least, may be impacted by more substantial works that were to be done. So far as the costs order made on 27 April 2017 was concerned, reference was made to an application by the Builder dated 20 June 2017 for an assessment of costs that had been sent to the Home Owner and that it would be desirable to avoid the costs of an assessment pending the decision on appeal. 6. This letter from the Home Owner also referred to correspondence between the parties in which the Home Owner stated that he intended to apply for a stay of these orders at the hearing of the appeal. As we have already said, no such application was made. 7. We heard the stay application on 28 July 2017 and reserved our decision. In taking that course, it was particularly relevant that at the hearing of the stay application we were informed by Mr O'Connor for the Builder that the Builder had withdrawn the renewal proceeding. It was also clear that no works on the spa by the Builder were going to proceed pending the decision on the appeal. 8. In light of these circumstances and practicalities, and our decision on the appeal in respect of the leakage issue and consequential orders, including orders for submissions about the impact of our decision on the work orders made on 15 February 2017 and on the costs order made on 27 April 2017, we think that we should continue to reserve our decision on the stay application pending these further submissions and further submissions on the stay application itself in light of the decision on the appeal. 9. It may well be that as a consequence of our decision about the leakage issue, the course that should be taken is to not only set aside order 3 made on 15 February 2017 (the order dismissing the Home Owner's application), as we have decided to so order, but to also order that orders 1 and 2 be set aside (the orders concerning the carrying out of the minor works). However, the parties should be given an opportunity to address that issue in the light of this decision, as well as an opportunity to address the issue of the costs order made on 27 April 2017 and the costs of the appeal. Orders 1. For the above reasons, we order that: 1. Leave to appeal is refused. 2. The appeal is allowed in so far as it relates to the claim based upon an alleged defect that the concrete structure of the spa leaks. 3. Order 3 of the orders made by the Tribunal on 15 February 2017 be set aside. 4. The claim made by the Appellant based upon an alleged defect that the concrete structure of the spa leaks, but only that claim, be remitted to the Tribunal for redetermination, with the opportunity to be given to the parties to present further evidence in respect of this claim. 5. The matter be listed for a directions hearing in the Tribunal for the making of directions fixing a date for a new hearing of the claim referred to in Order (4), for the parties to give each other and the Tribunal further evidence in advance of a new hearing, and for the identification of the material to be relied upon by each party from the material already provided by the parties for the purposes of the hearing on 24 November 2016. 6. All claims made by the Appellant in proceedings HB 16/15856, other than the claim referred to in Order (4), be dismissed. 7. Within 14 days of the date of these orders, the Appellant is to give to the Respondent and to the Registry written submissions as to: 1. the orders that should be made on the appeal concerning Orders 1 and 2 of the orders made by the Tribunal on 15 February 2017, 2. the costs order made on 27 April 2017, 3. the costs of the appeal, 4. the stay application heard on 28 July 2017. 5. whether decisions about the matters referred to in (a), (b), (c) and (d) of this Order are to be made on the papers and a hearing in respect of those matters is to be dispensed with. 1. Within 14 days of receipt by the Respondent of the submissions referred to in Order (7), the Respondent is to give to the Appellant and the Registry its written submissions in reply. 2. Within 7 days of the receipt of the submissions referred to in Order (8), the Appellant is to give to the Respondent and the Registry any written submissions in reply to those ap to in Order (8). ********** 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: 09 November 2017