Precision Flooring Pty Ltd v Armstrong

1. [1]

   HIS HONOUR: By a summons filed on 20 November 2019, which was subsequently amended by leave of the Court on 2 July 2020 (“the amended summons”), Precision Flooring Pty Ltd (“the plaintiff”) appealed from, and to the extent necessary sought leave to appeal from, the judgment and orders delivered and made by Baptie LCM on 25 October 2019, by which her Honour awarded Ms Sandra Armstrong (“the defendant”) damages of $63,570: Precision Flooring Pty Ltd v Armstrong (Unrep, Local Court of New South Wales, Baptie LCM, 25 October 2019) (“Precision No 1”) .

PROCEEDINGS IN THE COURT BELOW

1. [2]

   The proceedings in the Local Court of New South Wales were commenced by the plaintiff. By an amended statement of claim filed on 1 April 2019, the plaintiff claimed the sum of $23,202.90 for breach of an agreement between the plaintiff and the defendant whereby the plaintiff would supply and install various timber products and install timber stairs at the defendant’s property at Roseville.

2. [3]

   The plaintiff claimed that the defendant’s conduct in failing to pay progress payments, as and when they fell due, was a repudiation of the agreement between the parties, which had resulted in loss and damage for the plaintiff.

3. [4]

   The defendant filed an amended statement of cross-claim on 22 December 2018 in which it was pleaded, inter alia, that the plaintiff (the cross-defendant on the cross-claim) was in breach of the Competition and Consumer Act 2010 (Cth) (“the Consumer Act”) and the Australian Consumer Law (“the ACL”) as the plaintiff had failed to supply goods, under the agreement between the plaintiff and the defendant, that:

   1. (1)

      were of acceptable quality;

   2. (2)

      were reasonably fit for the disclosed purpose;

   3. (3)

      corresponded with their description; and

   4. (4)

      corresponded with their sample in quality, state or condition.

4. [5]

   The particulars of those pleadings included:

5. [6]

   It was pleaded that the plaintiff guaranteed to the defendant that the services supplied under the agreement would, inter alia, be:

6. [7]

   The plaintiff also pleaded breaches of the Consumer Act and the ACL, with respect to services as follows:

7. [8]

   Baptie LCM gave judgment for the defendant essentially upon the basis that the plaintiff had supplied and installed timber flooring and stairs in the defendant’s home which were not fit for purpose.

THE LOCAL COURT ACT

1. [9]

   Section 39(1) of the Local Court Act 2007 (NSW) provides an appeal as of right to a party who is dissatisfied with a judgment or order of the Local Court to this Court “on a question of law”.

2. [10]

   Such an appeal must be predicated upon “an identified question of law” or “an erroneous answer in respect of a question of law”: see B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187 at [75] (per Allsop P) and [150] (per Basten JA).

3. [11]

   It may be observed, an appeal lies to this Court against a judgment or order of the Local Court sitting in its General Division, by leave, on a ground which involves a question of mixed law and fact (s 40(1)) or which is an interlocutory judgment or order, a consent judgment or order or an order for costs: s 40(2). That provision is in the following terms:

4. [12]

   Pursuant to s 41(1) of the Local Court Act, the Supreme Court may determine an appeal made under ss 39(1) or 40:

THE APPEAL

1. [13]

   Whilst the appeal was said to lie against the whole of the judgment of Baptie LCM, the grounds of the appeal were directed to particular aspects of the judgment of her Honour and confined to grounds which were said to constitute three errors of law to particular classes of error.

2. [14]

   Notwithstanding that the plaintiff brought the appeal from the whole of the judgment below, the grounds of appeal were structured so as to first identify findings below which was challenged in the appeal and then to identify the errors of law made by each such finding. The following are grounds of appeal so stated:

3. [15]

   I will hereafter refer to these grounds by the enumeration selected by the plaintiff (namely, grounds 1(a) to (h)).

4. [16]

   Some observations may be made in that light as to the course of the appeal.

5. [17]

   The defendant correctly contended that the amended summons brought a challenge to the whole of the judgment below but that, in substance, the appeal was brought against particular findings, namely, Precision No 1 at [47], [53] and [54], which only concerned the issues of distortions to the timber flooring laid by the plaintiff.

6. [18]

   In written submissions, the defendant took the course of meeting the appeal by reference to the impugned findings identified in the grounds of appeal (namely, grounds 1(a) to (d)) under a series of headings corresponding to those findings rather than, by those headings engaging with the errors of law asserted in grounds 1(e) to (h).

7. [19]

   The defendant then dealt with grounds broadly in the order dealt with in grounds 1(a) to (d), commencing with grounds 1(a) and (b) together. It was submitted, in this respect, that grounds 1(a) and (b) were findings of fact. It was submitted that the plaintiff attempted to convert them into “something more” by claiming they were made without evidence or contrary to procedural fairness or without adequate reasons. It was submitted that such suggestions would fail.

8. [20]

   It was submitted that it was assumed that there was no claim for judicial review of the Local Court Magistrate’s decision as there has been no compliance with r 59.3(4) of the Uniform Civil Procedure Rules 2005 (NSW).

9. [21]

   I agree with the plaintiff’s written submissions in reply that, by this process, the defendant’s written submissions tended to conflate the issues of no evidence to support a finding of fact and the adequacy of reasons. As I will discuss, contrary to the defendant’s written contentions, both of those issues concern questions of law.

10. [22]

    Similarly, with respect to ground 1(c) (and (b1)), the defendant submitted that the plaintiff required leave to appeal with respect to the finding that the timber floor was not fit for purpose because the issue raised by the plaintiff concerned the application of legal principle to the facts of the case (a similar issue arose with respect to ground 1(b1)). It was contended that the “leave ought to not be granted because there is no doubt as to the correctness of the Local Court decision and the quantum of the judgment demonstrates the understanding of the matter being further litigated”. The defendant then turned to the correctness of the judgment below.

11. [23]

    As to ground 1(d), the defendant submitted this was a mixed question of fact and law and required leave, which should not be granted.

12. [24]

    The approach of the defendant tended to, at least in written submissions, overlook that the gravamen of the appeal was not that the factual findings were simply erroneous but rather were made without evidence (with respect to Precision No 1 at [47] and [53]) and without adequate reasons as to all of the nominated paragraphs of the judgment in the grounds of appeal (there was a further question of procedural fairness).

13. [25]

    Nonetheless, the plaintiff’s written reply submissions tended to engage, in terms, with the defendant’s submissions including the structure of the defendant’s submissions whilst drawing attention back to the grounds of substantive grounds of appeal. Somewhat unusually, the defendant filed a reply to that reply.

ISSUES ON THE APPEAL

1. [26]

   By the written submission of the parties, the issues on the appeal were essentially distilled to three issues corresponding to grounds 1(e)-(h) on the appeal. These were represented by the following questions (addressed in the order of the submissions of the parties):

   1. (1)

      were certain findings of the Local Court Magistrate made without evidence (grounds 1(e));

   2. (2)

      were findings of the Local Court Magistrate made without adequate reasons (ground 1(g)); and

   3. (3)

      was there a breach of procedural fairness (ground 1(f)).

2. [27]

   Ground 1(h) was to the affect that the errors in law in the findings in grounds 1(a), (b) and (b1) had infected the findings in Precision No 1 at [53] and [54]. As such, it will be considered under the first issue.

3. [28]

   Those three issues shall hereinafter be referred to as, collectively, “the grounds of appeal”.

4. [29]

   The discussion of the submissions of the parties as to those grounds is derived from the oral submission of the parties and distilled from the written submission of that were referable to grounds 1(e) to (h).

THE DECISION IN THE COURT BELOW: PRECISION NO 1

1. [30]

   Whilst attention was directed in the appeal to those particular findings by the Local Court Magistrate, a somewhat wider review of the judgment below is appropriate.

2. [31]

   The preliminary aspects of the judgment in Precision No 1 consisted of the following:

   1. (1)

      That the proceedings were commenced by a company, that supplied and installed various timber flooring products and timber stairs, in the Small Claims Division of the Local Court. The defendant initiated the cross-claim in the General Division; essentially, for a failure to perform work as agreed or because of a claim for set off for defective work which was greater than the invoices claimed by the plaintiff.

   2. (2)

      There was a reference to the history of dealings between the parties, including that on 8 February 2018 the defendant claimed that she had contacted the plaintiff after the delivery of timber flooring products in boxes which were said to be damaged, as was the timber contained therein. The Local Court Magistrate also recorded that on 8 February 2018 the defendant noticed scratches and white marks on the timber and suggested they had resulted from the application of methylated spirits to remove glue from the flooring.

   3. (3)

      The defendant had part paid the invoices rendered and disputed that it had repudiated the contracts between the parties because the plaintiff was unable to satisfy the works contemplated in the contracts.

   4. (4)

      Whilst the plaintiff ultimately accepted that the stairs would need to be rectified after their expert stated that the stairs did not comply with Australian Standards, the plaintiff denied there was any evidence to support the defendant’s allegation that the entire flooring required removal and replacement. Mr Tony Powell was the expert called for the plaintiff. He produced a report of 27 May 2019 (“the Powell Report”). Mr Howard Ryan, was an expert called by the defendant, who produced two reports dated 30 April and 21 July 2019, respectively (hereinafter, the “First” and “Second Ryan Report”). There was a joint conclave, a joint report and concurrent evidence given by the experts.

3. [32]

   Her Honour then turned to the expert evidence, first noting that both experts had accepted that the stairs were not compliant with Australian Standards and would need to be removed or replaced. As to the flooring, it was indicated that the experts were unable to agree in two respects:

   1. (1)

      whether there was moisture damage evidence in the timber flooring; and

   2. (2)

      as to the process of rectification of the areas of flooring, which had been damaged by the methylated spirits and inconsistent staining.

4. [33]

   The defendant referred to Precision No 1 at [21], which was in the following terms:

5. [34]

   Her Honour then reviewed the evidence of the experts, particularly as to the moisture levels of timber flooring and the use of moisture metres. She referred to the issues in the expert evidence as follows (Precision No 1 at [29]):

6. [35]

   The defendant made reference to the expert evidence bearing upon those issues commencing at [30]. That discussion proceeded, in a manner which did not attract controversy as such on this appeal, through to [39]. I extract [30]-[39] of Precision No 1:

7. [36]

   Particular attention was drawn by the defendant to the finding in Precision No 1 at [40], which was in the following terms:

8. [37]

   Her Honour then considered evidence as to the method of testing before returning to Mr Powell’s evidence at [43]. That paragraph concerned evidence given by Mr Powell upon being shown a board from the defendant’s garage. As mentioned, it was a passage of particular significance and is extracted below:

9. [38]

   After further discussing some aspects of the disputes in the expert evidence, her Honour stated at [46]:

10. [39]

    Her Honour then made a finding which was specifically the subject of the appeal in the amended summons as to the no evidence contention (and concerned the distortion of the timber flooring). At [47], the Local Court Magistrate found:

11. [40]

    Her Honour then turned to the staining and disfigurement of the flooring as follows (at [48]):

12. [41]

    As to the removal and replacement of sections of the flooring, her Honour made the following finding (at [49]):

13. [42]

    At the conclusion of Precision No 1 at [50], her Honour commenced discussion as to a variety of considerations ranging from the stipulation by the defendant as to the work to be carried out and the nature of the implied consumer guarantees given by the plaintiff to overall conclusions as to the stairs, distortion to the flooring and staining of the flooring.

14. [43]

    Paragraphs [50]-[52] of Precision No 1 were uncontroversial. They are extracted below:

15. [44]

    Paragraphs [53] and [54] concerned the overall conclusions reached by Baptie LCM in Precision No 1 and were in the following terms:

The Plaintiff’s Submissions

1. [45]

   The plaintiff’s challenge to the judgment below, in this respect, was fixed upon those parts of Precision No 1 at [47] and [53] as earlier emphasised in this judgment by the italicisation relied upon by the plaintiff (see above at [39] and [44], respectively). The plaintiff contended that those passages of the judgment below represented a determination by the Local Court Magistrate that Mr Powell had conceded there was distortion in the flooring and, in the result, it was a common position between the experts on that issue.

2. [46]

   The plaintiff contended there was no evidence that supported that element of the reasoning of the Court below and, further, that this was an important factor in her Honour concluding that there was a distortion in the floor boards such that all floorboards should be removed in rectification.

3. [47]

   The plaintiff made the following additional submissions as follows as to distortion in the floor (this issue also has a relationship to the issue of rectification):

   1. (1)

      There were two core areas of disagreement between the experts. The first was whether there was moisture damage evident in the floor and the second, which was related to the first, was whether there was any “cupping” in the floor. Another question was whether the appropriate method of rectification of any area of the floor which showed imperfection, in the form of spotting and staining, should be rectified by re-staining or alternatively by replacing sections of the floor which were not capable of being repaired by spot fixing (to which I shall refer to below).

   2. (2)

      Again, at [43] of Precision No 1, her Honour referred to Mr Powell being shown a board in the course of cross-examination that had been kept in the garage at the defendant’s premises. Whilst it was accepted that this Court may not infer from the judgment below that the board was kept in the garage because it was defective as having been culled, it was submitted that “the Magistrate seems to have inferred something from that which is not in evidence”.

   3. (3)

      Again at [43], her Honour refers to Mr Powell’s evidence where he stated, as to the board in question, “This board here, will cause crowning not cupping”. Senior counsel for the plaintiff, Mr D Feller, submitted that Mr Powell’s evidence did not involve a concession that the piece of timber shown to him represented the floor as laid. There are two further important aspects of the evidence referred to by the Local Court Magistrate. First, the claim brought by the defendant was that the floor as laid exhibited cupping not crowning. Secondly, Mr Powell’s evidence was that the piece of timber in question, insofar as it was not flat, was exhibiting signs of crowning as opposed to cupping.

   4. (4)

      In the light of this submission, it was contended:

   5. (5)

      The finding in Precision No 1 at [53] was also not supported by the evidence. There is no evidence that Mr Powell agreed that there was some distortion in the flooring. What is being considered in this passage by Local Court Magistrate is not the sample of timber but the whole of the flooring as laid. That is because the paragraph commences: “In relation to the rest of the flooring”. There is no evidence that Mr Powell agreed there was some distortion in the rest of the flooring. He denied the product was exhibiting cupping consistent with excessive moisture and the Local Court Magistrate seems to be dealing with the question of cupping at [53]; such that the inconsistencies in the flooring that her Honour appears to be dealing with concern the question of cupping.

   6. (6)

      From that submission, the following proposition was advanced by the plaintiff:

   7. (7)

      It was then submitted that [53] of the judgment displays a clear error of law, in that it is not supported by the evidence and the conclusion drawn is not supported by the evidence. The last sentence of [53] is a non sequitur.

4. [48]

   Further, in support of those contentions, the plaintiff relied upon other aspects of the evidence bearing upon Mr Powell’s opinions; namely, the Powell Report, the joint conclave Scott Schedule (“the Scott Schedule”), evidence given by Mr Powell before the Local Court, together with evidence given by Mr Ryan and Mr Phillip Armstrong (the husband of the defendant).

5. [49]

   Reference was made to the Powell Report at 16, which is extracted below:

6. [50]

   It was contended that the Powell Report, therefore, made it clear that the flooring installed was of a commercially acceptable standard. Further, it was contended that the reference to the flat appearance of the floor was a negation of the proposition that “cupping” was present. In support of this latter contention, reference was made to the evidence of Mr Powell in cross-examination, as follows:

7. [51]

   As to the Scott Schedule, reliance was placed upon the following statements from Mr Powell:

8. [52]

   The plaintiff also relied upon Mr Powell’s evidence given at the hearing below, in which he stated:

9. [53]

   Reliance was also placed on the following evidence from the same day of the hearing:

10. [54]

    Reliance was placed upon Mr Ryan’s evidence, which was to the effect that Mr Ryan concurred that Mr Powell did not agree with his statement that there was cupping near the kitchen area. Similarly, reliance was placed upon evidence given by Mr Armstrong in cross-examination, as to an exchange between Mr Ryan and Mr Powell. Mr Armstrong’s evidence was that Mr Powell did not agree there was cupping in the timber pointed to by Mr Ryan.

The Defendant’s Submissions

1. [55]

   The defendant contended that Baptie LCM provided adequate reasons by making the findings of fact necessary to determine issues of want of fitness for purpose and the appropriate remedy if the timber floor was not fit for purpose. One issue in dispute was the levels of moisture and whether the flooring was negatively impacted by the existence of moisture. It was contended that both Mr Powell and Mr Ryan had taken moisture readings at the home. Mr Ryan's expert opinion was that the flooring was negatively impacted by moisture because of the moisture readings he took and the visual appearance of cupping.

2. [56]

   Mr Powell's evidence concerning the use of a moisture meter and his results were preferred to those of Mr Ryan. However, that was the not the whole of the evidence of the experts concerning the impact of moisture on the flooring. There was no “oven dry test” carried out, which would have been conclusive of the existence of moisture in the flooring. Mr Powell considered such a test unnecessary.

3. [57]

   Mr Ryan gave evidence that he had seen “cupping” in the timber and provided a photo of the timber to demonstrate that issue. Mr Powell took no photos of the same area, but denied there was cupping. Baptie LCM gave the parties the opportunity of further inspecting the site and carrying out further tests, and the plaintiff did not take that opportunity.

4. [58]

   The defendant was correct to submit that in Precision No 1 at [47] Baptie LCM drew a distinction between the expert evidence concerning the use of a moisture meter and the results deriving therefrom (where the Local Court Magistrate had exhibited a preference for Mr Powell’s evidence) and other concessions as to the destruction of the timber floor, namely, the issue of cupping and crowning.

5. [59]

   As to the latter consideration, the defendant submitted that “both experts considered there was distortion in the timber at the defendant’s home”.

6. [60]

   Adjusting for an amendment made to the written submissions of the defendant in support of that proposition, during the course of oral submissions, the defendant placed reliance upon the following unchallenged findings by Baptie LCM concerning Mr Powell’s evidence:

   1. (1)

      He expected that the flooring would be delivered wrapped in plastic with "the idea… to maintain the moisture content from production to the time of installation".

   2. (2)

      A number of the boxes of flooring were damaged and the timber also appeared to be damaged.

   3. (3)

      He had not been told when preparing his report that the timber was not tested for moisture when it was delivered or when it was delivered to the home, nor laid.

   4. (4)

      Mr Powell considered that the type of flooring would "crown" if affected by moisture.

   5. (5)

      He agreed that a piece of timber shown to him in cross-examination (which had come from the defendant's garage) evidenced some distortion in the form of "crowning".

7. [61]

   As to the last consideration, the defendant pointed to the evidence of Mr Powell where he, it was contended, conceded there was crowning the floorboard from the defendant’s home that he was shown to the effect that the floorboard was effected by moisture.

8. [62]

   It was further submitted in reply that:

9. [63]

   That submission sprung from answers given by Mr Powell in questioning by the defendant of the piece of timber. Mr Powell’s evidence, in that respect, (with emphasis upon the component relied upon by the defendant) appears below (it is a slightly longer extract of the evidence than taken in by Baptie LCM in Precision No 1 at [47]):

10. [64]

    Senior counsel for the defendant, Ms E Peden, who appeared with Mr T Bateman of counsel, made the following oral submissions as to [47] of the judgment below:

    1. (1)

       It was contended that:

    2. (2)

       By reference to [47] and [53] of Precision No 1, it was submitted:

    3. (3)

       Reference was then made to [47] of Precision No 1 and whether, it was submitted, Baptie LCM intended that the view of cupping or crowning on a floor was subjective and that even with some distortion of that view, the product would be commercially acceptable. The defendant stated, however, that question is whether it was “aesthetically acceptable to a customer”

    4. (4)

       Turning specifically to [53] of Precision No 1, it was contended:

    5. (5)

       As to staining, it was submitted that the question of “staining” was “clearly separate” to the issue of floor moisture. By reference to [48] of the judgment, it was submitted that staining was sufficient to sustain the remedy of replacement. As to staining, her Honour at [48] stated she preferred the evidence of Mr Ryan. She does not elaborate on that preference but it is submitted the conclusion is supported by the plaintiff had attempted to rectify the floor with sanding and further staining.

    6. (6)

       In the event the Court found there was no evidence to sustain that conclusion that Mr Powell had made the concession in question, the appeal would not succeed because that finding was not essential to the ultimate finding by the Court.

11. [65]

    Those submissions corresponded to parts of the defendant’s submissions in reply as follows:

12. [66]

    In the final disposition of this question, I have had regard to the defendant’s submissions as to the adequacy of reasons, which were summarised under the corresponding heading below.

The Plaintiff’s Reply Submissions

1. [67]

   It is convenient to set out the response of the plaintiff to those propositions at this juncture. The plaintiff submitted that the various findings concerning Mr Powell’s evidence did not rationally support the conclusion that “Mr Powell agreed that there was some distortion in the flooring” and, further, supported the contention that “there was no evidence on which the Magistrate could reasonably have based her finding that Mr Powell had conceded that there was some noticeable distortion in the floor”.

2. [68]

   Those propositions were supported by the following analysis corresponding to the five propositions advanced by the defendant (as set out at [60] of this judgment) as follows:

   1. (1)

      Whilst Mr Powell expected that engineered flooring would be shrink wrapped, as noted at [39] of the judgment below, he did not concede that the failure to do so would invariably affected the moisture of the boards, and stated, as noted at [40] of the judgment below, that this depended on the environment it was delivered into and how it had been stored. The Local Court Magistrate did not make any finding based on this evidence.

   2. (2)

      The difficulty with reliance upon this factor is that the Local Court Magistrate rejected Mr Ryan’s readings about the excessive moisture content. In any event, Her Honour made no findings at all about excessive moisture content. Nor does the Local Court Magistrate make any finding about cupping in the existing floor but merely finds there are inconsistencies without explaining what those inconsistencies were in a case that essentially concerned cupping. Thus, the issue of whether the product was shrink wrapped is irrelevant to the questions raised on the appeal because the moisture level does not seem to have featured in the Local Court Magistrate’s decision. There was simply no engagement in the issue of cupping or crowning, avoiding the issue by means of stating that there is a concession which results in an agreement that there is some noticeable distortion without even stating what the distortion was in the particular case.

   3. (3)

      The defendant's evidence that upon delivery "a number of those boxes were damaged and timber also appeared to be damaged" is noted at [8] of the judgment below, but is not again referred to in the judgment or in the reasoning process. The defendant's submissions do not point to any evidence specifying how the timber "appeared to be damaged" or if that damage is in any way relevant to the Baptie LCM's finding as to the existence of "inconsistencies in the flooring".

   4. (4)

      This is affected by the same considerations as (1) above.

   5. (5)

      Precision No 1 at [43] records Mr Powell's evidence, namely, that the type of flooring could either "crown" or "cup" depending on whether it is affected by a significant increase or a decrease in moisture content, respectively. However, as was also recorded in the judgment, Mr Powell stated that an engineered board in question may experience crowning but not cupping as the result of an increase in moisture content. The Local Court Magistrate did not make any use of this evidence, her Honour’s only reference being at [47] with respect to the Court's concern "with the issue of the cupping/crowning evidence, given by both experts". Further, Mr Ryan had only claimed the existence of cupping and not crowning. Baptie LCM did not make any finding resolving the issues whether: (a) cupping as opposed to crowning was possible, and (b) whether there was cupping evident in the laid floor.

   6. (6)

      At [43] of the judgment below, Baptie LCM recorded that Mr Powell was shown a board that had been in the garage at the defendant's premises and agreed that the piece of timber was not flat. Mr Powell did give that evidence and also said that it was "slightly" crowned. He then continued to explain the effect of moisture content on crowning or cupping. Mr Powell did not accept that the timber that had been laid exhibited any cupping as asserted by Mr Ryan or was otherwise anything but "flat". Moreover, there was no evidence that Mr Powell conceded that there was any noticeable distortion in the timber that had been laid and was the subject of the complaint. If the Local Court Magistrate was processing in her reasoning from Mr Powell's evidence that the piece of timber from the garage that was shown to him was not flat to her finding that he conceded that there was some "noticeable distortion" in the timber as laid, that reasoning was not readily apparent and required explanation for at least the following reasons:

3. [69]

   The submissions by the defendant as [60(1)]-[60(3)] above are examples of ex post facto reasoning being supplied to justify the Local Court Magistrate’s ultimate finding as to distortion. Baptie LCM did not refer to those matters.

4. [70]

   As to the question of reasons, it was submitted that there was no evidence of the particular findings which were fundamental building blocks in the reasoning chain leading to the decision and there was an absence of reasons in relation to various findings which were critical findings (which will be returned to below).

5. [71]

   It was contended, by the plaintiff, that the Local Court Magistrate’s finding that Mr Powell had agreed that there was some distortion in the flooring was an essential step leading to the ultimate finding in Precision No 1 at [53] (specifically, the second sentence) that there was no other explanation for the inconsistencies in the flooring except that the flooring was not fit for purpose.

Conclusion: The First Ground

1. [72]

   Whilst the plaintiff variously referred to the illogicality or irrationality of the decision making below, the ground of judicial review relied upon, in that respect, was squarely based upon there being no evidence to support the impugned findings (see the discussion of relationship between those grounds of judicial review: D’Amore v Independent Commission Against Corruption (2013) 303 ALR 242; [2013] NSWCA 187 (“D’Amore”) at [235] (per Basten JA); see also Brennan v New South Wales Land and Housing Corporation (2011) 83 NSWLR 23; [2011] NSWCA 298 at [93] (per Basten JA), citing Amaba Pty Ltd v Booth [2010] NSWCA 344 at [23]). As earlier mentioned, in my view, the attack in that respect was not upon a finding of fact per se but the ground was formulated as a point of law based upon there being no evidence to support the finding: see Workers Compensation Nominal Insurer v Hill [2020] NSWCA 54 at [82] (per Simpson AJA). However, it is ultimately necessary to analyse the impugned finding to determine whether the ground of appeal does, in fact, invoke that principle: Capital Carpets Pty Ltd v Schwartz Family Co Pty Ltd [2016] NSWSC 1753 at [52] (per McCallum J).

2. [73]

   The absence of material capable of supporting a finding on a material issue constitutes an error of law: Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty (2010) 241 CLR 390; [2010] HCA 32 (“Kostas”) at [91]; D’Amore at [224]. Thus, a tribunal which decides a question of fact when there is no probative evidence to support the finding makes an error of law (not a factual error): Kostas at [91] and [92]; Bruce v Cole (1998) 45 NSWLR 163 (“Bruce”) at 188-189.

3. [74]

   What amounts to material that “could” support a factual finding is ultimately a question for judicial decision (Kostas at [91]). Evidence in this respect means material which could rationally affect the decision-maker’s assessment of the probability of the facts in issue: D’Amore at [235].

4. [75]

   Similarly, the drawing of an inference without evidence to support it is an error of law: Bruce at 188; Whitehaven Coal Mining Ltd v Pain [2018] NSWCA 229 (“Whitehaven”) at [29] (per White JA, with whom Emmett and Simpson AJJA agreed).

5. [76]

   Thus, in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33 (“Bond”) at [87]-[88] (per Mason CJ, with whom Brennan J agreed) stated:

6. [77]

   Further, Mason CH stated in Bond (at [89]):

7. [78]

   Spigelman CJ in Bruce (at 188-189) observed that the expression reasonably open in this context went no further than requiring some probative evidence or other factual material.

8. [79]

   As Mark Aronson, Matthew Groves and Greg Weeks observed in Judicial Review of Administrative Action and Government Liability (2016, 6th ed, Thomson Reuters), at common law, when there is some evidence, no matter how unconvincing, and no matter how overwhelmed it might have been by evidence to the contrary, the traditional approach is to treat the complaint as being factual (although that is not to preclude the possibility of there being a jurisdictional error).

9. [80]

   In my view, the findings of Baptie LCM which were impugned under these grounds may be properly understood as follows:

   1. (1)

      An intermediate finding that there was a common conclusion by the experts that there was “at the very least, some noticeable distortion in the manufactured timber” (Precision No 1 at [47]). Given her Honour’s expressed understanding of Mr Powell’s opinion in that paragraph of the judgment below, the plaintiff was correct to submit that a finding was made that Mr Powell had made a concession to that effect. The concession was in relation to what Mr Powell had referred to as an “engineered board” or a “manufactured board” and was distinguished (both in the evidence below and the first instance decision) from the timber flooring as laid.

   2. (2)

      The ultimate finding in Precision No 1 at [53], which, in my view, contained the following elements:

10. [81]

    As to the last mentioned element of the finding, the plaintiff was correct to submit that there is an apparent illogicality (see (c) in the preceding list) as presumably the premise for the conclusion that the flooring was not fit for purpose was that there were inconsistencies in the flooring. However, the substance of what Baptie LCM found at [53] (and there seems to be no dispute in this respect) was that the timber floor as laid is not fit for purpose.

11. [82]

    The foundation for that conclusion is clouded by the non sequitur to which I have referred above. However, there can be little doubt that Baptie LCM reasoned to a finding that the flooring was not fit for purpose from the existence of inconsistencies or distortions in the floor as laid. In the result, the reference to there being “no other explanation for the inconsistencies in the flooring” relates, in my view, to the first sentence of the paragraph.

12. [83]

    As the first sentence of [53] impliedly (at least) recognises the dispute as to the existence of distortions in the timber floor boards as between the experts and Baptie LCM nowhere in her judgment explicitly resolves that dispute, it should be concluded that the basis for the reasoning in the second sentence (as to the existence of inconsistencies and the absence of fitness for purpose) was that which her Honour expressly relied upon in the first sentence, namely, the concession made by Mr Powell as found at [47]. The defendant seems to accept that process of analysis and refers to an acceptance of crowning by Mr Powell, although the defendant also contended that Baptie LCM also took into account damage in the packaging (to which I will return below).

13. [84]

    In the light of that analysis, I may now return specifically to the no evidence ground as confined by the plaintiff to [47] and [53] of the judgment below.

14. [85]

    As to the finding at [47], the plaintiff accepted that Mr Powell gave evidence that the engineered board was “slightly crowned” but disputed (as accepted by Baptie LCM) that it was cupped. However, it was correctly submitted by the plaintiff that Baptie LCM did not make any use of that evidence, stating only (at [47]) that the “Court is, however, concerned with the issue of the cupping/crowning evidence, given by both experts”. Mr Ryan’s opinion only extended so far as distortion in the timber boards were concerned with “cupping” and not crowning. The plaintiff was correct to submit that the Local Court Magistrate did not make any finding resolving the issues of whether cupping as opposed to crowning was possible and whether cupping was evident in the laid floor.

15. [86]

    Nonetheless, I do not consider that the challenge on no evidence grounds may be sustained with respect to [47] of Precision No 1. As discussed, the impugned finding, in that respect, is that “there is, at very least, some noticeable distortion in the manufactured timber”. When framed in that way, the finding is, in the light of the above discussion, no more than a finding that, in the board shown to Mr Powell (reference is made to “the manufactured board”), there may be noticed, to some extent (see the words “some noticeable” and “at the very least”) distortion.

16. [87]

    The evidence represented a concession by Mr Powell as to a distortion in the board in question (albeit that there was crowning which did not seem to be the area of dispute between the experts). That the evidence may have been slender is beside the point given the nature of the ground of appeal as I have previously explained.

17. [88]

    However, the same conclusion does not follow with respect to [53] of Precision No 1. Here, Baptie LCM was concerned with the flooring as laid as a whole not a sample of engineered board from the defendant’s garage.

18. [89]

    The only concession made by Mr Powell was that extracted in [43] of Precision No 1 but that concession did not extend to the floor as laid. Nor, in my view, was there any evidentiary basis, upon the extract of Mr Powell’s evidence appearing at [43] of Precision No 1 and the concession contained therein, to infer that there were distortions in the floor as laid.

19. [90]

    It follows that there was no evidence that Mr Powell had conceded that there was a distortion in the laid floor. In fact, there was no concession by Mr Powell that the timber boards, as laid, were other than flat. There was no basis in the evidence to infer from that concession that the timber floor boards as laid were distorted or inconsistent.

20. [91]

    Given that I have concluded that Baptie LCM’s conclusion at [53] was solely predicated upon the concession made by Mr Powell, there was no evidence to support the conclusion reached therein.

21. [92]

    It may be, as submitted by the defendant, that the question that Baptie LCM had to resolve on the cases put was whether the floor was “aesthetically acceptable to the consumer” but, so far as distortion of the timber floor was concerned, that issue hinged upon whether the floor was “flat”, the very subject to the impugned finding in [53].

22. [93]

    As to the existence of damaged boxes of timber or possibly damaged timber on delivery, I accept the submission for the plaintiff that, whilst Mr Powell expected the engineered flooring should be shrink wrapped, he did not concede that the failure to do so would have invariably affected the moisture content of the boards (which depended upon the environment it was delivered into or if it was stained). Further, in that respect, the Local Court Magistrate rejected Mr Ryan’s moisture readings (as to excessive moisture) and the Court below made no finding about cupping in the floor, merely finding inconsistencies upon the basis discussed above without further reasoning as to the respective opinions of the experts as to cupping (or for that matter crowning).

23. [94]

    I accept that the question of whether the engineered boards were properly shrink wrapped is not depositive to the issue raised on the appeal. Nor, in my view, did that consideration figure in the conclusions reached at [53].

24. [95]

    The finding in [53] was pivotal to the ultimate findings below for two reasons. First, as mentioned, I accept the submission made by the plaintiff that the finding by Baptie LCM that Mr Powell agreed that there was some distortion in the floor was an essential step leading to the ultimate finding that there was “that the flooring is not fit for purpose”.

25. [96]

    Secondly, it is true that there is a separate issue of staining and that the Local Court Magistrate made findings at [54] as to the removal and replacement of sections of flooring to which I will return (see [48] and [49] of the findings below and findings made as to the need for rectification in that respect), but it does not follow that, for the purposes of the finding in favour of replacement, the finding is severable from the findings as to distortion in [53]. The Local Court Magistrate introduced [54] by the words “In addition” and refers to “the two issues” causing the Court to conclude replacement is the “only appropriate remedy”. When read with the balance of [54], in my view, Baptie LCM found that replacement was the only appropriate remedy due to the cumulative effects of distortion and staining.

26. [97]

    Thus, the finding at [53], materially contributed to the determination as to the remedy in [54] vis-à-vis the replacement of the floor as well as the finding that the timber floor was not fit for purpose.

27. [98]

    In the circumstances, the plaintiff has thereby established grounds 1(e) and (h). The error is such as to be of significance to the ultimate disposition of the matter below and should, therefore, result in orders consistent with the relief claimed by the plaintiff.

The Plaintiff’s Submissions

1. [99]

   The plaintiff contended that Baptie LCM had failed to give adequate reasons for the following reasons:

   1. (1)

      Baptie LCM failed to give any reasons for finding that it was the common position of the experts that there was distortion in the flooring. There was no reference to any evidence where that concession was made.

   2. (2)

      It was submitted that, whilst a judge was not obliged to spell out every detail of the process of reasoning to a finding, it was essential to expose the reasons for deciding a point critical to the contest between the parties. Thus, it was necessary for the Local Court Magistrate to enter into the issues canvassed and explain why one case is preferred over another. The finding of fact in the first sentence of [53] of the judgment below, which was unsupported by reasons, was that "Mr Powell agrees that there is some distortion in the flooring". This was an essential step leading to the ultimate finding in the second sentence that "there is no other explanation for the inconsistencies in the flooring, except that the flooring is not fit for purpose".

   3. (3)

      In the circumstances, there was no evidence on which the Local Court Magistrate could reasonably have based her finding that Mr Powell had conceded that there was some noticeable distortion in the floor. Baptie LCM has not exposed her process of reasoning leading to that finding.

   4. (4)

      The finding that there was a common position between the experts then led Baptie LCM to the ultimate finding in [53] that there was no explanation for the inconsistencies in the flooring except that the floor was not fit for purpose. The Magistrate did not explain what the inconsistencies in the floor were, particularly in the light of Mr Powell’s denial of cupping and the finding that there had been some distortion in the flooring. Further, without knowing what the inconsistencies were it is not possible to ascertain why the flooring was not fit for purpose.

   5. (5)

      It is by no means clear that Baptie LCM considered that the staining on the floor was sufficient cause for the floor being considered unfit for purpose or requiring removal and replacement, referred to as to the “two issues” as the basis for her conclusion.

   6. (6)

      Baptie LCM failed to give any reasons for her finding at [49] of the judgment below for accepting the evidence of Mr Ryan over that of Mr Powell in relation to the difficulty in removing sections of the tongue and groove, and the unlikelihood of a uniform finish if the areas are simply patched. However, the unexplained finding at [49] is the basis for the finding at [54] that the stained areas could not be adequately dealt with by “spot” fixing.

   7. (7)

      Baptie LCM concluded, at [54], that the only appropriate remedy in respect of the staining issue and the cupping issue was the removal and replacement of the entire affected floor area. That conclusion, affected by the absence of sufficient reasons, is ambiguous. There is no explanation as to whether Baptie LCM concluded that each of the two matters referred to was by itself a sufficient condition for the requirement of removal and replacement of the entire affected floor area or whether the requirement was cumulative arising from the existence of both matters.

   8. (8)

      In particular, her Honour provided no reasons for, it was contended:

2. [100]

   In further oral submissions, the following submissions were made with respect to the question of staining as follows:

   1. (1)

      The passage of Precision No 1 at [48] concerns the separate issue of staining. There is a reference to a preference for the evidence of Mr Ryan but no explanation was provided the Local Court Magistrate either as to his opinion as to damage or the inadequacy of the means to rectify the damage. No explanation was given as to why Mr Powell’s evidence is not accepted.

   2. (2)

      The same difficulty arises with respect to [49], with Baptie LCM not expressing why Mr Ryan’s evidence was preferred.

   3. (3)

      As to [54], it was submitted, here the Local Court Magistrate ignored the question of replacement of sections of the floor, which was the subject of debate between the experts. The Local Court Magistrate fails to provide a reason why the stained areas cannot be adequately dealt with by spot fixing. The following submission was made:

   4. (4)

      As to replacement, the Local Court Magistrate never engaged with the conflict between Mr Powell and Mr Ryan on the issue of replacement. No reasons were given in making the finding about spot fixing, namely, whether spot fixing could create a uniform stain across the whole of the floor.

The Defendant’s Submissions

1. [101]

   The defendant advanced the following submissions:

   1. (1)

      The challenge alleges inadequate reasons were provided in reaching findings of fact, in order to seek to establish an available appeal concerning a matter of law. The factual findings challenged are:

   2. (2)

      Baptie LCM clearly identified the key matters relied on to reach those findings of fact as explained below.

   3. (3)

      As to distortion there was no need to refer to the precise location in the evidence by the Court below, because there was an unchallenged finding that Mr Powell had agreed that there was distortion on a piece of timber that had been in the defendant's home, which was obviously part of the "flooring" material that was used in the provision of flooring by the plaintiff. Her Honour recorded that Mr Powell did not agree he had seen "cupping consistent with excessive moisture", which clearly evidences that the Court understood the difference between those different forms of distortion.

   4. (4)

      There was a basis for the Court to conclude that both experts considered that floor timber delivered to the defendant was “distorted” – Mr Ryan by way of cupping and Mr Powell by way of crowning.

   5. (5)

      As to the question of “fit for purpose” and “inadequacy of spot fixing”, the plaintiff contended there are "no reasons" for preferring Mr Ryan's conclusion concerning difficulty of removing the tongue and groove and the resultant conclusion that the floor ought to be replaced should be regarded. However, her Honour made the following unchallenged findings:

   6. (6)

      It is also important to appreciate the way the parties approached the issue of remedying the staining at the hearing in the Court below. The plaintiff caused:

   7. (7)

      The defendant's case was that because of the various stains caused by the plaintiff, the floor needed to be replaced in order to provide the defendant with the “bespoke” and “beautiful” floor she has been promised so as to be fit for her consumer purpose. Mr Powell agreed that replacement would remedy that issue. Mr Powell also agreed that, if the floor was removed and replace, it would result in an "even and consistent finish".

2. [102]

   The defendant referred to the First Ryan Report, which recorded Mr Ryan’s reasons for requiring replacement because of the staining problems:

   1. (1)

      "The flooring materials in the kitchen/dining room are not acceptable in their appearance and finish as I can see a large stain has developed in the centre of this rear room”;

   2. (2)

      "the works are marked causing an aesthetic loss"; and

   3. (3)

      "remove and replace all the flooring… the timber flooring is defective and unacceptable in their appearance and finish".

3. [103]

   Reference was also made to the Second Ryan Report, which recorded:

   1. (1)

      "the timber flooring is still defective, and unacceptable in their appearance and finish";

   2. (2)

      “The timber flooring has not been installed and finished as displayed";

   3. (3)

      "I recommend the floors be replaced in the kitchen/dining area, and the expansion joints be completed to the door and window sill sections";

   4. (4)

      "The flooring product has been stained by the contractor mistakenly using a chemical during its installation process in areas of the kitchen/dining rooms";

   5. (5)

      "To rectify this sort of poor-quality workmanship, works cannot be done in-situ and is not acceptable as the homeowners wanted and expected a floor laid with due care and skill, basically a good job";

   6. (6)

      "factory finished timbers have specific factory colours and finishes that cannot be applied in-situ after the fact of wrongly applying a type of chemical. Factory applied colours are as intended and to what consumers expect. A consumer does not expect an unnatural finish or a finish that does not equal that displayed in the original display shop"; and

   7. (7)

      "staining on timbers caused by chemicals having been mistakenly applied is not considered minor. This is an aesthetic loss and requires replacement".

4. [104]

   However, rather than agreeing that replacement was an appropriate remedy (despite Mr Powell accepting that would be an effective remedy), the plaintiff’s case, in the Court below, was that all the marks on the floor could be removed by “spot staining” or “touch up” only:

   1. (1)

      Mr Hemsworth, representing the plaintiff, informed the Court "Mr Powell's position is that it [the floor] doesn't need to be replaced, so Mr Ryan's evidence would stand by itself. He's the only person who's put on evidence about replacing the entire floor".

   2. (2)

      Mr Powell's evidence was:

5. [105]

   Mr Powell maintained that position even in the document entitled "Joint Conclave" served by the plaintiff just before the trial.

6. [106]

   However, in that document, for the first time, Mr Powell inserted a single line raising the possibility of remedying the light staining problem (methylated spirits issue) by removing individual boards:

7. [107]

   However, removal of individual boards was never put forward by Mr Powell to remediate the "darker marks" he identified in his report, in relation to which he only suggested "touching up".

8. [108]

   In light of the late provision of that version of the document entitled "Joint Conclave" to the defendant, Mr Ryan did not have an opportunity of dealing with that suggestion in a report or written response.

9. [109]

   In any event, as the plaintiff did not bring a case that all the various stain affected floors (light and dark stains) should be remediated by only replacing the relevant boards (rather than the whole floor), it was not a matter that Baptie LCM needed to determine. Instead, the debate was whether remediation could be achieved by spot fixing (as suggested by the plaintiff) or replacement (as suggested by the defendant).

10. [110]

    Her Honour found that “spot fixing” was not an appropriate solution, because the plaintiff’s previous attempts to do that had failed and, in fact, those attempts had "exacerbated the marks". That also clearly led to the conclusion of "unlikelihood of a uniform finish if the areas are simply patched".

11. [111]

    Mr Ryan's comments about the problems with replacing a few tongue and groove boards merely gave further support to her Honour's finding that replacement was the only appropriate remedy where there was a breach of the ACL consumer guarantee. In fact, both experts agreed that replacement would be effective to provide the defendant with that for which she had bargained.

12. [112]

    Baptie LCM preferred the evidence of Mr Ryan to the effect that there were difficulties with replacing some of the tongue and groove floor boards, which was open on the evidence and taking into account her Honour's advantage of seeing the witnesses give evidence. However, since the plaintiff was not proposing replacement of boards for all the staining issues it was open, at first instance, to conclude that a consistent outcome could not be achieved by the various “spot fix” proposals.

13. [113]

    Contrary to the submissions of the plaintiff there is no ambiguity in the reasons at first instance. Her Honour makes it plain:

    1. (1)

       that the issue of "staining and disfigurement to the flooring" was an "aligned, yet separate issue" to that of the distortion; and

    2. (2)

       the "two issues have caused the Court to conclude that the only appropriate remedy is to remove and replace the entire affected floor area".

14. [114]

    On a plain reading, Baptie LCM considered that each issue was sufficient to require replacement. However, even if the judgment is read as meaning the two issues taken together led to the conclusion that replacement was needed, that was also available and supported by evidence and reasons.

15. [115]

    To those contentions attention may also be directed to the defendant’s written submission directed to the same paragraph of the reasons for decision as to the finding that the only appropriate remedy is to remove and replace the entire floor area. That submission was in the following terms:

Conclusion: The Second Ground

1. [116]

   In Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 (“Beale”), Meagher JA stated at 442-4:

2. [117]

   In Beale at 441, it was stated:

3. [118]

   Given the issues raised in this ground of the appeal, reference should also be made to Whitehaven at [32]-[38] in which White JA (with whom Emmett and Simpson AJJA agreed) observed:

4. [119]

   Having regard to my considerations with respect to the “no evidence” ground, there is, in my view, no basis upon which to conclude there was an absence of reasons as to the distortion issue so far as it concerns [47] of Precision No 1. The decision sufficiently exposes that the finding at [47] was a concession by Mr Powell and was predicated upon a single component of the evidence of Mr Powell set out in [43] of Precision No 1.

5. [120]

   My conclusions as to the no evidence ground with respect to [53] of the judgment below sit ill with any conclusion that there was an absence of reasons in that respect. Upon the basis of my earlier conclusions, her Honour reasoned to a conclusion that timber floor being not fit for purpose out of a concession made by Mr Powell. That the concession offered no evidence from which it may be inferred inconsistencies or distortions in the whole of the timber flooring does not constitute a proper basis to establish this ground – namely, an absence of reasons.

6. [121]

   If, however, a different view were taken to my understanding as to the effect of her Honour’s reasoning at [53], then plainly the adequacy of reasons ground has been established in that respect. As I have discussed the subject matter of [53] was the fitness for purpose of the timber flooring. There was a dispute as to that question essentially revolving around whether there was cupping in the floor. That was the subject of differing expert opinions. If the foundation of the conclusion at [53] was not the concession by Mr Powell as to distortions (as the defendant contended, as to crowning), then, in order to resolve the question of fitness for purpose predicated upon whether the floor was distorted, inconsistent or simply not flat it was necessary for the Court below to resolve the dispute between the experts and to offer some reasons for the opinion reached in that respect. Neither course was taken by her Honour which, on that basis, would result in the absence of reasons ground being established.

7. [122]

   The issues concerning staining raise different considerations. This directs attention specifically to the finding at [54] below, but also has a relationship, by way of background, to [48] and [49].

8. [123]

   Broadly speaking, I accept the submission of the plaintiff that aspects of submissions of the defendant in this respect exhibit ex post facto reasoning by placing reliance upon considerations not entertained in the judgment below.

9. [124]

   I do not agree, however, with the submission by the plaintiff that [48] of Precision No 1 provides no explanation as to the preference in favour of Mr Ryan’s evidence as to the opinion as to damage to the timber by staining. Reference is made to the corroboration of Mr Ryan’s evidence by the plaintiff’s employees. Baptie LCM also referred to the comments by Mr Powell that the dark marks appeared to be more pronounced than were apparent in the photographs annexed to his report. Baptie LCM also referred to attempts at rectification of “white marks” which appeared to exacerbate the marks.

10. [125]

    I agree with the plaintiff that her Honour failed to give any reasons for her finding at [49] accepting Mr Ryan’s opinion in relation to the difficulty in removing sections of the tongue and grove floor or the unlikelihood of a uniform finish in areas that were patched but [49] did not feature in the grounds of appeal. Nonetheless, the opinion in [49] did form the basis for the conclusion in [54] of Precision No 1.

11. [126]

    As to [54], I accept the submission of the plaintiff that the judgment below does not adequately deal with the dispute between experts on the issue of replacement. No reasons were given as to the finding about spot fixing in a context where Mr Powell had opined that spot fixing, carried out properly, could rectify the staining problem. Nor is there adequately exposed in the reasoning why Mr Ryan’s evidence was preferred to Mr Powell’s in relation to the difficulty of removing stains of the tongue and grove floors.

12. [127]

    As to the reference to the floor being “unfinished” in Precision No 1 at [54], it is unclear as to how, if at all, that finding relates to the issue of rectification.

13. [128]

    There was a further issue raised by the plaintiff as to [54] of Precision No 1 under this ground, namely, whether the Court below found that either the distortion or staining would be sufficient to sustain the conclusion as to remedy or whether the cumulative effect of those factors was necessary to reach the conclusion in [54].

14. [129]

    On the basis of the findings earlier made as to the effect of [54] of Precision No 1, I would not sustain this aspect of the challenge to the reasoning in that paragraph. In other words, the words “in addition” and “the two issues have caused the Court”, in that paragraph, were found to have reasonably exposed her Honour’s reasoning in that paragraph so as to indicate that her Honour considered that the combination of the factors of staining and distortion resulted in finding that the appropriate remedy was the replacement of the floor.

15. [130]

    If that conclusion were not correct then it may well be that the reasons had not adequately exposed the basis for the conclusion reached as to replacement. There would, in that event, be no explanation as to why Baptie LCM concluded that each of the two matters was a sufficient condition for the requirement of removal and replacement of the entire affected floor area. A further question unresolved by the reasons in that event would be how the requirement of the defendant for the floor to be “bespoke” or “beautiful” should have resulted in the rectification by replacement of the timber floor as opposed to the rectification proposed by Mr Powell.

16. [131]

    However, I do not consider that her Honour gave reasons as to the finding that spot fixing was not an adequate means of rectifying stained areas. This issue was disputed between the experts and, in particular, Mr Powell gave evidence as to the question. No foundation was provided for that aspect of conclusion in [54] – the earlier conclusion reached at [49] was also given without adequate reasons.

17. [132]

    The plaintiff has established ground 1(g) with respect to the findings in [54] of Precision No 1 as to spot fixing (ground 1(g) read in conjunction with ground 1(b1)) and thereby established an error of law. That conclusion was important to the disposition of the amended cross-claim, as it concerned one of the two factors justifying replacement, namely, staining. I note that, if a challenge was made based upon [49] of the judgment below or if the alternative scenarios discussed above as to [53] or [54] operated, then I would have also found the ground established, in those wider respects.

THE THIRD GROUND: BREACH OF PROCEDURAL FAIRNESS

1. [133]

   The plaintiff submitted that the Local Court Magistrate was obliged to ensure procedural fairness and failed to do so; resulting, therefore, in an error of law.

2. [134]

   That submission was predicated upon the sole basis that the Local Court Magistrate reached the adverse conclusion that the experts had a mutual position on the issue of distortion, that was adverse to the plaintiff. It was contended that it was not obviously open on the known material, given that Mr Powell had made no such concession. Her Honour did not give the plaintiff notice that that finding might be made.

3. [135]

   The short answer to that contention is that, as I have found, there was a concession made by Mr Powell, albeit not one that constituted basis for the finding made at [53] or [54] of Precision No 1.

4. [136]

   There was no other procedural unfairness if the conduct of the trial is considered as recorded in the transcript. The plaintiff sought to introduce further late evidence on the issue of cupping, to which objection was taken. In the midst of considering the issue her Honour indicated she was willing to entertain the introduction of:

5. [137]

   Her Honour candidly indicated to the parties that "this is a really big issue in my mind and I suspect it's a really big issue for both parties. These things don't happen in a vacuum".

6. [138]

   The defendant was willing to allow a further inspection and further photos, but the plaintiff's solicitor "withdrew" the issue.

7. [139]

   The plaintiff has failed to establish this ground.

CONCLUSION

1. [140]

   The plaintiff has established the no evidence and inadequate reasons grounds (grounds 1(e) and (g)). I also accept that, for the reasons I have given, the errors of law manifested in the acceptance of those grounds established ground 1(h), namely, the findings in [53] and [54] of Precision No 1 were infected by the erroneous findings challenged in the no evidence and inadequate reasons grounds. Leave to appeal is not required as the appeal was available as of right under s 39 of the Local Court Act, as grounds 1(e) and (g) raised questions of law and ground 1(h) concerned whether those errors of law were essential to the ultimate finding below.

2. [141]

   The plaintiff sought the following relief in the amended summons:

   1. (1)

      Appeal allowed.

   2. (2)

      To the extent necessary, leave to appeal from the whole of the judgment below.

   3. (3)

      Set aside the following orders made below:

   4. (4)

      Remit the matter to the Local Court for determination in accordance with law.

   5. (5)

      Costs

3. [142]

   Upon the conclusion by this Court as to the appeal, it is appropriate that orders (1), (3) and (4) be made.

4. [143]

   The parties sought that the question of costs be reserved. Whilst there would seem, at face value, to be proper basis to award costs to the plaintiff, I accept that other factors may be relevant to that question. I will, therefore, reserve costs.

DIRECTION

1. [144]

   The plaintiff shall bring in short minutes of order reflecting this judgment within 7 days of the publication of this judgment. Those short minutes of order should include draft orders for the resolution of any issue as to costs, to the extent there remains dispute in that respect.