Able Inspections Limited v Hyland [2016] NZDC 4529 (18 March 2016)

Last Updated: 15 August 2016

_{EDITORIAL NOTE: NO SUPPRESSION APPLIED.}

IN THE DISTRICT COURT AT AUCKLAND

CIV 2015-004-001397 [2016] NZDC 4529

BETWEEN	ABLE INSPECTIONS LIMITED Appellant
AND	ELIZABETH HYLAND Respondent

Hearing:	17 March 2016
Appearances:	Mr Underwood on behalf of Appellant Ms Hyland in Person
Judgment:	18 March 2016

_{DECISION OF JUDGE G M HARRISON}

The appeal

[1] Able Inspections Limited appeals the decision of the Disputes Tribunal of

17 September 2015.

[2] Ms Hyland had lodged a claim in the Tribunal alleging that Able Inspections Limited through Mr Chris Underwood, its director, failed to inspect properly a house in Cleveland Road, Parnell, Auckland. In particular her complaint centred on the alleged failure of Able Inspections to identify unacceptable levels of moisture and decay under a shower in one of the bathrooms above the kitchen in the house.

[3] The Referee determined that the vendors of the property who were parties to the hearing in the Tribunal did not make any misrepresentation to Ms Hyland before purchase and the claim against them was dismissed.

[4] As for Able Inspections, the Referee concluded that the inspection undertaken fell short of the company’s obligations pursuant to the Consumer Guarantees Act

1993 in that the inspection carried out was not fit for the required purpose, and nor

was it performed with reasonable care and skill, and consequently is deemed to be a failure of a substantial character.

[5] The Referee awarded Ms Hyland $5,137, being $437 for the cost of the initial Able Inspections report, and $4,700 being the costs of replacing the damaged timber, relining the walls and downstairs ceiling with Gibraltar board, plastering the walls and ceiling and painting the downstairs ceiling and bathroom, and other related work. The Referee did not allow for the cost of replacing the shower and fittings because the leak was not caused by Able Inspections, and so the damages awarded reflected the cost of repairing what should have been ascertained by the inspection, but not the extra work undertaken. Ms Hyland cross-appeals against that decision.

[6] The notice of appeal contained the following grounds:

(i) The Referee was out of her depth in the hearings.

(ii) Professionals engaged by Ms Hyland to prepare a report were not suitably qualified.

(iii) The moisture reading taken was accurate and that, to achieve it, the vendors of the property must not have used the shower for some time.

(iv) The repairs should have been carried out with a building consent.

(v) Mr Underwood is a competent pre-purchase building inspector and that his evidence should have been accepted.

The legislation

[7] The right of appeal to the District Court is contained in s 50 of the Disputes

Tribunals Act 1988. As relevant, it provides:

(1) Any party to a proceeding before a Tribunal may appeal to the District Court against an order made by the Tribunal under ...on the grounds that -

(a) The proceedings were conducted by the Referee; or

(b) ... in a manner that was unfair to the appellant and prejudicially affected the result of the proceeding.

(2) Without limiting the generality of subs (1) of the section, a Referee shall be deemed to have conducted the proceeding in a manner that was unfair to the appellant and prejudicially affected the result if:

(a) The Referee fails to have regard to any provision of any enactment that is brought to the attention of the Referee at the hearing; and

(b) As a result of that failure the result of the proceedings is unfair to the appellant.

[8] There is no suggestion in this case that any provision of an enactment was brought to the attention of the Referee to which no regard was paid.

[9] It is necessary also to refer to s 18(6) of the Act. That provides:

The Tribunal shall determine the dispute according to the substantial merits and justice of the case, and in doing so shall have regard to the law but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities.

[10] Put shortly, there can be no appeal on the merits of the case before the Referee. It was put this way by Fogarty J in Shepherd v Disputes Tribunal [2004] NZAR 319, 327:

[37] It is even more appropriate that this aspect of the law of res judicata should be applied to proceedings under the Disputes Tribunals Act

1988. The goal of that statute is to provide for low cost speedy and

final resolution of small disputes. To achieve that end Parliament was not interested in providing appeals on the merits of decisions.

[38] That may result in what might be described as rough justice from time to time. That has to be balanced against the overall goal of the Act to enable persons who could not possibly afford the very expensive litigation costs in the District and High Courts the opportunity of taking claims before Referees and getting justice.

[11] The leading decision on the issue is that of Thorp J in NZI Insurance v

Auckland District Council [1993] 3 NZLR 453. In that case he concluded that:

Determinations made within jurisdiction will remain free from review, by the District Court or otherwise, unless tainted by procedural unfairness and coming within the ambit of s 50.

[12] This statement was amplified in the later decision of Inland Holdings Limited v District Court at Whangarei (1999) 13 PRNZ 661. It was held in that case that an appeal court does not have jurisdiction to deal with erroneous findings of fact. That is to say, even if the Tribunal assesses the factual material incorrectly, no appeal will lie.

[13] In this case the Referee was confronted with conflicting evidence from Mr Underwood and his witness, Mr Chalk on the one hand, and Mr Winter called by Ms Hyland, on the other. To resolve this conflict the Referee appointed a Mr Templeman as an independent expert to prepare a report which, in due course, was critical of the inspection undertaken by Able Inspections. The Referee relied upon that report and held further that Mr Underwood in his evidence did not explain any methodology nor did he present any evidence of the number of moisture readings taken or their specific location. She said he relied principally on his reputation and experience as a defence to the claim. She accordingly found against Able Inspections on that evidence as having failed to carry out a proper inspection.

[14] That is a finding of fact and, on the basis of the authorities I have referred to, goes to the merits of the case and cannot be challenged on appeal. The same consideration applies to the other grounds of appeal, with the exception of that claiming that the repairs to the affected parts of the house should have had a building consent issued by the local council.

[15] Ms Hyland claimed that the work undertaken was a repair and did not require a building consent. I do not see how the requirement, or not, for a building consent has anything to do with the obligation of Able Inspections to carry out a competent inspection. That ground of appeal must also fail.

[16] No procedural unfairness was raised by Mr Underwood as a ground of appeal, his position being generally that he did not agree with the factual findings of the Referee and, for the reasons given, there can be no appeal on the merits of the case even if the Tribunal assesses the factual material incorrectly, which I do not say occurred in this case.

[17] By her cross-appeal Ms Hyland claims amounts not awarded by the Referee. The notice of cross-appeal was filed only two days before the hearing and may well have been brought out of time, although I make no finding in that regard.

[18] The Referee was careful in her assessment of the damages payable by Able Inspections to limit them to remedying the defects in the bathroom which the inspection failed to identify. Once again, the assessment of damages is a factual exercise and no error has been demonstrated on behalf of the Referee in reaching the conclusion she did.

[19] As to the claim for costs, s 43(1) of the Act provides:

Except as provided in this section, costs shall not be awarded against a party to any proceedings before a tribunal.

[20] There are limited exceptions to that general restriction which do not apply in this case.

[21] For those reasons the cross-appeal is also dismissed.

G M Harrison

District Court Judge