Anand and Anand v Macasa Homes Pty Ltd; Anand and Kaur v Macasa Homes Pty... [2023] NSWCATCD 76 | Case summary

NCAT Consumer and Commercial|2023-06-09

In HB 23/02632, (1) The application is dismissed. (2) If the parties are in agreement as to costs of the proceedings, then they shall provide proposed consent orders to the Tribunal within 14 days of the date of these reasons for decision. (3) If the parties are not in agreement as to the costs of the proceedings, then (a) If any party seeks a costs order, the applicant for costs (the costs applicant) must file and serve a costs application, submissions which shall be limited to three pages, and any evidence in support by way of affidavit, within 14 days of the date of these reasons for decision; (b) The respondent to the costs application is to file and serve any submissions, which shall be limited to three pages, and any evidence in opposition by way of affidavit, within 14 days thereafter; (c) The costs applicant is to file any submissions in reply limited to two pages within 14 days after receipt of the submissions and any evidence of the respondent to the costs application; (d) The submissions are to include submissions whether or not the relevant party consents to the issue of costs being determined on the papers, in accordance with s. 50(2) of the Civil and Administrative Tribunal Act 2013.

In HB 23/02643, (1) The application is dismissed. (2) If the parties are in agreement as to costs of the proceedings, then they shall provide proposed consent orders to the Tribunal within 14 days of the date of these reasons for decision. (3) If the parties are not in agreement as to the costs of the proceedings, then (a) If any party seeks a costs order, the applicant for costs (the costs applicant) must file and serve a costs application, submissions which shall be limited to three pages, and any evidence in support by way of affidavit, within 14 days of the date of these reasons for decision; (b) The respondent to the costs application is to file and serve any submissions, which shall be limited to three pages, and any evidence in opposition by way of affidavit, within 14 days thereafter; (c) The costs applicant is to file any submissions in reply limited to two pages within 14 days after receipt of the submissions and any evidence of the respondent to the costs application; (d) The submissions are to include submissions whether or not the relevant party consents to the issue of costs being determined on the papers, in accordance with s. 50(2) of the Civil and Administrative Tribunal Act 2013.

In HB 22/51515 (1) The application is dismissed. (2) If the parties are in agreement as to costs of the proceedings, then they shall provide proposed consent orders to the Tribunal within 14 days of the date of these reasons for decision. (3) If the parties are not in agreement as to the costs of the proceedings, then (a) If any party seeks a costs order, the applicant for costs (the costs applicant) must file and serve a costs application, submissions which shall be limited to three pages, and any evidence in support by way of affidavit, within 14 days of the date of these reasons for decision; (b) The respondent to the costs application is to file and serve any submissions, which shall be limited to three pages, and any evidence in opposition by way of affidavit, within 14 days thereafter; (c) The costs applicant is to file any submissions in reply limited to two pages within 14 days after receipt of the submissions and any evidence of the respondent to the costs application; (d) The submissions are to include submissions whether or not the relevant party consents to the issue of costs being determined on the papers, in accordance with s. 50(2) of the Civil and Administrative Tribunal Act 2013.

Catchwords: HOME BUILDING - recovery of payment under a preliminary agreement Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Home Building Act 1989 (NSW) Cases Cited: Grygiel v Baine [2005] NSWCA 218 Syed Ahmad Shoaib Ali Pty Ltd v Jandson Pty Ltd [2018] NSWCATAP 228 Texts Cited: Nil Category: Principal judgment Parties: Prabjeet Sing Anand and Sarabjit Anand (Applicants in HB 23/02638)

Charanpreet Anand and Arashpreet Kaur (Applicants in HB 23/02632)

Macasa Homes Pty Ltd (Respondent in HB 23/02638, HB 23/02632, HB 23/02643 and HB 22/51515) Representation: Self-represented (Second Applicant in HB 23/02632)

Ms. A. Kaur (Applicants in HB 23/02638, First Applicant in HB 23/02632, Applicant in HB 23/02643)

Harrington Lawyers (Respondent) File Number(s): HB 23/02638, HB 23/02632, HB 23/02643, HB 22/51515 Publication restriction: Nil

REASONS FOR DECISION

These reasons for decision relate to four proceedings, involving different applicants but with the same respondent in each of the matters, and which raise the same issues for determination. In each of the matters, the relevant applicants entered into both a preliminary agreement and a building contract with the respondent, with respect to different lots of land, some of which are in the same street in the Sydney suburb of Leppington. The relevant applicant or applicants, each made a payment to the respondent. Both the relevant preliminary agreement and the building contract were never fully performed.
The principal issue in all of the proceedings is whether the applicants are entitled to the return of the "deposits" paid to the respondent.
By application filed 20 November 2022 in the New South Wales Civil and Administrative Tribunal, the applicant in HB 22/51515 seeks an order that the respondent refund his "deposit" paid to the respondent in the amount of $26,000.00. By application filed 18 January 2023 in the New South Wales Civil and Administrative Tribunal, the applicants in HB 23/02632 seek an order that the respondent refund their "deposit" paid to the respondent in the amount of $25,600.00. By application filed 18 January 2023 in the New South Wales Civil and Administrative Tribunal, the applicants in HB 23/02638 seek an order that the respondent refund their "deposit" paid to the respondent in the amount of $25,600.00. By application filed 18 January 2023 in the New South Wales Civil and Administrative Tribunal, the applicant in HB 23/02643 seeks an order that the respondent refund his "deposit" paid to the respondent in the amount of $26,200.00.
The respondent in all of the proceedings considered by the Tribunal in this decision is the same company, as mentioned above. The respondent entered into contracts with each of the applicants in the four proceedings the subject of this decision.
There was no cross-claim by the respondent in any of the proceedings.

THE HEARING

At the hearing of the four proceedings on 9 June 2023, Ms. Kaur, who is the second applicant in HB 23/02632, represented herself and she also appeared for the applicants in the other proceedings, with the exception of HB 22/51515, where Mr. Singh appeared for himself but with some assistance from Ms. Kaur.
Ms. H. Tang, solicitor, appeared for the respondent in the four proceedings.

THE EVIDENCE

For their evidence, in HB 23/02638, the applicants relied upon a bundle of separately numbered documents, consisting of a NSW Residential Building Contract for New Dwellings dated 15 January 2020 with a contract price of $256,000.00, an unsigned and undated NSW Residential Building Contract for New Dwellings, a letter headed "Notice to terminate the contract" dated 15 June 2022 from the applicants to the respondent, a letter dated 27 July 2022 from the respondent's solicitors to the applicants and correspondence dated 26 October 2022 from NSW Fair Trading. This bundle became exhibit 1 in the proceedings.
For their evidence, in HB 23/02632, the applicants relied upon a bundle of documents, consisting of a NSW Residential Building Contract for New Dwellings dated 15 January 2020 with a contract price of $256,000.00, an unsigned and undated NSW Residential Building Contract for New Dwellings, a letter headed "Termination of the contract" dated 11 July 2022 from the applicants to the respondent and a letter dated 27 July 2022 from the respondent's solicitors to the applicants. This bundle became exhibit 2 in the proceedings.
For his evidence, in HB 23/02643, the applicant relied upon a bundle of documents, consisting of a NSW Residential Building Contract for New Dwellings dated 15 January 2020 with a contract price of $262,000.00, an unsigned and undated NSW Residential Building Contract for New Dwellings, a letter headed "Notice to terminate the contract" dated 15 June 2022 from the applicant to the respondent, a letter dated 27 July 2022 from the respondent's solicitors to the applicant and correspondence dated 26 October 2022 from NSW Fair Trading. This bundle became exhibit 3 in the proceedings.
For his evidence, in HB 22/51515, the applicant relied upon a bundle of documents, which can be found between pages 3 to 136 in tab A2 in the Court Book prepared by the respondent, consisting of a NSW Residential Building Contract for New Dwellings dated 26 March 2020 with a contract price of $260,000.00, and which was between the applicant in these proceedings as well as Jaswant Singh, and an unsigned and undated NSW Residential Building Contract for New Dwellings. This bundle became exhibit 4 in the proceedings.
The applicant in in HB 22/51515 also relied upon what purports to be a statutory declaration by two people, the applicant and Jaswant Singh, made on 10 April 2023. The making of a joint statutory declaration of this sort is of course a concern to the Tribunal as it raises a risk that the two makers of the statement are not giving their own independent recollection of relevant events. The respondent did not object to the tender of this document. The Tribunal decided in the particular circumstances of this case that the "joint" statutory declaration should be accepted in evidence but the Tribunal is mindful when assessing the material in the statutory declaration of the risk involved in such joint statements. It became exhibit 5.
In HB 23/02632, the applicants also relied upon what purports to be a statutory declaration by two people, the two applicants, made on 10 April 2023. Noting again the warning given in the preceding paragraph, this document was accepted into evidence. It became exhibit 6. In HB 23/02638, the applicants also relied upon what purports to be a statutory declaration by two people, the two applicants, made on 10 April 2023. Noting again the warning given in the preceding paragraph, this document was accepted into evidence. It became exhibit 7. In HB 23/02643, the applicant relied upon his statutory declaration made on 10 April 2023. It became exhibit 8.
There was no cross-examination of any of the statutory declarants who had made statutory declarations on the part of the applicants.
For the respondent's evidence, in HB 23/02638, it relied upon a bundle of documents, at pp. 1054 - 1216 behind tab D3 in the respondent's Court Book. Within the bundle there is a statutory declaration made on 16 March 2023 by Joshua Fanglei Jia, director of the respondent. Exhibited to the statutory declaration are a number of documents, including a preliminary agreement, a construction contract, a title search, reports, invoices, receipts and searches, aerial photographs of the building on the property the subject of the application and correspondence passing between the applicants and the respondent's solicitors. This bundle of documents became exhibit A.
For the respondent's evidence, in HB 23/02632 it relied upon a bundle of documents, at pp. 443 - 610 behind tab B3 in the respondent's Court Book. Within the bundle there is a statutory declaration made on 16 March 2023 by Joshua Fanglei Jia, director of the respondent. Exhibited to the statutory declaration are a number of documents, including a preliminary agreement, a construction contract, a title search, reports, invoices, receipts and searches, aerial photographs of the building on the property the subject of the application and correspondence passing between the applicants and the respondent's solicitors. This bundle of documents became exhibit B.
For the respondent's evidence, in HB 23/02643 it relied upon a bundle of documents, at pp. 750 - 914 behind tab C3 in the respondent's Court Book. Within the bundle there is a statutory declaration made on 16 March 2023 by Joshua Fanglei Jia, director of the respondent. Exhibited to the statutory declaration are a number of documents, including a preliminary agreement, a construction contract, a title search, reports, invoices, receipts and searches, aerial photographs of the building on the property the subject of the application and correspondence passing between the applicant and the respondent's solicitors. This bundle of documents became exhibit C.
For the respondent's evidence, in HB 22/51515 it relied upon a bundle of documents, at pp. 137 - 301 behind tab A3 in the respondent's Court Book. Within the bundle there is a statutory declaration made on 28 February 2023 by Joshua Fanglei Jia, director of the respondent. Exhibited to the statutory declaration are a number of documents, including a preliminary agreement, a construction contract, a title search, reports, invoices, receipts and searches, aerial photographs of the building on the property the subject of the application and correspondence passing between the applicant and Satwant Kaur and the respondent's solicitors. This bundle of documents became exhibit D.
There was cross-examination by both Ms. Kaur and Mr. Singh of Mr. Jia. A number of objections were made by Ms. Tang to questions which were put to Mr. Jia.

FACTUAL BACKGROUND

Based upon the evidence referred to above, the factual background is as follows.
Lots 2008, 2010, 2011 and 2012 were situated at Leppington, New South Wales.
The respondent entered into a preliminary agreement with the applicants in HB 23/02632 regarding lot 2008 on 15 January 2020. The respondent entered into a preliminary agreement with the applicants in HB 22/51515 regarding lot 2010 on 26 March 2020. The respondent entered into a preliminary agreement with the applicant in HB 23/02643 regarding lot 2011 on 15 January 2020. The respondent entered into a preliminary agreement with the applicants in HB 23/02638 regarding lot 2012 on 15 January 2020.
Each of the preliminary agreements are in the same form but differ as to the parties and the price. The preliminary agreement identifies the relevant "Owner", then the respondent and provides the respondent's licence number. The preliminary agreement is next stated to be (and using here as an example the lot the subject of HB 22/51515; pp. 143 - 144 in the Court Book) "In connection with a proposed building on the property at: (site address) Lot 2010, [number] Byron Road Leppington NSW 2179."
There are five clauses in the preliminary agreement.
Clause 2 is in these terms: "Description of the Works: The Owner(s) and the Contractor agree that the Contractor will carry out the following works: a) Arrange a site inspection of the property b) Arrange a survey of the property and/or measurements as required c) Arrange for the preparation of an engineering design for the building works on the property d) Prepare building plans and specifications for the construction of building works on the property e) Submit all relevant applications to all appropriate authorities for their approval f) Arrange warranty insurance."
Immediately under that, there appears these words "No building work will be undertaken under this agreement." The price then appears in the form: "Price excluding GST $23,636.36 Plus GST on the above price $2,363.64 Total price (GST inclusive) $26.000.00"
Clause 3 then provides" "The Owner(s) agrees to pay the Contractor the Total Price on the written request of the Contractor. The Contractor may require that the Owner(s) pay all or part of the Total Price on account of the costs of the works before the expense is incurred."
The document is signed by the Owner on 23 December 2019 and by the respondent on 26 March 2020. This preliminary agreement was made therefore on 26 March 2020.
The preliminary agreement with respect to lot 2008 (p. 506 - 7 in the Court Book) was signed by the relevant owner on 21 December 2019 and by the respondent on 15 January 2020. This preliminary agreement was made therefore on 15 January 2020.
The preliminary agreement with respect to lot 2011 (pp. 757 - 8 in the Court Book) was signed by the relevant owner on 21 December 2019 and by the respondent on 15 January 2020. This preliminary agreement was made therefore on 15 January 2020.
The preliminary agreement with respect to lot 2012 (pp. 757 - 8 in the Court Book) was signed by the relevant owners on 21 December 2019 and by the respondent on 15 January 2020. This preliminary agreement was made therefore on 15 January 2020.
With respect to lot 2008, Mr. Anand and Ms. Kaur entered into a "NSW Residential Building Contract for New Dwellings" ("the Building Contract") with the respondent on 15 January 2020. The Building Contract is written, consisting of clauses 1 to 43 and seven schedules. The Schedules form part of the contract (see the stipulation to that effect on the "Signatures" page in the Building Contract). The contract price was $256,000.00. The deposit payable was "$0.00." The Building Contract provided for payments to be made to the respondent in stages. Schedule 2 identified six stages. "Claim 1", identified therein, provided that "At Signing of contracts. Preparation of plans and council submissions. Preliminary works" and provided for a payment of $25,600.00.
A note included in schedule 1 of the Building Contract provided that "The builder cannot demand or receive any of the contract price (including the deposit) until warranty insurance is in force and the owner is provided with a certificate of insurance." A note included in schedule 6 of the Building Contract provided that "The builder must not carry out any building work or demand or receive any part of the contract price until warranty insurance is in force and the owner is provided with the certificate of insurance." Another note similar to these notes was included on p. 10 of the Building Contract immediately after the page which contains the signatures of the parties to the Building Contract.
A building tender was part of the Building Contract (see schedule 5) and the building tender included a plan of a single-storey building and a list of 'Macasa inclusions'.
Immediately after the page in the Building Contract which includes part of clause 40 and clauses 41, 42 and 43, there is a document headed "Representation by Agent". The document records that the respondent and Mr. Anand and Ms. Kaur agree that Jack Lin of Win Homes "is appointed as agent for the owner. The agent must provide instructions to the builder on behalf of the owner as required by this contract." The signatures for Mr. Anand and Ms. Kaur and the respondent then appear.
While the form of the respondent's evidence tendered before the Tribunal suggests that the "Representation by Agent" document is part of each of the building contracts, Schedule 5 in the building contracts does not identify the "Representation by Agent" document as part of the building contracts nor is there anything in the substantive clauses of the building contracts which makes reference to the "Representation by Agent" document.
Variations were permitted to the Building Contract (see clause 18).
A variation was signed by Mr. Anand and Ms. Kaur on 21 December 2019 and by the respondent on 15 January 2020 for $1.00.
With respect to lot 2010, a building contract was entered into by Mr. Singh and Ms. Kaur and the respondent on 26 March 2020, which has the same terms as the Building Contract, but with a different, single-storey building identified in the building tender, with a contract price of $260,000.00 and with different amounts in the payment schedule.
With respect to lot 2011, a building contract was entered into by Mr. T. Anand and the respondent on 15 January 2020, which has the same terms as the Building Contract, a different, single-storey building identified in the building tender and with a contract price of $262,000.00. A variation was signed by Mr. Anand on 21 December 2019 and by the respondent on 15 January 2020 for $1.00.
With respect to lot 2012, a building contract was entered into by the Anands and the respondent on 15 January 2020, which has the same terms as the Building Contract, but with a contract price of $256,000.00. A variation was signed by Mr. Anand and Ms. Kaur on 21 December 2019 and by the respondent on 15 January 2020 for $1.00.
In the statutory declarations made by the applicants, the relevant applicant or applicants state that they paid "deposits" of $25,600.00, $25,600.00, $26,000.00 and $26,200.00, as they case may be in relation to the different applicants and their agreement(s) with the respondent.
The applicants do not state when they paid the "deposits". Nor is there any evidence of any transfer of those amounts which might include a note or reference in the transfer identifying for what the relevant payment was. The respondent's evidence, similarly, does not identify when it received any of the amounts paid by the applicants to it.
The applicants also mention in their statutory declarations that they bought "land" and paid 10% deposits for the land. The contracts to buy the land are not in evidence. The Tribunal knows nothing about the dates of those contracts or when the deposits payable thereunder were paid. The Tribunal knows nothing about when it was that each of the lots the subject of these proceedings was first registered for the purposes of the Real Property Act (1900).
The evidence does not disclose what happened for the next year or so after the preliminary agreements and building contracts referred to above were made.
Then in March 2021, Mr. Jia, the respondent's director says he paid "sale commission" to the applicants' agents, in respect of lots 2008, 2011 and 2012 and paid "sale commission" to the applicants' agents in respect of lot 2010, in September 2021. There are no contracts or agreements in evidence explaining why the "sales commission" was paid and why it was paid at these times.
Mr. Jia gives evidence, in each of the proceedings now before the Tribunal, about conversations, in early 2022, with a sales representative of the agent "from whom the owners' [sic] purchased the land" - and whose name Mr. Jia could not recall - in which conversation the sales representative said he had spoken to the purchasers of the lots which are the subject of these proceedings and Mr. Jia says that the agent told him that he (the representative of the agent) had told the purchasers that the contract they signed was pre-covid and "They agreed to sign a new contract with you if you send them a draft." Mr. Jia says he responded: "Okay, thanks. I'll take it from here. We will send them a new contract and then discuss with them by mutual agreement what they want to do."
In relation to lot 2012, a proposed variation to the relevant building contract was issued by the respondent to the Anands for "$25,454.55" as a "contract price adjustment for building cost increase." The proposed variation is dated 21 March 2022. The proposed variation is not signed.
On 29 March 2022, the respondent sent new building contracts, relating to each of lots 2008, 2010, 2011 and 2012, to the applicant or applicants relevant to those specific lots. Under the new building contracts, the contract price was proposed to increase to $284,000.00 (lot 2008), $288,000.00 (lot 2010), $290,000.00 (lot 2011) and $284,000.00 (lot 2012).
On 13 June 2022, Mr. Jia performed a title search for lot 2011 which shows that Mr. Anand was registered as the proprietor of that lot. On 13 June 2022, Mr. Jia performed a title search for lot 2012 which shows that Mr. and Mrs. Anand was registered as the proprietors of that lot. On 13 June 2022, Mr. Jia performed a title search for lot 2008 which shows that Ms. Kaur and Mr. Singh were registered as the proprietors of that lot.
On 4 July 2022, Mr. Jia performed a title search for lot 2010 (see p. 291 Court Book) which shows that Mr. Singh and Ms. Kaur were registered as the proprietors of that lot.
By letter dated 15 June 2022, Mr. Anand and Ms. Kaur sent a letter to the respondent. The subject of the letter was "Notice to Terminate the Contract." The text of the letter refers to the building contract made on 26 March 2020. The letter says that work did not commence "till date and subsequently a revised contract with amended price was forwarded to us despite the earlier contract validly executed between the parties more than 2 years and 2 months ago." The letter continued "We seek that the commencement of implementation of the contract must begin within 10 working days of the date of this notice. Failing this, we shall terminate the contract due to substantial breach of the contract immediately after 10 working days of the date of this notice."
Mr. Jia in his statutory declaration says that he received the letter "On or about 29 June 2022." There was no cross-examination on the part of the applicants to challenge that statement.
By letter dated 11 July 2022, Mr. Anand and Ms. Kaur sent another letter to the respondent. The subject of the letter was "Termination of the Contract." The text of the letter was: "I have already sent you the notice of termination of the contract in case the original contract is not executed within ten business days of that registered letter mailed to you. Unfortunately you failed to honour and implement the contract within that specified period. Therefore, we are left with no option but to terminate the contract and ask for the full refund of the 10% deposit immediately."
On 17 July 2022, the solicitors for the respondent, wrote to Mr. Anand and Ms. Kaur. There are three sub-headings in the letter. The first sub-heading is "Contract Price Adjustment." Text under that sub-heading includes: "… the circumstances around which the parties entered into the Contract have changed substantially and this has resulted in a price adjustment which is permitted under clause 16 of the Contract. We have been instructed by our client that you were notified and had verbally agreed to the contract price adjustment with the sale agent to whom you signed the land and building package. Our client issued the Variation and New Contract on the assumption that you had agreed to the price adjustment."
(The Variation and New Contract, were both defined earlier in the letter).
The letter continues, in response to the part of the notice of termination complaining about lack of commencement "till date" and the forwarding of the revised contract, "In that regard, you have conveniently left out the part where you entered a verbal agreement with your sales agent, acting on behalf of our client."
The next sub-heading in the letter is commencement and in response to the part of the notice of termination calling for commencement of implementation of the contract, the solicitors for the respondent say "Our client has already commenced the contract. Pursuant to Schedule 2 of the Contract, the following staged works are:".
The solicitors' letter then sets out a table from the building contract setting out the six stages and percentage payments and dollar amounts applicable to the stages.
After setting out the table from the building contract, the letter states "In that regard, we have been instructed that our client has commenced the Preliminary works, including but not limited to the following: Title Search; Section 10.7 certificate; Soil report; Site survey; and Preliminary draft plan."
The next sub-heading in the letter is termination. The letter states that the respondent is not in breach of the contract, that in issuing the letter dated 11 July 2022, the relevant applicants "evidenced an intention to no longer be bound by the Contract, which amounts to a repudiation of the Contract." The letter goes on "We accept your repudiation and hereby terminate the Contract. You are not entitled to a refund of the deposit notwithstanding that the Contract has specified that the deposit is $0.00 (Item 2(b) of Schedule 1 of the Contract). As you have invalidly terminated the Contract, our client reserves its right to claim damages."
The same pattern of correspondence which has just been set out relating to Mr. Anand and Ms. Kaur and the respondent's solicitors was repeated in June and July 2022 with respect to the other lots, that is, from the relevant applicant or applicants there is a "notice to terminate the contract" letter, followed by a "termination of contract" letter and then a letter from the respondent's solicitor setting out the respondent's position why it wasn't in breach of the building contracts and then has accepted the applicants' claimed repudiation of the building contracts.
In relation to lot 2010, Mr. Jia for the respondent applied for a s. 10.7 certificate with the relevant local government authority on 15 June 2022 at a cost of $62.44, for a soil report on 30 June 2022 for $665.50 and a site survey on 30 June 2022 for $319.00.00. The respondent paid for the same set of items, at the same cost and for the other lots the subject of these proceedings, at the same times. Mr. Jia said in his statutory declarations that the respondent "paid in full" for these amounts and there was no evidence to challenge that. On 11 July 2022, the respondent arranged a BASIX report for lot 2008.
In the cross-examination of Mr. Jia, he was challenged about doing those items of work "after 27 July 2022". Mr . Jia responded that the work was not done at that point, but that the invoices were received "after the work has been done." He later added during the cross-examination "actual work is done before June, way before June 2022."
Mr. Jia's statutory declaration also points to work which he says the respondent itself did in terms of completing preliminary draft plans and arrangements and preparations for development applications and relevant reports, for each of the applicants. He costs that internal work of the respondent in his statutory declarations. He says this work was also "paid in full." There was no challenge by the applicants quantum or the costing of the works which Mr. Jia had said were "paid in full" by the respondent.
Beginning in October 2022, but also continuing into February 2023, after the four proceedings now before the Tribunal had been filed, Mr. Jia did a number of searches and discovered that the owners of lot 2010, and later the owners of lots 2008, 2011 and 2012, had lodged applications for complying development certificates, engaged a different licensed builder and were building homes on their lots that were not the homes featured in the building contracts between each of the applicants and the respondents.
On 28 February 2023, with respect to lot 2010, the solicitors for the respondent wrote to Mr. Singh and Ms. Kaur regarding the preliminary agreement. In the letter, the solicitors referred to the preliminary agreement signed on 23 December 2019. The solicitors said that it had been brought to their client's attention that in October 2022, Mr. Singh and Ms. Kaur had applied for a certain complying development certificate, had engaged another building company which had obtained home warranty insurance and then in November 2022, commenced construction of a double-storey dwelling at their property. The solicitors letter continued by stating that Mr. Singh and Ms. Kaur appear "to have abandoned the basis upon which you entered into the Preliminary Agreement." The letter states that: "Accordingly, you repudiated the Preliminary Agreement when you: 1. Prevented our client from completing its obligations under the Preliminary Agreement when you submitted the Complying Development Application on 11 October 2022; and 2. Engaged another builder to issue you the Home Warranty Insurance when our client was obligated under the Preliminary Agreement to arrange the Insurance on your behalf. We put you on notice that our client hereby accepts your repudiation of the Preliminary Agreement and terminates the Preliminary Agreement, effective immediately. Accordingly, you are not entitled to claim a refund of the $26,000.00 in circumstances where it was a payment for the works performed under the Preliminary Agreement."
Letters in similar terms were written by the respondent's solicitors to Mr. Anand and Ms. Kaur on 16 March 2023 (with respect to lot 2008), to Mr. and Mrs. Anand on 16 March 2023 (with respect to lot 2012) and to Mr. Anand on 16 March 2023 (with respect to lot 2011).
The respondent accepts that it did not obtain insurance, for the purposes of the Act, for any work done by it for the applicants.

JURISDICTION

The respondent was asked at the hearing whether it would raise any issue about the Tribunal's jurisdiction to determine these applications and the respondent's solicitor indicated that the respondent agreed that the Tribunal had jurisdiction and that the respondent did not raise any jurisdictional issue.
The Tribunal nonetheless does need to be satisfied that it has jurisdiction to determine the applicants' claims.
The respondent made no submission that s. 48K(8) of the Act was relevant to the three proceedings now being considered that were filed on 23 January 2023, so it appears that the respondent accepts that all four proceedings involve a building claim relating to building goods or services that have been supplied less than three years before the four claims were lodged: s. 48K(3) of the Act.
The oral submissions at the hearing on behalf of the applicants suggests to me that the claims are framed by the applicants as claims for a refund of deposits under a building contract for the construction of a dwelling. The Tribunal has jurisdiction to determine such a claim, as such a claim involves a "building claim", involving the payment of a specified sum of money that arises from a supply of goods and services, supplied for or in connection with the carrying out of residential building work, under a contract. But if the applicants claims in the four proceedings are properly characterised as claims to recover payments made under the four preliminary agreements (as in my view they are), then the authorities indicate that the Tribunal also has authority to decide that claim.
It seems to me that the four preliminary agreements are separate and independent contracts from the building contracts as the consideration is different between, on the one hand, the preliminary agreements, and on the other hand, the building contracts, the subject matter of the two sets of contracts is different, and further, none of the building contracts identify the relevant preliminary agreement as part of the building contract. The four preliminary agreements are expressly framed to be "in connection with a proposed building" on the relevant lot and clause 2 of each of the preliminary agreements seems to me to involve work of a preparatory nature, preceding construction, but work that is a necessary or integral part of the construction, or associated with, connected with or concerned with the construction work.
The Tribunal has jurisdiction to determine a claim arising from the preliminary agreements either because: 1. the phrase "residential building work", as defined in the Act Schedule 1 paragraph 2 (and noting the phrase "involved in" in that definition), does not depend on there being actual residential building construction, but also extends to work of a preparatory nature, the purpose of which was to give rise to residential building work: see the New South Wales Court of Appeal decision in Grygiel v Baine [2005] NSWCA 218; or 2. the words "for in connection with the carrying out of" (see s. 48A of the Act and the definition of "building goods or services") means that the goods and services supplied by the respondent under the preliminary agreements can be viewed as work of a preparatory nature, preceding construction, but work that is a necessary or integral part of the constructions, or associated with, connected with or concerned with the construction work: Syed Ahmad Shoaib Ali Pty Ltd v Jandson Pty Ltd [2018] NSWCATAP 228.
The applicants' claims in the four proceedings are brought within time (as mentioned above, the respondent appears to concede that) and are within the thresholds for claims under the Act that can be determined by the Tribunal.

a) Overview of the parties' submissions

The applicants' principal complaint at the hearing was about why the respondent was doing work for them at a time, and why the respondent was being invoiced by third-parties for work at a time, after the applicants had written to the respondent on 15 June 2022 indicating they had terminated their building contracts with the respondent. The applicants say in those circumstances, they should be refunded their "deposits" paid to the respondent. The applicants in their oral submissions questioned Mr. Jia's claims about completing plans and reports and preparing development applications for them at the time he said he did. The applicants rhetorically asked, where are these plans, reports and applications, if they were prepared by the respondent? The applicants in their oral submissions also questioned Mr. Jia's claims about doing work in circumstances where new building contracts were being asked for by, Ms. Kaur, submitted, the respondent.
The respondent submits that the applicants' complaint is factually wrong, as the 'termination of contract' letter was the 11 July 2022 letter, rather than the 15 June 2022 letter that gave notice of proposed termination. The respondent submits that with one exception, the respondent's work was done before the applicant's purported termination of the building contracts. The respondent submits that the 15 June 2022 letter actually called for the respondent to perform work, and the respondent had been complying with that request by performing work for the respondent.
The respondent further submits - albeit it seems in clear contradiction to the position it took in the 17 July 2022 letter from its solicitors to the applicants - that the work that it did is properly characterised as falling under the preliminary agreements (rather than the building contracts). The respondent submits that on the evidence, the respondent has performed all its obligations under the preliminary agreements, except for the item "arrange warranty insurance" (see clause 2.(f) in the preliminary agreements) which obligation did not arise as the parties' contracts were determined, such that the parties were discharged from further performance of their contractual obligations including the respondent's obligation to arrange warranty insurance. The respondent submits that the applicants have breached their contracts with the respondent. The applicants wanted to build different homes with a different builder on their lots, and so repudiated their agreements with the respondent.
The respondent also made submissions, in the alternative, if the work it did is properly characterised as falling under the building contracts (rather than the preliminary agreements). The respondent submits that it could not be in breach of any of the four building contracts in June or July 2022 because none of the applicants had complied with clause 4.1 in the contracts, as it is only then that there is a triggering of any obligation on the part of the respondent to start the building works contemplated in the building contracts. The respondent submits that it was appropriate to wait until each of the lots were registered in the name of the relevant applicant or applicants, before doing any work under the building contracts.

b) The onus of proof

The applicants bear the onus of establishing a cause of action or claim, through which they are entitled to the recovery of the "deposits" they paid to the respondent. Moreover, the applicants also must establish the facts necessary to prove the elements of their claim, and do so according to the civil proceedings' standard of proof on the balance of probabilities.
At the hearing, the applicants did not articulate clearly the cause of action or causes of action that would support their claim for orders against the respondent to return the "deposits" to the applicants.
The facts as set out above in these reasons, point to potential claims that the applicants may possibly have been able to make against the respondent to ground the recovery of the "deposits" paid to the respondent. Potential claims include a claim in restitution (for example, payments made to the respondent that should be vitiated by mistake, or which were made illegally because of a breach of certain provisions in the Act, or which should be recovered on the ground of total failure of consideration) or in contract, either for breach of contract(s) or arising from the proper construction of the preliminary agreement, including whether it was an "entire" contract whereby the "price" was only payable under the preliminary agreement if all of the respondent's obligations under it were fulfilled. The applicants potentially could have, but did not articulate a case pointing to potential breaches of the Act, for example, relating to claims arising from ss. 8 and 92 of the Act, and then making submissions about what the contractual consequences, if any, such breaches might have involved. There would also perhaps have been an argument available to the applicants, had they received thorough legal advice prior to their decision to send the 15 June 2022 letter to the respondent, that the parties had already abandoned both their building contracts and the preliminary agreements, when they, through their agent, requested a new building contract and Mr. Jia agreed to that and sent the new building contracts through to the applicants. If the parties had abandoned their contracts in early 2022, then they would have been discharged from further performance under the building contracts and the preliminary agreements from early 2022, on that potential argument.
However, at the hearing the applicants did not articulate properly one or more of the causes of action that may have been potentially available to them.
Had the applicants more clearly articulated one of those potential causes of action, then the respondent may well have been able to tender other evidence in response, or could have raised other defences (e.g. a change of position defence against a restitution claim) and could have also, for example, raised a cross-application, for instance claiming quantum meruit against the applicants, if the applicants had pointed to breaches of the Act which prima facie disentitled the respondent from receiving the payments made to it from the applicants.
There are also significant gaps in the facts. For instance, it is not clear to the Tribunal when the applicants made the payments to the respondent which are the subject of these four proceedings, and it is not clear precisely why those payments were made when they were made. It is not clear to the Tribunal whether any written request was made or any payment was 'required', pursuant to clause 3 in the preliminary agreements. The Tribunal knows little or nothing about any sale of land contracts entered into at or about the time the preliminary agreements and the building contracts were made. The Tribunal knows little or nothing about the form or nature of any agency agreements entered into with Win Homes. Had the applicants disclosed more in their evidence about the factual background to their claims, it may be too that the respondent would have had additional evidence to tender before the Tribunal at the hearing.
Mr. Jia's evidence about amounts the respondent "paid in full" for, he says, "the preliminary works under the Preliminary Agreement" was questioned but was not contested by any alternative facts or circumstances presented by the applicants.
The applicants raised questions about the items of work which Mr. Jia said were performed by the respondent, in that the applicants during their oral submissions submitted, as I understood the submissions, that there was no corroboration of Mr. Jia's oral evidence about the work he said the respondent performed in the form of plans, reports and materials put together for the development applications relating to the applicants' lots. However, the payments made, and costs which the respondent said it incurred, were not contested by any evidence put forward by the applicants. The applicants had not called for or issued summonses for the said plans, reports and other materials and the Tribunal is left with Mr. Jia's oral evidence about amounts "paid in full", that in my view, remained intact during the cross-examination of him.
The applicants' case at the hearing was that the respondent breached the building contract by their delay in performing any works under it and submitting to them new building contracts, such that the applicants had properly brought the building contracts to an end by its 15 June 2022 and 11 July 2022 letters. That specific case has been answered by the respondent on the evidence before the Tribunal at the hearing.
The Tribunal finds that the applicants have failed to show how they had complied with clause 4.1 in the building contracts, so they have not established a breach by the respondent of clause 12 in the building contracts. Further, the evidence, unsatisfactory as it was, showed that it was the applicants who requested the issue of new building contracts through their agent, and not the respondent.
The Tribunal also finds that the 15 June 2022 letters from the applicants to the respondent, were not "termination letters" and they did not bring the building contract, nor for that matter, the preliminary agreements, to an end on that date or when the time for compliance expressed in them was reached. On 5 July 2022, the date of the applicants' next letters, the applicants needed to be ready, willing and able to comply the building contracts and there is no evidence before the Tribunal that they were. I do not think that I can simply assume that the applicants were ready, willing and able to comply the building contracts at that date, in the absence of evidence.
The Tribunal finds, based on Mr. Jia's evidence, that the respondent did the work the subject of the preliminary agreement (with the exception of arranging home warranty insurance) and was prevented from arranging home warranty insurance for the homes that were to be built under the building contracts, as the applicants have secured another builder to build different homes and have obtained home warranty insurance in relation to the different homes.
The respondent's receipt of payments under the preliminary agreement does raise some questions, with potential consequences for the respondent, but the applicants did not articulate those potential consequences and the respondent has not had an opportunity to address them. A properly articulated case might have caused the respondent to respond to differently in the proceedings or in relation to the proceedings, for example by bringing a cross-claim that could have been determined at the same time as the applicants' claims against it.
The Tribunal cannot of course decide matters before it in favour of parties for reasons which were not the subject of claims ventilated at the final hearing.
The applicants have not established that the respondent breached either the building contracts or the preliminary agreements, made with the relevant applicant or applicants. The Tribunal finds that applicants have not established a cause of action or claim, through which they are entitled to the recovery of the "deposits" they paid to the respondent. The Tribunal also finds that the applicants have not established the facts necessary to prove the elements of their claim on the balance of probabilities. The four applications being considered in these reasons for decision, accordingly should be dismissed.

COSTS

The Tribunal will also make orders allowing any party which seeks to apply for a costs order to make such an application.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 September 2023

Anand and Anand v Macasa Homes Pty Ltd; Anand and Kaur v Macasa Homes Pty Ltd; Anand v Macasa Homes Pty Ltd; Singh v Macasa Homes Pty Ltd

At a glance

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Decision date

Source

Judgment (17 paragraphs)

Legislation Cited (2)

Cases Cited (2)