appellant. Appeal allowed; orders set aside; respondents ordered to pay appellant $20,561.81 within 14 days; no order as to costs
Key principles
Where a decision of the Civil and Administrative Tribunal contains an obvious mathematical error in the calculation of monetary amounts, and the appellant first seeks correction...
The proper approach to calculating amounts payable under a home building contract where a variation has been paid but included in the contract sum calculation requires deducting...
A fencing variation of $17,960 that was found to have been paid by the homeowners to the builder should not have been included in the $534,337.50 figure representing payments...
The correct calculation of amounts payable, based on the Tribunal's own findings, is: (a) $41,463.38 for unpaid variations; plus (b) $19,422.46 for underpayment of contract sum;...
Issues before the court
Whether time to commence the appeal should be extended where the appellant delayed filing to first seek correction of a mathematical error under s...
Whether leave to appeal should be granted on the ground that the decision was not 'fair and equitable' under s 80(2)(b) of the Civil and...
Plain English Summary
A builder successfully appealed a decision of the NSW Civil and Administrative Tribunal because the Tribunal had made a mathematical error in calculating how much the homeowners owed. The Tribunal had included a $17,960 fencing variation (which the homeowners had already paid) in its calculation of payments towards the main contract price. This meant the Tribunal thought the homeowners had paid more of the contract price than they actually had. The Appeal Panel found that once this error was corrected, the homeowners owed the builder $20,561.81, not the other way around. The Panel also extended time for the appeal because the builder had reasonably tried to get the error fixed by the original Tribunal member first, rather than immediately appealing.
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Judgment (10 paragraphs)
[1]
Introduction
The Appellant is a builder who was party to a home building contract with the Respondents, who are homeowners. In about May 2017 the Appellant suspended work on the project site because the Respondents had failed to make payments. The building work never resumed.
Whether the Tribunal erred in calculating the underpayment of the contract sum by including the paid fencing variation in the total payments figure
Cited legislation
2 cited instruments linked from this judgment.
On 26 February 2018 the Respondents commenced home building proceedings against the Appellant claiming damages for breach of contract and breaches of statutory warranties. On 18 May 2018 the Appellant filed a cross application against the Respondents for variations and unpaid amounts.
In both applications was a factual dispute about how much the homeowners had paid during the contract.
Both applications were heard together and the decision published 23 November 2020 determined both disputes (Decision). In the Respondents' application the Tribunal ordered the Appellant to pay the Respondents $40,324.03 and the Appellant to pay the Respondents' legal costs. In the Appellant's application the Tribunal ordered the Respondents to pay it $33,420.44 and its legal costs.
On the Notice of Appeal filed 25 January 2021 the Appellant wrote that it appeals the decision made in both the Appellant's and the Respondents' applications: page 1 Notice of Appeal. The orders challenged on appeal are said to be the order in the Appellant's application that the Respondents (Homeowners) pay the Appellant $33,420.44: page 2.
The orders the Appellant requests that the Appeal Panel make are set out on page 3 of the Notice of Appeal as follows:
[In the Respondent's application]:
1. The Builder [Appellant] is to pay the Homeowners [Respondents] the sum of $40,324.03 (adjusted against amount payable by homeowners); and
2. The Builder is to pay the Homeowner [sic] costs of the application as agreed or assessed.
[In the Appellant's application]:
1. The Homeowners are to pay the Builder the sum of $60,885.94 less the sum of $40,324.03 payable by the builder to the homeowners within 14 days; and
2. The Homeowners are to pay the Builders [sic] costs as agreed or assessed.
The appeal was commenced 9 weeks after the Decision was served on the Appellant. The rules specify appeals must be lodged within 4 weeks of the decision. The Appellant therefore requires an extension of time to bring this appeal and acknowledged that on page 6 of the Notice of Appeal.
On 11 February 2021 the Appeal Panel, by consent, dispensed with a hearing of the appeal and ordered the appeal be dealt with on the papers. A timetable for evidence was made, with the last date for submission being 11 March 2021. The appeal was allocated to the Appeal Panel for determination on 30 March 2021. The orders made in the Decision have not been stayed.
For the reasons which follow we have decided to allow the appeal.
[2]
The issue on appeal
The Appellant does not challenge any findings of fact made by the Tribunal in the Decision. The sole issue on the appeal is the "mathematical calculation of the sums that ought to have been awarded to the builder in light of the findings": page 4 Notice of Appeal. This is the same as what was written to the Tribunal on 3 December 2020 by the Appellant's solicitor: annexure A to the Notice of Appeal.
[3]
Extension of time
The Appellant's made the following submissions with regards to the required extension of time (paragraph 2 of their submissions dated 25 February 2021);
(a) The principal Judgment was received by the Appellant on 23 November 2020. Upon the proper reading of the reasons given the judgment and the amounts awarded to the parties, it was discovered that that [sic] the Judgment contained an obvious mathematical error. The error amounted to an accidental slip and was inconsistent with the stated decision and stated reason.
(b) On 3 December 2020 a letter was send to Senior Member S.A. McDonald seeking that the inadvertent error be rectified pursuant to section 63 of the Civil and Administrative Tribunal Act 2013. A copy of the letter was also served on the respondent.
(c) The Appellant did not receive any objection from the Respondent regarding the request made to the Senior Member for corrections.
(d) Given that the error in the Principal Judgment appeared to be mathematical in nature and based on the reasons obvious, the appellant was of the view that the appropriate course would be to request a correction from the member who presided over the proceedings pursuant to pursuant to section 63 of the Civil and Administrative Tribunal Act 2013 rather than by filing a notice of appeal.
(e) Following the request for corrections made by the appellant on 3 December 2020, a response was not received from the member until 18 January 2021 whereby the appellant was advised that the Tribunal cannot make any amendments to its reasons for the decision based on the letter.
The Appeal Panel accepts that the changes to the monetary amounts in the orders made in the Decision could have been made pursuant to section 63 of the Civil and Administrative Tribunal Act 2013 and accepts that it was appropriate for the appellant to first request the changes be made to the Member below, rather than commencing an appeal.
The Appeal Panel accepts that the Appellant waited until a response to its request for amendment, and that response was not received for over 7 weeks. The Appellant promptly filed the appeal after receiving the response on 18 January 2021, namely filed the Notice of Appeal on 25 January 2021.
The Respondents' submissions in regards to the extension of time are as follows (paragraphs 1 - 3 in Respondent's Written Submissions):
1. The Appellant should not be granted an extension of time for the filing of the Notice of Appeal.
2. Pursuant to the principles in Collins v Urban [2014] NSWCATAP 17 [66], the Tribunal's decision was fair and equitable as no mathematical error was made in relation to the monetary amount awarded to the Appellant. Therefore, there is no substantial miscarriage of justice.
3. The reason for appeal is not in relation to a question of law. The Appellant has not applied for leave from the Tribunal to appeal on grounds other than a question of law.
The Tribunal does not accept that the Appellant has not applied for leave to appeal; it did so on page 4 of the Notice of Appeal. The question was "Are you asking for leave?" the Appellant ticked "Yes". The Appellant then filled out the box on page 4 which is the first basis upon which the Appeal Panel may give leave to appeal from a decision of the Consumer and Commercial Division of the Tribunal.
Given the reason why the Appellant did not lodge within 4 weeks of receiving the Decision, the Appeal Panel considers it appropriate to extend time for the Appellant to lodge the appeal on 25 January 2021. There is no prejudice to the Respondents; they were aware of the Appellant's contention from 3 December 2020 and no stay has ever been ordered.
[4]
The ground of appeal
There is one ground of appeal; that the Decision was not fair and equitable because it contained an error in relation to the calculation of the amounts payable by the parties to each other: page 4 Notice of Appeal.
[5]
The Appellant's submissions
The Appellant's submissions were contained in the letters it sent the Tribunal on 3 and 18 December 2020 seeking amendment to the orders made in the Decision. These letters were annexed to the Appellant's submissions dated 25 February 2021 and to the Notice of Appeal.
Further submissions were made by the Appellant, filed 3 March 2021. These contained a reconciliation of amounts and submissions dated 25 February 2021.
As to the underpayment claim, the Appellant claimed $15,662.46 underpayment by the Respondents: see [163] of Decision. The Tribunal found, because it was accepted, that the homeowners did in fact pay a further $10,000 towards the contract sum: see [164] and [167] of the Decision. The Tribunal found $4,200 must be deducted from the contract sum as it was agreed between the parties in regards to the "maple doors": [169] the Decision.
Therefore the $15,662.46 claimed by the Builder ended up as $1,462.46 as set out in paragraph 6 of the Appellant's 22 February 2021 reconciliation
As to the variations claim, the Appellant claimed $61,555.34 for variations, $17,690 of which was for a fencing variation: [4] and [97] Decision. The Tribunal accepted the homeowners paid the builder $17,690 for the fencing variations: [97] the Decision. However, the Tribunal included the $17,690 paid by the homeowners to the builder for the fencing variation as payment towards the contract sum. To properly account for the fencing variation the Appellant submits the Tribunal should have added the $17,690 to the list of variations found at [115] to [152].
The Appellant submits the Tribunal should have added to the variations found - namely, subtotal $36,055.20 ([152]) - the fencing variation of $17,960, making the subtotal $54,015.20. To that is added 15% margin ([151]) and the total should be $59,423.48: paragraph 1 of the Appellant's reconciliation document.
Paragraphs 4 and 5 of the reconciliation document are:
Whether or not, by coincidence or not, the final payment made by the bank in the sum of $17,960 was in relation to fencing, it does not take away from the fact that as at April 2017 and to date the builder has only received the sum of $534,337.54 directly from the bank and the homeowners including the final payment of $17,960.00.
By way of an explanation, if the final payment by the lender in the sum of $17,960 was in relation to the fencing variation and not the contract itself, then the builder, as at April 2017 and to date, has only received the sum $516,377.54 from the bank and the homeowners towards the contract price in which case further reconciliation is required as to what has or has not been paid towards the contract price. In the end, whichever way the calculation is conducted, the end result is the same.
[6]
The Respondent's submissions
The Respondent filed its submissions on 4 March 2021, which were in addition to their Reply to Appeal.
The entirety of their submissions are set out below:
1. The Respondent's [sic] deny the existence of a mathematical miscalculation in respect to the monetary amount awarded to the Appellant.
2. The Tribunal found, in the principal judgement of S.A. McDonald, at paragraph 97, that the amount of $17,960 for fencing work was paid to the Appellant.
3. Hence, the tribunal member did not make a mathematical error as he did not intend on awarding the builder the variation for fencing works.
[7]
Consideration of the issues
The Appellant asked the Appeal Panel to accept that to the $36,055.20 sub-total for variations found, the Tribunal should have added $17,960 for the fencing variation which was paid. Despite this $17,960 fencing variation being inclusive of the builder's margin, the Appellant's reconciliation table has the $17,960 added to the sub-total, to which 15% builder's margin is added. This is incorrect.
The fencing variation was $17,960 inclusive of margin and has been paid. It should not be added to the payments the homeowners must make for the unpaid variations set out in [152] of the Decision.
Paragraph 152 was a table of variations applicable to the contract for which the Tribunal found the builder was entitled to be paid. The fencing variation was paid and it did not need to have the margin added to it.
However the underpayment claim is not as clear.
The Tribunal found the homeowners paid the builder $534,337.50, plus they [?] paid subcontractors $10,000 which was a reduction of the contract sum plus the builder agreed to reduce the contract sum by $4,200 for the maple doors. That left $548,537.50 paid towards the $550,000 contract sum which left $1,462.46 to be paid by the homeowners. The Appeal Panel accepts those submissions.
The $534,337.50 included $17,960 for the fencing variation. This means that it should be reduced from the $534,337.50 starting point from which the Tribunal calculated the payments the homeowners made towards the contract sum (in contrast to the payments for variations). If the fencing variation is removed from the $534,337.50 starting point, the homeowners only paid $516,377.50 and after the allowances of $14,200 the homeowners have paid or had credited $530,577.50 towards the contract sum. This leaves $19,422.46 for the homeowners to pay to satisfy the contract sum. This is inclusive of the $1,462.46 difference previously referred to herein, and inclusive of the $6,157.06 added in separately by the Tribunal at [172].
The total the homeowners should pay the builder should therefore, according to the reasons in the Decision, be (cf [172] Decision):
1. $41,463.38 for variations; plus
2. $19,422.46 for underpayment of contract sum.
The total is $60,885.84 that the homeowners should pay the builder.
The Tribunal found the builder should pay the homeowners $40,324.03. This remains unchanged and unchallenged on the appeal.
On 21 April 2021 the Appeal Panel wrote to the parties asking them if any amounts have been paid between them pursuant to the orders made by the Tribunal on 20 July 2020. The parties confirmed that neither of them have paid any amount to the other.
The result of the calculation of the Tribunal's findings is that the homeowners must pay the builder $20,561.81.
[8]
Costs
The parties did not seek an order for costs in their favour. As a result, there will be no order as to costs of the appeal.
[9]
Orders
The Orders of the Appeal Panel are as follows:
1. Time to commence the appeal is extended to 25 January 2021.
2. Leave is granted to appeal against the Decision.
3. The Appeal is allowed.
4. The orders made on 23 November 2020 are set aside.
5. In satisfaction of both proceedings the Appeal Panel orders the Respondents to pay the Appellant $20,561.81 within 14 days.
6. No order as to costs.
[10]
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: 31 May 2021