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[2026] NSWCATAP 227
NCAT Appeal Panel
2026-07-21
D A C Robertson, Principal Member N Kennedy, Senior Member
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Cavanagh v Montgomery Homes Pty Ltd [2026] NSWCATAP 227
Hearing dates: 24 June 2025
Date of orders: 21 July 2026
Decision date: 21 July 2026
Jurisdiction: Appeal Panel
Before: D A C Robertson, Principal Member
N Kennedy, Senior Member
Decision: (1) An extension of time for the lodgement of the Notice of Appeal is refused.
(2) Leave to further amend the Notice of Appeal is refused.
(3) The appeal is dismissed
(4) Subject to order (5) below, the appellants are to pay the respondent’s costs of the appeal as agreed or assessed.
(5) If either party seeks a different order in relation to the costs of the appeal, they may file, and serve upon the other party, submissions of no more than five pages, with any evidence in support, within 14 days of the publication of these orders, in which event order (4) above ceases to have effect.
(6) If a party files and serves submissions pursuant to Order (5) above, the other party may file and serve submissions in response of no more than five pages, with any evidence in support, within a further 14 days.
(7) Submissions in reply to submissions filed and served pursuant to Order (6) above, of no more than three pages, may be filed and served within a further 7 days.
(8) Any submissions filed pursuant to Orders (5) to (7) above must include submissions concerning whether an order should be made pursuant to s 50 of the Civil and Administrative Tribunal Act 2013 (NSW) dispensing with a hearing in relation to the question of costs of the appeal.
General information, not legal advice.
Original judgment source is linked above.
Catchwords: BUILDING AND CONSTRUCTION — Practical completion — Whether the issue of a second notice of practical completion after the date nominated in the first notice of practical completion constitutes a waiver of reliance upon the first notice — Nature of waiver
EVIDENCE — Opinion evidence — Effect of failure by expert witness to comply with the Tribunal’s procedural guidelines — Application in the Tribunal of Makita (Australia) Pty Ltd v Sprowles — Whether the Tribunal erred by dismissing or according no weight to evidence of an expert by reason of their failure to comply with the Procedural Guidelines or the principles expressed in Makita v Sprowles
EVIDENCE — Inference — Whether the Tribunal erred by failing to draw the inference that a defect was widespread from evidence of a small number of instances
APPEALS — Civil and Administrative Tribunal Act 2013 (NSW) Sch 4 cl 12(1)(c) — Leave to appeal on the ground that significant new evidence has arisen — Whether evidence of circumstances coming into existence following the hearing can be new evidence — Whether evidence is significant
Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW)
Civil and Administrative Tribunal Rules 2014 (NSW)
Home Building Act 1989 (NSW)
Cases Cited: Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57
Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111
Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165
Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 (2022) 277 CLR 445; [2022] HCA 38
Bank of Credit and Commerce International SA v Ali [2001] 1 AC 251
Bele-Verdy v The North Coast Community Housing Company Ltd [2025] NSWCATAP 13
Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734
Cadence (90) Investments Pty Ltd v Aspire Constructions Pty Ltd; Aspire Constructions Pty Ltd v Cadence (90) Investments Pty Ltd [2026] NSWSC 136
Candy Events Pty Ltd v Thrain Pty Ltd t/as Digital Solutions Group [2025] NSWSCATAP 164
Chapman v McLaughin [2016] NSWCATAP 212
Claydon v NSW Land and Housing Corporation [2015] NSWCATAP 192
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Collins v Urban [2014] NSWCATAP 17
Corcoran v Far [2019] NSWSC 1284
Deacon v National Strategic Constructions Pty Ltd [2017] NSWCATAP 185
Dhorajiwala PCT Pty Ltd v Peacock [2022] NSWCATAP 313
Donohoe v Albulario [2025] NSWSC 9
Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088
EFC Constructions Pty Limited v Malik [2025] NSWCATAP 219
Enterprise Motors NSW Pty Ltd v Sweeney [2026] NSWCATAP 135
Ferguson v Mission Australia [2024] NSWCATAP 183
Gallo v Dawson [1990] HCA 30; 64 ALJR 458
Hawkins v NSW Land and Housing Corporation [2026] NSWCATAP 121
Helicopters Pty Ltd v Bankstown Airport Limited [2009] NSWSC 889
Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22
Kudrynski v Orange City Council [2024] NSWCA 33
Kuhl v Zurich Financial Services Australia Ltd (2010) 243 CLR 361; [2011] HCA 11
Lehrmann v Network Ten Pty Ltd (Trial Judgment) [2024] FCA 369; 422 ALR 507
Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305
My Fashion Republic Pty Ltd t/as Cosette v Ho [2024] NSWCATAP 191
Nathanson v Minister for Home Affairs (2022) 276 CLR 80; [2022] HCA 26
Owners - SP 76269 v Draybi Bros Pty Ltd [2014] NSWCATAP 29
Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69
Ross v New South Wales Land and Housing Corporation [2016] NSWCATAP
Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39
The Owners – Strata Plan No 12185 v Brown [2025] NSWCATAP 51
The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612
The Owners Strata Plan No 66375 v Suncorp Metway Insurance Ltd (No 2) [2017] NSWSC 739
Turner Corporation Limited (Receiver and Manager Appointed) v Austotel Pty Ltd (1997) 13 BCL 378
Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204
Vella v Mir (No 3) [2020] NSWCATAP 17
Webb v Secretary, Department of Communities and Justice [2025] NSWCATAP 47
Wells Group Pty Ltd v Betts [2025] NSWCATAP 70
Yang v New South Wales Land and Housing Corporation [2025] NSWCA 58
Texts Cited: NSW Civil and Administrative Tribunal, Procedural Direction 3 Expert Evidence
Category: Principal judgment
Parties: Shane Cavanagh (First Appellant)
Kathleen Cavanagh (Second Appellant)
Montgomery Homes Pty Ltd (Respondent)
Representation: Counsel:
F Clark (Appellants)
G Carolan (Respondent)
Solicitors:
Taperell Rutledge Lawyers (Appellants)
Roberts Crossbie Mortensen Lawyers (Respondent)
File Number(s): 2025/00098632
Publication restriction: Nil
This is an internal appeal under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) from a decision of the Consumer and Commercial Division of the Tribunal dated 6 January 2025 in proceedings 2022/00410551 and 2022/00416204 (together referred to as the Tribunal proceedings).
The Tribunal proceedings concerned a contract for the construction by the respondent to the appeal of a home on the appellants’ land at Corlette in NSW. In this decision, following the terminology adopted by the Tribunal in the decision under appeal, we refer to the appellants as the owners and the respondent as the builder.
The decisions under appeal concern the owners’ claims of incomplete and defective works and delays in completing works and the builder’s cross claim for interest on an amount said to have been paid late by the owners to the builder. Additionally, should the owners be successful on appeal, the owners then also challenge the Tribunal’s decision concerning the costs of the proceedings, which was published on 11 February 2025 (and amended on 20 February 2025).
The owners sought damages in respect of defective work of more than $200,000 (being an amount of $170,294.12 based on an initial report from Mr Zakos, an expert retained by the owners, plus a revised claim of $44,391 based on a “supplementary report” prepared by Mr Zakos). They also maintained a claim of $10,360 for liquidated damages for delay. The owners sought a money order, rather than a work order, in respect of the defective and incomplete works, as they claimed the relationship between the owners and the builder had broken down.
The builder sought interest on the final payment by the owners, made on 25 November 2022. The builder claimed practical completion was achieved on 27 May 2022 and the builder was entitled to interest on the late final payment.
There is no dispute that the Tribunal had jurisdiction to determine the parties’ respective claims pursuant to the Home Building Act 1989 (NSW) (HB Act)
“(1) On 30 June 2021 the parties signed a contract …
(2) At about that time the owners also signed general, paint and tile selection sheets plus electrical plans …
(3) Details of the inclusions were set out in the tender document … which became part of the contract.
(4) On 26 July 2021 construction commenced on site …
(5) On 27 August 2021, the builder sought a first extension of time …
(6) On 7 September 2021 Mr Cavanagh advised the builder ‘I am now going to be a highly critical, picky client’ …
(7) On 23 September 2021, the builder sought a second extension of time …
(8) On 19 April 2022, the owners raised seven matters with the builder, being (a) roof insulation, (b) gutters and downpipes, (c) air conditioning pipework, (d) vanity taps, (e) the water main, (f) plastering and painting, and (g) the valley gutter and flashing …
(9) In the absence of any extensions of time, the works were due to be completed by 2 May 2022 …
(10) On 02 May 2022, the owners met with the builder’s Mr Phillips and Mr Kidd to discuss seven issues …
(11) On 5 May 2022 Mr Kidd attended the site and took photos …
(12) On 9 May 2022 Mr Kidd attended the site and took photos …
(13) On 11 May 2022 Mr Kidd responded to the seven issues …
(14) On 13 May 2022 Mr Phillis met with the owners on site and conducted a walk-through …
(15) On 18 May 2022, the builder sent a notice of practical completion to the owners … which said that practical completion would be achieved on 26 May 2022 and scheduled a walk-through on 27 May 2022.
(16) On 19 May 2022 Mr Cavanagh sent an email to the builder … which suggested the owners would not take possession of the house “until all issues are resolved”.
(17) On 25 May 2022 Mr Phillips had a telephone conversation with Mr Cavanagh to confirm the final walk-through …
(18) On 27 May 2022, the owners attended a site meeting …
(19) By 27 May 2022, the owners had indicated to the builder that they would not pay the final progress claim until all issues, including minor defects, were rectified …
(20) On 9 June 2022, the builder sought a third extension of time …
(21) On 10 June 2022 Mr Cavanagh told the builder that having two downpipes at the front entry was not acceptable …
(22) On 15 June 2022 Mr Kidd sent Mr Cavanagh drawings and calculations for the downpipes …
(23) Later that day Mr Cavanagh replied …, saying ‘… we are happy with the calculation and number of downpipes and the locations they are shown on the attached drawings.’
(24) On 16 June 2022 Mr Phillips attended the site and took photos …
(25) On 16 June 2022, the builder sought a fourth extension of time …
(26) Between 18 May and 27 June in 2022 the work which the builder completed was only minor … and did not impact on its [ie the house’s] habitability.
(27) On 25 June 2022, the owners sent a list of 25 alleged defects to NSW Fair Trading … who provided the owners with details of the builder’s response in a letter dated 23 August 2022 …
(28) Between 27 June and 2 August in 2022 a new roof was installed…, including new gutters and downpipes and new anticon blankets.
(29) On 7 July 2022, the builder sought a fifth extension of time …
(30) On 15 July 2022, the builder sent a notice of practical completion dated 14 July 2022 to the owners … nominating 29 July 2022 for an inspection appointment which did not occur.
(31) The new roof was installed between 25 and 28 July 2022 … by DBR, which including fixing the battens to the trusses …
(32) On 25 August 2022 Mr Cavanagh and Mr Kidd had a conversation to the effect set out in the contemporaneous note of Mr Kidd …
(33) On 29 August 2022, the owners lodged an application with the Tribunal (2022/00410551), only against the builder, alleging 22 defects.
(34) On 30 August 2022, a cross-application (2022/00416204) was lodged.
(35) On 19 September 2022, the [certifier] issued an email which listed what needed to be done by the builder and by the owners in what was referred to as “the prefinal inspection” …
(36) On 30 September 2022, the owners’ solicitor sent a letter disputing that the builder was entitled to be paid $81,281.50 …
(37) Between 18 May 2022 and 25 November 2022, the work which the builder completed was only minor, was done to attempt to satisfy the owners and did affect the works having reached practical completion …
(38) On 25 November 2022, the owners paid the final progress claim and took possession … A deed of partial settlement was exchanged on that date to preserve the rights which the parties have asserted in the application and cross-application.
(39) On 24 February 2023, the owner’s solicitor sent a letter to the builder’s solicitor … which alleged practical completion had not occurred, alternatively relying on list of 143 alleged defects and clause 24.2 of the contract.
(40) On 12 April 2023, the owners’ solicitor sent a letter, asking if the builder intended to rectify the alleged defects …
(41) On 14 April 2023, the builder’s solicitor replied, confirming the intention to do so, and seeking access ...
(42) On 5 May 2023, the owners gave instruction to their solicitor to approve access …
(43) On 11 May 2023, the builder commenced rectification work …
(44) On 23 May 2023, the owners’ solicitor sought, for the first time, a scope of works by midday the next day …
(45) On 23 May 2023, the builder’s solicitor replied that it would not provide further details but would require sufficient time …
(46) On 26 May 2023, the builder’s solicitor provided further details and advised that a more substantive response would be provided …
(47) On 1 June 2023, the owners’ solicitor required all work on site to cease immediately until agreement on the proposed work was reached …
(48) On 6 June 2023, the builder’s solicitor provided further details of the scope and scheduling of further works to be performed …
(49) On 8 June 2023, the builder’s solicitor advised that tiling work may recommence, but all other work must remain suspended …
(50) On 13 June 2023, the builder’s solicitor provided further information in relation to the tiling work and advised it would provide further information as sought on 8 June 2023 …
(51) On 14 June 2023, the owners’ solicitor authorised tiling work to continue …
(52) On 15 June 2023, the builder’s solicitor sought access to perform tiling work …
(53) On 20 June 2023, the builder’s solicitor required further information before tiling work proceeded …
(54) On 23 June 2023, the builder’s solicitor provided a revised timetable for tiling works …
(55) On 28 June 2023, the builder’s solicitor sought a response to the letter dated 23 June 2023 …
(56) On 30 June 2023, the builder’s solicitor sent a second follow-up letter and indicated the builder was ready, willing and able to complete tiling works …
(57) On 3 July 2023, the owners’ solicitor suggested additional time was needed to consider the builder’s proposed works and timetable …
(58) On 11 July 2023, 18 days after the builder had provided a revised timetable for tiling works, the owners’ solicitor emailed a notice of dispute to the builder dated the previous day …
(59) On 24 July 2023, the builder’s solicitor provided a scope of works for further works, in accordance with the owners’ request …
(60) On 27 July 2023, the owners’ solicitor sent a letter purporting to terminate the contract …
(61) On 8 August 2023, the builder’s solicitor advised the owners’ solicitor that the builder elected to affirm the contract …
(62) On 14 August 2023, the owners served amended Points of Claim which added claims against Mr Kidd and Jamie Montgomery based on the provisions of the Design and Building Practitioners Act 2020 (NSW).
(63) On 31 August 2023, the builder’s solicitor confirmed the builder’s position by advising the owner’s solicitor that the builder still considered the contract remained on foot …
(64) On 22 September 2023, at a directions hearing, the owners sought and obtained leave to add Mr Montgomery and Mr Kidd as respondents, but on 3 April 2024 the owners served further amended Points of Claim which omitted the claims against Mr Montgomery and Mr Kidd …” (Hearing book references omitted.)
“(1) When did practical completion occur?
(2) Was the contract validly terminated by the owners?
(3) Has defective or incomplete works been proved?
(4) If so, should a work order or a money order be made?
(5) If a work order is made, what should be the wording of that order?
(6) If a money order is made, what amount should be awarded?
(7) What amount, if any is payable in respect of the owners’ claim for liquidated damages for delay?
(8) What amount, if any is payable in respect of the builders claim for interest?”
“While it was open to the owners to take the view that they would not take possession until all issues are resolved, they cannot unilaterally override the wording of the contract, which not only defined practical completion in cl 1 but also included deeming provisions in cl 21.6. As the owners neither paid the final progress claim nor gave notice under cl 23.2(b) of the contract, there was deemed practical completion on 27 May 2022.”
“75 As with the issue of practical completion, there are two reasons why the Tribunal does not consider the owners validly terminated the contract by their notice of termination dated 27 July 2023 …
76 First, as the contract had already come to an end in that (1) the builder had achieved practical completion on 27 May 2022, (2) the owners had paid the last portion of the contract price on 25 November 2022 …, (3) the owners took possession on that date, and (4) the 90-day defects liability period expired. Plainly, a contract that has come to an end cannot be terminated.
77 Secondly, even if the contract was still on foot when the 27 July 2023 termination notice was issued, that notice did not validly terminate the contract, having regard to the relevant evidence and the applicable law.”
“79 From the delay in responding to 23 June 2023 letter from the builder’s solicitor, and the 20-page notice of dispute sent on 11 July 2023, it is a reasonable inference that the owners and their solicitor(s) were not considering a response to that 23 June 2023 letter but were instead preparing a notice of dispute.
80 During the period from 1 June 2023 to 27 July 2023 the owners required the builder to not carry out any further work, save for tiling work and that work was only permitted during the period, at best, from 8 to 20 June 2023.”
“In this case, the Tribunals considers the owners cannot insist on the performance of rectification work when they refused to permit that work to be carried out by the builder. Simply stated, the 11 July 2023 notice of dispute and the 27 July 2023 notice of termination were based on the builder not doing work which the owners would not permit them to do.”
“The builder was 17 working days late in achieving practical completion. Deducting two working days for the first extension of time gives 15 working days as the period for liquidated damages. Hence, at a rate of $70 per day, the owners are entitled to liquidated damages of $1,050.”
In matter 2022/00416204, the Tribunal made orders for the owners to pay the builder $3,897.06 and for the owners to pay the builder’s costs on the ordinary basis, as agreed or assessed.
In matter 2022/00410551, the Tribunal made orders for the builder to pay the owners $38,076.68 and for the builder to pay the owners’ costs on the ordinary basis, as agreed or assessed.
The Tribunal made directions permitting the parties to contend that a different costs decision should be made in respect of either proceeding.
The parties did file submissions in relation to the costs orders and the Tribunal published its decision concerning the costs of the proceedings on 11 February 2025 (amended on 20 February 2025). The Tribunal ordered that:
In matter 2022/00410551, the builder is to pay 50% of the owners’ costs on the ordinary basis, as agreed or assessed.
In matter 2022/00416204, the costs decision of 6 January 2025 was affirmed, that the owners are to pay the builder’s costs on the ordinary basis, as agreed or assessed.
The Notice of Appeal was filed on 7 March 2025, which was not within the time fixed by r 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules), being within 28 days from the day on which the owners were given written reasons for, or notified of, the Tribunal's decision, whichever was the later in time. The owners seek an extension of time to file the Notice of Appeal, under s 41 of the NCAT Act.
The owners attached to the Notice of Appeal a document listing nineteen grounds of appeal which the owners say identify an error on a question of law and a further three grounds which the owners say require leave to appeal.
The owners served amended grounds of appeal on 14 April 2025, which removed the grounds numbered 15 to 18 in the document attached to the Notice of Appeal. At the hearing, the owners confirmed to the Appeal Panel that they did not press grounds 15 to 18.
The grounds pressed by the owners are as follows:
“Questions of law
A. WHETHER PRACTICAL COMPLETION HAD OCCURRED
Ground 1
1. Whether the Senior Member erred at [66]-[74] of his written reasons in failing to apply the correct legal principles when determining the effect of clause 21 of the contract and the contractual definition of Practical Completion:
(a) The Senior Member found as a matter of law that the effect of clause 21 of the contract was to deem practical completion had occurred when, as a matter of fact, there was evidence of works that were required that would prevent the Applicants from use of the premises for their usual purpose.
(b) The Senior Member found, as a matter of law, that strict compliance with clause 21 was required by the Applicants in terms of the timing and content of Notices objecting to Practical Completion and failure to comply affected the substantive rights of the Applicants.
(c) That whether practical completion had occurred was not a question of fact but of the effect of the deeming provisions within clause 21 of the contract.
Ground 2
2. Whether the Senior Member erred at [66]-[74] by failing to exercise jurisdiction in his determination of whether practical completion was reached as a matter of fact by failing to consider the clear unequivocal and central claims made by the Applicants on the Application, in evidence and by way of submissions:
Particulars
(a) That the Respondent had issued a second notice of practical completion in July 2022, and this had the effect of either a waiver or an election disentitling the Respondent from claiming practical completion had been reached at an earlier date.
(b) That the issue of the second notice of practical completion was a factual admission that practical completion had not occurred at an earlier date.
(c) That the Respondent's Manager who was in control of the building works and site, admitted or conceded in cross-examination that major works had to be undertaken after the first notice of practical completion had been issued including work that required removal of the roof, the guttering and re-design of the hydraulic system.
(d) That the Respondent's Manager admitted in cross-examination that the Respondent had no right to issue the final progress claim for payment under the contract in May 2022 and had no right to require the Applicants to pay this claim at this time.
(e) That there was evidence that the Respondent had to remove the entire roof of the premises which would leave the premises without a roof and with a tarpaulin covering the building works, for a period of four (4) weeks and this did not occur until July 2022.
(f) That there was evidence that the hydraulic system had not been approved and was in contravention of the construction certificate and development consent conditions and was defective in that it caused roof leaking and flooding to the foyer area of the premises and this design was known to be defective by the Respondent.
(g) That there was evidence extensive work to the guttering and roof requiring the use of scaffolding was still being undertaken by the Respondents in October and November 2022 and the site works that were documented indicated the premises were still locked up and under the full control of the Respondent in November 2022.
(h) That the Respondent had made an admission which was binding on them and was an admission of fact bound to be taken into account by the Tribunal in its fact finding that the second roof had to be fully replaced by the Respondent after the Applicants took possession in November 2022.
Ground 3
3. Whether the Senior Member denied the Applicants procedural fairness: by making findings on credit at [59] of the written reasons against Shane Cavanagh without the matters being put to Mr Cavanagh in cross-examination to give him an opportunity to respond.
Ground 4
- Whether the Senior Member then erred in misconstruing the law relating to findings on credit in that he then found that as a result of his decision on credit at [59] of the written reasons (that was based almost entirely on documents in the Court Book) he would then find that Mr Cavanagh could not be believed on any issue where there was a dispute on the facts with the Respondent and that on this basis he would reject Mr Cavanagh's evidence on the state of the works and accept limited evidence from the Respondent of the state of the works.
Ground 5
- Whether the Senior Member erred by failing to provide adequate reasons regarding his decision that as a matter of fact, practical completion occurred in May 2022.
B. WHETHER THE ROOF WAS DEFECTIVE AND REQUIRED FULL REPLACEMENT
Ground 6
- Whether the Senior Member erred in failing to exercise jurisdiction by failing to consider the clear, unequivocal and central claims made by the Applicants in evidence and in submissions that the Respondent had made an admission of fact that was binding on it that the second roof it had installed was defective and required full replacement, and these admissions were made in writing and were evidenced in two separate documents, the first being open correspondence from the solicitors for the Respondent and the second being a scope of rectification works prepared by the Respondent and served on the Applicants.
Particulars
(a) Oral Submissions of the Applicants on 30 October 2024.
(b) Correspondence from the Respondent from April to July 2022 including a Scope of Works contained in the Applicants' Court Book and in evidence in the proceedings.
Ground 7
7. Whether the Senior Member erred in failing to provide adequate reasons in relation to the central issue of roof replacement.
C. WHETHER THE INTERNAL PAINTING AND PLASTERBOARD WAS DEFECTIVE
Ground 8
8. Whether the Senior Member erred in misconstruing section 18B(1)(b) of the Home Building Act 1989 (HBA) by:
(a) finding that the Australian Standards applicable to painting and plasterboard were not applicable to the question of whether works were defective as they were not referenced by the National Construction Code and the Building Code of Australia
(b) failing to consider whether the adoption of the Australian Standards within this contract between the parties resulted in the Australian Standards being applicable to the question of whether works were defective.
Ground 9
9. Whether the Senior Member erred in asking himself the wrong question as a result of the errors in the interpretation of section 18B(1)(b) of the HBA in that he asked himself if the work complied with the HIA guide which was not applicable and which required a much lower standard of workmanship.
Ground 10
10. Whether the Senior Member erred in misapplying Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612 to the determination of the extent of the painting defects observed by the Applicants' expert when the painting defects are not classified as systemic defects.
D. WHETHER THE HYDRAULIC DESIGN AND GUTTERING WAS DEFECTIVE AND REQUIRED REPLACEMENT
Ground 11
11. Whether the Senior Member erred in denying the Applicants procedural fairness by determining whether a variation had been agreed to by the Applicants on a ground not argued by either party in the proceedings.
Particulars
The application of the Electronics Transactions Act 2000 (NSW) at paragraph [122] of the written reasons.
Ground 12
12.Whether the Senior Member erred in failing to exercise jurisdiction by not considering the clear, unequivocal and central claims made by the Applicants in written and oral submissions and in evidence that the Applicants did not agree in writing to the number or configuration of the downpipes asserted by the Respondent as the documentary evidence of this agreement was, on its face, limited to 17 downpipes in number and a configuration of new downpipes which did not include 2 at the front of the premises.
Ground 13
13. Whether the Senior Member erred in law in that he misconstrued the requirements for planning approval under the Environmental Planning and Assessment Act 1979 and the Environmental Planning and Assessment Regulation in finding that the hydraulic design and guttering built by the Respondent was approved and not defective.
E. WHETHER THE APPLICANTS, BY THEIR CONDUCT, WERE NOT ENTITLED TO LIQUIDATED DAMAGES AND THE RECTIFICATION OF DEFECTS
Ground 14
14. Whether the Senior Member erred in the interpretation of the prevention principle developed in Turner Corporation Ltd v Co-ordinated Industries Pty Ltd and Ors [1995] 11 BCL 202, and erred in the application of that principle to the question of whether:
(a) The Respondent repudiated the contract; and
(b) The Applicants were entitled to terminate the contract on the grounds set out in the Notice of Default and Notice of Termination; and
(c) the Senior Member erred by finding the prevention principle applied to the question of whether the Applicants were entitled to have work rectified after they took possession to the standard the Applicants propounded was the contractual standard of work.
…
G. COSTS DECISION
Ground 19
19. Whether the Senior Member erred in law in failing to take in account relevant considerations on the question of the event for the question of costs being that practical completion had not occurred which was a central issue to both sets of proceedings and that there were major defects some of which were admitted as defective by the Respondent which required rectification by the Respondent and on this basis the Applicants should have been entitled to their full costs of the proceedings and their costs on the Cross-Claim.
H. GROUNDS OF APPEAL REQUIRING LEAVE
Ground 20
20. The Applicants also alternatively seek to leave to appeal against the factual findings of the Senior Member regarding whether practical completion was reached, and the final decision that Practical Completion had been reached in May 2022 on the grounds:
(a) The decision was against the weight of the evidence, and the Applicants repeat the particulars in Ground 1 above and further particulars will be provided in submissions.
(b) The decision was unfair and inequitable as it was made, in part, on the basis of credit findings against Mr Cavanagh that were a denial of procedural fairness, and the Applicants repeat the particulars above.
Ground 21
21. The Applicants also seek leave to appeal against the factual findings in relation to the hydraulic defects and the final decision to reject this item as a defect, in that the findings were against the weight of evidence.
Particulars
(a) there was no evidence the Applicants agreed in writing to the configuration and number of downpipes asserted by the Respondent to be agreed to and
(b) there was evidence that was not considered that the Applicants did not agree to 2 downpipes at the front of the premises; and
(c) that the Respondent admitted it had placed these without any agreement or authority; and
(d) that the hydraulic design was known to the Respondent to be defective and had not been approved.
Ground 22
22. The Applicants also seek leave against both these findings referred to in Ground 20 and Ground 21 as the factual and final decisions on these issues and as a component of the written reasons was unfair and inequitable as it was made, in part, on the basis of credit findings against Mr Cavanagh that were a denial of procedural fairness, and the Applicants repeat the particulars above.”
The owners requested that the Appeal Panel conduct a new hearing (pursuant to s 80(3) of the NCAT Act), if the owners are successful on grounds 6, 8, 9 and 11.
The owners accepted in their Notice of Appeal that they required an extension of time to file the appeal, and relied upon an affidavit of Maxine Andronicos dated 5 March 2025, which was attached to the Notice of Appeal, in support of an extension of time.
Written submissions were filed by the owners on 9 May 2025.
On 23 June 2025, the owners filed new evidence, not before the Tribunal at the original hearing, being a letter from Jason Paziuk (from Archer Roofing) dated 20 June 2025, and an affidavit of Shane Cavanagh dated 16 June 2025. At the hearing of the appeal on 24 June 2025 the owners sought leave to further amend the Notice of Appeal to rely upon the new evidence.
The builder filed a Reply to Appeal on 31 March 2025. The builder accepted that the appeal against the costs decision was lodged in time but submitted that the appeal against the substantive decision was not lodged in time. The builder opposes any extension of time.
On 15 April 2025, the builder filed a further Reply to Appeal addressing the amended grounds of appeal filed by the owners. In this document, the builder acknowledged that grounds 15 to 18 are not pressed by the owners, and amended the response to ground 19. The further Reply to Appeal otherwise repeats the Reply to Appeal filed on 31 March 2025.
On 31 March 2025, the builder filed an affidavit of Jack Lindgren dated 31 March 2025, in opposition to the extension of time sought by the owners in respect of the substantive appeal.
The builder filed written submissions on 10 June 2025.
“37 What constitutes a question of law is vexed and context dependent in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises: Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416 at [33(4)], citing Thomas and Naaz [2023] NSWCA 40 at [52] and Da Costa v The Queen (1968) 118 CLR 186 at 194; [1968] HCA 51.
38 For instance, a ground of appeal that raises the question whether there were adequate reasons may constitute an attack on the merits which would not raise a pure question of law. On the other hand, it may be a contention that the decision is unreasonable in the requisite sense or that the Tribunal failed to exercise the jurisdiction, which would likely raise a question of law: see the exposition of this issue in Wollondilly at [28]–[32]. Care must in any event be taken. As has been clarified by amendment to the NCAT Act since Prendergast was decided, the Tribunal is not required to give reasons for all decisions it makes: NCAT Act, s 62(2A; see too: New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 at [53]–[54], [109]–[114].
39 Therefore, discernment and care must be taken to ensure the grounds relied upon by the appellant, properly understood, raise questions of law and arise in the proceedings; or whether leave is required.”
Relevant to this appeal:
Whether the Tribunal applied the correct legal principle raises a question of law: Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 at [40]-[45];
Whether there has been:
“A failure to exercise jurisdiction, which includes the failure to consider and address a material issue raised by a party in the proceedings that is within the jurisdiction of the Tribunal to determine.”
raises a question of law: The Owners – Strata Plan No 12185 v Brown [2025] NSWCATAP 51 at [56(2)], citing Dranichnikov v Minister for Immigration and Migration Affairs [2003] HCA 26; 77 ALJR 1088 (Dranichnikov); and Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 at [8]-[12] and [413].
Clause 12 of Sch 4 to the NCAT Act provides that the Appeal Panel may grant leave to appeal against a decision of the Consumer and Commercial Division pursuant to s 80(2)(b) of the NCAT Act, only if it is satisfied that the owners may have suffered a substantial miscarriage of justice because:
the decision of the Tribunal under appeal was not fair and equitable; or
the decision of the Tribunal under appeal was against the weight of evidence; or
significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
The Appeal Panel considered the meaning of a substantial miscarriage of justice for the purposes of cl 12 of Sch 4 to the NCAT Act in Collins v Urban [2014] NSWCATAP 17 (Collins v Urban) at [76], stating that a substantial miscarriage of justice may have been suffered:
“… where there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.”
“(1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];
(2) Ordinarily it is appropriate to grant leave to appeal, only in matters that involve:
(a) Issues of principle; or
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; or
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact-finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.”
Section 41 of the NCAT Act gives the Tribunal the power to extend time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction, despite anything to the contrary under that legislation. An application may be made after the relevant time period has expired.
The Notice of Appeal was lodged over a month (32 days) out of time.
Kirk J considered the circumstances in which the time to lodge an appeal may be extended in Yang v New South Wales Land and Housing Corporation [2025] NSWCA 58 (Yang), where, at [24], his Honour said:
“As Ward JA said in Asuzu v Council of the New South Wales Bar Association [2012] NSWCA 406, at [42], where leave to extend time to appeal is concerned the Court is to have regard to what the interests of justice require in all the circumstances of the case, including “the reason why the appeal was not lodged in time; the period for which an extension is sought; any prejudice to the opposing party; and the apparent prospects of success on the appeal”, where the latter issue involves considering whether there is a “fairly arguable case” in circumstances where there was a reasonable explanation for the delay and no significant prejudice.”
“The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include:
(1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant - Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38];
(2) The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7];
(3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider:
(a) The length of the delay;
(b) The reason for the delay;
(c) The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and
(d) The extent of any prejudice suffered by the respondent (to the appeal),
- Tomko v Palasty (No 2) (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and
(4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59].”
The owners were 32 days late in lodging the Notice of Appeal. It is noted that the owners were legally represented at the first instance hearing by the same counsel and solicitors as in the appeal.
Ms Andronicos, in her affidavit, and the owners, in submissions, indicate, in explanation for the delay in lodging the application, that the applicants were waiting for legal advice. On 3 February 2025, 28 days after the decision in the substantive matter was received by the parties, the owners wrote to the builder, stating:
“We refer to the decision of Senior Member Ellis in this matter dated 6 January 2025.
Our clients have considered the substance of that decision and instruct us that they are minded to proceed with an application for appeal on the substantive issues. However, as a matter of practicality, they have instructed us to await the outcome of the costs decision before taking further steps to avoid incurring unnecessary additional costs.”
In a letter in reply dated 6 February 2025, the builder brought to the attention of the owners that the appeal ought to have been lodged within the period allowed by r 25 of the NCAT Rules, that there were no costs to be avoided by waiting for the costs decision and that the builder would oppose any extension of time.
We note that the Tribunal’s decision concerning the costs of the proceedings was delivered on 11 February 2025.
Ms Andronicos’ affidavit also indicates that Counsel was unavailable until 14 January 2025 and that further advice from Senior Counsel was not available until 3 February 2025.
In its submissions, the builder has reiterated the position set out in the letter to the owners of 6 February 2025. Additionally, it notes that the owners’ counsel was available from 14 January 2025 and that no sufficient reason for the delay has been offered by the owners.
In Candy Events Pty Ltd v Thrain Pty Ltd t/as Digital Solutions Group [2025] NSWSCATAP 164 (Candy Events) at [34]-[36], the Appeal Panel noted that an appellant seeking an extension of time to lodge an appeal must explain the entire period of the delay.
The owners have provided no explanation as to why they waited from 3 February 2025 to 7 March 2025 to take action to lodge a Notice of Appeal in respect of the substantive claim, other than waiting for the costs decision to be published “as a matter of practicality”. The additional costs that could have been incurred should the appeal have been filed earlier, or in time, are not identified in Ms Andronicos’ affidavit or in the owners’ letter dated 3 February 2025. The owners had access to Counsel from 14 January 2025 and Senior Counsel from 3 February 2025. Additionally, despite the owners having been put on notice by the builder on 6 February 2025 of the time limitation, and the builder’s intention to oppose any extension of time, the only reason offered for the subsequent delay is that the owners were waiting for the costs decision, for a period of time which the owners could not have known would have been only a matter of weeks, rather than months. We also note that the owners then waited until nearly four weeks had elapsed after publication of the costs decision before filing the Notice of Appeal.
The owners do not provide any explanation of what it was about the costs decision that triggered their decision to appeal, or what decision in relation to the costs of the proceedings they would have accepted as satisfactory, to the extent that they would have elected not to appeal.
We are not satisfied that the owners have provided a satisfactory reason for the delay of 32 days in lodging the Notice of Appeal.
The owners submit that, as the builder was aware the owners were considering lodging an appeal, there was no prejudice to the builder.
The builder did not directly address prejudice in its submissions, however, it has noted, at [6], that Jackson relevantly includes the following consideration in relation to the exercise of discretion to extend time:
“(b) the discretion is to be exercised in light of the fact that once the appeal period has expired, the respondent to the appeal can be thought of as having a “vested right” to retain the benefit of the decision under appeal.”
The builder also noted that the owners only achieved a minor success in the substantive claim, in financial terms, obtaining an award equal to approximately 15% of their original claim.
In Gallo v Dawson [1990] HCA 30; 64 ALJR 458 at [3], Mc Hugh J held:
“When the time for appealing has expired, the litigation is at an end; the successful party is entitled to the benefit of the judgment in his or her favour. At that stage, the successful party has a "vested right to retain the judgment". It would make a mockery of O.70, r.3 if, months after the time for appealing has expired, the unsuccessful party could obtain an extension of time on the ground that he or she had delayed appealing because that person wanted to research the issues involved. Lack of legal knowledge is a misfortune, not a privilege. Since I am firmly of the opinion that the proposed appeal of the applicant cannot possibly succeed, however, it is unnecessary to determine what conclusion I would have reached in this matter if I had thought that the appeal was arguable.”
In Candy Events at [41] the Appeal Panel noted, referring to Webb v Secretary, Department of Communities and Justice [2025] NSWCATAP 47 at [49], that exceptions to the generally strict enforcement of time limitations should be made where the interests of justice so require and meritorious cases should not be shut out due an inflexible application of rules.
We accept that granting an extension of time in which to lodge the Notice of Appeal, would prejudice the builder’s vested right to retain the benefit of the decision once the appeal period is at an end.
We note that, in this instance, the owners have failed to demonstrate a satisfactory reason for the delay in lodging the Notice of Appeal, or that the builder would face no prejudice should time be extended. In such circumstances, as the Appeal Panel stated in Jackson at [22(4)], “it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable”.
To resolve that question it is necessary to consider the grounds of appeal, and we turn to do so. We will not repeat each of the grounds of appeal before commencing consideration of each. The grounds are extracted at [28] above.
We note, before proceeding to consider the grounds of appeal, that the number of grounds of appeal, and the vagueness and lack of specific detail and references to the Appeal Book in the owners’ written submissions have had the consequence that this decision is far longer, and has taken a much greater period of time to complete, than might have been the case if the grounds of appeal and submissions had been more tightly focused.
The guiding principle of the Tribunal set out in s 36(1) of the NCAT Act is “to facilitate the just, quick and cheap resolution of the real issues in the proceedings”. Legal representatives, along with their clients, the parties, are required by s 36(3) to “cooperate with the Tribunal to give effect to the guiding principle”.
The Tribunal expects that legal representatives, who have been given leave to appear in the Tribunal and do not appear by right, will assist the Tribunal in achieving the just, quick and cheap resolution of the real issues in dispute.
There is a real question whether that expectation has been met in this case.
We also note that, although the grounds of appeal are framed so as to express questions of law, it may be questioned whether, in reality, the grounds do raise pure questions of law. Because we have concluded that no material error has been established in respect of any ground of appeal, we have not extended what is already a long decision by engaging in any assessment of the extent to which each ground does in truth raise a pure question of law.
The reasons for the Tribunal’s finding that the date of practical completion was 27 May 2022 are found at [66] – [74]. The reasons for the factual finding are at [72].
It is relevant at this point to note the definitions of ‘date of practical completion’ and ‘practical completion’ within the contract, as noted by the Tribunal at [66]:
“****‘date of practical completion’ means the date that is deemed to be the date
of practical completion under Clause 21 except where the date is determined
by dispute resolution (including litigation) the it is that date; (sic)
‘practical completion’ means when the building works are complete except
for minor omissions and defects that do not prevent the building works from
being reasonably capable of being used for their usual purpose;”
“21.1 The builder must give the owner a notice of practical completion at least 5 working days prior to practical completion being reached.
21.2 The notice of practical completion is to:
(a) state the builder’s assessment of the date of practical completion;
(b) state the date and time for the owner to meet the builder on site to carry out an inspection of the building works; and
(c) have attached the builder’s final progress claim.
21.3 The owner must meet the builder on the site for the inspection at the date and time stated by the builder in the notice of practical completion or at a date and time otherwise agreed with the builder and either:
(a) pay the amount of the final progress claim; or
(b) if the owner believes that the building works have not reach practical completion give the builder a written notice detailing anything to be done to reach practical completion.
21.4 If the owner pays the amount of the final progress claim under subclause 21.3(a) the date of practical completion stated in the notice of practical completion is deemed to be the date of practical completion.
21.5 If the owner gives the builder a notice under sub-clause 21.3(b) of the work to be completed:
(a) the builder must carry out any work required for practical completion and give the owner a further notice of practical completion;
(b) if the builder does not agree that there is any further work to be carried out to reach practical completion the builder;
(i) must give the owner written notice rejecting the owner’s notice. In this case, such a notice will also serve as notice of the matters in dispute for the purposes of Clause 35;
(ii) is not obliged to carry out any further work on the site while the dispute remains unresolved.
21.6 If the owner does not pay the amount of the final progress claim under sub-clause 21.3(a) or give the builder a notice under sub-clause 21.3(b);
(a) the amount of the final progress claim is deemed to be a debt due and owing from the owner to the builder;
(b) the date of practical completion stated in the notice of practical completion is deemed to be the date of practical completion; and
(c) the owner acknowledges the building works have reached practical completion.
21.7 On the owner paying the final progress claim, the builder must give the keys, certificates, warranty documentation and other documents pertaining to the building works to the owner.”
The owners challenged the Tribunal’s finding that the builder had in fact achieved practical completion by 27 May 2022 on the basis that the Tribunal’s findings of fact related to the state of completion of the “house” rather than the “building works”. The owners submitted that the Tribunal erred in considering the state of completion of the ‘house’ rather than the ‘building works’, thereby failing to take into account relevant considerations, and taking into account irrelevant considerations.
The owners contended that ‘house’ and ‘building works’ do not have the same meaning, that words in a contract should be given their ordinary and natural meaning and that it is only in rare circumstances that the meaning may be extended beyond the obvious definition. The owners say that the words ‘building works’ and ‘house’ have different ordinary or natural meanings. The owners also contend that where a technical meaning of a word is within the contract, it should be the preferred meaning. Further, the owners contend that, by substituting the word ‘house’ for ‘building works’ when considering the contractual provisions in clause 21 of the contract, the Tribunal failed to apply that clause correctly.
At this point it is relevant to note the definition of ‘building works’ in clause 1 of the contract:
“‘b****uilding works’ means the building works to be carried out, completed and handed over to the owner in accordance with this contract as shown in the contract documents and includes variations.”
“Dwelling
The building works are described in detail in the plans and specifications.”
“Noun 1. A place of residence or abode; a house.” (emphasis added)
The owners submitted that the adoption of words that do not appear in the contract is an error of law. The owners relied, as authority for that proposition, on Code**lfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 352.
The builder contended that the language used by the Tribunal is the ordinary meaning of the contractual terms. The builder cited the statement of Lord Bingham in Bank of Credit and Commerce International SA v Ali [2001] 1 AC 251, at [8]:
“In construing this provision, as any other contractual provision, the object of the court is to give effect to what the contracting parties intended. To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties' relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties' intentions the court does not of course inquire into the parties' subjective states of mind but makes an objective judgment based on the materials already identified.”
We do not accept the owners’ submission regarding the construction of the definition of ‘practical completion’. Because ‘building works’ under the contract is defined in Schedule 4 as ‘dwelling’, and the ordinary meaning of ‘dwelling’ includes a ‘house’, there is no contradiction or misconstruction of the contract in the Tribunal’s use of the word ‘house’, rather than ‘dwelling’ or ‘building works’ in its discussion of whether the builder had achieved practical completion.
We are not persuaded that the scope of ‘building works’ should exclude any matter falling within the definition in the contract. We accept that the definition refers to the whole plans and specifications, including variations.
The owners also challenged the Tribunal’s finding that the builder had in fact achieved practical completion by 27 May 2022 on the basis that the Tribunal only considered two rooms and not the full building works when considering, at [72], whether the building works were able to be reasonably used for their usual purpose. The builder disputes this contention. It is not clear to us how the owners submit that this submission raises a question of law.
The Tribunal found, at [64(30)] (see [8] above), that the builder installed a new roof between 25 and 28 July 2022. The Tribunal considered whether the replacement of the roof prevented the area from which the roof was removed being “reasonably capable of being used for [its] usual purpose”, ie residential occupation. The Tribunal concluded, at [72(6)], that the removal of the roof did not prevent living under the roof, as the roof could be protected with tarpaulins if rain occurred while the roof was removed.
The Tribunal noted, at [72(1)], that photographs taken by Mr Kidd (the builder’s Special Projects, Warranty and WHS Manager) on 5 and 9 May 2022 demonstrated the state of the house at the time. The owners submit that these photographs did not contain sufficient detail to demonstrate the state of the entire building works. However, the owners do not identify other evidence of the state of the building at the time that the Tribunal failed to consider.
The Tribunal considered the matters raised by the owners in their emails of 19 April 2022 and 19 May 2022 and concluded, at [72(2)-(3)], that none of those matters prevented the house from being reasonably capable of being used for its usual purpose.
The Tribunal held, at [72(5)], that the issue of the occupation certificate was not relevant to the date of practical completion as the builder was not responsible under the contract for obtaining an occupation certificate and the certifier’s email of 19 September 2022 (referred to at [64(35)], see [8] above) only identified minor items which remained for the builder.
Finally, at [72(4)], the Tribunal rejected the submission that the definition of “major defect” in s 18E(4) of the HB Act was relevant to the question whether practical completion had been achieved.
It is clear that the matters considered by the Tribunal at [72] extend well beyond the limitation of the use of two living spaces as contended by the owners.
The owners contend that there was no evidence given that the rooms left exposed by the removal of the roof would be protected by tarpaulins while the roof was removed. However, the transcript records both Mr Hodge (the manager of the roofing subcontractor) and Mr Phillips (the builder’s construction manager) indicating on a number of occasions that during the replacement of the roof, tarpaulins would be used to protect the roof. Mr Hodge also gave evidence that the remainder of the roof is sealed, not exposed, except where the sheeting is removed, which area is covered by a tarpaulin.
The owners submitted that the statement by the Tribunal at [72(6)] that the roof was installed between 25 and 28 July 2022 was an error, on the basis that the witnesses were in agreement that it would take up to four weeks to replace the roof, allowing for inclement weather. Although the builder agrees that the evidence was that the installation could take four weeks, the builder contends that it would make no material difference to the decision if the Tribunal’s finding (which reflects the finding at [64(31)], see [8] above) was incorrect.
The affidavit of Mr Kidd dated 16 August 2024 at paragraph [40] states:
“…The new roof was done over a short period, between 25 July and 28 July 2022, and would not have required the Homeowners to move out of the property.”
We were not taken to any part of the transcript, or contradictory evidence, directly addressing when the roof was actually replaced, rather than speculation about approximate time periods to complete works, and the effect of inclement weather on those works. It is clear from the transcript that the questions and answers concerning this issue related to the anticipated time the roof replacement would take, not the actual time it did take.
We are not persuaded the Tribunal made an error at [72(6)] when referring to the affidavit of Mr Kidd dated 16 August 2024 at paragraph [40]. We are also not persuaded it was not reasonably open to the Tribunal to accept this evidence.
For the reasons set out above, we are not persuaded that the Tribunal made an error, on a question of law or otherwise, in relation to the finding that the builder had in fact achieved practical completion.
The owners contend, in relation to the contractual finding of practical completion, that clause 21.3(b) of the contract should not be interpreted so as to require strict compliance. The owners contend that the email sent on 19 May 2022 should be considered to have been compliance with clause 21.3(b), in that it was a notice detailing works to be completed before practical completion is reached.
It is convenient to repeat Clause 21.3 of the contract:
21.3 The owner must meet the builder on the site for the inspection at the date and time stated by the builder in the notice of practical completion or at a date and time otherwise agreed with the builder and either:
(a) pay the amount of the final progress claim; or
(b) if the owner believes that the building works have not reached practical completion give the builder a written notice detailing anything to be done to reach practical completion.
The builder has contended that the Tribunal’s construction of clause 21.3(b) is correct, and that an email sent on 19 May 2022 could not have been a notice sent in accordance with clause 21.3(b), as it was sent prior to the date of practical completion on the builder’s notice (26 May 2022) and prior to the inspection scheduled for 27 May 2022 as shown on the builder’s notice.
The Tribunal considered the email of 19 May 2022 at [69], albeit there are some obvious typographical errors in that the reasons refer to Mr Cavanagh sending an email on 18 May 2022 and to “cl 23.2(b)” rather than cl 21.3(b). The owners did not suggest that those errors were significant to the decision.
The Tribunal found, at [70], that the owners had “neither paid the final progress claim nor gave notice under cl 23.2(b) [sic]”. The Tribunal’s reasons for the conclusion that the email of 19 May 2022 was not a notice under cl 21.3(b) were that the email: (1) did not identify itself as a notice under 21.3(b); (2) suggested ‘there was a lot of work to be done in the next seven days’, and (3) warned that the owners intended to refuse to take possession ‘until all issues are resolved’. The Tribunal has clearly engaged with the submission that the email of 19 May 2022 was a notice under cl 21.3(b) and has given reasons for not finding that the email was such a notice.
The builder has submitted that the interpretation of cl 21 as requiring strict compliance, applied by the Tribunal, is consistent with the Appeal Panel’s interpretation of the same clause in Wells Group Pty Ltd v Betts [2025] NSWCATAP 70 (Wells Group), at [60]-[63]. The owners have not cited any authority in support of their position.
We are not persuaded that the Tribunal erred in its interpretation of cl 21. The Appeal Panel in Wells Group was concerned with the requirements of cl 21.1 and 21.2. It stated, at [61(3)]:
“(3) the requirement for strict compliance is indicated by the word “must” in clause 21.1 as well as the importance of the date of practical completion in the building contract:
(a) it is the date of commencement of the defects liability period of 13 weeks as specified in clause 24.1;
(b) the observance of the time stipulation of at least five working days prior to practical completion being reached is important to give the owner an opportunity to prepare a written notice detailing anything to be date to reach practical completion within clause 21.3(b).”
Those matters are also relevant to the construction of cl 21.3. The clause requires that the owner “must” meet the builder on site and make one of the alternative responses. The importance of the date of practical completion is no less in relation to cl 21.3.
The owners also contend that the Tribunal failed to engage with their submission that the finding of deemed practical completion when the owners have not issued a formal notice under cl 21.3(b), even when they may have informally notified the builder of their non-acceptance of practical completion, would effectively allow the builder to contract out of the HB Act warranties.
The owners’ written submissions on this point provide no references to any pages in the Appeal Book and the owners did not in oral submissions take the Appeal Panel to any direct submission to this effect, either in the transcript of the hearing at first instance or in the written submissions made to the Tribunal at first instance.
There are several references in the transcript in which the owners asserted the existence of major defects, as defined in s 18E of the HB Act, as a reason why practical completion had not been reached in fact. The Tribunal addressed this erroneous conflation at [72(4)].
We are not persuaded that the owners made any specific submission to the Tribunal that the deeming of practical completion pursuant to contractual provisions effectively allows a builder to contract out of the statutory warranties under the HB Act. The date of completion of residential building work (other than a new building in a strata scheme) for the purposes of the statutory warranties (and the time periods within which the statutory warranties must be enforced) is governed by s 3B of the HB Act. Section 3B(1) provides that:
(1) The completion of residential building work occurs on the date that the work is complete within the meaning of the contract under which the work was done.
Even if, on the proper construction of that provision, “completion” means actual completion and not deemed practical completion (a question which it is not necessary for us to decide), the fact that the date of completion of residential building work for the purposes of the HB Act differs from the date of practical completion determined under the building contract would not mean that the parties had purported to contract out of the HB Act.
The warranty period within which proceedings for the enforcement of the statutory warranties must be commenced is determined pursuant to ss 3B and 18E of the HB Act. That is, from the completion of works. In this case the Tribunal found, at [33], that the owners’ claim was commenced within the warranty period. There could be no dispute about that, the claim was filed on 29 August 2022.
Thus, even if the submission was put to the Tribunal at first instance, we are not persuaded that it has any substance, and it cannot be said that the Tribunal failed to exercise its jurisdiction or failed to accord the owners procedural fairness because it did not find in the owners’ favour in relation to the date of practical completion.
We are not persuaded that the owners have demonstrated any error in relation to ground 1.
The owners’ submissions in relation to ground 2 contend that the Tribunal did not engage with the submission that the second notice of completion, dated 14 July 2022, waived the first notice of completion. The owners claim that this submission was clearly and unequivocally put to the Tribunal by the owners and not addressed by the Tribunal, resulting in a constructive failure to exercise jurisdiction.
The Tribunal addressed the second notice of completion at [73]. The Tribunal stated that it was not necessary to consider the second notice because Practical Completion had already occurred by the time that notice was issued. The Tribunal also noted that an inspection did not occur on the date nominated in the notice.
The builder contended that the owners’ submission was not clearly and unequivocally put by the owners to the Tribunal for determination. The builder noted that the point was not pleaded in the Further Amended Points of Claim and was not the subject of oral submissions before the Tribunal. The builder noted that there was a brief reference to a submission to this effect in the owners’ written outline of submissions dated 24 October 2024, but that the argument was not developed further.
The builder referred to Dranichnikov, where Gummow and Callinan JJ (with whom Hayne J agreed) held, at [24]-[25], that an administrative decision maker constructively failed to exercise jurisdiction where there was a failure to “respond to a substantial, clearly articulated argument relying upon established facts”. The builder also noted that McCallum J said in Corcoran v Far [2019] NSWSC 1284 at [64]:
“The decision in Dranichnikov is not authority for the proposition that a Tribunal will fall into legal error if it fails to refer to and engage with every argument put (whether clearly articulated or otherwise). Some discernment is required … It is not necessary to engage with every point and indeed to do so would be inimical to the overriding purpose stated in s 56 of the Civil Procedure Act (NSW).”
The owners did not provide the Appeal Panel with references to passages in the transcript of the hearing where they submit that the argument in relation to waiver was put to the to the Tribunal in oral submissions, or to clearly articulated written submissions raising the point before the Tribunal. The only reference in the owners’ submissions on the appeal was to the owners’ Amended Points of Claim.
We are not persuaded that submissions concerning waiver were clearly articulated or put to the Tribunal. Accordingly, we are not persuaded that there was a constructive failure by the Tribunal to exercise jurisdiction.
In any event, we do not consider that the owners’ submission regarding waiver has merit. The submission is that the builder waived the first notice of completion, or the deemed practical completion which had occurred by virtue of the owners’ failure to serve notice pursuant to cl 21.3(b), by issuing a further notice of practical completion dated 14 July 2022.
The owners cited Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57 (Gardiner) at [147] in support of their submission. That reference is as follows:
“[147] The existence of a ‘waiver’ will depend upon the facts and circumstances that produce a representation or conduct that is ‘clear and unequivocal’. It involves ascertaining the ‘conscious intention’ of the waiving party, in this case, of the Indemnifier. As the party potentially liable upon the indemnity, it is essential to consider the conduct of the Indemnifier to establish a ‘waiver’. The onus is upon the Borrower, as ‘the party relying’ on the waiver, to prove the necessary facts. Critically, here the Borrower must show that it would be manifestly unfair for the Indemnifier to rely on the Borrower's failure to pay ‘punctually’ as demonstrating that the indemnity agreement was not ‘effective and enforceable’.” [Footnotes omitted]
It may be noted that that passage is from the judgment of Kirby J and that the leading judgment in the case was delivered by Gummow, Hayne and Kiefel JJ, with whom Heydon J agreed.
The passage cited by the owners was his Honour’s application of the proposition outlined at [144]-[145].
“[144] … I am inclined to accept that a party may unilaterally release or abandon a right and be held to such a ‘waiver’ beyond instances of contractual variation, estoppel and election. In my view, ‘waiver’ certainly extends beyond the very particular circumstance of an indication of non-reliance on a statute of limitations.
[145] However, for the doctrine of ‘waiver’ to find a sure footing amongst the categories of legal relief, the circumstances of the ‘waiver’ must be clear in the first place. To be binding, the parties must be subject to no relevant disability or disadvantage. Further, as to the parties to, and the circumstances of, the ‘waiver’, the facts must be such that it would be manifestly unfair for the party which had earlier waived its legal rights later to adopt an inconsistent position and to seek to enforce them. Cases of estoppel and binding election are the clearest examples of such a manifest unfairness. However, I would accept a residual category of manifest unfairness at common law that is distinct from estoppel and election. The law will provide relief by upholding a ‘waiver’ in circumstances where not to do so would be manifestly unfair to the beneficiary of the ‘waiver’.”
“53 …Gummow, Hayne and Keifel JJ, with whom on these matters Heydon J agreed, did not encourage the idea that there is a residual category of waiver based on principles of unfairness (at [98]–[100]). Whilst their Honours dealt with arguments of waiver based on forbearance and renunciation, I do not understand their Honours’ reasoning to provide support for there being separate categories of waiver in the contractual context independent of estoppel, contractual variation, or election between inconsistent rights or remedies (see at [84], [87], [95], [96]). Rather, their Honours dealt with the cases relied upon by counsel for the respondent as describing waiver by forbearance or renunciation as cases concerned only with issues of damages (at [80]–[82]), or estoppel (at [83], [86]) or variation (at [86], [87])….”
“[141] Whether waiver should continue to be recognised as a distinct legal doctrine in Australia was touched on in Agricultural and Rural Finance Pty Ltd v Gardiner . …, Gummow, Hayne and Kiefel JJ found it ‘unnecessary to determine whether such a residual category or general principle exists in the common law of Australia’ . Kirby J alone was prepared to acknowledge waiver as a distinct doctrine having an operation beyond instances of contractual variation, estoppel and election. Professor Carter subsequently observed that ‘[i]t remains an open question whether the law recognises the unilateral disclaimer of a right as binding independently of agreement, election or estoppel’.”
“[W]aiver requires an unequivocal decision by a party, communicated to the other party, not to insist upon a right or not to exercise a power”.
The owners’ submissions do not provide any explanation of how the second notice of completion is supposed to have constituted clear and unequivocal conduct or a representation that the builder no longer relied upon the first notice. The owners’ submission that “The second notice has the effect of removing the legal effect of the first notice – as a matter of law” is clearly incorrect. As the authorities referred to above, including the passage from Gardiner cited by the owners, indicate, waiver, in all of the senses in which that term is used, involves questions of fact.
We were not taken to any evidence concerning the builder’s intention in issuing the second notice, nor were we taken to any evidence addressing why it was unfair to the owners that the builder relied upon the first notice despite having issued a second notice.
We are not persuaded the owners have demonstrated any error in relation to ground 2.
“58 Consistent with what was said by McHugh J in Fox v Percy [2003] HCA 22 at [30-31], the Tribunal considers it preferable to base its conclusions on contemporary materials, objectively established facts, and the apparent logic of events, rather than resort to an assessment of demeanour.
59 The issues in these proceedings are largely determined by the contemporaneous documents. However, there were disputed conversations, notably between the evidence of Mr Cavanagh and Mr Phillips (such as A831 at [13] cf A2168 at [20] and A832 at [15] cf A2168 at [32]) and between the evidence of Mr Cavanagh and Mr Kidd (such as A1294 at [30] cf A2550 at [42]) and A1294 at [33] and A2550 at [42]). A consideration of the contemporaneous documents does not favour preferring the evidence of Mr Cavanagh, even allowing for the self-serving notes he said he took, and his alleged conversation on 26 May 2022 (A831 at [13]) is an example of that.
60 It is also noted that there was no evidence from Mrs Cavanagh despite her said to have been present when some of the alleged conversations occurred. If it were necessary to prefer one version of a conversation, the Tribunal considers the evidence of Mr Phillips and Mr Kidd should be preferred to that of Mr Cavanagh.”
The owners contend that the findings of the Tribunal on the issue of credit at [59], have been applied across the entire matter including in considering the state of the works. The owners submit that those findings are based on documentary evidence only. The owners contend that the Tribunal found that Mr Cavanagh was lying about conversations and determined that, wherever a dispute arose between Mr Cavanagh’s evidence and the evidence of witnesses called by the builder, the latter’s evidence would be preferred. The owners submit that Mr Cavanagh was only cross examined for a limited time on narrow issues, and that the suggestion that he was lying about other conversations and the state of the works was never put to him. The owners submit that, in so proceeding, the Tribunal denied them procedural fairness.
The Tribunal considered the approach to be taken in the assessment of witnesses at [58], which we have set out at [130] above.
The Tribunal considered the contemporaneous documents in relation to disputed conversations between Mr Cavanagh and Mr Phillips, and Mr Cavanagh and Mr Kidd and reached the conclusion in the second sentence of [60], which we have set out at [130] above.
The builder submits in response that there is no finding that Mr Cavanagh is lying, nor did the Tribunal find that ‘all of his evidence’ was to be rejected. The Tribunal’s preference for the evidence of Mr Kidd and Mr Phillips over that of Mr Cavanagh was limited to instances where there was dispute concerning the content of conversations between Mr Cavanagh and Mr Phillips and between Mr Cavanagh and Mr Kidd. There was no blanket rejection of Mr Cavanagh’s evidence in respect of other issues.
The owners tie their ground 4 to the finding of practical completion, that is the Tribunal’s findings concerning the state of the works at relevant times. Ground 3 is not explicitly linked, either in the Amended Notice of Appeal or in the owners’ written submissions to any particular issue in the proceedings, but, in oral submissions Ms Clark, counsel for the owners, submitted that it was relied upon to challenge the Tribunal’s findings concerning practical completion and the state of the works.
In our view, the suggestion that the owners’ case regarding practical completion was dismissed on the basis of the Tribunal’s findings regarding credit, is misconceived. The Tribunal’s reasons for its decision that practical completion, that is when the building works were “complete except for minor omissions and defects that do not prevent the building works from being reasonably capable of being used for their usual purpose”, had been achieved in fact were set out at [72]:
“72 The Tribunal considers that test was satisfied as at 27 May 2022 for the
following reasons:
(1) The photos taken by Mr Kidd on 5 and 9 May 2022 … provide undeniable evidence of the state of the house at that time, noting that the builder’s [sic, obligations?] did not include matters such as driveways, landscaping, retaining walls and the swimming pool …
(2) The seven matters raised by the owners on 19 April 2022 …, to which the builder responded on 11 May 2022 … after a meeting on 2 May 2022 …, do not prevent the house from being reasonably capable of being used for its usual purpose.
(3) Likewise, the matters raised in the 19 May 2022 email from Mr Cavanagh … do not prevent the house from being reasonably capable of being used for its usual purpose.
(4) It is not appropriate to consider the definition of ‘major defect’ in s 18E(4) of the HBA when considering this issue as to do so would involve the Tribunal rewriting the terms of the parties’ contract.
(5) Any issue relating to the occupation certificate is not relevant to this issue since (a) cl 22.1 expressly provided that “The builder is not required to obtain any certificate of occupancy or final inspection certificate relating to the building works”, and (b) the 19 September 2022 email from the certifier to Mr Cavanagh … included matters which the owners had to satisfy and the matters which remained for the builder to satisfy were clearly “minor items”.
(6) Replacing the roof after 27 May 2022 did not prevent living under that roof, noting the evidence that the new roof was installed between 25 and 28 July 2022 … and the oral evidence that the roof could be protected with tarpaulins if there was rain while that work was done.” (Hearing bundle references omitted.)
None of the matters referred to by the Tribunal at [72] refer to, or rely upon, any disputed conversations between Mr Cavanagh and Mr Phillips, or between Mr Cavanagh and Mr Kidd. The Affidavit of Mr Kidd dated 16 August 2024 is referred to twice. Firstly, in respect of photographs exhibited to the Affidavit and secondly, in respect of Mr Kidd’s evidence concerning when the roof was replaced in July 2022. Neither reference involves any disputed conversation with Mr Cavanagh.
The Tribunal accepted that, by emails sent on 19 April 2022 and 19 May 2022, Mr Cavanagh alleged the existence of several defects. The Tribunal found none of the matters raised in those emails prevented the house being reasonably capable of being used for its usual purpose. In other words, the Tribunal found that none of the alleged defects were such as would prevent the achievement of practical completion. Similarly, the Tribunal accepted that the roof was required to be replaced after practical completion, but held that, in the circumstances, this did not prevent a finding that practical completion had been achieved. The owners have not pointed the Appeal Panel to any finding dependent upon the rejection of evidence from Mr Cavanagh that resulted in the owners’ claim, that practical completion had not been achieved in fact, being dismissed.
It is also clear that the Tribunal did not find that Mr Cavanagh’s evidence was to be rejected in relation to any factual dispute with the builder, as claimed by the owners. The finding was that, where it was necessary, the Tribunal would prefer Mr Kidd’s and Mr Phillips’ versions of disputed conversations with Mr Cavanagh over Mr Cavanagh’s version. We note that at least one disputed issue concerning a conversation with Mr Phillips was put to Mr Cavanagh in cross examination.
We are, accordingly, not satisfied that there has been any failure to accord procedural fairness to the owners in relation to the Tribunal’s finding concerning the credit of Mr Cavanagh.
Moreover, any failure to accord procedural fairness must be material, that is capable of affecting the decision: K**udrynski v Orange City Council [2024] NSWCA 33 at [49]; Nathanson v Minister for Home Affairs (2022) 276 CLR 80; [2022] HCA 26 at [1], [33]. For the reasons outlined above, we are not satisfied that the owners have demonstrated that any denial of procedural unfairness in relation to the finding concerning Mr Cavanagh’s credit was material, that is, capable of affecting the Tribunal’s decision in relation to the achievement of practical completion.
We are not persuaded the owners have demonstrated any error in relation to grounds 3 and 4.
“The finding that Mr Cavanagh would not be believed across all issues on the basis of the ‘documents’ and as his notes were ‘self-serving’.”
That is, the owners submit the Tribunal had not given adequate reasons for the rejection of Mr Cavanagh’s evidence in its entirety.
The owners’ written submissions include the following:
“In Lehrman Lee J applies the principles of law to findings of credit and where rejection across the board is adopted there must be reasons set out for the Tribunal of facts determining that the witness is inventing evidence as it is conscious of the negative facts it is trying to hide.”
We assume that the reference to ‘Lehrman Lee J’, is intended to be a reference to the judgment of Lee J in Lehrmann v Network Ten Pty Ltd (Trial Judgment) [2024] FCA 369; 422 ALR 507 (Lehrmann), however, the relevant parts of that decision (which contains 1098 paragraphs and, even without the appendices, extends over more than 200 pages of the Australian Law Reports) are not identified. While unrepresented parties may be excused for not understanding the appropriate way to cite precedent cases, the owners’ submissions were signed by counsel.
We note that, in Lehrmann at [136]-[138], under the heading “False in one thing does not mean false in everything”, his Honour stated:
136 Moreover, in assessing whether one has reached a state of reasonable satisfaction in making a finding of fact, it is jejune [ie unsatisfactory] to proceed on the basis that rejecting part of an account of a witness of an event must mean one must reject all aspects of the account of the witness.
137 Consistently with ordinary human experience, some witnesses may misremember or lie about some things but tell the truth about others. Despite my concerns about the truthfulness of both Mr Lehrmann and Ms Higgins, it would be simplistic to proceed on the basis this means I must reject everything they say. As the Full Court (McKerracher, Robertson and Lee JJ) explained in CCL Secure Pty Ltd v Berry [2019] FCAFC 81 (at [94]):
It has been a long time since the maxim falsus in uno, falsus in omnibus (false in one thing, false in everything) was part of the common law, its broad applicability having been rejected long ago (including by no less a judge than Lord Ellenborough CJ in R v Teal (1809) 11 East 307 103 ER 1022). It is trite that the tribunal of fact (be it a judge or jury), having seen and heard the witness, is to decide whether the evidence of the witness is worthy of acceptance and this may involve accepting or rejecting the whole of the evidence, or accepting some of the evidence and rejecting the rest: Cubillo v Commonwealth (2000) 103 FCR 1 174 ALR 97; [2000] FCA 1084 at [118]–[123]; Flint v Lowe (1995) 22 MVR 1; and S v M (1984) 36 SASR 316. It is for this reason a jury is directed that they may accept some parts of a witness’s evidence, but not other parts: Dublin, Wicklow and Wexford Rail Co v Slattery (1878) 3 App Cas 1155. This reflects the accumulated wisdom and experience of the common law that witnesses may lie about some things and yet tell the truth about others, and the tribunal hearing the evidence is best placed to fix upon the truth. …
138 Another Full Court (Wigney, Wheelahan and Abraham JJ) in Kazal v Thunder Studios Inc (California) (2023) 416 ALR 24; [2023] FCAFC 174 recently made the same point (at [272]) as follows:
… People sometimes tell lies when giving evidence. What is significant is not the mere fact of the untruthfulness, but its relevance to the issues in dispute. A finding that a witness has lied about a matter need not lead to the rejection of all of the evidence of that witness, but may affect the degree of satisfaction of the existence or otherwise of a fact in issue to which the witness’s evidence was directed. …
“ … Depending on the circumstances, when a party lies, or destroys or conceals evidence, or attempts to destroy or conceal evidence, or suborns witnesses, or calls testimony known to be false, or fails to comply with court orders for the production of evidence (like subpoenas or orders to answer interrogatories), or misleads persons in authority about who the party is, or flees, the conduct can be variously described as an implied admission or circumstantial evidence permitting an adverse inference. The position must be the same where there is a failure of a party-witness to comply with the duty of a witness to tell the whole truth. …”
We are unable to discern any other relevance of the decision of Lee J. With due respect to counsel for the owners, it is trite that adequate reasons should be provided for a finding that a witness should not be believed, but we see no inadequacy in reasons which indicate, at [58], that the Tribunal based its conclusions on contemporary materials, objectively established facts, and the apparent logic of events.
We have explained above why we do not consider that the Tribunal relied in any degree on findings concerning Mr Cavanagh’s credit in reaching the conclusion that the builder had achieved practical completion in fact, by 27 May 2022. The owners’ submissions do not point to any other finding by the Tribunal which depends upon the rejection of evidence from Mr Cavanagh. It is, accordingly, not necessary for us to consider whether a failure to provide adequate reasons for a finding concerning the credit of a witness would constitute an error with respect to a question of law.
We are not persuaded that the owners have demonstrated any error in relation to ground 5.
The owners contend that they made clear and unequivocal submissions to the Tribunal that the builder made admissions that the roof replaced in July 2022 was defective and required a further full replacement. The owners contend that the Tribunal failed to consider these submissions, thereby erring by constructively failing to exercise jurisdiction.
The owners’ counsel in her oral submissions identified a passage in the transcript (page 2926 of the Appeal Book), which the owners submitted contained the relevant admissions. The exchanges there recorded clearly relate to a draft deed sent by the builder to Mr Cavanagh on 10 June 2022. There is in that evidence an acceptance that there had been defective roof insulation, the rectification of which required the removal of the roof sheeting to replace the insulation. The evidence was given by Mr Hodge, the operations manager of the original roofing contractor, Dynamic Bradview Roofing Pty Ltd. The evidence clearly refers to the state of the roof prior to the removal and reinstallation of the roof in July 2022.
The owners’ counsel also referred the Appeal Panel to what they submitted were four separate concessions made by Mr Phillips, the builder’s construction manager, in relation to the hydraulic engineering for the roof (Appeal Book pp 2971, 2973, 2975 and 2977). Those “concessions” partly related to the same issue, that is that the roof sheeting needed to be removed to access the defective insulation, and otherwise related to the width of the gutters and the placement, size and location of downpipes. Again, it is clear from the context that Mr Phillips’ answers related to the state of the roof before the work of removing and replacing the roof was carried out in July 2022.
The submissions made at first instance, to which the owners referred the Appeal Panel, also related to the agreement by the builder to undertake the roof replacement which occurred in July 2022. (Appeal Book p 3114)
None of the references provided by the owners noted above relate to any alleged defect with the roof re-installed in July 2022. All refer to the reasons why the roof was re-installed in July 2022. We note that none of this material bears any relationship to the issue raised by the owners’ appeal ground 6, which refers to “open correspondence from the solicitors for the Respondent” and to “a scope of rectification works prepared by the Respondent and served on the Applicants”.
To the extent that the owners’ written submissions on the appeal deal with those documents, they refer to pages within the transcript that include page 3123 of the Appeal Book. The oral submissions on behalf of the owners there recorded refer to the list of 143 defects that the owners’ solicitor sent to the builder’s solicitor on 11 July 2023 in the form of a notice of dispute, and the builder’s response dated 24 July 2023. These documents are noted by the Tribunal in the findings of fact at [64].
In the course of cross examination of Mr Phillips, the owners’ counsel referred him to the response document dated 24 July 2023. Mr Phillips agreed that the builder had offered, in that document, to replace the roof that had been installed in July 2022 (Appeal Book p 2993). The Tribunal noted this at [30].
The builder acknowledges sending the document dated 24 July 2023. However, the builder refers to the terms of the offer made in respect of the roof in that document. In respect of items 52, 53, 78-84, 96 and 98 in the table attached to the document dated 24 July 2023, the builder stated, in a column headed “MH Comment”:
“In the interest of good will & keeping the client happy, builder to re-scaffold entire house, remove all colorbond roofing, hips, battens, insulation, reinstall new roofing, hips & heavy weight sarking/insulation.”
“[I]n addition to the items which our client agrees are defective and require rectification, our client is willing to rectify (and has, in some cases, already rectified) some items which it does not accept as being defective. Our client does not differentiate between those items in this letter, or the enclosures.”
The owners submit that the builder made an admission that the roof was defective. In our view, the document relied upon as the admission does not admit the existence of any defect but rather offers that works will be undertaken “In the interest of good will & keeping the client happy…”. The covering letter explicitly indicated that the inclusion of any item in the list of items which the builder offered to rectify did not indicate that the builder accepted that it was defective. Ultimately, the owners rejected the builder’s proposal to address the owners’ defect list.
An admission by one party to proceedings in the Tribunal may be received as and relied upon as evidence of the fact admitted: Ross v New South Wales Land and Housing Corporation [2016] NSWCATAP at [63]-[64]; and see also EFC Constructions Pty Limited v Malik [2025] NSWCATAP 219 at [83]-[84].
The owners’ submissions referred to s 87 of the Evidence Act 1995 (NSW), but reliance on that provision is both unnecessary, in that the Tribunal is not generally bound by the rules of evidence: NCAT Act s 38(2), and misconceived, insofar as the material relied upon by the owners as constituting an admission that the roof was defective after its re-installation in July 2022, does not in fact amount to such an admission.
Even if the Tribunal failed to consider the submission by the owners that the builder made an admission that the roof installed in July 2022 was defective and must be replaced, we are not persuaded the failure was material, given the owners’ failure to demonstrate that any such admission was made.
We are not persuaded the owners have demonstrated any error in relation to ground 6.
The owners contend that the Tribunal failed to provide adequate reasons for its rejection, as inadmissible, of the supplementary evidence of Mr Zakos in relation to the roof replacement. The owners contend that the rejection was solely based on the application of the conditions of admissibility laid down in Makit**a (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305 (Makita) and that no other reasons were provided and no analysis was given to the weight that may have attached to the evidence.
The conditions of admissibility laid down in Makita, and their application in the Tribunal were explained by the Appeal Panel in My Fashion Republic Pty Ltd t/as Cosette v Ho [2024] NSWCATAP 191, at [26]-[28]:
“26 … An expert witness is permitted to give opinion evidence. However, there are matters the Tribunal needs to consider when deciding what weight to give to that evidence. The first is whether the expert has qualifications and/or experience in the relevant field.
27 Secondly, the decisions such as Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 (Makita) make it clear that, for such evidence to be accepted, the following considerations apply: (1) the expert’s opinion must clearly indicate the facts upon which it is based, (2) those facts must be proved so there is a factual basis for the opinion, (3) the reasons or the process of reasoning for the opinion must be disclosed, and (4) any opinion must fall within the qualifications and experience of the expert.
28 While Makita was considering admissibility in proceedings in a court, it is well-established that the same considerations go to the weight to be given to expert evidence in proceedings in a forum where the rules of evidence do not apply, such as the Tribunal: South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16; Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11.”
“I have reviewed my rectification methodology and the new cost of making good is $44,3921.25. Refer to Annexure A to this Report for the details of the revised methodology and costing.”
“This item and increased cost was not discussed during the conclave and only appeared in the first draft of the Joint Report.
I disagree that the new cost of Zakos can reasonably be substantiated.”
Mr Roberts accepted what he stated was “the original agreed cost of $1,578 for any repairs that might be found to be necessary at the batten junctions.”
The Tribunal addressed the claim for a roof replacement at [272]-[288]. The Tribunal provided six reasons why it concluded that the owners had failed to demonstrate that the roof required replacement. Those reasons were:
The Tribunal’s Procedural Direction 3 Expert Evidence requires that:
“22. If an expert witness changes his or her opinion on a material matter after providing a report, the expert witness must immediately provide a supplementary report to that effect containing the information referred to in subparagraphs (c) to (f) and (h) to (l) of paragraph 19, and, if applicable, subparagraph (g) of paragraph 19.”
The information referred to in those subparagraphs of paragraph 19 included, among other things:
“(e) the material facts, and assumptions of fact, on which the opinions in the report are based (a letter of instructions may be annexed);
(f) the expert’s reasons for each opinion expressed;
…
(h) any literature or other materials used in support of the opinions;
(i) any examinations, tests or other investigations on which the expert has relied, including details of the qualifications of the person who carried them out;
(j) the extent to which any opinion which the expert has expressed involves the acceptance of another person’s opinion, the identification of that other person and the opinion expressed by that other person;
(k) a declaration that the expert has made all the inquiries which the expert believes are desirable and appropriate (save for any matters identified explicitly in the report), and that no matters of significance which the expert regards as relevant have, to the knowledge of the expert, been withheld from the Tribunal;”
The Tribunal noted that “[i]n contrast to what is required”, Mr Zakos had only made the statement set out at [168] above.
“[T]there is only an expression of opinion without any reason(s) or process of reasoning to explain the basis for that opinion. In simple terms, Mr Zakos said no more than that he had changed his mind which leaves open the question of why he did so.”
The Tribunal further noted:
“Given the number of occasions where, in his report …, Mr Zakos based his opinion on what he had been “verbally instructed by the owner”, that potential explanation for the change has not been excluded. Contrary to the submission for the owners that Mr Roberts was a partisan expert, that criticism appears to be more appropriate for Mr Zakos.”
“It is not sufficient just to allege there is a defect and then expect the suggested cost of rectification to be awarded. There needs to be:
(1) observation evidence of the work in question,
(2) an opinion as to why there has been defective work,
(3) one or more reasons or a process of reasoning to explain the link between the opinion and the evidence upon which it is based,
(4) details of the proposed method of rectification,
(5) that method must be either necessary or, at least, reasonable,
(6) evidence of the contended cost of rectification, and
(7) that cost must be reasonable.”
The Tribunal noted, at [281], that Mr Zakos’ supplementary report partially addressed five of the seven requirements, but it did not address the fifth or seventh and did not sufficiently address the remainder.
The Tribunal accepted Mr Hodge’s evidence and also noted, at [287], that “there [did] not appear to be evidence to satisfy the Tribunal that the method of rectification for the amended claim for [the roof] was either necessary or reasonable”.
The builder submitted that the owners’ submission that the Tribunal had rejected Mr Zakos’ supplementary report without giving adequate reasons was incorrect. The builder submitted that the Tribunal had not found that Mr Zakos’ supplementary report was inadmissible and that, in fact, Mr Zakos supplementary report had been admitted. The builder noted that the Tribunal had set out and explained in detail six reasons why the owners’ claim that the roof required replacement could not be accepted and further noted that the owners’ submissions do not identify why the Tribunal’s reasoning was said to be inadequate.
In our view the Tribunal’s reasoning concerning the owners’ claim for the cost of the replacement of the roof was more than adequate. The Tribunal found that, in a number of respects, the only evidence put forward to support that claim was insufficient. The owners’ submissions mischaracterise the Tribunal’s reasoning. The Makita requirements for expert evidence are not mere technical rules of evidence. They are, as Heydon JA explained in Makita, at [85], necessary in order that evidence of an expert’s opinion can be seen to be more than “a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise”.
The Tribunal was correct to accord diminished weight to Mr Zakos’ supplementary report by reason of his failure to comply with Procedural Direction 3 and the Makita requirements. It is, accordingly, not necessary for us to consider whether a failure to provide adequate reasons for rejecting evidence would constitute an error with respect to a question of law
We are not persuaded that the owners have demonstrated any error in relation to ground 7.
“In short, a breach of an Australian Standard will not amount to a breach of s18B(1)(c) unless that compliance with that standard is required by the BCA.”
That passage was part of the Tribunal’s consideration of whether the builder had breached the statutory warranties in s 18B(a) and (c) of the HB Act in relation to item 28, which related to the paintwork on steel columns.
The owners submitted that s 18B(1)(b) of the HB Act provides a statutory warranty “for compliance with the contract, including all documents referenced therein” and that “a contractual reference to an Australian Standard will attract the contractual requirement to comply with that standard”.
The owners submitted that, because the contract “referenced various manufacturing guides, including ‘Taubmans Paint’ and that document “contained the Australian Standards”. The owners also submitted that the specifications also “referenced” Plasterboard “albeit with some contention as to the provenance of those specifications” and that they had put in issue before the Tribunal that “the reference in those documents to Australian Standards also attracted the requirement to comply”.
The owners contend the Tribunal asked the wrong question “with regards to paint and plasterboard application”, the contract required compliance with the Australian Standards. The owners assert that the Tribunal “found that the question to answer was the effect of (ambient) light” and that that was not correct because “the Australian Standards do not allow for defects to be visible in certain light situations”.
The owners did not, in their Notice of Appeal, their written submissions, or at the hearing, identify the relevant parts of the decision to which these grounds of appeal are addressed. It appears that they relate to Item 38, addressed by the Tribunal at [161]-[167], and Item 57, addressed at [197]-[203]. The owners’ written submissions indicate that “Appeal Book page numbers will be provided” both in respect of the Taubmans Paint manufacturing guide and the “ambient light” issue. No such references were provided. The Appeal Panel has not sought to identify where in a 3,242 page Appeal Book those documents might be found. For reasons which follow, we do not consider that our inability to identify the documents to which the owners’ submissions refer could affect the outcome of these grounds of appeal.
The builder’s submissions referred to the whole of [146], which followed the statement, in [145] that the applicable principles “[o]n the question whether a breach of an Australian Standard establishes a breach of the statutory warranties” were summarised in Deacon v National Strategic Constructions Pty Ltd [2017] NSWCATAP 185 (Deacon), at [46], which the Tribunal set out. The full text of [146] of the Tribunal’s decision is as follows:
“In short, a breach of an Australian Standard will not amount to a breach of s 18B(1)(c) unless that compliance with that standard is required by the BCA. However, a failure to comply with an Australian Standard may support for a breach of s 18B(1)(a). Any consideration of such an issue obviously needs to bear in mind the wording of the relevant provision in that Australian Standard, which may be prescriptive, requiring compliance, or descriptive, being only advisory. Also, whether there was a contractual requirement for compliance with that Australian Standard.”
The builder submitted that the Tribunal’s interpretation of s 18B(1) of the HB Act is consistent with the established principles identified in Deacon. The builder pointed out that the warranty implied by s 18B(1)(b) requires that materials supplied by a builder be good and suitable for the purpose for which they are used. It appears that the reference to s 18B(1)(b) is an error and that the paragraph intended to be referred to is s 18B(1)(a), which requires that work be done “with due care and skill and in accordance with the plans and specifications set out in the contract” (emphasis added).
The builder also submitted that no evidence of any reference to the Australian Standards upon which the owners relied (AS2311 and AS3711) was identified in the contract or in any other document before the Tribunal.
The passage in [146], which the owners assert contains error, was directed to s 18B(1)(c). In that respect it is consistent with the established principles summarised in Deacon. The Tribunal acknowledged, in the last sentence of [146], that the contract may itself require compliance with a specified standard.
It is clear in our view that the Tribunal did not apply an incorrect interpretation of the statutory warranties implied by s 18B(a), (b) or (c).
The owners’ ground 8(b) raises the proposition that the Tribunal “fail[ed] to consider whether adoption of Australian Standards within th[e] contract between the parties resulted in the Australian Standards being applicable to the question of whether works were defective”. As we have noted above at [179], the owners rely upon references to Australian Standards in manufacturing guides referred to in the contract as making compliance with those Standards a contractual requirement. Such a submission requires more than a general reference to the manufacturing guides. To establish that the guides make compliance with an Australian Standard a contractual requirement, it would be necessary to refer to specific terms of the contract which incorporate the guides as part of the contractual specifications and to the particular parts of the guides which require compliance with the relevant standard.
The owners have not referred the Appeal Panel to any such submission made to the Tribunal. The Tribunal cannot be said to have erred in failing to consider a submission which, as far as the owners’ submissions to the Appeal Panel have disclosed, was no more than an unparticularised assertion that a guide referred to a particular standard.
Ground 9 asserts that the Tribunal erred in assessing the builder’s work by reference to the “HIA guide” which is said not to have been applicable. The owners made no direct reference to this ground in their written submissions. The Tribunal held, at [162], that cl 18 of the General Conditions made the HIA Guide applicable. In the absence of any explanation from the owners as to why this finding may have been incorrect, we need not consider this ground further.
We are not persuaded the owners have demonstrated any error in relation to grounds 8 and 9 or in relation to the Tribunal’s assessment of painting and plasterboard.
By ground 10 the owners assert that the Tribunal misapplied the decision of Ward J in The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612 (Kell & Rigby)**. The Tribunal referred to that decision in the course of assessing three alleged defects, Items 2, 38 and 88.
In addressing Item 2, which related to the failure to remove mortar debris before applying “the Moroka finish”, the Tribunal recorded that Mr Zakos had identified four locations where this issue existed and that he had suggested in oral evidence that “his four photos were sample locations and that all elevations were affected. The Tribunal held, at [96]:
“It does not follow from the specification of four locations by Mr Zakos in the body of his report that there are numerous other locations: The Owners – Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612 (Kell & Rigby) at [167]-[191]. If it was the case that the issue detected by Mr Zakos applied more broadly than those four locations, he should have so indicated in his report and not sought to refer to numerous photos for the first time during cross- examination.”
“Item 38 raised the issue of the painting of “doors/architraves/skirting” …, relying on what appears in section C4 of AS3711:2017. Mr Zakos referred to six photos but, when cross-examined, suggested this issue was present “throughout the house”. Despite delving into matters of detail in his report, such as the $35 claim for item 39, Mr Zakos failed to provide details in relation to this substantial claim for $3,131. Adopting what was said in Kell & Rigby at [167]- [191], that is not sufficient to prove any more than what was shown in the photos provided by Mr Zakos. Mr Roberts took the view that the HIA Guide applied, accepted there was minor lipping of paint, and noted that Mr Zakos had not provided details of the specific locations to which he was referring. ….”
“The evidence of Mr Zakos was that the roof sheeting is scratched “in several locations”, coupled with another verbal instruction that those scratches have been present since construction. Although he provided only four photos …, his cost of rectification allowed for the replacement of ten sheets.
The Tribunal accepted that the evidence showed there were four scratches and that they had been caused by the builder. The Tribunal awarded compensation accordingly, that is it allowed the cost of replacing four roof sheets. It stated, at [265], that in doing so it was “applying what was said in Kell & Rigby”.
In their written submissions, the owners contend that the Tribunal rejected Mr Zakos’ evidence as it determined that Mr Zakos “had not met the requirements set down by Ward J in Kell & Rigby”.
The owners submitted that Kell & Rigby “has been read down significantly”. Their written submissions cite the judgment of Ball J in The Owners Strata Plan No 66375 v Suncorp Metway Insurance Ltd (No 2) [2017] NSWSC 739 (Suncorp Metway) at [80]. His Honour there pointed out that:
“Ward J is not to be understood as stating a principle of law in Kell & Rigby. The point made by her Honour is simply that on the facts of that case, she was not satisfied that it could be inferred from the evidence that the identified defect was present in all bathrooms, including those that had not been examined.”
The owners contend that the Tribunal erred in failing to address the question whether paintwork was a systemic defect or whether evidence of all areas of painting is required before an expert’s opinion that the work does not comply can be accepted.
The builder submitted that no argument was made before the Tribunal that any paint defects were systemic in nature. It further contended that, at [161], the Tribunal “properly” took from Kell & Rigby that “the only evidence of the alleged defect existed in the four photographs” provided by Mr Zakos, and that the suggestion that the defect was more widespread could not be supported on Mr Zakos’ evidence.
The builder also submitted that the Tribunal did not reject the evidence of Mr Zakos because he “had not met the requirements set down in Kell & Rigby”, that rather, the Tribunal found:
“[T]hat in the specific circumstances of this case:
(a) it did not follow from the identification of four locations by Mr Zakos that there were numerous other instances;
(b) if the issue detected by Mr Zakos applied more broadly, he should have identified them in his report and not sought to refer to numerous photographs for the first time during cross examination; and,
(c) The defect identified in four locations by Mr Zakos had not been established in any other locations.”
It is clear, from the extracts from the Tribunal’s decision which we have set out above, that the Tribunal gave specific reasons why it did not accept that Mr Zakos’ evidence of limited examples of the particular defects warranted the Tribunal drawing the inference that those defects were widespread throughout the relevant element of the building work.
As the Tribunal noted, Mr Zakos had “delved into matters of detail” in other aspects of his report. The Tribunal cannot be said to have made an error (of law or fact) in failing to be satisfied that evidence of specific defects in four or six locations across a broad area was sufficient to establish that the defect was present in more than those locations.
In Suncorp Metway, at [81], Ball J accepted that, in circumstances where a builder had been shown to have used a waterproofing product other than that specified in the tender documents forming part of the contract in a number of bathrooms “[t]he high likelihood is that that defect existed with all bathrooms and ensuites” because the membrane was not adequate and “[i]t is highly unlikely that different membranes would have been laid in different bathrooms and ensuites”.
By contrast, in Kell & Rigby, three bathrooms in a strata scheme of 14 lots were tested destructively (“by removal of a piece of aluminium passing under the threshold of the door to the shower” see [148]), and that testing disclosed that no waterstop had been installed. Ward J stated, at [167]:
“It seems to me that the strongest argument in favour of a finding that there were no waterstops at all installed in any of the units in the building is that it would surely be a remarkable coincidence if the three bathrooms so tested just so happened to be the only three in which no waterstop was installed. However, that inference is only possible in my view if it can be said that the reason that waterstops were not visible in those three units was because none was in fact ever installed (ie because the Builder had made a decision not to install any, say because the Builder had decided to adopt one of the alternative waterproofing measures which Mr Beard said were commonly used in high-end building construction, or because it did not consider the possibility of such installation) rather than because there had simply been poor workmanship in those three units and the waterstops had been incorrectly positioned. That is because, while there would logically seem to be no reason why a particular decision (as to installation of waterstops or not) would not have applied across all bathrooms, I am not persuaded that the fact of defective workmanship in the installation of waterstops in some bathrooms means that I could infer there was similar defective workmanship in all of them.”
As Ball J stated in Suncorp Metway, that passage does not state a proposition of law. It is a statement of a process of logical reasoning. All that the Tribunal should be seen as doing in this case, in referring to Kell & Rigby, is summarily describing a similar process of reasoning. The reasoning, simply put, is that, unless there are reasons to believe that there is a consistent underlying cause for the existence of defects in a particular area of building work, proof that there are a small number of such defects does not suffice to establish that defects of that nature are pervasive. It was not incumbent on the Tribunal to speculate as to the existence of such an underlying cause, it was for the applicants (through their expert, Mr Zakos) to identify the cause and the evidence which established that there was such a cause.
We are not persuaded that the owners have demonstrated any error in relation to ground 10.
The owners’ grounds 11, 12 and 13 relate to the alleged defect identified by the Tribunal as item 20. The owners sought $25,000 in respect of that item, which was “based on there being two downpipes connected to the rainwater gutters above the entry porch, which were said to involve work not being carried out in accordance with the contract documents”.
The Tribunal considered item 20 at [124]-[129] as follows:
“124 It is correct that the relevant plan …, dated 29 June 2021, which formed part of the contract documents, did not show those two downpipes. However, it is clear the builder obtained revised “Issued for Construction” plans, dated 6 June 2022 …, together with a “Stormwater Design Statement” prepared by an engineer … and calculations …, and that, after they were provided to the owners on 15 June 2022 …, a same day email in response … approved what the builder had proposed, saying: So as to move forward and get things moving we are happy with the calculation and number of downpipes and the locations that that are shown on attached drawings.
125 There was no reference to what was installed differing from what was shown in the June 2022 plans and on 24 April 2023 Mr Hodges issued a certificate which covered the downpipes that were installed. That certificate suggests compliance with both the Building Code of Australia (BCA) and Australian Standards.
126 In those circumstances, while there may have been what might be called a technical breach of s 18B(1)(a) of the HBA, there is no loss or damage caused by that breach since what was installed was in accordance with what was approved by the owners. Any post-installation loss or damage is the result of the owners changing their position in relation to the work they approved.
127 That outcome is consistent with cl 18 of the contract, dealing with variations, coupled with the provisions of the Electronic Transactions Act (NSW) 2000. It is also consistent with s 18F of the HBA, which provides a defence to a breach of a warranty provided by s 18B(1).
128 Even if it could be said that the issue of liability should be determined in favour of the owners in relation to this item, the evidence provided in support of the amount claimed is deficient. In his Bill of Quantities …, Mr Zakos said: Design and Works unknown, therefore a provisional sum of $25,000 has been allowed.
129 As there is neither a factual basis for that amount nor reasons provided, consistent with what was said in Makita, that opinion evidence is not accepted. (Hearing bundle references omitted).
The owners contend that “[t]he respondent made admissions in cross examination” that were not considered by the Tribunal. We note that it would be more correct to say that witnesses called by the builder made admissions. The owners submit that the Tribunal did not engage with their submissions about the admissions. The owners identified the admissions as being to the effect that:
The hydraulic design handed to the applicants was not approved under the Construction Certificate: Appeal Book pp 2942 to 2944 and 2590 to 2591;
The design plans Mr Cavanagh ‘agreed to’ marked up downpipes that were to be added as “NEW” and the two downpipes installed by the builder the subject of item 20 were not included in those marked as “NEW”: Appeal Book pp 2964 to 2969 and 1177;
The hydraulic design and the installation were not approved: Appeal Book pp 2962 to 2966, 2971 and 2973; and
The downpipes were installed at the direction of the builder’s manager without the owners’ approval: Appeal Book pp 2982 to 2988
We understand that these submissions are intended to support ground 12.
We note that the owners’ written submissions did not provide the page references for the Appeal Book but rather referred to the transcript as a stand-alone document. The Appeal Panel has endeavoured to translate the page numbers given in the owners’ written submissions to the pages in the Appeal Book.
The owners contend that:
“The respondent did not argue that there was an acceptance of a variation to the hydraulic design as a result of the Electronic Transactions Act 2000 (NSW) or that the changes to the designs were approved by the [appellants] thereby invoking a defence to defective building works under section 18F of the [HB Act].”
The owners further contend that the Tribunal found that Mr Cavanagh had agreed to the variation and did so without evidence. The owners submit that there was no evidence that Mr Cavanagh had accepted the two downpipes at the front of the premises or the size of the downpipes, or changes to the type of guttering.
The owners also contend that the Tribunal erred in finding that Mr Hodge was qualified to certify work was compliant with the approved designs, as Mr Hodge is not qualified to certify hydraulic designs and that the approval of such designs would require a modified Development Approval (DA) or a submission to the private certifier. The owners submit that these “constraints on approvals of hydraulic designs and on the capacity of the builder to require an agreement for the builder to construct unapproved work” were not addressed by the Tribunal. The owners submit that the Tribunal misconstrued the Environmental Planning and Assessment Ac**t 1979 (NSW) (EPA Act) and Regulations. [1]
We note the following in relation to the transcript references provided by the owners in their written submissions (as identified at [209] above) as establishing admissions by witnesses called by the builder:
The pages identified at [209(1)] record an exchange in cross examination between the owners’ counsel and Mr Hodge. The effect of that evidence is that Mr Hodge, as manager of the roofing contractor, had signed a certificate which certified “that the hydraulic design is compliant with the NCC [National Construction Code] and BCA [Building Code of Australia]”. Mr Hodge could not recall whether he had looked for the certifier’s stamp, and later, ie in a passage of the transcript not cited by the owners, stated that he could not recall whether he had had regard to any “approved hydraulic designs that had been approved by the certifier”.
The owners’ counsel had put to Mr Hodge that an email had been sent from Mr Kidd to Mr Cavanagh on 10 June 2022 that contained a drawing showing 17 downpipes. In cross examination about this document, Mr Hodge agreed that the drawing contained two downpipes at the front of the house marked X and Y, that there were downpipes marked as “new”, and that X and Y were not marked “new”. When asked if he had been told by the builder that that drawing “was not agreed to by the owner”, Mr Hodge responded, “I don’t recall”.
The pages identified at [209(3)] above record cross examination of Mr Phillips. They record that he acknowledged that the amended hydraulic plans were not approved by a hydraulic engineer. Mr Phillips asserted, both in the course of that cross examination and in re-examination, that there was no requirement for approval by a hydraulic engineer. Mr Phillips also stated that, in forming the view that one or two additional downpipes would be required:
“We consulted our certifier and were referred back to the National Construction Code for building standards.”
In re-examination Mr Phillips gave evidence that the point of reference for the builder when any code-related matters arise is the National Construction Code.
“But the ALW design that was sent to Mr Cavanagh with the downpipes at the front with X and Y indicated on them, that document, in that document, he didn’t agree to the two downpipes at the front. That’s correct, isn’t it?”
The Tribunal at noted at [124] that the two additional downpipes at the front of the house were not shown on the documents that formed part of the contract. The Tribunal found, however, that the owners had approved the design containing these downpipes. The Tribunal held, at [126], that the builder had breached the warranty implied by s 18B(1)(a) of the HB Act, describing it as a “technical breach”. The Tribunal concluded, however, that no loss or damage was caused by the breach, as what had been installed was in accordance with the approval of the owners.
The evidence relied upon by the owners as admissions in their favour would appear to have been considered by the Tribunal in finding the breach at [126]. The Tribunal accepted the submission that the builder failed to construct the downpipes in accordance with the plans and specifications included in the contract, in that those plans did not include the additional downpipes.
The Tribunal did not accept however, that the owners had not accepted the proposal to instal those downpipes by the email from Mr Cavanagh of 15 June 2022. The critical passage in that email, as set out by the Tribunal in the last sentence of [124] was:
“So as to move forward and get things moving we are happy with the calculation and number of downpipes and the locations that that are shown on attached drawings.”
The owners contended that the builder had not made any submission that the email was the acceptance of a variation or an instruction in writing sufficient to support a defence pursuant to s 18F of the HB Act.
The builder noted in its written submissions that it had made the submission to the Tribunal that Mr Cavanagh’s email was an acceptance of a variation. The submission put (at p 3,142 of the Appeal Book) was:
“[T]he email …, which was sent on 15 June, is clearly an instruction to the builder to effect the variation.”
The builder also submitted that the Tribunal’s reference to the Electronic Transactions Act 2000 (NSW) (ET Act) was obiter and not significant to the ultimate decision. The builder referred to cl 23 of the contract which authorises the service of notices by email, independently of any statutory authority, and submitted that any procedural unfairness arising through the owners not having had an opportunity to address the ET Act had no material impact on the decision. We accept that submission.
While it is not clear that the Tribunal found that the email of 15 June 2022 was a formal acceptance of a variation, as it is difficult to reconcile that suggestion with the finding that there had been a breach (even a technical breach) of s 18B(1)(a) through the installation of guttering and downpipes in accordance with the plans referred to in the email, the Tribunal did find that, having signalled their acceptance of the plans, the owners could not subsequently suggest that they were entitled to have the work, which they had approved, redone.
It is not necessary to consider whether the Tribunal was correct in that conclusion, as the Tribunal found, at [128]-[129], that, even if the owners had been successful in relation to the builder’s liability to rectify item 20, the evidence in support of the amount claimed was deficient.
Mr Zakos’ report stated in respect of this item that the “design and works were unknown” and that therefore a provisional sum of $25,000 was allowed. The Tribunal noted that this was not based on any stated facts and nor had any reasons been provided to support the opinion. The Tribunal found that, consistent with the principles outlined in Makita, Mr Zakos opinion as to the cost of rectification would not be accepted.
The deficiency of the evidence presented by the owners in support of the amount claimed in respect of item 20 was not addressed by the owners in their written submissions or at the hearing of the appeal.
The builder submitted that:
“Describing the evidence as deficient is generous to the Owners’ expert”.
We agree. Not only did Mr Zakos’ evidence not identify the work required to rectify the issue, it did not establish that the rectification proposed was a reasonable course to adopt, provide a reasoned costing of that rectification work, or establish that his assessment of that cost was reasonable. In other words, the evidence failed to address the fourth to seventh requirements identified by the Tribunal at [280] (see [171(3)] above).
The Tribunal accepted at [125] that Mr Hodge had issued a certificate which covered the downpipes and suggested compliance with the Building Code of Australia and Australian Standards. The builder referred to the re-examination of Mr Hodge (at p 2,950 of the Appeal Book), where Mr Hodge clarified that his certification was for the installation of the modified hydraulic design (as shown on the plans accepted by the owners on 15 June 2022), not the modified design itself.
The owners’ contention that a modified DA or submissions to a private certifier would be required to change the hydraulic plans to the modified design of June 2022 was not developed further. The owners did not identify where such a requirement is to be found within the EPA Act or EPA Regulation.
The builder submitted that the owners’ contention “is wrong”, and further noted that the owners have cited no authority for the proposition that “the addition of downpipes to guttering required a modified Development Application”.
The builder also submitted that, even if the owners’ contention were correct, that could not have altered the outcome in respect of item 20 as the evidence of rectification cost was deficient.
We note that the owners did not point to any evidence which established that any need for a DA or the certifier’s approval to the additional downpipes could not easily be overcome. We accept the builder’s submission that, even if a DA or certifier’s approval were necessary and had not been obtained, the owners failed to establish the measure of any loss that flowed from such failure.
We are not persuaded that the owners have demonstrated any error in relation to grounds 11 to 13 that could have a material effect on the outcome of the proceedings.
Ground 14 raises the Tribunal’s application of the “prevention principle”, that is the principle that a party cannot take advantage of its own wrong.
The Tribunal’s consideration of that principle is set out at [80]-[85], which states:
“80 During the period from 1 June 2023 to 27 July 2023 the owners required the builder to not carry out any further work, save for tiling work and that work was only permitted during the period, at best, from 8 to 20 June 2023.
81 As to the applicable law, the principle that a party cannot taken advantage of its own wrong was accepted, with little elaboration in TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130, at 147 by Hope JA, with whom Priestley and Meagher JJA agreed. That principle was considered in Sydney Attractions Group Pty Ltd v Frederick Schulman [2013] NSWSC 858 at [187]-[194].
82 However, there is a broader principle of long-standing that is not confined to wrongful conduct that was expressed as follows in Roberts v The Bury Improvement Commissioner [1870] LR 5 CP 310:
It is a principle very well established at common law, that no person can take advantage of the non-fulfilment of a condition the performance of which has been hindered by himself … and also that he cannot sue for a breach of contract occasioned by his own breach of contract, so that any damages he would otherwise have been entitled to for the breach of the contract to him would be immediately recoverable back as damages arising from his own breach of contract.
83 Subsequently, in New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers de France [1919] AC 1 it was stated:
It is a principle of law that no one in such case take advantage of the existence of a state of things which he himself produced.
84 The principle that a party cannot take advantage of a situation they were responsible for creating was discussed in Quinn Villages Pty Ltd v Mulherin [2006] QCA 433 and Bensons Property Group Pty Ltd v Key Infrastructure Australia Pty Ltd [2021] VSCA 69. 31
85 A common application of that principle is in relation to claims for liquidated damages, a claim which is considered below. Submissions in relation to that claim included reference to Probuild where it was said, at [114]-[115], citations omitted:
In Spiers Earthworks Pty Ltd v Landtec Projects Corp Pty Ltd (No 2) McLure P (with whom Newnes JA agreed), by reference to Hudson’s Building and Engineering Contracts, observed that “[t]he essence of the prevention principle is that a party cannot insist on the performance of a contractual obligation by the other party if it itself is the cause of the other party’s non-performance”. As frequently observed, there is debate about the juridical basis for the principle. In Spiers Earthworks, McLure P observed that it “may be regarded as a particular manifestation of the obligation to cooperate implied as a matter of law in all contracts”, referring to Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd.
The prevention principle applies to delays in practical completion caused by variations resulting from the act or default of the principal. Ordering variations after the due date which must substantially delay completion will, unless the contract provides otherwise, and in the absence of an applicable extension of time clause, disable the proprietor from recovering or retaining liquidated damages which might otherwise have accrued after the giving of the order. In the context of delaying variations, whether ordered before or after the due date for completion, the prevention principle “is grounded upon considerations of fairness and reasonableness”.
“86 In this case, the Tribunals considers the owners cannot insist on the performance of rectification work when they refused to permit that work to be carried out by the builder. Simply stated, the 11 July 2023 notice of dispute and the 27 July 2023 notice of termination were based on the builder not doing work which the owners would not permit them to do.
87 For those two reasons, the Tribunal does not accept the proposition that the owners terminated the contract on 27 July 2023.”
“(c) the Senior Member erred by finding the prevention principle applied to the question of whether the Applicants were entitled to have work rectified after they took possession to the standard the Applicants propounded was the contractual standard of work.”
The owners’ written submissions do not address grounds 14(a) or (b). The submissions address ground 14(c) only. We note that grounds 17 and 18, which were not pressed by the owners, related to the Tribunal’s findings regarding termination of the contract. In the absence of submissions concerning grounds 14(a) and (b), we proceed on the basis that ground 14 is pressed only in respect of the issue raised by ground 14(c).
The owners contend that:
The Tribunal erred in finding that the owners were not entitled to the costs of rectification work as the owners had prevented rectification work from being undertaken and had failed to mitigate their loss by refusing to allow the builder access to the site in the defect liability period.
The Tribunal cited Turner Corporation Limited (Receiver and Manager Appointed) v Austotel Pty Ltd (1997) 13 BCL 378 (Turner) as the basis for the above finding, however Turner does not stand for that proposition.
“[T]he prevention principle is a constraint on the builder who has a right to an extension of time application to complain that delays are caused by acts of the principal”.
Cross examination of Mr Phillips revealed that the builder had not asked for any extension of time after May 2022, despite claiming the owners were refusing to accept practical completion.
The Tribunal did not engage with this submission and erred in adopting Turner as the legal basis for a finding that the owners were not entitled to rectification costs.
The finding that the owners had denied the builder access to rectify defects was not based on any evidence.
The owners did not deny access until over a month after the builder had commenced rectification works, which was over 6 months after the owners had taken possession and therefore, not during the defect liability period.
The owners’ written submissions do not identify where, in the decision, the Tribunal determined that the owners were not entitled to rectification costs. Clearly, the Tribunal did not determine that the owners were not entitled to rectification costs. The Tribunal awarded the owners the costs of rectification of, by our count, 49 items. The Tribunal did not, as far as we can tell, dismiss any of the owners’ claims for rectification costs on the basis that the owners had refused to allow the builder to undertake rectification work.
The only consequence which the Tribunal held followed from the owners’ refusal to permit the builder to undertake rectification work was that set out at [86]-[87], that the owners could not rely upon the builder’s failure to complete rectification work as a ground for the termination of the contract.
As we have noted above, the owners did not press any grounds of appeal relating to the termination of the contract.
The application of the “prevention principle” in relation to the refusal of access to carry out rectification work is given some statutory recognition in s 18BA of the HB Act, in particular in s 18BA(5). However, no reliance was placed on that provision by any party in these proceedings.
We are not persuaded that the owners have demonstrated any error in relation to ground 14.
“[T]hat whether a decision was not fair and equitable will involve a consideration of whether there has been an unfairness in the way the proceedings have been conducted or some other denial of procedural fairness.”
“124 The failure to afford procedural fairness has affected all components of the decisions on separate issues but particularly with regard to the roof and hydraulic design defects.
125 The findings regarding credit have underpinned these determinations and the failure to address the case put by the appellants has also resulted in a failure to afford procedural fairness.”
“128 … [T]here has been significant injustice caused by the findings that were made without affording Mr Cavanagh any opportunity to address the credit findings that he had made up conversations and was not to be believed on any issue across the board. The avoidance of engaging with open admissions made by the respondent has also led to significant injustice as the appellants are faced with a decision made against the open admissions made that works were defective and seriously so – that the notice of practical completion should not have been issued and that the roof needed to be replaced.”
We have dealt above with the owners’ submissions: regarding practical completion, in dealing with grounds 1 and 2; regarding credit, in dealing with grounds 3, 4 and 5; regarding alleged admissions, in dealing with ground 6; regarding the need for replacement of the roof, in dealing with ground 7; and regarding hydraulic design (ie downpipes), in dealing with grounds 11, 12 and 13. No further issues with the decision, beyond those raised in grounds 1-7 and 11-13 were raised by the owners in submissions in support of the grant of leave to appeal.
We have determined that the issues raised by the owners in respect of the grounds of appeal purporting to raise questions of law are without substance. We see no basis in our consideration of any of those grounds to conclude that the decision was not fair and equitable.
“The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach.”
“127. The weight of the evidence with regard to the issue of practical completion and with regard to the hydraulic design and installation defects was clearly against the final determination. There was evidence of significant continuing defects which were admitted by the respondent and evidence of design and installation defects in respect of the hydraulics which were never approved. There were also admissions that are evidence of the need for the roof to be replaced and the weight of this evidence outstrips the evidence the Senior Member relied on which were assertions by Phillips and Kidd that 'only minor works were done' after May 2022 which is fanciful and should have been rejected.”
Again, we have addressed the issues raised in that submission in dealing above with grounds 1, 2 and 11-13. It is not necessary to repeat what we have previously said in respect of those issues.
We do not consider that the owners have demonstrated that the evidence before the Tribunal, in its totality, preponderates so strongly against the Tribunal’s conclusion, that the conclusion was not one that a reasonable tribunal member could reach.
As we have noted, at [32] above, at the appeal hearing the owners sought leave to further amend the Notice of Appeal to raise as a ground for the grant of leave to appeal that significant new evidence has arisen that was not reasonably available at the time of the Tribunal hearing and which demonstrates a substantial miscarriage of justice. The evidence which the owners sought to rely upon was a letter from a roofing contractor (Mr Paziuk) dated 20 June 2025 and an affidavit of Mr Cavanagh dated 16 June 2025.
The builder opposed the Appeal Panel receiving the new evidence on the basis that the new evidence is effectively an attempt by the owners to relitigate issues already determined by the Tribunal.
“… The point of limiting fresh evidence to that which was not reasonably available at the first hearing is to ensure finality of proceedings. This means that it is in the interests of justice for parties to put forward all their evidence as best they can at the hearing, as otherwise, if they were free to add fresh evidence after a case was decided, the proceedings would run the risk of not being finalised until after many hearings. This principle is of particular importance in the Tribunal because of the provisions of s 36 of the Act. That section requires the Tribunal to proceed to decide cases justly, quickly and cheaply.”
The test of whether evidence was reasonably available at the time is an objective test, that is, whether the evidence was unavailable because no person could have reasonably obtained it: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [23]; Bele-Verdy v The North Coast Community Housing Company Ltd [2025] NSWCATAP 13 at [52]-[54].
The letter from Mr Paziuk identifies that he is a roofer employed by Archer Roofing and that he inspected the roof at the owners’ property on 5 June 2025. He states that there were leaks as a result of defects present in the roof in May 2025. He states that there are gaps in the sheeting and screws missing which had been like that for some time and that not all areas where this issue was present were showing signs of leaking, but would likely do so if not rectified in the future. The letter also states that Mr Paziuk had been informed by the owner of Archer Roofing that the roof installer had attended the premises a few days prior to his visit to address leaks reported by the owners. Finally, the letter identified that the gutter clips were spaced incorrectly, and that the gutters were sagging and would ultimately fail.
The letter does not suggest that the roof required full replacement. It does record that an area which had previously been leaking had been fixed but it suggested that the other areas containing similar gaps would also require repair to prevent further leaking. The letter suggests that replacement flashing in the roof valley would fix the leak.
The builder objected to the introduction of this new evidence on the basis that the letter from the roofer did not identify any defects that were not present, or could not have been identified, prior to the Tribunal hearing. We agree. None of the issues referred to by Mr Paziuk can be said to be new matters that could not reasonably have been the subject of evidence at the time of the hearing. We are not persuaded that the letter from Mr Paziuk should be accepted as new evidence.
We also note that one of the defects in the roof which the Tribunal found established and in respect of which it awarded rectification costs was the incorrectly spaced gutter clips (see [84]).
The affidavit of Mr Cavanagh dated 16 June 2025 outlined issues that had occurred in the months leading up to the appeal hearing with roof leaks, mould, cracks in the kitchen wall and a metallic vibration present during strong winds.
The evidence of issues with mould, the crack in the kitchen and the metallic vibration, which had occurred in the months leading up to the hearing, set out in the affidavit of Mr Cavanagh could not be said to have been reasonably available at the time of the hearing, as that evidence is of observations by Mr Cavanagh of matters occurring at a later time.
In Hawkins v NSW Land and Housing Corporation [2026] NSWCATAP 121 (Hawkins), at [72]-[80], the Appeal Panel considered whether evidence of events that had occurred after the hearing at first instance could constitute significant new evidence for the purposes of cl 12(1)(c) of Sch 4 to the NCAT Act.
The Appeal Panel accepted that it could. In so finding, the Appeal Panel followed the earlier decision in Claydon v NSW Land and Housing Corporation [2015] NSWCATAP 192 (Claydon) and disagreed with the Appeal Panel decision in Ferguson v Mission Australia [2024] NSWCATAP 183 (Ferguson), which had distinguished Claydon on the basis that:
“90. In our view the circumstances in Claydon are distinguishable from the present. There, the new evidence, although it came into existence after the hearing, directly related to the circumstances which existed at the time of the hearing (ie the offences for which the tenant had been charged). The effect of the new evidence was that the tenant was not guilty of the more significant offences which formed the basis of the termination application. Therefore, the new evidence would likely have had an impact on the outcome of the Tribunal proceedings. Here, the new evidence could not have resulted in a different outcome because it related to circumstances (ie the tenant’s daughter vacating the premises) which did not exist at the time of the hearing.”
“78 We do not agree that cl 12(1)(c) calls for such a distinction to be made, namely, that the circumstances related to the new evidence must have existed at the time of the hearing. On one view, such circumstances will always be in existence at the time of the hearing if those circumstances are relevant to the determinative issues at first instance.
79 Clearly, there is a correct and proper concern about finality of litigation. For example, a losing party might seek to alter the result in the primary proceedings by taking action to try and better its position in the light of the reasons for decision. However, in our view, the tests under and in connection with clause 12 (1) (c) of “significant”, “reasonably available” evidence and a “substantial miscarriage of justice” provide the correct tests in relation to this concern.
80 We agree with Claydon that there is nothing in the language of cl 12(1)(c) or in the principles set out in Collins v Urban that compels this more restrictive interpretation or that new evidence for the purposes of cl 12(1)(c) only relates to a fact that was in existence at the time of the hearing but was not, as the Appeal Panel said in Claydon, “reasonably discoverable”. In our view, this is an unduly narrow interpretation of cl 12(1)(c). The relevant issue under cl 12(1)(c) is whether the evidence is new “being evidence that was not reasonably available at the time the proceedings below were being dealt with” and significant in the sense that the evidence goes to the determinative issue about the underlying claim which, as found in Claydon, may not have resulted in the order to terminate being made (refer Claydon at [30]). Evidence about an event occurring after a hearing may still be significant new evidence within the terms of cl 12(1)(c) if it is evidence where there is a “significant possibility” or “a chance that was fairly open” that a different and more favourable result would have occurred (refer Collins v Urban at [71]). That is the critical issue.
We agree with the reasoning of the Appeal Panel in Hawkins and accept that evidence of events that have occurred after the first instance hearing could constitute significant new evidence for the purposes of cl 12(1)(c).
However, as the source of the issues with mould, the crack in the kitchen and the metallic vibration is not identified, the evidence of Mr Cavanagh could not said to be “significant”, in the sense that it is “evidence which goes to the determinative issue” and where “there is a ‘significant possibility’ or ‘a chance that was fairly open’ that a different and more favourable result would have occurred” if the evidence had been available at the hearing: Hawkins at [80]. If the source of the mould, crack and/or vibration was a defect the subject of the proceedings before the Tribunal, it cannot be said that evidence of that matter was not reasonably available at the time of the hearing. If the source was not a defect the subject of the proceedings, it cannot be said that evidence of the mould, crack or vibration could have led to a different result concerning any alleged defect which was the subject of the proceedings.
The same proposition applies to Mr Cavanagh’s evidence of roof leaks. Mr Cavanagh included in his affidavit evidence of having climbed onto the roof and observed issues with the roof. If these issues arose from work carried out by the builder before the first instance hearing, evidence of these issues would have been available at the time of the hearing. If they arose from subsequent work, the evidence could not be significant to the decision at first instance.
Where defective work which could not reasonably have been discovered at the time proceedings are determined is subsequently discovered, s 18E(2) of the HB Act permits proceedings in respect of such work to be brought (provided the proceedings are brought within the “warranty period”) notwithstanding the finalisation of the earlier proceedings. Evidence of such defective work could not have altered the outcome of the earlier proceedings, as that defective work was not the subject of the earlier proceedings.
Mr Cavanagh’s affidavit also includes uncorroborated statements about what a representative of the roof installer said to Mr Cavanagh. The statement by the representative of the roof installer was asserted to have been to the effect that part of the roof had been incorrectly installed. To the extent that that statement concerns the state of the roof at the time of the original hearing, it cannot constitute evidence that was not reasonably available at the time of the original hearing. The incorrect installation would have been apparent upon inspection at that time.
Accordingly, we are not persuaded that Mr Cavanagh’s affidavit contains significant new evidence that was not reasonably available at the time of the hearing.
It follows from the foregoing that we are not persuaded that we should grant the owners leave to appeal on the basis of the letter from Mr Paziuk or on the basis of Mr Cavanagh’s further affidavit and we do not grant the owners leave to further amend their Notice of Appeal.
We are not persuaded that the owners have demonstrated there is a "significant possibility" or a "chance which was fairly open" that the owners would have achieved a different and more favourable result on any of grounds 20, 21 or 22. Nor are we persuaded that, if leave to further amend the Notice of Appeal had been granted, the fresh evidence that the owners sought to rely upon might have led to a different and more favourable result if it had been before the Tribunal at first instance.
It follows that leave to appeal must be refused.
By ground 19 the owners challenged the Tribunal’s costs decision. However, at the hearing of the appeal, the owners, through their counsel accepted that they could achieve success on ground 19 only if the appeal were allowed, as the grounds upon which the owners challenge the costs decision are limited to the errors which the owners submit underpinned the findings that practical completion was reached and that there was no requirement for the roof to be removed, or the guttering and downpipes to be replaced, or painting and plastering to be redone.
The owners have not been successful on any of the grounds of appeal or in seeking leave to appeal. As they accepted at the hearing, the owners must also fail in their appeal against the costs decision.
the builder submitted that, if the appeal was dismissed, the owners should be ordered to pay the builder’s costs of the appeal. Our preliminary view, without having heard submissions from the parties, is that the amount in dispute both at first instance and on the appeal exceeded $30,000. The amount claimed by the owners in respect of the replacement of the roof, in accordance with Mr Zakos’ supplementary report, itself exceeded $44,000.
Therefore, by virtue of rr 38 and 38A of the NCAT Rules, special circumstances are not necessary before we may make an award of costs.
In Vella v Mir (No 3) [2020] NSWCATAP 17, at [28]-[30], the Appeal Panel summarised the relevant principles on the Tribunal’s (and, by extension, the Appeal Panel’s) exercise of its discretion to award costs, as follows:
- Clause 38 gives the Tribunal a wide discretion to make an order for costs. It does not specify the factors the Tribunal must take into account in exercising the discretion, although the discretion to make such an order must be exercised judicially: see, for example, Ruddock v Vadarlis [2001] FCA 1865 at [9].
- Where an application has been heard and determined on the merits and Clause 38 applies, the appropriate starting point for the exercise of the discretion is not that the parties are to pay their own costs. Rather, it is the well-established position at common law; that is, that the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour, subject to exceptions generally involving misconduct on the part of that party: Latoudis v Casey [1990] 170 CLR 534; Oshlak v Richmond River Council [1998] HCA 11.
- In BNT Constructions Pty Ltd v Allen [2017] NSWCATAP 186 the Appeal Panel, having set aside a costs order made in the Consumer and Commercial Division, decided to re-exercise the costs discretion. Clause 38 was the applicable costs provision in that case. At [67] the Appeal Panel noted the following principles relevant to the exercise of the discretion:
(1) the starting point is that a successful party should be entitled to an order for costs in his favour;
(2) an award of costs is by way of an indemnity and not as punishment;
(3) there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party;
(4) the factors to be considered are not to be confined as to do so would constrain the general discretion;
(5) the relative success of the parties on different issues and the time taken to determine them may be relevant;
(6) the nature of the proceedings is relevant;
(7) the proper exercise of the discretion requires a decision maker to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary and capricious.
As rr 38 and 38A apply, in the usual course, costs would follow the event and an award of costs would be made in favour of the successful party.
The builder is the successful party on the appeal and, in the ordinary course is entitled to receive its costs. We will make an order that the owners pay the builder’s costs of the appeal as agreed or assessed, but will make provision for either party to seek an alternative order within 14 days if so advised, in which event our order for costs in favour of the builder will cease to apply. Subject to any submissions from the parties, we would propose to determine any application for costs on the basis of the written submissions and without a hearing.
Our orders are:
An extension of time for the lodgement of the Notice of Appeal is refused.
Leave to further amend the Notice of Appeal is refused.
The appeal is dismissed.
Subject to order (5) below, the appellants are to pay the respondent’s costs of the appeal as agreed or assessed.
If either party seeks a different order in relation to the costs of the appeal, they may file, and serve upon the other party, submissions of no more than five pages, with any evidence in support, within 14 days of the publication of these orders, in which event order (4) above ceases to have effect.
If a party files and serves submissions pursuant to Order (5) above, the other party may file and serve submissions in response of no more than five pages, with any evidence in support, within a further 14 days.
Submissions in reply to submissions filed and served pursuant to Order (6) above, of no more than three pages, may be filed and served within a further 7 days.
Any submissions filed pursuant to Orders (5) to (7) above must include submissions concerning whether an order should be made pursuant to s 50 of the Civil and Administrative Tribunal Act 2013 (NSW) dispensing with a hearing in relation to the question of costs of the appeal.
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The appellants’ written submissions refer to regulations dated 1990. However, as the Tribunal recognised at [139], the regulation in force at the time of signing the contract and issue of the construction certificate was the Environmental Planning and Assessment Regulation 2000 (NSW). Nothing hinges on this issue.
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
Cavanagh
Montgomery Homes Pty Ltd
[2026] NSWCATAP 135
[2011] HCA 11
[2003] HCA 22
[1998] HCA 11
(2008) 238 CLR 570
(2020) 103 NSWLR 479
(2022) 277 CLR 445
(1982) 149 CLR 337
(2010) 243 CLR 361
(2022) 276 CLR 80
(1968) 118 CLR 186
(1998) 195 CLR 516
(2007) 71 NSWLR 61
(2000) 103 FCR 1
(1995) 22 MVR 1
(1984) 36 SASR 316
(2023) 416 ALR 24
(2001) 52 NSWLR 705
(1989) 16 NSWLR 130