Chand v Lifestyle Homes NSW* Pty Ltd

District Court of NSW|2009-10-23

CITATION: Chand v Lifestyle Homes NSW* Pty Ltd [2009] NSWDC 335

HEARING DATE(S): 23 October 2009 and 5 November 2009

Orders - (1) The appeal is dismissed. (2) The plaintiffs are to pay the third defendant's costs of the proceedings, liability for which to be on a joint and several basis. DECISION: (3) The first and second defendants are to bear their own costs of the proceedings. (4) Note the intended submitting appearance of the first defendant, save as to costs. (5) Note the order made on 29 May 2009 by the Judicial Registrar removing the second defendant as a party to the proceedings. (6) Note the order made on 18 June 2009 by the Judicial Registrar joining the third defendant as a party to the proceedings. (7) Leave reserved to the plaintiffs to make an application by notice of motion in relation to the costs incurred by them as ordered by the Judicial Registrar on 18 June 2009.

CATCHWORDS: APPEAL - Against decision of Consumer, Trader and Tenancy Tribunal - Home Building Division - Whether a question with respect to a matter of law - Nature of the appeal - Whether available relief extends to judicial review - Doubt as to power of District Court to grant prerogative type relief - Distinction between judicial review and appeal on a pure question of law - Alleged denials of procedural fairness - Findings of fact not reviewable on appeal - Sufficieny of evidence - Functions of the Tribunal - Nature of proceedings before the Tribuanl - Adversarial not inquisitorial - Complaints not included in grounds of appeal unavailable - Costs

Civil Procedure Act, s 99 Commercial Tribunal Act 1984, s 20(5) Consumer, Trader and Tenancy Tribunal Act 2001, ss 12, 12(2)(cl), 28, 29(1), 29(2), 51(3), 65, 65(2), 65(3), 67, 67(1), 67(3)(b) and 67(5) LEGISLATION CITED: Conveyancing Act 1919, s 12 Corporations Act 2001 (Cth), s 500(2) Home Building Act 1989, ss 7, 18B and 48K Migration Act 1958 (Cth), ss 424(1) and 424A(1)

Alex Constructions Pty Ltd v John Zavodnyik [2004] NSWSC 1152 AON Risk Services Australia Limited v Australian National University [2009] HCA 27 Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150; (2008) 72 NSWLR 44 Canham v Australian Guarantee Corporation Ltd (1990) 20 ALD 361 Chapman v Taylor [2004] NSWCA 456 Dobell v Blue Haven Pools and Spas Pty Ltd [2009] NSWCA 77 Janos Hoey v Consumer, Trader and Tenancy Tribunal [2002] NSWSC 1023 CASES CITED: Kalokerinos v HIA Insurance Services Pty Ltd [2004] NSWCA 312 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 Obieta v Consumer, Trader and Tenancy Tribunal NSW [2009] NSWCA 220; Obieta v Consumer, Trader and Tenancy Tribunal [2009] NSWCA 249 Owners - Strata Plan No 53094 v Fair Trading Administration Corporation [2007] NSWSC 249 Skinner & Edwards (Builders) Pty Ltd v Australian Telecommunications Corporation (1992) 27 NSWLR 567 Sullivan v Waltons Credit Ltd (1990) ASC 56-023 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152.

Ajay Chand - First Plaintiff Shashi Chand - Second Plaintiff PARTIES: Lifestyle Homes NSW Pty Limited t/as Lifestyle Homes (In Liquidation) (Formerly Azurra Pty Limited) - First Defendant Consumer, Trader and Tenancy Tribunal - Second Defendant (removed as party on 29 May 2009) Lifestyle Homes NSW* Pty Limited - Third Defendant (joined as party on 18 June 2009

Mr JM Patel for Plaintiffs COUNSEL: No appearance for First and Second Defendants Ms M Painter for Third Defendant

Rasan T Selliah & Associates for Plaintiffs SOLICITORS: Adams & Partners Lawyers for First and Third Defendants IV Knight, Crown Solicitor for Second Defendant

1 This is an appeal by the owners of residential premises at Kellyville against a decision of the Consumer, Trader and Tenancy Tribunal (per Mr GJ Durie, Senior Member) given on 12 June 2008 in relation to building work at the premises. The proceedings before the Tribunal arose from work carried out by the builder in the construction of a house for the owners pursuant to a "cost plus contract" and concerned two claims, the first by the builder and the second by the owners. The Tribunal granted the builder's claim to require the owners to pay $124,939.30 and dismissed the owners' claim. The owners here sought an order allowing the appeal against the Tribunal's decision and, pursuant to s 67(3)(b) of the Consumer, Trader and Tenancy Tribunal Act 2001, for the Court's decision to be remitted to the Tribunal for rehearing of the proceedings according to law.

2 The appeal was brought according to s 67(1) of the Consumer, Trader and Tenancy Tribunal Act which enables a party in the proceedings who is dissatisfied with the Tribunal's decision to appeal to this Court where the Tribunal decides a question with respect to a matter of law. It is to be emphasised, and about which there was no issue, that the only basis for an appeal was, as the statute says, on "a question with respect to a matter of law." That is, the issue between the parties raised by the challenged decision must relate to a question of law and even though express reference to it may not have been made so long as something with respect to it had to be decided in order to dispose of the proceedings: Kalokerinos v HIA Insurance Services Pty Ltd [2004] NSWCA 312 at [47] per Bryson JA, with whom Santow JA agreed. Relevant for present purposes, it may be added that the misapplication of legal principles, as opposed to their mere misdescription, constitutes an error of law: Skinner & Edwards (Builders) Pty Ltd v Australian Telecommunications Corporation (1992) 27 NSWLR 567 at 572 per Cole J; and, in showing that an error of law had occurred by applying a wrong principle of law, it was necessary to demonstrate that the decision-maker had done so from what was said or because the ultimate result, associated with the facts expressly or impliedly found, indicated a wrong principle had been applied: Chapman v Taylor [2004] NSWCA 456 at [33] per Hodgson JA, with whom Beazley and Tobias JJA agreed.

3 On 26 April 2006 the owners, Ajay Chand and Shashi Chand, made a contract with the builder, Lifestyle Homes NSW Pty Limited (formerly Azurra Pty Limited) t/as Lifestyle homes, for the construction of a house on their land at Lot 1105 Sirocco Place, Kellyville. The contract was on a "cost plus" basis and complied with the general requirements of s 7 of the Home Building Act 1989 and, in particular, with the special requirements of s 7(5) thereof as to such a contract.

4 The works proceeded unremarkably, although it seems with some delay, and the builder made a series of progress claims the first three of which were paid by the owners without comment. Then, on the fourth progress claim being made, the owners raised a problem with the costs of over-excavation; another issue arose as to the absence of reinforcing bars from a flight of stairs - the builder acknowledged the need for rectification work and agreed to do so at no cost to the owners and in accordance with plans approved by the engineer. Nevertheless, and even with the builder's proposal for such rectification work having already been given, the owners alleged a breach of the contract and gave notice pursuant to the contract on 6 June 2006 for the rectification work to be completed within 10 days. The suggested procedure by the builder, which necessarily exceeded the 10-day period, was for the work to be done after the construction of the walls so that the soil could be held. In the result, the owners, although not complaining that the builder's proposal was an inappropriate way to address the rectification work, said that the work was not done within the period required. They thereupon, by an email to the builder, asserted a settlement of the issue had been reached which involved a termination of the cost plus contract and its replacement by a lump sum contract. As the builder declined to adopt that purported "settlement", the owners then excluded the builder from the site. Of course, under the initial contract the owners were not entitled to possession of the site at that stage and so the builder sought payment for the work done and for the opportunity to complete the contracted work; the owners did not respond and remained in possession of the site by excluding the builder. The builder's claim for damages for breach of contract by the owners' repudiation thereof was then made to the Tribunal followed by the owners' claim against the builder.

5 In short, the builder sought recovery of its sixth progress claim in the sum of $6,131.29 in respect of three items deferred from the fifth progress claim and survey costs for the concrete slab; also claimed was an amount for loss of profits by reason of the repudiation of the contract by the owners. For the owners, the claim was in two categories: first, very substantial damages for breach of contract to compensate for the costs directly incurred in this dispute, such as distress and time spent in preparing the case, and by the need for them to attend to the home building work thereby causing their family company to lose profits by their inability to spend time in the business; and, second, damages for financial adjustments which should have been made in their favour under the contract and for the costs of remedying defective building work.

6 The challenged orders in favour of the builder against the owners were duly made by the Tribunal on 12 June 2008 following the hearing on 29 and 30 May 2008. Reasons for decision accompanied the orders made. As has been noted earlier, the owners' claim was dismissed and the builder's claim was granted to the extent the owners were to immediately pay $124,939.30, liability for which was on a joint and several basis.

7 On 3 July 2008 the certificate of the Tribunal's orders was registered in this Court on the builder's application and so became a judgment enforceable against the owners on 6 August 2008 pursuant to s 51(3) of the Consumer, Trader and Tenancy Tribunal Act. Then, on the judgment not being satisfied, each of the owners was served with a bankruptcy notice on behalf of the builder on 16 September 2008. In the meantime the owners had filed their appeal on 7 July 2008 but it was not until 16 October 2008 that the Tribunal under s 67(5) of the statute ordered the suspension of its orders until the appeal was determined. And so it was that on 7 October 2008 the owners filed a notice of motion in this Court seeking to set aside, or alternatively stay, the judgment entered on 6 August 2008 and which had supported the bankruptcy notices. On 28 October 2008, Cogswell DCJ ordered that such judgment be stayed pending determination of the appeal proceedings. The operation of the bankruptcy notices against the owners thus awaits the resolution of this appeal.

Parties to the appeal and course of the proceedings

8 The owners, Ajay Chand and Shashi Chand as plaintiffs, commenced this appeal by summons filed on 7 July 2008. Lifestyle Homes NSW Pty Limited as the builder was named as the first defendant and the Tribunal was the second defendant. An amended summons was filed on 15 December 2008 pursuant to leave granted by Johnstone DCJ.

9 However, on 5 January 2009 the first defendant was placed into liquidation, but, on the plaintiffs' application, Austin J in the Supreme Court on 22 June 2009 granted leave under s 500(2) of the Corporations Act 2001 (Cth) for the proceedings to be continued against it in liquidation. In the meantime, on 23 February 2009 the first defendant, the liquidator and a new entity known as Lifestyle Homes NSW* Pty Limited as assignee made a deed pursuant to s 12 of the Conveyancing Act 1919 under which all of the first defendant's right, title and interest in the subject proceedings were assigned to the assignee corporation for consideration confidential to the three parties to the deed. On 18 June 2009, on the assignee's application, the Judicial Registrar added it as the third defendant to the appeal proceedings.

10 Previously, on 29 May 2009 the Judicial Registrar removed the Tribunal, on its application, as the second defendant from the appeal proceedings on the basis that it was not a proper party to the statutory appeal: see Dobell v Blue Haven Pools and Spas Pty Ltd [2009] NSWCA 77 at [19].

11 Although remaining as the first defendant to the appeal, the company in liquidation took no part in the proceedings, presumably because of the assignment to the third defendant. The Court was informed by counsel for the third defendant of instructions to her that the first defendant had indicated an intention to file a submitting appearance, save as to costs, but no such document has in fact been filed.

12 Thus, the only remaining active opponent to the plaintiffs' appeal was the third defendant, Lifestyle Homes NSW* Pty Limited.

13 The parties before the Tribunal were given leave to be legally represented but they elected to appear in person; the builder was represented by its director, Mr Craig Bennett. Counsel appeared for the parties in the appeal proceedings, Mr JM Patel for the plaintiffs and Ms M Painter for the third defendant.

14 The pleaded grounds of appeal, but omitting the specified particulars, were: "1. The plaintiffs were denied natural justice and procedural fairness in circumstances where the second plaintiff (Mrs Chand) was not allowed to assist the first plaintiff (Mr Chand) in presentation of their joint application in the proceedings below. 2. The plaintiffs were denied natural justice and procedural fairness in circumstances where the second plaintiff was excluded from substantial parts of the hearing on 29 th and 30 th May 2008. 3. The second defendant (the Tribunal) erred in law by making a finding of fact that 'a fair estimate of the total cost of the house which the parties contracted to be built would have been $950,000' in circumstances where there was no evidence to support such finding. … 4. The second defendant further erred in law in failing to consider the obligation of the first defendant (Lifestyle Homes NSW Pty Ltd) to mitigate its loss and damages when assessing the builder's claim for loss of profits. 5. The second defendant erred in law in finding the plaintiffs repudiated the contract without first considering the effect of Statutory Warranties under the Home Building Act 1989 - viz., that the work be performed in a proper and workmanlike manner and with due diligence or within a reasonable time. 6. The second defendant misdirected itself in law in failing to consider whether the length of delays in completing the contract could reasonably justify the plaintiffs entering into possession and excluding the builder. 7. The second defendant erred in law in finding there was no denial of procedural fairness to the Owners by giving the ACP report no weight without affording the plaintiffs an adjournment and/or an opportunity to remedy the defects the Tribunal perceived with the ACP report in circumstances where the author of the ACP was not cross-examined. 8. The second defendant further erred in law by not affording the plaintiffs procedural fairness in circumstances where it failed to put its concerns about the ACP to the plaintiffs during the course of the hearing and it was not obvious to what extent (minor or otherwise) those perceived defects had been addressed by emails relied on by the plaintiffs. …"

15 As indicated earlier, the plaintiffs sought orders under s 67(3)(b) of the Consumer, Trader and Tenancy Tribunal Act. It ought be mentioned that the summons, in its amended form, also claimed orders pursuant to s 65(3) in the nature of the prerogative writs of certiorari, prohibition and mandamus based on an alleged denial of procedural fairness. That relief clearly related to the matters raised by grounds 1, 2, 7 and 8. Although maintaining the grounds of appeal, counsel for the plaintiffs did not pursue the s 65(3) prerogative writ type relief. Mr Patel explained that there was some doubt whether this Court had such judicial review power as that very question was before the Court of Appeal in Obieta v Consumer, Trader and Tenancy Tribunal NSW [2009] NSWCA 220; and [2009] NSWCA 249 but as yet not heard and determined. Even so, Mr Patel put that the ground of a lack of procedural fairness was available as a question of law in the appeal under s 67(1). On the other hand, Ms Painter, counsel for the third defendant, submitted that s 67(1) did not comprehend an appeal on that ground because any such challenge was limited to s 65(3)(b) so that grounds 1, 2, 7 and 8 were incompetent.

16 Otherwise, Ms Painter submitted that the grounds of appeal, although asserted by Mr Patel to relate to errors of law, were indeed confined to determinations of fact by the Tribunal so as to be impermissible for review by a s 67(1) appeal. In short, ground 3 concerned a finding of fact where no evidence was alleged; ground 4 concerned the quantum of damages; and grounds 5 and 6 related to the factual finding whether the contract had been repudiated.

17 It may, in my view, be taken as settled that in an appeal under s 67(1) of the Consumer, Trader and Tenancy Tribunal Act the plaintiff bears the onus of satisfying the Court that there has been an error of law justifying the disturbance of the Tribunal's decision: see Janos Hoey v Consumer, Trader and Tenancy Tribunal [2002] NSWSC 1023 at [18]. It is settled also, in my view, that the relevant error is a "pure" question of law. As Carruthers J said in Canham v Australian Guarantee Corporation Ltd (1990) 20 ALD 361, followed by his Honour in Sullivan v Waltons Credit Ltd (1990) ASC 56-023 in relation to a similar provision to s 67(1) in s 20(5) of the Commercial Tribunal Act 1984 : "…it is my view that the draftsman intended this phrase to encompass nothing more than a pure question of law… Further, I am confident that the Legislature would not have intended that the Chairman or Deputy Chairman had the right to refer anything other than a pure question of law to the Supreme Court for decision. It would be quite inconsistent with well-established practice, as well as the function of this Court, for a mixed question of fact and law to be referred to it for decision."

18 In Kalokerinos (at [47]), Bryson JA cited with approval the observations of Carruthers J in Canham and in Sullivan and added: "A decision on 'a question with respect to a matter of law' in s 67(1) must be a decision on something which arose or was in issue or was debated in the proceedings; something which had to be decided in order to dispose of the proceedings, whether or not it was expressly referred to in the decision. The Tribunal may decide on such issue without overtly referring to it. Consistently with Carruthers J's observations, express advertence to the matter of law is not necessarily required, and the decision might be with respect to a matter of law even though the matter of law is not mentioned, if some decision with respect to it was necessarily involved in the decision."

19 That approach was followed by Malpass AsJ in Owners - Strata Plan No 53094 v Fair Trading Administration Corporation [2007] NSWSC 249 where his Honour (at [17]) remarked that the scope of s 67(1) was "not synonymous with the common law concept of error in point of law" so that, as his Honour said (at [19]), "there is merely error in the fact finding process." The result in that case, as expressed in earlier cases decided by his Honour such as Alex Constructions Pty Ltd v John Zavodnyik [2004] NSWSC 1152, was that an absence of evidence to support a finding of fact did not constitute a ground of appeal within s 67(1); in other words, the narrow ambit of the section excluded the "no evidence"(whether there was any evidence of a particular fact) ground of appeal: see at [20]-[25].

20 Obieta [2009] NSWCA 220 furthered this approach in presently relevant respects where Basten JA observed (at [6]) as to the subject matter of a s 67 appeal: "As this Court has noted in a number of recent judgments, both in relation to the CTTT Act and in relation to other similar provisions, the subject matter of such an appeal is a decision of the Tribunal on a matter of law; it is not sufficient that there may have been some error of law, such as procedural unfairness, in the manner in which the Tribunal determined the case before it: see Scicluna v NSW Land and Housing Corporation [2008] NSWCA 277 ; B & L Linings Pty Ltd v Chief Comissioner of State Revenue [2009] NSWCA 55 . A failure to accord procedural fairness may not, depending on the circumstances, constitute an erroneous 'decision' on the part of the Tribunal, whether the decision is implicit in the course followed by the Tribunal or not: Director-General, Department of Ageing, Disability and Home Care v Lambert [2009] NSWCA 102 at [75]. However, in some circumstances such a procedural error may involve a decision on the part of the Tribunal as, for example, where the Tribunal has been invited to grant an adjournment and has declined to do so, in circumstances said to amount to procedural unfairness."

21 The Court of Appeal recently reviewed the nature of the s 67 appeal in Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150; (2008) 72 NSWLR 44 by reference to the earlier authorities and observed (at [26]; 51) that "the claimant is confined to the facts that have been agreed or expressly or impliedly found by the Tribunal and that the Court had no remit to find facts for itself." That case is authoritative also in relation to the distinction existing between relief under s 65(2) and (3) as to the prerogative writs and an appeal under s 67(1) in terms of whether, as argued by Ms Painter, s 67(1) is wide enough to comprehend an appeal relying on a ground of denial of procedural fairness. The Court (per Tobias JA, with whom Giles JA and Campbell JA agreed) on this aspect said (at [29]-[30], [33]; 52-53): "[29] The difference between seeking relief under s 65(2) of the Consumer, Trader and Tenancy Tribunal Act on the one hand and under s 67(1) on the other is not of mere academic interest. There are number of significant practical differences. Thus in Smith v Collings Homes Pty Ltd [2004] NSWCA 75 at [25], Mason P, with the concurrence of Handley JA and Campbell J (as his Honour then was), stated that, apart from the language of s 67(1):... 'it is to be observed that the very presence of s 65, which provides for judicial review if there is excess of jurisdiction or denial of procedural fairness, provides additional support for a narrower, literal reading of s 67.' [30] Furthermore, the grant of relief under s 65, being analogous to a grant of prerogative relief, is discretionary whereas if the Tribunal's decision was erroneous with respect to a matter of law then no question of discretion with respect to the grant of relief would arise. That point of difference was highlighted by McColl JA, with the concurrence of Giles JA and Basten JA, in Maconachie v Kullenberg [2005] NSWCA 294 at [59] where her Honour said: 'If an error of the kind provided for by s 67(1) is identified, the grant of relief is not discretionary … On the other hand, if the relief sought is by way of prerogative relief, the remedy is discretionary … Again the importance of identifying the nature of the process invoked is demonstrated.' ... [33] As I have already observed, it is clear that an appeal under s 67(1) is confined to matters of law with the consequence that it is not open to the Supreme Court on any such appeal to make any findings of fact not agreed or expressly or inferentially made by the Tribunal or to substitute findings of fact for those made by the Tribunal. This is so even though such findings may be relevant to and determinative of the issue that is before the Tribunal and in respect of which error of law is alleged. On the other hand, invoking that Court's jurisdiction under s 65 would enable it to make such findings of fact as were necessary in order to establish that the Tribunal's ruling that it had no jurisdiction to determine the applications was erroneous."

22 Before leaving the issue of the nature of the s 67(1) appeal, it is necessary, having in mind the way in which the plaintiffs' case was argued on appeal, to refer to the statutory context in which the Tribunal conducted the claims before it by both the owners and the builder.

23 First, s 12 of the Consumer, Trader and Tenancy Tribunal Act sets out the functions of the Chairperson of the Tribunal and, in particular, the Chairperson's duty in s 12(2)(c1) to give directions with respect to a particular class or classes of proceedings. On 28 July 2003, the Chairperson issued directions with effect from 1 August 2003 setting out the procedure to apply to all applications, as here, in the Home Building Division where the amount claimed was $25,000.00 or more - the directions covered lodgement of applications, directions hearings, documents to be filed and served, compliance with timetables, expert conclaves, Tribunal appointed experts, summonses to produce documents, adjournments and withdrawal of applications.

24 Second, s 28 of the statute deals with the procedure of the Tribunal generally. The principal provisions of the section may be summarily stated. The Tribunal may determine its own procedure: sub-s (1). The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness: sub-s (2). The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms: sub-s (3). The Tribunal, as far as practicable, is to act expeditiously, to ensure all relevant material is disclosed, to require evidence or argument to be oral or in writing and to impose time limits for the fair and adequate presentation of cases: sub-s (5). A member of the Tribunal may give procedural directions in relation to the proceedings: s 29(1).

25 Section 29(2) of the statute resolves any inconsistency between any procedural direction given under s 29(1) and that given by the Chairperson under s 12 in favour of the s 12 direction.

26 In light of the above principles, one may turn to a review of the proceedings before the Tribunal and the specific challenges to its decision in terms of the grounds of appeal pleaded.

27 The Tribunal heard the two applications on 29 and 30 May 2008 and gave its decision on 12 June 2008 in what appeared as a comprehensive dealing with the issues raised. As has been noted, the parties appeared in person without legal representation (Mr Bennett as the director of the builder and Mr Chand on behalf of himself and Mrs Chand as the owners) but, as the decision acknowledged, "the applications had previously been case managed, and pursuant to directions given, each party had filed substantial documentary material." Mr Bennett and Mr Chand gave evidence before the Tribunal, including cross-examination of each of them by the other.

28 As to its jurisdiction, the decision recorded a view that the subject building work and consequent disputes about it were within the scope of the Home Building Act so that the Tribunal was empowered to deal with the matter under the provisions of s 48K thereof. The parties made no contrary submission at the hearing and that remained the position on appeal.

29 The Tribunal outlined the respective claims made by the builder and the owners, in the terms earlier referred to in these reasons, and no issue was taken on this aspect. The contract itself under which the building work was to be done was identified as a cost plus contract and the Tribunal found it to be valid and binding on the parties. Again, no issue arose on this aspect.

30 The operation of the contract, its termination by an alleged repudiation by the plaintiffs, acceptance of the repudiation by the builder and consequences of the repudiation in considering the respective claims of the parties were considered by the Tribunal and detailed reasons given for the conclusions reached. Those aspects, related to what the Tribunal decided, were involved in one or more of the grounds of appeal and so will be reviewed when the relevant ground is dealt with.

31 The grounds of appeal relied upon have been set out earlier. It is convenient to consider each in turn.

32 Grounds 1 and 2 - Procedural unfairness by exclusion from hearing: These two grounds pleaded a denial of natural justice and procedural fairness in circumstances where Mrs Chand was said to have not been allowed by the senior member constituting the Tribunal to assist Mr Chand in the presentation of their joint case and where she was excluded from substantial parts of the hearing.

33 It seemed to be common ground that indeed Mrs Chand at some stage of the hearing was restrained by the senior member from assisting Mr Chand, such as by speaking to him and passing to him documents during evidence, but there was conflict as to when that occurred. It was common ground also that Mr Bennett gave evidence first followed by Mr Chand. Mrs Chand in an affidavit relied on in the appeal said it occurred during the cross-examination of Mr Bennett by Mr Chand. Mr Bennett in an affidavit sworn in-reply deposed that it occurred during his cross-examination of Mr Chand and brought this response by the senior member - "I'll warn you again. Stop talking whilst your husband is under cross-examination"; later, as such conduct by Mrs Chand continued, the senior member said to her - "Please leave the room." She apparently returned to the hearing after the completion of the evidence to hear submissions being given.

34 The decision of the Tribunal made no mention at all of this treatment of Mrs Chand. It must be plain, therefore, that what occurred with Mrs Chand played no part in the ultimate decision or, in the words used by Bryson JA in Kalokerinos (at [47]), was neither "something which had to be decided in order to dispose of the proceedings" nor was "necessarily involved in the decision." Of course, a decision made in the passage of proceedings could be a relevant decision as a matter of law within the scope of s 67(1), and even though not expressly mentioned in the reasons for decision, depending on the circumstances: see per Basten JA in Obieta (at [6]) in relation to a refusal to grant an adjournment as would amount to procedural unfairness. But, as his Honour explained, any error of procedural fairness as to the manner in which the Tribunal determined the case before it was insufficient to fall within s 67(1) because there had to be a decision on a matter of law rather than an error law.

35 Here, in my view, there is the added difficulty of the evidentiary conflict between Mr Bennett and Mrs Chand as to when the occurrence took place. If, as Mrs Chand said, it was during Mr Bennett's cross-examination then it may be found in the circumstances that there was an error of law in so limiting her assistance of Mr Chand and by excluding her from the hearing; on the other hand, if, as Mr Bennett said, it occurred during Mr Chand's cross-examination then it would be extraordinary, it seems to me, for any court or tribunal to tolerate such conduct and if it persisted, as was said to occur here, a decision to exclude her from the hearing would be unexceptional. However, as was held in Bahadori (at [26]; 51), "the Court has no remit (under a s 67(1) appeal) to find facts for itself." And, as their Honours relevantly concluded (at [33]; 53), proceedings under s 65, unlike those under s 67(1), in dealing with an alleged error of law would enable the court to make such necessary findings of fact.

36 I am not satisfied that the plaintiffs have met the onus on them in grounds 1 and 2 to show there has been an error of law justifying, as the decision in Janos Hoey (at [18]) requires, the disturbance of the Tribunal's decision. In any event, and even if it had been established an error of law had occurred, my view is that an appeal under s 67(1) does not provide the available means for recourse in the circumstances here but rather the allegation of the denial of procedural fairness involving Mrs Chand is only appropriate to be dealt with, if at all, under s 65 by way of judicial review. Grounds 1 and 2 must fail.

37 Ground 3 - Total cost of the house: The plaintiffs complained that the Tribunal erred in law by finding as a fact that the total cost of the house contracted to be built under the cost plus contract would have been $950,000.00 when there was no evidence to support such finding.

38 The challenged finding was made by the Tribunal in the course of assessing damages due to the first defendant builder for a loss of profits on the termination of the building contract by the plaintiff owners' repudiation. After referring to Mr Bennett's estimate of the cost by reference to a costing schedule of the project, the amount of finance obtained by the owners, the insured value of the house and its substantial nature, the senior member concluded in the decision: "Accordingly, I do not consider that I should simply accept the estimate ($1.055 million) from Mr Bennett. On the other hand, I consider that the figure on the insurance certificate is far too low, as the $670,000.00 for which Mr Chand contended. Loss of profit is always an award of damages. With a fixed price contract, the assessment of damages is easy. In the case of a cost plus contract, it is impossible to be exact. Balancing out the various factors to which I have referred, I consider that a fair estimate of the total cost of the house for which the parties contracted to be built would have been $950,000.00."

39 Following the approach of Malpass AsJ in Owners - Strata Plan No 53094 and in Alex Constructions would make the complaint by the plaintiffs of a lack of evidence to support the finding as to the cost of the house unavailable as a ground of appeal. I see no reason not to follow his Honour and will do so. In any event, the challenged finding was a finding of fact based on the evidence and the material referred to in the decision. It was by no means a pure question of law so as to invoke proper recourse to s 67(1). It is, in my view, no part of the task on appeal to balance the nature and sufficiency of evidence to support a finding of fact. It is to be remembered too that the Consumer, Trader and Tenancy Tribunal, particularly in its Home Building Division, is a specialist body dealing with particular areas of knowledge and for which in deciding such disputes in such areas relevant experience is required. The Consumer, Trader and Tenancy Tribunal Act in s 28 in prescribing the general procedure of the Tribunal, as summarised earlier in these reasons, recognises the flexible, even informal, way in which the Tribunal needs to operate. The approach of the senior member in respect of the assessment of the value of the house to base an award of damages manifestly, in my view, complied with the procedure so laid down.

41 Ground 4 - Mitigation of loss: In the assessment of the first defendant's claim for damages for loss of profits, the plaintiffs complained of an error of law by the Tribunal in failing to consider the obligation to mitigate any loss and damage.

42 In reasoning the quantum of damages to award the first defendant, the Tribunal found - - The company was a small builder, operating in the medium sector of the market. - It had only two or three jobs on hand at any one time. - When the present building work came to an end the builder had no replacement contract until about seven month later.

43 It may be accepted, I think, that in a claim for damages for breach of contract the legal principle, trite as it may be, is that the wronged party is required to mitigate any loss or damage consequent on the breach. The failure by a court or tribunal in assessing damages to apply that principle constitutes an error of law. As was held in Skinner & Edwards (at 572), the misapplication of legal principles, as opposed to their mere misdescription, constituted an error of law. In showing, as I have earlier remarked, the occurrence of such an error it was necessary to show that the decision-maker had done so from what was said or because the ultimate result on the facts found indicated a wrong principle had been applied: see Chapman v Taylor (at [33])

44 From what the senior member said in this case from Mr Bennett's evidence about the size of the builder's business in the available market, the number of jobs it had at any one time and, most importantly, that a new contract for building work was not obtained until seven months after the subject contract was terminated by the plaintiffs, I do not doubt the Tribunal had in mind in assessing damages the concept of mitigation. No error in applying legal principle was shown by the plaintiffs. Ground 4, therefore, must fail.

45 Ground 5 - Repudiation of building contract: An error of law was said to have been made by the Tribunal in finding the plaintiffs had repudiated the contract without first considering the effect of statutory warranties under s 18B of the Home Building Act that the building work was to be performed in a proper and workmanlike manner and with due diligence and within a reasonable time.

46 The Tribunal's decision dealt with the circumstances in which the subject contract came to an end by the plaintiffs' repudiation of it in quite some detail. After reciting the chronology of events, the senior member in the decision expressly recorded that in order to justify a termination of the contract there had to be, as required by cl 28.3 thereof, a "substantial breach." Here, as the notice of breach issued by the plaintiffs specified, the breaches requiring rectification involved the over-excavation work and the stair steel reinforcing bars. Damages for those aspects was sought in the proceedings by the owners in the amount of $3,396.00, but Mr Chand agreed in cross-examination that a sum of $708.40 offered by the builder was fair and reasonable compensation for the over-excavation even though no rectification work was carried out; indeed, the owners converted the space into an additional room thereby, as the Tribunal found, obtaining a benefit.

47 It is to be emphasised that the builder acknowledged the need for rectification work and agreed to do it at its own cost. However, before that could be done the owners attempted to unilaterally convert the contract from cost plus to a lump sum and, when that was resisted by the builder (as was its right), they then excluded the builder from the site. From those facts, principally based on Mr Chand's evidence, the Tribunal concluded that the owners wrongly considered they were no longer bound by the contract, that they were entitled to insist that the contract be terminated and a totally different contract be entered into; by excluding the builder from the site it was found that the owners wrongfully entered into possession - those actions were found to be repudiatory.

48 The Tribunal concluded: "i. The breach of contract alleged was not substantial; ii. The Builder acknowledged the need for rectification both before and during the period of the purported notice; iii. The plans the Builder proposed to rectify were reasonable, as was the timetable it set out; iv. The Owners repudiated the contract."

49 Whether a contract has been repudiated is an ultimate question of fact. Of course, whether the facts as found are capable of satisfying the concept of repudiation in terms of legal principle involves a matter of law. Here, the Tribunal found, in effect, that the owners' actions of entering into possession and excluding the builder were repudiatory. The builder accepted the repudiation and sued for damages. I do not see any misapplication of legal principle in what the Tribunal found on the facts. Ground 5 was not made out.

50 Ground 6 - Delays as justifying repudiation of the building contract: This ground, in a sense, supplemented ground 5. It was claimed that the Tribunal misdirected itself in law in failing to consider whether the builder's delays in doing the work justified the owners entering into possession and excluding the builder.

51 The answer to this claim is that the senior member of the Tribunal did in fact consider the issue of delay in reasoning the repudiation point and concluded that "the plans the Builder proposed to rectify were reasonable, as was the timetable it set out." The senior member said on this aspect of alleged delay concerning the over-excavation and stair reinforcement work which led the owners to give the builder the notice on 6 June 2007 to rectify the breaches within 10 days: "Before the notice had been sent, the Builder had acknowledged the need for rectification, indicated how that work would be carried out and set out when the work would be done. It indicted that the work would be at no costs to the Owners, and that (being structural matters) the work would be done in accordance with engineer's specifications. For example I refer to the Builder's fax of 27 May 2008 (sic,2007). There was no evidence from the Owners that what the Builder had proposed was inappropriate to address the matters referred to. What they did say was that the work was not done in the period required by the notice." 52 The 10-day period required under the contractual notice for the rectification work to be done expired on 16 June 2007 and it was on 28 June 2007 that the owners notified the builder of the suspension of the works. The engineer's specifications for the work were contained in a report dated 20 May 2007. It is to be emphasised that under the contract the notice had to relate to a "substantial breach" but the Tribunal expressly found on the facts, as earlier outlined in dealing with ground 5, that any breach was not substantial.

53 I see no error of law as to the misapplication of legal principle relating to delay in the Tribunal's consideration whether a repudiation of the contract by the owners had occurred. Ground 6 must fail.

54 Grounds 7 and 8 - Procedural unfairness relating to expert evidence: These grounds pleaded errors of law by the Tribunal in two respects in relation to expert evidence given in a report, relied upon by the owners, by ACP as a quantity surveyor concerning overcharging by the concreter. First, it was said the Tribunal denied procedural fairness to the owners by giving the report no weight without first affording them an adjournment and/or an opportunity to remedy the defects perceived in the report in circumstances where the author of the report was not cross-examined. Second, an error of law was made by denying procedural fairness in circumstances where the Tribunal failed to advise the owners during the hearing about its concerns with the report. As support for these grounds, reliance was placed on the High Court decision of SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152.

55 Again, as with grounds 1 and 2, these two grounds were based on alleged denials of procedural fairness as to the manner in which the Tribunal conducted the proceedings before it. That, as Basten JA made clear in Obieta (at [6]), was insufficient to show, as must be done to enable a s 67(1) appeal, that there had been a decision with respect to a matter of law. Thus, and like the issues raised by grounds 1 and 2, if they are to be utilised to base a challenge then the appropriate course is through s 65 for judicial review but not by an appeal under s 67(1) on a question of law. Indeed, SZBEL is support for that approach in that it concerned a claim for prerogative relief against a decision-maker.

56 Before turning to SZBEL, so heavily relied on here by the plaintiffs, it is necessary to view how the Tribunal dealt with the report by ACP to ascertain whether there was any circumstance where it had made a decision properly appellable under s 67(1). It seems that the owners relied on the ACP report as support for their claim of overcharging for concrete and Mr Chand tendered it, without objection, into evidence. Mr Bennett made submissions against acceptance of what the report said by reference to its non-compliance with what was required for expert evidence in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705. The Tribunal found the report failed all of the Makita tests (at [85]; 743-744) and, so, gave it no weight.

57 The real complaint by the plaintiffs on appeal is that the Tribunal during the hearing should have informed them of its concerns about the report and afforded an opportunity to remedy them.

58 The decision in SZBEL is instructive in showing the distinction between judicial review proceedings and those by way of appeal. The case concerned an application for a protection visa under the Migration Act 1958 (Cth) which was refused by a delegate of the Minister and on review by the Refugee Review Tribunal the application was rejected. Then, unsuccessful appeals occurred in the Federal Magistrates Court and in the Federal Court. On judicial review of the Tribunal's decision, the High Court unanimously found there had been a denial of procedural fairness and quashed the review decision with a direction it deal with the delegate's decision according to law. The flaw found in the Tribunal's process was that if it were inclined to reach a decision by reference to an issue other than those considered dispositive by the delegate, a failure to so notify the applicant would be a denial of procedural fairness.

59 The first thing to observe about SZBEL (from [28]; 161) is that the statutory framework in which the Refugee Review Tribunal operated obliged it under s 424(1) of the statute to seek additional information considered relevant and under s 424A(1) to give an applicant particulars of certain information considered to be a reason for affirming the decision under review. As their Honours found (at [35]; 163), the Tribunal was not confined to the issues before the delegate but it was to identify the issues so that: "...if the Tribunal takes no step to identify some issue other than those that the delegate considered dispositive, and does not tell the applicant what that other issue is, the applicant is entitled to assume that the issues the delegate considered dispositive are 'the issues arising in relation to the decision under review'."

60 In terms of the statutory scheme and process available under the Migration Act, it is of much importance, it seems to me, to recognise that the Tribunal there has a function of reviewing decisions of the Minister's delegate. And, as the High Court noted in SZBEL (at [47]; 165-166), "the proceedings are not adversarial." Of course, it is to be emphasised too that the Tribunal was reviewing an administrative decision of the delegate not deciding the issue for itself at first instance. The High Court further explained in SZBEL (at [40]; 164) the nature of such migration review proceedings: "More than once it has been said... that the proceedings in the Tribunal are not adversarial but inquisitorial in their general character. There is no joinder of issue between parties, and it is for the applicant for a protection visa to establish the claims that are made"

61 In my view, the decision in SZBEL is wholly distinguishable from the present case in terms of the statutory scheme, obligations of the respective tribunals and their processes. The Consumer, Trader and Tenancy Tribunal has the function under s 48K(1) of the Home Building Act to hear and determine any building claim brought before it in which the amount claimed does not exceed $500,000.00. The proceedings before it, in my view, are inter partes and adversarial, certainly not inquisitorial, in nature. It is no part of the Tribunal's first instance function in this respect to review the administrative decision of another body but only to decide for itself between the competing cases of the parties according to the evidence and submissions put. In no way does, or should, it act in any way to advise or suggest to a party whether particular material is or is not of concern as to its adequacy but only to hear the cases put before making a final decision, including the giving of no weight to particular evidence. If it were otherwise then, I think, there would be a serious risk of an impression of prejudgement.

62 I see no error in any principle of law arising in the manner in which the Tribunal decided the issues relating to the ACP report. Grounds 7 and 8 have not been established.

63 Other complaints: Although not referred to, either expressly so or by implication, in the grounds of appeal Mr Patel in putting the plaintiffs' submissions raised a number of issues relating to what was said to be non-compliance by the senior member with the Chairperson's directions made under s 12 of the statute. Indeed, in a detailed addendum to the earlier written submissions Mr Patel particularised those aspects in his submissions in-reply. The response by Ms Painter for the third defendant was that they were directory in nature and not mandatory.

64 There is, in my view, much to be said as to what Ms Painter submitted in this respect. However, for myself I do not propose to deal with such matters or to recite them further because none of them were pleaded either in the amended summons as grounds of appeal or in the originating summons. Further still, Mr Patel made no application to further amend the summons so that such matters could properly be before the Court. Even if he had done so, one would have to seriously doubt the success of such an application coming so late in this long-running litigation, and by adding new material not previously advised to the defendants, having in mind the principles stated in AON Risk Services Australia Limited v Australian National University [2009] HCA 27.

65 The grounds of appeal do not raise any questions with respect to a matter of law within the scope of s 67(1) of the Consumer, Trader and Tenancy Tribunal Act. At most, but if at all, the issues relating to alleged denials of procedural fairness by the Tribunal would only be comprehended within judicial review proceedings under s 65(3)(b) of the statute. The appeal must fail.

66 As to costs, the parties agreed that they should follow the event in the ordinary way.

67 On 18 June 2009 in dealing with the motion to join the third defendant as a party to the proceedings, the Judicial Registrar ordered that the plaintiffs pay the costs of the motion but reserved to the trial judge the question of the application of s 99 of the Civil Procedure Act 2005 to the conduct of the motion by the plaintiffs' counsel, Mr Patel. This matter was raised, properly so, by Ms Painter at the conclusion of the appeal hearing and I further reserved it. On balance, I think the appropriate course to follow is to let the matter sit where it presently is and if the plaintiffs, as they may be advised, wish to pursue it then they may do so by motion in a separate and discrete proceeding. Mr Patel indicated any such application would be resisted. I think Mr Patel, no doubt with his instructing solicitors, and his clients should be afforded the opportunity to confer on this issue. I urge that they do so.

68 In the determination of this matter I make the following orders - (1) The appeal is dismissed.

(2) The plaintiffs are to pay the third defendant's costs of the proceedings, liability for which to be on a joint and several basis.

(3) The first and second defendants are to bear their own costs of the proceedings.

(4) Note the intended submitting appearance of the first defendant, save as to costs.

(5) Note the order made on 29 May 2009 by the Judicial Registrar removing the second defendant as a party to the proceedings.

(6) Note the order made on 18 June 2009 by the Judicial Registrar joining the third defendant as a party to the proceedings.

(7) Leave reserved to the plaintiffs to make an application by notice of motion in relation to the costs incurred by them as ordered by the Judicial Registrar on 18 June 2009.

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