Coroneos v Trade Compliance Group Pty Ltd

The jurisdiction of the Appeal Panel

1. There is no dispute that the decision of the Tribunal is an internally appealable decision for the purpose of s 80 of the Civil and Administrative Tribunal Act 2013.
2. Subs 80(2)(b) of that Act provides that an internal appeal of an internally appealable decision may be made as of right on a question of law, or with the leave of the Appeal Panel on any other grounds.
3. Where leave to appeal is sought from decisions of the Consumer and Commercial Division, leave can only be granted where the Appeal Panel is satisfied that the appellant has suffered a substantial miscarriage of justice because of one or more of the matters prescribed in cl 12 of Schedule 4 of the Civil and Administrative Tribunal Act. That cl is in the following terms 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
4. Section 81 of the Act sets out the powers of the Appeal Panel in determining an internal appeal. That section provides: 81 Determination of internal appeals (1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following: (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when varying, or making a decision in substitution for, the decision under appeal.

The appellant's Notice of Appeal and contentions

1. In her Notice of Appeal concerning her claim before the Tribunal the appellant identified the following as being her grounds of appeal: The Tribunal had no jurisdiction to hear the Appellant's claim for defective works as the Contract for which the claim was made under, was on foot at the time of the hearing. Any defects in the works as undertaken by the Respondent builder at the time of the hearing were not losses which sounded in damages to the appellant as the site remained in the Respondent builder's possession and it could remedy these defects prior to completion of the Contract. The Tribunal had no jurisdiction to determine that the works were incomplete as the Contract for which the claim was made under was on foot at the time of the hearing. The Tribunal had no jurisdiction to hear the Appellants claim for liquidated damages as the Contract for which the claim was made under was on foot at the time of the hearing. The Appellant's claim could only be heard on the issue or overpayments made by the Respondent builder in the sum of $15,500 and $14,718.00. On this remaining point the appellant was completely successful.
2. In her Notice of Appeal the appellant identified the orders sought, should she be successful in her appeal: 1. The respondent to pay the appellant a sum of $30,218.00 (i.e. $15,500 + $14,718.00) within 28 days. 2. The respondent to pay the appellant's costs of the proceedings before the Tribunal below and the appeal. 3. The appellant's claims of defective and incomplete works and liquidated damages be struck out. 4. The appellant to be granted leave to file and serve a new application for defective and incomplete works and liquidated damages.
3. In her written submissions, the appellant reiterated the abovementioned grounds of appeal. It submitted that the Tribunal erred in law in dealing with the appellant's claim in damages. That submission was based on the principles set out in Brewarrina Shire Council v Beckhouse [2005] NSWCA 248.
4. The appellant also reiterated that she was seeking orders (1) and (2) above, in the event her appeal is successful. However, she did not press orders (3) and (4) above. Instead she sought an order that her claim for defective and incomplete works against the respondent and for liquidated damages be remitted to be re-heard by the Tribunal below.
5. In her Notice of Appeal concerning the respondent's claim before the Tribunal the appellant identified the following as being her grounds of appeal: 1. The Tribunal made an error of law in the manner in which it assessed damages and did not identify the value of the works completed to date. 2. The Tribunal made an error of law in failing to identify which of the Builders payment claims were allegedly outstanding; in determining that the contract works were complete and failed to identify which variations were awarded to the builder. 3. The Tribunal made an error of law in determining that Mary Coroneos was unreasonable in withholding payment to the Builder as it did not identify the payment claim/s of the Builder which was/were paid.
6. The appellant sought an order that the respondent's claim be remitted to the Tribunal to be reheard.
7. In her written submissions the appellant contended that the Tribunal had erred in law and fact in determining the respondent's claim which has resulted in a substantial miscarriage of justice. In this regard it was submitted the Tribunal had erred in providing a single decision when it was appropriate that there be two separate decisions - one relating to the appellant's claim and the other relating to the respondent's claim. As the Tribunal had no jurisdiction to hear and determine the appellant's claim, the appellant submitted the Tribunal was not entitled to set-off the claims against each other.

The respondent's Reply to Appeal

1. In its Reply to each Notice of Appeal, the respondent contended that the appellant did not suffer a substantial miscarriage of justice and that leave to appeal should be refused.
2. In its written submissions the respondent contended as follows: 1. in regard to the appellant's claim it did not agree the Tribunal had no jurisdiction. It contended that it was common ground that neither party wished the Building Contract to be on foot and a copy of a letter, dated 14 May 2014, from its solicitor to the appellants solicitor was attached; 2. whether or not the Tribunal had jurisdiction, the Tribunal found, as a matter of fact that the appellants were not entitled to and dismissed their liquidated damages claim; 3. the appellants had a number of categories of damages and not all categories were outside the Tribunal's jurisdiction; 4. the findings of the Tribunal that it had not abandoned the building works - and that it properly suspended the building works were correct; 5. the Tribunal was not required to state what the required standard was in regard to supervision; and 6. in regard to the remaining issues identified by the appellant, clarification could be sought from the Tribunal Member.
3. The respondent otherwise contended that leave to appeal should be refused and sought an order for its costs in regard to the appeal.

The decision of the Tribunal

1. It is necessary to set the reasons of the Tribunal out in some detail as the appellant has not placed any other material before us in support of her appeal.
2. At [2] of its reasons for decision, the Tribunal described the appellant's claim as including "a number of categories of damage totalling $200,468 plus interest." These were: Rectification Works required as a consequence of an alleged failure to carry out the works in a proper and workmanlike manner. … Breach of contract requirements in relation to the procedure for variations. Breach of contract for failing to complete the work in accordance with its time provisions triggering the liquidated damages clause. Cost of professional advice consequent on the builder's alleged breach."
3. At [5] of its reasons for decision, the Tribunal explained that the respondent's (i.e. the builder's) claim was limited to the balance due under the contract (i.e. $77,614) and the amount claimed in respect to the alleged variations (i.e. $18,623.34).
4. At [8] to [10], the Tribunal set out the issues for determination. These were: "8. Whether or to what extent the works performed by the respondent were defective or incomplete as at the date it ceased work at the site. 9. Whether the homeowner was entitled to withhold payment with respect to the builder's progress claims. 10. Whether the builder had the right to suspend work pursuant to clause 24 of the contract on the basis of non-payment of progress claims."
5. At [14] to [17] and [22] to [32] of its reasons for decision, the Tribunal set out the background and evidence in regard to the applications that were before it. These can be summarised as follows:

• the parties entered into a written NSW Fair Trading form of contract on 18 June 2012. Pursuant to the contract the respondent was to conduct renovations and additions, including a new carport and boundary fence to the appellant's residential premises at Petersham. The contract amount was $310,000.00;
• the respondent commenced work pursuant to the contract around the end of June or early July 2012. The contract required the work to be completed within 29 weeks of commencement, unless an extension was granted under cl 7 of the contract;
• in the latter part of 2012, the site foreman had a perception that the respondent was not performing its job properly as he believed there had been too many mistakes and there were discussions about ending the relationship;
• the respondent continued to work on the project during January 2013 as he was desirous of completing the contract and he wanted to be paid for the work that had been done and claimed;
• in the latter part of January 2013, the respondent suspended work by issuing a notice pursuant to cl 24 of the contract as the appellant had failed to pay its progress payment claim;
• also towards the end of January 2013, the appellant lodged a complaint with the Office of Fair Trading (OFT). On 8 February 2013, the OFT wrote to the respondent setting out the appellant's concerns about a number of specific alleged defects. The letter also stated that the appellant "requests that the contract be terminated by mutual consent or that works recommence immediately;"
• the respondent responded to the OFT on 12 February 2013. In his response the respondent disputed the alleged defects and advised that it would not consent to a termination of the contract but that it was "keen and willing to return to work asap" but, it could not do so until the appellant paid its outstanding invoices;
• the OFT again wrote to the respondent on 15 March 2013 stating that the appellant's son, on behalf of the appellant, had indicated that she was refusing the respondent access to the property on the grounds it was believed the respondent was "incapable of correcting the defective work in a compliant manner."

1. The Appeal Panel notes that, three days after this communication, the appellant's son, on behalf of the appellant, lodged her claim the subject of the decision below. That claim, as we have noted was heard some 12 months later.
2. At [17], of its reasons for decision, the Tribunal noted that it had before it a Joint Memorandum of Conclave dated 17 September 2013. At [19], the Tribunal noted that the appellant's documents included a scope of works, an expert report of Mr John Worthington and a Scott Schedule. Earlier in its reasons for decision, at [12], the Tribunal noted no oral evidence was called at the hearing. We note both parties were legally represented at the hearing before the Tribunal.
3. At [33] to [45], the Tribunal identified and described the disputed items that were said to be "defective or incomplete work". The items were said to be dealt with in the order they appeared in the Scott Schedule. The appellant has not questioned the Tribunal's description of the background to the dispute, or the items that were identified as being in dispute.
4. At [46] to [49], the Tribunal set out the submissions of the parties as follows: "46 The homeowner relying on the evidence of JW [Mr Worthington] submits that the contract was breached by the builder in the following respects: -There was no evidence that the builder's nominated supervisor was ever present or in any way involved in the works at the premises. - The standard of works do not comply with the Australian Standards and the BCA. - The builder failed to carry out the works in a proper and workmanlike manner. - The cost of rectification/completion of the works based on the Cordells Cost guide is $130,301.85. - The builder charged a site establishment fee of $15500 in addition to the deposit contrary to Clause 12 of the contract. 47 The homeowner further asserts that the builder abandoned the job for no justifiable reason and contrary to the builder's assertion, claims that the builder was never denied access to the premises. … 48 The homeowner's submissions do not articulate further the particular clauses of the contract which are relied upon in support of its position that it was entitled to terminate the contract and resume possession of the premises. However in its POD [Points of Defence] and correspondence it has indicated reliance on Clause 12 of the contract on the basis that it asserts the amount withheld was reasonable having regard to the extent of the defective and incomplete work as determined by JW. 49 The builder's submission asserts a failure by the homeowner to pay progress claims as a basis pursuant to clause 24 of the contract for its suspended work. Further it asserts that it was wrongfully denied access to the site by the home owners which by its conduct repudiated the contract. It is submitted that it is entitled to enforce its right to damages under the contract consequent upon the homeowner's alleged breach."
5. At [50] to [66], the Tribunal set out its consideration and findings of the matters in issue.
6. At [50], the Tribunal said: "50 The key issue for determination by this Tribunal is whether homeowner's failure to pay the progress payments can be established to have satisfied the criteria expressed in Clause 12(a) of the contract which states as follows: "the owner may withhold from the progress payment, an amount estimated by the owner, acting reasonably, equal to the owner's estimate of the value of the disputed item.""

Consideration

1. The main grounds of appeal are: 1. whether the Tribunal had "jurisdiction" to hear and determine a claim for damages for defective and incomplete work as the contract between the parties had not been terminated, and 2. whether the Tribunal erred in determining the appellant was unreasonable in withholding payment.
2. Before we deal with these grounds and the remaining grounds it is convenient to briefly set out some of the provisions in regard to the Tribunal's jurisdiction under the Home Building Act 1989.
3. The Tribunal's jurisdiction under the Home Building Act 1989 is found in Division 3, 4, 5 and 6 of Part 3A of that Act. Part 3A makes provision for "resolving building disputes and building claims."
4. Subsection 48K(1) in Division 3 (making an application for determination of a building claim) provides that the Tribunal has jurisdiction to hear and determine any "building claim" brought before it in accordance with that Part (i.e. Part 3A) in which the amount claimed does not exceed $500,000. The words "building claim" are defined in s 48(1) of Division 1 of Part 3A of the Act.
5. There is no dispute that the appellant's claim and that of the respondent that were before the Tribunal were a "building claim" falling within s 48K(1) of the Home Building Act and one the Tribunal had jurisdiction to hear and determine. At [2], [3] and [5] of its reasons for decision, the Tribunal described the respective claims of each party as a claim for "damages" arising from a breach of contract. That is, each claim sought an order for the payment of money.
6. The powers of the Tribunal in determining a building claim are set out in s 48O of Division 5 of Part 3A (powers of the Tribunal). That section relevantly provides: 48O Powers of Tribunal (1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate: (a) an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, (b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, (c) … (2) …
7. In her Notice of Appeal, the appellant appears to have conceded that her claim before the Tribunal included a claim for damages for breach of contract and defective and incomplete work. This, she now concedes was premature, as the contract between her and the respondent had not been terminated as at the day of hearing.
8. Although the appellant contends that the issue as to whether the contract had been terminated is a matter going to the Tribunal's jurisdiction to hear and determine her claim for damages, for the reasons set out below, this is not an issue going to the Tribunal's jurisdiction. It is an issue relevant to the question as to whether a claim for damages has arisen at the time of hearing. This will depend on the terms of the contract between the parties and the circumstances. Ultimately, the question of when and by whom a contract is terminated is a question of fact.
9. The only evidence before the Appeal Panel, as to the position of the parties at the time of the hearing, is that contained on page 16 of the transcript of the hearing before the Tribunal. On this page the following interchange between the solicitor for the respondent (Mr MacCallum), the Tribunal Member and the solicitor for the appellant (Ms Simms) is recorded: MACCALLUM: Member, I would just like to say there are two reports. I put them forward separately so as you may accept one and reject another: that's what I've sought to do. MEMBER: And the cost to complete is relevant to - is this situation in this one the same in terms of - MACCALLUM: I understand that the home owner is not inclined to have the builder back and the builder is not inclined to return. MEMBER: And there's been no - SIMS: Termination of the contract, no. MEMBER: -- termination of the contract, so the home owner hasn't (indistinct) the - SIMS: No MEMBER: --- breach (indistinct) MACCALLUM: I can't say. I haven't read enough of the correspondence.
10. The interchange arose in the context of Mr MacCallum seeking to tender, on behalf of the respondent, two reports in response to the report of Mr J Worthington, dated March 2013 and prepared on the instructions of the appellant. The Tribunal disallowed the tender of these additional reports ((Transcript of 23.04.2014, at p 21).
11. During the hearing of the appeal, Mr MacCallum conceded that the contract had not been terminated as at the date of the hearing. He and Mr Snellgrove, the solicitor for the appellant, agreed that the contract was ultimately terminated sometime after 14 May 2014. This was some four to five weeks after the hearing after the respondent's solicitor wrote to the appellant's solicitor.
12. The Tribunal made no specific findings as to whether the contract was or was not on foot at the time of hearing. While the Tribunal made a number of references to the appellant's conduct being consistent with wishing or being "entitled" to terminate the contract (e.g. at [48]) it did not make any definitive finding in this regard.
13. It is evident from the Tribunal's reasons for decision that each party made a claim of alleged breach of the contract by the other party and that such alleged breaches were alleged to be a repudiation of the contract.
14. However, at no time did the Tribunal make a finding that the contract between the parties had been terminated by agreement, or by a party having accepted a repudiation of the other party. In our view, based on the appellant having made a claim for damages in regard to the defective and incomplete work, this was a material finding of fact the Tribunal should have made in determining whether a claim for damages could be made.
15. In light of the concession of the respondent, it is unnecessary for the purpose of this appeal to determine exactly when, by whom and why the contract was terminated. However, it is a matter that will need to be determined by the Tribunal on reconsideration.
16. The parties agreed that the principles set out in Brewarrina Shire Council v Beckhouse Civil Pty Ltd [2005] NSWCA 248 (Brewarrina v Beckhouse) were equally applicable to a home owner's right to seek damages, from a builder, for defective and incomplete home building work prior to the contract having terminated.
17. In Brewarrina v Beckhouse, the appellant (the Council) and the respondent (Beckhouse) had entered into a contract for the construction of levee banks around the town of Brewarrina. In March 2002, Beckhouse wrote to the Council advising that the work had reached practical completion and requested certification of that fact. The Council's superintendent refused Beckhouse's request, upon which Beckhouse lodged its progress payment. The Council refused to pay and Beckhouse commenced proceedings against the Council claiming the progress payment amount and money owing in respect of two variations under the contract.
18. The Council filed three cross claims. In one cross claim the Council alleged Backhouse had not completed the work in accordance with the contract and as a consequence had suffered loss and damage being the cost of rectification.
19. At [68] and [69], in Brewarrina v Beckhouse, his Honour Justice Ipp made the following observations in regard to the Council's claim: "[68] While, on this assumption (the Contract still being on foot), the Council may have been entitled to claim damages for delay arising out of Beckhaus' failure to achieve practical completion by the date for practical completion, it could not sue Beckhaus for defective or incomplete work. As long as the Council maintained that the Contract was alive and had not been terminated, and held Beckhaus to its obligation to complete the work in accordance with the specification, on its contention the work remained lawfully in Beckhaus' possession. In other words, it was an inevitable incident of the Council's argument that the work had not been delivered to and accepted by the Council (Beckhaus - on the Council's argument - being in possession of and obliged to complete the work). While the work was in Beckhaus' possession, the Council suffered no loss by reason of defective or incomplete work; the work, not being in the Council's possession, did not at that stage form part of its patrimony. [69] This situation would have changed when the Contract was terminated. When that occurred, the work (in its defective and incomplete state) was handed over to the Council. At that stage, the Council suffered loss by being in possession of defective and incomplete work."
20. The abovementioned principles are uncontroversial, yet it is unclear from the Tribunal's reasons for decision on what basis it made its findings about the alleged the defective and incomplete work.
21. As we have noted, the Tribunal's approach to the claims that were before it was to first and foremost consider the respondent's claim that the appellant had breached clause 12(a) of the contract by failing to pay the respondent's progress payments. In determining that question the Tribunal had regard to the "disputed items", namely the defective and incomplete work: see at [34] to [35] of the Tribunal's reasons for decision. The Tribunal found that the appellant's estimate of the value of the defective work was inflated and on this basis found that the appellant had not acted reasonably in withholding the progress payments. The Tribunal went on to find that the appellant's conduct "constituted a substantial breach of its (sic) contract with the builder": (see at [60]) of the Tribunal's reasons for decision). What the Tribunal meant by the words a "substantial breach" and what consequence (if any) it had on the contractual relationship between the parties was not explained other then to find that the respondent's action in suspending its work was justifiable. For the reasons set out below we have found the Tribunal erred in law in reaching these conclusions.
22. The Tribunal's consideration and findings in respect of the appellant's claim of alleged breaches by the respondent are found at [62] of its reasons for decision. In regard to the alleged "poor workmanship, non compliant work and incomplete" (described as claim 2) the Tribunal found that the work was defective and incomplete to the extent of its findings, at [34] to [45], concerning the "disputed items" identified by the conclave. In making these findings, the Tribunal did not find that the defective and incomplete work amounted to a breach of the contract by the respondent. Nor, on the concession of the parties, could it have made such finding on the above principles of Brewarrina v Beckhouse as the contract remained on foot.
23. Nor did the Tribunal identify or explain the legal basis on which it went on to value the defective and incomplete work and the orders it made.
24. In our view, the Tribunal's error primarily lies in its failure to make material findings of fact and the inadequacy of its reasons, which is an error of law: see Prendergast v Western Murray Irrigation Pty Ltd [2014] NSWCAPT 69, at [13].
25. It is well accepted that the Tribunal has a common law duty to give reasons and where reasons are given, the statutory requirements in s 62 of the Civil and Administrative Tribunal Act 2013 apply: see Collins v Urban [2014] NSWCATAP 17 at [47] ff. For the reasons we have given above, the Tribunal's reasons for decision are inadequate as the Tribunal failed to make material findings of fact (e.g. whether the contract was on foot or had been terminated at the time of the hearing) and failed to explain or discuss the law it applied to make the findings it made in regard to the defective and incomplete work.

Error in determining the appellant was unreasonable in withholding payment

1. We agree the Tribunal erred in determining that the appellant was unreasonable in withholding payment of the respondent's progress payments.
2. As we have noted, cl 12 of the contract enabled the appellant to withhold money from a progress payment issued under the terms of the contact. What could be withheld was the value of the "disputed item." In this case the appellant's claim identified a number of items that were in dispute, which included the defective and incomplete work, the variation amounts and the $15,500 establishment fee that had been paid and charged contrary to cl 12 of the contract.
3. The Tribunal, however, only had regard to the defective and incomplete work as described at [34] to [45] of its reasons for decision.
4. Clause 12(a), as we have noted, provides that an owner may withhold from the progress payment, an amount estimated by the owner, acting reasonably, equal to the owner's estimated value of the disputed item (emphasis added).
5. That is, an owner must show he/she acted reasonably in estimating the value of the disputed item(s) in order to withhold that amount from a progress payment. What is reasonable will depend on the circumstances and the contractual relationship between the parties.
6. On the material before the Appeal Panel, the appellant put the respondent on notice about the disputed items in late 2012 and early 2013 that no further payments would be made until that work was rectified. It is our understanding that it was these matters the appellant referred to the Office of Fair Trading under s 48C of the Home Building Act. If this was correct then these were matters in dispute (i.e. the matters the subject of the building dispute).
7. We note that in her original application the appellant sought an order that she not be required to pay the progress payments because of the defective and incomplete work, the $15,500 establishment fee overpayment and the value of the PC items for which she had paid and the respondent had not supplied having paid for PC items that had not been supplied. As we have noted, the Tribunal has power to make an order of this kind under s 48O(1)(b) of the Home Building Act.
8. We note from the Tribunal's reasons for decision the issue of the PC items had largely been resolved at the time of hearing. The only matter remaining in issue was a sum of $3,000 for PC items that had not been returned.
9. Whether the appellant pursued her claim for an order of the kind set out in 48(1)(b) is not clear. However, what is clear from the Tribunal's reasons is that the appellant relied on cl 12(a) as a defence to the respondent's claim that she had breached that clause by failing to pay the progress payments when they were due and payable: see at [51] of the Tribunal's reasons for decision.
10. The Tribunal did not explain what it understood cl 12(a) to mean, in particular what the appellant needed to establish in order to be able to rely on that provision. Nor did it explain what was meant by the words "disputed item" within the context of the Home Building Act or the terms of the contract between the parties. The Tribunal's approach to this defence was to describe what the respondent needed to establish in order to show it was entitled to suspend the works under cl 24: see at [52] of the reasons for decision where the Tribunal said the respondent needed to establish that the appellant's conduct in suspending the payment of its progress claim was unreasonable and a breach of contract.
11. As we have noted above, no such onus rested on the respondent. It was for the appellant to establish she had acted reasonably in estimating the value of those items she disputed and which arose from the respondent's agreed supply of building goods and services to her and the amount she was withholding was equal to that estimate. If the appellant failed to do so, the respondent was entitled to be paid the progress amounts and give notice under cl 24 of the contract. If she was successful in establishing her cl 12(a) defence, the respondent did not have grounds to issue its cl 24 notice of suspending work.
12. In dealing with the evidence, the Tribunal rejected the appellant's costs assessment as set out in the Scott Schedule. It did so on the basis of the "costs of rectification/completion" in the Schedule were based on a third party undertaking the work and on this basis were not relevant to a determination of the reasonableness of the appellant's conduct in withholding payment of a progress claim under cl 12 of the contract: see at [56] of the Tribunal's reasons for decision. Instead the Tribunal accepted the respondent's willingness to rectify the major items of concern and the respondent's evidence that the cost to do the work was "small relative to overall progress claim amounts": see at [57] of the Tribunal's reasons for decision.
13. Having made these findings, the Tribunal went on to assess the quantum of the disputed items in the appellant's claim. In assessing quantum, the Tribunal made an allowance of $42,280.73 for the defective work and the PC items. The allowance was based on the estimates provided by Mr Worthington on behalf of the appellant. In addition to this allowance, the Tribunal made an allowance for the $15,500 over payment amount, bringing the appellant's total claim to $60,780.73, which was about $9,000.00 less than the two outstanding invoices for which the respondent had sought payment at the time it issued the clause 24 notice: see at [55] of the Tribunal's reasons for decision.
14. In our view, the Tribunal's findings in regard to quantum of the appellant's claim is in direct conflict with the out-right rejection of the appellant's estimate as to the value of the disputed items and the acceptance of the respondent's evidence. This finding as to quantum is also inconsistent with the Tribunal's findings that the appellant's estimate of the disputed items was inflated and that she had breached cl 12. The Tribunal only set out the terms of cl 12(a). This was clearly not the entirety of that section. Whether it contained any further matters relevant to the alleged breach we are unable to say as the appellant did not provide the Appeal Panel with a copy of that clause or the contract between the parties.
15. In our view, the Tribunal erred in law in failing to correctly construe and apply cl 12(a) to the material before it. This failure, in our opinion, also led it into error in its findings that the appellant breached cl 12(a) of the contract and that the respondent was entitled to issue a notice to suspend work under cl 24.

Failure to identify the value of the works completed by the respondent and

Failure to identify which of the respondent's payment claims were outstanding

1. It is convenient to deal with these issues together as they are related to each other.
2. In the absence of any material on which the appellant relied in respect of the value of completed work, it is not possible to determine whether the Tribunal erred in failing to: (a) identify the value of the works completed by the respondent, or (b) failing to identify which of the respondent's payment claims were outstanding.
3. As we have noted, at [5], the Tribunal said that the respondent's claim was limited to the balance due under the contract. This was a sum of $77,614. At [55], the Tribunal referred to there being two outstanding invoices (i.e. progress payment claims) totalling $69,000 at the time the respondent suspend its work. However, at [72] the Tribunal again calculated the balance outstanding on the basis of the balance due under the contract.
4. Whether there is an inconsistency in these findings is difficult to assess in the absence of being provided with the relevant terms of the contract and copies of the progress claims that were issued by the respondent. In any event, it is unnecessary for us to determine this issue as we have allowed the appeal in respect of the respondent's claim for the balance due under the contract on grounds other than these.

Provision of a single decision when it was appropriate to that there be two separate decisions

1. In our view, the Tribunal did not err in providing a single decision. That is, the Tribunal was entitled to account for the amounts it had determined in respect of the appellant's claim against the amount it had determined in respect of the respondent's claim. The errors, as we have explained lay in the manner in which the Tribunal determined each claim and its failure to give adequate reasons in identifying and explaining the applicable law on which its findings were based and the reasoning which led it to make the findings on which its orders were based.
2. The Appeal Panel has however, recognised that where an appeal is successfully made against a single order in regard to two applications, practicalities and fairness may require both applications to be remitted for rehearing even though error has only been found in regard to one application: see SHH Ltd v Woodorth Plumbing Services Pty Ltd [2014] NSWCATAP 46 at [21] and [22].

Conclusions in regards to the appellant's appeal

1. For the reasons set out above we have found that the Tribunal erred in law: 1. in its failure to make a material finding of fact as to whether the contract had been terminated at the time of the hearing, 2. in failing to provide proper reasons by failing to identify and explain the legal basis on which it made its ultimate findings in respect of the appellant's claim for defective and incomplete work, and 3. in misconstruing cl 12(a) of the contract and its application to the matters before it.
2. In light of these errors, we allow the appellant's appeal in regard to the following claims that were before the Tribunal: 1. the appellant's claim for defective and incomplete work and liquidated damages; and 2. the respondent's claim for the balance due under the contract.
3. The abovementioned claims are remitted to the Consumer and Commercial Division for reconsideration, without further evidence, except where relevant to the issue of when the contract was terminated and, subject to leave by the Tribunal, any updated evidence as to the issue of quantum of damage.
4. We do not consider it appropriate for the appellant to be granted leave to amend her claim for defective and incomplete works and liquidated damages. However, in light of the passage of time and the respondent's failure to undertake the work as indicated at the hearing before the Tribunal, with leave of the Tribunal the appellant should be given the opportunity to file and serve up-dated evidence as to the quantum of damage, if actual rectification work has been undertaken. If the appellant is granted leave to adduce further evidence on that limited basis, it must follow that the respondent should also be granted leave to file and serve evidence in response there to.
5. No appeal was made in regard to the Tribunal's findings in regard to; (a) the appellant's overpayment claim (i.e. $15,500.00), or (b) the allowable variation amount (i.e. $7,260.00) as per the respondent's variation payment claim (see at [62.3], [65] and [72] of the Tribunal's reasons for decision). Accordingly, these claims and findings have not been disturbed and should not be re-litigated. Nevertheless, they remain relevant to a final determination of all claims between the parties.
6. For these reasons we set aside the order made by the Tribunal that the appellant pay the respondent a sum of $24,093.37 within 28 days (order 1). We make no orders in regard to the order of the Tribunal that there be no order as to costs (order 2). While the appellant sought to have that order set aside, in our view there is no basis to do so. We have dealt with this briefly below.

Costs

1. In Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120, at [7 to 9] the Appeal Panel held that the applicable provision in regard to cost orders in appeal proceedings arising from a Home Building Claim in the Consumer and Commercial Division was s 60 of the Civil and Administrative Tribunal Act. That is, rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) did not apply: see also Reskella v Xiang [2015] NSWCATAP 23.
2. Under s 60 of the NCAT Act, the general rule is that each party is to pay their own costs: see subs 60(1). However, subs 60(2) of the NCAT Act gives the Tribunal (including the Appeal Panel) a discretion to award costs if "satisfied that there are special circumstances warranting an award of costs." Subs 60(3) of that Act specifies the matters to which the Tribunal may have regard when considering whether or not special circumstances exist. That subsection is in the following terms: 60 Costs … (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
3. Neither party made specific submissions in regard to their respective application for costs in the appeal or the proceedings below.
4. As we have not set aside the order 2 of the Tribunal below (no order as to costs), we make no further finding in this regard.
5. While the appellant has been successful in her appeal, that success was based on errors made by the Tribunal in regard to a claim she concedes to have been made prematurely. In our view, on the basis of that concession it cannot be argued that special circumstances arise warranting an order for costs in the appeal.
6. We make a similar finding in regard to the respondent's application for costs in this appeal. The respondent has not argued that the appellant conducted herself in this appeal in a manner giving rise to special circumstances that warrant an order for costs in its favour. As we have noted, the respondent conceded the basis on which the appellant had lodged her appeal (i.e. the contract had not been terminated as at the date of hearing).

Orders

1. For the reasons set out above we make the following orders: 1. The appeal is allowed in respect of the following claims: 1. the appellant's claim for defective and incomplete work and liquidated damages; and 2. the respondent's claim for the balance due under the contract. 1. Order 1 of the Tribunal made in proceedings HB 13/14835 and HB 13/21970 on 2 January 2015, in the Consumer and Commercial Division, is set aside. 2. The proceedings are remitted to the Consumer and Commercial Division for reconsideration of the claims referred to in order 1 of these orders, in accordance with law and without further evidence, except as to the issue of when the contract was terminated and subject to leave, by the Tribunal, any updated evidence as to the issue of quantum of damage. 3. The appeal is otherwise dismissed. 4. The application for costs of each party is refused.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 November 2015