DB Homes Pty Ltd v D'Souza

REASONS FOR DECISION

1. This Appeal arises out of a decision in the Consumer and Commercial Division of the Tribunal which awarded the present respondents damages of $9,800.00 by reason of the late completion of the construction of a granny flat by the appellant. There is no dispute that the present respondents intended that the granny flat would be rented, and the appellant was aware of that fact.
2. The appellant seeks an order from the Appeal Panel setting aside the order of the Tribunal at first instance and replacing it with an order that the appellant is not required to pay the respondents any money.

The decision at first instance

1. On 30 October 2017 the parties entered into a contract whereby in consideration of the respondents paying the sum of $102,600.00, the appellant was obliged to construct a 'Rear yard Granny Flat - 36.0 m² (one bedroom)' in compliance with the terms and condition of the contract.
2. The appellant's submissions state that the building work was practically complete on 15 July 2019. That was some 1.75 years after the contract was signed.
3. The proceedings at first instance (and these Appeal proceedings) concerned themselves with the interpretation of the appellant's contractual and other obligations to complete the building works by an ascertained time and its liability to the respondents in the event that it breached those obligations.
4. On 24 January 2020 after a hearing, an order was made in the Tribunal requiring the appellant to pay the respondents $9,800.00. The order stated that 'Detailed oral reasons were provided to the parties at the hearing'. The appellant requested written reasons which were provided to the parties on 2 April 2020.
5. The Tribunal Member after considering the contract, the provisions of the Home Building Act 1989 (the 'Act') and the evidence found that the appellant was 35 weeks late in completing the granny flat and that the appropriate weekly rate of damages was $280.00. These findings led the Tribunal Member to order damages of $9,800.00 in favour of the respondents.
6. We will return to the issues of the Contract, the Tribunal Member's findings and the relevant provisions of the Act where appropriate in the course of these Reasons.

The basis of the Appeal

1. The Notice of Appeal states the Grounds of Appeal to be that the Tribunal: 1. Failed to determine the correct contractual start and finish dates of the project; 2. Failed to determine the actual construction duration; and 3. Didn't consider the evidence submitted by the appellant.
2. The Notice of Appeal also stated that the Tribunal decision was not fair and equitable for the following reasons which we have summarised: 1. The contract contained no intention or indication for any damages or compensation to be paid for delay to completion, otherwise the appellant would have allowed for delay in the contract price; 2. there is no agreed specific completion date in the contract; 3. the estimated construction period stated in the contract is 84 business days starting from the date of pouring the concrete slab which was on 22 February 2019; 4. the project reached practical completion in 101 business days from 22 July 2019 which included 29 days for rain; and 5. after taking into account extensions of time for rain, the building works were completed within the contractual period of 84 business days as referred to.
3. The respondents oppose the Appeal. Their Reply to Appeal supports the decision at first instance, but states that the amount awarded was less than what they expected. Their submissions seek to introduce new evidence to establish that the delay period should be increased by a further five (5) month period.

Internally appealable decisions

1. The decision of the Tribunal below is an internally appealable decision and an appeal can be made from that as of right where there is an error of law, and with the leave of the Appeal Panel on specified grounds: see, s 80(1) and (2)(b) of the Civil and Administrative Tribunal Act 2013 ('NCAT Act').
2. As the decision the subject of appeal is a decision of the Tribunal in the Consumer and Commercial Division, the Appeal Panel may only grant leave to appeal where it 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). (see NCAT Act, Sch 4, cl 12)
3. In John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 ('Prendergast') an Appeal Panel stated at [12]: 'In circumstances where the appellants are not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally. It is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent.' [Emphasis ours]
4. In these proceedings the parties are not legally represented. In accordance with what was stated in Prendergast, we will consider the Notice of Appeal and the submissions in support to ascertain whether the issues raised by the appellant are questions of law for which no leave is required, or subjects for which leave is required. We are of the view that what was stated in Prendergast does not require us to re-formulate the appellant's Grounds of Appeal to an extent that would change their nature or effect. To do so would cause significant injustice to the respondents, unless they were informed of such re-formulated Grounds of Appeal in sufficient time for them to consider and respond. The decision in Prendergast recognizes this, as cited above.
5. We are of the view that the Grounds of Appeal that the Tribunal failed to determine the: 1. correct contractual start and finish dates of the project; and 2. actual construction duration; are questions of law because they raise issues of the construction of the contract and the process of reasoning and the finding of material facts essential to the issue to be resolved.

The relevant contractual provisions

1. It is at this point that a consideration of the relevant contractual provisions will assist in an analysis of the issues that were before the Tribunal Member and which are also before us for determination.
2. The contract which was not in a standard form published by an industry body or the Department of Fair Trading, set out a payment schedule with seven (7) payments. There were seven (7) 'Stages' corresponding to the seven (7) payments. For the purposes of this Appeal stages 1 - 3 are relevant. Those stages were: 'Stage Definitions for Design & Approval Payment Schedule 1. Prior to any works commencing. 2. Client has approved design plans - inclusive of Site Plan, Elevations & Floor plan Stage Definitions for Construction Payment Schedule 3. At Completion of Concrete Slab or Bearer & Joist Floor System.'
3. For the purposes of payment, the first three payments were stated to be: NO Design & Approval Payment schedule
4. Design Stage
5. Approval Stage NO Construction Payment schedule
6. Base stage

1. The special conditions to the contract allowed extensions of time for, among other things, rain and inclement weather. Importantly, the special conditions stated: 'Construction Period - Estimate 84 business days from Concrete Slab Stage. (A four week period over Christmas & New Year is excluded from the above Construction Time frame).'
2. The contract included a detailed Scope of Works, 'Job Specific Inclusions and Conditions', a schedule of PC Items and Provisional Sums, a Latent Conditions price schedule and provisions for site possession and access in the form of a 'Site Possession and Access Agreement'. The contract did not include general conditions. The reference to conditions in the 'Job Specific Inclusions and Conditions' section of the contract is a misnomer in that this section does not contain 'conditions' as that term is usually understood in building contracts.
3. Relevantly, the contract stated that the builder would comply with the statutory warranties contained in s18B of the Act.
4. We find that the 84 business day construction period commenced when the stage 3 work was commenced. It is our view that the plain meaning of the words 'from Concrete Slab Stage' is that it is the commencement of this work that is referred to for the start of the counting of the 84 day period.
5. In that regard the Payment Schedules and the Stage definitions serve the purpose of stating the amounts in which payments are to be made, when the stages referred to are completed.
6. We also find that the contract did not provide for the commencement of the work to be carried out under the contract, either by reference to a date or specific events. In addition, the contract did not provide a time period for the completion of stages 1 and 2.

The parties' submissions

1. The appellant submitted brief written submissions in support of its Notice of Appeal that repeat what is stated in the Notice of Appeal. Copies of some parts of the transcript have also been provided.
2. The respondents also provided written submissions in support of their Reply to Appeal which oppose the orders sought by the appellant. Their submissions to some extent repeat the evidence before the Tribunal. They also addressed their fresh evidence point to which we have referred, attaching a number of documents and a copy of the evidence before the Tribunal at first instance, some of which is unfortunately, not legible. As we have stated the respondents are self-represented. Their submissions do not address the alleged errors of law raised by the appellant.

The errors of law raised by the appellant

1. We will consider the Grounds of Appeal set out in section B of the Notice of Appeal

The Tribunal failed to determine the correct contractual start and finish dates of the project

1. The contract did not provide provisions which required the appellant to start the stages of work that we have referred to by any particular date or by reference to specific events, such as the issue of a construction certificate. We agree that the Tribunal Member did not determine a date by which the contract was to commence, which is not surprising since no such date was stated in the contract. However the Tribunal Member did at [6] find that the contract was signed on 30 October 2017 and that the present respondents paid for the design and approval stage on 31 October 2017.
2. We find that the Tribunal Member effectively found that the contract commenced on 31 October being the date when the present respondents discharged their obligation to pay for stages 1 and 2 being the design and approval stages.
3. At [15] of his reasons the Tribunal Member found that the only time for completion prescribed in the contract was, subject to allowable variations, a construction period estimate of 84 business days from the concrete slab phase.
4. In our view the Tribunal Member accurately found the contractual time period for completion of the project by reference to the 84 day period (emphasis added to denote the date required by the contract for completion). Insofar as the appellant states that the Tribunal Member failed to determine the correct 'finish dates of the project' (emphasis added to denote the actual date of completion), we reject the suggestion that there was any such failure. At [7] of his reasons the Tribunal Member found that practical completion occurred on 22 July 2019, that an occupation certificate was received on 13 August 2019 and that the project was regarded as completed with a key handover on 16 August 2019. Any one of these dates was sufficient to constitute the finish date of the project.
5. The appellant's submissions do not state what it regards as the correct contractual start and finish dates of the project to enable an evaluation to be made whether the Tribunal Member's findings were in error, and if so whether the error made any material difference to the outcome
6. We reject this ground of appeal that the Tribunal Member failed to determine the correct start and finish dates of the project.

The Tribunal failed to determine the actual construction duration

1. In our view the Tribunal Member determined the actual construction duration and made the relevant findings in his Reasons for decision. At [6] of his Reasons the Tribunal Member found that excavation commenced some time in July 2018 and was completed on approximately 22 February 2019. At [7] of his reasons the Tribunal Member found that payments were made for the construction stages with the Practical Completion payment being made on 22 July 2019. He further found that an occupation certificate was received on 13 August 2019 and that the project was regarded as completed with a key handover on 16 August 2019.
2. Although the Tribunal Member did not determine the actual construction duration in terms of the total number of days, either calendar or business, his Reasons disclose that he found that construction (excavation) commenced some time in July 2018 and that practical completion occurred on 22 July 2019.
3. We reject this ground of appeal that the Tribunal Member failed to determine the actual construction duration. His reasons for decision plainly reveal that he did determine the actual construction duration, being 22 February 2019 - 22 July 2019.
4. We will now consider the errors of law which we consider are raised in the section of the Notice of Appeal titled 'Decision not fair and equitable'

No intention or indication for damages compensation for any delays

1. This ground of Appeal may be disposed of on two bases. First, so far as we can ascertain, this was not an issue that was raised before the Tribunal Member. For that reason it cannot be raised on appeal.
2. In Scarano v Palm Pools and Spas Pty Ltd [2019] NSWCATAP 79 an appeal Panel stated at [49] and [50]: 'The principles governing the question of whether an appeal body should allow a new ground to be raised on appeal were the subject of consideration by the High Court in Coulton v Holcombe (1986) 162 CLR 1. In that case, Gibbs CJ, Wilson, Brennan and Dawson JJ said at 7-8: "To say that an appeal is by way of rehearing does not mean that the issues and the evidence to be considered are at large. It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise. In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards." In Gan v Shop 3, 228-230 Hanvaylee Parade Kensington Pty Ltd [2016] NSWCATAP 210 at [55], after referring to Coulton v Holcombe, the Appeal Panel commented that "[t]he considerations favouring finality of litigation are at least as strong, and probably stronger, in the case of the Tribunal given the importance attached to the expeditious and inexpensive disposition of proceedings under the [NCAT] Act."'
3. Secondly, it is trite law that damages may be assessed upon the proof of a breach of contract. It is not necessary for the contract to provide for the availability of damages. In context of proceedings in the Tribunal brought pursuant to the Act, which the proceedings at first instance were, s48O(1)(a) provides the power for the Tribunal to make an order for damages.
4. Insofar as the applicant states that there was no intention for there to be damages for delay, in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104 French CJ, Nettle and Gordon JJ stated at [46] and [50]: [46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. [50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations. (emphasis added)

There is no agreed specific completion date in the contract

1. We understand this ground of Appeal to be that since there is no agreed specific date for completion in the contract, the appellant cannot be found to have breached the contract by failing to complete by a date that either does not exist or has not been agreed.
2. At [23] we found that the contract provided that the construction period would be 84 business days commencing from the concrete slab stage, excluding a four (4) week period for Christmas and New Year.
3. The contract is unusual in that it does not provide a time for completion of stages 1 and 2. Having referred to s18B(1)(d) of the Act, the Tribunal Member addressed this issue at [17] of his Reasons. We agree with what the Tribunal Member stated: 'Whilst the time for completion is defined in relation to the time from concrete slab stage there is nothing in the present agreement to define the time from the commencement of the contract up to the concrete slab stage and in relation to that period the warranties prescribed under S 18B of the act must apply.'
4. S18B(1)(d) of the Act provides a warranty: 'that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time,'
5. The Tribunal found that in connection with the stage 1 and 2 work, the effect of s18B(1)(d) was that work was to be completed within a reasonable time. As regards stages 3 - 7 of the works, the contract provided that the construction period would be 84 business days excluding a four (4) week period for Christmas and New Year of the work.
6. We find that the contract provided a mechanism measuring the time for completion of stages 1 and 2, which would be within a reasonable time and stages 3 - 7 which would be within 84 business days excluding the four (4) week Christmas New Year period, and also subject to any extensions of time allowed for by the contract.
7. For the reasons provided, we reject this ground of Appeal.

The Tribunal Member didn't consider the evidence submitted by the appellant

1. If the Tribunal Member overlooked or failed to consider evidence which supported the appellant's case, that will be an error of law.
2. In Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 McColl JA, with whom Ipp JA and Bryson AJA agreed, said at [62] - [63]: "[62] In Beale (at 443) Meagher JA referred to the requirement that a judge should refer to evidence which is important or critical to the proper determination of the matter as the first of the three fundamental elements of a statement of reasons. While his Honour explained that it was unnecessary to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered, he added that where such evidence was not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it, referring to North Sydney Council v Ligon 302; see also TCN Channel Nine Pty Ltd v Anning [2002] NSWCA 82 ; (2002) 54 NSWLR 333 at [150] per Spigelman CJ (Mason P and Grove J agreeing). Meagher JA added that "[w]here conflicting evidence of a significant nature is given, the existence of both sets of evidence should be referred to." [63] Where, as in the present case, there is documentary material arguably supporting a party's case, that material must be considered in the judge's reasons in a satisfactory way: State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3 ; (1999) 73 ALJR 306(at [94]) per Kirby J." [Emphasis ours.]
3. The appellant may also be seeking leave of the appeal panel to appeal on the basis that the decision was against the weight of the evidence.
4. The appellant submits that the Tribunal should have given more weight to the contract, the construction commencement and completion date and the meteorology report showing the rain days that should have been excluded from the construction period.
5. We reject any suggestion that the Tribunal Member failed to consider the contract, the construction commencement and completion date and the meteorology report. We find that it is plain from the Tribunal Member's decision that he considered all of this material. In particular the Tribunal Member referred to the meteorology evidence at [12] of his Reasons. At [19] of the Reasons an eleven (11) day extension for rain was allowed. The appellant has submitted daily weather observations from February - July 2019 taken mainly from Observatory Hill with some recordings from Fort Denison and Sydney Airport.

The 84 business day completion period

1. At [23] of these Reasons we referred to the fact that the contract provided that there was a Construction Period estimated at 84 business days from the Concrete Slab Stage, subject to permitted extensions of time for the completion of the building works.
2. The appellant's submissions both written and oral devote time and energy in seeking to persuade us that it did in fact complete the building works within the 84 day period, subject to extensions for inclement weather, with the consequence that it should have no liability for delay damages. The Tribunal Member had regard to these submissions at [13] and [14] of his decision.
3. It is our view that even if the appellant is correct in that it did complete the building works within the 84 day period, subject to appropriate extensions of time being granted for inclement weather, that in itself does not lead to the conclusion that it is not liable for delay costs. This argument overlooks the fact that it would be liable for delay in completing stages 1 and 2 within a reasonable time.
4. In that regard the Tribunal member found at [21]: 'There is an unexplained delay between the time when the approval was granted for the works and the time when the slab was completed. That period extends from 31 May 2018 until February 2019 representing a period of approximately 35 weeks'
5. The above was the critical finding by the Tribunal Member which led to the calculation of the amount found in favour of the present respondents. There has been no appeal from that finding or from the finding that the appropriate weekly delay rate was $280.00 per week.

Orders

1. For the reasons provided we refuse leave to appeal and dismiss the appeal. 1. Leave to appeal is refused. 2. The Appeal is dismissed.

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: 10 June 2020