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[2026] NSWSC 57
General information, not legal advice.
Supreme Court of NSW
2026-02-12
Price AJA
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: DeMarco v Macey [2026] NSWSC 57
Hearing dates: 14 November 2025
Date of orders: 12 February 2026
Decision date: 12 February 2026
Jurisdiction: Common Law
Before: Price AJA
Decision: (1) Leave to appeal is refused.
(2) The plaintiff is to pay the defendants’ costs.
Catchwords: BUILDING AND CONSTRUCTION – leave to appeal – decision of Appeal Panel of New South Wales Civil and Administrative Tribunal – residential building works – where not disputed plaintiff at fault for breach of contract and defendants entitled to terminate – where building works completed by new builder – where plaintiff’s quantum meruit claims agreed in part – admissions – whether clear and unambiguous admissions – whether Appeal Panel erred in rejecting balance of quantum meruit claims – questions of fact
BUILDING AND CONSTRUCTION – assessment of damages – breach of contract – approach to calculation of damages in an action by homeowner against builder – application of Bellgrove v Eldridge (1954) 90 CLR 613; [1954] HCA 36 and Wabbits Pty Limited v Godfrey [2009] NSWSC 1299 – where actual cost is known of the work to make the building work conform to the contract – whether Appeal Panel erred in failing to adjust “prime cost” and “provisional sums” items – questions of fact
APPEALS – costs orders – where Appeal Panel provided opportunity to make application to vary costs order – no application made – whether House v The King error – where point not raised below
Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 83
Home Building Act 1989 (NSW)
Cases Cited: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164
Bellgrove v Eldridge (1954) 90 CLR 613; [1954] HCA 36
CJZ Pty Ltd v Giant Dwarf Pty Ltd; CJZ Pty Ltd v Morrow [2023] NSWCA 135; (2023) 416 ALR 415
DeMarco v Macey [2022] NSWSC 1348
DeMarco v Macey [2025] NSWCATAP 131
Dokas v Gallagher (No 2) [2024] NSWCA 236
Dr N Kalokerinos Pty Ltd v Jain [2025] NSWCA 137
Flynn v PPK Mining Equipment Pty Ltd [2025] NSWCA 10
Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88
House v The King (1936) 55 CLR 499; [1936] HCA 40
Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd [2001] NSWCA 313; (2002) 18 BCL 122
Jaycar Pty Limited v Lombardo [2011] NSWCA 284
Larsen as trustee for the Larsen Superannuation Fund v Tastec Pty Ltd (formerly Wonders Building Company Pty Ltd) (No 2) [2025] NSWCA 210
Locke v H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions [2025] NSWCA 166
Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32
Moon v Mun [2013] NSWCA 217
Roude v Helwani [2020] NSWCA 310
Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206
South Australian Harbours Board v South Australian Gas Co (1934) 51 CLR 485; [1934] HCA 45
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8
Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416; (2023) 20 BPR 43,135
The Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52
Vitality Works Australia Pty Ltd v Yelda (No 2) (2021) 105 NSWLR 403; [2021] NSWCA 147
Wabbits Pty Limited v Godfrey [2009] NSWSC 1299
Category: Principal judgment
Parties: Godfrey DeMarco (Plaintiff)
David Macey (First Defendant)
Debbie Macey (Second Defendant)
Representation: Counsel:
C Bolger (Plaintiff)
EAJ Hyde SC (Defendants)
Solicitors:
Maradock Lawyers (Plaintiff)
Comino Daniels Lawyers (Defendants)
File Number(s): 2025/263447
Publication restriction: Nil
PRICE AJA: This is an appeal under s 83(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (“CAT Act”) from a decision of the Appeal Panel of the New South Wales Civil and Administrative Tribunal (“the Tribunal”). Pursuant to s 83(1) of the CAT Act, a party may appeal to this Court confined to questions of law but only with leave being granted by the Court.
Leave to appeal will ordinarily only be granted “concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond what [is] merely arguable”: Jaycar Pty Limited v Lombardo [2011] NSWCA 284 at [46] (Campbell JA, Young and Meagher JJA agreeing); see also Be Financial Pty Ltd a**s Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[37] (Basten JA, Tobias AJA agreeing); Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28] (Gleeson JA, Macfarlan and Payne JJA agreeing).
On 22 September 2016, the plaintiff, Godfrey DeMarco, a builder, entered into a written contract (“the DeMarco Contract”) with the defendants, David Macey and Debbie Macey, to perform residential building works in the form of renovations and additions to the defendants’ property located at East Street, Blakehurst.
The contract price for the scope of works was an agreed lump sum of $770,000 (including GST) subject to adjustment for:
(i) provisional sums for which the plaintiff could not give a definite price (cl 10 of the DeMarco Contract) which were allowed in the provisional sums schedule and the G DeMarco PS & PC schedule (Ex GDM-1, p 160); (ii) prime cost items for which the defendants had not selected at the date of the contract and for which the plaintiff could not give a definite price (cl 11 of the DeMarco Contract) in the amounts allowed in the prime cost items schedule and the G DeMarco PS & PC schedule; and (iii) variations (cl 13 of the DeMarco Contract).
The provisional sum allowance in the DeMarco Contract (including GST) was $200,950 and the prime cost allowance was $48,000, being a total of $248, 950 (Ex GDM-1, p 160). The contract price of $770,000 included those amounts.
The plaintiff submitted 3 variations to the DeMarco Contract totalling $41,124.88, which were agreed and are not in dispute. The total cost of the variations were added to the contract price.
The building works commenced in October 2016. The defendants paid to the plaintiff the sum of $714,674 for the building works including variations in accordance with cl 12 of the DeMarco Contract which provided for progress payments.
On 26 February 2019, the defendants terminated the DeMarco Contract as a result of the plaintiff’s delay in completing the building works required under the contract. It is not in dispute that the plaintiff was at fault for the delay in breach of the contract and the defendants were entitled to terminate the DeMarco Contract. Clause 25 of the DeMarco Contract which applied in the circumstances when the contract was terminated by the defendants due to the fault of the plaintiff relevantly provided as follows:
“If the reasonable cost of completion of the work exceeds that which would have otherwise been due under the contract the difference will be a debt payable by [the plaintiff] to [the defendants]. Should the reasonable cost of completion be less than otherwise due under the contract the difference will be a debt payable to [the plaintiff].”
On 15 May 2019, the defendants then entered into a contract with David Swingler, another builder (“the Swingler Contract”), and Mr Swingler completed the works which were the subject of the DeMarco Contract.
Under the Swingler Contract, Mr Swingler also performed some additional building works for the defendants that had not been the subject of the DeMarco Contract. The Swingler Contract Price was a lump sum of $489,337 (including GST) and contained the following:
(a) $26,997 (including GST) in provisional sums estimated by Mr Swingler; (b) $12,685 (including GST) for rectification work; and (c) $137,703.12 (including GST) for specific items that were the subject of quotes obtained by the defendants.
The additional building works which was outside the scope of the DeMarco Contract were valued at $42,873.
On 15 February 2019, the defendants commenced proceedings in the Tribunal against the plaintiff. The Tribunal found that it had jurisdiction to determine the defendants’ claim under the Home Building Act 1989 (NSW).
On 8 July 2020, the Tribunal awarded damages for breach of contract in favour of the defendants against the plaintiff in the amount of $317,919.
The plaintiff appealed the Tribunal’s decision to the Appeal Panel. On 21 September 2021, the Appeal Panel dismissed the plaintiff’s appeal but varied the amount of damages payable to the defendants by increasing the award from $317,919 to $389,184.
The plaintiff appealed to this Court against the Appeal Panel’s decision. On 5 October 2022, the plaintiff’s appeal heard before Harrison AsJ was allowed on the ground of apprehended bias and the matter was remitted back to the Tribunal for redetermination: DeMarco v Macey [2022] NSWSC 1348.
The matter was heard by a differently constituted Tribunal on 16 and 17 October 2023, with written submissions filed following the hearing. The defendants’ claim before the Tribunal was as follows:
(a) costs to rectify the defective work: $16,285; (b) costs to complete the building works: $396,789.40; and (c) costs for storage of furniture: $19,719.
The plaintiff made a quantum meruit claim in the amount of $34,675.
On 29 August 2024, the Tribunal ordered the plaintiff to pay the defendants $416,508.40 plus the defendants’ costs. The Tribunal found that the plaintiff’s documents had failed to provide sufficient evidence to establish its quantum meruit claim.
By notice of appeal filed on 25 September 2024, the plaintiff appealed to the Appeal Panel relying on six grounds of appeal. The parties provided written submissions to the Appeal Panel which heard oral argument on 28 January 2025. In the proceedings before the Appeal Panel and in this Court, Mr Bolger of counsel appeared for the plaintiff and Mr Hyde of senior counsel for the defendants. The plaintiff sought orders that he pay the defendants $102,609, in lieu of the order that he pay the defendants $416,508.40 and that the defendants pay his costs.
The Appeal Panel delivered its decision on 11 June 2025 in which it allowed the plaintiff’s appeal in part and decreased the amount payable to the defendants to $372,579.42: DeMarco v Macey [2025] NSWCATAP 131. The Appeal Panel ordered the plaintiff to pay 90% of the defendants’ costs of the appeal on an ordinary basis, subject to either party making an application to vary the costs order. Neither party made an application to the Appeal Panel to vary the costs order.
In its decision, the Appeal Panel noted at [16] that an internal appeal “may be made in the case of any kind of decision (including an ancillary decision) other than an interlocutory decision as of right ‘on any question of law’, or with the leave of the Appeal Panel, on any other grounds”.
The Appeal Panel considered the three principal issues in the appeal before it were whether (at [9]-[13]):
“[10] the Tribunal had erred when ascertaining [the defendants’] damages by not applying clause 25 in the [DeMarco Contract]. Clause 25 dealt with termination of the [DeMarco Contract] by [the defendants] due to the fault of [the plaintiff]. The proper application of clause 25 in the [DeMarco Contract], and the words therein ‘that which would otherwise have been due under the contract’ contained in clause 25 in the [DeMarco Contract], required, so [the plaintiff] submitted, the adjustment of the contract price in the [DeMarco Contract], not only to allow for variations, but also to allow for provisional sum and prime cost items including such items supplied and installed by the other builder who completed the works the subject of the [DeMarco Contract] following the [DeMarco Contract’s] termination;
[11] there was an error of arithmetic in the Tribunal’s calculation of the damages claim which overstated the award of damages by $34,522.90; and
[12] the Tribunal had erred in rejecting [the plaintiff’s] quantum meruit claim on the basis that there was no evidence in support of said claim when in truth, so [the plaintiff] submitted, [the defendants] had agreed and accepted parts of [the plaintiff’s] quantum meruit claim.
[13] Amongst those three issues, the issue as to how prime cost items and provisional sums should be treated, when determining damages for breach of contract, was the issue that absorbed most of the Appeal Panel’s time during the hearing before it.” (emphasis in original)
“For the reasons that are set out below in this decision, we have allowed the appeal in part as we have accepted [the plaintiff’s] submissions relating to the arithmetic error and the quantum meruit claim. We have rejected [the plaintiff’s] submission about how prime cost items and provisional sums should be treated, when assessing the amount of the money order payable by [the plaintiff] to [the defendants].”
“[116] The common law action by which a claimant could recover a quantum meruit for services performed has a long history: Warbrook v Griffin (1609) 123 ER 927 and Rogers v Head (1610) 79 ER 226. The claim arises in the law of restitution and does not depend on the existence of a contractual promise: Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 266 per Dawson J.
[117] Quantum meruit claims can pose difficult legal issues and evidentiary issues when they arise in the context of a claim in the Tribunal that has been made under the Home Building Act 1989 (NSW), particularly in cases where a homeowner has repudiated its contract with a builder: Mann v Paterson Constructions Pty Ltd [2019] HCA 32. But those types of issues did not arise for determination given the procedural history of these proceedings and the course of the evidence in this case. The affidavit affirmed on 5 May 2023 by one of [the defendants], David Macey, was plainly, and expressly, made in response to [the plaintiff’s] claim for quantum meruit: see [2] in the affidavit. The affidavit, at [8] and [9] therein and in the two tables that comprise annexures A and C to the affidavit, expressly agreed to $13,858.00 of [the plaintiff’s] $34,675 claim in quantum meruit. Further, as was made clear by [7] in the affidavit, [the defendants] were agreeing to compromise part of [the plaintiff’s] quantum meruit claim in response to the directions hearing on 5 April 2023 presided over by the Deputy President of the Tribunal and in response to order 3 of the Tribunal made on that occasion.
[118] In our view, [the defendants] made an admission, in Mr. Macey’s affidavit, that $13,858.00 of [the plaintiff’s] quantum meruit claim was accepted. We further observe that the admission was made at a time when [the defendants] were legally represented. Moreover, the admission was made against the background of [the defendants] having the affidavit of Mr. Greg O’Mara, building consultant, dated 11 September 2019, that annexed an expert building report dated 10 August 2019 and a Scott Schedule dated 24 April 2019: see [49] in the Tribunal’s decision dated 29 August 2024.
[119] The Tribunal’s finding (at (144(2)]) that [the plaintiff] ‘has not established any quantum meruit amount’ involved an error of law (see State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 160 ALR 588 at [62] per Gaudron, Gummow and Hayne JJ). The finding failed to give attention to [the defendants’] evidence in Mr. Macey’s affidavit admitting $13,858.00 of [the plaintiff’s] $34,675 claim in quantum meruit.
[120] We will make an order varying the amount of the money order made by the Tribunal against [the plaintiff] to account for the part of the quantum meruit claim admitted by [the defendants]. As for the balance of this claim, we agree that [the plaintiff’s] evidence did not establish his claim for the balance.” (emphasis in original)
As to the issue of whether the Tribunal had erred when ascertaining the defendants’ damages by not applying cl 25 in the DeMarco Contract, the Appeal Panel found at [130] that the DeMarco Contract did not provide that cl 25 was the exclusive remedy for the defendants in the event of termination of the contract for the plaintiff’s breach and did not exclude the defendants from remedies available at common law. The Appeal Panel went on to consider at [132] the question of whether or not the defendants’ position with “respect to the amount of any money order in their favour would be different if the amount of their claim was assessed under clause 25 of the [DeMarco Contract] or at common law”. The Appeal Panel stated that if the position was different, the Appeal Panel could then assess whether the Tribunal’s assumption that common law principles applicable to the assessment of damages should apply was material to the outcome.
The Appeal Panel at [133] then considered the plaintiff’s submissions about how adjustments should have been made to the “contract price” to take account of the prime cost items and provisional sums, when assessing the amount of the money order in favour of the defendants.
The Appeal Panel referred to the table at paragraph 57 of the plaintiff’s written submissions and found that the plaintiff did not supply any of the items (j), (k), (m) and (p) because no figure appeared against each of those items in column 3. The Appeal Panel observed at [142] that “there is no basis for there to have been any adjustment to the ‘contract price’ for the purposes of [clauses] 11 and 25 in the [DeMarco Contract]” for prime cost items not supplied by the plaintiff.
The Appeal Panel stated at [144] that the “[p]rime cost items that Swingler supplied to [the defendants] under the Swingler contract and any 10% builder’s margin that Swingler was permitted to claim from [the defendants] in certain circumstances under clause 11 of the Swingler contract, were not amounts, for the purposes of clause 25 in the [DeMarco Contract]”. The Appeal Panel observed at [145] that the plaintiff had not put a case that some or all of the new builder’s costs “involved an unreasonable or wanton expenditure by [the defendants], that was not consistent with [the defendants’] so-called ‘duty’ to mitigate their loss”.
The Appeal Panel at [146] stated that where in the table at paragraph 57 in the written submissions it points to an increased cost in a prime cost item supplied by Swingler, it was not accompanied by any evidence or submission that the cost of any of those prime cost items “was in any way unreasonable or has been incurred by [the defendants] unreasonably”.
The Appeal Panel then considered at [147]-[149], item (e) the “windows item”, which on the plaintiff’s case he had supplied. The Appeal Panel noted that the plaintiff’s evidence included two invoices from the plaintiff’s building consultant Mr John Hickey totalling $47,720.99, which exceeded the $37,000 in the prime cost schedule for “windows” by $10,720.99. The Appeal Panel stated at [148] that they did not discern any error of law in the Tribunal’s approach to the “windows” prime cost item. The Appeal Panel went on to say at [149]:
“We do not discern any error of law in the Tribunal’s approach to the ‘windows’ prime cost item. The Tribunal’s broad conclusion at [144] that the prime costs adjustment claim was not clearly explained and based on the evidence was open to the Tribunal, in our view. We have limited confidence that the second invoice relates to the ‘windows’ prime cost item referred to in the schedule in clause 11 in the [DeMarco Contract]. We also have limited confidence that the first invoice relates to the ‘windows’ prime cost item referred to in the schedule in clause 11 the [DeMarco Contract], as there seems to be some suggestion by the building consultant Mr. Hickey that there was a variation to the windows that had been specified in the [DeMarco Contract]. In any event, Mr. Hickey provided expert opinion evidence to the Tribunal. His expert report does not establish the underlying facts pertaining to what prime cost items were supplied by [the plaintiff] to [the defendants] for the purposes of clause 11 in the [DeMarco Contract].”
The Appeal Panel found at [152] that “[w]ith respect to the prime cost items, [the plaintiff] has not established that the Tribunal, applying cl 25 of the [DeMarco Contract], would have reached a different assessment of damages to the assessment it reached applying common law principles”.
The Appeal Panel next considered the plaintiff’s submissions concerning “provisional sums” and noted the plaintiff’s submission that items (a), (b), (c), (d), (f), (g), (h), (i), (l), (n), (o), (q), (r) and (s) in the table at paragraph 57 were provisional sums which should lead to an adjustment of the contract price. The Appeal Panel observed that items (i), (l), (n), (o), (p), (q), (r) and (s) had not been supplied or installed by the plaintiff. The Appeal Panel found for the purposes of cl 10 of the DeMarco Contract, the plaintiff did not incur “any actual cost” in relation to these items which could have led to any adjustment of the contract price either by way of addition or subtraction from the contract price.
As to items (a), (c), (f), (g) and (h) in the table at paragraph 57 of the plaintiff’s written submissions, the Appeal Panel said at [157]:
“… the table suggests that [the plaintiff] did some work supplying and installing these provisional sum items, but the table itself suggest that [the plaintiff] accepts the ‘actual cost’ to [the plaintiff], for each of these provisional sum items, was less than the amount that had been allowed in the [DeMarco Contract] for each of these provisional sums. Thus, in relation to these provisional sum items, [the plaintiff’s] case does not establish, for the purposes of clause 10 in the [DeMarco Contract], that the ‘actual cost’ to [the plaintiff] of these items was greater than the provisional sum allowed. There is therefore no ‘excess amount’, with respect to these provisional sum items, which could cause an addition to the ‘contract price’ when applying clause 10 in the [DeMarco Contract].”
“Thus, when we engage with [the plaintiff’s] schedule or table, in the context of provisional sum items supplied by [the plaintiff], the exercise tends to suggest that the ‘contract price’ should be reduced, rather than increased.”
The Appeal Panel concluded at [164] that the plaintiff’s evidence failed to establish that had the Tribunal considered and applied cl 25, “that would have resulted in the Tribunal finding that [the plaintiff] should be obliged to pay [the defendants] only $102,609.00 in damages or an amount different to the amount of damages ordered by the Tribunal”.
When considering the position at common law, the Appeal Panel at [169] calculated the amount owed by the plaintiff to the defendants to be $386,437.42. The Appeal Panel then turned to consider the position under cl 25 of the DeMarco Contract and said at [173]:
“… the evidence establishes that the reasonable cost to complete the work the subject of the [DeMarco Contract] was $446,885.40, for the reasons explained above and set out above in the table which contains our calculations, but to that must be added back the cost of rectifying defects ($16,285.00) arising by reason of [the plaintiff’s] breach of warranties implied into the [DeMarco Contract]. That cost ($463,170.40) exceeds ‘that which would have otherwise been due under the contract’ ($96,451.98) based on the findings we reached with respect to [the plaintiff’s] prime costs adjustment claim and provisional sum adjustment claim, and for the reasons explained above and set out above in the table which contains our calculations. The difference of $366,718.42 is claimable by [the defendants] as a debt, pursuant to cl. 25 in the [DeMarco Contract]. The storage costs of $19,719.00 is also claimable by [the defendants] as damages. That is because, as already explained above, even though consequential losses are not referred to in cl. 25 of the [DeMarco Contract], by reason of cl. 30 in the [DeMarco Contract], and that the fact that cl. 25 does not suggest it is the exclusive source of remedies available to [the defendants] in the event of a repudiation by [the plaintiff] of the [DeMarco Contract], in our view the evidence and the law supported the Tribunal’s view in the 29 August 2024 decision that this head of damages was available to [the defendants]. This involves applying common law principles and recognising thereupon, that consequential losses served by the breach are recoverable: Wabbits Pty Limited v Godfrey [2009] NSWSC 1299 at [101], citing Bellgrove v Eldridge (1954) 90 CLR 613; [1954] HCA 36 at 617-618.” (emphasis in original)
On 9 July 2025, the plaintiff filed a summons seeking leave to appeal from part of the Appeal Panel’s decision.
The summons identifies the following nine grounds of appeal:
“1 The Appeal Panel erred:
a. in finding that [the defendants] only made an admission that $13,858 of [the plaintiff’s] quantum meruit claim was accepted (paragraphs [118] to [120] of the [Appeal Panel’s decision]; and or
b. rejecting the balance of the [sic].
2 [The defendants] in the evidence before the Tribunal (and the Appeal Panel):
a. admitted the quantum meruit works claimed by [the plaintiff] were additional works performed by [the plaintiff];
b. admitted amounts were payable to [the plaintiff] for the quantum meruit works;
c. the amounts admitted by [the defendants] as being payable to [the plaintiff] for the quantum meruit works exceeded $13,858; and
d. did not provide any basis (or evidence) to reject the sums or amounts claimed by [the plaintiff] for the quantum meruit works.
3 In the premises, the Appeal Panel erred at law rejecting [the plaintiff’s] quantum meruit claim and in doing so:
a. [m]ade findings against the evidence, or that were not supported by the evidence;
b. [i]n the alternative, failed to consider the evidence in respect of [the plaintiff’s] quantum meruit claim; and
c. [f]ailed to consider the submissions made by [the plaintiff] as to [the plaintiff’s] quantum meruit claim including the evidence in support of that claim.
4 The Appeal Panel erred at law:
a. in the construction of clause 25 of the [DeMarco Contract] and the term ‘that which would have otherwise been due under the [DeMarco Contract]’; and
b. finding that the ‘prime cost’ and ‘provisional sums’ items that were allowed for in the [DeMarco Contract] did not need to be adjusted to reflect the evidence of the cost of those ‘prime cost’ and ‘provisional sums’ items charged to complete the building works; or
c. in not finding that the costs that which would otherwise been due under the [DeMarco Contract] included the cost of those ‘prime cost’ and ‘provisional sums’ items charged to complete the building works.
5 The Appeal Panel erred in not adjusting the [DeMarco Contract] Price to complete the works to include the cost, or evidence of the cost, of the ‘prime cost’ and ‘provisional sums’ items charged to complete the building works.
6 In the alternative the Appeal Panel erred:
a. in finding [the defendants’] costs to complete [the plaintiff’s] building works included the ‘prime cost’ and ‘provisional sums’ items claimed by [the defendants];
b. in finding [the plaintiff] did not submit that [the defendants] were not entitled to include the cost of ‘prime cost’ and ‘provisional sums’ items to complete the [DeMarco Contract] works where those costs were not adjusted against the [DeMarco Contract] Price to complete the works.
7 In the premises, the Appeal Panel erred at law making the findings at [5] and [6] above and in doing so acted on and or applied the wrong principle when determining:
a. The contract price for the [DeMarco Contract];
b. The unpaid balance for the [DeMarco Contract]; and or
c. [The defendants’] reasonable costs to complete the works.
8 Further and or in the alternative, the Appeal Panel erred in not finding the matters at [5] to [7] above:
a. did not fall within cl 12(1)(a), (b) and (c) of Sch 4 of the [CAT Act]; and or
b. did not cause [the plaintiff] to suffer a substantial miscarriage of justice.
9 By reason of the Appeal Panel’s errors above the Appeal Panel erred in determining:
a. The damages payable by [the plaintiff] to [the defendants]; and/ or
b. The amounts payable by [the plaintiff] to [the defendants].”
(a) firstly, grounds 1 to 3 relate to the determination and or findings of the Appeal Panel in respect of the quantum meruit works that were claimed by the plaintiff and agreed in part by the defendants. The plaintiff referred to [116]-[120] and [175] of the Appeal Panel’s decision; (b) secondly, grounds 4 to 8 involved the determination and or findings of the Appeal Panel in respect of the “contract price” and the exclusion of the “prime cost” and “provisional sums” from the plaintiff’s contract price. The plaintiff referred to [133]-[163], [169] and [173] of the Appeal Panel’s decision. In the alternative, the determination and or findings of the Appeal Panel in respect of cl 25 of the DeMarco Contract and the application of that clause to the determination and or findings of the Appeal Panel in respect of “that which would have otherwise been due” under the contract. The plaintiff referred to [132]-[164]. [168] and [173] of the Appeal Panel’s decision; and (c) costs.
“(1) There is no appeal to this Court from a decision of the Appeal Panel as of right. The applicant must persuade the Court that leave should be granted.
(2) An appeal is limited to ‘an appeal on a question of law’.
(3) As was recently emphasised in Thomas and Naaz at [32], ‘it is not sufficient merely to assert that the Tribunal erred in law in order to satisfy the limited conferral of jurisdiction’. (To similar effect, see Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378; (2014) 96 ATR 875 at [6] and [22]; and Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [13]). Accordingly, it is well-settled that a challenge which is wholly or partly factual cannot be converted into a question of law merely by asserting that a question of law is involved or merely by asserting error itself.
(4) What constitutes a question of law is ‘vexed and context dependent’ in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises (see Thomas and Naaz at [52] and Da Costa v The Queen (1968) 118 CLR 186 at 194; [1968] HCA 51).
(5) Although there is no clear test of what constitutes a question of law for the purposes of s 83 of the CAT Act, it is important not to lose sight of the continuing binding authority in this State of the Court of Appeal’s decision (by majority) in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139. Azzopardi stands for the proposition that a particular finding which is alleged to be ‘perverse’ or ‘unreasonable’ or ‘not reasonably open’ is not ordinarily a question of law. At pp 155-156, Glass JA (with whom Samuels JA agreed, Kirby P dissenting) said:
It is clear from these extracts that numerous pejorative expressions in common usage possess a single meaning and are interchangeable. To say of a finding that it is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way or that no reasonable person could have made it, is to say the same thing in different ways. Upon proof that the finding of a jury is vitiated in this way, it will be set aside because it is wrong in fact. Since the Act does not allow this Court to correct errors of fact, any argument that the finding of a Workers’ Compensation Commission judge is vitiated in the same way discloses no error of law and will not constitute a valid ground of appeal. It is also pointless to submit that the reasoning by which the court arrived at a finding of fact was demonstrably unsound as this would not amount to an error of law: R v District Court of Metropolitan District Holden at Sydney; Ex parte White (1966) 116 CLR 644 at 654.
(6) Furthermore, at p 157, Glass JA said:
… when the law correctly stated is applied to the facts found in order to produce a conclusion error may intrude again. An erroneous conclusion that facts properly determined fail to satisfy a statutory test, for example, injury arising out of the [course] of employment, substantial interruption to journey, or failure to provide suitable employment will ordinarily be an erroneous conclusion of fact. It is only in marginal cases that the statutory test is satisfied or not satisfied as a matter of law, because no other application is reasonably open: Hope v Bathurst City Council; Australian Gas Light Co v Valuer-General.
See also Thomas and Naaz at [53].
(7) It is unnecessary to decide for the purposes of this appeal whether a ‘question of law’ encompasses a mixed question of fact and law (see generally, at the federal level, the decisions of the Full Court of the Federal Court in Haritos v Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92 and May v Military Rehabilitation and Compensation Commission (2015) 233 FCR 397; [2015] FCAFC 93 and contrast the position at the State level, which is reflected in cases such as Attorney-General for the State of New South Wales v X (2000) 49 NSWLR 653; [2000] NSWCA 199 at [44]; Orr v Cobar Management Pty Ltd (2020) 103 NSWLR 36; [2020] NSWCCA 220 at [60]; and Hanave Pty Ltd v Nomad Sydney Pty Ltd (formerly Wine Nomad Pty Ltd) [2023] NSWSC 265 at [45] per Chen J).
(8) The existence of a question of law is not merely a qualifying condition to the statutory right of appeal; rather, the question of law alone is the subject matter of the appeal (see Osland v Secretary to the Department of Justice (No 2) (2010) 241 CLR 320; [2010] HCA 24 at [21] per French CJ, Gummow and Bell JJ and Davis v NSW Land and Housing Corporation [2016] NSWCA 325; (2016) 18 BPR 36,459 at [77] per McColl JA, with whom Meagher and Leeming JJA agreed).
(9) Whether or not an appeal is on a question of law should be approached as a matter of substance and not merely form. As the Full Court of the Federal Court said in Haritos at [107], if, as a matter of substance, there exists a question of law, the Court has ‘a procedural discretion, to be exercised judicially and where it is in the interests of justice to do so, to direct its formal identification in an amended notice of appeal even where the question of law has not been identified before the primary judge’. It is notable that the Court there viewed this approach as consistent with that of the Court of Criminal Appeal in R v JS [2007] NSWCCA 272; (2007) 175 A Crim R 108 at [57]-[69] per Spigelman CJ (with whom Mason P, McClellan CJ at CL, Hidden and Howie JJ agreed). Where an appellant is unrepresented, it may be appropriate to adopt a more generous or benevolent approach in assessing whether the notice of appeal identifies a question of law (see, for example, Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority [2014] FCA 314 at [75]-[77] per Mortimer J, as approved in Haritos at [104] and see also Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]).
(10) A s 83 appeal to this Court is confined to a decision of the Appeal Panel and does not extend to the NCAT at first instance (see Bronze Wing International Pty Ltd v Safework NSW [2017] NSWCA 41 at [10]).”
The plaintiff submitted that the Appeal Panel erred in finding that the defendants only admitted in the evidence that $13,858 of the plaintiff’s quantum meruit claim was accepted and or in rejecting the balance of the plaintiff’s quantum meruit claim.
Before the Appeal Panel, the plaintiff relied on the claims admitted in the defendants’ evidence and material at page 3 of Ex A (a document titled “Extras to Original Plans (Previously Claimed)”; Ex GDM-1, p 138) and Annexure A to Ex B (the affidavit of David Macey affirmed 5 May 2023 (“Mr Macey’s affidavit”); Ex GDM-1, pp 292-294). The plaintiff submitted that the Appeal Panel correctly found that there was evidence of the plaintiff’s quantum meruit claim and that the defendants had made admissions of that claim. However, the plaintiff contended that the Appeal Panel “inexplicably” did not refer to the defendants’ evidence at page 3 of Ex A notwithstanding Annexure A to Mr Macey’s affidavit cross references and accepts those claims.
The plaintiff accepted that the manner in which the defendants expressed the “disagreement” in Annexure A to Mr Macey’s affidavit could be considered confusing. The plaintiff pointed out that the defendants had stated in Annexure A to Mr Macey’s affidavit that items (or claims) QM2, QM5, QM6, QM7 and QM10 had already been allowed in (or at) page 3 of Ex A. The plaintiff argued that it followed that these claims were not disputed but had been allowed by the defendants in their calculations, and consequently they were placed in the “disagree” column so that the claim was not double counted.
The plaintiff submitted that the work for QM12 was performed but the defendants had disputed the claim on the basis that there was no evidence of payment to the roofing contractor. The plaintiff contended that this was not a proper basis to reject a claim when the work had been admitted as being performed and was outside the scope of the DeMarco Contract.
In oral submissions, Mr Bolger said that “the Appeal Panel properly found, or at least it can be inferred, that the use of the words ‘quantum meruit’ is incorrect. These are essentially additional variations and that is how Mr Macey deals with them and that is why they are added in, we say, to the moneys that were payable to [the plaintiff], or should have been deducted from the moneys payable by way of damages for the repudiation to [the defendants]”: Tcpt, 14 November 2025, p 3(39-45).
Mr Bolger referred to the document annexed as Annexure A to the plaintiff’s written submissions and amended the total of the plaintiff’s quantum meruit claim to be $30,881 plus an additional 10% builder’s margin of $3,088, which then totalled $33,969.
The plaintiff contended that the Appeal Panel erred at law in rejecting the quantum meruit claim and in doing so:
(a) made findings against the evidence, or that were not supported by the evidence; (b) in the alternative, failed to consider and apply the evidence in respect of the quantum meruit claim; and (c) failed to consider the submissions made by the plaintiff as to the quantum meruit claim including the evidence in support of that claim.
In oral submissions, Mr Hyde referred to Annexure A to Mr Macey’s affidavit in which the defendants’ position as to quantum meruit was “clearly set out in terms of agreed and disagreed, and the sum [of $13,858] is replicated there”: Tcpt, 14 November 2025, p 11(1-3).
Mr Hyde submitted that what Mr Bolger sought to do was to say “that admission actually is more than what it truly says, and you have to go back and look at other documents … [b]ut that doesn’t make the admission better or worse than what is on the face of the document because that is what the [A]ppeal [P]anel relied upon, and leave simply should not be granted because it is not clear, it is merely arguable that the admission should have included more, but it is not”: Tcpt, 14 November 2025, p 11(5-12).
In the defendants’ written submissions, Mr Hyde contended that what is set out in Annexure A to the plaintiff’s written submissions did not accurately reflect the evidence. Furthermore, the defendants’ submissions raised that a quantum meruit claim is a question of fact.
At the heart of the plaintiff’s submissions, which I have summarised at [42]-[48] above, are what are asserted to be admissions made by Mr Macey in Annexure A to his affidavit of 5 May 2023 (Ex B; Ex GDM-1, pp 288-300). It is evident from the whole of the Appeal Panel’s decision that the Appeal Panel had regard to the plaintiff’s evidence and submissions on this issue.
Before venturing further, it is convenient to refer to the relevant principles relating to admissions.
Admissions made in Mr Macey’s affidavit may be distinguished from admissions made in pleadings or quasi-pleadings such as points of claim or points of defence in the Tribunal. Any admissions in Mr Macey’s affidavit are part of the evidence before the Tribunal which must be weighed together with all relevant evidence as a whole and which the Tribunal might ultimately accept or reject: The Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52 at [103]-[113] (Campbell JA, Hodgson JA agreeing); Dr N Kalokerinos Pty Ltd v Jain [2025] NSWCA 137 at [63]-[67] (Adamson JA, Ward P and Price AJA agreeing).
Admissions must be clear and unambiguous. This point was considered by Barrett JA (with whom Basten and Ward JJA agreed) in Moon v Mun [2013] NSWCA 217 at [41] where his Honour observed that:
“As to the first matter [that admissions must be clear and unambiguous], it was said in Ellis v Allen [1914] 1 Ch 904 at 909 that judgment on admissions is permissible where ‘there is a clear admission of facts in the face of which it is impossible for the party making it to succeed’. The matter was put thus in Ash v Hutchinson & Co (Publishers) Ltd [1936] Ch 489 at 503:
‘A plaintiff who relies for the proof of a substantial part of his case upon admissions in the defence must, in my judgment, show that the matters in question are clearly pleaded and as clearly admitted; he is not entitled to ask the Court to read meanings into his pleading which upon a fair construction do not clearly appear in order to fix the defendants with an admission.’” (emphasis added)
Although those observations were made about admissions contained in pleadings, in my view they apply with equal force to informal admissions such as in the present case.
A failure to respond to a demand for payment may amount to an admission if there are circumstances which render it more reasonably probable that a person who denied liability for the claim would answer that the claim than would not: Roude v Helwani [2020] NSWCA 310 at [33] (White JA, Brereton and McCallum JJA agreeing) (“Helwani”) and the authorities there cited; see also Locke v H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions [2025] NSWCA 166 at [72] (McHugh JA, Bell CJ and Adamson JA agreeing).
As will be seen from Annexure A to Mr Macey’s affidavit below, Mr Macey answered all of the plaintiff’s quantum meruit claims.
Annexure A to Mr Macey’s affidavit is as follows:
| Item Ref | RCB Page | Brief Description | Agree Amount Claimed | Disagree Amount Claimed | Comment/Reason for Disagreement | | QM1 | RCB-52 | Extra excavation | $1,155 | | Additional Agreed item | | QM2 | RCB-52 | Additional la[b]our for Laundry Window/Door combo installation | | $468 | Already deducted as and included in “Work to reconfigure powder room” (Schedule A: ACB p 3) to a total of $7300 | | QM3 | RCB-52 | Triangular Windows vs orginal [sic] plans allowance for square windows | $1,675 | | Install of Triangular vs Square windows: Net Claimed = $3675 These windows had to be replaced (Faulty/leaking): Cost $2000 Replacement Invoice from Swingler available [sic] (Appendix 1:VA2- INV 639) Net claim agreed = $3675 - $2000 = $1675 | | QM4 | RCB-52 | Attic wall frameout and floor joists used | $2,480 | | Additional Agreed item | | QM5 | RCB-52 | Modify brickwork and doorway to Study | | $704 | Agreed item/value already deducted by Applicant (ACB pp 3) | | QM6 | RCB-52 | Below stairway frame out to create understair laundry alcove snd access door to below stair area | | $479 | Agreed item/value already deducted by Applicant (ACB pp 3) | | QM7 | RCB-52 | False ceiling and AC ducting bukhead creation Bed 2.4 | | $2,748 | Agreed item/value already deducted by Applicant (ACB pp 3) | | QM8 | RCB-52 | WC Alcove plasterboard and plumbing | $895 | | Additional Agreed item | | QM9 | RCB-52 | Demolish wall skin at entry | $479 | | Additional Agreed item | | QM10 | RCB-52 | Cost difference pitched vs flat roof deisgn [sic] for upper story balcony | $3,085 | $6,235 | Amount already deducted by Applicant - $3150 (ACB pp 3) We concede the additional cost estimate of $6234.54 - $3150 = $3084.54 | | QM11 | RCB-52 | Up-Spec for garage door lintel to allow for a single door | $2,830 | | Additional Agreed item | | QM12 | RCB-52 | Additional rooking costs | | $4,615 | This additional roofing cost is rejected because the Respondent failed to pay MC Roofing Invoice 0115 for $4923.38 (due 27/7/2017) (ACB p398-399) as indicated in the associated email. This invoice is presented as having been paid (RCB p89) but there are no bank records indicating this amount (RCB p90-93) |
| Quantum Meruit Variations Claimed | Agree | Disagree | | Claimed | $12,599 | $18,924 |
| Type | Clamed [sic] | Agreed | | Quantum Meruit | $34,675 | $13,858 | | Betterment | $41,555 | $15,569 | | Other from Contract Reconciliation | | $8,800 | | Totals | $76,229 | $38,228 |
Neither the plaintiff nor the defendants gave oral evidence before the Tribunal.
The admission made by Mr Macey at paragraph 8 of his affidavit and in Annexure A that he agreed to $13,858 of the plaintiff’s quantum meruit claim were clear and unambiguous. The Appeal Panel accepted at [118] that Mr Macey had made an admission that the amount of $13,858 in the plaintiff’s quantum meruit claim was accepted. However, “as to the balance of the claim”, the Appeal Panel at [120] agreed with the Tribunal that the plaintiff’s evidence did not establish his claim for the balance. Mr Macey’s statements in respect of items QM2, QM3, QM5, QM6, QM7, QM10 and QM12 are far from clear and unambiguous admissions and the Appeal Panel was entitled to reject the plaintiff’s submissions that the items had been admitted. Furthermore, the Appeal Panel was not obliged to accept the plaintiff’s submission that Mr Macey’s response to QM12 was not a proper basis to reject that claim. No reasonably clear injustice has been demonstrated.
The ultimate task for the Appeal Panel was to determine whether on the whole of the evidence the plaintiff had proven his quantum meruit claim on the balance of probabilities. As was observed in the joint judgment of Nettle, Gordon and Edelman JJ in Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32 at [203] quoting what was said by Dixon J (with whom Evatt and McTiernan JJ agreed) in South Australian Harbours Board v South Australian Gas Co (1934) 51 CLR 485 at 499; [1934] HCA 45 (“South Australian Harbours Board”), the Appeal Panel’s assessment of the plaintiff’s quantum meruit claims raised was a “question of fact”. This was restated in Helwani by White JA at [44]:
“It is clear from Dixon J’s reasons [in South Australian Harbours Board] which were adopted by Nettle, Gordon and Edelman JJ in Mann v Paterson Constructions Pty Ltd that assessing a fair and reasonable rate of remuneration [quantum meruit] is a question of fact ...”
By analogy, the extent to which the plaintiff has in this Court sought to establish that he was entitled to a quantum meruit claim raises questions of fact.
I do not grant leave for Grounds 1, 2 and 3.
(a) in the construction of cl 25 of the DeMarco Contract and the term “that which would have otherwise been due under the [DeMarco Contract]”; and (b) finding that the “prime cost” and “provisional sums” items that were allowed for in the DeMarco Contract price did not need to be adjusted to reflect the evidence of the cost of the “prime cost” and “provisional sums” items charged to complete the building works; or (c) in not finding that the costs that which would otherwise been due under the DeMarco Contract included the cost of those “prime cost” and “provisional sums” items charged to complete the building works.
(a) calculation of the “reasonable cost to complete” being the amount required to complete the building works (incomplete work) if the defendants had performed the DeMarco Contract; (b) calculation of the amount “otherwise due” under the DeMarco Contract being:
(i) the adjusted contract sum (allowing for variations and any adjustment for prime cost or provisional sum items), less the payments made; and
(c) reconciliation of the “reasonable cost to complete” and the amount “otherwise due”.
The plaintiff contended that the amount that was “otherwise due” required the adjustment of the contract sum for the prime cost and provisional sum items as provided by cll 10 and 11 of the DeMarco Contract. The plaintiff argued if no adjustment is made, then “estimates” are used to determine the contract price and “estimates” are not and never could be what is “due” to be paid.
The plaintiff submitted that the Appeal Panel at [142] had confused the concept of “performance” of the DeMarco Contract and the discharge of the obligations with the object of cl 25, which is to determine what amount, if any, is payable to complete the building works where the termination is due to the plaintiff’s conduct.
Another submission was that the Appeal Panel’s approach at [143] ignored that the prime cost and provisional sums were estimates only. The consequences of the Appeal Panel’s construction of cll 10, 11 and 15, the plaintiff submitted, is that the actual price of the building works which were completed was reflected in the “reasonable costs to complete”, but in this case unfairly to the plaintiff as the plaintiff is held to the “estimate” of these items when determining the “amount due”.
Another matter raised was that the Appeal Panel “bizarrely found that they were not satisfied that the invoices for windows were for the windows the subject of the prime cost item”. The plaintiff submitted that this “difficulty” was not raised by the Appeal Panel during the hearing; that there were no other windows and it was not suggested by the defendants that the invoices did not relate to the windows for the DeMarco Contract. The plaintiff contended that the Appeal Panel’s finding at [149] that the evidence was unsatisfactory was not open to the Appeal Panel.
The plaintiff referred to [154]-[163] of the Appeal Panel’s decision in relation to the “provisional sum” items and repeated the submissions made on the Appeal Panel’s approach to the “prime cost” items. The plaintiff submitted that where the price incurred was less then, as provided by cl 10, the contract price was to be adjusted down.
The plaintiff pointed to Annexure B of the written submissions which was the same schedule as was before the Appeal Panel and cross references the evidence relied upon. The plaintiff submitted that the contract price should have been adjusted by $116,474 (accepting the Appeal Panel’s finding that the percentage builder margin was not specified in cll 10 and 11 of the DeMarco Contract and was not claimed).
At paragraphs 58 to 70 of the written submissions, the plaintiff provided calculations which included the adjusted price for the DeMarco Contract, the quantum meruit claim, the payments made, the reasonable costs to complete and a reconciliation of those reasonable costs and the amounts otherwise due. The total of the plaintiff’s calculations was $106,336.08. Amendments were made at the time of the hearing in this Court to adjust the calculations and increase the total to the amount of $123,254: Tcpt, 14 November 2025, pp 1(34)-2(1).
The defendants submitted that the matters advanced by the plaintiff do not merit a grant of leave. The defendants argued that it is entirely unexplained by reference to case law or otherwise how the Appeal Panel’s decision was incorrect or at odds with cl 25 of the DeMarco Contract.
The defendants contended that the plaintiff’s evidence on this issue was set out in the report of John Hickey dated 24 March 2023 (“the Hickey Report”) and referred in particular to Mr Hickey’s statement at 5.01(h): Ex GDM-1, pp 432-433.
In the Hickey Report, when referring to his construction of the DeMarco Contract reconciliation spreadsheet, Mr Hickey said he had taken into consideration (Ex GDM-1, p 432):
“While there were numerous Provisional Sums and Prime Cost sums nominated in the contract many of these items were either not supplied by [the plaintiff] or the works were not carried out and in some cases the works were not completed by [the plaintiff] but rather by [Swingler].”
One of the principal issues before the Appeal Panel was that the Tribunal had erred when ascertaining the defendants’ damages by not applying cl 25 in the DeMarco Contract. The Appeal Panel decided that the Tribunal had not erred in determining the defendants’ damages recoverable on the basis of common law principles (see Appeal Panel’s decision at [130]-[131]; see also [25] above). The plaintiff does not challenge that aspect of the Appeal Panel’s decision.
In determining the damages at common law, the Appeal Panel at [166] referred to the well-established general rule that the proper measure of damages in an action by a homeowner against a builder is “the cost, in excess of any amount of the contract price unpaid, of reasonable and necessary work to make the building to conform to the contract, together with any consequential losses served by the breach” citing Wabbits Pty Limited v Godfrey [2009] NSWSC 1299 at [101] (Ward J, as the President then was) (“Wabbits”). In Wabbits, Ward J at [102] cited a passage from the High Court’s judgment in Bellgrove v Eldridge (1954) 90 CLR 613 at 617-618 (Dixon CJ, Webb and Taylor JJ); [1954] HCA 36 (“Bellgrove”), which expresses the general principle that the measure of damages is the difference between the contract price of the work contracted for and the cost of making the work conform to the contract, with the addition of any appropriate consequential damages: Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [13]-[15] (French CJ, Gummow, Heydon, Crennan and Kiefel JJ).
The Appeal Panel further referred at [167] to Wabbits in which her Honour had referred at [106]-[107] to the principle stated by Giles JA (with whom Sheller JA agreed) in Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd [2001] NSWCA 313; (2002) 18 BCL 122 at [96]-[99] (“Hyder”), that where work has been carried out and the actual cost is known, the actual price known provides sound evidence of the reasonable cost of the work to make the building work conform to the contract and should ordinarily provide the basis for damages rather than the assessment of damages being based on some theoretical cost of the works.
One of the plaintiff’s complaints is that the Appeal Panel did not accept at [168], Mr Jamieson’s assessment that the reasonable cost to complete the works should be $370,150. Another complaint summarised at [71] above concerned the Appeal Panel’s findings in relation to the windows. These were questions of fact. It has long been held that the assessment of damages is a question of fact in each case: Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88 at 94 (Moffitt P, Hutley JA agreeing); Hyder at [40], [47] (Giles JA).
In any event, the Appeal Panel was not obliged to accept Mr Jamieson’s assessment. The Appeal Panel had observed in its decision that the plaintiff had not submitted that any of the work conducted by Swingler was “in an unreasonable fashion”: at [168]. There was ample evidence before the Appeal Panel to conclude that the “reasonable cost of the work to make the building conform to the contract” was $446,885.40 (“reasonable cost”).
Although not addressed in a specific ground of appeal, prayer 3 of the summons seeking leave to appeal includes a challenge to “the determination and finding as to costs”.
The plaintiff submitted that it was successful on two of the three issues raised in the appeal before the Appeal Panel. In respect of the third issue which dealt with the provisional sum and prime cost items, the plaintiff contended that he was successful on the issue regarding the application of cl 25, though the Appeal Panel found that the Tribunal’s failure was immaterial notwithstanding the Appeal Panel proceeded to approach the assessment of damages pursuant to that clause.
In oral submissions, Mr Bolger submitted that a “reasonable sitting Judge” would never arrive at a conclusion where it was 90% of the costs of the appeal in the circumstances of this case: Tcpt, 14 November 2025, p 9(46-49).
The power to award costs is inherently discretionary and it is necessary for the plaintiff to establish an error of the kind described in House v The King. A House v The King error requires the Court to be satisfied that the Appeal Panel acted upon a wrong principle, took into account extraneous or irrelevant matters, mistook the facts, failed to take into account a material consideration, or where upon the facts the outcome is unreasonable or plainly unjust: CJZ Pty Ltd v Giant Dwarf Pty Ltd; CJZ Pty Ltd v Morrow [2023] NSWCA 135; (2023) 416 ALR 415 at [327] (Adamson JA, Ward P and Mitchelmore JA agreeing); Flynn v PPK Mining Equipment Pty Ltd [2025] NSWCA 10 at [15] (Payne JA and Price AJA).
The plaintiff’s submissions tend to overstate his success before the Appeal Panel. Whilst successful on the arithmetical error and partially successful on the quantum meruit submissions, he did not succeed on his claim that the Tribunal had erred by determining damages on the basis of common law principles. The Appeal Panel went on at [130] to consider the question of whether the assessment of damages would have been different if the assessment was undertaken pursuant to cl 25.
The Appeal Panel observed at [13] (see [22] above) that the issue of the prime cost items and provisional sums was the issue that absorbed most of the Appeal Panel’s time during the hearing before it. This is further evidenced by the comprehensive consideration of this issue in the Appeal Panel’s decision on which the plaintiff did not succeed.
The plaintiff has failed to demonstrate any House v The King error in the Appeal Panel’s decision to make a 90% costs order in favour of the defendants.
Another matter that supports leave to appeal being refused is that the plaintiff did not avail himself of the opportunity to make an application to the Appeal Panel to vary the costs order. The plaintiff’s arguments that were raised in this Court concerning the costs order were not raised before the Appeal Panel. In such circumstances, this Court will be reluctant to entertain a point asserting that the Appeal Panel committed an error when that issue was not argued before it: Vitality Works Australia Pty Ltd v Yelda (No 2) (2021) 105 NSWLR 403; [2021] NSWCA 147 at [113] (Bell P and Payne JA, McCallum JA agreeing); see also, Larsen as trustee for the Larsen Superannuation Fund v Tastec Pty Ltd (formerly Wonders Building Company Pty Ltd) (No 2) [2025] NSWCA 210 at [55] (Adamson JA, Stern JA and Price AJA agreeing) and the authorities there cited.
I do not grant leave to appeal against the costs order made by the Appeal Panel.
Accordingly, I make the following orders:
Leave to appeal is refused.
The plaintiff is to pay the defendants’ costs.
**********
DeMarco
Macey [2026] NSWSC 57
(1954) 90 CLR 613
(2023) 416 ALR 415
(1936) 55 CLR 499
(2019) 267 CLR 560
(2017) 95 NSWLR 597
(1934) 51 CLR 485
(2009) 236 CLR 272
(2007) 71 NSWLR 150
(2021) 105 NSWLR 403
(1987) 162 CLR 221
(1999) 160 ALR 588
(1968) 118 CLR 186
(1985) 4 NSWLR 139
(1966) 116 CLR 644
(2015) 233 FCR 315
(2015) 233 FCR 397
(2000) 49 NSWLR 653
(2020) 103 NSWLR 36
(2010) 241 CLR 320
In oral submissions, Mr Bolger said that if the Court accepted the plaintiff’s submission that the Appeal Panel applied the incorrect principle to determine damages the matter should be remitted to a differently constituted Tribunal to determine this discrete issue: Tcpt, 14 November 2025, p 9(21-25).
The reasonable cost was calculated as follows: $471,511.50 (Swingler Contract) minus $59,158 (work outside the scope of DeMarco Contract and cost of rectifying defects) which equals $412,353.50 plus $34,531.90 (defendants’ payments not paid under Swingler Contract).
The Appeal Panel calculated the unpaid contract price as follows: $770,000 (DeMarco Contract price) plus $41,124.88 (variations) which equals $811,124.88 minus $714,762.90 (a minor typographical error the amount should be $714,672.90) which equals $96,451.98. The unpaid contract price of $96,451.98 was then subtracted from $446,885.40 which equals $350,433.22. To that amount, $19,719 (storage costs) and $16,285 (rectification costs) were added which equals $386,437.22 being the amount owed by the plaintiff to the defendants.
The Appeal Panel’s calculations (save for a minor typographical error) conform with the general principles stated in Bellgrove and the approaches to the calculation of damages set out in Wabbits at [111].
When turning to consider the position under cl 25 of the DeMarco Contract, the Appeal Panel adopted the same calculations as in their assessment of common law damages and found at [173] the reasonable cost to complete the work ($463,170.40) exceeds “that which would have otherwise been due under the [DeMarco Contract] ($96,451.98)”. The Appeal Panel found that the difference of $366,718.22 was claimable by the defendants as a debt pursuant to cl 25. To this amount, storage costs of $19,719 were added pursuant to cl 30.
The plaintiff’s principal contention of error are the Appeal Panel’s findings concerning the “prime cost” and “provisional sum” items. Contrary to the Appeal Panel’s findings that there should be no adjustment for these items, the plaintiff submitted that an adjustment of $116,474 should have been made. The plaintiff pointed to Annexure B to his written submissions which were in similar form (subject to an arithmetical adjustment made in oral submissions in this Court) to paragraph 57 in the plaintiff’s written submissions to the Appeal Panel. The plaintiff contended that the adjusted contract price should be $770,000 plus adjustments for provisional and prime cost items of $116,474 plus variations of $41,124.88 reaching a total of $927,598.88.
The Appeal Panel assiduously considered the issue of the prime cost items and provisional sum items at [134]-[164]. I do not discern any error in the Appeal Panel’s conclusion at [142] that there was no basis for there to have been any adjustment to the DeMarco Contract price for prime cost items not supplied by the plaintiff. I do not agree that there is confusion in the conclusion that the Appeal Panel reached. A similar finding was made in respect of provisional sum items at [156]. Furthermore, I do not discern error in the Appeal Panel’s conclusion at [159] that the exercise undertaken when engaging with the plaintiff’s table in the context of the provisional sum items supplied by the plaintiff “tends to suggest that” the contract price “should be reduced, rather than increased”. Another assertion of error with which I disagree was the finding by the Appeal Panel at [144] that the prime cost items supplied to the defendants under the Swingler Contract and the 10% builder’s margin were not amounts for the purposes of cl 25 “which would have otherwise been due under the [DeMarco Contract]”. The Appeal Panel’s approach to these issues conforms with the principles in relation to the assessment of damages enunciated in Bellgrove and Wabbits, and the proper construction of cl 25.
I am not persuaded that the approach taken by the Appeal Panel to the assessment of damages either at common law or under cl 25 of the DeMarco Contract involved errors of law. The plaintiff’s submissions do not arise beyond the “merely arguable”.
I do not grant leave for Grounds 4, 5, 6, 7 and 8.