Devel Pty Ltd v Lewis; Lewis v Devel Pty Ltd

Introduction

1. These reasons for decision are in respect of an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 8 October 2020.
2. Both parties appealed the Tribunal's decision. Devel Pty Ltd (the builder) appealed the Tribunal's assessment of damages. Joshua and Linda Lewis (the owners) appealed the refusal of a claim in respect of a number of items of allegedly defective residential building work.
3. At the appeal hearing, Mr J Cameron, Solicitor, appeared for the builder and Mr T Davie of Counsel appeared for the owners.
4. For the reasons set out below, we have decided to dismiss both appeals.

Background

1. The parties had agreed to a work order in previous proceedings between the parties under the Home Building Act 1989 (the HB Act): HB 18/21242. The agreed work was set out in Short Minutes of Order filed in the proceedings, which required the builder to carry out the work identified in the report from Mr P Capaldi, the owner's expert. dated 11 October 2018, excluding Item 18. The work was to be completed by 17 October 2019.
2. The application to which these appeals relate was brought as a renewal application under cl 8 of Schedule 4 of the NCAT Act. The application was lodged on 16 November 2019. The owners claimed that the builder had not complied with the work order made in HB 18/21242. The owners also claimed damages in respect of defects that had not been the subject of the earlier proceedings. In the Tribunal's reasons for decision (Reasons) at [8] the Tribunal noted that according to the owners' outline of submissions, the alleged additional defects were those: 1. Arising as a result of the builder carrying out rectification work; 2. That had been observed subsequent to the Tribunal's orders; or 3. That were part of the owners' original claim but were not contained in the Tribunal's orders.
3. The Tribunal relevantly found that: 1. The builder did not comply with the Tribunal's work order: Reasons at [19]. 2. No proper fact or circumstance adequately explains the builder's failure to comply with the work order in a way favourable to the builder, such as to justify extending time to comply with the work order, which was an order sought by the builder: Reasons at [57]. 3. The owners could pursue Item 30 in the renewal application. This item concerned water ingress from the balcony into the garage and surrounds, which the parties' experts agreed was caused by defective rectification work: Reasons at [101]. 4. Items 26 (painting), 27 (pool fence), 28 (man-hole [sic] in walk in robe next to en suite) and 29 (first floor internal balustrade) which were not claimed in the original proceedings could be considered in the renewal proceedings. In this regard, the Tribunal especially relied on the Appeal Panel's decision in Bondarek v NSW Land and Housing Corporation [2018] NSWCATAP 299 at [43] and [44] (Bondarek): Reasons at [101]. 5. The claim in relation to Items 26, 27, 28 and 29 were not made within time. This is because practical completion occurred on 15 December 2015 and the two year statutory warranty period had expired before proceedings HB 18/21242 were commenced on 9 May 2018: Reasons at [110] to [111]. 6. The owners were estopped from pursuing Item 18 (which had been expressly excluded from the Tribunal's work order) and a loss of rent claim, which was raised in proceedings HB 18/21242 and was dismissed by reason of order 2 made by the Tribunal in those proceedings: Reasons at [124] to [128]. 7. The owners' claim for out of pocket expenses was dismissed because there was no basis for finding that the cost claimed ($450 for a pool test) arose from a breach of a statutory warranty by the builder. 8. It was appropriate to make a money order in favour of the owners based on the quotation provided by Protos Projects Pty Ltd (the Protos quote), rather than on the basis of the assessment made by the parties' experts. The Tribunal stated at [131]: A contractor's quote to do work tells the Tribunal what the market will charge to do the work and in particular what the contractor will accept in consideration of taking on the risk of carrying out and completing the rectification work.
4. The Tribunal made a money order in favour of the owners in the sum of $108,245.28, consisting of $57,417.90 in rectification costs, $24,585 for preliminaries, a 20% margin in the sum of $16,400.80 and GST in the sum of $9,840.48.
5. Both parties appealed the Tribunal's decision.

Scope and nature of internal appeals

1. Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2) NCAT Act.
2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law. Relevantly, the application of a wrong principle of law is a question of law. 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
3. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
4. In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
5. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
6. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

Relevant legislative provisions

1. Clause 8 of Schedule 4 of the NCAT Act allows proceedings heard in the Consumer and Division to be renewed.
2. Clause 8 of Schedule 4 provides: 8 Renewal of proceedings in respect of certain Division decisions (1) If the Tribunal makes an order in exercise of a Division function in proceedings, the Tribunal may, when the order is made or later, give leave to the person in whose favour the order is made to renew the proceedings if the order is not complied with within the period specified by the Tribunal. (2) If an order has not been complied with within the period specified by the Tribunal, the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with. (3) The provisions of this Act apply to a notice lodged in accordance with subclause (2) as if the notice were a new application made in accordance with this Act. (4) When proceedings have been renewed in accordance with this clause, the Tribunal: (a) may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or (b) may refuse to make such an order. (5) This clause does not apply if: (a) the operation of an order has been suspended, or (b) the order is or has been the subject of an internal appeal.
3. Functions of the Tribunal under the HB Act are allocated to the Consumer and Commercial Division: cl 3(1) of Sch 4 to the NCAT Act. It is not in dispute that proceedings subject to the renewal application involved a building claim within the meaning of s 48A of the HB Act and that the Tribunal had jurisdiction to determine the claim under s 48K.
4. As the proceedings were in the Consumer and Commercial Division, they could be renewed under cl 8 of Sch 4 if the builder did not comply with Tribunal's orders within the time specified.
5. Section 48K of the HB Act sets out the Tribunal's jurisdiction in respect of building claims. It provides: 48K Jurisdiction of Tribunal in relation to building claims (1) The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations). (2) The Tribunal has jurisdiction to hear and determine any building claim whether or not the matter to which the claim relates arose before or after the commencement of this Division, except as provided by this section. (3) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than 3 years after the date on which the supply was made (or, if made in instalments, the date on which the supply was last made). (4) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that are required under a contract to be supplied to or for the claimant on or by a specified date or within a specified period but which have not been so supplied if the date on which the claim was lodged is more than 3 years after the date on or by which the supply was required under the contract to be made or, if required to be made in instalments, the last date on which the supply was required to be made. (5) The fact that a building claim arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing that building claim. (6) The Tribunal does not have jurisdiction in respect of a building claim arising out of a building cover contract required to be entered into under this Act if the date on which the claim was lodged is more than 10 years after the date on which the residential building work the subject of the claim was completed. (7) The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E). (8) The Tribunal does not have jurisdiction in respect of a building claim relating to - (a) a contract for the supply of goods or services to which none of subsections (3), (4), (6) and (7) applies, or (b) a collateral contract, if the date on which the claim was lodged is more than 3 years after the date on which the contract was entered into. (9) This section has effect despite clause 5 (Relationship between Tribunal and courts and other bodies in connection with Division functions) of Schedule 4 to the Civil and Administrative Tribunal Act 2013.
6. Section 18E of the HB Act sets out the time limits for breach of statutory warranty claims made under s 48K(7) and the circumstances in which the statutory warranties under s 18B can be enforced on more than one occasions. Section 18E relevantly provides: 18E Proceedings for breach of warranty (1) Proceedings for a breach of a statutory warranty must be commenced in accordance with the following provisions - (a) proceedings must be commenced before the end of the warranty period for the breach, (b) the warranty period is 6 years for a breach that results in a major defect in residential building work or 2 years in any other case, (c) the warranty period starts on completion of the work to which it relates (but this does not prevent proceedings from being commenced before completion of the work), (d) if the work is not completed, the warranty period starts on - (i) the date the contract is terminated, or (ii) if the contract is not terminated - the date on which work under the contract ceased, or (iii) if the contract is not terminated and work under the contract was not commenced - the date of the contract, (e) if the breach of warranty becomes apparent within the last 6 months of the warranty period, proceedings may be commenced within a further 6 months after the end of the warranty period, (f) a breach of warranty becomes apparent when any person entitled to the benefit of the warranty first becomes aware (or ought reasonably to have become aware) of the breach. …….. (2) The fact that a person entitled to the benefit of a statutory warranty specified in paragraph (a), (b), (c), (e) or (f) of section 18B has enforced the warranty in relation to a particular deficiency in the work does not prevent the person from enforcing the same warranty for a deficiency of a different kind in the work (the other deficiency) if - (a) the other deficiency was in existence when the work to which the warranty relates was completed, and (b) the person did not know, and could not reasonably be expected to have known, of the existence of the other deficiency when the warranty was previously enforced, and (c) the proceedings to enforce the warranty in relation to the other deficiency are brought within the period referred to in subsection (1). ….
7. When determining building claims, the Tribunal can make the orders set out in s 48O of the HB Act, which 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) an order that a party to the proceedings: (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or (ii) do or perform, or refrain from doing or performing, any specified act, matter or thing. (2) The Tribunal can make an order even if it is not the order that the applicant asked for. (3) Sections 79R and 79T-79V of the Fair Trading Act 1987 apply, with any necessary modifications, to and in respect of the determination of a building claim.

Submissions and evidence

1. In deciding the appeal, we have had regard to the following:

• The builder's Notice of Appeal lodged on 29 October 2020;
• The owners' Reply to Appeal lodged on 13 November 2020;
• The owners' Notice of Appeal lodged on 24 November 2020;
• The written submissions provided by the parties prior to and subsequent to the appeal hearing;
• The tender bundle lodged on 13 January 2021 (with additional documents lodged on 15 February 2021);
• The oral submissions made at the hearing;
• The owners' further submissions dated 25 February 2021;
• The builder's submissions in reply dated 5 March 2021; and
• The owners' submissions in reply dated 11 March 2021.

Builder's Appeal

1. The builder's Notice of Appeal was lodged on 29 October 2021, which is within the 28 day time period specified in cl 25(4) of the Civil and Administrative Tribunal Rules 2014 (the Rules).
2. The builder's grounds of appeal are: 1. The Tribunal erred by basing its money order on the Protos Projects quotation, rather than on the expert evidence. 2. The Tribunal erred in relying on the Protos Projects quotation as the costing of defect Items 11 and 12 was based on a scope of works not approved by the experts.
3. In addition, the builder seeks leave to appeal on the basis that the decision is not fair and equitable and against the weight of evidence.

Builder's submissions in relation to Ground 1

1. In summary, the builder submitted that:

• Rectification costs are only found in actuality when the work is completed. The Protos quote, which was tendered as lay evidence, was not found in actuality as the work had not commenced.
• A contractor's quote does not tell the Tribunal what the market will charge to do the work. It only tells the Tribunal what that particular contractor is likely to charge to do the work.
• The role of an expert is to tell the Tribunal the fair and reasonable value of the works to be performed.
• The Tribunal did not satisfactorily explain why the expert's opinion in relation to costing was ignored or given low or no weight.
• The Tribunal made no adverse findings about either expert's evidence and there is nothing in the decision record to suggest there were special circumstances that would warrant lower or no weight to be placed on the expert evidence.
• There is a sound basis for adopting expert evidence.
• The Tribunal is not bound by the rules of evidence but cannot ignore the rules of evidence.
• Mr Demetriou, who was cross examined in respect of the Protos quote, has never personally held a builder's licence and Protos has only worked on three projects over the past five years. He did not give evidence of the fair and reasonable value of the work or of what the market would charge. He could only give evidence of what he wanted to charge. Such evidence could only have very low probative value compared to that of the experts' evidence.
• Ignoring evidence critical to an issue is an error of law.
• The decision to adopt the Protos quote in preference to the expert evidence was so unreasonable that no reasonable decision maker could make it.
• The decision was not fair and equitable and/or against the weight of evidence.

Builder's submissions in relation to Ground 2

1. In relation to this ground, the builder submits that under cross examination Mr Demetriou confirmed that his costing for Items 11 and 12 was for a different scope of work than that proposed by the experts. In the Notice of Appeal the builder submitted that if the experts' scope of work was strictly followed the costing would be reduced by a total of $84,126.98 (sic) for Item 11 and $5491.20 for Item 12.

Owners' submissions in relation to builder's appeal

1. In relation to both grounds of appeal, the owners submit that the Tribunal did not make an error of law and that there was no basis for leave to appeal.

Use of Protos quote rather than relying on expert reports provided by the parties

1. We are not satisfied that the Tribunal erred in preferring the Protos quote over the opinion on quantum provided by the expert witnesses.
2. The applicable principle concerning the assessment of damages for the cost of rectification of defective home building work, was set out by the High Court in Bellgrove v Eldridge (1954) 90 CLR 613 as follows, at pp 617-618: In the present case the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she has sustained by the failure of the appellant to perform his obligation to her…her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give her the equivalent of a building on her land which is substantially in accordance with the contract…the work necessary to remedy defects in a building and so produce conformity with the plans and specifications may, and frequently will, require the removal or demolition of some part of the structure…that work which is required to achieve conformity and the cost of the work, whether it be necessary to replace a small part, or a substantial part, or, indeed the whole of the building is, subject to the qualification which we have already mentioned and to which we shall refer, together with any appropriate consequential damages, the extent of the building owner's loss.
3. The qualification to which the High Court referred in Bellgrove v Eldridge was that the remedial work must be necessary to produce conformity with the contract and a reasonable course to adopt. It is only in fairly exceptional circumstances that a method of rectification will be held to be an "unreasonable" course to adopt: Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [15]; Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27 at 186.
4. The basis on which damages for defective building work was awarded was at issue in Hyder Consulting (Australia) P/L v Wilh Wilhelmsen Agency P/L & Anor [2001] NSWCA 313 (Hyder Consulting), which was referred to in the owners' written submissions on the appeal.
5. In that case, the Court at first instance quantified damages as the cost of rectification assessed by reference to tenders obtained before the rectification was carried out. As it happened, this assessment ($578,163.00) was substantially more than the actual cost of repair ($354,281). In a cross-appeal, the second respondent relevantly submitted that the trial Judge should have found that the first respondent was only entitled to recover the actual cost of repair.
6. At [19] Meagher JA (with whom Sheller JA and Giles JA agreed) stated that: What is surprising is that his Honour stated "in the absence of any alternative method of calculating rectification costs or any expert evidence on the point" he would accept the figure of $566,560. It seems almost too simplistic to point out the actual cost was an impeccable alternative method of calculating cost. The owner's counsel suggested that the $566,560 figure was mandated by the High Court's decision in Bellgrove v Eldridge (1954) 90 CLR 613 at 617-8. In my view, this is simply not so. The ratio of that case is that where the price of rectification is ascertained, that price cannot be discounted because of the fact that the plaintiff will not, or might not, spend all the money on the rectification in question.
7. Hyder Consulting is not on all fours with the present case. In this case, the quote was not "the actual cost" of rectification. Rather, it was a quote for a specified scope of work. While actual cost of rectification of defects may be an impeccable method of calculating the cost of rectification, the same cannot be said for a quote to do the work. A quote, once specified as the contract price, is subject to variation, either up or down. The actual cost of work cannot be determined until the work is completed.
8. That said, the Tribunal is not obliged to accept the estimate provided by an expert witness over a quote provided by a contractor ready, willing and able to do the work. In this case, the Protos quote was obtained by the owners on or about 6 November 2019: Affidavit of Linda Lewis dated 3 March 2020 at [44]. Mr Demetriou from Protos prepared a witness statement dated 26 May 2020 and was cross-examined during the hearing. The transcript of the hearing demonstrates that it was not put to Mr Demetriou that the Protos quote was not bona fide or that it did not represent a genuine costing of the rectification works.
9. Contrary to the builder's submission on the appeal, the Tribunal did not ignore the expert evidence. The Tribunal expressly referred to the opinions of the experts when making findings as to liability in respect of the various items claimed. The Tribunal preferred the Protos quote to the estimates provided by the expert witnesses because, as stated at [131] of the Reasons, a contractor's quote "tells the Tribunal what the market will charge to do the work and in particular what the contractor will accept in consideration of taking on the risk of carrying out and completing rectification work". The Tribunal also stated at [134] of the Reasons why it did not accept the builder's expert's opinion that an amount of $21,600 should not be included in preliminaries but should be included in the builder's margin.
10. The evidence provided by the expert witnesses in respect of quantum is an opinion as to what a hypothetical builder would or should charge to carry out the works. It is always open to a party to provide evidence of what a builder in the market will actually charge.
11. The builder submitted that the Protos quote does not tell the Tribunal what the market will charge, but only what Protos will charge. That is true as far as it goes. However, there is no dispute that Protos is in the market. It was always open to the builder to obtain alternative quotes in the same market, if it considered that the Protos quote was excessive. This is particularly so when it was clear that the owners were seeking damages in accordance with the Protos quote. The builder was aware that the owners were relying on the Protos quote, had an opportunity to obtain an alternative quote if it wished to do so, and had an opportunity to cross-examine Mr Demetriou during the hearing. It was not put to Mr Demetriou in cross-examination that the quote was deliberately excessive and therefore not genuine. There was no evidence before the Tribunal to suggest that this was the case.
12. Overall, we conclude that it was open to the Tribunal to accept the Protos quote as evidence of the cost of rectification. The Tribunal did not ignore the expert evidence, but it was not obliged to accept the estimate prepared by either of the expert witnesses. The Tribunal explained why it preferred the quote over the costing of the experts. We are not satisfied that it was unreasonable of the Tribunal to base its decision on quantum on the Protos quote, let alone that that the making of such a decision meets the criteria for Wednesbury unreasonableness: Associated Provincial Picture Houses Ltd. v Wednesbury Corporation [1948] 1 KB 223; Minister for Immigration and Citizenship v Li [2013] HCA 18, 249 CLR 332; 87 ALJR 618; 297 ALR 225.
13. We are also not satisfied that the builder may have suffered a substantial miscarriage of justice because of Tribunal's decision in this regard. In any event, even if one of the cl 12 Schedule 4 leave grounds were established, we would not grant leave to appeal as we are not satisfied that the use of the Protos quote is a circumstance that fits within the criteria for leave to appeal set out in Collins v Urban, as extracted above.
14. The builder's first ground of appeal and for leave to appeal is refused.

Ground 2 - Items 11 and 12 - different scope of work

1. As noted above, the basis of the consent work order made in the original proceedings was the report of Mr P Capaldi dated 11 October 2018. In that report, Item 11 is described as "poor concrete finish to pool surround, path and alfresco". In later reports this item has been split into two parts: Item 11A relating to the patio and the area between the fence and the house and 11B relating to the pool surround. However, it is essentially one defect; that is, a poor concrete finish in the relevant areas. Item 12 in Mr Capaldi's 11 October 2018 report is described as the pool deck wall and fencing showing lateral movement and incomplete works.
2. It is not in dispute that the scope of work to rectify these defects proposed in the Protos quote differs to some extent to the scope of work set out in Mr Capaldi's report. The differences were the subject of cross-examination during the hearing before the Tribunal.
3. In relation to Item 11, the essential difference between the scopes of work is that the Protos quote included scrabbling back the rendered surface and cutting out sections of the slab to lower drainage. In re-examination before the Tribunal Mr Demetriou indicated that he would not feel comfortable not scrabbling back a rendered surface because he could not guarantee the work. He also did not think that he could stop pooling without cutting out sections of the slab to lower drainage in certain locations: Transcript pp 74-75 (Joint Bundle pp 446-447).
4. In relation to Item 12, rectification required removing timber glazing and decking and straightening the sleepers comprising the deck wall. In re-examination Mr Demetriou confirmed that he would not feel comfortable re-using the existing decking because part of it was rotten to the extent that one of the pieces had split in half where someone's foot had gone through it: Transcript pp 74-75 (Joint Bundle pp 446-447).
5. We do not consider that the Tribunal erred in accepting the costing for rectification of Items 11 and 12 in the Protos quote, even though this was for a scope of work that differed to some extent to the scope that that the builder would have undertaken had the consent orders been complied with.
6. Renewal proceedings under cl 8 of Schedule 4 of the NCAT Act are a remedy which is available to a party in whose favour orders have been made, in the event of non-compliance with those orders, within the period specified by the Tribunal. Such proceedings are "an additional, simple and practical method of enforcing, and promoting timely compliance with [Tribunal] orders": Johnson v Dibbin; Gatsby v Gatsby [2018] NSWCATAP 45 at [83], cited in Blessed Sydney Constructions Pty Ltd v Vasudevan [2018] NSWCATAP 98 (Blessed Sydney Constructions) at [26].
7. It is not in dispute in this matter that the commencement of renewal proceedings was a remedy available to the owner, as the builder had not complied with a work order made in the owners' favour.
8. When proceedings have been renewed, the Tribunal has the powers set out in cl 8(4)(a) and (b) of Schedule 4. The Tribunal may either: 1. "make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined"; or 2. refuse to make such an order - par (b).
9. In this case, the Tribunal made an order, so cl 8(4)(a) applies.
10. In Blessed Sydney Constructions an Appeal Panel considered the construction of cl 8 of Schedule 4, finding at [31] that in view of the terms in which cl 8(4)(a) is expressed, the Tribunal can make an order in accordance with cl 8(4)(a) if: 1. the order is other than the order originally made; 2. the order is appropriate; 3. the order is one that the Tribunal may make under the NCAT Act or enabling legislation; 4. the order is one the Tribunal could have made when the matter was originally determined.
11. In the present case, the Tribunal made a money order: an order other than the order originally made. There is no dispute that a money order in respect of the items subject to the work order can be made under s 48O of the HB Act. Nor is there any dispute that the Tribunal could have made a money order when the matter was originally determined.
12. In relation to whether an order made in renewal proceedings is appropriate, the Appeal Panel in Blessed Sydney Constructions stated at [35]: 35 In our view, to give the word "appropriate" a narrow construction, so that circumstances or events occurring after the matter was originally determined could not be taken into account, would be inconsistent with the purpose of a renewal application. If, on such an application, the Tribunal could not consider facts and circumstances occurring after the original determination, this might often lead to the conclusion that the Tribunal should refuse to make any other order than that originally made. A renewal application is, however, designed to deal with a situation where there has been non-compliance with the original order that the Tribunal thought was appropriate when the matter was first determined. The circumstances will inevitably have changed since that time, if for no other reasons than because there has been non-compliance with the order that had been made. What was appropriate originally may well not be appropriate at the time of the hearing of the renewal application. To limit the orders that could be made on renewal to those that would have been appropriate when the matter was originally determined would be likely to prevent the Tribunal from doing justice between the parties, having regard to the non-compliance with the original order and to any other circumstances that had changed materially since the proceedings were originally determined. This would render the right to renew proceedings ineffective in a significant number of cases.
13. At [43], the Appeal Panel found: … [T]he text of cl 8(4)(a) and its context and purpose lead us to the view that "appropriate" in that clause should be construed as referring to an order that is suitable or fitting in light of: (1) the general law principles, whether legal or equitable, and statutory provisions applicable in respect of the type of relief claimed on the renewal application; (2) the fact that there has been non-compliance, within the time specified, with the order originally determined to be appropriate and a renewal application has been made; (3) all other relevant circumstances, whether occurring before or after the proceedings were originally determined.
14. The builder's submissions concerning this ground of appeal do not address any issues relevant to general law principles or relevant statutory provisions in arguing that the Tribunal erred by accepting the Protos quote in relation to Items 11 and 12. Nor do the builder's submissions address circumstances other than the fact that the Protos quote identifies a scope of work for those items that differs from that in Mr Capaldi's 11 October 2018 report which was the basis for the work order.
15. The owners submit that it was open to the Tribunal to accept the evidence provided by Mr Demetriou in cross-examination and accept the quoted cost of rectification.
16. The Tribunal did not expressly deal with the differences between the Protos quote scope of work for Items 11 and 12 and the scope of work for those items in Mr Capaldi's 11 October 2018 report. However, from the reasons for decision it is clear that the Tribunal was aware of the Protos costings and, as noted above, the transcript makes it clear that Mr Demetriou was cross-examined in respect of issues concerning the Protos quote, including the scope of works specified for Items 11 and 12.
17. As found in Blessed Constructions Pty Ltd, "[w]hat was appropriate originally may well not be appropriate at the time of the hearing of the renewal application". In this case, while the work proposed by Mr Capaldi in his 11 October 2018 report was appropriate to rectify Items 11 and 12 at the time the work order was made, this does not mean that the Tribunal was constrained by that scope of work in determining the renewal proceedings. In our view, the fact that a quote had been obtained to rectify Items 11 and 12 from a builder who would be required to warrant the works was a relevant circumstance to be considered in deciding on the appropriate order to make in the renewal proceedings. We are not satisfied that the fact that scope for Items 11 and 12 in the Protos quote differed from the scope of work required by the original work order means that the Tribunal's order in respect of these items was not appropriate.
18. We conclude that this ground does not give rise to a question of law. Nor is the Tribunal's decision in respect of this ground against the weight of evidence. Ground 2 is refused.

Conclusion on builder's appeal

1. As both of the builder's appeal grounds are unsuccessful and a basis for granting leave to appeal has not been established, the builder's appeal is dismissed.

Owners' Appeal

1. The owners' Notice of Appeal was lodged on 24 November 2020, which is outside the 28 day time period specified in cl 25(4) of the Civil and Administrative Tribunal Rules 2014 (the Rules). The owners' appeal was not lodged within the relevant time limit as it was lodged as a cross-appeal directly in response to the builder's appeal.
2. We have decided to extend time for the owners' appeal as there was no objection to the lateness of the appeal and the builder had an opportunity to respond to the issues raised.

Owners' submissions in support of the owners' appeal

1. The owners' ground of appeal is that the Tribunal erred in rejecting Items 26, 27, 28 and 29 because the two year statutory warranty period had expired, in that the Tribunal did not have regard to the applicant's submission that the contract between the parties contained express warranties and the appropriate limitation period was therefore six years.
2. At the appeal hearing, the owners did not dispute that the Tribunal's jurisdiction in respect of a contractual claim brought by the party to whom building goods and services was supplied is three years from the last supply of building goods and services: HB Act s 48K(3). In written submissions provided subsequent to the appeal, the owners submit that as a renewal application is not a new application, but a renewal of the original proceedings, the date on which the claim in respect of Items 26 to 29 was made is the date on which the original proceedings were commenced.

Builder's' submissions in the owners' appeal

1. In summary, the builder submits that the Tribunal was correct in determining that Items 26 - 29 were not major defects and were out of time. The builder also submits that the owners' interpretation of cl 8 of Schedule 4 would allow the use of the renewal procedure as a "back door" to claim what otherwise may be time barred or otherwise not within the Tribunal's jurisdiction, which would be inconsistent with the general approach of the authorities.

Consideration of owners' appeal

1. In our view, two issues arise in the owners' appeal. The first is whether the claim in respect of Items 26 to 29 could properly be considered as part of the renewal application. The other is whether the claim in respect of those items was within time.

Is the claim in relation to Items 26 to 29 part of the renewal application?

1. As noted above, the Tribunal concluded that Items 26 to 29 could be considered in the renewal application, relying largely on the Appeal Panel's decision in Bondarek.
2. Bondarek involved an appeal against a decision made in renewal proceedings in a social housing matter. In the original application the Tribunal relevantly ordered the landlord to complete repairs to the bathroom in the premises. The Tribunal gave the tenant leave to renew the proceedings for a specified period in the event that the works were not finalised. In the renewal proceedings, the tenant complained that the landlord had breached the orders by not completing the works in the time specified or by the date on which the renewal proceedings were commenced. The tenant sought a renewal of the orders for repairs, a full abatement of rent until the repairs were completed, and an order for compensation for loss of enjoyment.
3. The tenant had not sought an order for compensation in the original proceedings and in the renewal proceedings and the Tribunal dismissed the compensation claim. This was done on the basis that Tribunal did not have jurisdiction to make such an order in the renewal proceedings as the tenant had not claimed compensation in the original application.
4. However, as noted by the Appeal Panel, the facts that underpinned an application for compensation "were continuous at all points between early March 2018 and 27 July 2018 when repairs to the bathroom were agreed in the renewal proceedings hearing to have been completed for all practical purposes": Bondarek at [5]. By this, it is clear that the tenant sought compensation in respect of the landlord's failure to undertake repairs to the bathroom, rather than compensation for some other breach of the tenancy agreement.
5. The Appeal Panel found that the Tribunal erred in finding that it lacked jurisdiction to award compensation, stating at [43] to [46]: 43 If we had to find afresh on the basis of the words in clause 8 taken together with their appearance in a Part headed "Special practice and procedure" and interpreted with the assistance of a specific heading "Renewal of proceedings in respect of certain Division decisions", we would come to the view that there is nothing by way of limitation in clause 8 that restricts the Tribunal in a renewal application to the relief claimed in the originating application being renewed, whether or not there was existing evidence to support a new claim for relief already before the Tribunal in relation to the originating application. 44 This interpretative assistance reinforces the purpose, object and context of the renewal power. It is not simply an aid to enforce the Tribunal's existing orders as clause 4(a) makes clear in its reference to "make any other appropriate order". There is no restriction in the clause to the existing material before the Tribunal or its existing findings on that material. 45 Rather, it is to consider what to do next given a non-compliance, but not to rehear the substantive merits already determined, and to do that on the basis of material put forward by the parties relevant to the issue of what to do next. As was said in Akratos v Papadopoulos [2016] NSWCATAP 139 at 36: the purpose of the renewal proceedings was to consider, in light of the fact that the original order was not complied with, what other appropriate orders it could have made when the matter was originally determined and not to reconsider the substantive merits of the respondent's building claim. 46 In a residential tenancy context that may mean a termination. In a home building context that may mean substituting a money order for the original work order. The presence of such a broad power is more likely than a narrow reading to achieve the purpose or object of having the Tribunal's original orders complied with in a timely fashion. It also may facilitate a just, quick and cheap resolution, in accord with the guiding principles in CATA s 36, of any difficulty with performance of the original orders.
6. The Appeal Panel went on to state at [48], emphasis added: 48 Accordingly, we consider that, on the submissions before him, the primary member erred in law in declining jurisdiction to consider the compensation claim on the basis that it was not in the originating claim and that it was an order that was not "open to the Tribunal at the time of the original orders". The phrase just quoted does not paraphrase the correct meaning of the italicised words in clause 8. Those italicised words mean any order that the Tribunal had jurisdiction and power to make, whether or not such an order was expressly claimed at the time, and the applicable legal principles and evidence permitted it to make.
7. Accordingly, on the Appeal Panel's analysis in Bondarek, the Tribunal could have made an order for compensation in the renewal application, even though a claim for compensation had not been made in the original proceedings, if the applicable legal principles and the evidence permitted the Tribunal to make such an order. On the facts in Bondarek, this meant that the Tribunal could have made an order for compensation because the landlord had failed to repair the bathroom, which had been the factual basis for the original proceedings and in relation to which the Tribunal had made an order in the those proceedings. There is nothing in Bondarek that is authority for the proposition that in the renewal proceedings the Tribunal could have awarded compensation for an entirely different breach of the tenancy agreement, such as (for example) a failure to repair the kitchen, in circumstances where there had been no claim or orders concerning the kitchen in the original application.
8. The Appeal Panel in Bondarek cited the Appeal Panel's decision in Blessed Sydney Constructions, which we have referred to above.
9. In that matter, the dispute between the parties concerned residential building work. Both parties had commenced proceedings under the HB Act. The original proceedings were settled by consent orders which among other things, required the builder to undertake works. The owner subsequently commenced renewal proceedings alleging that the builder had not completed the works. In the renewal proceedings, the owner did not claim for defective or incomplete work that had not been the subject of the original proceedings. In determining the renewal application, the Tribunal relevantly ordered the builder to pay damages to the owner.
10. The builder appealed the Tribunal's decision. The basis for the appeal was that in the renewal proceedings the Tribunal could not make an order for damages. The issues for determination by the Appeal Panel were whether the Tribunal erred in deciding that it could award money and/or damages even though the contract had not been terminated and even though the owner did not assert that, and there was not in fact, a contractual basis for the claim. These issues turned on the construction of cl 8 of Schedule 4 of the NCAT Act.
11. The Appeal Panel dismissed the appeal. It summarised its conclusions about the proper construction of cl 8 of Schedule 4 as follows, at [52]: (1) On a renewal application, the Tribunal can make an order that is materially different from the order made when the proceedings were originally determined. (2) Such an order must be suitable or fitting in light of the general law principles, whether legal or equitable, and statutory provisions applicable to the type of relief claimed on the renewal application as well as all other relevant circumstances, whether occurring before or after the proceedings were originally determined, including the fact that the order originally made has not been complied with within the time specified in the order and that a renewal application has been made. (3) Such an order must be one that the Tribunal has authority to make under the NCAT Act or the relevant enabling legislation. (4) Such an order must be one that the Tribunal had authority to make when the proceedings were originally determined, having regard to the specific legislative provisions under which the original application was made, but the order does not have to be an order that would have been appropriate in the circumstances when the proceedings were originally determined.
12. In our view, there is nothing in the Appeal Panel's reasoning in Blessed Sydney Constructions to support a conclusion that in renewal proceedings the Tribunal can make an order concerning a claim that was not made in the original proceedings. Renewal proceedings are an enforcement mechanism which provides a remedy for non-compliance with Tribunal orders. They are restricted to claims relating to the consequences of the order in the original not being complied with. This will usually be the cost of undertaking the works specified in the work order. However, where other consequences have arisen as a result of that non-compliance (for example, water damage caused by defective waterproofing work), then the cost of rectifying that damage may be claimed in the renewal proceedings. However, renewal proceedings are not proceedings in which a new claim can be raised that was not raised in the original proceedings.
13. As Items 26 to 29 were not part of the original claim and are not items that have arisen as a consequence of the orders made in the original proceedings, they could not be considered as part of the renewal proceedings. We conclude that the Tribunal erred in finding that they could be considered as part of the renewal proceedings on the basis of authorities such as Bondarek and Blessed Sydney Constructions. Items 26 to 29 had to be considered as a new claim, to which the relevant time limitation periods under the HB Act applied.
14. The claim in respect of Items 26 to 29 should have been made in a separate application under the HB Act, rather than on the same application form as the application in the renewal proceedings. There are circumstances in which it would be appropriate for the Tribunal to exercise its discretion to allow both renewal proceedings and a claim for items that were not part of the original claim to be set out in the same application form; for example, if an application in respect of the new claims would be time barred if the Tribunal insisted on a separate application. Allowing the renewal proceedings and the claim in respect of new items to be set out in the same application form in such circumstances would be consistent with the guiding principle under s 36(1) of the NCAT Act; that is, the resolution of the real issues in dispute in a manner that is just, quick and cheap. It would also be consistent with the Tribunal's obligation under s 38(4) of the NCAT Act to act "with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
15. In any event, in this matter the only date on which the new claim in respect of concerning Items 26 to 29 can be taken to have commenced is the date on which the application was lodged; that is 16 November 2019.

Was the claim in respect of Items 26 to 29 brought within time?

1. The owners' position is that the claim in respect of these items was contractual, in that the owners were seeking to enforce express contractual warranties.
2. We note that in the owners' written submissions at first instance dated 11 June 2020, it was submitted that even if Items 26 to 29 were minor defects, the claims were still in time because of the express warranties as to the quality of the works set out at clause 1(b) of the contract. The Tribunal did not make any findings in respect of this submission, instead finding that Items 26 to 29 were not major defects and subject to a two year statutory warranty period.
3. The owners' written submissions referred to the Appeal Panel's decision in Hutchings v Hope [2019] NSWCATAP 59. In that matter, the parties agreed that the provisions in the HB Act in respect of the time limitation period for statutory warranty claims did not limit a contractual claim. In the proceedings at first instance to which that appeal related, the Tribunal had dismissed certain defect claims because they were brought more than two years after the cause of action accrued.
4. The Appeal Panel stated at [54] to [56]: 54 Both parties agreed that the HB Act did not operate to limit a right of action by an original contracting party under an express provision in the contract in this way. That is, a right of action for breach of an express term, not being a claim for claim for breach of statutory warranty under s 18E, could be brought within 6 years from when the cause of action accrues, whether or not the express warranty is wholly or partly in the same terms as the statutory warranty implied by s 18B. 55 This concession appears properly made. 56 While unnecessary to decide, it is difficult to see why the HB Act and the grant of rights under Part 2C Statutory Warranties (which benefit both contracting owners and non-contracting owners and successors in title) should be construed in a manner that reduces the express rights agreed between the original contracting parties. Certainly s 18G of the HB Act, which makes void a provision in the agreement that "purports to restrict or remove the rights of a person in respect of any statutory warranty", and the time limits in s 18E in respect of proceedings for breach of statutory warranty do not seem to offer any support for such a construction of the HB Act. 57 Of course, proceedings to enforce a contractual right independently of s 18E can only be brought in the Tribunal (as opposed to a court) if brought within the jurisdictional time limits found in s 48K(3), (4) or (8) as the case may be. However, again, this jurisdictional limit of the Tribunal, fixed by reference to time would not, of itself, appear to otherwise restrict the general limitation period applicable to a claim for breach of contract found in s 14(1) of the Limitation Act.
5. It is equally unnecessary for us to decide this point in this appeal. This is because any claim for breach of an express contractual warranty needed to be brought in accordance with s 48K(3) of the HB Act. There is nothing in the material before us that leads us to conclude that the date from which time ran to make an application under s 48K(3) in respect of Items 26 to 29 was other than the date on which the owners moved back into their residence, which was 15 December 2015: Reasons at [110]. This was more than three years before the date on which the claim in respect of Items 26 to 29 was made.
6. Accordingly, we agree with the Tribunal that the application in respect of those items was time-barred, although we do so for different reasons.
7. The owners' appeal accordingly fails.

Costs

1. As both appeals have been unsuccessful, we consider that the appropriate exercise of the costs discretion is for the parties to pay their own costs. We have made directions in the event that either party seeks a different costs order.

Orders

1. The orders we make are as follows: 1. In 2020/00371130 (AP 20/45527): 1. Leave to appeal is refused. 2. The appeal is dismissed. 1. 2020/00371185 (AP 20/49188): 1. Time to lodge the Notice of Appeal is extended to 24 November 2020. 2. The appeal is dismissed. 1. In both 2020/00371130 (AP 20/45527) & 2020/00371185 (AP 20/49188): 2. The parties are to pay their own costs. 3. If either party seeks a different costs order, the following orders apply: 1. Order 5 above ceases to have effect; 2. Any application for a different costs order is to be filed and served, supported by evidence and submissions not exceeding five pages in length, within 14 days of the date of these orders. 3. Any response to an application for a different costs order is to be filed and serve, with evidence and submissions not exceeding five pages in length, within 14 days thereafter. 4. Any material in reply is to be filed and served within 7 days thereafter.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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

Amendments 07 December 2021 - Amended number formatting in orders on Coversheet and end of Decision. 20 December 2021 - Paragraph [88] deleted the word "after" and inserted the word "before" in its place

Amended number formatting in orders on Coversheet and end of Decision. 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: 20 December 2021