Dyjecinska v Step-Up Renovations

NCAT Appeal Panel|2022-06-06

House v R (1936) 55 CLR 499 Mann v Paterson Constructions Pty Ltd [2019] HCA 32; 267 CLR 560; 93 ALJR 1164; 373 ALR 1 McInnes v Rheem Australia Pty Limited [2021] NSWCA 89 New South Wales Land and Housing Corporation v Orr [2019] NSWCAT 23 Owners of Strata Plan v MD Constructions Pty Ltd [2016] NSWSC 162 Paraiso v CBS Build Pty Ltd [2020] NSWSC 190 Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; 162 CLR 221; 61 ALJR 151; 69 ALR 577 Project Blue Sky [1998] HCA 28; 194 CLR 355; 72 ALJR 841; 153 ALR 490 R v Longshaw (1990) 20 NSWLR 554 SZTAL v Minister for Immigration and Border Protection; SZTGM v Minister for Immigration and Border Protection [2017] HCA 34 Vujica v TNM Roofing Pty Ltd [2022] NSWCATAP 305 Westpoint Management Ltd v Chocolate Factory Apartments Pty Ltd [2007] NSWCA 253 Texts Cited: Hall and Macken, Statutory Interpretation: Principles and Context 2021, Lexis Nexis Halsbury's Law of Australia, Lexis Nexis Pearce and Geddes, Statutory Interpretation in Australia (9th Ed), Lexis Nexis Category: Principal judgment Parties: Izabela Dyjecinska (Appellant) Step Up Renovations Pty Ltd (Respondent) Representation: Solicitors: M Sheldon, W Marshall instructed by Lazarus Legal (Appellant) B Lloyd instructed by Brander Smith McKnight Lawyers (Respondent) File Number(s): 2022/00059238; 2022/00070996 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 25 November 2021 Before: D Goldstein, Senior Member File Number(s): HB 21/13199 and HB 21/20544

REASONS FOR DECISION

The appeal concerns two proceedings which were heard together arising out of a contract to do alterations and additions at a property in Forest Lodge entered into in about December 2020 between the owner, Izabela Dyjecinska, and the builder Step-Up Renovations (NSW) Pty Ltd. For convenience I shall refer to the parties as the owner and the builder respectively.
The parties did not sign the contract which was in the form of a Master Builders Association of NSW Residential Building BC4 Contract (the contract) for work over $20,000. The contract specified a price of $159,632.02 inclusive of GST and comprised plans and specifications.
Work commenced in or about January 2021 and the builder stopped the work on 22 February 2021 and the following day suspended the contract works.
The builder commenced proceedings HB 21/13199 against the owner by filing an application in which it claimed $107,662.50 in debt, being the total of outstanding invoices for the first and second claims for progress payments in the sum of $63,800 and $43,862.50 respectively.
A claim for restitution was also made (the builder's proceedings). During the hearing it was acknowledged by the builder that no evidence was led to support its claim for quantum meruit.
The owner commenced proceedings HB 21/20544 against the builder by filing a home building application in which she stated that the builder is liable for the cost of rectification of defective and incomplete work of $83,689.74 and this amount was to be set off against any amount found in favour of the builder as claimed. The owner eventually amended her claim, claiming damages for defective work in the sum of $75,707.70, as revised in the Joint Expert Report. A claim for incomplete work was not pressed (the owner's proceedings).
The applications were heard on 23 November 2021. The parties filed over 2000 pages of evidence and submissions. The court bundle has been tendered and copies have been provided to the Appeal Panel.
On 22 February 2022 the Tribunal published its decision ordering the owner to pay the builder the sum of $105,517.09. In essence the contract was found to be enforceable even though it was unsigned, and the Tribunal found that the two progress claims were payable to the builder. The Tribunal found the owner to be liable to the builder in the sum of $120,212.75. After deduction of $14,695.66 for defects in favour of the owner, the Tribunal ordered the owner to the pay to the builder the sum of $105,517.09.
Both parties appealed the decision. The owner's appeal proceedings are 2022/00059238. The builder's appeal proceedings are 2022/00070996.
We have dismissed the builder's appeal. In relation to the owner's appeal, we have agreed that Ground 6, which relates to the Tribunal's findings concerning a termite barrier, should be allowed. With the exception of Ground 1, which relates to whether the builder could enforce the contract between the parties, we agreed that the owner's appeal should otherwise be dismissed.
We have reached different conclusions in respect of Ground 1. In such circumstances, the decision of the Presiding Member of the Appeal Panel - Principal Member S Thode - prevails: see s 57(3) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act). Reasons for Senior Member P H Molony's dissent are set out below at [167].

The Tribunal Decision

The owner places particular reliance on two findings of fact contained at paragraphs [10] and following.
The owner submits that the Tribunal erred in its conclusion that the contract was enforceable because it had not been signed by the parties contrary to the provisions of ss 7 and 10 of the Home Building Act 1989 (NSW) (the HB Act).
For convenience we have set out the critical paragraphs of the decision in full: 12 The builder states that the owner's position based on the provisions of the Act is erroneous. 13 Section 10(1) of the [HB] Act states: '(1) A person who contracts to do any residential building work, or any specialist work, and who so contracts-- (a) in contravention of section 4 (Unlicensed contracting), or (b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or (c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.' 14 The builder states that the fact that the contract was not signed by the parties or dated does not attract s10(1) of the Act and in particular the last paragraph of that subsection. 15 The builder relies on the District Court decision of Hayward v Trinity [2009] NSWDC 54 which it submits is to be preferred to Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSWDC 507. 16 Sections 7(1) - (3) of the Act states: '(1) A contract must be in writing and be dated and signed by or on behalf of each of the parties to it. (2) A contract must contain-- (a) the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and (b) the number of the contractor licence, and (c) a sufficient description of the work to which the contract relates, and (d) any plans and specifications for the work, and (e) the contract price if known, and (f) any statutory warranties applicable to the work, and (f1) the cost of cover under Part 6 or 6B (if insurance is required under Part 6), and (g) in the case of a contract to do residential building work--a conspicuous statement setting out the cooling-off period that applies to the contract because of section 7BA, and (h) in the case of a contract to do residential building work (other than a construction contract to which the Building and Construction Industry Security of Payment Act 1999 applies)--details of any progress payments payable under the contract, and (i) in the case of a contract to do residential building work--a statement that the contract may be terminated in the circumstances provided by the general law and that this does not prevent the parties agreeing to additional circumstances in which the contract may be terminated, and (j) any other matter prescribed by the regulations for inclusion in the contract. (3) The contract must comply with any requirements of the regulations.' 17 Section 10(1)(b) does not apply to all aspects of s7 of the Act. First, I find that s7 of the Act applies to the contract because the contract price of $145,120.02 exceeded the prescribed sum which I find was $5,000.00. 18 Secondly, I find that that s7(1) requires a contract to be dated and signed by or on behalf of each of the parties to it, which clearly has not occurred. The issue is whether and to what extent s10 of the Act applies to the contract. I find that s10(1)(b) will apply to the builder if the contract: (a) is not in writing; or (b) does not have sufficient description of the work to which it relates. 19 Thirdly, I find that the contract is in writing and does have a sufficient description of the work by the reference to 'Extension of existing house', to drawings prepared by 'OC Innovative Designs', to a specification prepared by the builder and to the Tender letter. It follows that I find that s10(1)(b) of the Act does not apply to the contract. 20 It was stated in Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd at [141]: 'It is well settled that a builder without a written and signed contract for residential building work is not entitled to damages for breach of contract and cannot enforce the contract: Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 and Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327' 21 On the basis of the analysis of s10 of the Act and its limited reference to s7 of the Act as referred to above, I do not accept the above paragraph to be addressing the provisions of s10 of the Act so far as the issue of signature is concerned. I also accept the builder's submission that the two authorities cited do not support the proposition which is stated, at least so far as s10 of the Act and the need for signature is concerned. For reasons provided below, it is more likely that the above extract applies in my view to the predecessor to the Act. 22 In Hayward v Trinity, I agree with what was stated at [91] namely: 'In any event, having regard to the terminology of s10(1)(b), I would interpret that subsection to mean that a failure to comply with the provisions of s7 other than those requiring the contract to be in writing and to contain a sufficient description of the work, does not necessarily make the contract unenforceable or render the builder not entitled to damages. This interpretation makes practical sense as s10(1)(b) singles out the two most important aspects of a contract, that it be in writing and that it sufficiently describes the work. In other words, leaving out the contractor's licence number, for example, won't render the agreement invalid if indeed the builder is licensed.' 23 In her Closing Submissions in Reply the owner states at 2.2 and 2.3: 'The contract is unsigned and undated, in breach of Sections 7, 7A and 7B of the Act. The Home Owner submits that it is thereby unenforceable by the Builder, by operation of Section 10 of the Act and the common law.' 24 Reliance is placed on the case of Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd and Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221. No specific reference is provided to the specific passages in Pavey & Matthews Pty Ltd v Paul that are relied upon. 25 For the reasons that have been provided, I prefer Hayward v Trinity to Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd. I would observe that Pavey & Matthews Pty Ltd v Paul was concerned with the predecessor of the Act, namely section 45 of the Builders Licensing Act 1971 which was in different terms to s10 of the Act. Section 45 stated: '(1) A contract (in this section referred to as a "building contract") under which the holder of a licence undertakes to carry out, by himself or itself or by others, any building work or to vary any building work or the manner of carrying out any building work, specified in a building contract is not enforceable against the other party to the contract unless the contract is in writing signed by each of the parties or his agent in that behalf and sufficiently describes the building work the subject of the contract.' 26 It can be seen that a contract caught by s45 of the Builders Licensing Act was expressly stated to be not enforceable unless the contract was in writing, signed by each of the parties and sufficiently described the building work. As found above, s10 of the Act does not operate to prevent a builder under an unsigned contract from claiming damages or enforcing the contract. 27 I find that s10(1) of the Act does not prevent the builder from pursing a claim based on the owner's failure to pay progress claims or 'invoices' issued pursuant to the building contract.

Scope and nature of internal appeals

Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2) of the NCAT Act.
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: 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.
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).
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.
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).
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.

Submissions and evidence

In deciding the owner's appeal we have had regard to the following: 1. The Notice of Appeal lodged on 1 March 2022 and attachments constituting an appeal bundle spanning 2 volumes, including the evidence filed before the Tribunal below; 2. The Reply to Appeal; 3. Owner's Written Submissions on Appeal 1 April 2022; 4. Builder's Outline of Appeal Submissions, 15 April 2022; 5. Builder's Reply to Homeowner's Appeal Submissions, 6 May 2022; 6. Owner's Reply to Builder's Outline of Appeal Submissions, 6 May 2022. 7. Further submissions concerning the Appeal Panel decision of Vujica v TNM Roofing Pty Ltd [2022] NSWCATAP 305 (Vujica) filed on 3 and 11 October 2022 respectively; and 8. Oral submissions made at the hearing.

Notice of Appeal

The Notice of Appeal was lodged on 1 March 2022, which is within the time prescribed by cl 25(3) of the Civil and Administrative Tribunal Rules 2014 (NSW). The owner proceeds on the Grounds of Appeal filed and dated 1 March 2022.

Grounds of Appeal

We have had regard to the grounds of appeal set out in the Notice of Appeal and the Owner's Written Submissions on Appeal.
The owner raises six grounds of appeal, five of which are grounds on questions of law in respect of which the owner does not require leave.

The contract is not enforceable because it is not signed - application of sections 7 and 10 of the Home Building Act 1989

The owner's submissions

The owner submits that the Tribunal erred in finding that the building contract was enforceable and that the builder had a right to payment under the contract. The builder elected not to lead evidence in support of its case of quantum meruit or restitution and relied only on its entitlement to payment under the contract. The consequence of that election is that if the contract was unenforceable, the builder had no entitlement to payment because the builder failed to adduce any evidence on the plea for restitution.
It is submitted that the consequence of the contract being unsigned and undated is that the builder was in breach of ss 7(1) and 7B of the HB Act.
Section 7 of the HB Act states that the contract must be in writing and dated and signed by or on behalf of each of the parties to it. In the owner's submission this meant that the contract failed to comply with the writing provisions of the HB Act: the consequence of which was that, by operation of s 10(1)(c) of the HB Act, the builder was not entitled to damages or to enforce any other remedy in respect of the breach of the contract and is not entitled to enforce the contract against the owner.
It is submitted that s 7(1) mandates that a contract must be in writing, dated and signed by the parties. The contract relevant to the proceedings was in writing but was not dated and was not signed by either party. The owner submits that the contract thereby failed to comply with two of the three requirements of s 7(1). It was therefore rendered unenforceable by the builder by operation of s 10(1)(c). In Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSW DC 507 (Dyna Constructions), Scotting DCJ found at [141] That it is well settled that a builder without a written and signed contract for residential building work is not entitled to damages for breach of contract and cannot enforce the contract: Pavey & Matthews Pty Ltd v Paul [1987] 162 CLR 221 and Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327.
The owner submits that the Tribunal erred when he followed and preferred the decision of Hayward v Timilty [2009] NSWDC 54 (Hayward) because the comments of the learned District Court Judge are merely obiter. The issue before Williams DCJ in Hayward was not the consequence of an unsigned contract, but the consequence of a contract not containing a cooling off period. In that case the contract had been signed by the parties and it was found that the failure to include the cooling off period was not sufficient to render the contract unenforceable. It is submitted that the comments by Williams DCJ on the operation of s 10 are not authority for the proposition that an unsigned and undated contract remains enforceable notwithstanding s 10(1)(c) of the Act.
The owner submits the Tribunal erred at law and that the consequence is that the contract was unenforceable and that the builder is only entitled to payment on a quantum meruit basis. The builder elected to lead no evidence to support a claim for restitution, despite acknowledging it was obliged to do so, but instead abandoned the quantum meruit claim during the hearing.

The builder's submissions

In respect of appeal Ground 1 (the enforceability of the contract) it is submitted that the owner did not sufficiently raise this argument at the first instance hearing and that the owner's submissions are silent on the issue of Hayward relied upon by the builder and which the Tribunal found to be preferable to the decision of Dyna Constructions. It is submitted the owner cannot now on appeal seek to argue the point concerning ss 7 and 10 of the HB Act, when it did not raise the argument at first instance.
It is submitted that the owner fails to establish an error of law. At a minimum the owner must state with precision why the Tribunal erred in circumstances where the Tribunal expressly: 1. accepted the dicta in Hayward; 2. distinguished the dicta in Dyna Constructions on the basis that the decision did not address the provisions of s 10 of the HB Act; 3. preferred Hayward to Dyna Construction and distinguished Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; 162 CLR 221; 61 ALJR 151; 69 ALR 577 on the basis that it concerned the predecessor to s 10 of the HB Act which was expressed in more categorical terms.
It is submitted that consideration of the interaction between ss 7 and 10 of the HB Act was comprehensive and that the submission made by the builder on the interpretation of the HB Act was preferred by the Tribunal, in the absence of submissions made to the contrary by the owner.
It is submitted that this ground of appeal must fail because it does not seek to disturb two key factual findings; namely that the owner entered into a contract with the builder and that the owner refused to sign the contract. In those circumstances the Appeal Panel would be satisfied that the owner engineered the issue she now complains of.

Ground 1

This ground turns on the proper construction of s 10 of the HB Act.
The proper approach to statutory construction is well settled. In Project Blue Sky [1998] HCA 28; 194 CLR 355; 72 ALJR 841; 153 ALR 490 the plurality said (at [69] footnotes omitted): "The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed."
The principles have also been more recently and helpfully summarised by the Full Court of the Federal Court of Australia in Glencore Coal Assets Australia Pty Ltd v Australian Competition Tribunal (2020) 280 FCR 194 (at [239]) in which the Court emphasised that the task of statutory construction is to ascertain the contextual meaning of the words; with the starting point, being the text, whilst, at the same time, there is to be regard to context and purpose.
For the reasons that follow I am of the view that the Tribunal has not erred at law when it concluded that the writing provisions of the HB Act had been complied with.
First, at [18] of the decision the Tribunal found that in accordance with the plain wording of s 10(1)(b), this section will apply if the contract: 1. is not in writing; or 2. does not have sufficient description of the work to which it relates.
At [19] the Tribunal makes the critical findings that the contract, a Master Builders Association Residential Building BC4 standard contract, is in writing and does have sufficient description of the work by the reference to "extension of existing house", to drawings prepared by 'OC Innovative Designs', a specification prepared by the builder and to the tender letter. That finding of fact is not impugned and not appealed. The formation of the contract and its terms are not in contention and the owner, in her pleadings, admitted she entered into a written contract for the provision of building goods and services and that the contract has been performed.
The Tribunal found that, as the contract is in writing and the work is sufficiently described, s 10(1)(b) of the HB Act does not apply to the contract.
In reaching its critical findings at [17] to [19] the Tribunal states that on the plain reading of the section, it makes no reference to the need for a signature. This is clearly correct.
Although s 7 of the HB Act requires a contract to be in writing and 'signed and dated' s 10 merely refers to a contract in writing and to sufficiently described works. This is clearly distinguishable from the section's predecessor, s 45 of the Builders Licensing Act 1971 which expressly stated a contract not to be enforceable unless it was in writing, signed by each of the parties and sufficiently described the building work.
In my view, the Tribunal did not err when it concluded that the effect and statutory purpose of s 10 is "plain and unambiguous". Apart from the penalty provisions applying to various provisions of Part 2 of the Act, s 10 was meant to prevent a builder from enforcing unwritten contracts that were not sufficiently described. This intent became clear when the current amendment of s 10 took effect on 14 December 2001.
A clear indication of the purposes and objects of the section can be gained from the Second Reading Speech in connection with the 2001 Amending Act (New South Wales Legislative Council, Parliamentary Debates (Hansard), 2 July 2001): Three of those amendments clarifies the operation of sections relating to building contracts. The amendments ensure that those sections do not have the unintended effect of rendering a building contract wholly unenforceable at the suit of the builder merely because of the builder's very minor contravention of certain provisions of the Act.
Second, I consider that the Tribunal correctly applied relevant authority.
In the Tribunal proceedings, the parties cited the District Court authorities of Hayward and Dyna Constructions. Dyna Constructions concerned parties that did not form a contractually binding agreement. The comment relied upon by the owner at [141] of Dyna Constructions that "it is well settled that a builder without a signed contract for residential building work is not entitled to damages for breach of contract" is obiter and Scotting DCJ did not consider the interaction of ss 7 and 10 of the HB Act. The Court found that an offer had been made, but no contract had come into existence as a condition precedent remained unfulfilled and the offer was not accepted. Dyna Constructions does not provide a ratio decidendi or relevant guidance to the Tribunal on the issue of whether or not a written and sufficiently described contract is unenforceable merely because it does not contain a signature.
The Tribunal preferred the authority of Hayward as the authority squarely considered whether s 10(1)(b) imports all requirements of s 7 of the HB Act. As his Honour Williams DCJ held: 91. In any event, having regard to the terminology of s10(1)(b), I would interpret that subsection to mean that a failure to comply with the provisions of s7 other than those requiring the contract to be in writing and to contain a sufficient description of the work, does not necessarily make the contract unenforceable or render the builder not entitled to damages. This interpretation makes practical sense as s10(1)(b) singles out the two most important aspects of a contract, that it be in writing and that it sufficiently describes the work (my emphasis). In other words, leaving out the contractor's licence number, for example, won't render the agreement invalid if indeed the builder is licensed. Subsection 7(1) provides for the contract to be in writing and signed by the parties or their representative. That is obviously a significant provision as is the provision in regard to the description of the works and those two provisions are the essential basics or heart of any building contract.
In considering whether the failure to provide a cooling off period renders the contract unenforceable his Honour considered the interaction between ss 7 and 10, concluding that s10 must be considered practically and that only two aspects are "essential basics", that being a contract must be in writing and sufficiently describe the work. His Honour considered that in all major areas of consumer concern the contract complied with s 7 and had the legislature intended to include other factors in s 10 it would have done so. It is clear that no other cases were cited to the Tribunal about the construction of s 10 and in the absence of other authority on point, the Tribunal was in my view correct to apply the authority of Hayward as Williams DCJs' reasons did address the proper construction of s 10 including the effect of its statutory context. The interaction between s 7 and s10 is difficult to interpret as there is no obvious explanation why the Legislature included the requirement for a signature in s7, but omitted it from s10. One possible interpretation is that the exclusion of a signature from s10 was deliberate to set the HB Act apart from its statutory predecessor namely section 45 of the Builders Licensing Act 1971 which was in different terms to s10. A need for a signature whilst considered critical for the writing requirements of the contract set out in s7, is not critical when considering whether a builder should be deprived of a right of enforcement of an otherwise compliant contract.
For these reasons, whilst not binding on the Appeal Panel, I consider the obiter dicta in Hayward as highly persuasive and the comments made by Williams DCJ "the kind of obiter that has emerged from detailed consideration and not the kind that is a throwaway remark on a matter not germane to the case": Nowicka v Superannuation Complaints Tribunal [2008] FCA 939 (Nowicka) at [21] (Sundberg J).
There is no error in the Tribunal's reasoning at [25] and the Tribunal correctly concluded that the reading of s 10 operates harmoniously with s 7 and in the absence of a clear requirement for a signature in s 10, it cannot be implied or inferred that unless a contract is signed it is unenforceable. The construction preferred by the Tribunal was correct.
Third, the present case is distinguishable from the Appeal Panel's recent decision in in Vujica, which considered the interaction of ss 7 and 10. The decision was published after the hearing of the current appeal and we invited both parties to provide further written submissions.
Vujica concerned an appeal and cross appeal between builder and owner who had not entered into a written contract and the only writing identified as forming the contract was a quotation. The quotation did not comply with the requirements of s 7(2) of the HB Act, it was not in writing and did not contain a sufficient description of the work. The facts are therefore distinguishable from the present case
The Appeal Panel in Vujica concluded that the interpretation of the 'writing' referred to in s 10 is not to be construed narrowly and that to do so would have a deleterious effect and could allow builders to provide any document and as long as it is 'in writing', the document would satisfy the requirements of s 10 without reference to the detailed inclusions demanded of s 7, even it if is not sufficiently descriptive.
The Appeal Panel placed reliance on Anjoul v Anjoul [2021] NSWSC 592. That judgment concerned the arrangement of a deed of acknowledgement of debt between family members. The Court did not specifically consider the interaction between ss 7 and 10 or the HB Act or, for that matter, the requirement for a signature. Robb J reached the conclusion that a contract compliant with the HB Act had not been formed, but rather that the parties had entered into a family arrangement. Vujica specifically cites [209] of his Honour's decision: Consequently, if s 7 of the Home Building Act required the parties to enter into a written contract that satisfied that section, no such written contract was made. In these circumstances, s 10 of the Act would have the effect that Jerry would not be entitled to damages or to enforce any other remedy in respect of a breach of contract by Ashley. The Court in Anjoul was not required to consider the statutory provision or the text of the legislation or its context and reliance on it by the Appeal Panel in Vujica is of limited assistance on the issue before us. Anjoul's reference to the interaction between ss 7 and 10 is in my view a "mere passing remark or a statement or assumption on a matter that has not been argued" or "a broad observations made on the spur of the moment" and as such has less weight than "a considered judgment on a point fully argued": Nowicka at [21]-[25].
The Appeal Panel in Vujica stated that it would be a 'curious result' if the HB Act required that any agreement to vary plans and specifications must be in writing and signed by the parties, "but the original contract does not have to meet this requirement" and concluded that "[I]t follows, in our view, that a person who contracts to do residential building work under a contract that is in writing but does not comply with the requirements of s 7 of the HB Act is "not entitled to damages or to enforce any other remedy in respect of a breach" by reason of s 10(1)(b)."
The Appeal Panel in Vujica is primarily concerned with the requirement for signed variations. I am not of the view that the requirement to sign a variation is akin to an enquiry whether the contract, otherwise in writing and sufficiently described, requires a signature. The requirement to provide signatures on a variation is prescribed by operation of clause 14 in the standard MBA BC4 contract, as well as the HB Act. The requirement to sign a variation to a contract is in my view entirely uncontroversial and does not assist in determining the issue of whether a contract that has been found to have been entered, performed and partly paid for is unenforceable solely by virtue of the fact that it is not signed. There is a significant distinction between the requirement for a signed variation of an otherwise compliant contract, and the builder being unable to enforce a contract because the written contract does not bear the owners' signature.
Vujica was concerned with a contract that did not comply with s 7 in any respect. In the appeal before us the parties entered into a standard Master Builders Association BC4 written contract to do residential building work, as much was admitted by the owner in her points of defence. It is a capricious argument by the owner to let the work be completed to a significant degree, only to then point to the provisions of s 10 which prevent the builder from making any claim for damages, or from enforcing any other remedy in respect of any breach of the contract, although preserving its liability to the owner for any breach on its part, and expose the builder to prosecution (s 7A). This is particularly so in light of the Tribunal's decision at [122] that "the evidence strongly suggests that [the owner] refused to sign the contract" but permitted the builder to carry out the work.
For reasons of comity it is preferable to follow decisions of the Appeal Panel but I consider Vujica sufficiently distinguishable from the present case as it did not concern a signed written contract. Insofar as Vujica places reliance on the Supreme Court decision of Anjoul, for reasons set out above, I am of the view that Robb J's comments on the interaction of ss 7 and 10 are obiter dicta.
The critical concern of the Appeal Panel in Vujica is that the HB Act is consumer legislation, protective of the person for whom the work is done. As the Appeal Panel stated at [71]: "The Legislature has determined that writing is required for the contract and that the writing must contain certain information, to ensure the receiver of the goods and services is informed in writing of the nature and scope of the agreement and their rights and obligations of the builder in connection therewith."
In this case the Tribunal accepted the HB Act is consumer protective legislation and should be interpreted as such. The findings made by the Tribunal do not undermine or impugn the effect of the protective elements of s 7, nor are the written reasons inconsistent with the approach taken by the Appeal Panel in Vujica. The decision currently under appeal preserves consumer protection by accepting the basic requirements at the heart of each contract: that the contract be in writing and sufficiently described to give certainty. Providing for adequate description of work avoids uncertainty regarding the terms upon which work is to be carried out and the nature of the work to be performed. Here, the omission of a signature from an otherwise standard contract did not create uncertainty of the type requiring specific legislative intervention. Nor would the inability by the builder to enforce the contract remediate the omission complained of. The inability to enforce the contract is desirable to protect consumers from uncertain contractual terms, leading to unreasonable demands by builders to enforce payment for work performed outside an agreed scope of work. The omission of a signature arguably creates no such uncertainty. Nor is it likely to create demands for additional payments. If the requirements of s 7, other than the contract being in writing and of sufficient description, are not complied with consumers are sufficiently protected by the availability of a civil penalty.
Fourth, the builder's case is further supported by the history of the legislative amendments. In respect of the history of s 10, the earlier version of the section provided that non-compliance with s 7 (such as the contract price not being displayed on the first page) lead to the builder being unable to sue for damages and the contract was unenforceable. The present version of s 10 is now clearly and on its face limited to unlicensed contracting, contracts that are not in writing or that do not have a sufficient description of work, or which contravene any provisions of the Act that are prescribed.
The 2001 amendment pursuant to the Statute Law (Miscellaneous Provisions) Act (No.2) 2001 took effect on 14 December 2001. Section 10 limits the builder's rights and operates to prevent a builder from suing for damages under the contract or any other remedy in respect of breach of the contract by the other party to the contract. Had the legislature intended to deprive the builder of its right to enforce the contract in the absence of a signature, it would have done so in clear and unambiguous terms. Instead, the wording of s 10, as was found by the Tribunal, only renders those contracts that are not 'in writing' or that do not have 'sufficient description' of the work, unenforceable. All other contracts, in accordance with the legislative intent, remain enforceable.
The Tribunal was, in my view, entitled to accept a meaning gleaned from the plain text of the section. The modern approach to statutory interpretation requires that the text be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise. Whilst there is ambiguity in the interaction between ss 7 and 10, the Second Reading Speech sheds some light on the legislative intent: 'The amendments ensure that [s 10] [does] not have the unintended effect of rendering a building contract wholly unenforceable at the suit of the builder merely because of the builder's very minor contravention of certain provisions of the Act."
The amendment on its plain reading does not provide or impose consequences for the absence of a signature. The unambiguous wording of s 10(1)(b) anticipates a situation where a contract is "in writing" but does not contain a "sufficient description" of the work. This result is only possible if a written contract that does not comply with other requirements in s 7(1) and (2) is still classified as a contract "in writing" for the purposes of 7(1) and s 10(1)(b). The relevance for present purposes is that a written contract that is not signed and dated may still be "in writing" for the purposes of s 10(1)(b). If that is not correct, s 10 (1)(b) would simply have said "in breach of Section 7". The language adopted in s 10 is concise and unambiguous and the precise and specific wording is a powerful indicator of intention.
Recently, in SZTAL v Minister for Immigration and Border Protection; SZTGM v Minister for Immigration and Border Protection [2017] HCA 34, Kiefel CJ, Nettle and Gordon JJ observed at [14]: "The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected."
The context and purpose of the HB Act is consumer protective, and the constructional choice presented by the text in s 10 has an ordinary grammatical meaning. Another meaning such as to import all elements included in s 7 cannot be readily gleaned. It is less immediately obvious or more awkward to interpret s10 as having intended to include a signature requirement particularly when identifying the statutory object as that of protection against overcharging by a builder for work that was not required or agreed under the contract. The additional requirement for a signature in s 10 does not add protection against the mischief prevented by s 10 or put another way, the need for a signature does not add to the protection for the consumer against unjustified debt recovery by a contractor.
Fifth, I note that the decision in Paraiso v CBS Build Pty Ltd [2020] NSWCS 190 (Paraiso) relied upon by the owner, is not authority for the proposition that a contract is not enforceable if it is not signed. Paraiso is authority for the uncontroversial proposition that variations under a Master Builders Association BC4 standard contract need to be signed and dated pursuant to clause 14(1)(d) of that contract. Paraiso turns entirely on the interpretation of the written Master Builders Association BC4 contract and provides no ratio decidendi that assists in the disposition of this ground of appeal. It is however authority for the proposition that a builder who entered into a written Master Builders Association BC4 contract cannot be criticised for not having complied with s 7 of the Act. His Honour Fagan J held at [42] that "…[I]t could not be said that by entering into the BC4 contract the defendant acted in contravention of any provision of the Act or regulations, which is the only basis upon which s 10 denies a builder remedies at law,
In the present case it is difficult to reconcile the owner's pleaded admission that she entered into a standard Master Builders Association BC4 contract, as found by the Tribunal, only to insist that the contract, albeit performed, is unenforceable only by reason of lack of a signature. The evidence strongly suggested that the consumer refused to sign the contract, but insisted the builder perform and vary the work. Applying his Honour's findings at [42] above, it is apparent that the builder in this case contracted upon terms entirely in conformity with the legislation. In circumstances such as these, it is clear that the Legislature did not intend to deprive the builder of its contractual rights. Indeed, it was the intent of the legislative amendment "to ensure that [s 10] [does] not have the unintended effect of rendering a building contract wholly unenforceable at the suit of the builder merely because of the builder's very minor contravention of certain provisions of the Act".
I conclude that the Tribunal correctly held that s 10 of the HB Act did not operate to prevent the builder from enforcing damages or enforcing any other remedy in respect of a breach of the contract committed by the owner and that the contract is enforceable by the builder.
For these reasons I consider that this ground of appeal must fail.
Finally, I note the builder's submission that the owner's case in respect of Ground 1 was not articulated by the owner's legal representatives below. It is submitted that there was only minimal mention of ss 7 and 10 in "written closing submissions" of 3 December 2021 said to have been ignored by the Tribunal. Those written submissions merely state that "the builder never issued a fully signed version of the contract to the home owner within 5 business days of the contract being agreed, the builder is thereby in breach of ss 7(1) and 7E of the Home Building Act. By operation of s 10 of the Act, the Contract is unenforceable by the Builder" see [4.1]. Whilst the submissions do not address relevant case law nor the canons of statutory constructions now relied upon on appeal, the interaction between ss 7 and 10 of the HB Act was raised by the owner and did form part of the case as articulated before the Tribunal, and was addressed at length in its reasons. The general rule is that a party is bound by the way he, she or it conducts the proceedings, and is generally disallowed from raising new matters on appeal - see generally Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1. Whilst the owner does seek to recast some of the arguments she relied upon below, it cannot be said that the issue was not articulated and we disagree with the builder's submissions in this regard.

Unsigned and undated variations were found to be enforceable - Error of law.

The owner's submissions

It is submitted the Tribunal erred in finding that the variations were valid and enforceable under the contract in circumstances where, even if the relevant contractual clause 14(d)(i) was not drafted in mandatory terms, the Act mandates that a variation be in writing and signed by the parties. The owner submits the following work was not carried out in accordance with the approved plans and specifications. 1. Defect 1: new roof constructed over new dining and living room; 2. Defect 2: the ground floor ceiling not to the requisite height; 3. Defect 3: the first floor level not constructed with 260 mm step; 4. Defect 4: the first floor ceiling height not constructed in accordance with the plans at a height of 2510 mm which is 240 mm too low. 5. The net effect is that the builder must pay $58,112.64 to the owner for the rectification of variations that were never agreed.

The builder's submissions

We refer to the written submissions dated 6 May 2022 entitled "Builders Reply to Homeowner's Appeal Submissions". Those submissions were read in conjunction with the "Builder's Outline of Appeal Submissions" dated 15 April 2022.
It is submitted that the Tribunal's findings that the variations to the works were carried out by the builder and were agreed between the parties should be upheld. The Tribunal did not err in finding that the relevant variations were approved by the owner, or that in the alternative, if the variations were not approved and amounted to defective work. The owner may not recover rectification damages because she refused the builder a reasonable opportunity to rectify the defects and has since applied for a second development application rendering the rectification of the defects neither reasonable nor necessary in particular with respect to the pitch of the roof.

Unsigned and undated variations were found to be enforceable - error of law

This ground of appeal is confusingly referred to as "variations" as though it arises from the builder's claim for payment for unsigned variations. There is no such claim by the builder. This ground of appeal is more accurately described as the owner's claim for damages for defects for breach of statutory warranty under s 18B of the Act. The relevant findings are expressed at [94] and following of the Tribunal's reasons for decision.
We will address each of the defects in turn.
Ceiling height - The original plans show a ceiling height of 2.670m. In a letter dated 1 March 2019, the builder confirmed the ceiling height was raked and lowered at the owner's request. Although the ceiling height was changed in accordance with her request, the owner claimed damages because the ceiling was not built in accordance with the original plans and specification to 2.670m.
The critical findings are at [94] of the reasons for decision. The builder stated in an email confirming the variation that the "ceiling height is adjusted to be raked to allow the maximum height in the rear area". To which the owner replied: 'agreed what's the variation? It was agreed before you commenced the work."
The Tribunal concludes: "I find that the owner agreed to the raked ceiling height as she stated in her response to the builder's email an on her own words, that such an agreement was made before the work commenced, based on that finding I reject this items which is to change the ceiling back to what it was drawn to be before the owner agreed that it be changed."
The owner appeals this finding. The owner's appeal ground states 'that the builder did not advance a claim for variations'. That is so. The builder does not bring a claim for payment for variations. It is the owner who seeks damages for breach of statutory warranty for the builder's alleged failure to build the ceiling to the height specified in the plans and specifications. Even if the builder did not provide variations in writing, the builder may rely on the (unenforceable) variation to establish that the owner agreed to a raked ceiling by way of defence, and the owner is effectively estopped from bringing a claim for damages to raise the ceiling height, contrary to the agreement reached between the parties that it be lowered.
In coming to this conclusion, we have considered the principles enunciated in the Court of Appeal decision Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327 (Wright). In that case the parties contracted for the construction of two semi-detached dwellings on a block of land owned by the parties. Construction commenced pursuant to a written agreement between the owners and the builder; during the course of the construction significant changes were made to the specification for the building work, which were not reduced to a written variation of the written agreement. His Honour Basten JA as he then was (with whom Giles J agreed), found that the oral variation of the written agreement was rendered unenforceable by the builder by the HB Act, s 10. That did not mean that the variation was legally ineffective for all purposes; in particular, the owners, having agreed to the variation, could not insist upon the building being completed in accordance with the original written specification. Nor could they recover damages for failure to comply with the original specification. The builder was entitled to rely upon the oral agreement by way of defence to the proceedings brought by the owners (or one of them): at [6]-[7] (Giles JA); [43]-[48] (Basten JA); [56]-[57] (Handley AJA).
As per Giles J at [6]: Writing is a requirement under the Act and the Regulation. But the Act has spelled out the consequences of lack of writing for the rights and obligations of the builder and the proprietor. The builder is guilty of an offence (s 7A), but there is no equivalent provision as to the proprietor. The builder "is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by [the proprietor] and the contract is unenforceable by [the builder]" (s 10(1)), but again there is no equivalent provision in relation to the proprietor. On the contrary, the builder "is liable for damages and subject to any other remedy in respect of a breach of the contract" (cl 10(1), and no right or remedy that a person other than the builder may have apart from the Act is affected (s 11). [7] It is clear that a contract which is not in writing, or an unwritten variation to a contract, has considerable legal effect. The builder must still construct the works, or must construct them in accordance with the varied contract, and may be held liable in damages if it fails to do so. It would make a nonsense of this if, in the case of a varied contract, the proprietor could deny the effectiveness of the variation and claim damages for the builder's failure to construct the works in accordance with the original contract. (emphasis added) Yet that is what Mr Wright's position required. It should not be accepted.
Following the principles enunciated by the Court of Appeal and by reason of the critical finding that the variation to rake the ceiling was agreed, the owner cannot insist that the ceiling should be "rectified" and the builder was entitled to rely on the unwritten variation by way of defence. In the present case, the owner sought to enforce the written contract on the basis that there was no valid variation. However, as it was found that the contract had in fact been varied to lower the ceiling height, the HB Act gives the owner no entitlement to enforce a non-existent obligation.
In addition we respectfully agree with the comments of Fagan J in Paraiso at [60], that the absence of the owner's handwritten signature may not render an otherwise compliant variation invalid in circumstances where "any drawing that called for changed to the work but did not bear a signature may have been transmitted under cover of a signed letter or by email in circumstances that may have satisfied the requirements of the Electronic Transaction Act 1999 (Cth)".
In any event, it would be an unreasonable construction of the contract to argue that the absence of a written document signed by both owner and builder meant the variations were not agreed. The findings of fact at [101] of the decision that the owner agreed to the raked ceiling height has not been appealed. In light of this and applying the principles in Wright, we do not find this error established. The Tribunal correctly found that the owner was not entitled to damages to reinstate the ceiling to the original height, in circumstances where she had demanded that it be lowered.
In respect of the second defect, the level of the first floor, the Tribunal found that the owner requested a bathroom replace the study on the first floor. These findings of fact are not appealed. The builder's unchallenged evidence was that each request by the owner to change the original plans and specifications was produced in writing and lengthy correspondence tendered by the owner concerned the installation of a shower screen. The Tribunal accepted the builder's evidence that to accommodate the first floor variation bathroom, the level of the first floor contained a step up. For the reasons set out above and applying the principles of Wright we conclude that the Act does not prevent the builder relying on the variation as a defence because that does not involve its enforcement. Although the variation is not enforceable by the builder the owner cannot recover moneys paid under it unless there has been a total failure of consideration (see Wright at [57]).
In respect of the third defect - the pitched roof - the Tribunal found in favour of the owner. The pitched roof was found to be defective and an amount of damages was awarded to the owner. There is no appeal ground established in respect of the pitched roof.
It is important to note that the Tribunal's factual findings have not been appealed.
For these reasons, the second ground of appeal, in respect of the "variations" is dismissed.

The owner's submissions

The Tribunal erred in finding that the builder was entitled to be paid more than the value of the stages completed by reference to the contract price. The contract price is divisible into stages: 1. demolition $21,750 plus GST; 2. slab on ground $29,000 plus GST; 3. wall and roof frame $29,000 plus GST; 4. lock-up $21,750 plus GST; 5. fit out $21,750 plus GST; and 6. practical completion $14,620 plus GST.
It is submitted that it was "clear from the documents" that the builder never completed the wall and roof framing stage, and the builder did not commence the lock-up stage which sequentially followed on from completion of the wall and roof framing stage. It is submitted on appeal that the builder had not completed the wall and roof frames stage and by operation of clause 20(d)(i) of the contract the builder's right to payment for completion of the wall and roof frame had not accrued. The builder's right to payment at termination was therefore limited to payment for completion of the demolition 'slab on ground' stages less the cost to be incurred by the owner to rectify the defects in those works as completed so as to render them compliant with the contract.
The owner submits that the Tribunal found that the builder was entitled to payments as claimed under the contract but did not expose any reasoning that demonstrates the Tribunal gave any consideration to the stage of the works completed or the existence of defects and that the failure to provide an explanation is an error of law see New South Wales Land and Housing Corporation v Orr [2019] NSWCAT 231. It is submitted that in the absence of reasoning the Appeal Panel should "determine the issue afresh" and that the sum due to the builder for 'demolition' and 'slab on ground' was $50,750 plus GST for $55,825 including GST. The written appeal submissions elaborate that the cost to be incurred by the owner to rectify the major defects in the works and the cost to render the works compliant with the approved plans and specifications is $62,526.25 including GST and overhead and profit, less the fair value of the incomplete and defective wall and roof framing.

The builder's submissions

The Tribunal found that the builder is entitled to progress claims for all completed stages of the work and found that the owner owed the builder $107,662.50 for works performed. The builder submits the owner's ground of appeal must fail as there is no cross appeal seeking to impugn the Tribunal's finding that from 22 February 2021 the owner refused to allow the builder access to the property to do the work or otherwise rectify defective work in breach of clause 8 of the contract.
It is submitted that the owner cannot complain that the builder has failed to comply with the terms of the contract when the owner is liable for that failure. It would be an unreasonable construction of the contract to say the builder is prevented from charging for work carried out because a stage is not completed when the owner has prevented the completion of the stage in breach of the contract.
It is submitted that the Tribunal gave comprehensive reasons for its decision. The contract contained a mechanism for the owner to object to a progress claim on the basis of incomplete or defective work. The owner did not avail herself of these rights and so became contractually obliged to pay for the two progress claims which is the substance of the builder's claim, see written reasons for decision [29] - [32].

Grounds 3 and 4

We have had regard to the "Home Owner's Written Closing Submissions" signed 16 December 2021 and the 'Homeowner's written submissions on Appeal' signed 1 April 2022. This ground appears at page 13 of the submissions: "the Senior Member erred in finding that the Builder was entitled to be paid more than the value of the stages completed by reference to the Contract Price." It is stated that Grounds 3 and 4 can be dealt with together.
The pleaded position of the parties was set out in the written reasons for decision. Counsel submitted that "if the Home Owner is wrong and the contract is enforceable the builder is entitled to the sums which were due under the contract". The Tribunal accepted this statement and found for the builder in the claimed sum of $107,662.50. This award was based on two progress claims made by the builder in the sum of $63,800 and $43,862.50.
The ground of appeal is inadequacy of reasons, which if established raises a question of law. However, reasons for decision were provided. The Tribunal states that on the ground of the pleaded position and the stated position of counsel, there was only one calculation of money due under the contract. No alternative calculation was offered by the owner and the Tribunal accepted the only sum before it, as pleaded and particularised and apparently accepted by the owner.
We have had careful regard to the Home Owner's Written Closing Submissions, signed on 16 December 2021, said to have been disregarded by the Tribunal. There is no mention of a sum payable under an enforceable contract. The possibility that the Tribunal may find the contract enforceable, or in the event that the contract is enforceable, why the invoices due under the contract would not be payable, has not been addressed by the owner at first instance or on appeal.
To the contrary, in the 'Home Owner's Written submissions' dated 17 November 2021 the owner conceded that there is a sum due to the builder but any cost of rectification of defects should be deducted at [5.6]. Further, the owner submitted that the builder should not be paid because the work is defective rather than incomplete (see at [6]). The Tribunal did not accept those submissions. Submissions at [8] address the builder's case 'if found' on a quantum meruit basis, a case that was not pressed by the builder and which would only become relevant in circumstances where the contract was found to be unenforceable. There is reference in closing submissions to the owner's expert who assessed the cost to complete the works at $82,917.45, a sum to be offset against the contract price in the event of the builder's quantum meruit case. However the Tribunal was not required to consider an alternative case for restitution because the builder succeeded on its contract case.
At no stage did the owner submit that if the contract was found to be enforceable, the sum of $107,662.50 was not due and payable. At no stage did the owner's pleadings or submissions provide a calculation that would have enabled a finding that a sum other than $107,662.50 was payable for invoices rendered. On appeal it is argued for the first time that the Appeal Panel should "determine the issue afresh" and make a finding that on termination of the contract payment was due for the first two stages only (Demolition and Slab on Ground) because all other stages were incomplete.
A party is bound by the case he or she ran in the Tribunal below, and the appellant now seeks to argue that, contrary to the position she took before the Tribunal, that a sum other than $107,662.50 is due and payable. That cannot be allowed except in exceptional circumstances.
In McInnes v Rheem Australia Pty Limited [2021] NSWCA 89 Gleeson JA, with whom Bell P and Payne JA agreed, observed: "[44] It is trite that a party is bound by the case he or she ran below. As the High Court said in University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481 at 483, in the context of an application to reopen a case following judgment: 'It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had and (sic) opportunity to do so.' It would be inimical to the interests of justice to allow Ms McInnes to make an entirely new and different costs application on appeal, after having failed on a different basis before the primary judge: Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645-646; Water Board v Moustakas (1988) 180 CLR 491 at 487; [1988] HCA 12."
Having found that the owner had repudiated, allowing the builder to terminate the contract, the builder was entitled to payment up to termination. Accepting counsel's submissions and taking into account the amount for defective work, the Tribunal calculated the debt outstanding under the contract in accordance with the owner's stated case.
The Tribunal provided reasons from [27] and following. It relevantly found that s 10 does not prevent the builder from pursuing a claim based on the invoices issued. The Tribunal relied on the position as stated by counsel in reply, and in reliance on the pleadings and submissions as put forward by the owner, found that invoices as issued were due and payable. These findings were open to the Tribunal given that the contract was enforceable and provided that no alternative quantification on an "if found" basis was led below. The appellant has failed to establish an error of law or an error for which the leave of the Appeal Panel is required.
This ground of appeal must fail.

The Tribunal failed to consider the owner's written submissions - denial of procedural fairness - error of law

The owner's submissions

It is submitted the Tribunal denied the owner procedural fairness in not considering the owner's closing submissions. The Tribunal failed to recognise and address the issues set in the owner's written closing submissions.
It is submitted that had the submissions been considered, the Tribunal would have found that: 1. the works were not in accordance with the approved plans and specifications which was conceded by the builder's expert in the hearing, meaning that the builder was in breach of s 18B(1)(a) of the Act and also in breach of the contract; 2. the builder had adduced no evidence to rebut the owner's evidence of the cost to rectify the works; 3. none of the variations were in writing and the member failed to determine the issue in accordance with the principles enunciated in the Supreme Court decision of Paraiso; 4. the owner was entitled to the costs to rectify the works so that they complied with the approved plans and specifications and reliance on the authority of Bellgrove v Eldridge (1954) 90 CLR 613; 5. the builder was not entitled to enforce the unsigned and undated contract by operation of ss 7 and 10 of the Act; and 6. the valuation mechanism to be applied was set out in the accordance with the principles of Mann v Paterson Constructions Pty Ltd [2019] HCA 32; 267 CLR 560; 93 ALJR 1164; 373 ALR 1.

The builder's submissions

The builder denies ever having been served with written submissions dated 3 December 2021 and states that there is no evidence that they were filed with the Consumer and Commercial Division of the Tribunal. It is submitted this ground of appeal must fail as the owner has not proved the submissions were ever filed or served. There is therefore no denial of procedural fairness and this ground of the appeal is not made out and must fail.

Ground 5 - alleged failure to consider submissions

We consider that the owner's fifth ground of appeal raises a question of law.
The owner contends that the Tribunal's failure to consider the written submissions led the Tribunal into error. It is submitted that "had the member considered the decision of Paraiso he would have followed it" (see Grounds of Appeal attachment 4).
We consider that a failure by the Tribunal to deal with a "substantive, clearly articulated argument" (Dranichnikov v Minister for Immigration & Multicultural Affairs [2003] HCA 26; (2003) 214 CLR 496) can amount to an error of law. It appears that the submissions were filed with the Tribunal on 17 December 2022. On the evidence provided to the Appeal Panel it is not clear whether the submissions were considered by the Tribunal save to say the submissions are not mentioned in the written reasons for decision. The owner did not seek clarification from the Tribunal or the Registry after the written reasons were published and we cannot be certain whether the submissions were considered or not. Be that as it may, the Paraiso argument was squarely raised during the hearing, and was considered and addressed by the respondent in its written submissions.
Although the authority of Paraiso is not cited in the written reasons for decision, that of itself does not amount to an error of law. As we set out above, in respect of Grounds 3 and 4 of the appeal, the written submissions did not advance the owner's case on the contractual claim on an "if found" basis. For the reasons set out above, the written submissions did not grapple with the principles enunciated in Wright and do not assist the owner in supporting an argument that the builder was not entitled to raise agreed variations by way of defence to the owner's claim for damages for defects. The authority of Paraiso does not advance the proposition that a contract that is not signed is not enforceable, as long as the contract is compliant in all other respects. Paraiso is authority only for the proposition that in a Master Builder Association BC4 contract, unsigned variations are not enforceable. Even if we were satisfied that the Tribunal did not consider the submissions, which we are not, we are not of the view that the written submissions of 3 December 2021 would have made any difference to the outcome of the proceedings and no error is established.
We therefore do not find this ground of appeal established.

The termite barrier - finding against the weight of evidence

The owner's submissions

It is submitted the Tribunal erred in finding against the weight of evidence that a termite treatment was installed by the builder and ordered $2460.58 to be paid by the owner. It is submitted the finding of fact is in error as there is no evidence that a termite barrier was installed and in circumstances where the builder conceded under cross-examination that the termite treatment was not installed.

The builder's submission

The builder submits this ground of appeal must fail because it has complied with the Tribunal's order [2] to provide "confirmation" that a termite barrier was installed and that the property has been suitably protected against termites.

Ground 6 - the termite barrier

We are of the view that Ground 6 of the appeal must succeed. The Tribunal found that a termite barrier had been installed in accordance with plans and specifications but no certification had been provided. We are satisfied that the finding is against the weight of evidence. The builder admitted in cross-examination that there was no termite barrier installed, and also conceded that he decided instead to install a double slab (see TP Day 1 page 45 Lines 2185 to 2197). Mr Marshall: So is it your evidence that you didn't install additional termite protection because it was unnecessary? Mr Abel: Yes
In addition, we agree with the owner's closing submissions at 1.24 that the weight of the evidence establishes that the builder's expert could not independently verify the installation of a termite barrier and instead relied on the "instructions" received by the builder's solicitor. As such the "opinion" expressed by the builder's expert is not opinion evidence as an exception to the hearsay rule, but merely hearsay.
The builder in its Reply to Appeal points to recent communication from the builder "among other things the builder delivered to the Owner a certificate which states that a termite barrier has been provided in accordance with the Australian Standards and evidence that the H2 timber framing was properly treated." The Tribunal by making an order that the builder provide "certification" would not have envisaged a self-serving letter under the builder's letterhead but a certificate from a termite subcontractor that a termite barrier has been supplied and installed. The letter provided is inconsistent with the admission made under cross-examination that the builder thought it unnecessary to supply a termite barrier.
We have had regard to the letter. The letter was provided in answer to order [2] made on 11 February 2022 by Senior Member Goldstein that: 2. Within 14 days of the date of this order Step Up Renovations (NSW) Pty Ltd must deliver to [the owner] a certificate which states that a termite barrier has been provided in accordance with all applicable Australian Standards and also evidence that the H2 timber framing was properly treated for termite activity".
As was set out above, the letter that was provided is not a certificate but a non-probative letter prepared by the builder on the builder's letterhead.
In respect of this ground of appeal, in light of the reasons set out above, we have decided that leave to appeal should be granted as the owner has established that it has suffered a substantial miscarriage of justice as the finding was against the weight of the evidence. The evidence in respect of the quantum of the claim is not opposed in the reply submissions and we would set aside the original order and allow a finding and order in the owner's favour in the sum of $2416.58 plus GST or $3322.79.

Findings and Orders

The owner's appeal is therefore allowed in part, reducing order one [1] made on 11 February 2022 by $3322.79 to $102,187.30.

THE BUILDER'S APPEAL

The builder commenced Appeal 2022/0070996 on 11 March 2022. The Appeal Panel has had regard to the 1. Notice of Appeal dated 11 March 2022, 2. The Reply to Appeal dated 18 March 2022 3. The Builder's Outline of Appeal Submissions dated 15 April 2022 (22 pages). 4. The Owner's Reply to Builder's Outline of Appeal Submissions 5. The tender bundle filed jointly by both parties.
The builder seeks orders that the amount awarded in the sum of $105,517.09 be varied and in lieu thereof the builder be awarded $120,212.75.

The builder's submissions

It is submitted that the Tribunal erred at law when it made an award for damages in the owner's favour, contrary to a finding that the owner had failed to mitigate her losses.
In its submission the builder stated: "despite its finding that the Homeowner had failed to mitigate her losses, the Tribunal ultimately determined that this failure did not negate the Homeowner's right to claim damages for the defective work because the Homeowner 'has not by her failure to mitigate sustained damage which the exercise of reasonable care on her part would have prevented from happening'" (see written reasons for decision at [80]).
The builder submits this is against the weight of authority. The builder cited the authority of The Owners Strata Plan Number 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067 (Di Blasio). Having acknowledged the general principle that a person who suffers loss as a consequence of a breach of contract must act reasonably in relation to that loss in order for that loss to be recoverable, which his Honour described as a 'duty to mitigate', Ball J continued in the case of building contracts, it is also generally accepted that the owner must give the builder a reasonable opportunity to rectify any defects… The owner is required to give the builder an opportunity to minimise the damages it must pay by rectifying the defects.
At [45] - [46] Ball J relevantly held the question of what is reasonable depends on all the circumstances of the particular case. One relevant factor is what attempts the builder has made to repair the defects in the past and whether, in the light of the builder's conduct, the owner has reasonably lost confidence in the willingness and ability of the builder to do the work… It is for the defendant to prove that the plaintiff has acted unreasonably. It is not for the plaintiff to prove that it acted reasonably.
In Owners of Strata Plan v MD Constructions Pty Ltd [2016] NSWSC 162 at [27] (MD Constructions) Hammerschlag J adopted the principles summarised by Ball J in Di Blasio and continued "I proceed on the footing that as part of its duty to mitigate damages, an owner is required to give its builder an opportunity to minimise the damage is it must pay by rectifying defects…".
It is the submission of the builder that the decision in Di Blasio and MD Constructions have been applied broadly as authority for the proposition that, where reasonable, an owner must mitigate his or her loss by allowing the defaulting builder an opportunity to rectify defective works. A failure to mitigate in this way will mean an owner cannot recover damages for the cost of rectifying the defective work that would not have been payable had the builder been allowed to rectify the defects itself. Having regard to these authorities, it is submitted that it is not sufficient for the Tribunal to have found that the owner has not by a failure to mitigate sustained damage which the exercise of reasonable care on her part, would have prevented from arising".
The builder submits the Tribunal should have had regard to whether the damages payable by the builder (emphasis added) would have decreased if the owner had allowed the builder to rectify the defective works.

Failure to mitigate

First, we consider that the builder's ground of appeal raises questions of law. The builder alleges that, given the finding that the owner refused access to the site as the builder reasonably requires for the purpose of rectifying defective work, the Tribunal erred at law in awarding damages to the owner for breach of statutory warranty.
We have had regard to paragraph [29] of the builder's written submissions: … the Homeowner's duty to mitigate extends not only to the Homeowner's losses but also the builder's damages. If the Homeowner has unreasonably failed to take steps to minimise the Builder's damages she will not be entitled to recover the damages that are payable as a result of that failure."
For the reasons that follow we are of the view that the builder has not established an error of law and this ground of appeal must be dismissed. First it is necessary to set out paragraph 80 of the written reasons in full: [80] Despite the fact that the owner breached the contract by refusing to allow the builder access to the site so that it could proceed with the work and also address the defects that had been referred to in Mr James' report and in her solicitor's letter dated 6 July 2021, the owner has not by a failure to mitigate sustained damage which the exercise of reasonable care on her part, would have prevented from arising. This is to be understood in the sense that the defects of which she complains have not been made worse by her failure to grant access to the builder. What has occurred is that the builder has been denied the opportunity of rectifying those defects. Nonetheless the defects if found, were causes of action which accrued before her repudiation of the contract. In my view a failure to mitigate does not negate a party's right to claim damages for breach of contract. Such a failure only negates an owner's right to claim loss attributable to her own unreasonable conduct, or failure to take reasonable care to prevent loss of damage from happening.
The builder submits the owner unreasonably failed to take steps to minimise the builder's damages. However, that case was not articulated before the Tribunal below. It was open to the builder to provide quantification of the builder's damages said to have been caused by the owner's failure to mitigate. This would have required evidence in particular about the difference between what it would have cost the builder to rectify the defects vis-à-vis what it would have cost to have a third-party builder rectify the defects. It is entirely uncontroversial to state that "[t]he Tribunal should also have had regard to whether the damages payable by the Builder would have decreased if the Homeowner had allowed the Builder the Builder to rectify the defective work" (written submissions at [34]). To quantify if or how the damages would have been minimised is a matter of lay or expert evidence and the onus rests with the builder to establish a difference, if any, in the cost of rectification.
This is consistent with the principles of Di Blasio where Ball J states at [44] … it may be less expensive for the builder rather than a third party to rectify the defects, particularly if the builder is still on site. But the obligation is not simply an aspect of the duty to mitigate. The cost to the builder of undertaking the repairs is likely to be less than the amount that a third party would charge the owner for the same work. In that case, the owner is not mitigating its loss but rather the builder's damages (our emphasis added).
It is not consistent with the authorities of Di Blasio and MD Constructions to say no damages would have been payable for the defects caused by the builder before the contract was terminated. Costs are clearly incurred to rectify defects as found before the contract was terminated. We disagree with the proposition that an owner who has unreasonably failed to take steps to minimise the builder's damages, is not entitled to recover any damages. As was stated above, the measure of the builder's damages once a finding of defective work is established, may be the difference between what it would have cost the builder to rectify and what it cost a third party contractor to rectify. This was a matter for lay evidence and could easily have been presented to the Tribunal by way of calculation. As it was not, the Tribunal was entitled to proceed on the basis of the only assessment available to him, the cost of rectification presented by the expert, Mr James. The Tribunal may have had regard to "whether the damages payable by the builder would have decreased if the homeowner ha[d] allowed the Builder to rectify" (see builder's submission at [34]) but for the fact that no evidence was led before the Tribunal that would have allowed a reduction of damages for defects proven by the owner.

The statutory requirement of s18B

In respect of the second limb of Ground 1 of the builder's appeal, the builder submits that the Tribunal failed to consider the statutory requirements in respect of mitigation of loss. We note that the owner does not address this ground of appeal in her reply submissions.
Section 18B of the HB Act prescribes as follows: 18BA DUTIES OF PERSON HAVING BENEFIT OF STATUTORY WARRANTY (1) Breach of a statutory warranty implied in a contract constitutes a breach of the contract and accordingly-- (a) a party to the contract who suffers loss arising from the breach has a duty to mitigate their loss, and (b) the onus of establishing a failure to mitigate loss is on the party alleging the failure. (2) The duty of a party to a contract to mitigate loss in respect of a breach of a statutory warranty extends to a person who has the benefit of the statutory warranty or who is entitled to the same rights as those that a party to the contract has in respect of the statutory warranty. (3) The following duties apply to a person who has the benefit of a statutory warranty but do not limit any duty the person has to mitigate loss arising from breach of a statutory warranty-- (a) when a breach of the statutory warranty becomes apparent, the person must make reasonable efforts to ensure that a person against whom the warranty can be enforced is given notice in writing of the breach within 6 months after the breach becomes apparent, (b) the person must not unreasonably refuse a person who is in breach of the statutory warranty such access to the residential building work concerned as that person may reasonably require for the purpose of or in connection with rectifying the breach (the"duty to allow reasonable access" ). (4) A breach of warranty "becomes apparent" for the purposes of this section when any person entitled to the benefit of the warranty first becomes aware (or ought reasonably to have become aware) of the breach. (5) If a failure to comply with a duty under this section is established in proceedings before a court or tribunal concerning a breach of a statutory warranty, the failure is a matter that the court or tribunal may take into account. If the failure is a failure to comply with the duty to allow reasonable access, the court or tribunal must take the failure into account.
In our view no error is established. The Tribunal did specifically refer to s 18BA(5) at [71] of the written reasons for decision and correctly identified the mandatory requirement to take into account the owner's failure to allow reasonable access.
The Tribunal specifically found that the owner had not, by refusing access, failed to mitigate her losses because "the defects of which she complains have not been made worse by her failure to grant access to the builder". In addition the Tribunal concluded that the defects as found were causes of action that accrued before her repudiation of the contract. The Tribunal concluded that "a failure to mitigate does not negate a Party's right to claim damages for breach of contract". We agree.
Although not specifically referred to in paragraph [80] of the written reasons, s 18BA(5) has clearly been taken into account. The wording of the section merely mandates that the Tribunal must take a failure to give access into account when assessing whether the failure to mitigate by the owner has deprived the builder to minimise its loss when bringing the contract into conformity. In other words, having found that the owner had failed to mitigate her losses, the onus rests with the builder to state how that loss is to be quantified. No evidence of loss was led by the builder.
Accordingly, Ground 1 of the builder's appeal must be rejected. It involves neither an error of law nor a conclusion that was not fair and equitable or against the weight of evidence.

The builder's submissions

It is the submission of the builder that the owner has obtained approval to alter the structure of the building such that there is no utility in rectifying the defects and an award for damages to rectify defective work should not be made. At page 19 of the submission it is stated "that the gravamen of the second appeal ground is that the Tribunal failed to give adequate reasons." Inadequacy of reasons, if established, is an error of law.
The relevant submissions are contained at paragraphs [50] and following. The builder submits that the owner has applied for a development application (DA) and that the DA approves new plans for the development of the property. It is submitted that the owner has no intention of rectifying the defective work and is therefore not entitled to damages.
During cross-examination the owner made certain concessions that the roof will be replaced, and "a few other amendments to the upstairs area". The owner stated under cross examination that "the whole roof is defective and has to come off". The following question and answer are relied upon by the builder: Mr Lloyd: And so you agree that it would no longer be appropriate for the builder to come back to site to do the works in the tender document from the 23rd of December 2020 because it's been superseded by the new development application? Ms Dyjecinska: Correct, …
The builder submits that the approval of the new plans renders the works unnecessary and the new development application means that the owner no longer needed or wanted the builder to carry out the work. It is the builder's submission that the Tribunal failed to give adequate reasons for its decision in respect of this ground. Specifically, the builder argues that the Tribunal failed to explain why it had rejected the evidence of the second DA, from which it may be inferred that the Tribunal overlooked this evidence or failed to give consideration to it. In the builder's submission, it follows that the process of fact-finding miscarried.

The owner's submissions

The owner provided written submissions in reply. At [18] and following it is submitted that the development application was in evidence located at page 31 of the builder's bundle of documents and the relevant drawings are identified at page 33 of the bundle. The roof plan is identified as 'Drawing number 006 Ref1' dated 2 July 2021. The existing roof plan identifies the notation "2°" which denotes the defective roof pitch as constructed by the builder. The proposed roof plan identifies, on the roof itself above the void, the notation 4 degrees and records that the insufficient roof pitch as constructed by the builder is to be rectified. It is submitted that this work is necessary to bring the contract into conformity. It is submitted that the new DA is approval, among other things, to rectify the roof because the roof was found to be defective and needs to be replaced. The new development application is in part a response to and not independent of the defects and the replacement of the whole roof is the owner's method of rectification.

Consideration

Both parties rely on the decision of Westpoint Management Ltd v Chocolate Factory Apartments Pty Ltd [2007] NSWCA 253 (Westpoint) which considers the circumstances in which an owner may recover damages for the cost of rectifying defective works. Giles JA acknowledged that, consistent with established authority, an owner is entitled to recover rectification damages where it is necessary to undertake the rectification to produce conformity and where it is reasonable to adopt that course. If the work is not necessary and reasonable (which are questions of fact) and rectification damages are not recoverable, the owner may only recover damages for diminution in the value of the property or loss of amenity to the extent these matters are proven.
Giles JA held, among other things, the necessity and reasonableness of rectification will turn on whether the proposed work is reasonable to achieve the contractual objective. If achieving the contractual objective is not of any significance this may establish that the rectification works are not necessary. Similarly, whether the owner intends to carry out the rectification works may be of relevance, although the significance will lie with why the owner intends or does not intend to carry out the rectification work, and the light it sheds on whether the rectification is necessary and reasonable.
The onus to establish that the work to rectify the roof pitch was not necessary or reasonable rests with the builder. The relevant findings are contained at [85] and following of the reasons for decision. The Tribunal agreed with the owner that the relevant drawings contain sufficient information to establish that the roof pitch over the dining room and living room was to be four degrees. The Tribunal further found that it was a requirement of clauses 1(b)(i) and 1(c)(i) of the contract that the work and in this instance the roof work over the dining room and living room was to be carried out in compliance with the contractual plans in accordance with the development certificate. The builder's expert did not address these issues and the Tribunal found that, contrary to the plans and in accordance with the development certificate, the roof was constructed with only a two degree pitch and found it to be defective. It was the owner's expert's evidence that the cost to rectify the roof pitch is $7241 and the Tribunal found in favour of the owner.
The new DA establishes that the owner intends to rectify the roof by removing the roof and rebuilding it with a full 4 degree pitch. It is the evidence of the owner that while this rectification is underway, she is taking the opportunity to install a window that will open and make other changes to the upstairs area. There is no evidence, in the words of Giles JA, that the rectification work, to bring the roof to a 4 degree pitch, is a contractual obligation that is no longer relevant. If the owner decides, while rectifying the work, that other additional work is desirable, that does not disentitle her to an award for damages.
As Giles JA considered in Westpoint whether the rectification remains reasonable or necessary is a finding of fact his Honour went on to say at [60]: 60 But the plaintiff's intention to carry out the rectification work, it seems to me, is not of significance in itself. The plaintiff may intend to carry out rectification work which is not necessary and reasonable, or may intend not to carry out rectification work which is necessary and reasonable. The significance will lie in why the plaintiff intends or does not intend to carry out the rectification work, for the light it sheds on whether the rectification is necessary and reasonable. Putting the same point not in terms of intention, but of whether or not the plaintiff will carry out the rectification work, whether the plaintiff will do so has significance for the same reason, and not through the bald question of whether or not the plaintiff will carry out the rectification work. That question is immaterial, see Bellgrove v Eldridge. 61 So if supervening events mean that the rectification work can not be carried out, it can hardly be found that the rectification work is reasonable in order to achieve the contractual objective: achievement of the contractual objective is no longer relevant. If sale of the property to a contented purchaser means that the plaintiff did not think and the purchaser does not think the rectification work needs to be carried out, it may well be found to be unreasonable to carry out, the rectification work. An intention not to carry out the rectification work will not of itself make carrying out the work unreasonable, but it may be evidentiary of unreasonableness; if the reason for the intention is that the property is perfectly functional and aesthetically pleasing despite the non-complying work, for example, it may well be found that rectification is out of all proportion to achievement of the contractual objective or to the benefit to be thereby obtained.
We consider that the supervening event of the DA, which will remove the roof and replace it with a four degree pitched roof, is not an "event" that would render the rectification work unreasonable. If the owner elects to replace the whole roof and thereby spend more than the $7241 awarded to replace a portion of the roof, that is not, in our view so unreasonable as to disentitle the owner to an award for damages to rectify the defective roof pitch. There was no evidence before the Tribunal to suggest that the DA will render the "achievement of the contractual objective irrelevant".
In Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 rectification of the dry side of a levee was found to be unreasonable when the levee would adequately perform its function and the rectification work would not increase its capacity to repel floodwater. In that case Tobias JA said at [89], with the agreement of McColl JA and Giles JA held, that - " … whether the rectification work is a reasonable course to adopt is dependent upon a finding of fact that the proposed work was reasonable in order to achieve the contractual objective. The rectification work would be unreasonable if it was out of all proportion to the achievement of that objective or to the benefit to be obtained therefrom."
Whether the second DA renders the whole of the rectification work unnecessary is a matter for evidence. There was no evidence before the Tribunal to suggest that the second DA renders all work to bring the contract into conformity "unnecessary". The questions and answers given by the owner are not of themselves demonstrative of an intention by the owner not to rectify any of the defective work as found, nor does the DA establish that the contractual objective is no longer relevant. The owner seeks to achieve a 4 degree pitch roof, that contractual objective has not altered and the achievement of the contractual objective remains relevant. It would not conform with the established authority of Belgrove v Eldridge to suggest that an award of damages, to rectify defects, demands a slavish adherence to a method of rectification, without any ability by the beneficiary of the order to make design or other changes if desired.
For these reasons, ground 2 must be rejected. It involves neither an error of law nor a conclusion that was not fair and equitable or against the weight of evidence.
In the alternative, the builder appeals on the ground that there was an inadequacy of reasons. At [68] it is submitted that the Tribunal failed to refer to evidence [the second DA] and that the issue was critical to the disposition of the appeal. It is submitted that in the circumstances the Appeal Panel ought be satisfied that the Tribunal failed to give adequate reasons as to why it did not have regard to the second DA in determining the owner's defects claim and in fact did not give consideration to it.
We have outlined above why we are not of the view that the second DA disentitled the owner to an award for damages to bring the contract into conformity. The owner does not address this ground of appeal.
The Tribunal did not mention the second DA in its reasons for decision. However, as we are of the view that the second DA makes no material difference to the outcome of the appeal, we are not satisfied that the failure to address the DA in the written reasons would have altered the outcome of the Tribunal's orders. Insofar as the builder may be complaining that the failure to consider the second DA resulted in the wrong conclusion being reached, no error is identified. Even if the Tribunal did not refer to the second DA, a failure to give adequate reasons does not, of itself, establish an error of law which vitiates the decision. The appellant must establish that the alleged inadequacy justifies the inference that the Tribunal has failed to exercise its powers according to law. We consider that the Tribunal's reasoning was adequate, and even if it was not, any inadequacy was not sufficient to vitiate the decision.
In conclusion, we consider that the Tribunal considered all apparent relevant matters, did not take any irrelevant matter into consideration, did not give undue weight to any particular matter, did not apply a wrong principle of law and did not make a material error of fact. As the Tribunal's reasons explain its decision, there is no room for the "unreasonable result" ground referred to in House v R (1936) 55 CLR 499 - see Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd [2019] NSWCA 61; (2019) 99 NSWLR 419 per Bathurst CJ and Leeming JA at [9]-[10].
For these reasons we dismiss this ground of appeal.

Orders

The Appeal Panel makes the following orders: 1. In 2022/00059238 the appeal is allowed in part. 2. Order 1 made in HB 21/13199 and HB 21/20544 on 11 February 2022 is set aside. 3. In lieu thereof the Appeal Panel makes the following orders: 4. Izabela Dyjecinska must pay Step-Up Renovations (NSW) Pty Ltd the sum of $102,187.30 immediately. 5. 2022/00070996 is dismissed.

Costs

The respondent builder seeks an order for the costs of the appeal.
As both parties were largely unsuccessful in their respective appeals the Appeal Panel makes an order that each party pay its own costs of both appeals. If either party wishes to be heard on the question of costs the order for costs ceases to have effect and is set aside. If either party seeks to be heard, the following directions are made. 1. Each party is to pay its own costs of both appeals. 2. If either parties does not agree with costs order one (1) above, costs order (1) ceases to have effect. 3. Any party seeking a different costs order must serve submissions on the question of costs within fourteen (14) days of publication of the reasons for decision. 4. Any submissions in response must be served within twenty-one (21) days of publication of the reasons for decision. 5. Any submission in reply on the question of costs must be served within twenty-eight (28) days of publication of the reasons for decision. 6. The parties must file with the Tribunal one complete copy of all costs submissions, collated in a folder, within thirty (30) days of publication of the reasons for decision. The submissions should address whether a hearing on the question of costs can be dispensed with.
P H Molony, Senior Member: - In my opinion the homeowner should succeed with respect to ground 1 of her appeal. In all other regards, I agree with the conclusions reached by Principal Member Thode with respect to both appeals.
The homeowner should succeed with respect to ground 1 as the contract with the builder is a contract to which the requirements of s 7 of the Home Building Act 1989 (NSW) (the HB Act) apply, which is not in writing as it is not signed or dated. Therefore, s 10(1)(b) of the HB Act, operates to provide that the builder is "not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract." In reaching that conclusion, I reject the interpretation of s 10(1)(b) adopted by the Tribunal below. I do not agree that interpretation reflects the plain or ordinary meaning of that section.
As a result, I consider that the Tribunal erred in making orders that allowed the builder to recover monies owing under the contract from the homeowner. The builder was not entitled to bring such a claim. The builder may have been able to recover some or all of the monies allegedly owing by pursuing its alternate quantum meruit claim against the owner, but that claim was not pressed at hearing.
Before explaining my reasons for reaching that conclusion, it is necessary to address the issue of whether or not the homeowner is prohibited from arguing that s 10(1) of the HB Act required the building contract to be signed and dated, in order for it to be enforceable by the builder, because that was not an argument she raised before the Tribunal. A reading of the Tribunal's decision itself establishes that the enforceability of an unsigned contract under s 10(1)(b) of the HB Act was an issue that Tribunal considered and determined. The Tribunal wrote: "18. Secondly, I find that s 7(1)(b) requires a contract to be dated and signed by an on behalf of each of the parties to it, which clearly has not occurred. The issue is whether and to what extent s 10 of the Act applies to the contract. I find that s 10(1)(b) will apply to the builder of the contract: (a) is not in writing; or (b) does not have sufficient description of the work to which it relates. …. 20. It was stated in Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd at [141]: 'It is well settled that a builder without a written and signed contract for residential building is not entitled to damages for breach of contract and cannot enforce the contract: Pave & Matthews Pty Ltd v Paul [1987] HCA 5, (1987) 162 CLR 221 and Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327). 21. On the basis of the analysis of s 10 of the Act and its limited reference to s 7 of the Act as referred to above, I do not accept the above paragraph to be addressing the provisions of s 10 of the Act so far as the issue of signature is concerned. 23 In her closing submissions in Reply the owner states at 2.2 and 2.3: "The Contract is unsigned and undated, on breach of Section 7, 7A and 7B of the Act. The homeowner submits that it is therefore unenforceable by the Builder, by operation of section 10 and the common law. … 27. I find that that s 10(1) of the Act does not prevent the builder from pursuing a claim based on the owner's failure to pay progress claims or invoices issued pursuant to the building contract.
The Tribunal found that the fact that the contract was not signed did not, as a matter of law, prevent the builder from enforcing it under s 10. This was a live issue before the Tribunal and gives rise to a question of law which can be properly raised before the Appeal Panel as matter of right: see s 80(2)(b) of the NCAT Act. In her submissions the homeowner argued that the absence of a signature rendered the contract unenforceable, relying on s 10 of the HB Act as a whole as well as making specific submissions directed to s 10(1)(c). I therefore agree with Principal Member Thode that the issue of enforceability of the unsigned contract under s 10 of the HB Act is properly before the Appeal Panel.
My conclusion that the unsigned contract is unenforceable accords with the reasoning of the Appeal Panel in Vujica v TNM Roofing Pty Ltd [2022] NSWCATAP 305 (Vujica), which directly addressed the question of whether an unsigned contract was a contract in writing for the purposes of 10(1) of the HB Act. The parties have made submissions on the effect of Vujica in response to a request from the Appeal Panel. Section 10 provides: (1) A person who contracts to do any residential building work, or any specialist work, and who so contracts - (a) in contravention of section 4 (Unlicensed contracting), or (b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or (c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.
The Appeal Panel was there dealing with a situation in which the only writing said to constitute a contract was a dated quotation for the proposed works with a later agreed, negotiated price of $40,000. There were also claims for alleged variations. The contract was not signed by either party.
The builder claimed $20,000 due under the contract and $8,800 for variations. The variations claim failed before the Tribunal, because the quotation did not allow for variations, and there was, "no document evidencing any variations were agreed." The Tribunal found that the builder could recover money owing under the contract. The Tribunal ordered the homeowners to pay the builder $12,872, being the amount found owing under the contract of $20,000, less an offset for repairs proved by the homeowners.
On appeal, the Appeal Panel found that s 10(1)(b) applied to make the contract unenforceable by the builder because there was no contract in writing to which the requirements of with s 7 of the HB Act applied. Section 7 provides: 7 Form of contracts (other than small jobs) Note - Section 7AAA applies to contracts for small jobs. (1A) This section applies to a contract only if the contract price exceeds the prescribed amount or (if the contract price is not known) the reasonable market cost of the labour and materials involved exceeds the prescribed amount. The prescribed amount is the amount prescribed by the regulations for the purposes of this section and is inclusive of GST. (1) A contract must be in writing and be dated and signed by or on behalf of each of the parties to it. (2) A contract must contain - (a) the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and (b) the number of the contractor licence, and (c) a sufficient description of the work to which the contract relates, and (d) any plans and specifications for the work, and (e) the contract price if known, and (f) any statutory warranties applicable to the work, and (f1) the cost of cover under Part 6 or 6B (if insurance is required under Part 6), and (g) in the case of a contract to do residential building work - a conspicuous statement setting out the cooling-off period that applies to the contract because of section 7BA, and (h) in the case of a contract to do residential building work (other than a construction contract to which the Building and Construction Industry Security of Payment Act 1999 applies) - details of any progress payments payable under the contract, and (i) in the case of a contract to do residential building work - a statement that the contract may be terminated in the circumstances provided by the general law and that this does not prevent the parties agreeing to additional circumstances in which the contract may be terminated, and (j) any other matter prescribed by the regulations for inclusion in the contract. (3) The contract must comply with any requirements of the regulations. (4) If the contract price is known, it must be stated in a prominent position on the first page of the contract. (5) If the contract price is not known or may be varied under the contract, the contract must contain a warning to that effect and an explanation of the effect of the provision allowing variation of the price. The warning and explanation must be placed next to the price if the price is known. (6) A contract must not include in the contract the name of any person other than the holder of a contractor licence as, or so it may reasonably be mistaken to be, the holder's name. (7) This section does not prevent the holder of a contractor licence with a business name registered under the Business Names Registration Act 2011 of the Commonwealth from also referring in such a contract to the business name. (8) This section does not apply to - (a) a contract that is made between parties who each hold a contractor licence and is for work that each party's contractor licence authorises the party to contract to do, or (b) a contract to do specialist work that is not also residential building work. Note - The exception in paragraph (a) applies to a subcontracting arrangement between licensees, and to a contract between licensees for work to be done on premises that one of the licensees owns.
The Appeal Panel's reasons for finding that the contract did not comply with s 7 are detailed. In summary, the Appeal Panel concluded that the words "contract to which the requirements of section 7 apply that is not in writing" in s 10(1)(b) should be construed, in the context of the Act as a whole, as meaning a contract that meets the requirements of s 7(1), namely that it be, "in writing and be dated and signed by or on behalf of each of the parties to it." The Appeal Panel wrote at [70]: "70 Section 7 of the HB Act requires a contract in writing, signed and dated by the parties containing the information specified in that section. Failure to include those matters constitutes a failure to comply the requirements of the HB Act and, necessarily, a failure of the required contract to be in writing containing those requirements."
In reaching its decision the Appeal Panel in Vujica relevantly concluded that the contract was not enforceable under s 10(1)(b) because: 1. it was not in writing as: 1. it was only partly in writing, with that writing consisting of the quotation which had been the subject of later negotiations which varied the price: see para [80] of Vujica (the first aspect of the decision); 2. the contract was not signed by the parties (the second aspect of the decision); and 1. the contract did not comply with the requirements of s 7(2) of the HB Act; see para [52] of Vujica although the decision did not identify which requirements of that sub-section were not complied with (the third aspect of the decision).
It is not necessary in this case to consider the first and third aspects of the decision, because they do not arise in the current circumstances. In my view we should follow the second aspect of the decision of the Appeal Panel in Vujica, which is applicable, for a number of reasons.
Unlike the decision in Hayward v Timilty [2009] NSWDC 54 (Hayward), the Tribunal in Vujica was required to determine the consequence provided by s 10(1)(b) of the HB Act, when the alleged contract was, among other things, unsigned. The conclusion that the contract was unenforceable by the builder because it was unsigned forms part of the legal reasoning underlying that decision. In contrast, Williams DCJ's comments in Hayward were made in a case where the issue to be determined was the consequence of a written contract not containing, "a conspicuous statement setting out the cooling-off period", as required by s 7(2)(g), rather than the absence of signatures. Williams DCJ did not consider the consequence of the contract being unsigned, whereas the Appeal Panel in Vujica expressly did so. It therefore did not form part of the basis for the decision in Hayward.
The decision of Scotting DCJ in Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSWDC 507 (Dyna) is wholly consistent with the second aspect of the decision in Vijuca. In Dyna, the Court concluded that there was no concluded contract between the parties. In the course of discussion Scotting DCJ commented, in obiter (as the comments did not form part of the legal basis for the decision) that: '141. It is well settled that a builder without a written and signed contract for residential building work is not entitled to damages for breach of contract and cannot enforce the contract: Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 and Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327'.
The Tribunal in this case expressly rejected these comments, which it considered to be at odds with the plain reading of s 10, and proceeded to follow Hayward. In doing so, the Tribunal paid no regard to contextual considerations arising with respect to the meaning of, "a contract to which the requirements of section 7 apply that is not in writing" in s 10(1)(b). It simply followed what it considered to be the plain meaning of the sub-section: a proposition I do not accept. Among the textual considerations it did not consider was the apparent conflict between that plain reading, which did not require contracts to be signed in order to be enforceable by a builder, and the requirements of the legislative scheme that all variations to contracts be in writing and signed by the parties, on pain of being unenforceable if not signed. The inconsistency is obvious as is the potential for resultant confusion among builders and homeowners.
Secondly, contrary to the submissions of the builder, I do not accept that the Tribunal should follow the decision in Hayward. The District Court, while a court of the record (see s 8(2) District Court Act 1973 (NSW)), is not a Superior Court: R v Longshaw (1990) 20 NSWLR 554 at 564 per Gleeson CJ. The District Court plays no supervisory or appellate role vis a vis the Tribunal, however constituted. As such, its decisions do not bind the Tribunal. Considered comments of the District Court on a matter of law, whether ratio decidendi or obiter dicta, should be followed in the Tribunal out of comity unless the Tribunal is convinced, they are wrong, or they are in conflict with more persuasive or binding authority. Halsbury's Law of Australia, Lexis Nexis at [125-160] states (references omitted): "Although bound by the decisions of the High Court, lower courts retain the duty and function of refining and developing legal principles that have not been the subject of High Court decisions. State Supreme Courts are not bound by their own decisions but should exercise caution before overturning a previous decision. An inferior court is not bound by the decision of an inferior court of higher curial gradation, although the principle of judicial comity means the inferior court should not depart from the decision of a higher court unless convinced the decision is wrong. Similarly, while courts are not bound by the decisions of courts of equal rank from other jurisdictions, the principle of judicial comity applies unless the original court considers the decision of the other court wrong. In the case of uniform legislation, an intermediate appellate court and courts below it should not depart from an interpretation placed on a provision of such legislation by another intermediate appellate court."
In Henadeck Pty Ltd v Independent Liquor and Gaming Authority; Niraula v Independent Liquor and Gaming Authority [2020] NSWCATAP 200 (Henadeck) an Appeal Panel constituted by the President and (then) Principal Member Britton reviewed the principles relevant to a consideration of whether an Appeal Panel is bound by obiter dicta of a single Supreme Court Judge. The Appeal Panel explained at 88: "The general principles applicable to the precedential weight of obiter dicta, including the role of the appellate court hierarchy, were largely agreed in these appeals. They can be summarised as follows: 1. Decisions are only authority for what they decide, as opposed to what was held without argument: Randren House Pty Ltd v Water Administration Ministerial Corporation [2020] NSWCA 14 at [45]; Spence v State of Queensland 93 ALJR 643; [2019] HCA 15 at [294] (Edelman J). 2. An intermediate appellate court should not decline to apply a legal principle which has been set out in "seriously considered dicta" by a majority of the High Court, and which is otherwise consistent with a substantial line of common law authority: Farah Constructions at [134]. 3. Although "considered dicta" of an intermediate appellate court is not strictly binding on courts in a lower or equal position within the judicial hierarchy, it must be afforded great weight and should be departed from only with the greatest of caution: Ying v Song at [19]; Fullerton Cove at [279]. 4. Intermediate appellate courts should not depart from the decisions of intermediate appellate courts in other jurisdictions in relation to the interpretation of the same legislation or of common law principles: Farah Constructions at [135]; Gett v Tabet at [286]; Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 483; [1993] HCA 15 at [4]. 5. The same principle should apply when the Court is asked to depart from one of its own decisions that is on point, and when it is confronted with a decision of an Australian intermediate appellate court of comparable jurisdiction in relation to similar legislation: Harrison v Melhem [2008] NSWCA 67 at [188] (Mason P). 6. Generally speaking, intermediate appellate courts are not legally bound to follow their own earlier decisions (including statements made in ratio decidendi). However, as a matter of practice, they should only depart from such authority, or the authority of courts of coordinate jurisdiction within the national system, if they are of the view that the decision is "plainly wrong": Gett v Tabet at [273], [277]-[278], [281]. 7. As a matter of comity, single judges of the NSW Supreme Court will generally follow an earlier decision of another single judge, although they are not legally bound to do so: see e.g. Segal & Anor v Waverley Council [2005] NSWCA 310 at [48], [57]-[59]; New Cap Reinsurance Corporation Ltd (in liq) v A E Grant & Ors [2008] NSWSC 1015 ("New Cap Reinsurance") at [109] (White J). 8. Statements made in obiter dicta have varying degrees of authority. For example, a "mere passing remark or a statement or assumption on a matter that has not been argued" or "broad observations made on the spur of the moment" will have less weight than "a considered judgment on a point fully argued": Nowicka at [21]-[25]. 9. The weight accorded to obiter dicta will vary depending on the circumstances in which it was made: Ying v Song at [19], [23]. 10. In circumstances where a matter was not fully argued before the earlier court, and "relevant material" was not drawn to its attention, a subsequent court of coordinate jurisdiction may consider that a party before it should not be "disadvantaged" by reason of the earlier obiter conclusion: Sok at [34] (per Branson J, with Marshall J agreeing); see also New Cap Reinsurance at [109]. 11. In order to depart from such earlier authority, a court must have a "strong conviction" that the earlier decision was erroneous (not merely that the former approach is no longer preferred), and must be able to clearly demonstrate "the nature of the error … by the application of correct legal analysis": Gett v Tabet at [294]-[295]. 12. That reasonable minds may differ on a question is not a foundation for a conclusion that a decision supported by exposed reasons for judgment after full argument is "plainly wrong": Nowicka at [21]-[22]."
The conclusions reached with respect to the second aspect of the decision in Vijuca are on point in this case. That Appeal Panel decided that s 10(1)(b) of the HB Act provides that unsigned, written contracts are unenforceable by a builder. This Appeal Panel should follow that decision out of comity. In contrast, the decision in Hayward is obiter, and is at odds with the considered reasoning in Vijuca.
The decision in Vijuca is entirely consistent with the obiter dicta of the District Court in Dyna (which it did not cite) and that of Robb J in Anjoul v Anjoul [2021] NSWSC 592 at [209] (Anjoul) (which it did cite at [61]).
In Anjoul the Court decided that renovation works were not done under a contract between family members. Rather, the work was done pursuant to an owner builder permit held by one of them under the HB Act (see para [292]). In the course of the decision Robb J considered whether, in a "claim under the Home Building Act that [a party] was not entitled to recover any amount in respect of the renovation works for the property" due to the operation of s 10 of the HB Act (at [360]). There the "contract was not in writing and did not have sufficient description of the work to which it related, as was required by s 7 of the Home Building Act'' [at 281]. His Honour explained: "208 Jerry did not enter into a formal contract with Ashley and Anthony, or either of them, on the basis that he would carry out or manage the renovation work and they would pay him an agreed price for the work. Ashley did not lead evidence capable of establishing that she and Jerry entered into a contract that obliged him to perform the renovation works on the property and that entitled him to payment of a price for undertaking those works. 209 Consequently, if s 7 of the Home Building Act required the parties to enter into a written contract that satisfied that section, no such written contract was made. In these circumstances, s 10 of the Act would have the effect that Jerry would not be entitled to damages or to enforce any other remedy in respect of a breach of contract by Ashley. [my emphasis]
A reading of the decision as a whole makes it clear that Court gave serious consideration to the operation of s10(1)(b) of the HB Act (see paras [279] to [288]), which was argued before it, with the result that the views of Robb J, with respect to the operation of s 10, should be regarded as seriously considered dicta of the Supreme Court, and followed unless plainly wrong. The difficulty with the decision in Anjoul is that it is not precisely on point with the present case. Unlike the situation here, there was no written contract which could be signed and dated; rather than an unsigned and undated NSW Residential Building BC4 Contract, as exists in this case.
I note that the decision in Anjoul was delivered on 25 May 2001, some six months before the Tribunal heard the matter now being considered by the Appeal Panel and that it was not referred to in the Tribunal's decision.
The second aspect of the decision in Vijuca is consistent with the decisions in Dyna and Anjoul, and should be followed in preference to the obiter in Hayward, which is at odds with both of them. The second aspect of the Vijuca decision is the result of a thorough and closely reasoned consideration by an Appeal Panel of the application of s 10(1)(b) of the HB Act. I agree with the reasoning with respect to the second aspect of the decision in Vijuca and think it compelling.
In addition, the wording of s 10(1)(b) itself makes it clear that for a contract to be "in writing" for the purposes of s 10(1)(b), it must be signed. That sub-section applies to "a person who contracts to do residential building work under a contract to which the requirements of section 7 apply that is not in writing." A contract in writing to which s 7 applies is one that complies with s 7(1), namely a written contract that is signed and dated, both of which require writing and, on the ordinary understanding of the word, from part of the "writing" that constitutes a contract in writing.
In this case the Tribunal adopted a different construction of s 10(1)(b), with the result that, if one can discern written terms of a residential building contract sufficient to evidence a contract, that contract would be enforceable by a builder under the section, despite the fact that it is not signed or dated. In my view that construction is wrong and fails to give sufficient weight to the words, "to which the requirements of section 7 apply" in s 10(1)(b). Those words embrace all the requirements of s 7(1) and require a written contract which is signed, necessarily in writing, by affixing a signature or mark indicating agreement, and dated.
I agree with the Appeal Panel in Vijuca that this construction of s 10 is consistent with legislative scheme created by the HB Act. The construction adopted by the Tribunal below is not. This is so for a number of reasons which formed part of the Appeal Panel's reasoning underlying the second aspect of the decision in Vijuca.
First, there is an inconsistency between the Tribunal's interpretation of the requirement that contracts be in in writing for the purposes of s 10(1)(b), and the legislated requirement that variations be in writing and signed. Section 7E of the HB Act relevantly provides: (1) A contract must include (and is taken to include) each of the terms set out in Part 1 of Schedule 2. A contract that contains a term that is inconsistent with a term set out in Part 1 of Schedule 2 is unenforceable to the extent of the inconsistency. (2) The regulations may make provision for or with respect to - (a) terms or other matter that must be included in a contract or a class of contracts, or (b) terms or other matter that must not be included in a contract or a class of contracts. …
Schedule 2 Part 1 cl 1 of the HB Act then provides: Schedule 2 Terms to be included in certain contracts Part 1 Contracts to do residential building work 1 Plans and specifications (1) All plans and specifications for work to be done under this contract, including any variations to those plans and specifications, are taken to form part of this contract. (2) Any agreement to vary this contract, or to vary the plans and specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract. [my emphasis]
Part 1 of Sch 3 of the Home Building Regulation 2014 (NSW) (the HBR) then provides that a condition to be included in all contracts is: (2) Any agreement to vary this contract, or to vary the plans and specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract.
In Vijuca, the Appeal Panel observed that: 79 It would be a curious result if, as required by cl 1(2) of Sch 2, that "[a]ny agreement to vary [a contract to which s 7 applies] or to vary the plans and specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract" but the original contract did not have to meet this requirement. Rather, applying the principles in Project Blue Sky, the language in s 10 and the requirement for writing should be construed in a manner "consistent with the language and purpose of all the provisions of the statute … [and] by reference to the language of the instrument viewed as a whole".
Further, it would be both confusing and anomalous were the HB Act to provide that variations to a contract, which contract can be enforced when unsigned, are "taken to form part of this contract," but must be signed to be enforceable. The inconsistency is patent. The potential for confusion and uncertainty is significant. A construction of s 10(1)(b) which perpetuates such an inconsistency is to be avoided. In CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2, Brennan CJ and Dawson, Toohey and Gummow JJ said at [88]: "[T]he modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent."
The HB Act is, at its heart, a consumer protection statute which seeks to protect consumers by, among other things, regulating residential building work in terms of who may undertake such works; the contractual requirements relating to residential building works; providing for statutory warranties relating to such works; the discipline of licence holders; and, by providing a dispute resolution mechanism. As such, it should be interpreted beneficially for consumers and any ambiguity resolved with that object in mind: see Hall and Macken, Statutory Interpretation: Principles and Context 2021, Lexis Nexis at 6.13 to 6.13 and Pearce and Geddes, Statutory Interpretation in Australia (9th Ed), Lexis Nexis at 9.6. It is improbable that Parliament intended to establish a regime under which a contract to do residential building works that is not signed, is enforceable by a builder, while a variation of such contact, which forms part of the contract, must be signed to be enforceable. The HB Act should be interpreted to avoid such an anomaly.
The Appeal Panel in Vijuca also referred to the second reading speech on the introduction of s 10 of the HB Act (in its current from) by the Statute Law (Miscellaneous Provision) Act (No 2) 2001 (NSW) (2001 Amending Act): see New South Wales Legislative Council, Parliamentary Debates (Hansard), 2 July 2001. The amendments were said to - "… ensure that those sections do not have the unintended effect of rendering a building contract wholly unenforceable at the suit of the builder merely because of the builder's very minor contravention of certain provisions of the Act."
In the context of the legislative scheme, to read s 10(1)(b) as not requiring a written contract, "to which the requirements of s 7 apply," to be signed (which signatures form part of the writing), would allow a builder to recover under a contract following a significant and major breach of s 7(1). That section puts in place significant protections for parties to residential building contracts, aimed, in the context of the HB Act, at ensuring certainty and evidencing mutual understanding of contractual obligations. The requirement for a contract to be signed by the parties to it is an essential requirement of the HB Act with respect to the form of contracts. The HB Act provides significant regulation of contracts with respect to their form, content and effect: see Divisions 1 and 2 of Part 1 of the HB Act and Part 2 of the Home Building Regulation 2014 (the HBR). Proceeding with residential building work upon an unsigned contract is not a minor contravention of the Act.
For s 10(1)(b) of the HB Act to be construed so as to allow builders to enforce unsigned contracts, is not to excuse a "very minor contravention" of a provision of the Act, but to ignore a requirement as to the form of contracts which provide fundamental protection for consumers. The HB Act puts in place a legal requirement that residential building contracts be signed and dated by homeowners before they can be enforced against them. This ensures that there is objective evidence of the homeowner's agreement and certainty as to the terms of the bargain agreed to. Consistent with the policy objectives of the HB Act, this enshrines an important and necessary protection for homeowners entering into residential building contracts, that all contracts must be signed. The fact that there may be cases in which the application of the requirement for signatures is seen as leading to a harsh result, does not, under the legislation as drafted, create an exception that allows a builder to enforce a contract not signed by a homeowner. If the "requirements of s 7 apply" to a contract, it is required to be in writing, signed and dated. It is incumbent on builders who wish to enforce residential building contracts to ensure they are signed. The fact that a homeowner may admit to entering an unsigned contract, does not change the fact that the contract does not comply with the requirements of s 7 and is not enforceable by the builder under s 10(1)(b).
The construction of s 10(1)(b) followed by the Appeal Panel in the second aspect of the decision in Vijuca avoids the peril of unsigned contracts and provides a construction which is consistent with the context and wording of the HB Act as a whole. In my opinion the Tribunal erred when it found that the unsigned contract between the parties was enforceable by the builder. On the proper construction of s 10(1)(b) it was not.
In his concurring opinion in Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327 Handley AJA (as he then was) explained: 55 Section 7(1) of the Home Building Act 1989 requires contracts to be in writing signed by or on behalf of the parties. … 56 A contract in writing that is varied informally ceases to be "a contract in writing". The contract as varied was not enforceable by the builder, and the informal variation may have prevented him enforcing the original written contract because "the contract" was no longer in writing. It is clear however that a contract still exists in such a case which is fully enforceable by the owner.
That understanding further emphasises why the interpretation of s 10(1)(b), which permits an unsigned contract to be enforced by a builder, is at odds with the operation of the Act with respect to contracts and variations and should be rejected.
A builder who cannot recover under a contract when a contract is unsigned, may seek to recover for the work and labour done and materials supplied, on a quantum meruit basis, seeking fair value for the work done on the basis of unjust enrichment: see Pavey & Matthews Pty Ltd v Paul [1987] HCA 5, 162 CLR 221 and Mann v Patterson Constructions Pty Ltd [2019] HCA 32; 267 CLR 560; 93 ALJR 1164.l In the present case, for reasons that are not clear, the builder did not pursue his quantum meruit claim before the Tribunal, despite having made one.
With respect to the variations, I agree with Principal Member Thode that they were approved by the homeowner in emails which are taken to signed by operation of the s 8 of the Electronic Transaction Act 2000 (NSW): see Paraiso v CBS Build Pty Ltd [2020] NSWSC 190 per Fagan J at [60]. I also agree that the builder is only seeking to use them as a defence in accordance with the decision in Wright v Foresight Constructions Pty Ltd.
I agree with the Principal Member's conclusions with respect to the builder's appeal.
With respect to the owner's appeal, I would allow the owner's appeal, set aside the orders made by the Tribunal and: 1. make an order dismissing the builder's application; and 2. order the builder to pay the owner the sum of $7,241 being the cost of rectification within 28 days.
I would dismiss the builder's appeal.
Given that Principal Member Thode and I have reached different conclusions with respect to ground 1 of the owner's appeal, s 57(3)(a) of the NCAT Act provides that, as presiding member, her decision prevails. In those circumstances, the orders she proposes to determine the appeals and with respect to costs prevail. 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 24 February 2023 - Representation for Respondent amended. 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: 24 February 2023

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