Fordham v Dewsash Pty Ltd t/as S.P. & W. Hobson

C. The Tribunal proceedings 8The Tribunal member determined that the matter required him to determine three issues: (a)Was the slab as built a breach of the building contract; (b)Did the plaintiff mitigate his loss if there was a breach; and (c)Which party had the right to terminate the contract. 9In the course of dealing with these three issues, the Tribunal member made findings which can be summarized as follows: (i)Contrary to the defendant's contention, there was no agreement prior to 28 April 2003 (when the invoices were supplied) that $36,000 was payable upon the pouring of the main slab with the veranda slab to be poured separately. (ii)On about 28 April 2003 the contract was varied by agreement (or by the plaintiff allowing the defendant to imagine that he agreed) so that a further amount of $7,000 (in addition to the $29,000 paid on that day) was to be paid on completion of the slab. (iii)The refusal by the plaintiff to pay the additional $7,000 indicated an unwillingness by the plaintiff to be bound by the contract as agreed and empowered the builder to stop work. (iv)This variation of the contract was an informal variation, such that the builder could not assert a right to payment under the contract but was entitled to rely on a quantum meruit. (v)The plaintiff was estopped from disputing that the value of the slab was an additional $7,000 in addition to the $29,000 already paid. (vi)The builder was entitled to succeed on the cross-claim for $7,000. (vii)There is an argument that the slab satisfied the contractual requirements, but because other aspects of the case are fatal to the plaintiff's claim the question of breach of contract need not be decided. (viii)The compromise reached between the experts about a topping slab was binding on the parties, and governed their rights and responsibilities. (ix)The need to strengthen the slab was a consequence of the way the builder constructed the slab and so the builder must bear the cost of the extra works. (x)The only evidence of the value of the extra works was Mr Simpson's estimate of $8,000, which was accepted. (xi)Were there a breach of contract by the builder, the plaintiff had a duty to take all reasonable steps to mitigate his loss, by selecting the cheapest solutions reasonably available. (xii)The plaintiff's expert, Mr Noonan, withdrew his approval to the slab topping even though he had agreed previously. It was possible he had succumbed to pressure from the plaintiff, and as a result, little weight could be given to Mr Noonan in measuring reasonableness. Mr Simpson seemed ready, willing and able to certify the slab topping, and his evidence was preferred to Mr Noonan's. (xiii)The plaintiff unreasonably refused to proceed with the topping slab and failed to mitigate his loss, which would otherwise be $8,000. (xiv)The plaintiff should pay the defendant's costs.

D. The Appeal 10The plaintiff appealed from the Tribunal decision pursuant to section 67 of the CTTT Act. Section 67 contains the following provisions: "(1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the District Court against the decision. ... (3) After deciding the question the subject of such an appeal, the District Court may, unless it affirms the decision of the Tribunal on the question: (a) make such order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or (b) remit its decision on the question to the Tribunal and order a rehearing of the proceedings by the Tribunal. (4) If such a rehearing is held, the Tribunal is not to proceed in a manner, or make an order or a decision, that is inconsistent with the decision of the District Court remitted to the Tribunal." 11The plaintiff may have commenced the appeal shortly after the prescribed statutory period, without leave. The defendant did not oppose an order for leave to be granted, and accordingly I granted an extension of time for the filing of the appeal to the date of the filing of the appeal. 12In Kostas v HIA Insurance Services Pty Limited [2010] HCA 32, French CJ at [25] held that: "The words "question with respect to a matter of law" are wide enough to encompass a question of mixed law and fact. Questions of fact and law are often closely intertwined." 13The plurality in Kostas (Hayne, Heydon, Crennan, Bell JJ) determined at [90] and [91]: "It is sufficient, for present purposes, to determine that the ground usually described as a "no evidence ground" raises a question of law... Whether there was no evidence to support a factual finding is a question of law, not a question of fact...What amounts to material that could support a factual finding is ultimately a question for judicial decision. It is a question of law." 14The plurality declined at [88] to determine in the abstract the precise ambit of the words "question with respect to a matter of law". 15The plaintiff asserted the following errors by the Tribunal: "1 The finding that the there was an agreement for the Plaintiff to pay $36,000 on completion of the slab. 2 The finding that the Defendant is entitled to a quantum meruit. 3 The finding that the Plaintiff is estopped from asserting that the value of the work related to the completion of the slab was other than $7,000. 4 The finding that the Defendant was entitled to stop work until the $7,000 was paid. 5 The Tribunal failed to make any finding as to Plaintiff's claim for breach of contract. 6 The finding without evidence that Mr Simpson would have certified the slab as built and will certify the slab as augmented. 7 The finding that there was a compromise agreement binding on the parties. 8 The finding without evidence that Mr Noonan resiled from his previous opinion offered. 9 The finding without evidence that Mr Simpson had designed the topping slab and was ready, willing and able to certify it. 10 The finding without evidence that the Plaintiff's entitlement to a quantum of loss of $8,000. 11 The finding that the Plaintiff had failed to mitigate his loss. 12 The finding without evidence that the Plaintiff's claim demolition and reconstruction was (as pleaded) $91,000 in round figures. 13 The Tribunal treated the hearing as a final hearing when it was a hearing on liability and part of quantum only."

Ground 1: The agreement to pay $36,000. 16This ground relates to finding (i) and (ii) of the Tribunal set out in paragraph 10 above. 17The plaintiff alleges that the finding of an agreement falls within s 67 on two bases: it is a mixed question of fact and law, and in any event there was no evidence to support the finding. It is clear from Kostas that the second basis falls with the ambit of the appeal jurisdiction created by s 67. I am also of the view that in the circumstances of this case, a finding of an agreement is a mixed question of fact and law, which would fall within the ambit of s 67 according to the decision of the Chief Justice in Kostas at [25]. 18The undisputed evidence was that on or about 28th April 2003, before the slab was poured, the defendant gave the plaintiff three documents, these being: (a)Tax Invoice 0184 for $36,000; (b)Part A Progress Claim No. 1 for $29,000 dated 27th April 2003; and (c)Part B Progress Claim No. 1 for $7,000 dated 27th April 2003. 19On 28 or 29 April 2003, the plaintiff paid the defendant $29,000. The plaintiff's evidence as to the circumstances under which this amount was paid is set out in detail in Annexure "K" to his witness statement dated 30 November 2009 filed with the Tribunal and adhered to under cross-examination at T28/7/2010 p 23.5: Q: I mean the reality is, Mr Fordham, if you haven't paid the builder the $29,000, he wouldn't have poured the slab. A: Would have been good if he hadn't. Q: But he wouldn't have poured it if you hadn't paid it. A: Paul rang me a couple of days before that date that I paid, and asked me, because of the delay in time, and the fact that his contract - he couldn't pay his contractors, he'd outlaid a lot of money and he couldn't pay his contractors, the kids were - their kids were starving, could I make an advance on progress payment number 1, and I agreed to that. He couldn't tell me how much he wanted upon that date. Three or four days later when he turned up on the Sunday, he had these payments already - progress payments already made out, and I was astounded at the amount, because the amount of work that had been done to that date didn't amount to $29,000. Nevertheless, I paid him the $29,000 which is what he asked for, and then when I saw the second progress payment, number 2B or whatever he called, for $7,000, that's when I said, "No, that's $21,000, its not due until the veranda slabs are done and all that sort of thing". Q: Would he have poured the slab if you hadn't paid him the $29,000? A: I doubt it, I'm sure that he wouldn't have. 20This evidence denies an agreement to pay the further sum of $7,000. The defendant asserted that it was open to the Tribunal to reject the plaintiff's evidence, and, in that event, the Tribunal's finding of an agreement to pay a total of $36,000 was not so illogical or against the weight of the evidence as to constitute an error of law. 21The difficulty with the defendant's submission is that the rejection of the plaintiff's evidence does not operate to supply the contrary evidence. The Tribunal accepted that the sum of $50,000 was due under the contract when the slabs were complete. I accept that the invoices delivered to the plaintiff constitute evidence of an offer by the builder for a variation to the effect that $29,000 be paid on 28 April 2003 and that $7,000 be paid after the pouring of the main slab. 22However, I do not think that the payment of $29,000, without more, is sufficient to support a finding of an agreement that a further $7,000 would be paid after the main slab was poured. 23The evidence of Mr Hobson was as follows (T29/7/2010 pp 6.45-7.11): Q: What you were saying yesterday is the contract says, "slab complete $50,000". You were saying, "Oh no, that's what it might say, but in my mind, slab complete means the home and the house slab because I built the veranda later". Mr. Shepherd led evidence from you yesterday to indicate that there was a variation to that $50,000, based on conversations which allowed you then to submit a claim for $36,000, remember that? A: Mm-hmm. Q: Why was it necessary to have a variation if the contract said $50,000 on completion of slab, and you, in your mind, had completed the slab that you thought was included in that $50,000? A: The word variation, wasn't actually a variation. Like it was - it was just - the figures were all there, and because the time lapse went on for so long, I had made a claim for the money that I actually put into the place at that time, and that came to that amount for the slab, and the difference was for the veranda slab. Now, to me, a variation is when there's a plus or minus cost, and there's no plus or minus, I was just requesting a payment for what I've done. And at T28/7/2010 p 63.45-63.50: Q: If the contract was to be varied by postponing the construction of the veranda, why did you not document it as you did with the three minor variations? A: Possibly because I didn't believe it as a variation because no money is going to be on it, plus or minus. Like to me, it's not a variation, it's just a different program of work. Wasn't going to cost me any money or Mr. Fordham. 24This evidence does not seem to me to support a variation of the agreement to require a payment of a total of $36,000 after the pouring of the main slab. The Tribunal member noted that no claim of duress or lack of consideration was maintained by the plaintiff in respect of the variation but the absence of such a claim does not supply evidence of acceptance by the plaintiff of the obligation to pay a further $7,000. There is no conduct or words by the plaintiff in any of the evidence that indicates an acceptance of the proposal by the defendant. I do not regard invoices sent after the event as supplying evidence of an agreement. 25Accordingly, I find that there was no foundation for any findings of a varied agreement by the Tribunal other than an agreement to pay $29,000 in late April 2003. To some extent this lack of evidence is recognized by the Tribunal by its alternative finding of "allowing Mr Hobson to imagine that he agreed". This alternative finding suggests that there was no acceptance, rather that the conduct of the plaintiff gave rise to some form of estoppel. An estoppel by conduct requires that there be evidence of the conduct giving rise to an assumption, or reliance, by the defendant so as to act to its detriment. These are not matters the subject of findings by the Tribunal, and do not appear to be supported by evidence. I do not regard the finding quoted earlier in this paragraph as sufficient to establish an estoppel. 26It follows that ground 1 is established: the finding by the Tribunal of an agreement between the parties for the plaintiff to pay a further $7,000 on the pouring of the slab is an erroneous finding with respect to a matter of law.

Ground 2: the defendant is entitled to a quantum meruit 27The Tribunal also relied upon quantum meruit and the decision in Pavey & Matthews v Paul (1987) 162 CLR 221 (see finding (iv) in paragraph 9 above. 28An action in indebitatus assumpsit for the value of the work done and materials supplied, otherwise known as an action on a quantum meruit, depends on proof by the builder that he did the work and that the owner accepted the work without paying the agreed remuneration: Pavey v Matthews at 228. 29In the present case, it is not in dispute that the builder did the work, but the owner's acceptance of the work and the agreed remuneration remain matters in dispute. I have already decided that there was no evidence of an agreed remuneration upon the pouring of the primary slab. Nor do I think, in circumstances where the parties have been found to have agreed upon the need for a topping slab, that there was acceptance of the work done, at least not without rectification. 30The defendant submitted (at [53] of its submissions): "...the position as at the time the applicant terminated the contract was that the common ground was that the builder had completed this work and therefore must be entitled to payment for what he had done as at the time the contract was terminated. Any putative entitlement to damages for breach of the contract must nevertheless account for the builder's entitlement to payment for work done." 31Of course, the owner must give credit for any work done. But if the owner has terminated the contract for breach, the builder is only entitled to payment for work done to the extent that the costs to complete the work (including payments already made to the builder) are less than the contract value. So much was provided for in clause 36.4 of the contract which stated: 36.4 If the costs incurred by the owner are: (a) more than the unpaid balance of the contract price the builder must pay the difference to the owner within 7 working days of receiving the notice from the owner; or (b) less than the unpaid balance of the contract price the owner must pay the difference when giving the notice as a debt due and payable. [emphasis omitted] 32It follows that the value of the work done by the builder must take account of the cost of the remedial topping slab, and, potentially, the cost to complete the work. It was an error for the Tribunal to ignore these costs and simply award the builder the $7,000 as the additional value of the work done to date.

Ground 3: the plaintiff is estopped from asserting the value of completing the slab was other than $7,000. 33This finding of the Tribunal ((v) in paragraph 9 above) is dependent upon the finding of an agreement. The Tribunal member found: "I note that at least one count in the builder's claim was founded on an estoppel. In my opinion the part played by estoppel in this matter goes to the amount of the quantum meruit being the value of the work done. Because Mr Hobson acted to his detriment on the promise of Mr Fordham to pay the outstanding balance of $7,000 for the completion of house slab, I do not think he can be heard now to say that its value is other than $7,000.00 and that it is payable forthwith." 34The Tribunal's reasons indicate that the estoppel claim is not an alternative to the agreement, but an addendum: there was an agreement to pay for the value of the work on completion of the slab, and the plaintiff is estopped from denying (for the purposes of that agreement) that the value of the slab is a further $7,000. 35If there is no evidence of agreement, this finding also must be in error. 36Further, an estoppel by conduct requires a party to act to its detriment. The detriment in this case was alleged to be the pouring of the slab. 37There was evidence from Mr Fordham that the builder would not (or would not likely) have poured the slab if the $29,000 was not paid. But there was no evidence from either party that the builder would not have poured the slab if the owner had not promised to pay a further $7,000 on completion of the slab, and no questions to that effect were directed to the owner. I do not accept that the mere tendering of an invoice for $7,000 by the builder can be conduct sufficient to support an estoppel, in circumstances where there was discussion and agreement in respect of payment of the invoice for $29,000 in return for the pouring of the slab. 38The builder submits that it was: "...entirely open to the tribunal to conclude that the applicant encouraged the respondent to act on an assumption that a contact would come into existence or a promise be performed by the applicant (i.e. payment of $36,000) and the applicant intended the respondent to act on that assumption (by part performance of that promise in paying $29,000) and the respondent did act on that assumption to his detriment in that work was performed that otherwise would not have been done and he has not been paid the outstanding amount for which he undertook that work." 39To make out this submission, there needed to be some evidence, perhaps from the builder, to the effect that he poured the slab because of some conduct of the owner in respect of the invoice for $36,000, or the invoice for $7,000. No such evidence was identified. In the absence of evidence of "encouragement" or "acting on an assumption", there was no basis for the Tribunal's finding. I have already found that the mere tender of an invoice is insufficient.

Ground 4: the defendant could stop work until the $7,000 was paid. 40Again, finding (iii) in [9] above is dependent upon an agreement in respect of the $7,000, which I have rejected on the basis that there was no evidence to support it. It follows that there was no evidence to support an entitlement in the builder to stop work until the $7,000 was paid.

Ground 5: failure to make a finding of breach of contract by the builder. 41It is correct that the Tribunal did not make a finding in respect of breach of contract and expressly reserved that question. However, the Tribunal's finding (based on the finding of a varied agreement) that the builder was "empowered to stop work" precluded a finding of breach by the builder in so doing. 42In the absence of a valid variation, the Tribunal would need to determine whether either party was in breach of the agreement.

Conclusion to Grounds (1) - (5) 43All of these grounds arise out of the Tribunal's decision that there was an agreement between the plaintiff and the defendant to pay $7,000 on completion of the pouring of the main slab. I have found that there is no evidence to support such an agreement, so these grounds are made out. It follows that findings (ii) to (vii) are not supported by any evidence and must be rejected.

Grounds 6 and 9: Mr Simpson designed and would have certified the topping slab 44These grounds concern finding (xii) in [9] above. 45Mr Noonan, the plaintiff's expert, wrote on 5 August 2007: "The topping slab rectifications proposal by Mr Simpson is a suitable strength rectification provided it is designed and installed correctly." 46On 24 August 2007, Mr Simpson noted that he was: "...preparing a rectification plan and specification. The plan will involve a systematic inspection of the underside of the edge beam, the removal of any soft plant material found; the refilling of any gaps with compacted granite or high strength concrete slurry: the machine grinding/roughening of the slab surface; the installation of [unreadable] placing of reinforcing mesh and the pouring of a topping slab in two or three segments." "The structural characteristics of the new slab are intended to easily accommodate any movements in the founding soil through settlement or moisture content related shrinking and levelling. In reality the rectified slab will be far stiffer than the original design." 47The evidence also included a facsimile to Mr Fordham from Mr Simpson dated 28 October 2007 which comprised a topping slab plan with notes and specifications, a rectification procedure, and detailed sections at the edges of the existing slab and at the construction joint. 48Mr Noonan responded on 19 November 2007, writing: "We therefore advise that method of rectification is acceptable provided the additional notes are included in the design drawings for the edge beam rectification." 49In these circumstances it seems clear to me that there was evidence on which the Tribunal could conclude that Mr Simpson had designed the slab and was willing to certify as built. I therefore reject grounds 6 and 9 of the appeal.

Ground 7: there was a compromise agreement concerning the slab rectification which was binding on the parties 50This ground concerns finding (viii) in [9] above. 51I refer to the evidence quoted under the previous ground. That evidence supports a finding that there was a compromise agreement concerning the slab rectification, which was binding upon the parties. The plaintiff did not appear to submit otherwise. The primary submission on this ground was that it did not relieve the Tribunal of the need to determine breach (a matter dealt with under another ground of appeal): "If, as it appears, the Tribunal found that there was a compromise agreement between the parties that would govern the way the rectification of the slab progressed, then the Tribunal did not then go to decide which party was in breach of that compromise agreement. This was an error with respect to a matter of law." 52The plaintiff also submitted that no final plans were prepared. The evidence indicates that an updated plan was to be prepared which might not have been completed, but I think the plans provided at pages 105-106 of the Blue Appeal Book, together with the specifications and rectification procedure recorded thereon, were sufficient to enable a finding that a compromise agreement had been reached. 53Accordingly, I reject ground 7 of the grounds of appeal.

Ground 8: Mr Noonan resiled from his previous opinion. 54This ground concerns finding (xii) in [9] above. 55It does not appear to be in contest that Mr Noonan did resile from his previous opinion of agreement with Mr Simpson's slab topping proposal. At least Mr Noonan thought that, for reasons which he set out, demolition of the slab was a preferable course. 56Save for one matter, which is dealt with below, I do not find any errors with the way the Tribunal dealt with Mr Noonan's evidence. Mr Noonan withdrew his approval of the agreed topping slab solution, as the Tribunal found. Also, as the Tribunal found, Mr Noonan's reasons for so doing were not relevantly technical. Mr Noonan did not find that the topping slab would be defective or inappropriate in some way, but was concerned with matters of liability and costs. 57I think it was open to the Tribunal to adopt Mr Simpson's topping slab solution, as a reasonable and cost effective procedure, on the basis that Mr Noonan had once agreed with it but subsequently changed his mind. However, the Tribunal did not proceed on this basis. Rather, it found that there was a "possibility that Mr Noonan succumbed to pressure from Mr Fordham", and that "as a result" Mr Noonan's revised opinion was given little weight. 58The defendant refers to a letter from the plaintiff's solicitor (Blue AB 492-3) as "evidence to support that the change of opinion had been encouraged by the plaintiff's solicitors". Although that may be so, I do not think it was open to the Tribunal to attribute this possible motivation for Mr Noonan's change of mind and to reject his evidence because of it, in circumstances where Mr Noonan was not cross-examined and the possibility was not put to him. The Tribunal must be cautious before attributing an extraneous motive to an expert, and should not do so unless there is some factual foundation for it. 59Notwithstanding this error, as I have said, the ultimate finding of the Tribunal on the reasonable rectification procedure was open to it. It would be a matter for the Tribunal to decide whether it now makes the same finding in circumstances where (in the absence of further evidence) it was not entitled to reject Mr Noonan's revised view on the basis of the alleged possibility that Mr Noonan had succumbed to pressure from Mr Fordham.

Ground 10: plaintiff entitled to $8,000 only 60The plaintiff submits that there was no evidence to support the finding that the cost of rectification of the slab was $8,000 (see finding (x) in [9] above). 61The Tribunal found: "As it turns out, Mr Simpson's estimate of the cost of rectification was the only one before me. He indicated the cost at about $8,000 and I accept that estimate". and "In the circumstances of the present case I am well satisfied that Mr Fordham has not acted reasonably in rejecting the topping slab and has failed to mitigate his loss which would otherwise be $8,000." 62The basis of this finding is that in re-examination of Mr Simpson on the topic of the topping slab, the following exchange occurred: "Q. Would that have been cheap? A. Without doing the - work, it would have been in the ballpark of $8,000 to $10,000, maybe $12,000." 63It may be that the Tribunal has elevated the evidence of the cost of a slab topping to a level slightly higher than it bore. However, I think the evidence of Mr Simpson is some evidence that the cost of the slab may be $8,000. The fact that a finding of a cost of $9,000 or $10,000 may sit more comfortably with that evidence is not sufficient, in my view, to allow a finding by this court that the cost of $8,000 for the topping slab as found by the Tribunal had no evidentiary basis. 64The question whether the cost of the topping slab was the proper amount of the plaintiff's damage under the contract, if any, is another matter. I have already dealt with this issue under grounds 1 to 5. I should note that the Tribunal did not find that the plaintiff's loss was $8,000, rather that if there was a breach of contract, "it would sound in damages equal to the homeowners loss according to law, here the $8,000 for the topping slab".

Ground 11: the plaintiff failed to mitigate his loss. 65The finding at (xiii) in [9] above is criticised by the plaintiff on the basis that: "such a finding is relevant where a breach of contract is established [but that] the Member...expressly stated that he was making no finding of breach by the defendant." 66I accept the plaintiff's submission that the question of a failure to mitigate loss only arises where the Tribunal is endeavouring to assess the damage consequent upon a breach of contract. In the absence of a finding of breach of contract, a finding of a failure to mitigate loss is unnecessary. However, that does not assist the plaintiff on this appeal. If anything, it may support an argument that the $8,000 awarded to the plaintiff could not be sustained. 67This is another reason (or perhaps the same reason expressed another way) as to why the Tribunal needed to make a finding about breach of contract by the defendant. Unless it did so, there was no cause of action established which justified an award of $8,000 or some other sum, in favour of the plaintiff. 68However, there was a basis (as set out above with respect to grounds 6 to 10) for the Tribunal to find that by not installing a topping slab the plaintiff had failed to mitigate any loss to which he was entitled. I would therefore not reject this finding of the Tribunal.

Ground 12: the plaintiff's claim was for $91,000. 69On 19 October 2009, Member Durie noted: "That the owner has now obtained an owner/builder license and is proceeding with works. It may be necessary (with the consent of the parties) to have an initial hearing on liability and part of the quantum, and a later hearing on the balance of quantum." and on 19 November 2009, Tribunal Member Rossa noted: "The Tribunal further notes that the parties are agreed that the hearing of the application will be in two parts, with liability and part of the quantum to be determined initially, with the balance of the quantum to be determined at a later stage (if liability is established)." 70It was proposed that, as the Plaintiff submitted: "...the hearing was to determine liability on all issues and, subject to that decision on liability, then go on to determine quantum for the limited component of demolition and reconstruction of the slab." 71It is not readily apparent to me how the Commissioner could determine "part of the quantum". The difference between the cost of the slab, and the amount paid by the plaintiff to the defendant, is not a proper amount of damage. Certainly the cost of the slab is a component of the overall cost, and the amount paid to the builder is a relevant component of the calculation of the damages to which the plaintiff may become entitled. But the proposal by the parties to separate the cost of the slab from the amount of damages suffered by the plaintiff was misconceived, and seems likely to have contributed to the error made by the Tribunal. 72In the result, nothing turns on this ground, other than perhaps the question of costs. The plaintiff argued that on the question of costs: "...the amount awarded of $8,000 has been compared to the total claim of $91,129.91 instead of the amount referable to the more limited claim for the defective slab claim of $58,790.91. This has had an effect on the costs analysis". 73I do not accept this submission. Although the Tribunal member noted the claim for $95,000 in deciding the question of costs, the Tribunal member reserved liberty to the parties to make submissions on costs. 74The Tribunal member revisited the question of costs on 21 April 2011, and gave a decision which, although not in the Blue Appeal Book, was annexed to an affidavit of the plaintiff's solicitor read on the appeal and was thus part of the evidence before the court. 75The Tribunal member decided: "In response to orders and reasons published on 17 March 2011 the parties have filed and served detailed submissions on the question of costs. I have considered those submissions in deciding the question of costs. As I indicated in my written reasons, the builder has achieved substantial success in his claim but the homeowner's claim in the final analysis was more like $50,000.00, not over $90,000.00 as mentioned in my reasons. While that may be so, the claim as pleaded was in the higher amount and the bulk of the litigation was conducted on that basis. In any event, the difference between the two amounts in relation to the whole of the case and its outcome would have little effect on the exercise of the costs discretion." 76In the circumstances, I do not think that the Tribunal's decision on costs miscarried because of a failure to recognise that the claim was for $58,000 approximately rather than $91,000. The final decision by the Tribunal in respect of costs contemplated the lower value of the claim. 77However, the decision on costs was affected by the findings considered under grounds 1 to 5 above, which I have found to be in error. Accordingly, the question of costs will need to be revisited by the Tribunal.

Ground 13: not a final hearing 78I have dealt with this matter above. The Tribunal needed to determine whether there was a breach of contract in order to determine whether the plaintiff was entitled to an award of $8,000 on the primary claim. Such an award would have an impact on the appropriate costs order. Generally a plaintiff is entitled to the costs of a successful claim and the defendant would be entitled to the costs of the successful cross-claim, but the costs of a cross-claim would only be those costs which were in addition to those which were incurred in the primary claim: see Mahlo & Ors v Westpac Banking Corporation Ltd [1999] NSWCA 358 at [88]. Whether that general rule should apply in this particular case would be a matter for the Tribunal.

Conclusion 79The parties jointly submitted that if the Tribunal's decision was in error such that the orders could not be affirmed, I should send the matter back to the Tribunal for further consideration. In view of my findings in respect of grounds 1 to 5 of the appeal, the findings of the Tribunal must be set aside, and the matter remitted to the Tribunal for further consideration in accordance with these reasons. In accordance with s 67(7) of the CTTT Act, further evidence "may be given on the rehearing". 80As to the question of costs, the plaintiff has had some success on the appeal but not on all points. In these circumstances I propose to order that the plaintiff's costs on the appeal be costs of the proceedings in the Tribunal.

E. Conclusion and orders 81Accordingly, the orders are:

1. Allow the appeal.
2. Set aside the orders of the Tribunal.
3. Remit the matter to the Tribunal for a rehearing in accordance with these reasons, pursuant to ss 67(3)(b) and (4) of the CTTT Act.
4. Order that the plaintiff's costs of the appeal be costs of the proceedings in the Tribunal.

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: 02 August 2012