Gittany v Kesuma

NCAT Appeal Panel|2021-07-19

D Goldstein, Senior Member File Number(s): HB 20/39162

Background

This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal in which the appellant, who was the respondent in those proceedings, was ordered to pay the applicant in the proceedings (Mr Kesuma) the sum of $136,037.67.
The proceedings concerned a renewal application made by the respondent alleging a failure by the appellant to comply with a work order made in earlier proceedings between the same parties on 27 March 2020. The work order was made pursuant to s 48O(1)(c) of the Home Building Act 1989 (NSW) (HBA Act). The work order identified the specific work to be carried out by the appellant. The proceedings before the Tribunal consisted of an application by the respondent (which had been remitted for re-hearing following a successful appeal) and a cross-application made by the appellant. The Tribunal's orders and reasons for decision dealt with both applications.
The respondent filed a renewal application on 14 September 2020. He sought a money order under s 48O(1)(a) of the HBA in lieu of the earlier work order. The respondent claimed the sum of $88,236.77 for the cost of completing the unfinished work. His evidence in support of the money order was to the effect that at the date of lodging his renewal application, the appellant had not attended his residence to carry out any of the work ordered by the Tribunal.

The Tribunal's Reasons for Decision

The Tribunal found that the appellant had failed to comply with directions made by the Tribunal on 24 November 2020 for the filing of any evidence upon which the appellant may seek to rely in opposition to the respondent's renewal application. Accordingly, there was no evidence to contest the respondent's contentions that the appellant had failed to attend the site to undertake any of the work the subject of the work order.
The Tribunal accepted the respondent's evidence that the appellant had not complied with the work order (at [13]-14]) and set out its reasons for making a money order to replace the work order made on 27 March 2020: [16]-[17].
The appellant's solicitor Mr Campbell, who appeared at the hearing before the Tribunal on 8 February 2021 and before us on the appeal, opposed the making of a money order. The basis for opposing the making of the order was that the respondent's property had been sold after the renewal application was lodged so that the respondent's claim was "misconceived" because there was no evidence of any loss incurred by the respondent as a consequence of the sale.
The Tribunal at [18]-[25] reviewed the relevant authorities where a party may be entitled to damages for defective building work, notwithstanding circumstances where the property the subject of the rectification work had been sold, so that the rectification work for which damages were referrable was either not carried out or could never be carried out. Based on the authorities it considered, the Tribunal adopted the proposition that a sale of a property does not of itself displace an entitlement to damages according to the rectification measure and that the sale of a property does not affect a party's accrued right to rectification damages (at [31]): citing Giles JA in Westpoint Management Ltd v Chocolate Factory Apartments Ltd; Chocolate Factory Apartments v Westpoint Finance & Ors [2007] NSWCA 253 (Chocolate Factory) at [49].
The Tribunal at [25] stated that it derived "guidance to resolving the issue of whether a monetary order on this renewal application is an appropriate order to make" from the decision of Giles JA in Chocolate Factory at [62]. The Tribunal identified the question for its determination as to why the rectification work would never be carried out: [25].
The Tribunal concluded that there was no fault on the part of the respondent preventing the work from being undertaken and that the most significant reason that the rectification was not carried out and never could be carried out was that the appellant, for reasons not explained in any evidence before the Tribunal, had failed or refused to do the work when ordered to do so on 27 March 2020: at [29]
The Tribunal also referred to the decision of the Appeal Panel in Blessed Sydney Constructions Pty Ltd v Vasudevan [2018] NSWCATAP 98 at [47] where the Appeal Panel had regard to the making of orders within the meaning of clause 8 of Schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act): Accordingly, in our view, orders "As [the Tribunal] could have made when the matter was originally determined" should be construed as referring to orders that the Tribunal had authority to make when the matter was originally determined, whether those orders were appropriate or not in the circumstances at that time. In the case of an application under the HB Act, such orders include all those in s 48O.
The Tribunal also assessed (at [33]) the evidence served previously by the respondent's solicitors that had quantified the cost of undertaking the defective and outstanding work the subject of the work order in the sum of $136,037.67. In the absence of evidence by the appellant disputing the cost of rectification, the Tribunal awarded the "un-contradicted" amount of $136,037.67, notwithstanding the respondent's renewal application only claimed the making of a money order in the sum of $88,236.77.
On 2 June 2021 the Tribunal stayed, until further order, the operation of the Tribunal's money order to the extent that it required payment by the appellant of any amount exceeding $88,236.77.

Issues on appeal

There were four main issues raised at the hearing of the appeal.
The first concerned the amount sought by the respondent and whether it was in the sum of $88,236.77 claimed in the renewal application or the amount of $136,037.67 as found by the Tribunal. This was covered in several grounds of appeal in the Notice of Appeal, namely Grounds 3, 4, 8 and 12. The respondent consented to the variation of the Tribunal's money order to $88,236.77. We therefore do not need to consider this issue further. We have varied the money order made by the Tribunal from $136,037.67 to $88,236.77.
The second issue was whether any of the appellant's ten grounds of appeal contended that the Tribunal made an error of law. The appellant submitted that Ground 6 of the Notice of Appeal identified an error of law. This concerned the Tribunal's reliance on the authorities referred to at [18]-[25] of the Tribunal's reasons including Chocolate Factory, without affording the appellant the opportunity to make submissions on those authorities. The appellant submitted that the Tribunal failed to have proper regard to the sale of the property as an intervening act disentitling the respondent to any damages for rectification work that will no longer be undertaken. This ground therefore raised both a complaint alleging a denial of procedural fairness and an error by the Tribunal in the application of the relevant law to the facts before it.
The third issue concerned the Tribunal's finding that the appellant had failed to serve any evidence contrary to the directions for the filing of evidence made by the Tribunal. This was raised in Grounds 5, 7 and 10 of the Notice of Appeal. The appellant submitted that since the respondent did not serve evidence in the renewal application there was "no evidence to respond to". The appellant stated that if the appellant had been served with evidence in support of the renewal application, then he would have filed an expert report dated 31 October 2019 showing that no further work was required at the property. Accordingly, the appellant contended that there had been a substantial miscarriage of justice.
The fourth issue was whether the renewal application was an abuse of process. This was raised in Ground 9 of the Notice of Appeal. The appellant contended that the undertaking of any work pursuant to the work order was contingent on the respondent first paying the appellant the sum of $21,500 ordered in earlier proceedings between the same parties; that is, the appellant's cross-application (HB19/09333). It was common ground that the respondent had not paid the appellant that sum of $21,500.

Grounds of appeal, response to appeal and submissions

The Notice of Appeal was filed on 5 May 2021. It annexed a document described as "Grounds of Appeal" setting out ten separate grounds of appeal numbered 3-12 (paragraphs 1 and 2 were introductory only), being those to which we have referred above. The ten grounds were expressed in a narrative form and required some explanation by appellant's solicitor at the hearing.
At the hearing, the appellant distilled the ten grounds and was able to re-formulate them essentially into the four issues that we have referred to above. As we have stated, there is no longer any issue with respect to the quantum of the money order made by the Tribunal. The only ground not covered by the above grouping of the ten Grounds of Appeal was Ground 11, which was not a ground of appeal in any event. It was simply a statement to the effect that the appellant had not yet obtained a sound recording of the hearing before the Tribunal and when he does, he may wish to add further grounds of appeal. The appellant provided a record of the transcript of the hearing but did not seek to amend or add to his original grounds of appeal.
The appellant filed a written submission together with a folder of documents on 16 June 2021.
There was no Reply to Appeal filed by the respondent. The respondent filed and served written submissions on 31 May 2021, which included submissions in relation to the stay hearing and also in response to the appellant's Notice of Appeal and Grounds of Appeal.
In his submissions, the respondent advised that he accepted the lesser figure of $88,236.77 rather than the higher amount awarded by the Tribunal.
The respondent submitted that he had filed all evidence and submissions in support of his renewal application and that the appellant did not serve any evidence. The respondent reiterated his position before the Tribunal that despite numerous opportunities, the appellant had never attended the premises to perform any of the works the subject of the work order.

Statutory basis of the appeal

An appellant may appeal from a decision of the Tribunal as of right on any question of law or otherwise with the leave of the Appeal Panel: s 80(2)(b) of the NCAT Act.
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel at [13] set out a non-exclusive list of questions of law, including: 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.
A question of law also arises where it involves consideration of whether a court or tribunal has identified or applied the relevant and correct legal test: Federal Commission of Taxation v Trail Brothers Steel & Plastics Pty Ltd [2010] FCAFC 94; (2010) 186 FCR 410 at [13].

Questions of law

We are satisfied that the appeal raises the following questions of law and that leave to appeal is not required in respect of the following: 1. Whether the Tribunal had proper regard to and applied the correct principles of law from the relevant authorities when awarding damages for rectification (in the form of the money order) in circumstances where the respondent had sold the premises at the time the money order was made; and 2. Whether the Tribunal failed to afford the appellant the opportunity to make submissions in respect of the proper approach to the assessment of damages for rectification and the relevant authorities to which the Tribunal should have regard.

Leave to appeal

Two of the issues identified above raise matters for which the appellant requires leave to appeal.
The first is whether the Tribunal was wrong to find that the appellant did not serve any evidence to challenge the making of the money order when the respondent did not serve evidence on the renewal application so there was "no evidence to respond to". The appellant contended that there had been a substantial miscarriage of justice because if he had been served with evidence in support of the renewal application, then he would have relied on an expert report showing that no further work was required at the respondent's property.
This is not a "no evidence" point in respect of which the Tribunal made a finding that was not supported by evidence so as to raise a question of law. The High Court in Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390 confirmed that a "no evidence" ground of appeal raises a question of law. Hayne, Heydon, Crennan and Kiefel JJ held at [91]: "Whether there was no evidence to support a factual finding is a question of law, not a question of fact."
Rather, the ground of appeal and submissions in support of it contended that the Tribunal erred in finding that the appellant did not file any evidence when the reason he did not file evidence was because the respondent did not file his evidence in accordance with the directions by the Tribunal. This appears to us to be a submission that the finding by the Tribunal was made on an incorrect or mistaken basis.
A "factually incorrect" or "mistaken" finding does not give rise to a question of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, Mason CJ (Brennan J agreeing) at [88]-[89]. Accordingly, leave is required.
The second issue is the alleged abuse of process by the respondent filing the renewal application. In our view, this does not raise a question of law for our determination. Rather, it is arguably relevant to whether leave to appeal should be granted on the basis that the decision was not fair and equitable. The basis on which this ground was put was that because the respondent failed to pay the sum of $21,500 to the appellant that he was ordered to pay in separate proceedings (and unsuccessfully challenged on appeal), the respondent was not entitled to seek a money order from the Tribunal.
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 of the NCAT Act, 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; or (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; or (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.

The Appellant's failure to serve evidence

For the reason that follow, we have decided that leave to appeal should not be given for the appellant in respect to the Tribunal's finding that the appellant did not serve any evidence.
The Tribunal found that the appellant failed to adduce evidence disputing the cost of rectification: at [10] and [33].
Beyond the assertion raised in the Ground 5 of the Notice of Appeal, there is no evidence before us to cause us to question the correctness of the Tribunal's finding. Our review of the transcript provided by the appellant satisfies us that the Tribunal's finding was correct. Mr Campbell appeared before the Tribunal on behalf of the appellant. He informed the Tribunal that he had acted for the appellant "for some time". He submitted to the Tribunal that the respondent's claim was "misconceived" because there was no loss by reason of the sale of the property. At no point is Mr Campbell recorded as contending that there was no evidence from which the Tribunal could assess the costs of rectification. At its highest, Mr Campbell told the Tribunal that his client did not serve any evidence because the respondent did not serve any evidence.
There are two apparent answers to that submission. First, it is clear from the renewal application that the respondent was relying on the same evidence referred to as an "expert report" and "Scott schedule" less the deductions set out in the renewal application to claim the net sum of $88,236.77. Based on the transcript provided to us, it appears to us that the sole basis of the appellant's objection to the money order was that the renewal application was "misconceived" and at no time was any challenge directed - even in the alternative - to the rectification costs claimed in the renewal application.
Second, the respondent challenged Mr Campbell's contention that no evidence had been served on his client. The respondent said the evidence was served at the appellant's solicitors' office on 11 or 12 September 2020. Since that has in effect been disputed by the appellant on this appeal by Ground 5 of the Notice of Appeal, it was incumbent on the appellant to adduce evidence to contradict the respondent's assertion. The appellant has not done so. Further, the respondent submitted to us on this appeal that the evidence that he referred to before the Tribunal as "the 10 September and the 15 September submissions" was served and signed for at the office of Bannermans Lawyers on 15 September 2020. He informed the Tribunal that he only sought to rely on those two sets of submissions. The respondent was relying on evidence that formed the basis of the earlier work order being made which included costings for that same rectification work.
It would appear to us that if the appellant was caught by surprise because he thought that the respondent did not serve anything further as directed on 24 November 2020 on or before 8 December 2020, then he should have sought an adjournment. In any event, as we have found, Mr Campbell did not in any way seek to challenge the respondent's quantification of the rectification costs.
In the circumstances, the finding by the Tribunal that the appellant had failed to serve any evidence was: 1. factually correct; 2. most likely the outcome of a forensic decision made by the appellant to challenge the respondent's entitlement to a money order as a matter of a disputed legal entitlement and not as a matter of fact or based on a challenge to the quantum claimed; 3. irrelevant to the Tribunal's findings that the respondent was entitled to a money order; and 4. the consequence of the appellant's solicitor not seeking an adjournment if he needed more time or some further opportunity to deal with this issue if the appellant wanted to challenge the renewal application on some other factual or legal basis not already advanced.

Alleged abuse of process

We have also decided that leave to appeal should not be given for the appellant in respect of the alleged "abuse of process".
First, the appellant did not raise the alleged abuse of process before the Tribunal. The order that the respondent pay the appellant the sum of $21,500 was made on 27 March 2020. The hearing of the renewal application was on 15 April 2021. The appellant had ample opportunity to argue the alleged abuse of process in the proceedings before the Tribunal.
Second, we can discern no abuse of process in the respondent filing a renewal application in proceedings separate to the proceedings ordering him to pay $21,500 to the appellant. This is particularly so when the uncontested evidence, accepted by the Tribunal, was that the appellant had failed to attend the premises to undertake any of the work the subject of the work order prior to the filing of the renewal application.
Third, the appellant relied on Modaressi v Aarf [2020] NSWSC 1627 (Modaressi) (wrongly cited as Moderessi v Araf) to submit that there are limits to an entitlement to commence "fresh proceedings", such as where the defendant's costs of the first proceedings remain unpaid or they are vexatious or an abuse of process. Modaressi is not pertinent to the matters before us. In Modaressi there was the non-payment of costs that were payable in respect of earlier proceedings and the fresh proceeding was an abuse of process because the plaintiff was seeking the same relief as those earlier proceedings that were dismissed for a failure on the part of the plaintiff to appear. Further, Modaressi did not concern the situation raised before us where the default that caused the renewal or "fresh proceeding" was the appellant's failure to comply with a Tribunal order and the evidence relied upon by the respondent to renew the proceedings was not challenged or disputed when it could have been.
Fourth, the reasons for contending an abuse of process included matters covered by other grounds of appeal which we have accepted as raising a question of law and we deal with later in these reasons.
Fifth, we do not accept that the work order made by the Tribunal was contingent on the respondent paying the appellant $21,500 in any event. The Tribunal's orders are not expressed in this way and it cannot be implied either from the orders themselves or from the reasons for decision that the work order made in favour of the respondent was contingent on the respondent complying with the money order made in favour of the appellant. It has always been open to the appellant to enforce the money order made in his favour. Indeed, the material provided on appeal indicates that the appellant has taken steps to do so.
We are of the opinion that the appellant has not made out any of the grounds in cl 12(1) of Schedule 4 of the NCAT Act for us to be satisfied that the renewal application constituted an abuse of process so as to warrant us granting leave to appeal on that ground. The appellant has not established he may have suffered a substantial miscarriage of justice by the Tribunal allowing the respondent's renewal application to be heard and determined.

Questions of law

We propose to deal with the issues on the appeal that we have referred to above and consider to be questions of law as follows: 1. Whether the Tribunal had proper regard to and applied the correct principles of law from the relevant authorities when awarding damages for rectification (in the form of the money order) in circumstances where the respondent had sold the premises at the time the money order was made; and 2. Whether the appellant was denied the opportunity to make submissions in respect of the proper approach to the assessment of damages for rectification and the authorities to which the Tribunal should have regard in addition to those relied upon by the Tribunal at [18]-[25].
Given the significant overlap in these two issues and they way in which they were set out in the Grounds of Appeal and presented at the hearing before us, it is convenient to consider with them together in our reasons which follow.
As we have stated above, the Tribunal identified and discussed the relevant authorities that dealt with the proper approach to the assessment of damages for rectification where the premises to be rectified have been sold.
We are satisfied that the Tribunal directed itself to the proper issue for its consideration having regard to the authorities including Chocolate Factory, namely the reasons as to why the rectification work would never be carried out.
The Tribunal found that "the most significant reason why the rectification work was not carried out or never can be carried out, is that the builder, ... failed or refused to carry out the rectification work ordered on 27 March 2020": [29]. The appellant did not challenge that finding on the appeal.
Before the Tribunal, the appellant did not dispute the cost of rectification claimed by the respondent but instead, as noted by the Tribunal at [11] and [19], opposed the making of a money order solely on the basis that the respondent was not entitled to damages because he had sold the dwelling the subject of the proceedings and there was no evidence of loss.
In our opinion, based on the record of the hearing before the Tribunal that was provided to us by the appellant, the appellant advanced a case consistent with that described by the Tribunal. In the circumstances, the appellant could not be regarded as having been denied the opportunity to advance submissions and not being able to refer to any relevant authorities in opposing the making of a money order. Mr Campbell is recorded as saying to the Tribunal that he was aware of the listing of the renewal application (in circumstances where the Tribunal contacted him at the start of the hearing to arrange for his appearance). Therefore, any failure to refer to or rely upon authorities which the appellant contends he was denied the opportunity of raising with the Tribunal cannot be the fault of the Tribunal or amount to a denial of procedural fairness. Mr Campbell is not recorded as seeking an adjournment to be given time to make submissions on the relevant legal principles to be applied where damages for rectification are sought in respect of a property that has been sold at the time that damages are to be assessed.
Even assuming that Mr Campbell may have only subsequently became aware of the authorities that he submitted were relevant and that he was denied an opportunity of raising with the Tribunal, then he could have raised this in the usual way by informing the Tribunal of those authorities after the hearing and if necessary, seeking leave to provide a further submission either in writing or orally before the Tribunal's Reasons for Decision were delivered. There is no evidence that the appellant sought to do any of those things.
At its highest, the appellant contended that there were two authorities that would have been relied by him upon if he had been aware that the Tribunal would have embarked on a consideration of those authorities discussed at [18] to [25] of the Tribunal's Reasons for Decision. The first is the decision referred to in the appellant's written submissions without citation as Allianz v Waterbrook. The decision (with citation) is Allianz v Waterbrook [2009] NSWCA 224 (Waterbrook). In Waterbrook, the Court comprised Giles JA (in dissent) and the majority of Hodgson and Ipp JJA.
Factually, Waterbrook bears no relationship to the matters before us on the appeal and is distinguishable. Waterbrook involved a claim by a successor in tile who purchased a property comprising a retirement village with full knowledge of the defects in respect of which Waterbrook (the purchaser) was seeking damages. Further, the claim for damages was against the insurer Allianz because the builder was in liquidation.
As found by Ipp JA at [101]: ... The successor in title may have purchased the building at a discount that takes into account the cost of remedying the defects. Were that to have occurred it would be difficult to contend that the successor in title suffered a loss. Were that not to have occurred, it might be argued that any loss is due to the fault of the successor in title in overpaying for the building in full knowledge of its defects.
At [110]-[111] Ipp JA further stated: 110. In my opinion, applying the same reasoning, a successor in title who acquires a building in full knowledge of its defects, suffers no loss from the existence of those defects. In those circumstances, the builder's breach of statutory warranty could not be said to have diminished the successor's assets, nor increased its liabilities. Any adverse impact to the successor's financial position, and any loss to the successor, would result from the successor knowingly and deliberately paying more for the building than it was worth. The loss would be caused by the successor's own decision to purchase at the agreed price. 111. The observations in [110] are predicated on the "full knowledge" of the defects being not only knowledge of the existence of the defects but also knowledge of their significance. A party may know of the existence of defects (because they are patent), but may not appreciate - even acting reasonably - that major expenditure would be required to remedy them.
We do not accept the submission made by the appellant that the Tribunal erred in law by having regard to Chocolate Factory and not the later decision of Watermark. The intervening factor severing the causal link to otherwise entitle Watermark to sue Allianz was its "full knowledge" of the defects in the property before it was purchased. If the decision of Watermark had been relied upon by the appellant or expressly considered by the Tribunal, then we are not satisfied that the Tribunal would have reached any different conclusion than that which it did, namely that the sale of the property did not disentitle the respondent to the making of a money order in his favour.
The appellant also relied upon Watermark to submit that despite his dissent on other grounds, Giles JA agreed with Ipp JA that a subsequent purchaser should not be permitted double recovery where there is a claim for a breach of a statutory warranty under the HBA so that the builder would in effect be required to pay twice for the same loss. As we understand the submission, the appellant is relying on that aspect of the decision in Watermark to oppose the making of the money order on the basis - which has not been established by any evidence - that the subsequent purchaser of the respondent's property may later sue the appellant for breach of the statutory warranty under the HBA. If that were to occur, then it would be a matter for the appellant to challenge, having regard to the terms of the contract of sale, the knowledge of the purchaser of the defects, time bars and the like. However these considerations are not a proper basis for the Tribunal to refuse to make a money order in the proceedings before it, given: 1. the appellant's default in complying with the work order; 2. the work order was made before the respondent's sale of the property; 3. the sale of the property was unrelated to any reason for the appellant not undertaking any rectification work specified in that work order; 4. the proposition put on behalf of the appellant is at the present, no more than mere speculation.
The appellant also submitted that there are well recognised limits on the entitlement of a party to have the Tribunal put in place a money order where a work order has not been completed. The appellant submitted that it is still necessary for the owner to prove that they have suffered a loss as a result of some breach by the builder, referring to C&E Critharis Constructions Pty Ltd v Lubic Metre Pty Ltd (without citation and incorrectly identifying the respondent as Lubic). The correct name of the case and its citation is C&E Critharis Constructions Pty Ltd v Cubic Metre Pty Ltd [2020] NSWCA 348 (Critharis).
The decision in Critharis was an application for leave to appeal a decision by the primary judge which was itself an appeal from a decision of the Local Court. Critharis was not a substantive hearing on the merits. The application for leave to appeal was dismissed.
The Court (Macfarlan and McCallum JJA) relevantly found at [12]-[13]: [12] The Builder's third proposed ground of appeal is that Adamson J erred in accepting that there was "no prospect" that the rectification would be carried out by the Builder. This proposed ground of appeal raises a pure question of fact. As the Builder has not identified any special circumstances that would cause this Court to depart from its general disinclination to grant leave to appeal in respect of such questions, this ground does not advance the Builder's application for leave to appeal. [13] A further ground of appeal appeared in the Builder's filed Notice of Appeal (as to which see [15] below) but it added nothing to the points made under the other grounds we have addressed above. It asserted, in effect, that the Builder did not need to prove that it suffered loss in order to recover substantial damages. It will be apparent from what we have said above that we reject that proposition.
To place the Court of Appeal's decision in its full context, the decision of Adamson J for which leave to appeal was sought by the builder (Critharis), was Cubic Metre Pty Ltd v C&E Critharis Constructions Pty Ltd [2020] NSWSC 479 found at [61]: 61. The Builder failed to establish its claim for the cost of rectification because no work had been done, there were no proceedings on foot between the Owner and the Builder, the breach by the Builder of the contract with the Owner was statute-barred and the Builder's "moral" obligation to the Owner did not give rise to damages recoverable against the Contractor [a subcontractor to the Builder].
Further, at [67] her Honour found that the evidence given by Mr Critharis was that he had been paid in full by the owner for the work and he did not raise any issue with the owner, who was called as a witness in the builder's case and who admitted that there were no proceedings between him and the builder.
The decision of the Court of Appeal in Critharis bears no relationship to the matters raised for our consideration on the appeal. As in the case of the decision in Watermark, had the appellant sought to rely upon Critharis or had the Tribunal expressly taken it into consideration, then it would not have changed the Tribunal's decision to make a money order in favour of the respondent. Moreover, the decision of the Court of Appeal in Critharis endorsed the Court's decision in Chocolate Factory (at [11]) which the Tribunal expressly referred to and applied in its Reasons for Decision.
The Tribunal made it clear that the money order was made because of the appellant's failure to comply with and undertake the works the subject of the work order. The money order was no more than an order quantifying the cost of non-compliance with the work order already made by the Tribunal before the sale of the property. In that respect, the sale of the property after the making of the work order was irrelevant in the Tribunal's approach to having the costs of that work order quantified and made into a money order.
In our opinion, the appellant has not displaced the well-established legal presumption that the sale of a property that is the subject of a claim for damages for rectification does not of itself displace an entitlement to claim damages. A right to rectification damages is an accrued right. In our opinion, that right accrued to the respondent at the time that the Tribunal made the work order and that entitlement remained unfulfilled at the time the application for a money order was made. This accords with the reasoning of the Appeal Panel in Blessed Sydney Constructions at [47] referred to by the Tribunal and which we have set out above. The sale of the house after the making of the work order did not displace the respondent's right to any remedy at all. The remedy, originally in the form of a work order, was simply replaced by a different form of order and the sale of the property had no bearing on that entitlement.
Therefore, we are of the view that the making of the work order did not disentitle the respondent to rectification damages for the defective or incomplete work the subject of that same work order in the form of a money order, even though the respondent sold the premises after filing his renewal application. The respondent's rights to an order in his favour accrued at the time the work order was made and not at the time the money order was made. The form of that order does not change the legal basis of his entitlement.

Disposition of the appeal

For the above reasons, other than in respect of the quantum of the money order, leave to appeal is refused and the appeal is dismissed.

Costs

As the amount in the Tribunal proceedings exceeds $30,000, the operation of r 38A of the Civil and Administrative Tribunal Rules 2014 means that r 38 applies to the costs application. Special circumstances do not need to be established to warrant an order for costs.
We did not hear from the parties in relation to costs. We have therefore made orders in the event that an application for costs is made.

Orders

We make the following orders: 1. The order made in HB 20/39162 on 15 April 2021 is varied to read: "Joe Gittany must pay Edy Kesuma the sum of $88,236.77 immediately". 2. The stay ordered on 2 June 2021 is lifted. 3. Leave to appeal is refused. 4. The appeal is otherwise dismissed. 5. Any application for costs is to be provided to the Appeal Panel and the other party, supported by submissions, within 14 days of the date of publication of these orders. 6. Any submissions in response to the costs application are to be provided to the Appeal Panel and to the other party within 28 days of the date of publication of these orders. 7. Any submissions in reply are to be provided to the Appeal Panel and the other party within 35 days of the date of publication of these orders. 8. Costs submissions are not to exceed five pages in length and must address whether the party agrees to costs being determined without a hearing on the basis of the submissions provided.

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 10 November 2021 - Appellant's name corrected from 'Joseph' to 'Joe' by order of the Panel. 23 November 2021 - Further Amendment to reflect change made 10/11/21 to change name at [78] and Orders on Coversheet. 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: 23 November 2021

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